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Friday 23 October 2015
United States Attorney’s Office Employees Receive Prestigous Anti-Defamation League AwardRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that the Anti-Defamation League (ADL), one of the Nation’s premier civil rights agencies, awarded the Raleigh-Durham Joint Terrorism Task Force and a federal prosecutor at the U.S. Attorney’s Office in Raleigh, the 2015 ADL Service, Honor, Integrity, Excellence, Leadership, and Dedication (SHIELD) Award for the investigation and prosecution of Erwin Antonio Rios. The award ceremony took place on October 13, 2015 in Washington, D.C. Rios intended to commit violent acts against innocent people in furtherance of this extremist doctrine of hate. He planned to wage violent jihad overseas and in the United States.
“This award encapsulates the idea that shared missions, attitudes, and dedication by prosecutors and investigative teams are harbingers of success, and most certainly worthy of recognition,” says USA Walker. “We are honored by this prestigious recognition.”
The National Security Section of the U.S. Attorney’s Office handled this case and in this instance specifically included the efforts of Assistant U.S. Attorney Jason Kellhofer and Intelligence Research Specialist Sarah Foster.
At the ceremony the ADL honored law enforcement heroes who have protected our nation and communities from hate crimes and terrorist threats. The SHIELD award was created in 2010 to annually honor law enforcement for major successes in the fight against hate crimes and domestic and international terrorism. The Award’s name reflects law enforcement’s role as protectors, and is also an acronym for the core values of the profession: Service, Honor, Integrity, Excellence, Leadership, and Dedication.
Kellhofer and Foster, along with many other federal and local law enforcement agents, analysts, and attorneys assisted in the investigation of the case. The award was given for their dedication and extraordinary competence in the investigation and successful prosecution of Erwin Antonio Rios of Fayetteville, North Carolina.
Rios is a self-proclaimed adherent to the extremist views propogated by extremist terrorist groups. Rios desired to travel overseas in order to further what he termed “jihad” and expressly defined as various forms of violence against those he determined to be non-believers – to include U.S. forces. In order to obtain the funds necessary for such travel, Rios devised a scheme to commit violent robberies within North Carolina. He intended to leave no witnesses alive in order to better secure success. As an initial step, Rios sought out a firearm and expressed willingness to purchase a stolen hand gun. The FBI subsequently provided Rios with the opportunity to purchase a purportedly stolen hand gun through a confidential informant. On February 7, 2013, Rios eagerly provided the funds for purchase of a weapon he believed to be stolen and was immediately taken into custody. Rios subsequently plead guilty to knowing possession of a stolen firearm in violation of 18 U.S.C. § 922(j) and to having sought to accomplish the crime in order to further terrorist activity. On October 8, 2013, in the Eastern District of North Carolina, Senior District Judge Howard sentenced Erwin Antonio Rios to ten years’ imprisonment followed by three years of supervised release.
Union County, New Jersey, Youth Organization Leader Admits Sexually Abusing Children, Possessing Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Linden, New Jersey, man who was a leader in a boys’ youth organization and a religious education teacher today admitted sexually abusing children and possessing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Gregory J. Aker, 46, pleaded guilty before U.S. District Judge Susan G. Wigenton in Newark federal court to an information charging him with possession of child pornography. He is currently in state custody.
According to the documents filed and statements made in court:
Aker was a leader with a boys’ youth organization and a religious education teacher with his church. On Feb. 22, 2014, Aker was arrested by the Linden Police Department for sexual assault and endangering the welfare of two minor children.
After his arrest, law enforcement obtained multiple computers and electronic storage media from Aker’s residence. Today, Aker admitted that the devices belonged to him and contained more than 600 images and dozens of videos of child sexual abuse that he knowingly collected. Aker also admitted sexually abusing more than one child who was known to him on more than one occasion.
The charge of possession of child pornography carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Aker will be required to register as a sex offender. Sentencing is scheduled for Feb. 23, 2016.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, the New Jersey Regional Computer Forensics Laboratory, the Union County Prosecutor’s Office and the Linden Police Department with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Criminal Division in Newark.
Defense counsel: Jeffrey Hark Esq., Cherry Hill, New Jersey
U.S. Attorney Nicholas A. Klinefeldt to Step DownRead the Press Release
DES MOINES, IA—Nicholas A. Klinefeldt announced today that he will step
down as the United States Attorney for the Southern District of Iowa, effective November
15, 2015. After leaving office, Mr. Klinefeldt will become a partner in the Des Moines
office of an international law firm.
“Serving as United States Attorney for the Southern District of Iowa has been the
greatest honor and privilege of my career,” United States Attorney Klinefeldt said today.
“I am grateful for the trust placed in me by President Obama and appreciate the
opportunity I have had to work with Attorneys General Holder and Lynch and the other
dedicated professionals across the Department of Justice. I have been inspired by the
ongoing commitment to justice displayed by the lawyers and staff in the Southern District
of Iowa. They work hard every day to protect the communities across Iowa, and
vigorously represent the United States.”
On September 25, 2009, President Barack Obama nominated Mr. Klinefeldt to be
the United States Attorney for the Southern District of Iowa. The United States Senate
unanimously confirmed his nomination on November 21, 2009, and he was sworn into
office on November 25, 2009. Prior to his appointment as United States Attorney, Mr.
Klinefeldt practiced white collar criminal defense in Boston, Massachusetts, and then
both civil and criminal law in Des Moines, Iowa. Mr. Klinefeldt received his B.A. with
honors and his J.D. with distinction from the University of Iowa. He clerked for U.S.
District Court Judge Robert W. Pratt of the Southern District of Iowa and Chief Justice
Christopher J. Armstrong and Justice Benjamin Kaplan of the Massachusetts Appeals
Court.
As United States Attorney, Mr. Klinefeldt has been a member of the Attorney
General’s Advisory Subcommittee on White Collar Crime and co-chair of the Attorney
General’s Advisory Subcommittee on Criminal Practice. As co-chair of the
Subcommittee on Criminal Practice, United States Attorney Klinefeldt worked with other
leaders in the Department of Justice, on a national basis, to update and expand discovery
policies to ensure defendants receive all of the information they need to adequately
defend themselves, and revamp sentencing practices to ensure the end result of a
prosecution is fair.
Locally, United States Attorney Klinefeldt developed a comprehensive discovery
policy for the Southern District of Iowa that ensures criminal defendants receive even
more information about the case against them than is required by the rules and that they
receive it quickly. This policy included the development of a Stipulated Discovery and
Protective Order that is now universally used in all criminal cases across the district.
United States Attorney Klinefeldt also changed the way the office utilized mandatory
minimum sentences, to ensure that they were only used when absolutely necessary.
As United States Attorney, Mr. Klinefeldt has served as the chief federal law
enforcement officer for the Southern District of Iowa. He has taken great pride in the
relationships he and the office have developed with their federal, state, and local law
enforcement partners. United States Attorney Klinefeldt emphasized and expanded white
collar crime enforcement in the Southern District of Iowa. Under United States Attorney
Klinefeldt’s leadership, the office also brought two major civil rights cases against Des
Moines Police Officers for excessive force.
Mr. Klinefeldt’s leadership of the United States Attorney’s Office included not
only being extensively involved in each of the cases brought by his office, but also
personally handling and trying to juries several prosecutions himself.
The Southern District of Iowa covers 47 of Iowa’s 99 counties, and includes
Council Bluffs, Des Moines, Ames, Iowa City, Davenport, and Burlington. The United
States Attorney’s Office, with staffed offices in Council Bluffs, Des Moines, and
Davenport, has 26 Assistant United States Attorneys and is responsible for conducting all
criminal and civil litigation in the district involving the United States government.
Two Denver Area Gang Members Receive Prison Sentences for Firearm and Drug CrimesRead the Press Release
DENVER – Two individuals who are self-proclaimed gang members have been sentenced by federal judges to lengthy prison sentences for gun and drug crimes, U.S. Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Ken Croke announced. The defendants, whose cases are unrelated, Jonathan Fricks, age 35, and Jesse Garis, age 32, both of Metro Denver, were prior felons caught with guns and drugs, as well as drug distribution paraphernalia.
Defendant Jesse Dale Garis was sentenced to 120 months (10 years) in federal prison, followed by 3 years on supervised release by U.S. District Court Judge John L. Kane. Garis was indicted by a federal grand jury on February 25, 2014. He pled guilty before Judge Kane to possession of a firearm by a previously convicted felon and possession of a firearm in furtherance of a drug trafficking crime on June 15, 2015. He was sentenced on September 10, 2015.
According to court documents, including the stipulated facts contained in the plea agreement, on January 30, 2014, Garis was arrested by the Aurora Police Department for possession of a weapon by a previous offender. Garis was a suspect in the theft of a police computer taken from inside a marked police car while parked at an automobile dealership for service. Police located the defendant inside his vehicle outside his residence as he was observed doing a narcotic transaction involving the sale of methamphetamine. When police officers contacted Garis, he had a SKS rifle in his immediate possession, located along his leg of the driver’s seat. Garis was placed under arrest. In addition to the SKS, officers located a rifle magazine that contained 25 rounds of 7.62 ammunition. They also found 7.36 grams of methamphetamine. The defendant was a self-admitted member of the 211 Crew/Aryan Empire prison gang, and was on federal probation for a conviction for previously possessing a firearm by a convicted felon. He had three additional felony convictions in the state of Colorado. The SKS Garis possessed was to further his drug trafficking.
Defendant Jonathan Thomas Fricks was sentenced to 170 months (just over 14 years) in federal prison followed by 4 years on supervised release by U.S. District Court Judge Christine M. Arguello. Fricks was indicted by a federal grand jury in Denver on December 16, 2014. He pled guilty to possession of methamphetamine with intent to distribute and possession of a firearm in furtherance of a drug trafficking crime on June 8, 2015. Fricks was sentenced by Judge Arguello on September 22, 2015.
According to court documents, including the stipulated facts contained in the plea agreement, between August 15, 2014, the defendant and a woman were observed driving from a Denver motel to a fast food restaurant and then to a grocery store in Edgewater. The defendant, who was in the passenger seat when the car was being driven, was arrested in the grocery store by a Community Parole Officer. Upon his arrest, officers found $3,755 in cash in the defendant’s pants pocket. Officers then searched the car the defendant rode in. They noticed an unzipped black and white bag with a loaded magazine to a firearm showing in the butt of a gun. Upon discovering the firearm, the Community Parole Officer called the ATF for assistance. A full search of the car by ATF agents revealed a 9mm pistol loaded and chambered with seventeen rounds; a second magazine containing five rounds of ammunition; three baggies containing 47 grams of methamphetamine, a small digital scale with meth reside, a large digital scale with met reside, and an obscene photograph showing the defendant’s private part with the firearm in view. The defendant knowingly possessed 47 grams of 95 percent pure methamphetamine. He carried the 9mm pistol in furtherance of his drug trafficking crime. It was determined that Fricks was a documented member of the Oldies 13 Gang and has “Oldies 13” tattooed on his back.
“Local law enforcement, ATF and federal prosecutors have again teamed up to send gang members with guns and drugs to federal prison,” said U.S. Attorney John Walsh. “By focusing on those who traffic drugs while carrying a firearm with lengthy criminal histories, we are focusing on removing those who cause the most harm from our streets.”
“These sentencings, along with others, demonstrate the commitment of law enforcement in Colorado to investigate and prosecute violent criminals and keep them in prison for as long as possible,” said ATF Denver Division Special Agent in Charge Ken Croke.
The Garis case was investigated by the Aurora Police Department. The Fricks case was investigated by the Denver Police Department. The ATF was involved in both investigations.
Garis was prosecuted by Assistant U.S. Attorney Jeremy Sibert. Fricks was prosecuted by Assistant U.S. Attorney Peter McNeilly.
Two California Men Charged with Conspiracy to Distribute Five Pounds of MethamphetamineRead the Press Release
NEWARK, N.J. – Two California men were charged today with conspiracy to distribute methamphetamine, U.S. Attorney Paul J. Fishman announced.
Rigoberto Sandoval-Varela, 30, of Stockton, California, and Mario I. Zavala-Rodriguez, 34, of Palo Alto, California, were charged by complaint with one count of conspiracy to possess methamphetamine with intent to distribute. Sandoval-Varela and Zavala-Rodriguez were arrested in Ontario, California, on Oct. 22, 2015, following an undercover law enforcement investigation. They are scheduled to make their initial court appearances later today in Los Angeles federal court.
According to the complaint:
Earlier this month, an undercover Drug Enforcement Administration (DEA) special agent in New Jersey negotiated with Sandoval-Varela via text message and telephone the purchase of a large quantity of narcotics to be brought from California to New Jersey. Another undercover law enforcement agent later met with Sandoval-Varela and Zavala-Rodriguez on Oct. 21, 2015, in California to conclude the deal. The defendants agreed to provide the undercover agent with large quantities of methamphetamine, heroin, and cocaine in exchange for approximately $765,000. The defendants met with the undercover agent the next day and displayed approximately five pounds of methamphetamine. The defendants fled the scene on foot as other agents approached and were quickly apprehended.
The conspiracy with which both defendants are charged is punishable by a maximum potential penalty of life in prison.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski in Newark, the DEA’s Los Angeles Field Office and the State of California Department of Justice, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Criminal Division in Newark.
Two Buffalo Men Arrested, Charged with Gun and 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 Jay Neal, 37, and Quashawn Lawrence, 25, both of Buffalo, NY, were arrested and charged by criminal complaint with conspiracy to possess with intent to distribute 100 grams or more heroin and possession of a firearm in furtherance of drug trafficking activity. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of 45 years, and a $5,000,000. In addition, defendant Neal is charged with being a felon in possession of a firearm. That charges carries a maximum penalty of 10 years in prison.Assistant U.S. Attorneys Thomas S. Duszkiewicz and Michael J. Adler, who are handling the case, stated that according to the complaint, on October 20, 2015, Neal sold a quantity of heroin. The following day, on October 21, 2015, Neal once again agreed to sell a quantity of heroin. The defendant left the meeting location and drove to the vicinity of Dodge St. and Michigan Ave. where a man later identified as defendant Lawrence exited a residence with a tan back pack and entered Neal’s vehicle.
Neal then drove to a residence at 87 Mariner St. in Buffalo. About an hour later, Neal and Lawrence were arrested by police. At the time of his arrest, Neal was armed with a 9mm handgun and had $10,000 in United States currency. Lawrence was in possession of a quantity of crack cocaine. A search warrant executed inside 87 Mariner recovered a gun inside Lawrence’s tan back pack, and another gun, ammunition and 10 grams of heroin inside a dresser drawer.
