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Tuesday 15 September 2015
Lincoln Man Sentenced for Receiving Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Albert H. Hines, 50, of Lincoln, Nebraska, was sentenced today in Lincoln, Nebraska, to 10 years in prison by United States District Judge John M. Gerrard, for receiving child pornography. Hines will also be required to serve 10 years of supervised release once he is released from prison. Additionally, he will be required to register as a convicted sex offender.
In the summer of 2012, Nebraska law enforcement received information from an internet based media storage company that two email addresses were uploading images of child pornography. Further investigation into the email addresses provided revealed that they were registered to Albert Hines, a native of Louisiana who came to Nebraska after Hurricane Katrina. IP addresses for the dates and times in question determined that the internet was used at either Hines’ residence or at another residence in Lincoln, Nebraska, during a period of time when Hines was living there.
On May 14, 2014, a search warrant was executed at the Hines’ residence in Lincoln. Hines was interviewed and he acknowledged possession of child pornography. Hines also acknowledged that he had traded the child pornography with other individuals. During the forensic investigation of the computer equipment taken from Hines' residence, officers found approximately 400 photos of child pornography, including images involving children under the age of 12.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Lincoln Police Department.
Last Defendant Sentenced in Identity Fraud SchemeRead the Press Release
PHILADELPHIA - Brandon Jones, 34, of Reading, PA, was sentenced today to 33 months in prison for his role in an identity fraud scheme. U.S. District Court Judge Edward G. Smith also ordered five years of supervised release, a $300 special assessment, restitution of $72,554 and forfeiture in the same amount. Jones pleaded guilty on May 15, 2015 to conspiracy, wire fraud and bank fraud. Jones participated in an identity fraud scheme that involved stealing personal information, including from old court records. The ringleader, Damian Gasdaska, was sentenced in May 2015 to 144 months in prison. Jones is the last of the five defendants in the case to be sentenced. Co-conpirator Randall McMahon, of Easton, PA, was sentenced in June of 2015 to 29 months; John Cordero, of Breinigsville, PA, was sentenced in June of 2015 to 18 months; and Johnnie Rhines, of Lindenwold, NJ, was sentenced in March of 2015 to 30 months.
The defendants used stolen information to create false identities which they then used to apply for credit cards and for purchasing or renting vehicles. Gasdaska provided some of the fraudulent credit cards he acquired to his co-conspirators and kept some for himself. He also showed his co-conspirators how to commit the fraud. Gasdaska took steps to create favorable credit profiles for these false identities, and to improve the individuals’ credit profiles. These steps included: obtaining reports on the individuals, requesting the modification of information in the reports, and engaging in transactions in the names of the false identities to improve their credit profiles. The defendants applied for loans in the name of the false identities for which Gasdaska had improved their credit profiles. The defendants secured fraudulent loans exceeding $200,000 to buy cars under false pretenses. They collectively purchased or attempted to purchase at least 15 different vehicles.
Gasdaska used Post Offices boxes in the name of the false identities to receive mail for various purposes, such as in connection with credit card applications. He used computers at public libraries to further the conspiracy. After the defendants made their purchases, they often provided the purchased items to Gasdaska who then sold them and paid the co-conspirators for their illegal services. When Gasdaska and McMahon weres arrested in January 2013, Gasdaska was driving a car he had purchased through his fraud scheme that was filled with fraudulent documentation Gasdaska had generated and received during his scheme. In January of 2000, Jones was arrested while driving the car that he purchased through the scheme.
The case was investigated by United States Secret Service, the United States Postal Inspection Service, Homeland Security Investigations, and the Lehigh County Auto Theft and Insurance Fraud Task Force. It was prosecuted by Assistant United States Attorney Patrick J. Murray.
Lapwai Man Pleads Guilty to Sexually Abusing a ChildRead the Press Release
COEUR D'ALENE - Robert William McAllaster, 50, of Lapwai, Idaho, pleaded guilty today to sexual abuse of a child, U.S. Attorney Wendy J. Olson announced. McAllaster was indicted by a federal grand jury in Coeur d'Alene on March 17, 2015.
According to the plea agreement, between June 25, 2012, and September 30, 2014, on the Nez Perce Indian Reservation, McAllaster sexually abused a child who was over the age of twelve, by causing contact between his penis and the child.
The charge is punishable by up to fifteen years in prison, up to lifetime supervised release following any prison sentence, and a maximum fine of $250,000.00.
Sentencing is set for December 15, 2015, before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated by the Federal Bureau of Investigation, Nez Perce Tribal Police Department, and the Nez Perce County Sheriff’s Office.
Laguna Pueblo Man Sentenced to Federal Prison for Assaulting Acoma Pueblo WomanRead the Press Release
ALBUQUERQUE – Bradford Day, 41, an enrolled member of the Laguna Pueblo who resides in Laguna, N.M., was sentenced today in federal court in Santa Fe, N.M., to 18 months in federal prison for his assault conviction. Day will be on supervised release for three years after completing his prison sentence.
Day was arrested on May 6, 2014, on a criminal complaint charging him assault with a deadly weapon and assault resulting in serious bodily injury. According to the complaint, Day assaulted an Acoma Pueblo woman on April 26, 2014, in a location within Acoma Pueblo in Cibola County, N.M. The complaint alleged that in the early morning hours of April 26, 2014, Day assaulted the victim by throwing a pint bottle of beer at the victim’s face, which struck the victim’s face causing her to suffer bruises, cuts and the loss of three teeth.
Day pled guilty on Dec. 31, 2014, to a felony information charging him with assault resulting in serious bodily injury. In entering his guilty plea, Day admitted assaulting the victim on April 26, 2014, by throwing an unopened bottle of beer at the victim and knocking out three of the victim’s teeth.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Tribal Police Department. Assistant U.S. Attorney David Adams prosecuted this case. The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Lafayette man sentenced to 54 months in prison for possessing 8 stolen firearms in homeRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Lafayette man was sentenced to 54 months in prison for possessing eight stolen firearms.
Rico D. King, 39, of Lafayette, was sentenced by U.S. District Judge Richard T. Haik on one count of possession of stolen firearms. He was also sentenced to three years of supervised release. According to evidence presented at the May 7, 2015 guilty plea, during an investigation into Lafayette burglaries and after developing leads as to the location of the stolen firearms, agents executed a search warrant in September of 2014 at a residence in Lafayette where King was an occupant. During the search, agents found King in possession of the stolen firearms including a .26-06 caliber rifle, two .25-06 caliber rifles, a .410 gauge shotgun, two .12 gauge shotguns, a .22 caliber semi-automatic rifle and a .270 caliber rifle. Victims of the burglaries reported all eight firearms as stolen.
Multiple agencies including the ATF, FBI, Lafayette Parish Sheriff’s Office and Lafayette Metro Narcotics Task Force conducted the investigation. Assistant U.S. Attorney Robert C. Abendroth prosecuted the case as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide program designed to reduce violence by aggressively enforcing existing federal firearms laws.
Kentucky Man Pleads Guilty to Eleven Robberies in Georgia and FloridaRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Chad Michael Merida (23, Heidrick, Kentucky) today pleaded guilty to interference with commerce by robbery. He faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to court documents, between November 15, 2014, and November 24, 2014, Merida robbed two commercial businesses in Georgia and eight commercial businesses and one bank in Florida. After the final robbery, a PNC Bank on Westshore Boulevard in Tampa, Merida was tracked to his home at the Element Luxury Apartments in downtown Tampa. He ultimately confessed to committing all 11 robberies.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Carlton C. Gammons.
Jefferson City Bank Officer Pleads Guilty to Stealing $410,000Read the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., woman pleaded guilty in federal court today to embezzling $410,000 from the bank where she was employed.
Katherine Nicholle Brown, 29, of Jefferson City, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the misappropriation of funds by a bank officer.
Brown was previously employed as the lead teller at Hawthorn Bank in Jefferson City. By pleading guilty today, Brown admitted that she embezzled $410,000 from December 2012 to Sept. 19, 2014, by taking money from the bank vault for her personal use.
Brown admitted that she began taking money from the vault when her husband had shoulder surgery in 2012 and could not work. She took the money in small amounts, and would place it in her pockets. Brown then plugged in certain amounts in the vault book to cause the vault book total to match the vault balance in the bank’s computer accounting system. Brown also admitted that, when the bank underwent an internal audit in December 2012, she made false entries into the computer system to conceal the fact that the vault did not match the computer system.
On Sept. 19, 2014, just prior to taking maternity leave, Brown prepared and shipped five bags of cash of varying denominations to the Federal Reserve Bank. She prepared and labeled the bags, which were bar-coded and tamper proof. She reported that the total amount of cash shipped to the Federal Reserve Board was $844,000; however, when the Federal Reserve Board received and counted the money, they found it to be only $434,000.
The Federal Reserve Board reported the shortage to the bank, which conducted an audit of the vault. The audit revealed that certain entries made in the vault book reflecting cash amounts sent to Columbia, Mo., and California, Mo., bank branches were $200,000 higher than the branches had actually ordered. As a result, the vault did not contain as much cash as had been reported on the bank’s computer accounting system. Auditors concluded that Brown had to report to the Federal Reserve Board that $844,000 had been shipped so that it would balance to the bank’s accounting system.
Under federal statutes, Brown is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI.
Jamestown Woman Sentenced to 15 Months in Prison on Charge of Making False Bank EntriesRead the Press Release
Debora Huff, 55, of Jamestown, Tennessee, was sentenced yesterday by Chief U.S. District Judge Kevin H. Sharp, to serve 15 months in prison, followed by five years of supervised release, for making false entries in a bank record, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Chief Judge Sharp also ordered Huff to pay restitution to First Volunteer Bank in the amount of $578,000.
Huff was initially charged in March 2015 and pleaded guilty to the charge on June 1, 2015.
During the plea hearing, Huff admitted to having embezzled $578,000 from her employer, First Volunteer Bank, beginning in approximately 2000, when Huff was elevated to Head Teller and Vault Teller for the bank. Huff admitted that she embezzled money at least twice each month, beginning in 2000 and continuing until November 20, 2014, when First Volunteer Bank conducted an unannounced cash audit that uncovered her embezzlement. Huff also admitted that during the unannounced audit, she entered into the bank’s computer system and created two cash out tickets in the amount of $289,000 each. After the cash count was over, Huff went back into the system and prepared two cash-in tickets, each in the amount of $289,000, in an effort to conceal the fact that she had been embezzling money from First Volunteer Bank for approximately fourteen years.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Sandra G. Moses represented the government.
In a Settlement with the United States, Puerto Rico Aqueduct and Sewer Authority Agrees to Upgrade Water InfrastructureRead the Press Release
Under a settlement with the Department of Justice and the Environmental Protection Agency (EPA), the Puerto Rico Aqueduct and Sewer Authority (PRASA) has agreed to make major upgrades, improve inspections and cleaning of existing facilities within the Puerto Nuevo system and continue improvements to its systems island-wide. The Puerto Nuevo sewer system serves the municipalities of San Juan, Trujillo Alto, and portions of Bayamón, Guaynabo and Carolina. The settlement updates and expands upon legal settlement agreements reached with PRASA in 2004, 2006 and 2010. The improvements will supplement projects already being implemented under the previous settlements and PRASA’s Capital Improvement Program, which includes construction of necessary infrastructure at wastewater treatment plants and sludge treatment systems, as well as the Puerto Nuevo collection system. Under this agreement, PRASA will prioritize island-wide capital improvement projects and take into consideration the effect of each requirement on population served. In recognition of the financial conditions in Puerto Rico, the U.S. government waived the payment of civil penalties associated with violations alleged in the complaint filed today.
