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4 December 2015
French National Sentenced to 24 Months in Prison for Alien SmugglingRead the Press Release
St. Thomas, USVI- District Court Judge Curtis V. Gomez today sentenced Alain Rene Leichtnam, 71, a French national, to 24 months in prison for alien smuggling, United States Attorney Ronald W. Sharpe announced. Leichtnam also was ordered to serve two years of supervised release, 200 hours of community service and pay a $3,800 special assessment.
On August 12, 2015, Leichtnam pleaded guilty to encouraging and inducing aliens to enter the United States in violation of law. As part of his plea, Leichtnam admitted that on April 29, 2015, the sailing vessel Mazurka, operating with no lights, entered United States waters heading towards Coral Bay on the East End of St. John, Virgin Islands. The vessel was intercepted by Customs and Border Protection (CBP) agents who observed Leichtnam operating the vessel and identified 38 Cuban nationals and one St. Lucian national onboard. CBP agents observed that the vessel was grossly overloaded and did not have a sufficient number of life jackets and life rafts for the number of people onboard. Leichtnam admitted that he transports people to the United States for financial gain knowing that such conduct is unlawful.
“Those responsible for encouraging and inducing immigrants to enter the United States illegally are placing personal profit ahead of public safety and the lives of the immigrants,” U.S. Attorney Sharpe said. “This conviction should warn those involved in this dangerous and illegal activity that it comes with a high price.”
Angel M. Melendez, special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Puerto Rico and the U.S. Virgin Islands said: “ICE continues to be committed to putting an end to the practice of profiting from the illegal transportation of aliens across our borders and throughout our country. We will continue to vigorously enforce the federal laws which punish the many manifestations of the complex problem of smuggling, trafficking and harboring illegal aliens. Tragically, many have lost their lives while attempting this illegal and treacherous trip. Human smugglers have a callous disregard for the value of human life and are only concerned about making a profit. ICE will continue to aggressively work with our U.S. Department of Homeland Security (DHS) partners to identify and arrest those involved in this illicit and dangerous activity.”
The case was investigated by ICE with the assistance of CBP and the United States Coast Guard. It was prosecuted by Assistant United States Attorney Kim L. Chisholm.
Former Tifton Banking Company CEO and President Enters Plea to FraudRead the Press Release
A former bank president entered a guilty plea today for his role in a bank fraud scheme in which he hid underperforming and at-risk loans from the bank and the Federal Deposit Insurance Corporation (FDIC), among others, announced Acting U.S. Attorney G.F. Peterman, III of the Middle District of Georgia.
Gary Patton Hall Jr., 49, of Tifton, Georgia, pled guilty before Senior U.S. District Court Judge Hugh Lawson in Macon, Georgia to one count of conspiracy to commit bank fraud and one count of conspiracy to commit fraud against the United States.
According to facts stipulated in the plea agreement, Mr. Hall was the president and Chief Executive Officer of Tifton Banking Company (TBC) from August 2005 until June 2010. During that time, Mr. Hall was engaged in an ongoing scheme to mislead the bank and its loan committee about loans TBC made to local individuals and businesses. As part of the scheme, Mr. Hall hid past due loans from the FDIC and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking. Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.
Mr. Hall admitted that in certain transactions in which he exercised approval authority, Mr. Hall hid his personal and business interests. In one instance, Mr. Hall approved loans to the buyer of a condominium in Panama City Beach, Florida, owned by Mr. Hall himself. In doing so, he made false representations about the loans to TBC's loan committee and failed to disclose his personal interest in the transaction. When the buyer's loan payments became delinquent, Mr. Hall hid the loans from both the FDIC and state regulators. Mr. Hall received $50,000 profit from the sale of his condominium in this transaction, the entire purchase price being funded by an unsecured loan to the buyer approved by him. The buyer eventually declared bankruptcy resulting in a loss of more than $400,000 to TBC.
Mr. Hall also admitted to making fraudulent representations which led to commercial loan guarantees being issued by the United States Small Business Administration and the United States Department of Agriculture on two other loan transactions. The loans were made by TBC, and guaranteed by the government agencies, to refinance earlier non-performing commercial loans made by TBC as part of the scheme to mislead bank regulators and hide the bank's true financial condition. Those guaranteed loans resulted in losses to the bank and the agencies of more than $2 million.
TBC was closed by the Georgia Department of Banking and Finance in November 2010 due to its poor financial condition. At that time, TBC had not repaid the $3.8 million it received from the Department of Treasury's Troubled Asset Relief Program.
Mr. Hall faces a potential statutory penalty often (10) years imprisonment and a potential fine of up to twice the loss amount, or both. Hall agreed in entering the plea that he owes restitution to the bank and federal agencies in the amount of $3,931,018 for losses suffered.
Acting United States Attorney G.F. Peterman, III said, "The greed of Mr. Hall and the abuse of the trust placed in him by the Tifton Banking Company and its depositors, investors, and employees, as well as the taxpayers of the United States, has had a deleterious effect on his community and its faith in the banking industry. Others have paid a high price for his misdeeds. Hopefully today's plea of guilty to his crimes can facilitate some degree of healing for those he has harmed."
"While the taxpayer entrusted Hall, the President and CEO of Tifton Banking Company, with 3.8 million of TARP funds, Hall abused that trust to deceive the banking regulators, the public and the bank's loan committee," said Christy Goldsmith Romero, Special Inspector General for TARP (SIGTARP). "Hall covered up past due loans to mask the poor financial condition of the bank and hid his personal and business interests in loans. His crime directly caused over 3.9 million in losses to the bank and federal agencies. Tifton Banking Company failed in 2010 causing a total loss to the taxpayer of the 3.8 million in TARP funds plus over 50 thousand dollars in missed dividends. SIGTARP and its law enforcement partners will continue to investigate vigorously the financial industry and bankers to bring accountability and justice for TARP-related crime."
Jason T. Moran, Special Agent in Charge, FDIC Office of lnspector General, stated: "The Federal Deposit Insurance Corporation Office of Inspector General is pleased to have joined the United States Attorney's Office and our law enforcement colleagues in investigating the fraud that led to the conviction of Mr. Hall. It is particularly troubling when bank insiders violate the public trust and engage in activities that impact the safety and soundness of our nation's banks."
The case was investigated by the FBI, the Special Inspector General for the Troubled Asset Relief Program, the Small Business Administration's Office of the Inspector General, the Federal Deposit Insurance Corporation's Office of the Inspector General, the Department of Agriculture's Office of Inspector General and the Tift County Sheriff’s Office. The case is being prosecuted by Senior Trial Attorney N. Nathan Dimock of the Criminal Division's Fraud Section and Assistant U.S. Attorney Robert McCullers of the Middle District of Georgia.
"The SBA Office of Inspector General will aggressively investigate and seek criminal prosecution or civil remedies when fraud is perpetrated against the SBA by corrupt lenders," said Inspector General Peggy E. Gustafson. "SBA's loan programs are designed to provide eligible small businesses access to capital to finance and grow their businesses, not those engaged in illegal activity. I would like to thank the U.S. Attorney's Office for its dedicated leadership and professionalism throughout this investigation."
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney's Office, at (478) 621-2603.
Former Telemarketing Manager Sentenced to More Than Seven Years in Federal PrisonRead the Press Release
Orlando, Florida – Senior U.S. District Judge John Antoon, II has sentenced Mark Gardner (29, Osteen) to seven years and three months in federal prison for his role in the operation of a boiler room. He was also ordered to pay more than $1.2 million in restitution to his victims. Gardner pleaded guilty on August 17, 2015.
According to court documents, Gardner and his codefendant, Tammie Lynn Cline (33, Leominster, MA), operated a boiler room in Central Florida. Along with the telemarketers who worked at their call center, they would make unsolicited calls to owners of timeshare properties located throughout the United States. During those calls, they claimed that they worked for Universal Timeshare Sales Associates (UTSA) out of Beaverton, Oregon; that UTSA had a purchaser who was interested in buying a timeshare; and that the timeshare owner just needed to pay a fee between $1,600 and $2,200 for the sale to proceed.
In order to convince timeshare owners to pay the fee, the conspirators would sometimes claim that an interested purchaser was present in the showroom ready to buy a timeshare, that a buyer had already deposited money into an escrow account for the sale, or that the sale would take place in about 90 days. Those representations were false. The timeshares were not sold as had been promised, and members of the conspiracy would deny or ignore requests for refunds, and would dispute chargebacks with the credit card companies.
In total, victims lost more than $1.2 million as a result of the scheme.
In May 2013, the Federal Trade Commission and the Florida Attorney General’s Office filed a civil action against Gardner, Cline, and others in federal court. In June 2014, the district court entered a permanent injunction against them related to certain telemarketing practices.
Cline was also prosecuted for her role in the conspiracy. On October 30, 2015, she was sentenced to 30 months in federal prison. She was also ordered to pay $1.2 million in restitution to her victims.
This case was investigated by Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Roger B. Handberg.
Former Corrections Officer Pleads Guilty to Smuggling Marijuana and Alcohol into Cook County JailRead the Press Release
CHICAGO — A former Cook County Corrections Officer admitted in federal court today that he smuggled marijuana, tobacco and alcohol into the Cook County Jail.
JASON MAREK delivered the contraband to a jail inmate after tucking it into sandwiches and sneaking it past security, according to a written plea agreement. In exchange for his efforts, Marek received cash payments from the inmate’s wife, the plea agreement states.
Marek, 30, pleaded guilty to one count of federal program bribery. The conviction carries a maximum sentence of ten years in prison. U.S. District Judge Charles R. Norgle will schedule a sentencing hearing at a later date.
Marek was assigned to a maximum-security tier of the jail when he smuggled in the goods in May and June 2013. After initially selling used chewing tobacco to the inmate for $200, Marek and the inmate agreed to deal the marijuana and alcohol, according to the plea agreement. The inmate arranged for his wife to meet Marek at a location outside of the jail in order for Marek to receive payment for his services, the plea agreement states.
Marek admitted knowing that the inmate planned to sell the contraband to other inmates within the jail, according to the plea agreement.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Cook County Sheriff Thomas J. Dart; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorneys Megan Cunniff Church and Michelle Nasser.
Plea Agreement
Former Bergen County, New Jersey, Democratic Chairman Sentenced to 35 Months in Prison on Racketeering ChargesRead the Press Release
NEWARK, N.J. – The former chairman of the Bergen County Democratic Organization (BCDO), was sentenced today to 35 months in prison for his role in a racketeering scheme involving fraud and soliciting and accepting bribes as a party official, U.S. Attorney Paul J. Fishman announced.
Joseph A. Ferriero, 58, was found guilty in April 2015 following an eight-week trial before U.S. District Judge Esther B. Salas in Newark federal court. The jury deliberated four days before finding Ferriero guilty of conducting the BCDO’s affairs through a pattern of racketeering activity (Count One), using the mail and facilities in interstate commerce to promote bribery and distribute bribe proceeds (Count Three) and wire fraud (Count Five).
“The sentence handed down today to Joseph Ferriero is the final result of his running a local political organization as a criminal enterprise,” U.S. Attorney Fishman said. “He used his power and position to enrich himself through a racketeering operation fueled by influence peddling, bribes and kickbacks. Punishing this kind of political corruption has been – and continues to be – a priority for this office.”
“Today’s sentencing of Joseph A. Ferriero reaffirms the FBI’s commitment to combat public corruption in New Jersey and serves as a reminder that those individuals who violate the public’s trust will be held accountable,” Richard M. Frankel, FBI Special Agent in Charge, of the Newark Division, said.
According to documents filed in this case and the evidence at trial:
Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC. The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer, that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained as a result of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.
In addition to the prison term, Judge Salas sentenced Ferriero to three years of supervised release, ordered him to pay restitution of $11,875 and entered an order of forfeiture for $11,875.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel, and investigators from the U.S. Attorney’s Office, under the direction of Supervisory Criminal Investigator Thomas Mahoney, with the investigation leading to today’s sentencing.
The government is represented by Counsel to the U.S. Attorney Rachael A. Honig and Assistant U.S. Attorney Barbara Llanes of the Special Prosecutions Division in Newark.
Defense counsel: Michael Baldassare, Jennifer Mara and Dillon Malar Esqs., Newark
Former Army Energy Program Manager at Fort Knox Guilty of Violating Conflict of Interest LawsRead the Press Release
LOUISVILLE, Ky. - Gary Thomas Meredith, age 68, of Leitchfield, Kentucky, pleaded guilty yesterday in Federal District Court in Louisville, Kentucky, to violating conflict of interest laws. After one day of trial, Meredith, a retired federal employee, admitted that while he was a federal employee he was personally and substantially involved in the creation of a contract in which he had a direct financial interest announced United States Attorney John E. Kuhn, Jr.
For over 20 years Meredith was the Energy Manager at Fort Knox. As the Energy Manager, Meredith was responsible for developing and implementing energy savings measures at Fort Knox. As part of those duties, Meredith had worked closely Nolin Rural Electric Cooperative Corporation (Nolin) on nearly 100 energy conservation projects, worth over $250 million.
Due to an increasing work load, in 2005 Fort Knox began to consider developing a contractor position, called a Resource Efficiency Manager (REM), to perform the same duties as the Energy Manager, and to work in tandem with the Energy Manager. The REM was going to be hired through Nolin. Gary Meredith was interested in retiring and becoming the REM after his retirement, and in April 2005 he sent emails to Nolin and another company in which he discussed working for them as the REM at Fort Knox. In one email, Meredith, discussing the REM position, stated “have considered doing it myself . . . retire (and I can), and come back on Monday as a REM, IN THE SAME CHAIR, probably same office and be off the Government rolls.” In a subsequent emails Meredith stated “It’s about money.”
While he was still a federal employee, Meredith reached an agreement with Nolin that he would work for Nolin as a REM contractor when he retired. Fort Knox officials were unaware of Meredith’s arrangements with Nolin and Meredith’s interest in the REM position. In October 2005 Meredith began drafting the documents necessary to create the REM position, and in September 2006 Meredith secretly misappropriated over $582,000 to provide future funding for the REM position. In December 2006, while still a federal employee, Meredith completed all of the Fort Knox documents necessary to create the REM position, and he also created Nolin’s proposal for the REM position. Meredith also negotiated the pricing of the REM position with Nolin on behalf of Fort Knox, even though he already had an arrangement with Nolin that he was going to be the REM when he retired.
In July 2007 Meredith obtained an ethics opinion from a Fort Knox ethics advisor which stated that Meredith could work for Nolin as a REM contractor. The ethics advisor was unaware that Meredith had a personal financial interest in the REM position dating back to April 2005, that Meredith had misappropriated over $582,000 to fund the REM position, and that Meredith had prepared Nolin’s proposal. Meredith retired from the Army on August 31, 2007, and became Nolin’s REM on October 1, 2007. Meredith was earning over $80,000 per year when he retired, but earned over $165,000 per year as the REM.
After Meredith became the REM, he instructed Nolin to intentionally overbill Fort Knox for natural gas, even though the contract between Nolin and Fort Knox set the contract price and did not permit any additional billings. Nolin billed Fort Knox as instructed, and Meredith approved Nolin’s invoices for payment, resulting in over $900,000 in overbillings to Fort Knox.
After Meredith became the REM he also began invoicing in advance for his REM salary. For example, in October 2009 he invoiced Nolin for one year of salary in advance, over $177,000. Nolin paid Meredith’s salary in advance, even though Nolin employees were unaware of any other Nolin employee or contractor who was paid in advance. Nolin then immediately charged those costs to Fort Knox and Meredith approved Nolin’s invoices for payment, even though Meredith knew that Nolin could not legally require Fort Knox to pay for services in advance. As a result of these advance payments, Fort Knox lost thousands of dollars of interest.
Meredith’s guilty plea brought to a close a five and a half year criminal investigation of the Fort Knox Energy Program. On September 8, 2014, the Department of Defense, Office of the Inspector General (OIG), published the results of an audit of the Fort Knox Energy Program Meredith oversaw prior to his retirement. In the audit, the OIG found that Fort Knox had improperly awarded and administered over $250 million in energy-savings projects with Nolin. The report found that Fort Knox failed to establish internal controls, failed to determine whether the government paid fair and reasonable prices, and “spent millions on projects that may not have achieved sufficient energy savings.” http://www.dodig.mil/reports.html/Article/1119054/fort-knox-and-the-army-need-to-improve-internal-controls-for-utility-energy-ser/
On October 1, 2014, Matthew Bowman, a former Ft. Knox ethics attorney and procurement fraud advisor, pleaded guilty to providing a false document to Defense Criminal Investigations Service (DCIS) Special Agent Jared Camper in 2010 in a failed attempt to shut down the investigation into Meredith. Bowman was sentenced to one year of probation, and was subsequently debarred from working on any government contracts.
On April 9, 2015, Nolin and the United States entered into a Non-Prosecution Agreement in which Nolin agreed to pay over $7.6 million in civil penalties and forfeitures resulting from its business dealings with Meredith and Fort Knox.
The case was investigated by the Defense Criminal Investigative Service, Dayton Resident Agency. The Army Criminal Investigations Command, Columbus Resident Agency, the Defense Contract Audit Agency, also assisted with the investigation. The case was prosecuted by Assistant United States Attorneys David Weiser and Marisa Ford. Meredith is scheduled for sentencing on March 9, 2016.
