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10 November 2015
Ohio-Based Tax Return Preparation Business Executive Pleads Guilty to Obstructing the IRSRead the Press Release
WASHINGTON - A Liberty Township, Ohio, resident pleaded guilty to one count of obstructing and impeding the Internal Revenue Code, announced Acting Deputy Assistant Attorney General Bruce M. Salad of the Justice Department’s Tax Division.
According to court documents, Kyle Wade, 44, was the former vice-president of franchising for Instant Tax Service (ITS), a tax preparation business that claimed to have over 1,100 franchise locations throughout the United States in 2009. Wade formerly owned multiple ITS franchises.
From Jan. 1, 2004 through Nov. 1, 2012, Wade and another individual executed a scheme to obstruct the Internal Revenue Service (IRS), wherein numerous ITS franchises filed false federal income tax returns without the permission of their taxpayer clients and without receiving a valid W-2 form from each client. The false returns included false and inflated sole proprietorship Schedule C income in an attempt to increase the Earned Income Tax Credit refund. Wade and another individual also created and presented false documents with the IRS, such as phony W-2 forms that were created by ITS employees using tax preparation software and various other false IRS forms containing forged signatures.
At his sentencing on a date to be determined later, Wade faces a statutory maximum sentence of three years in prison and a fine of $250,000.
The Tax Division commended the efforts of special agents of IRS – Criminal Investigation, who investigated the case and Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division, and Assistant U.S. Attorney Jessica Knight of the Southern District of Ohio, who are prosecuting the case.
Ohio man sentenced for selling bath salts and synthetic drugsRead the Press Release
CLARKSBURG, WEST VIRGINIA – John Skruck, 59, of Youngstown, Ohio, was sentenced today to 41 months in prison for his role in distributing bath salts and synthetic drugs through local retail stores, United States Attorney William J. Ihlenfeld, II, announced today.
Skruck was a manager of the Hot Stuff Cool Things retail shops in Clarksburg and Buckhannon. He participated in a scheme to distribute bath salts and synthetic drugs. He also structured financial transactions to avoid reporting more than $200,000 to the Internal Revenue Service.
Skruck pled guilty in December 2014 to one count of “Drug Conspiracy” and one count of “Structuring Monetary Transactions to Evade the Reporting Requirement.” He was sentenced today to 41 months in prison on each count. The sentences will run concurrent with each other for a total of 41 months in prison. As part of the sentence imposed today, Skruck will also forfeit multiple parcels of real property, U.S. currency and bank accounts, vehicles, heavy equipment, a trailer, and a professional embroidery machine.
Assistant U.S. Attorneys Robert McWilliams and Michael Stein along with Special Assistant U.S. Attorney John Parr and former Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Internal Revenue Service Criminal Investigations, the Three Rivers Drug and Violent Crime Task Force, and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.
O.C. Man Sentenced to Two Years in Federal Prison for Selling Non-Existent In-N-Out Burger Franchises in the Middle EastRead the Press Release
SANTA ANA, California – A Newport Beach man has been sentenced to 24 months in federal prison for running a multi-million dollar fraud scheme that bilked investors with false promises of In-N-Out Burger franchises in the Middle East.
Craig Stevens, 56, was sentenced Monday afternoon by United States District Judge Andrew J. Guilford.
Stevens pleaded guilty in June to one count of wire fraud, admitting that he fraudulently solicited more than $4.27 million from investors who were told that each franchise cost approximately $150,000, plus another $250,000 per year for royalties.
When Stevens pleaded guilty, he admitted sending an email to a victim in Lebanon that discussed a purported licensing agreement.
The scheme, which ran throughout 2014, fraudulently solicited investments when Stevens “claimed to have the exclusive rights to [In-N-Out] franchises in the Middle East,” according to court documents, which explained that the Irvine-based company is a private held corporation that “does not have any business partnerships or franchise agreements with third parties.”
The case against Stevens was investigated by the Federal Bureau of Investigation.
Norwegian Shipping Company and Engineering Officers Convicted of Environmental Crimes and Obstruction of JusticeRead the Press Release
A federal jury in Mobile, Alabama, has convicted Det Stavangerske Dampskibsselskab AS (DSD Shipping) and three employees with obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), witness tampering and conspiracy, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Kenyen R. Brown of the Southern District of Alabama. DSD Shipping is a Norwegian-based shipping company that operates crude oil tankers, including the M/T Stavanger Blossom. Also convicted at trial were three senior engineering officers, Bo Gao, Xiaobing Chen and Xin Zhong, employed by DSD Shipping to work aboard the vessel. A fourth employee, Daniel Paul Dancu, pleaded guilty in October.
The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water. International and U.S. law requires that these vessels use pollution prevention equipment, known as an oily-water separator, to preclude the discharge of these materials. Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.
“We will not tolerate the continued use of the world’s oceans as a dumping ground for contaminated waste,” said Assistant Attorney General Cruden. “These defendants deliberately and egregiously violated the law and fouled the marine environment by dumping waste, then tried to cover it up with false records. We hope this conviction sends a strong message to shippers worldwide that this activity must end, and we will vigorously prosecute those who continue this criminal behavior.”
“I am pleased with the record of this office in pursuing environmental crimes,” said U.S. Attorney Brown. “We will continue to prosecute corporations and individuals to protect our resources here along the Gulf Coast as well as around the World. We need to ensure that all foreign vessels and corporations comply with U.S. Coast Guard Examinations to ensure these resources are protected.”
“The oceans cannot be used as dumping grounds,” said Acting Special Agent in Charge Andy Castro of the Environmental Protection Agency’s (EPA) criminal enforcement program in Alabama. “The defendants in this case falsified entries in their vessel’s log books to hide the true nature of its open water discharges. Today’s guilty verdict by a jury should serve as a warning to would-be violators that the American people will not allow the flagrant violation of U.S. laws.”
“This case shows the importance of interagency cooperation and how working together can keep our nation's waterways cleaner and safer for all,” said U.S. Coast Guard Admiral David R. Callahan. “I commend the U.S. Attorney's Office, the Department of Justice, as well as Customs and Border Protection for their diligence in this case. This case is a prime example of the Act to Prevent Pollution from Ships working as it was intended. The Coast Guard is committed to working with our partners to enforce regulations and hold any violators accountable.”
“CGIS is dedicated to holding those individuals and Corporations accountable who violate United States and International law,” said Resident Agent in Charge John Allen with the U.S. Coast Guard Investigative Service (CGIS). “CGIS will vigorously prosecute anyone who presents false documents to the U.S. Coast Guard or obstructs vessel examinations performed by the U.S. Coast Guard.”
The evidence presented during the two-week trial demonstrated that in January 2010, DSD Shipping knew that the oily-water separator aboard the M/T Stavanger Blossom was inoperable. In an internal corporate memo, DSD Shipping noted that the device could not properly filter oil-contaminated waste water and stated that individuals “could get caught for polluting” if the problem was not addressed. Rather than repair or replace the oily-water separator, however, DSD Shipping used various methods to bypass the device and force the discharge of oily-wastes into the ocean. During the last months of the vessel’s operation prior to its arrival in the Port of Mobile, the M/T Stavanger Blossom discharged approximately 20,000 gallons of oil-contaminated waste water.
The evidence at trial also established that DSD Shipping employees intentionally discharged fuel oil sludge directly into the ocean. Specifically, crewmembers cleaned the vessel’s fuel oil sludge tank, removed approximately 264 gallons of sludge and placed the waste oil into plastic garbage bags. After hiding the sludge bags aboard the ship from port authorities in Mexico, defendants Chen and Zhong ordered crewmembers to move as many as 100 sludge bags to the deck of the vessel. There, Zhong threw the sludge bags overboard directly into the ocean.
DSD Shipping, Dancu, Gao, Chen and Zhong, all attempted to hide these discharges from the U.S. Coast Guard by making false and fictitious entries in the vessel’s oil record book and garbage record book. Further, after arriving in Mobile, Chen and Zhong lied to the U.S. Coast Guard about the discharge of sludge and ordered lower ranking crewmembers to do the same.
At the conclusion of trial, DSD Shipping was convicted of one count of conspiracy, three counts of violating APPS, three counts of obstruction of justice and one count of witness tampering. Defendant Gao was convicted of one count of conspiracy and two counts of obstruction of justice. Defendant Chen was convicted of one count of violating APPS, three counts of obstruction of justice and one count of witness tampering. Finally, Zhong was convicted of two counts of violating APPS, two counts of obstruction of justice and one count of witness tampering. DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties. Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges
This case was investigated by the U.S. Coast Guard Sector Mobile, U.S. Coast Guard District Eight, CGIS and the EPA, Criminal Investigations Division. Assistant U.S. Attorney Michael D. Anderson, with the U.S. Attorney’s Office for the Southern District of Alabama, and the Department of Justice’s Environmental Crimes Section Trial Attorney Shane N. Waller prosecuted the case.
New Mexico Man Sentenced for Scheme to Send Stolen Social Security Benefits to NigeriaRead the Press Release
BOSTON – A New Mexico man was sentenced today in U.S. District Court in Boston in connection with a scheme in which Social Security benefits were obtained using stolen identities and then wired to Nigeria.
Jasper Denetclaw, 44, was sentenced by U.S. District Court Judge Rya W. Zobel to four months in prison, two years of supervised release, and was ordered to pay $104,625 in restitution to the Social Security Administration. In August 2015, Denetclaw pleaded guilty to theft of public money.
In early 2014, Denetclaw met a woman on Facebook who offered him the opportunity to earn some money. The woman put him in touch with “Simon,” who was allegedly located in Nigeria. Following instructions from “Simon,” Denetclaw opened two bank accounts and provided “Simon” with the information for those accounts, and for a third account he had previously opened. After funds had been placed in the accounts, Denetclaw then withdrew or wired a portion of the $205,879 that had been deposited, as instructed by “Simon.”
The money in the accounts was from direct deposits of Social Security benefits, obtained illegally by filing applications for retirement benefits in the names of ten real people, including some Massachusetts residents. Each victim had reached full retirement age, and, therefore, the fraudulent applications resulted in lump-sum benefits payments of approximately $20,000 each. The government recovered about $100,000 when the fraud was detected; however, Denetclaw had succeeded in withdrawing the rest of the money, wiring over $67,000 to individuals in Nigeria, and keeping some of the money for himself. Denetclaw stated that, in the beginning, he thought it was a regular business, but, admitted that after he checked the accounts and realized the money was from the Social Security Administration, he knew it was wrong.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Assistance was provided by the Phoenix, Ariz. and El Paso, Texas field offices of the Social Security Administration, Office of Inspector General, Office of Investigations and the Redding, Calif. and Gallup, N.M. field offices of the Federal Bureau of Investigation. The case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
New Jersey Child Therapist Charged with Sexual Exploitation, Enticement, and Child Pornography CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriquez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that ELLIOT HALBERSTAM was arrested today and charged in a criminal complaint with three counts stemming from his sexual exploitation and enticement of a minor and his receipt of child pornography.
Manhattan U.S. Attorney Preet Bharara said: “Elliot Halberstam is charged with violating the trust of his former patient, a 16-year old boy, in the worst way imaginable - he allegedly coerced and tricked the victim into engaging in sexually explicit conduct, and captured it on video and in photographs. Together with our partners at the FBI, we are dedicated to ensuring that those who sexually exploit children are held to account.”
FBI Assistant Director-in-Charge Diego Rodriquez said: “As alleged, Halberstam violated the trust of a minor who was a former patient of his in counseling, by coercing the victim to engage in sexual activity with him and film it. The FBI will continue to investigate and bring to justice those who sexually exploit our children.”
According to the Complaint[1]:
Beginning in March 2015, HALBERSTAM, a child therapist, coerced and enticed a 16-year-old boy who was a former patient of his (“Victim-1”) to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct, and received images and videos constituting child pornography from Victim-1. To do so, HALBERSTAM groomed Victim-1 through numerous email and text messages, including by posing as another individual to entice Victim-1 to produce and send child pornography to HALBERSTAM and to allow HALBERSTAM to photograph Victim-1.
