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Thursday 12 November 2015
Two Columbia, Three California Residents Charged in Meth ConspiracyRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that two Columbia, Mo., residents and three Compton, Calif., men were charged in federal court today in separate but related cases for their roles in a conspiracy to distribute methamphetamine following their arrests earlier this week, which resulted in a manhunt and the lockdown of a nearby elementary school.
Zachary T. Fennell, 37, and Melissa Guerra, 33, both of Columbia, and Favbion D. Holmes, 38, Kameron T. Howard, 25, and Dijon R. Brown, 23, all of Compton, were charged in separate complaints filed in the U.S. District Court in Jefferson City, Mo., for participating in a conspiracy to distribute methamphetamine and for possessing methamphetamine with the intent to distribute. The defendants were arrested on Tuesday, Nov. 10, 2015 and will have their initial court appearances today. Fennell, Holmes, Howard and Brown remain in federal custody pending their detention hearings.
According to an affidavit filed in support of the federal criminal complaints, St. Louis, Mo., postal inspectors identified a suspicious parcel on Nov. 6, 2015, that was mailed from California to an address in the 4000 block of E. Santa Barbara Drive in Columbia, Mo., and suspected to contain a controlled substance. Federal agents recovered 456 grams of methamphetamine, valued at more than $11,000, from the parcel inside a hollowed-out book.
Federal agents executed a controlled delivery of the parcel to the Columbia residence on Tuesday, Nov. 10, 2015. Officers conducting surveillance of the residence saw two men leave the house at approximately 9:55 a.m. in a white Chevrolet Suburban. The parcel was delivered at 10:04 a.m. and placed next to the front door. A man inside the residence was observed opening and closing the front door of the residence several times, the affidavit says, and viewing the package through the screen of the storm door.
According to the affidavit, the white Chevrolet Suburban, which had previously left the residence, was observed driving past the residence at approximately 10:31 a.m., conducting what appeared to be counter-surveillance. After passing the residence one time, the vehicle returned and parked in the driveway of the residence at approximately 10:33 a.m. Brown and the driver got out of the vehicle; Brown took the parcel off the front porch, the affidavit says, and brought it inside the residence. At approximately 10:36 a.m., Fennell was observed bringing the parcel back outside the residence and placing it next to the front door. Several occupants of the residence were observed sitting near the front porch.
Shortly thereafter federal agents, assisted by the Boone County Sheriff’s Department Special Weapons and Tactics (SWAT) team, approached the residence to execute the search warrant. SWAT members were unable to breach the door as it had been reinforced. SWAT members made entry in a secondary location and agents saw Howard, Brown and Holmes running out the back door of the residence attempting to evade law enforcement. They hopped the backyard fence and continued running into an area of overgrown vegetation. Holmes was apprehended a short distance on the other side of the fence. Howard and Brown were apprehended hiding in a pool shed approximately one-quarter to a half-mile away, after a brief manhunt which resulted in the lockdown of a nearby elementary school. Fennell was apprehended in the front yard of the residence. Guerra, the leaseholder of the residence, was apprehended inside the residence.
Law enforcement officers also located three loaded firearms inside the residence, a small amount of methamphetamine in the freezer and in an upstairs bedroom dresser, and various documents that appeared to be ledgers for narcotics transactions.
Dickinson cautioned that the charges contained in these complaints are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the U.S. Postal Inspection Service, the FBI, the Columbia, Mo., Police Department and the Boone County, Mo., Sheriff’s Department.
Trophy Hunter Admits Illegally Killing Black Bear in New Jersey and Staging Fake Kill Site in New York to Conceal CrimeRead the Press Release
NEWARK, N.J. – A Ringwood, New Jersey, man today admitted transporting an American black bear he illegally killed in New Jersey across state lines to New York, and covering up the crime by creating false records and staging a fake kill site, U.S. Attorney Paul J. Fishman announced.
Martin Kaszycki, 36, pleaded guilty before U.S. Magistrate Judge Leda D. Wettre in Newark federal court to an information charging him with two counts of violating the Lacey Act by transporting a bear he had illegally killed in Newfoundland, New Jersey, to Sterling State Forest in New York, and covering up the crime by making false statements and staging a fake kill site.
According to documents filed in this case and statements made in court:
On Oct. 5, 2012, Kaszycki killed a 450-pound, male, America black bear from an elevated tree stand, with a bow and arrow, out of hunting season, after setting out bait for the bear within 300 feet of the stand near his place of business in Newfoundland, all in violation of New Jersey state laws. He then drove the bear across state lines to New York, where he falsely told a New York weigh station employee that he had killed the bear in New York’s Sterling State Forest, causing the employee to record the false information on a New York state Bear Data Form.
On Oct. 8, 2012, Kaszycki drove the hide and skull of the bear to a taxidermy shop in Pennsylvania to arrange for the parts to be mounted for a trophy display and falsely represented to a taxidermist that he had hunted the bear in New York, causing the taxidermist to record that information on a New York State Department of Environmental Conservation Taxidermist Bear Report.
When N.J. Division of Fish and Wildlife Officers confronted Kaszycki about the bear on Oct. 10, 2012, at his place of business, Kaszycki told them he had killed the bear in New York. Later that night, Kaszycki drove the guts of the bear to Sterling State Forest in New York, where he placed them in the woods to stage a fake kill site. When confronted again the next day by state officials about the bear, he led those officials to the staged kill site and told them it was the location where he had killed the bear.
The Lacey Act prohibits the interstate transport of wildlife taken or possessed in violation of any state law or regulation as well as the making of a false record for wildlife that has been or is intended to be transported in interstate commerce. New Jersey state laws prohibit the hunting of an American black bear out of season. New Jersey laws also prohibit the hunting of these bears while elevated in a standing tree within 300 feet of a baited area or with a bow and arrow.
As part of his plea agreement, Kaszycki must pay a fine of $5,000 to the U.S. Fish and Wildlife Service Lacey Act Reward Fund. He must also forfeit the skull and hide of the bear and pay $1,250 to the Woodlands Wildlife Refuge for the care and release of orphaned and injured American black bears in New Jersey.
The charge to which Kaszycki pleaded guilty carries a maximum penalty of one year in prison and a $100,000 fine. He was released on unsecured $10,000 bond with the condition that he surrender his hunting license and refrain from hunting pending his sentencing hearing, which is currently scheduled for Feb 17, 2016.
U.S. Attorney Fishman credited special agents of the U.S. Fish and Wildlife Service, Office of Law Enforcement, under the direction Resident Agent in Charge Preston Fant, as well as the N.J. Division of Fish and Wildlife, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Kathleen P. O’Leary of the U.S. Attorney's Office Health Care and Government Fraud Unit in Newark.
Defense counsel: Peter L. Festa Esq., Paterson, New Jersey
Toledo, Ohio, Felon Charged with 2005 Murder at Fort Knox Military BaseRead the Press Release
LOUISVILLE, Ky – A Toledo, Ohio, felon who is currently in prison for an aggravated murder conviction, was charged today by federal Information with one count of murder, which occurred in 2005, on the grounds of Fort Knox Military Base, announced U. S. Attorney John E. Kuhn, Jr.
According to the Information, on or about January 7, 2005, in the Western District of Kentucky, Meade County, Kentucky, the defendant, Ernest Otto Smith, age 49, murdered Cathy M. Barnett willfully, deliberately, maliciously, and with premeditation, on the grounds of Fort Knox, within the special territorial jurisdiction of the United States.
If convicted at trial, Smith could be sentenced to no less than life in prison and fined $250,000.Smith is currently in the custody of the Ohio Department of Prisons, and is an inmate at the Ely, Nevada, State Prison. A date for his initial appearance has not been scheduled.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the Federal Bureau of Investigation.
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The charge of a person by an Information is an accusation only and that person is presumed innocent until and unless proven guilty.
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Three Sentenced in Heroin and Money Laundering ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JERMAINE REYNOLDS, age 39, of Long Beach, Mississippi; DAVID HUMPHRIES, age 46, of Baltimore, Maryland; and MARLON BARNES, age 39, of New Orleans; were sentenced today for conspiring to distribute one kilogram or more of heroin. REYNOLDS had also pled guilty to one count of conspiring to launder money.
U.S. District Judge Carl J. Barbier sentenced REYNOLDS to a term of imprisonment of 120 months, with 12 months to run consecutive to another federal sentence that REYNOLDS is serving. HUMPRHIES was sentenced to 60 months imprisonment, and BARNES to 140 months imprisonment. Judge Barbier also sentenced each defendant to a 5-year term of supervised release following imprisonment and a special assessment of $100 per count of conviction.
According to court documents, a series of court-authorized wiretaps on the cell phones of New Orleans area heroin dealers led Drug Enforcement Administration agents to identify co-defendant Fredrick Douglas Brooks III as a Houston-based heroin trafficker who was distributing kilogram quantities of heroin in the New Orleans area. Brooks delivered heroin to the New Orleans market by using REYNOLDS and HUMPHRIES as his drug and bulk cash couriers. BARNES was one of the drug dealers who purchased wholesale quantities of heroin from Brooks’ network for distribution in New Orleans.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney Michael B. Redmann is in charge of the prosecution.
Three Sentenced in Heroin and Money Laundering ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JERMAINE REYNOLDS, age 39, of Long Beach, Mississippi; DAVID HUMPHRIES, age 46, of Baltimore, Maryland; and MARLON BARNES, age 39, of New Orleans; were sentenced today for conspiring to distribute one kilogram or more of heroin. REYNOLDS had also pled guilty to one count of conspiring to launder money.
U.S. District Judge Carl J. Barbier sentenced REYNOLDS to a term of imprisonment of 120 months, with 12 months to run consecutive to another federal sentence that REYNOLDS is serving. HUMPRHIES was sentenced to 60 months imprisonment, and BARNES to 140 months imprisonment. Judge Barbier also sentenced each defendant to a 5-year term of supervised release following imprisonment and a special assessment of $100 per count of conviction.
According to court documents, a series of court-authorized wiretaps on the cell phones of New Orleans area heroin dealers led Drug Enforcement Administration agents to identify co-defendant Fredrick Douglas Brooks III as a Houston-based heroin trafficker who was distributing kilogram quantities of heroin in the New Orleans area. Brooks delivered heroin to the New Orleans market by using REYNOLDS and HUMPHRIES as his drug and bulk cash couriers. BARNES was one of the drug dealers who purchased wholesale quantities of heroin from Brooks’ network for distribution in New Orleans.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney Michael B. Redmann is in charge of the prosecution.
Third Man Pleads Guilty to Meth ConspiracyRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Phoenix, Ariz., man pleaded guilty in federal court today to his role in a conspiracy to distribute methamphetamine after law enforcement officers seized several pounds of methamphetamine from his hotel room in Columbia, Mo.
Todd Michael Zazilenski, 40, of Phoenix, pleaded guilty today before U.S. Magistrate Judge Matt J. Whitworth to the charge contained in a June 15, 2015, federal indictment.
Zazilenski pleaded guilty to participating in a conspiracy to distribute methamphetamine in Boone County and elsewhere from April 2015 to May 14, 2015. Co-defendants Ryan Roger Ellingboe, 41, and Shane Alan Callahan, 30, both of Columbia, have pleaded guilty to the same charge.
A deputy with the St. Charles County, Mo., Sheriff’s Department stopped a Cadillac Escalade driven by Ellingboe for a traffic violation on May 14, 2015. Callahan was a passenger in the vehicle. The deputy smelled burnt marijuana upon approaching the vehicle and conducted a search of the vehicle. The deputy found a vacuum-sealed bag that contained approximately one pound of methamphetamine behind the glove box.
Ellingboe and Callahan told law enforcement officers they had traveled from Columbia that morning to meet a customer in St. Charles, Mo., who wanted to purchase the methamphetamine. Callahan stated that he was brokering the methamphetamine transaction between Ellingboe and another individual. Ellingboe explained to Callahan that he had access to a pound of methamphetamine and asked Callahan if he knew of a customer. Callahan located a customer in St. Charles who wanted to purchase one pound of methamphetamine. When Ellingboe picked up Callahan in Columbia that morning, he was already in possession of the one pound of methamphetamine. Ellingboe and Callahan then began driving to St. Charles to complete the transaction.
Zazilenski admitted that he provided the methamphetamine to Ellingboe to sell in St. Charles. Ellingboe was supposed to pay Zazilenski $8,000 for the methamphetamine. Law enforcement officers searched Zazilenski’s room at the Howard Johnson Inn in Columbia and found three bags, each containing approximately one pound of methamphetamine, for a total weight of 1.369 kilograms.
Zazilenski also admitted that he provided an additional 1.5 pounds of methamphetamine to Ellingboe during a visit to Columbia on April 17-19, 2015.