“These upgrades are urgently needed to reduce the public’s exposure to serious health risks posed by untreated sewage,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “The United States has taken Puerto Rico’s financial hardship into account by prioritizing the most critical projects first, and allowing a phased in approach in other areas, but let me be clear that these requirements are necessary for the long-term health and safety of San Juan area residents.”
“This agreement will reduce the massive amount of untreated sewage and other pollutants that harm major waterways in the San Juan area, improving water quality and public health conditions for thousands of people,” said Regional Administrator Judith A. Enck for EPA.
PRASA’s violations include releases of untreated sewage and other pollutants into waterways in the San Juan area including the San Juan Bay, Condado Lagoon, Martín Peña Canal and the Atlantic Ocean. These releases have been in violation of PRASA’s National Pollutant Discharge Elimination System (NPDES) permits and the Clean Water Act. PRASA also violated its NPDES permit by failing to report discharges in the Puerto Nuevo collection system and by failing to meet effluent limitations and operations and maintenance obligations at numerous facilities island-wide.
Under the agreement, PRASA will spend approximately $1.5 billion to make necessary improvements. PRASA will undertake a comprehensive operation and maintenance program in the Puerto Nuevo sanitary sewer system, including conducting a comprehensive analysis of the system to determine whether subsequent investments must be made to ensure the system is brought into legal compliance and to conduct immediate repairs at specific areas of concern.
PRASA has also agreed to invest $120 million to construct sanitary sewers that will serve communities surrounding the Martín Peña Canal, a project that will benefit approximately 20,000 people. For decades, the Martín Peña communities have struggled with poverty and environmental degradation. This project, which will begin after other infrastructure improvements near the canal are completed, will greatly reduce the amount of untreated sewage and other contaminants entering the canal.
The terms and conditions of the settlement announced today will update, replace and supersede the three existing consent decrees between the United States and PRASA. In recognition of PRASA’s financial challenges, many of the provisions of the agreement have been tailored to focus on the most critical problems first, giving more time to address the less critical problems over time. Additionally, certain projects required under the 2006 and 2010 agreements were found to no longer be necessary, as the population has declined and they have been eliminated under this agreement.
The settlement, lodged today in the U.S. District Court of Puerto Rico, is subject to a 30-day public comment period and approval by the federal court. The settlement will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html
Hopi Tribe Receives Nearly $180,000 in Federal Grant Funds to Support Sex Offender Registration and Notification EffortsRead the Press Release
PHOENIX – Today, U.S. Attorney John S. Leonardo announced that $175,270 in additional grant funds have been made available to the Hopi Tribe to support, maintain, and refine jurisdiction-wide programs and functions under the Sex Offender Registration and Notification Act (“SORNA”). These funds will assist in improving victim notification services, providing educational services, and increasing service capacity. The grant funds were awarded by the Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (“SMART”) Office, which is a component of the Department of Justice’s Office of Justice Programs (“OJP”).
Information about OJP and its programs can be found at: http://www.ojp.usdoj.gov.
RELEASE NUMBER: 2015-073_HOPI TRIBE GRANT (2015-AW-BX-0013)
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Hayward Man Sentenced to over Ten Years Imprisonment for Receipt of Child Pornography and Travel with the Intent to Engage in Illicit Sexual ConductRead the Press Release
SAN FRANCISCO – Craig Patrick Burt was sentenced yesterday to 127 months’ imprisonment for receipt of child pornography and travel with the intent to engage in illicit sexual conduct, announced Acting United States Attorney Brian J. Stretch and FBI Special Agent in Charge David J. Johnson.
In 2007, Burt, 60, of Hayward, helped to create the Children’s Grace learning center, a charity for impoverished children living in the Philippines. On June 15, 2015, Burt pleaded guilty to receiving child pornography and travelling with the intent to engage in illicit sexual conduct. As part of his plea agreement, Burt admitted that starting in July 2013 he received through his email accounts images of girls ages 10-15 years old who were engaged in sexually explicit conduct. Burt asked for and received these images from an individual in the Philippines and he sent money and gifts to the young girls. Burt further admitted that in January of 2015, he flew to the Philippines where he intended to engage in sexual contact with girls between 10 and 15 years of age. He described in great detail in internet chat messages what specific sexual acts he wanted to perform with the young girls. On February 15, 2015, Burt was arrested at San Francisco International Airport, when he was attempting to reenter the United States.
Burt was indicted on March 3, 2015. He was charged in four counts of conspiracy to engage in sex trafficking, in violation of 18 U.S.C. § 1594(c); sex trafficking, in violation of 18 U.S.C. §§ 1591(a)(1) and (b)(1); receipt or distribution of child pornography, in violation of 18 U.S.C. § 2252(a)(2); and travel with the intent to engage in illicit sexual conduct, in violation of 18 U.S.C. § 2423(b). Under the plea agreement, Burt pleaded guilty to violating 18 U.S.C. §§ 2252(a)(2) and 2423(b).
The sentence was handed down by the Honorable Thelton E. Henderson, Senior U.S. District Judge. Judge Henderson also imposed a five year period of supervised release.
Assistant U.S. Attorney Sheila A.G. Armbrust is prosecuting the case with the assistance of Patricia Mahoney. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Gang Associate Pleads Guilty to Drug Trafficking and Firearms ChargesRead the Press Release
PROVIDENCE, R.I. – Antonio Fortes, 25, of Cranston, an associate of the YNIC street gang, pleaded guilty in federal court in Providence today to trafficking heroin and cocaine, and to being a felon in possession of a firearm, announced United States Attorney Peter F. Neronha and Daniel J. Kumor, Special Agent in Charge of the Boston Field Division of ATF.
Fortes, who is scheduled to be sentenced on December 3, 2015, is also facing murder and weapons charges in Rhode Island state court for his alleged role in the October 22, 2014, shooting in Providence that resulted in the death of Terry Robinson. Fortes is charged in state court with one count of murder, three counts of discharge of a firearm while in the commission of a crime of violence, two counts of assault with a dangerous weapon, two counts of carrying a firearm without a license, and one count of conspiracy.
According to federal court documents and information presented to the court, an investigation by ATF agents into Fortes drug trafficking activities included controlled purchases of crack cocaine and repeated surveillance by law enforcement. The investigation culminated with the execution of a court authorized federal search warrant on March 24, 2015, at Fortes’ Cranston residence. The search resulted in the seizure of numerous packets of heroin, crack cocaine and a loaded .45 caliber handgun.
The case is being prosecuted by Assistant U.S. Attorneys Milind M. Shah and William J. Ferland.
Law enforcement officers from the Cranston, Pawtucket and Providence Police Departments assisted agents from ATF in the investigation of this matter.
Fredericksburg Man Guilty of Trafficking over $13 Million in CigarettesRead the Press Release
RICHMOND, Va. – Steven (Yinhau) Chen, 33, of Fredericksburg, pleaded guilty today to conspiring to commit money laundering to promote his cigarette trafficking operation.
In a statement of facts filed with the plea agreement, between March 2014 and June 2015, Chen, the owner of several Fredericksburg-area small businesses, purchased at least $13.8 million in cigarettes from area wholesale stores for the express purpose of re-selling those same cigarettes to individuals trafficking the cigarettes for eventual re-sale in, among other northern destinations, Pennsylvania and New Jersey. Chen would subsequently launder the cash proceeds of these cigarettes sales through at least 20 different bank accounts that Chen and others maintained with at least 10 different banks. Chen maintained these bank accounts in the names of both his legitimate businesses and another business entity that existed only to receive and subsequently transfer the cash proceeds of Chen’s cigarette trafficking conspiracy. During the 15 months at issue, at least $12.18 million of cigarette trafficking proceeds flowed into and through Chen’s bank accounts before being repurposed to pay off the credit card bills Chen incurred purchasing bulk cigarettes. The vast majority of Chen’s deposits were made in amounts just under the $10,000 Cash Transaction Report threshold established by Congress. As part of the plea agreement, Chen agreed to forfeit $1.21 million as proceeds of the offense.
Chen was charged by superseding criminal information on Sept. 15, 2015. Chin faces a maximum penalty of five years in prison when sentenced on Dec. 18, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson. The case was investigated by officers of the Washington – Baltimore HIDTA task force’s Northern Virginia Financial Initiative. Assistant U.S. Attorney Thomas Garnett is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15cr153.
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Former Union Treasurer Sentenced to 18 Months for Embezzling Union FundsRead the Press Release
PHOENIX – On Sept. 14, 2015, Richard Wayne Johnson, 49, of Surprise, Ariz., was sentenced by U.S. District Judge David Campbell to 18 months of imprisonment, followed by three years of supervised release, for embezzling nearly $275,000 from a local union for which he served as treasurer. In June, Johnson pleaded guilty to embezzlement, forgery, and false reporting charges stemming from the embezzlement and its attempted concealment.
“The United States Attorney Office will vigorously prosecute those who abuse positions of trust within unions to steal from its members,” said United States Attorney John S. Leonardo. “Johnson’s actions were harmful to the hard-working members of the union and to this community, and they are deserving of a prison sentence.”
Richard Johnson, formerly a bus driver, served as the financial secretary and treasurer for the Amalgamated Transit Union Local 1433 for seven years, ending in January of 2012. The union consists of bus and light rail operators, mechanics, and service workers in Arizona; and the union is funded by dues collected from its members. For several years, Johnson embezzled funds from the union for his personal use. He pleaded guilty to using the union debit card for an abundance of personal purchases, such as a home theater system, and for cash withdrawals. He also admitted to forging union checks written to himself or to family members. To conceal the embezzlement, Johnson doctored the union’s financial records and then provided those false records to the U.S. Office of Labor-Management Standards in periodic reports. As part of his sentence, Johnson was also ordered to pay restitution of $273,489 – the amount of the embezzled funds.
The investigation in this case was conducted by the U.S. Department of Labor Office of Labor-Management Standards and the IRS-Criminal Investigation. The prosecution was handled by Monica Klapper, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-00653-PHX-DGC
RELEASE NUMBER: 2015-075_Johnson
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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Former Tribal Chairman Sentenced to ProbationRead the Press Release
Amen Sheridan, 54, of Walthill, Nebraska, was sentenced in federal court in Omaha, Nebraska, for the felony offense of being an accessory to theft from an Indian Tribal Organization. The Honorable Laurie Smith Camp, Chief United States District Court Judge, sentenced Sheridan to a two-year term of probation and a $100 fine.
Sheridan was the Chairman of the Omaha Tribe of Nebraska. During his tenure, the Omaha Tribe offered payment assistance grants to financially eligible first-time home buyers. Sheridan was neither a first-time home buyer or financially eligible for the payment assistance. The payment assistance program was administered by Sheridan’s significant other Julia Whiteskunk.
Whiteskunk and Sheridan purchased a home in Walthill, Nebraska. Whiteskunk prepared a false application for payment assistance to the Omaha Tribal Housing Authority. Both signed the document. The document was approved by a subordinate rather than being submitted to a committee. The Housing Authority provided $4,000 in payment assistance. Sheridan has made restitution in the sum of $4,000.
The case was investigated by the United States Department of Housing and Urban Development and the Federal Bureau of Investigation. United States Attorney Deborah R. Gilg observed that in this prosecution, it was not the amount of the loss deserving federal attention and a felony conviction, but the abuse of authority and trust by a Tribal Chairman at the expense of those who elected him.
