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15 December 2015
Southeast Texas Women Sentenced for Inmate Income Tax SchemeRead the Press Release
BEAUMONT, Texas –Two Southeast Texas women have been sentenced to federal prison in connection with an income tax return scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Stasha Franchell Anderson, 34, of Jasper, Texas, pleaded guilty on July 1, 2015 to aiding in the preparation of a false tax return and was sentenced to 36 months in federal prison today by U.S. District Judge Marcia Crone. Jessica Bellis, 43, of Baytown, Texas, pleaded guilty on July 9, 2015 to conspiracy to commit wire fraud and was sentenced to 30 months in federal prison today by Judge Crone.
According to information presented in court, Derek Cornelius Briscoe, 36, held himself out as a tax preparer sometimes doing business as “Thaferrets Tax Service” from his residence in Jasper, Texas. Briscoe maintained contacts with the female inmates at the Jefferson County Jail in Beaumont, Texas. Briscoe offered those inmates a fee in exchange for personally identifying information of other inmates that could be used to facilitate the filing of false tax returns. Anderson and Bellis were inmates who supplied Briscoe with the personally identifiable information of other inmates to file false tax returns. The two women emailed or telephoned Briscoe to give him the inmates’ personal information, which was then used to electronically file fraudulent tax returns for the years 2009, 2010, and 2011. The false tax returns consisted of fictitious employment information, income, and deductions for educational expenses. The refunds were deposited in bank accounts controlled by Briscoe. Briscoe was previously sentenced for his part in the scheme. During times when Anderson was not incarcerated, she also aided Briscoe in the preparation of the false tax returns. Anderson, Bellis, and Briscoe were involved in the preparation of over 500 false tax returns.
Briscoe was sentenced to 57 months in federal prison on Nov. 19, 2015. Additionally, Anderson was ordered to pay restitution of $156,519 to the IRS while Bellis was ordered to pay restitution in the amount of $30,000. Both women are jointly and severally liable for $1,127,193 in total restitution along with defendant Briscoe.
This case was investigated by Internal Revenue Service-Criminal Investigation and prosecuted by Assistant U.S. Attorney Lesley Anne Bartow.
South Texas Man Sentenced for Trafficking 20 Kilos of Pure MethRead the Press Release
CORPUS CHRISTI, Texas – A 40-year-old Brownsville man has been ordered to federal prison following his conviction of possession with the intent to distribute methamphetamine, announced U.S. Attorney Kenneth Magidson. Ricky Joe Urenda pleaded guilty Sept. 3, 2015.
Today, U.S. District Judge Nelva Gonzalez Ramos ordered Urenda to serve 168 months in federal prison to be followed by five years of supervised release.
On June 26, 2015, Urenda arrived at the U.S. Border Patrol checkpoint near Sarita driving a Dodge Avenger bound for Florida. A routine K-9 exam resulted in an alert which prompted agents to refer Urenda and his vehicle to secondary for further inspection. That inspection resulted in the discovery of 25 bundles in a hidden compartment in the vehicle which tested positive for methamphetamine. Laboratory analysis determined the drugs had a purity level of 99.3% resulting in 20 kilograms of pure methamphetamine.
In federal custody since his arrest, Urenda will remain there pending transfer to a U.S. Bureau of Prisons facility to be designated in the near future.
The conviction stems from an investigation by the Drug Enforcement Administration and Border Patrol. Assistant U.S. Attorney Lance Watt is prosecuting the case.
Secret Service Investigation Leads to Prison Sentence for Illinois ManRead the Press Release
PITTSBURGH -- A resident of Chicago, Illinois, has been sentenced in federal court to 52 months imprisonment, to be followed by 3 years supervised release on his conviction of conspiracy, using unauthorized access devise in aggregate of $1,000, possessing device-making equipment, and possessing 15 or more access devices, United States Attorney David J. Hickton announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentence on Joel M. Cosey, age 27.
According to information presented to the court, on or about August 9, 2013, Cosey conspired, possessed device-making equipment, possessed 15 or more access devices, and used unauthorized access devices in aggregate of $1,000.
Assistant United States Attorney Shardul S. Desai prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Secret Service for the investigation leading to the successful prosecution of Cosey.
Santa Rosa Couple Convicted of Conspiracy to Defraud the United StatesRead the Press Release
SAN FRANCISCO – A federal jury convicted Jay Scott Soderling and Jessica Lynn Soderling today, a married couple from Santa Rosa, on one count of conspiracy to defraud the United States announced Acting United States Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Andrew Toth. The jury also convicted Mr. Soderling of one count of tax evasion.
The verdict follows a five-day jury trial before the Honorable Vince Chhabria, United States District Judge. The evidence at trial showed that the defendants were both involved in efforts to conceal assets from the IRS to avoid payment of Mr. Soderling’s tax liabilities. Specifically, during 2004 and 2005, Jay Soderling evaded payment of his tax liabilities by hiding money and assets belonging to him in the name of a corporation. Subsequently, in 2008 and 2009, after the IRS discovered he was keeping his personal assets in the corporation, The Soderlings worked together to further conceal assets by, among other things, moving money from the corporation’s account into a bank account opened for this purpose in Mrs. Soderling’s name. Jay Soderling originally was indicted on August 9, 2011, for a single count of tax evasion, in violation of 26 U.S.C. § 7201. A superseding indictment was later filed adding the 18 U.S.C. § 371 conspiracy charge against the couple.
In finding Jay and Jessica Soderling guilty of conspiracy, the jury concluded that the evidence demonstrated the defendants obstructed the lawful functions of the IRS by deceitful or dishonest means as charged in the indictment. In addition, the evidence produced at trial demonstrated that Mr. Soderling willfully evaded payment of taxes he owed to the United States. According to papers filed with the court, beginning in July 2004, the IRS began attempting to collect Mr. Soderling’s tax liabilities. Mr. Soderling admitted owing the IRS approximately $90,000, but he made written and oral statements to IRS employees misrepresenting his ability to pay the debt. Among other things, Jay Soderling told the IRS he had no significant assets, that he had negligible income, and that he did not expect his financial situation to change. In reality, Mr. Soderling knew that he was well on his way to receiving an enormous financial windfall from several real-estate transactions. The government also demonstrated Mr. Soderling failed to disclose his use of corporate funds to purchase a Dodge Viper, a new boat, and other personal items.
The maximum statutory penalty for conspiracy to defraud the United States, in violation of 18 U.S.C § 371, is five years in prison and a fine of $250,000. The maximum statutory penalty for each count of tax evasion, in violation of 26 U.S.C § 7201, is five years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorneys Michael G. Pitman and Jose A. Olivera are prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Rockford Man Pleads Guilty to Illegally Possessing A FirearmRead the Press Release
ROCKFORD — A Rockford man pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to illegally possessing a firearm as a convicted felon. CLIFFORD HORTON, 28, of Rockford, Ill., admitted that on November 4, 2014, having previously been convicted of a felon, he possessed a Taurus .380 caliber pistol.
Horton is scheduled to be sentenced on March 18, 2016, at 2:30 p.m. Horton faces a maximum sentence of up to 10 years’ imprisonment, a term of supervised release of up to 5 years following imprisonment, and a fine of up to $250,000. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Gary Caruana, Winnebago County Sheriff; and, Patrick Hoey, Interim Chief of the Rockford Police Department.
The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.
Plea Agreement
Prairieville Woman Pleads Guilty to Embezzling More Than $77,000 from the U.S. Department of Veterans AffairsRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced the conviction of MICHELLE AKRIDGE, age 45, of Prairieville, Louisiana, who pled guilty today before U.S. District Judge James J. Brady to theft of government funds, in violation of Title 18, United States Code, Section 641.
According to the factual basis presented to the Court in connection with her plea, AKRIDGE stole over $77,000 in United States Department of Veterans’ Affairs (VA) Dependency and Indemnity Compensation (DIC) benefits that were intended for her mother. Following her mother’s death, AKRIDGE failed to report the death of her mother and withdrew the funds for her own personal use. At her re-arraignment hearing, AKRIDGE admitted that she had fraudulently obtained more than $77,000 in VA DIC benefits over a four-year period.
U.S. Attorney Green stated: “This kind of criminal conduct is an affront to all those who have served honorably in this country’s armed services. We appreciate the VA-OIG’s efforts to identify this type of fraudulent conduct and bring it to this Office’s attention so that we may take action.”
This investigation is being conducted by the Department of Veterans’ Affairs Office of Inspector General. The matter is being prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
Post Falls Man Pleads Guilty to Murder for Hire and Drug ChargesRead the Press Release
COEUR D'ALENE - Darin Kyle Taylor, 55, of Post Falls, Idaho, pleaded guilty today in two related cases to use of interstate facilities in the commission of murder for hire, and possession with intent to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. On August 18, 2015, Taylor was indicted for the federal drug charge. On December 4, 2015, Taylor waived his right to be indicted grand jury and agreed to be charged with murder for hire in federal court.
According to the plea agreements, on June 17 and June 30, 2015, the Idaho State Police worked with a confidential informant to purchase methamphetamine from Taylor at his Post Falls, residence. On July 1, 2015, Idaho State Police detectives served a search warrant at Taylor’s residence and seized methamphetamine, cocaine, heroin, marijuana, cash, and firearms.
On August 19, 2015, the day after Taylor was indicted by a federal grand jury on drug charges, Taylor met with a confidential informant working with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Taylor solicited this ATF confidential informant to murder another person promising to pay cash. Taylor was arrested on the federal drug charge shortly after his conversation and has been in federal custody since.
The murder for hire charge is punishable by up to ten years in prison, supervised release up to three years, and a maximum fine of $250,000. The methamphetamine charge is punishable by not less than five years and no more than forty years in prison, supervised release of not less than four years, and a maximum fine of $5,000,000.
Sentencing is set for March 1, 2016, before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The cases were investigated by the Idaho State Police, Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Pittsburgh Felon Charged with Illegally Possessing a FirearmRead the Press Release
PITTSBURGH- A Pittsburgh resident has been indicted by a federal grand jury in Pittsburgh on a charge of possession of a firearm by a convicted felon, United States Attorney David J. Hickton announced today.
The one-count indictment named Tiawan Harper, 31, as the sole defendant.
According to the indictment, Harper was found in possession of a firearm on or about Sept. 18, 2015, following a felony conviction in 2010. Federal law prohibits a person convicted of a crime punishable by in excess of one year imprisonment from possessing a firearm or ammunition.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Ryan K. Hart is prosecuting this case on behalf of the government.
This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crimes. The Bureau of Alcohol, Tobacco, Fire, and Explosives, the United States Marshals Service, and the Pittsburgh Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Perry Housing Project Ringleader Pleads Guilty to Drug, Money Laundering and Firearm ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Tyshawn Bradley, 29, of Buffalo, NY, pleaded guilty to conspiracy to distribute 280 grams or more of crack cocaine within 1000 feet of the Perry Housing Projects, conspiracy to commit money laundering and possession of an unregistered, sawed off rifle before U.S. District Judge Lawrence J. Vilardo. The charges carry a mandatory minimum sentence of 10 years in prison, a maximum of life, a minimum of 10 years supervised release and a $20,000,000 fine“Through his criminal conduct, the defendant turned a public housing project into a virtual prison for seniors, children, and those most in need of assistance,” said U.S. Attorney Hochul. “Thanks to today’s conviction, the defendant will soon experience the sort of confinement he inflicted upon these innocent residents. We are committed to prosecuting all gang and narcotics traffickers, wherever they are found.”
Assistant U.S. Attorneys Timothy C. Lynch and Michael J. Adler, who are handling the prosecution, stated that the defendant was the head of a narcotics trafficking ring that operated primarily in the Perry Housing Projects in Buffalo. Bradley maintained several apartments on the grounds of the projects, operated by the Buffalo Municipal Housing Authority, where members of his organization sold crack cocaine on a daily basis.The defendant was arrested along with nine others on April 3, 2013 following the execution of search warrants several locations in the City of Buffalo and Cheektowaga, including at 124 Fulton Street and 305 Perry Street, which are located at the Perry Housing Projects. During the searches at the Perry Housing Projects, officers recovered over 300 grams of crack cocaine and 700 grams of powered cocaine as well as a sawed-off, 9mm semiautomatic rifle that belong to Bradley.
In addition, between October 2011 and April 3, 2013, the defendant conspired with others to purchase multiple houses in the City of Buffalo using the proceeds of his crack cocaine distribution organization. As part of the money laundering conspiracy, the properties were purchased by co-defendant Nannette Brown to conceal Bradley as the true owner of the properties.
To date, nine of the 10 charged defendants have been convicted.
Today’s plea is the culmination of an investigation on the part of the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen. The task force includes representatives of the Amherst Police Department; the Buffalo Police Department; U.S. Border Patrol, the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Cheektowaga Police Department; the Erie County Sheriff’s Department; the Hamburg Police Department; the Lancaster Police Department; the Niagara Frontier Transportation Authority Police; the New York State Department of Correctional Services; the New York State Police; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations. Additional assistance was provided by the Drug Enforcement Administration; U.S. Customs and Border Protection, the United States Marshal Service, the Lackawanna Police Department, and the Niagara County Sheriff’s Department. Assistant U.S. Attorney Michael J. AdlerSentencing is scheduled for March 29, 2016 at 10:00 a.m. before Judge Vilardo.
