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22 December 2015
Search Engine Optimizer Admits Extorting Money from a Local Merger and Acquisitions FirmRead the Press Release
DALLAS, Texas — A man, who, along with his sister, was indicted last year on felony offenses stemming from their attempts to extort money from a business in Dallas, pleaded guilty in federal court today, announced John Parker, U.S. Attorney for the Northern District of Texas.
William Stanley, 53, a/k/a “William Laurence,” “Bill Stanley,” “William Davis,” “William Harris,” and “William L. Stanley,” pleaded guilty today to one count of Hobbs Act – Extortion. He faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. Sentencing is set for January 4, 2016, before U.S. District Judge David C. Godbey.
Stanley, a U.S. citizen, most recently resided in Romania with his wife, a Romanian national. In 2013, he traveled several times between Europe and the United States. On March 3, 2014, he was arrested on a related federal criminal complaint at George Bush Intercontinental Airport in Houston, where he arrived on a flight from Europe. He has been in custody since that time.
Stanley’s sister, Lynn Faust, a/k/a “Lynn Michaels,” 55, was arrested in Sweden in May 2014. Ms. Faust was extradited and appeared in court in the Northern District of Texas on October 16, 2014. On October 21, 2014, the government withdrew its motion to detain, and the Court released Faust on conditions of release. She pleaded guilty in July 2015 to a Superseding Information charging one count of receiving the proceeds of extortion and aiding and abetting. She faces a maximum statutory penalty of three years in federal prison and a $250,000 fine. Her sentencing is set for February 1, 2016, before Judge Godbey.
Faust assisted Stanley in operating his search engine optimization (SEO) company. A legitimate SEO business engages in standard practices such as optimizing the underlying HTML code on a website for certain keywords that a search engine indexer, (e.g., a web crawler for Google, Bing, etc.) would associate with a given search query. An illegitimate SEO business engages in deceptive tactics to affect search engine rankings and the volume of results. Such deceptive tactics include creating fraudulent reviews (good or bad), creating fictitious websites, or hiding text on websites.
While Stanley engaged in some legitimate SEO work, he also engaged in illegitimate and illegal SEO activities. Stanley also extorted individuals and companies by threatening to engage in the illegitimate SEO work, that being posting fraudulent comments and creating negative reviews online, if the victim did not pay him a certain sum of money.
In November 2009, a Dallas-based firm, GE, entered into a contract with Stanley for SEO services and reputation management. Stanley was hired because of his ability to improve a firm’s online reputation through search results. After approximately one year, however, GE sought to terminate its relationship with Stanley after it determined he had acted outside of his contracted duties. Stanley also created websites that had the ability to damage GE’s reputation by associating GE with a scam. Stanley demanded additional payments to end his contractual relationship with GE and to surrender the administrator rights to the websites to GE. From November 2010 through January 2011, GE paid Stanley a total of $80,000 to terminate the relationship.
Posing as “William Davis” and “William Laurence,” Stanley transmitted threatening communications, via email and telephone, from foreign countries to GE in the Northern District of Texas. Those communications threatened to post comments on the Internet wrongfully disparaging GE’s reputation, if GE did not send money to Stanley.
Because of Stanley’s threats to harm GE’s reputation through negative Internet posts that would adversely affect GE’s ability to conduct business if it failed to send money, GE responded to the wrongful inducement by sending four payments totaling $29,556 by MoneyGram to Stanley in Brasov, Romania.
According to the stipulated facts outlined in the factual resume, the government can readily prove that Stanley’s extortive conduct caused GE to make the above payments and to lose revenue. The extortive conduct also affected interstate commerce. In addition, the government contends that as of May 2014, it could readily prove that Stanley engaged in similar extortionate conduct with approximately 40 to 45 victims (including GE). The government contends the loss attributed to Stanley was over $230,000.00.
The FBI is investigating. Assistant U.S. Attorney C.S. Heath is in charge of the prosecution.
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Royersford Man Pleads Guilty to Child Pornography Involving Hidden CameraRead the Press Release
PHILADELPHIA – Kevin Rebbie, 56, of Royersford, PA, pleaded guilty today to child pornography charges that included 19 counts of manufacturing child pornography and one count of possession of child pornography.
According to court documents, in February 2015, Minor #1 found a camera hidden underneath the sink in the defendant’s bathroom. The Limerick Township Police Department was contacted and a search warrant was later executed on Rebbie’s home. Seized were a total of 80 videos, taken by Rebbie with a camera hidden in the bathroom, 19 of which captured minor boys and girls as they undressed, showered, and used the toilet. The videos were saved by Rebbie from his hidden video camera to his computer.
U.S. District Court Judge Nitza I. Quinones Alejandro scheduled a sentencing hearing for April 13, 2016. Rebbie faces a mandatory minimum sentence of 15 years in prison with a maximum sentence of 580 years’ imprisonment, a possible fine, and up to a lifetime of supervised release.
The case was investigated by the Limerick Township Police Department in conjunction with Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Michelle Rotella.
Rochester Man Pleads Guilty to Enticement of A MinorRead 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 today that Jason Cortese, 34, of Greece, NY, pleaded guilty to enticement of a minor before U.S. District Judge Elizabeth A. Wolford. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life and a fine of $250,000.Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that Cortese used the internet and a smart phone to persuade a 12 year old minor to engage in sexually explicit activity. This activity included engaging in sexually explicit chats, attempting to have the minor send sexually explicit images of themselves and to receive and distribute images of child pornography.
A family member of the minor notified law enforcement officials after seeing the contents of the 12-year-old’s cell phone which included chats between the minor and the defendant. Cortese was known to the minor as a family friend. The minor disclosed that the two started chatting directly with one another through Facebook and then through Kik and Instagram.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation Child Exploitation Task Force, the Monroe County Sheriff’s Office, under the direction of Sheriff Patrick O’Flynn and the Irondequoit Police Department, under the direction of Chief Richard Tantalo. The task force includes the Monroe County Sheriff’s Office, the Rochester Police Department, and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
Sentencing is scheduled for March 24, 2016, at 2:00 p.m., before Judge Wolford.
Roanoke Chemical Distributor, Chem-Solv Inc., Pleads Guilty to Illegally Storing and Transporting Hazardous Waste and Agrees to Pay $1.5 Million in PenaltiesRead the Press Release
Chem-Solv Inc. (Chem-Solv), formerly known as Chemicals & Solvents Inc., pleaded guilty today to illegally storing hazardous waste at its facility in Roanoke, Virginia, and to illegally transporting hazardous waste from that facility to another location, Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney John P. Fishwick of the Western District of Virginia announced today.
As a part of the plea agreement, Chem-Solv has agreed to pay a $1 million criminal fine for these violations, as well as an additional $250,000 to fund environmental community service projects. Chem-Solv has agreed to serve five years’ probation, during which time it must develop and implement an environmental compliance plan and be subjected to yearly independent environmental audits. In conjunction with the criminal settlement, the U.S. Environmental Protection Agency has reached a civil settlement with Chem-Solv that requires the company to pay a $250,000 penalty to settle alleged violations of improper hazardous waste storage at Chem-Solv’s Roanoke facility.
Chem-Solv operates a chemical blending and distribution facility on Industry Avenue S.E. in Roanoke as well as distribution facilities in Colonial Heights, Virginia, Rock Hill, South Carolina, and Piney Flats, Tennessee. Chem-Solv is in the business of purchasing chemicals and then reselling them to customers, either directly or after repackaging. As part of its ordinary business practices, Chem-Solv generated hazardous waste. A hazardous waste is waste which, because of its designation, quantity, concentration, or characteristics, poses a substantial present or potential hazard to human health or the environment.
Count one of the information is based on a spill of several hundred gallons of ferric chloride – a hazardous substance – on the Chem-Solv facility in Roanoke in June 2012. Although most of the waste was cleaned up using vacuum trucks, some of the ferric chloride flowed from the Chem-Solv facility onto an adjoining property both before, and during, the cleanup. The pleadings allege that the adjoining property owner was not notified that ferric chloride had leaked onto their property. Chem-Solv then employed a waste transportation company to transport the waste to a disposal facility. Hazardous waste may only be transported by permitted carriers, and it must be properly placarded and be accompanied by a hazardous waste manifest identifying the waste and its characteristics. The pleadings allege that, although Chem-Solv was aware of the hazardous nature of ferric chloride, it did not properly test the waste and instructed the transporter to transport the waste as non-hazardous, without the proper placards and manifests.
Count two of the information charges Chem-Solv with the improper storage of hazardous waste. Chem-Solv was given advance notice of an EPA inspection in December 2013. At the time the advance notice was given, Chem-Solv was storing numerous containers of chemical waste on its facility that should have been disposed of properly. The pleadings allege that Chem-Solv directed its employees to load three trailers with the chemical waste in an attempt to prevent EPA inspectors from discovering it. Two of the three trailers were taken offsite. The third trailer, which was not road worthy, was stored on the Chem-Solv property for almost a year and its contents were discovered by law enforcement officers on Nov. 19, 2014, while executing a search warrant. That trailer was found to contain hazardous waste that Chem-Solv did not have a permit to store on its facility.
“With this plea agreement, Chem-Solv has an opportunity to put its egregious conduct behind it and learn from these mistakes by developing a strong environmental compliance plan, as required,” said Assistant Attorney General Cruden. “The Justice Department and our federal partners will continue to investigate and prosecute anyone whose illegal conduct puts workers and the public at risk of harm from hazardous and toxic materials.”
“A corporation’s concern with the bottom line profit can cause it to cut corners by attempting to circumvent laws that are intended to protect the community and the environment,” said U.S. Attorney Fishwick. “The prosecution of Chem-Solv should send a strong message that such corporate actions will not be tolerated and will be punished.”
“The chemicals in this case are toxic, highly corrosive and acidic, and today’s plea demonstrates that when companies put the public at serious risk, they will be held accountable for their actions,” said Assistant Special Agent in Charge Jennifer Lynn of EPA’s criminal enforcement program in Virginia.
“The guilty plea entered today by Chem-Solv for illegally storing and transporting hazardous waste is a clear signal to those that would seek to circumvent or disregard transportation-related laws and regulations that there are serious repercussions for doing so,” said Regional Special Agent in Charge William Swallow of the U.S. Department of Transportation Office of Inspector General.
The investigation was conducted by Special Agents of EPA’s Criminal Investigation Division and the U.S. Department of Transportation’s Office of Inspector General. Assistance in the investigation was provided by the Virginia Department of Environmental Quality, Roanoke City Police Department and the Roanoke Fire-EMS Department and the Blue Ridge Environmental Task Force. The prosecution was handled by Assistant U.S. Attorney Jennie L. M. Waering, Senior Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section, and EPA Regional Criminal Enforcement Counsel David Lastra.
Chem-Solv Plea Agreement
Chem-Solv Statement of Facts
Randolph County Man Charged with Methamphetamine OffenseRead the Press Release
On December 8, 2015, Christopher L. Dallas, 35, of Chester, was charged by indictment with conspiracy to distribute methamphetamine, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
The indictment alleges that the offense occurred between 2014 and June 2015 in Perry and Randolph Counties. Dallas made his initial appearance in federal court on December 21, 2015. He was ordered held without bond pending a February 27, 2016, jury trial.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The methamphetamine offense carries a maximum penalty of up to 20 years’ imprisonment, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Percy Police Department, Steeleville Police Department, Illinois State Police Methamphetamine Response Team, DuQuoin Police Department, Pinckneyville Police Department, and Drug Enforcement Administration. The Randolph and Perry County States Attorney’s Offices also assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Rancho Cordova Woman Charged with Falsifying Social Security RecordsRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned an indictment on Thursday, December 17, 2015, against Nelli Kesoyan, 43, of Rancho Cordova, charging her with making false entries and reports, United States Attorney Benjamin B. Wagner announced.
According to court documents, Kesoyan was employed by the Social Security Administration as a claims representative. On October 10, 2014, she made false entries in Social Security Administration records in order to deceive and mislead United States officials conducting naturalization proceedings for another individual.
The indictment was unsealed on Monday, and Kesoyan was arraigned Monday afternoon. She pleaded not guilty. A status conference was set for January 26, 2016, at 09:15 AM in Courtroom 6 before United States District Judge John A. Mendez.
This case is the product of an investigation by the Social Security Administration Office of the Inspector General, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Jeremy Kelley and Jared Dolan are prosecuting the case.
If convicted, Kesoyan faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would 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. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Previously Convicted Sex Offender Sentenced to 198 Months in Prison for Distribution of Child PornographyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Shaun Valente, age 30, of Montgomery Village, Maryland, today to 198 months in prison, followed by lifetime supervised release, for distribution of child pornography. Judge Grimm also ordered that upon his release from prison, Valente must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
According to Valente’s plea agreement, from at least March 2013 through September 2014, Valente used his computer to distribute and to receive child pornography. On February 26, 2014, Dropbox, an online storage platform, reported to the National Center for Missing and Exploited Children (NCMEC) that images documenting the sexual abuse of minors had been uploaded to Valente’s Dropbox account. Valente admitted that he also received and distributed images depicting minors engaged in sexually explicit conduct through email.
