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6 November 2015
Three San Francisco International Airport Security Screeners Charged with Fraud and Smuggling DrugsRead the Press Release
SAN FRANCISCO – Three San Francisco International Airport security screeners have been arrested on charges of defrauding the government and smuggling cocaine, announced Acting United States Attorney Brian J. Stretch, Drug Enforcement Administration Special Agent in Charge John J. Martin, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Transportation Security Administration Office of Inspection Special Agent in Charge Regan Fong. A federal indictment charging the three individuals with fraud and drug smuggling was unsealed yesterday.
The three defendants named in the indictment were employees of Covenant Aviation Security (CAS), a private company that contracts with the Transportation Security Administration (TSA) to provide security screening services at San Francisco International Airport (SFO). The defendants are Joseph Scott, 35, of Vallejo, a former Supervisory Transportation Security Officer for CAS; Michael Castaneda, 32, of Daly City, a former Lead Transportation Security Officer for CAS; and Jessica Scott, 27, of San Pablo, a current Supervisory Transportation Security Officer for CAS.
The indictment alleges that the three defendants conspired to use their positions as Transportation Security Officers to allow passengers to smuggle real and simulated cocaine through airport security checkpoints. The defendants all were assigned to SFO. The defendants arranged for passengers carrying narcotics in their carry-on luggage to pass through the x-ray machine at a security checkpoint line without adequately screening the luggage for explosives, incendiaries, weapons, or other threats to security. Through the use of confidential sources and undercover agents, law enforcement discovered that defendants made these arrangements for a fee on five occasions between May 2013 and April 2014.
The indictment further alleges that, once the passenger carrying drugs or simulated drugs arrived at the security checkpoint lane, s/he was directed or escorted to a particular security line. On that line, one of the defendants was either operating or overseeing the operation of the x-ray machine. The defendant operating or overseeing the x-ray machine either knew the carry-on baggage contained narcotics, viewed images that suggested the need for secondary inspection, or both. Nevertheless, in each instance, the defendant responsible for the x-ray machine failed to call for a secondary screening of the baggage or alert law enforcement or a supervisor to the presence of suspected narcotics. In each case, the drugs and simulated drugs were smuggled as part of undercover operations performed by the Drug Enforcement Administration and TSA-Office of Inspection designed to determine the scope and nature of the conspiracy.
All three defendants are charged with two counts. The first count is conspiring to defraud the TSA by obstructing a lawful government function, in violation of 18 U.S.C. § 371. Violation of this statute carries a maximum term of imprisonment of five years and a maximum fine of $250,000. The second count is conspiring to distribute and possess with intent to distribute more than five kilograms of cocaine, in violation of 21 U.S.C. §§ 846 and 841. Violation of this statute carries a mandatory minimum of ten years, a maximum sentence of life imprisonment, and a maximum fine of $10 million.
An indictment contains only allegations. Jessica Scott, Joseph Scott, and Michael Castaneda, as with all defendants, must be presumed innocent unless and until proven guilty. In addition, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The indictment was unsealed on November 5, 2015, after all three defendants were arrested and appeared before U.S. Magistrate Judge Laurel Beeler. Joseph Scott and Jessica Scott were released today, each subject to a $50,000 bond. Michael Castaneda remains in federal custody and is scheduled to appear for a detention hearing Monday, November 9, 2015, before Magistrate Judge Beeler.
Assistant U.S. Attorneys Adam Wright and Marc Price Wolf are prosecuting the case with the assistance of Amanda Martinez, Rawaty Yim, Jacquelyn Lovrin, and Yanira Osorio. The investigation has involved officers and agents from the Drug Enforcement Administration, Federal Bureau of Investigation, the TSA Office of Inspection, San Francisco Police Department, and the Oakland Police Department.
This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.
Three Albuquerque Businessmen Sentenced to Probation for Federal Tax Fraud ConvictionsRead the Press Release
ALBUQUERQUE – Three brothers, all naturalized U.S. citizens from Armenia, were sentenced to terms of probation this morning in Albuquerque, N.M., for conspiring with each other to defraud the United States of corporate income tax due and owing from their jointly owned business, announced U.S. Attorney Damon P. Martinez and Ismael Nevarez, Jr., Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Hrant Kostanian, 51, Hrair Kostanian, 56, and Gayk Kostanian, 60, were each sentenced to a five-year term of probation. The brothers also were ordered jointly to pay $263,600.00 in restitution to the IRS, the amount of corporate income taxes they jointly evaded. In addition, the three brothers were ordered individually to pay restitution to the IRS as follows for evading personal income taxes: Hrant Kostanian, $33,312.00; Hrair Kostanian, $20,386.00; and Gayk Kostanian, $16,059.00. In addition to the restitution payments, Hrant Kostanian and Hrair Kostanian each were ordered to pay fines in the amount of $15,810.65.
The three brothers were indicted on Sept. 23, 2014, and charged with one count of conspiracy and four counts of tax evasion. Count 1 of the indictment charged the three brothers with conspiracy to defraud the United States of corporate taxes owed on income generated by Pro Billiards, Inc., a New Mexico corporation jointly owned by the brothers that does business as “Billiards Palace” in northeast Albuquerque. The conspiracy count also alleges that the Kostanians also evaded personal income tax due and owing on their personal incomes. The brothers are charged with evading approximately $263,600.00 in corporate taxes during tax years 2007, 2008, 2009 and 2010. More specifically, the Kostanians evaded federal taxes owed by their business by underreporting their income as follows:
Count 2 charges the Kostanians with evading $58,834.00 in federal taxes by falsely claiming that their business had $694,293.00 in taxable income in 2007 when in fact it had $906,003.00 in taxable income that year. Count 3 charges the brothers with evading $25,521.00 in federal taxes by falsely claiming that their business had $624,034.00 in taxable income in 2008 when in fact it had $773,289.00 in taxable income that year. Count 4 charges them with evading $33,810.00 in federal taxes by falsely claiming that their business had $543,224.00 in taxable income in 2009 when in fact it had $684,694.00 in taxable income that year. Count 5 charges the Kostanians with evading $10,485.00 in federal taxes by falsely claiming that their business had $476,439.00 in taxable income in 2010 when in fact it had $773,289.00 in taxable income that year.
According to the indictment, the Kostanians perpetuated their fraud against the United States by maintaining false books and records for their business in order to conceal their actual corporate income. The brothers presented the false books and records to their corporate accountant, which caused their accountant to file false corporate income taxes with the IRS. The indictment also stated that the Kostanians diverted the unreported income to their own personal use and maintained a separate accounting ledger that showed their business’s actual income.
On May 6, 2015, the Kostanians each entered a guilty plea to Count 1 of the indictment. In their plea agreements, the brothers admitted conspiring with each other to defraud the United States by obstructing the IRS’s ability to collect corporate income taxes owed by their business. Each admitted that they maintained false books and records that they presented to their corporate accountant for use in preparing the business’s income taxes for 2007, 2008, 2009 and 2010. They also admitted maintaining a separate accounting ledger that showed their business’s actual income. The conspiracy was discovered in Jan. 2011 and Feb. 2011, when Hrair Kostanian and Gayk Kostanian discussed the prospect of selling the business with undercover IRS agents and revealed that the business generated more income than reflected on the business’s corporate tax returns. On Feb. 23, 2011, Hrair and Gayk Kostanian showed the undercover IRS agents documents that detailed the business’s additional, unreported income.
In their plea agreements, all three brothers admitted that they evaded an aggregate of $263,600.00 in federal corporate taxes for tax years 2007 through 2010, by intentionally understating their business’s income. In addition, each of the Kostanians admitted evading his own taxes during that same period by understating his personal income. To that end, Hrant Kostanian admitted evading $33,312.00 in individual taxes; Hrair Kostanian admitted evading $20,386.00 in individual taxes; and Gayk Kostanian admitted evading $16,059.00 in individual taxes.
This case was investigated by the Albuquerque office of IRS Criminal Investigation and was prosecuted by Assistant U.S. Attorney Reeve L. Swainston.
Tenth Circuit Court of Appeals Affirms Bribery Conviction of Michael Morgan, Former President Pro Tem of Oklahoma State SenateRead the Press Release
Oklahoma City, Oklahoma - The Tenth Circuit Court of Appeals today issued an order affirming the bribery conviction of former Oklahoma State Senate President Pro Tem Michael Steven Morgan, of Stillwater, Oklahoma, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, the appellate court remanded the case to the district court for resentencing.
"We are pleased with the Tenth Circuit’s detailed and thorough review of all appellate issues and their conclusions that Senator Morgan received a fair trial, that the jury’s guilty verdict was supported by the evidence, and that a new sentencing hearing is warranted," said U.S. Attorney Coats. "As I have said since the day this case was charged, the sale of political influence by an elected official is simply not acceptable and corruption betrays the public trust. We look forward to the re-sentencing of this case."
Reference is made to the attached Order and Judgment by the Tenth Circuit Court of Appeals.
10th_cir_opinion.11.6.15.pdf (267.56 KB)
Straw Purchaser of Gun Used in Multiple D.C. Shootings SentencedRead the Press Release
ALEXANDRIA, Va. – Lawrence Monte Morgan, 24, of Waldorf, Maryland, was sentenced today to one year and one day in prison, followed by two years of supervised release, for his role in the illegal purchase of 12 guns, including one gun that was used in multiple shootings in Washington, D.C.
“Prosecuting straw purchasers is essential because of the critical role these purchasers play in enabling the unlawful possession and use of guns,” said U.S. Attorney Dana J. Boente. “Prohibited individuals who cannot buy guns, including convicted felons, rely on staw purchasers to buy the guns for them. Often times the guns then end up in the hands of dangerous individuals and are used in other crimes, as in this case.”
“Illegal firearms trafficking is one of the most dangerous activities confronting our nation today,” said Charles E. Smith, Special Agent in Charge of the Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division. “It is through the bravery, skill, and dedication of our agents that these traffickers are brought to justice and the illegal firearms trade currently plaguing the DC Metro region is abated.”
Morgan pleaded guilty on Aug. 3, 2015. According to court documents, during August 2014, Morgan, along with co-defendant Jamal Baker, purchased 12 guns from various federal firearms dealers within the Eastern District of Virginia. At the time of each of these purchases, Baker completed a firearms transaction form that asked, “Are you the actual transferee/buyer of the firearm(s)?” Baker knowingly lied when he answered “Yes” on the form, because he was unlawfully acquiring the guns for others, not for himself. Morgan aided and abetted Baker’s false statements by, among other things, accompanying Baker to firearms dealers to help select guns for purchase, reimbursing Baker for the purchases, finding buyers for and reselling the guns, and providing Baker with a share of the profits from the resale of the guns to other buyers. Law enforcement has since recovered several of the guns that Morgan and Baker purchased in August 2014, including one gun that was used in multiple shootings in Washington, D.C.
Baker was sentenced to one year and one day in prison on Oct. 15, 2015.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorney Tobias Tobler prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-219.
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Stratford Man Charged with Trafficking Meth and Heroin, Illegally Possessing FirearmsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that MARK LEIGH-JAMES, also known as “Rich,” 23, of Stratford, has been indicted on narcotics trafficking and firearm possession offenses.
This matter stems from an investigation headed by the DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force and Fairfield Police Department. As alleged in court documents, in July and August 2015, Fairfield Police made four controlled purchases of a total of approximately 58 grams of methamphetamine from LEIGH-JAMES. In August and September 2015, Fairfield Police and the DEA Task Force made two additional controlled purchases of a total of approximately 187 grams of methamphetamine from LEIGH-JAMES.
October 5, 2015, LEIGH-JAMES was arrested on federal criminal complaint. At the time of his arrest, LEIGH-JAMES was carrying a backpack that contained approximately 7.5 grams of heroin. A subsequent search of LEIGH-JAMES’ vehicle revealed a second backpack containing approximately 120 grams of methamphetamine, a loaded .380 semi-automatic handgun and a loaded .44 magnum revolver.
On October 14, 2015, a federal grand jury in Bridgeport returned a nine-count indictment charging LEIGH-JAMES with two counts of possession with intent to distribute, and distribution of, 50 grams or more of methamphetamine, and one count of possession with intent to distribute 50 grams or more of methamphetamine. These charges carry a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.
The indictment also charges LEIGH-JAMES with four of possession with intent to distribute, and distribution of, methamphetamine, one count of possession with intent to distribute heroin, and one count of possession of a firearm in furtherance of a drug trafficking crime. If convicted of the firearm offense, LEIGH-JAMES faces a mandatory consecutive term of imprisonment of five years.
LEIGH-JAMES has been detained since his arrest.
