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Thursday 24 September 2015
Owner of Florida Mortgage Company Sentenced to over 11 Years in Prison for Orchestrating $64 Million Fraud SchemeRead the Press Release
Two Associates Also Sentenced for their Roles in the Conspiracy
The owner of a Florida mortgage company was sentenced today to serve 135 months in prison for orchestrating a $64 million mortgage fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge Nadine Gurley of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) Atlanta Region made the announcement.
Hector Hernandez, 57, of Miami, Florida, the owner and operator of Great Country Mortgage Bankers (Great Country), a mortgage lender in Miami, was sentenced for conspiracy to commit wire fraud affecting a financial institution. He was also ordered to pay $64,508,141 in restitution and to forfeit $8,000,000 in illicit profits.
In the same case, a real estate developer for Great Country, Aleida Fontao, 62, of Miami, was sentenced today to serve 41 months in prison, and ordered to pay $7,131,952 in restitution and $400,000 in forfeiture. An underwriter for Great Country, Olga Hernandez, 59, of Lake Mary, Florida, was sentenced yesterday to serve 51 months in prison and ordered to pay $24,512,755 in restitution. Hector and Olga Hernandez both pleaded guilty on July 13, 2015, while Fontao pleaded guilty on July 7, 2015. Hector Hernandez was the last defendant to be sentenced in the case. All 24 defendants charged in this case, which included loan officers, loan processors and underwriters, were convicted of participating in the scheme.
According to admissions made in connection with the guilty pleas, from at least 2006 and continuing through at least September 2008, Hector Hernandez was the owner and operator of Great Country which specialized in approving Federal Housing Administration (FHA) loans. The loans were primarily for buyers of condominiums at complexes where Hector Hernandez was a part owner – however, the buyers were unqualified borrowers, due to insufficient income, high levels of debts, and outstanding collections. Hector Hernandez admitted that his company employed loan officers, loan processors and underwriters, including Olga Hernandez and Fontao, whom he knew approved and submitted false and fraudulent FHA mortgage loan applications and accompanying documents to HUD on behalf of the unqualified borrowers. These documents included false pay stubs, false verification of employment forms, and fictitious letters from the borrowers.
According to admissions made in connection with the guilty pleas, closing costs were paid on behalf of the unqualified borrowers through an interstate wire transfer of funds. The borrowers were also paid to purchase the condominium units as an unreported inducement to purchase. After the loans closed, the loans were sold to financial institutions. When the unqualified borrowers failed to meet their monthly mortgage obligations, they defaulted on the loans causing losses both to the financial institutions and to HUD which insured the loans. Hector Hernandez admitted that the loss from the fraudulent conduct was at least $64 million.
This case was investigated by HUD-OIG as participants in the Miami Mortgage Fraud Strike Force. The case was prosecuted by Senior Litigation Counsel David A. Bybee and Trial Attorneys Mike O’Neill and William Johnston of the Criminal Division’s Fraud Section.
Owings Mills Man Admits to Jewelry Store Heist that Included a Home Invasion Robbery, Carjacking and KidnappingRead the Press Release
Baltimore, Maryland – Grigoriy (Greg) Zilberman, age 24, of Owings Mills, pleaded guilty today to a robbery conspiracy in connection with the robbery of a jewelry store, including a home invasion robbery, and a carjacking and kidnapping.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to his plea agreement, Zilberman was part of a conspiracy to rob a Pikesville jewelry store. In the course of the conspiracy, Zilberman admitted that he also participated in a home invasion robbery in order to obtain firearms, which were subsequently used in the jewelry store robbery.
Specifically, on July 22, 2012, Zilberman and other conspirators robbed a home in Reisterstown, Maryland. Zilberman was familiar with the layout of the home, having been there as a guest on a number of occasions. Zilberman knew that the residents of the home owned firearms and he had handled and fired some of the weapons. After conducting surveillance of the home for several days prior to the robbery, at 2:30 a.m. on July 22, 2012, Zilberman and his co-conspirators traveled to the home in Reisterstown. Dressed all in black and wearing ski masks and latex gloves, Zilberman and his co-conspirators entered the home through the unlocked garage door. One of the conspirators was armed with a handgun when they entered the residence. Zilberman and two other conspirators grabbed long guns and carried them throughout the home. A resident of the home was asleep when the four robbers entered his bedroom and woke him up, pointing guns at him and shining flashlights in his eyes. One of the robbers beat the resident when he tried to resist and the resident was bound with a belt and a cord. For approximately one hour the robbers ransacked the home looking for firearms and other valuables. After the robbers left, the resident was able to free himself and call police. The resident was taken to the hospital for treatment of his injuries. Among the items stolen from the house were 10 long guns (rifles and shotguns), a crossbow, a laptop computer and jewelry. Numerous electronic devices including computers and televisions were destroyed during the robbery. The value of the items stolen was approximately $10,000.
According to the plea agreement, in the fall of 2012, a co-conspirator devised a plan to commit an armed robbery of a jewelry store, known to be owned and operated by members of the Russian community of Northwest Baltimore. The co-conspirator recruited Zilberman and others to participate in the robbery. Prior to the robbery, the conspirators gathered intelligence, including conducting surveillance and attaching a GPS device to the car of an employee of the jewelry store in order to learn the employee’s travel routine and habits. Zilberman also exploited his friendship with the employee to obtain information about the operation of the jewelry store and the habits of the employee.
According to his plea agreement, on January 15, Zilberman enticed the employee to visit his home, aware that after the employee left Zilberman’s home, the co-conspirators planned to abduct him at gunpoint to obtain keys and other information from him in order to rob the jewelry store. Early in the morning on January 16, 2013, as the employee was driving from Zilberman’s home, four co-conspirators used a law enforcement-type light bar and a loudspeaker to impersonate a police officer and pull over the employee. Brandishing firearms, the co-conspirators removed the employee from his car, bound and blindfolded the employee, put him into the trunk of his own car, and drove him to a predetermined location. According to the plea agreement, once at the location, Zilberman’s co-conspirators continued to brandish firearms and threatened to kill the employee’s family if he did not comply with their demands or if he reported the incident to police. The employee complied and at approximately 3:52 a.m., two co-conspirators drove the employee’s vehicle from the remote location to the jewelry store, while other co-conspirators stayed with the employee. Additional co-conspirators were stationed near the jewelry store to act as “look-outs.” The two co-conspirators entered the jewelry store and stole jewelry, stones, and watches, valued at about $500,000.
On the evening of January 16, 2013, the employee returned to Zilberman’s home and told him of his abduction and the robbery, including the fact that he and his family were threatened if he reported the incident to the police.
On January 18, 2013, one of the conspirators sold a portion of the stolen jewelry for approximately $29,000 to an FBI informant. On January 19, 2013, the conspirator traveled to Brooklyn, New York to sell some of the jewelry and stones taken during the robbery, receiving over $100,000. On January 21, 2013, the conspirator returned to Maryland and divided the cash proceeds among the members of the conspiracy and others. Zilberman received $5,000 cash for his role in the crimes.
Zilberman faces a maximum sentence of 20 years in prison for the robbery conspiracy. U.S. District Judge J. Frederick Motz has scheduled sentencing for December 18, 2015.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Paul E. Budlow and Aaron S. J. Zelinsky, who are prosecuting the case.
Norwalk Man Admits Running Ponzi SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES E. NEILSEN, 55, of Norwalk, waived his right to indictment and pleaded guilty today in Hartford federal court to one count of wire fraud stemming from his operation of a Ponzi scheme that defrauded investors of more than $1.6 million.
According to court documents and statement made in court, NEILSEN was a certified public accountant until he became inactive in approximately 2012. Since at least 2006, NEILSEN solicited and received more than $1 million dollars from numerous individuals to invest with Ulysses Partners, LLC, an entity in which NEILSEN was a partner and chief financial officer, or Neilsen Financial Services, an entity that NEILSEN owned and controlled. NEILSEN promised investors a guaranteed rate of return of 9 to 10.5 percent on their investment. NEILSEN told investors that Ulysses Partners or Neilsen Financial Services would invest their money in businesses or business ventures. Instead, NEILSEN used much of that money to pay back earlier victim investors and to make various personal expenditures.
As part of the scheme, NEILSEN submitted fabricated account statements to his victims, and also sent lulling emails to multiple victims.
Through this scheme, NEILSEN defrauded victim investors of $1,663,641.83. NEILSEN’s victims include his accounting clients, clients of his tax preparation business, friends and members of his family, including his 93-year-old great aunt. His victims also include minor children beneficiaries of a trust established after their father’s untimely death and whose trust monies NEILSEN had authorized access to.
NEILSEN was arrested on June 18, 2015, and is released on a $250,000 bond. He is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on December 22, 2015, at which time he faces a maximum term of imprisonment of 20 years. He also has agreed to pay restitution in the amount of $6,273,841.95, which includes additional monies owed to investors.
This matter is being investigated by the Federal Bureau of Investigation, the Greenwich Police Department and the Connecticut Department of Banking. The case is being prosecuted by Assistant U.S. Attorney David T. Huang.
Northern West Virginia law enforcement, pharmacies to participate in national drug take-back dayRead the Press Release
WHEELING, WEST VIRGINIA – Law enforcement and community leaders from across the Northern District of West Virginia will participate in the Drug Enforcement Administration’s National Prescription Drug Take-Back event scheduled for Saturday, September 26 2015, United States Attorney William J. Ihlenfeld, II, announced.
From 10:00AM until 2:00PM local time, law enforcement agencies, pharmacies, and community organizations across the country will establish and staff a variety of locations where local residents can return unwanted, unneeded, or expired prescription drugs for safe disposal.
“West Virginia has the third highest number of narcotic painkiller prescriptions per person in the nation,” noted U.S. Attorney Ihlenfeld. “These medications are easily diverted and can be extremely dangerous when not used as directed by a medical professional. The national prescription take-back event is an important step to ensure that unused medications are disposed of properly.”
Between 2010 and 2014, the Drug Enforcement Administration sponsored nine national prescription drug take-back events and collected 4,823,251 pounds, or 2,411 tons, of prescription medications.
Individuals interested in finding local participating locations or obtaining additional information regarding the Drug Enforcement Administration’s Prescription Drug Take-Back initiative are encouraged to visit www.dea.gov, call 1-800-882-9539, or contact your local law enforcement agency.
Nine people indicted for marijuana distribution and money laundering conspiracyRead the Press Release
Nine people were charged in a superseding indictment for their roles in a conspiracy to ship marijuana from California to Ohio, then launder the drug proceeds and send the money back to California, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Indicted are: James Sorgi, 33, of McKinleyville, Calif.; Robert Serina, 35, of Cleveland; Stuart Pflaum, 34, of Hudson; Craig Kavak, 26, of Parma; Allyson Love, 27, of McKinleyville, Calif.; Dino Silvestri, 32, of Parma; Dustin Allred, 34, of Parma; Madelaine Davidson, 21, of McKinleyville, Calif., and Daniel Linton, 27, of McKinleyville, Calif.
Sorgi operated a drug trafficking organization that shipped marijuana from California to Cleveland. He grew the marijuana in California and also obtained marijuana from other growers. Sorgi then worked with Serina and Pflaum to direct others to receive multi-pound shipments of marijuana in Ohio and sell it there, according to the indictment.
Sorgi, working with Serina, Pflaum and others, then directed people to collect the drug proceeds and make cash deposits into various bank accounts. Sorgi, through Pflaum and Serina, then directed people to convert the cash into money orders and send the money to California, according to the indictment.
This took place between June 2013 and Februay 2015, according to the indictment.
Prosecutors are seeking to forfeit at least $86,000 from the organization.
“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Without these ill-gotten gains, the traffickers could not finance their organizations. IRS Criminal Investigation is committed with taking the profit away from the drug traffickers and ensuring the major players of these operations are held accountable.”
This case is being prosecuted by Assistant U.S. Attorneys Michelle Baeppler and Margaret Sweeney following an investigation by the Northern Ohio Law Enforcement Task Force. The NOLETF is a task force comprised of investigators from the Federal Bureau of Investigation, Cleveland Division of Police, Cuyahoga Metropolitan Housing Authority, Drug Enforcement Administration, Internal Revenue Service, Cuyahoga County Sheriff’s Office, Ohio Bureau of Criminal Investigation and the police departments of Cleveland Heights, Euclid, Lakewood, the Regional Transit Authority, Westlake and Shaker Heights. The NOLETF is also one of the initial Ohio High Intensity Drug Trafficking Area initiatives, which supports and helps coordinate numerous Ohio drug task forces in their efforts to eliminate or reduce drug trafficking in Ohio.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
New Orleans Woman Charged with Violating the Federal Controlled Substances ActRead the Press Release
U.S. Attorney Kenneth A. Polite announced that VIRGINIA BROWN, age 22, of New Orleans, was charged today in a one-count Bill of Information with violating the Federal Controlled Substances Act.
