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3 November 2015
Troy Man Sentenced to 4 Years in Prison for Possessing A HandgunRead the Press Release
ALBANY, NEW YORK – Ronnie Robinson, age 21, of Troy, New York, was sentenced today to four years in prison after being convicted of the crime of felon in possession of a firearm, announced United States Attorney Richard S. Hartunian, Delano A. Reid, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) New York Field Division, and Rensselaer Police Department Chief Frederick Fusco.
Robinson was a passenger in a car stopped by the Rensselaer Police Department for a traffic violation in the early morning hours of June 24, 2014. When asked to exit the vehicle, he fled on foot and in the course of his flight dropped a handgun. After further pursuit, Robinson was captured and the handgun was recovered. At the time, Robinson had prior state felony convictions for attempted criminal possession of a narcotic drug (third degree) and attempted reckless endangerment (first degree).
The four-year sentence of imprisonment, imposed by U.S. District Court Judge Gary L. Sharpe, will be served consecutively to the 18-month to 3-year sentence of imprisonment Robinson is currently serving for an unrelated state conviction. Following his release from prison, Robinson will be required to serve three years of supervised release.
The case was investigated by the ATF and the Rensselaer Police Department, and was prosecuted by Assistant United States Attorney Cyrus P.W. Rieck.
Three defendants sentenced on Federal drug charges in BluefieldRead the Press Release
BLUEFIELD, W.Va. – United States Attorney Booth Goodwin announced today that three defendants were sentenced on drug charges in federal court in Bluefield, West Virginia.
Aree Lumpkins, 20, of Princeton, was sentenced to two years in federal prison for using a telephone to arrange for the distribution of hydromorphone. Lumpkins pleaded guilty in July, and admitted that on October 30, 2014, he used a telephone in Bluefield to help set up a drug deal with an informant. Later that day Lumpkins completed the drug deal, and Lumpkins admitted that he distributed drugs to the informant on several other occasions.
Craig Arnold Young, 42, of Lashmeet, was sentenced to one year and one month in federal prison for using a telephone to arrange a drug deal involving hydromorphone. He pleaded guilty in July, admitting that on December 16, 2014, he used a telephone in or near Lashmeet to help carry out a drug transaction with an informant. Shortly after that telephone conversation, Young met with the informant to finish the drug deal. Young further admitted that he had distributed a total of 255 hydromorphone pills over time.
Lumpkins and Young were investigated by the Southern Regional Drug and Violent Crime Task Force under the Bluefield Pill Initiative. Assistant United States Attorney John File handled the prosecution of these cases. The Bluefield Pill Initiative is a collaborative, multi-agency regional law enforcement effort designed to halt prescription drug trafficking in Mercer, McDowell, and Wyoming counties. The Bluefield Pill Initiative is led by the Southern Regional Drug and Violent Crime Task Force, which includes the West Virginia State Police Bureau of Criminal Investigation; the Mercer, McDowell and Wyoming County Sheriff’s Departments; and the Bluefield and Princeton Police Departments.
Another defendant, Antonio Padgett, 36, of Welch, was sentenced to two years and three months in federal prison for crack distribution. Padgett pleaded guilty in July, admitting that on March 16, 2011, he distributed about five grams of crack to an informant in Welch. Padgett further admitted that he was involved in additional crack deals. This case was investigated by the Drug Enforcement Administration, the Southern Regional Drug and Violent Crime Task Force, the West Virginia State Police, and the McDowell County Sheriff’s Department. Assistant United States Attorney John Frail handled the prosecution.
These cases were all prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat illegal drugs in our communities, including the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down drug trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and other drugs in communities across the Southern District.
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Three People Sentenced in Tax Refund Fraud and Identity Theft SchemeRead the Press Release
PANAMA CITY, FLORIDA – Jermaine Winters, 39, of Coleman, Florida, Senora Cotton, 24, of Chipley, Florida, and Rosetta Presley, 23, of Chipley, Florida, were sentenced today for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft in connection with the electronic filing of false federal income tax returns. Winters was sentenced to 108 months in prison, Cotton to 24 months and 1 day in prison, and Presley to 2 days in prison and 5 years’ probation. Additionally, the defendants were ordered to pay $195,547 in restitution to the IRS. The sentences were announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
During their guilty pleas, Winters, Cotton, and Presley admitted that, between July 2011 and July 2012, they conspired to file fraudulent tax returns using the stolen identities of assisted-living facility residents who lived at the Dogwood Inn in Bonifay, Florida, as well as clinical laboratory patients from the Sun Laboratory Services in the Tampa, Florida area, and others. The conspirators attempted to steal more than $276,000 from the United States Treasury through the fraud scheme. The refunds issued on the fraudulent returns were loaded onto prepaid debit cards and mailed to addresses in the Northern District of Florida. Winters and Presley pled guilty on April 16, 2015, and Cotton pled guilty on August 3, 2015.
The case was investigated by the Internal Revenue Service – Criminal Investigation, the United States Postal Inspection Service, the Florida Department of Law Enforcement, the Chipley Police Department, and the Leon County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Kathryn D. Risinger and Gayle E. Littleton.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Three Assistant U. S. Attorneys PromotedRead the Press Release
FARGO- U. S. Attorney Christopher C. Myers announced that on November 1, 2015, three Assistant U. S. Attorneys have been promoted to leadership roles within the U.S. Attorney’s Office.
Keith Reisenauer has been promoted to First Assistant U. S. Attorney (FAUSA) and is a graduate of Mandan High School (1975) and the University of North Dakota (1979). He also attended the University of North Dakota Law School and earned his law degree in 1982.
Reisenauer has been with the United States Attorney’s Office since 1991. He was the Organized Crime and Drug Enforcement Task Force (OCDETF) Coordinator and prosecutor for the District of North Dakota for approximately 12 years and has been the Criminal Supervisor in the Fargo Office since 2008. Prior to becoming an Assistant United States Attorney, Reisenauer was with the Cass County States Attorney’s Office as an Assistant States Attorney from 1983-1991.
Rick Volk has been promoted to Senior Litigation Counsel and is a graduate of Rugby High School (1984) and Valley City State University (1988). He earned his law degree from the University of North Dakota School of Law in 1991.
Volk joined the United States Attorney’s Office in 2002 after over 9 years prosecuting cases at the Burleigh County State’s Attorney’s Office in Bismarck. Throughout his employment with the United States Attorney’s Office, Volk has been assigned to prosecution of violent crime and drug trafficking crimes in Indian country, serving as the primary point of contact for the Fort Berthold Indian Reservation for several years. He also serves as Special Counsel to the United States Attorney for Indian country and is the District Election Officer for the Office. In 2015, Volk was assigned to the Bakken Strike Force and designated to lead the federal prosecution of organized criminal activity in the northwest quadrant of the State of North Dakota and also serves as the supervisor of the Bakken Strike Force attorneys. Volk will continue in his role as the Strike Force supervisor as well as the new duties of Senior Litigation Counsel.
Jennifer Klemetsrud Puhl, a native of Devils Lake, ND, and graduate of the University of North Dakota School of Law, Class of 2000, has been promoted to Criminal Supervisor for the Fargo Office. Puhl has served as the North Dakota Coordinator for Project Safe Childhood (PSC), a Department of Justice initiative aimed at combating the sexual exploitation of children, for the past ten years. As the PSC coordinator, Puhl prosecutes the technology-facilitated sexual exploitation crimes against children to include child prostitution, child pornography, sexual extortion, as well as other child exploitation crimes. She has also worked very hard to obtain restitution for victims of child pornography offenses.
In addition to prosecuting the child exploitation cases, Puhl serves as the Human Trafficking Coordinator for the United States Attorney’s Office. Recently, she partnered with a nongovernmental organization in creating a response team of law enforcement and service providers to address the human trafficking epidemic in North Dakota. The goal of the response team is to rescue human trafficking victims and better investigate and prosecute their traffickers. Prior to joining the United States Attorney’s Office in 2002, Puhl worked in private practice in Minneapolis, Minnesota, and in 2000 she clerked for The Honorable Mary Muehlen Maring at the North Dakota Supreme Court.
Three Appleton Men Indicted for Firearms ViolationsRead the Press Release
Acting United States Attorney Gregory J. Haanstad of the Eastern District of Wisconsin, announced that a federal grand jury returned an indictment against Cory M. Yant (age: 35), Zachary C. Sternhagen (age: 31), and Kong P. Vang (age: 21) charging each of them with being felons in possession of a firearm in violation of Title 18, United States Code, Section 922(g). Additionally, Yant and Sternhagen are alleged to be “Armed Career Criminals” based on three prior violent felony convictions each.
Defendants Yant and Sternhagen face a mandatory minimum sentence of 15 years incarceration and up to a life sentence, a fine of $250,000, and a three year term of supervised release. Vang faces up to 10 years imprisonment, with the same fine and term of supervised release.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Winnebago County Sherriff and District Attorney’s Office, the Outagamie Sheriff and District Attorney’s Office, the Lake Winnebago MEG Unit, Wisconsin Department of Justice - Division of Criminal Investigation, the Appleton Police Department, and the Wausau Police Department. The case will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove each of them guilty beyond a reasonable doubt.
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St. Louis County Man Sentenced for Attempted Arson in FergusonRead the Press Release
St. Louis, MO – ANTONIO WHITESIDE, of St. Louis County, Missouri, was sentenced to five years imprisonment on the federal charge stemming from Whiteside starting a fire inside the Ferguson Supermarket, Inc. on November 24, 2014, the date St. Louis County Prosecuting Attorney Robert McCulloch announced the grand jury decision not to indict police officer Darren Wilson.
Whiteside pled guilty in April to one count of attempted arson. He appeared today for sentencing before United States District Judge John A. Ross.
Today’s sentence concludes the joint, cooperative investigation by the St. Louis County Police Department’s Bomb and Arson Unit and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives that enabled law enforcement to solve the case. The St. Louis County Prosecutor’s Office also provided significant assistance.
South King County Man Sentenced to Ten Years in Prison for Sex Trafficking Juveniles Across State LinesRead the Press Release
A 44-year-old man, who trolled neighborhoods in south King County looking for teen-age girls to recruit into prostitution, was sentenced today in U.S. District Court in Seattle to ten years in prison and 15 years of supervised release for four criminal counts related to sex trafficking, announced U.S. Attorney Annette L. Hayes. NATHAN BONDS was convicted at trial in November 2014 of two counts of sex trafficking of a juvenile and two counts of transportation of a juvenile to engage in prostitution. At sentencing U.S. District Judge John C. Coughenour said, “this is a serious case involving vulnerable children.”
“This defendant preyed on vulnerable teens to enrich himself,” said U.S. Attorney Annette L. Hayes. “He preyed on their homelessness, and their emotional and mental health challenges to lure them into prostitution. We thank the law enforcement agencies who work tirelessly to bring defendants such as this one to justice.”
According to records in the case and testimony at trial, in April 2013, BONDS was parked outside a Kent convenience store when he spotted and befriended a 15-year-old girl who had run away from home. BONDS let the girl borrow his cell phone, and then let her sit in his car, out of the rain. BONDS manipulated the girl into accompanying him to a hotel room where he raped her. Over the next few days, BONDS coerced the girl into working for him as a prostitute, convincing her she had no other options. BONDS advertised the girl on Backpage.com and made her give him all of the money she earned from prostitution acts. He also recruited the girl’s 17-year-old friend to work for him as a prostitute. On April 19, 2013, BONDS transported the 15-year-old girl and her 17-year-old friend, as well as a drug-addicted, homeless adult woman that he had also manipulated into working for him as a prostitute, to Portland to engage in prostitution. BONDS forced the two teens to take sexually explicit photographs, and then used some of those photographs to advertise them on Backpage.com.
Ultimately, both teens returned to their families and law enforcement identified BONDS as a sex trafficker. He was arrested June 5, 2013, and law enforcement recovered the computer and cell phone he used to conduct the prostitution business, both of which contained evidence establishing BONDS’s longtime involvement in prostitution.
The case was investigated by the North-Central Sound Child Exploitation Task Force which includes officers and agents from the Kent Police Department and FBI. The King County Prosecutors Office contributed substantial assistance to the prosecution. The case was prosecuted federally by Assistant United States Attorneys Kate Crisham and Ye-Ting Woo.