Payroll Service Company Owner Admits to Stealing Money Set Aside by Clients to Pay Federal and State TaxesRead the Press Release
Baltimore, Maryland – Beverly Carden, age 53, formerly of Bel Air, Maryland, pleaded guilty today to mail fraud and filing a false tax return, arising from a scheme to steal money from her clients and the IRS.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
“Beverly Carden falsely told clients that their money was being used to pay their taxes, when in fact she was stealing it,” said U.S. Attorney Rod J. Rosenstein. “Customers who hire payroll services companies expect that they will not have to worry, but this case is a reminder that people always need to be vigilant when they trust someone with their money.”
According to her plea agreement, until its closure in March 2013, Beverly Carden owned and operated AccuPay, Inc. which provided payroll and payroll tax services to small and medium businesses. Her husband, Kevin Carden, ran the company’s “tax department,” which was responsible for handling the employment tax portion of the business. AccuPay received funds from its clients that it held in trust to pay over to the IRS and the Comptroller of Maryland for AccuPay’s clients’ employment taxes.
During the course of the fraud scheme, AccuPay withdrew from the clients’ funds the full amount of payroll taxes owed, but then paid the taxing authorities only a portion of such funds. While AccuPay falsely represented to its clients that it paid all of the taxes owed, in fact, Beverly Carden diverted a large portion of those funds to a personal bank account for her personal use.
In 2012, a client of AccuPay confronted representatives of AccuPay with the fact that the company had failed to pay over $300,000 in taxes owed from 2008 to 2012. In response, AccuPay paid the client’s tax deficiencies.
AccuPay sent a letter to their clients stating that they had hired a CFO to audit all tax deposits and filings for all tax clients back to 2009. In fact, that individual was not AccuPay’s CFO, but rather was an independent tax preparer who Beverly Carden had hired primarily to prepare personal taxes and the corporate taxes of AccuPay, rather than those of the clients. Additionally, in order to contact the IRS about her clients’ employment tax issues without her clients’ knowledge, Beverly Carden copied client signatures on IRS power of attorney forms onto forms for more recent periods without the clients’ permission.
Carden admits that the amount of loss reasonably foreseeable to her arising from this scheme is between $380,000 and $600,000.
Carden also admits that she filed a false individual tax return for 2011 in which she did not report the amount of payroll taxes that she had diverted from AccuPay’s clients to her personal account. She also failed to file a tax return for 2012. Beverly Carden admits that the amount of loss reasonably foreseeable to her arising from this tax fraud scheme is between $40,000 and $100,000.
Beverly Carden faces a maximum penalty of 20 years in prison for mail fraud, and a maximum of three years in prison for filing a false tax return. U.S. District Judge Marvin J. Garbis scheduled sentencing for March 23, 2016, at 10:00 a.m.
A federal grand jury indicted co-defendant Kevin Carden, age 55, of Bel Air on charges arising the schemes. Kevin Carden has pleaded not guilty. An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the IRS - Criminal Investigation and FBI for their work in the investigation. Mr. Rosenstein praised the Bel Air Police Department for their assistance in the investigation, and thanked Assistant U.S. Attorneys Evan T. Shea and Jefferson M. Gray, who are prosecuting the case.
Palmer Alaska Man Sentenced for Ponderay Credit Union RobberyRead the Press Release
COEUR D'ALENE - Karl Erik Erickson, 33, of Palmer, Alaska, was sentenced today in United States District Court to 48 months in prison followed by three years supervised release for his robbery of a Ponderay credit union, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Stanley Bastian, a visiting judge from the Eastern District of Washington assigned to hear some Idaho cases, also ordered Erickson to pay $3,410 in restitution. Erickson pleaded guilty to the charge on September 15, 2015.
According to court documents, Erickson admitted that in July 2015, he went into the Horizon Credit Union in Ponderay, Idaho, and told the teller it was a robbery. He demanded money and took $3,410, and then fled the credit union. Erickson was arrested three days later. Erickson had one prior robbery.
The case was investigated by Bonner County Sheriff’s Department, Idaho State Police and the Federal Bureau of Investigation.
Owner of Medical Billing Company Indicted on Health Care Fraud and Aggravated Identity Theft Charges for Stealing Millions from MedicaidRead the Press Release
CHARLOTTE, N.C. – A Charlotte grand jury has indicted Jason Adam Townsend, 39, of Raeford, N.C., on health care fraud and aggravated identity theft charges, in connection with a scheme that defrauded Medicaid of millions of dollars, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The 10-count indictment was unsealed today, following Townsend’s appearance in court.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to allegations contained in the indictment, in or about 2011, Townsend and another unindicted individual created Townhall Enterprises, LLC (Townhall), located in Raeford. Townhall provided billing services and credentialing services to mental health companies and other health providers. The indictment alleges that as third-party billing provider, Townhall received information from its clients detailing claim information to be submitted to insurance companies and health care benefit programs, including Medicaid.
The indictment alleges that from in or about 2011 to in or about 2013, and at the direction of Cynthia Harlan, Townhall entered into contractor agreements with client agencies to provide billing services, including submitting claims to Medicaid, and in return receiving 5-7% of the reimbursed claims. According to court records, Harlan owned and operated Heartland Consulting and Marketing, LLC (“Heartland”) in Charlotte, and held herself out as a consultant specializing in the operation of mental health companies and Medicaid reimbursement. Harlan was indicted on health care fraud conspiracy and related charges in September 2015. Townhall’s other client agencies included New Choices Youth and Family Services, operated by Sakeenah Davis and Kino Williams, Life Impact Solutions, LLC, owned and operated by Zaria Humphries, and Aliya Boss, all of whom have pleaded guilty federal charges in connection with the scheme.
According to allegations contained in the indictment, Townsend and Townhall received billing instructions for clients, such as Boss, Life Impact Solutions, LLC and others, directly from Harlan or others acting on Harlan’s behalf. The indictment alleges that these instructions generally were contained in billing spreadsheets, which Harlan provided, containing relevant claim information, such as the Medicaid beneficiary name, date of birth, Medicaid ID number, the alleged dates of services, the alleged types of services and company that allegedly provided the services. The indictment alleges that Townsend generally did not follow the instructions provided by Harlan and the client agencies, and instead he frequently billed two or three times the amount of services he was instructed to submit to Medicaid. For example, the indictment alleges that instead of submitting claims to Medicaid requesting reimbursement for approximately 268 dates of therapy allegedly provided to 14 Medicaid beneficiaries, Townsend made up different claims, and increased the number of dates of service to over 400.
The indictment alleges that Townsend submitted millions of dollars in false claims, for which Medicaid reimbursed the providers. Townsend and Townhall were compensated by the client agencies for submitting the fraudulent claims. The indictment also alleges that during the same time period, Townhall’s primary source of income was the fees it charged to clients obtained through Harlan.
Townsend is charged with five counts of health care fraud conspiracy and five counts of aggravated identity theft and had his initial appeared today before U.S. Magistrate Judge David S. Cayer. He was released on conditions from the court. His detention hearing will be scheduled by the court in the coming days. The health care fraud conspiracy charge carries a maximum prison term of 10 years and a $250,000 fine per count. The aggravated identity theft charge carries a mandatory prison term of two years, consecutive to any other term of imprisonment.
An indictment is merely an allegation and Townsend is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The FBI conducted the investigation. In making today’s announcement, U.S. Attorney Rose also thanked the North Carolina Medicaid Investigations Division for their assistance in this case.
The prosecution of the cases is handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Charlotte Office.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].
Operator of Third Party Payroll Company Sentenced to More Than 11 Years in Prison for Embezzling $17 Million from Client CompaniesRead the Press Release
CHARLOTTE, N.C. – James William Staz was sentenced today to 135 months in prison for embezzling more than $17 million from clients of the third-party payroll company he operated, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also sentenced Staz to two years of supervised release and ordered him to pay over $17 million as restitution. Staz pleaded guilty in March 2015 to wire fraud, transactional money laundering and tax evasion.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
According to court documents and today’s sentencing hearing, Staz operated a third-party payroll company, “Employee Services.Net, Inc.” (ESN), that provided various services to client companies, including processing payroll, collecting and paying employment taxes, and preparing and filing employment tax forms. Court records show that Staz was ESN’s vice president and later the company’s president, and at its height, ESN had approximately 500 client companies nationwide. According to court documents, ESN had access to the clients companies’ bank accounts and could draft directly the funds needed to cover expenses associated with the services it provided.
Court records indicate that from 2008 to March 2014, Staz defrauded at least 113 ESN clients of approximately $17 million dollars intended for payroll and employment tax payments and used it to support his personal lifestyle. Staz stole at least $3.7 million in client funds and used the money to pay for alcohol, strip club entertainment to include leaving a $5,000 tip, jewelry, a Mercedes Benz and a luxury home. To conceal his embezzlement, court records show that Staz made false entries into ESN’s accounting system to make it appear as though the funds were used for legitimate client expenses.
At today’s sentencing hearing, Judge Whitney said that Staz “victimized a lot of people, across the socio-economic spectrum and across the country,” including “non-profits that operate on a very tight budget.” Judge Whitney also said that the defendant “probably victimized more individuals and legal entities than any other fraud scheme this court has ever seen,” adding, “that kind of reckless disregard for spending people’s money is horrifying.”
James Staz has been in custody since his arrest in October 2014. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
At today’s sentencing hearing Judge Whitney granted the government’s motion to dismiss the charges against James Staz’s father and former codefendant, William James Staz, who is now deceased.
The investigation for the case was handled by the FBI and IRS-CI. Assistant U.S. Attorney Kelli H. Ferry of the U.S. Attorney’s Office, in Charlotte, prosecuted the case.
Olathe Man Sentenced for Armed Bank RobberyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Olathe, Kan., man was sentenced in federal court today for the armed robbery of the Bank of Weston.
Marcus Aurellius Moon, 30, of Olathe, was sentenced by U.S. District Judge DeanWhipple to 11 years and three months in federal prison without parole.
On Aug. 11, 2015, Moon pleaded guilty to armed bank robbery and to brandishing a firearm during a crime of violence. Moon admitted that he stole $26,427 from the Bank of Weston,18255 45 Highway, on Oct. 22, 2014.
Moon entered the bank wearing a silver ski mask and carrying a semi-automatic handgun. Moon walked up to a teller and demanded money. The teller complied and another teller behind her, who had been loading currency into an ATM machine, also complied.
The Platte County Sheriff’s Department broadcast to neighboring jurisdictions about the robbery, including a vehicle description and a description of the suspect. Officers with the Atchison, Kan., Police Department set up surveillance around the Amelia Earhart Bridge. They saw Moon driving a vehicle that matched the description given in the broadcast and tried to stop it. However, Moon placed the vehicle in reverse, striking police vehicles and escaping. During Moon’s attempts to flee, an Atchison police officer fired his gun. Moon was not struck and was able to escape. Atchison police pursued the suspect for several blocks until his vehicle got stuck in a residential area and Moon was taken into custody.
Officers found a loaded SCCY 9mm handgun inside the vehicle, along with a silver ski mask and the money taken from the bank.
This case was prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Atchison, Kan., Police Department, the Weston, Mo., Police Department, the Platte County, Mo., Sheriff’s Department, the Kansas Bureau of Investigation and the FBI.
Oklahoma City Woman Sentenced to 77 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that JESSICA SUZANNE FELIX, age 33, of Oklahoma City, Oklahoma, was sentenced to 77 months imprisonment, followed by 5 years of supervised release for Drug Conspiracy, in violation of Title 21, United States Code, Sections 846.
The charge is a result of an investigation by the Drug Enforcement Administration and coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the United States Attorney’s Office. The defendant was indicted in April, 2015 and pled guilty in June, 2015.
The Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendant did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which she will serve her nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Ohio man sentenced to 140 months for heroin, cocaine, painkiller traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Donald White, 41, of Cleveland, Ohio, was sentenced today to 140 months in prison for heroin, cocaine, and oxycodone trafficking, United States Attorney William J. Ihlenfeld, II, announced.
White conspired with other individuals to sell heroin, cocaine, and prescription painkillers throughout 2014 in Ohio County and Marshall County, West Virginia. White pled guilty in September 2015 to one count of “Conspiracy.”
Kari Jako, 26, and Christina Crupe, 33, both of Wheeling, also participated in the drug trafficking conspiracy. Jako pled guilty in September 2015 to one count of Conspiracy. She was sentenced to six months in prison. Crupe pled guilty in September 2015 to a criminal Information charging her with one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Oxycodone.” She was sentenced to probation for a term of three years.
Assistant U.S. Attorney Randy Bernard prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Oakland-Based Government Finance Director Pleads Guilty to Embezzling Public FundsRead the Press Release
SAN FRANCISCO – Clarke J. Howatt, a former public finance director of the Association of Bay Area Governments (ABAG), pleaded guilty today to embezzling almost $3.9 million from that government authority, announced Acting United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge David J. Johnson. The guilty plea stems from the February 13, 2015, information filed by the federal government charging Howatt with wire fraud for fraudulently inducing ABAG and its related Finance Authority for Non-Profit Corporation (FAN) to make payments to accounts he controlled.
In the plea agreement, Howatt, 56, formerly of Oakland, admits he engaged in a scheme to fraudulently obtain funds from ABAG/FAN. The plea agreement describes the transactions Howatt conducted to purloin the money.