Federal Jury Finds Placer County Women Guilty in Multimillion Dollar Mortgage Fraud SchemeRead the Press Release
SACRAMENTO, Calif. -- After a 16-day trial, a federal jury today found Vera Kuzmenko, 45, of Loomis, and Rachel Siders, 40, of Roseville, guilty of multiple counts of mail and wire fraud associated with their involvement in a mortgage fraud scheme that cost financial institutions over $16 million, United States Attorney Benjamin B. Wagner announced.
Vera Kuzmenko was also found guilty of witness tampering and money laundering associated with the scheme.
According to evidence presented at trial, from late 2006 through early 2008, the defendants engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento area. The defendants were responsible for securing more than $30 million in residential mortgage loans on more than 30 homes purchased through straw buyers. Records introduced at trial showed Vera Kuzmenko received millions of dollars and Rachel Siders received hundreds of thousands of dollars.
Vera Kuzmenko, who had been a licensed real estate agent for part of the scheme, created fraudulent loan applications on behalf of the straw buyers. The loan applications contained materially false information as to the straw buyers’ income, employment, assets, and intent to occupy the residences. The loan paperwork also hid from lenders millions of dollars of payments that went to the defendants. Vera Kuzmenko also served as a straw-buyer herself. With respect to the witness tampering count, the evidence showed that after Kuzmenko learned the FBI was investigating her, she told various witnesses to lie to the FBI and blame a dead woman for the fraud.
Rachel Siders ran the Rocklin office of the escrow company used on the majority of the transactions. She helped funnel millions of dollars to the defendants, which was not disclosed to the lenders.
“Vera Kuzmenko was a major figure in a network of fraudsters responsible for a wave of mortgage fraud that hit the Sacramento area,” said U.S. Attorney Benjamin B. Wagner. “As the guilty verdicts in this case demonstrate, mortgage fraudsters who believe they can escape accountability for their crime by blaming others and offering false alibis are mistaken.”
“Vera Kuzmenko and her associates intentionally victimized their community, abusing trust to significantly damage the financial wellbeing of victims and negatively impact regional economy. This greed-fueled, multimillion dollar fraud scheme had a lasting, negative effect on the regional real estate market,” said Assistant Special Agent in Charge Manuel Alvarez of the FBI’s Sacramento field office. “We hope today’s verdict serves as a warning to would-be fraudsters that the FBI will aggressively pursue perpetrators of large, complex financial fraud to protect regional economies and ensure justice for their victims.”
“Mortgage fraud is an incredibly destructive crime that leaves many victims in its wake,” said IRS-Criminal Investigation Acting Special Agent in Charge, Andrew Toth. “The impact on homeowners and communities is devastating. While this verdict cannot reverse the damage caused by these defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Lee S. Bickley and Michael D. Anderson and Special U.S. Attorney David J. Ward are prosecuting the case.
The defendants are scheduled to be sentenced by United States District Judge John A. Mendez on March 15, 2016. Each defendant faces a maximum statutory penalty of 20 years in prison on each of their counts of conviction for wire and mail fraud. Vera Kuzmenko faces an additional 20 years for each count of conviction for witness tampering and money laundering. 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.
On October 20, 2015, Judge Mendez sentenced co-defendants Peter Kuzmenko, 37, of West Sacramento, to 19 years in prison; Aaron New, 41, of Sacramento, to 11 years and three months in prison; Nadia Kuzmenko, 36, formerly of Loomis, to eight years in prison; and Edward Shevtsov, 51, of North Highlands, to eight years in prison. They were found guilty on February 13, 2015, after a 21-day trial, of multiple counts of mail and wire fraud associated with the mortgage fraud scheme. In addition, Peter Kuzmenko, Edward Shevtsov, and Aaron New were found guilty of money laundering associated with the scheme, and Nadia Kuzmenko was found guilty of witness tampering.
Federal Indictments Charge 25 Alleged Members of Syndicato De Nuevo Mexico (SNM) Prison Gang with Participation in Violent Racketeering EnterpriseRead the Press Release
ALBUQUERQUE – A federal grand jury has returned two indictments charging a total of 25 defendants with participating in a violent racketeering enterprise known as the Syndicato de Nuevo Mexico (SNM) Prison Gang. The racketeering indictments, which were filed on Dec. 1, 2015, and were unsealed yesterday, allege that the defendants conspired to violate federal racketeering laws by conspiring to commit violent crimes, including murder, attempted murder and assault, in aid of their racketeering enterprise. The indictments are the result of a multi-agency investigation led by the Albuquerque Division of the FBI that culminated yesterday with a law enforcement operation during which all but two of the defendants charged were arrested.
The racketeering indictments and the results of yesterday’s law enforcement operation were announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Acting Special Agent in Charge Bryan Finnegan of the FBI’s Albuquerque Division, Director Jerry Roark of the Adult Prison Division of the New Mexico Corrections Department, U.S. Marshal Conrad E. Candelaria, New Mexico State Police Chief Pete N. Kassetas, Bernalillo County Sheriff Manuel Gonzales, III, and Albuquerque Police Chief Gorden Eden, Jr.
In announcing the indictments, U.S. Attorney Damon P. Martinez said “The results of this investigation demonstrate the resolve of the law enforcement community in New Mexico to work together to make our communities safer and better places to live, work and raise families.” The U.S. Attorney noted that the two cases are being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates are amongst the highest in the nation, New Mexico’s law enforcement community has been collaborating to target repeat offenders from counties with the highest violent crime rates under this initiative.
“Our office has worked in close conjunction with the U.S. Attorney’s Office with tremendous success, and this matter is an excellent example of that relationship,” said 2nd Judicial District Attorney Kari E. Brandenburg. “Our community is best served by this type of collaboration amongst law enforcement agencies, and we are pleased to be a part of that process. Federal prosecution of those involved will ensure they are held accountable at the strongest and most stringent level, and put our community another step ahead of the criminal element trying to underscore public safety on our streets and in our neighborhoods.”
“Nothing is more important to the FBI than protecting the American people. That's why we teamed up with our partners and set our sights on a large, violent prison gang that for more than 30 years used murder, kidnapping and assault to intimidate their fellow inmates as well as our communities,” said Acting Special Agent in Charge Bryan Finnegan. “The FBI will continue to strengthen our partnerships, share intelligence, and look for ways to pool our resources to get violent criminals off our streets – and keep them from operating in our prisons when we put them there. I want to thank not only the Albuquerque FBI Special Agents and support staff who worked on this investigation, but also the U.S. Attorney's Office, the El Paso, Phoenix, Denver, Las Vegas and Knoxville FBI Divisions, U.S. Marshal's Service, New Mexico Corrections Department, New Mexico State Police, Bernalillo County Sheriff's Department and Metropolitan Detention Center, and the Albuquerque Police Department.”
“Today is a realization towards true public safety and the New Mexico Corrections Department is proud to contribute,” said Jerry Roark, Director of the Adult Prison Division of the New Mexico Corrections Department. “These arrests help us in our mission is to provide safer prisons for those in our care.”
The two racketeering indictments allege that the 25 defendants charged were members and associates of the SNM Prison Gang, a state-wide gang operating in New Mexico prisons and in communities throughout the state. According to the racketeering indictments, the SNM Prison Gang was formed in the early 1980s at the Penitentiary of New Mexico after the prison riot in Feb. 1980, and expanded throughout the New Mexico penal system. Gang members and associates allegedly are expected to remain loyal to the Gang and work to further its objectives after they have completed their prison sentences and those who do not are allegedly subject to violent forms of discipline. The racketeering indictments allege that significant goals of the SNM Prison Gang include controlling and profiting from drug trafficking both within and outside the penal system; intimidating and influencing other gangs for the purpose of expanding the network for its illegal activities; and engaging in violence to assert its gang identity and protect its territory.
The first of the racketeering indictments charges 24 alleged SNM Prison Gang members and associates with committing four murders, conspiring to commit three murders and conspiring to commit a violent assault for the purpose of gaining entrance to and maintaining and increasing their positons within the SNM Prison Gang, an enterprise engaged in racketeering activity. The indictment includes Notices of Special Findings against the 12 defendants alleged to have committed murder in aid of the Gang’s racketeering affairs. The decision whether or not to seek the death penalty will be made by the Attorney General of the United States based on the recommendations of the U.S. Attorney and after carefully considering each defendant’s background and the circumstances of his crimes.
The second racketeering indictment charges four alleged SNM Prison Gang members and associates, including three charged in the first racketeering indictment, with conspiring to commit two murders and committing two violent assaults for the purpose of gaining entrance to and maintaining and increasing their positons within the SNM Prison Gang.
Twenty-three defendants, including 13 who were in state custody, were arrested during yesterday’s law enforcement operation; one of the defendants was arrested in Tennessee. Two defendants have yet to be apprehended and are considered fugitives. The defendants arrested in New Mexico made their initial appearances in federal court earlier today. All remain in federal custody pending arraignment and detention hearings which will be scheduled for next week.
More than 500 federal, state, county and local law enforcement and corrections officers were involved in yesterday’s law enforcement operation. In addition to the arrests, the law enforcement operation included the execution of 12 federal search warrants in New Mexico and one in Tennessee; a lockdown of three prison facilities in the state for the purpose of conducting cell searches; and more than 50 probation and parole searches throughout the state. The following agencies were involved in the law enforcement operation: Albuquerque Division of the FBI, New Mexico Corrections Department, New Mexico State Police, Bernalillo County Sheriff’s Office, Metropolitan Correctional Center, Albuquerque Police Department, U.S. Marshals Service, and the El Paso, Phoenix, Denver, Las Vegas and Knoxville FBI Divisions.
“Deputy U.S. Marshals and Special Deputized Marshals enhance the safety of our citizens and communities by regularly contributing their expertise in apprehending violent offenders to operations like the one the U.S. Marshals Service participated in yesterday,” said U.S. Marshal Conrad E. Candelaria. “The U.S. Marshals Service will continue to support the prosecution of these racketeering cases as they proceed through the criminal justice system in front of a federal judge.”
“The citizens of New Mexico are safer today because of the collaborative effort between law enforcement agencies. When law enforcement agencies combine resources and assets, we are able to prevent violent crimes,” said New Mexico State Police Chief, Pete Kassetas. “These cases are great examples of how local, county, state and federal agencies are working with State District Attorneys and the U.S. Attorney to prevent violent crimes. This operation reinforces that there are consequences to those that choose to conspire to commit violent crimes in our state.”
“The collaboration between law enforcement and corrections has proven to be highly effective in proactively preventing crime and making our community a safer place to live, work, and visit,” said Bernalillo County Sheriff Manuel Gonzales, III. “This operation has created the opportunity to partner with our state and federal partners to remove and prosecute those who continually participate in criminal activity and sends a clear message that we have a strategy to keep our community safer by holding criminals accountable.”
“This is a monumental accomplishment for our agencies. These arrests will help rid our streets of systematic, organized crime and violent, illegal activities perpetuated by accused repeat offenders,” said Chief Gorden Eden, Jr., of the Albuquerque Police Department. “We are extremely thankful for the collaborative efforts of our law enforcement partners which ensure cases like this have a powerful impact – one that will positively affect our community for years to come.”
INDICTMENT IN UNITED STATES v. DELEON et al., 15-CR-4268 KG
Summary of the Charges
Indictment 15-CR-4268 KG charges 24 defendants with participating in a racketeering enterprise, the SNM Prison Gang, and committing violent acts to achieve the objectives of their enterprise.
Counts 1, 2, 3 and 5 charge certain defendants with committing four murders in Doña Ana County, N.M. Counts 1 and 2 charge the murders of persons identified as F.C. and R.G. on March 26, 2001. Count 3 charges the murder of a person identified as F.S. on June 17, 2007, and Count 5 charges the murder of a person identified as J.M. on March 7, 2014. If convicted, the defendants each face a statutory penalty of life imprisonment and are eligible for the death penalty.
Counts 4, 7 and 8 charge certain defendants with conspiring to murder three persons in Doña Ana County, N.M. Count 4 charges a conspiracy to murder a person identified as J.M. on March 7, 2014, and Counts 7 and 8 charge conspiracies to murder persons identified as D.S and G.M. from 2013 until Dec. 1, 2015. If convicted, the defendants each face a statutory maximum penalty of ten years in prison.
Count 6 charges certain defendants with conspiring to commit assault resulting in serious bodily injury to a person identified as J.R. in Dona Ana County, N.M., from 2003 until July 13, 2015. If convicted, the defendants each face a statutory maximum penalty of 20 years in prison.
Defendants Charged in Indictment
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Angel DeLeon, 38, a Mexican national, is charged in Count 1.DeLeon has yet to be arrested and is considered a fugitive.
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Joe Gallegos, 46, of Albuquerque, N.M., is charged in Count 1.
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Edward Troup, 41, of Albuquerque, N.M., is charged in Counts 1 and 3.
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Leonard Lujan, 49, of Albuquerque, N.M., who was in state custody, is charged in Counts 1 and 2.
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Billy Garcia, 61, of Albuquerque, N.M., who was in state custody, is charged in Counts 1 and 2.
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Eugene Martinez, 36, of Albuquerque, N.M., is charged in Count 2.
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Allen Patterson, 45, of Silver City, N.M., is charged in Count 2.
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Christopher Chavez, 39, of Albuquerque, N.M., is charged in Count 2.
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Javier Alonso, 36, of Roswell, N.M., who was in state custody, is charged in Count 3.
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Arturo Arnulfo Garcia, 48, of Denver, Colo., is charged in Count 3.Garcia has yet to be arrested and is considered a fugitive.
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Benjamin Clark, 37, of Las Cruces, N.M., who was in state custody, is charged in Count 3.
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Ruben Hernandez, 42, of Clovis, N.M., is charged in Count 3.
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Jerry Armenta, 35, of Merced, Calif., who was in state custody, is charged in Counts 4 and 5.
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Jerry Montoya, 35, of Albuquerque, N.M., who was in state custody, is charged in Counts 4 and 5.
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Mario Rodriguez, 31, of Silver City, N.M., who was in state custody, is charged in Counts 4 and 5.Rodriguez also is charged in Indictment 15-CR-4269 KG.
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Timothy Martinez, 32, of Santa Fe, N.M., who was in state custody, is charged in Counts 4 and 5.
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Mauricio Varela, 45, of Albuquerque, N.M., who was in state custody, is charged in Counts 4 and 5. Varela also is charged in Indictment 15-CR-4269 KG.
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Daniel Sanchez, 43, of Albuquerque, N.M., who was in state custody, is charged in Counts 4 and 5.
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Gerald Archuleta, 49, of McMinnville, Tenn., is charged in Count 6.Archuleta was arrested in Tennessee and will be transferred to the District of New Mexico to face the charges against him.
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Conrad Villegas, 31, of Deming, N.M., who was in state custody, is charged in Count 6.
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Anthony Ray Baca, 52, of Albuquerque, N.M., who was in state custody, is charged in Counts 4, 6, 7 and 8.
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Robert Martinez, 51, of Santa Fe, N.M., who was in state custody, is charged in Counts 7 and 8.Martinez also is charged in Indictment 15-CR-4269 KG.
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Roy Paul Martinez 43 of Albuquerque, N.M., who was in state custody, is charged in Counts 7 and 8.Martinez,
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Christopher Garcia, 40, of Albuquerque, N.M., is charged in Count 8.
This case was investigated by the Albuquerque Division of the FBI, New Mexico Corrections Department, New Mexico State Police and the New Mexico Office of the Medical Investigator, and is being prosecuted by Assistant U.S. Attorneys in the U.S. Attorney’s Las Cruces Branch Office.
INDICTMENT IN UNITED STATES v. VARELA, et al., 15-CR-4269 KG
Summary of the Charges
Indictment 15-CR-4269 KG charges four defendants with participating in a racketeering enterprise, SNM, and committing violent acts to achieve the objectives of their enterprise.
Counts 1 and 3 charge the four defendants with conspiring to murder two persons in Santa Fe County, N.M. Count 1 charges a conspiracy to murder a person identified as P.S. in March 2011, and Count 3 charges a conspiracy to murder a person identified as A.S. in June 2011. If convicted, the defendants each face a statutory maximum penalty of ten years in prison.
Counts 2 and 4 charge the four defendants with committing violent assaults in aid of racketeering in Santa Fe County, N.M. Count 2 charges an assault with a dangerous weapon on a person identified as P.S. on March 14, 2011, and Count 4 charges an assault resulting in serious bodily injury on a person identified as A.S. on June 24, 2011. If convicted, the defendants each face a statutory maximum penalty of 20 years in prison.
Defendants Charged in Indictment
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Mauricio Varela, 45, of Albuquerque, N.M., who was in state custody, also is charged in Indictment 15-CR-4268 KG.
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David Calbert, 39, of Clovis, N.M., was in state custody.
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Robert Martinez, 51, of Santa Fe, N.M., who was in state custody, also is charged in Indictment 15-CR-4268 KG.
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Mario Rodriguez, 31, of Silver City, N.M., who was in state custody, also is charged in Indictment 15-CR-4269 KG.
This case was investigated by the Albuquerque Division of the FBI, New Mexico Corrections Department and New Mexico State Police, and it is being prosecuted by Assistant U.S. Attorneys in the U.S. Attorney’s Las Cruces Branch Office.
The public is reminded that charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
Photographs of the two fugitives, Angel DeLeon and Arturo Arnulfo Garcia, are attached to this press release. Anyone with information on the whereabouts of this/these fugitive(s) is asked to contact the Albuquerque FBI (24 hours) at (505) 889-1300. Tips also can be submitted online at https://tips.fbi.gov.
