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7 January 2016
Bullhead Woman Sentenced for Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Bullhead, South Dakota, woman convicted of Child Abuse was sentenced on January 4, 2016, by U.S. District Judge Charles B. Kornmann.
Velnita Jolette Hairy Chin, age 43, was sentenced to 37 months in custody, followed by 3 years of supervised release, and a special assessment of $100 to the Federal Crime Victims Fund.
Hairy Chin was indicted by a federal grand jury on July 14, 2015. She pled guilty on November 2, 2015. Hairy Chin has had twelve previous convictions for Child Abuse/Neglect.
The conviction stems from an incident on June 23, 2015, when Bureau of Indian Affairs (BIA) law enforcement responded to a house call in Bullhead. Law enforcement was informed of a female passed out in the residence and multiple young children outside without supervision. Upon arrival, an officer made contact with a young female child in the home. The officer asked her if her mom was home, to which she responded no, but that grandma was home and was “drunk.”
The officer came into the home in an attempt to find a responsible adult. In searching for an adult in the home, the officer noticed a baby in a car seat in the living room and multiple other young children. In a basement room, the officer discovered an adult male and female passed out in a bed. The officer woke the female up and identified her as Hairy Chin who asked law enforcement “What’s going on?” The officer asked her who was watching the kids to which she responded “I am.” When the officer inquired how long the baby had been in the car seat, he had to repeat himself as Hairy Chin did not appear to be able to comprehend the question. Despite being asked repeatedly about the baby in the car seat, Hairy Chin was not able to answer the question. Hairy Chin informed the officer that the children were hers. At this point, Hairy Chin was placed under arrest for child neglect and was escorted to the patrol unit.
The officer then went back into the house to check on the kids. A neighbor came over and helped him change some of the kids’ diapers. The neighbor also made a bottle for the youngest child. The officer became concerned when he noticed the baby kept screaming when they would try to touch him. The officer went out to his patrol unit and asked Hairy Chin if something was wrong with the baby, to which she replied that the baby was “fine, fat, and okay.” One of the little girls told the officer that the baby had fallen, after being dropped. The officer called for an ambulance to come and check the baby out. The officer again asked Hairy Chin what happened to the baby. Initially Hairy Chin denied that anything was wrong with him, but later admitted that he was dropped the previous day but claimed he was now fine.
When the EMTs arrived on scene, they too noticed that the baby cried whenever he was picked up and carried. Again, the officer went to his unit and asked Hairy Chin if anything was wrong with the baby, Hairy Chin again informed the officer that the baby was fine. The EMTs took the child to the hospital in Mobridge.
Child Protection Services (CPS) arrived and the officer and a neighbor relayed the events that had occurred earlier in the day. The neighbor came over earlier in the day to find all seven children in the home without supervision. The oldest of the children, approximately 11 years of age, informed the CPS worker that he was in charge and could take care of all of the children. Safe homes were found for all of the children. The CPS worker then travelled to Mobridge to check on the baby who had the following injuries: abrasions on his legs from sitting in the car seat for so long, bruising on his right leg and buttock, diaper rash, air in his stomach from constant crying, and a right ear infection.
This case was investigated by the BIA, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Hairy Chin was immediately turned over to the custody of the U.S. Marshals Service.
Buffalo Man Indicted 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 that a federal grand jury has returned and indictment charging Rashawn Crule, 40, of Buffalo, NY, with possession with intent to distribute, and distribution of heroin, possession with intent to distribute crack cocaine, possession with intent to distribute cocaine, maintaining a drug involved premises, possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. The charges carry a minimum penalty of five years in prison, a maximum of life and a $1,000,000 fine.Assistant U.S. Attorney Meghan Tokash, who is handling the case, stated that according to the indictment, between October 2, 2015 and November 2, 2015, the defendant possessed with intent to distribute and distributed various illegal narcotics including heroin, crack cocaine and cocaine. The indictment further states that Crule maintained a premises at 98 Gillette Avenue in Buffalo for the purpose of manufacturing, distributing and using these illegal narcotics. The defendant also allegedly possessed a 9mm handgun. Following a 2002 conviction in Erie County Court, Crule is prohibited from possessing a firearm.
Crule made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and was released on bail.
The indictment is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major David Krause and Lieutenant Kevin Reyes, CNET West Commander, and the U.S. Customs and Border Protection, Air and Marine Unit, under the direction of Brian Manaher, Director, Marine Operations.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Boston Man Arrested for Multiple RobberiesRead the Press Release
BOSTON – A Boston man was arrested today and charged with robbing three financial institutions: the East Cambridge Saving Bank and Naveo Credit Union in Cambridge and Rockland Trust in Allston.
Kim N. Daley, 46, was charged by criminal complaint with three counts of bank robbery. U.S. District Court Magistrate Judge Donald L. Cabell scheduled a detention and probable cause hearing for Jan. 14, 2016.
According to court documents, on June 1, 2015, an individual later identified as Daley, entered the East Cambridge Savings Bank in Cambridge and gave the teller a note demanding money. The teller handed Daley money from her drawer and he fled the bank. Surveillance video recorded the robbery and Daley’s image was circulated on the Massachusetts Crime Network. A state parole officer recognized Daley as the robber and notified the Cambridge Police Department.
On Aug. 7, 2015, an individual, later identified as Daley, entered the Rockland Trust in Allston. Once again, Daley gave the teller a note demanding money. The teller handed Daley money from her drawer and he fled the bank. Following the robbery, Daley was identified by bank employees from a photo array.
On Aug.14, 2015, an individual, later identified as Daley, entered the Naveo Credit Union in Cambridge. Daley gave the teller a note demanding money and stated, “hurry up, I have a gun.” The teller handed Daley money from her drawer and he then fled the bank. Surveillance cameras recorded the robbery which law enforcement reviewed and identified Daley.
On Aug. 21, 2015, Daley was arrested in New York City and transported to Massachusetts to face charges.
The charging statue provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of up to $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Boston Police Commissioner William Evans; Cambridge Police Commissioner Robert C. Haas; and John Gibbon, U.S. Marshal for the District of Massachusetts, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Beckley physician pleads guilty to Federal drug crime and health care fraudRead the Press Release
BECKLEY, W.Va. - Acting United States Attorney Carol Casto announced today that Jose Jorge Abbud Gordinho, M.D., of Beckley, pleaded guilty in federal court to illegally prescribing the pain medication hydrocodone. Dr. Gordinho also pleaded guilty to defrauding Medicare and Medicaid by submitting materially false claims for medical services that were not medically necessary.
Dr. Gordinho admitted that he routinely prescribed pain pills for illegitimate purposes and in a manner that was outside the bounds of medical practice. Dr. Gordinho further admitted that he defrauded Medicare and Medicaid when he sought and received payment for office visits, services, and prescriptons related to his illegal prescribing practices.
United States District Judge Irene C. Berger set Dr. Gordinho’s sentencing for April 26, 2016, in Beckley. Dr. Gordinho faces up to 10 years in federal prison, a $1,250,000 fine, and restitution to Medicare and Medicaid. Additionally, as part of the plea agreement, he will permanently surrender his DEA Certificate of Registration, ensuring that he will no longer be permitted to prescribe controlled substances.
This case was investigated by the West Virginia State Police, the Federal Bureau of Investigation, and the Office of Inspector General, U.S. Department of Health and Human Services.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
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Beckley man sentenced on Federal drug chargeRead the Press Release
BECKLEY, W.Va. – Acting United States Attorney Carol Casto announced that a Beckley man was sentenced today in federal court to a year and three months in prison for a drug crime.
Michael Leigh Benko, 33, previously pleaded guilty in July of 2015 to using a telephone to facilitate a drug deal. Benko admitted that on January 13, 2015, he used a cell phone to coordinate the sale of oxycodone to a confidential informant working with law enforcement authorities.
The case was investigated by the Beckley/Raleigh County Drug and Violent Crime Unit. The defendant was sentenced by United States District Judge Irene C. Berger.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
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Beckley felon sentenced to over eight years on Federal gun chargeRead the Press Release
BECKLEY, W.Va. – Acting United States Attorney Carol Casto announced that a Beckley felon was sentenced today in federal court to eight years and four months in prison for being a felon in possession of a firearm. Kevin Terrell, 30, previously pleaded guilty in July of 2015 to the federal gun charge.
On January 13, 2015, Terrell admitted that he was in possession of an assault rifle. Law enforcement seized the ArmaLite Model M-15 5.56 mm rifle at Terrell’s residence on Granville Avenue in Beckley. Terrell was prohibited from possessing any firearm under federal law because of his 2007 felony convictions in Raleigh County Circuit Court for unlawful wounding and felony destruction of property.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The defendant was sentenced by United States District Judge Irene C. Berger.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs that target gun crime.
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Baton Rouge Man Convicted of Extorting Minors, Producing Child Pornography, and Receiving Child PornographyRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced the conviction of Matthew Chaney Walker, 25, of Baton Rouge, Louisiana, for extorting numerous children over the internet for the purpose of producing and receiving child pornography.
This morning, before Chief U.S. District Court Judge Brian A. Jackson, Walker pleaded guilty to four counts of extortion, in violation of Title 18, United States Code, Section 875(d); three counts of production of child pornography, in violation of Title 18, United States Code, Sections 2251(a) and 2; and three counts of receipt of child pornography, in violation of Title 18, United States Code, Section 2252A(a)(2); and he also agreed to forfeiture. Walker is scheduled to be sentenced on May 5, 2016.
In connection with his guilty plea, Walker admitted that, in 2014, he met young girls online for the purpose of sexually exploiting them. In order to lure his victims, Walker pretended to be a teenage girl and used different online screen names. During chats with his victims, Walker broached the topic of trading nude and sexually explicit images. To lower his victims’ inhibitions, Walker initiated sexually explicit conversations and sent sexually suggestive photographs of other young girls that he represented to be of himself. Once he obtained compromising pictures of his victims, Walker then demanded that the victims send him images even more graphic than those they had already sent to him. Walker threatened to send compromising pictures of the victims to their families, schools, friends, and the public should they refuse to comply with his demands. As a result of his conduct, Walkers’ victims created and sent child pornography to him.
U.S. Attorney Green stated: “The defendant used social media to target and sexually exploit young girls. This type of criminal conduct is an evolving and pernicious threat to our children. The devastating impact of this type of criminal conduct on our children, their families, and the community cannot be ignored. With an internet connection or smart phone, children of all ages are vulnerable to online predators, such as this defendant.”
This case is being handled jointly by the U.S. Department of Homeland Security, Homeland Security Investigations, and the United States Secret Service, with assistance from the Cyber Crime Unit and the Criminal Division of the Louisiana Attorney General’s Office; the Peterborough Police Service, a member of the Ontario Provincial Strategy to Protect Children from Sexual Abuse and Exploitation on the Internet; the Cheatham County, Tennessee Sheriff’s Office; the Naperville, Illinois Police Department; and the Ottawa County, Michigan Sheriff’s Office, among others.
This matter is being prosecuted by Assistant U.S. Attorney Cam T. Le, who serves as the Project Safe Childhood Coordinator for the Middle District of Louisiana.
The investigation of this matter is ongoing. Law enforcement is attempting to confirm the identity of additional victims. Anyone who believes that they might have been a victim of Walker’s offenses is encouraged to contact the Baton Rouge Office of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), at 225-757-7770, extension 106, or the local HSI field office.
These federal charges are part of Project Safe Childhood, a nationwide initiative by the U.S. 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “Resources” tab for information about Internet safety education.
Armed Career Criminal is Sentenced to PrisonRead the Press Release
Robert M. Hertz, age 52, of Cedar Rapids, Iowa, was sentenced in United States District Court in Cedar Rapids today, after pleaded guilty to one count of possessing a firearm and ammunition as a felon.
In an Indictment filed on June 11, 2015, Hertz was charged with possessing a .40 caliber rifle and 237 rounds of ammunition in May 2015, after he had previously been convicted of three felonies, namely, Arson, Second Degree Burglary, and Manufacturing Methamphetamine. Hertz pled guilty to that charge on July 22, 2015.
Today, Chief United States District Court Judge Linda R. Reade sentenced Hertz to serve 188 months in federal prison, to be followed by a five-year term of supervised release.
Evidence presented at the sentencing hearing showed that Hertz attempted to obstruct justice by trying to influence a witness to conceal information from the FBI about Hertz’s use and possession of guns. Other evidence presented showed Hertz possessed three guns and numerous ammunition magazines. Hertz was also shown to have made a number of concerning posts on his Facebook accounts including describing how he had: made a promise to kill another person for a friend, and remained committed to that promise, if called upon; offered to kill a woman and “bury her deep;” and on another occasion “burned the house down” around his unfaithful wife and brother-in-law. Hertz referred to himself on Facebook as a “professional convict” stating, “I used to say there’s one thing I do well and that’s time . . . I do it real good . . . and I am known for it out there.”
In sentencing Hertz, Judge Reade noted that Hertz’s Facebook messages reflect his “criminal thinking” and were very concerning, and although he had no recent criminal convictions, his “head is still not on straight.”
The case was prosecuted by Assistant United States Attorney Richard L. Murphy and was investigated by Homeland Security Investigations; Alcohol, Tobacco and Firearms; and the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-00053.
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Alabama Courts Not Free to Disobey U.S. Supreme Court on Marriage Equality: U.S. Attorneys Joyce White Vance & Kenyen BrownRead the Press Release
“The Chief Justice of the Alabama Supreme Court has issued an administrative order, directing probate judges that they may not issue marriage licenses to same-sex couples, despite the U.S. Supreme Court's decision last year on marriage equality. We have grave concerns about this order, which directs Alabama probate judges to disobey the ruling of the Supreme Court,” said U.S. Attorneys Joyce White Vance of the Northern District of Alabama and Kenyen Brown of the Southern District of Alabama. “Government officials are free to disagree with the law, but not to disobey it. This issue has been decided by the highest court in the land and Alabama must follow that law.”
