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8 October 2015
Acting United States Attorney Vincent H. Cohen, Jr. to Step DownRead the Press Release
WASHINGTON – Vincent H. Cohen, Jr. announced today that he is resigning as Acting United States Attorney for the District of Columbia, effective at midnight, Oct. 18, 2015. He has led the Office for six months, following nearly five years as Principal Assistant U.S. Attorney.
Acting U.S. Attorney Cohen, 45, a native Washingtonian, succeeded Ronald C. Machen Jr. as the head of the nation’s largest U.S. Attorney’s Office on April 1, 2015. Acting U.S. Attorney Cohen had served since July 2010 as Principal Assistant U.S. Attorney.
Following the recommendation of Del. Eleanor Holmes Norton, President Obama has nominated Channing D. Phillips as the next U.S. Attorney, pending Senate confirmation.
“Over the past six months, Vince Cohen has served the District of Columbia as Acting United States Attorney with integrity and distinction,” said Attorney General Loretta E. Lynch. “Through his work against violent crime, drug trafficking, and national security threats, Vince has demonstrated his commitment to service and his dedication to the people of Washington. I have been proud to serve with Vince for many years, and I'm confident that he will continue to be an exemplary leader and a champion of justice in the next phase of his already distinguished career.”
“It has been a great honor to serve the people of the District of Columbia over the past five years. There is nothing more rewarding than going into work every day with the single goal of improving the lives of the citizens of the city where I was born and raised,” said Acting U.S. Attorney Cohen. “We have made great progress over the past five years in fighting violent crime, public corruption, and threats to our national security. There are some important cases that I wish I could see through to their conclusions, but I have complete confidence in the team at the U.S. Attorney's Office to follow through and do justice for the people of the District. Channing Phillips is a seasoned lawyer with the decades of experience that will allow him to successfully carry on the important work of the Office. In addition to spending more time with my young children, I am looking forward to taking on new professional opportunities and continuing to find ways to serve my hometown. I want to thank my colleagues at the U.S. Attorney's Office, our community partners, law enforcement partners, and everyone who has offered their support of our efforts to build a stronger and safer District of Columbia.”
During Mr. Cohen’s time as Acting U.S. Attorney, the Office secured indictments, convictions, and sentences of dozens of defendants accused of engaging in crimes such as terrorism, financial fraud, public corruption, and homicides. Mr. Cohen also placed a high priority on enforcing federal laws against banks involved in moving money illegally through the U.S. financial system on behalf of sanctioned countries and foreign entities. Under his leadership, the Office also secured millions of dollars from companies accused of violating the False Claims Act and cheating American taxpayers by overbilling the federal government. He helped create and expand the Office’s Cyber Unit to combat cyber-based crimes. Mr. Cohen also played an integral role in the creation of the first federal Conviction Integrity Unit in a United States Attorney’s Office. He has emphasized the importance of community outreach, hosting a youth summit and other events, including visits to homeless shelters, in which he warned of the dangers of using synthetic cannabinoids.
As Acting U.S. Attorney, Mr. Cohen was appointed by Attorney General Lynch as a member of the Attorney General’s Advisory Committee, a small group of U.S. Attorneys from across the country who provide advice and counsel to the Attorney General on policy, management, and operational issues. Mr. Cohen also worked in partnership with a wide variety of law enforcement and regulatory agencies that investigate financial matters, including the Justice Department’s Antitrust Division, the U.S. Securities and Exchange Commission, and the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury.
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National Security: Mr. Cohen supervised the Office’s work on the ongoing case against Ahmed Abu Khatallah for his alleged participation in the 2012 attack on U.S. facilities in Benghazi, Libya, which resulted in the deaths of four Americans. Among other cases, he oversaw work on the prosecution of a dual Dutch-Turkish national, who was extradited to the United States in July 2015 to face terrorism charges stemming from his alleged support of a designated foreign terrorist organization and the prosecution of a Mexican national extradited to the United States last month to face charges in the murder of a U.S. Immigration and Customs Enforcement Special Agent and the attempted murder of another.
Fraud and Public Corruption: For the past several years, Mr. Cohen has led an internal task force focused on local public corruption matters. He helped supervise the work that led to the convictions of three members of the District of Columbia Council and the Chief of Staff to a fourth member of the Council. In addition, he has helped manage the Office’s work leading to the prosecution of eight individuals for wrongdoing associated with the 2010 election for Mayor of the District of Columbia. Under Mr. Cohen’s leadership, the Office continued work on the investigation into the largest domestic bribery and bid-rigging scheme in the history of federal contracting cases. Overall, participants in the scheme stole over $30 million in government money through fictitious invoices and conspired to steer a nearly $1 billion government contract to a favored government contractor. The Office also obtained a 64-month prison sentence in the case of a former U.S. Foreign Service Officer, who accepted over $3 million in bribes to process visas for non-immigrants seeking entry into the United States; a 13-year sentence for a man who operated a $28 million Ponzi scheme; a 17-year sentence for a businessman who took part in an investment fraud scheme that led to over $13 million in losses for investors, and a 46-month sentence for a man who participated in a massive identify theft and tax fraud scheme involving the filing of fraudulent income tax returns seeking over $2.5 million in refunds. Overall, since 2010, under Mr. Cohen’s leadership, more than 150 people have been found guilty or pled guilty to federal corruption charges.
Financial Recoveries: As Acting U.S. Attorney, and earlier in partnership with Mr. Machen, Mr. Cohen sharpened the Office’s focus on financial recoveries, generating over $2.8 billion for the federal government over the last five and a half years through civil and criminal collections and asset forfeiture. In one such case, the U.S. District Court for the District of Columbia entered a formal judgment in May 2015 that required Schlumberger Oilfield Holdings Ltd. (SOHL), a wholly-owned subsidiary of Schlumberger Ltd., to pay a $232,708,356 penalty to the United States for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan.
Under Mr. Cohen’s leadership, the Office’s Civil Division has expanded its work on affirmative civil enforcement actions. A particular focus has been the False Claims Act. The Office now has 159 active cases, including over 40 involving health care fraud. Mr. Cohen has built a strong relationship with the qui tam community by hosting a conference of the Relator’s bar and participating in similar conferences and forums. The Office now has the fourth-highest number of qui tam cases in the country.
For example, in April 2015, two cardiovascular laboratories agreed to pay $48.5 million to resolve allegations that they violated the False Claims Act by paying remuneration to physicians in exchange for patient referrals and billing federal health care programs for medically unnecessary testing. Another company and its principals agreed in July 2015 to pay the government $7.8 million to resolve allegations that they made false statements to obtain contracts through a Small Business Administration program.
Cyber-crime: Mr. Cohen has focused his attention on expanding the Cyber Unit to attack cyber-crimes throughout the country and internationally. The Unit investigates and prosecutes a wide variety of cyber-crimes and advises and assists other parts of the Office with issues related to electronic, computer and Internet-based evidence and legal process. In one recent case, for example, a former employee of the U.S. Department of Energy and U.S. Nuclear Regulatory Commission is accused of an attempted e-mail spear-phishing attack that targeted government employee e-mail accounts.
Violent Crime: As Acting U.S. Attorney, Mr. Cohen has focused heavily on strategies to combat violent crime, coordinating a multi-faceted approach with the Metropolitan Police Department and federal law enforcement partners. He has helped coordinate efforts to devote more federal resources to assisting MPD in dealing with this problem, working closely with the FBI, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and other agencies. During his leadership, Mr. Cohen led the Office’s work to deal with the public safety and health problems stemming from the emergence of synthetic cannabinoids. At his direction, the U.S. Attorney’s Office has launched community education sessions in which prosecutors and D.C. drug prevention experts talk about the dangers of these substances at various locations throughout the District of Columbia. On the enforcement front, the Office is prosecuting sellers of synthetic cannabinoids, and filed federal charges against two men after one of the biggest seizures to date in the District of Columbia.
Community Outreach: Mr. Cohen has been a champion of community outreach throughout his time at the Office, and he led the fifth annual youth summit in June 2015 attended by hundreds of teenagers at the Friendship Collegiate Academy in Northeast Washington. He has spoken at town halls and other neighborhood events. Internally, Mr. Cohen has continued his work on recruiting and diversity. He spoke at the LGBT Bar’s annual conference in Chicago and attended the annual conferences of the National Bar Association and the Hispanic National Bar Association. In addition, he delivered the keynote address in July 2015 at the gala for the conference of the National Black Prosecutors Association. As the head of the Office’s hiring committee, Mr. Cohen was responsible for the hiring of over 150 Assistant U.S. Attorneys, many of whom are from diverse backgrounds.
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Mr. Cohen graduated with honors from Syracuse University in 1992 and obtained his juris doctorate from Syracuse University School of Law in 1995. He first joined the U.S. Attorney’s Office in 1997 following his hiring by then-U.S. Attorney Eric Holder. Mr. Cohen handled criminal and civil matters until 2003, when he left the Office for private practice.
In private practice, Mr. Cohen first worked at Hogan & Hartson (now Hogan Lovells), specializing in white-collar criminal litigation and employment law. Mr. Cohen later became a partner at Schertler & Onorato, where his practice included the representation of individuals and corporations in all aspects of criminal and civil litigation.
10 Defendants Charged in Heroin Trafficking RingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-The U.S. Attorney’s Office announced today that 10 individuals are charged by criminal complaint with operating a heroin trafficking ring on the West Side of Buffalo. The defendants are charged with conspiracy to possess with intent to distribute, and distribution of, heroin. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40, and a $5,000,000 fine.Charged in the complaint are:
• Hector Carattini
• Michael Perez
• Juan Oliverias-Arbelo
• Mark Gonzelez
• Adalberto Cruz
• Maikel Gonzelez
• Alberto Fernandez
• Raymond DeJesus
• Hector Huertas
• Kristie BoncoreAll the defendants, except for Kristie Boncore, are also charged with possession with the intent to distribute, and distribution of heroin which also carries a mandatory minimum penalty of five years in prison, a maximum of 40, and a $5,000,000 fine.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that according to the complaint, between the fall of 2013 and June 15, 2015, the defendants conspired to distribute heroin on the West Side of Buffalo. The investigation utilized court ordered wiretaps as well as undercover purchases conducted by the New York State Police Community Narcotics Enforcement Team (CNET) and the Buffalo Police Department.
According to the complaint, these 10 defendants were street-level distributors or “runners” in a heroin trafficking ring operated by Daniel Molina-Rios who was arrested in June 2015 along with Orlando Rios, Luis Montanez, and Jose Andujar. The organization acquired heroin from the New York City area for distribution in Buffalo but also had an alternate heroin source locally.
DEA Special Agent in Charge James Hunt stated, “Heroin is the archenemy of public health in Buffalo. And this investigation is a reminder to the public that DEA and our law enforcement partners are putting everything on the line to identify those responsible for supplying our city with heroin, like the Molinas-Rio trafficking organization.” SAC Hunt commends the men and women of DEA Buffalo Resident Office, the New York State Police, the Buffalo Police Department and the US Attorney’s Office, Western District of New York, for their tenacious efforts throughout this investigation.
Seven of the 10 defendants were taken into custody and made initial appearances today before U.S. Magistrate Judge Jeremiah J. McCarthy. The seven defendants are being held pending detention hearings.
The criminal complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major David Krause and Lieutenant Kevin Reyes, CNET West Commander, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
7 October 2015
Wellesley Executive Arrested for Million-Dollar EmbezzlementRead the Press Release
BOSTON – The former controller of a Cambridge-based technology company was arrested today for embezzling $1 million from the company.
Andy Kim, 43, of Wellesley, was arrested this morning and charged in a criminal complaint with one count of wire fraud. Kim had an initial appearance this afternoon before U.S. District Court Magistrate Judge M. Page Kelley.
According to the complaint, Kim worked at the company from 2004 until he was fired in July 2015 after the discovery of the theft. Kim allegedly stole $500,000 from the company on two separate occasions, once in July 2014 and again in June 2015. On both occasions, Kim, who as the company’s controller, had access to its checking account. He allegedly disguised the transactions as transfers of capital to the company’s owner, fabricated records that purported to document legitimate capital transfers, and then planted those records in the company’s files.
On both occasions, Kim allegedly wired the money to a bank account belonging to a Massachusetts real-estate investment company. After the fraudulent transfer in July 2014, the president of the real-estate company wrote Kim ten consecutively numbered checks, each for $50,000. Kim periodically deposited those checks into his personal checking account, and then transferred the money, in installments, to another bank account he controlled.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Villa Rica Man Indicted for Million Dollar Advance Fee Fraud SchemeRead the Press Release
ATLANTA - James Thomas has been arraigned on federal charges of wire fraud and money laundering arising from an alleged advance fee fraud scheme involving $1.7 million. Thomas was indicted by a federal grand jury on September 15, 2015.
“This defendant is charged with operating a sophisticated advance fee scheme that took advantage of individuals and businesses who had limited options for financing real estate deals after the recession of 2008,” said U.S. Attorney John Horn. “This case shows that consumers and small businesses must be careful about those with whom they enter business relationships, and should research beyond the information on websites.”
“It is our sincere hope that today's federal grand jury indictment will give the many victims involved in this matter assurance that their case will be heard. The FBI will continue to provide significant resources toward investigating and presenting for prosecution those individuals engaged in such wide spread fraud as is alleged in this case,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: Between 2008 and 2011, Thomas portrayed his firm, Trilateral Capital and Development LLC (“Trilateral”), as a reputable and well established private equity company that had successfully loaned millions of dollars for real estate development projects. Trilateral’s website and marketing materials contained fraudulent misrepresentations about the firm’s past real estate deals. Thomas also misrepresented Trilateral’s finances and on least one occasion e-mailed a fraudulent bank statement purporting to show that Trilateral had over $1.6 million in one account.