SNM- DeLeon Indictment SNM- Varela Indictment
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Federal Indictment for Interfering with Efforts to Fight CVS Fire During Baltimore RiotsRead the Press Release
Baltimore, Maryland – Gregory Lee Butler, Jr., a/k/a Greg Baly, age 22, of Baltimore, was arrested on federal charges today for obstruction of firefighters during a civil disorder and for aiding and abetting arson, in connection with a fire at CVS during the civil disturbance in Baltimore on April 27, 2015. The federal indictment was returned on December 1, 2015 and unsealed late on December 3, 2015.
“Anyone who considers harming people or property during a riot should know that we can track them down and send them to prison,” U.S. Attorney Rod J. Rosenstein said. "Federal law enforcement agencies are working closely with local police and prosecutors to investigate crimes committed during the Baltimore riots."
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Kevin Davis of the Baltimore Police Department; Maryland State Fire Marshal Brian Geraci; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to the two count indictment, on April 27, 2015, riots erupted in Baltimore and at approximately 6:30 p.m. the Baltimore City Fire Department (BCFD) was notified of a fire at the CVS Pharmacy located at 2509 Pennsylvania Avenue, which is adjacent to the intersection of Pennsylvania Avenue and West North Avenue in Baltimore. Several BCFD engines were dispatched to suppress and extinguish the fire at the CVS. Firefighters deployed fire hoses to provide water in those efforts and to protect firefighters inside and near the building. Throughout the course of BCFD’s fire suppression and extinguishment efforts, rioting continued in the vicinity of CVS Pharmacy.
One hose was attached to a hydrant near the intersection of Pennsylvania and West North Avenues. As the firefighters deployed the hose, the indictment alleges that Butler stood on top of the hose. Once the hose was attached to the hydrant and the water was flowing into the hose, Butler allegedly punctured the hose twice using a sharp object - first near its attachment to the fire hydrant and then on a section of the hose that extended along the ground across Pennsylvania Avenue. Both punctures released a high-pressure stream of water from the hose and rendered the hose inoperable. As a result, the efforts to put out the fire at the CVS were impeded and delayed.
Butler faces a maximum sentence of five years in prison for obstruction of firefighters during a civil disorder, and a maximum of 20 years in prison for arson. An initial appearance is expected to be held on Monday, December 7, 2015, in U.S. District Court in Baltimore, but no time has been scheduled.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Federal prosecutors previously have charged three other defendants for arson crimes committed during the Baltimore riot on April 27, 2015. Donta Betts, age 19, of Baltimore, is charged with attempted arson of a police cruiser, civil disorder and unlawful making of a destructive device. Darius Raymond Stewart, age 21, of Baltimore, is charged with malicious destruction of a commercial building for allegedly setting fire to a liquor store on West North Avenue. Raymon Carter, age 24, of Baltimore, Maryland, pleaded guilty to the federal crime of rioting, including the arson of the CVS Pharmacy on April 27, 2015, and was sentenced to four years in prison and ordered to pay restitution of $500,000.
The investigation into this and other arsons that occurred on April 27, 2015, is continuing. Anyone with information is urged to call the ATF hotline, 1-888-ATF-FIRE (1-888-283-3473). ATF continues to offer a reward of up to $10,000 for information leading to the arrest and conviction of any individual responsible for these incidents.
United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, Maryland State Fire Marshal’s Office and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Philip A. Selden and Matthew J. Maddox, who are prosecuting the case.
El Departamento de Justicia Colabora con la República del Ecuador para Combatir la Discriminación en el EmpleoRead the Press Release
WASHINGTON – El Departamento de Justicia de los Estados Unidos y la República del Ecuador firmaron hoy un acuerdo de asociación formal para combatir la discriminación en el empleo por motivos de ciudadanía, estatus migratorio o nacionalidad de origen. Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta, Jefa de la División de Derechos Civiles, y el embajador ecuatoriano Francisco Borja Cevallos firmaron un memorándum de entendimiento (MOU, por sus siglas en inglés) que establece una asociación entre la embajada y sus consulados y la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a Inmigración (OSC, por sus siglas en inglés), de la División de Derechos Civiles. La disposición antidiscriminatoria de la INA prohíbe que empleadores en los Estados Unidos discriminen durante la contratación, el despido, el reclutamiento o la verificación de la elegibilidad de empleo de un trabajador por motivos de ciudadanía, estatus migratorio o nacionalidad de origen.
El propósito del MOU es habilitar a los ecuatorianos con autorización para trabajar en los Estados Unidos al educarles en cuanto a sus derechos y brindarles los recursos que necesitan para proteger dichos derechos. Asimismo, el MOU promoverá la capacitación de empleadores con respecto a sus responsabilidades en virtud de la disposición antidiscriminatoria de la ley de Inmigración y Nacionalidad (INA, por sus siglas en inglés), la cual prohíbe la discriminación en el empleo por motivos de ciudadanía, estatus migratorio o nacionalidad de origen. En concreto, el MOU dispone que:
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La OSC ayudará a capacitar al personal consular ecuatoriano en cuanto a la disposición antidiscriminatoria de la INA, participará en eventos organizados por los consulados ecuatorianos para educar a los trabajadores y empleadores y distribuirá materiales educativos a la embajada y sus consulados.
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La embajada establecerá un sistema para transferir denuncias de discriminación de la embajada y sus consulados a la OSC.
“La ratificación hoy de este MOU histórico representa un avance crítico en la asociación dinámica entre nuestro dos países,” declaró Secretaria de Justicia Auxiliar Adjunta Principal Gupta. “Juntos, seguiremos promoviendo nuestro compromiso compartido de habilitar a los trabajadores, combatir la discriminación ilegal y proteger los derechos de nuestra gente.”
“Estos acuerdos son vitales para asegurar que la comunidad ecuatoriana en los Estados Unidos esté informada de sus derechos y los diferentes recursos que el Departamento de Justicia ofrece a través de sus oficinas y líneas de ayudas, así como de la ayuda que la Embajada ecuatoriana y sus consulados pueden proveer para asegurar que los derechos de los inmigrantes ecuatorianos sean respetados,” dijo el Embajador Borja Cevallos.
El acuerdo de hoy aprovecha el trabajo conjunto de educación de la comunidad ya en curso entre la OSC y la Embajada del Ecuador y sus consulados.
La OSC es responsable de aplicar la disposición antidiscriminatoria de la INA. Entre otras cosas, esta ley prohíbe la discriminación por motivos de estatus de ciudadanía o nacionalidad de origen en la contratación, el despido o el reclutamiento o la recomendación por comisión; la discriminación en el proceso de verificación de la elegibilidad de empleo; las represalias y la intimidación. Además de sus esfuerzos por aplicar la ley, la OSC se dedica a educar al público acerca de sus derechos y responsabilidades de acuerdo con la disposición antidiscriminatoria de la INA. Más información sobre la OSC se encuentra disponible en www.justice.gov/crt/about/osc.
Para más información sobre las protecciones contra la discriminación en el empleo en virtud de las leyes migratorias, llame a la línea directa de la OSC para trabajadores al 1-800-255-7688 (1‑800-237-2515, TTY para personas con discapacidades auditivas); llame a la línea directa de la OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); matricúlese para un seminario en línea gratuito en www.justice.gov/crt/about/osc/webinars.php; mande un correo electrónico a [email protected] o visite la página web de la OSC en www.justice.gov/crt/about/osc.
Ecuador Memorandum de Entendimiento
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E-Commerce Exec and Online Retailer Charged with Price Fixing Wall PostersRead the Press Release
A one-count indictment was unsealed yesterday in the U.S. District Court for the Northern District of California in San Francisco against Daniel William Aston and his company, Trod Ltd. (doing business as Buy 4 Less, Buy For Less, and Buy-For-Less-Online), a U.K. company headquartered in Birmingham, England. According to the felony charges, Aston, a director and part owner of Trod, and his co-conspirators fixed the price of certain posters sold online through Amazon Marketplace from as early as September 2013 to in or about January 2014. Today’s announcement comes after U.K. law enforcement and the FBI successfully conducted searches of Trod Ltd.’s headquarters and Aston’s residence in West Midlands, U.K.
“U.S. consumers deserve competitive markets when they shop online.” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “This company and its owner conspired to fix the prices for poster art and consumers unknowingly suffered the consequences. It doesn’t matter whether price-fixers operate from an office in California or a warehouse in England. We will continue to prosecute conspiracies that subvert online competition.”
According to the charge, Aston and his co-conspirators discussed the prices of certain posters sold in the United States through Amazon Marketplace and agreed to adopt specific pricing algorithms for the sale of certain posters, with the goal of offering online shoppers the same price for the same product and coordinating changes to their respective prices.
Aston is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence for individuals of 10 years and a fine of $1 million. Trod Ltd. is charged with one count of price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and the United Kingdom.
This prosecution arose from an ongoing federal antitrust investigation into price fixing in the online wall décor industry, which is being conducted by the Antitrust Division’s San Francisco Office with the assistance of the FBI’s San Francisco Division. Anyone with information on price fixing or other anticompetitive conduct related to other products in the wall décor industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
Defendant in land bank scheme sentencedRead the Press Release
INDIANAPOLIS – Josh J. Minkler, United States Attorney, announced today that David Johnson, 49, of Indianapolis, Indiana was sentenced to prison today by U.S. District Judge William T. Lawrence for his role in the City of Indianapolis’ Land Bank scandal.
Johnson, the Executive Director of the Indianapolis Minority AIDS Coalition (“IMAC”) was sentenced to 66 months= imprisonment following his conviction at trial for three counts of wire fraud and one count of money laundering. Johnson was also sentenced to serve three years of supervised release following his release from prison.
Johnson and co-defendant Reginald Walton, the former Director of the Indianapolis Land Bank, were convicted at trial of participating in scheme to defraud the City of Indianapolis. Under this scheme, for-profit purchasers of the properties paid bribes and kickbacks to Walton to bypass the legal procedure under which for-profit businesses may acquire foreclosed properties held by the Land Bank. After receiving the bribes and kickbacks, Walton diverted the properties from the City to IMAC, which then transferred the properties to the for-profit purchaser. Johnson participated in this scheme to defraud by making his charity available for the scheme and funneling bribes and kickbacks from the for-profit entity to Walton.
In addition, Johnson and Walton participated in a scheme where they fleeced individuals who had previously been victimized by a separate fraudulent real estate scheme in Indianapolis. Initially, Walton promised to transfer City-owned real estate to the victims of the separate real estate scam for $1,000. Walton, however, subsequently increased the price of the properties to $4,000. Walton and Johnson then pocketed the additional $3,000 that they collected from each victim. In all, Walton and Johnson defrauded fourteen victims in this manner. United States Attorney Josh J. Minkler stated “Abandoned properties are a blight on this community and a threat to public safety. The Land Bank was created as a public service to eliminate that problem. Instead, Reggie Walton and David Johnson used the Land Bank to serve themselves through insider deals involving bribes and kickbacks. The clear message that was sent today is that a federal prison cell awaits those who engage in a scheme of public corruption.”
Minkler further stated, “To be clear a federal sentence of 66 months in prison means just that. You go to prison. There is no parole. There is no half-way house. This is no suspended sentence. There is no home detention or community corrections. At a minimum, Mr. Johnson will be required to serve 85% of the 5 and ½ year sentence in a federal prison.”
Assistant United States Attorneys Bradley A. Blackington and Cynthia J. Ridgeway prosecuted the case for the government. The investigation was conducted by the Federal Bureau of Investigation and the Indiana State Police.
Defendant Pleads Guilty in Tallahassee Cyberstalking CaseRead the Press Release
Michael Daniel Rubens, 31, formerly of Tallahassee, Florida, pleaded guilty yesterday to cyberstalking, unauthorized access to a protected computer and aggravated identity theft. The guilty plea was announced by Acting U.S. Attorney Christopher P. Canova of the Northern District of Florida.
During his guilty plea, Rubens admitted that between January 2012 and January 2015, he publicly humiliated dozens of young women by hacking into their online accounts, including e-mail and social media; stealing photographs and other personal information; using the photographs to create pornography; and posting the pornographic images on social media websites and on a revenge pornography website that was recently shut down by the FBI. Rubens engaged in most of the conduct from his residence in Tallahassee. He used software to conceal his Internet Protocol (IP) address.
Rubens’ victims included an employee of a local restaurant he frequented, an out-of-town colleague, an acquaintance in his office building, clients of the defendant’s employer, a former girlfriend and her colleagues, high school classmates and the victims’ relatives or friends. For one particular woman, Rubens’ laptop contained 470 files with more than 5,000 references to the victim. Rubens’ computer searches focused on finding the victims’ personal identifying information, such as past addresses, family information and other personal data that could be used to answer security questions. As a result of Rubens’ conduct, the victims became afraid to conduct any online activities and often deleted their social media presence entirely. In some instances, the conduct also affected the victims’ personal relationships.
The sentencing hearing is scheduled for Feb. 25, 2016, at 11:00 a.m. at the U.S. Courthouse in Tallahassee. For each of the 12 counts of cyberstalking and unauthorized access to a protected computer, Rubens faces a maximum of five years in prison. For the aggravated identity theft charge, he faces a mandatory two years in prison to be served consecutively to any other sentence.
This case resulted from investigations by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Florida State University Police Department and the Leon County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Jason S. Beaton of the Northern District of Florida.
The U.S. Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the U.S. Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Defendant Pleads Guilty in Tallahassee Cyberstalking CaseRead the Press Release
TALLAHASSEE, FLORIDA – Michael Daniel Rubens, 31, formerly of Tallahassee, pled guilty yesterday to cyberstalking, unauthorized access to a protected computer, and aggravated identity theft. The guilty plea was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
During his guilty plea, Rubens admitted that, between January 2012 and January 2015, he publicly humiliated dozens of young women by hacking into their online accounts, including e-mail and social media, stealing photographs and other personal information, using the photographs to create pornography, and posting the pornographic images on social media websites and on a revenge pornography website that was recently shut down by the FBI. Rubens engaged in most of the conduct from his residence in Tallahassee. He used software to conceal his IP address.
Rubens’ victims included an employee of a local restaurant he frequented, an out-of-town colleague, an acquaintance in his office building, clients of the defendant’s employer, a former girlfriend and her colleagues, high school classmates, and the victims’ relatives or friends. For one particular woman, Rubens’ laptop contained 470 files with more than 5,000 references to the victim. Rubens’ computer searches focused on finding the victims’ personal identifying information, such as past addresses, family information, and other personal data that could be used to answer security questions. As a result of Rubens’ conduct, the victims became afraid to conduct any online activities and often deleted their social media presence entirely. In some instances, the conduct also affected the victims’ personal relationships.
The sentencing hearing is scheduled for February 25, 2016, at 11:00 a.m. at the United States Courthouse in Tallahassee, Florida. For each of the 12 counts of cyberstalking and unauthorized access to a protected computer, Rubens faces a maximum of five years in prison. For the aggravated identity theft charge, he faces a mandatory two years in prison to be served consecutively to any other sentence.
This case resulted from investigations by the United States Immigration and Customs Enforcement Homeland Security Investigations, the Florida State University Police Department, and the Leon County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Jason S. Beaton.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Connecticut U.S. Attorney’s Office Collects More Than $14 Million for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
New Haven - U.S. Attorney Deirdre M. Daly today announced that the U.S. Attorney’s Office for the District of Connecticut collected $14,215,633.55 in criminal and civil actions in Fiscal Year 2015. Of this amount, $4,729,959.08 was collected in criminal actions and $9,485,674.47 was collected in civil actions.
Additionally, the District of Connecticut collected $27,311,898.49 in cases pursued jointly with other U.S. Attorney’s Offices and components of the Department of Justice. Of this amount $320,954.29 was collected in criminal actions and $26,990,944.29 was collected in civil actions.
Attorney General Loretta E. Lynch announced on Thursday that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015.
The more than $23 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“This past fiscal year, our Office’s dedicated and talented attorneys and staff helped to recover over $41 million,” said U.S. Attorney Daly. “We are gratified that these funds are returned directly to victims of crime, provide needed services for these victims and fund ongoing federal, state and local law enforcement efforts. One of our primary missions is to seek justice for victims, remove ill-gotten gains from wrongdoers and protect the integrity of important government programs.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
In addition, the U.S. Attorney’s office in Connecticut, working with partner agencies and divisions, collected $4,443,273 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
The U.S. Attorney’s Office is charged with enforcing federal criminal laws in Connecticut and representing the federal government in civil litigation. The Office is composed of approximately 65 Assistant U.S. Attorneys and approximately 50 staff members at offices in New Haven, Hartford and Bridgeport.
Connecticut Construction Company Fined $200K for Underfunding Retirement Plan, Filing False Tax ReturnRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHERRY HILL CONSTRUCTION, INC., a company based in North Branford, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to three years of probation and a fine of $200,000 for underfunding its retirement plan and filing a false tax return.
On January 13, 2015, CHERRY HILL CONSTRUCTION, INC., (“CHERRY HILL”) pleaded guilty to one count of filing a false tax return, and one count of making a false statement in relation to documents required by the Employee Retirement Income Security Act of 1974 (“ERISA”). ERISA is a federal law that sets minimum standards for retirement plans in private industry, including a requirement that plan sponsors provide adequate funding for a plan.
