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24 November 2015
Justice Department Announces Deutsche Bank (Suisse) SA Reaches Resolution under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Deutsche Bank (Suisse) SA (Deutsche Bank Suisse) reached a resolution under the department’s Swiss Bank Program. Deutsche Bank Suisse will pay a penalty of more than $31 million.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
- Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Deutsche Bank Suisse agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
Deutsche Bank Suisse is headquartered in Geneva, Switzerland, with additional offices in Zurich and Lugano, Switzerland and is part of the Deutsche Bank Group. From at least August 2008 through August 2013, Deutsche Bank Suisse enabled some U.S. taxpayers to evade their U.S. tax and filing obligations, resulting in the filing of false income tax returns with the Internal Revenue Service (IRS) and allowing U.S. taxpayers to hide offshore assets from the IRS.
Deutsche Bank Suisse offered a variety of services and permitted some practices that it knew could and did assist U.S. taxpayers in concealing assets and income from the IRS. Deutsche Bank Suisse offered hold mail services, and notes written by Deutsche Bank Suisse employees on some hold mail forms explained that the client’s mail was not delivered or picked up because the client resided in the United States and his or her account was “not declared.” Deutsche Bank Suisse also provided U.S. beneficial owners with debit cards linked to accounts held at Deutsche Bank Suisse or credit cards whose balances the U.S. beneficial owners instructed Deutsche Bank Suisse to pay from accounts held at the bank. Use of these cards by U.S. taxpayers facilitated their access to or use of undeclared funds on deposit at Deutsche Bank Suisse. Deutsche Bank Suisse processed standing orders for checks in amounts less than $10,000 to be sent on a monthly basis into the United States, and in at least two instances those checks were issued to the U.S. beneficial owners from accounts held in the name of Liechtenstein foundations.
In 2001, Deutsche Bank Suisse entered into a Qualified Intermediary (QI) Agreement with the IRS. Under a QI Agreement, if an accountholder wished to trade in U.S. securities without being subjected to mandatory U.S. tax withholding, the accountholder’s bank was required to obtain the consent of the accountholder to disclose his or her identity to the IRS. However, after signing its QI Agreement, Deutsche Bank Suisse continued to service certain U.S. customers without disclosing their identity to the IRS and without regard for the impact of U.S. criminal law on that decision.
Prior to October 2008, Deutsche Bank Suisse’s position was that it could service a U.S. client without reporting the U.S. taxpayer’s interest in the account to the IRS so long as it prohibited the accountholder from trading in U.S. securities or the account was an account nominally structured in the name of a non-U.S. entity accompanied by an IRS Form W-8BEN or equivalent bank document. In the latter circumstances, U.S. clients, with the assistance of their external advisors, would create an entity, such as a Liechtenstein foundation, Panamanian corporation or British Virgin Islands corporation, and pay a fee to third parties to act as corporate directors. Those third parties, at the direction of the U.S. client, would then open a bank account at Deutsche Bank Suisse in the name of the entity or transfer funds from a pre- existing account from another bank. Deutsche Bank Suisse employees provided prospective U.S. clients with referrals to external advisors who could assist with the creation and management of such an entity. In some instances, Deutsche Bank Suisse made insufficient efforts to determine whether such an entity was valid for U.S. tax purposes.
Deutsche Bank Suisse maintained and serviced accounts beneficially owned by U.S. taxpayers that were held by entities created in countries such as Liechtenstein, Liberia, Panama and the British Virgin Islands, some of which were operated by the U.S. beneficial owners in violation of corporate governance provisions. In certain cases involving a non-U.S. entity, Deutsche Bank Suisse was aware that a U.S. client was the true beneficial owner of the account. Despite this, Deutsche Bank Suisse would sometimes obtain from the entity’s directors a Form W-8BEN or equivalent bank document that falsely declared that the beneficial owner was not a U.S. taxpayer. In some of these cases, Deutsche Bank Suisse permitted the accounts to trade in U.S. securities without reporting account earnings or transmitting withholding taxes to the IRS, as required by the QI Agreement.
Deutsche Bank Suisse has cooperated fully with the department during its participation in the Swiss Bank Program. Deutsche Bank Suisse conducted an internal investigation that included interviews of relationship managers and members of management; review of account files; review of emails; and review of applicable policies, procedures and compliance training materials. Deutsche Bank Suisse provided a comprehensive and detailed in-person presentation to the department, with accompanying documentation, regarding the findings of its internal investigation and how it structured, operated and supervised its cross-border business. Deutsche Bank Suisse assisted and agreed to continue to assist U.S. authorities in preparing treaty requests to the Swiss competent authority for account records of U.S. clients, including by identifying accounts that may meet the standard for information exchange under an applicable treaty. On a rolling basis and prior to the execution of its non-prosecution agreement, Deutsche Bank Suisse also provided aggregate and account-level information regarding U.S.-related accounts that were closed since Aug. 1, 2008.
Since Aug. 1, 2008, Deutsche Bank Suisse had 1,072 U.S.-related accounts with an aggregate maximum value of approximately $7.65 billion. Deutsche Bank Suisse will pay a penalty of $31.026 million.
In accordance with the terms of the Swiss Bank Program, Deutsche Bank Suisse mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at Deutsche Bank Suisse who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at Deutsche Bank Suisse must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked John E. Sullivan and Thomas G. Voracek, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jury Convicts Sapulpa Businessman for Committing Mail Fraud, Money Laundering and Bankruptcy FraudRead the Press Release
TULSA, Okla.—Following a five-day jury trial, a Sapulpa businessman was convicted late Monday for mail fraud, money laundering, and bankruptcy fraud resulting in a $133,500 loss to the Frank and Barbara Broyles Legacy Foundation, a charitable organization and affiliate of the University of Arkansas Foundation. Frank Broyles is the noted former athletic director and football coach of the University of Arkansas.
United States Attorney Danny C. Williams Sr. of the Northern District of Oklahoma; Special Agent in Charge Scott Cruse of the FBI’s Oklahoma City Field Office; and Special Agent in Charge Damon Rowe of the IRS-Criminal Investigations Dallas division made the announcement.
Kelly Verd Nichols, 47, was charged by a superseding indictment on September 10, 2015, with two-counts of mail fraud; four-counts of unlawful monetary transactions and money laundering; and four-counts of bankruptcy fraud. At the time of the crimes, Nichols and his wife owned International Marketing Consultants, LLC, and International Marketing Consultants, Inc.
United States District Chief Judge Gregory K. Frizzell presided over the jury trial and will sentence Nichols on March 8, 2016.
According to evidence presented at trial, in 2007, Nichols convinced the Broyles Foundation that International Marketing Consultants could produce a booklet developed by Frank Broyles entitled “Coach Broyles’ Playbook for Alzheimer’s Caregivers,” commonly referred to as “the Playbook.”
From 2007 to 2009, the Broyles Foundation ordered and paid for approximately 1,100,000 copies of the Playbook which was distributed nationally. In 2009, an additional 500,000 copies were ordered and distributed.
The jury found that in May 2010, Nichols submitted a fraudulent invoice for shipping of the Playbooks to the Broyles Foundation when in fact the Playbooks were not printed or shipped as Nichols claimed. As a result, the Broyles Foundation and UofA Foundation sent payment to Nichols totaling $133,500.
At the time of sentencing, Nichols faces up to 20 years in prison. As part of his sentence, a criminal forfeiture money judgment will be entered in the amount of $133,500 representing proceeds obtained as a result of the mail fraud scheme.
The case was investigated by the FBI and IRS-CI; and prosecuted by Assistant U.S. Attorneys Kevin C. Leitch, Clemon D. Ashley, and Catherine Depew on behalf of the United States.
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Jerome Gang Member Sentenced to Twelve Years in Prison for Firearms OffensesRead the Press Release
BOISE –Vicente Rene Ramirez, Jr., also known as Little Gangster, 33, of Jerome, Idaho, was sentenced today to 144 months in prison for unlawful possession of a handgun and possession of a sawed-off shotgun in furtherance of a drug trafficking crime, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge also ordered Ramirez to serve five years of supervised release following his release from prison. Ramirez pleaded guilty on August 27, 2015.
According to court proceedings, Ramirez was found to be in possession of a sawed-off shotgun and a .22 revolver on February 11, 2015, in Jerome County. Ramirez, who had previously been convicted of possession of a controlled substance with the intent to deliver, was prohibited from possessing any firearm. When questioned by law enforcement, Ramirez stated that he was a proud Norteno gang member who always carried a sawed-off shotgun. Ramirez admitted that he worked as “muscle” for a local drug dealer.
The case was investigated by the Jerome County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Jamaican man convicted in international lottery scamRead the Press Release
CLARKSBURG, WEST VIRGINIA – Davel Godfrey Young, 52, of Montego Bay, Jamaica, was convicted of wire fraud today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Young, along with other individuals, made a series of unsolicited phone calls and sent unsolicited emails to a variety of United States citizens. Young informed these individuals that they had won a multi-million dollar lottery prize and a new Mercedes Benz or BMW vehicle. Young then informed the purported lottery winners that in order to receive their lottery prizes, they needed to pay taxes and processing fees by wiring finds to Jamaica and various locations within the United States.Young further sent fraudulent documentation that misleadingly appeared to be official government forms and unlawfully portrayed the names and symbols of the Internal Revenue Service, Department of Treasury, and Federal Reserve Board. Young also transmitted electronic images of forged multi-million dollar cashier’s checks.
Young pled guilty today to one count of “Conspiracy to Commit Wire Fraud.” He faces up to 20 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offensebis and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew Cogar prosecuted the case on behalf of the government. The Treasury Inspector General for Tax Administration investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Hunting Show Host, Four Hunters, Production Company Plead Guilty in Noatak National Preserve Poaching Investigation-Aircraft ForfeitedRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a cable TV hunting show host and four other individuals charged in the investigation have pleaded guilty and have been sentenced in Anchorage United States District Court for their participation in a multi-year poaching operation on the Noatak National Preserve.
On November 23, 2015, Syndicate TV show host Clark W. Dixon, 41, of Hazlehurst, Mississippi, pleaded guilty before the Hon. Ralph R. Beistline, Chief United States District Court Judge, to two felony violations of the Lacey Act for his role in the illegal take of a brown bear. The take involved a number of violations of hunting laws including same day airborne, hunting without proper non-resident tags and permits, and the illegal transporting and outfitting of non-resident hunters. The charges involved actions from 2008 through 2014 in the Noatak National Preserve.
Along with the agreement to plead guilty, Clark Dixon has also agreed to a sentence of 18 months in prison, a fine of $75,000, and forfeiture of 17 trophies including grizzly bear, Dall sheep and caribou, along with bows and several rifles used in the illegal take of game in Alaska. As part of his plea of guilty, Clark Dixon agreed that in 2009 he assisted Clarence Michael Osborne in the illegal take of a grizzly bear, by hunting same day airborne, without a guide or proper permits. The agreement also states that Clark Dixon falsified a hunt record claiming the bear was killed by his father, Charles Dixon. The plea agreement also covers the allegation that at the time the violations were committed, Clark Dixon illegally claimed Alaska residency status while being a resident of the state of Mississippi. The charges against Clark Dixon reflect that he lied about his residency status in order to take advantage of Alaska resident hunting privileges, thus nullifying all of his Alaska hunts which resulted in the forfeiture of the 17 trophies and firearms. Clark Dixon also agreed not to contest the forfeiture of a STOL Quest SQ-4 aircraft used by his father, Charles Dixon, which was instrumental in assisting Clark Dixon in transporting and outfitting non-resident hunters in the illegal take of game. Clark Dixon’s sentencing has been set for February 12, 2016, in Anchorage.
Following Clark Dixon’s change of plea, his father, Charles W. Dixon, 70, also pleaded guilty to two violations of the Lacey Act for illegally flying a non-resident hunter, Clarence Michael Osborne, into their camp on the Noatak National Preserve to hunt grizzly bear, caribou and moose. During the hunt, Osborne killed a grizzly bear without a guide and without the appropriate non-resident permits. After the hunt, Charles Dixon claimed to have killed Osborne’s bear as his own on state hunt records. As part of his plea and sentence imposed by the court, Charles Dixon was sentenced to pay a fine of $15,000 and to pay $10,000 in restitution to the Noatak Preserve with those funds directed toward the removal of their illegal camp materials from the Preserve. In addition, Charles Dixon has forfeited his STOL Quest SQ-4 to the government as the aircraft was used to transport hunters, and illegally taken game in and out of the Preserve.
In other related cases, and on November 13, 2015, Clarence Michael Osborne, 53, of Madison, Mississippi, pleaded guilty to a violation of the Lacey Act for killing a grizzly bear in the Preserve while hunting with and on a hunt arranged by Clark Dixon. Osborne killed the grizzly bear without the proper permits, or tags, and the same day he was airborne. Osborne also pleaded guilty to killing a bull moose without a permit from the Preserve. As part of his plea and sentence, Osborne was sentenced to five years of probation, with a condition that he not hunt anywhere in the world. Osborne was sentenced by Judge Beistline under a plea agreement and was sentenced to pay a fine of $65,000, and to pay restitution to the Noatak Preserve for the illegally taken game in the amount of $16,000. Osborne was also required to forfeit a grizzly bear mount, bull moose mount, three caribou mounts and a .375 H and H rifle and scope used to commit the crimes. Osborne is also required to issue a public service announcement to various hunting publications about his illegal acts.
Fulton Wold, 41, of Nashville, Tennessee, also pleaded guilty and was sentenced pursuant to a plea agreement on November 13, 2015. As part of this agreement and sentence, Wold agreed to plead guilty to the illegal take of a caribou on a hunt orchestrated by Clark Dixon in September 2009 in which Wold did not have the proper permits or non-resident tags. As part of his sentence, Wold received a sentence of two years probation, a fine of $7,500, and was ordered to pay $1,000 in restitution to the Noatak Preserve. Wold was also required to forfeit a bull moose and caribou mount as both were killed illegally.
On November 6, 2015, Terry Goza, 71, of Hazlehurst, Mississippi, pleaded guilty to taking a Dall sheep ram, same day airborne, in the Noatak preserve while hunting with Clark Dixon and others. Goza was sentenced to a term of probation and the payment of a $7,500 fine.
Footage from Osborne, Wold’s and Goza’s hunts were shown on Clark Dixon’s cable TV hunting show “The Syndicate.”
Citations from the National Park Service for conducting filming operations on the Noatak Preserve without a permit were also issued to The Outdoor Syndicate, LLC, in Reno, Nevada, its owner Michael P. Dianda, and an editing studio, Zap Lab, Ltd, in Reno, Nevada. The citations were issued due to the failure of Clark Dixon and another professional videographer to acquire footage for and used on The Syndicate without first obtaining a permit to commercially film on the Preserve. All have paid their fines in connection with the case. Defendants Shannon Dale Hooks, 54, of Mendenhall, Mississippi, and Lance David Walker, 37, of Baton Rouge, Louisiana, have changes of plea set for December 3, 2015. Defendant Randall Goza, 48, of Wasilla, Alaska, has entered a plea of not guilty and his case is set for trial.
Robert Viner has been cited in Mississippi by the investigation for the illegal transport of an unlawfully taken brown bear. Viner has admitted guilt in connection with the charges, and has paid a $3250 fine.
Ms. Loeffler commends the work of the United States Fish and Wildlife Service, Division of Law Enforcement and the National Park Service who jointly investigated this case in Alaska and elsewhere.
Granite Construction to Pay More Than $8 Million in Forfeiture and Penalties for Engaging in A Scheme to Fraudulently Claim Credit for Work Performed by A Minority Owned BusinessRead the Press Release
Granite Construction, Incorporated (Granite), a nationwide construction and public works company that is publicly traded on the New York Stock Exchange, has entered into a non-prosecution agreement and agreed to pay more than $8 million to the federal government and the Metropolitan Transportation Authority Office of Inspector General (MTA-IG) to resolve a criminal investigation into a disadvantaged business enterprise (DBE) fraud scheme perpetrated by Granite’s wholly-owned subsidiary, Granite Construction Northeast, Incorporated (GCN), previously known as Granite Halmar Construction Company, Incorporated. In addition, Granite will provide continuing cooperation to the government and maintain far-reaching corporate reforms.
The resolution was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Doug Shoemaker, Regional Special Agent-in-Charge, U.S. Department of Transportation, Office of Inspector General; Barry Kluger, Inspector General, Metropolitan Transportation Authority; Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation; and Cheryl Garcia, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in New York. U.S. Attorney Capers also thanked the Federal Transit Administration, a division of the U.S. Department of Transportation, for its assistance.
Pursuant to the non-prosecution agreement signed today, Granite acknowledged and accepted responsibility for a DBE fraud scheme related to GCN’s work on a contract for the MTA that involved the construction of a bus depot in Maspeth, Queens, NY (the Project). The Project was largely federally funded.
