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5 November 2015
California Man Sentenced for Sex Trafficking in BillingsRead the Press Release
BILLINGS – Taj Tesfaye Hayes, 39, of Oceanside, California, was sentenced today in Billings federal court to prostitution-related racketeering charges. On July 31, Hayes pleaded guilty to one count of interstate travel in aid of racketeering. U.S. District Court Judge Susan Watters Sentenced Hayes to 18 months incarceration and 2 years supervised release.
In an offer of proof filed by Assistant U.S. Attorney Cyndee Peterson, the government stated that if the case had proceeded to trial, the government would have produced evidence that Hayes traveled in interstate commerce with the intent to promote, manage, establish, carry on or facilitate prostitution. Specifically, the government was prepared to prove that on February 20, 2015, Hayes rented a car in Oceanside, California. On March 25, Hayes drove the rental car to Las Vegas and then to Salt Lake City with a woman. While in Salt Lake City on the night of March 26, Hayes and the woman posted advertisements for commercial sex with the woman on www.backpage.com, an online classified ad site. On March 27, 2015, Hayes drove with the woman to Billings. They again posted advertisements on www.backpage.com advertising commercial sex with the woman.
An undercover FBI agent responded to the advertisement. The agent negotiated a price and arranged to meet the woman at the Crowne Plaza hotel in Billings. Agents met the woman and Hayes at the hotel and both were questioned. Both Hayes and the woman denied knowing one another, despite evidence to the contrary, including luggage containing male and female attire in the woman’s hotel room, two baseball caps in Hayes’ backpack that had been worn by the woman in the backpage.com ads, and a debit card issued in the woman’s name tucked into the hat Hayes was wearing. One of the Agents called the number listed in the backpage.com ad, and it rang to a phone taken from Hayes.
This case was prosecuted by Assistant U.S. Attorney Cyndee Peterson and investigated by the Federal Bureau of Investigation and the Montana Division of Criminal Investigation as part of an operation targeting sex trafficking in the Billings area.
California Man Pleads Guilty to Producing Child PornographyRead the Press Release
A Yuba City, California, man pleaded guilty today to producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Benjamin B. Wagner of the Eastern District of California, Special Agent in Charge Ryan Spradlin of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) San Francisco Field Division and Chief of Police Robert D. Landon of the Yuba City, California, Police Department.
Nathan Penner, 25, pleaded guilty today before U.S. District Judge Troy L. Nunley of the Eastern District of California to one count of production of child pornography. The sentencing hearing is set for Jan. 21, 2016.
In connection with his plea, Penner admitted that he produced sexually explicit photos and videos of a five-year-old girl in September and October of 2012. Penner further acknowledged that he had downloaded child pornography. Subsequent forensic analysis of Penner’s computer and digital media revealed both the child pornography that he produced and hundreds of other child pornography files.
This case is being investigated by HSI and the Yuba City Police Department. This case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Special Assistant U.S. Attorney Josh F. Sigal of the Eastern District of California. CEOS’ High Technology Investigative Unit assisted with computer forensic analysis for the case.
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 the U.S. Attorneys’ Offices and 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.
Business Owner Pleads Guilty After Customers' Information is Stolen in Bank Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former business owner in Sparta, Mo., pleaded guilty in federal court today to his role in allowing his customers’ information to be stolen and used to promote a bank fraud scheme that used stolen mail and fake identifications to cash nearly $160,000 in fraudulent checks in Webster County, Mo., and elsewhere.
James Erin Guerin, also known as “Shorty,” 41, of Tulsa, Okla., formerly of Sparta, pleaded guilty before U.S. Magistrate Judge David P. Rush to being an accessory after the fact to aggravated identity theft.
Guerin was the owner of Rogersville Septic Services, LLC.
Co-defendant Phillip Daren Shockey, 50, of Crawford, Ark., was released from federal custody in Arkansas on July 31, 2013. Guerin paid Shockey’s $5,000 bond and Shockey was mandated to live with Guerin in Sparta. Shockey, who had been in federal custody in Arkansas for wire fraud, began to create fictitious financial documents using bank accounts and routing numbers of legitimate customers of Guerin’s plumbing business.
Shockey and those working at his direction passed and attempted to pass approximately 51 fraudulent checks for a loss of at least $159,842.
In August and September 2013, Guerin became aware that Shockey had taken the bank account and routing numbers from his plumbing business customers and was using them to produce fictitious financial documents such as bogus checks drawn upon the customers’ bank accounts. After learning of Shockey’s use of his customers’ bank accounts, Guerin continued to provide comfort and assistance to Shockey. Shockey was given sanctuary at Guerin’s residence to continue his illegal operation.
Shockey pleaded guilty on Jan. 14, 2015. Shockey admitted that he was the leader of the conspiracy to defraud more than a dozen banks from July 31, 2013, to Feb. 28, 2014, by passing counterfeited and forged checks with fake identification documents. At least 12 co-conspirators stole mail, printed counterfeit checks, passed counterfeit checks with fake identification and opened at least five fictitious businesses for the sole purpose of concealing the deposit and subsequent withdrawal of counterfeit checks.
Shockey recruited co-conspirators to steal mail and act as “check runners” who used false identity documents in order to cash fraudulent checks drawn upon the accounts of bank customers. Shockey possessed computers, printers, scanners, cell phones, thumb drives, stolen mail and software in order to produce fraudulent identification and checks for his co-conspirators. Shockey also used false identifications of the banks’ customers and others in order to pass and attempt to pass fraudulent checks.
Guerin is the final defendant to plead guilty in this case. Michael Anthony Spears, 36, of Fort Smith, Ark., was sentenced to seven years in federal prison without parole. Donald Allen Spears, 34, of Columbia, Mo., was sentenced to two years and three months in federal prison without parole. Laura Goines, 32, of Tulsa, was sentenced to time served. Amanda Brook Roberts, 30, of Tulsa, also has pleaded guilty and awaits sentencing.
Under federal statutes, Guerin is subject to a sentence of up to one year in federal prison without parole, plus a fine up to $100,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the U.S. Secret Service Financial Crimes Task Force, the U.S. Postal Service – Criminal Investigations, the Springfield, Mo., Police Department, the Missouri State Highway Patrol, the Tulsa, Okla., Police Department, the Jasper County, Mo., Sheriff’s Office, the Webster County, Mo., Sheriff’s Office, the Greene County, Mo., Sheriff’s Office, the Columbia, Mo., Police Department, the Blue Springs, Mo., Police Department, the Monett, Mo., Police Department, the Pierce City, Mo., Police Department, the St. Clair County, Mo., Sheriff’s Department, the Rolla, Mo., Police Department and the Catoosa, Okla., Police Department.
Buffalo Man Sentenced for Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Timothy W. Marlnee, 58, of Buffalo, NY, who was convicted of possession of child pornography following a previous state conviction, was sentenced to 200 months in prison and 10 years of supervised release by U.S. Senior District Judge Richard J. Arcara.Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that on November 13, 2013, law enforcement officers searched the defendant’s residence on Chippewa St. in Buffalo. Officers recovered a laptop computer being used by Marlnee. A subsequent forensic examination determined that the computer contained 952 images of child pornography. Some of the images depicted children under the age of 12 years old. Some of the images also contained depictions of violence.
Marlnee is a registered sex offender as a result of state convictions in 1985 and 1993 for statutory rape.
The sentencing is the culmination of an investigation by the Federal Bureau of Investigation’s Child Exploitation Task Force, which includes the Buffalo Police Department, Cheektowaga Police Department, and Niagara County Sheriff’s Office.Buffalo Brothers Sentenced for Food Stamp FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Bandar Alsaidi, 28, and his brother, Talal Alsaidi, 31, both of Buffalo, who were convicted of unauthorized use of food stamp benefits, were sentenced by U.S. District Judge Richard J. Arcara. Bandar Alsaidi was sentenced to 12 months in prison. Talal Alsaidi was sentenced to two years of probation with five months of home detention. Both defendants were ordered to make restitution to the U.S. Department of Agriculture (USDA) in the amount of $147,658.28 for a total of 295,316.56.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that the Alsaidi brothers participated in the operation of the business known as Big Boys Food Market located at 1129 East Ferry Street in Buffalo. On November 18, 2011, Bandar Alsaidi signed an application to accept food stamps as the sole proprietor of Big Boys. The application was authorized on January 18, 2012. With this approval, retailers are prohibited from exchanging cash for food stamps.
Between April 2012 and May 2013, the defendants, and others, knowingly purchased food stamp benefits for less than their full value for cash from eligible beneficiaries. The defendants, and others, engaged in approximately $671,174 of legitimate and illegitimate transactions for the time period in question. Of this total value, each defendant knew that approximately $147,658.28 of their acquisition or possession of food stamp benefits was unauthorized.
The sentencing is the result of an investigation by the USDA, Office of Inspector General under the direction of Special Agent in Charge William G. Squires Jr. and Immigration and Customs Enforcement, Homeland Security Investigation, under the direction of Special Agent in Charge James C. Spero.
Bozeman Man Convicted of Illegal Possession of an Un-Registered Machine GunRead the Press Release
BILLINGS – Following a three day federal trial, a Montana jury found William Krisstofer Wolf, 53, of Bozeman, guilty on two counts: Illegal Possession of a Machine Gun and Possession of a Firearm not Registered in the National Firearms Registration and Transfer Record. Judge Susan Watters presided over the trial. Sentencing is set for March 3, 2016.
At trial, the government introduced evidence that Wolf had repeatedly expressed an intent to acquire and possess dangerous weapons, including flamethrowers, incendiary ammunition, and napalm, and ultimately did acquire the fully automatic sawed-off shotgun that lead to his arrest.
In his weekly online radio show, named “The Montana Republic,” Wolf discussed his anti-government views and his plans to overthrow local, state, and federal governments by force. He advocated the affirmative targeting of law enforcement officers and stated on numerous occasions that he considered agents of local, state, and federal government to be the enemies. After holding a “committee of safety meeting” on January 29, 2015, Wolf stated in his “extreme movement…my preferred method would be to drop 500 pounds of napalm through the roof of the courthouse and burn it to the ground and roast some marshmallows on it.” He also told people at the meeting, that “my great fatal flaw is I’m gonna’ tell you what I’m going to do to you, and the bottom line is, I do it to you.”
In pursuance of his aims, Wolf stated his intent to acquire the “most devastating weapons he could use” including machine guns and flamethrowers. The FBI arranged for Wolf to meet a Confidential Informant (“CI”), who posed as a like-minded individual in order to determine Wolf’s true intentions. Over time, Wolf communicated to the CI his desire to obtain or build a “blowtorch gun” or flamethrower which could be used to target law enforcement officials and vehicles including the Bozeman Police Department’s recently acquired BearCat vehicle. Wolf agreed to be introduced to a friend of the CI who could help him obtain these items. The CI’s “friend” was actually an undercover FBI agent known only to Wolf as “Dirty.” During his discussions with both the CI and Dirty, Wolf demonstrated his knowledge of flamethrowers, how to make napalm, and fully automatic weapons, including his ability to describe in detail the merits and functionality of such weapons. Dirty offered to help Wolf procure a flamethrower; Wolf responded, “try to get me a Russian automatic shotgun too.” During a subsequent meeting with Dirty, Wolf stated his preference for the Saiga 12 fully automatic shotgun. Wolf also told Dirty that any fully automatic shotgun “will handle most riot crowds and cops.” When Dirty told Wolf that there would be “no paper” with the sale, Wolf replied, “I love that.” Wolf later sent a text message to the CI that he wanted a military-grade (sawed off) barrel on the machine gun he had previously requested from Dirty.