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HALBERSTAM, 38, of Bergenfield, New Jersey, is charged with one count of coercing and enticing a minor to engage in illegal sexual activity, which carries a maximum penalty of life in prison; one count of sexual exploitation of a child, which carries a maximum sentence of 30 years in prison; and one count of receipt of child pornography, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
There may be more victims of this alleged conduct. Any individuals who believe they have information concerning ELLIOT HALBERSTAM that may be relevant to the investigation should contact the Federal Bureau of Investigation at 1-212-384-1000 or https://tips.fbi.gov/.
Mr. Bharara praised the efforts of the FBI in this investigation. He added that the investigation is continuing.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Andrew D. Beaty is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Navajo Man Pleads Guilty to Failing to Update His Sex Offender RegistrationRead the Press Release
ALBUQUERQUE – Darrick Negale, 30, an enrolled member of the Navajo Nation who resides in Albuquerque, N.M., pleaded guilty today in federal court to violating the Sex Offender Registration and Notification Act (SORNA). The guilty plea was announced by U.S. Attorney Damon P. Martinez and U.S. Marshal Conrad E. Candelaria.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations.
Negale was charged in a criminal complaint on Oct. 26, 2012, with violating SORNA by failing to update his sex offender registration. On Sept. 10, 2013, Negale was indicted on that same charge. According to the indictment, Negale failed to update his registration between Sept. 25, 2012 and Oct. 10, 2012, in Bernalillo County, N.M.
Negale was convicted of sexual abuse of a minor in Indian Country in June 2007. On May 6, 2010, Negale registered as a sex offender in Bernalillo County and agreed to notify the sheriff of the county to which he moved if he relocated outside of the county. Negale last registered as a sex offender on Oct. 3, 2011, in Bernalillo County and subsequently failed to notify the U.S. Probation Office of his whereabouts when he left a residential reentry program in Albuquerque without permission on Sept. 27, 2012.
During today’s hearing, Negale pled guilty to the indictment without the benefit of a plea agreement. At sentencing, Negale faces a statutory maximum penalty of ten years in federal prison followed by a minimum of five years of supervised release. Negale will also be required to register as a sex offender following his term of incarceration. Negale remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the U.S. Marshals Service and is being prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez.
Montgomery County Man Sentenced to 10 Years for Possessing Child PornographyRead the Press Release
PHILADELPHIA - Terence Wyatt, 58, of King of Prussia, PA, was sentenced yesterday to 10 years in prison for possession of child pornography. Wyatt pleaded guilty on April 22, 2015, to possessing in excess of 600 images and videos from the Internet that depicted children being sexually abused by adults as well as videos that depicted sadistic and masochistic images of prepubescent children.
This investigation began as part of an ongoing undercover Internet investigation of child exploitation violations relating to the use of peer to peer (“P2P”) file sharing networks being conducted by the Abington Township Police Department. The purpose of the investigation was to identify those individuals possessing and sharing child pornography using P2P networks. An Abington Police Department detective located a computer on a P2P Network sharing files of interest in child pornographic investigations. The user of this file-sharing program was Wyatt. The detective was able to download images and movies from Wyatt’s files that depicted children under the age of 18 years old engaged in sexually explicit conduct including sexual abuse by adults. Following execution of a search warrant, detectives arrested Wyatt on May 16, 2013.
The images were then reviewed by a special agent with Homeland Security Investigations (HSI) who verified that over 2005 images contained child pornography, approximately 95% of which were of prepubescent child pornography. When HSI agents reviewed Wyatt’s electronic media they determined that it contained over 150,000 images, the majority of which were child erotica and child pornography.
In addition to the 10 year prison term, U.S. District Court Judge Gene E.K. Pratter ordered 10 years of supervised release, $1,000 restitution, and a $100 special assessment.
The case was investigated by the Detective Division of the Abington Township Police Department, the Montgomery County District Attorney’s Office, and Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Jeffery W. Whitt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division=s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mississippi Man Pleads Guilty to Assaulting a Choctaw Tribal Police OfficerRead the Press Release
Jackson, Miss. – Jason Gooden, 29, of Philadelphia, MS, pled guilty on November 9, 2015, before U.S. District Judge Daniel P. Jordan III, to one count of Assaulting a Choctaw Tribal Police Officer, U.S. Attorney Gregory K. Davis announced today.
On April 4, 2015, the defendant, a non-Tribal member, was asked to leave the Silver Star Casino because he appeared to be intoxicated. The defendant did not comply with the security guard’s request and the Choctaw Police Department was called for assistance. When approached by the police officers, the defendant grabbed one of the officers and threw him to the ground. The defendant was arrested and charged with assaulting a law enforcement officer. This case was prosecuted in federal court because Tribal police officers are considered to be federal law enforcement officers.
Gooden will be sentenced on January 28, 2016, by U.S. District Judge Daniel P. Jordan III. He faces a maximum sentence of eight years in prison and a $250,000.00 fine.
Milton Man Pleads Guilty to Stealing from Social SecurityRead the Press Release
BOSTON – A Milton man pleaded guilty today in U.S. District Court in Boston to stealing more than $70,000 in Social Security benefits.
Brian Sandiford, 58, pleaded guilty to stealing public money. Sandiford was charged in an Information in August 2015. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for March 3, 2016.
Sandiford’s father died in 2010, but his monthly Social Security benefits continued to be directly deposited into a bank account held jointly by Sandiford and his father. Although he was not entitled to this money, Sandiford routinely transferred the Social Security money into his own bank account and then spent it. In total, from 2010 to 2014, Sandiford took $70,811 in Social Security funds to which he was not entitled.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office, in partnership with the Social Security Administration, to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money:
In June 2015, Patricia Kwiatkowski, of Upton, was sentenced for stealing $128,101 from Social Security from 2006 to 2014.
In April 2015, Graeme Griffith, of Andover, was sentenced for stealing $149,285 from Social Security from 2003 to 2014.
Also in April 2015, Frances Kenney Moseley, of Boston, was sentenced for stealing $222,172 from Social Security from 2003 to 2010.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of Social Security Administration Office, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The Sandiford case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Methamphetamine Supplier Sentenced to Maximum Statutory Penalty of 20 Years in Federal PrisonRead the Press Release
FORT WORTH, Texas — Corey Duane Bowles, 43, of Fort Worth, Texas, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 240 months (20 years) in federal prison, the statutory maximum penalty, for possessing methamphetamine with the intent to distribute, announced U.S. Attorney John Parker of the Northern District of Texas.
Bowles pleaded guilty in July 2015 to an indictment charging the offense.
According to documents filed in the case, Bowles admitted that on March 6, 2015, he knowingly and intentionally possessed, with the intent to distribute, methamphetamine when he sold methamphetamine in an undercover operation in Fort Worth.
The Drug Enforcement Administration, the Weatherford/Parker County Special Crimes Unit, and the Weatherford Police Department investigated the case. Assistant U.S. Attorney Chris Wolfe was in charge of the prosecution.
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Mercer County, New Jersey, Man Charged with Production and Receipt of Child PornographyRead the Press Release
NEWARK, N.J. – A Mercer County, New Jersey, man was arrested today and charged with coercing a minor to engage in sexually explicit conduct and with receiving images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Curtis E. Thompson, 30, of Lawrenceville, New Jersey, is charged by complaint with one count of the production of child pornography and one count of receiving child pornography. He is scheduled to appear later today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
According to the complaint:
In April 2015, Thompson used a Facebook account in the name of Frank Lucas to become “friends” with the victim, a minor. On June 11, 2015, the victim told Thompson that the victim was under the age of 18. Thompson used the Facebook account to solicit and persuade the victim to record videos of the victim and others engaging in sexually explicit conduct, and to send those videos to Thompson. Thompson also coerced the victim to engage in sexually explicit conduct and allow Thompson to watch in real time through a video streaming service. Thompson requested additional videos of the victim and others engaged in sexually explicit conduct in exchange for payments from Thompson wired via MoneyGram to the victim and others. Thompson sent the payments on various dates in June 2015.
The charge of production of child pornography carries a maximum potential penalty of 30 years in prison, a mandatory minimum penalty of 15 years in prison and a $250,000 fine. The charge of receiving child pornography carries a mandatory minimum penalty of five years and a maximum of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the U.S. Attorney’s Office General Crimes Unit in Newark.
Anyone with information which may be relevant to this investigation is encouraged to contact the FBI online at: [email protected]
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty
Member of Colombian Terrorist Organization Sentenced to 27 Years in Prison for Hostage-Taking of Three U.S. CitizensRead the Press Release
WASHINGTON – Diego Alfonso Navarrete Beltran, 43, a member of the Fuerzas Armadas Revolucionarias Colombianas (FARC) terrorist organization, was sentenced today in the U.S. District Court for the District of Columbia to 27 years in prison on hostage-taking charges stemming from the 2003 kidnappings of three U.S. citizens in Colombia.
The sentencing was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Channing D. Phillips of the District of Columbia, and Special Agent in Charge George L. Piro of the FBI’s Miami Division.
Navarrete Beltran was extradited from Colombia to the United States in November 2014 to face charges in a superseding indictment that was returned in February 2011. He pleaded guilty on Aug. 26, 2015, to three counts of hostage-taking. He was sentenced by Senior U.S. District Judge Royce C. Lamberth of the District of Columbia. Navarrete Beltran is among three FARC leaders who have been convicted for their roles in the hostage-taking.
“Diego Alfonso Navarrete Beltran participated in the hostage-taking and captivity of three Americans by the FARC, a Colombian terrorist organization,” said Assistant Attorney General Carlin. “This case underscores our resolve to hold accountable those who target our citizens with violence anywhere in the world, no matter how long it takes.”
“Diego Alfonso Navarrete Beltran and other FARC guerillas ruthlessly subjected their American hostages to constant threats of violence while holding them in one camp after another in the remote jungles of Colombia,” said U.S. Attorney Phillips. “For over 16 months, this defendant was among the armed guards who prevented their escape. Today’s 27-year sentence provides justice for the three victims who were subjected to repeated barbaric abuse by the defendant and others while part of this terrorist organization.”
“Diego Alfonso Navarrete Beltran now faces a long time behind bars for his participation in the hostage-taking of three U.S. Citizens in Colombia,” said Special Agent in Charge Piro. “To all hostage-takers the message is clear: target our citizens with violence anywhere in the world and we will hold you accountable for your actions.”
According to a statement of offense submitted as part of the plea hearing, the FARC is an armed, violent organization in Colombia, formed in 1964 as the armed wing of the Colombian Communist Party. It has evolved into a major armed force financed by drug trafficking, hostage-taking and extortion. International human rights organizations have repeatedly accused the FARC of serious crimes, including kidnapping, murder, use of land mines, threats, the recruitment of minors, forced displacement and hostage-taking. The FARC was designated as a foreign terrorist organization by the U.S. Secretary of State in 1997 and remains so designated.
As described in the statement of offense, Navarrete Beltran was a member of the First Front in the FARC’s Eastern Bloc.
In his plea, he admitted taking part in the hostage-taking of three U.S. citizens, Marc D. Gonsalves, Thomas R. Howes and Keith Stansell. These three individuals, along with Thomas Janis, a U.S. citizen, and Sergeant Luis Alcides Cruz, a Colombian citizen, were seized on Feb. 13, 2003, by the FARC after their single engine aircraft made a crash landing near Florencia, Colombia. Janis and Cruz were murdered at the crash site by members of the FARC.
For the next five and a half years, according to the statement of offense, Gonsalves, Howes, Stansell and many others were held prisoners by the FARC and used to bargain with the Colombian government. Along with about a dozen Colombian hostages, they were forced to march from one site to another to prevent their rescue. They were threatened, chained and forced to participate in proof-of-life videos. In early October 2006, the hostages were delivered to the FARC’s Eastern Bloc’s First Front and were held prisoners by the First Front of the FARC.
From October 2006 through mid-June 2008, according to the statement of offense, Navarrete Beltran and other guerillas kept the hostages under the control of the FARC’s First Front. In particular, Navarrete Beltran often served as an armed guard of the American hostages.
In July 2008, the Colombian military conducted an operation which resulted in the rescue of the hostages. All told, members of the FARC held the Americans hostage for 1,967 days.
This investigation is being led by the FBI’s Miami Field Division. The prosecution is being handled by Assistant U.S. Attorneys Kenneth Kohl and Fernando Campoamor-Sanchez of the District of Columbia, and Trial Attorney David Cora of the National Security Division’s Counterterrorism Section.