Six Individuals Indicted in November Grand JuryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office announced today the results of the November 2015 Federal Grand Jury.
“The following named individuals have been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-parolable.”
RICKY DALE BARRON, age 61, of Muse, Oklahoma
Felon In Possession Of Firearm
The Indictment alleges that on or about October 25, 2015 and again on or about October 29, 2015, within the Eastern District of Oklahoma, the defendant, RICKY DALE BARRON, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, firearms which had been shipped and transported in interstate commerce.
The charge arose from an investigation by the United States Forest Service. The charge is in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Tim Hammer
CLINTON LAMONT CRAWLEY, age 38, of Grant, Oklahoma
Felon In Possession Of Firearm And Ammunition
The Indictment alleges that on or about October 10, 2015, within the Eastern District of Oklahoma, the defendant, CLINTON LAMONT CRAWLEY, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm and ammunition which had been shipped and transported in interstate commerce.
The charges arose from an investigation by the Choctaw Nation Tribal Police, the Choctaw County Sheriff’s Office and the Federal Bureau of Investigation. The charges are in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Dean Burris
CHRISTOPHER DEAN JONES, age 36, of Stilwell, Oklahoma a/k/a "Snake"
Felon In Possession Of Firearm
Felon In Possession Of Firearm And Ammunition
Possession Of Counterfeit Obligations Or Securities Of The United StatesThe Indictment alleges that on or about July 30, 2015, within the Eastern District of Oklahoma, the defendant, CHRISTOPHER DEAN JONES a/k/a Snake, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce. It further alleges that on or about October 1, 2015, within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm and ammunition which had been shipped and transported in interstate commerce and the defendant, with intent to defraud, possessed a counterfeit obligation of the United States
The charges arose from an investigation by the Tahlequah Police Department, Cherokee County Sheriff’s Office, Cherokee Nation Marshal Service, United States Secret Service and the Bureau of Alcohol, Tobacco and Firearms. The charges are in violation of Title 18, United States Code, Section 922(g)(1) and Title 18, United States Code, Section 472, punishable by not more than 20 years imprisonment, a fine of up to $250,00.00 or both.
Assistant United States Attorney Dean Burris
BUDDY KENNY ROGERS, age 36, of Sayre, Oklahoma
BRITTANI M. ROSS, age 26, of Tahlequah, Oklahoma
Drug Conspiracy
The Indictment alleges that in or about June 2014 and continuing until on or about April 1, 2015, within the Eastern District of Oklahoma and elsewhere, the defendants, BUDDY KENNY ROGERS and BRITTANI M. ROSS, did knowingly and intentionally combine, conspire, confederate and agree together, and with others, known and unknown to the Grand Jury, to commit offenses against the United States in violation of Title 21, United States Code, Section 846, as follows: to possess with intent to distribute and to distribute 50 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II controlled substance and a mixture or substance containing a detectable amount of Heroin, a Schedule I controlled substance.
The charges arose from an investigation by the Tulsa County Sheriff’s Office, Tahlequah Police Department and the Drug Enforcement Agency. The charge is in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(B) and 841(b)(1)(C), punishable by not less than 5 years and up to Life imprisonment, up to a $8,000,000.00 fine or both.
Assistant United States Attorney Shannon Henson
GEORGE WILLIAM RUSSELL, age 38, of Leon, Oklahoma a/k/a "Willie"
Distribution Of Methamphetamine
The Indictment alleges that on or about May 29, 2015, within the Eastern District of Oklahoma, the defendant, GEORGE WILLIAM RUSSELL a/k/a Willie, did knowingly and intentionally distribute a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance. The charge arose from an investigation by the Ardmore Police Department, the Carter County Sheriff’s Office and the Federal Bureau of Investigation.
The charge is in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C), punishable by not more than 20 years imprisonment, up to a $1,000,000.00 fine or both.
First Assistant United States Attorney Doug Horn
Six Defendants Sentenced for $4.7 Million Check Cashing and Identity Theft SchemeRead the Press Release
Six defendants have been sentenced to prison terms for their participation in a $4.7 million check cashing and identity theft scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), made the announcement.
Stanley Presendieu, 33, of Lake Worth, Latasha Pharr, 29, of Davie, Scarlee Valias Jean, 25, of Smyrna, Georgia, Brian Deronceler, 32, of West Palm Beach, and Jason Miles, 34, of Plantation, were indicted in case number 15-20032-CR-GAYLES and charged with conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 1349, bank fraud, in violation of Title 18, United States Code, Section 1344, and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Husein Habib, 58, of Parkland, was charged by information in case number 15-20238-CR-GAYLES. Habib, Presendieu, Valias Jean, and Miles pled guilty to bank fraud conspiracy and aggravated identity theft. Following a jury trial, Deronceler and Pharr were convicted of all counts charged in the indictment.
On various dates, beginning on October 7, 2015, the defendants were sentenced for their participation in the fraudulent check cashing and identity theft scheme. Presendieu was sentenced to 212 months’ incarceration; Pharr was sentenced to 259 months’ incarceration; Valias Jean was sentenced to 51 months’ incarceration; Deronceler was sentenced to 183 months’ incarceration; Miles was sentenced to 145 months’ incarceration; and Habib was sentenced to 72 months’ incarceration.
According to the court record, Presendieu, Pharr, Jean, Deronceler and Miles used stolen personal identification information to make fraudulent claims on falsified tax returns. As a result of the unauthorized claims, the defendants fraudulently procured and cashed tax refund checks. The defendants also obtained stolen United States Treasury checks that had been issued for tax refunds, veterans’ benefits, and disability payments. Between March 2010 and late 2014, each of the defendants brought the illegally acquired checks and counterfeited identification documents to an accomplice, Habib, who operated a Boca Raton Kwik Stop convenience store that offered illicit check cashing services.
Evidence introduced at trial included undercover recordings of the conspirators presenting stolen and fraudulent checks, discussing the selection of identities they would use for the counterfeit identification cards and examining the quality of the falsified documentation that they produced for use in the check cashing scheme. The defendants and other individuals would use the stolen identities of victims throughout South Florida, including individuals in Miami-Dade, Broward, and Palm Beach counties along with others residing outside of the Southern District of Florida, and impersonate the taxpayers on fraudulent tax returns. The offenders would then have the refunds sent to an unauthorized address or transmitted to their illicit tax preparation companies. On other occasions, the conspirators arranged to cash the refunds and other benefit checks that were stolen from the U.S. mail. As a result of the fraudulent scheme, in excess of $4.7 million in stolen and fraudulent checks were cashed through the Boca Raton convenience store. Disabled individuals and other victims were deprived of much needed funds, college financial aid benefits were compromised, and one individual was temporarily forced to relocate to a homeless shelter.
Mr. Ferrer commended the investigative efforts of the FBI. This case was prosecuted by Assistant U.S. Attorney Karen Rochlin.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Simpson County, Kentucky Resident Charged with Making and Possessing Destructive Devices (Molotov Cocktails)Read the Press Release
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. today announced the indictment of a Simpson County, Kentucky resident on charges of making and possessing destructive devices, commonly known as Molotov cocktails.
Trey Alexander Gwathney-Law, age 18, of Franklin, Kentucky, was charged in a two count indictment by a grand jury meeting in Louisville. According to the Indictment, in September of 2015, the defendant knowingly made five illegal destructive devices. All were made using glass bottles. Four of the bottles (one Mountain Dew, one Sprite, and two Dr. Pepper) contained a dark gas/oil mixture liquid with a cloth wick stuffed in the bottle opening. A fifth destructive device was made using a glass Root Beer bottle. Similar to the other four devices, it contained a dark gas/oil mixture liquid with a piece of green pyrotechnic fuse attached to the opening with an epoxy sealant. The bottle contained a silver CO2 cartridge in the top of the bottle, under the pyrotechnic fuse. The CO2 cartridge contained explosive powder and small pieces of paper which appeared to have been soaked in the same flammable liquid found inside the bottle. The devices are commonly referred to as Molotov cocktails.
If convicted at trial, defendant Gwathney-Law could be sentenced to no more than ten years for each count, with a combined maximum of no more than 20 years in prison, fined up to $500,000.00 and ordered to serve 3 years of supervised release.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless and is being investigated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Franklin (Kentucky) Police Department.
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The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Silk Road Vendor Sentenced to Two Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced a former drug vendor on the Silk Road website, Sheldon Kennedy, age 25, of Lincoln, Nebraska, today to two years in prison, followed by three years of supervised release, for conspiracy to traffic in controlled substances, including cocaine. Kennedy sold drugs via an online marketplace called Silk Road. Silk Road served as an online, international marketplace for users to buy and sell controlled substances, false identifications, and other contraband over the Internet.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to his plea agreement, Kennedy, using an online nickname, made contact with buyers via Silk Road, accepted payment electronically through Silk Road, and shipped drugs via the United States Postal Service to buyers throughout the United States and in foreign countries. Kennedy paid a fee to the owner and operator of Silk Road, Ross William Ulbricht, for each transaction on the website. In 2012, federal agents in Maryland made several undercover purchases of drugs from Kennedy, which Kennedy shipped to Maryland. Kennedy also sold counterfeit currency and firearms. For instance, in May 2012 an undercover agent purchased a Glock 26 pistol from Kennedy. Kennedy disassembled the weapon and sent it to the undercover agent in two separate shipments to make it more difficult to detect. He made both shipments from Nebraska to an undercover mailbox in Maryland.
On June 28, 2013, a federal search warrant was executed at Kennedy’s residence in Lincoln, Nebraska. Kennedy was at home when the search warrant was executed and agreed to speak to law enforcement. Kenney admitted to that he used an online alias to sell drugs, guns, and counterfeit currency on Silk Road, including cocaine, LSD, and several other synthetic and prescription controlled substances. He also admitted that the chemicals and laboratory equipment in his residence were to manufacture phenazepam, a controlled substance. During the execution of the warrant, agents recovered ten firearms and various controlled substances, including Barbital powder, Phenazepam, Ethylphenidate, Ketamine, Etaqualone, Xanax, Valium, and Heroin. Kennedy also admitted selling at least 38 grams of cocaine.
Ross Ulbricht, a/k/a “Dread Pirate Roberts,” a/k/a “DPR,” age 31, of San Francisco, California, was convicted in the Southern District of New York on charges related to his operation of the Silk Road website and sentenced to life in prison.
United States Attorney Rod J. Rosenstein praised HSI Baltimore, DEA, U.S. Postal Inspection Service, ATF, U.S. Secret Service and IRS-Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Sandra Wilkinson and Paul E. Budlow, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Second Person Pleads Guilty in Smart Data Solutions, LLC, National Healthcare Benefits SchemeRead the Press Release
William M. Worthy, II, 53, of Isle of Palms, South Carolina, pleaded guilty today to federal charges arising from a national health care benefits scheme that defrauded more than 17,000 victims, announced David Rivera, United States Attorney.
During a hearing before U.S. District Court Judge Aleta A. Trauger, Worthy pleaded guilty to one count of wire fraud and one count of conspiring to commit mail fraud, wire fraud, health plan embezzlement, and money laundering. At the plea hearing Worthy admitted participating in a scheme designed to defraud thousands of individuals who purchased purported health care coverage from Worthy and his co-conspirators. Worthy acknowledged his role in promoting and selling the health care plans not backed by insurance companies, which were marketed by Smart Data Solutions, LLC (ASDS@), a company located in Springfield, Tennessee owned and managed by Bart Sidney Posey, Sr., who is charged as a co-conspirator in this case. Worthy also admitted that he and his co-conspirators embezzled funds from premiums paid by individuals who had signed up for these unauthorized health plans, diverting more than $5.4 million in premiums for their own personal use. He further admitted that the majority of claims submitted in connection with these unauthorized health plans were never paid and accepted responsibility for more than $7.3 million of losses from the fraud.
Worthy is scheduled to be sentenced by Judge Trauger on January 21, 2016. He faces up to 20 years in prison on the wire fraud charge and up to 5 years in prison on the conspiracy charge. Worthy will also be ordered to pay restitution to the victims of the fraud schemes and will face forfeiture of the proceeds of his crimes.
