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11 January 2016
U.S. Citizen Who Resides in Mexico Arrested Based on DEA Seizure of Twelve Pounds of HeroinRead the Press Release
ALBUQUERQUE – Ricardo Raul Murrietta-Romero, 38, a U.S. citizen who resides in Nogales, Mexico, made his initial appearance today in federal court in Albuquerque, N.M., on a criminal complaint charging him with possession of more than 12 pounds of heroin with intent to distribute. Murrietta-Romero remains in federal custody pending a preliminary hearing and a detention hearing which are scheduled for tomorrow morning.
Murrietta-Romero was arrested yesterday after DEA agents allegedly found approximately 12.208 pounds of heroin in his luggage at the Greyhound Bus Station in Albuquerque. If convicted on the charge in the criminal complaint, Murrietta-Romero faces a statutory penalty of a mandatory minimum of ten years and maximum of life in federal prison. Charges in criminal complaints are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Rumaldo R. Armijo is prosecuting the case.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
U.S. Citizen Indicted for Supporting and Receiving Military Training from Al ShabaabRead the Press Release
Maalik Alim Jones, 31, of Maryland, was indicted based on his alleged support of al Shabaab, a designated foreign terrorist organization based in Somalia that is allied with al Qaeda. Jones, a U.S. citizen, was presented before Chief U.S. Magistrate Judge Frank Maas of the Southern District of New York on Dec. 19, 2015, pursuant to a criminal complaint.
The charges were announced today by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara of the Southern District of New York, Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department.
“Maalik Alim Jones was charged with providing material support to al Shabaab and receiving training from the terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to hold accountable those who seek to provide material support to terrorists.”
“As alleged, Maalik Alim Jones traveled to Somalia, received military training from al Shabaab, and took up arms as a terrorist fighter with an organization that has declared the United States a target,” said U.S. Attorney Bharara. “Now, as ever, we are determined to protect the people of this country from the murderous designs of terrorist organizations. Having allegedly sworn allegiance to al Shabaab, a terrorist organization bent on destroying America, Maalik Jones will now face American justice in a Manhattan federal court.”
“This case highlights the international nature of terrorism and the criminal actions taken in pursuit of attacks against others,” said Assistant Director in Charge Rodriguez. “As alleged herein, Maalik Alim Jones, from Maryland, joined a terrorist organization in Somalia, traveled from New York to Kenya, through Morocco and the UAE, where he was trained to kill and destroy communities. Recently he was caught trying to get to Yemen. We applaud the thorough investigation by the agents and task force officers on FBI’s JTTF, who were able to identify his activities, stop his plans, and bring him here to face the U.S. justice system.”
“As alleged, Jones traveled to Somalia to fight on behalf of al Shabaab, learning to fire an AK-47 and rocket propelled grenade,” said Commissioner Bratton. “He then used this training to attack the Kenyan government, fighting on behalf of this terrorist organization. The work by detectives and agents of the New York Joint Terrorism Task Force should be commended, and the prosecutors of the Southern District of New York whose efforts led to this indictment.”
According to the allegations in the indictment and the complaint, which was unsealed today:
In or about July 2011, Jones traveled via commercial aircraft from New York to Kenya, with stopovers in Morocco and the United Arab Emirates. After arriving in Kenya, Jones traveled by land from Kenya to Somalia where he trained, worked and fought with al Shabaab in Somalia. Among other things, Jones received military training at an al Shabaab training camp, where he learned to operate an AK-47 assault rifle and rocket-propelled grenades. Jones also became a member of al Shabaab’s specialized fighting force, Jaysh Ayman, and participated in combat against soldiers of the Kenyan government on behalf of al Shabaab.
Jones has appeared with other al Shabaab fighters in at least two videos that were recovered from an al Shabaab fighter. In one of the videos, Jones possessed a firearm, and is seen with several al Shabaab fighters who, on June 14, 2015, participated in an attack on a Kenyan Defense Force base in Lamu County, Kenya, during which two Kenyan soldiers were killed.
Jones is charged with conspiracy to provide material support to al Shabaab; providing, and attempting to provide, material support to al Shabaab; conspiracy to receive military-type training from al Shabaab; receipt of military-type training from al Shabaab; and possessing, carrying and using firearms during and in relation to a crime of violence. If convicted, Jones faces a maximum sentence of life imprisonment on the charges. In addition, the firearms offense carries a mandatory minimum sentence of 30 years’ imprisonment. The minimum and maximum potential sentences are prescribed by Congress and are provided here for information purposes only, as any sentencing of the defendant would be determined by the court.
The charges contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the investigative work of the FBI’s New York Joint Terrorism Task Force. The Justice Department’s Office of International Affairs also provided significant assistance.
This case is being prosecuted by Assistant U.S. Attorneys Sean S. Buckley and Andrew J. DeFilippis of the Southern District of New York and Trial Attorney Josh Parecki of the National Security Division’s Counterterrorism Section.
Maalik Jones Indictment
Maalik Jones Complaint
U.S. Attorney, Muslim-American Leaders to Host Community ConversationRead the Press Release
CINCINNATI – U.S. Attorney Carter M. Stewart will join members of the Board of Directors of the Islamic Center of Greater Cincinnati (ICGC) and other regional Muslim-American leaders to discuss building understanding and safety for Muslim-American communities.
The briefing will be held:
TOMORROW: JANUARY 12, 2016
WHEN: 4:00 P.M.
WHERE: Islamic Center of Greater Cincinnati
Education Building
8092 Plantation Drive
West Chester, OH 45069
WHO: U.S. Attorney Carter M. Stewart
Shakila Ahmad, President of the Board, ICGC
Community leaders
Room available beginning at 3:45 P.M. No TV lighting or multbox will be available. ID will be required for entrance.
U.S. Attorney's Office, Law Enforcement Agencies & Community Organizations Gather to Recognize "National Slavery and Human Trafficking Prevention Month" and to Raise Community AwarenessRead the Press Release
CHARLOTTE, N.C. – The U.S. Attorney’s Office, law enforcement agencies and community organizations gathered today in recognition of “National Slavery and Human Trafficking Prevention Month,” announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
During an early morning press conference, U.S. Attorney Rose emphasized the importance of raising awareness and educating the public about human trafficking and highlighted the continued efforts of law enforcement and the Charlotte Metropolitan Human Trafficking Task Force against one of the most grievous crimes impacting our communities today.
“Over the past five years, our response to the scourge of human trafficking has been persistent and aggressive. The U.S. Attorney’s Office has worked hand-in-hand with our law enforcement partners, community organizations and victims’ services groups to forge a strong coalition against human trafficking and to put end in the sex trafficking of children. While we’ve succeeded in raising public awareness, bringing perpetrators to justice and assisting victims rescued from a cycle of abuse and exploitation, our work is far from over. As we move forward, we will continue our record of success and draw upon our collective resources to identify and assist trafficking victims and put behind bars those who seek to profit from the exploitation of other human beings,” said U.S. Attorney Rose.
“Human trafficking is a form of modern-day slavery. Homeland Security Investigations continues to pursue the perpetrators of this heinous crime as one of its highest priorities, via a coordinated global effort with our federal, state and local law enforcement partners,” said Special Agent in Charge of HSI Atlanta Nick Annan. “Over the past two years HSI has doubled its number of human trafficking arrest and we will continue our relentless pursuit to investigate and seek prosecution of these criminals while also ensuring the victims of this terrible crime are rescued and get the care they need.”
“Human trafficking victims are trapped in lives of misery, often beaten, starved, and forced to work as prostitutes or to take grueling jobs with little or no pay. The FBI devotes a significant amount of resources to hold those accountable who sacrifice another person’s civil rights and freedom for their own profit,” said John A. Strong, Special Agent in Charge of the FBI in North Carolina.
The Charlotte Metropolitan Human Trafficking Task Force comprises law enforcement agencies – including ICE-Homeland Security Investigations, the FBI, and the Charlotte-Mecklenburg Police Department – federal and state prosecutors and community organizations. During today’s press conference, U.S. Attorney Rose praised the work of the task force for their ongoing collaboration and thanked its community partners for their unwavering commitment and critical assistance to rescued victims.
“Our community organizations have stepped up to the plate and have been incredible allies in our fight against human trafficking, by providing much-needed short and long-term assistance to those rescued from the hands of sex traffickers. As the victims slowly begin to rebuild their lives, access to resources, including food, shelter, medical and mental health services and legal assistance, is critical. Time and again, we have relied on our community groups to provide rescued victims with the recovery support they need, and their commitment and willingness to help has been nothing short of extraordinary,” said U.S. Attorney Rose.
This morning’s press conference was followed by a half-day training workshop organized by the task force. The workshop was open to the public with a special emphasis on members of the hospitality industry. The goal of the training was to enhance participants’ understanding of human trafficking and highlight best practices for supporting law enforcement in combating sex trafficking.
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If you believe you are the victim of a trafficking situation or may have information about a potential trafficking situation, call the National Human Trafficking Resource Center (NHTRC) at 1-888-373-7888. NHTRC is a national, toll-free hotline, with specialists available to answer calls from anywhere in the country, 24 hours a day, seven days a week, every day of the year related to potential trafficking victims, suspicious behaviors, and/or locations where trafficking is suspected to occur. You can also submit a tip to the NHTRC online.
You can also contact ICE-Homeland Security Investigations at 1-866-DHS-2-ICE (1-866-347-2423) or the Charlotte Office of the FBI at 704-672-6100.
Two Mercer County men prosecuted for distributing pain pillsRead the Press Release
BLUEFIELD, W.Va. – Two Mercer County men appeared in federal court today on drug charges, announced Acting United States Attorney Carol Casto.
George F. Brooks Jr., 45, of Princeton, was sentenced to eight years in federal prison for distribution of oxymorphone. Brooks previously pleaded guilty in June of 2015, and admitted that on December 3, 2014, he sold oxymorphone to a confidential informant working with law enforcement. The drug deal took place on High Street in Princeton.
Keith Joseph Alfred, 42, of Bluefield, pleaded guilty to distribution of hydromorphone. Alfred admitted that on October 22, 2013, in Bluewell, he sold four hydromorphone pills to a confidential informant working with law enforcement. He faces up to 20 years in federal prison and a $1 million fine when he is sentenced on April 5, 2016.
The investigations of Brooks and Alfred were conducted by the Southern Regional Drug and Violent Crime Task Force and the West Virginia State Police Bureau of Criminal Investigation. Assistant United States Attorney John File is handling the prosecutions. The hearings took place before Senior United States District Judge David A. Faber.
These cases were prosecuted as part of the Bluefield Pill Initiative, a collaborative, multi-agency regional law enforcement effort designed to halt prescription drug trafficking in Mercer, McDowell, and Wyoming counties. The Bluefield Pill Initiative is led by the Southern Regional Drug and Violent Crime Task Force, which includes the West Virginia State Police Bureau of Criminal Investigation; the Mercer, McDowell and Wyoming County Sheriff’s Departments; and the Bluefield and Princeton Police Departments.
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Tulalip Tribal Member Sentenced to Two Years in Prison for Purchasing Firearms While Subject to Domestic Violence Protection OrderRead the Press Release
The father of a teen who killed four students, severely injured a fifth student and killed himself last year at Marysville-Pilchuck High School was sentenced today in U.S. District Court in Seattle to two years in prison for six counts of illegal firearms possession, announced U.S. Attorney Annette L. Hayes. RAYMOND LEE FRYBERG, JR., 42, was convicted in September 2015 following a four day jury trial. At the sentencing hearing U.S. District Judge James L. Robart observed that FRYBERG felt his right to own guns “exceeded the law.” Judge Robart said he was troubled by FRYBERG’s failure to pay a fine ordered by the Tribal court, and instead illegally purchasing multiple firearms that were stored in an unsafe manner.
“Guns in the wrong hands are just plain wrong and will not be tolerated,” said U.S. Attorney Annette L. Hayes. “The Department of Justice has an ongoing commitment to prosecuting firearms crimes. The goal is to enforce our gun laws against those who pose a threat to public safety. Here the illegal possession of a firearm played a devastating role in a community tragedy.”
“This case underscores our commitment to keep our federally recognized Tribal communities safe,” said FBI Special Agent in Charge Frank Montoya, Jr. “So much tragedy stemmed from the actions of one person. I commend the resilience of the victim families and the community that are working to move forward.”