The FBI obtained a Saiga 12 by modifying a semi-automatic shotgun with a standard barrel to the specifications requested by Wolf. The FBI agent made a video demonstrating the fully automatic capabilities of the gun and forwarded it to the CI. The CI showed Wolf the video. The CI told Wolf he would have to pay an additional $125 for the conversion to fully automatic. Wolf readily agreed. Wolf communicated to the CI that he intended to build a flamethrower to mount under the barrel of the shotgun and observed that the shortened barrel was ideal for this purpose. Wolf stated, “the purpose of the gun is not to go hunting with, it’s to clean house.” Wolf agreed to purchase the gun. On March 25, 2015, Wolf met the FBI agent at a truck stop in Livingston, Montana. The agent communicated to Wolf that the weapon had been modified from semi-automatic to fully automatic, which Wolf acknowledged. Minutes before taking possession of the machine gun, Wolf told the agent, “I just need to kill the public officials.” The FBI agent also told Wolf that the weapon was an illegal firearm. Undeterred, Wolf paid the agent and transferred the firearm to his vehicle, at which point he was arrested by the FBI.
At trial, the government used a combination of Wolf’s recorded radio show, excerpts of his conversations with the CI and undercover FBI agent, and post-arrest recordings to demonstrate to the jury that Wolf was aware of the features of the gun that brought it within the scope of the statute requiring registration.
“The members of this Montana jury have sent a strong message that those, like Mr. Wolf, who seek anarchy and violence, and who willingly break federal firearms laws will not be tolerated in Montana,” said Montana U.S. Attorney Mike Cotter. “The agents of the Federal Bureau of Investigation are to be commended for their diligent work and effort in this investigation.”
The case was prosecuted by Assistant U.S. Attorney Bryan Whittaker and Trial Attorney Danya Atiyeh, from the Counterterrorism Section, National Security Division, of the United States Department of Justice. The case was investigated by the FBI with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Berkeley County man convicted of oxycodone traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Earl Ferguson, 46, of Inwood, West Virginia, was convicted of prescription painkiller trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Ferguson sold oxycodone in July 2015 in Berkeley County, West Virginia. He pled guilty today to one count of “Distribution of Oxycodone.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Anna Krasinski prosecuted the case on behalf of the government. The Federal Bureau of Investigation and the Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Bergen County, New Jersey, Woman Charged with Tax Evasion, Defrauding Two New York Law Firms Out of $7.8 MillionRead the Press Release
NEWARK, N.J. - A Newark federal grand jury today indicted an Englewood Cliffs, New Jersey, woman for tax evasion and using bogus litigation support companies to obtain millions from two law firms where she was a partner, U.S. Attorney Paul Fishman announced.
Keila Ravelo, 50, is charged by indictment with one count of conspiracy to commit wire fraud, four counts of wire fraud and four counts of tax evasion. Ravelo and her husband, Melvin Feliz, 49, also of Englewood Cliffs, were originally arrested and charged by complaint on Dec. 22, 2014 with conspiracy to commit wire fraud.
According to documents filed in the case and statements made in court:
Ravelo worked as a partner for a company identified in the indictment as “Law Firm 1” from July 1, 2005 through October 2010. She then became partner for another company identified as “Law Firm 2” and worked there from October 2010 through November 2014.
From 2008 through July 2014, Ravelo and Feliz allegedly formed two limited liability companies, “Vendor 1” and “Vendor 2,” which purported to provide litigation support for both firms, but in fact provided no actual services. Ravelo and Feliz controlled Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1, Law Firm 2 and a client of both firms for work that was never performed. Ravelo, in her capacity as a partner at the law firms, allegedly approved payments to Vendor 1 and Vendor 2, which Ravelo and Feliz later used for personal expenses.
Over the course of the conspiracy, the law firms paid Vendor 1 and Vendor 2 a combined total of approximately $7.8 million. The indictment further alleges that Ravelo willfully failed to report the fraudulent earnings on her tax returns.
The conspiracy charge and each count of wire fraud are punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The tax evasion charges are each punishable by a maximum potential penalty of five years in prison and a $100,000 fine.
The charges and allegations in the indictment are merely accusations, and Ravelo is considered innocent unless and until proven guilty.
On Aug. 25, 2015, Feliz pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion. His sentencing is currently scheduled for Dec. 14, 2015.
U.S. Attorney Fishman credited law enforcement officers of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Carl Kotowski, and law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.
The government is represented by Assistant U.S. Attorneys Ronnell Wilson, Andrew Kogan, and Brian Urbano of the U.S. Attorney’s Office Criminal Division, Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit, and Assistant U.S. Attorney David Foster of the U.S. Attorney’s Office Special Prosecution’s Division in Newark.
Defense counsel: Lawrence S. Lustberg Esq., Newark, and Steven H. Sadow Esq., Atlanta, Georgia
Baltimore Drug Trafficker ConvictedRead the Press Release
Baltimore, Maryland – A federal jury today convicted Mario Lamar Wair, a/k/a “Unda,” age 42, of Baltimore, for conspiracy to distribute and possess with intent to distribute cocaine and crack cocaine; and for possession with intent to distribute cocaine and crack cocaine.
The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to evidence presented at his four day trial, from no later than June 2013 through June 2014, Wair conspired with Kareem Moore, and others to distribute cocaine and crack cocaine in southwest Baltimore. Kareem Moore and other co-defendants operated a street-level drug shop that sold crack cocaine daily to customers. Trial evidence showed that Wair supplied two to three ounces of cocaine to Moore, two to three times per week. Moore cooked the cocaine into crack cocaine, which was then sold to other distributors and in user-quantity amounts to street level customers.
According to the trial evidence, Wair and his co-conspirators distributed 500 grams of cocaine and 280 grams of crack cocaine.
Wair faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life years in prison for the conspiracy; and a mandatory minimum of five years and a maximum of 40 years in prison for possession with intent to distribute cocaine and crack cocaine. U.S. District Judge George L. Russell, III, scheduled sentencing for January 22, 2016, at 2:00 p.m.
Kareem Moore pleaded guilty before trial and is scheduled to be sentenced on January 6, 2016, a6 2:00 p.m. Eight other co-defendants have also pleaded guilty to their participation in the conspiracy.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Seema Mittal and Leo J. Wise, who prosecuted the case.
Army Captain Pleads Guilty to Gratuities ChargeRead the Press Release
A Colorado Springs, Colorado, man pleaded guilty today in federal court before U.S. District Judge Terrence W. Boyle of the Eastern District of North Carolina to solicitation and receipt of a gratuity, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.
In connection with his plea, Captain David Anthony Kline, 32, admitted that while serving as a first lieutenant in the U.S. Army stationed at Kandahar Air Field (KAF) in Afghanistan, he sought and accepted $50,000 in gratuities from a contractor who was doing business with the U.S. military. Specifically, from January 2008 to April 2009, then-1st Lt. Kline was deployed to KAF where he oversaw the handling of transportation movement requests (TMRs) directing the transport of supplies from one location to another across Afghanistan. Although contracting procedures technically did not permit the authorizing officer to specify the particular Afghan trucking company that would perform the transportation, in practice, Kline and others were able to designate the Afghan company of their choice. Kline admitted that he sought and accepted $50,000 in U.S. currency from an Afghan national who owned a trucking company doing business on government contracts at KAF, in return for Kline’s facilitation of the award and payment of numerous transportation contracts.
The case was investigated by the Defense Criminal Investigation Service, Army Criminal Investigation Command, the Special Inspector General for Afghanistan Reconstruction and FBI. The case was prosecuted by Trial Attorney Wade Weems of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina.
Army Captain Pleads Guilty to Gratuities ChargeRead the Press Release
Raleigh – United States Attorney Thomas G. Walker announced that in federal court today, DAVID ANTHONY KLINE, 32, of Colorado Springs, Colorado, pled guilty before United States District Judge Terrence W. Boyle to solicitation and receipt of a gratuity and aiding and abetting the same, all in violation of Title 18, United States Code, Sections 201(c)(1)(B) and 2.
According to the Criminal Information filed on September 9, 2015, and information presented in open court, DAVID ANTHONY KLINE, while serving as a First Lieutenant in the United States Department of the Army and stationed at Kandahar Air Field, in Afghanistan, did seek and accept $50,000 in gratuities from a contractor doing business with the United States military. Specifically, from January 2008 to April 2009, then-Lieutenant KLINE was deployed to Kandahar Air Field (KAF), Afghanistan as a member of the 189th Combat Sustainment Support Battalion (189th CSSB), and he served as the Officer-in-Charge (OIC) of the Movement Control Team. The 189th CSSB is based at Fort Bragg and KLINE deployed to Afghanistan from Fort Bragg. KLINE has since been promoted to the rank of Captain.
As the OIC, KLINE oversaw the handling of Transportation Movement Requests, or TMRs, which are the means by which a military unit in the field submits a request for the transport of military items, to include fuel and equipment, food and other supplies, from one location to another across Afghanistan.
Although contracting procedures technically did not permit the authorizing officer to specify the particular Afghan trucking company that would perform the transportation, in practice, Kline and others were able to designate the Afghan company of their choice. KLINE admitted that he sought and accepted $50,000 in U.S. currency from an Afghan national who owned a trucking company doing business on government contracts at KAF, in return for KLINE’S facilitation of the award and payment of numerous transportation contracts.
Inspector General John Sopko of the Special Inspector General for Afghanistan Reconstruction (SIGAR) stated: "Stealing from the U.S. government undermines our mission in Afghanistan,
plain and simple. Not only did Captain Kline seek to defraud American taxpayers and abuse his position of authority as an officer, but he also put his fellow soldiers in harm's way by stealing vital resources that are needed for legitimate operations."
"As a First Lieutenant in the U.S. Army, David Kline had an obligation not only to conduct business in the best interest of his country, but also for those service men and women he was responsible for in Afghanistan. Anyone willing to misuse government resources for their own profit will be held accountable," said John Strong, Special Agent in Charge of the FBI in North Carolina.
"The Defense Criminal Investigative Service (DCIS) aggressively pursues those who tarnish the reputation of the U.S. Department of Defense abroad as our Warfighters serve honorably to accomplish our global missions," said DCIS Special Agent in Charge John F. Khin. "Corruption and theft in a combat environment degrade the effectiveness of the U.S. Armed Forces."
The case was investigated by the Defense Criminal Investigation Service (DCIS), Army Criminal Investigation Command (CID) Major Procurement Fraud Unit, the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR), and the Federal Bureau of Investigation (FBI). The case was prosecuted by Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Wade Weems of the U.S. Department of Justice Criminal Division’s Fraud Section.
Amherst Company Pleads Guilty to Criminal ContemptRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Acquest Transit, LLC, based in Amherst, NY, pleaded guilty to criminal contempt, before Senior U.S. District Judge William M. Skretny. The charge carries a maximum sentence of a fine of $500,000 and five years probation.Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that Acquest Transit, LLC, was established to purchase an approximately 97-acre piece of property at 10880 Transit Road in Amherst. William L. Huntress served as the sole member and manager of Acquest Transit, LLC. On January 20, 2006, the defendant purchased the site for $425,000.
In 2009, the Department of Justice instituted a civil proceeding alleging that the site purchased by Acquest contained federally protected wetlands. The civil action further alleged that the company was engaging in prohibited filling of the wetlands.
On July 15, 2009, Judge Skretny issued a preliminary injunction ordering the defendant not to place additional fill or perform any additional earthmoving work at the site. On May 25, 2010, a farmer, acting on behalf of the defendant, performed mechanized activities on the site with agricultural equipment. These actions were a violation of Judge Skretny’s order, and the defendant acted willfully in violating the order.
The plea is the culmination of an investigation by the Environmental Protection Agency under the direction of Special Agent in Charge, Vernesa Jones-Allen.
Sentencing is scheduled for March 9, 2016 at 10:00 a.m. before Judge Skretny.