Substantial assistance in the case was provided by the Justice Department’s Office of International Affairs, the department’s Judicial Attachés in Colombia, the FBI’s Office of the Legal Attaché in Colombia and the FBI’s Washington, D.C., Field Office.
Member of Colombian Terrorist Organization Sentenced to 27 Years in Prison for Hostage-Taking of U.S. CitizensRead the Press Release
Three Hostages Were Held in Colombia for More Than Five Years
Diego Alfonso Navarrete Beltran, 43, a member of the Fuerzas Armadas Revolucionarias Colombianas (FARC) terrorist organization, was sentenced today in the U.S. District Court for the District of Columbia to 27 years in prison on hostage-taking charges stemming from the 2003 kidnappings of three U.S. citizens in Colombia.
The sentencing was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Channing D. Phillips of the District of Columbia and Special Agent in Charge George L. Piro of the FBI’s Miami Division.
Navarrete Beltran was extradited from Colombia to the United States in November 2014 to face charges in a superseding indictment that was returned in February 2011. He pleaded guilty on Aug. 26, 2015, to three counts of hostage-taking. He was sentenced by Senior U.S. District Judge Royce C. Lamberth of the District of Columbia. Navarrete Beltran is among three FARC leaders who have been convicted for their roles in the hostage-taking.
“Diego Alfonso Navarrete Beltran participated in the hostage taking and captivity of three Americans by the FARC, a Colombian terrorist organization,” said Assistant Attorney General Carlin. “This case underscores our resolve to hold accountable those who target our citizens with violence anywhere in the world, no matter how long it takes.”
“Diego Alfonso Navarrete Beltran and other FARC guerillas ruthlessly subjected their American hostages to constant threats of violence while holding them in one camp after another in the remote jungles of Colombia,” said U.S. Attorney Phillips. “For over 16 months, this defendant was among the armed guards who prevented their escape. Today’s 27-year sentence provides justice for the three victims who were subjected to repeated barbaric abuse by the defendant and others while part of this terrorist organization.”
“Diego Alfonso Navarrete Beltran now faces a long time behind bars for his participation in the hostage-taking of three U.S. Citizens in Colombia,” said Special Agent in Charge Piro. “To all hostage-takers the message is clear: target our citizens with violence anywhere in the world and we will hold you accountable for your actions.”
According to a statement of offense submitted as part of the plea hearing, the FARC is an armed, violent organization in Colombia, formed in 1964 as the armed wing of the Colombian Communist Party. It has evolved into a major armed force financed by drug trafficking, hostage-taking and extortion. International human rights organizations have repeatedly accused the FARC of serious crimes, including kidnapping, murder, use of land mines, threats, the recruitment of minors, forced displacement and hostage-taking. The FARC was designated as a foreign terrorist organization by the U.S. Secretary of State in 1997 and remains so designated.
As described in the statement of offense, Navarrete Beltran was a member of the First Front in the FARC’s Eastern Bloc.
In his plea, he admitted taking part in the hostage-taking of three U.S. citizens, Marc D. Gonsalves, Thomas R. Howes and Keith Stansell. These three individuals, along with Thomas Janis, a U.S. citizen, and Sergeant Luis Alcides Cruz, a Colombian citizen, were seized on Feb. 13, 2003, by the FARC after their single engine aircraft made a crash landing near Florencia, Colombia. Janis and Cruz were murdered at the crash site by members of the FARC.
For the next five and a half years, according to the statement of offense, Gonsalves, Howes, Stansell and many others were held prisoners by the FARC and used to bargain with the Colombian government. Along with about a dozen Colombian hostages, they were forced to march from one site to another to prevent their rescue. They were threatened, chained and forced to participate in proof-of-life videos. In early October 2006, the hostages were delivered to the FARC’s Eastern Bloc’s First Front and were held prisoners by the First Front of the FARC.
From October 2006 through mid-June 2008, according to the statement of offense, Navarrete Beltran and other guerillas kept the hostages under the control of the FARC’s First Front. In particular, Navarrete Beltran often served as an armed guard of the American hostages.
In July 2008, the Colombian military conducted an operation which resulted in the rescue of the hostages. All told, members of the FARC held the Americans hostage for 1,967 days.
This investigation is being led by the FBI’s Miami Field Division. The prosecution is being handled by Assistant U.S. Attorneys Kenneth Kohl and Fernando Campoamor-Sanchez of the District of Columbia, and Trial Attorney David Cora of the National Security Division’s Counterterrorism Section.
Substantial assistance in the case was provided by the Justice Department’s Office of International Affairs, the department’s Judicial Attachés in Colombia, the FBI’s Office of the Legal Attaché in Colombia and the FBI’s Washington, D.C., Field Office.
Media AdvisoryRead the Press Release
EVANSVILLE - United States Attorney Josh Minkler will hold a press conference today, at 3:00 pm CST, in the Evansville United States Federal Courthouse, Third Floor, U.S. District Court Law Library.
Minkler will be joined by officials from the United States Secret Service, United States Postal Inspector, Indiana State Police and the Evansville Police Department to discuss the indictment of 36 defendants for a massive fraud scheme involving staged automobile crashes in the tri-state area.
Maryland Man Convicted in Scheme to Obtain More Than $7 Million of Fraudulent Tax RefundsRead the Press Release
Caused 13 False Tax Returns to be Filed in Just Four Months Claiming $7,470,065 in Refunds
A federal jury convicted Charles W. Parker Jr., 49, of College Park, Maryland, today of one count of conspiring to defraud the United States and six counts of filing false income tax returns.
The conviction was announced by Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Washington, D.C. Field Office.
According to evidence presented during the trial, from March to June 2009, Parker recruited clients for co-conspirator Penny Jones, a tax return preparer in Idaho, who prepared tax returns falsely reporting the amount of taxes withheld and purportedly paid to the IRS. Parker collected financial information from clients and provided it to Jones for the preparation of the false tax returns. Parker paid Jones to prepare false tax returns for Parker and others. Parker mailed the false tax returns to the IRS for the years 2005 to 2008, claiming large tax refunds to which the clients were not entitled.
On May 26, 2009, after Parker paid Jones to prepare a false tax return for two co-conspirators who were residents of Atlanta, Georgia, caused the IRS to issue a tax refund to the co-conspirators of $1,723,693. On June 3, 2009, Parker emailed the co-conspirators directing them to wire funds to Parker’s bank account. The next day, the co-conspirators transferred $182,370 into Parker’s account.
The tax returns filed by Parker and his co-conspirators requested fraudulent refunds totaling $7,470,065. As a result of these false returns, the IRS issued fraudulent tax refunds to Parker and his coconspirators totaling $2,007,568. In 2013, Jones was sentenced to 120 months in prison for her role in a scheme to help individuals obtain fraudulent tax refunds from the IRS.
Parker faces a statutory maximum sentence of 10 years in prison for the conspiracy, and a maximum sentence of five years in prison for each of the six counts of filing a false tax return. U.S. District Judge Roger W. Titus has scheduled sentencing for March 28, 2016 at 11:00 a.m.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rosenstein praised the Tax Division and IRS-CI for their work in the investigation. Acting Assistant Attorney General Ciraolo and U.S. Attorney Rosenstein thanked Assistant U.S. Attorney Leah Jo Bressack and Trial Attorney Erin Pulice of the Justice Department’s Tax Division, who are prosecuting the case.
Marionville Man Sentenced to 15 Years for Child ExploitationRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Marionville, Mo., man was sentenced in federal court today for child sexual exploitation.
Darren Eugene Schaefer, 37, of Marionville, was sentenced by U.S. District Judge M. Douglas Harpool to 15 years in federal prison without parole. The court also sentenced Schaefer to a life term of supervised release following incarceration.
On June 17, 2015, Schaefer pleaded guilty to using the Internet and cell phone to attempt to entice a minor to engage in illicit sexual activity.
According to court documents, a task force officer with the Southwest Missouri Cybercrimes Task Force investigated a tip from the National Center for Missing and Exploited Children in May 2014 that Schaefer was contacting underage females on the social networking site MeetMe. Schaefer was asking underage females if they wanted to meet for sexual acts. Schaefer sent messages indicating that he was interested in sexual contact with seven underage females. After contacting the females using the instant message feature on MeetMe, Schaefer would attempt to move the conversations to cell phone text messages.
During the on-line communications between Schaefer and the underage female victims, Schaefer admitted to the victims that he was 35 years old, and stated that he preferred younger females. In one instance, one of the victims asked Schaefer why he posted his age on MeetMe as 14 years old if he was really 35. Schaefer replied that was the only way he could see underage females on this Web site and communicate with them. One victim asked him if he knew he could get in trouble for what he was doing. He replied he knew he could get in trouble but hoped he would not.
A federal search warrant was executed at Schaefer’s residence on June 17, 2014. Schaefer told officers that he talked to hundreds of girls on various social networking Web sites and that he had contacted underage girls several other times using MeetMe. Schaefer also admitted to meeting at least three 16-year-old girls for sexual intercourse over a 10-year period. He reported that he had met all three of them from social networking sites on the Internet. He met two of the girls in Nixa and one at Hood's Truck Stop on 1-44.
Officers seized two laptop computers, two external hard drives and Schaefer’s cell phone, all of which have been forfeited to the government. More than 200 images of child pornography and a total of 474 images of child erotica were located on multiple electronic media devices.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Southwest Missouri Cybercrimes Task Force, Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI) and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Man Pleads Guilty to Possession with Intent to Distribute MarijuanaRead the Press Release
St. Thomas, USVI- Alva Nicholas, 57, pleaded guilty today in District Court on St. Thomas to one count of possession with intent to distribute marijuana, United States Attorney Ronald W. Sharpe announced.
According to court records, on August 21, 2015, Nicholas was arrested by agents of the Department of Homeland Security Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) at the Cyril E. King Airport on St. Thomas after his arrival on an American Airlines flight. U.S. Customs and Border Protection (CBP) inspectors screening bags arriving at the airport detected an anomaly inside a suitcase bearing Nicholas’ name and flight tag.
After further inspection, agents found 3.4 kilograms of marijuana wrapped in plastic inside Nicholas’ suitcase. The bag was repackaged and placed on the conveyor belt. Nicholas was taken into custody after he collected the suitcase from the conveyor belt. Nicholas was previously convicted of heroin smuggling and sentenced to 10 years in prison.Nicholas faces a maximum sentence of five years in prison and a fine of not more than $250,000.00. His sentencing is scheduled for March 10, 2016.
This case is the result of a joint investigation by HSI and CBP. It is being prosecuted by Assistant United States Attorney Delia L. Smith.
Live Oak Police Sergeant Indicted for Possessing Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Kyle Adam Kirby (age 35, Live Oak) with possession of child pornography. He faces up to 20 years in federal prison, and a potential life term of supervised release. Kirby was arrested on October 28, 2015, at the Live Oak Police Department. His trial is scheduled to begin on January 4, 2016; Kirby is being detained pending trial.
According to court documents, FBI agents and other law enforcement officers executed a federal search warrant at Kirby’s residence as the result of an online child pornography investigation. That same morning, the Live Oak police chief authorized the agents to inspect and search the computer located inside Kirby’s patrol car. A forensic examination of the patrol car computer used by Kirby revealed that it contained at least 87 thumbnail images in a “Downloads” folder that either depicted minor children engaged in sexually explicit conduct, including one involving a toddler, or that had titles indicative of child pornography. In addition, the Internet browser history on the computer contained search terms commonly used by individuals who search for child pornography online.
This case was investigated by the Federal Bureau of Investigation, the Columbia County Sheriff’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It 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.
Leader and Supplier for Atlantic City ‘Dirty Block’ Gang Admits Role in Heroin Trafficking Conspiracy and BeingRead the Press Release
TRENTON, N.J. - An Atlantic City, New Jersey, man today admitted engaging in a conspiracy to distribute heroin with members of the “Dirty Block” criminal street gang that allegedly used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City.
Tyrone Ellis, a/k/a “Rome,” 33, pleaded guilty before U.S. District Judge Anne Thompson in Trenton federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin, and one count of possessing a firearm and ammunition while being a previously convicted felon.
According to documents filed in this case and statements made in court:
Ellis acted as a supplier of pre-packaged heroin to Mykal Derry, the leader of the Dirty Block criminal street gang. Ellis also distributed heroin to a smaller group of mid-level heroin distributors who sold the heroin to customers all over the Atlantic City area and in surrounding towns.