On August 14, 2015, Kathleen Devereaux Cauthen, 45, formerly a licensed attorney in South Carolina, pleaded guilty to misprision of a felony in connection with this same conspiracy and fraud scheme. During a hearing before Judge Trauger, Cauthen admitted she helped to conceal this fraud scheme by handling certain corporate filings, by posing as counsel for a sham insurance company and by operating and managing bank accounts used to receive health plan payments. Cauthen is scheduled to be sentenced on August 29, 2016, by Judge Trauger and faces up to three years in prison and restitution to the victims of her offense.
Worthy was indicted in connection with this scheme in June 2013. Also indicted were Bart Sidney Posey, Sr., 48, and Angela Slavey Posey, 48, both of Springfield, Tennessee and Richard Hall Bachman, 67, of Austin, Texas. Charges against Bart and Angela Posey and Bachman remain pending.
An indictment is merely an allegation and is not evidence of guilt, and these defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation; the United States Department of Labor - Employee Benefits Security Administration and Office of Inspector General; the United States Secret Service; the Internal Revenue Service - Criminal Investigation; and the Tennessee Office of the Attorney General. The United States is represented by Assistant United States Attorneys Sandra G. Moses and William F. Abely and by Senior Trial Attorney Nicholas S. Acker of the U.S. Department of Justice Fraud Section.
Santa Fe Man Sentenced to Federal Prison for Conviction on Oxycodone and Marijuana Trafficking ChargesRead the Press Release
ALBUQUERQUE – Ashraf Nassar, 32, of Santa Fe, N.M., was sentenced today in federal court in Albuquerque, N.M., to 41 months in prison followed by three years of supervised release for participating in conspiracies to distribute Oxycodone and marijuana. Nassar also was ordered to pay a money judgment in the amount of $6,150.00 to the United States.
Nassar and co-defendants Phillip Anaya, 38, Daniel Trujillo, 32, Krystal Holmes, 29, and Sarah Romero, 36, all residents of five Santa Fe residents, were charged in Sept. 2013, with participating in an Oxycodone trafficking ring in a 16-count indictment. The indictment subsequently was superseded in Oct. 2013, to include two additional defendants, Clarence Lee Cline, II, 66, and Mary Ann DeStefano, 53, both also of Santa Fe, and adding five new charges including conspiracy to distribute marijuana, manufacturing marijuana and maintaining a place for the purpose of manufacturing marijuana.
Nassar, Anaya, Trujillo, Holmes and Romero were arrested in Sept. 2013, as part of a multi-agency law enforcement operation that included the execution of search warrants at three residences and a business in Santa Fe. The investigation, “Operation High Desert Bash,” was initiated in Jan. 2013 by the DEA’s Tactical Diversion Squad in Albuquerque, N.M., the Santa Fe Police Department and HIDTA Region III Narcotics Task Force in response to the epidemic increase in prescription drug abuse, addiction and overdose deaths in New Mexico, particularly among teens and young adults.
Operation Desert Bash investigation was designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations. The investigation primarily targeted a drug trafficking organization unlawfully distributing quantities of Oxycodone in Santa Fe County. Oxycodone is an opioid narcotic pain reliever similar to morphine that is medically prescribed to treat moderate to severe pain and can be habit-forming. Officers seized approximately 7300 mg of Oxycodone during the investigation.
Count 1 of the 21-count superseding indictment charged the Nassar, Anaya, Trujillo, Holmes and Romero with conspiracy to distribute Oxycodone in Santa Fe County between Dec. 2012 and Sept. 2013. Counts 2 through 4 charged Nassar, Anaya and Holmes with substantive Oxycodone distribution offenses, Nassar, Anaya, Trujillo, Holmes and Romero were charged with using telephones to facilitate drug trafficking crimes in Counts 5 through 17. Count 18 charged Nassar, Cline and DeStefano with conspiracy to distribute marijuana. Counts 19 through 21 charged Cline and DeStefano with conspiracy to distribute marijuana, conspiracy to maintain a place for the purpose of manufacturing marijuana, and maintaining a place for the purpose of manufacturing marijuana.
On June 2, 2015, Nassar pled guilty to two counts of the superseding indictment; conspiracy to traffic Oxycodone and conspiracy to traffic marijuana. In entering the guilty plea, Nassar admitted that from Dec. 8, 2012 through Sept. 26, 2013, in Santa Fe he received Oxycodone from multiple sources of supply and would in turn provide that Oxycodone to re-distributers and users. Nassar also admitted that from Jan. 2, 2013 through Sept. 23, 2013, he was supplied “high grade” marijuana which he would then redistribute to other lower-level redistributors.
All of Nassar’s co-defendants have entered guilty pleas:
- Anaya pled guilty on Nov. 19, 2014, and was sentenced on April 9, 2015, to 46 months in prison followed by three years of supervised release.
- Trujillo pled guilty on Jan. 30, 2015, and was sentenced on April 2, 2015, to 18 months in prison followed by three years of supervised release.
- Romero pled guilty on Oct. 28, 2014, and was sentenced on March 26, 2015, to 18 months in prison followed by three years of supervised release.
- Holmes pled guilty on May 26, 2015, and was sentenced on Aug. 25, 2015, to 196 days in prison or time served followed by three years of supervised release.
- DeStefano pled guilty on March 27, 2015, and was sentenced on July 7, 2015, to five years of probation.
- Cline pled guilty on Sept. 4, 2015, and is currently scheduled for sentencing in Dec. 2015.
This case was investigated by the Tactical Diversion Squad of the DEA’s Albuquerque office, the Santa Fe Police Department and the HIDTA Region III Drug Enforcement Task Force, and is being prosecuted by Assistant U.S. Attorneys Shammara H. Henderson and Joel R. Meyers.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
The HIDTA Region III Drug Enforcement Task Force is comprised of officers from the New Mexico State Police, Santa Fe Police Department and Santa Fe County Sheriff’s Office. It is part of the High Intensity Drug Trafficking Areas (HIDTA) program which was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Registered Sex Offender Pleads Guilty to Sexual Exploitation ChargesRead the Press Release
BOSTON – A registered sex offender pleaded guilty yesterday in U.S. District Court in Springfield in connection with persuading a 16-year-old boy to travel to New York to engage in sexual activity.
Ronald S. Brown, 52, of Williamstown, Mass., pleaded guilty to one count of interstate travel with intent to engage in illicit sexual conduct with a minor and one count of possession of material involving the sexual exploitation of minors. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Feb. 1, 2016.
Brown, a registered sex offender based upon a prior conviction for a sexual assault of a 14 year-old, engaged in thousands of online interactions with a 16-year-old boy from Dec. 27, 2012 to Jan. 19, 2013 to persuade him to run away from his Midwestern home to engage in sexual activity with Brown. On Jan. 7, 2013, Brown sent the boy a one-way ticket to fly to Newark International Airport in New Jersey, and on Jan. 19, 2013, Brown picked the boy up at the Newark airport, and then transported him to New York to engage in sex. On three separate dates thereafter, Brown further sexually exploited the teenager by producing one digital file and two live video transmissions of the minor either masturbating or urinating.
The boy was recovered in New York after his mother alerted police that her son was missing and believed to be meeting up with Brown. During an interview on Jan. 20, 2013, Brown falsely told a federal agent that he believed the child to be 18 years old.
The charge of interstate travel with intent to engage in illicit sexual conduct with a minor provides a mandatory minimum sentence of 10 years and no greater than 30 years in prison, a minimum mandatory term of five years and up to a lifetime of supervised release, and a fine of $250,000. The charge of possession of material involving the sexual exploitation of minors provides for a mandatory minimum sentence of 10 years and no greater than 20 years in prison, a minimum mandatory term of five years and up to a lifetime of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case was investigated with assistance from the Massachusetts State Police, the Williamstown Police Department and the New York State Police. It is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Postal Employee Pleads Guilty to Stealing from MailRead the Press Release
JOHNSTOWN, Pa. - A resident of Summerhill, Pa., pleaded guilty in federal court in Johnstown to charges of theft of mail by a postal employee, United States Attorney David J. Hickton announced today.
Kelly Gruss, 36, of Summerhill, Pa., pleaded guilty to the indictment before United States District Judge Kim R. Gibson.
In connection with the guilty plea, on Sept. 22, 2014, Gruss stole $10, and on Sept. 25, 2014, she stole $20 from greeting cards sent via U.S. mail.
Judge Gibson scheduled sentencing for April 7, 2016, at 10 a.m. The law provides for a maximum total sentence of 10 years in prison, a fine of $500,000 or both. 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 defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Office of Inspector General of the United States Postal Service conducted the investigation that led to the prosecution of Gruss.
Philadelphia Man Charged in Two Bank RobberiesRead the Press Release
PHILADELPHIA - Harry Dallas, 54, of Philadelphia, PA, was charged today by indictment with two counts of bank robbery, announced United States Attorney Zane David Memeger. According to the indictment, on September 16, 2015, Dallas robbed the Citizens Bank at 7327 Frankford Avenue and, on September 20, 2015, robbed the TD Bank at 6635 Frankford Avenue.
If convicted of all charges, Dallas faces a statutory maximum sentence of 40 years in prison.
This case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Salvatore L. Astolfi.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Nine Jacksonville Residents Indicted for Supplemental Nutrition Assistance Program (SNAP) FraudRead the Press Release
Jacksonville, Florida – U.S. Attorney A. Lee Bentley, III announces today the return of three indictments charging nine Jacksonville residents with wire fraud and conspiracy to commit wire fraud in connection with the U.S. Department of Agriculture's Supplemental Nutrition Assistance Program (SNAP). The indictments in each case allege that these individuals engaged in a pattern of fraud by redeeming SNAP benefits through unauthorized Electronic Benefits Transfers (EBT). Two individuals have also been charged with selling cocaine in exchange for SNAP benefits. The maximum penalty for each count of wire fraud, conspiracy to commit wire fraud, and distribution of cocaine is 20 years in federal prison.
According to the indictment, between May 2012 and May 2015, Lawaun Dontai Carswell (35) and Shawntei Walker (36) stole more than $747,000 in SNAP funds. They also allegedly sold cocaine in exchange for SNAP benefits.
Between October 2014 and May 2015, La’Shell Dorianne Carswell (37) and Tommy Carswell (47) allegedly stole SNAP funds in excess of $714,000. La’Shell Carswell is charged with conspiracy to commit wire fraud. Tommy Carswell is charged with conspiracy to commit wire fraud and wire fraud.
Lakeya Sheeona Creech (29), Leroy Robinson, II (35), Tyrome Dionne Robinson (42), Tremain Mormon (43), and Robert Savage (26) allegedly stole more than $1.1 million between June 2013 and June 2015. Creech is charged with conspiracy to commit wire fraud. The indictment charges the four other individuals with conspiracy to commit wire fraud and wire fraud.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
These cases were investigated by the United States Department of Agriculture Office of the Inspector General; the United States Secret Service; the Drug Enforcement Administration; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Department of the Treasury’s Office of Inspector General; the Internal Revenue Service; the Jacksonville Sheriff’s Office; the Florida Fish and Wildlife Conservation Commission; the Florida Department Of Children and Families, Office of Public Benefits Integrity; and the Florida Department of Financial Services, Division of Public Assistance Fraud. They are being prosecuted by Assistant United States Attorney Jay Taylor.
New Haven Man Sentenced to 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 HAROLD HARRINGTON, also known as “Chopper” and “Chapo,” 27, of New Haven, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 72 months of imprisonment, followed by three years of supervised release, for his 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 Harrington. The undercover agent told Harrington that he wanted to hire someone to commit a home invasion robbery of a drug organization’s “stash house” in order to steal six to eight kilograms of cocaine. Harrington agreed to participate and helped plan the robbery, which would include the use of firearms. Harrington also stated that he would bring members of his crew to help commit the robbery.
The undercover agent and Harrington agreed to split the cocaine taken during the robbery, and they agreed to give Gaines one kilogram of the drug for putting the two individuals together.
On March 21, 2014, the day of the proposed robbery, Harrington arrived at the meeting location with Louis Toler, also known as “A.B.,” of New Haven. After Harrington, Toler and the undercover agent had a detailed discussion about how the robbery was going to be carried out, Harrington and Toler were arrested. A subsequent search of Toler’s car revealed a loaded firearm.
The informant then called Gaines, told him the robbery had gone smoothly and arranged to meet him to deliver the cocaine. When Gaines arrived at the designated location, he identified the law enforcement surveillance and drove off at a high rate of speed. After a short chase, Gaines crashed his car on an off ramp in West Haven, attempted to flee on foot and was apprehended.