Acoma Pueblo Man Sentenced for Assaulting His Intimate PartnerRead the Press Release
ALBUQUERQUE – Randy P. Shutiva, 54, a member of the Acoma Pueblo who resides in San Fidel, N.M., was sentenced this afternoon in federal court in Albuquerque, N.M., to eight months in federal prison followed by one year of supervised release for his assault conviction.
Shutiva was arrested on Dec. 19, 2014, on a criminal complaint charging him with assaulting his intimate partner, an Acoma Pueblo woman, by punching her in the face and head and kicking her body. The criminal complaint alleged that Shutiva committed the assault on Dec. 6, 2014, in Acoma Pueblo within Cibola County, N.M. The victim lost the hearing in one ear and sustained other injuries as a result of the assault.
On Aug. 25, 2015, Shutiva pled guilty to a misdemeanor information charging him with assault by striking, beating or wounding, and admitted assaulting the victim.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Pueblo of Acoma Tribal Police Department. Assistant U.S. Attorneys Raquel Ruiz-Velez and Elaine Ramirez prosecuted this case.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
6 January 2016
Wichita Falls Man Sentenced to Statutory Maximum of 20 Years in Federal Prison for Role in Methamphetamine Distribution ConspiracyRead the Press Release
WICHITA FALLS, Texas — Joshua Antonio Ramirez, a Wichita Falls, Texas, man who admitted his role in a methamphetamine distribution conspiracy, was sentenced Monday to the statutory maximum sentence of 20 years in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Ramirez, 30, pleaded guilty in September 2015 to one count of conspiracy to possess with intent to distribute methamphetamine. His co-defendant, Doty Lee Standridge, 31, also of Wichita Falls, pleaded guilty to the same offense and was sentenced in October 2015 to 110 months in federal prison.
According to documents filed in the case, between February and August 2013, Ramirez supplied quantities of methamphetamine – ranging from1/4 ounce to one pound – to numerous individuals in the Wichita Falls area, including Standridge. Ramirez received and distributed the methamphetamine in the Wichita Falls area and elsewhere.
The case was investigated by the Texas Department of Public Safety. Assistant U.S. Attorney Mary Walters prosecuted.
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Wichita Falls Man Sentenced to 189 Months in Federal Prison on Methamphetamine ConvictionsRead the Press Release
WICHITA FALLS, Texas — A Wichita Falls man, Matthew Taylor Lawrence, 25, has been sentenced by U.S. District Judge Reed C. O’Connor to 189 months in federal prison, following his guilty plea in August 2015 to one count of possession with intent to distribute methamphetamine, announced U.S. Attorney John Parker of the Northern District of Texas.
According to plea documents filed in the case, on May 9, 2015, at approximately 7:30 p.m., officers with the Wichita Falls Police Department, in a marked patrol car, attempted to stop Lawrence, who was driving a motorcycle and exceeding the speed limit. Lawrence pulled into a driveway, left the motorcycle and fled on foot. As he was running away, officers saw him drop a firearm in the front yard of a nearby residence. Officers caught up with Lawrence and took him into custody. He had a small backpack that contained approximately 212 grams of methamphetamine contained in four plastic bags. Officers also later recovered the Glock 9mm caliber pistol that Lawrence had dropped.
The Wichita Falls County District Attorney’s Office, the Wichita Falls Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Mary Walters prosecuted.
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West Point Cadet Sentenced to More Than Eight Years in Prison for Distributing, Receiving, and Possessing Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that RICKY PATRICK HESTER was sentenced to 97 months’ in prison by United States District Judge Vincent L. Briccetti for receipt, distribution, and possession of child pornography. The sentencing today followed HESTER’s conviction on June 23, 2015, following a jury trial before Judge Briccetti.
U.S. Attorney Preet Bharara said: “Ricky Patrick Hester collected, shared, and distributed appalling depictions of children being sexually abused. This case reinforces the need for law enforcement to remain vigilant in its efforts to protect children from those who prey on them.”
According to the Indictment and the evidence at trial:
From at least as early as November 2012, HESTER used a Yahoo! email account, a file-sharing account on Dropbox.com, as well as his personal cellphone, to collect and share images of children being forced into sexual activity.
On December 18, 2013, HESTER was interviewed by agents with Homeland Security Investigations (“HSI”) and he admitted that he had used his Yahoo! email account to send child pornography, that his preference was for boys as young as four years old, that he had used Dropbox to trade child pornography with others, and that he stored child pornography on his cellphone.
HESTER’s cellphone, which was seized by HSI on December 18, 2013, during a search warrant of HESTER’s dorm room at West Point, contained approximately 1,200 images and videos of children engaging in sexual activity.
Evidence at trial included approximately 100 emails sent or received by HESTER. In many of these emails, HESTER requested videos and images of “kids being forced to do stuff,” “boys being tied up and peed on,” and “man boy hardcore.” In numerous emails, he indicated a preference for boys aged four to 10 years old.
HESTER entered the United States Military Academy at West Point as a cadet in August 2009. He took a sabbatical from West Point from August 2011 through August 2012. He returned to West Point in the fall of 2012. At the time of his arrest, on December 19, 2013, HESTER was one semester away from graduation.
HESTER, 25, lived in Granger, Indiana, from his arrest until his conviction. Judge Briccetti remanded him following his conviction. In sentencing HESTER, Judge Briccetti underscored that the “evidence of guilt was overwhelming,” and that the images that HESTER possessed and traded depicted “the torture of children.”
Mr. Bharara praised the outstanding investigative work of the Department of Homeland Security. He also thanked the Army Criminal Investigation Command for their assistance with the investigation.
This prosecution is being handled by the White Plains Division. Assistant United States Attorneys Lauren Schorr and Marcia S. Cohen are in charge of the prosecution.
Waterloo Man Convicted of Firearm and Drug ChargesRead the Press Release
A Waterloo man who possessed a firearm as a felon and possessed crack cocaine with the intent to distribute it was convicted by a jury today after a two-day trial in federal court in Cedar Rapids.
Marchello Rembert, 32, from Waterloo, Iowa, was convicted of being a felon in possession of a firearm and possessing crack cocaine with the intent to distribute. The verdict was returned this morning following about two hours of jury deliberations.
The evidence at trial showed that on June 4, 2015, Rembert was at the 200 block of Cottage Street on the East Side of Waterloo, when police placed him under arrest on an active state arrest warrant. During a pat-down search, police located 15 baggies of crack cocaine in Rembert’s front pocket. Further investigation that evening revealed a loaded 9mm Ruger pistol in Rembert’s girlfriend’s vehicle. During analysis of the firearm, police located Rembert’s left index fingerprint on the left side of the firearm near the trigger guard area. Rembert was a felon, having previously been convicted of felony drug crimes, as well as felony theft and fraud offenses.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Rembert remains in custody of the United States Marshal pending sentencing. Rembert faces a possible maximum sentence of 30 years’ imprisonment, a $1,250,000 fine, $200 in special assessments, and at least three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated by the Waterloo Police Department, which was assisted by the Federal Bureau of Investigation, Federal Task Force, Black Hawk County Sheriff’s Office, Cedar Falls Police Department, Bureau of Alcohol Tabaco and Firearms, Drug Enforcement Administration, and Iowa Division of Narcotics Enforcement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-2038.
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United States Reaches Agreement with Former York County Chiropractor in Civil False Claims Act SuitRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that it has entered into a Consent Decree with former chiropractor Kurt Bauer, age 62, of York, PA, to resolve a suit the United States filed alleging that Bauer remained involved in the management of a Medicare provider’s business despite his exclusion by the U.S. Department of Health and Human Services, in violation of the False Claims Act.
United States Attorney Peter Smith announced today that the resolution was accepted by U.S. District Court Chief Judge Christopher C. Conner.
The civil Complaint filed by the United States alleged that Bauer was the former owner of Leader Heights Healthcare, a York County-based chiropractic and primary care provider that accepted Medicare patients. The U.S. Department of Health and Human Services (HHS) excluded Bauer from participating in federal health care programs in 2008, which had the practical effect of precluding his employment at Leader Heights in any capacity.
Despite the exclusion and after falsely informing Medicare that he had “[r]etired,” Bauer allegedly retained ownership of Leader Heights until 2009 and continued to be involved in the management and administration of Leader Heights until he learned of the government’s investigation in 2013. During this period of time, Leader Heights allegedly submitted thousands of claims to Medicare for reimbursement for several million dollars. The government contends that, because of Bauer’s involvement in the management and administration of Leader Heights during his exclusion, Bauer knowingly caused the submission of false claims to Medicare that improperly sought reimbursement for the services he provided.
The Consent Decree resolves the allegations in the Complaint, and requires Bauer to:
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Make payments over the next five years to the United States totaling approximately $30,000.
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Consent to a renewed exclusion from federal health care programs for the next 25 years.
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Make bi-annual certifications to the U.S. Attorney’s Office for the next 5 years, under penalty of perjury, certifying that he is complying with his renewed exclusion and the pertinent guidance from HHS.
This matter was investigated by the U.S. Department of Health and Human Services’ Office of Inspector General and the Health Care Fraud Unit of the U.S. Attorney’s Office. The matter was handled by Assistant U.S. Attorney Anthony Scicchitano for the U.S. Attorney’s Office.
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URS E & C Holdings, Inc. Agrees to Pay $9 Million to Resolve False Claims Act AllegationsRead the Press Release
URS E & C Holdings Inc., a successor in interest to the global design and construction company Washington Group International Inc. (WGI), has agreed to pay $9 million to settle allegations that WGI submitted false claims in connection with United States Agency for International Development (USAID) contracts, the Justice Department announced today.
“Contractors who misrepresent their eligibility for government contracts undermine the government procurement process,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Justice Department will take action to protect that process and to ensure that taxpayer funds are not misused.”
“Government contractors must be honest and forthright,” said U.S. Attorney Wendy J. Olson for the District of Idaho. “This settlement protects the integrity of the federal procurement process. Whether a situation involves procurement fraud, as in this case, or healthcare fraud or any other type of fraud and dishonesty, the U.S. Attorney’s Office for the District of Idaho seeks to hold those obtaining public funds accountable.”
The settlement concerns USAID-funded contracts for the construction of water and wastewater infrastructure projects in the Arab Republic of Egypt in the 1990s. The contracts were awarded to a joint venture partnership between WGI, Contrack International Inc. (Contrack) and Misr Sons Development S.A.E. (HAS), an Egyptian company. The United States filed suit under the False Claims Act and the Foreign Assistance Act, alleging that prior to the award of those contracts, the joint venture partners concealed from USAID that Contrack and HAS were partners in the venture, thus preventing USAID from evaluating their qualifications and eligibility, which was a precondition to contract award. As a result, WGI and its partners allegedly received USAID-funded contracts for which they were ineligible. The settlement resolves only WGI’s liability. The United States previously settled with Contrack and is continuing to pursue its claims against HAS.
This settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Idaho; and the USAID Office of Inspector General.
The case is United States v. Washington Group International Inc. f/k/a/ Morrison Knudsen, Corporation, Contrack International, Inc.; and Misr Sons Development S.A.E. a/k/a Hassan Allam Sons, No. 04-555 (D. Idaho). The claims resolved by this settlement are allegations only and there has been no determination of liability.
Two Men Facing Charges in Separate Bank Robbery CasesRead 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 Ronald Anthony McCarter, Jr., 24, of Lackawanna, NY, was arrested and charged by criminal complaint with bank robbery. The charge carries a maximum sentence of 20 years in prison, a fine of $250,000, or both. Additionally, a federal grand jury has returned an indictment in a separate case charging Laverne Palmer, a/k/a Poogaloo, 25, of Buffalo with bank robbery, entering a bank with intent to commit a larceny, and bank larceny. Those charges also carry a maximum sentence of 20 years in prison, a fine of $250,000, or both.Assistant U.S. Attorney Brendan T. Cullinane, who is handling the cases, stated that according to the criminal complaint against McCarter, on October 29, 2015, the Key Bank on Broadway Avenue in Lancaster, NY was robbed. An individual entered the bank, approached a teller and passed a note which demanded cash, no dye pack, and no sudden movements. Subsequent investigation identified McCarter as the individual based on bank surveillance photos.
Meanwhile, according to the indictment and a criminal complaint filed previously against Palmer, on October 26, 2015, the Key Bank on George Urban Boulevard in Depew was robbed in what is believed to be a series of connected bank robberies. The defendant entered the bank, approached a teller and passed a note which demanded cash, no dye pack, and no sudden movements. Palmer was identified by investigators in bank surveillance photos.
McCarter made an initial appearance and Palmer was arraigned before U.S. Magistrate Judge Michael J. Roemer. Both defendants are being held pending further proceedings.
The complaint and indictment are the culmination of investigations by the Federal Bureau of Investigation, under the direction on the part of Adam S. Cohen, the Lancaster Police Department, under the direction of Chief Gerald Gill, the Depew Police Department, under the direction of Chief Stan Carwile, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Three Tampa Residents Sentenced in Conspiracy to Import Synthetic Cannabinoids, a/k/a "Spice"Read the Press Release
After a two day hearing, three Tampa residents were sentenced for their participation in a conspiracy to import synthetic cannabinoids, a/k/a “Spice,” to the United States from China, by U.S. District Court Judge Donald M. Middlebrooks in West Palm Beach, Florida.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, A.D. Wright, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division, and Delany E. De Leon-Colon, Acting Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, made the announcement.