According to the Bill of Information, on or about August 10, 2015, BROWN distributed a quantity of heroin. The Government is seeking to forfeit any proceeds from BROWN’s drug dealing.
If convicted, BROWN faces a term of imprisonment of up to twenty years, a fine of up to $1,000,000, and at least three years of supervised release following any term of imprisonment.
U. S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration and the New Orleans Police Department in investigating this matter. Assistant United States Attorney David Haller is in charge of the prosecution.
Nassau County Nurse Pleads Guilty to Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces today that Ronald Eugene Mabrey, Jr. (34, Callahan) has pleaded guilty to receiving child pornography over the Internet. He faces a mandatory minimum penalty of 5 years, up to 20 years, in federal prison. A sentencing hearing has not yet been set. Mabrey has been in custody since his arrest.
According to court documents, on July 28, 2015, FBI agents and other law enforcement officers executed a federal search warrant at Mabrey’s residence. During an interview, Mabrey admitted that he had searched for, downloaded, and viewed “all types” of child pornography, and he stated that his addiction to child pornography had started about four years ago. A subsequent forensic examination of Mabrey’s laptop and a thumb drive revealed more than 190 videos and at least 4,000 images depicting child pornography.
This case was investigated by the Federal Bureau of Investigation, the Nassau County Sheriff’s Office, the Florida Department of Law Enforcement, and the Jacksonville Sheriff’s Office. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
This is another case 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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
NY Woman Federally Indicted for Credit Card Fraud in Central Pennsylvania StoresRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a New York state woman was indicted late yesterday by a federal grand jury in Harrisburg for allegedly using fraudulently obtained credit cards in June 2014 to make thousands of dollars of purchases from stores in Cumberland County and Luzerne County.
According to United States Attorney Peter Smith, Zeni Ortiz-Reyes, age 31, of Middletown, New York was charged in an indictment with making purchases with an unauthorized access device card. Ortiz-Reyes allegedly made purchases at the Best Buy store and in Mechanicsburg and at a Lowes store in West Hazelton in June 2014. Ortiz-Reyes purchased gift cards and merchandise using credit cards she applied for in someone else’s name without that person’s knowledge or permission. The gift cards and merchandise amount to approximately $18,000.
The investigation was conducted by the United States Secret Service, the Hampden Township and Silver Spring Township Police Departments, and the security personnel for the retail stores. The case has been assigned to Assistant U.S. Attorney William A. Behe.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for each count is 15 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Muskogee Man Pleads Guilty to Possession of Material Involving Sexual Exploitation of MinorsRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that PAUL BENJAMIN STONE, age 34, of Muskogee, Oklahoma, pled guilty to POSSESSION OF CERTAIN MATERIAL INVOLVING THE SEXUAL EXPLOITATION OF MINORS, in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and 2252(b)(2), punishable by up to 10 years imprisonment, up to a $250,000.00 fine or both.
The Indictment alleged that between on or about August 1, 2013, and on or about April 16, 2014, in the Eastern District of Oklahoma, the defendant, PAUL BENJAMIN STONE, did knowingly possess and attempt to possess matters which contained visual depictions and the production of said visual depictions involved the use of minors engaging in sexually explicit conduct and had been transported in interstate commerce by computer.
The charges arose from an investigation by the Federal Bureau of Investigation.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion.
Assistant United States Attorney Edward Snow represented the United States.
Mount Carmel Woman Charged with Health Care FraudRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Mount Carmel woman was indicted yesterday by a grand jury in Harrisburg on charges related to health care fraud.
According to United States Attorney Peter Smith, Joan Cicchiello, age 64, of Mount Carmel, Northumberland County, Pennsylvania, the owner and operator of Twilight Beginnings, a psychiatric and counseling practice, was charged with one count of health care fraud and 14 counts of making false written statements and writings to obtain Medicare payments.
According to the indictment, between May 2010 and the present, Cicchiello’s business contracted with skilled nursing facilities in Adams, Dauphin, York, Franklin, Schuylkill, Lancaster and Northumberland Counties to provide mental health services to residents.
The indictment alleges that Cicchiello, a certified registered nurse practitioner, employed at least four individuals who did not meet Medicare licensing requirements for the provision of mental health services. Services were allegedly provided by the individuals but false claims for payment were submitted to Medicare indicating that Cicchiello had provided the services and were paid on that basis.
Cicchiello fraudulently obtained on-line certification in pastoral counseling for workers, falsely stated on applications for renewal of her license that she had never been convicted of any felony and misdemeanor offenses, and submitted false claims to Medicare stating she had provided medical or counseling services on dates when she was on vacation or actually traveling outside the United States.
The indictment also contains an allegation by the government seeking forfeiture of property derived from the offenses.
The case was investigated by the Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorney Christy H. Fawcett is the assigned prosecutor.
An indictment is only an allegation. The person charged in the indictment is presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum sentence for the offense of health care fraud is 20 years’ imprisonment, three years’ supervised release, and a $250,000 fine. Each count of making false writings and statements in connection with a health care matter carries a maximum term of imprisonment of five years in prison, a $250,000 fine, and a three-year term of supervised release. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Monitor Finds Seattle Police in Initial Compliance with Requirements Relating to Reporting, Investigating and Analyzing Uses of ForceRead the Press Release
WASHINGTON – The Department of Justice announced today that formal assessments of Seattle Police Department (SPD) reforms relating to documenting, investigating and analyzing uses of force by officers have found SPD to be in initial compliance with specific provisions of the court-ordered agreement with the Department of Justice. Federal monitor Merrick Bobb filed the first four of 15 systemic assessments with the U.S. District Court and concluded that, in three of the four areas reviewed thus far—out of 15 total assessments—SPD is in initial compliance with specific requirements of the consent decree.
This first round of assessments, following the July 2012 consent decree and overseen by an independent and jointly selected monitor, analyzed how effectively SPD is tracking uses of force by officers at all levels of reportable force. Specifically, the monitoring team and the Department of Justice and its policing experts, reviewed use of force reports and investigations from incidents occurring from July 1, 2014, through Dec. 31, 2014, to conduct four separate assessments relating to:
- Reporting of low-level uses of force (Type I reporting);
- Reporting of intermediate and high-level uses of force (Type II and III reporting);
- Chain of command investigations for Type I and II incidents; and
- Force Investigation Team (FIT) investigations for Type III incidents.
Of the first four assessments, the monitor and Department of Justice found that SPD is in initial compliance with Type I reporting, Type II and III reporting and FIT investigations for Type III uses of force.
“I commend Seattle’s leaders for their commitment to enhancing law enforcement through transparency and accountability,” said Attorney General Loretta E. Lynch. “Today’s assessments show that real progress is possible when we engage with one another, when we summon our goodwill and good faith, and when we work collaboratively as partners with a mutual and shared interest in ensuring the safety and security of the communities we call home. I look forward to seeing even more progress in the days and months ahead.”
“The Seattle Police Department has made tremendous strides in implementing reforms, and we congratulate them on this progress,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “This achievement is possible because of the collaborative work of the many stakeholders in this process. Although work remains, these assessments show the change that is possible, here and across the country.”
“I commend the Seattle Police Department for this important first step towards full consent decree compliance,” said U.S. Attorney Annette L. Hayes of the Western District of Washington. “Effective force reporting and review is essential to addressing the problems that the Department of Justice found in 2011. What this proves is that with strong leadership from the Chief of Police and City leaders, and continued engagement by rank and file officers, Seattle is heading down the road to becoming true leaders in modern police practices.”
As the monitor indicated in the court filing today, SPD officers are “documenting force whenever it is used, sergeants have responded to the scene in such a way that permits a thorough investigation and the FIT investigations are consistently excellent.” However, while chain of command investigations of Type I uses of force were adequate, those for Type II were not found to be in initial compliance. More work will need to be done in that area, and the Department of Justice and the monitor have begun discussions with the city on how to reach compliance in that area as well.
A key requirement of the consent decree is that uses of force by SPD officers are uniformly and accurately reported by officers and thoroughly reviewed by their supervisors, including the chain of command for lower-level uses of force and the FIT for more serious uses of force. The Justice Department’s investigation found that in areas relating to use of force reporting and supervision, there was cursory reporting, inadequate on-scene supervisory investigation of force, insufficient analysis of use of force incidents and too little meaningful oversight and review of force investigations.
The new use of force policy – including a tiered reporting system that requires increased supervision and review of more significant uses of force and new and clearer lines of responsibility for supervisory oversight (including the creation of FIT) – went into effect on Jan. 1, 2014.
Additional assessments, including the quality of Office of Professional Accountability investigations, SPD supervision, stops and detentions, crisis intervention and officer use of force generally will be filed over the next six months. Collectively, these assessments cover every area of the consent decree and will evaluate “whether [SPD] has the systems, policies, structures and culture in place” that the consent decree requires.
Mississippi Woman Pleads Guilty to Making False Statements to New Orleans Immigration CourtRead the Press Release
U.S. Attorney Kenneth A. Polite, Jr. announced that MARINA ARNEDO ROJAS-ZAYED, age 34, a resident of Ocean Springs, Mississippi, pled guilty in federal court today to one count of making false statements to an agency of the United States.
According to court records, from on or about July 2012 until on or about August 2013, ROJAS-ZAYED represented before the New Orleans Immigration Court, that she was a licensed attorney in the state of Alabama, when in truth she knew she was not a licensed attorney. During hearings before the New Orleans Immigration Court, she appeared and assumed the role of attorney for aliens, albeit fraudulently. When Immigration Judges referred to ROJAS-ZAYED as “counsel,” she did not inform the judges that she was not in fact, a licensed attorney. Additionally, ROJAS-ZAYED entered her notice of appearance on behalf of aliens in approximately 42 immigration cases before at least five different Immigration Courts in the United States. Specifically, she submitted numerous documents to the Immigration Courts indicating she was a licensed attorney although she is not.
ROJAS-ZAYED faces a possible maximum term of imprisonment of five years, a $250,000 fine and three years of supervised release following imprisonment. U.S. District Judge Jane Triche Milazzo set sentencing for January 7, 2016.
U.S. Attorney Polite praised the work of the Homeland Security Investigations (HSI). Assistant U.S. Attorney Julia K. Evans is in charge of this prosecution.
Mississippi Man Sentenced for Firearms OffensesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ALEX BRASINGTON, age 23, a resident of Carriere, Mississippi, was sentenced today after having previously pled guilty to conspiracy to possess and transport stolen firearms in interstate commerce and transportation of stolen firearms in interstate commerce.
U.S. District Judge Jane Triche Milazzo sentenced BRASINGTON to 33 months of incarceration, to be followed by 3 years of supervised release.
According to court documents, in January and February 2013, BRASINGTON, BAUER and PARSONS, transported nine stolen firearms in interstate commerce, from Alabama to Louisiana. The investigation revealed that the firearms had been stolen during residence burglaries in Huntsville, Alabama. On February 14, 2013, agents conducted a search of BAUER’s New Orleans apartment and found five stolen firearms and approximately 1700 rounds of ammunition. Court documents reflect that agents also recovered four stolen firearms and ammunition that BRASINGTON, BAUER and PARSONS sold to individuals in New Orleans. BRASINGTON had previously been found in possession of a stolen firearm on January 31, 2013. BAUER and PARSONS previously pled guilty and are awaiting sentencing.
U.S. Attorney Polite praised the work of the ATF New Orleans Division Office, New Orleans Police Department, Pearl River (LA) Police Department, Pearl River County (MS) Sheriff’s Office, and Huntsville Police Department in investigating this matter. Assistant United States Attorney Nolan D. Paige is in charge of the prosecution.
Minnesota Man Convicted by Federal Jury of Producing Pornographic Images of Two MinorsRead the Press Release
United States Attorney Andrew M. Luger today announced the conviction of SEAN GERALD PENONCELLO, 41, for the production of child pornography involving two minor victims. On June 9, 2015, PENONCELLO was charged by superseding indictment with two counts of producing child pornography and one count of possessing child pornography. Following a three-day trial before Judge Patrick J. Schiltz, a jury found PENONCELLO guilty of all counts. A sentencing date has not yet been set.