Former Richmond County Coroner Sentenced to Three Years in Prison for Credit Card FraudRead the Press Release
Augusta, GA: Grover F. Tuten, Jr., 72, the former Coroner for Richmond County, Georgia, was sentenced today to 36 months in prison by United States District Court Judge J. Randal Hall after pleading guilty to his repeated use of a deceased person’s debit card without authorization.
According to evidence presented at the guilty plea and sentencing hearings, the victim passed away on August 24, 2012. Afterwards, and while he was the Richmond County Coroner, Tuten obtained the victim’s bank card from the victim’s caretaker. Tuten proceeded to unlawfully make 33 ATM withdrawals in the Augusta area. Many of these withdrawals were captured on bank surveillance video. Tuten unlawfully received $9,800 in cash as a result of his theft.
United States Attorney Edward Tarver stated, “The crimes admitted here are troubling. Our elected officials are sworn to serve the community, not themselves. This activity erodes the public’s trust in its government and their elected officials. This United States Attorney’s Office will continue to work with our local, state and federal law enforcement partners to uncover public corruption and to prosecute public officials who have violated the public’s trust.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing in federal court holds former Richmond County Coroner Tuten accountable for his greed-driven criminal conduct. This conduct was made all the more reprehensible in that the victim was a deceased person under the charge of his office. The FBI will continue to provide significant investigative resources toward identifying and presenting for prosecution those officials engaged in public corruption.”
Tuten still faces state charges of theft by taking and violation of oath by a public officer and is being prosecuted by District Attorney Ashley Wright of the Augusta Judicial Circuit.
Tuten’s state and federal cases were investigated by Special Agent Charles E. McKee of the FBI. Assistant United States Attorney Lamont A. Belk prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Former Police Department Employee Indicted for Tax Fraud, Computer Intrusion, and Identity TheftRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Tonia Bright with one count of conspiracy to commit wire fraud, four counts of obtaining information from a protected computer, and four counts of aggravated identity theft related to her involvement in a stolen identity refund fraud (SIRF) scheme. If convicted, she faces a maximum penalty of 20 years in federal prison on the conspiracy charge, 5 years in federal prison on each of the computer intrusion offenses, and a 2-year term of imprisonment for each aggravated identity theft count that would be served consecutively to the sentence imposed on the other counts. The indictment also notifies Bright that the United States intends to seek a forfeiture money judgment equal to the proceeds of the offenses.
According to the indictment, Bright was a civilian employee of the Tampa Police Department (TPD) working as a community service officer in the District 3 station. As part of her duties, Bright took reports from citizens related to incidents not requiring the response of a sworn police officer. In this capacity, she had access to local, state, and federal law enforcement databases, including the National Crime Information Center (NCIC) computerized index. Her use of these databases was restricted to the performance of her authorized duties.
As part of the conspiracy, Bright allegedly accessed the personally identifiable information (PII) of individuals using a variety of sources, including NCIC, despite having no legitimate law enforcement purpose for doing so. She then provided the stolen PII to others, including Tampa resident Rita Girven, knowing that the information would be used to commit crimes. Girven and others used the stolen PII to electronically file, and cause others to file, fraudulent federal income tax returns claiming tax refunds that they were not entitled to. The fraudulently obtained tax refunds were deposited onto reloadable debit cards, issued in the conspirators’ names and the names of others, including the identity theft victims’ names. Girven and others then used the debit cards at retail establishments and ATMs to withdraw the funds and shared in the proceeds.
Girven previously pleaded guilty to conspiracy to commit wire fraud and aggravated identity theft. Her sentencing hearing is scheduled for November 20, 2015.
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.
This case was investigated by the Internal Revenue Service – Criminal Investigation Division, the Tampa Police Department, and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Mandy Riedel.
Former New Haven Resident Pleads Guilty to Armed Bank RobberyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that DANIEL HAMLETT, SR., 53, formerly of New Haven, pleaded guilty yesterday before U.S. District Judge Alvin W. Thompson in Hartford to committing an armed robbery of a Seymour bank in 2013.
On April 9, 2013, HAMLETT drove a stolen vehicle to the Webster Bank on New Haven Road in Seymour. Wearing a mask, he exited the vehicle, approached an individual who was seated in his parked car, took out a handgun, smashed the driver’s side front window and demanded money from the victim. When the victim responded that he didn’t have any money, HAMLETT took the victim’s car keys and cell phone and told him not to move.
HAMLETT then entered the bank, ordered everyone to get on the floor, jumped over the teller counter and forcibly took $5,594 in cash from two teller drawers. He then jumped back over the teller counter, exited the bank and fled in the stolen vehicle. HAMLETT then met his son, Daniel Hamlett, Jr., who picked up his father and eluded law enforcement.
HAMLETT was arrested in Georgia on November 13, 2014, and has been detained since his arrest. Judge Thompson scheduled sentencing for December 7, 2015, at which time HAMLETT faces a maximum term of imprisonment of 25 years.
Daniel Hamlett Jr. was arrested on March 14, 2014. On October 31, 2014, he pleaded guilty to one count of aiding and abetting bank robbery. He awaits sentencing.
This matter was investigated by the FBI and the Seymour Police Department. The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Sarala V. Nagala.
Former Maintenance Director of Bristol Township School District Charged with Conspiracy and FraudRead the Press Release
FORMER MAINTENANCE DIRECTOR OF BRISTOL TOWNSHIP SCHOOL DISTRICT CHARGED WITH CONSPIRACY AND FRAUD
PHILADELPHIA - James N. Anders, Jr, 59, Willow Grove, PA, Patrick Squires, 58, of Voorhees, NJ, and Ernest Neff, 58, of Newtown, PA, were charged today by indictment with one count of conspiracy and five counts of wire fraud in connection with a scheme to defraud the Bristol Township School District (“BTSD”), announced United States Attorney Zane David Memeger. Anders is the former maintenance director at the school district.
The indictment charges that from September 2006 to September 2011, the defendants abused Anders’ position as maintenance director to enrich themselves and to advance their personal business interests, causing a loss to BTSD of approximately $373,453.43. It is alleged that on a dozen transactions between September 2006 and July 1, 2010, Anders, Squires and Neff manipulated the required “quote” process to ensure that a company controlled by defendant Squires would be selected for the transaction. It is also alleged that defendants Anders and Squires split BTSD maintenance department purchases into smaller transactions which could be purchased on the sole authority of defendant Anders, where he could direct those purchases to companies controlled by Squires. It is further alleged that Anders engaged in prohibited self-dealing by using his personal company for BTSD business and disguised the work by billing the work through a Squires-controlled company.
If convicted of all charges, the defendants each face a maximum possible statutory sentence of 105 years in prison, with an advisory guidelines range of 46-57 months, three years supervised release, a $1.5 million fine, a $600 special assessment, restitution of approximately $373,453.43 and forfeiture.
The case was investigated by the Federal Bureau of Investigation and the United States Department of Education Office of Inspector General. It is being prosecuted by Assistant United States Attorney Joan E. Burnes.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Georgia National Guard Employee and Two Vendors Sentenced in Corruption SchemeRead the Press Release
ATLANTA - Raytosha Elliott, a former contracting official with the Georgia National Guard, and the owners of two vendor companies have been sentenced to federal prison for a corruption scheme wherein Elliott awarded contracts to the vendors in exchange for illegal kickbacks.
“Elliott took advantage of her position with the Georgia National Guard, and awarded no-bid contracts to her friends in exchange for illegal kickbacks,” said U.S. Attorney John Horn. “She and two of her friends stole over $150,000 in funds that were intended to maintain defense facilities and instead spent the money on themselves.”
“The sentencing of these individuals to federal prison will not only hold them accountable for their greed based criminal conduct, but will also send a clear message to others that might consider a similar scheme. The FBI will continue to work with its various law enforcement partners to ensure that those individuals engaged in these types of activities are identified, investigated and presented for federal prosecution,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“Corruption at any level diminishes the hard work and dedication of the thousands of government employees who are dedicated to providing honest services to the American public,” stated Veronica F. Hyman-Pillot, Acting Special Agent in Charge. “IRS Criminal Investigation stands committed to weed out individuals who misuse their job as a path to financial success by using greed and corruption.”
“This is a prime example of our determination, along with our fellow law enforcement agencies, to investigate allegations of criminal activity and corruption involving the National Guard and other DOD entities,” said Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “Regardless of the 'scope and size' of the allegations, our CID Special Agents are committed to working side-by-side with other agencies to help eradicate this type of activity.”
“The Defense Criminal Investigative Service is committed to protecting the integrity of the DOD contracting process, including the GA National Guard,” said John F. Khin, Special Agent in Charge, Southeast Field Office, Defense Criminal Investigative Service. “This sentencing sends a message to individuals who fail to follow the rules that along with our other law enforcement partners, violators will be brought to justice.”
“Accountability of violators is paramount when dealing with public corruption. GBI’s partnership with the FBI in the Public Corruption Task Force is essential for continued public trust in Georgia. When those who violate the law and violate public trust are held accountable, and go to jail – if this occurs, it sends a clear message that public corruption is not acceptable in this state,” said Vernon Keenan, Director, Georgia Bureau of Investigation.
“We hope these sentences serve as a deterrent to those who desire to pilfer the state and federal governments' coffers. We also believe this case exemplifies how multiple agencies can work together to achieve a common goal: to serve the public who depends on us to defend the integrity of government programs. As in this case, our office will remain dedicated to protecting taxpayers' money by continuously pursuing fraud, waste, abuse and corruption within the executive branch of state government,” said Deb Wallace, State Inspector General, Georgia Office of the Inspector General.
According to U.S. Attorney Horn, the charges and other information presented in court: From May 2007 through April 2012, Elliott worked for the Georgia Department of Defense, the state agency charged with coordinating and supervising all agencies and functions of the Georgia National Guard. Elliott worked as an Engineering Operations Manager at the Clay National Guard Center, located at Dobbins Air Reserve Base, in Marietta, Georgia.
In that position, Elliott worked with engineering firms to develop bid-ready construction projects, prepared bid documents, and oversaw no-bid purchase orders. Under the rules governing the contracting process that Elliott oversaw, projects that cost less than $5,000 did not need to go through a competitive bidding process, allowing Elliott to award the contracts. She certified that the work had been completed for those projects, and facilitated payment to the vendors who allegedly completed such projects.
Elliott awarded numerous contracts under $5,000 to vendor companies created by her friends and associates, including co-defendants Lakeysha Ellis and Angela Thicklin (f/k/a Angela Stanback Kinlaw). In return, Ellis and Thicklin paid Elliott kickbacks, equal to 50% of the value of the contracts, for steering contracts to Ellis’ vendor company, Total Source Solution, LLC, and to Thicklin’s vendor company, 3M Construction LLC.
Elliott awarded Total Source Solution 17 contracts with a total value of approximately $75,000. Elliott awarded 3M Construction 18 contracts with a total value of approximately $78,000. The contracts were for a variety of services supposedly to be performed by the two companies, including electrical work, landscaping, and HVAC work. But the work was never done. Instead, the defendants split the money awarded under the contracts and spent it on personal items, including travel, meals, and merchandise. As part of the scheme, Elliott owned a company named Tech Group Investments, LLC. Ellis and Thicklin took money they received from the Georgia National Guard contracts, and paid kickbacks to Elliott through that company. Elliott falsely certified that the work had been completed to facilitate payment by the Georgia National Guard.
