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22 December 2015
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.
Charleston heroin and meth dealer sentenced to eight years in Federal prisonRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Brian Keith Dunnigan, 46, of Charleston, West Virginia, was sentenced today in federal court in Charleston to eight years in federal prison for possession with intent to distribute 50 or more grams of methamphetamine. Dunnigan had previously pleaded guilty to the federal drug charge in September of 2015.
Dunnigan admitted that on April 8, 2015, he spoke with Metropolitan Drug Enforcement Network Team officers and gave them permission to search the residence where he was staying at 924 Orchard Street in Charleston. Officers recovered over 100 grams of methamphetamine, over 50 grams of heroin, and over $2,500 in cash from the residence. Dunnigan admitted that the drugs and cash were his, and that for approximately two months he had been receiving heroin and methamphetamine from a source in Ohio and distributing the drugs in Kanawha County.
Dunnigan also admitted that on May 6, 2015, he was present in a house in Charleston where Charleston Police Department officers were executing a search warrant. On that day, officers found Dunnigan with a loaded Titan Tiger .38 caliber revolver. Dunnigan was prohibited from possessing any firearm under federal law because he had previously been convicted of two felonies, conspiracy to distribute crack and being a felon in possession of a firearm, in federal court in the Southern District of West Virginia.
The investigation was conducted by the Metropolitan Drug Enforcement Network Team, the Charleston Police Department, and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Haley Bunn handled the prosecution.
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. This case was also brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Bronx Man Sentenced for Lying on Passport ApplicationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Abdus Samad, 46, of Bronx, NY, who was convicted of fraudulent use of a passport, was sentenced to two years probation by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Elizabeth R. Moellering, who handled the case, stated that the defendant made false statements on his application for a U.S. passport on August 29, 2008. Abdus failed to disclose the fact that he had previously entered the U.S. in 1993 using a different name and had claimed asylum under that alias. Fingerprints confirm that it was the defendant who entered using the alias in 1993.
The sentencing is the culmination of an investigation by Special Agents of the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, Special Agent in Charge, and Special Agents from the United States Department of State, Diplomatic Security Service, under the direction of Special Agent in Charge William Ferrari.
Avon Lake man sentenced to 25 years in prison for fraud that contributed to the collapse of credit unionRead the Press Release
An Avon Lake man was sentenced to 25 years in prison for fraudulently obtaining more than $10.6 million in loan proceeds, bribing the chief operating officer of the credit union to receive those loans, and laundering the proceeds, conduct which contributed to the collapse of the St. Paul Croatian Federal Credit Union, law enforcement officials said.
Gezim Selgjekaj, 44, was ordered to pay $16 million in restitution. A jury earlier this year found him guilty of one count of conspiracy, 15 counts of financial institution fraud, five counts of bribery and six counts of money laundering.
Selgjekaj received more than $10.6 million in fraudulent loanproceeds from the credit union between 2003 and 2010. Selgjekaj obtained the fraudulent loan proceeds using personal loan accounts, loan accounts he created in business names, including businesses that had previously ceased to exist or never existed at all, and loan accounts he created in the names of friends and family members who were unaware of Selgjekaj’sconduct, according to trial testimony and court documents. Notably, between 2004 and 2008, Selgjekaj was incarcerated in a federal correctional institution on unrelated criminal charges. According to court records and trial testimony, Selgjekajcontrolled others who went to the credit union and obtained loans on his behalf during his incarceration. Some of the loan proceeds were then deposited into his prison account.
Also during this time, and in order to obtain the loan proceeds after defaulting on previously obtained loans and being incarcerated, Selgjekaj provided more than approximately $200,000 in cash and check bribes to Anthony Raguz, the credit union’s then-chief operating officer.
Most of those loans were never repaid, causing a loss to the credit union, according to trial testimony and court documents.
“This defendant is the latest in a line of people who abused the trust of a credit union members and an entire community,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “This defendant contributed to the pain, stress and hardship of thousands of families, and will not be held accountable for his crimes.”
“This sentence should send a message to those who would steal from others,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
“Gezim Selgjekaj and his co-conspirators built a house of cards laced with a web of financial lies. The underlying structure fell apart and exposed these individuals for what they really are --thieves,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Combining the financial investigative expertise of the IRS with the skills and resources of the FBI and the U.S. Attorney’s Office makes a formidable team for combating major, greed-driven crimes.”
Selgjekaj is the latest of more than two dozen people convicted of crimes related to the collapse of St. Paul Croatian Federal Credit Union. The credit union was closed and then liquidated in 2010 after sustaining approximately $170 million in total losses,with approximately $72.5 million of those losses tied to individual criminal fraud schemes, making it the largest credit union failure in American history.
A subsequent investigation and prosecutions revealed that more than two dozen people received fraudulent loans, some totaling millions of dollars, that were never repaid in exchange for cash bribes and other kickbacks to Raguz. Trial testimony revealed that Raguz received the most number of and the largest total amount of bribes from Selgjekaj. Raguz is currently serving a 14-year prison sentence.
This case is being prosecuted by Assistant U.S. AttorneysBridget M. Brennan and Robert W. Kern following an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations.
Accountant Pleads Guilty to $4 Million Embezzlement SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Overland Park, Kan., accountant pleaded guilty in federal court today to an embezzlement scheme in which he stole more than $4 million from his firm’s clients and purchased dozens of luxury vehicles.
Thomas Hauk, 42, of Overland Park, waived his right to a grand jury and pleaded guilty before U.S. District Judge Howard F. Sachs to a 16-count federal information that charges him with five counts of bank fraud, two counts of wire fraud, five counts of counterfeit securities and four counts of money laundering.
Hauk was employed as an accountant at Assured Management Company from approximately 2005 to July 2015. He voluntarily resigned in 2015 to begin employment at a new financial management company, JIM Management, with one of the victims of his fraud scheme. JIM quickly dissolved when the underlying investigation related to Hauk’s embezzlement at Assured Management began to unfold in July 2015.
Between 2006 and July 2015, Hauk engaged in several schemes to defraud four Assured Management clients by embezzling funds from their accounts. The purpose of each scheme was to steal money for Hauk’s own financial use and personal gain to pay living expenses during two marriages and divorces, to send money to a paramour, and to purchase valuable items and motor vehicles, including the purchase of high-dollar vehicles, trailers, jewelry and motorcycles.
For example, Hauk purchased a 2006 Ford GT for $223,249, a 2009 Ferrari for $205,953 and a 2014 Ducati motorcycle for $64,160. Hauk stored the vehicles and motorcycles in three storage units he purchased in Kansas City, Mo., for $163,500.
To date, the total discovered loss to four victims of Hauk’s embezzlement is $4,093,771. A fifth victim, who suffered no financial loss, worked for Assured Management.
While Hauk’s financial fraud scheme began at least in 2006, the amount of money taken by Hauk during the embezzlement accelerated during the last two to three years before the financial fraud scheme was uncovered in July 2015. During that time, Hauk used embezzlement proceeds to make at least 66 complex automobile and motorcycle purchases.
In a separate civil proceeding, the government has seized 33 luxury cars, high-end motorcyles and other vehicles still in Hauk’s possession, which he had purchased for a total of $1,651,146. Hauk bought and traded expensive vehicles on a continuing basis until discovery of his fraud in July 2015. He used proceeds stolen from Assured Management clients, laundering the funds through companies he created, making down payments, paying existing liens, making regular large monthly payments and purchasing vehicles outright. Hauk provided significant false information to qualify for large car loans. Hauk routinely represented himself as a Certified Public Accountant (CPA), which he is not, and falsely represented his legitimate income in excess of $300,000 to $400,000 per year.
During a five-year period, Hauk spent approximately $1,207,639 using three credit cards to purchase such items as:
• $30,500 at Hannoush Jewelry on a 2.5 karat diamond ring,
• $2,400 at Alexander McQueen on a handbag,
• $4,725 at Hannoush Jewelry on a 1887 Carrera bracelet,
• $6,458 at Hannoush Jewelry on a Tag Heuer Carrera watch,
• $4,464 at Hannoush Jewelry on another Carrera 1887 bracelet,
• $8,000 at Custom Wheels related to vehicle accessories,
• $10,123 at Reno’s Powersports related to motorcycles and vehicle accessories,
• $24,555 on insurance related expenses,
• $5,078 at KC Trends related to vehicle accessories,
• $3,107 at B&H Photo Video,
• $3,900 at Sline Motorsports related to vehicle accessories,
• $9,700 on Paypal transactions,
• $8,819 on airline related expenses,
• $6,468 on hotel related expenses,
• $3,792 at Bikesource, and
• $5,436 on Apple products and services.
Hauk perpetrated an “On-the-Books” fraud scheme. The perpetrator of an “On-the-Books” scheme attempts to balance debits and credits in the accounting system to obfuscate transactions and avoid detection. Hauk stole money through a variety of methods and created false accounting entries in Assured Management’s accounting system. Hauk deposited checks from the victims into his business accounts and then wrote checks and cashier’s checks from his companies to his personal accounts and his trust.
Under federal statutes, Hauk is subject to a sentence of up to 30 years in federal prison without parole for each count of bank fraud, 20 years in federal prison for each count of wire fraud, 10 years in federal prison for each count of counterfeit securities and 10 years in federal prison for each count of money laundering. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown; Assistant U.S. Attorneys Curt Bohling and Stacey Perkins Rock are responsible for the civil proceedings. It was investigated by the FBI.
Accountant Pleads Guilty in $1.4 Million Mortgage Fraud Scheme Involving Baltimore City PropertiesRead the Press Release
Baltimore, Maryland – Cecil Sylvester Chester, age 68, of Mitchellville, Maryland pleaded guilty today to charges arising from the fraudulent purchase of seven properties in Baltimore, using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.7 million.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.
“Mortgage fraud perpetrators steal by inducing lenders to make loans that will never be repaid, and they harm neighborhoods when the inevitable foreclosures drive down property values,” stated U.S. Attorney Rod J. Rosenstein.
Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland. Co-conspirator Andreas Tamaris purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in the Highlandtown.
According to his guilty plea, from February 2008 to July 2009, Chester and his co-conspirators, including Alexander Sivels, found buyers for Tamaris’ properties and for other property owners. Chester persuaded individuals, who were inexperienced with residential real estate transactions and who lacked the funds needed to pay the down payment and closing costs, to purchase Baltimore row houses owned by Tamaris or otherwise located by the conspirators. Chester advised these “straw purchasers” that they didn’t need to contribute funds for the down payment or closing costs to buy these properties. Chester also advised that he would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed, and that Chester would collect the rent and make the mortgage payments.
Chester and his co-conspirators set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit.
The conspirators provided false information about the straw purchasers’ employment, income and financial assets, as well as fraudulent supporting documentation to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.
Chester brought the straw purchasers to the closing, and then caused the straw purchasers to falsely sign certifications in the closing documents affirming that they intended to use the properties as their primary residence and that no portion of the down payment and closing costs were borrowed. Following the settlement on each transaction in which they participated, Chester and the other conspirators received substantial payments drawn from the proceeds of the loan.
Few, if any, payments were made towards the mortgages. All of the seven properties which Chester was involved in went into foreclosure, resulting in a loss of at least $1,482,207.