Under federal statutes, Zazilenski, Ellingboe and Callahan are each subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole, plus a fine up to $10 million. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Larry Miller. It was investigated by the Drug Enforcement Administration, the Columbia, Mo., Police Department, the St. Charles, Mo., Police Department and the St. Charles County, Mo., Sheriff’s Department.
Tax Preparers Charged with Defrauding Clients and IRSRead the Press Release
ATLANTA - Frazier Todd, Jr., Roberta Sheffield, and Cozzie Walker, have been arraigned on federal charges of conspiring to defraud their clients and the IRS by intentionally misrepresenting to the IRS that those clients incurred qualified education-related expenses and were entitled to receive a refundable tax credit.
“One of the ways the federal government encourages people to enroll in and complete their college education is by offering a refundable tax credit for certain expenses students incur, such as for tuition and books,” said U.S. Attorney John Horn. “These defendants allegedly exploited that tax credit by convincing thousands of clients—who were often elderly, disabled, unemployed, and low-income—that the refund was a “stimulus” program they were entitled to receive. The defendants knew that their clients had no qualified education expenses and were not eligible for the refund.”
“IRS Special Agents work year round to investigate and root out dishonest return preparers,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “These defendants clearly took advantage of the people in their community as well as other unsuspecting Americans. The indictment of these individuals helps reassure our communities that return preparers who lack integrity and engage in illegal activities will be held accountable for their actions.”
According to U.S. Attorney Horn, the indictment, and other information presented in court: Walker, Sheffield, and Todd, Jr. were principals of Diverse Resources Business and Tax Firm, a Union City tax preparer business, and People Helping the Community, Inc., a fraudulent non-profit organization. Acting through these entities, the defendants operated a scheme to exploit the American Opportunity Tax Credit (“AOTC”), a refundable tax credit for qualified postsecondary education expenses such as tuition and related costs. Students for whom the AOTC is claimed must be enrolled at least part-time in a degree- or certificate-seeking program at an eligible institution, and they must incur actual education-related expenses. Students can qualify for up to a $1,000 refund, even if they are not otherwise required to file taxes.
The defendants marketed the AOTC as a “stimulus” available to almost anyone, regardless of whether that person incurred education expenses or was even enrolled in school. Some clients did not even know the defendants were filing a tax return on their behalf. To make the scheme appear legitimate, the defendants manufactured a phony curriculum of short videos on topics such as healthy eating, exercise for seniors, and street safety, which they sent to clients after already claiming the AOTC. Even if the clients had paid tuition for these so-called “life enrichment courses,”—which they did not—the defendants knew these courses would not qualify their clients for the AOTC.
The defendants filed tax returns claiming the maximum AOTC refund for every client, representing to the IRS that each client had incurred several thousand dollars in qualified education expenses. Many of the tax returns were fraudulent in other ways too, such as claiming bogus income and business losses. The government estimates that the defendants’ conduct generated over $3.5 million in fraudulent refunds, some of which went to the clients and some of which the defendants retained for themselves. The majority of the defendants’ clients lived in the Atlanta, Georgia and Charlotte, North Carolina areas.
Frazier Todd, Jr., 57, Roberta Sheffield, 42, and Cozzie Walker, 41, all of Atlanta, Ga., are charged with conspiracy to commit wire and mail fraud and fourteen counts of aiding and abetting each other in presenting false and fraudulent claims for payment to the federal government. They were arraigned today before United States Magistrate Judge Russell G. Vineyard, after they were indicted by a federal grand jury on November 9, 2015.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
Anyone who has information concerning the allegations described in the indictment is encouraged to contact IRS-Criminal Investigation at 404-338-7519.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant United States Attorney Lynsey M. Barron is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Tax Preparer Who Filed False Tax Returns for Veterans Pleads GuiltyRead the Press Release
Assistant U.S. Attorney Joseph J.M. Orabona (619) 546-7951
NEWS RELEASE SUMMARY – November 12, 2015
SAN DIEGO – On the day after Veteran’s Day 2015, former U.S. Navy sailor Leonard Damon Washington pleaded guilty to tax evasion and filing false tax returns for a scam that resulted in more than $1 million in inflated tax refunds for fellow Navy service members, and over $140,000 in fraudulent tax preparation fees for Washington. Washington entered his guilty plea before U.S. Magistrate Judge Barbara L. Major, and remains in custody pending a sentencing hearing on February 5, 2016.
According to admissions in court and in his plea agreement, Washington was an active-duty sailor aboard the USS Higgins in San Diego in 2010 when he marketed himself to more than 140 Navy service members as someone who could assist in preparing and filing income tax returns. Washington convinced his fellow Navy service members to hire him as their tax preparer, and to pay him the exorbitant fee of $1,000 per return, by using a variety of false and misleading representations, including that he could obtain “special military tax” deductions and other special tax preparation services because of their military status.
Washington then prepared and filed false income tax returns on behalf of clients, including returns that claimed falsified gambling winnings and phantom tax withholdings, and thereby generated fraudulent tax refunds for his clients. Although he received over $140,000 in preparation fees from clients, Washington concealed his role as their paid tax preparer from the Internal Revenue Service (IRS). Washington directed his fraudulently-acquired fees into various bank accounts (including nominee accounts) in order to frustrate and impede the IRS’s efforts at determining his true income. Ultimately, Washington spent a substantial portion of his fraud proceeds on hotels, flights, restaurants, luxury items, jewelry and other personal expenses, and evaded more than $49,000 in personal federal income taxes he owed for 2010.
“This service member used his position in the U.S. Navy to recruit clients and cheat the system,” said U.S. Attorney Laura Duffy. “On the day after Veteran’s Day, when we are reminded of the amazing character and sacrifice of our best and brightest, this defendant stands in sharp contrast.” She reminded the public to always review a copy of any tax return prepared and filed on their behalf.
“Leonard Washington perpetrated a scheme that systematically defrauded the government, his fellow service members, and the taxpaying public,” said IRS Criminal Investigation’s Special Agent in Charge Erik Martinez. “IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false income tax returns.”
DEFENDANT Criminal Case No. 15CR0951-JM
Leonard D. Washington Age: 43 Springdale, Arkansas
SUMMARY OF CHARGES AGAINST DEFENDANT:
Count 1: Title 26, United States Code, Section 7201 B Tax Evasion. Maximum penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, 3 years of supervised release
Count 2: Title 26, United States Code, Section 7206(2) – Aiding and Assisting Preparation of False Tax Returns. Maximum penalties per count: 3 years’ imprisonment, $100,000 fine, $100 special assessment, 1 year of supervised release
INVESTIGATING AGENCIES
Internal Revenue Service-Criminal Investigation
Suspended APS Kindergarten Teacher Arrested on Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – Joshua Weitz, 39, of Albuquerque, N.M., made his initial appearance in federal court this morning on a criminal complaint charging him with distribution, receipt and possession of visual depictions of minors engaged in sexually explicit conduct. Weitz remains in federal custody pending a preliminary hearing and a detention hearing, both of which are scheduled for November 13, 2015.
Weitz was arrested last night on the criminal complaint which alleges that he distributed, received and possessed child pornography between Oct. 11, 2015 and Oct. 22, 2015, in Bernalillo County, N.M. At the time, Weitz allegedly committed these offenses he was employed as a kindergarten teacher by the Albuquerque Pubic Schools (APS). APS suspended Weitz’s employment following his arrest earlier this month on related state charges.
According to the criminal complaint, the investigation into Weitz began on Oct. 11, 2015, when an agent of the New Mexico Internet Crimes Against Children (ICAC) Task Force identified a computer with a specific IP address that was being used to share child pornography files. The criminal complaint alleges that between Oc. 11, 2015 and 22, 2015, the investigators were able to download a number of child pornography files from the computer at the IP address.
The criminal complaint alleges that further investigation revealed that the aforementioned IP address was subscribed to Weitz. On Nov. 4, 2015, a state court search warrant was executed at Weitz’ residence, and ICAC Task Force agents found Weitz allegedly in possession of a computer containing 40 files of child pornography. Weitz was arrested that day on related state charges which currently remain pending.
If convicted of the federal distribution or receipt of child pornography charges, Weitz faces a mandatory minimum of five years and a maximum of 20 years in prison. If convicted of the federal possession of child pornography, he faces a maximum of 20 years in prison. Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the New Mexico ICAC Task Force, the Bernalillo County Sheriff’s Office, the Albuquerque office of the FBI and the New Mexico Regional Computer Forensics Laboratory with assistance from the New Mexico Office of the Attorney General. Assistant U.S. Attorney Sarah Mease is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 80 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Office of the Attorney General. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
St. Croix Man Sentenced to 18 Months for Possession of Prison ContrabandRead the Press Release
St. Croix, USVI – District Court Chief Judge Wilma A. Lewis on November 10, 2015 sentenced Andelson Santiago, 24, of St. Croix, to 18 months’ imprisonment, three years of supervised release, and a $500 fine for possession of prison contraband, United States Attorney Ronald W. Sharpe announced.
On May 27, 2015, Santiago pleaded guilty to one count of Possession of Prison Contraband. As part of his plea, Santiago admitted that he was carrying a knife on December 25, 2013 while he was an inmate at the Golden Grove Adult Correctional Facility on St. Croix.
This case was investigated by the U.S. Drug Enforcement Administration and the Virgin Islands Bureau of Corrections. It was prosecuted by Assistant U.S. Attorney Rami S. Badawy.
St. Croix Man Arraigned on Charges of Murder for HireRead the Press Release
St. Croix, USVI – Delroy A. Thomas, 25, was arraigned today in District Court on St. Croix after being charged in a three-count information with use of interstate commerce facilities in the commission of murder for hire and related offenses, United States Attorney Ronald W. Sharpe announced. Thomas was detained pending trial.
The information is the result of months of investigative work by the U.S. Drug Enforcement Administration (DEA), Virgin Islands Police Department (VIPD), Federal Bureau of Investigation (FBI), Alcohol, Tobacco and Firearms (ATF), and the Department of Homeland Security Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI). The joint investigation was initiated based on information that an inmate at Golden Grove Adult Correctional Facility on St. Croix was planning to murder two witnesses in his upcoming case in the Virgin Islands Superior Court.
The information charges Thomas with use of interstate commerce facility in commission of murder for hire, attempted murder, and attempted retaliation against a witness.
If convicted on count one, Thomas faces a maximum sentence of 10 years in prison and a $250,000 fine. On count two, he faces a maximum sentence of 25 years in prison, and on count three, he faces a maximum sentence of 10 years in prison and a $2,000 fine.
United States Attorney Sharpe reminds the public that an information is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
Springfield Man Sentenced for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Jarod “Bull” Michel, 33, of Springfield, was sentenced by U.S. District Judge Stephen R. Bough to six years in federal prison without parole. The court also ordered Michel to pay a $5,000 fine and forfeit to the government a laptop computer that was used to commit the offense.
On June 5, 2015, Michel pleaded guilty to receiving and distributing child pornography over the Internet between July 18, 2013, and May 20, 2014.
According to court documents, Michel’s computer was identified by two separate law enforcement agencies conducting independent undercover investigations concerning the distribution of child pornography using peer-to-peer file-sharing software. Investigators downloaded several videos of child pornography that were being shared over the Internet by Michel’s computer. Law enforcement officers executed a search warrant at Michel’s residence and seized his laptop computer, which contained 21 videos of child pornography that depicted children as young as two years of age engaged in a variety of sexual acts with adults.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the FBI.
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."
Springfield Man Pleads Guilty to Child Pornography ChargeRead the Press Release
BOSTON – Daniel Lorenz, 45, pleaded guilty today to one count of possession of material involving the sexual exploitation of minors. U.S. District Judge William G. Young scheduled sentencing for Feb. 9, 2016.
On March 13, 2014, federal agents executed a search warrant at Lorenz’s Springfield residence. At that time, Lorenz waived his Miranda rights and told agents that he possessed on his computer a large quantity of child pornography, including both image and video files, and that most of the files depicted girls between the ages of eight and fourteen. Lorenz admitted that he had collected child pornography for at least three or four years and he distributed or received child pornography approximately three times per week using e-mail accounts. Lorenz created and utilized multiple social media accounts, including various Facebook and Google+ profiles in the name and image of a minor female, in order to make contact with minor females for the purposes of obtaining child pornography and to engage in sexually explicit conversations with girls, which he found “sexually and emotionally exciting.”
Pursuant to the search warrant, agents seized Lorenz’s personal computer and located approximately 800 video files of child pornography, including many files depicting the rape, bondage, and sexual torture of girls as young as three years old.
