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Tuesday 10 November 2015
Cleveland man charged with robbing three banks and attempting to rob a fourthRead the Press Release
A federal grand jury returned a four-count indictment charging a Cleveland man with robbing three banks and attempting to rob a fourth during a one-week period, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Kevin Lamar Anderson, 46, is charged with robbing the Key Bank located at 5703 Broadway Avenue, twice robbing the U.S. Bank located at 6509 Harvard Avenue in Cleveland, Ohio, and attempting to rob the Ohio Saving Bank at 1866 W. 25th Street in August.
Assistant United States Attorney Matthew J. Cronin is prosecuting the case following an investigation by the Federal Bureau of Investigation, the Cleveland Division of Police, and other local law enforcement agencies.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial where it is the government's burden to prove guilt beyond a reasonable doubt.
Chester County Man Charged with Theft of Government FundsRead the Press Release
PHILADELPHIA - Wayne Tiffany, 57, of Downingtown, Pennsylvania, was charged by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, the defendant received Social Security benefits intended for his deceased paramour, after her death in April 2010 until his fraud was discovered in February 2015. The defendant’s alleged actions resulted in a loss to the government of approximately $39,028.
If convicted, the defendant faces a substantial period of incarceration, a 3‑year period of supervised release, restitution to the government of $39,028, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by the Social Security Administration, Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Buffalo Woman Sentenced for Oxycodone SalesRead the Press Release
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Michelle S. Kidd, 39, of Buffalo, New York, who was convicted of oxycodone distribution, was sentenced to one year and one day imprisonment by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Frank T. Pimentel, who handled the case, stated that on four dates between August 2014 and January 2015, Kidd sold a total of $6,000 worth of oxycodone pills to an individual at Kidd’s Buffalo residence. Oxycodone, along with other opiod and opiate-type drugs, has been responsible for an alarming increase in overdose deaths in this area. United States Attorney Hochul, along with public health officials, have described these fatalities as an epidemic.
The sentencing is the culmination of an investigation by the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division.
Bowie Loan Originator Pleads Guilty in Fraudulent Mortgage SchemeRead the Press Release
Baltimore, Maryland – David B. Pick, age 47, of Bowie, Maryland, pleaded guilty today to making false statements arising from a real estate closing.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General; and Special Agent in Charge Fran Mace, of the Federal Deposit Insurance Corporation Office of Inspector General.
Pick was a loan originator responsible for preparing loan applications, obtaining documentation to support the representations in loan applications, presenting loan applications to financial institutions for funding and working with financial institutions to close loans.
In 2005, Pick sought a $900,000 construction loan from a mortgage lender to purchase and construct a residence at 1206 Tilghmans Landing Way in Annapolis. The residence was to be constructed by Richland Homes, Inc., owned and operated by Timothy Ritchie.
According to his plea agreement, on March 10, 2005, Pick falsely represented on the loan application that he received $1,250 in monthly rent from “Georgia Brown” to rent property on Clam Cove Court in Rock Hall, Maryland. In fact, no individual named Georgia Brown occupied the property or paid rent to Pick.
Relying on the false loan application, the lender agreed to fund the construction loan on the condition that Pick personally pay the required down payments, closing costs and prepaid expenses, and that Pick did not have any agreement with Ritchie or Richland Homes, as the seller, that was not disclosed to the lender.
On March 21, 2005, Pick and Ritchie signed a settlement statement, and Pick also signed a borrower’s affidavit, falsely stating the Pick paid $63,901.63 at the closing, when in fact, Pick contributed no cash to the closing. The funds owed by Pick were instead deducted from Richland Homes’ proceeds from the sale. The lender, which would not have approved the loan without Pick paying the full $63,901.63, suffered a loss of $383,178.
Pick faces a maximum sentence of 30 years in prison. U.S. District Judge Richard D. Bennett scheduled his sentencing for February 10, 2016.
In related cases arising from their participation in similar transactions, John L. Davis, age 53, of Chestertown, Maryland, a settlement agent, previously pleaded guilty to conspiracy to commit mail fraud and wire fraud, and is scheduled to be sentenced on January 19, 2016 at 3:00 p.m. Timothy L. Ritchie, age 44, of Annapolis, Maryland has pleaded guilty to making false statements involving his purchase of three lots in St. Michaels, Maryland. Ritchie is scheduled to be sentenced on January 14, 2016, at 10:00 a.m.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.
United States Attorney Rod J. Rosenstein commended the FHFA - OIG and FDIC – OIG for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Kevin V. Di Gregory and Assistant U.S. Attorney Kathleen O. Gavin, who are prosecuting the case.
Benton attorney pleads guilty to bankruptcy fraudRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a Benton attorney pleaded guilty to collecting filing fees from clients without informing the bankruptcy court.
Glay H. Collier II, 53, of Benton, La., entered a conditional guilty plea to one count of bankruptcy fraud before U.S. Magistrate Judge Karen L. Hayes. The plea will become final when accepted by U.S. District Judge Robert G. James. According to evidence presented at the guilty plea, Collier filed records into the bankruptcy court stating that he would accept “No Look” fees as payment for his services. The “No Look” fee caps attorney’s fees in bankruptcy proceedings to $2,800. In excess of that limit, Collier charged up to $281 in filing fees to some clients, which he did not disclose to the court. Between March 2010 and November 2013, Collier filed 983 Chapter 13 bankruptcy cases in Monroe, and during the same time period, he filed 2,160 Chapter 13 bankruptcy cases in Shreveport. In approximately 479 of these cases, Collier fraudulently collected and attempted to collect filing fees.
Collier faces up to five years in prison, three years supervised release and a $250,000 fine. A sentencing date of March 1, 2016 was set.
The FBI and the U.S. Trustee’s Office, Region 5, conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan is prosecuting the case.
Attorney General and Manhattan U.S. Attorney Announce Charges Stemming from Massive Network Intrusions at U.S. Financial Institutions, U.S. Brokerage Firms, Major News Publications and Other CompaniesRead the Press Release
Breaches Included the Largest Theft of Customer Data from a U.S. Financial Institution in History
Defendants Hacked in Furtherance of Securities Market Manipulation Schemes, and Vast Gambling and Payment Processing Schemes
Attorney General Loretta E. Lynch, U.S. Attorney Preet Bharara of the Southern District of New York, Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office and Special Agent in Charge Robert J. Sica of the U.S. Secret Service (USSS) New York Field Office announced today the unsealing of a superseding indictment charging Gery Shalon, aka “Garri Shalelashvili,” “Gabriel,” “Gabi,” “Phillipe Mousset” and “Christopher Engeham,” with orchestrating massive computer hacking crimes against U.S. financial institutions, brokerage firms and financial news publishers, including the largest theft of customer data from a U.S. financial institution in history (the U.S. Financial Sector Hacks). Shalon is charged with committing these crimes with Joshua Samuel Aaron, aka “Mike Shields,” in furtherance of securities market manipulation schemes that Shalon and Aaron perpetrated with defendant Ziv Orenstein, aka “Aviv Stein” and “John Avery” in the United States.
As alleged, Shalon also orchestrated computer network hacks and cyberattacks in furtherance of other major criminal schemes, including unlawful internet casinos and illicit payment processors which Shalon operated with Orenstein. Shalon also owned and controlled an illegal U.S.-based Bitcoin exchange known as Coin.mx. Shalon and Orenstein were arrested in July 2015 by the Israel Police on an indictment that charged the underlying securities fraud, and they remain in custody in Israel pending extradition on those charges. The U.S. Attorney’s Office will seek their extradition to stand trial in the United States on the additional charges announced today. Aaron remains at large. Also announced today is the unsealing of a separate indictment charging Anthony R. Murgio with operating Coin.mx in the United States, and related crimes. Murgio, who was arrested on a complaint in July 2015, will be arraigned before the Honorable Alison J. Nathan.
“As set forth in the indictment, these three defendants perpetrated one of the largest thefts of financial-related data in history – making off with the sensitive information of literally thousands of hard-working Americans,” said Attorney General Lynch. “These charges were made possible in large part because those victims came forward and worked with the Department of Justice to hold the perpetrators accountable. In an age when enormous quantities of vital information are stored in digital format on potentially vulnerable Internet-connected devices, public-private partnerships and information-sharing are more critical than ever. The Department of Justice is committed to protecting the financial data of all our citizens and the financial integrity of our institutions. I’d like to thank the prosecutors and law enforcement professionals who worked tirelessly on this case, and the victims who offered their full cooperation with law enforcement to make these criminal charges possible.”
“Today, we have exposed a cybercriminal enterprise that for years successfully and secretly hacked into the networks of a dozen companies, allegedly stealing personal information of over 100 million people, including over 80 million customers from one financial institution alone,” said U.S. Attorney Bharara. “The charged crimes showcase a brave new world of hacking for profit. It is no longer hacking merely for a quick payout, but hacking to support a diversified criminal conglomerate. This was hacking as a business model. The alleged conduct also signals the next frontier in securities fraud – sophisticated hacking to steal nonpublic information, something the defendants discussed for the next stage of their sprawling enterprise. Fueled by their hacking, the defendants’ criminal schemes allegedly generated hundreds of millions of dollars in illicit proceeds. Even the most sophisticated companies – like those victimized by the hacks in this case – have to appreciate the limits of their ability to uncover the full scope of any cyber-intrusion and to stop the perpetrators before they strike again. If they have been hacked, most likely others have been as well, and even more will be. The best bet to identify, stop and punish cybercriminals is to work closely, and early, with law enforcement. That happened here, and today’s charges are proof of that.”
“Shalon, Aaron and their co-conspirators allegedly robbed victim companies, often for months at a time, stealing the contact information of tens of millions of customers,” said Assistant Director in Charge Rodriguez. “They cloaked themselves in secrecy, but their methods rivaled those of the traditional masked robber. Today’s indictment sheds light on an increasingly complex threat. But just as criminals continue to develop relationships with one another in order to advance their objectives, the law enforcement community has developed a collaborative approach to fighting these types of crimes.”
“This investigation is indicative of the sophistication and complexity of cybercrime and the transnational criminal organizations that are responsible for it,” said Special Agent in Charge Sica. “Transnational cybercriminal organizations operate with impunity regardless of national borders as these criminal organizations seek to profit from information stolen through the unauthorized access to victims’ networks. Through the U.S. Secret Service global network of Electronic Crimes Task Forces, our field offices located overseas and the close cooperation of our foreign law enforcement partners, no cybercriminal is beyond our reach. We will remain relentless in pursuing these criminals wherever they may reside.”
According to the allegations contained in the superseding indictment[1]:
From approximately 2012 to mid-2015, Shalon, working with Aaron and others, orchestrated the U.S. Financial Sector Hacks, stealing personal information of over 100 million customers of the victim companies. Among these, their network intrusion at one bank (Victim-1) resulted in the theft of personal information of over 80 million Victim-1 customers, making it the largest theft of customer data from a U.S. financial institution in history. Shalon, Aaron and their co-conspirators engaged in these crimes in furtherance of other criminal schemes. In particular, in an effort to artificially manipulate the price of certain stocks publicly traded in the United States, Shalon and his co-conspirators sought to market the stocks, in a deceptive and misleading manner, to customers of the victim companies whose contact information they had stolen in the intrusions.
In addition to directing the U.S. Financial Sector Hacks, Shalon directed computer network hacks and cyberattacks against numerous companies outside of the financial sector. Shalon and his co-conspirators engaged in these crimes in furtherance of large-scale criminal businesses that Shalon and Orenstein operated in the United States and other countries. In particular, between approximately 2007 and July 2015, Shalon owned and operated unlawful internet gambling businesses in the United States and abroad; owned and operated multinational payment processors for illegal pharmaceutical suppliers, counterfeit and malicious software (malware) distributors, and unlawful internet casinos; and owned and controlled Coin.mx, an illegal U.S.-based Bitcoin exchange that operated in violation of federal anti-money laundering laws. Nearly all of these schemes, like Shalon’s securities market manipulation schemes, relied for their success on computer hacking and other cybercrimes committed by Shalon and his co-conspirators.
Through their criminal schemes, between in or about 2007 and in or about July 2015, Shalon and his co-conspirators earned hundreds of millions of dollars in illicit proceeds, of which Shalon concealed at least $100 million in Swiss and other bank accounts.
Shalon, Aaron, Orenstein and their co-conspirators operated their criminal schemes, and laundered their criminal proceeds, through at least 75 shell companies and bank and brokerage accounts around the world. The defendants controlled these companies and accounts using aliases, and by fraudulently using approximately 200 purported identification documents, including over 30 false passports that purported to be issued by the United States and at least 16 other countries.
The U.S. Financial Sector Hacks
Between approximately 2012 and August 2014, Shalon and a co-conspirator (CC-1), working at times with Aaron, executed the hacks of the computer networks of Victims 1 through 9. Among other things, in foreign-language electronic communications, during these hacks, Shalon bragged about the size and scope of his securities market manipulation schemes and described to CC-1 his use of the stolen data in furtherance of those schemes. Shalon and CC-1 also discussed expanding their network intrusions to encompass thefts of material non-public information from the financial institutions and other firms they were hacking.
The Securities Market Manipulation Schemes
Since 2011, Shalon, Aaron, Orenstein and their co-conspirators orchestrated multimillion-dollar stock manipulation – or “pump and dump” – schemes to manipulate the price and trading volume of dozens of publicly traded microcap stocks (penny stocks) in order to enable members of the conspiracy to sell their holdings in those stocks at artificially inflated prices. In some instances, Shalon and Aaron caused the companies to become publicly traded in furtherance of the scheme. To do so, Shalon caused privately held companies to engage in “reverse mergers” with publicly traded shell corporations Shalon controlled. Orenstein managed bank and brokerage accounts used in furtherance of the schemes under aliases that he supported with false passports and other false personal identification information.
To artificially manipulate the trading volume and prices of dozens of stocks, among other things, at pre-arranged times, Shalon and Aaron disseminated materially misleading, unsolicited messages by various means – including by email (spam) to up to millions of recipients per day – that falsely touted the stock in order to trick others into buying it. Shalon and Aaron engaged in the U.S. Financial Sector Hacks in part to acquire email and mailing addresses, phone numbers and other contact information for potential victims to whom they could send such deceptive communications. Shalon and his co-conspirators generated tens of millions of dollars in unlawful proceeds from the securities market manipulation schemes.
The Unlawful Internet Gambling Schemes, Hacks and Cyberattacks
From at least in or about 2007 up to and including in or about July 2015, Shalon, Orenstein and their co-conspirators operated unlawful internet casinos in the United States and elsewhere through hundreds of employees in multiple countries. In the United States, the defendants knowingly operated at least 12 unlawful internet casinos (the Casino Companies) which, through their websites, offered real-money casino gambling in violation of federal law and the laws of numerous states, including New York state. Through the Casino Companies, Shalon, Orenstein and their co-conspirators generated hundreds of millions of dollars in unlawful income.
In furtherance of his unlawful internet gambling schemes, Shalon and his co-conspirators engaged in massive hacks and cyberattacks against other internet gambling businesses to steal customer information, secretly review executives’ emails and cripple rival businesses. For example, Shalon orchestrated network intrusions of Victims-10 and -11, companies that provided operating software to Shalon’s internet casinos. In doing so, Shalon sought to, and did, secretly obtain access to the email accounts of senior executives at both companies to ensure that the companies’ work with Shalon’s competitors did not compromise the success of Shalon’s unlawful internet gambling businesses.