The defendants made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder. They are due back in court on October 29, 2015 at 11:00 a.m.The criminal 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, and the Erie County Sheriff’s Department, under the direction of Timothy Howard.
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.
Twin Cities Carpet Cleaner Sentenced to 21 Months in Prison After Pleading Guilty to Tax EvasionRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of JAMES SIGANOS, 50, to 21 months in prison. SIGANOS was charged on May 26, 2015, by felony information, of evading corporate income taxes. He pleaded guilty on June 11, 2015, before U.S. District Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn. In addition to the 21 month prison sentence, SIGANOS was also ordered to pay $300,619 in restitution.
“This defendant took affirmative steps to hide his business income from the government,” said Assistant United States Attorney Joseph H. Thompson. “But the Criminal Investigation Division of the IRS noticed and stopped Mr. Siganos from continuing to engage in his willful criminal conduct.”
According to his guilty plea and documents filed in court, SIGANOS was the owner of a carpet-cleaning business located in Mound, Minnesota. As owner of the company, the defendant was responsible for filing federal corporate tax returns on behalf of the company. SIGANOS filed a Form 1120S U.S. Income Tax Return for the calendar year 2009, in which he underreported his company’s gross receipts or sales as $246,166.
In 2009, SIGANOS’ company had approximately $591,013 in gross receipts or sales. To avoid paying taxes on the full amount of his company’s revenue, SIGANOS cashed more than 1,400 checks totaling approximately $410,905 at a check cashing facility in Minneapolis. The result was that the defendant underreported his 2009 income by approximately $344,858. SIGANOS filed no corporate income tax returns for the tax years 2010, 2011, and 2012, resulting in an underreporting of approximately $438,991. The total tax loss caused by SIGANOS is approximately $300,000.
This case was the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division.
This was prosecuted by Assistant U.S. Attorney Joseph H. Thompson.
Defendant Information:JAMES SIGANOS, 50
Mound, Minn.Convicted:
• Tax Evasion, 1 countSentenced:
• 21 months in prison
• $300,619 in restitutionTroy Man Sentenced to 20 Years in Prison for Production of Child Pornography and Coercion and Enticement of a MinorRead the Press Release
DAYTON – Michael Epley, 30, of Troy was sentenced to concurrent prison terms of 240 months each on one count of production of child pornography and one count of coercing and enticing a minor to engage in sexually explicit conduct.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers Special Agent in Charge, Federal Bureau of Investigation (FBI), and Troy Police Chief Charles C. Phelps, announced the sentence imposed yesterday by United States District Judge Timothy S. Black.
Epley was indicted in February 2015 on two federal charges of committing sexual acts with children. He pleaded guilty in April 2015 to photographing himself sexually abusing a four-year-old female in 2014 and to inducing a 13-year-old female to engage in sexual activity with him after exchanging conversations and sexually explicit pictures with her over the internet between November 2013 and July 2014. Epley has two previous convictions in 2013 and 2014 involving minor children in Troy, Ohio and is currently serving a state prison sentence for the latter conviction.
Epley will be on supervised release for the rest of his life after serving his federal prison term.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Stewart commended the investigation of this case by FBI agents and Troy Police investigators, and Assistant United States Attorney Kyle Healey, who prosecuted the case.
The Office for Victims of Crime Awards $2.1 Million to Support Victims of the Marysville-Pilchuck School ShootingRead the Press Release
WASHINGTON—The U.S. Department of Justice’s Office for Victims of Crime (OVC) announced a $2,145,327 Antiterrorism and Emergency Assistance Program (AEAP) grant to organizations providing support for the victims, witnesses and first responders involved in the events surrounding the shootings at the Marysville-Pilchuck High School in October 2014.
“OVC is committed to promoting healing and justice for victims of crime,” said Acting OVC Director Marilyn McCoy Roberts. “We recognize the enormous physical and emotional toll the Marysville-Pilchuck High School shooting has had on the surrounding Marysville community including the local Middle School, the affected High School and the Tulalip Tribes. This award will ensure that Marysville, the Tulalip Tribes and the State of Washington can provide critical support to victims and their families as they continue to heal.”
On October 24, 2014, a ninth grade student at Marysville Pilchuck High School, and member of the nearby Tulalip Tribes, shot five students in the school cafeteria before taking his own life. Ultimately only one of the shooting victims survived.
"Though a year has passed, the pain and deep sorrow surrounding the shooting at Marysville-Pilchuck High School remains," said U.S. Attorney Annette L. Hayes for the Western District of Washington. "These funds will provide critical services to those whose lives are forever changed, and will further support the Marysville-Pilchuck school community as it works to rebuild its sense of safety."
This award to the Washington State Department of Commerce, Office of Crime Victims Advocacy, will support crisis response and consequence management service costs, both incurred and anticipated, for organizations providing crisis intervention services and trauma-informed care, continuum of care and other assistance essential to victim healing.
In 1995, following the Oklahoma City bombing, Congress authorized OVC to set aside and administer up to $50 million annually from the Crime Victims Fund for the Antiterrorism Emergency Reserve Fund to assist victims in extraordinary circumstances. Following an act of terrorism or mass violence, jurisdictions can apply for an AEAP grant award for crisis response, criminal justice support, crime victim compensation, and training and technical assistance expenses. OVC also provided AEAP funds and assistance following the mass violence incidents in Boston, Massachusetts (2013); Newtown, Connecticut (2012); Oak Creek, Wisconsin (2012); Aurora, Colorado (2012); Tucson, Arizona. (2011); Binghamton, New York (2009); at the Virginia Polytechnic Institute and State University (2007); and the Minnesota Department of Public Safety on behalf of the Red Lake Nation (2005).
For more information on the AEAP program, please visit
http://ojp.gov/ovc/AEAP/index.html.
About the Office of Justice Programs (OJP)
OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at www.ojp.gov.
Texan Pleads Guilty in Designer Drug Case in KansasRead the Press Release
TOPEKA, KAN. – A Texas man pleaded guilty Friday to selling designer drugs manufactured in Kansas, U.S. Attorney Barry Grissom said.
Michael Myers, 36, Montgomery Texas, pleaded guilty to one count of conspiracy to possess with intent to distribute controlled substances and one count of conspiracy to commit mail fraud.
Myers was indicted in April 2014 along with co-defendants Tracy Picanso and Roy Ehrett, the owners of an Olathe-based business that produced and sold dangerous controlled substances and controlled substance analogs of THC (the active ingredient in marijuana) and methcathinones (stimulants). Picanso and Ehrett are scheduled for sentencing April 18, 2016.
Picanso and Ehrett sold products to distributors under names including Pump It, Head Trip, Black Arts, Grave Digger, Voodoo Doll and Lights Out. Some of the counterfeit drugs were manufactured in buckets with drill-powered immersion mixers and tried out on “testers” who helped tweak the recipes.
Myers and co-defendant Michelle Reulet lived together in Houston, Texas, and owned and operated Bully Wholesale, an independent wholesaler and distributor of products purchased from Picanso and Ehrett.
Ehrett routinely traveled from Kansas City to Houston to pick up cash from Reulet and Myers. On at least two occasions Myers met Ehrett in Oklahoma to transfer in excess of $100,000 cash to him. Investigators collected emails and text messages exchanged among the defendants. In an October 2011 email, for instance, Myers claimed the fake weed he was selling would not show up on a drug test. In a January 2012 email to Ehrett, Myers says he and Reulet were buying $600,000 to $900,000 worth of products each month from Ehrett and Picanso.
Sentencing is set for Jan. 25, 2016. Both parties have agreed to recommend a sentence of seven years in federal prison and a civil forfeiture of more than $1.3 million.
Grissom commended the Drug Enforcement Administration, the Food and Drug Administration – Office of Criminal Investigations, the Department of Homeland Security, Homeland Security Investigations, Customs and Border Protection, the FBI, the Overland Park Police Department, the Johnson County Sheriff’s Office, the Olathe Police Department, the St. Joseph Police Department and the Buchanan County Drug Strike Force, Assistant U.S. Attorney Tanya Treadway and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Tampa Man Pleads Guilty to Manufacturing Counterfeit Federal Reserve NotesRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Darius Jondi Edwards (35, Tampa) has pleaded guilty to manufacturing counterfeit Federal Reserve notes. A sentencing date has not yet been set.
According to the plea agreement, in November and December 2014, Edwards used computer media to manufacture counterfeit Federal Reserve notes in denominations of $10, $20, and $100, then provided them to his co-defendant, Timothy Deante Burroughs. During the same period, Burroughs and Edwards entered various businesses in Jacksonville and passed counterfeit $100 bills. On December 1, 2014, Burroughs entered a Publix and passed counterfeit bills. Upon being confronted by store employees, he fled the store on foot. The Jacksonville Sheriff’s Office soon located Burroughs at a nearby motel and detained him. A search of the motel room resulted in the recovery of additional counterfeit $100 bills and led law enforcement to another motel in the immediate vicinity.
At the second location, law enforcement encountered Edwards in front of a motel room. During a search of Edwards’s room, officers located sheets of uncut counterfeit $100, $20, $10, $1 bills, along with several bleached genuine $10 bills printed as counterfeit $100 notes. They also recovered multiple computers and printers being used by Edwards to manufacture counterfeit currency.
On October 20, 2015, Burroughs (32, Jacksonville) was sentenced to 21 months in federal prison for passing counterfeit notes.
This case was investigated by the Jacksonville Sheriff’s Office and the United States Secret Service, Jacksonville Field Office. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
Spokane Woman Sentenced to 120 Days of Home Confinement and One Year Court Supervision for Bankruptcy FraudRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Michele R. Saldua, age 60, was sentenced today for the crime of making a false declaration under penalty of perjury in relation to a bankruptcy case. Ms. Saldua was a resident of Spokane, Washington but now resides in Arizona. Senior United States District Judge Wm. Fremming Nielsen, sentenced Michele R. Saldua to 120 days of home confinement, followed by a 1-year term of court supervision.
According to information disclosed during court proceedings, in October 2010, while residing in Spokane, Washington, Ms. Saldua filed a petition for Chapter 7 bankruptcy relief in the United States Bankruptcy Court for the Eastern District of Washington. Ms. Saldua signed the Chapter 7 petition under the penalty of perjury, and sought to discharge a $22,782 debt from several creditors. Ms. Saldua also filed schedules of assets and liabilities and a Statement of Financial Affairs (“SOFA”), signed under the penalty of perjury. On line 2 of her SOFA, Ms. Saldua was required to truthfully declare the amount of income, other than from employment, trade, profession, or operation of the debtor’s business she received during the two years immediately preceding the commencement of her bankruptcy case. In August, 2010, Ms. Saldua received $108,400 in income as part of a divorce settlement from her ex-husband’s ING IRA/Deferred Variable Annuity pursuant to a divorce decree entered in their divorce proceeding in Hawaii. Ms. Saldua did not report this income on her SOFA and concealed it from the United States Bankruptcy Court for the Eastern District of Washington and the United States Trustee.
In March 2012, the bankruptcy court entered a default judgment denying Ms. Saldua a discharge of her debts.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, "Bankruptcy fraud undermines the whole concept of allowing a debtor to obtain protection from creditors, pay debts in accord with a debtor’s ability, and thereby obtain a fresh start. Concealment of a debtor’s property is a fraud on the entirety of the proceeding.”
The investigation was conducted by the Internal Revenue Service, Criminal Investigation. The case was prosecuted by George J.C. Jacobs, III, Assistant United States Attorney for the Eastern District of Washington.
Seven-Year Prison Sentence for Shasta-Trinity National Forest Marijuana CultivatorRead the Press Release
SACRAMENTO, Calif. — Arturo Alcazar-Tapia, 22, of Eureka, was sentenced today to seven years and three months in prison and ordered to pay $17,000 in restitution for conspiring to manufacture and possess with intent to distribute marijuana and for depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, Arturo Alcazar-Tapia and his brother, Isidro Alcazar‑Tapia, 26, of Eureka, conspired to grow more than 20,000 marijuana plants at two sites in the Shasta-Trinity National Forest in Trinity County. The marijuana was packaged for distribution at a house in Eureka. On August 4, 2014, law enforcement executed a search warrant at the defendants’ home in Eureka and found 33 pounds of processed marijuana divided into one-pound packages and more than $6,000 in cash. At a cultivation site at Big French Creek, agents located and destroyed approximately 7,980 marijuana plants and arrested co‑defendant Ricky Martin Huerta, 21, of Eureka. At a site at Hobo Gulch Road, agents located and destroyed approximately 13,642 marijuana plants. The marijuana cultivation caused significant damage to the land and natural resources of the forest that provides habitat for several threatened and endangered animal species.
At the Big French Creek site, agents observed hundreds of holes dug in the dirt containing soluble fertilizer, bags of trash, empty fertilizer bags, propane tanks, and water lines diverting water from a stream into the marijuana garden. Analysts estimate that cleaning the Big French Creek site will cost the U.S. Forest Service more than $4,000. Agents observed similar destruction at the Hobo Gulch Road site. Analysts estimate that cleaning the Hobo Gulch Road site will cost the U.S. Forest Service approximately $13,000.
All three defendants pleaded guilty in January 2015. On June 16, 2015, Judge Garland E. Burrell Jr. sentenced Ricky Martin Huerta to two years and eight months in prison, and on August 7, 2015, Judge Burrell sentenced Isidro Alcazar-Tapia to 87 months in prison and ordered restitution of $17,000. A fourth defendant, Victor Manuel Alvarez‑Contreras is currently a fugitive.
This case was the product of an investigation by the U.S. Forest Service, the Humboldt County Drug Task Force, the North State Marijuana Team, and the Trinity County Sheriff’s Office. Assistant United States Attorney Christiaan Highsmith prosecuted the case.
Roseville Podiatrist Pleads Guilty to $1 Million Health Care Fraud SchemeRead the Press Release
SACRAMENTO, Calif. —Neil A. Van Dyck, 64, of Roseville, pleaded guilty today to health care fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Van Dyck was a California-licensed podiatrist who operated a podiatry practice in Roseville called Placer Podiatry. Van Dyck offered “spa”-like treatments and performed routine foot care at his practice. Between 2009 and 2014, however, Van Dyck submitted over $2.8 million in fraudulent claims for reimbursement to Medicare, Medi-Cal, Tricare and private insurers. He falsely claimed that he performed more expensive procedures than he actually performed, or that the routine foot care that was provided was justified because of illness or symptoms that were not present. Often times the treatments were performed by unlicensed staff sometimes when Van Dyck was not present at his practice. Additionally, Van Dyck altered a single-use skincare patch by cutting it into pieces and billed Medicare for multiple applications. In response to a request for documents from an investigator for Medicare, Van Dyck altered patients’ medical records to justify his fraudulent bills. Medicare, Medi-Cal, Tricare, and the private insurers paid Van Dyck over $1 million for his fraudulent claims.