ABAG, headquartered in Oakland, is a Joint Powers Agency formed in the 1960s. As ABAG’s Financial Services Director, Howatt oversaw all bonds issued on its behalf by FAN. In some case, Howatt also had the power to request that FAN make certain payments to, among others, entities completing work for certain public capital improvement projects. In the plea agreement, Howatt admits he used his power to convince FAN to make payments to accounts he controlled by disguising the transactions as legitimate expenditures.
One of the transactions described in the plea agreement involves Howatt’s creation of a Nevada corporation and the establishment of a related bank account to receive FAN funds. In June of 2006, FAN approved an indenture and issued a series of bonds to pursue a public capital improvement project in the South of Market neighborhood of San Francisco. The project was intended to offset the impact of a high-rise building to be built on Rincon Hill. Howatt admitted that he opened a Citibank account in the name of the Nevada corporation. Then, in August of 2014, Howatt requested that the FAN reimburse the corporation for more than a million dollars in expenditures incurred as part of the capital improvement project. The request for reimbursement was purported to be for “reimbursable costs, fees, and expenses submitted to the ABAG Finance Authority [FAN]” by the developer of the Rincon Hill project; however, the request was truly from Howatt. FAN eventually made a wire transfer of $1,296,340.66 to the Citibank account controlled by Howatt.
In another scheme, Howatt convinced FAN to issue over a million dollars to “Windemere BLC Land Company LLC,” another company associated with Howatt. This company was purported to be a developer of a housing development located in San Ramon, Calif. FAN issued several bonds and made numerous legitimate expenditures in connection with the public capital improvements associated with Windemere Ranch and its special districts. Nevertheless, several years after the improvements funded by the bonds had been completed, there remained surplus funds from bonds issued by the FAN. In 2011, Howatt convinced the FAN to issue a wire transfer moving over a million dollars of the surplus funds to an account created for the company he controlled.
In total, Howatt admitted he illegally obtained $3,876,135.21 as a result of his scheme to defraud. He pleaded guilty to the single count of wire fraud in the information, a violation of 18 U.S.C. § 1343.
Howatt currently is released from custody pending sentencing. He is scheduled to appear for sentencing on March 23, 2016, before the Honorable Charles R. Breyer, District Judge. The maximum penalty for a violation of 18 U.S.C. § 1343 is 20 years’ imprisonment; a fine of $250,000 or twice the gross gain or loss, whichever is greater; and 3 years of supervised release. However, any sentence following conviction for this offense would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Kyle Waldinger and David Countryman are prosecuting the case with the assistance of Jessica Meegan and Carolyn Jusay. The prosecution is the result of an investigation by the FBI.
North Carolina Man Charged with Tax Fraud and Other CrimesRead the Press Release
A federal grand jury sitting in Greensboro, North Carolina, returned a superseding indictment against a Thomasville, North Carolina, man charging him with one count of evading the payment of income taxes, three counts of filing false tax returns, one count of making false statements on aircraft maintenance records, one count of aggravated identity theft and four counts of serving as an airman without an airman’s certificate, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand for the Middle District of North Carolina announced today.
According to the superseding indictment, from 2011 through 2014, Paul Douglas Tharp aka Doug Tharp, attempted to evade payment of income taxes he owed for the tax years 2004 through 2007 by filing false documents, including false tax returns, with the Internal Revenue Service (IRS). The superseding indictment also alleges that Tharp forged the signature of a licensed mechanic on aircraft maintenance records and served as an airman without the required certification.
If convicted, Tharp faces a statutory maximum sentence of five years in prison for the tax evasion charge, three years in prison for each count of filing a false tax return, three years in prison for each count of serving as an airman without an airman’s certificate, five years in prison for making false statements and a two year mandatory prison sentence for aggravated identity theft. He also faces substantial monetary penalties, supervised release and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who investigated the case and Assistant U.S. Attorney Anand Ramaswamy and Trial Attorney Nathan Brooks of the Tax Division, who are prosecuting this case.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
New York Man Charged with Child Sex TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Criminal Information was filed today charging a Brooklyn, New York man with sex trafficking of a minor.
According to United States Attorney Peter Smith, the Information alleges that Clinton Hayden a/k/a “Showtime,” age 28, recruited, enticed, and transported two minors from Wilkes-Barre to New York to engage in commercial sex acts between May and December of this year. Hayden was taken into custody on December 3, 2015 in Jersey City, N.J.
The government also filed a plea agreement in the case which is subject to the approval of the court.
The charge stems from an investigation by agents of Homeland Security Investigations and the Pennsylvania State Police.
This case was brought as part of Project Safe Childhood, a nationwide initiative
launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
If convicted, Hayden faces a mandatory minimum sentence of 10 years in prison and a potential maximum sentence of life in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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New York City Police Officer Pleads Guilty to Extortion and Firearms ChargesRead the Press Release
Earlier today, Besnik Llakatura pled guilty at the federal courthouse in Brooklyn, New York, to two counts of Hobbs Act extortion conspiracy and one count of brandishing a firearm in relation to an extortion conspiracy. The proceeding took place before United States District Judge Eric N. Vitaliano. At the time of the offenses, Llakatura was an active-duty police officer with the New York City Police Department (NYPD) assigned to the 120th Precinct in Staten Island, New York. He was suspended without pay upon his arrest in December 2013. When sentenced, Llakatura faces up to life in prison and a mandatory minimum sentence of seven years. As part of his plea agreement with the government, Llakatura agreed to a $24,000 money judgment payable to the United States to be paid in part through forfeiture of $11,123 in cash seized during a search of his residence following his arrest.
The plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and William J. Bratton, Commissioner, NYPD.
According to court filings and facts presented during the plea proceeding, between May and November 2013, Llakatura and co-defendants Redinel Dervishaj and Denis Nikolla conspired and attempted to extort a Queens restaurant owner and a Queens social club proprietor, demanding regular payments from each of these victims in exchange for so-called “protection.” The extortion of the restaurant owner began shortly after the victim opened a restaurant in Astoria when he was visited by Dervishaj and told that he had opened a business in “our neighborhood” and, as a result, “you have to pay us” $4,000 per month. The restaurant owner sought help from his friend Llakatura. Unbeknownst to him, Llakatura, an NYPD officer in Staten Island since 2006, was conspiring with Dervishaj in the extortion. Llakatura actively discouraged the restaurant owner from going to the police and sought to leverage his position of trust as a friend and a police officer to persuade the victim that he had no choice but to make the demanded payments, warning the victim that Dervishaj and his associates would physically harm him if he did not pay. When the victim resisted, he was threatened with physical violence and chased at gunpoint down the street in Queens by Nikolla. Over the course of five months, each of the three defendants took turns collecting monthly payments from the Astoria restaurant owner, ultimately collecting $24,000 in so-called protection money. Throughout the conspiracy, Llakatura presented an outward façade of friendship to the restaurant owner, all the while secretly working with Dervishaj and Nikolla to convey threats of violence and intimidation to ensure the conspiracy’s success.
During the same time period, Llakatura and his co-defendants also conspired and attempted to extort a proprietor of two social clubs in Astoria, where gambling occurred. Nikolla, accompanied by Dervishaj, made the initial extortion demand, seeking payments of $1,000 per week from the proprietor for so-called “protection.” The proprietor refused to make the demanded payments and ceased going to his social clubs out of fear for his safety. Court-authorized wiretaps of the defendants’ telephones revealed evidence of Llakatura’s participation in this extortion conspiracy with Dervishaj and Nikolla, and their attempts to locate the victim. In one instance, Llakatura and his co-defendants threatened, punched, and pulled a gun on a friend of the victim in an effort to have the friend locate the victim for them. The victim ultimately fled to a foreign country for a period of time to avoid the defendants’ extortionate threats.
“Through his participation in these extortion schemes, Besnik Llakatura turned his back on his badge and his community, choosing instead to break the laws he was sworn to uphold, rather than enforce them, and to thereafter extort members of the community he was sworn to protect,” stated United States Attorney Robert L. Capers. “Today’s guilty plea should serve as a reminder that no one is above the law. Those who use threats, intimidation, and violence to instill fear in our communities will be vigorously prosecuted.” Mr. Capers expressed his thanks to members of the Joint Organized Crime Task Force, which includes agents of the FBI and detectives of the NYPD, which led the investigation, as well as the NYPD’s Internal Affairs Division and the FBI’s Public Corruption squad for their cooperation and assistance in the investigation.
“Besnik Llakatura abused his powers and conspired with co-conspirators to extort innocent business owners in Queens. Not only did he not honor the oath he took to serve and protect, but he violated the public trust, especially of the victim who came to him as a police officer to report a crime. Today's guilty plea shows that public trust is not to be abused,” stated Assistant Director-in-Charge, Diego Rodriguez.
“I have no tolerance for corruption at any level in this department. Any member of the NYPD who violates the law, which we are explicitly charged with upholding, will be held fully responsible for their actions,” said Police Commissioner William J. Bratton.
The charges in the indictment against co-defendants Redinel Dervishaj and Denis Nikolla are merely allegations, and these defendants are presumed innocent unless and until proven guilty. Dervishaj and Nikolla are scheduled to commence trial in March 2016.
The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nadia Shihata, M. Kristin Mace, and Patrick Hein are in charge of the prosecution.
The Defendant:
Besnik Llakatura, a/k/a “Besi” and “Nick”
Age: 36
Staten Island, New YorkE.D.N.Y. Docket No. 13-CR-668 (ENV)
New Jersey Couple Sentenced on Federal Child Abuse ChargesRead the Press Release
NEWARK, N.J. – A former U.S. Army major and his wife were sentenced today for abusing their adopted children, who all were less than 4 years old and developmentally delayed, through neglectful and cruel acts, including by breaking their bones, denying them medical attention, withholding water and force-feeding them hot sauce, U.S. Attorney Paul J. Fishman announced.
Carolyn Jackson, 38, was sentenced to 24 months in prison and her husband, John E. Jackson, 40, formerly a major in the Army at the Picatinny Arsenal Installation in Morris County, New Jersey, was sentenced to 400 hours of community service. The government had been seeking sentences of more than 19 years and more than 15 years, respectively.
“In every case, our office seeks a sentence that is fair and just in punishing the defendants and offering justice to the victims of their crimes,” U.S. Attorney Fishman said. “In this case, those victims were the children entrusted to the Jacksons’ care. Using the federal sentencing guidelines, our analysis of the crimes of which the Jacksons were convicted by a jury called for severe penalties. Obviously, we are disappointed that the court did not agree.”
The Jacksons were each found guilty in July 2015 following four months of trial before U.S. District Judge Katharine S. Hayden in Newark federal court of one count of conspiracy to endanger the welfare of a child; Carolyn Jackson was found guilty of 11 substantive counts of endangering the welfare of a child and John Jackson was found guilty of nine substantive counts of endangering the welfare of a child. Judge Hayden imposed the sentences today in Newark federal court.
The case falls under federal jurisdiction because the crimes were committed on a military base. John Jackson was discharged from the Army in May 2015.
According to documents filed in this case and the evidence at trial:
From August 2005 until April 23, 2010, Carolyn and John Jackson conspired to engage in a constant course of neglect and cruelty towards three children they fostered and then adopted. The Jacksons told their biological children not to report the physical assaults to others, saying that the punishments and disciplinary techniques were justified, as they were “training” the adopted children how to behave.
After John Jackson was informed by a family friend that the oldest biological child had revealed the abuse in the Jackson household, John Jackson reported the breach to Carolyn Jackson, who retaliated against that biological child by beating the child 30 times with a belt.
As part of the conspiracy, the Jacksons physically assaulted their adopted children with various objects, causing two children to sustain fractured bones (including a fractured spine, fractured skull and fractured upper arms); failed to seek prompt medical attention for their injuries; withheld sufficient nourishment and food from their adopted children; withheld adequate water from two of their children and, at times, prohibited them from drinking water altogether; forced two of the children to consume foods intended to cause them pain and suffering, such as red pepper flakes and hot sauce, and caused one child to ingest excessive sodium or sodium-laden substances while being deprived of water, leading to a life-threatening condition on two separate occasions in two states. The Jacksons even punished one adopted child, who had to resort to sneaking food and drinking from the toilet, by hitting the child, making the child ingest hot sauce, and forcing the child to eat a raw onion like an apple.
None of the children, adoptive and biological, remain in the custody of the defendants.
Judge Hayden sentenced both of the Jacksons to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s convictions. He also thanked the U.S. Army Criminal Investigation Command, under the command of Major General Mark S. Inch, and the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp.
The government is represented by Assistant U.S. Attorneys Melissa L. Jampol and Joseph B. Shumofsky of the U.S. Attorney’s Office Criminal Division in Newark.
Nevada Man Pleads Guilty in International Counterfeiting SchemeRead the Press Release
PITTSBURGH - A resident of Las Vegas, Nevada pleaded guilty in federal court to charges of transferring counterfeit currency, United States Attorney David J. Hickton announced today.
Zackary L. Ruiz, a/k/a Mr. Mouse, 19, of Las Vegas, Nevada, pleaded guilty to two counts before United States District Judge Mark Hornak.
In connection with the guilty plea, Ruiz also pled guilty to conspiracy to make, deal, possess, pass, buy, sell, and transfer counterfeit currency both overseas and in the United States.
Judge Hornak scheduled sentencing for April 18, 2016, at 9:30 a.m. The law provides for a total sentence of 45 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued bond.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation that led to the prosecution of Ruiz.