Ellis was arrested on March 26, 2013, in Vineland, New Jersey. At the time of his arrest, a loaded Glock .40 caliber handgun belonging to Ellis was recovered from a bedroom in the residence and more than $37,000 in cash was seized from various locations inside the residence and in an attached garage.
Tyrone Ellis’ guilty plea marks the 34th felony conviction of the 34 defendants arrested by the FBI and state and local law enforcement officers working with the FBI in March 2013. Ellis and approximately 15 other defendants are awaiting sentencing; the remaining defendants have all been sentenced to prison terms.
The drug conspiracy carries a minimum penalty of five years in prison, a maximum penalty of 40 years in prison, and a maximum potential fine of $5 million. Sentencing is scheduled for Feb. 2, 2016.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s guilty plea.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; and the Millville Police Department for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz and Special Assistant U.S. Attorney Edmond Mallqui-Burgos.
Defense counsel: Rocco Cipparone Esq., Haddon Heights, New Jersey
Lake City Man Pleads Guilty to Transporting Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Robert Lamar Starling (31, Lake City) has pleaded guilty to transporting child pornography over the Internet. He faces a mandatory minimum penalty of 5 years, up to 20 years, in federal prison and a potential life term of supervision. Starling has been detained since his arrest on May 1, 2014.
According to court documents, beginning in September 2013, FBI agents executed a series of search warrants on several email accounts around the country and determined, among other things, that a particular user in Lake City, Florida had uploaded images of child pornography to the Internet, using an account on a photo sharing site. Further investigation traced the account back to a residence in Lake City, where Starling resided.
On May 1, 2014, FBI agents and other law enforcement officers executed a federal search warrant at the residence. Starling was not at the residence, but was located later that morning driving his golf cart at the Suwannee Music Park & Campground in Live Oak. During an interview at his campsite, Starling stated that he had produced pornographic images of several prepubescent children. Subsequent analyses of Starling’s laptop computer revealed that it contained more than 600 videos depicting child pornography.
This case was investigated by the Federal Bureau of Investigation, the Columbia County Sheriff’s Office, the Suwannee 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.
It 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.
Justice Department Returns Forfeited Assets Derived from Public Corruption Scheme to Korean Minister of JusticeRead the Press Release
LOS ANGELES – The Department of Justice has returned $1,126,951.45 in forfeited assets to the government of the Republic of Korea.
The forfeited assets – which were returned yesterday – were the profits of a public corruption scheme orchestrated by former Korean President Chun Doo Hwan in the 1990s, and were laundered to the United States by Chun’s family members and associates. The assets were forfeited in two recent civil forfeiture actions filed in Los Angeles and Philadelphia as part of the Department of Justice’s Kleptocracy Asset Recovery Initiative.
"The return of these assets is a powerful vindication of the rule of law, and an important victory for the people of the Republic of Korea," said Attorney General Loretta E. Lynch.
"The Department of Justice is committed to ensuring that the proceeds of corruption have no safe haven in this country," said United States Attorney Eileen M. Decker. "We will vigilantly pursue such proceeds and return them to the victims of the corruption."
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Federal Bureau of Investigations investigated the cases leading to the U.S. forfeiture of the assets being returned to Korea and served as the seizing agencies.
In 1997, a criminal court in Korea convicted former President Chun of accepting more than $200 million in bribes from Korean corporations and ordered him to pay approximately $212 million in criminal penalties. In 2013, the Anti-Corruption Division of the Korean Supreme Prosecutor’s Office opened a money laundering investigation regarding the potential laundering of the bribery proceeds into the United States by Chun and his associates through the acquisition of U.S. real estate and opening of U.S. bank accounts.
In February 2014, FBI agents seized $726,951.45 in a California escrow account. Those funds represented the net proceeds from the sale of a Newport Beach house that
President Chun’s son, Chun Jae Yong, had purchased in 2005 with proceeds traced to his father’s corruption scheme. In April 2014, the U.S. Attorney’s Office in Los Angeles filed a civil forfeiture action against the $726,951.45.
In February 2015, a second civil forfeiture action was filed in the Eastern District of Pennsylvania against a secured investment worth approximately $500,000 in a Pennsylvania company, which also was traced to Chun’s corruption scheme.
In March 2015, the government reached a settlement agreement of the two civil forfeiture actions, resulting in the forfeiture of a total of $1,126,951.45, which was returned to the government of the Republic of Korea yesterday.
The case filed in Los Angeles was prosecuted by the United States Attorney’s Office and United States Department of Justice, Criminal Division, Asset Forfeiture and Money Laundering Section.
Justice Department Files Antitrust Lawsuit to Block United's Monopolization of Takeoff and Landing Slots at Newark AirportRead the Press Release
Transaction Would Entrench United’s Dominant Position at Newark, New Jersey, Airport – Eliminating Competition and Resulting in Higher Fares and Fewer Choices for Consumers
The Department of Justice today filed a civil antitrust lawsuit seeking to block a proposed transaction between United Continental Holdings Inc. and Delta Air Lines Inc. in order to preserve competition at Newark Liberty International Airport.
The Antitrust Division’s lawsuit, filed in the U.S. District Court for the District of New Jersey in Newark, New Jersey, alleges that United’s planned acquisition of 24 takeoff and landing slots at Newark would increase United’s already dominant position at the airport, and would strengthen a barrier that diminishes the ability of other airlines to challenge United at the airport. As a result, the 35 million air passengers who fly into and out of Newark every year likely would face higher fares and fewer choices.
“A slot is essentially a license to compete at Newark,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “United already holds most of them, and as a result, competition at Newark is in critically short supply. United is already extracting a ‘Newark premium.’ Airfares at Newark are among the highest in the country while United’s service at Newark ranks among the worst. Allowing United to acquire even more slots at Newark would fortify United’s monopoly position, and weaken rivals’ ability to challenge that dominance, leaving consumers to pay the price.”
To manage congestion at Newark, the Federal Aviation Administration (FAA) allocates takeoff and landing authorizations, or slots, in order to limit the number of flights that can service Newark during the majority of the hours of the day. Slots are a scarce resource, and airlines seeking to initiate or expand service at Newark face significant challenges obtaining them in order to support new service.
According to the department’s complaint, United already controls 73 percent of the slots the FAA has allocated to carriers at the airport – over 10 times more slots than its closest competitor. No other airline has more than 70 slots:
The complaint also alleges that United “grounds” as many as 82 slots each day at Newark, depriving Newark passengers of flight options that would exist if the slots were flown.
The complaint also details how consumers benefit when slots are held by United’s airline rivals. In response to the department’s concerns expressed during its review of the United/Continental merger in 2010, United divested its 36 slots at Newark to Southwest Airlines. United’s then-CEO, Jeff Smisek, lauded the settlement as a “fair solution that would allow Continental and United to create an airline that will provide customers with an unparalleled global network and top-quality products and services, while enhancing domestic competition at Newark.” Nevertheless, as alleged in the complaint, United’s proposed acquisition of slots from Delta is United’s third attempt to reverse the benefits of the 2010 divestiture by buying slots from its competitors at Newark.
According to the department’s complaint, the acquisition of Newark slots by rivals, such as Southwest Airlines, Jet Blue, and Virgin America, has forced United to compete, resulting in lower ticket prices and greater choice for consumers. For example, Southwest’s acquisition of 36 slots from United allowed it to introduce new low-fare competition to United on five routes resulting in substantially lowered fares and increased service on five routes into and out of Newark:
Route
Year-over-year Percentage Decrease in Average Fare
Year-over-year Percentage Increase in Number of Passengers
Newark-St. Louis
-27 percent
66 percent
Newark-Houston
-15 percent
53 percent
Newark-Phoenix
-14 percent
57 percent
Newark-Chicago
-11 percent
35 percent
Newark-Denver
-5 percent
49 percent
Similarly, when Virgin acquired slots at Newark in 2012 after several years of trying unsuccessfully to obtain slots, it introduced competing nonstop service to Los Angeles and San Francisco, and fares on these routes dropped precipitously. United later calculated that competing on these routes in response to Virgin’s entry cost it approximately $66 million in annual revenue.
United Continental Holdings Inc. is a Delaware corporation headquartered in Chicago. Last year United, the third largest airline in the world in terms of revenues, flew over 138 million passengers to over 352 destinations throughout the world.
Delta Air Lines Inc. is a Delaware corporation headquartered in Atlanta. Last year Delta, the second largest airline in the world in terms of revenues, flew over 170 million passengers to 316 destinations throughout the world.
US v United Complaint (236.24 KB)
Jackson County Resident Pleads Guilty to Methamphetamine OffenseRead the Press Release
On November 5, 2015, Michael F. Halliday, , a/k/a "Micky," 33, of Elkville, pled guilty to one-count of conspiracy to distribute methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence at the plea hearing established that Halliday was involved with others in the manufacture of methamphetamine. The offense occurred between 2013 and June 2015, in Perry, Jackson, and Randolph Counties. Halliday is currently being held without bond pending a February 23, 2016, sentencing hearing. Halliday faces a penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Percy Police Department, Steeleville Police Department, Mascoutah Police Department, Illinois State Police Methamphetamine Response Team, DuQuoin Police Department, Pinckneyville Police Department, and Drug Enforcement Administration. The Randolph and Perry County State’s Attorney’s Offices also assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Inmate Pleads Guilty to Assaulting Correctional OfficerRead the Press Release
ALBANY, NEW YORK – Lamar McFadden, 30, of Newark, New Jersey, pled guilty yesterday to assaulting a federal officer and inflicting bodily injury, announced United States Attorney Richard S. Hartunian and Steve Langford, Warden of Federal Correctional Institution (FCI) Ray Brook.
McFadden pled guilty pursuant to a plea agreement calling for a sentence of 72 months of imprisonment, to be served consecutively to his current term of imprisonment ,and three years of supervised release. That sentence is subject to approval by Chief U.S. District Court Judge Glenn T. Suddaby; sentencing is scheduled for March 1, 2016 in Albany.
On August 27, 2014, McFadden was an inmate at FCI Ray Brook in Ray Brook, New York, when a Bureau of Prisons officer instructed him to perform his prison job. McFadden refused, and when the officer attempted to escort him to the lieutenant’s office, McFadden pushed the officer to the ground and held him in a headlock in the prison dining hall. In the course of the assault, McFadden wounded the officer’s scalp and forehead, causing bleeding to the scalp.
This investigation was conducted by the U.S. Bureau of Prisons and is being prosecuted by Assistant United States Attorney Cyrus P.W. Rieck.
Illegal Alien from Mexico Sentenced for Leading Alien Smuggling RingRead the Press Release
CORPUS CHRISTI, Texas – An illegal alien from Mexico has been handed a federal prison sentence following his conviction of conspiracy to transport illegal aliens, United States Attorney Kenneth Magidson announced today along with Brian Moskowitz, special agent in charge of Homeland Security Investigations (HSI). Jose Isabel Paz-Martinez, 28, pleaded guilty to the charge July 23, 2015, admitting the conspiracy resulted in the death of a young woman.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced Paz-Martinez to 108 months years in federal prison. The sentence was enhanced as the court found he was a leader/organizer in the conspiracy. As an illegal alien, he is expected to face deportation proceedings following his release from prison.
The conspiracy lasted from Jan. 1, 2014, to Dec. 18, 2014. Paz-Martinez was responsible for coordinating the transportation of illegal aliens from Border Patrol checkpoints to Houston. His role included obtaining vehicles and hiring drivers to transport the illegal aliens. Approximately 87 illegal aliens had been transported during the course of the conspiracy.
On June 10, 2014, a 21-year old woman from El Salvador was with a group of illegal aliens picked up in a truck driven by one of Paz-Martinez’s drivers. As the woman was trying to climb into the back of the truck, the truck sped away prematurely and she slipped and fell onto the highway. Soon after, she was run over by a tractor trailer.
Paz-Martinez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case is being investigated by HSI and is being prosecuted by Assistant United States Attorney Chad W. Cowan.
