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Tuesday 6 October 2015
Winchester Man Pleads Guilty to Child Pornography ChargesRead the Press Release
HARRISONBURG, VIRGINIA – A former regional chief public information officer for the U.S. Army Corps of Engineers pled guilty today in the United States District Court for the Western District of Virginia in Harrisonburg to charges related to the possession and transportation of child pornography images and videos.
Michael Steven Beeman, 62, of Winchester, Va., waived his right to be indicted and pled guilty today to a Superseding Information charging him with one count of transportation of child pornography and four counts of possession of child pornography.
In and around the late 1980s, Beeman, who at the time was employed by the United States Air Force in a public affairs position at Patrick Air Force Base in Florida, video-recorded his sexual abuse of a boy who also lived on base. This abuse, and the video images produced by Beeman remained unknown to law enforcement until shortly before his arrest.
In 2014 Beeman’s dog walker discovered images of naked minors on one of Beeman’s i-Pads. The dog walker reported these observations to the Frederick County Sheriff’s Office.
On January 14, 2014, a search warrant was executed at Beeman’s Winchester home and more than 250 electronic devices, including VHS tapes, DVDs, desktop computers, laptop computers, electronic tablets, external hard drives and thumb drives were seized. More than 50 of the items seized contained depictions of child pornography. There were thousands of images of child pornography found on Beeman’s devices. Many of the victims depicted on the defendant’s devices were found by National Center for Missing and Exploited Children to be previously identified minors.
Forensic analysis of Beeman’s devices showed that many of the child pornography images were obtained by the defendant both prior to and following the defendant’s move to Virginia in 2010.
At sentencing, Beeman faces up to 20 years in prison on each of counts one through four and up to 10 years on count five. He also faces a mandatory minimum of at least five years on count one. After his release from prison, the defendant faces a minimum of five years and as much as a lifetime of supervised release.
The investigation of the case was conducted by Mike Wagoner with the Page County Sheriff’s Office, the NOVA/DC Internet Crimes Against Children Task Force and Evidence Recovery Section, the Frederick County Sheriff’s Office, Department of Homeland Security- Homeland Security Investigations, The Virginia Attorney General’s Office- Computer Evidence Recovery Section, the Virginia State Police High Tech Crimes-Computer Recover Section, Air Force Office of Special Investigations, U.S. Army Corp of Engineers-Middle East District, U.S. Department of Justice’s Child Exploitation and Obscenity Section, High Tech Investigative Unit. Assistant United States Attorney Nancy S. Healey and Herbrina D. Sanders, a trial attorney with the U.S. Department of Justice’s Child Exploitation and Obscenity Section, will prosecute the case for the United States.
Winchester Man Admits Defrauding His Employer Out of Millions of DollarsRead the Press Release
LEXINGTON — A Winchester, Ky., man has admitted to stealing over $3 million from his former employer, Apollo Oil, LLC.
On Monday, Bradley E. Taylor, 38, pleaded guilty to wire fraud, before U.S. District Court Judge Danny C. Reeves.
Taylor, who worked as Apollo’s operations manager, admitted that he created a fictitious supplier, called BCW, LLC, and falsified purchase orders, invoices, and other shipping documents, causing Apollo to issue checks to BCW for nonexistent products. Taylor then stole the checks issued by Apollo, deposited them into a bank account he opened in the name of BCW, and converted the proceeds to his personal use.
According to the plea agreement, from 2004 to 2014, Taylor caused Apollo to issue 232 checks to BCW, totaling $3,055,422.33. Taylor personally received all of this money.
Taylor waived his right to be indicted by a grand jury, was formally charged in court, and admitted to the charges.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard Marshall, Special Agent in Charge, FBI, jointly announced the guilty plea.
The investigation was conducted by the FBI. Assistant U.S. Attorney Andrew Boone is prosecuting this case on behalf of the federal government.
Taylor is scheduled to be sentenced on January 27, 2016. He faces up to 20 years in prison and a maximum fine of $250,000. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Wheeling man convicted of unlawfully possessing firearmRead the Press Release
WHEELING, WEST VIRGINIA – David L. Smith, 40, of Wheeling, was convicted today of being in unlawful possession of a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Smith was previously convicted the felony offenses of “Unlawful Assault” and “Grand Larceny” in the Circuit Court of Marshall County, West Virginia. As a result of these convictions, he is prohibited from possessing a firearm. He was discovered in Ohio County, West Virginia in February 2015 in possession of a .45 caliber pistol.
Smith pled guilty today to a criminal Information charging him with one count of “Felon in Possession of a Firearm.” He faces up to 10 years in prison and a fine of up to $250,000 on each count. 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 David Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. Magistrate Judge James E. Seibert presided.
Wethersfield Man Sentenced to Prison Term for Involvement in Multiple Swatting IncidentsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MATTHEW TOLLIS, 22, of Wethersfield, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 12 months and one day of imprisonment, followed by three years of supervised release, for participating in a series of “swatting” incidents that occurred in Connecticut and other states in 2014. Judge Hall also ordered TOLLIS to perform 300 hours of community service.
Swatting is the making of a hoax call to any emergency service to elicit an emergency response based on the false report of an ongoing critical incident. Incidents typically produce the deployment of SWAT units, bomb squads, and other police units, as well as the evacuations of schools, businesses and residences.
“Swatting is not a schoolboy prank, it’s a federal crime,” said U.S. Attorney Daly. “These hoaxes have expended critical law enforcement resources and caused severe emotional distress for thousands of victims,” stated U.S. Attorney Daly. “It is our hope that this prosecution and the knowledge that this defendant will serve time in prison and live with a felony conviction for the remainder of his life will deter others from engaging in this immature, dangerous and criminal behavior.”
According to court documents and statements made in court, TOLLIS was a member of a group primarily consisting of Microsoft X-Box gamers who referred to themselves as “TCOD” (TeAM CrucifiX or Die). TOLLIS and his TCOD associates used the Internet communication service Skype to make hoax threats involving bombs, hostage taking, firearms, and mass murder. TOLLIS was identified as a participant in at least six of these swatting incidents, including a bomb threat to the UConn’s Admissions Department on April 3, 2014. This hoax call resulted in a three-hour, campus-wide lockdown and required the UConn Police and the Connecticut State Police’s Bomb Squad, Emergency Services Unit and SWAT teams to respond.
TOLLIS also participated in TCOD swatting calls to the Boston Convention and Exhibition Center, Boston University, two high schools in New Jersey and a high school in Texas. TOLLIS has admitted that he identified potential institutions, including UConn and Boston University, for TCOD members to make the threatening calls, and gathered telephone numbers and other information about the targeted institutions.
The investigation revealed that one of the founders of TCOD, a resident of Scotland who has identified himself as “Verified,” was responsible for at least five additional swatting incidents in Connecticut and Massachusetts in 2014. Other members of TCOD also reside in the U.K., and the FBI continues to coordinate its investigation with law enforcement authorities in the U.K.
TOLLIS was arrested on September 3, 2014, on state charges stemming from the UConn swatting incident, and he was arrested on a federal criminal complaint on September 10, 2014. On June 23, 2015, he waived his right to indictment and pleaded guilty to conspiring to engage in the malicious conveying of false information, namely a bomb threat hoax.
TOLLIS, who has been released on bond since shortly after his arrest, was ordered to report to prison on November 5, 2015.
This matter has been investigated by the FBI’s New Haven, Newark and Boston field offices, the UConn Police Department, the Connecticut Intelligence Center, the Willimantic Police Department, the Monroe Police Department, the Harvard University Police Department, the Boston University Police Department, the Newton (Mass.) Police Department, the Cambridge (Mass.) Police Department and other state and local law enforcement agencies.
U.S. Attorney Daly also acknowledged the critical assistance being provided by the U.S. Attorney’s Office for the District of New Jersey.
The case was prosecuted by Assistant U.S. Attorney Stephen B. Reynolds.
U.S. Task Force Report Recognizes INTERPOL's 'Crucial Global Tools' in Combating Foreign Terrorist Fighter TravelRead the Press Release
LYON, France – A US Homeland Security Committee task force report which recognizes INTERPOL’s systems as ‘crucial global tools for combating terrorist and foreign fighter travel’ has been welcomed by the world police body.
The ‘Combating terrorist and foreign fighter travel’ report, published following an extensive, six month review to assess the severity of the threat from individuals who leave home to join jihadist groups overseas and to identify potential security gaps, makes 32 key findings and accompanying recommendations.
The report states: “The closest the international community has come to centrally tracking foreign fighters is through a database created last year by INTERPOL…. Thousands of these fighters are returning home, and this database has the potential to become the global “tripwire” to detect their movements.”
With the report also highlighting how data from INTERPOL enabled US law enforcement to identify hundreds of previously unknown terrorist suspects and foreign fighters, the task force recommends ‘the US must work with international partners to designate INTERPOL as a central repository for foreign fighter identities.’
Other key recommendations include;
- The US government should make it a top diplomatic priority to ramp up foreign partner use of INTERPOL systems, including the regular provision of information to the organization’s databases, and as a screening mechanism at borders and ports of entry, especially for counterterrorism purposes.
- The Administration should consider granting State and local law enforcement the ability to quickly submit INTERPOL notices for wanted subjects in their jurisdictions. Aspiring foreign fighters often leave for the conflict zone with little or no notice, and giving state and local partners the ability to expedite notices to INTERPOL’s 190 member states could help stop extremists in their tracks on the way to terrorist safe havens, especially in cases where local authorities are tipped off to a suspect who was not previously on federal law enforcement’s radar.
Welcoming the report, INTERPOL Secretary General Jürgen Stock said its findings once again underlined the absolute necessity for countries to share information on foreign terrorist fighters.
The report was published on the same day as Secretary General Stock addressed the Leaders’ Summit on Countering ISIL and Violent Extremism on the sidelines of the United Nations (UN) General Assembly, hosted by US President Barack Obama.
The INTERPOL Chief updated the Summit on INTERPOL’s implementation of UN Security Council Resolution 2178 which recognizes the Organization’s role as a global, neutral information sharing platform against foreign terrorist fighters.
The Summit heard that with 52 countries now contributing to INTERPOL’s FTF database, information shared through its channels had increased six-fold in the last year, with some 5,000 foreign terrorist fighters identified so far in INTERPOL’s systems.The full report is available at: https://homeland.house.gov/news/reports/committee-unveils-foreign-fighter-task-forces-final-report.
Two former labor union officials charged with embezzlementRead the Press Release
WHEELING, WEST VIRGINIA – A federal grand jury returned indictments today charging two former labor union officials with embezzlement, United States Attorney William J. Ihlenfeld, II, announced.
Former President of the United Steelworkers Local Union 05-887, James Coffey, Jr., 54, of Bergholz, Ohio, allegedly utilized a business debit card to pay for personal expenses and wrote unauthorized checks to himself from a business bank account. He is charged with two counts of “Embezzlement from a Labor Union.” He faces up to five years in prison and a fine of up to $10,000 on each of the two counts. The United States Department of Labor Office of Labor Management Standards is investigating.
Former Business Manager of the Plumbers and Steamfitters Local Union 83, Jeffrey Beresford, 55, of Cameron, West Virginia, allegedly used his position as a trustee of the Wheeling Joint Apprenticeship program to write unauthorized checks to himself from the program’s bank account. He is charged with two counts of “Embezzlement from an Employee Benefit Plan.” He faces up to five years in prison and a fine of up to $250,000 on each of the two counts. The United States Department of Labor Office of Inspector General is investigating.
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 defendants.
Assistant U.S. Attorney David Perri is prosecuting the cases on behalf of the government.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Worcester Men Charged and Eight Firearms SeizedRead the Press Release
BOSTON – Two men were detained following initial appearances in U.S. District Court in Worcester today after being charged last week with illegal firearms possession.
Antwone Bennett, 21, and Darilton Matias, 21, both of Worcester, were charged in separate indictments with each being a felon in possession of a firearm or ammunition. Both defendants were detained following initial appearances before U.S. District Court Magistrate Judge David H. Hennessy.
According to the indictment, Bennett, a convicted felon, possessed four rounds of Winchester 357 MAG ammunition and two rounds of Hornady 357 MAG ammunition. On Oct. 1, 2015, Bennett was arrested on a Worcester street at which time officers recovered a loaded firearm that he was carrying. Matias, also a convicted felon, allegedly possessed a K.B.I. brand .380 caliber semi-automatic handgun. He was arrested on state charges in August 2015.
Although Bennett and Matias are not charged in relation to all of the firearms seized, in total, eight firearms were recovered during this joint operation which was initiated to combat gang violence in the Worcester area.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. If the defendants are determined to be armed career criminals, the statutes provides a mandatory minimum sentence of 15 years in prison and up to a lifetime, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State; Worcester Police Chief Gary J. Gemme; and Worcester County District Attorney Joseph D. Early, Jr., made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Cory Flashner of Ortiz’s Worcester Branch Office.
