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30 November 2015
City Hall Officials in Allentown and Reading Plead Guilty in Public Corruption CaseRead the Press Release
PHILADELPHIA – Dale Wiles, 48, of Allentown, PA and Eron Lloyd, 35, of Reading, PA, both pleaded guilty today to conspiracy charges, announced United States Attorney Zane David Memeger. At the time of their respective offenses and until earlier this month, Wiles and Lloyd were public officials in Allentown and Reading, respectively.
During his guilty plea hearing, defendant Dale Wiles admitted the following:
Wiles was an attorney and an Assistant City Solicitor for the City of Allentown whose duties included the coordinating of certain Allentown municipal projects to attorneys in the private sector. One of these projects was the City of Allentown’s 2014 contract for the collection of delinquent real estate taxes and municipal claims (“the revenue collection”). Wiles was tasked with recommending a law firm to the City of Allentown’s Purchasing Agent. Wiles then formed a committee, comprised of himself and two other officials (“the revenue committee”).
In response to a request for proposals (RFP) created by the revenue committee, several competitors submitted proposals for the revenue collection contract, including entities identified here as Law Firm #1, Law Firm #2, and a partnership between a revenue collection company and Law Firm #3 (“the Partnership”). Wiles and the other revenue committee members graded each of these proposals using pre-established criteria which were consistent with the representations in the RFP and memorialized these scores on preprinted government forms (“the score sheets”). The original three score sheets reflected that the committee members had given the highest aggregate scores to Law Firm #2 and Law Firm #1, and that none of the committee members had concluded that the Partnership’s proposal would be the most advantageous to the City. The committee members discussed the proposal and agreed that Law Firm #2’s proposal would be the most advantageous to the City.
Before the committee could recommend Law Firm #2’s proposal to the Purchasing Agent, however, another Allentown official, identified here as Public Official #4, intervened in order to steer the contract to the Partnership so that the Partnership and its affiliates would then provide money, including campaign contributions, to Public Official #3 and his campaign operatives. Public Official #3 was an elected official in Allentown who had authority over Public Official #4 and Wiles. Wiles learned from Public Official #4 that the contracting process was being corruptly manipulated in order to steer the 2014 revenue collection contract to the Partnership. Wiles understood that Public Official #4 was acting with the approval of, and for the benefit of, Public Official #3, and that Wiles was expected to help create the false impression that the Partnership had won the contract on the merits. Thus, rather than quit or risk termination, Wiles joined and assisted the conspiracy, taking certain overt acts to help achieve its objectives.
For example, to help Public Official #4 create the false impression that the Partnership’s proposal was advancing on the merits, Wiles created a new version of the score sheet on which he had documented his actual evaluation of the proposals submitted in response to the RFP. The false score sheet contained, among other things, artificially inflated scores for the Partnership which did not reflect Wiles’ actual evaluation but were created to help the corrupted award process withstand future scrutiny. And like other members of the conspiracy, Wiles engaged in repeated acts of obstruction of justice in order to help conceal the conspiracy. In 2014, and then again in 2015, Wiles concealed certain score sheets and other records from a federal grand jury after learning that these documents would be responsive to federal grand jury subpoenas. Wiles also lied to FBI agents in order to conceal material facts about the award of the revenue collection contract to the Partnership, including the steps that he and Public Official #4 took to ensure that the Partnership was awarded the 2014 revenue collection contract.
During his guilty plea hearing, defendant Eron Lloyd admitted the following:
Public Official #1 was a Reading public official who had the power to sign into law ordinances that had been passed by City Council. Public Official #1 was also a candidate in the Democratic Party’s primary election, scheduled for May 19, 2015. Lloyd reported to Public Official #1, as both a public official and as a member of Public Official #1’s campaign team.
On numerous occasions, Public Official #1 solicited, demanded, and received campaign contributions from parties who sought to receive or had previously received, favorable official action, including the awarding of contracts, from the City of Reading (“the vendors”). Public Official #1, directly and through Lloyd and others, communicated to certain vendors that they were expected to provide him with campaign contributions in return for past or prospective official action by the City of Reading. Public Official #1 caused and attempted to cause certain municipal staff, including Lloyd, to take official action favorable to certain vendors who had provided, or were expected to provide, campaign contributions benefiting Public Official #1.
To limit the influence of money on candidates seeking public office, Section 1012 of Reading’s Code of Ethics established limits on campaign contributions to, and certain reporting requirements for, certain political candidates. To limit the influence of money on public officials in Reading, Section 1006(H) of the Code of Ethics prohibits the awarding of “no-bid contracts” to donors who have given campaign contributions in excess of those limits. Prior to the 2015 Democratic primary, Public Official #1 believed that he had received contributions which were prohibited by the Code of Ethics, and that his best chance of winning re-election would require keeping these contributions and raising additional funds which would also be prohibited by the Code of Ethics. Public Official #1 decided to engineer a repeal of the relevant sections of the Code by bribing the President of City Council, Francisco Acosta, in violation of federal criminal law. Lloyd assisted Public Official #1 with this scheme and helped devise and implement it.
Public Official #1 and Lloyd decided to offer Acosta an $1,800 “loan” to the campaign committee of Acosta’s ally ( “Public Official #2”), which would be “forgiven” upon Acosta successfully orchestrating a repeal of Sections 1012 and 1006(H). Acosta accepted the payment on April 10, 2015 and then, three days later, introduced legislation to eliminate certain restrictions in the Code of Ethics in accordance with Public Official #1’s wishes (“the repeal bill”). As agreed to by Public Official #1, Acosta, and Lloyd, the repeal bill would have repealed Section 1012 in its entirety, thereby eliminating the restrictions on campaign contributions and nullifying Section 1006(H)’s prohibition on awarding “no-bid contracts” to certain donors.
To conceal his participation in the scheme, Public Official #1 sought to finance any campaign contributions to Public Official #2 with funding from third parties. Public Official #1 also sought to offer Acosta additional funding for the campaign committee of Public Official #2 as a reward for Acosta successfully orchestrating the passage of the repeal bill, although only a single payment – an $1,800 check payable to the campaign of Public Official #2 (“the bribe check”) – was ever provided to Acosta. When Acosta took possession of the bribe check, he agreed that, in order to avoid scrutiny of his agreement with Public Official #1 and Lloyd, neither Acosta nor Public Official #2 would deposit the bribe check until a later date. Acosta then attempted to persuade other members of City Council to pass the repeal bill before the primary election by falsely asserting that he was motivated solely by the best financial interests of Reading and by concealing that he had received the bribe check.
After the FBI confronted Acosta, Acosta withdrew from the conspiracy and absented himself from the vote on the repeal bill. The repeal bill was unanimously defeated and Public Official #1 was defeated in the Democratic primary election. After the election, Public Official #1 believed that his best chance of retiring his campaign debt was to obtain additional campaign contributions from parties who sought favorable official action, including the awarding of contracts, from the City of Reading before the expiration of Public Official #1’s term in office. Public Official #1 and Lloyd conspired to retire Public Official #1’s campaign debt by causing city contracts, collectively worth millions of dollars, to be awarded to vendors who would be willing to provide Public Official #1 with sufficiently large campaign contributions, all in violation of federal criminal law. Lloyd took numerous steps to help Public Official #1 accomplish this goal.
After accepting the guilty pleas, United States District Judge Juan R. Sanchez scheduled a sentencing hearing on March 2, 2016 for Wiles, and on March 3, 2016 for Lloyd. Wiles faces a maximum possible sentence of 20 years in prison, a fine, three years of supervised release, and a $100 special assessment. Lloyd faces a maximum possible sentence of five years in prison, a fine, three years of supervised release, and a $100 special assessment. For his role in conspiring with Public Official #1 to repeal the Code of Ethics, Acosta pleaded guilty on August 5, 2015 and is awaiting sentencing.
These cases are being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police. They are being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter.
Chicago Man Charged with Posting Online Threat of Gun Violence at University of ChicagoRead the Press Release
CHICAGO — A Chicago man was arrested today for allegedly threatening to murder students and staff at the University of Chicago.
JABARI R. DEAN, 21, of Chicago, is charged with transmitting a threat in interstate commerce. He is scheduled to make an initial appearance today at 3:00 p.m. before U.S. Magistrate Judge Susan E. Cox.
Dean was arrested without incident this morning. In a Thanksgiving weekend posting on a social media website, Dean stated that he would execute approximately sixteen students or staff members on the campus quad of the University of Chicago on Nov. 30, 2015, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. Dean also stated in the posting that he would die “killing any number of white policemen that I can in the process,” according to the complaint.
Federal authorities identified Dean and confronted him prior to the 10:00 a.m. deadline referenced in the threat.
The arrest and charge were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Chicago Police Superintendent Garry F. McCarthy; and the University of Chicago Police Department.
The charge carries a maximum sentence of five years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorneys Tobara S. Richardson and Bethany Biesenthal.
Cedar Rapids Man Pleads Guilty to Being Unlawful Drug User in Possession of FirearmsRead the Press Release
A man who was found in possession of two firearms during a traffic stop pled guilty today in federal court in Cedar Rapids.
Tyshawn Bush, age 20, from Cedar Rapids, Iowa, was convicted of one count of being an unlawful user of marijuana in possession of firearms.
In a plea agreement, Bush admitted that, on June 27, 2015, he purchased a Savage Arms, 12 gauge shotgun in Cedar Rapids, Iowa. In purchasing the firearm, Bush falsely denied using illegal controlled substances. In truth, at the time Bush purchased the shotgun, he was a regular unlawful user of marijuana. On July 16, 2015, Cedar Rapids police officers made a vehicle traffic stop on the southwest side of Cedar Rapids. Bush was a passenger in the vehicle. On the floor of the back seat, where Bush was sitting, officers found a loaded Lorcin .25 caliber pistol, with an obliterated serial number. In the trunk, officers found a Westernfield 16 gauge shotgun which Bush admitted was his.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Bush remains in custody of the United States Marshal. Bush faces a possible maximum sentence of ten years’ imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Cedar Rapids Police Department and the Federal Bureau of Investigation as part of the Safe Streets Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-0086-LRR.
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Carthage Man Sentenced for Selling MarijuanaRead the Press Release
TYLER, Texas – A 43 year old Carthage, Texas man has been sentenced to federal prison for conspiring to distribute over 50 kilograms of marijuana that was stolen from the Tenaha City Marshal’s Office in 2010 announced U.S. Attorney John M. Bales todayU.S. Attorney John M. Bales today.
Roderrete Dewrayne McClure (McClure) pleaded guilty on March 6, 2015, to Conspiracy to Distribute Marijuana and was sentenced to 56 months in federal prison today by U.S. District Judge Michael H. Schneider. According to information presented in court, sometime before August 22, 2010, McClure and a confederate removed over fifty (50) kilograms of marijuana from the Tenaha City Marshal’s Office evidence room. Fire starter logs were substituted to cover the taking of the marijuana. On August 17 and 19, 2010, McClure took digital images of the stolen marijuana and transmitted them to person identified only as (T.F.) in order to facilitate the sale of the drugs in the Dallas area. In July 2010, McClure provided some of the stolen marijuana to another person, identified as K.M., to sell in the area of Shreveport, Louisiana. McClure admitted that he received payments in exchange for the marijuana.
This case was investigated by the F.B.I. Tyler Office and the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives, Tyler Office and prosecuted by Assistant U.S. Attorney Jim Noble.
Carbondale Man Charged with Receiving Child PornographyRead the Press Release
SCRANTON-The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Criminal Information was filed on November 25, 2015 charging a 25-year-old Carbondale man with receiving child pornography.
According to United States Attorney Peter Smith, the Information alleges that Edward Jeter used a computer to download images of child pornography during November 2014 through August 2015.
The charge stems from an investigation by agents of the Federal Bureau of Investigation.
If convicted, Jeter faces a mandatory minimum sentence of five years in prison and a potential maximum sentence of 20 years in prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative
launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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California Man Sentenced for Operating $1.6 Million Internet FraudRead the Press Release
KANSAS CITY, KAN. – A California man was sentenced in federal court in Kansas Monday to a year and a day in prison for operating an Internet fraud scheme that cost more than 200 victims a total of more than $1.6 million, U.S. Attorney Barry Grissom said. The defendant was ordered to pay more than $1.6 million in restitution to the victims.
Anthony Renfrow, 57, Folsom, Calif., pleaded guilty to one count of conspiracy to commit wire fraud. In his plea, he admitted he made fraudulent claims to entice people to pay to become “autosurf investors” with 14DailyPlus.com. The business was promoted to buyers in the Kansas City metro area.
Investors paid a membership fee and were promised a 14 percent daily return on their money for clicking on advertisers’ Web sites for a certain period of time each day. To achieve that rate of return, 14DailyPlus.com purportedly pooled the capital investments of members and purchased advertising units on the Internet with Fortune-500 type companies.
Renfrow held regularly scheduled conference calls with investors via telephone and Internet to lull them into believing the program was legitimate and returns on investments were being paid as promised. In truth, there was no investment vehicle and the promise of a 14 percent daily return was completely unrealistic.