Chester faces a maximum sentence of 30 years in prison and a $250,000 fine for conspiring to commit wire and mail fraud, and for wire fraud. U.S. District Judge James K. Bredar has scheduled sentencing for March 23, 2016 at 2:00 p.m.
In a related proceeding involving two of the properties at issue in the instant case, co-conspirator Andreas E. Tamaris, age 44, of Bel Air, Maryland, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud. Alexander Sivels, II, age 32, of Baltimore, previously pleaded guilty to wire fraud involving the fraudulent purchase of at least nine properties in Baltimore. Both Tamaris and Sivels are scheduled to be sentenced on September 27, 2016.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.
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 commended the FBI , HUD OIG - Office of Investigations and the U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
21 December 2015
Williamson County Woman Sentenced for Escape OffenseRead the Press Release
On December 16, 2015, Latoya M. McDaniel, 29, of Marion, was sentenced on a one-count indictment charging Escape from Federal Custody, Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
McDaniel, who had previously pled guilty to the escape offense, was sentenced to 9 months of additional incarceration, 3 years’ supervised release, and fined $200.00. Evidence at the plea and sentencing hearings established that McDaniel was serving a 78 month federal sentence for Conspiracy to Distribute Crack Cocaine. McDaniel was being housed through the Centerstone facility in Marion, Illinois. On April 6, 2015, she failed to return to Centerstone as required. McDaniel fled the area and was located and arrested by the United States Marshals Service in Missouri on June 23, 2015.
The investigation was conducted by the United States Marshals Service. The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Visalia & Simi Valley Men Sentenced to Federal Prison for Possessing Child PornographyRead the Press Release
FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced that on Monday, December 21, 2015, United States District Judge Lawrence J. O’Neill sentenced two defendants for child exploitation offenses.
In the first case, Steven Christopher Montes, 26, of Visalia, was sentenced to seven years in prison, to be followed by a 10-year term of supervised release, for possessing sexually explicit videos of minors. According to court documents, from November 2013 through August 2014 and while serving as a band teacher at Riverdale High School, Montes knowingly and surreptitiously took sexually explicit videos of minors on campus. Montes obtained the videos by directing student band members to remove all of their street clothes, including under garments, when changing into band or color guard uniforms inside a particular storage room where he had secretly set up a laptop computer to record them. In sentencing, Judge O’Neill stated that Montes’s conduct was “particularly reprehensible because of [his] position as an employee of the high school.”
This case was the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Fresno County Sheriff’s Office and the Kings County District Attorney Investigators’ Office. Assistant U.S. Attorneys Brian W. Enos and Vincente A. Tennerelli prosecuted the case.
In the second case, Alexander Kastler, 28, of Simi Valley, was sentenced to eight years and eight months in prison for possession of child pornography. According to court documents, Kastler, who has a previous conviction for possession of child pornography and was residing at a sober-living facility in Kern County, was found in possession of a cellphone and tablet computer that contained thousands of images of child pornography.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Michael G. Tierney prosecuted the case.
U.S. Attorney’s Office welcomes new prosecutorRead the Press Release
WHEELING, WEST VIRGINIA – The U.S. Attorney’s Office for the Northern District of West Virginia added a new resource in the effort to combat financial crime today as L. Danaë DeMasi-Lemon was appointed to the position of Assistant U.S. Attorney, United States Attorney William J. Ihlenfeld, II announced.
Demasi-Lemon has been assigned to the U.S. Attorney’s Office since 2011 as a Senior Law Clerk with Forfeiture Support Associates, LLC. In that capacity, she provided critical guidance to support the office’s criminal, civil, and administrative asset forfeiture strategy. She took the formal oath of office as an Assistant U.S. Attorney before U.S. District Judge John Preston Bailey this afternoon.
U.S. Attorney Ihlenfeld is “excited to have Danaë transition into her new role as an Assistant U.S. Attorney. She brings a wealth of specialized knowledge and experience dealing with complex financial matters and I know she will have an immediate impact on our office’s ability to identify and react to financial crimes in the region.”
In her new role as a federal prosecutor, Demasi-Lemon will leverage her financial expertise to prosecute complex white collar matters, fraud cases, and investigations arising under the Organized Crime Drug Enforcement Task Forces (OCDETF) Program, a national strategy designed to disrupt and dismantle major drug trafficking organizations, money laundering schemes, and related criminal enterprises. She will also coordinate the Northern West Virginia Financial Alliance, a multi-jurisdictional financial crimes working group.
Demasi-Lemon graduated from the West Virginia University College of Human Resources and Education with a Bachelor of Arts in Multidisciplinary Studies and a Master of Arts in Elementary Education in 2004. She is a proud 2008 graduate of the West Virginia University College of Law. After graduating from law school, she served as Assistant General Counsel to the West Virginia State Auditor.
United States Attorney William J. Ihlenfeld, II, Assistant United States Attorney L. Danaë DeMasi-Lemon, and U.S. District Judge John Preston Bailey.
Assistant United States Attorney L. Danaë DeMasi-Lemon.
U.S. Attorney Joins Community Leaders at Two Weekend Events to Remember Victims in San Bernardino and Stand Against HateRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner joined community leaders at two events this weekend designed to promote unity and peace in the wake of the mass shooting in San Bernardino.
On Friday, December 18, 2015, U.S. Attorney Wagner participated in a panel held by the Tarbiya Institute in Rocklin. “Rising to the Challenge: An Urgent Community Dialogue” was an opportunity for Muslim community members to express their concerns and to learn how best to respond to challenging situations. U.S. Attorney Wagner described the government’s response to the increase in incidents of vandalism, threats and property damage directed at Muslim organizations and individuals.
On Saturday, U.S. Attorney Wagner joined other officials and a diverse assembly of community and faith leaders at the “Unity & Peace Rally in Support of San Bernardino and Against Hate” held at the Capitol in Sacramento. In the aftermath of the San Bernardino shooting, hundreds gathered at the Capitol steps to show their support for the victims to denounce ant-Muslim bigotry, and to pray for peace and unity.
“In the face of a terrorist attack, we should demonstrate unity as Americans, not division. We should embrace our tradition of tolerance and religious pluralism, not turn on our neighbors,” said U.S. Attorney Wagner. “One of the most important functions of the U.S. Department of Justice is to protect the rights of religious minorities. In the wake of terrorist incidents in Europe and here in California, there has been an increase in reports of threats, harassment and other incidents of attempted intimidation of members of American Muslim communities. Targeting others for violence or intimidation because of their religious affiliation is itself an act of terrorism, and we will not hesitate to prosecute those who engage in such conduct.”
Recently DOJ’s Head of the Civil Rights Division Vanita Gupta delivered remarks at the White House’s convening of “Celebrating and Protecting America’s Tradition of Religious Pluralism.” For a link to the text of her remarks click here.
Two Mexican nationals sentenced in Federal court for credit card fraudRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that two Mexican nationals were sentenced today in federal court in Charleston, West Virginia, for credit card fraud. Marco Carrillo, 22, and Luis Vazquez, 24, both of Sonora, Mexico, were each sentenced to eight months in federal prison. Carrillo and Vazquez previously pleaded guilty in September of 2015 to federal charges of conspiring to commit credit card fraud.
Carrillo and Vazquez traveled to Charleston from Mexico to pick up a package at Federal Express (FedEx) that contained 100 fraudulent credit cards. They intended to use the fraudulent cards to buy electronic goods and gift cards. On May 1, 2015, FedEx intercepted the suspicious package containing the fraudulent credit cards and turned the package over to law enforcement before Carrillo and Vazquez picked it up.
On May 4, 2015, agents with the United States Secret Service and Homeland Security Investigations arrested Carrillo and Vazquez when they arrived at FedEx to pick up the package. Carrillo and Vazquez were stopped by law enforcement before they could use any of the fraudulent credit cards.
The United States Secret Service and Homeland Security Investigations handled the investigation, with assistance from the Metropolitan Drug Enforcement Network Team. Assistant United States Attorney Blaire L. Malkin is in charge of the prosecution.
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Two Jasper Residents and one Houston Resident Indicted in ConspiracyRead the Press Release
BEAUMONT, Texas – U.S. Attorney John M. Bales announced today that two residents of Jasper, Texas, along with a resident of Houston, Texas, have been charged with federal violations in the Eastern District of Texas.
Walter Diggles, 62, Rosie Diggles, 61, and Anita Diggles, 39, were indicted on December 2, 2015, and jointly charged with conspiracy to commit wire fraud. In addition, Walter Diggles was charged individually with eleven counts of wire fraud, two counts of theft from a program that receives federal funding, and three counts of money laundering (engaging in monetary transactions with money derived from unlawful activity). Rosie Diggles was also individually charged with ten counts of wire fraud and with one count of money laundering (engaging in monetary transactions with money derived from unlawful activity). Additionally, the indictment includes a notice of forfeiture stating that the Government is seeking to forfeit over $1.3 million from the defendants.
According to information presented in court, the defendants are alleged to have devised a scheme to obtain and make personal use of federal block grant funds that Congress appropriated following Hurricanes Rita, Katrina, Ike, and Dolly. The indictment alleges that these funds were made available to the State of Texas, which in turn contracted with several councils of governments within the state to assist in administering and distributing the funds. Walter Diggles is the Executive Director of the Deep East Texas Council of Governments, and the Indictment alleges that he made use of his position to approve inflated requests for reimbursement of federal block grant funds and that Rosie Diggles and Anita Diggles prepared many of the requests. The indictment also alleges that Walter Diggles individually engaged in activities and approved requests for block grant funds that were fraudulent in nature and that all of the defendants spent the excess funds on personal expenses.
The defendants had initial appearances before U.S. Magistrate Judge Keith Giblin today. They each face up to 30 years in federal prison if convicted of the charges.
It is important to note: A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Federal Bureau of Investigation; the Internal Revenue Service; the U.S. Department of Homeland Security / U.S. Immigration and Customs Enforcement; the U.S. Department of Housing and Urban Development; and the Texas State Auditor’s Office. This case is being prosecuted by Assistant U.S. Attorneys Tom Gibson and James Noble.
Two Individuals Sentenced for Stealing Personal Information of More Than 1,400 PeopleRead the Press Release
Two individuals were sentenced on aggravated identity theft and related charges, United States Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge, Internal Revenue Service – Criminal Investigation; Jeffrey Frost, Special Agent in Charge of the U.S. Secret Service, Detroit Field Office; and Chief Michael Patton, West Bloomfield Police Department.
Markitta Washington 29, of Hampton, Georgia, and previously of Farmington Hills, Michigan, and Martez Lear, 29 of Farmington Hills, were sentenced by U.S. District Court Judge Matthew F. Leitman. Washington was ordered to serve 47 months in prison and ordered to pay restitution to the IRS in the amount of $489,883. Lear was order ordered to serve 56 months in prison and ordered to pay restitution to the IRS in the amount of $489,883.
According to court records, Washington, worked for Henry Ford West Bloomfield Hospital and DMC Harper Hospital, removed patient records that included Personal Identifying Information (PII); such as names, dates of birth and social security numbers and used the PII to file fraudulent tax returns in other’s names. A search warrant was executed at the shared residence of Washington and Lear located in Farmington Hills. The information recovered at the residence included patient identification documents and handwritten notes that included PII for approximately 1,400 individuals. The tax refunds were directed to accounts under the control of Washington and Lear.