This matter is being investigated by the DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force and the Fairfield Police Department. The Task Force includes personnel from the DEA, Connecticut State Police, Norwalk Police Department, Stamford Police Department, Stratford Police Department and Milford Police Department. The case is being prosecuted Assistant U.S. Attorney Amy C. Brown.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
St. Thomas Man Indicted on Drug Trafficking ChargesRead the Press Release
St. Thomas, USVI – A federal grand jury returned a one-count indictment on November 5, 2015, charging Kasimir Asim McClean, 37, of St. Thomas with possession with intent to distribute a controlled substance, United States Attorney Ronald W. Sharpe announced today.
McClean was arrested on September 26, 2015 and released pending trial. He is awaiting arraignment and advise of rights on the indictment.
According to the indictment and court documents, McClean was a passenger on a Delta Airlines flight arriving at the Cyril E. King Airport on St. Thomas from Atlanta, Georgia, when U.S. Customs and Border Protection agents, with the assistance of a canine, found approximately five kilos of marijuana in his luggage.
United States Attorney Sharpe reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty.
This case is being investigated by the Department of Homeland Security Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), and is being prosecuted by Assistant United States Attorney Everard E. Potter.
Spirit Lake Man Found Guilty of Aggravated Sexual Abuse of a MinorRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on Oct. 5, 2015, Jay Littlewind Sr., 41, Tokyo, North Dakota, was found guilty of Aggravated Sexual Abuse of a Child following a three-day trial.
The jury found that Littlewind knowingly engaged in a sexual act with a child who had not attained the age of 12 years. Evidence presented at trial showed that on or about January 25, 2008, through February 13, 2008, Littlewind committed a sexual act on the child as she lay sleeping in her mother’s bed; her mother was at work at the time of the offense.
U. S. District Judge Ralph R. Erickson ordered that a presentence investigation be completed and that Littlewind remain in custody. Judge Erickson scheduled a sentencing hearing for Jan. 28, 2016, at the U. S. District Court, Fargo, North Dakota. Littlewind faces a mandatory minimum of not less than 30 years in prison.
This case was investigated by the Federal Bureau of Investigation.
Assistant U. S. Attorney is Janice Morley prosecuting the case.
Six Persons Charged with Obtaining 2.7 Million in Fraudulent Tax Refunds from the IRSRead the Press Release
LAS VEGAS, Nev. – Six persons have been charged with conspiracy, fraud, filing false claims, and aggravated identity theft, for using the information of deceased persons to file false tax returns so they could obtain millions in fraudulent IRS tax refunds, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Andrew Hanzelic, 45, of Las Vegas, Kelly Coyan, 53, of Lenexa, Kan., Brian Summers, 32, of Las Vegas, Ronald Kelly, 40, of Las Vegas, Clint Tarrant, 54, of Las Vegas, and Terry Williamson, 59, of Las Vegas, are each charged in a criminal indictment with one count of conspiracy to commit mail fraud and wire fraud. Hanzelic, Coyan, Summers and Kelly, are also charged with false claims and aggravated identity theft, and Tarrant is also charged with theft of government funds.
“A major priority of the Department of Justice is prosecuting people who use stolen identities to steal money from the United States Treasury by filing fake tax returns that claim substantial tax refunds,” said U.S. Attorney Bogden. “Working to stop Stolen Identity Refund Fraud, or SIRF, is vital because these schemes threaten to disrupt the orderly administration of our income tax system for hundreds of thousands of law abiding taxpayers and have cost the United States Treasury billions of dollars.”
According to the indictment, the defendants allegedly used the personal identifiers of deceased victims to file false tax returns and obtain fraudulent tax refunds from the U.S. Treasury. Hanzelic allegedly obtained information of deceased persons, including their dates of birth, last known addresses, and Social Security numbers, from various online genealogical databases and provided it for a fee to the co-schemers. The co-schemers then made or caused to be made fraudulent Nevada driver’s licenses, Social Security cards and W-2’s in the names of the victims and used the false identities to file the fraudulent tax returns with the IRS. The defendants used several bank accounts and debit cards to receive the refunds. Defendants Hanzelic and Williamson managed the accounts and paid the co-schemers a salary from the bank accounts they controlled. The defendants allegedly obtained more than $2.7 million in fraudulent tax refunds using this scheme.
Defendants Hanzelic and Summers pleaded not guilty to the charges and are currently in federal custody pending trial.
Defendant Williamson is scheduled for an initial court appearance and arraignment at 3:00 p.m. today before U.S. Magistrate Judge Cam Ferenbach.
Defendant Coyan is scheduled for an arraignment next Tues., Nov. 10, at 3:00 p.m. before U.S. Magistrate Judge Nancy J. Koppe.
Defendants Kelly and Tarrant are not yet in federal custody on the charges.
If convicted, the defendants face up to 20 years in prison and $250,000 in fines on the conspiracy charge, up to five years in prison and $250,000 in fines on each false claims charge, two years in prison, which must run consecutive to the other counts, and $250,000 in fines on the aggravated identity theft charges, and up to 10 years in prison and $250,000 in fines on each theft of government property count.
The case is being investigated by IRS Criminal Investigation, and prosecuted by Assistant U.S. Attorneys Kathryn C. Newman and Kimberly M. Frayn.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.com.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Six Convicted on Business Opportunity Fraud ChargesRead the Press Release
Verdict Brings Total of 22 Individuals Convicted in Scheme
A jury in Central Islip, New York, convicted six men yesterday on felony charges of conspiracy and fraud in the sale of candy vending machine business opportunities, the Department of Justice announced.
Edward Morris “Ned” Weaver, 42, of Perrysburg, Ohio, and Lawrence A. Kaplan, 57, of Brooklyn, New York, were convicted of conspiracy, six counts of fraud and one count each of making false statements to federal agents during a related criminal investigation. Scott M. Doumas, 43, of East Setauket, New York, was convicted of one count of conspiracy and one count of mail fraud. Richard R. Goldberg, 43, of Bay Shore, New York, and Richard Linick, 73, of Coram, New York, were each convicted of conspiracy and one count of wire fraud. Paul E. Raia, 64, of Brookhaven, New York, was convicted of conspiracy and two counts of wire fraud.
The convictions followed a six-week trial before U.S. District Court Judge Joan M. Azrack in federal court in the Eastern District of New York. Each of the defendants faces a statutory maximum sentence of 10 years in prison on the conspiracy count and 25 years in prison on the fraud counts. Weaver and Kaplan face a statutory maximum sentence of five years in prison on the false statements charges.
“These defendants promised their victims the American dream, but knew that what they in fact were offering was a worthless business opportunity,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to prosecute those who seek to scam out of everyday Americans the hard-earned money in their retirement accounts and life savings.”
According to evidence presented at trial, managers, sales representatives and operators of “locating companies” associated with Multivend LLC, d/b/a Vendstar, made material misrepresentations about the profits customers would make from bulk candy vending machines. During the telemarketing calls, Vendstar’s sales representatives falsely claimed to operate their own profitable vending machine businesses.
Additional evidence at trial described how Vendstar advertised nationwide in newspapers and on the Internet. Vendstar sales representatives promised to provide consumers with everything they needed to operate a successful business, including vending machines, an initial supply of candy, assistance in finding locations for the vending machines, training and ongoing customer assistance. The locating companies who worked with Vendstar to close deals had no special skills, tools or expertise in finding locations and generally placed consumers’ machines wherever they could as quickly as they could, often in businesses that had not consented to housing the machines and that soon demanded that the machines be removed. The vending machines generated little business and Vendstar’s customers lost all or nearly all of their investments. The typical customer paid about $10,000 for the business opportunity.
Prior to this trial, 16 other Vendstar managers, Vendstar sales representatives and locating company operators pleaded guilty to federal felony charges for related conduct at Vendstar. Evidence presented at trial established that from 2005 to 2010, the Vendstar scheme cost consumers $60 million.
Principal Deputy Assistant Attorney General Mizer commended the U.S. Postal Inspection Service for their investigative efforts. The case was prosecuted by Trial Attorneys Patrick Jasperse and Alan Phelps of the Civil Division’s Consumer Protection Branch.
Silk Road Drug Dealer Sentenced to 9 Years in Federal PrisonRead the Press Release
SACRAMENTO, Calif. — Matthew Luke Gillum, 32, of Meadow Vista, was sentenced today by United States District Judge Morrison C. England Jr. to nine years in prison for conspiring to distribute marijuana and avoiding a currency transaction reporting requirement, United States Attorney Benjamin B. Wagner announced.
According to court documents, Gillum, was the leader of a drug trafficking organization (DTO) that operated in the greater Sacramento area. The Gillum DTO shipped marijuana through the United States mail to various locations outside of California. In order to conduct his drug trafficking operation, Gillum solicited, hired, and utilized the services of at least five individuals to open post office boxes, collect drug trafficking proceeds, ship marijuana parcels, manufacture and supply marijuana, and facilitate the clandestine communications of the DTO.
The Gillum DTO solicited marijuana orders via the Silk Road website. Marijuana purchasers shipped cash payments to various post office boxes controlled by the Gillum DTO throughout the Sacramento region. Once payment was received, the Gillum DTO would ship the selected type and quantity of marijuana to the purchaser. Between August 2012 and July 2013, the Gillum DTO distributed at least 600 pounds of marijuana, much of it through Express Mail parcels sent from the Sacramento region to 16 different states. During the course of the investigation, the United States seized over $700,000 from a bitcoin account controlled by Gillum.
On February 27, 2013, Gillum purchased a diamond ring from Tiffany and Co. for $105,900 in cash. Because the transaction involved more than $10,000 in cash, Tiffany was required to file an IRS Form 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business) in Gillum’s name. However, although Gillum paid for the ring, he used a nominee to fill out the paperwork as if the nominee purchased the ring.
This case was the product of an investigation by the United States Postal Inspection Service, the Internal Revenue Service-Criminal Investigation, the Sacramento County Sheriff’s Office, the Central Valley HIDTA Task Force, CAL-MET, Placer County Special Investigations Unit, and Rocklin Police Department. Assistant United States Attorneys Justin Lee and Kevin Khasigian prosecuted the case.
Shiprock Man Sentenced to Ten Years for Discharging Firearm While Assaulting Four Indian Women and Two ChildrenRead the Press Release
ALBUQUERQUE – Jeffrey J. Franklin, 31, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced yesterday afternoon in federal court in Albuquerque, N.M., to 120 month in prison followed by three years of supervised release for violating the federal firearms laws by discharging a firearm during an act of violence.
Franklin was arrested in Aug. 2014, on a criminal complaint charging him with assault with a dangerous weapon and abusing a child by placing the child in a situation that could endanger the child’s life. The complaint alleged that Franklin committed these crimes on Aug. 9, 2014, on the Navajo Indian Reservation in San Juan County, N.M. According to the complaint, on Aug. 9, 2014, Franklin assaulted four Indian women and two Indian children by firing shots while inside the residence of one of the victims and by firing shots at the victims’ vehicles. Two children were inside one of the vehicles when Franklin shot at the vehicle.
Franklin was subsequently indicted on Nov. 19, 2014, and charged with four counts of assault with a dangerous weapon with intent to do bodily harm, negligently placing minors in a situation that endangered the children’s health, and two counts of using and discharging a firearm during and in relation to a crime of violence.
On Aug. 5, 2015, Franklin pled guilty to one count of using and discharging a firearm during and in relation to a crime of violence.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorneys Novaline D. Wilson and Kyle T. Nayback prosecuted the case.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Seven Montgomery Residents Arrested for Their Involvement in a $290k Check Cashing RingRead the Press Release
Montgomery, Ala. – Seven Montgomery residents were arrested after being indicted by a grand jury for their involvement in a fraudulent check cashing ring being operated out of a Montgomery Wal-Mart store announced U.S. Attorney George Beck from the Middle District of Alabama. The seven individuals arrested were: Courtney Deon Gardner, 25; Audrey Valisha Porterfield, 43; Joye Nicole Perdum, 30; Tamala Caprice Avery, 34; Tocory Dewayne Washington, 31; Brittney Kae Ball, 32; and Joshua Jerome Bean, 25. The individual arrests took place on a variety of dates. The earliest occurred on October 15, 2015, and the final arrest was on November 4, 2015.
According to court documents, Gardner, Porterfield, and Ball worked as tellers in the money center of the Wal-Mart store located on Ann Street in Montgomery. Through their positions, these defendants cashed stolen or fraudulent United States Treasury checks for the other members of the scheme—Washington, Bean, Perdum, and Avery. The seven would then share the proceeds of the fraudulently cashed checks. The investigation revealed that the scheme resulted in a loss of approximately $290,000.00 to the victims—including the United States Government and Wal-Mart Stores, Inc.