The charging statute provides a sentence of no greater than 20 years in prison, five years of supervised release, a fine of $250,000. According to the plea agreement, Lorenz has agreed to serve between 48 and 121 months in prison and ten years of supervised release. However, the agreement is subject to review and approval by the Court. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistance was also provided by the Springfield Police Department. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Seymour Resident Pleads Guilty to Producing Child PornographyRead the Press Release
KNOXVILLE, Tenn. – On Nov. 12, 2015, Naomi Jean Justice, 23, of Seymour, Tenn., pleaded guilty in U.S. District Court for the Eastern District of Tennessee, Knoxville, to using a pre-pubescent minor to produce child pornography. Sentencing has been set for 1:00 p.m., Mar. 31, 2016.
Justice faces a minimum of 15 years in prison and a maximum of up to 30 years prison, as well as supervised release following incarceration, restitution, and fines. She will also be required to register as a sex offender in any state in which she resides, works, or attends school.
In the plea agreement on file with the U.S. District Court Clerk, Justice admitted that in July 2014 she used a pre-pubescent minor to engage in sexually explicit conduct for the purpose of producing a picture of the conduct with her cellular telephone. She then sent the picture to someone in North Carolina.
This investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Seymour Resident Pleads Guilty to Producing Child PornographyRead the Press Release
KNOXVILLE, Tenn. – On Nov. 12, 2015, Naomi Jean Justice, 23, of Seymour, Tenn., pleaded guilty in U.S. District Court for the Eastern District of Tennessee, Knoxville, to using a pre-pubescent minor to produce child pornography. Sentencing has been set for 1:00 p.m., Mar. 31, 2016.
Justice faces a minimum of 15 years in prison and a maximum of up to 30 years prison, as well as supervised release following incarceration, restitution, and fines. She will also be required to register as a sex offender in any state in which she resides, works, or attends school.
In the plea agreement on file with the U.S. District Court Clerk, Justice admitted that in July 2014 she used a pre-pubescent minor to engage in sexually explicit conduct for the purpose of producing a picture of the conduct with her cellular telephone. She then sent the picture to someone in North Carolina.
This investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Sentencings for November 10 - November 12, 2015Read the Press Release
Antonio Moncada, Jr., 44, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on November 12, 2015, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine and for possession of a firearm in furtherance of a drug trafficking crime. Moncada, Jr., was arrested in Casper, Wyoming. He received 240 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $1,000.00 fine and a $200.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
John Goodman, 21, of Ethete, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on November 10, 2015, for assault with a dangerous weapon with intent to cause bodily harm. Goodman was arrested in Riverton, Wyoming. He received 45 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment. Restitution in this case will be determined at a later time. This case was investigated by the Federal Bureau of Investigation.
Victor Vidal Rodriguez-Erazo, 38, of Honduras, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on November 10, 2015, for illegal re-entry of a previously deported alien into the United States. Rodriguez-Erazo was arrested in Rock Springs, Wyoming. He received 57 months imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Second Seminole Man Pleads Guilty to Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that SHAWN ASHLEY DEATHERAGE, a/k/a Shawn Ashley Thomas, age 39, of Seminole, Oklahoma, pled guilty to DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A), punishable by not less than 10 years or more than life imprisonment, up to a $10,000,000.00 fine or both.
The Indictment alleged that beginning in or about April 2015, the exact date being unknown to the Grand Jury, and continuing until on or about September 2015, within the Eastern District of Oklahoma and elsewhere, the defendant did knowingly and intentionally combine, conspire, confederate and agree together, and with others known and unknown to the Grand Jury, to commit offenses against the United States, to possess with intent to distribute and to distribute 500 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The charges arose from an investigation by the McAlester Police Department, District 18 District Attorney’s Drug Task Force, Seminole Nation Lighthorse Police, Oklahoma Highway Patrol, Seminole County Sheriff’s Office, Seminole Police Department, Oklahoma Bureau of Narcotics, United States Marshal Service and the Drug Enforcement Administration.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Shannon Henson represented the United States.
Ride or Die Gang Members Sentenced on Firearm and Drug ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ERVIN SPOONER, a/k/a “Nerky,” age 27; TRE CLEMENTS, age 24; and ROMALIS PARKER, a/k/a “Ro Ro,” age 22, all residents of New Orleans, were sentenced today after having previously pled guilty to federal firearm and drug violations. U.S. District Judge Susie Morgan sentenced SPOONER to 108 months of incarceration, to be followed by 4 years of supervised release. CLEMENTS was 96 sentenced to months of incarceration, to be followed by 4 years of supervised release. PARKER was sentenced to 70 months of incarceration, to be followed by 4 years of supervised release.
SPOONER, CLEMENTS, and PARKER were three of twelve defendants charged with conspiring to distribute cocaine base in the St. Roch neighborhood. In addition, all twelve defendants were charged with conspiring to possess firearms in furtherance of their drug trafficking crimes. Three defendants were also charged with conspiring to violate the Racketeer Influenced Corrupt Organization Act, as well as substantive acts of violence.
To date, eight defendants charged in this case have pled guilty to various charges. Co-defendant ANDREALIE LEWIS was previously sentenced to 48 months incarceration. The following co-defendants are currently pending several sentencing hearings over the next three months: NYSON JONES, a/k/a “Nycie,” age 31, MORRIS SUMMERS, age 25, TYONE BURTON, a/k/a “Peanut,” age 22, TYRONE BURTON, a/k/a “Man Man,” age 21; and PERRY WILSON, a/k/a “Yummy,” age 24. The following defendants were convicted following trial and are pending sentencing as well: DELOYD JONES, a/k/a “Puggy,” age 23; BYRON JONES, a/k/a/ “Big Baby,” age 25; and SIDNEY PATTERSON, a/k/a “Duda Man,” age 24.
According to court documents and evidence presented at trial, the defendants were members and associates of the “Ride or Die” gang, which they also referred to as “R.O.D.” The Ride or Die gang was initially formed in or about 2007 and continued to exist through in or about 2013. During the course of the federal investigation into the gang, agents learned that the defendants used a house, located at 1632 Mandeville Street, among other locations, as a base of operations to package, sell, and store narcotics, as well as store firearms.
U.S. Attorney Polite praised the work of the Bureau of Alcohol, Tobacco, Firearms and Explosives as part of the metro area’s Multi-Agency Gang Unit (MAG) in investigating this matter. As an integral component of NOLA FOR LIFE’s Group Violence Reduction Strategy, the MAG Unit consists of a partnership with New Orleans Police Department (NOPD); Orleans Parish District Attorney’s Office (DA); Orleans Parish Sheriff’s Office (OPSO); Louisiana State Police (LSP); Parole Board of the Louisiana Department of Corrections; United States Attorney’s Office (USAO); Federal Bureau of Investigation (FBI); Drug Enforcement Administration (DEA); United States Marshal’s Service (USMS); and the United States Probation & Parole Office for the Eastern District of Louisiana. Assistant United States Attorneys Nolan D. Paige, Marquest Meeks and Special Assistant United States Attorney Brian Ebarb are in charge of the prosecution.
Richmond Man Sentenced to 15 Years in Prison for Home Invasion and Convenience Store RobberiesRead the Press Release
RICHMOND, Va. – Spencer Harris, 31, of Richmond, was sentenced today to 188 months in prison for two counts of interference with commerce by robbery. Harris was ordered by the court to pay $2,600 in restitution to the victims of the crimes.
Harris pleaded guilty on July 2, 2015. According to court documents, Harris committed two separate robberies over the span of ten days. During the first robbery committed on Nov. 13, 2014, Harris and an accomplice entered the home of a handicapped victim, assaulted him, and stole multiple items, to include $2000, prescription medication, and an antique firearm. Harris and the accomplice targeted the victim because they had prior knowledge he kept controlled substances and illegal drug proceeds at his residence. Before leaving the robbery scene, another victim arrived at the residence and was also assaulted by Harris and his accomplice. This second victim had an additional amount of cash and his car keys taken from his person. Harris and his accomplice fled in the second victim’s vehicle.
On Nov. 23, 2014, Harris and his accomplice committed an armed robbery at the Woods Edge Road Exxon. Upon being dropped off by his accomplice, Harris entered the store armed with an antique firearm and demanded money. After a brief struggle over the weapon, Harris obtained approximately $300 and fled the scene. In leaving the scene, Harris and his accomplice engaged in a high-speed pursuit with police. The robbers were apprehended several weeks later.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by U.S. District Judge Henry E. Hudson. Assistant U.S. Attorney Erik S. Siebert is prosecuting the case. The Richmond Police Department and Chesterfield County Police Department assisted in the investigation of this case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-84.
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Prison Gang Member Sentenced to over 17 Years in PrisonRead the Press Release
HONOLULU – Florence T. Nakakuni, United States Attorney for Hawaii, announced that Defendant Tineimalo Adkins was sentenced by U.S. District Judge Leslie E. Kobayashi to 210 months (17 ½ years) imprisonment on November 10. On October 10, 2014, following a multiple-week trial, a jury found Adkins guilty of the crime of Violent Crimes in Aid of Racketeering Activity (VICAR).
According to information produced in court, on February 17, 2013, Adkins, along with other USO Family prison gang inmates, beat and assaulted another inmate, resulting in the victim suffering traumatic brain injury and multiple facial fractures and lacerations,. At the time, Adkins was the "shot caller," for the USO Family prison gang which ordered the attack on the inmate at the Halawa Correctional Facility in order to further their power and influence within the facility.
The trial involved extensive testimony about the USO Family’s use of violence and witness intimidation to maintain their status as the most powerful prison gang within the state prison system.
In rendering the sentence, Judge Kobayashi told Adkins that the assault was "shockingly brutal," and that "it was [his] personal status and position in the USO family that allowed [him] to design and lead this assault."
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the State of Hawaii Department of Public Safety, and the Honolulu Police Department. Assistant U.S. Attorneys Jill Otake and Thomas J. Brady prosecuted this case.
Owner of Toms River, New Jersey, Accounting Business Admits Swindling Clients Out of Tax Refunds, Filing False Tax ReturnsRead the Press Release
CAMDEN, N.J. - A Toms River, New Jersey, woman today admitted filing false tax returns and using her accounting business to cheat her clients out of their tax refunds, U.S. Attorney Paul J. Fishman announced.
Doreen Gentile, 61, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count 2 and Count 27 of an indictment, charging her with mail fraud and filing a false income tax return.
According to documents filed in this case and statements made in court:
Gentile owned and operated her accounting business, Doreen A. Gentile & Associates, LLC (“DAG & Associates”), out of her home in Toms River. Gentile admitted that as part of her scheme, she would show her clients a tax return that indicated that they had no tax or refund due, owed a minimal amount of tax, or were due a refund that was far less than the amount to which they were entitled. Gentile then prepared a second set of tax returns, signed without her clients’ permission, that she submitted to the IRS or the State of New Jersey for the full tax refund.
Based on the second set of returns, the IRS or the State of New Jersey issued tax refund checks care of DAG & Associates and mailed them to the DAG & Associates post office box in Toms River. Gentile then deposited the tax refund checks into the DAG & Associates bank account without her clients’ permission. Afterwards, Gentile used the funds to pay for personal expenses.
Gentile also admitted that from 2006 through 2009, she failed to report to the IRS all of her income generated from DAG & Associates, including funds she stole as part of her refund scheme, resulting in tax losses of approximately $188,811.
The mail fraud count to which Gentile pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The count of filing a false income tax return carries a maximum potential penalty of three years in prison and a $100,000 fine. As part of her plea agreement, Gentile must also forfeit $905,004 representing proceeds of her scheme. Sentencing is scheduled for Feb. 22, 2016.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan Larsen, and special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, the for investigation leading to today’s plea.
The government is represented by Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.
Defense counsel: Christopher O’Malley Esq., Camden
Oregon Man Sentenced to over 14 Years in Prison for Use of a Firearm While Trafficking MethamphetamineRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Timothy Colhour, age 24, of Otis, Oregon, was sentenced today to 170 months in federal prison followed by three years of supervised release and ordered to pay a $4,800.00 fine on one count of Distribution of Methamphetamine and one count of the Use of a Firearm During and in Relation to a Drug Trafficking Offense. The Honorable Timothy L. Brooks presided over the sentencing in the United States District Court in Fayetteville.
According to court records, in December, 2014, as part of an ongoing investigation, officers with the Rogers Police Department purchased methamphetamine from the defendant, Timothy Colhour. During one arranged transaction with Colhour, officers made their presence known to the defendant and placed him under arrest. At that time Colhour admitted to the officers that he had a gun in his waistband. Officers then located a loaded Beretta 9 mm in Colhour’s waistband and a bag in his front shirt pocket that contained approximately one ounce of methamphetamine. The suspected methamphetamine was properly stored and sent to the Arkansas State Crime Lab for analysis where it tested to be approximately 26 grams of pure methamphetamine hydrochloride.