“Identity theft is a contemptible modern-day menace,” said Jarod Koopman, Special Agent in Charge of IRS-Criminal Investigation. “Law enforcement officers respond to it with every legal resource available. These sentences will serve as a stern warning to those who are considering similar conduct.”
This case was investigated by the Southeast Michigan Financial and Cyber Crimes Task Force, which is based at the Novi Police Department and includes U.S. Secret Service, Homeland Security Investigations, the U.S. Postal Inspection Service and IRS – Criminal Investigation agents, as well as state and local law enforcement officers from the West Bloomfield, Novi, Royal Oak, Southfield, and Troy Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Abed Hammoud with the United States Attorney’s Office for the Eastern District of Michigan in Detroit.
Hospitals have notified individual victims whose personal identifying information was compromised. Patients of the Henry Ford West Bloomfield Hospital may call (313) 874-9561 with any questions. Patients of DMC Harper Hospital may call (313) 966-8818.
Two Hudson County, New Jersey, Ms-13 Gang Members Charged with Conspiring to Kill Suspected WitnessRead the Press Release
NEWARK, N.J. – Two Hudson County, New Jersey, men appeared in federal court today to face charges that they conspired to kill a gang member who was suspected of cooperating with law enforcement, U.S. Attorney Paul J. Fishman announced.
Juan Pablo Escalante-Melgar, a/k/a “Humilde,” 26, and Elmer Cruz-Diaz, a/k/a “Locote,” 27, both of Union City, New Jersey, are charged in a one-count criminal complaint with conspiring to kill an individual to prevent them from communicating with a law enforcement officer. Escalante-Melgar and Cruz-Diaz made their initial appearances this afternoon before U.S. Magistrate Judge James B. Clark III and were detained. Both were originally taken into custody on Sept. 3, 2015 for immigration charges.
According to the complaint:
Escalante-Melgar and Cruz-Diaz are members of the international street gang Mara Salvatrucha, commonly known as “MS-13.” Multiple sub-sets, or “cliques,” of MS-13 operate in Hudson County including Pinos Locos Salvatrucha (the “Pinos clique”) and Hudson Locotes Salvatrucha (the “Hudson Locotes clique”). Escalante-Melgar was the “First Word,” or leader, of the Pinos clique; Cruz-Diaz was the First Word of the Hudson Locotes clique.
MS-13’s rules strictly prohibit cooperating with law enforcement, and it is well understood within the gang that police informants will be punished by death. The process of obtaining authorization to kill a disobedient gang member is known as “green lighting.” Obtaining a “green light” typically requires the authorization of a clique leader and, in some cases, approval from gang leaders in California or El Salvador. When preparing to kill disloyal or disobedient gang members, MS-13 often assigns gang members to follow the targeted individuals to learn their patterns and movements, enabling the gang to carry out the murders at opportune times without alerting law enforcement.
On Aug. 11, 2015, law enforcement intercepted a telephone call between a high-ranking MS-13 member in El Salvador (“Gang Leader-1”), Escalante-Melgar and another MS-13 member. During the call, Gang Leader-1 told Escalante-Melgar and the other MS-13 member that they needed to kill three individuals, including Victim-1, a member of the Hudson Locotes clique who was suspected of cooperating with law enforcement.
Four days later, on August 15, 2015, law enforcement intercepted a telephone call between Cruz-Diaz and another MS-13 member. During that call, Cruz-Diaz confirmed that senior MS-13 members in El Salvador had authorized the green lighting – or murder – of Vicitm-1, and went on to state that the gang would likely assign members of another MS-13 clique to “watch” Victim-1 in preparation for the killing.
On the evening of Aug. 16, 2015, Escalante-Melgar spoke by telephone with another MS-13 member and confirmed that four individuals, including Victim-1, had been green lighted. Escalante-Melgar explained to the other MS-13 members that the gang would take its time carrying out the murders in order to prevent gang members from being arrested.
On the evening on Aug. 31, 2015, Cruz-Diaz and Escalante-Melgar had separate telephone conversations with another member of MS-13. During the calls, the MS-13 member informed Cruz-Diaz and Escalante-Melgar that he had seen Victim-1 on the street in Union City, New Jersey.
Cruz-Diaz ordered the MS-13 member to follow Victim-1 to see what time Victim-1 left and returned home. Cruz-Diaz informed the caller that another MS-13 member had previously been assigned to follow Victim-1. Escalante-Melgar likewise ordered the caller to follow Victim-1, and instructed the caller to contact Escalante-Melgar with developments.
The conspiracy charge carries a maximum potential penalty of life in prison and a $250,000 fine.
The charge and allegations in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, and the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s charges. He also thanked the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, the Union City Police Department, and the West New York Police Department for their work on the case.
The government is represented by Assistant United States Attorneys James Donnelly and Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark as well as Trial Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section.
Defense Counsel:
Escalante-Melgar: Leigh-Anne Mulrey Esq., Newark
Cruz-Diaz: Perry Primavera Esq., Hackensack, New Jersey
Texas-Based Importers Agree to Pay $15 Million to Settle False Claims Act Suit for Alleged Evasion of Customs DutiesRead the Press Release
The Department of Justice announced today that University Furnishings LP and its general partner, Freedom Furniture Group Inc. (collectively University Furnishings) agreed to pay $15 million to resolve a lawsuit brought under the False Claims Act alleging that the companies made or conspired with others to make false statements to avoid paying duties on wooden bedroom furniture imported from the People’s Republic of China. Texas-based University Furnishings sells furniture for student housing.
“Those who introduce goods into the United States must comply with the law, including the payment of customs duties meant to protect domestic companies and American workers from unfair competition abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by evading the duties owed on goods imported into this country.”
The government alleged that between 2009 and mid-2012, University Furnishings knowingly misclassified or conspired with others to misclassify wooden bedroom furniture on documents presented to U.S. Customs and Border Protection (CBP) to avoid paying antidumping duties on imports of wooden bedroom furniture manufactured in the People’s Republic of China. Specifically, University Furnishings allegedly classified the furniture as office and other types of furniture not subject to duties while selling the furniture in the student housing market for use in dormitory bedrooms. The Department of Commerce assesses and CBP collects antidumping duties to protect U.S. businesses by offsetting unfair foreign pricing and foreign government subsidies.
“Companies that cheat, by fraudulently mislabeling their imports, undermine U.S. manufacturers and others that obey the rules, and hurt consumers and taxpayers,” said U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas. “We are hopeful that today’s settlement will help deter others from this type of scheme.”
The allegations resolved by the settlement were originally brought by University Loft Company under the qui tam or whistleblower provisions of the False Claims Act. The act permits private parties to sue on behalf of the United States those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit. University Loft Company will receive $2.25 million as its share of the settlement.
The case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Texas, CBP’s Office of Field Operations, Office of Regulatory Audit and Office of Chief Counsel; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The lawsuit is captioned United States ex rel. University Loft Company v. University Furnishings, LP, et al., No. A13-CV-678 (W.D. Tex.). The claims resolved by this settlement are allegations only; there has been no determination of liability.
Texas Nurse Convicted of Health Care FraudRead the Press Release
PLANO, Texas – A Denton County, Texas, nurse has been convicted of 9 counts of health care fraud in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Florence Kroma a/k/a Florence Kamara a/k/a Florence Koroma a/k/a Florence Bangura, 55, of Denton, Texas, was found guilty by a jury of nine counts of health care fraud late Friday evening following a four day trial before U.S. District Judge Marcia A. Crone.
According to information presented in court, Kroma, a registered nurse, owned and operated Mt. Zion Home Health Agency in Denton, Texas. From April 2008 to October 2013, Kroma carried out a scheme to defraud Medicare through the submission of false and fraudulent claims for skilled nursing services which were not provided and which were not authorized by the patients’ physicians. At times, Kroma submitted claims for services which she allegedly provided when she was out of state. At other times, Kroma submitted claims for services which she allegedly provided to patients who testified that they did not know her and had never heard of her company. Kroma was indicted by a federal grand jury on June 11, 2015.
Kroma faces up to 10 years in federal prison for each health care fraud conviction. A sentencing date has not been set.
The case was investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI) and the U.S. Department of State.
Any individuals with knowledge of these or other health care fraud violations are encouraged to contact the Department of Health and Human Services’ fraud hotline at 1-800-HHS-TIPS (447-8477)
Statement of U.S. Attorney Preet Bharara on Letter to New York City Department of Education About Noncompliance with ADARead the Press Release
“This morning, my Office issued a letter to the New York City Department of Education setting forth the findings of our investigation into the physical accessibility of New York City public elementary schools. Our investigation revealed that, 25 years after the passage of the Americans with Disabilities Act, the City is still not fully compliant, and children with disabilities and their families are being denied the right to equal access to a public school education. We have asked the City for a response, including an outline and timeline of corrective actions that will remedy this unacceptable state of affairs.”
Stafford County Man Sentenced to 30 Years for Producing Child PornographyRead the Press Release
RICHMOND, Va. – Michael P. Johnson, 49, of Stafford County, was sentenced today to 360 months in prison for production of child pornography. The court also ordered that Johnson remain on supervised release for life, following his release from incarceration.
“For approximately three years, Michael P. Johnson repeatedly raped and sodomized a child and produced hundreds of images and videos memorializing the abuse,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “The physical, emotional, and psychological harm a child suffers from sexual abuse and sexual exploitation through molestation and the production of child pornography is well known. This case is no different. The harm the victim has suffered at the hands of Johnson will significantly impact the victim for the rest of their life. The sentence Johnson earned today provides just punishment for this egregious offense and addresses the substantial needs of deterrence, protection of the community, and promotion of respect for the law.”
”By his own admission, Mr. Johnson violated a young child, stripping them of their innocence and forever tarnishing their childhood,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office. “A tremendous amount of time and energy was invested by investigators in this case, sorting through massive amounts of evidence; demonstrating the FBI's commitment to expose and hold accountable those who prey on our youth, and offer justice for the victims left in their wake.”
Johnson pleaded guilty on July 8, 2015. According to court documents and evidence presented at sentencing, Johnson was identified after the FBI learned that a computer located within his residence was using a website to upload and download files containing child pornography. Based on this information, the FBI obtained and executed a search warrant for Johnson’s residence on April 22, 2015. During the search, Johnson agreed to be interviewed and admitted that he would use the Internet to search for, download, and distribute child pornography. Johnson also admitted sexually abusing a four- or five-year-old female for approximately three years and to photographing and recording the abuse.
At the conclusion of the search, the FBI seized numerous pieces of computer equipment. A forensic examination of the seized items revealed the video to which Johnson pled guilty, as well as an additional 260 images and 102 videos of the victim engaged in sexually explicit conduct. In addition, the FBI recovered more than 146,000 images and 22,000 videos of child pornography from Johnson’s computers.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Virginia Attorney General; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge M. Hannah Lauck. Special Assistant U.S. Attorney Thomas K. Johnstone IV 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. 3:15-cr-84.
Southwest Airlines Agrees to Pay $2.8 Million to Settle Action Alleging Federal Aviation Administration Safety ViolationsRead the Press Release
Southwest Airlines Co. (Southwest) and the United States settled a lawsuit involving allegations that Southwest violated Federal Aviation Administration (FAA) safety regulations in its maintenance of its Boeing 737s, as well as other pending administrative matters, announced the Department of Justice. The settlement requires operational changes by Southwest designed to enhance its oversight of and control over third parties that perform maintenance on Southwest aircraft. Southwest also agreed to pay a $2.8 million civil penalty and up to $5.5 million in deferred civil penalties if it does not implement the operational changes set forth in the settlement agreement.
