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Thursday 3 September 2015
Spring Man Lands in Federal Prison for Stealing MailRead the Press Release
HOUSTON – A 33-year-old Spring man has been ordered to prison after he admitted to breaking into a U.S. Postal Service (USPS) mail collection box and stealing people’s mail, announced U.S. Attorney Kenneth Magidson. Edward Wayne Rothlander pleaded guilty March 10, 2015.
Today, U.S. District Judge David Hittner, who accepted the guilty plea, handed Rothlander a 37-month sentence to be immediately followed by three years of supervised release.
As part of his plea, Rothlander admitted that on or about Dec. 22, 2014, he knowingly broke into an outside mail collection box at the U.S. Post Office located at 211 Baker Road in Houston and stole several pieces of mail.
The investigation began following the break-in of a USPS blue mail collection box on three occasions in a two-month period in late 2014. On or about Dec. 12, 2014, authorities placed a parcel that contained a GPS tracker inside the collection box. Shortly thereafter, the tracker emitted a signal meaning that the parcel was taken. The signal was traced to a location on Rivergate in Spring.
Using surveillance photos, authorities were able to identify Rothlander and the vehicle he used in the crime.
Rothlander admitted to authorities they would find stolen mail at his residence on Diane Lane. He further admitted that he had thrown away what he thought to be a garage door opener at the Rivergate location. Authorities located the device, which was actually the GPS tracker.A search was also conducted at Rothlander’s residence, at which time authorities located a black Outdoor Products back pack, a cardboard box and a small blue box, all of which contained stolen mail. The individuals who had mailed some of the items were contacted and reported they had mailed multiple Christmas cards from the Baker Road Post Office.
Authorities recovered 90 uncashed checks with a total intended loss of $75,796.04.
Rothlander will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges were the result of an investigation conducted by the U.S. Postal Inspection Service, Harris County Sheriff’s Office and the Harris County Precinct 4 Constables Office. Assistant U.S. Attorneys Mel Pechacek and Megan Paulson are prosecuting the case.
South Carolina Woman Sentenced to Seven Months in Prison for Trafficking Guns into New JerseyRead the Press Release
CAMDEN, N.J. – A Greeley, South Carolina, woman was sentenced today to seven months in prison for her role in a scheme to traffic multiple firearms into New Jersey, U.S. Attorney Paul J. Fishman announced.
Katelynn Schippnick, 25, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging her with one count of conspiring to deal firearms without a license. Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between April 8, 2013, and July 28, 2014, Schippnick conspired with Marcus Rutling, 33, of Camden and Saluda, South Carolina, Anthony Gilmore, 26, of Lawnside, New Jersey, Shawn Tribbett, 33, of Camden, Joseph Rutling, 24, of Camden, and others to illegally sell firearms without a license, including handguns, shotguns and an assault rifle. After other conspirators obtained the firearms from pawn shops, gun stores and other sources in South Carolina, Schippnick brokered and arranged the sale of the firearms and brought them to New Jersey, at times using Amtrak trains to transport the guns. Schippnick assisted in the sale of at least five firearms, including handguns and a shotgun, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
In addition to the prison term, Judge Bumb sentenced Schippnick to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing. He also thanked special agents from the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, as well as officers from the Winslow Township and Clementon, New Jersey, police departments, for their work in the case.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Martin Isenberg Esq., Gibbsboro, New Jersey
Six convicted in Baltimore to West Virginia heroin trafficking operationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Six individuals were convicted in federal court this week for their role in a multi-state heroin trafficking operation, United States Attorney William J. Ihlenfeld, II, announced.
The defendants convicted this week participated in a drug trafficking scheme in which heroin was transported across state lines from Baltimore, Maryland into West Virginia. The operation was disrupted in June 2015 by a 163-count federal indictment encompassing 41 defendants.
Shawn Bowers, 27, of Braddock Heights, Maryland, pled guilty to one count of “Conspiracy to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. James Francis Hansen, Jr., 48, of Berkeley Springs, West Virginia, pled guilty to one count of “Aiding and Abetting Possession with Intent to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. Darla Kinser, 30, of Martinsburg, pled guilty to one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering.” She faces up to five years in prison and a fine of up to $500,000.
Michelle Lynn Warnick, 33, of Kearneysville, West Virginia, pled guilty to one count of “Use of a Telephone to Facilitate the Distribution of Heroin,” and one count of “Interstate Travel in Aid of Racketeering.” She faces up to four years in prison on the telephone count and up to five years in prison on the interstate travel count. They each face a fine of up to $500,000 on each count.
Steward Eugene Whitehead, Jr., 29, of Inwood, West Virginia, and William Wasson, 38, of Falling Waters, West Virginia, each pled guilty to one count of “Use of a Telephone to Facilitate the Distribution of Heroin,” and one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering.” They each face up to four years in prison on the telephone count and up to five years in prison on the interstate travel count. They each face a fine of up to $500,000 on each count. 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 defendants.
Assistant U.S. Attorneys Anna Krasinski and Paul Camilletti prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, and the Federal Bureau of Investigation led the inquiry.
U.S. Magistrate Judge Robert W. Trumble presided.
Six Defendants Sentenced in City of Miami Public Corruption/Kickback CaseRead the Press Release
Two former City of Miami Public Service Aides (PSA), three tow truck drivers, and the former owner of a tow company were sentenced by U.S. District Court Judge Marcia Cooke today for their participation in a kickback/bribery scheme. In that scheme, four tow truck drivers paid PSAs thousands of dollars in a series of bribes over a multi-year period. In exchange for the payments, the PSAs provided the tow truck drivers accident location information and other confidential information from their police department computers.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and Rodolfo Llanes, Chief, City of Miami Police Department (MPD), made the announcement.
City of Miami PSA Aristides Paulino, 31, City of Miami PSA Keri Dixon, 27, Jesus Tello, 29, Ronald Alfaro, 27, Reinaldo Martin Cruz, 30, and Robert Muriedas, 43, all of Miami, previously pled guilty to one count of conspiring to deprive the public of honest services through the use of interstate wires and conspiring to participate in a bribery scheme as/with a City of Miami Police Department employee in connection with a series of transactions valued at $5,000 or more in violation of Title 18, United States Code, Section 371. Robert Muriedas, the former owner of a tow truck company involved in the scheme, received a sentence of 34 months imprisonment. PSA Paulino and PSA Dixon were each sentenced to 30 and 29 months, respectively. The tow trucks’ operators, Tello, Alfaro, and Martin Cruz were each sentenced to 32, 29, and 29 months of imprisonment, respectively. All of the defendants are also required to serve one year supervised release, upon their release from prison.
Michael Perez, 22, of Miami, has been scheduled for sentencing at 11:00 a.m. on October 21, 2015.
According to the facts set forth in court documents, the City of Miami has established a wrecker operator system for the purpose of protecting drivers and preventing corruption. For example, when a car is disabled because of an accident, the driver must call a tow company himself or herself, have his or her insurance company arrange a tow, or ask the responding officer or PSA to arrange a tow. If an officer or PSA is asked to arrange the tow, almost every police department, including MPD, has strict regulations on how that tow referral must be made.
As further alleged, the information provided by PSAs Paulino and Dixon to tow truck operators Tello, Martin Cruz, Alfaro and Perez, and other unnamed co-conspirators, enabled the tow truck operators to arrive first at accident scenes, often times even before the arrival of law enforcement. Once there, the tow truck operators would illegally solicit stranded accident victims for towing and steer those victims to a particular collision repair business.
According to the factual proffers in the court file, Paulino admitted taking more than $35,000 worth of bribes between 2011 and 2014, and Dixon admitted receiving more than $20,000 in bribes between 2012 and 2014. Court documents stated that at the times when PSAs Paulino and Dixon were present at the accident locations, Paulino and Dixon actively assisted the tow truck operators in soliciting business from the stranded individuals. When the damaged vehicles were towed, they were delivered to a particular collision repair business which would pay a kickback to the tow truck operators, the PSAs, and the owner of the tow truck. Payment of these kickbacks was prohibited by the tow truck company’s contract with the City of Miami and the City of Miami also lost revenue because each tow was not properly logged as a rotational tow.
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force and the Internal Affairs Section of MPD. This case is being prosecuted by Assistant U.S. Attorney Anthony Lacosta.
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.
Shasta County Man Sentenced to 6.5 Years in Prison for Receiving Child PornographyRead the Press Release
SACRAMENTO, Calif. — Larry Steven Occhipinti, 40, of Cottonwood, was sentenced today by United States District Judge Troy L. Nunley to 6 1/2 years in prison and a lifetime of supervised release for receipt of child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, law enforcement identified a computer at Occhipinti’s residence offering files of child pornography. On May 2, 2014, law enforcement agents executed a search warrant and found hundreds of deleted images of child pornography on Occhipinti’s computer and compact disks containing more than a dozen videos of child pornography.
At the sentencing hearing, Occhipinti claimed that he had never hurt a child. Judge Nunley disagreed, noting that by viewing such images of child pornography, Occhipinti was contributing to the market for producers of these images. “To say that you’ve never hurt anyone, you need to understand . . . that you have,” Judge Nunley said.
“When a predator publishes the victim’s images on the Internet, they live on forever. Today’s sentencing serves as a reminder that ICE will work tirelessly with its law enforcement counterparts to identify and hold accountable those who prey on innocent children,” said Tatum King, acting special agent in charge for HSI San Francisco.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Special Assistant United States Attorney Josh F. Sigal prosecuted the case.
Occhipinti is scheduled to self-surrender to begin serving his sentence on November 3, 2015.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Schroder & Co. Bank AG Reaches Resolution under Justice Department's Swiss Bank Program and Agrees to Pay $10.3 Million PenaltyRead the Press Release
The Department of Justice announced today that Schroder & Co. Bank AG has reached a resolution under the department’s Swiss Bank Program.
“As today’s agreement reflects, Swiss banks continue to lift the veil of secrecy surrounding bank accounts opened and maintained for U.S. individuals in the names of sham structures such as trusts, foundations and foreign corporations,” said Acting Deputy Assistant Attorney General Larry J. Wszalek of the Department of Justice’s Tax Division. “The department’s prosecutors and the IRS are actively following these leads to criminally investigate and prosecute those individuals who willfully evaded or assisted in the evasion of U.S. income tax obligations.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Schroder Bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute the bank for tax-related criminal offenses.
Schroder Bank was founded in 1967 and received its Swiss banking license in 1970. Since 1984, Schroder Bank has had a branch in Geneva. The bank has two wholly owned subsidiaries, Schroder Trust AG (domiciled in Geneva) and Schroder Cayman Bank & Trust Company Ltd. (domiciled in George Town, Grand Cayman). Schroder Cayman Bank & Trust Company Ltd. provides services to clients such as the creation and support of trusts, foundations and other corporate bodies. Both subsidiaries also acted in some cases as an account signatory for entities holding an account with the bank. Schroder Bank is in the process of closing the operations of Schroder Trust AG and Schroder Cayman Bank & Trust Company Ltd.
Schroder Bank opened accounts for trusts and companies owned by trusts, foundations and other corporate bodies established and incorporated under the laws of the British Virgin Islands, the Cayman Islands, Panama, Liechtenstein and other non-U.S. jurisdictions, where the beneficiary or beneficial owner named on the Form A was a U.S. citizen or resident. In addition, a small number of accounts were opened for U.S. limited liability companies (LLCs) with U.S. citizens or residents as members, as well as for U.S. LLCs with non-U.S. persons as members. Schroder Bank communicated directly with the beneficial owners of some accounts of trusts, foundations or corporate bodies, and it arranged for the issuance of credit cards to the beneficial owners of some such accounts that appear in some cases to have been used for personal expenses.
Schroder Bank also processed cash withdrawals in amounts exceeding $100,000 or the Swiss franc equivalent. For at least three U.S.-related accounts, a series of withdrawals that in aggregate exceeded $1 million were made. In addition, at least 26 U.S.-related accountholders received cash or checks in amounts exceeding $100,000 on closure of their accounts, including in at least three cases cash or checks in excess of $1 million.