Elliott and Ellis engaged in a similar fraud scheme from January 2009, through May 2011, when Ellis was an accountant at Baumueller-Nuermont Corporation, an industrial equipment company with offices in Atlanta. Her job responsibilities included payroll and paying vendors.
While employed as Baumueller-Nuermont’s accountant, Ellis fraudulently funneled money to the defendants’ two sham companies, Total Source Solution and Tech Group Investments. Ellis wrote corporate checks to Total Source Solution, signed her name on the checks, and forged the signature of the Vice President on the checks, to ensure that the checks could be negotiated. Ellis recorded these payments in the check registry to reflect falsely that the checks had been issued to true vendors (such as American Express) when in fact they went to Ellis’ company.
As part of the scheme, Ellis also falsified employee records in the corporation’s payroll system to disguise payments to the defendants’ two companies. Ellis created phantom employees by altering the names of real employees (by switching their first and last names) and slightly changing their Social Security numbers. She then caused the payroll system to make fraudulent salary payments to Total Source Solution and Tech Group Investments for these new, non-existent employees.
Baumueller-Nuermont lost about $85,000 from this scheme.
Raytosha Elliott, 35, of Atlanta, Georgia, was sentenced yesterday to two years, ten months in prison and three years of supervised release, and ordered to pay $115,902 in restitution to the Georgia National Guard and $26,500 in restitution to Baumueller-Nuermont Corporation by U.S. District Judge Amy Totenberg. Elliott was also ordered to pay $20,000 in restitution to WebBank based on a fraudulent loan application she submitted to the bank in September 2013. In that application, Elliott falsely inflated Tech Group Investments’ sales and gross receipts, and provided a fraudulent federal tax return in support of those figures, to obtain the loan. She was also ordered to perform 60 hours community service.
Lakeysha Ellis, 37, of Decatur, Georgia, was sentenced to nine months in prison and three years of supervised release, and three months of home confinement. She was also ordered to pay $74,902 in restitution to the Georgia National Guard and $81,487.88 in restitution to Baumueller-Nuermont Corporation. Both defendants previously pleaded guilty to two counts of conspiracy.
Today, Angela Thicklin, 45, of Atlanta, Georgia, was sentenced to one year, nine months in prison and three years of supervised release including ordered to pay $78,640 in restitution to the Georgia National Guard by Judge Totenberg. Thicklin previously pleaded guilty to one count of conspiracy.
This case was investigated by the Federal Bureau of Investigation; the Georgia Bureau of Investigation; the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; Internal Revenue Service Criminal Investigation; the U.S. Army Criminal Investigation Command; and Deputy Inspectors General of the State of Georgia Office of the Inspector General.
Assistant U.S. Attorney Stephen H. McClain prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao/gan/.
Former Carter County Paramedic Sentenced to 18 Months for Tampering with FentanylRead the Press Release
COVINGTON, Ky. — A former paramedic, with the Carter County Emergency Medical Service (EMS), has been sentenced to 18 months in federal prison, for tampering with a consumer product.
On Monday, U.S. District Judge David L. Bunning sentenced 35 year-old Amanda Sturgill Jones and also ordered that she serve three years of supervised release following her prison term.
Jones admitted that on multiple occasions, between 2012 and June 2013, she stole fentanyl from the EMS storage center for her own personal use. To conceal her theft from the EMS and law enforcement, she replaced the empty vials of fentanyl with saline and then glued the caps back on the vials. Fentanyl is used to treat patients in severe pain.
Jones pleaded guilty in May of this year.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Antoinette V. Henry, Special Agent in Charge, U.S. Food and Drug Administration; and Rodney Brewer, Commissioner of the Kentucky State Police, jointly made the announcement.
The investigation was conducted by the U.S. Food and Drug Administration, Office of Criminal Investigations, the Kentucky State Police, and the Kentucky Board of Emergency Medical Services. Assistant U.S. Attorney Robert McBride prosecuted this case on behalf of the federal government.
Former COO Sentenced to Prison for Selling Confidential InformationRead the Press Release
BOSTON – A Connecticut executive was sentenced today in U.S. District Court in Boston on charges that he sold confidential business information regarding the wireless industry to an analyst at a Boston-based financial services firm.
James Dunham, 60, of Glastonbury, Conn., was sentenced by U.S. District Court Judge Douglas P. Woodlock to five months in prison and five months of home confinement, three years of supervised release, a fine of $15,000, and forfeiture of $61,000. In June 2015, Dunham pleaded guilty to wire fraud after being arrested and charged in February.
Dunham, formerly the Chief Operating Officer of a retailer for a major provider of wireless services, had access to confidential information regarding sales, compensation, and product launches at the retailer’s 400 locations. For more than two years, and unbeknownst to his employer, Dunham had a secret consulting agreement with a financial services firm to provide confidential information in return for which he was paid $2,000 per month.
The charging document to which Dunham pleaded guilty identifies seven research notes prepared and distributed by the financial services firm that include information supplied by Dunham, including information regarding the status of certain product launches, the number of new subscribers to a specific wireless provider, and sales and return information for specific smartphones. In particular, Dunham was the source for an April 11, 2013, research note in which the firm reported that sales for a specific smartphone were running below customers’ returns of the same smartphone.
United States Attorney Carmen M. Ortiz and Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The United States Attorney’s Office also received valuable assistance from the Securities and Exchange Commission. The case was prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit.
Former CEO of Local University Sentenced to 12 Months Imprisonment for Submitting False Documents to Department of Homeland SecurityRead the Press Release
SAN JOSE- Jerry Wang, the Chief Executive Officer of Herguan University in Sunnyvale, California, was sentenced yesterday to 12 months’ imprisonment for submitting false documents to the Department of Homeland Security (DHS), announced Acting United States Attorney Brian Stretch and Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Ryan L. Spradlin.
On July 24, 2012, Jerry Wang, 34, of Santa Clara, was indicted on fifteen charges arising out of a visa fraud scheme in connection with Herguan University. The superseding indictment filed October 30, 2014, alleges that, starting in July 2007, Wang and others caused Herguan to submit fraudulent documents to DHS’s Student and Visitor Exchange Program (SEVP) in support of a petition to admit foreign students. Wang was charged with conspiracy to commit visa fraud, in violation of 18 U.S.C. § 371; aiding and abetting visa fraud, in violation of 18 U.S.C. §§ 1546; aiding and abetting unauthorized access of a government computer, in violation of 18 U.S.C. § 1030(a); use of false documents, in violation of 18 U.S.C. § 1001(a)(3); and aggravated identity theft, in violation of 18 U.S.C. § 1028A.
“Jerry Wang has admitted submitting over one hundred fraudulent documents to the government in an effort to circumvent the rules applying to international students,” said Acting U.S. Attorney Brian J. Stretch. “In doing so, he has imperiled the programs that allow international students to visit the United States in order to engage in valuable educational exchanges.”
“International students represent an invaluable asset to our nation. We’re committed to working with our government partners and with educators to enable legitimate students to pursue their studies here,” said Ryan L. Spradlin, Special Agent in Charge of HSI San Francisco. “However, HSI will aggressively target those who commit student visa fraud out of greed and self-interest. Their actions undermine the integrity of this country’s immigration laws and it will not be tolerated.”
Wang pleaded guilty on April 9, 2015, to one false document count, specifically submitting a fraudulent Academic Warning Letter to DHS, in violation of 18 U.S.C. § 1001(a)(3). As part of his plea, he also admitted participating in the scheme to commit visa fraud, involving more than one hundred immigration-related documents known as “Forms I-20,” as well as aiding and abetting the unauthorized access of a DHS computer database.
The Honorable Edward J. Davila, U.S. District Judge, sentenced Wang on September 14, 2015. The sentence included the criminal forfeiture of $700,000 and three years of supervised release. Wang has been ordered to self-surrender and begin serving his prison term by November 3, 2015.
Assistant U.S. Attorneys Hartley M. K. West and Maia T. Perez are prosecuting the case with the assistance of Helen Yee, Natachiana Williams, Rosario Calderon, and Trina Khadoo. This prosecution is the result of an investigation by Document and Benefit Fraud Task Force (DBFTF) overseen by HSI. The DBFTF is a multi-agency task force that coordinates investigations related to fraud schemes involving immigration documents and benefits.
Florida Hospital District Agrees to Pay United States $69.5 Million to Settle False Claims Act AllegationsRead the Press Release
North Broward Hospital District, a special taxing district of the state of Florida that operates hospitals and other health care facilities in the Broward County, Florida, area, has agreed to pay the United States $69.5 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.
“The Department of Justice has long-standing concerns about improper financial relationships between health care providers and their referral sources, because those relationships can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”
“Our citizens deserve medical treatment uncorrupted by excessive salaries paid to physicians as a reward for the referral of business rather than the provision of the highest quality healthcare,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “This office will be steadfast in continuing to devote all necessary resources to ensure that anyone rendering medical care does so for the sole benefit of the patient and in compliance with the law.”
“Improper financial rewards given to physicians in exchange for patient referrals corrupts medical decision making and inflates health care costs,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “Our agency will continue to root out such behavior from our health care system.”
The settlement announced today resolved allegations that the hospital district provided compensation to nine employed physicians that exceeded the fair market value of their services. The United States contended that these agreements violated the Stark Statute and the False Claims Act. The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.
The allegations settled today arose from a lawsuit filed by a whistleblower, Dr. Michael Reilly, under the qui tam provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Dr. Reilly will receive $12,045,655.51 from the recovery announced today.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25 billion through False Claims Act cases, with more than $16 billion of that amount recovered in cases involving fraud against federal health care programs.
The case, United States ex rel. Reilly v. North Broward Hospital District, et al., Case No. 10-60590 (S.D. Fla.), was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Southern District of Florida and the HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Florida Hospital District Agrees to Pay United States $69.5 Million to Settle False Claims Act AllegationsRead the Press Release
North Broward Hospital District, a special taxing district of the state of Florida that operates hospitals and other health care facilities in the Broward County, Florida, area, has agreed to pay the United States $69.5 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.
“The Department of Justice has long-standing concerns about improper financial relationships between health care providers and their referral sources, because those relationships can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”
“Our citizens deserve medical treatment uncorrupted by excessive salaries paid to physicians as a reward for the referral of business rather than the provision of the highest quality healthcare,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “This office will be steadfast in continuing to devote all necessary resources to ensure that anyone rendering medical care does so for the sole benefit of the patient and in compliance with the law.”
“Improper financial rewards given to physicians in exchange for patient referrals corrupts medical decision making and inflates health care costs,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “Our agency will continue to root out such behavior from our health care system.”
The settlement announced today resolved allegations that the hospital district provided compensation to nine employed physicians that exceeded the fair market value of their services. The United States contended that these agreements violated the Stark Statute and the False Claims Act. The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.
The allegations settled today arose from a lawsuit filed by a whistleblower, Dr. Michael Reilly, under the qui tam provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Dr. Reilly will receive $12,045,655.51 from the recovery announced today.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25 billion through False Claims Act cases, with more than $16 billion of that amount recovered in cases involving fraud against federal health care programs.
The case, United States ex rel. Reilly v. North Broward Hospital District, et al., Case No. 10-60590 (S.D. Fla.), was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Southern District of Florida and the HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.
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.
Felon Who Sold Stolen Weapons Sentenced to Ten YearsRead the Press Release
A six-time felon who stole weapons and sold them after burglarizing homes was sentenced yesterday to ten years in federal prison.