Through this scheme, more than 20 individuals and companies from across the country and overseas provided Thomas with more than $1.7 million in advance fees for real estate loans that Thomas never provided. The indictment alleges that Thomas used the advance fees to pay himself and employees, take vacations, fund other business ventures and make charitable contributions.
James Thomas, 44, of Villa Rica, Ga., was arraigned before United States Magistrate Judge Linda T. Walker.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Jeffrey Brown is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
USP Hazelton inmate guilty of assaulting fellow prisonerRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal jury returned a guilty verdict today convicting Deonte Spicer, 28, an inmate at the United States Penitentiary Hazelton, of assaulting a fellow prisoner, United States Attorney William J. Ihlenfeld, II, announced.
Following a two day trial, a jury found Spicer guilty of one count of “Assault with a Dangerous Weapon with Intent to Do Bodily Harm.” Evidence presented at trial indicated that Spicer stabbed a fellow inmate multiple times with a hand crafted weapon during a physical altercation in February 2015.
Spicer faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew Cogar prosecuted the case on behalf of the government. The Federal Bureau of Prisons and the Special Investigative Services Unit at USP Hazelton investigated.
U.S. District Judge Irene M. Keeley presided.
U.S. Department of Justice Awards Grants to Iowa Law Enforcement to Combat CrimeRead the Press Release
CEDAR RAPIDS, IOWA—Since mid-September several Iowa law enforcement agencies have been awarded an Edward Byrne Memorial Justice Assistance Grant by the United States Department of Justice’s Office of Justice Programs (OJP). OJP provides innovative leadership to federal, state, local, and tribal justice systems, by disseminating state-of-the-art knowledge and practices across America, and providing grants for the implementation of these crime fighting strategies. The following Iowa agencies receiving grant funding:
- The Dubuque Police Department was awarded $61,230 to develop, implement, and promote a Body Worn Camera (BWC) program designed to record law enforcement interaction with members of the community.
- The Fort Dodge Police Department and the Webster County Sheriff’s Office were awarded $18,176 to purchase equipment and expand training in officer safety and effective crime scene processing.
- The Sioux City Police Department and the Woodbury County Sheriff’s Office were awarded $19,910 and $19,911, respectively to support the Tri-State Drug Task Force, provide specialized training, and purchase updated equipment.
- The Cedar Rapids Police Department and the Linn County Sheriff’s Office were both awarded $23,190.50. The Police Department will use its grant money to purchase 28 BWCs. The Sheriff’s Office will use its grant money to purchase five mobile computers/tablets, which will increase deputy efficiency, accuracy and reduce on-air communications between dispatch and staff.
United States Attorney for the Northern District of Iowa, Kevin W. Techau, stated, “These grants will support the common federal, state and local goal of strengthening and improving law enforcement skills, capabilities, and procedures.”
OJP works in partnership with the justice community to identify the most pressing crime-related challenges confronting the justice system and provides information, training, coordination, and innovative strategies and approaches for addressing these challenges. Learn more about the Office of Justice Programs at: http://ojp.gov/.
Follow us on Twitter @USAO_NDIA.
U.S. Attorney Announces New Civil Rights Practice and ADA Restaurant InitiativeRead the Press Release
HOUSTON – The U.S. Attorney’s Office for the Southern District of Texas (USAO-SDTX) has established a new Civil Rights Section within its Civil Division that will have the authority to investigate and to remedy civil rights violations within the district, announced U.S. Attorney Kenneth Magidson. This section will be separate from what is handled by Criminal - Civil Rights and will welcome information from the public that brings to its attention possible violations of our nation’s civil rights laws.
The Civil – Civil Rights Section will civilly enforce federal civil rights laws including the Fair Housing Act, Equal Credit Opportunity Act, Religious Land Use and Institutionalized Persons Act, Servicemembers Civil Relief Act, Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964 and the Uniformed Services Employment and Reemployment Rights Act. Civil remedies under these statutes include monetary penalties, injunctions, civil judgments and more.
Coinciding with the 25th Anniversary of the Americans with Disabilities Act of 1990 (ADA), the newly created Civil Rights Section is conducting a review of 25 of Houston’s most popular restaurants to determine if they are in compliance with the ADA. The ADA prohibits discrimination on the basis of disability by places of public accommodation, including restaurants, and requires such places to be designed, constructed and altered in compliance with the accessibility standards established by the ADA’s implementing regulations.
This initiative is in accordance with the Department of Justice’s congressionally-mandated responsibility to review compliance with the ADA and is not in response to any specific complaint against a restaurant. USAO-SDTX objectively selected the restaurants using recent third-party restaurant rankings to review 25 of Houston’s most popular and frequented restaurants.
As part of the review, restaurants will be asked to complete a survey regarding accessibility. Investigators may then conduct on-site inspections to confirm survey responses and to evaluate compliance with federal ADA regulations. Restaurants found to be non-compliant will have the option of entering into a Voluntary Compliance Agreement in which they agree to upgrade their facilities to meet ADA requirements. Restaurants found to be engaging in a pattern or practice of discrimination or failing to enter into an agreement may face a civil lawsuit and can also be subject to monetary penalties and civil fines.
“The ADA is the cornerstone of civil rights for people living with disabilities, and restaurants are required to comply with its accessibility provisions,” said Magidson. “We will take all reasonable steps within our authority to ensure that non-compliant restaurants make the necessary changes, rather than face litigation. Our goal is not to take a heavy-handed approach to this initiative, but to work with the restaurants to bring them into compliance, so that the entire community can enjoy access to the restaurants.”
In conjunction with the establishment of the new Civil Rights Section within the USAO-SDTX Civil Division, the U.S. Attorney’s Office also hosted a Civil Rights Symposium today. The purpose of the event was to discuss the nation’s federal civil rights laws in the areas of disability, housing and education, and highlight the role of the U.S. Attorney’s Office in ensuring compliance and effective monitoring in the areas of affirmative civil rights enforcement. Principal Deputy Assistant Attorney General Vanita Gupta, head of the Department of Justice’s Civil Rights Division, and U.S. District Judge Keith P. Ellison were the featured speakers and addressed civil rights enforcement and a judicial perspective of the enforcement of voting rights, respectively.
Other presentations from various Department of Justice personnel included such areas as disability rights laws and enforcement; discrimination in access to housing, credit and public accommodations; equal educational opportunities; and improving local communities through an active civil rights practice.
Organizations invited to attend included members of the American Civil Liberties Union, City of Houston, Disability Rights Texas, Houston Center for Independent Living, Houston Volunteer Lawyers, Lambda Legal, Leadership for Educational Equality, League of United Latin American Citizens, Lone Star Legal Aid, Mexican American Legal Defense and Educational Fund, National Association for the Advancement of Colored People, South Texas Civil Rights Project, Texas Civil Rights Project, Texas Department of Assistive and Rehabilitative Services, Department of Housing and Urban Development, Department of Education - Civil Rights, Teach for America, Texas Appleseed, Texas Paralyzed Veterans and Texas Wins.
Participants were also able to raise questions or concerns regarding civil rights issues in the Southern District of Texas.
U.S. Attorney Announces Criminal Securities Fraud Charges Against Swisher Hygiene, Inc. and Former Senior-level Corporate AccountantRead the Press Release
CHARLOTTE, N.C. – Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, announced the filing of criminal charges against Swisher Hygiene, Inc. (“Swisher”) and a former senior-level corporate accounting employee in connection with accounting fraud at Swisher. Joining in the announcement is John A. Strong, Special Agent in Charge of the FBI in North Carolina. The criminal charges relate to Swisher’s scheme to defraud the investing public by materially misrepresenting Swisher’s financial position throughout fiscal year 2011.
U.S. Attorney Rose also announced that Swisher, a publicly-traded hygiene and sanitation solutions company based in Charlotte, has entered into a deferred prosecution agreement with the government, in which it accepts responsibility for the accounting fraud scheme and agrees to pay a $2 million monetary penalty.
Former senior-level corporate accounting employee John Pierrard, 49, of Delray Beach, Florida, has also agreed to plead guilty for his role in Swisher’s scheme to manipulate its books and records to fraudulently inflate reported earnings.
“Our financial markets depend on corporate executives and employees honestly reporting their financial results. When they fail to do so, we all suffer. Today’s filings make clear that my Office will continue to work tirelessly to root out financial fraud. And, we will continue to hold criminally responsible both corporations and the individuals who run and work at those corporations when they cook the books. The investing public deserves nothing less,” said U.S. Attorney Rose.
“When companies fraudulently misrepresent their earnings and overall financial strength through illicit accounting practices, not only do shareholders suffer, but the integrity of our financial market is put at risk. Corporate fraud at any level will not be tolerated,” said FBI’s Special Agent in Charge Strong.
According to the bills of information filed for both Swisher and Pierrard, the purpose of the accounting fraud scheme was to ensure that Swisher consistently reported that its adjusted earnings had met or exceeded executive management’s forecasts and to conceal the existence of the fraud from, among others, its auditors, the financial institution with which it had an ongoing credit agreement and the investing public.
According to court filings, when adjusted earnings were falling short of the target, Swisher and its conspirators used various methods to fraudulently manipulate the books and records in order to hit certain adjusted earnings targets. For example, court documents show that in some instances Swisher took expenses that were supposed to be booked to Swisher’s profit and loss statement and moved them to the balance sheet, fraudulently reducing expenses and thereby increasing income. In other examples, when acquiring companies, Swisher inflated certain liabilities that were established for contingent earn-outs, and then fraudulently reduced those liabilities, resulting in increased income. In other instances, court documents show that Swisher engaged in what is commonly referred to as “cookie jar” accounting, by inflating reserves during the process of acquiring other businesses and then fraudulently reducing those reserves and increasing income. For example, according to court filings, as part of the process of closing the books for the third quarter of fiscal year 2011, Swisher made several fraudulent entries in its books and records on a Saturday, weeks into the close process, increasing in one day its September adjusted “earnings” from $2.4 million to $3.5 million.
According to filed documents, the accounting fraud scheme began to unravel when a Swisher employee, identified as Executive A, fired the Controller after he refused to book a fraudulent entry. When the Controller’s allegations were brought to the attention of Swisher’s Audit Committee approximately a month later, it promptly commissioned an independent internal investigation.
The filed bill of information for Pierrard also describes a conspiracy to obstruct justice by misleading the investigators Swisher retained to conduct the independent investigation into the allegations of accounting fraud. Charging documents filed against Swisher and Pierrard note that during the ensuing audit committee investigation executives provided false and/or misleading information in an effort to cover up the accounting fraud scheme.
In the deferred prosecution agreement, Swisher accepts and acknowledges responsibility for the conduct of its former employees as described in the bills of information and agrees to cooperate fully with the United States in its continuing investigation of the fraud. The agreement also recognizes Swisher’s substantial cooperation with the United States to date, including the steps promptly taken by the audit committee upon discovery of the unlawful conduct to thoroughly investigate the unlawful conduct, to take remedial measures to address the unlawful conduct and to minimize the chance that such unlawful conduct would reoccur, as set forth in more detail in the agreement.
In the agreement, Swisher also agrees to pay a $2 million financial penalty, such penalty reflecting the fact that Swisher’s auditors have noted a substantial doubt that the Company’s ability to continue as a going concern and the concern that a greater fine would jeopardize the solvency of the company and put at risk the employment of its approximately 1,000 employees who were not involved in the wrong-doing.
Both bills of information charge one count of conspiracy to commit securities fraud, to falsify books, records, and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants. Pierrard faces a maximum prison term of five years for the conspiracy charge. In determining a defendant’s actual sentence, the Court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges. A plea agreement for Pierrard was also filed today and he is expected to appear before a U.S. magistrate judge to formally enter his guilty plea when the hearing is scheduled by the Court.
U.S. Attorney Rose praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges. She also thanked the U.S. Securities & Exchange Commission for their assistance in the investigation.
Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution.
Two Remaining Defendants Admit to Kidnapping of Jewelry Store EmployeeRead the Press Release
PHILADELPHIA - Salahudin Shaheed, 35, and Basil Buie, 24, both of Philadelphia, PA, pleaded guilty today to their roles in a botched robbery and kidnapping that involved a jewelry store employee. Both defendants pleaded guilty today to conspiracy, kidnapping, and attempted Hobbs Act robbery. A third defendant, Khayree Gay, pleaded guilty earlier. A sentencing hearing for Buie and Shaheed is scheduled for January 2016.
Shaheed recruited defendants Gay and Buie, a/k/a “Basil Tucker,” to rob National Watch and Diamond Exchange, at 101 S. 8th Street in Philadelphia to obtain luxury watches, jewelry, and money which Shaheed said could be found there. The defendants conducted surveillance of National Watch and its employees from a parking lot at 733 Chestnut Street, to identify and then, in disguise, abduct an employee from whom they would forcibly obtain keys, security codes, and the code to the company’s safe from which the robbers would steal luxury watches, jewelry, and money.
On April 4, 2015, the defendants watched an employee that Shaheed had targeted. When the employee entered the garage and approached her car, Shaheed and Buie, wearing masks, gloves, and sunglasses, confronted the victim, Shaheed assaulted her with a Taser, and they kidnapped her.
Each defendant faces a maximum possible statutory sentence of life in prison, five years of supervised release, a fine of up to $750,000, and a $300 special assessment.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and is being prosecuted by Assistant United States Attorneys Jeanine Linehan and Maureen McCartney.