An indictment merely alleges that crimes have been committed and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Each defendant was indicted for conspiracy and theft of government property charges which carry a maximum sentence of 10 years imprisonment if convicted. Washington and Bean were also charged with aggravated identity theft offenses and face up to an additional six years in prison if they are convicted.
The case was investigated by the United States Secret Service and the Montgomery Police Department. Assistant United States Attorney Jonathan S. Ross is prosecuting the case.
Seminar Spokesman Who Claimed to Be Trillion-Dollar Philanthropist Sentenced for Defrauding Investors Out of MillionsRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – November 6, 2015
San Diego, CA - William Ison, who recruited investors by making bogus claims during presentations at financial seminars throughout the United States, was sentenced today to 27 months in custody for defrauding investors, including several from San Diego, of approximately $7 million. U.S. District Judge Dana M. Sabraw also ordered Ison to pay back victim losses as restitution.
Ison previously admitted making fraudulent presentations to potential investors to persuade them to invest in “private placement programs” with co-defendant Douglas Ellingson (who was previously sentenced to 18 months in custody for his role in the scheme). Ison, who represented he was President of Blue Diamond Excavation, Inc. (“BDE”), a mining excavation company based in Newport Beach, claimed investors’ funds would be secured by the company’s assets worth $86 billion, which he had already used to secure medium-term notes (“MTNs”) valued at over $2 billion. In fact, BDE had not produced any income from mining and had not obtained any MTNs.
In addition to lying to seminar participants that he personally made more than $100 million through an investment program, Ison also falsely claimed he managed a consortium of large non-profit foundations that donated more than a trillion dollars annually to various humanitarian causes. Many victims reported they were induced to participate in the scheme only because of Ison’s promises that a portion of profits would go to successful charities that eradicated poverty and developed a cure for AIDS.
Ison and Ellingson, who together were responsible for over $10 million in victims’ losses, initially participated in a scheme involving the Winsome Investment Trust, with James Pantazelos and Robert Andres. Both Pantazelos and Andres were prosecuted for their roles in related fraud schemes. Pantazelos was sentenced in Chicago to 114 months in custody and ordered to pay over $3.3 million in restitution on February 15, 2013 (United States v. Pantazelos, No. 11CR50078 (N.D. Ill. 2011)). Andres was sentenced in Utah to 56 months in custody and ordered to pay over $3.2 million in restitution (United States v. Andres, No. 11CR0985-RJS (D. Utah 2011).
Judge Sabraw noted that the victims were injured in “immeasurable ways” as a result of Ison’s intentional misrepresentations that he knew would cause smart people to part with a lot of money, including from withdrawals of college and retirement savings.
U.S. Attorney Laura Duffy said, “Although we are comforted that these defendants can no longer target citizens in fraudulent get-rich-quick schemes under the guise of humanitarian charity, we understand there is no shortage of con men who seek to separate people from their savings. Thankfully, the FBI and IRS will maintain their vigilance for such scams.”
“Today’s sentencing marks the successful end of an investigation that uncovered an investment fraud scheme laced with a web of financial lies that generated millions of dollars through false promises and deceit,” said Special Agent in Charge Erick Martinez of IRS-Criminal Investigation. “Ison took advantage of unsuspecting investors for purported humanitarian causes. Hopefully he will now understand that his irresponsible actions have real consequences.”
DEFENDANT Case Number: 12CR4030-DMS
William Ison Age: 55
SUMMARY OF CHARGE
Title 18, United States Code, Sections 371, 1343 (Wire Fraud Conspiracy)
Maximum penalty: 5 years of custody; $250,000 Fine (or twice the gross loss of the offense
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
San Antonio Man Sentenced to 135 Years in Federal Prison on Child Pornography ChargesRead the Press Release
In San Antonio this afternoon, a federal judge sentenced 39-year-old Carl Wade Bailes to 135 years in federal prison for production, receipt, possession and distribution of child pornography announced United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, Chief United States District Judge Fred Biery has asked the Government to look into the matter of restitution in this case. During the hearing, Chief Judge Biery stated that Bailes should not retain monies from his military disability or retirement, but that those monies should go to his victims and to possibly cover court costs.
In July, a federal jury convicted Bailes of two counts of production of child pornography, two counts of distribution of child pornography, two counts of possession of child pornography and one count of receipt of child pornography. According to court records and trial testimony, undercover FBI agents in September 2012 discovered numerous files depicting child pornography available for download from a peer-to-peer file sharing program on the Internet. Further investigation identified Bailes as the person responsible for making the child pornography available through the use of his personal computer. On October 22, 2012, FBI agents seized his computer. A subsequent forensics examination of the computer revealed that Bailes had deleted child pornography from his computer including 157 files available for download on September 20, 2012, and 50 files available for download on October 4, 2012. During the investigation, authorities downloaded 31 of those files prior to their deletion. Testimony also revealed that agents were able to recover evidence that Bailes produced images depicting the sexual abuse of two minor females, ages 15 and 6.
“The magnitude of this extraordinary sentence speaks to the depravity of Bailes’ conduct. There is little more that needs to be said about him,” stated United States Attorney Richard L. Durbin, Jr.
“The FBI is committed to protecting children in our community, who are among the most vulnerable and precious in our society,” stated Special Agent in Charge Christopher Combs, FBI San Antonio Division.
This joint investigation was conducted by the FBI and the Bexar County Sheriff’s Office. Assistant U.S. Attorney Tracy Thompson prosecuted this case on behalf of the Government.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Rankin Woman Pleads Guilty in Sex Trafficking SchemeRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, pleaded guilty in federal court to a charge of conspiracy to commit sex trafficking, United States Attorney David J. Hickton announced today.
Kiari Nicole Day, 26, of Rankin, Pennsylvania, pleaded guilty to one count before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, in February 2015, Day knowingly entered into an agreement to conspire to recruit for sex trafficking four female minors who had not attained the age of 18 years.
Judge Arthur J. Schwab scheduled sentencing for Dec. 1, 2015, at 9 a.m. The law provides for a sentence of up to life, a fine of $250,000.00, and a term of supervised release of no more than five years, or any or all. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorneys Jessica Lieber Smolar and Katherine A. King are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation that led to the prosecution of Day.
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.justice.gov/psc/.
Portland Man Sentenced to 11 Years for Crack Conspiracy and DistributionRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Marco Gordon, 34, of Portland was sentenced today to 11 years in prison and five years of supervised release for conspiring to distribute cocaine base, often referred to as crack cocaine, and possession with intent to distribute crack cocaine. He was also ordered to forfeit $4,415. He pleaded guilty to the charges on July 7, 2015.
Court records reveal that between December 2013 and January 2015, Marco Gordon conspired with others, including, Russell Gordon and Robert Joiner, to sell crack cocaine in Portland. Members of the conspiracy would arrange for the acquisition of drugs out of state. Once the drugs were transported to Maine, they were provided to retail distributors, including Marco Gordon, who would sell the drugs in the Portland area, and then return the cash proceeds to Russell Gordon. During the course of the investigation, law enforcement officers conducted controlled purchases of crack cocaine from several members of the conspiracy. Marco Gordon was arrested on January 9, 2015, and found to be in possession of over 180 grams of crack cocaine and over $4,000.
Robert Joiner was previously sentenced to three years in prison. Russell Gordon has entered a guilty plea and awaits sentencing.
This case was investigated by the Southern Maine Gang Task Force, which is comprised of investigators from the Federal Bureau of Investigation; the Portland, South Portland, Biddeford and Lewiston Police Departments; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the U.S. Drug Enforcement Administration. The Maine Drug Enforcement Agency and the Maine State Police also assisted with the investigation.
The case also results from the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Owner of Los Angeles Medical Supply Company Convicted in $4 Million Medicare Fraud SchemeRead the Press Release
A federal jury in Los Angeles convicted a Los Angeles man and owner of a medical supply company today for his role in a $4 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Los Angeles Region and Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office made the announcement.
According to evidence presented at trial, Valery Bogomolny, 43, used his company, Royal Medical Supply, to bill Medicare $4 million between January 2006 and October 2009 for power wheelchairs (PWCs), back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both. The evidence further showed that Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred. Bogomolny personally delivered PWCs to beneficiaries who were able to walk without assistance and signed documents stating that he had delivered equipment when the equipment was not actually delivered. Bogomolny ultimately received $2.7 million from Medicare on these false claims.
A sentencing hearing is scheduled for Feb. 29, 2016, before U.S. District Judge S. James Otero of the Central District of California, who presided over the trial.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section. Trial Attorneys Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section are prosecuting this case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 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 the 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 Team (HEAT), go to: www.stopmedicarefraud.gov.
Orlando Man Sentenced for Stolen Identity Refund Fraud and Aggravated Identity TheftRead the Press Release
Orlando, FL – United States District Judge Paul G. Byron has sentenced Michael Carvalho to five years and five months in federal prison for theft of government property and aggravated identity theft. He was also ordered to pay a money judgment in the amount of $2,223,083.44, representing the amount of illicit proceeds gained from the theft, and forfeit the contents of three JPMorgan Chase accounts and real properties located at 2615 S. Goldenrod Road in Orlando and 2045 Shadow Drive in Geneva, Florida.
According to the plea agreement, from approximately October 2011 through September 2013, Carvalho passed or attempted to pass more than 441 federal tax refund checks in excess of $2.9 million at six banks in the Middle District of Florida. The checks were fraudulently obtained and/or contained falsely made or forged endorsements or signatures. Along with others, Carvalho deposited these instruments on 180 different days, over a two-year period. The loss suffered by the government was $2,223,083.44.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Shawn P. Napier.
Norfolk Man Pleads Guilty to Felon in Possession of Ammunition ChargeRead the Press Release
NORFOLK, Va. – Wesley Paul Hadsell, 37, of Norfolk, pleaded guilty today to the charge of being a felon in possession of ammunition.
In a statement of facts filed with the plea agreement, Hadsell admitted that on Dec. 23, 2013, he purchased ammunition at Bob’s Gun Shop in Norfolk. He further admitted that on Dec. 31, 2013, he took that ammunition to a gun range in Chesapeake where he and other individuals utilized some of the ammunition and Hadsell retained possession of approximately 80 rounds of ammunition after the trip to the range. Hadsell also admitted to several prior felony convictions.
Hadsell will be sentenced on March 18, 2016. At sentencing, the Court will determine whether the nature of Hadsell’s prior felony convictions renders him subject to the enhanced penalties pursuant to the Armed Career Criminal Act. If the Court determines that Hadsell is subject to those enhanced penalties, Hadsell faces a minimum penalty of 15 years in prison and a maximum penalty of life in prison. If the Court determines that Hadsell does not meet the criteria of the Armed Career Criminal Act, Hadsell faces a maximum penalty of 10 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Charles E. Smith, Special Agent in Charge of the Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, and Michael Goldsmith, Chief of Norfolk Police, made the announcement after the plea was accepted by U.S. District Judge Arenda L. Wright-Allen. Assistant U.S. Attorney Benjamin L. Hatch is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-116.
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New Orleans Man Charged with Receipt of Child PornographyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOSEPH RIVERA, age 33, of New Orleans was taken into custody today after previously being charged in a one-count Indictment by a federal grand jury with receipt of images and videos depicting the sexual exploitation of children. The Indictment was recently unsealed.
If convicted, RIVERA faces a mandatory minimum of five years imprisonment and a maximum term of imprisonment of twenty years, followed by up to a lifetime of supervised release, and a $250,000 fine per count. RIVERA 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. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
New Haven Man Involved in Drug Robbery Scheme Sentenced to 5 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DONALD GAINES, also known as “Stretch” and “Shorty,” 35, of New Haven, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 60 months of imprisonment, followed by three years of supervised release, for participating in a drug robbery scheme.
This matter stems from “Operation Samson,” a multi-layered initiative headed by the ATF and the Bridgeport and New Haven Police Departments that targeted violent criminals, illegal firearm possession and firearm trafficking. In the spring of 2014, approximately 40 ATF special agents and personnel from Connecticut and across the country were deployed with New Haven and Bridgeport Police to conduct numerous covert operations.
According to court documents and statements made in court, during the operation, an undercover agent and a confidential informant made several controlled purchases of suspected crack cocaine from GAINES. During their contact, the informant asked GAINES if he and anyone he knew would be interested in committing a drug robbery. GAINES stated that he did not want to participate in the robbery itself, but introduced the informant and the undercover agent to Harold Harrington, also known as “Chopper” and “Chapo.” The undercover agent told Harrington that he wanted to hire someone to commit a home invasion robbery of a drug organization’s “stash house” in order to steal six to eight kilograms of cocaine. Harrington agreed to participate and helped plan the robbery, which would include the use of firearms. Harrington also stated that he would bring members of his crew to help commit the robbery.