According to records filed in the case and testimony at trial, in 2002, FRYBERG’s then-girlfriend asked the Tulalip Tribal Court for an order of protection alleging FRYBERG had recently threatened her and had in the past physically assaulted her by hitting, slapping and/or pulling her hair. The protection order was made permanent in September 2002 and had no expiration date. In September 2012, FRYBERG was back in tribal court and pleaded “no contest” to violating the protection order. FRYBERG was fined and placed on probation for one year. Less than four months later, FRYBERG went to Cabela’s Sporting Goods store on the Tulalip reservation and purchased the Beretta, and, over subsequent months, four other firearms. FRYBERG filled out forms for the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) stating that he was not the subject of any court order restraining him from harassing, stalking, or threatening an intimate partner or the child of a partner. The form states that anyone subject to such an order is prohibited from purchasing a firearm.
According to testimony at trial, FRYBERG purchased a Beretta, Model PX4 Storm, in January, 2013. On October 24, 2014, FRYBERG’s son, 15-year-old Jaylen Fryberg, used the illegally purchased Beretta to kill four students and himself at Marysville-Pilchuck High School in Marysville, Washington. Fryberg’s cousin was critically injured but survived. Jurors were not told of the connection between FRYBERG’s weapons and the school shooting.
When law enforcement executed a search warrant at the FRYBERG home four months after the school shooting, they found five firearms unsecured in a bedroom of the home. Prosecutors noted in their sentencing memo that the firearms were not secured in a gun safe in the home, and instead were accessible to a 14-yearold and two children under the age of six.
The case was investigated by the FBI, and the Tulalip Tribal Police Department. The case was prosecuted by Assistant United States Attorneys Ye-Ting Woo and Bruce Miyake.
Tribunal Federal Paraliza Permanentemente Las Operaciones De Preparador De Impuestos De ColoradoRead the Press Release
Un tribunal federal ha prohibido en forma permanente a un hombre de Colorado y su empresa preparar declaraciones de impuestos federales, anunció hoy el Departamento de Justicia. Los Estados Unidos entablaron una demanda civil contra Gerardo Herrera y su empresa, El Lobo Multiservicios Profesionales Inc., en la que alega que redujeron las obligaciones tributarias de sus clientes fraudulentamente al declarar dependientes adicionales y reclamar deducciones de impuestos falsas. Después de que los demandados dejaron de contestar la demanda, el 7 de enero de 2016 el Juez John L. Kane emitió una orden prohibiendo a Herrera preparar declaraciones de impuestos en forma permanente.
De acuerdo con la demanda civil entablada por el gobierno, Herrera y su personal declararon repetidamente a miembros de la familia extendida de sus clientes como dependientes de los mismos, a pesar de que no cumplían los requisitos para dependientes según la ley federal, y solicitaron indebidamente deducciones por gastos personales como teléfonos celulares y seguro de automóvil. Además, de acuerdo con la demanda, las auditorías realizadas indicaron que Herrera y sus empleados exageraron deducciones, solicitaron deducciones fraudulentas por contribuciones caritativas y declararon indebidamente estado de jefe de familia. La demanda alega que el Servicio de Impuestos Internos [Internal Revenue Service (IRS)] auditó más de 200 formularios de declaración de impuestos preparados por la empresa de Herrera y encontró declaraciones falsas en más del 99 por ciento de las mismas.
El fraude cometido por preparadores de declaraciones de impuestos es uno de los Doce principales ardides tributarios del IRS de 2015. El portal del IRS incluye algunos consejos para la elección de un preparador de declaraciones de impuestos. En la última década, la División de Impuestos ha obtenido interdictos contra cientos de preparadores de impuestos fraudulentos. Se puede encontrar información sobre estos casos en el portal del Departamento de Justicia. Se encuentra una lista alfabética de personas prohibidas de preparar declaraciones de impuestos y promover ardides tributarios en esta página. Si usted cree que una de las personas o empresas bajo prohibición puede estar violando un interdicto, por favor comuníquese con la División de Impuestos para proveer detalles.
Tribal Member Sentenced in Washington State to Two Years in Prison for Purchasing Firearms While Subject to Domestic Violence Protection OrderRead the Press Release
One of Weapons Purchased Illegally Later Used in Marysville-Pilchuck School Shooting
The father of a teen who killed four students, severely injured a fifth student and killed himself in October 2014 at Marysville-Pilchuck High School in Washington State was sentenced today in U.S. District Court in Seattle to two years in prison for six counts of illegal firearms possession, announced U.S. Attorney Annette L. Hayes of the Western District of Washington. Raymond Lee Fryberg Jr., 42, was convicted in September 2015 following a four day jury trial. U.S. District Judge James L. Robart imposed three years of supervised release to follow the prison term.
“Guns in the wrong hands are just plain wrong and will not be tolerated,” said U.S. Attorney Hayes. “The Department of Justice has an ongoing commitment to prosecuting firearms crimes. The goal is to enforce our gun laws against those who pose a threat to public safety. Here the illegal possession of a firearm played a devastating role in a community tragedy.”
“This case underscores our commitment to keep our federally recognized Tribal communities safe,” said Special Agent in Charge Frank Montoya Jr. of the FBI’s Seattle’s Division. “So much tragedy stemmed from the actions of one person. I commend the resilience of the victim families and the community that are working to move forward.”
According to records filed in the case and testimony at trial, in 2002, Fryberg’s then-girlfriend asked the Tulalip Tribal Court for an order of protection. The protection order was made permanent in September 2002 and had no expiration date. In September 2012, Fryberg was back in tribal court and pleaded “no contest” to violating the protection order. Fryberg was fined and placed on probation for one year. Less than four months later, Fryberg went to Cabela’s Sporting Goods store on the Tulalip reservation and purchased a handgun, and, over subsequent months, four other firearms. Fryberg filled out forms for the Bureau of Alcohol, Tobacco, Firearms & Explosives stating that he was not the subject of any court order restraining him from harassing, stalking, or threatening an intimate partner or the child of a partner. The form states that anyone subject to such an order is prohibited from purchasing a firearm.
According to testimony at trial, Fryberg purchased a Beretta, Model PX4 Storm, in January, 2013. On Oct. 24, 2014, Fryberg’s son, Jaylen Fryberg, 15, used the illegally purchased Beretta to kill four students and himself at Marysville-Pilchuck High School in Marysville, Washington. Fryberg’s cousin was critically injured but survived. Jurors were not told of the connection between Fryberg’s weapons and the school shooting.
The case was investigated by the FBI, and the Tulalip Tribal Police Department. The case was prosecuted by Assistant U.S. Attorneys Ye-Ting Woo and Bruce Miyake.
Treasure Valley Contractor Pleads Guilty and is ResentencedRead the Press Release
BOISE – Elaine Martin, 69, of Meridian, Idaho, the former president and majority stockholder of MarCon, Inc., pleaded guilty to one count of making and subscribing a false tax return before Chief U.S. District Judge B. Lynn Winmill today, U.S. Attorney Wendy J. Olson announced. Following the entry of her plea, Judge Winmill sentenced her for the tax conviction, and resentenced her for wire fraud, mail fraud, and interstate transportation of property taken by fraud convictions. Judge Winmill sentenced Martin to 60 months’ imprisonment on the fraud convictions and 24 months’ imprisonment on the tax conviction, those sentences to run concurrently. Judge Winmill further ordered Martin to pay restitution to the IRS and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60, and a forfeiture money judgment of $3,084,038.05, amounts Martin previously paid.
Previously, on September 19, 2013, after a 26-day trial, a federal jury convicted Martin of 22 criminal counts, including four counts of filing false individual and corporate tax returns, two counts of conspiracy to defraud the United States, five counts of wire fraud, five counts of mail fraud, one count of false statement, three counts of interstate transportation of property taken by fraud, one count of conspiracy to obstruct justice and one count of obstruction of justice. On February 24, 2014, Judge Winmill sentenced Martin to 24 months’ imprisonment on the tax, conspiracy, false statements, and obstruction counts, and 84 months’ imprisonment on the wire fraud, mail fraud, and interstate transportation of property taken by fraud counts, with these sentences to run concurrently. Further, he ordered Martin to pay restitution to the IRS and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60, and a forfeiture money judgment of $3,084,038.05. On August 7, 2015, the United States Court of Appeals for the Ninth Circuit vacated Martin’s sentence and her tax convictions, and remanded the case for further proceedings, including resentencing on the fraud charges.
In the plea agreement, Martin admitted that she willfully signed false and fraudulent Form 1120S income tax returns for Marcon, Inc., a construction company that was located in Meridian, Idaho, for tax years 2005 and 2006. Martin also admitted that she caused these tax returns to be false and fraudulent by keeping the unreported income off of the books, and that she falsely told an IRS Revenue Agent, who was conducting a civil audit of Marcon, that all of Marcon’s gross receipts were deposited into Marcon’s Wells Fargo operating account. In fact, as Martin well knew at the time, she had and was causing gross receipts from the used material sales to be diverted and secretly deposited into Marcon’s Bank of Cascades account. Martin purposefully did not provide records for Marcon’s Bank of Cascades account to the individual who prepared her and Marcon’s tax returns for tax years 2005 and 2006. Martin admitted that the total tax loss was $73,678.
Further, Martin admitted in the plea agreement to her participation in the fraud counts, including the conspiracy to defraud the SBA 8(a) Program, and the U.S. Department of Transportation, Disadvantaged Business Enterprise (“DBE”) Program, by submitting fraudulent tax returns and making false statements concerning her finances that caused Marcon to qualify and/or remain eligible for these programs. Martin further admitted that her behavior affected the award of contracts pursuant to the 8(a) Program and DBE Programs. For example, Marcon’s status as an Idaho DBE affected how and what DBE goals were set for particular construction projects, and helped Marcon maintain a virtual monopoly in its geographic region between 2000 and 2006. Marcon participated in the SBA 8(a) Program pursuant to direct negotiations with the awarding agency, rather than through fair and open competition. Martin admitted that during the relevant time period, she would not have been awarded the 33 contracts at issue in the case but for the fraud.
As part of the plea agreement that Martin entered into today, she waived her right to further appeal.
The case was investigated by Internal Revenue Service-Criminal Investigation, Federal Bureau of Investigation, the Office of Inspector General for the U.S. Small Business Administration, and the Office of Inspector General for the U.S. Department of Transportation.
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.
Three Sentenced in Bakersfield Heroin Trafficking ConspiracyRead the Press Release
FRESNO, Calif. — Three defendants have been sentenced by United States District Judge Anthony W. Ishii for a conspiracy to distribute heroin, United States Attorney Benjamin B. Wagner announced.
On Monday, Rafael Legorreta, 34, of Bakersfield, was sentenced to nine years and five months in prison, and Francisco Rivera, 29 of Palmdale, was sentenced to seven years in prison. On January 4, 2016, Julio Perez, 32, of Bakersfield, was sentenced to 10 years in prison.
According to court documents, on December 2, 2014, members of Kern County Sheriff’s Gang Suppression Unit conducted a probationary search of the home of Julio Perez. Perez, Legorreta, and Rivera were located in the locked basement of the residence with approximately 10 lbs. of heroin, together with packaging material, zip lock bags, digital scales, metal strainers, a blender, and drug paraphernalia, among other items. All three defendants appeared to have heroin residue on their hands and clothing, and all three subsequently admitted to their involvement in the conspiracy.
This case was the product of an investigation by the Federal Bureau of Investigation and the Kern County Sheriff’s Gang Suppression Unit. Assistant United States Attorney Brian K. Delaney prosecuted the case.
Three Palm Beach County Residents Charged in Elaborate Fraud Scheme Involving Rental Property TakeoversRead the Press Release
Three Palm Beach County residents are charged with running a fraudulent rental property scheme that caused the true property owner to sustain financial losses of hundreds of thousands of dollars.
Wifredo A. Ferrer, U.S. 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), Miami Field Office, Sean Scheller, Chief of Police for the Town of Lantana, Florida, and Delany De-Leon Colon, Inspector in Charge, United States Postal Inspection Service, Miami Division, made the announcement.
Kesner Joaseus, 46, of Wellington, FL, Wadno Dorneau, 36, of West Palm Beach, and Miguel Tilus, 54, of Lake Worth, were charged by criminal complaint for their participation in a fraud scheme from November 2014 through January 2016. The defendants are charged with conspiracy to commit mail fraud, mail fraud, in violation of Title 18, United States Code, Sections 1341 and 1349 (Case No. 16-CR-8005). The defendants each face up to 20 years imprisonment, up to $250,000 in fines and mandatory restitution, on each count of conviction. Detention hearings have been scheduled for each defendant on January 19, 2016 in West Palm Beach.