2015 Red Ribbon EventsRead the Press Release
Each year communities nationwide join together to raise awareness about the dangers of drug abuse by wearing a red ribbon from October 23 to October 31, which is the National Red Ribbon Week. The first Red Ribbon celebration was organized in 1986 by a grassroots organization of parents concerned about the destruction caused by alcohol and drug abuse. The red ribbon was adopted as a symbol of the movement in honor of Enrique “Kiki” Camarena, an agent with the U.S. Drug Enforcement Administration who was kidnapped and killed while investigating drug traffickers. The Campaign has reached millions of children and has been recognized by the U.S. Congress for its efforts and achievements. In Guam and the NMI, Red Ribbon Week is an opportunity to be visible and vocal in our desire for a drug-free community. Research shows that children are less likely to abuse alcohol and other drugs when parents and other role models are clear and consistent in their opposition to substance use and abuse. The Campaign provides communities with a forum to bring together parents, schools and businesses to find new and innovative ways to keep kids drug free.
The Red Ribbon Committees in Guam and the NMI consist of local and federal agencies and private and non-profit organizations that have partnered to increase awareness of the National Red Ribbon Campaign’s significance and promote a drug-free community. On Guam, the observance of the Red Ribbon Week is extended beyond one week, with events occurring throughout the month of October. Simon Sanchez High School was last year’s Gate/Wall Decorating Contest Winner. The Red Ribbon Campaign kicked off with a Proclamation Signing on September 28, 2015, at Simon Sanchez High School in Yigo. This event was attended by Lt. Governor Raymond Tenorio, other dignitaries and Red Ribbon Committee members.
U.S. Attorney Limtiaco made presentations at Dandan Middle School in Saipan, NMI, together with personnel from the U.S. Probation Office. Assistant U.S. Attorney Rosetta San Nicolas and Red Ribbon Guam Coalition members also made a presentation at Okkudo High School in Guam. Other Red Ribbon Committee members made presentations at many other elementary, middle and high schools on Guam. Students learned about the dangers of drugs and were encouraged to be drug and alcohol free.
In addition to the school outreaches, the following activities were also held in celebration of the Red Ribbon Campaign 2015 in Guam: National Prescription Drug Take Back Day; Drawing Contest and School Gate Decorating Contest; Community Outreach at the Micronesia Mall, which included the distribution of free gunlocks; Wear Red Day; Red Ribbon Wave in Hagatna; Say “Boo” to Drugs at the Agana Shopping Center; Drawing Contest and School Gate Decorating Contest Winners Award Presentation; and various TV and radio appearances.
The following are photos taken at the various events.
Dignitaries awaiting the start of the Red Ribbon events at Simon Sanchez High School in Guam. From left: Principal Carla Masnayan, Senator Frank Aguon, Jr., Lt. Governor Raymond Tenorio, Acting DEA Resident Agent in Charge Dave Stubbs, Supreme Court of Guam Chief Justice Robert Torres, and Lt. Yin of the Guam Army National Guard U.S. Attorney Alicia Limtiaco looks on as students take the pledge on gun safety, which was also being promoted at the Red Ribbon Campaign
Members of the Red Ribbon Committee with students of the Guam Community College’s sign language class who performed several numbers at the Red Ribbon Campaign Outreach at the Micronesia Mall in Guam Some of the students who joined the Red Ribbon Campaign WAVE in Hagatna, Guam Police Recruits supporting the Red Ribbon Campaign WAVE in Hagatna, Guam AUSAs Rosetta San Nicolas and Stephen Leon Guerrero participated at the school outreach at Machanaonao Elementary School in Guam U.S. Attorney Alicia Limtiaco at the school outreach at Dandan Elementary School in Saipan, NMI Say “Boo” To Drugs event at the Agana Shopping Center in Guam An aerial view of the Say “Boo” to Drugs event at the Agana Shopping Center in Guam U.S. Attorney Alicia Limtiaco and Red Ribbon Committee members at the Say “Boo” To Drugs event at the Agana Shopping Center in Guam
4 November 2015
“Pimp” and “John” Convicted in Child Sex Trafficking Conspiracy Involving 12-Year-Old Female VictimRead the Press Release
DALLAS — Following a three-day trial before U.S. District Judge Jane J. Boyle, a federal jury has convicted an Irving, Texas, man for his role in a conspiracy to commit sex trafficking of a female child. His co-defendant in the case pleaded guilty to his role in the conspiracy. U.S. Attorney John Parker of the Northern District of Texas made the announcement this afternoon.
The jury convicted Brady Rodriguez-Cruz, a/k/a Marcos Antonio Rodriguez-Mejia, 33, on one count of conspiracy to commit sex trafficking of children. He also pleaded guilty to one count of possession of counterfeit documents. On October 22, 2015, Luis Rivera, 19, also of Irving, pleaded guilty to one count of conspiracy to commit sex trafficking of children.
In the conspiracy, Rodriguez-Cruz acted as the “john,” and Rivera acted as the “pimp.” The government presented evidence at trial that from approximately December 23, 2014, through December 25, 2014, Rodriguez-Cruz and Rivera agreed to cause Jane Doe, a 12-year-old child, to engage in a commercial sex act.
Rivera met Jane Doe, along with three other minor females, in Irving. Shortly after he met the minor females, Rivera learned that Jane Doe was 12-years-old. Rivera and his friends, including one minor friend, took the four minor females to an empty apartment in Irving, where they stayed overnight. The minor females had no money, so they were not able to eat that day.
The next day, the group left the abandoned apartment and went to Rivera’s minor friend’s apartment, and Rivera told the four minor females that they needed to engage in commercial sex acts to earn money for food. Rivera then made several phone calls seeking potential commercial sex customers for the minor females. He planned to charge $100 for sexual intercourse with one of the minors. Rivera reached Rodriguez-Cruz and Rodriguez-Cruz agreed to come to the location to engage in a commercial sex act. Rodriguez-Cruz brought another man with him to the apartment. Rivera told the four minor females to line up so the men could select who they wanted to have sex with, and Rodriguez-Cruz selected the youngest girl, 12-year-old Jane Doe. Rodriguez-Cruz then negotiated the price for sex with a girl down to $50. Shortly thereafter, he engaged in commercial sex acts with Jane Doe, paid Rivera and his minor male friend approximately $50, and hastily left.
The government also presented evidence at trial that on January 28, 2015, when officers with the Irving Police Department executed a traffic stop on a vehicle driven by Rodriguez-Cruz, they found him in possession of an unlawfully obtained, counterfeit U.S. Permanent residence card. That card was issued in another name but bore Rodriguez-Cruz’s photograph.
The conspiracy count carries a maximum statutory penalty of life in federal prison and a $250,000 fine. The counterfeit documents count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Rivera is scheduled to be sentenced by Judge Boyle on February 4, 2016, and Rodriguez-Cruz’s sentencing date has not been set.
The Irving Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), both members of the North Texas Trafficking Taskforce, investigated the case. Assistant U.S. Attorneys Cara Foos Pierce and John Kull prosecuted.
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Yakima Man Sentenced to 15 Years in Federal Prison for Being an Armed Career CriminalRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Ronald Alex Phillips, age 48, of Yakima, Washington, was sentenced today for being a previously convicted felon in possession of a firearm. United States District Court Judge Stanley A. Bastian sentenced Phillips to a 15-year term of imprisonment pursuant to the Armed Career Criminal Act, and a five year term of court supervision following release from Federal prison.
According to information disclosed during the court proceedings, on March 28, 2015, Phillips, a previously convicted felon, threatened to shoot a woman at an AM/PM mini-mart in Yakima, Washington. He approached the woman, made a derogatory comment to her, then stated: “I’m going to shoot you.” Phillips lifted up his shirt and revealed a firearm in his waistband. Following a 911 call, Yakima Police Department officers responded to the scene and arrested Phillips, who was in possession of a firearm. Phillips has dozens of prior criminal convictions ranging from drug trafficking and robbery to assault and theft.
Michael C. Ormsby said, “Prosecuting firearms-related crimes continues to be a priority for the United States Attorney’s Office for the Eastern District of Washington. In this
case, the Yakima City Police Department partnered with Special Agents working for the Bureau of Alcohol, Tobacco, Firearms and Explosives to successfully prosecute this Federal case. Previously convicted felons should be aware that there are serious criminal penalties connected with possessing any firearm and that this Office is committed to prosecuting aggressively firearms-related cases in the Eastern District of Washington.”
The case was investigated by the Yakima City Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Ian L. Garriques, an Assistant United States Attorney for the Eastern District of Washington.
Wilson Man Sentenced for Drug TraffickingRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced that today in federal court, Senior United States District Judge James C. Fox sentenced THurman ray bohne, jr., 48, of Wilson, North Carolina to 162 months imprisonment, followed by 10 years of supervised release.
bohne was named in an Indictment filed on January 7, 2015 charging him with Conspiracy to Distribute and Possess With Intent to Distribute 5 Kilograms or more of Cocaine. On June 29, 2015, bohne pled guilty to that charge.
According to the investigation, BOHNE and his co-conspirators distributed over 13 kilograms of cocaine in the Wilson, North Carolina area from 2007 to 2012.
Investigation of this case was conducted by the Drug Enforcement Administration, the Wilson County Sheriff’s Office, the Wilson Police Department, and the Greenville Police Department. Assistant United States Attorney Lawrence J. Cameron represented the government.
Wendell Woman Sentenced for Tax FraudRead the Press Release
Raleigh – United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise Flanagan sentenced KIMBERLY NICOLE TORRES, 40, of Wendell, North Carolina to 52 months imprisonment; 3 years supervised release, and $104,624 restitution. On April 16, 2015, TORRES pled guilty to False, Fictitious and Fraudulent Claim for Refund. Evidence presented at TORRES’ plea and sentencing showed that TORRES used the identities of others, often without their knowledge, to prepare and file fraudulent tax returns.
U.S. Attorney Walker stated, “Our tax system relies on the honesty of tax payers with a heightened duty of honesty expected from professional tax preparers. Whenever someone like TORRES deliberately files false returns, the U.S. Attorney’s Office in support of the IRS will pursue the matter through the Courts as provided by our laws.”
The criminal investigation of this case was conducted by Internal Revenue Service Criminal Investigation and United States Secret Service. Assistant United States Attorney David Bragdon handling the case on behalf of the government.
U.S. Court of Appeals Affirms Conviction of Former Rio Arriba County Sheriff Thomas R. RodellaRead the Press Release
ALBUQUERQUE – The U.S. Court of Appeals for the Tenth Circuit has affirmed the conviction of Thomas R. Rodella, 53, the former Rio Arriba County Sheriff, on criminal civil rights and firearms charges.
Rodella was convicted on Sept. 26, 2014, by a jury on a two-count indictment arising out of a March 11, 2014 incident occurring in Rio Arriba County, N.M., during which Rodella engaged in an unjustified high-speed pursuit and unreasonable seizure of a victim. Count 1 of the indictment charged Rodella with violating the victim’s civil rights by subjecting him to an unreasonable seizure while acting under color of law. Count 2 charged him with brandishing a firearm during a crime of violence. Rodella was the Sheriff of Rio Arriba County when the jury returned its guilty verdict. He resigned from his position as Sheriff on Sept. 29, 2014.
The trial evidence established that on March 11, 2014, Rodella and his son Thomas Rodella, Jr., who were in Rodella’s personal vehicle, engaged in an unjustified high-speed pursuit of the victim and used the vehicle to block the victim’s vehicle on a dead-end lane. Rodella, who was not in uniform, jumped out of his vehicle with firearm in hand, entered the victim’s vehicle, and assaulted the victim with the firearm. Rodella, Jr., dragged the victim out of his vehicle and identified the victim’s assailant as the Sheriff. When the victim requested to see Rodella’s badge, Rodella pulled the victim’s head up by his hair and slammed his badge into the victim’s face. The victim suffered injuries to his face and his hand as a result of the assault; the injury to the victim’s hand required surgical repair.