The undercover agent and Harrington agreed to split the cocaine taken during the robbery, and they agreed to give GAINES one kilogram of the drug for putting the two individuals together.
On March 21, 2014, the day of the proposed robbery, Harrington arrived at the meeting location with Louis Toler, also known as “A.B.” After Harrington, Toler and the undercover agent had a detailed discussion about how the robbery was going to be carried out, Harrington and Toler were arrested. A subsequent search of Toler’s car revealed a loaded firearm.
The informant then called GAINES, told him the robbery had gone smoothly and arranged to meet him to deliver the cocaine. When GAINES arrived at the designated location, he identified the law enforcement surveillance and drove off at a high rate of speed. After a short chase, GAINES crashed his car on an off ramp in West Haven, attempted to flee on foot and was apprehended.
GAINES has been detained since his arrest. On May 5, 2015, he pleaded guilty to one count conspiracy to interfere with commerce by robbery.
Harrington pleaded guilty to one count of conspiracy to interfere with commerce by robbery and, on November 3, 2015, was sentenced to 72 months of imprisonment. Toler pleaded guilty to one count of possession of a firearm by a convicted felon and, on November 4, 2015, was sentenced to 77 months of imprisonment.
This case was prosecuted by Assistant U.S. Attorneys Tracy Dayton and Robert Spector.
Mobridge Man Sentenced for Distribution of MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mobridge, South Dakota, man convicted of Distribution of a Controlled Substance was sentenced on November 2, 2015, by U.S. District Judge Charles B. Kornmann.
Troy Thompson, age 43, was sentenced to 24 months in custody, followed by 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Thompson was indicted by a federal grand jury on February 18, 2015. He pled guilty on June 22, 2015.
The conviction arose from incidents in May and June of 2014, when law enforcement made two controlled buys of methamphetamine from Thompson. During the first buy, Thompson sold 2.22 grams of methamphetamine for $500.00 to a confidential informant. For the second buy, Thompson sold the confidential informant .57 grams of methamphetamine for $200.00. Thompson’s supplier was Aaron Sackreiter. Sackreiter fronted Thompson the methamphetamine, after which Thompson would sell it, and then give the money to Sackreiter. Sackreiter, in turn, would give Thompson some of the money back as payment for selling the methamphetamine. Sackreiter is scheduled to be sentenced on January 4, 2016.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force and the Mobridge Police Department. Assistant U.S. Attorney Jay Miller prosecuted the case.
Thompson will report to the U.S. Marshals Service on November 24, 2015, to begin serving his sentence.
Missouri Man Pleads Guilty to Aiding and Abetting Bank RobberiesRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on November 6, 2015, Marc G. Miller, 53, a resident of St. Louis, MO, pled guilty to an Indictment charging two counts of Bank Robbery. For each count, Miller faces a term in federal prison of not more than twenty years, a fine up to $250,000, or both, and a term of supervised release of not more than five years. Miller will also be ordered to pay restitution to the financial institutions for their losses. Sentencing is scheduled for February 22, 2016, in East St. Louis, Illinois. Miller has been held without bond since his initial appearance in Illinois on July 10, 2015.
According to court documents, the charges arose when Miller aided and abetted his co-defendant when that person robbed two US Banks, located inside of Schnucks grocery stores, in Edwardsville and Fairview Heights, Illinois. The robbery of the US Bank in Edwardsville occurred on January 28, 2015, while the robbery of the US Bank in Fairview Heights occurred on February 10, 2015. Miller allowed the codefendant to use Miller’s vehicle to commit the robberies, and rode with him, as a passenger, to both robberies. Miller would wait in the car during the robberies. Miller was located during the investigation of a bank robbery of a US Bank, located inside a Schnucks grocery store, in St. Peters, Missouri. Miller provided a voluntary, videotaped statement in which he admitted his part in the robberies.
The case was investigated by the Edwardsville, Fairview Heights and St. Peters Police Departments, assisted by Metro-East Forensic Laboratory and the FBI. The case is assigned to Assistant United States Attorney Angela Scott.
Miami Beach Man Sentenced to 7 Years for Financial Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – George Kalivretenos, 59, of Miami Beach, Florida, was sentenced today to 84 months in prison for a wire fraud and money laundering scheme in which he defrauded borrowers of approximately $5.6 million. Kalivretenos was also ordered to pay $4.18 million in restitution as part of his sentence.
Kalivrentenos pleaded guilty on Aug. 13, 2015. According to court documents, Kalivretenos operated and controlled Jasmine Capital and Jasmine Resources Capital Group, which were lending entities. He also owned and controlled two escrow companies, Escrow Services, LLC, and Escrow Title Services, LLC. Kalivretenos promised to lend companies and individuals millions of dollars after they sent a deposit of 10 percent of the loan amount to a third party escrow company. However, Kalivretenos concealed his control over the escrow company from borrowers. Once the escrow company received the borrowers’ deposits, Kalivretenos spent borrowers’ funds on personal expenses, including two Rolls Royces, a penthouse condominium rented at $18,000 per month, and hotel stays at the Ritz Carlton and Crowne Plaza. He also transferred substantial funds to overseas accounts.
In order to cover-up the fraud scheme, Kalivretenos made false representations regarding the status, use of, and reasons for not disbursing escrowed funds to borrowers and law enforcement. For example, on Aug. 20, 2013, Kalivretenos, pretending to be a woman employed at an escrow company, placed a telephone call to a FBI special agent and falsely claimed the escrow company still held a borrower’s escrow deposit. In order to corroborate his lie about the status of the escrow funds, Kalivretenos manufactured a fake bank statement and sent it to the FBI.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorney Uzo Asonye prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-73.
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Men from Oregon and Pennsylvania Sentenced to Federal Prison Terms for Defrauding New Mexico-Based CompanyRead the Press Release
ALBUQUERQUE – Two men were sentenced to federal prison terms yesterday afternoon in Albuquerque, N.M., for participating in a conspiracy to defraud Kinesio USA LLC, a New Mexico-based company that sells therapeutic elastic tape and related products, and its related company, Kinesio Holding Corporation (together, Kinesio).
Johannes Jarvis, 43, of Portland, Ore., was sentenced to 46 months in prison followed by three years of supervised release, and John A. “Jack” Hope, 68, of Huntingdon Valley, Pa., was sentenced to 37 months followed by three years of supervised release. The defendants were ordered to pay restitution to Kinesio USA in the amount of $2,008,450.00. The sentences were announced U.S. Attorney Damon P. Martinez, Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI, and Ismael Nevarez, Jr., Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Jarvis and Hope were charged in an indictment filed on July 11, 2013, with a wire fraud conspiracy and money laundering. The indictment alleged that from late 2007 through April 2010, Jarvis and Hope conspired to defraud Kinesio of approximately $4.3 million, at least $1.2 million of which Jarvis and Hope retained as profits. At the time, Jarvis was the Director of Marketing for Kinesio, and Hope owned a printing business that operated in China that previously had been hired to produce marketing materials for Kinesio.
According to court filings, in 2007, Kinesio began looking for a new manufacturer for its therapeutic elastic tape, and Jarvis suggested searching for a manufacturer in China. Thereafter, Jarvis lied to Kinesio and reported that he had located a suitable manufacturer in China but that Kinesio would have to work through a broker to coordinate the business relationship. In April 2008, Jarvis and Hope incorporated Grace International (HK) Limited (“Grace International”) in Hong Kong, of which they were the sole owners. Jarvis told Kinesio that Grace International was an experienced company, when in reality it had no other clients. Jarvis represented to Kinesio that Grace International would broker the relationship between Kinesio and the tape manufacturer. In their plea agreements, Jarvis and Hope admitted that they concealed their ownership of the company because they knew that Kinesio would not have agreed to use Grace International as a broker if Kinesio had been aware that Jarvis and Hope were involved in it.
Relying on Jarvis’s misrepresentations, Kinesio entered into a contract with Grace International pursuant to which Kinesio paid Grace International to produce therapeutic elastic tape between July 2008 and Jan. 2010. During this period, Jarvis and Hope defrauded Kinesio by having Grace International charge Kinesio a significant undisclosed markup above the manufacturer’s price for the tape, which Jarvis and Hope hid from Kinesio. Jarvis and Hope shared the profits generated by the markup on a 65/35 split with Jarvis getting the larger share. As a means of continuing the deception, Jarvis and Hope sent emails to personnel at Kinesio that purported to be from employees at Grace International. The emails were composed in broken English so as to make it appear that they were written by a native Chinese speaker.
Jarvis and Hope each entered a guilty plea to the conspiracy to commit wire fraud alleged in the indictment. Jarvis entered his guilty plea on May 7, 2014, and Hope entered his guilty plea on May 5, 2014.
This case was investigated by the Albuquerque office of the FBI and IRS Criminal Investigation in Albuquerque and was prosecuted by Assistant U.S. Attorney C. Paige Messec.
Medical Director and Three Therapists Sentenced for Their Roles in $63 Million Miami Health Care Fraud SchemeRead the Press Release
A former medical director and three therapists from defunct health provider Health Care Solutions Network Inc. (HCSN) were sentenced today in Miami for their roles in a scheme to fraudulently bill Medicare and Florida Medicaid more than $63 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Miami Regional Office made the announcement.
Roger Rousseau, 73, of Miami, the former medical director of HCSN in Florida, was sentenced by U.S. District Judge Robert N. Scola of the Southern District of Florida to 192 months in prison. Therapist Liliana Marks, 49, of Homestead, Florida, was sentenced to 72 months in prison. Therapists Doris Crabtree, 63, of Miami, Angela Salafia, 68, of Miami Beach, Florida, were each sentenced to 60 months in prison. In addition to their terms of imprisonment, each defendant was sentenced to three years of supervised release. Restitution will be determined at a hearing on Jan. 15, 2016.
On Aug. 24, 2015, following a two-week trial, the jury convicted all four defendants of conspiracy to commit health care fraud. Rousseau was additionally convicted of two counts of health care fraud. In total, 22 defendants have been charged and convicted for their roles in the HCSN scheme, including the former owner of HCSN, Armando “Manny” Gonzalez.
According to evidence presented at trial, HCSN purported to provide intensive mental health services to Medicare and Medicaid beneficiaries in Miami and Hendersonville, North Carolina, from approximately 2004 through 2011. These services were not medically necessary and were often never even provided. HCSN paid kickbacks to assisted living facility owners and operators in Miami who, in exchange, referred beneficiaries to HCSN. In support of this scheme, Rousseau routinely signed what he knew to be fabricated and altered medical records. Crabtree, Salafia and Marks fabricated HCSN medical records to support false and fraudulent claims for partial hospitalization program services that were not medically necessary and often never provided. In total, HCSN submitted approximately $63.7 million in false and fraudulent claims to Medicare, and received payments totaling approximately $28 million on those claims.
This case was prosecuted by Trial Attorneys Allan J. Medina, Lisa H. Miller and Bryan D. Fields of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are 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.
Media Advisory: Heroin Summit to Discuss Prevention, Treatment and Law Enforcement CollaborationRead the Press Release
CEDAR RAPIDS – The United States Attorney’s Offices for the Northern and Southern Districts of Iowa together with the University of Iowa’s College of Public Health and Injury Prevention Research Center are hosting a collaborative interagency symposium on November 12th to discuss the skyrocketing rates of death occurring in Iowa from prescription medication and heroin overdoses. For the 13-year period beginning in 2000, Iowans dying from prescription medication overdoses increased twenty-fold. Heroin overdose deaths experienced the same alarming rate of increase, jumping from one to 20 deaths per year.
The keynote speaker is award-winning journalist Sam Quinones, author of Dreamland: The True Tale of America’s Opiate Epidemic. Participating in the symposium will be federal and state representatives who will be discussing medical, prevention and treatment perspectives. Law enforcement and legal implications will be analyzed. A parent’s perspective will detail how the death of a loved one impacts the family.
Event Details
WHEN: Thursday, November 12, 2015
WHERE: University of Iowa College of Public Health (Callaghan Auditorium), 145 N. Riverside Drive, Iowa City, Iowa
TIME: 8:30 a.m. – 4:30 p.m. (Opening remarks begin at 8:30 a.m. followed by keynote.)
Parking instructions are attached. heroin_-_parking_instructions.pdf (389.51 KB)
Media wishing to attend should contact Assistant U.S. Attorney Steve Young no later than November 10th to confirm their attendance. His contact information is contained in this advisory.
A press release will be provided and interview opportunities will be available.
Follow us on Twitter @USAO_NDIA.
McLaughlin Man Sentenced for Assault with a Dangerous Weapon and Failure to AppearRead the Press Release
United States Attorney Randolph J. Seiler announced that a McLaughlin, South Dakota, man convicted of Assault with a Dangerous Weapon and Failure to Appear was sentenced on November 2, 2015, by U.S. District Judge Charles B. Kornmann.
