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28 September 2015
The United States Files Civil Suit Against Long Island-Based Mortgage Lenders and “Counseling Fund”Read the Press Release
Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, David A. Montoya, Inspector General for the Department of Housing and Urban Development, and Frederick W. Gibson, Acting Inspector General for the Federal Deposit Insurance Corporation, announced the filing of a civil suit against the Rainy Day Foundation, Inc., a purported charitable “counseling fund,” together with its associated business entities and principals. The case was filed today in federal court in Central Islip and has been assigned to United States District Judge Joseph F. Bianco.
The complaint alleges that in at least 865 instances, the Rainy Day Foundation, together with five Eastern District of New York-based mortgage lenders and their principals, defrauded the United States and various banks insured by the Federal Deposit Insurance Corporation (“FDIC”), resulting in millions of dollars of mortgage losses, and requiring the United States to pay over $5,605,237 in false claims.
The defendant mortgage lenders participated in a federal program sponsored by the United States Department of Housing and Urban Development (“HUD”) that allowed the lenders to make mortgage loans that are insured by the Federal Housing Administration (“FHA”) in the event of default. The defendant mortgage lenders then sold those loans to federally-insured banks.
The complaint alleges that the mortgage lenders’ loans went into “early payment default” at more than twice the average default rate of other lenders, and that the lenders conspired with the Rainy Day Foundation to conceal their high default rates from HUD to avoid removal from HUD’s program. Specifically, the defendant mortgage lenders funneled their own money through the Rainy Day Foundation to make defaulting borrowers' monthly payments to the banks in order to conceal the defaults from HUD and the banks. When the loans had aged beyond the bank’s contractual right to force repurchase, or past the period that HUD monitored for early payment defaults, the lenders would stop making payments, leaving the borrowers without any further support.
When the Rainy Day Foundation attracted scrutiny from the United States, it quickly reorganized as a new business, Default Mitigation Services (“DMS”), to continue the Rainy Day Foundation’s money funneling activities under a new name. The United States alleges that defendants sought to further conceal their activities by claiming that the illicit payments were charitable “grants” made by a small American Indian tribe, located in Ely Nevada – the Ely Shoshone tribe. In reality, DMS was again funneling money from the defendant mortgage lenders, through Ely Shoshone tribal bank accounts, to the banks holding the loans.
The complaint seeks treble damages and penalties under the False Claims Act, 31 U.S.C. § 3729 et seq.; fines under the Financial Institutions Recovery, Reform and Enforcement Act ("FIRREA"), 12 U.S.C. § 1833a; and damages and indemnification under the common law theories of gross negligence, breach of fiduciary duty and unjust enrichment.
“Fraudulent practices, such as those alleged here, compromise the integrity of the FHA mortgage insurance program, and harm both the housing market and homeowners by contributing to loan defaults and housing foreclosures,” stated Acting United States Attorney Currie. “We will continue to vigorously use all means at our disposal to stop those who engage in such activity.”
HUD Inspector General Montoya stated, “When HUD's Office of the Inspector General uncovers fraud, we devote all of the available necessary investigatory resources to make certain that those individuals and entities are brought to justice and that the FHA Insurance Fund is reimbursed for the losses sustained. The Rainy Day Foundation and its multiple subsidiary companies solicited the business of FHA Direct Endorsement Lenders by promising to manipulate HUD databases to hide the existence of delinquent loans from the FHA. Such behavior will not be tolerated.”
FDIC Acting Inspector General Gibson said “The FDIC-OIG was pleased to support the Department of Justice and the Department of Housing and Urban Development in investigating this matter and in helping to ready this civil suit. Together we can broaden the government's efforts to pursue damages resulting from misconduct that has harmed the nation's financial institutions and its mortgage markets.”
United States Resolves Claims Against New York-Based Lender
In a related action, the United States filed a separate civil suit against, and simultaneous settlement with, the Intercontinental Capital Group, Inc. (“ICG”), a New York mortgage lender with offices in Bohemia, New York, its President, Dustin DiMisa, and its former Chief Executive Officer, Richard Steinberg. The complaint alleges that, on eleven occasions, ICG and its principals also transferred funds to the Rainy Day Foundation in order to make payments for borrowers on the lender’s behalf. The indirect payments artificially suppressed ICG’s comparative delinquency and default rates, as compiled and computed by the FHA. In the settlement, ICG, DiMisa and Steinberg admitted to making the payments and that the payments altered the company’s delinquency and default rates. ICG, DiMisa and Steinberg agreed to pay four hundred twenty-four thousand, eight hundred and fifty-nine dollars ($424,859) in settlement of the United States’ claims.
The United States’ cases are being litigated by Assistant United States Attorneys Edward Newman, John Vagelatos and Robert Schumacher.
The Defendants:
RAINY DAY HOLDINGS, LLC, an Idaho-incorporated limited liability corporation, with its principal place of business in Baltimore, Maryland.
THE RAINY DAY FOUNDATION, INC., a Maryland-incorporated 501(c)(3) corporation, domiciled in the District of Columbia.
DEFAULT MITIGATION SERVICES, LLC, an Idaho-incorporated limited liability corporation, with its principal place of business in Boise, Idaho.
RICK DEL SONTRO, the Chief Executive Officer of the Rainy Day Foundation.
TODD LUDLOW, a Senior Vice-President of the Rainy Day Foundation and founder and managing partner of Default Mitigation Services.
ROBERT CLUTE, a Senior Vice-President of the Rainy Day Foundation and Managing Partner of Rainy Day Holdings.
CHRIS HAUVER, Lender Relations Representative and Administrator for the Rainy Day Foundation.
KELLY SCHWEDLAND, marketer for Default Mitigation Services.
MICHAEL SHRUM, Delinquency Reduction Services Manager for the Rainy Day Foundation.
CHRISTOPHER NAILLON, Account Executive at the Rainy Day Foundation and an employee of Default Mitigation Services.
FRANKLIN FIRST FINANCIAL, LTD., a New York-incorporated limited company and mortgage lender, with its principal place of business in Melville, New York.
FREDERICK ASSINI, the Chief Executive Officer of Franklin First Financial.
ANTONIO BAINES, Senior Vice-President of Operations for Franklin First Financial.
ANDREW DAURO, a Manager at Franklin First Financial.
CHRIS BERTMAN, Chief Operating Officer at Franklin First Financial.
MAX KANE, Chief Financial Officer of Mortgage Source, a now defunct mortgage lender, with its principal place of business in Garden City, New York.
JOANN MEDEIROS, Chief Operating Officer of Mortgage Source.
CONTINENTAL MORTGAGE BANKERS, INC. d/b/a FINANCIAL EQUITIES, a New York corporation and mortgage lender, with its principal place of business in Westbury, New York.
WALTER STASHIN, President of Continental Mortgage Bankers.
GREGG MARCUS, Managing Director of Somerset Investors Corp, d/b/a Somerset Mortgage Bankers, a now defunct mortgage lender located in Melville, New York.
INTERCONTINENTAL CAPITAL GROUP, INC., a New York corporation and mortgage lender with offices in Bohemia, New York.
DUSTIN DIMISA, President and Managing Director of Intercontinental Capital Group.
RICHARD STEINBERG, former Chief Executive Officer of Intercontinental Capital Group.
The Executive Office for Immigration Review to Host Stakeholder Meeting on New Rule on the List of Pro Bono Legal Service ProvidersRead the Press Release
SUMMARY: The Executive Office for Immigration Review (EOIR) invites interested parties to participate in person or via webinar/teleconference in a meeting to discuss a recently announced final rule titled, “List of Pro Bono Legal Service Providers for Individuals in Immigration Proceedings.” More information on this rule is available at http://www.justice.gov/eoir/notice-eoir-publishes-rules.
DATE: Thursday, October 8, 2015, from 1:30 p.m. – 3:30 p.m. (Eastern Daylight Time)
LOCATION: 5107 Leesburg Pike, Suite 2500, Falls Church, VA.
RSVP: To RSVP for the meeting, please contact Nathan Berkeley, EOIR Outreach Director, at
[email protected] by noon on Tuesday, October 6, 2015. In person attendance will be limited to the first fifteen (15) individuals to RSVP.
In your email, please indicate whether you intend to participate in person or by webinar/teleconference and provide the name(s) of the attendee(s), your organization, and an email address.
EOIR will send Web access and call-in information on Wednesday, October 7, 2015, to those who RSVP and indicate they will participate remotely. For those who plan to attend in person, please see the attachments for instructions on accessing EOIR headquarters and for parking and public transportation options.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Texas Man Pleads Guilty to Federal Charge Stemming from Disturbance at U.S. Supreme CourtRead the Press Release
WASHINGTON – Rives M. Grogan, 50, of Mansfield, Texas, has pled guilty to a federal charge stemming from a disturbance that he caused on April 28, 2015, at the United States Supreme Court, Acting U.S. Attorney Vincent H. Cohen, Jr. announced today.
Grogan pled guilty on Sept. 25, 2015, in the U.S. District Court for the District of Columbia to a charge of picketing or parading in violation of 18 U.S.C. § 1507, which covers illegal demonstrations within federal court buildings. The Honorable Randolph D. Moss scheduled sentencing for Dec. 10, 2015. The charge carries a statutory maximum of 12 months in prison and potential financial penalties.
Grogan has a history of convictions for disorderly conduct and similar offenses, including cases involving other disturbances over the years at the U.S. Capitol and the Supreme Court and on Capitol grounds during the 2013 Presidential inauguration. The guilty plea in this case stems from his actions on the morning of April 28, 2015, as the Supreme Court was in session, with all nine Justices present and presiding.
According to a statement of offense submitted as part of the guilty plea, on the date of the disturbance, the Justices were considering whether a state’s constitutional and statutory bans on recognition of marriages of same-sex couples validly entered in other jurisdictions violate the Due Process and Equal Protection clauses of the U.S. Constitution and whether a state’s refusal to recognize a judgment of adoption of a child issued to a same-sex couple by the courts of a sister state violates the Full Faith and Credit Clause of the U.S. Constitution.
Due to the historical significance of the issues before the Supreme Court that day, the courtroom was full with civilians, members of the Supreme Court bar, and other professional attendees.
Grogan entered the courtroom at about 10:30 a.m., as arguments were under way. A short time later, he stood and began yelling statements in a very loud, forceful voice toward the front of the courtroom, where the Justices were seated at the court bench. Among other things, he stated that “the Bible teaches if you support gay marriage, you could burn in hell for eternity.” Police officers attempted to detain him, but Grogan refused to leave his bench. Then, as officers attempted to grab him and take him out of the courtroom, he continued to shout statements. This continued as he was escorted through the building and to a holding area. He could still be heard by attendees in the courtroom.