According to court documents, a legitimate real estate investment trust based in Georgia, RHA 2, LLC, owns dozens of properties in Palm Beach and Broward Counties that it leases out as residential single family homes. This company operates as HavenBrook Homes. From November 2014 through the present, Joaseus, Dorneau and Tilus have conspired to use a similar company name, “RHA Two, LLC,” to illegally take possession of and rent the homes lawfully owned by HavenBrook by assuming the legitimate company’s identity.
In order to facilitate the fraud scheme, the defendants identify and monitor the status of homes being renovated by HavenBrook. When construction is nearing completion, the defendants remove the lockbox from a targeted home and call a locksmith to change the locks. After having the locks changed, sometimes within hours, the defendants place signs in high traffic areas advertising a home for rent and post one of several prepaid cellular telephone numbers.
When individuals seeking to rent a house call the listed numbers, one of the defendants arranges to meet the prospective renter at the property, presents the renter with fraudulent leases with a counterfeit “HavenBrook Homes” logo, and collects thousands of dollars in money orders or cash, purportedly for the security deposit, as well as the first and last month’s rent. In this manner, the defendants collected purported lease payments from dozens of tenants of houses owned by which the defendants had no right to possess.
During the course of the fraud scheme, at least 80 homes owned by HavenBrook Homes were taken over by the defendants, causing the company to sustain approximately $100,000 a month in rental income losses.
Mr. Ferrer commended the investigative efforts of the ICE-HSI, Lantana Police Department, and USPIS. This case is being prosecuted by Assistant U.S. Attorney Lauren Jorgensen.
A complaint is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. 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.
Texas Man Arraigned in New Mexico on Indictment Alleging Scheme to Defraud Social Security AdministrationRead the Press Release
ALBUQUERQUE – Dannelly Labogin, 68, of Amarillo, Texas, was arraigned today in federal court in Las Cruces, N.M., on a 36-count indictment charging him with defrauding the Social Security Administration (SSA) of $82,483.00 in Social Security Child’s Insurance Benefits and theft of government property. Labogin entered a not guilty plea to the indictment and was released on his own recognizance.
Count 1 of the indictment alleges that between June 2007 and Nov. 2013, Labogin executed a scheme to defraud the SSA by continuing to receive benefits on his daughter’s behalf even though the girl had been adopted by others and was no longer in his care. It further alleges that as a result of this scheme, Labogin fraudulently received an aggregate of $82,483.00. Counts 2 through 36 of the indictment allege that Labogin knowingly stole and embezzled an aggregate of $26,633.00 in Social Security Child’s Insurance Benefit payments from the SSA between Oct. 1, 2010 and Dec. 3, 2013.
Labogin was arrested in Amarillo on Dec. 4, 2015, and was transferred to the District of New Mexico on Jan. 5, 2016, to face the charges against him.
If convicted, Labogin faces a statutory maximum penalty of five years in prison on the fraud charge and ten years in federal prison on each of the theft of government property charges. Maximum potential sentences are prescribed by Congress and the sentence imposed on a defendant is determined by the court.
Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Social Security Administration, Office of the Inspector General, and is being prosecuted by Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office.
Tahlequah Woman Pleads Guilty to Use of A Communication Device in Furtherance of Drug TraffickingRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that BRITTANI M. ROSS, age 26, of Tahlequah, Oklahoma, pled guilty to an Information charging her with USE OF A COMMUNICATION DEVICE IN FURTHERANCE OF DRUG TRAFFICKING, in violation of Title 21, United States Code, Section 843(b).
The charges arose from an investigation by the Tulsa County Sheriff’s Department, Tahlequah Police Department and the Drug Enforcement Administration.
The Information alleged that on or about April 1, 2015, within the Eastern District of Oklahoma, the defendant, BRITTANI M. ROSS, knowingly, intentionally, and unlawfully used a communication facility, that is: a telephone (cellular or otherwise) in committing, causing, and facilitating acts constituting a felony under Title 21, United States Code, Section 846, in that the Defendant used a telephone to discuss various matters concerning Drug Conspiracy.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the defendant’s guilty plea, and ordered the completion of a presentence report. Sentencing will be scheduled upon its completion.
The statutory range of punishment is not more than 4 years imprisonment, a fine of up to $250,000.00 or both.
Assistant United States Attorney Shannon Henson represented the United States.
Three Face Federal Charges in Cumberland County for Cocaine Distribution ConspiracyRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announces that a federal grand jury in Raleigh returned a four count indictment (attached) charging three defendants with conspiring to distribute and possess with intent to distribute cocaine.
The following people were indicted and arrested in December 2015. They are detained by order of a federal judge.
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Genesis Lee Whitted, Jr., aka “Gen” and “Juice Man”, 26, of Fayetteville, NC
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Wayne Desmond Whitted, aka “Weezy”, 24, of Fayetteville, NC
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Joel Michael McLaurin, Jr., aka “Knowledge,” 29, of Fayetteville, NC
Genesis Lee Whitted, Jr. was also charged with Possession of a Firearm in Furtherance of a Drug Trafficking Crime and Brandishing a Firearm During and In Relation To a Drug Trafficking Crime.
If convicted, the maximum penalties for the charged drug count are twenty years’ imprisonment, a $1 million fine, and a term of supervised release of not less than 3 years following any term of imprisonment.
The maximum penalties for Possessing a Firearm in Furtherance of a Drug Trafficking Crime are no less than 5 years, up to life imprisonment, consecutive to any other sentence; a $250,000 fine; and up to 3 years supervised release following any term of imprisonment. The maximum penalties for Brandishing a Firearm in Furtherance of a Drug Trafficking Crime are no less than seven years, up to life imprisonment, consecutive to any other sentence; a $250,000 fine; and up to 3 years supervised release following any term of imprisonment. A second or subsequent conviction for a firearms charge of this type carries a mandatory minimum term of twenty five years imprisonment, consecutive to any other sentence.
The charges and allegations contained in the indictment are merely accusations. The defendants are considered innocent unless and until proven guilty in a court of law.
The case is being investigated by the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and the Fayetteville Police Department (FPD).
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News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release
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Statement of U.S. Attorney Preet Bharara Relating to Moreland Commission InvestigationRead the Press Release
“After a thorough investigation of interference with the operation of the Moreland Commission and its premature closing, this Office has concluded that, absent any additional proof that may develop, there is insufficient evidence to prove a federal crime. We continue to have active investigations related to substantive inquiries that were being conducted by the Moreland Commission at the time of its closure.”
South Carolina Man Sentenced for Mail FraudRead the Press Release
CINCINNATI – Christopher Outlaw, 46, of Moore, S.C., was sentenced in U.S. District Court to 30 months in prison and ordered to pay $1.9 million in restitution for mail fraud.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Michael R. Barrett.
According to court documents, beginning in at least 2005 through August 2012, Outlaw embezzled more than $1.9 million from his former employer.
Outlaw was employed by FTZ Industries, Inc. FTZ is a manufacturer of electrical products for transportation, plant maintenance, marine and custom applications, located in Simpsonville, South Carolina. FTZ is a division of ILSCO Corporation, which is an electrical connector manufacturing company located in Cincinnati, Ohio.
The defendant embezzled money by impersonating a former vendor of his employer. Specifically, the defendant opened a bank account in false affiliation with Molex Incorporated, a company that provides electrical components to its customers, which previously included FTZ. Outlaw submitted to his employer fictitious invoices that appeared to be from Molex. In reality, however, FTZ had not received any products from Molex because the invoices that Outlaw submitted were fake. Through the fictitious invoices, Outlaw would direct his employer to send payments to Molex to a mailbox that he had opened in Georgia in Molex’s name.
U.S. Attorney Stewart commended the cooperative investigation by the FBI, as well as Cincinnati Branch Chief Emily N. Glatfelter, who represented the United States in this case.
Sex Trafficking Law Enforcement Task Force Highlighted During National Slavery and Human Trafficking Prevention MonthRead the Press Release
PROVIDENCE, R.I. – January is National Slavery and Human Trafficking Prevention Month. In Rhode Island, the Sex Trafficking Law Enforcement Task Force, comprised of local and state law enforcement, agents from Homeland Security Investigations and the FBI, and prosecutors from the Rhode Island Attorney General’s Office and the United States Attorney’s Office, continue to be laser-focused working together as “one voice” on “one mission” to investigate, arrest and prosecute sex traffickers and sex buyers, and to rescue as many victims as possible who have become ensnarled in webs weaved by sex traffickers.
Human trafficking is the world's fastest growing criminal enterprise, valued to be an estimated $32 billion-a-year global industry. After drug trafficking, human trafficking is the world's second most profitable criminal enterprise, a status it shares with illegal arms trafficking. Sex trafficking can and does take place in every community, no matter the cultural make up, the affluence, or the location of a community. No community is immune from being affected by the exploitation of human beings for commercial sexual activity.
Nationally, for the 5th year, the U.S. Department of Homeland Security’s Blue Campaign is raising public awareness about human trafficking, and, among other things, the commitment of law enforcement on every level to, as the campaign stresses, to work as “One Voice. One Mission. End Human Trafficking.”
The Blue Campaign also offers training to law enforcement and others to increase detection and investigation of human trafficking, and to protect victims and bring suspected traffickers to justice.
Over the past two years in Rhode Island, at least 30 individuals have been charged with sex trafficking crimes by prosecutors from the United States Attorney’s Office and the Attorney General’s Office. Most sex trafficking cases are jointly reviewed by prosecutors from both offices to determine appropriate charges, appropriate jurisdiction and in which court appropriate penalties are likely to be realized. Several prosecutors from each office have been cross-designated, allowing them to work side-by-side to prosecute sex trafficking cases either in state or federal court.
For example, in 2014, local, state and federal law enforcement from two states worked collaboratively to successfully locate and rescue a 17-year-old Boston area woman who was enticed to leave her residence and who was brought to a Rhode Island motel by a Missouri man, for the purposes of being offered for commercial sexual activity. The Missouri man is now serving a 14-year sentence in federal prison.
In June 2015, a Superior Court jury found a Boston man guilty of two counts of sex trafficking a minor for forcing a 14-year-girl to dance and solicit men for sex at a Providence strip club, as well as posting an ad for her as an escort on adult websites. Working in concert with one another, law enforcement from Rhode Island and Massachusetts found a second girl in a motel in Seekonk. Law enforcement was able to successfully rescue both teenagers and arrest the defendant, who had been previously been convicted of sexual assault and interstate transportation of a minor for prostitution. The defendant, who is awaiting sentencing, is facing a maximum of 91 years in state prison.
In addition, members of the Sex Trafficking Law Enforcement Task Force have worked closely with Day One in Providence, the Aubin Center at Hasbro Children’s Hospital, DCYF, the Rhode Island Public Defender’s Office and the Rhode Island Police Chiefs’ Association to develop a uniform response protocol intended to serve as a guide and resource to assist in detecting and investigating the commercial sexual exploitation of children, successfully prosecuting those who engage in this conduct, and addressing the recovery needs of the victims of this crime.
“Make no mistake about it: the depraved individuals who enslave others for the commercial sex industry are more than mere criminals. They are kidnappers, torturers and rapists. To effectively end sex trafficking, it requires cooperation among local, state, national law enforcement agencies,” said Attorney General Peter F. Kilmartin. “The partnership by law enforcement through the Rhode Island Sex Trafficking Task Force has shown that by working together, we can successfully combat this new form of slavery and put the traffickers out of business.”
United States Attorney Peter F. Neronha commented, “Commercial sex traffickers trade in, and make money on, the vulnerability of their teenage and young adult victims. Few, if any, crimes are more outrageous or harmful to their victims, and those who engage in this conduct deserve the full attention of our joint law enforcement efforts. Those on the other side of these criminal transactions – the sex buyers – should also take notice, for they are an equal part of the problem, and they too will have a price to pay as we move forward with these cases.”
“U. S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) is committed to combating human trafficking in Rhode Island and beyond through close coordination with our federal, state and local partners,” said Special Agent in Charge Matthew Etre, of HSI Boston. “It is through information sharing mechanisms, such as the RI Sex Trafficking Law Enforcement Task Force, that we are able to combine our strengths, exchange best practices and provide a whole of government response to fighting these heinous crimes and getting the victims the support and resources that they need to recover.”
Commenting on behalf of local and state law enforcement across the state, Lincoln Police Chief Brian W. Sullivan, President of the Rhode Island Police Chiefs’ Association said, “In Rhode Island, when investigating Human Trafficking crimes, the emphasis that has been placed on creating a multi-agency, collaborative investigation has been critical in the removal of barriers. This partnership demonstrates the commitment of federal, state, and local law enforcement agencies to combating this crime.”