“Providers overbilling and charging for phantom treatments are picking the pockets of taxpayers and assaulting government health program integrity,” said Gerald T. Roy, Special Agent in Charge, Office of Inspector General for the U.S. Department of Health and Human Services. “Working in close coordination with our law enforcement partners we will tirelessly investigate and bring these criminals to justice.”
“Dr. Van Dyck engaged in health care fraud schemes designed to financially benefit himself without regard for the impact his actions had on his patients,” said Supervisory Special Agent David Hanzal of the FBI’s Sacramento field office. “He fraudulently billed health insurance programs and compromised the integrity of Medicare billing and medical history records of patients, potentially impacting the affected patients’ future medical benefits. The FBI, in coordination with our law enforcement partners, continues to investigate providers who prey on unsuspecting patients and defraud public and private health insurance programs.”
This case is the product of an investigation by the Office of Inspector General for the U.S. Department of Health and Human Services and the Federal Bureau of Investigation. Assistant United States Attorney Todd A. Pickles is prosecuting the case.
Van Dyck is scheduled to be sentenced by Judge Garland E. Burrell Jr. on January 15, 2016. Van Dyck faces a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the loss or gain. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Plantation Resident Sentenced to 7 Years in Prison for Identity Theft Tax Fraud SchemeRead the Press Release
A Broward County resident was sentenced to 84 months in prison, followed by three years of supervised release for an identity theft fraud scheme involving 734 unauthorized tax returns.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Keyiona Marvette Wright, 27, of Plantation, Florida, previously pled guilty to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
According to court documents, from March 25, 2014 to May 6, 2015, forty-six federal tax returns were filed with the IRS claiming refunds of $135,196 from an IP address in Plantation. From September 16, 2014 to May 5, 2015, at least 688 rejected federal tax returns, claiming refunds of $733,276, were electronically transmitted to the IRS from this same IP address. Agents confirmed that the IP address was assigned to an apartment rented by Wright.
Based on this information, agents executed a search warrant at Wright’s residence and found four notebooks containing PII, two computers (one of which had numerous Social Security numbers and other personal identification information (PII) displayed on the screen), a bag and suitcase each containing thousands of PII in paper form, multiple pre-paid/value cards and gift cards, hundreds of documents containing PII (including Department of Labor applications), and papers containing PII scattered throughout the apartment. A forensic analysis revealed that the documents, computers, and debit/credit cards seized from Wright’s residence contained identifying or account information for over 14,000 individuals.
Court documents also indicate that agents found a laptop computer outside Wright’s apartment that contained a video depicting the defendant counting money.
Mr. Ferrer commended the investigative efforts of the IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Cynthia Wood.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Physician Sentenced to Three Years’ Probation also Surrenders Medical License and DEA Controlled Substances License for Two YearsRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Peter Wisniewski, age 52, of Huntingtown, Maryland, a physician in a Calvert County medical group, today to three years of probation for writing prescriptions for Oxycodone and Adderall in the names of three of his patients that he then kept for his own use. Judge Grimm also ordered Wisniewski to pay a fine of $40,000, which Wisniewski paid at today’s sentencing hearing.
As required in his plea agreement, Wisniewski voluntarily surrendered his DEA controlled substances license and agreed that he would not practice medicine for at least two years.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; and Calvert County Sheriff Mike Evans.
According to his plea agreement, between March 2012 and April 2015, Wisniewski wrote prescriptions for Oxycodone and Adderall in the names of three elderly patients but kept the drugs for himself. Wisniewski caused the pharmacy to fill the prescriptions, and he picked up the prescriptions without the knowledge or authorization of the patients in whose names he had written the prescriptions. Wisniewski falsely represented to the pharmacy that as the prescribing physician he was collecting the prescriptions in order to deliver them to his elderly patients.
To conceal the scheme, Wisniewski created false entries in the medical files of the three patients in whose names he was writing the prescriptions. During the scheme Wisniewski obtained more than 8,000 Oxycodone pills written in the names of those three patients.
The decision whether to allow Wisniewski to practice medicine at all in the future will ultimately be made by the state medical board.
United States Attorney Rod J. Rosenstein commended the Department of Health and Human Services Office of Inspector General and the Calvert County Sheriff’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leah J. Bressack and Lindsay Eyler Kaplan, who prosecuted the case.
Painting Contractor Sentenced to Prison for Filing False Tax ReturnsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that RONALD S. BATTAGLIA, 66, of Stratford, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 30 days of imprisonment and one year of supervised release for filing false tax returns.
According to court documents and statements made in court, BATTAGLIA is the sole owner of Custom Painting, which provides interior and exterior painting services primarily in Fairfield County. During the 2008 through 2012 tax years, BATTAGLIA failed to provide his tax return preparer with information concerning an additional $867,656 in gross receipts he received in those years. The total tax reported as due on the five returns was $46,687, but BATTAGLIA willfully failed to report and pay an additional $277,582 in federal income taxes for those five years.
The investigation revealed that BATTAGLIA’s clients typically paid him by check. BATTAGLIA then cashed the checks at his bank and received currency for the full value of the check, or he made a split deposit, receiving some cash and depositing the balance into his business account. The amounts of the transactions were typically less than $10,000.
On July 20, 2015, BATTAGLIA pleaded guilty to one count of filing a false tax return.
BATTAGLIA has repaid the IRS $277,582 in restitution. He is still required to pay more than $250,000 in penalties and interest that have accrued on his unpaid taxes.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.
Operation ‘Fright Night’ Targets Cosmetic Contact Lenses that are Illegally Sold without a Prescription and Pose Risk to EyesightRead the Press Release
LOS ANGELES – The owners and operators of 10 Southern California businesses were charged today in federal court with illegally selling cosmetic contact lenses without prescriptions. Some of the products that were purchased in connection with this investigation were contaminated with dangerous pathogens that can cause eye injury, blindness and loss of the eye.
The 10 criminal informations filed late this afternoon charge the store operators with selling “misbranded” contact lenses because they were sold without prescriptions. The products that were allegedly illegally sold were marketed as Halloween and beauty accessories under names such as Wonder Look, Red Rose, Black & White, Beauty World and Crazy Eagle.
“Contact lenses that fit the eye poorly could cause eye damage, including scratches on the cornea, corneal infection, conjunctivitis, decreased vision and blindness,” according to the charging documents. “Under California law, a California resident retailer could only sell and/or dispense contact lenses if the retailer was a licensed physician or surgeon, licensed optometrist, registered dispensing optician, or a pharmacist.”
“These products pose a serious danger to unsuspecting Halloween shoppers, and those who have already purchased these products should not use them,” said United States Attorney Eileen M. Decker. “As required by the law, contact lenses should be used only when they are prescribed by a knowledgeable medical professional.”
The cases filed this week are the result of Operation “Fright Night,” which targeted retail stores – some of which were selling Halloween costumes and accessories – that sold cosmetic and decorative contact lenses without a prescription to unsuspecting consumers in Southern California.
The investigation was conducted by the United States Food and Drug Administration’s (FDA’s) Import Operations Branch of the Los Angeles District Office; the FDA’s Office of Criminal Investigations; the California Department of Public Health; and the California Department of Consumer Affairs’ Division of Investigation, Health Quality Investigation Unit.
“Consumers rely on FDA oversight to ensure the safety of their contact lenses. Buying decorative or ‘fashion’ contact lenses without a valid prescription puts consumers’ health – and their vision – at risk,” said George M. Karavetsos, director, FDA Office of Criminal Investigations. “The FDA is committed to working with our law enforcement partners to keep such products out of the U.S. marketplace.”
Contact lenses – whether corrective, cosmetic or decorative – are considered to be prescription medical devices subject to FDA regulations. Due to the risk of injury, blindness and possible eye infection, all contact lenses require prescriptions from medical professionals who can provide guidance on the proper care and maintenance of the contact lenses.
“This joint operation is important because wearing these decorative lenses is dangerous and can cause serious injury, which potentially can result in blindness or the loss of an eye if they are not properly prescribed by a licensed eye care professional,” said Dr. Karen Smith, the director of the California Department of Public Health and the state public health officer. “Those who sell these lenses without obtaining a prescription put people at risk. Operation Fright Night is a great example of our joint commitment to protect public health from the risk of eye-related illness and injury from these prescription medical devices.”
Cassandra Hockenson, the spokesperson for the Medical Board of California, stated: “The Medical Board of California’s primary mission is consumer protection, and it is imperative to get the word out to the public on the dangers of selling contact lenses without a proper prescription from a licensed medical professional.”
The 10 cases filed this week in United States District Court in Los Angeles charge these defendants:
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Arianna Beauty, Inc., which is located on Santee Street in downtown Los Angeles, and its owner, Farshid Ben Cohen, 53, of Los Angeles;
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Alex Mario Collantes Marxelly, 40, of San Bernardino, the owner of Zebra Accessories in San Bernardino;
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Kathy Hwang, 51, of Chino Hills, doing business as Fashion 20 in La Puente;
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Hollywood Toys & Costumes, Inc. in Hollywood, and the store’s owner, Rezvan Moazzez, also known as Ron Moazzez, 69, of Encino;
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Sin Young Yi, 59, of Chino Hills, the owner of Yi’s Accessories in the Central Mercado Mini Mall in La Puente;
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Susie Shin, 52, of La Mirada, the owner of My Treasure in Buena Park;
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J2 Trading, Inc., doing business as Hairitage Beauty Supply in San Bernardino and J2’s owner, Dong Ki Min, 51, of Chino Hills;
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Fashion 4-U, Inc., doing business as Fashion Dream in Garden Grove, and the store’s owner, Jeong J. Park, also known as Sarah Park, 55, of La Mirada;
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La Moda XVII, Inc., doing business as Fashion Q in Baldwin Park; and
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NXT.G Corporation, doing business as Zzotta Shoes in the Pacific View Mall in Ventura, and the store’s owner, Kyung Sook Jung, also known as Grace Lee.
All of the defendants named in the criminal informations will be issued summonses directing them to appear for arraignments in federal court in the coming weeks.
A criminal information contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
All of the charges filed in Operation Fright Night are misdemeanor offenses that carry a statutory maximum penalty of one year in federal prison and fines of up to $100,000 for an individual and up to $200,000 for a corporation.
The California Department of Public Health today warned consumers against using decorative contact lenses without first consulting with an eye care professional (see: http://www.cdph.ca.gov/Pages/NR15-078.aspx).
The FDA has issued various warnings against the use of cosmetic contact lenses (for example: http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm402704.htm).
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North Carolina Man Sentenced to Prison for Interstate Travel in Aid of Drug TraffickingRead the Press Release
Gulfport, Miss – Jywaun Davis Williams, 29, of Charlotte, North Carolina, was sentenced on October 22, 2015, by Chief District Judge Louis Guirola to 28 months in federal prison followed by three years of supervised release for interstate travel in aid of an unlawful activity (drug trafficking), announced U.S. Attorney Gregory K. Davis.
Williams was also ordered to pay an $8,000 fine and forfeit a Sig Sauer pistol found in his possession at the time of his arrest during a traffic stop on I-10 in Gulfport in April, 2014.
The case was investigated by the Gulfport Police Department and the Drug Enforcement Administration. It was prosecuted by Assistant United States Attorney Annette Williams.
Norfolk Men Sentenced for Possession with Intent to Distribute Heroin and other NarcoticsRead the Press Release
NORFOLK, Va. – Cornelius J. Gaymon, 35, of Norfolk, a 10-time convicted felon, was sentenced today to 151 months in prison for possession with intent to distribute heroin. Co-conspirator Tedrick O. Speller, 33, of Norfolk, was sentenced to 84 months in prison on Oct. 5, 2015.
Gaymon pleaded guilty on June 24, 2015, and Tedrick Speller pleaded guilty on June 23, 2015. According to court documents, law enforcement officers conducted several undercover purchases of crack cocaine from Speller before executing a search warrant on his residence in the Berkley neighborhood of Norfolk. Nearly 40 officers from Norfolk’s Special Operations Team and Vice and Narcotics division participated in the execution of the warrant and recovered over $32,000 worth of heroin, crack cocaine, cocaine, and marijuana. Officers also seized digital scales, drug packaging materials, several thousand dollars, and five firearms. One firearm was stolen, another had a high capacity extended magazine, and another weapon’s serial number was obliterated. Speller also maintained a storage unit, which contained nearly $50,000. In Gaymon’s room, officers recovered a Black-Bull industrial size, six-ton hydraulic press machine used to “cut” and re-press heroin and other narcotics with cutting agents to expand volume and profitability.
Gaymon, a former Bloods gang member, attempted to escape from the arresting officers twice, once through a second floor window and again while in handcuffs. He had recently been released from a six-year prison term for distributing cocaine.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Chief U.S. District Judge Rebecca Beach Smith sentenced Speller.
This case was investigated by the DEA High Intensity Drug Trafficking Area (HIDTA) Task Force with the assistance of the Norfolk Police Department. Virginia Assistant Attorney General and Special Assistant U.S. Attorney John F. Butler and Assistant U.S. Attorney Andrew C. Bosse prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-66 (Gaymon) and 2:15-cr-67 (Speller).
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New Port Richey Man Sentenced for Child ExploitationRead the Press Release
Tampa, FL – United States District Judge Elizabeth A. Kovachevich today sentenced Mark Joseph Unrein (62, New Port Richey) to 12 years and 7 months in federal prison for using a computer and cell phone to attempt to entice a child for sex, and for possession of child pornography. He was found guilty by a jury on July 24, 2015.
According to court documents, Unrein communicated online with an undercover officer who was posing as the mother of a 12-year-old girl. Unrein discussed engaging in sexual acts with the child and traveled late at night on May 9, 2014, to a location in order to meet the “child” for sex. Upon arriving at the location, Unrein crept around the house, peered into windows, and finally approached the door, where he was arrested. Law enforcement subsequently located the computer that Unrein had used to communicate with the undercover officer. A forensic examination of that computer showed that Unrein possessed multiple images of child pornography, including pictures of children in 29 separate identified series. A number of the victims were from the United States, Germany, Norway, Canada, and other places. Unrein was also found to possess images of babies and toddlers being sexually abused, as well as children that were bound and being forced to engage in sexual acts.