According to court documents and statements made in court, CHERRY HILL provides statewide service in site development, on-site crushing, trucking, demolition, as well as roll-off dumpsters, top soil, aggregates and landscaping. CHERRY HILL was awarded and completed prevailing wage construction projects requiring payment of the prevailing wage rate plus the fringe rate. The fringe rate is the cost of benefits to the employee.
When a company is awarded a prevailing wage project, the company must submit certified payrolls that list the hours, prevailing wage rate and fringe they are paying each employee. The company can either pay the employee the fringe directly or open a benefit plan with the fringe payment being deposited into an account for the benefit of that employee. The company is then paid by the federal, state or municipal governments the amount of payroll, including the fringe, after receiving the certified payrolls. The government entity for which the project is being worked pays these funds only because the employer certifies that the prevailing wage and fringe is being paid to an employee directly or being deposited into a benefit plan.
CHERRY HILL opened a profit sharing/401(k) plan that was covered under ERISA. CHERRY HILL has admitted that, in 2010 and 2011, it underfunded its retirement plan by approximately $950,000. CHERRY HILL further admitted that it filed a corporate tax return for the 2010 tax year that inflated its actual contribution to the plan, which resulted in an increased employee benefit deduction.
CHERRY HILL has fully funded its retirement plan and paid $193,000 in back taxes, interest and penalties.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division; U.S. Department of Labor – Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; U.S. Department of Labor – Employee Benefits Security Administration, and U.S. Department of Transportation – Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Cleveland Woman Sentenced for Hospice FraudRead the Press Release
OXFORD, Miss. - Felicia C. Adams, United States Attorney for the Northern District of Mississippi; Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General; Donald Alway, Special Agent in Charge at the Federal Bureau of Investigation, and Mississippi Attorney General Jim Hood announced that:
Sandra Livingston, 64, of Cleveland, Mississippi, was sentenced on December 3, 2015 by United States District Judge Sharion Aycock in Aberdeen, Mississippi to thirty-six (36) months imprisonment to be followed by three (3) years of supervised release. She was also ordered to pay
$1,098,639 in restitution to the Medicare program. Livingston will report to the Federal Bureau of Prisons on January 25, 2016.
Livingston previously pled guilty on July 30, 2015 to conspiracy to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 & 1349. Livingston owned and operated Milestone Hospice, located in Grenada, Mississippi, and admitted to using patient recruiters to solicit patients that were not hospice appropriate. Through Milestone Hospice, Livingston submitting fraudulent charges to Medicare and received over one million dollars in Medicare funds based on alleged hospice services for patients that were not eligible for hospice services; or for services that were never provided.
Felicia C. Adams, United States Attorney, said, “The United Sates Attorney’s Office for the Northern District of Mississippi is working aggressively to pursue unscrupulous hospice care providers who commit fraudulent acts and bring them to justice. Yesterday’s sentence insures that these illegal practices will not be tolerated and fraudsters will be punished. Our office appreciates the hard work of all of the federal, state, and local agencies that participated in the investigation.”
"Working with our law enforcement partners, we have pooled our resources and taken a team approach to tackling the hospice fraud problem in Northern Mississippi," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The message I would send to those who have stolen over a million of dollars from Medicare and Medicaid is this: You will eventually end up in federal prison just like the defendant in this case."
“This scheme is particularly sickening because the defendant charged Medicare over a million dollars in services for "treating" folks who have no idea they were on hospice because they weren't at the end of the lives,” said Donald Alway, Special Agent in Charge of the FBI in Mississippi. “The FBI and our partners are fully committed to finding and arresting those who commit such crimes.”
“Healthcare fraud, while directly affecting Mississippi’s most vulnerable citizens, also steals
tax-payer money from the Medicaid and Medicare programs. The Attorney General’s Office will continue to participate, with other State and Federal agencies, in this successful multi-agency approach to fight healthcare fraud in our State," said Attorney General Jim Hood.
This is the third conviction as part of a joint effort by the United States Attorney’s Office, the U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, the Mississippi Attorney General's Medicaid Fraud Control Unit and targeting fraudulent hospice providers who have billed Medicare and Medicaid for medically unnecessary services.
Canadian Woman Sentenced for Smuggling MethyloneRead 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 Erika Ruby-Lynn Foss, 27, of Toronto, Ontario, Canada, who was convicted of conspiracy to distribute methylone, was sentenced to time-served and one year of supervised release by Chief U.S. District Judge Frank P. Geraci.Assistant U.S. Attorney Frank T. Pimentel, who handled the case, stated that on February 22, 2014, the defendant attempted to enter the United States at the Rainbow Bridge Port of Entry. After being referred for secondary inspection, Foss was found in possession of four ounces of methylone that she was intending to deliver a person on Niagara Falls Boulevard in Amherst.
The sentencing is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and U.S. Customs and Border Protection officers, under the direction of Rose Hilmey, Acting Director of Field Operations.
California Woman and Company Charged with Clean Air Act ViolationRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CHEERY WAY, INC., and ELAINE CHIU, age 60, a resident of San Francisco, California, were charged today in a one-count Bill of Information with a felony violation of the Clean Air Act.
According to the Bill of Information, on or about April 2, 2011, in the Eastern District of Louisiana, CHEERY WAY, INC., and CHIU did knowingly fail to notify and report to the Louisiana Department of Environmental Quality the demolition of the Mississippi Queen Riverboat, a facility, which contained regulated asbestos containing material, to wit: wall and ceiling tiles, at least ten days prior to the start of the demolition as required by the Clean Air Act, in violation of Title 42, United States Code, Section 7413(c)(2)(B) and Title 40, Code of Federal Regulations, Section 61.145(b).
If convicted, CHEERY WAY, INC., faces a maximum term of probation of five years and a fine of $500,000. If convicted, CHIU, faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment.
U.S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Environmental Protection Agency-Criminal Investigation Division and the Louisiana Department of Environmental Quality-Criminal Investigation Division in investigating this matter. Assistant United States Attorney Emily K. Greenfield is in charge of the prosecution.
California Medical Device Maker Settles Allegations it Improperly Compensated VA PodiatristsRead the Press Release
A medical device manufacturer based in Sunnyvale, California has agreed to pay $3 million to settle allegations it improperly compensated podiatrists at four Veterans Affairs medical facilities to promote use of its product. Government investigators allege that Spiracur, Inc. improperly compensated VA podiatrists with gifts, gratuities and excessive speaking fees in order to increase sales of its product.
“The law is clear: Government employees are not allowed to accept gifts and gratuities for steering business to a particular company,” said U.S. Attorney Annette L. Hayes. “Care decisions should not be based on who has provided the biggest gift. Taxpayers need to know medical facilities are choosing the right product at the right price for our veterans and others who rely on publicly-funded medical programs.”
Spiracur manufactures and sells a negative pressure wound treatment product, known as “the SNaP system,” which is used primarily in the treatment of diabetic ulcers. Spiracur improperly compensated VA podiatrists who worked at VA facilities in Phoenix, Atlanta, San Francisco and Cleveland. Between 2010 and 2015, Spiracur sold those facilities just over $3.3 million in SNaP systems.
“The integrity of VA’s procurement process of healthcare devices is essential to providing effective care to our nation’s veterans,” said Michael E. Seitler, Special Agent in Charge for the U.S. Department of Veterans Affairs, Office of Inspector General, Northwest Field Office. “This case is one example of the OIG investigating allegations of undue influence into that process. The settlement of this case returns funds to VA that will be used to help care for veterans.”
Under the terms of the settlement agreement, Spiracur admits no wrongdoing and agrees to cooperate with any further investigation into the medical staff who accepted the improper compensation. As part of a separate transaction, Spiracur’s assets are in the process of being acquired by KCI USA, Inc.
The matter was investigated by the Veterans Affairs Office of Inspector General. The case was handled by Assistant United States Attorney Kayla Stahman.
Bronx Woman Sentenced for Passport FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that SUZANNE DIANNE BENT, 55, a resident of the Bronx, N.Y., was sentenced yesterday by U.S. District Judge Stefan R. Underhill in Bridgeport to three years of probation for passport fraud.
According to court documents and statements made in court, BENT is believed to be a native of Jamaica who was illegally brought to the U.S. by her grandmother in 1969. BENT has a criminal history that includes multiple convictions for theft-related crimes, and she has used multiple aliases and dates of birth during her life
On April 1, 2013, BENT applied for a U.S. passport at the Stamford, Connecticut Passport Agency. As proof of citizenship, she provided a fraudulent New York City birth certificate and other documentation.
The investigation further revealed that BENT had fraudulently obtained a Social Security number and, between August 2004 and March 2013, received approximately $76,365 in benefits from the Social Security Administration, Supplemental Security Income Program based on a claimed mental or physical disability.
BENT was ordered to pay restitution in the amount of $76,365.35.
BENT was arrested on December 5, 2014. On July 20, 2015, she pleaded guilty to one count of making a false statement in an application for a U.S. passport.
At the conclusion of the sentencing hearing, BENT was taken into custody by U.S. Immigration and Customs Enforcement.
This matter was investigated by the U.S. Department of State, Bureau of Diplomatic Security; the Social Security Administration, Office of Inspector General – Office of Investigations; and U.S. Department of Homeland Security, Immigration and Customs Enforcement. The case was prosecuted by Assistant U.S. Attorney Deborah R. Slater.
8 Indicted for Violating Federal Drug and Money Laundering LawsRead the Press Release
PITTSBURGH - Four residents of Western Pennsylvania, three of Texas, and one of Florida, have been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotics and money laundering laws, United States Attorney David J. Hickton announced today.
The two-count indictment, returned on Oct. 21 and unsealed yesterday, named:
- Dante Ivan Lozano, 40, of Olmito, Texas;
- Jeffrey Turner, 35, of McKeesport, Pennsylvania;
- April Racan, 37, of McKeesport, Pennsylvania;
- Joseph Borrelli, 49, of Glassport, Pennsylvania;
- Daniel Cosme, 35, of San Benito, Texas;
- Hugo Balboa, 48, of Texas;
- Brian Kettering, 29, of Charleroi, Pennsylvania; and
- William Coulson, 50, of St. Augustine, Florida.
According to the indictment, between 2011 and 2015, in the Western District of Pennsylvania and elsewhere, Lozano, Turner, Racan, Borrelli, and Kettering conspired to distribute five kilograms or more of cocaine. Lozano, Turner, Racan, Cosme, Balboa, Kettering and Coulson are charged with conspiracy to commit money laundering.
The law provides for a maximum total sentence of not less than 10 years and up to life in prison, a fine of $10,000,000 or both on the drug conspiracy count, and a sentence of not more than 20 years in prison, a fine of $500,000, or both on the money laundering conspiracy count.
Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory J. Nescott is prosecuting this case on behalf of the government.
The United States Postal Service in Pittsburgh and the Drug Enforcement Administration in Brownsville, Texas, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
8 Charged with Making False Statements in Connection with the Acquisition of FirearmsRead the Press Release
PITTSBURGH – Six men and two women have been indicted by a federal grand jury in Pittsburgh on charges of making false statements in connection with the acquisition of firearms, United States Attorney David J. Hickton announced today.
The 22-count superseding indictment, returned on Dec. 1, named eight defendants:
- Michael Bassier, 31, formerly of Brooklyn, NY;
- Robyn Brown, 29, of Pittsburgh, Pa;
- Christopher Buchanon, 23, of Pittsburgh, Pa;
- Brandon Goode, 25, of Pittsburgh, Pa.;
- Nathan Lawrence, 33, formerly of Brooklyn, NY;
- Mychael Scott, 31, of Pittsburgh, Pa;
- Talen Simmons, of Pittsburgh, Pa; and
- Brandon Williams, formerly of Pittsburgh, Pa.
According to the superseding indictment, between Sept. 7, 2014, and Aug. 12, 2015, Bassier caused another to make false statements in connection with the acquisition of 44 firearms from licensed dealers in the Western District of Pennsylvania. Bassier is the only defendant charged in each of the 22 counts of the indictment. The remaining defendants are charged in counts alleging that they made or caused the making of false statements with respect to particular firearms.
“This investigation highlights ATF’s commitment to interdict firearms trafficking throughout our region. ATF will continue to pursue criminal networks who funnel illegally obtained firearms into the pipeline that fuels black markets throughout our region, including New York City,” said ATF Special Agent in Charge Sam Rabadi. “ATF and our law enforcement partners will continue to work shoulder to shoulder to identify and arrest sources of illegal guns to prevent gun violence and make our neighborhoods a safe and peaceful place to live.”
At 21 of the 22 counts, the law provides for a maximum sentence of not more than ten years in prison, a fine of not more than $250,000, or both. At the remaining count, which charges only Bassier and Lawrence, the law provides for a maximum sentence of not more than five years in prison. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, along with detectives from the City of Pittsburgh Bureau of Police and the Allegheny County Sheriff’s Office, conducted the investigation leading to the superseding indictment in this case. Assistant United States Attorney Conor Lamb is prosecuting this case on behalf of the government.
A superseding indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
3 December 2015
‘Pill Mill’ Employees Plead Guilty to Oxycodone ChargeRead the Press Release
COLUMBUS, Ohio – Dr. David Rath, 60, of Alexandria, Ohio, and Karen Climer, also known as Karen D. Muncey and Karen D. Long, 58, of Columbus, each pleaded guilty in U.S. District Court to one count of conspiracy to illegally distribute oxycodone.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA) and , announced the plea entered into today before U.S. Magistrate Judge Elizabeth Preston Deavers.
According to court documents, Rath was employed as a physician and Climer as an administrative employee at Columbus Southern Medical Clinic, which purported to be a “family medical practice.”
Rath supervised two physician assistants who were each seeing between 50-100 patients a day. Climer scheduled between 200 and 400 patients a day total, knowing that many of the patients were drug seekers addicted to oxycodone. The practice prescribed pain killers to these patients without properly examining, diagnosing and treating them. The clinic focused on a drug seeking patient population that was addicted to pain medications and other controlled substances.
It is estimated that half of the patients receiving controlled substances at the clinic were receiving them unlawfully. Climer also falsified drug tests for patients who tested positive for illegal drugs or who did not have the prescribed controlled substances in their system.
Each defendant faces a maximum prison sentence of 20 years in prison and a potential maximum fine of $1 million.
U.S. Attorney Stewart commended the cooperative investigation by the DEA Tactical Diversion Squad and Ohio Bureau of Workers Compensation, as well as Assistant United States Attorney Kenneth F. Affeldt and Department of Justice Trial Attorney Richard M. Rolwing, who are representing the United States in this case.
Wyoming U.S. Attorney's Office Collects $5,355,903 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
Cheyenne – U.S. Attorney Christopher A. “Kip” Crofts announced today that the District of Wyoming U.S. Attorney’s Office collected $5,355,903 in criminal and civil actions in Fiscal Year 2015. Of this amount, $3,801,862 was collected in criminal actions and $1,554,041 was collected in civil actions.
Additionally, the District of Wyoming worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect $272,780 in cases pursued jointly with these offices.
Attorney General Loretta Lynch announced on December 3rd that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015.
The more than $23 billion in collections in FY 2015 represents nearly seven and a half times the appropriated $2.93 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“I am quite proud of the efforts of the Wyoming U.S. Attorney’s Office in collecting significantly more than the cost of operating the office and for once again providing tremendous value to the American taxpayers,” said U.S. Attorney Crofts.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is
paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $16.2 billion in payments made directly to the Justice Department and more than $6.8 billion in indirect payments made to other federal agencies, states and other designated recipients.
Virginia man convicted on child pornography charges, traveling to Ohio to engage in sex with minorRead the Press Release
A Virigina man was convicted of traveling across state lines to engage in sexual conduct with an underage girl, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio
David W. Vickers, 42, of Leesburg, Virginia, was convicted on three counts: receiving and distributing visual depictions of minors engaged in sexually explicit conduct, enticement, and travel with intent to engage in illicit sexual conduct.
Vickers communicated online with what he believed to be a 29-year-old Ohio woman and her 13-year-old daughter. In fact, Vickers was communicating with law enforcement investigators. Vickers sent 20 child pornography videos, 11 bestiality videos and discussed how he liked to drug and tie up children. In January 2015, he travelled to Ohio for the purposes of having sex with what he believed to be a 13-year-old girl and was arrested, according to court documents.
He is scheduled to be sentenced on March 15. He faces a recommended sentencing guideline range of 30 years to life in prison.
The case is being prosecuted by Assistant U.S. Attorneys Brian M. McDonough and Kevin Filiatraut following an investigation by the Ohio Internet Crimes Against Children Task Force and the United States Secret Service.
Vermont U.S. Attorney’s Office Collects $1,295,116.75 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
Burlington - U.S. Attorney Eric S. Miller announced today that the District of Vermont collected $1,295,116.75 in criminal and civil actions in Fiscal Year 2015. Of this amount, $787,749.50 was collected in criminal actions and $507,367.25 was collected in civil actions.