On Jan. 21, 2015, Rodella was sentenced to 37 months in prison for his deprivation of rights conviction and an additional 84 months for brandishing a firearm while committing the civil rights offense, for an aggregate sentence of 121 months of imprisonment. Rodella also was ordered to pay a $200,000.00 fine.
The case was investigated by the Albuquerque and Santa Fe offices of the FBI and was prosecuted by Assistant U.S. Attorneys Tara C. Neda and Jeremy Peña. Assistant U.S. Attorney Peña represented the United States on appeal.
Two Members of Illegal International Gambling Enterprise Convicted of Racketeering ConspiracyRead the Press Release
A federal jury in Oklahoma City convicted two individuals today for their participation in a scheme involving illegal gambling, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sanford C. Coats of the Western District of Oklahoma.
Kelly Dorn, 53, of Oklahoma City, and Kory Koralewski, 45, of Parker, Colorado, were found guilty of racketeering conspiracy. Dorn was additionally convicted of conducting an illegal gambling business. A sentencing hearing has not yet been set.
According to the trial evidence, from 2003 to 2013, Dorn and Koralewski conspired with others to operate Legendz Sports, an international criminal enterprise that ran Internet and telephone gambling services from Panama City. Legendz Sports took more than $1 billon in illegal wagers, almost exclusively from gamblers in the United States betting on American sporting events. Dorn worked as a bookie in Oklahoma who illegally solicited and accepted sports wagers as well as settled gambling debts. Koralewski facilitated the movement of illegal gambling proceeds from the United States to Panama.
The case was investigated by the FBI and Internal Revenue Service-Criminal Investigation, with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Marshals Service.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Special Assistant U.S. Attorney Robin L. Summer and Assistant U.S. Attorney Travis D. Smith of the Western District of Oklahoma.
Two Caldwell Men Sentenced to Prison for Firearms OffensesRead the Press Release
BOISE – Gustavo Collado Rodriguez, 20, and David Angel Prieto, 22, both of Caldwell, Idaho, were sentenced today for unlawful possession of a pistol and a sawed-off shotgun, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge sentenced Rodriguez to 60 months in prison, and sentenced Prieto to 36 months in prison followed by three years of supervised release. Both defendants pleaded guilty on August 11, 2015.
According to court documents, Prieto and Rodriguez went to a residence in Caldwell, Idaho, where Rodriguez demanded money and pointed a pistol at the occupant of the home. Prieto and Rodriguez fled before police officers arrived, but officers were able to track them by following footprints in the snow to a nearby shed. Inside the shed, officers found Rodriguez and Prieto along with a sawed-off 12 gauge shotgun and a 9 millimeter pistol with a high capacity magazine loaded with hollow point ammunition. Rodriguez is prohibited from possessing firearms because he is an alien illegally and unlawfully in the United States. Prieto is prohibited from possessing firearms because he was previously convicted of the felony crime of possession of a controlled substance. According to information presented in court, both Prieto and Rodriguez associate with a criminal gang. Judge Lodge ordered Prieto to have no contact with criminal gangs upon his release from prison. Rodriguez will likely be deported after serving his prison sentence because he was unlawfully in the United States. The firearms involved in the offense were forfeited.
The case was investigated by the Caldwell Police Department and the Treasure Valley Metro Violent Crimes Task Force. The Treasure Valley Metro Violent Crime Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole.
The case was prosecuted by the Special Assistant U.S. Attorney hired by the Canyon County Prosecutor’s Office, the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Two Business Owners Charged with Filing False Federal Income Tax ReturnsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that two owners of a Metairie business were charged today with filing false federal income tax returns.
ROMMEL CORDOVA, age 35 of Luling, and SAUL RAMIREZ, age 43, of Kenner, were each charged in a single Bill of Information with willfully filing false 2011 individual income tax returns. According to the Bill of Information, CORDOVA and RAMIREZ owned and operated Skill Labor Provider, Inc. (“Skill Labor”) a Metairie, Louisiana labor services business. They were each fifty-percent owners of Skill Labor and shared equally in its net income.
During calendar years 2010 and 2011, CORDOVA and RAMIREZ cashed, and caused to be cashed, checks made payable to Skill Labor and other business checks at a check cashing business in Kenner. CORDOVA and RAMIREZ caused false corporate income tax returns for Skill Labor to be prepared which did not accurately report the gross receipts, labor expenses deductions, or net income of Skill Labor. They then filed their respective individual income tax returns, which did not accurately report the amounts of business income that CORDOVA and RAMIREZ received from Skill Labor.
Upon conviction, each defendant faces a maximum penalty of three years of imprisonment, one year of supervised release, a fine of $250,000, or twice the gross gain or loss caused by the offense, a $100 special assessment, and restitution to the Internal Revenue Service.
U. S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Internal Revenue Service – Criminal Investigations and Homeland Security Investigations for investigating this matter. Assistant U.S. Attorney Hayden Brockett and Tax Division Trial Attorney Michael Hatzimichalis are in charge of the prosecution.
Troy Brothers Indicted for Health Care FraudRead the Press Release
ALBANY, NEW YORK – Michael VonFricken and John VonFricken were indicted separately for obtaining false receipts for orthodontic services and submitting them to their union’s health care plan, announced United States Attorney Richard S. Hartunian.
The charges carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years.
Both defendants were arraigned on November 3, 2015 in Albany, New York, before United States Magistrate Judge Christian F. Hummel, and released pending a trial scheduled for January 4, 2016 before United States District Judge Mae A. D’Agostino.
John VonFricken, age 55, of Troy, New York, is charged with health care fraud for obtaining $54,600 in reimbursements from the Health and Welfare Plan of the Plumbers and Steamfitters, Local Union Number 7.
Michael VonFricken, age 44, of Troy, is charged with health care fraud for obtaining $32,732 in reimbursements from the Health and Welfare Plan of the Plumbers and Steamfitters, Local Union Number 7.
The charges in the Indictment are merely accusations. The defendants are presumed innocent until proven guilty.
This case is being investigated by the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorneys Jeffrey C. Coffman and Solomon B. Shinerock.
Trafficker Sentenced for Cocaine and Money Laundering ConspiracyRead the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flanagan sentenced RAUL PINEDA, 32, of Anaheim, California, to 89 months in prison and 5 years of supervised release for conspiracy to distribute and possess 5 kilograms or more of cocaine and conspiracy to launder monetary instruments. PINEDA previously pled guilty to these charges on May 13, 2014. FABIO HIROCHI INOUE, one of PINEDA’S co-conspirators, was sentenced to 51 months in prison and 5 years of supervised release for the same charges by Judge Flanagan on June 10, 2015.
The investigation revealed that between April 2013 and September 22, 2013, PINEDA sent INOUE, to Johnston County, North Carolina, to deliver cocaine and collect drug proceeds for a drug trafficking organization operating out of Mexico and California. INOUE made several trips during this time period to meet with cocaine traffickers in the Johnston County, N.C., area. During these trips INOUE delivered multiple kilograms of cocaine and collected drug proceeds. INOUE laundered some of the drug proceeds by depositing portions into a bank account in the name of a real estate business located in California. Based on the investigation, the United States Drug Enforcement Administration (DEA) discovered that INOUE would be flying to the Raleigh Durham International Airport with several kilograms of cocaine on September 22, 2013. Agents found INOUE at the airport and seized his luggage which contained 3,891 grams of cocaine. Agents arrested INOUE after seizing the cocaine.
On November 19, 2013, DEA learned that PINEDA traveled to Garner, N.C., to transport 2 kilograms of cocaine to the Johnston County traffickers. Agents located PINEDA after he exited a hotel in Garner to deliver the cocaine. Agents arrested PINEDA after locating 2 kilograms of cocaine in PINEDA’S backpack. In total, PINEDA was found to be responsible for trafficking 14.89 kilograms of cocaine and laundering drug proceeds totaling $170,985.
The investigation of this case was conducted by the United States Drug Enforcement Administration, the Johnston County Sheriff’s Office and the Internal Revenue Service-Criminal Investigation Division. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Three New Albany-area men sentenced in fraud schemeRead the Press Release
New Albany – Josh J. Minkler, United States Attorney, announced today that three Louisville-area men were sentenced in federal court on fraud charges. U.S. District Judge Sarah Evans Barker sentenced Travis O. Kiser, 43, Louisville (18 months), Kevin J. O’Donnell, 44 Louisville (15 months) and David Gibson, 45, Floyds Knob (one year and one day) after their convictions for wire fraud and money laundering.
“Defrauding insurance companies has an immediate impact on all of us through higher premiums,” said Minkler. “When emergencies arise and people need their insurance companies, they deserve honest and quick acting service from all who process the claim”
Between 2011 and 2014, Travis Kiser conspired with O’Donnell and Gibson to defraud Farm Bureau and Cincinnati Insurance companies in excess of $340,000.
Gibson was employed by Indiana Farm Bureau Insurance Company as a field claims adjuster in New Albany, Indiana. Kiser was employed by Belfor USA, a restoration company located in Louisville, Kentucky, as a marketing manager. The two orchestrated the scheme by creating an artificial company, Derby City Solutions LLC, to submit inflated invoices to Farm Bureau for emergency services actually performed by Belfor. Kiser would use cashier’s checks payable to Belfor to hide the existence of his sham company. The two would then split the fraudulent proceeds which totaled approximately $126,360.
In a second scheme, Kiser and O’Donnell formed a company called River City Solutions, LLC, which originally was legitimate but later was used solely to defraud the Cincinnati Insurance Company (CIC). The scheme was similar to the previous one. O’Donnell was a field claims superintendent for CIC in Louisville, Ky. He would submit false or inflated invoices for emergency restoration to CIC for payment. They used their pass- through company, River City to defraud the insurance company. Often times the pair would submit invoices that were inflated, the work was performed by another company or never performed at all. They used cashier’s checks payable to the company that legitimately performed the services to hide their fraud. The total loss to CIC was approximately $216,332.
Some of the emergency work being performed was a result of the New Pekin and Henryville tornadoes from February 2012.
This case was investigated by the Internal Revenue Service, Criminal Investigation who Judge Barker lauded for their efforts in such a complex and sophisticated scheme.
IRS Criminal Investigation Special Agent in Charge Stephen Boyd stated, “Insurance fraud impacts almost all honest American citizens because the cost of this crime comes out of all of our pockets. IRS Criminal Investigation special agents are experts in tracing the flow of money which assisted the investigative team in uncovering the three guilty individuals who will be held accountable with time in prison.”
According to Assistant United States Attorney James M. Warden, who prosecuted this case for the government, all three men must serve a period of supervised release after their sentence, some of which is on home detention. They must also make full restitution for the money they stole.
Statement Concerning Arrest of Superior Court Judge JonesRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker confirms the arrest this morning of North Carolina Superior Court Judge Arnold Ogden Jones, II. A federal grand jury returned a three-count indictment yesterday charging Jones with Promising and Paying a Bribe to a Public Official, Promising and Paying a Gratuity to a Public Official, and Corruptly Attempting to Influence an Official Proceeding.
Jones is scheduled to make his initial appearance at 10:00 a.m. this morning before U.S. Magistrate Judge Robert T. Numbers in Raleigh. A copy of the indictment is attached.
Six sentenced for heroin, painkiller traffickingRead the Press Release
ELKINS, WEST VIRGINIA – Six individuals were sentenced in federal court today for heroin and prescription pill trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Jonathan Paul Calain, 38, of Elkins, was sentenced today to 78 months in prison after he admitted that he conspired with multiple other individuals to possess and distribute oxycodone in Randolph County, West Virginia. He pled guilty in February 2015 to one count of “Conspiracy to Distribute Oxycodone.” The Mountain Region Drug and Violent Crime Task Force, the West Virginia State Police, the Randolph County Sheriff’s Department, the Upshur County Sheriff’s Department, the Drug Enforcement Administration, and the Internal Revenue Service investigated.