Between 2004 and 2008, four Schroder Bank employees traveled to the U.S. in connection with the bank’s business with respect to U.S.-related accounts. In 2008, Swiss bank UBS AG publicly announced that it was the target of a criminal investigation by the Internal Revenue Service (IRS) and the department, and that it would be exiting and no longer accepting certain U.S. clients. In a later deferred prosecution agreement, UBS admitted that its cross-border banking business used Swiss privacy law to aid and assist U.S. clients in opening accounts and maintaining undeclared assets and income from the IRS. Between Aug. 1, 2008, and June 30, 2009, Schroder Bank opened eight U.S.-related accounts with funds received from UBS, which was then under investigation by the U.S. government.
Since Aug. 1, 2008, Schroder Bank had 243 U.S.-related accounts with approximately $506 million in assets under management. Schroder Bank will pay a $10.354 million penalty.
In accordance with the terms of the Swiss Bank Program, Schroder Bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at Schroder Bank who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at Schroder Bank must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“The cumulative penalties the Swiss Bank Program has generated to date are extraordinary,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “However, a significant element of the program is the highly-detailed account and transactional data that has been provided to IRS specifically for law enforcement purposes. We will continue to use this information to vigorously pursue U.S. taxpayers who may still be trying to illegally conceal offshore accounts, ensuring we are all playing by the same rules.”
Acting Deputy Assistant Attorney General Wszalek thanked the IRS, and in particular, IRS-CI and the IRS Large Business and International Division for their substantial assistance. Wszalek also thanked Sean P. Beaty and Gregory S. Seador, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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San Juan Man Convicted of Downloading Sadistic Child Pornography VideosRead the Press Release
McALLEN, Texas – A 29-year-old resident of San Juan has entered a guilty plea to one count of receipt of child pornography, announced U.S. Attorney Kenneth Magidson
Ruben James Rios came to the attention of law enforcement following an investigation which began Feb. 8, 2015, into persons using the Internet to traffic in child pornography. A special agent with Homeland Security Investigations (HSI) was able to locate and identify a computer as offering to participate in the receipt of child pornography movies through the peer-to-peer network on the Internet. Through the investigation, it was determined that the computer was located in a residence in San Juan.
On May 27, 2015, authorities executed a search warrant at that residence during which time they seized a laptop computer and various external storage media devices. A forensic examination on the devices revealed a total of 147 child pornography movies involving clearly young children engaged in sexually explicit conduct. These movies included children under the age of 12 engaged in sadistic conduct and acts of violence. Some of the movies are of known victims as identified through the National Center for Missing and Exploited Children.
Rios admitted he downloaded child pornography from the Internet thereby receiving the child pornography found on his computer and external storage media devices.
U.S. District Judge Micaela Alvarez, who accepted the guilty plea today, has set sentencing for Nov. 19, 2015. At that time, Rios faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The charges are the result of an investigation conducted by HSI.
This case, prosecuted by Assistant United States Attorneys Alex Benavides and Kimberly Ann Leo, 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."
Sallisaw Man Sentenced to 52 Months, $4,800 Restitution for Wire Fraud, Uttering A Counterfeiting Security and Identity TheftRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CHRISTOPHER JACOB FROEHLICH, age 29, of Sallisaw, Oklahoma, was sentenced to 28 months imprisonment on three counts of Wire Fraud, in violation of Title 18, United States Code, Sections 1343 and one count of UTTERING A COUNTERFEIT SECURITY WITH INTENT TO DECEIVE, in violation of Title 18, United States Code, Section 513(a). FROEHLICH was also sentenced to 24 months on two counts of AGGRAVATED IDENTITY THEFT, in violation of Title 18, United States Code, Section 1028A(a)(1) which were ordered to run consecutive to the other charges. The defendant was ordered to pay $4,851 restitution.
The charges arose from an investigation by the United States Postal Inspector and the United States Secret Service. The defendant was indicted in September, 2014.
The Indictment alleged that from December 25, 2013 to March 24, 2014, within the Eastern District of Oklahoma and elsewhere, the defendant devised a scheme and artifice to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises. It was part of the scheme that the defendant used his computer to create fraudulent accounts at various financial institutions. The defendant created these fraudulent accounts using the identities of other persons without their permission. The defendant also created and uttered counterfeit checks.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. The defendant remains in the custody of the United States Marshal 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.
Salem Man Sentenced to 15 Years Under the Armed Career Criminal ActRead the Press Release
PORTLAND, Ore. – Alberto Contreras, 34, of Salem, Oregon, was sentenced today under the Armed Career Criminal Act to the mandatory minimum sentence of 15 years in prison by U. S. District Court Judge Marco A. Hernandez. Contreras pled guilty to being a felon in possession of a firearm with an Armed Career Criminal enhancement on March 23, 2015. Following his prison term, Contreras will serve five years of supervised release.
This case arose out of an investigation by the Salem Police Department after they developed information that Contreras was selling methamphetamine while carrying a firearm. Following a traffic stop of the vehicle he was driving on March 12, 2014, police developed probable cause to search the vehicle, and a loaded 9mm Ruger pistol, which had previously been stolen, was found hidden in the vehicle in addition to a digital scale. Subsequently, Contreras allowed the police to search his apartment and a small amount of methamphetamine and two digital scales were located.
Under federal law, any person who possesses a firearm after being previously convicted of three violent felonies or drug trafficking crimes qualifies as an armed career criminal and faces a mandatory 15-year minimum sentence. Contreras qualified for that sentence based upon the following prior convictions: (1) Delivery of a Controlled Substance, Marion County, 2001, sentence of 16 months imposed; (2) Assault II, Marion County, 2003, sentence of 60 months imposed; (3) Delivery of a Controlled Substance, Marion County, 2011, sentence of 19 months imposed.
This case was investigated by the Salem Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U. S. Attorney Fred Weinhouse.
Real Estate Agent Sentenced to 7 Years and Promoter Sentenced to 2 Years for Their Roles in Federal Racketeering ConspiracyRead the Press Release
CHARLOTTE, N.C. – Nathan Shane Wolf, 44, and John Wayne Perry, Jr., 34, both of Charlotte, were sentenced this week by Senior U.S. District Judge Graham C. Mullen on federal racketeering charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. An additional defendant, Purnell Wood, 44, was sentenced on Friday, July 31, 2015 for his role in the federal racketeering Enterprise.
Acting U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
These convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, 89 defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives. Of the 89 defendants convicted, two remain to be sentenced.
Wolf, a licensed real estate agent, was sentenced to 7 years in prison followed by three years of supervised release. Wolf was convicted by a jury in October 2013. According to trial evidence, Wolf was a participant in the enterprise’s mortgage fraud operations, accounting for over $13 million in fraudulently-obtained loans, with losses of more than $7 million. Witnesses testified that Wolf arranged for builders of luxury real estate to pretend to sell such real estate at an inflated price – what Wolf called the “gross price” – in order to get an inflated mortgage loans from a bank. In reality, the builders accepted the true, lower, price – what Wolf called the “strike price” – while Wolf arranged for the difference between the inflated price and the true price to be paid from the loan proceeds as kickbacks. Such kickbacks were funneled through sham companies and disguised to look like payments for work actually done on the real estate. Trial evidence established that the work was never done, but instead these kickbacks were payments to the buyers and promoters who helped bring the parties to the fraud together. According to the evidence at trial, the kickbacks generally ranged from approximately $50,000 to almost $600,000. According to today’s sentencing hearing, Defendant Wolf received more than $200,000 in commissions on the fraudulent transactions, which represented the vast majority of his income during the years he was committing fraud.
Perry was sentenced to 24 months in prison followed by two years of supervised release. According to court records and today’s sentencing hearing, Perry served the Enterprise as a promoter in its mortgage fraud operations, arranging a fraudulent transaction that resulted in a loss of approximately $500,000. More than $200,000 in kickbacks were then funneled through Perry’s bank account following the closing. Defendant and his co-conspirators falsely represented the kickback money was for brick work done on the property.
Wood was sentenced to 21 months in prison followed by one year supervised release. According to court records and the sentencing hearing, Wood also served the Enterprise as a promoter in its mortgage fraud operations, arranging two mortgage fraud transactions with losses of more than $1.5 million, funneling nearly a half million dollars in kickbacks through his sham company following closing. Defendant and his co-conspirators falsely represented that this kickback monies were for payment for home improvements.
In pronouncing these sentences Senior Judge Mullen noted that the calculated losses did not include the effects on the neighborhoods where houses purchased through fraud were located and that the victims of this fraud extended beyond the lending institutions to other people who lived in those neighborhoods and saw their property values negatively impacted by the fraud.
Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento. The Mehr case was tried by Assistant United States Attorneys Maria K. Vento and Jenny G. Sugar.
“The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
Rancho Cucamonga Man Indicted for Committing Sexual Abuse of a Minor in Yosemite National ParkRead the Press Release
FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Marcus Anthony Maluhia Araiza Jr., 18, of Rancho Cucamonga, charging him with aggravated sexual abuse of a child and abusive sexual contact with a child under 12 years of age, United States Attorney Benjamin B. Wagner announced.
According to allegations in a criminal complaint previously filed against Araiza, during the early morning hours of August 26, 2015, National Park Service rangers responded to a call that an 11-year-old boy was molested while in a restroom at Camp Curry in Yosemite National Park. The boy reported being in the restroom when an unknown man grabbed him and touched his genitals. The boy was able to escape from the bathroom get to his mother. Flyers posted in Curry Village led to Araiza’s arrest later that morning.
This case is the product of an investigation by the National Park Service. Assistant United States Attorney Michael S. Frye is prosecuting the case.
If convicted, Araiza faces a statutory penalty of up to life in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Prior Drug Dealing + Gun = 15 Years in Federal PrisonRead the Press Release
PITTSBURGH - A resident of Pittsburgh, has been sentenced in federal court to 15 years in prison on his conviction of federal drug and firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge Mark Hornak imposed the sentence upon defendant Self Strawder, 31, on September 2, 2015.
According to information presented to the court, on June 1, 2014, Homestead Police responded to a domestic disturbance and observed the defendant drop a pistol handle extender as he fled into a building. In the hallway, they located a loaded pistol. Strawder was also located and found to possess 40 stamp bags of heroin and $1,804 in cash.
On Sept. 15, 2014, Pittsburgh Police observed Strawder, then a wanted fugitive, discarding marijuana as he fled on foot. He was apprehended and found to have a loaded pistol, 128 stamp bags of heroin and $765 on his person.
Judge Hornak determined that Strawder has multiple prior convictions including: burglary of a residence; theft of firearms and other items; and dealing heroin, cocaine and marijuana. Federal law precludes a person with any prior convictions for crimes punishable by more than one year from possessing a firearm or ammunition. Individuals with three or more felony drug convictions and/or crimes of violence face a minimum mandatory 15 years or more in federal prison.
Prior to imposing sentence, Judge Hornak determined that a 15-year period of incarceration was a serious sentence imposed for serious offenses. The Court also determined that a 10-year period of supervision by the United States Probation Office after his release from jail was necessary to deter Strawder from similar criminal conduct in the future.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government.
This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pittsburgh Bureau of Police and the Homestead Police Department for the investigation leading to the successful prosecution of Strawder.
Philadelphia Woman Charged with Lying About Marriage to Get Government BenefitsRead the Press Release
PHILADELPHIA - Roma Gardner-Kunkle, 55, of Philadelphia, Pennsylvania, was charged today by information with one count of theft of government funds, announced United States Attorney Zane David Memeger. The defendant was approved for SSI benefits based on an application she made in February 1987. In 1995, she married and was obligated to inform the Social Security Administration (“SSA”) of changes to her household composition, household income, and marital status.
According to the information, in December of 2005, during a redetermination interview with SSA, the defendant falsely stated that she had never been married and that she lived alone. She made the statements in order to receive more Supplemental Security Income benefits than she was entitled to receive. The defendant’s alleged actions resulted in a loss to the government of approximately $48,071.70.
If convicted, the defendant faces a possible term of imprisonment, up to three years of supervised release, restitution to the government in the amount of $48,071.70, 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.
Philadelphia Woman Charged with Defrauding FEMARead the Press Release
PHILADELPHIA - Schwana Debnam, 38, of Philadelphia, PA, was charged by information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, the defendant applied for and received Federal Emergency Management Agency (“FEMA”) benefits, alleging that she had been displaced from her home as a result of Hurricane Irene. The information charges that the representations in the defendant’s application to FEMA were false, and that, in fact, she was never displaced from her primary residence. The defendant’s alleged actions resulted in a loss to the government of approximately $26,756.