On September 12, 2014, HSI Special Agents executed a search warrant at Valente’s residence and seized a notebook computer, cellular phone and flash drives that contained more than 4,000 images and 175 videos depicting children engaged in sexually explicit conduct. The child pornography included images of prepubescent children, and material that portrayed sadistic or masochistic conduct, or other depictions of violence.
According to his plea agreement, on March 22, 2005, Valente was convicted in Montgomery County Circuit Court for sexual abuse of a minor and a child pornography offense, for which he was sentenced to four years in prison, with all but 18 months suspended.
Valente has been detained since his arrest.
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. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Kristi N. O’Malley and Joseph R. Baldwin, who prosecuted the case.
Pipeline Company Field Office Manager Charged with Fraud and Aggravated Identity TheftRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that an Indictment was returned by a grand jury in Scranton on December 15, 2015 indicting the former manager of the Dunmore Office of a pipeline company on charges that he defrauded his employer of $300,000 with wire fraud and aggravated identity theft.
Kevin L. Reese, age 27, a resident of Little Rock, Arkansas, is alleged to have defrauded Sheehan Pipe Line and Construction Company through a fraudulent payroll check scheme.
According to United States Attorney Peter Smith, the Indictment, which was unsealed today following Reese’s arrest, alleges that while managing a field office in Dunmore, Reese created and generated fraudulent payroll checks for Sheehan employees for time periods that began either before or after the employees worked for Sheehan. Reese allegedly created the payroll checks by unlawfully using the names of Sheehan employees, forged their names to the checks and used the money for his own personal gain. The scheme began in November 2014 and continued through August 2015 until the company discovered the fraud, conducted its own investigation and fired Reese.
Sheehan Pipe Line, which has its main office in Tulsa, Oklahoma, Reese was an office manager for the company from 2012 to 2015. His duties included oversight of company projects in the Scranton area and management of payroll. The fraudulent checks were allegedly cashed by Reese at an on site check cashing service set up by the company.
The investigation was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Michelle Olshefski.
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. In this case, the maximum penalty under the federal statute for wire fraud is 20 years imprisonment and a $250,000 fine on each count. The maximum penalty under the federal statute for aggravated identity theft is 2 years imprisonment consecutive to the predicate crime, and a $250,000 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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Philadelphia Man Charged as A Felon in Possession of A FirearmRead the Press Release
PHILADELPHIA - Henry West, 37, of Philadelphia, PA, was charged today by indictment with possession of a firearm by a convicted felon, announced United States Attorney Zane David Memeger. The indictment charges that West committed these offenses in Philadelphia, Pennsylvania, on or about August 29, 2015.
If convicted of all charges, West faces a maximum sentence of 10 years in prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorney Salvatore L. Astolfi.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Omaha Man Sentenced to 6 Years for Receiving Child PornographyRead the Press Release
James A. Wiehe, 54, was sentenced in federal court in Omaha, Nebraska, for receiving child pornography. The Honorable Laurie Smith Camp, Chief Judge, sentenced Wiehe to six years imprisonment. There is no parole in the federal prison system. After his release from prison, he will begin a five-year term of supervised release and will be required to register as a sex offender.
In November of 2014, a Douglas County Sheriff’s Deputy learned that Wiehe had child pornography available on his computer for sharing. The images available for sharing involved ten-year-old girls engaged in sexually explicit conduct.
A search warrant was executed on Wiehe’s residence on March 16, 2015. Although he had used file wiping software to delete child pornographic images, forensic analysis revealed recent child pornographic videos had been received. Search terms were recovered reflecting searches for prepubescent children between the ages of six and eleven.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Oil and Gas Company Pleads Guilty to FelonyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that WALTER OIL & GAS COMPANY, a Texas corporation residing in Houston, Texas, pled guilty today to a one-count Bill of Information which charged the company with failing to provide notification to the National Response Center of a hazardous discharge, in violation of Title 33, United States Code, Section 1321(b)(5). This charge relates to WALTER OIL & GAS COMPANY’s oil and gas production in the Grand Isle area of the Gulf of Mexico. As part of the guilty plea, the company agrees to pay a total monetary penalty of $400,000 and serve a two-year term of probation. If accepted by the Court, the $400,000 monetary penalty will be divided as follows: $320,000 to the United States Treasury, $40,000 to the Louisiana Department of Environmental Quality, $30,000 to the Louisiana State Police Emergency Services Unit and $10,000 to the Southern Environmental Enforcement Network.
According to court documents, WALTER OIL & GAS COMPANY operated a subsea well for the purpose of extracting oil and gas, which would then be sent to the offshore platform identified as Grand Isle 115, by means of a submersed pipeline. WALTER OIL & GAS COMPANY was tasked with ensuring that all material extracted from their subsea wells or introduced into the production pipeline, was managed properly and did not enter the waters of the United States. During oil and gas exploration and production, a paraffin plug sometimes develops which slows the flow in the pipeline connected to the subsea well and offshore platform. An ensuing investigation revealed that in February 2014, personnel on the Grand Isle platform pushed hydrate inhibitor (MXU 5-2684) and paraffin solvent (MC P-3810) by way of a service line, to return the flow in the pipeline to an optimal level. The attempt to clear the plug was unsuccessful and a pipeline remediation plan was developed, which included the recovery of the pipeline to the surface for the removal of any paraffin plugs. On March 31, 2014, while conducting the pipeline remediation project, a portion of the MXU 5-2684 material leaked into the Gulf of Mexico by way of a malfunctioning release valve. The chemical components of MXU 5-2684 are Xylene, Quarternary Ammonium Chloride, Ethylbenzene and Isopropyl Alcohol, which are defined by federal statute as hazardous substances. A sufficient quantity of MXU 5-2684 leaked that WALTER OIL & GAS COMPANY was required to provide notice to the National Response Center. No notification was provided and no attempts to remedy the spilled waste were conducted. On April 1, 2014 the pipeline remediation project was continued but was unsuccessful and personnel left open a connection that allowed the MXU 5-2684 to leak into the Gulf of Mexico. Had the connection been closed rather than left open to leak, another day of work to remedy the situation would have cost approximately $200,000.
“Our federal and state law enforcement partners are committed to protecting our environment,” stated U.S. Attorney Polite. “We will continue to demand that businesses not illegally pollute the waterways that sit at the center of our culture and economy.”
“The Coast Guard Investigative Service places high priority on the protection of our delicate maritime environment. We will continue to work hand in hand with our law enforcement partners to pursue those who, by their actions, place that environment at peril,” Said William Hicks, Acting Special Agent in Charge of the Coast Guard Investigative Service Gulf Region office in New Orleans, LA.
“Developing domestic sources of energy must be done responsibly, safely and without threatening public health or the environment,” said Daniel Pflaster, Acting Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “The defendant failed to report illegal discharges of production waste fluids believed to be extremely toxic to aquatic environments, and this type of illegal activity compromises the hard work that state, local and federal partners have invested to restore the Gulf of Mexico. Today’s plea agreement demonstrates that when companies damage the environment and mislead government officials, they will be held accountable for their actions.”
“The Louisiana Department of Environmental Quality will not tolerate the bypassing of state and federal laws for personal, professional or monetary gain,” DEQ Secretary Peggy Hatch said. “We will continue to aggressively prosecute any business, corporation or individual found to be in violation of environmental regulations.”
United States District Judge Nannette Jolivette Brown set formal sentencing for March 10, 2016.
U.S. Attorney Polite praised the work of the Criminal Investigation Division of the United States Environmental Protection Agency (“EPA-CID”), the Criminal Investigation Division of the Louisiana Department of Environmental Quality (“LDEQ-CID”), and the Coast Guard Investigative Service Gulf Region (“CGIS). The case is being prosecuted by Assistant United States Attorney Jon Maestri.
Norristown Resident Charged with Illegal Reentry After DeportationRead the Press Release
Jose Alberto Guadalupe-Ascencion, 30, of Norristown, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about December 3, 2015, Guadalupe-Ascencion, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about December 3, 2010, February 2, 2012, June 6, 2012, and September 23, 2012.
If convicted the defendant faces a maximum possible sentence of 10 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Joan E. Burnes.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
New York Man Pleads Guilty to Drug and Gun ChargesRead the Press Release
Contact: Daniel J. Perry
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Wayman Sparrow, a/k/a “Blaze,” 25, of New York, New York, pled guilty today in U.S. District Court to conspiring to distribute heroin, cocaine and cocaine base, commonly known as “crack cocaine,” and discharging a firearm during a crime of violence.
According to court records, between October 2011 and January 2013, Sparrow conspired with others from New York and Portland to bring heroin, cocaine and crack cocaine to Maine and distribute it from apartments and hotels in the Portland area. The defendant brought the drugs from New York to Portland, distributed them to customers in the Portland area, and brought drug proceeds back to New York. On March 12, 2013, the defendant got into a gun battle using a Smith and Wesson .40 caliber handgun with a former conspirator in the hallway outside an apartment in the Lafayette Arms in Portland, while he was there distributing drugs.
Sparrow faces up to 20 years in prison and a $1,000,000 fine on the drug charge and a consecutive sentence of between 10 years and life in prison and a $250,000 fine on the gun charge. He will be sentenced after completion of a presentence investigation report by the U.S. Probation Office.The investigation was conducted by the Portland Police Department, the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency and the Federal Bureau of Investigation.
New York Health Care Professional Sentenced to Prison; Another Pleads Guilty in Connection with Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A physician’s assistant was sentenced to prison, and a doctor admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced today.
Leonard Marchetta, 49, of Staten Island, New York, a physician’s assistant who previously pleaded guilty to one count of accepting bribes, was sentenced to 42 months in prison. Bret Ostrager, 50, of Woodbury, New York, a doctor with practices in Nassau County, New York, pleaded guilty to Count One, Count Two and Count Five of an indictment charging him with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act by accepting bribes, one substantive violation of the Anti-Kickback Statute, and one substantive violation of the Federal Travel Act. Both the sentencing and plea hearing took place today before U.S. District Judge Stanley R. Chesler in Newark federal court.
Marchetta and Ostrager are two of the 39 people – 26 of them doctors – who have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has to date recovered more than $12 million through forfeiture.
According to documents filed in this case and statements made in court:
Marchetta previously admitted that he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $3,000 per month. Marchetta’s referrals generated approximately $660,000 in lab business for BLS.
Ostrager admitted today that, between February 2011 and April 2013, he received monthly cash bribes of approximately $3,300 from BLS employees and associates. He periodically solicited and received from the BLS employees and associates tickets and meals that cost thousands of dollars. These additional bribes in response to specific requests from Ostrager included tickets to a New York Mets baseball game, a New York Knicks basketball game, a Katy Perry concert, a Justin Bieber concert, and the Broadway show “Newsies.” In exchange, Ostrager referred patient blood samples to BLS. Ostrager’s referrals generated approximately $909,000 in lab business for BLS.
Each count to which Ostrager pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. His sentencing is scheduled for March 29, 2016.
In addition to the prison term he received today, Marchetta must serve three years of supervised release and forfeit $72,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen with the ongoing investigation.
The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $640 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel:
Marchetta: Leo Duval Esq., Staten Island
Ostrager: Marc Agnifilo Esq., New York
New Britain Firearms Manufacturer Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Daniel J. Kumor, Special Agent in Charge of the ATF Boston Field Division, announced that STAG ARMS LLC, a firearms manufacturer in New Britain, pleaded guilty today in Hartford federal court to violating federal firearms laws.
“It is critically important for those who are responsible for manufacturing firearms, especially high-powered semiautomatic rifles, to diligently comply with federal firearms laws throughout the production and distribution process,” said U.S. Attorney Daly. “Stag’s misconduct has resulted in hundreds of these weapons being lost or untraceable. In addition, Stag’s possession of dozens of unregistered machine guns is particularly egregious. Federal firearms laws exist to ensure that all legal firearms are properly accounted for and don’t wind up on the street, and in the hands of those who shouldn’t possess them. Gun manufacturers who don’t follow the rules and violate federal law not only face license revocation, but criminal prosecution. I commend the ATF for expertly investigating this matter.”
“What occurred in this case is absolutely unacceptable and will not be tolerated,” said ATF Special Agent in Charge Kumor. “ATF relies on individuals and corporations who are licensed to manufacture firearms to mark them in accordance with the law, keep thorough records of the manufacture and disposition of all firearms and maintain their inventory in secure facilities to prevent their theft or loss. When firearms licensees fail to comply with these federal regulations and laws they open the door for untraceable firearms to wind up on the street in the hands of traffickers and criminals. Today’s guilty plea and the license revocations demonstrate our commitment to hold firearms licensees accountable when they place public safety at risk.”