Dustin Wilson, age 37, from rural Center Junction, received the prison term after a May 15, 2015, guilty plea to a one-count Indictment charging him with being a felon in possession of a firearm.
At the guilty plea hearing, Wilson admitted that, on January 1, 2013, he possessed two stolen firearms. Prior to this possession he had been convicted of six felony offenses, five of which involved drug related crimes. During sentencing, it was revealed that Wilson had obtained these weapons after burglarizing a home. He later sold them. Evidence also showed that Wilson had burglarized another home several months earlier and sold a weapon he had taken during that burglary.
Wilson was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. He was sentenced to 120 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Wilson is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Steve Young and investigated by the Jones County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-00035.
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Federal Court Sentences Davenport Man on Charge of Felon in Possession of A FirearmRead the Press Release
DAVENPORT, IA - On September 14, 2015, Adam Lamar Ammons, age 42, formerly of Davenport, Iowa, was sentenced by United States District Court Judge James E. Gritzner to 88 months in prison, after pleading guilty to the charge of felon in possession of a firearm, announced United States Attorney Nicholas A. Klinefeldt. Ammons was also ordered to serve three years of supervised release following the period of imprisonment, and to pay $100 towards the Crime Victims Fund.
On or about August 14, 2014, as part of a narcotics investigation, Davenport Police Department (DPD) officers obtained a search warrant to seize and search a safe from a bedroom at a residence on 15th Street in Davenport, Iowa. A Ruger SR22 handgun and associated handgun magazines were seized out of this safe. A witness knew Ammons had placed this safe at the residence, and knew that only Ammons had a key. Ammons admitted that he knew the Ruger SR22 handgun was in the safe, and that he knowingly possessed this handgun. Ammons has a prior 2012 state felony conviction for possession with intent to deliver marijuana.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Davenport Police Department, and this case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhoods initiative.
Federal Court Sentences Burlington Man for Production of Child PronographyRead the Press Release
DAVENPORT, IA - On September 14, 2015, Jeffrey David Rogers, age 49, of Burlington, Iowa, was sentenced by Senior United States District Court Judge James E. Gritzner to 210 months in prison on the charge of production of child pornography, announced United States Attorney Nicholas A. Klinefeldt. Rogers was also ordered to serve ten years of supervised release following the period of imprisonment, to comply with sex offender registry requirements, and to pay $100 towards the Crime Victims Fund.
Burlington, Iowa, police officers seized Rogers’ cell phone in August of 2014 after receiving information that it contained child pornography. Rogers’ cell phone was forensically examined, and the forensic examiner concluded that the phone contained several pornographic photographs of a child, later determined to be a 4 year-old female. Rogers admitted taking these pictures while he was babysitting the victim.
Rogers pleaded guilty to the charge of production of child pornography on May 26, 2015.
This matter was investigated by the Burlington, Iowa, Police Department and the Federal Bureau of Investigation, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Childhood initiative.
Federal Charges Brought in Tallahassee Cyberstalking CaseRead the Press Release
TALLAHASSEE, FLORIDA – A federal grand jury returned an indictment charging Michael Daniel Rubens, 30, formerly of Tallahassee, with seven counts of cyberstalking, five counts of unauthorized access to a protected computer, and one count of aggravated identity theft. Rubens was arraigned yesterday in the U.S. District Court in Tallahassee. The indictment was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
The 13-count indictment alleges that, between January 2012 and January 2015, in the Northern District of Florida, Rubens used interactive computer services, such as social media accounts, to engage in conduct causing emotional distress to multiple women. Rubens is also charged with hacking into various online accounts of multiple women to obtain information about them. The trial is scheduled for November 16, 2015.
This case resulted from investigations by the United States Immigration and Customs Enforcement Homeland Security Investigations, the Florida State University Police Department, and the Leon County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Jason S. Beaton.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
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]Federal Charges Brought in Tallahassee Cyberstalking CaseRead the Press Release
TALLAHASSEE, FLORIDA – A federal grand jury returned an indictment charging Michael Daniel Rubens, 30, formerly of Tallahassee, with seven counts of cyberstalking, five counts of unauthorized access to a protected computer, and one count of aggravated identity theft. Rubens was arraigned yesterday in the U.S. District Court in Tallahassee. The indictment was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
The 13-count indictment alleges that, between January 2012 and January 2015, in the Northern District of Florida, Rubens used interactive computer services, such as social media accounts, to engage in conduct causing emotional distress to multiple women. Rubens is also charged with hacking into various online accounts of multiple women to obtain information about them. The trial is scheduled for November 16, 2015.
This case resulted from investigations by the United States Immigration and Customs Enforcement Homeland Security Investigations, the Florida State University Police Department, and the Leon County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Jason S. Beaton.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
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,
Drug User Sentenced to Prison for Possessing a FirearmRead the Press Release
An admitted drug user who possessed a weapon was sentenced yesterday to over four years in federal prison.
Elijah Devonn Oshay Morse, age 20, from Cedar Rapids, received the prison term after a June 8, 2015, guilty plea to a one-count Indictment charging him with being an unlawful user of a controlled substance while in possession of a firearm.
At the guilty plea hearing, Morse admitted that, on December 4, 2014, he possessed a loaded .357 handgun. He also admitted that he was a frequent user of marijuana. During sentencing it was revealed that Morse was arrested on December 4 on an outstanding warrant alleging that he fired several shots from the .357 at two individuals standing outside on a porch in Cedar Rapids. He was 19 at the time of this shooting. No one was injured but there were also people inside the residence including children. At the time of his arrest, in addition to possessing the loaded handgun Morse possessed a large sum of money and 13 grams of cocaine.
Morse was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. He was sentenced to 57 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Morse is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Steve Young and investigated by the FBI Safe Streets Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-00032.
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Davenport Man Sentenced to 20 Years for Bank RobberyRead the Press Release
DAVENPORT, IA – On September 14, 2015, Adrian Romal Lomas (Lomas), 43, of Davenport, Iowa, was sentenced by Senior United States District Judge James E. Gritzner to 240 months in prison on the charge of bank robbery, announced United States Attorney Nicholas A. Klinefeldt. Lomas was also ordered to serve three years supervised release following the imprisonment, to pay $3,375 in restitution, and to pay $100 to the Crime Victims Fund.
On Friday, June 6, 2014, Adrian Romal Lomas and a 15-year-old boy entered the federally insured Family Credit Union on Jersey Ridge Road in Davenport at about 2:45 p.m. and robbed it. Lomas was a wearing a dark T-shirt, gloves, sunglasses, a baseball-type cap, and a bandana over his face. He had placed an authentic-looking, imitation firearm in his waistband which he showed the teller before demanding all of the money she had. Lomas made contact with the teller as he reached across the teller’s counter to withdraw some of the money. Lomas placed the money in a backpack that was carried, at first, by the juvenile and then by Lomas. Lomas and the juvenile fled the bank and ran to an awaiting vehicle driven by a third person. Lomas got away with $4,075.00.
Lomas was arrested on June 11, 2014, at a motel in Moline, Illinois.
Trial of the matter commenced on May 19, 2015 in the United States Courthouse in Davenport, Iowa, and the jury returned a guilty verdict on May 22, 2015.
This matter was investigated by the Davenport Police Department and the Federal Bureau of Investigation, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Dallas Securities Broker Admits FraudRead the Press Release
DALLAS — Wade Lawrence, 43, of Dallas, a securities broker, appeared this morning before U.S. Magistrate Judge David L. Horan and pleaded guilty to a felony Information charging one count of securities fraud, announced U.S. Attorney John Parker of the Northern District of Texas.
Lawrence faces a maximum statutory penalty of five years in federal prison and a $250,000 fine or twice any pecuniary gain to the defendant or loss to the victims. In addition, Lawrence agrees to forfeit $1,542,966, in proceeds traceable to the offense, in the form of a money judgment and proceeds from the sale of his residence. Lawrence will remain on bond pending sentencing, a date for which was not set.
According to documents filed in the case, from June 2008 through July 2011, Lawrence worked as a securities broker by Oppenheimer & Co. Inc., in Dallas and was active in conducting trades in his customer brokerage accounts. In 2010 and 2011, Lawrence began to lose significant amounts of money, both in his clients’ trading accounts and his individual trading account. In August 2011, Lawrence moved to Southwest Securities in Dallas, where his trading losses continued.
Beginning in January 2012 and continuing through September 2013, Lawrence engaged in a scheme to defraud to obtain funds from individuals, with whom many he had longstanding personal and business relationships and who trusted him. He falsely offered for sale various investments, including real estate ventures and securities outside the brokerage accounts at Southwest Securities. He also offered interests in what he represented were a high-risk investment in options on the Volatility Index (VIX) on the Chicago Board Options Exchange.
Lawrence also solicited funds from several individuals by falsely representing they would be invested in a duplex. He falsely represented to other investors that their money would be invested in various securities such as in Facebook and Southwest Securities.
Lawrence represented to investors that their investments would return anywhere from 20 to 100 percent, and that it was possible to double their investment. In each case, he directed the investor to mail or wire-transfer funds to his personal account at Wells Fargo Bank, instead of a Southwest Securities account, giving various explanations for this, including that he was trying to start his own VIX fund and needed to establish a history for the fund.
Lawrence, however, only invested some of the investors’ money as represented. Instead, he spent several hundred thousand dollars of the proceeds for personal living expenses, including travel, mortgage payments on his Dallas residence, and a $10,000 piece of jewelry. In total, Lawrence obtained approximately $2,124,000 from the scheme. He returned approximately $581,034 to some of the investors.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The FBI investigated the case. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
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Council Bluffs, Iowa, Resident Sentenced for Possession with Intent to Distribute MethamphetamineRead the Press Release
COUNCIL BLUFFS, IA - On September 14, 2015, Daniel Eugene Hannan, a 40 year-old resident of Council Bluffs, Iowa, was sentenced by Senior United States District Court Judge Robert Pratt to 120 months in prison on the charges of possession with intent to distribute methamphetamine and possession of a stolen firearm, announced United States Attorney Nicholas A. Klinefeldt. Hannan was also ordered to serve five years of supervised release following the period of imprisonment.
The investigation of this matter began as a result of Hannan fleeing from law enforcement. When located, Hannan was found to have a large amount of methamphetamine which Hannan intended to distribute. A subsequent search warrant located additional methamphetamine and a shotgun which had been stolen from a burglary in Red Oak, Iowa. Hannan entered a guilty plea to the charges of possession with intent to distribute methamphetamine and possession of a stolen firearm on June 4, 2015.
The investigation of this matter was conducted by the Southwest Iowa Narcotics Task Force, the Council Bluffs, Iowa, Police Department, and the Red Oak, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Convicted Sex Offender Sentenced for Sexual Enticement of A ChildRead the Press Release
Orlando, Florida – United States District Judge Roy B. Dalton, Jr. has sentenced Jacob Isaac Bomboy (25, Lake County) to 12 years in federal prison for attempting to entice a child to engage in illicit sexual conduct. He pleaded guilty on June 1, 2015.
According to the plea agreement, from November 7, 2014, to March 11, 2015, Bomboy engaged in online communications with an undercover FBI agent posing as a 13-year-old girl, and he made arrangements to meet the “child” for sex. On March 11, 2015, Bomboy traveled to a prearranged meeting location in Seminole County and was arrested.