The details contained in the indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Sentenced for Roles in Prescription Drug Smuggling RingRead the Press Release
The Department of Justice announced today that two Athens, Texas, residents have been sentenced for their role in the smuggling of imitation, unapproved and misbranded prescription drugs from China.
Tom Giddens, 57, and Wanda Hollis, 63, were each sentenced to serve 15 months in prison by U.S. District Court Judge Michael H. Schneider in the Eastern District of Texas. In April 2015, they each pleaded guilty to one count of conspiracy to smuggle the drugs into the United States. A third defendant, Catherine Nix, 42, also of Athens, will be sentenced at a later date.
In 2009, the defendants smuggled at least 43 known shipments, totaling approximately 106,000 pills, from China to Texas. The shipments contained unapproved, bogus versions of several U.S. Food and Drug Administration (FDA)-approved drugs that, because of the health and safety risks associated with their use, require valid prescriptions to dispense. The prescription drugs seized included: Xanax®; Valium®; sibutramine; Cialis®; Viagra®; and, Stilnox®, marketed in the United States as Ambien®. None of the pills that were seized and tested were legitimate. Some were sub-potent, but most contained entirely different active ingredients from the legitimate, approved versions. The defendants also attempted to conceal their smuggling by using shipping labels that misrepresented the contents of their shipments, including customs declarations falsely describing the contents as “gifts” or “toys” with low declared monetary values, and by using multiple addresses in an effort to reduce the likelihood of seizures by U.S. Customs and Border Protection authorities.
“Consumers of prescription drugs need to know that what they are buying is legitimate, safe, and approved,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This illegal operation introduced over 100,000 bogus pills into the stream of commerce, potentially posing a huge public health and safety risk. Consumers should know that the drugs they are buying are exactly what they appear to be, and not false versions of name-brand products that could ultimately do them more harm than good.”
“This office remains committed to stemming the increasing flood of illegitimate prescription drugs that come into East Texas,” said U.S. Attorney John M. Bales of the Eastern District of Texas. “This case puts the very real, inherent dangers of counterfeit prescription drugs on full display. These pills looked almost exactly like their legitimate counterparts, but lacked any of the safety or efficacy of the legitimate versions.”
“FDA’s laws are in place to ensure that consumers have access to safe and effective prescription drugs,” said Director George M. Karavetsos of the FDA’s Office of Criminal Investigations. “Those who evade those laws risk harming the public’s health. We will continue to work with our law enforcement partners to keep the U.S. marketplace free of illegitimate medical products.”
This case was investigated by the FDA-OCI and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The case was prosecuted by Assistant U.S. Attorney Allen Hurst of the Eastern District of Texas and by Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.
Two Sentenced for Roles in Prescription Drug Smuggling RingRead the Press Release
TYLER, Texas - U.S. Attorney John M. Bales announced today that two Athens, Texas residents have been sentenced for their role in the smuggling of imitation, unapproved and misbranded prescription drugs from China.
Tom Giddens, 57, and Wanda Hollis, 63, were each sentenced to serve 15 months in prison by U.S. District Court Judge Michael H. Schneider. In April 2015, they each pleaded guilty to one count of conspiracy to smuggle the drugs into the United States. A third defendant, Catherine Nix, 42, also of Athens, will be sentenced at a later date.
In 2009, the defendants smuggled at least 43 known shipments, totaling approximately 106,000 pills, from China to Texas. The shipments contained unapproved, bogus versions of several U.S. Food and Drug Administration (FDA)-approved drugs that, because of the health and safety risks associated with their use, require valid prescriptions to dispense. The prescription drugs seized included: Xanax®; Valium®; sibutramine; Cialis®; Viagra®; and, Stilnox®, marketed in the United States as Ambien®. None of the pills that were seized and tested were legitimate. Some were sub-potent, but most contained entirely different active ingredients from the legitimate, approved versions. The defendants also attempted to conceal their smuggling by using shipping labels that misrepresented the contents of their shipments, including customs declarations falsely describing the contents as “gifts” or “toys” with low declared monetary values, and by using multiple addresses in an effort to reduce the likelihood of seizures by U.S. Customs and Border Protection authorities.
“Consumers of prescription drugs need to know that what they are buying is legitimate, safe, and approved,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This illegal operation introduced over 100,000 bogus pills into the stream of commerce, potentially posing a huge public health and safety risk. Consumers should know that the drugs they are buying are exactly what they appear to be, and not false versions of name-brand products that could ultimately do them more harm than good.”
“This office remains committed to stemming the increasing flood of illegitimate prescription drugs that come into East Texas,” said U.S. Attorney John M. Bales of the Eastern District of Texas. “This case puts the very real, inherent dangers of counterfeit prescription drugs on full display. These pills looked almost exactly like their legitimate counterparts, but lacked any of the safety or efficacy of the legitimate versions.”
“FDA’s laws are in place to ensure that consumers have access to safe and effective prescription drugs,” said Director George M. Karavetsos of the FDA’s Office of Criminal Investigations. “Those who evade those laws risk harming the public’s health. We will continue to work with our law enforcement partners to keep the U.S. marketplace free of illegitimate medical products.”
This case was investigated by the FDA-OCI and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The case was prosecuted by Assistant U.S. Attorney Allen Hurst of the Eastern District of Texas and by Trial Attorney John W.M. Claud of the Department of Justice, Civil Division’s Consumer Protection Branch.
Two Philadelphia Men Admit Roles in $5.8 Million Reloadable Debit Card Extortion ScamRead the Press Release
CAMDEN, N.J. - Two Philadelphia men today admitted their roles in a conspiracy to extort victims to load prepaid debit cards with funds that were stolen as part of the scheme, U.S. Attorney Paul J. Fishman announced.
Alpeshkumar Patel, 31, and Vijaykumar Patel, 40, each pleaded guilty before U.S. District Judge Renée Marie Bumb to separate informations charging them with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Alpeshkumar Patel and Vijaykumar Patel admitted that from September 2013 through March 2014, they were part of a conspiracy to steal money using reloadable debit cards. First, conspirators would purchase reloadable Green Dot Cards, and register them in names other than their own. The conspirators contacted victims by phone and used threats or deceit to induce them to put money on MoneyPak cards, which are used along with assigned PIN codes to add funds to Green Dot Cards.
Alpeshkumar Patel and Vijaykumar Patel admitted that they obtained the Green Dot Cards and used them to purchase money orders. Afterwards, they deposited the funds into bank accounts associated with the scheme.
Phone numbers and IP addresses connected with the conspiracy were tied to approximately 2,500 Green Dot Cards that were funded in excess of $5.8 million.
The conspiracy to commit wire fraud charge to which Alpeshkumar Patel and Vijaykumar Patel pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Jan. 15, 2016.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the Joint Terrorism Task Force, under the direction of FBI Special Agent in Charge Richard M. Frankel in Newark, and FBI Special Agent in Charge William F. Sweeney Jr. in Philadelphia, as well as special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly in Newark, with the investigation leading to today’s pleas.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense Counsel:
Alpeshkumar Patel: Alyssa A. Cimino Esq., Fairfield, New Jersey
Vijaykumar Patel: James A. Plaisted Esq., Roseland, New Jersey
Two Grape Street Crips Members Admit Dealing Crack-Cocaine in Newark, New JerseyRead the Press Release
NEWARK, N.J. – Two members of the Grape Street Crips gang admitted their roles in a two-year conspiracy to distribute crack-cocaine in and around Newark, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Monesha Johnson, a/k/a “Smoove,” 35, of Newark, New Jersey, pleaded guilty today before U.S. District Judge Jose Linares in Newark federal court to an information charging her with one count of conspiring to distribute crack-cocaine. Willie Brooks, a/k/a “Animal,” 24, also of Newark, pleaded guilty yesterday before Judge Linares to a separate information charging him with one count of conspiring to distribute crack-cocaine.
In May 2015, over the course of three weeks, 50 alleged members and associates of the Grape Street Crips were charged in criminal complaints that alleged drug-trafficking, physical assaults and witness intimidation. The charges are the result of a long-running investigation led by the DEA and FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics. Over the course of the entire investigation, 71 defendants have been charged with federal and state charges.
According to documents filed in this case and statements made in court:
Johnson and Brooks both admitted that between May 2013 and May 4, 2015, they conspired with others to distribute 28 grams of crack-cocaine in and around the area of 6th Avenue and North 5th Street, in Newark.
The drug distribution conspiracy charge to which Johnson and Brooks pleaded guilty carries a statutory minimum of five years in prison and maximum potential penalty of 40 years in prison. Sentencing for Johnson and Brooks is scheduled for Jan. 15, 2016 and Dec. 15, 2015, respectively.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the pleas. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Essex County Sheriff’s Office under the direction of Armando B. Fontoura, for their work.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Defense counsel:
Johnson: Timothy Anderson Esq., Red Bank, New Jersey
Brooks: John P. McDonald Esq., Somerville, New Jersey
Two Former Anamosa Prison Correctional Officers Charged with Federal Extortion and Firearms OffensesRead the Press Release
CEDAR RAPIDS – Two former Anamosa State Penitentiary correctional officers have been charged with federal offenses, while two others will be charged in state court. The criminal activity surrounding these charges involved accepting money to smuggle cell phones into the prison for prisoner use, being unlawful drug users in possession of firearms, and possessing controlled substances. Anamosa penitentiary officials learned of this illegal activity and immediately began an investigation, enlisting the assistance of the Iowa Division of Criminal Investigation. The Federal Bureau of Investigation also joined in the investigation.
Two former correctional officers have been charged with federal crimes. Garrett Barton, age 29, from Anamosa, Iowa, has been charged by Criminal Information to one count of Hobbs Act extortion, that is taking money to smuggle cell phones into the prison for prisoner use, and to one count of being an unlawful drug user in possession of firearms. Ethan Darrow, age 29, also from Anamosa, Iowa, was also charged by Criminal Information with one count of being an unlawful drug user in possession of firearms.
In agreements with the United States, two other former correctional officers, Marques Maryland, age 38, from Cedar Rapids, Iowa, and Seth Vogel, age 28, from Marion, Iowa, have agreed to plead to state charges of possessing controlled substances. These pleas will be made in Jones County, Iowa.
United States Attorney for the Northern District of Iowa Kevin W. Techau stated, “Prison safety depends on prison personnel acting with honesty and integrity… smuggling drugs and other contraband to inmates undermine that safety and make an inherently dangerous environment more dangerous.”
In connection with this investigation, Samuel Foster, age 29, from North Liberty, Iowa, was charged by Criminal Complaint with being an unlawful drug user in possession of a firearm. He was not employed by the Anamosa State Penitentiary.
The public documents allege that in 2014, while employed as a correctional officer at the Anamosa State Penitentiary, Garrett Barton used his position to smuggle cell phones into the Penitentiary for inmates in exchange for cash payments. Cell phones are considered contraband which inmates are prohibited from possessing. In the course of investigating this activity, authorities also learned that Barton possessed firearms while being an unlawful user of marijuana and prescription controlled substances not prescribed to him. He also traded controlled substances for other controlled substances with other correctional officers. The investigation further revealed former correctional officer Ethan Darrow used controlled substances, including marijuana, cocaine, and prescription controlled substances, and used and traded drugs with Barton and other correctional officers, including Seth Vogel. Barton also conspired with his source of drugs, Samuel Foster, to sell marijuana to correctional officer Marques Maryland. Barton, Darrow, Vogel and Maryland were unlawful drug users in possession of firearms when they served guard tower duty at the prison while possessing AR-15 assault rifles.
Samuel Foster was charged by criminal Complaint filed in federal court on October 1, 2015. The Complaint alleges that in April 2015, North Liberty Police Officers executed search warrants at his residence and storage garage located in that city. Officers recovered, among other things, approximately 530 grams of marijuana, 156 hydromorphone pills (a Schedule II controlled substance), drug use paraphernalia, and a stolen .32 caliber revolver. Another search of Foster’s storage garage in Cedar Rapids, Iowa, uncovered approximately 123 grams of marijuana and a stolen .22 caliber rifle. The Complaint alleges that Foster admitted to being an unlawful user of marijuana and to selling it for between $3,200 and $3,300 per pound. The Complaint summarizes text messages between Foster and others, including Barton, regarding selling marijuana to Barton and Maryland.
As for Garrett Barton, a Criminal Information was filed on this date. He is scheduled to make his initial appearance and enter a guilty plea to both counts on October 13, 2015. Barton faces a possible maximum sentence of 30 years’ imprisonment, a $500,000 fine, $200 in special assessments, and eight years of supervised release following any imprisonment.