Saiful Hossain, 28, was sentenced to 120 months incarceration, to be followed by 3 years of supervised release. Hossain was also ordered to forfeit assets totaling over $1.5 million and real property in St. Petersburg, Florida.
Ahmed Yehia Khalifa, 28, was sentenced to 96 months incarceration, to be followed by 3 years of supervised release and Ahmed Maher Elhelw, 25, was sentenced to 36 months incarceration, to be followed by 3 years supervised release. Khalifa and Elhelw were also ordered to forfeit assets totaling $472,780.00.
The defendants previously pled guilty to conspiracy to import a Schedule 1 controlled substance (XLR-11) and conspiracy to manufacture, possess with intent to manufacture and distribute a Schedule 1 controlled substance (XLR-11).
According to court records, U.S. Customs and Border Protection (CBP) Officers in New York identified, searched and detained twelve U.S. Postal Service (USPS) parcels, destined for Indian River and Palm Beach Counties, in the Southern District of Florida. Each of the parcels was shipped from China and contained three kilogram packages of a controlled substance, XLR-11 a chemical used in the manufacture of smokable synthetic cannabinoids (SSC). The parcels were mailed to separate private mailboxes, with defined street addresses, located at mailbox service centers in Indian River and Palm Beach Counties.
The court records further indicate that SSC products, commonly known as “Spice,” are a mixture of an organic “carrier” medium, such as the herb-like substance damiana leaf and/or marshmallow leaf, which is then typically sprayed or mixed with a synthetic cannabinoid chemical compound which mimics the pharmacological effect of the a Schedule I controlled substance, THC. This organic “carrier” is then commonly sprayed with a tobacco flavoring such as strawberry, blueberry, or pineapple, in order to mask the harsh chemical taste upon ingestion. Currently, there are hundreds of synthetic cannabinoid compounds.
Mr. Ferrer commended the investigative efforts of ICE-HSI, DEA, USPIS, U.S. Customs and Border Protection, the Hillsborough County Sheriff’s Office, the Tampa Police Department, and the Indian River County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorneys Carmen Lineberger and Antonia Barnes.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Three Sentenced for Promoting Interstate ProstitutionRead the Press Release
Acting United States Attorney Gregory J. Haanstad announced that Charles Nash (28) and Brandon Smith (40) of Appleton, WI and Elizabeth Johnson (27) of Two Rivers, WI were recently sentenced by Chief Judge William C. Griesbach. Smith was sentenced on December 10, 2015, to 48 months imprisonment following his guilty plea to three counts of using a telephone to promote, manage and carry on a prostitution business in violation of Title 18, United State Code, Section 1952. Smith was ordered to serve three years of federal supervised release following his prison term. Nash was sentenced on November 25, 2015, to 46 months prison following his guilty plea to two counts of using a telephone to promote, manage and carry on a prostitution business. Nash will also serve a three year term of federal supervised release after the service of his prison term. Johnson was sentenced on November 23, 2015, to “time served” meaning a six month sentence but credited for that same amount of time that she was held in jail both before and following her guilty plea to the charge of using a telephone to promote, manage and carry on a prostitution business. Johnson is currently serving a three year term of federal supervised release.
According to court documents, in February 2015, Nash and Smith arranged for Johnson and Jane Doe to travel from the Fox Valley area to Iowa and then Nebraska for purposes of engaging in prostitution. Johnson had previously worked as a prostitute and instructed Jane Doe, prior to the travel, in how to commit such offenses without being detected by law enforcement. Johnson and Jane Doe were arrested in Nebraska on February 26, 2015, pursuant to an undercover prostitution sting operation. Prior to their arrest, Nash was in continual contact with Johnson for purposes of persuading and inducing her to commit acts of prostitution in order to raise money so he could hire an attorney for his pending drug charge. Smith was in regular contact with Jane Doe for purposes of persuading and inducing her to commit acts of prostitution. Jane Doe later stated that any money made would have been given to Smith, her pimp. Jane Doe also confirmed that Johnson instructed her on how to conduct acts of prostitution. The investigation confirmed that Johnson performed acts of prostitution at Nash’s direction for many months and also attempted to persuade others to work as prostitutes for Nash. Further, the investigation revealed several other prostitutes that worked under the direction of both Nash and Smith.
In pronouncing sentence, Judge Griesbach noted the aggravated nature of the case including the negative impact such conduct has on the community. In particular, Judge Griesbach referenced the psychological and often physical trauma sustained by young women through the course of being prostituted by individuals such as Nash and Smith.
The case was investigated by the Wisconsin Department of Justice-Division of Criminal Investigation, Appleton Police Department, Oshkosh Police Department, Outagamie County Sheriff Department, the Lincoln (Nebraska) Police Department, and the Omaha Police Department/FBI Child Exploitation Task Force. The Outagamie County District Attorney’s Office, in particular, Assistant District Attorney Andrew Maier, provided invaluable assistance by initiating and leading the initial investigation of the case. The federal case was prosecuted by Assistant U.S. Attorney William Roach.
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Three Investment Professionals Arrested and Charged in Manhattan Federal Court in Connection with Sophisticated Scheme to Defraud InvestorsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the arrests of CHRISTOPHER CERVINO, a/k/a “Smitty,” LARRY WERBEL, and SHEIK F. KHAN, a/k/a “Abida Khan,” for their involvement in a scheme, between 2009 and March 2015, to defraud at least 100 investors of more than $15 million. CERVINO, WERBEL and KHAN, along with EDWARD DURANTE, a/k/a “Ted Wise,” a/k/a “Efran Eisenberg,” a/k/a “Yulia Svitchkara,” a/k/a “Anthony Walsh,” a/k/a “Ed Simmons,” who arrived by extradition from Germany on December 18, 2015, were charged in a Superseding Indictment unsealed today with various crimes related to a fraudulent scheme principally involving a publicly traded company called VGTel, Inc. (“VGTL”), which was secretly controlled by DURANTE. DURANTE, who was previously convicted in December 2001 of securities fraud, wire fraud, and money laundering in this District and barred by the U.S. Securities and Exchange Commission (“SEC”) from any association with the sale of securities, in concert with CERVINO, WERBEL, and KHAN, executed the scheme through false and misleading representations about how private investor monies would be used, as well as omissions in connection with the sale of VGTL securities, and through the manipulation of the public market in VGTL’s stock.
In addition, Mr. Bharara announced the unsealing of guilty pleas earlier this week by WALTER REISSMAN and KENNETH WISE, who admitted to their own involvement in the fraudulent scheme. REISSMAN pled guilty to conspiracy, securities fraud, wire fraud, and making false statements to law enforcement officials. WISE pled guilty to conspiracy, securities fraud, wire fraud, and money laundering. REISSMAN and WISE are cooperating with the Government in this investigation.
CERVINO, who is charged with conspiracy, securities fraud, wire fraud, and perjury, was arrested this morning in Franklin Lakes, New Jersey, and was presented this afternoon in federal court in Manhattan before United States Magistrate Judge Andrew J. Peck. WERBEL, who is charged with conspiracy, securities fraud, wire fraud, investment adviser fraud, and making false statements, was arrested this morning in Solon, Ohio, and was presented today in federal court in the Northern District of Ohio. KHAN, who is charged with conspiracy, securities fraud, wire fraud, and investment adviser fraud, was arrested last night in Las Vegas, Nevada, and will be presented later today in federal court in the District of Nevada. The case is before United States District Judge Andrew L. Carter, Jr.
In a separate action, the SEC filed civil charges against CERVINO, WERBEL, KHAN, REISSMAN, and WISE. The SEC previously charged DURANTE on December 18, 2015.
U.S. Attorney Preet Bharara said: “No sooner had Edward Durante gotten out of jail for securities fraud than he allegedly headed up another criminal scheme. As alleged, Durante and his network of scammers spun a web of lies, inducing victims into investing in phony private placement opportunities, manipulating the price and trading volume of a publicly traded stock, and conspiring to defraud more than one hundred investors out of over $15 million.”
FBI Assistant Director Diego Rodriguez said: “Over six years, Cervino, Werbel, and Khan allegedly conspired with recidivist securities fraud defendant Edward Durante to defraud more than 100 investors out of millions in a scheme of misleading representations and stock manipulation. The FBI is committed to investigating and bringing to justice those who prey upon trusting individuals for their own personal gain.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “These individuals took advantage of their manipulation of the market to con investors into purchasing stock at inflated prices. Postal Inspectors remind investors to thoroughly review all investment opportunities, especially whenever great returns are offered, to avoid becoming a victim of a scam.”
According to the allegations in the Superseding Indictment unsealed today in Manhattan federal court,[1] and statements made in court proceedings:
From in or about 2009 up through and including in or about March 2015, DURANTE, CERVINO, WERBEL, KHAN, REISSMAN, and WISE (the “Defendants”) perpetrated a multi-pronged scheme to defraud more than 100 investors of at least $15 million by soliciting funds in public and private shares of various securities, including VGTL, through false and misleading representations and omissions and by failing to invest investors’ funds as promised. The Defendants further manipulated the public Over-The-Counter market of VGTL stock by controlling a majority of the public shares, inducing investors to buy stock based on false representations and omissions, and engaging in trades in which the Defendants controlled both the accounts that purchased the stock and the accounts that sold the stock in order to artificially inflate the stock price and trading volume. Moreover, DURANTE, with the knowledge of WERBEL, REISSMAN and WISE, among others, used numerous aliases in order to conceal his true identity and regulatory bar from investors, compliance personnel, regulators and law enforcement. Of the approximately $15 million invested in the fraudulent scheme, more than $9 million was funneled to the Defendants and other co-conspirators.
2001 Securities Fraud Conviction
In December 2001, DURANTE was convicted in federal court of conspiracy to commit securities fraud, wire fraud, and money laundering, as well as making false statements in connection with a market manipulation scheme in which the defendant also used the alias “Ed Simmons.” The defendant was sentenced to 121 months in prison and was released in or about 2009, the year he began the current scheme. In connection with that scheme, DURANTE was ordered by a United States District Court to pay disgorgement and prejudgment interest totaling over $39 million. DURANTE was also barred from certain activities in connection with the securities industry, including the sale of securities.
Private Placement Securities Fraud Involving VGTL
Among other fraudulent and illicit conduct, between 2009 and in or about March 2015, DURANTE, CERVINO, WERBEL, KHAN, REISSMAN, and WISE and others fraudulently induced victims to invest in private shares of VGTL by, among other things, concealing from investors that DURANTE controlled the entities selling the shares; that DURANTE was prohibited from any association with the sale of securities; and that DURANTE was previously convicted of crimes related to a similar scheme to defraud. Furthermore, some of the Defendants lied to investors by (a) representing that their investments would be used to fund the operations and growth of VGTL in connection with potential reverse mergers, when in reality no reverse merger was ever consummated and the investments were instead used primarily to personally benefit the Defendants; and (b) representing that the investors would receive an eight-percent dividend on their investments until their private shares could be sold at a promised premium on the public market, when, in reality, no interest payments were ever provided to the investors and many investors never received VGTL stock certificates or were not permitted to sell the stock.
In order to fund his illegal scheme, DURANTE used a network of brokers, including WERBEL and KHAN, investment advisers in Cleveland, Ohio, and Los Angeles, California, respectively, to induce investors to buy shares of VGTL. Although WERBEL knew DURANTE’s true identity and that he had been previously convicted of securities fraud, WERBEL did not disclose this information to any of his clients he solicited to invest in VGTL. Moreover, DURANTE provided WERBEL with kickbacks of as much as 20 percent of monies invested by his clients, which WERBEL did not disclose to his clients. WERBEL also failed to disclose to his clients that the investors were purchasing shares of VGTL from entities controlled by DURANTE, not from the issuer itself. Similarly, KHAN also received kickbacks in return for inducing her clients to invest in private shares of VGTL, which she did not disclose to her clients. KHAN also did not disclose to her investors that their private shares of VGTL were purchased from DURANTE-controlled entities. In total, WERBEL received more than $300,000 and KHAN received more than $100,000 in undisclosed kickbacks from DURANTE for inducing clients to invest in private shares of VGTL.
Manipulation of the Market for Shares of VGTL
The Defendants further engaged in a scheme to control and manipulate the public stock of VGTL in order to artificially inflate the stock price and trading volume so as to profit from their own sales of VGTL stock and to further induce investments in private shares of VGTL. To that end, through entities he controlled, DURANTE held a majority of the publicly-traded stock of VGTL. DURANTE recruited CERVINO, a broker, to open brokerage accounts associated with DURANTE-controlled entities and investors who were clients of WERBEL’s and KHAN’s, many of whom did not know they had accounts with CERVINO. WERBEL and KHAN, along with DURANTE, induced their clients to purchase VGTL stock through CERVINO – sometimes without the clients’ knowledge or permission – while DURANTE and CERVINO ensured that many of these purchases were matched with sales of VGTL stock by DURANTE-controlled accounts. The result of these transactions was that the Defendants were effectively taking both sides of a single transaction in VGTL stock in order to artificially control VGTL’s stock price. The Defendants’ efforts to artificially inflate the market for VGTL increased the stock price from approximately $.25 per share in April 2012 to as much as $1.90, and dramatically inflated the trading volume, which increased the Defendants’ abilities to raise private investments in VGTL. To compensate CERVINO for his efforts to control and manipulate the market in VGTL, DURANTE made at least two cash payments to CERVINO totaling $35,000. Moreover, DURANTE personally siphoned more than $4 million in profits, which he concealed through the use of wire transfers among multiple accounts in the names of other individuals, including WISE.