Grissom commended the Internal Revenue Service – Criminal Investigation, the U.S. Postal Inspection Service, the Johnson County District Attorney’s Office, the California Attorney General’s Office and Assistant U.S. Attorney Scott Rask for their work on the case.
California Firearms Trafficker Sentenced to 8½ Years in PrisonRead the Press Release
LAS VEGAS, Nev. – A northern California man who lied on federal gun forms to unlawfully purchase approximately 90 firearms in Nevada, was sentenced today to 8½ years in federal prison and three years of supervised release, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Special Agent in Charge Jill A. Snyder of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) San Francisco Field Division.
Edward Jameson Purry, II, 30, of Oakland, Calif., was sentenced by U.S. District Judge Jennifer A. Dorsey. Purry was convicted by a federal jury in Las Vegas in March 2015 of four counts of illegal acquisition of a firearm.
“This case is of significance because the firearms Purry purchased ended up in the hands of criminals,” said U.S. Attorney Bogden. “The defendant’s conduct was incredibly reckless and irresponsible and has placed the community in danger for years to come.”
“Today’s sentencing represents an example of ATF using its multitude of resources to investigate firearms trafficking,” said Special Agent in Charge Snyder. “Purry purchased about 90 guns, which he sold for a profit of about $100,000. Seventeen of those firearms have been recovered by local law enforcement and were directly related to criminal activity. ATF will continue to pursue firearms trafficking investigations, as they are the primary source and supply of arming violent criminals in our communities.”
According to the court records and evidence submitted at trial, between about June 2013 and September 2013, Purry made false statements on ATF forms to purchase approximately 90 handguns from licensed gun dealers in Las Vegas and Reno. Purry represented on the forms that he was a resident of Nevada when in fact he was a resident of California. Purry sold the majority of the firearms for double their price on the streets of Oakland, including to an individual who he believed was transporting the firearms to Mexico.
This case was investigated by ATF and the United States Postal Inspection Service, and prosecuted by Assistant U.S. Attorney Phillip N. Smith, Jr.
Bronx Man Indicted for Sexual Exploitation, Enticement, and Child Pornography CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriquez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the indictment of DAVID KEITH, a/k/a “David Wright,” a/k/a “David Lee Keith,” for four counts stemming from his sexual exploitation and enticement of minors and his receipt of child pornography.
Manhattan U.S. Attorney Preet Bharara said: “David Keith is charged with preying on some of the most vulnerable members of our community in the way parents fear most. He allegedly approached young girls under the guise of working in modeling, and then coerced and tricked the victims into engaging in sexually explicit conduct with him, capturing it on video. Together with our partners at the FBI, we are committed to protecting children from those who seek to sexually exploit them.”
FBI Assistant Director-in-Charge Diego Rodriquez said: “As alleged, David Keith targeted young girls as they walked in public. He preyed on their vulnerabilities, giving them praise and attention. With twisted tongue, he allegedly told them he could make them models, tricking them into sexually explicit conduct with him, captured on video. He then allegedly threatened them if they revealed the truth. The FBI continues to work on this, and other similar cases, to stop predatory activity that steals the innocence of childhood and threatens our community.”
According to the Indictment[1]:
On October 13, 2013, KEITH, who lives in the vicinity of the University Heights, Morris Heights, Mount Hope, and Mount Eden neighborhoods in the Bronx, New York, approached three girls, approximately 12 to 14 years old, on the street, presented himself as part of the modeling industry, and encouraged the girls to model for him. KEITH induced one of the girls to enter his vehicle, a gray Yukon Denali, where he video recorded, among other things, himself engaging in forcible sexual conduct with her. KEITH threatened the victim not to tell anyone and told her that he had been watching her.
On or about October 12, 2013, KEITH, also in his gray Yukon Denali, video recorded the exposed genitals of a second victim, approximately 8 to 9 years of age.
In addition, KEITH’s computer contained images and videos of child pornography downloaded from the Internet.
KEITH is scheduled to be arraigned before Judge Alison J. Nathan, on December 4, 2015, at 2:00 p.m.
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KEITH, 38, of the Bronx, New York, was arrested on November 17, 2015, in the Bronx, New York, and has been in Federal custody since. KEITH is charged with two counts of sexual exploitation of a child, each of which carries a maximum sentence of 50 years in prison; one count of receipt of child pornography, which carries a maximum sentence of 40 years in prison; and one count of possession of child pornography, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Any individuals who believe they have information concerning DAVID KEITH that may be relevant to the investigation should contact the Federal Bureau of Investigation at 1-212-384-1000 or https://tips.fbi.gov/.
Mr. Bharara praised the efforts of the FBI in this investigation. He added that the investigation is continuing.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Matthew Podolsky is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment forth herein constitute only allegations, and every fact described should be treated as an allegation.
Braymer Man Pleads Guilty to $300,000 Cattle FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Braymer, Mo., man pleaded guilty in federal court today to a cattle fraud scheme that the government contends resulted in losses of nearly $300,000 to his victims.
Garland Joseph “Joey” Nelson, 21, of Braymer, waived his right to a grand jury and pleaded guilty before U.S. District Judge Howard F. Sachs to a federal information that charges him with fraud using property mortgaged or pledged to farm credit agencies.
According to the government, Nelson engaged in a three-part fraud scheme that caused a combined loss of at least $293,772.
Loan Fraud: $138,452
By pleading guilty today, Nelson admitted that he engaged in a scheme to sell at least 114 mortgaged head of cattle that were pledged to the Farm Service Agency (FSA), without notifying FSA of the sales, from April 1, 2013, through June 2014. He did not instruct purchasers to address proceeds checks to the FSA as well as to him, and he did not remit the bulk of the sale proceeds to FSA, as was required by the terms of his loans. Instead, Nelson admitted that he kept the funds for his personal use.
Nelson received two livestock operating loans in April 2013 totaling $158,000 for the limited purpose of buying and raising cattle. In violation of the express terms of his loans, and with fraudulent intent, Nelson conducted livestock sales from April 2013 to July 2014 under the name “Joey Nelson” to avoid detection. He conducted other sales in the name of a friend to further obfuscate his involvement. His friend then transferred the proceeds to Nelson.
Nelson ceased making repayments on his FSA loans as of Jan. 12, 2015. His outstanding principal balance is $138,452, plus applicable interest and penalties. Nelson filed for Chapter 7 bankruptcy on June 25, 2015.
Livestock Sales: $124,000
According to the government, Nelson also schemed to remove identification from cattle that was owned by others but placed in his care to graze. The government contends that Nelson removed identification tags from 646 head of cattle that belongs to others, and commingled these cattle with his own and with those owned by his neighbor and landlord, in order to sell livestock undetected. The government will present evidence at Nelson’s sentencing hearing that he sold those cattle for his own benefit, for a total loss to three victims of $124,000.
Insurance Fraud: $31,320
According to the government, Nelson also made false statements to Farm Bureau Insurance for the purpose of collecting insurance proceeds on cattle he had insured. Nelson did not disclose to Farm Bureau Insurance that the FSA had first lien on all of his chattel. From Dec. 15, 2013 through March 30, 2014, according to the government, Nelson made fraudulent statements to Farm Bureau Insurance by falsely indicating his livestock had drowned or been stolen. In fact, he had not lost the livestock in the manners claimed, and he was selling numerous cows and calves to various auction houses. Nelson filed four loss claims to Farm Bureau Insurance, resulting in a loss of $31,320.
Under federal statutes, Nelson is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $1,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Department of Agriculture, Office of Inspector General.
Boyd County Couple Sentenced to Prison for Defrauding Social Security Administration of Benefit PaymentsRead the Press Release
ASHLAND — An Ashland, Ky., couple, previously convicted of devising a scheme to defraud the Social Security Administration (SSA) and the Kentucky Medicaid Program, out of hundreds of thousands of dollars in benefit payments, has been sentenced to federal prison.
U.S. District Court Judge David L. Bunning sentenced Diana Lynn Ball, 59, to 36 months in federal prison for Supplemental Security Income (SSI) fraud, Medicaid fraud, theft of government property and making a false statement. Her husband, Lawrence Ball, 59, received 24 months for making a false statement. Judge Bunning has also ordered the couple to pay restitution, equal to the amount of the improper benefits received.
Both defendants were tried and convicted in July. Evidence at the trial established that, from 1996 until December of 2013, Diana Ball intentionally concealed her true living arrangement from the SSA, in order to fraudulently collect SSI and Medicaid benefits.
According to testimony, Ball repeatedly told the SSA she had separated from her husband and was not sharing living expenses. In reality, Ball had been living with her husband and was receiving financial support from him. Had the SSA been aware of the true living arrangement, Ball would not have been eligible to receive the benefit payments.
SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Kentuckians who are eligible for SSI also qualify for benefits under the Kentucky Medicaid Program.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Guy P. Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General, jointly made the announcement today.
The investigation was conducted by the SSA, Office of Inspector General. Assistant U.S. Attorney Laura K. Voorhees prosecuted this case on behalf of the federal government.
Bastrop resident sentenced to 27 months in prison for sex offender registration violationRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a Bastrop resident was sentenced to 27 months in prison for not updating his sex offender registration.
Solomon Lewis Devoil, 50, of Bastrop, La., was sentenced by U.S. District Judge Robert G. James on one count of failure to register as a sex offender. He was also sentenced to five years of supervised release. According to evidence presented at the August 10, 2015, guilty plea, Devoil knowingly failed to register as a sex offender in Louisiana and traveled in and out of the Western District of Louisiana without registering as a sex offender in the State of Louisiana.
In December 1997, Devoil pleaded guilty in San Bernadino Superior Court in California to lewd act upon a child. The victim was 14, and Devoil was 32. He is required to register as a sex offender for life in the State of California as well as Louisiana. Bastrop Police arrested him for failure to appear in court in January 2014 and in February of 2014 for simple burglary. On May 12 and 14, 2015, Devoil failed to appear in court for hearings related to the simple burglary charge, and a warrant for his arrest was issued. Devoil was arrested on June 15, 2015 on a federal arrest warrant at an elementary school in Oklahoma where he was working and transported back to Louisiana to face charges.
The U.S. Marshals Service conducted the investigation. Assistant U.S. Attorney Michael O’Mara prosecuted the case.
Allegany County Man Sentenced to 30 Years in Prison for Production and Possession of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles sentenced Richard Alan Blank, Jr., age 44, of LaVale, Maryland, today to 30 years in prison, followed by lifetime supervised release, for two counts of sexually abusing a minor to produce child pornography, and for possession of child pornography. A federal jury convicted Blank on July 2, 2015.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and by Allegany County State’s Attorney Michael O. Twigg, Colonel William M. Pallozzi, Superintendent of the Maryland State Police, Allegany County Sheriff Craig Robertson, Cumberland Police Chief Charles H. Hinnant, Frostburg Police Chief Royce C. Douty, Frostburg University Chief of Police Cindy R. Smith, as part of the Allegany County Combined Criminal Investigations Task Force (C3I).
According to evidence presented at Blank’s four-day trial, on May 30, 2014, Blank used a minor to engage in sexually explicit conduct in order to produce images documenting the sexual abuse of the minor. A search conducted by law enforcement on June 2, 2014 revealed that Blank possessed images documenting the sexual abuse of the minor female on his cellular phone.
As a result of his conviction, Blank will be required to register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Blank has been detained since his arrest.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and the Allegany County Combined Criminal Investigations Task Force (C3I), comprised of the Maryland State Police, Cumberland Police Department, Allegany County Sheriff’s Office, Frostburg Police Department, Frostburg University Police Department and Allegany County State’s Attorney’s Office, for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys Judson T. Mihok and Aaron S. J. Zelinsky, who prosecuted the case.
***media Advisory***Read the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin will launch public service announcements (PSAs) to highlight additional resources in the fight against drug addiction in West Virginia. Goodwin will also introduce a new smartphone app to assist in quickly connecting individuals with local services focused on substance abuse treatment.
The launch of these PSAs and the smartphone app will take place at a press conference in the U.S. Marshal’s Office, located in the Robert C. Byrd United States Courthouse in Charleston, on Tuesday, December 1, 2015, at 12:30 p.m.
WHO:
- United States Attorney Booth Goodwin
WHAT:
- Press conference to launch PSAs and introduce a new smartphone app in the fight against drug addiction
WHERE:
- Robert C. Byrd United States Courthouse
- U.S. Marshal’s Office – Suite 3600
- 300 Virginia Street, East
- Charleston, WV 25301
WHEN:
- Tuesday, December 1, 2015, at 12:30 p.m.
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28 November 2015
Statement by Colorado U.S. Attorney John Walsh Regarding Colorado Springs Mass ShootingRead the Press Release
DENVER – Colorado U.S. Attorney John Walsh issued the following statement today regarding the mass shooting in Colorado Springs:
"Our thoughts today are with the victims of this terrible crime, their families, and also with the City of Colorado Springs, the University of Colorado at Colorado Springs Police Department and Planned Parenthood, all of whom were victims of this senseless violence. Selfless acts of great courage and determination by law enforcement officers prevented far greater bloodshed. One of those officers gave his life, and others were wounded as they fought to confront the threat and protect others. They deserve our undying gratitude.