This case was investigated by the Rogers Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Drug Enforcement Administration (DEA). Assistant United States Attorney Kimberly Davis prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Orchard Park Man Sentenced for Health Care FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Gary Wannemacher, 50, of Orchard Park, NY, who was convicted of health care fraud, was sentenced to three years probation and 100 hours community by U.S. District Court Judge Elizabeth A. Wolford. In addition, the defendant was ordered to pay $57,373.86 in restitution to Independent Health and BlueCross BlueShield of Western New York.“Fraud such as this hurts policy holders and indeed all taxpayers who in the long run who must absorb increased costs to account for such crime,” said U.S. Attorney Hochul. “Our Office will continue to work hand in hand with our law enforcement to vigorously investigate and prosecute such crimes.”
Assistant U.S. Attorney Elizabeth R. Moellering, who handled the case, stated the defendant is the owner of Spring Creek Athletic Club in Springville, NY. Between January 2009 and December 31, 2012, Wannemacher submitted fraudulent claims to private health insurance companies for reimbursement of health programs offered at the athletic club that were not actually attended by the beneficiaries listed in the claims.
For instance, as part of the Silver Sneakers program, members of certain insurance companies could attend programs at the athletic club for no charge. When members attended, the athletic club was allowed to submit a claim for reimbursement to the insurance companies. The defendant submitted claims for reimbursement for programs not actually attended by members including claims for individuals who were out of town on the date of the claim form or who had recently had major surgery and did not attend the gym following the surgery. Wannemacher also submitted claims for reimbursement for programs supposedly attended by two individuals after the dates of their deaths.
The sentencing is the culmination of an investigation by the Federal Bureau of Investigation’s Western New York Health Care Fraud Task Force, under the direction of Special Agent in Charge Adam S. Cohen. The task force includes the New York State Attorney General’s Office–Medicaid Fraud Control Unit, New York State Department of Financial Services, U.S. Department of Health and Human Services–Office of Inspector General–Office of Investigations, U.S. Department of Labor-Office of Inspector General, U.S. Department of Veterans Affairs, and U.S. Food and Drug Administration.
Orange County Attorney Pleads Guilty to Wire Fraud and Tax Evasion Charges in $8 Million Scheme Related to Investments by ClientsRead the Press Release
LOS ANGELES – An attorney who prosecutors believe took at least $8 million in investment capital from clients and used the funds for personal expenses and luxury items pleaded guilty this morning to wire fraud and tax evasion charges.
Stephen Young Kang, 46, of Newport Beach, pleaded guilty before United States District Judge George Wu to two counts of wire fraud and one count of tax evasion.
According to a plea agreement filed last week in United States District Court,
Kang “admits that beginning as early as October 2012, and continuing through in or about at least September 2015, in Los Angeles and Orange Counties, and elsewhere, defendant knowingly and with intent to defraud, devised, participated in, and executed a scheme to defraud clients to whom defendant had agreed to provide legal or investment services.”
Kang admitted in court today that he defrauded a food distribution company, Ottogi America, Inc., that hired the attorney to help the company purchase properties near its distribution center in Gardena. Ottogi wire transferred funds to a trust account in Houston, Texas, to be used for the purchase of the properties. But Kang admitted that he did not use the money to invest in properties. Rather, Kang admitted that he caused the funds to be transferred to other accounts that he controlled. Prosecutors believe that Kang then used a substantial portion of Ottogi’s money to pay for personal expenses and business ventures, as well as to make partial payment to other victims.
Kang also admitted that he defrauded a Texas victim out of $500,000 in 2013 by falsely representing that he would invest the $500,000 in a company called Pegasus Capital Ltd., LLC. When the victim demanded repayment, Kang agreed in September 2015 – which was after he was initially indicted in this fraud case – to provide the victim with a “first priority security interest” in a term life insurance policy. Kang, however, failed to disclose to the victim that the life insurance was worth only $250,000, that Kang’s wife was the sole beneficiary of the policy, and that the policy was first applied for and approved on August 28, 2015. Prosecutors believe that Kang offered, and in some cases provided, the same life insurance policy to other victims.
“Attorneys owe their clients a special duty of loyalty and trust that is fundamental to our legal system,” said United States Attorney Eileen M. Decker. “The Department of Justice will defend this principle by holding responsible those who violate this duty of loyalty for their own personal gain.”
David L. Bowdich, the Assistant Director in Charge of the FBI's Los Angeles Field Office, stated: “Unfortunately, Mr. Kang put his personal financial interest above those of his clients who entrusted him to act on their behalf. By virtue of his profession and the trust afforded to him, his actions are all the more egregious.”
In relation to the tax evasion count, Kang admitted that he received at least $1,516,000 in income in 2013, but willfully attempted to evade the assessment of income tax by failing to file a federal income tax return for calendar year 2013 and using corporate accounts to conceal the income he received.
“Professionals, including attorneys, who create elaborate schemes that have no purpose other than to mislead others and defraud the IRS run the very high risk of prosecution,” said Special Agent in Charge Erick Martinez of IRS Criminal Investigation. “These individuals face severe consequences including imprisonment and substantial fines.”
As a result of today’s guilty pleas, Kang faces a statutory maximum sentence of 45 years in federal prison when he is sentenced by Judge Wu on February 11, 2016.
The case against Kang is the product of an ongoing investigation by the Federal Bureau of Investigation and IRS Criminal Investigation.
Based on the evidence in this case, investigators believe Kang may have victimized others in locations where he practiced law or resided, including California, Texas, and Seoul, Korea. Anyone who believes they may have been victimized by Kang should contact the FBI’s Los Angeles Field Office at (310) 477-6565.
Ohio Man Arrested for Soliciting the Murder of Members of the U.S. MilitaryRead the Press Release
An Akron, Ohio, man was arrested today on federal charges that he solicited the murder of members of the U.S. military.
Terrence J. McNeil, 25, appeared in U.S. District Court in the Northern District of Ohio after being charged with one count of solicitation of a crime of violence.
The charge was announced by Assistant Attorney General John P. Carlin, U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division.
“According to the allegations in the complaint, Terrence McNeil solicited the murder of members of our military by disseminating ISIL’s violent rhetoric, circulating detailed U.S. military personnel information, and explicitly calling for the killing of American service members in their homes and communities,” said Assistant Attorney General Carlin. “ISIL and its followers continue to use social media in an attempt to incite violence around the world, including in the United States. The National Security Division's highest priority is counterterrorism and we will use all of our tools to disrupt threats and acts of violence against our military members and their families.”
“As this nation honors our veterans, we must make clear that we will not tolerate threats of violence against our service members,” said U.S. Attorney Dettelbach. “This defendant is charged with urging harm to our men and women in uniform and will now answer for those threats.”
“While we aggressively defend First Amendment rights, the individual arrested went far beyond free speech by reposting names and addresses of 100 U.S. service members, all with the intent to have them killed,” said Special Agent in Charge Anthony. “We will remain vigilant in our efforts to stop those who wish to support these despicable acts.”
According to an affidavit filed in the case:
McNeil professed his support on social media on numerous occasions for the Islamic State of Iraq and Levant (ISIL), a designated foreign terrorist organization.
On or about Sept. 24, 2015, using a Tumblr account, McNeil reblogged a file with the banner “Islamic State Hacking Division,” followed by “Target: United States Military” and “Leak: Addresses of 100 U.S. Military Personnel.”
The file type is a .gif file, which allows multiple still images to be looped in one file, with a timed delay between each image. The text of the first file reads “O Brothers in America, know that the jihad against the crusaders is not limited to the lands of the Khilafah, it is a world-wide jihad and their war is not just a war against the Islamic State, it is a war against Islam…Know that it is wajib (translated to “necessary”) for you to kill these kuffar! and now we have made it easy for you by giving you addresses, all you need to do is take the final step, so what are you waiting for? Kill them in their own lands, behead them in their own homes, stab them to death as they walk their streets thinking that they are safe…”
The file then loops several dozen photographs, purportedly of U.S. military personnel, along with their respective name, address and military branch.
The final image looped is a picture of a handgun and a knife with text that reads “…and kill them wherever you find them…”
A charge is not evidence of guilt. It is the government’s burden to prove the case beyond a reasonable doubt, and a defendant is presumed innocent until that time.
The case is being investigated by the FBI’s Joint Terrorism Task Force in Cleveland. This case is being prosecuted by U.S. Attorney’s Office of the Northern District of Ohio and the National Security Division’s Counterterrorism Section.
McNeil Complaint
Northern District of Indiana Grand Jury Returns Superseding IndictmentRead the Press Release
HAMMOND- United States Attorney David Capp announced today that a federal grand jury returned a superseding indictment charging Robert Battle, age 42, of East Chicago, Indiana with knowingly and intentionally killing Reimundo Camarillo, Jr. on October 12, 2015, while engaged in a narcotics conspiracy.
The indictment alleges that beginning in approximately 2006 and continuing to October 12, 2015, Battle, along with unnamed others, conspired to distribute more than 5 kilograms of cocaine. The indictment alleges Battle used a firearm to kill Reimundo Camarillo, Jr., during and in relation to the conspiracy. The indictment also alleges Battle possessed with intent to distribute cocaine and marijuana. Battle had previously been indicted on October 22, 2015 for the marijuana offense after he was stopped on I-94 in Porter County. Approximately 73 grams of marijuana and $100,700 in U.S. currency were seized during that stop. Today’s indictment adds the cocaine and murder charges, and seeks forfeiture of that currency.
U.S. Attorney Capp advised that the decision to charge the case federally was a joint decision between the U.S. Attorney’s Office and the Lake County Prosecutor’s Office. A key factor in the indictment decision was that the alleged events in the drug conspiracy span multiple jurisdictions and cross state lines.
Since the alleged murder of Camarillo is now included in this federal indictment the Lake County Prosecutor’s Office will dismiss a pending murder charge against Battle in Lake County arising out of the same events.
U.S. Attorney Capp stated, “We work regularly with Bernie Carter and his office and make joint decisions on which jurisdiction is best able to handle a particular case. Often we defer to our State colleagues, and they in turn will defer to us on certain prosecutions. We greatly appreciate this cooperative relationship. It enables both offices to most effectively utilize their resources to protect the public.”
Lake County Prosecutor Bernard Carter stated, “I appreciate the continuous working relationship between my office and the U.S. Attorney’s Office. Because of the cooperation between our offices we are able to jointly make charging decisions that best protect and benefit our community.”
Battle will soon be taken into federal custody and will have his initial appearance before a United States Magistrate Judge next week.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; East Chicago Police Department; and Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys David J. Nozick and Thomas M. McGrath.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
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North Dakota Woman Acquitted of IncestRead the Press Release
United States Attorney Randolph J. Seiler announced that a Fort Yates, North Dakota, woman was acquitted of Incest as a result of a federal jury trial in Aberdeen, South Dakota, on November 4, 2015.
Linda McLaughlin, age 40, was indicted by a federal grand jury on July 14, 2015.
The charge stemmed from an alleged incident which occurred in June of 2015, when McLaughlin allegedly had a sexual relationship with her father.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency and the U.S. Attorney's Office prosecuted the case.
North Dakota Man Pleads Guilty to $2 Million Government Contract SchemeRead the Press Release
ALEXANDRIA, Va. – Jonathan Apple, 35, of Williston, North Dakota, pleaded guilty today to one count of conspiracy to commit wire fraud for his role in the receipt of $2 million in micro-dairy contracts from the U.S. government for use in Iraq.
According to the statement of facts filed along with the plea agreement, K.A, a U.S. government employee, helped to steer the sole-sourcing of $2 million in micro-dairy contracts to a company in which his son, Jonathan Apple, owned a 50 percent interest. However, Jonathan Apple and his partner had no technical experience in the industry. Jonathan Apple, his partner, and K.A. conspired to use K.A.’s official position to obtain non-public information in order to fraudulently win and administer government contracts. The conspirators further provided false information to, and concealed material details from, the U.S. government.
According to court records, K.A. provided templates and technical specifications used in the proposal submitted by Jonathan Apple and his partner to the U.S. government. In addition, Jonathan Apple caused false and misleading statements to be made to the U.S. government regarding his experience, ownership interest, and the status of the projects. Jonathan Apple received approximately $230,000 of profit from the fraudulently awarded contracts. When federal law enforcement agents confronted Apple about the scheme, he made false statements about his role, including that his father had no involvement in government contracting.
Apple faces a maximum penalty of five years in prison when he is sentenced on Feb. 26, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU); and Robert E. Craig, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office, made the announcement after the plea was accepted by U.S. District Judge T.S. Ellis, III. Assistant U.S. Attorneys Uzo Asonye and Katherine Wong are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-313.
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New York Man Sentenced to 10 Years in Prison for Enticing A Minor to Engage in Criminal Sexual ConductRead the Press Release
NEWARK, N.J. – A Bronx, New York, man was sentenced today to 120 months in prison for soliciting a girl to produce sexually explicit images and using Craigslist to advertise sexual encounters with the girl, U.S. Attorney Paul J. Fishman announced.
