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Thursday 5 November 2015
Woman Who Held Disabled Adults Captive in Subhuman Conditions Sentenced to Life Plus 80 YearsRead the Press Release
PHILADELPHIA - Linda Weston, 55, of Philadelphia, PA, was sentenced today to life plus 80 years in prison. Weston pleaded guilty on September 15, 2015 to all charges in a racketeering and hate crimes case that involved holding disabled adults captive in locked closets, basements, and attics in Philadelphia’s Tacony section and in other states. Weston pleaded guilty to racketeering conspiracy, kidnapping resulting in the death of the victim, forced human labor, involuntary servitude, multiple counts of murder in aid of racketeering, hate crime, violent crime in aid of racketeering, sex trafficking, kidnapping, theft of government funds, wire fraud, mail fraud, use of a firearm in furtherance of a violent crime, and false statements. In addition to the prison term, U.S. District Court Judge Cynthia M. Rufe ordered restitution to the Social Security Administration of $273,463, and a $19,600 special assessment.
From approximately 2001 through October 2011, Linda Weston and her co-conspirators lured mentally disabled individuals into locations rented by Weston, Jean McIntosh, Eddie Wright and others in Philadelphia, Pennsylvania, Killeen, Texas, Norfolk, Virginia, and West Palm Beach, Florida. Weston and the co-conspirators targeted mentally challenged individuals who were estranged from their families. Once Linda Weston convinced them to move in, she became their representative payee with Social Security and began to receive their disability benefits and in some instances, their state benefits. On one occasion, Weston and one of her co-defendants took the social security and identification documents from a victim by force and then used the funds for her own and Weston Family purposes.
Weston, Jean McIntosh, Eddie Wright and others confined their victims to locked rooms, basements, closets, attics, and apartments. While confined, the captives were often isolated, in the dark, and sedated with drugs placed in their food and drink by Weston and other defendants. When the individuals tried to escape, stole food, or otherwise protested their treatment, Weston and others punished them by slapping, punching, kicking, stabbing, burning and hitting them with closed hands, belts, sticks, bats, and hammers or other objects, including the butt of a pistol. Some victims endured the abuse for years, until October 15, 2011, when Philadelphia Police officers rescued them from the sub-basement of an apartment building in the city's Tacony section. The enterprise victimized six disabled adults and four children.
In April 2005, Weston and a co-defendant targeted victim Donna Spadea. They brought Donna Spadea to a home at 2211 Glenview Avenue, in Philadelphia. Donna Spadea was kept in the basement with the other victims, fed a substandard diet, and not allowed to use the bathroom. On June 26, 2005, Donna Spadea was found dead in the basement. Weston ordered other members of the household to move Donna Spadea's body to a different location before calling law enforcement.
In 2008, victim Maxine Lee was living with the family. Maxine Lee was beaten when she tried to escape or when she begged for food and never received medical attention for any of her injuries. After Weston moved the enterprise to Virginia in 2008, Weston confined Maxine Lee inside a kitchen cabinet and an attic for several months. Maxine Lee subsequently died of bacterial meningitis and starvation in November of 2008. Weston ordered other members of the household to move Maxine Lee's body to a bedroom and stage the scene before calling law enforcement. The next day the family left for Philadelphia.
Weston’s daughter, Jean McIntosh, and co-defendant Eddie Wright have already pleaded guilty. Co-defendants Gregory Thomas, Sr., and Nicklaus Woodard are awaiting trial.
The case was investigated by the FBI, the Social Security Administration Office of Inspector General, IRS Criminal Investigations, the Philadelphia Police Department, and the Philadelphia District Attorney’s Office with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ West Palm Beach Field Office. It is being prosecuted by Assistant United States Attorneys Richard P. Barrett and Faithe Moore Taylor.
Wilmington Man Sentenced to 240 Months for Interstate Transportation of Women in Support of ProstitutionRead the Press Release
RALEIGH - United States Attorney Thomas W. Walker announced RANDOLPH JOHNSON SPAIN, 26, was sentenced yesterday by Senior United States District Judge James C. Fox to 240 months imprisonment.
SPAIN was found guilty after trial by jury in January, 2015, of Interstate Transportation in Support of Prostitution on two separate occasions. The evidence at trial indicated SPAIN met and wooed a woman for several months, then took her to Myrtle Beach, SC, where he told her he was a pimp and she would be his prostitute or “face the consequences.” Thereafter, he controlled that woman, as well a second woman who testified at trial, through violence, and took both women to Virginia and other states for prostitution. The investigation revealed SPAIN also controlled and exploited additional women.
SPAIN was sentenced to 240 months’ imprisonment, the statutory maximum. The term of imprisonment is to be followed by 10 years’ supervised release.
Investigation of this case was conducted by the Wilmington Police Department, New Hanover County Sheriff’s Office, and the United States Department of Homeland Security.
Watertown Man Sentenced to 18 Years in Prison for Armed RobberyRead the Press Release
SYRACUSE, NEW YORK – Yarbrough Latulas, 31, of Watertown, NY, was sentenced today to serve 216 months imprisonment followed by 3 years of supervised release in connection with the armed robbery of a convenience store in Watertown, announced U.S. Attorney Richard S. Hartunian. On May 22, 2015 Latulas was found guilty of conspiracy to interfere with interstate commerce by robbery, interference with interstate commerce by robbery, and using and carrying a sawed-off shotgun during and in relation to a crime of violence, following a five day jury trial in United States District Court in Syracuse. The sentence imposed today included an enhancement for obstruction of justice based upon the defendant’s false testimony during the trial.
The evidence at trial established that on July 31, 2013, Yarbrough Latulas and Robert Williams acted together when they entered the Sunoco mini-mart at 1222 Washington Street, Watertown, New York where Latulas stole money and tobacco products while Robert Williams pointed a sawed-off 12 gauge shotgun at the store clerk. Robert Williams pled guilty to participating in the armed robbery and will be sentenced on November 12, 2015.
This prosecution resulted from an investigation conducted by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, Syracuse, New York, the Watertown Police Department and the Metro-Jefferson Drug Task Force. The case was prosecuted by Assistant United States Attorneys Ransom P. Reynolds and Nicolas Commandeur.
U.S. Trustee Program Reaches $81.6 Million Settlement with Wells Fargo Bank N.A. to Protect Homeowners in BankruptcyRead the Press Release
Settlement Addresses the Bank’s Errors Affecting Nearly 68,000 Accounts of Homeowners in Bankruptcy
The Department of Justice’s U.S. Trustee Program has entered into a national settlement agreement with Wells Fargo Bank N.A. (Wells Fargo) requiring Wells Fargo to pay $81.6 million in remediation for its repeated failure to provide homeowners with legally required notices, thereby denying homeowners the opportunity to challenge the accuracy of mortgage payment increases. These failures violated federal bankruptcy rules that took effect in December 2011 and imposed more detailed disclosure requirements to ensure proper accounting of fees and charges on homeowners in bankruptcy.
Bankruptcy Rule 3002.1 requires mortgage creditors to file and serve a notice 21 days before adjusting a Chapter 13 debtor’s monthly mortgage payment. Wells Fargo acknowledges that it failed to timely file more than 100,000 payment change notices (PCNs) and failed to timely perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of homeowners in bankruptcy between Dec. 1, 2011, and March 31, 2015. Under the settlement, Wells Fargo also will change internal operations and submit to oversight by an independent compliance reviewer. The proposed settlement has been filed in the U.S. Bankruptcy Court for the District of Maryland, where it is subject to court approval.
“I am pleased that Wells Fargo has acted responsibly by accepting accountability for its deficient bankruptcy practices, agreed to compensate affected homeowners for those deficiencies and committed to making necessary improvements in its bankruptcy operations,” said Director Cliff White of the U.S. Trustee Program. “When creditors fail to comply with the bankruptcy laws and rules, they compromise the integrity of the bankruptcy system and must be held accountable. Transparency in the process is of paramount importance. Homeowners in bankruptcy have the right to proper and timely notices, particularly when they are being asked to pay more. The U.S. Trustee Program remains diligent in its effort to hold financial institutions that disregard the law accountable for their actions.”
Settlement Terms
Wells Fargo agrees to pay a total of $81.6 million to homeowners who were in bankruptcy between Dec. 1, 2011, and March 31, 2015, and who were affected by Wells Fargo’s failure to timely file PCNs and escrow statements, including:
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$53.6 million will be paid to more than 42,000 homeowners whose payments increased as to which Wells Fargo failed to timely file a PCN with the court. The payment will be in the form of a credit to the homeowner’s mortgage account in a lump sum amount, which averages $1,254 per homeowner and varies depending on the homeowner’s mortgage balance. More than 70 percent of the total payments will go to homeowners who have mortgage balances under $300,000. These payments will be made regardless of whether homeowners actually paid the increased amount.
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An estimated $10 million will be paid by crediting homeowners’ accounts at the end of their bankruptcy cases if, upon a detailed review of the accounts, it is determined the homeowners were not fully compensated through the initial crediting process described above. Wells Fargo estimates that 15 to 20 percent of homeowners who receive the initial payments will be due additional amounts at case closing.
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$1.5 million will be refunded in cash to about 3,000 homeowners where notices of decreases in monthly payments were not timely provided and the homeowners paid more than the actual amount due.
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$1 million will be refunded in cash to about 2,400 homeowners who satisfied escrow shortages by making a lump sum payment, but whose monthly payments did not decrease to account for the lump sum payment.
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$4.5 million will be paid by crediting the mortgage escrow accounts of about 6,000 homeowners who did not receive timely escrow statements. Wells Fargo will credit the amount of any increase in escrow shortage that was incurred between the time Wells Fargo should have performed the analysis and the time it actually did perform the analysis. As a result, homeowners will not be responsible for any increase in the escrow shortage stemming from Wells Fargo’s failure to timely perform the escrow analysis.
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$4 million will be paid to about 12,000 homeowners by crediting mortgage accounts in the amount of $333, where Wells Fargo failed to timely perform an escrow analysis that would have resulted in a PCN being filed and the homeowner is not already receiving remediation for a missed or untimely PCN.
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$4 million will be refunded in cash to about 6,000 homeowners who did not receive timely escrow statements and whose escrow accounts contained surpluses that Wells Fargo had not refunded or credited toward the next year’s escrow payment.
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$3 million in remediation to about 8,000 homeowners has already been completed by Wells Fargo for certain violations.
In addition to the monetary remediation, Wells Fargo will make changes to internal procedures to prevent recurrence of the violations. These changes include improvements to its computer platform, improvements to employee training and oversight and implementation of quality control processes to ensure the accuracy and timeliness of PCNs and escrow statements.
The settlement resolves any actions that could be brought by the U.S. Trustee Program for the covered conduct, but does not limit the rights of any homeowner or other third party to take action against Wells Fargo.
Wells Fargo and the U. S. Trustee Program have selected Lucy Morris of Hudson Cook LLP, to serve as an independent reviewer who will verify that Wells Fargo complies with the settlement order. The independent reviewer will file periodic public reports with the bankruptcy court. Wells Fargo will pay all costs associated with the compliance review, including the compensation of the independent reviewer.
Homeowners with questions about the settlement may contact Wells Fargo at 1-800-274-7025.
Director White commended the U.S. Trustee Program team who expertly investigated, litigated and settled this matter, including Deputy Director and General Counsel Ramona Elliott, Senior Trial Attorney Diarmuid Gorham, National Creditor Enforcement Coordinator Gail Geiger, Assistant U.S. Trustee Catherine Stavlas and Trial Attorney Kelley Callard.
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The U.S. Trustee Program has 21 regions and 93 field office locations.
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U.S. Attorney’s Office for the SDFL Hosts Collaborative Symposium to Prevent and Combat Cyber CrimeRead the Press Release
Yesterday, the U.S. Attorney’s Office for the Southern District of Florida hosted a symposium to combat cyber crimes with participation from high ranking officials with the Federal Bureau of Investigation and U.S. Secret Service, as well as approximately eighty representatives from some of the district’s largest companies, hospitals and academic institutions.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, made the announcement.
Cyber crimes continue to evolve and pose a significant threat to our nation and the privacy and economic security of American consumers and businesses. In order to derail and block cyber intrusions, it is imperative that businesses, companies and institutions report any suspected breach of a network system, identify and notify victims, minimize the impact of the intrusion and work with law enforcement to prevent and combat cybersecurity threats. The mission of law enforcement is to thwart cyber attacks, protect trade secrets, safeguard valuable data and prosecute those who seek to steal from and cripple corporations, medical facilities and academic institutions. Federal law enforcement agencies have joined forces with private entities to protect business ventures and the countless consumers, students and patients who benefit from the services offered by our nation’s industry and business leaders.
“The virtual theft of personal consumer data and other valuable business information is a threat to companies of all shapes and sizes,” stated U. S. Attorney Ferrer. “By bringing together the business and law enforcement communities, we intend to foster our mutual and compelling interest in developing comprehensive and collaborative strategies to prevent and combat cyber attacks. It is our hope that companies and businesses report intrusions and other types of cyber attacks to law enforcement so that we can continue to protect individual citizens and companies that are too often victimized by cybercrime.”
