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3 December 2015
Justice Department Announces EFG Bank European Financial Group SA, Geneva, and EFG Bank AG Reach Joint Resolution Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that EFG Bank European Financial Group SA, Geneva (EFG Group), and EFG Bank AG (EFG Bank) reached a joint resolution under the department’s Swiss Bank Program. EFG Group and EFG Bank (collectively EFG) will pay a penalty of more than $29 million.
“The Tax Division continues to receive detailed information regarding U.S. accountholders, the methods they used to conceal their foreign accounts and the individuals and entities that assisted in this criminal conduct,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Today’s agreement makes clear that our focus extends well beyond Switzerland, and to those who fled Swiss accounts to hide in other foreign financial institutions – we are right on your trail.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, EFG agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
EFG Group is a holding company and Swiss bank based in Geneva, Switzerland, which is owned by European Financial Group EFG (Luxembourg) SA. EFG Group is the direct and controlling shareholder of EFG International AG, which is a holding company. EFG Bank, which is headquartered in Zurich, Switzerland, and has another Swiss office in Geneva, is the main Swiss private banking subsidiary of EFG International AG. EFG Bank also has representative offices and branches in Asia and the Americas. In 2003, EFG Bank acquired the Geneva-based bank Banque Édouard Constant (BEC). While EFG Group and EFG Bank are participating jointly in the Swiss Bank Program, these two EFG banks are separate legal entities with distinct management and board control.
Until 2013, EFG conducted a U.S. cross-border banking business that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the U.S. government. EFG offered a variety of traditional Swiss banking services that it knew could assist, and did in fact assist, U.S. clients in the concealment of assets and income from the IRS.
Certain EFG Bank private bankers based in Switzerland traveled to the United States approximately two to three times per year until July 2008. At least 72 business trips to the United States took place in connection with seven EFG Bank private bankers between 2005 and 2013. Private bankers from EFG Bank conducted meetings with clients in the United States in Arizona, California, Connecticut, Florida, Georgia, Illinois, Massachusetts, Nevada, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, Texas, Washington, Wisconsin and Washington, D.C.
One EFG Bank private banker had an established third-party client referral model for U.S. clients that involved two lawyers in the United States, one U.S. accountant and one Swiss fiduciary company. At least one member of EFG’s senior management approved and supported this private banker’s relationship with one of the two U.S. lawyers. This same U.S. lawyer asked the EFG private banker not to travel into the United States with a computer and requested that they communicate about U.S. taxpayer clients through faxes rather than email. The EFG private banker responded, “[R]ight – next travel I travel will take no computer with me – I will then buy me one at BestBuy and leave it there for use when I am travelling. So I never will cary [sic] a computer over the border.”
In 2001, EFG entered into a Qualified Intermediary Agreement (QI Agreement) with the Internal Revenue Service (IRS). The Qualified Intermediary regime provided a comprehensive framework for U.S. information reporting and tax withholding by a non-U.S. financial institution with respect to U.S. securities. The QI Agreement required EFG to obtain IRS Forms W-9 and to undertake IRS Form 1099 reporting for new and existing U.S. clients engaged in U.S. securities transactions. Notwithstanding this requirement, EFG chose to continue to service U.S. clients without disclosing their identity to the IRS. In September 2009, a member of EFG Bank’s management discussing its decision to require Forms W-9 from its U.S. clients said that “[t]he intention of the Bank is to cover its back with the IRS, but when clients remitted their W9, I was told that [EFG private bankers] comforted clients by telling them that the Bank will not declare anything systematically to the IRS.” Until June 2013, EFG requested but did not require all of its U.S. clients to provide a signed IRS Form W-9 and to confirm whether their accounts were disclosed to the IRS.
In EFG’s view, the QI Agreement did not apply to accountholders who were not trading in U.S.-based securities or to accounts that were nominally structured in the name of a non-U.S.-based entity. For example, when asked in July 2007 whether an account should be considered a U.S. account if the new corporate account is in the name of a Panama company that was in reality beneficially owned by a U.S. resident, a manager advised that the “account is non-us [sic] for withholding tax QI purposes.” The same manager was asked in March 2008 by an EFG Bank private banker what could be offered to a U.S. couple residing in Mississippi who wanted to open two accounts for $1 million each, and the manager responded, “[i]f they’re declared, they can open in their name and sign W9. If not, suggest they use a pic [private investment company].”
While EFG did not provide direct structuring services to U.S. clients, EFG private bankers and members of EFG’s management suggested the use of structures for EFG’s U.S. clients and provided referrals to third-party service providers. External trust companies created and administered offshore structures incorporated or based in offshore locations such as the British Virgin Islands, Panama and Liechtenstein for certain of EFG’s U.S. clients.
EFG also serviced certain U.S. clients with undeclared accounts held in the names of insurance companies and not the actual beneficial owner of the funds, known colloquially as an insurance wrapper. Insurance wrappers were marketed by third-party providers in the wake of the UBS investigation as a means of disguising the beneficial ownership of U.S. clients. These particular accounts were all held in the name of insurance providers. By the operation of Swiss bank secrecy laws, the U.S. client’s ownership would not be disclosed to U.S. authorities, including the IRS.
In connection with some of the accounts that U.S. clients created and opened in the name of sham offshore entities and insurance wrappers, certain EFG employees suggested, accepted and included in EFG’s account records IRS Forms W-8BEN (or EFG’s substitute forms) provided by the directors of the offshore companies that falsely represented under penalty of perjury that such companies were the beneficial owners, for U.S. federal income tax purposes, of the assets in the accounts. These false Forms W-8BEN were maintained in EFG’s files at the same time as the Swiss Forms A that accurately and truthfully represented the true beneficial owners of the assets in the accounts.
Certain accounts were closed at EFG, since Aug. 1, 2008, in such a way that EFG assisted its U.S. clients in continuing to conceal the assets and income they held at EFG in Switzerland from the IRS. EFG, including senior management in certain instances, assisted U.S. clients with retaining undeclared assets at EFG and allowed undeclared U.S. clients whose accounts were being closed to transfer their assets to non-U.S. accounts at EFG, including accounts held by relatives.
With respect to assets transferred to accounts in countries other than the United States and Switzerland upon account closure, significant amounts were transferred to numerous other jurisdictions. For example, the following amounts were transferred in connection with the closure of U.S.-related accounts:
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At least $12,680,000 was transferred to Bermuda;
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At least $12,460,000 was transferred to Guernsey;
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At least $25,200,000 was transferred to Liechtenstein;
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At least $12,260,000 was transferred to Monaco;
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At least $25,000,000 was transferred to Luxembourg; and
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At least $33,550,000 was transferred to Hong Kong.
In connection with the closure of U.S.-related accounts, significant amounts also were transferred to the Bahamas, the British Virgin Islands, the Cayman Islands, Cyprus, Israel, Panama, Singapore and the United Arab Emirates.
EFG has cooperated with the department and provided timely and comprehensive information to the U.S. government about its cross-border business with U.S.-related accounts. Among other things, EFG provided detailed information concerning the operation of its U.S. cross-border business that included misconduct committed by EFG; names of those private bankers who serviced U.S. clients; and names of those members of management who supervised private bankers servicing U.S. clients, including those private bankers who committed misconduct. EFG also provided responsive, specific and actionable information to the department concerning associated persons, entities and areas of concern for use in other ongoing and potential department investigations.
Since Aug. 1, 2008, EFG held a total of 919 U.S.-related accounts, which included both declared and undeclared accounts, with an aggregate peak of approximately $1.58 billion in assets under management. Of EFG’s 919 U.S.-related accounts, approximately 12 percent were timely disclosed to the IRS through Form 1099 reporting. EFG will pay a penalty of $29.988 million.
In accordance with the terms of the Swiss Bank Program, EFG mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at EFG who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at EFG must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s resolution with EFG Bank European Financial Group SA, Geneva and EFG Bank AG reflects the continued progress of the Department of Justice’s Swiss Bank Program,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International (LB&I) Division. “In resolving these matters, large and small financial institutions are putting their non-compliance behind them and providing information that will lead us to those U.S. taxpayers who have failed to report their foreign accounts and pay their income taxes.”
“The data we’ve collected to date through the agreements as part of the Swiss Bank Program has already uncovered more banks, more facilitators and more account holders,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “Noncompliant account holders who believe their funds are still hidden will find that simply is not true. With each agreement signed, the probability that these criminals will be found grows even more certain. CI and our partners will vigorously pursue those who hide offshore accounts and those who aided this illegal activity.”
Acting Assistant Attorney General Ciraolo of the Justice Department’s Tax Division thanked the IRS and in particular, IRS-CI and the IRS LB&I Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked Kimberle E. Dodd, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jury Convicts Modesto Tri Counties Bank RobberRead the Press Release
FRESNO, Calif. — After a three–day trial, a federal jury found Lloyd George Kenney, 65, of San Jose, guilty today of armed bank robbery, using a firearm during a crime of violence, and of being felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced.
According to evidence presented at trial, on the morning of May 25, 2012, Kenney robbed the Tri Counties Bank located inside the Raley’s grocery store at Roselle and Floyd Avenues, in Modesto. Kenney was armed with a semi-automatic handgun and was heavily disguised, wearing a hockey helmet, facemask, long black coat and gloves. After taking $2,872 from tellers at gunpoint, he fled on a bicycle into a neighborhood and rode to where he had parked a van earlier.
Within minutes of being alerted to the robbery, a Modesto police officer saw Kenney, who was still wearing the helmet, enter his van and begin to drive away. Officer Parsons pulled the van over and Kenney was taken into custody. During a search of the van, officers found cash the taken from the Tri Counties Bank, Kenney’s bike, a hockey helmet, a mask, a loaded Glock handgun and a loaded Browning handgun. While searching Kenney, officers found a police scanner set to channels used by the Modesto Police Department.
Court records reflect that Kenney had federal felony convictions in 1984 and 1985, as well as a felony conviction in San Mateo Superior Court in 1974.
This case is the product of an investigation by the Modesto Police Department and the Federal Bureau of Investigation. Assistant United States Attorneys Michael Frye and Mia Giacomazzi are prosecuting the case.
Kenney is scheduled to be sentenced by United States District Judge Anthony W. Ishii on March 14, 2016. Kenney faces a maximum statutory penalty of life in prison and a $250,000 fine. 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.
J.R. Simplot Company to Reduce Emissions at Sulfuric Acid Plants in Three StatesRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) today announced a settlement with the J.R. Simplot Company that resolves alleged Clean Air Act violations related to modifications made at Simplot’s five sulfuric acid plants near Lathrop, California, Pocatello, Idaho, and Rock Springs, Wyoming. Under the settlement, Simplot will spend an estimated $42 million on pollution controls that will significantly cut sulfur dioxide (SO2) emissions at all five plants and fund a wood stove replacement project in the area surrounding the Lathrop plant. Simplot’s Pocatello plant will receive $15 million in pollution control upgrades.
Once fully implemented, the settlement will reduce SO2 emissions from Simplot’s five sulfuric acid plants by more than 50 percent for approximately 2,540 tons per year of reductions (825 tons per year of which will be at the Pocatello plant). Simplot will implement a plan to monitor SO2 emissions continuously at all five plants and pay an $899,000 civil penalty. Additionally, Simplot will spend $200,000 on a wood stove replacement mitigation project in the San Joaquin Valley, the location of Simplot’s Lathrop facility, to reduce emissions of fine particulate matter (PM2.5), as well as emissions of volatile organic compounds (VOCs), carbon monoxide (CO) and hazardous air pollutants (HAPs).
“Under this proposed settlement, Simplot must upgrade its pollution controls and cut harmful air pollution in half at its acid plants, bringing lasting benefits to communities in three states,” said Principal Deputy Assistant Attorney General Sam Hirsch for the Justice Department’s Environment and Natural Resources Division. “The Justice Department will continue to vigorously enforce the Clean Air Act, which protects public health and air quality for Americans each and every day.”
“This settlement helps address public health risks for local communities in California, Idaho and Wyoming, and furthers EPA’s commitment to reduce harmful air pollution from the largest sources,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The system-wide pollution controls Simplot will install will significantly reduce sulfur dioxide emissions, which can cause serious respiratory problems and exacerbate asthma.”
“The people of southeastern Idaho will receive significant benefits from the cleaner air and better health produced by this settlement,” said U.S. Attorney Wendy J. Olson for the District of Idaho. “I am pleased that the federal government and the J.R. Simplot Company are able to reach this agreement that serves Idahoans so well.”
The Department of Justice and EPA alleged that Simplot made modifications at its five sulfuric acid plants without applying for or obtaining the necessary Clean Air Act permits and obtaining “best available control technology” limits for SO2, as well as for sulfuric acid mist and PM2.5 at one of the sulfuric acid plants in Pocatello.
Short-term exposures to SO2 can lead to serious respiratory problems, including constriction of airways in the lungs and increased asthma symptoms. Additionally, SO2 is a precursor to the formation of PM2.5, which causes a wide variety of health and environmental impacts, including asthma attacks, reduced lung function and aggravation of existing heart disease. Simplot’s Lathrop sulfuric acid plant is located in the San Joaquin Valley in California, which is currently classified as nonattainment for the PM2.5 National Ambient Air Quality Standards and has some of the most difficult challenges meeting those standards in the country. SO2 is a precursor for the formation of fine particulates, so both the SO2 emission reductions from Simplot’s Lathrop plant and the wood stove replacement mitigation project will help reduce PM2.5 emissions in the San Joaquin Valley.