In announcing the plea, Acting U.S. Attorney Cohen expressed appreciation for the work of the Police Department of the U.S. Supreme Court, which investigated the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Criminal Investigator Derek Starliper; Paralegal Specialist Carolyn Carter-McKinley, and Legal Assistant Holly Crouse. Finally, he commended the work of Assistant U.S. Attorney Angela S. George, who is prosecuting the case.
Strickland Youth Center to Become Accessible for People with DisabilitiesRead the Press Release
United States Attorney Kenyen R. Brown announced that his office has reached a settlement agreement with the Mobile County Commission to retrofit the Strickland Youth Center (SYC) so that it can be used by individuals with disabilities. The agreement resolves charges by the United States Attorney’s Office that the County violates Title II of the Americans with Disabilities Act (ADA) by failing to make the SYC facilities, programs and services available to persons with disabilities. Title II provides that no qualified person with a disability may be excluded from participating in, or denied the benefits of, the programs, services and activities provided by state and local governments because of a disability.
The SYC campus, located at 2315 Costarides Street, Mobile, Alabama, is home to the Juvenile Court Division of the 13th Judicial Circuit, State of Alabama, and the Mobile County Juvenile Detention Facility. Constructed in 1972, the main building houses four court rooms, a ninety-five (95) bed youth detention center, juvenile probation services, a twelve (12) bed youth crisis center, health clinic, cafeteria, classrooms, and other court-sponsored programs held weekly for juveniles, their parents and guardians. Although the main facility at SYC was built prior to passage of the Americans with Disabilities Act (ADA) in 1991, SYC was required by the ADA to make structural changes no later than January 26, 1995. 28 CFR § 35.150(c)(d). This was never done.
Since that time, SYC has added a newly constructed court records office, two separate juvenile dormitories, connecting breezeways, attorney conference rooms and more courtrooms. None of these alterations addressed the original barriers to entry, nor were the altered portions of the buildings made readily accessible to the maximum extent feasible. See 28 C.F.R. § 35.151(b).
Acting on a complaint from a wheelchair user, in 2014 the United States conducted an ADA compliance survey of SYC. The County cooperated fully in the survey process, which revealed significant violations of the ADA. Twenty-four years after passage of the ADA, there is not a single bathroom in the entire facility that is accessible to persons using wheelchairs. The designated accessible entrance to the main building is located at the opposite end of the building from the main entrance, through a locked door which can only be opened by court security personnel summoned by telephone. Courtrooms, offices, dormitories, administration buildings and parking lots: all present structural barriers to use by persons with disabilities.
County officials and employees cooperated with the compliance review and site visits, and demonstrated their commitment to ensuring that SYC services and programs become accessible to all persons, regardless of disability. The parties now have decided to resolve this matter as set forth below without adjudication of factual and legal disputes, by entering into the attached Settlement Agreement.
In order to ensure that people with disabilities be able to use SYC facilities, services and programs to the fullest extent possible, the County has agreed to make the following changes:
- Main Exterior Entrance to the Courthouse – The County will provide an ADA compliant ramp to the main entrance of the courthouse, and will locate six (6) accessible parking spaces with adjoining access aisles and curb cuts at this entrance.
- Exterior Intake Entrance – An ADA compliant ramp with appropriate signage will be provided at this entrance, which is used during evening hours and weekends as a public entrance.
- Courthouse Interior – A unisex accessible bathroom will be added near the main lobby for use by persons with disabilities. Both the receptionist area and the clerk’s office will be moved and will be provided with accessible information and payment windows. ADA compliant signage and accessible drinking fountains will be provided, as well as access to courtrooms, offices and attorney conference rooms.
- Juvenile Detention Facility – Accessible bathing and toilet facilities will be located inside each of three juvenile detention areas (girls, boys, and youth crisis center). The existing toilet room in the intake area will be altered so as to become accessible.
- Administration Building – Two accessible restrooms, male and female, will be created by modifying existing restrooms, and accessible drinking fountains will be provided. Two (2) accessible parking spaces with adjoining access aisles will be located at the entrance to this building, together with an accessible approach from the parking area.
- Leadership Building – Two new accessible unisex toilet rooms will be constructed, along with appropriate signage and interior entrances as well as the front entrance doors will be altered to provide access for persons with disabilities.
- Access to Public Street - An ADA compliant sidewalk will be constructed from the right-of-way on Costarides Street to the Administration building and thence to the parking lot in front of the main facility. Crosswalks and curb cuts will be located so that persons with disabilities may cross the parking lot to the main entrance and the Leadership building.
“Ensuring that the Strickland Youth Center, its facilities, programs and services can be used by everyone fulfills a core tenet of the ADA: that the courts must be open to all people, including those with disabilities,” said United States Attorney for the Southern District of Alabama Kenyen R. Brown. “We commend the Mobile County Commission’s commitment to make significant changes to bring the SYC into compliance with the ADA.”
The claims settled by this agreement are allegations only, and there has been no determination of liability. The investigation and litigation were conducted by the United States Attorney’s Office for the Southern District of Alabama. The attorney handling the matter is Assistant United States Attorney Holly L. Wiseman.
The Settlement Agreement was reached under Title II of the ADA, which provides that no qualified person with a disability may be excluded from participating in, or denied the benefits of, the programs, services and activities provided by state and local governments because of a disability. Those interested in finding out more about the ADA may call the Justice Department’s toll-free information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
St. Louis Man Indicted for Illegal FirearmRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a St. Louis, Mo., man was indicted by a federal grand jury today for illegally possessing a firearm.
Charles Allen Roark, 36, of St. Louis, was charged with being a felon in possession of a firearm in an indictment returned by a federal grand jury in Jefferson City, Mo.
Today’s indictment alleges that Roark was in possession of a Smith and Wesson .40-caliber pistol on July 18, 2015.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Roark has prior federal felony convictions for being a felon in possession of a firearm and for distributing controlled substances, as well as two prior state felony convictions for possession of a controlled substance and prior state felony convictions for assault and unlawful use of a weapon.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Jefferson City, Mo., Police Department.
Solimar Federal Credit Union Employee Pleads Guilty to Embezzlement of Credit Union FundsRead the Press Release
SAN JUAN, P.R. – Today, defendant Tania Maldonado-Suárez pled guilty before United States Magistrate Judge Marcos E. López to a one-count Information that charged, from on or about October 26, 2005, continuing through on or about May 31, 2007, in the District of Puerto Rico, the defendant being an employee of Solimar Federal Credit Union, an institution whose deposits were insured by the National Credit Union Administration Board, with intent to defraud Solimar Federal Credit Union, willfully misapplied, embezzled, abstracted, and purloined the sum of approximately $474,894.69, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
Tania Maldonado-Suárez worked at Solimar Federal Credit Union and was responsible for posting transactions in the financial institutions’ records. During her employment with Solimar Federal Credit Union, Tania Maldonado-Suárez, with the intent to defraud, did willfully misapply, embezzle, and purloin funds that belonged to Solimar Federal Credit Union. Specifically, Maldonado-Suárez withdrew funds from Solimar Federal Credit Union accounts without authorization, failed to deposit checks into accounts, failed to post payments on accounts, and granted unauthorized loans on accounts in order to divert funds from these accounts to herself for her own pecuniary gain.
The case was investigated by the United States Secret Service with the collaboration of the Puerto Rico Police Department, and prosecuted by Assistant United States Attorney Luke Cass. The defendant faces a potential maximum sentence of up to 30 years of imprisonment.
Self Proclaimed “Gingerbread Man” Caught; Pleads Guilty to Escape from Federal Halfway HouseRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. U.S. Attorney William J. Hochul, Jr. announced today that Lamar Nelson, 27, of Rochester, NY, pleaded guilty to escape before U.S. District Court Judge David G. Larimer. The charge carries a maximum sentence of five years in prison, a fine of up to $250,000, or both.Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that the defendant was convicted in 2010 for possession with intent to distribute crack cocaine. As part of that sentence, the Bureau of Prisons assigned Nelson to the Volunteers of America Residential Reentry Center in Rochester in September of 2014. However, at that time, Nelson left the center without authorization and failed to return. In addition to his conviction for narcotics possession, the defendant was also a convicted sex offender.
The United States Marshal’s Service, along with members of the New York and New Jersey Regional Fugitive Task force began to search for the defendant in and around Rochester. During this time, Nelson exchanged phone calls and emails with the Deputy Marshal in charge of the investigation in which Nelson acknowledged that he was a fugitive, and at one point claimed that he was the “gingerbread man.”
Nelson was taken into custody without incident by the United States Marshal’s Service on April 30, 2015.
The plea is the culmination of an investigation by the United States Marshal’s Service, under the direction of Charles Salina.
Sentencing is scheduled for November 19, 2015, at 10:00 a.m. before Judge Larimer.
Sebago Man Pleads Guilty to Theft from Interstate ShipmentsRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Jeffrey P. Wheeler, Jr., 31, of Sebago, Maine, pleaded guilty today in U.S. District Court to theft from interstate shipments of goods.
Court records reveal that between December 2013 and February 2014, Wheeler was employed as a delivery truck driver for United Parcel Service (UPS). During this period, Wheeler stole several shipments of prescription narcotic medications that had been shipped via UPS from the Veterans Administration medical facility in Togus, Maine to outpatient veteran clients.
Wheeler faces up to three years in prison and a fine of up to $250,000. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
This case was investigated by the Criminal Investigations Division of the U.S. Department of Veterans Affairs, Office of Inspector General.
Rochester Man Charged with Possession of Stolen GunsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Joseph Lowry, 21, of Rochester, NY, was charged by criminal complaint in connection with his possession of a firearm stolen from a residence at 1070 Lake Avenue in Rochester. The charges carry a maximum penalty of 10 years, a fine of $250,000, or both.Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that according to complaint, on July 29, 2015, officers with the Rochester Police Department responded to 1070 Lake Avenue in Rochester for a report of a burglary occurring at the residence. The resident of the premises informed officers that intruders entered the house and stole a gun safe that contained three firearms including a 39mm rifle, a .40 caliber rifle and a 12 gauge shotgun.
Three days later, on August 1, 2015, officers responded to Lowry’s residence at 33 Phelps Avenue in Rochester on an unrelated call for service. While there, officers observed a New England Arms Pardner shotgun on the front porch of the residence, loaded with one round of ammunition. After tracing the firearm's serial number, investigators determined the gun was one of the three stolen from 1070 Lake Avenue on July 29, 2015.