“Cyber is a vector of attack that touches every FBI program and is a means by which criminals of all sorts accomplish their aims. Through similar meetings we hope to build the kind of public and private partnerships to one day predict and prevent cyber attacks, rather than reacting after the fact,” said FBI SSA Jason Manar.
Mr. Ferrer commended the collective efforts of the FBI, USSS, corporations, businesses, hospitals and academic institutions to combat cyber crimes. To report a cybercrime or cybersecurity threat, please visit www.ic3.gov or contact the USSS at (305) 863-5000. To learn more about how to protect your business and consumers from cyber threats, visit www.us-cert.gov.
Two Sentenced to Prison for over $7.2 Million in FraudRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron today sentenced Brian Newton (58, New Smyrna Beach) and Victoria Snow (55, Clearwater) for their role in defrauding more than 60 victims out of over $7.2 million. Newton was sentenced to 15 years and 8 months in federal prison, and Snow was sentenced to 4 years and 9 months’ imprisonment. They were both ordered to pay more than $7.2 million in restitution. A federal jury convicted Newton and Snow on July 20, 2015.
According to evidence presented at trial, Newton and Snow worked on behalf of Dataforce International, Inc. Beginning in 2003, Dataforce had a contract to “factor” its invoices at Amerifactors Financial Group. “Factoring” is a financial transaction by which a business sells its accounts receivables, such as invoices, to a third party (called a factor) at a discount. Accounts receivable are created when a business performs services or sells goods to a client. The factor provides financing to the seller of the invoice in the form of an advance. Once an invoice has been factored by a business, the business will typically arrange to have the client pay the third party factor directly.
In 2003, Newton and a business partner established a factor by the name of Prestige Funding. To fund its factoring, Prestige Funding solicited investors. In total, the company raised more than $8 million from over 60 investors to be used to factor invoices.
As part of their scheme, Newton and Snow submitted a series of invoices for factoring to Amerifactors that were inflated and that did not reflect work that had been performed by Dataforce. In addition, the two engaged in “double factoring,” which involved submitting the same Dataforce invoices for factoring to both Amerifactors and Prestige Funding. By executing this scheme, Newton and Snow were able to defraud Amerifactors, Prestige Funding, and the investors of Prestige Funding out of more than $7.2 million. Of that amount, Newton diverted over $3 million into his personal bank account.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Roger B. Handberg.
Two Men Charged with Drug and Firearms OffensesRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Kyle Eugene Gordon, age 27, of Chambersburg, and Reginald L. Lomax, Jr., age 32, of York, were indicted separately by a federal grand jury yesterday in Harrisburg on drug and firearm offenses.
According to U.S. Attorney Peter Smith, Gordon is charged with being a felon unlawfully in possession of a firearm, possessing heroin with intent to distribute, and possession of a firearm in furtherance of drug trafficking, during April 2014 in Franklin County.
The investigation was conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the Franklin County Drug Taskforce. Prosecution is assigned to Assistant U.S. Attorney Eric Pfisterer.
Lomax, Jr. is charged with being a person unlawfully in possession of a firearm, possessing crack cocaine with intent to distribute, and possession of a firearm in furtherance of drug trafficking, during December 2014 in York County.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the York City Police Department. Prosecution is assigned to Assistant U.S. Attorney James T. Clancy.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty for Gordon and Lomax under federal law is 20 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Two Former Rabobank Traders Convicted for Manipulating U.S. Dollar, Yen LIBOR Interest RatesRead the Press Release
A federal jury convicted two former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) derivative traders – including the bank’s former Global Head of Liquidity & Finance in London – today for manipulating the London InterBank Offered Rates (LIBOR) for the U.S. Dollar (USD) and the Yen, benchmark interest rates to which trillions of dollars in interest rate contracts were tied. Five former Rabobank employees have now been convicted in the Rabobank LIBOR investigation.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division and Assistant Director in Charge Paul Abbate of the FBI’s Washington Field Office made the announcement.
“Today’s verdicts illustrate the department’s successful efforts to hold accountable bank executives responsible for this global fraud scheme,” said Assistant Attorney General Caldwell. “This investigation—which also resulted in the recent conviction of a bank executive in the U.K.—exemplifies the department’s work with our international partners to protect our global markets from fraud. The verdicts also demonstrate the department’s ongoing efforts to hold individuals who use their corporate positions to commit fraud personally responsible for their actions.”
“The department will continue to pursue aggressively those involved in illegal schemes that undermine the integrity of financial markets,” said Assistant Attorney General Baer. “And we will hold individuals criminally accountable for directing illegal corporate behavior.”
“These convictions make clear that bank executives and traders will be held accountable for manipulating world interest rates for their own personal benefit,” said Assistant Director in Charge Abbate. “Today’s verdict is a testament to the dedication of the special agents, analysts and prosecutors who worked tirelessly to uncover manipulation and fraud in the global financial system.”
After a four-week trial, a jury in the Southern District of New York found Anthony Allen, 44, of Hertsfordshire, England, and Anthony Conti, 46, of Essex, England, guilty of conspiracy to commit wire and bank fraud and substantive counts of wire fraud.
As the trial evidence showed, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world and reflecting the rates those banks believe they would be charged if borrowing from other banks. At the time relevant to the charges, LIBOR was calculated for 10 currencies at 15 maturities, ranging from overnight to one year, and was published by the British Bankers’ Association (BBA), a London-based trade association, based on submissions from a panel of 16 banks, including Rabobank. Allen, Conti and Paul Robson, who previously pleaded guilty to the conspiracy charge, each determined Rabobank’s LIBOR submissions on various occasions.
LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. Rabobank invested in various derivatives contracts that were directly affected by the relevant LIBOR rates on a certain dates. If the relevant LIBOR moved in the direction favorable to the defendants’ positions, Rabobank and the defendants benefitted at the expense of the counterparties. When LIBOR moved in the opposite direction, the defendants and Rabobank stood to lose money to their counterparties.
Evidence at trial established that Allen, who was Rabobank’s global head of liquidity and finance and the manager of the company’s money market desk in London, oversaw a system in which Rabobank employees who traded in these LIBOR-linked derivative products influenced the employees who submitted Rabobank’s LIBOR contributions to the BBA. These traders asked Allen, Conti, Robson and others to submit LIBOR contributions that would benefit the traders’ or the banks’ trading positions.
Sentencing is scheduled for March 10, 2016.
In addition to Allen and Conti, three other former Rabobank employees have been convicted in the Rabobank LIBOR investigation. Robson, Lee Stewart and Takayuki Yagami each pleaded guilty to one count of conspiracy in connection with their roles in the scheme. Two other former Rabobank employees, Tetsuya Motomura, 42, of Tokyo, and Paul Thompson, 48, of Dalkeith, Australia, have also been charged. Rabobank entered into a deferred prosecution agreement with the department on Oct. 29, 2013, and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.
The case was investigated by special agents, forensic accountants and intelligence analysts in the FBI’s Washington Field Office. The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antitrust Division. The Criminal Division’s Office of International Affairs and Deputy Chief Daniel Braun and Assistant Chief Brent Wible of the Criminal Division’s Fraud Section are thanked for their substantial assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad. The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, played a major role in the LIBOR investigation. The Securities and Exchange Commission also played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation. The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
This prosecution is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Two Charged with Conspiracy to Retaliate Against Witness in Federal Trial of Prominent 1-9 Gang MemberRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of TYWIN BENDER, a/k/a/ “Finn Winn,” 25, and ROYAL ANGEL HINES, 20, for conspiring to retaliate against two federal witnesses. HINES made an initial appearance yesterday before Magistrate Judge Tony Leung in U.S. District Court in St. Paul, Minn. BENDER will make an initial appearance today in U.S. District Court in St. Paul, Minn.
“Witness retaliation is an assault on the integrity of our criminal justice system itself,” said U.S. Attorney Luger. “We rely on the honest testimony of witnesses to make communities safer and deliver justice. Retaliatory violence against those witnesses will be dealt with to the fullest extent allowable by law.”
According to the indictment and documents filed in court, BENDER is presently incarcerated at Minnesota Correctional Facility (MCF) – Stillwater on a 75-month sentence for aggravated robbery. He is a member of a North Minneapolis street gang known as the “Stick up Boys.” In November 2014, BENDER was charged in an 11-defendant indictment with conspiracy to possess firearms. BENDER pleaded guilty on October 8, 2015, to the conspiracy. One of his co-defendants, Veltrez Black, a/k/a, “Chief,” was convicted by a jury on October 22, 2015, of conspiracy and other charges contained in the same indictment.
According to the indictment and documents filed in court, during the trial of Black, A.L., a member of the “Stick up Boys,” and K.W., a member of a rival street gang known as the “Taliban,” testified as government witnesses against Black. The day after Black was convicted, BENDER placed a phone call to HINES during which he directed HINES to send an e-mail to two inmates incarcerated at MCF – Rush City, which is the same facility where federal witnesses A.L and K.W. are incarcerated. BENDER dictated the content of the email to HINES as follows: “The nigga Bonus [nickname for A.L.] is a rat. Smash him as soon as you all catch him. Green light. No passes. No talking. He got on the stand on Chief.”
According to the indictment and documents filed in court, HINES sent one e-mail that BENDER had dictated to her to each of the two inmates at MCF – Rush City. One of the emails was intercepted by Department of Corrections employees before it was received but the other e-mail was not intercepted.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorney Jeffrey S. Paulsen.
Defendant Information:
TYWIN BENDER, a/k/a/ “Finn Winn,” 25
Stillwater, Minn.
Charges:
- Conspiracy to retaliate against a federal witness, 1 count
ROYAL ANGEL HINES, 20
St. Paul, Minn.
Charges:
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Conspiracy to retaliate against a federal witness, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Twelve Arrested in Two Year Investigation of Major Meth and Heroin Trafficking OrganizationRead the Press Release
A two year investigation of a major drug trafficking ring in King and Snohomish counties culminated in 12 arrests today following the unsealing of a grand jury indictment and filing of criminal complaints against two dozen defendants, announced U.S. Attorney Annette L. Hayes. Over the two years of the Drug Enforcement Administration led investigation, law enforcement seized more than 50 pounds of heroin and more than 100 pounds of methamphetamine. The organization moved significant amounts of cash as part of their trafficking. To date more than $1,118,000 has been seized by law enforcement.
“Heroin and methamphetamine remain significant threats to the health of our communities. This group was transporting and distributing large quantities of both drugs up through California and into King and Snohomish Counties,” said U.S. Attorney Annette L. Hayes. “I commend the DEA-led task force that worked diligently to identify those in this distribution chain so that they can be held accountable for spreading these poisons in the Puget Sound region.”
Early this morning law enforcement served search warrants on ten locations in King and Snohomish Counties. Today alone law enforcement seized 14 pounds of heroin, 43 pounds of methamphetamine, a large sum of cash and eight handguns.
“Heroin and methamphetamine seizures have skyrocketed in the Pacific Northwest and are troubling,” said DEA Special Agent in Charge Keith Weis. “Today, we crippled a transnational criminal organization with tentacles in our area. We remain focused on removing those who supply narcotics to the violent distribution networks destroying our communities.”
Those arrested will make their initial appearance today at 2:00 in front of U.S. Magistrate Judge James P. Donohue. The defendants in custody today include:
Alfredo Enciso-Begines, 27, Bothell, WA
Jose Manuel Estrada-Contreras, 33, Marysville, WA
Francisco Javier Munoz-Contreras, 26, Marysville, WA
Adrian Ortega-Gonzalez, 20, Marysville, WA
Jesse Price, 30, Stanwood, WA
Tracy Raley, 34, Marysville, WA
Marlen Ravelo, 47, Port Angeles, WA
Luis Zamudio-Rivera, 37, Marysville, WA
Maria Polonia-Serrano, 57, Fresno, CA
Gladys Morales-Garibay, 26, Marysville, WA
Michael Peterman, 34, Everett, WA
Juan Gerardo Ruiz, 30, Marysville, WA
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.
The investigation was led by the Drug Enforcement Administration (DEA) in conjunction with the Seattle Police Department and the Snohomish Regional Drug and Gang Task Force. The investigation was supported by the Internal Revenue Service, King County Sheriff’s Office, Snohomish County Sheriff’s Office, Everett Police Department and the Marysville Police Department. Additional assistance was provided by the Centralia Police Department, Washington State Patrol, Port of Seattle Police Department and Homeland Security Investigations.
The case is being prosecuted by Assistant United States Attorneys Karyn Johnson and Andy Colasurdo.
Three Sentences Handed Down in Mortgage Fraud CasesRead the Press Release
SACRAMENTO, Calif. — As part of the ongoing effort by U.S. Attorney’s Office to prosecute mortgage fraud, three defendants were sentenced today for their roles in separate mortgage fraud schemes, United States Attorney Benjamin B. Wagner announced.