Ethan Darrow entered his guilty plea in federal court on October 5, 2015. Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Darrow remains free on conditions set by the court pending sentencing. Darrow faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
Marques Maryland and Seth Vogel are required by the terms of their federal agreements to enter guilty pleas to possession of controlled substances in the Iowa District Court for Jones County. Maryland and Vogel each face a possible maximum state sentence of six-months’ imprisonment and a fine of up to $1,000.
Samuel Foster appeared yesterday in federal court in Cedar Rapids and was ordered detained by Chief Magistrate Judge Jon S. Scoles pending presentation of the case to the federal grand jury. Foster faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney C.J. Williams and Special Assistant United States Attorney Erin Eldridge, and was investigated by Anamosa State Penitentiary, the Iowa Division of Criminal Investigation, the Federal Bureau of Investigation, and North Liberty Police Department.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number for the federal court filings are: Garrett Barton (15-CR-00091); Ethan Darrow (15-CR-00090); and, Samuel Foster (15-mj-296).
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Three Ocean Shipping Executives Indicted for Fixing Prices and Rigging BidsRead the Press Release
Three former ocean freight executives have been indicted for participating in a long-running price-fixing conspiracy. These executives – Yoshiyuki Aoki, Masahiro Kato and Shunichi Kusunose – have been charged with allocating customers and routes, rigging bids and fixing prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. The affected cargo included cars, trucks, construction equipment and agricultural equipment.
Aoki, formerly of Kawasaki Kisen Kaisha (K-Line), and Kato and Kusunose, formerly of Nippon Yusen Kabushiki Kaisha (NYK), are among seven executives who have been charged in the investigation so far. Four have pleaded guilty and been sentenced to prison. NYK, K-Line and one other company have also pleaded guilty and paid more than $136 million in criminal fines.
“The companies and executives who conspired to restrict competition and raise prices for shipping these products must be held accountable,” said Assistant Attorney General Bill Baer of the Antitrust Division. “We previously charged NYK and K-Line for their role in this long-running conspiracy. Today we are continuing our effort to ensure that the executives at those companies who orchestrated the ocean shipping conspiracy face the consequences as well.”
“These felony charges indicate to those intent on corrupting our economy they will be identified and brought to justice,” said Special Agent in Charge Kevin Perkins of the FBI’s Baltimore Division. “Our job is to protect victims who don’t see these crimes occurring, but who always end up paying the price.”
The indictment, which was returned by a grand jury in the District of Maryland, charges Aoki with participating in the conspiracy from at least as early as 2001 until at least September 2012; Kato with participating from at least as early as April 2002 until at least September 2012; and Kusunose with participating from at least as early as April 2004 until at least September 2012.
An indictment is a formal charging document and defendants are presumed innocent until proven guilty.
This investigation is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.
Aoki et al Indictment (491.73 KB)
Three More Individuals Charged with Conspiring to Manufacture Marijuana in Rockford Warehouse on 11th StreetRead the Press Release
ROCKFORD — A federal grand jury in Rockford returned a superseding indictment today charging seven individuals, six men and a woman, with conspiring to manufacture, possess and distribute 1,000 or more marijuana plants. The superseding indictment charges four individuals, JEREMIAH N. CLEMENT, 37, of Des Plaines, Ill., GEORGE H. BACUS, 51, of Niles, Ill., YOUSIF Y. PIRA, 62, of Chicago, Ill., and JUSTIN T. PAGLUSCH, 33, of Ingleside, Ill., who had previously been indicted on April 21, 2015, and three additional individuals, SHLIMON SHIMON, 47, of Chicago, Ill., CASEY WILLIAMS, 28, of Great Falls, Mont., and DESTINY FREEMAN, of Palmer, Alaska. The indictment alleges that between Jan. 2, 2013, and Jan. 6, 2015, the defendants conspired to illegally grow and store marijuana in a warehouse located at 1916 11th Street in Rockford. The warehouse was destroyed by a fire on Jan. 6, 2015.
Arrest warrants were issued for Shimon, Williams and Freeman and they are still at large. Clement, Bacus and Pira were arrested in April 2015. Clement is in federal custody and Bacus and Pira were released pending trial. An arrest warrant for Paglusch was issued on April 21, 2015, and he is still at large. The ATF has offered a $5,000 reward for information leading to Paglusch’s arrest. Call ATF Tip Line – 1-888-ATF-TIPS or 1-888-283-8477.
The charge carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison and a maximum fine of $10 million. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is only a charge and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Derek Bergsten, Chief of the Rockford Fire Department. The Winnebago County Sheriff’s Department Narcotics Unit and Rockford Police Department Narcotics Unit assisted in the investigation.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Superseding Indictment
Swiss Asset Management Firm Finacor SA Reaches Resolution with Justice DepartmentRead the Press Release
The Department of Justice announced today that Finacor SA, a Swiss asset management firm, has reached a resolution with the department through a non-prosecution agreement.
Finacor submitted a Letter of Intent to participate as a Category 2 bank in the department’s Swiss Bank Program. Although it was ultimately determined that Finacor was not eligible for the Swiss Bank Program due to its structure largely as an asset management firm, the firm is required under today’s agreement to fully comply with the obligations imposed under the terms of that program. Under the terms of the agreement, Finacor is required to:
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Make a complete disclosure of its 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 regarding other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay a penalty of $295,000.
Finacor agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute Finacor for tax-related criminal offenses.
“Today’s agreement reflects the department’s willingness to reach fair and appropriate resolutions with entities that come forward in a timely manner, disclose all relevant information regarding their illegal activities and cooperate fully and completely, including naming the individuals engaged in criminal conduct,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Through the Swiss Bank Program, we have received information not just about culpable banks, but also asset management and investment advisory firms that played a role in the concealment of U.S.-related accounts and the evasion of U.S. taxes. Now is the time for these firms to come forward, accept responsibility for their actions and reach a resolution with the department.”
Finacor was established in Basel, Switzerland, in 1945, and is a corporation organized under the laws of Switzerland. It operates a small, privately-held asset management business in one office in Basel with five employees. Finacor is licensed as a broker-dealer by the Swiss Financial Market Supervisory Authority (FINMA). Although it is not a custodian bank, Finacor manages client assets held at other custodian banks.
For decades prior to and through in or about 2013, Finacor conducted a U.S. cross-border asset management business that aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts. Finacor offered two types of accounts: asset management accounts and fiduciary accounts. For both types of accounts, Finacor managed client assets but held them at custodial banks in Switzerland. Initially, the majority of client funds were held by Finacor at UBS. However, after UBS notified Finacor in July 2008 that it would no longer service the accounts of U.S. citizens without an IRS Form W-9, Finacor transferred its undeclared U.S. client accounts to a Swiss Bank Program Category 2 bank.
For asset management accounts, client assets were held in the names of the clients at the custodian bank. For these accounts, the Know Your Customer rules applied to the custodian bank and not to Finacor. For fiduciary accounts, client assets were held in Finacor’s name at the custodian bank. This provided Finacor clients with an additional degree of anonymity. For these accounts, the custodian banks did not know the identity of the clients. Consequently, the Know Your Customer rules and Qualified Intermediary (QI) requirements applied to Finacor and not the custodian banks. Finacor knew that its fiduciary accounts services allowed U.S. clients to conceal their ownership of money held at its custodian banks in Switzerland from those custodian Swiss banks and, in turn, the Internal Revenue Service (IRS).
Finacor used a variety of means to assist U.S. clients in concealing their undeclared accounts, including by:
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Providing fiduciary account services that concealed the identity of its clients, including U.S. clients, from its custodian banks in Switzerland;
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Holding account-related mail at Finacor for clients, including U.S. clients, to keep mail regarding their undeclared accounts from being sent to the U.S.;
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Sending checks to the United States in amounts below $10,000 to assist clients in avoiding U.S. currency transaction reporting requirements;
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Using code words for money transfers to conceal the repatriation of undeclared assets and income back into the United States; and
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For the purpose of subverting its QI Agreement with the IRS, divesting U.S. securities from its undeclared U.S. accounts and avoiding having to disclose the identities of U.S. clients to the IRS under its QI Agreement.
Since Aug. 1, 2008, Finacor managed 11 U.S. accounts with peak aggregate assets under management of $14.6 million. The 11 U.S. accounts consisted of two asset management and nine fiduciary accounts. All of Finacor’s undeclared U.S. accounts have entered the IRS Offshore Voluntary Disclosure Program (OVDP). Moreover, Finacor obtained waivers of Swiss bank secrecy for all of its U.S. accounts and provided client names and other identifying information for those accounts to the U.S. government. Finacor has closed all of its U.S.-related fiduciary accounts or converted them to asset management accounts and intends to relinquish its broker-dealer license by the end of 2015. Without a broker-dealer license, Finacor cannot operate fiduciary accounts.
Finacor has committed to providing full cooperation to the U.S. government and has made timely and comprehensive disclosures regarding its U.S. cross-border business consistent with the Swiss Bank Program’s requirements and deadlines. Among other things, Finacor provided customer names and other identifying information for the majority of U.S. accounts as evidence that the account is participating in the OVDP or declared to the IRS, as well as for use in other potential department investigations. Finacor also provided the name and information of the relationship manager primarily responsible for servicing U.S. clients and the external asset manager who managed several of Finacor’s U.S. client accounts, in satisfaction of the Swiss Bank Program requirements.
“Agreements like that with Finacor SA redefine international tax compliance initiatives and have far-reaching, global implications,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The American public can expect that we will use all of the information we are gathering to vigorously pursue individual U.S. taxpayers who illegally conceal assets offshore and to develop innovative strategies to combat international tax evasion worldwide.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS Large Business & International Division for their substantial assistance. Ciraolo also thanked Kevin F. Sweeney, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters 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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Supervised Release Revoked for Former Kankakee County Board Member, Pembroke Township SupervisorRead the Press Release
Peoria, Ill. - Supervised release for former Kankakee County Board member and Pembroke Township Supervisor Larry Dean Gibbs was revoked at a hearing on Friday, Oct. 2, 2015, before Chief U.S. District Judge James E. Shadid in Peoria. Gibbs, 54, was sentenced to serve nine months in federal prison after pleading guilty to violating terms of his supervised release. Judge Shadid ordered that Gibbs report to the federal Bureau of Prisons on Nov. 2, 2015, to begin serving the sentence.
Gibbs was serving a one-year term of supervised release following completion of his prison sentence for filing a false income tax return when a petition to revoke his supervised release was filed on June 4, 2015. Gibbs was sentenced on May 8, 2013, to 18 months in federal prison and ordered to pay restitution in the amount of $66,282 to the IRS, after pleading guilty to filing a false tax return for the 2005 tax year.
During the court hearing on Oct. 2, Gibbs admitted that he violated his supervised release when he traveled to Minnesota on May 22, 2015, without the prior permission of his probation officer, and that he failed to report that he had been arrested for various traffic violations in Woodbury, Minn.
On June 3, 2015, Gibbs filed a document in U.S. District Court in Urbana to advise the court that Larry Dean Gibbs was “deceased and cannot speak, or appear.” The notice further stated that “further information must be referred to Minister Mulumbua Humraukn El Taikaem Bey, Executor.” In a document filed in Kankakee County Circuit Court on Apr. 30, 2015, an order for Change of Name was entered by Judge Ronald Gerts to change Gibbs’ name from Larry Dean Gibbs to Mulumbua Humraukn El, Taikaem Bey.
The case was prosecuted by Assistant U.S. Attorney Eugene L. Miller.
Stamford Podiatrist Pleads Guilty to Submitting False Medicare Claims, Also Pays 288K in Civil SettlementRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that AMIRA MANTOURA, 53, of Greenwich, waived her right to indictment and pleaded guilty yesterday in Hartford federal court to one count of making a false statement to the Medicare program. In pleading guilty, MANTOURA, a Stamford-based podiatrist, admitted that she submitted false claims to Medicare, Medicaid and private insurance companies.
According to court documents and statements made in court, MANTOURA, a Doctor of Podiatric Medicine, operates a podiatry practice at 95 Morgan Street in Stamford. As a podiatrist, she was fully aware and understood the procedure to perform a “nail avulsion” and she understood that a nail avulsion was a surgical procedure to treat an ingrown toenail. Between January 2009 and August 2013, MANTOURA knowingly submitted materially false claims to the Medicare program and to private insurance companies to obtain payment for a nail avulsion when defendant knew that she had not performed a nail avulsion. Rather than perform a nail avulsion, in most of these instances MANTOURA had merely provided her patients with routine foot care including clipping the patients’ toenails.
As a result of submitting false claims to the Medicare and Medicaid programs and private insurance companies, MANTOURA was paid approximately $195,000.
