Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
22 October 2015
South Florida Resident Who Was Wanted in Connection with A Drug Trafficking Conspiracy Arrested in ArkansasRead the Press Release
A Palm Beach County resident, wanted on charges out of the Southern District of Florida for his alleged participation in a drug trafficking conspiracy, was arrested yesterday in Arkansas.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Amos Rojas, Jr., United States Marshal, United States Marshals Service, Carlos Canino, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO), made the announcement.
On February 5, 2015, Samuel David Alvarado, a/k/a “Wham,” 35, of Lake Worth, and thirty-eight co-defendants were charged in a fourteen count indictment with participating in a conspiracy to possess with intent to distribute various narcotics, including cocaine base, heroin, and/or cocaine hydrochloride, in violation of Title 21, United States Code, Sections 841(a)(1), and 846. If convicted, Alvarado faces a maximum sentence of life in prison. Alvarado allegedly fled the Southern District of Florida prior to his arrest on the indictment. A warrant was subsequently issued for his arrest.
Following his initial appearance in the Eastern District of Arkansas, Alvarado will be returned to the Southern District of Florida to face all charges contained in the indictment.
U.S. Attorney Wifredo Ferrer commended the investigative efforts of the United States Marshals Service in Florida and Arkansas, ATF, FBI and the Palm Beach County Sheriff’s Office. This case is being prosecuted by Assistant United States Attorneys Rinku Tribuiani and Robert Waters.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty.
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
South Florida Man Who Engaged in “Sextortion” Sentenced to 139 Years in PrisonRead the Press Release
After having been convicted at trial of producing child pornography, a Miami-Dade County resident was sentenced today to 139 years in prison, to be followed by a lifetime of supervised release by U.S. District Court Chief Judge K. Michael Moore.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Special Agent in Charge George Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Patrick Killen, Jr., 22, of Hialeah, was convicted on July 13, 2015, by a Miami jury of fifteen federal charges, including: three counts of production of child pornography, in violation of Title 18, United States Code, Section 2251(a); two counts of distribution of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2); four counts of receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2); four counts of possession of child pornography, in violation of Title 18, United States Code, Section 2252(a)(4)(B); and two counts of transmission of interstate threats, in violation of Title 18, United States Code, Section 875(d). Killen was acquitted of destruction of evidence, in violation of Title 18, United States Code, Section 1519.
According to the court records and trial testimony, beginning at least as early as November of 2012, Killen created fraudulent social media accounts using assumed identities of teenage girls. Killen stole photographs of minor females from Facebook, Instagram and other sources that he used in support of his falsified accounts. Using the assumed female identities, Killen would search social media websites and engage teenage boys, generally between 11 and 14 years of age, in conversation using internet chat applications such as Kik, Skype, and Omegle. Over the course of these conversations, some of which lasted hours and others months, Killen falsely presented himself as teenage girls. Killen would beg, bribe, and cajole the unsuspecting boys to send him sexually explicit pictures of themselves. In response to Killen’s fraudulent representations, hundreds of teenage boys sent Killen sexually explicit photographs and videos identified as child pornography. When many of these young boys expressed reticence in sending additional sexually explicit photographs, Killen would blackmail them by threatening to post the previously provided material on Instagram and other social media sites. Killen collected, catalogued, and traded the child pornography photographs and videos with other individuals around the world using peer-to-peer file sharing programs. Killen produced, possessed, distributed and received thousands of images and video of children engaged in sexually explicit conduct.
“The lengthy sentence handed down today sends a message to those who use the Internet to target and extort children through sexual exploitation (“sextortion”) and pornographic offenses” stated U.S. Attorney Ferrer. “We implore the community to protect our children by being vigilant and reporting all suspected offenses to law enforcement.”
"The conduct of Patrick Killen, Jr., is as appalling as it is inexcusable, said George L. Piro, Special Agent in Charge, FBI Miami. Taking the identities of minor females online, Killen would persuade teenage boys to send him sexually explicit photographs of themselves which Killen later used to extort these teenage boys. Known as sextortion, online predators use this type of behavior to produce child pornography and take advantage of children through terror and manipulation. The FBI and its Child Exploitation Task Force aggressively investigates allegations of sextortion and other online offenses against children."
Mr. Ferrer commended the investigative efforts of the FBI and Norwood New Jersey Police Department. The case was prosecuted by Assistant U.S. Attorneys Robb Emery and Ben Widlanski.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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.
South Florida Man Who Engaged in “Sextortion” Sentenced to 139 Years in PrisonRead the Press Release
After having been convicted at trial of producing child pornography, a Miami-Dade County resident was sentenced today to 139 years in prison, to be followed by a lifetime of supervised release by U.S. District Court Chief Judge K. Michael Moore.
U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida and Special Agent in Charge George Piro for the Federal Bureau of Investigation’s (FBI) Miami Field Office made the announcement.
Patrick Killen Jr., 22, of Hialeah, Florida, was convicted on July 13, 2015, by a Miami jury of 15 federal charges, including: three counts of production of child pornography; two counts of distribution of child pornography; four counts of receipt of child pornography; four counts of possession of child pornography; and two counts of transmission of interstate threats. Killen was acquitted of destruction of evidence.
According to the court records and trial testimony, beginning at least as early as November of 2012, Killen created fraudulent social media accounts using assumed identities of teenage girls. Killen stole photographs of minor females from Facebook, Instagram and other sources that he used in support of his falsified accounts. Using the assumed female identities, Killen would search social media websites and engage teenage boys, generally between 11 and 14 years of age, in conversation using internet chat applications such as Kik, Skype and Omegle. Over the course of these conversations, some of which lasted hours and others months, Killen falsely presented himself as teenage girls. Killen would beg, bribe and cajole the unsuspecting boys to send him sexually explicit pictures of themselves. In response to Killen’s fraudulent representations, hundreds of teenage boys sent Killen sexually explicit photographs and videos identified as child pornography. When many of these young boys expressed reticence in sending additional sexually explicit photographs, Killen would blackmail them by threatening to post the previously provided material on Instagram and other social media sites. Killen collected, catalogued and traded the child pornography photographs and videos with other individuals around the world using peer-to-peer file sharing programs. Killen produced, possessed, distributed and received thousands of images and video of children engaged in sexually explicit conduct.
“The lengthy sentence handed down today sends a message to those who use the Internet to target and extort children through sexual exploitation ‘sextortion’ and pornographic offenses,” said U.S. Attorney Ferrer. “We implore the community to protect our children by being vigilant and reporting all suspected offenses to law enforcement.”
“The conduct of Patrick Killen Jr., is as appalling as it is inexcusable,” said Special Agent in Charge George L. Piro. “Taking the identities of minor females online, Killen would persuade teenage boys to send him sexually explicit photographs of themselves which Killen later used to extort these teenage boys. Known as sextortion, online predators use this type of behavior to produce child pornography and take advantage of children through terror and manipulation. The FBI and its Child Exploitation Task Force aggressively investigates allegations of sextortion and other online offenses against children.”
U.S. Attorney Ferrer commended the investigative efforts of the FBI and Norwood New Jersey Police Department. The case was prosecuted by Assistant U.S. Attorneys Robb Emery and Ben Widlanski.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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.
South Carolina Woman Sentenced for Prostituting MinorRead the Press Release
NORFOLK, Va. – Doriean Barberi, 37, of Greenville, South Carolina, was sentenced today to 188 months in prison for transporting a minor across state lines for prostitution purposes.
Barberi pleaded guilty on May 7, 2015. According to court documents, Barberi was first identified by the Virginia Beach Police Department in September 2014 after Barberi had posted advertisements on the Internet for herself and a 17 year old minor offering their sexual services at a local hotel. Upon being interviewed, Barberi and the minor confirmed that they drove into Virginia several days earlier and first worked in Suffolk before moving to Virginia Beach. Barberi set up the appointments for the minor and the minor gave Barberi all of the money she was paid for having sex with customers. Barberi used the money, in part, to promote her aspiring rap music career.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office; and James A. Cervera, Chief of Virginia Beach Police, made the announcement after sentencing by Senior U.S. District Judge Henry Coke Morgan, Jr. Assistant U.S. Attorney Elizabeth M. Yusi prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-162.
###
Smithville Man Pleads Guilty to Internet Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Smithville, Mo., man pleaded guilty in federal court today to receiving child pornography over the Internet.
Jacob A. Arnold, 19, of Smithville, pleaded guilty before U.S. Chief District Judge Greg Kays to the charge contained in a June 23, 2015, federal indictment.
Arnold admitted that he received child pornography over the Internet on March 17, 2015.
On April 29, 2015, the Western Missouri Cyber Crimes (WMCC) Task Force received a cybertip from the National Center for Missing and Exploited Children regarding a video of child pornography that had been uploaded from Arnold’s computer to a DropBox account. On June 4, 2015, members of the WMCC Task Force and officers of the Smithville Police Department executed a state issued search warrant at the defendant’s residence. Officers seized computers, cameras, digital storage devices and a cell phone.
Child pornography was located on each of the items seized from Arnold’s residence, which must be forfeited to the government under the terms of today’s plea agreement. Approximately 170 videos and 1,600 images of child pornography were located on the seized items.
Under the terms of today’s plea agreement, Arnold agreed that he would not argue for a sentence below 10 years in federal prison without parole and the government agreed not to argue for a sentence greater than 15 years in federal prison without parole. The government will recommend that this federal sentence be served concurrently with Arnold’s 15-year sentence for child molestation in Clay County, Mo. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office. Upon his release from prison, Arnold will be required under the federal Sex Offender Registration and Notification Act (SORNA) to register as a sex offender and keep the registration current in each of the jurisdictions where he resides, is employed and is a student.
This case is being prosecuted by Assistant U.S. Attorney David Luna. It was investigated by the Western Missouri Cyber Crimes Task Force and the Smithville, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Sentencings for October 19 - October 21, 2015Read the Press Release
Estibe Garcia-Perez, 30, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on October 21, 2015, for illegal re-entry of a previously deported alien into the United States. Garcia-Perez was arrested in Cheyenne, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
William Cullen Grubbs, 61, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on October 21, 2015, for conspiracy to distribute 50 grams or more of methamphetamine and for distribution of less than 50 grams of methamphetamine near a school. Grubbs was arrested in Cheyenne, Wyoming. He received 60 months imprisonment, to be followed by six years of supervised release, and was ordered to pay a $2,000.00 fine and a $200.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Heather Lee Street, 39, of Mills, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on October 20, 2015, for conspiracy to distribute morphine and oxycodone. Street was arrested in Mills, Wyoming. She received six months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Robert Underkofler, 44, of Wheatland, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on October 19, 2015, for possession of child pornography. Underkofler was arrested in Guernsey, Wyoming. He received time served, to be followed by 15 years of supervised release, with the first four months on home confinement. Underkofler was ordered to pay a $1,000.00 fine, restitution in the amount of $8000.00, and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force.
Ritchie County woman sentenced for health care fraudRead the Press Release
CLARKSBURG, WEST VIRGINIA – Sherri J. Slaven, 51, of Ellenboro, West Virginia, was sentenced today for health care fraud and ordered to pay restitution in the amount of $133,968.83, United States Attorney William J. Ihlenfeld, II, announced.
Slaven operated a home health care business and she engaged in a scheme to defraud the West Virginia Offices of the Insurance Commission Workers’ Compensation Old Fund by repeatedly submitting claims for various health care services that she never performed. She received fraudulent compensation in excess of $100,000 for services that were not provided. Slaven pled guilty in July 2015 to one count of “Health Care Fraud.” In addition to the restitution ordered today, Slaven was sentenced to probation for a term of five years, with the first eight months on home detention.
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The West Virginia Office of the Insurance Commission Office of Inspector General – Fraud Investigations Unit led the inquiry.