Harrington has been detained since his arrest. On May 6, 2015, he pleaded guilty to one count of conspiracy to interfere with commerce by robbery.
Harrington has prior state felony convictions for criminal possession of a firearm, possession with intent to sell crack cocaine and first degree robbery.
On March 5, 2015, Gaines pleaded guilty to one count of conspiracy to interfere with commerce by robbery and, on May 1, 2015, Toler pleaded guilty to one count of possession of a firearm by a convicted felon. They await sentencing.
This case is being prosecuted by Assistant U.S. Attorneys Tracy Dayton and Robert Spector.
Naples Man Sentenced to 10 Years for Possession and Distribution of Child PornographyRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Michael Eugene Read (60) to 10 years in federal prison for possessing and distributing child pornography. He pleaded guilty on July 28, 2015.
According to court documents, on October 27, 2014, an agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations conducted an online investigation into individuals who were using peer-to-peer software to share child pornography files. The agent connected with Read’s computer and downloaded four videos depicting child pornography.
On January 30, 2015, agents executed a search warrant at Read’s residence. Subsequent forensic analyses of his external hard drive and computer media revealed a collection of more than 25,000 images depicting child pornography. During an interview with agents, Read admitted to searching for and downloading hundreds of images and videos of child pornography from the Internet over the past several years. He estimated that he had approximately 500 GB of child pornography stored on his hard drive.
“Every investigation against a child predator is disturbing, but this case involved one of the largest amounts of child pornography we have seen in the Fort Myers region, making it an especially important investigation,” said Susan L. McCormick, special agent in charge of HSI Tampa.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Moving Company Owner Pleads Guilty to Bait-And-Switch SchemeRead the Press Release
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UPDATE
Following court rulings, the defendant's original conviction and sentence were vacated. Thereafter, Massaro pleaded guilty to conspiracy, money laundering and failure to return household goods in connection with defrauding 23 victims (instead of the original 52) of approximately $28,460. He was sentenced to two years of probation, with the first eight months to be served in home detention.
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BOSTON – The owner of a South Florida moving company pleaded guilty today in U.S. District Court in Boston in connection with a scheme that defrauded over $112,000 from 52 victims.
Louis Massaro, 34, of Scottsdale, Ariz. and Pompano Beach, Fla. pleaded guilty to an Information charging him with one count each of conspiracy to commit wire fraud, money laundering and failure to return household goods. U.S. District Judge Rya W. Zobel scheduled sentencing for Feb. 9, 2016.
Massaro owned and operated Moving and Storage Inc., which did business as Neighbors Moving and Storage (NM&S). Although Massaro advertised as a mover of household goods, he operated NM&S as a broker of such services – taking jobs that would later be passed on to other carriers without disclosing that fact to the clients. One of the companies to which Massaro passed on contracts was an interstate carrier of household goods based in Massachusetts.
From approximately August 2010 to October 2012, Massaro and his co-conspirators operated a “bait-and-switch” operation in which Massaro, through NM&S, would provide low-ball estimates for moving household goods and falsely tell customers that upon payment of a deposit and a “binding” fee, the price would be guaranteed. Customers that contracted with NM&S were never told that the actual move would be completed by another carrier.
After customers made the initial payments, Massaro and his co-conspirators (the actual carrier) would obtain additional money from them in several ways. For example, once the 7-day cancellation period had passed, employees of NM&S would call the customers for a so-called “Quality Assurance Check.” While discussing the items to be moved, NM&S employees, under Massaro’s direction, would indicate that there were more items being moved than originally quoted and raise the quoted price. Customers were forced to elect between cancelling the contract and losing their deposit fees, and paying the higher amount.
Once Massaro’s co-conspirators arrived to conduct the move, the drivers would inform customers that there was more weight to be moved than was included in the binding quote, even in those instances where the price had already been increased during the “Quality Assurance Check.” At that point, the price of the move would increase by thousands of dollars – sometimes even doubling or tripling from the quoted estimate, and drivers were directed not to deliver any goods unless and until all money was collected. When a customer refused to pay the inflated price, they were informed that their household goods would be placed in storage, that they would have to pay before their goods would be delivered, and that they would be billed an additional amount of money for storage fees and re-delivery, or, alternatively, that their goods would be sold at auction. As a result of Massaro’s criminal scheme, victims lost $112,650 over the 26-month period.
The charge of conspiracy to commit wire fraud provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of money laundering provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. The charge of failure to return household goods provides a sentence of no greater than two years in prison, a $250,000 fine, and one year of supervised release. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Theodore L. Doherty, III, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations; and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Mingo County man pleads guilty to lying on form when purchasing a firearmRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Gene Autry Brinager, Jr., 52, of Delbarton, Mingo County, West Virginia pleaded guilty today in federal court in Charleston to lying on a form when purchasing a firearm from a federally licensed firearms dealer. In April of 2010, Brinager purchased two firearms from Williamson Gun and Archery, a federally licensed firearms dealer in Williamson, and he filled out a Department of Justice form required for anyone who purchases a firearm from a federally licensed dealer. On that form, Brinager falsely stated that he was not an unlawful user of, or addicted to a depressant, stimulant, narcotic drug, or any other controlled substance. At the time he filled out the form, Brinager knew that he was an unlawful user of and addicted to opiate pills, a controlled substance and a narcotic. Brinager faces up to five years in federal prison when he is sentenced on February 4, 2016.
This case was investigated by the West Virginia State Police. The prosecution is part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
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Michigan Man Charged with Wire Fraud Conspiracy for Operating $6.8 Million Internet Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – A criminal indictment was unsealed today in federal court charging Troy Barnes, 53, of Riverview, Michigan, with wire fraud conspiracy and wire fraud, for operating a $6.8 million Internet Ponzi scheme that defrauded more than 10,000 investor victims worldwide, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Barnes’ conspirator, Kristine Louise Johnson, of Aurora, Colorado, pleaded guilty in June 2015 to wire fraud conspiracy for her role in the scheme.
Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division joins U.S. Attorney Rose in making today’s announcement.
According to filed court documents, Barnes was the owner of “Work with Troy Barnes, Inc.” (WWTB), which did business over the Internet under the name of “The Active Community” (TAC). Barnes was the President and Marketing Director of WWTB responsible for promoting the online scheme. Johnson served as TAC’s Chief Financial Officer, and managed TAC’s day-to-day operations, including the company’s bank accounts. Filed court documents indicate from about April 2014 to February 2015, Barnes induced victims to invest money in TAC, claiming “Achieve is the answer to all of our prayers…” and falsely promising investors would receive a bogus 700% return on their investment. Barnes also told his victims they could make as much money as they wanted claiming the investment was “never-ending,” when, in fact, TAC operated solely as a pyramid scheme and initial investors were paid with later victims’ money. Barnes also falsely touted TAC as a “lifetime income plan,” with “limitless returns, even though by August 2014, Barnes and Johnson had discussed TAC’s inevitable shortfall and knew that TAC did not have sufficient funds to cover weekly payouts to investors, much less operating expenses.
According to court filings, as the scheme grew in size and scope, Barnes and his conspirators concealed the true nature of the scheme through multiple misrepresentations. According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors that “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.” Even when TAC was unable to operate because their payment processor concluded that TAC was indeed operating a Ponzi scheme and ceased doing business with the company, Barnes and his conspirators lied to victims, falsely stating that “The only reason that [TAC] is not paying out today is that our processor can’t handle the volume of money we are paying our members.”
According to court records, in order to sustain the scheme, Barnes and his conspirators encouraged investors to “re-purchase” positions in the matrix, thereby reducing the amount of money needed to pay out to early investors and enabling the fraudsters to prolong the scheme. As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors. By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte-area and worldwide, and owed victim-investors at least $51 million in purported investment returns, yet only had available approximately $2.6 million. According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment.
Barnes had his initial appearance today and was released on bond. Johnson’s sentencing hearing has been set for November 19, 2015, before U.S. District Judge Max O. Cogburn, Jr.
The case was investigated by the U.S. Secret Service. In making today’s announcement, U.S. Attorney Rose thanked the Denver Regional Office of the Securities and Exchange Commission for its assistance with the case.
Assistant U.S. Attorney Corey F. Ellis is in charge of the prosecution.
Mexican national arrested in Vinton pleads guilty to reentering the United States illegallyRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that a Mexican national who was arrested in Vinton, La., pleaded guilty last week to charges that he reentered the United States multiple times without obtaining permission.
Luis Alberto Roblero-Escalante, 25, of Mexico, pleaded guilty Friday before U.S. District Judge Patricia Minaldi to one count of illegal reentry of a deported alien. According to the guilty plea, Vinton police found the defendant walking along Interstate 10 on June 10, 2015. After talking to police, he admitted he was a Mexican national. It was later discovered that Roblero-Escalante was previously removed from the United States on January 9, 2009, March 15, 2011, May 19, 2011 and January 13, 2015.
Roblero-Escalante faces 10 years in prison, three years of supervised release and a $250,000 fine. A sentencing date of February 4, 2015 was set.
Homeland Security Investigations-U.S. Border Patrol and the Vinton Police Department conducted the investigation. Assistant U.S. Attorney Dominic A. Rossetti is prosecuting the case.
Mastermind of $400,000 Federal Benefit Fraud Scheme SentencedRead the Press Release
Memphis, TN – The main conspirator in a lucrative federal benefit fraud scheme that defrauded the government of $400,000 has been sentenced to 27 months in prison. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentencing today.
According to the indictment, Ray Chism III defrauded the government by purchasing Supplemental Nutrition Assistance Program (SNAP) benefits from recipients for cash in amounts less than the face value of the benefits. He would then redeem the benefits at full monetary value.
From October 2011 to December 2013, Chism recruited multiple SNAP recipients willing to sell their allotted benefits for amounts less than face value. Chism subsequently redeemed the benefits through Maxi Foods, a grocery store owned by Chism’s brother, Remark Chism, for full monetary value. In October, Remark Chism was sentenced to 37 months imprisonment for masterminding a separate $2.8 million federal benefit fraud scheme.
SNAP (formerly known as Food Stamps) is a program designed to help low- and middle-income families purchase food. A SNAP beneficiary is provided a designated amount of funding each month via a rechargeable Electronic Benefits Transfer (EBT) card. Cardholders are able to use the allotted funding to purchase eligible food items at authorized retailers. Maxi Foods possessed a SNAP EBT card system, enabling SNAP beneficiaries to pay for eligible food items with their EBT card.
Chism also masterminded a scheme to defraud the Child Care Certificate Program, which provides federal funding to assist underprivileged families with child care costs, from October 2011 to December 2013. Chism paid cash to parents who qualified for Certificate Program benefits in exchange for use of their child care certificates. After acquiring the information, Chism would falsely report the children’s attendance to his daycare center, Helping Hands Enrichment Center, and receive reimbursement for care. Chism also provided non-qualifying parents with false employment verification, which qualified them for the Certificate Program.
In July 2015, Chism pled guilty to one count of conspiracy to commit SNAP benefit fraud and one count of conspiracy to commit child care benefit fraud.
On Tuesday, November 3rd, U.S. District Judge John T. Fowlkes Jr. sentenced Chism to 27 months imprisonment. Chism was also ordered to pay $200,000 in restitution.
This investigation was conducted by the United States Department of Agriculture Office of the Inspector General; United States Secret Service; United States Marshals Service; Memphis Police Department – Organized Crime Unit; and the Tennessee Department of Human Services.
Assistant U.S. Attorneys Larry Laurenzi and Debra Ireland prosecuted the case on the government’s behalf.
Mastermind of Online Counterfeit Card Retail Shop Sentenced to More Than Six Years in PrisonRead the Press Release
Fakeplastic.net Responsible for More than $30 Million in Fraud
NEWARK, N.J. – The creator and administrator of fakeplastic.net, a one-stop online shop selling counterfeit credit and debit cards, or “payment” cards, and holographic overlays used by criminals to create fake driver’s licenses, was sentenced today to 78 months in prison, U.S. Attorney Paul J. Fishman announced.