Gabriel Toro, 31, previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct. Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Toro admitted that between December 2011 and August 2014, he used the internet to induce a 14-year-old girl to engage in criminal sexual conduct, including taking pictures of her genitals for him. Toro also admitted to distributing images of the girl to another individual and posting advertisements on Craigslist for individuals to have sex with the girl in exchange for money.
In addition to the prison term, Judge Martini sentenced Toro to a lifetime term of supervised release. Toro must register as a sex offender.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: James Friedman Esq., Newark
Nevada Man Sentenced to Two Years in Prison for Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Glenn Litton, 47, resident of Carson City, Nevada, was sentenced today by United States District Judge Morrison C. England Jr. to two years in prison for aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to court documents, on November 19, 2014, Litton submitted an application for a U.S. passport to a passport acceptance officer in Sacramento. In the application, Litton used the identity of another individual, including that individual’s name, birthdate, and Social Security number. Litton also presented supporting documentation such as a birth certificate, a debit card, and employment ID card bearing the name of the individual whose identity he had assumed. As a result of the application, Litton was issued a U.S. passport in a false name.
This case was the product of an investigation by the U.S. State Department’s Diplomatic Security Service with assistance from the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Nevada Department of Motor Vehicles. Assistant United States Attorney Shelley D. Weger prosecuted the case.
Monroe County Tobacco Store Owner Charged with Fraud Conspiracy Involving Stolen and Counterfeit Credit CardsRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that on November 10, 2015 a federal grand jury in Scranton indicted Rehan A. Merchant, a/k/a Ray Merchant, a/k/a Aslam Ahmed, the former owner and operator of the Cigar and Tobacco Outlet in Tannersville, Pennsylvania, charging him with conspiracy to commit wire fraud.
According to United States Attorney Peter Smith, the indictment charges Merchant with allegedly conspiring with unnamed co-conspirators to use counterfeit and stolen credit and debit cards to make fraudulent purchases at the Cigar and Tobacco Outlet. Merchant and his co-conspirators also allegedly forged the names of cardholders on credit and debit card receipts. The activities took places from September 2014 through September 2015.
Merchant was taken into custody last week in Florida after a Criminal Complaint was issued by the U.S. Attorney’s Office in Scranton.
The continuing investigation is being conducted by Homeland Security Investigations and detectives from the Monroe County District Attorney’s Office. The case is being prosecuted by Assistant United States Attorney Phillip J. Caraballo.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 30 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Monroe County Man Sentenced to 12 Years in Prison for Making False Claims of Owning Billions of Dollars of Oil and Negotiable Bank InstrumentsRead the Press Release
WILKES-BARRE - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Richard J. Harley, age 71, of Shawnee on the Delaware, Pennsylvania was sentenced in Federal District Court in Wilkes-Barre to serve 12 years in prison by United States District Court Judge A. Richard Caputo. Harley was convicted after a two-week jury trial of 23 counts of wire fraud, bank fraud, bankruptcy fraud, and making false statements on bankruptcy schedules on December 15, 2014. Harley was ordered to pay restitution in the amount of $323,800. Harley was ordered to report to the Bureau of Prisons on November 23, 2015 to commence the sentence.
According to United States Attorney Peter Smith, Harley defrauded investors and attempted to defraud the Federal Reserve Bank of New York and several financial institutions by soliciting money based on false claims that his company, RJH and Co. Inc., owned 10 million barrels of oil in Texas worth over $1 billion and had “unrestricted bond power” over $5 trillion in federal reserve bank instruments supposedly held at the Federal Reserve Bank of New York. As a result of the fraud, investors lost approximately $323,800.
The bank fraud charge relates to Harley’s attempt to deposit two phony $500 million checks purportedly issued by the Federal Reserve Bank of New York into several financial institutions. Harley also filed three fraudulent bankruptcy petitions in 2010, 2011 and 2012 where he attempted to discharge the debt he owed to one of the primary victims of the oil scheme.
Harley was previously convicted of mail and wire fraud and sentenced to five years’ imprisonment in 2001 for a scheme that defrauded AIDS patients and investors relating to a fraudulent ozone-enema treatment he claimed cured AIDS. The jury verdict in the latest case relates to activities that occurred immediately after Harley was released from federal prison.
The case was investigated by the Federal Bureau of Investigations and was prosecuted by Assistant United States Attorney Bruce Brandler, Chief of the Criminal Division.
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Mobile County Man Sentenced to 46 Months for Role in Bank RobberyRead the Press Release
The United States Attorney Kenyen Brown announces that Carl D. Greene, Jr., a 20 year old resident of Mobile, Alabama was sentenced today to 46 months incarceration and ordered to pay restitution in the amount of $5400.00 to Century Bank on Grand Bay Wilmer Road in Grand Bay, Alabama. After completion of his incarceration, he will serve a term of supervised release of three years.
On August 13, 2015, Mr. Greene pled guilty pursuant to a plea agreement that noted he was one of two men that robbed two banks in the area during March of this year. One each occasion, Greene acted as the masked man who entered the banks and obtained the money after threatening to shoot the tellers if they did not comply. No actual gun was displayed or used. His accomplice acted as the getaway driver. The other bank robbery occurred at the Bancorp South Bank on Schilliger Road. All the money from that robbery was recovered.
Special agents of the Federal Bureau of Investigation along with Mobile, Alabama police officers investigated the case and presented it to the U.S. Attorney's Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
Mobile County Man Sentenced to 46 Months for Role in Bank RobberyRead the Press Release
The United States Attorney Kenyen Brown announces that Jason Dixon, a 20 year old resident of Mobile, Alabama was sentenced today to 46 months incarceration and ordered to pay restitution in the amount of $5400.00 to Century Bank on Grand Bay Wilmer Road in Grand Bay, Alabama. After completion of his incarceration, he will serve a term of supervised release of three years.
On August 14, 2015, Mr. Dixon pled guilty pursuant to a plea agreement that noted he was one of two men that robbed two banks in the area during March of this year. One each occasion, his cohort acted as the masked man who entered the banks and obtained the money after threatening to shoot the tellers if they did not comply. No actual gun was displayed or used. Dixon acted as the getaway driver both times. The other bank robbery occurred at the Bancorp South Bank on Schilliger Road. All the money from that robbery was recovered.
Special agents of the Federal Bureau of Investigation along with Mobile, Alabama police officers investigated the case and presented it to the U.S. Attorney's Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
Milford Psychiatrist and Office Employee Charged with Illegally Distributing NarcoticsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration for New England, and Milford Police Chief Keith Mello announced that LJUDMIL KLJUSEV, M.D., who has operated a psychiatry practice located at 227 Naugatuck Avenue in Milford, was arrested today on a federal criminal complaint charging him with distributing narcotics outside of the scope of professional practice, and money laundering. DUSAN BOSOTOV, who was employed by KLJUSEV, also was arrested on a charge of illegally distributing narcotics.
KLJUSEV, also known as “Dr. K.”, 51, was arrested this morning at his residence in Fairfield. He appeared this afternoon before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and is detained. BOSOTOV, 32, was arrested this morning at his residence in Clifton, New Jersey. He appeared before a U.S. magistrate judge in Newark and was released on a $200,000 bond. Although he was referred to as “Dr. B.,” BOSOTOV is not a licensed physician.
As alleged in the criminal complaint, KLJUSEV has been a high-volume prescriber of Adderall and Xanax to patients who pay for office visits and prescriptions in cash.
Adderall, which is classified as a Schedule II drug by the DEA, is the brand name for a drug containing a combination of amphetamine and dextroamphetamine, both of which are central nervous system stimulants. This combination of drugs is used to treat narcolepsy and attention deficit hyperactivity disorder (“ADHD”). Xanax, which is classified as a Schedule IV drug by the DEA, is a brand name for a drug containing Alprazolam, a benzodiazepine drug. Alprazolam is commonly used to treat anxiety disorders or panic disorders.
The investigation, which has included the use of confidential witnesses and an undercover officer posing as patients, revealed that KLJUSEV prescribed the drugs without a full medical examination of the patient, provided prescriptions without confirming conditions that would medically require treatment using these drugs and dispensed prescriptions in exchange for cash to patients who display substance abuse and addiction behaviors. KLJUSEV also directed non-physician employees, including BOSOTOV, to write prescriptions signed by KLJUSEV when KLJUSEV was out of the country. KLJUSEV then deposited the cash proceeds of his unlawful activities into a business account, which he used to fund his personal expenses, including mortgage payments, international travel, and clothing.
KLJUSEV and BOSOTOV are each charged with conspiracy to distribute and to possess with intent to distribute narcotics, an offense that carries a maximum term of imprisonment of 20 years. KLJUSEV also is charged with money laundering, an offense that carries a maximum term of imprisonment of 10 years.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This ongoing investigation is being conducted by the DEA’s New Haven Tactical Diversion Squad and the Milford Police Department. The DEA Tactical Diversion Squad includes officers from the Bristol, Greenwich, Hamden, Shelton, Vernon, West Hartford and Willimantic Police Departments. This case is being prosecuted by Assistant U.S. Attorneys Sarah Karwan and Avi Perry.
Methamphetamine Trafficker Sentenced to 11 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Miguel Sotelo, 41, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to 11 years in prison and a $25,000 fine for possessing methamphetamine with the intent to distribute it, United States Attorney Benjamin B. Wagner announced.
According to court documents, in April 2014, Sacramento County Sheriff’s detectives spotted a Honda Accord speeding northbound on Interstate 5 near Twin Cities Road in Sacramento County. Detectives stopped the car and spoke with the passenger, defendant Miguel Sotelo, who stated that the car belonged to his wife who was not present. Shortly afterward, a narcotic detection K9 unit alerted on the rear left wheel well. Officers later found more than 14 pounds of methamphetamine stored in two bags located in the car’s trunk. Officers also found $23,000 in cash.
Based on the amount of methamphetamine and currency found in the car, detectives executed a state search warrant at Sotelo’s business called “Sotelo’s Tree Care.” At the business, officers found about 266 grams of cocaine, a pistol and a digital scale.
This case was the product of an investigation by the Drug Enforcement Administration and the Sacramento County Sheriff’s Office. Special Assistant United States Attorney Josh F. Sigal prosecuted the case.
Sotelo has remained in custody since his arrest on April 9, 2014.
Maryland Man Admits Distributing Synthetic Drug that Caused Overdoses at Wesleyan UniversityRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ZACHARY KRAMER, 22, of Bethesda, Maryland, pleaded guilty today in New Haven federal court to one count of conspiracy to possess with the intent to distribute, and to distribute, MDMA (“Molly”). The charge stems from an investigation into the distribution of controlled substances that caused multiple Wesleyan University students to overdose earlier this year.
According to court documents and statements made in court, in approximately September 2014, KRAMER, who was a student at Wesleyan in Middletown, Connecticut, began purchasing and reselling a substance he knew as “Molly” and which he believed to be ecstasy or MDMA, a Schedule I controlled substance. After obtaining bulk quantities of the drug from another student, KRAMER sold it in smaller quantities to students at Wesleyan.
In approximately December 2014, KRAMER became the primary supplier of MDMA at Wesleyan. KRAMER typically would sell the MDMA in .1 gram quantities for $20 each or he would sell it in 5-gram and 10-gram quantities for a discount, charging $100 or more, depending on the customer and the quantity. During this time period, KRAMER was still supplied by the same individual who provided KRAMER the MDMA in bulk quantities. In approximately January 2015, KRAMER purchased approximately 45 grams of MDMA from this supplier. He broke that quantity into 5 and 10-gram bags and distributed those bags to other students who planned to break down the MDMA into .1 gram capsules, sell those capsules to other Wesleyan students, and pay KRAMER for the quantity of the drug he had provided to them.
On February 21, 2015, 11 individuals, including 10 Wesleyan students, overdosed on a substance they believed was MDMA, and many were transported to the hospital. Two of the students were in critical condition, and one of the students had to be revived after his heart stopped. All of these students obtained the purported MDMA through individual distributers who were supplied directly by KRAMER.
Although KRAMER and some of his distributers destroyed the substance identified as Molly that they had in their possession, one of the distributers did not, and that substance was seized by law enforcement officers and sent to the toxicology laboratory for testing. Laboratory analysis confirmed that the powdered substance contained AB Fubinaca, a Schedule I controlled substance.
The charge of conspiracy to possess with the intent to distribute, and to distribute, MDMA carries a maximum term of imprisonment of 20 years and a maximum fine of $1 million. KRAMER is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on February 10, 2016, in Hartford.
KRAMER has been released on bond since his federal arrest on May 22, 2015.
This matter is being investigated by the Drug Enforcement Administration and the Middletown Police Department, with the assistance of the State of Connecticut’s Forensic Science Laboratory.