Lowry will make an initial appearance on September 29, 2015, at 9:30 a.m. before U.S. Magistrate Judge Jonathan W. Feldman. This arrest is a result of our increased response to the recent spike in violence on the west side of Rochester, including the murder of three individuals at the Boys and Girls Club.
The criminal complaint is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, by the Federal Bureau of Investigation, and the Rochester Police Department, under the direction of Chief Michael Ciminelli.
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.
Remarks by U.S. Attorney Zachary T. Fardon at City Club of ChicagoRead the Press Release
The following are remarks by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, delivered at the City Club of Chicago on September 28, 2015:
In April of last year, I had the chance to come here for the first time. I was about 6 months into my job, and I had the option of talking about whatever I wanted. I chose to talk about violent crime in Chicago. Well, it’s been 17 months. I’m honored to be back. And I again have something I want to say about violent crime in Chicago.
Our murder rate so far this year is up about 20% from last year. And 20% is a troubling number. But let me give you two points of context that lend perspective: First, last year - 2014 - was our lowest homicide rate in Chicago since 1965. That’s 5 decades. So the watermark against which we’re measuring our 20% increase this year is a historically low one.
And second, we are not alone. Major cities across the country are seeing even more significant surges in homicide rates this year: in Milwaukee, they’ve seen a 76% increase; in St Louis, a 60% increase; in Baltimore, 56%; in Washington, DC, a 44% increase. So viewed in that light, our 20% increase in Chicago is not as alarming as many.
So I could leave it at that. I could make those contextual points in response to the inevitable audience question about violence, and I could choose to focus my opening remarks instead on ISIL, or public corruption, or cybercrime, or any of the other mission-critical areas we serve at the U.S. Attorney’s Office.
I’m not going to do that. Why not?
[Refer to PowerPoint]
Every face you see here is a child shot and killed this year in the city of Chicago. Let’s focus in on a few:
- In February, 13-year-old Anthony Diaz was observing an altercation between his 17-year-old sister and another girl in Belmont Cragin - a fight, by the way, arranged through social media. As Anthony was walking away from the fight, he was shot 4 times and died.
- In May, Raheem Dameron, a 15-year-old, was standing with a friend on a Bronzeville street when shots were fired from a passing car. Raheem’s friend was hit in the ankle and survived. Raheem was hit in the back and died on the scene.
- On a June afternoon, 15-year-old Martese Gentry came upon an altercation on Millard Avenue in Lawndale. A person in the fight opened fire and bullets struck Martese in the abdomen and chest, killing him.
- Amari Brown was 7 years old and spending the Fourth of July this year at his grandmother’s house in Humboldt Park, when somebody sprayed gunshots onto the porch of grandma’s house, injuring a woman and killing Amari.
- 17-year-old Kimythe Hubbard was one of 6 siblings in his Woodlawn family, 3 boys and 3 girls. On July 9, Kimythe was walking behind the Mount Pleasant Missionary Baptist Church when he was shot in the back and died.
Those are five. Every face you see here has a story; every one a child shot and killed this year in Chicago.
No place in Chicago is completely safe but there are neighborhoods on the West and South sides that are unfairly, disproportionately impacted by the gun violence. By police district, so far this year the most violent parts of Chicago include the 4th, 6th, 7th, and 11th districts. Those districts are home to some of Chicago’s beautiful neighborhoods and public places.
So what do these neighborhoods otherwise have in common?
[Refer to PowerPoint]
Gangs and gang factions. Gangster Disciple factions, Latin King factions. Dozens of gang factions across these neighborhoods. Gang factions that are constantly recruiting new members, and recruiting them young. In our most violence-afflicted neighborhoods, we now see kids affiliating with gang factions as early as the 1st or 2d grade.
And we are seeing not only more homicides in these neighborhoods but more shootings, and particularly more indiscriminate shootings – shootings over petty things – disrespect, trash talk, just walking across gang turf lines.
Let’s look at a random weekend this year.
[Refer to PowerPoint]
This July 4th weekend, over 50 people were shot in Chicago. This slide shows just a few examples of the shootings. A bullet in the armpit, a bullet in the finger, a bullet in the butt, a bullet in the foot. Random shots, drive-by shots, sprayed shots.
And more and more often, shots fueled by social media. Twitter, Instagram, Facebook. Petty disputes and trash talk that escalate over social media with sometimes fatal consequences.
Let me give you a quick case example.
[Refer to PowerPoint]
In February 2014 there was a gang-related shooting of a 19-year-old named Shaquon Thomas, also known as Young Pappy. Young Pappy was hit but not killed in the shooting. A 17-year-old boy named Markeyo Carr was caught by a stray bullet and killed. The next day Young Pappy tweeted “I’m Still Here.” A few months later, in July of 2014, there was another attempt to shoot and kill Young Pappy. This time a stray bullet struck a 28-year-old photographer named Wil Lewis who was waiting for a bus in Rogers Park. Wrong place, wrong time.
In April 2015, Young Pappy posted a video called “Homicide” on YouTube in which he taunted his rival gang members. Then in May he posted another video, this one called “Shooters”, in which he pretended to be holding a gun and taunted “you don’t even know how to shoot.” One week later he was gunned down and killed about a block from where he recorded that video in Uptown.
A 22-year-old named Clifton Frye posted comments about Young Pappy’s shooting on his Facebook. 3 days after Young Pappy was killed, Frye was shot and killed by a 17 year old boy.
That’s 4 dead – a 17-year-old, a 19-year-old, a 22-year-old, a 28-year-old, and at least one 17-year-old trigger puller. Why? No real reason; taunting, disrespect, loathing fueled by social media.
Here’s the point: our violent crime problem in Chicago has become more unwieldy; we’re seeing more and more indiscriminant shootings, social media spats leading to spraying bullets. And often with kids on either or both sides of the gun.
Whatever the statistics, this year versus last, and regardless that our surge this year reflects a national trend, here’s my bottom line: in Chicago, our violent crime problem is a social justice problem. For too long, gun crime has been tearing at the fabric of our social contract in this city. These are our kids. These are our neighborhoods. This problem hits the heart of who we are, and who we want to be, as a city. We cannot abide our Chicago being one where it’s okay for kids to die and entire neighborhoods to cocoon in fear.
Let me be honest if obvious: these issues are tough. Our violence problems are rooted in social injustices like poverty, and joblessness, and educational and economic inequality. Kids need parents, and mentors, and education, and work opportunities. And when instead what they see, in some parts of our city, starting in the first or second grade, is gangs and gang factions as a social network and ostensible path to self-identity and success, then we have lost the war before the battle has begun.
I’m not here to offer sound-bite solutions. I am here to speak honestly and to address some of the important moving parts I see from the perspective of the U.S. Attorney’s Office.
And I’m here to ask you to think about what you can do from your perspective, and to carry forward this discussion into your community, your work place, your church, your family.
We have to keep a long view. These are generational challenges. But to borrow a phrase from Dr. King we also have to feel the fierce urgency of now. I want us to wake up every day and recommit to ending this cycle of kids dying and neighborhoods set apart.
For the remainder of my remarks, I’m going to touch upon three things that are important from my perspective: first, prosecutions; second, juvenile justice; and third, the issue of community trust.
Prosecutions
At the United States Attorney’s Office our primary job is enforcement. We prosecute criminals. And federally, with our limited resources here, we have to be especially careful to focus on the worst of the worst – to pick the right individuals, and then to use the appropriate federal tools to help take those individuals off the street.
We are doing just that. Our prosecutors at the U.S. Attorney’s Office are right now bringing big cases against violent gangs and offenders. A few quick examples:
[Refer to PowerPoint]
- United States v. Levaughn Collins et al. James Triplett controlled the heroin market in a North Lawndale neighborhood west of Douglas Park. This year, we charged Triplett, his supplier Levaughn Collins, and a number of other defendants with a variety of federal crimes. This is a photograph showing the line of people waiting to purchase heroin as part of this market before we took it down. And this shows the weapons that we recovered when we executed that takedown.
- United States v. Nate Hoskins (“Operation Double Is”). “Double Is” stands for Imperial Insane Vice Lords. We recently charged 24 Double Is with RICO and other offenses related to drug trafficking and violence on Chicago’s West Side. Among other things, the indictment alleged the gang-related murder of a man named Marcus Hurley. This photo shows Hurley’s killer running from the crime scene after he shot Hurley at defendant Nate Hoskins’ direction. The shooter himself was also later shot and killed.
- United States v. Andrew Shelton et al.; United States v. Dimitri Woods et al.; United States v. Terrance Griggs. These are all gun cases. In the Shelton case we charged 11 defendants with the theft and distribution of 111 handguns. In the Woods case, 2 ATF informants were robbed at gunpoint while purchasing guns and a bulletproof vest from the defendants. And in Griggs, the defendant was convicted this year of selling 11 guns and a bulletproof vest to an informant. This photo shows an SKS automatic weapon and bulletproof vest seized as part of that case.
Those are a few examples. We’ve got many others, and our investigations pipeline is robust. On nearly all of the cases, we continue to work closely and collaboratively with our local and state partners, including especially the Chicago Police Department and the Cook County State’s Attorney’s Office. We are a likeminded group. Our collective noses are down on the enforcement front, and we don’t plan to let up.
Now, at the tail end of any prosecution is the question of sentencing - who gets locked up, and for how long. Over the past couple years, there has been a lot of focus on the issue of over-imprisonment in our country. And that’s for good reason; the issue is real.
Since 1980, our national prison population has exploded. The total detention population in this country has more than tripled, to where as of last year, the United States had 5 percent of the world’s total population, yet 25 percent of its prisoners.
Guess what? That costs money. Taxpayer money. Lots of it. Last year, over 26% of the Justice Department’s 20-plus-billion-dollar budget went toward housing prisoners. To give you a reference point, about 7.6% went toward funding all U.S. Attorney’s offices. We now spend way more money housing prisoners than hiring prosecutors to go after the bad guys in the first instance.
In light of that stark truth, about 2 years ago, the Justice Department launched an initiative called Smart on Crime under which the Department drew a circle around lower-level non-violent drug defendants and said as to those defendants, let’s stop the historic practice of seeking the highest mandatory prison terms, and instead let’s return sentencing discretion to the courts.
Smart on Crime is basically a policy decision–in light of fiscal realities–to return sentencing discretion to the bench for certain non-violent offenders.
Here is what Smart on Crime is not. Smart on Crime is not “Soft on Violent Crime.” It is not, in any way, an abandonment of the Justice Department’s commitment to fight violent crime. In fact, our U.S. Attorney’s office here remains as aggressive as ever in using our most powerful tools to take violent offenders off the street.