Two Long Island Men Arrested for Defrauding Homeowners in Loan Modification SchemeRead the Press Release
An eleven-count indictment was unsealed today in United States District Court for the Eastern District of New York charging David Gotterup, also known as “David Gott,” and Jason Green with conspiracy to commit mail fraud, wire fraud, and bank fraud in connection with a scheme to defraud homeowners who were attempting to modify their mortgage loans, and related mail fraud counts. The indictment also charged Gotterup with conspiracy to commit wire and bank fraud in connection with a scheme to improperly obtain mortgage loans, and related bank fraud counts, disaster loan fraud, and aggravated identity theft.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Christina Scaringi, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD/OIG); and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
According to court filings, from 2008 to 2012, Gotterup and Green defrauded distressed homeowners who were seeking relief through government mortgage modification programs by convincing more than a thousand homeowners to pay thousands of dollars each in advance fees based on false promises. Gotterup also defrauded financial institutions and the Federal Housing Administration by obtaining mortgages on properties in Brooklyn and Queens by falsifying loan applications and providing false documentation to support the loan applications. In addition, Gotterup used another person’s social security number in connection with these schemes.
After Hurricane Sandy in 2012, Gotterup also applied for a low-interest disaster relief loan from the U.S. Small Business Administration (SBA), allegedly using false information to support the application. As a result, Gotterup received a loan of $113,900 from the SBA. Instead of using the funds to repair property damaged in the disaster, Gotterup used the money to pay for personal expenses, including wedding-related expenses in Cancun, Mexico.
“These men defrauded distressed homeowners and banks to line their pockets,” stated Acting United States Attorney Currie. “We are committed to ending these types of predatory fraud schemes.” Mr. Currie thanked the U.S. Small Business Administration and the Staten Island District Attorney’s Office for its assistance.
“The charges announced today describe a scheme in which the defendants allegedly benefitted from fraudulently obtained proceeds while the cost was transferred to ordinary citizens seeking financial assistance. They are alleged to have simultaneously defrauded the government by unjustly obtaining disaster relief benefits. Today our message is clear: those who exploit gaps in the mortgage industry, banking sector, and government assistance programs will be made to face the error of their ways,” stated FBI Assistant Director-in-Charge Rodriguez.
“We want to send a message to the real estate industry that my office, along with our law enforcement partners, will expend every resource to fight the growing trend of foreclosure rescue frauds, short sale frauds, and disaster-related frauds that ultimately victimize our struggling homeowners and the U.S. taxpayer,” said HUD OIG Special Agent-in-Charge Scaringi.
“Earlier today SIGTARP agents along with other law enforcement agents arrested Jason Green and David Gotterup, who are charged with a scheme in which they allegedly took advantage of homeowners devastated by the financial crisis by fraudulently misleading those seeking assistance through government mortgage modification programs, including HAMP,” said Special Inspector General Romero for the Troubled Asset Relief Program (SIGTARP). “Gotterup and Green purportedly took thousands of dollars in upfront fees from homeowners, making false promises to provide mortgage modification services. Homeowners were led to believe that they had retained the legal services of an attorney who would handle the application and negotiations with their banks but in reality little or nothing was done to modify their mortgages. SIGTARP will continue to aggressively pursue those who commit TARP-related crimes.”
The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Orenstein at the federal courthouse in Brooklyn. The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Unit. Assistant United States Attorneys Sylvia Shweder and Bonni Perlin are in charge of the prosecution.
The Defendants:
DAVID GOTTERUP
Age: 35
Oceanside, NYJASON GREEN
Age: 35
Oceanside, NYE.D.N.Y. Docket No. 15-CR-498
Thirteenth Defendant Pleads Guilty to Springfield Tax Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man pleaded guilty in federal court today to his role in a fraudulent tax return preparation scheme that claimed nearly $340,000 in fraudulent income tax refunds.
Travis L. Ashmead, 30, of Springfield, pleaded guilty before U.S. Magistrate Judge David P. Rush to making a false and fraudulent income tax return.
Co-defendant Cherie Christine Dupuis, 43, of Springfield, pleaded guilty on July 21, 2015, to leading the fraudulent tax return preparation conspiracy. Dupuis admitted that she and co-conspirators defrauded the government by filing false claims for income tax refunds from February 2009 to March 2012. In the false and fraudulent federal income tax returns they prepared and filed, conspirators claimed refunds from the IRS totaling approximately $340,630, of which approximately $336,839 was false. Over the course of the scheme, the total actual tax loss to the IRS was $284,169.
Dupuis admitted that she filed fraudulent federal income tax returns in her own name and for at least 19 other individuals. Dupuis would usually split the fraudulent refunds with her co-conspirators. The total amount of the false claims Dupuis personally prepared and/or filed was approximately $298,708, with approximately $256,281 being paid on these false claims and a loss to the government of approximately $213,711.
For the 2009 and 2010 tax years, Ashmead knowingly aided and abetted Dupuis, and was aided and abetted by Dupuis, in the filing of false federal income tax returns with the IRS, claiming tax refunds to which Ashmead knew he was not entitled. Ashmead provided his personal information to Dupuis, which Dupuis then used to file false income tax returns.
Ashmead admitted that he filed false federal income tax returns for the 2009 and 2010 tax years that falsely listed wages that had not been earned and federal income tax withholdings that had not been withheld. Ashmead fraudulently claimed a refund of $10,343 for the 2009 tax year, but the IRS stopped the refund before it was issued, resulting in no loss to the U.S. Treasury. Ashmead received a fraudulent refund of $10,234 for the 2010 tax year, resulting in a loss to the U.S. Treasury.
Ashmead is the final defendant to plead guilty among 13 co-defendants. In addition to Dupuis, co-defendants Lisa Lorre DeHaven, 34, Claudia Dorsey, 33, Amanda Leigh Boyd, 33, Johnny L. Cooper, 28, and Jeannie Marie Rhodes, 34, all of Springfield; Shawna Marie Hughey, 37, of Joplin, Mo., formerly of Springfield; Heather Nicole Drennen, 32, of Cameron, Mo., formerly of Springfield; William J. Coonce, 29, of Otterville, Mo.; Jeannette R. Dunn, 48, of Huntsville, Ark., formerly of Springfield; Asia Michelle Couchman, 26, of Oak Grove, Mo.; and Delbert L. Allen, 37, of Pleasant Hope, Mo., formerly of Springfield; have also pleaded guilty.
Under federal statutes, Ashmead is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation.
Texas Man Pleads Guilty to Cocaine ConspiracyRead the Press Release
Stacy L. Harden, 42, of Desoto, Texas, pled guilty in federal district court, in East St. Louis, Illinois, on October 6, 2015, to one count of Possession with Intent to Distribute Cocaine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Harden is scheduled for sentencing on January 22, 2016, at 9 a.m. before the Honorable David R. Herndon. Harden faces a potential sentence of a minimum of 10 years to life in prison, a fine of up to $10,000,000, not more than 5 years of supervised release after his prison term, and a mandatory special assessment of $100.
Court proceedings revealed on October 21, 2010, a confidential informant told DEA agents that Harden was in the St. Louis area with a large amount of cocaine for sale. DEA Agents tracked Harden down and on October 22, 2010, observed Harden leave an O’Fallon home with a plastic shopping bag. Harden then went to another residence in Swansea, Illinois, where he left with a black bag. Shortly thereafter, the Fairview Heights police department conducted a traffic stop on Harden at the direction of DEA agents. Harden sped off, driving into a residential area and throwing items out of the window, as witnessed by officers. Approximately 4 kilograms of cocaine were seized by officers. Harden was placed under arrest and later admitted to possessing a total of 7 kilograms of cocaine.
The investigation has been conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Participating agencies include the Drug Enforcement Administration (DEA), Internal Revenue Service, Criminal Investigations, the U.S. Immigration and Customs Enforcement Office of Homeland Security Investigations (ICE HSI), Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), U.S. Marshal Service, the Granite City Police Department, Fairmount City Police Department, Collinsville Police Department, Pontoon Beach Police Department, Park Hills (Missouri) Police Department, the St. Clair County Sheriff’s Department, and the Illinois State Police. This case is assigned to Assistant United States Attorney Daniel T. Kapsak.
Stoughton Man Charged for Sending Bomb Threats to SchoolsRead the Press Release
BOSTON – A Stoughton man was arrested and will appear in U.S. District Court in Boston today to face federal charges for sending multiple false bomb threats to schools in Illinois, Massachusetts, Rhode Island, and North Carolina.
Anthony Rae, 24, was charged via criminal complaint with bomb threats. Rae had previously been charged in Dedham District Court; however, those charges were dismissed today and he was taken into federal custody. Rae is scheduled to appear before U.S. Magistrate Judge David H. Hennessy in Boston at 2:15.
According to the complaint, Rae used three different email accounts to send bomb threats to educational institutions in four different states over the past year. Rae allegedly began in October 2014 when he sent two emails from a Gmail account he created threatening to bomb an elementary school in Chicago, Ill., and several public schools in Norwood, Mass. After that, Rae allegedly hacked his mother’s Hotmail account and used it to send two separate bomb threats to his own school – ITT Technical Institute in Norwood.
A search warrant was obtained for Rae’s residence and numerous electronic devices were seized. The following day, Rae allegedly used a public computer available to tenants of his apartment complex to continue his bomb threat spree – sending a bomb threat to Rhode Island College in Providence, R.I. Massachusetts authorities arrested Rae on June 19, 2015, and charged him with the three Massachusetts threats. Rae was released on conditions, which included prohibitions on the use of electronic devices and GPS monitoring. Despite the strict conditions of release, in September 2015, Rae created another Gmail account and threatened to bomb North Carolina State University in Raleigh, N.C.
The charging statute provides a sentence of no greater than 10 years in prison, three years supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. This case was also investigated the Chicago Police Department – Arson Section, Norwood, and Stoughton Police Departments, Rhode Island State Police Computer Crimes Unit, and the Rhode Island College and North Carolina State University Campus Police Departments. Significant assistance was also provided by the Massachusetts MetroLEC Cyber Crimes Unit and the Norfolk District Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Sherman Man Admits Role in Steroid Manufacturing and Distribution ConspiracyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that MICHAEL D. MASE, 32, of Sherman, pleaded guilty yesterday in Hartford federal court to one count of conspiracy to distribute anabolic steroids.
According to court documents and statements made in court, a long-term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations revealed that individuals were receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation also revealed that certain members of the conspiracy were distributing prescription pills, including oxycodone.
During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, approximately 350 grams of powder cocaine, and four long guns.
In pleading guilty, MASE, a registered nurse and a body-builder, admitted that he purchased anabolic steroids from another member of the conspiracy and distributed them to others, including athletes who competed in body-building competitions.
MASE is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on December 23, 2015, at which time he faces a maximum term of imprisonment of 10 years.
MASE was arrested on April 29, 2015, and is released on a $100,000 bond.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, with the assistance of the U.S. Marshals Service, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
Serenity Hospice and Palliative Care to Pay $2.2 Million to Resolve False Claims AllegationsRead the Press Release
PHOENIX – Serenity Hospice and Palliative Care, a hospice operating in Phoenix, Ariz., has agreed to pay $2.2 million to resolve civil allegations that it violated the federal False Claims Act by submitting false bills to Medicare for hospice services.
“The Medicare hospice benefit is intended for terminally ill patients who need end-of-life care,” said United States Attorney John S. Leonardo. “The U.S. Attorney’s Office will continue to use all legal means at its disposal to ensure that this benefit is not misused for anything other than providing hospice care for qualified patients at the appropriate level of care.”
“Being a hospice provider in the Medicare program is a privilege, not a right. Hospice providers and executives that seek to boost profits by providing hospice services to Medicare beneficiaries whose medical condition does not warrant hospice care compromise both the health of its patients as well as the integrity of Medicare,” said Christian J. Schrank, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General. “Our agency will continue to hold such hospice providers accountable for their actions.”
The Medicare hospice benefit is available for patients who elect palliative care (medical care focused on providing patients with relief from pain, symptoms, or stress) for a terminal illness and who have a life expectancy of six months or less if their illness runs its normal course. When a Medicare patient is admitted to hospice, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness. The settlement agreement resolves allegations that Serenity knowingly submitted false claims for payment to Medicare for hospice patients. In addition to agreeing to pay $2.2 million, Serenity agreed to enter a five-year corporate integrity agreement with the United States Department of Health and Human Services, Office of the Inspector General. Finally, Ruth Siegel, a former nurse and the founder and former president of Serenity, also agreed to be excluded from Medicare, Medicaid, and all other federal health care programs for five years, effective immediately.
The settlement is neither an admission of liability by Serenity nor a concession by the United States that its claims are not well founded.
The settlement resolves a lawsuit filed in February 2014 by Cheryl Sifford under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery obtained. The case was filed in the United States District Court for the District of Arizona and is captioned United States ex rel. Sifford v. Serenity Hospice and Palliative Care (CV-14-00225-PHX-GMS). Ms. Sifford will receive a share of the settlement payment that resolves the qui tam suit she filed.
The case was handled by the United States Attorney’s Office for the District of Arizona and the United States Department of Health and Human Services, Office of Inspector General.
Individuals with information regarding fraud, waste, or abuse related to Medicare or other federal programs are encouraged to file a complaint with the United States Attorney’s Office through the office’s website, http://www.justice.gov/usao/az/, or by calling (602) 514-7500.
RELEASE NUMBER: 2015-097_Serenity
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Seekonk Man Charged with Possession of Child PornographyRead the Press Release
BOSTON – A Seekonk man was arrested today and charged in U.S. District Court in Boston with possession of child pornography.