The Illicit Payment Processing Scheme and Hack
From at least in or about 2011 until in or about July 2015, Shalon, Orenstein and their co-conspirators operated IDPay and Todur, multinational payment processors for criminals who sought to receive payments by credit and debit card in furtherance of their unlawful schemes. Through these payment processors, Shalon, Orenstein and their co-conspirators knowingly processed credit and debit card payments for, at a minimum, unlawful pharmaceutical distributors, purveyors of counterfeit and malicious purported “anti-virus” computer software, their own unlawful internet casinos and Coin.mx, an illegal U.S.-based Bitcoin exchange owned by Shalon. In doing so, Shalon, Orenstein, and their co-conspirators knowingly processed hundreds of millions of dollars in transactions for criminal schemes, for which they earned a percentage of every transaction.
Beginning in or about 2012, Shalon and his co-conspirators hacked into the computer networks of Victim-12, a U.S. company which assessed merchant risk and compliance for credit card issuers and others, including by detecting merchants that accepted credit card payments for unlawful goods or services. Thereafter, on an ongoing basis, Shalon and his co-conspirators monitored Victim-12’s detection efforts, including by reading emails of Victim-12 employees, so they could take steps to evade detection by Victim-12 of their unlawful payment processing scheme.
The Unlawful Bitcoin Exchange
From in or about 2013 to in or about July 2015, Shalon knowingly owned Coin.mx, which was operated by Murgio in the United States at Shalon’s direction in violation of federal anti-money laundering (AML) registration and reporting laws and regulations. Through Coin.mx, Shalon, Murgio and their co-conspirators enabled their customers to exchange cash for Bitcoins, charging a fee for their service. In total, between approximately October 2013 and July 2015, Coin.mx exchanged millions of dollars for Bitcoins on behalf of its customers.
* * *
Shalon, 31, of Savyon, Israel; Aaron, 31, a U.S. citizen who resides in Moscow; and Tel Aviv; and Orenstein, 40, of Bat Hefer, Israel, are charged with the following offenses, which carry the maximum prison terms listed below:
Count
Defendants
Charge
Maximum Prison Term
One
Shalon and Aaron
Conspiracy to Commit Computer Hacking
five years
Two
Shalon and Aaron
Computer Hacking
five years
Three
Shalon and Aaron
Computer Hacking
five years
Four
Shalon, Aaron and Orenstein
Conspiracy to Commit Securities Fraud
20 years
Five
Shalon, Aaron and Orenstein
Conspiracy to Commit Wire Fraud: Securities Market Manipulation Scheme
20 years
Six to 12
Shalon, Aaron and Orenstein
Securities Fraud
20 years
13
Shalon, Aaron and Orenstein
Wire Fraud
20 years
14
Shalon, Aaron and Orenstein
Identification Document Fraud Conspiracy
20 years
15
Shalon, Aaron and Orenstein
Aggravated Identity Theft
Mandatory two years
16
Shalon and Orenstein
Unlawful Internet Gambling Enforcement Act Conspiracy
five years
17
Shalon and Orenstein
Unlawful Internet Gambling Enforcement Act
five years
18
Shalon and Orenstein
Operation of Illegal Gambling Business
five years
19
Shalon and Orenstein
Conspiracy to Commit Wire Fraud: Unlawful Payment Processing
20 years
20
Shalon
Conspiracy to Operate an Unlicensed Money Transmitting Business
five years
21
Shalon
Operation of an Unlicensed Money Transmitting Business
five years
22
Shalon, Aaron and Orenstein
Money Laundering Conspiracy: Securities Market Manipulation Scheme
20 years
23
Shalon, Aaron and Orenstein
Money Laundering Conspiracy: Internet Gambling and Payment Processing Schemes
20 years
For his alleged conduct, Murgio, 31, of Tampa, Florida, is charged with the following offenses: conspiracy to operate an unlicensed money transmitting business, which carries a maximum prison term of five years; operation of an unlicensed money transmitting business, which carries a maximum prison term of five years; conspiracy to make corrupt payments with intent to influence an officer of a financial institution, which carries a maximum prison term of five years; making corrupt payments with intent to influence an officer of a financial institution, which carries a maximum prison term of 30 years; conspiracy to commit wire fraud, which carries a maximum prison term of 20 years; wire fraud, which carries a maximum prison term of 20 years; and money laundering, which carries a maximum prison term of 20 years.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
U.S. Attorney Bharara praised the investigative work of the FBI and the USSS, and expressed his sincere gratitude to the Office of the State Attorney of the Israel Ministry of Justice’s Department of International Affairs and the Israel National Police, Cyber Unit - Lahav 433, for their support and assistance with the investigation and the ongoing extradition proceedings. He also thanked the U.S. Securities and Exchange Commission, U.S. Immigration and Customs Enforcement-Homeland Security Investigations, the Financial Industry Regulatory Authority, the National Credit Union Administration, the Justice Department’s Office of International Affairs and the Financial Services Information Sharing and Analysis Center, which significantly aided the investigation by facilitating information-sharing among the victim institutions.
The prosecution of this case is being overseen by the U.S. Attorney’s Office of the Southern District of New York’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicole Friedlander, Eun Young Choi and Sarah Lai of the Southern District of New York are in charge of the prosecution. Assistant U.S. Attorney Edward Diskant of the Southern District of New York’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the indictment are merely accusations, and the defendants are 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 indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Attorney General and Manhattan U.S. Attorney Announce Charges Stemming from Massive Network Intrusions at U.S. Financial Institutions, U.S. Brokerage Firms, A Major News Publication, and Other CompaniesRead the Press Release
Loretta E. Lynch, the Attorney General of the United States, Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Robert J. Sica, Special Agent in Charge of the US Secret Service New York Field Office (“USSS”) announced today the unsealing of a superseding indictment charging GERY SHALON, a/k/a “Garri Shalelashvili,” a/k/a “Gabriel,” a/k/a “Gabi,” a/k/a “Phillipe Mousset,” a/k/a “Christopher Engeham,” with orchestrating massive computer hacking crimes against U.S. financial institutions, brokerage firms, and financial news publishers, including the largest theft of customer data from a U.S. financial institution in history (the “U.S. Financial Sector Hacks”). SHALON is charged with committing these crimes with JOSHUA SAMUEL AARON, a/k/a “Mike Shields,” in furtherance of securities market manipulation schemes that SHALON and AARON perpetrated with defendant ZIV ORENSTEIN, a/k/a “Aviv Stein,” a/k/a “John Avery” in the United States. As alleged, SHALON also orchestrated computer network hacks and cyberattacks in furtherance of other major criminal schemes, including unlawful internet casinos and illicit payment processors which SHALON operated with ORENSTEIN. SHALON also owned and controlled an illegal U.S.-based Bitcoin exchange known as Coin.mx. SHALON and ORENSTEIN were arrested in July 2015 by the Israel Police on an indictment that charged the underlying securities fraud, and they remain in custody in Israel pending extradition on those charges. The United States Attorney’s Office will seek their extradition to stand trial in the United States on the additional charges announced today. AARON remains at large. Also announced today is the unsealing of a separate indictment charging ANTHONY R. MURGIO with operating Coin.mx in the United States, and related crimes. MURGIO, who was arrested on a Complaint in July 2015, will be arraigned before the Honorable Alison J. Nathan.
Attorney General Loretta E. Lynch said: “As set forth in the indictment, these three defendants perpetrated one of the largest thefts of financial-related data in history – making off with the sensitive information of literally thousands of hard-working Americans. These charges were made possible in large part because those victims came forward and worked with the Department of Justice to hold the perpetrators accountable. In an age when enormous quantities of vital information are stored in digital format on potentially vulnerable Internet-connected devices, public-private partnerships and information-sharing are more critical than ever. The Department of Justice is committed to protecting the financial data of all our citizens and the financial integrity of our institutions. I’d like to thank the prosecutors and law enforcement professionals who worked tirelessly on this case, and the victims who offered their full cooperation with law enforcement to make these criminal charges possible.”
Manhattan U.S. Attorney Preet Bharara said: “Today, we have exposed a cybercriminal enterprise that for years successfully and secretly hacked into the networks of a dozen companies, allegedly stealing personal information of over 100 million people, including over 80 million customers from one financial institution alone. The charged crimes showcase a brave new world of hacking for profit. It is no longer hacking merely for a quick payout, but hacking to support a diversified criminal conglomerate. This was hacking as a business model. The alleged conduct also signals the next frontier in securities fraud – sophisticated hacking to steal nonpublic information, something the defendants discussed for the next stage of their sprawling enterprise. Fueled by their hacking, the defendants’ criminal schemes allegedly generated hundreds of millions of dollars in illicit proceeds. Even the most sophisticated companies – like those victimized by the hacks in this case – have to appreciate the limits of their ability to uncover the full scope of any cyber-intrusion and to stop the perpetrators before they strike again. If they have been hacked, most likely others have been as well, and even more will be. The best bet to identify, stop and punish cybercriminals is to work closely, and early, with law enforcement. That happened here, and today’s charges are proof of that.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Shalon, Aaron, and their co-conspirators allegedly robbed victim companies, often for months at a time, stealing the contact information of tens of millions of customers. They cloaked themselves in secrecy, but their methods rivaled those of the traditional masked robber. Today’s indictment sheds light on an increasingly complex threat. But just as criminals continue to develop relationships with one another in order to advance their objectives, the law enforcement community has developed a collaborative approach to fighting these types of crimes.”
USSS Special Agent in Charge Robert J. Sica said: “This investigation is indicative of the sophistication and complexity of cybercrime and the transnational criminal organizations that are responsible for it. Transnational cybercriminal organizations operate with impunity regardless of national borders as these criminal organizations seek to profit from information stolen through the unauthorized access to victims’ networks. Through the U.S. Secret Service global network of Electronic Crimes Task Forces, our field offices located overseas, and the close cooperation of our foreign law enforcement partners, no cybercriminal is beyond our reach. We will remain relentless in pursuing these criminals wherever they may reside.”
According to the allegations contained in the superseding indictment[1]:
From approximately 2012 to mid-2015, SHALON, working with AARON and others, orchestrated the U.S. Financial Sector Hacks, stealing personal information of over 100 million customers of the victim companies. Among these, their network intrusion at one bank (“Victim-1”) resulted in the theft of personal information of over 80 million Victim-1 customers, making it the largest theft of customer data from a U.S. financial institution in history. SHALON, AARON, and their co-conspirators engaged in these crimes in furtherance of other criminal schemes. In particular, in an effort to artificially manipulate the price of certain stocks publicly traded in the United States, SHALON and his co-conspirators sought to market the stocks, in a deceptive and misleading manner, to customers of the victim companies whose contact information they had stolen in the intrusions.
In addition to directing the U.S. Financial Sector Hacks, SHALON directed computer network hacks and cyberattacks against numerous companies outside of the financial sector. SHALON and his co-conspirators engaged in these crimes in furtherance of large-scale criminal businesses that SHALON and ORENSTEIN operated in the United States and other countries. In particular, between approximately 2007 and July 2015, SHALON owned and operated unlawful internet gambling businesses in the United States and abroad; owned and operated multinational payment processors for illegal pharmaceutical suppliers, counterfeit and malicious software (“malware”) distributors, and unlawful internet casinos; and owned and controlled Coin.mx, an illegal United States-based Bitcoin exchange that operated in violation of federal anti-money laundering laws. Nearly all of these schemes, like SHALON’s securities market manipulation schemes, relied for their success on computer hacking and other cybercrimes committed by SHALON and his co-conspirators.
Through their criminal schemes, between in or about 2007 and in or about July 2015, SHALON and his co-conspirators earned hundreds of millions of dollars in illicit proceeds, of which SHALON concealed at least $100 million in Swiss and other bank accounts.
SHALON, AARON, ORENSTEIN, and their co-conspirators operated their criminal schemes, and laundered their criminal proceeds, through at least 75 shell companies and bank and brokerage accounts around the world. The defendants controlled these companies and accounts using aliases, and by fraudulently using approximately 200 purported identification documents, including over 30 false passports that purported to be issued by the United States and at least 16 other countries.
The U.S. Financial Sector Hacks
Between approximately 2012 and August 2014, SHALON and a co-conspirator (“CC-1”), working at times with AARON, executed the hacks of the computer networks of Victims 1-9. Among other things, in foreign-language electronic communications, during these hacks, SHALON bragged about the size and scope of his securities market manipulation schemes, and described to CC-1 his use of the stolen data in furtherance of those schemes. SHALON and CC-1 also discussed expanding their network intrusions to encompass thefts of material non-public information from the financial institutions and other firms they were hacking.
The Securities Market Manipulation Schemes
Since 2011, SHALON, AARON, ORENSTEIN, and their co-conspirators orchestrated multimillion-dollar stock manipulation – or “pump and dump” – schemes to manipulate the price and trading volume of dozens of publicly traded microcap stocks (“penny stocks”) in order to enable members of the conspiracy to sell their holdings in those stocks at artificially inflated prices. In some instances, SHALON and AARON caused the companies to become publicly traded in furtherance of the scheme. To do so, SHALON caused privately held companies to engage in “reverse mergers” with publicly traded shell corporations SHALON controlled. ORENSTEIN managed bank and brokerage accounts used in furtherance of the schemes under aliases that ORENSTEIN supported with false passports and other false personal identification information.
To artificially manipulate the trading volume and prices of dozens of stocks, among other things, at pre-arranged times, SHALON and AARON disseminated materially misleading, unsolicited messages by various means – including by email (“spam”) to up to millions of recipients per day – that falsely touted the stock in order to trick others into buying it. SHALON and AARON engaged in the U.S. Financial Sector Hacks in part to acquire email and mailing addresses, phone numbers, and other contact information for potential victims to whom they could send such deceptive communications. SHALON and his co-conspirators generated tens of millions of dollars in unlawful proceeds from the securities market manipulation schemes.
The Unlawful Internet Gambling Schemes, Hacks and Cyberattacks
From at least in or about 2007 up to and including in or about July 2015, SHALON, ORENSTEIN and their co-conspirators operated unlawful internet casinos in the United States and elsewhere through hundreds of employees in multiple countries. In the United States, the defendants knowingly operated at least 12 unlawful internet casinos (the “Casino Companies”) which, through their websites, offered real-money casino gambling in violation of federal law and the laws of numerous states, including New York State. Through the Casino Companies, SHALON, ORENSTEIN, and their co-conspirators generated hundreds of millions of dollars in unlawful income.
In furtherance of his unlawful internet gambling schemes, SHALON and his co-conspirators engaged in massive hacks and cyberattacks against other internet gambling businesses to steal customer information, secretly review executives’ emails, and cripple rival businesses. For example, SHALON orchestrated network intrusions of Victims-10 and -11, companies that provided operating software to SHALON’s internet casinos. In doing so, SHALON sought to, and did, secretly obtain access to the email accounts of senior executives at both companies to ensure that the companies’ work with SHALON’s competitors did not compromise the success of SHALON’s unlawful internet gambling businesses.