The state of Idaho on behalf of its Department of Environmental Quality and the San Joaquin Valley Unified Air Pollution Control District are parties to the proposed settlement.
This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes acid plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements. The emission rates secured in this settlement will result in the best-controlled, system-wide emissions achieved in any sulfuric acid plant settlement to-date.
The consent decree formalizing the settlement was lodged with the U.S. District Court in the District of Idaho and is subject to a 30-day public comment period and final court approval. The proposed consent decree can be viewed at: http://www.justice.gov/enrd/consent-decrees.
Ilion Man Arrested for Sexual Explotation of A ChildRead the Press Release
SYRACUSE, NEW YORK - Ralph Daniel Smith, 41, of Ilion, New York, was arrested today on a federal indictment, charging him with sexual exploitation of a child, announced United States Attorney Richard S. Hartunian.
The indictment alleges that in November of 2013 Smith, using the pseudonym "Dan Smithson," coerced a 14 year old girl to engage in sexually explicit conduct for the purpose of producing visual depictions of that conduct, in violation of federal law.
The charge filed against Smith carries a minimum sentence of 15 years, and a maximum sentence of 30 years in prison, a fine of up to $250,000.00, and a term of supervised release of at least 5 years and up to life. In addition, a conviction will require Smith to register as a sex offender.
Smith was arraigned today in Syracuse, New York, before a United States Magistrate Judge and remanded pending a detention hearing scheduled for Tuesday, December 8, 2015.
The charges in the indictment are merely accusations. The defendant is presumed innocent until proven guilty.
This case is being investigated by the Ilion Police Department, the Herkimer County District Attorney’s Office, and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Lisa M. Fletcher, as a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to 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.
Honduran National Charged with Illegal Reentry into the United StatesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that NAPTALI ESCOBAR-ARTURO, age 37, from Honduras, was charged today in a one-count Indictment with illegal reentry into the United States after having been previously deported.
According to the Indictment, ESCOBAR-ARTURO was found by Border Patrol agents in the Eastern District of Louisiana after records showed he had been previously deported from the United States to Honduras on October 13, 2009, September 30, 2010, and June 9, 2014.
If convicted, ESCOBAR-ARTURO 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 an Indictment 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 Border Patrol agents in investigating this matter. Assistant U.S. Attorney Gregory M. Kennedy is in charge of the prosecution.
Gurdon Man Sentenced to Life Imprisonment for Kidnapping Resulting in DeathRead the Press Release
Hot Springs, Arkansas - Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Kevin Bolton, age 39, of Gurdon, Arkansas, (formerly of Spartanburg, South Carolina) was sentenced today in the United States District Court in Hot Springs to life in prison without the possibility of parole for one count of Kidnapping Resulting in Death. United States District Judge Susan O. Hickey presided over the sentencing hearing.
According to court records, on March 12, 2013, the victim visited an apartment in Gurdon, Arkansas, where she encountered the defendant, Kevin Bolton, a Gurdon resident. According to statements made by witnesses, Bolton and the victim left the apartment together around midnight in her vehicle. The victim’s mother, after repeatedly and unsuccessfully trying to contact her daughter the next day, became alarmed and filed a missing person’s report with the Gurdon, Arkansas Police Department.Because Bolton was the last person known to be seen with the victim, law enforcement began searching for Bolton, the victim, and her vehicle. Law enforcement officials learned that Bolton had friends on the Cherokee Indian Reservation in North Carolina and sent the information regarding Bolton, the victim and the vehicle to the Cherokee Indian Police Department.
On March 20, 2013, Cherokee Indian Police officers located Bolton driving the victim’s vehicle and conducted a traffic stop. After smelling a strong odor, officers opened the trunk of the car where they found the victim’s body.Bolton was arrested and taken into custody.Bolton was interviewed on several occasions by Clark County Sheriff Jason Watson and other law enforcement officers. During the interviews, Bolton admitted that he and the victim had left together from the apartment around midnight on March 12th. He stated that they drove in the victim’s vehicle to an area in Clark County and parked.He stated that he and the victim argued, that after the victim got out of the vehicle he grabbed her around her neck and choked her until she fell to the ground.He stated that he choked her until he believed she was dead and then put her in the backseat of her car. He stated that after a period of time he stopped the car, choked the victim again, and put her in the trunk of her vehicle.Bolton stated that he then drove the vehicle to Little Rock, Arkansas and eventually to Cherokee, North Carolina where he stayed with friends until his arrest.
This case was investigated by the Clark County Sheriff’s Office with assistance from the FBI, the Cherokee Indian Police Department, and the Jackson County, North Carolina Sheriff’s Office. Assistant United States Attorney Kyra Jenner prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Grand Jury Returns Indictment Charging Individual in Connection with Efforts to Purchase, Export 89 Sniper Rifles to BelarusRead the Press Release
SALT LAKE CITY – A federal grand jury in Salt Lake City returned an indictment late Wednesday afternoon charging Kolar Rahman Anees Ur Rahman, age 44, who was born in India and lives in the United Arab Emirates, with violations of federal law in connection with alleged efforts to purchase 89 Sako .308 caliber sniper rifles and have them exported from the United States to Belarus.
The charges in the four-count indictment include conspiracy to commit an offense against the United States, a violation of the Arms Export Control Act, smuggling goods from the United States, and money laundering. Rahman was arrested in early November in Chicago on a complaint filed in Utah. Following a removal proceeding in Chicago, he is being transferred to Salt Lake City by the U.S. Marshals Service. An initial appearance will be scheduled in Utah when he arrives.
According to the indictment, the Arms Export Control Act authorizes the President of the United States to control the export of defense articles and defense services from the United States. Unless a specific exception applies, the Act provides that no defense articles or defense services may be exported without a license for such export. It is the policy of the United States to deny licenses and other approvals for the export of defense articles and defense services destined for Belarus, as well as other countries subject to an arms embargo.
In November 2013, according to the indictment, a firearms manufacturer in Salt Lake City was contacted through email by someone identified as Individual A in the indictment regarding the purchase of 50 sniper rifles to be shipped to Belarus. The firearms manufacturer notified Individual A that the purchase and delivery would be impossible due to current trade sanctions and embargoes against Belarus. The firearms manufacturer subsequently informed a special agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) about the suspicious inquiry.
An HSI Salt Lake City undercover agent contacted Individual A by email. In those communications, Individual A reiterated his desire to procure sniper rifles in the United States for delivery to Belarus. From November 2013 through May 2015, negotiations between the undercover agent and Individual A did not result in a purchase. However, in May 2015, Individual A introduced the undercover agent to Rahman, designating Rahman as the principal broker for the procurement of the sniper rifles.
The indictment alleges that from May 2015 until November 2015, the defendant engaged in a conspiracy to purchase 89 sniper rifles in the United States and have them exported to Belarus without first obtaining licenses as required. In August 2015, Rahman and an undercover agent agreed that Rahman would make a first purchase of 10 sniper rifles and ammunition for approximately $66,285. No party to the transaction obtained export licenses for the rifles.
In September, according to the indictment, Rahman informed the undercover agent that the final contract with Belarus had been completed and sent the undercover agent a down payment of approximately $13,257 for 10 sniper rifles. Rahman agreed to pay the remaining balance once the rifles arrived in Belarus. He told the undercover agent not to include U.S. invoices with the shipment. Rahman requested that the sniper rifles be shipped by the most direct route possible to Belarus. According to the indictment, the undercover agent informed Rahman that the shipment route would be from the United States to South Africa, to Turkey and then to Belarus.
On Nov. 4, 2015, two undercover HSI agents met with an individual who identified himself as Kolar Rahman Anees Ur Rahman at a hotel near Chicago, according to the indictment. Rahman confirmed he was the same individual the agents had been negotiating with since May. Rahman, the indictment alleges, informed the agents that he understood the risk of illegally obtaining and shipping the sniper rifles to Belarus and that he desired to complete their business transaction as planned. Rahman and the agents discussed future purchases and shipments of the .308 caliber rifles to Belarus. Rahman was arrested by the agents in Chicago later that day.
The potential maximum penalty for conspiracy to commit an offense against the United States is up to five years in prison and a fine of $250,000. A violation of the Arms Export Control Act is 20 years in prison and a fine of $1 million. Smuggling goods from the United States has a potential penalty of 10 years in prison with a fine of $250,000. The money laundering count is punishable by up to 20 years in federal prison and a fine of $500,000.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
Georgia Man Sentenced to Five Years in Prison for Federal Cocaine Trafficking Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Willie Collier, 66, of Macon, Ga., was sentenced this morning in federal court in Albuquerque, N.M., to 60 months in prison followed by four years of supervised release for his cocaine trafficking conviction.
Collier was arrested on Jan. 21, 2014, at the Greyhound Bus Station in Albuquerque after a search of his baggage by DEA agents revealed that Collier was carrying a large amount of cocaine inside a backpack. Collier was subsequently charged in a superseding indictment filed on June 24, 2015 with possession of cocaine with intent to distribute on Jan. 21, 2014, in Bernalillo County.
On Aug. 17, 2015, Collier pled guilty to the superseding indictment. Collier admitted possessing approximately 4.037 kilograms of cocaine on Jan. 21, 2014, and acknowledged that he was being paid to transport the drugs from Phoenix, Ariz., to Memphis, Tenn.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Rumaldo R. Armijo prosecuted the case.
General Electric to Pay $2.25 Million for Violating Federal and State Environmental Laws in Waterford, New YorkRead the Press Release
The General Electric Company (GE) has agreed to pay a $2.25 million civil penalty to resolve a complaint alleging violations of federal and state environmental laws in connection with GE’s use of an incinerator at a manufacturing facility that it once owned and operated in Waterford, New York, announced the Department of Justice, the U.S. Attorney’s Office for the Northern District of New York and , the Environmental Protection Agency (EPA), the New York State Attorney General’s Office and the New York State Department of Environmental Conservation (DEC). Both the complaint and the settlement agreement were filed today in U.S. District Court in Albany.
According to allegations in the complaint, GE owned the Waterford facility from 1947 through 2006 and continued to operate it through early 2007. GE manufactured various products at the facility, including sealants made of silicone. The silicone manufacturing process generated hazardous waste. GE sought and received permits from DEC to dispose of the hazardous waste onsite, subject to compliance with the Clean Air Act (CAA) and the Resource Conservation and Recovery Act (RCRA).
GE disposed of hazardous waste in a rotary kiln incinerator that included an automatic waste feed cut-off system designed to shut down the incinerator if GE deviated from operating parameters designed to ensure compliance with the CAA and RCRA. Unbeknownst to federal and state authorities, GE used a computer program to override the incinerator’s automatic waste feed cut-off system, allowing GE to continue to burn hazardous waste in the incinerator in violation of its CAA and RCRA permits. On at least 1,859 occasions during the period of September 2006 until February 2007, GE employees manually overrode the automatic waste feed cut-off system, thereby potentially exposing the public and the environment to harmful hazardous air pollutants, such as carbon monoxide, dioxins and furans. Though its employees were violating federal and state law, GE submitted routine compliance reports to the United States and the state of New York falsely attesting to compliance with RCRA, the CAA and permits issued pursuant to those statutes.
“GE violated the nation’s and New York’s bedrock environmental laws that were put in place to protect the American public and the environment from harmful air pollution and hazardous materials,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This settlement penalizes GE for these violations of law, and represents the combined efforts of the federal government and the state of New York to uphold the law and protect public health.”
“By operating a system to bypass safety controls, GE put the public and the environment in harm’s way,” said First Assistant U.S. Attorney Grant C. Jaquith for the Northern District of New York “This office will continue to pursue vigorously companies that thwart laws designed to protect public health, safety, and our environment.”
“GE overrode a system designed to deal with dangerous air pollutants from a hazardous waste incinerator,” said Regional Administrator Judith A. Enck for EPA. “By overriding the system, GE allowed the hazardous waste to continue to be fed into the incinerator, leading to levels of carbon monoxide that exceeded the permit limits.”
“Violations of New York State’s environmental laws and regulations are serious offenses, which carry serious consequences,” said Acting Commissioner Basil Seggos for DEC. “This fine is the result of the collaborative efforts of state and federal partners working together to accomplish a shared mission to protect our citizens and communities and should send a strong message that New York State has zero tolerance for those who shirk environmental policies and procedures put in place as protections. I commend DEC’s Law Enforcement Officers for their determined vigilance in this investigation. This is a great example of the important work they perform in the course of their sworn duty to protect the citizens of New York and the environment.”
This case was investigated by EPA and DEC, and is being handled by Assistant U.S. Attorneys Thomas Spina Jr. and Adam J. Katz and Assistant Attorneys General Maureen F. Leary and James C. Woods.
Gang Associate Sentenced to Federal Prison on Drug Trafficking and Firearms ChargesRead the Press Release
PROVIDENCE, R.I. – Antonio Fortes, 25, of Cranston, an associate of the YNIC street gang, was sentenced today to 48 months in federal prison on drug trafficking and firearm charges, announced United States Attorney Peter F. Neronha and Daniel J. Kumor, Special Agent in Charge of the Boston Field Division of ATF.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Fortes to serve 3 years supervised release upon completion of his prison term, the first six months to be served in home confinement. Fortes pleaded guilty on September 15, 2015, to one count each of possession with the intent to distribute heroin, possession with the intent to distribute crack cocaine and being a felon in possession of a firearm.