Assistant U.S. Attorney Laura Provinzino said: “These are among the most difficult but important cases to prosecute. The jury's verdict ensures that a man who is an opportunist and who has repeatedly sexually exploited children cannot do it again.”
Sergeant John Backman of the St. Louis County Sheriff’s Office said: “This conviction will protect other children from the predatory behavior of Mr. Penoncello. In addition, the conviction sends a message to others involved in this underground activity that they will be pursued, located, and brought to justice.”
As proven at trial, on April 3, 2014, a series of nude images of an unidentified five-year-old minor were submitted to the National Center for Missing and Exploited Children (NCMEC) that were traced back to PENONCELLO’s residence in Cherry, Minn. On March 27, 2015, law enforcement executed a search warrant of PENONCELLO’s residence and recovered two hidden thumb drives and a surreptitious recording device taken from PENONCELLO’s truck.
As proven at trial, the evidence contained on the two thumb drives revealed sexually explicit images and videos of a second minor victim, produced when the victim was 14-years-old. The thumb drives also contained numerous pornographic images and videos of other known NCMEC-identified minor victims.
If you know of any child who may have been a victim of exploitation, please call the National Center for Missing or Exploited Children (NCMEC) at 1-800-THE-LOST (1-800-843-5678) or visit NCMEC’s web site at www.missingkids.com.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and the St. Louis County Sheriff’s Office, with assistance from the St. Louis County Attorney’s Office, Virginia Police Department and Eveleth Police Department.
This case is being prosecuted by Assistant U.S. Attorneys Laura M. Provinzino and Benjamin F. Langner.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Defendant Information:
SEAN GERALD PENONCELLO, 41
Iron, Minn.
Convicted:
- Production of Child Pornography, 2 counts
- Possession of Child Pornography, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Mexican National Gets 40 Years in Prison for KidnappingRead the Press Release
McALLEN, Texas ‐ A 29-year-old resident of Camargo, Tamaulipas, Mexico, has been handed a significant sentence for his conviction of kidnapping, announced U.S. Attorney Kenneth Magidson along with Acting Special Agent in Charge Mark Dawson of Homeland Security Investigations (HSI) in San Antonio. Martin Margarito-Casimiro pleaded guilty to the charges May 27, 2015.
Today, U.S. District Judge Micaela Alvarez, who accepted the guilty plea, handed Margarito-Casimiro a 480-month sentence and ordered he pay a $25,000 fine. In handing down the sentence, Judge Alvarez noted that this kind of conduct goes on routinely in Mexico and unfortunately is seen more and more in Texas. Judge Alvarez hoped that this sentence would not only serve as a deterrent to Margarito himself, but also to anyone else seeking vengeance for a debt owed. Margarito-Casimiro is expected to face deportation proceedings following his release from prison.
“Today's sentencing exemplifies the high level of collaboration between HSI and its partners in identifying, arresting and prosecuting individuals involved in human smuggling,” said Dawson. “HSI will continue to utilize its broad authorities, in concert with its federal , state/local partners to disrupt and dismantle these criminal organizations.”
On Jan. 22, 2015, law enforcement responded to a man’s cry for help as he ran down the street with rope still tied around his arms and legs. That victim led law enforcement to the McAllen residence where he had been held. There, law enforcement found another victim with his arms and legs bound. At that time, law enforcement discovered Margarito-Casimiro and others who were attempting to flee.
At the time of his guilty plea, Margarito-Casimiro admitted he held at least one victim at gunpoint for ransom for an alleged lost load of marijuana and directed co-conspirators to tie the victim’s hands and feet. The victim was told he needed to pay in order to be released.
Margarito-Casimiro will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by Homeland Security Investigations and McAllen Police Department. Assistant U.S. Attorney Kristen Rees and Leo J. Leo prosecuted the case.
Manhattan U.S. Attorney Announces Charges Against Seven Individuals for Multimillion-Dollar Investment SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an indictment charging seven defendants with orchestrating multiple schemes to defraud investors of tens of millions of dollars.
Two of the defendants were arrested this morning in connection with today’s charges. JASON GALANIS was arrested in Manhattan and will be presented later today. JARED GALANIS was arrested in the District of Maryland and will be presented later today before a U.S. Magistrate Judge in Baltimore. DEREK GALANIS is expected to surrender today in the Northern District of California and will be presented before a U.S. Magistrate Judge in San Francisco. GAVIN HAMELS is expected to surrender on Monday in the Southern District of New York and will be presented at that time. JOHN GALANIS, a/k/a “Yanni,” GARY HIRST, and YMER SHAHINI remain at large.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Jason Galanis and his co-conspirators used their Wall Street credentials and the veneer of a legitimate-sounding financial firm to manipulate the market and fleece investors. Their alleged market manipulation brought them nearly $20 million in profits, but now also a federal indictment.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Galanis and his co-conspirators exemplified arrogance and contempt for financial regulations when they allegedly devised a scheme to defraud investors to fund a lavish lifestyle. Law enforcement will never tolerate this alleged egregious behavior and will bring those to justice who lie and do not play by the rules.”
According to the Indictment unsealed in Manhattan federal court[1], the defendants engaged in the following fraudulent schemes:
The Gerova Scheme
From 2009 to 2011, JASON GALANIS, JOHN GALANIS, JARED GALANIS, HIRST, DEREK GALANIS, SHAHINI, and HAMELS engaged in a scheme to defraud the shareholders of a publicly traded company called Gerova Financial Group, Ltd. (“Gerova”), and the investing public, by obtaining secret control over millions of shares of Gerova stock and then manipulating the market for the stock as the defendants caused their secretly held shares to be sold.As part of the scheme, the defendants fraudulently generated demand for Gerova stock by bribing investment advisers to purchase for client accounts the Gerova stock that was sold by the defendants, thereby enabling the defendants to cash out from the scheme and make millions in illegal profits.
As a part of the scheme to defraud, JASON GALANIS obtained such control over Gerova so as to be able to cause Gerova to enter into transactions of his design, and for his benefit, including the issuance of Gerova stock.JASON GALANIS obtained this control without identifying himself as an officer or director of Gerova to avoid the SEC-imposed bar that prohibited him from holding such positions at publicly traded companies.Among other means and methods, JASON GALANIS, with the assistance of GARY HIRST, caused more than five million shares of Gerova stock, which represented nearly half the company’s public float and which was intended for JASON GALANIS’s ultimate benefit, to be issued to and held in the name of YMER SHAHINI, who knowingly served as a foreign nominee for JASON GALANIS.JASON GALANIS, JOHN GALANIS, JARED GALANIS, DEREK GALANIS, HIRST, and SHAHINI understood that the purpose of the stock grant to SHAHINI was to disguise JASON GALANIS’s ownership interest in the stock, and to evade the SEC’s regulations for issuing unregistered shares of stock.
At the same time, and as a further part of the scheme to defraud, JOHN GALANIS, JARED GALANIS, and DEREK GALANIS, among others, with the knowledge and approval of JASON GALANIS, opened and managed brokerage accounts in the name of SHAHINI (the “SHAHINI Accounts”), effected the sale of Gerova stock from the SHAHINI Accounts, and received and concealed the proceeds, knowing that this activity was designed to conceal from the investing public JASON GALANIS’s ownership of and control over the Gerova stock.
JASON GALANIS and JARED GALANIS also fraudulently induced investment advisers, including GAVIN HAMELS and others, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser.By causing the purchase of Gerova stock at the time, quantity, and/or price of their choosing, JASON GALANIS and JARED GALANIS were able to, among other things, effectuate the sale of large quantities of Gerova stock from the SHAHINI Accounts that JASON GALANIS controlled while artificially maintaining the price of Gerova stock through coordinated match trading.Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public.As a result, JASON GALANIS and his co-conspirators reaped nearly $20 million in profits.
The Scheme to Defraud Clients of Investment Firm-2
From November 2007 to April 2010, JASON GALANIS and JARED GALANIS, along with an investment adviser identified in the Indictment as “CC-2,” participated in a scheme to defraud the clients of CC-2’s investment advisory firm, identified in the Indictment as “Investment Firm-2.”Oftentimes in exchange for compensation from JASON GALANIS and JARED GALANIS, CC-2 caused Investment Firm-2 clients to invest in notes issued by entities associated with JASON GALANIS and JARED GALANIS.
When obligations owed by entities associated with JASON GALANIS and JARED GALANIS became due, CC-2, with the knowledge of JASON GALANIS and JARED GALANIS, used client funds to purchase either notes issued by other entities associated with JASON GALANIS and JARED GALANIS, or publicly traded shares held by such entities.The funds generated were then used to pay the original obligations owed to other Investment Firm-2 clients.Through these securities trades, funds in client accounts of one set of Investment Firm-2 investors were used to pay obligations owed to a different set of Investment Firm-2 investors by entities associated with JASON GALANIS and JARED GALANIS.
* * *
Charts identifying each defendant, the charges, and the maximum penalties are attached to this release. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge. The case has been assigned to U.S. District Judge P. Kevin Castel.
Mr. Bharara praised the work of the United States Postal Inspection Service and the Federal Bureau of Investigation, and thanked the U.S. Securities and Exchange Commission for its assistance.He added that the investigation is continuing.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrew Bauer, Brian Blais, and Dina McLeod are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
COUNT
CHARGE
DEFENDANTS
MAXIMUM PENALTIES
1
Conspiracy to Commit Securities Fraud (18 U.S.C. § 371)
JASON GALANIS
JOHN GALANIS, a/k/a “Yanni”
JARED GALANIS
GARY HIRST
DEREK GALANISYMER SHAHINI
GAVIN HAMELS
Five years in prison and a $250,000 fine or twice the gross gain or loss from the offense
2
Securities Fraud (15 U.S.C. §§ 78j(b) & 78ff; 17 C.F.R. § 240.10b-5; 18 U.S.C. § 2)
JASON GALANIS
JOHN GALANIS, a/k/a “Yanni”
JARED GALANIS
GARY HIRST
DEREK GALANISYMER SHAHINI
GAVIN HAMELS
20 years in prison and a $5,000,000 fine or twice the gross gain or loss from the offense
3
Conspiracy to Commit Wire Fraud (18 U.S.C. § 1349)
JASON GALANIS
JOHN GALANIS, a/k/a “Yanni”
JARED GALANIS
GARY HIRST
DEREK GALANISYMER SHAHINI
20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense
4
Wire Fraud (18 U.S.C. §§ 1343 and 2)
JASON GALANIS
JOHN GALANIS, a/k/a “Yanni”
JARED GALANIS
GARY HIRST
DEREK GALANISYMER SHAHINI
20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense
5
Investment Adviser Fraud (15 U.S.C. §§ 80b-6 & 80b-17; 18 U.S.C. § 2)
JASON GALANIS
JARED GALANIS
GAVIN HAMELS
Five years in prison and a fine of $10,000
6
Investment Adviser Fraud (15 U.S.C. §§ 80b-6 & 80b-17; 18 U.S.C. § 2)
JASON GALANIS
JARED GALANIS
Five years in prison and a fine of $10,000
7
Investment Adviser Fraud (15 U.S.C. §§ 80b-6 & 80b-17; 18 U.S.C. § 2)
JASON GALANIS
Five years in prison and a fine of $10,000
8
Conspiracy to Commit Securities Fraud (18 U.S.C. § 371)
JASON GALANIS
JARED GALANIS
Five years in prison and a $250,000 fine or twice the gross gain or loss from the offense
9
Securities Fraud (15 U.S.C. §§ 78j(b) & 78ff; 17 C.F.R. § 240.10b-5; 18 U.S.C. § 2)
JASON GALANIS
JARED GALANIS
20 years in prison and a $5,000,000 fine or twice the gross gain or loss from the offense
DEFENDANT
RESIDENCE
AGE
- Jason Galanis
Los Angeles, CA
45
- John Galanis, a/k/a “Yanni”
Oceanside, CA
72
- Jared Galanis
Baltimore, MD
36
- Gary Hirst
Lake Mary, FL
63
- Derek Galanis
Oceanside, CA
43
- Ymer Shahini
Kosovo
45
- Gavin Hamels
Encinitas, CA
39
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Man Sentenced to 200 Months in Prison for Drug Trafficking and Gun PossessionRead the Press Release
SYRACUSE, NEW YORK – Brock Yancy, 35, of Syracuse, New York, was sentenced yesterday to serve 200 months (16 years, 8 months) in prison for his convictions for conspiracy to possess with the intent to distribute 280 grams or more of cocaine base (crack cocaine); and possession of a firearm in furtherance of drug trafficking, announced United States Attorney Richard S. Hartunian, Drug Enforcement Administration (DEA) Assistant Special Agent in Charge James Burns, and Syracuse Police Chief Frank Fowler. Chief United States District Judge Glenn T. Suddaby also sentenced Yancy to five years of supervised release following his jail term.