If convicted, the defendant faces a statutory maximum sentence of 10 years in prison, up to three years of supervised release, restitution to the government of $26,756, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by Homeland Security, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Bea Witzleben.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
North Carolina Man Pleads Guilty to Possession of Stolen FirearmsRead the Press Release
NORFOLK, Va. – Robert James Gibson, 25, of Roxobel, North Carolina, pleaded guilty today to charges of possession of stolen firearms.
According to a statement of facts filed with the plea agreement, Gibson and a co-conspirator broke into AWH Arms in Virginia Beach and stole 22 firearms which Gibson and the co-conspirator were selling to people on the streets. This case came to light when a drunken individual left a night club and started shooting a gun into the air. After responding to a call about the shooting, police recovered the firearm and discovered it was stolen from the break-in at AWH Arms. The drunken individual identified both Gibson and the co-conspirator who sold him the stolen firearm.
Gibson was indicted by a federal grand jury on June 3, 2015. Gibson faces a maximum penalty of 10 years in prison when sentenced on Dec. 3, 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; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the plea was accepted by U.S. District Judge Mark S. Davis. Assistant U.S. Attorney William D. Muhr is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-69.
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Ninth Defendant Pleads Guilty to Tax Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Springfield, Mo., woman pleaded guilty in federal court today to her role in a fraudulent tax return preparation scheme that claimed nearly $340,000 in fraudulent income tax refunds.
Heather Nicole Drennen, 32, of Cameron, Mo., formerly of Springfield, pleaded guilty before U.S. Magistrate Judge David P. Rush to making a false and fraudulent income tax return.
Co-defendant Cherie Christine Dupuis, 43, of Springfield, pleaded guilty on July 21, 2015, to leading the fraudulent tax return preparation conspiracy. Dupuis admitted that she and co-conspirators defrauded the government by filing false claims for income tax refunds from February 2009 to March 2012. In the false and fraudulent federal income tax returns they prepared and filed, conspirators claimed refunds from the IRS totaling approximately $340,630, of which approximately $336,839 was false. Over the course of the scheme, the total actual tax loss to the IRS was $284,169.
Dupuis admitted that she filed fraudulent federal income tax returns in her own name and for at least 19 other individuals. Dupuis would usually split the fraudulent refunds with her co-conspirators. The total amount of the false claims Dupuis personally prepared and/or filed was approximately $298,708, with approximately $256,281 being paid on these false claims and a loss to the government of approximately $213,711.
Drennen admitted that she filed a false federal income tax return for the 2011 tax year using another person’s identity, including that person’s name and Social Security number. This 2011 federal income tax return falsely listed wages that had not been earned and federal income tax withholdings that had not been withheld. As a result, Drennen fraudulently received a $5,592 income tax refund.
Drennen is the ninth defendant to plead guilty to her role in the scheme. In addition to Dupuis, co-defendants Johnny L. Cooper, 28, and Jeannie Marie Rhodes, 34, both of Springfield, Shawna Marie Hughey, 37, of Joplin, Mo., formerly of Springfield, William J. Coonce, 29, of Otterville, Mo., Jeannette R. Dunn, 48, of Huntsville, Ark., formerly of Springfield, Asia Michelle Couchman, 26, of Oak Grove, Mo., and Delbert L. Allen, 37, of Pleasant Hope, Mo., formerly of Springfield, have also pleaded guilty.
Under federal statutes, Drennen is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation.
New Orleans Man Indicted for Narcotics and Firearms ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DARION TINSON, age 33, of New Orleans, was charged today in a four count Indictment for violations of the Federal Controlled Substances Act and the Federal Gun Control Act.
According to the Indictment, TINSON conspired to possess and possessed with the intent to distribute a mixture or substance containing a detectable amount of heroin, a Schedule I controlled substance. In addition, TINSON faces charges of possessing a firearm in furtherance of his drug trafficking trade and for being a convicted felon in possession of a firearm in violation of the Federal Gun Control Act.
If convicted on the drug charges, TINSON faces up to 20 years in prison on each charge, a fine of up to $1,000,000, and at least three years of supervised release following any term of imprisonment. If convicted of the gun charges, TINSON would face an additional five years in prison that must run consecutive to any other sentence.
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney David Haller is in charge of the prosecution.
New Orleans Man Indicted for Failure to Register as a Convicted Sex OffenderRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BENIAIH LEWIS, age 26, of New Orleans, was charged today in a one count Indictment for failure to register as a sex offender in violation of the Sex Offender Registration and Notification Act.
According to court records, LEWIS was convicted of Possession of Child Pornography in violation of California Penal Code Section 311.11(a) on October 3, 2012, and, because of his conviction, LEWIS was required to register as a sex offender for life pursuant to the Sex Offender Registration and Notification Act. LEWIS completed his last known sex offender registration form with the Fresno Police Department in California in 2013. According to today’s indictment, at some time after August 2013, LEWIS moved from California to Louisiana and failed to notify law enforcement authorities of his move to Louisiana.
If convicted of the failure to register charge, LEWIS faces a maximum term of imprisonment of ten years, a fine of $250,000 and up to three years of supervised release.U. S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Polite praised the work of the U. S. Department of Homeland Security-HSI, the U.S. Marshals Service, and the Fresno California Police Department in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U.S. Attorney Brian M. Klebba.
New Haven Man Admits Paying Nearly $350K in Bribes to West Haven Housing Authority OfficialRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ANDREW ROSS, 58, of New Haven, waived his right to indictment and pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to paying nearly $350,000 in bribes to the former executive director of the West Haven Housing Authority in exchange for government contracts and business.
According to court documents and statements made in court, Michael Siwek was the executive director of the West Haven Housing Authority (“WHHA”), an agency that received federal funding. As part of his duties, Siwek had substantial discretion over awarding WHHA business and contracts. Siwek also owned and controlled Four Star Development Company, LLC (“Four Star”). Between January 2007 and February 2012, ROSS, who controlled business entities that received WHHA business and contracts for financial and consulting services, made approximately $349,500 in corrupt payments to Siwek and Four Star.
In total, Siwek received approximately $1.5 million in bribes from individuals who received business with the WHHA and the entities that the WHHA controlled.
ROSS pleaded guilty to one count of conspiracy to commit bribery in connection with a program receiving federal funds, which carries a maximum term of imprisonment of five years. Judge Shea scheduled sentencing for January 29, 2016.
On September 4, 2014, Siwek pleaded guilty to related charges. He awaits sentencing.
U.S. Attorney Daly stated that the investigation is ongoing.
This matter is being investigated by the U.S. Department of Housing and Urban Development – Office of Inspector General, the Federal Bureau of Investigation, and Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Sarah Karwan.
Citizens are encouraged to report corruption to the Connecticut Public Corruption Task Force by calling 203-238-0505.
New Charges and Defendants Added in Superseding Indictment for Credit Card SchemeRead the Press Release
SACRAMENTO, Calif. — A superseding indictment has been unsealed that charges three defendants for participating a large-scale scheme to defraud over 119,000 credit card account holders by making false charges on their accounts, United States Attorney Benjamin B. Wagner announced.
The original indictment was returned on March 20, 2014, and charged Mihran Melkonyan, 35, of Sacramento, and Rouslan Akhmerov, 41, of Los Angeles, with 23 counts of wire fraud and mail fraud. Akhmerov pleaded guilty to credit card fraud on December 15, 2014, and is awaiting sentencing.
The superseding indictment charges Melkonyan and adds defendants Ruslan Kirilyuk, 37, of Los Angeles, and Aleksandr Maslov, 34, of Sacramento, to the indictment, charging all three defendants with 24 counts of wire fraud and two counts of mail fraud. Kirilyuk is also charged with one count of aggravated identity theft. Melkonyan has been in custody since his arrest on April 15, 2015. Maslov was arrested on Tuesday and released on bond. Kirilyuk has yet to appear, and there is a warrant for his arrest.
According to court documents, between October 5, 2011, and March 5, 2014, the defendants participated in a scheme to obtain money from credit card holders, credit card companies, and third-party credit card payment processors by charging individuals’ credit cards without their permission or knowledge for goods and services that were not provided.
The defendants created at least 70 fictitious businesses for the purpose of billing stolen credit cards, using names that sounded legitimate such as 24 Quick Stop, Best Box, Chevran, Marshall Store, Stop Shop Market, Walt Mart, and Whole Store. In some cases, the fictitious businesses had Internet domain names and email addresses associated with them that were used to create the appearance of a legitimate business. Some of these fictitious businesses were established in the names of unknowing victims; for example, the defendants obtained stolen or misappropriated copies of student transcripts from a Sacramento-area high school and used the students’ identities to establish the fictitious businesses.
According to the superseding indictment, the defendants obtained information for credit card accounts and processed a large number of small payments from different credit cards in a relatively short period of time. The credit card providers such as American Express and third-party payment processors such as PayPal credited the businesses’ accounts based on the processed credit card transactions for the purported sales.
As part of the scheme, the defendants opened multiple bank accounts that they controlled using the identity theft victims. These accounts were linked directly to the businesses’ merchant accounts with credit card providers and third-party credit card payment processors. The defendants transferred money from the businesses’ merchant accounts to the bank accounts of the victims, and then withdrew cash from these accounts through ATM withdrawals, using debit cards and other means.
This case is the product of an investigation by the Federal Bureau of Investigation and the United States Secret Service. Assistant United States Attorneys Michael D. Anderson and Matthew M. Yelovich are prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire and mail fraud. Kirilyuk faces an additional two years in prison consecutive to any other penalty if convicted on the aggravated identity theft count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
NGK Insulators Ltd. to Pay $65.3 Million for Fixing Prices on Auto PartsRead the Press Release
Automotive parts supplier NGK Insulators Ltd. has agreed to plead guilty and to pay a $65.3 million criminal fine for its role in a conspiracy to fix prices and rig bids for ceramic substrates for automotive catalytic converters supplied to automobile manufacturers. The company will also plead guilty to obstruction of justice.
According to the two-count felony charge filed today in the Eastern District of Michigan, NGK Insulators, based in Nagoya, Japan, conspired to rig bids for, and to fix, stabilize and maintain the prices of, catalytic converter substrates. The parts were supplied to automobile manufacturers such as General Motors Company, Toyota Motor Corporation, Nissan Motor Company Ltd and certain of their subsidiaries, affiliates and suppliers in the United States and elsewhere. NGK Insulators was involved in the conspiracy from at least July 2000 until at least February 2010. NGK Insulators is also charged with obstructing justice between February 2010 and approximately July 2012, for altering, destroying, mutilating and concealing documents with the intent of impeding the investigation into criminal antitrust violations in the automotive parts industry. NGK Insulators has agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“Companies and their executives who commit antitrust crimes will be found out and punished,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “And if they attempt to obstruct our investigation, they will face even harsher consequences.”
Ceramic substrates are uncoated ceramic monoliths with a fine honeycomb structure that are used in automotive catalytic converters. Catalytic converters are critical emissions control devices that convert pollutants in an exhaust gas stream into less harmful gases through catalytic chemical reactions.
According to the charge, NGK Insulators and representatives of another corporate conspirator had conversations in which they agreed upon anticompetitive bids and price quotations on bids to be submitted to certain automobile manufacturers. NGK Insulators, which sells a variety of ceramic and metallic products for the automotive industry, power generation, electronics components and other industrial processes, is the second-largest worldwide manufacturer of ceramic substrates for automotive catalytic converters.
Additionally, after becoming aware of antitrust investigations in the United States and other countries, NGK Insulators and certain of its executives and employees obstructed justice through a series of actions in both the United States and Japan. NGK Insulators deleted and attempted to delete electronic files, destroyed and concealed paper files, removed and replaced high executives’ office computers, removed and concealed electronic files stored on its U.S. office computer system, attempted to destroy paper files located in the U.S., engaged in misleading actions and withheld information about the offenses under investigation.
The charges against NGK Insulators are the latest in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry. Including NGK Insulators, 36 companies and 30 executives have pleaded guilty or agreed to plead guilty in the ongoing investigation and have agreed to pay more than $2.5 billion in criminal fines.