West Sacramento Man Sentenced for Mortgage Fraud (2:11-cr-353 MCE)
United States District Judge Morrison C. England Jr. sentenced Sean McClendon, 49, of Elk Grove, today to one year and eight months in prison. On October 18, 2012, McClendon pleaded guilty to a conspiracy to commit mail fraud for his involvement in a Sacramento area mortgage fraud scheme with Anthony Salcedo and Anthony Williams. According to court documents, McClendon and Williams recruited straw buyers to purchase four properties owned by Salcedo or his associates using kickbacks, false financial information for the buyers, and payments outside of escrow. All properties involved were foreclosed by the lenders, resulting in losses of over $1 million. In June 2015, a jury found Salcedo guilty of four counts of mail fraud and one count of conspiracy to commit mail fraud. He is scheduled to be sentenced on November 12, 2015. On January 29, 2015, Williams was sentenced to two years and nine months in prison.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Marilee Miller are prosecuting the case.
Mortgage Broker Sentenced for False Statements on a Loan Application (2:13-cr-131 MCE)
United States District Judge Morrison C. England Jr. sentenced Valeri Kalyuzhnyy, 44, of Citrus Heights, to two years in prison. On June 25, 2015, Kalyuzhnyy pleaded guilty to making a false statement on a loan application. According to court documents, Kalyuzhnyy, while working as a mortgage broker, bought two homes using the credit information of a straw buyer. The loan applications that were used to secure the properties contained numerous false statements regarding the buyer’s intent to occupy the property, employer, occupation, and monthly income. In order to support the inflated monthly income listed on the loan application, fraudulent tax returns were submitted. On July 17, 2007, Kalyuzhnyy gave the straw buyer a check for $29,000.
This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Jared C. Dolan prosecuted the case.
San Joaquin County Man Sentenced for Mortgage Fraud Scheme (2:11-cr-468 TLN)
United States District Judge Troy L. Nunley sentenced Stephen Pirt, 37, of Mountain House, to two years and one month in prison for his participation in a large-scale mortgage fraud scheme. According to evidence presented at the trial for co-defendant Erik Hermann Green, 33, of Roseville, Pirt and Green defrauded the New Century Mortgage Company by submitting false documentation about borrowers’ employment, income and assets, including fraudulent loan applications and other altered bank documents. On September 19, 2013, Stephen Pirt pleaded guilty to wire fraud.
Judge Nunley told Pirt, “You were an organizer and leader of the scheme, and you need to be punished for that.” The judge also explained the need for a proper deterrent effect.
Green is scheduled to be sentenced by Judge Nunley on November 19, 2015. Green faces a maximum statutory penalty of 20 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.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation and the Alameda County District Attorney’s Office. Assistant United States Attorney Michael D. Anderson and Special Assistant United States Attorney Josh F. Sigal are prosecuting the case.
Three Bay Area Defendants Charged in False Tax Refund SchemesRead the Press Release
SAN FRANCISCO – Carol Bryant, AKA Carol Lawson, Mark Russell, and Anyssa Hall were charged with conspiracy to file false claims, wire fraud, theft of public money, aiding and abetting, and aggravated identity theft announced Acting United States Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.
According to the indictment, beginning on January 9, 2009, through May 4, 2013, Mark Russell and Anyssa Hall, both of Richmond, and Carol Bryant, of San Pablo, conspired to defraud the Internal Revenue Service (IRS). As part of the scheme, the defendants and others procured the names and identities of individual taxpayers through illegal means or by agreement as participants in the scheme. Using the names and identities, the defendants filed, or helped others file, false federal income tax returns with the IRS. These federal income tax returns falsely reported that the individual taxpayers earned wages in amounts specified on fictitious Forms W-2 that were filed with the false federal income tax returns. The federal income tax returns falsely reported that taxes had been withheld by employers and falsely claimed refunds from the IRS that the taxpayers were not entitled to receive. The defendants and other co-conspirators requested that the IRS transmit the fraudulent refunds into bank accounts they controlled and that were linked to debit cards they used to access the fraudulent refunds.
All three defendants were charged with conspiracy. Bryant was also charged with two counts of theft of government property, wire fraud, and two counts of aggravated identity theft. Russell was also charged with two counts of wire fraud and two counts of aggravated identity theft. Hall was also charged with theft of government property.
Russell and Bryant were arrested on November 2, 2015, and made their initial appearance before the Honorable Kandis Westmore, U.S. Magistrate Judge, in Oakland on November 4, 2015. Both Russell and Bryant are scheduled to appear before the Honorable Yvonne Gonzalez-Rogers on December 3, 2015, at 3:00 p.m. in the Oakland Federal Building. Hall currently is a fugitive.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum sentence for conspiracy to file false claims, in violation of 18 U.S.C § 286, is 10 years in prison and a fine of $250,000. The maximum penalty for theft of public money, in violation of Title 18, U.S.C § 641, is 10 years in prison and a fine of $250,000. The maximum penalty for wire fraud, in violation of Title 18, U.S.C § 1343, is 20 years in prison and a fine of $250,000. The maximum penalty for each count of identity fraud, in violation of a Title 18, U.S.C § 1028A, is two years in prison, consecutive to the underlying felony and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Cynthia Stier is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
The U.S. Attorney's Office and the Department of Justice Announce 10 Tribes to Participate in Initial Phase of Tribal Access Program to Improve Exchange of National Criminal InformationRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney for the Western District of North Carolina Jill Westmoreland Rose and the Department of Justice announced today the first 10 tribes to participate in an initial User Feedback Phase of the Tribal Access Program for National Crime Information (TAP), a program to provide federally recognized tribes the ability to access and exchange data with national crime information databases for both civil and criminal purposes.
In the Western District of North Carolina, the Eastern Band of Cherokee Indians has been selected to participate in this initial phase of the TAP.
“As one of the tribes selected to participate in the initial phase of TAP, the Eastern Band of Cherokee Indians and its criminal justice agencies will gain greater access to federal crime information databases and crime solving tools that can be used to effectively serve and protect their communities. My office has a strong history of working closely with our tribal counterparts, and through this program we will continue to support our tribal partners’ mission of keeping the citizens of the Qualla Boundary safe,” said U.S. Attorney Rose.
The User Feedback Phase will grant access to national crime information databases and technical support to the following tribes: the Cherokee Nation of Oklahoma, the Eastern Band of Cherokee Indians of North Carolina, the Keweenaw Bay Indian Community of Michigan, the Oneida Indian Nation of New York, the Pascua Yaqui Tribe of Arizona, the Suquamish Indian Tribe of the Port Madison Reservation of Washington, the Shoshone-Bannock Tribes of the Fort Hall Reservation of Idaho, the Tulalip Tribes of Washington, the Confederated Tribes of the Umatilla of Oregon, and the White Mountain Apache Tribe of the Fort Apache Reservation of Arizona.
“This innovative program will allow an unprecedented sharing of critical information between tribal, state and federal governments, information that could help solve a crime or even save someone’s life,” said Deputy Attorney General Sally Quillian Yates. “This initial phase of TAP will help us understand the information gaps and the best ways to use this service to strengthen public safety in Indian country. The TAP program is a reflection of the Justice Department’s commitment to the government-to-government relationship, to overcoming barriers, and building strong partnerships with American Indian and Alaska Native people. The department will continue to work with Congress for additional funding to more broadly deploy the program.”
TAP will support tribes in analyzing their needs for national crime information and help provide appropriate solutions, including a state-of-the-art biometric/biographic computer workstation with capabilities to process finger and palm prints, take mugshots, and submit records to national databases, as well as the ability to access the FBI’s Criminal Justice Information Service (CJIS) systems for criminal and civil purposes through the Department of Justice. TAP will also provide specialized training and assistance for participating tribes.
This initial phase, funded by the Office of Justice Programs’ Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) and supported with technical assistance from the Office of the Chief Information Officer, will focus on assisting tribes that have law enforcement agencies. In the future, the department will seek to address the needs of the remaining tribes and find a long-term solution.
While in the Tribal Law and Order Act of 2010 Congress required the Attorney General to ensure that tribal officials that meet applicable requirements be permitted access to national crime information databases, the ability of tribes to fully participate in national criminal justice information sharing via state networks has been dependent upon various regulations, statutes and policies of the states in which a tribe’s land is located. Therefore, improving access for tribal law enforcement to federal crime information databases has been a departmental focus for several years. In 2010, the department instituted two pilot projects, one biometric and one biographic, to improve informational access for tribes. The biographic pilot continues to serve more than 20 tribal law enforcement agencies.
Departments of Justice and Interior Working Group
In 2014, the Departments of Justice and the Interior (DOI) formed a working group to assess the impact of the pilots and identify long-term sustainable solutions that address both criminal and civil needs of tribes. The outcome of this collaboration was the TAP, as well as an additional program by the DOI’s Bureau of Indian Affairs (BIA) that provides tribes with national crime information prior to making child placement decisions in emergency circumstances. Under the BIA Purpose Code X Program, social service agencies of federally recognized tribes will be able to view criminal history information accessed through BIA’s Office of Justice Services, which will conduct name-based checks in situations where parents are unable to care for their children.
For more information on TAP, visit: www.justice.gov/tribal/tribal-access-program-tap.
For more information about the Justice Department’s work on tribal justice and public safety issues, visit: www.justice.gov/tribal.
Ten Charged in $11.1 Million Tax Refund Fraud ConspiracyRead the Press Release
TALLAHASSEE, FLORIDA – A federal grand jury returned a 14-count indictment, unsealed today, charging 10 defendants with conspiracy, theft of government funds, and aggravated identity theft. The indictment was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
The defendants are:
- Ja’Baree Vazquez Allen, 26, Tallahassee, Florida;
- Ronald Edward Brown, 27, Quincy, Florida;
- Anre’ Juardon Davis, 34, St. Petersburg, Florida;
- Addrain Montez McMillan, 29, Overland Park, Kansas;
- Rashard Lavonta McMillian, 26, Quincy, Florida
- Jasmine Junae Robinson, 25, Tallahassee, Florida;
- Daria Patrice Simmons, 33, Tampa, Florida;
- Jazzman Shabazz Simmons, 27, Tallahassee, Florida;
- John Walter Simmons, 34, Tampa, Florida; and
- Mercedes Shevon Sutton, 25, Tampa, Florida.
The indictment alleges that, between January 2011 and April 2014, the conspirators fraudulently obtained the personal identifying information of approximately 2,800 individuals from multiple sources, including the insurance provider AmeriGroup and the online death database, dobsearch.com. The indictment further alleges that the conspirators then prepared and electronically filed fraudulent federal income tax returns using the victims’ information and caused the Internal Revenue Service to issue tax refunds in the victims’ names. The tax refunds were allegedly loaded onto debit cards, issued in the form of U.S. Treasury checks, and deposited into bank accounts controlled by the conspirators. By this conduct, the conspirators allegedly attempted to obtain approximately $11.1 million in tax refunds. Additionally, John Walter Simmons is charged with knowingly possessing a firearm as a convicted felon. The trial is scheduled for December 14, 2015, at 8:30 a.m.
This case resulted from an investigation by the Internal Revenue Service – Criminal Investigation, the Tallahassee Police Department, and the Leon County Sheriff’s Office. Assistant United States Attorney Jason R. Coody is prosecuting the case.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Sharpsville Man Named in Six-Count Indictment Charging Sexual Exploitation of a MinorRead the Press Release
PITTSBURGH - A resident of Mercer County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on charges of production, distribution and possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The six-count indictment, returned on Nov. 4, named Jason D. Lambert, 40, of Sharpsville, Pennsylvania, as the sole defendant.
According to the indictment, Lambert, on or about May 11, 2015, employed, used, persuaded, induced, enticed, and coerced a child victim to engage in sexually explicit conduct for the purpose of producing a video of such conduct, and then, on or about June 1, 2015, used a second child victim to engage in sexually explicit conduct to produce still photographs of the conduct. The indictment further charges that Lambert, in the morning, the late afternoon, and the evening of June 2, 2015, distributed by computer still images depicting minors engaged in sexually explicit conduct to an individual in Washington, D.C. Lastly, the indictment charges that on June 3, 2015, Lambert unlawfully possessed, in computer graphics files, videos and photographs depicting minors engaged in sexually explicit conduct.
The law provides for a maximum total sentence of 45 years in prison, a fine of $1,500,000.00, 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 Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Serial Fraudster Sentenced to Eight Years in Prison for Business Fraud SchemeRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Curtis R. Martin, Jr., age 55, of Baltimore, Maryland, today to 8 years in prison, followed by three years of supervised release, for wire fraud. Martin previously pleaded guilty a scheme to defraud a business of more than $132,000. At today’s sentencing hearing the government presented evidence of additional fraud schemes committed by Martin and Judge Bennett found that the total loss as a result of Martin’s fraud schemes was $1,572,195. Judge Bennett entered an order requiring Martin to pay restitution in the full amount of the loss, $1,572,195. In addition, Judge Bennett ordered that Martin perform a total of 300 hours of community service during his supervised release – 100 hours each year.