The investigation revealed that GCN served as the prime contractor on the Project after being awarded the prime contract for the job by the MTA, a contract for which GCN was ultimately paid approximately $222 million. The contract required GCN to comply with the Disadvantaged Business Enterprise Program (the DBE program). Pursuant to that program, as the prime contractor, GCN was obligated to make good faith efforts to subcontract a specified percentage of work on the prime contract to certain disadvantaged business enterprises (DBE companies).
GCN, certain other non-DBE companies (the actual companies), and a DBE company that acted solely as a front company in connection with the Project (the front company) conspired to arrange the following scheme to avoid compliance with the DBE program:
(a) the front company would be awarded a subcontract worth approximately $22 million, to perform certain construction work (the specified work) on the Project;
(b) the actual companies would perform the specified work, but payroll would be “run through” the front fompany, with paperwork arranged to make it appear as if the front company was performing the specified work; and
(c) GCN would pay the front company a $500,000 “DBE fee,” although the front company would not perform a “commercially useful function” on the specified work, as required by state and federal regulations.
As the front companies performed the specified work, GCN submitted to officials from the MTA, as required, periodic progress reports that purported to represent the percentage of work performed by DBE companies on the prime contract. From 2004 through approximately 2008, GCN falsely represented in those reports that the front company had performed a “commercially useful function” in performing the specified work, when in fact, the specified work had actually been performed by the actual companies, and the front company had not performed any such commercially useful function.[1] As a result, GCN deprived the MTA of its rights under the prime contract and deprived legitimate DBE companies of the opportunity to perform the specified work and be paid for it.
In light of a comprehensive internal investigation conducted by Granite, Granite’s complete acceptance of responsibility for GCN’s unlawful conduct, Granite’s cooperation with the government, the fact that the GCN employees most responsible for GCN’s unlawful conduct were separated from GCN and Granite years before the government’s investigation began, and Granite’s far-reaching remedial measures, including site visits by compliance program staff and mandatory training for appropriate Granite managers and employees, the government has agreed not to prosecute Granite or GCN for GCN’s criminal conduct provided that Granite complies for two years with all the terms of the agreement executed today. Significantly, this agreement also secures civil forfeiture to the federal government of $7.25 million in connection with this fraud, as well as a payment of $1 million to the MTA-IG.
“GCN defrauded the MTA by falsely claiming that millions of dollars worth of construction work was performed by a DBE company. Today’s resolution marks a significant step in our continued effort to eliminate DBE fraud in New York’s construction industry and also recognizes Granite’s decision to timely accept full responsibility, provide complete cooperation, and take remedial measures to enforce best industry practices,” stated U.S. Attorney Capers. Mr. Capers thanked the investigative agencies for their outstanding commitment and dedication over the course of this investigation.
“As evidenced by the non-prosecution agreement entered into by Granite Construction, Inc., we remain steadfast in our commitment to maintaining the integrity of the U.S. Department of Transportation’s (USDOT) Disadvantaged Business Enterprise program,” said Regional Special Agent-in-Charge Shoemaker, USDOT Office of Inspector General. “Working with the Secretary of Transportation and other DOT leaders, and our law enforcement and prosecutorial colleagues, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse, and violations of law.”
“This investigation uncovered a scheme that exploited a program designed to encourage disadvantaged businesses to participate in Metropolitan Transportation Authority projects,” stated IRS-Criminal Investigation Special Agent-in-Charge Kitchen. “IRS-Criminal Investigation is proud to be part of the collective law enforcement effort on this investigation; it demonstrates the government’s resolve to protect public funds and its commitment to ensure the public’s trust. The fact that GCN has entered into an agreement with the government will further serve and protect the public’s best interest.”
“Today’s announcement clearly reflects the firm commitment by our Office and our investigative and prosecutorial partners to utilize all avenues to ensure compliance with DBE requirements and to create and maintain a level playing field on which all qualified DBEs have a fair and equal opportunity to bid for and participate in all MTA projects. We will continue to direct our energies and share of settlement proceeds to support the MTA Small Business Development Program and other productive efforts to expand opportunities for disadvantaged business enterprises,” stated Inspector General Kluger.
“Reporting that work was performed by a DBE company involved manipulating American workers and processing their pay through a front company in order to conceal the fraud. We will continue to work with our law enforcement partners to protect contract opportunities for legitimate disadvantaged businesses,” stated Special Agent-in-Charge Garcia of the New York Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Paul Tuchmann and Burton Ryan are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of the funds.
[1] In August 2013, one of the actual companies, A.J. McNulty & Company, also entered into a non-prosecution agreement with the United States Attorney’s Office for the Eastern District of New York to resolve a criminal investigation into the same scheme. Under the terms of that agreement, A.J. McNulty agreed to forfeit $850,000 to the federal government and pay $100,000 to the MTA-IG.
Grady County Residents Convicted of Burning Houses for InsuranceRead the Press Release
United States Attorney for the Middle District of Georgia, Michael J. Moore, today announced the convictions on Friday of three individuals in an insurance fraud scheme in federal court in Albany, Georgia, following a three and a half week long trial.
Elbert Walker, Jr. a/k/a “Shula”, of Cairo, Georgia, was convicted of conspiracy to commit arson and mail, wire, bank and bankruptcy fraud and false declarations to a court as well as several firearms offenses. Darryl Burk, of Cairo, Georgia, was convicted of conspiracy to commit mail fraud. Shirley Burk, of Cairo, Georgia, was convicted of conspiracy to commit arson, mail fraud and false declarations to a court. The jury deliberated just over one day before returning the verdicts. Senior United States District Court Judge W. Louis Sands presided over the trial.
The evidence presented at trial showed that between 1996 and 2006, Elbert Walker, Jr. was the owner and operator of Southside Grocery in Camilla, Georgia; Northside Home Remodeling in Cairo and Moultrie, Georgia; J and J Hauling, Roofing and Construction in Cairo, Georgia; North Broad Mini Market in Thomasville, Georgia; Rainbow Club located in Pelham, Georgia; Chickasaw Club in Cairo, Georgia; and Zock Rock Publishing and Promotions, Inc. located in Cairo, Georgia. Co-defendants Darryl Burk and Shirley Denise Burk were residents of Grady County, Georgia and relatives of Elbert Walker, Jr.
The three defendants conspired to destroy residential dwellings in the Grady, Mitchell, Thomas and Colquitt County areas by intentionally setting fire to them. They then defrauded insurance providers by falsely claiming that proceeds of insurance policies should be paid to them. In addition, the trio defrauded lending institutions in order to obtain financing for residential mortgage loans for the properties and presented counterfeit and forged checks associated with the proceeds of said insurance policies. Finally, Mr. Walker and Mrs. Burk defrauded the United States Bankruptcy Court and United States District Court.
The properties involved in the conspiracy were located at 1097 Bondvilla Drive in Cairo, Georgia; 410 Oak Street in Thomasville, Georgia; 555 Baggs Ferry Road in Camilla, Georgia; 605 S. Harney Street in Camilla, Georgia; and 608 Oak Circle in Moultrie, Georgia.
The evidence showed that Mr. Walker was previously convicted of Welfare Fraud Conspiracy in New Jersey. In 2007 and 2011, agents executed search warrants at his residence in Cairo, Georgia and located multiple firearms in his possession. Some of these firearms also had obliterated serial numbers.
U.S. Attorney Michael Moore said, “This scheme had been ongoing for several years and I commend the dedicated effort of the investigators and prosecutors who brought this long-running criminal activity to a conclusion. This is an outstanding example of how cooperation between local, state and federal authorities can bring about justice that would not be achieved by any one entity acting alone.”
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; United States Secret Service, Georgia State Fire Marshal’s Office, Grady County Sheriff’s Office, Pelham Police Department, and Moultrie Fire Department. Assistant U.S. Attorney Leah McEwen and Special Assistant U.S. Attorney Harry Foster prosecuted the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Gila River Man Sentenced to 12 Years in Prison for StabbingRead the Press Release
PHOENIX – Yesterday, Jeremy Lee Thompson, 33, of Sacaton, Ariz., a member of the Gila River Indian Community, was sentenced by U.S. District Judge Susan R Bolton to 144 months in prison after previously pleading guilty to assault resulting in serious bodily injury.
On Feb. 28, 2015, Thompson confronted another member of the Gila River Indian Community and slashed him across the face with a knife. Thompson obstructed the investigation by encouraging his friends to threaten witnesses in the case, and the Court took that into account in imposing the sentence. Thompson was on federal supervised release at the time of the stabbing
The investigation in this case was conducted by the Gila River Police Department. The prosecution was handled by Raynette Logan and Christina Covault, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-15-00297-PHX-SRB
RELEASE NUMBER: 2015-116_Thompson
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Fourth Conspirator Pleads Guilty in Bank Fraud SchemeRead the Press Release
Greenbelt, Maryland – Bertrand Awah Essem, age 27, of Beltsville, Maryland pleaded guilty today to conspiring to commit bank fraud.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; and John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General.
According to his plea, from October 2010 to July 2012, Essem recruited college students at the University of Maryland Eastern Shore, promising that they could make some easy money. Essem told the recruits, to open a bank account, obtain a debit card and PIN number associated with that debit card, and provide that information to Essem. Essem told the recruits that money would be transferred into these accounts from The Home Depot. The recruit would be required to withdraw the majority of the money and give that to Essem. The recruit could keep a portion, in some cases as much as $300.
After the recruits, including Stanley Nmesirionye and Dosis Feludu, opened the bank accounts, Essem collected the debit cards and PIN numbers and provided them to another co-conspirator.
In furtherance of the scheme, a conspirator would order materials with Home Depot stores, supplying a victim’s stolen credit card number that was obtained through other means. Within a few days, a conspirator canceled the order and requested that the refund be placed on the co-conspirator’s debit card, including the debit card numbers of co-conspirators recruited by Essem,
During the course of the fraud scheme, Essem collected $264,757.29 from the co-conspirators he recruited. From December 13, 2010, to March 2011, a total of 69 refunds from The Home Depot were credited to bank accounts of individuals recruited by Essem.
Co-defendants Godfred Obeng, age 38, of Glen Allen, Virginia; Stanley Nmesirionye, age 24, of Owings Mills, Maryland, and Dosis Feludu, age 25, of Salisbury, Maryland, previously pleaded guilty to their participation in the fraud scheme and await sentencing.
Essem faces a maximum sentence of 30 years in prison and a fine of $1 million. U.S. District Judge George J. Hazel scheduled his sentencing for February 5, 2016, at 9:00 a.m.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service and U.S. Department of the Treasury – OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bryan E. Foreman, who is prosecuting the case.
Four New York Men Each Sentenced to More Than Eight Years in Prison for Armed Robberies of New York and New Jersey StoresRead the Press Release
TRENTON, N.J. – Four New York men were sentenced to prison for participating in the armed robberies of New York and New Jersey electronics stores, U.S. Attorney Paul J. Fishman announced.
Carl Williams, 32, of Brooklyn, New York, and Leonard Arrington, 29, of Roslyn Heights, New York, were sentenced today to 168 months and 102 months in prison, respectively. Terrell McQueen, 31, and Kajuan Crawley, 28, both of Brooklyn, were sentenced yesterday to 168 and 150 months in prison, respectively. U.S. District Judge Anne Thompson imposed all four sentences in Trenton federal court.
Carl Williams previously pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding indictment charging him with conspiracy to commit Hobbs Act robberies and brandishing a firearm in furtherance of a crime of violence. Arrington pleaded guilty before Judge Pisano to an information containing the same charges. McQueen and Crawley pleaded guilty before Judge Joel Pisano to separate superseding informations charging them each with one count of conspiracy to commit Hobbs Act robberies.
According to documents filed in this case and statements made in court:
From May 30, 2012, through Jan. 16, 2013, Carl Williams, Arrington, McQueen, Crawley and others conspired to commit a series of gunpoint electronic store robberies in New Jersey and New York. McQueen provided the firearms used in the New Jersey robberies, coordinated the resale of the stolen merchandise and distributed the profits from the robberies to the other perpetrators. During each robbery, conspirators would assign “look-outs” to remain outside while the rest of the group, armed with a gun, entered the store, locked the front doors, and tied-up employees and customers with zip ties.
Following the June 21, 2012, armed robbery of a Radio Shack in Rockville Center, New York, several conspirators, including Crawley, were apprehended by officers with the Nassau County Police Department, but Carl Williams, Arrington and others managed to escape. Afterwards, Carl Williams and Arrington robbed electronics stores in New Jersey.
On Sept. 20, 2012, Arrington, brandishing a firearm, walked into a T-Mobile store in Linden, New Jersey, with Carl Williams. Crawley, out on bail after his arrest following the June 21, 2012 robbery, served as a look-out. Arrington and Williams tied up the employees in the back of the store, stole approximately 50 to 60 cell phones and fled in a Land Rover. McQueen, Eric Williams, 34, of Brooklyn, and others then delivered the stolen phones to a cell phone store in Brooklyn.
On Oct. 2, 2012, Arrington, brandishing a firearm, entered a T-Mobile store in Woodbridge, New Jersey, with another man. After locking the front door, the men tied up the employees in the back of the store and stole approximately 40 cell phones. One of the robbers then called the getaway driver, who drove them away in a Land Rover. Afterwards, McQueen, Eric Williams and others delivered the stolen phones to the same Brooklyn store.
In addition to the prison terms, Judge Thompson sentenced Arrington to serve five years of supervised release. Carl Williams, McQueen and Crawley were each sentenced to three years of supervised release.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division.
Defense counsel:
Williams: Mark Berman Esq., River Edge, New Jersey
Arrington: Dennis Cleary Esq., Newark, New Jersey
McQueen: Anthony J. Pope Esq., Newark
Crawley: Maria Noto Esq., Matawan, New Jersey
Former Worcester Paramedic Sentenced for Stealing Fentanyl from AmbulanceRead the Press Release
BOSTON – A former paramedic was sentenced today in U.S. District Court in Worcester in connection with stealing Fentanyl, a Schedule II controlled substance, and then attempting to conceal her crime by replacing the Fentanyl with saline solution.
Teresa Torres, 42, who moved from Worcester to Sebring, Fla. after the offense, was sentenced by U.S. District Court Judge Timothy S. Hillman to 30 months in prison and three years of supervised release. In May 2015, Torres pleaded guilty to tampering with a consumer product, specifically vials containing the Schedule II controlled substance Fentanyl.
From November 2012 until February 2013, Torres worked as a paramedic for Vital Emergency Services in Worcester. Beginning around Nov. 19, 2012, and continuing through Jan. 26, 2013, Torres tampered with vials of Fentanyl by removing the narcotic from vials kept in the ambulances used by Vital Emergency Services and replacing it with another liquid. In total, Torres tampered with approximately 25 vials of Fentanyl. Fentanyl is commonly administered for pain relief. Torres was initially suspended from her paramedic job after it was discovered that she diverted morphine from ambulance supplies. The Fentanyl theft was discovered after she had been suspended.
The theft of a powerful opiate from an ambulance is plainly criminal, but what makes this tampering case particularly egregious is that patients in critical need of pain medication in emergencies are given saline instead of the necessary medication.
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, Boston Resident 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.
Former SSA Security Guard Admits to Stealing Electronics Worth over $74,000Read the Press Release
Baltimore, Maryland – Heath Unkart, age 26, of Hanover, Pennsylvania pleaded guilty today to theft of government property.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael McGill of the Social Security Administration (SSA) - Office of Inspector General, Philadelphia Field Division.
From August 2014 to July 2015, Unkart was a security guard at SSA headquarters in Woodlawn, Maryland. According to his agreement to plead guilty to the information, and had the case gone to trial, the government would have proven that Unkart stole electronic equipment, including Polycom audio/video units, an external hard drive, a projector, a camera and other items, from SSA headquarters while he was on duty. Unkart transported the equipment to his home and then placed many of the stolen items for sale on eBay.
For example, on March 30, 2015, Unkart sold three sets of stolen Polycom video conferencing equipment on eBay for $7,500 and on April 16, 2015, he sold an additional two sets of Polycom video conferencing equipment on eBay for $3,000.
On July 17, 2015, law enforcement agents executed a search warrant at Unkart’s home. They seized numerous items, including two external hard drives, a projector, a Polycom camera, and three additional sets of Polycom conferencing units, all of which were missing from the SSA headquarters campus. In total, approximately $74,296.40 in stolen SSA equipment was recovered.
Unkart faces a maximum sentence of 10 years in prison. U.S. District Judge J. Frederick Motz has scheduled sentencing for March 4, 2016 at 2:15 p.m.
United States Attorney Rod J. Rosenstein commended the SSA – OIG for its work in the investigation and thanked Special Assistant United States Attorney Lauren E. Perry, on detail from the Social Security Administration, who is prosecuting the case.
Former New York State Senator Thomas W. Libous Sentenced in White Plains Federal Court for Making False Statements to the FBIRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that New York State Senator THOMAS W. LIBOUS was sentenced to six months of house arrest for making false statements to the Federal Bureau of Investigation (“FBI”). LIBOUS was convicted on July 22, 2015, following a seven-day trial in White Plains federal court before the Hon. Vincent L. Briccetti, United States District Judge, who also imposed today’s sentence.