“The Justice Department believes the settlement agreement with Southwest Airlines Co. will provide meaningful improvements in safety and compliance and further ensure the integrity of FAA air safety regulations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
“Safety depends on compliance with our regulations,” said FAA Administrator Michael Huerta. “This agreement provides strong incentives for Southwest to take specific steps to address the compliance problems that the FAA investigations uncovered.”
This case was handled by the Civil Division’s Federal Programs Branch, with the assistance of the U.S. Attorney’s Office of the Western District of Washington, the FAA’s Office of General Counsel and the FAA’s Northwest Mountain Region.
The lawsuit is captioned United States v. Southwest Airlines Co., 14-cv-1693-JCC (W.D. Wa.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
South Carolina Man Indicted for Impersonating FBI Officer in West TNRead the Press Release
Jackson, TN – A South Carolina man who impersonated an FBI agent and unlawfully possessed a firearm at a hotel in West Tennessee has been indicted. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the indictment today.
According to the indictment, on November 23, 2015, Steven Darnell Lancaster, 45, of Gaston, South Carolina, falsely claimed to be a Special Agent with the Federal Bureau of Investigation (FBI) while at a hotel in Jackson, Tennessee. Lancaster, a felon, allegedly had a Glock .40 caliber pistol and false FBI credentials in his possession during the time frame he committed the impersonation.
Lancaster has been charged with one count of impersonating a federal officer and one count of being a felon in possession of a firearm.
This case is being investigated by the FBI and Jackson Police Department.
Assistant U.S. Attorney Victor L. Ivy is prosecuting this case on the government’s behalf.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Sex Offender Sentenced to Prison for Failing to RegisterRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been sentenced in federal court to 22 months in jail on his conviction of failure to register under SORNA, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on James Foster Wilcox, 28.
According to information presented to the court, Wilcox knowingly failed to update his registration as required by the Sex Offender Registration and Notification Act.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Marshal’s Service for the investigation leading to the successful prosecution of Wilcox.
Seal Beach Man Who Defrauded Dozens of Distressed Homeowners in Foreclosure Rescue Scheme Sentenced to 8 Years in PrisonRead the Press Release
Riverside, California – A Seal Beach man who operated a bogus mortgage rescue scheme – in which he made false promises to dozens distressed homeowners, filed fraudulent bankruptcies to delay foreclosure and rented the properties to third parties as the foreclosure proceedings were delayed – was sentenced today to eight years in federal prison.
Terry Meisinger, 75, was sentenced by United States District Judge Virginia A. Phillips, who rejected Meisinger’s arguments that his age merited a lower sentence. Judge Phillips noted that, even if Meisinger was released from prison when he was 80 years old, he would still pose a danger to the public.
Judge Phillips also ordered Meisinger to pay $1.5 million in restitution to his victims.
Meisinger pleaded guilty in October to two counts of wire fraud.
“This man earned significant profits as the result of his scheme – profits that came as the result of significant financial harm inflicted upon victims,” said United States Attorney Eileen M. Decker. “This scheme operated for years and continued after my office filed a civil lawsuit and he was ordered to cease his fraudulent activities. This trail of victims, most of whom lost their homes, has earned this defendant the lengthy prison term imposed today.”
When he pleaded guilty, Meisinger specifically admitted that he defrauded a distressed homeowner by inducing him to sign a quitclaim in exchange for promises that included negotiating a short-sale agreement with his lender that would free the homeowner from his mortgage on a property in North Las Vegas, Nevada. But, instead, Meisinger caused a deed of trust to be recorded on the property, which was followed by a fraudulent bankruptcy on behalf of the person who supposedly now held an interest in the home. Meanwhile, Meisinger rented out the home to another person while foreclosure proceedings were stayed as a result of the fraudulent bankruptcy.
Meisinger “repeated the process of causing the recording of deeds of trusts in the names of various beneficiaries whose identities he controlled and causing the filing of bankruptcies on behalf of those lenders to delay the foreclosure proceedings, while collecting rents” on property in North Las Vegas, according to the plea agreement filed in this case.
In papers filed in relation to today’s sentencing, prosecutors said that there were more than 250 victims of the scheme, including homeowners, lenders, and renters. Meisinger “collected more than $1.5 million in illicit rent payments on more than 100 properties. Further, he caused more than 300 bogus bankruptcy petitions to be filed in the names of numerous individuals who had no knowledge their identity was being used.”
Meisinger also admitted that his illegal conduct violated Judge Phillips’ court order in a prior civil matter barring Meisinger from participating in the home finance or real estate industries for 10 years (see: http://go.usa.gov/3Sr23). In that order, Meisinger was also barred from filing bankruptcy petitions. Judge Phillips additionally imposed a $5 million civil fine on Meisinger.
“HUD-OIG continues to vigilantly protect FHA insured borrowers from those who conduct fraudulent loan modification schemes. This significant sentence demonstrates our commitment to protecting HUD’s important work in providing affordable home ownership,” said James Todak, Special Agent in Charge of Housing and Urban Development’s Office of the Inspector General.
The criminal case against Meisinger is the result of an investigation by the United States Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG).
School Bus Driver Pleads Guilty to Producing Child PornographyRead the Press Release
NORFOLK, Va. – Larry Carl Homan, 71, of Norfolk, pleaded guilty today to charges of production of child pornography.
According to a statement of facts filed with the plea agreement, in May 2015, a concerned parent complained to her daughter’s school that Homan, a school bus driver in Chesapeake, had acted inappropriately towards her daughter. A review of the surveillance footage from Homan’s school bus resulted in Homan being suspended without pay. The Chesapeake Police Department (CPD) became involved and executed a search warrant at Homan’s residence in Norfolk. A number of electronic devices were seized from Homan’s apartment, including a flash drive that was hidden inside a clock on Homan’s wall. The CPD analyzed the electronic devices and found that Homan had been producing child pornography inside his apartment in Norfolk.
Homan was indicted by a federal grand jury on Oct. 5, 2015, and faces a mandatory minimum penalty of 15 years in prison and a maximum penalty of 30 years in prison when sentenced on March 21, 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; Michael Goldsmith, Chief of Norfolk Police; and Col. K.L. Wright, Chief of Chesapeake Police, made the announcement after the plea was accepted by U.S. Magistrate Judge Lawrence R. Leonard. Assistant U.S. Attorney Elizabeth M. Yusi 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. 2:15-cr-129.
SCDC Partners with the U.S. Attorney’s Office and ATF for “Real-Time Reentry”Read the Press Release
Contact Person: Lance Crick (864) 282-2100 or Stephen Givens (803) 960-7088
Columbia, S.C. ----- The South Carolina Department of Corrections (SCDC) is partnering with the South Carolina United States Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to keep guns out of the hands of former offenders.
The project, called “Real-Time Reentry”, is two- fold. With respect to law enforcement, the project focuses on violent offenders and gang members who, after their release, re-offend with firearms while still under SCDC’s Intensive Supervision Services. The program ensures their swift apprehension and referral to federal authorities.
On the prevention side, however, the program offers proactive intervention. Assistant United States Attorneys (AUSAs) from the U.S. Attorney’s office and law enforcement officials visit with Youthful Offenders in prison to educate them about the opportunities and resources they have to lead rehabilitated and productive lives. The dialogue, however, also sensitively emphasizes the significant consequences these individuals might face should they re-offend with a gun while under supervision, post-release. The message is simple but serious - if caught with a firearm or ammunition, you will be taken into custody immediately and your case referred to ATF and the U.S. Attorney’s office in “real time” for federal review and prosecution in federal court, where firearms-related sentences for repeat-offenders are much more substantial.
Real-Time Reentry kicked off, December 7, 2015, when AUSAs and law enforcement officials met with 46 Youthful Offenders at the Trenton SCDC facility. Going forward, the Real Time Reentry team will return once a month to educate and encourage those individuals preparing for re-entry into their communities.
“Real Time Reentry is a multiagency partnership meant to address youthful offenders that are at risk for exposure to state and federal charges. This initiative is focused on available services and creating relationships to assist Youthful Offenders, under our supervision, stay on the straight and narrow” said Bryan Stirling, Director of the South Carolina Department of Corrections.
“Real Time Reentry” is the latest iteration of the U.S. Attorney’s Office Project Cease Fire, a program that in recent years has come to partner local, state, and federal law enforcement with the community. The collective efforts of this partnership continue to foster cooperation in the common goal to make South Carolina safer through reducing gun violence, arrests, and incarceration.
United States Attorney Bill Nettles reflected, “We look forward to partnering with SCDC to provide the Youthful Offender population the necessary help in making the future decision not to possess guns. We believe that prevention is more effective and more cost-efficient than incarceration. However, in the event that our efforts to help these individuals make better decisions are not heeded, we will not hesitate to utilize tools available to us under the criminal code.”
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Rochester Man Sentenced for Threatening President ObamaRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Brandon Correa, 31, of Rochester, who was convicted of making threats against the President, was sentenced to 18 months in prison by U.S. District Court Judge Elizabeth A. Wolford. The defendant was also sentenced to 36 months supervised release, during which time he will need to complete mental health and drug treatment.
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that the defendant posted threats to kill President Obama online in June 2014. Specifically, Correa posted a message on Twitter directed to President Barack Obama in which the defendant wrote “Im coming to watch you die.” The defendant was interviewed shortly after posting the threats and told a Secret Service Agent that the President was “evil” and that he had to “die.”
Correa was released from custody following the threat and was ordered not to have any contact with the President as a condition of his release. However, in August of 2014, the defendant again posted online threats directed against the President and others. Specifically, Correa posted messages on Facebook and Twitter directed to President Obama in which he wrote “GET READY to DIE Barack Obama.”
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Secret Service, under the direction of Special Agent in Charge, C. Todd Lassiter, Investigators from the New York State Police, Protective Services Unit, under the direction of Major Stephen Nevins, and Investigators from the Rochester Police Department, under the direction of Chief Michael Ciminelli.
Randolph Man Charged with Defrauding Dreamworks by Falsely Claiming He Created Kung Fu PandaRead the Press Release
BOSTON – A Randolph man was indicted on wire fraud and perjury charges in connection with his scheme to defraud DreamWorks Animation SKG, Inc., by falsely claiming that the company stole the characters and story for its animated movie, Kung Fu Panda.
Jayme Gordon, 51, was charged in an indictment unsealed today in U.S. District Court in Boston with four counts of wire fraud and three counts of perjury. He is scheduled to appear before U.S. District Court Magistrate Judge Judith D. Dein at 1:30 p.m. today.
“Our intellectual property laws are designed to protect creative artists, not defraud them,” said U.S. Attorney Carmen M. Ortiz. “The misuse of civil litigation as part of a fraud scheme, and lying under oath, as alleged in this case, warp our federal judicial system and must be addressed with appropriate criminal sanctions.”
“As alleged, Mr. Gordon went to great lengths to orchestrate and maintain this fraudulent scheme, trying to take credit for ideas he did not come up with nor work he simply did not do,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “This case demonstrates the FBI’s commitment to root out individuals who try to steal ideas and information from hard-working American companies.”