The possession, by private citizens, of machine guns manufactured after 1986 is prohibited, and licensed manufacturers of machine guns are required to stamp a unique serial number on each machine gun and register it with ATF within one business day of manufacture. It is a violation of federal law for a licensed manufacturer to fail to mark a firearm with a serial number and for anyone to tamper with a firearm serial number or possess a firearm with an obliterated serial number. It is also against the law for anyone to possess a machine gun that is not registered to them.
According to court documents and statements made in court, STAG ARMS (“STAG”) obtained a federal firearms license (“FFL”) to manufacture firearms in 2003, and obtained a license for a second location in 2009.
In 2007, the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) cited STAG for a number of regulatory violations.
In July 2014, ATF Industry Operations Investigators performed another firearms compliance inspection at STAG. The investigation revealed that, in violation of the National Firearms Act, STAG had possession of a total of 62 machine guns and machine gun receivers that were registered to another entity, or were not registered at all.
A receiver is the key regulated part that is considered a machine gun. All other parts necessary to transform a receiver to a fully functional semi-automatic or automatic machine gun can be purchased over the Internet.
The investigation also discovered that, in violation of the Gun Control Act, STAG had failed in thousands of instances to adequately document the manufacture and disposition of firearms – machine guns as well as assault weapons – making them more susceptible to theft or loss. Many of the record-keeping violations that were uncovered were similar to violations for which STAG was cited in 2007. For example, inspectors discovered more than 3000 un-serialized receivers on the premises without any record of their manufacture or acquisition, and more than 3000 firearms that were transferred by STAG without properly being recorded. Inspectors were able to reconcile the majority of these transfers from other paperwork on site, but found more than 300 instances in which the disposition of the firearms could not be reconciled. To date, approximately 200 firearms are reported as lost or stolen.
In September 2014, ATF executed search warrants at STAG’s two facilities on John Downey Drive in New Britain and seized dozens of machine guns that had not been marked and/or registered, as well as three machine guns with serial numbers that had been intentionally obliterated, or scratched out.
In October 2014, ATF issued a Notice of Revocation to STAG, revoking both federal firearms licenses held by STAG at it two facilities. In the revocation notices, ATF alleged that STAG had knowledge of its recordkeeping and firearms marking responsibilities, but did not choose to comply. STAG was permitted to continue operations pending the results of a hearing where STAG was afforded the opportunity to contest the revocations with its own witnesses and evidence, and to cross examine government witnesses.
On November 16, 2015, after consideration of the evidence presented at the hearing, ATF issued a revocation of both of STAG’s federal firearms licenses. ATF has postponed the effective date of the revocation for 60 days.
STAG, through its representative and president MARK MALKOWSKI, pleaded guilty to a felony charge of possession of a machine gun not registered to the company. As part of its guilty plea, STAG has agreed to pay a $500,000 fine. In addition, MALKOWSKI is expected to appear tomorrow in New Haven federal court and plead guilty in his individual capacity to a misdemeanor charge of failure to maintain proper firearm records, an offense that carries a maximum term of imprisonment of one year. As part of his guilty plea, MALKOWSKI has agreed to pay a fine of $100,000.
STAG also has agreed not to challenge the license revocations in court, and to drop all ownership claims to the firearms seized by ATF. In addition, MALKOWSKI will divest himself of his interest in STAG and to thereafter never again hold an ownership or management position with respect to a firearms business.
This matter is being prosecuted by Assistant U.S. Attorney S. Dave Vatti.
Nassau County Man Pleads Guilty in Federal Court to Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Jeremy Chris Cartrette (38, Yulee) has pleaded guilty to receiving child pornography over the Internet. He faces a mandatory minimum penalty of 5 years, up to 20 years, in federal prison, and a potential life term of supervision. The plea agreement also requires Cartrette to forfeit his computer media and to register as a sex offender upon his release from prison. A sentencing hearing has not yet been set.
According to court documents, an FBI task force officer began an undercover investigation to identify individuals in the Jacksonville area who were using an online network to receive and distribute images and videos of child pornography over the Internet. The officer was able to determine that a host computer using a particular Internet Protocol address was associated with known child pornography, and was able to connect to this computer and download several images that depicted child pornography. Information from the Internet service provider revealed that this host computer was located at a residence in Yulee, Florida, where Jeremy Chris Cartrette lived.
On June 19, 2015, law enforcement executed a federal search warrant at Cartrette’s residence and seized a laptop computer and an external hard disk drive. During an interview with agents, Cartrette stated that he began downloading child pornography “a couple of years ago,” and that he had tried to quit before but that he “always comes back to it.” A forensic analysis of his computer media revealed at least 7 videos and 19 images of child pornography.
This case was investigated by the Federal Bureau of Investigation, the Columbia County Sheriff’s Office, and the Nassau County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, 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."
Mexican national arrested in New Iberia pleads guilty to reentering the United States illegallyRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Mexican national pleaded guilty to charges that he reentered the United States illegally at least three times.
Felipe Escobar-Martinez, 44, of Mexico, pleaded guilty before by U.S. District Judge Richard T. Haik to one count of illegal reentry of a removed alien. According to the guilty plea, the defendant was arrested in New Iberia on September 22, 2015 on Romero Road. The defendant later admitted that he was in the United States illegally and had last been deported in March of 1999, December of 2000 and July of 2005. The 2005 conviction was an aggravated felony, narcotic drugs for sale, in Arizona, Maricopa County.
Escobar-Martinez faces 20 years in prison, three years of supervised release and a $250,000 fine. A sentencing date was not set.
United States Immigrations and Customs Enforcement conducted the investigation. Assistant U.S. Attorney Dominic A. Rossetti is prosecuting the case.
Mexican Pleads Guilty to Illegally Re-Entering United States after RemovalRead the Press Release
PITTSBURGH - A citizen of Mexico has pleaded guilty in federal court to a charge of violating federal immigration laws, United States Attorney David J. Hickton announced today.
Juan Rivera-Santos, 39, pleaded guilty to one count before Nora Barry Fischer.
In connection with the guilty plea, on or about Sept. 17, 2015, Rivera-Santos was found in North Versailles, Pa., after having unlawfully re-entered the United States following removal on several occasions.
Judge Fischer scheduled the sentencing for April 21, 2016, at 1 p.m. The law provides for a maximum total sentence of 10 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 Paul E. Hull is prosecuting this case on behalf of the government.
United States Immigration and Customs Enforcement (ICE) conducted the investigation leading to the indictment in this case.
Mexican Pleads Guilty to Illegally Re-Entering United States after RemovalRead the Press Release
PITTSBURGH - A citizen of Mexico has pleaded guilty in federal court to a charge of violating federal immigration laws, United States Attorney David J. Hickton announced today.Juan Rivera-Santos, 39, pleaded guilty to one count before Nora Barry Fischer.
In connection with the guilty plea, on or about Sept. 17, 2015, Rivera-Santos was found in North Versailles, Pa., after having unlawfully re-entered the United States following removal on several occasions.
Judge Fischer scheduled the sentencing for April 21, 2016, at 1 p.m. The law provides for a maximum total sentence of 10 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 Paul E. Hull is prosecuting this case on behalf of the government.
United States Immigration and Customs Enforcement (ICE) conducted the investigation leading to the indictment in this case.
Member of Grape Street Crips Street Gang Sentenced to Five Years in Prison; Two Other Members Plead Guilty to Drug Trafficking ChargesRead the Press Release
NEWARK, N.J. – A member of the New Jersey set of the Grape Street Crips gang was sentenced today to 60 months in prison for conspiring to distribute crack-cocaine, and two other members of the gang have pleaded guilty to drug trafficking charges, U.S. Attorney Paul J. Fishman announced.
Willie Brooks, a/k/a “Animal,” 24, was sentenced by U.S. District Judge José Linares in Newark federal court for conspiring to distribute crack-cocaine. Max LaRue, a/k/a “Max,” 26, pleaded guilty today before Judge Linares to an information charging him with one count of conspiracy to distribute crack-cocaine. On Dec. 21, Tyquan Clark, a/k/a “Tah,” 29, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to Count 21 of the third superseding indictment charging him with engaging in a continuing criminal enterprise.
According to documents filed in these cases and statements made in court:
The Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark. Clark and other members of the gang, including Hakeem Vanderhall, a/k/a “Keem,” a/k/a “Sugar Bear;” Eric Concepcion, a/k/a “Eddie Arroyo,” a/k/a “E-Wax,” a/k/a “Wax;” Jamar Hamilton, a/k/a “Gunner,” a/k/a “Jamaal A. Hamilton;” and Rashan Washington, a/k/a “Shoota,” operated a continuing criminal enterprise in the area of 6th Avenue and North 5th Street in Newark. The enterprise allegedly sold crack-cocaine to other distributors of the drug, including other members of the gang. Brooks and LaRue were two distributors who were members of the gang and obtained crack-cocaine from the criminal enterprise.
To protect their gang and drug territory, the Grape Street Crips used “community guns” that were easily accessible to gang members. Law enforcement agents seized numerous firearms, including a .410-caliber assault rifle, a .45-caliber Thompson semi-automatic carbine, a 7.62-caliber assault rifle, and numerous semi-automatic handguns.
In addition to the prison term, Judge Linares sentenced Brooks to five years of supervised release.
The conspiracy to which LaRue pleaded guilty carries a statutory mandatory minimum punishment of five years in prison and a maximum of 40 years in prison, and a maximum fine of $5 million. His sentencing is scheduled for April 6, 2016. The charge to which Clark pleaded guilty carries a statutory mandatory minimum term of 20 years in prison and a maximum of life in prison, and a maximum fine of $2 million. He is scheduled to be sentenced on March 28, 2016.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, police officers and detectives of the Newark Police Department, under the direction of Acting Public Safety Director Anthony Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. 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.
Defense counsel:
Brooks: John P. McDonald Esq. Somerville, New Jersey
LaRue: Michael J. Pappa Esq., Hazlet, New Jersey
Clark: Howard Brownstein Esq., Union City, New JerseyMartinsburg, WV doctor convicted of unlawful distribution of prescription painkillersRead the Press Release
WHEELING, WEST VIRGINIA – Tressie Montene Duffy, 45, a doctor in Martinsburg, West Virginia, was convicted in federal court today of facilitating the unlawful distribution of narcotic painkillers through her medical practice, United States Attorney William J. Ihlenfeld, II, announced.
Duffy operated West Virginia Weight and Wellness, Inc., a clinic located in Martinsburg. She leveraged her practice at that clinic to illegally distribute painkillers. Duffy signed blank prescription orders and allowed unlicensed members of her staff to issue prescriptions for narcotic medications to patients that had not been seen by a physician.
Duffy pled guilty today to seven counts of “Aiding and Abetting the Distribution of Oxycodone.” She faces up to 20 years in prison and a fine of up to $1,000,000 on each of the seven counts. 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 Paul Camilletti prosecuted the case on behalf of the government. The Drug Enforcement Administration investigated.
U.S. Magistrate Judge James E. Seibert presided.
Martin County Man Sentenced to 30 Years in Prison for Producing Child PornographyRead the Press Release
A Martin County resident was sentenced to 30 years in prison by United States District Judge Jose E. Martinez for sexually exploiting a child and producing child pornography.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and William D. Snyder, Sheriff, Martin County Sheriff's Office (MCSO), made the announcement.
On April 15, 2015, Eric Leon Gauthier, 54, of Jensen Beach, pled guilty to a single count indictment, which charged him with sexual exploitation of a child and production of child pornography, in violation of Title 18, United States Code, Sections 2251(a), (e). Gauthier was sentenced to the statutory maximum term of incarceration, 360 months in prison. After his release from incarceration, Gauthier will be placed on supervised release for the remainder of his life and was ordered to register as a sex offender.
According to court documents and information disclosed during court proceedings, on October 13, 2014, MCSO detectives received a complaint from a 15 year old male, who reported that Gauthier had encouraged and actively promoted sexual activity between the minor male and a 15 year old female. The promotion included transporting the minors to several locations, under Gauthier’s ownership, in order for them to engage in sexual activity. This complaint ultimately led to the examination of a number of digital devices, which were found to contain images and videos, surreptitiously recorded by Gauthier, without the knowledge of the teenage couple. On November 26, 2014, MCSO detectives and FBI agents executed search warrants at three of Gauthier’s properties, located in Martin and St. Lucie Counties, and discovered a variety of digital devices. One item, a personal computer that was discovered in Gauthier’s warehouse, was found to contain images of the minor couple engaging in sexually explicit conduct.
Mr. Ferrer commended the investigative efforts of the FBI and MCSO. This case was prosecuted by Assistant U.S. Attorney Carmen Lineberger.