Sean Roberson, 40, of Palm Bay, Florida, previously pleaded guilty before U.S. Magistrate Judge James B. Clark III to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit fraud and related activity in connection with authentication features. U.S. District Judge Jose L. Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
The fakeplastic.net website was a one-stop online shop operated by Roberson and used by criminals across the country to purchase customized counterfeit credit and debit cards used for unauthorized transactions with stolen payment card data, and holographic overlays used to make fake driver’s licenses.
During his guilty plea proceeding, Roberson admitted he began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the website with the assistance of Vinicio Gonzalez and Hugo Rebaza. Roberson admitted that he and his conspirators fulfilled orders for approximately 69,000 counterfeit payment cards, more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders – more than 3,600 parcels – were shipped through the U.S. mail.
Law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $30 million. During his guilty plea, Roberson admitted he personally made more than $1.7 million from the scheme.
The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews bought stolen payment card numbers and related information – referred to as “track data” or “dumps” – which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data was ultimately put on a counterfeit payment cards, purchased from Roberson, and used to make unauthorized transactions.
In addition to the prison term, Judge Linares ordered Roberson to serve five years of supervised release and pay restitution of $3,578,996.52. As part of his plea agreement, Roberson forfeited his Bitcoin, a house in Palm Bay, a 2013 Yamaha motorboat and trailer, and a 2008 Hummer.
Gonzalez and Rebaza have both pleaded guilty to related charges in the Western District of North Carolina and were sentenced to 36 and 12 months in prison, respectively.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing.
The Computer Crimes and Intellectual Property Section (CCIPS) of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Western District of North Carolina have been partners in the prosecution.
The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Barbara Ward of the office’s Asset Forfeiture and money laundering unit.
Defense counsel: Assistant Federal Public Defender Patrick McMahon Esq., Newark
Marion County, WV man charged with unlawful possession of firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal grand jury returned an indictment today charging Antonio Cottingham, 28, of Fairmont, West Virginia, with unlawful possession of a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Cottingham was previously convicted in the Northern District of West Virginia of the felony offenses of “Distribution of Crack Cocaine” and “Escape from Custody.” He was also previously convicted in state court in West Virginia of the felony offense of “Conspiracy to Commit a Felony Against the Sate.” As a result of these convictions, he is prohibited from possessing firearms. He was allegedly discovered in possession of a .44 caliber revolver in August 2015 in Fairmont, West Virginia.
Cottingham is charged with one count of “Felon in Possession of a Firearm.” He faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney David Perri is prosecuting the case on behalf of the government. The Fairmont, West Virginia Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives are leading the investigation.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Manchester Man Pleads Guilty to Firearm ChargeRead the Press Release
CONCORD, NEW HAMPSHIRE - Nathan Tremblay, 22, of Manchester, New Hampshire, appeared in United States District Court today and entered a guilty plea to one count of possession of a firearm by a prohibited person in violation of federal law, announced Acting United States Attorney Donald Feith.
On August 10, 2014, Tremblay was a passenger in a vehicle that was subject to a traffic stop by the Concord Police Department. The defendant was carrying a Taurus handgun and 34 rounds of Hornady 9 caliber ammunition. Concord Police also seized a backpack belonging to the defendant, and after searching it with the defendant’s consent, found three small plastic baggies containing the controlled substance marijuana. The defendant was a regular user of the controlled substance marijuana at the time he possessed the firearm. Tremblay faces a maximum sentence of ten years in prison and criminal fines of up to $250,000. Sentencing is presently scheduled for February 10, 2016.
“The combination of firearms and drug use presents a particularly dangerous potential harm to the public,” stated Acting United States Attorney Donald Feith. “Our office will continue to combat the threat posed when unlawful users of controlled substances possess firearms.”
This case was investigated by the Concord Police Department and the Bureau of Alcohol Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant United States Attorney Georgiana L. Konesky.
Las Cruces Man Sentenced to Federal Prison for Narcotics Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Eddie Gallardo, 32, of Las Cruces, N.M., was sentenced this morning in Las Cruces federal court to 78 months in prison followed by four years of supervised release for his conviction on cocaine and methamphetamine trafficking charges.
Gallardo was arrested on May 22, 2014, on a criminal complaint charging him with methamphetamine trafficking and being a felon in possession of a firearm. The complaint alleged that on May 13, 2014, Gallardo sold a handgun and methamphetamine to an undercover FBI agent. At the time, Gallardo was prohibited from possessing firearms or ammunition because he previously had been convicted of a drug trafficking offense.
Gallardo subsequently was charged in a seven-count indictment filed in Aug. 2014 with cocaine distribution on Aug. 7, 2013, Aug. 22, 2013 and Oct. 30,2013; methamphetamine distribution on Aug. 22, 2013, April 14, 2014 and May 13, 2014; and being a felon in possession of a firearm on May 13, 2014.
On Jan. 6, 2015, Gallardo pled guilty to the six drug trafficking crimes charged in Counts 1 through 6 of the indictment. In entering his guilty plea, Gallardo admitted selling cocaine and methamphetamine on six occasions to a law enforcement officer who was acting in an undercover capacity between Aug. 7, 2013 and May 13, 2014.
Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case. This is one of many cases generated by a 15-month investigation by the FBI’s Las Cruces Southwest Border/Safe Streets Task Force and the New Mexico HIDTA Regional Interagency Drug Task Force (Metro Narcotics Task Force). The investigation, which concluded in Aug. 2014, initially targeted methamphetamine manufacturers and traffickers operating out of Doña Ana County, but expanded to include individuals trafficking in other drugs and using firearms to facilitate their drug trafficking crimes. The investigation identified sources of drug supply in Los Angeles, Calif., Tucson, Ariz., and El Paso, Texas, who were supplying drug traffickers in southern New Mexico with high-grade methamphetamine, and led to the filing of criminal charges against 75 individuals, including 42 federal defendants and 33 state defendants. Law enforcement officers seized more than 29 pounds of methamphetamine, 37 pounds of cocaine, 4.5 ounces of heroin, 30 pounds of marijuana, 74 firearms and 17 vehicles during the course of the investigation.
Lake Charles man pleads guilty to attempted possession of child pornographyRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that a Lake Charles man pleaded guilty last week to attempting to possess child pornography.
Jerry Junior Logg, 26, of Lake Charles, pleaded guilty Friday before U.S. District Judge Patricia Minaldi to one count of attempted possession of child pornography. According to the guilty plea, Logg communicated in October of 2012 with a minor female from New Jersey using an internet chat service. Logg pretended to be two different young people online and attempted to convince the minor to send sexually explicit images of herself.
Logg faces up to 10 years in prison, five years to life supervised release and a $250,000 fine. He is also required to register as a sex offender. A sentencing date of February 4, 2016 was set.
The FBI investigated the case. Assistant U.S. Attorney Myers P. Namie is prosecuting the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, visit www.projectsafechildhood.gov.
Those concerned may also leave tips with the FBI at tips.fbi.gov. Tips may be submitted anonymously. The Lake Charles FBI office number is (337) 433-6353.
La Detención en Bakersfield Lleva una Sentencia de Prisión de 11 Años por Tráfico de MetanfetaminaRead the Press Release
FRESNO, California – Raúl Canchola Farías, 40, residente de Pacoima, ha sido sentenciado hoy por el Juez Federal Anthony W. Ishii a 11 años y tres meses de prisión por posesión con el intento de distribuir metanfetamina, anunció el Procurador de los Estados Unidos Benjamín B. Wagner.
Según los documentos del tribunal, Farías fue arrestado el 5 de noviembre del 2013, después de que su vehículo fuera detenido por un Oficial de la Patrulla de Carretera en la Autopista 99 en Bakersfield y fueron encontradas más de 21 libras de metanfetamina ocultadas en el vehículo.
Este caso ha sido el resultado de una investigación llevada a cabo por la Agencia Antidrogas de Estados Unidos (Drug Enforcement Administration) o DEA y la Patrulla de Carretera de California. El Procurador Auxiliar de los Estados Unidos Brian K. Delaney procesó el caso.
La Detención En Bakersfield Lleva Una Sentencia De Prisión De 11 Años Por Tráfico De MetanfetaminaRead the Press Release
FRESNO, California – Raúl Canchola Farías, 40, residente de Pacoima, ha sido sentenciado hoy por el Juez del Distrito de Estados Unidos Anthony W. Ishii a 11 años y tres meses de prisión por posesión con el intento de distribuir metanfetamina, anunció el Procurador de los Estados Unidos Benjamín B. Wagner.
Según los documentos del tribunal, Farías fue arrestado el 5 de noviembre del 2013, después de que su coche fuera detenido por un Oficial de la Patrulla de Carretera en la Autopista 99 en Bakersfield y fueron encontradas más de 21 libras de metanfetamina ocultadas en el vehículo.
Este caso ha sido el resultado de una investigación llevada a cabo por la Agencia Antidrogas de Estados Unidos (Drug Enforcement Administration) o DEA y la Patrulla de Carretera de California. El Procurador Auxiliar de los Estados Unidos Brian K. Delaney procesó el caso.
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Kilgore Pleads Guilty to Three Counts of Conspiracy to Commit Health Care FraudRead the Press Release
SALT LAKE CITY – Jacob J. Kilgore, a former owner of a Salt Lake City durable medical equipment company, pleaded guilty in U.S. District Court late Monday afternoon to three counts of conspiracy to commit health care fraud as a part of Medicare fraud scheme involving power wheelchairs. The plea agreement includes a stipulated sentence of 60 months in federal prison, subject to acceptance by the court.
U.S. Attorney John W. Huber of the District of Utah, FBI Special Agent in Charge Eric K. Barnhart of the FBI’s Salt Lake City Field Office, Special Agent in Charge Gerald Roy of the U.S. Department of Health and Human Services Office of Inspector General; and Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service’s (DCIS) Southwest Field Office announced the plea agreement.
Kilgore pleaded guilty to a three-count Felony Information filed Monday afternoon.
Kilgore, 36, of Fruit Heights, was the co-owner of and employed as the vice president, and later, president of Orbit Medical, a Utah- and Indiana-based national supplier of durable medical equipment that specialized in power wheelchairs. Orbit maintained three Utah offices in the Salt Lake City area. Kilgore acted as sales manager for Orbit’s western region sales territory which included offices in Utah, Arizona, Nevada, Idaho, Washington, and Oregon.
“In the United States Attorney’s Office, we take our professional obligations seriously and will not trade our integrity for any case. While upholding the highest ethical standards, my office will aggressively root out white collar fraud and hold law breakers accountable for the damage caused by their greed-driven actions,” United States Attorney John W. Huber said today.
“Less than a month after the court rejected his motions claiming prosecutorial misconduct, Mr. Kilgore has accepted responsibility for a multi-million-dollar fraud scheme. On October 8, 2015, Chief Judge David Nuffer denied the defense motion to dismiss and to disqualify the prosecution team, finding that the prosecution had not deliberately intruded into privileged attorney-client communications. Today, the defendant has voluntarily agreed to a five-year prison sentence for his criminal conduct and has chosen to abandon any further challenge to the court’s ruling against him. This development speaks volumes as to the denied claims that federal prosecutors were acting outside their ethical obligations,” Huber said.
As a part of the plea agreement, Kilgore admitted that he knew that Medicare required the company to maintain supporting medical record documentation, including the prescription from the treating physician, which supported the medical necessity of the power wheelchair supplied to the beneficiary and billed to Medicare. He admitted knowing that Medicare could request the supporting medical record documentation of a claim submitted by Orbit for review, and, if the documentation did not meet Medicare’s requirements, the claim could be denied.
Kilgore admitted that while at Orbit, he instructed inside and outside sales representatives in taking paperwork received from physicians and making changes to the paperwork – including revising, altering, modifying or replacing – in order to make it appear that beneficiaries qualified for Medicare coverage of a power wheelchair under false and fraudulent pretenses. This process was referred to at times as “chiseling.” Kilgore admitted that while he was at Orbit, he had computer software installed on computers used by sales representatives. That software enabled sales representatives to electronically “chisel” documents received from physician offices to make it appear that Medicare requirements were met. This process caused the submission of false and fraudulent claims to Medicare. Throughout the conspiracy, Kilgore admitted he enforced a sales quota of 10 power wheelchairs per month and at times, terminated sales representatives for failing to meet the quota.