Adam Weasel, age 20, was sentenced to 12 months in custody for Assault with a Dangerous Weapon and 6 months in custody for Failure to Appear, to be served consecutively; followed by 3 years of supervised release on each count, to be served concurrently; and a $200 special assessment to the Federal Crime Victims Fund.
Weasel was indicted for First Degree Burglary, Assault with a Dangerous Weapon, and Third Degree Burglary by a federal grand jury on June 23, 2014. A Superseding Information was filed on July 28, 2015, charging Weasel with Assault with a Dangerous Weapon and Failure to Appear. He pled guilty to the Superseding Information on August 3, 2015.
The conviction for Assault with a Dangerous Weapon arose from a June 22, 2013, incident at McLaughlin, when Weasel and two co-defendants forcibly entered a residence and assaulted some of the home’s occupants, kicking one of them while he was on the ground. Weasel joined in physical altercations between his co-defendants and several victims. Weasel was indicted for his role in the burglary and assault.
After his initial appearance, he was released on his own personal recognizance subject to various terms and conditions. He was later ordered to appear in federal court on January 30, 2015, to address an alleged bond violation. Weasel failed to appear for the hearing and a warrant was issued for his arrest. Weasel was not arrested on the warrant until April 23, 2015.
This case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Jay Miller prosecuted the case.
Weasel was immediately turned over to the custody of the U.S. Marshals Service.
McLaughlin Man Sentenced for Abusive Sexual Contact of a MinorRead the Press Release
United States Attorney Randolph J. Seiler announced that a McLaughlin, South Dakota, man convicted of Abusive Sexual Contact of a Minor was sentenced on November 2, 2015, by U.S. District Judge Charles B. Kornmann.
Patrick Red Legs, age 21, was sentenced to 24 months in custody, followed by 10 years of supervised release, and a special assessment of $100 to the Federal Crime Victims Fund.
Red Legs was indicted by a federal grand jury on August 14, 2014. He pled guilty on November 3, 2014.
The conviction stemmed from an incident on June 12, 2014, when an officer with the Bureau of Indian Affairs (BIA) responded to a call for assistance at a house in Little Eagle. Upon arrival, the officer made contact with another BIA officer and the 13-year-old victim, who reported that Red Legs had recently asked her to go drinking with him. The victim had agreed and they began to drink and playfully push each other, at which time Red Legs grabbed her and began to kiss her. The victim tried to push him away, but could not. Later in the evening, the victim was lying on a bed and Red Legs was sitting beside her. He started to kiss her again and began to rub her body. After a short amount of time, Red Legs placed his hands inside the victim’s leggings and underwear.
This case was investigated by the BIA, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Red Legs was immediately turned over to the custody of the U.S. Marshals Service.
Manhattan U.S. Attorney Files and Settles Civil Fraud Lawsuit Against Yonkers Contractor for Engaging in Fraudulent Conduct in Violation of the Disadvantaged Business Enterprise RegulationsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Douglas Shoemaker, regional Special Agent-in-Charge of the United States Department of Transportation Office of Inspector General (“DOT-OIG”), and Michael Nestor, Inspector General of The Port Authority of New York and New Jersey, announced that the United States filed on Tuesday, and simultaneously settled, a civil fraud lawsuit against a contractor, YONKERS CONTRACTING INC. (“YONKERS CONTRACTING”), for engaging in fraudulent conduct designed to exploit the Disadvantaged Business Enterprise Program in order to secure a contract on the federally-funded project for highway rehabilitation and bridge refurbishment along I-287, the Cross-Westchester Expressway (the “I-287 Project”). Specifically, as alleged in the complaint, YONKERS CONTRACTING falsely certified to the New York State Department Of Transportation (“NYS DOT”) that work being done by a disadvantaged business enterprise (“DBE”) qualified for DBE credit when YONKERS CONTRACTING knew that this was not the case and that YONKERS CONTRACTING instead paid kickbacks to the DBE for the fraudulent use of its DBE status. In the settlement, approved in White Plains federal court by U.S. District Judge Nelson S. Román, YONKERS CONTRACTING admitted and accepted responsibility for violating the DBE regulations governing the I-287 Project and agreed to pay the Government $2,600,000.
YONKERS CONTRACTING also entered into a non-prosecution agreement with the United States Attorney’s Office. Pursuant to the agreement, YONKERS CONTRACTING agreed, among other things, that it has instituted and will continue to maintain internal corporate remediation measures regarding Disadvantaged, Minority-Owned, and Women-Owned Business Enterprises (“D/M/WBEs”) for a period of two years, including: (1) creation and maintenance of a D/M/WBE Policy Manual and updated Code of Business Ethics for distribution to all employees; (2) implementation of an internal D/M/WBE training program for its employees; (3) creation and maintenance of a position focused on D/M/WBE issues; and (4) development and implementation of a checklist for D/M/WBE compliance to be used on all projects. Pursuant to the agreement, the United States Attorney’s Office agreed not to prosecute YONKERS CONTRACTING criminally in connection with credits claimed by it toward the DBE goal on a construction project on the Cross-Westchester Expressway for work purportedly done by two certified DBEs from in or about 2006 through in or about 2010.
Manhattan U.S. Attorney Preet Bharara said: “The DBE regulations at issue serve the important purpose of increasing legitimate participation by minority-owned and disadvantaged businesses. Instead of complying with the DBE regulations, Yonkers Contracting found fraudulent ways to get around them.”
DOT-OIG regional Special Agent-in-Charge Douglas Shoemaker said: “Disadvantaged Business Enterprise fraud like that committed by YONKERS CONTRACTING harms the integrity of the DBE program and law-abiding contractors, including many small businesses, by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts. Our agents will continue to work with the Secretary of Transportation, the Administrator of Federal Highways, and other Federal, State, and local law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-assisted highway programs throughout New York and elsewhere.”
Port Authority Inspector General Michael Nestor said: “This investigation has demonstrated how individuals in the construction industry have manipulated and circumvented the intent of the DBE Program by utilizing firms as fronts to satisfy Program goals. This conduct deprived legitimate DBE’s from receiving their fair share of government contracts. This investigation should serve notice to all in the industry to adhere to the Program’s intent or face legal consequences. The Port Authority’s Office of Inspector General and its law enforcement partners will aggressively identify, investigate and bring to justice those who corrupt the integrity of the construction industry.”
BACKGROUND ON DBEs
In 1980, the United States Department of Transportation (“USDOT”) issued regulations in connection with a program to increase the participation of minority and disadvantaged business enterprises in federally funded public construction contracts. To become certified as a DBE, a company must, among other things, be owned and controlled by socially and economically disadvantaged individuals; be an independent business whose viability does not depend on its relationship with other firms; employ its own work force and own equipment necessary to perform its work; and be able to meet its financial obligations.
General contractors can count funds paid to DBEs toward the attainment of the DBE goals only if the DBEs performed a “commercially useful function.” A DBE subcontractor performs a commercially useful function only when it is responsible for the execution of the work of the contract; actually performs, manages, and supervises the work involved; and furnishes the supervision, labor, and equipment necessary to perform its work.
A DBE does not perform a “commercially useful function” if “its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation.”
YONKERS’S FRAUD
As set forth/described in the complaint:
Yonkers was part of a joint venture that obtained a contract from NYS DOT for the I-287 Project. This contract required adherence to DBE regulations, and as part of its bid, the joint venture submitted a DBE Utilization Packet to NYS DOT. NYS DOT agreed to a DBE participation commitment from the joint venture of 8.03%, of which over 31% was based on the purported work to be provided by a DBE called Global Marine Supply Co. (“Global Marine”). While YONKERS CONTRACTING claimed that Global Marine was going to serve as a steel supplier, YONKERS CONTRACTING in fact negotiated directly with a third-party steel supplier, which was not a DBE, to supply steel for the I-287 Project. YONKERS CONTRACTING hired Global Marine solely for its DBE status, in exchange for a 1% mark-up. The third-party steel supplier provided invoices to Global Marine, which recopied them, added the 1% mark-up, and submitted them to the joint venture. Global Marine never stored or shipped any steel, and thus, as YONKERS CONTRACTING knew, performed no commercially useful function on the project. Yet the joint venture regularly made entries into NYS DOT’s electronic-tracking system reflecting steel purchases purportedly made through Global Marine, and these records were used by NYS DOT to determine Global Marine’s contribution and whether the joint venture was meeting its DBE goal. As a result of the false reports submitted, YONKERS CONTRACTING obtained federal money to which it was not entitled.
Pursuant to the settlement agreement, YONKERS CONTRACTING admitted, acknowledged, and accepted responsibility for making and causing false statements to be made in violation of applicable regulations designed to encourage the participation of disadvantaged business enterprises in federally funded construction projects. Under the agreement, YONKERS CONTRACTING must also pay the United States $2,600,000.
Mr. Bharara praised the USDOT Office of Inspector General and the Office of the Inspector General for the Port Authority of New York and New Jersey for their invaluable work on this case, and thanked the Office of the Inspector General of the Metropolitan Transportation Authority and NYS DOT’s Investigations Bureau for their assistance with this investigation.
Assistant United States Attorney Benjamin Allee of the Office’s White Plains Division is in charge of the criminal case. Assistant United States Attorneys Ellen London and Mara Trager of the Office’s Civil Frauds Unit are in charge of the civil case.
Man Pleads Guilty to Impersonating Federal Officer and BlackmailRead the Press Release
St. Thomas, USVI- George W. Lewis, Jr., 50, pleaded guilty today in District Court on St.Thomas to one count of impersonating a federal officer and one count of blackmail, United States
Attorney Ronald W. Sharpe announced.According to court records, beginning in October 2014, Lewis befriended an undocumented immigrant and claimed to be an immigration agent employed by the Department of Homeland Security Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI). Defendant then manipulated the undocumented immigrant into a sexual relationship under the threat that he would have the undocumented immigrant deported from the United States.
District Court Judge Curtis V. Gomez ordered Lewis, who was released on bond, to surrender to the U.S. Marshals Service on January 4, 2016. Sentencing is scheduled for March 10, 2016.
Angel M. Melendez, Special Agent in charge of HSI in Puerto Rico and the U.S. Virgin Islands said: “Regrettably, schemes like this involving the impersonation of federal officers potentially undermine the public's confidence in their government and law enforcement. HSI will continue to aggressively pursue those who exploit innocent individuals. Having people come forward to report such schemes is crucial to deterring this type of fraud and preventing others from becoming victims.”
David D’Amato, Special Agent in Charge of the U.S. Immigration and Customs Enforcement, Office of Professional Responsibility, Southeast Region, said: “This prosecution and plea represents the collaborative effort of the ICE Office of Professional Responsibility and Homeland Security Investigations, and sends a strong message that criminal acts such as those perpetrated by Mr. Lewis will be vigorously pursued. Taking advantage of foreign nationals in the immigration system for any reason will not be tolerated, and the motive of blackmail for personal gain is especially egregious.”
The case was investigated by HSI and OPR. It is being prosecuted by Assistant United States Attorney Everard E. Potter.
Man Charged with Armed Robbery of Shop N Save Sentenced to over 9 Years in PrisonRead the Press Release
Devante J. Hodges, 22, was sentenced to 9 ½ years in prison on a three-count indictment charging him with Conspiracy to Interfere with Commerce by Robbery, Interference with Commerce by Robbery, and Use of a Firearm During a Crime of Violence, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. The Armed Robbery counts arise from the federal Hobbs Act, which makes it a crime to obstruct, delay or affect interstate commerce by robbery, and is used by United States Attorney Wigginton as a way to combat armed robbery in the Southern District of Illinois. Following his prison sentence, Hodges will be on federal supervised release for 3 years. Hodges was also ordered to pay restitution in the amount of $7,000. Hodges has been in custody since he was charged on February 6, 2015.
Documents filed in the U.S. District Court establish that on January 11, 2015, Hodges, Lemarcus Jackson, Undray Webb, and Byron Holton entered the Shop ‘n Save, located at 1028 Camp Jackson Road in Cahokia, Illinois, masked, gloved and each armed with a gun. Hodges, Jackson, Webb, and Holton pointed the firearms at employees and customers within the store and threatened to kill a customer if they were not given the money. Holton jumped the service counter and demanded the employees place money from the safe into a black book bag while Hodges, Jackson, and Webb stood guard at the door with their firearms. Hodges, Jackson, Webb and Holton then left the store and fled the area in a vehicle being driven by the getaway driver, Durand Harper.