As I’ve said before, prosecutions alone will not fix our problem; we can’t arrest our way out of the realities reflected in those slides.
But I want to be clear about this: we have to be aggressive and prosecute the trigger pullers; we have do everything we can to take murderers off the streets, including asking our judges to impose significant prison terms for violent offenders—locally and federally. That is being Smart on Crime, and that’s a critical piece of long-term success.
Juvenile Justice
Our federal court system, at least for now, is an adult system. It’s not suited to address juvenile violence issues. And yet, you know that a significant part of our problem in Chicago is a youth violence problem. We have child shooters; we have child victims. And not surprisingly, in predicting adult violent behavior, a key inflection point is 14, 15, 16 years of age. Kids carrying guns or committing acts of violence at that age are much more likely to later repeat those acts of violence and to end up incarcerated as adults.
Last year, my Office launched a new initiative – our “Youth Outreach Forums”. In partnership with the Chicago Police Department, Chicago Public Schools, and the Cook County Juvenile Probation Department, we designed forums to talk to at-risk kids 13-17 years old. We began hosting the forums in Englewood, and Garfield Park, and Humboldt Park, and we’ve now moved inside the Cook County Juvenile Detention Center and are conducting forums there.
Our forums are structured to educate these kids about the dangers of gang affiliation and recidivism, including especially picking up a gun. The forums are also designed to encourage education and help introduce these kids to community services and organizations that give them alternatives to the gang route -- a pathway, a network that is good instead of bad.
We’ve made the forums evidence-based. The University of Chicago Crime Lab is tracking the kids who complete the forums against placebo groups to assess results. That will take time, but if we can move the needle on even some of these kids’ fates, we will have done something important.
Just a few weeks ago, I was at one of our Youth Forums in the Cook County Juvenile Detention Center. The kids I met that day may have done something wrong to land them in detention, but it could not have been more clear to me that these kids were not hardened criminals; they were kids; they were curious; they were hopeful, they were struggling and looking for help.
I’m proud that our office is leading the way forward and holding these forums. I don’t believe these forums are a panacea. What they are is a start, a catalyst, a way for us to shine our flashlight on a place that dearly needs attention for us to succeed, as a city, long term in the fight against violence.
So that’s another piece of our puzzle at the U.S. Attorney’s Office. We have the hammer of prosecution and prison for truly violent people. And we’re working to extend the rope, the lifeline for kids who’ve wandered down the wrong path and need our help before it’s too late.
Community Trust
Another critical piece of our puzzle, and the last broad topic I’ll hit on during my limited time today -- community trust. The issues that became front-and-center after Ferguson, and then Staten Island, and Ohio, and Baltimore, and on down that list – those issues are directly relevant to our fight against violent crime here in Chicago.
Distrust between communities and cops breeds violence. Distrust causes kids to make bad decisions, it causes cops to make bad decisions, and it makes it harder to solve violent crimes when they occur. So this issue of trust between cops and communities is huge.
Last December, shortly after the “no prosecution” announcement in Ferguson, my office hosted a Community Round Table, and we had there Attorney General Eric Holder, Mayor Emanuel, Anita Alvarez, Garry McCarthy, other law enforcement leaders, community and religious leaders, and a select group of kids from some of these most violence-afflicted neighborhoods in Chicago.
To be frank, I wasn’t sure what to expect going into the roundtable. This is another thing that is not exactly in the traditional wheelhouse of a U.S. Attorney’s Office. That said, I found it valuable. It brought together some passionate leaders from across different parts of the city, and we had a candid and thought-provoking discussion about policing and trust issues.
So we did it again in March of this year. We had another roundtable. And we’re doing another one in November. As long as there’s work to be done, my Office will keep making the time and sending the invitations.
The most remarkable aspect of these roundtable discussions, to me, has been the kids. We’ve had a great group of young men and women who came to us from the most violence-afflicted neighborhoods. And we also had CPD commanders from those same neighborhoods. And the back-and-forth during the roundtables between the kids and the commanders has been enlightening. Here’s the nub of what I’ve taken away from it:
From the kids’ perspective, what they want from the police is respect. They don’t want to feel judged by the color of their skin, or by whether they’re wearing sagging pants, or because they’re hanging on the block with gang members. What they want is to be judged on their own merits, and when officers don’t know them personally and lump them in with other kids in the neighborhood who dress the same way, or look or talk the same way they do, that breeds resentment and distrust.
From the officers’ perspective, they want to succeed. They want to make the neighborhood safer and be good at their jobs. But what also became clear through the dialogue is that they too want to feel judged on their own merits. They don’t want to feel embattled or vilified just because they wear the badge; they want to feel respected by the people they are risking their lives to protect.
And from both sides, the common ground for improvement? Connectivity. Knowing each other. Making an investment of time and good will outside the context of bad things happening. Whether it’s law enforcement hosting a neighborhood barbeque, or a park clean up, or participating in a local basketball tournament -- whatever the vehicle, whatever the context, finding ways for officers to get to know the kids, and kids to get to know the officers, so that when the officers come across the kids at a crime scene or in an investigation, that prior relationship, however deep, exists. When you have that, things won’t always go perfect but they tend to go a whole lot better.
I’m grateful that we are seeing more and more of that these days from our city and community leaders and the great women and men of our Chicago Police Department.
I want to ask you to think for a minute about what it means to serve as a Chicago Police Officer. Police officers by and large are the most noble of our public servants; they are citizens who’ve decided to take a job, with modest pay, where every day they wake up not knowing if they may get hurt or even killed. And why do they do that and wear that risk every day? I will tell you my view, based on many years of first-hand experience working with cops -- most do it because they care. They want the same things nearly all of us want: to be happy, to love, to have a family, to enjoy a safe community, and live an impactful life.
Police officers are not separate and apart from our communities; they are our communities, no different than you and me. And they fundamentally deserve a presumption of our respect and trust.
For our system of justice to work, people need to believe in that system. With no trust, there is no belief.
These trust issues, of course, are not unique to Chicago. There is a national discussion happening now, and an important watermark in that national discussion, in my opinion, occurred earlier this year when FBI Director Jim Comey gave a speech at Georgetown University. If you haven’t read it, I’d encourage you to jump on line and find it. Comey talked about the relationship between law enforcement and the diverse communities law enforcement serves. And in reflecting upon that relationship, he identified what he called his “own hard truths.”
I share Jim Comey’s hard truths. Here they are:
First, we in law enforcement have to be honest and acknowledge that much of our history is ugly when it comes to issues of race. At many points in history, law enforcement has enforced a status quo that was brutally unfair to disfavored groups. That is an ugly part of our national inheritance, and we need to accept that.
Second, we all – inside and outside of law enforcement - have to be honest about the widespread existence of unconscious bias. By understanding latent bias, and talking about it, even if we can’t completely eliminate those reactive instincts, we can help our behavior in response to them.
And third, there is a cynicism that can happen to people in law enforcement over time based on experience and observation. And that cynicism can lead to mental short-cuts that result in unfair treatment. And in addressing that problem, we have to be honest and recognize that it’s not as simple as just changing who we hire and how we train law enforcement. The truth is significantly harder than that.
We have to address the tragic reality that because of our nation’s past sins, young men of color, particularly in urban neighborhoods, too often inherit a legacy of crime and prison. So yes, we have to talk about cops, but we also have to talk about how we change that legacy and create a better world and better options for those young men.
Those are Jim Comey’s “hard truths”. And mine. And really, they belong to us all. Those hard truths go to the heart of everything that I have been talking about today.
Our violent crime issues in Chicago are hard. Our history with regard to race is hard. Poverty is hard. Inequality is hard. Childhood is hard. Policing is hard. Trust is hard.
One thing about hard things in life, it seems to me, is that usually they require balance, and measured circumspection, and patience and bravery to figure them out and to fix them. Hard things don’t come with easy or quick solutions.
[Refer to PowerPoint]
This is Tyjuan Poindexter, a 14-year-old. Eight days ago Tyjuan was walking with some friends to play basketball in his North Kenwood neighborhood on the South Side. As a car drove by, someone yelled “is that them?” and started shooting. One of Tyjuan’s friends he was going to play ball with, a 15-year-old boy, was hit in the ankle and the shin. He survived. Tyjuan was hit once, in the head. He died that night, in a driveway on the corner of 44th and South Greenwood.
The things I’ve talked about today -- prosecutions, youth outreach, community trust -- these are all important ingredients, from the perspective of my office, for helping to get us to a better place. But there’s a lot work to be done. Work in our courts. Work in our government. Work in our schools. Work in our churches. Work in our homes. Work on our streets.
Each of us has to stop waiting for someone else to solve this problem and realize that the problem belongs to us all.
Let me close with a point of pride. The events of Ferguson were about a year ago. And in the wake of those events, and then again following the many other national crises over the last year, we have seen dozens and dozens of protests and rallies across Chicago. Unlike many other places, our protests have been almost entirely peaceful, thoughtful and impactful. A number of civic and religious leaders in Chicago have played - and continue to play - an important part in that process. And at the same time, our law enforcement, and particularly the Chicago Police Department, have respected the protest process, and have repeatedly allowed our communities to be heard while ensuring the public safety.
That is called democracy. And I’ve come to believe that we’re pretty damn good at it here in Chicago. And that’s a reflection of the goodness of this place -- the strength and love citizens here hold for our city and each other.
That same strength and love is the key to our long-term success in fighting violent crime. We as a community have to muster and leverage our best: our best leadership, our best philanthropy, our best resources, our best creativity, our best good will, and our best intentions.
We have to recognize that this fight is a law enforcement fight. And it is an economic fight. And it is an educational fight. And it is fundamentally a fight to overcome tragic aspects of our national inheritance.
The stakes are high. The place we love hangs in the balance. I believe we can succeed, and we will succeed because of who we are in Chicago.
Every one of us has to see the long horizon, while every day waking up with the fierce urgency of now.
Remarks by U.S. Attorney Zachary T. Fardon
Ray M. Mubarak Sentenced to 57 Months in Prison for Defrauding Multiple BanksRead the Press Release
KNOXVILLE, Tenn.- On Sept. 28, 2015, Ray M. Mubarak, 56, of Knoxville, Tenn., was sentenced by the Honorable Pamela L. Reeves, U.S. District Judge, to serve 57 months in prison for conducting a scheme to defraud financial institutions and engaging in an unlawful monetary transaction with fraudulently-obtained loan proceeds. He was also ordered to pay $1,993,938.44 in restitution to three banks and a title insurance company that lost money as a result of the scheme.