The evidence at trial proved that a federal grand jury in White Plains was investigating allegations that THOMAS LIBOUS had obtained a job for a his son Matthew Libous at a Westchester law firm (“the Law Firm”) in exchange for a promise to refer business to the firm, and had arranged for an Albany lobbying firm that regularly lobbied him to secretly pay the law firm $50,000 per year to defray the cost of Matthew Libous's salary and lease of a Range Rover. The lobbying firm specialized in transportation issues and THOMAS LIBOUS served as the Chairman of the Senate's Transportation Committee at the time. The evidence also showed that THOMAS LIBOUS told a partner of the Law Firm that the firm would have to “build a new wing” to accommodate the business he would refer to it if it hired the member of his family.
Special Agents of the FBI interviewed THOMAS LIBOUS on June 24, 2010, as part of the grand jury's investigation. The evidence at trial showed THOMAS LIBOUS made the following false statements to the agents during the interview:
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he could not recall how Matthew Libous began to work at the Law Firm;
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no deals were made to get Matthew Libous the job at the Law Firm;
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he was not aware that the lobbying firm had paid any part of Matthew Libous's salary at the Law Firm;
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he never promised to refer work to the Law Firm;
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he was not involved in Matthew Libous's decision to work at the Law Firm;
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he had no business or personal relationship with the Law Firm; and
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he did know of any relationship between the lobbying firm and the Law Firm.
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In imposing sentence, Judge Briccetti said LIBOUS’s conduct in lying to the FBI was “disgraceful” and took note of LIBOUS’s “total lack of remorse.” He called the monthly payments totaling $50,000 from the lobbying firm to the Law Firm the “elephant in the room” that LIBOUS had not explained. Judge Briccetti said that ordinarily he would have imposed a sentence of six months in prison but he declined to send LIBOUS to prison given his terminal medical condition.
In addition to the sentence of home confinement, LIBOUS, 62, of Binghamton, New York, was also sentenced to two years of supervised release and ordered to pay a fine of $50,000.
Mr. Bharara praised the investigative work of the FBI.
The prosecution is being handled by the Office's White Plains Division. Assistant U.S. Attorneys Benjamin R. Allee and James McMahon are in charge of the prosecution.
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Former Employee of the Scottsville Baptist Church Pleads Guilty to Embezzling More Than $270,000 to Pay for Personal ExpensesRead the Press Release
BOWLING GREEN, Ky. – United States Attorney John E. Kuhn, Jr. announced the guilty plea of an Allen County, Kentucky woman before U.S. Magistrate Judge H. Brent Brennenstuhl, yesterday, to three counts of wire fraud, for embezzling $274,846 from her former employer, the Scottsville Baptist Church.
According to the plea agreement, Patricia Barlow, age 49, was a secretary at the Scottsville Baptist Church (SBC), located at 301 East Main Street, in Scottsville, Kentucky, and on numerous occasions made unauthorized wire transfers to pay for personal expenses using SBC funds. The scheme to defraud SBC began in January of 2011, and lasted until SBC discovered the fraud in the spring of 2015. Three of the alleged wire transfers were made on January 1, 2007, in the amount of $512.29; January 14, 2011, in the amount of $1,400; and a wire transfer of $425.00 on January 28, 2015.
According to the plea agreement, at sentencing, Barlow will pay $274,846 in restitution, is liable to the court for a special assessment in the amount of $300 and the United States has agreed to recommend a sentence of imprisonment at the lowest end of the applicable guideline range.
Sentencing is scheduled before U.S. District Judge Greg N. Stivers on February 22, 2016, at 10:00am, in Bowling Green.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the United States Secret Service and Scottsville (Kentucky) Police Department.
Former Connecticut Resident Who Operated Investment Schemes Sentenced to 27 Months in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSEPH T. MORRIS, 52, of Fort Lauderdale, Fla., formerly of Connecticut, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in New Haven to 27 months of imprisonment, followed by three years of supervised release, for operating two investment schemes that defrauded individuals out of more than $200,000.
According to court documents and statements made in court, MORRIS and two other individuals formed a company in October 2011 to develop business opportunities in Iraq. The company’s initial focus was on establishing a pizza restaurant at the U.S. Consulate compound in Erbil, Iraq, and establishing a business to distribute and install specialty window film on vehicles and at hotels, residences, and government buildings, which would protect windows and windshields from blast and breakage, and provide heat retention, ultra-violet shielding, and privacy. MORRIS was the company’s in-country manager in Iraq.
MORRIS made numerous fraudulent representations to his co-founders regarding the restaurant and the window film business, knowing that the representations would be communicated to potential investors to induce them to invest in the company. Through the use of fraudulent emails and photographs, MORRIS falsely represented that a lease had been signed to establish a pizzeria on the U.S. consulate compound in Erbil, that renovations were underway, and that progress was being made toward completing renovations and opening the restaurant. MORRIS also falsely represented that the company had an exclusive arrangement with a specialty window film manufacturer to distribute and install the window film in all of Iraq. Based on these misrepresentations, MORRIS caused approximately a dozen investors, most of whom were U.S. military veterans, to invest approximately $175,000 in the company. Instead of using the money from investors to pay for legitimate business expenses, MORRIS diverted large sums of money for his own personal use.
The scheme was revealed in late April to early May 2012 when one of the co-founders discovered that the company did not have a lease or agreement to open and operate a pizza restaurant at the U.S. consulate compound in Erbil and that the company did not have an exclusive arrangement with a window film manufacturer to distribute and install specialty window film in Iraq.
Between May 2012 and December 2012, MORRIS also defrauded two individuals out of a total of approximately $20,000 in start-up money that they provided to MORRIS as part of a plan to create an air cargo company based in Ghana. Instead of using the funds for business expenses, MORRIS diverted large sums of money for his personal use.
As part of his sentence, MORRIS was ordered to pay restitution in the amount of $205,849.
MORRIS pleaded guilty to one count of wire fraud on June 9, 2015, and has been released on bond. He was ordered to report to prison on January 15, 2016.
This matter was investigated by the U.S. Secret Service, the Wilton Police Department and the Connecticut Financial Crimes Task Force, which includes federal, state and local law enforcement agencies. The case was prosecuted by Assistant U.S. Attorney Neeraj N. Patel.
Former California Attorney Pleads Guilty in International Investment Fraud SchemeRead the Press Release
A Las Vegas man pleaded guilty today to conspiracy for his role in an investment fraud scheme that promoted fraudulent investment opportunities and caused more than $5 million in losses to investors.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office made the announcement.
Joseph Micelli, 62, pleaded guilty before U.S. District Judge Kent J. Dawson of the District of Nevada to conspiracy to commit wire fraud and securities fraud. His sentencing is scheduled for Feb. 23, 2016.
As part of his plea, Micelli admitted that he conspired with others in the United States and Switzerland to promote investments and loan instruments that he knew to be fraudulent. The conspirators told victims that, for an up-front payment, a Swiss company known as the Malom Group A.G. would provide access to lucrative investment opportunities and substantial cash loans. In connection with his plea, Micelli admitted that he held himself out to investors as an attorney, when in fact he had lost his license to practice law. In addition, as part of an effort to defraud an investor who held an equity stake in a corporation that had filed for bankruptcy, Micelli submitted a sworn affidavit to the U.S. Bankruptcy Court for the District of New Hampshire, in which he made false statements about the Malom Group’s ability to provide financing to the debtors.
Five other defendants have been charged in the case and are awaiting trial or extradition.
The FBI’s Las Vegas Field Office investigated this case. Assistant Chief Brian R. Young and Trial Attorneys Melissa Aoyagi and Anna G. Kaminska of the Criminal Division’s Fraud Section prosecuted this case with assistance from the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the District of Nevada. The U.S. Securities and Exchange Commission’s Enforcement Division, which referred the matter to the Department of Justice and is conducting a parallel civil enforcement investigation, also provided valuable assistance.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Former Bricklayer’s Union Employee Pleads Guilty to Embezzling over $160,000 of Training FundsRead the Press Release
Oklahoma City, Oklahoma – Today, LAURA ANNE ROSS, 42, from Oklahoma City, pled guilty to embezzling over $160,000 from her employer, the Bricklayer’s International Union, Local 5, an Oklahoma City labor union that represents bricklayers and trowel trade workers from Oklahoma, Arkansas, and Texas, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Ross was indicted on September 15, 2015. Today, she changed her plea to guilty and admitted to Chief United States District Judge Vicki Miles-LaGrange that between April 17, 2012 and October 28, 2013, while employed by the Union, she improperly took $160,927.34 from a Joint Apprenticeship Trust Fund account that was used to train future Union members.
At sentencing, Ross faces up to five years in prison and a $250,000 fine. A sentencing hearing will be set by the court in approximately 90 days.
This case was investigated by the United States Department of Labor-Office of the Inspector General and was prosecuted by Assistant U.S. Attorneys Jessica Cardenas Jarvis and Mark A. Yancey.
Reference is made to court filings for further information.
Former Bank Employees Plea to Making False EntriesRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that yesterday in federal court, before Chief United States District Judge James C. Dever III, APRIL LYNN LOCKLEAR, 35, of Rowland, North Carolina and CHONA KAY OXENDINE, 32, of Shannon, North Carolina pleaded guilty to conspiracy to make false entries in bank records. The charge carries a maximum penalty of 5 years’ imprisonment, and a fine of $250,000.00.
On March 24, 2015, LOCKLEAR and OXENDINE were indicted by a federal grand jury on 16 counts related to crimes committed while they were employed by the Lumbee Guaranty Bank headquartered in Pembroke, North Carolina. During the course of an investigation into a bank robbery that occurred at the Lumbee Guaranty Bank branch in Red Springs, North Carolina on April 9, 2010, it was discovered that $500,000.00 was missing from the bank in addition to the money stolen during the robbery. The investigation quickly focused on LOCKLEAR and OXENDINE. When questioned by investigators, LOCKLEAR and OXENDINE claimed that they were robbed of $500,000.00 while working alone in the branch in 2009, but did not report the incident due to concerns for their safety. They admitted to falsifying a cash out ticket for the missing funds. A cash out/in ticket is a document that is created to post money into or out of an account, teller drawer or the vault so that it is electronically accounted for.
Investigation revealed that beginning in August 2009, LOCKLEAR and OXENDINE falsified bank entries, reports, and transactions by creating false tickets ranging from $150,000.00 to $500,000.00. These false tickets were created to throw off any audit that would have uncovered the missing money to make it look like money had left the bank. These false entries gave the appearance during an audit that the books were in balance, when in fact they were not.
Additional investigation into LOCKLEAR’S and OXENDINE’S personal bank accounts showed a high volume of unaccounted for cash deposits over several years.
Chief Judge Dever scheduled sentencing for the Court’s February 22, 2016 term of court.
The investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Felice M. Corpening represents the government.
Five People, including Two Doctors, Charged in Kickback Schemes Involving nearly $600 Million in Fraudulent Claims by SoCal HospitalsRead the Press Release
Santa Ana, California – In a series of related cases announced today, the former CFO of a Long Beach hospital, two orthopedic surgeons and two others have been charged in long-running health care fraud schemes that illegally referred thousands of patients for spinal surgeries and generated nearly $600 million in fraudulent billings over an eight-year period.
Two of the defendants have previously pleaded guilty, and three others have agreed to plead guilty in the coming weeks. All five have agreed to cooperate in the government’s ongoing investigation into kickbacks for patient referrals and fraudulent bills for spinal surgeries.
The schemes involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others. As a result of the illegal payments, thousands of patients were referred to Pacific Hospital in Long Beach, where they underwent spinal surgeries that led to more than $580 million in bills being fraudulently submitted during the last eight years of the scheme alone. Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government.
In a second, similar scheme – also involving spinal surgeries – doctors received illegal kickbacks for referrals to a Hawaiian Gardens hospital.
Today, federal prosecutors today filed two cases related to the scheme, and yesterday three other cases were unsealed by a federal judge. Those named in the cases are:
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James L. Canedo, 63, of San Pedro, the former chief financial officer of Pacific Hospital of Long Beach, who pleaded guilty on September 4 to a criminal information charging him with participating in a conspiracy that engaged in mail fraud, honest services fraud, money laundering, paying or receiving kickbacks in connection with a federal health care program, and violating the Travel Act (specifically, interstate travel in aid of a racketeering enterprise). The case against Canedo was unsealed yesterday by United States District Judge Josephine L. Staton, who is scheduled to sentence the defendant on June 17, 2016.
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Philip Sobol, 61, of Studio City, an orthopedic surgeon, who has agreed to plead guilty to conspiracy (to commit mail fraud, honest services fraud, and violations of the Travel Act) as well as a separate, substantive Travel Act violation. The information against Sobol and a related plea agreement were filed today in United States District Court, where the defendant is expected to be arraigned next month.
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Alan Ivar, 55, of Las Vegas, a chiropractor who formerly resided in San Juan Capistrano and owned several businesses based in Costa Mesa, was charged today in a criminal information that alleges one count of conspiracy (to commit mail fraud, honest services fraud, money laundering, and violations of the Travel Act). In a plea agreement also filed today, Ivar admitted that for well over a decade, he had an agreement with the owner of Pacific Hospital to refer patients in exchange for a monthly retainer. Ivar, who also has agreed to plead guilty, is expected to be arraigned next month.
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Paul Richard Randall, 56, of Orange, a health care marketer previously affiliated with Pacific Hospital and Tri-City Regional Medical Center in Hawaiian Gardens, who pleaded guilty on April 16, 2012 before Judge Staton to conspiracy to commit mail fraud. Randall, who admitted recruiting chiropractors and doctors to refer patients to Tri-City in exchange for kickbacks, is scheduled to be sentenced on April 8, 2016.
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Mitchell Cohen, 55, of Irvine, an orthopedic surgeon, was charged last week with filing a false tax return. Cohen, who in a plea agreement also filed on November 16 admits the he failed to report income received from kickback payments, is expected to be arraigned next month.
All five defendants have agreed to cooperate with the government’s ongoing investigation – dubbed “Operation Spinal Cap” – into the kickback schemes, which involved dozens of surgeons, orthopedic specialists, chiropractors, marketers and other medical professionals.
Under the terms of their plea agreements, Sobol faces a federal prison term of up to 10 years; Canedo, Ivar and Randall could be sentenced to as much as five years; and Cohen faces up to three years in prison on the tax charge. All defendants will be required to pay restitution to the victims of the scheme, which in Canedo’s case will be at least $20 million.
The former CEO and owner of Pacific Hospital of Long Beach, Michael D. Drobot, pleaded guilty in April 2014 to participating in the scheme (see: http://go.usa.gov/cjqtF). Drobot is also cooperating with the investigation.
As described in court documents, Drobot, who was the owner and/or CEO of Pacific Hospital of Long Beach until late 2013, ran a 15-year-long scheme in which he and others billed workers’ compensation insurers and the U.S. Department of Labor hundreds of millions of dollars for spinal surgeries and other procedures performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.
As part of the scheme, the conspirators typically paid a kickback of $15,000 for each lumbar fusion surgery and $10,000 for each cervical fusion surgery. Some of the patients lived hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities. The patients were not informed that medical professionals had been offered kickbacks to induce them to refer the surgeries to Pacific Hospital. From 2005 through 2013 (which is only part of the overall scheme), Pacific Hospital billed insurers more than $580 million for spinal surgeries on over 4,400 patients. Insurers paid the hospital more than $226 million for the surgeries performed as a result of illegal kickbacks.
“Health care fraud and kickback schemes burden our healthcare system, drive up insurance costs for everyone, and corrupt both the doctor-patient relationship and the medical profession itself,” said United States Attorney Eileen M. Decker. “The members of this scheme treated injured workers and their spines as commodities, to be traded away to the highest bidder. This investigation should send a message to the entire industry: patients are not for sale.”
The conspirators in the Pacific Hospital scheme concealed the kickback payments by entering into bogus contracts to provide a “cover story” for the doctors, chiropractors and others who received illegal payments. For example, a number of doctors entered into agreements with a Drobot-owned company, Pacific Specialty Physician Management (PSPM), under which the doctors received as much as $100,000 per month from PSPM in return for the right to purchase their medical practices – an option that was never exercised. PSPM paid some doctors inflated prices for the right to operate their practices and collect on their insurance claims. In still other cases, Pacific Hospital entered into contracts with doctors under which the doctors were to help the hospital collect on its surgery bills to insurance companies, but the hospital’s own collection staff, rather than the doctors, actually performed the collections work. Several doctors entered into lease agreements under which PSPM or Pacific Hospital paid rent for the use of office space, but rarely used the space. And other doctors had agreements to provide consulting services to Drobot’s companies, but did not actually provide the services. Still others, including marketers who introduced doctors to Pacific Hospital, had additional agreements with Drobot’s companies.
