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Tuesday 25 August 2015
Grand Island Woman Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that on August 25, 2015, Nicole Renee Contreras, age 33 of Grand Island, was sentenced to 10 years (120 months) in prison for her role in a conspiracy to distribute and possess with the intent to distribute 50 grams or more of methamphetamine (actual), 500 grams or more of a mixture or substance containing methamphetamine, a mixture or substance containing cocaine, and a mixture or substance containing marijuana between January of 2010 and October 16, 2014. Following the prison term, Contreras will serve five years on supervised release.
Information provided to law enforcement established that Contreras was responsible for the distribution of at least 50 grams of methamphetamine (actual), at least 500 grams (approximately 18 ounces) of methamphetamine mixture, and small amounts of cocaine and marijuana during that time-period. On October 16, 2014, Contreras was contacted by narcotics officers at a Lincoln motel and gave the officers consent to search which led to the discovery of a total of approximately 95 grams of methamphetamine, approximately one ounce of marijuana and a small amount of cocaine. Contreras admitted to the officers that she had sold methamphetamine from the motel room prior to the officers’ arrival.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Four More Plead Guilty to Tax Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that four more co-defendants have pleaded guilty in federal court to aiding and abetting a fraudulent tax return preparation scheme that claimed nearly $340,000 in fraudulent income tax refunds.
Jeannie Marie Rhodes, 34, of Springfield, Mo., pleaded guilty before U.S. Magistrate Judge David P. Rush today to making a false claim.
Shawna Marie Hughey, 37, of Joplin, Mo., formerly of Springfield, Johnny L. Cooper, 28, of Springfield, and William J. Coonce, 29, of Otterville, Mo., pleaded guilty on Monday, Aug. 24, 2015. Hughey and Coonce each pleaded guilty to two counts of making false claims. Cooper pleaded guilty to one count of making a false claim.
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.
Rhodes admitted that she aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing a false federal income tax return in 2012. The return listed wages that Rhodes had not received and claimed a refund to which Rhodes knew she was not entitled. Rhodes provided his personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $6,881.
Hughey admitted that she aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing false federal income tax returns in 2011 and 2012. Both returns listed wages that Hughey had not received and claimed refunds to which Hughey knew she was not entitled. Hughey provided her personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $22,626. Hughey also admitted that she paid Dupuis approximately $1,500 for the preparation of her and Cooper’s 2011 federal income tax returns.
Cooper admitted that he aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing a false federal income tax return in 2012. The return listed wages that Cooper had not received and claimed a refund to which Cooper knew he was not entitled. Cooper provided his personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $10,100. Cooper also admitted that he paid Dupuis approximately $2,000 from the proceeds of his fraudulent tax refund.
Coonce admitted that he aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing false federal income tax returns in 2010 and 2011. Both returns listed wages that Coonce had not received and claimed refunds to which Coonce knew he was not entitled. Coonce provided his personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $15,652. Coonce also admitted that he paid Dupuis approximately half of the proceeds of his fraudulent tax refunds.
Co-defendants 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 pleaded guilty to the same charges.
Under federal statutes, Hughey and Coonce are each subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. Rhodes and Cooper are each 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. Sentencing hearings will be scheduled after the completion of presentence investigations 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.
Former Township Tax Collector Sentenced to Five Years' Probation for Theft of $300,000 in Public FundsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a York County woman was sentenced today to 5 years’ probation by U.S. District Court Judge Sylvia H. Rambo for theft of public funds.
According to United States Attorney Peter Smith, Melissa Ann Arnold, age 46, was charged in February 2015 for stealing more than $300,000 from tax payments made by citizens to Spring Garden Township, York County during 2008 and 2009. Arnold was the Treasurer and Tax Collector for Spring Garden Township from 1995 until October 2009. Arnold was able to steal the tax payments because many of the checks were written out to her and, rather than deposit the checks into the Township’s account, she deposited them into her personal account.
Arnold pled guilty in March 2015.
York County submitted an insurance claim for the funds and received a significant repayment. Arnold entered into an agreement with the insurance company to pay back the full amount of the claim and has already paid almost $50,000 of the amount due.
Judge Rambo made payment of the balance, as well as an additional sum of almost $28,000 to Spring Garden Township for related losses, part of Arnold’s sentence in a restitution order.
The case was investigated by the Federal Bureau of Investigation with assistance of the Pennsylvania State Police and Spring Garden Township Police Department, and was prosecuted by Assistant U.S. Attorney James T. Clancy.
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Former Owner of “Direct Tax” Preparation Business Pleads Guilty in Tax Fraud ScamRead the Press Release
ATLANTA - Jessica L. Hills, the former owner of Direct Tax, has pleaded guilty for her role in a tax fraud scheme by using her business to file thousands of fraudulent returns. Direct Tax was a tax preparation business with three locations in the Atlanta - College Park, Georgia, area.
“The defendant’s conduct cost the U.S. Treasury millions of dollars,” said U.S. Attorney John Horn. “Hills’ actions demonstrated a flagrant disrespect for the law, and compromised the personal information of hundreds of victims.”
“Hills’ actions caused considerable financial damage and personal inconvenience to thousands of taxpayers” stated IRS Criminal Investigation Special Agent in Charge, Veronica F. Hyman-Pillot. “We will continue to pursue individuals like Hills, who abuse positions of trust to commit crimes and victimize members of our community and innocent taxpayers for their own personal gain.”
According to U.S. Attorney Horn, the charges and other information presented in court: During tax years 2012, 2013, and 2014, Direct Tax filed over 2,000 federal income tax returns, seeking millions of dollars in refunds. These returns included either fraudulent information designed to increase the refund amount, or were filed using stolen identities. Hills continued to file fraudulent tax returns even after police in College Park, Georgia, executed a search warrant at her business based on complaints from honest taxpayers, and after the IRS cancelled her electronic filing identification number. In total, Hills filed tax returns claiming over $4 million in tax refunds.
Sentencing for Jessica L. Hills, 30, of Atlanta, Georgia, is scheduled for November 9, 2015, at 10:30 a.m., before U.S. District Judge Steve C. Jones.
This case is being investigated by the Internal Revenue Service Criminal Investigation, FBI, Social Security Administration, U.S. Secret Service, and the Georgia Department of Revenue.
Special Assistant U.S. Attorney Diane C. Schulman and Assistant U.S. Attorney Samir Kaushal are 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 Atlanta Division is http://www.justice.gov/usao-ndga.
Former Owner and Operator of NYC Health Clinics Sentenced in Manhattan Federal Court for $30 Million Medicare Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that OSCAR HUACHILLO, the former owner and operator of multiple HIV/AIDS clinics in New York City, was sentenced today in Manhattan federal court to 87 months in prison for orchestrating a scheme to defraud Medicare out of more than $31 million; he was also sentenced to 60 months in prison, to be served concurrently, for evading more than $3.4 million in federal income taxes by falsely underreporting his income. As part of the scheme, HUACHILLO submitted bills to Medicare for expensive treatments that were administered at highly diluted doses or never administered at all, and were often unnecessary. HUACHILLO previously pled guilty to conspiring to commit health care fraud and committing tax evasion before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Oscar Huachillo defrauded Medicare out of tens of millions of dollars and evaded millions of dollars in taxes on his illegal windfall. His schemes put patients at risk, undermined and exploited the Medicare program, and cheated honest taxpayers.”
According to the criminal complaint, superseding information, and other documents filed in Manhattan federal court, as well as statements made at related court proceedings:
HUACHILLO set up and operated multiple health care clinics in New York City that purported to provide injection and infusion treatments to Medicare-eligible HIV/AIDS patients, but that were, in reality, health care fraud mills (the “Clinics”) that routinely billed Medicare for medications that were never provided or were provided at highly diluted doses, and that were often unnecessary because the person being “treated” did not medically need the treatments.
HUACHILLO and his co-conspirators executed the fraudulent scheme by recruiting HIV/AIDS patients who were eligible for Medicare to come to the Clinics multiple times per week, for multiple months, to undergo expensive “treatments” that were often unnecessary. The purported treatments included drugs costing hundreds of dollars each to administer and typically reserved for cancer and anemia patients. HUACHILLO and his co-conspirators paid the patients cash kickbacks of up to $300 per week in exchange for coming to the Clinics and agreeing to undergo the treatments. Patients were also offered approximately $50 for each additional patient they referred to the Clinics. HUACHILLO and his co-conspirators then used these patients’ status as Medicare beneficiaries to submit claims to Medicare for reimbursement for the treatments purportedly administered to the patients, often receiving tens of thousands of dollars in reimbursements per patient. As a result of the scheme, from 2009 through 2013, HUACHILLO and his co-conspirators defrauded the Medicare system out of at least $31 million.
In addition, HUACHILLO willfully evaded over $3.4 million in taxes owed to the IRS during the tax years 2009 through 2011 by falsely underreporting his taxable income, including income he had obtained through fraudulent Medicare claims.
In pronouncing the sentence, Judge Failla said, “[I]n the cases I’ve had as a judge, this is the worst fraud I’ve had. $31 million in losses; that’s terrible.” She also said, “The conduct is simply reprehensible.”
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In addition to the term of prison, HUACHILLO, 55, of Manhattan, was sentenced to three years of supervised release and was ordered to pay $3,454,244.16 in restitution and $31,177,987.84 in forfeiture, including forfeiture of approximately $14 million of assets that were seized at or around the time of HUACHILLO’s arrest in August 2013.
George Juvier, 58, of Manhattan, has been charged separately in connection with the Medicare fraud scheme. In January 2015, Juvier pled guilty to engaging in a health care fraud conspiracy before U.S. Magistrate Judge Frank Maas. Juvier is scheduled to be sentenced at 11:00 a.m. on October 8, 2015, by U.S. District Judge Kimba M. Wood.
Mr. Bharara praised the outstanding efforts of the Department of Health and Human Services-Office of the Inspector General, IRS-Criminal Investigation Division, and the Federal Bureau of Investigation in the investigation. Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Jonathan Cohen is in charge of the prosecution.
Former Omaha Man Sentenced for Tax EvasionRead the Press Release
United States Attorney Deborah R. Gilg and Andrew M. Thornton, Acting Special Agent in Charge of IRS Criminal Investigation, announced that on August 25, 2015, Chet Lee West, 59, of Nebo, North Carolina, was sentenced following his conviction on felony tax charges. West was convicted on February 25, 2015, after a jury found him guilty of three counts of tax evasion relating to tax years 2007, 2008 and 2009. Chief Judge Laurie Smith Camp sentenced West to 51 months imprisonment. After his release from prison, West will begin a term of supervised release of 3 years. West was also ordered to make restitution in the amount of $439,515.81.
An investigation conducted by the Internal Revenue Service determined that from 2007 through 2009 West earned taxable income of approximately $272,224.00 while living and working in Omaha, Nebraska. Upon that income West had a tax due and owing of approximately $52,824.00. West willfully evaded his personal income taxes by failing to file Federal Individual Income Tax Returns for tax years 2007 through 2009. After being informed by the Internal Revenue Service that he was required to file Federal Individual Income Tax Returns, West continued to submit information to his employer in an attempt to avoid the withholding any employment taxes from his pay, including numerous letters and purported affidavits stating his position that he was not subject to taxation on his income. Between 2007 through 2009, West deposited personal income into bank accounts opened in the names of companies he created in an effort to hide and conceal his income from the Internal Revenue Service. West had not filed federal individual income tax returns since at least the 2000 taxable year. The restitution amount ordered by the Court included amounts for other years beyond the counts of conviction and also included interest and penalties.
“Today's sentence sends a loud and clear message that regardless of their opinions, those who willfully defy the tax laws will be fully investigated, prosecuted, and subjected to the full punishment of the law for their actions," said Andrew M. Thornton, Acting Special Agent in Charge of IRS Criminal Investigation.
This case was investigated by the Department of the Treasury, Criminal Investigations.
Former Medical Office Manager Sentenced to Prison for Embezzling $1.5 Million from EmployerRead the Press Release
BOSTON – A former office manager of Northampton Internal Medical Associates (NIMA) was sentenced yesterday in U.S. District Court in Springfield for embezzling more than $1.5 million.
Roxanne Tubolino, 56, of Belchertown, Mass., was sentenced by U.S. District Court Judge Mark G. Mastroianni to 39 months in prison, 36 months of supervised release, and was ordered to pay restitution of $1,342,256 to NIMA, $25,000 to NIMA’s insurance company, and $506,447 to the IRS. In January 2015, Tubolino pleaded guilty to one count of wire fraud and six counts of tax evasion.