According to the indictment, Gordon filed the lawsuit as part of a fraud scheme designed to obtain a multi-million-dollar settlement from DreamWorks. To further his fraud and persuade DreamWorks to agree to a settlement, Gordon fabricated and backdated drawings of characters similar to those in Kung Fu Panda, lied repeatedly during his deposition, and destroyed computer evidence that he was required to produce in civil discovery.
The indictment alleges that beyond the superficial similarities, the panda characters (pictured below) and story that Gordon created during the 1990s has very little in common with DreamWorks’ movie, Kung Fu Panda.
The indictment alleges that, in early 2008, several months before the movie’s June 2008 release, Gordon saw a trailer for Kung Fu Panda. After seeing that trailer, Gordon revised his “Panda Power” drawings and story, which he renamed “Kung Fu Panda Power.” He made these revisions as part of his scheme, so that his work would appear to be more similar to the DreamWorks pandas he had seen in the trailer. In February 2011, Gordon filed a copyright infringement suit against DreamWorks in U.S. District Court in Massachusetts, and later that year, he proposed that DreamWorks agree to settle the suit by paying him $12 million. DreamWorks rejected that proposal, and the litigation continued for another two years.
During the course of the litigation, it is alleged that Gordon intentionally deleted relevant evidence on his computer that he was required to produce in discovery and lied during his civil deposition. Furthermore, Gordon fabricated and backdated sketches that served as support for his suit. The full nature of Gordon’s scheme came to light when DreamWorks discovered that Gordon had traced some of his panda drawings from a Disney Lion King coloring book (shown below).
The indictment also alleges that Gordon’s other sketches, which were dated 1993 or 1994, were copied from this coloring book, which was not published until 1996, therefore demonstrating that Gordon drew these sketches after 1996 and backdated them. After DreamWorks discovered the tracing from the coloring book, Gordon agreed to dismiss his suit. By this point, however, DreamWorks had spent more than two years defending the fraudulent suit, at a cost of approximately $3 million.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 and restitution. The charge of perjury provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and FBI SAC Shaw made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Adam Bookbinder and Amy Harman Burkart of Ortiz’s Cybercrime Unit. The U.S. Attorney’s Office and FBI would like to thank DreamWorks for its assistance during the investigation of this case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Attachments:
- Gordon's Characters
- Dreamworks Po and Master Shifu
- 1996 Disney Coloring Book
- Gordon's 2000 Registration
Randolph County Man Sentenced for Methamphetamine OffenseRead the Press Release
On December 17, 2015, Thomas H. Schaeffer, 43, of Sparta, was sentenced on a one-count indictment charging Conspiracy to Distribute Methamphetamine, Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Schaeffer, who had previously pled guilty to the methamphetamine offense, was sentenced to 188 months’ incarceration, 4 years’ supervised release, and was fined $400.00. Evidence at the plea and sentencing hearings established that, between January 2014 and February 2015, Schaeffer and others were transporting multi-ounce amounts of ice/methamphetamine from Kansas City to southern Illinois. Schaeffer was supplying dealer amounts of the ice/methamphetamine to others in Randolph County. At sentencing, the district judge found that Schaeffer was responsible for the distribution of approximately 2.95 kilograms of ice/methamphetamine.
The investigation was conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office and Tilden Police Department. The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
RBS Supervisor Pleads Guilty to Conspiracy to Commit Multimillion Dollar Securities FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that ADAM SIEGEL, 37, of Riverside, Connecticut, waived his right to indictment and pleaded guilty today in Hartford federal court to participating in a multimillion securities fraud scheme. SIEGEL also entered into an agreement to cooperate in the government’s ongoing investigation
According to court documents and statements made in court, between July 2008 and approximately 2014, SIEGEL was the Co-Head of U.S. Asset-Backed Securities, Mortgage-Backed Securities and Commercial Mortgage-Backed Securities Trading at RBS Securities Inc. RBS is a global securities firm with headquarters in Stamford, Connecticut. RBS also has a trading floor in Stamford where SIEGEL and some of the RBS employees that he supervised traded fixed income investment securities such as residential mortgage-backed securities (RMBS) and collateralized loan obligations (CLOs). In pleading guilty, SIEGEL admitted that he and others conspired to increase RBS’s profits on CLO and RMBS bond trades at the expense of customers. As part of the scheme, SIEGEL and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for bonds, all to benefit RBS.
The conspiracy was perpetrated in two ways. In certain transactions, SIEGEL and his co-conspirators misrepresented the seller’s asking price to the buyer (or vice versa), keeping the difference between the price paid by the buyer and the price paid to the seller for RBS. In other transactions, SIEGEL and his co-conspirators misrepresented to the buyer that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller, which allowed RBS to charge the buyer an extra, unearned commission.
The investigation revealed numerous fraudulent transactions by SIEGEL and other members of the conspiracy that cost at least 35 victim customers, including firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program, millions of dollars.
“Current regulations governing many fixed income products allow broker-dealers to operate in secrecy,” said U.S. Attorney Deirdre M. Daly. “But as the Court of Appeals for the Second Circuit recently reminded us in United States v. Litvak, under the securities laws, broker-dealers do not have a license to lie to their customers. Today’s plea is the most recent step in our continuing investigation into those who prey on fixed income investors. Others with relevant information should follow Mr. Siegel’s example and cooperate with us. We thank SIGTARP and the FBI for their hard work to date on this investigation. We are committed to our various investigations into the fixed income markets, and will continue to work with SIGTARP and the FBI, as well as our partners at the Department of Labor Office of the Inspector General, the Federal Housing Finance Administration Office of Inspector General, and the Fraud Section of the Department of Justice.”
“The opaque markets of residential mortgage-backed securities (RMBS) and collateralized loan obligations (CLO), which played such a large role in the financial crisis, require honesty and integrity to protect all who trade,” said SIGTARP Inspector General Romero. “During the financial crisis, Adam Siegel exploited the lack of transparency in those markets by victimizing the firm’s customers, including TARP banks. His crime included defrauding buying customers about the price his firm paid so that he could charge more, defrauding selling customers about the price a buyer was willing to pay, and lying that a bond his firm already held in inventory was actually being sold by a seller at an artificially inflated price. U.S. Attorney Deirdre Daly has shown great leadership, and her office and the FBI have been united with SIGTARP against crime related to the bailout.”
“Financial investors should not have to fear being deceived by brokers in an already risk-filled industry,” said FBI Special Agent in Charge Ferrick. “The criminal actions of Mr. Siegel and others like him will continue to be investigated and brought to justice by the Financial Fraud Task Force.”
SIEGEL pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum term of imprisonment of five years. He was released on a $250,000 bond and is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on March 11, 2016.
On March 11, 2015, Matthew Katke, a registered broker-dealer and managing director at RBS Securities Inc., pleaded guilty to the same charge and also is cooperating with the government.
This matter is being investigated by the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Jonathan Francis and Heather Cherry.
Today’s announcement is part of the ongoing efforts of the Financial Fraud Enforcement Task Force’s Residential Mortgage-Backed Securities (RMBS) Working Group, a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis and the federal government’s subsequent bailout. The RMBS Working Group brings together attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and state Attorneys General offices around the country.
The RMBS Working Group is led by Acting Associate Attorney General Stuart Delery, and co-chaired by Assistant Attorney General for the Criminal Division Leslie R. Caldwell, Principal Deputy Assistant Attorney General for the Civil Division Benjamin Mizer, U.S. Securities and Exchange Commission Director of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric T. Schneiderman.
For more information about the RMBS Working Group and the Financial Fraud Enforcement Task Force, visit: www.stopfraud.gov.
Previously Convicted St. Mary’s County Sex Offender Sentenced to 15 Years in Prison for Attempting to Induce a Minor to Have SexRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Nicholas Edward Seskar, Sr., age 41, of Lusby, Maryland, today to 15 years in prison, followed by lifetime supervised release, for attempting to induce a minor to engage in sex. Judge Grimm also ordered that upon his release from prison, Seskar 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; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); St. Mary’s County Sheriff Tim Cameron; and St. Mary’s County State’s Attorney Richard Fritz.
In 2006, Seskar admitted to having sex with a 15 year old when he was 30 years old. He pleaded guilty in the Circuit Court for St. Mary’s County to one count of sex offense in the third degree and was sentenced to three years in prison, with all but 18 months suspended.
According to his plea agreement, from March 23 to April 2, 2015, Seskar communicated on Facebook with an individual named “Tiffany” who he believed was 15 years old. “Tiffany” was in fact an undercover law enforcement officer with the St. Mary’s County Sheriff’s Office. Over time, Seskar’s Facebook conversations became extremely graphic regarding the sexual acts he wanted to perform on “Tiffany.” Seskar told the undercover police officer that he wanted to meet to have sex, and that he had slept with a 15 year old when he was 30 years old.
On April 2, 2015, Seskar arrived at a pre-arranged meeting place and was arrested by officers with the St. Mary’s County Sheriff’s Office.
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 St. Mary’s County Sheriff’s Office, HSI Baltimore and St. Mary’s County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi O’Malley and Special Assistant U.S. Attorney Jennifer Wine of the U.S. Department of Justice, who prosecuted the case.
Owners of Lehigh Valley Companies and Their Engineer Charged in Green Energy Fraud SchemeRead the Press Release
PHILADELPHIA – David Dunham, 35, of Bethlehem, PA, and Ralph Tommaso, 46, of Warren, NJ, were charged by indictment, unsealed today, with engaging in a multi-million dollar conspiracy to defraud individuals and the United States in a green energy scam involving used cooking oil, announced United States Attorney Zane David Memeger. The defendants are charged with conspiracy, providing false statements to the government, wire fraud, tax fraud, and obstruction of an IRS audit and a U.S. Department of Agriculture examination.
From 2010 through 2012, in Wind Gap, Allentown, Bethlehem, and elsewhere, Dunham and Tommaso operated, respectively, the companies Smarter Fuel, Inc. (Smarter Fuel) and Environmental Energy Recycling Corporation, LLC (EERC), coordinating the activities of these companies, and then formally merging under the umbrella of Greenworks Holdings, LLC (Greenworks). According to the 101-count indictment, the defendants falsely claimed to have produced and sold renewable fuel for which they misappropriated approximately $50 million in payments, subsidies, and other benefits. Dunham and Tommaso allegedly defrauded government programs intended to encourage the production of renewable fuel as an alternative to traditional fossil fuel. By claiming credits for renewable fuel they never produced, and that otherwise did not qualify, Duhnam and Tommaso stole tens of millions of dollars from the United States government. It is further alleged that Dunham and Tommaso stole millions more by fraudulently claiming and generating tradable credits that they sold to unsuspecting purchasers who believed these credits satisfied their legal obligation to introduce a certain quantity of renewable fuel per year.
The defendants, through their companies, collected used cooking oil from restaurants and other food service locations, sometimes processing it to remove hard particles, water, and other waste. They then sold this cleaned cooking oil primarily to renewable fuel producers that used it as a “feedstock” ingredient in their production process.