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DURANTE, 63, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit money laundering, one count of money laundering and one count of perjury. Counts One and Seven each carry a maximum sentence of five years in prison. Counts Two through Six each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
CERVINO, 43, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of perjury. Counts One and Five each carry a maximum sentence of five years in prison. Counts Two through Four each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
WERBEL, 67, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, one count of investment adviser fraud, and one count of making false statements to federal officers. Counts One and Six each carry a maximum sentence of five years in prison. Counts Two through Five each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
KHAN, 52, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of investment adviser fraud. Count One carries a maximum sentence of five years in prison. Counts Two through Five each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
On January 4, 2016, WISE, 75, pled guilty before Judge Peck to one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit money laundering, and one count of money laundering. Count One carries a maximum sentence of five years in prison. Counts Two through Six each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
On January 5, 2016, REISSMAN, 58, pled guilty before Judge Carter to one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of making false statements to federal officers. Counts One and Five each carry a maximum sentence of five years in prison. Counts Two through Four each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the work of the FBI and the Postal Inspection Service, and thanked the Securities and Exchange Commission for its assistance.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Edward Y. Kim, Daniel S. Goldman, and Andrea M. Griswold are in charge of the prosecution.
The allegations contained in the Superseding Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the description of the Superseding Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Thoreau Man Sentenced to Prison for Federal Assault ConvictionRead the Press Release
ALBUQUERQUE – Anthony J. Hamilton, 30, an enrolled member of the Navajo Nation who resides in Thoreau, N.M., was sentenced this morning in federal court in Albuquerque, N.M., to 41 months in federal prison for his assault conviction. Hamilton will be on supervised release for three years following his term of incarceration.
Hamilton was arrested on June 11, 2015, on a criminal complaint charging him with assault with a dangerous weapon and assault resulting in serious bodily injury in Indian Country. Court documents indicate that the investigation of this matter began on May 18, 2015, when law enforcement officers were notified that Hamilton had assaulted his girlfriend, a Navajo woman, and two Navajo men in McKinley County, N.M.
On Sept. 29, 2015, Hamilton pled guilty to a felony information charging him with two counts of assault resulting in serious bodily injury. In entering the guilty plea, Hamilton admitted that on May 18, 2015, he repeatedly struck two individuals on the face, head and body with his fists and elbows. As a result of Hamilton’s criminal acts, one of the victims suffered an acute depressed fracture and a concussion and the other victim suffered an acute bilateral fracture to the bones within his orbital and sinus structures.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and the Gallup office of the FBI and was prosecuted by Assistant U.S. Attorney Niki Tapia-Brito.
This case was brought as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Texas man charged with illegally transporting three minors into the United StatesRead the Press Release
An information was filed charging Arely Gonzalez-Corea, 37, of Katy, Texas, with transporting illegal aliens with the United States, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Corea was stopped in Sandusky County last month and found to have three juveniles who were in the United States illegally, two from Guatemala and one from Nicaragua, according to the information.
If convicted, the defendant’s sentence will be determined by the court after reviewing 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.
The investigating agency in this case is the Bureau of Customs & Border Protection, Sandusky, Ohio. The case is being handled by Assistant United States Attorney Tracey B. Tangeman.
An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Texas Man Guilty of Federal Child Sex OffenseRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Shilo Watts age 40 of New Braunfels, Texas appeared today in The United States District Court in Fayetteville before The Honorable Timothy L. Brooks and pleaded guilty to the charge of Interstate Transportation of a Minor with the intent to engage in criminal sexual activity in violation of 18 U.S.C. § 2423(a).
According to court records, on or about October of 2012, Special Agents with the Homeland Security Office in San Antonio, Texas, began investigating the sexual abuse of a minor Marshallese male living in Northwest Arkansas by Shilo Watts. Based on this investigation, Homeland Security Agents were able to determine that Watts had lived in the Marshall Islands for several years, and had helped bring several young Marshallese males to the United States. A subsequent interview of one of the minors revealed that WATTS began sexually abusing him at a young age and continued when the minor was living in Springdale, Arkansas. Specifically, the minor stated that between 2008 and 2012, Watts would take him and other young men from Arkansas to a residence in Texas. On at least one occasion, Watts sexually abused the minor while there.
The charge carries a mandatory minimum sentence of 10 years imprisonment and a maximum sentence of life imprisonment. Sentencing will be held on a later date.
This case was investigated by Homeland Security Investigation and the Springdale Police Department. Assistant United States Attorney Dustin Roberts is prosecuting the case for the United States.
The 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 their Criminal Division Child Exploitation and Obscenity Sections (CEOS), 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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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Statement of United States Attorney Charles M. Oberly, III, Regarding Indictment of Wilmington Trust CorporationRead the Press Release
WILMINGTON, Del. – Today, a federal grand jury returned a Second Superseding Indictment adding the Wilmington Trust Corporation as a defendant to the indictment already pending against four former senior bank executives, David Gibson, Robert V.A. Harra, William North, and Kevyn Rakowski, for their respective roles in concealing from the Federal Reserve, the Securities and Exchange Commission (SEC) and the investing public the total quantity of past due loans on Wilmington Trust’s books from October 2009 through November 2010. The Nineteen-Count Second Superseding Indictment (15-23-RGA) charges defendants with making false statements in securities filings and to agencies of the United States government.
Wilmington Trust was required to report in its quarterly filings with both the SEC and the Federal Reserve the quantity of its loans for which payment was past due for 90 days or more. Investors and banking regulators consider the amount of past due loans at a bank as an important metric in evaluating the health of a bank’s loan portfolio. According to the Second Superseding Indictment, Wilmington Trust, through the actions of the charged senior executives, concealed the truth about the health of its loan portfolio from the SEC, the investing public and from Wilmington Trust’s regulators. During the course of the alleged conspiracy, in February 2010, Wilmington Trust raised approximately $273.9 million through a public stock offering.
In November 2010, Wilmington Trust announced an agreement to be acquired by M&T Bank Corporation, at a price of $3.84 per share, a discount of approximately 46% from the bank’s share price the prior trading day, and approximately $9.41 per share less than at the time of Wilmington Trust’s capital raise in February 2010. This decline in price, between February and November 2010, represented a loss of $204 million in total market value of the shares bought during the capital raise. The acquisition was completed on May 16, 2011, and Wilmington Trust Corporation became a wholly owned subsidiary of M&T Bank, which assumed both its assets and liabilities. The criminal conduct set forth in the Second Superseding Indictment predated M&T Bank’s acquisition of Wilmington Trust and related solely to Wilmington Trust’s commercial banking operations.
I did not make the decision lightly to seek charges against the Wilmington Trust Corporation. Ultimately, I have determined that bringing the Second Superseding Indictment is necessary to achieve justice and attempt to make whole those members of our community who suffered significant financial harm as a result of the alleged criminal conduct perpetrated by Wilmington Trust Corporation and its multiple senior bank officers. Wilmington Trust Corporation had an obligation, to its shareholders and to the public, to accurately report the important financial metrics which enable investors to make informed decisions. Difficult financial times may present significant business challenges, but they do not excuse anyone or any entity from complying with the law. Wilmington Trust received $330 million in TARP funds and is the first TARP recipient institution to be indicted.
I am grateful to the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program, the Internal Revenue Service’s Criminal Investigative Division, the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau for their diligent and thorough investigation of these matters, as well as to the staff of the United States Attorney’s Office for their hard work and commitment to achieving justice.
Finally, I remind everyone that, as always, the charges contained in an indictment are merely accusations, and a corporate defendant, like an individual, is presumed innocent unless and until proven guilty.
Shooter of Off-Duty MPD Officer Pleads to Felony Firearm PossessionRead the Press Release
Memphis, TN – A man responsible for fatally shooting an off-duty Memphis Police officer has pled guilty to felony possession of a firearm. The defendant’s wife has also pled guilty to disposing of a firearm to a felon. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty pleas today.
According to the indictment, Lorenzo Clark, 36, of Memphis, unlawfully possessed a Glock 9mm pistol on Sunday, October 11, 2015. The firearm was reportedly used by the defendant in the fatal shooting of 31-year-old Terence Olridge, an officer with the Memphis Police Department (MPD). Olridge was off duty at the time of the shooting.
According to the federal complaint, MPD officers responded to a shooting call at Lorenzo Clark’s Cordova residence. Officers later recovered the Glock 9mm alleged to be used in the shooting from the defendant. Lorenzo Clark admitted to possessing the Glock 9mm prior to and during the shooting with Olridge.
In October 2015, Lorenzo Clark was charged with felony firearm possession.
On Wednesday, January 6, 2016, Lorenzo Clark pled guilty to one count of felony firearm possession. He is scheduled to be sentenced by Judge Sheryl H. Lipman on April 15, 2016. He faces up to 10 years imprisonment and a fine of up to $250,000 when sentenced.
Lorenzo Clark’s wife, Natalie Clark, 37, of Memphis, was also charged in the October indictment for providing a firearm to Lorenzo Clark despite knowing he had been convicted of a felony.
On Wednesday, January 6, 2015, Natalie Clark pled guilty to one count of disposing of a firearm to a felon. She is scheduled to be sentenced by Judge Lipman on April 15, 2016. She faces up to 10 years imprisonment and a fine of up to $250,000 when sentenced.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), along with the MPD.
Assistant U.S. Attorney Marques Young is prosecuting this case on the government’s behalf.
Seven New York National Guard Soldiers Charged in Fraudulent Recruitment Bonus SchemeRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of EVETTE MERCED, DARRYL HARRISON, SIUL CELESTE, JEANETTE ARIZAGA, YESENIA ADAMES, RENETTA EDWARDS, and JEFFERSON SIMBANAMUZO, all current members of the New York Army National Guard, in connection with a scheme to obtain fraudulent recruiting bonuses. Defendant YESENIA ADAMES was arrested today and will be presented in the Eastern District of Virginia. The remaining defendants were arrested today and will be presented in Manhattan federal court before Magistrate Judge Andrew J. Peck.
Manhattan U.S. Attorney Preet Bharara said: “Those who join the National Guard nobly serve their fellow citizens. But as alleged, these defendants used their positions in the National Guard to steal. I would like to thank our partners at the FBI, Army CID, and NYPD for their work in uncovering this fraud.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Those charged today, in one form or another, took advantage of an Army National Guard incentive program established to encourage soldiers to recruit civilians into the service. While some of the defendants blatantly lied about signing up new recruits, others, already serving as recruiters, we're altogether ineligible for payment by the program. This scheme resulted in hundreds of thousands of dollars in losses to the government. While the majority of our respected military personnel remain committed to serving and protecting our great country, this select few served only to protect their own interests. As we are reminded today, there will be no reward for this type of behavior.”
Police Commissioner William J. Bratton said: “The NYPD has no tolerance for any member of the service who violates the law. We will hold them fully responsible for their actions.”
According to the allegations in the Complaint[1] unsealed today in Manhattan federal court:
In September 2005, the Army National Guard established a recruiting bonus program, referred to as the Guard Recruiting Assistance Program (“G-RAP”), and administered by a private company, Document and Packaging Broker, Inc. (“Docupak”). The G-RAP was designed to offer referral bonus payments to Army National Guard soldiers who were not otherwise involved in Army National Guard recruitment efforts for civilians whom the soldiers successfully convinced to serve in the Army National Guard. A participating soldier, also known as a Recruiting Assistant (“RA”), could receive up to $2,000 in bonus payments for referring another individual to join. To participate in the program, soldiers were required to establish an online account in their name to record their referral and recruitment efforts. The RA would input the personal identifying information of each recruit into the account. Based on certain milestones achieved by the referred soldier, a participating soldier could then receive payment through direct deposit into the participating soldier’s designated bank account. Soldiers who were themselves serving as paid recruiters for the Army National Guard as part of the National Guard’s standard recruitment program were not eligible to participate in the G-RAP or to receive a referral bonus payment, as the G-RAP was intended to be a supplement to the National Guard’s standard recruiting program.
Beginning in 2007, MERCED and HARRISON, who then served as full-time salaried recruiters for the Army National Guard, abused their positions as officers by providing the personal identifying information of potential soldiers to CELESTE, ARIZAGA, ADAMES, and EDWARDS, in exchange for thousands of dollars in kickbacks. CELESTE, ARIZAGA, ADAMES, and EDWARDS then used their respective online RA accounts to falsely claim that they were responsible for referring those soldiers to the New York Army National Guard. After making those false claims, CELESTE, ARIZAGA, ADAMES, and EDWARDS received referral bonus payments totaling over $62,000 from the G-RAP and kicked back a significant portion of those payments to MERCED and HARRISON.
In a similar but separate scheme, SIMBANAMUZO, a current NYPD police officer, used his online RA account to falsely claim that he was responsible for referring soldiers to the New York Army National Guard whose information he had obtained from various paid recruiters.
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MERCED, 45, of East Stroudsburg, Pennsylvania, currently a Staff Sergeant in the National Guard, is charged with one count of conspiracy to commit bribery, one count of solicitation and receipt of bribes, and one count of theft of government funds, which carry maximum sentences of five years, 10 years, and 10 years in prison, respectively. MERCED is also charged with one count of aggravated identity theft which carries a mandatory sentence of two years in prison.
HARRISON, 51, of East Stroudsburg, Pennsylvania, currently a Sergeant First Class in the National Guard, is charged with one count of conspiracy to commit bribery, one count of solicitation and receipt of bribes, and one count of theft of government funds, which carry maximum sentences of five years, 10 years, and 10 years in prison, respectively. HARRISON is also charged with one count of aggravated identity theft which carries a mandatory sentence of two years in prison.
The following defendants were each charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and one count of theft of government funds, which carries a maximum sentence of 10 years in prison:
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CELESTE, 29, Bronx, New York, currently a Staff Sergeant in the National Guard
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ARIZAGA, 41, Bronx, New York, currently a Staff Sergeant in the National Guard
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ADAMES, 43, Bronx, New York, currently a Sergeant in the National Guard
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EDWARDS, 40, Brooklyn, New York, currently a Sergeant in the National Guard
SIMBANAMUZO, 41, of the Bronx, New York, currently a NYPD police officer and a Sergeant in the National Guard, is charged with one count of theft of government funds, which carries a maximum sentence of 10 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by a judge.