Sean J. Trahan, 38, was charged in a criminal complaint with one count of possession of child pornography. Trahan was held today pending a probable cause and detention hearing on Oct. 16, 2015, before U.S. District Court Magistrate Judge Donald L. Cabell.
According to the complaint, on Oct. 7, 2015, a search warrant was executed at Trahan’s residence in Seekonk. During the search, a personal computer that contained images of child pornography was seized. During an interview with law enforcement, Trahan stated that he had accessed sites containing child pornography, and that he had been previously convicted of possessing child pornography.
The charge of possessing child pornography provides for a mandatory minimum sentence of 10 years and no greater than 20 years in prison, a minimum of five years and up to a lifetime of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Seekonk Police Chief Craig A. Mace, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
San Antonio Man Sentenced to 262 Months in Federal Prison for Transportation of a Minor with Intent to Engage in Sexual ActivityRead the Press Release
In San Antonio today, 31-year-old George Alexander Martinez was sentenced to 262 months in federal prison followed by a lifetime of supervised release for transportation of a minor for the purpose of engaging in sexual activity announced United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Acting Special Agent in Charge Mark Dawson.
On March 6, 2014, Martinez pleaded guilty to the charge admitting that in October 2012, he transported a 15-year-old female from San Antonio to Southbend, Indiana. While in Indiana, Martinez, admittedly, engaged in sexual conduct with his victim on several occasions and even assaulted her.
Martinez has remained in federal custody since being arrested by HSI agents in San Antonio on February 14, 2014.
“The sentence handed down today should send a clear message to those who contemplate doing harm to minors in this way,” said Acting Special Agent in Charge Mark Dawson, HSI San Antonio. “HSI will continue to work with our law enforcement partners to ensure that those who commit these heinous crimes are held accountable for their actions.”
This case was investigated by HSI and prosecuted by Assistant United States Attorney Bettina Richardson.
Real Estate Investor Pleads Guilty to Bid Rigging and Fraud Conspiracies at Georgia Public Foreclosure AuctionsRead the Press Release
A Georgia real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Fulton and DeKalb counties, Georgia.
Morris Podber admitted that he conspired with others not to bid against one another at public real estate foreclosure auctions on selected properties. After the public foreclosure auctions, Podber admitted that he and his co-conspirators would divvy up the targeted properties in private side auctions, open only to the conspirators. Podber admitted to conspiring to use the mail to carry out their fraud, which included making and receiving payoffs and diverting money to co-conspirators that should have gone to the mortgage holders and others.
“This is the ninth real estate investor held accountable for bid rigging at public foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “We will continue to root out anticompetitive conduct at foreclosure auctions and obtain justice for homeowners and lenders.”
According to documents filed with the court, the purpose of the conspiracies was to suppress and restrain competition and divert money to the conspirators that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner. Podber admitted to participating in a conspiracy in Fulton County from July 2005 until August 2010; and to participating in a conspiracy in DeKalb County from October 2006 to August 2011.
“Incidents of bid rigging at public real estate auctions continue to be an issue in Georgia and elsewhere in the United States, and the FBI would like to remind the public that such matters are violations of federal law,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office. “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying, investigating and prosecuting those individuals engaged in such activities.”
The ongoing investigation is being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information about the task force, please visit www.StopFraud.gov.
Purported Landlord Defrauded HUD's Section 8 Housing Choice Voucher ProgramRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania pleaded guilty in federal court to a charge of theft of government property, United States Attorney David J. Hickton announced today.
Julio Raf Antomachi, III, 27, of Pittsburgh, PA, pleaded guilty to one felony count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that under the Department of Housing and Urban Development’s Section 8 Housing Choice Voucher Program, Antomachi fraudulently received federal housing subsidy monies as a purported landlord of a property located in Pittsburgh, PA. From February 2010 through February 2015, Antomachi wrongfully converted $43,054.00 in federal housing subsidy monies.
Judge Conti scheduled sentencing for Jan. 22, 2016, at 10 a.m. The law provides for a maximum total sentence of ten (10) years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Antomachi bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The United States Department of Housing and Urban Development, Office of the Inspector General, conducted the investigation leading to the Information in this case.
Portland Man Sentenced to 13 Months for Immigration Fraud and False StatementsRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Adam Mack, 39, of Portland, Maine, was sentenced today in U.S. District Court by Judge D. Brock Hornby to 13 months in prison and three years of supervised release for aiding and abetting visa and marriage fraud and making false statements. The defendant pleaded guilty on March 30, 2015. He was also sentenced to a consecutive 4 months in prison for violating the terms of supervised release imposed on him following a 2013 federal conviction for equity skimming.
According to court records, between October 2009 and January 2012, Mack unlawfully assisted foreign nationals who were seeking to become lawful permanent residents, or green card holders, by engaging in marriage and visa fraud and he made false statements regarding his employment of them to the U.S. Citizenship and Immigration Service.
In imposing sentence, Judge Hornby said: "You have been cheating the system all along consistently. It's the deterrence, both general and specific, and just punishment that I think are critical."
"It's always sad to see a former public servant fall so far from the path of public service," said Special Agent in Charge Matthew Etre of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Boston. "But today's sentencing shows that no matter who you are, what position in the community you've held or what influence you thought you had, we will not hesitate to bring you to justice. HSI will continue to work with our law enforcement partners to stop marriage and visa fraud."
The investigation was conducted by HSI and the U.S. Department of State, Bureau of Diplomatic Security.Parks Sentenced to 27 Months for Wire Fraud Relating to Fraudulent Refund Coal Tax Credits and Forfeits MillionsRead the Press Release
Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), and Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation Nashville Field Office; announced today that, Stephen K. Parks, 62, of Little Rock, Arkansas, was sentenced to 27 months imprisonment, three years of supervised release, and ordered to pay $845,000 in restitution to the IRS. Parks pled guilty to a Federal Information charging him with wire fraud relating to a fraudulent investment scheme involving the sale of refined coal tax credits on May 27, 2015.
In addition to serving 27 months in federal prison, Parks agreed to forfeit jewelry purchased with money obtained from the fraudulent sale of tax credits, and consented to the forfeiture of all property seized to date in Case No. 4:13-CV-00054 SWW, to include approximately $7.5 million, plus other pieces of real and personal property, with the exception of a home at 2020 N. Spruce Street, Little Rock, AR, and approximately $73,000 seized from that home.
The refined coal tax credit was added to the tax code by the American Jobs Creation Act of 2004. The credit requires that the refined coal be produced by the taxpayer at a refined coal production facility during the 10-year period beginning on the date the facility was originally placed in service, and sold by the taxpayer to an unrelated person.
On or about June 1, 2010, Parks formed Global Coal, LLC, and served as its CEO, President and Manager. He was also President of Ecotec Coal, LLC and King Coal, LLC. Global Coal has never refined any coal or sold any refined coal to an unrelated third party, as required by Title 26, United States Code, Section 45. Global Coal has never had a facility in place to refine coal, as required by 26 U.S.C. § 45. As of March 2015, Global Coal has failed to file any federal income tax returns and has never purported to create refined coal tax credits pursuant to 26 U.S.C. § 45 in any federal tax return. Despite knowledge of these facts, Parks approved and facilitated the sale of nonexistent Global Coal refined coal tax credits through a broker to the investor, representing that the tax credits were valid and available for sale. Parks subsequently used a large portion of the proceeds of that sale for his personal use and the use of his family.
In late 2011, a broker acting on behalf of Parks and Global Coal began communicating with the representative of a potential investor regarding Global Coal and Ecotec Coal refined coal tax credits. Parks represented to the broker that Global Coal tax credits were available for sale and was in communication with the broker throughout the course of the Global Coal tax credit transaction.
On January 9, 2012, the investor agreed to purchase 845,000 Global Coal tax credits and 268,000 Ecotec Coal tax credits for total payment of $723,450. On January 13, 2012, the investor wired $549,250 from a bank in Iowa into King Coal Holding LLC’s account at Delta Trust & Bank in Arkansas. A backdated invoice dated December 30, 2011, reflected the sale of 845,000 Class C Units of interest of Global Coal, LLC, the sole benefit of which is $845,000 of Refined Coal Tax Credits to the investor. The invoice reflected the total due as $549,250 to be wired to a Delta Trust & Bank account with account name "KHC, LLC c/o Global Coal". The Global Coal, LLC subscription documents reflect that Stephen Parks is the manager and CEO and contain his signature. The documents also acknowledge receipt by Global Coal of $549,250 from the investor. A separate invoice was sent for the Ecotec Coal tax credits, which directed that $174,200 be wired Ecotec Coal’s account at First Security Bank.
From the proceeds of the Global Coal tax credit sale, Parks wrote a $40,000 check to his wife for "Coal Rights Arkansas." This $40,000 was part of approximately $1.3 million paid to Parks’ wife from 2008-2012 for "advanced royalties." According to a "Royalty Agreement" backdated to December 1, 2007, Parks’ wife "controls certain mineral rights within the state of Arkansas and King Coal, LLC . . . desires to extract coal from these properties . . ." In fact, Parks’ wife had no interest in any land with coal rights in Arkansas and had no mineral rights to coal during the time she was receiving the "advanced royalties." In 2014 tax court pleadings, the explanation of Parks’ wife’s receipt of royalties was altered, alleging that Parks’ wife "assisted and facilitated the negotiations" between the parties to a lease agreement regarding coal rights.
Also from the proceeds of the Global Coal tax credit sale, a check to Delta Trust & Bank for $301,271.50 was used to purchase a cashier’s check. That cashier’s check was used to purchase 4817 Stonewall Road, Little Rock, Arkansas, a residence located behind the Parks family residence, and was purchased to be torn down and used as a back yard for the Parks family.
The case was investigated by special agents from the FBI and the IRS-Criminal Investigations.
Owner of Buffalo Deli Pleads Guilty to Food Stamp FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Samir Hassan, 35, of Buffalo, NY, pleaded guilty to food stamp fraud before U.S. District Judge Frank P. Geraci. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that Hassan was the owner and operator of City Market & Deli and City Market in Buffalo. Between November 1, 2010 and August 31, 2012, the defendant directed his employees to purchase food stamp benefits for less than their full value in exchange for cash from eligible beneficiaries.
The plea is the result of an investigation by the United States Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William Squires.
Sentencing is scheduled for February 17, 2016 at 10:00 a.m. before Judge Geraci.
Operator of North Jersey Tax Preparation Business Pleads Guilty to Tax FraudRead the Press Release
NEWARK, N.J. – A Kissimmee, Florida, man today admitted preparing fraudulent income tax returns for himself and his clients, resulting in tax losses of over $320,000, U.S. Attorney Paul J. Fishman announced.
Sixto Rodriguez, 52, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to Count 1 and Count 6 of a second superseding indictment charging him with filing a false tax return on behalf of himself for tax year 2007 and aiding and assisting in the filing of a false and fraudulent tax return on behalf of another for tax year 2009.
According to documents filed in this case and statements made in court:
From 2007 through 2012, Rodriguez operated a tax preparation business in Teaneck, New Jersey, by the name of 1-2-3 Taxes. Rodriguez personally met with clients, prepared their individual income tax returns and filed the returns with the IRS.
Rodriguez admitted to inflating education credits, charitable donations, unreimbursed business expenses and rental losses that he knew his clients had not actually incurred. Rodriguez also admitted reporting only $1,600 of the $237,179 his business made in 2007. Altogether, Rodriguez caused tax losses of $321,061.
Both the false filing charges to which Rodriguez pleaded guilty carry a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 8, 2016.
U.S. Attorney Fishman credited special agents 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 Daniel Shapiro and David M. Eskew of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Miles Feinstein Esq., Clifton, New Jersey
New Indictment Adds Bank Fraud and Financial Aid Fraud Charges Against Two Orange County Men Charged with Conspiring to Provide Material Support to ISILRead the Press Release
Two Orange County men who were indicted in June 2015 for conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL) have been indicted for additional charges involving bank fraud and financial aid fraud.
Nader Elhuzayel, 25, and Muhanad Badawi, 24, both of Anaheim, California, were named in a superseding indictment returned today by a federal grand jury in Santa Ana. Elhuzayel is charged in the indictment with 25 counts of bank fraud, and Badawi is charged with one count of federal financial aid fraud.
According to the first superseding indictment, during April and May of this year, Elhuzayel obtained cash through a scheme to defraud three different banks, by depositing stolen checks into his personal checking accounts and then withdrawing cash at Orange County branch offices and ATMs. Co-defendant Badawi is charged with using his federal financial aid to purchase a plane ticket for Elhuzayel to travel to Turkey.
The first superseding indictment reiterates the previous charges against Elhuzayel and Badawi. Both men were charged in count one with conspiring to provide material support to ISIL, in count two Elhuzayel was charged with attempting to provide material support to ISIL, and in count three Badawi was charged with aiding and abetting an attempt to provide material support to ISIL. The time of the alleged fraud and the time of the terrorist activity coincide. In June, both men entered pleas of not guilty to all charges, and they have been held in federal custody without bond since that time.
Both men were arrested on May 21, 2015, when Elhuzayel attempted to board a plane at Los Angeles International Airport to travel to Turkey to join ISIL. The affidavit in support of the criminal complaint, filed on May 22, outlined a scheme in which Badawi and Elhuzayel used social media to discuss ISIL and terrorist attacks, expressed a desire to die as martyrs, and made arrangements for Elhuzayel to leave the United States to join ISIL. In recorded conversations, Badawi and Elhuzayel “discussed how it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we,” according to the complaint affidavit.