Dunham and Tommaso did not sell their cleaned used cooking oil as a final fuel, but allegedly fraudulently claimed otherwise, applying for and receiving government subsidies for every gallon of cleaned used cooking oil that they produced, plus more. Their claims vastly exceeded their actual production. In 2010, Dunham and Tommaso allegedly claimed subsidies and other payments on more than 17.5 million gallons of product, when they produced less than six million gallons. In 2011, Dunham and Tommaso allegedly claimed subsidies and other payments of more than 18 million gallons, when they only produced about 7.5 million gallons. Of the cleaned used cooking oil they did produce, the vast majority did not qualify for credit or subsidy. The defendants’ allegedly fraudulent claims included more than one million gallons of the wastewater that was the byproduct of their processes to clean debris and pollutants from used cooking oil, the non-fuel sales of their product as a feedstock ingredient to be used by biofuel producers in buyers’ production of biofuel, and transactions that existed on paper only, where the defendants did not produce or even possess the product for which they generated subsidies.
The indictment alleges that Dunham and Tommaso provided false information and altered and forged documents and records to government and private auditors in an effort to conceal their fraud. They allegedly directed employees to alter the documentation of obviously unqualified sales and change them to show sales that qualified for subsidies and other payments.
Dunham is also charged with underreporting his taxable income for the tax years 2009 and 2010. In his filings for these years, Dunham allegedly altered the dates on sales invoices, and delayed generating invoices on other sales, in order to avoid paying taxes on these sales until a subsequent tax year. He also allegedly obstructed an IRS audit of Smarter Fuel.
“According to the indictment, these defendants exploited critical government programs that were designed to encourage the production and use of renewable fuels. Instead of producing the renewable fuel as represented, the defendants lied to the government and stole tens of millions of dollars,” said Memeger. “My office will continue to hold accountable those people who enrich themselves through government fraud and deny the taxpayers the full benefit of effective federal programs.”
“The illegal activity in this case has real consequences, including undermining a law that reduces our nation’s dependence on foreign oil and achieves important greenhouse gas reductions,” said Director Doug Parker, of EPA’s Criminal Investigation Division. “Companies and their managers should think very carefully before taking similar actions that could lead to prosecution.”
“Fulfilling individual tax obligations is a legal requirement and those who willfully evade that responsibility will be prosecuted," said Special Agent-in-Charge Akeia Conner, IRS Criminal Investigation.
In a related matter, William Barnes, a professional engineer, was charged by information, unsealed today, with two counts of conspiring to provide false statements to the U.S. Environmental Protection Agency (“EPA”). Barnes was allegedly hired to help the companies in Wind Gap and in Allentown register for the EPA’s program as renewable fuel producers and allegedly conspired with the company owners to provide false Engineering Reports to the EPA.
If convicted, Dunham and Tommaso each face a substantial prison term, supervised release, a possible fine, and potential criminal forfeiture of up to $50 million. Dunham faces a $8,700 special assessment; Tommaso faces a $8,400 special assessment. Barnes faces a statutory maximum possible sentence of ten years in prison, supervised release, a possible fine, and a $200 special assessment.
The case was investigated by the Environmental Protection Agency, IRS Criminal Investigations, Department of Agriculture–Office of Inspector General, U.S. Postal Inspector Service, and the Federal Bureau of Investigation Allentown Resident Agency. It is being prosecuted by Assistant United States Attorneys Nancy E. Potts and John Gallagher.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Orlando Man Pleads Guilty to Child Sex TraffickingRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Hermenegildo Campa (34, Orlando) today pleaded guilty to child sex trafficking. He faces a maximum penalty of life in federal prison. A sentencing date has not yet been set.
According to the plea agreement, the victim in this case was a 15-year-old girl who was pregnant and homeless. She had run away from home and turned to prostitution as a means of surviving. Between October 2014 and February 2015, when the victim was in need of money, she would place ads on Backpage.com and engage in sex acts for money. Campa located the victim through Backpage.com and he met with her and paid her in exchange for sex.
Detectives with the Jacksonville Sheriff’s Office (JSO) Vice Unit ultimately located the victim during a routine vice operation. They immediately recognized that she was a juvenile and referred the investigation to a specialized human trafficking task force comprised of JSO investigators and the FBI. The victim informed the investigators that Campa was one of her regular customers and advised that his number was saved in her cellphone as “Chico.” The victim also provided details about Campa’s vehicle and where he lived. Investigators were able to identify Campa based on these descriptions.
On April 9, 2015, Campa was arrested at his home in Orlando. During an interview with law enforcement, he admitted to finding the victim on Backpage.com, contacting her, and paying to have sex with her.
This case was investigated by the Jacksonville Sheriff’s Office and the FBI. It is being prosecuted by Assistant United States Attorney Mac D. Heavener, III.
This 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 (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Oregon Man Convicted of Diverting Medical Marijuana and Money LaunderingRead the Press Release
An Oregon man, convicted of Conspiracy to Distribute Marijuana and Money Laundering, was sentenced to federal prison on December 17, 2015, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Walter Wayne Moser, 51, of Eugene, Oregon, received a 1 year and 1 day sentence for offenses which occurred in the Southern District of Illinois. Moser had previously pled guilty to those offenses. Following release from imprisonment, Moser will serve a 3 year term of supervised release. Moser was also ordered to pay a $375 fine and a $200 special assessment.
The investigation in this case showed that Moser operated a medical marijuana dispensary that was legal under Oregon state law. In addition to dispensing medical marijuana to patients in Oregon, Moser diverted pounds of marijuana to a co-defendant, Jason Furlong, in West Frankfort, Illinois, where the marijuana was resold for recreational use. Furlong would sell the marijuana and send payment back to Moser by FedEx in packages addressed to Moser’s graphic design company, which Moser used as a front to conceal the nature of the drug proceeds.
"Even as States like Illinois and Oregon have enacted laws allowing for medical use of marijuana, the United States Department of Justice still maintains a strong federal interest in preventing the diversion of marijuana from states where it is legal under state law, in some form,
to other states, and in preventing the diversion of marijuana intended for medical use to recreational use," said Acting United States Attorney James L. Porter.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Drug Enforcement Administration, the Internal Revenue Service, Criminal Investigations, and the Illinois State Police. This case was prosecuted by Assistant United States Attorney Donald S. Boyce.
Omaha Man Sentenced for Bank RobberyRead the Press Release
United States Attorney Deborah R. Gilg announced that Robert M. Davis, age 63, of Omaha, Nebraska, was sentenced today to four years, ten months imprisonment by the Honorable Laurie Smith Camp, for bank robbery. On September 28, 2015, Davis pleaded guilty to robbing the American National Bank at 9009 Maple on October 17, 2014. He was also ordered to serve a three-year term of supervised release upon his release from prison and to pay $965.00 in restitution.
On October 17, 2014, the bank had been locking the front doors due to a number of bank robberies in Omaha. Davis was allowed in, approached the teller window, pulled a gun from his pocket, pointed it at the teller and demanded money. The clerk put $965.00 in the bag. He was connected to the robbery by surveillance video from the bank and from DNA that was on a hat he discarded when he left the area.
The case was investigated by the Omaha Police Department and Federal Bureau of Investigation.
Nevada Pain Management Doctor Sentenced for Unlawful Distribution of Controlled SubstancesRead the Press Release
LAS VEGAS, Nev. – Mahesh Kuthuru, M.D. was sentenced today by U.S. District Judge Jennifer A. Dorsey to two years and four months in prison, three years of supervised release, and 50 hours of community work service for unlawfully writing prescriptions for oxycodone and other highly addictive prescription painkillers to persons who did not have a medical need for them, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Kuthuru, 47, of Henderson, pleaded guilty in October to one count of distribution of a controlled substance. He is currently in federal custody serving a sentence for health care fraud and unlawful drug distribution imposed in the Northern District of New York.
“If you illegally and unlawfully use your medical license to divert pharmaceuticals you will be prosecuted, convicted, and sent to prison,” said U.S. Attorney Bogden. “We continue to make the investigation and prosecution of medical professionals who are involved in illegal drug dealing a top priority in our office.”
Kuthuru is a Nevada-licensed physician who operated Desert Pain Management in Las Vegas. From July 6 to Nov.15, 2012, Kuthuru wrote prescriptions for Oxycodone, Percocet, MS Contin, Roxicodone and Methadone to undercover officers who posed as patients, and who did not have a medical necessity for the drugs. During each visit, Dr. Kuthuru performed no or minimal physical exam, and failed to refer the patient to a specialist, physical therapist or other for further diagnosis.
The Centers for Disease Control and Prevention reports that since 1999, the amount of prescription painkillers prescribed and sold in the U.S. has nearly quadrupled, yet there has not been an overall change in the amount of pain that Americans report. Every day, 44 people in the U.S. die from overdose of prescription painkillers, and many more become addicted.
The case was investigated by the Nevada High Intensity Drug Trafficking Area (Nevada HIDTA) Pharm-Net Task Force, including the DEA, IRS Criminal Investigation, Las Vegas Metropolitan Police Department, Henderson Police Department, North Las Vegas Police Department, and the Nevada Division of Investigations. The prosecution was handled by Assistant U.S. Attorney Crane M. Pomerantz.
Morris Resident to Serve Time in Federal Prison for Involvement in Insurance Fraud SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on December 18, DUSTIN WHITTEN, 32, of Morris, was sentenced by U.S. District Judge Janet Bond Arterton in New Haven to 12 months and one day of imprisonment, followed by three years of supervised release, for his involvement in an insurance fraud scheme.
According to court documents and statements made in court, in May 2009, Ryan Geddes of Litchfield transferred to WHITTEN a residential property located in Old Forge, N.Y., while Geddes continued to use the property and pay the mortgage and maintenance expenses. At the time, Geddes was being sued by a creditor who was seeking to collect a debt and identify Geddes’ assets. In March 2011, WHITTEN and Geddes made arrangements for an insurance company to issue a policy on the New York property in WHITTEN’s name. On July 4, 2011, after a bankruptcy court meeting about compensating Geddes’ creditors, the New York property was destroyed in a fire. In September 2011, WHITTEN swore out an insurance claim on the property, representing himself as the owner and seeking compensation in the respective amounts of $515,038.50 for the destroyed structure and $92,974.47 for personal property allegedly lost in the fire. The claim was eventually denied by the insurance company.
WHITTEN and Geddes have both admitted that the purpose of the scheme was to shield the insurance proceeds from Geddes’ creditors.
On April 17, 2015, WHITTEN pleaded guilty to one count of conspiracy to commit mail and wire fraud.
On April 28, 2015, Geddes pleaded guilty to charges related to this scheme and separate fraud schemes. He is scheduled to be sentenced in February 2016.
This matter has been investigated by the Federal Bureau of Investigation, and Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys Henry K. Kopel and Michael J. Gustafson.
Lockport Man Arrested, Charged with Ammunition ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Bob Odrzywolski, 72, of Lockport, NY, was arrested and charged by criminal complaint with being a felon in possession of ammunition. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that according to the complaint, the defendant, a convicted federal felon, obtained ammunition from a local retailer. Subsequently, a search warrant was executed at Odrzywolski’s Crosby Road residence. During the search, officers recovered 10 handguns and approximately 2000 rounds of ammunition.
The defendant was previously convicted and could not possess firearms.
The defendant made an initial appearance this afternoon before U.S. Magistrate Judge Michael J. Roemer. He is being detained pending a detention hearing on December 23, 2015.