The sentence yesterday stemmed from a joint DEA and Syracuse Police PD investigation begun in 2013 into Yancy’s drug trafficking activities with co-conspirator Dwayne Handy in the Syracuse area. The wiretap investigation culminated on April 15, 2014, when agents arrested Handy and Yancy as they traveled to a drug deal. A search warrant executed at Yancy’s residence resulted in the seizure of over $32,000.00 in drug proceeds. An additional search warrant at a "stash" location the defendants’ utilized on Butternut Street, Syracuse recovered 12 grams of cocaine, several boxes of ammunition and four (4) handguns
This case was investigated by the DEA and Syracuse Police Department, and was prosecuted by Assistant United States Attorney Carla Freedman.
Man Sentenced to 15 Years in Prison for Drug Trafficking and Gun PossessionRead the Press Release
SYRACUSE, NEW YORK – Dwayne Handy, 37, of Syracuse, New York, was sentenced yesterday to serve fifteen years in prison for his convictions for conspiracy to possess with the intent to distribute 280 grams or more of cocaine base (crack cocaine); possession with the intent to distribute over 280 grams or more of crack cocaine, 500 grams or more of cocaine, and heroin; and possession of firearms in furtherance of drug trafficking, announced United States Attorney Richard S. Hartunian, Drug Enforcement Administration (DEA) Assistant Special Agent in Charge James Burns, and Syracuse Police Chief Frank Fowler. Chief United States District Judge Glenn T. Suddaby also sentenced Handy to five years of supervised release following his jail term.
The sentence yesterday stemmed from a joint DEA and Syracuse Police investigation begun in 2013 into Handy’s drug trafficking activities in the Syracuse area. The wiretap investigation culminated on April 15, 2014, when agents arrested Handy and co-conspirator Brock Yancy while they were traveling to a drug deal. Search warrants were executed at their residences, as well as a "stash" location they utilized on Butternut Street, Syracuse, where law enforcement officers recovered over 500 grams (1/2 kilogram) of crack cocaine, 500 grams (1/2 kilogram) of powder cocaine, heroin, and over $10,000.00 in cash in a safe belonging to Handy. Also seized in the search were several boxes of ammunition and four (4) handguns.
This case was investigated by the DEA and Syracuse Police Department, and was prosecuted by Assistant United States Attorney Carla Freedman.
Kern County Residents Indicted for Marijuana Cultivation Operation in National ForestRead the Press Release
FRESNO, Calif. — A federal grand jury returned a seven-count indictment today against Juan Penaloza-Ramirez, aka Juan Penaloza-Herrera, aka Juan Penaloza (Penaloza), 44, of Michoacán, Mexico, residing in Taft, California, and Russell Lee Riggs, 67, of Weldon, charging them with conspiring to manufacture, distribute and possess with intent to distribute, manufacturing, and two counts of possessing with intent to distribute marijuana in connection with a large-scale cultivation operation in the Fay Creek drainage in Tulare and Kern Counties in the Sequoia National Forest, United States Attorney Benjamin B. Wagner announced. Penaloza was also charged with damaging public land and natural resources as a result of the marijuana cultivation activities and being an illegal alien in possession of a firearm. Riggs was charged separately with possessing an unregistered short-barreled shotgun.
According to court documents, it is alleged that Penaloza and Riggs were supplying material, equipment, and personnel to a cultivation site at Fay Creek drainage, which consisted of over 3,000 marijuana plants, and were also responsible for transporting processed marijuana away from the grow site. It is further alleged that the marijuana cultivation operation caused extensive damage to the land and natural resources. Fay Creek supports a variety of ecosystems and resources, including riparian habitat supporting trout, wildflowers and grasses, and willow, alder and cottonwood trees. Fay Creek also serves as the primary drinking water source for many wildlife in the area. Springs were dammed and diverted to irrigate the marijuana plants and large amounts of trash were scattered throughout, including in a flowing stream.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Drug Enforcement Administration, the Bureau of Land Management, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco Firearms and Explosives, the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, California Department of Justice’s Campaign Against Marijuana Planting (CAMP), and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.
Penaloza and Riggs were ordered detained and are scheduled for arraignment on the indictment on September 28, 2015, in federal court in Fresno. If convicted of the most serious drug offenses as charged in counts one through three, Penaloza faces a mandatory minimum statutory penalty of 10 years and a maximum statutory penalty of life in prison and a $10 million fine, and Riggs faces a mandatory minimum statutory penalty of five years and a maximum statutory penalty of 40 years in prison and a $5 million fine. If convicted of the environmental crime, Penaloza faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted of the firearms offenses, the defendants face a maximum statutory penalty of 10 years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Justice Department and Consumer Financial Protection Bureau Reach Settlement with Hudson City Savings Bank to Resolve Allegations of Mortgage Lending DiscriminationRead the Press Release
Settlement Provides Over $27 Million to Ensure Equal Lending Services to Predominantly Black and Hispanic Communities
The Justice Department and Consumer Financial Protection Bureau (CFPB) filed a consent order today to resolve allegations that Hudson City Savings Bank (Hudson City) engaged in a pattern or practice of “redlining” predominantly Black and Hispanic neighborhoods in its residential mortgage lending practices. “Redlining” is the discriminatory practice by banks or other financial institutions to deny or avoid providing credit services to a consumer because of the racial demographics of the neighborhood in which the consumer lives. This resolution represents the Justice Department’s largest residential mortgage redlining settlement in its history.
The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the District of New Jersey. The complaint alleges that Hudson City violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA), which prohibit financial institutions from discriminating on the basis of race, color or national origin in their mortgage lending practices. Specifically, the complaint alleges that from at least 2009 to 2013, Hudson City failed to serve the credit needs of majority-Black-and-Hispanic neighborhoods throughout its major market areas, including in New Jersey, New York City and its surrounding counties, and the Philadelphia and Bridgeport, Connecticut, metropolitan areas. Hudson City has agreed to settle this matter without contested litigation.
“This case should send a message to lenders throughout the country that the Justice Department will not tolerate racial discrimination in the extension of credit,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services. We encourage all lenders to proactively identify responsible lending opportunities that exist in predominantly minority neighborhoods within their lending areas.”
“Hudson City Savings Bank structured its business operations to systemically avoid providing credit services in predominantly minority neighborhoods,” said U.S. Attorney Paul J. Fishman of the District of New Jersey. “There is no room for such behavior in our banking system. In addition to paying $25 million for a loan subsidy program, today’s settlement agreement will require the bank to take a number of concrete steps to ensure that they improve access to responsible and affordable credit to qualified borrowers in Black and Hispanic neighborhoods.”
“We allege that Hudson City's redlining practices illegally cut off opportunities for consumers in predominantly Black and Hispanic neighborhoods to get a mortgage and achieve the dream of homeownership,” said CFPB Director Richard Cordray. “Without access to affordable credit, neighborhoods deteriorate in the long shadow cast by unfair lending. Today's action seeks to remove the redline by bringing $27 million in mortgage subsidies and outreach programs, along with new bank branches to the communities who should have had access from the beginning.”
The lawsuit originated from a joint investigation with the CFPB that commenced in March 2015.
Under the terms of the proposed settlement, Hudson City will invest $25 million in a loan subsidy fund to increase the amount of credit the bank extends to majority-Black-and-Hispanic neighborhoods across its market areas. In order to make residential mortgage loans available to residents of minority neighborhoods that were not adequately served by Hudson City, the bank will further invest $2.25 million in advertising, outreach, financial education, and community partnership efforts and open two full-service branches in these neighborhoods. The settlement will require Hudson City to further develop robust internal controls to ensure compliance with fair lending obligations, provide fair lending training to its employees, senior management, and the Board of Directors, and create a comprehensive long-term plan to increase lending in previously redlined areas. Hudson City will further pay a civil monetary penalty of $5.5 million.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division, the U.S. Attorney’s Office for the District of New Jersey, and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.
Justice Department and Consumer Financial Protection Bureau Reach Settlement with Hudson City Savings Bank to Resolve Allegations of Mortgage Lending DiscriminationRead the Press Release
Settlement Provides Over $27 Million to Ensure Equal Lending Services to Predominantly Black and Hispanic Communities
NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey, the U.S. Department of Justice Civil Rights Division, and the Consumer Financial Protection Bureau (CFPB) filed a consent order today to resolve allegations that Hudson City Savings Bank (Hudson City) engaged in a pattern or practice of redlining predominantly Black and Hispanic neighborhoods throughout its major market areas with respect to the extension of residential mortgage credit. This resolution represents the Justice Department’s largest residential mortgage redlining settlement in its history.
The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the District of New Jersey. The complaint alleges that Hudson City violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA), which prohibit financial institutions from discriminating on the basis of race, color, or national origin in their mortgage lending practices. The complaint alleges that from at least 2009 to 2013, Hudson City failed to serve the credit needs of majority-Black-and-Hispanic neighborhoods throughout its lending footprint, including in New Jersey, New York City and its surrounding counties, the Bridgeport, Connecticut, and Philadelphia, Pennsylvania, metropolitan areas, and the City of Camden. Hudson City has agreed to settle this matter without contested litigation.
“Hudson City Savings Bank structured its business operations to systemically avoid providing credit services in predominantly minority neighborhoods. There is no room for such behavior in our banking system,” U.S. Attorney Fishman said. “In addition to paying $25 million for a loan subsidy program, today’s settlement agreement will require the bank to take a number of concrete steps to ensure that they improve access to responsible and affordable credit to qualified borrowers in Black and Hispanic neighborhoods.”
“This case should send a message to lenders throughout the country that the Justice Department will not tolerate racial discrimination in the extension of credit,” Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, said. “A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services. We encourage all lenders to proactively identify responsible lending opportunities that exist in predominantly minority neighborhoods within their lending areas.”
“We allege that Hudson City's redlining practices illegally cut off opportunities for consumers in predominantly Black and Hispanic neighborhoods to get a mortgage and achieve the dream of homeownership,’ CFPB Director Richard Cordray said. “Without access to affordable credit, neighborhoods deteriorate in the long shadow cast by unfair lending. Today’s action seeks to remove the redline by bringing $27 million in mortgage subsidies and outreach programs, along with new bank branches to the communities who should have had access from the beginning.”
The lawsuit originated from a joint investigation with the Consumer Financial Protection Bureau that commenced in March 2015.
Under the terms of the proposed settlement, Hudson City will invest $25 million into a loan subsidy fund to increase the amount of credit the bank extends to majority-Black-and-Hispanic areas across its market areas. To enable the bank to make residential mortgage loans available to residents of minority neighborhoods that were not adequately served by Hudson City, the bank will further invest $2.25 million into advertising, outreach, financial education, and community partnership efforts and open two full-service branches in these neighborhoods. The settlement will require Hudson City to develop robust internal controls to ensure compliance with fair lending obligations, provide fair lending training to employees, senior management, and the Board of Directors, and create a comprehensive long-term plan to increase lending in previously redlined areas. Hudson City will pay a civil monetary penalty of $5.5 million.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.
The government is represented by Assistant U.S. Attorneys Michael E. Campion and Svetlana Eisenberg of the District of New Jersey, and Trial Attorney Ronald Lee, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.
The Civil Rights Division, the U.S. Attorney’s Office for the District of New Jersey, and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov
Jackson Police Officer Charged with ExtortionRead the Press Release
Jackson, Miss – A criminal complaint has been filed against Jackson Police Officer Bryan Jones, 44, of Jackson, charging him with extortion by use of his position as a police officer, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway.
The criminal complaint alleges that Jones used his position as a Jackson Police Officer to extort money. According to the affidavit filed in support of the criminal complaint, Jones assisted drug dealers by conducting illegal traffic stops, searches, and seizures on competitors or rival drug dealers. On April 15, 2015, Jones illegally stopped a vehicle and seized $5,000 from someone he believed to be a drug dealer coming into Jackson to purchase drugs. The affidavit further states that Jones conducted an illegal stop on June 23, 2014 and seized cash from someone he believed to be a drug dealer. The cash taken by Jones on both occasions was never recorded or submitted to the Jackson Police Department; instead the cash was divided between Jones and another person.