The Illicit Payment Processing Scheme and Hack
From at least in or about 2011 until in or about July 2015, SHALON, ORENSTEIN, and their co-conspirators operated IDPay and Todur, multinational payment processors for criminals who sought to receive payments by credit and debit card in furtherance of their unlawful schemes. Through these payment processors, SHALON, ORENSTEIN, and their co-conspirators knowingly processed credit and debit card payments for, at a minimum, unlawful pharmaceutical distributors, purveyors of counterfeit and malicious purported “anti-virus” computer software, their own unlawful internet casinos, and Coin.mx, an illegal United States-based Bitcoin exchange owned by SHALON. In doing so, SHALON, ORENSTEIN, and their co-conspirators knowingly processed hundreds of millions of dollars in transactions for criminal schemes, for which they earned a percentage of every transaction.
Beginning in or about 2012, SHALON and his co-conspirators hacked into the computer networks of Victim-12, a U.S. company which assessed merchant risk and compliance for credit card issuers and others, including by detecting merchants that accepted credit card payments for unlawful goods or services. Thereafter, on an ongoing basis, SHALON and his co-conspirators monitored Victim-12’s detection efforts, including by reading emails of Victim-12 employees, so they could take steps to evade detection by Victim-12 of their unlawful payment processing scheme.
The Unlawful Bitcoin Exchange
From in or about 2013 to in or about July 2015, SHALON knowingly owned Coin.mx, a Bitcoin exchange service, which was operated by MURGIO in the United States at SHALON’s direction in violation of federal anti-money laundering (“AML”) registration and reporting laws and regulations. Through Coin.mx, SHALON, MURGIO, and their co-conspirators enabled their customers to exchange cash for Bitcoins, charging a fee for their service. In total, between approximately October 2013 and July 2015, Coin.mx exchanged millions of dollars for Bitcoins on behalf of its customers.
* * *
SHALON, 31, of Savyon, Israel, AARON, 31, a U.S. citizen who resides in Moscow, Russia, and Tel Aviv, Israel, and ORENSTEIN, 40, of Bat Hefer, Israel, are charged with the following offenses, which carry the maximum prison terms listed below:
Count
Defendants
Charge
Maximum Prison Term
One
SHALON and AARON
Conspiracy to Commit Computer Hacking
5 years
Two
SHALON and AARON
Computer Hacking
5 years
Three
SHALON and AARON
Computer Hacking
5 years
Four
SHALON, AARON, and ORENSTEIN
Conspiracy to Commit Securities Fraud
20 years
Five
SHALON, AARON, and ORENSTEIN
Conspiracy to Commit Wire Fraud: Securities Market Manipulation Scheme
20 years
Six to Twelve
SHALON, AARON, and ORENSTEIN
Securities Fraud
20 years
Thirteen
SHALON, AARON, and ORENSTEIN
Wire Fraud
20 years
Fourteen
SHALON, AARON, and ORENSTEIN
Identification Document Fraud Conspiracy
20 years
Fifteen
SHALON, AARON, and ORENSTEIN
Aggravated Identity Theft
Mandatory 2 years
Sixteen
SHALON and ORENSTEIN
Unlawful Internet Gambling Enforcement Act Conspiracy
5 years
Seventeen
SHALON and ORENSTEIN
Unlawful Internet Gambling Enforcement Act
5 years
Eighteen
SHALON and ORENSTEIN
Operation of Illegal Gambling Business
5 years
Nineteen
SHALON and ORENSTEIN
Conspiracy to Commit Wire Fraud: Unlawful Payment Processing
20 years
Twenty
SHALON
Conspiracy to Operate an Unlicensed Money Transmitting Business
5 years
Twenty One
SHALON
Operation of an Unlicensed Money Transmitting Business
5 years
Twenty Two
SHALON, AARON, and ORENSTEIN
Money Laundering Conspiracy: Securities Market Manipulation Scheme
20 years
Twenty-Three
SHALON, AARON, and ORENSTEIN
Money Laundering Conspiracy: Internet Gambling and Payment Processing Schemes
20 years
For his alleged conduct, MURGIO, 31, of Tampa, Florida, is charged with the following offenses: (1) conspiracy to operate an unlicensed money transmitting business, which carries a maximum prison term of 5 years; (2) operation of an unlicensed money transmitting business, which carries a maximum prison term of 5 years; (3) conspiracy to make corrupt payments with intent to influence an officer of a financial institution, which carries a maximum prison term of 5 years; (4) making corrupt payments with intent to influence an officer of a financial institution, which carries a maximum prison term of 30 years; (5) conspiracy to commit wire fraud, which carries a maximum prison term of 20 years; (6) wire fraud, which carries a maximum prison term of 20 years; and (7) money laundering, which carries a maximum prison term of 20 years.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and the United States Secret Service, and expressed his sincere gratitude to the Office of the State Attorney of the Israel Ministry of Justice’s Department of International Affairs and the Israel National Police, Cyber Unit - Lahav 433, for their support and assistance with the investigation and the ongoing extradition proceedings. He also thanked the SEC, Immigration and Customs Enforcement - Homeland Security Investigations, the Financial Industry Regulatory Authority, the National Credit Union Administration, the Office of International Affairs of the U.S. Department of Justice, and the Financial Services Information Sharing and Analysis Center, which significantly aided the investigation by facilitating information-sharing among the victim institutions.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Nicole Friedlander, Eun Young Choi, and Sarah Lai are in charge of the prosecution.Assistant U.S. Attorney Edward Diskant of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the indictment are merely accusations, and the defendants are 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 indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Asset Manager Sentenced to Two Years in Prison for $5 Million Fraud SchemeRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Max Wagenblast, age 35, of Arlington, Virginia, late on November 9, 2015, to two years in prison, followed by three years of supervised release, for wire fraud in connection with a scheme to steal over $5 million from his company. Judge Chuang also ordered Wagenblast to pay a fine of $25,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
According to the his plea, Wagenblast was employed as an asset manager for a Bethesda company (the company) that was the second largest Special Servicer of commercial real estate mortgages in the United States. As a Special Servicer, the company was responsible for administering defaulted commercial mortgage loans and the real estate securing foreclosed loans. The company performed this service on behalf of the Real Estate Mortgage Investment Conduit (“REMIC”) trust that held the mortgage loans on behalf of the certificate holders of the trust. In its capacity as a Special Servicer, the company collected borrower payments and property cash flow and remitted them to the REMIC trust, which was responsible for distributing those funds to the certificate holders. Wagenblast oversaw both the loans and properties that acted as security for the loans serviced by the company, including the application and utilization of funds generated by the properties he managed.
Wagenblast admitted that he redirected a portion of the funds collected from the properties he managed into the bank accounts of three limited liability companies he controlled. Those redirected funds should have been sent to the company and then forwarded to the REMIC trust bank accounts. Wagenblast obtained these funds in three ways: by sending fake invoices to the property managers and directing them to wire the funds for payment into one of the bank accounts Wagenblast controlled; by creating fake service contracts and again directing the property managers to wire the funds for payment into one of the bank accounts Wagenblast controlled; and by sending the property managers an email requesting that all wires in excess of $10,000 be sent to a bank account Wagenblast controlled.
The company conducted a search of Wagenblast’s work computer and found documents detailing the fraudulent activity, including a spreadsheet detailing each diverted funds transaction that listed the amount taken, the property from where the funds originated, the date of the transaction and the bank account into which the funds were directed. From September 2012 through September 2013, Wagenblast caused over $5 million to be wire transferred into bank accounts he controlled
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bryan E. Foreman, who prosecuted the case.
36 charged in fraud scheme involving staged automobile crashes in the tri-state areaRead the Press Release
Evansville - United States Attorney Josh J. Minkler, today announced federal charges against 36 individuals in an elaborate scheme to defraud insurance companies by staging automobile crashes and filing false police reports. Three SWAT teams and over 70 federal, state and local law enforcement officials served warrants this morning in the tri-state area, apprehending those involved.
“The Burris family is the face of organized crime in the Evansville area,” said Minkler. “My office has a zero-tolerance policy when it comes to those who conspire to steal money and put countless lives at risk through their dangerous scheme.”
The indictment alleges that between 2008 and 2014, Michael W. Burris, Sr. 56, his wife Lisa K. Burris, 53, their sons Justin A. Burris, 26, and David B. Smitha, 38, and others, planned a series of automobile crashes in and around Evansville. They recruited persons to participate in the staged crashes, made false police reports about the crashes, and then filed claims with insurance providers for “injuries” suffered in the crash which were self-inflicted or fabricated.
In several scenarios, members of the Burris family conspiracy acquired an automobile to use in the staged crash and made certain the vehicle was insured or obtained insurance just weeks before the staged crash. They would then recruit someone to crash the vehicle in a remote area, into a tree or other fixed object causing significant damage. After the crash, the driver would leave the scene and other recruited participants waiting nearby would enter the vehicle and wait for emergency personnel to respond. They would then make a false police report and be taken to the hospital for their purported injuries. Vehicles were often loaded with three or four people after the staged crash to maximize insurance claims.
The indictment further alleges Burris Sr. and his conspirators purposely injured the “victims” to create an appearance that they sustained the injuries in the crash. They did this by punching them in the face, cutting their face with a razor blade and using a wire brush on their forehead.
Lisa Burris and other conspirators instructed the crash participants on how to appear injured by not exiting the vehicle under their own power, using emergency medical resources, and running up medical expenses through hospital stays. She had the “victims” submit false insurance claims and would coach them on how to answer questions from the insurance representatives. When the crash participants received their injury claim checks from the insurance companies, it is alleged in the Indictment that Michael Burris, Sr. and the participants would go directly to the bank on which the check was written, get cash, and divide it among the conspirators.
This case was investigated by the United States Secret Service, United States Postal Inspection Service, Evansville Police Department, Indiana State Police, and the Federal Bureau of Investigation. The Vanderburgh County Sheriff’s Office, the United States Marshal Service, and the Bureau of Alcohol Tobacco Firearms and Explosives assisted in the arrest of the 36 persons charged in the indictment today.
"Over the last year and half, the Secret Service has tirelessly pursued justice with the assistance of many other federal, state and local agencies,” said Assistant Special Agent in Charge Paul Dvorak. “Insurance fraud is not a victimless crime. This type of fraud can have a significant detrimental effect on the economy of our community. We are proud that the significant and numerous arrests made here today will have a positive impact on the city of Evansville and hopefully deter similar crimes in the future.”
“The U.S. Postal Inspection Service will continue to strongly pursue its mission of investigating mail fraud crimes and protecting the US Postal Service and its customers,” stated Inspector in Charge, Tommy Coke, Pittsburgh Division, U.S. Postal Inspection Service.
“When I started my career in retail loss prevention over twenty years ago, the Burris family and their associates were one of the first criminal groups I dealt with,” said Evansville Police Chief Billy Bolin. “It would be nice if they learned from their past mistakes, but it appears they’ve just become more sophisticated in their schemes.”
“I’m pleased the state police were able to play a role in advancing this investigation” said Indiana State Police Superintendent Doug Carter. “Financial crimes like this impact insurance premiums for honest people and this particular criminal enterprise also resulted in public safety resources responding to staged crash scenes,” Carter concluded.
According to Assistant U.S. Attorneys Todd S. Shellenbarger and Kyle Sawa who are prosecuting this case for the government, each charge carries a maximum sentence of 20 years in prison, a $250,000 fine and 3 years of supervised release.
An indictment is only a charge and not an indication of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The following individuals were indicted
Michael W. Burris, Sr. Age 56 Evansville, Indiana
Lisa K. Burris Age 53 Evansville, Indiana
David B. Smitha Age 38 Evansville, Indiana
Justin A. Burris Age 26 Evansville, Indiana
Amanda J. Carreno Age 35 Evansville, Indiana
Timothy S. Ivy Age 44 Evansville, Indiana
Michael W. Burris, Jr. Age 30 Evansville, Indiana
Timothy P. Rice Age 38 Evansville, Indiana
Shawn M. Wright Age 21 Henderson, Kentucky
Jordan T. Lawrence Age 21 Evansville, Indiana
Joshua J. Norman Age 25 Evansville, Indiana
Shaun T. Gibson Age 36 Evansville, Indiana
Kyle Blake Lee Smitha Age 20 Evansville, Indiana
Thomas J. Thomas Age 21 Evansville, Indiana
Alyssa R. Vailes Age 22 Evansville, Indiana
Latisha L. Smith Age 36 Evansville, Indiana
Dillon A. Williams Age 22 Evansville, Indiana
Brooke N. Cox Age 32 Evansville, Indiana
Brooke N. Ewers Age 27 Evansville, Indiana
Toni J. Wilson Age 41 Evansville, Indiana
Jerry A. McGill Age 55 Evansville, Indiana
Benjamin W. Widick Age 42 Evansville, Indiana
Lynn M. Smitha Age 34 Evansville, Indiana
Phillip J. Gibson Age 37 Chandler, Indiana
Michelle L. Stuard Age 30 Evansville, Indiana
Ariel R. Pace Age 24 Evansville, Indiana
Ashley N. Hines Age 29 Evansville, Indiana
Crystal D. Uziekalla Age 41 Evansville, Indiana
David W. Uziekalla Age 38 Wadesville, Indiana
Tiffany L. Bowen Age 26 Evansville, Indiana
Shawna M. Morell Age 35 Chandler, Indiana
Jamey L. Grant Age 27 Evansville, Indiana
Ryan Maun Age 28 Evansville, Indiana
Mary E. Houchin Age 36 Evansville, Indiana
Theresa A. Frank Age 31 Boonville, Indiana
Sherry W. Greenwalt Age 41 Evansville, Indiana
Monday 9 November 2015
Woman Who Used Checks Stolen from Elderly Victim while under Supervision in another Fraud Case Gets 58-Month Prison TermRead the Press Release
LOS ANGELES – A woman with a 40-year history of fraudulent conduct who used checks stolen from a woman in a West Hills nursing home to purchase hundreds of dollars in merchandise – a crime she committed while on supervised released in another federal fraud case – was sentenced today to 58 months in federal prison.
Carol Ejdowski, 66, a transient who had recently been residing in Beverly Hills, was sentenced by United States District Judge Dolly M Gee, who imposed a 37-month term for the current bank fraud case and a consecutive 21-month sentence because the offense was committed while Ejdowski was on supervised release.
When she defrauded the elderly victim, Ejdowski was serving a three-year period of supervised released after pleading guilty to passport fraud related to a credit card scam, serving a 63-month federal prison term and being released in late 2012.
In sentencing Ejdowski, Judge Gee said “the facts of this case are particularly despicable.” Pointing to the defendant’s multiple prior convictions for fraud, grand theft and perjury, Judge Gee called Ejdowski “a recidivist of the highest order” who had “shown her disrespect for the law repeatedly.”
Ejdowski pleaded guilty in September 2014 to one count of bank fraud, admitting that she stole checks from the victim that she used to purchase merchandise at Costco and Walmart. Ejdowski was originally scheduled to be sentenced on April 29, but she failed to appear for that hearing and was a fugitive until she was arrested and incarcerated in August.
While Ejdowski admitted in court that she used stolen checks, prosecutors argued that she also used the victim’s credit cards in a scheme that cause $1,925 in losses.
“This case demonstrates the Department of Justice’s commitment to prosecuting those who prey upon the most vulnerable in our community,” said United States Attorney Eileen M. Decker. “Standing alone, the monetary loss in this case did not adequately reflect the gravity of defendant’s crime, but today’s significant sentence should send a message to all those who would seek to victimize the vulnerable.”