NGK Insulators is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. NGK Insulators is also charged with obstruction of justice, which carries a maximum penalty of $500,000 per count for corporations.
Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
NGK Insulators Information (209.19 KB)
Moody Man Pleads Guilty to Stealing $41,098 from Jewish TempleRead the Press Release
BIRMINGHAM -- A Moody man pleaded guilty this week in federal court to one count of wire fraud as part of his scheme to steal $41,098 from his employer, Temple Emanu-el in Birmingham, announced First Assistant United States Attorney Robert Posey and FBI Special Agent in Charge Roger C. Stanton.
CHARLES M. COLLINS, 66, entered his guilty plea before U.S. District Judge Abdul Kallon. His sentencing is scheduled Dec. 4.
Collins served as the accounting manager for Temple Emanu-el from June 2008 to November 2013, when his scheme was discovered. In his plea agreement with prosecutors, Collins admitted that he took advantage of that position to send unauthorized wire transfers from a local bank into his own personal bank accounts. Collins agreed to forfeit $41,098 to the government as proceeds of illegal activity.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Xavier O. Carter Sr. is prosecuting.
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Montgomery County Man Sentenced to 42 Months in Prison for Deceptive Telemarketing Fraud Scheme that Defrauded Clients of $2.9 MillionRead the Press Release
Greenbelt, Maryland - U.S. District Judge Theodore Chuang sentenced Richard A. Brennan, age 43, of Clarksburg, Maryland, today to 42 months in prison, followed by three years of supervised release, for mail fraud, and for making a false statement on a tax return. Judge Chuang entered a judgment ordering Brennan to pay a $150,000 fine, $2.9 million in restitution to the victims of the fraud and $297,087 in restitution to the Internal Revenue Service. In addition, Judge Chuang ordered Brennan to perform 200 hours of community service.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Maryland Attorney General Brian E. Frosh.
According to his plea agreement, until January 2009, Brennan was a licensed attorney in Maryland. In late 2005 or early 2006, Brennan established the Law Offices of Richard A. Brennan (LORAB) to perform debt settlement services. “Debt settlement” differs from “debt management” services, in that, in debt management, debtors continue to make payments on accounts on negotiated terms, while debt settlement involves allowing debt accounts to go delinquent and making a lump sum offer to settle the account. While debt management services – and the fees that could be charged customers – were closely regulated in Maryland, debt settlement services were not.
The Maryland Attorney General’s Office and the Maryland Attorney Grievance Commission both received a high number of complaints from Brennan’s customers reporting that they were deceived by telemarketers who convinced them of the high probability of success by engaging Brennan and his debt settlement program, but who reported seeing little success in having their debts resolved. When the clients complained to LORAB, their calls frequently went unreturned and they were typically told their payments would not be refunded as they constituted Brennan’s attorney fees.
In October 2007, Brennan agreed with the Maryland Attorney General’s Office to cease engaging in a number of business practices, including misuse and commingling of his clients’ funds. Despite this, Brennan violated the agreement by continuing to recruit new clients without making the disclosures required under the agreement with the Attorney General’s office, and by omitting any mention of his restrictions under the agreement, which included a requirement that he maintain a surety bond in order to continue to provide debt settlement services.
To evade the restrictions in the agreement and to keep new clients from researching the large numbers of complaints posted online about his practices, Brennan changed his business entity name several times in quick succession, to include doing business for a few months as the Capital Law Group, then the Frederick Law Group and later as the Metro Law Group. Brennan also instructed telemarketers working for him to deny the new entities’ relationship with Richard Brennan.
In January 2009, Brennan surrendered his license to practice law by signing a joint petition with the Attorney Grievance commission. In that document, Brennan admitted that he had used client trust money for purposes other than its intended use. In June, 2009, Brennan appeared before the Circuit Court of Frederick County and acknowledged that he continued to debit funds from client bank accounts even after his surety bond had been revoked. Brennan was ordered to pay a $2.58 million money judgment in restitution to clients from whom he collected money up until October 2007. The Court also briefly jailed Brennan for contempt after he failed to provide the Attorney General’s Office a list of clients or accounting for funds as he had promised.
Even after losing his license to practice and this judgment, Brennan continued to attempt to defraud debt clients. On November 6, 2009, Brennan mailed an existing Frederick Law Group client a letter under the business entity name “International Debt Solutions.” In that letter, Brennan acknowledged that Frederick Law Group’s “web site and call center have been closed” “[d]ue to unforeseen circumstances” and attempted to dissociate himself with that firm by claiming that that “[Frederick Law Group] has forwarded us your information.” Brennan asked the client to fill out a new representation agreement, power of attorney, and electronic funds transfer authorization, which the victim returned by mail to an address two houses away from Brennan’s.
Brennan’s debt settlement fraud scheme caused the loss of approximately $2.9 million to his clients between October 18, 2007, and 2010, and involved more than 250 victims.
Brennan also admitted that he filed false tax returns in 2006 and 2007, underreporting his income in both years. For example, in 2007, Brennan reported an adjusted gross income of negative $576,273.10 when he had unreported business receipts that year of at least $9,229,802. Additionally, Brennan received a total of $5,387 in tax refunds based on his knowingly false returns submitted for 2006 and 2007. Brennan filed no tax returns for the tax year 2008, despite receiving over $6 million into business bank accounts he controlled. The total approximate tax loss to the United States is $297,087.
Further, Brennan knowingly possessed unregistered machineguns and short-barreled rifles and also engaged in the unlicensed manufacture of the machineguns. Specifically, in February 2011, a search warrant executed at Brennan’s home in Clarksburg, Maryland, yielded evidence that Brennan unlawfully converted 10 semiautomatic rifles into fully automatic weapons, and modified another rifle so that it had a barrel length of less than six inches. Brennan failed to register those modified weapons, as required by law.
United States Attorney Rod J. Rosenstein praised U.S. Postal Inspection Service, ATF, IRS-Criminal Investigation, and the Maryland Attorney General’s Office for their work in the investigation and thanked the Maryland Attorney Grievance Commission for its assistance. Mr. Rosenstein thanked Assistant United States Attorney Joseph R. Baldwin, who prosecuted the case.
Michigan Man Guilty of Mail Fraud in $50 Million Ponzi SchemeRead the Press Release
A Michigan man was found guilty today of fifteen counts of mail fraud in a $50 million Ponzi scheme that spanned ten years.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced today that after a six-week trial, Joseph P. Zada, 57, of Grosse Pointe Shores, Michigan, and formerly of Wellington, Florida, was found guilty today of 15 counts of mail fraud in a $50 million Ponzi scheme that spanned ten years.
The victims included an internationally acclaimed hockey player, a former Olympic equestrian champion, a veterinarian, a jeweler, and a pawnbroker, as well as a number of firefighters. Zada told the victims that he was investing their money in oil and currency trading through a top-secret board headquartered in London. In truth, he never invested their money, but instead squandered it on a lavish jet-set lifestyle, which included mansions in Florida and Michigan. The victims were defrauded out of more than $50 million. When pressed to return the investment money, Zada claimed he was awaiting a billion dollar inheritance from a member of the royal family of Saudi Arabia, but the inheritance never materialized.
Zada was taken into custody immediately after the verdict was read. Zada faces up to 20 years in prison for each of the 15 counts. His sentencing is scheduled for November 20, 2015 at 2:00 p.m. before U.S. District Judge Kenneth A. Marra.
Mr. Ferrer commended the investigative efforts of the FBI. This case is being prosecuted by Assistant United States Attorneys Rolando Garcia and Adrienne Rabinowitz.
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.
Miami-Dade County Resident Sentenced to Four Years in Prison for Causing the Filing of False Cash Payment ReportsRead the Press Release
A Miami-Dade County resident was sentenced to 48 months in prison, followed by three years of supervised release, and was ordered to pay a money judgment in the amount of $165,000 and to forfeit $69,900.22 and a BMW seized during the investigation.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Key, Chief, Opa-locka Police Department, and J.D. Patterson Jr., Director, Miami-Dade Police Department (MDPD), made the announcement.
Geovanys Guevara, 41, of Hialeah, was previously convicted by a federal jury of three counts of causing the filing of false reports of cash payments over $10,000 received in a trade or business, specifically Form 8300, with the Treasury Department, for the purpose of evading reporting these payments to the Treasury Department, in violation of Title 31, United States Code, Sections 5324(b)(2) and (d)(2).
As shown at trial and in court documents, Guevara purchased three cars in the names of another individual at a Miami-Dade car dealership: a Ferrari involving cash in the amount of $95,000, a Lamborghini involving cash in the amount of $20,000, and a Rolls Royce involving cash in the amount of $50,000. Because Guevara used a straw buyer to purchase the vehicles, his actions caused the car dealership to file a Form 8300 for each purchase containing material omissions and misstatements of fact concerning the true identity of the person from whom the cash was received. Federal law requires every non-financial trade and business to file a Form 8300 with the Treasury Department to report cash payments received over $10,000 during a transaction or two or more related transactions.
Mr. Ferrer commended the investigative efforts of the South Florida Financial Crimes Strike Force, with special commendation to IRS-CI, the Opa-locka Police Department, and the MDPD. The case is being prosecuted by Assistant U.S. Attorneys Elijah A. Levitt and Timothy Abraham.
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.
Mexican Citizen Living in San Antonio Sentenced to Life in Federal Prison for his Role in Kidnapping SchemeRead the Press Release
In San Antonio today, a federal judge sentenced 36-year-old Agustin Sergio Deleon Garza to life in federal prison for his role in the kidnapping of a Mexican businessman in December 2013 announced United States Attorney Richard L. Durbin, Jr., Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and Special Agent in Charge Joseph M. Arabit of the DEA’s Houston Division.
In addition to the prison term, Senior United States District Judge Royce Lamberth ordered Deleon Garza to pay $73,800 restitution to his victim.
On January 15, 2015, a jury found Deleon Garza guilty of one count of conspiracy to kidnap; one count of aiding and abetting kidnapping; two counts of receipt of ransom money; one count of interstate communication of ransom; one count of conspiracy to commit money laundering; and, one count of aiding and abetting money laundering.
Evidence presented during trial revealed that on December 27, 2013, Jorge Luis Martin Cavazos Cantu was kidnapped from his Monterrey, Mexico residence by several men. While Cantu was in the custody of his abductors in Mexico, Deleon Garza placed several phone calls from Bexar County to Cantu’s family seeking ransom. In each call, Deleon Garza used a cellphone app which disguised his voice and his location. Cantu was released on January 29, 2014, after the ransom was paid.
“Kidnapping is a terrifying crime for the victim and for his family. Everyone knows that kidnappings can end very badly. Fortunately, the victim in this case survived and was released. Deleon Garza’s life-imprisonment sentence is appropriate and very well deserved,” stated United States Attorney Richard Durbin.
This case was investigated by special agents with the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA) in San Antonio and in Mexico (Monterrey and Mexico City) in cooperation with the State of Nuevo León anti kidnapping unit and the attorney general's office in Monterrey.
“The sentence handed down today sends a clear message to criminals who attempt to carry out acts of violence in other countries while enjoying the privileges and freedoms of living in this great nation. The FBI, working with our law enforcement partners, in the US and the world, will ensure that you are held accountable for your violent criminal acts,” stated FBI Special Agent in Charge Christopher Combs, San Antonio Division.
“This sentence represents outstanding law enforcement collaboration among agencies in the United States and Mexico, and demonstrates the bilateral tenacity involved with bringing those who threaten our communities to justice,” stated Joseph M. Arabit, DEA Special Agent in Charge, Houston Division.
Assistant United States Attorney Erica Benites Giese prosecuted this case on behalf of the Government.
Metro-East Man Charged with Firearm OffenseRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on September 2, 2015, Anthony M. Williams, 33, East St. Louis, IL, was arraigned on an Indictment charging him with the Unlawful Possession of a Firearm by a Previously Convicted Felon. Williams’ trial is scheduled for October 26, 2015. Williams was ordered held without bond pending trial.
The indictment alleges that, on April 10, 2015, Williams unlawfully possessed an FEG, .9mm pistol, after having been previously convicted of Unlawful Possession of a Weapon by a Felon in St. Clair County, Illinois.
The penalty for the Unlawful Possession of a Firearm by a Previously Convicted Felon is a term of imprisonment of not more than ten years, a fine up to $250,000, or both, and a term of supervised release of not more than three years.