U.S. Attorney Daly acknowledged the support and assistance of the Middlesex State’s Attorney’s Office, which is prosecuting several state cases stemming from these overdose events.
The federal case is being prosecuted by Assistant U.S. Attorney Robert M. Spector and Senior Assistant State’s Attorney Eugene Calistro, who has been cross-designated as a Special Assistant U.S. Attorney in this matter.
Manhattan U.S. Attorney Announces the Arrest of Two Venezuelan Nationals for Conspiring to ImportRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), today announced that EFRAIN ANTONIO CAMPO FLORES and FRANQUI FRANCISCO FLORES DE FREITAS were arrested in the Republic of Haiti on Tuesday and brought to the United States based on a charge that they conspired to import cocaine into the United States. CAMPO FLORES and FLORES DE FREITAS will be presented before U.S. Magistrate Judge James L. Cott later today.
According to the allegations in the Indictment[1], which was unsealed today in Manhattan federal court, CAMPO FLORES, 29, and FLORES DE FREITAS, 30, conspired with others between October 2015 and the present to violate U.S. narcotics laws prohibiting the importation of cocaine. Specifically, the Indictment charges CAMPO FLORES and FLORES DE FREITAS with conspiring to (i) import five or more kilograms of cocaine into the United States from a foreign country; and (ii) distribute five or more kilograms of cocaine knowing and intending that it would be imported into the United States. The charge in the Indictment carries a maximum penalty of life in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Bharara praised the outstanding investigative work of the DEA’s Special Operations Division, Bilateral Investigations Unit, and New York Strike Force. Mr. Bharara also thanked the DEA’s Port-au-Prince Country Office, U.S. Customs and Border Patrol's National Targeting Center, DEA’s Airwing, the Government of the Republic of Haiti and the Haitian National Police, and the U.S. Department of Justice’s Office of International Affairs for their ongoing assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III, Mathew J. Laroche, Michael D. Lockard, and Brendan F. Quigley are in charge of the prosecution.
The charge contained in the Indictment is merely an accusation and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Media AdvisoryRead the Press Release
The United States Attorney’s Office (USAO), the South Dakota Attorney General, and other law enforcement partner agencies will hold a press conference on Monday, November 16, 2015, at the Andrew W. Bogue Federal Building in Rapid City, South Dakota.
Discussed will be the sentencing of Andrew Hiipakka, a former middle school teacher convicted of Attempted Enticement of a Minor Using the Internet; the law enforcement collaboration that led to the prosecution; and continuing efforts to combat child pornography.
WHO: Sarah Collins: U.S. Attorney’s Office, Senior Litigation Counsel
Gregg Peterman: Supervisory Assistant U.S. Attorney
Marty Jackley: South Dakota Attorney General
Brent Gromer: Internet Crimes Against Children Task Force Commander
Captain James Johns: Rapid City Police Department, Criminal Investigation Division
Captain Corey Brubakken: Pennington County Sheriff’s Office
Mark Stewart: Homeland Security Investigations, Resident Agent in Charge
Michael Diaz: Homeland Security Investigations, Special Agent
WHAT: Press Conference
WHEN: Monday, November 16, 2015, at approximately 4:45 p.m. MST - or immediately following the sentencing. Sentencing is scheduled for 3:00 p.m. (Exact start time of press conference is dependent upon completion time of sentencing.)
WHERE: USAO Conference Room, located on the 2nd Floor of the Federal Building. Address is 515 Ninth Street, Rapid City.
SECURITY: All media must enter through the first floor lobby. Media will be required to go through security and present a government-issued photo ID. Audio and video recording devices are allowed only in the press conference location, and the use of these devices is prohibited anywhere else in the federal building.
Press inquiries regarding logistics should be directed to Ace Crawford at 605.341.1915 or 605.838.6092.
Lorain County and federal law enforcement work together to combat violent crime and drug traffickingRead the Press Release
Several indictments regarding drug trafficking and firearms crimes in Lorain County were recently unsealed in federal court as part of an ongoing coordinated enforcement initiative, law enforcement officials said.
The indictments were announced by U.S. Attorney Steven M. Dettelbach, Lorain County Prosecutor Dennis Will, Elyria Police Chief Duane Whitely, Lorain Police Chief Cel Rivera, Lorain County Sheriff Phil Stammitti, Drug Enforcement Administration Resident Agent in Charge Keith Martin, ATF Special Agent in Charge Donald J. Soranno and Federal Bureau of Investigation Special Agent in Charge Steven D. Anthony and the Lorain County Sheriff’s Drug Task Force.
Cases recently filed include:
Jason Vasquez, 37 of Lorain, was charged in a seven-count indictment with conspiracy to distribute heroin. He also faces charges for possessing a firearm and ammunition despite previous convictions for drug trafficking, felonious assault and intimidation. Vasquez is believed to be a major source of heroin and fentanyl in the Lorain County area.
Anetaeus Spencer, 33, of Lorain, was charged with one count of being a felon in possession of ammunition and several firearms, namely: a Rohm Arms 7.62 x 39 mm. rifle, a Taurus “Judge” .45LC/410GA revolver, a Smith and Wesson pistol, a Keltec .380 handgun and a Mossberg 12 gage shotgun. He was previously convicted of felony offenses which would prohibit him from possessing a firearm and ammunition. Spencer also sold quantities of crack and heroin, and had several thousand dollars on his person at the time of his arrest, according to the indictment.
Octavious Smith, 37, of Elyria, was indicted for possessing a 9 mm firearm and distributing heroin and crack cocaine in Lorain County. Smith was previously convicted of felony offenses which would prohibit him from possessing a firearm and ammunition.
Calvin L. Williams, 32, of Elyria, was indicted on one count of being a felon in possession of a weapon, namely a Glock 9 mm handgun. Williams also has pending state drug cases and was previously convicted of felony offenses which would prohibit him from possessing a firearm or ammunition.
Steve J. Hamilton, 24, of Lorain, was indicted on one count of being a felon in possession of a firearm, namely a Heritage MFG “Rough Rider” .22-caliber revolver. Hamilton was previously convicted of felony offenses which would prohibit him from possessing a firearm and ammunition.
These indictments are just the latest in the continuing efforts of the United States Attorney’s Office to work with local partners Lorain County to ensure those who repeatedly violate gun and drug laws in Lorain County are held accountable.
“These defendants’ days of selling drugs on the streets of Elyria and Lorain, or carrying firearms despite prior felony convictions, are over,” Dettelbach said. “These cases are a great example of what happens when agencies and departments combine their resources and expertise to work together. We will build off these successes and work to keep Lorain County safe.”
In prior cases the United States Attorney’s Office has prosecuted multiple Lorain County residents who ran afoul of gun and drug laws in cooperation with local law enforcement. These previous cases include:
Jeremy Mack, 38, of Elyria, was sentenced to life in prison after a jury convicted him of human trafficking, drug crimes and obstruction of justice.
Siarres Noble, 29, of Elyria was sentenced to 20 years in prison for distributing heroin and fentanyl, including fentanyl that caused the death of an Elyria resident last year.
John H. Allen, 49, of Lorain, was sentenced to more than 17 years in prison after being convicted of possession with the intent to distribute PCP and being a felon in possession of a firearm.
Anthony Paul Montoy, 40, and Fred Alston, 60, both of Elyria, were convicted of conspiracy to distribute kilograms of cocaine in the Lorain County area. Montoy was sentenced to 11 years in federal prison and Alston was sentenced to 8 years in federal prison.
Jerry Wells, 34, of Elyria, recently pleaded guilty to possession with the intent to distribute heroin, MDMA, marijuana and being a felon in possession of a firearm and ammunition. Wells was previously convicted of felony offenses which prohibited him from possessing a firearm and ammunition. He is awaiting sentencing.
Quentin Jackson, 24, of Elyria was recently convicted of felon in possession of a firearm. His sentencing is pending.
If convicted, each defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial, in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Lexington and Versailles Men Charged with Illegal Distribution of Fentanyl Resulting in a DeathRead the Press Release
LEXINGTON, Ky. — A Lexington man and a Versailles man have both been charged with unlawfully distributing a controlled substance resulting in an overdose death.
On November 5, 2015, a superseding federal indictment was returned against Luis Aguirre-Jerardo, of Lexington, and Gill Dewayne Garrett, of Versailles, charging both men with illegally distributing fentanyl resulting in a death. Garrett was named in the original indictment, returned on September 3, 2015.
Fentanyl is an extremely dangerous opioid, having a potency 30-50 times greater than heroin. According to the indictment, on or about July 1, 2015, Aguirre-Jerardo and Garrett unlawfully distributed fentanyl to a Woodford County woman who died as a result of using the drug they supplied. The indictment also alleges that, from approximately June 2015 until October 2015, Aguirre-Jerardo, Garrett, and two others, Allen P. White and Helaina Gracelyn Naehring, conspired to illegally distribute fentanyl, heroin, cocaine, and crack cocaine in Woodford County.
Fentanyl is the most potent opioid used in medical treatment and is occasionally diverted from legitimate sources for illicit use. However, most fentanyl sold on the street is manufactured for illicit use by drug cartels. Frequently, the drug user believes they are using heroin or narcotic pain pills because illicit fentanyl is often made to closely resemble those substances.
The Centers for Disease Control and Prevention recently warned of the increased presence of fentanyl on our streets and the resulting heightened risk of overdose fatalities. The DEA’s Office of Diversion Control reports a dramatic increase in the number of seizures of illicit fentanyl in recent years, indicating the rising availability of the drug on our streets. The reports indicate that 80% of fentanyl seizures in 2014 were concentrated in ten states. Kentucky was one of those “top ten” states.
This indictment is the result of an initiative launched by the Office of the United States Attorney for the Eastern District of Kentucky and the DEA. The initiative seeks to establish enhanced partnerships with participating state and local law enforcement gencies and county coroners, in order to aggressively investigate and prosecute illegal drug trafficking that results in an overdose. Under federal law, defendants guilty of illegal drug trafficking resulting in death or serious injury are subject to a mandatory minimum sentence of 20 years in federal prison. If the defendant has a prior felony conviction for a drug offense, the mandatory sentence is life imprisonment. The Versailles Police Department, a local partner in this initiative, investigated the case in conjunction with the DEA, leading to the charges against both the Lexington and Versailles defendants.
“Cases such as this one are precisely why we launched our initiative to partner with state and local law enforcement agencies in order to bring to justice the drug dealers who are causing so much damage in our region,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “The growing heroin problem, coupled with the introduction of substantial quantities of fentanyl to Lexington, Versailles, and other communities in Central Kentucky, marks a deadly turn in the drug threat confronting our region. Traffickers in heroin and fentanyl callously profit from the misery of others. With increasing frequency, the results are deadly. There is no stronger tool in our arsenal than the federal prosecution of drug traffickers whose criminal conduct results in an overdose. Effective use of that tool requires close cooperation between federal, state and local authorities. Our colleagues in the Versailles Police Department answered our call to action, and we are deeply appreciative. Because of their superb police work, these two defendants, who we allege to be purveyors of substantial quantities of deadly drugs, have been removed from the streets of Lexington and Versailles,” Harvey said.
U.S. Attorney Harvey; Joseph Reagan, Special Agent in Charge, DEA; and John Wilhoit, Chief of the Versailles Police Department, jointly announced the indictment.
Assistant U.S. Attorney Todd Bradbury is prosecuting the case on behalf of the federal government.
Aguirre-Jerardo and Garrett face a minimum of 20 years in federal prison and a maximum of life imprisonment. Any sentence following a conviction, however, would be imposed after the Court considers the U.S. Sentencing Guidelines and the applicable law.
An indictment is an allegation only. All defendants are presumed innocent and are entitled to a fair trial, at which the government must prove their guilt beyond a reasonable doubt.
Leon Convicted of PerjuryRead the Press Release
ALBANY, NEW YORK – Today, a federal jury trial culminated in the conviction of Edward A. Leon, 43, of St. Johnsville, New York, of two counts of making false declarations before a federal grand jury, announced United States Attorney Richard S. Hartunian and Delano A. Reid, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) New York Field Division.
Leon faces an aggregate maximum sentence of imprisonment of 10 years (5 years for each count of conviction), a $500,000 fine, and a term of supervised release of up to five years when he is sentenced on March 8, 2016 by United States District Judge Gary L. Sharpe.
The jury voted to convict on November 12, following a three-day trial. The perjury convictions are for two false declarations that Leon made in testimony before a grand jury conducting an investigation into the fire on May 2, 2013 at 438 Hulett Street in Schenectady, New York, which caused the deaths of David Terry and three young children, seriously injured another child, and destroyed the building and the personal property inside.