Although the low loss amount was low, prosecutors wrote in a sentencing memo that Ejdowski’s “criminal conduct was particularly deplorable because it targeted a defenseless, 70-year-old, half-paralyzed woman who was living by herself in a nursing home/rehab facility.”
In a sentencing memorandum, prosecutors detailed Ejdowski’s history of fraud offenses, with convictions going back to the 1970s.
The latest fraud case against Ejdowski was the result of an investigation by the Federal Bureau of Investigation.
Washington, Pa., Man Pleads Guilty to Selling Prescription DrugsRead the Press Release
PITTSBURGH - A resident of Washington, Pennsylvania pleaded guilty in federal court to charges of possession with intent to distribute and distribution of Oxycodone, Opana and Morphine, all Schedule II controlled substances, and obtaining prescriptions by fraud, United States Attorney David J. Hickton announced today.
Dennis DeVenney, Sr. pleaded guilty to the two felony counts before United States District Judge Cathy Bissoon.
According to information presented to the Court at the guilty plea, Devenney sold controlled substances, Oxycodone, Opana and Morphine, for cash.
Judge Bissoon scheduled sentencing for March 21, 2016. The law provides for a maximum total sentence of 24 years in prison, a fine of $1,250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentence, the court released DeVenney, Sr. on bond.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
The Drug Enforcement Adminstration conducted the investigation leading to the charges in this case.
Wallis Man Convicted of Producing Child PornographyRead the Press Release
VICTORIA, Texas – David Ray McGee, 47, of Wallis, has entered a guilty plea to sexual exploitation of a child, otherwise known as production of child pornography, announced U.S. Attorney Kenneth Magidson. Co-defendant Saralyn Ann Proschko, 46, of Victoria, pleaded guilty earlier this year.
In July 2015, authorities with the Victoria Police Department (VPD) responded to the Texas Department of Criminal Justice (TDCJ) - District Parole Office in Victoria in reference to allegations of possession of child pornography. Officers met with Proschko and discovered an electronic video on her cellular telephone of a juvenile female engaged in a sexual act. Further investigation led to the discovery and charging of Proschko’s boyfriend - McGee - in relation to the allegations.
Today, McGee admitted to sexually assaulting the young girl, who was only five years old at the time.
During the hearing, the court heard that McGee had met Proshko on a dating website. During their conversations, he had indicated he had a sexually fantasy. Soon after, Proshko began texting him photos of herself penetrating the young girl with various sexual objects. Eventually, that led to him sexually assaulting the young girl, during which time she had begged him to stop. In at least one instance, Proshko had actually held the toddler down while McGee assaulted her.
Senior U.S. District Judge John D. Rainey accepted the guilty plea and set sentencing for Feb. 2, 2016, at which time McGee faces a minimum of 15 and up to 30 years in federal prison. Upon completion of any prison term imposed, McGee also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet.
McGee and Proschko were arrested on the federal charges in July 2015 and have been in custody since that time where both will remain pending their sentencing hearing.
The charges are the result of the investigative efforts of Homeland Security Investigations, Texas Attorney General’s Office - ICAC (Internet Crimes Against Children), Houston-Metro ICAC Task Force and the Victoria Police Department.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
U.S. Attorney Message to Service Members and VeteransRead the Press Release
The following appeared in the November 2015 issue of Connecticut Guardian:
As a service member or veteran, you have undoubtedly faced obstacles and challenges both during and after your military service to our Country. The U.S. Attorney’s Office for the District of Connecticut and the U.S. Department of Justice recognize these challenges and our obligation to protect your rights and interests as service members and veterans. For over five years, through our Active Duty and Veterans Committee, we have coordinated with federal, state and local agencies and advocates to help ensure that legal protections of your rights are a reality in Connecticut. We have obtained settlements for veterans and done extensive outreach to military bases, veterans groups, and professional organizations to educate the public about the protections available for service members and veterans.
As we approach Veterans Day, we reiterate our commitment to serve you as you have served our country by outlining our major accomplishments ensuring that service members returning from active duty are not penalized by their civilian employers; that service members and their families overseas do not forfeit their right to vote; and that active duty service members and their families receive the full benefit of the consumer and financial protections provided under law.
Employment Rights and the Uniform Services Employment and Reemployment Rights Act (USERRA)
While you are deployed and working to protect our country, you should be confident that your civilian job will be there when you return home. We enforce the provisions of USERRA to ensure that employment and employment benefits will be reinstated when you return from military service. The provisions of USERRA protect active duty service members and veterans. USERRA regulations apply to virtually all civilian employers: federal and state governments, as well as private employers. Even if you are employed in a temporary job, you may be entitled to USERRA’s protections.
Where employers violate USERRA’s provisions, the Justice Department and the U.S. Attorney's Office can bring an action in federal court on your behalf to obtain injunctive relief, lost wages and benefits, double liquidated damages, as well as attorney fees and costs. Last year, the Justice Department brought actions on behalf of over 10 service members and collected over $300,000 for violations of USERRA. Additionally, several years ago in Connecticut, a federal judge ordered a bank that violated USERRA’s provisions to pay $779,000 in back pay, damages, and attorney’s fees to its employee.
Financial and Consumer Protections -- Servicemembers Civil Relief Act (“SCRA”)
When you are preparing for active duty or are returning from active duty, you should not have to worry about your car being repossessed or your home being subjected to an illegal foreclosure without your knowledge. The provisions of the SCRA protect you by postponing or suspending certain obligations associated with rental agreements, automobile leases, mortgage foreclosures, evictions, security deposits, installment contracts, student loan payments and more. The SCRA also eases financial burdens and provides some relief from credit obligations and court proceedings while you are on active duty.
Where lenders violate SCRA’s provisions, we can bring an action in federal court to obtain injunctive relief and monetary damages. For example, the Justice Department recently settled with five of the nation’s largest mortgage service providers for unlawful foreclosures. Under the settlements, a total of 2,413 service members are eligible to receive over $311 million dollars. Earlier this year, the Justice Department settled a case with a motor vehicle lender which required the lender to pay $9.35 million to service members whose motor vehicles were illegally repossessed. Last year, the Department signed a settlement with a student loan servicer, requiring it to pay $60 million to 77,795 service members for overcharging on student loans.
Voting Rights -- Uniformed and Overseas Citizens Absentee Voting Act (“UOCAVA”)
As citizens of the United States, you have a right to vote in elections for federal offices even when you are deployed. UOCAVA guarantees Americans serving in our uniformed services, their families and U.S. citizens living overseas the right to register and vote absentee in elections for federal office. Its protections are designed to ensure military and overseas voters a meaningful opportunity to request and receive their absentee ballots in time to vote and have their votes counted. Protecting the voting rights of our service members and overseas citizens is one of the highest priorities of the Department of Justice.
The Justice Department vigorously enforces UOCAVA, which requires, among other things, that states and territories transmit requested absentee ballots to military and overseas voters at least 45 days prior to federal elections. Over the years, the Department has gone to court or reached settlement agreements with many states to remedy violations of UOCAVA’s requirements. Since Congress enacted the Military and Overseas Voter Empowerment (MOVE) Act to expand UOCAVA’s protections in 2009, the Department has filed 15 cases and entered numerous out of court agreements to remedy UOCAVA violations and ensure future compliance with its requirements.
For example, prior to the 2014 federal general election in West Virginia, the Department brought a UOCAVA suit and obtained a consent decree to extend the ballot receipt deadline as well as a subsequent court order to count the votes for federal office on ballots submitted by military and overseas voters after the state failed to transmit the final ballots to these voters in a timely fashion.
Americans with Disabilities Act (“ADA”)
The challenges you face on reentry to civilian life may be compounded by issues related to physical injuries, post-traumatic stress disorder, traumatic brain injuries, and/or substance abuse. The Justice Department and U.S. Attorney's Office enforce the ADA, which protects you and your family members from discrimination on the basis of disability. The ADA prohibits discrimination and ensures equal opportunity for persons with disabilities in employment (based on complaints referred from the EEOC), state and local government services, public accommodations, commercial facilities, and transportation. Injunctive relief, compensatory damages, and, attorney’s fees are available. The Justice Department and U.S. Attorney's Office may also assess civil penalties.
The Justice Department and U.S. Attorney's Office have an active ADA docket, composed of a wide variety of cases against state and local governments as well as private entities for failing to make reasonable modifications to assist people with disabilities. Entities that have violated the ADA have been required to pay monetary damages to compensate those impacted. Recently, the U.S. Attorney's Office settled a case with a local business that refused to allow a veteran to enter with her service dog. The U.S. Attorney's Office required the local business to make sweeping changes to its policies, train its staff, and post signs on its property notifying the public of their rights. The Justice Department also recently settled a case against a hotel chain requiring it to pay monetary damages to compensate a veteran and his family who were denied the right to stay in the hotel because of his service animal. Complaints may be filed in a number of ways including by using our complaint form located on www.ada.gov.
Fair Housing Act (“FHA”)
After serving our Country, some of you may have difficulty securing housing because of discrimination. The FHA prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. The FHA authorizes the court to award injunctive relief, monetary damages and, in some cases, civil penalties.
In one case, the Justice Department sued a landlord for violating the FHA because he refused to allow a veteran to keep an assistance animal in his apartment. The landlord settled with the Department and agreed to pay the tenant $20,000 in compensation. In another case, the Department entered into a $300,000 settlement with a mobile home park owner who was alleged to have sexually harassed female tenants of the park, including several women whose husbands were stationed at the nearby army base.
As current or former members of the military, you have sacrificed to protect our nation. It is our privilege to do everything in our power to enforce the federal laws designed to protect you and your families. We encourage you to come forward and notify us of any issues or problems you or your families are facing. We welcome and look forward to hearing from you on how the U.S. Attorney's Office and Justice Department can better help you and your families live securely in this Country that you have helped protect and defend.
Please feel free to call my office with questions, suggestions, and complaints at 203 821 3700 or write to us at Active Duty and Veterans Committee, U.S. Attorney’s Office for the District of Connecticut, Attn: John Fitzgerald, 157 Church Street, 25th Floor, New Haven, CT 06510. You may also visit http://www.justice.gov/crt-military.
On behalf of the U.S. Attorney’s Office of the District of Connecticut: Thank you for your service to our Country. We could not be more proud of your dedication and sacrifice. Please know that we are here to serve you and protect your rights.
Deirdre M. Daly was nominated by President Barack Obama to serve as the 51st U. S. Attorney for the District of Connecticut. Ndidi N. Moses is an Assistant U.S. Attorney and the Civil Rights Coordinator for the Civil Division.
U.S. Attorney Alicia Limtiaco Attends 2015 Ninth Circuit Corrections SummitRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to attend the 2015 Ninth Circuit Corrections Summit, which was held on November 4-6, 2015, in Sacramento, California.
The U.S. District Court Judges from Guam and the Northern Mariana Islands, together with other Federal judges and court staff, U.S. Attorneys, members of the bar, state and federal corrections officials, and deputy state attorneys general participated in the summit. The summit was held in an effort to more effectively manage prisoner litigation within states in the Ninth Circuit, including Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington, Guam and the Northern Mariana Islands.
Some of the topics covered at the summit were segregated housing, health care delivery, prison grievance procedures, strategies for prisoner cases filed in federal court, and class action litigation.
In a press release announcing the summit, Chief Judge Sidney R. Thomas of the Ninth Circuit Court of Appeals stated that "[t]he challenges of prisoner litigation have never been greater, and we need fresh perspectives and initiatives to address these critical issues.” He further stated that “[t]he summit allows all of the stakeholders to share perspectives, gain understanding and discuss how to more effectively manage inmate litigation, from the initial grievance to trial and beyond.”
Two sentenced for heroin, oxycodone traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Two individuals were sentenced in federal court today for heroin and oxycodone trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Marvin Pierre Ledbetter, Jr., 30, of Detroit, Michigan, was sentenced today to 120 months in prison after he pled guilty to one count of “Possession with Intent to Distribute Oxycodone – Aiding and Abetting.” He was discovered in possession of oxycodone pills in Harrison County, West Virginia following an investigation by the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Gregory Morris, Jr., 33, of Duquesne, Pennsylvania, was sentenced today to 96 months and 20 days months in prison for selling heroin near a playground in Monongalia County, West Virginia. He pled guilty in May 2014 to one count of “Distribution of Heroin in within 1,000 feet of a Protected Location” following an investigation by the West Virginia State Police Bureau of Criminal Investigations.
Assistant U.S. Attorney Zelda Wesley prosecuted Morris and Wesley, along with former Assistant U.S. Attorney Shawn Morgan, prosecuted Ledbetter on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Two Traffickers Sentenced to PrisonRead the Press Release
McALLEN, Texas – Two men have been ordered to federal prison following their convictions for conspiring to possess with the intent to distribute cocaine, marijuana and conspiring to launder drug proceeds, announced U.S. Attorney Kenneth Magidson. Francisco Javier Gonzalez, 39, of San Juan, and Osmar Alexander Gonzalez, 35, of Houston, entered guilty pleas Jan. 31, 2013, and March 27, 2013, respectively.
Today, U.S. District Judge Randy Crane ordered Francisco Gonzalez to serve 120 months in federal prison, while Osmar Gonzalez received a 144-month term. The prison terms will be immediately followed by a five-year-term of supervised release.
The investigation revealed that during 2010 and 2011, Francisco Gonzalez and others conspired to transport large amounts of marijuana from the Rio Grande Valley to various destinations via tractor-trailers. During the investigation, law enforcement was able to seize several loads of marijuana, including 1,512 kilograms, 980 kilograms and 890 kilograms on May 10, 2010, Oct. 9, 2010, and Jan. 27, 2011, respectively.
The defendants and others also conspired to distribute multi-kilogram quantities of cocaine from the Rio Grande Valley to Houston and elsewhere. Agents seized more than $96,000 on Aug. 25, 2011 - the proceeds of the narcotics distribution.
Both will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by the Drug Enforcement Administration. Assistant U.S. Attorney James Sturgis prosecuted the case.
Two New Jersey Men Admit Roles in Scheme to Extort Thousands of Dollars from Hudson County ProjectRead the Press Release
NEWARK, N.J. – Two men today admitted extorting thousands of dollars in corrupt payments in connection with arranging approvals to provide landfill materials for a Hudson County Improvement Authority (“HCIA”) project, U.S. Attorney Paul J. Fishman announced.
Gerard Pica, 65, of Middletown, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares to Count Four of an indictment charging him with conspiracy to commit extortion under color of official right. James Castaldo, 60, of Beachwood, New Jersey, pleaded guilty before Judge Linares to Count One of the indictment charging him with conspiracy to commit extortion under color of official right.
According to the documents filed in this case and statements made in court:
The HCIA was overseeing the construction of a nine-hole public golf course located at Lincoln Park West in Jersey City, New Jersey (the “LPW project”). As part of its construction, the LPW project required several hundred thousand cubic yards of soil, fill material and crushed stone to be incorporated into the site, as well as to serve as road bedding during the construction of the golf course. As the overseer of the LPW project, one of the functions of the HCIA – either directly or through a designated contractor – was to serve as a gatekeeper for any material to be delivered to the LPW site. It was the HCIA’s responsibility to solicit, evaluate and decide which contractors’ proposals to accept for the provision of soil and fill material for the LPW project.