An indictment is merely the method by which federal charges are lodged. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case was investigated by the Illinois State Police’s Metro-East Police Assistance Team. The case is assigned to Assistant United States Attorney Angela Scott.
Men Plead Guilty to Federal Child Pornography OffensesRead the Press Release
LUBBOCK, Texas — In unrelated cases, two defendants appeared in federal court this afternoon and pleaded guilty to federal child pornography offenses, announced John Parker, U.S. Attorney for the Northern District of Texas.
Felipe Martinez Ramirez, 47, of Ozona, Texas, pleaded guilty before U.S. Magistrate Judge Nancy M. Koenig to one count of producing child pornography. Ramirez, who has been in custody since his arrest this past July, faces a statutory penalty of not less than 15 years or more than 30 years in federal prison and a $250,000 fine. A sentencing date was not set.
According to plea documents filed in the case, Ramirez enticed a minor female to engage in sexually explicit conduct with him at a residence in Ozona, and he used a cell phone to record that conduct reflected in a bathroom mirror.
In the other case, Jacob Seth Thornton, 28, of Lubbock, pleaded guilty before Judge Koenig to one count of receiving a visual depiction of a minor engaging in sexually explicit conduct. He faces a statutory penalty of not less than five years or more than 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. He remains on bond and a sentencing date was not set.
According to plea documents filed in his case, Thornton kept a laptop at his residence that he used, to among other things, search the Internet for images and videos depicting minors engaged in sexually explicit conduct. Thornton used peer-to-peer file sharing software to receive the seven images described in the indictment, as well as many others.
The cases were 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.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Crockett County Sheriff’s Office investigated the Ramirez case. ICE HSI and the Lubbock County Sheriff’s Office investigated the Thornton case. Assistant U.S. Attorney Steven M. Sucsy is in charge of prosecuting both cases.
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MS-13 Gang Associate Sentenced to 20 Years in Prison for the Robbery of a Brothel that included a Rape and MurderRead the Press Release
Greenbelt, Maryland - U.S. District Judge Paul W. Grimm sentenced Alexsi Lopez, age 27, of Hyattsville, Maryland, today to 20 years in prison, followed by three years of supervised release, for conspiracy and the violent robbery of a Hyattsville brothel that resulted in a rape and murder. A federal jury convicted Lopez of those crimes on April 9, 2015.
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); and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to the evidence presented at his six day trial, Lopez was associated with the MS-13 gang and knew his co-defendant, Ramon Miguel Cerros-Cruz through MS-13. Evidence showed that Lopez and Cerros-Cruz familiarized themselves with the location and operation of brothels in the Hyattsville-Langley Park area of Prince George’s County, then planned the robbery of a Hyattsville brothel apartment. According to trial testimony, on February 28, 2007, Lopez and Cerros-Cruz entered the brothel apartment armed with knives, and using force and violence, demanded money from the people within the brothel and searched the apartment for cash and items of value. Witnesses testified that Lopez and Cerros-Cruz bound one of the brothel’s employees, raped another employee and murdered a third person who arrived at the brothel during the commission of the rape and robbery, stabbing him multiple times when he resisted the demands of the defendants. DNA evidence placed Lopez and Cerros-Cruz at the scene.
Ramon Miguel Cerros-Cruz, age 25, of Silver Spring, Maryland previously pleaded guilty to the robbery conspiracy and was sentenced of 10 years in prison.
United States Attorney Rod J. Rosenstein praised HSI Baltimore and the Prince George’s County Police Department for their work in the investigation and thanked the Prince Georges County Department of Corrections and the Maryland Department of Public Safety and Correctional Services for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Daniel C. Gardner, who prosecuted the case.
Long Island Man Charged with Sexual Exploitation, Enticement, and Child Pornography CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that HASSAN KHAN, a Long Island resident, was arrested today and charged in a criminal complaint with five counts stemming from his sexual exploitation and enticement of a minor and his receipt of child pornography. KHAN was presented today in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein.
U.S. Attorney Preet Bharara said: “As alleged, Hassan Khan sexually exploited an innocent child, beginning the grooming process when she was just 11 years old. This Office is dedicated to ensuring that those who sexually abuse children are held to account. I want to thank the FBI for their remarkable work in this case.”
Assistant Director-in-Charge Diego Rodriguez said: “Khan was arrested today for allegedly targeting, grooming, and exploiting a minor for several years. He carried out this illicit behavior by enticing her online and engaging in sexually explicit conduct with her, both in the United States and abroad. As this terrifying ordeal comes to an end, the nightmare continues for the victim and her family. Innocence, once stolen, is not easily restored. The FBI, with assistance from our local and international partners, will continue to pursue sexual predators, remove them from their hideaway, and deliver them into the arms of the law.”
According to the Complaint unsealed today in Manhattan federal court[1]:
In or about 2007, KHAN initiated online conversations with a then-11-year-old girl (the "Victim."). Between 2007 and 2013, KHAN, who was aware of the Victim's age, coerced and enticed the Victim to engage in illegal sexual activity. The Complaint further alleges that KHAN engaged in a sexual act with the Victim, and coerced and enticed the Victim to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
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KHAN, 28, was arrested today in Manhattan, New York. The Complaint charges KHAN in five counts. Counts One and Two charge KHAN with coercing and enticing a minor to engage in illegal sexual activity. Count Three charges KHAN with sexual exploitation of a child. Count Four charges KHAN with sexual exploitation of a child outside of the United States. Count Five charges KHAN with receipt of child pornography. Counts One and Two carry a mandatory minimum sentence of 10 years in prison and a maximum penalty of life in prison. Counts Three and Four carry a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison. Count Five carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the efforts of the FBI in this investigation. He added that the investigation is continuing. Any individuals who believe they have information concerning HASSAN KHAN that may be relevant to the investigation should contact the Federal Bureau of Investigation at 1-212-384-1000.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Alex Rossmiller is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Logan County Home Care Giver Guilty of Aggravated Identity TheftRead the Press Release
Ordered to pay $56,543.93 in restitution
BOWLING GREEN, Ky. – A Logan County, Kentucky home care giver pleaded guilty in U.S. District Court this week to identity theft and agreed to serve a 24 month prison sentence and agreed to pay restitution in the amount of $56,543.93 announced United States Attorney John E. Kuhn, Jr.
Crystal Hullett, age 38, of Russellville, pleaded guilty to five counts of aggravated identity theft before U.S. District Judge Greg Stivers on September 2, 2015.
According to the plea agreement, Hullett was a home care giver to the victim R.W. between June 2012 and January 2014. During that time, Hullett defrauded R.W. of money and property by making unauthorized purchases of personal items and gift cards at various merchants in Russellville, Kentucky by using R.W.’s debit card. Further, Hullett knowingly possessed and used the name, signature, and debit card of R.W. without lawful authority.
At the time of sentencing, the United States will move for the dismissal of counts 1,2,3,4, and 5 of the indictment and agree that a sentence of 24 months is appropriate. The restitution order of $56,543.93 is due at the time of sentencing on January 12, 2016, at 10:30am in Bowling Green, before Judge Stivers.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by United States Secret Service, United States Postal Inspection Service and the Russellville Police Department.
Lackawanna Man Sentenced for Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051Buffalo, N.Y.‐‐U.S. Attorney William J. Hochul, Jr. announced today that James M. Meyers, 29, of Lackawanna, NY, who was convicted of possession of child pornography, was sentenced to 30 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that on June 24, 2014, the Wyoming County Sheriff’s Department responded to a complaint in the Town of Pike. At that time, deputies were given a digital memory card (SD card) which contained what appeared to be images of child pornography. Subsequent investigation determined that the SD card belonged to the defendant. A forensic analysis determined the images were in fact child pornography. Some of the images contained graphic images of prepubescent children.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and the Wyoming County Sheriff’s Department, under the direction of Sheriff Gregory Rudolph.
Today’s indictment is the culmination of an investigation by the Federal Bureau of Investigation and the Buffalo Police Department, under the direction of Commissioner
Daniel Derenda.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Kentwood Woman Sentenced for Stealing Money from United States Post OfficeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that WANDA JAMES, age 46, of Kentwood, was sentenced today after previously pleading guilty to a one-count Bill of Information charging her with making false entries and reports of money belonging to the United States, and in the care, custody and control of the United States Postal Service.
According to court documents, on or about September 10, 2013 through and including on or about February 3, 2014, JAMES, being a Postal Service officer or employee charged with the duty of receiving, holding, or paying over moneys on behalf of the United States, knowingly and willfully made false reports of such moneys. On sixteen separate occasions, JAMES falsely recorded cash purchases of money orders as debit card purchases on her daily financial reports. She did this so she could steal the cash from the money order purchases and conceal the theft by reporting sales as debit card transactions, when, in fact, she well knew that no such purchases had been made. JAMES stole approximately $2,611.61 of United States funds in the custody of the Postal Service.
U.S. District Judge Jane Triche Milazzo sentenced JAMES to 36 months of probation, $100 special assessment, and restitution in the amount of $2,611.61.
U.S. Attorney Polite praised the work of the U.S. Department of Education and the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorney Sharan E. Lieberman was in charge of the prosecution.
Justice Department and University of Nebraska at Kearney Settle Lawsuit over Rights of Students with Psychological Disabilities to Have Assistance Animals in Student HousingRead the Press Release
The Justice Department announced today that the University of Nebraska at Kearney (UNK) and the Board of Regents of the University of Nebraska have agreed to settle a civil rights lawsuit brought by the department. Under the proposed settlement, which must still be approved by the United States District Court for the District of Nebraska in Lincoln, UNK will:
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pay $140,000 to two former students who sought and were denied reasonable accommodations to keep assistance animals in their university apartments; and
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change its housing policy to allow persons with psychological disabilities to keep animals with them in university housing where such animals provide necessary therapeutic benefits to such students.
The proposed settlement would resolve a lawsuit filed by the department in 2011. In that lawsuit, the department alleged that UNK violated the Fair Housing Act when, in 2010, it denied requests to allow two different students with psychological disabilities to keep an emotional support dog with them in University Heights, a 102-unit apartment complex that UNK operates for students near the UNK campus. One of the students filed a complaint with the Department of Housing and Urban Development (HUD), which investigated the complaint and referred it to the department. Under the proposed settlement, UNK has agreed to change its policy to accommodate similar requests going forward.
“This is an important settlement for students with disabilities not only at UNK but throughout the country,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Assistance animals such as emotional support dogs can provide critical support and therapeutic benefits for persons with psychological disabilities. The Fair Housing Act requires that universities accommodate students who need such animals in order to have an equal opportunity to enjoy the benefits of university housing.”
“Allowing a student with disabilities to keep an assistance animal is not only required by law, it can mean the difference between having the opportunity to attend college or not,” said Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “The department will continue to work with the Department of Justice to take appropriate action anytime the Fair Housing Act is violated.”
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777 or through HUD’s website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp.
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Justice Department Announces Enhanced Policy for Use of Cell-Site SimulatorsRead the Press Release
Increased Privacy Protections and Higher Legal Standards to Be Required
The Justice Department today announced a new policy for its use of cell-site simulators that will enhance transparency and accountability, improve training and supervision, establish a higher and more consistent legal standard and increase privacy protections in relation to law enforcement’s use of this critical technology.
The policy, which goes into effect immediately and applies department-wide, will provide department components with standard guidance for the use of cell-site simulators in the department’s domestic criminal investigations and will establish new management controls for the use of the technology.
“With the issuance of this policy, the Department of Justice reaffirms its commitment to hold itself to the highest standards as it performs its critical work to protect public safety,” said Deputy Attorney General Sally Quillian Yates. “Cell-site simulator technology has been instrumental in aiding law enforcement in a broad array of investigations, including kidnappings, fugitive investigations and complicated narcotics cases. This new policy ensures our protocols for this technology are consistent, well-managed and respectful of individuals’ privacy and civil liberties.”
Cell-site simulators are just one tool among many traditional law enforcement techniques and are deployed only in the fraction of cases in which the capability is best suited to achieve specific public safety objectives.
To enhance privacy protections, the new policy establishes a set of required practices with respect to the treatment of information collected through the use of cell-site simulators. This includes data handling requirements and an agency-level implementation of an auditing program to ensure that data is deleted consistent with this policy. For example, when the equipment is used to locate a known cellular device, all data must be deleted as soon as that device is located, and no less than once daily.