“This sentencing emphasizes the gravity of this crime,” said Susan L. McCormick, special agent in charge of HSI Tampa. “This should serve as a shocking reminder to parents that the Internet can be dangerous and online activity of children should be appropriately monitored.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Amanda C. Kaiser.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Methamphetamine Courier-Distributor Sentenced to 12 YearsRead the Press Release
Spokane – Jorge Mendoza-Sanchez of Sunnyside, Washington, was sentenced today to 12 years in federal prison for his role as a drug courier and distributor in a large-scale methamphetamine-trafficking conspiracy. Mendoza-Sanchez admitted to regularly transporting pounds of methamphetamine from California to Spokane and distributing it to other members of the conspiracy, who in turn sold it to street-level dealers. In addition to Mendoza-Sanchez, six others were charged in the drug-trafficking conspiracy and four of those conspirators were charged with the violent drug-related murder of one of the organization’s Spokane-area street-level dealers. The Organized Crime Drug Enforcement Task Force case was initiated by Spokane Police Department as a murder investigation and referred to the Drug Enforcement Administration as details of the related drug-trafficking conspiracy became known. Although Mendoza-Sanchez was not implicated in the murder, Senior United States District Judge Wm. Fremming Nielsen determined that despite Mendoza-Sanchez’s minor role compared to other members of the conspiracy, the amount of methamphetamine and Mendoza-Sanchez’s possession of a firearm justified a substantial sentence.
The case was prosecuted by Stephanie Van Marter and Russ Smoot, Assistant United States Attorneys for the Eastern District of Washington.
Manufacturer of Defective North Carolina Bridge Parts Arrested in Chicago Area Following IndictmentRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that SANTIAGO DE LA TORRE, 45, of Joliet, Illinois, has been charged by a federal grand jury in a 17-count indictment with Making False Statements Concerning Highway Projects and Aiding and Abetting; Aggravated Identity Theft and Aiding and Abetting; Conspiracy to Make False Statements Concerning Highway Projects; and Perjury. Agents with the Federal Bureau of Investigation arrested DE LA TORRE in the Chicago area on October 21, 2015.
The indictment alleges that SANTIAGO DE LA TORRE and his brother, Joel De La Torre, residents of Illinois, opened a business called Delgado Elastomeric Bearings Corporation (DEBC). Through DEBC, the defendant and his brother manufactured and sold elastomeric bridge bearings, which are effectively shock absorbers for bridges. The defendant and his brother sold the bearings for use by multiple North Carolina highway contractors on numerous bridges in the state.
The indictment alleges that between 2009 and October of 2011, SANTIAGO DE LA TORRE and Joel De La Torre carried out a scheme to manufacture and sell bridge bearings on federal and state highway contracts in North Carolina and forged an application with the State of North Carolina to be able to supply bridge bearings on highway projects within the state.
The indictment further alleges that with each shipment of bridge bearings, SANTIAGO DE LA TORRE and his brother falsified various documents concerning the quality and testing of the bridge bearings. The indictment alleges that the certifications were false and fraudulent for various reasons, including the fact that SANTIAGO DE LA TORRE and Joel De La Torre fabricated the test results listed in the certifications.
The indictment further alleges that federal and state construction contractors received and relied upon the false and fraudulent certifications. According to the North Carolina Department of Transportation and the Federal Highway Administration, there is no immediate safety concern arising from the defective bearings. Nevertheless, the bearings will require replacement at a later date. Costs associated with the replacement of the bearings are expected to exceed $5 Million due to the difficulty in removing the bearings from beneath existing structures, engineering costs, and traffic control.
If convicted, the maximum punishment for Making False Statements Concerning Highway Projects, Conspiracy to Make False Statements, and Perjury is up to five years in prison for each count, a $250,000.00 fine for each count, and 3 years of supervised release. Conviction for Aggravated Identity Theft carries a penalty of not less than, nor more than 2 years imprisonment consecutive to any other sentence imposed, $250,000.00 fine and one year of supervised release.
An indictment is an allegation of a crime. The defendant is presumed under the law to be innocent until proven guilty. The defendant’s brother, Joel De La Torre, previously pleaded guilty on a related charge on April 16, 2015.
The investigation of this case was conducted by the Federal Bureau of Investigation and the United States Department of Transportation, Office of the Inspector General. Assistant United States Attorney William M. Gilmore represents the United States.
Man Sentenced in Federal Court for Passing Forged Postal NotesRead the Press Release
Gregory J. Haanstad, Acting United States Attorney for the Eastern District of Wisconsin, announced that on October 22, 2015, Robert James Zoellner (age: 52) of Ripon was sentenced to 18 months in a federal prison by Chief United States District Judge William C. Griesbach. Zoellner previously pled guilty to a single count of passing forged postal notes, in violation of Title 18 United States Code, Section 500. According to the plea agreement and other documents filed with the court, Zoellner acted as a middle-man for a West African counterfeiter and utilized “mystery shopper” advertisements in newspapers and magazines to recruit unknowing individuals to cash hundreds of thousands of dollars in counterfeit postal notes and money orders and forward the proceeds to Zoellner who would in turn wire the proceeds to his contact in Mali, West Africa. In addition to the term of imprisonment, Zoellner was ordered to serve three years of supervised release.
In sentencing the defendant, Chief Judge Griesbach noted the serious nature of the offense, the defendant’s prior criminal record, as well as the need to deter others in the community from engaging in similar fraudulent behavior.
The case was investigated by the Department of Homeland Security – Immigration and Customs Enforcement and the U.S. Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Daniel R. Humble.
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Man Charged in Graffiti of Prehistoric PetroglyphRead the Press Release
FRESNO, Calif. — Christopher James Harp, 58, was arraigned today in Fresno after a federal grand jury returned an indictment on Thursday, charging him with depredation of public lands, United States Attorney Benjamin B. Wagner announced. Harp entered a plea of not guilty at today’s arraignment.
According to court documents, on September 6, 2015, an archaeologist with the United States Forest Service reported graffiti of numerous boulders at a location known as Rabbit Island, a large rock outcropping in the Sequoia National Forest in Kern County that was once the site of a large Tubatulabal Indian village. Agents found black asphalt sealer sprayed on rocks over about 100 yards, including damage to a prehistoric petroglyph of a bighorn sheep on the face of a large boulder.
This case is the product of an investigation by the United States Forest Service. Assistant United States Attorney Michael S. Frye is prosecuting the case.
If convicted, Harp faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Louisiana Man Sentenced for Involvement in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
A resident of Tangipahoa Parish, Louisiana, was sentenced to serve 12 months and one day in prison to be followed by three years of supervised release for his involvement in a stolen identity refund fraud (SIRF) scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana announced today.
Martin Jackson Sr., 49, pleaded guilty on July 7 to one count of a multi-object conspiracy to defraud the United States and to commit mail fraud and theft of public money. U.S. District Judge Jay C. Zainey of the Eastern District of Louisiana, who imposed today’s sentence, will determine restitution owed to the Internal Revenue Service (IRS) at a later date.
According to court documents, Jackson, who owned two automotive businesses, and his co-defendants conspired to prepare and file false income tax returns using stolen identities, including the victims’ names and social security numbers, to claim large tax refunds. The refund checks were mailed to addresses in Louisiana, including post office boxes that were opened by the co-conspirators. Once the checks were received, Jackson and his co-defendants falsely endorsed and deposited the refund checks into bank accounts under their control. The co-conspirators then divided the proceeds of the refund checks amongst themselves.
The indictment also charged Cedrick Mitchell, 40; Corey Lewis, 37; Craig Lewis, 40; Angela Chaney, 43; Thaddeus Richardson, 49; and others with conspiracy to defraud the United States, conspiracy to commit money laundering, conspiracy to commit mail fraud, conspiracy to commit theft of public money and other charges. On Sept. 15, Cedrick Mitchell was sentenced to serve 33 months in prison. On Sept. 29, Corey Lewis was sentenced to serve 75 months in prison. On Oct. 6, Thaddeus Richardson was sentenced to serve 51 months in prison. On Oct. 13, Angela Chaney was sentenced to serve 36 months in prison and Craig Lewis was sentenced to serve three years of probation. All of the remaining defendants in this case have pleaded guilty to various charges and are awaiting sentencing.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Assistant U.S. Attorneys Hayden Brockett and Dall Kammer of the Eastern District of Louisiana and Trial Attorney Lauren M. Castaldi of the Tax Division, who are prosecuting the case.
Leader of Large-Scale Methamphetamine Trafficking Organization Sentenced to 20 Years in Federal PrisonRead the Press Release
BOISE- Oscar Adan Jaimez-Munoz, 23, a Mexican national residing illegally in California, was sentenced yesterday to 20 years in prison for his leadership role in a large-scale methamphetamine trafficking organization, U.S. Attorney Wendy J. Olson announced. Visiting United States District Judge Dee Benson also ordered Jaimez-Munoz to serve five years of supervised release following his release from prison, and to forfeit $100,000 in drug proceeds. Jaimez-Munoz pleaded guilty on July 20, 2015.
According to the plea agreement, Jaimez-Munoz was living in California in 2014, when he decided to travel to Idaho and begin distributing high purity methamphetamine in the Treasure Valley. He conspired with co-defendants to import over 4.5 kilograms of pure methamphetamine from California for distribution in the Treasure Valley. He was arrested on January 13, 2015, when he attempted to sell eight pounds of methamphetamine to an undercover officer. Jaimez-Munoz was also in possession of a 9 millimeter pistol. Jaimez-Munoz will be deported to Mexico after serving his prison sentence.
“Mr. Jaimez-Munoz’s sentence demonstrates that those who bring methamphetamine, a highly addictive and dangerous drug, into our communities will be vigorously prosecuted,” said Olson. “We hope this sentence will deter others who choose to profit from peddling this poison in our community. This office will work together with its federal, state and local law enforcement partners to bring drug traffickers to justice.”
This case was investigated by the Drug Enforcement Administration, the Ada County Sheriff’s Office, the Boise Police Department, the Meridian Police Department and the Nampa Police Department, as well as the Organized Crime and Drug Enforcement Task Force (OCDETF), which includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Last of Three Defendants is Sentenced in Wire Fraud Scheme to Market Pharmaceutical OintmentRead the Press Release
Oklahoma City, Oklahoma – LAWRENCE GENE BOTHWELL, 35, of Oklahoma City, TOMMY LYNN RICHARDSON, 53, of Ninnekah, Oklahoma, and KENNETH BOYCE,55, of Pleasant View, Utah, have each been sentenced for their involvement in a fraudulent scheme to market a pharmaceutical ointment, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Bothwell was the founder of Bothwell Consulting, LLC, an Oklahoma limited liability company and investment firm whose principal place of business was in Oklahoma City. Bothwell, Richardson, and Boyce were executives at Bothwell Consulting. Prior to founding Bothwell Consulting, Bothwell worked for the Massachusetts-based developer and owner of a topical ointment called Menastil to develop a website to market Menastil to a wider consumer base. However, Bothwell never acquired any ownership interest or distribution rights in Menastil.
On June 17, 2014, a federal grand jury returned a 13-count indictment charging Bothwell, Richardson, and Boyce for their sale of fraudulent debentures. Specifically, the defendants falsely represented to investors that Bothwell Consulting would use their investments to market Menastil when, in reality, Bothwell Consulting owned no distribution rights to the drug. Instead, the defendants used the fraudulent proceeds for their own financial benefit. Investors were also told that these debentures were secured by a multi-million dollar trust, which did not actually exist.
On October 3, 2014, all three defendants pleaded guilty to their involvement in the scheme. The three men have now been sentenced by United States District Judge Joe Heaton as follows:
- On May 14, 2015, Bothwell was sentenced to serve 78 months in prison, followed by two years of supervised release, and ordered to pay $1,703,781.68 in restitution.
- On July 31, 2015, Boyce was sentenced to serve 30 months in prison, followed by three years of supervised release, and ordered to pay $1,475, 272.97 in restitution.
- On October 21, 2015, Richardson was sentenced to serve 68 months in prison, followed by two years of supervised release, and ordered to pay $1,698,117.50 in restitution.
This case is the result of an investigation by the Federal Bureau of Investigation and was prosecuted by U.S. Attorney Sanford C. Coats and Assistant U.S. Attorney Julia E. Barry.
Lake Mary Man Sentenced to More Than Seventeen Years for Attempting to Entice A Minor into Illicit Sexual ConductRead the Press Release
Orlando, Florida – United States District Judge Roy B. Dalton, Jr. has sentenced Dennis Michael Wilkerson (40, Lake Mary) to 17 years and 6 months in federal prison for attempting to persuade, induce, and entice a minor to engage in illicit sexual conduct. Wilkerson was convicted by a federal jury on April 16, 2015.
According to evidence presented during the trial, on October 22, 2014, an FBI Task Force Officer, working in an undercover capacity, posted an advertisement on Craigslist. Wilkerson responded by e-mail, inquiring about sexual activity with a 12-year-old “girl.” After a series of communications with the undercover officer, Wilkerson agreed to pay $50 to receive oral sex from the “girl.” A few days later, Wilkerson traveled to Seminole County to meet with the minor. He was subsequently arrested. Agents recovered $53 from Wilkerson’s pocket after his arrest. He acknowledged that the money was to be used as payment for sex.
This case was investigated by the FBI and the Seminole County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Ilianys Rivera Miranda.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Justice Department Announces Piguet Galland & Cie SA Reaches Resolution under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Piguet Galland & Cie SA (Piguet Galland) has reached a resolution under the department’s Swiss Bank Program. Piguet Galland will pay a penalty of more than $15 million and continue to cooperate with the department.
“With each agreement signed under the Swiss Bank Program, we gain a deeper understanding of the historical patterns and practices of entities and individuals around the world facilitating U.S. tax evasion,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “We are analyzing the information received, pursuing investigations, and remain committed to holding those involved accountable through both civil and criminal enforcement efforts.”