"The United States Attorney's Office and federal law enforcement have been working throughout in close support of Colorado Springs, El Paso County, and State of Colorado law enforcement, as well as Fourth Judicial District Attorney Dan May. We also have been in close contact with both the National Security Division and Civil Rights Division of the Department of Justice. The federal investigation is ongoing and focused."
John Walsh, United States Attorney, District of Colorado
Attorney General Loretta E. Lynch Statement on Yesterday's Attack in ColoradoRead the Press Release
Attorney General Loretta E. Lynch released the following statement on yesterday’s attack in Colorado Springs, Colorado:
“This unconscionable attack was not only a crime against the Colorado Springs community, but a crime against women receiving healthcare services at Planned Parenthood, law enforcement seeking to protect and serve, and other innocent people. It was also an assault on the rule of law, and an attack on all Americans' right to safety and security. Justice Department attorneys, the FBI, and the ATF are on the scene to offer assistance and review the situation.
“We stand ready to offer any and all assistance to the District Attorney and state and local law enforcement as they move forward with their investigation. And in the days ahead, our thoughts and prayers will be with the victims of this horrific attack – including Officer Garrett Swasey, who gave his life in order to keep others safe. We wish a speedy recovery for those who were injured, and peace and strength for the loved ones of the fallen.”
27 November 2015
Tioga County Man Sentenced to Prison for Environmental CrimeRead the Press Release
SYRACUSE, NEW YORK – Brian Davis 46, of Owego, New York, was sentenced to serve one year and one day in federal prison after pleading guilty earlier this year to one felony count of treating, storing, and disposing of hazardous waste without a permit, in violation of the Resource Conservation and Recovery Act, announced United States Attorney Richard S. Hartunian, Vernesa D. Jones-Allen, Special Agent in Charge, New York Area Office, Criminal Investigation Division, U.S. Environmental Protection Agency ("EPA CID") and Basil Seggos, Acting Commissioner, New York State Department of Environmental Conservation ("DEC"). In addition to the prison sentence, Davis was sentenced to pay a $5,000 fine and to serve a three-year term of supervised release after release from prison.
In June 2013, Davis, the owner of Large Car LLC, a company in Owego that installs and removes old industrial plating equipment for re-use or recycling, agreed to remove various hazardous chemicals, including arsenic, chromium, lead, and selenium, from a bankrupt waste generator facility in New Hampshire. Davis did not have a permit or environmental license to remove these chemicals, but nevertheless transported them to the Large Car LLC facility in Owego, New York, where he treated, stored, and disposed of them over the course of nearly a year. Davis stored the hazardous waste without labeling, and failed to properly isolate incompatible materials, or protect them from the elements. Davis also treated and disposed of much of this waste by igniting and evaporating it, mixing it with other materials, and shipping it to offsite locations without listing it on manifests, as required.
United States Attorney Richard S. Hartunian said: "The illegal disposal of hazardous chemicals contaminates the environment and endangers public health. The defendant’s disregard of the statutory requirements that protect people and natural resources risked great harm. Prosecution of such conduct is a high priority."
"Industrial waste can pose serious threats to human health and the environment, so it’s imperative that companies dispose of their waste properly in order to protect local communities," said Special Agent in Charge Vernesa Jones-Allen, who oversees EPA’s criminal enforcement program in New York. "Today’s sentence demonstrates that when individuals refuse to comply with the law and put the public at serious risk, they will be held accountable for their actions." DEC Acting Commissioner Basil Seggos stated, "Violations of New York State’s environmental laws and regulations are serious offenses with serious consequences. This sentencing is the result
of the collaborative efforts of local, 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."
This case was investigated by special agents and criminal investigators with EPA CID and DEC, and it was prosecuted by Assistant United States Attorney Michael F. Perry.
Secretary Pleads Guilty to Tax FraudRead the Press Release
PITTSBURGH - A resident of Washington County, Pennsylvania pleaded guilty in federal court to a charge of conspiracy to defraud the Internal Revenue Service, United States Attorney David J. Hickton announced today.
Ann E. Harris, 53, pleaded guilty to one felony count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that during the period from January 2006 through April 15, 2013, Harris knowingly and willfully conspired with another individual to defraud the IRS by impairing the IRS in its assessment and collection of income taxes. As a result of the conspiracy, the tax loss to the IRS was $4,044,946.
Harris was the personal assistant, bookkeeper and secretary to the co-conspirator and performed numerous duties as an employee of the co-conspirator and the co-conspirator’s businesses, including bookkeeping, payroll, accounts receivable and accounts payable. During the period from 2006 through 2013, Harris received wages and bonuses totaling over$1,000,000 and a vehicle for her personal use.
Harris and the co-conspirator used companies owned and controlled by the co-conspirator to fraudulently pay for and unlawfully deduct as business expenses, millions of dollars in personal expenses of the co-conspirator. Harris fraudulently classified personal bills of the co-conspirator as business expenses in the accounting software of the businesses and issued checks drawn on business bank accounts for payment of purely personal expenses of the co-conspirator. Harris entered fabricated account categories for her false entries in the accounting software of the businesses so that they appeared as legitimate business expenses.
The businesses involved in the scheme included Automated Health Systems, Inc.; Automated Health Systems Delaware; Nocito Enterprises, Inc.; Automated Health Services, LLC.; Management Financial Services, Inc.; Golden Triangle Leasing Co., Inc.; Donotti Properties, Inc.; Palace Development Company, Inc.; Northland Properties; and Jonolley Properties. These business entities had offices and addresses in the Western District of Pennsylvania and were effectively controlled or owned by the co-conspirator.
Harris fraudulently classified as business expenses over $27,000,000 in personal expenditures for the co-conspirator’s residential mansion and other personal expenses. The expenditures related to the construction, furnishing and landscaping of the co-conspirator’s multi-million dollar residential mansion, as well as salaries for the co-conspirator’s butler and personal cook. Harris also falsely characterized as business expenses expenditures for the co-conspirator’s exotic automobile collection which included a Mercedes, a Maserati and a Bentley; expenses for the co-conspirator’s country club membership; expenses related to the co-conspirator’s wife’s Jaguar; expenses for private school tuition; and expenses for personal residences for the co-conspirator’s family members.
Judge Hornak scheduled sentencing for April 19, 2016 at 9:30 a.m. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.Pending sentence, the court released Harris on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The United States Internal Revenue Service - Criminal Investigation, conducted the investigation leading to the Information in this case.
Milwaukee Man Sentenced to 18 Years ImprisonmentRead the Press Release
Acting United States Attorney Gregory J. Haanstad announced today that Milwaukee resident Drayon Wren (age: 38), was sentenced to 18 years imprisonment followed by 5 years of supervised release for federal sex trafficking charges involving three minor victims and one adult victim.
On July 16, 2015, Wren plead guilty to three counts of sex trafficking of a child and one count of sex trafficking an adult by use of force, fraud or coercion. Wren recruited the three minors girls and an adult female in Milwaukee and transported them to Elk Grove, Illinois to engage in prostitution.
In his sentencing remarks, the Honorable J.P. Stadtmueller, emphasized the depravity of Wren’s conduct, “on our young people, our most important resource.”The judge further stated that “the public at large deserves protection from this terrible, terrible business” of sex trafficking.
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, 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
This case was investigated by law enforcement officers from the Human Trafficking Task Force, including those from the Wisconsin Department of Justice Division of Criminal Investigation, the Federal Bureau of Investigation, and the Milwaukee Police Department. The case was prosecuted by Assistant United States Attorneys Penelope Coblentz and Joseph R. Wall.
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Lafayette man pleads guilty to felon in possession of a firearm chargeRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Lafayette man pleaded guilty Tuesday to possessing a firearm after having previously been convicted of a felony.
Jarrod Ty Foxworthy, 29, of Lafayette, pleaded guilty before U.S. District Judge Richard T. Haik to one count of possession of a firearm by convicted felon. According to the guilty plea, the Lafayette Parish Sheriff’s Office dispatched a deputy to investigate a complaint on April 2, 2013. Someone matching Foxworthy’s description was seen firing a weapon in the front yard of a home on Nyoka Circle in Lafayette. When Foxworthy arrived to be interviewed by the deputy, he was carrying a black Smith & Wesson M&P .40 caliber semi-automatic handgun and was later taken into custody. The defendant had been previously convicted in March of 2007 in North Carolina state court of common law robbery, for which he was sentenced to 12 to 15 months in prison.
Foxworthy faces up to 10 years in prison, three years supervised release and a $10,000 fine. A sentencing date was not set.
This case is part of Project Safe Neighborhoods, which is a Department of Justice initiative designed to reduce firearm crimes by removing dangerous and persistent felons from the community and promote firearm safety.
The ATF and the Lafayette Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney David C. Joseph is prosecuting the case.
Danville Woman Charged with Misappropriation of Postal FundsRead the Press Release
Harrisburg - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jamie Billman, age 38, of Danville, Pennsylvania, was charged in a one-count Information with Misappropriation of Postal Funds.
According to United States Attorney Peter Smith, between January 2015 and June 19, 2015, Billman, while serving as a postal employee, Billman misappropriated postal funds at the Northumberland, Danville, and Riverside Post Offices, resulting in a loss of $3,500 to the United States Postal Service.
The investigation of this case was conducted by the United States Postal Service. Prosecution is assigned to Assistant United States Attorney John C. Gurganus, Jr.
Billman faces a maximum sentence of 10 years imprisonment and fines totaling $250,000.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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25 November 2015
Worcester Nurse Arrested in Connection with Stealing MorphineRead the Press Release
BOSTON – A charge against a registered nurse was unsealed Monday in U.S. District Court in Worcester in connection with stealing painkiller from the nursing home where she worked, and then attempting to conceal her crime by replacing the medication with saline.
Lea Roberge, 32, of Worcester, was charged with tampering with a consumer product, specifically the Schedule II controlled substance morphine which is used for pain relief. Roberge was charged in a sealed Complaint on Nov. 20, 2015.
The complaint alleges that in March 2015, while working as a Registered Nurse at Holy Trinity Eastern Orthodox Nursing and Rehabilitation Center, Roberge tampered with morphine sulfate contained in emergency narcotic kits. The kits are available for use at the nursing home in case of an emergency when there is not enough time to obtain medication from the pharmacy. Roberge, who had access to these emergency narcotic kits, used a syringe to extract morphine from six vials and one bottle. In an attempt to avoid detection, she replaced the extracted medication with saline, thereby decreasing the potency of the drug.
The maximum sentence under the statute is 10 years in prison to be followed by three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
In an unrelated but similar case, on Tuesday an ambulance paramedic was sentenced to 30 months in prison after she stole Fentanyl by extracting it from vials and replacing it with saline. Teresa Torres was sentenced in Worcester by U.S. District Court Judge Timothy Hillman.
United States Attorney Carmen M. Ortiz; Spencer Morrison, Acting Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Commissioner Monica Bharel, MD, MPH, of the Massachusetts Department of Public Health, Division of Food and Drugs, Drug Control Program, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Warren County, Kentucky, Resident Sentenced to 41 Months in Prison for Scheming with Others to File False Tax Returns in Order to Obtain Fraudulent Tax RefundsRead the Press Release
Ordered to pay $731,293.52 restitution
BOWLING GREEN, Ky. – A resident of Bowling Green, Kentucky, was sentenced this week, by U.S. District Judge Greg N. Stivers, to 41 months in prison and ordered to pay restitution in the amount of $731,293.52 for mail fraud and for entering into an agreement to defraud the Internal Revenue Service (IRS) by obtaining the payment of fraudulent claims, announced United States Attorney John E. Kuhn, Jr.
According to the plea agreement, Fernando Diaz Herrera conspired with others between June 23, 2010, and August 8, 2012 to defraud the IRS and U.S. Department of Treasury, by obtaining false claims. Specifically, Herrera paid Mexican Nationals, who lived outside the United States, for their means of identification, including birth certificates, immunization records and voter cards. The defendant and others then used these documents to obtain Individual Taxpayer Identification Numbers (ITIN). Herrera then used the ITINs to prepare and file fraudulent federal income tax returns – which caused federal income tax refunds to be dispersed.
Herrera admitted to cashing the fraudulent refund checks at financial institutions and businesses in Kentucky. Further, for the purposes of executing the scheme, Herrera admitted to mail fraud when he caused a letter providing a falsely obtained ITIN to be sent from the IRS office in Austin, Texas, to an address in Bowling Green.
Herrera was charged by grand jury indictment, along with co-defendants Maria Chavez Salazar and Julio Ramos, on December 10, 2014.
This case was prosecuted by Assistant United States Attorney Amanda Gregory and was investigated by the United States Secret Service.
United States Announces New Round of Compound Pharmacy Settlements Expected to Result in More Than $30 Million in Fines and RepaymentsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that the United States has settled allegations against several pharmacies and their owners for fraudulently billing TRICARE, the military’s healthcare program. These settlements reflect a wide range of conduct targeting military personnel and the healthcare programs they depend on. The allegations resolved included liability under the False Claims Act. In addition to those detailed below, the United States has also reached settlements with additional individual owners and physicians totaling more than $6 million.