In another matter, five individuals were sentenced in federal court today for selling heroin and prescription medications throughout 2014 and 2015 in Grant County, West Virginia following an investigation by the West Virginia State Police and the Potomac Highlands Task Force.
Richard Dean Gibson, 32, of Petersburg, West Virginia, was sentenced today to 21 months in prison for selling heroin in May 2014 in Grant County, West Virginia. He pled guilty in July 2015 to one count of “Aiding and Abetting Distribution of Heroin.”
John Daniel Barnett, 39, of Petersburg, West Virginia, was sentenced today to 18 months in prison for selling heroin in May 2104 in Grant County, West Virginia. He pled guilty in July 2015 to one count of “Aiding and Abetting Distribution of Heroin.”
Kaylei Oressa Wilson, 26, of Petersburg, West Virginia, was sentenced today to 6 months in prison for selling heroin in August 2014 in Grant County, West Virginia. She pled guilty in July 2015 to one count of “Aiding and Abetting Distribution of Heroin.”
Autumn Lyn Forbeck, 24, of Frostburg, Maryland, was sentenced today to three years of probation after she was discovered in possession of heroin in June 2014 in Grant County, West Virginia. She pled guilty in July 2015 to one count of “Aiding and Abetting Possession with Intent to Distribute Controlled Substances.”
Sandra Elizabeth Gibbins, 58, of Moorefield, West Virginia, was sentenced today to two years of probation for selling heroin in May 2014 in Grant County, West Virginia. She pled guilty in July 2015 to one count of “Aiding and Abetting Distribution of Heroin.”
Assistant U.S. Attorney Stephen Warner prosecuted Calain and Assistant U.S. Attorney Michael Stein prosecuted the remaining defendants on behalf of the government.
U.S. District Judge John Preston Bailey presided.
Sharon, Pa., Tobacco Businesses, Owner and Manager Plead Guilty to Fraud, Filing False ReportsRead the Press Release
PITTSBURGH – Residents of Ohio and New York, along with two tobacco wholesale businesses in Sharon, Pennsylvania, pleaded guilty in federal court to charges of mail fraud and failure to file required reports with state revenue authorities, United States Attorney David J. Hickton announced today.
Raid Zaghari, 43, of Brooklyn, New York, USA Trading Corporation-I and USA Trading Corporation-V, both located in Sharon, Pennsylvania, pleaded guilty to mail fraud before United States District Judge Cathy Bissoon.
Tareq Alasadi, a/k/a Tareq Alasade, 41, of Youngstown, Ohio, pleaded guilty before United States District Judge Cathy Bissoon to failure to file a report setting forth the amount of tobacco product sold to a North Carolina distributor.
According to information presented to the Court at the guilty pleas by Assistant U.S. Attorney Stephen R. Kaufman, Zaghari, USA Trading Corporation-I and USA Trading Corporation-V used commercial interstate carriers for the purpose of executing a scheme to defraud. Non-cigarette tobacco, known in the industry as “other tobacco products” or “OTP,” was sold by the defendants from their warehouse in Sharon, Pennsylvania, to distributors in New York and North Carolina, states that impose an excise tax on OTP. Pennsylvania is the only state in the nation which does not tax the wholesale distribution of OTP. In the mail fraud schemes, the defendants agreed not to report the sales to the taxing authorities in those other states, as required by law, which caused significant loss of tax revenue to the those states. USATC-I and USATC-V admitted that the loss was $3 million in taxes.
Alasadi failed to file, with the North Carolina Department of Revenue, the required notifications pertaining to the interstate distribution of taxable tobacco products to a customer in North Carolina by USATC-I.
Judge Bissoon scheduled sentencing for March 2, 2016 for Alasadi, March 9, 2016 for Zaghari, and April 7, 2016 for USA Trading Corporation-I and USA Trading Corporation-V. The law provides for a maximum total sentence of three years in prison, a fine of $250,000 or both for Alasadi and Zaghari. The law provides for a maximum total sentence of a term of probation, an order of criminal forfeiture, and restitution for USA Trading Corporation-I and USA Trading Corporation-V. 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 Attorney Shaun E. Sweeney is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the investigation leading to the charges in this case.
Second California Resident Sentenced to Prison for Helping to Transport Heroin Across the CountryRead the Press Release
SCRANTON--The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 39-year-old California resident was sentenced to 41 months in prison today by Senior U.S. District Court Judge Richard P. Conaboy in Scranton, for possessing with intent to distribute more than one kilogram of heroin.
According to United States Attorney Peter Smith, the defendant, Livier Cantor-Huizar, of Fresno, California, admitted to transporting heroin from California to the Mt. Pocono area of Monroe County in July 2014.
Cantor-Huizar was indicted by a federal grand jury in July 2014, as a result of an investigation by the Drug Enforcement Administration and the Pennsylvania State Police.
Judge Conaboy ordered Cantor-Huizar to serve two years on supervised release following her prison sentence.
Last week, Judge Conaboy sentenced co-defendant Jose Rosario Huizar-Rios to 46 months in prison. Two other defendants have entered guilty pleas in the case and are awaiting sentencing.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
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San Juan County Resident Arraigned on Federal Wire Fraud ChargesRead the Press Release
ALBUQUERQUE – Bobby Willis, 43, a resident of Kirtland, N.M., was arraigned this morning in federal court in Albuquerque, N.M., on an indictment charging him with wire fraud. Willis entered a not guilty plea and was released on pretrial conditions pending trial.
The two-count indictment, which was filed on Oct. 20, 2015, alleges that, from March 2010 through Aug. 2011, Willis executed an illegal scheme to defraud two victims of $1,000,000. According to the indictment, Willis allegedly offered the victims the opportunity to purchase a five-percent interest in a real estate investment company for $1,000,000 with the understanding that he and other individuals had also invested millions of dollars in the company. Willis then allegedly spent $995,000.00 of the victims’ $1,000,000 instead of investing the funds.
Count 1 of the indictment alleges that on Oct. 25, 2010, Willis caused $900,000.00 to be wire transferred from the bank account of the real estate investment company to his and his wife’s bank account. Count 2 alleges that on Nov. 12, 2010, Willis caused another $95,000.00 to be wire transferred from the real estate investment company’s bank account to his and his wife’s bank account. The indictment includes forfeiture provisions seeking a money judgment against Willis in the amount of $1,000,000.
If convicted, Willis faces a statutory maximum sentence of 20 years in prison and a maximum fine of $250,000.00. 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 Albuquerque office of the FBI and is being prosecuted by Assistant U.S. Attorney C. Paige Messec.
Rockford Woman Arrested on Federal Tax Fraud ChargesRead the Press Release
ROCKFORD — A Rockford, Ill. woman was arrested today on federal charges of making false claims for federal tax refunds and using other persons’ identification in connection with the fraudulent claims for tax refunds. CRYSTAL S. JACKSON, 27, of Rockford, was charged by a federal indictment on Oct. 20, 2015. The indictment charged her with 45 counts of filing fraudulent claims for federal tax refunds, and three counts of illegally possessing and using other persons’ identification in connection with making fraudulent claims for federal tax refunds.
The indictment alleges that between Aug. 1, 2011 and Feb. 5, 2013, Jackson prepared and filed, both electronically and by mail, 45 federal individual income tax returns in the names of other individuals without their permission, causing fraudulent claims for refunds to be made against the United States Treasury. The 45 false returns were filed with the IRS for tax years 2010, 2011, and 2012, and requested refunds totaling $189,237. Some of the 2010 and 2011 fraudulent tax returns listed the address of a relative of Jackson as the taxpayers’ address, and requested debit cards containing the tax refunds be mailed to that address.
Each count of filing a fraudulent claim for a federal income tax refund carries a maximum potential penalty of up to 5 years in prison. Each count of possessing another person’s identification in connection with making a fraudulent claim for a federal income tax refund carries a potential penalty of up to 5 years in prison, or up to 15 years in prison if the charge involves obtaining anything of value totaling $1,000 or more during any one year period. In addition each count charged carries a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater, and full restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. Jackson will appear for a detention hearing at 3:00 p.m. today in Federal Court in Rockford, before U.S. Magistrate Iain D. Johnston.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The arrest was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Stephen Boyd, Special Agent-In-Charge of the Chicago Field Office of Internal Revenue Service - Criminal Investigation Division
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Indictment
Riverhead Physician Assistant Arrested for Conspiracy to Illegally Prescribe OxycodoneRead the Press Release
Michael Troyan, a physician assistant who operated two urgent care clinics on the east end of Long Island was arrested this morning pursuant to a grand jury indictment[1] with conspiring to illegally distribute oxycodone, a highly addictive prescription pain medication. Also this morning, a search warrant was executed at the East End Urgent and Primary Care in Riverhead by the DEA’s Long Island Tactical Diversion Squad which is comprised of agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department, and Port Washington Police Department. The Long Island Tactical Diversion Squad was also assisted by agents and officers of the Department of Health & Human Services, the Southampton Town Police Department, and the Suffolk County District Attorney’s East End Drug Taskforce. The defendant is scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown at the United States Courthouse in Central Islip, New York.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent in Charge, Drug Enforcement Administration (DEA), New York.
The indictment and public filings allege that between November 2011 and October 2015, Troyan, a physician assistant with authority to prescribe controlled substances, issued prescriptions for thousands of oxycodone pills to co-conspirators for the purpose of illegally re-selling the pills for cash. Troyan was captured on video in an undercover operation writing phony prescriptions for oxycodone and receiving large quantities of cash at his Riverhead medical office for prior illegal sales. Troyan was receiving half of the profit from the sale of the oxycodone pills.
United States Attorney Capers stated, “As alleged, Troyan abused his authority to prescribe controlled substances and his position of trust as a physician assistant to illegally sell oxycodone in exchange for cash. Such abuse by health care professionalswill not be tolerated.” Mr. Capers extended his grateful appreciation to each of theparticipating law enforcement agencies for their assistance in this case.
DEA Special Agent in Charge James J. Hunt stated, “People who are addicted to opioid painkillers are forty times more likely to be addicted to heroin. Cashing in on heroin’s hold over American communities, it is alleged that Michael Troyan wrote prescriptions to oxycodone dealers on the East End in exchange for half the cash profits from the resulting drug sales. DEA and our law enforcement partners will continue to identify the diverted painkiller suppliers, be it an oxy street dealer, a rogue doctor, or a greedy physician’s assistant.”
If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment and a $1 million fine.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Center for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 18 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Allen Bode is in charge of the prosecution.
The Defendant:
Name: MICHAEL TROYAN
Age: 37
Residence: Riverhead, New York
[1] The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Rhode Island Man Arrested for Interstate Travel to have Sex with a MinorRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that William McNeill, 23, of Cumberland, Rhode Island, was arrested yesterday in Massachusetts following his indictment in Maine on October 21, 2015 for travelling interstate on October 18, 2014 to have sex with a minor.
McNeill faces up to 30 years in prison and a $250,000 fine.
The joint investigation was conducted by the Naval Criminal Investigative Service and the Bridgton, Maine Police Department.
An indictment is merely an accusation and a defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Real Estate Developer, Charles P. Gahan, Sentenced to 70 Months for Eight Million Dollar Title Insurance Fraud SchemeRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Charles P. Gahan, currently a resident of New Smyrna Beach, Florida, and formerly of Grand Rapids, Michigan, was sentenced today in U.S. District Court to 70 months’ imprisonment for his role in a conspiracy to commit wire fraud affecting financial institutions. Gahan was also ordered to pay restitution of $8,205,405.71. The Honorable Robert Holmes Bell noted the significant impact that his fraud scheme had upon numerous homeowners in the Western District of Michigan, as well as the victim title insurance companies, and remanded Gahan to the custody of the U.S. Marshal at the conclusion of the sentencing hearing.