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 agreement signed today, Piguet Galland 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 penalties in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
Piguet Galland evolved through the combination of three small, traditional Swiss private banks focused on wealth management. In November 2003, Banque Franck SA acquired the client relationships of Banque Galland & Cie SA to become Franck Galland & Cie SA. Until 2011, Piguet & Cie (Banque Piguet) was a separate entity, majority-owned by Banque Cantonale Vaudoise (BCV). Between February and April 2011, BCV acquired Franck Galland from its owner, a U.S. financial group (the U.S. financial group), and then merged it with Banque Piguet (the 2011 Acquisition) to form the current entity, Piguet Galland. BCV owns Piguet Galland.
Piguet Galland and its predecessor banks opened, serviced and profited from accounts for U.S. taxpayers with the knowledge that some of these accountholders likely were not complying with their U.S. income tax and reporting obligations. Piguet Galland and its predecessor banks offered a variety of traditional Swiss banking services that they knew or should have known would assist U.S. taxpayers in concealing assets and income from the Internal Revenue Service (IRS), including hold mail and code name or numbered account services.
One particular relationship manager (RM-1) was responsible for managing many of the U.S.-related accounts at Banque Franck and later Franck Galland. RM-1 was a member of senior management at both of those banks. Before Aug. 1, 2008, RM-1 opened several entity and trust accounts for U.S. persons, which remained open past Aug. 1, 2008. RM-1 was a relationship manager for at least 65 U.S.-related accounts at Piguet Galland after Aug. 1, 2008.
RM-1 traveled regularly to the United States, mostly to attend meetings with both existing and potential U.S. clients. Among other places, RM-1 traveled to Arizona, California, New Hampshire, New York and Wisconsin to meet both existing and potential clients. This travel sometimes occurred at the request of the U.S. financial group that owned Franck Galland and often was in connection with trips to visit the U.S. financial group’s management. RM-1 met with U.S. clients at hotels, clients’ clubs and other public places in the United States. Management at Franck Galland, including its former chief executive officer, was aware of RM-1’s travel to the United States. In fact, at least one member of Franck Galland’s Executive Committee knew that RM-1 was a U.S. person at the time he started employment.
Franck Galland permitted two other former relationship managers to travel to the United States to meet with U.S. taxpayer-clients. On one occasion, one of these relationship managers provided $5,000 in cash from an undeclared account held by a U.S. taxpayer-client directly to that client in the United States.
Franck Galland had a sister entity that was also owned by the U.S. financial group. This sister entity was a now-dissolved Cayman Island entity (the Cayman Entity). The Cayman Entity was acquired by Piguet Galland as part of the 2011 Acquisition. The Cayman Entity was ultimately liquidated in 2013, effective in 2014. Prior to the 2011 Acquisition, the Cayman Entity:
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Assisted in the opening of undeclared U.S.-related accounts at Franck Galland, sometimes through entities the Cayman Entity helped to create;
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Helped manage structures holding undeclared U.S.-related accounts at Franck Galland;
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Suggested facilitating meetings in the United States between RM-1 and undeclared U.S. taxpayer-clients with Cayman Entity accounts at Franck Galland;
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Facilitated cash withdrawals and transfers out of undeclared U.S.-related accounts at Franck Galland; and
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Served as trustee for two trusts that held U.S.-related accounts from 1995 to June 2011.
The Cayman Entity also held a subsidiary, the only purpose of which was to hold a condominium in George Town, Cayman Islands. While the condominium was principally for use by the U.S. financial group and its management, it was also used by executives of Franck Galland and at least three of its U.S. taxpayer-clients. The condominium was sold prior to the 2011 Acquisition.
Banque Piguet, another predecessor to Piguet Galland, allowed some of its relationship managers to communicate with its clients, including U.S. taxpayers, through private email accounts and the email domain “4uonly.ch,” without disclosure of the communication’s origin.
Franck Galland and Banque Piguet opened and maintained undeclared accounts beneficially owned by U.S. taxpayers and held in the name of structures, some of which had cash or credit cards linked to them, while knowing, or having reason to know, that some of these structures were used by U.S. taxpayer-clients to help conceal their identities from the IRS. Franck Galland and Banque Piguet also:
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Accepted instructions in connection with U.S.-related accounts not to invest in U.S. securities and not to disclose the names of U.S. taxpayer-clients to U.S. tax authorities, including the IRS;
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Opened and maintained accounts for U.S. taxpayer-clients transferring from other Swiss financial institutions that were closing such accounts, while both Franck Galland and Banque Piguet knew, or had reason to know, that a portion of the accounts at the other institutions were or likely were undeclared; and
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Maintained undeclared accounts for U.S. taxpayer-clients who renounced their beneficial ownership of such accounts, or who transferred account funds to non- U.S.- related accounts, while continuing to exercise control or retain entitlement to the funds.
Throughout its participation in the Swiss Bank Program, Piguet Galland committed to providing full cooperation to the U.S. government. Among other things, Piguet Galland provided a list of the names and functions of individuals who structured, operated or supervised the cross-border business at Franck Galland, Banque Piguet and Piguet Galland.
Since Aug. 1, 2008, Piguet Galland and its predecessor banks held 337 U.S.-related accounts, with aggregate assets under management of $441 million. Piguet Galland will pay a penalty of $15.365 million.
While U.S. accountholders at Piguet Galland 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 this non-prosecution agreement, noncompliant U.S. accountholders at Piguet Galland must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s resolution with Piguet Galland & Cie SA reflects the continuing success of DOJ’s Swiss Bank Program,” said Acting Deputy Commissioner International David Horton of the IRS Large Business & International Division (LB&I). “Through these agreements, we are getting hidden account data and information on those who have aided this tax evasion. U.S. taxpayers with undeclared accounts need to come forward, report their foreign accounts and pay their income taxes.”
“The veil of secrecy has been lifted from what was once a common place for criminals to hide their money offshore,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “By requiring banks to follow the laws already in place and not turn a blind eye to criminal activity, the success of the Swiss Bank Program echoes around the world. The American public expects and deserves the enforcement of the U.S. tax laws to ensure the integrity and fairness of our nation’s tax system.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and IRS LB&I for their substantial assistance. Ciraolo also thanked W. Damon Dennis, who served as counsel on this matter, 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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Jury Trial Results in Conviction of Pominent 1-9 Gang Member for Conspiracy to Possess FirearmsRead the Press Release
United States Attorney Andrew M. Luger today announced the conviction of VELTREZ BLACK, a/k/a “Chief,” for participating in two street gangs operating throughout Hennepin County. The defendant was a prominent member of the 1-9 gang, which worked together with the Stick up Boys gang to illegally obtain and jointly possess firearms. BLACK was convicted yesterday after a jury trial in federal court of conspiracy and felon in possession of a firearm. A sentencing date has not been set. The other ten co-conspirators indicted in this case have all pleaded guilty.
As proven at trial and according to the defendants’ guilty pleas, the defendants coordinated their illegal activities in order to obtain firearms by theft, trading drugs for guns, and by using straw purchasers without felony histories to buy guns for those members of the gang with felony records. On five separate occasions between August 2010 and November 2014, BLACK was in possession of a total of 12 separate guns while a convicted felon and while in the company of other 1-9 gang members who also were convicted felons. The 1-9 and Stick Up Boys were in a gang war with two other rival gangs. The gang war resulted in the shooting deaths and wounding of numerous gang members on both sides of the conflict. At least fifteen alleged gang members were killed or wounded by gunfire during the gang conflict.
Due to the conflict, members of 1-9 and Stick Up Boys conspired with straw purchasers to illegally acquire and jointly possess firearms. The straw purchasers, DEONTAY JONES and LAKESHA COLEMAN, purchased at least ten guns in their own names and provided at least some of those firearms to members of the 1-9 and Stick Up Boys. JONES filed false police reports explaining that these guns were stolen from his home, when in fact, at least two of the guns were provided to 1-9 gang members.
This case is the result of an investigation conducted by the Hennepin County Violent Offender Task Force (VOTF), the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Minneapolis Police Department. The investigation began as part of an ongoing effort to reduce gang activity connected with numerous incidents of violent crime in Hennepin County. VOTF investigators on this case include personnel from the Hennepin County Sheriff’s Office, Brooklyn Park Police Department, Brooklyn Center Police Department, Golden Valley Police Department, and Richfield Police Department.
This case is being prosecuted by Assistant U.S. Attorney Jeffrey Paulsen.
Defendant Information:VELTREZ BLACK, a/k/a “Chief”
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countTYWIN BENDER, a/k/a “Finn Winn”
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 countNITELEN JACKSON, a/k/a “King Nite”
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 countDONTEVIUS CATCHINGS, a/k/a “Lil Snake”
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 countCINQUE OWENS
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 countJABARI JOHNSON
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countDARRYL PARKER, a/k/a “Thirsty”
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 count
• Felon in Possession of a Firearm, 1 countMARQUIS WOODS, a/k/a “Quis Moe”
Convicted:
• Felon in Possession of a Firearm, 1 countMARQUES ARMSTRONG, a/k/a “Lil Kease”
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 countDEONTAY JONES
Convicted:
• Unlawful controlled substances user in possession of firearms, 1 countLAKESHA COLEMAN
Convicted:
• Conspiracy – Felon in Possession of Firearms, 1 countJacksonville Woman Pleads Guilty to Manufacturing and Possessing Counterfeit Business ChecksRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Mychi Michelle Jones (30, Jacksonville) has pleaded guilty to manufacturing and possessing counterfeit business checks. She faces a maximum penalty of up to 25 years in federal prison for the manufacturing charge and up to 10 years’ imprisonment on the possession charge. A sentencing date has not yet been set.
According to the plea agreement, between 2013 and October 2014, Jones manufactured more than 100 counterfeit business checks. Working with others, she obtained compromised bank account numbers and payee names and used that information to print counterfeit business checks. In an effort to make the checks look authentic, Jones used the names of various Jacksonville-area businesses as the purported issuers.
In October 2014, as part of a joint investigation with the Jacksonville Sheriff’s Office, agents from the United States Secret Service executed a federal search warrant at Jones’s room at the Emerson Inn hotel in Jacksonville. Agents located, among other items, a computer, a printer, blank check stock, and a large number of counterfeit checks in various stages of completion. A forensic examination of the seized computer subsequently established that it had been used by Jones to manufacture counterfeit business checks.
This case was investigated by the Jacksonville Sheriff’s Office and the United States Secret Service, Jacksonville Field Office. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
Jacksonville Man Pleads Guilty in $2.1 Million Fraud SchemeRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Andrew A. Rooks (58, Jacksonville) has pleaded guilty to two separate conspiracies to commit mail and wire fraud. He faces a maximum penalty of 20 years in federal prison on each count, plus a fine of twice the amount of the fraud loss. The plea agreement provides for restitution in the approximate amount of $2,187,000 to two victims, Sea Star Line, LLC and TrailerBridge, Inc. The agreement also provides for the entry of a personal money judgment against Rooks in the amount of approximately $2,187,000, which represents the proceeds of the fraud. A sentencing date has not yet been set.
According to court documents, from 2001 until July 2011, Rooks worked for Sea Star Line, LLC, in its Jacksonville office. Sea Star transports goods by vessel in interstate and foreign commerce and has operations at the Port of Jacksonville. Rooks last served as the assistant vice president of operations. Beginning no later than November 2005, Rooks authorized the payment of phony invoices submitted on behalf of co-conspirator Keith Beavers. The invoices were for container and equipment decals that were never provided to Sea Star. The total payments Sea Star made to Beavers exceeded $1 million. During the same period, Rooks also carried on a second conspiracy. He authorized the payment of phony invoices to two companies controlled by co-conspirator Russell Cody. The invoices, totally more than $1 million, were for inspection and transportation services of Sea Star’s containers and equipment. They were false because those services were never provided by Tiburon Transportation Services or Lancer Logistics, which were front companies that Cody controlled. Instead, Beavers and Cody made kickback payments to Rooks, and to a company Rooks controlled.
After Rooks was terminated by Sea Star, he got a job with another Jacksonville company, TrailerBridge, Inc., and continued the scheme. TrailerBridge paid approximately $107,000 as a result of phony invoices.
Beavers and Cody previously pleaded guilty to their role in the conspiracies and are scheduled for sentencing on February 1, 2016.
This case was investigated by the Jacksonville office of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Dale Campion.
Iowa Landowner Sentenced for Leasing Land Used in Illegal Guided Deer HuntsRead the Press Release
DES MOINES, IA - On October 21, 2015, Steven C. Miller, 63, of Russell, Iowa, was sentenced by Chief United States District Judge John A. Jarvey to 4 years of probation for his role in leasing land that was used in illegal guided deer hunts in Iowa, announced United States Attorney Nicholas A. Klinefeldt. As a condition of his probation, Miller must pay a $3,000 fine, and cannot engage in hunting activities or allow any form of hunting or trapping to occur on his property. Miller was also ordered to pay a $2,500 money judgment in lieu of forfeiture of his equipment used during the illegal guided hunts, and pay a $25 special assessment to the Crime Victims Fund.
Iowa is a renowned destination for hunting white-tail, buck deer. The state is routinely ranked as one of the top states in the nation for producing trophy white-tail, buck deer. These deer serve as an important natural resource, which is carefully managed by the Iowa Department of Natural Resources. Part of this process involves the restriction on the number of out-of-state hunters who are allowed to hunt white-tail deer in Iowa each year. On average, out-of-state hunters can obtain a license once every three-to-four years to hunt white-tail, buck deer in Iowa.
People who hunt illegally for Iowa trophy deer undermine the State's management efforts, and deprive those who hunt ethically and follow the laws and regulations of opportunities to take trophy deer.
From around 2009 to January 2014, Miller leased land in rural Lucas County to Robert Jerome Wilkins of Alabama, for Wilkins to hunt for white-tail deer. Wilkins guided out-of-state hunters during paid hunts for trophy white-tail, buck deer on Miller's land. None of these out-of-state hunters possessed hunting license or tags as required by the laws and regulations of the State of Iowa. Some of the hunters were successful in illegally killing white-tail, buck deer, and the capes and antlers of those deer were transported from Iowa to Alabama.
Miller pled guilty on July 14, 2015, to a misdemeanor violation of the Lacey Act for the unlawful sale of wildlife in violation of 16 U.S.C. §§ 3372(a)(2)(A), 3373(d)(2). Miller acknowledged that in the exercise of due care, he should have known that the hunters were hunting for and killing the deer in violation of Iowa's hunting laws and regulations.