MANTOURA is scheduled to be sentenced by U.S. District Judge Michael P. Shea on December 28, 2015, at which time she faces a maximum term of imprisonment of five years, a maximum fine of more than $380,000 and an order of restitution.
In a related civil settlement, MANTOURA has paid $288,538.24 to the government in connection with her submission of false claims to the Medicare and Medicaid program. On October 1, 2015, MANTOURA was excluded from the Medicare program and will no longer be permitted to submit federal health care claims.
This matter was investigated by the U.S. Department of Health and Human Services, Office of Inspector General. The case is being prosecuted by Senior Litigation Counsel Richard J. Schechter, and the civil settlement was handled by Assistant U.S. Attorney Anne F. Thidemann.
U.S. Attorney Daly encourages individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 777-6311 or. 1-800-HHS-TIPS.
Sister and brother pair indicted in bankruptcy fraud schemeRead the Press Release
Evansville – United States Attorney Josh Minkler announced today, Patricia Bippus-Allen, 56, and her brother David Bippus, 66, both of Evansville were indicted on multiple counts relating to a bankruptcy fraud scheme.
“Using the bankruptcy system and government resources to further one’s own selfish and fraudulent scheme will not be tolerated,” said Minkler. “If you intentionally waste the government’s limited judicial resources, you will be held strictly accountable.”
In September 2010, Bippus-Allen filed a joint chapter 13 petition in both her and her husband’s name in United States Bankruptcy Court for the Southern District of Indiana. This was done without her husband’s consent, knowledge or authorization. During the course of the bankruptcy, Bippus-Allen created several documents with a forged signature of her husband of over 25 years.
Bippus-Allen also provided her bankruptcy attorney with a letter from a doctor stating her husband was under his care and would be in the hospital for at least 30 days and could not see visitors or take phone calls. The doctor who purportedly signed the letter stated it was a forgery and that he had never provided services for her husband.
In March 2011, Bippus-Allen attended a 341 meeting of creditors at which her husband was required to attend as well. David Bippus, her brother, attended the meeting with Bippus-Allen and posed as Bippus-Allen’s husband. Bippus-Allen and David Bippus both stated under oath that he was the husband and that all schedules and documents filed in the bankruptcy were true and correct.
Based on the representations made by Bippus-Allen and David Bippus, a bankruptcy plan was confirmed requiring monthly payments for 60 months. Pursuant to this plan, approximately $74,000 was deducted from the paychecks of Bippus-Allen’s husband without his consent or knowledge.
Further, Bippus-Allen was charged with several counts of wire fraud for transferring money from her husband’s 401 (k) account without his consent, knowledge, or authorization. Bippus-Allen made multiple calls to the 401(k) service center purporting to be her husband while also faxing supporting documentation to the service center for the 401(k) hardship withdrawal. The supporting documentation included records purportedly from a dental office which were determined to not be genuine business records.
This investigation was conducted by the Federal Bureau of Investigation and the Bankruptcy Fraud Working Group.
“I am grateful to U.S. Attorney Minkler and our law enforcement partners for their strong commitment to combating fraud and abuse in the bankruptcy system as evidenced by the charges announced today, “ stated Nancy J. Gargula, U.S. Trustee for Indiana, Central Illinois and Southern Illinois (Region 10).
According to Assistant United States Attorneys Kyle M. Sawa and Todd Shellenbarger, who are prosecuting this case for the government, Bippus-Allen could face decades in prison if convicted on all counts. David Bippus faces up to five years on each count if convicted.
An indictment is only a charge and all defendants are innocent until proven guilty beyond a reasonable doubt in federal court.
Seagoville Inmate Who Possessed a Coloring Book Containing Obscene Visual Representations of the Sexual Abuse of Children is Sentenced to 10 Years in Federal PrisonRead the Press Release
DALLAS — An inmate who admitted possessing obscene visual representations of the sexual abuse of children while he was incarcerated at Seagoville Federal Correctional Institute (FCI) was sentenced yesterday, announced U.S. Attorney John Parker of the Northern District of Texas.
Danny Borgos, 27, formerly of Nyack, New York, was sentenced by U.S. District Judge David C. Godbey to 10 years in federal prison. He was in Seagoville FCI serving a federal prison sentence for a federal conviction in the Southern District of New York for receiving, distributing and possessing child pornography.
According to documents filed in the case, on October 9, 2014, a Bureau of Prisons (BOP) guard found Borgos with a paginated series of drawings, consisting of 37 pages in a comic or coloring book-style format, depicting obscene representations of minors engaged in sexually explicit conduct. Borgos admitted the depictions belonged to him
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI, with assistance from the BOP, investigated. Assistant U.S. Attorney Camille Sparks prosecuted the case.
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Rochester Man Sentenced for Enticing A MinorRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Roger Eric Powell, 48, of Rochester, NY, who was convicted of enticement of a minor using a means and facility of interstate commerce, was sentenced to 10 years in prison and 30 years of supervised release by U.S. District Judge Elizabeth Wolford.Assistant U.S. Attorney Tiffany H. Lee, who handled the case, stated that between January 2014 and January 2015, Powell used the Internet and a cellular telephone to communicate with a female who was under the age of 14 to entice the minor to engage in sexual activity with him. Specifically, the defendant used Facebook messenger to engage in sexually explicit chats with the minor. The communications led to Powell meeting with the minor to engage in sexual activity.
The sentencing is the result of an investigation by the Federal Bureau of Investigation’s Child Exploitation Task Force which includes the Monroe County Sheriff’s Office, the Rochester Police Department, and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
Richmond Man Convicted of Stealing Social Security Survivors’ BenefitsRead the Press Release
RICHMOND, Va. – Marcel Kiza, 58, of Richmond, was convicted today by a federal jury on charges of theft of government property.
Kiza was indicted on March 18, 2015. According to court records and evidence at trial, Kiza fraudulently obtained over $50,000 in Child’s Insurance Benefits as a representative payee under the name Marcel Kiza for two children whom he represented to be his deceased brother’s children. Evidence at trial showed that Kiza did not have a deceased brother, and that he created two identities in order to fraudulently receive Survivors’ Benefits for his own children. Evidence at trial showed that Kiza had originally entered the country under the name Amuri Ntambwe Kiza, until 2007 when he became a citizen and legally changed his name to Marcel Joshua Kiza. The government presented social security applications, customs and immigration documents, and a legal name-change petition. These documents showed the defendant using the same identifiers and, at times, both names. Additionally, a fingerprint examiner testified that a fingerprint impression taken in 2002 from Amuri matched a 2013 fingerprint taken from Marcel, and both of those fingerprints matched Kiza’s current fingerprint impressions.
Kiza faces a maximum penalty of 10 years in prison when sentenced on Jan. 7, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Rod Owens, Resident Agent-in-Charge, Social Security Administration, Office of Inspector General, made the announcement after the verdict was accepted by U.S. District Judge Robert E. Payne. Assistant U.S. Attorney Heather L. Hart and Special Assistant United States Attorney Margaret Reed are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-CR-46.
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Rhode Island Man Charged with Trafficking in Counterfeit Erectile Dysfunction MedicationRead the Press Release
BOSTON – A Pawtucket, R.I. man was charged today in U.S. District Court in Boston with trafficking in counterfeit drugs.
Ricky Lugo, 48, was charged in an Information with four counts of trafficking in counterfeit versions of erectile dysfunction medications, including Pfizer Inc.’s Viagra, Eli Lilly’s Cialis, and Bayer’s Levitra.
“The trafficking of counterfeit goods generates billions of dollars in the wallets of copycats and thieves,” said United States Attorney Carmen M. Ortiz. “Not only does it violate the trademarks that are intended to protect our nation’s intellectual property, but it also endangers people’s health and has the potential to inflict lasting harm.”
“Importing, selling or purchasing counterfeit products is not a victimless crime,” said Matthew Etre, Special Agent in Charge of HSI Boston. “Counterfeit pharmaceuticals present an even greater concern to businesses and consumers alike. Americans need to be able to trust the medications they ingest and Homeland Security Investigations will continue to work with our law enforcement partners to ensure the safety and security of the products consumers buy.”
“Counterfeit drugs are illegal. As with any other illegal drug, Postal Inspectors are committed to keeping them out of the U.S. Mail,” stated Acting Postal Inspector in Charge James V. Buthorn. “Counterfeit medications pose a serious threat to the American public ranging from grave health consequences to lack of efficacy. The men and women of the Postal Inspection Service work relentlessly to remove illegal drugs from the mail while bringing criminals who use the Postal Service to facilitate their crimes to justice.”
According to court documents, from June 2013 to March 2014, Lugo sold counterfeit Viagra, Cialis, and Levitra on Craigslist and in person. Lugo purchased the counterfeit pharmaceuticals from sources outside the United States, including from China. Lugo knew that the goods he was selling were counterfeit, but nonetheless sold and attempted to sell thousands of the tablets.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of up to $5 million on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz, HSI SAC Etre and Acting Postal Inspector Buthorn, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.
The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Readout of Assistant Attorney General for National Security John P. Carlin’s Address at Vanity Fair’s 2015 New Establishment SummitRead the Press Release
Today at Vanity Fair’s 2015 New Establishment Summit, Assistant Attorney General for National Security John P. Carlin and CEO of Sony Entertainment Michael Lynton had a moderated conversation with the President and CEO of the Aspen Institute, Walter Isaacson. They highlighted the growing threat posed by sophisticated computer intrusions to the entertainment industry and the economy at large, discussed the role the federal government can play in protecting companies before, during and after a serious hack and emphasized the importance of public-private partnerships to cybersecurity.
This was the first time that Carlin and Lynton were together on stage to discuss the unprecedented, state-sponsored network intrusion of Sony Pictures Entertainment in November 2014. Carlin and Lynton recounted the story of the hack and highlighted Sony’s valuable cooperation with law enforcement. They emphasized the role that public-private partnerships play in averting cyber hacks and mitigating their damage. Carlin said that Sony’s willingness to involve law enforcement immediately was “an important lesson that Sony did right.” “Literally within hours of the original breach – within the first 24 hours – Sony reached out and the FBI had a team go to Sony to assist,” Carlin added.
Carlin took this opportunity to stress the value of reaching out to law enforcement and making a connection early, before an intrusion takes place. “The reason [Sony] knew who to call is that they had a relationship where a high-level executive knew by name and by a face” their law enforcement contact.
To this end, Carlin announced an NSD outreach initiative to promote information sharing and resilience, as well as to help private companies protect themselves and respond to cyber intrusions. “In large part because of incidents like Sony, we’ve started a new outreach program,” Carlin said, “so that we are reaching out, preventively, to talk to people about best practices and what to think about before the attack happens.” Carlin highlighted that NSD recently named the first Director of the Outreach Program for the Protection of National Assets, Christine Kringer. This new position is the latest in a series of structural changes at NSD designed to reflect the division’s prioritization of combating cyber threats to the national security, as well as its counterintelligence and counterproliferation efforts. Last year, NSD charged a new Deputy Assistant Attorney General with oversight and coordination of the division’s protection of national assets program.
This focus on outreach complements the Justice Department’s national network of specially-trained National Security Cyber Specialists, and Computer Hacking and Intellectual Property coordinators who are available 24/7 to support companies as they face intrusions and online threats from a variety of sources in real-time.
Over the past 18 months, the Department of Justice has prioritized outreach efforts on cyber threats and cybersecurity, hosting discussions with the financial services sector in New York, addressing the Gaming Association in Las Vegas and conducting outreach to insurance companies, national labs, universities and the energy and transportation sectors. Through these efforts, Carlin and other senior Department of Justice officials have met with hundreds of c-suite executives, CIOs and CISOs, general counsels, outside lawyers and other corporate representatives to discuss the unique challenges companies face in today’s elevated threat environment.
Furthermore, the National Security Division continues to partner with the Criminal Division, the FBI and U.S. Attorney’s Offices to make joint visits and to participate in roundtables with companies to answer questions from both corporate security teams and in-house legal counsel. Carlin noted that the department is working to dispel the perception that law enforcement “comes in and seizes your servers,” and to show instead that they are “there to help and they very much respect the need of the business to get back to doing what it does.”
He closed his remarks by underscoring the Department of Justice’s commitment to overcoming perceived hurdles to cooperation and his own pledge to be responsive to the needs of private sector partners, whether they simply want to establish early lines of communication or call while under the strain of a continuing network breach.
Project Safe Childhood Initiative to Visit Frontier Regional SchoolRead the Press Release
BOSTON – On Wednesday, October 7th, students in the Frontier Regional School District will be participating in an assembly titled: Project Safe Childhood, presented by the Department of Justice.