This case is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Manhattan U.S. Attorney Announces Charges Against Bahamas Man for Unlawfully Accessing Celebrities’ Email Accounts to Steal and Sell Upcoming Movie and Television Show Scripts, Personal Identification Information, and Private VideosRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Glenn Sorge, acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (“HSI”) New York, announced today the filing of a criminal complaint against ALONZO KNOWLES in connection with KNOWLES’s scheme to sell stolen scripts of upcoming movies and television shows, and the personal identification information and private, sexually explicit videos of celebrities and other professionals in the entertainment, professional sports, and media industries (the “Victims”), all of which KNOWLES obtained by gaining unlawful access to the Victims’ personal e-mail accounts. KNOWLES was arrested in New York, New York, on December 21, 2015, and charged with one count of criminal copyright infringement and one count of identity theft. He will be presented later today in Manhattan federal court in the before United States Magistrate Judge Henry B. Pitman.
Manhattan U.S. Attorney Preet Bharara stated: “This case has all of the elements of the kind of blockbuster script the defendant, Alonzo Knowles, is alleged to have stolen: hacks into celebrities’ private emails, identity theft, and attempts to sell victims’ information to the highest bidder. Unfortunately, these circumstances are all too real. I want to thank HSI for their quick work to stop Knowles’s alleged intrusions and his efforts to profit from the information he stole.”
Acting Special Agent in Charge Glenn Sorge stated: “This arrest brings down an alleged email hacking scheme that targeted many individuals including some in the entertainment industry. As cyber-crime becomes more pervasive, this operation embodies HSIs commitment to target those who use the cyber world for illegal financial gain.”
According to the Complaint filed today in Manhattan federal court[1]:
In early December 2015, representatives of an American premium cable and satellite television network (“TV Network-1”) were informed by the executive producer (the “Executive Producer”) of a popular drama television series airing on TV Network-1 (“TV Series-1”) that an individual may have obtained unauthorized access to scripts of the upcoming season of TV Series-1. In particular, a popular radio host (“Witness-1”) had contacted the Executive Producer because Witness-1 had received an unsolicited offer, by email, from an individual who offered to sell Witness-1 scripts of upcoming episodes of TV Series-1. That individual was later identified as KNOWLES. Thereafter, at the direction of law enforcement, Witness-1 introduced KNOWLES to an undercover law enforcement agent (the “UC”) who expressed interest in purchasing the scripts.
In videoconference calls in December 2015, KNOWLES claimed to the UC that he had “exclusive content” that was “really profitable” and worth “hundreds of thousands of dollars.” KNOWLES stated that he obtained the material directly from the Victims without their knowledge, and claimed to be able to acquire additional material from other celebrities and entertainment, sports, and media industry professionals. KNOWLES showed the UC a list of the e-mail addresses and phone numbers of at least 130 such individuals that he had in his possession.
KNOWLES also offered to sell the UC sexually explicit images and videos that KNOWLES had stolen from the personal e-mail accounts of such individuals, certain of whom KNOWLES specifically identified to the UC. As an example, KNOWLES provided the UC with images and a video clip that he had stolen from the personal email account of another radio host (“Victim-5”) that had been sent to Victim-5 by another individual. In addition, after the UC inquired whether KNOWLES could obtain the personal identification information of celebrities, KNOWLES provided the UC with a copy of the passport, Social Security Number, and other personal identification information of a particular film actor. In addition, KNOWLES offered to sell the UC “a very popular A list celebrity ssn along with 30 unreleased tracks towards their upcoming album.”
On December 21, 2015, during a meeting with the UC in New York, New York, KNOWLES claimed to use two different methods to gain unlawful access to Victims’ email accounts. One method, according to KNOWLES, involved sending a “virus” to the Victim’s computer which enabled KNOWLES to access it. The other method involved KNOWLES emailing a false notification to the Victim stating that the Victim’s email account had been hacked, and asking for the Victim’s passcodes. Either way, once KNOWLES had successfully accessed the Victim’s e-mail account, KNOWLES, unbeknownst to the Victim, changed the settings in the Victim’s e-mail account in order to maintain ongoing access to it.
During the December 21, 2015, meeting, KNOWLES attempted to sell to the UC, in exchange for $80,000, approximately 15 movie and television scripts that he had unlawfully obtained from the Victims, and KNOWLES also provided the UC with the Social Security Numbers of three professional athletes and a movie actress, whereupon KNOWLES was arrested.
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KNOWLES, 23, of Freeport, Bahamas, is charged with one count of felony criminal copyright infringement, which carries a maximum sentence of five years in prison, and one count of identity theft, which carries a maximum sentence of five years. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the HSI. Mr. Bharara also noted that the investigation remains ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Kristy J. Greenberg is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Man Who Pushed Woman Out of Car Sentenced for Carjacking, Firearm ViolationRead the Press Release
KANSAS CITY, KAN. - A Kansas City, Kan., man who pointed a gun at a woman and pushed her out a driver’s side door before stealing her car was sentenced Monday to 180 months in federal prison, U.S. Attorney Barry Grissom said today. The sentence is to be served consecutively to a 10-year sentence in another federal case.
John Michael Devosha, 25, Kansas City, Kan., pleaded guilty to one count of carjacking and one count of using a firearm in furtherance of carjacking.
In his plea, he admitted that on Oct. 22, 2013, was already under federal indictment in another case when he wrecked a stolen pickup truck near 59th and Leavenworth Road in Kansas City, Kan. He abandoned the car and fled on foot in search of another car.
A woman who was driving a 2002 Cadillac Deville was stopped in traffic congestion created by the wreck. Devosha used the handle of his gun to break the woman’s front passenger window and enter her car. He pointed a gun at the woman and told her to drive away fast. Before she could do it, he pushed her out the driver’s side door and onto the road, where she stumbled and injured herself. Then he drove away in her car.
Three days later, Pottawatomie Tribal Police arrested him in Jackson County, Kan., after a 45-mile high speed chase on U.S. Highway 75.
Grissom commended the Pottawatomie Tribal Police, he Kansas City, Kan., Police Department, the Bureau Alcohol, Tobacco, Firearms and Explosives and Special Assistant U.S. Attorney Erin Tomasic, as well as agencies that participated in the arrest including officers from Brown, Jefferson and Jackson counties, as well as police from Holton and Sabetha and the Kickapoo and Sac and Fox tribes.
Los Angeles man pleads guilty to Federal methamphetamine chargeRead the Press Release
CHARLESTON, W.Va. – A man from Los Angeles, California, pleaded guilty today to a federal methamphetamine charge, announced United States Attorney Booth Goodwin. Terry Cunningham, 32, entered his guilty plea in federal court in Charleston, West Virginia, to distribution of methamphetamine.
Cunningham admitted that on July 14, 2015, he shipped a package containing methamphetamine to an undercover Kanawha County Deputy Sheriff working with the Metropolitan Drug Enforcement Network Team. After the undercover officer picked up the package, Cunningham provided instructions for making payment for the shipment with MoneyGram. Cunningham went to pick up the MoneyGram payment at a Walmart in Los Angeles, and immediately texted the undercover officer that he had received payment. Agents conducting surveillance in Los Angeles also observed Cunningham collecting the payment, and arrested him shortly after the payment confirmation.
Cunningham faces up to 20 years in federal prison and a $1 million fine when he is sentenced in federal court in Charleston on April 6, 2016.
The successful prosecution of Cunningham was the result of the collaborative investigative efforts of the United States Postal Inspection Service, Homeland Security Investigations, the Metropolitan Drug Enforcement Network Team, and the Kanawha County Sheriff’s Department.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat illegal drugs in our communities, including 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 other drugs in communities across the Southern District.
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Local Man Charged with Human Trafficking, Child PornographyRead the Press Release
COLUMBUS, Ohio – A federal grand jury has charged J’Vonta C. Buckley, 25, of Columbus, Ohio, with charges related to human trafficking and child pornography in an indictment returned in Columbus, Ohio.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine and members of the Central Ohio Human Trafficking Task Force, including Columbus Police Chief Kim Jacobs and Franklin County Prosecutor Ron O’Brien announced the indictment returned last week.
The indictment alleges that the defendant recruited and harbored a 16-year-old victim, posted advertisements that depicted the child on the website Backpage.com to solicit customers for commercial sexual activity, and used her to create sexually explicit child pornography images with his cell phone. The indictment also alleges that Buckley used force, fraud or coercion against an adult female who also worked for him as a prostitute on Backpage.
Investigators with the human trafficking task force discovered Buckley in December 2014 while conducting a sting on a Backpage ad that they believed depicted a minor girl. The defendant was arrested at that time on a warrant for a gun charge and served a sentence for that charge that ended December 20, 2015.
Buckley’s initial appearance on the current charges was held yesterday in front of U.S. Magistrate Judge Norah McCann King.
He was charged with one count of sex trafficking by force, fraud or coercion, which carries a potential sentence of 15 years to life in prison, one count of sex trafficking of a minor, which carries a potential sentence of 10 years to life in prison, one count of production of child pornography, which carries a potential sentence of 15 to 30 years’ incarceration and one count of possession of child pornography, which carries a maximum sentence of 10 years imprisonment.
U.S. Attorney Stewart commended the investigation of this case by the Ohio Attorney General’s Ohio Organized Crime Investigations Commission Human Trafficking Task Force, which includes authorities from the Attorney General's Bureau of Criminal Investigation (BCI), U.S. Homeland Security Investigations, Columbus Division of Police, Ohio State Highway Patrol, Powell Police Department, The Franklin County Prosecutor’s Office and the Delaware County Prosecutor's Office. He also commended Assistant United States Attorney Heather A. Hill and Special Assistant United States Attorney Jennifer Rausch from the Franklin County Prosecutor’s Office, who are prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Licensed Firearms Dealer from East Greenbush Sentenced in White Plains Federal Court for Illegally Trafficking Firearms with Obliterated Serial NumbersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JONATHAN CUNEY, of East Greenbush, New York, was sentenced today in White Plains federal court to 37 months in prison for transporting and selling firearms with obliterated serial numbers while he was a licensed firearms dealer. CUNEY pled guilty on June 1, 2015. He was sentenced today by U.S. District Judge Vincent L. Briccetti.
U.S. Attorney Preet Bharara said: “Regulations governing firearms dealers and the sale of firearms are critically important to public safety. Jonathan Cuney flouted these regulations and intentionally introduced nearly two dozen untraceable firearms into the streets. Fortunately, Cuney was caught and convicted before more illegal guns could endanger our neighborhoods.”
According to documents filed in this case and statements made in court:
CUNEY was a Federal Firearms License holder, which allowed him to manufacture, import, and sell firearms. However, on multiple occasions between April 2013 and July 2014, CUNEY personally obliterated the serial numbers from firearms, and sold 22 of those firearms, including to an undercover Special Agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
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In addition to the prison term, CUNEY, 32, of East Greenbush, New York, was also sentenced to two years of supervised release.
Mr. Bharara praised the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, and thanked the Town of New Windsor Police Department for its assistance.
The case is being handled by the Office’s White Plains Unit. Assistant United States Attorney Daniel P. Filor is in charge of the prosecution.
Leesburg Man Pleads Guilty to Embezzling up to $3.5 MillionRead the Press Release
ALEXANDRIA, Va. – Victor R. DeAnthony, Jr., 47, of Leesburg, pleaded guilty today to wire fraud for embezzling up to $3.5 million from a business based in Herndon.
In a statement of facts filed with the plea agreement, DeAnthony admitted to stealing between $1.5 million and $3.5 million from Insequence, Inc., a systems engineering and integration company headquartered in Herndon, where he served as president until his termination in 2013. From 2004 through 2013, DeAnthony used corporate funds to make personal purchases and paid himself additional salary and bonus without approval. For instance, DeAnthony caused approximately $556,000 to be paid from Insequence’s corporate bank account to his mortgage lender to pay his monthly mortgage. DeAnthony used the embezzled funds to, among other things, purchase real estate, an automobile, personal watercraft, and a recreational vehicle.
According to court records, in order to conceal the fraud DeAnthony made false entries into the company’s accounting software. For example, in January 2012, DeAnthony wire transferred $59,612.83 from Insequence’s bank account to a title company in order to pay for expenses related to the sale of his personal residence in Leesburg. Later, in accounting records, DeAnthony falsely represented the transaction as a corporate “Facilities: Moving Expense.” Moreover, in May 2012, DeAnthony wire transferred $38,241.62 from Insequence to an account belonging to a law firm in South Carolina that assisted DeAnthony with a personal real estate purchase. In order to disguise the payment, DeAnthony falsely identified the payee as a northern Virginia law firm that the company had hired to negotiate a corporate income tax issue.
DeAnthony faces a maximum penalty of 30 years in prison when sentenced on March 10, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge James C. Cacheris. Assistant U.S. Attorney Uzo Asonye is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-364.