In the related cases, Robert Jerome Wilkins previously pled guilty to felony conspiracy to commit the unlawful sale of wildlife, was sentenced on July 17, 2015, by Senior United States District Judge James E. Gritzner to 4 years of probation, which included 6 months of home confinement. Wilkins was also ordered to pay $12,000 in restitution to the Iowa Department of Natural Resources, pay a $100 special assessment to the Crime Victims Fund, and forfeit firearms and a scope used in the illegal hunts.
Wilkins was assisted during the guided hunts by Kinsman Bruce Wolfe of Montgomery, Alabama. On July 23, 2015, Wolfe was convicted by a jury of conspiracy to commit the unlawful sale of wildlife, as well as two counts of unlawful sale of wildlife, all felony offenses. Wolfe is scheduled to be sentenced by Chief United States District Judge Jarvey on November 20, 2015.
"These types of cases show a complete disregard for Iowa's hunting laws and regulations, and this criminal conduct will not be tolerated. Individuals engaging in such conduct, including landowners who allow their land to be used for unlawful hunting, will be held accountable," said United States Attorney Nicholas A. Klinefeldt.
This investigation was conducted by the United States Fish and Wildlife Service, the Iowa Department of Natural Resources, and the Alabama Game and Fish Division, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Ostby in Billings, on October 23, 2015 and entering pleas of Not Guilty were:
- JORDALE THOMAS REDWOLF, a 27-year-old resident of Wyola, appeared on charges of felon in possession of a firearm, possession of a stolen firearm, possession of an unregistered firearm, and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious charges contained in the indictment, REDWOLF faces 10 years in prison, $250,000 in fines and 5 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-76
Appearing before U.S. Magistrate Ostby in Billings, on October 22, 2015 and entering pleas of Not Guilty were:
- ANTHONY DAVID HOPWOOD, a 30-year-old resident of Billings, appeared on charges of possession of a firearm by a person convicted of domestic violence and possession of a stolen firearm. If convicted of the most serious charge contained in the indictment, HOPWOOD faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 14-106
Appearing before U.S. Magistrate Lynch in Missoula, on October 20, 2015 and entering pleas of Not Guilty were:
- PAUL GEE CHIANG, a 41-year-old resident of Renton, Washington, appeared on charges of conspiracy to possess with intent to distribute oxycodone, possession with intent to distribute oxycodone, conspiracy to acquire or obtain possession of a controlled substance by deception, and acquiring or obtaining possession of a controlled substance by deception. If convicted of the most serious charges contained in the indictment, CHIANG faces 20 years in prison, $1,000,000 in fines and 3 years supervised release. The case was investigated by the Drug Enforcement Administration. PACER Case Reference. 15-21
Appearing before U.S. Magistrate Johnston in Great Falls on October 20, 2015 and entering pleas of Not Guilty were:
- NEAL PAUL ROSETTE, a 53-year-old resident of Box Elder, appeared on charges of conspiracy to defraud the Chippewa Cree Tribe, scheme to defraud the Chippewa Cree Tribe/wire fraud; bribery/accepting, income tax evasion and willful failure to file tax returns. If convicted of the most serious charges contained in the indictment, ROSETTE faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the U.S. Department of Interior Office of Inspector General, Internal Revenue Service, U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. PACER Case Reference. 15-61
Appearing before U.S. Magistrate Ostby in Billings on October 19, 2015 and entering pleas of Not Guilty were:
- MORGAN MARIE ANDERSON, a 24-year-old resident of Billings, appeared on charges of conspiracy to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, ANDERSON faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Federal Bureau of Investigation Task Force. PACER Case Reference. 15-94
- CHRISTOPHER BRADLEY CHASE, a 25-year-old resident of Billings, appeared on charges of felon in possession of a firearm. If convicted of the charge contained in the indictment, CHASE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-95
- REGINA DENISE HARDEMAN, a 54-year-old resident of Barstow, California, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, HARDEMAN faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration. PACER Case Reference. 15-111
- CHRISTOPHER L. HARGITT, a 41-year-old resident of Glendive, appeared on charges of felon in possession of a firearm, possession of methamphetamine with intent to distribute and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious charges contained in the indictment, HARGITT faces life in prison, $5,000,000 in fines and 5 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-92
- LARRY BURNELL SEPT, JR., a 43-year-old resident of Richmond, California, appeared on charges of transportation of a person with intent to engage in criminal sexual activity. If convicted of the charge contained in the indictment, SEPT faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-114
Appearing before U.S. Magistrate Ostby in Billings on October 16, 2015 and entering pleas of Not Guilty were:
- JERRY RAY DEGOLYER, a 51 year-old resident of Sidney, appeared on charges of conspiracy to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, DEGOLYER faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by State of Montana Division of Criminal Investigations and the Drug Enforcement Administration. PACER Case Reference. 15-108
- ROBERT LELAND HICE, a 68-year-old resident of Billings, appeared on charges of distribution of child pornography, receipt of child pornography and possession of child pornography. If convicted of the most serious charges contained in the indictment, HICE faces 20 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-99
- WILLIAM WOODROW SPRINGFIELD, SR., a 53-year-old resident of Lodge Grass, appeared on charges of possession with intent to distribute methamphetamine. If convicted of the charge contained in the indictment, SPRINGFIELD faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference. 15-121
Appearing before U.S. Magistrate Lynch in Missoula on October 14, 2015 and entering pleas of Not Guilty were:
- CHAD WILLIAM HEDGES, a 41-year-old resident of Bozeman, appeared on charges of conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine, distribution of methamphetamine and felon in possession of a firearm. If convicted of the most serious charges contained in the indictment, HEDGES faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Missouri River Drug Task Force. PACER Case Reference. 15-28
Appearing before U.S. Magistrate Ostby in Billings on October 13, 2015 and entering pleas of Not Guilty were:
- TAVIS ALAN-CODY PAIR, a 31 year-old resident of Billings, appeared on charges of possession of an unregistered firearm and felon in possession of a firearm and ammunition. If convicted of the most serious charge contained in the indictment, PAIR faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-30
- TAVIS ALAN-CODY PAIR, a 31 year-old resident of Billings, appeared on charges of possession of conspiracy to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, PAIR faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-101
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indiana Man Indicted on Federal Charge of Failure to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Ricardo Lamont Irvine (42, Evansville, Indiana) has been indicted by a federal grand jury and charged with failing to register as a sex offender after traveling from Indiana to Florida. If convicted, he faces up to 10 years in federal prison. Irvine was arrested in Jacksonville on September 22, 2015.
According to the indictment, on or about November 4, 1996, Irvine was convicted of child molestation in Evansville, Indiana. Subsequent to his conviction, and between June 8, 2015, and September 14, 2015, Irvine traveled from Indiana to Florida but failed to register as a sex offender as required by the Sex Offender Registration and Notification Act.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent until, and unless, proven guilty.
This case was investigated by the United States Marshals Service, the Jacksonville Sheriff’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
High-Level International Drug Trafficker Sentenced to 30 Years in Prison for Long-Running Narcotics ConspiracyRead the Press Release
Defendant Operated Out of the United States, Canada, Mexico, Colombia, Bahamas, Spain, France, Italy, Panama and Luxembourg
Gregory Joel Sitzmann, 65, was sentenced today to 30 years in prison for his role as the leader of an international drug trafficking and money laundering ring that operated for at least 14 years out of the United States, Canada, Mexico, Colombia, Bahamas, France, Italy, Spain and other countries.
The sentencing was announced by U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) in Washington, D.C., and Chief Cathy L. Lanier of the Washington, D.C., Metropolitan Police Department (MPD).
Sitzmann, who was born in Iowa, had most recently resided in Colombia. He was found guilty by a jury on May 21, 2012, of conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine. The verdict followed a six-week trial in the U.S. District Court for the District of Columbia. Sitzmann was sentenced by U.S. District Judge Paul L. Friedman of the District of Columbia. Upon completion of his prison term, Sitzmann will be placed on 10 years of supervised release. The judge also ordered Sitzmann to pay a $500,000 fine.
According to the government’s evidence, Sitzmann used and conspired to use numerous individuals and artifices to transport hundreds of kilograms of cocaine from Colombia and Mexico into the United States and into numerous countries around the world. For example, Sitzmann used commercial airplanes, and luggage, automobiles and trucks with secret compartments to move the drugs.
Evidence showed that Sitzmann has been involved in drug smuggling and money laundering since at least the 1980s and that he provided hundreds of kilograms of cocaine to a Hells Angels motorcycle gang in Montreal throughout the 1990s. He maintained corporations and bank accounts in Panama, Switzerland, Luxembourg and elsewhere to facilitate his money laundering and the purchase of assets.
“Gregory Joel Sitzmann was a career wholesale cocaine trafficker who operated an international drug conspiracy at the highest levels that involved over 1,300 kilograms of cocaine,” said U.S. Attorney Phillips. “He directly acquired cocaine from the drug cartels of Colombia and Mexico to transport into the United States and other countries around the world. Now, after years of eluding justice, he has been convicted and will spend an appropriately significant amount of time in prison for his crimes. This case shows our determination to combat narcotics traffickers at the highest levels in all corners of the world.”
“The strong investigative work of our HSI special agents and law enforcement partners dismantled this international drug trafficking organization – one that operated on multiple continents and supplied a significant amount of cocaine to the United States,” said Special Agent in Charge Settles. “Today’s sentence concludes Sitzmann’s long journey from drug kingpin to being just another convicted drug trafficker.”
“The defendant in this case attempted to delay justice for several years,” said Chief Lanier. “Today’s sentencing is yet another example of the resolve that we, as law enforcement, have towards following through on investigating and prosecuting drug traffickers to the greatest extent possible.”
Sitzmann was indicted on Aug. 7, 2008, by a federal grand jury in the District of Columbia for activities that took place during the 1990s and at least until 2004. The day after the indictment, Sitzmann was deported from France to the United States, where HSI special agents arrested Sitzmann. He has been in custody ever since. The defendant delayed trial for years, utilizing numerous attorneys while alternating with demands to represent himself.
The prosecution grew out of the efforts of the federal Organized Crime Drug Enforcement Task Force, a multi-agency team that conducts comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the nationwide program is to identify, disrupt and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
In recent years, investigations by this task force have led to the arrests and indictments of dozens of people from drug organizations that operate in the Washington, D.C., area.
In announcing the sentence, U.S. Attorney Phillips, Special Agent in Charge Settles and Chief Lanier expressed appreciation for the work of the many dedicated people who pursued the investigation, including the HSI special agents and the investigators from the MPD. They also thanked the U.S. Drug Enforcement Administration, U.S. Customs and Border Protection, the Colombian National Police, the French National Police, French Customs, the Royal Canadian Mounted Police and the Royal Bahamas Police for assistance in the investigation. They acknowledged the work of those who handled the case for the U.S. Attorney’s Office of the District of Columbia, including Paralegal Specialists Crystal Barclay, Candice Sisco and David Hollingsworth; Legal Assistants Tammy Scott and Diane Brashears; Victim/Witness Coordinator Dawn Tolson-Hightower; and Litigation Technology Specialists Ron Royal and Joshua Ellen.
Finally, they thanked Assistant U.S. Attorneys George Eliopoulos and Sharad Khandelwal of the District of Columbia, who prosecuted the case.
High-Level International Drug Trafficker Sentenced to 30 Years in Prison for Long-Running Narcotics ConspiracyRead the Press Release
WASHINGTON - Gregory Joel Sitzmann, 65, was sentenced today to 30 years in prison for his role as the leader of an international drug trafficking and money laundering ring that operated for at least 14 years out of the United States, Canada, Mexico, Colombia, Bahamas, France, Italy, Spain and other countries.
The sentencing was announced by U.S. Attorney Channing D. Phillips; Clark E. Settles, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington, D.C.; and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Sitzmann, who was born in Iowa, had most recently resided in Colombia. He was found guilty by a jury on May 21, 2012, of conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine. The verdict followed a six-week trial in the U.S. District Court for the District of Columbia. Sitzmann was sentenced by the Honorable Paul L. Friedman. Upon completion of his prison term, Sitzmann will be placed on 10 years of supervised release. The judge also ordered Sitzmann to pay a $500,000 fine.
According to the government’s evidence, Sitzmann had used and conspired to use numerous individuals and artifices to transport hundreds of kilograms of cocaine from Colombia and Mexico into the United States and into numerous countries around the world. For example, Sitzmann used commercial airplanes, automobiles and trucks with secret compartments, and luggage with secret compartments, to move the drugs.
Evidence showed that Sitzmann has been involved in drug smuggling and money laundering since at least the 1980s and that he provided hundreds of kilograms of cocaine to a Hells Angels motorcycle gang in Montreal, Canada, throughout the 1990s. He maintained corporations and bank accounts in Panama, Switzerland, Luxembourg, and elsewhere to facilitate his money laundering and the purchase of assets.
“Gregory Joel Sitzmann was a career wholesale cocaine trafficker who operated an international drug conspiracy at the highest levels that involved over 1,300 kilograms of cocaine,” said U.S. Attorney Phillips. “He directly acquired cocaine from the drug cartels of Colombia and Mexico to transport into the United States and other countries around the world. Now, after years of eluding justice, he has been convicted and will spend an appropriately significant amount of time in prison for his crimes. This case shows our determination to combat narcotics traffickers at the highest levels in all corners of the world.”
“The strong investigative work of our HSI special agents and law enforcement partners dismantled this international drug trafficking organization – one that operated on multiple continents and supplied a significant amount of cocaine to the United States,” said Special Agent in Charge Settles. “Today’s sentence concludes Sitzmann’s long journey from drug kingpin to being just another convicted drug trafficker.”
“The defendant in this case attempted to delay justice for several years,” said Chief Lanier. “Today’s sentencing is yet another example of the resolve that we, as law enforcement, have towards following through on investigating and prosecuting drug traffickers to the greatest extent possible.”
Sitzmann was indicted on Aug. 7, 2008 by a federal grand jury in the District of Columbia for activities that took place during the 1990s and at least until 2004. The day after the indictment, Sitzmann was deported from France to the United States, where HSI special agents arrested Sitzmann. He has been in custody ever since. The defendant delayed trial for years, utilizing numerous attorneys while alternating with demands to represent himself.
The prosecution grew out of the efforts of the federal Organized Crime Drug Enforcement Task Force, a multi-agency team that conducts comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the nationwide program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
In recent years, investigations by this task force have led to the arrests and indictments of dozens of people from drug organizations that operate in the Washington, D.C. area.