Castaldo ran Renda Enterprises LLC, which provided interstate transportation and broker services that moved or received recycled waste and other materials. Pica had been employed by the HCIA as an environmental scientist and had the ability to influence the HCIA’s decisions regarding the selection of contractors to provide soil and fill material to the LPW project. An individual referred to in the indictment as “Employee 1” also had authority over the selection of contractors seeking to provide materials for the project site.
From August 2010 through November 2011, Pica, Castaldo and others schemed to obtain payments from certain contractors in exchange for Pica and Employee 1’s assistance in getting approval for certain companies to provide materials for the LPW project.
Pica admitted that he arranged to obtain corrupt payments from “Individual 3,” the owner of a recycling business in Bayonne, New Jersey. Pica admitted using his authority at the HCIA to ensure that Individual 3 and Individual 3’s company received approval to provide Class B materials, including crushed stone, for the LPW project. As part of the agreement, Individual 3 would pay Castaldo a fee – $2 per cubic yard of fill and soil material delivered to the site – for the benefit of Pica, Castaldo and Employee 1. Pica admitted receiving approximately $6,600 in December 2010 as a partial payment of his share. In addition, Pica admitted to creating a fraudulent invoice from a separate company which he owned for monies purportedly owed to him by Renda Enterprises. Pica admitted that he accepted a check for $6,000 from Renda Enterprises in April 2011, knowing that this amount was further payment of his share which he extorted from Individual 3.
Castaldo admitted that in early 2011, he met with Pica and a person referred to in the indictment as “Individual 1,” who was the owner of a full service environmental consulting firm seeking authorization to dump soil and fill material at the LPW site. Castaldo admitted that he, Pica and Individual 1 agreed upon the amount per cubic yard that Individual 1 would have to pay in return for Pica’s assistance in ensuring Individual 1 would receive authorization to dump the material at the LPW site. Castaldo acknowledged that in July 2011, Renda Enterprises received two payments totaling more than $8,600 as corrupt payments for allowing Individual 1 to dump more than 2,600 cubic yards of fill materials at the LPW site.
The counts to which Pica and Castaldo pleaded guilty both carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Pica and Castaldo are also jointly responsible for forfeiture of $53,861. Sentencing for both defendants is scheduled for Feb. 23, 2016.
U.S. Attorney Fishman credited special agents from the FBI, under direction of Special Agent in Charge Richard M. Frankel in Newark and special agents with the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem, for the investigation.
The government is represented by Assistant U.S. Attorneys David L. Foster and Mark McCarren of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel:
Pica: Edward Plaza, Esq., Newark
Castaldo: Matthew J. Heagen, Toms River
Two KC Men Sentenced for Drug Trafficking, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that two Kansas City, Mo., men were sentenced in federal court today on charges related to drug trafficking and illegally possessing firearms.
Donald Morgan, also known as “Rone,” 43, and Derrick K. Vaughn, 47, both of Kansas City, were sentenced in separate appearances before U.S. District Judge Gary A. Fenner. Morgan was sentenced to 11 years and eight months in federal prison without parole. Vaughn was sentenced to six years in federal prison without parole.
On April 30, 2015, Morgan and Vaughn each pleaded guilty to possessing firearms in furtherance of a drug-trafficking crime. Morgan also pleaded guilty to participating in a conspiracy to distribute cocaine and marijuana and to money laundering. Vaughn also pleaded guilty to possessing crack cocaine with the intent to distribute.
From April 25, 2007, to April 25, 2012, Morgan and Vaughn participated in a conspiracy that distributed one kilogram of cocaine and nine kilograms of marijuana.
Morgan admitted that he was in possession of a Roman Arms rifle and a DPMS 7.62 x 39 rifle in furtherance of the conspiracy. Vaughn admitted that he was in possession of a Pietro Beretta handgun in furtherance of his possession of crack cocaine to distribute.
Morgan also admitted that he purchased a residence in Kansas City, Mo., with the proceeds of drug trafficking. He provided a co-defendant with two checks in order to close on the property, in an effort to conceal the true origin of the funds. Vaughn admitted that he occupied a bedroom in this house, where he possessed eight bags of crack cocaine totaling 2.35 grams, which he intended to distribute, as well as the handgun.
Morgan used this residence and another residence as storage and distribution hubs for his cocaine and marijuana supplies. Morgan specifically admitted that on Feb. 21, 2012, he stored distribution amounts of marijuana and $79,980 in drug proceeds at one of the residences. He admitted that he possessed the rifles within the residence in order to protect the marijuana and the money.
Co-defendant Rudolfo Villareal, also known as “Gordo” and “Rudy,” 41, of Kansas City, Mo., and others supplied Morgan with distribution amounts of cocaine and marijuana. Villareal pleaded guilty to his role in the conspiracy to distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana, and to money laundering, and awaits sentencing.
Four co-defendants in addition to Morgan, Vaughn and Villareal, have pleaded guilty in this case. Paul Tinoco, Sr., 67, of Kansas City, Mo., was sentenced to 15 years in federal prison without parole. Edward M. Sola, 41, of Kansas City, Mo., was sentenced to 10 years in federal prison without parole. James Comer, 37, of Kansas City, Mo., was sentenced to four years in federal prison without parole. Andrea Mabe, 39, of Kansas City, Mo., pleaded guilty and awaits sentencing.
This case is being prosecuted by Assistant U.S. Attorney Catherine Connelly. It was investigated by the FBI, the Kansas City, Mo., Police Department, the Drug Enforcement Administration and IRS-Criminal Investigation.
Two Individuals Sentenced for Endorsing and Cashing Stolen and Fraudulently Obtained United States Treasury ChecksRead the Press Release
Two individuals from the Southern District of Florida were sentenced for endorsing and cashing stolen and fraudulently obtained United States Treasury checks.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Pete Hoggins, 32, was sentenced to 61 months in prison, followed by three years of supervised release. Hani Sobhi Alshaikh, a/k/a “Danny”, 35, was sentenced to 11 months in prison, followed by three years of supervised release. The defendants were also ordered to pay joint and several restitution in the amount of $150,008.05. Hoggins and Alshaikh previously pled guilty to one count of conspiracy to commit forgery and theft of public money, in violation of Title 18, United States Code, Section 371. Hoggins also pled guilty to one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
According to court documents, Alshaikh worked at a gas station in Pompano Beach, Florida. On multiple occasions from December 2011 to January 2014, Hoggins brought Alshaikh stolen and fraudulently obtained Treasury checks to cash at this gas station. Hoggins and Alshaikh forged the payees’ endorsements on the Treasury checks. Alshaikh then deposited those checks into several different business checking accounts that he had opened at various banks in the name of his company, HSA Investment Group.
The total number of victims in the scheme was more than 50, but less than 250. The total amount of intended loss was more than $200,000 but less than $250,000.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Alicia E. Shick.
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.
Two Brooklyn New York Narcotics Dealers Sentenced for Distributing Heroin and Crack Cocaine in RutlandRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Alvin Kinard (a.k.a. “Baby”), 25, and Stephen Morrison (a.k.a. “MJ”), 25, both from Brooklyn, New York, were sentenced by Chief Judge Christina Reiss in U.S. District Court in Burlington. Judge Reiss sentenced Kinard to 48 months imprisonment and sentenced Morrison to 46 months imprisonment. She also sentenced both to three years of supervised release, which will follow their prison sentences. Kinard and Morrison had previously pled guilty to conspiracy to distribute heroin and crack cocaine in the Rutland area.
According to court papers, on September 9, 2013, defendants Kinard and Morrison obtained heroin and crack cocaine in Brooklyn, New York, and began traveling by car from Brooklyn north to Rutland, Vermont with two women from Vermont, one of whom was driving. At Kinard’s and Morrison’s direction, the two Vermont women were carrying over 100 grams of crack cocaine and about 40 grams of heroin, in total. Early that morning, the New York State Police stopped the car for a motor vehicle violation near Albany and seized the drugs. Kinard and Morrison were later charged in Vermont with a longer term drug conspiracy that included many other trips from Brooklyn to Rutland, Vermont.
At the sentencing hearings, Judge Reiss stated that a “common theme” of this conspiracy was “using young women” for “body packing” and having young women addicts “take most of the risk” as “human mules.” Judge Reiss also described the adverse impact of heroin on various Vermont communities.
This case was investigated by the Vermont State Police Drug Task Force, the Federal Bureau of Investigation, and the Drug Enforcement Administration. The United States is represented by Assistant U.S. Attorney Joseph Perella. Kinard is represented by Mary Kehoe, Esq. of Burlington and Morrison is represented by Michael Shklar, Esq. of Newport, New Hampshire.
Twelve Latin Kings Indicted for Drug and Firearms OffensesRead the Press Release
BOSTON – Twelve Springfield-area men, nine of whom were arrested this morning, were charged in U.S. District Court in Springfield with drug distribution and firearms offenses.
“The defendants are alleged leaders and members of the Latin Kings, a criminal organization whose tactics include intimidation, violence and even murder,” said United States Attorney Carmen M. Ortiz. “The charges, and today’s arrests, strike at the core of this organization and seek to bring peace to the neighborhoods they have damaged through drug dealing and violence.”
“Today’s arrests have significantly disrupted one of the most powerful and brutal gangs in western Massachusetts,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “Not only did the FBI’s Western Massachusetts Gang Task Force seize numerous narcotics and firearms, but we prevented specific acts of violence from taking place. The FBI will continue to work with our law enforcement partners to take back our communities from these violent offenders and make our streets safer.”
“So much of the street violence we deal with in this state, and in this country, is the result of the confluence of guns and drugs,” said Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police. “The inclination of gang members to use firearms to protect their drug profits and settle scores requires constant vigilance and aggressive interdiction, such as this investigation, to dismantle these organizations.”
Eric Lopez, 33, of Chicopee, and Francisco Figueroa, 30, of Holyoke, were charged with being felons in possession of firearms; Joseph Ortiz, 22, Jose Cartagena, 37, and Juan Velazquez, 29, of Springfield; Xavier Nazario, 24, Miguel Morales, 23, and Derek Richard, 31, of Holyoke; and Francisco Bermudez, 26, and Norman Andino, 35, of Chicopee, were all charged with distribution of heroin; and Bienvenido Nuñez, 37, of Springfield, and Andrew Cruz, 24, of Springfield, were charged with distribution of cocaine.
According to court documents, the investigation was initiated in October 2014 in an effort to disrupt and dismantle the Latin Kings’ criminal activity in the Springfield and Holyoke areas. The investigation revealed that the twelve defendants are allegedly members of the Latin Kings, a nation-wide gang organization headquartered in Chicago, Ill. It is also alleged that Nuñez is the “enforzador” or enforcer, in charge of security, and Cartagena is the “inca,” or chief, of the Springfield Chapter of the Latin Kings.
The Latin Kings consider fellow gang members to be brothers and sisters, and an act against the interest of one member is an act against the interest of all members. Members and associates of the Latin Kings regularly utilize violence, including homicide and armed assault, in support of drug trafficking activities.
According to court documents, members and associates of the Latin Kings are engaged in the distribution of narcotics, particularly heroin. Furthermore, disputes with rival gangs over criminal activity and drug turf are on the rise and have resulted in serious crimes of violence, including armed assaults with firearms and murder.
The charge of being a felon in possession of a firearm provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The charges of distribution of heroin and cocaine each provide a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $1 million 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.
U.S. Attorney Ortiz, FBI SAC Shaw, Massachusetts State Police Colonel McKeon, Springfield Police Commissioner John Barbieri and Holyoke Police Chief James M. Neiswanger, made the announcement today. The cases were investigated by the Federal Bureau of Investigation=s Western Massachusetts Gang Task Force, the Massachusetts State Police and the Springfield and Holyoke Police Departments. They are being prosecuted by Assistant U.S. Attorneys Todd E. Newhouse and Katharine A. Wagner of Ortiz=s Springfield Office.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Tulare Man Pleads Guilty to Stealing Social Security BenefitsRead the Press Release
FRESNO, Calif. — Larry Ramirez, 52, of Tulare, pleaded guilty today to stealing benefits paid by the United States Social Security Administration (SSA), United States Attorney Benjamin B. Wagner announced.
According to court documents, Ramirez failed to disclose income he had made from owning and operating an auto body repair business in numerous applications to the SSA for benefits. During the process of determining his benefits, he made a false statement to the SSA that he had not worked in over 15 years, which he knew to be false at the time. As a result, and over the course of approximately 15 years, Ramirez stole approximately $90,000 in SSA benefits.
This case is the product of an investigation by the U.S. Social Security Administration, Office of Inspector General. Assistant United States Attorneys Patrick R. Delahunty and Henry Z. Carbajal III are prosecuting the case.
Ramirez is scheduled to be sentenced by United States District Judge Anthony W. Ishii on March 28, 2016. Ramirez faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Tax Preparer to Plead Guilty to Tax and Wire FraudRead the Press Release
PROVIDENCE, R.I. – According to an information and plea agreement filed today in U.S. District Court in Providence, Leon F. Tejada, 50, of Providence, operator of El Centro Multiservicios, LLC, a tax preparation service in Providence, has agreed to plead guilty to federal tax and wire fraud charges, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of IRS Criminal Investigation.
According to the court documents, it is alleged that during tax years 2009 through 2012, Tejada, without the knowledge of his clients, created and falsified clients’ dependents, exemptions, tax credits, deductions and expenses in order to increase the amount of tax refund due to the clients. It is alleged that the scheme resulted in a loss to the United States of $54,440.
It is also alleged that Tejada devised a scheme to divert his clients’ tax refunds through a bank clearing house, at which time, without the knowledge of his clients, a portion of the funds were diverted into his own bank account for his own personal use. It is alleged that Tejada diverted $24,987 into his own bank account.
An information is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The matter was investigated by Internal Revenue Service Criminal Investigation.
The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose.
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St. Croix Man Sentenced to 21 Months in Prison for Possession of Prison Contraband and Possession of Firearm While under IndictmentRead the Press Release
St. Croix, USVI – District Court Chief Judge Wilma A. Lewis on November 5, 2015, sentenced Jahseen Simmonds, 23, to 21 months in prison for possession of prison contraband and possession of a firearm while under indictment, United States Attorney Ronald W. Sharpe and Federal Bureau of Investigation Special Agent-in-Charge Carlos Cases announced today.
Judge Lewis also sentenced the St. Croix resident to serve three years of supervised release, and pay a $300 special assessment and $600 fine. Judge Lewis also ordered Simmonds to obtain his GED and vocational or educational training to obtain a license or certification at least six months before the expiration of his supervised release.
On May 11, 2015, Simmonds pleaded guilty to two counts of possession of prison contraband, and one count of possession of a firearm while under indictment. According to court documents, on or about August 30, 2013, Virgin Islands Bureau of Corrections officers conducted a search of a cell occupied solely by Simmonds. The officers seized two shanks on the top bunk. On April 7, 2014, federal officers conducted a search of a cell occupied by Simmonds and seized a shank that was under his mattress. On January 2, 2015, Virgin Islands Police Department officers observed Simmonds in the Ruby Rouss Housing Complex on St. Croix with a clear plastic bag that contained a green leafy substance. Simmonds admitted to the police that the bag contained marijuana, and he gave the bag to the police. When asked if he had any other contraband, Simmonds ran from the police. The police officers chased and caught Simmonds. Upon searching him, the officers found a loaded .40 caliber semiautomatic handgun, a loaded magazine and a switchblade knife.