Fortes is also facing murder, assault and weapons charges in Rhode Island state court for his alleged role in the October 22, 2014, shooting in Providence that resulted in the death of Terry Robinson. Fortes is charged with one count of murder, three counts of discharge of a firearm while in the commission of a crime of violence, two counts of assault with a dangerous weapon, two counts of carrying a firearm without a license, and one count of conspiracy.
According to federal court documents and information presented to the court, an investigation by ATF agents into Fortes drug trafficking activities included controlled purchases of crack cocaine and repeated surveillance by law enforcement. The investigation culminated with the execution of a court authorized search of Fortes’ residence on March 24, 2015, which resulted in the seizure of numerous packets of heroin, crack cocaine and a loaded .45 caliber handgun.
The case was prosecuted by Assistant U.S. Attorneys Milind M. Shah, with the assistance of Assistant U.S. Attorney William J. Ferland.
Law enforcement officers from the Cranston, Pawtucket and Providence Police Departments assisted agents from ATF in the investigation of this matter.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Fourth Conspirator Admits to the Robbery of a Pikesville Jewelry Store Including Kidnapping and Brandishing a GunRead the Press Release
Baltimore, Maryland – Marat Yelizarov, age 28, of Pikesville, Maryland, pleaded guilty today to conspiracy, kidnapping, and brandishing a firearm in relation to a crime of violence, in connection with the robbery of a jewelry store, including a home invasion robbery, carjacking and kidnapping.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to his plea agreement, Yelizarov was part of a conspiracy to rob a Pikesville jewelry store. In the course of the conspiracy, Yelizarov participated in an armed home invasion robbery designed to obtain firearms for use in the later robbery of the jewelry store.
Specifically, on July 22, 2012, Yelizarov, Zilberman and other conspirators robbed a home in Reisterstown, Maryland. Zilberman was familiar with the layout of the home, having been there as a guest on a number of occasions. Zilberman knew that the residents of the home owned firearms and he had handled and fired some of the weapons. After conducting surveillance of the home for several days prior to the robbery, at 2:30 a.m. on July 22, 2012, Yelizarov, Zilberman and their co-conspirators traveled to the home in Reisterstown. Dressed all in black and wearing ski masks and latex gloves, Zilberman and his co-conspirators entered the home through the unlocked garage door. A co-conspirator was armed with a handgun when they entered the residence. Yelizarov, Zilberman and another conspirator grabbed long guns and carried them throughout the home. A resident of the home was asleep when the four robbers entered his bedroom and woke him up, pointing guns at him and shining flashlights in his eyes. A co-conspirator beat the resident when he tried to resist while Yelizarov began to tie up the resident with a belt and a cord. For approximately one hour the robbers ransacked the home looking for firearms and other valuables. After the robbers left, the resident was able to free himself and call police. The resident was taken to the hospital for treatment of his injuries. Among the items stolen from the house were 10 long guns (rifles and shotguns), a crossbow, a laptop computer and jewelry. Numerous electronic devices including computers and televisions were destroyed during the robbery. The value of the items stolen was approximately $10,000.
A co-conspirator devised a plan to commit an armed robbery of a jewelry store, and recruited Yelizarov, Igor Yasinov, Peter Magnis, Grigoriy Zilberman and others to participate in the robbery. Prior to the robbery, the conspirators gathered intelligence, including conducting surveillance and attaching a GPS device to the car of an employee of the jewelry store in order to learn the employee’s travel routine and habits. Zilberman also exploited his friendship with the employee to obtain information about the operation of the jewelry store and the habits of the employee.
According to Yelizarov’s plea agreement, on January 15, 2013, Zilberman enticed the employee to visit his home, in order to alert the other co-conspirators of the employee’s whereabouts. While the employee was at Zilberman’s home, Yelizarov, Yasinov, Magnis and two other conspirators met at the residence of a sixth conspirator to prepare for the kidnapping and robbery, including preparing the firearms and donning masks and gloves. Yelizarov and one of the conspirators then drove to Zilberman’s home in order to alert the other conspirators of the employee’s departure. Early in the morning on January 16, 2013, Yelizarov and the other conspirator followed the employee from Zilberman’s home for a while, and then stopped. Yelizarov was aware that co-conspirators planned to abduct the employee to obtain keys and information to gain entry to and rob the jewelry store. Meanwhile, Yasinov, Magnis and two other co-conspirators driving in a rental car obtained by Yasinov, used a law enforcement-type light bar and a loudspeaker to impersonate a police officer and pull over the employee. Brandishing firearms, Yasinov, Magnis and the other co-conspirators removed the employee from his car, bound and blindfolded the employee, put him into the trunk of his own car, and drove him to a predetermined location. Once at the location, Yasinov, Magnis, and the co-conspirators continued to brandish firearms and threatened to kill the employee’s family if he did not comply with their demands or if he reported the incident to police. The employee complied and at approximately 3:52 a.m., two co-conspirators drove the employee’s vehicle from the remote location to the jewelry store. Yasinov and Magnis stayed with the employee. Yelizarov and another co-conspirator were stationed near the jewelry store to act as “look-outs.” Two co-conspirators entered the jewelry store and stole jewelry, stones, and watches, valued at about $500,000, then drove back to the remote location. The employee was then placed back into the trunk of his car and driven to another location, where he was left. The employee was able to kick his way out of the trunk through the back seat of his car.
On January 18, 2013, one of the conspirators sold a portion of the stolen jewelry for approximately $29,000 to an FBI informant. On January 19, 2013, the conspirator traveled to Brooklyn, New York to sell some of the jewelry and stones taken during the robbery, receiving over $100,000. On January 21, 2013, the conspirator returned to Maryland and divided the cash proceeds among the members of the conspiracy and others. Yelizarov received cash for his role in the crimes.
On January 25, 2013, one of the conspirators was arrested in Buffalo, New York, and contacted Yelizarov, who agreed to assist in cleaning out the conspirator’s residence and disposing of evidence related to the jewelry store robbery, including a gun, laptop computer, ammunition, the GPS device, and other evidence of the crimes.
Yelizarov faces a maximum sentence of 20 years in prison for the robbery conspiracy; a maximum of life in prison for kidnapping; and a minimum mandatory sentence of seven years, and a maximum of life in prison for brandishing a firearm in relation to a crime of violence. U.S. District Judge J. Frederick Motz has scheduled sentencing for March 9, 2016, at 9:30 a.m.
Grigoriy (Greg) Zilberman, age 24, of Owings Mills, Maryland, and Peter Aleksandrov Magnis, age 27, of Hydes, Maryland, and Igor Yasinov, age 26, of Baltimore, previously pleaded guilty to their roles in the robbery conspiracy and are scheduled to be sentenced on December 18, 2015, December 22, 2015, and March 8, 2016, respectively.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Paul E. Budlow and Aaron S. J. Zelinsky, who are prosecuting the case.
Four St. Bernard Parish, Louisiana, Correctional Officers Charged with Violating the Civil Rights of an Inmate Resulting in her DeathRead the Press Release
WASHINGTON – A grand jury today indicted four correctional officers from the St. Bernard Parish Prison in Chalmette, Louisiana, for violating the civil rights of inmate Nimali Henry by deliberately ignoring serious medical needs that led to her death. The indictment was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana and Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Division.
The indictment charges that Captain Andre Dominick, Corporal Timothy Williams, Deputy Debra Becnel and Deputy Lisa Vaccarella each knew that Henry had serious medical conditions and willfully failed to provide her with necessary medical attention. As a result of the lack of medical attention, Henry died at the St. Bernard Parish Prison on April 1, 2014. The indictment also charges each of the defendants with making a false statement to the FBI.
The civil rights charge carries a maximum penalty of life in prison and each false statement charge carries a maximum penalty of five years in prison.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI’s New Orleans Division with Special Agent Matthew Russell as the case agent. The case is being prosecuted jointly by Trial Attorney Christine M. Siscaretti of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Chandra Menon of the Eastern District of Louisiana.
Four St. Bernard Parish, Louisiana, Correctional Officers Charged with Violating the Civil Rights of an Inmate Resulting in Her DeathRead the Press Release
A grand jury today indicted four correctional officers from the St. Bernard Parish Prison in Chalmette, Louisiana, for violating the civil rights of inmate Nimali Henry by deliberately ignoring serious medical needs that led to her death. The indictment was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana and Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Division.
The indictment charges that Captain Andre Dominick, Corporal Timothy Williams, Deputy Debra Becnel and Deputy Lisa Vaccarella each knew that Henry had serious medical conditions and willfully failed to provide her with necessary medical attention. As a result of the lack of medical attention, Henry died at the St. Bernard Parish Prison on April 1, 2014. The indictment also charges each of the defendants with making a false statement to the FBI.
The civil rights charge carries a maximum penalty of life in prison and each false statement charge carries a maximum penalty of five years in prison.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI’s New Orleans Division with Special Agent Matthew Russell as the case agent. The case is being prosecuted jointly by Trial Attorney Christine M. Siscaretti of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Chandra Menon of the Eastern District of Louisiana.
Dominick et al Indictment
Former U.S. Congressional Staffer Pleads Guilty to Receiving Child PornographyRead the Press Release
WASHINGTON – A former congressional staffer pleaded guilty yesterday to one count of receiving child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John Parker of the Northern District of Texas and Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Field Office.
James Maines Jr., 54, of Mesquite, Texas, pleaded guilty before U.S. Magistrate Judge David L. Horan of the Northern District of Texas in Dallas to one count of knowingly receiving child pornography. Maines is scheduled to be sentenced on March 16, 2016, before U.S. District Court Judge Ed Kinkeade of the Northern District of Texas.
In connection with his guilty plea, Maines admitted that in November 2012, he attempted to forward five child exploitation images from his email account to his U.S. House of Representatives email account. Maines also admitted that he had received these and other child exploitation images via the Internet. Forensic analysis of Maines’s computer revealed a number of child exploitation images, some of which Maines had downloaded as early as 2004.
Assistant U.S. Attorney Camille Sparks of the Northern District of Texas and Trial Attorney Mi Yung Park of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) are prosecuting this case. The FBI’s Dallas Field Office investigated the case with the assistance of the FBI’s Washington, D.C., Field Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Former U.S. Congressional Staffer Pleads Guilty to Receiving Child PornographyRead the Press Release
A former congressional staffer pleaded guilty yesterday to one count of receiving child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John Parker of the Northern District of Texas and Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Field Office.
James Maines Jr., 54, of Mesquite, Texas, pleaded guilty before U.S. Magistrate Judge David L. Horan of the Northern District of Texas in Dallas to one count of knowingly receiving child pornography. Maines is scheduled to be sentenced on March 16, 2016, before U.S. District Court Judge Ed Kinkeade of the Northern District of Texas.
In connection with his guilty plea, Maines admitted that in November 2012, he attempted to forward five child exploitation images from his email account to his U.S. House of Representatives email account. Maines also admitted that he had received these and other child exploitation images via the Internet. Forensic analysis of Maines’s computer revealed a number of child exploitation images, some of which Maines had downloaded as early as 2004.
Assistant U.S. Attorney Camille Sparks of the Northern District of Texas and Trial Attorney Mi Yung Park of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) are prosecuting this case. The FBI’s Dallas Field Office investigated the case with the assistance of the FBI’s Washington, D.C., Field Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Flight Attendant Pleads Guilty to Making False Bomb ThreatRead the Press Release
BOSTON – A former American Airlines flight attendant pleaded guilty today in U.S. District Court in Boston to making a false bomb threat on a plane scheduled to fly from Boston to Miami.
Nancy Marie Gray, 52, pleaded guilty to one count of giving false information about the presence of a bomb on an aircraft and was sentenced by U.S. District Court Judge Indira Talwani to time served, approximately 18 months in prison.
On Sept. 30, 2009, while working as a flight attendant on American Airlines Flight 1318 scheduled to fly from Boston to Miami, Gray wrote "Bomb on Board! BOS-MIA" on the inside of the airplane’s bathroom storage closet during pre-flight preparations. Claiming that she had discovered the note, Gray informed the lead flight attendant and the pilot. After inspecting the note, the pilot immediately halted the ongoing boarding procedure, evacuated the plane, and notified airport security and law enforcement. Dozens of first responders quickly reported to the scene, and the plane was swept with a bomb-sniffing dog before removing the aircraft to a remote location at Logan International Airport. There, all luggage was unloaded from the plane and checked for explosives, and the exterior of the plane and its cargo hold were thoroughly searched. No bomb was found.
Gray was indicted in August 2010. After a jury trial in March 2013, she was found guilty of making the false bomb threat and sentenced to prison. Gray was released from prison in March 2015 after the First Circuit Court of Appeals granted her a new trial due to an erroneous jury instruction given at the close of the 2013 trial. Instead of a new trial, Gray chose to plead guilty, admitting that she was, in fact, responsible for making the false bomb threat on AA Flight 1318.
United States Attorney Carmen M. Ortiz; Michael Ondocin, Supervisory Air Marshal in Charge of the Federal Air Marshal Service, Boston Field Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Kelly Begg Lawrence and John A. Capin of Ortiz’s Criminal Division.