Mubarak pleaded guilty in May 2015 to federal charges stemming from his scheme to defraud multiple banks into loaning him over $6 million. He submitted false tax returns and personal financial statements which grossly inflated his income and net worth in order to qualify for the loans. Mubarak also admitted to defrauding the banks by causing them to rely on a fraudulent title opinion letter and forged loan closing documents and deeds.
The trial for Mubarak’s co-defendants, Dianna Mubarak and Blythe Bond Sanders, III, is scheduled for March 1, 2016.
This investigation was conducted by the Internal Revenue Service - Criminal Investigation and Federal Bureau of Investigation. The investigation and prosecution of Mubarak was coordinated with the Office of the District Attorney General, 6th Judicial District. Matthew T. Morris, Assistant U.S. Attorney, represented the United States.
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Pittsburgh Man Pleads Guilty to Violating Federal Drug LawsRead the Press Release
PITTSBURGH -A Pittsburgh resident pleaded guilty in federal court to charges of conspiracy to possess with intent to distribute and distribute five kilograms grams or more of cocaine and 100 grams or more of heroin, United States Attorney David J. Hickton announced today.
Cecil Pinnix, 46, pleaded guilty to two counts before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. The government had wiretaps on two of Cecil Pinnix’s phones, and Pinnix was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier, and to possess with intent to distribute and distribute heroin, which he obtained in Ohio and transported to the Western District of Pennsylvania for further distribution.
Judge Hornak scheduled sentencing for Feb. 10, 2016. The law provides for a minimum sentence of 10 years in prison up to a maximum sentence of life imprisonment, a fine of not more than $10,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Cecil Pinnix.
Pennsylvania man sentenced for heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Timothy Lamon Cavender, Jr., 26, of Duquesne, Pennsylvania, was sentenced today to 46 months in prison for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Cavender was discovered in possession of heroin in December 2014 in Harrison County, West Virginia. He pled guilty in June 2015 to one count of “Possession with Intent to Distribute Heroin.”
Assistant U.S. Attorney Zelda Wesley and former Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.
Palmyra Man Pleads Guilty to Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. U.S. Attorney William J. Hochul, Jr. announced today that Noah R. Scribner, 23, of Palmyra, NY, pleaded guilty to possessing child pornography involving pre-pubescent minors before U.S. District Court Judge David G. Larimer. The charge carries a maximum sentence of 20 years in prison, a fine of up to $250,000, or both.Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that the New York State Police and Federal Bureau of Investigation conducted an online child pornography investigation in December 2013. During that case, they learned that child pornography had been uploaded to a Google cloud drive account. Investigators linked that activity to the defendant, and traced his physical location to a residence in Palmyra. A search warrant was executed and numerous digital items were seized.
During the investigation, Scribner told officers that he found the child pornography images and videos online by using certain search terms. The defendant also admitted that he would ask other online users to send him online "links" to other child pornography sites and images. Scribner acknowledged that in return, he would send those users other links with child pornography as well. The defendant estimated that he traded child pornography with others 100 times or more and said that the people he communicated with online (about child pornography) could be from anywhere in the world. At the time he downloaded the images, Scribner believed what he was downloading constituted child pornography.
A forensic review of the digital material seized from Scribner located images of children being sexually abused on several items, including a laptop and Apple iPod. Some of the images depicted prepubescent minors or minors under 12 years old, as well as images which portrayed depictions of violence.
The plea is the culmination of an investigation by the New York State Police, under the direction of Major Craig Hanesworth and the Federal Bureau of Investigations Child Exploitation Task Force consisting of the Monroe County Sheriff’s Office, the Rochester Police Department, the Greece Police Department and Homeland Security Investigations.
Sentencing is scheduled for December 8, 2015, at 11:30 a.m. before Judge Larimer.
Oxon Hill Felon Exiled to 7 Years in Prison for a Heroin Distribution Conspiracy and Being a Felon in Possession of a GunRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel, sentenced Steven Patrick Bruce, age 32, of Oxon Hill, Maryland, today to seven years in prison, followed by four years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin, being a felon in possession of a firearm and conspiracy to obstruct justice.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; and St. Mary’s County Sheriff Tim Cameron.
According to Bruce’s plea agreement, from July 2013 until approximately July 2014, Bruce conspired with others to distribute heroin to drug customers in and around Prince George’s and Saint Mary’s Counties, Maryland. Bruce obtained heroin from one or more suppliers, and used his residence on Lindsay Road in Oxon Hill, as a base of operations for storing and distributing narcotics.
In late July of 2014, the DEA conducted a controlled purchase of heroin from Bruce utilizing a confidential source. During a recorded meeting at Bruce’s residence, Bruce distributed a quantity of heroin to the confidential source for $100. Based on his involved in the conspiracy, Bruce admitted that he distributed between 100 grams and 400 grams of heroin.
On July 31, 2014, DEA and other law enforcement officers and agents executed a search warrant at Bruce’s residence. During the execution of that search warrant, law enforcement officers recovered the following items, among others: an Israeli Military Industry Uzi 9 millimeter submachine gun; 346 rounds of 9 millimeter ammunition; 32 rounds of .45 caliber ammunition; and three high-capacity magazines. Law enforcement also recovered drug paraphernalia and packaging, a bottle of Inositol powder (used by narcotics distributors as a cutting agent), and a small zip-lock bag containing heroin.
On July 31, 2014, Bruce was charged with being a felon in possession of a firearm, and possession of controlled substances with intent to distribute, and was subsequently detained by order of the court.
On August 2, 2014, while Bruce was incarcerated, he called a friend and asked a relative of that person to falsely tell Bruce’s attorney and law enforcement that the firearms, ammunition and narcotics found during the search warrant executed at Bruce’s residence belonged to the friend’s relative, not Bruce, in an attempt to obstruct the government’s investigation.
United States Attorney Rod J. Rosenstein commended the DEA and St. Mary’s County Sheriff’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Thomas M. Sullivan and Daniel C. Gardner, who prosecuted the case.
Owner of San Gabriel Valley Surrogacy Agency Sentenced to Federal Prison for Ripping Off Would-Be Parents who Paid for Egg DonationsRead the Press Release
LOS ANGELES – The owner of a Glendora egg donation and surrogacy company who admitted defrauding would-be parents, egg donors and surrogate mothers over the course of more than three years was sentenced this morning to 18 months in federal prison.
Allison Layton, a 38-year-old resident of Star, Idaho, was sentenced by United States District Court Judge George H. Wu, who ordered that the defendant serve three years of supervised released after completing the prison term.
Layton, who owned and operated Miracles Egg Donation and sometimes used the name Allison Jarvie, lived in Glendora during the course of the scheme.
Between August 2008 and January 2012, would-be parents – who in the surrogacy and egg donation world are known as intended parents – paid tens of thousands of dollars for egg donation and surrogacy services that Miracles promised to coordinate. Layton took money from the intended parents, but, instead of putting the funds into escrow accounts to be withdrawn only for certain costs related to the surrogacy or egg donation, Layton used the money for her own personal expenses (including a wedding that cost $60,000 and other costs that supported a lavish lifestyle) or to cover unpaid costs related to other clients. When confronted by victims, Layton lied about why payments had not been made and refunds not issued and strung victims along, leading them to believe they might soon be paid, when, in fact, many were not.
As a result of Layton’s misappropriation of client funds, egg donors, surrogates, attorneys and others often were not paid for all the services they provided and intended parents often did not receive all the services for which they had paid. At least one investor in Miracles also lost money.
When the donors, surrogates and intended parents sought to recover their money and costs, Layton would lull them into believing they would be repaid through false assurances that payments had already been made or would be made soon.
As a result of the fraud scheme, more than 40 victims lost more than $270,000. Judge Wu scheduled a restitution hearing for October 22.
Layton “took advantage of dozens of individuals at a time when they were particularly vulnerable: when they were working to conceive,” prosecutors wrote in a sentencing memo filed with the court. “In light of the significant harm she caused – in some cases, effectively preventing victims from ever having children – and the risk she still poses to the community, a significant custodial sentence is warranted.”
Three victims spoke at this morning’s hearing, including a couple who said that Layton’s fraud denied them the chance of ever having children.
The investigation into Layton was conducted by the Federal Bureau of Investigation.
Ohio man pleads guilty to Federal health care fraudRead the Press Release
HUNTINGTON, W.Va. – Joshua Petrie, 36, of Proctorville, Ohio, pleaded guilty today in federal court in Huntington to federal health care fraud, announced U.S. Attorney Booth Goodwin. Petrie admitted that he worked as a sales representative and fitter for several out of state companies that sold and distributed back and knee braces from a medical practice in West Virginia. Petrie created false documents showing that he provided braces to patients when, in fact, he had not. The false documents included a certification from a physician indicating that the physician had ordered the braces for individual Medicare patients, but Petrie used copies of a pre-signed physician’s order that was not specific to these patients. The false documents also included a delivery ticket with a signature line for patients to acknowledge receipt of the braces. Petrie forged patients’ signatures to the delivery tickets to make it appear that patients had received the braces when they had not. The false paperwork was used by others to bill Medicare for approximately $38,000.
Petrie faces up to 10 years imprisonment and a $250,000 fine when he is sentenced on January 11, 2016.
The investigation was conducted by Department of Health and Human Services Office of Inspector General and the West Virginia Medicaid Fraud Control Unit. Assistant United States Attorneys Eric Bacaj and Meredith George Thomas are handling the prosecution.
Newport News Men Guilty of Fraud and ID Theft in Card Cracking SchemeRead the Press Release
NEWPORT NEWS, Va. – Preston Frazier, 22, and Keandre Williams, 24, both of Newport News, pleaded guilty today to charges of conspiracy to commit bank fraud and aggravated identity theft.
In statements of facts filed with their respective plea agreements, Frazier and Williams admitted to conspiring to obtain United States currency from several financial institutions by depositing worthless financial instruments into accounts belonging to other individuals and then conducting debit card transactions at ATM and retail locations throughout Hampton Roads. Frazier and Williams each admitted to recruiting account holders of several financial institutions via social media to provide access to their debit cards and personal identification numbers for a period of time in exchange for monetary payment. Frazier, Williams, and other co-conspirators were recorded by video surveillance equipment at ATM and retail locations while engaging in what they termed the “card cracking” scheme.