"This was a very sophisticated and long-running title insurance fraud scheme that involved numerous residential developments," said U.S. Attorney Miles. "Innocent homeowners arrived home to find foreclosure notices on their doors, from banks they had never heard of, solely because Gahan fraudulently diverted closing funds from those banks to his own pocket. The Court’s sentence today reflects the seriousness of this financial crime."
From 2002 to 2006, Gahan operated as a real estate developer under the name GBW Development. Gahan conspired with Scott Hoeft, then the owner of Prime Title Services, to divert real estate closing proceeds to his own pocket. The essence of the fraud was that Hoeft assisted Gahan in obtaining construction loan financing by agreeing to provide the prospective lenders with fraudulent title commitments that purposefully failed to disclose the existence of prior liens against the property on which new homes would be constructed. After a home was constructed and sold, Hoeft would fail to disclose these prior liens to the buyer’s lender or, if he did disclose such liens, he did not pay off the liens with the loan proceeds deposited to his escrow account. Instead, those funds were transferred to Gahan, who used them to support his lifestyle or to build the next home in his development. The two title insurance companies that Hoeft used to issue the title insurance policies suffered over $8,000,000.00 in losses to provide clear title to the homeowners. Hoeft was previously sentenced to 63 months’ imprisonment for his role in the scheme, which was reduced to 45 months’ imprisonment for his cooperation in the prosecution of Gahan.
The case was investigated by the Grand Rapids Office of the FBI and the U.S. Postal Inspection Service. Assistant U.S. Attorney Ronald M. Stella prosecuted the case.
Real Estate Appraiser Ordered to Pay $75,297.94 for Attempted Tax EvasionRead the Press Release
ALBANY, NEW YORK – Peter Kellner, age 77, of Sunrise, Florida, was sentenced yesterday to two years of probation and ordered to pay restitution in the amount of $75,297.94, following his conviction for attempted tax evasion, announced United States Attorney Richard S. Hartunian and Shantelle P. Kitchen, Special Agent in Charge of IRS-Criminal Investigation’s New York Field Office.
Kellner was sentenced in Albany by U.S. District Judge Mae A. D’Agostino. He pleaded guilty on November 3, 2014.
Kellner, a licensed real estate appraiser formerly of Philmont, New York, incurred a personal tax liability that had grown to approximately $86,179.94 by October 2008. In an effort to reduce his owed tax, Kellner submitted a false Offer of Compromise to the Internal Revenue Service, falsely reporting assets totaling $8,612. However, at that time, Kellner had assets totaling $79,263 in the form of 81 United States Postal Money Orders that he did not disclose to the IRS. On the basis of the false information Kellner provided, the IRS approved his Offer of Compromise on May 26, 2009, allowing him to resolve his tax debt for only $8,612. After his tax debt was resolved, Kellner negotiated approximately $78,540 in Postal Money Orders between May 26, 2009 and October 2010, and the IRS thereafter discovered that Kellner had attempted to evade the payment of his taxes.
This case was investigated by IRS-Criminal Investigation’s New York Field Office and was prosecuted by Assistant United States Attorney Ransom P. Reynolds.
Project Manager Overseeing Construction Projects at Morris County, New Jersey, U.S. Army Installation Admits Accepting KickbacksRead the Press Release
NEWARK, N.J. – A regional manager for a prime contractor working at Picatinny Arsenal today admitted taking more than $20,000 in kickbacks in return for favorable treatment on construction projects at the installation, U.S. Attorney Paul J. Fishman announced.
Shawn A. Fuller, 45, of East Stroudsburg, Pennsylvania, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of accepting unlawful kickbacks.
According to documents filed in this case and statements made in court:
Fuller, a project manager for a prime contractor working at Picatinny Arsenal, admitted taking kickbacks from subcontractors in return for favorable treatment on related construction projects. On June 27, 2010, Fuller solicited and accepted a Yamaha Wave Runner, valued at $4,250, from a subcontractor who owned a Warren County, New Jersey, construction company. Fuller also admitted that, between 2009 and June 2013, he accepted approximately $20,000 in cash payments from other subcontractors involved in Picatinny Arsenal construction projects.
The charge to which Fuller pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 16, 2016.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig Rupert; and the U.S. Army Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge Larry Scott Moreland, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Barbara R. Llanes and Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Assistant Federal Public Defender Candace Hom Esq., Newark
President and CEO of Wilson Capital Group Sentenced in Financial Fraud CaseRead the Press Release
NORFOLK, Va. – Ayanna N. James, 40, of Virginia Beach, was sentenced today to 84 months in prison, followed by three years of supervised release for mail fraud and unlawful monetary transactions. James was also ordered to pay $4,592,300 in restitution to her victims.
James pleaded guilty on May 15, 2015. According to a statement of facts filed with the plea agreement, James was the President and CEO of Wilson Capital Group, Inc. which was a private equity firm that she claimed controlled billions of dollars in investor participation. Claiming that she controlled a legitimate company, James, and other known conspirators, solicited funds from clients by promising to secure capital and other financing through purported “Standby Letters of Credit” and other fraudulent means. James never invested in anything and instead immediately converted the funds entrusted to her company to her own personal use to fund her extravagant lifestyle. For example, James used $34,000 of fraudulent proceeds to purchase season tickets to the Orlando Magic, and hundreds of thousands of dollars to travel overseas, to build a custom home, for living expenses, to purchase jewelry, to support her extended family, and to purchase a 2007 Bentley automobile. As a result of her fraudulent conduct, multiple victims suffered actual losses of over $4.5 million.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office; Thomas Jankowski, Special Agent in Charge, IRS-Criminal Investigations, Washington, D.C. Field Office, and David Bowers, Inspector in Charge of the Washington Division of the United States Postal Inspection Service, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith.
This case was investigated by the Tidewater Complex Financial Crimes Task Force. Members of the Task Force include the FBI, IRS, and the Postal Inspection Service. Assistant U.S. Attorney Melissa E. O’Boyle 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.2:15cr55.
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Philadelphia Man Convicted of Heroin Trafficking and Firearms Violation Following Jury TrialRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jose Juan Albertorio-Garcia, age 47, of Philadelphia, Pennsylvania, was convicted of possession of a firearm in furtherance of drug trafficking and distributing a controlled substance after a two and a half day jury trial in Harrisburg before U.S. District Court Judge Sylvia H. Rambo.
According to United States Attorney Peter Smith, the jury returned with the verdict of guilty after approximately two hours of deliberation. The charges against Albertorio-Garcia are a result of his supplying other drug dealers with heroin for distribution in Harrisburg in March 2014. Following Albertorio-Garcia’s arrest on March 18, 2014, the Pennsylvania State Police seized additional quantities of heroin and a firearm from his home on Rorer Street in Philadelphia, Pennsylvania. No sentencing date has been set for Albertorio-Garcia.
This case was investigated by the Drug Enforcement Administration and the Pennsylvania State Police and was prosecuted by Assistant U.S. Attorney Meredith A. Taylor.
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Philadelphia Man Charged in Fraud Involving Dead Sister's AnnuityRead the Press Release
PHILADELPHIA – Charles Spencer, 81, of Philadelphia, PA, was charged today by information with mail fraud in connection with the theft of approximately $230,400 from an annuity, announced United States Attorney Zane David Memeger.
According to the information, Spencer became the guardian of his sister, V.R., and her affairs when V.R. became infirmed. V.R. was receiving monthly payments of $1,600 from an annuity. She died on January 22, 2001 but Spencer, it is alleged, did not inform Lincoln National Insurance Company (LNIC), which disbursed the annuity payments. LNIC continued to send monthly annuity checks payable to V.R. which defendant Spencer allegedly received, countersigned, and deposited into his bank account. It is alleged that Spencer received approximately 144 annuity checks, totaling approximately $230,400.
If convicted the defendant faces a statutory maximum sentence of 20 years in prison, possible restitution, a fine of up to $250,000, up to three years of supervised release, and a $100 special assessment.
The case was investigated by United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Floyd J. Miller.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pembroke Woman Sentenced to Two Years Probation for Making False Statements to Obtain Social Security BenefitsRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373
Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Rosemary Peterson, 29, of Pembroke, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to two years of probation for making false statements to obtain Social Security Disability Insurance ("SSDI") benefits. She was also ordered to pay $11,874 in restitution. SSDI benefits are paid by the Social Security Administration ("SSA") to people with disabilities. Peterson pleaded guilty on May 8, 2015.According to court records, from April 2011 until November 2012, the defendant was designated as the representative payee for her boyfriend’s SSDI benefits. During this period of time, her boyfriend received over $10,000 in SSDI benefits. In November 2011, the defendant's boyfriend was required to undergo a Continuing Disability Review to determine if he was still disabled. During this review, the defendant claimed that her boyfriend did not work outside the house and required someone to clean, bathe, dress and cook for him. In fact, the defendant had lived with her boyfriend for several years and was well aware that he did not have disabilities that required her to clean, bathe, dress and cook for him. She was also aware that her boyfriend did a significant amount of work outside the house including working as a scrap metal dealer, carpenter and woodcutter.
The investigation was conducted by the SSA’s Office of the Inspector General.
Owner of Sandusky company indicted for fraud related to Castalia FarmsRead the Press Release
Criminal charges were filed against the owner of a Sandusky equipment rental company for his fraudulent conduct related to Castalia Farms and other businesses, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
A 32-count indictment was filed charging Scott C. Wagner, 51, of Perkins Township, with several criminal conspiracies, wire fraud, mail fraud, money laundering, and destruction of records. Tom Walters, Jr., of Swanton, is also charged in the indictment with conspiracy and mail fraud.
According to court documents filed in the case:
Castalia Farms was a hospitality facility owned by Owens-Illinois, Inc. and used by the company as a recreational facility since the 1930s. O-I closed the facility in 2012 and later sold the property.
Michael K. Conrad, 48, of Castalia, Ohio, managed Castalia Farms. In this capacity, Conrad had an occasional need for industrial equipment and was a regular customer of Wagner and his company, Construction Equipment & Supply (CES), a Sandusky business that rented and sold industrial machinery and equipment for commercial use.
Wagner controlled the day-to-day operations of CES and submitted false invoices to Conrad that were then passed on to O-I for equipment rentals that never occurred, purchases of construction supplies and other goods that never occurred, purchases of construction supplies that were far in excess of what was actually delivered, and other fraudulent billings.
For example, O-I was billed more than $350,000 for 532 days of renting a piece of equipment used to grind trees and other vegetation, when in reality the grinder was not at Castalia Farms for nearly all the time it was billed to O-I as a rental, according to court documents.
In October 2010, Conrad submitted to O-I a fraudulent invoice for $47,925 worth of landscaping work, purportedly done at Castalia Farms. The work was actually done at Wagner’s personal residence. O-I paid the invoice in December 2010, according to court documents.
The indictment also charges Wagner with defrauding two other Northwest Ohio companies using a similar false-billing scheme. The first victim company, Kyklos Bearing International, LLC of Sandusky, Ohio, paid false invoices Wagner submitted with the assistance of a Kyklos Bearing International employee. The indictment alleges that the invoices were false because they sought payment for goods that were never delivered by CES.
The second victim company, Sawyer Structural Steel, Inc. of Holland, Ohio, paid false invoices Wagner submitted with the assistance of Tom Walters, Jr., a Sawyer Steel employee at the time of the fraud. Wagner and Walters conspired to defraud Sawyer Steel, where Walters worked as a general manager. To do this, Wagner submitted invoices to Sawyer Steel that were false, including invoices for supplies and other goods that were never delivered, equipment rentals that never occurred and the purchase of supplies and other goods that were far in excess of what was actually delivered, according to court documents.
Conrad has already pleaded guilty to crimes related to his role in the conspiracy and is awaiting sentencing.
If convicted, each defendant’s sentence will be determined by the Court after reviewing factors unique to his case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorney Gene Crawford following an investigation by the Federal Bureau of Investigation, Sandusky, Ohio, with the assistance of the Ohio Bureau of Criminal Investigation and the Erie County Sheriff’s Office.