Montgomery Resident Indicted for Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Montgomery, Ala. – A Montgomery, Alabama resident was arrested today after being indicted on Dec. 9 by a federal grand jury sitting in Montgomery, Alabama, on 15 counts of wire fraud, 15 counts of aggravated identity theft and two counts of passing U.S. Treasury checks with a false endorsement, announced U.S. Attorney George L. Beck, Jr. of the Middle District of Alabama, and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the allegations in the indictment, James Vernon Battle, a resident of Montgomery County, used stolen personal identification information to prepare and file false federal income tax returns for tax years 2013 and 2014 for the purpose of obtaining fraudulent tax refunds. Battle directed the Internal Revenue Service (IRS) to issue the requested refunds by depositing the funds onto prepaid debit cards and by issuing U.S. Treasury checks.
If convicted, Battle faces a statutory maximum sentence of 20 years in prison for each count of wire fraud, a mandatory minimum sentence of two years in prison for aggravated identity theft and a statutory maximum sentence of 10 years in prison for each count of passing a U.S. Treasury check with a false endorsement. He also faces substantial monetary penalties and restitution.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
U.S. Attorney Beck and Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated the case, and Trial Attorneys Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U. S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
Monmouth County, New Jersey, Stock Promoter Admits Role in $33 Million Microcap Stock Manipulation SchemeRead the Press Release
NEWARK, N.J. – A Holmdel, New Jersey, man today admitted his role in a stock market manipulation scheme that artificially inflated the stock price of four publicly traded companies through manipulative trading and other fraudulent means, U.S. Attorney Paul J. Fishman announced.
Samuel DelPresto, 48, pleaded guilty today before U.S. District Judge Jose Linares in Newark federal court to an information charging him with conspiracy to commit securities fraud.
According to the documents filed in this case and statements made in court:
From 2008 through 2010, DelPresto, a penny stock promoter who owned and operated MLF Group LLC, 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”).
As part of the scheme, DelPresto and others first obtained control over large blocks of the free trading shares of the Target Companies. Next, DelPresto 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. After pumping the stocks, DelPresto and the other conspirators “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.
In order to fraudulently inflate the price and volume of the Target Companies’ stocks, DelPresto’s conspirators paid cash kickbacks to an investment advisor in Las Vegas so that he would purchase the Target Companies’ stock on behalf of his clients. The purpose of these purchases was to, among other things, create the false appearance of market interest and demand in the stock; 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, including email blasts and newsletters, that occurred in the later phases of the scheme. Additionally, DelPresto and other conspirators engaged in coordinated trading of the Target Companies’ stock using various brokerage accounts that they owned or controlled, including the accounts of friends, family and other third parties.
The scheme collectively generated approximately $33 million in illicit trading proceeds, of which DelPresto received approximately $13 million.
The conspiracy count to which DelPresto pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for April 5, 2016.
The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against DelPresto today.
U.S. Attorney Fishman credited special agent s of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to DelPresto’s guilty plea. He also thanked the SEC’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.
Defense Counsel: Jack Arsenault Esq., Chatham, New Jersey
Middleton Mortgage Broker Sentenced to Federal Prison for Bank FraudRead the Press Release
BOSTON – A Middleton, Mass. mortgage broker was sentenced yesterday in U.S. District Court in Boston in connection with his role in 20 fraudulent loan transactions in the North Shore area.
Michael P. O’Donnell, 54, was sentenced by U.S. District Judge Douglas P. Woodlock to three years in prison, two years of supervised release and ordered to pay a fine of $150,000. In July 2015, O’Donnell was convicted following a three-day bench trial of attempted bank fraud.
From 2004 to 2007, O’Donnell, through his company AMEX Home Mortgage, engaged in a scheme to submit false loan applications to lenders to obtain mortgage loans on behalf of borrowers seeking loans to purchase or refinance real estate. O’Donnell submitted loan applications and other documents on behalf of borrowers that falsified income, employment and asset information, and supplied closing funds which the borrowers were supposed to provide as part of their loan obligation, for which he was later reimbursed. O’Donnell also had an arrangement with a tax accountant to provide false letters, tax documents and verbal verifications of employment to lenders for loans O’Donnell sought on behalf of his clients. O’Donnell also obstructed the government’s investigation by destroying his computer hard-drive.
During the three year scheme, O’Donnell participated in 20 fraudulent loan transactions in which more than $3.7 million in financing was obtained, causing losses of nearly $1.5 million, and earning him nearly $150,000. The properties involved, most of which ended in foreclosure, were located in several North Shore towns, including Haverhill, Salem, Swampscott, Salisbury, and Bradford.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Mexican National Arrested in New Mexico on Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Francisco Javier Paez-Sianez, 33, a Mexican national, made his initial appearance yesterday in federal court in Las Cruces, N.M., on a criminal complaint charging him with methamphetamine trafficking offenses. Paez-Sianez remains in federal custody pending a preliminary hearing and a detention hearing which have yet to be scheduled.
Paez-Sianez was arrested on Dec. 12, 2015, after U.S. Border Patrol agents at the Border Patrol Checkpoint on I-10 in Las Cruces, allegedly found approximately 7.3 kilograms of methamphetamine concealed in the gas tank of Paez-Sianez’s vehicle during a routine inspection. According to the criminal complaint, Paez-Sianez allegedly was paid $1,000.00 to transport the methamphetamine from Mexico to Santa Fe, N.M.
If convicted of the charges in the criminal complaint, Paez-Sianez faces a statutory penalty of a mandatory minimum of ten years and a maximum of life in federal prison and will be deported following his incarceration. Charges in criminal complaints are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces Station of the U.S. Border Patrol and the Las Cruces office of the DEA and is being prosecuted by Assistant U.S. Attorney Alexander Shapiro of the U.S. Attorney’s Las Cruces Branch Office.
Media Notice - Press ConferenceRead the Press Release
Contact: Donald E. Clark
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: Thomas E. Delahanty II, United States Attorney for the District of Maine, Janet T. Mills, Maine Attorney General, and John E. Morris, Maine Commissioner for the Department of Public Safety, will host a press conference to discuss the Maine Opiate Collaborative (“MOC”) on Thursday, December 17, 2015 at 12:00 noon at the Maine Medical Association, 30 Association Drive, Manchester, Maine.
U.S. Attorney Delahanty, Attorney General Mills and Commissioner Morris will provide information on the organization and activity of the MOC and its efforts to combat opiate abuse and addiction in Maine. Team leaders for the Law Enforcement, Treatment and Prevention/Harm Reduction Task Forces will also be available to answer questions and provide information. Dr. Wendy Wolf and Steve Rowe, Esq. will also be present representing the Maine Health Access Foundation and the Maine Community Foundation who will be announcing financial support for Maine community forums.
Members of the media should plan to arrive at least 15 minutes before the scheduled conference time.
Man Who Fatally Shot MPD Officer Indicted on Federal ChargesRead the Press Release
Memphis, TN – A man who fatally shot Memphis Police Department (MPD) Officer Sean Bolton has been indicted federally on charges of armed carjacking and felony possession of ammunition. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the indictment today.
According to multiple reports, on August 1, 2015, Tremaine Wilbourn, 30, of Memphis, was in the passenger seat of a car parked on a street in East Memphis when Bolton approached the vehicle. Bolton attempted to detain Wilbourn before the defendant pulled a 9mm pistol and shot Bolton several times. The defendant is charged with unlawfully possessing 10 rounds of 9mm ammunition in connection with this shooting.
According to the indictment, on the same day of the shooting, Wilbourn used a firearm to carjack a man of a 2002 Honda Accord.
On Tuesday, December 15, 2015, Wilbourn was indicted federally on one count of carjacking; one count of possessing a firearm during and in relation to the carjacking; and one count of felony possession of ammunition.
Wilbourn faces up to 15 years imprisonment if convicted of the first count. The defendant faces up to life if convicted of the second count. And Wilbourn faces up to 10 years if convicted of the third count.
The defendant faces an individual fine of up to $250,000 on each count.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is investigating this case in conjunction with the MPD.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Man Sentenced to 20 Years in Federal Prison for Sending Images of Child Pornography from His Computer While Visiting a Friend in Arlington, TexasRead the Press Release
FORT WORTH, Texas — Eric Miltonhall has been sentenced by U.S. District Judge John McBryde to serve 240 months in federal prison following his guilty plea in August 2015 to one count of transportation of child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
According to the factual resume filed in the case, from approximately March 22, 2014, through April 16, 2014, Miltonhall, 40, of Missouri and most recently, Alabama, stayed with a friend who lived in Arlington, Texas. On approximately April 15, 2014, Miltonhall used his computer, which was connected to the internet there, to send communications via a software application called Kik. During that communication, Milton also transmitted images of child pornography.
According to other documents filed in the case, after obtaining a search warrant and conducting a forensic examination, officers and agents learned that prior to his arrival in Texas, Miltonhall had accessed and deleted thousands of images and videos of child pornography, many involving toddlers and infants. Miltonhall also used encrypted devices containing child pornography that he connected to his computer.
Miltonhall had worked in Missouri as a police officer.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Federal Bureau of Investigation and the Arlington Police Department investigated. Assistant U.S. Attorney A. Saleem prosecuted.
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Lockport Man Arrested on Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Dion Cheatham, 41, of Lockport, NY, was arrested and charged by criminal complaint with possession with intent to distribute heroin and fentanyl. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.Assistant U.S. Attorney Meghan A. Tokash, who is handling the case, stated that according to the complaint, the defendant is accused of selling heroin and fentanyl at his place of employment in the Bewley Building in Lockport and in a residential neighborhood in Lockport. As part of the federal investigation, Cheatham was identified by a victim who overdosed on fentanyl which was purchased from Cheatham.
The defendant is being detained.
The complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Lockport Police Department, under the direction of Chief Lawrence Eggert and the Niagara County Drug Task Force, under the direction of Sheriff James Voutour.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Leaders of $28.5 Million Drug Conspiracy Sentenced to 13+ Years in Federal PrisonRead the Press Release
KANSAS CITY, KAN. – Two Missouri men who were leaders of a $28.5 million drug trafficking organization in the Kansas City metro area were sentenced Tuesday to 162 months in federal prison, U.S. Attorney Barry Grissom.
Eduardo Perez-Alcala, 32, Independence, Mo., and Hector Aguilera, 36, Sugar Creek, Mo., pleaded guilty to one count of conspiracy to commit drug trafficking and one count of conspiracy to commit money laundering.
In their pleas, they admitted they were part of a drug trafficking organization that in October 2010 became the target of an investigation by the Drug Enforcement Administration. Aguilera was the recipient of shipments of cocaine from Perez-Alcala as well as two other Mexican sources of supply
During the investigation more than $2 million in cash, 194 firearms, 29 vehicles, 26 kilograms of cocaine and three kilograms of crack were seized and forfeited.
Grissom commended the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Internal Revenue Service, the Kansas City, Kan., Police Department and Assistant U.S. Attorney Terra Morehead for their work on the case.
Lapwai Man Sentenced to 15 Years in Prison for Sexually Abusing a ChildRead the Press Release
COEUR D'ALENE - Robert William McAllaster, 50, of Lapwai, Idaho, was sentenced today to 180 months in prison for sexual abuse of a child, U.S. Attorney Wendy J. Olson announced. United States District Judge Stanley A. Bastian, a visiting judge from the Eastern District of Washington assigned to hear some Idaho cases, also ordered McAllaster to serve 15 years of supervised release upon his release from prison. McAllaster pleaded guilty to the charge on September 15, 2015.
According to the plea agreement, between June 25, 2012, and September 30, 2014, on the Nez Perce Indian Reservation, McAllaster sexually abused a child who was over the age of twelve, by causing contact between his penis and the child.
“Crimes against children are some of the most heinous our office prosecutes,” said Olson. “Today’s sentence should serve notice to others who abuse children. You will be investigated, you will be prosecuted, and justice will be served.”
The case was investigated by the Federal Bureau of Investigation, Nez Perce Tribal Police Department, and the Nez Perce County Sheriff’s Office.
Justice Department terminates consent decree with Ohio Department of Youth ServicesRead the Press Release
The United States announced today that it has joined with the state of Ohio in seeking the termination of a consent decree with the Ohio Department of Youth Services (DYS), recognizing Ohio’s successful elimination of its use of disciplinary solitary confinement on children in its custody and its improvement of individualized mental health treatment for children formerly at risk of such confinement.
DYS pledged in the consent decree on May 21, 2014, to dramatically reduce and eventually eliminate its use of solitary confinement on children in its custody. DYS also committed to ensure that children in its juvenile facilities receive individualized mental health treatment to prevent and address the conditions and behaviors that led to solitary confinement. Ohio also committed to reduce the potential harms caused by solitary confinement by increasing access to therapeutic, educational and recreational services while a child is in solitary confinement and addressing the child’s behavior that led to acts of violence.
The consent decree resolved allegations that Ohio subjected children with mental health needs to harmful solitary confinement and withheld treatment and programming, in violation of their constitutional rights. The consent decree included performance standards to measure compliance, and the monitors in the United States and S.H. cases monitored compliance jointly. In the order of termination, the court concluded that Ohio had complied with the terms and conditions of the consent decree.
In granting the joint motion to terminate the consent decree, the U.S. District Court for the Southern District of Ohio noted the “remarkable improvement” in conditions of confinement at DYS juvenile facilities. The court commended DYS for numerous improvements, including the abolition of the practice of disciplinary solitary confinement, its “vastly improved” mental health services and a reduction in the incarcerated population from over 2000 children to fewer than 500 today. The experts who monitored the consent decree prepared and filed with the court a detailed report that explained the reforms DYS made “to memorialize [DYS’] major policy and practice decisions for the benefit of others in the field.”