United States Attorney Gregory K. Davis praised the efforts of the Federal Bureau of Investigation and would like to thank Chief Lee Vance and the Jackson Police Department for their assistance in this matter.
Jones will appear in federal court for an initial appearance today at 2:00 p.m. before U.S. Magistrate Judge Linda R. Anderson. The offense charged in the complaint carries a maximum sentence of 20 years in prison, and up to a $250,000 fine.
This case will be prosecuted by Assistant U.S. Attorneys Mary Helen Wall and Erin Chalk.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
Imperial Business Owner Admits Trafficking in Millions of Dollars of Counterfeit Cell Phone PartsRead the Press Release
Assistant U.S. Attorneys Nicholas Pilchak (619) 546-9709 and Mark Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – September 24, 2015
SAN DIEGO – Imperial Valley businessman Octavio Cesar Sana, a Spanish national with legal U.S. residency, pleaded guilty today to running a years-long conspiracy to traffic in millions of dollars of counterfeit Chinese cell phone parts.
Sana pleaded guilty before U.S. Magistrate Judge William Gallo to conspiring to traffic in counterfeit goods and related money laundering charges. According to the plea agreement, Sana sold at least $3.2 million worth of counterfeit Chinese cell phone parts through businesses he has operated since 2007—including through a website called “Flexqueen.com.”
Sana was arrested February 3, 2015 at the Imperial Valley Airport, along with Chinese national Hongwei Du. Du has also been charged with conspiracy to traffic in counterfeit goods.*
Sana admitted in his plea agreement that he and Du were attending meetings in the United States to set up further counterfeit trafficking ventures. The two were arrested in connection with a multi-year investigation spearheaded by Homeland Security Investigations (HSI) and the Internal Revenue Service, Criminal Investigations. HSI executed a series of searches nationwide coordinated with the arrest of Sana and Du, including Tampa, Florida; Brownsville, Texas; Boston, Massachusetts; Atlanta, Georgia; Pittsburgh, Pennsylvania; Nashville, Tennessee; and Orange, San Diego and Imperial counties in California. These searches resulted in the seizure of more than 55,000 counterfeit items, and additional criminal charges in several jurisdictions.
According to the plea agreement, since 2007, Sana’s businesses have sold approximately $6.5 million of cell phone parts and accessories to businesses and consumers throughout the United States. Sana admitted, however, that roughly half of those parts were counterfeits, sourced almost exclusively from China.
Sana also admitted in his plea agreement that he and his co-conspirators used extensive methods to frustrate the ability of U.S. Customs and Border Protection to detect, inspect and intercept their imported counterfeit goods. An example of such deception included shipping merchandise with “protective stickers” strategically placed to obscure the products’ infringing trademarks. The plea agreement also explains that Sana and Du utilized a dedicated shipping channel for branded goods to avoid attention from Chinese customs officials.
In the United States, Sana admitted that he supervised at least four other individuals who worked at his businesses distributing counterfeit merchandise, including Angela Vela, who also pleaded guilty to separate charges in federal court in El Centro today before Judge Peter Lewis. Sana admitted wiring more than $3.1 million to a bank account in Hong Kong to pay for that merchandise and other items, and acknowledged that at least $3.2 million of merchandise sold by his business since 2007 was fake.
Sentencing for both defendants is scheduled for January 4, 2016 at 8:30 a.m. before U.S. District Judge M. James Lorenz.
As part of his plea agreement, Sana has agreed to forfeit $3.2 million, along with 18 cell phones, 13 computers, and 2 hard drives seized the day of his arrest, and the two website domain names used by his businesses to sell the counterfeits.
“Trafficking in counterfeit goods threatens the integrity of the marketplace,” said U.S. Attorney, Laura E. Duffy. “Consumers who purchase sophisticated electronics equipment bearing a brand name trademark shouldn’t have to run the risk of being fleeced by a counterfeit.” U.S. Attorney Duffy observed that trafficking in counterfeit goods is a profitable and growing criminal industry; U.S. Customs and Border Protection (CBP) reported that in 2014 alone, it intercepted an estimated $1.2 billion of counterfeit goods in more than 23,000 seizures.
Duffy commended the close coordination between the investigating agencies—the Department of Homeland Security, Homeland Security Investigations; the Internal Revenue Service, Criminal Investigations; and the U.S. Postal Inspection Service—during the lengthy investigation of this case. The Department of Justice’s Office of International Affairs also provided invaluable assistance.
“The sale of counterfeit goods not only robs legitimate companies of billions in revenue every year, it also hurts the men and women who depend on those businesses for their livelihoods,” said David Shaw, Special Agent in Charge for HSI San Diego. “Beyond that, intellectual property theft poses a very real public safety threat, by generating proceeds for organized crime and introducing substandard, often dangerous goods into the commerce chain.”
“IRS Criminal Investigation will continue to focus on keeping illicit proceeds out of U.S. banks,” said Special Agent in Charge Erick Martinez. “Today's plea demonstrates the federal government is committed to maintaining the integrity of our financial system.”
Du, the remaining defendant, is next scheduled to appear in court on November 2, 2015.
DEFENDANT Case No. 15-cr-2316-L
Octavio Cesar Sana 42 years old El Centro, CA
CHARGES
Conspiracy to Traffic in Counterfeit Goods - 18 U.S.C. § 371
Maximum penalty: 5 years’ imprisonment and $250,000 fine
Money Laundering Conspiracy – 18 U.S.C. § 1956(h)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
RELATED DEFENDANTS
Case No. 15-cr-526-L
Hongwei “Nick” Du 31 years old Shenzhen, China
Case No. 15-cr-612-L
Angela Rose Vela 36 years old El Centro, CA
AGENCIES
Homeland Security Investigations
Internal Revenue Service – Criminal Investigations
U.S. Postal Inspection Service
*An indictment or complaint is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Honduran National Sentenced for Illegal Reentry into the United StatesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAROL DAVID SOSA-PALMA, age 34, a citizen of Honduras, was sentenced today after pleading guilty to a one-count Indictment for illegal reentry of a removed alien.
U.S. District Judge Nannette Jolivette Brown sentenced SOSA-PALMA to six months in prison followed by one year of supervised release, and a $100 special assessment. Following his incarceration, SOSA-PALMA will be surrendered to the custody of the U.S. Immigration & Customs Enforcement for removal proceedings.
According to the Indictment, on or about May 30, 2015, SOSA-PALMA was found in the United States after having been officially deported and removed on or about June 21, 2013.
U.S. Attorney Polite praised the work of the United States Immigration and Customs Enforcement Agency in investigating this matter. Assistant United States Attorney Spiro G. Latsis was in charge of the prosecution.
Hancock County, WV man sentenced for possessing stolen firearmRead the Press Release
WHEELING, WEST VIRGINIA – Timothy J. Jackson, 56, of Newell, West Virginia, was sentenced today twelve months and one day in prison for possession of a stolen firearm. United States Attorney William J. Ihlenfeld, II, announced.
Jackson was discovered in Hancock County, West Virginia in December 2014 in possession of a stolen .25 caliber semi-automatic pistol. He pled guilty in August 2015 to one count of “Possession of a Stolen Firearm.”
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hancock, Brooke, Weirton Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge John Preston Bailey presided.Glassport Man Charged with Fraud for Purchasing Game Tickets without PayingRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury on charges of wire fraud, United States Attorney David J. Hickton announced today.
The 12-count indictment, returned on Sept. 22, named William B. Rusnock, 35, Glassport, PA, as the sole defendant.
According to the indictment, Rusnock made fraudulent purchases of sporting event tickets on StubHub! without paying for them, defrauding StubHub!, PayPal and Huntington Bank.
The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both for each count of conviction. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Four Men and One Woman Federally Indicted for Robbery of West Bend Jewelry StoreRead the Press Release
Acting United States Attorney Gregory J. Haanstad announced today that five Detroit-area individuals were indicted for the December 29, 2014 robbery of the Husar’s House of Fine Diamonds in West Bend, Wisconsin. Trayvon Shelton (age 24) Charles Leroy Hall (age 28) Gawain Mandeville-Nelson II (age 23) Deangelo Hayes (age 23) and Aliya Rahman (age 21) were charged with one count of Hobbs Act robbery.
The criminal complaints filed against Shelton, Hall, and Mandeville-Nelson II provide a detailed account of the allegations against the defendants. According to the complaints, in the days leading up to the robbery, the defendants traveled from Detroit, Michigan to Wisconsin. On December 29, 2014, the defendants entered the jewelry store armed with sledgehammers and stole a number of Rolex watches. If convicted, each defendant faces up to 20 years in prison on the Hobbs Act robbery count.
Shelton, Hall, and Mandeville-Nelson are currently in federal custody. Hayes and Rahman remain at large.
This matter is being investigated by the FBI’s Milwaukee Area Violent Crimes Task Force and the West Bend Police Department, with assistance from the FBI – Detroit Division and the Eastern District of Michigan United States Attorney’s Office. This case is being prosecuted by Assistant United States Attorney Margaret B. Honrath.
The public is cautioned that an indictment is merely a charge and the defendants are presumed innocent until proven guilty.
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Former mayor of Pratt pleads guilty to selling oxycodoneRead the Press Release
CHARLESTON, W.Va. – Gary Fields, 68, the former mayor of Pratt, West Virginia, admitted to selling the powerful prescription painkiller oxycodone. Fields pleaded guilty today in federal court in Charleston to distribution of oxycodone, announced U.S. Attorney Booth Goodwin.
As part of the plea, Fields admitted that he sold six 15 mg oxycodone pills to a confidential informant on April 23, 2015. Fields is scheduled to be sentenced on January 21, 2016.
The investigation was conducted by the Kanawha County Sherriff’s Department. Assistant United States Attorney Haley Bunn is handling the prosecution.
The prosecution is part of an ongoing effort by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Former mayor of Pratt pleads guilty to selling oxycodoneRead the Press Release
CHARLESTON, W.Va. – Gary Fields, 68, the former mayor of Pratt, West Virginia, admitted to selling the powerful prescription painkiller oxycodone. Fields pleaded guilty today in federal court in Charleston to distribution of oxycodone, announced U.S. Attorney Booth Goodwin.
As part of the plea, Fields admitted that he sold six 15 mg oxycodone pills to a confidential informant on April 23, 2015. Fields is scheduled to be sentenced on January 21, 2015.
The investigation was conducted by the Kanawha County Sherriff’s Department. Assistant United States Attorney Haley Bunn is handling the prosecution.
The prosecution is part of an ongoing effort by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Former Seminole County High School Teacher Pleads Guilty to Enticement of A Minor and Production of Child PornographyRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Gregory A. Vaughn (58, Seminole County) has pleaded guilty to enticement of a minor, and production and receipt of child pornography. He faces 10 years, up to life, in prison, for the enticement charge; a minimum mandatory penalty of 15 years, up to 30 years, for the production charge; and 5 years, up to 20 years, in federal prison for the receipt charge. His sentencing hearing has been set for December 11, 2015.
According to court documents, during a span of two years, Vaughn groomed and persuaded a minor to produce and send him images depicting child pornography. He informed the girl that he wanted to pay for the pictures, and he structured a pay chart for the types of photographs she should take and send to him. Vaughn mailed the girl money, books, candy, clothes, underwear, and makeup in exchange for the pictures she had sent him.
Vaughn’s cellphone and computer were searched pursuant to a state search warrant and agents were able to recover images of the victim and other children from his computer. Agents also interviewed another victim, who also had been groomed and enticed into producing child pornography by Vaughn.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
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 (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Schuylkill County Employee Charged with Embezzling $452,186Read the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a former Schuylkill County employee, Virginia G. Kunigonis, age 54, of Pottsville, Pennsylvania, has been charged with embezzling $452,186 from the Schuylkill County Conservation District between 2007 and 2014.
According to U.S. Attorney Peter Smith, an Information filed with United States District Court today in Harrisburg, Kunigonis was charged with one count of Theft From Programs Receiving Federal Funds. The Information alleges Kunigonis forged 437 Conservation District checks totaling $410,435 between October of 2007 and May of 2014. The Information also alleges Kunigonis used a Conservation District credit card to pay an additional $41,751 in personal expenses during that same time period. The Information alleges the Schuylkill County Conservation District received in excess of $10,000 in federal grant monies each year between 2007 and 2014.