The case was investigated by the Virgin Islands Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Rhonda Williams-Henry.
Springfield Sex Offender Pleads Guilty to Child Porn, Faces at Least 15 Years in PrisonRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a prior sex offender in Springfield, Mo., pleaded guilty in federal court today to receiving and distributing child pornography.
Gary Thomas Sheldon, 52, of Springfield, pleaded guilty before U.S. Magistrate Judge David P. Rush to the charge contained in a July 21, 2015, federal indictment.
By pleading guilty today, Sheldon admitted that he received and distributed child pornography over the Internet from Oct. 5, 2014, to July 15, 2015. Sheldon, a registered sex offender, was convicted in federal court of possessing child pornography in January 2001. As a result, Sheldon will be subject to a mandatory minimum sentence of 15 years in federal prison without parole.
According to court documents, law enforcement officers received a cybertip from the National Center for Missing and Exploited Children, which had received the tip from an adult pornography Web site where Sheldon had uploaded an image of child pornography. Law enforcement officers executed a search warrant at Sheldon’s residence on July 15, 2015. Sheldon’s desktop computer and cell phone were seized, and investigators discovered images of child pornography on both devices.
Under federal statutes, Sheldon is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of 40 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI, the Missouri State Highway Patrol and the Southwest Missouri Cybercrime Task Force.
Registered Sex Offender in Kearny County Gets 20 Years on Child Porn ChargeRead the Press Release
WICHITA, KAN. – A registered sex offender living in Kearny County was sentenced Monday to 20 years in federal prison for distributing child pornography, U.S. Attorney Barry Grissom said.
Mark A. Wireman, 44, Lakin, Kan., pleaded guilty in July 2015 to five federal counts of distributing child pornography.
Wireman was indicted in Kansas in February 2015. Prosecutors alleged he used his Gmail account to send a photograph of a toddler being sexually assaulted by an adult to another man in Michigan. Google identified the photo as child pornography and filed a CyberTipline report. Investigators followed an electronic trail to Wireman, who made unauthorized use of his neighbor’s wireless Internet service to send the photograph. On Wireman’s phone, investigators found more child pornography he had distributed. Investigators learned Wiremen and the man to whom Wireman sent child pornography became friends in prison while Wireman was serving time for a sex offense.
Wireman has prior convictions in 2007 and 1994 in Michigan for sex offenses.
Grissom commended the National Center for Missing & Exploited Children, the Wichita Police Department, the Internet Crimes Against Children Task Force, Homeland Security Investigations and Assistant U.S. Attorney Jason Hart for their work on the case.
Ralston Man Sentenced for Manufacturing Explosives Without A LicenseRead the Press Release
United States Attorney Deborah R. Gilg announced that on November 6, 2015, Jeffrey Belmont, 50, of Ralston, Nebraska was sentenced for his conviction for manufacturing explosives without a license. Senior United States District Judge Joseph F. Bataillon sentenced Belmont to six months of imprisonment to be followed by two years of supervised release.
A search of Belmont’s home was conducted on June 24, 2014. Immediately prior to the execution of the search warrant, the defendant told investigators that he had made some fireworks the previous day in a shed behind his house. A search of the shed yielded numerous items associated with the clandestine manufacturing of what are commonly referred to as M-80 style IEDs. Thirty-six fully completed IEDs were located along with an additional twenty-eight partially completed IEDs which just needed fuses. Large quantities of potassium perchlorate and aluminum powder, chemicals used to make flash powder, were also recovered along with spools of fuse and large quantities of cardboard tubes and endcaps used in making the M-80 style IEDs.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms.
Pittsburgh Man Admits Role in Detroit to Pittsburgh Oxycodone Distribution SchemeRead the Press Release
PITTSBURGH - A Pittsburgh resident pleaded guilty in federal court to a charge of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
Max Matthew Guardalabene, 31, pleaded guilty to one count of conspiracy to distribute oxycodone before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that Guardalabene was a lower-level distributor for a Detroit-to-Pittsburgh oxycodone ring operated by Telano White and Brandy Bara.
Judge Fischer scheduled sentencing for 9 a.m. on March 23, 2016. The law provides for a maximum total sentence of 20 years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephen R. Kaufman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Federal Bureau of Investigation, Pennsylvania Attorney General’s Office, Pennsylvania State Police, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Guardalabene.
Oxnard, California Man Pleads Guilty to Possession of Counterfeit Access DevicesRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that MALIK AIULU ANDREWS, age 19, of Oxnard, California, pled guilty to POSSESSION OF FIFTEEN OR MORE COUNTERFEIT ACCESS DEVICES, in violation of Title 18, United States Code, Sections 1029(a)(3) and 2, punishable by up to 10 years imprisonment, up to a $250,000.00 fine or both.
The Indictment alleged that on or about April 24, 2015, within the Eastern District of Oklahoma, the defendant knowingly possessed fifteen (15) or more access devices, which were counterfeit or unauthorized access devices, with said activity affecting interstate commerce.
The charges arose from an investigation by the Oklahoma Highway Patrol and the United States Secret Service.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Melody Nelson represented the United States.
Ohio-Based Tax Return Preparation Business Executive Pleads Guilty to Obstructing the IRSRead the Press Release
A Liberty Township, Ohio, resident pleaded guilty to one count of obstructing and impeding the Internal Revenue Code, announced Acting Deputy Assistant Attorney General Bruce M. Salad of the Justice Department’s Tax Division.
According to court documents, Kyle Wade, 44, was the former vice-president of franchising for Instant Tax Service (ITS), a tax preparation business that claimed to have over 1,100 franchise locations throughout the United States in 2009. Wade formerly owned multiple ITS franchises.
From Jan. 1, 2004 through Nov. 1, 2012, Wade and another individual executed a scheme to obstruct the Internal Revenue Service (IRS), wherein numerous ITS franchises filed false federal income tax returns without the permission of their taxpayer clients and without receiving a valid W-2 form from each client. The false returns included false and inflated sole proprietorship Schedule C income in an attempt to increase the Earned Income Tax Credit refund. Wade and another individual also created and presented false documents with the IRS, such as phony W-2 forms that were created by ITS employees using tax preparation software and various other false IRS forms containing forged signatures.
At his sentencing on a date to be determined later, Wade faces a statutory maximum sentence of three years in prison and a fine of $250,000.
The Tax Division commended the efforts of special agents of IRS – Criminal Investigation, who investigated the case and Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division, and Assistant U.S. Attorney Jessica Knight of the Southern District of Ohio, who are prosecuting the case.
Norwegian Shipping Company and Engineering Officers Convicted with Environmental Crimes and Obstruction of JusticeRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced federal jury in Mobile, Alabama, after a two week jury trial convicted Det Stavangerske Dampskibsselskab AS (DSD) and three employees with violating the Act to Prevent Pollution from Ships (APPS), conspiracy, obstruction of justice, and witness tampering,. DSD is a Norwegian-based shipping company that operates the oil tanker M/T Stavanger Blossom, a vessel engaged in the international transportation of crude oil. Also convicted at trial were three engineering officers, Bo Gao, Xiaobing Chen, and Xin Zhong, employed by DSD to work aboard the vessel. Daniel Paul Dancu a fourth engineer pled guilty in October.
In 2014 DSD and its employees conspired to bypass pollution prevention equipment aboard the M/T Stavanger Blossom and to conceal the direct discharge of approximately 20,000 gallons waste oil and oil-contaminated waste water from the vessel into the sea over a two month period. The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water. International and U.S. law requires that these vessels use pollution prevention equipment to preclude the discharge of these materials. Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard. DSD and the engineering officers were convicted of violating the APPS for failing to record overboard discharges in the vessel’s oil record book and garbage record book, and with obstruction of justice and witness tampering for presenting false documents and deceiving the Coast Guard during an inspection.
DSD could be fined up to $500,000 per count, in addition to other possible penalties. Gao, Chen, and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges
Resident Agent in Charge John Allen with the United States Coast Guard Investigative Service stated, "CGIS is dedicated to holding those individuals and Corporations accountable who violate United States and International law. CGIS will vigorously prosecute anyone who presents false documents to the U.S. Coast Guard or obstructs vessel examinations performed by the U.S. Coast Guard."
United States Attorney, Kenyen R. Brown was pleased with the outcome of the trial. Brown went on to say, "I am pleased with the record of this office in pursuing environmental crimes. We will continue to prosecute corporations and individuals to protect our resources here along the Gulf Coast as well as around the World. We need to ensure that all foreign vessels and corporations comply with U.S. Coast Guard Examinations to ensure these resources are protected."
This case was investigated by the U.S. Coast Guard Sector Mobile, U.S. Coast Guard District Eight, U.S. Coast Guard Investigative Services and the Environmental Protection Agency, Criminal Investigations Division. Assistant U.S. Attorney Michael D. Anderson, with the U.S. Attorney's Office for the Southern District of Alabama, and ECS Trial Attorney Shane N. Waller prosecuted the case.
Norton man sentenced to 7 1/2 years in prison for sexually assaulting minors in HondurasRead the Press Release
A Norton man was sentenced to 7 ½ years in prison for sexually assaulting minors while in Honduras, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio
Corey L. Bryant, 25, pleaded guilty earlier this year to traveling in foreign commerce and engaging in illicit sexual conduct.
Bryant traveled from the United States to Honduras, and engaged and attempted to engage in illicit sexual conduct with three minors at various times between August 2011 and November 2014, according to court documents.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan and Trial Attorney Amy Larson of the Criminal Division’s Child Exploitation and Obscenity Section. The case was investigated by the Cleveland Office of Department of Homeland Security, Homeland Security Investigations (HSI), with assistance from HSI Tegucigalpa and the HSI Transnational Criminal Investigative Unit.
North Charleston Automobile Dealer Sentenced to Prison for Money LaunderingRead the Press Release
Contact Person: Eric Klumb (843) 727-4381
Columbia, South Carolina---- United States Attorney Bill Nettles today announced that Huger resident John Nick, age 60, was sentenced to a year and a day in prison for Money Laundering in violation of 18 U.S.C. §1956 . The sentence was imposed by United States District Court Judge Patrick Michael Duffy. Nick owned and operated Nick’s Auto Sales located at 4154 Rivers Avenue, North Charleston. From 2008 to 2010, Nick took payments of approximately $97,000 in cash from five individuals who were drug dealers or claimed to be drug dealers, all to purchase cars. Nick then covered up the transaction by titling the cars in the name of a nominees or creating false liens to protect the cars from forfeiture for violations of drug laws.
The case was investigated by Special Agents with the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Eric Klumb prosecuted the case.
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Norfolk Man Sentenced to 18 Years in Prison for Tax Fraud SchemeRead the Press Release
NORFOLK, Va. – Ronald Chisholm, 53, of Norfolk, was sentenced today to 218 months in prison, followed by 3 years of supervised release for his convictions on 19 counts of conspiracy, mail fraud, and aggravated identity theft in connection with a scheme to defraud the IRS.
Chisholm was found guilty by a federal jury on July 28, 2015. According to court records and evidence presented at trial, Chisholm’s scheme was discovered in 2013 after a local check cashing business noticed one of its employees had cashed over $2 million in U.S. Treasury checks. The employee of the check cashing business identified Ronald Chisholm as the person who paid her $200 per check to cash the treasury checks in violation of the company’s policies. A subsequent IRS investigation determined that Chisholm, along with unidentified co-conspirators, stole the personal identifying information of numerous people and filed at least 698 fraudulent income tax returns. As a result of these false returns, Chisholm and his co-conspirators received a total of $2.2 million in fraudulent income tax refunds.
Chisholm’s co-conspirators have both already pleaded guilty. Tanya Evans, the employee of the check cashing business, was sentenced to 87 months and Mark J. Jones, Sr., will be sentenced on Nov. 16, 2015 and faces a sentence of 87-102 months.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar. Assistant U.S. Attorney Joseph L. Kosky prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-132.
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Nineteen indicted for conspiracy that brought heroin to Cleveland, then sent it to Ashtabula and ConneautRead the Press Release
A 61-count indictment was filed in federal court charging 19 people for their roles in a drug conspiracy that brought large shipments of heroin to the Cleveland area and then distributed the drug in Ashtabula, Conneaut and Bellaire, Ohio and Wheeling, West Virginia, law enforcement officials said.
Prosecutors are seeking to forfeit 14 firearms, three vehicles, nearly $100,000 in cash and the proceeds of a $50,000 winning lottery ticket seized as part of the investigation.
Indicted are: Rayshone Mitchell, 37, of Euclid; Jermaine King, 39, of Warrensville Heights; T-Shawn Yarber. 35, of Ashtabula; Ashley Washburn, 29, of Ashtabula; John Sabo, 44, of Conneaut; Jeanie Sabo, 44, of Conneaut; Brenda Burdick, 55, of Conneaut; Jacob Payne, 23, of Ashtabula; Laroo Wells, 22, of Ashtabula; Francis Mitchell, 34, of Cleveland; Dawn Perry, 44, of Cleveland; Arthur Ezell, Jr., 24, of Ashtabula, Dymond Williams, 22, of Ashtabula; Julius Mitchell, 35, of Cleveland; Jacob Moser, 25, of Conneaut; Curry Williams, 24, of Ashtabula; Claude Bernard, 24, of Ashtabula; Michael Mlynek, 54, of Powhatan Point and Trayshon Kimbrough, 30.
Rayshone Mitchell and Jermaine King obtained heroin from outside Ohio from early 2014 through this year. Rayshone Mitchell supplied heroin to John and Jeanie Sabo, who in turn transported it to Ashtabula and Conneaut and redistributed it to Yarber, Washburn, Burdick, Payne, Well, Ezell, Dymond Williams, Moser, Curry Williams and Bernard to distribute in those cities. King provided heroin to Perry and Mlynek, who distributed it to individuals in Bellaire, Ohio, and Wheeling, West Virginia, according to the indictment.
Drug proceeds were then transported from those cities back to Rayshone Mitchell and King, according to the indictment.
All 19 defendants are charged in count one with conspiracy to possess with intent to distribute heroin.
Counts 2-24 charge various individuals with distribution of heroin. Counts 25-56 charge various individuals with use of a telephone to facilitate commission of a felony. Count 57 charges Perry with using a residence to store heroin and Count 58 charges Francis Mitchell with the same.
Count 59 charges Rayshone Mitchell with being a felon in possession of a firearm, for having five firearms despite convictions for aggravated robbery with a firearms specification, felonious assault and other convictions.
Count 60 charges Julius Mitchell with being a felon in possession of a firearm, for having two firearms despite convictions for drug trafficking with schoolyard specifications.
Count 61 charges T-Shawn Yarber with being a felon in possession of a firearm, for having a firearm despite convictions for drug trafficking, criminal gang activity and escape.
“These defendants profited off the pain and addiction of others,” said U.S. Attorney Steven M. Dettelbach. “They left behind a trail of broken lives and damaged families from Cleveland to Conneaut, Ashtabula and elsewhere.”