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 his plea agreement, while Martin was serving the final portion of a 162-month federal prison sentence at a halfway house in Maryland in the summer of 2010, he incorporated Oledix Technologies, LLC. Martin assumed the positions of President and Chief Executive Officer (CEO) of Oledix. On December 23, 2010, Martin was released from the halfway house and began serving a three-year term of supervised release. In the fall of 2011, Martin acquired office space for Oledix Technologies in downtown Baltimore, and began hiring employees. Oledix operated from this space until it was evicted for non-payment of rent at the end of June, 2012.
Martin represented that Oledix Technologies was in the business of selling video teleconferencing equipment that employed LED touchscreen technology, and that The Oledix Store was a retail outlet for Oledix Technologies. In fact, neither company did any significant amount of business. It’s operations in 2011 – 2012 were largely funded by money provided by a woman with whom Martin was romantically involved; by charges incurred on corporate credit cards obtained by Martin; and by financing obtained by Martin on behalf of Oledix from financing and leasing companies, including New Century Financial. New Century Financial (NCF) is a Texas company in the business of accounts receivable financing. Accounts receivable financing permits a business to obtain loans from a lender or financing company based upon outstanding invoices issued to customers, but for which payment is not yet due under the terms of the invoice. An accounts receivable financing company agrees to provide financing that is less than the full face value of the invoice. The business receiving the financing instructs its customer to make the payment owed on the invoice to the financing company, which retains the difference between the amount financed and the full face value of the invoice as its profit.
According to the statement of facts, on April 11, 2012, Martin submitted an on-line application for financing to NCF which falsely represented and inflated the monthly sales of Oledix Technologies. In support of the financing application, Martin submitted additional fraudulent documents, including bank statements, financial reports, and sales summaries, that presented a false and misleading picture of the financial position of Oledix Technologies.
In June 2012 he submitted a further request for financing to NCF and provided NCF with a fraudulent invoice which falsely represented that Oledix Techologies had sold Johns Hopkins Hospital/Hopkins Medical Center three “Oledix mobile telemedicine carts” at a cost of $174,200. In August 2012, Martin submitted an additional fraudulent invoice to NCF claiming that Hopkins had purchased an additional six “Oledix Mobile Telemedicine Carts” for a total price of $332,550. In fact, Oledix Technologies had not sold any equipment to Johns Hopkins Hospital or Hopkins Medical Center. To carry out the scheme, Martin sent or caused to be sent to NCF fraudulent emails, purporting to be from a Hopkins doctor and from a Hopkins account manager, which falsely confirmed the validity of the Hopkins invoices.
Martin admitted that, based on his fraudulent representations, NCF provided a total of $132,470 to Martin for the invoices purportedly issued to Johns Hopkins. Martin used the money for personal and business-related expenses.
The government presented evidence today that on May 4, 2012, NCF provided an additional $80,000 in financing to Martin based upon a fraudulent invoice Oledix had purportedly issued to Company 1. Judge Bennett found that not only did Martin defraud NCF of the $80,000, but based on evidence presented by the government, Martin committed other frauds involving eight individual victims and entities, with losses totaling $1,492,195.
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 and thanked the U.S. Probation Office for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the case.
Sentencings for November 2 - November 4, 2015Read the Press Release
Armando Lopez-Ruiz aka Alejandro Garcia-Ramos, Alejandro Garcia-Ralu, 33, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson November 2, 2015, for illegal re-entry of a previously deported alien into the United States. Lopez-Ruiz was arrested in Jackson, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Noah Vonwerner, 28, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on November 3, 2015, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Vonwerner was arrested in Gillette, Wyoming. He received 180 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Christopher Phillips, 32, was sentenced by Federal District Court Judge Scott W. Skavdahl on November 4, 2015, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Phillips was arrested in Gillette, Wyoming. He received 121 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Scottish Citizen Indicted for Twitter-Based Stock Manipulation SchemeRead the Press Release
Defendant Tweeted False Information about Publicly Traded Companies, Causing More than $1 Million in Losses
A federal grand jury in San Francisco indicted James Alan Craig today with securities fraud, announced Acting U.S. Attorney Brian J. Stretch of the Northern District of California and Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division.
According to the indictment, Craig, 62, of Dunragit, Scotland, alleged set up Twitter accounts using names similar to real market research firms for the purpose of manipulating stock prices. Craig issued tweets with false and fraudulent information about publicly-traded securities, causing the price of the securities to rapidly decline. Craig then bought securities of the targeted companies through his girlfriend’s brokerage account and later sold them at a higher price per security. Craig’s actions are alleged to have caused of more than $1.6 million in losses to shareholders.
According to the indictment, on Jan. 25, 2013, Craig set up a Twitter account with the handle @Mudd1Waters using the alias “Shun Ho” and a Gmail address he previously created. In an effort to make the account appear to be associated with Muddy Waters Research, a market research firm, Craig used the firm’s logo as the Twitter account’s profile picture. Craig also used a name associated with the founder of Muddy Waters Research as the account’s handle. On Jan. 29, 2013, Craig used the @Mudd1Waters Twitter account to publish multiple false and fraudulent tweets about the Bay Area sound technology company, Audience. For example, Craig tweeted that Audience was being investigated by the “DOJ” on rumored fraud charges. Audience’s security price on the NASDAQ stock exchange fell significantly in the wake of Craig’s tweets until trading was halted. That same day, Craig used his girlfriend’s TradeMonster account to purchase 300 shares of Audience’s securities. The next day, he bought another 100 shares of Audience’s securities. Craig then sold all 400 securities at a per-share price higher than the 300 he had bought the day before.
The indictment describes a similar scheme involving Sarepta, a biopharmaceutical firm based in Washington. According to the indictment, on Jan. 29, 2013, Craig set up a Twitter account with the handle @citreonresearc using a false email address purporting to belong to Citron Research, a market research firm. Craig used Citron Research’s logo as the Twitter account’s profile picture in an effort to make the account appear to be associated with the firm. The next day, Craig used the @citreonresearc Twitter account to publish multiple false and fraudulent tweets about Sarepta’s business activities, such as that Sarepta’s trial papers were seized by the “FDA.” Sarepta’s security price fell significantly in the wake of Craig’s tweets. That same day, Craig used his girlfriend’s TradeMonster account to purchase 700 total shares of Sarepta’s securities. Then, on or about Feb. 1, 2013, Craig sold all 700 securities at an average per-share price higher than the average per-share price at which he had bought them.
Craig was charged with a single count of securities fraud. The Securities and Exchange Commission filed a separate complaint today charging Craig with securities fraud.
“The allegations in this indictment describe a significant stock price manipulation committed through the use of social media,” said Acting U.S. Attorney Stretch. “This prosecution makes clear that we will find and prosecute those who commit fraud on our stock exchanges, by any means, no matter where they reside.”
“This investigation dismantled a stock market manipulation scheme that operated with one goal in mind — to falsely defame a company in order to destroy its stock value for financial gain,” said Special Agent in Charge Johnson. “The FBI is dedicated to stopping this type of predatory behavior. It causes substantial harm to businesses, deceives the average investor and erodes overall confidence in the markets.”
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Craig faces a maximum sentence of 25 years’ imprisonment and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence.
Assistant U.S. Attorney Robert David Rees of the Northern District of California is prosecuting the case with the assistance of Trina Khadoo. The prosecution is the result of an investigation by the FBI.
Scottish Citizen Indicted for Twitter-Based Stock Manipulation SchemeRead the Press Release
SAN FRANCISCO - A federal grand jury in San Francisco indicted James Alan Craig today with securities fraud, announced Acting United States Attorney Brian J. Stretch and the Federal Bureau of Investigation, Special Agent in Charge David J. Johnson.
According to the indictment, Craig, 62, of Dunragit, Scotland, is alleged to have set up accounts at Twitter using names similar to real market research firms for the purpose of manipulating stock prices. Craig issued so-called “Tweets” with false and fraudulent information about publicly-traded securities, causing the price of the securities to rapidly decline. Craig then bought securities of the targeted companies through his girlfriend’s brokerage account and later sold them at a higher price per security. Craig’s actions are alleged to have caused losses to shareholders in excess of $1,600,000.00.
According to the indictment, on January 25, 2013, Craig set up a Twitter account with the handle @Mudd1Waters using the alias “Shun Ho” and a Gmail address he previously created. In an effort to make the account appear to be associated with Muddy Waters Research, a market research firm, Craig used the logo of that firm as the Twitter account’s profile picture. As part of that same effort, Craig used a name associated with the founder of Muddy Waters Research, as the account’s handle. A few days later, on January 29, 2013, Craig used the @Mudd1Waters Twitter account to publish multiple false and fraudulent Tweets about the Bay Area sound technology company, Audience. For example, Craig Tweeted that Audience was being investigated by the “DOJ” on rumored fraud charges. Audience’s security price on the NASDAQ stock exchange fell significantly in the wake of Craig’s Tweets until trading was halted. That same day, Craig used his girlfriend’s TradeMonster account to purchase 300 shares of Audience’s securities. The next day, he bought 100 more shares of Audience’s securities. Craig then sold all 400 securities at a per-share price higher than the 300 he had bought the day before.
The indictment describes a similar scheme involving the Washington-based biopharmaceutical firm Sarepta. According to the indictment, on January 29, 2013, Craig set up a Twitter account with the handle @citreonresearc using a false email address purporting to belong to Citron Research. As the Twitter account’s profile picture, Craig used the logo of Citron Research, a market research firm, in an effort to make the account appear to be associated with that firm. The next day, Craig used the @citreonresearc Twitter account to publish multiple false and fraudulent Tweets about Sarepta’s business activities, such as that Sarepta’s trial papers were seized by the “FDA.” Sarepta’s security price fell significantly in the wake of Craig’s Tweets. That same day, Craig used his girlfriend’s TradeMonster account to purchase 700 total shares of Sarepta’s securities. Then, on or about February 1, 2013, Craig sold all 700 securities at an average per-share price higher than he average per-share price he had bought them the day before.
Craig was charged with a single count of securities fraud, in violation of Title 18, United States Code, Section 1348. The Securities and Exchange Commission has filed a separate complaint today charging Craig with securities fraud.
“The allegations in this indictment describe a significant stock price manipulation committed through the use of social media,” said Acting United States Attorney Brian Stretch. “This prosecution makes clear that we will find and prosecute those who commit fraud on our stock exchanges, by any means, no matter where they reside.”
“This investigation dismantled a stock market manipulation scheme that operated with one goal in mind — to falsely defame a company in order to destroy its stock value for financial gain,” said Special Agent in Charge David J. Johnson. “The FBI is dedicated to stopping this type of predatory behavior. It causes substantial harm to businesses, deceives the average investor and erodes overall confidence in the markets.”
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Craig faces a maximum sentence of 25 years’ imprisonment and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Robert David Rees is prosecuting the case with the assistance of Trina Khadoo. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Sacramento Couple Sentenced for Theft and Possession of Stolen MailRead the Press Release
SACRAMENTO, Calif. — A Sacramento couple was sentenced today by United States District Judge Troy L. Nunley for a smash and grab vehicle burglary in South Sacramento, United States Attorney Benjamin B. Wagner announced.
Keo Seng Saechao, 33, was sentenced to 21 months in prison, and his wife Pang Shoua Xiong, 33, was sentenced to 30 months in prison.
According to court documents, on September 26, 2012, a postal vehicle was burglarized in South Sacramento. The back window of the vehicle was smashed in with a tire iron and all of the mail in the truck was stolen. At the time of the burglary, 531 postal customers were left on the route. Saechao was driving the car during the burglary and Xiong was in the front seat.
On October 11, 2012, California Probation officers and CHP officers conducted a probation search of the defendants’ home as part of an unrelated investigation. They found evidence linking the couple to the postal vehicle burglary, as well as numerous other instances of mail theft in the South Sacramento area. A second search turned up large piles of stolen mail from the addresses that would have been in the vehicle in South Sacramento on September 26, 2012. A search of the computers in the apartment showed false IDs with the defendants’ pictures superimposed on it, “Check Designer” software that allows users to create and print checks, and the names and account numbers associated with several of the fraud victims whose identifiers were found on papers in the apartment.
On July 30, 2015, Saechao and Xiong pleaded guilty to theft of the mail.
This case is the product of an investigation by the U.S. Postal Inspection Service. Assistant United States Attorney Matthew Morris prosecuted the case.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office to arrest and prosecute the individuals responsible for the theft of U.S. Mail and damage to Postal property and equipment.