U.S. District Judge Irene M. Keeley presided.
Richmond Man Pleads Guilty to Drug ChargesRead the Press Release
NEWPORT NEWS, Va. – Michael Newman, 37 of Richmond, pleaded guilty today to charges of conspiring to distribute marijuana and ethylone.
According to a statement of facts filed with the plea agreement, Newman was located at a closed gas station in James City County on May 10, 2015, and found to be in possession of marijuana, ethylone, drug scales and more than $3,000 in cash. The marijuana and ethylone were both intended for distribution.
Newman was indicted by a federal grand jury on Aug. 10, 2015, and faces a maximum penalty of 20 years in prison when he is sentenced on Feb. 25, 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; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; David G. Bowers, Acting Inspector in Charge of the U.S. Postal Inspection Services’ Washington Division; and Bradley Rinehimer, Chief of James City County Police, made the announcement after the plea was accepted by U.S. Magistrate Judge Doulas E. Miller. Assistant U.S. Attorney Eric M. Hurt 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. 4:15cr56.
###
Retired Air Force Master Sergeant Pleads Guilty to Disclosing Confidential Bid Information for Government Contracts and Tax FraudRead the Press Release
A retired U.S. Air Force Master Sergeant pleaded guilty today in U.S. District Court for the Southern District of Florida to unlawfully disclosing confidential procurement information and filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Trevor Smith retired from the U.S. Air Force in December 2012, according to court documents and statements made in open court. From February 2009 through February 2010, Smith was deployed to Afghanistan, where he served as Supply Non-Commissioned Officer-In-Charge for the Operation Enduring Freedom/Combined Security Transition Command-Afghanistan NATO Training Mission. In that capacity, Smith met a Fort Lauderdale, Florida-based government contractor and agreed to disclose confidential bid information on government contracts to the contractor in exchange for bribe payments. Smith and the contractor agreed that Smith would receive two percent of all revenues on contracts that the contractor received as a result of Smith’s assistance.
In January 2010, the contractor wired $42,853.29 to Smith. The two agreed to wait until Smith returned to the United States for more payments. After returning to the United States, Smith set up a shell corporation called T Star Air Inc. to receive 23 additional payments totaling $220,600. Smith also created and submitted phony invoices to conceal the scheme. For tax years 2010 through 2012, Smith filed corporate tax returns for T Star Air that falsely claimed inflated expenses and deductions.
At his Jan. 5, 2016 sentencing, Smith faces a statutory maximum penalty of five years in prison for disclosing confidential procurement information and three years in prison for filing a false tax return. He could also be fined up to $500,000 or twice the gain from his crimes.
Acting Assistant Attorney General Ciraolo commended special agents of Internal Revenue Service-Criminal Investigation, the U.S. Air Force’s Office of Special Investigations and the U.S. Department of Defense’s Office of the Inspector General, who investigated this case and Trial Attorneys Charles M. Edgar Jr. and Jason H. Poole of the Tax Division, who are prosecuting this case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the Southern District of Florida for their substantial assistance.
Registered Sex Offender Residing in El Paso Sentenced to Federal Prison for Receipt and Distribution of over 93,000 Images of Child PornographyRead the Press Release
In El Paso this morning, 45–year-old Alexandro Silva of El Paso was sentenced to 210 months in federal prison for receipt and distribution of more than 93,000 images of child pornography announced United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez, El Paso Division.
In addition to the prison term, Senior United States District Judge David Briones ordered that Silva pay $2,000 restitution to his victims and be placed on supervised release for a period of ten years after completing his prison term.
On April 29, 2015, Silva pleaded guilty to the receipt and distribution of child pornography. According to court records, on August 29, 2014, HSI agents executed a search warrant at Silva’s residence and seized various items including a computer tower, two laptop computers and various electronic media. A subsequent forensics examination of the defendant’s desktop computer revealed the presence of more than 93,000 images and 55 videos of minors engaged in sexually explicit conduct.
Silva has remained in federal custody since his arrest on August 29, 2014.
This case was investigated by Homeland Security Investigations together with the El Paso County Sheriff’s Office. Assistant U.S. Attorney Rifian Newaz prosecuted this case on behalf of the Government.
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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Recidivist Child Sex Offender Convicted of Child Pornography ChargesRead the Press Release
A Minnesota man with two prior convictions for sexually abusing children was convicted today of child pornography charges. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota made the announcement.
Rex Lee Furman, 52, of Federal Dam, Minnesota, was found guilty following a three-day trial of producing, receiving, distributing and possessing child pornography, and committing a felony offense while being required to register as a sex offender. Senior U.S. District Judge David S. Doty of the District of Minnesota presided over the trial. Sentencing will be set at a later date. Due to his prior convictions, Furman is subject to a mandatory life sentence plus 10 years in prison.
According to the evidence presented at trial, in the fall and winter of 2013, during separate investigations by the Minnesota Bureau of Criminal Apprehension (BCA) and the Minneapolis Police Department, law enforcement officers obtained child pornography videos from an Internet protocol (IP) address linked to Furman’s home. The evidence showed that, thereafter, on Feb.13, 2014, during a search of his residence, which was executed with the assistance of the Cass County Sheriff’s Office, Furman acknowledged that he had downloaded child pornography. According to the trial evidence, he also informed a special agent that he had produced images depicting the genitalia of two girls who had been in his care, one who turned four years old and one who was five years old at the time. The trial evidence showed that subsequent forensic analysis of Furman’s computers and digital media revealed child pornography that he produced in August and September of 2012 that included sexually explicit photos and a video. According to the trial evidence, investigators also found hundreds of images and videos depicting children engaged in sex acts with adults.
Furman has two prior Minnesota state court convictions for engaging in sex acts with minors. In December 1981, Furman pleaded guilty to sexually abusing a five-year-old girl who was in his care. In January 1999, Furman was convicted after a bench trial of sexually abusing a 10-year-old girl in his care. As a result, he was required to register as a sex offender until 2021.
This case was investigated by the Minnesota BCA, which leads the Minnesota Internet Crimes Against Children (ICAC) Task Force, and the Minneapolis Police Department, which is a member of the FBI Child Exploitation Task Force. The case is being prosecuted by Assistant U.S. Attorney Melinda A. Williams of the District of Minnesota and Assistant Deputy Chief Alexandra R. Gelber of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Potter County Man Indicted for Distribution of Prescription Opiates and HeroinRead the Press Release
WILLIAMSPORT – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Williamsport returned a four-count Indictment charging a Galeton, Pennsylvania man with conspiracy to distribute, distribution, and attempted distribution of the prescription drugs, Oxycodone and Fentanyl, and heroin in Potter and Tioga Counties.
According to United States Attorney Peter Smith, on October 22, 2015, the grand jury charged David Piaquadio, age 58, Galeton, Pennsylvania, with distribution of Oxycodone pills and Fentanyl patches prescribed for him and other persons and covered by Medicaid and Medicare benefits. The Indictment also charges him with conspiracy to distribute and attempted distribution of those substances, as well as distribution of heroin purchased in Williamsport with the proceeds from illegal sales of the prescription drugs.
The federal investigation was conducted by the Office of Inspector General, U.S. Department of Health and Human Services and the Pennsylvania State Police. Assistant United States Attorney George J. Rocktashel has been assigned for prosecution.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the sentencing judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 40 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the sentencing judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Plantation Resident Sentenced to More Than 9 Years in Prison for Identity Theft Scheme Involving Income Tax, Unemployment, and Credit Card FraudRead the Press Release
A Plantation resident was sentenced today to 111 months in prison, followed by three years of supervised release for his participation in a scheme utilizing stolen identities to commit income tax, unemployment, and credit card fraud. A restitution hearing is scheduled for January 5, 2016.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations Miami Office (DOL-OIG), Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, and John E. Brooks, Chief, Sunrise Police Department, made the announcement.
Leonce V. Jeudy, 25, previously pled guilty to one count of possession with intent to distribute controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), two counts of access device fraud, in violation of Title 18, United States Code, Sections 1029(a)(2) and 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
According to court documents, on January 7, 2015, a detective with the Sunrise Police Department initiated a traffic stop of a vehicle driven by Jeudy. After smelling the odor of marijuana emanating from the vehicle, the detective conducted a search of the car and found a loaded handgun, ammunition, approximately twenty credit cards in various names, new iPhones and iPads, bank records of an unrelated individual, and receipts of four Visa debit cards purchased earlier that day for approximately $2,000.
Police officers obtained a state search warrant for Jeudy’s residence. During the execution of the warrant, officers found more than 100 credit and debit cards in the names of various individuals, numerous documents with the personally identifying information (“PII”) of different individuals, along with various electronic devices including numerous computers, thumb drives, and cellular telephones. The officers also recovered from an AK-47 rifle, hundreds of rounds of different caliber ammunition, butylone, ethylone (commonly known as “Mollys”), several smaller packages of powder and crack cocaine, and other drug paraphernalia.
Subsequent forensic analysis by federal law enforcement of the recovered digital devices revealed more than 8,000 sets of PII. In addition, an analysis revealed that some of the recovered debit cards had received approximately $30,000 in fraudulent income tax refunds and were associated with fraudulent unemployment insurance claims. Law enforcement determined that Jeudy was responsible for filing unemployment insurance benefits claims totaling $100,000.
Mr. Ferrer commended the investigative efforts of IRS-CI, DOL-OIG, USSS, and the Sunrise Police Department. The case was prosecuted by Assistant U.S. Attorney Jonathan Kobrinski.
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.
Philadelphia Woman Charged with Receiving Benefits Intended for Her Dead MotherRead the Press Release
PHILADELPHIA - Beverly Smyre, 72, of Philadelphia, Pennsylvania, was charged by Information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, Smyre’s mother died in November 1989 but Smyre received the Social Security benefits intended for her mother until August 2015 when the fraud was discovered. The defendant’s alleged actions resulted in a loss to the government of approximately $111,273.10.
If convicted, Smyre faces a substantial period of incarceration, a three‑year period of supervised release, restitution to the government of $111,273.10, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by the Social Security Administration Office of Inspector General and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pepper Pike woman sentenced to seven years in prison for stealing identities, filing false taxesRead the Press Release
A Pepper Pike woman was sentenced to seven years in prison for an identity-theft scheme in which she attempted to claim nearly $550,000 in fraudulent tax refunds, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Ghana Johnson, 46, was previously found guilty to one count of wire fraud, five counts of filing false claims for income tax refunds and five counts of aggravated identity theft. She was ordered to pay $357,119 in restitution.
"This defendant stole identities from unsuspecting people and then tried to get rich off of taxpayers," Dettelbach said.
“Investigating refund fraud and identity theft is a priority for IRS Criminal Investigation,” Enstrom said. “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers.”
Johnson electronically filed 106 false, fictitious, and fraudulent tax returns for tax years 2010 and 2011 — in her own name and others’ — claiming a nearly $550,000 in tax refunds. Johnson requested that these false income tax refunds be paid by direct deposit to prepaid debit cards, according to court documents.
Johnson used stolen means of identification, including names and Social Security numbers, to execute her scheme. She obtained these means of identification in a variety of ways, including from stolen admission records from a medical and dental assistant school in Cleveland, according to court documents.
Johnson held herself out to be an income tax preparer to family, friends, and others; even though Johnson did not list herself as an income tax preparer on any of the fraudulent income tax returns she filed in the names of others. She falsified wage income, federal income tax withholdings, dependents, exemptions, and tax credit information in order to obtain income tax refunds for which neither Johnson nor the individuals she prepared the income tax returns for were entitled to receive. Many of the fraudulent income tax returns filed by Johnson shared common characteristics, including addresses, employers, wages, federal income tax withholdings, and tax credits, according to court documents.