A charge is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Orleans Parish Couple Sentenced for Conspiracy to Commit Wire Fraud in Aftermath of the BP Oil SpillRead the Press Release
U.S. Attorney Kenneth A. Polite announced that LATASHA N. ANDERS, age 34, and ARNOLD WILLIAMS, age 33, both of New Orleans, were sentenced today after previously pleading guilty to conspiracy to commit wire fraud relating to fraudulent applications they made or caused to be made to the Gulf Coast Claims Facility (GCCF) for financial assistance during the aftermath of the Deepwater Horizon oil spill.
U.S. District Judge Martin L.C. Feldman sentenced ANDERS to 5 years probation, with 12 months of home incarceration, and ordered restitution in the amount of $250,000. WILLIAMS was sentenced to three years probation and was ordered to pay $50,000 in restitution to the GCCF.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion. The GCCF required individuals to verify loss of income. ANDERS worked as a claims adjuster for the GCCF. Beginning in or about October 2010, ANDERS submitted or caused to be submitted, via the internet, claim forms on behalf of her co-conspirators containing false representations and fraudulent documentation that they were employed in the commercial fishing industry at the time of the oil spill, when in fact they were not. ANDERS shared in the claim proceeds in exchange for her assistance. Based upon the fraudulent documentation, ANDERS obtained $250,000 in claim proceeds to which she and her co-conspirators were not entitled.
Additionally, ANDERS conspired with WILLIAMS to file a false claim for loss earnings on his behalf, when in fact he did not work in the commercial fishing industry. Based upon the fraudulent claim, WILLIAMS received $50,000 to which he was not entitled. Both ANDERS and WILLIAMS admitted to purchasing a home for $110,000 with the illegal proceeds they received from the fraudulent claims.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (“NCDF”), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected], or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
U.S. Attorney Polite praised the work of the U.S. Postal Inspection Service and the U.S. Secret Service in investigating this matter. Assistant U. S. Attorney Julia K. Evans was in charge of this prosecution.
Oakland Man Sentenced to Life in Prison Plus 10 Years for Murder in Christmas Marijuana Robbery Near Oakland AirportRead the Press Release
OAKLAND – Damion Sleugh was sentenced today to life in prison plus 35 years for murder and related drug trafficking charges, announced Acting U.S. Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge David J. Johnson. The charges stemmed from the murder of Vincent Muzac in a parking lot near the Oakland Airport three days before Christmas in 2013.
Evidence at trial showed that Sleugh, 28, of Oakland, helped arrange a meeting to purchase five pounds of marijuana. In the early afternoon of December 22, 2013, Sleugh met with Mr. Muzac, of Alameda, in the parking lot of a Walmart store near Hegenberger Road and interstate 880 in Oakland. Surveillance video showed Mr. Muzac enter a car where he remained for four minutes before he was robbed and shot. His body was seen lying on the ground as the car sped away. A joint investigation by the FBI and the Oakland Police Department revealed that Sleugh was the driver. The evidence submitted at trial included incriminating text messages, FBI crime scene recreations, and images of Sleugh with the stolen marijuana. The photographs of Sleugh included a “selfie” taken from Sleugh’s phone two hours after the shooting; in the photograph, Sleugh is pictured in the same passenger seat where Mr. Muzac had just been shot.
On March 27, 2014, Sleugh was indicted in a six-count indictment charging him with conspiracy and attempt to possess with the intent to distribute marijuana, in violation of 21 U.S.C. § 841; robbery affecting interstate commerce, in violation of 18 U.S.C. § 1951(a); the use of a firearm during a drug trafficking crime or a crime of violence, in violation of 18 U.S.C. § 924(c); the use of a firearm during a drug trafficking crime or a crime of violence resulting in murder, in violation of 18 U.S.C. § 924 (j); and being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g).
According to the government’s filings, all but one of the charges against Sleugh arose from his participation in a conspiracy to distribute marijuana. The government asserted the drug deal with Mr. Muzac was just a ploy to rob him of marijuana. Moreover, once apprehended, Sleugh attempted to escape responsibility for the murder by blaming the person who drove Sleugh to and from the place where the marijuana deal was so have taken place. The government argued in papers filed with the court:
Defendant Sleugh pulled a loaded gun on an unarmed man in a closed vehicle. When Muzac refused to give up the marijuana, Sleugh formed the requisite premeditation—pressing the muzzle of the gun an inch from Muzac’s flesh and then firing, even as Muzac begged him not to. After he fired the shot, the defendant pushed the dying Muzac out of the car and sped away. As if this were not sufficiently callous, the defendant felt compelled to memorialize the moment with that notorious selfie from Vincent Muzac’s seat.
On July 17, 2015, a jury convicted Sleugh of all six counts in the indictment. The verdict also included a special finding that Sleugh committed first degree murder. The guilty verdict followed a two-week jury trial before the Honorable Yvonne Gonzalez-Rogers, U.S. District Judge. The sentence was handed down by the Judge Gonzalez-Rogers.
Assistant United States Attorneys Damali Taylor and Joseph Alioto Jr. prosecuted the case, along with paralegals Patty Lau and Christine Tian. The prosecution is the result of an investigation led by the FBI and of the Oakland Police Department.
Northshore Man Sentenced to Serve 30 Years in Prison for Drug Conspiracy and Firearms ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MELVIN JACKSON, age 35, of Ponchatoula was sentenced today for his participation in a drug conspiracy and his participation in a May 11, 2012, shooting and robbery that took place outside of Roy’s Lounge.
U.S. District Judge Stanwood R. Duval sentenced JACKSON to 360 months imprisonment for the drug conspiracy, 120 months on the firearms violation, and 240 months on a separate drug charge. All sentences were ordered to run concurrently with each other.
At trial, which was held on April 11, 2015, the Government presented evidence that JACKSON, who had a prior conviction for attempted murder, was caught on video in 2012 exiting Roy’s Lounge with several associates after a night of gambling. Once outside, JACKSON removed a firearm from his shirt and gave the firearm to his friend, MELVIN DOKES. DOKES then shot the victim, a fellow gambler, four times. As the victim lay bleeding on the ground, JACKSON stood over him and took several hundred dollars out of the victim’s pockets. JACKSON and DOKES then fled. Both were initially arrested on state charges by the Tangipahoa Parish Sheriff’s Office, but made bond. While JACKSON was out on bond he continued to sell heroin on the North Shore. His drug dealing activity was brought to the attention of federal agents. An undercover operation was done which led to a search warrant being executed at JACKSON’S home. Agents recovered drugs and drug proceeds. JACKSON then confessed to his role in the conspiracy to distribute more than a kilogram of heroin and over five kilograms of cocaine hydrochloride.
U.S. Attorney Polite praised the work of the United States Drug Enforcement Administration in leading this investigation along with members of the Tangipahoa Parish Sheriff’s Office. Assistant United States Attorneys Maurice E. Landrieu, Jr. and Brandon Long were in charge of the prosecution.
North Texas Man Sentenced in Foreign Currency Trading SchemeRead the Press Release
SHERMAN, Texas – A 47-year-old former resident of Bonham, Texas, was sentenced to federal prison for operating a currency trading scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Frank Edwin Pate was found guilty by a jury on May 26, 2015, of two counts of wire fraud and one count of mail fraud following a five-day trial before U.S. District Judge Amos Mazzant. Pate was sentenced to 210 months in federal prison today by Judge Mazzant. Pate was also ordered to pay restitution in the amount of $2,829,589.84.
According to information presented in court, Pate perpetrated a fraud scheme on seven individuals who invested money with Pate for the purpose of trading foreign currency on their behalf. Pate’s scheme caused investors to invest over $3.4 million over a several year period for the purpose of currency trading. Instead of using the money for foreign currency trading, Pate spent a large portion of the money for his own personal expenses. Pate was indicted by a federal grand jury on Aug. 13, 2014.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys J. Andrew Williams and Christopher Eason.
Norfolk Man Sentenced on Drug Conspiracy and Gun ChargesRead the Press Release
NORFOLK, Va. – Isaac Deleon Nevares, 51, of Norfolk, was sentenced today to 216 months in prison for conspiracy to manufacture, distribute, and possess with intent to distribute methamphetamine, cocaine, and crack cocaine, and for possession and carrying firearms in furtherance of a drug trafficking crime.
Nevares pleaded guilty on June 5, 2015. According to court documents, ATF agents conducted a series of controlled purchases of cocaine, “crack” cocaine, and handguns from Nevares’s co-defendant Anthony Tillman Quinones, whom Nevares supplied with drugs. After executing search warrants on multiple residences involved in the drug-trafficking conspiracy, agents were led to an apartment Nevares used to store drugs. At the apartment, agents recovered over one kilogram of high-purity methamphetamine, 400 grams of cocaine, 270 grams of crack cocaine, two handguns, and a semiautomatic rifle. Nevares was arrested later that day in possession of another handgun.
Tillman Quinones, who was indicted with Nevares, pleaded guilty to drug trafficking conspiracy and firearms charges on May 19, 2015, and was sentenced to 156 months in prison on Oct. 16, 2015.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorney Andrew C. Bosse 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. 2:15-cr-38.
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New York Attorney and Two Registered Brokers Arrested for Engaging in A $300 Million Market Manipulation SchemeRead the Press Release
BROOKLYN, NY -- Darren Ofsink, a Manhattan attorney and founder of Ofsink LLC; Michael Morris, a registered broker and managing director of Halcyon Cabot Partners, Ltd. (Halcyon); and Darren Goodrich, a registered broker; were arrested earlier today on charges of securities fraud, wire fraud, and conspiracy to commit securities fraud, mail fraud, and wire fraud in connection with a $300 million market manipulation scheme. In addition to the three defendants arrested today, the eleven-count superseding indictment unsealed this morning charges four additional defendants who were arrested in July 2014: Abraxas J. Discala, also known as “AJ Discala,” the Chief Executive Officer of OmniView Capital Advisors LLC; Ira Shapiro, the Chief Executive Officer of CodeSmart Holdings, Inc., a publicly traded company; Craig Josephberg, a registered broker; and Kyleen Cane, a Las Vegas attorney and managing partner of Cane Clark LLP.[1] Three defendants, Marc Wexler, Matthew Bell, and Victor Azrak, who were charged in the underlying indictment, have pleaded guilty and are awaiting sentencing.
Ofsink and Morris will be arraigned later today before Magistrate Judge Viktor V. Pohorelsky, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York. Goodrich’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 312 North Spring Street, Los Angeles, California. Discala, Shapiro, Josephberg, and Cane will be arraigned on the superseding indictment at a later date.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“As alleged, licensed professionals such as Ofsink, Morris, and Goodrich abused their positions of trust and became part of an elaborate scheme designed to defraud the securities markets and the investing public through false and misleading press releases and manipulated trading activity. The three were entrusted to be gatekeepers to the securities markets but instead perpetrated one of the largest market manipulation schemes ever, and by doing so, preyed upon unsuspecting and elderly investors,” stated United States Attorney Capers. “Today’s three arrests and the seven arrests last year, reflect the scope of this fraud and our commitment to bring to justice those who abuse our financial markets in order to fraudulently enrich themselves.” Mr. Capers expressed his appreciation to the FBI for its tireless efforts in leading the investigation and thanked the United States Securities and Exchange Commission, New York Regional Office, for their significant cooperation and assistance.
“Using investment schemes like ‘pump and dump,’ ‘wash trades,’ and ‘match trades,’ the defendants were able to manipulate stock prices to profit themselves while defrauding unsuspecting investors. The FBI is committed to investigating and bringing to justice those who prey upon trusting individuals for their own personal gain.” stated FBI Assistant Director-in-Charge Rodriguez.