If convicted on the charges in the first superseding indictment, Elhuzayel faces a statutory maximum sentence of 30 years imprisonment on each bank fraud count, Badawi faces a statutory maximum sentence of 5 years imprisonment on the financial aid fraud count, and both men each face a statutory maximum sentence of 15 years in prison on each count of providing material support to ISIL.
Trial is scheduled for June 7, 2016, before the Honorable David O. Carter, United States District Judge, at the United States Courthouse in Santa Ana, California.
The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County, which includes the following agencies: the Anaheim Police Department, the California Highway Patrol, the Orange County Sheriff’s Department, the Orange County Intelligence Assessment Center, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Secret Service, IRS – Criminal Investigation, the City of Orange Police Department, the Irvine Police Department, and the Buena Park Police Department.
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.
Navajo Man from Sanostee Sentenced to Federal Prison for Assault ConvictionRead the Press Release
ALBUQUERQUE – Milton Washburn, 30, an enrolled member of the Navajo Nation who resides in Sanostee, N.M., was sentenced this afternoon in federal court in Albuquerque, N.M., to 46 months in prison followed by three years of supervised release for his assault conviction.
Washburn was arrested on Oct. 23, 2014, on a criminal complaint charging him with assaulting another Navajo man on Oct. 19, 2014, by running over him with a vehicle. Court filings reflect that officers of the Navajo Nation Division of Public Safety responded to a call reporting that the victim had been deliberately run over by a vehicle and was seriously injured. The victim was taken to the hospital where he received medical treatment for a number of internal injuries, including rib fractures, a collapsed lung, a damaged liver, and a spinal fracture.
On Nov. 5, 2014, Washburn was indicted and charged with assault with a dangerous weapon - a vehicle - and assault resulting in serious bodily injury. According to the indictment, Washburn committed these crimes within the Navajo Indian Reservation in San Juan County, N.M.
On April 27, 2015, Washburn pled guilty to one count of the indictment, assault resulting in serious bodily injury, and admitted that on Oct. 19, 2014, he ran over the victim with a vehicle after he engaged in an altercation with the victim. Washburn acknowledged that the victim suffered multiple injuries as a result of the assault.
This case was investigated by the Shiprock office of the Navajo Nation Division of Public Safety and the Farmington office of the FBI. Assistant U.S. Attorneys Raquel Ruiz-Velez and Elaine Ramirez prosecuted the case.Nation's Second-Largest Nursing Home Pharmacy to Pay $9.25 Million to Settle Kickback AllegationsRead the Press Release
The nation’s second-largest nursing home pharmacy, PharMerica Corp., has agreed to pay $9.25 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug Depakote for nursing home patients. PharMerica is headquartered in Louisville, Kentucky.
“Elderly nursing home residents suffering from dementia have little control over the medications they receive and depend on the unbiased judgment of healthcare professionals for their daily care,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”
Nursing homes rely on consultant pharmacists, such as those employed by PharMerica, to review their residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents. The settlement announced today resolves allegations that in exchange for recommending that physicians prescribe Depakote, an anti-epileptic drug manufactured by Abbott, to nursing home residents, PharMerica solicited and received kickbacks from Abbott. The government alleges that the kickbacks were disguised as rebates, educational grants and other financial support.
In May 2012, the United States, numerous individual states and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including PharMerica. The settlement announced today resolves PharMerica’s role in that alleged kickback scheme.
“The settlement announced today should serve as a stark reminder to pharmaceutical companies and those with whom they do business that the Department of Justice and its investigative agencies will continue to monitor their activities,” said U.S. Attorney Anthony P. Giorno of the Western District of Virginia. “When those activities involve improprieties such as the payment of kickbacks, we will not hesitate to hold them accountable. We owe nothing less in fulfilling our duty to ensure that nursing home residents are provided with the appropriate drugs based upon their needs rather than the business interests of the companies providing the drugs.”
Approximately $6.75 million of the settlement will go to the United States, while $2.5 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement. The Medicaid program is jointly funded by the federal and state governments.
“Nursing home pharmacies accepting kickbacks from drug makers in exchange for prescribing certain prescription drugs puts vulnerable residents at risk for receiving unnecessary medications, corrupts medical decision making, and inflates health care costs,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “Our agency will continue to root out such corrosive practices from our health care system.”
The settlement partially resolves allegations in two lawsuits filed in federal court in the Western District of Virginia by Richard Spetter and Meredith McCoyd, former Abbott employees. The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The act also allows the government to intervene and take over the action, as it did in part in this case. As part of today’s resolution, Ms. McCoyd will receive $1 million from the federal share of the settlement amount.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25.2 billion through False Claims Act cases, with more than $16.1 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was jointly handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Western District of Virginia, HHS-OIG, the commonwealth of Virginia’s Office of Attorney General and the National Association of Medicaid Fraud Control Units.
The cases are captioned United States ex rel. Spetter v. Abbott Labs., et al., Case No. 10-cv-00006 (W.D. Va.) and United States ex rel. McCoyd v. Abbott Labs., et al., Case No. 07-cv-00081 (W.D. Va.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Nanny Charged with Forging Dozens of Checks from Employers’ Bank AccountRead the Press Release
BOSTON – A Randolph woman who was employed as a nanny was arrested today and charged in U.S. District Court in Boston with forging 65 checks totaling over $280,000 from her employers’ bank account.
Stephanie L. Fox, 30, was arrested today and charged in a criminal complaint with three counts of bank fraud. Fox will have an initial appearance before U.S. District Court Magistrate Judge Donald L. Cabell this afternoon.
According to the complaint affidavit, Fox was employed as a nanny from about February 2013 until August 2015 when her employers discovered that for more than a year, Fox had been writing checks on one of their bank accounts and forging one of their signatures on the checks. Fox avoided detection by destroying the bank account statements when they arrived at her employers’ home. In total, it is alleged that Fox forged 65 checks totaling $281,917, using the money to purchase jewelry, including a diamond pendant necklace and three Movado watches, as well as for travel to places such as the Bahamas, Aruba, Hawaii, Newport, Disney, and Cape Cod.
The charging statute provides for a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $1 million, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Commissioner William Evans of the Boston Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
More Former Stamp Farms Employees Sentenced for ConspiracyRead the Press Release
Andrew and Robert Trowbridge hid a $100,000 pulling tractor and other Stamp Farms assets from the bankruptcy trustee
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that brothers Andrew and Robert Trowbridge of South Haven, Michigan, were sentenced for conspiring to conceal assets from the Stamp Farms bankruptcy trustee. Robert Trowbridge also made a fraudulent crop insurance claim. U.S. District Judge Robert Holmes Bell sentenced each brother to one year of probation, a $10,000 fine and 200 hours of community service.
Andrew and Robert Trowbridge hid a high-performance pulling tractor from the Stamp Farms bankruptcy trustee and lied about it during bankruptcy proceedings. The pulling tractor, named "Ghost Rider," was worth more than $100,000. Robert Trowbridge also made a fraudulent claim for approximately $50,000 in crop insurance, and accepted payment of more than $22,000 that was concealed from the bankruptcy trustee. The Trowbridges ultimately returned the pulling tractor, and Robert Trowbridge repaid some of the assets he concealed from the bankruptcy trustee. The Trowbridges told Judge Bell they committed these crimes at Michael Stamp’s request.
To date, five former Stamp Farms employees have been convicted of federal felonies for their involvement in crimes arising out of their employment there, including Melissa Stamp, who is serving a twenty-one month sentence for hiding approximately $200,000 of bankruptcy assets.
The U.S. Attorney’s Office is continuing to investigate crimes arising out of the business formerly known as Stamp Farms. Anyone with knowledge of those crimes should contact the U.S. Attorney’s Office at 616-456-2404.
This case was investigated by the U.S. Bankruptcy Trustee’s Office, and agents with IRS Criminal Investigations, the U.S. Secret Service, and the USDA Office of Inspector General. Assistant U.S. Attorneys Michael A. MacDonald and Clay Stiffler prosecuted the case.
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Minnesota Woman Sentenced for Using A Passport Secured by A False StatementRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Cubtan Abdirahman Nur, 50, of Minneapolis, Minnesota, who was convicted of using a passport secured by a false statement, was sentenced to two years probation and a $1,000 fine by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that on April 21, 2015, the defendant attempted to enter the United States at the Rainbow Bridge Port of Entry. To gain entry, Nur used a United States passport. Authorities linked the defendant’s passport to a passport application filed in 2011 in which Nur claimed she was born in Ethiopia and only used one identity. Fingerprint analysis and a subsequent confession determined that in fact Nur reported a different name, birthdate, and country of birth when she filed for asylum in 1997.
The sentencing is the culmination of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero and the Department of State, under the direction of Resident Agent in Charge William Ferrari.
Miami Physician Indicted for Role in $20 Million Health Care Fraud SchemeRead the Press Release
A Miami physician was charged in an indictment unsealed today with participating in a Medicare fraud scheme that caused losses of more than $20 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Henry Lora, M.D., 51, of Miami, was charged with one count of conspiracy to commit health care fraud and wire fraud; and one count of conspiracy to defraud the United States, receive health care kickbacks and make false statements relating to health care matters.
According to allegations in the indictment, Lora and Isabel Medina owned and operated Merfi Corporation (Merfi), a Miami-area clinic that employed physicians, physician assistants and other medical professionals. The indictment alleges that, in exchange for kickbacks and bribes, Lora and his co-conspirators wrote prescriptions for home health care and other services for Medicare beneficiaries that were not medically necessary or not provided. Lora and his co-conspirators allegedly falsified patient records to make it appear as if the beneficiaries qualified for the services for which Medicare was billed.
According to the indictment, the alleged actions of Lora and his co-conspirators prompted multiple Miami-Dade home health care agencies and other providers to bill Medicare for services that were not medically necessary or not provided. Medicare made payments on these fraudulent claims.
Medina pleaded guilty to conspiracy to commit health care fraud and was sentenced in March 2014 to nine years in prison. Medina admitted that her activities and those of her co-conspirators at Merfi caused losses to the Medicare program exceeding $20 million.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. This case is being prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Lora Indictment
Medical Device Manufacturer Permanently EnjoinedRead the Press Release
Late yesterday, a federal judge in South Dakota issued a permanent injunction against Robert “Larry” Lytle of Rapid City, South Dakota and his medical device businesses, the Justice Department announced. Lytle marketed laser devices to treat a variety of medical conditions and diseases through several entities, including QLasers PMA and 2035 PMA, and is the owner and operator of 2035 Inc.
In October 2014, the Justice Department brought a civil action to enforce provisions of the federal Food, Drug and Cosmetic Act (FDCA). As the court found, Lytle and his businesses violated the FDCA by marketing and distributing the QLaser devices nationwide for the treatment of more than 200 different diseases and medical disorders without clearance or approval from the U.S. Food and Drug Administration (FDA).
“We brought this lawsuit because Mr. Lytle had been putting consumers at risk, while attempting to evade the FDCA – a law Congress enacted to protect public health and safety,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is especially noteworthy and gratifying that the Department was able to obtain some recompense for the innocent consumers whom Lytle victimized.”
According to the complaint and evidence adduced at a trial, Lytle has been distributing the QLaser devices with false and misleading labeling claims, touting their use for treating such serious conditions as cancer, HIV/AIDS and diabetes. Although two of the devices are cleared for providing temporary relief of pain associated with osteoarthritis of the hand, none of the devices have been cleared by the FDA or otherwise approved to treat any other medical conditions. Moreover, using the QLaser devices can be harmful in certain situations, and its use to treat other serious conditions, is unsupported by any published clinical studies.
The permanent injunction issued yesterday by U.S. District Court Chief Judge Jeffrey L. Viken follows a trial held in March 2015, in which the government established that the QLaser’s labeling was false and misleading and that, in fact, using the lasers according to their directions could be dangerous to health. Yesterday’s court order requires that Lytle and his businesses cease directly or indirectly manufacturing, packing, labeling and/or distributing any medical device unless and until they comply with certain terms of the injunction.
The court also ordered Lytle to refund the full amount consumers paid for their QLaser devices, whether the devices were purchased directly from Lytle’s businesses or through one of his several distributors. Depending on the specific package purchased, each consumer typically paid between $4,295 and $12,600, according to the evidence before the court. Lytle has admitted that he has sold at least 20,000 devices since 1998.
Lytle is required to pay the United States $10,000 per day for any violation of the permanent injunction, and is subject to other sanctions, including fines and imprisonment, for failing to comply.
“This ruling will help restore consumer confidence and send a strong message that a company cannot exercise blatant disregard of the law, especially when consumers’ health is at risk,” said U.S. Attorney Randolph J. Seiler of the District of South Dakota. “Justice has been served with this permanent injunction, and it will prohibit Mr. Lytle from continuing to thumb his nose at federal regulations that protect public health and safety.”
“Robert Lytle and his businesses ignored previous FDA warnings and continued to produce and distribute these devices in violation of federal law,” said Acting Director Jan Welch of the Office of Compliance in the FDA’s Center for Devices and Radiological Health. “The FDA will remain vigilant in protecting the health of the American public by ensuring that medical devices are shown to be safe and effective before being used by patients.”
The government’s case is being handled by Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Camela C. Theeler of the District of South Dakota. Sonia Nath, with the FDA’s Office of Chief Counsel, is assisting with this case.
QLasers PMA and Robert Lytle Order of Permanent Injunction (399.06 KB)
Media advisoryRead the Press Release
CHARLESTON, W.Va. – Pursuant to the Court’s directive in the case of United States v. Blankenship, all government exhibits admitted into evidence and published to the jury will be made available to the press and the public no later than 9:00 a.m., the day after admission and publication of the exhibits. The exhibits will be posted to a link on the website of United States Attorney Booth Goodwin at http://www.justice.gov/usao-sdwv.