The Internal Revenue Service, Criminal Investigation Unit, in Cleveland, Ohio conducted the investigation. The case is being prosecuted by Assistant United States Attorney Miranda E. Dugi.
Project Safe ChildhoodRead the Press Release
CONCORD, NEW HAMPSHIRE: Andy Pena, 21, and Hansel German, 25, of Boston, Massachusetts, appeared in United States District Court on Thursday and pled guilty to crimes involving the transportation of a minor in interstate commerce for prostitution, announced Acting U.S. Attorney Donald Feith.
In February of 2014, Homeland Security Investigations, Manchester, New Hampshire, and the Salem, New Hampshire Police Department, with the assistance of the Boston Police Department, rescued a minor female who was engaging in prostitution from a Salem hotel room. Upon further investigation, authorities identified multiple individuals who were involved in the scheme to transport the female from Boston, Massachusetts to Salem, New Hampshire for prostitution, including Pena and German.
Both Pena and German are scheduled to be sentenced in January 2016.
“Exploiting a minor to engage in sexual activity for commercial gain is among the most serious crimes we investigate and prosecute,” stated Acting U.S. Attorney Donald Feith. “This case demonstrates that when federal, state, and local law enforcement join together to address this crime, significant results can be achieved.”
The case was investigated by the Manchester, New Hampshire Homeland Security Investigations and the Salem Police Department, in conjunction with the police departments of Boston, Massachusetts and Manchester, New Hampshire, as well as the New Hampshire Internet Crimes Against Children Task Force (NH ICAC). This case is being prosecuted by Assistant United States Attorneys Nick Abramson and Helen Fitzgibbon.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Project Safe ChildhoodRead the Press Release
CONCORD, NEW HAMPSHIRE - Jeffrey Leblanc, 28, of North Hampton, New Hampshire, was sentenced on Thursday in United States District Court for the District of New Hampshire on one count of possessing child pornography, announced Acting United States Attorney Donald Feith. The Court imposed a term of 32 months’ imprisonment and five years of supervised release.
On August 26, 2014, a search warrant was executed at Leblanc’s residence in North Hampton, New Hampshire. A computer was seized, which was later found to contain dozens of videos of child pornography. During a subsequent interview, Leblanc admitted that he had downloaded child pornography to his personal computer.
The case was investigated by the Hampton Police Department, in conjunction with Homeland Security Investigations (Manchester), the New Hampshire Internet Crimes Against Children Task Force (NH ICAC), and the Salem Police Department. The case was prosecuted by Assistant United States Attorney Nick Abramson.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Owner of Virginia Beach Tourist Attractions Guilty of Tax EvasionRead the Press Release
NORFOLK, Va. – David A. Parker, 49, of Virginia Beach, pleaded guilty today to evading income tax assessment and payment.
Parker is the owner of Rudee Inlet Jet Skis and Adventure Parasail, Inc. – two companies that are in the business of providing jet ski rentals and parasailing tours at the Virginia Beach oceanfront to tourists and residents. During the relevant timeframe, Parker was also a partner in Duck Parasail, Inc., located in Duck, North Carolina, which provided similar services. In a statement of facts filed with the plea agreement, Parker admitted that from 2005 until 2011, he completely failed to file individual federal income tax returns and, also declined to file business income tax returns after 2007. For several years, Parker ignored attempts by the Internal Revenue Service to recoup his tax balance. In February 2012, an IRS Revenue Officer – again attempting to recover Parker’s outstanding tax balance – interviewed Parker about his failure to file individual income tax returns and his current finances. Parker failed to disclose all of his assets to the officer and maintained that he had little money, thus could not pay his tax balance. In the weeks after his meeting with the revenue officer, and rather than repay any portion of his tax balance, Parker traveled to casinos in Florida and Atlantic City, where he purchased nearly $50,000 in chips. The combined tax due and owing resulting from Parker’s failure to file individual and business income tax returns for tax years 2005 through 2011 is over $1 million.
Parker faces a maximum penalty of five years in prison when sentenced on March 4, 2016. 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; and Thomas Jankowski, Special Agent in Charge, Washington D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the plea was accepted by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15cr113.
###
Owings Mills Woman Posing as a Tax Preparer Sentenced to 4 Years in Prison for Tax and Visa FraudRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Karen Kimble, a/k/a “Karen Kimble-Mamah” and “Karen Mamah,” age 40, of Owings Mills, Maryland, to four years in prison followed by three years of supervised release for six counts of wire fraud, five counts of subscribing to a false tax return, five counts of aiding in the filing of a false tax return, four counts of aggravated identity theft and visa fraud. Judge Quarles also entered an order that Kimble pay $84,411 in restitution to the IRS and $26,419.92 in restitution to the State of Maryland.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and District Director Gregory Collett of the U.S. Citizenship and Immigration Services (USCIS), Baltimore District Office.
According to evidence presented to the court during the two day trial, Kimble falsely held herself out to others as a tax preparer with the skill and knowledge to prepare tax returns for others. From 2007 to 2012, Kimble falsely inflated credits and deductions on her personal and client tax returns in order to fraudulently increase the tax refund. Kimble increased the mortgage interest deduction on her and her alleged husband’s tax returns, often nearly doubling the amount she could properly claim, claimed education credits where she had not incurred expenses and invented tens of thousands of dollars in unreimbursed job expenses, when she had none.
Kimble provided some of her clients with a tax return that did not reflect the false deductions and credits, nor did she inform these clients of the fraudulent deductions/credits. She filed these fraudulent returns using their personally identifiable information. Kimble directed that the tax refunds be mailed or directly deposited to her, or that some of the refund was to be sent to the taxpayer and some to Kimble. On other occasions, Kimble prepared tax returns for friends, and without their knowledge, falsely inflated the deductions to obtain a larger refund, which she passed directly on to her friends.
The fraud loss related to the scheme totals $181,786 in fraudulent federal and state tax refunds, none of which she reported as income on her own tax returns. After accounting for the allowable, legitimate refunds for each victim, the amount owed to the IRS is $84,411 and the amount owed to the State of Maryland is $26,419.92.
Additionally, on February 14, 2008, Kimble married a Ghanian citizen, knowing that the marriage was not valid because the Ghanian was not legally divorced from his first wife. Kimble prepared and filed false documents in state court and with the USCIS, purporting to show that the Ghanian citizen had divorced before she married him.
United States Attorney Rod J. Rosenstein praised HSI Baltimore, IRS-Criminal Investigation and the USCIS Baltimore District Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kathleen O. Gavin, who prosecuted the case.
Oklahoma Man Pleads Guilty to Conspiring to Distribute Synthetic Drugs and Launder MoneyRead the Press Release
A synthetic drug wholesaler from Oklahoma pled guilty on October 20, 2015, in federal court in Cedar Rapids.
Ahmad Saeed, age 48, from Broken Arrow, Oklahoma, was convicted of conspiring to distribute controlled substances and conspiring to launder drug money.
In a plea agreement, Saeed admitted that between at least 2012 and continuing through at least June 2013, he acted as a wholesaler distributing synthetic drugs to convenience stores in Oklahoma, Iowa, and Missouri. Saeed admitted he was supplied by regional drug suppliers in various locations, including suppliers in Kansas City, Missouri. He also admitted that the packaging for the synthetic drug products he sold to the convenience stores bore some form of statement that the product was “not for human consumption.” Despite the statements on the packaging, Saeed admitted he knew the synthetic drug products were for human consumption and that he actually intended the products to be consumed.
Saeed also obtained purported laboratory reports from his suppliers and provided them to his customers. The reports claimed the synthetic drug products did not contain certain drugs listed in the federal drug schedules. The drug lists on the reports were not comprehensive, and did not state what substance was allegedly in the supposedly tested product. Saeed admitted he used these reports as a means to make it appear he was complying with federal drug laws, although he knew his conduct did not comply with those laws.
He also admitted that the store owners, including Chaudhry, often paid for the synthetic drug products by check. Saeed admitted Chaudhry, or his representative, would leave the check’s “Pay to the order of” line blank, and the “memo” line would state “Loan.” Saeed admitted that these transactions were designed to conceal the fact that the transactions were drug transactions.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Saeed was taken into custody by the United States Marshal after the guilty plea and will remain in custody pending sentencing. Saeed faces a possible maximum sentence of 40 years’ imprisonment, a $1,500,000 in fines, $200 in special assessments, and a lifetime of supervised release following any imprisonment.
The case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration (DEA) Task Force consisting of the DEA, the Linn County Sheriff's Office, the Cedar Rapids Police Department, the Marion Police Department, the Iowa Division of Narcotics Enforcement, and the Sixth Judicial District Department of Correctional Services; the Tri-County Drug Enforcement Task Force; the Federal Bureau of Investigation; the Department of Homeland Security; and the Iowa Division of Criminal Investigation, Intelligence Division, and was prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR15-2005-LRR.
Follow us on Twitter @USAO_NDIA.
Oklahoma City Man Sentenced to 87 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that JONATHAN MIRANDA, age 19, of Oklahoma City, Oklahoma, was sentenced to 87 months imprisonment, followed by 3 years of supervised release for Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration. The defendant was indicted in April, 2015.
The Superseding Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendant, did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Oklahoma City Man Sentenced to 151 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that GILBERT ESPINOZA a/k/a "Snow", age 32, of Oklahoma City, Oklahoma, was sentenced to 151 months imprisonment, followed by 5 years of supervised release for Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration. The defendant was indicted in April, 2015.
The Superseding Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendant, did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Ohio man sentenced to nearly 11 years for traveling to engage in unlawful sexual conduct with minor victimRead the Press Release
CLARKSBURG, WEST VIRGINIA – Patrick W. Ganim, 30, of, Chagrin Falls, Ohio, was sentenced today to 130 months in prison for traveling across state lines to engage in illicit sexual conduct with a minor female, United States Attorney William J. Ihlenfeld, II, announced.
Ganim communicated with a minor female residing in the Northern District of West Virginia utilizing a variety of internet resources and online messaging tools. In October 2014, Ganim traveled across state lines from Ohio into West Virginia. He then engaged in illicit sexual conduct with the victim. Following their initial meeting, Ganim continued to utilize online messaging services to communicate with the minor victim, planning a subsequent meeting and sending explicit material to the victim. He pled guilty in June 2015 to one count of “Travel with Intent to Engage in Illicit Sexual Conduct.”
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The Preston County Sheriff’s Office, the Bainbridge Township, Ohio Police Department, and the Federal Bureau of Investigation led the inquiry.
U.S. District Judge Irene M. Keeley presided.
OCDETF Training for Law Enforcement Sponsored by the U.S. Attorney’s OfficeRead the Press Release
U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands (NMI), announced that the Regional Organized Crime Drug Enforcement Task Force (OCDETF) coordinators from the Pacific Region made their annual visit to Guam and the NMI and provided OCDETF training to law enforcement partners. The training was conducted by Thomas Colthurst, OCDETF Regional Director, Steve Jensen, OCDETF Regional Coordinator from the Internal Revenue Service-Criminal Investigation (IRS-CI), and Deborah Wee, OCDETF Regional Coordinator from the Federal Bureau of Investigation (FBI). The training was held at the U.S. Attorney’s Office in Guam on March 11, 2015, from 2:00 p.m. to 5:00 p.m. and was attended by approximately 30 local and federal law enforcement officers.
The training topics included Money Laundering and Financial Analysis, OCDETF Airport Security Initiative, and Searches and Seizure.
The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General's drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises.