The plea agreement also notes that Bomboy was previously arrested by state authorities for solicitation of sex with a minor. He was ultimately convicted for attempted child abuse and was sentenced to five years of sex offender probation. Bomboy was on probation when he attempted to meet the 13-year-old girl for sex.
This case was investigated by the Federal Bureau of Investigation, and it was prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Coeur d’Alene Man Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
COEUR D'ALENE - Keith David Killingsworth, 38, of Coeur d’Alene, Idaho, pleaded guilty today in federal court to possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Killingsworth was indicted by a federal grand jury in Coeur d'Alene on February 18, 2015.
According to the plea agreement, between July 2013, and December 2013, investigators with the Idaho Internet Crimes Against Children Task Force (ICAC) observed that a computer in Coeur d’Alene, Idaho, was making sexually explicit images of minors available on the internet. ICAC investigators were able to determine that the images were being shared from a computer at Killingsworth’s residence and obtained a search warrant.
ICAC investigators seized a number of computers from Killingsworth’s residence. A United States Secret Service forensic examiner later found that one of these computers, seized from Killingsworth’s bedroom, contained over 2,000 images and 67 videos, depicting minors engaged in sexually explicit conduct. Search terms indicated that Killingsworth was looking for child pornography. The National Center for Missing and Exploited Children determined that Killingsworth’s child pornography collection included images of minors from multiple states, including Washington, Indiana, New Jersey, Iowa, Texas, Georgia, Pennsylvania, and a number of foreign countries.
The charge of possession of sexually explicit images of minors is punishable by up to 20 years in prison, a maximum fine of $250,000.00, and up to lifetime supervised release.
Sentencing is set for December 15, 2015, before Senior United States District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated through the collaborative effort of the Coeur d’Alene Police Department, the Kootenai County Prosecutor’s Office, Boise Police Department, the Federal Bureau of Investigation (FBI), and the United States Secret Service. These agencies participate in the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icactaskforce.org.
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.”
Clinton County, Kentucky, Man Sentenced for Filing False Tax ReturnsRead the Press Release
Failed to report earnings and pay income taxes on $386,183.67 during a six year period and overstated business expenses of $581,519.91
BOWLING GREEN, Ky. – A Clinton County, Kentucky, businessman and oil driller was sentenced by U.S. District Judge Greg N. Stivers to six months in prison and ordered to pay restitution of $283,385 (the tax due) to the Internal revenue service for failing to report approximately $386,183.67 in income and royalty income during a six year period and for overstating business expenses of $581,519.91 announced United States Attorney John E. Kuhn, Jr. There is no parole in the Federal Court system.
Further, Judge Stivers yesterday ordered Steven L. Burchett, age 51, to pay for the costs of his incarceration and 1 year of supervised release to follow his release from prison. Finally, Stivers imposed a fine of $10,000 per count of conviction for a total of $60,000. During the sentencing hearing, the evidence established that between 2006 to 2011, Burchett partially paid for a home and driveway with income for which he did not pay taxes. In addition, Burchett deducted the building of his home and driveway as business expenses. Burchett deducted multiple cash withdrawals as business expenses. Finally, evidence was introduced at the hearing that Burchett owned several luxury automobiles including a Dodge Viper, Cadillac Escalade, and Cadillac XLRV that he fraudulently deducted as a business expenses
Previously, Burchett admitted to willfully making and subscribing U.S. Individual Tax Returns, for the calendar years 2006 through 2011,which were written under the penalty of perjury and filed with the Internal Revenue Service, (IRS) and included information he did not believe to be true and correct.
Specifically, on October 11, 2008, Burchett filed a U.S. Individual Tax Return for calendar year 2006, with the IRS, in which he failed to report approximately $224,735.76 of additional income on Form 1040 line 22.
On October 8, 2008, Burchett filed a U.S. Individual Tax Return, for the calendar year 2007, with the IRS, in which he failed to report approximately $27,003.91 of additional income.
On October 15, 2009, defendant Burchett filed a U.S. Individual Tax Return, for the calendar year 2008, with the IRS, and overstated approximately $41,394 in business expenses and failed to report royalty income of approximately $18,236 and understated approximately $56,895 in additional income.
On April 15, 2010, Burchett filed a joint U.S. Individual Tax Return, for the calendar year 2009, and overstated approximately $90,650 in business expenses and failed to report approximately $38,323 in royalty income and understated approximately $123,225 in additional income.
On April 15, 2011, Burchett filed a joint U.S. Individual Tax Return, for the calendar year 2010, and overstated approximately $305,564 in business expenses and failed to report approximately $64,490 in royalty income and understated approximately $360,380 in additional income.
On April 15, 2012, Burchett filed a joint U.S. Individual Tax Return, for the calendar year 2011, and overstated approximately $72,050 in business expenses and failed to report approximately$74,778 in royalty income and understated approximately $135,611 in additional income..
If convicted at trial, Burchett could have been sentenced to three years in prison on each of the six charges for a total of eighteen years, a total fine of $1,500,000., and a period of up to one year of supervised release.
This case was prosecuted by Assistant United States Attorney Joshua Judd and was investigated by the Criminal Investigation Division of the Internal Revenue Service.
Clarksburg woman convicted of selling cocaine near Harrison County playgroundRead the Press Release
CLARKSBIRG, WEST VIRGINIA – Jessica A. McCracken, 32, of Clarksburg, was convicted of cocaine trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
McCracken sold cocaine base near the Harrison Street Playground in Harrison County West Virginia. She pled guilty today to one count of “Distribution of Cocaine Base within 1,000 Feet of a Protected Location.” She will face between one and forty years in prison and a fine of up to $2,000,000. 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 Sarah Montoro prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge John S. Kaull presided.
Carmen Dozier Imprisoned for Inn Embezzlement and Bank FraudRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Carmen Dozier, 39, of Rutland, was sentenced today in United States District Court in Rutland to 15 months of imprisonment following her guilty plea to wire fraud. U.S. District Judge Geoffrey Crawford also ordered that Dozier serve three years of supervised release following completion of her prison term and pay restitution of more than $81,000. The court directed that Dozier surrender to the Bureau of Prisons on a to-be-determined date after November 1.
Last February, a federal grand jury in Rutland returned a two-count indictment charging Dozier with wire fraud and bank fraud. According to the indictment, in May 2013 Dozier was hired as the front desk manager at the Brandon Inn in Brandon, Vermont. Dozier prepared payroll records which were sent to the Inn's payroll processing company. She also took and confirmed reservations and paid vendors for goods and services for the Inn. Beginning in July 2013 and continuing until mid-May 2014, Dozier embezzled about $75,000 from the Inn. She did this by falsifying the Inn's payroll records to inflate the regular and overtime hours she ostensibly worked, causing the Inn's payroll processor to issue her paychecks or electronic direct deposits in amounts that exceeded her earned income. Dozier also caused fraudulent electronic transfers of Inn funds to her personal bank account at Lake Sunapee Bank. In addition, Dozier fraudulently used credit cards issued to the Inn's owners to make personal purchases, and fraudulently opened and used a BillMeLater PayPal service account.
Dozier also defrauded Lake Sunapee Bank by depositing, and attempting to deposit, about $20,000 worth of checks which were made payable to Dozier and which were purportedly signed by family members. In fact, the checks were written against out-of-state accounts which either were closed or did not contain sufficient funds. Dozier attempted to withdraw the apparent proceeds of the checks from Lake Sunapee Bank before the checks were dishonored. Lake Sunapee Bank suffered a loss of more than $3800.
This case was investigated by the Brandon Police Department and the Federal Bureau of Investigation.
Dozier is represented by Federal Public Defender Michael Desautels. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Carlsbad Couple Admits Selling Unapproved “Energy Wave” Medical DevicesRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – September 15, 2015
SAN DIEGO – David and Sandra Perez pleaded guilty in federal court today to charges relating to the sale of “Energy Wave” medical devices via the Internet – devices they marketed as an effective treatment for cancer and AIDS, yet had not received necessary approval from the U.S. Food and Drug Administration.
According to their plea agreements, the couple marketed the Energy Wave device over the Internet from their home in Carlsbad. They have since moved to Oregon. David Perez admitted scheming with the manufacturer of the devices, David Arthur, who marketed the “Energy Wave” device over the internet using the website www.myenergywave.com. Arthur previously pleaded guilty and is awaiting sentencing.
As detailed in court, the Energy Wave device consists of a micro-current frequency generator with a digital readout, two stainless steel cylinders and two personal application plates with connectors and lead wire for the cylinders and plates. Users were provided with an operating manual and a list of Auto Codes that set forth hundreds of digital settings for the device, directed to specific conditions from abdominal pain, AIDS and diabetes to stroke, ulcer and worms. The Auto Codes and Manual advised users to connect the cylinders or plates to the machine and touch them to the body for a recommended run time to treat each condition.
David Perez admitted selling each device for approximately $1,200 to $1,500, and receiving gross proceeds of approximately $271,000. He also acknowledged that he intended to defraud and mislead the FDA by attempting to evade the agency’s oversight of medical claims made regarding the Energy Wave device by maintaining a separate website (rifecodes.com) to which he referred customers who needed to obtain the auto codes that allegedly were effective in treating the various medical conditions.
Sandra Perez admitted assisting her husband by shipping the “Energy Wave” devices and depositing the funds necessary to pay coconspirator David Arthur for the devices. The couple admitted that they knew or should have known a number of their customers were vulnerable because they had purchased the device in an attempt to cure cancer, and that they were marketing the device without the proper FDA approvals.
“Those who are sick and desperate for relief are particularly vulnerable to scams, and we are doing our best to protect them from people who exploit the weak for their own financial gain,” said U.S. Attorney Laura Duffy.
“The FDA oversees approvals for medical devices to ensure that the public is protected from devices that are unsafe or ineffective,” said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations’ Los Angeles Field Office. “We will continue to commit our efforts to remove potentially dangerous medical devices from the U.S. marketplace.”
David Perez is scheduled to be sentenced January 11, 2016 before U.S. District Judge Roger T. Benitez. His wife was sentenced by U.S. Magistrate Judge William Gallo to one year of probation, and ordered to perform 100 hours of community service and pay restitution of $1,495 to a purchaser of the device.
During today’s hearing, Judge Gallo stated: “I believe you had to know at some level that this was junk science.”
DEFENDANT Criminal Case No. 15cr0360-BEN
David Perez Age: 60
Medford, Oregon
Sandra Perez Age: 55
Medford, Oregon
SUMMARY OF CHARGES
David Perez:
Conspiracy– Title 18, U.S.C., Section 371
Maximum penalty: Three years in prison and $250,000 fine
Sandra Perez:
Sale of Unapproved Medical Devices-Title 21, U.S.C., Sections 331(a) and 333(a)(2), a misdemeanor
Maximum penalty: One year in prison and $100,000 fine
AGENCIES
Food and Drug Administration, Office of Criminal Investigations
Homeland Security Investigations
Postal Inspection Service
Caribou Man Sentenced to 35 Months on Firearms ChargeRead the Press Release
Contact: James M. Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that George D. LaCasse, 35, of Caribou, Maine, was sentenced in U.S. District Court by Judge John A. Woodcock, Jr. to 35 months in prison and three years of supervised release by for his unlawful possession of firearms. LaCasse pleaded guilty on April 11, 2015.