As alleged in the indictment and other court filings, between October 2012 and July 2014, the defendants agreed to defraud investors and potential investors in four public companies: CodeSmart Holdings, Inc. (CodeSmart), trading under the ticker symbol ITEN; Cubed, Inc. (Cubed), trading under the ticker symbol CRPT; StarStream Entertainment Inc. (StarStream), trading under the ticker symbol SSET; and The Staffing Group, Ltd. (Staffing Group), trading under the ticker symbol TSGL (collectively, the Manipulated Public Companies) by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through false and misleading press releases, false and misleading SEC filings, fraudulent concealment of the defendants’ and their co-conspirators’ ownership interests, engineering price movements and trading volume in the stocks, and unauthorized purchases of stock in accounts of unwitting investors.
The CodeSmart Manipulation Scheme
In early May 2013, the defendants engineered a reverse merger of CodeSmart, a private company, with a shell public company. After gaining control of CodeSmart’s three million purportedly unrestricted shares, the defendants, including Ofsink and Morris, on two occasions fraudulently inflated CodeSmart’s share price and trading volume and then sold their shares at a profit when the price reached desirable levels -- a scheme commonly referred to as a “pump and dump.” The first pump and dump occurred between approximately May 13, 2013 and August 21, 2013. During this period, the defendants manipulated CodeSmart’s stock price by raising it from $1.77 to a high of $6.94, before causing it to drop to $2.19. The second pump and dump occurred between approximately August 21, 2013 and September 20, 2013. During this period, the defendants manipulated CodeSmart’s stock price by raising it from $2.19 to a high of $4.60, before causing it drop to $2.13.
CodeSmart’s market capitalization at its highest closing price of $6.94 per share on July 12, 2013 was $86,347,800. However, that same day, CodeSmart filed with the SEC an amended Form 10-K, in which it listed only $6,000 in total assets, $7,600 in revenue, and a net loss of $103,141. By December 30, 2013, CodeSmart’s stock was trading at $0.66 per share, and on July 9, 2014, its stock closed at $0.01 per share.
The defendants profited by selling CodeSmart stock, issued to them at pennies, to unsuspecting investors, often without the investors’ knowledge and consent. Additionally, the defendants, including investment advisers and brokers, were selling CodeSmart shares in their personal trading accounts at the same time that they were purchasing that stock in their clients’ and customers’ accounts. During the first pump and dump, the defendants and their co-conspirators sold approximately 800,000 shares of CodeSmart in their personal accounts while they purchased virtually the identical amount in unsuspecting investors’ accounts.
The Cubed Manipulation Scheme
In March 2014, the defendants took Cubed public through an asset purchase agreement. Between April 22, 2014 and April 30, 2014, they concocted trading volume in this stock by purchasing more than 50% of the total number of Cubed shares purchased during this period.
A judicially-authorized wiretap of Discala’s cellular telephone revealed that the defendants and their co-conspirators fraudulently manipulated Cubed’s stock by artificially controlling the price and volume of that stock through, among other things, wash trades and matched trades.[2] Rather than generating significant market interest and causing a quick pump and dump that would elicit regulators’ scrutiny this time, the defendants gradually increased the price of Cubed’s stock to give it the appearance of a legitimate company with genuine and steady market demand for the security. The defendants used an escrow account maintained by Cane to successfully control the price and volume of Cubed’s stock. For example, on May 20, 2014, during a telephone call between Discala and Azrak, Discala emphasized his control over Cubed’s share price through the use of the escrow account, stating, “I’m the [expletive] brake and the gas, [expletive]. If I take my foot off the brake it’s 55 [dollars] tomorrow (laughter).”
On June 23, 2014, Cubed reached its highest closing price of $6.75 per share, resulting in a market capitalization of approximately $200 million. Previously, Cubed filed with the SEC a Form 10-Q and reported less than $1,500 in cash, zero revenue, negative stockholders’ equity, a net loss of $15,000, and accrued professional fees of $131,824.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Walter M. Norkin, Shannon C. Jones, Winston M. Paes and Patrick Hein are in charge of the prosecution, with assistance provided by Assistant United States Attorney Claire Kedeshian of the Office’s Civil Division, which is responsible for the forfeiture of assets.
The Defendants:
ABRAXAS J. DISCALA, also known as “AJ Discala”
Age: 44
Residence: Norwalk, ConnecticutIRA SHAPIRO
Age: 54
Residence: Congers, New YorkCRAIG JOSEPHBERG
Age: 42
Residence: New York, New YorkKYLEEN CANE
Age: 60
Residence: Las Vegas, NevadaDARREN GOODRICH
Age: 37
Residence: Manhattan Beach, CaliforniaDARREN OFSINK
Age: 46
Residence: Merrick, New YorkMICHAEL MORRIS
Age: 63
Residence: Merrick, New YorkE.D.N.Y. Docket No. 14-CR-399 (S-1) (ENV)
[1] The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
[2] Wash trades are purchases and sales of securities that match each other in price, volume, and time of execution, and involve no change in beneficial ownership. For example, a wash trade occurs when Investor A buys 100 shares at $5.00 of Company A through Broker A while simultaneously selling 100 shares at $5.00 of Company A through Broker B. Matched trades are similar to wash trades but involve a related third person or party who places one side of the trade. For example, a matched trade occurs when Investor A buys 100 shares at $5.00 of Company A through a broker, while Investor B, who coordinates with Investor A, simultaneously sells 100 shares at $5.00 of Company A through a broker. Both wash trades and matched trades are used to create the appearance that the stock price rose as a result of genuine market demand for the securities.
New Orleans Businessman Sentenced for Participating in Kickback SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANTHONY PENN, SR., age 53, of New Orleans, was sentenced today after previously pleading guilty to Count One of an Indictment charging him with conspiring to receive kickbacks in a federal debris removal contract.
U.S. District Judge Stanwood R. Duval sentenced PENN to three years of probation and one year of home confinement. Additionally, PENN was ordered to pay restitution in the amount of $215,111.55 to Company A.
According to court documents, the U.S. Army Corps of Engineers hired Phillips and Jordan, a national construction firm, to manage the removal of storm debris from the City of New Orleans after Hurricane Katrina devastated the metro area. After they were awarded the contract, Phillips and Jordan hired Company A, a local solid waste management company to assist with the debris removal project. Shortly after securing the contract, Company A hired ANTHONY PENN, a local businessman, to manage the debris removal project for them. After some time on the job, PENN approached the owners of Company A and asked if they would consider hiring his brother-in-law, KENNETH JOHNSON, as a sub-tier subcontractor to work on the project. The owners of Company A accepted the recommendation and hired JOHNSON’s company, KCJ Enterprises, as a sub-tier subcontractor. Sometime thereafter, PENN asked JOHNSON to provide him with a cut of the revenue that KCJ Enterprises was receiving from Company A as a reward for steering the contract to him. JOHNSON agreed to the scheme and wired a total of $236,461.55 in kickback payments to PENN from July 12, 2006, to February 8, 2008.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigations, the United States Department of Defense, and the Internal Revenue Service in investigating this matter. The case was prosecuted Assistant U.S. Attorneys Spiro G. Latsis and Theodore R. Carter, III.
New Haven Man Sentenced to More Than 6 Years in Federal Prison for Role in Drug Robbery SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LOUIS TOLER, also known as “A.B.,” 46, of New Haven, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 77 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 Donald Gaines, also known as “Stretch” and “Shorty,” of New Haven. 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 TOLER. After TOLER, Harrington, and the undercover agent had a detailed discussion about how the robbery was going to be carried out, TOLER and Harrington 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.
TOLER has been detained since his arrest. On May 1, 2015, he pleaded guilty to one count of possession of a firearm by a convicted felon.
TOLER’s criminal history includes approximately 29 misdemeanor and felony convictions, including convictions for assault, threatening, burglary, sale of narcotics and unlawful possession of a weapon.
Gaines and Harrington each previously pleaded guilty to one count of conspiracy to interfere with commerce by robbery. On November 3, 2015, Harrington was sentenced to 72 months of imprisonment. Gaines awaits sentencing.
This case is being prosecuted by Assistant U.S. Attorneys Tracy Dayton and Robert Spector.
Metairie Man Sentenced After Pleading Guilty to Recording Movies in a Local Theater and Criminal Infringement of a CopyrightRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DERRICK HOLLOWAY, age 32, of Marrero, was sentenced today after previously pleading guilty to two-count Bill of Information charging him with unauthorized recording of a motion picture and criminal infringement of a copyright.
U.S. District Judge Kurt D. Engelhardt sentenced HOLLOWAY to served four years probation with the first eight months in home confinement. Additionally, HOLLOWAY was fined $1,000 and ordered to pay restitution in the amount of $12,539.66 to the Motion Picture Association of America and the Recording Industry Association of America.
According to court documents, in 2014, HOLLOWAY used a digital camcorder to record approximately ten first-run motion pictures at the AMC Westbank Palace, located in Harvey, including When the Game Stands Tall and The Equalizer. HOLLOWAY subsequently duplicated and sold copies of some or all of the motion pictures. Additionally, HOLLOWAY manufactured and sold CDs and DVDs containing copyrighted musical works and motion pictures out from his business, Gold Teeth Kingz, located in Harvey. Specifically, during the execution of a search warrant at Gold Teeth Kingz in early January 2015, law enforcement authorities found and seized approximately 2,932 pirated DVDs containing copyrighted motion pictures, including When the Game Stands Tall and American Sniper, and 749 pirated CDs containing copyrighted musical works, including “Kingdom Come,” by Jay-Z and “Dangerously in Love,” by Beyoncé.
“Criminal counterfeiters are economic parasites who harm legitimate businesses that pay taxes, create jobs and support our national economy,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “Anyone who thinks counterfeiting is a victimless crime should realize the proceeds of black-market sales are routinely funneled up the chain to criminal organizations that use these ill-gotten proceeds to support a multitude of large-scale criminal activity.”
U.S. Attorney Polite praised the work of the Immigration and Customs Enforcement, Homeland Security Investigations in investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
Man Sentenced for Wilson PNC Bank RobberyRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced today in federal court, Senior United States District Judge James C. Fox sentenced PARIS CORDAVA WILLIAMS, 42, from the District of Columbia, to 108 months imprisonment followed by 3 years of supervised release. Additionally, he was fined $3,500 and ordered to pay $1,579 in restitution. On July 6, 2015 a federal jury convicted WILLIAMS and ROBERT EARL MAYS of bank robbery and aiding and abetting. WILLIAMS also was found guilty of possession of a firearm by a felon. Prior to trial, on June 29, 2015, a third defendant RICKY FRANKS pled guilty to bank robbery, aiding and abetting and felon in possession of a firearm. MAYS was sentenced to 125 months on September 29, 2015 and FRANKS is scheduled for sentencing for the November 30, 2015, term of court.
According to the investigation, WILLIAMS, MAYS and FRANKS were traveling in a car rented by FRANKS from the District of Columbia. On November 13, 2014, close to closing time, WILLIAMS and FRANKS entered the PNC Bank located at 3401 Raleigh Road Parkway in Wilson, North Carolina and robbed it. FRANKS vaulted the teller counter and took approximately $1,579.00 in United States currency from a teller’s drawer. When FRANKS grabbed the money, he also grabbed the GPS tracking device. FRANKS and WILLIAMS hid with the money and tracking device in the trunk of the rental car. MAYS drove the car a short distance away. The Wilson Police Department was alerted of the robbery and also notified that the moving tracking device became stationary on Raleigh Road. After a systematic search of cars in a stopped line of traffic near the bank, by Wilson Police Department officers, officers located WILLIAMS and FRANKS in the car’s trunk with the bag of money, GPS tracker and a firearm.
Investigation of this case was conducted by the Federal Bureau of Investigation, and the Wilson Police Department. The Bureau of Alcohol, Tobacco, Firearms, and Explosives also assisted. Assistant United States Attorneys S. Katherine Burnette and Carrie D. Randa represented the government.