MedMatch Pharmacy, based in Jacksonville, has agreed to pay more than $4.7 million to resolve concerns that it paid kickbacks to marketers, that it filled prescriptions it knew or should have known were not legitimate, and that it sent prescriptions to states in which it did not have a valid license.
Auburndale-based OHM Pharmacy has agreed to pay $4.1 million to resolve allegations that it knew, or should have known, that it was filling prescriptions from a doctor who was writing them outside the ordinary course of practice. The United States contends that OHM knew, or should have known, this because the sheer magnitude and volume of prescriptions exceeded any other provider. In addition, the prescriptions were for the same compounded prescription substance, despite the patient’s age, condition, or health record.
Jacksonville-based WELL Health Pharmacy and its owner have agreed to pay more than $3 million, as well as 50% of its net profits for five years, to resolve concerns that it knowingly filled prescriptions that were written by referral sources that had a financial interest in the prescriptions. While these referring physicians were purportedly participating in a “research study” related to compounded prescriptions, the government contends that this research study was a sham and that the compensation far exceeded fair market value.
Topical Specialists, a pharmacy based in Jacksonville, Florida, has agreed to pay the government more than $2.2 million for its role in submitting prescriptions that were tainted by so-called “research fees,” which was an elaborate guise for paying physicians to write prescriptions. This settlement is directly related, and in addition to, the WELL Health settlement described above.
Durbin Pharmacy, based in Jacksonville, has agreed to pay $2.1 million, plus 50% of its net profits for five years, for submitting prescriptions that were tainted by kickbacks. The government also contends that Durbin knew, or should have known, that the prescriptions it was filling from three local physicians were not legitimate because there was no bona fide patient/physician relationship.North Beaches Pharmacy, also based in Jacksonville, has agreed to pay $10,000, plus 50% of its net profits for five years, for filling compound prescriptions that the government contends were tainted by illegal kickbacks. North Beaches’ top prescriber – a doctor in Fort Wayne, Indiana who wrote more than $600,000 in prescriptions–was paid over $70,000 in speaker’s fees that the government contends were nothing more than kickbacks for prescriptions.
“The United States Attorney’s Office is committed to tackling healthcare fraud and protecting the TRICARE program,” said U.S. Attorney Bentley. “We will use every tool in our arsenal to hold accountable those who seek to profit by taking unfair advantage of military families.”
These settlements involve false claims submitted to the TRICARE program. These cases were developed as part of a broader effort to identify and target unscrupulous compounding pharmacies. The Middle District of Florida has collected more than $40 million in recoveries related to compounded pharmacies since March 2015.
"I applaud the Department of Justice and the U.S. Attorney for the Middle District of Florida's office for holding these pharmacies and physicians accountable for their actions," said Vice Admiral Raquel Bono, director of the Defense Health Agency. "Their egregious actions targeted American service members, veterans and their families, and in many cases offered them products with little or no substantiated evidence that they would improve health outcomes. The Defense Health Agency will continue working closely with the Justice Department and other state and federal agencies to investigate all those who participated in these nefarious, fraudulent practices."
"The Defense Criminal Investigative Service is committed to protecting the integrity of TRICARE, the U.S. military health care program, so that it continues to provide quality medical care to America's Warfighters and their families, while ensuring that health care facilities and providers comply with Federal laws and regulations," said John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service - Southeast Field Office. "Through joint investigations with our law enforcement partners, DCIS will fully pursue both civil remedies to recover taxpayer dollars and criminal prosecutions to bring violators to justice."
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.
These cases were investigated by the Defense Criminal Investigative Service, the Federal Bureau of Investigation, the Department of Health and Human Services - Office of Inspector General, the Office of Personnel Management, and the Department of Veterans Affairs. They were prosecuted by Assistant United States Attorney Jason Mehta.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
U.S. Attorney's Office Settles Americans with Disabilities Act Case with Webster BankRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that the U.S. Attorney’s Office has reached a settlement with Webster Bank to ensure equal access for individuals with disabilities at all Webster Bank locations, pursuant to the Americans with Disabilities Act (“ADA”).
The agreement resolves an ADA complaint filed by an individual who is deaf who alleged that Webster Bank would not do business with him using a video relay service. Since the commencement of the investigation, Webster Bank has worked cooperatively to develop and amend its policies and practices to comply with the ADA and the Department of Justice’s implementing regulations.
“Individuals who have disabilities must not be denied equal access to the services offered by financial institutions,” said U.S. Attorney Daly. “Webster Bank’s cooperation during this investigation reflects the bank’s commitment to equal access and effective communication with all of its customers, including those with disabilities. Our office has also received complaints alleging that other financial institutions have refused to communicate with individuals with disabilities who use relay services to communicate by telephone. As such refusals suggest a discriminatory practice, we have begun a compliance review of banks in Connecticut to ensure that all such banks are complying with their obligations under the ADA.”
The agreement requires Webster Bank to accept video relay calls in all of its branches and to amend its policies, practices and training to ensure the removal of barriers to access at its branches.
Title III of the ADA prohibits discrimination against individuals with disabilities by businesses that serve the public. Among other things, the ADA requires financial institutions, accountants, lawyers, doctors and other businesses to provide auxiliary aids and services that are necessary for effective communication. For individuals who are deaf or hard of hearing, auxiliary aids include qualified sign language or oral interpreters, use of relay services, computer-assisted real time transcription, and, for simple communications, the exchange of written notes.
Individuals who believe that they may have been victims of discrimination can file a complaint with the U.S. Attorney’s Office at 203-821-3700. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Additional information about the ADA can be found at www.ada.gov, or by calling the Department’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
This matter was handled by Assistant U.S. Attorney Ndidi N. Moses with the assistance of the Disability Rights Section of the U.S. Department of Justice Civil Rights Division.
Two Cape Coral Men Indicted for Credit Card Fraud and Aggravated Identity TheftRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces the return by a federal grand jury of indictments charging Edrey Santo Rojas (30) and Henry Alberto Fernandez Gomez (29), both of Cape Coral, with credit card fraud and aggravated identity theft. Rojas is also charged with possession of a credit card skimming device. If convicted on all counts, each faces up to 10 years in federal prison for the credit card fraud and a consecutive term of 2 years for each aggravated identity theft charge. Rojas also faces up to 15 years’ imprisonment for possession of the credit card skimming device.
According to the indictment, on or about May 23, 2014, in Lee County, Rojas possessed, with intent to defraud, a credit card skimmer. The indictment also alleges that between December 9, 2014, and August 8, 2015, he used one or more credit card numbers assigned to another person, without permission, to obtain something of value in excess of $1,000. Rojas also used three counterfeit and unauthorized access devices with account numbers belonging to financial institutions and individuals.
According to a separate indictment, between December 30, 2014, and April 13, 2015, Fernandez Gomez used one or more credit card numbers assigned to another person, without permission, to obtain something of value in excess of $1,000. He also used counterfeit and unauthorized access devices with account numbers belonging to financial institutions and individuals, without lawful authority.
An indictment is merely a formal charge that a defendant has violated one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation, the Lee County Sheriff’s Office and the Cape Coral Police Department, with assistance from the United States Secret Service and the State Attorney’s Office, 20th Judicial Circuit. It will be prosecuted by Assistant United States Attorney David G. Lazarus.
Rochester Woman Pleads Guilty to Bank RobberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Tiffany Hogan, a.k.a. Michael Hogan, of Rochester, NY, pleaded guilty to robbing the Chase Bank at 2900 Dewey Avenue in Rochester before U.S. District Judge David G. Larimer. The charge carries a maximum possible penalty of 20 years in prison, a fine of $250,000, or both.Assistant U.S. Charles E. Moynihan, who is handling the case, stated that on May 22, 2015, Hogan entered the Chase Bank just after it opened and passed the bank teller a note demanding money. The note also indicated that nobody would be hurt if the teller complied. The teller provided Hogan with a specific amount of United States currency.
The defendant left the bank and entered a white minivan in which co-defendant Maximilion Broadnax was waiting and the two drove away. Hogan and Broadnax were arrested later that day at 17 Second Street in Rochester by Rochester Police officers who were looking for Broadnax in connection with his involvement in stolen vehicles. While taking Broadnax into custody, officers saw that Broadnax’s pants fell down and a large amount of United States currency fell out.
Charges are pending against Maximilion Broadnax. 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.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, as well as the Town of Greece Police Department, under the direction of Chief Patrick Phelan, and the Rochester Police Department, under the direction of Chief Michael Ciminelli.
Sentencing is scheduled for January 19, 2016, at 10:30 a.m. Judge Larimer.Plainfield scout leader facing child pornography chargesRead the Press Release
Indianapolis--United States Attorney Josh J. Minkler, announced today a former Boy Scout leader has been charged by a criminal complaint with distributing and possession child pornography. Thomas M. Franks, 55, Plainfield, was arrested in his home yesterday and had his initial appearance in federal court this afternoon.
“Our children deserve better from the people we place in positions of trust,” said Minkler. “Those who chose to prey on the youngest of our citizens will be held strictly accountable and face the full wrath of federal prosecution.”
On November 2, 2015, detectives from the Indianapolis Metropolitan Police Department received information from the National Center for Missing and Exploited Children (NCMEC) regarding a pornographic image being uploaded to an email account. The images were traced to a computer at Franks’ Plainfield home.
The government alleges that for nearly four years, Franks has been communicating in chat incest rooms. He would portray himself as the father of six and eight year old daughters. Franks then received sexually explicit images and videos of young children from others in the chat room. The majority of these images were of prepubescent girls engaged in sexually explicit conduct. At the time of the search, over 230 images were recovered from a computer and a thumb drive.
Franks was an assistant scout leader with Plainfield Troop 304 when engaged in the conduct described above. He remains in the custody of the United States Marshal’s Service.
Anyone with information on this case is encouraged to contact IMPD Detective Laura Smith at 317-327-3553 or NCMEC at 800-THE LOST (843-5678).
According to Assistant United States Attorneys Kristina Korobov and Steven D. DeBrota who are prosecuting this case for the government, Franks could face up to 20 years on each count if convicted.
A criminal complaint is only a charge and not evidence of guilt. All defendants are presumed innocent until proven guilty in federal court.
OCDETF-Sponsored National Heroin ConferenceRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), attended the National Heroin Conference held on November 18-19, 2015, in Atlanta, Georgia. The conference was sponsored by the Organized Crime Drug Enforcement Task Force (OCDETF).
OCDETF is a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. The participants of the OCDETF Program include the 94 U.S. Attorneys’ Offices, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the DEA, the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), the U.S. Coast Guard, the U.S. Immigration and Customs Enforcement (ICE), the U.S. Marshals Service, the Criminal and Tax Divisions of the U.S. Department of Justice and numerous State and local agencies.
The OCDETF-Sponsored National Heroin Conference was attended by DEA heads, OCDETF Coordinators and U.S. Attorneys from U.S. Attorney’s Offices. The purpose of the conference was to collaborate to combat the growing epidemic of heroin and opioid abuse in the United States.
ND Man Sentenced for Receipt and Possession of Child PornographyRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on Nov. 24, 2015, Christopher Halligan, 47, Emerado, ND, was sentenced before U. S. District Judge Ralph R Erickson to serve eight years in prison for one count of receipt of materials containing child pornography and three counts of possession of child pornography. Judge Erickson also sentenced Halligan to serve five years of supervised release and pay a $400 special assessment to the Crime Victims Fund. Finally, Halligan was ordered to pay $3000 in restitution to two of the victims depicted in the child pornography.
On Sept. 26, 2014, a ND Bureau of Criminal Investigations Special Agent downloaded child pornography from Halligan’s computer via a peer-to-peer (P2P) network. Law enforcement assigned to the Internet Crimes Against Children Task Force subsequently executed a search warrant on Halligan’s residence in Grand Forks county. A forensic examination of the media eventually revealed more than 28,000 files depicting children engaged in sexually explicit conduct.
This case was investigated by the Department of Homeland security - Homeland Security Investigations and the ND Bureau of Criminal Investigation.
Assistant U. S. Attorney Jennifer Puhl prosecuted the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood, in conjunction with the Internet Crimes Against Children (ICAC) Task Force help federal, state, and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communications systems, and/or computer technology to sexually exploit children. The ICAC program is a national network of 61 coordinated task forces engaging in proactive investigations, forensic investigations, and criminal prosecutions. Project Safe Childhood also helps to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Montgomery Man Sentenced for Selling Firearms on the Dark WebRead the Press Release
Montgomery, Alabama - Michael Albert Focia, 48, of Montgomery, Alabama was sentenced yesterday to 51 months in prison for dealing in firearms without a license and two counts of selling guns to people who were outside the State of Alabama, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama.
The evidence at trial and at his sentencing hearing proved that Focia was selling firearms on the non-publicly accessible portions of the internet, commonly referred to as the “dark web” or “deep web.” During the investigation, law enforcement agents determined that Focia had unlawfully sold and shipped at least 32 firearms to people all over the world—including Australia and Sweden. The agents also learned that, in shipping these firearms, Focia had used various ruses to hide his identity, such as placing false return address labels on packages, using aliases to send packages, falsely declaring the contents of the packages he was sending, and packing the guns so that they appeared to be computer hard drives.