Additionally, the District of Vermont worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $620,882.19 in cases pursued jointly with these offices. Of this amount, $14,319.69 was collected in criminal actions and $606,562.50 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in Vermont, working with partner agencies and divisions, collected $1,129,535.00 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
United States Attorney’s Office Recovers over $88,000,000 in Fiscal Year 2015; Record Amount Shared with Local Police DepartmentsRead 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 the Western District of New York Office recovered in Fiscal Year 2015, $88,246,428.15 as a result of wide-ranging efforts in criminal, civil and asset forfeiture cases. As a result, $9,089,436 was distributed to victims of crime in the past year and a record amount of the recovered monies were provided as aid to law enforcement agencies, and in large part, provided to taxpayers as a result of being transmitted to the United States Treasury.In making the announcement, U.S. Attorney Hochul praised the hard work and dedication of Office attorneys and support staff that sought not only to put convicted defendants in jail, but took the profit out of crime in a more literal sense. “This Office strives mightily to protect the public by prosecuting those who would cause our residents harm. At the same time, we believe in the well-known saying “crime doesn’t pay.” To help make this phrase a reality for Western New Yorkers, our Office uses asset forfeiture laws and civil lawsuits to recover money for taxpayers, victims of crime, and local police departments. In other words, we don’t just take the profit out of crime, we use it for the public good.
The $88,246,428.15 represents more than 8 ½ times the amount of money it took to operate the entire United States Attorney’s Office for the year. “Because our budget is approximately $10 million, the recovered money in reality means taxpayers spent nothing for the protection and safety provided by this Office, and while also obtaining an additional $78,000,000 million in money it did not budget receiving through other means,” said U.S. Attorney Hochul.
Specifically, the Office collected $76,130,788 in criminal and civil actions. Criminal actions, which include fines and restitution, totaled $9,809,269.57, most of which was returned to victims of crime. The Office collected $66,321,518.58 in civil actions, which include proceedings involving health care fraud, government fraud, foreclosures and more.
In addition, the Office collected $12,115,640 in criminal and civil forfeitures. Forfeitures generally involve proceeds of crime, as well as property used to commit crime. Of that amount, a record amount of $3,768,043 was shared with state and local law enforcement partners who work with the U.S. Attorney’s Office and the Department of Justice.Since Mr. Hochul became U.S. Attorney, the Office has recovered and returned to victims, taxpayers and police agencies more than $322,000,000:
Fiscal Year 2010: $31,800,000; Fiscal Year 2011: $29,300,000; Fiscal Year 2012: $53,600,000; Fiscal Year 2013: $94,220,000; Fiscal Year 2014: $25,000,000.
In addition to recovering funds, in September 2015, Asset Forfeiture monies were used to demolish six forfeited drug houses on Buffalo’s East Side. This represented the first time such an undertaking was ever accomplished in the United States. A total of 98 dangerous firearms, along with ammunition, and 79 computers and media devices were also forfeited in FY 2015 as instrumentalities of criminal conduct, mostly related to child exploitation cases.
The following cases are an example of a successful forfeiture and affirmative civil enforcement cases concluded this past year in the Western District of New York:
United States v. Doran Feldman, et al.
Doran Feldman was an anesthesiologist for CGF Anesthesia Associates, P.C. in Buffalo. Co-defendant Debra Bulter, who worked in the Department of Anesthesiology for the University of Rochester, started DJA Solutions, LLC to provide administrative consulting services to CGF. In 2001, CGF contracted with the Department of Anesthesiology at the University of Rochester to provide anesthesiologists at medical facilities served by the Department of Anesthesiology. The 2001 Contract was renewed six times by addenda during the fiscal years 2004 through 2009. In September 2007, in the sixth addendum to the 2001 Contract, CGF agreed to provide the Department of Anesthesiology with five anesthesiologists and up to four additional anesthesiologists if requested by the Department of Anesthesiology. The defendant and Bulter fraudulently used the term in the addendum regarding the four additional anesthesiologists to fraudulently cause the Department of Anesthesiology to pay an annual fee to themselves under the terms of a purported option agreement. As a result of the offense, the Department of Anesthesiology at the University of Rochester sustained a loss of $1,460,000.00. Feldman was sentenced to 24 months in prison and ordered to pay $1,460,000.00 in restitution to the Department of Anesthesiology at the University of Rochester and forfeit a number of bank accounts.
United States v. Magness, et al.
A total of over $600,000 was forfeited from defendants Gregory Magness, Eldon Bott, Charles Wright and William Nehill in a case which involved the smuggling of magnesium into the United States from China that was used to produce counter measure flares for the U.S. Department of Defense. The defendants were also ordered to pay restitution totaling $6,246,605 to the U.S. Customs and Border Protection for the loss of duty to the United States. At the time of the importations, the U.S. had a 305.56% antidumping duty in place with respect to magnesium imported from China. In order to avoid the antidumping duty, the defendants falsely mislabeled the magnesium as a magnesium product only subject to a 5% duty, thereby defrauding the United States out of lawful duties. In addition to the over $600,000 forfeited, over $2,000,000 in restitution has already been collected from the defendants towards the restitution.
United States v. Cusimano
Eric Cusimano and other individuals participated in a scheme to commit securities fraud by registering internet websites to tout and promote publically traded stocks of companies with penny stock prices. Cusimano promoted the stocks on his websites and newsletters to boost the stock value and then sell their shares at the highest value. This is known as a “pump and dump” scheme. Cusimano, along with his wife, fled the United States for Panama upon learning of the investigation. The defendant was eventually arrested and brought back to the United States to face charges. Cusimano was convicted of conspiracy and tax evasion and sentenced to 46 months in prison and ordered to pay restitution to the Internal Revenue Service totaling $657,005.00 and a forfeiture money judgment in the sum of $1,218,783.00. In addition, the defendant forfeited an additional $336,522.86 that he had concealed in a number of bank accounts in Belize, various gold and silver jewelry items valued at $42,000.00 that he was found with in Panama, and a 30 foot pontoon boat that was forfeited early on in the investigation.
United States v. Aquilla
Frank Aquila served as the chief negotiator for the Buffalo Educational Support Team ("BEST"), a labor organization comprised of approximately nine hundred (900) City of Buffalo teacher's aides during 2008 collective bargaining negotiations with the City of Buffalo School District. Aquila refused to reach final agreement with the district on a collective bargaining agreement until and unless the district agreed to allow BEST to (1) select its own insurance broker; (2) make commission payments totaling $135,000 per year for four years to an insurance broker selected by BEST; and (3) agreed to make four payments to BEST of $65,000 each for costs and expenses associated with administering health insurance benefits for its members. The defendant failed to disclose to the district or BEST that he would share in commissions paid to the insurance broker selected by BEST, and in payments made to BEST to administer health insurance benefits for its members. Aquila was convicted and required to pay restitution in the amount of $332,500 to the City of Buffalo School District. The defendant also forfeited an additional $33,000 to the government.United States v. Fitzgerald
Charles Darwin Fitzgerald was convicted of possession with intent to distribute various synthetic controlled substances and synthetic controlled substance analogues at both his residence in Rochester and at one of his stores that he owned, the 420 Emporium located in Batavia, NY. The defendant was Fitzgerald was sentenced to 30 months in prison and ordered to forfeit $771,109 in U.S. currency that was seized during the execution of a search warrant at his residence.
United States v. Amedisys
Between 2008 and 2010, certain Amedisys offices improperly billed Medicare for ineligible patients and services. Amedisys allegedly billed Medicare for nursing and therapy services that were medically unnecessary or provided to patients who were not homebound, and otherwise misrepresented patients’ conditions to increase its Medicare payments. These billing violations were the alleged result of management pressure on nurses and therapists to provide care based on the financial benefits to Amedisys, rather than the needs of patients. The settlement was for $150 million dollars. The majority was paid up from and $35 million paid this year.
For further information, the United States Attorneys’ Annual Statistical Reports can be found on the internet at:
http://www.justice.gov/usao/reading_room/foiamanuals.html.\
United States Attorney for Western District of Oklahoma Involved in Collecting over $45.2 Million in Fiscal Year 2015Read the Press Release
Oklahoma City, Oklahoma -- The United States Attorney’s Office for the Western District of Oklahoma was involved in collecting a total of $45,210,641.42 in civil and criminal cases and through asset forfeiture in Fiscal Year 2015, announced Sanford C. Coats, United States Attorney.
The Western District of Oklahoma collected $12,277,349.50 in criminal and civil actions handled by the district. Of this amount, $3,374,634.80 was collected in criminal actions and $8,902,714.70 was collected in civil actions. Additionally, the Western District also worked with other U.S. Attorneys’ Offices and components of the Department of Justice to collect an additional $1,158,621.92 in civil cases pursued jointly with these offices.
Finally, the U.S. Attorney’s Office also worked with partner agencies and divisions to collect an additional $31,774,670 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending September 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse," said Attorney General Loretta Lynch. "The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work."
"My office was involved in recovering over $45.2 million in fiscal year 2015 – a 24% increase over the prior year," said U.S. Attorney Coats. "This total includes the recovery of tax dollars taken via fraud and restitution for victims of crime. As always, I am extremely proud of these tremendous results and of the exceptional work of the talented women and men in the U.S. Attorney’s Office, particularly in our Asset Recovery Unit."
Significant Cases in the Western District of Oklahoma
In October of 2014, Ocean Dental, P.C, agreed to pay $5,050,000 to settle civil claims stemming from allegations that it violated the False Claims Act by submitting false Medicaid claims for dental services that were either never performed or billed at a higher rate than allowed.
In January of 2015, Computer Sciences Corporation agreed to pay $380,000 to settle civil claims stemming from allegations that it violated the False Claims Act by submitting false claims to the United States Air Force in connection with a contract to provide aircraft maintenance services on hydraulic actuators in Air Force aircraft at Vance Air Force Base, Oklahoma. Hydraulic actuators power various systems and functions in the aircraft such as the landing gear, vertical/horizontal stabilizers and flaps.
In April of 2015, Wes Yui Chew and his company, Icon Telecom, Inc., both of Edmond, Oklahoma, were sentenced for money laundering and making a false statement to the Federal Communications Commission in connection with the federal Lifeline Program that provides wireless service for qualifying low-income customers. In addition to being required to serve 48 months in federal prison, Chew and Icon agreed not to contest the forfeiture of more than $27 million seized during the investigation. Oscar Enrique Perez-Zumaeta, of Cancun, Mexico, who owned and managed PSPS Sales LLC, a California entity that recruited low-income individuals to apply for Lifeline service through Icon, also pled guilty to money laundering and was sentenced to serve 42 months in prison.
In August of 2015, East Central Family Health Center, located in Wetumka, Oklahoma, agreed to pay $825,000 to settle civil claims stemming from allegations that it violated the False Claims Act by submitting false Medicaid claims related to behavioral health services furnished to Medicaid patients of non-FQHC health care providers and who were not East Central patients.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
U.S. Attorney’s Office/District of New Jersey Collects $102.5 Million in Civil and Criminal Actions in Fiscal Year 2015Read the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the District of New Jersey collected $102,476,557 in criminal and civil actions in Fiscal Year 2015. Of this amount, $64,631,183 was collected in criminal actions and $37,845,373 was collected in civil actions.
The District of New Jersey worked with other U.S. Attorneys’ Offices and components of the Department of Justice to collect an additional $9.27 billion in cases pursued jointly with these offices. Of this amount, $279,806 was collected in criminal actions and $9,265,900,389 was collected in civil actions.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 93 U.S. Attorneys’ Offices and the main litigating divisions in that same period.
“Our office is responsible for keeping the public safe from all kinds of abuse, from violent crime to financial exploitation,” U.S. Attorney Fishman said. “As part of that mission, the public servants in our office continue collect far more in fines, penalties, asset forfeiture, restitution and settlements than our operating expenses. Using that money to make crime victims whole, invest in our law enforcement partners and help fund the general treasury is good economics and good for public safety.”
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
For example, in the District of New Jersey in December 2014, OtisMed Corp. and its former chief executive officer admitted intentionally distributing knee replacement surgery cutting guides after their application for marketing clearance had been rejected by the Food and Drug Administration (FDA), and the corporation agreed to pay more than $80 million to resolve its related criminal and civil liability. The company was fined $34.4 million and ordered to pay $5.16 million in criminal forfeiture. In a separate civil settlement, OtisMed agreed to pay $40 million plus interest to resolve its civil liability.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s Office in New Jersey, working with partner agencies and divisions, collected $18,808,153 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
As a result of criminal and civil asset forfeiture actions prosecuted by the U.S. Attorney’s Office in New Jersey in conjunction with partner agencies and divisions, $18,808,153 was deposited into the Department of Justice and Department of Treasury asset forfeiture funds in FY 2015. Monies from the assets forfeiture funds are returned to victims of financial crimes and used for various law enforcement purposes.
In FY 2015 the U.S. Attorney’s Office in New Jersey also obtained final orders of forfeiture for property that is being held pending sale, including 2,251 pieces of artwork valued at more than $15 million that the government’s complaint alleged was purchased by Philip Rivkin with the proceeds of a fraudulent scheme that sold fake credits for renewable energy. In June, Rivkin pleaded guilty in the Southern District of Texas to mail fraud and a Clean Air Act violation. The forfeited artwork includes works by some of the country’s most influential photographers, including Alfred Stieglitz and Edward Weston. The numerous Stieglitz prints include a waxed palladium print titled “Georgia O’Keeffe,” which Rivkin purchased for $675,000, and numerous prints of Marilyn Monroe.
U.S. Attorney’s Office for the Southern District of Florida Collects $146,171,229.47 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
United State Attorney Ferrer announced today that the Southern District of Florida collected $146,171,229.47 in criminal and civil actions in Fiscal Year 2015. Of this amount, $56,256,636 was collected in criminal actions and $89,914,593.47 was collected in civil actions.
Additionally, the Southern District of Florida worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $217,282,980.63 in cases pursued jointly with these offices. Of this amount, $15,169.93 was collected in criminal actions and $217,267,811 was collected in civil actions.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year (FY) ending Sept. 30, 2015. Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources and protecting the American people from exploitation and abuse,” said Attorney General Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance program.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the Southern District of Florida, working with partner agencies and divisions, collected $34,109,303 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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.
U.S. Attorney’s Office for the Northern District of Georgia Collects over $ 255 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
ATLANTA – U.S. Attorney John A. Horn announced today that the Northern District of Georgia collected $255,099,419 in criminal and civil actions in Fiscal Year 2015. Of this amount, $12,171,472 was collected in criminal actions and $242,927,947 was collected in civil actions.
Additionally, the Northern District of Georgia worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $498,040,851 in cases pursued jointly with these offices. Of this amount, $12,708 was collected in criminal actions and $498,028,143 was collected in civil actions. The U.S. Attorney’s Office for the Northern District of Georgia ranks seventh among districts in the country for collections for which it was directly responsible and sixth in the country for overall collections-both direct and shared.
Attorney General Loretta E. Lynch announced on December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“As reflected in this year’s collection figures, financial enforcement is an integral part of our office’s efforts to combat fraud and other crimes from every angle,” said U. S. Attorney John Horn. “With the help of partner agencies, we continue to root out efforts to cheat the public and the government and to hold the perpetrators financially accountable.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. For example, over $212 million dollars was recovered by the U.S. Attorney’s Office in a settlement with First Tennessee Bank, N.A. to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s Federal Housing Administration that did not meet applicable requirements. In addition, civil debts were collected on behalf of other federal agencies, including the Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
One of the largest criminal collections for FY2015 was recovered in United States v. Rupert Morgan for theft of government funds from the Social Security Administration and Veterans Administration. Over $213,000 was recovered in the case through garnishment of the defendant’s investment accounts. The United States also recovered over $127,000 for DeKalb County and the World Congress Center in United States v. Cecil Clark, a case involving conspiracy to commit bribery.
Additionally, the Asset Forfeiture section of the U.S. Attorney’s Office, working with partner agencies and divisions, collected $16,979,004.00 in forfeited funds and restored to victims $1,362,679 in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Attorney’s Office collects nearly $3.5 million in civil and criminal actions for U.S. taxpayers in fiscal year 2015Read the Press Release
WHEELING, WEST VIRGINIA – Through a combination of civil and criminal actions, the United States Attorney’s Office for the Northern District of West Virginia collected more than $3 million during fiscal year 2015, United States Attorney William J. Ihlenfeld, II, announced.
The office collected $1,511,869.45 from criminal actions, $1,276,920.11 from civil actions, and $625,132 from civil and criminal asset forfeitures for a total of $3,413,921.56. Additionally, the office collaborated with other United States Attorney’s Offices and components of the Department of Justice to collect an additional $4,123,362.19 in civil cases pursued jointly with these offices.
“One critical aspect of enforcing the federal laws is to recover funds for victims of crimes and for taxpayers in our communities,” said Ihlenfeld. “Given its proximity to larger metropolitan areas and easy accessibility, the Northern District of West Virginia is particularly impacted by individuals seeking to operate criminal operations purely for financial gain. We remain committed to holding these individuals accountable.”
United States Attorney General Loretta Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending September 30, 2015. These collections represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 United States Attorney’s offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Nationally, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
U.S. Attorney’s Office for the Eastern District of Tennessee Collects $ 41,677,882.32 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
KNOXVILLE, Tenn. - U.S. Attorney William C. Killian announced today that the Eastern District of Tennessee collected $41,677,882.32 in criminal and civil actions in Fiscal Year 2015. Of this amount, $2,268,837.64 was collected in criminal actions and $ 39,409,044.68 was collected in civil actions.
Additionally, the Eastern District of Tennessee worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $795,366.68 in cases pursued jointly with these offices. Of this amount, $531.00 was collected in criminal actions and $794,835.68 was collected in civil actions.