Frazier, Williams, and two others were indicted by a federal grand jury on June 10, 2015. Frazier and Williams each faces a mandatory minimum penalty of two years in prison to run consecutive to a maximum possible penalty of 30 years in prison. Both will be sentenced on Jan. 11, 2015. Charges remain pending against the remaining two co-conspirators. The minimum and maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Doug Mease, Special Agent in Charge of the U.S. Secret Service’s Richmond Field Office; David G. Bowers, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; and Richard W. Myers, Chief of Newport News Police, made the announcement after the pleas were accepted by U.S. District Judge Mark S. Davis. Assistant U.S. Attorneys Kaitlin C. Gratton and Brian J. Samuels are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15cr43.
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Newark One of Five Cities Added to Justice Department’s Violence Reduction NetworkRead the Press Release
NEWARK, N.J. – Newark was chosen one of five cities that will join the Department of Justice’s Violence Reduction Network (VRN), a comprehensive approach to reducing violent crime in communities around the country, U.S. Attorney Paul J. Fishman announced.
Newark was added to the program along with Little Rock, Arkansas; West Memphis, Arkansas; Compton, California; and Flint, Michigan. They join the inaugural sites of Detroit; Chicago; Camden, New Jersey; Wilmington, Delaware; and Oakland and Richmond, California.
“The selection of Newark as a VRN city will enable us to build on the success we’ve already achieved in Camden over the past year,” U.S. Attorney Fishman said, “and I'm pleased that my colleagues in Washington appreciate the strength of our federal, state, county, and local partnerships. This program ensures that federal resources are carefully targeted to the areas where they will provide the greatest benefit, allowing us to work with our local partners in ensuring we continue to create safe, thriving communities for all our citizens.”
Today’s announcement was made by Deputy Attorney General Sally Q. Yates and Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP) before an audience of U.S. Attorneys, police chiefs, sheriffs, mayors, local leaders from the 10 sites and Department of Justice representatives at the second annual VRN Summit in Detroit, Michigan.
Through the VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the United States Marshals Service (USMS), the Drug Enforcement Administration (DEA), the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office and the Office on Violence Against Women.
Deputy Attorney General Yates cited the progress reported by the current VRN sites in their first year. In Camden, for example, the FBI assisted the local police display wanted felons’ information on digital billboards, resulting in the arrest of two felons The ATF helped the Camden County Police Department acquire National Integrated Ballistic Information Network (NIBIN) equipment and training. NIBIN has allowed the county to initiate eTrace, an Internet-based firearms tracing and analysis tracking process to enhance criminal investigations.
In addition to announcing the five new VRN sites, Deputy Attorney General Yates announced Smart Policing grant awards totaling more than $2 million to law enforcement agencies to develop innovative, data-driven approaches to crime.
For more VRN information visit: www.bja.gov/Programs/VRN.html
New Hampshire Woman Pleads Guilty to Social Security, Food Stamp, and Medicaid FraudRead the Press Release
CONCORD, N.H. – Beverly Eaton, 57, of Seabrook, pleaded guilty today in United States District Court for the District of New Hampshire to one count of Social Security Fraud and four counts of Making False Statements, announced Acting United States Attorney Donald Feith.
In February 2009, Eaton began receiving Social Security disability benefits. She also received Food Stamps and Medicaid since July 2008 and December 2008, respectively. Eligibility for each of these benefits programs is based, in part, on the applicant having limited income and resources. At the time she applied for benefits, Eaton failed to disclose that she owned two pieces of real estate, each with an assessed value of over $20,000.00, far in excess of the resource limits set by each of these needs-based programs. Her ownership of these properties would have rendered her ineligible to receive any Supplemental Security Income benefits, Food Stamps, and Medicaid. Eaton concealed her ownership of these properties from the Social Security Administration and from the New Hampshire Department of Health and Human Services and, in fact, falsely reported that she did not own any real estate. As a result of her concealment, Eaton received $66,755.66 in disability benefits, Food Stamps, and Medicaid benefits that she would not have received if Social Security and the New Hampshire Department of Health and Human Services had been aware of her real estate holdings.
Eaton is scheduled to be sentenced on January 12, 2016. She is facing a maximum sentence of five years imprisonment. She was released on conditions pending sentencing.
The case was investigated by the Social Security Administration’s Office of the Inspector General in conjunction with the New Hampshire Department of Health and Human Services’ Office of Improvement and Integrity, and prosecuted by Special Assistant United States Attorney Karen Burzycki.
Nevada Domestic Violence Organization Receives $800,000 Grant from U.S. Department of JusticeRead the Press Release
LAS VEGAS, Nev. - The U.S. Justice Department today awarded a Nevada non-profit organization, the Nevada Network Against Domestic Violence, an $800,000 grant to improve arrest outcomes in domestic violence cases in Clark County and other areas of Nevada, announced U.S. Attorney Daniel G. Bogden for the District of Nevada. The announcement was made by Deputy Attorney General Sally Quillian Yates at the Justice Department’s Second Annual Violence Reduction Network Summit in Detroit, Mich.
“It is critical that we enhance the partnerships between criminal justice agencies, victim services providers, and community organizations in order to effectively investigate and prosecute domestic violence crimes,” said U.S. Attorney Bogden. “I am pleased to see that Nevada was one of the states to receive this very important grant award.”
In addition to the Nevada Network Against Domestic Violence, 43 other organizations across the country received awards totaling over $26 million from the Department of Justice’s Office on Violence Against Women.
The Nevada Network Against Domestic Violence, located in Reno, Nev., will collaborate with the State of Nevada Attorney General’s Office and other non-governmental victim organizations to implement the grant over a three-year period. The award will be used to support five victim advocates, and to identify legislative and policy barriers and develop best practice recommendations on the arrest and prosecution of domestic violence cases.
Created in 1995, the Office on Violence Against Women (OVW) provides federal leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. To learn more, visit www.justice.gov/ovw.
Morgantown man sentenced for unlawful possession of a firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – Michael Sheriff Scott, 35, of Morgantown, West Virginia, was sentenced today to 77 months in prison for unlawful possession of a firearm, United States Attorney William J. Ihlenfeld, II, announced.
As a result of two previous felony convictions in Maryland for concealing a dangerous weapon and drug trafficking, Scott is prohibited from possessing firearms. He was discovered in unlawful possession of a firearm in November 2014 in Monongalia County, West Virginia. He pled guilty in May 2015 to one count of “Felon in Possession of Firearm.”
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge Irene M. Keeley presided.
Modesto Man Pleads Guilty in Two Mortgage Fraud SchemesRead the Press Release
FRESNO, Calif. -- Tony Huy Havens, 42, of Modesto, pleaded guilty today to mail fraud and wire fraud in two mortgage fraud schemes, United States Attorney Benjamin B. Wagner announced.
According to court documents, in the first scheme Havens devised an “advance fee” scheme that targeted victims in at least eight states who were seeking multimillion dollar loans for large construction projects that were in danger of foreclosure. Havens provided the victims with fraudulent documents that showed a third-party lender was prepared to make a loan to the victim. On Havens' instructions, the victims wired money into a bank account controlled by Havens to pay in advance certain costs associated with the loans. No loans were ever made. In total, Havens represented that he could arrange at least $1.1 billion in financing for at least 15 victim borrowers and collected at least $248,750 by wire transfers from them.
According to court documents, in the second scheme Havens arranged to purchase a single-family residence in Modesto using two relatives as straw buyers. He obtained a loan in the name of the straw buyers that exceeded the actual selling price of the property and arranged to have a portion of the purchase price sent back to him, which he used as the down payment for the purchase.
These cases are the product of investigations by the Federal Bureau of Investigation, the Stanislaus County District Attorney's Office, and the Federal Housing Finance Agency, Office of Inspector General. Assistant United States Attorneys Mark J. McKeon and Mia Giacomazzi are prosecuting the cases.
Havens is scheduled to be sentenced by United States District Judge Lawrence J. O'Neill on January 11, 2016. Havens faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Man Hired to Drive 15 Pounds of Heroin to Kansas City Sentenced to 46 Months in Federal PrisonRead the Press Release
KANSAS CITY, KAN. - A California man who was arrested in Kansas with 15 pounds of heroin was sentenced Monday to 46 months in federal prison, U.S. Attorney Barry Grissom said.
Juan Carlos Ahumada, 21, San Fernando, Calif., pleaded guilty to one count of possession with intent to distribute heroin. In his plea, he admitted he was hired to drive a load of heroin from California to Kansas City. On June 25, 2014, a Kansas Highway Patrol trooper stopped Ahumada on eastbound Interstate 70 in Wabaunsee County, Kan. Investigators discovered a hidden compartment in the cowl of the vehicle where approximately 15 pounds of heroin was concealed.
Grissom commended the Kansas Highway Patrol, the Drug Enforcement Administration and Assistant U.S. Attorney Duston Slinkard for their work on the case.
MGH to Pay $2.3 Million to Resolve Drug Diversion AllegationsRead the Press Release
BOSTON – In the largest settlement of its kind involving allegations of drug diversion at a hospital, Massachusetts General Hospital (MGH) has agreed to pay the United States $2.3 million to resolve allegations that lax controls enabled MGH employees to divert controlled substances for personal use. In conjunction with this record monetary settlement, MGH has agreed to implement a comprehensive corrective action plan to prevent, identify, and address future diversions.
“Under the law, hospitals like MGH have a special responsibility to ensure that controlled substances are used for patient care and are not diverted for non-medical uses,” said U.S. Attorney Carmen M. Ortiz. “Diversion of these drugs feeds addiction, contributes to potential illegal drug sales, and fuels the opioid epidemic that has had a devastating effect on the Commonwealth. We commend MGH for disclosing and addressing its diversion problems and for taking steps to ameliorate future diversion by hospital personnel.”
“The DEA is committed to investigating hospitals that are not in compliance with the Controlled Substances Act (CSA),” said Special Agent in Charge Michael J. Ferguson. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety. The diversion of prescription pain killers, in this case oxycodone, contributes to the widespread abuse of opiates, is the gateway to heroin addiction, and is devastating our communities. DEA pledges to work with our law enforcement and regulatory partners throughout the Commonwealth and nationwide to ensure that these rules and regulations are followed.”
In 2013, an investigation was launched after MGH disclosed to the Drug Enforcement Administration (DEA) that two of its nurses had stolen large volumes of controlled substances (prescription medications) from the hospital. Altogether, the two nurses stole nearly 16,000 pills, mostly oxycodone, an addictive painkiller. Both nurses stole from automated dispensing machines that MGH used to store and dispense prescription medications. DEA’s ensuing audit of MGH’s controlled substances revealed pill count discrepancies totaling over 20,000, missing or incomplete medication inventories, and hundreds of missing drug records, all in violation of the hospital’s responsibilities under the Controlled Substances Act (CSA).