The presentation will include a variety of Internet safety topics including: digital footprints; cyberbullying; sextortion; Internet predators; and being safe and secure online. Presenters include members of the United States Attorney’s Office as well as federal agents from the Department of Homeland Security and the Federal Bureau of Investigation.
A special presentation about keeping kids safe and secure online will be held for parents and educators at 6:00 p.m. on Wednesday evening in the Frontier Regional School auditorium.
In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/
Physician Found Guilty of 82 CountsRead the Press Release
SAN JUAN, P.R. – On Monday, October 5, 2015, Aníbal Pagán-Romero, a general practitioner with a clinic in Quebradillas, Puerto Rico, was found guilty on all counts of an 82 count indictment charging 21 conspiracies and 61 individual counts of mail fraud from a scheme to defraud the American Life Assurance Company of Columbus, Georgia, better known as AFLAC. This conviction is the result of a lengthy investigation undertaken by the Federal Bureau of Investigations into multiple insurance fraud schemes in the Western region of Puerto Rico which resulted in the arrest and prosecution of hundreds of individuals.
Pagán-Romero was charged with 35 patients for perpetrating a scheme where he fraudulently signed AFLAC accidental insurance claim forms without examining the patients. The evidence presented at trial showed that from 2004 through 2009 Pagán-Romero caused an approximate loss of $2,000,000 to AFLAC through the claim forms filed with the other 35 co-defendants and approximate loss of $6,000,000 for all the AFLAC claim forms filed under Pagán-Romero’s signature. The 35 patients who were charged alongside Pagán-Romero had pled guilty to the charges prior to the commencement of trial.
The three-week trial before the Hon. Gustavo Gelpí included the testimony of three of the doctor’s employees and four patients who indicated that Pagán-Romero personally instructed them to submit the documents for his signature without examination. The evidence also showed that the scheme had grown so large and lucrative that Pagán-Romero had to hire two employees to do data entry full time in order to generate the thousands of AFLAC claim forms submitted for reimbursement under his signature. The evidence presented at trial revealed that Pagán-Romero would have been capable of pocketing $975,000 in cash during the five year conspiracy for signing the AFLAC claim forms at $10 per form.
Pagán-Romero is exposed to a term of imprisonment of up to 20 years for his crimes. The sentencing hearing is scheduled for January 19, 2016 and the defendant was remanded to the custody of the U.S. Marshals.
“This conviction marks yet another victory in our fight against fraud in Puerto Rico. I thank our team of prosecutors and our federal law enforcement partners for the teamwork they showed in leading us to a successful outcome today,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.
The case was prosecuted by Assistant United States Attorneys Dennise N. Longo and Julia Díaz-Rex.
Palmetto man pleads guilty to cocaine distribution conspiracyRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Palmetto man pleaded guilty Monday to his role in a conspiracy to distribute cocaine in St. Landry Parish.
Steven Paul Banks, 47, of Palmetto, La., entered a conditional guilty plea to one count of conspiracy to distribute more than 500 grams of cocaine and more than 28 grams of cocaine base before U.S. Magistrate Judge Patrick Hanna. The plea will become final when accepted by U.S. District Court Judge Richard T. Haik. According to evidence presented at the guilty plea, law enforcement agents recorded Banks and other co-conspirators from September to August of 2013 negotiating the purchase of cocaine for later sale in Melville, La.
Banks faces five to 40 years in prison, four to five years of supervised release and a $5 million fine. A sentencing date was not set.
The DEA conducted the investigation. Assistant U.S. Attorneys Howard C. Parker and Robert F. Moore are prosecuting the case.
Officer of Country Bancorporation Pleads Guilty to Stealing more than $800,000 from Banks Controlled by the CompanyRead the Press Release
An officer of Country Bancorporation who embezzled more than $800,000 from banks controlled by the company pled guilty today in federal court in Cedar Rapids.
Heidi Wagler, age 50, from Wayland, Iowa, was convicted of one count of embezzlement by a bank officer.
In a plea agreement, Wagler admitted that from June 2004 through October 2013, while she was an officer of Country Bancorporation, she embezzled at least $864,835 from the company. At the time Wagler was an officer of Country Bancorporation. The company controlled seven banks and Wagler was in charge of doing payroll for each of these banks. She was also a member of the Board of Directors of one of the banks and her husband, Russell Wagler, was the Director, President, and CEO of that same bank. Wagler further admitted that, although she was entitled to compensation from Country Bancorporation for doing the payroll for its banks, she paid herself excess compensation from each of the seven banks at various times over the course of her embezzlement. She also admitted that, from January 2008 through November 2013, she paid her husband additional compensation to which he was not entitled.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Wagler remains free on conditions of release set by the court pending sentencing. She faces a possible maximum sentence of 30 years’ imprisonment, a fine of up to twice the loss resulting from her offense, a $100 special assessment, and five years of supervised release following any imprisonment. Wagler could also be ordered to pay restitution to any victims.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the FBI and FDIC.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is 15-CR-00089.
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Oak Hill man sentenced to more than a year in Federal child pornography chargesRead the Press Release
CHARLESTON, W. Va. - United States Attorney Booth Goodwin announced that William A. Cracraft, 52, of Oak Hill, West Virginia was sentenced to twelve months and one day in federal prison for Possession of Child Pornography. Cracraft’s incarceration will be followed by 25 years of supervised release, and he will be required to register as a sex offender. As part of his plea agreement, Cracraft agreed to forfeit his computers and cell phones that contained child pornography for destruction. He was ordered to pay restitution in the amount of $18,500 to victims of his crime.
The investigation established that Cracraft was in possession of more than 600 photographs and videos of child pornography on his computers and cell phones, including sexually explicit depictions of prepubescent minors. Some of the images showed sadistic or masochistic conduct, while others depicted violence toward the minor children.
The Department of Homeland Security and the West Virginia State Police conducted the investigation. Assistant United States Attorney Erik S. Goes was responsible for the prosecution.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/usao/wvs/PSCpage.html.
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Nine Individuals Indicted for Bank FraudRead the Press Release
SAN JUAN, Puerto Rico– Nine individuals have been indicted for their alleged participation in a conspiracy to commit bank fraud, bank fraud, access devices fraud, and/or aggravated identity theft, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The United States Secret Service is in charge of the investigation. The indictment was unsealed today upon the arrest of the defendants.
The indictment, returned on October 1st, 2015 by a federal grand jury in the District of Puerto Rico, includes sixteen charges against the following individuals: Carlos Bauzó-Vázquez, aka “Carlitos;” Lesville Matos-Bauzó, aka “Billy;” Gloria Bauzó-Vázquez, aka “Milagritos;” Henry Pérez-Díaz; Laydy Mar Feliciano-Miranda; Héctor Vega-Rivera, aka “El Gringo;” José Díaz-Caraballo, aka “Timana;” David González-Ferrer; and Rafael González-Ferrer.
These charges stem from a scheme utilized by the defendants from approximately July 2014 to April 2015 to provide false employment, income, and residency information to Banco Popular de Puerto Rico in order to receive multiple personal loans and lines of credit. A member of the group would call Banco Popular’s Telebanco Popular service and request a loan using the name, birth date, and social security number of another defendant. During the course of the call, false information would be provided to the bank regarding where the person lived and worked. Further, false information would be provided regarding the person’s income.
Once the requested loan was approved pending the submission of supporting documentation, defendants would take false documents to the bank as evidence of the information provided via telephone. In particular, the defendants utilized fictitious companies and falsified payroll documents in support of the loan requests. Defendants would then cash the loan checks and distribute the cash to members of the conspiracy. This scheme was repeated multiple times. On at least one occasion, credit cards were requested using the same information and documentation fraudulently submitted to the bank for the loan. Members of the conspiracy then made cash advance withdrawals from bank branches and Automated Teller Machines (ATM’s).
The indictment alleges one count of conspiracy to commit bank fraud, a violation of Title 18, United States Code, Sections 1349 and 1344; nine counts of bank fraud, a violation of Title 18, United States Code, Section 1344, related to loan checks or cash advances fraudulently obtained from the bank; five counts of aggravated identity theft, of a violation of Title 18, United States Code, Section 1028A(a)(1), related to the possession and use without lawful authority of a means of identification in relation to bank fraud charged in the indictment; and one count of access devices fraud, a violation of Title 18, United States Code, Section 1029(a)(2), related to the use of unauthorized access devices, credit cards, obtained with intent to defraud. The total value of the fraud was approximately $92,600.
If found guilty, defendants face a maximum penalty of thirty years in prison for conspiracy to commit bank fraud and bank fraud, ten years in prison for access devises fraud, and a mandatory two year consecutive term in prison for aggravated identity theft.
The case is being investigated by the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney Seth Erbe.
Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty. The investigation is ongoing.
New York man charged with credit card fraudRead the Press Release
WHEELING, WEST VIRGINIA – A federal grand jury returned an indictment today charging Charles Manu, 23, of Bronx, New York, with credit card fraud, United States Attorney William J. Ihlenfeld, II, announced.
Manu was discovered in June 2015 in possession of multiple credit cards and gift cards that had been unlawfully recoded or reprogrammed with new account information. He is charged with one count of “Possession of Unauthorized Access Device.” 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 David Perri is prosecuting the case on behalf of the government. The West Virginia State Police and the United States Secret Service are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.Monroe County Man Sentenced to 41 Months in Prison for Federal Methamphetamine Trafficking ChargeRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Monroe County man was sentenced today to 41 months’ imprisonment by Senior United States District Judge Edwin M. Kosik for participating in a methamphetamine trafficking conspiracy.
According to United States Attorney Peter Smith, Emmanuel Tucker, age 39, of Stroudsburg, Monroe County, pleaded guilty in May 2015 to the charge of conspiracy to distribute methamphetamine.
Tucker was one of seven individuals indicted by a federal grand jury in April 2014 after a several month investigation conducted jointly by the Drug Enforcement Administration, the Pennsylvania State Police, the Pocono Mountain Regional Police Department and the Stroud Regional Police Department regarding methamphetamine trafficking in Monroe County.
Previously, Scott Borushak, age 51, of Stroudsburg, and Fred Baumgartner, age 34, of Kresgeville, pleaded guilty and admitted to participating in the same methamphetamine trafficking conspiracy. The charges against the remaining defendants are currently pending.
In addition to the prison term, Senior Judge Kosik also ordered that Tucker be supervised by a probation officer for three years following his release from prison.
The cases are being prosecuted by Assistant United States Attorney Robert J. O’Hara.
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Mexican national pleads guilty to lying on passport applicationRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Mexican national pleaded guilty Monday to submitting false information when applying for a passport.
Federico Vargas Mares, 28, of Mexico, entered a conditional guilty plea for one count of false statement on a passport application before U.S. Magistrate Judge Patrick Hanna. The plea will become final when accepted by U.S. District Judge Richard T. Haik. According to the guilty plea, Mares filed an application at the Iberia Parish Clerk of Court in New Iberia, La., on May 17, 2013 under a different name. He also listed his home of origin as Puerto Rico instead of Mexico. After further investigation, it was discovered that the defendant had multiple immigration-related arrests and was charged with smuggling aliens in January of 2006. He was removed from the United States in October of 2007 and was barred from returning.
Mares faces 10 years in prison, three years of supervised release and a $250,000 fine. A sentencing date was not set.
Homeland Security Investigations and the Diplomatic Security Service conducted the investigation. Assistant U.S. Attorney Jamilla A. Bynog is prosecuting the case.
Methamphetamine Trafficker Sentenced to 15 Years in PrisonRead the Press Release
GREENEVILLE, Tenn. -- On Oct. 6, 2015, Daniel Martinez, Jr., 39, of Morristown, Tenn., was sentenced to serve 15 years in federal prison by the Honorable R. Leon Jordan, U.S. District Judge. Upon his release from prison, Martinez will serve a 10 year period of supervised release.
Martinez pleaded guilty to a federal grand jury indictment charging him with conspiring to distribute methamphetamine. He admitted to obtaining methamphetamine from sources of supply near Atlanta, Ga., as well as Bakersfield, Calif., and distributing the drug in the Eastern District of Tennessee. Martinez admitted that the drug trafficking network grew out of relationships formed in the over-the-road truck industry and that the conspirators had been trafficking methamphetamine for several years prior to their indictment.
Three others were indicted along with Martinez and have each pleaded guilty to conspiring to distribute methamphetamine. Randy Dean, 49, of Greeneville, Tenn., was sentenced in October 2015 to serve 97 months in prison. Amanda Norton, 36, of Morristown, Tenn., and Terry Mulkey, 49, of Calhoun, Ga., are awaiting sentencing.