OCDETF investigations involve a focused multi-agency, multi-jurisdictional task force that investigates and prosecutes the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
An OCDETF investigation involves federal agents and local law enforcement officers of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Drug Enforcement Administration (DEA), the FBI, the IRS-CI, the U.S. Coast Guard Criminal Investigative Service (CGIS), the U.S. Department of Homeland Security Investigations (HSI), the U.S. National Oceanic Atmosphere Administration (NOAA), the U.S. Marshal’s Service, the U.S. Postal Inspection Service (USPIS), the Guam Police Department (GPD) and Guam Customs and Quarantine Agency (GCQA), and other law enforcement partners.
New Haven-Area Men Charged with Distributing Heroin and CrackRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on October 20, 2015, a federal grand jury in New Haven returned a superseding indictment charging the following individuals with federal narcotics offenses:
SHAWN MILLER, aka “White Boy Shawn,” 31, of Hamden
PAUL COLON, aka “Paul Cane,” 27, of West Haven
ROBBIE SMITH, aka “Lil Rob,” 27, of New Haven
SEAN LONDON, 22, of New Haven
ROBERT OATHOUT, 35, of Branford
JASON LANGLEY, 40, of East Haven
HARRY ANASTASIO, 54, of East Haven
ANTONIO DELUCIA, 27, of WallingfordThis investigation is being conducted by the FBI’s New Haven Safe Streets Task Force, in cooperation with the Drug Enforcement Administration and the New Haven, West Haven, Milford, Hamden and other local police departments, and the Connecticut Department of Correction. As alleged in court documents and statements made in court, the investigation focused on a heroin and crack distribution ring operating in the greater New Haven area, and headed by MILLER and COLON. The investigation revealed that members of the ring took orders over a cellular telephone from drug customers in several shoreline communities for quantities of heroin and crack cocaine, and then delivered the drugs by car. During the course of the investigation, agents and officers of the Task Force employed a variety of techniques, including debriefings of informants, physical surveillance, supervised purchases of heroin and crack, a court-authorized wiretap and the execution of federal search warrants.
On June 24, 2015, a grand jury returned an indictment charging SMITH and LONDON with conspiring to distribute and to possess with intent to distribute heroin and cocaine base (“crack”), and LONDON with possession with intent to distribute and distribution of controlled substances. The indictment also charged DELUCIA, ANASTASIO, LANGLEY, and OATHOUT, all of whom are alleged to be drug customers of the conspiracy, each with two counts of using a telephone to facilitate a narcotics trafficking felony. The 11-count superseding indictment adds charges against MILLER and COLON, and alleges that between November 2014 and May 2015, MILLER, COLON, SMITH, and LONDON conspired to distribute heroin and crack cocaine. The superseding indictment also charges MILLER with possession with intent to distribute and distribution of crack cocaine.
If convicted, MILLER and COLON face a mandatory minimum term of imprisonment of 10 years of imprisonment and a maximum term of life imprisonment on the conspiracy charge. MILLER also faces up to 20 years in prison on the distribution charge. LONDON faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years on the conspiracy charge, and a maximum term of imprisonment of 20 years on the distribution charge. SMITH faces a maximum term of imprisonment of 20 years on the conspiracy charge. OATHOUT, ANASTASIO, LANGLEY, and DELUCIA each face a maximum term of imprisonment of four years on each count of using a telephone to facilitate a narcotics trafficking felony.
MILLER was arrested yesterday and is released on bond. COLON is in state custody on an unrelated charge.
The original indictment also charged Jeffrey Smith, aka “J-Money,” 21, of New Haven, with various offenses. On September 21, 2015, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute heroin and cocaine base, and is awaiting sentencing.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being prosecuted by Assistant U.S. Attorneys H. Gordon Hall and Jennifer R. Laraia.
Nevada Man Sentenced to over 12 Years in Federal Prison for Running Ponzi Scheme involving E-mini S&P FuturesRead the Press Release
LOS ANGELES – The architect of a fraudulent investment scheme that caused scores of victims to suffer losses of nearly $10 million was sentenced today to 151 months in federal prison for running a Ponzi scheme and lying to the Securities and Exchange Commission.
Gordon Driver, 58, of Henderson, Nevada, was sentenced today by United States District Judge John A. Kronstadt.
In addition to the prison term, Judge Kronstadt ordered Driver to pay $9,681,289 in restitution to victims of his scheme.
Driver pleaded guilty in April to two felony counts – wire fraud and making a false statement to SEC, which was investigating his fraudulent operation.
In his plea agreement filed earlier this year, Driver admitted that he falsely told victims that he was producing profits of 1 percent to 5 percent a week through a commodity futures trading program involving E-mini S&P 500 futures contracts. Driver also told victims that he had never sustained a monthly net loss as a result of his trading.
In reality, Driver’s trading activity over the course of his three-year scheme was overwhelmingly unprofitable, causing him to lose nearly almost all the money that he used to trade commodities.
Investigators have calculated that Driver took in nearly $17.4 million from approximately 150 victims, including several in Ventura, Orange and Los Angeles counties. Prosecutors successfully argued in court today that 88 victims collectively lost nearly $10 million as a result of the scheme. Some of the investors were made whole or actually made “profits” during the course of the Ponzi scheme when Driver used money from other investors – and not from profits – to pay off some people. For example, in court papers, prosecutors wrote that “for 8 solid months between June 2008 and mid-March 2009, Driver engaged in no futures trading whatsoever, yet took in $4.5 million over 55 separate deposits from his investors, and paid out $4.4 million in fictitious profits.”
During the course of the scheme, Driver “was the largest ‘winner’ by far: he spent $2.1 million on himself and his family, including buying three brand new cars and taking out $471,000 in cash,” according to a sentencing memo filed with the court.
“Investment fraud schemes like this one rob individuals and families of their livelihood and their retirements, and the significant sentence imposed today accounts for the harm caused by the defendant’s scheme,” said United States Attorney Eileen M. Decker. “This case is a reminder that investors should be wary of lofty promises from investments.”
Driver solicited investments through Nevada-based companies with names like Axcess Automation LLC, which was under investigation by the Securities and Exchange Commission in 2009 when Driver testified under oath. During this testimony, which was given under penalty of perjury, Driver said that he did not have a monthly negative return during the second half of 2007 – a statement which was false and which forms the basis of the second charge to which he pleaded guilty.
In the sentencing memo, prosecutors called Driver “a liar and a continuing economic danger to the community, who must be incarcerated for a lengthy period of time to keep him away from the investing public.”
Investigators said in court documents that Driver is currently “deceptively” marketing a $25,000 commodities trading software package for E-mini S&P 500 futures contracts through a company called Avenge LLC that uses a website (www.avengesoftware.com), radio podcasts and social media. According to investigators, the website and other internet marketing materials for the current venture do not disclose that Driver runs the company.
Furthermore, prosecutors said Driver failed to disclose to Avenge customers that he was facing a lengthy prison term and, by his own admission in court papers, that his “business will cease to exist if he is sentenced to a custodial sentence.”
The criminal case against Driver is the result of a joint investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service, both of which received assistance from the Commodities Futures Trading Commission, the SEC, the Attorney General of Ontario (Canada), and the Ontario Securities Commission.
Midland Man Pleads Guilty to Role in Methamphetamine Intoxication DeathRead the Press Release
In Midland, 22–year-old Zane Paul O’Neal faces an agreed sentence of 23 years in federal prison after pleading guilty this afternoon to his role in the death of Sandy Brooke Franklin earlier this year announced United States Attorney Richard L. Durbin, Jr., and Drug Enforcement Administration (DEA) Special Agent in Charge Will Glaspy, El Paso Division.
According to court records, on July 29, 2015, Sandy Brooke Franklin began exhibiting signs of illness while being held in the Midland County Jail. She informed the jail staff that she had previously concealed a quantity of methamphetamine prior to arriving at the facility and had subsequently swallowed the methamphetamine. Franklin was taken by jail staff to Midland Memorial Hospital where she later died.
On July 27, 2015, Franklin, who had an outstanding warrant for her arrest, was taken into custody following a traffic stop on a vehicle being driven by the defendant, O’Neal. Further investigation revealed that O’Neal was a methamphetamine supplier in the Midland area. By pleading guilty, O’Neal admitted to providing approximately three grams of methamphetamine to Franklin so she could hide it from law enforcement during the traffic stop. O’Neal further admitted that several hours after Franklin’s arrest, she called him and told him that she had “eaten” the methamphetamine. A recorded jail phone call from Franklin to O’Neal confirmed that O’Neal provided the methamphetamine to Franklin and directed her to ingest it. O’Neal, admittedly, did not notify anyone of Franklin’s condition.
O’Neal remains in federal custody awaiting sentencing. A sentencing date has yet to be scheduled.
This case was investigated by the DEA, the Midland Police Department and the Midland County Sheriff’s Office. Assistant U.S. Attorney Brandi Young is prosecuting this case on behalf of the Government.
Mexican Man Sentenced to 30 Years in Federal Drug Case in Kansas City, Kan.Read the Press Release
TOPEKA, KAN. - A Mexican citizen who entered the United States illegally was sentenced Wednesday to 30 years in federal prison for drug trafficking in Kansas City, Kan., U.S. Attorney Barry Grissom said.
Mario Saucedo-Avalos, 40, pleaded guilty to one count of conspiracy to distribute methamphetamine. In his plea, he admitted that beginning in January 2014 he was part of an organization trafficking methamphetamine in the Kansas City metro area.
On March 21, 2014, investigators watched as Saucedo-Avalos arrived at a meeting with an undercover buyer. Saucedo-Avalos was driving a white Cadillac Escalade and the meeting took place in the parking lot at a Lowe’s store in Roeland Park. Saucedo-Avalos sold the buyer methamphetamine from a cardboard box containing several pounds of methamphetamine. Four months later, on July 22, 2014, Saucedo-Avalos sold an undercover buyer half a pound of methamphetamine during a meeting in a parking lot at a Lowe’s store in Kansas City, Kansas. On August 14, 2014, Saucedo-Avalos’s drug trafficking organization delivered thirteen pounds of methamphetamine to a Kansas City, Kansas barber shop. The methamphetamine was seized by law enforcement. Investigators also seized money transfer receipts from two of Saucedo-Avalos’s drug residences which proved that Saucedo-Avalos had transferred thousands of dollars to Mexico to pay for drug shipments sent to the United States in furtherance of the drug trafficking conspiracy.
Grissom commended the Federal Bureau of Investigation, Assistant U.S. Attorney Sheri McCracken, and Special Assistant U.S. Attorney James Ward for their work on the case.
Men from Colorado Springs and Nevada Indicted for Multi-Million Dollar Investment Fraud SchemeRead the Press Release
DENVER – Two men, one from Colorado Springs, and the other from Nevada, have been indicted by a federal grand jury in Denver on investment fraud related charges, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. The two men, Daniel Coddington, age 59, of Colorado Springs, and Jesse Erwin, age 48, of Nevada, appeared before a U.S. Magistrate Judge earlier this week, where they were read their rights and advised of the charges pending against them.
According to the indictment, from at least early 2010 through late 2011, Coddington held himself out to investors and intermediaries to be the principal and owner of a company called Golden Summit Investors Group Ltd. (“Golden Summit”). He operated Golden Summit from Colorado Springs, Colorado. From at least early 2010 through late 2011, Erwin held himself out to investors and intermediaries to be the attorney and general counsel for Golden Summit.
From at least early 2010 through at least late 2011, the defendants described to investors and intermediaries a program through which investor money would be used to purchase collateralized mortgage obligations or CMOs -- an investment consisting of a pool of mortgages organized by maturity and risk. They told investors that the CMOs had face values exponentially larger than their purchase price and market value. According to defendants, the CMOs would then be “hypothecated” to obtain loans in the amount of a percentage of the face value of the CMO. The amount of these loans would still be exponentially larger than the purchase price and market value of the CMOs (known as the “CMO Trade Program”).