Mr. Bharara praised the investigative work of the FBI, the Army CID, and the NYPD.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorney Robert L. Boone is in charge of the prosecution.
The charges contained in the Complaints are merely accusations and the defendants are presumed innocent unless and until proven guilty.
16-004
1 As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth below constitute only allegations, and every fact described should be treated as an allegation.
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Seattle Man Pleads Guilty in Idaho to Distributing 50 Kilograms or More of MarijuanaRead the Press Release
BOISE – Walter Terry, 56, of Seattle, Washington, pleaded guilty today to distributing 50 kilograms or more of marijuana, U.S. Attorney Wendy J. Olson announced. Terry waived his right to be indicted by a grand jury and agreed to be charged in federal court in the District of Idaho.
According to court documents, Terry began advertising marijuana for sale over the internet in 2011. Terry admitted to distributing approximately 146 kilograms of marijuana throughout the United States, including Idaho, Massachusetts, New Hampshire, New York, New Jersey, Rhode Island, Virginia, Tennessee, Georgia, Florida, Illinois, Wisconsin, and Texas. An undercover DEA Special Agent contacted Terry in January 2013, and Terry agreed to mail marijuana to the undercover agent. Between January 2013, and March 2014, Terry sent six shipments of marijuana to Idaho. In May 2014, Terry agreed to sell the undercover agent five pounds of marijuana. Terry met the undercover agent in Seattle and was arrested after providing the undercover agent with the five pounds of marijuana. Terry told DEA agents that he began his marijuana distribution operation in 2010 or 2011. Terry stated that after the State of Washington legalized medicinal marijuana, his business was negatively affected and he began advertising his marijuana distribution business on websites to out-of-state customers. Terry consented to a search of his residence in Seattle, and law enforcement seized approximately 15 pounds of marijuana and $30,000 in drug proceeds. Terry also admitted to a forfeiture allegation, in which he has agreed to forfeit at least $500,000 in cash proceeds and forfeit his personal residence in Seattle.
Distributing 50 kilograms or more of marijuana is punishable by up to 20 years in prison, at least three years of supervised release, and a maximum fine of $1,000,000.
Sentencing is set for April 26, 2016, before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Drug Enforcement Administration, the Seattle Police Department, King County Sheriff’s Office, and the United States Postal Inspectors.
Sanford C. Coats to Step Down After Serving Six Years as United States AttorneyRead the Press Release
Oklahoma City, Oklahoma -- United States Attorney Sanford C. Coats has announced his resignation effective on January 15, 2016. Coats plans on taking some time to determine his next professional endeavor.
"First, I would like to thank the President for giving me this incredible opportunity to serve as the U.S. Attorney," said U.S. Attorney Coats. "Second, I would like to thank the women and men of the US Attorney’s Office for the Western District of Oklahoma for your commitment to justice. You are true public servants and I was consistently in awe of your work and dedication. Finally, I would like to thank federal, state, tribal and local law enforcement for your partnership and friendship over the last twelve years."
Coats was nominated by President Barack Obama to become United States Attorney for the Western District of Oklahoma on September 30, 2009. The nomination was confirmed by the United States Senate on December 24, 2009, and Coats was sworn-in on December 30, 2009.
As United States Attorney, Coats also successfully prosecuted many civil and criminal cases. In addition, Coats served in many key positions in the Department of Justice, including on the Attorney General’s Advisory Committee (AGAC), Vice-Chair of the AGAC Native American Issues Subcommittee, Co-Chair of the Domestic Terrorism Executive Committee, Co-Chair the AGAC Terrorism and National Security Subcommittee, and Co-Chair of the AGAC Crimes Against Children Subcommittee.
Prior to serving as United States Attorney, Coats served as Assistant United States Attorney (AUSA) from 2004-2009. He worked in all areas of the Criminal Division where he prosecuted a variety of cases, including child prostitution, child pornography, banking fraud, tax evasion, crimes in Indian Country, illegal immigration, complex drug conspiracies, firearm crimes and violence associated with illegal street gangs. As an AUSA, has served as Team Leader of the Major Crimes Team and office Project Safe Childhood Coordinator.
In 2007, Coats volunteered for short-term assignment to the U.S. Attorney’s Office in New Orleans as part of a special initiative by the Department of Justice following the devastation of Hurricane Katrina to assist in the prosecution of violent, firearm and drug crime. Also in 2007, Coats received a national Director’s Award for Superior Performance as an Assistant United States Attorney for his work in the prosecution of multiple child prostitution cases.
Prior to joining the U.S. Attorney’s Office, Coats was in private practice in Oklahoma City representing corporations and individuals in litigation. Coats has been a practicing attorney since 1999, after receiving a Juris Doctorate from the University of Oklahoma College of Law in 1998. Prior to law school, Coats attended Tulane University of Louisiana where he received a Bachelor of Arts degree in 1994.
Richmond Businessman Sentenced for Health Care Fraud ConspiracyRead the Press Release
RICHMOND, Va. – Ronald Tucker, 46, of Lawrenceville, was sentenced today to 37 months in prison for conspiracy to commit health care fraud for submitting false and fraudulent claims for reimbursement to the Virginia Medicaid program. Tucker was also sentenced to three years of supervised release and ordered to pay $442,148 to the Virginia Medicaid Program.
Tucker pleaded guilty on Aug. 26, 2015. According to court documents, Tucker owned and operated Quality Healthcare Inc. (Quality), a Richmond-based Medicaid provider of Intensive In-Home and Mental Health Support services. Intensive In-Home Therapy services, one of the many mental health services offered by Medicaid in Virginia, are designed to assist youth and adolescents who are at risk of being removed from their homes or are being returned to their homes after removal because of significant mental health, behavioral, or emotional issues. Mental Health Support services are designed to enable individuals with significant psychiatric functional limitations to achieve and maintain community stability and independence.
In a statement of facts filed with the plea agreement, Tucker acknowledged that, through Quality, he billed Medicaid for services that were never performed and falsified patient eligibility criteria that was submitted to Medicaid’s prior-authorization service, falsely representing Medicaid recipients’ mental health statuses to qualify them for services they did not need.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge James R. Spencer.
The case was investigated by the FBI and the Virginia Attorney General’s Medicaid Fraud Control Unit. This case was prosecuted by Special Assistant U.S. Attorney and Virginia Assistant Attorney General Joseph E.H. Atkinson, and Assistant U.S. Attorney Jessica D. Aber.
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-150.
Reinbeck Man Pleads Guilty to Receiving Child PornographyRead the Press Release
A man who received child pornography pled guilty on January 5, 2016, in federal court in Cedar Rapids.
Robert Turner, age 34, from Reinbeck, Iowa, formerly from Cedar Falls, was convicted of one count of receipt of child pornography. At the plea hearing, Turner admitted that, between 2001 and 2013, he knowingly used the Internet to receive child pornography.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Turner remains in custody of the United States Marshal pending sentencing. Turner faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, a $100 special assessment, and supervised release for 5 years to life following any imprisonment.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Cedar Falls Police Department and the Iowa Division of Criminal Investigation.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 15-2049.
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Palm Beach County Resident Sentenced to 16 Years in Prison for his Role in Massive Identity Theft Tax Refund Fraud SchemeRead the Press Release
Lukner Blanc, 33, of Royal Palm Beach, was sentenced to 192 months in prison, to be followed by three years of supervised release, and was ordered to pay joint and several restitution in the amount of $733,563 for his role in a massive identity theft tax refund fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Ric Bradshaw, Sheriff, Palm Beach County Sherriff’s Office, and Amos Rojas, Jr., United States Marshals, United States Marshals Service Regional Fugitive Task Force, made the announcement.
After a ten day trial, Blanc and co-defendant Benoit Placide, a/k/a “Snow,” a/k/a “Mario,” 27, of West Palm Beach, were each convicted of conspiracy to receive, conceal or retain monies stolen from the United States, wire fraud, and aggravated identity theft. Blanc was also convicted of receiving, concealing and retaining monies stolen from the United States. On October 5, 2015, co-conspirator Benoit Placide was sentenced to 120 months in prison, to be followed by three years of supervised release, and was ordered to pay joint and several restitution in the amount of $742,955.
At trial, the government presented evidence that the federal investigation began with the arrest of Blanc, on October 29, 2012, for an unrelated state crime. Agents recovered four bank debit cards out of Blanc’s pants pocket, all in the names of other persons. While incarcerated in the state case, Blanc made recorded calls from the Palm Beach County Jail. Based on information obtained during the course of the monitored and recorded jail calls, law enforcement officials obtained a state search warrant for the residence of co-conspirator Jean Juste, a/k/a “Junior,” a/k/a “Shorty,” 26, of West Palm Beach. Inside Juste’s residence, agents discovered items used to facilitate identity theft crimes, including computers, more than sixty-nine Western Union debit cards, lists of employers, and the names, Social Security numbers, and dates of birth of various individuals. During the course of the investigation, law enforcement learned that Blanc and Juste were associates in the identity theft fraud scheme, alongside co-conspirator Placide.
During the course of the identity theft fraud scheme investigation federal agents obtained additional warrants to search the computers recovered from Juste’s residence. Forensic examinations of the computers revealed that more than 1,000 fraudulent federal personal income tax returns had been filed using the operating system. The returns were submitted over the internet to the Internal Revenue Service (“IRS”) using TaxHawk.com and TurboTax. Co-conspirators of the fraud scheme opened bank accounts in Florida, in order receive the fraudulently obtained federal income tax refunds.
The co-conspirators attempted to obtain more than $1,200,000 in fraudulent, unauthorized income tax refunds. As a result of the fraudulent scheme, the government was induced to pay out more than $730,000 in unauthorized refunds that were later determined to have been filed by the co-conspirators and not the legitimate taxpayers. The co-conspirators received the fraudulent tax refund payments, which were sent to bank accounts and pre-paid debit cards they controlled. After the fraudulent refunds were sent by wire transfer to the bank accounts and debit cards, the defendants and their co-conspirators withdrew the funds at automatic teller machines (ATMs) and point of sale electronic terminals at various retail establishments.
Co-conspirator Jean Juste previously pled guilty to conspiracy, theft of government funds, wire fraud, and aggravated identity theft. On February 17, 2015, Juste was sentenced to 84 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $668,947 for his participation in the conspiracy.
Co-conspirator Shelda Phadael, 29, of Lake Worth, previously pled guilty to conspiracy and theft of government funds. On May 29, 2015, Phadel was sentenced to 18 months in prison, followed by 3 years of supervised release, and was ordered to pay restitution in the amount of $13,327.
Co-Conspirators Marie Claude, 27, of Lantana, and Marie Demesyeux, 31, of Lake Worth, previously pled guilty. On April 16, 2015, both defendants were sentenced to time served.
Co-conspirator Frank Fleuzinord, 30, of Cape Coral, is a fugitive.
Mr. Ferrer commended the investigative efforts of IRS-CI, the United States Marshals Service Regional Fugitive Task Force, and the Palm Beach County Sheriff’s Office. This case was prosecuted by Assistant U.S. Attorney Stephen Carlton.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Oklahoma Man Pleads Guilty to Conveying False Information Regarding a Bomb at Church in RogersRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Allen Ward, age 51, of Muskogee, Oklahoma, pleaded guilty today to one count of Maliciously Conveying False Information in violation of 18 U.S.C. § 844(e) . According to the plea agreement, On October 21, 2012, Ward used a cell phone to knowingly provide false information to the Bentonville Police Department by telling a dispatcher that there might be a bomb located at the Fellowship Bible Church, a church located in Rogers, Arkansas that Ward’s ex-wife attended. The change of plea was accepted by the Honorable Timothy L. Brooks, in the U.S. District Court in Fayetteville.
The offense to which Ward pleaded guilty carries a maximum sentence of 10 years imprisonment. Sentencing will occur at a later date.
This case was investigated by the Federal Bureau of Investigations-Joint Terrorism Task Force (FBI-JTTF), the Bentonville Police Department, and the Rogers Police Department. Assistant United States Attorney Brice White prosecuted the case for the United States.
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New Orleans Woman Sentenced for Aiding and Abetting Health Care FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that EVELYN ODOMS, age 65, of New Orleans, was sentenced today after previously pleading guilty to aiding and abetting health care fraud.
U.S. District Judge Susie Morgan sentenced ODOMS to three years probation, a special assessment of $100, and restitution in the amount of $2,055.
On March 12, 2015, ODOMS was indicted along with 18 other defendants in a 26-count indictment charging approximately $30,052,295 in Medicare fraud and the BP fraud.
According to court documents, Abide billed Medicare for providing home health services to a patient at Abide for about five years. During that time period, ODOMS, a licensed practical nurse, was supposed to teach the patient how to treat and handle different diagnoses. But ODOMS never observed the patient exhibit symptoms of the diagnoses and never taught the patient about the diagnoses. ODOMS falsely documented services she was supposed to provide to the patient, documentation that Medicare relied upon to regulate Medicare providers. Abide relied on ODOMS’s compromised independent medical observations and ethics to participate in the ongoing health care fraud scheme perpetrated by Abide and Odoms’s co-defendants.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorneys Patrice Harris Sullivan, Sharan Lieberman, and Andre Lagarde are in charge of the prosecution.
New Orleans Man Sentenced to 13 Years in Prison for Bank RobberyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that THOMAS EUGENE, age 54, of New Orleans, was sentenced today after previously pleading guilty to one count of bank robbery.