In announcing the sentence, U.S. Attorney Phillips, Special Agent in Charge Settles, and Chief Lanier expressed appreciation for the work of the many dedicated people who pursued the investigation, including the HSI special agents and the investigators from the MPD. They also thanked the U.S. Drug Enforcement Administration, the U.S. Customs and Border Protection, the Colombian National Police, the French National Police, French Customs, the Royal Canadian Mounted Police, and the Royal Bahamas Police, for assistance in the investigation. They acknowledged the work of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialists Crystal Barclay, Candice Sisco, and David Hollingsworth; Legal Assistants Tammy Scott and Diane Brashears; Victim/Witness Coordinator Dawn Tolson-Hightower, and Litigation Technology Specialists Ron Royal and Joshua Ellen.
Finally, they thanked Assistant U.S. Attorneys George Eliopoulos and Sharad Khandelwal, who prosecuted the case.
Gun Charges Bring 15-Year Sentence to Ellaville Repeat OffenderRead the Press Release
Robert C. Brown, aged 45, of Ellaville, Georgia, was sentenced on October 22, 2015 to serve 15 years (180 months) in federal prison for possession of a firearm by a convicted felon. The sentence was handed down by U.S. District Court Judge Leslie J. Abrams in Albany, Georgia.
Mr. Brown pled guilty to the charge on April 20, 2015. As part of his plea, he admitted that he has three prior felony convictions in the State of Georgia: 1) aggravated assault in Sumter County on May 3, 1991; 2) burglary in Schley County on December 7, 2000; and 3) burglary in Schley County in a separate case on December 7, 2000.
On January 26, 2014, Mr. Brown sold a firearm to a local resident. During a subsequent parole search of Mr. Brown’s residence, conducted on January 28, 2014, seven firearms were found in a bedroom closet.
“Mr. Brown received this lengthy sentence because he is deemed a career criminal under federal law. Not only is he prohibited from owning firearms at all, he made matters worse by selling them, as well,” said United States Attorney Michael J. Moore.
The case was investigated by the Schley County Sheriff’s Office and the Georgia Department of Corrections. Assistant United States Attorney Jim Crane prosecuted the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Greenville Man Sentenced to 108 Months for Business RobberiesRead the Press Release
ELIZABETH CITY – United States Attorney Thomas G. Walker announced that in federal court yesterday, United States District Judge Terrence W. Boyle sentenced KEITH MICHAEL JONES, 25, of Greenville, to 108 months imprisonment followed by 3 years of supervised release. On July 15, 2015, JONES pleaded guilty to 2 counts of robbery of a business in interstate commerce and 1 count of robbery of a business in interstate commerce and aiding and abetting.
An investigation initiated by the Greenville Police Department, revealed that on August 10, 2014, KEITH MICHAEL JONES entered the Wilco Hess station located on South Memorial Drive in Greenville and robbed the store of currency and cigarettes.
On August 11, 2014, JONES entered the Kangaroo Express located on Southeast Greenville Boulevard and robbed the store of currency and cigarettes.
On August 13, 2014, JONES and an unknown suspect, entered and robbed the Kangaroo Express located on Queen Street in Grifton, North Carolina. JONES took United States currency from the register.
That same evening, a detective who was conducting surveillance in Greenville due to the increasing number of armed robberies in the area, observed JONES hiding next to an abandoned building.
Investigation of this case was conducted by the Greenville Police Department, the Grifton Police Department, and the Bureau of Alcohol Tobacco Firearms and Explosives. Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Greenville Drug Trafficker SentencedRead the Press Release
ELIZABETH CITY - United States Attorney Thomas G. Walker announced that in federal court on October 22, 2015, United States District Judge Terrence W. Boyle sentenced BRYANT FIGUEROA, 32, of Greenville, North Carolina, to 60 months in prison followed by 5 years of supervised release for conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin. FIGUEROA previously pled guilty to this charge on July 15, 2015.
The Greenville Regional Drug Task Force used an informant to buy heroin from FIGUEROA on three occasions in October and November 2014. The investigation revealed that between June 2014 and December 9, 2014, FIGUEROA and his co-conspirators were responsible for distributing approximately 125 grams of heroin in Pitt County, North Carolina.
The investigation of this case was conducted by the Greenville Regional Drug Task Force. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Gibsonton Couple Indicted for Stolen Identity Refund FraudRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Ynessa Brown and Thelonius Robertson with 10 counts of wire fraud, 1 count of conspiring to commit tax fraud, and 5 counts of aggravated identity theft. Brown is also charged with 2 counts of filing false tax returns. If convicted, they face a maximum penalty of 20 years in federal prison for each count of wire fraud, and up to 5 years’ imprisonment for each count of filing a false tax return and the conspiracy charge, to be followed by 2 years’ imprisonment on the identity theft counts. The indictment also notifies Brown and Robertson that the United States is seeking a money judgment in the amount of $767,398, the proceeds of the charged criminal conduct.
According to the indictment, from January 2012 through June 2013, Brown and Robertson possessed and used stolen identities, including those of deceased persons, to electronically file false and fraudulent tax returns. They then directed the refunds from those fraudulent filings to debit cards, many in other people’s names. The debit cards were sent directly to Brown and Robertson, as well as to their friends and family, and to vacant addresses. Brown and Robertson spent the fraudulently obtained tax refund monies at various retail locations and also obtained cash via ATM withdrawals. In addition, Brown filed fraudulent tax returns in her name for 2011 and 2012, claiming more than $18,000 in refunds to which she was not entitled.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Hillsborough County Sheriff’s Office and the Internal Revenue Service - Criminal Investigation. It will be prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.
Georgia Resident Sentenced to Prison in Connection with Fraudulent Lottery Scheme Based in JamaicaRead the Press Release
A Douglasville, Georgia, man was sentenced after pleading guilty to his role in a Jamaican-based fraudulent lottery scheme that targeted victims in the United States, the Department of Justice announced today. This prosecution is part of the Department of Justice’s effort, working with federal, state and local law enforcement, to combat lottery fraud schemes from Jamaica preying on American citizens. According to the U.S. Postal Inspection Service (USPIS), Americans have lost tens of millions of dollars to fraudulent foreign lotteries.
Dominic Hugh Smith, 27, was sentenced by U.S. District Court Judge Robert J. Conrad Jr. of the Western District of North Carolina to serve 27 months in prison and one year of supervised release. Smith was also ordered to pay $724,408.79 in restitution. In June 2014, Smith pleaded guilty to one count of conspiracy to commit wire fraud in connection with the conduct of telemarketing. Prior to pleading guilty, Smith had been employed both as a Transportation Security Administration agent and an Atlanta Police Department police officer.
“International lottery fraud aimed at stealing from elderly victims cannot, and will not, be tolerated by the Department of Justice,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will seek to hold accountable those who participate in illegal lottery schemes, including those in the United States who facilitate schemes directed from abroad as well as those who operate from foreign countries.”
“As these types of financial scams continue to grow in scope and sophistication, we will utilize all resources to prosecute and deter such criminal activity,” said U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. “Now more than ever, the public needs to be mindful of these schemes to avoid falling prey to them. Greedy criminals looking to line their pockets with money stolen from our nation’s seniors will ultimately face American justice.”
As part of his guilty plea, Smith acknowledged that had the case gone to trial, the government would have proved beyond a reasonable doubt that from December 2010 through at least April 2012, he was a member of a conspiracy in which elderly victims were informed by telephone that they had won a large amount of money and prizes in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings. Victims sent hundreds of thousands of dollars to Smith in the United States. Smith acknowledged that the government would have proved that he knew there was no lottery, and that he, along with his coconspirators, kept the victims’ money for their own benefit.
Principal Deputy Assistant Attorney General Mizer and U.S. Attorney Rose commended the investigative efforts of the USPIS and the Internal Revenue Service. The sentencing was handled by Trial Attorney Stephen T. Descano of the Civil Division’s Consumer Protection Branch.
Gautier Man Sentenced for Aggravated Identity TheftRead the Press Release
Gulfport, Miss – Edgardo Batiz Medina, 30, a resident of Gautier and native of Puerto Rico, was sentenced on October 22, 2015, by Chief District Judge Louis Guirola, to two years in federal prison followed by one year of supervised release for his role in the sale of fraudulent birth certificates and social security cards, U.S. Attorney Gregory K. Davis announced today.
Batiz Medina was also ordered to pay a $2,000 fine as well as restitution in the amount of $1750 to Homeland Security Investigations for money paid for fraudulent identification documents in the undercover investigation.
This case was investigated by Homeland Security Investigations. The case was prosecuted by Assistant United States Attorney Annette Williams.
GSA Official Jailed for Accepting Bribes and Stealing PropertyRead the Press Release
Assistant U.S. Attorneys Phillip L.B. Halpern (619) 546-6964 and Andrew G. Schopler (619) 546-8068
NEWS RELEASE SUMMARY – October 23, 2015
Timothy Francis Cashman, a Building Manager for the General Services Administration (“GSA”), was sentenced to 16 months in custody today for accepting bribes and stealing property owned by the United States.
At a sentencing hearing today, Judge Gonzalo P. Curiel noted that Cashman was a religious man who performed many good deeds and selfless acts throughout his life. Nevertheless, he told the packed courtroom of friends, family, and supporters who requested leniency for Cashman that it was vital the general public understood that “quid pro quo is not the status quo; quid pro quo is not acceptable.”
During the sentencing, the government demonstrated how Cashman used his position with GSA (overseeing operations and maintenance at the Otay Mesa, San Ysidro, and Tecate Ports of Entry) for his personal enrichment; rather than to fulfill GSA’s core mission of delivering “the best value in real estate, acquisition, and technology services to government and the American people.”
Over a number of years, Cashman provided favorable treatment relating to the awarding of GSA contracts. For example, he demanded $10,000 in cash and thousands of dollars’ worth of construction and renovation services on Cashman’s personal residence from government contractor Hugo Alonso Inc. (“HAI”). These services included having HAI paint Cashman’s Lakeside home and replace his roof and windows free of charge.
The former GSA building manager also demanded that HAI pay another government contractor (Company “A”) $120,000 in exchange for HAI being awarded a GSA construction contract at the Otay Mesa POE. Subsequently, Cashman accepted six checks from Company “A” totaling $42,000, which he deposited into his personal account. All of the income he received from HAI was concealed from the IRS when submitting his federal income tax returns.
In addition to accepting bribes from HAI, Cashman improperly obtained thousands of dollars in valuable United States Government building materials for his own benefit by causing GSA contractors and others to remove and transport such materials away from GSA facilities where he could sell or use them without the knowledge of GSA. Among other things, Cashman instructed government contractors: (1) in March 2011, to load approximately 25 stainless steel panels located at the San Ysidro POE into his personal Ford truck; (2) in January 2012, to load 35 heavy brass letters (spelling out “United States Border Inspection Station” and weighing approximately 2,000 pounds) into his personal truck; (3) in December 2012, to collect approximately 3,000 feet of underground copper cable belonging to the United States and to deliver it to, among other places, his personal residence; and (4) in November 2013, to set aside for his personal sale a large quantity of underground copper cable and approximately 5 aluminum panels located at the Otay Mesa POE.
United States Attorney Laura E. Duffy remarked that the Cashman case demonstrates that combatting public corruption in all its forms will remain one of her office’s highest priorities. She also thanked the Special Agents with the FBI, IRS-CI and GSA-OIG whose tireless work both uncovered this corruption and resulted in removing the corrupt official from the government fisc.
In addition to his custodial sentence, Cashman was also sentenced to three years of supervised release and ordered to pay $50,057.32 in restitution. HAI, and its principal, Hugo Alonso, previously pleaded guilty and were sentenced. In total, 11 individuals have been apprehended and pleaded guilty in related corruption investigations.
DEFENDANT Criminal Case No. 14CR3621-GPC
Timothy Francis Cashman Age: 54 Lakeside, CA
SUMMARY OF CHARGES
Count 1: 18 U.S.C. § 371 - Conspiracy to commit bribery and theft of government property
Maximum Penalty: 5 years’ imprisonment and a $250,000 fine
Count 2: 26 U.S.C. § 7206(1) - Filing False Tax Return
Maximum Penalty: 3 years’ imprisonment and a $250,000 fine
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigations
General Services Administration – Office of Inspector General
Former Owner of Malden Chiropractic Practice Pleads Guilty to Federal Tax FraudRead the Press Release
BOSTON – A former owner of a Malden chiropractic practice pleaded guilty in U.S. District Court in Boston today to filing fraudulent personal federal tax returns and attempting to obstruct the IRS.
Paul E. Jondle, 61, of Salem, N.H., pleaded guilty to an indictment charging him with three counts of tax evasion and one count of obstructing the IRS. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Jan. 29, 2016.
Jondle operated a Malden chiropractic practice called Future Health. Jondle, who was barred from working as a chiropractor, used the names and tax identification numbers of licensed chiropractors working at Future Health for billing purposes, causing the insurance company payors to report the payments to the Internal Revenue Service as income to Jondle’s subcontractors. In fact, the payments, mailed to Jondle and deposited into bank accounts that he controlled, were income to Jondle. From 2003 through 2007, Jondle deposited approximately $3 million into his bank accounts, yet he reported no taxable income for those years, and paid no federal income taxes. During those years, Jondle spent hundreds of thousands of dollars on personal expenses including mortgage payments on his home, landscaping, tuition payments and pet spas.
The charge of tax evasion provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. The charge of obstructing the IRS provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistance was provided by the Massachusetts Insurance Fraud Bureau; U.S. Postal Inspection Service; and the U.S. Social Security Administration, Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Lori J. Holik and Rachel Y. Hemani of Ortiz’s Major Crimes Unit and Trial Attorney Jason M. Scheff of the Department of Justice’s Tax Division.
Former Fugitive Pleads Guilty to Embezzling $8.7 Million from EmployerRead the Press Release
CINCINNATI – James T. Hammes, 53, formerly of Lexington, Kentucky, pleaded guilty in U.S. District Court to one count of wire fraud and has agreed to pay nearly $7.7 million in restitution, specifically, approximately $6.7 million to G & J Pepsi-Cola Bottlers, Inc. and $1 million to Cincinnati Insurance Company.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Angela L Byers, Federal Bureau of Investigation (FBI) Special Agent in Charge - Cincinnati Division, announced the plea entered into today before Judge Susan J. Dlott.
According to court documents, from about 1998 through February 2009, Hammes embezzled more than $8.7 million from his employer, G & J Pepsi-Cola Bottlers, Inc., a large, privately held manufacturer and distributor of Pepsi products that is headquartered in Cincinnati.