Attorney General Loretta E. Lynch announced on Dec. 3, 2015 that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $16.2 billion in payments made directly to the Justice Department, and more than $6.8 billion in indirect payments made to other federal agencies, states and other designated recipients.
In measuring collections recovered in FY 2015, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2015.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“Civil and criminal monetary penalties provide additional deterrence to those involved in violating federal laws. The U.S. Attorney’s Office works very hard to insure that taxpayers’ money is collected and returned to the federal coffers. Also, our stringent enforcement of civil and criminal monetary penalties, provide an additional level of punishment for the offenders,” said U.S. Attorney Bill Killian.
This past fiscal year, the Eastern District of Tennessee recovered $38,400,000 as part of a $92,000,000 settlement against Pilot Flying J for the company’s role in a complex rebate fraud scheme. As a civil collection, these funds go into the General Treasury Fund.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Additionally, the U.S. Attorney’s office in the Eastern District of Tennessee, working with partner agencies and divisions, collected $2,493,887.00 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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U.S. Attorney’s Office Collects over $1.9 Billion for Taxpayers in 2015Read the Press Release
ALEXANDRIA, Va. – Dana J. Boente, U.S. Attorney for the Eastern District of Virginia (EDVA), announced today that EDVA, working together with other U.S. Attorney’s Offices and components of the Department of Justice, collected $1,941,532,490.62 in cases pursued jointly with these offices in Fiscal Year 2015. Of this amount, $1,803,813.635.20 was collected in criminal actions and $137,718,855.42 was collected in civil actions.
In cases pursued exclusively by EDVA, the office collected $129,711,740.67 in criminal and civil actions for U.S. taxpayers in Fiscal Year 2015. Of the total amount, $120,332,441.23 was collected in criminal actions, and $9,379,299.34 was collected in civil actions.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“In all of our criminal and civil prosecutions, where appropriate, we strive to collect restitution for the victims of the crime, be that private citizens or the federal government” said U.S. Attorney Boente. “Asset forfeiture, fines, restitution and other means of collections are the Justice Department’s most effective and efficient tools in restoring money to victims of crime and their families.”
In Fiscal Year 2015, EDVA recovered $1.8 billion as part of the settlement in the Credit Suisse case. As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS. Credit Suisse further agreed to cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed, and to close accounts of account holders who fail to come into compliance with U.S. reporting obligations. Credit Suisse has also agreed to implement programs to ensure its compliance with U.S. laws, including its reporting obligations under the Foreign Account Tax Compliance Act and relevant tax treaties, in all its current and future dealings with U.S. customers. Credit Suisse pleaded guilty on May 19, 2014, and will pay a total of $2.6 billion for their crimes.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, EDVA working with partner agencies and divisions, collected $14,233,390 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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.
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U.S. Attorney’s Office Collects $9.2 Million for U.S. Taxpayers in FY 2015Read the Press Release
KANSAS CITY, KAN. – U.S. Attorney Barry Grissom announced today that the District of Kansas collected more than $9.2 million in criminal and civil actions in Fiscal Year 2015. Of this amount, more than $6.2 million was collected in criminal actions and $3 million was collected in civil actions.
Additionally, the District of Kansas worked with other U.S. Attorney’s Offices and components of the Justice Department to collect approximately an additional $402,000 in cases pursued jointly with these offices. Of this amount, approximately $12,000 was collected in criminal actions and $390,000 was collected in civil actions.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 93 U.S. Attorneys’ offices and main litigating divisions in that same period.
“Our job is to litigate vigorously and enforce the collection of debts due to the United States and to victims of federal crimes,” U.S. Attorney Barry Grissom said. “We’re working hard to carry out that responsibility.”
For instance, in FY 2015 the District of Kansas entered a settlement for a payment of $700,000 from Hawker Beechcraft Corporation (HBC) in a False Claims Act lawsuit. The payment was to settle allegations that a subcontractor, TECT Aerospace, improperly formed wing spars, including fracture critical parts, for use by HBC, the prime contractor in the manufacture of the Joint Primary Aircraft Trainers (T-6A) for the Air Force and Navy.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
The U.S. Attorney’s Offices, along with the department’s litigating divisions are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The Justice Department’s largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the District of Kansas, working with partner agencies and divisions, collected more than $3.7 million in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney’s Office Collects $1,742,830 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
Contact: Donald E. Clark
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced today that the U.S. Attorney’s Office for the District of Maine collected $1,742,830.04 in criminal and civil actions in Fiscal Year 2015. Of this amount, $880,662.93 was collected in criminal actions and $862,167.11 was collected in civil actions.
Additionally, the District of Maine worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $5,708,677.30 in cases pursued jointly with these offices. Of this amount, $600 was collected in criminal actions and $5,708,077.30 was collected in civil actions.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. Collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period."The Justice Department is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse," said Attorney General Loretta Lynch. "The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work."
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Nationally, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
In March 2015, the District of Maine recovered $484,744 from Dr. Daniel P. Schecter, a dentist who provided services in Rockport, Maine, to settle claims involving improper billing to MaineCare (Maine’s Medicaid program).The District of Maine, working with partner agencies and divisions, also collected $942,407 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney's Office Collects over $25.5 Million in Criminal, Civil Actions in 2015Read the Press Release
KANSAS CITY, Mo. – United States Attorney Tammy Dickinson announced today that the Western District of Missouri collected more than $25.5 million in criminal and civil actions in Fiscal Year 2015. Of this amount, more than $8.8 million was collected in criminal actions, more than $6 million was collected in civil actions and more than $10.6 million was collected through the seizure of assets that were forfeited to the government from Oct. 1, 2014, to Sept. 30, 2015.
The Western District of Missouri also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $4 million in cases pursued jointly with these offices, primarily in civil actions.
“The pursuit of justice involves not only prosecuting criminals, but being diligent to collect the fines levied by the court and restitution payments on behalf of the victims of crime,” Dickinson said. “I am determined that criminals will not profit from their crimes, and that those involved in civil actions pay the government what they owe.”
Attorney General Loretta E. Lynch also announced today that the Justice Department collected a total of $23.1 billion in civil and criminal actions in FY 2015. The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $16.2 billion in payments made directly to the Justice Department, and more than $6.8 billion in indirect payments made to other federal agencies, states and other designated recipients.
Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
Contraband Cigarette Trafficking
As an example of FY 2015 collections in the Western District of Missouri, TSNE, doing business as Jan’s Smoke Shop, in Bascom, N.Y., paid a total of more than $3.5 million in fine, forfeiture and restitution.
A number of defendants were convicted in a multi-million dollar, multi-state conspiracy to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to the state of New York, where they were sold primarily on Indian reservations. Conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation. Approximately 620,600 cartons of cigarettes – containing 10 packs per carton – were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The benefit to those smoke shops was that they did not pay New York state cigarette taxes; thus, they could undercut the prices charged by off-reservation cigarette retailers by over $40 per carton. The total state excise tax lost to the state of New York was more than $8 million, which has been paid in restitution to the state by the perpetrators of the scheme.
Jan’s Smoke Shop is a gas station and convenience store recognized by the Tonawanda Seneca Nation. TSNE paid a fine of $950,000 and restitution of $1,900,080 to the state of New York. TSNE also forfeited $700,650 to the government. As a result of this investigation, Keith Donald Stoldt of Cowlesville, N.Y., who operated the Totem Smoke Shop located on the Tonawanda Seneca Indian Reservation, also forfeited $247,080 to the government in FY 2014. Craig Sheffler of Independence, Mo., owner of Cheap Tobacco Wholesale, forfeited $599,206 to the government. Gholamreza Tadaiyon of Weston, Fla., forfeited $448,189 to the government.
Mercy Health Springfield Communities
Two southwest Missouri health care providers paid $5.5 million to settle allegations that they violated the False Claims Act by engaging in improper financial relationships with referring physicians. The two providers are Mercy Health Springfield Communities (formerly known as St. John’s Health System Inc.), which owns and operates a hospital in Springfield, Mo., and its affiliate, Mercy Clinic Springfield Communities (formerly known as St. John’s Clinic), which operates health care facilities in southwest Missouri.
The settlement resolved allegations that the providers submitted false claims to the Medicare program for services rendered to patients referred by physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals of patients to the clinic. Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.
Joplin Oncologist Dispenses Foreign, Misbranded Drugs
Robert L. Carter, 74, of Carthage, Mo., an oncologist who operated a clinic in Joplin, Mo., paid more than $2.1 million in restitution and asset forfeiture after being convicted of dispensing foreign, misbranded drugs to his cancer patients.
Carter, who forfeited $971,854 to the government in FY2014, previously had paid $971,854 in restitution to Medicare, Tri-Care, Missouri Medicaid, Oklahoma Medicaid and Kansas Medicaid. Carter previously had paid $228,145 of the forfeiture judgment.
Carter was the president and medical practitioner of Robert L. Carter, M.D., in Joplin, from Oct. 23, 1991, to April 2, 2012. As a medical oncologist, Carter provided care and treatment for patients with cancer and blood diseases. The practice purchased prescription drugs, including chemotherapy drugs, which were prescribed by Carter and were administered and dispensed through the practice. Reimbursement for the drugs and their administration was sought from the Medicare and Medicaid programs, Tricare as well as other private health care benefit programs. In April 2010, Carter began ordering prescription cancer drugs from Quality Specialty Products (QSP) in Winnipeg, Manitoba, Canada. QSP sold drugs – which had been obtained from foreign sources and which had not been approved by the U.S. Food and Drug Administration for distribution or use in the United States – to physicians and other health care providers in the United States.
Employee Embezzlement
Donna M. Preszler, 61, formerly of Chillicothe, Mo., paid $420,017 in restitution in FY 2014 to her former employer, Burdg, Dunham & Associates Construction Corp. She and her husband, Terrance W. Preszler, 64, were convicted on charges involving her embezzlement of nearly $4 million from her employer and for the couple jointly filing a false income tax return not claiming the income from the wire fraud scheme.
Donna Preszler was sentenced to five years and 10 months in federal prison without parole. Terrance Preszler was sentenced to three years in federal prison without parole, which is the statutory maximum. The court also ordered the Preszlers to pay $4,049,121 in restitution to Burdg, Dunham & Associates Construction Corp. and $1,236,690 in restitution to the Internal Revenue Service, for a total restitution amount of $5,285,811. The court also ordered the Preszlers to forfeit to the government a money judgment of $3,912,000, two residential lots, two 14kt diamond rings, eight vehicles (a 2007 Ford Taurus, a 2007 Mazda CX-7, a 2011 Nissan Versa, a 2010 Nissan 370Z, a 2010 Ford F150, a 2010 Ford Escape, a 2012 Ford Explorer and a 2012 Nissan Rogue), three 2011 Yamaha ATVs and several bank and funeral trust accounts.
Elected Prosecutor Embezzlement
Richard F. Turner, 39, a Bethany, Mo., attorney paid $193,769 in restitution after stealing more than $540,000 from an elderly client. Turner is the former elected county prosecutor of Harrison County, Mo., and was re-elected to that office a few weeks before his guilty plea.
Turner admitted that from October 12, 2004 to May 29, 2014, he fraudulently attempted to obtain at least $728,147.18, and he did obtain at least $540,803.86, from an elderly client. He spent the money on personal expenses, including paying off his home mortgage, putting in a swimming pool, and spending heavily at retail establishments and restaurants in Bethany, St. Joseph, and Kansas City, Mo., including to support his clothing store, Richard’s / TD Clothiers, in Bethany. Turner further admitted that he failed to pay taxes on the embezzled income, causing additional loss to the state and federal government of at least approximately $154,453.
Consumer Fraud
Dataline Technologies, Inc., a Springfield telemarketing company that sold ink cartridges to customers across the United States over the telephone, paid $398,000 in restitution to hundreds of victims. Dataline, which was owned and operated by Richard Morsovillo, is no longer in business. Dataline pleaded guilty to defrauding its customers by inducing them to purchase ink cartridges through false representations and promises.
Collection Amounts
The Western District of Missouri collected $26,575,724 in criminal and civil actions in FY 2015. Of this amount, $14,823,396 was collected in criminal actions (such as fines and victim restitution), $6,283,214 was collected in civil actions, and $5,469,114 was collected in asset forfeiture actions.
The U.S. Attorneys’ Offices, along with the Justice Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
U.S. Attorney's Office Collects over $2.8 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
TULSA, Okla.—United States Attorney Danny C. Williams Sr. announced today that the Northern District of Oklahoma collected $2,836,307 in criminal and civil actions in fiscal year (FY) ending September 30, 2015. Of this amount, $1,260,991 was collected in criminal actions and $1,575,316 was collected in civil actions. Additionally, the Northern District of Oklahoma worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $500,599 in cases pursued jointly with these offices.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in FY 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“The Northern District has yielded over $2.8 million in litigated matters and $1.9 million in asset forfeitures,” said U.S. Attorney Williams. “The district’s dedicated staff in the Financial Litigation Unit and Asset Forfeiture division are committed to protecting Northern District citizens, and delivering a valuable return to the taxpayer and to victims of federal crime.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Additionally, the U.S. Attorney’s office in the Northern District working with partner agencies and divisions, collected $1,908,702 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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U.S. Attorney's Office Collects over $10 Million in Civil and Criminal Actions for U.S. TaxpayersRead the Press Release
HONOLULU –U.S. Attorney Florence T. Nakakuni announced today that the District of Hawaii collected over $7.8 million in criminal and civil actions in Fiscal Year 2015. Of this amount, approximately $7.7 million was collected in criminal actions. Additionally, her office worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $2.3 million in civil actions pursued jointly with these offices.
Attorney General Loretta E. Lynch previously announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 93 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse," said Attorney General Lynch. "The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work."
In January 2015, for example, the District of Hawaii recovered $1 million from Matson Terminals, Inc. as a result of convictions on two criminal charges relating to the unauthorized discharge of approximately 233,000 gallons of molasses into Honolulu Harbor in September 2013. The $1 million consisted of a $400,000 fine and $600,000 in restitution, the latter divided equally between the Waikiki Aquarium to support Coral Programs and Invasive Algae Clean-ups and Sustainable Coastlines Hawaii to inspire local communities to care for coastlines through beach clean-ups.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
U.S. Attorney's Office Collects $24,148,463 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
St. Louis, MO – Assistant United States Attorney Nicholas Llewellyn, Chief of the Civil Division, announced today that the Eastern District of Missouri collected $16,191,458 in criminal and civil actions in fiscal year 2015. Of this amount, $6,027,224 was collected in criminal actions and $10,164,234 was collected in civil actions.
Additionally, the Eastern District of Missouri worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $7,957,005 in cases pursued jointly with these offices. Of this amount, $33,334 was collected in criminal actions and $7,923,670 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending September 30, 2015. The more than $23.1 billion in collections in FY 2015 represents nearly seven and a half times the approximately $2.93 billion of the Justice Department's combined appropriations for the 94 U.S. Attorney's Offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources and protecting the American people from exploitation and abuse," said Attorney General Loretta Lynch. "The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work."
The U.S. Attorneys’ Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct, or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s Office in the Eastern District of Missouri, working with partner agencies and divisions, collected $7,543,204 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney Attends White House Summit Entitled “A Cycle of Incarceration” on the Disproportionate Impact on the Poor of High Fines and Fees in the Criminal Justice SystemRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner is pleased to be in attendance at a summit today hosted by the White House and the Department of Justice in Washington, D.C. called “A Cycle of Incarceration: Prison, Debt and Bail Practices.” This event was designed to bring public attention to the disproportionate impact that high fines and fees in the criminal justice system have on the poor. The White House Council of Economic Advisers also released an issue brief exploring the economic inefficiency of fines, fees and bail in particular situations as well as the disproportionate impact such sanctions can have on the poor.
U.S. Attorney Wagner stated, “The inability of many poor people to pay high fines, fees and bail for minor infractions can have disastrous consequences both for them and for society. For individuals, it can result in the loss of a driver's license, the loss of a job, increasing debt, incarceration and a criminal record. For society, it can lead to costly incarceration of many indigent persons for minor offenses. This conference is focused on identifying and reforming the complex web of practices within the criminal justice system that can trap the poor in a cycle of noncompliance and punishment, in order to create a fairer and more efficient justice system.”
Today’s event follows an event the Justice Department hosted on Wednesday that addressed the effect and fairness of fees and fines. The department convened judges, academics and practitioners to develop a research and policy agenda that will inform jurisdictions in their efforts to reform court practices.
Participants in the conference heard from judges, court administrators, academics, experts and others about the impact of excessive fines and fees in minor cases, and various efforts to reform justice systems, including in California. Three citizens described years of entanglement with the justice systems of Alabama, Michigan and Missouri, including suspended drivers licenses, lost jobs, incarceration and homelessness, all originating from unpaid fines for minor infractions.
Additional information about this issue can be found at http://go.usa.gov/cBahC.
U.S. Attorney Announces Office Collects over $7 MillionRead the Press Release
BOISE – United States Attorney Wendy J. Olson announced today that her office's Financial Litigation Unit collected more than $4.9 million in civil debts and in criminal fines, assessments, and restitution for the fiscal year that ended September 30, 2015. U.S. Attorney Olson stated that the Financial Litigation Unit collected $2,504,945 in criminal fines, assessments, and restitution, and $2,427,383 in civil debts. In addition, the Asset Forfeiture Unit collected approximately $2.3 million representing proceeds and instruments of crime in both criminal and civil forfeitures.