From 2008 through Sept. 11, 2013, Tubolino was employed as an office manager for NIMA, a medical practice in Northampton. During this period, Tubolino embezzled $1,562,206 by writing numerous checks from NIMA’s corporate account to pay her personal credit card bills. Tubolino concealed this theft by entering these checks into NIMA’s Quickbooks records as business expenses, such as “Oncology Supplies.” Tubolino used the stolen funds to obtain cash advances and for charges relating to her competitive horse showing and at clothing stores, restaurants, and entertainment venues. Furthermore, Tubolino filed income tax returns from 2008 to 2013 in which she did not report any of the income that she received from her embezzlement at NIMA.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
Former Investment Banking Analyst with J.P. Morgan Securities and Two Friends Charged in $600,000 Insider Trading SchemeRead the Press Release
LOS ANGELES – An analyst with J.P. Morgan Securities and two longtime friends were taken into custody this morning after being charged in a federal grand jury indictment that alleges they participated in an insider trading scheme that netted more than $600,000 in illicit profits.
Ashish Aggarwal, 27, of San Francisco; Shahriyar Bolandian, 26, of the Palms District in Los Angeles; and Kevan Sadigh, 28, of Encino, are named in an indictment that was unsealed this morning.
The indictment charges each defendant with one count of conspiracy to commit securities and tender offer fraud, 13 substantive counts of securities fraud, 13 substantive counts of tender offer fraud and three substantive counts of wire fraud. Bolandian also is charged with one count of money laundering.
The defendants surrendered to the FBI this morning, and are scheduled to be arraigned this afternoon in United States District Court in downtown Los Angeles.
Between June 2011 and June 2013, Aggarwal was employed by J.P. Morgan Securities, LLC as an investment banking analyst in its San Francisco office. According to the indictment, through his employment, Aggarwal allegedly obtained material, non-public (inside) information about upcoming mergers and acquisitions involving publicly-traded companies. The indictment alleges that Aggarwal disclosed inside information to his friend Bolandian, who, in turn, shared the information with Sadigh, who is also a friend of Bolandian.
Bolandian and Sadigh allegedly used the inside information to trade in advance of the public announcements of Integrated Device Technology Inc.’s April 2012 planned acquisition of PLX Technology Inc., and Salesforce.com Inc.’s June 2013 acquisition of ExactTarget Inc. Through this scheme, Aggarwal, Bolandian and Sadigh allegedly netted more than $600,000 in illicit profits, which the defendants allegedly used to, among other things, cover previous trading losses and to repay liabilities incurred by Aggarwal and Bolandian. After being confronted by special agents with the FBI about their trading in early 2015, Bolandian and Sadigh provided false explanations of the basis of their trading decisions, according to the indictment.
“Every professional with access to inside information has a duty and responsibility to protect that information so no one gains an unfair advantage in the securities markets,” said United States Attorney Eileen M. Decker. “Insider trading corrodes the integrity of the markets and undermines confidence among those who choose to trade. We will bring to justice anyone who illegally uses or shares confidential business information that can be used to manipulate the system.”
David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, stated: “The defendants utilized material non-public information relative to stocks for personal gain without regard for the integrity of the marketplace in which they functioned. Today’s arrests make it clear that greed is not good, and also illustrate the FBI's commitment to identifying and rooting out corrupt trading practices.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If they are convicted of the crimes alleged in the indictment, the three defendants would face statutory maximum sentences of five years in federal prison for the conspiracy count and 20 years for each of the substantive fraud counts. Additionally, Bolandian could be sentenced to as much as 10 years in prison if he is convicted of the money laundering offense.
This case is being prosecuted by Assistant United States Attorney Paul G. Stern, along with Trial Attorneys Thomas B.W. Hall and Alexander F. Porter of the Fraud Section in the Criminal Division at the Department of Justice.
The insider trading scheme was investigated by the FBI.
The Securities and Exchange Commission provided valuable assistance. The SEC filed a related civil action this morning that alleges Aggarwal illegally disclosed nonpublic information (see: http://www.sec.gov/news/pressrelease/2015-174.html).
Former Investment Banking Analyst and Two Friends Charged in Insider Trading SchemeRead the Press Release
An analyst with J.P. Morgan Securities and two longtime friends were taken into custody this morning after being charged in a federal grand jury indictment that alleges they participated in an insider trading scheme that netted more than $600,000 in illicit profits.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California and Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division made the announcement.
Ashish Aggarwal, 27, of San Francisco; Shahriyar Bolandian, 26, of Los Angeles; and Kevan Sadigh, 28, of Los Angeles, are named in an indictment that was unsealed this morning and charges each defendant with one count of conspiracy to commit securities and tender offer fraud, 13 substantive counts of securities fraud, 13 substantive counts of tender offer fraud and three substantive counts of wire fraud. Bolandian also is charged with one count of money laundering.
The defendants surrendered to the FBI this morning, and are scheduled to be arraigned this afternoon before U.S. Magistrate Judge Patrick J. Walsh of the Central District of California.
Between June 2011 and June 2013, Aggarwal was employed by J.P. Morgan Securities, LLC (JPMS) as an investment banking analyst in its San Francisco office. According to the indictment, through his employment, Aggarwal allegedly obtained material, non-public (inside) information about upcoming mergers and acquisitions involving publicly-traded companies. The indictment alleges that Aggarwal disclosed this information to his friend Bolandian who, in turn, shared the information with Sadigh, who is also a friend of Bolandian. Bolandian and Sadigh then allegedly used the inside information to trade in advance of the public announcements of Integrated Device Technology Inc.’s April 2012 planned acquisition of PLX Technology Inc., and Salesforce.com Inc.’s June 2013 acquisition of ExactTarget Inc. According to the indictment, through this scheme, Aggarwal, Bolandian and Sadigh netted more than $600,000 in illicit profits, which the defendants allegedly used to, among other things, cover previous trading losses and to repay liabilities incurred by Aggarwal and Bolandian.
The case was investigated by the FBI. The case is being prosecuted by Trial Attorneys Thomas B.W. Hall and Alexander F. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Paul Stern of the Central District of California. The Securities and Exchange Commission provided valuable assistance.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Aggarwal et al Indictment
Former Insurance Broker Sentenced to Prison for Massive Phony Trucking Cargo Insurance Fraud SchemeRead the Press Release
ATLANTA - John Paul Kill, the former operator of Appeal Insurance Agency, LLC, has been sentenced to four years in federal prison for insurance fraud. Kill illegally collected over $3.7 million from nearly 800 trucking companies nationwide for selling/brokering fictitious cargo insurance policies.
“The defendant held himself out as an honest broker to hundreds of trucking companies, but he simply pocketed their premium payments instead of securing legitimate insurance coverage,” said U.S. Attorney John Horn. “His scam tricked clients into believing they had proper insurance coverage and endangered small businesses operating in more than 20 states.”
“I’m thankful for the diligence of the U.S. Attorney’s Office,” said Insurance Commissioner Ralph Hudgens, whose office referred the case. “This investigation proves that when agencies like the Department of Insurance and the U.S. Attorney’s Office work together, bad actors will be stopped.”
According to U.S. Attorney Horn, the charges, and other information presented in court: John Kill operated an insurance brokerage firm, Appeal Insurance Agency, LLC, in Norcross, Georgia. He began offering cargo insurance policies to trucking companies in 2013. Kill issued policy binders to clients falsely representing that Lloyd’s of London would provide insurance coverage. In reality, Kill never brokered any agreement with Lloyd’s to provide coverage and instead pocketed the premium payments. Most of the victims received no insurance policies at all, and Kill instead attempted to pay claims for losses out of the premium payments he collected from new victims.
In total, nearly 800 trucking companies located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, New Jersey, North Carolina, Ohio, Oklahoma, Oregon Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia paid approximately $3.75 million in premiums for these fraudulent insurance policies from 2013 through mid-2014.
John Kill, 63, of Norcross, Georgia, was sentenced by U.S. District Court Judge Eleanor L. Ross to four years in federal prison to be followed by three years of supervised release, and he was ordered to pay approximately $1.23 million in restitution to victims. Kill was convicted on this charge on May 6, 2015, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation and the Georgia Office of Commissioner of Insurance.
Assistant U.S. Attorney Nathan P. Kitchens prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former APG Police Officer Admits to Stealing Electronics from Government Buildings While on PatrolRead the Press Release
Baltimore, Maryland – Former Army police officer and sergeant at the Aberdeen Proving Ground (APG), Gregory Lamont McNeill, age 45, of Baltimore, pleaded guilty today to concealing and retaining stolen federal government property.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Joshua Adams, Assistant Special Agent in Charge of the U.S. Army Criminal Investigation Command, Aberdeen Proving Ground; Joel Holdford, Chief of Police, Department of the Army (DA) Police, Aberdeen Proving Ground; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
From December 2002 to February 2015, McNeill was a police officer and sergeant for the DA Police on APG. McNeill patrolled APG during non-business hours. At times he would find buildings unlocked. McNeill would sometimes enter the building to determine whether anyone was working. Many times, no one was working during these non-business hours and the building occupants simply forgot to secure the building.
According to his plea agreement, from at least September 2011 to August 2014, during these building checks, McNeill took items of government property for his own personal use, or for the use of his family members, including laptops, iPad, iPod, camera and accessories, and other electronic equipment. McNeill would place the stolen item in a bag which he transferred from his police vehicle to his personal vehicle at the end of his shift before returning home.
In the months following the theft, four of the five stolen Apple electronic items were linked to iTunes accounts that belonged to McNeill or a member of his family.
On February 5, 2015, agents interviewed McNeill at the APG, while other agents searched his home with the consent of his wife. The agents seized numerous stolen items from his residence. McNeill was unaware of the ongoing search and during his interview, he denied stealing any government property and claimed, for example, that his family did not use Apple products.
During the scheme, McNeill stole approximately $35,000 worth of property belonging to the U.S. Army.
McNeill faces a maximum sentence of 10 years in prison. U.S. District Judge James K. Bredar has scheduled sentencing for November 23, 2015 at 2:00 p.m.
United States Attorney Rod J. Rosenstein commended the Department of the Army Police on Aberdeen Proving Ground; U.S. Army Criminal Investigation Command, and FBI for their work in the investigation. Mr. Rosenstein praised the Defense Criminal Investigative Service – Mid Atlantic for their assistance in the investigation, and thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
Ferriday man, Natchez woman plead guilty to stealing Veterans Affairs benefitsRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a former Concordia Parish couple pleaded guilty Friday to their roles in a scheme to steal Veterans Affairs benefits over a 10-year period.
Alfred Lewis Jr., 67, of Ferriday, La., and Rose M. Lewis, 63, of Natchez, Miss., pleaded guilty before U.S. District Judge Dee D. Drell. Alfred Lewis pleaded guilty to one count of theft of government property or funds, and Rose Lewis pleaded guilty to one count of conspiracy to commit theft of government property or funds. According to evidence presented at the guilty plea, from July of 2003 until November of 2013, the defendants conspired to steal $197,784 in Veterans Affairs benefits. Alfred Lewis served in the U.S. Air Force and applied for veterans benefits in July of 2003. He and Rose Lewis did not disclose to Veterans Affairs that Rose Lewis had been working while living with Alfred Lewis during the 10-year period he received benefits. In written statements of their income sent to Veterans Affairs, they denied they were working when in fact Rose Lewis was earning more than $50,000 a year in Mississippi.
Alfred Lewis faces up to 10 years in prison for the theft count, Rose Lewis faces up to five years in prison for the conspiracy count. They also face three years supervised release, a $250,000 fine and restitution. A sentencing date of November 23, 2015 was set.
Veterans Affairs, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan is prosecuting the case.
Federal inmate sentenced for possessing a weaponRead the Press Release
efield, W.Va. –United States Attorney Booth Goodwin announced today that a federal inmate was sentenced by Senior United States District Judge David A. Faber in Bluefield. Rico Joy, 34, was sentenced to 15 months in federal prison for possession of contraband by an inmate. Joy pled guilty in July of 2015, admitting that on April 21, 2015, he had a handcrafted weapon known as a “shank” while he was serving a sentence at the Federal Correctional Institution at McDowell. The sentence imposed by Judge Faber will run consecutively to the 240-month sentence Joy is serving for being a felon in possession of a firearm.
The case was investigated by the Federal Bureau of Prisons and was prosecuted by Assistant United States Attorney John File.