Leon falsely testified regarding his travel on May 2, 2013, claiming that he had driven straight from the Cumberland Farms in Palatine Bridge to work in Amsterdam, New York, when he had actually driven first to Schenectady, was driving on Hamilton Street near its intersection with Hulett Street, and was in the area of 438 Hulett Street at the time of the fire. Leon also falsely testified in denying that he had used a particular telephone to send text messages to David Terry, some of which were threatening, from April 25 to 29, 2013.
“The defendant’s perjury was a flagrant affront to the integrity of our system of justice and the fact-finding process,” stated U.S. Attorney Richard S. Hartunian. “He intentionally impeded the investigation into an arson murder, with very significant consequences. Neither the defendant’s crime nor the passage of time have dimmed our resolve to secure justice for the victims and their families. We are grateful for the outstanding work and dedication of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Schenectady Police Department, and of the Schenectady Fire Department.”
This case was investigated by the ATF, the Schenectady Police Department, and the Schenectady Fire Department. The case is being prosecuted by First Assistant U. S. Attorney Grant C. Jaquith and Assistant United States Attorney Wayne A. Myers.
Further questions or inquiries may be directed to First Assistant U.S. Attorney Jaquith at 518-431-0247.
The ATF is offering a reward of up to $12,000 for information leading to the arrest and conviction of the person(s) responsible for the arson that occurred on May 2, 2013 at 438 Hulett Street in Schenectady, resulting in personal injury and death. All information will be treated confidentially and the callers will remain anonymous if requested. Anyone having information should call the ATF Albany Field Office at 518-431-4182, or email [email protected].
Last Members of Harvery Hustlers Federal Indictment Plead Guilty to Drug Dealing and Murder ChargesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOEQUELL LEWIS, age 28, ANDRE ADDISON, age 24, and TERRENCE KELLEY, age 29, all of the Waggaman/Avondale areas, pled guilty this week to conspiring to distribute heroin and/or crack cocaine. KELLEY also pleaded guilty to murdering a man to further his group’s drug trafficking activities and admitted to his role in two other shootings where the victims lived. The three men were the last defendants in a twelve-defendant federal indictment charging drug and gun conspiracies, multiple shootings, and four murders against an off-shoot of the Harvey Hustlers gang.
LEWIS and KELLEY pled guilty to count one of the Superseding Indictment, which charges twelve defendants with trafficking more than a kilogram of heroin and 280 grams or more of crack cocaine. The charge carries a mandatory minimum sentence of at least ten years up to life in prison. KELLEY also pled guilty to Count 12, charging him and three others with causing the death of a man through the use of firearms, which is punishable to any term of years up to life in prison. ADDISON pled guilty to a one-count superseding Bill of Information charging him with conspiring to distribute 28 grams or more of crack cocaine. U.S. District Judge Lance M. Africk set sentencing for all three defendants on February 18, 2016.
According to court documents, LEWIS, ADDISON, and KELLEY were part of a drug trafficking organization that moved significant quantities of heroin and cocaine base on the West Bank. Beginning in 2012, the group engage in a series of violent acts, beginning with a drive by shooting into a another vehicle where the driver and his front seat passenger were shot with an AK-47 while two young children, who were not hit, were in the back seat. The group is alleged to have participated in four additional shootings, two of which ended in death. KELLEY pleaded guilty to the murder of Emeal Washington and admitted to his participation in two other shootings. Other defendants had previously pled guilty and admitted their roles in the murder of Doreatha Richardson. In addition to the shootings and drug conspiracy, members of the group are charged with a weapon conspiracy, in addition to several substantive distribution counts.
HARRY SMOOT, ISAAC SMITH, RICHARD THOMAS, TERRELL WADE, LANCE SINGLETON, FRANKIE HOOKFIN, CLIFFORD SONNIER, and CHRISTOPHER BROWN have previously pled guilty and are awaiting sentencing. KELLEY, LEWIS, and ADDISON were scheduled for trial on November 16, 2015, and were the last defendants to pled guilty. Their pleas resolve the pending federal indictment, but several additional members of the Harvey Hustlers are still being prosecuted in Jefferson Parish.
The Superseding Indictment is a product of an ongoing investigation into the violent acts in furtherance of the drug trafficking by the Harvey Hustler gang and its various offshoots on the West Bank. It represents the continued coordinated effort of the federal and state law enforcement authorities within the Multi-Agency Gang Unit (“MAG”), including the United States Attorney’s Office, the Jefferson Parish District Attorney’s Office, Special Agents of the Federal Bureau of Investigation, and officers of the Jefferson Parish Sheriff’s Office.
Assistant United States Attorneys Greg Kennedy, David Haller, and Myles Ranier and Special Assistant United States Attorney Collin Sims, who is a former Assistant United States Attorney and the Criminal Chief at the St. Tammany Parish District Attorney’s Office, are in charge of the prosecution.
Kent County Tax Return Preparer, Andres Orrego-Hernandez, Pleads Guilty to Conspiracy to Defraud the Government and Aiding in the Filing of A False Tax ReturnRead the Press Release
GRAND RAPIDS, MICHIGAN – Grand Rapids resident Andres Orrego-Hernandez, age 30, pled guilty to conspiracy to defraud the government and aiding in the filing of a false tax return, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Jarod J. Koopman, IRS– Criminal Investigation.
According to the plea agreement filed with the court, Orrego-Hernandez admitted his role in the conspiracy that ran between January 2010 and May 2011 and in aiding and assisting in the preparation of false and fraudulent federal income tax returns. The returns filed inflated income and/or the number of dependents to qualify for the earned income credit and/or inflated or claimed entirely false deductions or credits to qualify for larger refunds, such as credits for qualified education expenses. Orrego-Hernandez directed the portion of the client refunds attributable to his criminal activity to bank accounts he controlled. Orrego-Hernandez’s actions defrauded the United States of well in excess of $67,682.
Orrego-Hernandez pled guilty before U.S. Magistrate Judge Phil Green but will be sentenced by U.S. District Judge Paul L. Maloney in approximately three months. Judge Maloney will determine the total amount of the loss to the government as a result of Orrego-Hernandez’s criminal activity. He faces up to five years in prison on the conspiracy conviction and up to three years in prison on the conviction for aiding and abetting the filing of a false tax return.
"We cannot allow special credits, such as qualified education expenses, to be abused by people like Orrego-Hernandez. Each of us must be vigilant when using a return preparer," said Special Agent in Charge Jarod J. Koopman. "Taxpayers should review their return for accuracy before it is filed."
This case was investigated by Special Agents of IRS-Criminal Investigation and Assistant U.S. Attorney B. Rene Shekmer prosecuted the case.
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Justice Department Announces Two Banks Reach Resolutions Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Banque Internationale à Luxembourg (Suisse) SA (BIL Switzerland) and Zuger Kantonalbank (ZGKB) have reached resolutions under the department’s Swiss Bank Program. These banks will collectively pay penalties totaling more than $13 million and continue to cooperate with the department.
“The agreements reached today reflect the department’s continued commitment to reaching resolutions with those Swiss banks that satisfy the requirements of the Program, including detailed disclosures of their illegal conduct in connection with U.S.-related accounts,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Taxpayers are on notice that attempting to hide their foreign accounts in insurance wrappers and other such vehicles in order to evade their U.S. tax obligations is criminal conduct, and we are vigorously pursuing these cases.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
BIL Switzerland is a Swiss private bank with offices in Zurich and Geneva. BIL Switzerland is wholly owned by Banque Internationale à Luxembourg, a Luxembourg bank founded in 1856. In 1996, BIL Switzerland’s ultimate parent underwent a merger to form the Dexia Group, headquartered in Belgium. In connection with this merger, BIL Switzerland was renamed Dexia Privatbank (Schweiz) AG. In 2011, the Dexia Group dissolved, and BIL Switzerland came under new ownership, at which time it reverted to the BIL Switzerland name. BIL Switzerland provided private banking and asset management services principally through private bankers based in Zurich, Geneva and Lugano, Switzerland.
BIL Switzerland opened, maintained, serviced and profited from accounts that were held or beneficially owned by U.S. taxpayer clients. BIL Switzerland opened several accounts for U.S. taxpayers who were leaving other Swiss banks that were being investigated by the department, including UBS and Credit Suisse.
BIL Switzerland offered a variety of traditional Swiss banking services – including hold mail and numbered accounts – that assisted and enabled certain of its U.S. taxpayer clients to conceal their assets and income, file false federal tax returns with the Internal Revenue Service (IRS) and evade their U.S. tax obligations. BIL Switzerland also provided Swiss travel cash cards to U.S. clients, enabling them to access and spend funds from undeclared accounts in the United States.
In the period since Aug. 1, 2008, BIL Switzerland maintained at least 145 accounts, comprising an aggregate value of more than $64 million, that were owned by insurance companies and which held assets relating to insurance products that were issued to U.S. taxpayer clients of the respective insurance companies. Such accounts, known commonly as insurance-wrappers, were titled in the names of insurance companies, but were funded with assets that were transferred to the accounts for the beneficial owners of the insurance products (the policy holders). The assets in these accounts, while titled in the names of insurance companies, were managed by external asset managers for the ultimate benefit of the policy holders, through powers of investment that were given by the insurance companies to the external asset managers.
The assets of some insurance-wrapper accounts originated from undeclared accounts at BIL Switzerland. These undeclared accounts were closed, and their assets were transferred to newly-opened accounts at BIL Switzerland in the name of an insurance company and managed by various external asset managers. At account opening, the new accounts held the same assets that the U.S. taxpayer clients had previously held directly at BIL Switzerland. One of the undeclared accounts did not hold U.S. securities, but the recipient insurance-wrapper account acquired U.S. securities at a later date.
In addition to the 145 insurance-wrapped accounts, BIL Switzerland also acted as a custodian to more than 30 U.S.-related accounts, comprising an aggregate value of approximately $83 million, that were maintained by external asset managers for U.S. taxpayers.
BIL Switzerland closed U.S.-related accounts in ways that concealed the U.S. beneficial owners of those accounts. Upon request of the accountholders, BIL Switzerland removed the names of its U.S. taxpayer clients from joint accounts, leaving only non-U.S. persons as accountholders, or moved their assets into new BIL Switzerland accounts that were held in the names of non-U.S. persons, including non-U.S. relatives. BIL Switzerland thereafter treated the recipient accounts as non-U.S.-related accounts, despite some relationship managers continuing to take and execute instructions given directly from the U.S. taxpayers formerly associated with the accounts, or the U.S. taxpayer clients retaining effective beneficial ownership over the transferred funds.
BIL Switzerland maintained three accounts, beneficially owned by two different U.S. taxpayers, that held U.S. securities in the names of three offshore entities. The U.S. taxpayer’s interest in each of these accounts was not reported to the IRS even though BIL Switzerland knew or had reason to know that such offshore entity accounts were operated without strict adherence to corporate formalities. Two of the offshore entities were organized in the British Virgin Islands, and the third was organized in the United Arab Emirates. In effect, these offshore entities were used by the U.S. taxpayer beneficial owners as sham, conduit or nominee entities. BIL Switzerland relationship managers associated with these accounts, while outside the United States:
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Met with or took instructions from the U.S. taxpayer beneficial owners of these offshore entity accounts, instead of the directors or other authorized parties of the account;
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Acted on instructions from an external asset manager, who received them directly from a U.S. taxpayer, without first knowing whether corporate formalities were observed;
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Followed instructions that allowed a U.S. taxpayer to withdraw cash directly from the account, despite such withdrawals being contrary to the corporate purposes of the entity that owned the account; and
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Executed transactions that allowed a U.S. taxpayer to make several significant wire transfers to unaffiliated Swiss banks for the U.S. taxpayer’s personal use or benefit, without first knowing or inquiring whether corporate formalities were satisfied.
BIL Switzerland accepted certifications from the directors of these entities that falsely declared that the entity was the beneficial owner of the assets deposited in the accounts.
From 2001 through February 2010, BIL Switzerland had a wholly-owned subsidiary, Experta AG, a Swiss company. Experta AG provided a number of services, including accounting services, legal and tax advice, as well as the creation and management of entities such as offshore corporations, trusts and foundations. During the time that Expert AG was affiliated with BIL Switzerland, Experta AG provided services that assisted and enabled certain U.S. taxpayers in the concealment of their assets and income and in the evasion of their U.S. tax obligations.
BIL Switzerland has fully cooperated with the department in relation to the Swiss Bank Program. Among other things, BIL Switzerland required its relationship managers to submit declarations setting forth their knowledge concerning the U.S. taxpayer status of each account that they managed. BIL Switzerland also reviewed leaver lists from other banks to identify additional U.S.-related accounts.
Since Aug. 1, 2008, BIL Switzerland maintained 267 U.S.-related accounts having a maximum aggregate dollar value in excess of $182 million. BIL Switzerland will pay a penalty of $9.71 million.