The Information was filed pursuant to a plea agreement that was also filed with the Court. In the plea agreement Kunigonis agreed to plead guilty to the one count Information, to cooperate with the government, to make restitution as ordered by the court, and to forfeit the sum of $452,186, all of her interests in her Pottsville, PA residence, and all of her interests in her Schuylkill County retirement account, net of taxes, to the government.
According to the Information, Virginia Kunigonis began working as an administrative assistant for the Schuylkill County Conservation District in approximately 2002. Prior to that she worked in various capacities for Schuylkill County since 1986. No date has yet been scheduled for the entry of Kunigonis’ guilty plea.
The case was investigated by the Scranton Office of the FBI in conjunction with the Pennsylvania State Police and is being prosecuted by Assistant U.S. Attorney Kim Douglas Daniel.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty for Health Care Fraud is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum term of imprisonment for False Statements in Health Care Matters is 5 years imprisonment. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Former Miami Springs Police Department Sergeant Sentenced to Nine Years in PrisonRead the Press Release
Former Miami Springs Police Department (MSPD) Sergeant Andres Quintanilla was sentenced today to nine years in prison by U.S. District Court Chief Judge Michael K. Moore. Quintanilla had previously pleaded guilty to receiving bribes from an undercover FBI confidential source, who Quintanilla believed was a narcotics trafficker.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, FBI, Miami Field Office made the announcement.
Andres Quintanilla, 34, had previously pleaded guilty to attempting to affect commerce by extortion under color of official right, in violation of Title 18, United States Code, Section 1951(a). Quintanilla was sentenced to 108 months in prison, to be followed by a year of supervised release. He was also ordered to pay a $5,000 fine and to forfeit an additional $3,700 that had been paid to him by the confidential source.
According to court documents, in October 2014, a FBI confidential source (CS) informed Quintanilla that he (the CS) was a drug trafficker. Rather than arrest the CS, or open an investigation, Quintanilla offered to help the CS’s drug trafficking business. During a series of recorded meetings, Quintanilla offered advice on how the CS should run his drug trafficking business, provided the location of an unmarked Miami-Dade Police Department narcotics office, provided the names of three Miami-Dade Police Department officers, and promised to provide photographs of officers in the future. In addition, Quintanilla ran the name of a purported drug dealer in a law enforcement database when asked to do so by CS.
By December 2014, Quintanilla had agreed to act as an escort during a purported 10 kilogram cocaine deal. Under FBI direction, the CS told Quintanilla that the CS needed a safe location in Miami Springs where the CS could exchange 10 kilograms of cocaine for $250,000. Quintanilla chose a location for the transaction to take place and, on the date of the transaction, the FBI filmed and recorded Quintanilla meeting with the CS and viewing the cocaine. After the purported deal took place with second undercover CS acting as a drug dealer, Quintanilla then followed the CS’s vehicle to an express package service center, where Quintanilla believed that the CS would ship the $250,000 of drug proceeds to New York. Quintanilla participated in the transaction in uniform, while driving his MSPD marked vehicle. In exchange for his assistance, Quintanilla accepted $3,500 in bribe payments.
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force. This case is being prosecuted by Assistant U.S. Attorney Anthony Lacosta.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Hanover Post Office Employee Sentenced for Mail TheftRead the Press Release
BOSTON – Amber Lopresti, 28, of Taunton, was sentenced today by U.S. District Court Judge George A. O’Toole, Jr., to two years of probation and restitution of $2,410.
In June 2015, Lopresti, a former employee of the United States Postal Service in Hanover, pleaded guilty to embezzling the U.S. mail and stealing the contents of the mail over a five month period while she was an employee. Lopresti has since been terminated.
On Oct. 8, 2014, while working as a Post Office employee, Lopresti was observed on a security camera rifling through the mail, removing unopened letters and greeting cards, and concealing them beneath her waistband. When her shift was over, she left the Post Office and removed the letters from her waistband once she was in her vehicle. She was stopped by police a short time later and the unopened letters and money were observed on her lap. Lopresti admitted to law enforcement officers that she took money from one of the stolen letters. She further admitted that in June 2014 she began stealing letters and contents from the letters from the Hanover Post Office, and had taken approximately $2,000 in cash, cards, and scratch tickets.
United States Attorney Carmen M. Ortiz; Eileen Neff, Special Agent in Charge of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office; and Hanover Police Chief Walter Sweeney, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz’s Major Crimes Unit.
Former Downtown Nightclub Bouncer Arrested on Charges of Operating Illegal Steroid Lab out of His Oak Lawn HomeRead the Press Release
CHICAGO — An Oak Lawn man was arrested today on federal charges that he imported anabolic steroids from China and distributed them to large-scale suppliers in the Chicago area.
JOSEPH T. PALERMO, 33, imported anabolic steroids, human growth hormone and pharmaceuticals from outside the United States for approximately five years, according to a federal criminal complaint and affidavit. The shipments from China arrived in the form of raw liquid or powder, which Palermo manufactured into usable steroids and distributed to large-scale dealers in the Chicago area, according to the charges.
Earlier this month, federal agents executing a search warrant at Palermo’s Oak Lawn residence discovered a makeshift steroid laboratory in the walk-in closet of a locked bedroom, the affidavit states. Inside the closet were approximately 600 empty glass vials, approximately 250 vials filled or partially-filled with suspected liquid steroids, more than 6,000 tablets labeled as anabolic steroids, glass beakers, a hot plate and a digital scale, according to the affidavit. Agents also discovered more than $9,000 in cash and several firearms, including a 9mm Glock handgun that was concealed under a pad in a sofa, the affidavit states.
Palermo, who is employed by the Argonne National Laboratory, was taken into custody this morning. He was charged with possession of a controlled substance with the intent to distribute. He appeared this afternoon before U.S. Magistrate Judge Maria Valdez and was released on a personal recognizance bond.
The arrest and charge against Palermo were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James Gibbons, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; and the U.S. Department of Energy’s Office of Inspector General.
The arrest is part of an ongoing investigation that has resulted in the issuance of numerous federal and state search warrants, as well as the initiation of other federal criminal cases, according to the affidavit.
According to the charges, Palermo purchased the steroids online and often wired the money through Western Union. The shipments were sometimes sent to P.O. Boxes that Palermo opened in his name or the names of people whose identities he had found on driver’s licenses mistakenly left behind at a downtown Chicago nightclub where Palermo formerly worked as a bouncer, according to the charges. Palermo estimated that he grossed approximately $2,000 per month through the scheme, the affidavit states.
In June, U.S. Customs and Border Protection officers in San Francisco intercepted a Chinese parcel addressed to a residence Palermo controlled in Northlake, the affidavit states. Although the parcel was declared as “Titanium Dioxide,” it contained 359.2 grams of an oily anabolic steroid, the affidavit states. In July, CBP officers intercepted a second Chinese shipment, this time containing a powdery anabolic steroid concealed in a tinfoil baggie, according to the charges. It was addressed to a Palermo-controlled P.O. Box in Elmhurst, the affidavit states.
The charge against Palermo carries a maximum sentence of 10 years in prison and a $500,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorney Kartik K. Raman.
Complaint
Federal charges dismantle Chicago-to-Ohio Valley heroin trafficking operationRead the Press Release
WHEELING, WEST VIRGINIA – Seven individuals from Ohio and West Virginia have been charged in federal court in connection with a drug trafficking operation that caused large quantities of heroin to be transported from Chicago to the Ohio Valley, United States Attorney William J. Ihlenfeld of the Northern District of West Virginia and United States Attorney Carter M. Stewart of the Southern District of Ohio announced today.
Frederick Allen McShan, 35, of Steubenville, Ohio, led an extensive, multi-state drug trafficking operation through which large quantities of heroin were transported from Chicago, Illinois into Northern West Virginia and Southern Ohio for redistribution and sale. McShan coordinated an intricate network of individuals to transport and distribute the drugs, including Perrier Duvall Coleman, 19, David McShan, 37, Donae F. Grier, 37, Terrence Lamont Smith, 26, all of Steubenville, along with Christopher Joshua Bishop, 31, and Kerris Deuntay Moncreace, 30, both of Weirton, West Virginia. The investigation involved the use of sophisticated surveillance techniques, undercover operations, and the execution of multiple federal search warrants, including the search of a business in Bellaire that was allegedly operated by one of the defendants.
Proceeds from the illegal drug transactions were used to purchase a variety of luxury items including vehicles and real estate. A large portion of those assets have been seized as part of the investigation.
The defendants will be prosecuted in federal courts in either the Southern District of Ohio or the Northern District of West Virginia. Each of the defendants is presently charged by federal criminal complaint with “Conspiracy to Possess with Intent to Distribute More Than One Kilogram of a Controlled Substance – Heroin.” They all face between 10 years and life in prison and a fine of up to $1,000,000. 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 defendants.
Agencies involved in the investigation include the Drug Enforcement Administration, the Federal Bureau of Investigation, the Hancock, Brooke, Weirton Drug and Violent Crime Task Force, the Marshall County Drug and Violent Crime Task Force, the Ohio Valley Drug and Violent Crime Task Force, all HIDTA-funded initiatives, the Jefferson County, Ohio Drug Task Force, the Belmont County, Ohio Drug Task Force, the West Virginia State Police Bureau of Criminal Investigation, the Ohio Bureau of Criminal Investigation, the City of Weirton Street Crimes Unit, the Toronto, Ohio Police Department, the Martins Ferry, Ohio Police Department, and the Steubenville, Ohio Police Department.
A criminal complaint is merely an accusation. All defendants are presumed innocent unless and until proven guilty.
Federal Jury Convicts Large Scale Drug DistributorRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Andrew Pieters (30, Orlando) guilty of conspiracy to distribute and possess with intent to distribute a controlled substance and attempting to possess with intent to distribute a controlled substance. He faces a maximum penalty of 20 years in federal prison on each charge. His sentencing hearing is scheduled for December 10, 2015.
According to evidence presented at trial, in 2013, Pieters was a top-level distributor of methylone in central Florida. Methylone is a schedule I controlled substance similar to Ecstasy and can cause overheating, dehydration, and death. The methylone Pieters distributed had been imported from China and purchased through the Silk Road, an online marketplace that was used to facilitate the purchase and sale of illegal drugs and other contraband.
Between January and August 2013, Pieters distributed hundreds of thousands of dollars of methylone. Federal agents arrested him on January 9, 2015, as he was attempting to take possession of a kilogram of suspected methylone. Prior to his arrest, Pieters had planned to distribute at least a kilogram per week of methylone in central Florida.
Drug Enforcement Administration Assistant Special Agent in Charge Jeffrey T. Walsh stated, “DEA will continue to work with our law enforcement partners and the United States Attorney’s Office in order to identify and bring to justice any persons importing and distributing illegal narcotics in the Central Florida region. We will continue to dedicate any resources necessary to identify emerging trends and methods that are utilized by these drug trafficking organizations.”
This case was investigated by the Drug Enforcement Administration, United States Postal Inspection Service, Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the West Orange Narcotics Task Force, which is directed by the Orange County Sheriff’s Office and comprised of multiple local agencies. It is being prosecuted by Assistant United States Attorney J. Bishop Ravenel.
Federal Grand Jury Indicts Nigerian Man for Role in “Business Email Compromise” Scheme That Caused Attempted $1.3 Million Loss to U.S. CompaniesRead the Press Release
DALLAS — A Nigerian citizen in the U.S. on a student visa has been charged in a federal indictment, returned late today, with one count of conspiracy to commit wire fraud stemming from his role in what has become known as a “Business Email Compromise” scheme, announced U.S. Attorney John Parker of the Northern District of Texas.
Amechi Colvis Amuegbunam, 28, of Lagos, Nigeria, was arrested late last month on a related federal criminal complaint, filed earlier this year in the Northern District of Texas, when he entered the U.S. in Baltimore, Maryland. He made his initial appearance before a U.S. Magistrate Judge in federal court in the District of Maryland on August 25, 2015, and was detained. It is expected that he will make an appearance in federal court in Dallas this week.
The indictment alleges that from November 2013 through August 2015, Amuegbunam and other individuals, sent, and caused to be sent, fraudulent emails to companies in the Northern District of Texas and elsewhere, containing material misrepresentations that caused the companies to wire transfer funds as instructed on a pdf document that was attached to the email. According to the complaint, Amuegbunam is responsible for more than a $1.3 million attempted loss, and a $615,550 actual loss, to U.S. companies, including Wells Fargo and JP Morgan Chase.