“Human trafficking has become a profitable business for criminals of all kinds to fund and advance their enterprises. Equally disturbing, victims of this trafficking are often beaten, starved, and forced to work in the sex industry or as domestic servants with little to no pay. People believe this could never happen here in Rhode Island—but it does,” said Harold H. Shaw, Special Agent in Charge of the FBI’s Boston Division. “As part of this task force, the FBI will continue to dedicate resources to disrupt these trafficking networks, all in an effort to help victims of these heinous crimes, and stem this egregious criminal activity.”
Click here to view the “Out of the Shadows” public service announcement designed to enhance awareness of human trafficking and encourage the public to educate themselves about how to recognize and report human trafficking.
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Seven sentenced in Maryland to West Virginia heroin trafficking networkRead the Press Release
MARTINSBURG, WEST VIRGINIA – Seven individuals were sentenced in federal court today for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
The defendants sentenced today participated in a drug trafficking network in which a large group of individuals repeatedly traveled across state lines to the Baltimore area to procure heroin. The individuals then returned to various locations in Maryland, West Virginia, Virginia, and Pennsylvania to redistribute and sell the drug. The operation was interrupted in June 2015 by a 163-count federal indictment targeting 41 defendants.
Megan Saylor, 32, Cortney Blaire Saylor, 30, both of Martinsburg, and Cassandra Elaine Riggs, 26, of Falling Waters, West Virginia, each pled guilty to one count of “Use of Telephone to Facilitate the Distribution of Heroin,” and one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering.” Cortney Saylor was sentenced today to 60 months in prison on the racketeering charge and 48 months in prison on the distribution charge. The sentences will run partially concurrently for a total of 77 months in prison. Megan Saylor was sentenced today to 10 months in prison on each count. The sentences will run concurrently for a total of 10 months in prison. Cassandra Riggs was sentenced today to probation for a term of five years on each count. The sentences will run concurrently for a total of five years of probation.
Scott Andrew Ours, 33, and James Miner Jenkins, 37, both of Martinsburg, each pled guilty in September 2015 to one count of “Aiding and Abetting Possession with Intent to Distribute Heroin.” Ours was sentenced today to 32 months in prison. Jenkins was sentenced today to 24 months in prison.
Lindsay Bohrer, 37, of Berkeley Springs, West Virginia, pled guilty in September 2015 to one count of “Use of Telephone to Facilitate the Distribution of Heroin,” and one count of “Interstate Travel in Aid of Racketeering.” He was sentenced today to 21 months in prison on each count. The sentences will run concurrently for a total of 21 months in prison.
Veronica Gladden, 32, of Martinsburg, pled guilty in September 2015 to one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering.” She was sentenced today to five years of probation.
Assistant U.S. Attorneys Anna Krasinski and Paul Camilletti prosecuted the cases on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, and the Federal Bureau of Investigation led the inquiry.
Chief U.S. District Judge Gina M. Groh presided.
Sacramento Dentist Pleads Guilty to Billing for Unnecessary or Unperformed Dental WorkRead the Press Release
SACRAMENTO, Calif. — David M. Lewis, 62, of Sacramento, pleaded guilty today to health care fraud for his role in a scheme to defraud the health care benefit program used by United Parcel Service (UPS) employees, United States Attorney Benjamin B. Wagner announced.
According to court documents, beginning in late 2008 or early 2009, Lewis, a dentist practicing in Sacramento, began targeting UPS employees for dental treatment because their health care plan under the Northern California General Teamsters Security Fund provided 100 percent coverage without any annual limits. Lewis offered cash and other incentives to UPS patients for receiving dental treatment or for recruiting other UPS employees to receive such treatment.
In some instances, Lewis caused claims to be submitted to Delta Health Systems, which administered the UPS health care plan, that falsely billed the plan for work that was never performed. In many other instances, Lewis performed unnecessary dental work on UPS employees, including root canals, and claims were submitted to Delta for payment for these unnecessary services.
Lewis created false narratives for dental work that was not performed or created false statements about purported pre-existing dental conditions to justify the work performed. In some instances, Lewis drilled into teeth to install temporary filings and instructed his assistants to take X-rays of the temporary filings. Lewis then submitted claims to Delta with X-rays of the temporary fillings, falsely claiming that the X‑rays depicted tooth decay justifying further restorative procedures.
The total loss associated with Lewis’s health care fraud may be as high as $1 million.
An employee at Lewis’s dental practice, Nichol Ramirez aka Nichol Lomack, previously pleaded guilty to one count of health care fraud for her part in the fraud scheme. (2:14-cr-056 MCE)
These cases are the product of an investigation by the U.S. Department of Labor, Office of Inspector General-Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor, Employee Benefits Security Administration, with assistance from the California Dental Board and the California Attorney General’s Office. Assistant United States Attorney Todd A. Pickles is prosecuting the cases.
Lewis is scheduled to be sentenced by United States District Judge Morrison C. England Jr. on March 31, 2016, and Lomack is scheduled to be sentenced on September 1, 2016. Both Lewis and Lomack face a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the gross loss or gain of the scheme. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Quincy Man Sentenced to 15 Years for Two Bank RobberiesRead the Press Release
Jacksonville, Florida – United States District Judge Marcia Morales Howard today sentenced Kenneth Lamar Ellington (47, Quincy) to 15 years in federal prison for committing two bank robberies. He was also ordered to pay $4,105 in restitution. A federal jury found Ellington guilty in July 2015.
According to evidence presented at trial, on the morning of April 9, 2014, Ellington robbed a branch of TD Bank in Live Oak, Florida using a demand note and indicating that he had a weapon in his waist, which was not recovered. At the time of the robbery, he was wearing a hat and a fake beard. Upon exiting that bank, Ellington dropped the cash after a dye pack exploded.
Approximately three hours after the first robbery, Ellington entered the First Federal Bank of Florida, also in Live Oak, wearing the same disguise. He again presented a demand note to a teller, and stated “Hurry up and no one will get hurt.” Ellington escaped from the second bank with $4,105.
Soon after the robbery, a witness in a nearby business’s parking lot found a garbage bag containing Ellington’s disguise and the shirt that he had worn during both robberies. Florida Department of Law Enforcement analysts located Ellington’s fingerprint on the garbage bag, along with his DNA on the disguise and shirt. In addition, a witness recalled seeing a black Dodge Charger parked before the robbery at the location where Ellington’s disguise was later recovered. When Ellington was arrested on April 14, 2014, he was driving a black Dodge Charger.
Ellington also faces a separate criminal proceeding in federal court in Tallahassee for violating his supervised release. In April 2014, at the time of the Live Oak bank robberies, Ellington was on federal supervised release in the Northern District of Florida for prior felony convictions.
This case was investigated by the Live Oak Police Department, the Suwanee County Sherriff’s Office, the Perry Police Department, the Florida Department of Law Enforcement, and the Jacksonville office of the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Dale R. Campion and Michael J. Coolican.
Postal Employee Gets Probation with Community Confinement for Mail TheftRead the Press Release
PITTSBURGH - A resident of Westmoreland County, Pennsylvania, has been sentenced in federal court to five years of probation and six months community confinement on his conviction of theft of mail matter by postal service employee, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Frank J. Rysz, 49, of Latrobe, Pa..
According to the information presented to the court, Rysz engaged in the theft of three first class letters and their valuable contents from the U.S. mails. Rysz also took one advertisement from the U.S. mails.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.S. Postal Service-Office of Inspector General for the investigation leading to the successful prosecution of Frank J. Rysz.
Payroll Service Company Owner Admits to Stealing Money Set Aside by Clients to Pay Federal and State TaxesRead the Press Release
Baltimore, Maryland – Kevin Carden, age 55, formerly of Bel Air, Maryland, pleaded guilty today to wire fraud and to filing a false tax return, arising from a scheme to steal money from his clients and the IRS. The guilty plea was entered just before Carden’s trial was scheduled to begin.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
“When customers realized that the money they entrusted to AccuPay was not being used as intended to pay their taxes, Kevin Carden misled them with false cover stories,” said U.S. Attorney Rod J. Rosenstein. “What really happened was that Kevin and Beverly Carden took money intended for the IRS and spent it themselves, causing millions of dollars in losses to their customers.”
According to his plea agreement, until its closure in March 2013, Kevin Carden and his wife, Beverly Carden operated AccuPay, Inc. which provided payroll and payroll tax services to small and medium businesses. Kevin Carden ran the company’s “tax department,” which was responsible for handling the employment tax portion of the business. AccuPay received funds from its clients that it held in trust to pay over to the IRS and the Comptroller of Maryland for AccuPay’s clients’ employment taxes. Kevin Carden was responsible for transferring the client funds to make the required tax payments.
During the course of the fraud scheme, which Kevin Carden admitted lasted from 2010 to March 2013, AccuPay withdrew from the clients’ funds the full amount of payroll taxes owed, but then paid the taxing authorities only a portion of the funds. While AccuPay falsely represented to its clients that it paid all of the taxes owed, in fact, Beverly Carden diverted some of those funds to a joint personal bank account that she and her husband maintained which the couple then used to pay personal expenses.
Because of the Cardens’ failure to fully pay existing tax obligations owed by their clients, both the federal and state taxing authorities imposed interest and penalties on AccuPay’s clients, thereby further increasing the magnitude of their tax obligations. Thus, the payments that the Cardens did make to the taxing authorities in part were being applied to pay interest charges and penalties imposed as a result of underpayments earlier in the scheme.
The Cardens used various methods to cover up their diversion of funds and to allay their clients’ concerns when they learned that the taxing authorities had apparently not been paid the full amounts they were supposed to receive. For example, in the instances in which AccuPay’s clients confronted employees at AccuPay about the underpayment of their taxes, Kevin Carden either told those clients that the underpayment would be addressed or (in some cases) avoided their inquiries. Kevin Carden further represented to those clients with whom he spoke that the underpayment was due to (1) a mistake by the taxing authority; (2) an error made by AccuPay employees; and/or (3) problems with the software AccuPay used to file tax returns. These representations were often untrue.
In addition, as a further means of covering up their diversion of funds and allaying their clients’ concerns, in late 2011 AccuPay sent a letter to their clients stating that they had hired a Chief Financial Officer (CFO) to audit all tax deposits and filings for all tax clients back to 2009 “for correctness, compliance, and completeness.” In fact, that individual was not AccuPay’s CFO, but rather was an independent tax preparer the Cardens had hired to prepare their own personal taxes and the corporate taxes of AccuPay, rather than those of the clients.
In 2012, a client of AccuPay confronted representatives of AccuPay with the fact that the company had failed to pay over $300,000 in taxes owed from 2008 to 2012. In response, AccuPay paid the client’s tax deficiencies.
Kevin Carden admits that the amount of loss arising from this scheme is at least $250,000, but the government will argue that the loss amount is approximately $2.6 million.
Carden also admits that he filed a false individual tax return for 2011 in which he did not report the amount of payroll taxes that had been diverted from AccuPay’s clients to the Cardens’ personal account. Kevin Carden admits that the amount of loss arising from the false tax return offense is between $40,000 and $100,000, but the government will argue that the loss amount is approximately $144,720.
As part of his plea agreement, Kevin Carden will be ordered to pay restitution in the full amount of the victims’ losses, including both the IRS and the individual clients of AccuPay.
Kevin Carden faces a maximum penalty of 20 years in prison for wire fraud, and a maximum of three years in prison for filing a false tax return. U.S. District Judge Marvin J. Garbis scheduled sentencing for May 18, 2016, at 10:00 a.m.
Beverly Carden, age 53, formerly of Bel Air, Maryland, previously pleaded guilty to mail fraud and filing a false tax return, and is also scheduled to be sentenced on May 18, 2016, at 10:00 a.m.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the IRS - Criminal Investigation and FBI for their work in the investigation. Mr. Rosenstein praised the Bel Air Police Department for their assistance in the investigation, and thanked Assistant U.S. Attorneys Evan T. Shea and Jefferson M. Gray, who are prosecuting the case.
One Man Sentenced, another Pleads Guilty, in Steroid Manufacturing and Distribution ConspiracyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JASON CHICKOS, 46, of Bridgeport, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to two years of probation for his role in a steroid manufacturing and distribution ring. Judge Chatigny also ordered CHICKOS to perform 120 hours of community service and pay a $1000 fine. Another member of the conspiracy, ALEX KENYHERCZ, 29, of Ansonia, also pleaded guilty today in Hartford federal court.
According to court documents and statements made in court, a long-term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations revealed that Steven Santucci, a former Newtown Police sergeant, and others were receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation also revealed that certain members of the conspiracy were distributing prescription pills, including oxycodone, as well as cocaine.