Canedo, as Pacific Hospital’s CFO from 1999 through October 2013, was responsible for tracking payments made directly to doctors by the hospital, as well as the number of patients each doctor referred to the hospital and the amounts the hospital collected for those patients’ procedures. Canedo also communicated directly with a number of the doctors regarding the payments and surgeries, and sometimes mediated disputes between different doctors who claimed credit for the same referrals.
Sobol, Ivar and Cohen each received, respectively, $5.2 million, $1.24 million, and $1.64 million in kickbacks. Together they referred more than 200 patients to Pacific Hospital.
“The defendants carried out this elaborate scheme by callously gathering patients, remaining indifferent to patient needs, and greedily lining their pockets with a cut of the cash from taxpayer-funded health care systems,” said David Bowdich, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The effort by investigators and prosecutors in this case cannot be overstated and, as it continues, will play a part in restoring confidence in the medical marketplace.”
Two other Drobot companies, California Pharmacy Management (CPM) and its successor, Industrial Pharmacy Management (IPM), were also important players in the scheme. Both companies set up and managed what were essentially mini-pharmacies within doctors’ offices. CPM and IPM bought and dispensed medication that the doctors prescribed to their patients, and these businesses received a portion of the money reimbursed by insurance companies for the medications. Drobot, along with others at CPM and IPM, often agreed to increase the doctors’ shares of the insurance claims in return for those doctors’ referral of patients to Pacific Hospital. In many cases, for doctors who made such referrals, the conspirators “advanced” payments from CPM and IPM before the companies had collected any money for the medications or even prescribed them, and often simply “wrote off” payments as losses when collections fell short.
“Injured workers were treated like livestock by doctors and hospitals who paid or accepted kickbacks and bribes in exchange for referrals,” said California Insurance Commissioner Dave Jones. “Injured workers are put at risk when their medical treatment is based on kickbacks and bribes instead of their medical needs. Detectives from the Department of Insurance worked closely with federal law enforcement agencies to investigate and expose this illegal conspiracy, which is one of the largest workers compensation insurance fraud cases we have ever seen.”
Randall, who also facilitated the Pacific Hospital scheme by introducing doctors to Drobot and coordinating kickback arrangements, pleaded guilty to participating in a separate, similar scheme involving Tri-City Regional Medical Center. According to his plea agreement, Randall acted as a “marketer” for Tri-City and conspired with hospital executives to pay kickbacks to doctors and chiropractors to refer workers’ compensation patients Tri-City for spinal surgeries. As in the Pacific Hospital scheme, the surgeries at Tri-City involved use of spinal surgery hardware that Randall distributed to Tri-City at inflated prices through his company Summit Medical Group, knowing that the cost would be passed on to insurers. Using proceeds from the sale of the hardware, Randall paid a 5 percent kickback to Tri-City and kickbacks of up to $20,000 per surgery to the doctors and chiropractors who referred the patients. In addition, though a separate company, Platinum Medical, Randall paid kickbacks to doctors in return for referrals of patients for toxicology tests. The scheme resulted in several million dollars in losses to insurers.
“Medical referrals should be based on what’s best for the patient – not what’s best for the doctor’s bank account,” said IRS-Criminal Investigation Special Agent in Charge Erick Martinez. “In paying the kickbacks and submitting the resulting claims for spinal surgeries and medical services, the defendants acted with the intent to defraud workers’ compensation insurance carriers and to deprive the patients of their right to honest services.”
Tom Frost, Special Agent in Charge with the Postal Service Office of Inspector General, stated: “We are committed to preserving Postal Service resources by vigorously investigating allegations of fraud and corruption. We are grateful for the efforts of the U.S. Attorney’s Office and our State and Federal partners in this investigation.”
The ongoing investigation into abuses involving the spinal pass-through law and kickbacks paid for spinal surgery patients is being conducted by the Federal Bureau of Investigation; the United States Postal Service, Office of Inspector General; IRS Criminal Investigation; and the California Department of Insurance.
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Five Individuals, Including Two Doctors, Charged in Kickback Schemes Involving nearly $600 Million in Fraudulent Claims by Southern California HospitalsRead the Press Release
Former Hospital Executive, Doctors and Two Others Admit Roles; Agree to Cooperate
In a series of related cases announced today, the former chief financial officer (CFO) of a Long Beach, California, hospital, two orthopedic surgeons and two others have been charged in long-running health care fraud schemes that illegally referred thousands of patients for spinal surgeries and generated nearly $600 million in fraudulent billings over an eight-year period.
Two of the defendants have pleaded guilty and three others have agreed to plead guilty in the coming weeks. All five defendants have agreed to cooperate in the government’s ongoing investigation into kickbacks for patient referrals and fraudulent bills for spinal surgeries.
The schemes involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others. As a result of the illegal payments, thousands of patients were referred to Pacific Hospital in Long Beach, where they underwent spinal surgeries that led to more than $580 million in bills being fraudulently submitted during the last eight years of the scheme alone. Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government.
In a second, similar scheme that also involved spinal surgeries, doctors received illegal kickbacks for referrals to a Hawaiian Gardens hospital.
Today, federal prosecutors today filed two cases related to the scheme, and yesterday three other cases were unsealed by a federal judge. Those named in the cases are:
- James L. Canedo, 63, of San Pedro, California, the former CFO of Pacific Hospital in Long Beach, who pleaded guilty on Sept. 4 to a criminal information charging him with participating in a conspiracy that engaged in mail fraud, honest services fraud, money laundering, paying or receiving kickbacks in connection with a federal health care program and violating the Travel Act, specifically, interstate travel in aid of a racketeering enterprise. The case against Canedo was unsealed yesterday by U.S. District Judge Josephine L. Staton of the Central District of California, who is scheduled to sentence the defendant on June 17, 2016.
- Philip Sobol, 61, of Studio City, California, an orthopedic surgeon who has agreed to plead guilty to conspiracy to commit mail fraud, honest services fraud and violations of the Travel Act; as well as a separate, substantive Travel Act violation. The information against Sobol and a related plea agreement were filed today in U.S. District Court, where the defendant is expected to be arraigned next month.
- Alan Ivar, 55, of Las Vegas, a chiropractor who formerly resided in San Juan Capistrano, California, and owned several businesses based in Costa Mesa, California, was charged today in a criminal information that alleges one count of conspiracy to commit mail fraud, honest services fraud, money laundering and violations of the Travel Act. In a plea agreement also filed today, Ivar admitted that for well over a decade, he had an agreement with the owner of Pacific Hospital to refer patients in exchange for a monthly retainer. Ivar, who also agreed to plead guilty, is expected to be arraigned next month.
- Paul Richard Randall, 56, of Orange, California, a health care marketer previously affiliated with Pacific Hospital and Tri-City Regional Medical Center in Hawaiian Gardens, pleaded guilty on April 16, 2012, before Judge Staton to conspiracy to commit mail fraud. Randall, who admitted recruiting chiropractors and doctors to refer patients to Tri-City in exchange for kickbacks, is scheduled to be sentenced on April 8, 2016.
- Mitchell Cohen, 55, of Irvine, California, an orthopedic surgeon, was charged last week with filing a false tax return. Cohen admits in a plea agreement filed on Nov. 16 admits the he failed to report income received from kickback payments and is expected to be arraigned next month.
All five defendants have agreed to cooperate with the government’s ongoing investigation, dubbed “Operation Spinal Cap,” into the kickback schemes, which involved dozens of surgeons, orthopedic specialists, chiropractors, marketers and other medical professionals.
Under the terms of their plea agreements, Sobol faces a federal prison term of up to 10 years; Canedo, Ivar and Randall face up to five years in prison; and Cohen faces up to three years in prison on the tax charge. All of the defendants will be required to pay restitution to the victims of the scheme, which in Canedo’s case will be at least $20 million.
In April 2014, Michael D. Drobot, the former CEO and owner of Pacific Hospital of Long Beach, pleaded guilty to participating in the scheme and is also cooperating with the investigation.
As described in court documents, Drobot, who was the owner and/or CEO of Pacific Hospital of Long Beach until late 2013, ran a 15-year-long scheme in which he and others billed workers’ compensation insurers and the U.S. Department of Labor hundreds of millions of dollars for spinal surgeries and other procedures performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.
As part of the scheme, the conspirators typically paid a kickback of $15,000 for each lumbar fusion surgery and $10,000 for each cervical fusion surgery. Some of the patients lived hundreds of miles away from Pacific Hospital and closer to other qualified medical facilities. The patients were not informed that medical professionals had been offered kickbacks to induce them to refer the surgeries to Pacific Hospital. From 2005 through 2013, only part of the overall scheme, Pacific Hospital billed insurers more than $580 million for spinal surgeries on more than 4,400 patients. Insurers paid the hospital more than $226 million for the surgeries performed as a result of illegal kickbacks.
“Health care fraud and kickback schemes burden our healthcare system, drive up insurance costs for everyone, and corrupt both the doctor-patient relationship and the medical profession itself,” said U.S. Attorney Eileen M. Decker of the Central District of California. “The members of this scheme treated injured workers and their spines as commodities, to be traded away to the highest bidder. This investigation should send a message to the entire industry: patients are not for sale.”
The conspirators in the Pacific Hospital scheme concealed the kickback payments by entering into bogus contracts to provide a “cover story” for the doctors, chiropractors and others who received illegal payments. For example, a number of doctors entered into agreements with a Pacific Specialty Physician Management (PSPM), a company owned by Drobot, under which the doctors received as much as $100,000 per month from PSPM in return for the right to purchase their medical practices – an option that was never exercised. PSPM paid some doctors inflated prices for the right to operate their practices and collect on their insurance claims. In still other cases, Pacific Hospital entered into contracts with doctors under which the doctors were to help the hospital collect on its surgery bills to insurance companies, but the hospital’s own collection staff, rather than the doctors, actually performed the collections work. Several doctors entered into lease agreements under which PSPM or Pacific Hospital paid rent for the use of office space, but rarely used the space. And other doctors had agreements to provide consulting services to Drobot’s companies, but did not actually provide the services. Still others, including marketers who introduced doctors to Pacific Hospital, had additional agreements with Drobot’s companies.
Canedo, as Pacific Hospital’s CFO from 1999 through October 2013, was responsible for tracking payments made directly to doctors by the hospital, as well as the number of patients each doctor referred to the hospital and the amounts the hospital collected for those patients’ procedures. Canedo also communicated directly with a number of the doctors regarding the payments and surgeries, and sometimes mediated disputes between different doctors who claimed credit for the same referrals.
Sobol, Ivar and Cohen each received, respectively, $5.2 million, $1.24 million and $1.64 million in kickbacks. Together they referred more than 200 patients to Pacific Hospital.
“The defendants carried out this elaborate scheme by callously gathering patients, remaining indifferent to patient needs, and greedily lining their pockets with a cut of the cash from taxpayer-funded health care systems,” said Assistant Director in Charge David Bowdich of the FBI's Los Angeles Field Office. “The effort by investigators and prosecutors in this case cannot be overstated and, as it continues, will play a part in restoring confidence in the medical marketplace.”
Two other Drobot companies, California Pharmacy Management (CPM) and its successor, Industrial Pharmacy Management (IPM), were also important players in the scheme. Both companies set up and managed what were essentially mini-pharmacies within doctors’ offices. CPM and IPM bought and dispensed medication that the doctors prescribed to their patients, and these businesses received a portion of the money reimbursed by insurance companies for the medications. Drobot, along with others at CPM and IPM, often agreed to increase the doctors’ shares of the insurance claims in return for those doctors’ referral of patients to Pacific Hospital. In many cases, for doctors who made such referrals, the conspirators “advanced” payments from CPM and IPM before the companies had collected any money for the medications or even prescribed them, and often simply “wrote off” payments as losses when collections fell short.
“Injured workers were treated like livestock by doctors and hospitals who paid or accepted kickbacks and bribes in exchange for referrals,” said California Insurance Commissioner Dave Jones. “Injured workers are put at risk when their medical treatment is based on kickbacks and bribes instead of their medical needs. Detectives from the Department of Insurance worked closely with federal law enforcement agencies to investigate and expose this illegal conspiracy, which is one of the largest workers compensation insurance fraud cases we have ever seen.”
Randall, who also facilitated the Pacific Hospital scheme by introducing doctors to Drobot and coordinating kickback arrangements, pleaded guilty to participating in a separate, similar scheme involving Tri-City Regional Medical Center. According to his plea agreement, Randall acted as a “marketer” for Tri-City and conspired with hospital executives to pay kickbacks to doctors and chiropractors to refer workers’ compensation patients Tri-City for spinal surgeries. As in the Pacific Hospital scheme, the surgeries at Tri-City involved use of spinal surgery hardware that Randall distributed to Tri-City at inflated prices through his company Summit Medical Group, knowing that the cost would be passed on to insurers. Using proceeds from the sale of the hardware, Randall paid a 5 percent kickback to Tri-City and kickbacks of up to $20,000 per surgery to the doctors and chiropractors who referred the patients. In addition, Randall paid kickbacks to doctors in return for referrals of patients for toxicology tests though a separate company, Platinum Medical. The scheme resulted in several million dollars in losses to insurers.
“Medical referrals should be based on what’s best for the patient – not what’s best for the doctor’s bank account,” said Special Agent in Charge Erick Martinez of IRS-Criminal Investigation (CI). “In paying the kickbacks and submitting the resulting claims for spinal surgeries and medical services, the defendants acted with the intent to defraud workers’ compensation insurance carriers and to deprive the patients of their right to honest services.”
“We are committed to preserving Postal Service resources by vigorously investigating allegations of fraud and corruption,” said Special Agent in Charge Tom Frost of the U.S. Postal Service’s Office of Inspector General (USPS OIG). “We are grateful for the efforts of the U.S. Attorney’s Office and our State and Federal partners in this investigation.”
The ongoing investigation into abuses involving the spinal pass-through law and kickbacks paid for spinal surgery patients is being conducted by the FBI, the USPS OIG, IRS-CI and the California Department of Insurance.
FastTrain Owner and Admissions Representative Convicted of Federal Student Aid SchemeRead the Press Release
Following a 23-day trial before United States District Court Judge Joan A. Lenard, a jury convicted Alejandro Amor, the owner of a Florida for-profit college called FastTrain, of one count of conspiracy to steal government money and twelve substantive counts of theft of government money. FastTrain admissions representative Anthony Mincey was also convicted of conspiracy to steal government money.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Yessyka Santana, Special Agent in Charge, Department of Education, Office of Inspector General (ED-OIG) and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
According to evidence presented at trial, starting in 2010, FastTrain admissions representatives, acting at the direction of Alejandro Amor, began recruiting potential students in low income neighborhoods in Miami-Dade, Broward, Hillsborough, Pinellas, and Duval Counties, where FastTrain’s seven campuses were located. When admissions representatives encountered potential students who were ineligible for federal student aid because they had not graduated from high school or earned a GED, the admissions representatives enrolled the potential students anyway, and coached them to lie on their applications to the United States Department of Education for federal student aid, including federal Pell Grants and Direct Loans. Often, FastTrain admissions representatives falsely promised the students they could earn their high school diplomas or GEDs at FastTrain and in some cases, FastTrain admissions representatives actually created fictitious high school diplomas on FastTrain computers. Six student witnesses identified Anthony Mincey as the admissions representative who had coached them to lie about their eligibility.
Once the applications for federal student aid had been processed, millions of dollars in Pell Grants and Direct Loans were disbursed to FastTrain bank accounts controlled by Alejandro Amor and his wife. Alejandro Amor used those funds to make payments on, among other things, his waterfront home, airplane, car, and yacht.
According to the testimony and evidence introduced at trial, Alejandro Amor routinely falsified student records, emails, policy memoranda, and reports of internal investigations to hide the actions of his admissions representatives and retain federal student aid on behalf of the ineligible students enrolled at FastTrain. In one instance, Alejandro Amor created a fictitious disciplinary record for an admissions representative who had been caught coaching students to lie about their eligibility, before sending that admissions representative back out onto the streets to continue recruiting.
Alejandro Amor is scheduled to be sentenced by Judge Lenard on February 3, 2016, at 3:00 p.m. Anthony Mincey is scheduled to be sentenced by Judge Lenard on February 3, 2016, at 3:30 p.m.
Mr. Ferrer commended the investigative efforts of ED-OIG and the FBI. The case is being prosecuted by Assistant United States Attorneys Amanda Perwin and Vanessa Snyder.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Erik D. Harbin Sentenced to 117 Months ImprisonmentRead the Press Release
SOUTH BEND – United States Attorney for the Northern District of Indiana, David Capp, announced that Erik D. Harbin, age 30, of Mishawaka, Indiana was sentenced on Monday, November 23, 2015, in federal court by Judge Robert L. Miller, Jr., after his guilty plea of being a felon in possession of a firearm.