“The more than $7.2 million our staff collected through civil debts, asset forfeiture, fines, assessments and restitution exceeds the U.S. Attorney's Office's annual operational budget,” said Olson. “Our collection and asset forfeiture staffs of attorneys, paralegals, analysts and fiscal agents ensure that those who owe the federal government money as a result of litigation in this district or as a result of longtime debt, such as student loans, make appropriate payments. They also ensure that those who have profited from committing crimes in the District of Idaho are deprived of the proceeds and tools of their crimes. This year, all of these dedicated individuals have done outstanding work and served this office, taxpayers and the federal government well.”
The Financial Litigation Unit collects civil penalties for violations of regulations involving, among other things, controlled substances, environmental protection, damage to federal property, and procurement fraud. It also collects civil debts for defaulted student loans and defaulted federally financed mortgages, working with debtors to arrange viable payment plans. During fiscal year 2015, the office collected over $2.4 million in civil debt. Of that, the office collected $1.5 million from EPA violations concerning release of hazardous substances. This includes payments from Hecla Mining Company, P4 Production, and Clearwater Paper Corp.
In addition, the U.S. Attorney’s Office collected approximately $70,333 in defaulted student loans and $293,000 in fire suppression costs for human-caused fires.
From convicted criminals, the U.S. Attorney's Office collects fines, assessments, restitution, and asset forfeitures. Victims of crime receive funds collected in criminal restitution cases. In fiscal year 2015, the U.S. Attorney's Office collected over $2.5 million in criminal restitution that was distributed to victims of crime. Other criminal collections such as fines go into the Crime Victims Fund. From there, funds are distributed to the Idaho Crime Victims Compensation Program, the Idaho Council on Domestic Violence and Victim Assistance, and similar programs across the country. Money recovered from the illegal proceeds of criminal activity through forfeiture is returned to victims, used to offset the costs of operating federal prisons, and shared with local, state, and federal law enforcement agencies to help fight crime. Other recoveries go back to agency creditors.
During the fiscal year, some notable criminal fine collections include: the collection of Randal Watson’s criminal fine of $25,000 associated with a drug offense; the collection of $50,000 from Owyhee Construction related to a fine for EPA clean-up costs; and the collection of $100,000 from Jeremy DeLuca as payment of a criminal fine related to misbranding of products at bodybuilding.com in 2008-2009. In addition, funds were collected for crime victims, such as $25,500 from Melody Redondo related to mortgage fraud; $12,275 from Richard Zaranek related to embezzlement from a school district; and $17,452 from Robert Holloway related to bank robbery. Through the Treasury Offset program, the office collected $11,586 from Aaron Hymas related to mortgage fraud.
Notable recoveries of the proceeds of crime through asset forfeiture include two drug cases involving the illegal trafficking and sale of analogues (synthetic marijuana) and drug paraphernalia in Boise, Nampa, Twin Falls and Pocatello. Approximately $1.3 million in drug trafficking proceeds were recovered in these cases.
Two Cousins Collectively Sentenced to More Than 300 Months for Family Dollar RobberyRead the Press Release
Memphis, TN – Two cousins have been collectively sentenced to more than 300 months in federal prison for armed robbery of a Family Dollar Store in Cordova. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentencings today.
According to information presented in court, on April 24, 2014, Cortez Strickland, 27, and his cousin, Corney Sanders, 28, both of Memphis, robbed a Family Dollar Store on North Germantown Parkway with a .45 caliber pistol. The defendants entered the store together; Strickland was armed with the handgun. Strickland reportedly pointed the gun at a store clerk, while Sanders made threats and demanded money from the safe and cash register. After placing money from the register in a bag, the two defendants fled the scene on foot.
Law enforcement officials were notified of the robbery and went to the scene. Witnesses told the officers that they recognized the defendants. Officers were able to determine the perpetrators’ identities and located them at a home near the Family Dollar. Officers also recovered proceeds from the robbery and the handgun used in the crime.
Both defendants pled guilty to one count of robbery affecting interstate commerce and one count of use of a firearm during a crime of violence.
On October 20, 2015, Sanders was sentenced by U.S. District Judge Sheryl H. Lipman to serve 105 months in federal prison.
On December 2, 2015, Judge Lipman sentenced Strickland to serve 212 months in federal prison.
This investigation was conducted by the Federal Bureau of Investigation’s (FBI) Safe Streets Task Force, a collective comprised of federal, state, and local law enforcement personnel. The Memphis Police Department investigated this case on behalf of the Safe Streets Task Force.
Assistant U.S. Attorney Stephen Hall prosecuted this case on the government’s behalf.
Tribal Roads Branch Director Given over Three Years in Prison for Role in Rocky Boy's Corruption SchemeRead the Press Release
GREAT FALLS – The former Director of the Chippewa Cree Tribe Roads Branch was sentenced to 38 months in federal custody today for taking bribes from contractors. U.S. District Judge Brian Morris sentenced Timothy Warren Rosette, 52, of Box Elder, in connection with his earlier guilty pleas to two counts of bribery and one count of theft from an Indian tribal organization, to serve two years of supervised release and pay $600,000 in restitution to the Tribe.
At Rosette’s guilty plea in July 2015, the prosecution told the Court that Rosette served as the Director of the Roads Division, with the authority to select contractors, award contracts, and approve contract payments relating to the Roads Division’s operations. Rosette also served as the Director of the Rocky Boy Health Clinic’s Environmental Health Unit, and in this role had authority to select contractors, award contracts and approve contract payments relating to the tribe’s community water supply (lagoons, pipes, sewers, storm drains, etc.).
In October 2009 a contractor called Hunter Burns Construction, LLC, (HBC), which was a business owned and controlled by Rocky Boy’s area contractor Hunter Burns and Dr. James Eastlick, a clinical psychologist at the Rocky Boy Health Clinic, purchased $6,219.57 worth of furniture for Rosette which was delivered in November 2009. On October 14, 2009, HBC deposited $18,600 from the Clinic for a construction contract. The furniture purchase occurred five days after the deposit from the health clinic.
In November 2011, Rosette, Eastlick, and Tribal Vice-Chairman John Chance Houle agreed to inflate a contractual payment from the Clinic to HBC for a sum of $20,000. The HBC invoice dated November 28, 2011, indicated that the payment was an increase to an original invoice for transportation of “bio-hazard material.” On November 28, 2011, a Clinic requisition was signed by Rosette and a $20,000 check was issued. When interviewed, Rosette admitted the $20,000 given to HBC in this transaction was fraudulent. Rosette also admitted to receiving $2,000 in cash from Eastlick on behalf of HBC for completing this transaction.
Between August of 2009 and January of 2013, Eastlick and HBC made hundreds of cash payments to Rosette in relation to HBC construction and trucking contracts, many of them on a per truck load, per day basis. The last known gratuity made to Rosette by Eastlick and HBC took the form of an expense-paid trip to Las Vegas, Nevada, for Rosette and five of his family members in December 2011. Eastlick and HBC covered the cost of airfare and hotels for Rosette and his family members during this Las Vegas trip.
Between August 2009 and January 2013, payments from the Clinic to HBC totaled $831,475.50. Between August 2010 and July 2013, payments from the Chippewa Cree Tribe’s Roads Division to HBC totaled $690,798.59.
There came a time during this period when HBC was unable to handle all of the trucking work required by the Roads Branch, as the Tribe attempted to make infrastructure repairs after the 2010 floods and complete American Recovery and Reinvestment Act (ARRA) projects on the reservation. HBC was also a subcontractor on the Tiber Project, and therefore, had commitments of equipment and labor on that project as well.
Shad Huston, a Havre businessman, controlled, either exclusively or jointly, several companies that did business with the Chippewa Cree Tribe. In July 2010, Huston became the business manager for K Bar K Trucking (K-K Trucking). Eastlick enlisted Huston to assist in the trucking business with the Tribe and Huston then secured sole-source hauling contracts with the Roads Division. Like Eastlick, Huston paid Rosette cash kick-backs on a per truck per day basis. Investigators identified in excess of $111,000 in cash withdrawals from the K-K bank account. Between July 2010 and July 2012, K-K Trucking was paid approximately $833,000 from the Roads Division. Rosette admitted to investigators that he accepted cash payments and property from Huston. Huston advised an associate inquiring about the inflated amount of the trucking invoices that the increased amount was necessary to “pay a tax” to tribal officials.
In October 2011 Rosette approved for payment two false invoices from “KN Trucking,” totaling $120,000, knowing that KN Trucking had not performed the work itemized on the invoices. A tribal payment of $120,000 was actually issued to Huston’s company, K&N Consulting. The $120,000 payment was the first deposit into the newly created K&N Consulting bank account at Independence Bank. Rosette, Huston, and Eastlick all admitted to investigators that this claim was entirely fraudulent and designed only to extract money from the tribe. The investigation determined that K&N Consulting was providing claim service consultation to the Tribe with respect to their insurance claim from the 2010 floods, as well as the Tribe’s claims filed with FEMA. Investigators identified in excess of $99,000 in cash withdrawals from the K&N bank account.
The prosecutors told the Court that in March of 2012, Huston paid a $3,000 down payment at Tilleman Motor towards Rosette’s personal purchase of a new Suburban. Other property Rosette received from Huston consisted of a ring, a pair of diamond earrings, and a saddle, all merchandise provided through Leon’s Buy and Sell pawn shop in Havre.
TMP Services was another Huston business; this one established to obtain tribal contracts to provide storage for property after the flood (medical equipment, windows, furniture, etc.). Basically TMP Services was a collection of storage containers. TMP Services did business with the Chippewa Cree Construction Corporation (CCCC) and received over $372,000 in contract payments.
In the summer of 2012, TMP Services submitted a $30,000 invoice for “consulting services” to the CCCC for services provided to the Roads Branch. Investigators recognized the transaction as suspicious because the construction corporation would not, legitimately, be paying the expenses of the Roads Branch as they are entirely separate entities with separate financial interests. The investigation revealed that the invoice was indeed fraudulent and that no consulting services were provided. The invoice was designed to extract tribal monies for the personal benefit of Huston and Rosette. Rosette, as a member of the Board of Directors for the construction corporation, signed off on the check for $30,000. The check was also signed by Sunchild. Investigators also identified—and Rosette confirmed—that Rosette received two check payments from TMP Services totaling $7,500 and three check payments from Huston Leasing totaling $8,000. Investigators also identified in excess of $28,000 in cash withdrawals from the Huston Leasing bank account.
There is no parole in the federal system. Rosette will have to serve the entirety of the sentence less credit for good behavior which cannot exceed 15% of the sentence imposed.
The case was investigated by agents of the Guardians Project, including agents from the Offices of Inspector General for Departments of Interior and Health & Human Services, EPA, and the Criminal Investigations Division of the Internal Revenue Service.
Three Charged in Manhattan Federal Court with December 2014 Fatal Shooting in Manhattan and Eleven Charged with Firearms and Drug Charges from Drug Trade Between New York and VermontRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced charges against three individuals for the December 28, 2014, murder of Rashaun Nicholson, which occurred in Lower Manhattan. Specifically, CORY HARRIS, a/k/a “Hop,” a/k/a “P,” FRANK JENKINS, a/k/a “Frizz” and RAHEEM MALDONADO, were charged with participating in a conspiracy to commit murder for hire; murder for hire; and murder in connection with a narcotics trafficking conspiracy. In addition, HARRIS, JENKINS, and MALDONADO, along with eight others, were charged with participating in a conspiracy to transport large quantities of crack cocaine and heroin from locations in New York City, to Bennington, Vermont, for resale in Bennington. Eight of the defendants, including HARRIS, JENKINS and MALDONADO, were also charged with possessing and using firearms in connection with the narcotics trafficking offense. All 11 defendants were previously taken into custody on charges contained in a previous indictment. The 11 defendants charged in the Superseding Indictment will be arraigned in Manhattan federal court today at 4:30 p.m.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants not only fueled drug addiction and violence in Manhattan and the Bronx, but spread it to small towns and communities outside of New York, like Bennington, Vermont. The defendants did everything in their power, including allegedly using deadly violence, to protect their interests. Thanks to the dedicated investigators of the ATF and the NYPD, these alleged criminals are now off the street.”
ATF Special Agent in Charge Delano A. Reid said: “As has been evidenced in this case, an investigation – when conducted in a thorough and logical manner – can take a considerable amount of time and effort before all of its layers are ultimately revealed. The exhaustive pursuit for the truth by the investigators and prosecutors involved has uncovered yet another alleged crime perpetrated by Harris et al. I hope that this serves as a clear illustration to the criminal element that law enforcement will enthusiastically pursue all leads until all illegal activities are uncovered and all those responsible be deprived of their freedom.”
Police Commissioner William J. Bratton said: “The litany of charges alleged against these individuals demonstrates an ongoing and flagrant disregard for the law. I commend the NYPD investigators and our federal partners for disrupting this violent criminal operation; one that potentially extended well beyond New York and would have put countless innocent people in harm’s way.”
As alleged in the Superseding Indictment and in other documents previously filed in Manhattan federal court[1]:
On December 28, 2014, in connection with a narcotics trafficking offense, FRANK JENKINS, in exchange for a payment from CORY HARRIS and RAHEEM MALDONADO, shot and killed Rashaun Nicholson in the vicinity of 78 Catherine Street, New York, New York.
In addition, from at least in or about 2014, up to and including in or about 2015, CORY HARRIS, 31, DANIEL HERRING, 25, FRANK JENKINS, JR., 21, JARON LANGHORNE, 20, MITCHELL MALDONADO, 24, RAHEEM MALDONADO, 23, UNIQUE NEWELL, 22, ADAM PHILLIPS, 32, KRYSTAL PINSONNEAULT, 32, MIGUEL ROBLES, 31, and LUIS ZABALA, 31, conspired to sell controlled substances, including crack cocaine and heroin, in Vermont and elsewhere. Specifically, the Indictment charges (1) HARRIS, HERRING, JENKINS, LANGHORNE, MITCHELL MALDONADO, RAHEEM MALDONADO, NEWELL, and ZABALA with conspiring to distribute at least 280 grams of crack cocaine, and at least 100 grams of heroin; (2) MIGUEL ROBLES with conspiring to distribute at least 100 grams of heroin; (3) PHILLIPS with conspiring to distribute at least 280 grams of crack cocaine; and (4) PINSONNELAULT with conspiring to distribute mixtures and substances containing crack cocaine and heroin. HARRIS, HERRING, JENKINS, LANGHORNE, MITCHELL MALDONADO, RAHEEM MALDONADO, NEWELL, and ZABALA are charged with using and possessing firearms between 2014 and 2015, in furtherance of the narcotics trafficking conspiracy. HARRIS is also charged with using firearms in April 2012 in furtherance of a separate marijuana trafficking conspiracy.
During the time period charged in the Indictment, members of the conspiracy obtained crack and heroin from locations in New York City, including Manhattan and the Bronx, and then transported the crack and heroin to Vermont, for distribution in and around Bennington, Vermont. The members of the conspiracy sold crack and heroin from private apartments and certain motels in the Bennington area. Many of the members of the conspiracy used firearms in connection with their narcotics trafficking.
Members of the conspiracy also provided heroin, crack, and other controlled substances to certain women in and around Bennington, who were addicted, or became addicted, to those controlled substances. These women assisted members of the conspiracy with the transportation, storage, and distribution of crack and heroin in exchange for additional controlled substances, or in exchange for cash that the women used, in part, to purchase additional controlled substances.
* * *
Apart from PINSONNEAULT, all of the defendants face mandatory minimum prison terms ranging from five years to 35 years, and maximum prison terms ranging from 40 years to life. PINSONNEAULT faces a maximum term of 20 years in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentences imposed on the defendants will be determined by the Court.
A chart containing the names of the defendants, and the charges and maximum penalties they face, is attached.
Mr. Bharara praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York City Police Department, the United States Marshals, the Vermont State Police, and the Bennington Police Department. Mr. Bharara also thanked the United States Attorney’s Office for District of Vermont for assisting his Office at all stages of the investigation.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Michael Gerber and Hadassa Waxman are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
CHARGE(S)
DEFENDANTS
MAXIMUM PENALTIES
Conspiracy to distribute and possess with intent to distribute 280 grams and more of crack cocaine, and 100 grams and more of heroin.
CORY HARRIS, DANIEL HERRING, FRANK JENKINS JR., JARON LANGHORNE, MITCHELL MADONADO, RAHEEM MALDONADO, UNIQUE NEWELL, and LUIS ZABALA
Life in prison
Mandatory minimum: 10 years in prison
Conspiracy to distribute and possess with intent to distribute 100 grams and more of heroin
MIGUEL ROBLES.
Life in prison
Mandatory minimum: 5 years in prison
Conspiracy to distribute and possess with intent to distribute 280 grams and more of crack cocaine
ADAM PHILLIPS
Life in prison
Mandatory minimum: 10 years in prison
Conspiracy to distribute and possess with intent to distribute crack cocaine and heroin
KRYSTAL PINSONNEAULT
20 years in prison
Possession of a firearm in furtherance of a narcotics trafficking offense
CORY HARRIS (2 counts), DANIEL HERRING, FRANK JENKINS JR., JARON LANGHORNE, MITCHELL MADONADO, RAHEEM MALDONADO, UNIQUE NEWELL, and LUIS ZABALA
Life in prison
Mandatory minimum: 5 years in prison, to be imposed consecutively to any other sentence
Conspiracy to commit murder for hire, and murder for hire
CORY HARRIS, FRANK JENKINS, and RAHEEM MALDONADO
Mandatory life in prison
Discharging a firearm in furtherance of a narcotics trafficking offense resulting in death
CORY HARRIS, FRANK JENKINS, and RAHEEM MALDONADO
Life in prison
Mandatory 25 years in prison
Murder in furtherance of a narcotics trafficking offense
CORY HARRIS, FRANK JENKINS, and RAHEEM MALDONADO
Life in prison
[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.