Maryland Man Sentenced to Prison for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
A resident of Capitol Heights, Maryland, was sentenced today to serve 46 months in prison for his involvement in a far-reaching identity theft and tax fraud scheme in which he and others working with him filed fraudulent federal income tax returns seeking more than $2.5 million in refunds, the Justice Department announced.
Alvalonzo Graham, 30, is among approximately 12 people who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns using stolen identifying information that sought refunds of at least $40 million from the U.S. Treasury.
The sentencing was announced by Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia, Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service’s (USPIS) Washington, D.C., Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
On March 18, 2014, Graham pleaded guilty to conspiracy to defraud the United States through the filing of false income tax returns. He was sentenced by U.S. District Judge Ellen S. Huvelle of the District of Columbia. Upon completion of his prison term, he will be placed on three years of supervised release. In addition, as part of his plea agreement, Graham must pay $424,017.35 in restitution to the IRS.
“Today’s sentence is a warning to those who think they can profit from stealing identities and filing false claims for refund,” said Acting Assistant Attorney General Ciraolo. “The department has made it a priority to work with the IRS and other federal and state law enforcement agencies to fully investigate and prosecute stolen identity refund fraud and see that these offenders pay for their crimes with significant jail terms.”
“The theft of identities and taxpayer dollars has become a nationwide epidemic, and this case shows the lengths that criminals will go in pursuit of cashing in,” said Acting U.S. Attorney Cohen. “Unfortunately for Alvalonzo Graham and his co-conspirators, this case also shows the lengths that law enforcement will go to protect taxpayers’ dollars and to prosecute those who try to scam the system.”
“Perpetrators of identity theft schemes are motivated by greed, acting as if they are above the law and with total disregard for the consequences to the victims,” said Special Agent in Charge Jankowski. “The actions of criminals such as Mr. Graham, create distressing hardships for many innocent taxpayers and have a devastating impact on the entire community.”
“This case serves as yet another example of the significant results that can be achieved when law enforcement agencies partner, share information, and collaborate,” said Inspector in Charge Bowers. “Identity theft is an increasing problem. Today’s sentence shows that this type of criminal conduct, especially when it involves the U.S. mail, will not be ignored or go unpunished.”
“Today’s sentencing reflects the Treasury Office of Inspector General and our law enforcement partners continuing focus and efforts to protect both the Treasury and the hard-working American taxpayers from offenders who fraudulently conspire to obtain improper payments from the Treasury,” said Assistant Inspector General for Investigations Phillips.
According to the government’s evidence, Graham participated in a massive and sophisticated identity theft and false tax refund scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. The refunds were sought for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. In other cases, the refunds were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, from January 2011 through July 2012, Graham prepared and mailed fraudulent federal income tax returns, deposited the fraudulently-obtained tax refund checks into his own bank account and recruited, coordinated, directed and compensated others in the execution of the scheme, including a bank teller. Graham’s actions and those of the people he directed and paid resulted in the filing of approximately 492 fraudulent income tax returns claiming $2,552,740 in refunds. He maintained a bank account into which he deposited approximately 97 fraudulently obtained U.S. Treasury checks that totaled approximately $424,017. Graham kept portions of these fraudulently obtained refunds.
In announcing the sentence, Acting Assistant Attorney General Ciraolo, Acting U.S. Attorney Cohen, Special Agent in Charge Jankowski, Inspector in Charge Bowers and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo and Ida Anabarian. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.
Maryland Man Sentenced to 46 Months in Prison for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
WASHINGTON – A resident of Capitol Heights, Maryland, was sentenced today to serve 46 months in prison for his involvement in a far-reaching identity theft and tax fraud scheme in which he and others working with him filed fraudulent federal income tax returns seeking more than $2.5 million in refunds, the Justice Department announced.
Alvalonzo Graham, 30, is among approximately 12 people who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns using stolen identifying information that sought refunds of at least $40 million from the U.S. Treasury.
The sentencing was announced by Acting U.S. Attorney Vincent H. Cohen, Jr. of the District of Columbia, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service’s (USPIS) Washington, D.C., Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
On March 18, 2014, Graham pleaded guilty to conspiracy to defraud the United States through the filing of false income tax returns. He was sentenced by U.S. District Judge Ellen S. Huvelle of the District of Columbia. Upon completion of his prison term, he will be placed on three years of supervised release. In addition, as part of his plea agreement, Graham must pay $424,017 in restitution to the IRS.
“The theft of identities and taxpayer dollars has become a nationwide epidemic, and this case shows the lengths that criminals will go in pursuit of cashing in,” said Acting U.S. Attorney Cohen. “Unfortunately for Alvalonzo Graham and his co-conspirators, this case also shows the lengths that law enforcement will go to protect taxpayers’ dollars and to prosecute those who try to scam the system.”
“Today’s sentence is a warning to those who think they can profit from stealing identities and filing false claims for refund,” said Acting Assistant Attorney General Ciraolo. “The department has made it a priority to work with the IRS and other federal and state law enforcement agencies to fully investigate and prosecute stolen identity refund fraud and see that these offenders pay for their crimes with significant jail terms.”
“Perpetrators of identity theft schemes are motivated by greed, acting as if they are above the law and with total disregard for the consequences to the victims,” said Special Agent in Charge Jankowski. “The actions of criminals such as Mr. Graham create distressing hardships for many innocent taxpayers and have a devastating impact on the entire community.”
“This case serves as yet another example of the significant results that can be achieved when law enforcement agencies partner, share information, and collaborate,” said Inspector in Charge Bowers. “Identity theft is an increasing problem. Today’s sentence shows that this type of criminal conduct, especially when it involves the U.S. mail, will not be ignored or go unpunished.”
“Today’s sentencing reflects the Treasury Office of Inspector General and our law enforcement partners continuing focus and efforts to protect both the Treasury and the hard-working American taxpayers from offenders who fraudulently conspire to obtain improper payments from the Treasury,” said Assistant Inspector General for Investigations Phillips.
According to the government’s evidence, Graham participated in a massive and sophisticated identity theft and false tax refund scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. The refunds were sought for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. In other cases, the refunds were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, from January 2011 through July 2012, Graham prepared and mailed fraudulent federal income tax returns, deposited the fraudulently-obtained tax refund checks into his own bank account and recruited, coordinated, directed and compensated others in the execution of the scheme, including a bank teller. Graham’s actions and those of the people he directed and paid resulted in the filing of approximately 492 fraudulent income tax returns claiming $2,552,740 in refunds. He maintained a bank account into which he deposited approximately 97 fraudulently obtained U.S. Treasury checks that totaled approximately $424,017. Graham kept portions of these fraudulently obtained refunds.
In announcing the sentence, Acting U.S. Attorney Cohen, Acting Assistant Attorney General Ciraolo, Special Agent in Charge Jankowski, Inspector in Charge Bowers and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo and Ida Anbarian. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.
Manhattan U.S. Attorney Announces Charges Against Four Prominent Honduran Businessmen for Laundering the Proceeds of Narcotics and Bribery Offenses Through Accounts Located in the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, the Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), announced today that Honduran bankers JAIME ROLANDO ROSENTHAL OLIVA, YANI BENJAMIN ROSENTHAL HIDALGO, YANKEL ROSENTHAL COELLO, and ANDRES ACOSTA GARCIA were charged in connection with a multi-year scheme to launder the proceeds of narcotics trafficking offenses and foreign bribery offenses through accounts located in the United States. ROSENTHAL COELLO was arrested last night in Miami, Florida, and will appear this afternoon before United States Magistrate Judge Chris M. McAliley in Miami federal court. The remaining three defendants are at large.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Yankel Rosenthal Coello and his co-defendants used the banking system and their businesses to launder proceeds of narcotics trafficked to the U.S. Thanks to the outstanding investigative work of the DEA, these alleged criminals now face U.S. charges.”
In a separate action today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated ROSENTHAL OLIVA, ROSENTHAL HIDALGO, and ROSENTHAL COELLO as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (“Kingpin Act”) for playing a significant role in international narcotics trafficking. OFAC also designated several of the businesses associated with the defendants as Specially Designated Nationals under the Kingpin Act, including Inversiones Continental (Panama), S.A. de C.V., known as Grupo Continental, the parent company of a conglomerate of businesses in Honduras involved in banking, financial services, real estate, agriculture, construction, tourism, and media; Grupo Continental’s agricultural arm, Empacadora Continental S.A de C.V. (now known as Alimentos Continental); Inversiones Continental, S.A. (a.k.a. Grupo Financiero Continental); and the Honduran bank Banco Continental S.A.
According to the allegations in the Indictment,[1] which was previously unsealed in Manhattan federal court, the defendants conspired with others from 2004 through September 2015 to commit money laundering offenses in violation of Title 18, United States Code, Sections 1956 and 1957. Specifically, the Indictment charges the defendants with conspiring to conduct financial transactions occurring in whole or in part in the United States and involving the proceeds of (i) narcotics offenses and (ii) offenses against a foreign nation involving bribery of public officials and the misappropriation, theft, or embezzlement of public funds.
ROSENTHAL COELLO, 46, ROSENTHAL OLIVA, 79, ROSENTHAL HIDALGO, 50, and ACOSTA GARCIA, 40, all of Honduras, are each charged with one count of money laundering, which carries a maximum penalty of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentence will be determined by a judge.
Mr. Bharara praised the outstanding investigative work of the DEA’s Special Operations Division, New York Strike Force, and New York Task Force. Mr. Bharara also thanked the U.S. Department of Justice’s Office of International Affairs, OFAC, the U.S. Attorney’s Office for the Southern District of Florida, and the United States Department of the Treasury’s Financial Crimes Enforcement Network for their ongoing assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III, Adam Fee, Michael D. Lockard, and Matthew Laroche are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Medical Device Manufacturer Permanently EnjoinedRead the Press Release
WASHINGTON – Late yesterday, a federal judge in South Dakota issued a permanent injunction against Robert “Larry” Lytle of Rapid City, South Dakota and his medical device businesses, the Justice Department announced. Lytle marketed laser devices to treat a variety of medical conditions and diseases through several entities, including QLasers PMA and 2035 PMA, and is the owner and operator of 2035 Inc.
In October 2014, the Justice Department brought a civil action to enforce provisions of the federal Food, Drug and Cosmetic Act (FDCA). As the court found, Lytle and his businesses violated the FDCA by marketing and distributing the QLaser devices nationwide for the treatment of more than 200 different diseases and medical disorders without clearance or approval from the U.S. Food and Drug Administration (FDA).
“We brought this lawsuit because Mr. Lytle had been putting consumers at risk, while attempting to evade the FDCA – a law Congress enacted to protect public health and safety,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is especially noteworthy and gratifying that the Department was able to obtain some recompense for the innocent consumers whom Lytle victimized.”
According to the complaint and evidence adduced at a trial, Lytle has been distributing the QLaser devices with false and misleading labeling claims, touting their use for treating such serious conditions as cancer, HIV/AIDS and diabetes. Although two of the devices are cleared for providing temporary relief of pain associated with osteoarthritis of the hand, none of the devices have been cleared by the FDA or otherwise approved to treat any other medical conditions. Moreover, using the QLaser devices can be harmful in certain situations, and its use to treat other serious conditions, is unsupported by any published clinical studies.
The permanent injunction issued yesterday by U.S. District Court Chief Judge Jeffrey L. Viken follows a trial held in March 2015, in which the government established that the QLaser’s labeling was false and misleading and that, in fact, using the lasers according to their directions could be dangerous to health. Yesterday’s court order requires that Lytle and his businesses cease directly or indirectly manufacturing, packing, labeling and/or distributing any medical device unless and until they comply with certain terms of the injunction.
The court also ordered Lytle to refund the full amount consumers paid for their QLaser devices, whether the devices were purchased directly from Lytle’s businesses or through one of his several distributors. Depending on the specific package purchased, each consumer typically paid between $4,295 and $12,600, according to the evidence before the court. Lytle has admitted that he has sold at least 20,000 devices since 1998.
Lytle is required to pay the United States $10,000 per day for any violation of the permanent injunction, and is subject to other sanctions, including fines and imprisonment, for failing to comply.
“This ruling will help restore consumer confidence and send a strong message that a company cannot exercise blatant disregard of the law, especially when consumers’ health is at risk,” said U.S. Attorney Randolph J. Seiler of the District of South Dakota. “Justice has been served with this permanent injunction, and it will prohibit Mr. Lytle from continuing to thumb his nose at federal regulations that protect public health and safety.”
“Robert Lytle and his businesses ignored previous FDA warnings and continued to produce and distribute these devices in violation of federal law,” said Acting Director Jan Welch of the Office of Compliance in the FDA’s Center for Devices and Radiological Health. “The FDA will remain vigilant in protecting the health of the American public by ensuring that medical devices are shown to be safe and effective before being used by patients.”
The government’s case is being handled by Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Camela C. Theeler of the District of South Dakota. Sonia Nath, with the FDA’s Office of Chief Counsel, is assisting with this case.
Jury Convicts Former Fox 40 Web Producer for Conspiring to Hack into and Alter Los Angeles Times ServersRead the Press Release
SACRAMENTO, Calif. — A former web producer for KTXL FOX40, a Tribune Company-owned television station in Sacramento, was convicted today for his role in a conspiracy to hack into the servers of the Los Angeles Times and the Tribune Company, following an eight-day trial before U.S. District Judge Kimberly J. Mueller, United States Attorney Benjamin B. Wagner and FBI Special Agent in Charge Monica M. Miller announced.