CHICKOS and KENYHERCZ purchased anabolic steroids from Santucci and distributed them to others. KENYHERCZ also illegally distributed prescription medication, including Roxicodone, Oxycodone, Suboxone and Opana.
At the time of the offense, CHICKOS was employed as a civilian dispatcher with the Newtown Police Department.
During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, approximately 350 grams of powder cocaine, and four long guns.
On October 19, 2015, CHICKOS pleaded guilty to one count of conspiracy to distribute anabolic steroids.
KENYHERCZ pleaded guilty to one count of conspiracy to distribute oxycodone. He is scheduled to be sentenced by Judge Chatigny on April 14, 2016, at which time he faces a maximum term of imprisonment of 20 years.
On December 9, 2015, Santucci pleaded guilty steroid distribution and money laundering offenses. He awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, with the assistance of the U.S. Marshals Service, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
Ohio man sentenced for Federal health care fraudRead the Press Release
HUNTINGTON, W.Va. – An Ohio man was sentenced today in federal court to three years of probation for health care fraud, announced Acting United States Attorney Carol Casto. Joshua Petrie, 36, of Proctorville, Ohio, previously pleaded guilty to the federal crime in September of 2015.
In 2009 and 2010, Petrie admitted that he worked as a sales representative and fitter for several out-of-state companies that sold and distributed back and knee braces from a medical practice in West Virginia. Petrie created fraudulent documents falsely showing that he provided braces to patients. The falsified documents included a certification from a physician indicating that the physician had ordered the braces for individual Medicare patients. In order to further the scheme, Petrie used a copy of the physician’s signature instead of an original signature. The fraudulent documents also included a delivery ticket with a signature line for patients to acknowledge receipt of the braces. Petrie forged patients’ signatures to the delivery tickets to make it appear that patients had actually received the braces. Petrie was paid in part based on the amount of his sales and therefore received additional income for each sale that he falsified. The fraudulent paperwork was used to illegally bill Medicare for approximately $38,000.
The investigation was conducted by the U.S. Department of Health and Human Services’ Office of Inspector General and the West Virginia Medicaid Fraud Control Unit. Assistant United States Attorneys Eric Bacaj and Meredith George Thomas are handling the prosecution. Chief United States District Judge Robert C. Chambers imposed the sentence.
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Neosho Man Pleads Guilty to Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Neosho, Mo., man pleaded guilty in federal court today to receiving and distributing child pornography over the Internet.
Larry Don Hilburn, 29, of Neosho, pleaded guilty before U.S. District Judge M. Douglas Harpool to the charge contained in a June 16, 2015, federal indictment.
According to today’s plea agreement, investigators with the Southwest Missouri Cyber Crimes Task Force identified Hilburn’s computer as sharing videos of child pornography through a peer-to-peer file-sharing network. Officers executed a search warrant at Hilburn’s residence and seized his computer, which contained numerous image and video files depicting the sexual abuse of children.
Under the terms of today’s plea agreement, the government will not seek a sentence of more than 10 years in federal prison without parole and Hilburn will not seek a sentence of less than five years in federal prison without parole. Hilburn may also be ordered to pay restitution to his victims. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Multiple defendants plead guilty to Federal heroin crimes in HuntingtonRead the Press Release
HUNTINGTON, W.Va. – Three defendants pleaded guilty today in federal court to various heroin crimes, announced Acting United States Attorney Carol Casto.
Eddie William Randall, 36, of Detroit, pleaded guilty to possession with intent to distribute 100 grams or more of heroin and to possession of a firearm in furtherance of a drug trafficking crime. Krishauna Deshay Brown, 37, of Huntington, pleaded guilty to possession with intent to distribute a quantity of heroin. From December 2014 until their arrests in 2015, Randall, Brown and others conspired to distribute heroin that was transported from Detroit to the Huntington area.
Brown resided at 209 West 9th Avenue in Huntington, and she allowed Randall to store and distribute heroin from her residence. On February 26, 2015, officers with the Huntington FBI Drug Task Force executed a search warrant at Brown’s residence and seized heroin, along with other paraphernalia used to sell heroin. Brown admitted that she possessed the heroin at her residence and intended to distribute it. She faces up to 20 years in federal prison when she is sentenced on April 11, 2016.
On June 25, 2015, officers executed search warrants at 2736 Rear 4th Avenue and 1128 25th Street in Huntington. Officers utilized a confidential informant to make several controlled purchases of heroin from Randall in and around those residences leading up to the search. Officers located Randall inside the 4th Avenue residence and seized approximately 40 grams of heroin, a loaded 9mm pistol, and $13,030 in cash. During the search of the 25th Street residence, officers seized approximately 280 grams of heroin and a loaded .45 caliber pistol. Randall admitted that he possessed the heroin from both residences for distribution and that he possessed the pistols in an effort to protect himself from theft or robbery of heroin or cash. Randall faces a mandatory minimum of 10 years to life in federal prison when he is sentenced on April 11, 2016.
As the result of a separate drug investigation, Terrance Donte Hensley, 20, of Huntington, pleaded guilty to distribution of heroin. Hensley admitted that on five occasions between June 26 and July 9, 2015, he distributed heroin at various locations in Hurricane and Huntington to a confidential informant working with law enforcement. Hensley faces up to 20 years in federal prison when he is sentenced on April 11, 2016.
The investigation of Brown and Randall was conducted by the Huntington FBI Drug Task Force, the Huntington Police Department and the Cabell County Sheriff’s Department. Assistant United States Attorney Joseph F. Adams is in charge of the prosecutions of Brown and Randall. The investigation of Hensley was conducted by the Metropolitan Drug Enforcement Network Team and the DEA Task Force. Assistant United States Attorney Jennifer Rada Herrald is in charge of the prosecution of Hensley. These plea hearings were held before Chief United States District Judge Robert C. Chambers.
These cases are 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 pills and heroin in communities across the Southern District.
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Modesto Man Sentenced in Two Mortgage Fraud SchemesRead the Press Release
FRESNO, Calif. — Tony Huy Havens, 42, of Modesto, was sentenced Monday by United States District Judge Lawrence J. O'Neill to three years and five months in prison for his role in two mortgage fraud schemes, United States Attorney Benjamin B. Wagner announced.
Havens had earlier pleaded guilty to committing mail fraud and wire fraud in the two schemes, which were charged in separate criminal cases.
According to the indictment in the first scheme, Havens devised an “advance fee” scheme that targeted victims in at least eight states who were seeking multi-million dollar loans for large construction projects that were in danger of foreclosure. Havens provided the victims with fraudulent documents that showed a third-party lender was prepared to make a loan to the victim. On Havens' instructions, the victims wire-transferred money into a bank account controlled by Havens to pay in advance certain costs associated with the loans. No loans were ever made. In total, Havens represented that he could arrange at least $1.1 billion in financing for at least 15 victim borrowers, and collected at least $248,750 by wire transfers from these victim borrowers.
According to the indictment in the second scheme, Havens arranged to purchase a single family residence in Modesto using two relatives as straw buyers. He obtained a loan in the name of the straw buyers that exceeded the actual selling price of the property, and arranged to have a portion of the purchase price sent back to him, which he used as the down payment for the purchase.
The cases were the product of investigations by the Federal Bureau of Investigation, the Stanislaus County District Attorney's Office, and the Federal Housing Financing Agency, Office of Inspector General. Assistant United States Attorneys Mark J. McKeon and Mia Giacomazzi prosecuted the cases.
Havens was ordered to self-surrender to begin serving his sentence on April 4, 2016.
Marion County, WV man sentenced for unlawful possession of firearmsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Gerald A. Swiger, 31, of Fairmont, West Virginia, was sentenced to 41 months in prison for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
Swiger was previously convicted of the felony offense of “Breaking and Entering” in the Circuit Court of Marion County, West Virginia. As a result of that felony conviction, he is prohibited from possessing firearms. He was discovered in August 2014 in unlawful possession of two firearms. He pled guilty in September 2015 to one count of “Felon in Possession of Firearm.”
Assistant U.S. Attorney David Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge Irene M. Keeley presided.
Major U.S. Airline Pilot Who Holds Global Entry Card Charged with Bulk Cash Smuggling, Making False StatementsRead the Press Release
NEWARK, N.J. – A United States commercial airline pilot who holds a U.S Customs and Border Protection (CBP) Global Entry Card was arrested yesterday morning after allegedly attempting to smuggle $195,736 in undeclared currency into the country, U.S. Attorney Paul J. Fishman announced.
Anthony Warner, 55, of Dallas, Texas, was arrested at Newark Liberty International Airport by special agents of Immigration and Customs Enforcement’s Homeland Security Investigations after arriving as a passenger on a flight from Mumbai, India. He is charged by complaint with one count of bulk cash smuggling and one count of making false statements. He made his initial appearance before U.S. Magistrate Judge Steven C. Mannion and was released on $100,000 bond.
According documents filed in this case and statements made in court:
Global Entry is a CBP program that allows expedited clearance upon arrival in the United States for pre-approved travelers who have been determined to be low-risk. Pre-approval must be completed before enrollment, and the process includes a background check and an in-person interview. At airports, program members proceed to Global Entry kiosks, present their machine-readable passport or U.S. permanent resident card, place their fingers on the scanner for fingerprint verification, and complete a Customs verification. The kiosk issues the traveler a transaction receipt and directs the traveler to baggage claim and the exit.
When Warner arrived at Newark Liberty International Airport, the Global Entry computer system was not functioning, so he presented his customs declaration to a CBP officer. CBP’s screening determined that he was carrying a laptop-style bag that contained $195,736 in United States currency wrapped in newspaper. He also had 10 rings, four sets of earrings, and other assorted jewelry of undetermined value.
Warner’s possession of currency was contrary to the statements in his customs declaration and verbal statements
Count One of the complaint carries a maximum term of imprisonment of five years and a fine of $250,000. Count two of the complaint, bulk cash smuggling, carries a maximum term of imprisonment of five years and forfeiture of all property involved in the offense.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Terence S. Opiola, and U.S. Customs and Border Protection, under the leadership of Robert E. Perez, Director, New York Field Office, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit in Newark.
Defense counsel: Jeffrey Altman and Steven Altman Esqs., New Brunswick, New Jersey
Judge Sentences Defendant for Violation of the Computer Fraud and Abuse ActRead the Press Release
Yijia Zhang, a permanent resident of the United States, and a citizen of the People’s Republic of China, today was sentenced to 31 months in prison by the Hon. Legrome D. Davis, for a violation of the Computer Fraud and Abuse Act, announced United States Attorney Zane David Memeger. Zhang had worked for a financial services company and had stolen a large number of electronic documents from his employer. (The documents included some that would have told how to access the company’s computer network. The government found no evidence that the files had been passed to anyone else, nor did it find any evidence that any of the information had been used to harm the company. In addition, no customer information was taken.) To cover his tracks, in July 2010, Zhang deleted a large number of files from the server he had used to effectuate the theft, causing the server to stop working and its log files to be overwritten. The log files would have given evidence of his theft. Zhang pled guilty to the charge in October of 2015.
The sentence imposed by the Court was within the range recommended by the United States Sentencing Guidelines. In addition to the prison term, Judge Davis ordered the defendant to make restitution to his former employer of $100,000.
The case was investigated by the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Michael L. Levy.
Jacqueline Stanfill Pleads Guilty to Fraud and Money Laundering ChargesRead the Press Release
KNOXVILLE, Tenn. – On Jan. 11, 2016, Jacqueline J. Stanfill, 58, of Knoxville, Tenn., pleaded guilty to wire fraud, mail fraud and money laundering, charges contained in a July 2015 federal indictment, before the Honorable Leon Jordan, Senior U.S. District Judge. A date for sentencing has not yet been set.
Stanfill faces potential sentences of: up to 20 years in prison, a fine of up to $250,000, and supervised release of up to three years for the wire fraud charge; up to 20 years in prison, up to a $250,000 fine, and supervised release of up to three years for the mail fraud charge; and up to 10 years in prison, a fine of up to $500,000 or twice the value of the property involved in the transaction (whichever is greater) and supervised release of up to three years for the money laundering violation. According to terms included in the plea agreement, the court will be asked to order the sentences imposed to run concurrently. Restitution to the victims of her crimes as well as forfeiture of assets gained through her illegal acts may also be ordered by the court.