The complaint is the result of an investigation by the Niagara County Sheriff’s Department, under the direction of Sheriff James Votour and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division.Las Vegas Investment Adviser Indicted in $30 Million Microcap Stock Manipulation SchemeRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted a Las Vegas investment adviser for allegedly accepting hundreds of thousands of dollars in cash kickbacks in return for his assistance in getting his clients to purchase microcap stocks that were the subject of a stock market manipulation scheme, U.S. Attorney Paul J. Fishman announced.
Donald S. Toomer, 44, of Henderson, Nevada, is charged by indictment with one count of conspiracy to commit securities fraud and investment adviser fraud, two counts of securities fraud, and two counts of investment adviser fraud.
According to the indictment:
Between 2008 and 2010, Toomer participated in an extensive “pump-and-dump” scheme in which he and others fraudulently inflated the prices of certain shares in order to sell them later at artificially inflated prices. The scheme involved four public companies: BioNeutral Group Inc. (BONU), NXT Nutritionals Holdings Inc. (NXTH), Mesa Energy Holdings Inc. (MSEH), and Clear-Lite Holdings Inc. (CLRH) (collectively, the “Target Companies”).
First, other conspirators obtained control over large blocks of the free trading shares of the Target Companies. Next, Toomer and others “pumped” the price of those shares by, among other things, engaging in manipulative trading of the stocks of the Target Companies and disseminating promotional materials encouraging others to purchase them. Finally, they “dumped” them by selling large volumes of the Target Companies’ stock to victim investors. The target companies’ stock price would then drop, resulting in losses to the victims.
As part of the scheme, Toomer caused his clients to purchase the stock of the Target Companies in order to create the false impression of market interest and demand in the stock of the Target Companies; build trading volume that would be attractive to potential investors who would later receive promotional materials about the stock; and generate income to fund the promotional campaigns that occurred in the later phases of the scheme.
Toomer made various material misrepresentations and omissions to his clients to obtain their authorization to buy the Target Companies’ stock in their brokerage accounts, including falsely representing that he had done independent research regarding the Target Companies. He also failed to disclose the cash payments or other compensation that he received in exchange for convincing his clients that the Target Companies were promising investments.
Over the course of the conspiracy, Toomer received hundreds of thousands of dollars in cash kickbacks from his conspirators’ illicit trading profits, none of which were disclosed to his investment advisory clients. Rather than providing investment recommendations and advice based upon the best interests of his clients, as he was legally required to do, Toomer allegedly made investment recommendations based on his own personal interests and those of his conspirators.
The scheme collectively generated over $30 million in illicit trading proceeds.
The conspiracy count with which Toomer is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities and investment adviser fraud counts each carry a maximum potential penalty of five years in prison and a $5 million fine.
The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against Toomer today.
On Dec. 15, 2015, Samuel DelPresto, 48, a stock promoter from Holmdel, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares to a one-count information charging him with conspiracy to commit securities fraud for his involvement in the scheme.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s indictment. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Andrew Calamari, for its assistance in this matter.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense Counsel: Michael Critchley Esq., Roseland, New Jersey
Kalamazoo Man, Edward Oneal Bowen, Pleads Guilty to String of Armed RobberiesRead the Press Release
Edward Oneal Bowen Committed 3 Kalamazoo Area Credit Union Robberies in 2014
GRAND RAPIDS, MICHIGAN — Edward Oneal Bowen, 48, of Kalamazoo, pled guilty in federal court on December 18 to three counts of armed credit union robbery and one count of brandishing a firearm during a crime of violence, U.S. Attorney Patrick Miles announced today. He faces up to 25 years in federal prison for each count of armed robbery, and a mandatory consecutive sentence of at least seven years up to life in prison for the firearms charge. He will be sentenced in April 2016 by Chief U.S. District Judge Robert J. Jonker.
On May 5, 2014, Bowen robbed the Preferred Credit Union in Kalamazoo of approximately $6,200. On June 18, 2014, he robbed the Preferred Credit Union again, making off with approximately $6,400, but leaving behind an orange juice cup and straw smelling of alcohol. On July 8, 2014, he robbed the Kellogg Community Federal Credit Union in Kalamazoo, forcing the employees to access the vault, stealing approximately $41,000, and locking the employees in a utility closet. During each robbery, Bowen wore a wig and brandished a handgun. He was able to escape after each robbery.
Kalamazoo Department of Public Safety officers solved the robberies by obtaining a DNA sample from the straw left behind at the scene of the second Preferred Credit Union robbery. Surveillance photos from that robbery showed the suspect holding the cup in his left hand while pointing a gun at employees with his right hand. Witnesses said the suspect had the straw from the cup in his mouth at the start of the robbery. The DNA profile from the straw matched a DNA profile of Bowen contained in the Combined DNA Index System ("CODIS"). Bowen’s DNA profile was in CODIS because a sample was taken from him after a 1996 conviction for assault with intent to commit murder. Officers also obtained a fingerprint match from the cup Bowen left behind.
The case was investigated by the Kalamazoo Department of Public Safety, the Kalamazoo County Sheriff’s Department, and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Clay Stiffler and former Assistant U.S. Attorney Russ Kavalhuna.
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Jury Convicts Schenectady Man of Heroin ConspiracyRead the Press Release
ALBANY, NEW YORK – A jury on Friday convicted Raymond P. Baker, age 36, of Schenectady, New York, of conspiring to distribute and possess with intent to distribute heroin, announced United States Attorney Richard S. Hartunian and Special Agent in Charge James J. Hunt, New York Division, Drug Enforcement Administration.
Baker faces at least 10 years and up to life in prison, and a term of post-imprisonment supervised release of at least 8 years and up to life, when he is sentenced on May 9, 2016 by Senior United States District Judge Thomas J. McAvoy.
The jury convicted Baker following a four-day trial. The evidence at trial demonstrated that Baker worked with another person to sell heroin in Latham and Albany, and that the amount of heroin involved in the conspiracy was 100 grams or more.
This case was investigated by the Drug Enforcement Administration. It was prosecuted at trial by Assistant U.S. Attorney Michael Barnett, and was prosecuted to indictment by Assistant U.S. Attorneys Wayne A. Myers and Elizabeth R. Rabe.
John P. Fishwick Jr. Sworn in as United States Attorney for the Western District of VirginiaRead the Press Release
ROANOKE, VIRGINIA – In a short ceremony Monday morning, John P. Fishwick Jr. was sworn in as United States Attorney for the Western District of Virginia.
United States District Court Chief Judge E. Glen Conrad administered the oath of office this morning at the federal courthouse in Roanoke, Virginia. A public investiture commemorating the appointment will be held in January 2016.
U.S. Attorney Fishwick, 58, of Roanoke, Va., earned an undergraduate degree from Harvard University and his J.D. from Washington and Lee University. Upon graduation from law school Mr. Fishwick clerked for then U.S. District Court Judge James Turk. Mr. Fishwick has over 30 years of trial experience in state and federal court.
Mr. Fishwick’s nomination for the U.S. Attorney’s post was recommended by Senators Warner and Kaine. He was appointed and commissioned by President Barack Obama following a unanimous confirmation vote by the United States Senate.
“I look forward to working with the great lawyers and staff of the United States Attorney’s Office, our law enforcement partners, community leaders, and others, on protecting the citizens of the Western District of Virginia. We will work hard to seek justice every day,” United States Attorney Fishwick said today. “I also want to thank Tony Giorno for his excellent leadership of the office over the past year.”
The United States Attorney’s Office for the Western District of Virginia has staffed offices in Roanoke, Abingdon, Charlottesville and Harrisonburg, with approximately 56 full-time employees, including 28 Assistant United States Attorneys. Additionally, the district has offices in Lynchburg, Danville and Big Stone Gap.
Indianapolis man sentenced to prison for Social Security and passport fraudRead the Press Release
INDIANAPOLIS - United States Attorney, Josh J. Minkler, announced today that Adam Wilson, 37, Indianapolis, was sentenced to eight months in prison by U.S. District Judge Tanya W. Pratt following his guilty plea to intentionally furnishing false information to social security administration and false statement in application for a passport. Wilson also must pay a fine of $2,000. This case was the result of a joint investigation by the Social Security Administration’s Office of the Inspector General, the U.S. Department of State’s Diplomatic Security Service and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Wilson pled guilty to the felony offenses in U.S. District Court. In 2007, Wilson entered the United States as a Cuban refugee. In July 2012, Wilson became a naturalized citizen of the United States.
After arriving in the United States in 2007, Wilson applied for and obtained a social security number. In August 2012, Wilson went into the Social Security Administration (“SSA”) in Anderson, Indiana, and applied for a new social security number, stating that he had never had a prior social security number while listing a fictitious name as his father’s name. As a result, the Social Security Administration issued Wilson a new social security number. Federal agents later interviewed Wilson and seized the fraudulent second social security card. Despite relinquishing the card, Wilson visited the SSA seven more times in attempt to obtain a new card with the fraudulent social security number.
In July 2012, Wilson applied for a United States passport using an address where he did not live and listing his father’s name as an individual who was not his father. In October 2012, Wilson applied for a replacement passport and again listed another individual’s name as his father.
While waiting for the disposition of this case, Wilson violated his pretrial release conditions. Specifically, Wilson requested and obtained permission from the Probation Office to travel to Florida to visit his relatives for Thanksgiving. Instead of abiding by these preapproved plans, Wilson left the country and was located by immigration officials in Houston, Texas. There, Wilson presented to them a Cuban passport after having arrived on a flight from Cancun, Mexico. The Probation Office neither approved Wilson’s international travel nor had knowledge of Wilson’s Cuban passport.
According to Assistant U.S. Attorney Kyle M. Sawa, who prosecuted the case for the government, Judge Pratt also imposed two years of supervised release after Wilson’s prison sentence is completed.
Honolulu Man Convicted of Drug and Firearm ChargesRead the Press Release
HONOLULU – After an eight-day trial in the United States District Court in Honolulu, a federal jury found Gilbert Lee Medina, 52, of Honolulu, guilty on Friday, December 18, of conspiring to distribute and possess with intent to distribute methamphetamine, as well as unlawfully possessing a firearm. The jury also found him guilty of attempting to enter a secure area of the Honolulu International Airport on May 29, 2013, by fraud or false pretenses.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to the evidence presented at trial, Medina was at the center of a large scale methamphetamine trafficking conspiracy that spanned at least 12 months from April 2012 to April 2013, and was responsible for well over 20 pounds of methamphetamine being brought from California to Hawaii. Medina received the large quantity of methamphetamine from several different sources and was responsible for distributing the methamphetamine to other members of the conspiracy in Hawaii.
The evidence presented at trial also established that Medina unlawfully possessed a firearm on his boat docked at the Ala Wai harbor. Medina had prior felony convictions and is prohibited from possessing firearms. Additionally, the evidence established that Medina attempted to use a false identification at the Honolulu International Airport in an effort to flee from Hawaii in May 2013. TSA officials did not permit Medina to get past the security, and Medina was ultimately arrested and charged with an additional criminal offense for attempting to enter the secured area of the airport by presenting the false identification.
Because of his prior criminal record, Medina faces a possible sentence of life in prison on the methamphetamine trafficking charge when he is sentenced by Senior District Judge Helen Gillmor on March 31, 2015. The maximum penalty for the firearm offense is up to ten years in prison, while the unlawful entry offense is a misdemeanor.