Husband and Wife Convicted of Tax Fraud SchemeRead the Press Release
Following a six-day trial before United States District Court Chief Judge K. Michael Moore, a jury convicted husband and wife, Raul Sosa and Maura Sosa, of criminal tax offenses arising out of a five-year scheme to defraud the Internal Revenue Service.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
According to evidence presented at trial, starting in 2003, Raul and Maura Sosa owned and operated Accion 1 Auto Sales, Inc., an automobile salvage and recycling business in Hialeah. After purchasing junked and non-functioning cars, the defendants would strip the cars, sell the usable parts and components to businesses in the secondary auto parts market, and then sell the remaining metal as scrap to a local metal recycler. On some occasions, the defendants would resell whole cars, without stripping them.
The defendants’ fraud scheme revolved around their underreporting of Accion 1’s annual sales revenue on the businesses’ federal income tax returns. Through this scheme, Raul and Maura Sosa depressed the net profits reported on the businesses’ returns, the income reported on their individual returns, and their federal income tax owed.
From 2004 through 2008, the Raul and Mara Sosa’s business had sales of over $28.6 million. However, the defendants’ reported only approximately 14% of their sales, or $3.9 million, on the businesses’ federal income tax returns during that period. As a result of the scheme the defendants failed to report at least $4.5 million in net profits from their business and defrauded the Internal Revenue Service out of over $1.6 million in federal income taxes.
Evidence introduced at trial included records and witness testimony indicating that the defendants’ spending in 2008, on automobiles, real estate, jewelry, and credit card payments exceeded the total income reported on their joint individual income tax return by at least $900,000.
The defendants are scheduled to be sentenced by Chief Judge Moore on February 3, 2016, at 2:00 pm.
Mr. Ferrer commended the investigative efforts of the IRS. The case is being prosecuted by Assistant United States Attorneys Michael Davis and John Byrne.
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
Houma Man Charged with Possession of Child PornographyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MICHAEL CHAUVIN, age 30, of Houma, was taken into custody today after previously being charged in a one-count Indictment by a federal grand jury with possession of images and videos depicting the sexual exploitation of children under the age of twelve.
If convicted, CHAUVIN faces a maximum term of imprisonment of twenty years, followed by up to a lifetime of supervised release, and a $250,000 fine per count. He can also be required to register as a sex offender.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
United States Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
Home-Health Agency Owners and Director of Nursing Indicted in $13 Million Medicare Fraud ConspiracyRead the Press Release
The owners, the director of nursing and patient recruiters of a home-health agency based in Houston were arrested early this morning for their alleged roles in conspiracies to defraud Medicare, to pay illegal healthcare kickbacks and to commit money laundering. The defendants were charged in an indictment unsealed earlier today.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Dallas Regional Office and Special Agent in Charge D. Richard Goss of the Internal Revenue Service-Criminal Investigation Division (IRS-CI) Houston Field Office made the announcement.
According to the indictment, Ebong Tilong, 51, and Marie Neba, 51, both of Sugar Land, Texas, used the Texas-based, home-health agency that they owned to bill Medicare for home-health services that were not provided or not medically necessary. They allegedly orchestrated this scheme by paying kickbacks to a series of individuals. First, Tilong and Neba allegedly paid illegal kickbacks to physicians in exchange for authorizing medically unnecessary home-health services. Using the money that Medicare paid for such fraudulent claims, Tilong and Neba allegedly paid illegal kickbacks to Daisy Carter, 56, of Wharton, Texas, and Connie Ray Island, 48, of Houston, in exchange for referring Medicare beneficiaries for home-health services. Finally, all four defendants allegedly paid illegal kickbacks to Medicare beneficiaries, in exchange allowing Tilong and Neba to bill Medicare using their Medicare information for home-health services that were not medically necessary or not provided. Neba, who also served as the company’s director of nursing, also allegedly falsified medical records to make it appear that Medicare beneficiaries qualified for and received home-health services. From in or around February 2006 to in or around June 2015, Tilong and Neba received approximately $13 million for these allegedly fictious or unnecessary home-health services.
An indictment is merely a formal accusation. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, HHS-OIG and IRS-CI under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Texas. The case is being prosecuted by Trial Attorney William S.W. Chang of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Hollister Man Pleads Guilty to Armed Bank RobberyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Hollister, Mo., man pleaded guilty in federal court today to the armed robbery of Central Bank in Branson, Mo.
Joseph E. Cyrus, 76, of Hollister, pleaded guilty before U.S. Magistrate Judge David P. Rush to stealing $30,946 from Central Bank, 1115 James Epps Road in Branson on Oct. 16, 2015.
According to court documents, Cyrus entered the bank at approximately 9 a.m. and was wearing a blue ski mask and rubber gloves. He was carrying a black semi-automatic pistol. Cyrus approached the teller counter, pointed the pistol at the tellers, and said, “This is a robbery.”
Cyrus demanded that all of the bank’s employees who were positioned behind the teller counter come out where he could see them. He demanded that the tellers give him cash from their teller drawers, and at one point told one of the tellers that he would shoot her in the knee.
Cyrus handed one of the bank employees a blue reusable shopping bag and they put the cash in the bag. Cyrus ordered the employees and customers in the lobby to get down on the ground, then he left the bank and walked to a white Ford Ranger pickup truck that was parked in the parking lot across the street from the bank.
Surveillance photos depict the truck with an unknown state’s license plate, which had been attached to the vehicle backwards (with the face of the plate against the truck’s bumper). Four of the six numbers/letters were clearly visible. Branson police dispatchers broadcast the description of the robber and the vehicle to area law enforcement agencies. An off-duty Branson police officer heard the description of the truck and recalled having seen a similar vehicle parked near the Yacht Club Mobile Home Park in Hollister. The officer was familiar with the truck because it had a “for sale” sign in it and he previously called the listed phone number to inquire about purchasing the truck.
At about noon on the day of the robbery, the officer drove to the parking lot and saw the truck parked in the lot. The truck had a West Virginia license plate and was registered to Cyrus. The manager of the mobile home park told the officer that Cyrus had paid his rent and checked out at approximately 11 a.m. the same day. Cyrus left the mobile home park in another vehicle and left the pickup in the parking lot, hoping that it would sell.
A federal agent made a ruse call to the telephone number listed on the “for sale” sign in the truck. The call went to voice mail, and the agent left a message indicating that he was interested in purchasing the truck. The agent was able to contact Cyrus through an intermediary who called Cyrus and told him he had a potential buyer for the truck. The agent spoke to Cyrus, posing as the potential buyer. Cyrus later called the agent back and told him that he was not returning to Hollister but that the agent could arrange to wire the money to purchase the truck.
On Wednesday, Oct. 21, 2015, Cyrus turned himself in at the Branson Police Department.
Under federal statutes, Cyrus is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the FBI, the Branson, Mo., Police Department and the Hollister, Mo., Police Department.
Herrin Man Pleads Guilty to Heroin OffensesRead the Press Release
On November 5, 2015, James N. Taylor, a/k/a "James Taylor, Jr.", "James Taylor, II," and "Oolie," 47, of Herrin, Illinois, pled guilty to a two-count indictment charging conspiracy to distribute heroin and distribution of heroin, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The offense occurred between 2014 and July 2015, in Williamson County. Evidence at the plea hearing established that Taylor was involved with others in the distribution of heroin. On June 26, 2015, Taylor sold heroin to a confidential source working for law enforcement. During June 2015 searches of Taylor and his Herrin residence, agents located pre-packaged heroin and pre-recorded buy money. Upon his arrest, Taylor admitted that he was involved with others in the distribution of heroin.
Taylor is currently being held without bond pending a February 10, 2016, sentencing hearing. At that time, Taylor faces up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a fine of $1,000,000.
The ongoing investigation is being conducted by the Southern Illinois Enforcement. The Williamson County State’s Attorney’s Office assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Hansen Sentenced to 10 Years in Federal Prison for Possession of Child PorngraphyRead the Press Release
SALT LAKE CITY – A Salt Lake City man who admitted he had more than 600 images of child pornography in his possession, including images depicting young children being sexually assaulted by adults, has been sentenced to 10 years in federal prison.
Steven Seth Hansen, age 36, of Salt Lake City, who has a previous federal conviction for use of interstate facilities to transmit information about a minor, must also register as a sex offender, pay restitution in the case, and forfeit a phone and tablet.
As a part of a plea agreement reached with federal prosecutors, Hansen pleaded guilty to one count of possession of child pornography, which included a minimum mandatory sentence of 10 years in federal prison. U.S. District Court Judge Robert J. Shelby, who imposed the sentence last week, ordered Hansen to report to federal prison to begin serving his sentence on Jan. 15, 2016.
Law enforcement officers executed a search warrant at Hansen’s home in March, following up on tips from the National Center for Missing and Exploited Children. Agents and officers with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Utah Internet Crimes Against Children task force recovered a tablet and phone with child pornography images on them. Hansen was charged with receipt of child pornography and possession of child pornography in an indictment returned in March.
This case was investigated and prosecuted as a part of Utah Project Safe Childhood, an initiative targeting child sexual exploitation. Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.
Grand Jury Returns Indictment Charging Llewelyn with Embezzling Money from Programs Receiving Federal FundsRead the Press Release
SALT LAKE CITY – A grand jury returned a one-count indictment Tuesday afternoon charging Jason Thomas Llewelyn, age 45, of Helper, Utah, with theft from programs receiving federal funds.
The indictment alleges that from about Dec. 16, 2011, through about Aug. 19, 2015, Llewelyn, as an agent of Carbon County, embezzled money from grants given to the county and administered by the U.S. Department of Homeland Security. The county received a series of grants in excess of $10,000 beginning in August 2010 and continuing through September 2014.
According to the indictment, Llewelyn used the money to purchase hundreds of items for his houseboat and other personal interests. The indictment alleges he misapplied property worth at least $5,000.
Llewelyn will be issued a summons to appear in federal court for an initial appearance on the charge in the indictment. The potential maximum penalty for the charge is up to 10 years in prison and a fine of $250,000.
Indictments are not findings of guilt. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.
The case is being investigated by special agents of the FBI and prosecuted by the U.S. Attorney’s Office in Salt Lake City.
Georgia Man Indicted for ID Theft, Tax Fraud SchemeRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Loganville, Ga., man has been indicted by a federal grand jury for a fraud scheme in which he stole personal identity information from several victims in order to file fraudulent federal income tax returns.
Chike Uzodinma Agogbua, 42, of Loganville, a Nigerian national and a naturalized U.S. citizen, was charged in an eight-count indictment returned under seal by a federal grand jury in Jefferson City, Mo., on Sept. 28, 2015. That indictment was unsealed and made public upon Agogbua’s arrest and initial court appearance. Agogbua, who was arrested in Georgia in October, had his initial court appearance in the U.S. District Court in Jefferson City today.
Agogbua allegedly stole the names, Social Security numbers and dates of birth of victims, then used that information to file federal income tax returns. According to the indictment, Agogbua also reported false employment, wages earned and taxes withheld in order to obtain refunds for himself. As a result of Agogbua’s fraud scheme, the IRS wired tax refunds, in the names of other persons, to bank accounts under Agogbua’s control.
The federal indictment charges Agogbua with five counts of wire fraud, related to tax refunds sent from the IRS Financial Center in Kansas City, Mo., and direct deposited into Agogbua’s bank account, and three counts of aggravated identity theft.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI and IRS-Criminal Investigation.
Four More Individuals Sentenced in Large a-PVP ConspiracyRead the Press Release
GREENEVILLE, Tenn. – Between Oct. 26 and Nov. 9, 2015, four more individuals involved in an extensive a-PVP (alpha-pyrrolidinopentiophenone) distribution conspiracy centered in northeast Tennessee, southwest Virginia and western North Carolina, were sentenced to serve time in federal prison by the Honorable Pamela L. Reeves, U.S. District Court Judge.
Melissa Carol Williams, 39, of Greeneville, Tenn., was sentenced to serve 115 months; Jason Kyle Dulworth, 35, of Greeneville, Tenn., was sentenced to serve 46 months; Jonathon Rae Watson, 32, of Concord, N.C., was sentenced to serve 80 months; and, Richard Carmen Ware, 72, of Hendersonville, N.C., was sentenced to serve 60 months. Twelve others who were previously sentenced in this conspiracy received prison sentences ranging from 110 to 235 months.
According to the plea agreements on file with the U.S. District Court Clerk, the combined aggregate total of a-PVP stipulated to by Williams, Dulworth, Watson and Ware was approximately 19,275 grams.