Coddington and Erwin told most of the investors that, from the proceeds of the loans, the investors would receive pre-trade distributions and that the remainder of the loan proceeds would be placed into an investment program that would yield high returns. From at least 2010 through late 2011, both defendants described to investors and intermediaries that investors who owned CMOs could transfer their CMOs to Golden Summit for the purpose of participating in the CMO Trade Program.
In approximately April 2011, the defendants told an investor, who ultimately invested $9,000,000 dollars with Golden Summit that $60,000,000 of the loan proceeds obtained from “monetizing” the CMOs purchased with the investor’s money would be provided to the investor in the form of two non-recourse loans in the amount of $30,000,000 each (known as the “CMO Loan Program”).
From at least 2010 through late 2011, defendant Coddington falsely represented to investors and intermediaries that he had the experience and contacts necessary to successfully conduct and complete the CMO Trade Program and the CMO Loan Program. Further, from at least 2010 through at least mid-2011, Coddington and Erwin falsely told investors and intermediaries that all of the money provided by investors would be used to purchase CMOs that would be used in the CMO Trade Program and the CMO Loan Program. They also falsely told investors and intermediaries that any fees, commissions, compensation, and payments to Golden Summit and its affiliates would be taken only from the profits of the CMO Trade Program and CMO Loan Program and not from investor money placed into the CMO Trade Program and CMO Loan Program.
During that same time, the defendants falsely represented that, once investor money was received into an account controlled by defendants, all of the stages of the CMO Trade Program would be accomplished quickly and investors would receive their pre-trade distribution within weeks of their investment followed shortly thereafter by the returns on their investments. In or about April 2011, Coddington and Erwin falsely represented to the investor in the CMO Loan Program that, once the that investor’s money was received into an account controlled by defendants, the purchase of the CMOs would occur in approximately one banking day. Defendants further falsely represented to that investor that the funding process for the loan on the CMOs would take approximately three banking days from the time the CMOs were obtained.
From at least November of 2010 through at least June of 2011, the defendants diverted substantial amounts of investor money placed into the CMO Trade Program and the CMO Loan Program for their own personal use and for purposes other than for purchasing CMOs. Further, the defendants did not successfully “hypothecate” or “monetize” any CMOs to obtain loans for either the CMO Trade Program or the CMO Loan Program.
From at least October 2010 through April of 2011, Coddington and Erwin obtained from investors more than $17,000,000 for the CMO Trade Program and the CMO Loan Program. Despite their failure to successfully complete either the CMO Trade Program or the CMO Loan Program, the defendants did not return most of the investors’ money or any CMO purchased with the investors’ money.
From at least early 2010 through late 2011, the defendants also received CMOs from several investors for purposes of participating in the CMO Trade Program. Coddington kept most of the monthly interest that was paid out on those CMOs while the CMOs were in his and Golden Summit’s possession. For purposes of executing the Scheme, the defendants used, and caused to be used, a number of interstate wires, including emails and money transfers.
Coddington and Erwin both face 13 counts of wire fraud and 2 counts of security fraud. Each wire fraud count charged carries a penalty of not more than 20 years in federal prison, and up to a $250,000 fine. Each securities fraud count charged carries a penalty of not more than 20 years in federal prison, and up to a $5,000,000 fine. The court could also order both defendants to pay restitution to the investment fraud victims.
“These defendants stole millions of dollars from investors,” said U.S. Attorney John Walsh. “Thanks to the hard work of the prosecution and the FBI team that unraveled this scheme, these defendants will now face harsh consequences for that greed.”
“The FBI is committed to investigating complex financial crimes to include investment fraud, especially when someone misuses a position of trust to exploit innocent investors.” said FBI Denver Division Special Agent in Charge Thomas Ravenelle. “The defendants abused their positions, preyed on unknowing victims, and will now face the consequences of their actions.”
This case was investigated by the Federal Bureau of Investigation (FBI).
The defendants are being prosecuted by Assistant U.S. Attorney Pegeen Rhyne.
The charges contained in the Indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
McAlester Man Sentenced to 269 Months for Irish Mob Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that DAVID DEAN CAGLE, age 33, of McAlester, Oklahoma was sentenced to 269 months imprisonment, followed by 5 years of supervised release for Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration and coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the United States Attorney’s Office.
The Investigation revealed that while incarcerated from May 29, 2008, until the date of his indictment, in April, 2015, CAGLE, a member of a criminal gang known as the Irish Mob, was the head of a Drug Trafficking Organization operating from within the Oklahoma State Penitentiary in McAlester, Oklahoma. While incarcerated, the defendant used his connections within the Irish Mob to obtain cell phones, and would then coordinate the acquisition of approximately 14.5 kilograms of methamphetamine which was ultimately distributed to others outside of the prison system.
The Superseding Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendants did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Mark Douglas Helton Pleads Guilty Child Pornography OffensesRead the Press Release
KNOXVILLE, Tenn. – On Oct. 20, 2015, Mark Douglas Helton, 61, of Maryville, Tenn., pleaded guilty in U.S. District Court for the Eastern District of Tennessee, to knowingly distributing and receiving child pornography. Sentencing has been set for 2:00 p.m., March 9, 2016.
Helton faces a maximum of up to 40 years in prison, as well as supervised release following incarceration, restitution, and fines. Pursuant to his plea agreement, Helton admitted to distributing and receiving child pornography via the Internet with peer-to-peer computer software. Helton also admitted to possessing in excess of 600 images of child pornography, including images of sadistic or masochistic conduct or other depictions of violence involving minors.
This investigation was conducted by the Knoxville Police Department’s Internet Crimes Against Children Task Force, with assistance from the Federal Bureau of Investigation and the U.S. Homeland Security Investigations. Assistant U.S. Attorney Matthew Morris represented the United States.
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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
###
Lumber Liquidators Inc. Pleads Guilty to Environmental Crimes and Agrees to Pay More Than $13 Million in Fines, Forfeiture and Community Service PaymentsRead the Press Release
Virginia-based hardwood flooring retailer Lumber Liquidators Inc. pleaded guilty today in federal court in Norfolk, Virginia, to environmental crimes related to its illegal importation of hardwood flooring, much of which was manufactured in China from timber that had been illegally logged in far eastern Russia, in the habitat of the last remaining Siberian tigers and Amur leopards in the world, announced the Department of Justice.
Lumber Liquidators was charged earlier this month in the Eastern District of Virginia with one felony count of importing goods through false statements and four misdemeanor violations of the Lacey Act, which makes it a crime to import timber that was taken in violation of the laws of a foreign country and to transport falsely-labeled timber across international borders into the United States. The charges describe Lumber Liquidators’ use of timber that was illegally logged in Far East Russia, as well as false statements on Lacey Act declarations which obfuscated the true species and source of the timber. This is the first felony conviction related to the import or use of illegal timber and the largest criminal fine ever under the Lacey Act.
“Lumber Liquidators’ race to profit resulted in the plundering of forests and wildlife habitat that, if continued, could spell the end of the Siberian tiger,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “Lumber Liquidators knew it had a duty to follow the law, and instead it flouted the letter and spirit of the Lacey Act, ignoring its own red flags that its products likely came from illegally harvested timber, all at the expense of law abiding competitors. Under this plea agreement, Lumber Liquidators will pay a multi-million dollar penalty, forfeit millions in assets, and must adhere to a rigorous compliance program. We hope this sends a strong message that we will not tolerate such abuses of U.S. laws that protect and preserve the world’s endangered plant and animal species.”
“This prosecution has been the result of hard work of federal agents and prosecutors who have been dedicated to protecting our natural habitats in the United States and around the world,” said U.S. Attorney Dana Boente of the Eastern District of Virginia.
“Companies knowingly accepting illegally sourced materials need to recognize there are far-reaching consequences to their actions,” said Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C. “In this case, in addition to violating U.S. customs law, Lumber Liquidators contributed to the potential eradication of an endangered species simply to increase profit margins.”
“This multi-agency investigation highlights the importance the U.S. Government places on protecting tree species around the world from unlawful import, export and trade, and the effectiveness of the Lacey Act in implementing those protections,” said Deputy Assistant Director Ed Grace of the U.S. Fish and Wildlife Service’s (USFWS) Office of Law Enforcement. “Thanks to this intergovernmental team, the habitat of the last remaining Siberian tigers and Amur leopards will no longer be threatened by the activities of this company. This case and today’s plea deal demonstrate that those engaged in the commercialization of illegal timber imported into the United States will be caught and held accountable.”
According to a joint statement of facts filed with the court, from 2010 to 2013, Lumber Liquidators repeatedly failed to follow its own internal procedures and failed to take action on self-identified “red flags.” Those red flags included imports from high risk countries, imports of high risk species, imports from suppliers who were unable to provide documentation of legal harvest and imports from suppliers who provided false information about their products. Despite internal warnings of risk and non-compliance, very little changed at Lumber Liquidators.
For example, Lumber Liquidators employees were aware that timber from the Russian Far East was considered, within the flooring industry and within Lumber Liquidators, to carry a high risk of being illegally sourced due to corruption and illegal harvesting in that remote region. Despite the risk of illegality, Lumber Liquidators increased its purchases from Chinese manufacturers using timber sourced in the Russian Far East. In 2013, the defendant imported Russian timber logged under a concession permit that had been utilized so many times that the defendants’ imports alone exceeded the legal harvest allowance of Mongolian oak, Quercus mongolica, by more than 800 percent. The investigation revealed a prevalent practice in timber smuggling enterprises, where a company uses a seemingly legitimate government permit to log trees. Corruption and criminal activity along the supply chain results in the same permit being used multiple times and in areas outside of the designated logging area, sometimes vastly exceeding its legal limits.
On other occasions, Lumber Liquidators falsely reported the species or harvest country of timber when it was imported into the United States. In 2013, Lumber Liquidators imported Mongolian oak from Far East Russia which it declared to be Welsh oak and imported merpauh from Myanmar which it declared to be mahogany from Indonesia.
The illegal cutting of Mongolian oak in far eastern Russia is of particular concern because those forests are home to the last 450 wild Siberian tigers, Panthera tigris altaica. Illegal logging is considered the primary risk to the tigers’ survival, because they are dependent on intact forests for hunting and because Mongolian oak acorns are a chief food source for the tigers’ prey species. Mongolian oak forests are also home to the highly endangered Amur leopard Panthera pardus orientalis, of which fewer than 50 remain in the wild. In June 2014, in response to illegal logging and the decline in tiger populations, Mongolian oak was added to the Convention on the International Trade in Endangered Species (CITES) Appendix III.
Under the plea agreement, Lumber Liquidators will pay $13.15 million, including $7.8 million in criminal fines, $969,175 in criminal forfeiture and more than $1.23 million in community service payments. Lumber Liquidators has also agreed to a five year term of organizational probation and mandatory implementation of a government-approved environmental compliance plan and independent audits. In addition, the company will pay more than $3.15 million in cash through a related civil forfeiture. The more than $13.15 million dollar penalty is the largest financial penalty for timber trafficking under the Lacey Act and one of the largest Lacey Act penalties ever. The company is scheduled to be sentenced on Feb. 1, 2016.
The $1,230,825 in community service payments is being provided to two Congressionally-chartered recipients, the National Fish and Wildlife Foundation (NWFW) and the USFWS Rhinoceros and Tiger Conservation Fund. One project that will be funded is the development of a wood identification device that if successful, could fill a critical gap in enforcement when it comes to identifying the species of timber at a border or in an enforcement scenario. The device would be able to identify timber species that are listed on the CITES Appendices, including the species that were at issue in this case. If U.S. border officials would have had access to such a device in 2011, then perhaps Lumber Liquidators could have been flagged for violation years ago, thus averting the flow of money back to China and Far East Russia in support of illegal logging. Other projects would involve protecting, researching and preserving the Siberian tiger, Amur leopard and their habitat.