“The state of Ohio, the administrators of the Department of Youth Services and their counsel are to be commended for their commitment to reforming Ohio’s juvenile correctional facilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Ohio’s achievements can serve as a model throughout the nation.”
“The termination of this consent decree illustrates state and federal cooperation to provide safer practices for children in Ohio juvenile facilities,” said U.S. Attorney Carter Stewart of the Southern District of Ohio.
“We are gratified that we were able to work together with our state partners to make juvenile justice in Ohio more rehabilitative,” said U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio.
The department first investigated conditions at Ohio juvenile correctional facilities in 2007 and found constitutional deficiencies in Ohio’s use of physical force, mental health care, grievance investigation and processing and use of solitary confinement. In June 2008, the department entered into a consent decree with Ohio to remedy these violations at two facilities that are now closed – the Scioto Juvenile Correctional Facility and the Marion Juvenile Correctional Facility. Simultaneously, private plaintiffs in the case S.H. v. Reed entered into a consent decree with Ohio regarding similar deficiencies at all of the state’s juvenile correctional facilities. However, between November 2013 and January 2014, data from the monitoring of both consent decrees revealed that Ohio had continued to use unlawful solitary confinement on children at Scioto and in the other facilities.
The Violent Crime Control and Law Enforcement Act of 1994 authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youth in juvenile justice institutions. Please visit the Civil Rights Division’s website to learn more about this act and other laws the Civil Rights Division enforces.
This agreement is due to the efforts of the Civil Rights Division’s Special Litigation Section, the U.S. Attorney’s Office of the Southern District of Ohio and the U.S. Attorney’s Office of the Northern District of Ohio. The agreement was also due to the work of plaintiffs’ counsel in S.H., Alphonse Gerhardstein of Gerhardstein & Branch Co. LPA and Kim Tandy of the Children’s Law Center Inc., and to the leadership of DYS.
Justice Department Settles Housing Discrimination Lawsuit Against Owner of North Fort Myers, Florida, Mobile Home and Recreational Vehicle ParkRead the Press Release
The Justice Department announced today that Southwind Village LLC, the owner and operator of Southwind Village Mobile Home Park in North Fort Myers, Florida, has agreed to pay $60,000 to resolve allegations that it discriminated against African Americans in violation of the Fair Housing Act. The settlement was approved today by the U.S. District Court for the Middle District of Florida.
The government’s complaint, filed on Sept. 30, 2015, alleges that Southwind Village’s then-manager, Carl Bruckler, refused to rent recreational vehicle lots to African Americans. According to the complaint, Bruckler falsely told African Americans who inquired about residing in the park that no lots were available or that there was a waiting list, and discouraged African Americans from making future inquiries at the park. The lawsuit is based on the results of testing conducted by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“Discrimination on the basis of race or color in housing will not be tolerated,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “We appreciate Southwind Village’s willingness to resolve these serious allegations promptly.”
“All citizens, regardless of their race or color, have the right to equal and fair treatment when choosing where to live,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “We will continue to fight illegal discrimination, wherever it might exist.”
Under the terms of the agreement, which is in the form of a consent order, Southwind Village will establish a settlement fund in the amount of $35,000 to compensate victims of their discriminatory practices and pay a civil penalty of $25,000 to the United States. The agreement further requires Southwind Village to take steps to ensure that African Americans are no longer restricted from renting recreational vehicle lots at Southwind Village Mobile Home Park, located at 1269 River Road in North Fort Myers, and to provide periodic reports to the government. The settlement does not resolve the government’s lawsuit against Carl Bruckler.
Individuals who have information about, or who believe they may have been harmed by, the defendants’ conduct should contact the Justice Department toll-free at 1-800-896-7743, option 9992, or e-mail the Justice Department at [email protected]. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
Southwind Village Consent Decree
Southwind Village Order Granting Consent Decree
Justice Department Requires AMC Entertainment to Divest Two Movie Theaters in Order to Complete Acquisition of Starplex CinemasRead the Press Release
Theater Divestitures Will Preserve Movie Theater Competition in Connecticut and New Jersey
The Department of Justice announced today that it has reached a settlement with AMC Entertainment Holdings Inc. and SMH Theatres Inc. (Starplex Cinemas) that requires AMC to divest movie theaters in Connecticut and New Jersey, in order to proceed with its $172 million acquisition of Starplex Cinemas.
The Antitrust Division and the State of Connecticut filed a civil antitrust lawsuit today in U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department and the Connecticut Attorney General filed a proposed settlement that would resolve the competitive concerns alleged in the lawsuit.
“Consumers have benefitted from the competition on price and on quality of the viewing experience between AMC’s and Starplex Cinemas’ theatres in Berlin, Connecticut, and East Windsor, New Jersey,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The divestiture of two theatres in those areas ensures that movie theater competition is preserved.”
AMC’s and Starplex Cinemas’ theaters in the Berlin, Connecticut, and East Windsor, New Jersey, areas compete to attract moviegoers on ticket prices as well as through the quality of the viewing experience, such as by offering moviegoers the most sophisticated sound systems, largest screens, best picture clarity, premium seating, and high quality food and drink. Because AMC and Starplex Cinemas are each other’s most significant competitor in the Berlin and East Windsor areas, the proposed acquisition would likely reduce price competition as well as the overall quality of the movie viewing experience.
Under the terms of the proposed consent decree, the Starplex Town Center Plaza 10 in East Windsor, New Jersey, and the Starplex Berlin 12 in Berlin, Connecticut, must be divested to a buyer or buyers approved by the United States.
AMC, a Delaware corporation, operates 349 theaters with a total of 4,975 screens in locations primarily throughout the United States. Its U.S. box office revenues were approximately $1.8 billion in 2014.
Starplex Cinemas, a Dallas-based company, owns and operates 33 movie theaters with a total of 346 screens in 12 states. Its U.S. box office revenues were approximately $57 million in 2014.
As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to David C. Kully, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 4000, Washington, D.C. 20530 (telephone: 202-305-9969). At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed consent decree upon finding that it serves the public interest.
AMC Complaint (185.57 KB)
AMC CIS (83.43 KB)
AMC Hold Separate (160.41 KB)
AMC Explanation (80.16 KB)
AMC PFJ (73.47 KB)
Justice Department Issues Guidance on Identifying and Preventing Gender Bias in Law Enforcement Response to Sexual Assault and Domestic ViolenceRead the Press Release
Attorney General Loretta E. Lynch announced today a new guidance from the Justice Department designed to help law enforcement agencies prevent gender bias in their response to sexual assault and domestic violence, highlighting the need for clear policies, robust training and responsive accountability systems.
“Gender bias, whether explicit or implicit, can severely undermine law enforcement’s ability to protect survivors of sexual and domestic violence and hold offenders accountable,” said Attorney General Lynch. “This guidance – developed in collaboration with law enforcement leaders and advocates from across the country – is designed to help state, local, and tribal authorities more fairly and effectively address allegations of domestic violence and sexual assault. In the days and months ahead, the Department of Justice will continue to work with our law enforcement partners nationwide to ensure that they have the tools and resources they need to prevent, investigate, and prosecute these horrendous crimes.”
Today’s guidance – which reflects input from a wide array of stakeholders, including police leaders, victim advocates and civil rights advocates – aims to enhance the Justice Department’s partnership with law enforcement officers who work tirelessly to protect their communities, advance bias-free policing and uphold the civil rights of the people they serve. The Justice Department’s Office on Violence Against Women (OVW), the Civil Rights Division and the Office of Community Oriented Policing Services (COPS Office) collaborated to produce the guidance.
The guidance serves two key purposes. First, it aims to examine how gender bias can undermine the response of law enforcement agencies (LEAs) to sexual assault and domestic violence. Second, it provides a set of basic principles that – if integrated into LEAs’ policies, trainings and practices – will help ensure that gender bias, either intentionally or unintentionally, does not undermine efforts to keep victims safe and hold offenders accountable.
The guidance, through a series of detailed case examples, advises law enforcement agencies to incorporate the following principles into clear policies, comprehensive training and effective supervision protocols:
- Recognize and address biases, assumptions and stereotypes about victims.
- Treat all victims with respect and employ interviewing tactics that encourage a victim to participate and provide facts about the incident.
- Investigate sexual assault or domestic violence complaints thoroughly and effectively.
- Appropriately classify reports of sexual assault or domestic violence.
- Refer victims to appropriate services.
- Properly identify the assailant in domestic violence incidents.
- Hold officers who commit sexual assault or domestic violence accountable.
- Maintain, review and act upon data regarding sexual assault and domestic violence.
A form of discrimination, gender bias may result in LEAs providing less protection to certain victims on the basis of gender, failing to respond to crimes that disproportionately harm a particular gender or offering less robust services due to a reliance on gender stereotypes.
Gender bias can manifest in police officers misclassifying or underreporting sexual assault and domestic violence cases; inappropriately jumping to conclusions and labeling sexual assault cases unfounded; failing to test sexual assault kits; interrogating rather than interviewing victims and witnesses; treating domestic violence as a family matter rather than a crime; failing to enforce protection orders; or failing to treat same-sex domestic violence as a crime. These failures may ultimately compromise law enforcement’s ability to ascertain the facts, determine whether the incident constitutes a crime and develop a case that holds the perpetrator accountable.
The Department of Justice has included additional resources in an appendix to the guidance to further assist LEAs in improving their response to sexual assault and domestic violence.
Identifying and Preventing Gender Bias Guidance
Gender Bias Policing Guidance Fact Sheet
Justice Department Announces Three Banks Reach Resolutions Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Crédit Agricole (Suisse) SA (CAS), Dreyfus Sons & Co Ltd, Banquiers (Dreyfus), and Baumann & Cie, Banquiers (Baumann), reached resolutions under the department’s Swiss Bank Program. These banks collectively will pay penalties of more than $130 million.
“The department continues to receive detailed information regarding the myriad schemes used by Swiss banks, their employees and other individuals to encourage and profit from the concealment by U.S. taxpayers of foreign accounts,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Our offshore investigations into this conduct expand as each new entity, individual and foreign jurisdiction is disclosed.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
CAS, a corporation organized under the laws of Switzerland and headquartered in Geneva, operates a financial services business predominantly focused on offering private banking and wealth management services to high net worth clients. In the period since Aug. 1, 2008, CAS operated Swiss branch offices in Lausanne, Lugano, Basel and Zurich. CAS closed the Basel office in 2013. CAS is wholly owned by Crédit Agricole Private Banking, a French holding company created in 2011 to hold private banking entities of the French Crédit Agricole Group. CAS is the result of the 2005 merger of two Swiss banks that were originally formed by two French banks: Crédit Lyonnais (Suisse) S.A., which was formed in 1876 by the French bank Crédit Lyonnais, and Banque Indosuez (Suisse) SA, which was formed in 1956 by the French bank Banque Indosuez.
CAS opened, maintained and profited from undeclared accounts belonging to clients that it knew, or should have known, were U.S. taxpayers—including those who CAS knew, or should have known, were likely not complying with their U.S. tax obligations. CAS provided certain of its clients, including ones with U.S. tax reporting obligations, with access to its then wholly-owned subsidiary Crédit Agricole Suisse Conseil (CASC), based in Geneva. CASC, directly or through its subsidiaries, provided services that included international estate and tax planning, as well as the establishment and administration of non-U.S. entities. CASC provided its services exclusively to private banking clients of the Crédit Agricole Group, including CAS. CAS sold its interest in CASC to an unaffiliated third party on July 8, 2015.
Effective in 2001, CAS entered into a Qualified Intermediary (QI) Agreement with the Internal Revenue Service (IRS). The QI regime provided a comprehensive framework for U.S. information reporting and tax withholding by a non-U.S. financial institution relating to U.S. securities. Pursuant to its interpretation of the terms of its QI Agreement, CAS’s view was that the reporting and withholding obligations of its QI Agreement did not apply to accountholders who were not trading in U.S. securities or accounts that were held in the names of non-U.S. entities that, for U.S. tax purposes, were deemed to be corporations and the beneficial owners of such accounts. As a result, from in or about 2001 and continuing past Aug. 1, 2008, CAS serviced and profited from certain U.S. taxpayers without disclosing their identities to the IRS.
In a number of instances, CAS maintained accounts for certain U.S. taxpayers in the names of corporations, foundations, trusts or other legal entities that were organized in non-U.S. jurisdictions, including the Bahamas, the British Virgin Islands, Columbia, Curaçao, Hong Kong, Mauritius and Panama. CASC provided, directly or through its subsidiaries, corporate services to at least 25 such accounts. Eighteen of these accounts held U.S. securities, two of which received services from CASC or subsidiaries. In some cases, CAS knew or had reason to know that certain offshore entity accounts were operated without strict adherence to corporate formalities. In at least seven instances, CAS accepted from the directors of these entities an IRS Form W-8BEN (or CAS’s substitute “Declaration of Non U.S. Status” form) that falsely declared or implied that the entity was the beneficial owner of the assets deposited in the account when CAS knew, or had reason to know, that the entity was being operated as a sham, conduit or nominee with respect to its U.S. taxpayer owner. At least six such offshore entity accounts held U.S. securities and were not reported to the IRS, in violation of CAS’s QI Agreement.