Hodges was arrested and interviewed by law enforcement. During the interview Hodges admitted to being one of the four gunmen who robbed the Shop ‘n Save and identified Byron Holton, Undray Webb and Lemarcus Jackson as the other three gunmen and Durand Harper as the getaway driver. Hodges admitted that he receive approximately $1,000 in proceeds from the robbery.
As to Lemarcus Jackson, Undray Webb, Byron Holton, and Durand Harper, their cases are still pending, thus they are innocent of the charges unless or until proven guilty beyond a reasonable doubt.
The case was investigated by the Cahokia Police Department, the Sauget Police Department and the Federal Bureau of Investigation. The case is assigned to Assistant United States Attorney Ali Summers for prosecution.
Luzerne County Man Sentenced to 9 Years in Prison for Possession and Sale of Stolen FirearmRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 30-year-old Luzerne County man was sentenced on November 5, 2015 to 9 years in prison by U.S. District Court Judge Robert D. Mariani in Scranton, for possession and sale of a stolen firearm.
According to United States Attorney Peter Smith, the defendant, James Pavlichko, previously pleaded guilty in July 2015. At that time, he admitted to stealing a .40 caliber Glock handgun from a friend’s home and selling it to a convicted felon in Kingston, Pennsylvania, on April 13, 2015.
The conviction is the result of an investigation conducted by the Kingston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Judge Mariani ordered that Pavlichko serve three years on supervised release following his prison sentence.
Assistant U.S. Attorney John Gurganus prosecuted the case.
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Lower Brule Man Sentenced for AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a Lower Brule, South Dakota, man convicted of Assaulting, Resisting and Impeding a Federal Officer and Assault Resulting in Substantial Bodily Injury to a Spouse was sentenced on November 2, 2015, by U.S. District Judge Roberto A. Lange.
Ronald Desheuquette, age 57, was sentenced to 14 months in custody, followed by 2 years of supervised release on each count to be served concurrently, and a special assessment of $200 to the Federal Crime Victims Fund.
Desheuquette was indicted by a federal grand jury on May 12, 2015. He pled guilty on August 11, 2015.
The conviction stemmed from an incident on November 29, 2014, when a Bureau of Indian Affairs officer was called to a residence in Lower Brule advising that a woman had been assaulted. When the officer arrived on scene, he found Desheuquette’s wife with blood on her head and hands, and a cut to her head that required staples to close. Desheuquette had struck his wife with his fists several times causing the injury.
The officer then proceeded to arrest Desheuquette on domestic abuse charges. He was transported to the Lower Brule Correctional Facility, and was booked. The officer began to fill out custody request forms, and Desheuquette was making verbal threats towards the officer. Desheuquette then walked up to the officer, while wearing shoes, and intentionally kicked the officer in the lower back.
This case was investigated by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Desheuquette was immediately turned over to the custody of the U.S. Marshals Service.
Kendall Man Charged with Possessing Unregistered Destructive DeviceRead the Press Release
A Kendall man unlawfully possessed the components of four pipe bombs, in violation of the National Firearms Act.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Carlos Canino, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), J.D. Patterson, Director, Miami Dade Police Department (MDPD), David Downey, Fire Chief, Miami-Dade Fire Rescue Department, and Joseph Steadman, Chief, State of Florida – Fire Marshal’s Office, made the announcement.
Jonathan Cristian Dittemore, 24, of Miami-Dade, was charged, by complaint, with possessing a National Firearm Act (NFA) firearm not registered to him in the National Firearm Registration and Transfer Record, in violation of Title 26, United States Code, Section 5861(d). If convicted Dittemore faces a statutory maximum penalty of 10 years in prison. This afternoon, Dittemore had his initial appearance before U.S. Magistrate Judge Barry L. Garber.
According to court documents, on October 23, 2015, a Miami-Dade County sanitation vehicle exploded in the area of 10620 SW 129th Court in Miami, Florida. An investigation into the explosion led law enforcement to Dittemore’s former residence. Inside Dittemore’s residence, including a bedroom allegedly used by the defendant, law enforcement discovered various explosive powders and components to construct destructive devices (pipe bombs). According to a record query, Dittemore possessed the components of the destructive devices in contravention of the requirements of the National Firearms Act.
Mr. Ferrer commended the investigative efforts of the ATF, MDPD Arson and Bomb Disposal Units, Miami-Dade Fire Rescue Department and the State of Florida – Fire Marshal’s Office. The case is being prosecuted by Assistant United States Attorney Jonathan Kobrinski.
A complaint is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.
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.
Justin Brouillette Pleads Guilty to Federal Carjacking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Justin Brouillette, 21, of Albuquerque, N.M., pleaded guilty today in federal court to carjacking and firearms charges announced U.S. Attorney Damon P. Martinez, Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Gorden Eden, Jr., of the Albuquerque Police Department (APD). Under the terms of his plea agreement, Brouillette will be sentenced in the range of 11 to 13 years in federal prison followed by a term of supervised release to be determined by the court.
Brouillette was arrested in July 2015, on a criminal complaint alleging that he used a firearm on July 8, 2015, to shoot at APD officers as they attempted to execute a traffic stop on Brouillette as he was driving in southeast Albuquerque. Shortly thereafter Brouillette crashed his vehicle into another vehicle (the Ford), and then attempted to carjack the Ford by brandishing a firearm at the Ford’s owner and ordering him out of the car. While Brouillette was attempting to carjack the Ford, APD officers drove into the area and Brouillette allegedly fled on foot after discharging the firearm at the officers for a second time.
Brouillette was subsequently indicted on July 30, 2015, and charged with being a felon in possession of a firearm, attempted carjacking, brandishing a firearm during a carjacking, and brandishing and discharging a firearm during a carjacking. The offenses charged in the indictment took place on July 8, 2015, in Bernalillo County, N.M. On that day, Brouillette was prohibited from possessing firearms or ammunition because of his status as a convicted felon. Court records reflect that Brouillette has two felony convictions for receiving or transferring stolen vehicles in the Second Judicial District Court for the State of New Mexico in Bernalillo County.
During today’s change of plea hearing, Brouillette pled guilty to two counts of the indictment charging him with carjacking and discharging a firearm in furtherance of the carjacking. Brouillette admitted that on July 8, 2015, as he attempted to escape from police and collided with another vehicle, he got out of his vehicle, pointed a gun at the other driver and ordered the other driver out of his vehicle. Brouillette further admitted that he attempted to take the other vehicle but it was disabled, he fired shots at the officers and then fled on foot.
This case was investigated by the ATF office in Albuquerque and APD. Assistant U.S. Attorney Presiliano A. Torrez is prosecuting the case as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Lynch in Billings, on November 6, 2015 and entering pleas of Not Guilty were:
- DEAN JAMES SMALL, a 48-year-old resident of Lame Deer, appeared on charges of assault on a federal officer and use of a firearm during and in relation to a crime of violence. If convicted of the most serious charge contained in the indictment, SMALL faces life in prison, $250,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs. PACER Case Reference. 15-137
Appearing before U.S. Magistrate Lynch in Missoula, on November 4, 2015 and entering pleas of Not Guilty were:
- KENNETH MICHAEL MARKEE, JR., a 35-year-old resident of Billings, appeared on charges of possession of a firearm with an obliterated serial number. If convicted of the charge contained in the indictment, MARKEE faces 5 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Bozeman Police Department. PACER Case Reference. 15-33
- JAMES EARL WILLIAMS, a 34-year-old resident of Billings, appeared on charges of failure to register as a sex offender. If convicted of the charge contained in the indictment, WILLIAMS faces 10 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the United States Marshals Service. PACER Case Reference. 15-110
Appearing before U.S. Magistrate Anderson in Billings, on November 3, 2015 and entering pleas of Not Guilty were:
- TIMOTHY PATRICK PINE II, a 36-year-old resident of Fortine, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, PINE faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration and the Federal Bureau of Investigation. PACER Case Reference. 15-133
- SHAWN LEE STEWART, a 38-year-old resident of Wyola, appeared on charges of felon in possession of a firearm and ammunition and possession of an unregistered firearm. If convicted of the most serious charge contained in the indictment, STEWART faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-134
Appearing before U.S. Magistrate Johnston in Great Falls, on November 2, 2015 and entering pleas of Not Guilty were:
- JOHN EDMONSTON, a 54-year-old resident of Great Falls, appeared on charges of conspiracy to defraud the United States and theft of federal property by fraud. If convicted of the most serious charge contained in the indictment, EDMONSTON faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by Homeland Security Investigations and Malmstrom Air Force Base Office of Special Investigations. PACER Case Reference. 15-69
- JASON DANIEL WALKER, a 37-year-old resident of Lewistown, appeared on charges of felon in possession of firearms. If convicted of the most serious charge contained in the indictment, WALKER faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-36
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indiana Man Sentenced for Role in 10-Defendant Marijuana ConspiracyRead the Press Release
BROWNSVILLE, Texas – Delton Hinderliter, 37 of Indianapolis, Indiana, has been sentenced to 112 months in federal prison for his role in a 10-defendant marijuana conspiracy, announced U.S. Attorney Kenneth Magidson. Hinderliter pleaded guilty in May 2014 to conspiracy with intent to distribute a quantity exceeding 1000 kilograms of marijuana.
Hinderliter was part of a multi-state drug trafficking and money laundering organization that had existed since 2010. The drug trafficking organization, based out of the Rio Grande Valley, would hire out-of-state truck drivers to haul loads of produce with ton quantities of marijuana hidden in false compartments. Drug proceeds would then be transported back to the Rio Grande Valley. The conspiracy extended to Indiana, Kentucky, Illinois, North Carolina and Tennessee.
The evidence at sentencing proved that Hinderliter was a distributer of marijuana for the drug trafficking organization in Indiana. Hinderliter’s sentence includes upward adjustments or increases in his calculated sentencing guideline range because he was found to have maintained a premises to facilitate the offloading, processing and distribution of illicit narcotics, and because he was found to be a leader within the drug trafficking organization. As part of his sentence, Hinderliter agreed to a $5 million money judgment against him. Five other individuals charged and convicted in the case were previously sentenced to terms ranging from 38-189 months in federal prison. Four others have also been convicted and are pending sentencing.
The case was the result of a nearly three-year Organized Crime Drug Enforcement Task Force investigation lead by the Drug Enforcement Administration with the assistance of Internal Revenue Service-Criminal Investigation; Homeland Security Investigations; Bureau of Alcohol, Tobacco, Firearms and Explosives; FBI; Sheriff’s Offices in Cameron and Zapata Counties; Hildalgo County High Intensity Drug Trafficking Area task force; Border Patrol and the Brownsville Police Department. Assistant U.S. Attorney Angel Castro is prosecuting the case.
Harrison Man Sentenced to Three Years for Possession of Child PornographyRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Wayne Pike, 38, of Harrison, Maine, was sentenced today in U.S. District Court by Judge George Z. Singal to three years in prison and 10 years of supervised release for possession of child pornography. He also was ordered to pay $10,320 in restitution to victims of the offense. He pleaded guilty to the charges on May 28, 2015.
Court records reveal that in July 2014, investigators with the Maine State Police Computer Crimes Unit (“MSPCCU”) downloaded via a peer-to-peer file sharing program hundreds of images that depicted minors engaged in sexually explicit activity. Investigators determined that the files were being made available by a computer at a home in Harrison where Pike was living. On October 10, 2014, investigators conducted a search warrant at the home, and found multiple electronic devices that contained child pornographic images. Pike claimed ownership of the devices and admitted that he was responsible for possessing the images the investigators found.
This case was investigated by the MSPCCU and the U.S. Secret Service.
Happy Valley Woman Sentenced for Insurance FraudRead the Press Release
PORTLAND, Ore. – The former owner of a local auto business was sentenced yesterday to 51 months in prison for a scheme that defrauded two insurance companies and netted her $200,000. Lisa Ephrem, 40, of Happy Valley, pleaded guilty in February to mail fraud and aggravated identity theft.
Beginning in 2011, Ephrem obtained group life insurance policies for fictitious employees of her wholesale automobile business, Carr City, located in Portland, Oregon. Ephrem provided false information to the insurance company victims – Standard Insurance Company and LifeMap Assurance Company – claiming that certain people were employees, when in fact they were not. Shortly after the issuance of the policies, Ephrem submitted life insurance claims for the death of six purported employees. Between January 2012, and May 2012, Ephrem submitted eight life insurance claims to Standard and LifeMap totaling $660,000. Standard and LifeMap each paid $100,000 for the death of one purported employee, but denied subsequent claims.
Standard and LifeMap conducted internal investigations and determined that Ephrem had lied (the people were real, and had in fact died, but had not been Carr City employees), and contacted federal investigators. Despite the results of Standard’s and LifeMap’s internal investigations that determined Ephrem’s claims were fraudulent, Ephrem persisted and filed civil lawsuits against both insurance companies seeking payment for the claims. Those lawsuits were eventually dismissed, but cost Standard and Lifemap more than $150,000 in costs and attorney fees.