A-PVP is a synthetic drug, primarily ordered from China, which is commonly referred to on the street as “gravel” or “flakka.” Common effects on users include: extreme paranoia; hallucinations; elevated blood pressure; extremely high body temperature; excited delirium; staying awake for days; hostility and having exceptional strength without apparent fatigue. These characteristics of the drug make it very dangerous for both the user and law enforcement responding to people who are using the drug. Users of a-PVP have referred to the substance as “meth on steroids.”
Law enforcement agencies participating in this investigation included the Drug Enforcement Administration, Bureau of Alcohol, Tobacco and Firearms, Homeland Security Investigations, Sullivan County Sheriff’s Office, Kingsport Police Department, Hawkins County Sheriff’s Department, Johnson City Police Department, Greeneville, Tennessee Police Department, Hendersonville, North Carolina Police Department, and the Scott County, Virginia Sheriff’s Office, all of which provided invaluable assistance during the course of the investigation. Assistant U.S. Attorney Wayne Taylor represented the United States.
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Forty-Seven Defendants Facing Drug, Gun, and Fraud Charges in Ongoing Investigation in Helena-West HelenaRead the Press Release
HELENA-WEST HELENA, Ark.—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), Dax Roberson, Acting Special Agent in Charge of the Office of Inspector General Southwest Region of the United States Department of Agriculture (USDA), and Colonel William J. Bryant, of the Arkansas State Police, announced today the simultaneous unsealing of eleven federal indictments charging 39 defendants as part of a continuing investigation into drug, firearm, and fraud offenses in Phillips County. The indictments were returned by the Grand Jury on November 4, 2015, and were unsealed today following a coordinated roundup of the charged defendants, along with eight defendants charged as part of the same investigation with state drug offenses.
The arrests resulted from two Organized Crime and Drug Enforcement Task Force (OCDETF) investigations, Operation Delta Blues and Operation Plastic Castle, which began in 2011 with a goal to target drug trafficking, violent crime, and public corruption in the Arkansas Delta, including Phillips County. Early Tuesday morning, approximately 300 law enforcement officers and support personnel, including approximately 130 tactical officers, executed 17 federal and 8 state arrest warrants in a targeted takedown that resulted in the arrests of 13 federal defendants and five state defendants on drug, firearm, or fraud charges. Seven defendants are now fugitives. Most of the defendants are residents of Helena-West Helena (see attachments for complete list of defendants, charges and penalties).
"Just over four years ago, during the original Operation Delta Blues, I made a commitment to help clean up the Arkansas Delta," Thyer said. "It has been evident for some time that violent drug traffickers are overrunning the Arkansas delta, including Phillips County. Today’s operation is a reminder to those criminals that the federal and state law enforcement authorities will pursue you until this community is returned to its law-abiding citizens. Where drugs, violence, fraud and corruption fester, we will take action."
From 2012 through 2015, agents with the FBI, ASP, and 1st Judicial District Drug Task Force coordinated more than 60 controlled purchases of drugs resulting in the acquisition of significant amounts of crack cocaine. Agents also utilized two court-authorized wiretaps in the drug-trafficking and firearms investigation. FBI and USDA agents also engaged in undercover transactions involving the illegal transfer of Supplemental Nutrition Assistance Program (SNAP) benefits.
"Today’s arrests are evidence of our continued resolve to make an impact on crime in the Arkansas delta," Resch said. "We appreciate the unfaltering efforts of the United States Attorney’s Office, Arkansas State Police, and the 1st Judicial District Drug Task Force."
"The Arkansas State Police is a committed partner in a team of law enforcement officers with a common objective to restore hope, law, and order in communities overwhelmed by drug dealers and violent offenders who have no regard for the community or the people they prey upon," Bryant said.
In addition to the arrest warrants served today, 24 defendants who were charged in a single indictment with defrauding the USDA by selling their SNAP benefits at the Stop and Shop in Helena-West Helena for cash will receive summonses over the course of the next several days. SNAP benefits provide economic assistance for low-income individuals to purchase food.
The indictment alleges that Khalid Alkarsh, who owns Stop and Shop, and Bakil Mohamed Alqirsh, who is a cashier and manager at the convenience store, allowed SNAP recipients to trade their SNAP benefits for ineligible items such as beer and cigarettes, and for cash. When a SNAP recipient redeemed their benefits for cash, Alkarsh and Alquirsh paid the recipient approximately 60% of the transaction amount, and the Stop and Shop kept 40%. The loss amount for the alleged fraud is in excess of $250,000.
The counts in today’s unsealed indictments include conspiracy to distribute and possess with intent to distribute crack cocaine, distribution and possession with intent to distribute crack cocaine, possession of a firearm in relation to a drug trafficking crime, use of a telephone to facilitate a drug trafficking crime, conspiracy to unlawfully redeem SNAP benefits, and unlawful transfer of SNAP benefits.
Those arrested today will be arraigned in federal court in Little Rock before United States Magistrate Judge Patricia S. Harris beginning at 2 p.m. on Thursday, November 12, 2015. Defendants receiving summonses will be arraigned on Friday, November 20, 2015, at 1 p.m.
The investigations were conducted by FBI, USDA, and ASP, in partnership with the 1st Judicial District Drug Task Force. The cases are being prosecuted by Assistant U.S. Attorney Julie Peters. An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
West Helena Press Release Attachment
Fort Worth Woman Sentenced to 20 Years in Federal Prison for Role in Methamphetamine Distribution ConspiracyRead the Press Release
FORT WORTH, Texas — Rachel Adams, 30, of Fort Worth and Weatherford, Texas, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to serve 240 months (20 years) in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Adams pleaded guilty in July 2015 to one count of conspiracy to possess with intent to distribute at least 50 grams of methamphetamine.
According to documents filed in the case, since approximately 2014, Adams received multi-ounce and pound quantities of methamphetamine from a coconspirator. Other coconspirators received multi-ounce and pound quantities of methamphetamine on consignment form Adams. In turn, Adams and others distributed methamphetamine to various customers in the Benbrook, Fort Worth, Arlington, and Wichita Falls, Texas areas.
Adams’ sentence is to be served concurrently with any sentence she may receive in related cases pending in Tarrant County.
The Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Fort Worth Police Department investigated the case. Assistant U.S. Attorney Shawn Smith was in charge of the prosecution.
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Former Waiter Pleads Guilty in Credit Card Fraud SchemeRead the Press Release
Greenbelt, Maryland – A former waiter at an Annapolis restaurant, Andrew Anamanya, age 25, of Glen Dale, Maryland pleaded guilty today in connection with his role in stealing customers’ credit card information, as part of a conspiracy to commit access device fraud.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge James Murray of the United States Secret Service - Washington Field Office; Chief Mark A. Magaw of the Prince George’s County Police Department; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Chief Murray “Jay” Farr of the Arlington County, Virginia Police Department.
According to Anamanya’s plea agreement, while working as a waiter at an Annapolis restaurant, Anamanya was approached by two co-conspirators and agreed to use a credit card reading device, known as a “skimmer,” to steal credit and debit card information. The co-conspirators supplied Anamanya with the skimmer and when Anamanya’s customers paid their bills using credit or debit cards, Anamanya secretly swiped their cards through the skimmer. A few days later, Anamanya met with his co-conspirators and gave them the skimmer he had used in return for another skimmer. From July through October 2009, Anamanya repeated this process, compromising the credit card information of approximately 12 individuals. One of the co-conspirators transferred the data from the skimmer onto a laptop computer and then re-encoded the information onto other debit cards. Those fraudulently re-encoded cards were then used to make purchases at retail stores in the Washington, D.C. metropolitan area, the Eastern Shore of Maryland, and Delaware.
The total loss reasonably attributable to Anamanya’s conduct was $10,153.81. Four other co-conspirators have pleaded guilty to their roles in the scheme and are awaiting sentencing. A sixth defendant is scheduled to go to trial on November 17, 2015.
Anamanya faces a maximum sentence of five years in prison. U.S. District Judge Peter J. Messitte has scheduled sentencing for March 30, 2016, at 9:30 a.m.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service, Prince George’s County Police Department, Maryland State Police, and the Arlington County, Virginia Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bryan E. Foreman, who is prosecuting the case.
Former Swinomish Police Chief Sentenced to 16 Months in Prison for Stealing Tribal FundsRead the Press Release
The former Police Chief of the Swinomish Tribe was sentenced today in U.S. District Court in Seattle to 16 months in prison and two years of supervised release for theft of tribal funds, announced United States Attorney Annette L. Hayes. THOMAS J. SCHLICKER, 57, of Stanwood, Washington, served as the Swinomish Police Chief from 1997 until September 2014, when his employment was terminated. SCHLICKER stole more than $30,000 that belonged to the tribe. At sentencing U.S. District Judge John C. Coughenour called the crime “a breach of trust” and ordered SCHLICKER to pay $17,849 for a total restitution to the Swinomish tribe of more than $33,000.
“This defendant betrayed the trust placed in him by the Swinomish Tribe,” said U.S. Attorney Annette L. Hayes. “As the Chief of Police for the tribe for nearly 25 years, his job was to protect the tribe – not steal from it. We will continue to work with the Federal Bureau of Investigation and the Tribes in Western Washington to ensure that those who embezzle funds are identified and held to account.”
“It is a sad day for our community. We entrusted him for 25 years… We trusted him and he betrayed our trust,” Swinomish Tribal Chairman Brian Cladoosby told the court. “People need to know that when they come to work in Indian Country… that this is not acceptable.”
According to the plea agreement, between 2008 and 2014 SCHLICKER set up a secret bank account in the name of the Swinomish Police Department, without the knowledge of the tribal accounting department. SCHLICKER then deposited checks made out to the tribal police into the secret account and withdrew the proceeds in cash, which he then used for his own purposes. SCHLICKER also used the Tribe’s Chevron/Texaco credit card to purchase gas for his and his family members’ personal vehicles. The total loss to the Swinomish Tribe is $33,622.
In asking for a sentence at the high end of the guidelines range, prosecutors noted the crime was a repeated betrayal of trust by a 20+ year employee. “This is far from an isolated misjudgment during a time of weakness. Rather, this was a calculated offense that occurred over five years and involved 38 fraudulent deposits and 37 fraudulent withdrawals, for a total of 75 fraudulent transactions on the Secret Account alone. Each of these transactions was a separate decision to commit a crime, as was each decision to misuse the tribal gas card or submit a fraudulent reimbursement request,” prosecutors wrote in their sentencing memo.
The case was investigated by the FBI, the Washington State Patrol, and the Swinomish Tribe. The case is being prosecuted by Assistant United States Attorneys Seth Wilkinson and Ye-Ting Woo.
Former San Fernando Valley Man Pleads Guilty to Smuggling Protected South American Fish Species to CanadaRead the Press Release
LOS ANGELES – A man who was recently extradited from Mexico to face federal charges related to the illegal trafficking of the world’s largest freshwater fish pleaded guilty this afternoon to smuggling two Arapaima gigas to Canada.
Isaac Zimerman, 66, who formerly resided in West Hills, pleaded guilty today to the smuggling charge before United States District Judge Otis D. Wright II.
In a plea agreement filed yesterday in United States District Court, Zimerman admitted that he smuggled two Arapaima gigas to Canada. At the time, Zimerman knew that he was illegally exporting the fish because they are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and they could not be exported to another country without a CITES re-export permit, which he did not have.
Zimerman was initially charged in 2009, along with his company, River Wonders LLC, and his wife, Leonor Catalina Zimerman.
River Wonders also pleaded guilty this afternoon to attempted smuggling of 10 Arapaima gigas to a resort in the Bahamas.
While Leonor Zimerman pleaded guilty to a misdemeanor offense in 2010, Isaac Zimerman fled the United States that same year after prosecutors filed additional charges alleging that he continued to illegally export fish while on bond. Special agents with the United States Fish & Wildlife Service tracked Zimerman’s movements through Europe, to Israel and eventually to Mexico.
On March 3, 2015, concluding a four-year manhunt, Zimerman was arrested near Metepec, Mexico. During his flight to avoid prosecution, Zimerman changed his appearance and took other steps to avoid detection and arrest. Mexico extradited Zimerman in September.