Upon client instruction, CAS transferred the assets of certain U.S.-related accounts belonging to some of its U.S. taxpayer clients in ways that concealed the U.S. connection to those accounts. CAS implemented a flawed account closing protocol that enabled certain U.S. taxpayer clients to exit their CAS accounts using ways and means that continued to conceal the accounts from the IRS. As a result, certain U.S. taxpayer clients were able to utilize, and in some instances fully deplete, the assets of undeclared accounts held at CAS through substantial and/or successive withdrawals of cash, reloads of prepaid stored value cash cards or bank checks. In one such instance, an employee of CAS asked a CAS relationship manager to encourage the use of a prepaid stored value cash card as a means of facilitating account closure.
In addition, in certain instances and on the client’s instruction, CAS transferred assets from U.S.-related accounts briefly through non-U.S. accounts at CAS en route to accounts at unaffiliated banks without documenting the U.S. relationship to these assets at the time of the transfers. As a result of such transactions, the receiving banks were unable to identify the assets that they received as U.S.-related assets. In a number of other instances, CAS followed client instructions to remove U.S. taxpayers as the holders or beneficial owners of U.S.-related accounts or to close U.S.-related accounts by transferring assets from the accounts to other accounts maintained by CAS or a CAS affiliate held in the names of other people or entities. CAS documented such instances as donations to, or other bona fide transactions with, the transferees. However, certain CAS relationship managers knew, or had reason to know, that the U.S. taxpayers originally named on such accounts or in control of such assets:
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Continued to maintain effective economic ownership, control and/or enjoyment of the accounts and their assets, or
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Regained ownership or control over the assets after being transferred to accounts at unaffiliated financial institutions.
Before and throughout its participation in the Swiss Bank Program, CAS committed to providing full cooperation to the U.S. government and has made timely and comprehensive disclosures regarding its U.S. cross border business. Among other things, CAS described in detail the structure of its cross border business for U.S.-related accounts including, but not limited to:
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Its cross border policies and directives;
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Data on desks and employees with elevated concentrations of U.S.-related accounts;
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Information on key external asset managers that had significant involvement with U.S.-related accounts;
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The names and functions of individuals who were involved in the structuring, operation or supervision of CAS’s cross border business for U.S.-related accounts; and
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Written summaries on its largest U.S.-related accounts and those involving conduct disclosed herein.
Since Aug. 1, 2008, CAS maintained approximately 954 declared and undeclared U.S.-related accounts having a maximum aggregate dollar value in excess of $1.8 billion. CAS will pay a penalty of $99.211 million.
Dreyfus is a traditional private bank founded in 1813 in Basel, Switzerland. As one of the oldest family-owned banks in Switzerland, Dreyfus is managed today by the sixth generation of the founder’s family. In November 2013, Dreyfus opened a representative office in Tel Aviv to serve existing and new clients in the Israeli market. Other than the Tel Aviv representative office, Dreyfus has never operated a desk outside of Switzerland.
Following World War II, Dreyfus created Panama corporations to hold funds for clients. This practice had its roots in the desire of Jewish clients to protect their assets for reasons of personal safety, and the purpose and operation of the entities was to conceal ownership of the assets from all government authorities, “friendly” or otherwise. However, the practice extended well into the 2000s. Among the Panama entity accounts created by Dreyfus are 33 U.S.-related accounts, the oldest of which opened in 1951. The combined high value of these accounts was approximately $90 million. The U.S. person beneficial owners of the Panama entity accounts were properly identified as beneficial owners of the entities on Forms A pursuant to Swiss know your customer rules. However, the entities were identified as the beneficial owner on IRS Forms W-8BEN, when, as Dreyfus well knew, the true beneficial owners were U.S. persons. Dreyfus employees – primarily the Deputy Chairman of the Executive Management, a former member of Dreyfus’s Board of Directors and Head of the Gérance division, which provides services mainly to corporate entities, and a former deputy manager – also served as corporate directors of the entities.
With respect to at least two Panama entity accounts, the entity structure was used to conceal payments into the United States. For example, one Panama entity account was opened in 1991 with a husband and wife, both U.S. nationals living in the United States, as beneficial owners. The account, which had a high value of over $1 million during the period since Aug. 1, 2008, was opened with funds inherited from a relative with an account at Dreyfus. Beginning in 2008, checks in amounts between $4,000 and $5,000 each were sent to the husband and the couple’s three sons in the United States on a regular basis. In total, 205 checks with a combined value of approximately $925,000 were sent to the individual family members in the United States. Dreyfus’s efforts to convince the beneficial owners to disclose the account were unsuccessful, and the account was closed in 2012 without being disclosed to U.S. authorities.
For four Panama entity accounts, Dreyfus allowed the accounts to be closed in the form of bearer shares, which assisted in the further concealment of assets in the accounts. A bearer share is a security that is not required to be registered and which can be transferred without an endorsement of any kind. Thus, a bearer share is negotiable by whoever possesses it. For example, an individual can purchase shares from an issuer and exchange the shares for cash at a financial institution that redeems bearer shares or may give the shares to another individual, who may exchange the shares for cash. The four Panama entities used assets in the accounts to purchase bearer shares at Dreyfus, with the shares then physically delivered to representatives of the Panama entities in closure of the accounts. Because the shares could then be delivered to the U.S. persons whose assets were converted to bearer shares, or to anyone else, funds from these accounts left Dreyfus in a virtually untraceable manner. With respect to these four accounts, over $4 million in assets left Dreyfus in the form of bearer shares.
Dreyfus also opened and maintained at least 34 U.S.-related accounts for domiciliary entities created in foreign countries including the Bahamas, the British Virgin Islands, the Isle of Man, Liberia, Liechtenstein, Mauritius, Nevis and Switzerland. For each account, the U.S. beneficial owner was properly identified in bank documents for purposes of Swiss know your customer rules, but the non-U.S. entity was identified as the beneficial owner of the account on IRS Forms W-8BEN. In this manner, Dreyfus assisted U.S. persons in concealing ownership of the assets.
Separate from its traditional private banking services, over 20 years ago, Dreyfus management agreed to serve as a custodian for physical gold and cash for clients of a third party, a British Virgin Islands entity whose business operations are based in Switzerland (Entity #1). Entity #1 also maintained and operated a storage facility at the Zurich airport for the storage of precious metals other than gold, independent of its relationship with Dreyfus. Dreyfus’s relationship with Entity #1 is overseen by Dreyfus’s Head of Legal and Compliance. For introducing customers to Dreyfus, Entity #1 receives a share of the general fees earned by Dreyfus for storing the gold and cash.
A total of 315 U.S.-related accounts with a combined high value of approximately $440 million in gold and/or cash were held through Entity #1 and custodied by Dreyfus. Although Entity #1’s master account at Dreyfus is held in the name of a British Virgin Islands entity, each U.S. person storing gold or cash with the bank has a subaccount of Entity #1’s master account and can hold the subaccount in the name of an individual, trust, foundation, corporation or other structure. Ninety-two of these 315 U.S.-related gold and cash accounts were held in the name of an entity. Although some of the gold and cash client base maintained their accounts because of fears related to the collapse of the banking system, upon review by Dreyfus and the department, certain of the gold and cash storage accounts show strong indicia of the concealment of assets, such as being held in the name of nominee entities.
Since Aug. 1, 2008, Dreyfus held a total of 855 U.S.-related accounts with a combined high value of assets under management of approximately $1.76 billion. Dreyfus will pay a penalty of $24.161 million.
Baumann is a traditional private bank founded in 1920, which is headquartered in Basel, Switzerland. In June 2009, Baumann opened a branch in Zurich dedicated purely to private banking.
The majority of Baumann’s U.S. clients structured their accounts so that they appeared as if they were held by a non-U.S. legal structure, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS. Baumann was not involved in setting up these entities, but those entities were generally created or serviced by a few Zurich-based lawyers with whom the relationship managers in Baumann’s Zurich branch were personally acquainted. In the period since Aug. 1, 2008, Baumann opened U.S.-related accounts for non-U.S. structures, such as offshore corporations or trusts. These offshore entities included British Virgin Islands, British West Indies, Panama and Seychelles corporations, as well as Liechtenstein foundations, all of which were established by external law firms.
As one example, Baumann opened an account in June 2009 for a Panama corporation, established in 2000, where the beneficial owner as listed on Form A was a U.S. citizen domiciled in the United States. This person was a retired lawyer living in Las Vegas. The beneficial owner provided a U.S. passport upon opening the account, which was funded by $27 million from the accountholder’s account at another bank. The accountholder signed Baumann’s compliance form indicating that the Panama corporation was in fact the beneficial owner of the assets for U.S. tax withholding purposes when Baumann knew or should have known this was untrue.
Baumann offered a variety of other traditional Swiss banking services that, although available to all its clients, it knew could assist, and did assist, its U.S. clients in concealing their undeclared assets and income. Among other things, Baumann opened numbered accounts and held bank statements and other mail relating to some U.S.-related accounts at Baumann’s offices in Switzerland, rather than sending the statements and mail to the U.S. taxpayers in the United States.
Regarding one numbered account, in July 2010, the clients transferred $2 million to an account at Baumann from an account at Credit Suisse. The taxpayers were American horse breeders who had granted a power of attorney to an external asset management company based in Zurich. That external asset manager introduced the clients to Baumann, and Baumann was instructed to retain the correspondence, to send copies to the clients’ external asset manager and not to invest in U.S. securities. In 2010 and 2011, Baumann was instructed to make repeated payments of under $10,000 to a U.S. bank account in the name of a U.S.-based coin dealer. From June to August 2011, the clients instructed Baumann to buy 2,279 pieces of Krugerrand gold coins, at that time worth approximately $3.7 million. In September 2011, the clients instructed Baumann to close the account. The remaining assets were withdrawn in cash, and the account closed in 2011.
Since Aug. 1, 2008, Baumann maintained a total of 167 U.S.-related accounts, with an aggregate peak value of $514.1 million. Baumann will pay a penalty of $7.7 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s resolutions reflect the tough but measured terms of the Department of Justice’s Swiss Bank Program,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International (LB&I) Division. “Large and small financial institutions are accepting their responsibility and putting their non-compliance behind them. They are also providing us information that will lead us to those U.S. taxpayers who have failed to report their foreign accounts and pay their income taxes.”
“Although the end of the year is upon us, we will not slow down in our efforts to bring banks and U.S. citizens hiding money offshore into compliance,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The agreements signed today are further evidence that the Swiss Bank Program has effectively decimated the hidden offshore banking industry. Collectively, the magnitude of data provided by these banks increases the amount of information we know exponentially about individuals hiding their money and the countries that are facilitating it. IRS-CI will continue to use all of the information we gather from these agreements to vigorously pursue individual U.S. taxpayers who illegally conceal assets offshore and to develop innovative strategies to combat international tax evasion worldwide.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-CI and the IRS LB&I Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked Paul G. Galindo, Kathleen E. Lyon and Carl D. Wasserman, who served as counsel on these matters, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Justice Department Agrees to Termination of Consent Decree Concerning Children in Ohio Juvenile Correctional FacilitiesRead the Press Release
The United States announced today that it has joined with the state of Ohio in seeking the termination of a consent decree with the Ohio Department of Youth Services (DYS), recognizing Ohio’s successful elimination of its use of disciplinary solitary confinement on children in its custody and its improvement of individualized mental health treatment for children formerly at risk of such confinement.
DYS pledged in the consent decree on May 21, 2014, to dramatically reduce and eventually eliminate its use of solitary confinement on children in its custody. DYS also committed to ensure that children in its juvenile facilities receive individualized mental health treatment to prevent and address the conditions and behaviors that led to solitary confinement. Ohio also committed to reduce the potential harms caused by solitary confinement by increasing access to therapeutic, educational and recreational services while a child is in solitary confinement and addressing the child’s behavior that led to acts of violence.
The consent decree resolved allegations that Ohio subjected children with mental health needs to harmful solitary confinement and withheld treatment and programming, in violation of their constitutional rights. The consent decree included performance standards to measure compliance, and the monitors in the United States and S.H. cases monitored compliance jointly. In the order of termination, the court concluded that Ohio had complied with the terms and conditions of the consent decree.
In granting the joint motion to terminate the consent decree, the U.S. District Court for the Southern District of Ohio noted the “remarkable improvement” in conditions of confinement at DYS juvenile facilities. The court commended DYS for numerous improvements, including the abolition of the practice of disciplinary solitary confinement, its “vastly improved” mental health services and a reduction in the incarcerated population from over 2000 children to fewer than 500 today. The experts who monitored the consent decree prepared and filed with the court a detailed report that explained the reforms DYS made “to memorialize [DYS’] major policy and practice decisions for the benefit of others in the field.”
“The state of Ohio, the administrators of the Department of Youth Services and their counsel are to be commended for their commitment to reforming Ohio’s juvenile correctional facilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Ohio’s achievements can serve as a model throughout the nation.”
“The termination of this consent decree illustrates state and federal cooperation to provide safer practices for children in Ohio juvenile facilities,” said U.S. Attorney Carter Stewart of the Southern District of Ohio.
“We are gratified that we were able to work together with our state partners to make juvenile justice in Ohio more rehabilitative,” said U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio.