Former Credit Union Employee Sentenced to Federal PrisonRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that Chief U.S. District Court Judge Brian A. Jackson sentenced WHITTNEY M. LATHAN of Baton Rouge, Louisiana, to ten (10) months in federal prison; a five-year term of supervised release following her release from prison; restitution in the amount of $508,182; and forfeiture of assets in the amount of $309,350.
On September 3, 2015, LATHAN was convicted of bank fraud, in violation of Title 18, United States Code, Section 1344. Her conviction stemmed from her scheme to defraud the Dow Federal Credit Union out of over $500,000 from January 2, 2009 through June 29, 2013, while employed as a teller.
This matter was prosecuted by Assistant United States Attorney Rene Salomon. This matter was investigated by the Federal Bureau of Investigation.
Former Beverly Hills Broker Now Charged with Fugitive Investment Advisor Florian Homm in $200 Million Stock Manipulation SchemeRead the Press Release
Superseding Grand Jury Indictment Adds New Fraud and Money Laundering Charges against Fugitive Hedge Fund Manager, Beverly Hills Broker, and 2 Homm Employees
LOS ANGELES – A former Beverly Hills stockbroker has been indicted – along with fugitive hedge fund manager Florian Homm and two others – in an alleged stock manipulation scheme designed to pump up the reported profits of the Homm-managed hedge funds in a fraud that caused investors to lose approximately $200 million.
A federal grand jury yesterday afternoon returned a superseding indictment that charges three others who alleged participated in a scheme orchestrated by Homm. The new defendants are: Todd Ficeto, 49, of Marion, Ohio, who formerly resided in Malibu; Colin Heatherington, 41, of Port Alberni, British Columbia, Canada; and Craig Heatherington, 38, of Queensland, Australia.
Ficeto today surrendered to federal authorities and is scheduled to be arraigned on the indictment this afternoon in United States District Court in downtown Los Angeles.
Florian Wilhelm Jürgen Homm, 53, was first indicted in March 2013 on charges of securities fraud and wire fraud after he was arrested in Italy (see: http://go.usa.gov/cBCcV). The superseding indictment returned yesterday adds the three new defendants and charges Homm in new counts with investment adviser fraud, money laundering and unlawful monetary transactions.
Homm was the founder and chief investment officer of Absolute Capital Management Holdings (ACMH), a Cayman Islands-based investment advisor that operated from Palma de Majorca in Spain and managed eight hedge funds (the Absolute Funds). Ficeto was the president of a Beverly Hills-based broker-dealer, Hunter World Markets, that he co-owned with Homm. Colin Heatherington was a stock trader at ACMH.
The superseding indictment charges Homm, Ficeto and Colin Heatherington in a conspiracy to commit securities fraud and eight counts of securities fraud. The indictment charges that, between September 2004 and September 2007, Homm directed the Absolute Funds to buy billions of shares of thinly traded, United States-based “penny stocks” through Hunter World Markets. Ficeto allegedly arranged the stock purchases and caused millions of shares of the same penny stocks to be given to Homm, Hunter World Markets, and CIC Global Capital, which was co-owned by the Heatheringtons
After the hedge funds invested hundreds of millions of dollars in the illiquid penny stocks, Homm and Colin Heatherington caused the hedge funds to trade the stocks among themselves in “cross-trades” made with the assistance of Ficeto at Hunter World Markets, according to the indictment. The cross-trades served to increase the trading prices of the previously illiquid stocks and, in turn, to boost the net asset values and apparent performance of the Absolute Funds, in a practice called “portfolio pumping.” This apparent performance improvement at the hedge funds generated additional fees for Homm and Absolute Capital. It also boosted Absolute Capital’s stock price on the London Stock Exchange, Alternative Investment Market, from which Homm profited by selling shares.
According to the indictment, while manipulating the trading of the penny stocks to falsely and artificially increase the profitability of the Absolute Funds, Homm, Colin Heatherington (through CIC Global Capital), and Ficeto also sold their own personal holdings of the same U.S. penny stocks to the Absolute Funds at the inflated prices, which the indictment alleges was simply embezzling money from the funds.
The indictment further charges two money laundering conspiracies. In the first scheme, Homm, Ficeto and other unnamed conspirators allegedly worked together in an elaborate conspiracy to launder Homm’s illicit proceeds throughout the world.
In the second scheme, Ficeto allegedly conspired with the Heatheringtons to launder the proceeds received from CIC Global Capital through Canada and Switzerland.
The indictment also charges various unlawful monetary transactions associated with the money laundering conspiracies.
The indictment further alleges that Ficeto engaged in unlawful monetary transactions by sending nearly $10 million of illicit proceeds to an account the Cook Islands, and then lied to the Securities and Exchange Commission about the Cook Islands account. Ficeto additionally is charged with Investment Adviser Fraud in connection with a hedge fund called the Hunter Fund, in which the Absolute Funds invested and also was used to conceal investments by the Absolute Funds in the penny stocks and to manipulate the stock market.
The indictment alleges that as the scheme unraveled, Homm dumped tens of millions of dollars of his own shares in Absolute Capital and resigned from the firm in the middle of the night on September 18, 2007.
In March 2013, Homm was taken into custody in Italy after being arrested at the Uffizi Gallery in Florence. Homm was arrested pursuant to a provisional arrest warrant sought by federal prosecutors in Los Angeles after they filed a criminal complaint containing charges related to the alleged fraud scheme. The United States sought Homm’s extradition to the United States and he was ordered extradited by the Italian Ministry of Justice, but Homm ultimately was released and is believed to have fled to Germany, where he remains a fugitive.
Colin Heatherington is believed to be in Canada, and Craig Heatherington is believed to be in Australia.
The indictment also contains a forfeiture allegation that would cause the defendants, if convicted of any of the securities or money laundering counts in the indictment, to forfeit to the United States “any and all property, real and personal, which constitutes or is derived from proceeds traceable to” any of those crimes.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Each charge of conspiracy to commit securities fraud and securities fraud carry a statutory maximum penalty of 25 years in federal prison. The money laundering charges each carry a maximum penalty of 10 years in federal prison. Each charge of investment adviser fraud, obstruction of justice, and false statements carry a maximum statutory penalty of five years in federal prison.
The case against Homm is the product of an ongoing investigation by the Federal Bureau of Investigation. The United States Securities and Exchange Commission and Financial and Regulatory Authority provided assistance to the FBI’s investigation.
The United States Attorney’s Office wishes to thank the Swiss Office of the Prosecutor General of the Confederation for its support and assistance.
Former Bank Teller Pleads Guilty to Theft of Public MoneyRead the Press Release
Cashed More than 361 Fraudulent Tax Refund Checks
A Columbus, Georgia resident pleaded guilty today to one count of conspiracy to commit theft of public money, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney G.F. “Pete” Peterman, III for the Middle District of Georgia.
According to court documents, Vicky Wheeler, 54, worked as a bank teller at a Suntrust Bank branch in Columbus. Between February 2013 and May 2014, Wheeler cashed fraudulent tax refund checks at the request of several individuals in exchange for a fee. These individuals informed Wheeler that the tax refund checks were generated from tax returns filed using stolen identities. To disguise the fraudulent nature of the checks, Wheeler made false entries on the face of the checks to make it appear as if she received identification when the checks were cashed. Wheeler never received any forms of identification. In total, Wheeler received and cashed approximately 361 fraudulent tax refund checks that claimed $780,760.17 in tax refunds.
Sentencing is scheduled for April 12, 2016. Wheeler faces a maximum sentence of five years in prison and a fine of up to $250,000, or twice the loss from the offense. As per the plea agreement, Wheeler agreed to pay restitution in the amount of $780,760.17.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Peterman commended special agents of Internal Revenue Service-Criminal Investigation and the U.S. Secret Service, who investigated the case and Trial Attorney Michael C. Boteler of the Tax Division and Assistant U.S. Attorney Crawford L. Seals of the Middle District of Georgia, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Airline Employee Sentenced in Logan Airport StingRead the Press Release
BOSTON – A former JetBlue Airways employee was sentenced today for smuggling thousands of dollars of what he believed to be drug money past security checkpoints at Boston’s Logan International Airport.
Alvin Leacock, 29, of Dania Beach, Fla., was sentenced today by U.S. District Court Judge Rya W. Zobel to 18 months in prison, one year of supervised release and ordered to pay a fine of $4,500. Leacock pleaded guilty to conspiracy to defraud the United States and two counts of illegally entering an airport area with intent to commit a felony.
A federal undercover operation was initiated at Logan Airport in August 2012, after Homeland Security agents discovered lapses in airport security and the potential for airline employees to smuggle contraband around the employee security system. Alvin Leacock was one of several individuals identified as a potential smuggler.
On two occasions between October 2012 and December 2012, Leacock used airport security credentials to evade Transportation Security Administration checkpoints and smuggled $107,000, which was represented to be drug proceeds, from a non-secure airport area to the secured passenger departure area of Logan. Leacock was paid $4,500 as compensation from a cooperating witness. Unbeknownst to Leacock, the cash smuggling plan was part of an HSI undercover sting operation.
Co-defendant Dino Dunkley, 32, of Mattapan, and a former Delta Airlines employee, pleaded guilty yesterday to the similar charges as Leacock and is scheduled to be sentenced on March 8, 2016.
Three other airline workers identified in the investigation were previously sentenced for similar offenses. In January 2015, Rupert Crossley was sentenced to two years in prison and Anthony Trotman was sentenced to 14 months in prison. Eric Vick was sentenced in May 2015 to 18 months in prison.
U.S. Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Bob Allison, Federal Security Director of the Transportation Security Administration; Dwain Troutt, Special Agent in Charge of the Federal Air Marshal Service; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The U.S. Attorney’s Office would also like to acknowledge the assistance and cooperation of the Massachusetts Port Authority, JetBlue Airways Corporate Security and Delta Airlines. The case is being prosecuted by Assistant U.S. Attorneys Carlos A. López, Maxim Grinberg, and Dustin Chao of Ortiz’s Criminal Division.
Five Defendants Indicted in Bank Fraud SchemeRead the Press Release
Baltimore, Maryland – A federal grand jury indicted five residents of Maryland on charges arising from a bank fraud scheme:
Monika Michelle Hill, age 36, of Cockeysville, Mark Darnelle Peeples, age 31, of Baltimore, Dorian Maurice Griffin, age 20, of Baltimore, Alysia Samon Rascoe, a/k/a “Alysia Simone Roscoe”, age 26, of Baltimore, and
Christopher Vance McKoy, age 24, of Baltimore.The indictment was returned on November 12, 2015 and unsealed upon the arrests of three defendants: Hill, who has been detained; Rascoe, who has been released; and McKoy, who is released and scheduled for arraignment on Friday, December 4, 2015 at 10:45 a.m. Peeples and Griffin remain at large.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; and Chief James W. Johnson of the Baltimore County Police Department.
According to the 18 count indictment, from March 2013 to July 2014, members of the conspiracy would acquire account information and either alter checks to change the payee, or use the information from the check to create counterfeit checks to a new payee. The defendants negotiated fraudulent, stolen, altered and counterfeit checks at branch offices of financial institutions.
The indictment alleges that the defendants created and registered businesses using the identities of others, and opened bank accounts at a bank using the names of these businesses which did not exist other than on paper. The defendants used the identities of identity theft victims or their own identities as the account signatories. They deposited fraudulent, stolen, altered and counterfeit checks into these bank accounts, and then withdrew funds from the accounts by writing checks in their own names.
The indictment alleges that during the course of the scheme, the defendants fraudulently obtained or attempted to obtain over $230,000 from the financial institutions and individual victims, and that they actually received more than $170,000.
Finally, the indictment alleges that from September 24, 2013 to July 2014, Hill was on pretrial release in federal court in Baltimore in case no. 13-0248 ELH, when she conspired to commit bank fraud, and committed bank fraud and aggravated identity theft, as described above.
All of the defendants face a maximum sentence of 30 years in prison for conspiring to commit bank fraud and for bank fraud and a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft. Hill also faces a maximum sentence of 10 years in prison for committing these offenses while on pre-trial release.
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.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service and the Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who is prosecuting the case.
Federal Jury Returns Guilty Verdict in Blankenship TrialRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that a jury sitting in federal court in Charleston, West Virginia, has returned a guilty verdict following the trial of former Massey Energy Chief Executive Officer Don Blankenship. The jury found Blankenship guilty on a federal charge of conspiracy to willfully violate mine health and safety standards.
“This is a landmark day for the safety of coal miners, and not just coal miners, but all working men and women,” stated U.S. Attorney Booth Goodwin. “The jury’s verdict sends a clear and powerful message: It doesn’t matter who you are, how rich you are, or how powerful you are - if you gamble with the safety of the people who work for you, you will be held accountable.”
Over the course of the trial, in which jury selection began on October 1, 2015, the jury heard evidence from 27 witnesses. Many of these witnesses were coal miners who worked at the Upper Big Branch (UBB) mine prior to the 2010 explosion, and they testified in detail from their firsthand knowledge of the unsafe working conditions at UBB, violations of U.S. Mine Safety and Health Administration (MSHA) regulations, and organized efforts to obstruct and interfere with MSHA inspectors. The jury heard from Bill Ross, former Manager of Technical Services at Massey, who testified that he warned Blankenship about the company’s practice of rampant violations, and told the defendant prior to the UBB explosion that Massey’s standard tactic of ignoring or defrauding MSHA could not be sustained without the possibility of a serious accident that could have fatalities. The evidence also showed that Blankenship received daily updates on safety violations and helped perpetuate them.