The case was jointly investigated by agents of the USFWS and HSI as part of Operation Oakenshield. The case is being prosecuted by Patrick M. Duggan and Christopher L. Hale of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division, and Stephen Haynie and Kevin P. Hudson of the U.S. Attorney’s Office in Norfolk.
Local Chiropractor & Billing Assistant Plead Guilty to Health Care Fraud ChargesRead the Press Release
St. Louis, MO – DR. DONALD HAVEY and SUSAN RENO pled guilty to charges involving a scheme to bill Medicare for expensive ankle-foot orthotics that were never provided to the patients.
According to court documents, Havey owned and operated companies that sold orthotic devices through Spinal Decompression of Chesterfield; Senior Care, Inc.; Advanced Custom Orthotics, Inc.; and Missouri Custom Orthotics. Susan Reno and her company, Pinnacle Billings and Collections, provided billing services for Havey and each of his companies.
Beginning in 2009 and continuing to 2014, Dr. Havey defrauded Medicare, Medicaid, other public and private health insurance companies and patients by submitting false reimbursement claims for custom orthotic boots. The boots actually provided to the patients did not contain the custom features described in the reimbursement claims. Dr. Havey employed chiropractors to market his “Fall Prevention Program” to nursing homes and to sell the orthotic boots in Missouri and other states, including Texas, Alabama, California, Georgia, Illinois, Kentucky, Massachusetts, Mississippi, Oklahoma, Rhode Island and Tennessee. Dr. Havey and the chiropractors employed by him told the nursing homes that the Program would reduce falls by almost 20% and would improve the patients’ quality of life, but deliberately concealed from the nursing homes that the real purpose of the Program was to sell orthotic boots to nursing home patients. Dr. Havey also told the nursing homes that there would be little or no cost to the patients, when he knew that a Medicare patient could be charged as much as $500 if the patient did not have supplemental insurance.
Dr. Havey knew Medicare would scrutinize any company that submitted claims for a large number of very expensive orthotic boots, so he attempted to conceal from Medicare the number of orthotic boots that he and his companies were selling. To accomplish this, Dr. Havey and Susan Reno submitted false claims under several of the companies. As an example, a chiropractor assessed and ordered orthotics for five Medicare patients residing in the same facility on the same day. Dr. Havey and Susan Reno submitted two of the residents’ claims to Medicare using Advanced Custom Orthotics as the supplier and the other three were billed to Medicare using Senior Care Orthotics as the supplier.
Medicare paid Dr. Havey between $2400 and $2600 for each pair of orthotics boots. The loss to Medicare, Medicaid and the private insurance companies was over $2.2 million.
Havey, St. Louis County, MO, pled guilty to one felony count of health care fraud this morning before United States District Judge John A. Ross. Susan Reno, St. Louis County, MO, pled guilty to one misdemeanor count of submitting false reimbursement claims to Medicare before United States Magistrate Judge John Bodenhausen on October 16, 2015. Sentencing for Dr. Havey has been set for January 26, 2016. Susan Reno’s sentencing is set for January 11, 2016.
Felony healthcare fraud carries a maximum penalty of 10 years in prison and/or fines up to $250,000.
This case was investigated by the U.S. Department of Health and Human Services-Office of Inspector General, the Federal Bureau of Investigation and the Missouri Medicaid Fraud Control Unit. Assistant United States Attorney Dorothy McMurtry is handling the case for the U.S. Attorney’s Office.
Local Businessmen Charged with Charity Fraud ConspiracyRead the Press Release
PENSACOLA, FLORIDA – Gary R. Tomey II, 46, of Pace, and Eric T. Eakes, 29, of Milton, were arraigned today in the U.S. District Court in Pensacola after a federal grand jury returned an indictment charging them with conspiracy and mail fraud. The indictment was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
The indictment alleges between December 2008 and May 2012, Tomey and Eakes ran Children and Family Services Inc. (later called Children’s Charitable Services Inc.), a telemarketing company that fraudulently solicited charitable donations via telephone calls from an office in Milton. Tomey and Eakes are alleged to have instructed employees to fraudulently tell potential donors living in other states that the employees were volunteers and that all proceeds helped children in the state where the potential donor lived. The indictment further states that Tomey and Eakes intentionally used a charity name that was similar to a state agency and failed to disclose that their organizations had been previously sanctioned in other states for fraudulent solicitations. The indictment alleges that more than $1.2 million raised as charitable donations went to pay the defendants’ and employees’ salaries, business expenses, and Tomey’s personal expenses. The trial is scheduled for December 7, 2015.
This case resulted from an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Alicia H. Kim is prosecuting the case.
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]Lake Charles man sentenced to more than 19 years in prison for $5.8 million Ponzi schemeRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that a Lake Charles man was sentenced to 235 months in prison for wire fraud in connection with a Ponzi scheme used to defraud investors out of more than $5.8 million.
John Steven Blount, 55, of Lake Charles, was sentenced by U.S. District Judge Patricia Minaldi on one count of wire fraud. He was also sentenced to three years of supervised release and ordered to pay $4.3 million restitution. According to the July 16, 2015 guilty plea, the Financial Industry Regulatory Authority (FINRA) barred Blount from working as an investment adviser in December of 2003. In spite of this prohibition, Blount resumed work illegally as an investment adviser and securities broker from June of 2007 to December of 2014. During that time, he used his company, Professional Consultants LLC, to operate a Ponzi scheme that defrauded at least 73 investors out of approximately $5.8 million. Blount would offer investments in fictitious companies, bonds and IRAs that promised to pay an above-market rate of return. However, instead of investing the money in securities, Blount transferred the payments into his own bank accounts for his personal use and to support his other business interests.
In order to avoid detection and to continue operation of the Ponzi scheme, Blount emailed investors false account statements that purported to show the value of their investments. As necessary, Blount would also provide his victims with monetary payments, which Blount falsely represented to be interest payments or principal withdrawals from the investments. In fact, these “lulling payments” were actually investments Blount received from other victims of the Ponzi scheme. Over the course of the scheme, Blount paid $1,743,198.84 “lulling payments” to investors.
The victims of Blount’s scheme were primarily retirees residing along the Louisiana and Texas Gulf Coast who invested large portions of their retirement savings in Blount’s scheme. Blount recruited his victims through his website, through his own personal and family relationships, and through his involvement in various Lake Charles area charities.
“Through his fraudulent investment operation, Mr. Blount stole the life savings of dozens of retirees,” stated Finley. “Financial crimes are devastating to our citizens, creating lasting effects and hardships. Federal prosecutors along with our federal partners will continue to vigorously prosecute these crimes.”
“John Blount’s sentencing represents a victory for those individuals who were defrauded out of millions of dollars, and in most cases, their life savings,” said Special Agent in Charge Jerome R. McDuffie, IRS – Criminal Investigation. “This victory would not have been possible without the collaboration of law enforcement. Both local and federal law enforcement have represented the citizens of this community well, and IRS - Criminal Investigation is very proud to have been a part of this team of fine investigators. While we realize John Blount’s sentencing and restitution orders will not make the victims in this case whole, we hope that it will aid their peace of mind to know that he will be serving a lengthy prison term for his wrongdoings.”
The FBI and IRS Criminal Investigations investigated the case. Assistant U.S. Attorney David C. Joseph prosecuted the case.
Justice Department Settles Immigration-Related Discrimination Claim Against Miami-Dade County Public SchoolsRead the Press Release
The Justice Department announced today that it reached a settlement with Miami Dade County Public Schools (MDCPS) resolving claims that MDCPS discriminated against employees because of their citizenship status in violation of the Immigration and Nationality Act (INA).
The department’s investigation, conducted by the Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), found that MDCPS required non-U.S. citizens, but not similarly-situated U.S. citizens, to present specific documents to prove their employment eligibility. The INA’s anti-discrimination provision prohibits employers from making specific documentary demands based on citizenship or national origin when verifying an employee’s authorization to work.
“Employers must ensure that their human resources staff understand proper hiring practices,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Promoting compliance is especially important to ensure that workers are not excluded due to discriminatory treatment.”
Under the settlement agreement, MDCPS will pay a $90,000 civil penalty to the United States and will establish a $125,000 back pay fund to compensate individuals who lost wages because of the MDCPS’ practices. Among other things, the settlement also requires MDCPS to undergo compliance monitoring for three years, permit OSC to train MDCPS students on worker rights, and train its human resources employees on the anti-discrimination provision of the INA.
OSC is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation. Trial Attorney Liza Zamd of the Civil Rights Division handled this matter.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship, immigration status or national origin; or discrimination based on their citizenship, immigration status or national origin in hiring, firing, or recruitment or referral for a fee should contact OSC’s worker hotline for assistance.
Miami-Dade County Public Schools Settlement Agreement
Justice Department Seeks to Shut Down Southeast Florida Tax Return Preparers and Owners of “Tax Mon$Ter” and “Tax Pros” Tax Preparation BusinessesRead the Press Release
Businesses Allegedly Prepare Fraudulent Tax Returns While Charging Customers Undisclosed, Unconscionable Fees
The United States filed a civil injunction suit seeking to bar Christopher Lawrence and Kenneth Aikens from owning, operating or franchising a tax return preparation business and from preparing tax returns for others, the Justice Department announced today.
The complaint also asks the court to order Lawrence and Aikens to disgorge the fees that they obtained through the alleged fraudulent tax return preparation. According to the complaint, Lawrence owns and operates Tax Mon$ter and Aikens owns and operates Tax Pros, each of which is a tax return preparation business with locations in Southeast Florida. Lawrence was previously a franchisee of LBS Tax Services, the complaint alleges. This lawsuit is one of nine filed against LBS Tax Services-related individuals, including Walner Gachette, Douglas Mesadieu, Jean Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Tonya Chambers, Jehoakim Victor, Lauri Rodriguez and Milot Odne.
According to the complaint, Lawrence and Aikens target primarily low-income customers with deceptive and misleading advertisements, prepare and file fraudulent tax returns to fraudulently increase their customers’ refunds and profit through unconscionable, exorbitant and often undisclosed fees—all at the expense of their customers and the U.S. Treasury.
According to the complaint, Lawrence’s and Aikens’ tax return preparation businesses expressly promote and encourage the preparation of false and fraudulent federal tax returns in order to maximize corporate and individual profits. The complaint alleges that Lawrence’s and Aikens’ stores engage in fraudulent activity, including:
• Falsely claiming the Earned Income Tax Credit
• Claiming improper filing status (i.e. head of household for married individuals)
• Fabricating businesses and related business income and expenses
• Fabricating Schedule A deductions, particularly for unreimbursed employee business expenses
• Charging deceptive and unconscionable fees
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Joplin Man Sentenced for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Frank Edwin Ness, 45, of Joplin, was sentenced by U.S. District Judge M. Douglas Harpool to 10 years in federal prison without parole. The court also sentenced Ness to a lifetime of supervised release following incarceration, and ordered him to pay $5,000 in restitution to one of his victims.
On May 28, 2015, Ness pleaded guilty to receiving and distributing child pornography over the Internet between Jan. 1, 2004, and July 16, 2014.
According to court documents, law enforcement officers executed a search warrant at Ness’s residence on July 16, 2014, and seized his desktop computer. Investigators found hundreds of videos and thousands of images of child pornography on the computer. Ness told investigators that he had been looking at child pornography for approximately 10 years. He admitted that he had sent child pornography to other individuals, and that he received child pornography from other individuals, using e-mail addresses he created using “made up” females names.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cyber Crimes Task Force and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Hollister Man Charged with Armed Bank RobberyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Hollister, Mo., man has been charged in federal court with the armed robbery of Central Bank in Branson, Mo.