As a result of today’s guilty plea, Zimerman faces a statutory maximum sentence of 10 years in federal prison when he is sentenced by Judge Wright on February 8.
Leonor Zimerman pleaded guilty in 2010 to a misdemeanor count of illegal fish trafficking. She was sentenced by United States District Judge Valerie Baker Fairbank in January 2011 to 21 months of probation and was ordered to pay a $1,500 fine.
The arrest of Isaac Zimerman concluded a four-year manhunt led by the United States Fish & Wildlife Service, which received assistance from the Mexico City attaché of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, the FWS Intel Unit, Interpol, the U.S. Department of Justice’s Environment and Natural Resources Division, and the U.S. Department of Justice’s Office of International Affairs.
Former Sales Manager Sentenced for Conspiracy in Bribes, Kickbacks for Glock FirearmsRead the Press Release
TOPEKA, KAN. – A former sales manager for the company that makes Glock firearms was sentenced Monday to 18 months in federal prison for conspiring to take bribes and kickbacks, U.S. Attorney Barry Grissom said.
James Craig Dutton, 44, Acworth, Ga., pleaded guilty to one count of conspiracy to defraud Glock by accepting bribes and kickbacks from a gun dealer in return for preferential treatment.
Co-defendant John Sullivan Ralph, III, was sentenced to 18 months after pleading to conspiracy. Ralph, who owned Global Guns & Hunting, Inc., of Olathe, doing business as OB Guns, admitted he paid 140 bribes and kickbacks to Glock employees totaling approximately $900,000. Dutton, who was an assistant national sales manager for Glock, admitted he conspired with Ralph and others. Dutton received cash payments, gifts and other things of value from Ralph and he concealed those payments from Glock.
Grissom commended the FBI and Assistant U.S. Attorney Richard Hathaway for their work on the case.
Former Public Employees Union Treasurer Charged with Embezzling $65,000 from Local 477Read the Press Release
WICHITA, KAN. - A former public employees union treasurer was indicted Tuesday on federal charges of embezzling $65,000, U.S. Attorney Barry Grissom said.
Shelly Sutton, formerly known as Shelly Burngardt, 46, Augusta, Kan., is charged with one count of bank fraud. The alleged crime took place while she was the treasurer of the American Federation of Government Employees (AFGE) Local 477 in Wichita. The indictment alleges Sutton:
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Forged signatures on union checks.
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Made unauthorized cash withdrawals from the union’s accounts.
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Made electronic payments from the union’s account to her own creditors
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Used the union’s debit card to make unauthorized purchases.
The indictment seeks a $65,000 personal money judgment against Sutton.
If convicted, she faces a maximum penalty of 30 years in federal prison and a fine up to $1 million. The U.S. Department of Labor – Office of Labor-Management Standards investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
OTHER GRAND JURY INDICTMENTS
Hector M. Birrueta, 31, Pasco, Wash., is charged with one count of possession with intent to distribute approximately 57 pounds of methamphetamine. The crime is alleged to have occurred Oct. 17, 2015, in Ellis County, Kan.
If convicted he a penalty of not less than 10 years and a fine up to $4 million. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting
Joshua A. Haskins, 40, Wichita, is charged with one count of sexual exploitation of a child, one count of attempted production of child pornography, and one count of distributing child pornography. The crimes are alleged to have occurred in February and July 2015 in Wichita.
If convicted, he faces a penalty of not less than five years and not more than 20 years and a fine up to $250,000 on the distribution count, and a penalty of not less than 15 years and not more than 30 years and a fine up to $250,000 on each of the other counts. Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Jason Hart is prosecuting.
Raymundo Ochoa-Ortiz, 34, a citizen of Mexico, is charged with illegally re-entering the United States after being deported. He was found Oct. 28, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Genaro Ruvalcaba-Sandoval, 30, a citizen of Mexico, is charged with illegally re-entering the United States after being deported. He was found Oct. 21, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Juan Salmeron-Acevedo, 37, a citizen of Mexico, is charged with illegally re-entering the United States after being deported. He was found Nov. 4, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Sostenes Sanchez-Isidoro, 37, a citizen of Mexico, is charged with one count of making a false statement on a passport application, one count of misusing a passport, one count of making a false claim of U.S. citizenship, two counts of misusing a Social Security number, one count of using false documents to be employed in the United States, two counts of aggravated identity theft and one count of unlawful production of an identification document. The crimes are alleged to have occurred at various times from 2007 to 2013 in Sedgwick County, Kan.
Upon conviction, the crimes carry the following penalties:
False statement: A maximum penalty of 10 years in federal prison and a fine up to $250,000.
Misuse of a passport: A maximum penalty of 10 years in federal prison and a fine up to $250,000.
False claim of citizenship: A maximum penalty of three years and a fine up to $250,000.
Misusing a Social Security number: A maximum penalty of five years and a fine up to $250,000.
Using false documents: A maximum penalty of 10 years and a fine up to $250,000.
Aggravated identity theft: A mandatory two years to run consecutively and a fine up to $250,000 on each count.
Unlawful production of an identification document: A maximum penalty of 15 years and a fine up to $250,000.
The Kansas Department of Revenue and Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Luis Mendoza-Ortiz, a citizen of Mexico, is charged with two counts of using a false document to be employed in the United States, two counts of making a false statement, two counts of misusing a Social Security number, two counts of aggravated identity theft and one count of unlawfully re-entering the United States after being convicted of a felony and deported. The crimes are alleged to have occurred in 2014 and 2015 in Cowley and Montgomery counties.
Upon conviction, the crimes carry the following penalties:
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Using false documents: A maximum penalty of 10 years and a fine up to $250,000 on each count.
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False statement: A maximum penalty of 10 years in federal prison and a fine up to $250,000 on each count.
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Misusing a Social Security number: A maximum penalty of five years and a fine up to $250,000 on each count.
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Unlawfully re-entering the United States after being convicted of a felony and deported: A maximum penalty of 10 year and a fine up to $250,000.
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Aggravated identity theft: A mandatory two years to run consecutively and a fine up to $250,000 on each count.
The Kansas Department of Labor and Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Homero Arambula, 28, Wichita, Kan., is charged with one count of wire fraud. The indictment alleges he fraudulently collected more than $8,900 in unemployment benefits from the Kansas Department Labor. The crime is alleged to have occurred in 2013 and 2014 in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The U.S. Department of Labor investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
Mark D. Capps, 55, Wichita, Kan., is charged with one count of wire fraud. The indictment alleges he fraudulently collected more than $17.000 in unemployment benefits from the Kansas Department of Labor. The crime is alleged to have occurred at various times from 2007 to 2012 in Wichita, Kan.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The U.S. Department of Labor investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
Joseph Bussart, Jr., 24, Wichita, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction and one of unlawful possession of a firearm with an obliterated serial number. The crimes are alleged to have occurred Aug. 7, 2015 in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000 on the charge of felon in possession, and a maximum penalty of five years and a fine up to $250,000 on the other count. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
Pamela Randle, 37, Wichita, Kan., is charged with one count of wire fraud. The indictment alleges she fraudulently collected more than $36,000 in unemployment benefits from the Kansas Department of Labor. The crime is alleged to have occurred at various times from 2008 to 2014 in Wichita, Kan.
If convicted, she faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The U.S. Department of Labor investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
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Former President of Law Enforcement Labor Union Sentenced in Manhattan Federal Court for Defrauding Union of FundsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOHN EARVIN, the former president of the United Federation of Law Enforcement Officers (“UFLEO” or the “Union”), was sentenced by U.S. District Judge Paul A. Engelmayer to three years of probation, including six months of home confinement. EARVIN pled guilty on June 19, 2015, to one count of wire fraud.
According to the Indictment and statements made in court:
The UFLEO represents Special Inspectors employed by the Metropolitan Transportation Authority of New York (“MTA”). From February 2007 through April 2010, EARVIN was the Union’s president, supervising the affairs of the Union and managing the Union’s finances, including through sole control of the Union’s bank account (the “Account”). Through his presidency, EARVIN perpetrated a scheme to defraud the Union by diverting Union dues payments deposited into the Account for his own benefit, principally by making hundreds of ATM withdrawals at off-track betting facilities and other locations and making personal use of the funds. In perpetuating the scheme and preventing its discovery, EARVIN repeatedly lied to Union members about the Account by, for example, claiming that he could not provide an accounting of funds to Union members because an independent auditor was reviewing the Union’s finances. As a result of the scheme, EARVIN defrauded the Union and its members of approximately $28,012.
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EARVIN, 67, of New Rochelle, New York, was also sentenced to 600 hours of community service and ordered to pay restitution of $2,000 a month.
U.S. Attorney Preet Bharara thanked the DOL-OLMS for its work in the investigation.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Carrie H. Cohen and Jennifer Gachiri are in charge of the prosecution.
Former Postal Worker Pleads Guilty to StealingRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former employee at the North Kansas City, Mo., post office pleaded guilty in federal court today to stealing money from a cash drawer.
Jacob Crisp, 24, formerly of Kansas City, Mo., pleaded guilty before U.S. District Judge Dean Whipple to misappropriating federal postal funds.
Crisp was a sales and service distribution associate working at the front counter of the North Kansas City, Mo., post office. From June 3, 2013, to Feb. 11, 2014, Crisp embezzled money from the Postal Service by not properly recording stamp sales with customers. He falsely reported voided and no-sale transactions, and did not report other stamp sales with customers, thereby reducing the amount of cash he remitted in his daily deposits. This allowed him to embezzle the money paid by customers for post office products, including stamps.
Crisp estimated that beginning in October 2013, he stole approximately two to three times per week, about $200 per week, which the government contends totaled $5,040 worth of retail transactions.
Crisp was observed on video conducting sales transactions, but hitting the “void” key so that the sale wasn’t recorded in the computer terminal. Crisp was also observed on video taking money from the cash drawer and putting it in his pocket.
Under federal statutes, Crisp is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Postal Service Office of Inspector General.
Former Pico Rivera Businessman Pleads Guilty to Federal Tax Fraud and Identity Theft Charges in Scheme that Netted nearly $550,000Read the Press Release
LOS ANGELES – A former Pico Rivera businessman pleaded guilty late this afternoon in relation to a stolen identity refund fraud scheme in which he conspired to use stolen identities to file fraudulent tax returns with the Internal Revenue Service that fraudulently generated approximately $550,000 in tax refunds.
Frank Ruben Candelaria, 53, of Los Angeles, pleaded guilty to one count of conspiracy to defraud the United States and two counts of making false claims against the United States by filing fraudulent tax returns in his own name.
According to the plea agreement filed in the case, beginning in December 2008 and continuing through September 2009, Candelaria and co-conspirator Edgar Rene Nunez, 61, caused at least 143 fraudulent income tax returns to be filed with the IRS. As a result of the fraudulent tax returns that sought well over $1 million in refunds, the IRS issued approximately $548,447 in fraudulent tax refund checks.
"Stolen identity refund fraud, known as SIRF, victimizes both the United States and the individuals who have had their identities stolen," said United States Attorney Eileen M. Decker. "The Department of Justice will continue to prosecute aggressively criminals seeking to profit from the identities of others."
In executing the scheme, Nunez and others obtained the names and Social Security numbers of individuals without their knowledge and consent. The co-conspirators created bogus Forms W-2 (IRS Wage and Tax Statements) in the names of the identity theft victims that reported false employment and income information, as well as false tax withholding amounts. Using the falsified information reported on the Forms W-2, fraudulent individual income tax returns were prepared and filed claiming false tax refunds. The tax returns were filed without the knowledge or consent of the identity theft victims.
The fraudulent tax refunds were then either mailed to addresses that Candelaria and Nunez, as well as others, controlled or directly deposited to bank accounts that Nunez and others controlled.
"IRS Criminal Investigation has declared investigating refund fraud and identity theft a top priority," stated Special Agent in Charge Erick Martinez of the Los Angeles Field Office. "Filing fraudulent tax returns in the names of other individuals creates irreparable harm to those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury."
In addition to the tax fraud scheme outlined above, Candelaria filed fraudulent tax returns in his own name for the 2006 and 2007 tax years claiming false refunds of $9,955 and $9,720, respectively.
When sentenced by U.S. District Court Judge Michael W. Fitzgerald on February 1, Candelaria faces a statutory maximum sentence of 20 years in federal prison and a fine of $750,000. Candelaria has agreed to pay full restitution to the IRS in the amount of $568,152.