“The evidence overwhelmingly showed an enterprise that embraced safety crimes as a business strategy. It was reprehensible, and the jury saw it for what it was. Time and time again the defendant chose to put profits over safety. He got rich and the coal miners who worked for him paid the price,” said Goodwin. “This is the first time that I am aware of that the chief executive officer of a major corporation has been convicted of a workplace safety crime. It is my hope that this case will make a difference throughout this country, and make the places where working men and women spend their days a little bit safer. Everyone deserves to go home to their families and friends when their shift is over.”
Blankenship faces up to one year in federal prison, and a fine of up to twice the gain or loss that resulted from his conduct, when he is sentenced on March 23, 2016, in federal court in Charleston.
The prosecution was the result of a comprehensive investigation that took over five years to complete. Blankenship’s conviction is the fifth criminal conviction credited to this investigation. In addition to the convictions of individuals, the results of the investigation also include a resolution of over $200 million with Alpha Natural Resources after it acquired Massey. This agreement established a foundation dedicated to mine safety and health research, the first of its kind, and set aside nearly $50 million in funding for the foundation. That funding has provided the resources for some of the best and brightest minds in the country to pursue research that will make mines safer all over the world.
This matter was investigated by the Federal Bureau of Investigation and the United States Department of Labor’s Office of Inspector General. United States Attorney Booth Goodwin and Assistant United States Attorneys Steven R. Ruby, Gregory McVey, and Gabriele Wohl handled the prosecution and tried the case before a federal jury.
The prosecution is part of a sustained effort by the United States Attorney’s Office for the Southern District of West Virginia to protect the health and safety of West Virginia workers by vigorously prosecuting workplace safety crimes and holding accountable those responsible for dangerous working conditions.
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Federal Jury Convicts Henrico County Man of Gun and Drug ChargesRead the Press Release
RICHMOND, Va. – Nelson Watts Broadie, Jr., 21, of Henrico County, was convicted by a federal jury yesterday of six separate offenses, including possession of a firearm and ammunition by a previously convicted felon, possession and distribution of crack cocaine, and possession and brandishing of a firearm in furtherance of a drug trafficking crime.
Broadie was indicted on Aug. 4, 2015. According to evidence presented at trial, on June 27, 2015, Broadie participated in an armed robbery of a person at his home and discharged his 9 mm firearm during that robbery attempt. Evidence presented also confirmed that between July 15 and July 24, 2015, Broadie possessed the same loaded 9 mm semiautomatic pistol. On July 15, 20, and 21, 2015, Broadie sold crack cocaine to a confidential informant while under surveillance, and during the July 20, and 21, 2015 sales, Broadie sold the crack cocaine to the confidential informant while under surveillance, and while unlawfully possessing and brandishing the same firearm identified above, in order to intimidate that drug customer.
Broadie will be sentenced on March 4, 2016, and faces a mandatory minimum of 32 years in prison for the two counts of possession and brandishing of a firearm in furtherance of a drug trafficking violation crime, plus additional consecutive terms in prison for the possession of a firearm and ammunition by a previously convicted felon, and three counts of possession and distribution of crack cocaine. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; and Douglas A. Middleton, Chief of Police for the Henrico County Police Division, made the announcement after the verdict was accepted by U.S. District Judge Henry E. Hudson.
This case was investigated by officers and detectives with the Henrico County Police Division in conjunction with the FBI’s Central Virginia Violent Crime Task Force. Assistant U.S. Attorney S. David Schiller is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-137.
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Federal Grand Jury Indicts Davon Lymon on Narcotics Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez, Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of ATF and Special Agent in Charge Will R. Glaspy of DEA’s El Paso Division announced today that a federal grand jury has returned a three-count indictment charging Albuquerque resident Davon Lymon, 34, with violating the narcotics trafficking and firearms laws. An arraignment hearing on the indictment has yet to be scheduled.
The three-count indictment charges Lymon with distributing heroin on Sept. 11, 2015 and Oct. 2, 2015, and unlawfully possessing a firearm in Bernalillo County on Oct. 2, 2015 (heroin trafficking indictment) in Bernalillo County, N.M. At the time, Lymon was prohibited from possessing firearms because he previously has been convicted of felony offenses in two state court cases. If convicted on the heroin trafficking counts, Lymon faces a statutory maximum penalty of 20 years in prison. If convicted on the firearms count, he faces a statutory maximum penalty of ten years in prison.
Lymon also is charged in a four-count indictment that was filed on Nov. 17, 2015 (firearms indictment). That indictment charges Lymon with three counts of being a felon in possession of a firearm and ammunition and one count of unlawfully possessing a stolen firearm in Bernalillo County. If convicted, Lymon faces a statutory maximum penalty of ten years in federal prison on each of the four counts in the indictment. Lymon has entered a not guilty plea to this indictment.
Charges in indictments are merely accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
The heroin trafficking case was investigated by the Albuquerque offices of ATF and DEA. The firearms case was investigated by the Albuquerque office of ATF and APD, with assistance from the Albuquerque office of the FBI, the U.S. Marshals Service, the New Mexico State Police, the Bernalillo County Sheriff’s Office, the Rio Rancho Police Department and the New Mexico Transportation Police Division.
Assistant U.S. Attorneys Jacob A. Wishard and Elaine Y. Ramirez are prosecuting the two cases 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, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
Lymon Indictment (95.48 KB)
Fargo Grocery Store Employees Sentenced for Defrauding Food Stamp ProgramRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on Dec. 3, 2015, Lamia Ali, 48, and Abass Hassan Amedi, 51, both from Fargo, ND, were sentenced before U. S. District Judge Ralph R. Erickson for their roles in defrauding the United States of more than $365,000.
From March 2011 through March 1, 2013, Ali operated Noor Al Huda, a neighborhood grocery store located in Fargo. During this period, Ali and Amedi knowingly conducted fraudulent transactions with Supplemental Nutrition Assistance Program (“SNAP,” a federal government program formerly known as the food stamp program) benefits. SNAP benefits are loaded monthly on to Electronic Benefits Transfer (“EBT”) cards, which work in a manner similar to prepaid credit cards. The SNAP benefits recipients may use the benefits to purchase approved items, such as food. These benefits may not be used to obtain cash.
Over eighteen months, Ali and her co-defendant, Amedi, fraudulently cashed out SNAP benefits loaded on EBT cards, a practice commonly known as “discounting” or “cash-back.” For example, Ali and Amedi would conduct a fraudulent transaction by charging $200 to an EBT card. Noor Al Huda’s bank account would then be reimbursed $200 from the SNAP program. Ali and Amedi would give half of that amount they received from the SNAP program—$100—in cash to the EBT card holder. Ali and Amedi often charged an EBT card for the entire month’s benefit amount in one transaction.
As a result of the conspiracy, Ali and Amedi caused a loss of approximately $365,058.10 to the United States Department of Agriculture. Judge Erickson ordered both defendants to forfeit that amount to the United States, to serve periods of home confinement, to perform community service, and to pay $100 special assessments.
This case was investigated by United States Department of Agriculture-Office of Inspector General (“USDA-OIG”).
Assistant U. S. Attorney Jennifer Puhl prosecuted the case.
Fact Sheet on White House and Justice Department Convening--A Cycle of Incarceration: Prison, Debt and Bail PracticesRead the Press Release
On Dec. 2, 2015, the Justice Department hosted a convening to address 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. On Dec. 3, the White House and the department co-sponsored an event called, “A Cycle of Incarceration: Prison, Debt and Bail Practices,” to bring public attention to the connection between poverty and the criminal justice system and highlight state reform efforts. The White House Council of Economic Advisers also released an issue brief exploring the economic inefficiency of fines, fees and bail and their disproportionate impact on the poor.
THE JUSTICE DEPARTMENT’S COMMITMENT TO FAIRNESS IN THE CRIMINAL JUSTICE SYSTEM
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Criminal justice reform is a top priority for the administration and specifically for the Justice Department. The department has taken significant steps to prevent vulnerable communities from becoming justice-involved, and to promote initiatives that reduce the likelihood of recidivism.
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The department’s efforts also include addressing problems that obstruct opportunity, such as poverty, since those who are economically disadvantaged are more easily caught up in the criminal justice system and face greater barriers to reentry. Among these efforts are numerous diversion and reentry programs, as well as the White House Legal Aid Interagency Roundtable, which works to improve federal anti-poverty programs by providing access to legal aid.
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The department is particularly concerned about criminal justice system practices that perpetuate and exacerbate poverty by imposing unnecessary and exorbitant fees and fines, unjust collection practices, unwarranted suspension of drivers' licenses and other legal obligations. Such penalties may appear small in isolation, but in the obligations can easily and rapidly add up.
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These and other practices are not only unwise and harmful, but also inconsistent with constitutional mandates. For example, people are routinely assessed fines that they cannot afford and then jailed for nonpayment without any inquiry into their ability to pay, as required by the Constitution.
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These harms are most frequently felt by the most vulnerable members of our communities, and often in cases involving minor offenses, such as traffic citations. Fees and fines have significant consequences. Individuals face repeated, unnecessary incarceration in already overcrowded jails, lose their jobs and their housing, face escalating debt and often become trapped in cycles of poverty that can be nearly impossible to escape.
JUSTICE DEPARTMENT’S REFORM EFFORTS
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Ferguson Report: In March 2015, the Civil Rights Division released its report on the investigation of the Ferguson, Missouri, Police Department. In addition to finding a series of unconstitutional police practices, the investigation found that the city focused its municipal court operations on revenue generation rather than public safety, resulting in practices that violate the constitutional rights of area residents. The investigation found that courts routinely imposed excessive fines; ordered the arrest of low-income residents for failure to appear or make payments, despite inadequate notice and without inquiring into their ability to pay; and used unlawful bail practices resulting in unnecessary incarceration. Many of these practices disproportionately impacted African Americans. The department is committed to systemic reform in Ferguson including ensuring a court system that respects peoples’ constitutional rights and avoids unnecessary incarceration.
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Statements of Interest and Amicus Briefs: The Civil Rights Division and the Office for Access to Justice have filed a number of briefs in courts to protect the rights of the indigent in criminal proceedings, on a range of topics, including unconstitutional bail practices, meaningful right to counsel under the Sixth Amendment and the criminalization of homelessness.
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Assistance to States and Localities:Through the Office of Justice Programs (OJP), the department will make funding available to support innovative approaches and alternatives to criminal justice fees, fines and other legal financial obligations that contribute to the cycle of incarceration and poverty. OJP’s Office of Civil Rights is also evaluating discrimination complaints against several court systems to determine whether their pretrial and bail policies violate federal laws. Following the convening, the OJP Diagnostic Center will prepare a report to outline a research and policy agenda that will help advance the conversation about criminal justice reform.
COUNCIL OF ECONOMIC ADVISERS ISSUE BRIEF
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Increasing Use of Fines, Fees and Bail:As higher levels of incarceration and law enforcement have placed budgetary pressure on states and local governments, they have increasingly turned to criminal justice payments as a source of additional revenue. Available data suggests that about two-thirds of all prison inmates have criminal justice debts, and rising use of bail payments has contributed to a 60 percent increase in the number of un-convicted inmates in jails between 1996 and 2014.
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Disproportionate Impact on the Poor: Because fines and fees do not take into account the defendants’ ability to pay, they place a disproportionate burden on lower-income defendants and create a highly regressive system of raising revenue and paying for criminal justice operations. Low-income individuals with criminal justice debts may face difficult tradeoffs between paying their debt and purchasing other necessities, and those unable to pay can face incarceration, demonstrating the large human cost of these policies as well. Bail payments set without consideration of financial circumstances can also result in detaining the poorest defendants rather than the most dangerous. For example, in New York City in 2010, nearly 80 percent of arrestees failed to make bail at arraignment for bail amounts less than $500.
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Economic Inefficiency: Assigning fines and fees to low-income offenders represents a highly inefficient way to raise revenue, as these individuals likely do not have the means to pay. Some states are able to collect less than 20 percent of some types of fees, and the low rate of collection sometimes means that the cost of operating the program exceeds the revenue collected. Incarcerating individuals for failure to pay only furthers this problem, with the cost of incarceration alone sometimes exceeding the debt owed.
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Energy Company Landman Sentenced to 63 Months in Federal Prison and Ordered to Pay More Than $1 Million in Restitution for Running Oil and Gas Mail Fraud SchemeRead the Press Release
FORT WORTH, Texas — A 33-year-old energy company landman who admitted running a scheme to defraud his employer, XTO Energy, of more than $1 million, was sentenced this morning, announced U.S. Attorney John Parker of the Northern District of Texas.
Steven E. Fisackerly, 33, of Spring, Texas, was sentenced by U.S. District Judge Terry R. Means to 63 months in federal prison and ordered to pay $1,005,131.00 in restitution. Fisackerly pleaded guilty in May 2015 to an information charging one count of mail fraud. He must surrender to the Bureau of Prisons on January 4, 2016.