According to documents in the case, on March 17, 2015, the Mishawaka Police Department received a 911 call from a citizen reporting what appeared to be an armed kidnapping of a female in Mishawaka, Indiana. Mishawaka Police, while responding to the area of the call, located a vehicle matching the description of the vehicle given by the caller and observed two people in the front seat and a female passenger in the rear seat. The police conducted a felony stop on the vehicle. After identifying the passengers in the vehicle, a victim was identified along with the driver of the vehicle and Harbin. While being escorted to the police vehicle for questioning, Harbin yelled to the driver, “Don’t let them search the car.” The driver gave police consent to search and the police recovered a .380 caliber firearm which was in the location where Harbin was sitting. The victim had reported that Harbin had been carrying a firearm in the weeks prior to this incident.
Harbin was sentenced to 117 months imprisonment and 3 years supervised release. Harbin’s lengthy criminal history was a factor to him being sentenced close to the maximum statutory sentence of 120 months for being a felon in possession of a firearm.
This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives in coordination with the Mishawaka Police Department. The case was handled by the Assistant United States Attorney Jesse M. Barrett.
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Englewood Convicted Felon Indicted for Possessing A FirearmRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Ernest L. Chambliss (44, Englewood) with possession of a firearm by a convicted felon. Chambliss has been charged as an Armed Career Criminal and faces a mandatory minimum penalty of 15 years, up to life, in federal prison. The indictment also notifies him that the United States intends to forfeit the firearm used in the offense.
According to the indictment, Chambliss possessed a 9 millimeter pistol on or about April 16, 2015. Prior to the incident, he was previously convicted of cocaine trafficking, resisting an officer with violence, and battery on a law enforcement officer and therefore was prohibited from possessing a firearm or ammunition under federal law.
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 Bureau of Alcohol, Tobacco, Firearms and Explosives and the Sarasota County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Gregory T. Nolan.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Regina Lombardo, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violence in our communities.
Eagan Man Charged with Using Social Media to Create and Distribute Child Pornography of High-School StudentsRead the Press Release
United States Attorney Andrew M. Luger today announced a federal criminal complaint charging ANTON MARTYNENKO, 32, with production, advertising, receipt and possession of child pornography. MARTYNENKO was arrested on November 20, 2015, and made an initial appearance yesterday in U.S. District Court in Minneapolis, Minn., before Magistrate Judge Janie S. Mayeron.
“The defendant in this case is charged with using social media to contact teenagers and convince them to create child pornography,” said U.S. Attorney Luger. “I urge teenagers and young adults to be particularly cautious and highly skeptical when encountering strangers online. Unfortunately, there are far too many people who seek to take advantage of and harm our youth over the internet. We will continue to do all we can to stop them.”
According to the criminal complaint and documents filed in court, beginning in at least 2011, ANTON MARTYNENKO created and used various false aliases including “Marie Anna,” “Courtney Jansgen,” and “Marie94mn,” on social media outlets for the purpose of obtaining nude and sexually explicit images and videos of minor males. MARTYENKO created different cover stories, including that he (posing as a woman) had recently moved to Minnesota and was trying to make new friends, that he worked for a nude modeling agency, or that he was a college student at the University of Minnesota. MARTYENKO would engage in sexual conversations with victims and eventually ask for nude images and/or video of the minor male victims.
According to the criminal complaint and documents filed in court, in approximately 2012, MARTYNENKO contacted a victim using the “Marie Anna” handle and claimed to be a woman who recently moved to Minnesota from Illinois who was looking to meet new people. MARTYENKO told the victim that he was handsome and quickly moved to suggesting they exchange nude photographs. MARTYENKO sent pictures to the victim of a nude female, which “Marie Anna” claimed were of herself. The victim then sent nude pictures of himself to “Marie Anna” via social media. MARTYENKO, still using the handle, “Marie Anna,” demanded more photos of the victim, but the victim stopped responding to the messages when he because suspicious of “Marie Anna.” MARTYENKO then threatened to distribute the victim’s nude photographs if the victim did not send more. About one year later, the victim learned that his pictures were being distributed via social media.
According to the criminal complaint and documents filed in court, on October 2, 2015, law enforcement executed a search warrant at MARTYENKO’s Eagan home. Officers discovered several flash drives and other electronic items hidden in the ceiling tiles of one room, along with a shoebox containing a collection of “commercial pornography” involving young men. Law enforcement seized thousands of images of naked teenagers and young men, which were sorted by name, age and hometown. Some photos also included the name of the high school of the victim portrayed.
This case is the result of an investigation conducted by the FBI, Minneapolis Police Department and Rosemount Police Department.This case is being prosecuted by Assistant United States Attorney Carol M. Kayser.
Defendant Information:ANTON MARTYNENKO, 32
Eagan, Minn.Charges:
- Production of child pornography, 2 counts
- Advertising child pornography, 1 count
- Receipt of child pornography, 3 counts
- Possession of child pornography, 1 count
Doroteo Manuel Ponce and Gilbert Navarro Sentenced to Prison for Drug Trafficking and Money LaunderingRead the Press Release
United States Attorney Deborah R. Gilg announced that Doroteo Manual Ponce, who is 35 years old and from Omaha, Nebraska, was sentenced on November 18, 2015 to a term of 262 months (21.8 years) imprisonment, to be followed by a term of 5 years of supervised release. Ponce pleaded guilty on August 27, 2015 to conspiracy to distribute 50 grams or more of pure methamphetamine, and two counts of conspiracy to commit money laundering. Testimony at Ponce’s sentencing hearing revealed that Ponce arranged for large quantities of methamphetamine to be shipped to the Omaha area, and that Ponce would then distribute that methamphetamine to others in the Lincoln, Council Bluffs and Omaha areas. Ponce qualified for an enhancement in his sentence because of his leadership role in the offense, and there was testimony that Ponce had one person who worked for Ponce as an employee in Ponce’s drug trafficking business. At times, Ponce also directed others to deposit monetary proceeds from drug trafficking into various bank accounts in order to funnel that money back to Ponce’s suppliers to pay for the drugs.
Gilbert Navarro, who is 42 years old and from Omaha, Nebraska, was a codefendant with Doroteo Ponce. On April 7, 2015, Navarro pleaded guilty to conspiracy to distribute 50 kilograms or more of marijuana and conspiracy to commit money laundering. On November 17, 2015, Navarro was sentenced to a term of 60 months (5 years) imprisonment, to be followed by 4 years of supervised release. Evidence at Navarro’s sentencing hearing showed that in early 2014, a semi-truck containing somewhere between 1,500 pounds and 2,500 pounds of marijuana was delivered to the Omaha area. The truck was also hauling eggplants to help conceal the marijuana. Navarro arranged for the use of a storage facility to unload the marijuana. Navarro, who owned Navarro Construction, used a forklift from his business to help unload the marijuana, and at times used company trucks in delivering the marijuana to his customers. Navarro and Ponce owed approximately $1,000,000 to Ponce’s suppliers for the marijuana, and they worked together on selling the marijuana in the months after it was delivered. When police executed a search warrant at a residence in Council Bluffs, Iowa in May of 2014, they recovered approximately $160,000 of United States currency. Most of that money was proceeds from Navarro’s marijuana sales, and was to be delivered to Ponce’s suppliers as a partial payment for the marijuana.
In addition to selling marijuana, Navarro also purchased a 2014 Ram 1500 pickup truck in the name of one of his companies, “D.N. Inc.” Ponce, whose primary source of income was from drug trafficking, wished to purchase a vehicle. Because Ponce would not be able to obtain financing for the vehicle given his illegal occupation, Ponce and Navarro reached an agreement or understanding that Navarro would purchase the vehicle for Ponce and finance the vehicle. Ponce agreed to make payments to Navarro for the pickup truck, and the truck was then used exclusively by Ponce.
The Honorable Joseph F. Bataillon, Senior United States District Court Judge, presided over the hearings in Ponce and Navarro’s case.
This case was investigated by the Greater Omaha Safe Streets Task Force, the Federal Bureau of Investigation, IRS Criminal Investigation, and the Drug Enforcement Administration. The Greater Omaha Safe Streets Task Force is comprised of the following agencies: The Omaha Police Department, The Bellevue Police Department, The LaVista Police Department, The Council Bluffs Police Department, The Douglas County Sheriff’s Office, and The Nebraska State Patrol.
Don’t Flush; Drop Them Off. Medicines Can Kill!Read the Press Release
CEDAR RAPIDS – The Eastern Iowa Heroin Prevention/ Treatment/ Enforcement Initiative is a partnership between the Cedar Rapids Police Department and the United States Attorney’s Office in Cedar Rapids. The goal of the initiative is to stem the tide of heroin supply and use affecting Eastern Iowa. It is widely accepted that the goal cannot be reached by solely focusing on prosecuting drug traffickers. Prevention and treatment efforts must also be enhanced and engaged to reduce the demand for highly addictive and dangerous opioids.
The Eastern Iowa Heroin Initiative operates with funding from the Midwest High Intensity Drug Trafficking Area (HIDTA), which secured funding to dedicate a police officer to coordinate regional partnerships.
Federal, State and local law enforcement are working with medical, prevention, treatment and public health leaders to encourage Iowa families to clean out medicine cabinets and safely rid their homes of unwanted and expired prescription medications. Unused prescription drugs in homes create a public health and safety concern because the medications can be accidentally ingested, stolen, misused, and abused. Drop-off boxes provide a safe, convenient, and responsible means of prescription drug disposal.
The Johnson County Sheriff’s Office together with the Coralville, University Heights and Waterloo Police Departments join in this effort by offering drop-off boxes at their locations, which will be securely maintained and available to the public around the clock. There are two webpage links that can be used to search for the nearest law enforcement based drop-box. The National Association of Drug Diversion Investigators webpage can be found at: http://rxdrugdropbox.org/. The Iowa Governor’s Office of Drug Control Policy features a map of sites and can be accessed at: http://www.iowa.gov/odcp/drug_information/takebacks.html. The goal is to have one box in every Iowa County.
Why Are Drop-Off Boxes Important?
The most recent National Survey on Drug Use and Health shows prescription medicines to be the most abused drugs by Americans other than marijuana. Seven of the 10 drugs most commonly abused by teenagers are prescription medicines. One in 10 teens has used Vicodin non-medically. Almost three-fourths of teen prescription drug abusers get the drugs from family and friends. The home medicine cabinet is a major source. These medicines should not be thrown in the trash where others can find them.
Prescription drugs containing controlled substances are being misused and abused at alarming rates in America today, leading to cases of accidental poisoning, overdose, and addiction. A major factor contributing to their increased usage is their availability in the home medicine cabinet. In many cases, medicines containing controlled substances remain in the home medicine cabinet long after therapy has been completed, thus making these drugs easily accessible to others who would misuse or abuse them.
Why? Two-thirds of all teenagers who abuse prescription narcotics first obtain the drugs from family and friends. Parents and grandparents can help keep their kids safe. Start by assessing and securing the prescription narcotics in your home. Unneeded prescription narcotics should be disposed of in a safe manner and parents need to talk with their kids about the dangers of abusing prescription narcotics.
“We are urging all Iowans to safely dispose of prescription drugs. When prescription drugs, especially opiates, fall into the wrong hands, they are extremely dangerous and even deadly,” said United States Attorney Northern District of Iowa, Kevin W. Techau. “That's why we are urging the public to take some time to sort through their medicine cabinets and safely dispose of any unneeded medications at nearby take-back locations as soon as possible.”
Drop boxes are free, and the program is entirely anonymous. The public is urged to turn in their unused, unwanted, unneeded medicine, no questions asked.
Only pills and other solid prescriptions, such as patches, can be disposed of at a collection site. Liquids and needles will not be accepted
To learn more about local initiatives to combat the drug threat go to Eastern Iowa Heroin Initiative on Facebook. A list of area drop-boxes is attached. area_drop-box_locations.pdf (61.6 KB)
Special thanks to the Johnson County Postmaster, Stacy St. John, for donating four unused mailboxes for this purpose along with Banacom Signs & Designs for the graphic work, and Cassill Collison Center for painting the boxes.
Follow us on Twitter @USAO_NDIA.
Disbarred New York Attorney Found Guilty of Fraudulent Ticket Resale and Real Estate Investment Schemes, Money LaunderingRead the Press Release
NEWARK, N.J. – A disbarred New York attorney was convicted today by a federal jury for his role in a ticket resale fraud scheme and a real estate investment fraud conspiracy that bilked multiple victims out of more than $3 million from 2011 to the present, U.S. Attorney Paul J. Fishman announced.
Pasquale Stiso, a/k/a “Pat Stiso,” 55, of New Rochelle, New York, was convicted of all ten counts of a superseding indictment charging him with one count of conspiracy to commit wire fraud, six substantive counts of wire fraud, and three counts of money laundering. He was convicted following a seven-day trial before U.S. District Judge William J. Martini in Newark federal court. The jury deliberated for 90 minutes before returning the verdict.
According to documents filed in this case and evidence at trial:
Since 2011, co-defendant Paul Mancuso, 49, of Glen Rock, New Jersey, held himself out as an investor, broker, and developer of various purported investments. Mancuso obtained from his victims substantial investments for various projects that, in fact, either did not exist at all or in which Mancuso had no actual involvement. Stiso held himself out as an individual who was working with Mancuso on various purported projects. Many of the victims of Stiso and Mancuso’s schemes lost all or substantially all of the money they invested with Mancuso and Stiso. Many even lost all or most of their life savings.
Stiso and Mancuso falsely represented to some victims that they would purchase event tickets, such as tickets to New York Giants football games, New York Yankees playoff games, the Super Bowl, and other sporting events and concerts, at a lower or wholesale rate, and then resell them to members of the public at an inflated rate, creating profits for their investors. In reality, Stiso and Mancuso did not buy tickets with their victims’ money.
In one of the real estate schemes, Stiso and Mancuso falsely represented to victims that they were investors in a real estate development project in Valley Cottage, New York, and that investor money would be used to purchase an interest in real property. The real property interest would then be resold at an increased price, creating profits for their investors. In reality, Stiso and Mancuso did not invest in any such real estate project with their victims’ money. Instead, they engaged in monetary transactions designed to funnel, and in many instances launder, the victims’ investments for their own benefit, including paying illegal gambling debts and money owed to loan sharks. Stiso and Mancuso were heavily involved in illegal gambling pursuits and both owed substantial sums of money to loan sharks and one of their bookmakers.
The charge of wire fraud conspiracy and the substantive counts of wire fraud each carry a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Each money laundering count carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Stiso’s sentencing is scheduled for March 3, 2016.
Mancuso previously pleaded guilty in federal court to conspiring with Stiso to commit wire fraud and is scheduled for sentencing on Jan 12, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and criminal investigators of the U.S. Attorney’s Office with the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Anthony J. Mahajan of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Henry E. Klingeman Esq., Newark
Ernesto Cerimele Esq., Newark
Denver Resident Sentenced to Federal Prison for Escape and Failure to Register as a Sex OffenderRead the Press Release
DENVER – Eric Eugene Hartwell, age 53, of Denver, Colorado, was sentenced last Friday U.S. District Court Judge Philip A. Brimmer to serve 120 months (10 years) in federal prison, followed by 5 years on supervised release for escape and failure to register as a sex offender, U.S. Attorney John Walsh and U.S. Marshal Ken Deal announced. The sentence is the result of a guilty verdict following a four-day jury trial. The jury deliberated for approximately over two hours before reaching their verdicts. Hartwell, who was in custody, was remanded at the conclusion of the hearing. The defendant was indicted by a federal grand jury in Denver on July 22, 2014, and found guilty following the jury trial on August 13, 2015.
According to facts presented to the jury during trial, as well as from the Sentencing Statement filed by the prosecution, Hartwell was convicted on March 19, 2010, in U.S. District Court for the Northern District of Texas for failure to register as a sex offender. As a result of this conviction, he was sentenced to a 60-month term of imprisonment and ordered to serve a life time of supervised release. After Hartwell served his federal prison sentence, he was transferred to Colorado to begin his term of supervised release and to begin a term of parole in conjunction with a 2011 Colorado Failure to Cancel Registration conviction. On January 6, 2014, during a meeting with a Senior U.S. Probation Officer, the defendant was provided information in relation to his federal supervised release requirements, both verbally and in writing, including his sex offender registration requirements. He signed an acknowledgement that he understood the conditions of his federal supervision, including that he was required to “register with state and local law enforcement as directed by the U.S. Probation Officer in each jurisdiction where the defendant resides, is employed, or is a student” and that he was required “no later than 3 business days after each change of name, residence, employment, or student status, appear in person in at least one jurisdiction and inform that jurisdiction of all changes in the information required in the sex offender registry.”
Additional conditions of federal supervised release included that the defendant was required to reside in a halfway house. Hartwell began residing at a residential reentry center in Denver on January 22, 2014. He updated his sex offender registration as required on January 24, 2014, to reflect his change of residence to the halfway house. On February 21, 2014, Hartwell packed his personal items and departed the halfway house without permission. A state warrant was issued in Colorado and a federal warrant was issued by the Northern District of Texas. The U.S. Marshal Service Violent Offender Task Force (COVOTF) conducted an investigation to locate Hartwell. It was confirmed that the defendant, who originally reserved his travel using the name “John Miller,” purchased an Amtrak train ticket from Denver, Colorado, to Chicago, Illinois on February 21, 2014. On that same day and before purchasing the Amtrak ticket, the defendant withdrew $3,600 from an ATM in Denver and removed and discarded a GPS-tracking ankle monitor that he was required to wear as a condition of his Colorado state-parole.