Ronald Rup, Jr. Pleads Guilty to Equipment Theft from Agri-MarkRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Ronald Rup Jr., 53, of Fairfax, pleaded guilty today in United States District Court in Burlington to a charge of wire fraud. Chief District Judge Christina Reiss released Rup on conditions pending sentencing, which is set for May 10, 2016.
Last month, the United States Attorney filed a criminal information charging Rup with wire fraud, and Rup pleaded guilty to that charge today. According to the information, Rup was employed by Agri-Mark as its manager of IT infrastructure. Several years ago, when Agri-Mark was constructing a new headquarters in Waitsfield, Rup was the employee responsible for purchasing the IT network equipment for the facility. As part of his criminal scheme, Rup caused Agri-Mark to purchase more than 100 pieces of switching equipment than were needed to serve the new building. The switches were expensive – many costing $8500 or more. Between about April 2012 and March 2012, Rup stole the extra switches from Agri-Mark's inventory and sold them over the Internet to a Texas company which specializes in buying and selling new and used IT networking equipment. Rup sold the switches for about one-third of their cost to Agri-Mark. The Texas company paid for the switches by depositing funds into Rup's PayPal account. Altogether, Rup realized more than $475,000 from the sales. He used the money, to buy vehicles, snowmobiles, motorcycles and jewelry, and to pay for improvements to his home, among other things.
Rup faces up to 20 years of imprisonment and a fine of up to twice Agri-Mark's loss. His actual sentence will be determined with reference to federal sentencing guidelines.
This case was investigated by the Federal Bureau of Investigation.
Rup is represented by Brooks McArthur. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Rochester Man Sentenced for Filing False ReturnRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced that today Anselmo Barilla, 48, of Rochester, NY, who was convicted of filing a false tax return with the Internal Revenue Service, was sentenced to two years probation and ordered to pay restitution in the amount of $56,152 by U.S. District Court Judge Charles J. Siragusa.Assistant U.S. Attorney Richard A. Resnick, who handled the case, stated that the defendant was self-employed as a mason in Rochester. For the tax years 2007 and 2008, Barilla underreported the amount of income he had received from his mason business. The total amount of unreported income was $171,364, resulting in the failure to pay federal taxes in the amount of $56,152.
The sentencing is the culmination of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge.
Rensselaer Man Ordered to Pay $54,000 in Restitution for Theft of Government PropertyRead the Press Release
ALBANY, NEW YORK – Lawrence Macera, age 65, of Rensselaer, was sentenced yesterday to serve two years of probation and to pay $54,041.43 in restitution on a conviction of theft of government property, announced United States Attorney Richard S. Hartunian and Martin J. Dickman, Inspector General for the United States Railroad Retirement Board.
In May, Macera pled guilty to a one-count Information charging theft of government property. Macera was sentenced by U.S. District Court Judge Mae A. D’Agostino.
Macera was prosecuted for receiving approximately $54,041.43 of retirement benefits to which he was not entitled. Specifically, Macera, who was receiving a disability annuity from the Railroad Retirement Board at the time, failed to report income that he received between January 1, 2009 and December 31, 2010. His failure to report that income caused the Railroad Retirement Board to pay him money to which he was not entitled.
This case was investigated by the United States Railroad Retirement Board, Office of Inspector General, and prosecuted by Assistant United States Attorney Emily T. Farber.
RI Dermatology and Cosmetic Center Pays More Than $150,000 to Settle Allegations of Upcoding Medicare ClaimsRead the Press Release
PROVIDENCE, R.I. – United States Attorney Peter F. Neronha and Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), New England Region, announced today that Rhode Island Dermatology and Cosmetic Center, LLC, and Rhode Island Dermatology OBS, LLC, of Lincoln, have paid $152,043.25 to resolve civil allegations that they violated the federal False Claims Act by billing Medicare for some patient services and procedures performed at rates higher than were warranted.
Based on an investigation conducted by the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the United States Attorney’s Office, the United States alleged that, between 2009 and 2014, Rhode Island Dermatology, which provides dermatology, plastic surgery, and cosmetic surgery services, billed Medicare for surgical closure procedures at a higher rate of complexity than was supported by certain patients’ condition or the circumstances of the closure, and which should properly have been classified at a lower billing rate for less complex procedures. The amount that Medicare pays for a given medical or surgical procedure is frequently dependent on the complexity of that procedure. Upcoding, or billing for a level of complexity that is not warranted by a patient’s actual condition and treatment, results in improperly higher payments for care that should have actually been reimbursed by Medicare at a lower rate.
The matter was settled prior to litigation, without an admission of liability or wrongdoing on the part of the practice.
The case was litigated by Assistant U.S. Attorney Zachary A. Cunha.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
President of Ambulance Company Pleads Guilty to Perjury in Connection with False Health Care Claims InvestigationRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that today in federal court, JAIME LEONARD SMITH, 35, of Morehead City, North Carolina, pleaded guilty to Perjury.
According to the Criminal Information, SMITH was the president of CCMT, Inc., doing business as Crystal Coast Medical Transport (CCMT). CCMT was a nonemergency ambulance transportation company that operated in Craven and Carteret counties.
In 2012, CCMT and SMITH became the subject of investigation after a member of the public videotaped CCMT employees routinely transporting patients in CCMT ambulances when the patients had the ability to walk or ride in wheelchairs. Medicare and TRICARE generally do not cover nonemergency ambulance transportation services when the patient has the ability to walk or ride in a wheelchair. Additionally, for reimbursement to be covered by Medicare and TRICARE, the ambulance company must obtain an order, known as a Physician’s Certification Statement (PCS), from the patient’s physician indicating that the ambulance trip is medically required.
In October of 2013, the United State Attorney’s Office for the Eastern District of North Carolina (USAO-EDNC) issued Civil Investigative Demand (CID) upon CCMT, to the attention of SMITH. The CID required CCMT to produce to the government, “Any and all Physician Certification Statements on which you relied to provide ambulance transport to any beneficiary of a government healthcare program, including but not limited to Medicare, Medicaid, or TRICARE for the time period January 1, 2011 [to] the present.” In November of 2013, SMITH produced records and swore under oath that the records she produced were responsive to the CID.
In fact, the investigation revealed that in many instances, SMITH had altered the PCS forms to include additional markings that were not made by the patients’ physicians. In some instances, PCS forms were fabricated to cover dates of service for which no genuine PCS form existed. In other instances, the PCS forms were altered to include additional markings that were not made by the patient’s physician. For example, some PCS forms were altered to indicate that the ambulance transport was medically necessary, or to reflect that the patient had additional illnesses or medical conditions justifying the ambulance transport.
In no instance did the physicians authorize SMITH or any other agent of CCMT to fabricate or alter PCS forms for their patients.
At sentencing, SMITH faces up to 5 years in prison and 3 years of supervise release. The defendant also faces a fine of up to $250,000 and restitution if ordered by the court.
The investigation of this case was conducted by agents of the United States Department of Health and Human Services Office of the Inspector General, and the Defense Criminal Investigative Service. Assistant United States Attorney William M. Gilmore of the Economic Crimes Division represents the United States.
Pittsburgh Man Sentenced to 4 Years in Prison, Ordered to Pay Restitution for Possessing Child PornographyRead the Press Release
PITTSBURGH, Pa. - A former resident of Allegheny County, Pennsylvania, was sentenced in federal court to 48 months imprisonment, followed by eight years supervised release, on his conviction of possession of material depicting the sexual exploitation of a minor. The defendant was also ordered to pay $ 11,881.28 in restitution to five victims, United States Attorney David J. Hickton announced today.
United States District Judge Terrence F. McVerry imposed the sentence on Christopher J. Bailey, 50, of Pittsburgh, Pennsylvania.
According to information presented to the court, Bailey, on or about Dec. 23, 2013, knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Pennsylvania Office of Attorney General for conducting the investigation that led to the successful prosecution of Bailey.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Philadelphia Man Arraigned on Robbery and Carjacking ChargesRead the Press Release
PHILADELPHIA - Cory D. Foster, 27, of Philadelphia, Pennsylvania was arraigned today on an Indictment, charging him with three counts of robbery which interferes with interstate commerce, one count of carjacking, and four counts of using, carrying, and brandishing a firearm during and in relation to a crime of violence, announced United States Attorney Zane David Memeger and Montgomery County District Attorney Risa Vetri Ferman.
The indictment charges that on November 18, 2014, Foster and an accomplice robbed a service station and convenience store in Trevose, Bucks County, Pennsylvania at gunpoint, stealing cash and merchandise worth about $1,000 and cash and a wallet from an employee, before escaping in a getaway car operated by an unknown driver; on December 2, 2014, Foster and an accomplice robbed a service station and convenience store in Plymouth Meeting, Montgomery County, Pennsylvania at gunpoint, stealing about $700 cash and about $2,400 worth of cigarettes and case from an elderly employee, before escaping in a getaway car operated by an unknown driver; and on December 7, 2014, Foster and an accomplice robbed a gas station and convenience store in Phoenixville, Chester County, Pennsylvania at gunpoint, stealing about $984 Pennsylvania Lottery cash, about $790 cash, and more than $4,000 worth of cigarettes and cigars. Foster then smashed a victim employee in the face, breaking his orbital eye socket, before stealing the customer’s car at gun point. Foster and his accomplice then fled the scene, one robber in the customer’s car and the second in a getaway car. The indictment alleges that in early February 2015, the handgun used in these crimes of violence was seized by law enforcement from Foster in the state of Delaware and that on the same date the stolen car was recovered from another person and Foster in Delaware.
If convicted the defendant faces a maximum possible sentence of life imprisonment, including a total mandatory minimum prison sentence of 82 years’ imprisonment consecutive to any other sentence imposed.
The case was investigated by the Federal Bureau of Investigation, Plymouth Township Police Department, Bensalem Township Police Department, Schuylkill Township Police Department, the Delaware State Police, and the Montgomery County District Attorney’s Office. The case will be prosecuted by Special Assistant United States Attorney and Montgomery County Assistant District Attorney Gabriel C. Magee.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Owner of Unlicensed Money Transmitter Business Sentenced for Failing to File Currency Transaction Reports and Illegally Sending Money to CubaRead the Press Release
An owner of an unlicensed money transmitter business was sentenced to 30 months in prison, followed by two years of supervised release for failing to file Currency Transaction Reports and illegally sending money to Cuba. The defendant also agreed to forfeit $480,622 in United States currency representing the funds seized in connection with the offense.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), made the announcement.
Karell Cordero, 40, of Hialeah, previously pled guilty to one count of operating an unlicensed money transmitter business, in violation of Title 18, United States Code, Section 1960.
According to court documents, between June 2012 and May 2014, Cordero owned and operated K & Y Multiservices in Hialeah, Florida, where he received euros and exchanged them for U.S. dollars. These transactions often involved sums of tens of thousands of dollars, but Cordero did not submit Currency Transaction Reports (CTRs) or other forms or reports that must be submitted to the Treasury Department. On occasion, Cordero conducted these transactions to exchange money knowing it was derived from unlawful activity. Law enforcement officers monitored two separate meetings where Cordero exchanged 240,000 euros for $326,900 in U.S. currency. Cordero was told that the money was from Mexico and came from drug dealers. Cordero did not file a CTR or any other required report on either occasion.
Another aspect of Cordero's business involved collecting money from various persons in the United States who wanted to send it to persons in Cuba. He used many of the euros he obtained from his money exchange business for this purpose. Cordero used a variety of means to transmit money to the persons for whom it was intended in Cuba, while collecting a fee for his services. Cordero knew that he was prohibited under U .S. law from sending currency from the United States to Cuba.
Cordero handled approximately $800,000 in foreign currency exchanges and transmissions of money to Cuba without filing CTRs or otherwise reporting the money to any governmental regulatory or law enforcement agencies as required by law. In addition, Cordero and his company were not licensed as a money transmitter, money service business, or foreign currency exchange.
Mr. Ferrer commended the investigative efforts of ICE-HSI, IRS-CI, and the DEA. This case is being prosecuted by Assistant U.S. Attorney Frank H. Tamen.
Owner of Connecticut Media Agency that Falsely Advertised Mortgage Modification Services is SentencedRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MATTHEW GOLDREICH, 46, of East Lyme, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to two years of probation, including three months of home confinement, for producing and disseminating false advertisements for mortgage modification services. Chief Judge Hall also ordered GOLDREICH to pay a $100,000 fine and $75,794 in restitution.
According to court documents and statements made in court, in March 2009, the U.S. Department of the Treasury created the Home Affordable Modification Program (“HAMP”), which consisted of a number of incentives to encourage struggling homeowners and financial institutions to modify existing loans on owner-occupied primary residences in order to help keep these properties out of foreclosure.