Court records reveal that on May 23, 2014, LaCasse arranged for another person to purchase a 9mm pistol for him from Ben’s Trading Post in Presque Isle, Maine. LaCasse was at the Trading Post when the firearm was purchased. Witnesses saw him with the pistol. He admitted to others that he had a gun. Federal agents also recovered 9mm casings and other evidence that LaCasse had used the firearm for target practice. LaCasse was prohibited from possessing firearms because he had felony convictions in Massachusetts in 2009.
The investigation was conducted by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Caribou Police Department.
Canton man sentenced to prison, ordered to repay $6.7 million, for fraud in getting federal contractsRead the Press Release
A Canton man was sentenced to one year in prison and ordered to repay $6.7 million for making false representations about the company’s office location so it could obtain a HUBZone certification and qualify for federal contracts, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
William Richardson III, also known as Buster Richardson, previously pleaded guilty to one count of wire fraud.
The Historically Underutilized Business Zone Act of 1997 (the HUBZone Program), was established to provide federal contracting assistance for qualified small business concerns located in historically underutilized business zones in an effort to increase employment opportunities, investment, and economic development in those areas. Under the HUBZone Program, certain government contracting opportunities were “set aside” to be awarded only to eligible HUBZone Program participants, according to court documents.
There were four requirements to participate in the HUBZone Program. First, a firm had to be classified as a small business. Second, the firm had to be controlled and owned at least 51 percent by United States citizens. Third, a firm’s principal office had to be located in a designated HUBZone area. Fourth, at least 35 percent of the firm’s employees had to reside in a designated HUBZone area. Only firms that satisfied all of these requirements were eligible to participate in the HUBZone Program and compete for HUBZone set-aside and/or sole-source contracts, according to court documents.
Before a firm could participate in this program and bid on designated government contracts, it had to seek and obtain a certification from the United States Small Business Administration (SBA) verifying that the firm was HUBZone Program eligible. The SBA relied on information that was provided by applicant firms to determine and certify eligibility, according to court documents.
In August 2000, to obtain a HUBZone certification, Richardson and his company, TAB Construction Company, submitted to SBA a HUBZone application in which Richardson falsely stated that TAB’s principal office was located at 1010 Walnut Avenue NE in Canton, a location that was within a designated HUBZone area. TAB’s principal office was actually located in another area of Canton that was not within a HUBZone area, specifically 4534 Vliet Street SW, according to court documents.
Richardson falsely represented in TAB’s application that the Vliet Street SW location was only a storage area for equipment and was not the company’s principal office location. Richardson and TAB provided supporting information and documents to SBA, including a fake lease, to back up this false claim, according to court documents.
Based on Richardson’s false representations, SBA certified that TAB was HUBZone Program eligible and placed TAB on the government’s List of Qualified HUBZone Small Business Concerns, according to court documents.
With this designation, Richardson and TAB received contracts from the U.S. Army Corps of Engineers, the U.S. Coast Guard and the National Park Service between 2005 and 2012, according to court documents.
“Cutting corners to fraudulently gain advantages in the federal contracting system will not be tolerated,” Dettelbach said.
“Let this sentencing demonstrate to the public that the Department of Homeland Security, Office of Inspector General stands committed to working with its law enforcement partners to hold accountable anyone who brazenly defies federal law to take advantage of federal programs funded by the taxpayers’ hard-earned money,” said John Tiano, Special Agent in Charge, Department of Homeland Security, Office of Inspector General.
“The Defense Criminal Investigative Service is committed to working with our partner agencies to combat fraud impacting the integrity of the Department of Defense’s procurement system,” said Brian Reihms, Special Agent in Charge, Defense Criminal Investigative Service.
"Today's sentencing demonstrates that those who provide services for the U.S. government and purposely provide false and misleading information for their own personal gain, will be held accountable for their actions," said the Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit, Frank Robey. "Our organization will continue to use every tool at our disposal to protect the nation's finances."
This case is being prosecuted by Assistant U.S. Attorney Rebecca Lutzko following an investigation by the Small Business Administration – Office of Inspector General; Defense Criminal Investigative Service; Department of Homeland Security- Office of Inspector General and the U.S. Army’s Criminal Investigation Division.
California Man Sentenced to Four Years in Prison for Multi-State Fraud Against United States Post OfficesRead the Press Release
PHOENIX – Yesterday, Kaleb Matias Wiewandt, 36, of Los Angeles, Calif., was sentenced by United States District Judge Susan R. Bolton to 51-months in prison and ordered to pay $1.1 million in restitution. Wiewandt previously pled guilty to conspiracy to commit mail and wire fraud for conspiring with others to steal several million postage stamps from the United States Postal Service.
“The defendant’s elaborate scheme to steal postage stamps from dozens of post offices was a significant offense that warranted a lengthy prison sentence,” said U.S. Attorney John S Leonardo.
"The health and success of the Postal Service depends upon strong and aggressive revenue protection," said Robert Wemyss, Inspector in Charge, Los Angeles Division. "The U.S. Postal Inspection Service will continue to identify and pursue criminals who deliberately avoid proper payment of postage."
Between May 2013 and April 2015, Wiewandt actively participated in a conspiracy to steal large numbers of postage stamps from various post offices in the United States. To execute the fraud, Wiewandt would set up a fictitious business by renting temporary office space, developing a business name and insignia, and creating a variety of business related documents such as business checks, invoices, and business cards. In nearly every case, the fictitious business invoice was transmitted to the post office to convey the false impression that a local business was seeking to purchase postage stamps in an amount that was between a few thousand dollars to approximately $21,000. If the post office accepted the invoice, Wiewandt would send a third-party courier to the post office with a fictitious business check. Postal clerks who called the phone numbers on the fictitious business invoice or check would be assured of the legitimacy of the transaction by Wiewandt or some other co-conspirator.
The investigation in this case was conducted by the United States Postal Inspection Services. The prosecution was handled by Raymond K. Woo, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-0633-PHX-SRB
RELEASE NUMBER: 2015-074_ Wiewandt
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Broward County Resident Convicted in Social Security Theft SchemeRead the Press Release
A Deerfield Beach resident pled guilty today to having stolen Social Security benefits for more than thirty years.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Margaret Moore-Jackson, Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General, made the announcement.
Claudia Carpenter, 60, of Deerfield Beach, pled guilty to two counts of theft of government funds, in violation of Title 18, United States Code, Section 641. Carpenter is scheduled to be sentenced on November 24, 2015 at 9:30 a.m. by U.S. District Judge Beth Bloom in Fort Lauderdale. The defendant faces up to ten years in prison, three years of supervised release and a $250,000 fine. The defendant will also be required to pay restitution.
According to information presented in court, the Social Security Administration administers numerous programs to provide for the material needs of individuals and their families, including retirement security insurance. Monthly benefits are paid to eligible retired workers and their eligible dependents. From approximately October 1984 through March 2015, Carpenter falsely obtained Social Security Administration Retirement Security Income (“RSI”) benefits that had been issued to her mother, who died in September 1984. The funds were directly deposited into a joint checking account the defendant shared with her deceased mother. After her mother’s death, the defendant continued to receive unauthorized SSA benefits, totaling $239,089. Carpenter withdrew these unauthorized funds by writing checks made payable to “cash” from the account and through cash withdrawals at automatic teller machines.
Mr. Ferrer commended the investigative efforts of SSA’s Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorney Randy Katz.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. 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.
Brother of San Diego Man Killed Fighting with ISIL Indicted for False Statements Made in Connection with Terrorism InvestigationRead the Press Release
Assistant U.S. Attorneys Shane Harrigan (619) 546-6981 and Caroline Han (619) 546-6968
NEWS RELEASE SUMMARY – September 14, 2015
SAN DIEGO - Marchello Dsaun McCain was arraigned in federal court today on new charges that he made false statements to the FBI in connection with an international terrorism investigation of his brother, Douglas McCain, an American believed killed while fighting with the Islamic State of Iraq and the Levant (ISIL) in Syria.
According to the indictment, Marchello McCain made false statements to Federal Bureau of Investigation Joint Terrorism Task Force (FBI-JTTF) agents about his knowledge of his brother’s travel to Syria and the use of a credit card to purchase Douglas McCain’s airline tickets from the United States to Turkey, a transit point for individuals travelling to Syria. On August 26, 2014, several U.S. media outlets reported that Douglas McCain had been killed in Syria fighting for ISIL in a battle against the Free Syrian Army.
In January 2015, FBI-JTTF agents arrested Marchello McCain in connection with an indictment charging him with three counts of possession of firearms and ammunition by a felon. A superseding indictment charging him with two additional counts of possession of firearms and ammunition by a felon and one count of possession of body armor by a violent felon was filed against him in March 2015. The second superseding indictment was unsealed today during a hearing before U.S. District Judge Thomas Whelan. McCain is currently being held in custody without bond.
U.S. Attorney Laura E. Duffy praised the work of the FBI-JTTF in furthering our joint mission of safeguarding our national security by working countless hours on this investigation. The FBI-JTTF’s investigation of Douglas McCain’s travel to Syria is particularly important because it involves ISIL, a foreign terrorist organization which threatens to induce our youth into committing violence against foreigners and U.S. citizens alike.
Marchello McCain’s next court date is a motion hearing scheduled before District Judge Whelan on October 19, 2015.
This case is being prosecuted in federal court in San Diego by Assistant U.S. Attorneys Shane Harrigan and Caroline Han. This case was investigated by the San Diego Joint Terrorism Task Force; the Federal Bureau of Investigation; the Federal Air Marshal Service; the Department of Homeland Security, Homeland Security Investigations; and the Department of Homeland Security, U.S. Border Patrol.
DEFENDANT Criminal Case No. 15CR0174-W
Marchello Dsaun McCain San Diego, California Age 33
SUMMARY OF CHARGES
Counts 1-4, and 6:
Title 18, U.S.C., Sections 922(g)(1) – Felon in Possession of Firearms and Ammunition
Maximum penalties: Ten years in prison and a $250,000 fine.
Count 5:
Title 18, U.S.C., Sections 931 – Felon in Possession of Body Armor by a Violent Felon
Maximum penalties: Three years in prison and a $250,000 fine.
Count 7:
Title 18, U.S.C., Sections 1001(a)(2) – False Statements Involving International Terrorism
Maximum penalties: Eight years in prison and a $250,000 fine.
INVESTIGATING AGENCIES
San Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Federal Air Marshal Service
Department of Homeland Security, Homeland Security Investigations
Department of Homeland Security, U.S. Border Patrol
*An indictment itself is not evidence that the defendants committed the crimes charged. The defendant is presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Broker Immediately Remanded into Custody to Begin Serving 33 Month SentenceRead the Press Release
Assistant U.S. Attorney Phillip L.B. Halpern (619) 546-6964
NEWS RELEASE SUMMARY – September 14, 2015
SAN DIEGO – Stock broker Sunil Sharma of Carlsbad was sentenced in federal court today to 33 months in custody for stealing more than $6 million from local investors by falsely claiming their funds were safely placed in conservative investments when, in reality, he was pursuing a risky day trading strategy that ultimately turned into a massive Ponzi scheme.
“You have not only destroyed the lives of the people who appeared in court today, but the lives of hundreds of others who make up their extended family,” said U.S. District Court Judge John A. Houston during the sentencing hearing.
As detailed in court papers, Sharma covered up his massive trading losses by continuing to falsely tell investors that their investments were doing well. Among other things, he would send investors monthly or quarterly statements that falsely reflected that their investments were generating the promised returns. Sharma admitted that even while reassuring investors, he diverted approximately $2.5 million in investor funds for his own personal use, including: (1) approximately $700,000 towards the down payment of a $2 million home off Artesian Road in San Diego; (2) approximately $12,000 for a cruise in the Mediterranean; and (3) for leasing a Mercedes SL and a BMW.