“This investigation demonstrates that the disruption of heroin trafficking is a top priority to DEA and our law enforcement partners,” said DEA Special Agent in Charge Joseph P. Reagan. “We continue to focus on identifying and bringing to justice those individuals that are responsible for the increasing heroin problem in Ohio and across the United States.”
“We’re committed to working together with our partners to stay ahead of this problem,” Ashtabula County Sheriff William Johnson said. “These investigations are lengthy but help us reduce the drug and major crime problems in our county.”
“We are thankful for the state and federal partnerships we have that assist us in removing drug dealers from our community,” said Capt. Jeff Orr, commander of the Trumbull Ashtabula Group Law Enforcement Task Force.
This case is being prosecuted by Assistant U.S. Attorneys Henry F. DeBaggis and Daniel J. Riedl and following an investigation by the Drug Enforcement Administration, the Ashtabula Police Department, the Ashtabula County Sheriff’s Office and the Trumbull Ashtabula Group Law Enforcement Task Force, with assistance from the Federal Bureau of Investigation, the Belmont County Sheriff’s Office, the Conneaut Police Department, the Cleveland Heights Police Department, the Ohio State Highway Patrol, the Cleveland Division of Police, the Cuyahoga County Sheriff’s Office and the Euclid Police Department.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Newark Man Sentenced to Incarceration for 14 RobberiesRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kent Buckson, age 36, of Newark, Delaware, was sentenced today by United States District Court Judge Sue L. Robinson to 70 months incarceration for 14 robberies, eight occurring in Delaware, three in Pennsylvania and three in Maryland.
According to statements made at the sentencing hearing and documents filed in court, over an approximate six-week period beginning in June 2014, in a tri-state area Buckson robbed six stores, three pharmacies, and five banks, as follows:
DATE
LOCATION
June 8
7-Eleven, Elkton, MD
June 10
Lampost Liquors
June 12
7-Eleven, 100 Four Seasons Parkway, Newark, DE
June 13
7-Eleven 284 Christiana Road, Newark, DE
June 15
Rite Aid, Bear, DE
June 17
Wawa, Newark, DE
June 18
Sunoco Mini-Mart, Chadds Ford, PA
June 19
WSFS, Bear, DE
July 5
Wells Fargo, Lancaster, PA
July 8
PNC Bank, Glen Mills, PA
July 10
PNC Bank, Wilmington, DE
July 17
Rite Aid, Millsboro, DE
July 17
Rite Aid, Delmar, MD
July 23
National Penn Bank, Rising Sun, MD
In each of the store robberies, Buckson wore a mask and brandished a knife. In the two pharmacy robberies of July 17, 2014, committed four hours apart, Buckson robbed the clerks of approximately 1,236 Oxycodone pills, having a value of over $4,000.00.
In each of the five bank robberies and the two pharmacy robberies of July 17, 2014, Buckson disguised himself as a woman and presented the teller/clerk a note threatening a gun and the shooting of the teller/clerk. In addition, to the value of the Oxycodone pills, Buckson’s robberies resulted in financial losses of $25,250.00. When Buckson was arrested, $31,125.00 was recovered from the robbery at the National Penn Bank in Rising Sun, Maryland.
Following the sentencing, Charles M. Oberly, III, United States Attorney for the District of Delaware, stated, “This serious multi-state crime spree was ended and Buckson apprehended in Newark, Delaware on July 24, 2014, due to the swift and cooperative efforts of the Delaware State Police, Pennsylvania State Police, Maryland State Police, Elkton, Maryland Police Department, and Delmar, Maryland Police Department.”
“A dangerous criminal has been brought to justice after the determined work of investigators. The work of law enforcement is only as good as the partnerships we create and maintain, and this case proves that to be true,” said Kevin Perkins, Special Agent in Charge of the FBI in Wilmington.
This case was investigated by the Delaware State Police, Pennsylvania State Police, Maryland State Police, Elkton, Maryland Police Department, Delmar, Maryland Police Department, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Edmond Falgowski.
Ministry Volunteer Sentenced to More than Seven Years in Prison for Engaging in Illicit Sexual Conduct with Honduran MinorsRead the Press Release
An Ohio man was sentenced today to 90 months in prison for sexually abusing three Honduran minors, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio.
Corey L. Bryant, 26, of Norton, Ohio, was a volunteer at two different homeless ministries in Honduras that provided housing and supportive services for impoverished children. Bryant admitted that between August 2011 and November 2014, he traveled between the United States and Honduras 10 times. Bryant further admitted that while serving as a resident volunteer at one of these ministries and teaching fourth grade at a local private school, he repeatedly sexually abused three Honduran minors who resided at these ministries. On Aug. 7, 2015, Bryant pleaded guilty to three counts of engaging in illicit sexual conduct abroad as a U.S. citizen.
The investigation was conducted by the Immigration and Customs Enforcement-Homeland Security Investigations Cleveland Field Office. Trial Attorney Amy E. Larson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Michael Sullivan of the Northern District of Ohio 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.
McAllen Area Marketer Sentenced in Health Care Fraud SchemeRead the Press Release
McALLEN, Texas ‐ A marketer for several area home health agencies has been ordered to federal prison following her conviction of conspiracy to commit health care fraud for her role in a scheme to defraud the Medicare program, announced U.S. Attorney Kenneth Magidson. Martha Lidia Flores, 51, of Pharr, pleaded guilty Aug. 28, 2015, admitting to engaging in a kickback scheme of exchanging referrals of Medicare beneficiaries for money.
Today, U.S. District Judge Randy Crane, who accepted the plea today, handed Flores a sentence of 24 months in federal prison to be immediately followed by three years of supervised release. She was further ordered to pay $267,981.16 in restitution.
From Nov. 15, 2010, to July 9, 2012, Flores issued 11 illegal kickback checks to co-conspirator Argentina Cavazos, 57, of Hidalgo, in exchange for referrals of Medicare beneficiaries. The information was then used by home health care companies to bill Medicare. Cavazos previously pleaded guilty to illegal remunerations for her role in the scheme and was sentenced to six months of home confinement and three years of probation.
Flores admitted to using the patient information she bought from Cavazos to create fraudulent referral forms to submit to the numerous home health companies where she was employed. Claims were subsequently filed with Medicare based on the fraudulent referral forms.
Flores admitted she forged the signatures of physicians on the referral forms, knowing that the physicians did not authorize the need for home health services and/or that the beneficiaries did not need or qualify for home health services. Flores also admitted that she was illegally compensated for the patient referrals.
Previously released on bond, Flores was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by the U.S. Department of Health and Human Services ‐ Office of Inspector General and the FBI. Assistant U.S. Attorney Michael Day is prosecuting the case.
Manhattan U.S. Attorney Announces Charges Against Three Individuals for Participating in Large-Scale Stolen Identity Refund Fraud Tax SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Shantelle P. Kitchen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”), announced today the unsealing of a criminal complaint charging three defendants with participating in a large-scale tax refund scheme that used stolen identities to file fraudulent returns to obtain fraudulent tax refund checks. TRISTON PHILLIP, GREGORY MERCADO, a/k/a “George Merchant,” and JOSUE TORRES are charged in a tax fraud scheme involving millions of dollars in claimed fraudulent returns. PHILLIP, MERCADO, and TORRES were charged in a complaint unsealed today. MERCADO was arrested in Rhode Island, where he appeared in federal court, and PHILLIP and TORRES were arrested in the Bronx and will appear in Manhattan federal court today.
According to the Complaint[1]:
From at least in or about 2011 up to and including in or about November 2015, PHILLIP, MERCADO, and TORRES conspired and engaged in a scheme to steal the names, dates of birth, and social security numbers of individuals, which the defendants then used to file fraudulent income tax returns that claimed tax refunds to which the defendants were not entitled.
PHILLIP, 31, MERCADO, 28, and TORRES, 36, are each charged with one count of conspiracy to steal government funds, which carries a maximum sentence of five years in prison, theft of government funds, which carries a maximum sentence of 10 years in prison, and one count of aggravated identity theft in connection with the tax fraud scheme, which carries a mandatory sentence of two years in prison, to be served consecutively to any other sentence imposed. In addition, TORRES is also charged with one count of theft and receipt of stolen mail, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the Court.
Mr. Bharara praised the outstanding investigative work of IRS-CI and thanked the United States Postal Inspection Service for their assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Alex Rossmiller is in charge of the prosecutions.
The charges and allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Man Who Put Gun to Girlfriend’s Head Sentenced to 77 Months in Federal PrisonRead the Press Release
WICHITA, KAN. - A Wichita man who was arrested after putting a gun to his girlfriend’s head was sentenced Monday to 77 months in federal prison on a firearm charge, U.S. Attorney Barry Grissom said.
Teagan C. Gulley, 35, Wichita, Kan., pleaded guilty to one count of unlawful possession of a firearm following a felony conviction. In his plea, he admitted that Wichita police officers responding to a report of domestic violence saw him pointing a gun at his girlfriend. He was arrested and officers seized a .45 caliber handgun. He was a previously convicted felon at the time and he was prohibited by federal law from possessing a firearm.
Grissom commended the Wichita Police Department and Assistant U.S. Attorney Matt Treaster for their work on the case.
Las Cruces Resident Sentenced to Ten Years for Trafficking Heroin in Doña Ana CountyRead the Press Release
ALBUQUERQUE – Esther Soliz, 51, of Las Cruces N.M., was sentenced today in Las Cruces federal court to ten years in federal prison followed by five years of supervised release for heroin trafficking charges in connection with five cases filed in 2013, as the result of a multi-agency investigation into drug trafficking in Doña Ana County, N.M.
Soliz, together with a Mexican national and 19 other Las Cruces residents, were charged with heroin trafficking offenses in five indictments filed in Nov. 2013, as a result of a multi-agency investigation led by the FBI that targeted the heroin trafficking activities of Jovita Belmonte-Gonzalez in Doña Ana County. Belmonte-Gonzales, 46, a Mexican national from Ciudad Juarez, Chihuahua, Mexico, was named as the lead defendant in four of five indictments which charged her with supplying heroin to five drug trafficking organizations that distributed heroin in Doña Ana County.
The lead defendant, Belmonte-Gonzalez, pled guilty to heroin trafficking charges in four of the five cases in June 2014, and admitted conducting frequent heroin transactions with her co-defendants between June 2013 and Oct. 2013. Court records reflect that Belmonte-Gonzalez typically negotiated heroin sales by telephone from Juarez and her co-defendants traveled from Doña Ana County to Juarez where they purchased the heroin from her and later distributed the drugs in Doña Ana County. Belmonte-Gonzales faces a mandatory minimum of ten years in prison and a maximum of life in prison, and will be deported after she completes her prison sentence. She remains in federal custody pending her sentencing hearing, which has yet to be scheduled.
Soliz entered a guilty plea to the indictment on Dec. 5, 2014, and admitted conspiring, purchasing and transporting heroin for Belmonte-Gonzalez to distribute in Doña Ana County from Sept. 25, 2013 through Oct. 27, 2013.
All 21 of the defendants arrested as a result of the investigation have entered guilty pleas. Nineteen defendants have been sentenced, and the remaining two are currently awaiting sentencing hearings.
These cases are being prosecuted by Assistant U.S. Attorney E. Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office. The investigation leading to the charges in the four cases was led by the Las Cruces office of the FBI in collaboration with U.S. Customs and Border Protection, the U.S. Border Patrol, the Las Cruces office of the DEA, the U.S. Marshals Service, the Las Cruces Police Department and the Doña Ana County Sheriff’s Office.
The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Las Cruces Man Sentenced to Fourteen Years for Violating Federal Narcotics Trafficking LawsRead the Press Release
ALBUQUERQUE – Mario Orlando Jude Serrano, 34, of Las Cruces, N.M., was sentenced today in federal court to 168 months in prison followed by three years of supervised release for his methamphetamine trafficking conviction.
Serrano was arrested on Dec. 19, 2012, on a criminal complaint charging him with conspiracy and possession of methamphetamine with intent to distribute on Dec. 18, 2012, in Doña Ana County, N.M. According to the criminal complaint, on Oct. 18, 2012, HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force officers executed a traffic stop on Serrano’s vehicle based on information from Homeland Security Investigations (HSI) that Serrano was trafficking methamphetamine from Truth or Consequences, N.M., to Las Cruces. Further investigation revealed that Serrano and his wife were carrying quantities of methamphetamine inside their body cavities when they were stopped by law enforcement officers on Oct. 18, 2012.
Serrano was subsequently indicted on Dec. 11, 2013, and charged with conspiracy to possess methamphetamine with intent to distribute on Oct. 18, 2012, possession of methamphetamine with intent to distribute from Oct. 18, 2012 through Oct. 22, 2012, and being a felon in possession of firearms and ammunition on Oct. 18, 2012. All crimes alleged in the indictment took place in Doña Ana County. Serrano was prohibited from possessing firearms or ammunition because of his previous felony convictions of possession of a controlled substance, felon in possession of a firearm, distribution of marijuana, burglary and receiving stolen property.
On July 15, 2014, Serrano pled guilty to the indictment and admitted that on Oct. 18, 2012, a total amount of 106.9 grams of pure methamphetamine was recovered from inside his and his wife’s bodies. Serrano further admitted that on Oct. 18, 2012, law enforcement officers executed a search warrant at a house where Serrano had been staying and found a handgun and ammunition which belonged to Serrano. Serrano admitted that it was illegal for him to possess a firearm and ammunition because he had been convicted of multiple felonies.
This case was investigated by the Las Cruces offices of the DEA, HSI and the Bureau of Alcohol, Tobacco, Firearms and Explosives, the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force and the Las Cruces Police Department. Assistant U.S. Attorneys Renee L. Camacho and Terri J. Abernathy of the U.S. Attorney’s Las Cruces Branch Office prosecuted this case.
The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Lakeland Teacher Pleads Guilty to Attempted Child EnticementRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that Alecia Kay Dotson (46, Lakeland) has pleaded guilty to attempted child enticement. She faces a mandatory minimum sentence of 10 years, up to life, in federal prison.
According to court documents, on June 28, 2015, officers from the Lakeland Police Department responded to a call from the mother of an 11-year-old boy. The mother had viewed her son’s text messages, saw sexual texts, and confronted her son. The child advised that the text messages were from Dotson, his teacher at Highlands Grove Elementary School. Law enforcement officers took over the child’s cellphone and continued communicating with Dotson. During her previous communications with the child, and again with law enforcement posing as the child, Dotson made graphic sexual comments and discussed performing specific sexual acts with the child. Dotson made arrangements to meet the child at the movies where she planned to engage in sex acts with him in her car. The boy told the officers he was nervous and scared of Dotson.
On June 30, 2015, when Dotson arrived at the Lakeland movie theater to meet the child, she was arrested. Officers located a pink .380 caliber semi-automatic pistol located inside her vehicle’s glove compartment. During her interview with law enforcement, Dotson explained that she had started out in a “caring” relationship with the child and was like a “mother” figure to him. She stated that the relationship had progressed to a “crush” and then to “romance.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Lakeland Police Department. It is being prosecuted by Assistant United States Attorney Amanda C. Kaiser.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.justice.gov/psc.
Justice Department Sues Lakewood, Colorado, Apartment Complex for Discriminating Against Families with ChildrenRead the Press Release
The Justice Department filed a lawsuit today against the owners and manager of the Westland Apartments (Westland), a 28-unit apartment complex in Lakewood, Colorado, alleging that they have discriminated against families with children in violation of the Fair Housing Act.