The U.S. Marshal’s investigation revealed that on February 27, 2014, Hartwell withdrew $503 from his bank account, leaving a balance of $5.87 in that account, from an ATM in Washington, DC. He then traveled on the Greyhound Bus Line under the name “John Miller” from Washington, DC to Norfolk, Virginia. On February 28, 2014, Hartwell was arrested after he was located by the U.S. Marshals in a motel in Norfolk, Virginia. The prosecution proved that on February 21, 2014, the defendant escaped the halfway house at which he was registered in Colorado, and, as of February 28, 2014, he had failed to register as a sex offender or update his sex offender registration in Colorado or any other state.
One of the factors for the lengthy sentence was the defendant’s previous criminal history. In addition to the convictions noted above, Hartwell was convicted on September 11, 1991, of the felony of Rape of a Child in the First Degree in the Snohomish County Superior Court in the state of Washington. The conviction was a result of Hartwell having sexual contact with a six-year-old child in his neighborhood. Hartwell was also convicted on September 1, 1996, of Attempted Indecent Liberties and Sex Offender Failure to Register in the Skagit County Superior Court in the state of Washington. This conviction was a result of Hartwell picking up a pregnant teenage hitchhiker and telling her that he was going to rape her; she was able to escape from the car after fighting him off. This is the Hartwell’s fifth conviction for an offense involving the failure to register as a sex offender.
“Defendant Hartwell had a history of being a child sex predator,” said U.S. Attorney John Walsh. “Thanks to the hard work of the U.S. Marshals Service, and their Violent Offender Task Force, Hartwell was found after leaving a halfway house and failing to register as a sex offender.”
This case was investigated by the U.S. Marshals Service, including the U.S. Marshals Service Violent Offender Task Force.
Hartwell is being prosecuted by Assistant U.S. Attorneys David Tonini and Alecia Riewerts.
Clayton Man Sentenced to 15 Years After Guilty Plea to Felon in Possession of A Firearm and AmmunitionRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that in federal court today United States District Judge Terrance W. Boyle sentenced MARKIE DEVON JONES, 39 of Clayton, North Carolina, to 180 months followed by 3 years of supervised release.
On August 12, 2015, JONES pled guilty to one count of felon in possession of a firearm and ammunition.
According to the investigation, On November 6, 2014, a deputy with the Johnston County Sheriff’s Office observed JONES driving a vehicle erratically and crossing the center line of the roadway. The deputy made a traffic stop and noticed JONES attempting to conceal something as he was exiting the vehicle. A Clayton Police Officer arrived at the scene and they attempted to take JONES into custody, but Jones resisted. After a brief struggle, JONES was placed in handcuffs and searched. A stolen loaded .45 caliber handgun was discovered in JONES’ rear waistband area. Additionally, several ski masks and latex gloves were found in the vehicle’s glove box. JONES has multiple previous felony convictions and was sentenced as an armed career criminal.
The criminal investigation of this case was conducted by the Johnston County Sheriff’s Office and the Clayton Police Department. Assistant United States Attorney Ethan A. Ontjes is handling the prosecution on behalf of the Eastern District of North Carolina.
Certified Environmental Services, Inc. Ordered to Pay over $409,000 for Negligent EndangermentRead the Press Release
UTICA, NEW YORK – Certified Environmental Services, Inc. (“CES”) was sentenced today to 5 years of probation, and to make restitution in the amount of $409,829.67, for negligently releasing asbestos into the ambient air, thereby placing other persons in imminent danger of death or serious bodily injury, announced United States Attorney Richard S. Hartunian.
U.S. District Judge David N. Hurd credited CES for prior restitution payments of $87,960.06 and ordered CES to make an initial lump-sum payment of $100,000 toward its restitution obligation, and then pay monthly installments of $2,000 or 10% of CES’s net monthly cash flow, whichever is greater. Judge Hurd also credited CES for time already served on its 5-year probation sentence.
United States Attorney Hartunian said, “CES was paid to conduct proper air monitoring to preserve the basic right to clean air when asbestos was removed from homes and other buildings. It was the gatekeeper for the environment, but violated requirements and provided final clearances when asbestos contamination remained. This was cutting corners with consequences – the release of dangerous, toxic asbestos fibers into the air. We are committed to securing justice for abatement contractors and air monitors, as well as restitution for the harm they leave behind.”
The admissions by CES, in connection with pleading guilty to a one-count misdemeanor Information on May 5, 2015, included the following:
- During the period of 1999 to 2007, CES was engaged in the business of, among other things, conducting air monitoring and sampling, and performing laboratory analysis before, during, and at the conclusion of asbestos abatement (removal) projects. CES provided air sampling and laboratory analysis for asbestos abatements by AAPEX Environmental Services, Inc., and Paragon Environmental Services, Inc., which had performed illegal “rip and run” removals in which asbestos was stripped and removed dry, scattered and left behind in various locations throughout the work area, and was permitted to, and did, migrate outside of the facility and into the ambient air.
- Asbestos is a hazardous air pollutant, and severely toxic. Medical science has not established any minimum level of exposure to asbestos fibers that is considered to be safe. Before asbestos abatement, containment structures known as isolation barriers must be constructed around the abatement area by the contractor and negative air pressure maintained to ensure that contaminated air in the abatement area does not filter back to an uncontaminated area. The containment and negative air pressure must be maintained continuously from the start of the abatement work through the cleanup operations and clearance air monitoring.
- CES’s negligence, which caused the release of asbestos and the resulting imminent danger to people, involved: 1) CES employees failing in certain cases to: perform visual inspections for asbestos debris and pools of water; observe required waiting periods before sampling; record accurate sampling starting and stopping times; calibrate pumps before and after sampling; conduct aggressive air sampling (by agitating the air inside the work area to ensure that present asbestos fibers are rendered airborne for collection and measurement); and decontaminate air samplers and their equipment before leaving the asbestos work area or signing in and out of containment; and 2) CES employees, in certain cases, conducting air sampling without entering work areas; letting contractors collect air samples themselves; and overstating sampling times.
- CES thereby negligently released asbestos into the ambient air and negligently placed persons in imminent danger of death or serious bodily injury from exposure to asbestos fibers.
In 2010, a 15-count superseding indictment charged CES and others with environmental offenses and mail fraud, and a jury trial concluded with the conviction of CES and three co-defendants. In 2014, however, the U.S. Court of Appeals for the Second Circuit reversed the convictions and remanded for a new trial as to the three defendants (including CES) that appealed their convictions. The sentencing of CES for negligent endangerment resolves the pending charges against CES and two co-defendants who also appealed. Two other co-defendants face re-sentencing.
This case was investigated by the U.S. Environmental Protection Agency Criminal Investigation Division, New York Regional Office and Syracuse Resident Office, whose diligence and dedication U.S. Attorney Hartunian commended. On remand, the case was prosecuted by First Assistant U.S. Attorney Grant C. Jaquith.
Brockton Man Convicted in Bank Robbery SpreeRead the Press Release
BOSTON – A Brockton man was convicted yesterday of robbing multiple banks by a federal jury following a six-day trial in U.S. District Court in Boston.
James Patterson, 47, was found guilty of five counts of bank robbery. U.S. District Judge Nathaniel M. Gorton scheduled sentencing for Feb. 23, 2016.
From April to July 2014, Patterson robbed five banks: the Beverly Bank on Dodge Street in Beverly on April 16th; the People’s United Bank on Dodge Street in Beverly on May 10th; the Century Bank on Fellsway West in Somerville on June 4th; the South Shore Bank on Turnpike Street in Stoughton on June 12th; and the North Shore Bank on Highland Avenue in Salem on July 20th. On each occasion, Patterson wore sunglasses, gloves, and covered his lower face with a bandana or clothing. After entering each bank, Patterson announced that it was a robbery and demanded large bills from the bank tellers.
Patterson was arrested on Aug. 4, 2014, near the Century Bank on Cambridge Street in Burlington carrying a black BB gun that had the appearance of a semi-automatic pistol. At the time of his arrest, Patterson was wearing a hat, sunglasses, long pants pulled over shorts, a heavy pullover top and latex gloves. The lower part of his face was covered with black clothing.
Each count of bank robbery provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum possible penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The Beverly, Somerville, Stoughton, Salem, Peabody and Burlington Police Departments assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorneys Kenneth G. Shine and Robert E. Richardson of Ortiz’s Major Crimes Unit.
Birmingham Man Gets 22 Years in Federal Prison for Armed Pharmacy RobberiesRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Birmingham man to nearly 22 years in prison for two armed robberies of pharmacies in 2014, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
TOMMY LEON STEWART, 29, pleaded guilty in April to robbing a CVS Pharmacy on Center Point Parkway in Birmingham on Oct. 21, 2014, and a CVS Pharmacy on Highway 75 in Pinson on Oct. 29, 2014. Stewart also pleaded guilty to brandishing a gun during the Pinson robbery. U.S. District Judge Karon O. Bowdre sentenced Stewart to 14 years and 10 months in prison on the robbery counts and to seven years in prison on the gun count, which must be served consecutively to the robbery sentence.
The judge also ordered Stewart to pay $3,043 in restitution to the Pinson pharmacy and $8,300 to the Center Point pharmacy,
According to Stewart’s plea agreement with the government, he entered both CVS stores wearing a fake mustache and beard and demanded money and narcotics at gunpoint. In both robberies, he placed the stolen money and narcotics in a silver bag and crawled through the customer drive-through window to escape.
While climbing out the window at the Pinson pharmacy, Stewart fell, dropping his wallet from his jacket pocket, according to the plea agreement. The wallet contained his identification and a fingerprint lifted from the window glass matched a known print of Stewart’s.
Stewart has seven first-degree robbery cases pending in Jefferson County Circuit Court for other charged pharmacy robberies.
The FBI investigated the case, which Assistant U.S. Attorney John B. Felton prosecuted.
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Armed Carjackers Plead Guilty in Federal CourtRead the Press Release
DALLAS — Two Dallas residents have pleaded guilty to federal felony offenses stemming from their roles in the armed carjacking of two individuals earlier this year, announced U.S. Attorney John Parker of the Northern District of Texas.
Today, Monica Renee Metcalf, 23, appeared before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to one count of carjacking and aiding and abetting and one count of using, carrying, and brandishing a firearm in furtherance of a crime of violence and aiding and abetting. She faces a statutory penalty of up to 15 years in federal prison and a $250,000 fine on the carjacking count and up to life in federal prison on the firearm count.
Last week, Felipe Pinon, 27, pleaded guilty to the same offenses. His plea agreement contains a provision that, if the Court accepts that plea, the parties agree that a sentence of 360 months is the appropriate custody disposition of the case.
According to documents filed in the case, on January 18, 2015, Metcalf approached an individual (Victim 1) at a gas station near the 3300 block of Webb Chapel Extension in Dallas and asked Victim 1 for a ride. Metcalf directed Victim 1 to drive her to an apartment complex across the street, and when they arrived there, Pinon approached the vehicle and spoke with Metcalf. Metcalf then asked Victim 1 to give Pinon a ride as well, but Victim 1 refused. Pinon then brandished a handgun and pointed it at Victim 1 and demanded that Victim 1 give him everything he had. Pinon and Metcalf ordered Victim 1 out of the vehicle and drove away in it.
The next day, Metcalf approached and briefly spoke with an individual (Victim 2) who was seated in his vehicle near the 300 block of S. Seagoville Road in Dallas. As Metcalf walked away from Victim 2, Pinon approached Victim 2. Pinon brandished a handgun and ordered Victim 2 to get out of the vehicle. Then, Pinon, Metcalf, and another individual drove away in Victim 2’s vehicle.
The Dallas Police Department and the FBI investigated. Assistant U.S. Attorney Brian Poe is in charge of the prosecution.
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Appleton Man Sentenced to 65 Months in Federal Prison for Methamphetamine Distribution and Firearms ChargesRead the Press Release
Acting United States Attorney Gregory J. Haanstad, for the Eastern District of Wisconsin, announced that yesterday Khee Vang (age: 36) of Appleton, Wisconsin, was sentenced to 65 months in federal prison followed by 5 years of supervised release by Chief United States District Judge William C. Griesbach. Vang had previously entered guilty pleas for possession with intent to distribute 50 grams or more of methamphetamine in violation of Title 21, United States Code, Section 846, and possession of a firearm in furtherance of a drug trafficking charge in violation of Title 18, United States Code, Section 922(c)(1)(A).
According to the plea agreement and other documents filed with the court, Vang was arrested with a loaded firearm, 117 grams of methamphetamine, and $4,500 in cash while traveling back to Appleton from La Crosse where he met with his drug source. In pronouncing the sentence, Chief Judge Griesbach noted the many lives that methamphetamine has destroyed in Northeast Wisconsin. He further noted that the quantity of methamphetamine and the presence of firearms made this an inherently dangerous crime.
The case was investigated by the Lake Winnebago Area Metropolitan Enforcement Group and the United States Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorney Daniel R. Humble.
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Albuquerque Felon Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Jonathon Bouldin, 35, of Albuquerque, N.M., pleaded guilty this morning in federal court to violating the federal firearms laws.
Bouldin was arrested on May 18, 2015, on an indictment charging him with unlawfully possessing a firearm on Jan. 22, 2015, in Bernalillo County, N.M. At the time of his arrest, Bouldin was prohibited from possessing firearms or ammunition because he previously had been convicted of several felony offenses including shoplifting, commercial burglary, conspiracy to commit commercial burglary, and possession of a stolen credit card.
During today’s plea hearing, Bouldin pled guilty to the indictment and admitted that on Jan. 22, 2015, he was in possession of a semiautomatic pistol, even though this was prohibited because of his status as a convicted felon. At sentencing, Bouldin faces a statutory maximum penalty of ten years in federal prison. Bouldin remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department. Assistant U.S. Attorney Nicholas Jon Ganjei is prosecuting the case.
Al-Qaeda Operative Sentenced to 40 Years in Prison for Role in International Terrorism Plot that Targeted the United States and EuropeRead the Press Release
Defendant Led Plan to Carry Out Bombing of Crowded Shopping Center in Manchester, England, During Easter Holiday as Part of Global Terrorism Plot by al-Qaeda
Earlier today at the federal courthouse in Brooklyn, New York, Abid Naseer, 29, was sentenced to 40 years in prison by U.S. District Judge Raymond J. Dearie of the Eastern District of New York for multiple terrorism offenses. The defendant and his accomplices came within days of executing a plot to conduct a bombing at a crowded shopping mall in Manchester, England, as directed by senior al-Qaeda leaders in Pakistan.
The planned attack, which also targeted the New York City subway system and a newspaper office in Copenhagen, had been directed by and coordinated with senior al-Qaeda leaders in Pakistan. Naseer is the eighth defendant to face charges in federal court related to the al-Qaeda plot, which also involved Adis Medunjanin, Najibullah Zazi and Zarein Ahmedzay, the three members of the cell that targeted New York City. Naseer was convicted in March 2015 after a three-week jury trial of providing material support to al-Qaeda, conspiring to provide material support to al-Qaeda and conspiring to use a destructive device in relation to a crime of violence.
The sentence was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD).
“Abid Naseer was part of an al Qaeda conspiracy that targeted Western countries, including the United States and the United Kingdom, for terrorist attack,” said Assistant Attorney General Carlin. “His conviction and sentence reflect our dedication to identifying and holding accountable those who seek to target the United States and its allies. I want to thank the many agents, analysts and prosecutors who are responsible for this successful result.”
“This al-Qaeda plot was intended by the group’s leaders and Naseer to send a message to the United States and its allies,” said U.S. Attorney Capers. “Today’s sentence sends an even more powerful message in response: terrorists who target the U.S. and its allies will be held accountable for their violent crimes to the full extent of the law.”
“Dispatched by al-Qaeda to the U.K. in 2006, Abid Naseer exploited the educational visa system not to improve his own life, but to take away the lives of many others ‘in large numbers,’” said Assistant Director in Charge Rodriguez. “Trained in weapons and explosives, he communicated in code to hide his evil intentions. Found guilty in a court of law, he has been spared the fate of death he wished upon others and will spend considerable time incarcerated in a country he and his co-conspirators failed to take down.”
“This case demonstrates the importance of a closely coordinated international law enforcement approach to an established terrorist network that knows no borders,” said Commissioner Bratton. “The manner in which these defendants communicated their deadly plans reinforces the need to allow law enforcement the necessary authority and tools to prevent these plots from succeeding in their objectives of mass destruction and death. I commend our local and international partners in preventing these acts and securing convictions of those responsible for plotting them.”