Father and Son Among Four People Indicted in $2.9 Million Ponzi Scheme Involving Bogus Mortgage Sales in North SuburbsRead the Press Release
CHICAGO — A father and son schemed with a Chicago attorney and a Lincolnwood businessman to sell $2.9 million in phony mortgages to more than a dozen duped investors, according to a federal indictment unsealed Tuesday.
ALBERT ROSSINI, 67, the owner of Devon Street Investments Ltd., in Lincolnwood, plotted with BABAJAN KHOSHABE, 74, and Khoshabe’s son, ANTHONY KHOSHABE, 33, to fraudulently induce at least 15 victims into purchasing purported mortgage notes on apartment buildings in foreclosure, according to the indictment. The trio promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process, the indictment states. In reality, the trio did not own the mortgage notes, and instead used the victims’ funds to make Ponzi-type payments to other investors and pocket the rest, according to the indictment.
A fourth defendant, THOMAS MURPHY, 61, was a licensed Illinois attorney who claimed to validate the sale of the mortgage notes through a phony “Guaranty Agreement” that he prepared and gave to Rossini to present to the victims, according to the indictment.
The 14-count indictment was filed Thursday and unsealed this morning. The four defendants are scheduled to appear for an arraignment at 3:00 p.m. today before U.S. Magistrate Judge Mary M. Rowland.
Rossini, of Skokie, was charged with eleven counts of wire fraud and three counts of mail fraud. Babajan Khoshabe, of Chicago, was charged with eight counts of wire fraud and three counts of mail fraud. Anthony Khoshabe, of Skokie, was charged with five counts of wire fraud and three counts of mail fraud. Murphy, of Chicago, was charged with eleven counts of wire fraud and three counts of mail fraud.
According to the charges, the scheme has been ongoing since approximately September 2011. Rossini and Babajan Khoshabe allegedly told prospective investors that Anthony Khoshabe managed the mortgaged properties through his position at Reliant Management, which shared office space with Devon Street Investments. Anthony Khoshabe would purportedly collect monthly rents from the buildings’ occupants and turn them over to investors. What the defendants failed to reveal is that Reliant Management did not manage the properties, and Anthony Khoshabe had no legal ability to collect the rents, the indictment states. The periodic payments made to investors were actually derived from funds that other investors had pledged into the scheme.
The indictment seeks forfeiture of $2,922,564 in cash, three certificates of deposit totaling $700,000, two properties in Skokie and one property on the North Side of Chicago.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Antonio Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago; and Cook County Sheriff Thomas J. Dart.
The wire and mail fraud counts carry a maximum penalty of 20 years in prison and a $250,000 fine, plus mandatory restitution. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorney Erik A. Hogstrom and Special Assistant U.S. Attorney William Novak.
Individuals or corporate entities who believe they could be a victim of the scheme charged in the indictment are encouraged to contact the FBI’s Chicago office at (312) 421-6700.
Indictment
Dallas Check Cashing Business Owner Admits Conspiring to Launder Monetary InstrumentsRead the Press Release
DALLAS — A man who owned and operated a check cashing business in Dallas appeared today in federal court before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to a superseding information charging one count of conspiracy to launder monetary instruments, announced U.S. Attorney John Parker of the Northern District of Texas.
Obinna Njoku, who was the sole director of All Ways Insurance Group, LLC, and who owned and operated All-Ways Check Cashing, Inc., according to the factual resume filed in the case, faces a maximum statutory sentence of five years in federal prison and a $250,000 fine. He will also be required to forfeit approximately $194,294 in funds that the government has seized from his Comerica Bank accounts. A sentencing date was not set; he will remain on bond.
According to the factual resume filed in the case, from January through April 2012, Njoku was asked by several individuals to cash, through All-Ways, numerous checks purporting to be federal income tax refunds and appearing to be issued to individuals residing in the Dallas area. The individuals asking Njoku to cash these checks brought “batches” of checks, often eight to 12 at a time, to Njoku at the All-Ways location on Forest Lane in Dallas. These “batches” of checks often had consecutive numbers, and each check was always for less than $10,000. The individuals who brought the checks to Njoku to cash were not the individuals to whom the checks were payable. In addition, the total amount of each batch of checks presented to Njoku, as well as the amount of cash released to the respective individual presenting the “batch” of checks, was usually well over $10,000.
Njoku believed, according to the factual resume, that the individuals asking for the checks to be cashed had prepared and filed federal income tax returns for the persons to whom the checks were issued. Njoku suspected that the individuals cashing the checks had illegally obtained higher federal income tax refunds, using improper credits and falsely inflated deductions, for the purported payees on the checks. While he believed the checks were likely derived from criminal activity involving fraudulent federal tax returns, Njoku did not ask or seek details. Further, he did not investigate or confirm that the individuals presenting the checks had been involved in preparing tax returns for the check payees or had any business relationship with the payees. Instead, Njoku deliberately blinded himself to what he suspected was the source of the checks and through All-Ways, caused the checks to be deposited into Comerica Bank accounts and caused funds to be withdrawn from Comerica Bank accounts to give to the individuals presenting the checks. As his commission for cashing the checks, Njoku kept 25% to 35% of the overall amount of each check “batch” presented to him for cashing. This commission was much higher than the usual 3% to 5% commission he collected for other checks presented at All-Ways for cashing.
The factual resume states that these checks presented to Njoku for cashing during this time were derived from fraudulently filed federal income tax returns. The payees on these checks had their identities stolen by individuals who then used the information to file fraudulent federal tax returns with and make fraudulent refund claims of the Internal Revenue Service. The total amount of the checks obtained through wire fraud and cashed by Njoku through All-Ways was at least $300,000.
Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorney John J. de la Garza is in charge of the prosecution.
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Council Bluffs Resident Sentenced to 60 Months on Charge of Possession of a Firearm by a Prohibited PersonRead the Press Release
COUNCIL BLUFFS, IA- On August 24, 2015, David Allen Brensel, a 60 year-old resident of Council Bluffs, Iowa, was sentenced by United States District Court Chief Judge John Jarvey to serve 60 months in prison on the charge of possessing a firearm after a felony conviction, announced United States Attorney Nicholas A. Klinefeldt. Judge Jarvey also ordered Brensel to serve a term of three years of supervised release after he completes his term of imprisonment.
Brensel pleaded guilty to the charge of possession of a firearm by a convicted felon on January 8, 2015. When pleading guilty, Brensel admitted being responsible for the theft of four firearms from a residence in Red Oak, Iowa, and then transporting them to Council Bluffs, Iowa, where he sold them.
The investigation was conducted by the Red Oak, Iowa, Police Department, the Council Bluffs, Iowa, Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Convicted Sex Offender Faces 20 Years in Federal Prison on Federal Child Pornography ConvictionRead the Press Release
DALLAS — Erick Fernando Duarte, 58, of Garland, Texas, appeared in federal court today before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to one count of possession of child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
Duarte, who has been in federal custody since his arrest in May 2015, faces a statutory penalty of not less than 10 years and up to 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. Sentencing is set for December 7, 2015, before U.S. District Judge David C. Godbey.
According to documents filed in the case, in April 2014, a detective with the Garland Police Department received information from the National Center for Missing and Exploited Children (NCMEC) that child pornography had been uploaded to an AOL account by a specific AOL email user. Based on this, subscriber information, and information reported on his updated sex offender registry, Duarte was identified as the user.
A search warrant was secured and executed for Duarte’s residence and cell phone. A review of his cell phone and other media revealed that he had more than 1200 images of child pornography, including images of prepubescent children involved in sex acts, on his cell phone. Duarte admits that some of the images depicted sadistic and/or violent content.
Duarte was convicted in the 265th Judicial District Court of Dallas County, Texas, in October 1995, for the felony assault of Sexual Assault of a Child.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI and the Garland Police Department are investigating the case. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.
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Co-Founder of OXYwater and Wife Sentenced for Wire Fraud, Money Laundering and Tax CrimesRead the Press Release
A husband and wife residing in Lewis Center, Ohio, were sentenced to prison in U.S. District Court today for their roles in a fraud scheme related to the company Imperial Integrative Health Research and Development LLC (Imperial) and its product, OXYwater, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carter M. Stewart of the Southern District of Ohio.
Preston J. Harrison, 43, and Lovena Harrison, 42, were sentenced by U.S. District Judge Gregory L. Frost of the Southern District of Ohio. Preston Harrison was sentenced to serve 83 months in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the Internal Revenue Service (IRS) and $8,840,706 to victims of the fraud, and to forfeit $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account. Lovena Harrison, Preston Harrison’s wife, was sentenced to serve one year and one day in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the IRS.
“The sentences imposed today reflect the department’s commitment to investigating and vigorously prosecuting individuals who defraud investors, misappropriate funds to finance lavish lifestyles and file false tax returns to conceal their ill-gotten gains,” said Acting Assistant Attorney General Ciraolo. “Like the Harrisons, those who engage in such conduct will pay a heavy price.”
The couple went to trial in March and were convicted of multiple crimes. Preston Harrison’s business partner, Thomas E. Jackson, 40, of Powell, Ohio, was also convicted at trial for his role in the scheme and is scheduled to be sentenced on Oct. 1. Preston Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, conspiracy to commit wire fraud, conspiracy to commit money laundering and 12 counts of money laundering. Lovena Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, and structuring financial transactions to evade currency reporting requirements. Jackson was convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, eight counts of wire fraud and 12 counts of money laundering.
“Preston Harrison and his co-conspirators made OXYwater appear to be a lucrative and profitable financial investment, touting investments and endorsements from athletes, a musician and others,” said U.S. Attorney Stewart. “After they convinced folks to invest, they misappropriated that money to fuel their own lavish lifestyle, buying items like jewelry, luxury vehicles, weapons and swimming pools.”
“Today’s sentencings mark the successful end of an investigation that uncovered an investment fraud scheme laced with a web of financial lies that generated millions of dollars through false promises and deceit,” said Acting Special Agent in Charge Troy N. Stemen of the IRS-Criminal Investigation (CI) Cincinnati Field Office. “Investment fraud schemes are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible.”
“The Harrisons and their business partner took advantage of unsuspecting investors to line their own pockets,” said Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division. “Hopefully they will now understand that their irresponsible actions have real consequences.”
According to court testimony, Jackson and Preston Harrison operated Imperial, based in Westerville, Ohio, and developed OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in Imperial about Imperial and OXYwater’s structure, composition, finances, sales and profits in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Preston Harrison produced and sent false and fraudulent documents intended to deceive investors in order to obtain additional investments in Imperial. They then misappropriated that money for their own personal use, including the purchase of jewelry, a Cadillac Escalade, a BMW vehicle, weapons, clothing, home improvements and a swimming pool.
Between August 2010 and spring 2013, Jackson and Preston Harrison misappropriated approximately $2 million of the investors’ funds. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
In 2011, Preston Harrison misappropriated approximately $1.1 million from Imperial, which he and Lovena Harrison diverted into an account in the name of a daycare business and used for personal expenses. The Harrisons did not report the money as income on their 2011 income tax return.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended special agents of IRS-CI and FBI, who investigated the case, as well as Assistant U.S. Attorney Jessica Kim of the Southern District of Ohio and Trial Attorney Jason Scheff of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Co-Founder of OXYwater and Wife Sentenced for Wire Fraud, Money Laundering and Tax CrimesRead the Press Release
WASHINGTON – A husband and wife residing in Lewis Center, Ohio, were sentenced to prison in U.S. District Court today for their roles in a fraud scheme related to the company Imperial Integrative Health Research and Development LLC (Imperial) and its product, OXYwater, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carter M. Stewart of the Southern District of Ohio.
Preston J. Harrison, 43, and Lovena Harrison, 42, were sentenced by U.S. District Judge Gregory L. Frost of the Southern District of Ohio. Preston Harrison was sentenced to serve 83 months in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the Internal Revenue Service (IRS) and $8,840,706 to victims of the fraud, and to forfeit $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account. Lovena Harrison, Preston Harrison’s wife, was sentenced to serve one year and one day in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the IRS.
“The sentences imposed today reflect the department’s commitment to investigating and vigorously prosecuting individuals who defraud investors, misappropriate funds to finance lavish lifestyles and file false tax returns to conceal their ill-gotten gains,” said Acting Assistant Attorney General Ciraolo. “Like the Harrisons, those who engage in such conduct will pay a heavy price.”
The couple went to trial in March and were convicted of multiple crimes. Preston Harrison’s business partner, Thomas E. Jackson, 40, of Powell, Ohio, was also convicted at trial for his role in the scheme and is scheduled to be sentenced on Oct. 1. Preston Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, conspiracy to commit wire fraud, conspiracy to commit money laundering and 12 counts of money laundering. Lovena Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, and structuring financial transactions to evade currency reporting requirements. Jackson was convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, eight counts of wire fraud and 12 counts of money laundering.