Stanfill was the owner and operator of Stanfill Wealth Management in Knoxville. In the plea agreement on file with the U.S. District Court Clerk, Stanfill admits that she claimed to invest her clients’ money with legitimate investment companies; however, she converted the funds to her own personal use. In order to maintain the confidence of her clients, she created phony documents that had the appearance of account statements and correspondence from Charles Schwab and Co., Inc. She further attempted to maintain the confidence of her clients by making payments either under the guise of returning invested funds and accumulated earnings, and/or by sending funds to the Internal Revenue Service to maintain the illusion that the client’s fictitious investments were tax-deferred.
The investigation, which led to the indictment of Stanfill, was conducted by the FBI and IRS. Assistant U.S. Attorneys Frank Dale and Jennifer Kolman represent the United States.
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IRS Employee Pleads Guilty to Tax FraudRead the Press Release
FRESNO, Calif. — Yolanda Castro, 48, an employee of the U.S. Internal Revenue Service in Fresno, pleaded guilty today to aiding and assisting in the preparation of a false tax return, United States Attorney Benjamin B. Wagner announced.
According to court documents, Castro was employed by the IRS for approximately 20 years, including as a tax examiner and contact representative. Between 2007 and 2013, she prepared and filed false federal income tax returns for herself, her family members and others in which she fraudulently claimed tax deductions and credits. For instance, on her own 2008 tax return, Castro claimed a credit for education expenses that she did not incur, and provided the IRS phony textbook receipts to support the claim. Likewise, in tax returns she prepared for herself and others, Castro claimed child care expenses that had not been incurred.
This case is the product of an investigation by the U.S. Department of the Treasury Inspector General for Tax Administration and the IRS‑Criminal Investigation. Assistant United States Attorney Mark J. McKeon is prosecuting the case.
Castro is scheduled to be sentenced by Judge Dale A. Drozd on April 4, 2016. Castro faces a maximum statutory penalty of three years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Fresno Woman Sentenced to Prison for Embezzling over Half a Million Dollars from Law FirmRead the Press Release
FRESNO, Calif. — Shelley Corkins, aka Shelley Kimbrell, 39, of Fresno, was sentenced Monday by Senior United States District Judge Anthony W. Ishii to two years and three months in prison for three counts of wire fraud in connection with a scheme to embezzle more than $585,000 from the law firm that formerly employed her, United States Attorney Benjamin B. Wagner announced.
According to court documents, Corkins was employed by a Fresno-based law firm as a bookkeeper and accounting department supervisor. Between January 2008 and May 2012, Corkins abused her access and authority to manage the law firm’s finances and embezzled the law firm’s money for her own personal use. Corkins used her company credit card to make personal purchases at various retail outlets, including clothing and toy stores, electronically transferred funds from the law firm’s bank accounts to her own, and embezzled the law firm’s petty cash. Corkins pleaded guilty to three counts of wire fraud on February 10, 2015.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Henry Z. Carbajal III and Christopher D. Baker prosecuted the case.
Fremont Woman Sentenced for Mail FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that Marian Korbelik, age 67, of Fremont, Nebraska, was sentenced today to one year and one day imprisonment by the Honorable Laurie Smith Camp, for mail fraud. On October 19, 2015, she pled guilty to the charge in federal district court. Ms. Korbelik was also ordered to serve a three-year term of supervised release upon her release from prison and to pay $64,022.11.00 in restitution.
Korbelik, while living in Nebraska, was the part-time bookkeeper for Piedmont Orthopedic Lab, a company in South Carolina. On numerous occasions from 2006 through 2011 she sent falsified financial reports to the owners of Piedmont. The reports indicated certain amounts had been expended in particular months for legitimate expenses of Piedmont when in fact the expenditures had not been made. Ms. Korbelik wrote checks to herself disguised as legitimate business expenses.
This case was investigated by the Federal Bureau of Investigation.
Fort Worth Man Sentenced to 210 Months in Federal Prison for Distributing Child PornographyRead the Press Release
FORT WORTH, Texas — Erick Mayorga, of Fort Worth, Texas, was sentenced this morning by U.S. District Judge Reed C. O’Connor to 210 months in federal prison, following his guilty plea in June 2015 to one count of distribution of a visual depiction of a minor engaged in sexually explicit conduct. Today’s announcement was made by U.S. Attorney John Parker of the Northern District of Texas.
Mayorga, 36, has been in custody since his arrest in May 2015 on a related federal criminal complaint.
According to documents filed in the case, FBI special agents received information that the subject of a separate child pornography investigation had received child pornography via email from a specific hotmail.com email user, later determined to be Mayorga. A search warrant was executed at Mayorga’s residence in early May 2015, and Mayorga admitted that he used his email account to distribute child pornography.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI investigated and Assistant U.S. Attorney A. Saleem prosecuted.
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Former State Representative’s Cash Stash GrowsRead the Press Release
BOSTON – The U.S. Attorney’s Office, working with the U.S. Marshals Service and the Internal Revenue Service, have recovered more than an additional $1 million in cash as well as jewelry and luxury watches as a result of seizures Thursday, Jan. 7, 2016 and in late December 2015. In total, more than $2.5 million in concealed cash and other valuables have been recovered from safe deposit boxes controlled by John George, a former Dartmouth Selectman and State Representative. George was convicted and sentenced in 2015 on federal charges related to his embezzlement from a taxpayer-subsidized bus company which he controlled.
Thursday, special agents with the IRS seized over $800,000 in cash, as well as four Rolex watches and jewelry from three safe deposit boxes controlled by George. In several related seizures in December, U.S. Marshals discovered over $1.6 million in cash.
The money was recovered from seven safe deposit boxes filled with cash tied up in rolls of $100s, $50s, and other denominations. The safe deposit boxes were located at three banks in New Bedford and Fairhaven. Thursday’s actions followed court authorization to recover the additional funds discovered while executing the original search and seizure warrants in December.
George, 68, was sentenced to 70 months in prison in July 2015 for embezzling hundreds of thousands of dollars from the Southeastern Regional Transit Authority (SRTA).
George owned Union Street Bus Company (USBC), a New Bedford-based company that operated public buses. During the same period, George operated John George Farms (JG Farm), a large produce farm based in Dartmouth. From approximately 1991 to 2011, USBC was awarded the Southeastern Regional Transit Authority (SRTA) contract to operate the SRTA public bus system that served a region that included New Bedford, Fall River, and several other neighboring towns.
While USBC had the SRTA contract, George conspired to have USBC employees work at JG Farm during their assigned USBC work hours. Such farm work included plowing, loading produce, and operating a produce stand at JG Farm, all during USBC business hours. As part of the conspiracy, George deployed USBC workers to JG Farm to repair farm equipment and used USBC equipment and labor to provide personal out-of-state roadside assistance. George also inflated his final yearly salary from $75,000 to $275,000 in an attempt to fraudulently boost his SRTA pension.
From 2007 to 2011, George deposited only $5,000 in cash into his JG Farm business checking account despite the fact that JG Farm was the largest retail produce farm in Southeastern Massachusetts and did most of its business in cash.
Prior to his July 2015 sentencing, George was required to disclose his financial status to the Court. At that time, he stated that his liquid assets only consisted of about $160,000 in bank accounts and approximately $28,000 in cash.
United States Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the IRS-Criminal Investigation and John Gibbons, U.S. Marshal for the District of Massachusetts, made the announcement today. The criminal forfeiture was handled by Assistant U.S. Attorney Doreen Rachal of Ortiz’s Asset Forfeiture Unit working in conjunction with the U.S. Marshal’s Asset Forfeiture Unit. The criminal case was investigated by the U.S. Department of Transportation, Office of the Inspector General, and was prosecuted by Assistant U.S. Attorneys Dustin Chao and Ryan M. DiSantis of Ortiz’s Public Corruption Unit.
Former SCHOOL TEACHER Pleads guily in child pornography caseRead the Press Release
GREENVILLE – The United States Attorney’s Office for the Eastern District of North Carolina announces that in federal court today, WILLIAM EDWARDSON, JR., 56, of Jacksonville, pled guilty before United States Magistrate Judge Kimberly A. Swank to receipt of child pornography, in violation of Title 18, United States Code, Section 2252 (a) (2).
On September 2, 2015, a Federal Grand Jury returned a Criminal Indictment charging EDWARDSON. At the time, EDWARDSON was a teacher and soccer coach at Trexler Middle School in Richlands, North Carolina.
According to the investigation, law enforcement identified an IP address downloading and sharing child pornography via the peer-to-peer network, Shareaza. As the investigation progressed, the address and user were identified as EDWARDSON. EDWARDSON was interviewed and admitted to downloading visual depictions of minor children engaging in sexually explicit conduct.
Investigation of this case was conducted by the NC State Bureau of Investigation. Assistant United States Attorney Ethan Ontjes represented the government. This case was accepted for federal prosecution as part of Project Safe Childhood.
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News releases are available on the U. S. Attorney’s webpage at www.usdoj.gov/usao/nce within 48 hours of release.
Former Real Estate Associate Convicted of Bank Fraud in Tampa Mortgage SchemeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Joseph L. Pasquale (39, Fort Myers) guilty of one count of conspiracy to commit bank fraud and four counts of bank fraud. He faces a maximum penalty of 30 years’ imprisonment for each count. His sentencing hearing has been scheduled for April 8, 2016.
According to testimony and evidence presented at trial, Pasquale worked as a real estate sales associate for a brokerage firm based in Cape Coral. Between October 2007 and March 2008, he was involved in the negotiation and sale of four condominium units at the Arbors of Carrollwood, to clients in California and Massachusetts. Pasquale engaged in a conspiracy to conceal sales incentives from mortgage lenders, which these clients received from the seller, along with private loans that Pasquale made to the buyer-clients enabling them to bring cash to their respective real estate closings. As a consequence of his actions, Pasquale helped to cause a loss of approximately $937,000 to Wells Fargo Bank when the mortgages involved in the case went into foreclosure.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency-Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay L. Hoffer.
Former Police Chief Convicted of Selling Ammunition to Illegal AlienRead the Press Release
Montgomery, Ala. – The former Chief of Police for the town of Franklin, Alabama, was convicted of selling ammunition to an illegal alien after a three-day jury trial in federal court last week, announced George L. Beck, Jr., the United States Attorney for the Middle District of Alabama.
The evidence presented at trial showed that Michael T. Clements (57) ran a side business out of his home selling computers, iPhones, flat screen TV’s, and various other items while working as the Franklin Police Chief. Franklin is a small community located near Tuskegee in Macon County. Clements became the target of a federal investigation after the FBI, working with the Auburn Police Department, received information that he was selling stolen property and firearms. Through the use of a confidential informant, the FBI was able to purchase a stolen laptop and obtain a video of Clements brokering the sale of a firearm and ammunition to an illegal alien.
At trial, the evidence revealed that Clements negotiated the sale of a firearm to a Mexican national illegally in the country even after the alien had provided Clements with an identification card written entirely in Spanish and issued by a Mexican governmental entity. The evidence further proved that Clements then sold the ammunition after the alien told him that he attempted to purchase ammunition for the gun at a store, but could not do so because he was in the country illegally.
“For citizens to have confidence in their government, public corruption cannot be tolerated,” stated U.S. Attorney Beck. “As a public official, Mr. Clements was a guardian of the public trust. Thankfully, an overwhelming majority of law enforcement officers honorably serve their communities every day.”
Clements faces a maximum sentence of 10 years in prison, a $250,000 fine, and three years of supervised release. His sentencing hearing is scheduled for April 28, 2016.
The investigation of this case was a joint effort of the FBI and the Auburn Police Department working on the FBI’s Safe Streets Task Force. The Tuskegee Police Department and the Alabama Bureau of Investigation also provided support for this investigation. The case was prosecuted by Assistant United States Attorneys Brandon K. Essig and John Geer.
Former Idaho Construction Company President Sentenced to Prison for Fraud SchemeRead the Press Release
The former president and majority stockholder of a construction company was sentenced to five years in prison today following her plea of guilty to filing a false tax return and her conviction by a jury of conspiracy to defraud the United States, wire fraud, mail fraud, false statements, interstate transportation of property taken by fraud, conspiracy to obstruct justice and obstruction of justice, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Wendy J. Olson for the District of Idaho.
Elaine Martin, 69, of Meridian, Idaho, was the president of MarCon Inc., a construction company based in Meridian. In September 2013, after a 26-day jury trial, Martin was convicted of tax and fraud charges and sentenced to 84 months in prison. In August 2015, the U.S. Court of Appeals for the Ninth Circuit vacated Martin’s sentence and her tax conviction and remanded for resentencing and further proceedings on the tax charge. Today, Martin pleaded guilty to filing a false tax return and U.S. District Judge B. Lynn Winmill of the District of Idaho sentenced her to 60 months in prison on both the tax and fraud charges. In addition to the prison term, Judge Winmill ordered Martin to pay restitution to the Internal Revenue Service (IRS) and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60 and a forfeiture money judgment of $3,084,038.05, amounts Martin previously paid.