In approximately September 2008, al-Qaeda leaders in Pakistan recruited Medunjanin, Zazi and Ahmedzay, three friends from New York City, to conduct a suicide bombing attack in New York City. Those al-Qaeda leaders, including Adnan El-Shukrijumah and Saleh al-Somali, communicated with Zazi about the plot through an al-Qaeda facilitator named “Ahmad,” who was located in Peshawar, Pakistan. In early September 2009, after Medunjanin, Zazi and Ahmedzay had selected the New York City subway system as their target, Zazi emailed with “Ahmad” in Pakistan about the proper ingredients for the main charge explosive, which included flour and oil. Zazi pleaded guilty to his role in the plot on Feb. 22, 2010; Ahmedzay pleaded guilty on April 23, 2010; and Medunjanin was convicted after trial on May 1, 2012, and was sentenced to life in prison. Zazi and Ahmedzay are awaiting sentencing.
The investigation by authorities in the United States and United Kingdom revealed that “Ahmad” had also been communicating with Naseer earlier in 2009. The evidence at trial established that Naseer and his Pakistani accomplices had been dispatched by al-Qaeda to the United Kingdom in 2006 in order to begin preparations for an attack in that country. The defendant and his co-conspirators entered the United Kingdom on student visas but then immediately dropped out of the university in which they had enrolled. The defendant, like Zazi, returned briefly to Peshawar in November 2008, at the same time Zazi and his co-conspirators were receiving weapons and explosives training from al-Qaeda in that region. After returning to the United Kingdom, the defendant sent messages back and forth to the same email account that “Ahmad” was also using to communicate with the American-based al-Qaeda cell on behalf of Saleh al-Somali, al-Qaeda’s then-head of external operations. In the messages, the defendant used coded language to refer to different types of explosives. At the culmination of the plot, in early April 2009, Naseer told “Ahmad” that he was planning a large “wedding” for numerous guests during the upcoming Easter weekend and that “Ahmad” – whom he called “Sohaib” – should be ready. Notably, Zazi testified that “Ahmad” had instructed him to use the same code of “marriage” to refer to the planned attack on the New York City subway and that Zazi emailed “Ahmad” that “the marriage is ready” just before he drove to New York in early September 2009 to conduct the attack.
On April 8, 2009, Naseer and several associates were arrested in the United Kingdom. In connection with these arrests, U.K. authorities conducted searches of the plotters’ homes as well as an internet café used by the defendant to send his messages to “Ahmad,” where they seized a large volume of electronic media. As demonstrated at trial, a forensic review of the electronic media revealed that Naseer had downloaded several jihadi nasheeds, or anthems, calling for “death in large numbers.” A document recovered from the raid on Usama bin Laden’s compound in May 2011 contained a letter from Saleh al-Somali to Bin Laden, written on April 16, 2009, that discussed the defendant and his accomplices’ arrests in the United Kingdom.
The case was investigated by the FBI’s Joint Terrorism Task Force. The Justice Department’s Office of International Affairs, Internal Revenue Service–Criminal Investigation in New York, the U.S. Marshals Service in Brooklyn and the law enforcement authorities in the United Kingdom and Norway, including the Greater Manchester Police and the Norwegian Police Security Service, also provided significant assistance.
The case was prosecuted by Assistant U.S. Attorneys Zainab Ahmad and Michael P. Canty of the Eastern District of New York, and Trial Attorney Josh Parecki the National Security Division’s Counterterrorism Section.
Al-Qaeda Operative Sentenced to 40 Years for Role in International Terrorism Plot That Targeted the United States and EuropeRead the Press Release
Earlier today at the federal courthouse in Brooklyn, New York, Abid Naseer was sentenced to 40 years by United States District Judge Raymond J. Dearie for multiple terrorism offenses. The defendant and his accomplices came within days of executing a plot to conduct a bombing at a crowded shopping mall in Manchester, United Kingdom, as directed by senior al-Qaeda leaders in Pakistan. The planned attack, which also targeted the New York City subway system and a newspaper office in Copenhagen, Denmark, had been directed by and coordinated with senior al-Qaeda leaders in Pakistan. Naseer is the eighth defendant to face charges in Brooklyn federal court related to the al-Qaeda plot, which also involved Adis Medunjanin, Najibullah Zazi, and Zarein Ahmedzay, the three members of the cell that targeted New York City. Naseer was convicted in March 2015 after a three week jury trial of providing material support to al-Qaeda, conspiring to provide material support to al-Qaeda, and conspiring to use a destructive device in relation to a crime of violence.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and William J. Bratton, Commissioner, New York City Police Department (NYPD).
“This al-Qaeda plot was intended by the group’s leaders and Naseer to send a message to the United States and its allies,” United States Attorney Capers stated. “Today’s sentence sends an even more powerful message in response: terrorists who target the U.S. and its allies will be held accountable for their violent crimes to the full extent of the law.” Mr. Capers extended his grateful appreciation to the FBI’s Joint Terrorism Task Force, which led the investigation and comprises a large number of federal, state, and local agencies from the region. He also sent his appreciation to the Internal Revenue Service–Criminal Investigation, New York, the U.S. Marshal Service, Brooklyn, and the law enforcement authorities in the United Kingdom and Norway, including the Greater Manchester Police and the Norwegian Police Security Service, for their outstanding assistance with the case.
“Abid Naseer was part of an al Qaeda conspiracy that targeted Western countries, including the United States and the United Kingdom, for terrorist attack,” said Assistant Attorney General Carlin. “His conviction and sentence reflect our dedication to identifying and holding accountable those who seek to target the United States and its allies. I want to thank the many agents, analysts and prosecutors who are responsible for this successful result,” said Assistant Attorney General Carlin.
“Dispatched by al-Qaeda to the U.K. in 2006, Abid Naseer exploited the educational visa system not to improve his own life, but to take away the lives of many others ‘in large numbers.’ Trained in weapons and explosives, he communicated in code to hide his evil intentions. Found guilty in a court of law, he has been spared the fate of death he wished upon others and will spend considerable time incarcerated in a country he and his co-conspirators failed to take down,” stated FBI Assistant Director-in-Charge Rodriguez.
“This case demonstrates the importance of a closely coordinated international law enforcement approach to an established terrorist network that knows no borders. The manner in which these defendants communicated their deadly plans reinforces the need to allow law enforcement the necessary authority and tools to prevent these plots from succeeding in their objectives of mass destruction and death. I commend our local and international partners in preventing these acts and securing convictions of those responsible for plotting them,” said Police Commissioner Bratton.
During trial the government introduced evidence that in approximately September 2008, al-Qaeda leaders in Pakistan recruited Medunjanin, Zazi, and Ahmedzay, three friends from New York City, to conduct a suicide bombing attack in New York City. Those al-Qaeda leaders, including Adnan El-Shukrijumah and Saleh al-Somali, communicated with Zazi about the plot through an al-Qaeda facilitator named “Ahmad,” who was located in Peshawar, Pakistan. In early September 2009, after Medunjanin, Zazi, and Ahmedzay had selected the New York City subway system as their target, Zazi emailed with Ahmad in Pakistan about the proper ingredients for the main charge explosive, which included flour and oil. Zazi pleaded guilty to his role in the plot on February 22, 2010; Ahmedzay pleaded guilty on April 23, 2010; and Medunjanin was convicted after trial on May 1, 2012 and was sentenced to life in prison. Zazi and Ahmedzay are awaiting sentence.
The investigation by authorities in the United States and United Kingdom revealed that Ahmad had also been communicating with the defendant earlier in 2009. The evidence at trial established that the defendant and his Pakistani accomplices had been dispatched by al-Qaeda to the U.K. in 2006 in order to begin preparations for an attack in that country. The defendant and his co-conspirators entered the U.K. on student visas but then immediately dropped out of the university in which they had enrolled. The defendant, like Zazi, returned briefly to Peshawar in November 2008, at the same time Zazi and his co-conspirators were receiving weapons and explosives training from al-Qaeda in that region. After returning to the U.K., the defendant sent messages back and forth to the same email account that Ahmad was also using to communicate with the American-based al-Qaeda cell on behalf of Saleh al-Somali, al-Qaeda’s then-head of external operations. In the messages, the defendant used coded language to refer to different types of explosives. At the culmination of the plot, in early April 2009, the defendant told Ahmad that he was planning a large “wedding” for numerous guests during the upcoming Easter weekend, and that Ahmad – whom he called “Sohaib” – should be ready. Notably, Zazi testified that Ahmad had instructed him to use the same code of “marriage” to refer to the planned attack on the New York City subway and that Zazi emailed Ahmad that “the marriage is ready” just before he drove to New York in early September 2009 to conduct the attack.
On April 8, 2009, the defendant and several associates were arrested in the United Kingdom. In connection with these arrests, U.K. authorities conducted searches of the plotters’ homes as well as an internet café used by the defendant to send his messages to Ahmad, where they seized a large volume of electronic media. As demonstrated at trial, a forensic review of that electronic media revealed that the defendant had downloaded several jihadi nasheeds, or anthems, calling for “death in large numbers.” A document recovered from the raid on Usama bin Laden’s compound in May 2011 contained a letter from Saleh al-Somali to Bin Laden, written on April 16, 2009, that discussed the defendant and his accomplices’ arrests in the U.K.
The government’s case is being prosecuted by the Office’s National Security & Cyber Crime Section. Assistant United States Attorneys Zainab Ahmad and Michael P. Canty are in charge of the prosecution, with assistance provided by the Justice Department’s National Security Division and Office of International Affairs.
The Defendant:
ABID NASEER
AGE: 29E.D.N.Y. Docket No. 10-CR-019 (RJD)
2 Men Get Hammered with 100+ Year Prison Sentences for Violent Robberies in and Around HoustonRead the Press Release
HOUSTON – Two men have been handed some of the largest sentences imposed in the Southern District of Texas following their convictions on multiple firearms charges and the violent robberies of mobile phone stores, announced U.S. Attorney Kenneth Magidson along with Robert Elder, special agent in charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives. A federal jury convicted Clarence Buck, 33, of Humble, and Kendal Allen, 24, of New Orleans, Louisiana, on all 14 and 11 counts, respectively, following an eight-day trial and approximately six hours of deliberation in August 2015.
Today, Buck was ordered to serve a total of 1,846 months in federal prison. Allen received 1,435 months.
Both men were convicted of conspiracy to interfere with commerce by robbery and five counts each of aiding and abetting interference with commerce by robbery and aiding and abetting using and carrying a firearm during and in relation to a crime of violence. Buck was also convicted of being a felon in possession of a firearm as well as an additional count of aiding and abetting interference with commerce by robbery and an additional count of aiding and abetting using and carrying a firearm during and in relation to a crime of violence.
U.S. District Judge David Hittner imposed the sentences this afternoon. Buck received 240 months for the conspiracy and aiding and abetting the robberies. Allen was ordered to serve 151 months for those offenses. Buck also received and additional term of 22 months for being a felon in possession of a firearm which was ordered to be served consecutively to his other term of imprisonment. On the first firearms conviction, Buck was further sentenced to 84 months followed by a consecutive 300 months for each of the subsequent five firearms charges which must be served consecutively to each other and consecutively to the other sentences. Allen received 84 months on his first firearms conviction followed by the consecutive 25 years for each of his four related offenses, all to be served consecutively.
In total, Buck and Allen were sentenced to serve 153 and 119 years in federal prison, respectively.
Over the course of the trial, the government presented 19 witnesses and 96 evidentiary exhibits, which included surveillance videos, photos, cell phone tower analysis as well as specific firearms believed used in the crimes and items of jewelry and cell phones stolen in the crimes.
According to the prosecution, on at least three occasions in November 2012, Buck assembled various crews to rob T-Mobile stores, stealing approximately 750 phones with a total approximate value of nearly $350,000. He also assembled a crew to rob the Houston Bargain Center which resulted in losses of approximately $500,000. After each robbery, Buck would sell the phones and other items and distribute the proceeds among the crews.
The first occurred on Nov. 2, 2012, when Buck assembled a crew to rob the location at 10961 North Freeway. Buck conducted surveillance outside, while three others entered the store. Allen and Deandre White were carrying handguns as they herded customers and store employees into a back room at gun point. A total of 314 phones were stolen. White, 23, of Houston, previously pleaded guilty in a related case and was sentenced to a term of federal imprisonment of 188 months.
Four days later, on Nov. 6, 2012, Buck assembled a crew to rob the T-Mobile store located at 5819 Gulf Freeway. Buck again conducted surveillance, while White and Allen executed the robbery. Allen carried an AR-15 assault rifle, while White carried handgun. Customers and employees were forced into a back room at gun point, while 282 phones were taken.
On Nov. 13, 2012, Buck and a crew he had assembled targeted the T-Mobile store located at 2902 North Shepard. Allen and White again entered the store armed with handguns, while Buck was outside conducting surveillance. During the course of this robbery, testimony revealed Allen exited the store and assaulted a customer outside, wrestled him to the ground and attempted to drag him into the store. Customers and store employees were again held at gun point while they stole 149 phones.
Then on Nov. 23, 2012, Buck assembled another crew and targeted the Houston Bargain Center located at 10022 Homestead Road. Buck was outside, while nine masked men, including Allen - armed with an AR-15 assault rifle - entered the store and forced employees and customers to the ground. The robbers broke more than 15 glass display cases with hammers and removed the jewelry inside of them. The owners of the stores that were robbed reported a loss of more than $500,000. A search warrant was executed Nov. 28, 2012, at Buck’s residence in Humble which resulted in the recovery of a number of the items of jewelry stolen, more than $29,000 in cash and the AR-15 rifle used by Allen in the robbery.
The jury also heard that Buck was initially charged in state court, but posted bond. Authorities observed Buck as he assembled a crew that later committed a robbery of the T-Mobile store located at 8498 Sam Houston Parkway. He was arrested again July 24, 2013.
Buck’s defense attempted to convince the jury that he was not involved in the robberies or gun offenses. He claimed he only acted as a fence hired by others to sell the stolen property. Allen also tried to tried to tell the jury he was not involved. The jury did not believe them and found both men guilty as charged.
They will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Eight others also pleaded guilty for their respective roles in the robbery conspiracy. Those include Michael George, 35, Russell Parker, 42, Shelton Watterson, 29, Danny Moore, 49, Son-Tanna Hewitt, 29, and Donald Holmes, 46, all of Houston; and Zeeshan Yasin, 24, and Rafey Khan, 25, of Karachi, Pakistan, but who resided in Houston.
The charges are the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Houston Police Department, the U.S. Marshals Service and the Harris County Sheriff’s Office. Assistant U.S. Attorneys Richard D. Hanes and Jennie Basile are prosecuting the case.
23 November 2015
Winthrop Man Pleads Guilty to Stealing over $400,000 in Government BenefitsRead the Press Release
BOSTON – Richard Alan Hersey, 63, of Winthrop, pleaded guilty today in U.S. District Court in Boston to stealing over $400,000 in Social Security and federal pension benefits. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Feb. 23, 2016.
In 1991, Hersey’s mother passed away, but her Social Security and pension funds continued to be directly deposited into a bank account held jointly by her and Hersey. Although he was not entitled to the funds, Hersey routinely withdrew them from the account after his mother’s death. In total, from 1991 to 2015, Hersey took $444,287 in Social Security and pension funds to which he was not entitled.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office, in partnership with the Social Security Administration, to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In 2015, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money:
In November 2015, Mark Gardner, of Abington, pleaded guilty to stealing $65,311 from Social Security from 2009 to 2014. Sentencing is scheduled for Feb. 5, 2016.
Also in November, Brian Sandiford, of Milton, pleaded guilty to stealing $70,811 from Social Security from 2010 to 2014. Sentencing is scheduled for March 3, 2016.
In September 2015, Patricia Kwiatkowski, of Upton, was sentenced for stealing $128,101 from Social Security from 2006 to 2014.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; and Scott Rezendes, Special Agent in Charge of the Office of Personnel Management, Office of Inspector General, Field Operations, made the announcement today. The Hersey case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Wife of Department of Defense Employee Sentenced for Fraudulently Obtaining over $750,000 from Contracts with Aberdeen Proving GroundRead the Press Release
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Sandra Nixon, a/k/a “Lisa Hart,” age 52, of Silver Spring, Maryland today to six months in prison followed by three years of supervised release for conspiring to defraud the United States. Judge Garbis also entered an order requiring Nixon to pay restitution of $750,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Frank Robey, Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
Sandra Nixon was married to co-defendant Mark Nixon. Mark Nixon was a civilian employee of the Department of Defense, and worked at the U.S. Army Research Laboratories (ARL) in Hampton, Virginia, and Aberdeen, Maryland. From 2008 to December 2010, Nixon was the director of the Vehicle Technology Directorate with ARL at Aberdeen Proving Ground. Co-defendant Kenneth Dawson was a longtime friend of the Nixons.
Sandra and Mark Nixon also had a financial interest and management role in the operation of Motile Robotics, Inc. (MRI), located in Joppa, Maryland; Atlantic Capital Enterprises (ACE); and Arrow Technical Incorporated (ATI).