“Preston Harrison and his co-conspirators made OXYwater appear to be a lucrative and profitable financial investment, touting investments and endorsements from athletes, a musician and others,” said U.S. Attorney Stewart. “After they convinced folks to invest, they misappropriated that money to fuel their own lavish lifestyle, buying items like jewelry, luxury vehicles, weapons and swimming pools.”
“Today’s sentencings mark the successful end of an investigation that uncovered an investment fraud scheme laced with a web of financial lies that generated millions of dollars through false promises and deceit,” said Acting Special Agent in Charge Troy N. Stemen of the IRS-Criminal Investigation (CI) Cincinnati Field Office. “Investment fraud schemes are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible.”
“The Harrisons and their business partner took advantage of unsuspecting investors to line their own pockets,” said Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division. “Hopefully they will now understand that their irresponsible actions have real consequences.”
According to court testimony, Jackson and Preston Harrison operated Imperial, based in Westerville, Ohio, and developed OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in Imperial about Imperial and OXYwater’s structure, composition, finances, sales and profits in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Preston Harrison produced and sent false and fraudulent documents intended to deceive investors in order to obtain additional investments in Imperial. They then misappropriated that money for their own personal use, including the purchase of jewelry, a Cadillac Escalade, a BMW vehicle, weapons, clothing, home improvements and a swimming pool.
Between August 2010 and spring 2013, Jackson and Preston Harrison misappropriated approximately $2 million of the investors’ funds. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
In 2011, Preston Harrison misappropriated approximately $1.1 million from Imperial, which he and Lovena Harrison diverted into an account in the name of a daycare business and used for personal expenses. The Harrisons did not report the money as income on their 2011 income tax return.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended special agents of IRS-CI and FBI, who investigated the case, as well as Assistant United States Attorney Jessica Kim of the Southern District of Ohio and Trial Attorney Jason Scheff of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Chinese Citizen Sentenced to 18 Months in Prison for Attempt to Export Restricted TechnologyRead the Press Release
A 41-year-old citizen of the People’s Republic of China was sentenced today in U.S. District Court in Seattle to 18 months in prison for Conspiracy to Violate the Arms Export Control Act, announced United States Attorney Annette L. Hayes. YUE WU was arrested October 23, 2014, as he prepared to leave the United States from the San Francisco International Airport. WU had made an unrelated visit to the United States after spending more than two years attempting to obtain a type of accelerometer which is restricted for export from the U.S. At the sentencing hearing U.S. District Judge Richard A. Jones said, “Any time the national security of the United States is implicated, as it was here, that makes it a very serious offense for this and every other federal court.”
According to records filed in the case, in January 2012, WU began his efforts to obtain a type of accelerometer which is used in satellites and spacecraft and can only be exported from the United States if a license is issued by the U.S. State Department. On multiple occasions WU attempted to convince a contact to send the accelerometers to China either disguised in a different export, or via a different country. WU did not know that the person he was working with to obtain the equipment was an undercover law enforcement agent. Over the next two years, via email and telephone communications from China, WU continued to try to get the contact to ship him the accelerometers through various schemes.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The case was prosecuted by Assistant United States Attorney Todd Greenberg.
Carlsbad Woman Sentenced for Violating Federal Narcotics Trafficking LawsRead the Press Release
ALBUQUERQUE – Wanda Jo Bunch, 62, of Carlsbad, N.M., was sentenced yesterday afternoon in federal court in Las Cruces, N.M., to 33 months in federal prison followed by two years of supervised release for her methamphetamine trafficking conviction.
Bunch was arrested on Oct. 16, 2014, on a criminal complaint alleging that she possessed methamphetamine with intent to distribute in Eddy County, N.M., on Sept. 2, 2014. According to the complaint, agents with the Pecos Valley Drug Task Force executed a search warrant on Bunch’s residence where they seized almost 200 grams of marijuana, 92.78 grams of methamphetamine and $4,886.00.
On Jan. 15, 2015, Bunch pled guilty to a felony information charging her with possession of methamphetamine with intent to distribute. Bunch admitted that on Sept. 2, 2014, she possessed methamphetamine in her residence which she intended to deliver to another person.
This case was investigated by the Las Cruces office of the DEA and the Pecos Valley Drug Task Force and was prosecuted by Assistant U.S. Attorney Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office.
The Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Career Offender Sentenced to More Than 12 Years in Federal Prison for Robbing Meriden BankRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MICHAEL MASLAR, 59, of Meriden, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 151 months of imprisonment, followed by three years of supervised release for bank robbery, and for violating the conditions of his supervised release from a prior federal conviction for bank robbery.
According to court documents and statements made in court, on September 22, 2014, MASLAR, wearing a pillowcase with holes cut into it over his head, entered the TD Bank on East Main Street in Meriden, approached the teller counter and demanded that bank employees give him cash in $50 and $100 denominations. MASLAR also stated that he had a gun. Bank employees complied with MASLAR’s demands and gave him $5,658. MASLAR took the money, placed it inside a plastic bag and exited the bank. He was arrested shortly thereafter by Meriden Police.
MASLAR’s criminal history includes two prior federal convictions for bank robbery, as well as convictions for involuntary manslaughter and assault. In March 2003, MASLAR was sentenced in Hartford federal court to 165 months of imprisonment for robbing a bank in Meriden on September 11, 2001. He was released from prison in January 2014, and was on federal supervised release at the time of the September 2014 bank robbery.
MASLAR was been detained since his arrest on September 22, 2014. On March 10, 2015, he pleaded guilty to one count of bank robbery and admitted that he violated the conditions of his supervised release. Judge Shea imposed concurrent sentence of two years of imprisonment for the supervised release violation.
This matter was investigated by the FBI and the Meriden Police Department. The case was prosecuted by Assistant U.S. Attorney Jacabed Rodriguez-Coss.
CMU Student Pleads Guilty to Designing Malware, Selling it on Hacker ForumRead the Press Release
PITTSBURGH – A Carnegie Mellon University student pleaded guilty in federal court to a charge of violating federal laws, United States Attorney David J. Hickton announced today.
Morgan C. Culbertson, 20, of Pittsburgh, Pa., pleaded guilty to one count before United States District Judge Maurice B. Cohill.
According to information presented to the Court, from on or about January 2013 to on or about August 20, 2014, Culbertson participated in a scheme to create and sell malware that could be used to spy on and steal personal information from a Google Android cell phone without the owner’s knowledge. Culbertson crafted a piece of malware ultimately named “Dendroid” which, through the use of a binder, could hide itself within a Google App and then download onto a Google Android phone when the user of that phone downloaded the Google App from a place such as the Google Play Store. Dendroid was designed to avoid detection by anti-virus scanners and Google Play security features and did not affect the functionality of the Google App that it was bound to. Once the malware was downloaded onto a Google Android phone, the malware would connect to a command-and-control server controlled by Culbertson. Dendroid was repeatedly advertised for sale on Darkode with explicit advertisements detailing the malware’s intended capabilities, which included commanding the phone remotely to take photos, intercepting text messages, stealing files, spying on internet browsing history and recording phone calls. In connection with the guilty plea, the court was advised that Culbertson intentionally caused damage without authorization to 10 or more computers.
Judge Cohill scheduled sentencing for Dec. 2, 2015 at 11 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney James T. Kitchen is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Morgan C. Culbertson.
Bridgeport Man Sentenced to 9 Years in Prison for Role in Drug Robbery SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NELSON DIAZ, 26, of Bridgeport, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in New Haven to 108 months of imprisonment, followed by five years of supervised release, for planning to conduct an armed robbery of narcotics stash house.
This matter stems from “Operation Samson,” an initiative headed by the ATF and the Bridgeport and New Haven Police Departments that targeted violent criminals, illegal firearm possession and firearm trafficking. In the spring of 2014, approximately 40 ATF special agents and personnel from Connecticut and across the country were deployed with New Haven and Bridgeport Police to conduct numerous covert operations.
According to court documents and statements made in court, in March 2014, the ATF began an investigation into Carlos “Camby” Colon and Carlos “Joel” Colon, who were known narcotics and firearm traffickers in Bridgeport. Law enforcement also had received information that Joel Colon was interested committing an armed robbery of a drug dealer. During the investigation, which employed the use of an ATF agent working in an undercover capacity, the Colons recruited DIAZ and others to commit an armed robbery of what they believed to be a narcotics stash house of 15 kilograms of cocaine.
On April 11, 2014, DIAZ, the Colons, Humberto Soto, Markus Mendez, Trevor Pierce and Hiram “Gringo” Mojica gathered at a location in Stamford where they believed they would be informed of the address of the narcotics stash house, and would then travel to the stash house to conduct the robbery. All seven were arrested at that time. A search of the car that DIAZ, Pierce and Mojica drove to the location revealed a loaded .40 caliber pistol, an EO Tech sight, black gloves, as well as two rolls of duct tape that DIAZ had recently purchased. A search of the center console of the vehicle that Soto and Mendez drove to the meet location revealed a loaded and 9mm pistol.
Eleven days before he was arrested in this case, DIAZ had pleaded guilty in state court to three counts of sale of narcotics and one count of violating probation for selling heroin on multiple occasions in 2013 while he was on probation for prior drug and gun convictions. He was released on bond prior to reporting to prison.
DIAZ has been detained since April 11, 2014. On March 6, 2015, he pleaded guilty to one count of conspiracy to interfere with commerce by robbery and one count of use of a firearm in furtherance of a crime of violence.
Camby Colon, Joel Colon, Mendez, Soto, Pierce and Mojica also pleaded guilty. On June 17, 2015, Soto was sentenced to 84 months of imprisonment. The other defendants await sentencing.
This case is being prosecuted by Assistant U.S. Attorney Vanessa Richards.
Border Patrol Supervisor Guilty of Stealing Social Security BenefitsRead the Press Release
LAREDO, Texas – A Border Patrol supervisor has entered a guilty plea to stealing his deceased grandmother’s Social Security benefits, announced U.S. Attorney Kenneth Magidson. James J. Doran, 54, entered a guilty plea today before U.S. Magistrate Judge J. Scott Hacker.
At the hearing, Doran admitted he failed to report his grandmother’s death to the Social Security Administration (SSA) in February 2000. After her death, Doran continued to negotiate his grandmother’s monthly widow’s benefits which were being deposited into their joint bank account. He admitted he stole the funds from the time of his grandmother’s death until August 2011. As a result of the illegal behavior, he collected a total of $108,516 in Social Security benefits to which he was not legally entitled.
Doran was permitted to remain on bond pending his sentencing hearing, which will set at a later date before Senior U.S. District Judge Kazen. At the time of sentencing, he will face up to 10 years in federal prison and a possible $250,000 fine.
The charges are the result of an investigation conducted by SSA - Office of Inspector General, Department of Homeland Security - Office of Inspector General and the Bureau of Vital Statistics Fraud Unit. Assistant U.S. Attorney Christopher A. dos Santos is prosecuting the case.
Bergen County, New Jersey, Man Admits Conspiring with Wife to Defraud Two New York Law Firms Out of More Than $7 MillionRead the Press Release
NEWARK, N.J. – A Englewood Cliffs, New Jersey, man today admitted using bogus litigation support companies to obtain millions from two law firms where his wife was a partner, U.S. Attorney Paul J. Fishman announced.
Melvin Feliz, 48, of Englewood Cliffs, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion.
According to documents filed in the case and statements made in court:
Feliz’s wife, Keila Ravelo, 49, also of Englewood Cliffs, worked as a partner at Law Firm 1 from July 1, 2005 through October 2010. She then joined Law Firm 2 as a partner and worked there from October 2010 through November 2014. Feliz admitted that during that time, Feliz and Ravelo formed two limited liability companies, Vendor 1 and Vendor 2, that purported to provide litigation support for both firms, but in fact provided no actual services.
Feliz admitted that from 2008 through July 2014, he and Ravelo controlled the Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1, Law Firm 2 and a client of both firms for work that was never performed. Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2 that Ravelo and Feliz later used for personal expenses.
Over the course of the conspiracy, the law firms paid Vendor 1 and Vendor 2 a combined total of approximately $7.8 million. Feliz admitted that he failed to report the income on his tax returns, including nearly $2,360,000 in illicit profits from 2012 alone.
The charge of conspiracy to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The tax evasion charge is punishable by a maximum potential penalty of five years in prison and $250,000 fine. Sentencing is scheduled for Dec. 14, 2015.