Between approximately May 2009 and February 2013, GOLDREICH used his New London-based media agency, National Media Connection, LLC, to produce and air television, radio, and Internet advertisements for the National Mortgage Help Center, LLC (“NMHC”), a shell company incorporated by GOLDREICH. The advertisements falsely claimed that NMHC could help struggling homeowners obtain home mortgage loan modifications. Many of the advertisements also falsely depicted NMHC as affiliated with the federal government, including through references to government stimulus programs and the use of President Barack Obama’s image. One advertisement that aired in 2010 stated: “Attention homeowners. We know it’s tough out there. And while America’s homeowners are facing more challenges than ever before, the National Mortgage Help Center is ready to help.” The same advertisement also stated: “We may be able to lower your rate to as low as 1% and cut your mortgage payment in half. Our trained specialists know all the new regulations to get you quick relief. We help thousands of homeowners every day.”
The advertisements included toll-free telephone numbers for mortgage borrowers to call for help modifying their mortgages. In truth, NMHC did not provide mortgage modification services for any homeowners, and operated only as a front. Homeowners who called the toll-free telephone numbers advertised by NMHC were routed to National Media Connection’s clients. The clients, in turn, paid National Media Connection for these “leads.” Under the pretense of helping homeowners modify their mortgages, certain National Media Connection clients then charged the homeowners fees and provided no services whatsoever in return.
As a result of the advertisements, several struggling homeowners across the United States were defrauded by unscrupulous clients of GOLDREICH’s media company, and some are in danger of losing their homes.
On August 13, 2015, GOLDREICH pleaded guilty to one count of false advertising.
This investigation is being conducted by the U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, and Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Avi Perry and Liam Brennan.
Orange County Sex Offender Sentenced to More Than 20 Years on Federal Child Pornography ChargesRead the Press Release
Orlando, FL – United States District Judge Paul G. Byron today sentenced Ashley Anders Bishop (42) to 23 years and 4 months in federal prison, and a life term of supervised release for possessing and receiving child pornography.
A federal jury convicted Bishop on August 19, 2015. In reaching their decision, the jury made a special finding that certain exhibits depicted children under the age of 12.
According to the testimony presented at trial, on October 6, 2000, in Orange County, Bishop was convicted of attempting to commit lascivious molestation on a child under the age of 12 and was sentenced to a 15-year prison term. After his release, Bishop, a registered sex offender, was arrested on two different occasions, and each time had a cellphone in his possession. Both phones were searched pursuant to state search warrants and found to contain child pornography.
This case was investigated by the Federal Bureau of Investigation, the Orange County Sheriff’s Office, and the Orange County Department of Corrections. It was prosecuted by Assistant United States Attorneys Ilianys Rivera Miranda.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (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.
Officials to recognize Charleston Police and Firefighters for preventing drug overdoseRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin, joined by Charleston Police Chief Brent Webster, Charleston Fire Department Captain Mark Strickland, Kanawha-Charleston Health Department Executive Director/Health Officer Dr. Michael Brumage, and other local officials will be recognizing the drug overdose prevention efforts of Charleston Police Department Patrolmen Seth Johnson and Nick Castleman and the Charleston Fire Department at a press conference at Charleston City Hall on Friday, November 6, 2015, at 12:30 p.m.
Patrolmen Johnson and Castleman are the first Charleston Police Officers to use Naloxone, commonly known as Narcan, a medication that can reverse the effects of opioid overdose. The two officers recently responded to an overdose call and upon arrival, they used their training to quickly assess the situation and administer Narcan to stop a heroin overdose. The actions of Patrolmen Johnson and Castleman were largely made possible by the work of the Charleston Fire Department to forge partnerships and conduct overdose prevention training with local law enforcement and first responders.
This event will serve to commend the lifesaving actions of these individuals and acknowledge the commitment of local agencies to have their personnel trained in the use of Narcan as a powerful tool in the fight against drug abuse.
WHO:
- United States Attorney Booth Goodwin
- Charleston Police Chief Brent Webster
- Charleston Fire Department Captain Mark Strickland
- Kanawha-Charleston Health Department Executive Director/Health Officer Dr. Michael Brumage
- Other local officials
WHAT:
- Press conference to recognize the drug overdose prevention efforts of Charleston Police and Firefighters
WHERE:
- Charleston City Hall – Third Floor, A/V Room (adjacent to City Council Chambers)
- 501 Virginia Street, East, Charleston, WV 25301
WHEN:
- Friday, November 6, 2015, at 12:30 p.m.
Newcastle Man Pleads Guilty in Scheme to Defraud United Auburn Indian CommunityRead the Press Release
SACRAMENTO, Calif. — Gregory Scott Baker, 48, of Newcastle, pleaded guilty today to conspiring commit mail and wire fraud, conspiring to launder monetary instruments, and filing a false tax return, United States Attorney Benjamin B. Wagner announced.
In August 2012, Baker, Bart Wayne Volen, 54, of San Diego and Haiku, Hawaii, and Darrell Patrick Hinz, 48, of Cameron Park, were charged with conspiring to commit mail and wire fraud and various money laundering charges as part of a scheme to defraud the United Auburn Indian Community (UAIC) of more than $17 million. In April, 2013, the government filed a superseding indictment which additionally charged Baker with filing false tax returns from 2006 through 2009 in connection with the fraud.
According to court documents, in October 2006, the UAIC hired Volen, a developer, to finish construction on four tribal buildings – a school, a community center, and administrative offices – on UAIC-owned property in Auburn. Volen submitted false and inflated invoices to the UAIC knowing that Baker and Hinz, both UAIC employees, would approve the fraudulent invoices based on an agreement the three men had reached earlier. Volen supported his invoices with inflated cost proposals from his general contractor’s company, Sequoia Pacific Builders (SPB), and, at times, inflated invoices from various subcontractors. At Volen’s direction, over 160 SPB cost proposals were fraudulently inflated.
Baker was the UAIC tribal administrator, and his duties included overseeing the Indian Hills Office Project. Hinz was a contract employee hired by the UAIC to manage the construction at the Indian Hills Office Project site. Both Baker and Hinz were required to approve all invoices before the UAIC tribal council would pay for work done on the Project. The indictment alleges that during the scheme to defraud the tribe, Baker engaged in conduct to insure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. He was aware of what Volen was doing and was later paid by Volen for his participation in the scheme. According to court documents, a total of over $17 million was ultimately stolen from the UAIC, and Baker received over $1.4 million for his participation.
With regard to the tax offense, according to court documents, Baker filed tax returns contained a Schedule C in which Baker failed to report the income he derived from the scheme. As a result, the United States suffered a tax loss of between $250,000 and $550,000.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Michael M. Beckwith, John K. Vincent and Kevin C. Khasigian are prosecuting the case.
Hinz is scheduled for trial in Sacramento on February 29, 2016. The charges against him are only allegations; Hinz is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Baker is scheduled to be sentenced by United States District Judge Troy L. Nunley on March 17, 2016. Volen previously pleaded guilty to similar charges in this case on June 12, 2014. Chris W. Eatough, the owner of Sequoia Pacific Builders, previously pleaded guilty to a felony related to this case on June 20, 2013, in case number 2:13-cr-214 TLN. Volen and Eatough are scheduled to be sentence by Judge Nunley on April 28, 2016 and March 17, 2016, respectively. Both Baker and Volen have agreed to pay at least $17 million in restitution to the United Auburn Indian Community.
Baker faces a maximum sentence of 20 years in prison and a $250,000 fine, or twice the value of the gross gain or loss for conspiring to commit mail and wire fraud. The maximum statutory penalty for conspiring to launder monetary instruments is 20 years in prison and a $500,000 fine or twice the value of the laundered money Any sentence imposed in this case, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
New Yorker Wen Ping Chen Pleads Not Guilty to Credit Card ScamRead the Press Release
The United States Attorney for the District of Vermont announced that Wen Ping Chen, 47, of Brooklyn, New York, pleaded not guilty today in United States District Court in Burlington to charges of credit card fraud. U.S. Magistrate Judge John M. Conroy released Chen on conditions pending trial, which has not been scheduled.
On October 15, 2015, a federal grand jury in Burlington returned a three-count indictment charging Chen with conspiring to commit access device fraud, possessing 15 or more counterfeit access devices, and using counterfeit access devices. The charges stem from an incident in August 2014 which resulted in the arrests in South Burlington of alleged co-conspirators Shao Qing Chen (no relation) and Kewang Lin.
According to the indictment, between about 2013 and August 22, 2014, Wen Ping Chen conspired with Shao Chen, Kewang Lin and others to commit credit card fraud. As part of the conspiracy, the defendants would travel from New York to other states and use counterfeit credit cards to make purchases, primarily of gift cards. The merchandise acquired through the fraudulent purchases would then be resold on a black market. According to the indictment, Wen Ping Chen, Shao Chen and Lin drove from New York to Vermont in August 2014. Shao Chen and Lin spent two days in Vermont making purchases with counterfeit credit cards provided to them by Wen Ping Chen. On August 22, 2014, Shao Chen and Lin were arrested and have since been charged in federal court with access device fraud. Wen Ping Chen was also arrested but was then released. More than 80 counterfeit credit cards were recovered, as well as thousands of dollars worth of gift cards.
Shao Chen has pleaded guilty and is awaiting sentencing. Charges against Lin are still pending.
The United States Attorney emphasizes that the charges in the indictment are merely accusations and that the defendant is presumed innocent unless and until he is proven guilty.
If convicted, Wen Ping Chen faces up to ten years of imprisonment and a fine of up to $250,000. The actual sentence would be determined with reference to federal sentencing guidelines.
This case was investigated by the South Burlington Police Department; the United States Secret Service, and the Bureau of Immigration and Customs Enforcement.
Chen is represented by Paul Brenner. The prosecutor is Assistant U.S. Attorney Gregory Waples.
New Orleans Man Sentenced for Defrauding Gulf Coast Claims FacilityRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MICHAEL CUTRER, age 39, of New Orleans, was sentenced after previously pleading guilty to a one count Bill of Information charging him with conspiracy to commit wire fraud relating to a fraudulent application he made to the Gulf Coast Claims Facility (GCCF) for financial assistance in the aftermath of the Deepwater Horizon oil spill in the Gulf of Mexico.
U.S. District Judge Eldon E. Fallon sentenced CUTRER to three years probation and ordered payment of $15,000 in restitution to the Deepwater Horizon Oil Spill Trust.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion. The GCCF required individuals to verify loss of income. On November 4, 2010, the GCCF received CUTRER’s online claim form seeking an emergency 6-month payment in the amount of $10,000, wherein CUTRER falsely stated he lost earnings as a result of the Deepwater Horizon oil spill. Documentation in support of CUTRER’s claim included copies of fraudulent earning statements indicating that prior to the oil spill, CUTRER had worked at Country Inn & Suites, when, in fact, he was never so employed. As a result of these false representations and documentation contained in the claim, the GCCF paid CUTRER approximately $15,000.00.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Loan A. "Mimi" Nguyen.
New Jersey Man Sentenced to Prison for Stealing from Charitable OrganizationRead the Press Release
ALBANY, NEW YORK – Ian Finn, age 39, of Summit, New Jersey, was sentenced yesterday to 21 months of imprisonment for a wire fraud conviction arising from his theft of $238,000 from a charity, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special-Agent-in-Charge of the Albany Division of the Federal Bureau of Investigation.
United States District Judge Gary L. Sharpe also ordered Finn to pay restitution of $238,000 to his victim and sentenced him to three years of supervised release to be served after he is released from prison.
As part of his November 2014 guilty plea, Finn admitted that, while serving as the elected corporate treasurer on the Board of Directors for Rensselaer Acacia Corporation, a charitable organization that holds assets for the Acacia Fraternity at Rensselaer Polytechnic Institute in Troy, New York, he stole $238,000 from the organization’s accounts for his personal use and the use of his friends and family. Finn used the stolen funds to pay personal expenses, including for vacations, bar tabs and electronics. Finn attempted to cover up the theft by making misrepresentations to the organization’s Board of Directors over many years.
This case was investigated by the United States Attorney’s Office for the Northern District of New York and the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Wayne A. Myers.
New Castle Man Pleads Guilty to Robbing Two Neighborhood BanksRead the Press Release
PITTSBURGH, Pa. - A resident of New Castle, Pennsylvania, pled guilty in federal court to charges of bank robbery, United States Attorney David J. Hickton announced today.
Calvin Douglas Smith, 43, formerly of New Castle, Pennsylvania, pleaded guilty to two counts before United States District Mark R. Hornak.
In connection with the guilty plea, the court was advised that on Nov. 5, 2014, Smith robbed Huntington Bank located at 101 E. Washington St., in New Castle, and on Dec. 2, 2014, Smith robbed First Commonwealth Bank located at 27 E. Washington St., in New Castle. The banks are both insured by the Federal Deposit Insurance Corporation.
Judge Hornak scheduled sentencing for March 11, 2016, at 1:30 p.m. For each count, the law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, 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 Cindy K. Chung is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the New Castle City Police Department conducted the investigation leading to the prosecution of Smith.
Nassau Man Indicted for Unlawfully Possessing FirearmsRead the Press Release
ALBANY, NEW YORK – Cory M. Saddlemire, age 34, of Nassau, was indicted today for unlawfully possessing multiple firearms, announced United States Attorney Richard S. Hartunian and Delano A. Reid, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) New York Field Division.