ZGKB was founded in 1892 and is headquartered in Zug, Switzerland. Organized under the laws of the canton of Zug, all of ZGKB’s 14 branches are located within the canton. The canton owns 51 percent of ZGKB and guarantees its deposits.
From at least 2001 to 2012, ZGKB opened and maintained accounts for certain of its U.S. clients while aware of the risk that such clients were not declaring income earned in these accounts or the existence of such accounts. In doing so, ZGKB ignored red flags of wrongful intent on the part of U.S. clients who sought to open such accounts. ZGKB offered a variety of traditional Swiss banking services – including hold mail and numbered accounts – that it knew could assist, and did assist, U.S. taxpayers in concealing their identity from the IRS by minimizing the paper trail associated with their undeclared assets and income. ZGKB also accepted funds from a small number of UBS accountholders who had likely been forced to close their UBS accounts because of a U.S. tax-fraud investigation of UBS.
ZGKB assisted its U.S. clients in sending money to themselves, relatives, business partners, or other businesses in the United States by issuing checks drawn on a ZGKB account at a bank in New York. In one case, the accountholder requested and received checks in excess of $90,000 on several occasions. ZGKB cashed out the balances of U.S. residents’ accounts in substantial amounts. In one instance, at the request of the U.S. client, ZGKB permitted the client to withdraw the entire account balance of approximately $665,000 in cash. For several U.S. accountholders, ZGKB transferred funds from their accounts in multiple withdrawals – for example, 12 in one month – of amounts just under $10,000. In at least one case, ZGKB was instructed to do so in order to evade a report to the IRS.
Since Aug. 1, 2008, ZGKB maintained and serviced 434 U.S.-related accounts having a maximum aggregate dollar value of $220 million. ZGKB will pay a penalty of $3.798 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s resolutions with Banque Internationale á Luxembourg (Suisse) SA and Zuger Kantonalbank under the Swiss Bank Program send a clear message,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division. “U.S. taxpayers cannot evade their taxes by setting up undisclosed offshore accounts. In partnership with the Department of Justice, we will continue our successful efforts to track these taxpayers and their hidden accounts down.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Ciraolo also thanked Paul G. Galindo and Brian D. Bailey, who served as counsel on these matters, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jamestown Man Sentenced on Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today Ismael Burgos, 53, Jamestown, NY, who was convicted of attempted possession with intent to distribute cocaine, was sentenced to 30 months in prison by U.S. District Judge Elizabeth A. Wolford.Assistant U.S. Attorney Caleb J. Petzoldt, who handled the case, stated that on January 27, 2015, the defendant attempted to receive a package from Puerto Rico via U.S. Mail. The package was deemed to be suspicious and investigators determined that it contained a quantity of cocaine. The cocaine was secreted inside a child’s booster safety seat.
The sentencing is the culmination of an investigation on the part of the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector in Charge, Boston Division, and the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office.
Iowa Summit Discusses Heroin CrisisRead the Press Release
CEDAR RAPIDS - Over the last two decades, a perfect storm has led to skyrocketing rates of opiate painkiller addiction and subsequent drug overdoses. Patients have increasingly abused addictive opioid pain-killers, and then transitioned to heroin, which may be cheaper and more accessible but often times more deadly.
The United States Attorney’s Offices for the Northern and Southern Districts of Iowa and the University of Iowa’s College of Public Health Injury Prevention Research Center (IPRC) hosted its first-ever summit today to discuss interagency collaboration on this critical public health issue. Around 200 professionals from the fields of law enforcement, medicine, treatment, and public health attended the summit at the University’s College of Public Health.
Nationally, drug overdoses caused 44,000 deaths in 2013, and over two million people misused prescription drugs. Iowa is not immune and has experienced alarming trends. From 2000 to 2013, the number of Iowans dying from prescription medication overdoses increased by 20 times. During that same timeframe, heroin overdose deaths increased from one to 20 per year.
A solution to this epidemic requires a coordinated effort by prevention specialists, treatment professionals, law enforcement and the entire medical community.
United States Attorney for Northern District of Iowa Kevin W. Techau offered his assessment of the importance of the summit, stating, “Heroin and opioid abuse takes a huge toll with Iowans every day. This summit is an excellent opportunity for the professionals who deliver treatment and prevention programs to come together with law enforcement to build partnerships that can effectively work together to impact these issues.”
Award winning journalist, Sam Quinones, was the keynote speaker at the summit. His new book, “Dreamland: The True Tale of America’s Opiate Epidemic,” chronicles the rapid rise of prescription painkiller and heroin use in small town America. Federal and local authorities all over the county report the biggest drug epidemic today does not come from methamphetamines or cocaine, but heroin. Quinones stated, “It should not be viewed as just an inner-city problem because huge profits are being made in suburbs across this country, and Iowa is not immune to this threat.”
Potential solutions to the national epidemic were highlighted at the summit, which included Prescription Drug Monitoring Programs (PDMPs). This program educates prescribers and tracks overuse of prescriptions through state-run electronic databases. Another solution is the use of Naloxone, a drug that counteracts opiate overdoses. Some state PDMPs require prescribers to report the dispensing of controlled prescription drugs to patients, and this information could be shared more broadly.
Additional education, greater access to treatment, enhanced prescription drug take-back programs, and oversight of pain clinics can also be part of the solution to this complex problem.
Dr. Corinne Peek-Asa, Director of the University of Iowa Injury Prevention Research Center said, “Interagency collaboration by law enforcement, the courts, healthcare, substance abuse treatment, public health, and education, among others, is essential to stem this growing tide of heroin and opioid abuse.”
Learn more about today’s heroin epidemic by visiting the Centers for Disease Control and Prevention at: http://www.cdc.gov/vitalsigns/heroin.
Follow us on Twitter @USAO_NDIA.
Interagency group taking data-driven approach to combat health care fraudRead the Press Release
FAIRMONT, WEST VIRGINIA – State and federal law enforcement leaders joined United States Attorney William J. Ihlenfeld, II today to announce the formation of a working group that is taking a data-driven approach to the prevention of health care fraud in West Virginia.
According to Ihlenfeld, the multi-jurisdictional group is proactively evaluating the health care reimbursement data of medical providers in northern West Virginia. By using advanced statistical analysis, investigators are able to identify potentially fraudulent billing patterns and uncover waste and abuse more efficiently.
“Health care fraud continues to be a significant problem in West Virginia and throughout the country and it costs taxpayers tens of billions of dollars every year,” said Ihlenfeld. “Ultimately, health care fraud increases the cost of medical care for everyone and undermines our existing health care programs. The fraud detection tools that we’re using allow us to identify sophisticated schemes that may have escaped scrutiny in the past.”
Agencies involved in the effort include the United States Department of Health and Human Services (HHS), the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), the Internal Revenue Service Criminal Investigations (IRS-CI), the West Virginia Medicaid Fraud Control Unit, the Ohio Medicaid Fraud Control Unit, the West Virginia Office of the Insurance Commission, and the Ohio Bureau of Workers’ Compensation.
The northern West Virginia working group is led by Assistant U.S. Attorney Sarah Montoro.
On Thursday, Ihlenfeld also announced that the United States has settled allegations that a Fairmont physician fraudulently requested reimbursement for medical services that were not actually rendered. Dr. Samer Kuzbari has paid $440,232 to resolve accusations that he submitted false claims to various health care benefit programs, including Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefit Program.
The settlement addressed claims against Kuzbari and the Kuzbari Clinic arising under the False Claims Act, a law which allows the government to sue health care providers who submit false claims to federal health care benefit programs. The settlement resolves potential civil and administrative monetary claims, but does not preclude criminal charges.
“Medicare, TRICARE, and other programs depend upon doctors to honestly report the work that they do,” said Ihlenfeld. “When a doctor claims reimbursement for a treatment that he didn’t provide then it’s the taxpayers who are cheated. We will continue to work with our law enforcement partners to protect the integrity of all federal health care programs.”
Assistant U.S. Attorney Alan G. McGonigal represented the government in the Kuzbari matter. The U.S. Department of Health and Human Services Office of Inspector General, the U.S. Officer of Personnel Management Office of Inspector General, and the West Virginia Insurance Commission investigated.
Hudson County, New Jersey, Man Admits Leading Armed Robbery Spree of Banks and Restaurants in Bergen and Hudson CountiesRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted his role in an armed robbery spree of banks and commercial establishments in Bergen and Hudson counties in July 2013, U.S. Attorney Paul J. Fishman announced.
Gary Bohanan, 46, of North Bergen, New Jersey, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies, two counts of armed bank robbery, and two counts of armed Hobbs Act robbery.
According to documents filed in this case and statements made in court:
On July 10, 2013, Bohanan and Ramon Lopez, 25, of Union City, who were both wearing masks, entered a McDonald’s restaurant in North Bergen. Bohanan brandished a handgun and demanded money from the employees of McDonald’s. Bohanan and Lopez then took $1,600 in cash from the cash registers and fled in a car driven by Josephine Chenet, 45, formerly of North Bergen.
On July 18, 2013, Bohanan, Angel Feliu, 22, of North Bergen, Lopez, and Chenet watched Le Chateau restaurant in West New York, New Jersey, for the purpose of robbing it. Bohanan and the other individuals waited for a restaurant employee to close the restaurant, followed her home, and then robbed her at gunpoint of $6,000 in cash, representing the proceeds from the restaurant.
On July 22, 2013, Bohanan, Feliu and Chenet robbed the Sovereign Bank (now Santander Bank) in Secaucus, New Jersey. Both men wore latex gloves and masks. Once inside the Sovereign Bank, Bohanan brandished a black handgun, jumped over the counter and proceeded to empty two drawers of money into a black bag, while pointing the handgun at bank tellers. As Bohanan emptied the drawers, Feliu stood guard. Bohanan and Feliu then fled the bank and shared the proceeds of the robbery with Lopez and Chenet.
On July 26, 2013, Bohanan, Feliu and Chenet robbed the TD Bank, located in Fairview, New Jersey. Bohanan and Feliu entered the bank at 9:48 a.m. Bohanan and Feliu both wore latex gloves and masks. Feliu, however, was captured by the bank’s video surveillance system before he put the mask on his face. During the robbery, Feliu brandished a knife at employees and customers, and Bohanan brandished what appeared to be a black handgun, but what was later identified as an air pistol. Bohanan then jumped over the counter and emptied two drawers of money into a black bag, while pointing the air pistol at bank tellers. As Bohanan emptied the drawers, Feliu stood guard and held bystanders back by brandishing the knife. After the robbery, Bohanan and Feliu fled on foot; however, they were followed by concerned citizens and victims of the bank robbery. Bohanan then came upon a van, pointed the air pistol at the driver, and ordered the driver out of the van. Bohanan then attempted to flee the area by driving away in the van, but he crashed it into a nearby structure. Bohanan was found hiding under a truck and arrested in possession of a black bag containing an air pistol and money covered with red dye.
The two counts of armed bank robbery to which Bohanan pleaded guilty each carry a maximum penalty of 25 years in prison and a fine of $250,000. The two counts of Hobbs Act robbery each carry a maximum penalty of 20 years in prison. The count of conspiracy carries a maximum penalty of five years in prison. Sentencing is scheduled for Feb. 24, 2016.
Feliu previously pleaded guilty to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies and two counts of armed bank robbery. Lopez previously pleaded guilty in a separate proceeding to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies and two counts of Hobbs Act robberies. Bohanan, Feliu, and Lopez are detained pending sentencing. Charges that had been pending against Chenet for her role in the robberies were dismissed following her death on June 22, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s guilty plea. He also thanked the Fairview, North Bergen and Secaucus police departments for their contributions to the case.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Carl J. Herman Esq., West Orange, New Jersey
Houma Postal Worker Indicted for Theft of MailRead the Press Release
U.S. Attorney Polite announced that ELVIRA DUTHU DUPLANTIS, age 50, of Houma, was indicted today for Theft of Mail.
According to the Indictment, as a result of a complaint from the Postmaster of the Houma Post Office regarding missing mail, the United States Postal Service, Office of Inspector General initiated an investigation into DUPLANTIS, who was a letter carrier assigned to the Houma Post Office. The investigation determined that DUPLANTIS stole approximately 113 gift cards, which included Visa debit cards and gift cards for major retail stores and restaurants, with a total value of over $3,200.
If convicted, DUPLANTIS faces a maximum penalty of five years imprisonment, followed by up to three years of supervised release, and a $250,000 fine.
Max Eamiguel, Special Agent in Charge, Office of Inspector General, U.S. Postal Service, Southern Area Field Office, stated, “Postal employees take great pride in their work for the American public. This type of criminal behavior is unacceptable and does not reflect the careful efforts of the thousands of professional, dedicated employees in our workforce. We will continue to vigorously pursue those individuals who violate the public’s trust.”
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the U.S. Postal Service, Office of Inspector General. Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba is in charge of the prosecution.