Charges against Ravelo are merely accusations and are still pending. She is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited law enforcement officers of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Carl Kotowski, and law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Andrew Kogan, Brian Urbano and Ronnell Wilson of the U.S. Attorney’s Office Criminal Division; Barbara Ward, Chief of the office’s Asset Forfeiture and Money Laundering Unit; and Assistant U.S. Attorney David Foster of the U.S. Attorney’s Office Special Prosecution’s Division in Newark.
Defense counsel: Jason Orlando Esq., Jersey City, New JerseyMelvin Feliz
Bank Branch Manager Sentenced to over 8 Years in Prison for Armored Truck RobberyRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Valentina Elebesunu, age 50, of Temple Hills, Maryland to 105 months in prison followed by three years of supervised release for conspiring to commit, and committing, an armed robbery of an armored truck. Judge Hazel also entered an order that Elebesunu pay restitution of $272,956.17.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; and Chief Mark A. Magaw of the Prince George’s County Police Department.
Elebesunu was the branch manager at a Bank of America located at 3413 Kenilworth Avenue in Hyattsville, Maryland. According to evidence presented at the five day trial, between mid-November and November 21, 2012, Elebesunu conspired with Damione Lewis – a security guard at the bank, Delacey Brown, Taurian Miller, Adriane Baldwin and Barrington Turner to rob an armored truck that serviced the bank branch. Elebesunu had provided Lewis with inside information about the amount of funds scheduled to be picked up by the armored truck. Lewis then provided that information to the other co-conspirators.
On November 21, 2012, an armored car employee picked up $272,956.17 from the bank. Elebesunu and Lewis were working their respective jobs at the bank at the time. Elebesunu’s co-conspirators were in vans outside the bank. As the employee was taking the money from the bank to the armored truck, Elebesunu’s co-conspirators brandished firearms at the employee, took the money bags to their vans and drove away. The robbery proceeds were later divided between Elebesunu and her co-conspirators.
Damione Lewis, age 36, of New Carrolton, Maryland; Delacey Kinte Brown, age 38, of Landover, Maryland; and Taurian Devon Miller, age 31, and Adrian Baldwin, age 29, both of Washington, DC; and Barrington Turner, age 35, of Forestville, Maryland; have all pleaded guilty to their roles in the robbery. Lewis is scheduled to be sentenced on September 2, 2015. The remaining four defendants were sentenced to between 51 and 96 months in prison.
United States Attorney Rod J. Rosenstein praised the FBI, Prince George’s County Police Department and other members of the Cross Border Task Force for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys William D. Moomau and Bryan E. Foreman, who prosecuted the case.
Attempted Robbers of Jewelry Store SentencedRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Darnell Kenneth-Maurice Brown, 23, Zackary Ian Cender, 19, and Charles Milton Fortune, 22, of East Lansing, Michigan, have been sentenced for their roles in the attempted robbery of Paul Medawar Fine Jewelry that occurred on January 23, 2015, in Grand Rapids. U.S. District Judge Janet T. Neff imposed a sentence of 12 months and one day of imprisonment on Cender, while Brown and Fortune were sentenced last week to 30 months each.
On the morning of January 23, Brown, Cender, and Fortune, along with four men left Lansing for Grand Rapids in two cars for the purpose of robbing a jewelry store in Grand Rapids. They drove by the jewelry store before parking at a nearby apartment complex. They then stole a pickup truck, and Brown, Cender, and three others travelled to the jewelry store in the stolen truck. Fortune and another stayed with the cars at the apartment complex. Once at the store, the driver waited in the truck while four robbers, including Brown and Cender, entered. Brown acted as a lookout while Cender and two others went to jewelry cases containing Rolex watches and began smashing the glass cases with short-handled sledgehammers. Employees and customers fled the showroom. The robbery was disrupted when one of the employees returned to the showroom and fired a weapon in the direction of the robbers. Brown, Cender, and Fortune were apprehended by local police while fleeing the area. The other four conspirators escaped and have yet to be charged.
“This was a carefully planned attempted robbery,” U.S. Attorney Miles said. “The coordination and circumstances of this robbery indicate that these defendants had help. We are asking for the public’s assistance in identifying the other perpetrators of this criminal act and in bringing them to justice.” The U.S. Attorney noted that the public can contact the Federal Bureau of Investigation (“FBI”) at (313) 965-2323 with any information about this case."The audacity with which this robbery was committed posed a substantial threat to the business place and public-at-large, and will not be tolerated,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, along with its law enforcement partners on both sides of the state, is committed to seeing that all of the co-conspirators involved in this case are arrested and brought to justice, and will not stop pursuing them until this is accomplished.”
The FBI and the Kent County Sheriff’s Department are investigating this case. Assistant U.S. Attorneys Justin M. Presant and Daniel Y. Mekaru are prosecuting it.
Attempted Bank Robber Sentenced to Five Years in Federal PrisonRead the Press Release
DALLAS — A Dallas man who admitted that he tried to rob a Bank of America branch in Dallas in 2013 was sentenced yesterday, announced U.S. Attorney John Parker of the Northern District of Texas.
James Samuel Murray, 51, was sentenced by U.S. District Judge David C. Godbey to 60 months in federal prison. He has been in custody since his arrest on a related federal criminal complaint filed in October 2013, shortly after the attempted robbery. Murray pleaded guilty in April 2014 to one count of attempted bank robbery.
According to documents filed in the case, on October 8, 2013, Murray entered the Bank of America located at 6166 Retail Road in Dallas with the intent to rob it. Upon entering the bank, Murray approached a teller and presented a note, which stated, in part, I have a 9 millimetter [sic] Berretta [sic] pistol so do not panick [sic]. … I want all the money out of your register and then go to the day safe or wherever you have to and make sure I get fifty thousand dollars or more and do not waste time! … Also just so you know, I know your full name and where you live and if anything goes wrong with the money I will be seeing you very soon! I did my studying on this bank and you! OK! :-) be happy ok!
The teller, in fear for her life, removed money from the teller drawer and placed it in a bag behind the counter. The teller then exited the teller area with the money and went to a secure area of the bank where she watched Murray’s actions from a monitor. Shortly afterwards, officers with the Dallas Police Department arrested Murray in the bank lobby, and during a search, officers recovered the robbery note. The bag of money was never delivered to Murray.
The FBI Dallas Violent Crimes Task Force and the Dallas Police Department investigated. Assistant U.S. Attorney Keith Robinson prosecuted.
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Anderson Couple Pleads Guilty to Offenses Related to Marijuana CultivationRead the Press Release
SACRAMENTO, Calif. — Anderson residents John Wesley Lane, 35, and Kelsey Ann Lane, 28, pleaded guilty today to charges related to marijuana cultivation and distribution, United States Attorney Benjamin B. Wagner announced. John Lane pleaded guilty to possession with intent to distribute at least 50 kilograms of marijuana, and Kelsey Lane pleaded guilty to concealment of a felony.
According to court documents, on December 13, 2012, law enforcement agents executed federal search warrants at three properties owned, leased, or associated with John and Kelsey Lane: a warehouse in Anderson, the Lanes’ residence, and the California Patients Collective marijuana dispensary in Redding.
From the marijuana manufacturing operation inside the Anderson warehouse, agents seized approximately 2,700 mature marijuana plants, 1,300 marijuana clones, and approximately 40 kilograms of processed marijuana. Agents seized approximately 130 pounds of processed marijuana, numerous firearms, and $51,860 from the couple’s home, and nearly 200 marijuana plants, processed marijuana, concentrated cannabis, edible marijuana, and $4,673 from the marijuana dispensary.
Federal search warrants were again executed in May 2013, after law enforcement learned the Lanes were continuing to grow marijuana. During the execution of the search warrants, agents seized 2,329 mature marijuana plants and 1,724 clones at the warehouse.
The defendants are scheduled to be sentenced by U.S. District Judge John A. Mendez on February 16, 2016. John Lane faces a maximum sentence of 10 years in prison and Kelsey Lane faces up to three years in prison. The actual sentences, however, will 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.
This case is the product of an investigation by the North State Marijuana Investigation Team, the Siskiyou County Narcotics Task Force, the Drug Enforcement Administration, the Bureau of Land Management, the Alcoholic Beverage Control, Shasta County Sheriff's Office, Trinity County Sheriff’s Office, Shasta Interagency Narcotic Task Force, the California Department of Justice, and the FBI. Assistant U.S. Attorney Justin Lee is prosecuting the case.
Alabama Resident Indicted in Stolen Identity Refund Fraud Scheme Claiming More than $1 Million in Fraudulent RefundsRead the Press Release
An indictment was unsealed yesterday charging an Alabama man with multiple tax-related crimes, including one count of conspiracy to defraud the United States, three counts of wire fraud, four counts of stealing U.S. Treasury funds and four counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
According to the allegations in the indictment, returned by a federal grand jury sitting in Montgomery, Alabama, Tavarious Jackson, of Montgomery County, Alabama, along with several co-conspirators, used stolen personal identification information to prepare and file false federal income tax returns. From about February 2011 through April 2013, the conspirators filed more than 500 false returns that fraudulently claimed more than $1 million in tax refunds.
If convicted, Jackson faces a statutory maximum sentence of 10 years in prison for conspiracy, 20 years in prison for each count of wire fraud, 10 years in prison for each count of stealing government funds and a mandatory minimum sentence of two years in prison for aggravated identity theft. Jackson also faces substantial monetary penalties and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Gregory Bailey and Robert Boudreau of the Tax Division and Assistant U. S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Acoma Pueblo Woman Pleads Guilty to Federal Child Abuse ChargeRead the Press Release
ALBUQUERQUE – Aiela Salvador, 28, a member and resident of Acoma Pueblo, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a misdemeanor child abuse charge.
Salvador was arrested on July 18, 2013, on a criminal complaint alleging that on June 25, 2013, in Cibola County, N.M., she endangered the lives and safety of two children, a 3-year-old and 2-year-old, by passing out due to heavy intoxication and abandoning the children. The children were unkempt and neglected in a house without power or running water, and the two-year-old was found wandering outside the house. The children, who did not suffer bodily injury, were taken to the Acoma Social Services Department. Salvador was subsequently indicted on Aug. 7, 2013, and charged with committing child abuse by placing the children in a situation that may have endangered their lives or health.
During today’s proceedings, Salvador pled guilty to an information charging her with misdemeanor abandonment of a child. Salvador admitted that on June 25, 2013, she abandoned two children when she consumed alcoholic beverages to the point of passing out inside her home. Criminal proceedings of this case were delayed by Salvador’s participation in a pretrial diversion program.
At sentencing, Salvador faces a statutory maximum penalty of 12 months in prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Pueblo Tribal Police Department. Assistant U.S. Attorney David Adams is prosecuting the case.
Acoma Pueblo Man Pleads Guilty to Assaulting his Intimate PartnerRead the Press Release
ALBUQUERQUE – Randy P. Shutiva, 53, a member of the Acoma Pueblo who resides in San Fidel, N.M., pleaded guilty in federal court in Albuquerque, N.M., to an assault charge.
Shutiva was arrested on Dec. 19, 2014, on a criminal complaint charging him with assaulting an Acoma Pueblo woman who was his intimate partner by punching her in the face and head and kicking her body. The criminal complaint alleged that Shutiva committed the assault on Dec. 6, 2014, in Acoma Pueblo within Cibola County, N.M. The victim lost the hearing in one ear and sustained other injuries as a result of the assault.
During today’s proceedings, Shutiva pled guilty to a misdemeanor information charging him with assault by striking, beating or wounding. In entering his plea, Shutiva admitted striking the victim on the head and face and kicking her body on Dec. 6, 2014. He also acknowledged that the victim suffered multiple injuries and temporary hearing loss in one ear as a result of the attack.
At sentencing, Shutiva faces a statutory maximum penalty of one year in prison followed by a maximum of one year of supervised release.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Pueblo of Acoma Tribal Police Department. Assistant U.S. Attorneys Raquel Ruiz-Velez and Elaine Ramirez are prosecuting this case.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Monday 24 August 2015
Whitefield Man Indicted for Illegal Transportation of Hazardous MaterialsRead the Press Release
CONCORD, N.H. – A federal grand jury in the District of New Hampshire has indicted Lewis Scott Niles, 54, of Whitefield, New Hampshire, on four counts of illegal transportation of hazardous materials, reports Acting United States Attorney Donald Feith.