The charges filed against Saddlemire carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years.
Saddlemire is prohibited from possessing firearms because of a Protective Order pending against him and his prior felony conviction.
The charges in the Indictment are merely accusations. The defendant is presumed innocent until proven guilty.
This case is being investigated by the ATF and the Village of Nassau Police Department, and is being prosecuted by Assistant U.S. Attorney Solomon B. Shinerock in coordination with the Rensselaer County District Attorney’s Office.
Mexican National Pleads Guilty to Violation of the Federal Gun Control ActRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JUAN ALBERTO SANCHEZ-ROMERO, age 25, a citizen of Mexico, pled guilty today to a one-count Bill of Information for violations of the Federal Gun Control Act.
According to the court documents, on or about August 20, 2015, SANCHEZ-ROMERO, an alien present illegally in the United States, was found in possession of a firearm.
SANCHEZ-ROMERO faces a maximum term of imprisonment of ten years, a fine of $250,000, three years supervised release after imprisonment, and a $100 special assessment. U.S. District Judge Nannette Jolivette Brown set sentencing for February 11, 2016.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration Enforcement in investigating this matter. Assistant United States Attorney Irene González is in charge of the prosecution.
Metairie Man Pleads Guilty to Trafficking a Minor into New Orleans to Work as a ProstituteRead the Press Release
U.S. Attorney Kenneth A. Polite announced that TORREY LEDELL DAVIS, age 44, most recently from Metairie, pled guilty today to interstate transportation of a minor for the purpose of engaging in criminal sexual activity.
According to the court documents, in November 2012 DAVIS was contacted by an individual living in the Jackson, Mississippi area. That individual inquired whether DAVIS would be willing to train the victim, who had just turned 16-years-old, to work as a prostitute. DAVIS agreed, and on November 26, 2012, DAVIS drove to the Scottish Inn in Jackson, picked up the victim, and drove her back to DAVIS’s residence in Metairie. Once at the residence, DAVIS forced the victim to dress provocatively and pose for sexually suggestive photographs, which he saved on his computer. The pictures were then used to create a prostitution advertisement on an online classified advertisement website often used to promote prostitution. DAVIS also instructed the victim how to work as a prostitute, how to get clients, and how to avoid being caught by law enforcement officials. DAVIS further arranged for the victim to be paired with a female who worked as a prostitute for DAVIS for approximately one year. At DAVIS’s instruction, the female drove the victim to the French Quarter of New Orleans to work as a prostitute. While in the French Quarter that evening, law enforcement officials arrested the minor for prostitution after an undercover officer arranged for the victim to perform a sexual act on the officer in exchange for $500.
DAVIS faces a mandatory minimum term of imprisonment of ten years and a maximum of life, followed by up to a life term of supervised release, and a $250,000 fine. DAVIS can also be required to register as a sex offender. U.S. District Judge Sarah S. Vance set sentencing for February 24, 2016.
“The FBI New Orleans Division is committed to investigating all aspects of Human Sex Trafficking, stated Acting Special Agent in Charge Jeff Dutton. “Through our law enforcement collaboration, we are making every attempt to eradicate human trafficking statewide.”
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
U.S. Attorney Polite praised the work of the Federal Bureau of Investigations, the New Orleans Police Department, and the Louisiana State Police Special Victims Unit for investigating this matter. Assistant United States Attorneys Jordan Ginsberg and K. Paige O’Hale are in charge of the prosecution.
Maryland U.S. Attorney’s Office Announces Supervisory AppointmentsRead the Press Release
The Maryland U.S. Attorney’s Office announced several new supervisory appointments to fill vacancies flowing from the retirement in October of veteran federal prosecutor Barbara S. Sale. Sale served as an Assistant U.S. Attorney for 35 years and retired as chief of the Criminal Division. The U.S. Attorney’s Office named the criminal chief’s conference room in her honor.
“Maryland is fortunate to have a deep bench of exceptionally talented Assistant U.S. Attorneys who are dedicated to the goals of promoting justice, enhancing public safety and security, protecting government property and building confidence in law enforcement,” said U.S. Attorney Rod J. Rosenstein. “Barbara Sale earned universal admiration for her intelligence, fairness and devotion to public service. Our new supervisors and their colleagues will carry forward the proud legacy of the Maryland U.S. Attorney’s Office and maintain its commitment to excellence, integrity and achievement.”
CRIMINAL DIVISION CHIEF
James A. Crowell IV is the new chief of the U.S. Attorney’s Office Criminal Division, which includes 66 Assistant U.S. Attorneys and 12 full-time Special Assistant U.S. Attorneys statewide. Crowell has been a prosecutor for 15 years, including eight years as a Maryland Assistant U.S. Attorney (AUSA). He has served in the U.S. Army Reserves since 1994 and is now a major commanding a company of the 437th Civil Affairs Airborne Battalion. Crowell graduated in 1996 from Hampden-Sydney College, with a B.A. cum laude in History and French. He earned a J.D. in 1999 from Boston University School of Law, where he was note editor of the technology journal. From 1999 to 2001, Crowell was a law clerk to U.S. District Judge Charles A. Pannell, Jr. in the Northern District of Georgia. He joined the National Criminal Enforcement Section of the U.S. Justice Department’s Antitrust Division in 2001 through the Attorney General’s Honors Program, then moved in 2003 to the Public Integrity Section of the Department’s Criminal Division, where he supervised undercover investigations and prosecuted government contract fraud and bribery. He joined the Maryland U.S. Attorney’s Office in 2007. Crowell received the Attorney General’s Distinguished Service award in 2011. He won the U.S. Attorney’s fraud prosecution award in 2009 and the public corruption award in 2011.
SOUTHERN DIVISION SUPERVISORS
Arun Rao replaces Crowell as Chief of the U.S. Attorney’s Office’s Southern Division, which includes 21 Assistant U.S Attorneys and 5 full-time Special Assistant U.S. Attorneys who are responsible for federal criminal cases from Montgomery, Prince George’s, Charles, Calvert and St. Mary’s Counties. Rao has been a prosecutor for 12 years, including five years as a Maryland AUSA and two years as the Southern Division’s deputy chief. He earned a B.A. with high honors from the University of Virginia in 1998, majoring in Government and Foreign Affairs. Rao received his J.D. in 2001 from New York University School of Law, where he was on the moot court board. After law school, Rao worked for one year as an associate at Cravath, Swaine & Moore. He then clerked for Judge Julia Smith Gibbons of the U.S. Court of Appeals for the Sixth Circuit from 2002 to 2003. After completing his clerkship, Rao served as an Assistant District Attorney in Manhattan for four years. He was an AUSA for the Western District of Tennessee for three years before he transferred to Maryland in 2010. Rao also served on detail at the Office of the White House Counsel from 2012 to 2013 and as the Professional Responsibility Officer for the Southern Division.
Kristi O’Malley is the Principal Deputy Chief for the Southern Division. O’Malley has been a Maryland AUSA for five years. She earned a B.A. summa cum laude in International Relations from Claremont McKenna College in 1999. She then completed a year of course work at Moscow State University and worked for two years as a program analyst with the Justice Department’s Office of Overseas Prosecutorial Development, Assistance & Training. O’Malley received a J.D. in 2005 from the University of Virginia School of Law, where she was a member of the Order of the Coif, an editor of the international law journal and a winner of the moot court competition. She worked for one year as an associate at Latham & Watkins, then clerked for one year for U.S. District Judge Emmet G. Sullivan in Washington, DC. O’Malley returned to Latham & Watkins from 2007 until she joined the U.S. Attorney’s Office in 2010. O’Malley started in the Baltimore Major Crimes Section and later transferred to the Southern Division, where she has managed the Project Safe Childhood and law clerk programs and served as the civil rights coordinator. She won the U.S. Attorney’s fraud prosecution award in 2013.
Bryan Foreman is the Southern Division’s Deputy Chief for Litigation. Foreman has been a prosecutor for 25 years, including 18 years as a Maryland AUSA. Foreman earned a B.A. in Government from Georgetown University in 1984 and a J.D. from the University of Maryland in 1987. He was an attorney with the Office of General Counsel for the Securities & Exchange Commission from 1987 until 1990. From 1990 to 1995, Foreman was a trial attorney with the Justice Department’s Fraud Section and a member of the Dallas Bank Fraud Task Force. Foreman then worked for two years as an AUSA for the District of Columbia before joining the Maryland U.S. Attorney’s Office in 1997. At the Maryland U.S. Attorney’s Office, Foreman was the Project Safe Childhood coordinator from 1998 to 2004 and the Computer Hacking and Intellectual Property coordinator from 2007 to 2011. He also served on detail as the First Assistant U.S. Attorney for the District of the Virgin Islands from 2011 to 2013.
SENIOR LITIGATION COUNSEL
Deborah A. Johnston has been reappointed to another term as Senior Litigation Counsel for the Southern Division, responsible for training AUSAs. Johnston has been a prosecutor for 32 years, including 21 years as a Maryland Assistant U.S. Attorney. She earned a B.A. in Economics from Catholic University in 1975 and a J.D. from Catholic University’s Columbus School of Law in 1978. Johnston was a law clerk to Prince George’s County Circuit Court Judge Audrey E. Melbourne for one year, then an Assistant State’s Attorney for Prince George’s County from 1979 to 1984. She served from 1984 to 1985 as an Assistant Public Defender for Prince George’s County, then worked from 1985 to 1988 as an associate with a private law firm. Johnston rejoined the Prince George’s County State’s Attorney’s Office in 1988 and served as Chief of the Homicide/Narcotics Unit and as Deputy State’s Attorney. Johnston joined the Maryland U.S. Attorney’s Office in 1994 and served as chief of the Southern Division from 1999 to 2001. She won the U.S. Attorney’s Barney Skolnik award for prosecuting of a case of unusual public significance in 2000, the U.S. Attorney’s Gary Jordan award for exemplary performance in 2006, and the Justice Department’s Director’s Award for superior performance in 1998 and 2001.
Manhattan U.S. Attorney Announces Conviction of Michael Danilovich on Racketeering, Securities Fraud, Health Care Fraud, Mail Fraud, Wire Fraud, and Money Laundering ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL DANILOVICH was found guilty today on racketeering conspiracy, securities fraud, health care fraud, mail fraud, wire fraud, and money laundering charges following a five-week jury trial before United States District Judge Deborah A. Batts. The jury convicted DANILOVICH of racketeering arising out of his operation, from 2007 through 2012, of the largest single no fault automobile insurance fraud scheme ever charged; his operation, from 2007 to 2009, of two investment fraud schemes, Lyons Ward & Associates and the Rockford Group; and his attempted operation, from 2011 to 2012, of a third investment fraud scheme, Baron & Caplan, including after he was arrested and released on bail in this case.
U.S. Attorney Preet Bharara said: “Michael Danilovich has been convicted by a unanimous jury of committing several frauds. As the jury found, he took a lead role in scamming insurance companies of over $100 million in fraudulent medical treatments and in engaging in other investment scams that swindled investors out of another $18 million. Today's verdict ensures that Danilovich will be punished for the wide-ranging frauds he perpetrated.”
According to the Superseding Indictment and evidence admitted at trial:
From 2007 through 2012, DANILOVICH was a leader of an enterprise engaged in a pattern of racketeering that included a massive scheme to defraud automobile insurance companies under New York’s no fault insurance law, multiple securities fraud schemes, money laundering, and the operation of illegal gambling businesses.
Under New York State Law, every vehicle registered in the State is required to have no fault automobile insurance, which enables the driver and passengers of a registered and insured vehicle to obtain benefits of up to $50,000 per person for injuries sustained in an automobile accident, regardless of fault (the “No Fault Law”). The No Fault Law requires prompt payment for medical treatment, thereby obviating the need for claimants to file personal injury lawsuits in order to be reimbursed. Under the No Fault Law, patients can assign their right to reimbursement from an insurance company to others, including medical clinics that provide treatment for their injuries. New York State Law also requires that all medical clinics in the State be incorporated, owned, operated, and controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No Fault Law. Insurance companies will not honor claims for medical treatments from a medical clinic that is not actually owned, operated, and controlled by a licensed medical professional.
From 2007 through 2012, DANILOVICH’s organization defrauded automobile insurance companies of more than $100 million by, among other things, creating and operating medical clinics that provided unnecessary and excessive medical treatments in order to take advantage of the No Fault Law. In addition, Danilovich’s organization fraudulently owned and controlled more than a dozen medical professional corporations (“PCs”) – including no fault clinics, MRI offices, and acupuncture and chiropractic PCs – by paying licensed medical professionals to use their licenses to incorporate the professional corporations. DANILOVICH and his co-conspirators paid kickbacks of thousands of dollars to runners to recruit patients to receive the same battery of tests and treatments, and received kickbacks from other co-conspirators for referring patients for additional unnecessary treatments. All told, Danilovich’s organization billed insurance companies for tens of millions of dollars in fraudulent medical treatments. Furthermore, DANILOVICH and his co-conspirators laundered the proceeds of the fraud through check cashing entities and shell companies, and used the money to pay for luxury cars, watches, and vacations.