“Modern criminals often think that the secrecy provided by the internet gives them freedom to violate the law,” stated U.S. Attorney Beck. “This case proves them wrong and proves that even the most technologically savvy criminal, such as Focia, will be detected, prosecuted, and forced to spend time in prison when he or she uses modern technology to engage in old fashioned crime.”
This case was investigated by the Alcohol, Tobacco, Firearms and Explosives, the United States Postal Inspection Service, with the help of the Montgomery County Sheriff’s Office, Elmore County Sheriff’s Office, and the United States Marshals Service. The case was prosecuted by Assistant United States Attorney Jonathan S. Ross.
Michigan Man, Tyrone Smith, Pleads Guilty to Sex Trafficking Four Victims, Including One MinorRead the Press Release
GRAND RAPIDS, MICHIGAN – Tyrone Smith, 45, of Lansing, Michigan, pled guilty yesterday in federal court to three counts of sex trafficking girls and women and transporting them across state lines for prostitution. He will be sentenced in April 2016 and faces a mandatory minimum of 15 years in federal prison, up to a maximum of 25 years.
After serving 15 years in the Michigan Department of Corrections for second degree murder, Smith began recruiting women in Lansing for his interstate commercial sex operation. A federal grand jury indicted him in July 2015 on seven counts involving four victims, including one minor. The indictment charged Smith with three counts of sex trafficking by force, threats of force, fraud, and coercion; one count of sex trafficking a minor; and three counts of transporting adult women and the minor from Michigan to Illinois for commercial sex. In a written plea agreement, Smith admitted to recruiting the first victim, an adult woman, in about December 2012, providing her with heroin, posting commercial sex ads of her online in lingerie, and arranging for johns to pay for sex with her in Lansing, Chicago, and elsewhere over a two-year period. Smith admitted to being physically violent and threatening towards her throughout this time, knowing that this would cause her to continue to engage in commercial sex acts. Smith also admitted to recruiting a 17-year-old girl and sex trafficking her from December 2014 to June 2015. He arranged for johns to buy sex from her in his Lansing residence and area motels, and he took her to Chicago for several weeks in early 2015. The minor watched Smith assault another woman for her disloyalty to Smith’s prostitution business, and Smith continued to cause the minor to engage in commercial sex acts after that. In June 2015, while Smith and the minor were in a Lansing motel, Smith grabbed her by the neck and threw her on the bed to stop her from leaving with the cell phone he gave her, which had a large amount of information on it about his prostitution business. The minor sought medical attention afterwards for a concussion, a laceration on the bridge of her nose, and bruising on her face and body. Smith admitted that a short time later, he reconnected with the minor and continued arranging commercial sex dates for her.
The conviction resulted from a joint investigation led by the FBI, Ingham County Sheriff’s Office, and East Lansing Police Department, with assistance from the Michigan State Police (MSP). Assistant United States Attorney Tessa K. Hessmiller prosecuted the case. This is the third federal sex trafficking conviction in the Western District of Michigan, following cases against Eddie Jackson and Christopher Bryant. This is the fourth sex trafficking conviction obtained in the past year as a result of the FBI’s joint investigation with the Ingham County Sheriff’s Office and other Lansing area law enforcement partners, who collaborated in the federal Christopher Bryant trial and the related state convictions of Jonathan Purnell and Mariah Haughton in Ingham County.
In announcing the conviction, U.S. Attorney Patrick Miles stated, “Sex trafficking is real and happens in West Michigan. Traffickers target victims by identifying vulnerabilities to exploit, whether through drugs, money, violence, or a false sense of security and affection provided by the trafficker. My office is working hand-in-hand with federal, state, and local law enforcement to identify and prosecute human trafficking, including the sex trafficking of children.”
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Manhattan U.S. Attorney Files and Simultaneously Settles False Claims Act Lawsuit Against Defense Contractor and Its President for Multi-Year Fraud Involving Sale of Defective Weapons Sights to U.S. Military and Other AgenciesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Craig Rupert, the Northeast Field Office Special Agent of the Department of Defense-Office of Inspector General (“DoD-OIG”), Andrew Traver, the Director of the Naval Criminal Investigative Service (“NCIS”), and Frank Robey, the Major Procurement Fraud Unit Director of the U.S. Army Criminal Investigation Command (“CID”), announced today that the United States filed and simultaneously settled a civil fraud lawsuit under the False Claims Act and common law against L-3 COMMUNICATIONS EOTECH, INC. (“EOTECH”); its parent company, L-3 COMMUNICATIONS CORPORATION (“L-3”); and EOTECH’s president PAUL MANGANO (“MANGANO”) (collectively, “Defendants”). As alleged in the complaint, for years, EOTECH sold defective holographic weapon sights to the U.S. Department of Defense (“DOD”), the U.S. Department of Homeland Security (“DHS”), and the Federal Bureau of Investigation (“FBI”). These sights were designed to allow users to quickly acquire and hit targets, and to return fire in a range of extreme environmental conditions. Defendants knew that the sights failed to perform as represented in cold temperatures and humid environments, but delayed disclosure of these defects for years. In connection with the settlement, approved today by United States District Judge Richard Sullivan EOTECH and L-3 have agreed to pay the United States $25,600,000, and all three defendants have made admissions of conduct alleged in the complaint.
Manhattan U.S. Attorney Preet Bharara said: “The defendants, L-3, EOTech, and EOTech’s senior executive Paul Mangano, engaged in fraudulent double dealing by selling defective products to the men and women who risk their lives to protect our country. With their own sights focused exclusively on corporate profits, the defendants let our soldiers fight with defective sights on their weapons. We will continue to pursue and hold accountable corporations and their executives who put profits over honesty and fair dealing, particularly when it comes to dealings that affect our service men and women.”
DoD-OIG Northeast Field Office Special Agent in Charge Craig Rupert said: “This settlement illustrates the seriousness of the harm to the Defense Department and other federal agencies from defective products. The safety of our warfighters and law enforcement who depend on these products is paramount in the fight against terror and crime. DCIS remains vigilant for and vigorously pursues all similar complaints in our effort to shield America's investment in our national defense.”
NCIS Director Andrew Traver said: “American service members not only deserve the highest quality equipment, American taxpayers deserve the highest integrity suppliers, who do not take millions of dollars and squander public trust. Holographic Weapons Sights are used in combat; a sight that 'almost works' is not acceptable. It is gratifying that NCIS could be part of the joint investigation to hold EOTECH accountable.”
U.S. Army CID Major Procurement Fraud Unit Director Frank Robey said: “We are pleased with today's settlement; however, there is no monetary substitute great enough for the safety and required tactical advantage that the young men and women serving in our armed forces in harm's way deserve. It is imperative that when someone contracts with the U.S. Army, they provide only their very best with no exceptions.”
According to the complaint filed in Manhattan federal court:
EOTECH has earned tens of millions of dollars through its sales of sights to DOD, DHS, and the FBI. In 2004, and again in 2010, EOTECH contracted with DOD to supply holographic weapon sights for use in close quarter urban combat as well as longer range target acquisition. EOTECH represented to DOD that its sights could operate in temperatures ranging from -40 degrees to 140 degrees Fahrenheit, as well as in humid and other extreme environmental conditions. Those representations were important because EOTECH’s combat optical sights were used by operators in Iraq and Afghanistan, as well as by special operations forces around the world.
By early 2006, Defendants knew that their sights failed to perform as represented. At hot and cold temperatures, the sights experienced a condition known as “thermal drift,” meaning that the sight’s point of aim differed from its point of impact. EOTECH’s own internal tests showed that some models experienced drift of 6 to 12 minutes of angle (“MOA”), i.e., 6 to 12 inches per 100 yards. Even though EOTECH’s contracts with DOD required disclosure of any information concerning the reliability of the sights, EOTECH did not disclose this defect to DOD until 2015, after the FBI discovered the problem and presented its findings to EOTECH.
In 2007, Defendants became aware of a separate performance failure in cold temperature, known internally as “cold weather distortion.” At around 32 degrees Fahrenheit, the sight’s aiming dot became distorted, affecting accuracy by 12 MOA, increasing to 20 MOA at 5 degrees Fahrenheit. Defendants did not disclose this defect from DOD for more than a year, until EOTECH had a fix in place. EOTECH then presented the fix as an upgrade to a product that conformed to specifications, and did not disclose that the entire stock of sights that DOD had purchased since 2004 was defective.
By 2008, Defendants also knew that EOTECH’s sights failed in humid environments, a defect known internally as “moisture incursion.” Although EOTECH represented that the sights passed humidity and other testing, Defendants knew that the seals leaked, allowing moisture to enter the sight, resulting in dimming of the circle and aiming dot necessary for acquiring a target. Over the next several years, EOTECH’s internal tests repeatedly confirmed these leaks. Nevertheless, EOTECH did not notify DOD of the problem until 2013, when it once again presented a fix as an upgrade to a product that conformed to specifications.
MANGANO, as president of EOTECH, was ultimately responsible for disclosing quality issues to customers. MANGANO was apprised of each of the defects with the sights and yet did not recommend disclosing any of the defects until he believed either a fix was in place or that DOD would find out about the defect from another source.
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As part of today’s settlement, EOTECH and L-3 admitted that EOTECH knew that its holographic weapon sights experienced thermal drift, cold weather distortion, and moisture incursion. EOTECH and L-3 also admitted that despite EOTECH’s representations to DOD that the sights performed in hot, cold, and humid conditions, and despite EOTECH’s contractual obligation to disclose to DOD any performance-related data affecting the reliability of the sights, EOTECH continued to sell the sights to the Government for more than one year without disclosing cold weather distortion, and for several years without disclosing thermal drift or moisture incursion. MANGANO, who has been the president of EOTECH since 2006, admitted that he knew that the sights experienced cold weather distortion and moisture incursion, but EOTECH continued to sell the sights to the Government for over one year (in the case of cold weather distortion) or several years (in the case of moisture incursion) without a disclosure.
Mr. Bharara praised the DOD’s Defense Criminal Investigative Service, Naval Criminal Investigative Service, and Army Criminal Investigation Command; DHS Homeland Security Investigations; and the FBI for their investigative efforts and ongoing support and assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Jaimie L. Nawaday and Joseph N. Cordaro are in charge of the case.
Manhattan U.S. Attorney Announces Charges Against Wholesale Distributor of Spice and FlakkaRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Carl J. Kotowski, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division (“DEA”), announced today that RICHARD GALIMI, 46, was arrested yesterday and charged in a criminal complaint for his role in distributing bulk quantities of synthetic cannabinoids, commonly known as “Spice,” and synthetic cathinones containing Alpha-PVP, commonly known as “Flakka.” GALIMI arranged for the importation of synthetic controlled substances from China, arranged for them to be processed and packaged, and was responsible for the distribution of packets of Spice for individual use. A search of a Brooklyn warehouse maintained by GALIMI resulted in the seizure of approximately 2,000 packets of pre-packaged Flakka and approximately 2,000 grams of pre-packaged Spice, as well as approximately 25 grams of bulk synthetic chemicals and 200 pounds of leafy substances that are used to manufacture Spice.
GALIMI was arrested in Brooklyn and will be presented in Manhattan federal court today.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Richard Galimi was responsible for the distribution of potentially lethal synthetic cannabinoids and cathinones. Peddlers of these dangerous drugs – marketed as Spice and Flakka – target young people who are lured by the packaging and pricing. But the product is always unsafe and it can be deadly.”
According to the Complaint[1] and publicly available documents:
Beginning in at least 2011, GALIMI made unsolicited phone calls to the owners of smoke shops in order to sell a powerful chemical Spice with the brand name “Hydro” to the smoke shop owners, which was then sold to retail customers. Beginning in early 2015, GALIMI met with individuals cooperating with the DEA (the “CSs”) and began providing Spice and Flakka to the CSs. During the course of the investigation, the DEA purchased approximately $6,500 worth of Spice and Flakka from GALIMI.
In order to manufacture the Spice, GALIMI arranged for leaves in bulk quantities to be brought to a warehouse in Brooklyn. In the warehouse, GALIMI employed at least five individuals who were responsible for packaging the Spice in retail packages. GALIMI also manufactured a synthetic cannabinoid that he marketed as being three times stronger than typical Spice.
In addition, GALIMI used brokers to import capsules of Flakka and packaging materials from China to New York via Hong Kong, using various forms of international mail services. GALIMI was involved in importing approximately 3,000 capsules of Flakka to the United States on a regular basis.
Spice is the street name applied to a synthetic cannabinoid. Spice is popular among teenagers and young adults, and is widely accessible because it is inexpensive and commonly sold at otherwise legitimate retail locations. The colorful logos used on the Spice retail packets and the flavors used, such as lime, strawberry, and blueberry, make Spice attractive to teenagers and young adults. The physical effects of Spice can include agitation, rapid heart rate, confusion, dizziness, nausea and vomiting, paranoia, panic attacks, and acute kidney injury.
Flakka is the street name applied to a synthetic cathinone that is a derivative of the synthetic drug commonly known as “bath salts.” Flakka is intended to mimic the effects of an amphetamine. Flakka can come in a rocky crystalline form and often comes in capsules. Flakka typically contains Alpha-PVP, which is a Schedule I controlled substance. Flakka is frequently sold to consumers in small packets that have colorful logos. A tenth-gram quantity, or one standard dose, of Flakka typically sells for as little as $3.00. The physical effects of Flakka can include aggression, paranoia, and hallucinations.