The indictment alleges that from about September 2013 through about April 2014, Niles sold diesel fuel or fuel oil and a flammable liquid to be used in heating furnaces in his customers’ homes and businesses. Niles is charged with transporting hundreds of gallons of those combustible and flammable liquids without the required placards identifying them as hazardous materials.
Niles appeared today in the United States District Court in Concord, New Hampshire, for an initial appearance and arraignment hearing. A trial date was scheduled for October 20, 2015. Niles was released on personal recognizance pending his trial.
If convicted, Niles is facing a maximum sentence of five years in prison and a maximum fine of $250,000.
This case was investigated by the Office of the Inspector General for the United States Department of Transportation. It is being prosecuted by Assistant United States Attorney Mark S. Zuckerman.
An indictment is merely an allegation and a defendant is presumed innocent unless and until proven guilty.
Two Ohio men sentenced for selling heroin, cocaine near WV playgroundsRead the Press Release
WHEELING, WEST VIRGINIA – Shannon Jerome Hinton, 25, of Cleveland, Ohio, and Gregory Edward Allen, 28, of Bridgeport, Ohio, were sentenced in federal court today for selling heroin and cocaine near playgrounds located in the Northern District of West Virginia, United States Attorney William J. Ihlenfeld, II, announced.
Hinton was sentenced today to 77 months in prison. He sold heroin in August 2014 near Clark Field Playground in Hancock County, West Virginia. He pled guilty in June 2015 to one count of “Aiding and Abetting the Distribution of Heroin within 1,000 Feet of a Protected Location,” following an investigation led by the Hancock, Brooke, Weirton Drug and Violent Crime Task Force, a HIDTA-funded initiative. The Columbiana County, Ohio Drug Task Force and Drug Enforcement Administration Youngstown, Ohio Field Office assisted in the investigation.
Allen was sentenced today to 41 months in prison. He was discovered in possession of crack cocaine in February 2015 near Bridge Park, a playground located on Wheeling Island in Ohio County, West Virginia. He pled guilty in May 2015 to one count of “Possession with Intent to Distribute Cocaine Base within 1,000 Feet of a Protected Location,” following an investigation by the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative.
Assistant U.S. Attorney David Perri prosecuted Allen and Assistant U.S. Attorney Stephen Vogrin prosecuted Hinton on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp presided.
Two Former North Carolina Correctional Officers IndictedRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announces that on August 19, 2015, a federal grand jury in Raleigh returned a four count Indictment against two former Correctional Officers that worked at Polk Correctional Institution (“Polk”) in Butner, North Carolina.
The Indictment charges GREGORY DUSTIN GOULDMAN, 31 and JASON DEAN, 29, each with one count of Extortion Under Color of Official Right, 18 U.S.C. § 1951. Additionally, DEAN was charged with one count of making a False Statement to the Federal Bureau of Investigation, 18 U.S.C § 1001, and one count of lying before a federal Grand Jury, 18 U.S.C. § 1623.
U.S. Attorney Walker stated, “Corruption by correction officers undermines the criminal justice system and puts the general public at risk. We will always prosecute these kinds of cases to maintain the integrity of our system.”
GOULDMAN was employed as a Correctional Officer at Polk from 2005, through May of 2015. From 2012, through September of 2014, GOULDMAN held the position of Sergeant and worked as a supervisor in Polk’s “high security maximum control unit” (hereinafter “HCON”). The HCON unit was opened in 1998 to serve as North Carolina’s supermax prison for “the state’s most violent and assaultive offenders.” The indictment alleges that GOULDMAN engaged in a scheme with a number of prisoners held in HCON under which he smuggled tobacco, marijuana, cellular telephones, and packages of AA batteries (often used to fashion a device for charging the cellular telephones) to such inmates in exchange for cash. The cellular telephones were used by the inmates to communicate with persons outside of prison. It is further alleged that, after being transferred out of HCON in September of 2014, GOULDMAN continued to smuggle contraband into Polk for at least one additional inmate.
DEAN is alleged to have misused his position as a Correction Officer to extort things of value from inmates. DEAN is also alleged to have lied as to a material fact during an interview with FBI Agents and to have committed perjury while testifying before a federal Grand Jury.
The United States Attorney’s Office and FBI’s investigation into Polk was prompted by the circumstances relating to the kidnapping conspiracy alleged to have been orchestrated by defendant Kelvin Melton through the use of a cellular telephone in his cell in HCON.
"These men put many lives at risk for their own profit. They were entrusted with the responsibility of ensuring that North Carolina's convicted criminals serve their sentences. Instead, this type of conduct made it possible for a dangerous gang member to reach outside of prison walls which lead to the kidnapping of Mr. Frank Janssen. The FBI will keep pursuing this case and will not stop until everyone who played a role in this ruthless crime is held accountable," said John Strong, Special Agent in Charge of the FBI.
Polk is operated under the purview of the North Carolina Department of Public Safety (“DPS”). DPS Secretary Frank L. Perry said: "The department has participated in and cooperated with this investigation and we strongly support this prosecution in this very serious case to the fullest extent of the law. DPS has so many professional and dedicated employees who serve the state in this very challenging and dangerous environment and it is truly regrettable when a corrupt staff member puts their co-workers and the public at risk."
If convicted of Extortion Under Color of Official Rights both defendants face maximum imprisonment of 20 years and a fine of $250,000. In addition, DEAN faces a maximum of 5 years imprisonment if convicted of making a False Statement and a fine of $250,000 and 5 years imprisonment if convicted of Perjury and a fine of $250,000.
The charges and allegations contained in the Indictment are merely accusations. The defendants are considered innocent unless and until proven guilty in a court of law.
The case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Dennis Duffy and Leslie Cooley.
Tuscola Businessman Pleads Guilty to Income Tax EvasionRead the Press Release
Springfield, Ill. – Sentencing has been scheduled on Jan. 4, 2016, for a Tuscola, Ill., businessman, Lorenzo Shane Stewart, owner of Ten Acres Excavating, who pled guilty on Friday to two counts of income tax evasion. Stewart appeared in Springfield before U.S. District Judge Sue E. Myerscough. Stewart remains on bond pending sentencing.
During court proceedings and according to court documents, Stewart, 48, admitted that he failed to pay more than $1.12 million in income tax for the 2008 and 2009 tax years. In 2006, Stewart began conducting his excavation and construction business under the name Ten Acre Excavating. Stewart put the business under the name of one of his employees. Although Stewart operated the business and received the income generated from the business, Stewart did not claim income generated by Ten Acre Excavating on his own tax returns.
In approximately July 2008, Stewart was awarded contracts to perform excavating and construction work on several natural gas pipeline substations that were being built in the Tuscola area. Stewart and his employees performed work on these substations and received checks related to this pipeline work totaling approximately $1.7 million in 2008 and $5.9 million in 2009. Stewart claimed his adjusted gross income for 2008 was approximately $74,199, when in fact, his adjusted gross income for 2008 was approximately $279,803. For 2009, Stewart claimed his adjusted gross income was approximately $257,361, when in fact, his adjusted gross income was approximately $3,044,980.
Each count carries a penalty of up to five years in prison, a $100,000 fine plus the costs of prosecution, and restitution.
The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller. The charges are the result of an investigation by the Internal Revenue Service, Criminal Investigation Division.
Topeka Man Sentenced for Downloading Child PornRead the Press Release
TOPEKA, KAN. - A Topeka man was sentenced Monday to 84 months in federal prison for downloading child pornography from the Internet, U.S. Attorney Barry Grissom.
Mark A. Hastert, 55, Topeka, Kan., pleaded guilty to one count of receiving child pornography.
“Consumers of child pornography help create a market and demand for the production of images of sexual abuse and exploitation of real children,” Grissom said. “They contribute to the cycle of abuse and are in part responsible for the harm suffered by children.”
In his plea, Hastert, admitted that the investigation began in September 2011 when a task force with the FBI cyber crime unit in Kansas City, Mo., downloaded child pornography from Hastert’s computer using a file sharing program. Investigators followed an electronic trail to Hastert’s home in Topeka. A forensic examination located 875 images and 58 videos of child pornography on Hastert’s computer.
Grissom commended the FBI and Assistant U.S. Attorney Christine Kenney for their work on the case.
Topeka Man Gets 13 Years in Federal Prison in Valero Robbery, ShootingRead the Press Release
TOPEKA, KAN. - A Topeka man was sentenced Monday to 13 years in federal prison for robbing a Valero gas station and shooting the clerk, U.S. Attorney Barry Grissom said.
Corey Eugene Johnson, 41, Topeka, Kan., pleaded guilty to one count of robbery. In his plea, he admitted that on July 28, 2013, he robbed a Valero gas station at 1161 S.W. Gage in Topeka.
In his plea, Johnson admitted he was carrying a .40 caliber handgun when he entered the gas station and demanded money from the cash register. Seeing a customer at the counter, Johnson ordered him to the floor and put his foot on the customer’s head. When a clerk refused to turn over money from the cash register, Johnson shot the clerk several times. Then Johnson ordered the customer to open the cash register. Johnson fled the store in a black Monte Carlo. Police found the wounded clerk, who was taken to the hospital and survived the shooting.
In June, co-defendant Shawn Michael Sneed, 22, Topeka, Kan., was sentenced to 84 months in federal prison.
Grissom commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
Three Stockton Residents Arrested for Credit Card Fraud and Identity Theft Scheme, 6 Others Remain at LargeRead the Press Release
SACRAMENTO, Calif. — Three of nine defendants were arrested today for participating in a credit card fraud conspiracy aimed at Target REDcard account holders across the United States and involving hundreds of fraudulent transactions and at least 1,000 victims, United States Attorney Benjamin B. Wagner announced.
A 12-count indictment, unsealed today, charges nine defendants with conspiracy, credit card fraud, aggravated identity theft, and illegal possession of credit card-making equipment. The indictment alleges that Stockton residents Boon B. Khoonsrivong, 38; Thongchone Vongdeng, 35; Daisy Sysengrat, 29; Vuthiya Tim, 30; Meghan Paradis, 31; Sequoia Valverde, 32; Amber Collins, 30; Somaly Siv, 29; and Jaffrey Brown, 31, conspired to make and use unauthorized credit cards at large retailers, relying on fraudulently obtained victims’ identities. Today, law enforcement agents arrested Vongdeng, and Brown, in Stockton. Agents arrested Siv in Reno, Nevada. The other six defendants remain at large.
According to the indictment, between March 2014 and September 2014, the nine conspirators obtained personal information from victims through various methods. The conspirators then used that information to create unauthorized credit card accounts and used those cards and accounts to obtain things of value in excess of $1,000. Part of the scheme involved using unauthorized Target REDcard account numbers to buy large amounts of electronics, prepaid gift cards, and other goods at Target locations throughout the Sacramento area, northern California, and elsewhere. The indictment further alleges that one of the defendants, Boone B. Khoonsrivong, possessed device-making equipment with the intent to defraud and engaged in aggravated identity theft.
In all, the indictment alleges that more than 300 counterfeit and unauthorized credit card account numbers were created, used, or sold by members of the conspiracy, and over 1,000 victims have been identified as having had their identities compromised as a result of the conspiracy.
This case is the product of an investigation by the United States Postal Inspection Service and the Stockton Police Department. Assistant United States Attorneys André M. Espinosa and Rosanne L. Rust are prosecuting the case.
If the defendants are convicted, they face maximum statutory penalties ranging from five to 15 years 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Tehachapi Doctor Pleads Guilty to Defrauding Patients and Insurers by Implanting IUDs That Were Not Approved by the FDARead the Press Release
FRESNO, Calif. — Dr. Paul S. Singh, 55, of Tehachapi, pleaded guilty today to mail fraud for a scheme to defraud his patients and their insurers by implanting and billing for unapproved intrauterine devices (IUDs), United States Attorney Benjamin B. Wagner announced.
Singh, a medical doctor licensed to practice in California, had an office in Tehachapi. He provided obstetric and gynecological services to women, including providing forms of birth control. One form of birth control he provided were IUDs, which the Food and Drug Administration (FDA) regulates. The FDA has approved only one IUD that uses copper as its active ingredient, the ParaGard T-380A, which was sold only by its manufacturer and not available on third-party websites. The insertion of a non-FDA-approved copper IUD risks a patient’s safety. It can result in an increased risk of pelvic inflammatory disease, ectopic pregnancy, hysterectomy, and other serious complications.
According to court documents, Singh bought unapproved IUDs on the Internet but fraudulently billed his patients and their insurers as if he had inserted FDA-approved IUDs, all without the permission or consent of his patients,
According to court documents, Singh was sent multiple bulletins and newsletters warning against the use of unapproved IUDs. He was also warned that products sold by online pharmacies were not identical to the ParaGard T-380A and had not been approved as safe and effective by the FDA. In spite of the warnings, Singh purchased unapproved IUDs from online retailers and implanted them in numerous patients without their consent, between April 2008 and June 2012.