The department first investigated conditions at Ohio juvenile correctional facilities in 2007 and found constitutional deficiencies in Ohio’s use of physical force, mental health care, grievance investigation and processing and use of solitary confinement. In June 2008, the department entered into a consent decree with Ohio to remedy these violations at two facilities that are now closed – the Scioto Juvenile Correctional Facility and the Marion Juvenile Correctional Facility. Simultaneously, private plaintiffs in the case S.H. v. Reed entered into a consent decree with Ohio regarding similar deficiencies at all of the state’s juvenile correctional facilities. However, between November 2013 and January 2014, data from the monitoring of both consent decrees revealed that Ohio had continued to use unlawful solitary confinement on children at Scioto and in the other facilities.
The Violent Crime Control and Law Enforcement Act of 1994 authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youth in juvenile justice institutions. Please visit the Civil Rights Division’s website to learn more about this act and other laws the Civil Rights Division enforces.
This agreement is due to the efforts of the Civil Rights Division’s Special Litigation Section, the U.S. Attorney’s Office of the Southern District of Ohio and the U.S. Attorney’s Office of the Northern District of Ohio. The agreement was also due to the work of plaintiffs’ counsel in S.H., Alphonse Gerhardstein of Gerhardstein & Branch Co. LPA and Kim Tandy of the Children’s Law Center Inc., and to the leadership of DYS.
Ohio Monitors Final Report
Ohio Report on Transformation
Order Terminating Consent Decree
Justice Department Agrees to Termination of Consent Decree Concerning Children in Ohio Juvenile Correctional FacilitiesRead the Press Release
WASHINGTON – The United States announced today that it has joined with the state of Ohio in seeking the termination of a consent decree with the Ohio Department of Youth Services (DYS), recognizing Ohio’s successful elimination of its use of disciplinary solitary confinement on children in its custody and its improvement of individualized mental health treatment for children formerly at risk of such confinement.
DYS pledged in the consent decree on May 21, 2014, to dramatically reduce and eventually eliminate its use of solitary confinement on children in its custody. DYS also committed to ensure that children in its juvenile facilities receive individualized mental health treatment to prevent and address the conditions and behaviors that led to solitary confinement. Ohio also committed to reduce the potential harms caused by solitary confinement by increasing access to therapeutic, educational and recreational services while a child is in solitary confinement and addressing the child’s behavior that led to acts of violence.
The consent decree resolved allegations that Ohio subjected children with mental health needs to harmful solitary confinement and withheld treatment and programming, in violation of their constitutional rights. The consent decree included performance standards to measure compliance, and the monitors in the United States and S.H. cases monitored compliance jointly. In the order of termination, the court concluded that Ohio had complied with the terms and conditions of the consent decree.
In granting the joint motion to terminate the consent decree, the U.S. District Court for the Southern District of Ohio noted the “remarkable improvement” in conditions of confinement at DYS juvenile facilities. The court commended DYS for numerous improvements, including the abolition of the practice of disciplinary solitary confinement, its “vastly improved” mental health services and a reduction in the incarcerated population from over 2000 children to fewer than 500 today. The experts who monitored the consent decree prepared and filed with the court a detailed report that explained the reforms DYS made “to memorialize [DYS’] major policy and practice decisions for the benefit of others in the field.”
“The state of Ohio, the administrators of the Department of Youth Services and their counsel are to be commended for their commitment to reforming Ohio’s juvenile correctional facilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Ohio’s achievements can serve as a model throughout the nation.”
“The termination of this consent decree illustrates state and federal cooperation to provide safer practices for children in Ohio juvenile facilities,” said U.S. Attorney Carter Stewart of the Southern District of Ohio.
“We are gratified that we were able to work together with our state partners to make juvenile justice in Ohio more rehabilitative,” said U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio.
The department first investigated conditions at Ohio juvenile correctional facilities in 2007 and found constitutional deficiencies in Ohio’s use of physical force, mental health care, grievance investigation and processing and use of solitary confinement. In June 2008, the department entered into a consent decree with Ohio to remedy these violations at two facilities that are now closed – the Scioto Juvenile Correctional Facility and the Marion Juvenile Correctional Facility. Simultaneously, private plaintiffs in the case S.H. v. Reed entered into a consent decree with Ohio regarding similar deficiencies at all of the state’s juvenile correctional facilities. However, between November 2013 and January 2014, data from the monitoring of both consent decrees revealed that Ohio had continued to use unlawful solitary confinement on children at Scioto and in the other facilities.
The Violent Crime Control and Law Enforcement Act of 1994 authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youth in juvenile justice institutions. Please visit the Civil Rights Division’s website to learn more about this act and other laws the Civil Rights Division enforces.
This agreement is due to the efforts of the Civil Rights Division’s Special Litigation Section, the U.S. Attorney’s Office of the Southern District of Ohio and the U.S. Attorney’s Office of the Northern District of Ohio. The agreement was also due to the work of plaintiffs’ counsel in S.H., Alphonse Gerhardstein of Gerhardstein & Branch Co. LPA and Kim Tandy of the Children’s Law Center Inc., and to the leadership of DYS.
Jewish Temple’s Former Accounting Manager Sentenced to Prison for Stealing from TempleRead the Press Release
BIRMINGHAM – A federal judge today sentenced the former Temple Emanu-el accounting manager to six months in prison and six months in home detention for stealing from his employer, announced First Assistant U.S. Attorney Robert Posey and FBI Special Agent in Charge Roger C. Stanton.
U.S. District Court Judge Abdul Kallon sentenced CHARLES M. COLLINS, 66, of Moody, on one count of wire fraud as part of Collins’ scheme to steal from the Birmingham temple. The judge ordered Collins to pay the Temple $80,545 in restitution for the $41,098 that he stole, plus the cost of a forensic audit to determine the embezzlement amount. Collins pleaded guilty to the fraud in September. He must report to prison Feb. 16.
Collins worked as the accounting manager for Temple Emanu-el from June 2008 to November 2013, when his scheme was discovered. In his plea agreement with prosecutors, he admitted that he took advantage of his position to send unauthorized wire transfers from a local bank into his own personal bank accounts. Collins agreed to forfeit $41,098 to the government as proceeds of illegal activity.
The FBI investigated the case, which Assistant U.S. Attorney Xavier O. Carter Sr. prosecuted.
Jamaican National Pleads Guilty to Passport FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MARK ANTHONY GOULDBOURNE, 41, of Hartford, waived his right to indictment and pleaded guilty today in Hartford federal court to one count of making a false statement in a passport application.
According to court documents and statements made in court, GOULDBOURNE is a native and citizen of Jamaica. In March 2011, he submitted an application for a U.S. passport, in the name of another individual, at a U.S. Post Office in Hartford. Claiming to be this individual, GOULDBOURNE presented to the passport acceptance agent a New York birth certificate and a Pennsylvania identity card, and then signed the passport application under oath. Passport authorities flagged the application as possibly fraudulent and did not issue the passport.
In May 2015, law enforcement determined that GOULDBOURNE was an inmate at Hartford Correctional Center under the same identity used in the fraudulent passport application. In an interview with law enforcement on May 7, 2015, GOULDBOURNE admitted that he had submitted the fraudulent passport application in March 2011, and that he had obtained the Pennsylvania identity card in the name of the other individual.
GOULDBOURNE, who is detained, is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on March 7, 2015, at which time he faces a maximum term of imprisonment of 10 years.
This case was investigated by the U.S. Department of State, Diplomatic Security Service, and is being prosecuted by Assistant U.S. Attorney Harold H. Chen.
Indictment Unsealed Charging Houston Man with Defrauding Oklahoma City Company with False Delivery InvoicesRead the Press Release
Oklahoma City, Oklahoma – A federal indictment was unsealed yesterday charging RICHARD V. KELLY, 43, from Houston, Texas, with 12 counts of mail and wire fraud in connection with a scheme that defrauded local company Midwest Hose and Specialties, Inc., by falsely billing for deliveries that were never made, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. The indictment also seeks forfeiture of $809,115.50 in proceeds traceable to the offense.
According to the indictment, Kelly was employed as a dispatcher for Freeway Delivery, Inc., a trucking company based in Houston, Texas. Kelly’s wife worked as a truck driver for Freeway Delivery. One of Freeway Delivery’s customers was Oklahoma City-based Midwest Hose, a company that makes hoses and fittings for the oil and natural gas industry. The indictment alleges that from December 2007 to August 2012, Kelly generated false waybills and invoices from Freeway Delivery to Midwest Hose, showing fictitious deliveries made by Kelly’s wife, purportedly on behalf of Midwest Hose. The false waybills showed deliveries made by Kelly’s wife to Nabors Drilling in Houma, Louisiana, and they were hidden by attaching them to legitimate waybills and invoices sent to Midwest Hose. It is alleged that Kelly’s wife was paid a rate of 65-70% of the delivery fees paid by Midwest Hose to Freeway Delivery, through third-party biller Amerisource Funding, Inc.
The indictment charges six specific counts of mail fraud for the mailing of false invoices and waybills to Midwest Hose in Oklahoma City. The indictment also charges six specific counts of wire fraud for the payments processed from Midwest Hose to Amerisource Funding, Inc., Freeway Delivery’s third-party billing company.
If convicted, Kelly faces up to 20 years in prison and a $250,000 fine for each of the 12 counts of wire and mail fraud.
These charges are the result of an investigation conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney K. McKenzie Anderson.
Reference is made to the indictment and other public filings for further information. An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Indiana Resident Charged with Mailing Illegal Drugs to Allenwood InmateRead the Press Release
WILLIAMSPORT - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a charge of attempted distribution of controlled substances was filed yesterday against Nancy Finzen, a resident of Indianapolis, Indiana.
According to United States Attorney Peter Smith, Finzen, age 45, is charged in a criminal information with attempting to distribute narcotics to an inmate at United States Penitentiary -Allenwood by mailing envelopes to the inmate with drugs containing suboxone, a narcotic substance, in them between May 2014 and March 2015. At the time, Finzen was employed as a postal carrier in Indianapolis. The government also filed a plea agreement with the defendant which is subject to the approval of the court.
The investigation was conducted by the Federal Bureau of Investigation, and the Federal Bureau of Prisons Special Investigative Service. Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statues and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is ten years imprisonment, and a fine of $500,000. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Hillsborough County Resident Sentenced to Prison for Bankruptcy Fraud and Lying to the Office of the U.S. TrusteeRead the Press Release
Tampa, Florida – U.S. District Judge James D. Whittemore has sentenced David W. Griffin (44, Lutz) to three years in federal prison for bankruptcy fraud and making a false statement during a bankruptcy proceeding.
According to court documents, Griffin operated a foreclosure rescue scheme through his companies, Bay2Bay Area Holding, LLC and Business Development Consultants, LLC. The purpose of the scheme was to obtain quitclaim or warranty deeds from distressed homeowners facing foreclosure in return for false promises to rescue their homes from foreclosure by negotiating with creditors, renting the properties back to the homeowners to obtain rental income, and falsely promising that the homeowners could repurchase the properties from Griffin. To maximize his rental income, Griffin also prevented creditors and guarantors, including the Federal National Mortgage Association (“Fannie Mae”) and the Federal Housing Administration, from pursuing lawful foreclosure and eviction actions against homeowners who had defaulted on their mortgages. This was accomplished by filing, and causing to be filed, fraudulent bankruptcies in the names of the homeowners without their knowledge or consent.
Griffin also lied under oath in sworn testimony before the Office of the United States Trustee. Under penalty of perjury, Griffin stated that he had no knowledge of a bankruptcy petition filed in the name of his company, Bay2Bay Area Holding Group. In fact, Griffin prepared the petition and directed another individual to sign and file the petition with the United States Bankruptcy Court for the Middle District of Florida.
Griffin has agreed to make full restitution to the Clerk for the United States Bankruptcy Court for the Middle District of Florida. The losses are approximately $25,125.
This case was investigated by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Federal Housing Finance Agency - Office of Inspector General, and the U.S. Department of Housing and Urban Development – Office of Inspector General. The Office of the United States Trustee in Tampa also provided substantial assistance. It was prosecuted by Special Assistant United States Attorney Chris Poor.
Georgia Man Pleads Guilty to Defrauding More Than One Hundred Individuals Through an Online Investment Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that ALEX HAXTON pled guilty today to orchestrating a fraudulent Internet-based investment scheme that victimized more than one hundred individuals. HAXTON pled guilty before U.S. District Judge John G. Koeltl.
According to the allegations contained in the information to which HAXTON pled guilty and statements made during HAXTON’s plea proceeding:
HAXTON was the administrator of a website (the “Website”) that solicited investments on behalf of a company (the “Company”) that HAXTON effectively owned and controlled. As administrator of the Website, HAXTON arranged for representations to be made on the Website advertising its purported investment program. HAXTON also opened and maintained payment processor accounts to receive and disburse funds that individuals provided and expected to be invested in the purported investment program. To incorporate the Company and create the Website, HAXTON used a false Internet protocol address in order to mask his identity because he sought to avoid detection by investors and law enforcement.
Through the Website, HAXTON solicited investments from more than one hundred individuals across the United States and abroad based upon misrepresentations that the investors’ money would be invested in a “High Yield Investment Program,” or “HYIP,” which would invest in shares of start-up companies and generate a guaranteed rate of return of at least 1.8 percent per business day. HAXTON further falsely represented to investors that they could withdraw their invested funds at any time.