Joseph E. Cyrus, 76, of Hollister, was charged in a criminal complaint filed in the U.S. District Court in Springfield, Mo., on Wednesday, Oct. 21, 2015. Cyrus, who turned himself in to police yesterday, had his initial court appearance this morning.
Cyrus was charged with stealing $30,946 from Central Bank, 1115 James Epps Road in Branson on Oct. 16, 2015.
According to an affidavit filed in support of the federal criminal complaint, Cyrus entered the bank at approximately 9 a.m. and was wearing a blue ski mask and rubber gloves. He allegedly was carrying a black semi-automatic pistol. Cyrus approached the teller counter, the affidavit says, pointed the pistol at the tellers, and said, “This is a robbery.”
Cyrus allegedly demanded that all of the bank’s employees who were positioned behind the teller counter come out where he could see them. He demanded that the tellers give him cash from their teller drawers, the affidavit says, and at one point told one of the tellers that he would shoot her in the knee.
Cyrus handed one of the bank employees a blue reusable shopping bag and they put the cash in the bag. According to the affidavit, Cyrus ordered the employees and customers in the lobby to get down on the ground, then he left the bank and walked to a white Ford Ranger pickup truck that was parked in the parking lot across the street from the bank.
Surveillance photos depict the truck with an unknown state’s license plate, which had been attached to the vehicle backwards (with the face of the plate against the truck’s bumper). Four of the six numbers/letters were clearly visible. Branson police dispatchers broadcast the description of the robber and the vehicle to area law enforcement agencies. An off-duty Branson police officer heard the description of the truck and recalled having seen a similar vehicle parked near the Yacht Club Mobile Home Park in Hollister. The officer was familiar with the truck because it had a “for sale” sign in it and he previously called the listed phone number to inquire about purchasing the truck.
At about noon on the day of the robbery, the officer drove to the parking lot and saw the truck parked in the lot. The truck had a West Virginia license plate and was registered to Cyrus. The manager of the mobile home park told the officer that Cyrus had paid his rent and checked out at approximately 11 a.m. the same day. Cyrus left the mobile home park in another vehicle and left the pickup in the parking lot, hoping that it would sell.
A federal agent made a ruse call to the telephone number listed on the “for sale” sign in the truck. The call went to voice mail, and the agent left a message indicating that he was interested in purchasing the truck. The agent was able to contact Cyrus through an intermediary who called Cyrus and told him he had a potential buyer for the truck. The agent spoke to Cyrus, posing as the potential buyer. Cyrus later called the agent back, the affidavit says, and told him that he was not returning to Hollister but that the agent could arrange to wire the money to purchase the truck.
On Wednesday, Oct. 21, 2015, Cyrus turned himself in at the Branson Police Department.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the FBI, the Branson, Mo., Police Department and the Hollister, Mo., Police Department.
Holdenville Man Sentenced to 18 Months for Bomb Threat to Hughes County CourthouseRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CALEB TRENT HODGINS, age 20, of Holdenville, Oklahoma, was sentenced to 18 months imprisonment for USE OF TELEPHONE TO COMMUNICATE BOMB THREAT, in violation of Title 18, United States Code, Sections 844(e) and 2.
The charge arose from an investigation by the Federal Bureau of Investigation and the Hughes County Sheriff’s Department.
The Information alleged that on or about May 21, 2014, in the Eastern District of Oklahoma, the defendant, through use of a telephone, maliciously conveyed false information knowing the same to be false concerning an attempt and alleged attempt being made to unlawfully damage and destroy a building, to-wit: the Hughes County Courthouse in Holdenville, Oklahoma, by means of an explosive, in and affecting interstate commerce.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Chris Wilson represented the United States.
Hartville Woman Sentenced to 20 Years in Prison for Producing, Distributing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Hartville, Mo., woman was sentenced in federal court today for using a minor to produce child pornography.
Chelese Penn, 25, of Hartville, was sentenced by U.S. District Judge M. Douglas Harpool to 20 years in federal prison without parole. The court also sentenced Penn to a lifetime term of supervised release following incarceration.
On June 11, 2015, Penn pleaded guilty to both counts contained in a Jan. 20, 2015, federal indictment. Penn admitted that she used a child, identified as Jane Doe #1, to produce child pornography between July 1, 2012, and Oct. 3, 2014. Penn also pleaded guilty to distributing child pornography over the Internet during that time.
The investigation began when undercover agents identified David Albert, 51, of Springfield, distributing pornographic images of an 11-year-old female over the Internet. Albert and Penn exchanged child pornography over the Internet. In a separate but related case, Albert was sentenced on Sept. 9, 2015, to 17 years and six months in federal prison without parole after pleading guilty to the sexual exploitation of a child.
Penn will be required under the federal Sex Offender Registration and Notification Act (SORNA) to register as a sex offender and keep the registration current in each of the jurisdictions where she resides, is employed and is a student.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Southwest Missouri Cyber Crime Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Hartford Man Sentenced to 10 Years in Prison for Gang-Related Narcotics TraffickingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on October 20, 2015, GREGORY THOMAS, also known as “Quanny” and “Jim,” 24, of Hartford, was sentenced by U.S. District Judge Jeffrey Alker Meyer in New Haven to 120 months of imprisonment, followed by five years of supervised release, for trafficking crack cocaine.
According to court documents and statements made in court, this matter stems from a year-long joint law enforcement investigation headed by the FBI’s Northern Connecticut Violent Crimes Task Force into narcotics trafficking by members and associates of West Hell street gang, and gang-related violent activity. The investigation, which included the use of court-authorized wiretaps, controlled purchases of narcotics and physical surveillance, identified Melkuan Scott, also known as “Young God,” “Mel,” “Young” and “YG,” 24, as the leader of the West Hell street gang who, along with his associates, including THOMAS, distributed crack cocaine in the Westland Street area of Hartford.
THOMAS was intercepted over wiretaps numerous times engaging in drug-related conversations and, between May 2013 and November 2013, investigators made 17 controlled purchases of crack directly from THOMAS.
THOMAS’ criminal history includes a state conviction in 2009 for assault in the second degree and carrying a pistol without a permit. This conviction stemmed from THOMAS shooting two people in February 2009 in Hartford. THOMAS has been in state custody since February 11, 2014, serving a state sentence related to his possession and distribution of crack and PCP.
On May 4, 2015, THOMAS pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of cocaine base (“crack cocaine”).
Twenty-five individuals were charged as a result of the investigation. Scott and 22 other defendants pleaded guilty to various offenses. One defendant was shot and killed while his case was pending.
Scott awaits sentencing.
This matter has been investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, Drug Enforcement Administration, U.S. Marshals Service and Internal Revenue Service – Criminal Investigation Division. The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Squad, Major Crimes Unit and Shooting Task Force are providing valuable assistance to the investigation, and the Capitol Region Emergency Response Team (CREST) assisted with the arrest of certain defendants. The Office of the Chief State’s Attorney is also assisting with this ongoing investigation.
The case is being prosecuted by Assistant U.S. Attorneys John H. Durham and Peter S. Jongbloed.
Harrison County, WV man convicted of heroin trafficking, unlawful possession of firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – Adam Bradford Linch, 35, of Anmoore, West Virginia, was convicted of heroin trafficking and unlawful possession of a firearm today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Linch sold heroin in August 2014 in Harrison County, West Virginia. He pled guilty today to one count of “Distribution of Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. The West Virginia State Police and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
In a separate matter, Linch was discovered in unlawful possession of a firearm and ammunition. Linch was previously convicted of the misdemeanor offense of “Domestic Battery” in February 2010 in the Magistrate Court of Harrison County, West Virginia. As a result of that conviction, he is prohibited from possessing firearms. He was discovered in unlawful possession of a .45 caliber pistol and ammunition in March 2015 in Harrison County, West Virginia. He pled guilty today to “Possession of a Firearm by a Person Convicted of a Misdemeanor Crime of Domestic Violence.” He faces up to 10 years in prison and a fine of up to $250,000. The Clarksburg, West Virginia Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew Cogar prosecuted the heroin trafficking offense and Assistant U.S. Attorney Shawn Adkins prosecuted the firearms offense on behalf of the government.
U.S. Magistrate Judge Michael John Aloi presided in both proceedings.
Grand Prairie, Texas, Man Sentenced to Statutory Maximum of 20 Years in Federal Prison on Child Pornography ConvictionRead the Press Release
DALLAS — Vasni Molina, 30, of Grand Prairie, Texas, was sentenced this afternoon by U.S. District Judge Jane J. Boyle to the statutory maximum sentence of 20 years in federal prison following his guilty plea to an information charging one count of receipt of child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
Molina has been in federal custody since he entered his guilty plea in June 2015.
According to documents filed in the case, an investigation by the FBI to identify individuals who used the Internet to distribute child pornography led to the identification of an IP address that was eventually linked to Molina. In February, an investigator downloaded 11 files from that IP address; nine of those files contained child pornography.
A federal search warrant was executed at Molina’s residence on March 30, 2015, and special agents with the FBI seized a laptop computer and computer media. Molina admitted he had used a file-sharing network to view and download images and videos of child pornography. He stated he had been viewing child pornography for more than three years and that approximately 75% of the 100 videos he had on his laptop would be child pornography. He admitted downloading hundreds of files of child pornography over the past three years.
A forensic analysis, however, located more than 800 videos of child pornography on Molina’s computer and other media. Molina admitted he received and possessed videos that included bondage and sadistic acts involving minors and that the majority of his child pornography collection was videos of prepubescent children.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI and the Plano Police Department investigated, and Assistant U.S. Attorney Camille Sparks prosecuted.
# # #
Gloversville Accountant Admits to Preparing False Tax ReturnsRead the Press Release
ALBANY, NEW YORK – Carmen Gentile, Jr., age 53, of Amsterdam, New York, pleaded guilty yesterday to conspiracy to defraud the United States and file fraudulent tax returns, announced United States Attorney Richard S. Hartunian and Shantelle P. Kitchen, Special Agent in Charge of IRS-Criminal Investigation’s New York Field Office.
Gentile faces a maximum penalty of five years of imprisonment, a fine of $250,000, and a maximum term of supervised release of three years when he is sentenced on February 17, 2016 by United States District Judge Gary L. Sharpe. Gentile may also be ordered to reimburse the government for any tax loss resulting from his conduct.
As part of his guilty plea, Gentile, the owner and operator of Complete Financial Accounting Services in Gloversville, New York, admitted that from March 2006 through April 2008, he and co-conspirators Angela Witzke and Michele Lennon worked together to prepare, and submit to the IRS, dozens of tax returns for clients that omitted income and claimed inflated charitable contributions, expenses, and losses. Gentile and his co-conspirators filed these returns despite knowing they contained false statements concerning their clients’ income, expenses, and losses.
Both Witzke and Lennon have also pleaded guilty to conspiracy to defraud the United States and file fraudulent tax returns; both are scheduled to be sentenced on January 14 by Judge Sharpe.
This case was investigated by IRS-Criminal Investigation’s New York Field Office and is being prosecuted by Assistant United States Attorney Wayne A. Myers.
Former Vidalia, Georgia Attorney Sentenced to 8 Years in Prison for Defrauding His Clients and OthersRead the Press Release
SAVANNAH, GA – Wilson R. Smith, 63, a former attorney from Vidalia, Georgia, was sentenced earlier this week by Chief United States District Court Judge Lisa Godbey Wood to serve 8 years in federal prison for a scheme to settle his clients’ cases without their knowledge and to steal the settlement proceeds. Smith pled guilty in May to mail fraud and aggravated identity theft charges.