In August 2010, agents from the FDA confronted Singh about his history of implanting unapproved IUDs. During the meeting, Singh agreed to stop implanting them in his patients. Agents later conducted a search warrant of Singh’s office in 2012 and learned that he had continued to implant unapproved IUDs in his patients.
Singh failed to advise his patients of the risks of unapproved IUDs or of the fact that one had been implanted in them. According to the plea agreement, many of Singh’s patients later complained to him and other doctors about medical complications they associated with Singh’s insertion of the IUD. In multiple instances, Singh responded to such complaints by re-inserting the IUD rather than removing it. Some patients ultimately had to switch doctors in order to have the IUD removed.
Singh profited from the implanting unapproved IUDs by billing his patients and their insurers for the higher cost of approved IUDs, which was false and fraudulent.
United States Attorney Wagner stated: “Doctors who take shortcuts by utilizing unapproved medical devices willingly put their own financial interests ahead of their obligation to care for the health of their patients. My office is increasing its focus on health care fraud cases, and those who benefit while disregarding the health of patients will be first in line for investigation and prosecution.”
“Medical doctors have a special responsibility to make the best choices for their patients. When they ignore that responsibility and use unapproved medical devices, they put patients’ safety and health at risk,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations’ Los Angeles Field Office. “Our office will continue its work to ensure that doctors and other healthcare professionals understand the consequences of using medical products that have not been approved by the FDA.”
This case is the product of an investigation by the Food and Drug Administration, Office of Criminal Investigations. Assistant United States Attorneys Patrick R. Delahunty and Kirk E. Sherriff are prosecuting the case.
Singh is scheduled to be sentenced by United States District Judge Anthony W. Ishii on November 23, 2015. Singh faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will 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.
Spice Distribution Kingpin John Bowen Sentenced to 60 Months in Federal PrisonRead the Press Release
DENVER – U.S. District Court Judge Philip A. Brimmer today sentenced John Bowen, age 68, of Las Vegas to 60 months in federal prison, followed by 3 years of supervised release for his role as the kingpin in a Conspiracy to Defraud the United States, Distribute Controlled Substances, and Money Laundering, federal law enforcement announced today. In addition to the prison sentence, assets were ordered forfeited, including $1,800,000 in cash as well as three real properties in Florida.
Following an eight month investigation by federal, state and local law enforcement in May 2014, a federal grand jury in Denver returned indictments charging nine individuals from across the country with conspiracy and drug distribution charges related to “Spice”.
“Spice” is a common term for synthetic cannabinoids. From August through September 2013, there were 221 documented synthetic cannabinoid related emergency room visits in the Denver and Colorado Springs metro areas. There were hospitalizations in other states as well. The Colorado Department of Public Health and Environment (CDPHE) and the Centers for Disease Control and Prevention (CDC) initially investigated the outbreak of these emergency room visits, declaring an emergency health epidemic in 2013. In response to the crisis, federal, state and local law enforcement and prosecutors came together to identify solutions to protect the public, especially youth, from the purchase and use of Spice and other synthetic cannabinoid products.
The majority of “Spice” victims were between the ages of 12 through 29, with victims ranging in age from 12 to 70 years of age. Seventy-five percent of the victims were male. Local convenience stores and gas stations made retail sales of the spice products. In this case, investigators determined that the original chemical product was sent to the United States from China. The indictment alleges the chemical was imported to Florida and received by defendant Daniel Bernier. In Florida the chemical was sprayed on a green vegetable substance. The chemical-coated substance was then packaged and shipped to both wholesalers and retailers in Colorado and throughout the United States.
The indictment and other court documents stated that the distribution was organized by John Bowen. He first operated under the name “The Really Cool Stuff Company”. After the product received negative media attention, Bowen changed the distribution name to “Heart of Asia.” Creager Mercantile, run by defendant Donald Creager, III, was one of the wholesalers. Creager shipped the product to local corner stores and gas stations in Colorado. Defendant James Johnson of Castle Rock was a salesperson working for “The Really Cool Stuff Company” and later “Heart of Asia.”
The defendants also shipped product to retail outlets in other states, including Avalon on 4th LLC, associated with defendant Kenneth Chastain in Wisconsin; Main Stop, Inc., associated with defendant Altaf Hussain in Illinois; and “Tobacco Hut,” associated with defendants Peter Karfias and Stephanie Christensen in Nebraska.
To date, eight individuals have been convicted and sentenced as follows:
- John Bowen – 60 months in federal prison
- Daniel Bernier – 42 months in federal prison
- James Johnson – 18 months in federal prison
- Donald Creager, III – 5 years’ probation with 1 year home detention as a condition of probation and a $50,000 fine
- Kenneth Chastain – 60 days imprisonment with 3 years of supervised release to follow
- Altaf Hussain Dandia – 5 years’ probation
- Peter Karfias – 5 years’ probation with 6 months home detention as a condition of probation
- Stephanie Christenson – 5 years’ probation with 3 months of home detention as a condition of probation
The investigation encompassed Colorado, Georgia, Florida, Alaska, Illinois, Texas, Wisconsin, Nebraska, Nevada, with documented distribution of synthetic cannabinoids from Heart of Asia to numerous additional states.
Law enforcement agencies emphasizes that no brand of “Spice” or similar products are safe. All synthetic cannabinoids are dangerous. No “Spice” products have been approved by the FDA, and may constitute controlled substances in violation of state and federal law.
“Synthetic cannabinoid, also known as Spice, is a dangerous illegal substance that can make individuals very ill, and even kill them,” said U.S. Attorney John Walsh. “Thanks to the hard work of law enforcement at every level in Colorado, including the Assistant U.S. Attorneys, and the agents from the DEA, FDA Office of Inspector General and the IRS Criminal Investigation, as well as our state partners, the District Attorney’s Office for the 18th Judicial District and the Colorado Attorney General’s Office -- we’ve removed a substantial amount of Spice from the streets of Colorado, and put in prison those who were making and selling the dangerous substance.”
“The investigation of Bowen’s organization was key to one of the most significant synthetic drug investigations conducted by the Drug Enforcement Administration.” said Barbra Roach, Special Agent in Charge of the DEA Denver Field Division. “Synthetic cannabinoids pose significant and dangerous health threats to our communities, and those who would try to profit from them must be held accountable. There is no such thing as safe ‘Spice’.”
“Those who distribute drugs in a manner that defeats the government’s ability to regulate those products put consumers at risk,” said Catherine A. Hermsen, Special Agent in Charge of FDA’s Office of Criminal Investigations’ Kansas City Field Office. “Our agents will continue to work with other federal partners to bring these criminals to justice.”
“Spice is a dangerous concoction of chemicals and can be deadly,” said Steven Osborne, Acting Special Agent in Charge of IRS Criminal Investigation, Denver Field Office. “By using our financial expertise to follow the money and working with other law enforcement partners we were able to dismantle the operation and get Spice off the streets which in the end will save lives.”
This case was investigated by the Drug Enforcement Administration (DEA), the Food and Drug Administration Office of Criminal Investigation (FDA OCI), the Internal Revenue Service – Criminal Investigation (IRS CI), the ATF, the District Attorney’s Office of the 18th Judicial District, the Aurora Police Department, the North Metro Drug Task Force, the West Metro Drug Task Force, the Castle Rock Police Department, the Denver Police Department, the Lakewood Police Department, and the Colorado Department of Revenue.
The United States Attorney’s Office also commends the 18th Judicial District and the Colorado Attorney General’s office for their work to remove Spice from the shelves of stores in Colorado.
The United States Attorney’s Offices for the Central District of Florida, the District of Nebraska, the District of Nevada, the Western District of Wisconsin and the Northern District of Illinois have provided substantial assistance in this matter as well.
The defendants were prosecuted by Assistant U.S. Attorneys Jaime Pena and Tim Neff, with Tonya Andrews handling the asset forfeiture.
Sanford Wallace Pleads Guilty to Spamming Facebook Users and Disobeying A Court OrderRead the Press Release
SAN JOSE – Sanford Wallace pleaded guilty in federal court in San Jose today to fraud and criminal contempt in connection with misusing electronic mail and related activity, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
In connection with his guilty plea, Wallace, 47, of Las Vegas, Nevada, admitted that, from approximately November 2008 through March 2009, he developed and executed a plan to fraudulently obtain Facebook users’ login credentials in order to gain access to their accounts and send them unsolicited commercial electronic messages (spam). Wallace further admitted that as a result of his plan he accessed approximately 500,000 Facebook accounts and sent more than 27 million commercial electronic messages through Facebook’s servers.
Wallace, also known as “Spam King,” acknowledged accessing Facebook’s computer network in order to send transmissions on three occasions: November 5, 2008, December 28, 2008 and February 17, 2009. As part of his November 2008 activity, Wallace initiated transmission of a program that resulted in more than 125,000 messages being sent to Facebook users. His December 2008 activity resulted in transmission of nearly 300,000 messages to Facebook users and his February 2009 activity resulted in transmission of 125,000 spam messages being sent to Facebook users.
Furthermore, as part of his plea agreement, Wallace admitted he knowingly violated the order of United States District Judge Jeremy Fogel directing Wallace not to access Facebook’s computer network. Specifically, during the proceedings in the civil case Facebook, Inc. v. Sanford Wallace, et al, No.C09-00798 JF, Judge Fogel specifically ordered Wallace not to access Facebook’s computer network on three occasions: March 2, 2009, March 24, 2009, and September 18, 2009. Wallace admitted that that he nevertheless willfully and knowingly violated Judge Fogel’s order on April 17, 2009, by logging into his Facebook account while aboard a Virgin Airlines flight from Las Vegas, Nevada, to New York, New York.
Wallace was indicted by a grand jury on July 6, 2011. He was charged with six counts of fraud and related activity in connection with electronic mail, in violation of 18 U.S.C. §§ 1037(a)(1) and (b)(2)(A); 18 U.S.C. §§ 1037(a)(2) and (b)(2)(C), and 18 U.S.C. §§ 1037(a)(4) and (b)(2)(B). Wallace was also charged with three counts of intentional damage to a protected computer, in violation of 18 U.S.C. §§ 1030(a)(5)(A) and (c)(4)(B)(i), and two counts of criminal contempt, in violation of 18 U.S.C. § 401(3). Under the plea agreement, Wallace pleaded guilty to one count of fraud and related activity in connection with electronic mail and one count of criminal contempt.
Wallace is currently released on bond. His sentencing hearing is scheduled for December 7, 2015, before the Honorable Edward J. Davila, U.S. District Court Judge, in San Jose. The maximum statutory penalty for a violation of 18 U.S.C. §§ 1037(a)(1) and (b)(2)(A) is three years imprisonment, and a fine of $250,000, plus restitution if appropriate. The maximum statutory penalty for a violation of 18 U.S.C. § 401(3) is determined by the Court. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Susan Knight and Hanley Chew are prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
San Antonio Businessman Sentenced to Federal Prison for his Role in an Estimated $1.65 Million Food Stamp Fraud SchemeRead the Press Release
In San Antonio this morning, Senior United States District Judge David Ezra sentenced a San Antonio businessman to federal prison for his role in an estimated $1.65 million Supplemental Nutrition Assistance Program (SNAP) food stamp fraud scheme announced United States Attorney Richard L. Durbin, Jr.
Judge Ezra sentenced 52-year-old Sunny Joseph, owner of Picnic Food Mart on South Hamilton Avenue, to 48 months in federal prison followed by three years of supervised release. Judge Ezra also ordered the defendant to pay $1,652,000 in restitution to the federal Government.
On April 23, 2015, Sunny Joseph pleaded guilty to one count of wire fraud. By pleading guilty, the defendant admitted that between November 2009 and March 2011, he, and employees under his direction, sold ineligible items, including tobacco and alcohol, to SNAP beneficiaries. Furthermore, the defendant admitted that he, and employees under his direction, traded SNAP benefits for cash for a fee averaging between 35-42 cents for every dollar.
The case was investigated by agents with the U.S. Department of Agriculture - Office of Inspector General and prosecuted by Assistant U.S. Attorney Tom Moore.
Roanoke Man Sentenced for Stealing Disability Benefits from Railroad Retirement BoardRead the Press Release
ROANOKE, VIRGINIA – The owner of Thelma’s Chicken and Waffles, a restaurant located in downtown Roanoke, was sentenced today in the United States District Court for the Western District of Virginia in Roanoke for stealing disability benefits from the Railroad Retirement Board.