The investigation which resulted in the charges in the case was conducted by Homeland Security Investigations, with assistance from the United States Postal Inspection Service, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Transportation Security Administration at Honolulu International Airport also contributed significantly to the investigation. Assistant U.S. Attorney Tony R. Roberts handled the prosecution.
Grand Rapids Man, Senecca Keily Freeman, Sentenced to Twenty-Two Years in Federal Prison for Possessing Firearm to Protect Lethal Drug TradeRead the Press Release
GRAND RAPIDS, MICHIGAN – Senecca Keily Freeman, 35, of Grand Rapids was sentenced today to more than twenty-two years in federal prison for possessing a firearm to protect a lethal drug trafficking operation, U.S. Attorney Patrick Miles announced. In addition to the 270-month prison term, Chief U.S. District Judge Robert Jonker imposed a five-year term of supervised release that will commence once Freeman is released from imprisonment and ordered him to pay a $2,500 fine.
Freeman pleaded guilty on August 7, 2015, to illegally possessing a firearm as a convicted felon. The relevant conduct surrounding Freeman’s conviction was outlined in the government’s sentencing memorandum and motion for upward departure and variance. On November 18 and 19, 2014, Freeman distributed controlled substances to two of his drug customers. The customers believed they were buying heroin, but the substance was in fact fentanyl, a potent synthetic opiate. The customers used the drug, and one of them overdosed and died of "acute fentanyl toxicity" as a result. The Grand Rapids Police responded to a call for a drug overdose and found the customers outside Freeman’s home. Police learned that Freeman, a convicted felon, had been distributing drugs from his home and that he had a firearm. Police obtained a search warrant and found more than 60 bags of fentanyl and a stolen firearm. Investigation revealed that Freeman used the stolen firearm to protect and further his drug operation.
Freeman received a lengthy sentence both because of the loss of life and because he was eligible for increased penalties under the Armed Career Criminal Act ("ACCA"). Under federal law, a person who possesses a firearm after sustaining at least three previous felony convictions of a certain type and severity must be sentenced to at least fifteen years in prison. Freeman’s prior convictions included incidents involving robbery, drug dealing, and assault and battery.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Grand Rapids Police Department (GRPD) investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
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Former Logos Preparatory Academy Teacher Sentenced on Child Pornography ChargesRead the Press Release
HOUSTON – A 42-year-old Sugar Land man has been ordered to federal prison following his conviction for possessing and distributing child pornography, announced U.S. Attorney Kenneth Magidson. Chad Michael Cole pleaded guilty Sept. 3, 2015.
Today, U.S. District Judge Sim Lake ordered Cole to serve a mandatory minimum sentence of 60 months in federal prison. He will also be required to serve eight years of supervised release and must also register as a sex offender.
The charges arose following a June 2014 undercover operation during which an online user shared 27 videos depicting child pornography with an FBI agent. An investigation into the IP address associated with the videos led law enforcement officials to an address in Sugar Land. Authorities executed a search warrant at that location which was determined to be Cole’s residence, at which time they seized a custom desktop computer. Forensic analysis led to the discovery of approximately 269 videos and 205 images of child pornography.
At the time of the search, Cole had been employed by Logos Preparatory Academy in Sugar Land where he taught junior level physics and an occasional third grade computer class.
Cole has been and will remain in federal custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of a collaborative investigation conducted by FBI, Fort Bend District Attorney's Office and Fort Bend County Sheriff's Office.
This case, prosecuted by Assistant U.S. Attorney Carrie Wirsing, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Lansing Resident, Qasim I. Verser, Pleads Guilty to Federal Tax ChargeRead the Press Release
Defendant Illegally received over $190,000 in tax refunds.
GRAND RAPIDS, MICHIGAN — On December 21, 2015, Qasim I. Verser, 25, a former resident of Lansing Michigan, pled guilty in federal court to having obtained more than $190,000 from the United States Treasury in 2012 and 2013 by causing false federal tax returns to be filed with the Internal Revenue Service, U.S. Attorney Patrick Miles announced today. His 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 beyond."
Complaints by local citizens prompted the Federal Bureau of Investigation to open a criminal investigation which included obtaining multiple search warrants to seize evidence of a tax fraud scheme. During the multi-year investigation, more than 50 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, defendant Verser’s aunt, Taka Chiwocha-Crowell, pled guilty to filing false tax returns and was sentenced to 42 months’ incarceration. Verser’s sentencing has been scheduled for May 2, 2016 before Chief U.S. District Judge Robert J. Jonker.
The investigation was conducted by Special Agent Rod Charles, Lansing FBI, and Special Agent Paula Wood, Lansing IRS Criminal Investigations, and the case is being prosecuted by Assistant U.S. Attorney Michael A. MacDonald.
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Former Executive Director of Newark Watershed Conservation and Development Corporation Admits Role in Nearly $1 Million Kickback and Fraud SchemeRead the Press Release
NEWARK, N.J. – The former executive director of the Newark Watershed Conservation and Development Corp. (NWCDC) today admitted accepting approximately $999,000 in kickback payments in exchange for her assistance in awarding work to various vendors and contractors of the agency, U.S. Attorney Paul J. Fishman announced.
Linda Watkins Brashear, 56, of West Orange, New Jersey, pleaded guilty before U.S. District Judge José Linares in Newark federal court to Counts 1 and 5 of a five-count information charging her with a wire fraud scheme to defraud the NWCDC by accepting bribes and kickback payments from contractors and an employee of the corporation, which were funded by payments from the NWCDC based on fraudulently inflated invoices or issued for work that was not performed by the contractors (Count 1), and subscribing a false tax return for the year 2012 (Count 5).
According to documents filed in this case and statements made in court:
Brashear served as the executive director for the NWCDC from 2007 to March 2013. During this time, she and others devised a scheme to defraud the NWCDC of her honest services in the affairs of the NWCDC and of the NWCDC’s money and property. The object of the scheme was for Brashear and others to accept a substantial stream of concealed and undisclosed kickbacks from NWCDC contractors and an employee of the NWCDC for her direct and indirect benefit in exchange for action and assistance in the affairs of the NWCDC, and for her violating her official duties and responsibilities.
Between 2008 and March 2013, Brashear accepted approximately $999,000, in kickbacks financed through the receipt of payments by contractors and an employee of the NWCDC that were fraudulently obtained from the NWCDC with Brashear’s assistance, through materially false pretenses, representations and promises. In particular, Brashear accepted kickbacks as summarized below:
Time Period
Approximate Amount of Kickbacks
Paid By
September 2012 - March 2013
$39,000
NWCDC “Employee 1”
January 2009 – December 2012
$260,000
James Porter (identified in Count 1 as “partner of the special projects manager”)
January 2008 – June 2012
$70,000
Printing contractor
January 2011 – January 2013
$33,000
Marketing contractor
September 2012 – April 2013
$90,000
Cleaning contractor
April 2009 – February 2013
$118,000
Homeland Security contractor
January 2009 – May 2012
$40,000
Interior designer
January 2008 – March 2013
$177,000
Internet research consultant
October 2011 – March 2013
$29,000
Political consultant
April 2011 – September 2012
$32,000
Media consultant
January 2008 – March 2013
$27,000
Giacomo “Jack” DeRosa
May 2011 – March 2013
$84,000
Security consultant
Brashear routinely accepted payments from some of these contractors through Donald Bernard Sr. Brashear and Bernard also used their email accounts to facilitate this kickback and fraud scheme. Bernard was previously charged in December 2014 in a 20-count indictment with various federal offenses involving a scheme to defraud the NWCDC of his honest services and the NWCDC’s money and property by accepting and agreeing to accept bribes and kickbacks from certain NWCDC contractors, which were financed at least in part through the contractors’ fraudulent padding of invoices to the NWCDC.
Brashear admitted taking payments from James Porter, a contractor who pleaded guilty in January 2015 to conspiracy to defraud the NWCDC of honest services, money and property through the use of interstate wire transmissions, as well as tax evasion for his role in the kickback scheme. The roofing contractor referred to in Count 1 of the information, Giacomo “Jack” DeRosa, was charged in a six-count fraud and money laundering indictment in December 2014 for his role in passing kickbacks to Bernard, which were shared, in part, with Brashear.
Brashear also admitted making and subscribing a U.S. Individual Income Tax Return, Form 1040, for tax year 2012, signed and filed with the IRS under penalty of perjury, which she did not believe to be true and correct, including approximately $316,000 in unreported income that she received through the kickback payments.
The wire fraud charge to which Brashear pleaded guilty carries a maximum potential penalty of 20 years in prison. The charge of filing a false tax return carries a maximum potential penalty of three years in prison. Both charges are punishable by a fine of $250,000 or twice the amount of the pecuniary gain or loss from the offense. Sentencing is scheduled for April 5, 2016.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Richard M. Frankel; IRS – Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Housing and Urban Development, Office of Inspector General, Newark office, under the direction of Special Agent in Charge Christina Scaringi, as well as criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s guilty plea. U.S. Attorney Fishman also thanked the N.J. Office of the State Comptroller, under the direction of Acting State Comptroller Philip James Degnan, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Jacques Pierre, Mala Ahuja Harker and Leslie Schwartz of the U.S. Attorney’s Office Special Prosecutions Division.
Defense counsel: Michael Baldassare Esq., Newark
Former Department of Defense Contractor Pleads Guilty to Making False Statement and Damaging Army ComputersRead the Press Release
BOSTON – A Westfield resident who previously served in the Chinese People’s Liberation Army pleaded guilty in U.S. District Court in Springfield on Friday, Dec. 18, 2015, to lying on his security clearance form and damaging U.S. Army computers.
Wei Chen, 62, pleaded guilty to making a false statement and damaging a U.S. Army computer. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for March 29, 2016.
Prior to immigrating to the United States and becoming a citizen in 2006, Chen served in the People’s Liberation Army. In 2010, Chen applied for a job as a computer system administrator for a Department of Defense (DOD) contractor, which required him to have a Secret-level security clearance. To obtain that clearance, Chen completed a questionnaire on which he certified that he understood that a false statement could be punished by imprisonment. Nonetheless, in response to the form’s question about whether he had ever served in a foreign country’s military, Chen falsely answered, “no.” Chen lied on this form because he believed that a truthful answer would reduce his chances of receiving the security clearance he needed to work as a DOD contractor. After submitting the form with false information, Chen received a secret level security clearance and was assigned to work for the U.S. Army as a system administrator at Camp Buehring in Kuwait.
On June 15 and 16, 2013, Chen connected one or more of his own thumb drives to computers at Camp Buehring that were connected to the Army’s unclassified network and the classified Secret-level network. Chen then made an effort to cover his tracks and hide his security violation. Specifically, he cleared network logs on the server that would have documented the connection of the thumb drive to the network server. Chen also copied a computer file, containing saved e-mail and documents, from his Secret-level workstation onto his thumb drive.
The charging statutes provides a sentence of no greater than five years in prison on the false statement charge and 10 years in prison on the charge of damaging a computer, three years of supervised release, a fine of $250,000 for each charge, and forfeiture. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Daniel Andrews, Director of the Computer Crime Investigative Unit of the U.S. Army Criminal Investigation Command, made the announcement. The case is being prosecuted by Assistant U.S. Attorneys Adam Bookbinder and B. Stephanie Siegmann of Ortiz’s Criminal Division.