According to evidence presented during the sentencing hearing, Smith settled two separate personal injury cases from 2013 to 2014, without his clients’ knowledge or authority, and then kept the $1.25 million in settlement proceeds for himself. Smith delayed detection of his scheme by providing his clients with phony case updates, including fictitious trial dates. One of Smith’s clients became concerned about supposed trial delays and contacted a court clerk. The client was told that the lawsuit had been settled and dismissed for over a year. Shortly thereafter, on January 14, 2015, Smith was arrested by the Georgia Bureau of Investigation (GBI). Later, Smith was indicted on federal fraud charges in February of 2015. Additional investigation determined that Smith schemed at least 10 victims out of settlement proceeds and other monies held in his attorney trust account.
United States Attorney Edward Tarver stated, “This former attorney chose greed over the interests of his clients. He caused great harm to the clients he swore to protect and to the entire legal system. Attorneys who lie, cheat and steal can expect that their lawyering days will soon be over and that they’ll find themselves in a federal prison cell.”
In addition to an 8-year prison sentence, Smith was ordered to pay $1,285,000 in restitution. After his released from prison, Smith will serve 3 years on supervised release.
The investigation of the Smith case was conducted by the GBI, the District Attorney’s Office of the Middle Judicial Circuit, and the FBI. First Assistant United States Attorney James D. Durham prosecuted the federal case on behalf of the United States.
Former Police Officer Pleads Guilty to Child Pornography and Sexual Abuse ChargesRead the Press Release
WASHINGTON - Darrell Best, 46, a former member of the Metropolitan Police Department (MPD), pled guilty today to one count of production of child pornography, one count of first-degree sexual abuse of a minor, and one count of second-degree sexual abuse of a minor, announced U.S. Attorney Channing D. Phillips and Cathy L. Lanier, Chief of the Metropolitan Police Department.
Best pled guilty in the U.S. District Court for the District of Columbia. The plea agreement, which is contingent upon the Court’s approval, calls for Best to be sentenced to 18 years in prison. Pursuant to the plea agreement, the Court will determine at Best’s sentencing the period of supervised release that Best will serve following the completion of his prison term. Best will also be required by law to register as a sex offender for the remainder of his life. If he approves the plea, the Honorable Reggie B. Walton is to sentence Best on Feb. 26, 2016.
In addition to working as a police officer, Best was the head pastor of a church in Southeast Washington. The sexual abuse charges stem from incidents involving two minor females who knew and trusted him through the church. Best pled guilty to second-degree sexual abuse of a minor based on his sexual abuse of one of the girls on Dec. 3, 2014 at MPD Headquarters. He pled guilty to first-degree sexual abuse of a minor based on his sexual abuse of the other girl on Feb. 14, 2015 while inside the church.
On March 14, 2015, after one of the girls told her parents about the abuse, the Metropolitan Police Department’s Youth Division began investigating the case. Best was arrested two days later and has been in custody ever since.
Following Best’s arrest, investigators obtained a search and seizure warrant from the Superior Court of the District of Columbia for Best’s cellular phone. A forensic examination of the phone revealed seven images depicting child pornography, which Best had produced using one of the victims.
In announcing the plea, U.S. Attorney Phillips and Chief Lanier commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the assistance provided by the FBI’s Washington Field Office. In addition, they acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Criminal Investigator John Marsh; Paralegal Specialist Donhue Troy Griffith, and Victim/Witness Advocate Lezlie Richardson. Finally, they commended the work of Assistant U.S. Attorneys Sarah D. McClellan and Lindsay Suttenberg, who investigated and prosecuted the case.
Former Office Manager of Henderson, Kentucky, Law Firm Guilty of Embezzling $264,867.84Read the Press Release
Money was used to pay personal expenses and make wire transfers to individuals in South Africa
OWENSBORO, Ky. – The former office manager of a Henderson, Kentucky law firm pleaded guilty to wire fraud in U.S. District Court yesterday before Chief Judge Joseph H. McKinley, Jr. for embezzling $264,867.84 during a 30-month period, announced U.S. Attorney John E. Kuhn, Jr.
According to the plea agreement, Krista Kaye Graupner, age 45, of Evansville, Indiana, committed wire fraud while employed at the law firm of King, Deep & Branaman (KDB) between June of 2012 and December of 2014.
As office manager, Graupner had access to KDB’s bank accounts and was authorized to write checks and initiate ACH payments out of these accounts. During her guilty plea, Graupner admitted to paying her own personal bills using KDB’s funds.
In October of 2014, Graupner also began wiring money from Henderson to various individuals in South Africa who were part of the scheme. Graupner admitted that she would write checks, either for cash or to herself, drawn upon KDB accounts and then use the cash from the KDB checks to wire the money via Western Union to individuals in South Africa. In perpetuating this crime, Graupner made approximately 200 wire transfers from October 2014 through December 2014.
Graupner is scheduled to be sentenced by Chief Judge McKinley in Owensboro on January 13, 2016 and could receive a combined maximum term of 60 years in prison, a maximum fine of $750,000, and a 3-year period of supervised release.
This case is being prosecuted by Assistant United States Attorney Nute A. Bonner and is being investigated by the Federal Bureau of Investigation and the Henderson Police Department.
Former Government Employee and Government Contractor Indicted in $53 Million Procurement Fraud and Illegal Gratuities SchemeRead the Press Release
Baltimore, Maryland – A federal grand jury has returned separate indictments charging John Wilkerson, age 51, of Moultrie, Georgia, and James T. Shank, age 68, of Perry, Georgia, with a wire fraud conspiracy and offering and accepting illegal gratuities, in connection with the award of more than $53 million in federal government contracts. The indictment was returned on October 8, 2015, and unsealed on October 21, 2015.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations (OSI); and U.S. Small Business Administration Inspector General Peggy E. Gustafson.
According to Shank’s indictment, from August 28, 2006 until he retired on June 30, 2011, he was employed as a Program Manager at the United States Navy’s Space and Naval Warfare (SPAWAR) Systems Center. Shank worked with agencies within the Department of Defense to procure telecommunications equipment, software, and related services.
According to Wilkerson’s indictment, he was a Department of Defense Account Manager for Iron Bow Technologies, LLC (Iron Bow), which provided IT consulting and other services to government and industry customers. Wilkerson was also part owner and operated an information technology company, Superior Communications Solutions, Inc. (SCSI).
Co-Conspirator 2 was a program manager for an information technology company, Advanced C4 Solutions, or AC4S, from 2005 until 2011. In 2011, Co-Conspirator 2 left AC4S and went to work for Wilkerson at SCSI.
The indictments allege that from September 2009 through August 2012 Shank conspired with Wilkerson and Co-Conspirator 2, to give them and the companies they worked for and/or owned an unfair competitive advantage in obtaining government contracts. In exchange, the indictments allege that Wilkerson offered, and Shank accepted, employment with SCSI while Shank was still a government employee and while he was taking official actions that benefited Wilkerson. In addition, Wilkerson allegedly paid Shank $86,000 in the year after Shank retired from government service, funneling the payment through two other companies in order to conceal the source of the funds.
According to the indictments, Shank improperly shared information with Wilkerson and Co-Conspirator 2, and worked with them to structure the government contracts so as to give their companies an unfair advantage over other potential bidders.
For example, according to the indictment, Shank, Wilkerson, and Co-Conspirator 2 developed a request for proposal (RFP) for DO27, a contract to supply labor services for an Air Force technology project, including for overall project management services, so that AC4S would win the contract. On June 10, 2010, DO27 was awarded to AC4S in the amount of $18,332,738.10. Wilkerson provided Co-Conspirator 2 with a quote for labor on behalf of SCSI that was less than the quote he had previously submitted on behalf of Iron Bow as their sales representative. After SCSI was selected as a subcontractor on DO27, it subcontracted with Iron Bow to provide most of the labor SCSI was supposed to provide under DO27. Wilkerson was able to earn income from the work Iron Bow employees were doing by having SCSI act as a middleman and charging a mark-up on Iron Bow’s work. Wilkerson and Co-Conspirator 2 then directed an SCSI employee to create false invoices supposedly documenting the hours SCSI employees spent working on DO27, which were submitted to AC4S and paid by the United States government. SCSI received $6,794,432.98 on DO27 out of the $18 million AC4S received for providing labor for the project.
Shank also initiated the procurement process on more than 11 delivery orders that purchased telecommunications equipment and furniture as part of the Air Force project. Those delivery orders were issued to Iron Bow in 2010 and 2011. Shank made sure that the delivery orders included telecommunications equipment and/or furniture that were assigned SCSI-specific part numbers, thereby guaranteeing that SCSI would receive revenue from the delivery orders. The indictment alleges that SCSI received approximately $33 million of the $35 million paid to Iron Bow under the various furniture and equipment delivery orders.
In late 2010 or early 2011, Wilkerson offered Shank employment. Shank did not disclose that fact to anyone at SPAWAR and did not recuse himself from any of the contracts that benefited Wilkerson. In February 2011, Co-Conspirator 2 left AC4S and went to work for Wilkerson at SCSI. According to the indictment, Co-Conspirator 2 received a $500,000 bonus when he joined SCSI, which was paid for by profit Wilkerson had earned on the furniture contracts.
By March 2011, the Air Force project was not complete and there were a number of contract disputes related to the project. Shank was directed not to take any other action related to the project without the approval of a senior manager. Nevertheless, the indictment alleges that in April 2011, Shank accepted more than $3.7 million worth of invoices that benefited SCSI without informing the senior manager. After Shank accepted employment with SCSI in May 2011, but was still working for SPAWAR, he allegedly approved more than $1.1 million worth of invoices that benefitted SCSI and Wilkerson.
Shank and Wilkerson face a maximum sentence of 20 years in prison for a wire fraud conspiracy; and two years in prison for offering and accepting illegal gratuities. Shank also faces a maximum sentence of 5 years for criminal conflict of interest. Wilkerson and Shank had initial appearances in the Northern District of Georgia on October 13 and 14, 2015, respectively, and have an initial appearance scheduled in U.S. District Court in Baltimore on October 23, 2015, at 11:00 a.m.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein thanked Air Force OSI and the U.S. Small Business Administration Office of Inspector General for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Leo J. Wise AND Philip A. Selden, who are prosecuting the case.
Former Executive Director of Alaska Inter-Tribal Council Sentenced to 21 Months in Federal Prison for Theft of FundsRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that the former Executive Director of the Alaska Inter-Tribal Council (“AITC”), a non-profit organization that advocates in support of tribal governments throughout Alaska, was sentenced in federal court in Anchorage to 21 months in prison for his theft of funds belonging to the organization. Steven D. Osborne, 44, of Fairbanks, Alaska, who served as the Executive Director of AITC from December 2007 until February 2008, admitted to stealing approximately $145,000 in AITC funds while he served in that capacity.
According to Assistant U.S. Attorney Joseph Bottini, AITC received substantial federal funding in 2008 and 2009 – including a federal grant from the United States Environmental Protection Agency of in excess of a million dollars. As the Executive Director, Osborne had access to AITC bank accounts and credit and debit cards issued to him by the organization. The investigation established that Osborne was able to steal the funds through a number of different ways, including cash withdrawals, checks written to himself, credit and debit card transactions, and the submission of false time cards.
Osborne was indicted by a federal grand jury in August 2013, and pled guilty in April 2015 to one count of Theft from an Organization Receiving Federal Funds. Several individuals associated with AITC addressed the court at sentencing and noted that as a result of Osborne’s thefts, AITC became ineligible for further federal funding because the organization was considered “high risk”. Without federal funding, AITC was basically rendered a defunct organization, and it remains so today.
In imposing the 21 month sentence, United States District Judge Sharon L. Gleason noted the catastrophic results which Osborne’s actions caused to AITC. In addition to the prison sentence, Osborne was directed to pay $145,000 in restitution to AITC, and was further directed to forfeit the same amount of money.
Ms. Loeffler commends the U.S. Environmental Protection Agency, Office of Inspector General and the Federal Bureau of Investigation for the investigation of this case.