Christopher Mayo, 46, of Roanoke, previously pled guilty to one count of stealing government monies. The defendant admitted that beginning in 2007 he falsely applied for and received monthly disability annuity payments from the Railroad Retirement Board [RRB]. In all, Mayo received $228,556 in disability payments for which he was not entitled.
Today in District Court, Mayo was sentenced to 14 months of federal incarceration. He was also ordered to pay restitution to the RRB in the amount of $228,556.
An investigation into Mayo began in late 2014 after the RRB received a complaint from Norfolk Southern. The investigation revealed that after applying for disability benefits in 2007, Mayo worked to knowingly hide his employment and ownership of Thelma’s Chicken and Waffles from the RRB. When questioned by investigators in early 2015, the defendant initially stated that he was an investor in the restaurant, was waiting for a big pay day from it and did not make any money from his role in the downtown eatery. He did, later, admit to investigators that he knowingly hid his income in order to continue to receive disability benefits.
The investigation of the case was conducted by investigators with the Railroad Retirement Board- Office of the Inspector General, Office of Investigations. Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.
Previously Indicted McAllen Area Doctor Charged Again and Ordered into CustodyRead the Press Release
McALLEN, Texas ‐ A McAllen area doctor, previously indicted in an illegal kickback scheme, has been charged on new allegations of health care fraud for his scheme to defraud Medicare, announced U.S. Attorney Kenneth Magidson.
Dr. Eduardo Carrillo, 42, of Edinburg, was previously released on bond on the initial charges in June 2015. Following the return of the superseding indictment on Tuesday, Aug. 18, 2015, the government filed a motion to revoke that bond, alleging he violated his previously imposed conditions and engaged in illegal conduct, to include health care fraud. At a hearing held today, U.S. District Judge Randy Crane ordered Carrillo surrender to authorities at the time of his initial appearance on the superseding indictment to be held tomorrow at 11:00 a.m. before U.S. Magistrate Judge Dorina Ramos.
The 12-count superseding indictment alleges Carrillo attempted to cause others to bill Medicare for 34 patients who were actually deceased on the dates Carrillo claimed to have provided services to the them. Carrillo allegedly submitted fraudulent documentation to a billing company so that the company would file claims with Medicare for reimbursement of physician services.
Carrillo was previously charged along with his assistant, Martha Medrano, 47, also of Edinburg, in an indictment returned June 9, 2015, for their scheme to solicit and obtain illegal kickbacks in exchange for patient referrals. In that scheme, Carrillo and Medrano allegedly solicited and obtained cash in exchange for referrals of Medicare beneficiaries to prospective home health agencies.
The superseding indictment charges Carrillo with six new counts of health care fraud in addition to the previously filed charges, which include three counts of illegal remunerations, one count of making false statements and two counts of aggravated identity theft.
Each of the counts of health care fraud carry a maximum punishment of 10 years in federal prison, while illegal remunerations and false statements each carry a possible five-year prison term. If convicted of either of the aggravated identity theft charges. He will also face a mandatory 24 months in federal prison which must be served consecutively to any other prison sentence imposed.
The investigation leading to the charges was conducted by the U.S. Department of Health and Human Services‐Office of Inspector General and the FBI. Assistant United States Attorney Michael Day is prosecuting the case.
An indictment is an accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Owner of Mystic Pizza Sentenced to Federal Prison for Tax Evasion and Structuring Cash TransactionsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England, announced that JOHN ZELEPOS, 49, of North Stonington, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 12 months and one day of imprisonment, followed by three years of supervised release, for tax evasion and structuring cash transactions. ZELEPOS also was ordered to pay a $25,000 fine, forfeit more than $500,000, and pay back taxes with interest and penalties.
According to court documents and statements made in court, ZELEPOS is the sole owner of Mystic Pizza, LLC, a Schedule C retail restaurant business in Mystic, Connecticut. From 2006 to 2010, ZELEPOS diverted approximately $567,435 in cash from Mystic Pizza’s gross receipts, approximately $330,005 of which was deposited into his personal bank account, his and his wife’s personal checking account, his wife’s personal checking account and passbook savings accounts in the name of each of his three minor children. During the same time period, ZELEPOS caused Mystic Pizza to pay a total of $162,168 to two “no-show” employees who performed no work for the restaurant. He then deducted the wages as expenses on his tax return’s Schedule C for Mystic Pizza. ZELEPOS failed to disclose to his tax return preparer receipt of the diverted cash and the two no-show employees.
Based on this conduct, the federal tax loss for 2006 to 2010 was $234,407. ZELEPOS has paid restitution in that amount, but still is required to pay interest and substantial penalties.
ZELEPOS also intentionally structured financial transactions to avoid having the bank file Currency Transaction Reports (“CTR”). Federal law requires all financial institutions to file a CTR for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000. Structuring involves the repeated depositing of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law. Structured funds are subject to forfeiture to the United States.
Between January 2010 and January 2011, ZELEPOS engaged in 61 currency transactions in amounts less than $10,000, depositing a total of $522,658 into the business account, his personal account, his and wife’s personal bank account, and his three children’s bank accounts in amounts ranging from $3,000 to $9,998. The cash deposits were made on sequential days, or multiple cash deposits were made on the same day. ZELEPOS knew that the bank was required to issue a report for a currency transaction in excess of $10,000 and by conducting his financial transactions in amounts less than $10,000 he intended to evade the transaction reporting requirements.
ZELEPOS was ordered to forfeit $522,658 as a result of his illegal structuring.
On January 2012, pursuant to a court-authorized federal seizure warrant, the IRS seized $63,084.49 from a payroll account Mystic Pizza held at Chelsea Groton Bank. Those funds are being applied to the forfeiture, reducing the remaining forfeiture amount to $459,573.51.
On March 31, 2015, ZELEPOS waived his right to indictment and pleaded guilty to one count of tax evasion and one count of structuring financial transactions.
ZELEPOS was ordered to report to prison on October 30, 2015.
This matter was investigated by the Internal Revenue Service - Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.
Orange County Man Pleads Guilty in Two-Pronged Ponzi Scheme that Cause Scores of Investors to Lose More Than $14 MillionRead the Press Release
LOS ANGELES – An Orange County man who operated a Ponzi scheme that featured false promises of large returns to victims who invested in debt obligations and distressed real estate pleaded guilty today to federal mail fraud and wire fraud charges.
William Donnelly Yotty, 69, who currently resides in Monarch Beach, but during the course of the scheme lived in Lodi, California, pleaded guilty to the two felony counts before United States District Judge Margaret M. Morrow.
Yotty, who has been held without bond since being arrested in this case in May 2014, faces a statutory maximum sentence of 40 years in federal prison when he is sentenced by Judge Morrow on November 23.
In a plea agreement filed last week in United States District Court, Yotty admitted that he ran several Lodi-based companies that offered bogus investments in corporate debt obligations and in distressed real estate that he and his salespeople said could be “flipped” for substantial profit.
In the first scheme, which ran from the spring of 2007 through 2009, Yotty and his associates “offered victims investments in convertible debentures (CDs), promissory notes and other financial instruments that defendant falsely and fraudulently represented and promised were safe and secure and would pay substantial interest,” according to the plea agreement. Using companies he operated under the names Global Capital Associates, Inc.; Infostar Systems, Inc.; Pacific Financial Solutions, Inc.; and The Money People, Inc., Yotty solicited money from victims by promising annual interest rates as high as 25 percent. Yotty and salesmen working for him told prospective investors that the companies issuing the debt had sufficient income to pay the promised interest on the investments, and that the capital investment would be returned when the notes matured.
“In fact, as defendant then well knew, the returns were not guaranteed and the investors’ principal was not secure because the only way defendant could fund the ‘interest’ payments he promised to investors was with other investors’ money,” Yotty admitted in his plea agreement.
In the second scheme, which was run through a company he called Fortuno, Inc. and took place during roughly the same time at the first scheme, Yotty offered victims the opportunity to purchase foreclosed real estate at below-market prices, which would allow them to resell, or “flip,” the properties at two or three times their purchase price. In fact, Yotty himself was flipping the properties to the investors at substantial profits for himself. Yotty concealed from the investors that the price they were paying for the properties was double or triple what Fortuno had paid, and that this inflated price would prevent the victims from realizing any profit of their own. As a further inducement to invest in Fortuno, Yotty and his salespeople also falsely promised victims that the properties were in livable condition and that Fortuno would manage the properties until the promised resale.
Yotty and others involved in the scheme raised more than $10 million in the debt obligation scheme, and more than $6 million in the real estate flipping scheme. When the schemes collapsed, approximately 240 investors lost over $14 million.
The investigation into Yotty’s Ponzi scheme was conducted by the Federal Bureau of Investigation.
North Texas Man Sentenced to 93 Months in Federal Prison for Role in Stolen Identity Refund Fraud (SIRF) SchemeRead the Press Release
DALLAS — A north Texas man who pleaded guilty to his role in a stolen identity refund fraud scheme was sentenced today, announced U.S. Attorney John Parker of the Northern District of Texas.
Reminco Zhangazha was sentenced by U.S. District Judge David C. Godbey to 93 months in federal prison and ordered to pay $2,648,334 in restitution. Zhangazha, who is in custody, pleaded guilty in June 2014 to one count of theft of public funds. Zhangazha’s co-defendant in the case, Tonderai Sakupwanya, pleaded guilty last year to the same offense and was sentenced earlier this year to 87 months in federal prison and ordered to pay more than $2.6 million in restitution. The restitution is payable jointly and severally by the two defendants.
The plea agreements with the government note that the defendants will forfeit the following property seized by law enforcement in May 2012 during the investigation of this case: $10,613 cash seized from Zhangazha’s vehicle; $93,513 cash from Villa Piana Luxury Apartments on Noel Road in Dallas; and $4,500 from a residence on Spring Mountain in Plano, Texas.
According to the factual resumes filed in the case, Zhangazha and Sakupwanya engaged in a scheme to defraud the Internal Revenue Service (IRS) by obtaining stolen tax refunds that were generated by e-filing false and fraudulent income tax returns. They rented private mailboxes in the names of aliases by using forged United Kingdom passports. They then established bank accounts using the alias names and mailing addresses acquired at the private mailboxes. During the course of the scheme, Zhangazha used the aliases of “Martin V. Masters” and “Roy Daniel Black.” Sakupwanya used the aliases of “Webster G. Rice,” “Floyd Robbins,” and “Floyd Roberts,” during the scheme, according to the factual resume.
According to the factual resumes, the Forms 1040 directed the IRS to electronically deposit the refunds into bank accounts the defendants established. Alternatively, the Forms 1040 directed refunds to be issued by a treasury check and mailed to an address under the control of the defendants. The income tax returns also directed refunds to accounts established at a third-party financial services company, such as EPS Financial, that would enable them to issue a check containing the tax refund. These third party checks and the treasury checks were deposited into bank accounts the defendants established. After the checks were deposited, or the tax refunds were electronically deposited, the defendants would withdraw the funds for their own use and benefit. The factual resumes note that the cash, mentioned above, which was seized from the defendants during the investigation, was obtained by them as a result of their scheme.
The case was investigated by IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Chris Stokes prosecuted.
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Naples Man Sentenced to More Than Seventeen Years for Three Armed Bank RobberiesRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell sentenced John Robert Haldemann (31, Naples) today to 17 years and 7 months in federal prison for committing three armed bank robberies. As part of his sentence, the Court entered a money judgment in the amount of $14,308, representing the combined proceeds of the robberies. The Court also ordered Haldemann to pay restitution to each of the financial institutions he robbed, plus an additional $799.25 in restitution to Synovus Bank for damages to the bank’s door he had caused during an attempted robbery. Haldemann pleaded guilty on March 24, 2015.
According to court documents, Haldemann committed three armed bank robberies last summer. On June 4, 2014, he robbed a Capital Bank in Venice. He then committed an armed robbery at a Wells Fargo Bank in Naples on July 12, 2014. And, in Punta Gorda on July 25, 2014, he robbed a Bank of America. During each armed bank robbery, Haldemann displayed what appeared to be a firearm and demanded money from bank employees.
This case was investigated by the Federal Bureau of Investigation Violent Crimes Task Force, the Punta Gorda Police Department, the Naples Police Department, the Collier County Sheriff’s Office, the Venice Police Department, and the Sarasota County Sheriff’s Office. It was prosecuted by Assistant United States Attorney David G. Lazarus.