According to documents filed in the case, from September 2008 until March 2012, Fisackerly worked in the Fort Worth offices of XTO Energy, Inc. as a landman assigned to the Marcellus Shale wells in West Virginia. A landman is primarily responsible for all surface and mineral land-related matters for his assigned area. Among other things, a landman drafts, negotiates, and administers oil and gas leases, amendments, unit designations, assignments, domestic gas use agreements, surface leases, damage agreements, purchase and sale agreements, and similar documents, all related to oil and gas exploration. Landmen have access to and use computer systems specific to XTO, which XTO uses to map oil and gas leases, track costs related to oil and gas bonus payments, and access oil and gas leases.
Fisackerly admits that beginning in January 2009 and ending in approximately January 2011, he devised and ran a scheme to defraud XTO. He used his knowledge of XTO’s oil and gas lease process, his access to previously approved oil and gas leases and reports, XTO computer systems, Harrison County, West Virginia’s online document inquiry public records data base, and his knowledge of XTO’s oil and gas interests in West Virginia to generate bogus oil and gas leases. He also altered/falsified existing information to generate bogus documents.
In January 2009, Fisackerly selected an XTO oil and gas lease packet from a legitimate landowner, J.G. Fisackerly altered that oil and gas lease packet to show that another individual, E.C., was the landowner. Fisackerly prepared and organized the false oil and gas lease documentation under E.C.’s name and routed the lease packet to management for approval. Once approved, XTO issued bonus check for $180,402.50 to E.C. that Fisackerly obtained. That check was deposited into a bank account controlled by E.C., and E.C. wrote two personal checks, totaling $130,000, to Fisackerly from that account.
Fisackerly also created a sham company, Parallel Interests, LLC, using LegalZoom. He listed himself as the 100 percent member, stating in the formation questionnaire that the reason for creating the company was for mineral interests. Fisackerly also opened a bank account at Bank of America in December 2010 that listed Parallel Interests, LLC on the signature card and named Fisackerly as the only signer on the account.
Fisackerly also created false oil and gas leases and lease packets in the name of Paul Hinkle, President of Parallel Interests, LLC, and executed the documents with a forged notary stamp. He created fraudulent deeds and Harrison County Clerk reference numbers for supporting documentation and provided a nonexistent Post Office Box as the mailing address for the bonus checks. He organized the fraudulent documentation and approved the order of payments. He then obtained additional management approvals and routed the lease packets to XTO’s Land Department, where bonus checks for Parallel Interests, LLC were issued. From there, the bonus checks were routed back to Fisackerly, who then deposited them into the Parallel Interests, LLC Bank of America account he controlled.
During the course of the scheme, Fisackerly engaged in approximately nine fraudulent transactions, causing XTO to issue checks totaling $1,005,131.00
The U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney Nancy Larson was in charge of the prosecution.
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Eastern District of North Carolina U.S. Attorney’s Office Collects $15,047,564.36 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced today that the Eastern District of North Carolina collected $15,047,564.36 in criminal and civil actions in Fiscal Year 2015. Of this amount, $11,011,638.80 was collected in criminal actions and $4,035,925.56 was collected in civil actions.
Additionally, the Eastern District worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $64,395,812.90 in cases pursued jointly with these offices. Of this amount, $64,323,714.67 was collected in criminal actions and $72,098.23 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 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 United States Attorney’s Office has made the efficient and effective collection of restitution on behalf of victims of crime a top priority,” stated Mr. Walker. “Collection of restitution on behalf of the United States is essential during the current budgetary restraints.”
During the past fiscal year the Eastern District of North Carolina has returned millions of dollars to victims of crime. In one such case, US v. Dwight Lane Woolard, over $540,000.00 was recovered and returned to the Department of Defense. In another case, US v. Clay Taylor Strickland, the office recovered and returned $298,415.00 to the United States Department of Agriculture following Strickland’s conviction.
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 North Carolina, working with partner agencies and divisions, collected $3,915,737.00 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.
Douglas D. Jackson Sentenced to 295 Months ImprisonmentRead the Press Release
SOUTH BEND – United States Attorney for the Northern District of Indiana, David Capp, announced that Douglas D. Jackson, age 26, of South Bend, Indiana, was sentenced to 295 months imprisonment, on Thursday, December 3, 2015, in federal court by Judge Robert L. Miller, Jr. Jackson was convicted by a jury trial on July 16, 2015 to six counts of sex trafficking of a minor and one count of possession of a handgun in furtherance of a crime of violence.
According to documents in the case, during May and June, 2014, Jackson transported a minor female to several cities throughout the Midwest for the purposes of prostitution. These cities were Atlanta, Chicago, Indianapolis, Louisville, Memphis, Fort Wayne, and Grand Rapids.
This case was the result of an investigation by the Federal Bureau of Investigation, in coordination with the Michigan State Police and Wyoming Michigan Police Department. The case was handled by the Assistant United States Attorney John M. Maciejczyk
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Dorchester Man Pleads Guilty to Sex Trafficking ChargesRead the Press Release
BOSTON –A Dorchester man pleaded guilty today in U.S. District Court in Boston to transporting two 14 year-old girls from Massachusetts to Rhode Island for the purpose of prostituting them.
Derek Miranda, a/k/a Dub, 21, pleaded guilty to transporting the two girls from Massachusetts to Providence, R.I. on or about Jan. 15, 2015 with the intent for them to engage in prostitution. The following day, Miranda was arrested. He was indicted in July 2015. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for March 9, 2016.
On Jan. 14, 2015, Miranda met two 14 year-old girls who had run away from their homes in Lowell and brought them to a hotel in Brockton where he provided them with different clothes and told them that he “had guys coming over.” One of the girls texted a friend for help who then notified the police and a search was initiated. The girls left the hotel and temporarily stayed with a friend in Brockton. However, as runaways with no place to go, they contacted Miranda who arranged to have them picked up by an Uber driver. Miranda then had them driven to a house in Providence where he intended to have the girls provide sex for a fee. One of the girls texted a friend to notify local law enforcement authorities who then rescued them and arrested Miranda.
United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of the Homeland Security Investigations in Boston, made the announcement today. The case was investigated with the assistance of the Massachusetts State Police assigned to Attorney General Maura Healey’s Office, the Providence, Lowell and Brockton Police Departments, and the Rhode Island Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Civil Rights Enforcement Team and Special Assistant U.S. Attorney Deborah Bercovitch, Chief of AG Healey’s Human Trafficking Division.
District of Montana Collects $4.9 Million in Civil and Criminal Actions in FY 2015Read the Press Release
U.S. Attorney Michael W. Cotter announced today that the Montana United States Attorney’s Office collected $4.9 million in Fiscal Year (FY) 2015 related to criminal and civil actions. In some cases, the U.S. Attorney’s Office worked in conjunction with litigating components of the U.S. Department of Justice. During the past five fiscal years, the U.S. Attorney’s Office for the District of Montana has collected $53.3 million in criminal and 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 collections program illustrates an important aspect of the USAO’s public service mandate that is often overlooked,” said U.S. Attorney Michael W. Cotter. “By recovering funds for victims and the federal treasury that are commensurate to our annual operating budget, we ensure that taxpayer dollars are maximized in our efforts to reduce crime, to compensate its victims, and to ensure that its perpetrators are unable to profit from their illegal activities.”
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 directly 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.
Occasionally, assets from criminals are forfeited by court action. 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. Forfeited assets include currency or bank accounts, real property and cars purchased with illegal proceeds or used to facilitate crimes, guns held by convicted felons, and computers used for child pornography.
Those who regularly follow the news are aware of the function of the United States Attorney’s Office regarding federal criminal prosecution. Equally important, but perhaps not as well known, is the mission, function and success of the Montana USAO in recovering money for the benefit of victims of crime and the U.S. Treasury. This critical mission is accomplished in large part by the Financial Litigation Unit (FLU). The FLU collects criminal restitution, fines, and penalties ordered to be paid to federal agencies when federal programs are defrauded. In addition the FLU Unit helps federal prosecutors identify and forfeit assets that represent the proceeds of or that were used to facilitate federal crimes.
Defendant Sentenced to Prison for Procurement Fraud, Embezzling Employee Benefits and Evading TaxesRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Joanne Tucker, a/k/a “Joanne Krcma,” “Jill Swanson,” and “Jocelyn Turner,” age 50, of Keymar, Maryland, today to a year and a day in prison followed by three years of supervised release for two fraud schemes and tax evasion. Judge Motz entered an order requiring Joanne Tucker to pay restitution totaling $2,092, 961, specifically, $1.6 million for employee benefit fraud, and $492,961 to the IRS for tax evasion. As part of her plea agreement, Tucker will also be required to forfeit $30 million and her residence in Keymar.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Marc I. Machiz, Director of the Philadelphia Regional Office of the Labor Department’s Employee Benefits Security Administration; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Small Business Administration Inspector General Peggy E. Gustafson; and Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations.
According to her plea and court documents, Joanne and her husband, Shaun Tucker, were controlling officers and majority shareholders of Quantell, Inc. and Intaset Technologies Corporation from 2007 to 2010. Quantell and Intaset provided labor services to federal government agencies. In 2010, the Tuckers sold Intaset, but continued to influence its operations.
Federal Procurement Fraud
From 2007 to 2013, the Tuckers and their co-conspirators made false representations to the government regarding the eligibility of Quantell and Intaset for small business, Service Disable Veteran Owned Small Business and other set-aside contracts, including the 2007 Camp Lejeune contract, 2007 Battle Creek, Michigan contract, 2008 Andrews Air Force Base contract, 2008 Beale Air Force Base contract, 2011 Langley Air Force Base contract and 2011 Camp Lejuene contract. The Tuckers and their co-conspirators falsely represented the past revenues, ownership, controlling officers, distribution of profits, location and other key attributes of Quantell and Intaset to multiple federal agencies. When bid protests were lodged by competing firms, the Tuckers and co-conspirators prepared and submitted false responses. The Tuckers’ actions prevented other companies, which the government meant to support with set-aside contracts, from providing contracting services to the federal government.
The Tuckers used the money from the government contracts for their own personal benefit, including: building, purchasing and leasing a 5,000 square foot residence in Swanton, Maryland; additions to property in Taneytown, Maryland, including a personal residence, gym, bar and break room equipped with high definition TVs, top of the line weight equipment, video games and combat wrestling equipment; additions to their residence in Keymar; a 45 foot sailboat named “Quantell;” 2008 Audi A8; 2011 BMW; and mortgage payments related to real estate, watercraft and vehicles.
The Tuckers and their co-conspirators used aliases and false identities to communicate with the U.S. Department of Defense (DOD) in order to falsely portray the past performance of Quantell. They created a fake corporate entity named Staff-It with a fake period of performance from 2005 to 2008 involving more than $12 million of work by Quantell for Staff-It, and falsely indicated that Quantell was supplying service workers at military treatment facilities for Staff-It. Then they created phone lines and had conspirators participate in false phone conversations with DOD representatives so as to deceptively win the 2011 Camp Lejeune contract. The Tuckers and their co-conspirators carried out similar schemes with respect to other past performances, establishing internet phone lines to spoof the location of businesses, and labeling the phone lines based on the fake company contact person.
As a result of the procurement fraud conspiracy, the full value of the contracts awarded to Quantell and Intaset based on the false representations was at least $30 million.
Employee Benefit Fraud
The service contracts awarded by the United States to Quantell and Intaset, as well as the McNamara-O’Hara Service Contract Act (SCA), required Quantell and Intaset to provide bona-fide health and welfare benefits to their service contract employees hired to work for the federal government.
Quantell and Intaset had previously used FCE Benefits Administrators, Inc. (FCE) as a third party administrator, to help fulfill their obligations under the SCA. FCE used the SCA funds to create ERISA Plans for Quantell and Intaset. In July 2009, Shaun Tucker sent letters to FCE and the trustees of employee retirement plans so that he could obtain approximately $285,000 from the existing retirement plans into which the SCA money had previously been paid. The letters falsely claimed that Quantell and Intaset were transferring money to another health and welfare plan, when in fact the Tuckers knew that the money was instead being transferred into a bank account Joanne Tucker had asked a relative to open. Joanne Tucker caused such money to be spent on the Tuckers’ vacation home in Western Maryland and other personal benefits.
In a related fraud, the Tuckers lied to employees of Quantell and Intaset, to FCE and to multiple federal agencies, regarding the compliance of Quantell and Intaset with the SCA, so that the Tuckers and their co-conspirators could divert more than $1 million in SCA monies paid by the government to Quantell and Intaset under service contracts for their own personal benefit. The Tuckers and their co-conspirators used shell companies and companies that they were associated with to conceal the diversion of SCA funds to them. The Tuckers falsely told employees that they would be receiving health and welfare benefits, when in fact the money was being diverted to buy luxury vehicles, and make improvements on the Tuckers’ residences.
As a result of the fraud involving employee benefits, more than $1.6 million of the SCA funds were fraudulently diverted for the co-conspirators’ benefit from at least 350 individual employees.
Tax Fraud
Finally, the Tuckers attempted to evade income tax due of $492,961 for tax years 2009, 2010 and 2011.