The investigation into the drug trafficking of Martinez and his conspirators was the collaborative effort of several law enforcement agencies including the Greene County Sheriff’s Office, Morristown Police Department, Third Judicial Drug Task Force, Tennessee Bureau of Investigation, U.S. Department of Homeland Security Investigations, and Drug Enforcement Administration. The Third Judicial District Attorney’s Office also provided assistance in the prosecution of the case. Assistant U.S. Attorney J. Christian Lampe represented the United States.
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Massachusetts Man Sentenced to 37 Months in Prison for Trafficking Counterfeit Military GoodsRead the Press Release
A Massachusetts man was sentenced today to 37 months in prison for importing thousands of counterfeit integrated circuits (ICs) from China and Hong Kong and reselling them to U.S. customers, including contractors supplying them to the U.S. Navy for use in nuclear submarines.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Deirdre M. Daly of the District of Connecticut, Special Agent in Charge Matthew J. Etre of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in New England, Special Agent in Charge Craig W. Rupert of the Defense Criminal Investigative Service (DCIS) Northeast Field Office and Special Agent in Charge Leo Lamont of the Naval Criminal Investigative Service (NCIS) Northeast Field Office made the announcement.
Peter Picone, 42, of Methuen, Massachusetts, pleaded guilty on June 3, 2014, to conspiracy to traffic in counterfeit military goods. In addition to imposing the prison term, U.S. District Judge Alvin W. Thompson of the District of Connecticut ordered Picone to pay $352,076 in restitution to the 31 companies whose ICs he counterfeited, and to forfeit $70,050 and 35,870 counterfeit ICs.
“Picone risked undermining our national security so that he could turn a profit,” said Assistant Attorney General Caldwell. “He sold counterfeit integrated circuits knowing that the parts were intended for use in nuclear submarines by the U.S. Navy, and that malfunction or failure of the parts could have catastrophic consequences.”
“Supplying counterfeit electronic components to the U.S. Military is a serious crime,” said U.S. Attorney Daly. “Individuals who choose profit over the health and safety of the men and women of our armed services will be prosecuted.”
“Counterfeit electrical components intended for use in U.S. military equipment put our service members in harm’s way, and our national security at great risk,” said Special Agent in Charge Etre. “HSI will continue to aggressively target individuals and companies engaged in this type of criminal act.”
“The sentencing today demonstrates the continued efforts of the Defense Criminal Investigative Service and our fellow law enforcement partners to protect the integrity of the Department of Defense's infrastructure,” said Special Agent in Charge Rupert. “Distributors who opt for financial gain by introducing counterfeit circuitry into the supply chain of mission critical equipment create an environment ripe for potential failures. Such disregard puts the warfighter at an unnecessary risk, ultimately impacting the mission readiness of our military that the nation depends on. DCIS will continue to shield America's investment in Defense by addressing all attempts to disrupt the reliability of our military's equipment and processes.”
“The U.S. Navy submarine force is a critical component of our national security,” said Special Agent in Charge Lamont. “Protecting the Sailors who make up that force and their supply lines are top priorities for NCIS, to ensure our strategic deterrent remains effective.”
In April 2005, Picone founded Tytronix Inc., and served as its president and director until August 2010, when the company was dissolved. In addition, from August 2009 through December 2012, Picone owned and operated Epic International Electronics (Epic) and served as its president and director.
In connection with his guilty plea, Picone admitted that, from February 2007 through April 2012, first through Titronix and later through Epic, he purchased millions of dollars’ worth of ICs bearing the counterfeit marks of approximately 35 major electronics manufacturers, including Motorola, Xilinx and National Semiconductor, from suppliers in China and Hong Kong. Picone admitted that he resold the counterfeit ICs to customers both in the United States and abroad, including to defense contractors that Picone knew intended to supply the counterfeit ICs to the U.S. Navy for use in nuclear submarines, among other things. Picone further admitted that he knew that malfunction or failure of the ICs likely would cause impairment of combat operations and other significant harm to national security.
On April 24, 2012, federal agents searched Picone’s business and residence, and recovered 12,960 counterfeit ICs. In connection with his guilty plea, Picone admitted that he intended to sell the seized counterfeit ICs to defense contractors doing business with the Navy for use in military applications.
The case was investigated by the Defense Criminal Investigative Service, the NCIS and ICE-HSI. The case is being prosecuted by Senior Counsel Kendra Ervin and Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), Assistant U.S. Attorney Sarala Nagala and Special Assistant U.S. Attorney Carol Sipperly of the District of Connecticut, Trial Attorney Anna Kaminska of the Criminal Division’s Fraud Section and Trial Attorney Kristen Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The CCIPS Cybercrime Lab provided significant assistance.
The enforcement action announced today is related to the many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). The IP Task Force supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state, and local law enforcement partners, and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
Manhattan U.S. Attorney, ATF, and NYPD Announce Arrest of Three Individuals for Firearms TraffickingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the New York Division of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of two individuals charged with firearms trafficking in the Bronx, New York, and one individual charged with firearms trafficking, narcotics distribution, and possession of a firearm during a narcotics offense. The defendants will be presented later today before the Honorable James C. Francis, IV, United States Magistrate Judge.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants brought more than 50 guns into New York so that they could sell them on the streets of the Bronx. Together with our law enforcement partners, we will continue to work to rid our neighborhoods of illegal guns.”
ATF Special Agent-in-Charge Delano A. Reid, stated: “In these especially chaotic times, with firearm related violence pervasive in our society, I am extremely pleased to see that the assigned investigators and prosecutors have remained focused in their pursuit of these alleged firearms traffickers who mistakenly thought they could wreak havoc on the streets of this great city by selling weapons for their own financial gain. Now, as defendants, they will begin to appreciate the depravity of their conduct and will know that law enforcement will leave no stone unturned in the interdiction of interstate firearms trafficking.”
Police Commissioner William J. Bratton said: “The NYPD remains committed to saving lives by stopping the distribution of illegal firearms. We continue bringing traffickers to justice who, by providing easy access to firearms, play a significant role in perpetrating gun violence. As alleged, these individuals engaged in a trafficking operation in which they sold numerous firearms in the Bronx, to the detriment of the safety and welfare of everyone. Thankfully, NYPD investigators and our law enforcement partners dismantled the operation, and this flow of firearms has been shut down.”
As alleged in the criminal Complaint unsealed today in Manhattan federal court[1]:
From at least in or about December 2014 through in or about September 2015, PAUL BARRY, ANTHONY ROMAN, and TIANA WILLIAMS, the defendants, conspired to and did purchase firearms in Ohio for the purpose of illegally reselling the firearms in the Bronx, New York. During the course of the conspiracy, law enforcement officers conducted controlled purchases of over 50 firearms, including a semi-automatic assault rifle, and over 1,000 rounds of ammunition from the defendants. In addition, in or about August and September 2015, law enforcement officers conducted controlled purchases of ethylone, commonly referred to as “Molly,” from ROMAN.
BARRY, 31, of West Carrollton, Ohio, ROMAN, 37, of the Bronx, New York, and WILLIAMS, 24, of the Bronx, New York, are each charged with one count of one count of firearms trafficking, which carries a maximum sentence of 10 years in prison, and one count of conspiracy to traffic in firearms, which carries a maximum sentence of five years in prison. ROMAN is also charged with one count of interstate transportation and receipt of firearms, which carries a maximum sentence of five years in prison; narcotics possession with intent to distribute, which carries a maximum sentence of 20 years in prison; and one count of firearm possession in furtherance of a narcotics offense, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the ATF and the NYPD. He also thanked the Bronx County District Attorney’s Office for its participation and support in this ongoing investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Dina McLeod and Jason Swergold are in charge of the prosecution.
The charges contained in the criminal Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces $85 Million Settlement with Fifth Third Bancorp over Failures to Self-Report Defective Mortgage Loans to FHARead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Helen R. Kanovsky, General Counsel of the U.S. Department of Housing and Urban Development (“HUD”), and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”), announced today an $85 million settlement with FIFTH THIRD BANCORP and its subsidiaries (“FTB” or the “Bank”) resolving civil fraud claims arising from FTB’s origination of residential mortgage loans insured by the Federal Housing Administration (“FHA”). FTB made a voluntary disclosure of approximately 1,400 mortgage loans that the Bank had certified as eligible for FHA insurance, later determined were materially defective and thus ineligible for FHA insurance, but never self-reported to HUD, resulting in millions of dollars in HUD losses. As part of the settlement approved yesterday by United States District Judge Deborah A. Batts, FTB will pay approximately $85 million to cover federal losses on approximately 500 of the loans that defaulted and for which HUD paid insurance claims, and indemnify HUD for all losses HUD may incur on approximately 900 defective loans that have not yet defaulted. FTB admitted and accepted responsibility for failing to self-report mortgage loans it knew to be defective, contrary to HUD requirements. FTB has also reformed its business practices and terminated the employment of responsible employees.
Manhattan U.S. Attorney Preet Bharara said: “Federal insurers rely on banks when they promise that the mortgage loans they originate are eligible for that insurance. When banks discover that some of the loans are lemons and that their promises of quality were false, as Fifth Third Bank did, they must come forward and report it promptly, so that taxpayers don’t get stuck with the bill. With this settlement, Fifth Third Bancorp has admitted to originating about 1,400 materially defective loans that were not eligible to be FHA insured and has taken positive steps to reform its quality control program, including terminating the employees responsible.”
HUD General Counsel Helen R. Kanovsky said: “Lenders have a responsibility to notify us when they discover material defects in the FHA-insured loans they originate. We will continue to protect FHA’s insurance fund and to ensure borrowers have access to affordable and sustainable mortgage financing.”
SIGTARP Special Inspector General Christy Goldsmith Romero said: “Before and during the time Fifth Third was bailed out in TARP, its Quality Control employees made false representations to HUD that residential mortgages the bank originated were of the quality required to be insured by HUD. The bank’s false representations cost HUD millions of dollars to pay insurance claims on 519 of the materially defective loans that later defaulted. Fifth Third’s actions to fire those employees, voluntarily disclose its violations of the False Claims Act and FIRREA to law enforcement, and make corporate changes should stand as an example for others who violated the law. SIGTARP will root out violations of the law related to TARP with our law enforcement partners such as U.S. Attorney Preet Bharara. It is always better to disclose those violations rather than wait for SIGTARP to find them.”
As set forth in the settlement agreement:
HUD offers various mortgage insurance programs through which it insures approved lenders against losses on mortgage loans made to buyers of single-family housing, including FHA’s Direct Endorsement Lender program, which authorizes private-sector mortgage lenders (“Direct Endorsement Lenders”) to underwrite mortgage loans, decide whether the borrower represents an acceptable credit risk for HUD, and certify loans for FHA mortgage insurance without prior HUD review or approval.
Because HUD relies on Direct Endorsement Lenders to determine which loans should be endorsed for FHA insurance, it requires that Direct Endorsement Lenders conduct adequate due diligence on loans before certifying them for FHA insurance. Direct Endorsement Lenders are also required to maintain an adequate quality control program, which includes self-reporting to HUD in writing within 60 days of initial discovery any loans identified during quality reviews that are affected by serious deficiencies, patterns of non-compliance, or fraud.
Direct Endorsement Lenders make a number of certifications to HUD, including annual certifications and individual loan certifications. In the annual certification, the Direct Endorsement Lender represents that it conforms to all HUD-FHA regulations necessary to maintain its HUD-FHA approval, and among the basic requirements necessary to maintain such approval is the implementation of a compliant quality control program, including timely self-reporting to HUD any loans affected by serious deficiencies, patterns of non-compliance, or fraud. In the individual loan certification, the Direct Endorsement Lender represents that each mortgage is eligible for FHA mortgage insurance.
FTB is an Ohio-chartered bank headquartered in Cincinnati, Ohio. FTB has been a Direct Endorsement Lender since at least 2003 and has submitted both annual and individual loan certifications to HUD.
In 2012, FTB made a voluntary disclosure to the Government of certain residential mortgage loans that FTB had originated and certified to HUD as eligible for FHA insurance, but had later found, through post-closing quality reviews, were in fact materially defective and not eligible for FHA insurance. In 2014, FTB made a supplemental voluntary disclosure to the Government identifying additional materially defective mortgage loans that FTB had failed to self-report to HUD. FTB voluntarily disclosed to the Government a total of 1,439 materially defective loans originated from 2003 through 2013. HUD paid insurance claims on 519 of those loans after they defaulted, and no insurance claims have been submitted to HUD for 920 of the loans.
As part of the settlement, the Bank will pay $84,911,018 to resolve liability under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act arising from the 519 loans for which HUD paid insurance claims. FTB will indemnify HUD for all losses HUD may incur on the 914 loans that have not defaulted. The Bank will also make an administrative payment to HUD of $2,044,000 as part of a separate indemnification agreement with HUD.