U.S. District Court Judge Sarah S. Vance sentenced EUGENE to serve 160 months imprisonment, to be followed by three years of supervised release, restitution in the amount of $5,269, and a $100 special assessment.
According to the court documents, on February 25, 2009, EUGENE entered the Iberia Bank located in the Pan-American building at 601 Poydras Street in New Orleans, and approached a teller with a note demanding money. The teller gave EUGENE all the $10s, $20s, and $100s from her drawer which an audit by the bank later determined was $5,269.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the New Orleans Police Department in investigating this matter. Assistant U.S. Attorney Emily K. Greenfield was in charge of the prosecution.
Nevada Man Sentenced to 10 Years for Traveling to Colorado to Engage in Sexual Acts with a MinorRead the Press Release
A Nevada man was sentenced to 120 months in prison today in Denver for traveling across state lines with the intent to engage in illicit sexual conduct with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John F. Walsh of the District of Colorado.
Brian Franklin Howard, 38, of Las Vegas, pleaded guilty on Sept. 11, 2015, to one count of travel with intent to engage in illicit sexual conduct with a 10-year-old minor child in violation of 18 U.S.C. § 2423(b). He has been in custody since his arrest on April 2, 2015. U.S. District Judge Christine M. Arguello of the District of Colorado also ordered Howard to 10 years of supervised release.
According to the plea agreement, a U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) agent, posing undercover as a single mother of two minor children, came into contact with Howard online. Howard then arranged to meet the mother and her children and flew from Las Vegas to the Denver International Airport, where he met the undercover agent, confirmed his intent to have sex with children and was arrested.
ICE-HSI investigated this case. Trial Attorney James E. Burke IV of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Alecia Riewerts of the District of Colorado prosecuted the case.
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 CEOS, 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.justice.gov/psc.
Ms-13 Gang Member Admits Plans to Kill Rival Gang Members and WitnessesRead the Press Release
NEWARK, N.J. – An MS-13 gang member from Union County, New Jersey, today admitted that after being arrested on charges of plotting to kill rival gang members, he and others planned to murder suspected government witnesses from prison, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.
Julio Adalberto Orellana-Carranza, a/k/a “Player,” 27, of Plainfield, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging him with conspiring to engage in a racketeering enterprise known as La Mara Salvatrucha, or MS-13.
According to the documents filed and statements made in court:
MS-13 is a national and international gang composed primarily of immigrants or descendants from El Salvador. Branches, or “cliques,” of MS-13 operate throughout the United States, including Plainfield. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang.
According to statements made by Orellana-Carranza in court, he was a member of the Plainfield Locos Salvatrucha (PLS) clique of MS-13 from at least August 2011. Orellana-Carranza admitted that he conspired with other members of MS-13 to engage in racketeering activity including murder, robbery, extortion and drug trafficking.
Orellana-Carranza stated that in June 2011, he and other members of the PLS clique plotted to kill members of rival gangs on the streets of Plainfield. Orellana-Carranza further admitted that after being arrested on those charges, he and other jailed MS-13 members hatched a plan to intimidate and/or kill individuals they believed were cooperating with law enforcement in the prosecution of MS-13 members.
Orellana-Carranza faces a maximum potential penalty of 20 years in prison and a $250,000 fine. Orellana-Carranza will remain detained pending sentencing, which is currently scheduled for May 4, 2016.
Eleven additional members and associates of the PLS clique of MS-13 are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, conspiracy to commit murder, robbery, extortion, witness retaliation and sexual assault.
U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, and ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, with the investigation leading to today’s plea. They also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, and the Plainfield Police Department, for their work on the case.
The government is represented by Assistant United States Attorneys James Donnelly and
Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark as well as Trial
Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section.
Defense counsel: Bruce Rosen Esq., Roseland, New Jersey
Monroe tax preparer sentenced to 57 months in prison for filing false returnsRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Monroe tax preparer was sentenced Monday to 57 months in prison for filing multiple false tax returns.
Richard Allan Scott, 38, of Monroe, was sentenced by U.S. District Judge Robert G. James for multiple counts of aiding or subscribing a false tax return. He was also sentenced to one year of supervised release and was ordered to pay $338,380 restitution. Evidence admitted at the three-day trial, which ended on September 11, 2015, revealed that more than 50 false tax returns for years 2011 and 2012 were prepared. Many of the returns contained fictitious information pertaining to W-2 withholdings, dependent care expenses and tax credits. The total amount stolen during the scheme was approximately $338,380.
IRS-Criminal Investigations and Monroe Police Department conducted the investigation. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.
Mobridge Man Sentenced for Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mobridge, South Dakota, man convicted of Child Abuse was sentenced on January 4, 2016, by U.S. District Judge Charles B. Kornmann.
Gabe Dubois, age 27, was sentenced to 6 months in custody, followed by 3 years of supervised release, and a special assessment of $100 to the Federal Crime Victims Fund.
Dubois was indicted by a federal grand jury on July 14, 2015. He pled guilty on September 21, 2015.
The conviction stems from an incident on June 8, 2015, when an employee of Lucky’s Gas & More in Mobridge called the Mobridge Police Department to report that someone had stolen four cans of beer from Lucky’s. Law enforcement was dispatched to Lucky’s and spoke with the employee who reported that Dubois took four cans of beer from a cooler, stuck them down his pants, walked up to the cash register, requested a book of matches from the clerk, and left the store without paying for his items. After reviewing video surveillance, law enforcement determined that Dubois had arrived and left the store in a black, four-door, Oldsmobile Alero.
Shortly after 5:30 PM on June 8, 2015, the Mobridge Police Department received a call from an employee at G&R Body Shop who informed law enforcement that a black Oldsmobile Alero with a male driver and female passenger kept speeding past the body shop. The employee also stated the driver was wearing a black baseball cap. While law enforcement and the employee were speaking, the car in question approached the shop and was identified by the employee.
Law enforcement pursued the vehicle and identified Dubois as the driver. Law enforcement further noticed the driver was wearing a black hat, and saw a female in the passenger seat. The vehicle had a North Dakota license plate, which was later found to be registered to Dubois. At this point, the officer turned his squad car around and activated his emergency lights and siren.
Dubois fled from law enforcement through several streets in Mobridge, driving 47 miles per hour in a 35 mile per hour zone and driving around a road block comprised of two police squad cars. Law enforcement continued to pursue Dubois, who drove at speeds of up to 100 miles per hour, heading west across the Highway 12 bridge near Mobridge onto the Standing Rock Indian Reservation. Dubois continued to flee once he entered the reservation, turning north on Highway 1806, heading towards Kenel, South Dakota. Because the chase had entered Tribal lands, Mobridge law enforcement notified the Bureau of Indian Affairs (BIA) Law Enforcement.
Dubois continued north toward Kenel at speeds of 70 to 100 miles per hour in a 55 mile per hour zone. South of Kenel, Dubois lost control of the vehicle. The vehicle spun to face south and continued into the ditch, rolling over multiple times, and landing upside down. Multiple law enforcement officers and agencies responded to the crash. The officers were able to extract Dubois from the driver’s seat, an adult female from the passenger seat, and a 17-month-old child, who is Dubois’s daughter. There was a strong odor of alcohol emanating from the vehicle and the officers observed numerous open and empty cans and bottles of alcoholic beverages.
Dubois was interviewed by a Special Agent with the BIA. Dubois admitted to not stopping for the officers when they engaged their lights because he did not want to go to jail. When asked how fast he was going, Dubois said 100 miles per hour, but thought he had dropped down to 75. He also admitted that his driving and eluding police placed his daughter’s life at risk of death or serious bodily injury. He recognized that his actions would be considered a form of child abuse or neglect.
This case was investigated by the BIA, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Dubois was immediately turned over to the custody of the U.S. Marshals Service.
Missouri Man Sentenced to More Than 14 Years in Prison for Fraud, Money Laundering, and Firearms ChargesRead the Press Release
Fort Smith, AR - Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Travis Allen Blount, Jr., age 57, of Kirbyville, Missouri formerly of Harrison, Arkansas, was sentenced to 175 months in federal prison and three years of supervised release on five counts to include: Mail Fraud; Wire Fraud; two counts of Money Laundering; and Possession of a Firearm by a Prohibited Person. Blount was also ordered to pay victim restitution totaling more than $900,000 to more than 80 victims. The Honorable P.K. Holmes, III presided over the sentencing hearing in the U.S. District Court in Fort Smith on January 5, 2016.
According to court records, from approximately 2012 until January 2015, Blount operated car lots in Malvern and Hot Springs, Arkansas, Corvettes and Classics in Harrison, Arkansas and Al’s Hot Rod’s in Kirbyville, Missouri. Blount solicited owners of classic and vintage vehicles to place their valuable vehicles with him on consignment, promising to pay the owners after the sale of their cars. Blount defrauded the owners by selling their cars and keeping the money for himself. Blount also defrauded car buyers by accepting payment for the cars he sold and not delivering the vehicles or the car titles to the buyers. Blount was previously convicted of a crime punishable by imprisonment exceeding one year, and therefore, was prohibited by federal law from possessing a firearm.
This case was investigated by the Financial Crimes Task Force in the Western District of Arkansas, the Internal Revenue Service - Criminal Investigation Division, Homeland Security Investigations, the Fayetteville Police Department, the Harrison Police Department, and the Taney County, Missouri Sheriff’s Office. Assistant U.S. Attorney Kyra Jenner 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
Mission Woman Sentenced for Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, woman convicted of Assaulting, Resisting, Opposing, and Impeding a Federal Officer was sentenced on January 4, 2016, by U.S. District Judge Roberto A. Lange.
Alvina Leader Charge, age 30, was sentenced to time served, at least 4 months in a residential re-entry program, followed by 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Leader Charge was indicted by a federal grand jury on July 14, 2015. She pled guilty on October 9, 2015.
The conviction arose from a June 30, 2015, incident when a Rosebud Sioux Tribe Law Enforcement Services Officer responded to a call near the Maverick Motel in Mission. At the scene, the officer arrested Leader Charge for contempt of court and making a false statement. At first, Leader Charge was cooperative, but then she began calling the officer names and threatening to get her fired. The officer tried to calm Leader Charge and warned her they would need to use a security chair if she did not settle down. When the officer was taking Leader Charge out of the squad car, Leader Charge pulled away from the officer and hit the officer in the face and chest. Leader Charge told the officer, “You’re going to get killed,” and said she was going to be on a 24-hour search for the officer.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Leader Charge was immediately turned over to the custody of the U.S. Marshals Service.
Mexican Cartel Leader Edgar Valdez-Villareal, A/K/A "La Barbie," Pleads Guilty to Drug Trafficking and Money LaunderingRead the Press Release
ATLANTA - Edgar Valdez-Villareal, a/k/a La Barbie, who was born in the United States and rose to be a high-level leader of Mexico's Beltran-Leyva Cartel, has pleaded guilty to charges of cocaine importation and distribution, and money laundering.
“Valdez’s conviction is a victory for the people in both the United States and Mexico whose lives were affected by his cocaine trafficking, through drug addiction and community decay or through the violence and corruption associated with the cartel’s daily business,” said U. S. Attorney John Horn. “Valdez stands as a prime example of the Mexican cartels’ influence over the U.S. drug trade, as truckload after truckload of his cocaine traveled across the border to Atlanta for further transport to cities throughout the eastern United States. We are grateful for the cooperation of the Mexican government in securing Valdez’s arrest and extradition to Atlanta to face these charges.”
“Since 2004, Edgar Valdez-Villarreal (La Barbie) was responsible for the distribution of 1000’s of kilograms of Cocaine throughout the Southeast, and more specifically the Northern District of Georgia. This is a great day for DEA, the Government of Mexico and literally hundreds of DEA’s federal, state and local partners throughout the United States. I want to thank the US Attorney in the Northern District of Georgia, and his staff for their outstanding efforts throughout this investigation. This is a victory for this great Nation and our partners in the Republic of Mexico.” Said Atlanta’s DEA Special Agent in Charge Daniel R. Salter.
According to U.S. Attorney Horn, the charges and other information presented in court: As early as the year 2000, Valdez began his drug trafficking career as a marijuana distributor in Laredo, Texas. He soon developed cocaine customers in New Orleans, Louisiana, Memphis, Tennessee, and Mississippi, and his activities escalated into regular shipments of 150-180 kilograms of cocaine to his customers. Valdez eventually entered into a relationship with Arturo Beltran-Leyva, who was then associated with the Sinaloa Cartel in Mexico, and began coordinating shipments of cocaine into Mexico from Colombia and other South American countries using speedboats and airplanes, while also paying bribes to local law enforcement officials. The cocaine was then transported across the border into the United States.
In 2004, Valdez and his partners sought out a more formalized distribution organization for their cocaine customers in Memphis and Atlanta. Valdez obtained cocaine from Colombia, exported the cocaine from Mexico to customers located in the United States in tractor trailer loads of up to 300 kilograms twice per week, then arranged for currency to be smuggled back across the border to the organization’s supervisors in Mexico. In Atlanta alone, the organization distributed a total of 1,500 kilograms of cocaine in just six months in 2005. DEA agents were able to build the case against Valdez using wiretaps, seizures of over 100 kilograms of cocaine and $4 million of drug proceeds, and witness testimony.
Each of the drug trafficking charges in this case carries a maximum sentence of life in prison, a fine of up to $10,000,000, a lifetime term of supervised release, and a $100 special assessment, and requires a mandatory minimum sentence of 10 years imprisonment and five years of supervised release.
The money laundering charge carries a maximum sentence of 20 years in prison, a fine of up to $500,000 or twice the amount of funds that were laundered, a three-year term of supervised release, and a $100 special assessment. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing for Edgar Valdez-Villareal, a/k/a La Barbie, 42, has not yet been scheduled.