The District of South Carolina U.S. Attorney’s Office Collects $7,089,479.89 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015 and another $41,807,765 in civil matters worked with other Justice Department ComponentsRead the Press Release
Contact Person: Bill Nettles (803) 929-3000
Columbia, South Carolina- U.S. Attorney Bill Nettles announced today that the District of South Carolina collected $7,089,479.89 in criminal and civil actions in Fiscal Year 2015. Of this amount, $4,436,041.94 was collected in criminal actions and $2,653,437.95 was collected in civil actions.
Additionally, the District of South Carolina worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $41,807,765.09 in cases pursued jointly with these offices. This entire amount was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 3, 2015 that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations of the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
United States Attorney Bill Nettles said, “Our office has made a substantial commitment to combatting fraud and collecting funds improperly procured. Our commitment, including 10 full time lawyers and investigators, has made this district one of the leaders in combatting government fraud. We hope that businesses and individuals who commit fraud recognize that the consequences of fraud are more than just the cost of doing business.”
An example of one of these cases, is a prime contractor at the Savannah River Site who paid the government $3.8 million to settle claims that it overcharged taxpayers for a project on the nuclear weapons complex near Aiken, South Carolina. The government contended Parsons Government Services committed a number of False Claims Act violations in its administration of per diem and relocation costs at the Savanah River Site. The allegations included knowingly allowing employees that were going to be relocated to collect per diem rather than relocate them immediately. This practice greatly increased the cost of per diem to the Government and the settlement will hopefully serve as a deterrent to other Department of Energy contractors.
A few weeks ago, the District of South Carolina recovered another $2,000,000 in the settlement of a whistleblower case brought against HCA, a large hospital chain. The whistleblower and United States contended that four hospitals, all located in Florida, submitted claims for lab tests that were not ordered and/or not medically necessary and also billed for fetal biophysical profiles with non-stress tests and also billed for standalone non-stress tests thereby double billing the non-stress tests.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney's Office in the District of South Carolina, working with partner agencies and divisions, collected $24,776,354.00 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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The District of Nebraska U.S. Attorney’s Office Collects $2,133,876.67 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
U.S. Attorney Deborah R. Gilg announced today that the District of Nebraska collected $2,133,876.67 in criminal and civil actions in Fiscal Year 2015. Of this amount, $1,931,940.95 was collected in criminal actions and $201,935.72 was collected in civil actions.
Additionally, Nebraska worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $267,923.76 in cases pursued jointly with these offices. Of this amount, $19,525.76 was collected in criminal actions and $248,398.00 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 3, 2015 that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 93 U.S. Attorneys’ offices and the main litigating divisions in that same period.
U.S. Attorney Deb Gilg praised the efforts of the Assistant U.S. Attorney’s and contributing agencies for these successes. “It is our responsibility to enforce these collections and to assist in the restitution efforts of crime victims”, said Ms. Gilg.
For example, in fiscal year 2015, the District of Nebraska collected a single recovery of $205,428.80 in a case involving criminal fraud perpetrated against the Social Security Administration. It is the U.S. Attorneys’ Offices, along with the department’s litigating divisions, that are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in Nebraska, working with partner agencies and divisions, collected $1,282,010.00 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Texas man sentenced to 30 years in prison for attempting to make a sexually explicit video of a minorRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that a Texas man was sentenced Wednesday to 360 months in prison for attempting to use a child to make a sexually explicit video and attempting to persuade the child’s mother to allow him to sexually exploit the child.
Mark Anthony Thompson, 49, of Richmond, Texas, was sentenced by U.S District Judge Patricia Minaldi on one count of attempting to use a child to produce child pornography and one count of attempting to entice a minor to engage in criminal sexual activity. He was also sentenced to 10 years of supervised release, which includes sex offender monitoring and is required to register as a sex offender. Evidence presented during the four-day trial revealed that Thompson persuaded a Louisiana mother to use her child to produce a sexually explicit video. Thompson also tried to sexually exploit the child. In December of 2013, the victim’s father found disturbing messages, pictures and a video sent from the defendant to the wife’s phone. The father then reported the matter to the DeRidder Police Department.
Homeland Security Investigations, the DeRidder Police Department, Louisiana State Police and the Louisiana Department of Social Services conducted the investigation. Assistant U.S. Attorneys Myers P. Namie and John Luke Walker prosecuted the case.
“This case is disturbing in many ways, but it is also an example of how continued exploitation of children can be stopped,” Finley stated. “I want to encourage all victims of sexual abuse to speak up and know that there is help. We will continue to prosecute these cases and never take exploitation of children lightly. I want to thank the prosecutors and the state, local and federal law enforcement officers who worked diligently to ensure that justice was served in this case. ”
“Child sexual abuse is one of the most heinous crimes HSI investigates as it steals the innocence of children and leaves lasting scars on victims,” said Raymond R. Parmer Jr., special agent in charge of HSI New Orleans. “Criminals who prey on children will continue to be one of the agency’s highest priorities in order to protect the innocent from these terrible crimes.”
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) also encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application (http://www.ice.gov/predator/smartphone-app). Tips also may be submitted anonymously.
Ten Individuals Indicted for Conspiracy to Commit Federal Programs Bribery, Honest Services Wire Fraud and ExtortionRead the Press Release
Ten Puerto Rico businessmen and government officials have been indicted for their alleged participation in several schemes to corruptly give things of value to public officials within the government of the Commonwealth of Puerto Rico in exchange for favorable treatment and awarding of government contracts to various corporations. The 25-count indictment includes charges of conspiracy to commit federal programs bribery and honest services wire fraud, wire fraud, federal program bribery, extortion through fear of economic harm, money laundering, false declarations before a grand jury and obstruction of justice, announced U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico. The FBI is in charge of the investigation.
A federal grand jury in the District of Puerto Rico returned the indictment on Dec. 2, 2015, which includes 25 charges against the following individuals:
- 1.Anaudi Hernández Pérez, businessman and political fund raiser. Although not named in official corporate records, he exercised de facto control over numerous companies doing business with agencies and public corporations of the Commonwealth of Puerto Rico.
- 2.Sally López Martínez, administrator of the Commonwealth of Puerto Rico’s Administración de Desarrollo Laboral (Workforce Development Administration, hereinafter ADL).
- 3.Sonia M. Barreto Colón, purchasing director of the Commonwealth of Puerto Rico’s Autoridad de Acueductos y Alcantarillados (Puerto Rico Aqueduct and Sewer Authority, hereinafter AAA).
- 4.Ivonne M. Falcón Nieves, vice president of AAA. Prior to her position as vice president, Ivonne M. Falcón Nieves served as treasurer of AAA.
- 5.Javier A. Muñiz Álvarez, businessman. Utilized the Company JM Profesional (sic) & Training Group Inc. to secure contracts from the Commonwealth of Puerto Rico.
- Carlos F. Luna Cruz, businessman. Worked for JM Profesional (sic) & Training Group Inc.
- Xavier González Calderón, Administrator for the House of Representatives of the Commonwealth of Puerto Rico.
- Victor R. Burgos Cotto, Director of Technology for the House of Representatives.
- Marielis Falcón Nieves, sister of Ivonne M. Falcón Nieves.
10. Glenn O. Rivera Pizarro, special assistant for administration at the House of Representatives of Puerto Rico.
According to the indictment, Hernández Pérez utilized his political and personal connections with high ranking members of the current government in order to have “his people” appointed in critical government positions within the new administration which took over after the November 2012 elections. He also provided those individuals with things of value in exchange for government contracts, benefits and preferential treatment for several of his corporations. The indictment focuses on benefits Hernández Pérez, his co-conspirators and corporate entities, obtained from the Commonwealth of Puerto Rico’s ADL, the Commonwealth of Puerto Rico’s AAA and the Puerto Rico House of Representatives. The three schemes detailed in the indictment essentially followed the same modus operandi.
The indictment alleges that beginning in or about late 2012 and continuing in or about early 2013, Hernández Pérez and several unindicted co-conspirators formalized their plans to obtain government contracts with numerous governmental entities. Hernández Pérez utilized his personal friendship with Person B (brother of the governor of Puerto Rico, identified as Person A in the indictment), and the good will generated by his substantial fundraising activities during the 2012 election cycle, to position himself to successfully make recommendations on behalf of individuals seeking government appointments and employment after the election.
Hernández Pérez received numerous emails and resumes from individuals seeking his assistance in obtaining positions within the newly elected government. Hernández Pérez, in turn, forwarded many of those emails to government officials, and to the governor’s brother, Person B. Many of these individuals ultimately received government employment. Hernández Pérez and his co-conspirators then set out to form and make alliances with various corporations and limited liability companies that would be used to obtain government contracts, proposals and purchase orders. These companies included: 3 Comm Global Inc., Links Group LLC, EKO Technologies LLC, JM Profesional (sic) & Training Group Inc. and Waffler Avenue LLC. Some of these corporations were formed immediately prior to, or after, the general elections of November 2012.
Hernández Pérez and his co-conspirators were careful to ensure that his name did not appear on any official documentation regarding the formation of the corporations, or on any formal request for government contracts, proposals or purchase orders. Hernández Pérez, however, was present in numerous meetings where the proposals were discussed, was included in internal electronic and oral communications regarding these matters, and received payment from the contracts into corporate bank accounts and other suspicious transactions.
Many of the individuals recommended by Hernández Pérez whom obtained the jobs, ultimately had the authority to approve or authorize contracts, purchase orders, and other financial obligations on behalf of their respective agencies, departments or public corporations, and in return for the recommendations for employment, and/or other things of value, authorized contracts, purchase orders, proposals and payments on behalf of the co-conspirators and their corporations.
Hernández Pérez and his co-conspirators offered and gave, and the public officials solicited and accepted from Hernández Pérez and his co-conspirators, things of value, including expensive meals, personal gifts, expensive fountain pens, purses, bags, concert tickets and the payment of certain accrued debts. Hernández Pérez allegedly kept written electronic records regarding the purpose of his government related business meetings, and the things of value provided to each of these individuals.
Hernández Pérez and his co-conspirators utilized their government influence to receive an unfair competitive advantage over their competitors, in that they: a) received preferred opportunities on certain government “request for proposals” (RFPs); b) received guidance from agency employees on the proper format and content of proposals and bids for government contracts; c) had access to speak and meet with critical employees in decision making positions within the agencies, departments and government corporations; d) received guidance on how to structure bids and proposals in order to avoid the formal bidding process required by law; e) demanded and were provided with explanations from agency employees when their proposals or bids were not selected.
Once awarded the government contracts, Hernández Pérez and his co-conspirators would utilize, often without proper contractual authority, subcontractors who would perform the work defined in the contracts. On many occasions, Hernández Pérez and his co-conspirators provided substandard work on their contractual obligations in that they: failed to make the required payments to suppliers, subcontractors and creditors; failed to abide by the terms of the contract regarding performance results/follow up as required under the contract; failed to competently provide the services they were contracted to perform.
Hernández Pérez is also charged, along with defendants Ivonne Falcón and Marielis Falcón, with Hobbs Act extortion under fear of economic harm. Hernández Pérez and unindicted co-conspirators would utilize their contacts and influence within at least one government dependency (the AAA) to secure, for a fee, the release of legitimate payments due to other corporations, which lacked the current connections within the government. In particular, Hernández Pérez and his associates, obtained property not due to them, specifically, $100,000.00 from Contractor A, in exchange for utilizing his connections within AAA in order to secure a portion of the money owed (approximately $1 million) to Contractor A, with Contractor A’s consent, induced through the wrongful use of a fear of economic loss. Moreover, the Falcón sisters aided and abetted each other to commit extortion. Defendant Ivonne M. Falcón Nieves utilized her position at AAA in order to enable her sister, defendant Marielis Falcón Nieves, to obtain property not due to her, specifically, cash payments, check payments, payments to contractors, and the performance of residential tree trimming, from Contractor A, with Contractor A’s consent, induced through the wrongful use of a fear of economic loss.
The 25 counts detailed in the indictment are as follows:
- Count 1: 18 U.S.C. § 371, Conspiracy to Commit Federal Programs Fraud and Honest Services Wire Fraud regarding contracts with ADL and AAA.
- Count 2: 18 U.S.C. § 1349, Conspiracy to Commit Honest Services Wire Fraud for scheme with ADL.
- Counts 3-5: 18 U.S.C. § 343, substantive Wire Fraud counts for emails related to the scheme with ADL.
- Count 6: 18 U.S.C. § 1349, Conspiracy to Commit Honest Services Wire Fraud for the scheme with AAA.
- Counts 7-9: 18 U.S.C. § 1343, substantive Wire Fraud counts for emails related to the scheme with AAA.
- Count 10: 18 U.S.C. § 666(a)(2), paying a bribe to an agent of an organization receiving federal funds for the scheme with ADL (Sally López Martínez).
- Count 11: 18 U.S.C. § 666(a)(1)(B), receipt of a bribe by an agent of an organization receiving federal funds for the scheme with ADL.
- Count 12: 18 U.S.C. § 666(a)(2), paying a bribe to an agent of an organization receiving federal funds for the scheme with AAA (Ivonne Falcón).
- Count 13: 18 U.S.C. § 666(a)(1)(B), receipt of a bribe by an agent of an organization receiving federal funds for the scheme with AAA (Ivonne Falcón).
- Count 14: 18 U.S.C. § 666(a)(2), paying a bribe to an agent of an organization receiving federal funds for the scheme with AAA (Sonia Barreto).
- Count 15: 18 U.S.C. § 666(a)(1)(B), receipt of a bribe by an agent of an organization receiving federal funds for the scheme with AAA (Sonia Barreto).
- Count 16: 18 U.S.C.§ 1951(a), Extortion Through Fear of Economic Harm (Hernandez Perez).
- Count 17: 18 U.S.C.§ 1951(a), Extortion Through Fear of Economic Harm (Ivonne & Marielis Falcón Nieves).
- Count 18: 18 U.S.C. § 1956(h), Conspiracy to Commit Money Laundering (Hernandez Perez and Muñiz Alvarez).
- Count 19: 18 U.S.C. § 1623(a), False Declarations Before Grand Jury (Carlos F. Luna Cruz).
- Count 20: 18 U.S.C. § 1623(a), False Declarations Before Grand Jury (Carlos F. Luna Cruz).
- Count 21: 18 U.S.C. § 1512(c)(2), Obstruction of Justice (Carlos F. Luna Cruz).
- Count 22: 18 U.S.C. § 1512(c)(2), Obstruction of Justice (Carlos F. Luna Cruz).
- Count 23: 18 U.S.C. § 1512(c)(2), Obstruction of Justice (Carlos F. Luna Cruz and Javier A. Muñiz Álvarez (computer)).
- Count 24: 18 U.S.C. § 1346, Conspiracy to Commit Wire Fraud (money and property) for scheme with PR House of Representatives.
- Count 25: 18 U.S.C. § 666(a)(1)(A), Intentional misapplication of funds by an agent of an organization receiving federal funds for the scheme with House of Representatives (González Calderón, Burgos Cotto and Rivera Pizarro).
“For decades now, political cronyism, favoritism and corruption have robbed the people of Puerto Rico of the right to decent services and unbiased representation, including legally awarded government contracts,” said U.S. Attorney Rodríguez Vélez. “The people of Puerto Rico foot the bill for the underhanded dealings detailed in the indictment. The time for government cronyism that allows some to line their pockets with ill-gotten contracts at the expense of the many, is over. The time for public servants who trade their duty to represent the people of Puerto Rico in exchange for political appointments and gifts, is also over. The people of Puerto Rico deserve the honest services of, not only those in their government, but those who choose to do business with the government. Their violations of the public trust will be prosecuted to the full extent of the law.”
“Unfortunately, this is one more case of graft, greed and corruption that over the last 20 years have contributed to the government of Puerto Rico’s fragile financial condition and on the brink of bankruptcy,” said Special Agent in Charge Carlos Cases of the FBI’s San Juan Division. “It is the responsibility of the leaders of the government of Puerto Rico to ensure this type of reprehensible and corrupt behavior does not occur. The FBI, along with the United States Attorney’s Office, District of Puerto Rico, will always remain vigilant and attack the corruption threat with undeniable and fervent passion. Let there be no doubt this is only the beginning and the investigation will continue. There will be no stone left unturned.”
The case is being investigated by the FBI’s San Juan Division. The case is being prosecuted by First Assistant U.S. Attorney Timothy Henwood and José Capó Iriarte of the District of Puerto Rico, Deputy Chief of the Financial Fraud and Corruption Unit. If found guilty, the defendants are facing possible sentences of up to five years for the conspiracy to commit federal programs fraud and wire fraud, up to 10 years for honest services fraud, up to 20 years for money laundering, Hobbs Act, obstruction of justice and conspiracy to commit honest services fraud.
The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.