Matthew Keys, 28, of Vacaville, was found guilty by a federal jury in Sacramento of one count of conspiracy to make unauthorized changes to the Tribune Company’s websites, and damage its computer systems; one count of transmitting malicious code; and one count of attempted transmission of malicious code.
“Although this case has drawn attention because of Matthew Keys’ employment in the news media, this was simply a case about a disgruntled employee who used his technical skills to taunt and torment his former employer,” said U.S. Attorney Wagner. “Although he did no lasting damage, Keys did interfere with the business of news organizations, and caused the Tribune Company to spend thousands of dollars protecting its servers. Those who use the Internet to carry out personal vendettas against former employers should know that there are consequences for such conduct.”
“This case demonstrates the FBI’s commitment to identify and investigate those who harass former employers by using insider knowledge to intentionally exploit computer systems—whether directly or by proxy—to damage the reputation and operations of a business,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento field office. “Individuals who use ‘bully’ tactics to attack computer networks will face justice for their actions.”
According to evidence presented at trial, in December 2010, Keys provided members of the hacker group Anonymous with login credentials for a computer server belonging to FOX40’s corporate parent, the Tribune Company. Keys identified himself on an Internet chat forum as a former Tribune Company employee and provided members of Anonymous with a login and password to the Tribune Company server. After providing login credentials, Keys encouraged the Anonymous members to disrupt several Tribune companies and urged that the Los Angeles Times should be “demolished.” According to the evidence at trial, at least one of the computer hackers used the credentials provided by Keys to log in to the Tribune Company server and make changes to the web version of a Los Angeles Times news feature. In addition, according to the trial evidence, Keys changed the access credentials of FOX40 employees, interfering with their ability to access company servers, and obtained email addresses for FOX40 viewers, to whom he sent disparaging emails about the company. Keys’ actions caused the defaced story to be on the mobile version of the L.A. Times for a day, and resulted in thousands of dollars in costs for the Tribune Company in responding to the breach of its systems by shutting backdoor access credentials and assessing the full extent of the damage.
The case is the product of an investigation by the Federal Bureau of Investigation. Deputy Chief James A. Silver of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorneys Matthew D. Segal and Paul A. Hemesath of the Eastern District of California are prosecuting the case.
Keys is scheduled to be sentenced on January 20, 2016 by Judge Mueller. The sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Jackson CEO Pleads Guilty to Embezzling Funds of Employees’ Health Care Benefit ProgramRead the Press Release
SACRAMENTO, Calif. — Cory Kasinger, 42, of Jackson, the Chief Operating Officer of Mariah Resources Inc., pleaded guilty today to one misdemeanor count of embezzling funds from a health care benefit program and agreed to pay $36,980 in restitution, United States Attorney Benjamin B. Wagner announced.
According to court documents, between March 1, 2010, and May 31, 2010, Kasinger withheld approximately $19,628 from the paychecks of Mariah Resources employees, which was to be applied towards the premiums of their health care benefit program. Instead of Kasinger paying the premiums, he returned these funds to the company’s general fund. As a result, the employees’ health care benefit program was terminated. The termination date was retroactive to March 1, 2010, which caused Mariah Resources employees to incur approximately $16,569 in out-of-pocket medical costs. Additionally, when the insurer sent $782 to Mariah Resources to reimburse former employees who were paying into the company’s COBRA program, Kasinger put the money into the general fund and did not pass it back to the former employees as he should have.
This case is the product of an investigation by the Department of Labor, Employee Benefits Security Administration. Special Assistant United States Attorney Elliot Wong is prosecuting the case.
Kasinger is scheduled to be sentenced on January 6, 2016 by United States Magistrate Judge Kendall J. Newman. Kasinger faces a maximum sentence of one year in prison, a fine of $100,000, and a one-year term of supervised release. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
International Money Launderer Pleads GuiltyRead the Press Release
PHILADELPHIA- Miguel Amaris-Caviedes, 37, of Costa Rica, pleaded guilty today to two counts of knowingly conducting financial transactions that involved purported drug proceeds. A sentencing hearing is scheduled for January 7, 2016.
Amaris-Caviedes was laundering purported drug proceeds through Costa Rican bank accounts. In 2013, Amaris-Caviedes met with individuals to discuss money laundering and drug trafficking methods from Costa Rica. Amaris-Caviedes agreed to launder what he believed to be drug proceeds through four Costa Rican bank accounts and then wire transfer the proceeds, minus his commission, to any country requested. In November 2013, Amaris-Caviedes laundered more than $100,000 of purported drug proceeds through his bank accounts in Costa Rica to a bank account in Puerto Rico. Amaris-Caviedes believed that this money would be used to purchase drugs from a source of supply in Puerto Rico. Amaris-Caviedes was arrested in Spain on November 16, 2014 by INTERPOL agents.
The case was investigated jointly by the Drug Enforcement Administration, the Internal Revenue Service Criminal Investigations, and Homeland Security Investigations. It is being prosecuted by Assistant United States Attorneys Karen S. Marston and Kevin R. Brenner.
Hyattsville Man Sentenced to Two Years in Prison for Fraudulent Tax Refund SchemeRead the Press Release
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Norman D. West, age 48, of Hyattsville, Maryland and Washington, D.C. today to two years in prison, followed by three years of supervised release, for conspiracy to commit theft of public money in connection with a fraudulent tax refund scheme. Judge Chasanow also entered an order requiring West to pay restitution of $408,221.30, the total amount of the tax loss.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Jeffrey S. DeWitt, Chief Financial Officer for the District of Columbia; Gilbert Garza, Chief of the D.C. Office of Tax and Revenue, Criminal Investigation Division; and John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General.
“Conspiring to defraud the government through filing false tax returns is unlawful.” said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “Bringing individuals to justice, such as Norman West, who intentionally engage in defrauding the IRS and taxpayers is a priority for IRS-CI.”
John L. Phillips, Assistant Inspector General for Investigations, Treasury Office of Inspector General, said, “The sentencing today demonstrates the continued efforts of the Treasury Office of Inspector General and our law enforcement partners to protect our nation and the hard working taxpayers money from offenders who commit fraud against the Treasury Department by fraudulently obtaining improper payments.”
According to West’s plea agreement, West is a musician and operated a putative tax preparation business known as “Flash Cash Financial,” or “Flash Cash,” which had a purported business address in Baltimore, Maryland.
From August 2011 through January 2013, West and his co-conspirators obtained the personal information of “recruits” which West used to file false tax returns in order to generate a fraudulent refund. West relied largely upon word of mouth to market his scheme. West paid a co-conspirator a $100 referral fee per recruit. West and his co-conspirators obtained the identities of at least 197 individuals. West used the personal information of those individuals and made up the rest of the tax returns in order to generate refunds. West listed false wages, falsely claimed educational tax credits, and falsely claimed earned income tax credit.
West filed 197 federal tax returns that claimed $391,553 in fraudulent tax refunds, all of which was issued by the IRS. In addition, West filed 28 fraudulent returns with the District of Columbia, which generated an additional $16,668.30 in fraudulent refunds. All of the refunds were deposited in bank accounts opened by West in the name of Flash Cash. West paid the recruits a small portion of the fraudulent refunds, usually about $500, and kept the rest for himself and his co-conspirators.
United States Attorney Rod J. Rosenstein commended the IRS-CI, the Washington, D.C. Office of the Chief Financial Officer and Office of Tax and Revenue, Criminal Investigation Division, and the Department of Treasury Office of Inspector General, for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kathleen O. Gavin, who prosecuted the case.
Husband and Wife Sentenced for Tax FraudRead the Press Release
ATLANTA - Kenneth Horner and Kimberly Horner have each been sentenced to one year, six months in federal prison following a jury’s guilty verdict in February 2015, on tax fraud charges stemming from the defendants skimming money from their towing business.
“Small business owners should take note of this case,” said U.S. Attorney John Horn. “Skimming cash from your business account and intentionally failing to report that money to the IRS, as a federal jury concluded these defendants did, is illegal. Community services and all other benefits of government depend upon citizens paying their fair share of taxes.”
“Businesses are required to honestly report and pay taxes due, and should expect the same of their competitors,” said Acting Assistant Attorney General Ciraolo. “Those business owners who evade these obligations not only steal from the U.S. Treasury, but gain an unfair competitive advantage, and the department is committed to holding them accountable.”
“IRS Criminal Investigation is sworn to protect the tax system and bring to justice those who steal from the Treasury,” stated Veronica F. Hyman-Pillot, Special Agent in Charge. “In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is paying their fair share. Today’s sentence demonstrates that our largest enforcement program is directed at the portion of American taxpayers, who willfully and intentionally violate their known legal duty of filing and paying their fair share of taxes.”
According to U.S. Attorney Horn, the charges and other information presented in court: Kenneth and Kimberly Horner owned Topcat Towing and Recovery, Inc. (“Topcat Towing”), a towing business in Lithonia, Georgia. Between 2005 and 2008, Topcat Towing had an exclusive contract with DeKalb County, Georgia, for all county car tows needed from the south precinct of the county.
Between 2005 and 2008, the defendants skimmed more than $1.5 million in cash receipts from their towing business and deposited those cash receipts into their personal bank account without disclosing the income to their tax return preparer or on corporate and personal tax returns filed with the IRS. The defendants tried to conceal their cash deposits from the government by “structuring” their deposits, which is the act of splitting up cash deposits so that none of them exceed $10,000, for the purpose of evading a Currency Transaction Report from being filed.
Most financial institutions, including banks, are generally required to file Currency Transaction Reports (CTRs) for cash transactions that exceed $10,000. CTRs are submitted to the U.S. Department of Treasury. In 2007 and 2008, the defendants used their unreported cash, in part, to build a custom home in Conyers that was appraised at more than $900,000.
Kenneth Horner, 59, and Kimberly Horner, 54, both of Milledgville, Georgia, have each been sentenced to one year, six months in federal prison, three years of supervised release, and ordered to pay restitution in the amount of $144,455 to the IRS. The Horners were found guilty by a jury on February 20, 2015.
This case was investigated by the Internal Revenue Service Criminal Investigation.
DOJ Criminal Tax Division Trial Attorney Christopher J. Maietta and Assistant U.S. Attorney Steven D. Grimberg prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Georgia Couple Sentenced to Prison for Tax FraudRead the Press Release
A Milledgeville, Georgia, couple was sentenced to prison today for skimming more than $1.5 million in cash from their business without disclosing the income on their tax returns, Acting Assisting Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney John A. Horn of the Northern District of Georgia announced.
Kenneth Horner, 59, and his wife, Kimberly Horner, 54, were each sentenced to serve 18 months in prison followed by three years of supervised release, and ordered to pay restitution in the amount of $ 144,455 to the Internal Revenue Service (IRS). The Horners were found guilty of filing false corporate tax returns and false individual income tax returns following a four-day trial in February 2015.
“Businesses are required to honestly report and pay taxes due, and should expect the same of their competitors,” said Acting Assistant Attorney General Ciraolo. “Those business owners who evade these obligations not only steal from the U.S. Treasury, but gain an unfair competitive advantage, and the department is committed to holding them accountable.”
“Small business owners should take note of this case,” said U.S. Attorney John Horn. “Skimming cash from your business account and intentionally failing to report that money to the IRS, as a federal jury concluded these defendants did, is illegal. Community services and all other benefits of government depend upon citizens paying their fair share of taxes.”
“IRS Criminal Investigation is sworn to protect the tax system and bring to justice those who steal from the Treasury,” said Special Agent in Charge Veronica F. Hyman-Pillot of IRS-Criminal Investigation (CI). “In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is paying their fair share. Today’s sentence demonstrates that our largest enforcement program is directed at the portion of American taxpayers, who willfully and intentionally violate their known legal duty of filing and paying their fair share of taxes.”
According to the indictment and other information presented in court, Kenneth and Kimberly Horner owned Topcat Towing and Recovery Inc. (Topcat Towing), a towing business in Lithonia, Georgia. Between 2005 and 2008, Topcat Towing had an exclusive contract with DeKalb County, Georgia, for all county car tows needed from the south precinct of the county. Between 2005 and 2008, the defendants skimmed more than $1.5 million in cash receipts from their towing business and deposited those cash receipts into their personal bank account without disclosing the income to their tax return preparer or on the corporate and personal tax returns filed with the IRS.
The defendants tried to conceal their cash deposits from the government by “structuring” their deposits, which is the act of splitting up cash deposits that exceed $10,000 for the purpose of avoiding the filing of a Currency Transaction Report (CTR) by the financial institution. Most financial institutions, including banks, are generally required to file CTRs for cash transactions that exceed $10,000, and the CTRs are submitted to the U.S. Department of Treasury.
In 2007 and 2008, the defendants used their unreported cash, in part, to build a custom home in Conyers, Georgia, that was appraised at more than $900,000.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of IRS-CI, who investigated the case, and Assistant U.S. Attorney Steven D. Grimberg of the Northern District of Georgia and Trial Attorney Christopher Maietta of the Tax Division, who prosecuted the case.
Former Youth Minister Sentenced to 264 Months in Federal Prison on Child Enticement ConvictionRead the Press Release
DALLAS — A former youth minister in Garland, Texas, Derek Hutter, 38, was sentenced this morning by U.S. District Judge Barbara M. G. Lynn to 264 months in federal prison, following his guilty plea in June 2015 to one count of enticement of a minor, announced U.S. Attorney John Parker of the Northern District of Texas.
Hutter has been in custody since his arrest in December 2014.