MGH cooperated with the DEA’s investigation and subsequently disclosed additional violations of the CSA. Specifically, MGH disclosed that a pediatric nurse with a 12-year substance abuse problem had injected himself with Dilaudid at work; a physician had prescribed controlled substances for patients without seeing them and without maintaining medical records; several nurses were able to divert prescription drugs for many years without being detected; and medical staff had failed to properly secure controlled substances, even, on occasion, bringing them to lunch.
Since the investigation began, MGH has worked cooperatively with the DEA and the U.S. Attorney’s Office to develop a detailed corrective action plan to address the identified deficiencies in MGH’s handling of controlled substances. Components of the plan include the establishment of an internal drug diversion team; the creation of a full-time drug diversion compliance officer position; mandatory training of all staff with access to controlled substances, including on how to identify the signs and symptoms of substance abuse; enhanced diversion monitoring by supervisors and management; annual external audits to ensure compliance with the CSA; and increased physical controls of controlled substances, including limiting and monitoring access to automated dispensing machines through fingerprint identification.
U.S. Attorney Ortiz and DEA SAC Ferguson made the announcement today. The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Christine Wichers of Ortiz’s Civil Division.
A copy of the settlement agreement, which includes a detailed addendum with the United States’ statement of relevant conduct and MGH’s corrective action plan, is attached below.
Long Beach Man Sentenced to 6 Years & 4 Months in Prison for Trafficking Oxycodone and HydrocodoneRead the Press Release
FRESNO, Calif. —Sarith Chim, 34, of Long Beach, was sentenced today to six years and four months in prison by U.S. District Judge Anthony W. Ishii for conspiring to distribute oxycodone and hydrocodone pills, United States Attorney Benjamin B. Wagner announced.
According to court documents, in April 11, 2013, Chim and his co-defendants were indicted for a scheme where the defendants obtained prescriptions for oxycodone and hydrocodone from a doctor in Visalia, filled those prescriptions at pharmacies in Modesto, and then transported and mailed the pills to others involved in the conspiracy in Washington state for distribution on the black market. After illegally selling the pills, the defendants deposited the cash proceeds of the sales into bank accounts held by Chim and co‑defendants in California from which the funds were then withdrawn by Chim. Deposits and withdrawals were made in amounts of $10,000 or less to prevent Currency Transactions Reports from being filed by the banks on their cash deposits. Banks are required to file these reports on transactions greater than $10,000, and the reports are filed with the Department of the Treasury and are made available to law enforcement.
Co-defendants in this case were sentenced as follows:
David Ruem, 10 years in prison;
Phary Chim, four years and three months in prison;
Sdey Chim, four years in prison;
Chanrath Yath, three years and four months in prison;
Chanrou Yath, three years in prison;
Phally Thach, 2.5 years in prison;
Raeb Chou, two years in prison;
Loc Huu Chau, one year in prison;
Cindy Doeum, three years of probation; and
Chantha Chim, three years of probation.
In addition, the doctor responsible for writing the prescriptions to the defendants in this case, Terrell Brown, 63, was sentenced to by United States District Judge Lawrence J. O’Neill to four years and nine months in prison for illegally distributing oxycodone and structuring financial transactions. He is currently in federal custody.
One remaining defendant, Say Eng, the mother of Sarith Chim, is scheduled for trial on March 29, 2016. The charges against her are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.
This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.
Leader of Sex Trafficking Ring Sentenced to over Nine Years in Prison for Interstate Prostitution EnterpriseRead the Press Release
The leader of a sex trafficking ring was sentenced today to 115 months in prison for operating an interstate prostitution enterprise.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney J. Walter Green of the Middle District of Louisiana and Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Division made the announcement.
Jeremie J. Tate, 34, of Zachary, Louisiana, pleaded guilty on April 8, 2015, to conspiracy to unlawfully use interstate facilities in aid of racketeering, two counts of use of interstate facilities in aid of racketeering and enticing another to travel interstate for prostitution. Tate was sentenced by U.S. District Judge Shelly D. Dick of the Middle District of Louisiana.
In connection with his plea, Tate admitted that, from November 2012 through November 2013, he operated a prostitution business based in Baton Rouge involving at least one minor. Tate admitted that he personally recruited prostitutes and advertised for and scheduled prostitution sessions. Tate further admitted that he used proceeds from the enterprise to purchase controlled substances, which he distributed to the prostitutes and others to manipulate and intimidate them.
To date, three others already have pleaded guilty and have been sentenced for their roles in this sex trafficking ring.
The case is being investigated by the was investigated by the FBI’s Baton Rouge Crimes Against Children Task Force, Louisiana Attorney General’s Office, Louisiana State Police and East Baton Rouge, Louisiana, Sheriff’s Office, with assistance from the Baton Rouge, Louisiana, Police Department’s Narcotics Division, U.S. Marshals Service Fugitive Task Force and other law enforcement agencies.
The case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jamie A. Flowers Jr. of the Middle District of Louisiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Leader of Sex Trafficking Ring Sentenced to 115 Months in Prison for Interstate Prostitution EnterpriseRead the Press Release
BATON ROUGE – The leader of a sex trafficking ring was sentenced today to serve one hundred fifteen (115) months in prison for operating an interstate prostitution enterprise.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney J. Walter Green of the Middle District of Louisiana and Special Agent-in-Charge Michael J. Anderson of the FBI’s New Orleans Division made the announcement.
Jeremie J. Tate, 34, of Zachary, Louisiana, pleaded guilty on April 8, 2015, to conspiracy to unlawfully use interstate facilities in aid of racketeering, two counts of use of interstate facilities in aid of racketeering, and enticing another to travel interstate for prostitution. Tate was sentenced this afternoon by U.S. District Judge Shelly D. Dick of the Middle District of Louisiana.
In connection with his plea, Tate admitted that, from November 2012 through November 2013, he operated a prostitution business based in Baton Rouge involving at least one minor. Tate admitted that he personally recruited prostitutes and advertised for and scheduled prostitution sessions. Tate further admitted that he used proceeds from the enterprise to purchase controlled substances, which he distributed to the prostitutes and others to manipulate and intimidate them.
Three others already have pleaded guilty and have been sentenced for their roles in this sex trafficking ring.
The case is being investigated by the FBI’s Baton Rouge Crimes Against Children Task Force, the Louisiana Attorney General’s Office, the Louisiana State Police, and the East Baton Rouge, Louisiana, Sheriff’s Office, with assistance from the Baton Rouge Police Department’s Narcotics Division, the U.S. Marshals Service Fugitive Task Force, and other law enforcement agencies.
The case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jamie A. Flowers Jr. of the Middle District of Louisiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.projectsafechildhood.gov/.
Launch of Strong Cities Network to Strengthen Community Resilience Against Violent ExtremismRead the Press Release
Cities are vital partners in international efforts to build social cohesion and resilience to violent extremism. Local communities and authorities are the most credible and persuasive voices to challenge violent extremism in all of its forms and manifestations in their local contexts. While many cities and local authorities are developing innovative responses to address this challenge, no systematic efforts are in place to share experiences, pool resources and build a community of cities to inspire local action on a global scale.
“The Strong Cities Network will serve as a vital tool to strengthen capacity-building and improve collaboration,” said Attorney General Loretta E. Lynch. “As we continue to counter a range of domestic and global terror threats, this innovative platform will enable cities to learn from one another, to develop best practices and to build social cohesion and community resilience here at home and around the world.”
The Strong Cities Network (SCN) – which launches September 29th at the United Nations – will empower municipal bodies to fill this gap while working with civil society and safeguarding the rights of local citizens and communities.
The SCN will strengthen strategic planning and practices to address violent extremism in all its forms by fostering collaboration among cities, municipalities and other sub-national authorities.
“To counter violent extremism we need determined action at all levels of governance,” said Governing Mayor Stian Berger Røsland of Oslo while commenting on their participation in the SCN. “To succeed, we must coordinate our efforts and cooperate across borders. The Strong Cities Network will enable cities across the globe pool our resources, knowledge and best practices together and thus leave us standing stronger in the fight against one of the greatest threats to modern society.”
The SCN will connect cities, city-level practitioners and the communities they represent through a series of workshops, trainings and sustained city partnerships. Network participants will also contribute to and benefit from an online repository of municipal-level good practices and web-based training modules and will be eligible for grants supporting innovative, local initiatives and strategies that will contribute to building social cohesion and resilience to violent extremism.
The SCN will include an International Steering Committee of approximately 25 cities and other sub-national entities from different regions that will provide the SCN with its strategic direction. The SCN will also convene an International Advisory Board, which includes representatives from relevant city-focused networks, to help ensure SCN builds upon their work. It will be run by the Institute for Strategic Dialogue (ISD), a leading international “think-and-do” tank with a long-standing track record of working to prevent violent extremism:
“The SCN provides a unique new opportunity to apply our collective lessons in preventing violent extremism in support of local communities and authorities around the world”, said CEO Sasha Havlicek of ISD. “We look forward to developing this international platform for joint innovation to impact this pressing challenge.”
“It is with great conviction that Montréal has agreed to join the Strong Cities Network founders,” said the Honorable Mayor Denis Coderre of Montreal. “This global network is designed to build on community-based approaches to address violent extremism, promote openness and vigilance and expand upon local initiatives like Montréal’s Mayors’ International Observatory on Living Together. I am delighted that through the Strong Cities Network, the City of Montréal will more actively share information and best practices with a global network of leaders on critical issues facing our communities.”
The Strong Cities Network will launch on Sept. 29, from 4:00 p.m. to 5:30 p.m. EDT, following the Leaders’ Summit on Countering ISIL and Violent Extremism. Welcoming remarks will be offered by the United Nations High Commissioner for Human Rights, Prince Zeid Ra’ad Al Hussein and Mayor Bill de Blasio of New York City, who will also introduce a Keynote address by U.S. Attorney General Lynch. Following this event, the Strong Cities International Steering Committee, consisting of approximately 25 mayors and other leaders from cities and other sub-national entities from around the globe, will hold its inaugural meeting on Sept. 30, 2015, from 9:00 a.m. to 4:00 p.m. EDT.
For more information, please visit www.strongcitiesnetwork.org or contact Sabine Barton via email at: [email protected] or telephone: +44 207 493 9333.
Last Defendant Sentenced in Major Maritime Marijuana Smuggling CaseRead the Press Release
Special Assistant U. S. Attorney Emily Reuter (619) 546-9706
NEWS RELEASE SUMMARY – September 28, 2015
SAN DIEGO – The last of four defendants was sentenced in federal court today to 37 months in custody for smuggling more than 11,600 pounds of marijuana on two panga boats traveling together in international waters approximately 115 nautical miles southwest of Ensenada, Mexico.