Shaun Tucker, a/k/a “Shawn Turner,” and “Mark Tyler,” age 50, of Keymar, Maryland, previously pleaded guilty to his participation in the fraud schemes and was sentenced on November 20, 2015 to eight years in prison. Judge Motz also entered an order that Shaun Tucker forfeit $30 million and his residence in Keymar; and pay restitution of $1.6 million for the employee benefit fraud, and $492,961 to the IRS for tax evasion.
In a related case, co-conspirator Jonathan Mickle, age 43, of Asheville, North Carolina, formerly of Taneytown, Maryland, pleaded guilty on June 25, 2015 to conspiracy to commit wire fraud and tax fraud in connection with the fraud schemes. Judge Motz has scheduled sentencing for Mickle for February 19, 2016, at 9:30 a.m.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This and other cases brought by members of the Task Force demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein commended the U.S. Department of Labor –OIG/Office of Labor Racketeering and Fraud Investigations; IRS – Criminal Investigation; U.S. Department of Labor - Employee Benefits Security Administration; DCIS; SBA Office of Inspector General; and Air Force Office of Special Investigations for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Harry Gruber and Judson Mihok, who prosecuted the case.
Dallas Man Sentenced to 20 Years in Federal Prison on Child Porn ConvictionRead the Press Release
DALLAS — A Dallas man, Andrew Berko, 45, was sentenced this afternoon by U.S. District Judge Jane J. Boyle to 20 years in federal prison following his guilty plea in May 2015 to one count of transporting and shipping child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
Berko has been in custody since his arrest in April 2015 on a related federal criminal complaint.
According to documents filed in the case, the investigation began when a detective with the Sherman Police Department, who was investigating the sharing of child pornography on a file-sharing network called BitTorrent, identified 27 files matched to a law enforcement database as files containing child pornography. The files were linked to an IP address later identified as Berko’s.
Special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed a federal search warrant at Berko’s residence on March 31, 2015. A forensic analysis of his computer they seized revealed 8190 images and 860 videos of child pornography, including more than 800 images and videos of infants and toddlers. Some of the images and videos he collected depicted sadistic and/or violent content.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
ICE HSI and the Sherman Police Department investigated. Assistant U.S. Attorneys Camille Sparks and Lori Walker prosecuted.
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Crime Pays: United States Attorney Stephen R. Wigginton Announces Monies Collected in Southern IllinoisRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that his office collected $19,428,426.20 in criminal and civil actions in Fiscal Year 2015. Of this amount, $9,337,630.59 was collected in criminal actions and $10,090,795.61 was collected in civil actions.
Additionally, the Southern District of Illinois worked with other United States Attorney’s Offices and components of the Department of Justice to collect an additional $36,117,452.46 in cases pursued jointly with these offices. Of this amount, $14,468.49 was collected in criminal actions and $36,102,983.97 was collected in civil actions.
Attorney General Loretta E. Lynch announced on Thursday, 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.
"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 will not stop in its efforts to collect monies owed the United States. The honest and law-abiding citizens of Southern Illinois deserve no less than our best efforts, and, I can assure them that they will continue to receive those best efforts on their behalf. As always, no legal avenue to collect debts owed the United States will go unused." noted United States Attorney Wigginton.
As examples, United States Attorney Wigginton highlighted that his office recovered over $7.75 million dollars from a mortgage fraud case in the Carbondale area and a joint collection of over $25 million dollars from fraud in contracts out of Scott Air Force Base.
Individual United States Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States 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.
Finally, the United States Attorney’s Office for the Southern District of Illinois, working with partner agencies and divisions, collected $537,950.00 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.
Couple Sentenced on Methamphetamine ConvictionsRead the Press Release
PLATTSBURGH, NEW YORK – Billy Slick, age 54, was sentenced today to 60 months in prison as a result of his conviction for conspiracy to manufacture, possess with intent to distribute and distribute methamphetamine.
The announcement was made by United States Attorney Richard S. Hartunian, Special Agent in Charge James J. Hunt, New York Division, Drug Enforcement Administration (DEA), and New York State Police Superintendent Joseph A. D’Amico.
Chief United States District Judge Glenn T. Suddaby also sentenced Billy Slick to serve a four-year term of supervised release, to begin after his release from prison.
On August 26, 2015, Billy Slick’s wife, Danielle Trombly Slick, age 33, was sentenced to 46 months in prison for her role in the methamphetamine conspiracy. Chief Judge Suddaby also sentenced Danielle Slick to serve a three-year term of supervised release, to begin after her release from prison.
The Slicks had lived in Augusta, Georgia, but moved to Clinton County in 2011 and remained in the area through 2013. During that time, the Slicks manufactured and distributed methamphetamine.
This case was investigated by the Drug Enforcement Administration, the New York State Police, the High Intensity Drug Trafficking Areas Program of New York and New Jersey, the Plattsburgh Police Department, the Clinton County District Attorney’s Office, and the Essex County District Attorney’s Office. Assistant United States Attorney Katherine Kopita prosecuted the case.
Civil Settlement Reached with Environmental Testing Company over Claims That Testing Procedures Were Not FollowedRead the Press Release
NEWARK, N.J. – An environmental testing company headquartered in Dayton, New Jersey, will pay $3 million to resolve allegations that it failed to follow proper EPA methodology during some of its tests, U.S. Attorney Paul Fishman announced today.
Accutest Corp., also known as Accutest Laboratories (Accutest) is an environmental testing laboratory founded in 1956. It provides environmental analytical services to industrial, engineering/consulting, and government clients, according to its website.
The settlement resolves allegations that between Jan. 1, 2011, and Dec. 31, 2013, Accutest failed to properly follow EPA standards in analyzing certain soil and water samples in its semi-volatile and extraction laboratories. It was alleged that Accutest did not properly extract samples because: (1) It did not perform the required number of shakes for waste water samples, (2) it did not wait the required amount of time in between shakes of the samples, and (3) it did not properly “spike” samples with a known compound as part of the quality control process, possibly affecting the quality control process in place to ensure that materials in the sample were fully extracted. It was also alleged that Accutest altered the settings on their gas chromatography/mass spectrometry machines and disregarded calibration protocols.
In addition to the $3 million payment by Accutest, the company has agreed to fully comply with the requirements of its certifying bodies regarding notice of the allegations and has agreed to notify any of its clients that could have been impacted by the alleged conduct.
U.S. Attorney Fishman credited special agents of the Environmental Protection Agency under the direction of Special Agent in Charge Thomas E. Muskett of the Environmental Protection Agency, Office of Inspector General, Office of Investigations, Washington Field Office; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig W. Rupert; the U.S. Army Criminal Investigation Division, Major Procurement Fraud Unit, Mid-Atlantic Fraud Field Office, under the direction of Special Agent in Charge Larry S. (Scott) Moreland. He also thanked the U.S. Navy Criminal Investigative Service – Northeast Field Office and the U.S. Air Force Office of Special Investigations.
The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Civil Division in Newark.
The case is captioned U.S. ex rel. Koroush Vaziri, et al. v. Accutest Laboratories, Civil Action, No. 3:13-CV-02223-FLW-TJB.
Defense counsel: Lisa A. Krigsten Esq., Kansas City, Missouri
Counsel for relator: Neil Mullen Esq., Montclair, New Jersey
Child Pornography Charges Filed Against Montgomery County ManRead the Press Release
PHILADELPHIA - Kurt Eichert, 51, of Wyndmoor, Pennsylvania, was charged today by Indictment with one count of production of child pornography, two counts of distribution of child pornography, and one count of possession of child pornography announced United States Attorney Zane David Memeger. The indictment alleges that on or about June 2005 to on or about September 2015, Eichert produced child pornography. Eichert is alleged to have surreptitiously recorded children changing their clothes in Dorney Park in Allentown, Pennsylvania. Eichert is also charged with distributing child pornography in May 2015 and possessing images of child pornography in September 2015.
If convicted the defendant faces a mandatory minimum sentence of 15 years in prison with a maximum possible sentence of 80 years.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations (“HSI”) and the Abington Township Police Department. It is being prosecuted by Special Assistant United States Attorney Josh A. Davison.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Chicken of the Sea and Bumble Bee Abandon Tuna Merger After Justice Department Expresses Serious ConcernsRead the Press Release
Thai Union Group P.C.L., owner of Tri-Union Seafoods LLC, d/b/a Chicken of the Sea International, and Bumble Bee Foods LLC abandoned their plans to merge after the Department of Justice informed the companies it had serious concerns that the proposed transaction would harm competition.
Thai Union’s proposed acquisition of Bumble Bee would have combined the second and third largest sellers of shelf-stable tuna in the United States in a market long dominated by three major brands, as well as combined the first and second largest domestic sellers of other shelf-stable seafood products.
“Consumers are better off without this deal,” said Assistant Attorney General Bill Baer of the department’s Antitrust Division. “Our investigation convinced us – and the parties knew or should have known from the get go – that the market is not functioning competitively today, and further consolidation would only make things worse.”
Thai Union, a publicly-held Thai corporation headquartered in Samutsakhon, Thailand, is the largest global producer of shelf-stable tuna and also offers other shelf-stable and frozen seafood products globally. Thai Union’s Chicken of the Sea subsidiary is headquartered in San Diego, California. Chicken of the Sea sells shelf-stable seafood products under the brand names “Chicken of the Sea,” “Van Camps,” “Genova,” “Pacific Pearl,” and “Ace of Diamonds.” In 2013, Chicken of the Sea earned over $400 million in U.S. revenues.
Bumble Bee is also headquartered in San Diego. Bumble Bee sells shelf-stable seafood products under the brand names “Bumble Bee,” “Wild Selections,” “Beach Cliff,” “Brunswick,” and “Snow’s.” Bumble Bee is wholly owned by privately-held Lion Capital LLP.
Chesapeake Man Pleads Guilty to Armed RobberiesRead the Press Release
NORFOLK, Va. – Raymond Wyche, 47 of Chesapeake, pleaded guilty today to charges involving armed robberies of a Wilco-Hess gas station in Virginia Beach and an Exxon gas station in Chesapeake.
In a statement of facts filed with the plea agreement, Wyche committed these robberies brandishing what appeared to be a firearm aiming it at employees and demanding that they give him money. He stole $651 from the two robberies with which he pleaded guilty. While Wyche covered his face during the armed robberies, three witnesses that know Wyche well were able to identify him through video and audio surveillance. They recognized his voice, certain phrases he used, his mannerisms, size, shape, articles of clothing he wore, and a distinctive pinky ring that he had on his right pinky during all eight armed robberies. After the Exxon gas station armed robbery in Chesapeake, Wyche is seen on video shedding his clothing behind the station and in the process his face became visible.
Wyche was indicted by a federal grand jury on August 5, 2015, on eight counts of interference with commerce by means of robbery and two counts of using a firearm during a crime of violence. The indictment charged the following eight robberies:
Date
Location
Feb. 11, 2014
7-Eleven, 6673 Indian River Road, Virginia Beach
March 19, 2014
Wilco-Hess, 6048 Indian River Road, Virginia Beach
March 25, 2014
7-Eleven, 201 S. Witchduck Road, Virginia Beach
April 25, 2014
Exxon, 841 S. Military Highway, Virginia Beach
June 6, 2014
BP, 4900 Princess Anne Road, Virginia Beach
June 25, 2014
Exxon, 1102 S. Military Highway, Chesapeake
June 29, 2014
7-Eleven, 5444 Virginia Beach Boulevard, Virginia Beach
July 16, 2014
Gulf, 6029 Indian River Road, Virginia Beach
Wyche faces a maximum penalty of 20 years in prison when sentenced on March 16, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the plea was accepted by U.S. Magistrate Judge Doug E. Miller.
This case was investigated by ATF’s Washington Field Division with assistance from the Chesapeake and Virginia Beach Police Departments. Assistant U.S. Attorney William D. Muhr and Special Assistant U.S. Attorney John F. Butler are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-97.
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Chatham Area Transit Officials Indicted in Bribery and Kickback SchemeRead the Press Release
SAVANNAH, GA – Chadwick L. Reese, 44, the Executive Director of the Chatham Area Transit Authority (CAT), and Joel T. Morris, 53, CAT’s Director of Maintenance, were indicted this week by a federal grand jury sitting in Savannah, Georgia for their alleged roles in a bribery and kickback scheme. According to the allegations contained in the Indictment, from April of 2014 to the present, Reese and Morris used their official positions at CAT to enrich themselves by soliciting and accepting cash and other payments in exchange for rigging the award of CAT contracts to selected individuals and companies.
Reese and Morris each face multiple counts of mail fraud and extortion. Each count of mail fraud carries a maximum sentence of 20 years in prison, $250,000 fine and 3 years of supervised release. Each count of extortion also carries a maximum sentence of 20 years in prison, $250,000 fine and 3 years of supervised release. An indictment is only an accusation and is not evidence of guilt. The Defendants are entitled to a fair trial, during which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by the Savannah and Jacksonville offices of the FBI. First Assistant United States Attorney James D. Durham is prosecuting the case on behalf of the United States. Any questions should be directed to Mr. Durham at (912) 201-2547.
Charlotte-Area Appliance Repairman Sentenced to 30 Months on Wire Fraud and Tax Fraud ChargesRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney today sentenced John Wesley Clark, 43, of Charlotte, to 30 months in prison on wire fraud and tax fraud charges, receiving over $576,000 in payments for fraudulent warranty claims, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Clark was also ordered to serve two years under court supervision after his release from prison and to pay $576,669.75 in restitution to Samsung and $184,710.00 as restitution to the IRS. He pleaded guilty to one count of wire fraud and one count of filing a false tax return in June 2015.