Judge Sentences Defendant Who Defrauded Local UniversityRead the Press Release
PHILADELPHIA - Kenneth Kapikian, 58, of Wayne, Pennsylvania, was sentenced today to 60 months in prison for defrauding the University of Pennsylvania out of $3,039,383. Kapikian pleaded guilty, June 10, 2015, to six counts of wire fraud and one count of conspiracy to commit money laundering. His co-defendant, Dennis Gagliardi, of Chester Springs, PA, pleaded guilty to four counts of wire fraud and one count of conspiracy to commit money laundering.
Kapikian and Gagliardi engaged in a scheme to fraudulently obtain monies from the University of Pennsylvania by falsely billing the University for services that the defendants never provided to the Sheraton University City Hotel. They also directed vendors of the Sheraton University City Hotel to inflate their invoices submitted to the hotel and then pay them the fraudulently inflated amounts as kickbacks.
In addition to the prison term, U.S. District Court Judge Cynthia Rufe ordered Kapikian to pay restitution in the amount of $3,039,383, a $700 special assessment, and ordered three years of supervised release. Sentencing for Gagliardi is scheduled for January 8, 2016.
The case was investigated by Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Melanie Babb Wilmoth.
Jalil Abn Ameer Aziz Indicted for Providing Material Support to ISILRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jalil Ibn Ameer Aziz, 19, a U.S. citizen and resident of Harrisburg, was indicted by a federal grand jury in Scranton on charges of conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL). His detention hearing and arraignment is scheduled for 3:00 p.m. in Harrisburg on December 23, 2015 before United States Chief Magistrate Judge Martin C. Carlson.
According to U.S. Attorney Peter Smith, the Indictment alleges that from July 2014 to December 17, 2015, Aziz knowingly conspired to provide, and attempted to provide, material support and resources, including personnel and services, to ISIL, a designated foreign terrorist organization.
Aziz was initially charged WITH THE SAME OFFENSES in a detailed criminal complaint unsealed on December 17, 2015 following his arrest. According to the complaint, Aziz used at least 57 different Twitter accounts to advocate violence against the United States and its citizens, to disseminate ISIL propaganda and espouse pro-ISIL views. Aziz allegedly posted a hyperlink containing the names, addresses, and other identifying information of 100 reported members of the U.S. Military and calls for violence against them. On at least three occasions, Aziz allegedly used his Twitter accounts and other electronic communication services to assist persons seeking to travel to and fight for ISIL. In one instance, Aziz allegedly acted as an intermediary between a person in Turkey and several well-known members of ISIL.
According to the allegations in the complaint, Aziz passed location information, including maps and a telephone number, between these ISIL supporters and a search of a backpack located in Aziz’s closet identified five loaded M4-style high-capacity magazines, a modified kitchen knife, a thumb drive, medication, and a balaclava (ski mask).
The case is being investigated by the FBI’s Joint Terrorism Task Force (JTTF), which includes the Pentagon Force Protection Agency and the Pennsylvania State Police, with assistance from the Harrisburg Bureau of Police. This case is being prosecuted by Assistant United States Attorney Daryl F. Bloom and by Trial Attorneys Robert Sander and Adam L. Small of the National Security Division’s Counterterrorism Section.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
The maximum penalty provided in the statute is 20 years imprisonment and a $250,000 fine. If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
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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Investment Advisor Indicted for Stealing More Than $2.5 Million from Advisory Clients in Minnesota and WisconsinRead the Press Release
United States Attorney Andrew M. Luger today announced the indictment of LEVI DAVID LINDEMANN, 39, for stealing more than $2.5 million from investment advisory clients. LINDEMANN is charged with mail fraud and money laundering. He is expected to make an initial appearance before Magistrate Judge Hildy Bowbeer in U.S. District Court in St. Paul, Minn.
“People entrusted their savings to Mr. Lindemann based on his promise to invest their money and help them save for retirement,” said Assistant United States Attorney Joseph H. Thompson. “But, as charged, Mr. Lindemann abused that trust in order to steal his clients’ money and enrich himself at their expense. After receiving a tip from one of Mr. Lindemann’s victims, agents from the IRS, FBI, and Minnesota Department of Commerce worked together to ensure that he will be held to account for his actions.”
“As the charges allege, Levi Lindemann abused his position of trust as a financial adviser to steal from his clients, including elderly individuals,” said Minnesota Commerce Commissioner Mike Rothman. “Lindemann promised clients he would put their money in legitimate and safe investments. Instead, he used the funds to pay for personal expenses while also making Ponzi-type payments to other clients to cover up and continue his fraud.”
“IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud their clients,” stated IRS CI Special Agent in Charge Shea Jones. “Today's indictment of Levi Lindemann should serve as a strong warning to those who are considering similar fraudulent conduct.”
According to the indictment and documents filed in court, between 2009 and 2014, LINDEMANN owned and operated Gershwin Financial, Inc., an investment management company that did business under the name, Alternative Wealth Solutions (AWS). Through AWS, LINDEMANN provided financial planning and asset management services, and sold insurance annuities and investment products to clients in Minnesota and Wisconsin.
According to the indictment and documents filed in court, LINDEMANN used AWS to solicit approximately $4.3 million in investor funds from approximately 50 investor clients. LINDEMANN encouraged his clients to surrender to him their retirement accounts so that he could invest funds on their behalf. LINDEMANN induced clients to entrust him with their money by falsely representing that he would use the invested funds to buy secured notes or other legitimate investment vehicles. Instead of investing their money into legitimate investment vehicles, LINDEMANN used the invested funds to pay personal expenses, convert the investments to cash for his own use, purchasing at least one vehicle and to make Ponzi-type payments of promised returns to other investors.
According to the indictment and documents filed in court, LINDEMANN took steps to conceal his fraudulent activity and lull investor-clients by creating counterfeit secured notes and providing them to investor-clients as proof of their investment. LINDEMANN also used some of the investment funds that he stole to make monthly payments to investor-clients, which were intended to appear to be monthly interest payments accruing from legitimate investments.
This case is the result of an investigation conducted by the Minnesota Department of Commerce Fraud Bureau, Criminal Investigation Division of the IRS and Federal Bureau of Investigation.
This case is being prosecuted by Assistant United States Attorney Joseph H. Thompson.
Defendant Information:
LEVI DAVID LINDEMANN, 39
Stillwater, Minn.
Charges:
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Mail fraud, 1 count
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Money laundering, 1 count
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Additional news available on our website.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Illinois Man Sentenced to 35 Years for Cape Girardeau KidnappingRead the Press Release
Cape Girardeau, MO – JEFFERY M. LAZIER, of Chicago, Illinois, was sentenced to 35 years in prison on one felony count of kidnapping. He appeared before United States District Judge John A. Ross.
At his plea, Lazier admitted that on May 12, 2015, he abducted a 22-year-old female SEMO college student at knifepoint while she was sitting in her vehicle in the South County Park in Cape Girardeau. Lazier held the young woman captive in his truck for over six hours while driving throughout Missouri and Illinois. During this time, Lazier repeatedly assaulted her and forced her to attempt to obtain money from various banking facilities in Missouri and Illinois.
When Lazier drove onto an off-ramp on Interstate 57 near Effingham, Illinois, the young woman opened the passenger door and jumped out. She then ran toward nearby motorists screaming for help. Witnesses then took her to the Effingham Police Department, who in turn contacted the FBI. The FBI in Effingham alerted the FBI in Cape Girardeau and the investigation began locally. The victim’s car was processed for evidence, and a fingerprint was lifted from the outside of the vehicle by an officer for the Cape Girardeau Police Department. The fingerprint matched that of Jeffery M. Lazier of Chicago, Illinois. On May 15, 2015, agents for the Federal Bureau of Investigation arrested Lazier in Yorkville, Illinois, and recovered the vehicle used to commit the crime.
At sentencing, United States District Judge John A. Ross took into account Lazier’s previous criminal record, which included a 2007 conviction for Aggravated Criminal Sexual Abuse of a four-year-old child, and the particular facts of this case, which he described as simply “horrific.”
This case was investigated by the Cape Girardeau Police Department and the Federal Bureau of Investigation. Assistant United States Attorney Keith D. Sorrell handled the prosecution for the Government.
IRS Employee Charged in $1 Million ID Theft Tax Fraud SchemeRead the Press Release
BIRMINGHAM -- Federal officials today announced arrests and charges in a stolen identity tax-refund scheme believed to involve more than $1 million in false claims and run by an IRS employee who was supposed to be assisting taxpayers experiencing problems resulting from identity theft.
A federal grand jury earlier this month indicted NAKEISHA HALL, JIMMIE GOODMAN and ABDULLA COLEMAN for their involvement in a 2008 to 2011 scheme operated out of Birmingham that involved stealing personal identity information from the Internal Revenue Service to create fraudulent tax returns and collecting the stolen refunds, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation, St. Louis Field Office, Special Agent in Charge Karl A. Stiften, and Treasury Inspector General for Tax Administration, Mid-States Field Division, Special Agent in Charge Ruben Florez. The indictment was unsealed with today’s arrests.
Hall, 39, is an IRS employee who worked in the Taxpayer Advocate Service office in Birmingham from July 2007 to November 2011. Since November 2011, Hall has worked in Taxpayer Advocate Service offices in Omaha, Neb., New Orleans, La., and Salt Lake City, Utah. Federal agents arrested Hall today in Holly Springs, Miss. Federal agents also arrested Goodman, 37, of Birmingham, at her Cherry Avenue residence. Coleman, 37, formerly of Birmingham, is already in state custody in Wisconsin on unrelated charges.
In conjunction with the arrests of Hall and Goodman, federal officials also unsealed charges relating to another co-conspirator, LASHON ROBERSON. The Government filed a five-count information in October charging Roberson, 36, of Pelham, with Conspiracy to Commit Mail Fraud Affecting a Financial Institution and four counts of Mail Fraud Affecting a Financial Institution.
“Taxpayers trust, and expect, that IRS employees, as a whole, will safeguard their most sensitive personal information. Taxpayers also must trust that IRS employees in the Taxpayer Advocate Service will not only protect their sensitive information but will actively assist them when it has been compromised by others,” Vance said. “An IRS taxpayer advocate who exploits that trust, and with full knowledge of the significant impacts of identity theft, uses her IRS access to compromise taxpayers’ identities and steal a million dollars from the U.S. Treasury is committing a particularly egregious crime that will not go unpunished,” Vance said. “I thank the TIGTA and IRS-CI investigators who worked diligently with my office to bring this case forward.”
“It is the Treasury Inspector General for Tax Administration's mission to protect the integrity of the Internal Revenue Service and promote the fair administration of our federal tax system,” Florez said. “IRS employees must conduct themselves with the highest level of integrity and their conduct must be above reproach. IRS employees who commit aggravated identity theft, steal government funds and access taxpayer information without authorization cannot be tolerated,” he said. “TIGTA will work closely with the United States Attorney’s Office to hold individuals, particularly those in positions of public trust, responsible for their illegal activities.”
“Individuals who commit refund fraud and identity theft of this magnitude and with this degree of dishonesty and deceit deserve to be punished to the fullest extent of the law,” Stiften said. “IRS Criminal Investigation and our law enforcement partners remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes,” he said. “The bad acts of one IRS employee shouldn’t taint the great work done by the thousands of IRS employees who assist taxpayers each and every day.”
The December indictment charges Hall, Goodman and Coleman with conspiring with others known and unknown to the Grand Jury to commit bank fraud and mail fraud affecting a financial institution. The indictment also charges Hall with one count each of theft of government funds, aggravated identity theft and unauthorized access to a protected computer.
Hall, Goodman, Coleman and others conspired to defraud both the IRS and financial institutions, including Bancorp Bank, between January 2008 and November 2011, and used the U.S. mail to execute the fraud, according to the indictment. Hall, Goodman, Coleman and others also conspired to obtain money from Bancorp Bank and other financial institutions. Bancorp Bank and other financial institutions issue stand-alone debit cards for the purpose of accepting tax refunds.
The multi-year conspiracy was conducted as follows, according to the indictment:
Hall obtained individuals’ names, birth dates and Social Security numbers through unauthorized access to IRS computers. Hall used the personal identity information to prepare fraudulent income tax returns and submitted them electronically to the IRS. Hall requested that the IRS pay the refunds onto debit cards and directed that the cards be mailed to drop addresses that she controlled. Hall solicited and received drop addresses from Goodman, Coleman and other co-conspirators, who also collected the refund cards from the mail.
Hall activated the cards by using stolen identity information. She, Goodman, Coleman and other co-conspirators took the money off the debit cards at ATMs or used the cards for purchases. If the fraudulent returns generated U.S. Treasury checks rather than the requested debit cards, Hall and her co-conspirators used fraudulent endorsements in order to cash the checks. Hall compensated Goodman, Coleman and other co-conspirators by giving them a portion of the refund money, or by giving them refund cards for their own use.