The FBI, according to the complaint, is investigating an extensive money laundering and wire fraud scheme primarily operated by individuals in Nigeria, and assisted by individuals in the U.S., who are exploiting open source information and using social engineering techniques to steal millions of dollars from U.S. corporations and individuals. The scheme has become so common that the term, “Business Email Compromise” scheme, was coined, and on August 25, 2015, the FBI issued a Public Service Announcement regarding the scheme.
The investigation of this particular BEC scheme began when two companies in the Dallas/Fort Worth area reported to the FBI Dallas office that they had received targeted spear phishing emails. These emails appeared to be a forwarded message, allegedly from a top executive at the company, sent to an employee in the company’s accounting department who had authority to make financial transfers for the company. Although the emails appeared to be coming from a company executive, the messages were actually coming from a false email account fraudulently created to look like a legitimate company email account. A fraudulent domain name was used that contained one small difference from the true company’s email address – such as transposed letters. After complying with the spear phishing email instructions to transfer funds, the companies became victims of the BEC scheme, each losing approximately $100,000. The investigation traced the creation of some of the pdfs to Amuegbunam.
The FBI’s Internet Crime Complaint Center (IC3) has been tracking this scheme and to date, perpetrators of the scheme have victimized more than 7000 businesses based in the U.S. and more than 1000 foreign-based businesses. The total loss to the U.S. victims is approximately $747 million.
Additional information about the BEC scheme may be found in a Fraud Alert issued by the Financial Services Information Sharing and Analysis Center (FS-ISAC), the FBI, and the U.S. Secret Service. The FBI urges any business who believes it was victimized by the BEC scheme to contact them at 972-559-5000.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy to commit wire fraud offense carries a maximum statutory penalty of 30 years in federal prison and a $1 million fine. Restitution may be ordered.
The FBI is conducting the ongoing investigation and Assistant U.S. Attorney C.S. Heath is in charge of the prosecution.
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El Salvador National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that RAMON ANTONIO SORIANO-CANIZALEZ, age 28, a citizen of El Salvador, was sentenced today after previously pleading guilty to a one-count Indictment charging him with illegal reentry into the United States after having been previously deported.
U.S. District Judge Ivan L.R. Lemelle sentenced SORIANO-CANIZALEZ to time served. SORIANO-CANIZALEZ will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to the court documents, SORIANO-CANIZALEZ was encountered by Border Patrol agents in the Eastern District of Louisiana on April 29, 2015, after records showed he had been previously deported from the United States to El Salvador on July 26, 2010.
U.S. Polite praised the work of the Department of Homeland Security, U.S. Border Patrol for investigating this matter. Assistant U.S. Attorney Emily K. Greenfield was in charge of the prosecution.
El Departmento de Justicia y la Oficina para la Protección Financiera del Consumidor Realizan un Acuerdo Conciliatorio con Hudson City Savings Bank en Resolución de Alegatos de Discriminación en el Otorgamiento de HipotecasRead the Press Release
WASHINGTON – El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor [Consumer Financial Protection Bureau (CFPB)] radicaron una orden de consentimiento hoy para resolver alegatos de que Hudson City Savings Bank (Hudson City) exhibió un patrón o una práctica de excluir delimitando (“redlining” en inglés) vecindarios predominantemente negros e hispanos en sus prácticas de otorgamiento de préstamos hipotecarios residenciales. Excluir delimitando es la práctica discriminatoria ejercida por bancos u otras instituciones financieras de negar o evitar brindar servicios de crédito a un consumidor debido a la situación demográfica racial del vecindario en el que vive el consumidor. Esta resolución representa el acuerdo conciliatorio más grande asociado con exclusión delimitada hipotecaria residencial realizado por el Departamento de Justicia.
El acuerdo conciliatorio, el que está sujeto a la aprobación del tribunal, fue radicado en conjunto con la demanda de las agencias en el Tribunal Federal de Distrito para el Distrito de Nueva Jersey. La demanda alega que Hudson City violó la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)], que prohíben a las instituciones financieras discriminar debido a raza, color u origen nacional en sus prácticas de otorgamiento de préstamos hipotecarios. Específicamente, la demanda alega que desde al menos 2009 hasta 2013, Hudson City dejó de atender las necesidades de crédito de vecindarios con mayoría negra e hispana en las principales áreas de su mercado, incluidas Nueva Jersey, la ciudad de Nueva York y los condados que las rodean, y las áreas metropolitanas de Filadelfia y Bridgeport, Connecticut. Hudson City ha aceptado resolver este caso sin litigio controvertido.
“Este caso debe transmitir un mensaje a prestamistas de todo el país de que el Departamento de Justicia no tolerará la discriminación racial en el otorgamiento de crédito”, indicó la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta, líder de la División de Derechos Civiles. “Una institución de préstamos debe tratar a todos los potenciales prestatarios de manera igualitaria, independientemente de su raza o la composición racial de su vecindario, al decidir ofrecer sus servicios de préstamo. Instamos a todos los prestamistas a que identifiquen proactivamente oportunidades de otorgamiento de préstamos responsables que existan en vecindarios predominantemente minoritarios en sus áreas de actuación”.
“Hudson City Savings Bank estructuró sus operaciones comerciales de modo a sistemáticamente evitar brindar servicios de crédito en vecindarios predominantemente minoritarios”, señaló el Fiscal Federal Paul J. Fishman del Distrito de Nueva Jersey. “No hay lugar para ese tipo de comportamiento en nuestro sistema bancario. Además de pagar 25 millones de dólares por un programa de subsidios crediticios, el acuerdo de hoy exigirá que el banco tome una serie de pasos concretos para garantizar que se mejore el acceso a crédito responsable y asequible a prestatarios calificados en vecindarios negros e hispanos”.
“Alegamos que las prácticas de exclusión delimitada discriminatorias de Hudson City recortaron ilegalmente las oportunidades de consumidores de vecindarios predominantemente negros e hispanos de obtener un préstamo hipotecario y cumplir su sueño de la casa propia”, dijo el Director de la CFPB Richard Cordray. “Sin acceso a crédito de precio razonable, los vecindarios se deterioran bajo la sombra lanzada por el otorgamiento injusto de préstamos. La acción de hoy busca eliminar este tipo de discriminación al proveerles a estas comunidades que tendrían que haber tenido acceso a hipotecas desde un principio, 27 millones de dólares en subsidios hipotecarios y programas de extensión, junto con nuevas sucursales bancarias”.
La demanda se originó a partir de una investigación conjunta con la CFPB iniciada en marzo de 2015.
Bajo los términos del acuerdo conciliatorio propuesto, Hudson City invertirá 25 millones de dólares en un fondo de subsidios para hipotecas para incrementar la cantidad de crédito que el banco otorga a vecindarios con mayoría negra e hispana en todas las áreas de su mercado. A fin de que los préstamos hipotecarios residenciales estén disponibles a residentes de vecindarios minoritarios que no fueron atendidos adecuadamente por Hudson City, el banco investigará, además, 2,25 millones de dólares en publicidad, extensión, educación financiera e iniciativas e asociación comunitaria, y abrirá dos sucursales de servicios integrales en estos vecindarios. El acuerdo exigirá que Hudson City desarrolle fuertes controles internos adicionales para garantizar el cumplimiento de sus obligaciones de otorgamiento justo de préstamos, brinde capacitación sobre el otorgamiento justo de préstamos a sus empleados, altos ejecutivos y a la Junta de Directores, y cree un plan integral de largo plazo para incrementar el otorgamiento de préstamos en las áreas anteriormente excluídas por delimitación. Asimismo, Hudson City pagará una multa civil de 5,5 millones de dólares.
La coacción asociada a las leyes de otorgamiento justo de préstamos y la Ley de Reparación Judicial Civil para los Miembros de las Fuerzas Armadas [Servicemembers Civil Relief Act] por parte del Departamento de Justicia es realizada por la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles. Desde 2010, la División de Derechos Civiles ha proporcionado alrededor de 1,3 mil millones de dólares en reparación monetaria a prestatarios individuales y comunidades afectadas, al hacer valer la Ley de Vivienda Justa, la ECOA y la SCRA. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso sobre la coacción asociada a la ECOA destacan los logros del departamento en el tema del otorgamiento justo de préstamos y están disponibles en www.justice.gov/crt/publications/.
La División de Derechos Civiles, la Fiscalía Federal para el Distrito de Nueva Jersey y la Oficina para la Protección Financiera del Consumidor son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama fundó la Fuerza de Tarea de Coacción contra el Fraude Financiero para generar una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de agencias federales, autoridades regulatorias, inspectores generales y fuerzas del orden público estatales y locales quienes, trabajando juntos, ponen en uso un conjunto poderoso de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar las iniciativas en todo el poder ejecutivo federal y, junto con asociados estatales y locales, investigar y enjuiciar delitos financieros importantes, garantizar un castigo justo y eficaz para quienes cometen delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar ganancias para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.
Para obtener una copia de la demanda, así como información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en http://www.justice.gov/fairhousing.
East St. Louis Tax Preparer Indicted for Preparation of False Tax ReturnsRead the Press Release
Evelyn Johnson, d/b/a E.J. Johnson Tax Service, 53, from East St. Louis, Illinois, was charged by Indictment with twenty-nine counts of Aiding and Assisting in the Preparation of False Federal Tax Returns, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. Johnson faces a total maximum sentence of eighty-seven years in prison, a $250,000 fine and up to one year supervised release, plus mandatory restitution. The indictment alleges that Johnson operates the E.J. Johnson Tax Service in East St. Louis. The indictment further alleges that the I.R.S. sent in an undercover agent to have her taxes prepared after the I.R.S. Scheme Development Center detected a potential pattern of fraudulent returns. The indictment alleges that Johnson prepared a false return for the undercover agent that falsified itemized deductions. The indictment also charges Johnson with preparing twenty-eight other false federal tax returns.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The indictment is the result of an investigation conducted by the Internal Revenue Service/Criminal Investigations. The prosecution of the case is being handled by Assistant U.S. Attorney Norman R. Smith.
Detroit heroin dealer pleads guilty in Federal courtRead the Press Release
CHARLESTON, W.Va. – A Detroit man who had heroin, oxycodone, and cash pleaded guilty today to a federal drug charge, announced U.S. Attorney, Booth Goodwin. Kendrick Leon Ward, 24 pleaded guilty in federal court in Charleston to distribution of heroin within 1,000 feet of a college or university.
On November 8 and 11, 2013, drug task force officers used an informant to purchase approximately five grams of heroin from Ward in exchange for $1,125. Both drug deals occurred near Ward’s residence at Dawson Hall on the campus of West Virginia State University. On November 12, 2013, police executed a search warrant on Ward’s dorm room and seized 20 grams of heroin, 100 30mg oxycodone pills, 100 30mg tramadol pills, and $21,265.00 which included the money used in the undercover drug busy the day before. W
Ward faces up to 40 years in federal prison and a $2 million fine when sentenced on December 29, 2015.
This case was investigated by the Metropolitan Drug Enforcement Network Team (MDENT). Assistant United States Attorney, Joshua Hanks is in charge of the prosecution.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
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Dauphin County Man with Prior Conviction Indicted Federally for Unlawful Possession of FirearmRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Dauphin County man was indicted late yesterday by a federal grand jury in Harrisburg for possession of a pistol by a person prohibited by law from having a firearm.
According to United States Attorney Peter Smith, the grand jury alleges that Lawrence Bethea, age 31, was found to be in possession of a concealed .380 caliber pistol after being approached by police in Harrisburg. Bethea was found asleep inside his vehicle, which was parked in the middle of the 1600 block of Berryhill Street. When police located the firearm, Bethea ran and struggled with police after being apprehended. Bethea, as a person with a previous conviction for an offense punishable by a prison term in excess of one year, is prohibited by law from possessing a firearm.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Harrisburg Bureau of Police and the Pennsylvania State Police. The case is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 10 years’ imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Dallas Man Indicted for Aiming a Laser Pointer at an AircraftRead the Press Release
DALLAS —A federal grand jury has indicted Orlando Jose Chapa, 37, of Dallas on one count of aiming a laser pointer at an aircraft, announced U.S. Attorney John Parker of the Northern District of Texas.
Special agents with the FBI arrested Chapa yesterday. He made his initial appearance in federal court this afternoon before U.S. Magistrate Judge Paul D. Stickney, who released him on bond.