In addition to the no fault insurance fraud scheme, DANILOVICH was convicted for operating two investment fraud schemes that swindled innocent victims out of nearly $18 million. Both schemes – Lyons Ward & Associates and the Rockford Group – purported to be settlement claims funding companies that invested in lawsuits in return for a portion of future settlements. DANILOVICH also attempted to operate a third scheme, Baron & Caplan, including after he was arrested and released on bail in this case. As part of these schemes, DANILOVICH and his co-conspirators created bogus documents and account statements used by cold-callers to solicit victims through false representations. In reality, there was no investment fund at all; instead, DANILOVICH and his co-conspirators simply stole the money invested by victims and laundered the proceeds by wiring them overseas to shell companies in Eastern Europe, which were then turned into cash in the United States.
DANILOVICH’s organization also operated high-stakes illegal poker games and illegal sports books.
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DANILOVICH was convicted of one count of conspiracy to commit racketeering, which carries a maximum sentence of 20 years in prison. In addition, DANILOVICH was convicted of conspiracies to commit securities fraud, health care fraud, mail fraud, wire fraud, and money laundering, as well as substantive counts of securities fraud, health care fraud, mail fraud, wire fraud, and money laundering, which, in total, carry a maximum sentence of 260 years in prison. In total, DANILOVICH faces a maximum sentence of 280 years in prison. DANILOVICH is scheduled to be sentenced on March 8, 2016, at 11:00 a.m., before Judge Batts. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
DANILOVICH, 41, of Brooklyn, New York, is the thirty-sixth defendant convicted in this case. DANILOVICH was remanded pending sentencing following his conviction.
At DANILOVICH’s first trial in the fall of 2013, a mistrial was declared after the jury failed to reach a unanimous verdict on all counts.
U.S. Attorney Preet Bharara thanked the Federal Bureau of Investigation and the New York City Police Department for their continued outstanding work in this investigation. Mr. Bharara also thanked the National Insurance Crime Bureau, the investigative units of the insurance companies, the Manhattan District Attorney’s Office, and the Alabama Securities Commission for their valuable assistance with the investigation.
The case is being prosecuted by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorneys Daniel S. Noble, Joshua A. Naftalis, and Jaimie L. Nawaday are in charge of the prosecution.
Longmeadow Man Pleads Guilty to Tobacco Tax Fraud and Illegal Check-Cashing BusinessRead the Press Release
BOSTON – A Longmeadow, Mass. man pleaded guilty in two cases in U.S. District Court in Springfield in connection with evading payment of tobacco sales tax and operating an illegal check-cashing business.
Satish Kumar, 60, pleaded guilty in one case to one count of conspiracy, three counts of wire fraud and one count of money laundering. In the second case, Kumar pleaded guilty to one count of failure to register a money transmitting business. U.S. District Court Judge Mark. G. Mastroianni scheduled sentencing for April 13, 2016.
In 2006, Kumar purchased a wholesale warehouse business in Berlin, Conn. Kumar systematically evaded Connecticut state tobacco taxes, in selling cigars and smokeless tobacco to convenience stores and gas stations. Kumar consistently filed false tobacco tax returns with Connecticut state tax authorities, paying just two percent of the tax owed. In 2008, Kumar sold the business, but he continued to receive proceeds from the continuing tobacco tax fraud that occurred at the Berlin warehouse. In June 2012, the fraud ceased when federal agents executed a search warrant at the Berlin warehouse and 12 other locations in Massachusetts, Connecticut, and Pennsylvania. During the six-year scheme, Kumar and others helped to evade over $16 million in taxes owed to the state of Connecticut.
In the illegal check cashing case, Kumar owned a liquor store in Springfield, Mass. that also acted as an unregistered money transmitting business. Kumar cashed checks without the required registration despite warnings from his bank. Among the checks cashed were 195 United States Treasury tax refund checks worth approximately $1.2 million obtained through fraudulent returns filed with the IRS.
The charges of conspiracy and failure to register a money transmitting business provide for sentences of no greater than five years in prison, three years of supervised release and a $250,000 fine. The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. The charge of money laundering provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Commissioner Mark Nunnelly of the Massachusetts Department of Revenue; Commissioner Kevin B. Sullivan of the Connecticut Department of Revenue Services; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The tobacco tax fraud case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office. The illegal check-cashing case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office and Sarah Devlin of the Justice Department’s Asset Forfeiture and Money Laundering Section.
Logan County man pleads guilty in Federal court to selling oxycodoneRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Jonathan Belcher, 37, of Mt. Gay, West Virginia, pleaded guilty today in federal court in Charleston to distributing oxycodone. Belcher admitted to selling oxycodone to a confidential informant at his residence on August 25, 2014. He further admitted to having sold oxycodone pills for approximately two years prior to his arrest. Belcher faces up to 20 years in federal prison and a $1,000,000 fine when he is sentenced in federal court in Charleston on February 22, 2016.
This case was investigated by the U.S. 119 Drug Task Force. The prosecution is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Leader of Maryland to West Virginia heroin trafficking operation convicted in federal courtRead the Press Release
MARTINSBURG, WEST VIRGINIA – Brian Alexander Hall, 27, of Windsor, Maryland, was convicted of heroin trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Hall orchestrated an extensive, multi-state heroin distribution network in which a large group of individuals repeatedly travelled across state lines to procure quantities of heroin from Hall in Baltimore, Maryland, and the surrounding region. The individuals then returned to locations in West Virginia, Maryland, Virginia, and Pennsylvania to redistribute the heroin obtained from Hall.
Federal authorities interrupted the operation in June 2015 when 41 individuals were charged in 163-count indictment. Three of the individuals that participated in the operation have been sentenced, and an additional 30 defendants have pled guilty in federal court and will be sentenced in the coming months.
Hall pled guilty today to one count of “Conspiracy to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Anna Krasinski prosecuted the case on behalf of the government. The Federal Bureau of Investigation and the Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Justice Department Asks Federal Court to Stop Maryland Tax Preparer from Promoting Tax Fraud SchemeRead the Press Release
The United States filed a complaint seeking to permanently bar an Aberdeen, Maryland, woman and the tax preparation business she operates from preparing federal tax returns and promoting a frivolous tax avoidance scheme, the Justice Department announced today.
The complaint against Charese Johnson, doing business as Prodigy Accounting Services, was filed in the U.S. District Court for the District of Maryland. According to the complaint, Johnson prepares income tax returns for customers that fraudulently overstate the refunds due by claiming false withholdings or credits.
The complaint alleges that Johnson promotes a tax avoidance scheme based upon the bogus “redemption” theory, in which individuals assert that the federal government maintains secret accounts for U.S. citizens that can be accessed by issuing various forms to the Internal Revenue Service (IRS). According to the complaint, Johnson prepares fraudulent IRS Forms 1099-A (Acquisition or Abandonment of Secured Property) and 8281 (Information Return for Publicly Offered Original Issue Discount Instruments) for her customers and files them with the IRS in order to claim enormous tax refunds on their behalf. The IRS and the courts have repeatedly made clear that the theories Johnson uses in filing the refund claims are frivolous and pure fiction, according to the complaint. The complaint further alleges that Johnson’s dozens of customers have sought millions of dollars in bogus refunds as a result of Johnson’s conduct.
Return preparer fraud, inflated refund claims and frivolous tax arguments are all among the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax return preparer and has launched a free directory of federal tax return preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Jury Finds a Convicted Felon Guilty of Possessing a Firearm and AmmunitionRead the Press Release
TULSA, Okla.—On Tuesday, a federal jury found Phillip Lamont Morgan, 40, guilty of possession of a firearm by a convicted felon, announced Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma. United States District Court Judge James H. Payne will sentence Morgan on January 17, 2016.
On September 28, 2013, Morgan was stopped by a Tulsa Police officer for committing traffic violations on his bicycle. Morgan then gave a false name, date of birth and social security number to the officer. Morgan became physical with the officer after the officer tried to prevent Morgan from reaching into his left pants pocket. Other Tulsa police officers assisted in taking Morgan into custody. After being taken into custody, Morgan was searched and a loaded revolver was found in his left pants pocket.
Prior to this offense, Morgan had been convicted of multiple felonies. Morgan was previously convicted for possession of a firearm by a convicted felon in the Northern District of Oklahoma on October 15, 2003.
This case was investigated by the Tulsa Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorneys Neal C. Hong and Timothy L. Faerber prosecuted the case.
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Individual Sentenced to 14 Years in Prison for His Participation in A Drug Trafficking Organization That Operated at the Luis Muñoz Marín International AirportRead the Press Release
SAN JUAN, Puerto Rico – Today, Carlos I. Arce-López, aka “Ferretero,” was sentenced to 14 years in prison for conspiracy to possess with intent to distribute cocaine, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. On April 23, 2015, the defendant pled guilty to three counts from two separate indictments, charging conspiracy to possess with intent to distribute controlled substances. He also pled guilty to money laundering in relation to a drug trafficking crime.
In the first indictment, Criminal Case 12-413(FAB), 20 individuals were charged for aiding and abetting each other, and conspiring to possess with intent to distribute in excess of 9,000 kilograms of cocaine, aboard American Airlines commercial flights. At times pertinent to this indictment, convicted felon Wilfredo Rodríguez-Rosado, aka “Mogoyo” recruited and organized a group of individuals to package, transport and deliver suitcases loaded with kilograms of cocaine to the American Airlines cargo area at the Luis Muñoz Marin International Airport. Moreover, he recruited and organized a group of American Airlines employees to ensure that those suitcases were smuggled into American Airlines flights destined to Miami and Orlando, Florida and Newark, NJ.
In the second indictment, Criminal Case 13-148(FAB), Arce-López participated in a conspiracy in which $800,000 of illegal proceeds were going to be used to purchase over 150 kilos of cocaine in the Dominican Republic to import into Puerto Rico. The defendant’s role was to provide the money and to coordinate with other coconspirators the importation of multi-kilogram quantities of cocaine from the Dominican Republic to Puerto Rico. Arce-López also traveled to the Dominican Republic from Puerto Rico to meet with other co-conspirators to plan and coordinate the transportation of multi-kilogram loads of cocaine by boat.
The cases were investigated by the DEA, the PRPD, and the FBI, with the collaboration of the San Juan Municipal Police. The defendant was sentenced by United States District Court Judge Francisco A. Besosa. The case was prosecuted by Assistant U.S. Attorney Olga Castellón-Miranda.
Honduran National Pleads Guilty to Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOSE ALEXANDER LOPEZ-LOPEZ, age 20, a citizen of Honduras, pled guilty today to a one-count indictment with illegal reentry of a removed alien.
According to court documents, LOPEZ-LOPEZ reentered the United States on or about September 28, 2015, after having been previously deported on April 2, 2014. LOPEZ-LOPEZ faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment. U.S. District Judge Nannette Jolivette Brown set sentencing for December 3, 2015.
U.S. Attorney Polite praised the work of the United States Immigration and Customs Enforcement Agency in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Haydenville Woman Indicted for Stealing Social Security BenefitsRead the Press Release
BOSTON – Shirley Warner, 52, of Haydenville, was indicted in U.S. District Court in Springfield for stealing her deceased mother’s social security benefits for almost four years.
The indictment alleges that between August 2010 and March 2014, after her mother died, Warner stole over $45,000 worth of Social Security benefits intended for her mother.
The charge of theft of public money provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Deepika Bains Shukla of Ortiz’s Springfield Branch Office.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Harvey Woman Sentenced for Disaster Fraud and TheftRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JENNIFER WILLIAMS, 33, of Harvey, was sentenced after previously pleading guilty to two-count Indictment charging her with one count of disaster fraud and five counts of theft from the United States.
U.S. District Judge Nanette Jolivette Brown sentenced WILLIAMS to one day of incarceration. In addition to incarceration, WILLIAMS was sentenced to 30 days of home detention as part of her five years of supervised release, a $600 special assessment, and restitution in the amount of $17,040 to be repaid to FEMA.
According to the court records, on or about October 15, 2012, following Hurricane Isaac, WILLIAMS filed an application with the Department of Homeland Security Federal Emergency Management Agency (FEMA). WILLIAMS claimed that she needed rental assistance due to damage in her home and made false statements to FEMA with regard to where she was temporarily living. After receiving a total of $17,040 in rental assistance, Department of Homeland Security investigators determined that WILLIAMS in fact never rented another property after Hurricane Isaac and that her application and supporting documentation was false.
U.S. Attorney praised the work of the Department of Homeland Security, Office of Inspector General in investigating this matter. Assistant United States Attorney Edward J. Rivera of the Fraud Unit was in charge of the prosecution.