Hammes served as a controller for the company, and was responsible for all financial accounting and internal controls for his division, including supervising accounts payable to vendors for services provided to the company’s division.
The defendant set up phantom vendor accounts and manipulated monthly accounting reports, using a miscellaneous account to charge off fraudulent checks and then manipulating legitimate accounts to offset the amounts carried in the miscellaneous account.
The stolen money that Hammes invested and traded generated IRS 1099 forms. Hammes voluntarily made estimated tax payments to the IRS totaling at least $2.7 million using the funds that he stole from his employer. Despite making the estimated tax payments, he failed to file tax returns for multiple tax years.
Hammes was questioned about the issuance of possible fraudulent checks in February 2009, at which time he fled and spent the majority of six years as a fugitive hiking the Appalachian Trail and living under an alias, which belonged to a real person. Federal criminal charges were filed against Hammes and he was arrested in Virginia in May 2015.
Hammes faces a potential maximum sentence of 20 years in prison.
U.S. Attorney Stewart commended the cooperative investigation led by the FBI Cincinnati Division, with assistance from FBI- Richmond Division, FBI- Indianapolis Division, Internal Revenue Service – Criminal Investigations, and the US Marshal’s Service, as well as Assistant United States Attorney Emily N. Glatfelter and Criminal Chief Kenneth L. Parker, who are prosecuting the case.
Former Finance Director of Alaska Inter-Tribal Council Sentenced in Federal Court for Theft of FundsRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that the former Finance Director of the Alaska Inter-Tribal Council (“AITC”), a non-profit organization which advocates in support of tribal governments throughout Alaska, was sentenced in federal court in Anchorage to five years of probation, with a requirement that he serve 120 days of community confinement, for his theft of funds belonging to the organization. Thomas R. Purcell, 52, of Anchorage, who served as the Finance Director of AITC from January 2008 until February 2009, admitted to stealing or misappropriating approximately $22,270 in AITC funds while he served in that capacity. Purcell was also ordered to pay $22,270 to AITC in restitution, and was fined an additional $15,000 by United States District Judge Sharon L. Gleason.
According to Assistant U.S. Attorney Joseph Bottini, AITC received substantial federal funding in 2008 and 2009 – including a federal grant from the United States Environmental Protection Agency of in excess of a million dollars. As the Finance Director, Purcell was responsible for managing all of AITC=s financial accounts, including account reconciliation, and payroll operations. The investigation established that Purcell was able to steal the funds through an unauthorized salary increase.
Purcell was indicted by a federal grand jury in August 2013 together with co-defendant Steven Osborne, the former Executive Director of AITC. Purcell pled guilty in April 2015 to one count of Theft from an Organization Receiving Federal Funds. Osborne also pled guilty to one count of stealing approximately $145,000 from AITC, and on October 22, 2015, he was sentenced to 21 months in prison by United States District Judge Sharon L. Gleason. Purcell, who had cooperated with the government during the investigation and subsequent prosecution, received a reduced sentence in recognition of his cooperation.
Two individuals associated with AITC addressed the court at Purcell’s sentencing and noted that as a result of the thefts committed by Osborne and Purcell, AITC became ineligible for further federal funding because the organization was considered “high risk”. Without federal funding, AITC was basically rendered a defunct organization, and it remains so today.
Ms. Loeffler commends the U.S. Environmental Protection Agency, Office of Inspector General and the Federal Bureau of Investigation for the investigation of this case.
Former Federal Employee Labor Union President Indicted in White Plains Federal Court for Stealing Union FundsRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, Andriana Vamvakas, the New York District Director of the Department of Labor’s Office of Labor-Management Standards (“DOL-OLMS”), and Jeffrey G. Hughes, Special Agent-in-Charge of the Northeast Field Office of the U.S. Department of Veterans Affairs, Office of the Inspector General (“VA OIG”), announced the indictment of WILLIAM DAVIS, a former president of the American Federation of Government Employees (“AFGE”) Local 1119 (the “Union”), for making at least $120,000 in unauthorized debit card charges and cash withdrawals from the Local’s bank account. The Indictment charges DAVIS with one count of wire fraud and two counts of false statements in forms submitted to the DOL-OLMS. DAVIS voluntarily surrendered to federal authorities yesterday morning, and was presented yesterday afternoon in White Plains federal court before United States Magistrate Judge Lisa Margaret Smith.
According to the allegations in the Indictment[1]:
The AFGE is a national labor union that represents approximately 670,000 workers employed by the federal government across all agencies and departments. The Union is a local union chapter of AFGE that represents approximately 300 employees of the Veterans Affairs Medical Center-Montrose (the “Hospital”), and maintains offices on the Hospital’s campus in Montrose, New York. At all times relevant to the Indictment, the Union maintained a checking account (the “Union Bank Account”) for Union funds, including members’ dues payments.
From at least January 2008 through in or about October 2012, DAVIS served as the elected president of the Local. As the president, it was DAVIS’s duty to preside over the Union’s meetings and conduct the day-to-day affairs of the Union. During that time period, DAVIS used a debit card for the Union Bank Account (the “Union Debit Card”) issued to a deceased former Union officer to make hundreds of charges and cash withdrawals for non-Union expenses and without the authorization of the Union. For example, DAVIS used the Union Debit Card at stores and online retailers including Apple, Best Buy, Wal-Mart, and Radio Shack, purchasing items for his personal benefit including electronics, music downloads, video games, cellphones, men’s clothing, gasoline, and cigarettes. DAVIS purchased money orders using the Union Debit Card which totaled at least $30,000 from the United States Post Office in Montrose, New York. On several occasions, DAVIS paid for rent for his residence using the money orders he purchased with the Union Debit Card. DAVIS also used the Union Debit Card to make over 900 cash withdrawals from ATM machines in the Southern District of New York and elsewhere, in the process incurring thousands of dollars of ATM fees and fees for insufficient funds. Between January 2008 and June 2012, the unauthorized purchases and cash withdrawals that DAVIS made with the Union Debit Card totaled in excess of $120,000.
In order to conceal his misuse and theft of Union funds, DAVIS also made false statements and omissions in annual DOL-OLMS reports for the fiscal years 2008, 2009, 2010, and 2011, reporting a total of only $7,000 in allowances and disbursements to himself as president.
* * *
DAVIS, 56, of Wappingers Falls, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and two counts of false statements, which each carry a maximum sentence of five years in prison. 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 a judge.
Mr. Bharara thanked and praised the DOL and the VA OIG for their work in this investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Jessica K. Feinstein is in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Connecticut Resident Sentenced to over Eight Years in Prison for Attempting to Send U.S. Military Technology to IranRead the Press Release
Mozaffar Khazaee, 61, formerly of Manchester, Connecticut, was sentenced today to 97 months in prison and ordered to pay a $50,000 fine by U.S. District Judge Vanessa L. Bryant of the District of Connecticut for violating the Arms Export Control Act by attempting to send to Iran highly sensitive, proprietary, trade secret and export controlled material relating to U.S. military jet engines, which he had stolen from multiple U.S. defense contractors where he had previously been employed.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Deirdre M. Daly of the District of Connecticut, Special Agent in Charge Matthew Etre of U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) Boston, Assistant Director Randall C. Coleman of the FBI’s Counterintelligence Division, Special Agent in Charge Craig W. Rupert of the Defense Criminal Investigative Service (DCIS) Northeast Field Office, Special Agent in Charge Danielle Angley of the Air Force Office of Special Investigations and Special Agent in Charge John McKenna of the Department of Commerce's Office of Export Enforcement Boston Office made the announcement.
“Mozaffar Khazaee exploited his privileged access to national security assets to steal highly sensitive military technology with the intent of providing it to Iran,” said Assistant Attorney General Carlin. “Violations of the Arms Export Control Act, particularly those involving attempts to transfer sensitive defense technology to a foreign power, are among the most significant national security threats we face, and we will continue to leverage the criminal justice system to prevent, confront, and disrupt them.”
“Mozaffar Khazaee betrayed his defense contractor employers and the national security interests of the United States by stealing and attempting to send to Iran voluminous documents containing highly sensitive U.S. defense technology,” said U.S. Attorney Daly. “U.S. companies are being relentlessly targeted by those who seek to steal our intellectual property, our trade secrets and our advanced defense technology – whether through a computer hack or cyber intrusion, or through an insider or rogue employee. As this case demonstrates, we will aggressively investigate and hold accountable those who attempt to steal trade secrets and military technology from U.S. industries, whether for their own personal gain or for the benefit of foreign actors.”
“Stopping people like Mozaffar Khazaee from providing U.S. military technology to foreign powers is crucial to our national security interests,” said Special Agent in Charge Etre. “It’s abundantly clear from court records that this individual intended to harm U.S. interests both here and abroad. HSI will continue to work with our federal law enforcement partners to ensure that advanced U.S. military technology is not stolen and illegally exported for the benefit of foreign entities.”
“Mr. Khazaee abused a position of trust and responsibility by stealing trade secrets and sensitive information belonging to defense contractors developing some of our most advanced aircraft,” said Assistant Director Coleman. “His actions could have put our national security at risk. Stopping his plan and holding him accountable for his betrayal was a whole-of-government effort. We will use all available legal means to pursue individuals willing to help our adversaries by stealing our technical know-how.”
“The evidence developed during this investigation and today’s sentencing of Mr. Khazaee illustrate the potential for harm to the U.S. through illegal exportation of sensitive documents and technology,” said Special Agent in Charge Rupert. “DCIS, along with our partner agencies, continues to prioritize and pursue these investigations to curtail any adverse impact to America's warfighters and shield America's investment in national defense.”
“This case was enabled by the outstanding teamwork amongst the many federal law enforcement agencies and U.S. Attorney’s office,” said Special Agent in Charge Angley. “Critical was the ability to leverage subject matter experts from the Air Force’s acquisition community who provided the technical assessments of the high value technology. While the conclusion of this case neutralized the threat of this particular person, it also highlights the need for continued and ever more vigilant protection of our critical technologies.”
“Today's sentencing demonstrates the ongoing cooperation between the U.S. Department of Commerce and other federal law enforcement partners working together in unison to prevent sensitive U.S. origin technology from falling into the wrong hands,” said Special Agent in Charge McKenna.
According to court documents and statements made in court, at different times between 2001 and 2013, Khazaee, a dual citizen of Iran and the United States with a Ph.D. in mechanical engineering, was employed by three separate defense contractors. From at least 2009 through late 2013, Khazaee offered to provide trade secret, proprietary and export controlled defense technology that he had stolen from his U.S. employers to gain employment with state-controlled technical universities in Iran.
Beginning in late 2009, Khazaee corresponded by email with an individual in Iran to whom he attempted to send and in some cases did send documents containing trade secret, proprietary and export controlled material relating to the Joint Strike Fighter (JSF) Program. In one email Khazaee stated that the material he had attached was “very controlled . . . and I am taking [a] big risk.” Khazaee instructed the individual in Iran, “after downloading,” he should “delete everything immediately.”
Analysis of Khazaee’s computer media also revealed cover letters and application documents, dating from 2009 through late 2013, which Khazaee sent to multiple state-controlled technical universities in Iran. In those materials, Khazaee stated that as “lead engineer” in various projects with U.S. defense contractors, he had learned “key technique[s] that could be transferred to our own industry and universities.” Khazaee stated that he wanted to “move to Iran,” that he was “looking for an opportunity to work in Iran,” and that he was interested in “transferring my skill and knowledge to my nation.”
In or about November 2013, while residing in Connecticut, Khazaee attempted to send a large shipping container to Iran. The shipment included, in numerous boxes and on computer media, thousands of highly sensitive technical manuals, specification sheets, test results, technical drawings and data and other proprietary material relating to U.S. military jet engines, including those relating to the U.S. Air Force’s F35 JSF program and the F-22 Raptor. The materials in the interdicted shipment had been stolen from U.S. defense contractors where Khazaee had worked and many documents were prominently labeled with strict export control warnings. Khazaee did not apply for nor did he obtain any license to export any of the documents and the export or attempted export of such material to Iran is illegal.
On Jan. 9, 2014, Khazaee was arrested at the Newark Liberty International Airport before boarding a flight to Iran. Search warrants executed on Khazaee’s checked and carry-on luggage revealed additional hard copy documents and computer media containing sensitive, proprietary, trade secret and export controlled documents relating to U.S. military jet engines. Khazaee was also found in the possession of $59,945.00 in as-yet undeclared cash, which he had split up into increments of approximately $5,000 and secreted in multiple bank envelopes in various places in his carry-on luggage.
The hard copy and electronic material that Khazaee stole and sought to transfer to Iran totaled some 50,000 pages and was reviewed by experts from both the U.S. Air Force and the victim defense contractors. In addition to the materials relating to the JSF Program and the F-22 Raptor, Khazaee also had documents from numerous other U.S. military engine programs, including the V-22 Osprey, the C130J Hercules and the Global Hawk engine programs. In total, Khazaee sought to export approximately 1,500 documents containing trade secrets and approximately 600 documents containing highly sensitive defense technology.
According to analyses by the U.S. Air Force and victim defense contractors, the technical data that Khazaee stole would have helped Iran “leap forward” ten years or more in academic and military turbine engine research and development, reducing their investment in such technology by one to two billion dollars and potentially enhancing the development and effectiveness of their weapon systems.
Khazaee has been detained since his arrest on Jan. 9, 2014. On Feb. 25, 2015, he pleaded guilty to one count of unlawful export and attempted export of defense articles from the U.S. in violation of the Arms Export Control Act.
This case was investigated by the ICE-HSI’ New England Division, the FBI’s New Haven Division, the Defense Criminal Investigative Service in New Haven, the U.S. Air Force’s Office of Special Investigations in Boston and the Department of Commerce’s Office of Export Enforcement in Boston.
Assistant Attorney General Carlin and U.S. Attorney Daly also commended the efforts of the many other agencies and offices that were involved in this investigation, including the U.S. Attorney’s Offices of the Central District of California, the Southern District of Indiana and the District of New Jersey; ICE-HSI in Los Angeles; the U.S. Customs and Border Protection Service (CBP) in Los Angeles; the U.S. Air Force’s Office of Special Investigations in Los Angeles; as well as ICE-HSI, CBP and FBI in New Jersey; and HSI, FBI and DCIS in Indianapolis.
This case is being prosecuted by Assistant U.S. Attorney Stephen Reynolds of the District of Connecticut and Trial Attorney Brian Fleming of the Justice Department’s Counterintelligence and Export Control Section.