After the United States Attorney’s Office for the Southern District of New York charged 10 defendants involved in a Spice drug distribution ring in September 2015, Spice-related emergency room visits in New York City for the month of October 2015 were down 36 percent compared to their peak in July 2015, according to the New York City Department of Health and Mental Hygiene.
GALIMI is charged with one count of conspiracy to distribute and possess with intent to distribute a controlled substance, which carries a maximum potential sentence of 20 years in prison. The statutory maximum penalty is prescribed by Congress and is provided her for informational purposes only, as any sentencing of the defendant would be determined by the judge.
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U.S. Attorney Preet Bharara praised the outstanding work of the DEA’s New Jersey Division.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorney Noah Solowiejczyk is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Manchester Man Sentenced to 77 Months on Bank Robbery ChargeRead the Press Release
CONCORD, NEW HAMPSHIRE - Shane Mitchell, 32, of Manchester, New Hampshire, was sentenced in the United States District Court for the District of New Hampshire on one count of bank robbery, announced Acting United States Attorney Donald Feith. The Court imposed a term of 77 months imprisonment, three years of supervised release and full restitution to the victim bank.
Mitchell walked into a TD Bank in Manchester, New Hampshire, on March 7, 2015 and handed the teller a note demanding money. The note, written in pencil on blue-lined paper stated something to the effect of, “Put the cash in the bag and no yelling or screaming. I have a weapon if anyone wants to live.” Mitchell made off with $600 in stolen funds.
That same day, police traced Mitchell to a nearby apartment building where the stolen money and distinctive items of clothing worn during the robbery were found. Police also recovered a pencil and blue-lined notepad consistent with the demand note.
This case was investigated by the Manchester Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Georgiana Konesky.
Leader of Bank Fraud Ring that Stole over $4 Million from Bank of America Corporate Accounts Sentenced to Federal PrisonRead the Press Release
ATLANTA – Alwin Peterson, Jr. and three co-conspirators were sentenced late Tuesday for a bank fraud scheme that targeted over 150 Bank of America accounts and involved over $4 million in fraudulent withdrawals.
“Their criminal actions damaged not only the small businesses they targeted, but also the employees and vendors who depended on timely payments to meet their day-to-day needs,” said U.S. Attorney John Horn. “This case reminds business owners that they need to be vigilant in protecting sensitive personal and bank account information.”
“The U.S. Secret Service and our law enforcement partners work tirelessly to protect consumers and businesses against bank fraud schemes such as this,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “These sentences are a testament to that collaborative effort.”
According to U.S. Attorney Horn, the charges and other information presented in court: From approximately November 2012 through his arrest in August 2014, Peterson led a bank fraud scheme that targeted over 150 corporate accounts at Bank of America. Peterson first collected personal information about the individuals listed on the accounts, many of which belonged to small businesses. Using that information, he then called Bank of America’s customer service and impersonated the true account holders. In those calls, Peterson obtained additional account information, monitored account balances, and learned about the latest transactions on existing accounts. Peterson also changed the online banking passwords for some of the accounts so that he could access the accounts by computer.
After fraudulently acquiring the account information, Peterson employed a group of “runners” to enter bank branches and withdraw money from the accounts. Using fake identifications, the runners posed as the true account holders and wired money from the victims’ accounts to other accounts Peterson opened. Peterson also used counterfeit checks to steal money from the accounts. Co-defendants Vivienne Bloch, Kori Henegar, and Allen Parham were all runners in the scheme. The defendants traveled to numerous bank branches in different states throughout the country in an attempt to evade detection. Peterson is responsible for over $4 million in fraudulent withdrawals from the targeted accounts.
All of the defendants were convicted of bank fraud conspiracy after pleading guilty, and were sentenced by United States District Judge Steve C. Jones as follows:
- Alwin Peterson, Jr., 38, of Fayetteville, Ga., was sentenced to 12 years, 1 month in prison to be followed by 5 years of supervised release, and ordered to pay $1,019,381.40 in restitution.
- Parham, 46, of Atlanta, Ga., was sentenced to 6 years, 6 months in prison to be followed by 5 years of supervised release, and ordered to pay $85,414.11 in restitution.
- Bloch, 54, of Decatur, Ga., was sentenced to 5 years in prison to be followed by 5 years of supervised release, and ordered to pay $538,383.50 in restitution.
- Henegar, 35, of Spring, Texas was sentenced to 2 years, 9 months in prison to be followed by 5 years of supervised release, and ordered to pay $395,583.87 in restitution.
This case was investigated by Special Agents with the United States Secret Service. Bank of America fraud investigators provided valuable assistance throughout the investigation.
Assistant United States Attorneys Stephen H. McClain and Samir Kaushal prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Junction City Man Sentenced to Life in Cocaine Trafficking CaseRead the Press Release
TOPEKA, KAN. – A Junction City man has been sentenced to life in federal prison for trafficking cocaine in Junction City and Manhattan, U.S. Attorney Barry Grissom said today. Another defendant in the case was sentenced to more than 21 years.
Albert Dwayne Banks, 33, Junction, City, Kan. was sentenced to life. He was convicted on count one (conspiracy to distribute more than 280 grams of crack cocaine), count eight (distributing crack cocaine), count 11 (distribution crack cocaine), count 12 (distributing crack cocaine), count 15 (distributing crack cocaine) count 16 (distributing crack cocaine) and count 17 (distributing crack cocaine).
Martye Madabuti Madkins, III, 34, Junction City, Kan., was sentenced to 262 months in prison. He was convicted on count two (distributing crack cocaine), and count four (distributing crack cocaine within 1000 feet of an elementary school).
Banks and Madkins were convicted in June in a jury trial in Kansas City. During trial, prosecutors presented evidence that in late 2012 and early 2013 agents of Kansas Bureau of Investigation and detectives from the Junction City Police Department investigated a large crack cocaine trafficking organization in Junction City and Manhattan. The organization was led by defendants Albert Banks and co-defendant Anthony Thompson, who acquired drugs from three different suppliers and sold the drugs to distributors who resold them on the streets. The evidence showed that Madkins was a close associate of Banks and Thompson and that he distributed crack cocaine for them.
Co-defendant Anthony Thompson is set for sentencing Dec. 4.
Grissom commended the Kansas Bureau of Investigation, the Junction City Police Department, the Geary County Attorney’s Office and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Jamaican Man Sentenced to Prison for Involvement in International Lottery Fraud SchemeRead the Press Release
BISMARCK – U. S. Attorney Christopher C. Myers announced that on Nov. 24, 2015, a Montego Bay, Jamaica man was sentenced to 20 years in federal prison, and ordered to pay $5,672,561.15 in restitution, after having been convicted at trial in North Dakota on charges of conspiracy to commit wire fraud or mail fraud, conspiracy to commit international money laundering, and 35 counts of wire fraud associated with his participation in the Jamaican lottery fraud.
Sanjay Ashani Williams, 26, was the first Jamaican national tried and convicted in the United States for selling lead lists for use in international cyberfraud. Lead lists consist of the names, telephone numbers, and personal information of potential victims and are sold to lottery scammers. Some lead lists are created by list wholesalers who send out bogus mass mailings purporting to be sweepstakes entries. Consumers, thinking the mailings are legitimate, pay to enter the non-existent sweepstakes. The wholesalers in turn pocket the entry fee then sell the consumers’ contact information to scammers for as much as $5.50 per potential victim.
“The victims who - despite their regret or embarrassment - come forward to tell their stories are heroes,” said U.S. Attorney Christopher C. Myers. “Victims are targeted because their age or personal circumstances make them particularly vulnerable; the resulting harm is financial, psychological, and physical. Until recently, these scammers operated with impunity. We are helping to find them and hold them accountable for their crimes.”
Before getting into the lead list business, Williams personally scammed numerous people, sometimes threatening the safety of his victims and their families. Later, Williams transitioned to selling lead lists, which was more lucrative for him. Williams knowingly sold “lead lists” to co-conspirators Lavrick Willocks and approximately 400 other Jamaican lottery fraud scammers, identifying victim targets for the lottery scammers. These scammers, all of whom were Williams’ co-conspirators, then contacted victims by telephone or mail and falsely told the victims they had won a large sweepstakes prize, such as $3.5 million and a new car. Callers repeatedly instructed victims that in order to claim the prize, the victims had to send money, sometimes thousands of dollars, to the scammers to pay non-existent taxes, fees, insurance and the like. Williams and other scammers deliberately targeted victims over the age of 55. After the victims sent the “fees,” the victims were required to send more and more money; however, the victims did not receive the promised prize.
In this case alone, more than 80 victims of Williams’ conspiracy were identified, with reported losses totaling more than $5.5 million. Individual victims of this conspiracy lost as little as $300 and as much as $850,000 to Williams and his co-conspirators. Nationwide, the number of Jamaican Lottery Fraud victims likely is in the millions, with some estimates of annual losses in excess of $1 billion.
In addition to Williams, 25 other defendants from Jamaica and the United States were charged in the same indictment. Eleven of those defendants have been arrested and pleaded guilty in this case. In separate indictments, four additional co-conspirators have been charged. Of those, two have pleaded guilty and the remaining two are awaiting trial. The investigation is on-going.
Victim after victim in this case testified to the financial devastation and fear caused by the scammers, who frequently threatened victims with violence. Sanjay Williams personally threatened to kill one victim’s sons and rape the victim’s daughters after the victim refused to send additional money. Williams told the victim that he knew where the victim lived. Another victim of the conspiracy was so distraught by her involvement in the scheme that she committed suicide after investigators set up a meeting to speak with her about it.
The lottery scam victims in the United States are not the only victims of Sanjay Williams’ crimes. Top Jamaican law enforcement officials emphasize that lottery scamming has directly led to a dramatic increase in violent crime – including murder, shootings, and extortion - in Jamaica, as rival scammers battle one another over lead lists and profits. Testimony at trial indicated that 1,000 murders in Jamaica can be attributed to scamming activity in the last 10 years. Further, scamming activity creates ripple-effects harming legitimate Jamaican businesses, including tourism and discouraging foreign investment.
The investigation is being conducted by the FBI’s North Dakota office and the U.S. Postal Inspection Service (USPIS) in Florida, with assistance from many other federal and state law enforcement agencies, as well as Jamaican law enforcement.
The case was prosecuted by Assistant U.S. Attorneys Clare Hochhalter, Nick Chase, and James Patrick Thomas, and Trial Attorney Lorinda Laryea of the Department of Justice’s Criminal Division.
Indianapolis man sentenced in identity theft schemeRead the Press Release
Indianapolis--United States Attorney Josh J. Minkler, announced today the sentencing of a man for his role in a fraud scheme where he would use stolen Social Security numbers (SSN) to allow individuals with poor credit histories to purchase new vehicles and other high priced items. David Day, 38, Indianapolis, was sentenced to 92 months (7 years and 8 months) by U. S. District Judge Tanya Walton Pratt for conspiracy to commit wire fraud.
“Identity theft costs our economy billions of dollars and destroys the credit history of legitimate consumers,” said Minkler. “Mr. Day will spend the next seven years in federal prison pondering his mistake.”
Day offered credit repair services to individuals who had poor credit scores for between $2,000-$3,500. The repair service would help those who would not normally qualify for loans to make large purchases using credit. Day would obtain misappropriated SSN’s and referred to them as credit profile numbers (CPNs). His source of supply for CPN’s was from Kimberly Taylor, 39, a resident of California.
Day would identify clients in Indiana and obtain stolen SSN’s from Taylor. Taylor would match the true identity of Day’s customer with the stolen number and provide guidance on how connect the stolen number with the customer’s true name and date of birth. Day would also request supporting fraudulent documents such as utility bills and lease agreements to perpetuate the crime for which he paid Taylor.
Kimberly Taylor was sentenced to 40 months in prison in July, 2014.
According to Assistant United States Attorney Cynthia J Ridgeway who prosecuted this case for the government, Day must repay $679,000 in restitution and serve three years of supervised release after his sentence.
Former Rosemead Resident Sentenced to nearly Five Years in Federal Prison for Trafficking in Counterfeit Marlboro CigarettesRead the Press Release
LOS ANGELES – A former resident of the San Gabriel Valley who was a major distributor of counterfeit cigarettes in the Los Angeles area has been sentenced to nearly five years in federal prison for trafficking in counterfeit goods.
Su Qin Yang, who also used the names “Lily” and “Anita Chang,” was sentenced yesterday to 57 months in prison by United States District Judge Margaret M. Morrow.
Yang, 45, who resided in Rosemead prior to fleeing to China in 2012, pleaded guilty in May to one count of trafficking in counterfeit goods and admitted in her plea agreement that she trafficked in almost 4 million counterfeit Marlboro cigarettes and almost 4,000 counterfeit Viagra pills. The counterfeit products were seized during searches of Yang’s residence and storage locations in the summer of 2012.