The theft, aggravated identity, and unauthorized access counts relate to two specific taxpayers’ information that Hall accessed and used in 2010.
The conspiracy charge carries a maximum penalty of 30 years in prison and a $1 million fine. The maximum prison penalty for theft of government funds is 10 years in prison. Aggravated identity theft carries a mandatory two-year prison term, and unauthorized access to a protected computer carries a maximum five-year prison term. All three charges carry a maximum $250,000 penalty.
IRS-CI and TIGTA investigated the case, which Assistant U.S. Attorney Erica Williamson Barnes is prosecuting.
An indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
Houston, Texas-Area Teenager Sentenced to 3 ½ Years in Prison for “Swatting” and Making Bomb Threats to Minnesota High SchoolRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of ZACHARY LEE MORGENSTERN, 19, to 41 months in prison, followed by 3 years supervised release, for calling in multiple false bomb threats, making harassing text messages, and making “swatting” phone calls, in which he falsely reported hostage situations. MORGENSTERN was arrested in Texas on May 14, 2015, and was transported to Minnesota. MORGENTERN pleaded guilty on August 7, 2015. He was sentenced today before U.S. District Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minn.
“The defendant engaged in a pattern of harassing activity against several victims using the cloak of anonymity afforded by the Internet,” said Assistant United States Attorney Timothy C. Rank. “He wrought emotional havoc and caused the needless expenditure of public funds to respond to his destructive emails, tweets, and phone calls. Mr. Morgenstern committed his crimes in part because he thought he would not get caught. Because of the excellent investigative work of the FBI, he was wrong, and the sentence today sends a strong message that there are serious consequences for this type of behavior.”
“This sentencing reinforces the FBI's willingness and ability to bring to justice those who would make bomb threats against our schools and misuse law enforcement resources,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “There is no tolerance for such crimes.”
“It's good to have closure in this matter so we can move on from the disruption in our city and school district caused by Mr. Morgenstern's actions,” said Marshall Police Chief Rob Yant.
According to the defendant’s guilty plea and documents filed in court, between October 2014 and May 2015, MORGENSTERN, made a series of threatening communications against a number of different victims in the Marshall, Minnesota area. MORGENSTERN, concealing his identity using anonymized email addresses, Twitter handles, and Internet-based phone accounts, made threats to kill a police officer and her family; threats to use explosives to blow up a school; and threats to use guns to shoot up a school. MORGENSTERN also engaged in a series of “swatting” attacks, in which he made hoax phone calls to law enforcement making it appear that there was a violent crime in progress at a residence, when in fact no such crime was taking place. The defendant engaged in these “swatting” calls with the intent that they would result in an emergency police response to the residence, ideally involving a Special Weapons and Tactics (SWAT) team.
According to the defendant’s guilty plea and documents filed in court, one such attack came on October 7, 2014, when MORGENSTERN called the Marshall Police dispatch center and claimed to have taken two people hostage at a residence of H.M., a minor, in Marshall. MORGENSTERN further claimed that he had shot one of the hostages in the knee cap and that he was going to kill both hostages unless he received a duffel bag containing a half a million dollars. The Marshall Police Department determined that call was a hoax.
According to the defendant’s guilty plea and documents filed in court, on January 6, 2015, MORGENSTERN called in a bomb threat into the Marshall, Minnesota Police Department dispatch center. In the call, MORGENSTERN claimed to be D.R., a 17-year-old male from Marshall, Minnesota, and he stated that he had placed bombs around Marshall High School that were set to detonate in approximately one hour. School officials evacuated the school and responding officers searched the school and determined the threat was a hoax. Two days later, on January 8, 2015, MORGENSTERN, concealing his identity, placed a call to Marshall Police dispatch claimed he had taken a father and son hostage at gunpoint at their residence in Marshall. MORGENSTERN claimed he had already shot the father in the leg and would soon shoot both hostages in the head. The address provided by the caller for the hostage situation was the residence of a D.R. Police responded to the call and learned that it had been a hoax. Shortly after the call to Marshall Police, MORGENSTERN tweeted that he was in the process of “swatting” D.R.
According to the defendant’s guilty plea and documents filed in court, on January 9, 2015, MORGENSTERN called the Marshall Police dispatch and, claiming to be D.R., threatened to “shoot up” Marshall High School in 30 minutes and kill everybody. MORGENSTERN then tweeted from the account, @RIURichHomie that D.R. was going to shoot up a school in 10 minutes. On January 11, 2015, MORGENSTERN sent an email message to the Superintendent of Marshall, Minnesota Public Schools which had purportedly been sent by D.R. In the message, MORGENSTERN claimed he was D.R. and that he had planted a bomb at a Marshall school that would detonate at 10:00 am the following day. MORGENSTERN also claimed he would arrive at a different Marshall school at the same time and shoot students and faculty members.
According to the defendant’s guilty plea and documents filed in court, on January 29, 2015, an email message was received by a Marshall Public Schools employee that purportedly had been sent by D.R., but in fact sent by MORGENSTERN. The sender claimed he had placed a bomb in the building and all survivors would be killed by a team who would be coming to the school.
According to the defendant’s guilty plea and documents filed in court, on February 16, 2015, the Marshall Police dispatch received a phone call from a person identifying himself as a 13-year-old boy named I.W., who claimed that two black men had just broken into his apartment and shot his mother in the leg. The call came from MORGENSTERN. He told the dispatcher that he was frightened and hiding in a bedroom closet, that the men were in the living room with his mother and 3-year-old sister, and that he could hear the men yelling at his mother. Police responded to the call and determined it was a hoax.
Finally, according to the defendant’s guilty plea and documents filed in court, on April 20, 2015, MORGENSTERN, concealing his identity, left a voicemail message for a Marshall Police Officer who worked as a school resource officer at Marshall High School in which MORGENSTERN threatened to kill the officer’s family.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and the Marshall Police Department.
This case was prosecuted by the United States Attorney’s Office for the District of Minnesota.
Defendant Information:
ZACHARY LEE MORGENSTERN, 19
Cypress, Tex.
Convicted:
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Threats to kill, 1 count
Sentenced:
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41 months in prison
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3 years of supervised release
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Additional news available on our website.
Follow us on Twitter and Facebook.
United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Gray Television Required to Divest Television Stations in South Bend, Indiana, and Wichita, Kansas, as Part of Schurz Communication AcquisitionRead the Press Release
Proposed Settlement Preserves Competition for Broadcast Television Advertisers
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court of the District of Columbia challenging Gray Television, Inc.’s proposed acquisition of Schurz Communication, Inc., and simultaneously filed a proposed settlement that would resolve the competitive harm alleged in the lawsuit.
The division alleged that the proposed transaction would have eliminated head-to-head competition between Gray’s and Schurz’s television stations for the business of local and national advertisers on television stations in South Bend, Indiana, and Wichita, Kansas. The division determined that elimination of this competition would have resulted in higher prices and lower quality services to broadcast television spot advertisers in these markets. The proposed settlement – which must be approved by the court – requires Gray to divest two television stations – the CBS-affiliated WSBT-TV in South Bend and the ABC-affiliated KAKE-TV in Wichita – to department-approved buyers.
“We remain vigilant in protecting competition in local television markets,” said Assistant Attorney Bill Baer of the Justice Department’s Antitrust Division. “Combining these stations under common ownership would have made it more costly for advertisers to communicate with consumers. The antitrust laws render those transactions unlawful.”
Gray is incorporated in the state of Georgia, with its headquarters in Atlanta. Schurz is a privately owned company, with its headquarters in Mishawaka, Indiana. Both Gray and Schurz operate broadcast television stations in various metropolitan areas throughout the United States.
As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to David Kully, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Fourth Floor, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Gray Schurz PFJ (49.77 KB)
Gray Schurz CIS (56.14 KB)
Gray Schurz Explanation (23.31 KB)
Gray Schurz HSSO (1.32 MB)
Gray Schurz Complaint (145.69 KB)
Garrett County Developer Pleads Guilty in $5.7 Million Bank Fraud SchemeRead the Press Release
Baltimore, Maryland - Samuel R. VanSickle, age 51, of Accident, Maryland, pleaded guilty today to conspiring to commit bank fraud arising from three fraudulent bank loans in which VanSickle received proceeds from the sale of real property in Garrett County, Maryland, and Cheat Lake, West Virginia, totaling over $5.7 million.
The plea agreement 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.
VanSickle and co-defendant Louis Strosnider owned and developed property in Garrett County, Maryland. VanSickle used a number of different business names, including Freedom Church, Gospel Church, Equity Exchange, Unity Mortgage, Impartial Lenders, and Noble Forest Consultants, and aliases including “Donald Blunt,” “Jacob Aiken,” “Allen Helms,” and “Paul Walsh.” Strosnider operated Stony Brook Development Company, located in McHenry, Maryland.
According to his plea agreement, from December 2001 to May 2005, VanSickle conspired with Louis Strosnider for Strosnider to fraudulently obtain real estate loans from banks in connection with the purchase of properties controlled through aliases by VanSickle. VanSickle concealed from the lenders his role as seller of the properties and recipient of the sales proceeds through fictitious identities such as “Donald Blunt, Trustee for Gospel Church,” “Donald Blunt, Trustee for Freedom Church,” “Equity Exchange,” “Unity Mortgage,” “Jacob Aiken” and “Allen Helms.” The scheme also involved fictitious down payments, inflated collateral, and false contracts.
For example, in 2002, VanSickle provided $600,000 for the purchase of Red Run, a restaurant and bed and breakfast which bordered on Deep Creek Lake in Garrett County, Maryland. In April 2003, VanSickle caused Red Run to be transferred for $0 to “Donald Blunt, Trustee for Gospel Church” - a fictitious church with a fictitious trustee. In February 2004, Strosnider signed a contract to buy Red Run from Gospel Church for $3 million. The contract recited a fictitious $750,000 down payment. Strosnider applied to a bank for a loan to complete the purchase of Red Run. When the bank required additional collateral, VanSickle supplied a timber contract for land in Garrett County with a valuation signed by “Paul Walsh” of “Noble Forest Consultants.” Both “Noble Forest Consultants” and “Paul Walsh” were fictitious. The settlement for the sale of the property was conducted by attorney Angela Blythe. Blythe failed to collect Strosnider’s funds to close the loan. At VanSickle’s direction, Blythe paid over the sales proceeds of $1.6 million to “Unity Mortgage,” which was VanSickle. “Unity Mortgage” did not, in fact, have a mortgage on Red Run.Strosnider and VanSickle used similar fraudulent methods in Strosnider’s purchase from VanSickle of 5.87 acres on State Park Road, bordering Deep Creek Lake, and 116 acres of undeveloped land on Cheat Lake, West Virginia.
VanSickle received over $5.7 million in sales proceeds from the fraudulent transactions. Strosnider defaulted on all three loans. As a result of the scheme, the loss to the financial institutions was $2,755,102.50, the amount of the loans minus the recovery from foreclosure and sale of the collateral. VanSickle has agreed to forfeit and pay restitution in that amount, and forfeit his interest in 40 properties held in VanSickle’s name or in the names of nominees in Maryland, West Virginia and Pennsylvania, up to the value of $2,755,102.50.
VanSickle faces a maximum sentence of 30 years in prison for the conspiracy. U.S. District Judge Marvin J. Garbis scheduled sentencing for March 17, 2016, at 9:30 a.m.
Louis W. Strosnider, III, age 49, of Oakland, Maryland, previously pleaded guilty to his participation in the conspiracy and awaits sentencing. In a related case, Angela M. Blythe, age 52, of Oakland, Maryland, was convicted by a federal jury on October 9, 2015, after a nine day trial, of conspiring with VanSickle to commit bank fraud, bank fraud, and two counts of making a false statement to a bank. U.S. District Judge William D. Quarles sentenced Blythe to a year and a day in prison, and entered an order requiring Blythe to forfeit $696,517 and pay restitution of $948,203.25.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’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 fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorney Joyce K. McDonald and Philip A. Selden, who are prosecuting the case.
Fredericksburg Man Sentenced for Trafficking over $13 Million in CigarettesRead the Press Release
RICHMOND, Va. – Steven (Yinhau) Chen, 34, of Fredericksburg, was sentenced today to 60 months in prison for conspiring to commit money laundering to promote his cigarette trafficking operation. Chen was also sentenced to a three-year term of supervised release, and forfeited $1.21 million as proceeds of his criminal offense.