According to the indictment, on or about May 30, 2015, in the Dallas Division of the Northern District of Texas, Chapa knowingly aimed the beam of a laser pointer at a Texas Department of Public Safety (DPS) helicopter and at the flight path of that aircraft.
A federal indictment is an accusation by a grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the maximum statutory penalty for this offense is five years in federal prison and a $250,000 fine.
The FBI, Texas DPS and the Dallas Police Department are investigating. Special Assistant U.S. Attorney Lara Burns is prosecuting.
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Dallas Attorney and Four Family Members Indicted in $22 Million Fraud ConspiracyRead the Press Release
DALLAS — A federal grand jury in Dallas returned an indictment late yesterday charging Dallas attorney Tshombe Anderson and four family members with one count of conspiracy to commit mail fraud stemming from a scheme they ran from July 2011 to September 2015 to fraudulently obtain more than $22 million from the Department of Labor (DOL) Office of Worker’s Compensation Program (OWCP), announced U.S. Attorney John Parker of the Northern District of Texas.
Tshombe Anderson, 52, and his sister Lydia Bankhead, 61, have been in custody since their arrest in late August 2015, on a related federal criminal complaint.
In addition to Tshombe Anderson, this indictment charges his wife Brenda Anderson, 45, his sister-in-law Janet Anderson, 41, and his niece Lydia Taylor, 28, with one count of conspiracy to commit mail fraud. It is expected that all five defendants will make their initial appearance in federal court in Dallas in the coming weeks.
Tshombe Anderson worked as an attorney with a law office located in Dallas. He formed a Durable Medical Equipment (DME) company in 2010 called Best First Administration DME of Austin, LLC (BFA), which listed him as one of the company’s managers. Then, in 2013, he formed two more DME companies, Union Medical Supplies & Equipment, LLC (UMSE) and Sky Care Medical Supplies & Equipment, LLC (SMSE).
Brenda Anderson managed BFA, and in 2010, she enrolled BFA as a provider with OWCP through Affiliated Computer Services. In February 2010, Brenda Anderson, through BFA, acted as the in-house DME provider for Union Treatment Center (Union). Both Tshombe and Brenda Anderson were fired from Union in May 2011.
Bankhead was a UMSE manager and enrolled the company as a provider with OWCP through Affiliated Computer Services.
Janet Anderson was a manager of SMSE and enrolled the company as a provider with OWCP through Affiliated Computer Services.
Lydia Taylor, at Tshombe Anderson’s suggestion, sought out and obtained a position as a volunteer intern in OWCP’s Dallas office. After obtaining this position and gaining access to OWCP’s system, Taylor would look up claim numbers and provide information to her co-conspirators.
The indictment alleges that the purpose of the conspiracy was for the five defendants, through BFA, UMSE, and SMSE, to unlawfully enrich themselves by submitting, and causing the submission of, payment of fraudulent claims to OWCP that (a) falsely represented that the DME was requested; (b) falsely represented that the DME was necessary; and (c) falsely represented that the DME had to be provided. They obtained more than $22 million through this scheme.
From July 2011 through September 21, 2015, more than 250 patient claim numbers have been used by at least one of the companies formed and managed by the defendants to bill OWCP. During this time, BFA, UMSE, and SMSE collectively billed OWCP more than 50,000 times and were paid more than $22 million because of the defendants falsely representing that the DME billed for was requested, necessary and provided.
A federal indictment is an accusation by a grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the maximum statutory penalty for conspiracy to commit mail fraud is 20 years in federal prison and a $250,000 fine.
The indictment also includes a forfeiture allegation that, upon conviction, would require the defendants to forfeit a money judgment in the amount of $32 million, representing the approximate amount of proceeds derived from the scheme to defraud, for which the defendants are jointly and severally responsible. In addition, the following property that was seized by federal agents on August 26, 2015, will be forfeited: $375,000 in cash seized from Tshombe and Brenda Anderson’s residence; $295,860 in cash seized from Lydia Bankhead’s residence; three vehicles including a 2014 Jeep, a 2014 Lexus, and a 2015 Mercedes; and a total of $8,383,075.00 seized from 25 bank accounts.
The DOL Office of Inspector General and the U.S. Postal Service Office of Inspector General are investigating. Assistant U.S. Attorney Aaron Wiley, Special Assistant U.S. Attorney Danial Gividen and Assistant U.S. Attorney Lea Carlisle are in charge of the prosecution.
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Colorado Man Sentenced to 10 Years in Prison for Transporting A Minor for the Purpose of Engaging in Sexual ActivityRead the Press Release
ASHEVILLE, N.C. – Jacob Thomas Pearce, 23, of Golden, Colorado, was sentenced today by U.S. District Judge Martin Reidinger, to serve 120 months in prison for transporting a minor for the purpose of engaging in sexual activity, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Judge Reidinger also ordered Pearce to serve a lifetime of supervised release and to register as a sex offender.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins Acting U.S. Attorney Rose in making today’s announcement.
According to court documents and today’s sentencing hearing, on or about September 6, 2014, Pearce traveled from Golden, Colorado, to Asheville to meet a 13-year old female victim with whom he had been communicating online and via text messages. Court records show that Pearce picked up the minor from Asheville, and together they travelled through Tennessee, ultimately arriving in Austin, Texas, on September 8, 2014. According to court records, Pearce engaged in sexual acts with the minor over the two-day period they travelled across state lines. Law enforcement located Pearce’s vehicle near Brackettville, Texas, and Pearce was taken into custody. Court records indicate that Pearce admitted to knowing the victim was a minor prior to leaving Colorado. In April 2015, Pearce pleaded guilty to one count of transportation of a minor with intent to engage in sexual activity.
Pearce is currently in federal custody. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The case was investigated by the FBI. Assistant U.S. Attorney Don Gast the case of the Western District of North Carolina prosecuted the case.
Cleveland business owner charged with bribing city officialsRead the Press Release
The owner of a business in Cleveland’s Lee-Harvard neighborhood was indicted for paying bribes to city officials in order to receive payment from a $25,000 city grant despite failing to achieve the equal opportunity employment goals required by the grant agreement, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Ashwani “Eddie” Adya, 49, of Solon, was indicted on one count of conspiracy to commit honest services mail fraud and one count of making a false statement to a law enforcement officer.
Adya operated a retail food and beverage business. Lawrence Payten worked at a nonprofit community organization that promoted commercial development in Cleveland’s Lee-Harvard neighborhood. Lejon C. Woods worked as a contract compliance officer in the City of Cleveland’s Office of Equal Opportunity.
Woods previously pleaded guilty to receiving bribes from three other businesses and a criminal case against Payten is pending.
Between November 2009 and August 2010, Adya paid cash bribes to Payten and Woods. Adya and the City of Cleveland entered into Neighborhood Capital Funds Grant Agreement as part of Adya opening a business in Cleveland’s Lee-Harvard neighborhood, according to the indictment.
The city awards funds for certain construction or rehabilitation projects and the recipients are subject to certain hiring goals. In this project, the Office of Equal Opportunity set a subcontractor participation goal of 15 percent for minority business enterprises, 7 percent for female business enterprises and 8 percent for Cleveland Area Small Businesses, according to the indictment.
Adya, Payten and Woods met at City Hall in November 2009. Adya and Payten told Woods that the businessman was not going to meet the OEO subcontractor guidelines and asked Woods to help them cover up the lack of compliance so the businessman could still receive the $25,000 Neighborhood Capital Funds disbursement, according to the indictment.
About two weeks later, Adya, Payten and Woods met again. Adya paid Woods $1,500, promised Woods an additional $1,500 and promised Payten $2,500 for facilitating the arrangement between Woods and the businessman, according to the indictment.
Woods then falsified the OEO compliance documents relating to the construction project. On August 20 2010, Adya received a NCF grant check for $25,000. Four days later, Adya gave Woods the additional $1,500, according to the indictment.
This case is being prosecuted by Assistant U.S. Attorneys Adam Hollingsworth and Henry F. DeBaggis following an investigation by the Federal Bureau of Investigation.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Chicopee Man Charged with Child PornographyRead the Press Release
BOSTON – A Chicopee man was charged today in U.S. District Court in Springfield with receiving and possessing child pornography.
Victor Stepus, 47, was indicted on three counts of receipt of material involving the sexual exploitation of children and one count of possessing material involving the sexual exploitation of children.
According to court documents, on Aug. 21, 2015, federal agents executed a search warrant at Stepus’s residence. During the search, agents seized a personal computer that contained over 8,000 images and 33 videos of child pornography. These included image files that depicted the sexual abuse, including bondage, of girls as young as eight years old. During an interview with federal agents, Stepus admitted that, for the past several years, he used his home computer to access and download child pornography two to three times per week.
On each count of receipt of child pornography, the statute provides a minimum mandatory sentence of five years and no greater than 20 years in prison, a minimum of five years and up to a lifetime of supervised release, a fine of $250,000, forfeiture and restitution. The charge of possession of child pornography provides a sentence of no greater than 20 years in prison, a minimum of five years and up to a lifetime of supervised release, a fine of $250,000, forfeiture and restitution. 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 and Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
Members of the public who have questions, concerns, or information regarding this case should call (617) 748-3274.
The case is brought as part of Project Safe Childhood. 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/.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Catahoula parish man pleads guilty to explosives, firearms chargesRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced today that a Catahoula Parish man pleaded guilty to possessing unregistered explosives and illegally possessing firearms.
Bill W. Womack, 56, of Manifest, La., pleaded guilty before U.S. District Judge Dee D. Drell to one count of possessing unregistered explosive devices and one count of possessing a firearm in furtherance of drug trafficking. According to information presented at the guilty plea, agents seized machine guns, destructive devices, silencers, a short barreled rifle and more than a kilogram of marijuana. The weapons were not registered as required by law. In addition, law enforcement destroyed improvised explosive devices at the scene over a five-day period.
Womack faces up to 10 years in prison for the explosive device charge and a mandatory five years in prison for the firearm/drug trafficking charge. He also faces three years of supervised release, a $250,000 fine and forfeiture of the weapons seized. A sentencing date of December 18, 2015 was set.
The ATF, FBI, Louisiana State Police and Catahoula Parish Sheriff’s Office investigated the case. Assistant U.S. Attorneys Seth D. Reeg and William J. Flanagan are prosecuting the case.
Buffalo Man Sentenced on Fraud ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr., announced today that James Phillips, 31, of Buffalo, NY, who was convicted of conspiracy to defraud the United States, was sentenced to 30 months probation by Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that on January 27, 2011, the defendant, along with co-defendants Mica Donadelle and Kevin Liburd, conspired to avoid the detection of $162,300 in drug proceeds at the Buffalo Niagara International Airport. Phillips was employed as a baggage handler at the airport at the time and was able to bypass Transportation Security Administration (TSA) screening procedures. The defendant avoided screening and stored the money in an airport bathroom which was later picked up by Liburd.
In addition, between 2006 and December 2012, Donadelle conspired with Liburd and Renwick Samuel and Angel Gonzalez, to distribute cocaine in the City of Buffalo.Donadelle, Samuel and Gonzalez have been convicted and are awaiting sentencing. Liburd was sentenced to eight months in prison.
“Airports utilize strict security and screening procedures for a number of important reasons, chief among them, the safety of the traveling public,” said U.S. Attorney Hochul. “While the defendant’s actions in this case may have only been intended to aid a drug dealer, the potential threat posed by this defendant’s actions could have been far worse.”
Today’s sentencing is the culmination of an investigation on the part of the Safe Streets Task Force of the Federal Bureau of Investigation.
Buffalo Man Sentenced for Wire FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that John Northrup, 37, of Buffalo, NY, who was convicted of wire fraud, was sentenced to 18 months in prison by U.S. Senior District Judge William M. Skretny.
Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that between March 2010 and June 2011, the defendant posted classified advertisements on Craigslist and Backpage.com, offering, among other things, fraudulent employment opportunities in the adult pornography industry.
Specifically, Northrup, referring to himself as the “Porn King,” posted fraudulent advertisements soliciting drivers willing to transport women working in the adult film industry in a fictitious, company-owned Cadillac Escalade. Interested readers were instructed to wire a one-time deposit to the defendant. In total, over 250 people from across the United States and Canada wired over $65,000 to Northrup over 14 months.
The sentencing is the result of an investigation by the United States Secret Service, under the direction of Special Agent in Charge C. Todd Laster.