Additionally, the policy makes clear that cell-site simulators may not be used to collect the contents of any communication in the course of criminal investigations. This means data contained on the phone itself, such as emails, texts, contact lists and images, may not be collected using this technology.
While the department has, in the past, obtained appropriate legal authorizations to use cell-site simulators, law enforcement agents must now obtain a search warrant supported by probable cause before using a cell-site simulator. There are limited exceptions in the policy for exigent circumstances or exceptional circumstances where the law does not require a search warrant and circumstances make obtaining a search warrant impracticable. Department components will be required to track and report the number of times the technology is deployed under these exceptions.
To ensure that the use of the technology is well managed and consistent across the department, the policy requires appropriate supervision and approval.
Jicarilla Apache Man Pleads Guilty to Assaulting a Federally Commissioned Tribal OfficerRead the Press Release
ALBUQUERQUE – Lawrence Roybal, 53, a member of the Jicarilla Apache Nation who resides in Dulce, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to assaulting a federal officer. The guilty plea was entered without the benefit of a plea agreement.
Roybal was arrested in May 2015, on a criminal complaint charging him with assaulting an officer with a dangerous weapon. According to the criminal complaint, Roybal attacked a Jicarilla Apache Tribal Police Officer with a pitchfork on May 11, 2015. The crime occurred in Dulce, N.M., which is within the Jicarilla Apache Indian Reservation in Rio Arriba County, N.M.
Roybal was indicted on June 9, 2015, and charged with assaulting a federal officer who was engaged in the performance of his official duties. The indictment alleges that the victim was a tribal officer commissioned as a special federal officer by the BIA at the time of the assault.
Today, Roybal entered a guilty plea to the indictment. At sentencing, he faces a statutory maximum sentence of 20 years in federal prison. Roybal has been in custody since his arrest and remains detained pending his sentencing hearing.
This case was investigated by the Farmington office of the FBI and the Jicarilla Apache Tribal Police Department. Assistant U.S. Attorney Raquel Ruiz-Velez is prosecuting the case.
Jefferson County Man Guilty of Producing Child PornographyRead the Press Release
BEAUMONT, Texas – A 20-year-old Beaumont, Texas man has pleaded guilty to federal child exploitation charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Keith Dwayne Marks, Jr. pleaded guilty to production of child pornography today before U.S. Magistrate Judge Zack Hawthorn.
According to information presented in court, on May 21, 2014, law enforcement officers in Grand Prairie, Texas, were notified by a school nurse that a 10-year-old student had come to the nurse’s office feeling ill after receiving a photo on an instant messaging app of a male’s genitals. The student disclosed she had been communicating with the male through several instant messaging and internet video chats and that she knew him as Keith Marks from Beaumont, Texas. It was determined that Marks was a registered sex offender due to a June 3, 2013 conviction for possession of child pornography in Jefferson County, Texas. On Sep. 3, 2014, a search warrant was executed at Marks’s residence in Beaumont. During the search, law enforcement officers discovered images and a video containing child pornography. Further investigation enabled law enforcement officers to locate and identity of the 13-year-old child in those photos in the Houston area. The child confirmed Marks had coerced them into engaging in sexually explicit conduct while filming such conduct with a cellular phone. Marks was indicted by a federal grand jury on June 4, 2015.
Marks faces a minimum of 15 years and up to 30 years in federal prison. A sentencing date has not been set.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case is being investigated by Homeland Security Investigations (HSI), Beaumont Police Department, the Grand Prairie Police Department and the Pearland Police Department and prosecuted by Assistant U.S. Attorneys Randall L. Fluke and Marisa Miller.
Jacksonville Women Sentenced for Conspiracy to Defraud the United States and Aggravated Identity TheftRead the Press Release
Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan has sentenced two Jacksonville women for conspiracy to defraud the United States and aggravated identity theft. Laura Butler was sentenced to two years and one month in federal prison and Cherica Daniels was sentenced to 18 months’ imprisonment.
Butler pleaded guilty on March 6, 2015, and Daniels pleaded guilty on February 25, 2015.
According to court documents, in 2011, Butler worked at Blue Cross Blue Shield Florida and had access to personal identifying information. During her employment, she accessed several subscribers’ identities and later used them to file false and fraudulent income tax returns. Daniels also participated in the scheme to prepare and file false and fraudulent tax returns. During her initial encounter with law enforcement, Daniels had a black bag containing more than 200 identities, including more than 15 social security numbers.
The case was investigated by The Internal Revenue Service - Criminal Investigation. It was prosecuted by Assistant United States Attorney Kelly S. Karase.
Indictment: Storage Unit in Liberal Concealed Four Pounds of MethRead the Press Release
WICHITA, KAN. - Two people living in Liberal were indicted Wednesday on charges of trafficking more than four pounds of methamphetamine, U.S. Attorney Barry Grissom said.
Jose Alaniz-Hernandez, 37, and Anna Noreiga-Perez, 20, both of whom have been living in Liberal, Kan., were charged with one count of possession with intent to distribute methamphetamine. In court records, prosecutors allege that on Aug. 26, 2015, investigators served a search warrant at Space Station Secure Storage, 1120 E. Second Street in Liberal, Kan. In the unit, which was being used by the defendants, investigators found three Tupperware containers and 17 clear plastic bags containing approximately four pounds of methamphetamine.
“Methamphetamine is a principal drug threat in Kansas,” said U.S. Attorney Barry Grissom. “Whether it comes from laboratories in Mexico or it is locally produced, it is readily available in our communities, along with the violence and related crimes it supports.”
If convicted, the defendants face a penalty of not less than 10 years and a fine up to $4 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney David Lind is prosecuting.
OTHER INDICTMENTS
Azucena Garcia-Ferniza, 21, who has been living in Salina, Kan., is charged with one count of unlawful possession of a firearm by an alien illegally in the United States. The crime is alleged to have occurred May 7, 2015, in Saline County, Kan.
If convicted, she faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Calvin M. Hymon, 31, Topeka, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Aug. 2, 2015, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
Antonio Garcia-Viveros, 32, Kansas City, Kan., and Asuncion Cortez-Chavez, 27, Kansas City, Kan., are charged with one count of possession with intent to distribute methamphetamine. In addition, Garcia-Viveros is charged with one count of unlawful possession of a firearm in furtherance of drug trafficking. The crimes are alleged to have occurred Aug. 6, 2015, in Kansas City, Kan.
Upon conviction, the methamphetamine charge carries a penalty of not less than 10 years and a fine up to $10 million; and the firearm charge carries a penalty of not less than five years and a fine up to $250,000. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Trent Krug is prosecuting.
Jose Luis Garcia-Flores, 44, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported. He was found Aug. 21, 2015, in Finney County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Victor Ruiz-Arias, 45, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported. He was found Aug. 22, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Darnell Sharon O’Connor, 34, Overland Park, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred March 8, 2014, in Lawrence, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Lawrence Police Department investigated. Special Assistant U.S. Attorney James Ward is prosecuting.
Stephen M. Nelson, 26, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred March 8, 2014, in Kansas City, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The U.S. Marshals Service investigated. Special Assistant U.S. Attorney James Ward is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indictment Charges Three People with Running $54 Million “Green Energy” Ponzi SchemeRead the Press Release
An indictment was unsealed today charging three people in an investment scheme, involving a Bala Cynwyd, Pennsylvania-based company, that defrauded more than 300 investors from around the country. Troy Wragg, 34, a former resident of Philadelphia, Pennsylvania, Amanda Knorr, 32, of Hellertown, Pennsylvania, and Wayde McKelvy, 52, of Colorado, are charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, securities fraud and seven counts of wire fraud, announced U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge William F. Sweeney Jr of the FBI’s Philadelphia Division.
As the founders of the Mantria Corporation, Wragg and Knorr allegedly promised investors huge returns for investments in supposedly profitable business ventures in real estate and “green energy.” According to the indictment, Mantria was a Ponzi scheme in which new investor money was used to pay “earnings” to prior investors since the businesses actually generated meager revenues and no profits. To induce investors to invest funds, it is alleged that Wragg and Knorr repeatedly made false representations and material omissions about the economic state of their businesses.
Between 2005 and 2009, Wragg, Knorr and McKelvy, through Mantria, intended to raise over $100 million from investors through Private Placement Memorandums (PPMs). In actuality, they raised $54.5 million. Wragg and Knorr were allegedly able to raise such a large sum of money through the efforts of McKelvy. McKelvy operated what he called “Speed of Wealth” clubs which advertised on television, radio and the internet, held seminars for prospective investors and promised to make them rich. According to the indictment, McKelvy taught investors to liquidate all their assets such as mutual funds and 401k plans, to take out as many loans out as possible, such as home mortgages and credit card debt and invest all those funds in Mantria. During those seminars and other programs, Wragg, Knorr and McKelvy allegedly lied to prospective investors to dupe them into investing in Mantria and promised investment returns as high as 484 percent.
It is further alleged that Wragg, Knorr and McKelvy spent a considerable amount of the investor money on projects to give investors the impression that they were operating wildly profitable businesses. Wragg, Knorr and McKelvy allegedly used the remainder of the funds raised for their own personal enrichment. Wragg, Knorr and McKelvy allegedly continued to defraud investors until November 2009 when the SEC initiated civil securities fraud proceedings against Mantria in Colorado, shut down the company, and obtained an injunction to prevent them from raising any new funds. A receiver was appointed by the court to liquidate what few assets Mantria owned.
In order to lure prospective investors, it is alleged that Wragg, Knorr and McKelvy lied and omitted material facts to mislead investors as to the true financial status of Mantria, including grossly overstating the financial success of Mantria and promising excessive returns.
“The scheme alleged in this indictment offered investors the best of both worlds – investing in sustainable and clean energy products while also making a profit,” said U.S. Attorney Memeger. “Unfortunately for the investors, it was all a hoax and they lost precious savings. These defendants preyed on the emotions of their victims and sold them a scam. This office will continue to make every effort to deter criminals from engaging in these incredibly damaging financial crimes.”
“As alleged, these defendants lied about their intentions regarding investors’ money, pocketing a substantial portion for personal use,” said Special Agent in Charge Sweeney Jr. “So long as there are people with money to invest, there will likely be investment swindlers eager to take their money under false pretenses. The FBI will continue to work with its law enforcement and private sector partners to investigate those whose greed-based schemes rob individuals of their hard-earned money.”
If convicted of all charges, the defendants each face possible prison terms, fines, up to five years of supervised release and a $1,000 special assessment.
The criminal case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Robert J. Livermore. The SEC in Colorado investigated and litigated the civil securities fraud charges which formed the basis of the criminal prosecution.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Indictment Charges Three People with Running $54 Million "Green Energy" Ponzi SchemeRead the Press Release
PHILADELPHIA – An indictment was unsealed today charging three people in an investment scheme, involving a Bala Cynwyd, Pennsylvania-based company, that defrauded more than 300 investors from around the country. Troy Wragg, 34, a former resident of Philadelphia, PA, Amanda Knorr, 32, of Hellertown, PA, and Wayde McKelvy, 52, of Colorado, are charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, securities fraud, and seven counts of wire fraud, announced United States Attorney Zane David Memeger and FBI Special Agent-in-Charge William F. Sweeney, Jr.
As the founders of the Mantria Corporation, Wragg and Knorr allegedly promised investors huge returns for investments in supposedly profitable business ventures in real estate and “green energy.” According to the indictment, Mantria was a Ponzi scheme in which new investor money was used to pay “earnings” to prior investors since the businesses actually generated meager revenues and no profits. To induce investors to invest funds, it is alleged that Wragg and Knorr repeatedly made false representations and material omissions about the economic state of their businesses.
Between 2005 and 2009, Wragg, Knorr, and McKelvy, through Mantria, intended to raise over $100 million from investors through Private Placement Memorandums (PPMs). In actuality, they raised $54.5 million. Wragg and Knorr were allegedly able to raise such a large sum of money through the efforts of McKelvy. McKelvy operated what he called “Speed of Wealth” clubs which advertised on television, radio, and the internet, held seminars for prospective investors, and promised to make them rich. According to the indictment, McKelvy taught investors to liquidate all their assets such as mutual funds and 401k plans, to take out as many loans out as possible, such as home mortgages and credit card debt, and invest all those funds in Mantria. During those seminars and other programs, Wragg, Knorr, and McKelvy allegedly lied to prospective investors to dupe them into investing in Mantria and promised investment returns as high as 484%.