In sentencing Ephrem to the high end of the sentencing guideline range, U.S. District Judge Michael Mosman noted Ephrem’s extensive criminal history which included bank fraud, and told her she was a grown woman who had “free rein” with her criminal tendencies. He also ordered Ephrem to pay more than $280,000 to Standard and LifeMap for restitution.
Ephrem was ordered to surrender to the Bureau of Prisons by December 17, 2015.
The case was investigated by the FBI and the Social Security Administration Office of the Inspector General. The case was prosecuted by Special Assistant United States Attorney Helen Cooper as part of a partnership venture between the Seattle Region, SSA Office of the General Counsel and the U.S. Attorney’s Office in Portland, Oregon.
Former Staff Mentor at Florida Keys Children’s Shelter Convicted of Child Sex TraffickingRead the Press Release
A former staff mentor at the Florida Keys Children’s Shelter, a residential facility in Tavernier, Florida, was convicted today of child sex trafficking, following a three-week jury trial before United States District Court Judge Marcia G. Cooke.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Ricky Jermaine Atkins, 29, of Key Largo, was found guilty of one count of conspiracy to engage in the sex trafficking of minors, in violation of Title 18, United States Code, Section 1594(c), and two counts of sex trafficking of minors, in violation of Title 18, United States Code, Section 1591(a)(1). Atkins is scheduled to be sentenced on January 27, 2016.
Atkins’ co-defendant, Sandra Simon, 24, of Homestead, previously pled guilty to one count of sex trafficking of a minor, in violation of Title 18, United States Code, Section 1591. Simon’s sentencing is scheduled for November 20, 2015.
According to evidence presented at trial, since 2011, Atkins worked overnight shifts as a staff mentor at the Florida Keys Children’s Shelter, a residential facility in Tavernier. While working as a staff mentor, Atkins arranged for two of the minor shelter residents, girls aged fifteen and sixteen, to be brought from Tavernier to a hotel in Cutler Bay, where Simon supervised their prostitution. On the night of August 15, 2014, Atkins personally transported the minor victims from Tavernier to an apartment in Homestead where he introduced the teenagers to several of his adult associates. Atkins arranged for one of the minors to have sex with three of the adults to prepare her for prostitution. Atkins then transported both minor victims to Cutler Bay, where he left them with Simon to be sold for sex. Text messages between Simon and Atkins revealed that, on the same day that the victims were trafficked, Simon had pled guilty in state court to procuring a minor for prostitution and had been sentenced to probation.
Evidence presented at trial further established that Atkins collected money earned from the minor victims’ acts of prostitution. Atkins also delivered to Simon a cellular phone and other items intended to facilitate the prostitution of the minor victims.
During the trial, testimony was presented that Atkins simultaneously prostituted an 18-year-old woman he had met while she was a minor child living at the shelter.
Atkins was originally arrested by state authorities in Monroe County on September 9, 2014, and charged with interference with the custody of a minor, before being released on bond. On December 9, 2014, a federal grand jury indicted Atkins on federal trafficking charges.
Mr. Ferrer thanked the FBI, City of Miami Police Department, Monroe County Sherriff’s Office, Sunny Isles Beach Police Department, North Port Police Department and Miami-Dade Police Department for their work on this case. The case is being prosecuted by Assistant U.S. Attorneys Seth M. Schlessinger and Elina A. Rubin-Smith.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former NMMI Cadet Arrested in California on Federal Child Pornography Charges Filed in New MexicoRead the Press Release
ALBUQUERQUE – Josh Williams, 20, of Lakeside, Calif., was arrested on Nov. 4, 2015, in Lakeside, Calif., on a criminal complaint alleging child pornography charges that was filed on Oct. 27, 2015, in federal court in Las Cruces, N.M. Williams is scheduled to make his initial appearance on the criminal complaint this morning in the U.S. District Court in the Southern District of California in San Diego, Calif. During today’s proceeding, the court will address the process by which Williams will be transported from California to Las Cruces to face the charges against him.
The criminal complaint charges Williams with distribution, possession and attempted production of child pornography. It alleges that Williams committed these offenses in May 2015 in Roswell, N.M. At the time, Williams was enrolled as a cadet at the New Mexico Military Institute (NMMI).
According to the criminal complaint, the investigation into Williams began in Aug. 2014, when a father and minor child disclosed to the FBI that the child had been self-producing child pornography and sharing it with others by way of an internet chat room. The father surrendered the child’s cellular phone to the FBI and the FBI found it to contain alleged child pornography that had been shared with a specific account identified by a particular username.
Subsequent investigation revealed that Williams, then a NMMI cadet, was the alleged subscriber to aforementioned account and search warrants were obtained for Williams’ computers, cellphone and other digital media. Forensic examinations of Williams’ computer and cellphone allegedly revealed that they contained videos and images consistent with child pornography.
If convicted, Williams faces the following penalties for the crimes charged in the criminal complaint: distribution of child pornography – a mandatory minimum of five years and a maximum of 20 years in prison; possession of child pornography – a maximum of ten years in prison; and attempted production of child pornography – a maximum of 30 years in prison. Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Roswell office of the FBI, New Mexico State Police, New Mexico Internet Crimes Against Children (ICAC) Task Force and the New Mexico Regional Computer Forensic Laboratory with assistance from the FBI in San Diego, Calif., and the U.S. Attorney’s Office for the Southern District of California. Assistant U.S. Attorney Marisa A. Lizarraga of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
The case is brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s 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 http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 80 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Office of the Attorney General. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Former Financial Assistant of Architectural Firm Sentenced for ForgeryRead the Press Release
NORFOLK, Va. – Katherine Albert-McNaughton, 37, of Virginia Beach, was sentenced today to 30 months in prison, followed by 3 years of supervised release, for forging securities and engaging in monetary transactions in criminally derived property. She was also ordered to make restitution in the amount of $470,352.39.
Albert-McNaughton pleaded guilty on May 12, 2015. According to court documents, Albert-McNaughton was employed as a financial assistant by HBA Architecture & Interior Design, Inc., a business located in Virginia Beach. Between October 2011 and June 2014, Albert-McNaughton forged the signature of a principal of HBA Architecture & Interior Design, Inc. on 83 company checks, totaling $469,831.89. She deposited all of the forged checks into bank accounts that she maintained and used the money for her own personal benefit, including vacations, shopping, plane tickets, photography, and the purchase of vehicles, concert and professional football tickets.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Douglas F. Mease, Special Agent in Charge of the U.S. Secret Service’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge Arenda L. Wright-Allen. Assistant U.S. Attorney Alan M. Salsbury prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15cr31.
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Former Employee of Albuquerque Half-Way House Arrested on Federal Sexual Abuse ChargesRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez and Special Agent in Charge Monte A. Cason of the Department of Justice Office of Inspector General, Dallas Field Office, announced the arrest of Eric Trujillo, 35, of Albuquerque, N.M., on federal sexual abuse charges.
Trujillo was arrested last night on an indictment charging him with sexually abusing four female inmates living at a half-way house in Bernalillo County, N.M., that provides lodging and other services for federal inmates under a contract with the U.S. Bureau of Prisons. Trujillo made his initial appearance in federal court this morning and remains in custody pending an arraignment and a detention hearing which are scheduled for Nov. 9, 2015.
The seven-count indictment alleges that Trujillo sexually abused the four victims between June 2012 and March 2014. During that time, Trujillo was employed as a Resident Monitor by the half-way house.
Count 1 of the indictment alleges Trujillo forced a victim identified as Jane Doe 1 to engage in a sexual act in March 2014. Counts 2 through 4 allege that between Dec. 2013 and March 2014, Trujillo engaged in sexual acts with Jane Doe 1 by threatening her and placing her in fear. Count 5 alleges that in June 2012, Trujillo engaged in a sexual act with a victim identified as Jane Doe 2 at a time when she was physically incapable of declining to participate in the sexual act. Counts 6 and 7 charge Trujillo with engaging in sexual acts with two victims identified as Jane Doe 3 and Jane Doe 4 at times when they were in official detention and under Trujillo’s authority. Trujillo allegedly victimized Jane Doe 3 between Aug. 2012 and Nov. 2012, and Jane Doe 4 in Nov. 2012.
If convicted on Counts 1 through 5, Trujillo faces a statutory maximum penalty of life imprisonment. If convicted on Counts 6 and 7, he faces a statutory maximum penalty of 15 years in prison. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Dallas Field Office of the Department of Justice Office of Inspector General with assistance from the Albuquerque Police Department. Assistant U.S. Attorney Novaline D. Wilson is prosecuting the case.
trujillo_indictment.pdf (563.73 KB)
Former Colombian Paramilitary Leader Sentenced to More than 16 Years in Prison for International Drug TraffickingRead the Press Release
A former high-ranking paramilitary leader in the Autodefensas Unidas de Colombia (AUC or the United Self Defense Forces of Colombia) was sentenced to 198 months in U.S. federal prison today for conspiring to import into the United States and distribute ton-quantities of cocaine, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Administrator Chuck Rosenberg of the U.S. Drug Enforcement Administration (DEA).
“Rodrigo Tovar-Pupo funded his violent and dangerous paramilitary organization by reaping the profits of manufacturing and shipping thousands of kilograms of cocaine into the United States,” said Assistant Attorney General Caldwell. “His actions did untold damage to the United States and Colombia. This case demonstrates our continued commitment to work closely with our international partners to stem the flow of the international drug trade.”
“The sentence reflects our unwavering commitment to bring to justice leaders of the AUC and other narco-terrorist organizations throughout the world,” said Acting Administrator Rosenberg. “Many terror regimes use drug trafficking profits to expand their global influence. As a top-level AUC commander, Tovar-Pupo led a huge drug trafficking enterprise, overseeing maritime cocaine shipments destined for the United States and other parts of the world. I am proud of the dedicated men and women throughout DEA who have worked tirelessly to bring him to justice.”
Rodrigo Tovar-Pupo, also known as “Jorge 40,” 54, formerly of Barranquilla, Colombia, pleaded guilty in July 2009 to one count of conspiracy to distribute five kilograms or more of cocaine, knowing and intending that it would be imported into the United States, and was sentenced today by U.S. District Judge Reggie B. Walton of the District of Columbia. Tovar-Pupo was also ordered to pay a $25,000 fine and to five years of supervised release following his prison sentence.
According to court documents and proceedings, including admissions in connection with his guilty plea and additional testimony, Tovar-Pupo became a member of a paramilitary group in 1996 that later merged with other Colombian paramilitary groups to form the AUC. The AUC was designated a foreign terrorist organization by the U.S. Department of State in September 2001. The AUC was removed from the State Department’s list of foreign terrorist organizations in July 2014. In May 2003, the AUC was placed on the Significant Foreign Narcotics Traffickers list by order of the president, pursuant to the Foreign Narcotics Kingpin Designation Act. Court documents reflect that the AUC was organized into blocs (or regions) with each bloc having a commander who controlled large areas in Colombia where cocaine was produced.
According to admissions made in connection with his plea agreement and during other court proceedings, Tovar-Pupo quickly became a top-level commander in the AUC, and his forces controlled all aspects of cocaine production and transportation in his region, which included the north coast of Colombia. Tovar-Pupo’s organization and its operations were funded through “taxes” he imposed on cocaine manufacturers and traffickers in his region. In exchange, Tovar-Pupo provided protection and security for the manufacturers and traffickers, including securing coastal areas where cocaine was loaded onto vessels for shipment to the United States and elsewhere. Tovar-Pupo knew that shipments of large quantities of cocaine, amounting to more than 1,500 kilograms, were manufactured in and transited through his region, and that much of the cocaine was transported to the United States.
Tovar-Pupo was arrested in Colombia based on a provisional arrest warrant and extradited to the United States on May 13, 2008, along with 13 other fugitives.
Today’s sentence for violations of U.S. drug trafficking laws does not account for any violations of Colombian human rights-related laws allegedly committed by Tovar-Pupo in Colombia, which are being addressed in Colombia through the Justice and Peace process—a legal framework enacted in Colombia in 2005 to facilitate the demobilization of its paramilitary organizations—and the Colombian criminal justice system.
The case was investigated by the Department of Justice’s Organized Crime Drug Trafficking Task Forces program, led by DEA’s Bogotá and Cartagena, Colombia, Country Offices, and the DEA Special Operations Division. The DEA worked in partnership with the Judicial Police of the Prosecutor General’s Office in Colombia and the Colombian National Police.