This case is being investigated by the Drug Enforcement Administration.
United States Attorney John Horn and Assistant United States Attorneys Elizabeth M. Hathaway and Garrett L. Bradford are prosecuting the case. The Justice Department’s Office of International Affairs provided assistance with this case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
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.
Man Sentenced to 39 Months in Prison for Role in Tax and Bank Fraud ConspiraciesRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Victor Kwabenda Adofo Asante, a.k.a.Victor Asante, age 25, formerly of Newark, Delaware, was sentenced today by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, to 39 months imprisonment and full restitution in the amount of $259,342.00. The defendant pleaded guilty to False Claims and Bank Fraud Conspiracy in June 2015.
According to court filings and statements at the sentencing hearing, the defendant and others used stolen identities to file fraudulent federal income tax returns with the Internal Revenue Service. The defendant obtained some of the stolen identities by convincing an associate to steal personal information from patients of her employer, a neuro-rehabilitation center. The defendant also participated in bank fraud activities. He and others compromised, and stole money from, unsuspecting victims’ credit card, annuity, and other financial accounts.
The defendant concealed his involvement in the fraudulent activity by, among other things, receiving fraud proceeds into bank accounts he opened or controlled in other people’s names, withdrawing the proceeds in cash, transferring the funds to other bank accounts, and exchanging the funds with others through money orders and checks.
Two of the defendant’s separately charged co-conspirators were previously sentenced by the court. In February 2015, James Ekeke, age 26, of Smyrna, Georgia, pleaded guilty to false claims conspiracy and access device fraud. Ekeke was sentenced in June 2015 to serve 54 months in prison. In May 2015, Festus Frimpong, age 20, of Newark, Delaware, pleaded guilty to false claims conspiracy and access device fraud. Frimpong was sentenced in October 2014, to serve 46 months imprisonment.
An additional co-conspirator, Natasha Pollard, awaits sentencing. She pleaded guilty to aiding and abetting receipt of stolen government property, and bank fraud conspiracy, in October 2015.
A fourth co-conspirator, Amaserwaah Asante, awaits trial on March 28, 2016. She was charged by a Superseding Indictment dated March 12, 2015, with false claims conspiracy, money laundering, and bank fraud conspiracy.
U.S. Attorney Oberly gave the following comments: “Frauds like this have become all too common and are costing the government huge sums of money. My office is committed to prosecuting those engaged in this kind of criminal behavior and to seeking substantial periods of imprisonment to serve as a deterrent to others who might want to attempt to commit the same or similar frauds. I personally want to thank the federal agencies, investigators and Assistant United States Attorney who worked diligently to bring Mr. Asante and his co-defendants to justice.”
“Defendant Victor Ofosu-Asante demonstrated a blatant disregard of the integrity of the United States tax system. Rest assured that IRS Criminal Investigation, along with our law enforcement partners, and the U.S. Attorney's Office, will hold those who engage in similar behavior fully accountable." said Akeia Conner, Special Agent in Charge.
These cases are the result of an ongoing investigation conducted by the Internal Revenue Service Criminal Investigation, the United States Postal Inspection Service, and the Social Security Administration Office of the Inspector General.
MS-13 Member Admits Plan to Kill Rival Gang Members and WitnessesRead the Press Release
A Plainfield, New Jersey, man pleaded guilty today to one count of conspiring to engage in a racketeering enterprise known as La Mara Salvatrucha, or MS-13.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division made the announcement.
Julio Adalberto Orellana-Carranza, aka Player, 27, pleaded guilty before U.S. District Judge Stanley R. Chesler of the District of New Jersey, who scheduled sentencing for May 4, 2016. Orellana-Carranza remains detained pending sentencing.
According to court documents, MS-13 is a national and international gang with branches or “cliques” operating throughout the United States, including in Plainfield. In connection with his plea, Orellana-Carranza admitted that he was a member of the Plainfield Locos Salvatrucha (PLS) Clique of MS-13 for a period of time continuing through at least August 2011. Orellana-Carranza admitted that in June 2011, he and other members of the PLS clique plotted to kill rival gang members in Plainfield. Orellana-Carranza also admitted that after local authorities arrested him for that plot, he and other jailed MS-13 members hatched a plan to intimidate and/or kill individuals they believed were cooperating with law enforcement in the prosecution of MS-13 members.
Eleven other members and associates of the PLS Clique are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, conspiracy to commit murder, robbery, extortion, witness retaliation and sexual assault.
Co-defendant Jose Romero-Aguirre, aka Conejo, pleaded guilty on Dec. 2, 2015.
FBI’s Newark Division, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations’s Newark Field Office, ICE-Enforcement and Removal Operations, the Plainfield Police Department and the Union County, New Jersey, Prosecutor’s Office investigated the case. Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys James Donnelly and Jamari Buxton of the District of New Jersey are prosecuting this case.
Leader of Baltimore Heroin Distribution Organization Sentenced to 12 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Richard Smith, age 31, of Baltimore, Maryland today to 12 years in prison, followed by four years of supervised release, for conspiracy to distribute and possess with the intent to distribute heroin.
Also today, Judge Quarles sentenced Derek Shorts, age 51, of Baltimore to six years in prison, followed by three years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin. On January 5, 2016, Judge Quarles also sentenced co-conspirator Dedrick Coates, age 26, of Baltimore to six years in prison, followed by three years of supervised release, for the same charges.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to their plea agreements, beginning in at least January 2014 and continuing through December 10, 2014, Smith, Shorts and Coates conspired with others to distribute heroin in Baltimore. During the conspiracy, Smith and Bruce Jeffries met with other co-conspirators, including Coates, to provide heroin for distribution by members of the conspiracy. Smith was the supervisor of this conspiracy and was responsible for providing the heroin distributed by the co-conspirators. Shorts was responsible for “running” the narcotics to the distributors and for watching over the narcotics “stash.” Once Coates received heroin from another member of the organization, he would either distribute the heroin to other co-conspirators or to his personal use customers.
Between September and November of 2014, law enforcement intercepted telephone conversations between Smith, Jeffries, and other conspirators. During these calls, Smith, Jeffries, Coates, and others were heard discussing the distribution and payment for various amounts of heroin. Shorts was overheard discussing the quantity of narcotics available for distribution. Smith was also intercepted giving members of the conspiracy instructions regarding the distribution of narcotics. On November 14, 2014, law enforcement executed a search warrant at a “stash” house used by members of the conspiracy. During the search, law enforcement recovered 400 gel capsules of heroin from inside the stash house, along with another 100 gel capsules of heroin from Shorts. This seizure precipitated intercepted phone conversations between Jeffries, Smith, and another co-conspirator regarding the seizure.
Smith, Shorts and Coates agree that during their participation in the conspiracy, the conspirators were responsible for the distribution of between one and three kilograms of heroin.
Ten other co-conspirators have pleaded guilty to their roles in the heroin distribution conspiracy. Bruce Jeffries, age 27; Brian Nettles, age 24; Kevin Gray, age 32; Brian Carr, age 26; Walter Timmons, age 27; Darrell Randolph, age 27; Pernell Randolph, age 28; Marvin Germany, age 26; and Vincent Jones, age 52, all of Baltimore, have been sentenced to between 70 and 84 months in prison. The remaining defendant is awaiting sentencing.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore City Police Department, and the Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Matthew Hoff, a cross-designated Baltimore City Assistant State’s Attorney, part of the Baltimore initiative to combat violent crime, who is prosecuting the case.
Justice Department Announces Resolution under Swiss Bank Program with Union Bancaire Privée, UBP SARead the Press Release
The Department of Justice announced today that Union Bancaire Privée, UBP SA (UBP), reached a resolution under the department’s Swiss Bank Program. UBP will pay a penalty of more than $187 million.
“Today’s agreement marks the final resolution with UBP, which acknowledges its role in conspiring with U.S. taxpayers to evade U.S. tax through an array of sham entities, structured transactions, nominees and bank services designed to disguise the true ownership of foreign accounts and other assets,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Under the terms of the agreement, UBP pays a heavy price for its criminal conduct and must cooperate fully in all matters relating to the conduct described in the agreement until all civil or criminal examinations, investigations or proceedings are concluded.”
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 agreement signed today, UBP agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute UBP for tax-related criminal offenses.
UBP is a corporation organized under the laws of Switzerland with its headquarters in Geneva, Switzerland. It was originally founded in 1969 under the name Compagnie de Banque et d’Investissements CBI. In 1990, CBI merged with TBD-American Express Bank. The merged entity was re-named UBP. UBP operates a financial services business in Geneva, Zurich, Basel and Lugano, Switzerland. It primarily offers private banking and wealth management services for individual clients around the world, including U.S. citizens, legal permanent residents and resident aliens. However, UBP also provides investment management and hedge fund services with a focus on institutional clients.
Over the past two decades, UBP has made a number of acquisitions, including NordFinanz Bank (1995), Discount Bank and Trust (2002), ABN AMRO (Switzerland) AG (2011), a portion of the assets associated with Banco Santander (Switzerland) SA’s private banking business (2012), Nexar Capital Group (Luxembourg) (2012), the assets associated with Lloyds Banking Group’s international private banking business (2013) and the assets associated with Coutts’s Swiss private banking activities (2015).
For decades prior to and through 2013, UBP aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts. Over 200 private bankers were responsible for managing at least one U.S. client account during the period since Aug. 1, 2008. These private bankers, referred to as relationship managers, served as the points of contact for U.S. clients at UBP and were responsible for opening and servicing U.S. client accounts at UBP. Certain relationship managers assisted or otherwise facilitated some U.S. individual taxpayers in establishing and maintaining undeclared accounts in a manner that concealed the U.S. taxpayers’ ownership or beneficial interest in said accounts.
UBP assisted U.S. clients with undeclared accounts at UBP by placing and maintaining their assets in the names of non-U.S. structures, rather than the actual beneficial owner of the funds. During the period since Aug. 1, 2008, UBP held 502 U.S.-related accounts in the names of non-U.S. structures formed in jurisdictions such as the British Virgin Islands, the Cayman Islands, Liechtenstein and Panama. Because Swiss law requires UBP to identify the true beneficial owner of structures on a document called a Form A, it knew or should have known that these were U.S. clients. Nonetheless, UBP accepted and included in UBP’s account records Internal Revenue Service (IRS) Forms W-8BEN (or UBP’s substitute forms) provided by the directors of the offshore companies that falsely stated under penalty of perjury or implied that such companies were the beneficial owners of the assets in the UBP accounts for U.S. federal income tax purposes. This aided and assisted the U.S. clients in concealing these assets and income from the IRS.
Prior to UBP’s acquisition, former ABN AMRO employees advised U.S. clients to conceal their U.S. nexuses from bank documentation. For example, in September 2011, one relationship manager sent an email to a client with dual U.S. citizenship, while she was completing her account opening documents, recommending that the client provide her non-U.S. passport and not her U.S. passport. In another instance in September 2008, a relationship manager instructed a U.S. resident client to sign bank documents using a non-U.S. place and date and to provide a utility bill reflecting a non-U.S. residence.
Prior to 2001, UBP provided formation and administration services for offshore structures through a Geneva-based affiliate. However, in 2001, UBP formed an internal Wealth and Estate Planning unit (WEP Unit) and transferred the administration of these structures to the WEP Unit. The WEP Unit did not form structures but did administer them by liaising with entity agents such as foreign law firms, paying administrative fees and keeping corporate documents up-to-date. UBP coordinated with external trust companies and attorneys to form and administer offshore structures for U.S. clients, for example, with a Geneva-based consultant, a Geneva-based law firm and a Zurich-based individual company. These companies opened numerous accounts for U.S. clients at UBP in the names of offshore structures. For those potential and current U.S. clients interested in creating nominee offshore entities, UBP employees contacted and/or referred U.S. clients to these companies.
UBP maintained undeclared accounts at UBP for U.S. clients in the nominee names of non-U.S. 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. Insurance wrappers were marketed to Swiss Banks by third-party providers in the wake of the UBS investigation as a means of disguising the beneficial ownership of U.S. clients. For example, in November 2009, UBP worked with a third-party service provider to assist a U.S. beneficial owner in restructuring three existing accounts he held at UBP in the names of nominee Panamanian entities into three accounts owned by the insurance company.
UBP employees assisted numerous U.S. clients in concealing their undeclared account funds by making fictitious donations to other accounts at UBP controlled in whole or in part by the U.S. client but held by non-U.S. persons. Typically, the former U.S. customers either maintained signature authority over the donee’s account or had the funds returned to them in the future. For example, in December 2009, the U.S. beneficial owners of a UBP bank account informed UBP of their intent to donate their assets to the remaining non-U.S. beneficial owner of their account. UBP executed a new Form A reflecting sole ownership by the remaining non-U.S. person. However, when the non-U.S. person closed the account in 2012, UBP executed a $491,000 transfer to the personal bank account of the former U.S. beneficial owners at another bank.
UBP offered a variety of other traditional Swiss banking services, including hold mail and code name or numbered accounts, that it knew could assist, and did in fact assist U.S. clients in concealing assets and income from the IRS. UBP used or accepted the use of a variety of other means to assist U.S. clients in concealing their undeclared accounts, including by assisting U.S. clients to repatriate undeclared funds via fictitious donations, by making remote debit or credit card withdrawals, by converting the account funds into precious metals, through nominees, or by structuring transfers of funds from undeclared accounts to evade currency transaction reporting requirements.