According to plea documents filed in the case, Hutter worked as a youth minister at the South Garland Baptist Church. He used the Internet, his cell phone and email, as well as person-to-person contact at youth group, to communicate with Jane Doe, a minor girl in his youth group. During these conversations, he convinced Jane Doe to have a sexual relationship with him. Hutter sexually assaulted Jane Doe on several occasions between January 1, 2014, through approximately September 15, 2014.
In addition, according to the filed factual resume, Hutter emailed Jane Doe and asked that she send him explicit and lewd photos of herself.
Hutter admitted that he knew Jane Doe was between 13 and 14-years old.
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 Sachse Police Department, the Garland Police Department and the FBI investigated. Assistant U.S. Attorney Camille Sparks prosecuted.
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Former Union County Official Sentenced to 70 Months in Prison for Defrauding Union County of More Than $120,000Read the Press Release
NEWARK, N.J. – The former Director of the Division of Facilities Management for Union County, New Jersey, was sentenced today to 70 months in prison for his role in defrauding the county of more than $120,000 in connection with the purchasing of supplies, U.S. Attorney Paul J. Fishman announced.
Aniello Palmieri, 59, of Toms River, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of honest services mail fraud. Judge Walls imposed the sentence today in Newark federal court.
According to documents in this case and statements made in court:
From January 2006 to September 2010, Palmieri was the Director of the Division of Facilities Management for Union County, overseeing the purchasing of building materials, tools, hardware, janitorial supplies and other supplies used by the various Bureaus of the Division of Facilities Management.
During the same time period, his codefendant, Frank Donald Vicendese, III, 50, of Berkeley Heights, New Jersey, owned and operated Viva Group LLC, a commercial maintenance and construction business that sold, among other products, hardware, tools and accessories to counties in New Jersey.
Vicendese generated fictitious invoices to Union County through Palmieri for many hardware items. Palmieri then provided county payment vouchers to Vicendese, who signed and returned the vouchers to Palmieri. Palmieri approved the vouchers for payment by falsely verifying that the products were received by Union County, when in fact, the products were not received. Vicendese then compensated Palmieri with cash, gift cards and valuable items, including a Bowflex physical fitness machine, Panasonic Hard Drive Camcorder, and a Canon PowerShot Digital Camera, in exchange for Palmieri’s official action and assistance in the scheme. Viva Group received between $120,000 and $200,000 in fraudulent proceeds from the fictitious invoices.
In addition to the prison term, Judge Walls sentenced Palmieri to three years of supervised release. Vicendese, who pleaded guilty in October 2013, is scheduled to be sentenced on Oct. 21, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and the N.J. State Police, under the direction of Col. Rick Fuentes, superintendent, with the investigation leading to today’s sentencing. He also thanked the N.J. Attorney General’s Office under the direction of Acting Attorney General John J. Hoffman, and Eli Honig, Director of the New Jersey Division of Criminal Justice, for their work in this investigation.
The government is represented by Assistant U.S. Attorney Mark McCarren of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel:
Palmieri: Anthony Iacullo Esq., Nutley, New Jersey
Vicendese: John P. McDonald Esq., Somerset, New Jersey
Former Ithaca Accountant and Florida Man Arrested for Investment Fraud ConspiracyRead the Press Release
SYRACUSE, NEW YORK – Bruce Kane, 60, a former resident of Ithaca, New York who currently resides in Fort Lauderdale, Florida, and Burton Greenberg, 75, of Plantation, Florida were arrested today in Florida on a Northern District of New York indictment charging them with conspiracy to commit wire fraud, announced United States Attorney Richard S. Hartunian and FBI Special Agent In Charge Andrew W. Vale.
As alleged in the Indictment, Bruce Kane is the Managing Partner, Treasurer and Secretary of an investment partnership, Global Financial Fund 8, LLP, that solicited and received over $10 million from investors located throughout the United States, including residents of the Northern District of New York. The indictment alleges that Burton Greenberg, President/CEO of M&P Global Financial Services, Incorporated, a Florida based corporation, entered into agreements in 2001 with Kane and others to invest the $10 million on behalf of investors. The indictment further alleges that rather than investing the money in a secure investment as promised, the defendants instead used the funds to pay off personal debts, cover rent on a waterfront condominium, purchase a boat and make separate investments of their own. According to the indictment, in an effort to avoid detection and allow them to continue to improperly use the investors $10 million, the Defendants sent investors phony "profit" payments in 2004 and 2005 which were in reality a partial return of their principal investment. Further, the indictment alleges that from 2004 to 2013 the Defendants repeatedly assured the investors via e-mail that their investments were secure and profitable when they knew that was not the case.
Burton Greenberg appeared today in federal court in Ft. Lauderdale, Florida where he pled not guilty. Bruce Kane is scheduled to appear in court tomorrow. The case will be prosecuted in the Northern District of New York. If convicted, they face a maximum term of imprisonment of twenty years, a maximum fine of $250,000 and a potential forfeiture money judgment of $10 million.
The case was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Geoffrey Brown.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.
Former Correctional Officer at FCI Fort Worth Faces up to 15 Years in Federal Prison After Pleading Guilty to Sexual Abuse with a WardRead the Press Release
FORT WORTH, Texas — A former correctional officer at the Federal Bureau of Prisons (BOP) Federal Correctional Institute (FCI) Fort Worth pleaded guilty this morning in federal court to one count of sexual abuse with a ward, announced U.S. Attorney John Parker of the Northern District of Texas.
Rudy Ramon, 54, of Grand Prairie, Texas, entered his plea before U.S. Magistrate Judge Jeffrey L. Cureton. He faces a maximum statutory penalty of 15 years in federal prison and a $250,000 fine. Ramon will remain on bond pending sentencing, which is set for February 18, 2016, before U.S. District Judge Terry R. Means.
According to documents filed in the case, on the first or second Sunday of November 2014, Ramon engaged in a sex act with an individual who was an inmate assigned to FCI Fort Worth. At the time of the sex act, the inmate was under the custodial, supervisory, or disciplinary authority of Ramon, a BOP Correctional Officer.
The Department of Justice Office of the Inspector General is conducting the investigation. Assistant U.S. Attorney Brian Poe is prosecuting.
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Former Billings Basketball Coach Sentenced to 10 Years in Prison for Coercion and Enticement and Distribution of Child PornRead the Press Release
BILLINGS – A 42-year-old Lockwood man was sentenced today to 120 months in federal prison followed by 15 years supervised release, for two counts of coercion and enticement of a minor, two counts of attempted coercion and enticement of a minor, and one count of distribution of child pornography. Scott James Nichols, a former Billings West High School basketball coach, pleaded guilty to all five counts in June of this year. U.S. District Court Judge Susan Watters handed down the sentence.
In an Offer of Proof filed by Montana Special Assistant U.S. Attorney Ole Olson, the government stated that if the case had proceeded to trial, the government was prepared to prove that Nichols engaged in multiple Facebook chats with at least four adolescent girls ranging in age from 13 to 15 years old. Nichols posed as a high-school aged student or an adolescent girl during these chats. Using an alias, he requested that the girls send sexually explicit pictures of themselves to his cell phone, or, in one case, expose their genitalia to him on a web cam. Two of the victims were identified and the government was prepared to present their testimony at trial. The Facebook accounts associated with Nichols’ aliases were accessed from IP addresses associated with the Billings Public Schools and Nichols’ home computer. The Government would additionally have proven that Nichols sent images of minors engaged in sexually explicit conduct from the same aliases he used to request images from underage girls. The Government was prepared to present at least 16 emails with attached images. Finally, the Government would have offered expert testimony that a forensic analysis of multiple electronic devices owned or used by Nichols, including his personal and work computers and his cell phone, were used to engage in the prohibited activity.
This case was initiated under the Department of Justice’s Project Safe Childhood initiative which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. It is implemented through partnerships including the Montana Internet Crimes Against Children (ICAC) Task Force. The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children. Investigative agencies involved in this case include the FBI, the Montana Division of Criminal Investigation, and the Bozeman and Billings Police Departments.
Special Assistant United States Attorney Ole Olson prosecuted this case. Because there is no parole in the federal system, Nichols will have to serve at least 85% of his sentence before he is released from prison.
Filipino National Admits Conspiring to Export Firearms Parts from the United StatesRead the Press Release
A Filipino national today admitted his role in a conspiracy to smuggle more than $200,000 worth of firearms parts out of the United States.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey, Special Agent in Charge George P. Belsky of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Newark Field Division and Acting Special Agent in Charge Kevin Kelly of the U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) Newark Field Office made the announcement.
Kirby Santos, 38, of the Republic of the Philippines, pleaded guilty before U.S. District Judge Noel L. Hillman of the District of New Jersey to an information charging him with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws.
According to the documents filed in this case, other cases and statements made in court:
Santos admitted that from 2008 through October 2013, he and co-conspirators he met in the Philippines or through an online forum agreed to ship firearms parts from the United States to the Philippines. Santos and others used credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos arranged for the suppliers to send the firearms parts to the addresses of conspirators in Toms River, New Jersey, and Lynwood, Washington, in order to make the purchases appear to be domestic sales.
At the direction of Santos, the co-conspirators, including Abelardo Delmundo, 53, of Toms River, would then repackage the firearms parts, falsely label the contents of the package and export the firearms parts to the Philippines for ultimate delivery to Santos. To disguise their role in the conspiracy, the conspirators used aliases when sending the packages containing prohibited items. Upon receiving the firearms parts, Santos paid Delmundo and other conspirators in the form of cash or wire transfers to others at their direction.
During the course of the nearly five-year long conspiracy, Santos and others purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.
Santos made his initial appearance in federal court on April 22, 2015, after being charged by criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. Santos was arrested in Guam on March 31, 2015, by special agents of ICE-HSI and ATF.
The conspiracy charge to which Santos pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 20, 2016.
Delmundo pleaded guilty to his role in the conspiracy on Apr. 30, 2015, and sentencing is scheduled for Dec. 10, 2015.
The case was investigated by ICE-HSI and ATF. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Smith of the District of New Jersey and Trial Attorney Nathan M. F. Charles of the National Security Division’s Counterintelligence and Export Control Section.
Santos Plea Agreement
Filipino National Admits Conspiring to Export Firearms Parts from the United StatesRead the Press Release
CAMDEN, N.J. – A Filipino national today admitted his role in a conspiracy to smuggle more than $200,000 worth of firearms parts out of the United States, U.S. Attorney Paul J. Fishman announced.
Kirby Santos, 38, of the Republic of the Philippines, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws.
According to the documents filed in this case, other cases and statements made in court:
Santos admitted that from 2008 through October 2013, he and conspirators he met in the Philippines or through an online forum agreed to ship firearms parts from the United States to the Philippines. Santos and others used credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos arranged for the suppliers to send the firearms parts to the addresses of conspirators in Toms River, New Jersey, and Lynwood, Washington, in order to make the purchases appear as domestic sales.
At the direction of Santos, the conspirators, including Abelardo Delmundo, 53, of Toms River, New Jersey, would then repackage the firearms parts, falsely label the contents of the package and export the firearms parts to the Philippines for ultimate delivery to Santos. To disguise their role in the conspiracy, the conspirators used aliases when sending the packages containing prohibited items. Upon receiving the firearms parts, Santos paid Delmundo and other conspirators in the form of cash or wire transfers to others at their direction.
During the course of the nearly five-year long conspiracy, Santos and others purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.
Santos made his initial appearance in federal court on April 22, 2015, after being charged by criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. Santos was arrested in Guam on March 31, 2015, by special agents of the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Delmundo pleaded guilty to his role in the conspiracy on Apr. 30, 2015 and is scheduled for sentencing on Dec. 10, 2015.
The conspiracy charge to which Santos pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 20, 2016.
The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.
U.S. Attorney Fishman credited special agents of DHS-HSI Cherry Hill, New Jersey, under the direction of Acting Special Agent in Charge Kevin Kelly, and ATF special agents, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden and Trial Attorney Nathan M. F. Charles of the National Security Division’s Counterintelligence and Export Control Section.
Defense counsel: Timothy Anderson Esq., Red Bank, New Jersey
Federal Grand Jury Indicts Watuga, TX, Man in Connection with an Alleged Alien Smuggling SchemeRead the Press Release
In San Antonio today, a federal grand jury indicted a Watuga, TX, man for his alleged role in an undocumented alien smuggling conspiracy announced United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Acting Special Agent in Charge Mark Dawson.
The federal indictment charges 33–year-old Drew Christopher Potter with one count of conspiracy to commit alien smuggling for financial gain and three substantive counts of transportation of undocumented aliens. According to the indictment, Potter conspired to transport undocumented aliens for private financial gain.
On September 18, 2015, Frio County Sheriff’s deputies along with U.S. Border Patrol agents from the Cotulla Border Patrol Station responded to a 911 call from someone who witnessed multiple subjects exiting a semi-tractor-trailer parked at a local convenience store along Interstate 35 South. At the scene, authorities encountered the alleged driver, Potter, and 39 undocumented aliens including 28 adult males, 7 adult females and four minors from Guatemala, El Salvador and Mexico.
Potter remains in federal custody. Upon conviction of each count, he faces up to ten years in federal prison and a maximum $250,000 fine.
“HSI is dedicated to working closely with its law enforcement partners in all arenas in pursuit of identifying, arresting and prosecuting individuals involved in human smuggling,” said Acting Special Agent in Charge Mark Dawson, HSI San Antonio.
This case was investigated by HSI, U.S. Border Patrol and the Frio County Sheriff’s Office. Assistant United States Attorney Matthew Lathrop is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.