As a part of his plea to three counts of conspiracy to commit health care fraud, Kilgore admitted that he and three individuals identified as unindicted co-conspirators 1, 2, and 3 submitted false claims to Medicare for power wheelchairs. He admitted that from April 2008 to around July 2010, he and UC1 submitted claims under fraudulent pretenses from Orbit to Medicare for more than $500,000. From around October 2006 to around June 2011, he and UC2 caused Orbit to submit fraudulent claims to Medicare resulting in reimbursements from Medicare of more than $679,909. From around 2009 to around August 2010, Kilgore and UC3 caused Orbit to submit fraudulent claims to Medicare resulting in reimbursements of more than $200,000. From around October 2006 to around June 2011, Kilgore and other sales reps caused Orbit to submit claims to Medicare for power wheelchairs under false and fraudulent pretenses resulting in reimbursements to Orbit.
“This guilty plea is the result of the diligent work and collaborative efforts of several agencies. We will continue to work with our law enforcement partners to investigate those who attempt to cheat the federal health care programs,” said Gerald Roy, Special Agent in Charge of Health and Human Services Office of Inspector General.
"This plea highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of federal health care programs, including the Department of Defense health care program known as TRICARE," said Special Agent in Charge Janice M. Flores of the DCIS Southwest Field Office. "DCIS aggressively investigates health care providers that defraud the DoD to preserve American taxpayer dollars intended to care for our warfighters, their family members and military retirees."
As a part of the plea agreement, Kilgore agreed to pay restitution in the case, including for victims of relevant conduct. Parties to the criminal case will try to resolve the amount of restitution through a stipulated agreement. If an agreement is not reached, a restitution hearing will be scheduled. He also agreed to a forfeiture money judgment in an amount to be determined by the court at sentencing. Sentencing is set for Jan. 27, 2016, at 2 p.m.
Additionally, former Orbit sales representatives Morgan Workman of Farmington, Utah; David Evans of South Jordan, Utah; and Hunter Hartman of Ladera Ranch, Calif., have each pleaded guilty to conspiring to commit health care fraud, based on the same alleged scheme to defraud Medicare. Sentencing for the three will be in February.
Kansas Man Ordered to Federal Prison in Child Exploitation CaseRead the Press Release
HOUSTON – A 44-year-old Kansas man has been ordered to federal prison for transporting a minor across state lines with the intent to engage in criminal sexual activity, announced U.S. Attorney Kenneth Magidson. Paul Francis Grimm, of Goddard, Kansas, pleaded guilty Nov. 4, 2014.
Today, U.S. District Judge George C. Hanks Jr. ordered Grimm serve a total of 183 months in federal prison. The sentence will be immediately followed by 10 years of supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. In handing down the sentence, Judge Hanks stated that the crime Grimm committed was cold, calculated and meticulously planned. He added that Grimm’s acts were selfish and not acceptable in society.
Grimm had been engaging in an online relationship with a 15-year-old female. He later made arrangements for the child to travel from Ohio to Houston where Grimm picked her up at the airport. He then transported her to Galveston where they boarded a cruise ship and spent several days cruising through the Caribbean.
Upon arrival back in Galveston, a Customs and Border Protection (CBP) officer noticed Grimm and the minor female did not have the same last name nor were they related. The subsequent FBI investigation revealed Grimm and the victim had been communicating online and via cell phone for quite some time. Grimm had even paid for the child’s phone.
Using a ruse, Grimm communicated to the minor’s mother that he wanted the victim to join him and his son, a supposed friend of the victim, on a cruise. He had proved the mother with his military identification and gave other assurances to her, at which time she allowed her daughter to travel to Houston to meet Grimm for the cruise.
Grimm and the victim travelled as a couple, shared a room and posed for photographs together on the cruise. Evidence of a sexual relationship between Grimm and the victim were found on computer devices.
Grimm was arrested on March 29, 2014. Following a detention hearing, the court heard the government’s evidence and ordered him into custody. While detained, Grimm allegedly called his ex-wife in an attempt to have one of his children destroy evidence in his home in Kansas. Authorities executed a search warrant at the residence and, as a result, a grand jury sitting in the Wichita Division of Kansas has returned an indictment on seven counts of production of child pornography. Those charges are still pending and he is considered innocent in that case unless and until proven guilty through due process of law.
The charges were the result of an investigation conducted by FBI with the assistance of CBP.
This case, prosecuted by Assistant U.S. Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
KC Man Sentenced to 20 Years for Drug TraffickingRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., man has been sentenced in federal court for his role in a conspiracy to distribute methamphetamine and money laundering.
Jose Luis Ramirez, also known as “Guero,” 38, of Kansas City, was sentenced by U.S. District Judge Howard F. Sachs on Monday, Nov. 2, 2015, to 18 years in federal prison without parole, plus an additional two years for the revocation of his supervised release in another, unrelated case, for a total sentence of 20 years in federal prison without parole.
On May 1, 2015, Ramirez pleaded guilty to participating in a conspiracy to distribute 500 grams or more of methamphetamine from Jan. 1 to Nov. 27, 2012, and to participating in a conspiracy to engage in money laundering from April 27, 2012, to April 30, 2012.
Ramirez admitted that he supplied co-conspirators with methamphetamine to distribution. Ramirez also admitted that he packed $76,760 in shrink wrap and hid it in a secret compartment of a Ford Expedition, which he paid a co-conspirator to drive to California.
This case was prosecuted by Assistant U.S. Attorney Catherine Connelly. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Justice Department Sues South Dakota State Agency for Discrimination Against Native American Job Applicants at Pine Ridge ReservationRead the Press Release
The Justice Department today filed a lawsuit against the South Dakota Department of Social Services (DSS) alleging that at its Pine Ridge Reservation Office, the state agency repeatedly discriminated against Native American job applicants because of their race, in violation of Title VII of the Civil Rights Act of 1964.
The lawsuit, filed in the U.S. District Court for the District of South Dakota, alleges that in failing to select well-qualified Native American applicants for several positions in DSS’s Pine Ridge Reservation Office, the state agency engaged in a pattern or practice of discrimination and violated Title VII of the Civil Rights Act of 1964, a federal statute that prohibits employment discrimination on the basis of sex, race, color, national origin and religion.
“Federal law provides all Americans with equal opportunity to compete for jobs on a level playing field free from racial discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “When employers discriminate against qualified job applicants because of what they look like or where they come from, they violate both the values that shape our nation and the laws that govern it.”
According to the complaint, in October 2010, Cedric Goodman, a Native American with supervisory experience as a social worker, as well as several other well-qualified Native Americans, applied for an Employment Specialist position at DSS’s Pine Ridge Office. The complaint alleges that after interviewing Goodman and the other Native American candidates who met the employer’s objective job qualifications, DSS removed the vacancy and hired no one. The next day, however, DSS reopened the position and ultimately selected a white applicant with inferior qualifications and no similar work experience. The complaint alleges that DSS discriminated against Goodman and other similarly-situated Native American applicants based on their race.
In addition, the complaint alleges that denying Goodman’s application was part of a pattern or practice of race discrimination by DSS, where the agency repeatedly removed job postings and used subjective, arbitrary hiring practices to reject qualified Native American applicants for Specialist positions.
Over a two year period beginning in 2010, DSS posted 18 Specialist vacancies for its Pine Ridge Reservation Office. Even though the agency received nearly 40 percent of its applications from Native Americans, DSS hired 11 Whites and only one Native American, while removing six other openings entirely.
The lawsuit seeks declaratory and injunctive relief requiring DSS to implement employment policies, including fair applicant screening and interviewing practices, that prevent racial discrimination in hiring. The United States will also seek to obtain “make whole” relief, including monetary damages, for Goodman and other similarly situated individuals.
"The facts obtained during the investigation by the EEOC are disheartening," said Julianne Bowman, Chicago District Director. "We are pleased that the Department of Justice is filing a lawsuit to resolve the injustices uncovered."
Goodman originally filed a charge of race discrimination with the Equal Employment Opportunity Commission (EEOC). The EEOC’s Minneapolis Area Office, in the Chicago District, investigated the matter and found reasonable cause to believe that DSS discriminated against Goodman and a class of Native American applicants. After unsuccessful conciliation, the EEOC referred the matter to the Justice Department.
The Justice Department’s Civil Rights Division brought this lawsuit as part of a joint effort to enhance collaboration between the Justice Department and the EEOC in the vigorous enforcement of Title VII. Additional information about the division, including a copy of the complaint, can be found online on its website at www.justice.gov/crt.
U.S. v. S.D. DSS Complaint (146.11 KB)
Justice Department Announces Banque Bonhôte & Cie SA Reaches Resolution Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Banque Bonhôte & Cie SA (Banque Bonhôte) has reached a resolution under the department’s Swiss Bank Program.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Banque Bonhôte agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
Banque Bonhôte is a private bank established in 1815 in the City of Neuchâtel, Switzerland. It is a privately held stock company, and the majority of its share capital is owned by its management board and employees. Until 2002, Banque Bonhôte had a single office in Neuchâtel; since then, it has opened branches in Bienne, Geneva and Berne, Switzerland.
Banque Bonhôte’s cross-border banking business aided and assisted some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income the clients held in their accounts from the Internal Revenue Service (IRS). Banque Bonhôte knew, or should have known, that it was likely that certain U.S. taxpayers who maintained accounts at Banque Bonhôte were not complying with their U.S. tax reporting obligations.
Banque Bonhôte used a variety of means to assist U.S. clients in concealing the assets and income the clients held in their Bonhôte undeclared accounts, including opening and maintaining numbered accounts, as well as holding bank statements and other mail at Banque Bonhôte’s offices in Switzerland. Banque Bonhôte also opened accounts for U.S. taxpayers who had left UBS or Credit Suisse when these banks were being investigated by the department.
Private bankers, referred to as client relationship managers, served as Banque Bonhôte’s primary contact for accountholders at the bank. Client relationship managers aided or assisted U.S. clients to open and manage accounts that were undeclared and that were established and maintained in a manner designed to conceal the U.S. taxpayers’ ownership or beneficial interest in the accounts. Banque Bonhôte compensated client relationship managers, in part, based on the amount of business they generated for Banque Bonhôte.
Banque Bonhôte referred bank clients to Bonhôte Trust SA, a Swiss fiduciary and trust advisory firm located in Neuchâtel and acquired by Banque Bonhote in 2001. Bonhôte Trust provided assistance in setting up entities such as offshore companies and foundations, including sham entities, for clients including U.S. taxpayers and provided administrative services to those entities.
Through Bonhôte Trust, Banque Bonhôte created offshore foundations, corporations, trusts and similar entities organized in jurisdictions such as the British Virgin Islands and Nevis. In some instances, Banque Bonhôte structured a U.S.-related account that appeared as if it was held by a non-U.S. legal entity, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS. Banque Bonhôte also had accounts opened through external asset managers and maintained in the name of offshore structures, despite knowing that in at least some instances the beneficial owners of such accounts were U.S. persons. Banque Bonhôte knew or should have known that, at least in some instances, external asset managers opened and managed accounts at Banque Bonhôte in the name of a sham offshore structure that in reality held assets owned by a U.S. client.
Approximately 35 percent of Banque Bonhôte’s U.S.-related accounts were held in the name of offshore structures, and Banque Bonhôte accepted the use of IRS or substitute forms that falsely stated under penalties of perjury that sham entities beneficially owned the assets in the undeclared accounts.
Throughout its participation in the Swiss Bank Program, Banque Bonhôte committed to providing full cooperation to the U.S. government. Among other things, Banque Bonhôte described in detail the structure and operation of its U.S. business, including its cross-border business policies. Banque Bonhôte was able to disclose the identities of more than half of the beneficial owners of its U.S.-related accounts to the department and provided narrative summaries of other U.S.-related accounts for use in other ongoing and potential department investigations.
Since Aug. 1, 2008, Banque Bonhôte held and managed 63 U.S.-related accounts, including both declared and undeclared accounts, which had a peak of aggregated assets under management of $88.7 million. Banque Bonhôte will pay a penalty of $624,000.
While U.S. accountholders at Banque Bonhôte who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at Banque Bonhôte must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS, and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Ciraolo also thanked Lisa L. Bellamy, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jury Convicts Houston Physician in Health Care Fraud ConspiracyRead the Press Release
HOUSTON – A federal jury sitting in Houston has returned guilty verdicts today against Dr. Enyibuaku Rita Uzoaga, 43, on six counts of health care fraud and one count of conspiracy to commit health care fraud, announced U.S. Attorney Kenneth Magidson. The jury deliberated for approximately four hours following a six-day trial.