Yang “sold an extremely large quantity of counterfeit cigarettes to great profit, and showed no signs of slowing down,” prosecutors wrote in a brief that sought the 57-month sentence. “Indeed, the government is advised that after defendant’s arrest, the illegal sale of counterfeit cigarettes in the Los Angeles area decreased dramatically.”
Yang was named in an indictment returned by a federal grand jury in August 2013. Also charged in the 16-count indictment was Yang’s husband, Antonio Limbeek, who remains a fugitive and is believed to be in Indonesia.
“The black market for counterfeit products poses serious dangers to the community,” said United States Attorney Eileen M. Decker. “Counterfeit products endanger public health because they are not manufactured to the same standards as legitimate products. There is a significant possibility of contaminants in counterfeit items, and the black market makes these products more available to minors.”
After authorities executed the search warrants, but prior to the indictment in the case, Yang and her husband fled the United States. Yang returned to the United States in January.
The investigation into Yang and her husband was conducted by the Los Angeles Sheriff’s Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
“In addition to the health risks, trafficking in counterfeit cigarettes, as well as other trademarked goods, is a multi-billion dollar global industry that robs governments of vital revenues and undermines our economy,” said Joseph Macias, special agent in charge of HSI Los Angeles. “Even more disturbing, the huge profits generated by this illicit industry often go to fund other kinds of criminal enterprise.”
The investigation in this case started after Phillip Morris USA brought information related to the trafficking of counterfeit Marlboro cigarettes to federal authorities. When searches were conducted, authorities seized approximately 27,500 cartons of counterfeit cigarettes and approximately $440,000 in cash, “demonstrating the huge profits that defendant was obtaining through this crime,” prosecutors said in court papers.
While engaged in discussions with prosecutors in 2012 about potentially pleading guilty, Yang and Limbeek “fled the country, leaving their minor children behind,” according to the government’s sentencing memo. “Thereafter, [Yang] arranged for her minor children to be transported to Washington state and then flown to China, attempting to smuggle over $300,000 in additional cash with them.”
In addition to the prison term, Judge Morrow ordered Yang to pay $308,894 in restitution to Phillip Morris USA, which holds the trademark for Marlboro cigarettes.
Phillip Morris has designated The National Law Enforcement Officers Memorial Fund to receive all of the restitution.
Former Johnson County Teacher Sentenced to 14 Years for Sexually Exploiting a MinorRead the Press Release
PIKEVILLE, Ky. — A former high school teacher in Johnson County, Ky., who previously admitted to sexually exploiting a minor student, has been sentenced to 14 years in federal prison.
On Tuesday, U.S. District Judge Danny C. Reeves sentenced 26 year-old Robert Cantrell, of Versailles, Ky., for illegally enticing a minor to engage in sexual activity. Judge Reeves further ordered Cantrell to serve 15 years of supervised release, following his sentence. Under federal law, Cantrell must serve at least 85 percent of his prison sentence.
Earlier this year, Cantrell admitted that, in 2014, he had enticed a minor student to text him sexually explicit images of the student engaging in sexually explicit conduct. Additionally, Cantrell admitted that he had induced the minor student to engage in sex acts with him.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation; Jack Conway, Kentucky Attorney General; and Dwayne Price, Johnson County Sheriff, jointly made the announcement.
The investigation was conducted by the FBI, the Kentucky Attorney General’s Cyber Crimes Unit; and Johnson County Sheriff’s Office.
Florida Man Pleads Guilty to Heroin Trafficking Conspiracy in Monroe-Wayne Counties Involving Three of His ChildrenRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a man who was residing in Kissimme, Florida, at the time of his arrest in September 2014, pleaded guilty yesterday before U.S. Magistrate Judge Karoline Mehalchick in Scranton, to participating in a heroin and cocaine trafficking conspiracy in Monroe and Wayne Counties that involved utilizing three of his children to distribute the drugs to customers.
According to United States Attorney Peter Smith, the defendant, Carlos Ruben Cruz, age 48, who resided in Wayne and Monroe Counties in Pennsylvania throughout much of the drug conspiracy, admitted to conspiring with others, including three of his children, to distribute heroin and cocaine between 2011 and 2014.
Cruz was indicted by a federal grand jury sitting in Scranton in August 2014, as a result of an investigation by agents of the Drug Enforcement Administration, investigators from the Pennsylvania State Police, the Wayne County District Attorney’s Office, and Pocono Mountain Regional Police.
Three of Cruz’s children, Rubie Cruz, age 26, Tiffanyann Cruz, age 21, and Brandon Cruz, age 24, were also charged in the indictment and have previously pleaded guilty to participating in the drug conspiracy. They are all awaiting sentencing.
Carlos Ruben Cruz faces up to 20 years in prison and a fine of $1 million. He will be sentenced at a later date by Senior U.S. District Court Judge Richard P. Conaboy after the completion of a pre-sentence investigation. Cruz remains detained in custody pending sentencing.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Federal Jury Convicts San Antonio Businessman in Estimated $3.9 Million Tax Fraud SchemeRead the Press Release
A federal jury this morning convicted a former owner of San Antonio-based Gourmet Express, LLC, a skillet meals manufacturing and distributing business, for his role in an estimated $3.9 million tax fraud scheme announced United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter.
Jurors found 70–year-old Robert Warren Scully guilty of conspiracy to defraud the United States, conspiracy to commit wire fraud, and three substantive wire fraud counts.
Evidence presented in trial revealed that from April 2001 until July 2009, Scully and others conspired to defraud the Internal Revenue Service by hiding earned taxable income generated by his frozen food business. Testimony revealed that Scully and others used intermediary companies in Thailand to provide shrimp and other ingredients at an inflated cost to Gourmet Express. Scully and others used the proceeds generated as a result of the inflated costs for personal expenses and failed to disclose that income to the Internal Revenue Service.
Scully faces up to five years imprisonment for conspiracy to defraud the U.S. and up to 20 years imprisonment for each of the remaining charges. Sentencing is scheduled for February 22, 2016, before United States District Judge David Ezra in San Antonio.
“Today’s conviction is a victory for the American taxpayer and the entrepreneurial spirit of this great country. Robert Scully should have known better than to try the old ‘shell game’ when it came to hiding income from his business partner and Uncle Sam,” said William Cotter, IRS Criminal Investigation’s Special Agent in Charge, San Antonio Field Office. “IRS Criminal Investigation Special Agents excel at peeling off the superficial shell of complex financial transactions and revealing the fraud hidden inside.”
The case resulted from an investigation by the Internal Revenue Service Criminal Investigation. Assistant United States Attorneys William R. Harris, Jay Hulings and Mary Nelda Valadez are prosecuting this case on behalf of the Government.
Emmetsburg Banker and Co-Schemers Sentenced in Federal CourtRead the Press Release
On Tuesday, November 24, 2015, three men were sentenced for their roles in a scheme to defraud the Iowa Trust and Savings Bank in Emmetsburg, Iowa.
Richard Jones, age 62, a banker from Emmetsburg, Iowa, Michael Manning, age 68 of Milford, Iowa, and Aric Manning, age 37, of Phoenix, Arizona were each convicted of one count of bank fraud, and were sentenced to federal prison for their roles in the scheme. Two others, Russ Salton, age 55, of Ruthven, Iowa, (who pled guilty to bank fraud) and Sue Salton, age 52, of West Des Moines, Iowa, (who pled guilty to False Statement to a Bank), had already been sentenced in federal court.
During the five change of plea hearings and five sentencings in this case, it was revealed that for over six years (from about November 24, 2003 to about March 29, 2010) as Senior Vice-President of Iowa Trust and Savings Bank (“ITSB”), in Emmetsburg, Iowa, Jones used his position of trust to engage in two similar, but wholly separate, criminal schemes with two separate groups of criminals (i.e., the Mannings in one scheme, and the Saltons in another).
Jones side-stepped the safeguards the ITSB and FDIC had established to protect ITSB from making dangerous loans. Jones deceived the bank into thinking third parties were taking out new loans in small amounts, when in fact, Jones was actually directing the bank’s money to the Mannings and the Saltons, both of whom were struggling borrowers with worrisome amounts of debt.
During these schemes, Jones personally forged the signatures of unknowing bank customers, repeatedly lied to and tricked his fellow ITSB bankers, and repeatedly committed aggravated identity theft by stealing the identity of some of his customers to fraudulently direct money to his co-schemers.
The Jones-Salton scheme fraudulently obtained loans worth about $389,284.00 and the Jones-Manning scheme fraudulently obtained loans worth about $86,351.17. None of these fraudulent loans could have been obtained without Jones’s personal involvement in each of the schemes.
Jones and the Mannings were sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Jones was sentenced to 14 months’ imprisonment. A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $207,209.17 to ITSB. He must also serve a five-year term of supervised release after the prison during which time he must make presentations warning others of the consequences of engaging in bank fraud. Finally, he was required (by his plea agreement with the United States) to make a public acknowledgment of guilt in several local papers. There is no parole in the federal system.
Aric Manning was sentenced to 12 months’ and 1 day imprisonment. A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $58,049.17 to ITSB. He must also serve a 5-year term of supervised release after the prison term.
Mike Manning was sentenced to time served (about a day). A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $27,460.00 to ITSB. He must also serve a 3-year term of supervised release after the prison term.
Sue Salton was sentenced in Sioux City on October 23, 2015, by United States District Court Judge Mark W. Bennett. Sue Salton was sentenced to time served (about a day). A special assessment of $100 was imposed and she forfeited $10,000 to the United States. She must also serve a 3-year term of supervised release after the prison term.
Russell Salton was sentenced in Sioux City on November 9, 2015 by United States District Court Judge Mark W. Bennett. Russell Salton was sentenced to 13 months’ imprisonment. A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $121,700 to ITSB. A special assessment of $100 was imposed. He must also serve a 5-year term of supervised release after the prison term.
Jones and Aric Manning (like Russell Salton before them) were released on the bond previously set and are to surrender to the Bureau of Prisons on a date yet to be set.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number for Jones is 14-3061. The case file number for Russell Salton is 14-3058 and for Sue Salton is 14-3064. The case file number for Michael Manning and Aric Manning is 14-3057.
The case was investigated by the Federal Deposit Insurance Corporation, Office of Inspector General; The Iowa Department of Criminal Investigations; the Federal Bureau of Investigations; the Small Business Administration, Office of Inspector General; and the Department of Veterans Affairs, Office of Inspector General. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
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East Saint Louis Woman Sentenced on Healthcare Fraud-Related ChargeRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today, that Alfreda E. Perkins, 54, of East Saint Louis, Illinois, pled guilty in federal court to charges that she engaged in a scheme to steal from a health care program. Sentencing has been set for March 22, 2016. Perkins will face up to 10 years in prison, a fine of up to $250,000, and up to 3 years of supervised release.
During her plea hearing, Perkins admitted that she had submitted false and fraudulent bills in relation to her alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Perkins admitted to falsely billing the program between November 1, 2013 and September 15, 2014, when she purportedly rendered personal assistant services to a customer when, in fact, she had not been with the customer.
This prosecution is part of the fourth wave of the "Operation Home Alone" initiative announced on June 5, 2014, by United States Attorney Stephen R. Wigginton. The investigation was conducted by the U.S. Department of Health and Human Services - Office of Inspector General, the Illinois State Police - Medicaid Fraud Control Bureau, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney William E. Coonan.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.
Danbury Man Convicted of Defrauding InvestorsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a federal jury in New Haven today found IAN PARKER BICK, 20, of Danbury, guilty of fraud and money laundering offenses stemming from his operation of Ponzi scheme. The trial before U.S. District Judge Jeffrey Alker Meyer began on November 6.
“Mr. Bick repeatedly lied to victim investors, took their money and used it to take trips with friends, on shopping sprees, to purchase jet skis, and also to pay off previous investors who were promised unrealistic returns,” U.S. Attorney Daly said. “I thank the FBI, IRS Criminal Investigation, U.S. Postal Inspection Service, Connecticut Department of Banking and Danbury Police Department for their diligent investigation and prosecution of this matter.”
According to the evidence at trial, BICK was a principal and/or managing member of various Danbury-based entities, including This Is Where It’s At Entertainment, LLC, Planet Youth Entertainment, W&B Wholesale, LLC, and W&B Investments, LLC. Using these entities, BICK solicited investment funds from his friends, former classmates, acquaintances, and their parents by promising high investment returns over relatively short periods of time. BICK falsely represented to victim-investors that he could generate the high investment returns by using their funds to purchase electronics and electronic devices, such as iPhones, tablets and head phones, and by reselling the items for a substantial profit via the Internet. However, the electronic resale business never actually began in earnest and did not return any meaningful profit. BICK also falsely represented to certain victim-investors that he could generate high investment returns by using their funds to organize and promote concerts at various venues in Connecticut and Rhode Island. BICK falsely represented that he had made significant profits organizing and promoting concerts in the past.
BICK failed to invest the funds he received as he had represented and instead used invested funds for unrelated and unsuccessful businesses, and to pay personal expenses, including hotel stays and to purchase jet skis. BICK also used invested funds to issue payments, purportedly as “interest payments” and as “return of principal,” to certain victim-investors.
Through this scheme, BICK defrauded more than 15 investors out of a total of nearly $500,000.