In fact, and contrary to the representations that HAXTON made, investors’ funds were not used to invest in start-up companies and generate the “HYIP” investment returns that HAXTON falsely promised. Instead, as HAXTON knew, a portion of the investors’ funds was used to make payments to earlier investors, as in a classic Ponzi scheme. The majority of the investors’ funds were misappropriated by HAXTON to pay for expenses associated with advertising the Website and diverted to HAXTON’s personal bank account for his own personal use.
In 2014, after victim investors began to complain on Internet blogs that they had not received the rates of return from the Website that they had been promised, HAXTON abruptly shut down the Website, a process known in the HYIP industry as “scamming.” When HAXTON shut down the Website, hundreds of investors lost their money, a total of approximately $150,000, which HAXTON kept and spent on himself.
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HAXTON, 27, of Atlanta, Georgia, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison. HAXTON is scheduled to be sentenced on April 15, 2016, before Judge Koeltl.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.
Former San Jose Immigration Consultant Sentenced to 18 Months Imprisonment on Fraud and Tax ChargesRead the Press Release
SAN JOSE – Evelyn Sineneng-Smith was sentenced yesterday to 18 months in prison and ordered to pay a $15,000 fine for encouraging and inducing illegal immigration for private financial gain, mail fraud, and willfully subscribing to a false tax return, announced Acting United States Attorney Brian J. Stretch; Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Andrew Toth; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan Spradlin; and United States Postal Inspection Service Inspector in Charge Rafael Nuñez. The sentence follows Sineneng-Smith’s conviction after a jury trial on the immigration and mail fraud charges and her subsequent guilty plea to the tax return- related charge.
After a 12-day jury trial, Sineneng-Smith, 68, of San Jose, was convicted on July 30, 2013, of two counts of encouraging and inducing illegal immigration for personal financial gain and two counts of mail fraud. During the trial, evidence showed that Sineneng-Smith operated an immigration consultation business in San Jose from 1990 to 2008. Through her service, she induced several people to stay in the country illegally by intentionally providing them with dishonest advice. For example, she advised foreign nationals, many of whom were Filipino citizens who came to the United States on visitors’ visas, to apply for a labor certification from the U.S. Department of Labor as path towards obtaining lawful permanent residence. She charged six victims $5,900 each to file such applications all the while knowing that the law had changed and that her clients did not qualify for lawful permanent residence under existing immigration regulations. According to the testimony of the victims, Sineneng-Smith failed to inform them that they were ineligible to obtain permanent residence. In addition, Sineneng-Smith encouraged these victims to overstay the time allowed under their tourist visas and work illegally in residential healthcare facilities.
In addition, Sineneng-Smith pleaded guilty on January 12, 2015, to two counts of willfully subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1). In her plea agreement, Sineneng-Smith admitted she failed to disclose on her tax returns some of the income she received from her immigration consultation business for the 2002 and 2003 tax years. The omission of this income materially understated her gross income on the returns.
Sineneng-Smith was indicted by a federal grand jury on July 14, 2010. She was charged with three counts of encouraging and inducing illegal immigration for private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(i); three counts of mail fraud, in violation of 18 U.S.C. § 1341; and two counts of willfully subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1). One of the immigration charges and one of the mail fraud charges were later dismissed by the government.
The sentence was handed down by the Honorable Ronald M. Whyte, U.S. District Judge. Judge Whyte also sentenced the defendant to six months home confinement as a special condition of a three year period of supervised release and ordered restitution to the victims and to the IRS. The defendant will begin serving the sentence on March 16, 2016.
Assistant U.S. Attorneys Susan Knight and Philip Guentert are prosecuting the case with the assistance of Elise Etter and Nina Burney. The prosecution is the result of an investigation by the Department of Homeland Security, Immigration and Customs Enforcement, United States Citizenship and Immigration Services, the United States Department of Labor, Internal Revenue Service - Criminal Investigation, and the United States Postal Inspection Service.
Former Russian Nuclear Energy Official Sentenced to Four Years in Prison for Money Laundering Conspiracy Involving Violations of the Foreign Corrupt Practices ActRead the Press Release
Greenbelt, Maryland - U.S. District Judge Theodore D. Chuang sentenced Vadim Mikerin, age 56, a Russian official residing in Chevy Chase, Maryland, today to four years in prison for conspiracy to commit money laundering in connection with his role in arranging over $2 million in corrupt payments to influence the awarding of contracts with the Russian state-owned nuclear energy corporation. Judge Chuang also entered an order requiring Mikerin to forfeit $2,126,622.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the U.S. Department of Justice Criminal Division; John R. Hartman, Deputy Inspector General for Investigations, Office of Inspector General at the U.S. Department of Energy; and Assistant Director in Charge Paul M. Abbate of the Federal Bureau of Investigation - Washington Field Office.
According to court documents, Mikerin was the director of the Pan American Department of JSC Techsnabexport (TENEX), a subsidiary of Russia’s State Atomic Energy Corporation and the sole supplier and exporter of Russian Federation uranium and uranium enrichment services to nuclear power companies worldwide, and the president of TENAM Corporation, a wholly owned subsidiary and the official representative of TENEX. Court documents show that between 2004 and October 2014, conspirators agreed to make corrupt payments to influence Mikerin and to secure improper business advantages for U.S. companies that did business with TENEX, in violation of the Foreign Corrupt Practices Act (FCPA). Mikerin admitted that he conspired with Daren Condrey, Boris Rubizhevsky and others to transmit approximately $2,126,622 from Maryland and elsewhere in the United States to offshore shell company bank accounts located in Cyprus, Latvia and Switzerland with the intent to promote the FCPA violations. Mikerin further admitted that the conspirators used consulting agreements and code words to disguise the corrupt payments.
Daren Condrey, 50, of Glenwood, Maryland, previously pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act (FCPA) and conspiring to commit wire fraud. Boris Rubizhevsky, 64, of Closter, New Jersey, has pleaded guilty to conspiracy to commit money laundering. Both are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the DOE-OIG and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys David I. Salem and Michael T. Packard, Special Assistant United States Attorney Meghan A. Leibold, and Trial Attorneys Christopher Cestaro, Ephraim Wernick, and Derek Ettinger of the U.S. Department of Justice Fraud Section, who prosecuted the case.
Former Russian Nuclear Energy Official Sentenced to 48 Months in Prison for Money Laundering Conspiracy Involving Foreign Corrupt Practices Act ViolationsRead the Press Release
U.S. Conspirators Paid More Than $2 Million to Influence Russian Nuclear Energy Official and to Secure Business with State-Owned Russian Nuclear Energy Company
A former Russian official residing in Maryland was sentenced today to 48 months in prison for conspiracy to commit money laundering in connection with his role in arranging more than $2 million in corrupt payments to influence the awarding of contracts with a Russian state-owned nuclear energy corporation.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland, Deputy Inspector General for Investigations John R. Hartman of the U.S. Department of Energy’s Office of Inspector General (DOE-OIG) and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
Vadim Mikerin, 56, of Chevy Chase, Maryland, was also ordered to forfeit $2,126,622.36 by U.S. District Judge Theodore D. Chuang of the District of Maryland.
According to court documents, Mikerin was the director of the Pan American Department of JSC Techsnabexport (TENEX), a subsidiary of Russia’s State Atomic Energy Corporation and the sole supplier and exporter of Russian Federation uranium and uranium enrichment services to nuclear power companies worldwide, and the president of TENAM Corporation, a wholly owned subsidiary and the official representative of TENEX. Court documents show that between 2004 and October 2014, conspirators agreed to make corrupt payments to influence Mikerin and to secure improper business advantages for U.S. companies that did business with TENEX, in violation of the Foreign Corrupt Practices Act (FCPA). Mikerin admitted that he conspired with Daren Condrey, Boris Rubizhevsky and others to transmit approximately $2,126,622 from Maryland and elsewhere in the United States to offshore shell company bank accounts located in Cyprus, Latvia and Switzerland with the intent to promote the FCPA violations. Mikerin further admitted that the conspirators used consulting agreements and code words to disguise the corrupt payments.
Condrey, 50, of Glenwood, Maryland, pleaded guilty on June 17, 2015, to conspiracy to violate the FCPA and conspiracy to commit wire fraud. Rubizhevsky, 64, of Closter, New Jersey, pleaded guilty on June 15, 2015, to conspiracy to commit money laundering. Condrey and Rubizhevsky await sentencing.
The DOE-OIG and FBI investigated the case. Trial Attorneys Christopher Cestaro, Ephraim Wernick and Derek Ettinger of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David I. Salem and Michael T. Packard and Special Assistant U.S. Attorney Meghan A. Leibold of the District of Maryland prosecuted the case.
Former Owner and Former Supervisor of “Direct Tax” Preparation Business Sentenced for Tax FraudRead the Press Release
ATLANTA - Jessica Hills and Kiisha Hills have been sentenced for their roles in a tax fraud scheme involving Direct Tax, a tax preparation business with three locations in the Atlanta-College Park area. Jessica Hills owned and operated Direct Tax, and her sister, Kiisha Hills, acted as a supervisor in one office.
“The Hills’ stole the identities of thousands of taxpayers and then used the information to steal millions of dollars from the U.S. Treasury by filing fraudulent tax returns,” said U. S. Attorney John Horn. “Sadly, these “false filing” schemes are now all too common. As we approach tax filing season, this case is a reminder that taxpayers should carefully guard their Social Security numbers and other sensitive personal information and monitor any tax filing made on their behalf.”
“Return Preparer fraud is a priority for IRS Criminal Investigation and we have committed many resources to investigating and prosecuting cases just like this one,” stated Veronica F. Hyman-Pillot, Special Agent in Charge. “It is our hope that today's sentencing will send a strong message to other return preparers that committing refund fraud is a crime and can result in jail time.”
“Using the Social Security number of another to commit fraud, unfortunately, has become a common occurrence”, said Margaret Moore-Jackson, Special Agent-in-Charge, Social Security Administration-Office of the Inspector General. “SSA-OIG special agents are well-trained to detect, investigate, and locate identity thieves,” and that her office, “will utilize collaborations between law enforcement agencies at all levels, and continue to present cases to the U.S. Attorney’s Office to prosecute those who commit identity theft and financial fraud.”
According to U.S. Attorney Horn, the charges and other information presented in court: During tax years 2012, 2013, and 2014, Direct Tax filed over 2,000 federal income tax returns, seeking millions of dollars in refunds. These returns included either fraudulent information designed to increase the refund amount, or were filed using stolen identities. Direct Tax not only continued to file fraudulent tax returns after College Park police executed a search warrant at the College Park location, it also filed fraudulent tax returns after the IRS canceled its electronic filing number and after Jessica L. Hills was detained on federal charges. In total, Direct Tax filed returns claiming over $4 million in tax refunds.
Jessica L. Hills, 30, of Atlanta, Georgia, was sentenced by U.S. District Judge Steve C. Jones to 12 years in federal prison, followed by three years supervised release, and ordered pay restitution in the amount of $954,756.00 to the IRS and $62,528.00 to Georgia Department of Revenue. Jessica L. Hills was convicted on these charges on August 25, 2015, after she pleaded guilty.
Kiisha Hills, 26, of Atlanta, Georgia, was also sentenced by U.S. District Judge Steve C. Jones to four years and three months in federal prison, followed by three years supervised release, and ordered to pay $346,850.00 in restitution to the IRS, and $9,248 to the Georgia Department of Revenue. Kiisha Hills was convicted on these charges on September 14, 2015, after she pleaded guilty.
This case was investigated by the Internal Revenue Service Criminal Investigation, Georgia Department of Revenue, Social Security Administration, and U.S. Secret Service.
Special Assistant United States Attorney Diane C. Schulman and Assistant United States Attorney Samir Kaushal prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Operative of Boston “Boiler Room” Convicted by Jury of Fraud and Conspiracy ChargesRead the Press Release
BOSTON – A former Boston resident was convicted yesterday in U.S. District Court in Boston in connection with his participation in a fraudulent “boiler room” operation that misled investors and caused over $4 million in losses.
Jonathan Fraiman, 36, was convicted following an 11-day trial of conspiracy to commit mail and wire fraud and mail fraud. U.S. District Court Judge F. Dennis Saylor, IV scheduled sentencing for March 10, 2015.
In December 2007, Fraiman joined Envit Capital LLC (Envit), a company which, with its various related entities, purported to invest in and manage a hedge fund and private equity funds. Envit was originally operated in Boston, and later opened an office in Boca Raton, Fla. Upon joining Envit, and through August 2009, Fraiman conspired with Envit’s CEO and Chairman, co-defendant Edward Laborio, to solicit investments, by, among other things, making fraudulent misrepresentations about the historical rate of return of certain Envit entities and falsely promising certain investors quarterly fixed dividends on their investments. As part of the scheme, Fraiman purported to act as some investors’ investment adviser, a position he exploited to convince his clients to invest monies, including retirement assets and trust monies, in Envit through bogus promises of guaranteed dividends and false assurances regarding the financial health of the company. As part of the conspiracy, Fraiman and Laborio periodically rolled out new Envit “offerings,” which invariably were based on deceptive representations about the company, to both existing and new investors in order to raise more funds for Envit, from which they both personally profited. Investors lost over $4 million through their investment in Envit and its related entities.
Laborio, who was also charged in the indictment, was a fugitive and was found deceased in Barcelona, Spain earlier this year.
The charging statutes each provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The U.S. Attorney’s Office also acknowledges the valuable assistance provided by the U.S. Securities and Exchange Commission, Boston Regional Office. The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis and Eric P. Christofferson of Ortiz’s Criminal Division.