In the plea agreement, Martin admitted that she willfully signed false and fraudulent corporate income tax returns for Marcon Inc. for tax years 2005 and 2006. Martin also admitted that she caused these tax returns to be false and fraudulent by keeping the unreported income off of the books and that she falsely told an IRS revenue agent, who was conducting a civil audit of Marcon, that all of Marcon’s gross receipts were deposited into its Wells Fargo operating account, when in fact, Martin was diverting and depositing gross receipts into Marcon’s Bank of Cascades account. Martin withheld the records for Marcon’s Bank of Cascades from the individual who prepared her and Marcon’s tax returns for tax years 2005 and 2006. Martin admitted that the total tax loss was $73,678.
Martin also admitted to conspiring to defraud the SBA 8(a) Program and the U.S. Department of Transportation, Disadvantaged Business Enterprise (DBE) Program, by submitting fraudulent tax returns and making false statements concerning her finances that caused Marcon to qualify and/or remain eligible for these programs. Martin further admitted that her behavior affected the award of contracts pursuant to the 8(a) Program and DBE Programs. For example, Marcon’s status as an Idaho DBE affected how and what DBE goals were set for particular construction projects and helped Marcon maintain a virtual monopoly in its geographic region between 2000 and 2006. Marcon participated in the SBA 8(a) Program pursuant to direct negotiations with the awarding agency, rather than through fair and open competition. Martin admitted that during the relevant time period, she would not have been awarded the 33 contracts at issue in the case but for the fraud.
As part of the plea agreement that Martin entered into today, she waived her right to further appeal.
Assistant Attorney General Ciraolo and U.S. Attorney Olson thanked special agents of IRS-Criminal Investigation, the FBI, the Office of Inspector General for the U.S. Small Business Administration and the Office of Inspector General for the U.S. Department of Transportation, who investigated the case and Trial Attorney Gregory Bernstein and former Trial Attorney Katherine Wong of the Tax Division and Assistant U.S. Attorney Raymond Patrico of the District of Idaho, who prosecuted the case.
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.
Former Allentown Finance Director Admits to Rigging City Contract AwardRead the Press Release
PHILADELPHIA – Garret Strathearn, 68, of Sea Girt, NJ, pleaded guilty today to conspiracy to commit mail and wire fraud while serving as the Finance Director for the City of Allentown, PA.
Strathearn admitted that he personally and directly interfered with the awarding of a city contract, at the behest of Public Official #3 who was receiving campaign contributions from the eventual contract awardee. Strathearn and Assistant City Solicitor Dale Wiles, who previously pleaded guilty, corruptly manipulated the process for awarding the City of Allentown’s 2014 revenue collection contract with the approval of, and for the benefit of, Public Official #3. Strathearn and Wiles both falsified certain paperwork in order to create public records which gave the false impression that the contract awardee had earned the revenue collection contract on the merits. Strathearn and Wiles also made statements to FBI agents which were materially false with respect to the revenue collection contract award process for 2014.
After accepting the guilty plea, United States District Judge Juan R. Sanchez scheduled a sentencing hearing for April 14, 2016. Wiles in scheduled to be sentenced on March 2, 2016. Strathearn and Wiles each face a maximum possible sentence of 20 years in prison, a fine, three years of supervised release, and a $100 special assessment.
This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter.
Federal inmate pleads guilty to possessing weapon in prisonRead the Press Release
BLUEFIELD, W.Va. – An inmate at the Federal Correctional Institution at McDowell pleaded guilty today to possessing a weapon in prison, announced Acting United States Attorney Carol Casto. Tyrell Saunders, 22, entered his guilty plea in federal court to possession of a weapon by an inmate at the institution. Saunders admitted that on May 11, 2015, he possessed a handcrafted metal weapon known as a “shank.” He faces up to five years in federal prison when he is sentenced on April 5, 2016.
This case was investigated by the Federal Bureau of Prisons. Assistant United States Attorney John File is handling the prosecution. The defendant entered his guilty plea before Senior United States District Judge David A. Faber.
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Federal Jury Convicts Sioux City Man for Meth Distribution ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was convicted on January 8, 2016, after a two-day jury trial in federal court in Sioux City.
Alberto Sanchez, 46, from Sioux City, Iowa, was convicted of one count of conspiracy to distribute methamphetamine and two counts of distribution of methamphetamine. The verdict was returned January 8, 2016, following about three hours of jury deliberations.
The evidence at trial showed that from 2014 through June 2015, Sanchez was involved in a conspiracy that distributed more than 50 grams of actual (pure) methamphetamine in the Sioux City, Iowa area. Evidence at trial also showed that on March 30, 2015, and April 10, 2015, Sanchez distributed 83.4 grams and 51.1 grams of actual (pure) methamphetamine, respectively, to an individual cooperating with law enforcement. Further evidence at trial showed Sanchez utilized a minor to distribute methamphetamine for him.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Sanchez remains in custody of the United States Marshal pending sentencing. On the conspiracy conviction Sanchez faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum sentence of life imprisonment, a $10,000,000 fine, a $100 special assessment, and at least five years of supervised release following any imprisonment. On each distribution conviction, Sanchez faces a mandatory minimum sentence of 5 years’ imprisonment, a maximum sentence of 40 years’ imprisonment, a $5,000,000 fine, a $100 special assessment, and at least four years of supervised release following any term of imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Nathan Nelson and was investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-4037. Follow us on Twitter @USAO_NDIA.
Federal Court Permanently Shuts Down Colorado Tax Preparation BusinessRead the Press Release
A federal court has permanently barred a Colorado man and his tax preparation business from preparing federal tax returns, the Justice Department announced today. The United States filed a civil complaint against Gerardo Herrera and his business, El Lobo Multiservicios Professionales Inc., contending that they fraudulently reduced their customers’ tax liabilities by reporting extra dependents and claiming bogus deductions. After the defendants failed to respond to the complaint, on Jan. 7, 2016, Judge John L. Kane entered an order permanently banning Herrera from preparing returns.
According to the government’s civil complaint, Herrera and his staff repeatedly claimed their customers’ extended family members as dependents, even though they do not qualify for dependent status under federal law, and have improperly claimed deductions for personal expenses like cell phones and car insurance. In addition, according to the complaint, audits have shown that Herrera and his workers exaggerated deductions, reported fraudulent charitable contribution deductions and claimed improper head of household filing status. The complaint alleges that the Internal Revenue Service (IRS) audited more than 200 returns prepared by Herrera’s business and found misrepresentations on more than 99 percent of them.
Return-preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. 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.
Federal Charges Brought in Interstate Armed Jewelry Theft CaseRead the Press Release
PANAMA CITY, FLORIDA – Abigail Lee Kemp, 24, of Smyrna, GA, was charged by criminal complaint on Friday with conspiracy to interfere with commerce by threats or violence. The criminal complaint was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
The complaint alleges that, between April 2015 and the present, Kemp conspired with others to commit armed robberies of six jewelry stores in Panama City Beach, Florida, Georgia, South Carolina, North Carolina, and Tennessee. The complaint alleges that, in each robbery, the robber or robbers displayed a handgun, ordered the employees to the back of the store, ordered them to lie face-down on the floor, and bound their hands behind their backs with zip ties. The robber or robbers then removed hundreds of thousands of dollars-worth of jewelry from the jewelry display cases.
The punishment for the alleged crime is a maximum of 20 years in prison. The initial appearance is expected to take place at noon today in Judge Walker’s courtroom in the Northern District of Georgia in Atlanta. The next court appearance will take place at a date to be determined in the U.S. District Court in Panama City, Florida, in the Northern District of Florida.
This case resulted from an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Kathryn D. Risinger is prosecuting the case.
A criminal complaint is merely an allegation that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Federal Charges Brought Against Codefendant in Interstate Armed Jewelry Theft CaseRead the Press Release
PANAMA CITY, FLORIDA – Lewis Jones III, 35, of Atlanta, GA, was charged today by criminal complaint with conspiracy to interfere with commerce by threats or violence. The criminal complaint was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
Jones and Abigail Lee Kemp were arrested together in the Smyrna, Georgia, area on Friday, January 8, 2016, on charges related to the armed robberies of six jewelry stores in Panama City Beach, Florida, Georgia, South Carolina, North Carolina, and Tennessee. The complaint alleges that, in each robbery, the robber or robbers displayed a handgun, ordered the employees to the back of the store, ordered them to lie face-down on the floor, and bound their hands behind their backs with zip ties. The robber or robbers then removed hundreds of thousands of dollars-worth of jewelry from the jewelry display cases.
The punishment for the alleged crime is a maximum of 20 years in prison. The initial appearance for Lewis Jones III is expected to take place tomorrow in the Northern District of Georgia in Atlanta. The next court appearance will take place at a date to be determined in the U.S. District Court in Panama City, Florida, in the Northern District of Florida.
This case resulted from an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Kathryn D. Risinger is prosecuting the case.
A criminal complaint is merely an allegation that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Emily Gray Rice Sworn in as United States AttorneyRead the Press Release
CONCORD – The United States Attorney’s Office for the District of New Hampshire announced that the Honorable Emily Gray Rice was sworn in today as the United States Attorney for the District of New Hampshire. U.S. Attorney Rice is the 56th United States Attorney for the district and is the first woman to hold the position after having been nominated by the President and confirmed by the United States Senate.
U. S. Attorney Rice has been a trial lawyer for thirty years. She began her legal career at the New Hampshire Attorney General’s Office, representing the State of New Hampshire before the state and federal courts and administrative bodies. During her final three years there, she served as a senior assistant attorney general and chief of the bureau of civil law. After leaving the Attorney General’s Office, U. S. Attorney Rice spent more than two decades in private litigation practice, handling both trials and appeals. Immediately prior to becoming United States Attorney, she was a shareholder with Bernstein, Shur, Sawyer & Nelson, working in its Manchester, New Hampshire office.
U. S. Attorney Rice has been recognized by the New Hampshire Bar Association with the E. Donald Dufresne Award for Outstanding Professionalism; by the New Hampshire Women’s Bar Association with the Marilla Ricker Achievement Award; and by the New Hampshire Bar Association as an Honorary Fellow. Before becoming United States Attorney, she was the co-chair as of the New Hampshire Governor’s Judicial Selection Commission; the chair of the Leadership Council of the New Hampshire Campaign for Legal Services; and a member of the adjunct faculty at the UNH School of Law. U. S. Attorney Rice is a product of the Philadelphia public schools and earned her B.A. and M.A. degrees from Boston University. She is a proud graduate of the Northeastern University School of Law.
Doctor and Owner of Bronx Clinics Involved in Illegal Distribution of More Than Five Million Oxycodone Pills Is Sentenced to 12 Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced the conviction of KEVIN LOWE, the owner of “Astramed,” a purported medical clinic with multiple locations in the Bronx, New York, and from which more than five million tablets of the prescription painkiller oxycodone were unlawfully distributed over a three-year period. On May 4, 2015, LOWE was convicted of a conspiracy to distribute narcotics following a two-week jury trial presided over by U.S. District Judge Lorna G. Schofield. Today, Judge Schofield sentenced LOWE to a term of 144 months in prison.
Manhattan U.S. Attorney Preet Bharara said: “Kevin Lowe and his co-defendants used a network of bad doctors and street-level dealers to flood the streets of New York City with millions of highly addictive, potent opioids, all under the guise of a legitimate medical clinic. Instead of medical care, Lowe and others illegally dispensed opioids, enabling a vicious cycle of addiction that affects too many in our communities. Thanks to the Drug Enforcement Administration and the New York City Police Department, this so-called ‘clinic’ is out of business and those responsible are been held accountable.”
According to the allegations contained in the Indictment and the evidence presented by the government during LOWE’s trial:
From approximately January 2011 until February 2014, a drug distribution ring operated out of “Astramed,” a purported medical clinic with multiple locations in the Bronx that LOWE owned and operated. At these clinics, doctors working under LOWE’s direction wrote tens of thousands of medically unnecessary prescriptions for oxycodone, a highly addictive, prescription opioid used to treat severe and chronic pain conditions. Oxycodone prescriptions, once written, have enormous cash value to street-level drug dealers, who can fill prescriptions at most pharmacies and resell the resulting pills at vastly inflated rates. Indeed, a single prescription for 180 30-milligram oxycodone pills has an average resale value in New York City of more than $6,000, and far more in nearby states.