It is further alleged that Wragg, Knorr, and McKelvy spent a considerable amount of the investor money on projects to give investors the impression that they were operating wildly profitable businesses. Wragg, Knorr, and McKelvy allegedly used the remainder of the funds raised for their own personal enrichment. Wragg, Knorr, and McKelvy allegedly continued to defraud investors until November 2009 when the SEC initiated civil securities fraud proceedings against Mantria in Colorado, shut down the company, and obtained an injunction to prevent them from raising any new funds. A receiver was appointed by the court to liquidate what few assets Mantria owned.
In order to lure prospective investors, it is alleged that Wragg, Knorr, and McKelvy lied and omitted material facts to mislead investors as to the true financial status of Mantria, including grossly overstating the financial success of Mantria and promising excessive returns.
“The scheme alleged in this indictment offered investors the best of both worlds – investing in sustainable and clean energy products while also making a profit,” said Memeger. “Unfortunately for the investors, it was all a hoax and they lost precious savings. These defendants preyed on the emotions of their victims and sold them a scam. This office will continue to make every effort to deter criminals from engaging in these incredibly damaging financial crimes.”
“As alleged, these defendants lied about their intentions regarding investors’ money, pocketing a substantial portion for personal use,” said Sweeney. “So long as there are people with money to invest, there will likely be investment swindlers eager to take their money under false pretenses. The FBI will continue to work with its law enforcement and private sector partners to investigate those whose greed-based schemes rob individuals of their hard-earned money.”
If convicted of all charges, the defendants each face possible prison terms, fines, up to five years of supervised release, and a $1,000 special assessment.
The criminal case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Robert J. Livermore. The SEC in Colorado investigated and litigated the civil securities fraud charges which formed the basis of the criminal prosecution.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Hospice Facility and Its Manager/Majority Owner to Pay Approximately $5.86 Million to Resolve Continuous Home Care Hospice Fraud AllegationsRead the Press Release
Jackson, Miss. - St. Joseph Hospice Entities, which consists of 13 hospice facilities in Mississippi, Louisiana, Texas and Alabama, and Patrick T. Mitchell, its majority owner and manager, have agreed to pay the United States $5,867,518 under the False Claims Act to resolve allegations that they submitted false claims for delivery of continuous home care hospice services to patients who were not entitled to receive continuous care hospice level treatment, announced United States Attorney Gregory K. Davis, Special Agent in Charge Derrick L. Jackson with the U.S. Department of Health and Human Services - Office of Inspector General, and FBI Special Agent in Charge Donald Alway.
Continuous home care hospice services, sometimes called crisis care services, are provided to hospice-eligible patients in moments of crisis resulting from acute medical symptoms. This level of care is available to a patient when the patient’s acute medical symptoms require immediate and short-term skilled nursing services, allowing the patient to remain in his/her home during a very difficult time. Medicare pays for continuous care hospice services at a rate that is nearly 6 times that of the daily rate for routine home hospice care. The continuous home care reimbursement rate is the highest daily rate a hospice can bill Medicare. Because continuous home care hospice services are limited to moments of crisis and have stringent criteria, they are rarely used.
During the government’s investigation, it was discovered that St. Joseph Hospice was an outlier in its use and billing of continuous care hospice services. The government found that there were a significant number of patients who received continuous care hospice services when there was no crisis, and thus, they were not eligible for such services. The result of this misuse of the continuous home care hospice benefit was millions of dollars of false claims submitted to and paid by the government.
"While the government finds it necessary to provide this very important benefit to its citizens during a time of crisis, it is sometimes the case that companies and/or individuals will abuse the provision of this service through aggressive marketing practices, thrusting patients into services they really do not need in order to increase the company’s reimbursement rate and its bottom line," said United States Attorney Gregory K. Davis. "We will continue to investigate and root out this and other types of healthcare fraud. This is a very important aspect of the work we do, particularly given that healthcare fraud costs taxpayers tens of billions of dollars a year." In addition to saving taxpayer dollars, the United States Attorney believes that such efforts will be important in continuing to stem the tide of rising health care costs.
"St. Joseph Hospice Entities allegedly maxed out Medicare’s hospice benefit to make as much profit as possible," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The Office of Inspector General will continue to work aggressively to eliminate this type of greed in our health care system."
"This type of fraud steals from government programs designed to assist deserving patients," stated Donald Alway, Special Agent in Charge of the FBI in Mississippi. "Our success in this case is an excellent example of the effectiveness of collaboration between federal agencies, and evidence of our commitment to protect the American taxpayer and the integrity of our federal assistance programs."
The allegations in this case arose from a lawsuit filed by 3 whistleblowers, who were former employees of the company, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Such private citizens are referred to as relators. The relators in this case will receive a little more than $1 million from the recovery announced today. The case is styled as United States v. St. Joseph Hospice, et al., Case No. 1:12cv393 (S.D. Miss.).
The investigation and settlement were the result of a coordinated effort among the Office of the United States Attorney for the Southern District of Mississippi, the Federal Bureau of Investigation and the U.S. Department of Health and Human Services - Office of Inspector General. The United States was represented by Assistant United States Attorney Angela Givens Williams.
In addition to the payment of the settlement amount, St. Joseph Hospice Entities has agreed to submit to ongoing monitoring by HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Granite Bay Man Pleads Guilty in Scheme That Defrauded Investors in “Green” Cleaning Product CompanyRead the Press Release
SACRAMENTO, Calif. — Brent Lee Newbold, 58, of Granite Bay, pleaded guilty today to wire fraud and agreed to submit to a restitution order of at least $2.9 million, United States Attorney Benjamin B. Wagner announced.
Newbold was employed as chief executive officer of Holy Cow, a Rocklin-based business that produced a “green” cleaning product, marketed to stores such as Wal‑Mart, ACE Hardware, and Bed, Bath & Beyond.
According to court documents, between October 2007 and January 2010, Newbold engaged in a scheme to defraud investors and lenders. He made a variety of misrepresentations to investors about the financial health of the company, including the company’s debt levels and how invested funds would be used. In fact, Holy Cow bore a significant amount of debt, and Newbold continued to assume additional debt related to Holy Cow. Newbold used investor funds for nonbusiness purposes, diverting it to himself and his wife, paying his mortgage, and paying previous investors.
Based on Newbold’s claims, a corporate investor, Spence Enterprises, invested $2 million in Holy Cow. According to the plea agreement, Newbold, without authorization, diverted over $950,000 from Holy Cow corporate accounts to himself, his wife, his mortgage company, and his previous lenders and investors. Over $550,000 of that money had been invested by Spence Enterprises. When Spence Enterprises learned of Newbold’s diversion of money, they reprimanded him and told him to repay the money.
After he was confronted by Spence Enterprises, Newbold opened a secret account at American River Bank in the name of Holy Cow Inc. Newbold was the sole signatory on the account, and the account statements were sent to Newbold’s residence. Newbold used the bank account to receive funds from undisclosed individual investors in Holy Cow.
Between July 2008 and January 2010, Newbold solicited over 10 individual investors. Newbold falsely claimed that he was authorized to act on behalf of Holy Cow; that he owned Holy Cow; he owned the majority of Holy Cow stock; Holy Cow was financially sound, stable and profitable. In some cases, Newbold provided his individual investors with false Holy Cow stock certificates, false Holy Cow purchase order reports, and corporate promissory notes.
By December 2009, Spence Enterprises put Holy Cow into bankruptcy as a result of the unauthorized and undisclosed debt Newbold was taking on in connection with Holy Cow. The gross loss amount in this case is over $2.9 million.
“The defendant raised money from investors through misrepresentations and false promises,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “Then, without authorization, the defendant diverted approximately $1 million to himself, his wife, his mortgage company, and his previous lenders and investors. This chain of events led the company into bankruptcy. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.
Newbold is scheduled to be sentenced on December 3, 2015, by United States District Judge Morrison C. England Jr. Newbold faces a maximum sentence of 20 years in prison, a $250,000 fine, and a three-year term of supervised release. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Genzyme Corporation to Pay $32.5 Million to Resolve Criminal Liability Relating to SeprafilmRead the Press Release
Sanofi Subsidiary Admits Unlawful Conduct and Agrees to Enhance its Compliance Program
Genzyme Corporation, a wholly-owned biotechnology subsidiary of French pharmaceutical company Sanofi, agreed today to resolve criminal charges that it violated the federal Food, Drug and Cosmetic Act (FDCA) with regard to the unlawful distribution of Seprafilm, a surgical device it markets and promotes, the Justice Department announced.
As part of the agreed resolution, the department filed a two-count criminal information in the U.S. District Court for the Middle District of Florida charging that between 2005 and 2010, Genzyme caused a medical device to become adulterated and misbranded while being held for sale. The conduct occurred prior to Sanofi’s acquisition of Genzyme, based in Cambridge, Massachusetts, in 2011. To resolve these charges, Genzyme agreed to enter into a deferred prosecution agreement with the government for a term of at least two years. As part of the agreement, Genzyme agreed to admit to and accept responsibility for the facts underlying the charges and pay a monetary penalty of $32,587,439. It further agreed to undertake several groundbreaking measures to enhance its internal compliance program. The agreement also acknowledges the significant level of cooperation Genzyme provided to the government during its investigation as well as the company’s independent remediation efforts.
Along with the information, the government also filed a consent motion with the court, requesting that its case against Genzyme be stayed during the term of the agreement. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
Today’s agreement is in addition to a separate $22.28 million civil agreement the government reached with Genzyme in December 2013 to resolve allegations under the False Claims Act related to Seprafilm. After today’s agreement, Genzyme will have paid almost $55 million to resolve government allegations regarding Seprafilm. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
“Today’s action demonstrates that the Department of Justice will evaluate the facts of each case and choose the most appropriate tool of the several available to it to best address criminal misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The deferred prosecution agreement with Genzyme is yet another example of the department’s continuing efforts to ensure that pharmaceutical and medical device manufacturers adhere to laws and regulations that have been put in place to protect the health and safety of the American public.”
According to the papers filed in the district court today, Seprafilm is a clear piece of film that can be applied to internal tissues during pelvic and abdominal surgeries to reduce the formation of adhesions—bands of scar tissue that can form between traumatized tissues and organs after surgery, causing them to stick together. Seprafilm was approved by the U.S. Food and Drug Administration (FDA) for use in patients undergoing open abdominal or pelvic laparotomy, which is a traditional surgical technique that utilizes a relatively large incision to permit the surgeon to open and view the patient’s abdominopelvic contents. Over time, laparotomy became a less common surgical technique in favor of laparoscopic surgery, which is perceived to have several advantages for the patient.
To respond to the diminishing number of laparotomies performed, some Genzyme sales representatives taught surgeons and other medical staff how to mix the Seprafilm sheets into a liquid “slurry” that could be squirted through the narrow tubes used during laparoscopic surgery, even though Seprafilm was never indicated or FDA-approved for use in laparoscopic procedures. Genzyme sales representatives’ participation in the preparation of slurry in the operating room caused Seprafilm to become adulterated, according to the criminal charges.
During the course of the government’s investigation regarding Seprafilm slurry, Genzyme voluntarily disclosed to the government that it had distributed promotional material for Seprafilm that implied that Seprafilm had been proven safe and effective for use in gynecologic cancer surgeries, even though Seprafilm’s FDA-approved label cautioned that the device had not been clinically evaluated in the presence of malignancies. Genzyme based its claim on a study that involved only fourteen patients, which was far too few to support such an assertion. A separate count in the government’s information charges that Genzyme’s use of this misleading promotional material caused Seprafilm to become misbranded while held for sale.
“Patients rely heavily on the integrity and efficacy of claims made by manufacturers of medical products,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “When manufacturers make misleading statements about using their products in ways that have not been approved by the FDA, patient care, confidence, and safety are put at risk.”
The case has been handled by Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Simon Gaugush, Chief of the General Crimes Section at the U.S. Attorney’s Office of the Middle District of Florida, with support from FDA’s Office of Criminal Investigations and Office of Chief Counsel.