The lawsuit, filed in the U.S. District Court for the District of Colorado in Denver, alleges that the defendants have implemented a policy of generally not allowing families with children to live in the front building at Westland, and generally restricting them to apartments in the rear building instead. The suit was filed against Roger and Eileen Loecher, who own Westland, and Miriam Yehudah, the resident property manager.
“Apartment owners cannot limit where children live in their apartment complexes,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “If an apartment is within their budget and meets their needs, the family, not the landlord, should be able to decide whether it is appropriate for them.”
“The Fair Housing Act ensures that all Americans have equal access to housing, a basic human need,” said U.S. Attorney John F. Walsh of the District of Colorado. “This case involved a shocking and direct violation. The complaint filed in federal district court demonstrates that the U.S. Attorney’s Office, working with our partners at the Civil Rights Division of the Department of Justice and the U.S. Department of Housing and Urban Development, will not allow those who rent properties to discriminate against families with children.”
The lawsuit arose from a complaint filed with the Department of Housing and Urban Development (HUD) by the Denver Metro Fair Housing Center, a non-profit organization that works to promote equal housing opportunities in the Denver metropolitan area. The center sent testers posing as prospective renters to Westland to determine whether they were complying with the Fair Housing Act. The center’s testing revealed that Westland’s property manager told prospective renters that families with children were generally placed in apartments in the rear building, and did not offer prospective renters with children the opportunity to consider available apartments in the front building. After investigating the complaint, HUD determined that Westland was violating the Fair Housing Act and issued a charge of discrimination. After one of the parties chose to have the charge litigated in federal court, the matter was referred to the Justice Department.
“Families looking for a safe place to call home shouldn’t have that housing limited to certain units of a complex,” said HUD Assistant Secretary Gustavo Velasquez of Fair Housing and Equal Opportunity. “That kind of steering is not only unfair – it is against the law. HUD will continue to work with the Justice Department to take action when the rental policies of housing providers violate the rights of families with children.”
The suit seeks monetary damages for the Fair Housing Center and other persons who were harmed by the defendants’ conduct, civil penalties and a court order barring future discrimination and requiring additional preventive measures.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Individuals who believe they may have been discriminated against at Westland because they have children, or who may have other information about this lawsuit should contact the Justice Department toll-free at 1-800-896-7743, mailbox 92, or e-mail the Justice Department at [email protected]. Westland is located at 9905 West 21st Avenue in Lakewood.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Persons who believe that they have experienced unlawful housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743, e-mail [email protected] or contact the Department of Housing and Urban Development at 1-800-669-9777.
Loecher Complaint
Justice Department Convenes Summit on Digital Currency and the BlockchainRead the Press Release
SAN FRANCISCO – The U.S. Department of Justice sponsored a day-long conference today on digital currency at the Federal Reserve Bank in San Francisco, announced Acting U.S. Attorney Brian J. Stretch. The event brought together approximately 175 participants involved with digital currency and blockchain—the public ledger of all bitcoin transactions. With the goal of identifying and examining effective strategies to reduce criminal activity on digital currency platforms, the conference was attended by representatives from law enforcement, government regulators, major financial institutions, technology companies, legislative staff, non-profits, and universities.
The summit represents a large scale outreach by government enforcement and regulators on the one hand, and industry participants on the other, to discuss common goals. Today’s formal program included four panels that described emerging issues in digital currency from the perspective of: (1) the digital currency industry, (2) law enforcement, (3) regulators, and (4) the blockchain industry.
Acting U.S. Attorney Brian J. Stretch gave the keynote address. “As emerging technologies such as digital currency and block chains expand into new and legitimate applications, it becomes all the more critical for industry leaders and government agencies to share insights and perspectives in order to combat the illicit use of these technologies,” said Mr. Stretch. “The exchange of ideas at today's summit is an important step toward allowing creative thinkers to responsibly develop innovative tools to service the world economy.” Mr. Stretch recognized many of the participates in the conference who, he pointed out, included Assistant U.S. Attorneys from other districts around the country.
“FinCEN [Financial Crimes Enforcement Network] was the first regulator to address virtual currency.” said FinCEN Director Jennifer Shasky Calvery. “But we only opened the door for the hundreds of other questions beyond our anti-money laundering perspective. It is vitally important that government regulators and law enforcement agencies engage with the leaders of the virtual currency sector to make sure we understand each other. Working together will benefit all sides.”
The summit was planned by the Digital Currency Task Force, a multi-agency task force comprised of the U.S. Attorney’s Office for the Northern District of California, the U.S. Secret Service, the Federal Bureau of Investigation, the Department of Homeland Security, and local partners, and based in San Francisco. The U.S. Attorney’s Office in the Northern District of California is one of a number of districts that has developed an expertise in investigating and prosecuting crimes using digital currency, the dark net, and related technologies.
Jasper Pain Clinic Physician Pleads Guilty to Illegally Dispensing NarcoticsRead the Press Release
BIRMINGHAM -- A Vestavia Hills physician and owner of a Jasper neurology and pain clinic pleaded guilty today in federal court to illegal drug distribution charges for dispensing narcotic painkillers without a legitimate medical reason, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
Dr. MUHAMMAD WASIM ALI, 51, pleaded guilty before U.S. District Judge L. Scott Coogler to 10 counts of unlawfully distributing controlled substances "outside the scope of professional practice and not for a legitimate medical purpose" to three people working undercover with law enforcement. Ali owns and practiced at the Walker Rural Health Care/Jasper Neurological Care clinic. Following his March arrest, Ali voluntarily surrendered his DEA Controlled Substances Registration, which enabled him to write prescriptions. Ali’s sentencing date has not been set.
According to the charges and Ali’s plea, he dispensed 1,100 oxycodone pills to three undercover officers between August 2014 and November 2014 without conducting acceptable medical examinations or requesting and/or reviewing medical records. Ali’s medical files for the three individuals listed multiple falsified examinations and multiple falsified and baseless diagnoses, according to the plea agreement.
“Proper use of prescribed opioids for pain management is an important part of the practice of medicine, but abuse of these drugs is deadly,” Vance said. “Alabama leads the nation in the number of per capita prescriptions for opioid painkillers, and prescription-drug abusers often shift to heroin abuse. This tragic trend contributes to our epidemic overdose death rates,” she said. “My office and our law enforcement partners are working to ensure that doctors don’t turn into illegal drug dealers.”
“The use, abuse and distribution of opioid-based controlled pharmaceutical drugs are at epidemic proportions in Alabama and across the United States,” Morris said. “Unfortunately, a small number of physicians have abandoned their Hippocratic oath and responsibilities to their patients and communities. Blinded by the allure of greed, deadly and highly addictive pharmaceutical drugs were distributed without regard. The abuse of opioid-based drugs can, and often does have deadly consequences,” he said. “The DEA is committed to protecting our communities from the destruction that comes from drug abuse. Today's court actions should send a clear message to anyone who illegally distributes drugs that law enforcement will work tirelessly in the pursuit of justice and to protect our most important resources -- our communities, children and families.”
Ali was scheduled to go to trial today on a 36-count indictment that included the 10 counts of dispensing controlled substances without a legitimate medical purpose to undercover officers, 26 similar counts of dispensing controlled substances without a legitimate medical purpose to patients, plus two counts of illegally possessing with intent to distribute controlled substances, mostly opioid painkillers. He reached a plea agreement with the U.S. Attorney’s Office on Friday.
As part of that agreement, Ali pleaded guilty to the 10 counts of prescribing oxycodone without a legitimate medical purpose, consented to forfeit $2,450 to the government as proceeds of that illegal activity, and to pay a fine of $85,000. In exchange, the government agreed to dismiss the remaining counts in the indictment. Further, in the plea agreement, the parties agree that Dr. Ali should be sentenced to 30 months in prison. Judge Coogler accepted Ali’s guilty plea today, but reserved his decision on whether to accept the 30-month prison sentence until Ali’s sentencing hearing. The agreement between Ali and the government is a binding plea agreement, so either party may withdraw from it if the court does not accept the stipulated sentence.
Ali was one of three Birmingham-area physicians charged this spring as part of DEA's Operation Pilluted in Alabama, Arkansas, Louisiana and Mississippi, which focused on reducing trafficking and abuse of pharmaceuticals.
Last month, U.S. District Judge Virginia Emerson Hopkins sentenced a Birmingham physician, PETER ALAN LODEWICK, 73, to four years’ probation for illegally supplying controlled substances. She also prohibited him from ever seeking reinstatement of his DEA registration. Lodewick, a physician at Lodewick Diabetes Center on Montclair Road, pleaded guilty to one count of assisting someone else in acquiring the narcotic painkiller, oxycodone, by "misrepresentation, fraud, forgery, deception, and subterfuge."
In September, Judge Hopkins sentenced ERNEST ALBERT CLAYBON, 72, a physician in Midfield, for distributing methadone without a legitimate medical purpose. She sentenced him to four years' probation, fined him $20,000 and ordered him to surrender his medical license and his DEA registration.
The DEA, Internal Revenue Service, Criminal Investigation, and the Alabama Law Enforcement Agency investigated the case, which Assistant U.S. Attorneys Chinelo Diké-Minor, Robin Beardsley Mark and Elizabeth A. Holt are prosecuting.
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Independence Man Pleads Guilty to Stealing $247,000 from EmployerRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former financial comptroller of a North Kansas City, Mo., business pleaded guilty in federal court today to a wire fraud scheme in which he embezzled more than $247,000 from his employer over five years.
John S. Kruse, 48, of Independence, Mo., pleaded guilty before U.S. District Judge Dean Whipple to wire fraud.
Kruse was employed as the financial comptroller of BCC Merchant Solutions, a North Kansas City firm that provides electronic payment systems, e-commerce systems, business capital and marketing services to other companies.
By pleading guilty today, Kruse admitted that he engaged in a scheme to steal at least $247,508 from BCC Merchant Solutions from April 2010 until his resignation in July 2014. Kruse made at least 213 unauthorized wire transfers from his employer’s bank account into his personal bank account. Through his scheme, Kruse embezzled $5,776 in 2010; $36,989 in 2011; $71,868 in 2012; $76,225 in 2013; and $56,648 in 2014.
Kruse used the money to pay for extravagant trips for his family to Las Vegas, Nev., and to Disneyworld. He spent $50,934 at convenience stores and for gasoline; $41,197 on entertainment; $138,186 for groceries and general merchandise; $65,416 through PayPal; $49,105 for travel and leisure; $49,773 for miscellaneous; and $50,934 for cash.
As the financial comptroller, Kruse was in charge of paying out sales commissions and bank reconciliations, along with keeping records within QuickBooks. In the course of his job, Kruse was authorized to access BCC Merchant Solutions’ bank account. To hide his embezzlement, Kruse manipulated the QuickBooks records to falsely reflect that the money he transferred into his account was being used elsewhere. Kruse falsified who the deposits were made to, indicating they were payments made on sales commissions and bank reconciliations.
Under federal statutes, Kruse is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Kruse must also forfeit to the government a money judgment of $247,508. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Secret Service and the North Kansas City, Mo., Police Department.
Huntington woman sentenced on Federal heroin chargeRead the Press Release
HUNTINGTON, W.Va. – A Huntington woman was sentenced today in federal court in Huntington, West Virginia, to two years and nine months in federal prison for participating in a heroin distribution conspiracy in 2012 and 2013, announced United States Attorney Booth Goodwin. Pricilla Lee Dylan, 21, had previously entered a guilty plea to maintaining a residence for the purpose of distributing and using heroin.
Between November of 2012 and March of 2013, Dylan was the tenant of an apartment located at 1231 10th Avenue in Huntington. During that period, Dylan allowed others to store heroin at her apartment after it was transported to Huntington from Detroit. Dylan also allowed others to distribute heroin from her apartment to various customers.
On March 8, 2013, agents with the Huntington FBI Drug Task Force executed a search warrant at Dylan’s apartment. During the search, agents seized heroin, a .32 caliber revolver, ammunition, and other items associated with the sale of heroin.
The Huntington FBI Drug Task Force conducted the investigation. Assistant United States Attorney Joseph F. Adams is responsible for the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Heroin and Cocaine Dealer Sentenced to 18 1/2 Years in PrisonRead the Press Release
NORFOLK, Va. – Allen Andre Brown, 36, of Portsmouth, was sentenced today to 222 months in prison for conspiracy to distribute cocaine and heroin. In connection with this conviction, Brown forfeited $3,365 in U.S. Currency, a para-ordnance .45 caliber semi-automatic pistol, ammunition, and is subject to a monetary judgment of $555,850.
Brown pleaded guilty on May 20, 2015. According to court documents, Brown manufactured, distributed and possessed in excess of 13 kilograms of cocaine and 478 grams of heroin from approximately November 2013 to November 2014. After an investigation into Brown’s drug conspiracy, and a controlled purchase, a search warrant was executed at Brown’s Portsmouth residence. During the execution of the warrant, officers recovered 181 grams of heroin, 37 grams of cocaine, a digital scale, a security camera, thousands of dollars in U.S. currency, a .45 caliber semi-automatic pistol, and ammunition. Brown admitted to profiting in excess of $5,000 per kilogram of cocaine and the approximate street value of the drugs he sold throughout the conspiracy was in excess of a half a million dollars.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; and Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s (DEA) Washington Office, made the announcement after sentencing by U.S. District Judge Mark S. Davis. Special Assistant U.S. Attorney John F. Butler and Assistant U.S. Attorney Joseph E. DePadilla prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-54.
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Henderson County, Kentucky, Man Sentenced to Ten Years in Prison for Human TraffickingRead the Press Release
Recruited minors through a social networking website to engage in commercial sex acts
OWENSBORO, Ky. – A Henderson County, Kentucky, man was sentenced today in U.S. District Court by Chief Judge Joseph H. McKinley Jr., to ten years in prison after pleading guilty to human trafficking for recruiting two minors to engage in commercial sex acts, announced U.S. Attorney John E. Kuhn, Jr.
“Prosecution of those who exploit the young and vulnerable in our community is a top priority of this Office,” stated U.S. Attorney Kuhn. “We know that every instance of human trafficking forces the victims into a crucible of suffering. We also know this crime is occurring far more than it’s being reported. I hope today’s sentence not only sends a message to potential traffickers, but also shines a light on this underreported and heinous crime.”
According to the plea agreement, beginning in March 2014, defendant Jathar Williams, who was then 31 years old, made contact with a female who was then 15 years old, through Tagged, a social networking website. Williams arranged to meet the 15-year-old female and her 17-year-old female friend. Williams picked them up in Evansville, Indiana, and drove them to his residence in Henderson and told the minor females he could help them make between $700 and $800 a day performing commercial sex acts.
Williams admitted that between March 16, 2014 and March 21, 2014, he drove the two minor females to the Sugar Creek Inn in Henderson where he arranged for men to come to the hotel to engage in sex acts with the two minor females in exchange for money.
Williams admitted that he knowingly recruited, enticed, harbored, transported, provided, obtained, and maintained by any means, the two minor females, who had not attained the age of 18 years, and caused the minors to engage in commercial sex acts.
This case was prosecuted by Assistant United States Attorney Amanda Gregory and was investigated by the Federal Bureau of Investigation (FBI) and the Henderson, Kentucky Police Department.