FTB admitted, acknowledged, and accepted responsibility for its self-reporting violations, including that:
- FTB was required to self-report to HUD any serious deficiencies, patterns of non-compliance, or fraud within 60 days of the initial discovery;
- FTB made annual certifications to HUD that it conformed to all HUD-FHA regulations necessary to maintain its HUD-FHA approval, which included the implementation of a mandatory quality control program by which FTB reported to HUD all serious deficiencies, patterns of non-compliance, or fraud;
- From 2003 through 2013, FTB’s quality control program identified through post-closing reviews 1,436 residential mortgage loans that FTB had originated and certified to HUD as eligible for FHA insurance that were materially defective and thus ineligible for FHA insurance; and
- FTB failed timely to self-report these materially defective loans to HUD pursuant to HUD requirements.
FTB has taken steps to reform its quality control program, including terminating the employment of personnel responsible for FTB’s failure to self-report materially defective loans to HUD.
This matter arose, in part, from the filing of a whistleblower complaint under the False Claims Act.FTB made its voluntary disclosure to the Government without knowledge of the whistleblower complaint filed under seal or the Government’s investigation of that complaint.The Government intervened in the whistleblower lawsuit and entered into this settlement resolving the case.
The case has been handled by the Office's Civil Frauds Unit. Assistant U.S. Attorney Pierre G. Armand is in charge of the case.
Media Notice – Press ConferenceRead the Press Release
Contact: Donald E. Clark
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: Thomas E. Delahanty II, United States Attorney for the District of Maine, Janet T. Mills, Maine Attorney General, and John E. Morris, Maine Commissioner for the Department of Public Safety, will host a press conference to discuss the new Anti-Heroin Opiate Initiative on Thursday, October 8, 2015 at 11:15 a.m. at the U.S. Attorney’s Office, Munjoy Hill Conference Room, 7th Floor, 100 Middle Street, Portland.
U.S. Attorney Delahanty, Attorney General Mills and Commissioner Morris will introduce individuals who have agreed to serve as team leaders and members of three working groups to address issues concerning: law enforcement, public education/harm reduction and treatment/rehabilitation.
Members of the media should plan to arrive at least 15 minutes before the scheduled conference time, entering the office on the 6th Floor to proceed through security screening.
The press conference will be video-conferenced to the U.S. Attorney’s Office at 202 Harlow Street, Bangor and media members can view it there.Louisiana Resident Sentenced for Involvement in Stolen Identity Tax Fraud SchemeRead the Press Release
A resident of Hammond, Louisiana, was sentenced to prison for his involvement in a stolen identity tax fraud scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana announced today.
Thaddeus Richardson, 49, was sentenced by U.S District Judge Jay C. Zainey of the Eastern District of Louisiana to serve 51 months in prison to be followed by three years of supervised release. Richardson pleaded guilty on July 2 to seven counts of theft of public money, one count of conspiracy to commit money laundering, and one count of a dual-object conspiracy to defraud the United States and to commit mail fraud and theft of public money. Judge Zainey will determine the amount in restitution Richardson has to pay to the Internal Revenue Service (IRS) at a later date.
According to court documents, Richardson and his co-defendants conspired to prepare and file false income tax returns using stolen identities, including the victims’ names and social security numbers, to claim large tax refunds. The refund checks were mailed to addresses in Louisiana, including post office boxes that were opened by the co-conspirators. Once they received the checks, Richardson and his co-defendants falsely endorsed and deposited the refund checks into bank accounts under their control. The co-conspirators then divided the proceeds of the refund checks amongst themselves.
The indictment also charged Cedrick Mitchell, aka Skeet, 40; Corey Lewis, 37; and others with conspiracy to defraud the United States, conspiracy to commit money laundering, conspiracy to commit mail fraud and conspiracy to commit theft of public money. Lewis was also charged with three counts of theft of public money and three counts of aggravated identity theft. On Sept. 15, Mitchell was sentenced to serve 33 months in prison. On Sept. 29, Lewis was sentenced to serve 75 months in prison. All of the remaining defendants in this case have pleaded guilty to various charges and are awaiting sentencing.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Assistant U.S. Attorneys Hayden Brockett and Dall Kammer of the Eastern District of Louisiana and Trial Attorney Lauren Castaldi of the Tax Division, who are prosecuting the case.
Louisiana Resident Sentenced for Involvement in Stolen Identity Tax Fraud SchemeRead the Press Release
WASHINGTON – A resident of Hammond, Louisiana, was sentenced to prison for his involvement in a stolen identity tax fraud scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana announced today.
Thaddeus Richardson, 49, was sentenced by U.S District Judge Jay C. Zainey of the Eastern District of Louisiana to serve 51 months in prison to be followed by three years of supervised release. Richardson pleaded guilty on July 2 to seven counts of theft of public money, one count of conspiracy to commit money laundering, and one count of a dual-object conspiracy to defraud the United States and to commit mail fraud and theft of public money. Judge Zainey will determine the amount in restitution Richardson has to pay to the Internal Revenue Service (IRS) at a later date.
According to court documents, Richardson and his co-defendants conspired to prepare and file false income tax returns using stolen identities, including the victims’ names and social security numbers, to claim large tax refunds. The refund checks were mailed to addresses in Louisiana, including post office boxes that were opened by the co-conspirators. Once they received the checks, Richardson and his co-defendants falsely endorsed and deposited the refund checks into bank accounts under their control. The co-conspirators then divided the proceeds of the refund checks amongst themselves.
The indictment also charged Cedrick Mitchell, aka Skeet, 40; Corey Lewis, 37; and others with conspiracy to defraud the United States, conspiracy to commit money laundering, conspiracy to commit mail fraud and conspiracy to commit theft of public money. Lewis was also charged with three counts of theft of public money and three counts of aggravated identity theft. On Sept. 15, Mitchell was sentenced to serve 33 months in prison. On Sept. 29, Lewis was sentenced to serve 75 months in prison. All of the remaining defendants in this case have pleaded guilty to various charges and are awaiting sentencing.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Assistant U.S. Attorneys Hayden Brockett and Dall Kammer of the Eastern District of Louisiana and Trial Attorney Lauren Castaldi of the Tax Division, who are prosecuting the case.
Longview Men Plead Guilty to Daingerfield Bank RobberyRead the Press Release
MARSHALL, Texas – Two Longview, Texas men have pleaded guilty to their involvement in a Daingerfield Bank Robbery announced U.S. Attorney John M. Bales today.
Latarious Martez Hughes, 21, and Kenneth Duane Hooks, 23, both pleaded guilty today in U.S. Magistrate Roy Payne’s court to their involvement in the armed bank robbery of the 1st National Bank of Hughes Springs, Daingerfield Branch on February 27, 2015. A federal grand jury indicted the two men for robbery on March 18, 2015.
Hughes admitted that he entered the bank with a bandana over his face, brandished a pistol, and pointed the pistol at one of the tellers. Hughes then handed a mesh bag to the teller and instructed her to put money in the bag. The teller complied and put $53,654.00 in the bag and returned the bag to Hughes. Hughes then fled the bank, with the cash, on foot.
Hooks admitted that, following the bank robbery, he drove Hughes, in Hooks’ vehicle, from Daingerfield to Hooks’ residence in Longview, Texas, where the pair were residing together. At approximately 1:30 p.m. that afternoon, F.B.I. agents arrived at Hooks’ residence. The agents advised Hooks of the bank robbery and questioned him about it. Hooks denied that he had been in Daingerfield on the day of the robbery, which was false. Hooks claimed that he had traveled to Mount Pleasant, Texas on the morning of the robbery, which was also false. Hooks further claimed that he had not seen Hughes on the morning of the bank robbery, which was also false. Hooks admitted that he made the false statements to the F.B.I. to assist Hughes in order to hinder or prevent Hughes’ apprehension.
All but $7,566.00 of the stolen cash was recovered from Hughes and Hooks’ residence. Both men will be required to repay the missing $7,566.00 to the bank.
Hughes is facing up to twenty-five years in prison and a $250,000.00 fine. Hooks is facing up to twelve and one half years in prison and a $125,000.00 fine. A sentencing date for the pair has not been set.
This case was investigated by the Daingerfield Police Department, the Longview Police Department, and the F.B.I., Texarkana Office, and prosecuted by Assistant U.S. Attorney Jim Noble.
Len Blavatnik to Pay $656,000 Civil Penalty for Violating Antitrust Premerger Notification RequirementsRead the Press Release
The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Len Blavatnik for violating the premerger notification and waiting period requirements of the Hart-Scott-Rodino (HSR) Act of 1976 when he acquired voting securities of TangoMe Inc. in August 2014. At the same time, the department filed a proposed settlement, subject to approval by the court, under which Blavatnik has agreed to pay a $656,000 civil penalty to resolve the lawsuit.
The HSR Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo premerger antitrust review. Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act, the maximum civil penalty is $16,000 per day.
Further details about this matter are described in the FTC’s press release issued today, and in the attached complaint.
Lead Defendant in Shoplifting Ring Sentenced to 7 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — The lead defendant in a shoplifting ring that stole over $2.5 million in retail goods and resold them on eBay was sentenced today to seven years in prison, United States Attorney Benjamin B. Wagner announced. A restitution hearing is set for December 1, 2015.
Jason Samuel Schroeder, 36, of Sacramento, is the sixth defendant sentenced to prison in this case. Kirk Arthell Sanderson, 37, of Walnut Creek, was previously sentenced to four years in prison; John Judah Young, 34, of Sacramento, was sentence to two and one half years in prison; and David Reed, 29, of Vacaville, was sentenced to one year in prison. Two others, Andrea Lynn Turner, 34, of Roseville, and Joshua Roy Payne, 30, of Vacaville, were also sentenced to two months in prison. Jason Nathaniel Reed, 36, of Portland, Oregon, is scheduled for sentencing later this year.
On March 3, 2015, Schroeder pleaded guilty to interstate transportation of stolen property. According to the plea agreement, in October 2012, a sporting goods company with retail stores in Sacramento called the FBI stating that an eBay account was listing items for sale it suspected were stolen. Follow-up investigation revealed that the account was controlled by Schroeder using co-defendant Young’s name, and since 2009, it listed more than 17,000 items for sale, including sporting goods, household items, recreational equipment and pet care products. Most of the items were listed as new or with tags. Virtually all of the items sold on the account were stolen by Schroeder, Young, or others, and were sold at a discount to buyers across the country.
The proceeds of the sales were deposited into a PayPal account also controlled by Schroeder and then laundered through ATM withdrawals, cash-back purchases, and the purchase of more than $600,000 in money orders. Surveillance of Schroeder revealed that he spent multiple hours a day traveling to different stores and appearing to steal a variety of items. Those items were later listed on his eBay account.
Wiretaps and surveillance also revealed the specific roles of other members of the conspiracy. According to court documents, David Reed assisted Schroeder with the packaging and shipment of the stolen merchandise. Sanderson assisted in moving items away from Schroeder’s residence when he learned of the federal investigation. Turner and Payne provided false statements to federal agents upon being interviewed regarding their assistance to Schroeder.
“This case is a result of a combined law enforcement effort against a criminal organization motivated by greed and profit,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “These defendants stole millions of dollars from retailers, which ultimately got passed down to the American consumer. IRS Criminal Investigation will continue to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”
“Schroeder—well known to the loss prevention professionals in California and other states—brazenly and habitually shoplifted from retailers for the sole purpose of selling the stolen merchandise to unsuspecting customers online. The ring’s impact was significant and forever changed how a variety of goods are displayed at retail locations in both states,” said Special Agent Brandon Simpson of the Federal Bureau of Investigation’s Sacramento field office. “We are thankful to IRS-Criminal Investigation, the United States Postal Inspection Service, and eBay for their partnership in this successful investigation.”
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners in law enforcement on this investigation and will continue to protect the public and the U.S. Mail against all forms of criminal misuse.”
This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the United States Postal Inspection Service. Assistant United States Attorney Jared C. Dolan is prosecuting the case.
Kankakee Felon to Serve 12 Years in Federal Prison for Drug, Gun ChargesRead the Press Release
Urbana, Ill. - Brian K. Dalton, 35, was sentenced late yesterday, Monday, Oct. 5, 2015, to serve 12 years in federal prison for distribution of crack cocaine and illegal possession of a firearm by a felon, as announced by U.S. Attorney Jim Lewis, Central District of Illinois. Dalton remains on bond and was ordered to report to the federal Bureau of Prisons on Feb. 9, 2016, to begin serving his sentence.
Dalton, who previously lived in St. Paul, Minn., pled guilty on June 3, 2015, to distribution of 28 grams or more of crack cocaine in the Kankakee, Ill., area on Jan. 26, 2012, and to possession of a firearm by a felon in February 2012. According to court documents, Dalton possessed a loaded .45 caliber semi-automatic pistol with an obliterated serial number. At the time of the offenses, Dalton had prior drug convictions in Kankakee County.