LOWE capitalized on the black market for oxycodone by employing board-certified, state-licensed doctors who were willing to write medically unnecessary prescriptions for large quantities of oxycodone in return for cash. LOWE’s clinics, which accepted no insurance from patients seeking oxycodone prescriptions, typically charged $300 in cash for “doctor visits” that usually lasted just a minute or two, involved no actual physical examination, and consistently resulted in the issuance of a prescription for large doses of oxycodone, typically 180 30-milligram tablets, or a daily dosage of six 30-milligram tablets.
LOWE’s clinics bore little resemblance to a standard medical office. For example, on a daily basis, crowds of up to 100 people gathered outside the Astramed office on Southern Boulevard (the “Clinic”) clamoring to see one of the doctors at the clinic in order to obtain a prescription for oxycodone. Virtually none of these individuals had any medical need for oxycodone, or any legitimate medical record documenting an ailment for which oxycodone would be prescribed. Instead, most of these individuals were members of “crews” – that is, they were recruited and paid by high-level drug traffickers, oxycodone distributors (the “Crew Chiefs”), to pose as “patients” in order to receive medically unnecessary prescriptions from the doctors. The Crew Chiefs then arranged for, and oversaw the filling of, the resulting prescription at various pharmacies and took possession of the oxycodone pills to be resold on the street. Crew Chiefs also paid the Clinic’s employees hundreds of dollars in cash at a time to get their Crew Members into the Clinic to see one of the doctors.
In total, between approximately January 2011 and February 2014, Astramed doctors issued 34,925 medically unnecessary prescriptions for oxycodone, comprising nearly 5.5 million oxycodone tablets with a street value of more than $165 million. LOWE alone collected more than $7 million in cash for these sham “doctor visits” during this time period.
* * *
On May 4, 2015, after a two-week jury trial, LOWE, 55, of Melville, New York, was convicted of one count of conspiracy to distribute and possess with intent to distribute oxycodone, which carries a maximum sentence of 20 years in prison. In addition to the prison sentence, LOWE was ordered to forfeit $2,338,661. LOWE has previously forfeited $455,351 in proceeds earned from his unlawful operation of the Astramed clinics and seized at the time of his arrest.
Twenty-three additional participants in the drug distribution ring – including doctors, clinic employees, and drug traffickers who oversaw crews of “patients” whom they sent into the clinics in order to obtain medically unnecessary prescriptions – have previously been sentenced by Judge Schofield pursuant to guilty pleas and are included in the chart below. Two defendants have pled guilty but have not yet been sentenced, and one defendant entered into a deferred prosecution agreement.
Mr. Bharara thanked the Drug Enforcement Administration and the New York City Police Department for their work on the investigation. Mr. Bharara also thanked the Town of Orangetown Police Department, the Westchester County Police Department, the United States Department of Health and Human Services, the New York State Health Department’s Bureau of Narcotic Enforcement, the Office of the Medicaid Inspector General, New York City's Human Resources Administration, the New York State Attorney General’s Office Medicaid Fraud Control Unit, the Internal Revenue Service-Criminal Investigation, and the El Dorado Task Force for their assistance.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorneys Edward B. Diskant and Tatiana R. Martins are in charge of the prosecution.
DEFENDANT
CHARGE
SENTENCE
Robert Terdiman
Pled guilty to conspiring to distribute oxycodone on March 20, 2015
Sentenced October 20, 2015, to time served, followed by one year of supervised release. As part of his plea, DR. TERDIMAN also forfeited $355,086
David Moody
Pled guilty to conspiring to distribute oxycodone on July 15, 2014
Sentenced November 14, 2014, to 90 months in prison, followed by three years of supervised release
Rashawn Whidbee
Pled guilty to conspiring to distribute oxycodone on July 29, 2014
Sentenced December 1, 2014, to 18 months in prison, followed by three years of supervised release
Robert Williams
Pled guilty to conspiring to distribute oxycodone on July 11, 2014
Sentenced October 14, 2014, to 48 months in prison, followed by three years of supervised release
Donald Carr
Pled guilty to conspiring to distribute oxycodone on July 14, 2014
Sentenced November 21, 2014, to 132 months in prison, followed by three years of supervised release
George Barrow
Pled guilty to conspiring to distribute oxycodone on July 29, 2014
Sentenced February 24, 2015, to 102 months in prison, followed by three years of supervised release
Bradley Mitchell
Pled guilty to conspiring to distribute oxycodone on August 3, 2014
Sentenced March 4, 2015, to 132 months in prison , followed by three years of supervised release
Elijah Pinckney
Pled guilty to conspiring to distribute oxycodone on September 29, 2014
Sentenced January 6, 2015, to 46 months in prison, followed by three years of supervised release
Evelyn White
Pled guilty to conspiring to distribute oxycodone on February 24, 2015
Sentenced August 10, 2015, to 12 months in prison, followed by three years of supervised release
Cedric White
Pled guilty to conspiring to distribute oxycodone on February 13, 2015
Sentenced August 3, 2015, to 24 months in prison, followed by three years of supervised release
Sheila Carter
Pled guilty to conspiring to distribute oxycodone on March 3, 2015
Sentenced July 27, 2015, to 40 months in prison, followed by three years of supervised release
Jonathan Huertas
Pled guilty to conspiring to distribute oxycodone on March 16, 2015
Sentenced August 27, 2015, to 32 months in prison, followed by three years of supervised release
OLGA MENDOZA DELAROSA
Pled guilty to conspiring to distribute oxycodone on September 12, 2014
Sentenced on February 18, 2015, to 30 months in prison, followed by three years of supervised release
BRYAN RIVERA
Pled guilty to conspiring to distribute oxycodone on March 2, 2015
Sentenced on June 4, 2015, to 12 months and a day in prison, followed by three years of supervised release
SAMANTHA LIVINGSTON
Pled guilty to conspiring to distribute oxycodone on April 2, 2015
Sentenced on December 1, 2015 to three years of probation
BRIDGET HIGGINS
Completed the term of a deferred prosecution agreement on November 13, 2015.
DAVID STEWART
Pled guilty to conspiring to distribute oxycodone on December 17, 2014
Sentenced on June 10, 2015, to four months in prison, followed by three years of supervised release
VOKART ALSAIDI
Pled guilty to conspiring to distribute oxycodone on December 17, 2014
Sentenced on April 24, 2015, to 60 months in prison, followed by three years of supervised release
KENRICK CHANDLER
Pled guilty to conspiring to distribute oxycodone on October 9, 2014
Sentenced on May 11, 2015 to 130 months in prison, followed by three years of supervised release
DARRYL BRATHWAITE
Pled guilty to conspiring to distribute oxycodone on September 9, 2014
Sentenced on December 11, 2014 to 52 months in prison, followed by three years of supervised release
THEODORE ROOSEVELT JOHNSON
Pled guilty to conspiring to distribute oxycodone on July 8, 2014
Sentenced on January 30, 2015, to 34 months in prison, followed by three years of supervised release
WALEED ALSAIDI
Pled guilty to conspiring to distribute oxycodone on February 4, 2015
Sentenced on July 8, 2015, to 30 months in prison, followed by 3 years of supervised release
RONALD CARR
Pled guilty to conspiring to distribute oxycodone on August 4, 2014
Sentenced on November 18, 2014 to 34 months in prison, followed by three years of supervised release
District Court Enters Permanent Injunction to Prevent Dallas Compounding Pharmacy and Three Individuals from Distributing Adulterated DrugsRead the Press Release
The U.S. District Court for the Northern District of Texas entered a consent decree for permanent injunction against Downing Labs LLC, Ashley Michelle Downing, Christopher Van Downing and Roger E. Mansfield to prevent them from distributing adulterated drugs in interstate commerce, the Department of Justice announced today.
The department filed a complaint in the U.S. District Court for the Northern District of Texas on Jan. 4, 2016, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, Downing Labs manufactures, packs, labels and distributes drugs in interstate commerce. As noted in the complaint, Downing Labs has been engaged in manufacturing drugs that, by virtue of their labeling and/or route of administration, purport to be or are intended to be sterile. The complaint alleges that Downing Labs has a long history of manufacturing drug products under conditions that fall short of the minimum requirements to ensure safety and quality.
“The permanent injunction requires Downing Labs and the individual defendants to bring their processes into compliance with the law, which is essential to ensuring that Downing Labs’ drug products are safe for the American public,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will remain vigilant in protecting consumers from pharmaceutical drugs that do not meet the safety protections provided under federal law.”
The federal Food, Drug, and Cosmetic Act defines adulterated drugs as those that are prepared or held under conditions where the drugs may become contaminated with filth or may become injurious to health. The Act also defines drugs as adulterated if the facilities or controls used for the drugs’ manufacture are not in conformity with current good manufacturing practices (CGMP).
The complaint alleges, among other things, that Downing Labs, its owners - Ashley and Christopher Downing - and pharmacist-in-charge, Roger E. Mansfield, violate the Act by introducing or delivering for introduction into interstate commerce sterile drugs that are adulterated in that they are prepared, packed, or held under insanitary conditions whereby they may have been contaminated with filth and/or rendered injurious to health. The complaint also alleges that defendants violate the Act by introducing or delivering for introduction into interstate commerce drugs that are adulterated in that the methods used in, or the facilities or controls used for, their preparation do not comply with CGMP requirements.
According to the complaint, the FDA conducted multiple inspections of Downing Labs and its predecessor, NuVision Pharmacy Inc. (NuVision), during the past three years. These inspections revealed numerous deficiencies, many of which had to do with the firm’s sterile drug production. The complaint alleges, for example, that test records obtained from the company pursuant to a September to October 2015 inspection showed excessively high levels of endotoxins in recently manufactured drug products. These products were not distributed. Endotoxins are substances found in certain bacteria that can cause a wide variety of serious reactions in humans, including high fever and shock.
FDA identified additional sterility problems during inspections in 2013 and 2014, according to the complaint. In 2014, Downing Labs’ records showed that 19 lots of supposedly sterile drugs had tested positive for various microorganisms, including the pathogens Staphylococcus haemolyticus, which can cause septicemia, peritonitis and urinary tract infections and Nocardia nova, which can cause pneumonia, sinusitis and skin infections. These products were not distributed. According to the complaint, however, FDA found that the company had failed to adequately investigate the cause of the sterility problems in the 19 lots.
According to the complaint, Downing Labs was formed in December 2013, purchased NuVision in January 2014 and obtained its pharmacy license from the state of Texas in June 2014. Defendant Ashley Michelle Downing serves as Downing Labs’ director and vice-president. She is responsible for all operations of the company. She previously held several positions at NuVision, including director, production manager, and quality manager. Defendant Christopher Van Downing, husband of Ashley Michelle Downing, is Downing Labs’ president, with responsibilities that include overall business management and compliance. Defendant Roger E. Mansfield became the pharmacist-in-charge at Downing Labs on Dec. 30, 2014, and is responsible for all pharmacy operations, including sterile drug production and oversight. He was a staff pharmacist at Downing Labs prior to becoming the pharmacist-in-charge.
The permanent injunction entered by U.S. District Judge Sam A. Lindsay for the Northern District of Texas enjoins the defendants from manufacturing, holding, or distributing drugs manufactured at or from their McEwen Road facility (located at 4001McEwen Road, Suite 110, Dallas, Texas) unless the defendants comply with the Act and associated drug manufacturing regulations. Under the injunction, Downing Labs will need to stop manufacturing, holding or distributing human drugs from its McEwen Road facility until it complies with the Act and regulations and the Decree. In addition, the permanent injunction authorizes the FDA to order Downing Labs to stop drug manufacturing should FDA determine that Downing Labs has violated the terms of the decree. The decree also authorizes the FDA to order Downing Labs to recall drugs that have been distributed by the firm or to destroy drugs that are in the process of being manufactured. Certain provisions of the injunction do not apply to drugs that defendants manufacture, hold, and/or distribute for animal use.
The government is represented by Trial Attorneys David A. Frank and Raquel Toledo of the Civil Division’s Consumer Protection Branch, with assistance of Associate Chief Counsel Michael D. Shane of the Department of Health and Human Services’ Office of General Counsel-Food and Drug Division and Assistant U.S. Attorney Mary M. (Marti) Cherry of the Northern District of Texas.
Detroit man convicted of oxycodone traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Sharod D. Nickelson, 44, of Detroit, Michigan, was convicted of oxycodone trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Nickelson conspired with other individuals to possess and sell oxycodone throughout the Ohio Valley. He pled guilty today to one count of “Conspiracy to Possession with Intent to Distribute and to Distribute Oxycodone.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Robert McWilliams prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.