Co-defendant Charles Harris, 55, pleaded guilty prior to trial.
At trial, the jury heard that from approximately 2006 through 2010, Uzoaga, Harris and others falsely billed Medicare and Medicaid for numerous, unnecessary vestibular diagnostic tests. Some patients were billed for hundreds of tests, some for more than a 1,000. The evidence at trial showed that the testing by Harris and his employees was either not performed, not medically necessary and/or not performed by licensed individuals.
Vestibular diagnostic testing is used to diagnose a person for vertigo or dizziness. After being diagnosed, patients usually undergo physical therapy, take medication or undergo surgery as treatment.
As a result of this unlawful scheme, Medicare and Medicaid were billed approximately $653,970 in submitted, fraudulent vestibular diagnostic claims. Medicare and Medicaid paid $389,285 on those claims.
Vestibular testing accounted for 23 percent of Uzoaga’s income from Medicare and Medicaid.
At trial, Uzoaga attempted to convince the jury that she was unaware of the false billings. The jury did not believe her story and found Uzoaga guilty as charged.
U.S. District Judge Ewing Werlein Jr. presided over the trial and has et sentencing for Feb. 29, 2015. At that time, Uzoaga faces up to 10 years in federal prison on each of the charges as well as a possible $250,000 fine.
Uzoaga was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of the investigative efforts of the Texas Attorney General’s Medicaid Fraud Control Unit, Department of Health and Human Services - Office of Inspector General, Office of Investigations and the FBI. Special Assistant U.S. Attorney Suzanne Bradley and Assistant U.S. Attorney Tina Ansari prosecuted the case.
Joplin Man Sentenced for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man was sentenced in federal court today for possessing child pornography.
Donald Eugene Ruddick, 39, of Joplin, was sentenced by U.S. District Judge M. Douglas Harpool to six years in federal prison without parole. The court also ordered Ruddick to pay $2,500 in restitution to each of two victims. Following incarceration, Ruddick will serve a 15-year term of supervised release.
On June 4, 2015, Ruddick pleaded guilty to possessing child pornography. Ruddick admitted that he used a peer-to-peer file-sharing program to download child pornography over the Internet.
On Dec. 26, 2012, law enforcement officers identified Ruddick’s computer as sharing child pornography with other computers. Officers executed a search warrant at Ruddick’s residence and seized a desktop computer, a laptop computer and compact disks.
According to court documents, forensic examiners discovered a library of child pornography on Ruddick’s computers that included hundreds of images and hundreds of additional videos depicting children and toddlers being raped and sexually abused, many of which were in excess of five minutes in length. Ruddick possessed material depicting the sadistic and masochistic abuse of children, including the sexual violation of toddlers and children being forced to engage in sex with dogs and horses.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Jacksonville Man Sentenced to More Than Seven Years for Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – U.S. District Judge Brian J. Davis has sentenced Christopher Shawn Warnock (43, Jacksonville) to seven years and six months in federal prison for receiving child pornography over the Internet. Warnock was also ordered to serve a 15-year term of supervision, and to register as a sex offender, upon his release from prison. He has been in custody since his arrest on December 17, 2014.
According to court documents, on October 30, 2014, an agent with the FBI in Newark, New Jersey began an undercover online investigation to identify individuals who were using the Internet to share images and videos depicting child pornography. The agent made online contact with Warnock and was able to download 24 videos of child pornography from his computer. Further investigation traced the computer to Warnock’s residence in Jacksonville.
On December 17, 2014, law enforcement officers executed a federal search warrant at Warnock’s residence and seized his computer. Warnock told the agents that he searches online for child pornography using certain key terms, and that he enjoys watching others having sex with children. Forensic analyses of Warnock’s computer revealed that it contained at least 13 videos depicting the sexual abuse of young children. Logs of online conversations, in which Warnock had indicated his desire to exchange videos of child pornography with other Internet users, were also recovered.
This case was investigated by the Federal Bureau of Investigation in Newark and Jacksonville, and the Jacksonville Sheriff’s Office. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Indianapolis man sentenced in North Vernon robbery and murder caseRead the Press Release
New Albany - United States Attorney Josh J. Minkler, announced today and Indianapolis man was sentenced for his role in the murder and robbery of Scoot D. Maxie a gun store owner near North Vernon, Indiana. Darryl A. Worthen, 25, was sentenced to 60 years in federal prison by U. S. District Judge Sarah Evans Barker at the federal courthouse in New Albany.
“This type of violence is something no family or community should have to face,” said Minkler. “Judge Evans Barker sent a loud and clear message that gun violence will not be tolerated in the Southern District of Indiana and those committing violent crime will be held accountable.”
On September 20, 2014, Darryl Worthen, his brother Dejuan Worthen and cousin Darion Harris traveled from Indianapolis to North Vernon to see what inventory was inside the Muscatatuck Outdoors Gun Shop and made plans to rob the owner. They drove back to Indianapolis only to return the following day to commit the robbery.
After returning to the gun store on September 21, 2014, one of the defendants disconnected a security camera inside the gun shop. During the robbery, Darryl Worthen shot and killed Maxey with a .22 caliber handgun then all the defendants stole a large quantity of firearms from the gun shop and returned to Indianapolis. Once home with the guns, the defendants sold and distributed many of the firearms and kept several for themselves.
This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Indiana State Police, Indianapolis Metropolitan Police Department, Jennings County Sheriff’s Department and the Jennings County Prosecutors Office.
“There is no place in our society for those who use violence to further their criminal aims, particularly when it costs the life of valued members of our families and communities,” said Donald Soranno, Special Agent in Charge of ATF’s Columbus Field Division. “ATF takes pride in working with our law enforcement partners at the federal, state, and local levels to bring those individuals who commit senseless acts of violence like this to justice and ensure that they cannot cause further harm.”
“Violent crime will not be tolerated in this community,” said Jennings County Prosecuting Attorney Brian Belding. “The individuals responsible should be punished to the fullest extent of the law. The decision to have these individuals charged federally was made after thoughtful consultation with the family members. My goal was that the individuals responsible for this heinous act serve the maximum sentence under the law. This was accomplished under the federal sentencing guidelines. As much as it would be appropriate to prosecute these crimes locally, it was not in the best interest of our community because Mr. Worthen received a harsher sentence in Federal Court. My heart goes out to Mr. Maxie’s family, friends, and loved ones.”
According to Assistant U.S. Attorneys Barry D. Glickman and William L. McCoskey, who prosecuted this case for the government, Worthen must serve two years of supervised release after his sentence.
Worthen’s co-defendants DeJuan A. Worthen and Darion D. Harris are both awaiting trial on their charges.
High-Frequency Trader Convicted of Disrupting Commodity Futures Market in First Federal Prosecution of "Spoofing"Read the Press Release
CHICAGO — In the first federal prosecution of its kind, a high-frequency trader was convicted today of disrupting commodity futures prices in a $1.4 million fraud scheme.
MICHAEL COSCIA, 53, used an automated trading technique to commit a crime known as “spoofing” to earn illegal profits from orders he placed through Chicago-based CME Group and London-based ICE Futures Europe. Coscia commissioned the design of two computer programs, known as algorithms, to implement his fraudulent strategy at his New Jersey trading firm.
The jury in federal court in Chicago deliberated for approximately one hour before convicting Coscia on all 12 counts, including 6 counts of commodities fraud and 6 counts of spoofing. Each count of commodities fraud carries a maximum sentence of 25 years in prison and a $250,000 fine, while each count of spoofing carries a maximum sentence of ten years in prison and a $1 million fine. U.S. District Judge Harry D. Leinenweber scheduled a sentencing hearing for March 17, 2016, at 9:45 a.m.
The indictment against Coscia, of Rumson, N.J., marked the first federal prosecution nationwide under the anti-spoofing provision that was added to the Commodity Exchange Act by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The case was prosecuted by Assistant United States Attorneys Renato Mariotti and Sunil Harjani of the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago. The section, which was created in 2014, is dedicated to protecting markets and preserving investors’ confidence.
“The defendant’s trading activities disrupted the markets in his favor and against legitimate traders and investors,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “We have to have fairness and integrity in our markets. And enforcement, including federal criminal prosecutions, is an important tool to protecting those values. The jury’s verdict exemplifies the reason we created the Securities and Commodities Fraud Section in Chicago, which will continue to criminally prosecute these types of violations.”
Mr. Fardon announced the conviction along with Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
High-frequency trading is a form of automated trading that uses computer algorithms for placing a high volume of trading orders in milliseconds. It is illegal for traders to engage in spoofing, which involves placing “bids” to buy or “offers” to sell a futures contract with the intent to cancel the bid or the offer before execution.
Evidence at the seven-day trial showed that Coscia engaged in spoofing in the markets of various commodities, including gold, soybean meal, soybean oil, high-grade copper, Euro FX and Pounds FX currency futures. In less than three months in 2011, Coscia illegally profited nearly $1.4 million.
Coscia has been a registered commodities trader since 1988. In 2007, he formed Panther Energy Trading LLC in Red Bank, N.J.
Harrison County, WV woman convicted of heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Miranda D. Swiger, 21, of Stonewood, West Virginia, was convicted of heroin trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Swiger, also known as “MiMi,” was discovered in possession of heroin in January 2015 in Taylor County, West Virginia. She pled guilty today to one count of “Possession with Intent to Distribute Heroin – Aiding and Abetting.” She 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 Zelda Wesley and former Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael J. Aloi presided.
Harrison County, WV woman charged with prescription pill traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal grand jury returned an indictment today charging Brittney Michelle Walls, 26, of Clarksburg, West Virginia, with prescription medication trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Walls was allegedly discovered in possession of buprenorphine, a schedule three controlled substance used to treat pain and opioid addiction, and alprazolam, a schedule four controlled substance used to treat anxiety, in May 2015 in Harrison County, West Virginia.
Walls is charged with one count of “Possession with Intent to Distribute Controlled Substances.” She faces up to five years in prison and a fine of up to $250,000 for possessing schedule four controlled substances and up to ten years in prison and a fine of up to 10 years in prison and a fine of up to $500,000 for possessing schedule three controlled substances. 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 Andrew Cogar is prosecuting the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the West Virginia State Police are leading the investigation.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Hallettsville Man Sentenced for Possession of Child PornographyRead the Press Release
VICTORIA, Texas – A 25-year-old Hallettsville man has been ordered to federal prison following his conviction of possession of child pornography, announced U.S. Attorney Kenneth Magidson. Manuel Averill Amaro pleaded guilty July 7, 2015.
Today, Senior U.S. District Judge John D. Rainey sentenced Amaro to 96 months in prison to be immediately followed by a 10-year-term of supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
On March 30, 2015, authorities began investigating Amaro for allegations involving the sexual exploitation of a child. During the course of the investigation, authorities conducted a search and seized Amaro’s two phones. A forensic examination of the phones led to the discovery of more than 600 images of children involved in sexual explicit conduct.
Amaro admitted to possessing the images. He also admitted to looking at child pornography since he was 14 years of age.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges against Amaro was the result of an investigation conducted by Homeland Security Investigations and the Hallettsville Police Cyber Crimes Unit.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Four Fresno Residents Sentenced for Their Roles in Methamphetamine Trafficking ConspiracyRead the Press Release
FRESNO, Calif. — United States District Judge Anthony W. Ishii sentenced the final two defendants on Monday for a conspiracy to sell multiple pounds of methamphetamine to a confidential source, United States Attorney Benjamin B. Wagner announced.
On Monday, Veronda Creasy, 32, was sentenced to five years in prison, and Juventino Galindo, 41, was sentenced to eight years and nine months in prison for conspiracy to distribute and possess with intent to distribute methamphetamine.
On October 19, 2015, Touch Peang, 35, was sentenced to 12 years in prison for conspiracy to distribute methamphetamine and marijuana. Bruce Hunt, 60, was sentenced on October 13, 2015, to four years in prison for using a telephone to facilitate the commission of a felony. All defendants pleaded guilty in July and August 2015.