Fresno Podiatrist Indicted for Health Care FraudRead the Press Release
FRESNO, Calif. — A federal grand jury returned a 20-count indictment today against Franklyn Collier Jones, 52, of Fresno, charging him with health care fraud and making false statements relating to a health care matter, United States Attorney Benjamin B. Wagner announced.
According to court documents, Jones practiced podiatry in Fresno. Between 2010 and 2015, Jones allegedly billed Medicare for surgical procedures called avulsions and matrixectomies that he did not perform. In fact, Jones allegedly performed only routine foot care on the patients, such as clipping of toe nails. Jones allegedly billed more than $141,000 for these surgical procedures during this time period.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Mark J. McKeon and Patrick R. Delahunty are prosecuting the case.
If convicted, Jones faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each count of health care fraud; and 5 years in prison and a $250,000 fine for each count of making a false statement. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Texas D.P.S. Employee Charged by Federal Indictment for Illegal Drivers License SchemeRead the Press Release
In San Antonio today, federal and state authorities arrested 47-year-old Linda A. Perez for her alleged role in a an illegal driver’s license scheme announced United States Attorney Richard L. Durbin, Jr., Texas Department of Public Safety (DPS) Director Steven C. McCraw and Acting Special Agent in Charge Aristides “Harry” Jimenez, Homeland Security Investigations (HSI) San Antonio.
Perez is charged by federal grand jury indictment, returned yesterday, with one count of transfer of a false identification document and four counts of use of an interstate wire facility in aid of unlawful activity.
According to the indictment, from November 2014 until May 2015, the former DPS Driver’s License Division Customer Service Representative in San Antonio received bribes to process Texas driver’s licenses for undocumented aliens. The bribes she allegedly accepted amounted to between $1,000 and $2,000 for each fraudulent license. The indictment further alleges that Perez would input materially fraudulent information into the Texas DPS computer system in order to process and issue, by U.S. Mail, the driver’s license to the undocumented alien.
Perez had her initial appearance in federal court this afternoon. She was released on a $30,000 bond. No trial date has been scheduled. Upon conviction, Perez faces up to 15 years in federal prison on the transfer count and up to five years in federal prison on each of the remaining counts.
This investigation was conducted by the Texas Rangers along with HSI special agents. Assistant United States Attorney Tom Moore is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is considered innocent until proven guilty in a court of law.
Former Savannah ATF Task Force Officer Charged with Theft of Government MoneyRead the Press Release
Savannah, Ga. – Former ATF Task Force Officer Daryle McCormick has been arraigned on a charge that he fraudulently claimed to have worked approximately 800 hours of overtime resulting in more than $19,500 in additional wages.
“As a federal officer, McCormick was expected – at the very least – to obey the laws that he swore to enforce,” said U.S. Attorney John Horn. “The indictment alleges McCormick violated the law and the trust placed in him by bilking the government out of almost $20,000 in overtime for hours he never worked.”
“The integrity of law enforcement is just as much, if not more, at the heart of these allegations as the monetary loss amounts are. The allegations contained in these charges are serious and the government’s response to those allegations reflects it,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The DOJ OIG appreciates the efforts of the U.S. Attorney’s Office and the FBI to protect taxpayer funds and ensure that federal task force officers are held to the same high standards as any federal employee,” said Special Agent in Charge Robert Bourbon of the DOJ OIG’s Miami Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: From approximately November 25, 1996, to May 7, 2015, Daryle McCormick served as a police officer with Savannah-Chatham Metropolitan Police Department headquartered in Savannah, Georgia. From that position, McCormick became a federally‑deputized Task Force Officer with the U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”). McCormick served as a Task Force Officer with the ATF from approximately September 6, 2005 to June 17, 2014.
As an ATF Task Force Officer, McCormick was eligible to receive overtime pay for working more than eight hours per day. To be paid, McCormick was required to submit an overtime pay request to the ATF, listing the dates worked, the number of hours worked, and the general subject matter of the work. When submitting requests to be paid for overtime hours purportedly worked, McCormick made the following certification: “I certify that the above time was duly earned. I understand that my misstatement concerning the aforementioned time may be cause for dismissal.” Ultimately, when approved, payments for McCormick’s fraudulently claimed overtime came from the U.S. Department of Justice.
From October 2010 to September 2013, McCormick allegedly engaged in a scheme to unlawfully commit overtime fraud by repeatedly submitting overtime payment requests to the ATF for hours that he never worked. For example: the indictment alleges that: (1) McCormick claimed to work overtime on days when he had worked a full day with the ATF and had also worked up to an additional four hours at a second job for a local church; (2) McCormick claimed to have worked overtime conducting surveillance or undercover operations, even though no ATF operations occurred on those dates; and (3) McCormick claimed to have worked overtime conducting surveillance or undercover operations; however, McCormick never drafted reports summarizing the alleged ATF operations.
According to the indictment, from approximately October 18, 2010 to September 28, 2013, McCormick falsely claimed to have worked almost 800 hours in overtime when in fact, he had not worked those overtime hours. Based on those false overtime requests, the Department of Justice paid McCormick more than $19,500 for overtime hours that McCormick never worked.
On August 31, 2015, Daryle McCormick, 47, of Pooler, Georgia, was charged via criminal information with Theft of Government Money.
Members of the public are reminded that the information only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Justice Office of the Inspector General.
Special Assistant U.S Attorney Jeffrey W. Davis is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former New Jersey Resident Sentenced to 37 Months in Prison for Defrauding U.S. Subsidiary of Foreign Investment Bank of More Than $1.5 MillionRead the Press Release
TRENTON, N.J. - A former New Jersey resident who previously worked for the United States subsidiary of a foreign investment bank was sentenced today to 37 months in prison for orchestrating a scheme to defraud his former employer out of more than $1.5 million, U.S. Attorney Paul J. Fishman announced.
Michael Lieberman, 44, formerly of New Jersey and currently a resident of Huntersville, North Carolina, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of wire fraud for executing a scheme over the course of two years, through which he fraudulently transferred more than $1.5 million from accounts of his former employer to bank accounts he controlled. Judge Cooper imposed the sentenced today in Trenton federal court.
According to documents filed in this case and statements made in court:
Lieberman was employed by “Company A,” a United States-based subsidiary of an international investment bank, in its International Settlements Group in Iselin, New Jersey. Company A engaged in and settled cross-border securities transactions and acted as a settlement agent for similar securities transactions entered into by its broker-dealer clients. Company A’s International Settlements Group was responsible for, among other things, wiring funds to settle various securities transactions.
From June 2012 through May 2014, Lieberman devised a scheme to use his position in the International Settlements Group to initiate more than 50 separate fraudulent wire transfers of Company A’s money, directing the proceeds to bank accounts he either owned or controlled. Lieberman then spent Company A’s money for his own purposes, including purchasing a home in North Carolina, making tens of thousands of dollars in credit card payments and spending hundreds of thousands of dollars on hotels, airplane tickets, home furnishings, restaurant tabs and other expenditures.
Lieberman took various steps to conceal his fraudulent activities, including making fictitious entries in Company A’s bookkeeping system and supplying phony documents to others in order to cause them to make false entries in the company’s books and records reflecting fake profits on non-existent transactions.
In addition to the prison term, Judge Cooper sentenced Lieberman to two years of supervised release, ordered him to pay restitution of $1,640,822 and forfeited his house in North Carolina, which he had purchased with embezzled funds.
U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Richard M. Frankel in Newark with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Paul Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit, Zach Intrater, Chief of the General Crimes Unit, and Barbara Ward of the Asset Forfeiture and Money Laundering Unit, in Newark.
This arrest is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Defense counsel: Linda Pellegrino Esq., Newton, New Jersey
Former Director of Detox Center Convicted of Health Care Fraud and Aggravated Identity TheftRead the Press Release
BATON ROUGE – United States Attorney Walt Green announced the conviction of SHANTA R. BARNES, age 49, of Baton Rouge, Louisiana, for health care fraud and aggravated identity theft. Earlier today, BARNES appeared before U.S. District Judge James J. Brady and pled guilty. BARNES also admitted to the forfeiture allegations contained in the Indictment, which was previously returned by a federal grand jury.
According to court documents, BARNES served as the program director of an in-patient drug rehabilitation and detoxification treatment center in Baton Rouge known as Louisiana Health and Rehabilitation Options. As program director, BARNES had access to patients’ personal identifying information, including their dates of birth and Medicaid identification numbers. Through her scheme, BARNES unlawfully enriched herself by using patients’ information, without their knowledge or authorization, to fraudulently obtain powerful narcotic drugs, which she then diverted for her own benefit. By obtaining fraudulent prescriptions in the names of Medicaid recipients and causing the submission of fraudulent claims to Medicaid, BARNES drastically reduced her out-of-pocket costs. As a result of her scheme, BARNES obtained almost 6,000 80-mg oxycodone pills over a period of less than one year.
U.S. Attorney Green stated, “Today’s conviction is the latest example of my office’s commitment to combating health care fraud and drug diversion. This defendant abused her position of trust within a community health care provider and took unlawful advantage of her access to patient records in order to generate and fill dozens of fraudulent prescriptions for powerful and addictive controlled substances. In these types of cases, the defendant lines his or her pockets while fueling others’ painful addictions to controlled substances, attempting to hide criminal conduct behind the guise of being a medical professional. Not only is a serious federal crime, but these schemes are a disservice to the vast majority of medical professionals who are honest and committed to quality patient care. I appreciate all of the hard work and assistance my office has received in this investigation from the U.S. Department of Health & Human Services’ Office of Inspector General, the Drug Enforcement Administration, and our state partners.”
“Prescription drug abuse is an extremely serious problem, not just in Louisiana, but nationwide,” said DEA Assistant Special Agent in Charge Joseph Shepherd. “DEA and our law enforcement partners will continue to investigate professionals in the medical field who operate as drug peddlers. Those persons who disregard their ethical and legal obligations while dispensing pharmaceuticals will be forced to bear the consequences of their actions.”
CJ Porter, the Special Agent in Charge of the Dallas Regional Office for the US Department of Health and Human Services, Office of Inspector General - Investigations, stated: “Prescription drug fraud schemes are rampant, and often include medical identity theft. The criminal prosecution of this defendant, and those like her who are involved in these types of schemes, is an example of our ongoing efforts to address the national prescription drug crisis”
The case is being investigated by the U.S. Department of Health & Human Services’ Office of Inspector General and the Drug Enforcement Administration, with assistance from the Louisiana Department of Health and Hospitals and the Louisiana State Board of Nursing. The case is being prosecuted by Assistant U.S. Attorneys Cam T. Le and Jessica M.P. Thornhill.
Florida Woman Pleads Guilty to Bogus Loan SchemeRead the Press Release
BOSTON – A Florida woman pleaded guilty today in connection with an advance fee scheme involving approximately 100 victims throughout the United States, including many in Massachusetts.
Ann Elizabeth Ursiny, a/k/a Ann Stone, 51, pleaded guilty to 19 counts of mail fraud and 17 counts of wire fraud all in connection with a fraudulent advance fee scheme in which individuals were induced to pay up-front fees to Ursiny and her entity Trace Financial Group, Inc. (“Trace”) based on representations that those individuals would receive real estate loans, when in fact Ursiny never intended to make any such loans. Ursiny was indicted in May 2014. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Dec. 9, 2015. Ursiny’s codefendant, Robert O’Connor, pleaded guilty in June 2015 to participating in the same scheme by recruiting victims to apply for loans and pay the advance fees. O’Connor is scheduled to be sentenced on March 23, 2016.
From early 2010 to 2011, Ursiny recruited agents, including O’Connor, in several states to solicit individuals to apply for real estate loans through Trace and pay the advance fees. In return, the agents were paid a portion of those advance fees. Ursiny told prospective victims that Trace had successfully processed and disbursed many loans, when, in fact, none were ever disbursed. Ursiny focused the scheme on prospective applicants who had poor credit or whose homes were underwater, and represented that Trace could replace their mortgage with a new, smaller mortgage with lower mortgage interest payments. In fact, Trace never funded any of the loans, and failed to pay refunds as promised. Victims’ funds were used for Ursiny’s personal and family expenses, and to pay “commissions” to agents.
The charging statutes each provide a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.