Nunez pleaded guilty on March 31, 2015 to one count of conspiracy to submit false claims, nine counts of submitting false claims against the U.S. government, two counts of mail fraud, and one count of identity theft. When he is sentenced on February 22, Nunez faces a statutory maximum sentence of 97 years in federal prison and a fine of $3,250,000.
The investigation into Candelaria and Nunez was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation.
Former Owner of Empire Towers Sentenced to over Five Years in Prison for Fraudulent $7 Million Bond Scheme and Filing a False Tax ReturnRead the Press Release
Baltimore, Maryland - U.S. District Judge William D. Quarles, Jr. sentenced Wilfred T. Azar, III, age 54, formerly of Queenstown, Maryland, today to 63 months in prison followed by three years of supervised release, for securities fraud and filing a false tax return. Judge Quarles also entered an order that Azar must perform 100 hours of community service while on supervised release, and pay restitution of $7,219,362 to the victim investors and $469,936 in restitution to the IRS.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Deputy Assistant Attorney General Bruce M. Salad for the Tax Division of the Department of Justice; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
“Today’s sentencing reaffirms IRS Criminal Investigation is diligent in unraveling the fraudulent financial transactions of those who scheme to defraud investors and U.S. taxpayers,” said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “In partnership with our law enforcement partners, we will continue to pursue those who engage in this type of conduct in order to protect the integrity of our financial system.”
In 1999, Azar became president and majority owner of Empire Corporation and exercised complete control over the operations of Empire. Empire Corporation owned Empire Towers Corporation. Empire Towers Corporation’s primary asset was Empire Towers, a 10 story office building in Glen Burnie, Maryland.
According to Azar’s plea agreement and court documents, by January 2006, Empire Corporation could no longer pay its expenses and was effectively insolvent. By 2007, Empire Towers Corporation had exhausted its lines of credit from lending institutions.
From January 2006 to April 2010, Azar caused Empire Corporation to sell bonds to 64 individual investors for more than $7 million. While many of the bonds were titled “registered,” the bonds were not registered with either the U.S. Securities and Exchange Commission (SEC) or the state of Maryland. In addition, Azar falsely told investors that Empire Corporation was in good financial health and that the company generated enough revenue to pay the promised 10 percent annual rate of return. Azar falsely represented that the money invested would be used for a specific renovation project or other capital improvement at the Empire Towers office building. Azar failed to inform investors that he used most of the money raised from previous bond sales for his own personal purposes. Although the bonds were issued by Empire Corporation, Azar diverted millions of dollars of proceeds from the bond sales to his own bank account and the bank accounts of other companies that he controlled.
During the period of the fraud, Azar misappropriated approximately $7,219,362 in investor proceeds raised through the sale of bonds. Azar used the bond proceeds: to purchase a $100,000 Aston Martin luxury automobile; to pay the $3,000 monthly mortgage on his primary residence; to pay $51,000 to an Azar trust; to purchase Baltimore Ravens season tickets for $17,298; and to pay $25,389 in country club dues. In addition, Azar charged over $420,000 to a credit card paid by Empire Management Services, including daily living expenses, lavish vacations, and university tuition for one of his children. Azar also diverted more than $1.07 million in Empire funds as “loans” to other unrelated businesses he controlled which were never repaid, and another $3.31 million to make lulling payments.
Finally, Azar filed to report approximately $1,959,250 of embezzled income on his 2009 tax return, thereby avoiding $469,936 in federal income taxes.
The SEC has also filed a complaint against Azar and another individual in connection with the scheme, and that case is pending.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’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, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the Tax Division, IRS-CI and the SEC for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Martin J. Clarke and Trial Attorney Kenneth C. Vert of the Justice Department’s Tax Division, who prosecuted the case.
Former Mount Juliet Police Sergeant Sentenced for Federal Program Fraud and Wire FraudRead the Press Release
Jason Ezell, 40, of Lebanon, Tenn., was sentenced today by Chief U.S. District Judge Kevin H. Sharp, to serve six months in prison and one year supervised release, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Ezell, a former sergeant with the Mount Juliet Police Department, pleaded guilty on July23, 2015, to federal program fraud and wire fraud. The Court also ordered him to pay more than $13,000 in restitution.
Ezell was charged on July 10, 2015, with fraudulently preparing time cards and submitting fraudulent overtime logs, falsely claiming that he worked more than 500 hours of overtime in support of and assisting in federal Organized Crime Drug Enforcement Task Force (OCDETF) investigations during the period of January 2013 through April 2015. During that time, Ezell was a sergeant with the Mount Juliet Police Department and supervised the Crime Suppression Unit.
In sentencing Ezell, Chief Judge Sharp noted that “there was an abuse of trust of the position the people placed him in to be a good steward of the public’s money.” Judge Sharp also said the sentence “needs to reflect the seriousness of the offense and send a message that you can’t dip into the public till and receive probation if you’re caught.”
This case was investigated by the Tennessee Bureau of Investigation; the FBI; the District Attorney’s Office for the 19th Judicial District; and the DOJ Office of Inspector General. Assistant U.S. Attorney Thomas J. Jaworski is prosecuting the case.
Former Maryland Businessman Sentenced to Prison for Fraudulent $7 Million Bond Scheme and Filing a False TaxRead the Press Release
A Hampton Bays, New York man was sentenced today to 63 months in prison followed by three years of supervised release, for securities fraud and filing a false tax return.
Wilfred T. Azar, III, 54, formerly of Queenstown, Maryland, was sentenced by U.S. District Judge William D. Quarles Jr, who also entered an order that Azar must perform 100 hours of community service while on supervised release, and pay restitution in the amount of $7,219,362 to the victim investors and $469,936 to the IRS.
The sentence was announced by Acting Deputy Assistant Attorney General Bruce M. Salad of the Department of Justice’s Tax Division; U.S. Attorney Rod J. Rosenstein of the District of Maryland; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Washington, D.C. Field Office and Special Agent in Charge Kevin Perkins of the FBI’s Baltimore Division.
In 1999, Azar became president and majority owner of Empire Corporation and exercised complete control over the operations of Empire. Empire Corporation owned Empire Towers Corporation. Empire Towers Corporation’s primary asset was Empire Towers, a 10-story office building in Glen Burnie, Maryland.
According to Azar’s plea agreement and court documents, by January 2006, Empire Corporation could no longer pay its expenses and was effectively insolvent. By 2007, Empire Towers Corporation had exhausted its lines of credit from lending institutions.
From January 2006 to April 2010, Azar caused Empire Corporation to sell bonds to 64 individual investors for more than $7 million. While many of the bonds were titled “registered,” the bonds were not registered with either the U.S. Securities and Exchange Commission (SEC) or the state of Maryland. In addition, Azar falsely told investors that Empire Corporation was in good financial health and that the company generated enough revenue to pay the promised 10 percent annual rate of return. Azar falsely represented that the money invested would be used for a specific renovation project or other capital improvement at the Empire Towers office building. Azar failed to inform investors that he used most of the money raised from previous bond sales for his own personal purposes. Although the bonds were issued by Empire Corporation, Azar diverted millions of dollars of proceeds from the bond sales to his own bank account and the bank accounts of other companies that he controlled.
During the period of the fraud, Azar misappropriated approximately $7,219,362 in investor proceeds raised through the sale of bonds. Azar used the bond proceeds: to purchase a $100,000 Aston Martin luxury automobile, to pay the $3,000 monthly mortgage on his primary residence, to pay $51,000 to an Azar trust, to purchase Baltimore Ravens season tickets for $17,298 and to pay $25,389 in country club dues. In addition, Azar charged over $420,000 to a credit card paid by Empire Management Services, including daily living expenses, lavish vacations and university tuition for one of his children. Azar also diverted more than $1.07 million in Empire funds as “loans” to other unrelated businesses he controlled which were never repaid and another $3.31 million to make lulling payments.
Finally, Azar failed to report approximately $1,959,250 of embezzled income on his 2009 tax return, thereby avoiding $469,936 in federal income taxes.
The SEC has also filed a complaint against Azar and another individual in connection with the scheme and that case is pending.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’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, visit www.stopfraud.gov.
Acting Deputy Assistant Attorney General Salad and U.S. Attorney Rosenstein praised the IRS-CI, FBI and SEC for their work in the investigation. Acting Deputy Assistant Attorney General Salad and U.S. Attorney Rosenstein thanked Assistant U.S. Attorney Martin J. Clarke and Trial Attorney Kenneth C. Vert of the Justice Department’s Tax Division, who prosecuted the case.
Former Dance Instructor Pleads Guilty to Interstate Travel to Engage in Illicit Sexual ConductRead the Press Release
PROVIDENCE, R.I. – Keith Sampson, 37, formerly of Providence, RI, pleaded guilty in federal court in Providence today to interstate travel to engage in illicit sexual conduct, admitting to the court that in December 2007 he transported one of his dance studio students, a fifteen-year-old girl, from Rhode Island to Easton, Mass., for the purpose of engaging in illicit sexual conduct, announced United States Attorney Peter F. Neronha and Harold H. Shaw, Special Agent in Charge of the Boston Field Office of the FBI.
According to court documents and information presented to the court, on December 29, 2007, the girl had been left in Sampson's care by her mother on the pretense that she would be spending the night at Sampson's Providence residence in the company of his wife and child. Instead, Sampson admitted to the court that he drove the victim to the home of a relative in Easton, Mass., where he provided the victim with alcohol and then sexually assaulted her.
According to court documents, the assault of the fifteen-year-old victim occurred while Sampson was awaiting trial in Massachusetts state court on two counts of statutory rape of a child in an unrelated matter. In that case, on January 10, 2008, a jury found Sampson guilty of one count of statutory rape. He was sentenced in February 2008 to serve not less than four and not more than seven years' imprisonment in Massachusetts state prison as a result of this conviction.
Additionally, based on the December 29, 2007, assault of his dance studio student, Sampson was indicted and charged in Massachusetts state court with rape of a child with force and providing liquor to a person under 21. He pleaded guilty to the charges on November 14, 2011, and was sentenced to not less than two-and-a-half and not more than three years' imprisonment, to be served consecutively to the sentence he received as a result of his January 2008 conviction.
In total, Sampson served approximately seven years in prison in Massachusetts. Upon his release from Massachusetts state prison, Sampson was placed in federal custody and brought to Rhode Island to face charges in U.S. District Court in Providence brought as a result of the December 2007 assault.
Sampson is scheduled to be sentenced by U.S. District Court Chief Judge William E. Smith on January 29, 2016.
The case is being prosecuted in federal court in Providence by Assistant U.S. Attorneys Richard W. Rose and Zachary A. Cunha.
The matter was investigated by the FBI, with the assistance of the Warwick, Rhode Island, and Easton, Massachusetts, Police Departments.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
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Former Cleveland resident charged with tax fraudRead the Press Release
A 13-count indictment charging a former Cleveland woman with tax fraud, obstruction and related charges was unsealed, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Troy Stemen, Acting Special Agent in Charge, Criminal Investigation, Cincinnati Field Office.
Lerona Renay Shelton, 46, of Birmingham, Alabama, pleaded not guilty at his arraignment. Shelton is charged wtih conspiracy to defraud the United States, six counts of aiding and abetting tax returns, obstruction of an official proceeding, four counts of making false statements and one count of perjury.
Shelton in 2010 obtained taxpayer names, addresses and W-2 forms that claimed false employments, wages and taxes withheld. Shelton sent this information to Sean Houston, of Cleveland, who prepared and submitted false tax returns to the IRS, according to the indictment.
Shelton was questioned in the Grand Jury about his activities with Houston and gave answers that he knew to be false, according to the indictment.
Houston pleaded guilty on April 13, 2015 to one count of conspiracy to file false claims for income tax refunds with the IRS and 10 counts of filing false claims for income tax refunds with the IRS. He is scheduled to be sentenced on November 24, 2015.
Another related defendant, Nikita Griffin, pleaded guilty on April 14, 2015 to one count of conspiracy to file false claims for income tax refunds with the IRS. She is scheduled to be sentenced on November 19, 2015.
The case is being prosecuted by Assistant U.S. Attorney James V. Moroney following an investigation by IRS-CI.
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.