According to court documents, on April 29, 2014, Creasy and Hunt arranged to sell methamphetamine to a confidential source who wanted to purchase 10 pounds. Creasy sought the assistance of Galindo to obtain the substantial quantity of methamphetamine and Galindo arranged for Peang to sell the methamphetamine. On May 1, 2014, Hunt called the confidential source to notify him that the methamphetamine was available. Galindo, Creasy and Hunt led the confidential source to Peang’s place of employment, where Peang showed the methamphetamine to him. Shortly thereafter, officers of the Fresno Police Department executed a search warrant at the location, resulting in the arrest of the defendants and the seizure of eight pounds of methamphetamine, 13 pounds of marijuana, and two firearms.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners at the Fresno Police Department on this investigation and will continue to protect the public and the U.S. Mail against all forms of criminal misuse.”
This case was the product of an investigation by the United States Postal Inspection Service and the Fresno Police Department. Assistant United States Attorney Melanie L. Alsworth prosecuted the case.
Fort Myers Felon Sentenced for Possessing A FirearmRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Jamar James (25, Ft. Myers) to four years and five months in federal prison for possessing a firearm as a convicted felon. He pleaded guilty on July 28, 2015.
According to court documents, on January 9, 2014, James contacted a confidential informant (CI) and stated that he had a handgun for the CI to purchase. He instructed the CI to meet him at the same location where he had previously facilitated the sale of a firearm between the CI and an associate. Upon arrival at the location, the CI paid James $200. James then loaded a Hi-Point .38 caliber pistol with six rounds of ammunition and handed it to the CI.
James was previously convicted of multiple felony offenses in Lee County, including uttering a forged instrument and grand theft, and possession of a weapon or ammunition by a convicted felon. He is therefore prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, with assistance from the Fort Myers Police Department. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Regina Lombardo, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violence in our communities.
Former Portland Resident Sentenced to Prison for Tax Fraud SchemeRead the Press Release
A former Portland, Oregon, resident was sentenced to serve 24 months in prison followed by three years of supervised release for his involvement in a fraudulent income tax refund scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Brandon Leath, 36, pleaded guilty on July 23 to one count of conspiracy to file false claims and one count of theft of government funds. U.S. District Judge for the District of Oregon Robert E. Jones also ordered Leath to pay $55,635 in restitution to the Internal Revenue Service (IRS).
According to court documents, Leath conspired with others, including his wife, Shawntina Ware, to file more than 227 false income tax returns fraudulently claiming more than $1 million in refunds. The false information on the tax returns included fictitious W-2 wages and inflated withholding amounts. The co-conspirators often shared the fraudulent refunds with each other by splitting the refund into multiple bank accounts controlled by the co-conspirators or their family and friends.
Three of Leath’s co-conspirators have pleaded guilty to various charges and are scheduled to be sentenced. On June 5, co-conspirator Jasmine Mason pleaded guilty and is scheduled to be sentenced on Nov. 18. Ware pleaded guilty on July 23 and is scheduled to be sentenced on Jan. 6, 2016. Co-Conspirator Tataneisha White pleaded guilty on Oct. 1 and is scheduled to be sentenced on Jan. 7, 2016.
Acting Assistant Attorney General Caroline D. Ciraolo commended special agents of the IRS - Criminal Investigation, who investigated the case, and Trial Attorneys Lori A. Hendrickson and Ryan R. Raybould of the Tax Division, who are prosecuting the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the District of Oregon for their substantial assistance.
Former Pastor of Louisville Parish Charged by Grand Jury Indictment with Accessing and Viewing Child Pornography over the InternetRead the Press Release
LOUISVILLE, Ky. – The former pastor of a Louisville, Kentucky, parish was charged by grand jury Indictment today with violating federal child exploitation laws, announced United States Attorney John E. Kuhn, Jr.
The Indictment charges Stephen Pohl, age 57, with knowingly accessing, via the Internet, with intent to view material that contained images of child pornography between January and August 2015.
Pohl was initially charged with the same offense by criminal complaint on August 21, 2015. The complaint was filed after law enforcement officials executed two federal search warrants on August 12, 2015, in the work and living areas used by Pohl in the parish office and rectory of St. Margaret Mary Catholic Community, located at 7813 Shelbyville Road, in Louisville, Kentucky.
Law enforcement officials arrested Pohl in Indian Rocks Beach, Florida, on Friday evening, August 21, 2015. Pohl was then held at the Pinellas County Jail until his transfer to the custody of the United States Marshals Service. He appeared in United States District Court for the Western District of Kentucky on September 2, 2015.
If convicted, Pohl faces maximum potential penalties of 10 years in prison, a $250,000.00 fine and at least five years of Supervised Release.
Assistant United States Attorney Jo E. Lawless is prosecuting the case. The Federal Bureau of Investigation in conjunction with Louisville Metro Police Department’s Crimes Against Children Unit conducted the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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The charging of a person by a Grand Jury Indictment is an accusation only and that person is presumed innocent until and unless proven guilty.
Former Owner of Virginia Based Stonewood Marketing Sentenced to 24 Months in Prison for Mail Fraud - Diverted and Stole $1.1 Million Intended for Political Campaigns, PACS, and Non-Profit OrganizationsRead the Press Release
Victims included McConnell Senate Committee
Defendant admitted to purchasing vacation condominiums, luxury automobiles and jewelry with the stolen funds
LOUISVILLE, Ky. – The former vendor for multiple local, state, and federal campaigns, PACs, and non-profit organizations throughout the United States, including the McConnell Senate Committee was sentenced in U.S. District Court today, by District Judge Greg Stivers, to 24 months in prison, fined $75,000 and ordered to pay $1,124,047 in restitution, for stealing more than $1.1 million in contributions and donations intended for committees and organizations announced U.S. Attorney John E. Kuhn, Jr.
“Samuel Pate, violated a position of trust - not only with the organizations that he represented, but with the earnest citizens trying to participate in the political process through contributions,” stated U.S. Attorney Kuhn. “Due to the efforts of my office and the FBI, nearly half all the stolen funds have been recovered and are being returned to the victim organizations. On this election day, let this be a reminder to those who attempt to subvert the political process – you will be caught and you will be prosecuted.”
Samuel K. Pate, Jr., age 52, of Forest, Virginia, pleaded guilty to three charges of mail fraud on August 10, 2015. To date, the United States has seized and forfeited property traced to fraud proceeds, which has been valued at over $379,000. In addition, approximately $103,000 has been turned over as restitution and has been distributed to victims. Restitution is being made in the form of reimbursements to Campaigns, PACs and organizations. For donations made to defunct organizations, reimbursements are being sent directly to the contributor.
Pate owned and operated Stonewood Marking in Forest, Virginia. Campaigns, PACs, and organizations contracted with Pate to process contributions received through direct mail and to maintain donor records when required by the Federal Election Commission (FEC). Donations were received by the Campaign, PACS, and organizations through the mail at their local offices, then automatically forwarded through the U.S. mail to Stonewood Marketing for processing. Pate maintained designated bank accounts at BB&T for the deposit of donations and campaign contributions.
According to the federal information, from February 2008 through November 2014, Pate routinely misappropriated client funds by diverting funds from their designated accounts or transferring funds from client accounts into other bank accounts he controlled. During the course of the scheme he stole donations and contributions totaling approximately $1,124,274.35 that were intended for the following political campaigns, PACs, and non-profit organizations: McConnell Senate Committee - $118,294; Christians in Defense of Israel - $319,691.09; House Conservative Fund - $30,614; Vitter for Senate (Louisiana) - $480,821.26; Catholic Advocates - $153,445; Jewish Voice - $150; Reagan Action - $1,025; Ten Commandments Commission - $2,098; Republican Majority Campaign - $11,300; Policy Issues Institute - $2,280; Defund Obamacare - $100; NRSC - $100; Randall Terry for Senate - $6; Freedom Defense Advocates - $990; Frontline Ministries - $1,150; Christian Anti-Defamation League - $2,020; and Live Prayer - $190.
During this period, Pate used the stolen and misappropriated funds to pay credit card bills, purchase vehicles, condominiums in Myrtle Beach, South Carolina, decorate a residence, pay family members, and pay personal expenses.
From February 2008 through November 2014 Pate paid approximately $284,841.85 in personal American Express credit card bills using stolen funds and transferred approximately $237,100 in stolen funds to his personal American Express savings accounts.
Further on or about October 21, 2010, through July 21, 2014, Pate used $28,104 in stolen funds from an Exodus Mandate account to pay condominium maintenance fees for both condominium unit 210 and unit 1015 located at 161 Seawatch Drive, Myrtle Beach, South Carolina. On or about December 13, 2010, he used $10,800 in stolen funds from the Christian-Anti-Defamation Commission bank account to purchase a 2007 Jeep Compass; on or about March 10, 2010, he used $14,765 in stolen funds from an Exodus Mandate bank account to a purchase a 2.02 carat diamond, round, H color, VS1 clarity; on or about August 26, 2010 Pate wire transferred $76,271.68 to a trust account for the purchase of a condominium identified as 161 Seawatch Drive, Unit 210, Myrtle Beach, Horry County, South Carolina. The wire transfer was drawn on a Christian Anti-Defamation Commission bank account. On or about October 13, 2010, Pate used $8,800 in stolen funds from the Christian Anti-Defamation Commission bank account to purchase a 2004 Lincoln Navigator; on or about January 7, 2011, Pate used $16,000 in stolen funds from a Christian anti-Defamation Commission bank account to purchase a 2007 Cadillac Escalade ESV; on or about December 22, 2011, Pate used $6,000 in stolen funds from the Exodus Mandate bank account to purchase a 2010 Cadillac SRX vehicle; on or about April 28, 2013, the defendant used $9,999.45 in stolen funds from a Christian Anti-Defamation Commission bank account to purchase a 2007 GMC Acadia sport utility vehicle; on or about July 8, 2012, the defendant used $17,250 in stolen funds from a Christian Anti-Defamation commission bank account to purchase a 2007 Jeep Wrangler sport utility vehicle; on or about July 29, 2013, Pate purchased a condominium identified as 161 Seawatch Dive, Unit 1015 Myrtle Beach, South Carolina for $241,000. The stolen funds used for this transaction included the following: from the sale of 161 Seawatch Drive for $102,889.72; $39,050.46 from a Christian Anti-Defamation Commission bank account; and $5,000 from an Exodus Mandate bank account. Further, between January 2014 through July 2014 Pate used $11,446.42 in stolen funds from an Exodus Mandate bank account to pay Sheila Morgan Interiors to redecorate his condominium. On or about May 8, 2014, Pate used $23,500 in stolen funds from the Exodus Mandate bank account to purchase a 2013 GMC Terrain sport utility vehicle; in June 2014 and July of 2014, the defendant used $9,300 in stolen funds from Exodus Mandate bank account to pay ACE Golf Carts for the purchase of a golf cart.
During this same period, Pate knowingly caused campaigns and PACS to file multiple false FEC Form 3, Report of Receipts and Disbursements, quarterly reports with the FEC that omitted the names and amounts of donor donations.
This case was prosecuted by Assistant United States Attorney Bryan Calhoun and was investigated by the Federal Bureau of Investigation (FBI).
Former Jail Contract Employee Sentenced to Federal Prison for Identity Theft and Tax Refund FraudRead the Press Release
Orlando, Florida – U.S. District Judge Roy B. Dalton, Jr. has sentenced Lori Ann Dilworth to two years and one month in federal prison for conspiracy to submit false claims to the IRS and aggravated identity theft. She also was ordered to serve two years of supervised release and to pay $52,105 in restitution to the IRS. Dilworth pleaded guilty on August 4, 2015.
According to court documents, Dilworth worked at the Orange County Jail as a contract employee in the inmate records section. She stole the personal identification information of 36 inmates from the jail and provided that information to Shantrell Sharae Stephenson and other co-conspirators to use to file false tax returns. Another conspirator, Richard Damarick Mitchell, served as an intermediary between Dilworth and Stephenson. In total, more than $100,000 in fraudulent tax returns were filed with the IRS as part of the conspiracy.
Mitchell and Stephenson were also prosecuted for their roles in this conspiracy. On October 26, 2015, Mitchell was sentenced to three years and six months in federal prison for conspiracy to submit false claims to the IRS and aggravated identity theft. On August 26, 2015, Stephenson pleaded guilty to one count of conspiracy, five counts of submitting false claims to the IRS, one count of theft of government property, and one count of aggravated identity theft. Her sentencing hearing has been set for December 14, 2015.
This case was investigated by Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Roger B. Handberg.