The case is being prosecuted by Trial Attorney Paul W. Laymon of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS), with significant assistance from NDDS’ Judicial Attachés in Bogotá, Colombia, the Criminal Division’s Office of International Affairs, and the Prosecutor General’s Office of the Republic of Colombia (Fiscalia), including the Fiscalia’s Transitional Justice program.
Former CEO of $3 Billion TierOne Bank Convicted for Orchestrating Scheme to Hide More than $100 Million in Losses from Shareholders and RegulatorsRead the Press Release
The former CEO of TierOne Bank, a $3 billion publicly traded commercial bank formerly headquartered in Lincoln, Nebraska, was convicted by a federal jury today for orchestrating a scheme to defraud TierOne’s shareholders and to mislead regulators by concealing more than $100 million in losses on loans and declining real estate.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Thomas R. Metz of the FBI’s Omaha, Nebraska, Division and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Goldsmith Romero made the announcement.
After a two-week trial, a jury in the District of Nebraska found the former CEO, Gilbert G. Lundstrom, 74, of Lincoln, guilty on 12 of 13 counts, including charges of conspiracy to commit wire fraud and securities fraud, conspiracy to falsify bank entries, wire fraud, securities fraud and falsifying bank entries. In 2014, co-conspirators James Laphen, TierOne’s former president and chief operating officer, and Don Langford, TierOne’s former chief credit officer, pleaded guilty to multiple felonies in connection with their participation in the scheme.
Evidence at trial showed that Lundstrom was the architect of an aggressive strategy to expand the bank’s portfolio beyond traditional lending in Nebraska to riskier areas like commercial real estate in Las Vegas. Once the financial crisis hit, Lundstrom’s bet on real estate in riskier areas decimated the bank. Lundstrom and his co-conspirators then intentionally concealed massive losses – more than $100 million – in TierOne’s loan and real estate portfolio from investors and regulators and provided inflated figures in its required reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision (OTS). In April 2009, Lundstrom and his co-conspirators learned that TierOne needed to increase its reserves and Loan Loss Allowance by between $34 million and $114 million, but concealed this information from shareholders and regulators in TierOne’s financial statements. In addition, during TierOne’s annual shareholder meeting held on May 21, 2009, the evidence showed that Lundstrom misrepresented the state of TierOne’s capital ratios and reserves and whether TierOne had applied for TARP funding.
In June 2010, following TierOne’s ultimate disclosure of $120 million in loan losses and its subsequent delisting from the NASDAQ exchange, TierOne was shut down by the Federal Deposit Insurance Corporation. At the time of the closure, TierOne had more than 750 employees working at TierOne’s headquarters in Lincoln and at its 69 branch offices located in Nebraska, Iowa and Kansas.
The case was investigated by the FBI’s Omaha Division and SIGTARP. The SEC also provided substantial assistance in the investigation. The case was prosecuted by Trial Attorneys Henry P. Van Dyck and L. Rush Atkinson and Senior Deputy Chief Sandra Moser of the Criminal Division’s Fraud Section.
Former Attorney Indicted in Ponzi SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned an indictment charging James A. MacCallum, 44, of Bemus Point, NY, with mail fraud. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Michael DiGiacomo, who is handling the case, stated that according to the indictment, between January 2008 and December 2010, the defendant, a practicing attorney at the time, devised a scheme to defraud investors out of approximately $3,400,000. As part of the scheme, MacCallum encouraged some victims to liquidate other investments in order to benefit from his false and fraudulent higher rates of return. The defendant claimed that his investments were secured by real estate and life insurance policies. However, the investigation determined that the defendant was using victim investments to pay back earlier investors and also personal and other expenses such as personal travel and office expenses. According to the indictment, MacCallum received approximately $3,423,737.00 from victim investors.
The defendant was arraigned today before U.S. Magistrate Judge Jeremiah J. McCarthy and was released on bond.
The indictment is the result of/culmination of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen and the Chautauqua County District Attorney’s Office, under the direction of David Foley.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Five Former Owners of a Kentucky Clinical Laboratory Indicted for Health Care FraudRead the Press Release
LEXINGTON — A federal grand jury has returned a 100-count indictment charging five men, who owned a clinical laboratory, with billing health care third-party payors for urine drug tests that were medically unnecessary and not eligible for reimbursement.
On Thursday, a federal grand jury returned an indictment charging Dr. Robin G. Peavler, 54, of Lexington, Ky., Dr. Bryan S. Wood, 48, of Danville, Ky., and Dr. Robert L. Bertram, 47, James W. Bottom, 62, Brian C. Walters, 43, all of Russell Springs, Ky., with one count of conspiracy to commit health care fraud and 99 counts of health care fraud. The alleged conduct was part of a scheme to defraud Medicare, Medicaid, Anthem BlueCross BlueShield, Bluegrass Family Health, and others.
Beginning around December 2010, as alleged in the indictment, the defendants agreed to collect thousands of urine samples for testing at PremierTox, a clinical lab formerly owned by the defendants, which lacked the ability to perform quantitative drug tests on such a high volume of samples.
PremierTox allegedly froze the samples, at a lab in Russell Springs, Ky., and didn’t perform the tests until up to ten months later, knowing that the results were no longer relevant to the treatment of the patients. According to the indictment, the defendants submitted claims to Medicare, Medicaid and private insurers, and were reimbursed thousands of dollars for these unnecessary tests.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Derrick Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Region; and Jack Conway, Kentucky Attorney General, jointly made the announcement today.
The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General, and the Office of the Kentucky Attorney General’s Medicaid Fraud and Abuse Control Unit. Assistant U.S. Attorney Kate K. Smith is prosecuting this case on behalf of the federal government.
The defendants are scheduled to appear in court on December 1, 2015 at 1:30 p.m. If convicted, the defendants face a maximum of ten years in prison. Any sentence following a conviction, however, would be imposed after the Court considers the U.S. Sentencing Guidelines and the applicable federal statutes.
An indictment is an allegation only. All defendants are presumed innocent and are entitled to a fair trial, at which the government must prove their guilt beyond a reasonable doubt.
Federal Officials Close the Investigation into the Death of Anastasio Hernandez-RojasRead the Press Release
The Justice Department announced today that following a comprehensive investigation it will not pursue federal criminal civil rights or other federal charges against the federal agents involved in the in-custody altercation that resulted in the death of Mexican national Anastasio Hernandez-Rojas.
Officials from the Department of Justice’s Civil Rights Division, the FBI and the Department of Homeland Security’s Office of the Inspector General (DHS-OIG) met today with Hernandez-Rojas’ family members and their representatives to inform them of this determination. The department’s decision is based on the facts developed during an independent and comprehensive investigation into this matter.
The department devoted significant time and resources to investigating the events surrounding Hernandez-Rojas’ death on May 31, 2010, three days after he was taken into custody at the San Ysidro Port of Entry in San Diego, California. A team of experienced federal prosecutors reviewed hundreds of pages of evidence generated by San Diego Police Department Homicide investigators. Federal agents and the Civil Rights Division then initiated an independent federal investigation into the incident, which included numerous witness interviews and visits to the scene. The evidence generated during the federal investigation included videos of the incident, federal law enforcement witness accounts, Mexican law enforcement witness accounts, civilian witness accounts, medical personnel accounts, medical records, autopsy reports, official use of force training materials and forensic evidence.
The evidence developed during the investigation indicated that when Hernandez-Rojas’ handcuffs were removed at the San Ysidro Port of Entry, Hernandez-Rojas began grappling with the two U.S. Border Patrol (USBP) agents and then resisted their efforts to restrain him. Two Immigration and Customs Enforcement (ICE) agents, as well as another USBP agent, joined the struggle and struck Hernandez-Rojas several times with their asp batons. The agents again secured Hernandez-Rojas in handcuffs, but he continued to struggle and kick at the agents. The agents called for backup and a transport vehicle to take Hernandez-Rojas for processing since he was no longer eligible for voluntary return due to the struggle. As agents attempted to place Hernandez-Rojas in the transport van to take him back to the station, he again physically resisted and attempted to kick the agents. A number of Customs and Border Protection (CBP) officers responded to the scene, one of whom shocked Hernandez-Rojas with a taser. Hernandez-Rojas stopped resisting and the agents restrained his legs. Shortly thereafter, Hernandez-Rojas’ breathing slowed and he became unresponsive. The CBP officers administered CPR until medical personnel arrived at the scene. Hernandez-Rojas was pronounced dead two days later after being removed from life support.
Subsequent autopsies concluded that Hernandez-Rojas died of an acute myocardial infarction (heart attack) while being restrained. Acute methamphetamine intoxication, pre-existing heart disease, the level of physical exertion during the struggle, the electro-shocks from the taser and positional restraint were stated as contributory factors in Hernandez-Rojas’ death. The medical examiner stated further that Hernandez-Rojas would not have died had there not been methamphetamine intoxication.
After a careful and thorough review, a team of experienced federal prosecutors determined that the evidence was insufficient to pursue federal criminal civil rights charges. Under the applicable federal criminal civil rights law, prosecutors must establish, beyond a reasonable doubt, that an official willfully deprived an individual of a constitutional right, meaning that the official acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by the law. Neither accident, mistake, fear, negligence nor bad judgment is sufficient to establish a federal criminal civil rights violation. In the present matter, the federal government could not prove beyond a reasonable doubt that the subjects acted willfully, that is with the specific intent to deprive the victim of a constitutional right. Specifically, the federal government cannot disprove the agents’ claim that they used reasonable force in an attempt to subdue and restrain a combative detainee so that he could be placed inside a transport vehicle.
The federal government is also unable to prove, beyond a reasonable doubt, that the subjects violated the federal homicide statutes within the Special Maritime and Territorial Jurisdiction of the United States. Although positional restraint of Hernandez-Rojas and electro-shocks from the taser were contributory factors in his death, there is no evidence that any of the federal agents deployed the taser or restrained Hernandez-Rojas with malice. Nor is there sufficient evidence to establish that the federal agents’ conduct violated the federal manslaughter statute, which does not require malice but requires that the federal agents committed a lawful act in an unlawful manner, or without due caution and circumspection, that might produce death. Rather, the federal agents’ restraint and deployment of the taser against Hernandez-Rojas when he was non-compliant and physically assaultive was not unlawful and, based on the evidence gathered relating to the federal agents’ use of force training, the federal agents’ action were not done without due caution and circumspection.
While the loss of life is regrettable, the facts of this matter do not support a federal prosecution. Accordingly, the investigation into this incident has been closed.
Federal Jury Convicts Ohio Man in Sex Trafficking Ring Involving Minors Brought to Chicago from IowaRead the Press Release
CHICAGO — An Ohio man was convicted yesterday for his role in a sex trafficking conspiracy involving minor girls who were transported to Chicago from Iowa to engage in prostitution.
WILLIE WOODS, 44, of Toledo, Ohio, helped transport the minor girls from Iowa City in 2012. Once in Chicago, Woods and his co-conspirators forced the girls to engage in prostitution. At the time, one victim was 14 years old and the two other victims were each 16 years old.
After a seven-day trial in federal court in Chicago, the jury convicted Woods on one count of sex trafficking conspiracy; three counts of sex trafficking of minors by force, fraud or coercion; one count of transporting minors to engage in prostitution; and one count of obstruction of justice.
The counts for sex trafficking of minors by force, fraud, or coercion are punishable by a mandatory minimum of fifteen years in prison to life and the transportation count is punishable by a mandatory minimum of ten years in prison to life. U.S. District Judge Sharon Johnson Coleman will schedule a sentencing hearing at a later date.
Woods is among three defendants charged in the case. MALIK McKEE and his sister, SHUNTINA McKEE, both of Iowa City, previously pleaded guilty to one count of sex trafficking conspiracy. Judge Coleman sentenced Malik McKee to 102 months in prison, plus restitution of $6,000. Shuntina McKee is awaiting sentencing.
Evidence at Woods’ trial revealed that the defendants forced the minor girls to engage in prostitution in Iowa and Chicago. The defendants took photographs of the minors and used them in advertisements on websites, including Backpage.com. When a prospective “date” responded to the advertisement, the defendants arranged the meeting and then pocketed the proceeds.
The three minor girls testified at trial about their ordeals. The girls described the defendants’ violent and abusive acts, which included using power and coercion to force the girls to perform sex acts for money. One of the girls testified that Woods starved her by withholding food until she would submit to his demands to engage in prostitution.
The conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Garry F. McCarthy, Superintendent of the Chicago Police Department. The FBI and Chicago Police conducted the investigation, in coordination with the Cook County Human Trafficking Task Force. Federal prosecutors and law enforcement authorities in the Southern District of Iowa and the Northern District of Ohio also provided assistance.
The government is represented by Assistant United States Attorneys Megan Cunniff Church and Bethany Biesenthal.