Chen was charged by criminal information on Sept. 10, 2015, and pled guilty on Sept. 15. According to court documents, between March 2014 and June 2015, Chen, the owner of several Fredericksburg-area small businesses, purchased at least $13.8 million in cigarettes from area wholesale stores for the express purpose of re-selling those same cigarettes to individuals trafficking the cigarettes for eventual re-sale in, among other northern destinations, Pennsylvania and New Jersey. Chen would subsequently launder the cash proceeds of these cigarettes sales through at least 20 different bank accounts that Chen and others maintained with at least 10 different banks. Chen maintained these bank accounts in the names of both his legitimate businesses and another business entity that existed only to receive and subsequently transfer the cash proceeds of Chen’s cigarette trafficking conspiracy. During the 15 months at issue, at least $12.18 million of cigarette trafficking proceeds flowed into and through Chen’s bank accounts before being repurposed to pay off the credit card bills Chen incurred purchasing bulk cigarettes. The vast majority of Chen’s deposits were made in amounts just under the $10,000 Cash Transaction Report threshold established by Congress. As part of the plea agreement, Chen had agreed to forfeit $1.21 million as proceeds of the offense.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after sentencing by U.S. District Judge Henry E. Hudson. The case was investigated by officers of the Washington – Baltimore HIDTA task force’s Northern Virginia Financial Initiative. Assistant U.S. Attorney Thomas Garnett prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15cr153.
Former U.S. Army Corps of Engineers Employee Pleads Guilty to Lying to Investigators About Placing A Confederate Flag on African-American Co-worker's DeskRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Susan R. Thompson (58, Jacksonville) yesterday pleaded guilty to making false statements to a federal officer. She faces a maximum penalty of five years in federal prison. No sentencing date has been set.
According to the plea agreement, on June 24, 2015, Thompson used her home computer to print an image of the Confederate battle flag. The next morning, she brought the flag to a U.S. Army Corps of Engineers facility in Jacksonville, Florida, where she worked as a civilian employee. Thompson surreptitiously placed the image of the flag on the desk of an African-American woman, with whom Thompson had a contentious working relationship and a history of loud workplace confrontations.
These events occurred one week after nine people were shot and killed at a historically black church in Charleston, South Carolina.
After Thompson’s co-worker found the image of the flag on her desk, inspectors from the Federal Protective Service were notified and opened an investigation to determine if there had been a breach of security at the facility, whether the image was intended as a threat of violence, and whether any federal crimes had been committed. During that investigation, Thompson agreed to be interviewed and lied to the inspectors on two separate occasions, denying that she had placed the image of the flag on her co-worker’s desk. Thompson eventually admitted that she had been angry with her co-worker and that she had placed the image of the Confederate flag on the desk, but denied that her actions were racially-motivated. Following an internal investigation by the Army Corps of Engineers, Thompson was permitted to resign from federal employment in lieu of termination.
This case was investigated by the U.S. Department of Homeland Security, Federal Protective Service. It is being prosecuted by Assistant United States Attorney Michael J. Coolican.
Former Morgan Stanley Financial Adviser Sentenced in Manhattan Federal Court for Illegally Accessing Confidential Client InformationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that GALEN MARSH was sentenced to three years’ probation and ordered to pay $600,000 in restitution for obtaining confidential client information from his employer, Morgan Stanley, by gaining unauthorized access to certain of Morgan Stanley’s computer systems. MARSH pled guilty on September 21, 2015, to an Information charging him with exceeding his authorized access to Morgan Stanley’s computer systems and was sentenced today by United States District Judge Kevin Thomas Duffy.
According to the Information, other submissions filed in Manhattan federal court, and other statements made in open court:
MARSH was employed in the private wealth management division of Morgan Stanley, initially as a Customer Service Associate (“CSA”) and then as a Financial Advisor (“FA”). In that capacity, MARSH worked as part of a group of CSAs and FAs at Morgan Stanley’s Manhattan office (the “Group”) that provided financial and investment services to particular private wealth management clients. Other similarly structured groups within the private wealth management division provided the same services to Morgan Stanley’s other private wealth management clients (together with the Group’s clients, the “Clients”).
Morgan Stanley maintained certain computer systems to manage confidential account information regarding the Clients. Like other FAs and CSAs, MARSH was authorized to access the Client information maintained in Morgan Stanley’s computer systems only with respect to Clients of his own Group. From June 2011 through December 2014, MARSH used Morgan Stanley’s computer systems to access, without permission or authority, confidential information about certain Clients serviced by FAs and CSAs outside of his Group. In order to obtain this unauthorized access to confidential Client information, MARSH used the identification numbers of other Morgan Stanley branches, groups, and FAs in the computer systems. MARSH conducted a total of approximately 6,000 unauthorized searches in the computer systems, and thereby obtained confidential Client information, including names, addresses, telephone numbers, account numbers, fixed-income investment information, and account values, of approximately 730,000 Client accounts. Over a series of dates from June 2011 through December 2014, MARSH uploaded the confidential Client information from Morgan Stanley to a personal server at his home in New Jersey.
MARSH illegally accessed the Bank’s confidential client information in order to use it for his personal advantage as a private wealth management adviser at the Bank. From October 2013 through December 2014, MARSH was engaged in discussions regarding potential employment with two other financial institutions that are competitors of the Bank.
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As part of the sentence imposed today by Judge Duffy, MARSH, 31, of Hoboken, New Jersey, was ordered to forfeit certain computer hardware that he used in the commission of the offense and to pay restitution to Morgan Stanley in the amount of $600,000.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Christine Magdo is in charge of the prosecution.
Former Lansing Resident, Amanda B. Ely, Pleads Guilty on Federal Tax ChargesRead the Press Release
Defendant illegally received over $32,000 in tax refunds.
GRAND RAPIDS, MICHIGAN — On December 22, 2015, Amanda B. Ely, 22, a former resident of Lansing Michigan, pled guilty in federal court to having obtained more than $32,000 from the United States Treasury in 2011 and 2012 by causing false federal tax returns to be filed with the Internal Revenue Service, U.S. Attorney Patrick Miles announced today. Her scheme involved deceiving citizens into providing their personal identification information by promising them "free stimulus money." The tax returns typically contained false reporting of undocumented income and abusive use of the Earned Income credit.
U.S. Attorney Miles affirmed his commitment to pursing stolen identity fraud cases as a high priority for his office. "When someone cheats on a federal tax return, they are hurting all honest taxpayers in the Western District of Michigan and elsewhere."
Complaints by local citizens prompted the Federal Bureau of Investigation to open a criminal investigation, including obtaining multiple search warrants to seize evidence of a tax fraud scheme. During the multi-year investigation, more than fifty subpoenas were issued to track down the tax refunds which had been paid into numerous bank accounts. In some instances, the personal identification information was used to file a tax return in a successive year. In an earlier prosecution, Taka Chiwocha-Crowell pled guilty to filing false tax returns and was sentenced to 42 months’ incarceration. Ely’s sentencing has been scheduled for May 3, 2016 before Chief U.S. District Judge Robert J. Jonker.
"We take these types of fraud very seriously," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "These schemes were multi-layered in that they involved countless stolen identities, various amounts of money taken from numerous individuals, as well as large sums of money diverted from the American people as a whole. This conviction should serve as a reminder of the FBI’s commitment to the investigation of all types of financial fraud schemes."
The investigation was conducted by the Lansing Office of the FBI and the Lansing Office of IRS Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney Michael A. MacDonald.
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Federal Jury Finds State of Hawaii Condoned Sexual HarassmentRead the Press Release
Yesterday, a federal jury in Honolulu found that the state of Hawaii and the Hawaii Department of Transportation’s Airports Division (HDOT) discriminated against former employee Sherry Valmoja by subjecting her to sexual harassment. The verdict was returned in a case that the Justice Department filed last year, alleging that the defendants violated Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, national origin, sex and religion.
The evidence presented at trial showed that during her employment as an explosives detection canine handler at the Honolulu International Airport, Valmoja was subjected to sexual harassment in the form of lewd and unwelcome comments and physical intimidation by a co-worker. The unwelcome conduct and intimidation began as early as November 2008, when both Valmoja and her co-worker were employed by a private company that contracted with the defendants. After both Valmoja and the co-worker became employed by the State of Hawaii, the harassment and intimidation continued.
The jury found that despite timely complaints by Valmoja about her co-worker’s conduct, the defendants failed to take prompt and effective action to remedy the harassment, which continued until March 2011 and created an abusive and hostile working environment. The jury awarded Valmoja $38,000 to compensate her for the pain and suffering she endured because of the harassment. Decisions about additional injunctive relief are still pending; the department has asked for a permanent injunction prohibiting the state of Hawaii from discriminating against its employees, review and revision of defendants’ sexual harassment policies and complaint procedures and training for its employees on discrimination.
“The Justice Department vigorously enforces Title VII to ensure that people can work free from sexual harassment and retaliation,” said Principal Deputy Assistant Attorney Vanita Gupta, head of the Civil Rights Division. “This jury’s verdict sends a loud message and a clear reminder that we will continue to effectively combat sex-based discrimination whenever it occurs in a public sector workplace.”
Valmoja originally filed her sexual harassment charge against HDOT with the Honolulu Field Office of the Equal Employment Opportunity Commission (EEOC), which investigated and determined that there was reasonable cause to believe that discrimination had occurred and referred the matters to the Department of Justice. This lawsuit was brought by the Department of Justice as a result of a project designed to ensure vigorous enforcement of Title VII against state and local governmental employers by enhancing cooperation between EEOC and the Civil Rights Division.
“Sexual harassment remains a significant problem for our nation’s workforce,” said EEOC Chair Jenny R. Yang. “EEOC takes very seriously its obligation to obtain redress for employees who are victims of these egregious practices. This verdict serves as a reminder to employers that they must remain vigilant in preventing and remedying harassment in their workplace.”
More information about Title VII and other federal employment laws is available at the division’s Employment Litigation Section website. The continued enforcement of Title VII is a priority of the Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on the division website.
EEOC enforces federal laws prohibiting employment discrimination. Further information about EEOC is available on its website.
Erie Woman Sentenced to Prison for Identity Theft SchemeRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been sentenced in federal court to 24 months in jail and ordered to make restitution in the amount of $62,653.00 on her conviction of aggravated identity theft, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Katrina A. House, 45.
According to information presented to the court, House conspired with another individual to defraud the United States by submitting false claims for income tax refunds using individuals’ identification information which was unlawfully obtained. House stole the identities of 71 individuals who were clients of the Community of Caring, a non-profit social service agency in Erie, Pennsylvania where House is employed. House and her co-defendant sought refunds from the IRS of more than $100,000.00 and used the stolen identities and falsified W-2 forms to perpetrate the fraudulent tax refund scheme. House and her co-defendant successfully obtained more than $60,000.00 in tax refunds from the fraudulent scheme and converted that money to their own use.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation for the investigation leading to the successful prosecution of House.
Erie Man Pleads Guilty to Violating Federal Drug LawsRead the Press Release
ERIE, Pa. – A former resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Robert Jovaun Harris, 37, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from June 2013 through February 2015, Harris engaged in a conspiracy to distribute and possess with intent to distribute cocaine. The court was also advised that on or about October 28, 2014, Harris distributed and possessed with intent to distribute 6 ounces of cocaine.
Judge Cercone scheduled sentencing for May 16, 2016 at 1:30 p.m. The law provides for a maximum total sentence of 40 years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Homeland Security Investigations, the Drug Enforcement Administration, the Pennsylvania State Police, U.S. Border Patrol, the Internal Revenue Service, Criminal Investigation; the Pennsylvania Office of Attorney General Organized Crime Section, the U.S. Postal Inspection Service, the U.S. Marshals Service, and the Bureau of Alcohol Tobacco Firearms and Explosives conducted the investigation that led to the prosecution of Harris.
Edinboro Woman Allowed Her House to be Used for Drug TraffickingRead the Press Release
ERIE, Pa. – A resident of Edinboro, Pennsylvania, pleaded guilty in federal court to a charge of making her home available for drug activities, United States Attorney David J. Hickton announced today.
Christian Urrutia Rojas, 30, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from June 2013 through February 2015, Rojas engaged in a conspiracy with eighteen co-defendants to distribute and possess with intent to distribute cocaine, ounces of high purity methamphetamine, and ounces of heroin. Rojas facilitated the conspiracy by having her home in Edinboro used as the drop off point for drugs and money.
Judge Cercone scheduled sentencing for May 16, 2016 at 3:00 p.m. The law provides for a maximum total sentence of 20 years in prison, a fine of $500,000, 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 Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Homeland Security Investigations, the Drug Enforcement Administration, the Pennsylvania State Police, U.S. Border Patrol, the Internal Revenue Service, Criminal Investigation; the Pennsylvania Office of Attorney General Organized Crime Section, the U.S. Postal Inspection Service, the U.S. Marshals Service, and the Bureau of Alcohol Tobacco Firearms and Explosives, conducted the investigation that led to the prosecution of Rojas.
Drug Dealer Sentenced to 60 Months for Illegal Firearm PurchaseRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Collin Blount, 28, of Brooklyn, New York, was sentenced today in United States District Court in Burlington following his guilty plea to Possession of a Firearm in Furtherance of Drug Trafficking. U.S. District Court Judge William K. Sessions III sentenced Blount to 60 months in prison followed by five years of post-release supervision, on the parties’ joint recommendation.