As revealed in court documents, Sharma was a Series 7 licensed broker, who had worked for Merrill Lynch, AG Edwards, and as an independent broker for Raymond James. In 2000, Sharma moved to San Diego where he continued to practice as an independent broker. Due to the market crash that followed September 11, 2001, Sharma and his clients lost a substantial amount of money. As a result, Sharma voluntarily gave up his license to act as a securities broker.
After relinquishing his broker’s license, Sharma began to work in the insurance industry. In 2002, Sharma sold insurance from his business in Rancho Bernardo. He also began teaching seminars highlighting various types of insurance and annuities which could be purchased by his clients.
In 2007, Sharma set up Gold Coast Holding, LLC (“Gold Coast”) as a vehicle to trade options and initially funded the company with approximately $50,000 of his own money. After experiencing a bit of “beginners luck” he began telling his insurance clients that they could make better returns if he could “day trade” their money. Recognizing that his customers would not give him money for risky options trading, he lied to them and falsely stated that Gold Coast was an extremely safe way to earn a monthly retirement income because their money was to be: (1) part of a diversified portfolio; (2) pooled with many other investors; (3) used to buy bonds from emerging markets in Brazil, Russia, India, and China (“BRIC”); and (4) managed by Goldman Sachs. Sharma guaranteed investors a rate of return (typically between 6%-7%) for two to three years and urged his clients to liquidate their retirement accounts and annuities based upon the safety of his investment scheme.
From the outset, Gold Coast (and later a second company he established, Safe Harbor Tax Lien Acquisitions) exclusively used the money for day trading options. Between January 2008 and November 2014, Sharma raised $8.36 million from 32 different clients using these two companies. In order to attract new investors, Sharma paid $2.12 million in “returns” to old clients from funds generally derived from the contribution of later investors.
For example, of the approximately $3.5 million he raised from investors in the first two years of day trading, Sharma was left with only about $250,000 by the end of 2009. As a result, Sharma turned Gold Coast into a classic “Ponzi scheme” by paying earlier investors their guaranteed rates of return with approximately $5 million in new funds solicited from later investors.
Prior to the investment scheme collapsing completely, Sharma stopped trading option spreads and switched over to purchasing straight “call” and “put” options. It was Sharma’s hope that adopting this new strategy would allow him to recoup all of his investment losses. Once again, however, Sharma’s strategy proved disastrous. Although he was able to make his December 2014 monthly payout to investors, he ran out of funds in January 2015.
United States Attorney Laura E. Duffy acknowledged that this Ponzi scheme was a bit harder to detect than usual as Sharma did not promise his investors outlandish returns. Nevertheless, she warned all investors to ensure that individuals soliciting money have appropriate licenses and audited financial statements. “All investors – especially when they are dealing with their retirement savings – must exercise due caution before turning over money even to long-time friends or else what appears to be a safe harbor might turn into a ship wreck.”
“Mr. Sharma engaged in an elaborate Ponzi scheme to steal millions of dollars from people who trusted him with their life savings,” said FBI Special Agent in Charge, Eric S. Birnbaum. “Today’s sentencing makes it clear that the FBI and U.S. Attorney’s Office will work together to identify, disrupt and hold accountable those individuals that are involved in sophisticated financial fraud schemes that steal money from the American public.”
DEFENDANT: Case Number 15cr1396
Sunil Sharma Age: 68 Carlsbad, CA
CHARGE
Wire Fraud, in violation of 18 U.S.C. § 1343.
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, restitution.
AGENCY
Federal Bureau of Investigation
Brockton Man Convicted by Federal Jury of Illegal Firearm PossessionRead the Press Release
BOSTON – A Brockton man was convicted in U.S. District Court in Boston on Friday, Sept. 11, 2015, for being a felon in possession of a firearm and ammunition.
Foster L. Starks, Jr., 54, of Brockton, was convicted following a week-long jury trial of being a felon in possession of a firearm and ammunition. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Oct. 28, 2015.
On May 24, 2009, at 11:05 p.m., Starks was stopped by a Massachusetts State Police Trooper for a marked lanes violation while driving on Route 24 North in Raynham. Starks was arrested after the Trooper discovered that he was driving with a suspended license. The vehicle needed to be towed, and prior to towing, the Trooper was required to conduct a search of the contents of the vehicle. While performing the search, the Trooper found a shopping bag on the front passenger seat containing a .45 caliber handgun loaded with seven bullets. The shopping bag also contained two boxes of additional ammunition and four bottles containing prescription medications. Starks has numerous prior convictions for various violent crimes, including armed robbery, and therefore was prohibited from possessing firearms or ammunition.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys David G. Tobin and Jordi de Llano of Ortiz’s Major Crimes Unit.
Belen Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Darrell Ray Trammell, 65, of Belen, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge. Under the terms of his plea agreement, the government will recommend that Trammell be sentenced to a term of imprisonment not to exceed 84 months followed by a term of supervised release to be determined by the court.
Trammell was arrested in Aug. 2014, on an indictment charging him and co-defendant Cynthia Boykin, 49, also of Belen, with participation in a conspiracy to distribute methamphetamine in Valencia County, N.M. According to the indictment, the conspiracy continued from Nov. 2013 to Jan. 2014. The indictment also charged Trammell and Boykin with distributing methamphetamine in Valencia County in Dec. 2013, and Trammell alone with distributing methamphetamine in Bernalillo County, N.M., in Jan. 2014.
During today’s proceedings, Trammell pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. In entering the plea, Trammell admitted that on Jan. 8, 2014, he distributed methamphetamine to an undercover law enforcement officer in exchange for $1,700.00.
Trammell remains in custody pending a sentencing hearing which has yet to be scheduled.
Co-defendant Boykin was arrested in March 2015. On May 20, 2015, Boykin pled guilty to a felony information charging her with possession of methamphetamine with intent to distribute. She admitted that on Dec. 12, 2013, she distributed three grams of methamphetamine to an undercover law enforcement officer. At sentencing, Boykin faces a statutory maximum penalty of 20 years in prison followed by not less than three years of supervised release. A sentencing hearing has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorneys David M. Walsh and Stephen R. Kotz are prosecuting the case.
Bank La Roche & Co AG Reaches Resolution under Justice Department's Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Bank La Roche & Co AG has reached a resolution under the department’s Swiss Bank Program.
“Today’s agreement is yet another example of a foreign financial institution coming forward, acknowledging its criminal conduct, taking the necessary steps to resolve its criminal exposure, cooperating with the department’s ongoing investigations and paying appropriate penalties,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “The continued success of the program is evident from the 35 agreements signed to date, and the treasure trove of information provided regarding U.S. accountholders, the foreign and domestic facilitators who assisted in the concealment of U.S- related accounts and the various entities and institutions that played critical roles in these schemes.”
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, La Roche 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.
La Roche was founded in 1787 and is based in Basel, Switzerland, with offices in Olten and Bern, Switzerland. In 2011, La Roche closed a Hong Kong asset management subsidiary that opened in 2008. On Feb. 13, 2015, La Roche sold its business to Notenstein Privatbank AG. Most of La Roche’s employees and the clients of La Roche, with the exception of U.S. taxpayers and a few other clients, will be transferred to Notenstein Privatbank AG. The transaction is expected to close in October 2015. Thereafter, La Roche intends to wind down its remaining business and relinquish its banking license.
La Roche 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). La Roche used a variety of means to assist some U.S. clients in concealing the assets and income the clients held in their La Roche undeclared accounts, including by:
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providing numbered accounts for 70 U.S. taxpayers;
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holding bank statements and other mail relating to 66 U.S.-related numbered accounts, as well as 20 named accounts of U.S. taxpayers domiciled in the United States;
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allowing substantial cash and precious metal withdrawals in connection with the closures of 27 U.S. taxpayers’ accounts for a total amount of $11.6 million;
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maintaining records in which certain U.S. taxpayers expressly instructed La Roche not to disclose their names to the IRS;
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providing travel cash cards to five U.S. taxpayers upon their request; and
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opening an account in June 2010 for a U.S. taxpayer who left UBS and who transferred $126,000 from UBS to the La Roche account.
In 51 instances, La Roche maintained accounts for U.S. taxpayers as beneficial owners of accounts held by non-U.S. corporations, foundations or other entities, some of which were sham entities, that concealed the beneficial ownership of the U.S. taxpayers. These entities included Liechtenstein foundations, two of which were established or administered by a Liechtenstein trust company, whose manager and director had a long-standing personal relationship with La Roche.
Due in part to the assistance of La Roche and its personnel, and with the knowledge that Swiss banking secrecy laws would prevent La Roche from disclosing their identities to the IRS, some U.S. clients of La Roche filed false and fraudulent U.S. Individual Income Tax Returns (IRS Forms 1040), which failed to report their interests in their undeclared accounts and the related income. Some of La Roche’s U.S. clients also failed to file and otherwise report their undeclared accounts on Reports of Foreign Bank and Financial Accounts (FBARs).
As part of its participation in the Swiss Bank Program, La Roche provided information concerning 10 U.S. client accounts held at La Roche in Switzerland since August 2008 sufficient to make treaty requests to the Swiss competent authority for U.S. client account records. It also provided a list of the names and functions of individuals who structured, operated or supervised the cross-border business at La Roche.
Since Aug. 1, 2008, La Roche maintained 201 U.S.-related accounts with a maximum aggregate value of approximately $193.9 million. 136 of these accounts were beneficially owned by U.S. clients domiciled in the United States, 36 of which were maintained in the names of entities. La Roche will pay a penalty of $9.296 million.
In accordance with the terms of the Swiss Bank Program, La Roche mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at La Roche 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 La Roche must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“With each agreement signed under the Swiss Bank Program, we gather more specific information about the schemes used to hide assets overseas,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The sheer magnitude of information collected as a result of these agreements will be used to pursue tax evaders around the world and will have profound ramifications in developing innovative international tax compliance strategies in the future.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS Large Business & International Division for their substantial assistance. Ciraolo also thanked Karen M. Quesnel, 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 and Senior Litigation Counsel Nanette L. Davis 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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Associate of Memphis Mob Pleads Guilty to Drug ConspiracyRead the Press Release
Memphis, TN – An associate of the Memphis Mob, a violent street organization, has pled guilty to conspiring to possess hydrocodone with the intent to distribute. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty plea today.
According to the indictment, Terrance Freeman unlawfully conspired with others to distribute large quantities of hydrocodone throughout the Memphis area beginning at a time period unknown to law enforcement but up until April 2014.
A yearlong investigation conducted by the Federal Bureau of Investigation (FBI) into the Memphis Mob revealed Freeman’s illicit activity. According to information presented in court, FBI agents executed a search warrant on Freeman’s house in April 2014. Numerous hydrocodone pills, more than $8,000 in drug currency, and a loaded Glock 9mm pistol with a 31-round extended magazine were recovered during the search. Freeman, who has three prior felony convictions, was subsequently detained on federal drug charges.
On Monday, September 14th, he accepted a plea of 12 ½ years in federal prison. Freeman also faces a fine of up to $2,500,000 when sentenced.
He’s scheduled to be sentenced by Judge Samuel H. Mays Jr. on December 17, 2015.
The case was investigated by the FBI and the Memphis Police Department.
Assistant U.S. Attorneys Daniel French and Reagan Taylor are prosecuting this case on the government’s behalf.