Sandra and Mark Nixon reached an agreement with Kenneth Dawson to create and operate MRI. Dawson had full time employment with two different defense contractors that required him to report to work at Eglin Air Force Base in Florida, where he lived. In 2007, Dawson used his personal credit cards to pay for startup costs associated with MRI, and the Nixons reimbursed Dawson for these expenses. Although Dawson was the supposed president of MRI, in reality, Sandra and Mark Nixon created MRI, provided significant input regarding its operation, and were in effect a silent and undisclosed partner, owner and co-president. They helped operate MRI using the aliases “Lisa Hart” and "Paul Martin" in order to conceal their financial interest.
According to their plea agreements, in 2008, Mark Nixon determined that microsystem controls research was needed, including the fabrication of a small open-jet wind tunnel. Mark Nixon created and approved government documents that caused ARL to fund this research, and became the designated team leader for ARL on the research project.
In January 2009, the United States awarded a large defense contractor a task order to construct the open flow wind tunnel from February 2008 to 2011, worth approximately $3.6 million. Mark Nixon persuaded the defense contractor to use MRI as a subcontractor. Mark Nixon also played an important role in the government awarding the defense contractor another task order to construct a closed circuit wind tunnel from January 2009 to 2011, for approximately $3.5 million, under which MRI was a subcontractor. Mark Nixon provided the contracting officer with a technical evaluation of the contract and its cost, and acted as the government official overseeing and managing this work on a routine basis.
Pursuant to the conspiracy, the United States was billed for more than $35,000 in false labor charges by a relative of Sandra Nixon, who was characterized as an aerospace engineer. In reality, the relative was a retired school employee. Although Mark Nixon knew that he had a prohibited financial interest in MRI, he conducted a technical evaluation of MRI’s capabilities as a subcontractor, and approved the false invoices.
MRI received more than $5 million in federal funds under these task orders. Mark Nixon caused MRI to pay money to ATI, and ATI to pay ACE. The three defendants personally benefited from over $750,000 sent to these companies. The Nixons personally received more than $400,000 as a result of the task orders awarded to MRI.
Mark Nixon, age 55, of Silver Spring, Maryland, pleaded guilty on June 15, 2015 to his participation in the conspiracy and was sentenced to 42 months in prison. Judge Garbis also entered an order requiring Nixon to pay restitution of $750,000.
Kenneth Dawson, age 52, of Niceville, Florida, also has pleaded guilty to his participation in the conspiracy and is scheduled to be sentenced on December 15, 2015 at 9:30 a.m.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein commended the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit, DCIS and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Harry M. Gruber and P. Michael Cunningham, who prosecuted the case.
Wichita Falls Man Sentenced to Nearly 20 Years in Federal Prison for Role in Methamphetamine Distribution ConspiracyRead the Press Release
FORT WORTH, Texas — Edwin Romine, 36, of Wichita Falls, Texas, was sentenced by U.S. District Judge Reed C. O’Connor to serve 235 months in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Romine pleaded guilty in July 2015 to one count of conspiracy to possess with intent to distribute at least 50 grams of methamphetamine.
According to documents filed in the case, from July 2012 to his incarceration in state prison in late August 2014, Romine obtained, helped other obtain, and distributed methamphetamine in the Wichita Falls area.
The Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Texas Department of Public Safety and the Fort Worth Police Department investigated the case. Assistant U.S. Attorney Shawn Smith was in charge of the prosecution.
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Two Indicted in Mail Fraud SchemeRead the Press Release
Two foreign nationals charged with orchestrating an international mail fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Ronald J. Verrochio, Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division, made the announcement.
On November 19, 2015, Cristian Mariano Pardo, 30, and Jorge Gabriel Barca, 33, both of Buenos Aires, Argentina, were indicted in West Palm Beach on a single count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1341 and fifteen counts of mail fraud, in violation of Title 18, United States Code, Sections 1349. The defendants each face up to 20 years’ imprisonment, a $250,000 fine and mandatory restitution, on each charge. Pardo was arraigned this morning on the indictment. Barca has not yet been arrested.
According to the indictment, between September 2008 and September 2015, the defendants operated telemarketing call centers or “boiler rooms,” in Argentina that targeted Spanish-speaking consumers residing in the United States. The defendants obtained the names of these consumers from lead lists which they had purchased in Argentina. The lists included names of consumers who had previously made online or direct mail purchases of various items, including items sold on Spanish language television, such as English classes.
The telemarketers, acting at the direction of the defendants, would call Spanish-speaking U.S. residents to tell them that they would be receiving a small parcel in the mail that the consumers had ordered. The callers would state that if the consumers failed to pay for the cost on delivery (C.O.D.) package – typically a charge of $500 - they would be subject to lawsuits, expensive attorney’s fees and court costs, arrest, deportation, and/or have their credit ruined.
In truth, these consumers had not ordered any merchandise, and only paid the $500 demanded for the C.O.D. because of the numerous threats made by the boiler room callers.
When consumers refused delivery of a package sent by the defendants’ companies, they frequently were contacted again by the Argentinian telemarketers, who often identified themselves as attorneys. The callers again threatened the consumers if they refused to accept the packages.
As a result of these threats, numerous consumers paid an average of $500 for products of nominal value that they in fact had never ordered, fearing the consequences of failing to do so. In order to avoid detection and the filing of consumer complaints, Pardo and Barca changed the names of their companies frequently. During the course of the conspiracy, Pardo and Barca, through their companies, attempted to collect C.O.D. fees from thousands of consumers, and collected at least $700,000 in proceeds from the targeted consumers.
Mr. Ferrer commended the investigative efforts of USPIS. This case is being prosecuted by Assistant U.S. Attorney Lauren Jorgensen.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Serial Armed Robber Sentenced to 30 Years in PrisonRead the Press Release
FRESNO, Calif. — Rozelle Summerise, 39, of Fresno, was sentenced today by United States District Judge Anthony W. Ishii to 30 years in prison for nine armed robberies, United States Attorney Benjamin B. Wagner announced.
According to court documents, during a one-month period in the fall of 2012, Summerise committed armed robberies of Kmart in Clovis, Check N’ Go in Madera, and the following businesses in Fresno: CVS, Check N’ Go (twice), Foods Co., Crossland Economy Motel, Arco Minimart, and Motel 6. A search of Summerise’s residence uncovered several items used in the robberies including a revolver and a wig.
ATF Special Agent in Charge Jill A. Snyder stated, “ATF remains committed to reducing violent crime in our community by targeting those who use firearms to potentially harm our citizens. We will continue to work closely with our partners at the Fresno Police Department and the US Attorney’s Office to remove violent offenders from the community.”
Fresno Police Chief Jerry Dyer stated: “Removing Summerise from society before he killed one of his robbery victims was a top priority for our agency and could not have been done without the incredible teamwork of local law enforcement, ATF and the U.S. Attorney’s Office.”
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Fresno Police Department. This was a collaborative effort as part of Project Safe Neighborhoods, a joint effort among local, state and federal law enforcement authorities aimed at reducing gang and gun violence. Assistant United States Attorneys Kimberly A. Sanchez and Melanie Alsworth prosecuted the case.
Retirement Community Manager Sentenced for Embezzling FundsRead the Press Release
BOSTON – A former East Longmeadow woman was sentenced in U.S. District Court in Springfield today for embezzling from retirement living community which she managed.
Alice Lacroix, 54, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 52 months in prison, three years of supervised release and ordered to pay restitution of $323,000. In July 2015, Lacroix pleaded guilty to nine counts of wire fraud, nine counts of money laundering and two counts of filing false tax returns.
In a fraud scheme that lasted from 2011 through February 2013, Lacroix embezzled funds from her employer, Bluebird Estates which is a retirement living community in East Longmeadow. Lacroix, as manager of Bluebird Estates, took rent checks paid by tenants as well as other checks and property belonging to her employer. Additionally, Lacroix established a bank account without authorization in the name of Bluebird Estates into which she deposited the embezzled funds. During the course of the scheme, Lacroix deposited $325,000 into this fake Bluebird Estates bank account and engaged in financial transactions designed to disguise the proceeds of the fraudulent scheme. Lacroix would deceive her employer through emails that provided false information about the rent payments she took. Lacroix also submitted false income tax returns for the years 2011 and 2012.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Chief Douglas Mellis of the East Longmeadow Police Department made the announcement today. The case was prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Unit.
Providence Man Pleads Guilty to Sex Trafficking, Conspiracy to Traffic HeroinRead the Press Release
PROVIDENCE, R.I. – Damien Beverly, 29, of Providence, has pleaded guilty in federal court to charges that he trafficked two women from Boston to Rhode Island for the purposes of offering them for commercial sexual activity and that he conspired to traffic heroin, which he provided to the women as payment, announced United States Attorney Peter F. Neronha, Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England, and Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police.
Appearing before U.S. District Court Chief Judge William E. Smith on Thursday, Beverly pleaded guilty to one count of conspiracy, two counts of transportation to engage in prostitution and one count of conspiracy to distribute heroin.
A second individual charged in this matter, Tariq Rosario, 28, of Boston, Mass., pleaded guilty on Thursday to one count of conspiracy to distribute heroin.
According to court records and information presented to the court, an investigation by agents from Homeland Security Investigations and members of the Rhode Island State Police, law enforcement members of the Rhode Island Human Trafficking Task Force, in June or July 2014, Damien Beverly encountered one of the victims in downtown Boston. The woman was brought to a hotel room in Warwick rented by Beverly, where he photographed her and persuaded her to post an advertisement on Backpage.com, with the intent that she engage in commercial sexual activity. Over the next several days, several individuals responded to the advertisement. All of the money collected by the victim was turned over to Beverly, who in exchange provided the woman with heroin that he obtained from Tariq Rosario.
In September 2014, Beverly met a second woman on the streets of Boston where she was homeless and addicted to heroin and cocaine. He persuaded her to travel to Rhode Island, promising her that he would provide her with housing and drugs in exchange for working as a prostitute. The woman resided with Beverly in Providence, during which time they posted numerous advertisements on Backpage.com offering the woman for commercial sexual activity. All of the money earned by the victim was turned over to Beverly in exchange for housing, food and a daily supply of heroin.
In late September or early October 2014, the first victim, who had since returned to Boston, was persuaded to return to Rhode Island, and to live and work with Beverly and the second victim. All of the money earned by both women was turned over to Beverly. In exchange for working as prostitutes, Beverly provided the victims with between 3-5 grams of heroin daily, which he obtained from Tariq Rosario.
Based on information developed by the Rhode Island Human Trafficking Task Force, in January 2015, members of the Rhode Island State Police, and HSI and FBI agents executed a court authorized search warrant at the Providence residence where the victims were staying with Beverly. Beverly was detained and the victims were rescued by law enforcement and provided support services.
Damien Beverly, who has been detained since his arrest on January 13, 2015, and Tariq Rosario, who has been detained since his arrest on September 18, 2015, are scheduled to be sentenced on February 5, 2016.
The case is being prosecuted by Assistant U.S. Attorney Adi Goldstein.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Patterson Man Sentenced for Wells Fargo Bank RobberyRead the Press Release
FRESNO, Calif. — Jose Valadez Jr., 35, of Patterson, was sentenced today to nearly 10 years in prison today for an armed bank robbery, United States Attorney Benjamin B. Wagner announced.
United States District Judge Anthony W. Ishii sentenced Valadez to two years and 10 months in prison for armed bank robbery and a consecutive sentence of seven years in prison for brandishing a firearm during a crime of violence.
According to court documents, on June 19, 2014, Juan Carlos Reyes, 25, of Tracy, and Valadez robbed the Wells Fargo Bank located inside the Save Mart Supermarket in Patterson. Customers and employees were held at gunpoint as Reyes instructed tellers to “open the drawers” and demanded that money be placed in a bag. Reyes and Valadez fled the area separately with law enforcement in pursuit. Valadez was arrested shortly thereafter and assisted officers in locating the firearm and clothing he discarded after fleeing the scene of the robbery.
Officers located a firearm, clothing and the money stolen from the bank in another location. DNA evidence from the clothing provided law enforcement with Reyes’ identity. Reyes was arrested on October 11, 2014, in Manteca. Reyes pleaded guilty and was sentenced on October 19, 2015, to two years and six months in prison for armed bank robbery, and a consecutive sentence of seven years in prison for brandishing a firearm during a crime of violence.
This case was the product of an investigation by the Federal Bureau of Investigation and the Stanislaus County Sheriff’s Office. Assistant United States Attorney Melanie L. Alsworth prosecuted the case.
Oregon Felon Receives 10-Year Prison Term for Possessing Stolen FirearmRead the Press Release
EUGENE, Ore. – On Thursday, November 19, 2015 Mitchell Wayne Brolin, 42, of Linn County, Oregon, appeared before U. S. District Judge Michael McShane and was sentenced to 10 years in prison for being a felon in possession of a revolver he stole during the commission of a burglary.
On February 25, 2013, Brolin and two accomplices were burglarizing a home in Lebanon, Oregon, when a neighbor accosted and grabbed Brolin, who was carrying a loaded revolver he had just stolen. Brolin dragged the neighbor across the yard before shaking him loose and jumping into his accomplices’ van. Several other firearms were also stolen from the home.
In September 2015, Brolin pled guilty to being a felon in possession of a stolen firearm. Brolin’s criminal history includes convictions for delivering methamphetamine, felony assault and coercion. Brolin’s sentence was part of a global plea agreement with the U. S. Attorney’s Office and the Linn County District Attorney’s Office.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearms, the Linn County Sheriff’s Office and the Albany Police Department. The case was prosecuted by Assistant United States Attorney Frank R. Papagni, Jr. with the assistance of Deputy District Attorneys Jonathan Crow and Michael Wynhausen.
Ohio man convicted of unlawful possession of firearmsRead the Press Release
WHEELING, WEST VIRGINIA – Darrick D. Fleming, II, 28, of Cleveland, Ohio, was convicted of unlawful possession of a firearm today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Fleming was previously convicted in the Court of Common Pleas of Franklin County, Ohio of the felony offense of “Carrying a Concealed Weapon.” As a result of that conviction, he is prohibited form possessing firearms. He was subsequently discovered in June 2015 in Ohio County, West Virginia in unlawful possession of a 9mm pistol.
Fleming pled guilty today to a criminal Information charging him with one count of “Prohibited Person in Possession of a Firearm.” He faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government. The Wheeling, West Virginia Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives led the Investigation.
U.S. Magistrate Judge James E. Seibert presided.
Ohio Man Sentenced for Part in Cocaine ConspiracyRead the Press Release
An Ohio man, convicted of Conspiracy to Distribute Cocaine and Possession with Intent to Distribute Cocaine, was sentenced to 262 months in federal prison on November 20, 2015, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Kenyon Ramon Walton, 31, of Cincinnati, Ohio, received a 262 month sentence for offenses which occurred in the Southern District of Illinois. Walton had previously pled guilty to those offenses. Following release from imprisonment, Walton will serve a 10 year term of supervised release. Walton was also ordered to pay a $500 fine and a $200 special assessment.
Agencies participating in this case include the Drug Enforcement Administration, Illinois State Police, Federal Bureau of Investigation, San Diego County Integrated Narcotic Task Force, Oklahoma Highway Patrol, and various other state law enforcement agencies. This case was prosecuted by Assistant United States Attorney Donald S. Boyce.
Ohio Man Pleads Guilty to Structuring More Than $200,000 in Proceeds of Drug TraffickingRead the Press Release
FRESNO, Calif. -- Jeremy Michael Murphy, 26, of Monroe, Ohio, pleaded guilty today to one count of conspiring to structure cash transactions, United States Attorney Benjamin B. Wagner announced.
According to court documents, Murphy and seven co-defendants opened and maintained bank accounts for the purpose of funneling cash proceeds of marijuana that had been shipped from Fresno and other cities in California and sold in Florida and other states. Murphy withdrew more than $240,000 in cash proceeds of this marijuana trafficking from his bank accounts in amounts of $10,000 or less to prevent the banks from filing Currency Transaction Reports, which are prepared for any transaction over $10,000 in cash. In total, Murphy and his co-conspirators structured more than $7.5 million of proceeds of drug trafficking.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.
This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), 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. Assistant U.S. Attorneys Grant B. Rabenn, Patrick R. Delahunty, and Jeffrey Spivak are prosecuting the case.
On February 11, 2015, Chad Riffle, 23, of Citrus Springs, Florida, was sentenced to five years in prison after pleading guilty to the structuring conspiracy. Peter Capodieci, 24, of Crystal River, Florida; Miguel Gonzalez, 32, of Fresno; and Bree Benson, 21, of Citrus Springs, Florida, have pleaded guilty to conspiring to structure financial transactions and are awaiting sentencing. Charges are pending against Brandon Michael Thomas, 25, of Fresno, California. Ashley Starling Thomas, 28, of Lake Charles, Louisiana; and Aseel Al-Saber, 26, of Orange County, California, are scheduled for trial on April 26, 2016. The charges against Brandon Thomas, Ashley Starling Thomas, and Al-Saber are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Murphy is scheduled to be sentenced by United States District Judge Lawrence J. O’Neill on March 7, 2016. The maximum statutory penalty for conspiracy to structure is five years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.