According to court records, the defendant was charged with three counts of the Distribution of Cocaine Base in the Rutland area of Vermont, between May 7, 2014 and May 19, 2014. The defendant was also charged with the firearms count stemming from his illegal purchase of a firearm from an undercover special agent from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, on July 2, 2014.
In exchange for what Blount believed was a .40 caliber Glock model 22, Blount presented the undercover agent with approximately 2.4 grams of cocaine base. When law enforcement agents moved in on Blount in a corner of a parking lot in order to effect his arrest, Blount backed up his vehicle towards the law enforcement vehicles and then accelerated forward, driving into and then onto the curb and median, at a high rate of speed. In his attempt to evade arrest, Blount struck a law enforcement vehicle and a pickup truck, and then drove into the woods, where his vehicle struck trees in the treeline. Blount then fled on foot and was discovered hiding in the brush by a K9 and a search team.
The United States Attorney, Eric S. Miller, specifically thanks the Bureau of Alcohol, Tobacco, Firearms, and Explosives, as well as the Vermont State Police Drug Task Force, for their hard work and cooperation in the investigation of this case.
Blount was represented by Mark Kaplan, Esq. The prosecutor was Assistant U.S. Attorney Abigail Averbach.
Dallas-Based Home Health Company Owners and Nurses Charged for Roles in $13.4 Million Medicare Fraud SchemeRead the Press Release
The co-owners of a home health company in Dallas and two nurse employees were charged in an indictment unsealed yesterday for their alleged participation in a $13.4 million health care fraud scheme involving fraudulent claims for home health services.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John Parker of the Northern District of Texas, Special Agent in Charge CJ Porter of the Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Region, Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Field Office and Director of Law Enforcement David Maxwell of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Patience Okoroji, 57, Usani Ewah, 58, Kingsley Nwanguma, 45, all of Dallas County, Texas, and Joy Ogwuegbu, 39, of Collin County, Texas, were each charged with one count of conspiracy to commit health care fraud. In addition, Okoroji and Ewah are each charged with five counts of health care fraud; Nwanguma is charged with three counts of health care fraud and Ogwuegbu is charged with four counts of health care fraud.
Ewah, Nwanguma and Ogwuegbu were arrested yesterday and made their initial appearances before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas. Okoroji was also arrested yesterday and will have her initial appearance today.
Okoroji and Ewah co-owned Timely Home Health Services Inc. (Timely), where Okoroji was also an administrator and licensed vocational nurse and Ewah was the director of nursing and a registered nurse. Nwanguma was a licensed vocational nurse working for Timely and Ogwuegbu was a registered nurse working for Timely.
The indictment alleges that from approximately January 2007 to September 2015, the defendants conspired to defraud Medicare by causing the submission and concealment of false and fraudulent claims to Medicare. According to the allegations, Okoroji and Ewah would in some cases pay recruiters, including Nwanguma, to recruit beneficiaries for home health services, regardless of whether the beneficiaries needed home health care. Okoroji, Ewah and Ogwuegbu allegedly prepared or caused to be prepared fraudulent Medicare documents that made it appear that the beneficiaries qualified for home health services. These documents were used by doctors to certify Medicare beneficiaries for home health care.
The indictment alleges that during the scheme, Okoroji and Ewah billed Medicare approximately $13,434,550 based on false and fraudulent claims for home health services.
An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
HHS-OIG, FBI and the Texas Attorney General’s MFCU investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Northern District of Texas. Trial Attorney Jason Knutson of the Criminal Division’s Fraud Section is prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Timely Indictment
Committing Fraud against the Government Doesn’t PayRead the Press Release
United States Attorney Randolph J. Seiler announced that U.S. District Court Judge Roberto Lange awarded the United States of America $279,184.00 against John Dewayne Ford for submitting multiple false-unemployment claims to the United States Railroad Retirement Board.
John Dewayne Ford, age 43, was laid off from his job with the Burlington Northern Railroad. Ford admitted that between May 2010 and April 2012, he claimed unemployment insurance benefits even though he was actually employed elsewhere. Ford submitted 40 false claims to the U.S. Railroad Retirement Board (RRB) certifying his claims for unemployment benefits, and in doing so; he perjured himself certifying his applications were true and accurate.
Ford was prosecuted criminally and pled guilty to the offense of Theft of Government Property. He was sentenced to a term of 3 years’ probation and ordered to pay criminal restitution in the amount of $19,728.
On April 6, 2015, the United States Attorney’s Office filed a civil action against Ford to recover damages and civil penalties pursuant to the False Claims Act (FCA), 31 U.S.C. §§ 3729-3733, for the false claims Ford knowingly submitted to the RRB. The FCA imposes civil liability on persons who knowingly submit false claims to the government. Persons who submit a false claim must pay to the United States a civil penalty of not less than $5,500 and not more than $11,000 for each false claim, plus three times the amount of damages which the government sustained.
In the court opinion filed today, the United States was awarded treble damages in the amount of $59,184. Although the District Court stated it would prefer to fashion a remedy that would have assessed only a single minimum penalty for this ongoing scheme, the U.S. Supreme Court has stated that the correct application of the statutory language related to civil penalties requires “that the focus in each case be upon the specific conduct of the person from whom the Government seeks to collect the statutory forfeitures.” Based on Ford’s 40 false submissions, a civil penalty was imposed at the minimum $5,500 per false claim totaling $220,000. The total civil judgment entered in favor of the United States was for $279,184.00. The government was also awarded interest and costs expended in bringing the civil case.
The U.S. Attorney’s Office places a high priority on criminal and civil enforcement in cases involving all types of fraud committed against the government, and works with various law enforcement agencies to identify and investigate these matters. The investigation in this case was conducted by the U.S. Railroad Retirement Board. This civil lawsuit was handled by Assistant U.S. Attorney Cheryl Schrempp DuPris. The criminal case was prosecuted by Assistant U.S. Attorney Ann M. Hoffman.
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Coloplast Corp. and Liberator Medical Agree to Pay $3.6 Million to Resolve Kickback AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced today that Coloplast Corp., a manufacturer of ostomy and continence care products, and Liberator Medical Supply, Inc., a medical products supplier, have agreed to pay $3,160,000 and $500,000, respectively, to resolve allegations that Coloplast paid unlawful kickbacks to several medical suppliers, including Liberator, to induce them to conduct promotional campaigns designed to refer individual users to Coloplast products.
“The payment of kickbacks to induce purchases of medical supplies undermines our federal health care programs, ultimately distorting consumer purchasing decisions, and increasing health care costs,” said United States Attorney Carmen M. Ortiz. “Investigating claims of misguided business practices, at the expense of patient health, will continue to be a top priority in our healthcare enforcement efforts.”
The Justice Department’s Principal Deputy Assistant Attorney General Benjamin C. Mizer stated that “this settlement displays the commitment of the Justice Department to protect vulnerable patients in federal health care programs from corporate marketing practices that are not in those patients’ best interests.”
“Both of these companies acted with their own self-interests in mind, putting profits over patient care,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The decision on which medical products to refer should be based on what is best for the patient, not on cash incentives or rebates.”
The settlement with Coloplast resolves allegations that it paid kickbacks to Byram Healthcare Centers, Inc.; CCS Medical, Inc.; Liberator; Liberty Medical, Inc.; and Handi Medical, Inc. in return for marketing promotions and conversion campaigns. In the case of Byram, Liberty, and Handi, Coloplast’s promotional campaigns allegedly included kickbacks in the form of funding for cash incentives – sometimes known as “spiffs” – paid to the suppliers’ sales personnel to induce them to refer patients to Coloplast products. In other instances, Coloplast allegedly gave rebates or price concessions as inducements for the promotional campaigns.
The settlement with Liberator resolves allegations that Liberator received kickbacks from Coloplast, in the form of price concessions, in return for Liberator’s agreement to conduct two campaigns promoting Coloplast ostomy products to Liberator’s customers.
The settlements resolve allegations brought forth in a whistleblower lawsuit filed by two former employees and one current employee of Coloplast under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The whistleblowers’ share of the Coloplast and Liberator settlements has not been determined. Claims against other defendants in the case remain outstanding.
The investigation was conducted by the Federal Bureau of Investigation and the Department of Health and Human Services Office of Inspector General. The case is being handled by Assistant U.S. Attorneys George Henderson and Kriss Basil in Ortiz’s Civil Division and Trial Attorney Jay Majors in the Justice Department’s Civil Division, Commercial Litigation Branch.
The case is captioned United States ex rel. Herman, et al. v. Coloplast Corp., et al. Case No. 11-cv-12131-RWZ (D. Mass.).
Clinical Director of Home Care Agency Sentenced in Medicare Fraud SchemeRead the Press Release
BOSTON – The clinical director of a home nursing agency was sentenced yesterday in U.S. District Court in Boston in connection with her role in a multi-million dollar scheme to defraud Medicare.
Janie Troisi, 66, of Revere, was sentenced by U.S. District Court Judge Douglas P. Woodlock to three years in prison and three years of supervised release. In August 2015, Troisi was convicted following a five-day trial of conspiracy to commit health care fraud and 10 counts of health care fraud.
Troisi, a registered nurse, was the Clinical Director of At Home VNA (AHVNA), a home health agency located in Waltham, which was owned and operated by her co-conspirator, Michael Galatis, also a registered nurse. From 2009 to 2012, Troisi conspired with Galatis to submit more than $3.5 million in fraudulent home health care claims to Medicare.
The Medicare program only pays for home health services under certain conditions, including that a physician has certified that the patient is homebound and needs certain skilled services. Troisi ignored these requirements and trained AHVNA nurses to recruit healthy individuals with Medicare insurance who lived in large apartment buildings. Troisi held “wellness clinics” at these buildings where nurses convinced senior citizens to enroll with AHVNA and have a nurse visit them in their home. Troisi and Galatis trained AHVNA nurses to manipulate the patients’ Medicare assessment forms to make it appear as though the patients qualified for Medicare home health services, when that was often not the case. Troisi also worked in concert with Dr. Spencer Wilking, AHVNA’s in-house Medical Director, who was paid to sign the home health care orders, even though Dr. Wilking did not examine the vast majority of AHVNA’s patients.
The patients’ primary care physicians did not refer the patients to AHVNA and were unaware that AHVNA was sending nurses to see their patients in their homes. A number of primary care physicians who learned of AHVNA’s services complained to Troisi, informing her that the patients did not need a visiting nurse, but Troisi ignored these complaints. Similarly, AHVNA’s nurses frequently informed Troisi that the patients did not need a visiting nurse, but Troisi refused to discharge the patients and continued to cause Medicare billing.
In 2011, Medicare passed a new requirement that a physician certify that she or he had a face-to-face encounter with the patient about the need for home health care. Even after this regulation was enacted, Troisi continued to cause the submission of millions of dollars of Medicare claims for home health care even though Dr. Wilking continued to sign each order without examining any of the patients.
Galatis was convicted of conspiracy to commit health care fraud, 10 counts of health care fraud, and seven counts of money laundering. He was sentenced in February 2015 to 92 months in prison. Dr. Wilking pleaded guilty to health care fraud and sentenced to one year of home confinement and a fine of $7,500.
United States Attorney Carmen M. Ortiz; Philip Coyne, Special Agent in Charge of the U.S. Health and Human Services, Office of Inspector General, Office of Investigations; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistance was also provided by the New England Benefit Integrity Support Center, a fraud contractor for the Medicare program. The case was prosecuted by Assistant U.S. Attorneys Lisa Asiaf Schlatz and David S. Schumacher of Ortiz’s Health Care Fraud Unit.
Chemical Manufacturer in Rice County Pleads Guilty to Violating Safe Water ActRead the Press Release
WICHITA, KAN. – A chemical manufacturing company in Rice County pleaded guilty Tuesday to unlawfully disposing of hazardous waste into a salt water disposal well and paid a $1 million fine.
JACAM Manufacturing, LLC, of Sterling, Kan., pleaded guilty to one count of violating the federal Safe Water Drinking Act and one count of violating the Resource Conservation Recovery Act. In the plea, the company admitted to disposing of hazardous wastes in an injection well permitted only for the disposal of salt water. JACAM admitted it was unlawfully disposing of acetone, benzene and other hazardous chemicals into a salt water disposal well.
The Safe Water Drinking Act identifies salt water disposal wells as a potential source of pollution to the nation’s underground aquifers. The Resource Conservation Recovery Act created a “cradle-to-gave” regulatory scheme to track hazardous wastes from their point of generation to their final disposal.
Grissom commended the Environmental Protection Agency, the Kansas Department of Health and Environment and Assistant U.S. Attorney Alan Metzger for their work on the case.