The case is the result of ongoing investigations related to gun violence in the Kankakee area by the Kankakee Area Project Safe Neighborhoods Task Force, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Kankakee Police Department. The case was prosecuted by Assistant U.S. Attorney Eugene L. Miller.
Indictment: Chanute Man Manufactured Silencers in Violation of Federal Firearms LawsRead the Press Release
WICHITA, KAN. - A Chanute man was indicted Tuesday on charges of manufacturing silencers in violation of federal firearms laws, U.S. Attorney Barry Grissom said.
Shane Cox, 44, Chanute, Kan., who owned an Army surplus store called Tough Guys, is charged with 12 counts. The charges include making a false statement during a federal investigation, possession of an unregistered firearm, conspiracy, transfer of a firearm in violation of the National Firearm Act, making a firearm in violation of the National Firearm Act and engaging in business as a dealer and manufacturer of firearms.
The indictment alleges Cox:
- Advertised for sale silencers that were not registered as required by federal law.
- Manufactured silencers without paying federal taxes.
- Possessed silencers that were not manufactured, sold or registered as required by federal law.
- Manufactured a silencer that was not identified by a serial number as required by federal law.
The indictment alleges that on April 21, 2015, Cox made false statements to agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Upon conviction, the crimes carry the following penalties:
- Making a false statement: A maximum penalty of five years and a fine up to $250,000.
- Possession of an unregistered firearm: A maximum penalty of 10 years and a fine up to $250,000 on each count.
- Conspiracy: A maximum penalty of five years and a fine up to $250,000.
- Transfer of a firearm in violation of the National Firearm Act: A maximum penalty of 10 years and a fine up to $10,000 on each count.
- Making a firearm in violation of the National Firearm Act: A maximum penalty of 10 years and a fine up to $250,000.
- Engaging in business as a dealer and manufacturer of firearms: A maximum penalty of 10 years and a fine up to $10,000.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Debra Barnett is prosecuting.
OTHER GRAND JURY INDICTMENTS
Danielle E. Lewis, 40, Wichita, Kan., is charged with three counts of bank fraud and three counts of aggravated identity theft. The crimes are alleged to have occurred in July, August and September 2015 in Sedgwick County, Kan.
If convicted, she faces a maximum penalty of 30 years and a fine up to $1 million on each bank fraud count, and a mandatory two years (consecutive) on each identity theft count. The U.S. Postal Inspection Service investigated. Assistant U.S. Attorney Debra Barnett is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Houston Woman Pleads Guilty to Defrauding Former EmployerRead the Press Release
HOUSTON – A former employee of United Transport Tankcontainers Inc. (UTT) has been convicted of one count of wire fraud, announced U.S. Attorney Kenneth Magidson. Marcella Jones aka Marcella Jones-Hatch, 44, of Houston, pleaded guilty today, admitting she caused a loss of nearly $1.8 million to her former employer.
Hatch was hired in the accounting department at UTT in 2007. As part of her plea, she admitted that between July 2008 and August 2014, she executed a scheme to defraud her former employer. As part of her scheme, she created fraudulent payment requests and submitted them to UTT. As a result, the company then sent the payments to her personal bank account which she used for her own personal benefit. The estimated total losses to UTT as a result of the scheme was $1,796,945.67.
U.S. District Judge David Hittner accepted the plea to day and set sentencing for Dec. 30, 2015, at which time Jones faces up to 20 years imprisonment and a possible $250,000 maximum fine. She will remain in custody pending that hearing.
The charges are the result of an investigation by the Secret Service. Assistant U.S. Attorney John Braddock is prosecuting the case.
Gun Store Owner Loses Federal Firearms License for Selling a Firearm to a Convicted FelonRead the Press Release
TULSA, Okla.—James Patrick Okey, 45, was sentenced in federal court for knowingly selling a firearm to a convicted felon announced Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma. Okey was a Federal Firearms Licensee (FFL) who owned and operated a gun store, Hunters Choice, located in Sapulpa, Oklahoma. Okey pleaded guilty on July 1, 2015, to a felony indictment charging him with Sale of a Firearm to a Prohibited Person.
As a result of his conviction, Okey lost his federal firearms license, had to liquidate his inventory and close his business. Additionally, United States District Court Judge Claire V. Eagan fined Okey $3,000 and placed him on probation for five years.
“FFL’s have a responsibility to the community to sell firearms lawfully and to the right people,” said U.S. Attorney Williams. “The United States Attorney’s Office is dedicated to making sure that firearms do not end up in the hands of prohibited individuals.”
On May 15, 2014, during the course of an investigation, Okey sold a firearm to a person he knew to be a convicted felon. Convicted felons are prohibited from lawfully possessing a firearm. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Neal C. Hong.
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Greenville Carjacker Sentenced to 327 MonthsRead the Press Release
GREENVILLE – United States Attorney Thomas G. Walker announced that today in federal court, Senior United States District Judge Malcolm J. Howard sentenced David Devonne Battiste, 42, of Greenville to 327 months imprisonment, followed by 5 years of supervised release.
David Devonne Battiste was named in an Indictment filed on September 11, 2014 charging him with Carjacking, Use of a firearm in furtherance of a crime of violence and Possession of a firearm by a convicted felon. On April 7, 2015, Battiste pled guilty to Carjacking and use of a firearm during the commission of a crime of violence.
According to the investigation, on July 15, 2013, officers with the Greenville Police Department were dispatched to a report of a robbery at 413 West 5th Street in Greenville, N.C. Upon arrival, officers made contact with two victims who indicated that they were robbed at gunpoint by two males who demanded the keys to their vehicle and drove away. The victims indicated that as they sat in the vehicle, two suspects approached the driver’s side door. The first suspect, later identified as BATTISTE, tapped on the driver’s side door with a silver hand-gun and demanded that the driver open the door. The driver was forcefully removed from the vehicle, and his wallet and cash removed from his pockets. The passenger was then also ordered out of the vehicle, and when he refused, BATTISTE pointed the handgun at him and pulled the trigger. The weapon initially misfired, however; BATTISTE pulled the trigger a second time and a bullet shattered the passenger side window near the victim’s head. The second victim exited the vehicle and was also robbed. The suspects forced the victims to lie in the grass, entered the truck and drove out of the parking lot. The victims were able to give a description of the suspect with the firearm and BATTISTE was located shortly thereafter near where the stolen vehicle was located. A firearm was located in BATTISTE’S right front pocket, as well as the keys to the stolen vehicle and a bracelet matching one that was stolen from one of the victims. Officers also located two shell casings, one that still contained a bullet but had a primer mark (indicating a misfire) and one empty casing.
Investigation of this case was conducted by the Greenville Police Department along with the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Carrie Randa represented the government.
Government Files Enforcement Actions against Two California Companies and Three Individuals to Stop Importation of Dangerous Children's ProductsRead the Press Release
The Department of Justice announced today that it filed two civil actions in federal court in the Central District of California seeking to enjoin the importation and sales activities of two California companies and three individuals in connection with their importation of illegal and dangerous children’s products. The department filed the two actions at the request of the Consumer Product Safety Commission (CPSC), alleging that the defendants were responsible for importing children’s products containing, among other things, lead, phthalates and small parts posing a choking hazard for children under the age of three. The companies and defendants have agreed to settle the lawsuits and be bound by a consent decree of permanent injunction.
“Companies who do not comply with CPSC’s statutes and regulations regarding toys put American children at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Parents have a right to feel confident that the toys their children play with are safe.”
“We have zero tolerance for companies and individuals who put children at risk,” said CPSC Chairman Elliot F. Kaye. “To protect our children from unsafe and dangerous toys, we’ll continue to use all available enforcement tools at our disposal as well as continue to collaborate with our federal partners. Parents deserve no less when it comes to the safety of their children’s toys.”
“There is no greater responsibility of the Department of Justice than to protect our nation’s children,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Today’s action demonstrates the Department’s commitment to keeping our children safe from all sources of harm.”
Both complaints allege that the defendants imported toys and other children’s products in violation of the Consumer Product Safety Act (CPSA) and the Federal Hazardous Substances Act (FHSA). One complaint was filed against Brightstar Group Inc., a Los Angeles importer and retailer of children’s products and toys, and its owner, Sherry Chen, 61, of Arcadia, California. The complaint alleges that since August 2013, CPSC collected dozens of samples from Brightstar’s import shipments as they attempted to enter the Port of Los Angeles/Long Beach, California, and from Brightstar’s Los Angeles facility. Based on their findings, CPSC issued nine Letters of Advice between September 2013 and April 2015, notifying the Brightstar defendants that their products violated federal standards. CPSC found numerous children’s products, including a fire engine set, a tea set, toy boxing gloves, collapsing stroller and marbles, in violation of the CPSA, the FHSA and their implementing regulations. Most of the violative products were stopped at import and were not sold to consumers. Chen is also sued for violations, which include importing violative infant rattles that occurred while she was the manager of Taifung Corp., a now-dissolved California corporation owned by her husband that also imported and sold children’s products and toys.
A second action was filed against Unik Toyz Trading Inc. (Unik), a Los Angeles importer and retailer of children’s products and toys, its owner, Julie Tran, 33, and its manager, Kiet Tran, 38, both of of Arcadia, California. The complaint alleges that since September 2011, CPSC identified 39 samples of children’s products imported by Unik, including toy cars, toy trains, bubble guns and art materials, that violate federal standards for children’s toys. These violations include illegal levels of lead content and toys intended for children under the age of three that contain small parts and accessible batteries. Most of these violative toys were stopped at import at the Port of Los Angeles/Long Beach and were not sold to consumers.
In conjunction with the filing of the complaints, the defendants in both lawsuits agreed to settle the litigation and be bound by a consent decree of permanent injunction. All of the defendants agreed to immediately cease all importation and sale of toys and children’s products, unless and until the CPSC determines that the firm’s practices have come into compliance with the law and with various remedial measures set out in the decrees. The proposed consent decrees are awaiting judicial approval.
The cases are being handled by Trial Attorneys Melanie Singh and Ann F. Entwistle of the Civil Division’s Consumer Protection Branch, with the assistance of Renee McCune of the CPSC’s Office of the General Counsel. The U.S. Attorney’s Office of the Central District of California also provided assistance.
Fugitive from Justice for 16 Years Sentenced to Eight Years in Prison for Laundering Illegal Drug ProceedsRead the Press Release
NEWARK, N.J. – After spending 16 years as a fugitive from justice, a man was sentenced today to 96 months in prison for his role in a conspiracy to launder almost $700,000 in illegal drug proceeds, U.S. Attorney Paul J. Fishman announced.
Reinaldo Jimenez, 49, most recently of Madrid, Spain, was previously convicted at trial by a federal jury in 1998 of one count of conspiracy to commit money laundering. Jimenez fled the country before his sentencing and lived abroad as a fugitive for 16 years. He was captured in California in 2014. U.S. District Judge Jose L. Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
From October 1996 through March 14, 1997, Jimenez knowingly laundered nearly $700,000 in drug proceeds collected by co-defendants in New Jersey and elsewhere. Jimenez took possession of the cash in $15,000 bundles wrapped in newspaper and scotch tape and then made numerous small deposits into personal, family and business accounts to avoid triggering mandatory reporting requirements. Jimenez then wired the laundered funds to cartel contacts in Columbia and Venezuela.
In addition to the prison term, Judge Linares sentenced Jimenez to three years of supervised release.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office, General Crimes Unit, in Newark.
Defense counsel: Assistant Public Defender K. Anthony Thomas Esq., Newark
Former Water Valley Loan Officer ArrestedRead the Press Release
OXFORD, Miss. - United States Attorney Felicia C. Adams, Special Agent in Charge, FDIC – Office of Inspector General, Dallas Regional Office, Laurie L. Younger, and Special Agent in Charge, USDA – Office of Inspector General, Southwestern Region, Patrick Munday announced today that William J. Pullen, age 38 of Water Valley, MS, was arrested last week on Federal Bank Fraud charges. Pullen has entered a plea of not guilty to all counts of an Indictment charging him with Bank Fraud in violation of Title 18, United States Code, Section 1344 and Embezzlement by a Bank Officer in violation of Title 18, United States Code, Section 656. On both counts of the Indictment, Pullen faces a maximum of thirty years in prison, a $1,000,000 fine, five years of post-release supervision and restitution in the amount of loss.
Pullen was released pending his trial on a $5,000 secured bond. His trial is currently set for November 23, 2015.
This matter is being handled by the United States Attorney’s Office for the Northern District of Mississippi, FDIC – Office of Inspector General, Dallas Regional Office and USDA – Office of Inspector General, Southwestern Region.