BICK was charged in a 15-count indictment on January 8, 2015. The jury found BICK guilty on six counts of wire fraud, which carry a maximum term of imprisonment of 20 years on each count, and one count of money laundering, which carries a maximum term of imprisonment of 10 years.
The jury found BICK not guilty on two counts of wire fraud and one count of making a false statement to federal law enforcement, and could not reach a verdict on three counts of wire fraud and one count of money laundering. The government dismissed one count of money laundering prior to the trial.
Judge Meyer scheduled sentencing for March 2, 2016. BICK is released on a $250,000 bond.
This matter has been investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service, with the assistance of the Connecticut Department of Banking and the Danbury Police Department. The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and Christopher W. Schmeisser.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [email protected].
Commercial Trash Hauler Convicted in Bribe Scheme and Baltimore City Landfill Employee Pleads Guilty to Selling Scrap MetalRead the Press Release
Baltimore, Maryland – Jarrod Terrell Hazelton, age 32, of Parkville, Maryland, a former employee at the Quarantine Road Landfill (Landfill), pleaded guilty today to conspiracy, and wire fraud, in connection with a scheme to unlawfully sell scrap metal from the Landfill and Northwest Transfer Station (NWTS), while falsely representing to the Baltimore Department of Public Works (DPW) that he was performing his job.
On November 20, 2015, John Howard Brady, age 74, of Glen Burnie, was convicted after a five day trial of conspiracy and two counts of bribery in connection with a scheme in which Brady and other commercial haulers paid Department of Public Works (DPW) employees cash in return for allowing the haulers to deposit trash at the Quarantine Road Landfill (Landfill) without paying the required disposal fees.
The convictions were 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; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
The DPW’s Bureau of Solid Waste is responsible for managing Baltimore City’s waste management services, including overseeing citizen drop-off centers, such as the NWTS and the Landfill. Baltimore City residents can deposit small amounts of trash and/or recyclables in dumpsters located near the main entrance of the Landfill, free of charge. Individuals or companies commercially hauling trash that have registered their vehicles with the City must obtain Landfill permits. Commercial haulers of trash must also pay a waste disposal fee of $67.50 per ton of trash deposited at the Landfill. DPW employees assigned as scale house operators weigh each truck as it enters the Landfill, which is recorded on a computerized point-of-sale system. The scale house operators reweigh each truck as it leaves the Landfill. The net weight of the deposited trash and the required disposal fee is then calculated and printed on a receipt that is handed to the driver.
According to the evidence presented at Brady’s trial, Brady was a commercial trash hauler who owned and operated Brady’s Roll Off Service. From July 2014, through May 1, 2015, Brady agreed to pay bribes to Tamara Washington, one of the DPW scale house operators, in exchange for she and the other scale house operators, not charging Brady a disposal fee for using the Landfill. For example, on March 30, 2015, Brady paid a $2,000 cash bribe to Tamara Washington. The bribes paid to the scale house operators saved Brady thousands of fees each month. Brady either paid the operator through the outbound window at the scale house, or met the operators at an off-site location where he would pay a week’s worth of bribes or more. Evidence at trial established that Brady’s company used the landfill dozens of times a year since 2007, resulting in a loss of approximately $560,000 in disposal fees for the City of Baltimore.
In addition to the revenue generated by the collection of disposal fees, Baltimore City’s waste management system generates revenue by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities, including household appliances, steel cables, copper wires, car parts, computer parts, door and window frames. The City awards contracts to private salvage companies to purchase and remove such scrap metal from its trash collection facilities. DPW employees at the Landfill and other trash collection sites are required to segregate the recyclable scrap metal from general refuse and place it in separate bins provided by the salvage companies. The companies regularly pick up the scrap metal, weigh it and send a tonnage report to the City. Based on predetermined prices per ton, the City sends an invoice to the companies requesting payment for the value of the scrap metal the companies removed during a given period of time. Salvaging by employees, also referred to as “junking,” was strictly prohibited and employees were put on notice that any salvaging of metal constituted theft of City property.
From 2005 until May 2015, Hazelton, who was employed by DPW at the Landfill, and other DPW employees, including Michael Bennett and supervisor William Nemec, unlawfully collected and sold scrap metal for personal gain during work hours, while representing to DPW that they were doing the jobs for which they were being paid. Hazelton was a leader in the scheme and coordinated the daily collection of scrap metal at the Landfill. Hazelton and other employees used part of the proceeds of the sale of the stolen scrap metal to pay other DPW employees for their help locating, setting aside, collecting and loading the scrap metal onto their trucks. Hazelton, Bennett, and other employees at the Landfill, used their personal cell phones to communicate when and where recyclable scrap metals were being dumped at the Landfill, and to coordinate their arrival at the private salvage yard. Hazelton, Bennett, and others transported the scrap metal, using their personal pick-up trucks, to a private salvage company, frequently making multiple trips during a single, eight-hour work shift. The sale of the stolen scrap metal for their personal benefit resulted in a loss of revenue to the City of at least $400,000.
In order to conceal the junking scheme, Hazelton and Bennett paid cash to Nemec and other supervisors to not report them for collecting and transporting the stolen scrap metal, and to authorize and submit false time and attendance records. Hazelton prepared and submitted false time and attendance records, which claimed he had been working, when he was instead illegally collecting and selling the scrap metal, resulting in wages being paid to Hazelton for work he did not perform.
Hazelton and Brady each face a maximum sentence of five years in prison for the conspiracy. Hazelton also faces a maximum of 20 years in prison for wire fraud, and Brady faces a maximum of 10 years in prison for each of two counts of bribery. U.S. District Judge Marvin J. Garbis has scheduled sentencing for Brady on February 16, 2016 at 10:00 a.m., and for Hazelton on February 17, 2016 at 11:00 a.m.
Former Baltimore City Department of Public Works (DPW) employees Tamara Oliver Washington and William Charles Nemec, Sr., both age 55; and Michael Theodore Bennett, age 47, all of Baltimore, previously pleaded guilty to their roles in the schemes and are awaiting sentencing. Five other commercial trash haulers have also pleaded guilty.
United States Attorney Rod J. Rosenstein praised the FBI, IRS-CI, Baltimore Office of Inspector General, and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Martin J. Clarke and Leo J. Wise, who are prosecuting the case.
Bookkeeper Sentenced to 30 Months in Federal Prison for Tax EvasionRead the Press Release
PHOENIX – On Nov. 23, 2015, Deanna Kay Frader, 66, of Mesa, Ariz., was sentenced by U.S. District Judge Neil V. Wake to 30 months’ imprisonment, followed by three years of supervised release, for evading income tax on nearly $1.7 million she embezzled from Ardent Sound, Inc., where she had been employed as an office manager and bookkeeper. Frader previously pleaded guilty to tax evasion.
“The United States Attorney Office will vigorously prosecute those who commit this type of serious and repeated abuse of financial trust,” said U.S. Attorney John S. Leonardo. “Frader’s actions were harmful to her employer and to taxpayers, and it is hoped that this well-deserved sentence will deter others from similar fraudulent activity.
Frader was the sole office manager and bookkeeper for Mesa-based Ardent Sound for more than 20 years, until April of 2012. Her embezzlement was discovered during an Internal Revenue Service (IRS) audit of Frader Endeavors, LLC, a company that Frader owned with her son and that was the beneficiary of a large portion of the stolen funds. In an effort to hide the embezzlement and evasion during the audit, Frader created a fictitious loan agreement with Ardent Sound and forged the signature of its prior president. In the plea agreement, Frader admitted that she stole funds from Ardent Sound on nearly 400 occasions and then altered the company’s records to conceal the theft. She also admitted that she knew of her obligation to pay taxes on the funds and purposefully did not do so. As part of her sentence, Frader was ordered to pay restitution to Ardent Sound and to the IRS for the full amount of the respective losses.
The investigation in this case was conducted by the IRS-Criminal Investigation. The prosecution was handled by Monica Klapper, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-219-PHX-NVW
RELEASE NUMBER: 2015-117_Frader
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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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Blaine Man Sentenced to 282 Months in Prison for Trafficking 18-Year-Old VictimRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of RAHMAD LASHAD GEDDES, a/k/a “Face,” a/k/a “Poo Poo,” 36, to 282 months in federal prison for trafficking an 18-year-old woman from Wisconsin to Duluth, Minn., for the purpose of commercial sex. GEDDES, who was charged in a superseding indictment on April 8, 2015, was convicted on April 27, 2015, following a six-day jury trial.
“This violent defendant preyed on the vulnerabilities of his victim and used force and coercion to sell her for commercial sex,” said Assistant U.S. Attorney Laura Provinzino. “The lengthy sentence handed down by the court underscores the seriousness of these types of crimes, which we will continue to combat through aggressive prosecution.”
St. Louis County Attorney Mark Rubin said: "I want to commend U.S. Attorney Andy Luger for recognizing the tremendous value of combining our offices' efforts. The collaboration between some of our finest prosecutors, as happened in this case, assures justice for a remarkably courageous victim. The work of Assistant United States Attorney Laura Provinzino and Assistant St. Louis County Attorney Jon Holets is an example of the kind of cooperative work we need to help build a safer world. It gives me hope."
As proven at trial, on January 6, 2014, GEDDES recruited the victim from her home in Eau Claire, Wis., for the purpose of trafficking her for commercial sex. The defendant and a friend took the victim to a motel in Duluth, Minn., where they took pictures of her to place an advertisement for commercial sex on backpage.com. GEDDES used an anonymous prepaid credit card to pay for the online advertisement. GEDDES and his friend used the victim’s cell phone to set up several “dates” between the victim and “johns.” On one occasion, after a meeting with a “john,” GEDDES accused the victim of hiding money. The defendant physically assaulted the victim and told her that he hit her because she did not do what she was told.
As proven at trial, on January 9, 2014, GEDDES traded drugs, which he referred to as “rocks,” for two semi-automatic handguns and ammunition. GEDDES has four previous felony convictions in Cook County, Ill., Hennepin County and Sherburne County, Minn., making him an armed career criminal under federal law.
As proven at trial, on January 14, 2014, GEDDES returned the victim to her home. She immediately reported to her pastor that she “had been used for prostitution.”
This case was the result of an investigation conducted by the Federal Bureau of Investigation, Homeland Security Investigations, Duluth Police Department and St. Louis County Sheriff’s Office.
This case was prosecuted by Assistant U.S. Attorney Laura M. Provinzino and Special Assistant U.S. Attorney Jon Holets of the St. Louis County Attorney’s Office.
Defendant Information:
RAHMAD LASHAD GEDDES, a/k/a “Face,” a/k/a “Poo Poo,” 36
Blaine, Minn.
Convicted:
- Sex Trafficking by Force, Fraud, or Coercion, 1 count
- Transportation with Intent to Engage in Prostitution, 1 count
- Armed Career Criminal in Possession of a Firearm, 1 count
Sentenced:
- 282 months in prison
- Lifetime supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Authorities seek to identify customers of Budget Finance Company, Inc.Read the Press Release
WHEELING, WEST VIRGINIA – Federal and state authorities are seeking to identify anyone who suffered a financial loss as a result of dealings with Budget Finance Company, Inc. of New Martinsville, West Virginia, United States Attorney William J. Ihlenfeld, II, announced.
Individuals or businesses who may have suffered losses as a result of financial transactions with Budget Finance Company are asked to file a complaint with the United States Attorney’s Office for the Northern District of West Virginia using a standardized complaint form, available here.A community forum will be hosted by the Wetzel County Prosecuting Attorney’s Office on Tuesday, December 1, at 9:30 a.m. at the New Martinsville Municipal Building on Main Street in New Martinsville. Information will be provided to the public at the forum, and copies of the complaint form will be provided.
Individuals can also report losses directly to the U.S. Attorney’s Office in Wheeling by calling (304) 234-7721 or by sending an email to [email protected].
Atlanta Man Sentenced in Counterfeit Check SchemeRead the Press Release
Edmond Heath, 27, of Atlanta, Georgia, was sentenced today to serve 24 months in prison, followed by 3 years supervised release, on federal fraud charges, announced David Rivera, United States Attorney for the Middle District of Tennessee. Heath was also ordered to pay restitution in the amount of $21,551.85.
Heath pleaded guilty on August 10, 2015, to two counts of bank fraud and one count of conspiring to produce counterfeit checks. During the plea hearing, Heath admitted taking part in a scam in which he and other individuals from Atlanta would travel to Tennessee and other states, in order to steal checks from local businesses, manufacture counterfeit checks using information derived from the stolen checks, and recruit and pay local individuals to cash the counterfeit checks. Heath acknowledged stealing checks from a business located in Murfreesboro, Tennessee, in December 2014 and recruiting an individual to cash counterfeit checks that appeared to be written on the account of the business. Heath also admitted that he instructed the individual on how to cash counterfeited checks at Pinnacle Bank locations in and around Murfreesboro.
Heath was indicted on the present charges on April 15, 2015, along with Horace Freeman, 52, of Decatur, Georgia and Jennifer Kelson, 25, of Atlanta. On November 9, 2015, Kelson pleaded guilty to conspiring to produce counterfeit checks and is awaiting sentencing. Freeman is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the United States Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.