Thomas J. Holloman, III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) and Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service join U.S. Attorney Rose in making today’s announcement.
According to the filed court documents and today’s sentencing hearing, Clark was the owner and operator of various Charlotte-area appliance repair companies, including JA Appliance Co; Fitzgerald Appliance Co; BR Appliance; C&A Appliance Co.; D&L Appliance Co.; and J&S Appliance Co. Court records show that beginning in at least 2010 and continuing through 2012, Clark, who is also known as John Isaacs, Jonathan Fitzgerald, and JA Adams, defrauded a major electronics company based in New Jersey by submitting false and fraudulent warranty work order claims, for warranty work that was not performed. According to court records, Clark, sometimes using an alias, established his companies as authorized service centers for the major electronics company. He then submitted the fraudulent warranty work orders that listed, among other things, false customer information, false addresses, false part numbers, and false repair dates. Clark received $576,000 in payments for the fraudulent warranty claims.
Court records also show that for tax years 2010 through 2012, Clark failed to report all of the income he obtained through the fraudulent warranty claims on his federal tax returns. Additionally, Clark filed fraudulent forms W-2 with his federal tax returns that falsely stated that tax withholding had been paid over to the IRS.
Clark will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
* * *
In a separate case, on Monday, November 30, 2015, Judge Whitney also sentenced Sammie Marks, 42, of Matthews, N.C., to 12 months and 1 day in prison and one year of supervised release on a tax evasion charge. He was also ordered to pay $158,614 as restitution to IRS.
According to court records, Marks was the owner of “Marks Metal and Salvage,” located in Charlotte. Court records in that case show that between tax years 2009 and 2013, Marks deposited checks and cash receipts from his businesses and its customers totaling over $1.1 million into his personal bank account, which he did not include in his personal or business tax returns filed with IRS. As a result of the unreported gross receipts, Marks had additional tax liability of $158,614.
The investigation into Clark was handled by IRS-CI and the U.S. Postal Inspection Service. Marks’ investigation was handled by IRS-CI. Both cases were prosecuted by Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte.
Charlotte Man Sentenced to 9 Years in Prison for Firearms OffenseRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced Stephon Deangleo Caldwell, 28, of Charlotte, to 108 months in prison for a firearms offense, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Caldwell was also ordered to serve 2 years under court supervision following his prison sentence.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD).
According to filed court documents and today’s sentencing hearing, on or about December 1, 2014, CMPD officers were attempting to serve Caldwell multiple state warrants at his residence in Charlotte. Court records show that Caldwell began shooting at the officers with his firearm, a Sig Sauer Model P232 pistol. Officers returned fire striking Caldwell who then attempted to flee on foot, but was apprehended shortly thereafter. According to court records, Caldwell is a member of the United Blood Nation gang and has a prior felony conviction which prohibits him from possessing or carrying a firearm. Caldwell pleaded guilty in April 2015, to one count of possession of a firearm by a convicted felon.
At the sentencing hearing, prosecutors urged Judge Whitney to impose a sentence that promotes respect for the law, stating that we must send a message that violence against our law enforcement officers will not be tolerated.
Caldwell has been in federal custody since December 2014. Upon designation of a federal facility, he will be transferred to the custody of the Federal Bureau of Prisons. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and CMPD. The prosecution was handled by Assistant United States Attorneys Elizabeth Greene and William Bozin of the U.S. Attorney’s Office in Charlotte.
Certified Public Accountant Sentenced for Using Her Tax Preparation Business to Facilitate an Income Tax Refund Fraud SchemeRead the Press Release
A Certified Public Account (CPA) was sentenced to 78 months in prison, followed by 3 years of supervised release, and was ordered to pay restitution in the amount of $3,684,921.20 for using her tax preparation business to facilitate an income tax refund fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Pamella B. Watson, 61, of Davie, previously pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343.
According to court documents, Watson operated Watson & Associates Business Services, Inc., a tax preparation business in Miami. Defendant Watson prepared the client’s tax return and provided him/her a copy showing a refund amount and/or an amount payable to the IRS. Without the client’s knowledge or authorization, the figures on the return were changed, and a tax return showing a higher refund amount was filed with the IRS. The client’s bank account received the refund amount reflected on the copy they received from defendant Watson, and the remainder of the tax refund was deposited into an account controlled by Watson. The client did not have any knowledge of the refund falsification and splitting.
Court documents state that Watson prepared approximately 557 U.S. Individual Income Tax Returns (Forms 1040) for tax years 2010 through 2013 for her clients. Approximately 395 (71%) had refunds split into an account controlled by defendant Watson, or the entire refund diverted into Watson’s bank account. From approximately January 2011 through September 2014, defendant Watson deposited $3,405,479.20 of client tax refunds from 183 individual taxpayers into accounts she controlled.
According to court documents, Watson also diverted checks totaling $222,676 into her personal IRS account, and an additional $56,766 in IRS payments from Watson’s clients was applied to an associate’s tax account. These checks were generated by clients who were informed by defendant Watson that they were paying their own tax liability.
Mr. Ferrer commended the investigative efforts of IRS-CI, and thanked the Jamaican Financial Investigations Division for its substantial assistance. The case is being prosecuted by Senior Litigation Counsel Neil Karadbil.
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.
Central District of Illinois’ U.S. Attorney’s Office Collects $5.77 Million in Criminal and Civil Actions in FY 2015Read the Press Release
Springfield, Ill. - U.S. Attorney Jim Lewis announced today that the Central District of Illinois collected $5,769,736 million for taxpayers in criminal and civil actions in fiscal year 2015. Of this amount, $3,402,513 was collected in criminal actions by the Central District and $2,367,233 in civil actions. In addition, working with other Department of Justice entities, $23,420 was collected in criminal actions and $1,362,086 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 the 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.”
“We hold people accountable when the law says that they should be accountable,” said U.S. Attorney Lewis. “We collect restitution for victims of crime, we collect damages if there has been fraud in government programs, we collect debts owed to the government, and we protect federal funds and the public treasury. We do our very best to make sure that justice is done.”
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 Central District of Illinois, working with partner agencies and divisions, collected $218,374 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.
Canadian Man Sentenced for Conspiring to Use Counterfeit Access DevicesRead 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 Yvgeniy Bandarmaliev, 52, of Toronto, Ontario, Canada, who was convicted of conspiring to possess and use counterfeit access devices with intent to defraud, was sentenced to three months in prison by Senior U.S. District Court Judge William M. Skretny. In addition, the defendant was ordered to pay restitution in the amount of $20,176.27 to the Royal Bank of Canada and $66,795.74 to the Canadian Imperial Bank of Commerce.Assistant U.S. Attorney John E. Rogowski, who handled the case, stated that the defendant was charged as a result of his co-conspirator, Petar Petrov, being arrested on September 2, 2013, as he entered the United States from Canada at the Lewiston Bridge. An alert Customs and Border Patrol officer found 10 counterfeit access devices in Petrov’s car. The devices were gift cards which had been altered by having legitimate credit card numbers imbedded in the magnetic strips on the back of the cards. Agents determined that all 10 cards were counterfeit.
Bandarmaliev and Petrov placed “skimming devices” on ATM’s in Canada to obtain account information. The scheme also involved the use of surreptitiously placed cameras to record the personal identification numbers (PINS) used by customers to transact business on ATM’s in Canada. The account information was then placed on the magnetic strips of various gift cards, creating counterfeit access devices. The defendant also used several counterfeit access devices in the Buffalo area between July and September of 2013 to withdraw money from various Canadian bank accounts.
Petrov was also convicted and sentenced to three months in prison.
The plea is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, Special Agent in Charge.
Buffalo Man Arrested on Gun ChargeRead 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 Darryl Bagby, 32, of Buffalo, NY, was arrested and charged by criminal complaint with being a felon in possession of ammunition.Assistant U.S. Attorney Brendan T. Cullinane, who is handling the case, stated that according to the complaint, on November 25, 2015, the Erie County Sheriff’s Department executed a search warrant at the defendant’s residence at 116 Bidwell Parkway in Buffalo. Deputies recovered one round of 7.62 X 39 caliber ammunition and one round of 9mm caliber ammunition, more than $19,000 of cash in United States currency, cocaine, a digital scale and other drug paraphernalia. Further investigation determined that some of the ammunition was manufactured in Russia.
The complaint is the culmination of an investigation by the Erie County Sheriff’s Department, under the direction of Timothy Howard and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Boise Man Sentenced for Possession and Distribution of Meth and Unlawful Possession of a FirearmRead the Press Release
BOISE – Brenon Lawrence, 28, of Kuna, Idaho, was sentenced today to 77 months in prison for possession and distribution of methamphetamine, and possession of a firearm in furtherance of drug trafficking, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Lawrence to pay a $500 fine and serve five years of supervised release following his incarceration. Lawrence pleaded guilty on July 21, 2015.
According to court proceedings, Lawrence was arrested in Boise, Idaho, on December 9, 2014. Boise police officers went to the Boise residence where Lawrence was then residing to arrest him on a state parole warrant. As he and a female friend left the residence to get into a vehicle, the officers approached him. Lawrence dropped a backpack as he ran back toward the residence. Inside the backpack officers found a loaded 9 mm semi-automatic pistol, a folding knife, an expandable baton, small plastic baggies containing 14.5 grams of meth. Lawrence admitted he had he been “jocky-boxing” in Boise the night before and had stolen the gun from a car to get money.
The case was investigated by the Boise Police Department and the Bureau of Alcohol, Tobacco and Firearms.
Atlanta Drug Trafficker Pleads Guilty to Importing Kilograms of Cocaine into SumterRead the Press Release
Contact Person: JD Rowell (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Bryant C. Ford, age 39, of Mableton, Georgia, pled guilty today in federal court in Columbia, South Carolina, to conspiracy to possess with intent to distribute and to distribute cocaine, in violation of Title 21, United States Code, Sections 841 and 846. Chief United States District Court Judge Terry L. Wooten presided over the guilty plea hearing and will sentence Ford after the United States Probation Office prepares a presentence report.
Evidence gathered as part of months-long investigation into drug trafficking in and around Sumter, established that Ford brought more than forty kilograms of cocaine into South Carolina from September of 2014 through June of 2015. The investigation concluded when, on June 16, 2015, Ford brought 5 kilograms of cocaine to supply his codefendant Harold McFadden in exchange for cash. After Ford and McFadden met outside of Augusta, Georgia, Troopers with the South Carolina Highway Patrol, working in conjunction with the FBI and Sumter Police Department, conducted a traffic stop of McFadden near Aiken, South Carolina. Troopers found the 5 kilograms of powder cocaine hidden in a secret compartment in the dashboard of a Chrysler van, which Ford had previously provided to McFadden. After Ford returned to his home in Mableton, Georgia, FBI Atlanta executed a search warrant at his home and found over $300,000 in cash, cocaine, and various drug and money laundering paraphernalia.
The case was investigated by the FBI and Sumter Police Department. Assistant United States Attorneys JD Rowell and Jay Richardson prosecuted the case.
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Arizona U.S. Attorney’s Office Collects over $9.3 Million in Civil and Criminal Actions in Fiscal Year 2015Read the Press Release
PHOENIX - U.S. Attorney John S. Leonardo announced today that the U.S. Attorney’s Office for the District of Arizona collected $9,334,911 in fiscal year 2015. These recoveries were split nearly equally between criminal actions ($4,603,192) and civil actions ($4,731,718). Additionally, the District of Arizona worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $2,200,808 in jointly-pursued cases and collected an additional $7,856,523 in asset forfeiture actions.
“We are very pleased to have collected millions of dollars on behalf of crime victims and taxpayers in the past year. We and our law enforcement partners take seriously our responsibility to enforce such obligations,” stated U.S. Attorney John S. Leonardo.
"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 addition, 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 U.S. Attorneys’ Offices, along with the Department of Justice’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. Restitution is paid to the victim while 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 corporations for violations of federal health, safety, civil rights, and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the. Department of Housing and Urban Development, the Department of Health and Human Services, the Internal Revenue Service, the Small Business Administration, and the Department of Education.
RELEASE NUMBER: 2015-118_FY15Collections
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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Arizona Man Sentenced to Federal Prison for Methamphetamine Trafficking Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Jose Marcos Armendariz, 31, of Phoenix, Ariz., was sentenced today in federal court in Albuquerque, N.M., to 48 months in prison followed by three years of supervised release for his methamphetamine trafficking conviction.
Armendariz was arrested in May 2015, on a criminal complaint charging him with possession of methamphetamine with intent to distribute after DEA agents found approximately .60 kilograms of methamphetamine concealed inside Armendariz’s baggage during an interdiction investigation at the Greyhound Bus Station in Albuquerque on May 1, 2015. Armendariz was indicted on the same charge on May 12, 2015.
On Aug. 19, 2015, Armendariz pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. Armendariz admitted that on May 1, 2015, he was transporting a large amount of methamphetamine in his backpack when he was stopped by DEA agents at the Greyhound Bus Station in Albuquerque.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Samuel A. Hurtado prosecuted the case.