Effective January 2001, UBP entered into a Qualified Intermediary (QI) Agreement with the IRS. The QI Agreement was designed to help ensure that, with respect to U.S. securities held in an account with UBP, non-U.S. persons were subject to the proper U.S. withholding tax rates and U.S. persons were properly paying U.S. tax. As a consequence of UBP entering into a QI Agreement with the IRS, UBP allowed U.S. clients to create and open accounts in the name of sham offshore entities and insurance wrappers. Certain UBP employees caused UBP to certify compliance with the QI Agreement event though the true beneficial owners were not reflected in the IRS Forms W-8BEN in the account files. UBP also divested U.S. securities from its undeclared U.S. accounts for the purpose of subverting its QI Agreement.
During the period since Aug. 1, 2008, UBP held and managed approximately 2,919 U.S.-related accounts, which included both declared and undeclared accounts, with aggregate peak of assets under management of $4.895 billion. However, 1,282 of the 2,919 U.S.-related Accounts were acquired through the acquisitions of other banks, including ABN AMRO, and bank assets. UBP will pay a penalty of $187.767 million.
In accordance with the terms of the Swiss Bank Program, UBP 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 this non-prosecution agreement, noncompliant U.S. accountholders at UBP must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s agreement is significant on several fronts,” said Chief Richard Weber of IRS-Criminal Investigation. “UBP, as one of the largest private banks in Switzerland, held nearly 3,000 U.S related accounts. This agreement will have far-reaching implications, expanding our understanding about the depth, breadth, tactics and techniques employed by the UBP private bankers and external asset managers who assisted U.S. taxpayers to conceal assets not only in Switzerland, but in other jurisdictions as well.”
“Today’s resolution with Union Bancaire Privée, UBP SA, reflects the effectiveness of the Department of Justice’s Swiss Bank Program,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division. “Financial institutions are being held accountable for their past actions and are now cooperating by providing us information that will let us track and pursue those who have not complied with the law. U.S. taxpayers who have failed to report their foreign accounts and pay their income taxes need to resolve this non-compliance or face the consequences.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked Kevin F. Sweeney, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jicarilla Apache Man Pleads Guilty to Federal Assault ChargesRead the Press Release
ALBUQUERQUE – Shane Lewis Vigil, 29, an enrolled member of the Jicarilla Apache Nation who resides in Dulce, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to assault charges. Under the terms of his plea agreement, Vigil will be sentenced within the range of 60 to 71 months in federal prison followed by a term of supervised release to be determined by the court. Vigil also will be required to pay restitution to the victims of his crimes.
Vigil was arrested on July 24, 2015, on a criminal complaint charging him with assault with a dangerous weapon and assault resulting in serious bodily injury. According to the complaint, Vigil assaulted his girlfriend, a Jicarilla Apache woman, with an aluminum baseball bat on July 20, 2015. According to court records, law enforcement authorities learned about the assault when a social worker reported that the victim had been admitted to a hospital after being severely beaten with a baseball bat.
Vigil was indicted on Aug. 12, 2015, and charged with assault with a dangerous weapon, an aluminum baseball bat, and assault resulting in serious bodily injury. The indictment alleged that Vigil committed the crime on July 20, 2015, in Indian Country in Rio Arriba County, N.M.
During today’s proceedings, Vigil pled guilty to a three-count felony information. With respect to Counts 1 and 2, which charged Vigil with assault with a dangerous weapon and assault resulting in serious bodily injury, Vigil admitted assaulting a female victim with a baseball bat on July 20, 2015, in Rio Arriba County, causing the victim to suffer multiple serious injuries. With respect to Count 3, Vigil admitting assaulting a male victim on Nov. 21, 2014, in Rio Arriba County, and causing him to suffer serious bodily injury.
Vigil remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Jicarilla Apache Tribal Police Department. Assistant U.S. Attorneys Raquel Ruiz-Velez and Kyle T. Nayback are prosecuting the case.
This case was brought as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native American women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Iranian Company Sentenced for U.S. Export ViolationRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania and the Office of Export Enforcement of the United States Department of Commerce announced that FIMCO, an Iranian corporation, was sentenced today to pay a $100,000 criminal fine by United States District Court Judge Yvette Kane in Harrisburg for conspiracy to evade export licensing requirements.
The conspiracy was in connection with an attempt to smuggle to Iran a machine with possible military as well as civilian applications.
According to U.S. Attorney Peter Smith, in December 2012, a federal grand jury in Harrisburg charged FIMCO in a sealed indictment made public in July 2015. In April 2014, an American company, Hetran, Inc., an engineering and manufacturing corporation in Orwigsburg, Schuylkill County, Pennsylvania, and its President, Helmut Oertmann, were charged with participating in the conspiracy. A guilty plea was entered on behalf of the corporation in July 2015 before United States Magistrate Judge Susan E. Schwab.
Hetran manufactured a large horizontal lathe, also described as a bar peeling machine (“peeler”), valued at more than $800,000 and weighing in excess of 50,000 pounds. The machine is used in the production of high grade steel for the manufacture of automobile and aircraft parts.
Under U.S. law and regulations, American companies are forbidden to ship “dual use” items (items with civilian as well as military or proliferation applications), such as the peeler, to Iran without first obtaining a license from the U.S. Government. Aware that it was unlikely that such a license would be granted, FIMCO, which does business in Dubai, United Arab Emirates, and other alleged co-conspirators agreed to falsely state on the shipping documents that the end-user of the peeler was Crescent International Trade and Services FZE (Crescent), an affiliated company, knowing that the machine would subsequently be shipped to Iran after being off-loaded in Dubai.
In June 2012, Hetran caused the peeling machine to be shipped from Pennsylvania to Dubai in the United Arab Emirates, fraudulently listing Crescent as the end-user, knowing that the shipment was ultimately being sent by FIMCO to Iran in violation of federal law. The Office of Export Enforcement, Bureau of Industry and Security (BIS), U.S. Department of Commerce detected the shipment and ordered that it be re-delivered to the United States. The seizure of key shipping documents, emails and correspondence from Hetran to Iran revealed the scheme, and was critical to the success of the case, and to shutting down the contemplated shipment.
As part of its plea agreement with the United States, FIMCO agreed that the government would recommend a criminal fine. The company also has agreed under a settlement with BIS to pay a $837,500 civil penalty to the U.S. Department of Commerce, of which it paid $587,500 out-of-pocket, with the remaining $250,000 suspended for two years. The suspended portion of the civil penalty will be waived thereafter so long as FIMCO complies with the terms of the plea agreement and any criminal sentence and satisfies certain additional conditions. FIMCO will also be made subject to a two-year suspended denial of its export privileges.
"The penalty imposed today, together with the six-figure administrative penalty being paid by FIMCO to the Department of Commerce, reflects the seriousness of the violation, said Under Secretary of Commerce Eric L. Hirschhorn. The Office of Export Enforcement will continue to pursue and fully prosecute those who violate our export control laws and threaten our national security."
During the investigation by the Department of Commerce’s Bureau of Industry and Security (BIS), FIMCO and Crescent were placed on BIS’s Entity list in August 2014. The Entity List identifies foreign parties that are prohibited from receiving listed items unless the exporter secures a license. Those persons present a greater risk of diversion to weapons of mass destruction (WMD) programs, terrorism, or other activities contrary to U.S. national security or foreign policy interests. By publicly listing such persons, the Entity List serves as an important tool to prevent unauthorized trade in such items.
In December 2014, Helmut Oertmann and Hetran were sentenced by Judge Kane to 12 months’ probation; Oertmann and Hetran were ordered as part of a settlement with BIS to pay a penalty of $837,500 with $337,500 of that amount paid out-of-pocket and the remainder conditionally suspended, which penalty Judge Kane adopted as to Oertmann and Hetran. The other indicted company, Crescent International Trade and Services FZE, and the three Iranian individuals who served as officers of FIMCO, Khosrow Kasraei, Reza Ghoreishi, and Mujahid Ali, are presently fugitives.
The case was investigated by the New York Field Office of the Office of Export Enforcement, Bureau of Industry and Security, Department of Commerce. The Department of Commerce’s Office of the Chief Counsel for Industry and Security handled the civil proceedings. The prosecution was handled by Assistant U.S. Attorney Christy H. Fawcett and was overseen by the National Security Division of the U.S. Department of Justice.
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In-home Caretaker Sentenced for Stealing More Than $80,000 from her Client’s EstateRead the Press Release
Memphis, TN – An in-home caretaker has been sentenced to 27 months for executing a scheme that defrauded a deceased woman’s estate of more than $80,000. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentencing today.
According to the indictment, Shirley Hardaway, 60, of Memphis, was the owner and operator of Companion Plus, an in-home health and respite care provider to sick, disabled, and elderly people. Hardaway served as the daily in-home caretaker of the deceased victim for approximately four-to-five years, according to information presented in court. The home services ceased when the victim died in September 2009 at the age of 91. The deceased victim left behind more than $80,000 in two investment accounts at Franklin Templeton Investments, an investment managing company headquartered in California.
Nearly two years after the victim’s death, in June 2011, Hardaway mailed fraudulent change of address requests to Franklin Templeton on the decedent’s investment accounts, changing the address used for future correspondence between the parties to Hardaway’s address.
Hardaway and a co-conspirator then opened a fraudulent bank account online in the decedent’s name at Bank of America. The victim’s name, social security account number, and address were used to open the account.
After the Bank of America account was activated, Hardaway and her co-conspirator mailed several fraudulent documents to Franklin Templeton in the decedent’s name requesting that the company liquidate the victim’s two investment accounts and transfer the money within them to the fraudulently opened bank account. Upon receiving the request to liquidate both of the deceased victim’s accounts, Franklin Templeton electronically transferred more than $80,000 to the bank account. Hardaway then transferred the money to her personal Bank of America savings account and withdrew it all via cashier’s check.
On Thursday, October 8th, 2015, Hardaway pled guilty to one count of bank fraud and one count of conspiracy to commit mail fraud.
On Wednesday, January 6, 2016, Judge Jon Phipps McCalla sentenced Hardaway to 27 months in federal prison. She has also been ordered to pay $124,630.54 in restitution. In addition to the approximate $80,000 Hardaway stole from the victim’s investment accounts, she stole more than $40,000 in social security checks and pension dividend checks.
The case was investigated by the United States Secret Service.
Assistant U.S. Attorney Leetra Harris prosecuted this case on the government’s behalf.
Idaho Man Sentenced to Five Years in Prison for Conspiracy to Distribute Meth in MissoulaRead the Press Release
MISSOULA – Stephon Elijah Coakley, 20, of Coeur d’Alene, Idaho, was sentenced today in Missoula federal court for conspiracy to possess with intent to distribute methamphetamine. Coakley was indicted on two drug related charges on March 20, 2015. On September 23, 2015, Coakley pleaded guilty to count I: conspiracy to possess with the intent to distribute controlled substances. Chief U.S. District Court Judge Dana Christensen sentenced Coakley to 60 months’ incarceration. Following his release, Coakley will be subject to four years of supervised release.
In an offer of proof filed by Assistant U.S. Attorney Cyndee Peterson, the government stated that if the case had proceeded to trial, the government would have demonstrated that between February and November of 2014, Coakley supplied meth to co-conspirator Yusuf Reeves and conspired with Reeves and two other co-conspirators to bring methamphetamine into Missoula County for distribution. During that time, the co-conspirators possessed and distributed 50 grams or more of a substance containing a detectable amount of methamphetamine.
This case was prosecuted by Assistant U.S. Attorney Cyndee Peterson and investigated by the Federal Bureau of Investigation, Montana Violent Crime Task Force, Missoula Street Crimes Unit, Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Honolulu Businessman Sentenced to 46 Months in PrisonRead the Press Release
HONOLULU – Albert S.N. Hee, 61, of Kailua, Hawaii, was sentenced today to 46 months in prison for engaging in a ten-year scheme of corruptly interfering with the Internal Revenue Service (IRS) in the calculation and collection of his taxes, and for filing six false individual tax returns which underreported his income for the years 2007-2012, announced Florence T. Nakakuni, United States Attorney for the District of Hawaii. Senior U.S. District Judge Susan Oki Mollway also ordered Hee to pay $431,793 in restitution to the IRS, and to pay a fine of $10,000.
Hee was convicted of all counts in the Indictment on July 10, 2015, after an eleven day jury trial. According to court documents and the evidence introduced at trial, Hee owned Waimana Enterprises, Inc., a telecommunications company based in Honolulu, Hawaii. Hee used his company to pay approximately $2.9 million of his personal expenses. The bulk of the expenses were falsely claimed as business deductions on Waimana’s corporate income tax returns, or falsely characterized as “loans” to Hee, Waimana’s sole shareholder. Hee did not report the receipt of the payments as income on his personal income tax returns, and did not pay tax on it.
Information presented to the court reflected that Hee’s lavish spending included $96,000 for personal massages which were deducted as “consulting fees,” $1.6 million in salaries and benefits for his wife and children who were not real employees of the company, and more than $736,900 in college tuition, housing and other expenses for his children. In 2008, Hee bought a $1.3 million dollar home in Santa Clara, California with corporate money and told his accountants that the property would be used by employees of the company. Instead, Hee’s children lived in the home from 2008-2012, which was within skateboarding distance of Santa Clara University, where they attended college. Hee’s children lived at the home, rent-free, and collected rent from others, without paying the amounts over to Waimana. Waimana also paid for vacations for Hee’s family to DisneyWorld, Tahiti, France, and Switzerland, which he falsely characterized as business related. Hee also directed Waimana to pay $17,000 for a five-day family vacation at the Mauna Lani resort on the Big Island of Hawaii, which Hee falsely characterized as a “stockholder’s meeting” even though he was the sole shareholder of the company.
The case was investigated by the Internal Revenue Service-Criminal Investigation, and prosecuted by Assistant U.S. Attorney Larry Tong and Trial Attorney Quinn P. Harrington of the Tax Division of the Department of Justice.