This is the largest marijuana interdiction by the U.S. Coast Guard off the California coast since 2011.
Armando Rodriguez-Ramirez was sentenced by U.S. District Judge Marilyn L. Huff. The defendant pleaded guilty on January 15, 2015 to Conspiracy to Import Marijuana Intended for Importation. Defendants Reyes Rodriguez-Gomez, Jose Transito Rangel-Luna and Francisco Antonio Castro-Aviles previously entered guilty pleas to the same crime and were sentenced to 78, 30 and 21 months, respectively.
“We aren’t going to let our oceans become a freeway for drug traffickers,” said U.S. Attorney Laura Duffy. “Smugglers might think the vast Pacific is a good place to be invisible, but these defendants know otherwise.”
According to the complaint, the four defendants were arrested on July 29, 2014, after their two drug smuggling vessels were spotted by a Coast Guard aircrew from Air Station Sacramento, California. The Coast Guard Cutter Stratton from Alameda, California, and Cutter Petrel from San Diego, were patrolling in the area and launched pursuit boats to intercept the vessels. The defendants abandoned an approximately 55-foot vessel laden with marijuana and fled in a 35-foot panga.
The Coast Guardsmen chased the defendants for approximately two hours before they stopped the fleeing vessel by shouldering it, thus allowing a Coast Guard boarding team to take the defendants into custody. The drug-laden panga as well as floating bales of marijuana were also recovered by the Coast Guard. The Coast Guard Cutter Haddock from San Diego also participated in the interdiction.
The crew of the Cutter Petrel turned the four defendants over to agents from Homeland Security Investigations who investigated the crime, according to the complaint.
“The success of prosecutors, investigators and Coast Guardsmen in this case highlights our whole-of-government campaign to combat the threats posed by violent transnational organized crime networks, which erode stability, security and prosperity in the Western Hemisphere,” said Vice Adm. Charles Ray, commander, Coast Guard Pacific Area. “Together we stand ready to target, attack and disrupt criminal networks using all of the authorities, capabilities, competencies and partnerships our Nation has to offer, both at home and abroad.”
“Homeland Security Investigations is committed to combating the threat of transnational criminal organizations and their illicit smuggling activity whether it be by land, air or sea,” said Mike Carney, deputy special agent in charge for ICE Homeland Security Investigations in San Diego. “In this smuggling event the San Diego Maritime Task Force, comprised of investigators from HSI, U.S. Border Patrol, San Diego Sheriff’s Department, San Diego Harbor Police and the Coast Guard Investigative Service, put together a strong case building upon the great work of the crew of the U.S. Coast Guard Cutter Stratton.”
In his plea agreement, Rodriguez-Ramirez admitted that the larger of the two pangas was loaded with about 5,305 kilograms of marijuana and that he and fellow crew members were helping transport it to the U.S. for distribution.
The Coast Guard and its interagency partners have seized more than 30,000 pounds of marijuana off the California coast in Fiscal Year 2015, which runs from Oct. 1, 2014, to Sept. 30, 2015. In Fiscal Year 2014, Coast Guardsmen seized more than 121,000 pounds of marijuana worth over $110 million. Coast Guard officials attribute the increased law enforcement presence in the California Coastal Region, through interagency operations, with the drop in maritime smuggling efforts.
Armando Rodriguez-Ramirez was sentenced by U.S. District Judge Marilyn L. Huff.
DEFENDANT Case Number: 14CR2415-H
Armando Rodriguez-Ramirez Age 24 Mazatlán, Mexico
Other Defendants:
Reyes Rodriguez-Gomez Age 46 Mazatlán, Mexico
Jose Transito Rangel-Luna Age 49 Mazatlán, Mexico
Francisco Antonio Castro-Aviles Age 25 San Quintin, Mexico
SUMMARY OF CHARGE
Conspiracy to Import Marijuana Intended for Importation, in violation of Title 21, United States Code, Sections 959, 960, and 963
Maximum penalty: Life in prison, $10 million fine, $100 special assessment, and a term of supervised release of at least 5 years.
AGENCIES
U.S. Coast Guard
Homeland Security Investigations
Video from the Bust -
https://www.dvidshub.net/video/425675/coast-guardsmen-interdict-11000-pounds-marijuana
Photos from the offload -
https://www.dvidshub.net/image/1476095/coast-guard-cutter-stratton-offloads-seized-marijuana
Video from the Offload -
https://www.dvidshub.net/video/353064/coast-guard-cutter-stratton-offloads-12000-pounds-seized-marijuana
Laser Attack on Sheriff’s Helicopter Nets Prison Term for Bakersfield ManRead the Press Release
FRESNO, Calif. — Barry Lee Bowser Jr., 52, of Bakersfield, was sentenced today to 21 months in prison for shining a powerful green laser at the pilot of a Kern County Sheriff’s helicopter, United States Attorney Benjamin B. Wagner announced.
In June, a federal jury found Bowser guilty of aiming the beam of a laser at Air-1, a Kern County Sheriff’s helicopter that was providing support to ground units responding to a man armed with a gun. At trial, the evidence established that the mission was diverted when the pilot of Air-1 was struck by direct hits from a powerful green laser that illuminated the cockpit and tracked the aircraft near the approach path to Meadows Field Airport. The laser strikes caused the pilot to experience flash blindness, eye discomfort, and pain that lasted several hours.
In imposing sentence, U.S. District Judge Lawrence J. O’Neill found that Bowser had obstructed justice before trial by concealing the laser and providing false statements to law enforcement and at trial through his false testimony about the offense.
The federal statute used to charge Bowser is part of legislation signed into law in 2012 by President Obama that makes it a federal crime to knowingly aim the beam of a laser pointer at an aircraft or its flight path. Reports of laser attacks have increased dramatically in recent years as powerful laser devices have become more affordable and widely available to the public. In 2014, the Federal Aviation Administration (FAA) received 3,894 reports of incidents involving laser strikes on aircraft. In the Eastern District of California, which encompasses 34 counties in the eastern portion of California, there were 150 reported laser incidents, with Bakersfield and Fresno leading in the number of reported incidents. Lasers can cause visual interference even at great distances and can completely incapacitate pilots who are trying to fly safely to their destination. Laser strikes pose a serious threat to air safety, endangering crew members, passengers and people on the ground.
The case against Bowser was investigated by the Federal Bureau of Investigation, the Kern County Sheriff’s Office, and the Bakersfield Police Department. Assistant U.S. Attorney Karen Escobar and Special Assistant U.S. Attorney Bayleigh Pettigrew prosecuted the case.
Lancaster Man Sentenced to Nearly Seven Years in Prison for Defrauding State’s Unemployment Insurance System and Tax FraudRead the Press Release
LOS ANGELES – A Lancaster man was sentenced today to 80 months in federal prison on fraud charges related to a scheme to defraud the state’s unemployment insurance program and a related scheme to obtain fraudulent federal tax refunds.
Carl Artis, 55, was sentenced by United States District Judge George Wu, who also ordered the defendant to pay $598,000 in restitution.
Artis pleaded guilty in February to one count of mail fraud and one count of making false claims against the United States government.
According to the plea agreement filed in the case, from at least August 2010 through August 2014, Artis operated a scheme to defraud the California Employment Development Department (EDD) of unemployment insurance benefits. To execute the scheme, Artis registered fictitious companies with the EDD, submitted false wage information for individuals whom he falsely claimed worked for these companies, and then fraudulently applied for and obtained unemployment insurance benefits in the names of these individuals.
In addition, from at least April 2011 until July 2013, Artis engaged in a scheme to defraud the Internal Revenue Service by submitting fraudulent tax returns that sought tax refunds. In the tax fraud scheme, Artis used the identities of many of the same individuals and businesses used in the EDD scheme.
Artis, who had served time in the California state prison system, used names of other prisoners to file the false claims with the EDD and the IRS.
“Today’s sentencing highlights that EDD has zero tolerance for fraud against the Unemployment Insurance Program,” said EDD Director Patrick W. Henning Jr. “I applaud EDD’s Investigation Division, the U.S. Attorney, and our other law enforcement partners for protecting taxpayers, businesses and unemployed Californians.”
The case against Artis is the result of an investigation by the California Employment Development Department, the United States Department of Labor – Office of Inspector General, and IRS - Criminal Investigation.
“Today's sentencing sends a powerful message that combating unemployment insurance fraud remains a high priority for the Office of Inspector General,” stated Abel Salinas, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in Los Angeles. “We will continue to work with our law enforcement partners to safeguard unemployment insurance benefits from illicit enrichment schemes and conspiracies carried out against Department of Labor programs."
Ketchikan Residents Sentenced to Prison for Trafficking Methamphetamine and HeroinRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that two Ketchikan residents were sentenced in federal court in Juneau for trafficking methamphetamine and heroin.
Robert Duane Moriarty, 36, and Sara Skan, 35, of Ketchikan, Alaska, were sentenced today in Juneau by U.S. District Court Judge Timothy M. Burgess. Moriarity received a sentence of 60 months of imprisonment followed by a five year term of supervised release, and Skan received 18 months of imprisonment followed by a three year term of supervised release. On July 21, 2015, Moriarty and Skan pled guilty to a drug trafficking conspiracy charge involving methamphetamine and heroin.
According to Assistant U.S. Attorney Jack Schmidt, beginning in September 2014, Moriarty and Skan began trafficking methamphetamine and heroin in Ketchikan. During the course of the conspiracy, the defendants travelled to the Lower 48 with drug proceeds to purchase narcotics and transport those narcotics on their person back to Ketchikan for subsequent distribution. Based on a tip, law enforcement was notified that on January 25, 2015, Moriarty and Skan were scheduled to fly to Seattle, Washington, with drug proceeds to purchase narcotics. On January 27, 2015, Moriarty and Skan were both contacted upon arriving back at the Ketchikan airport where they were searched pursuant to a search warrant. During the search, law enforcement found approximately 141 grams of methamphetamine, 121 grams of heroin, and drug proceeds. Law enforcement seized a total of $1,009 in U.S. currency that was obtained from the sale of narcotics and subsequently abandoned to the United States as part of the defendants’ pleas.
In sentencing Moriarty and Skan, Judge Burgess noted the seriousness of the crime, the extraordinary impact drug trafficking has in a small community, the criminal histories of the defendants, and the deterrence of the defendants and others as the reasons for the sentences he imposed.
Ms. Loeffler commends the Drug Enforcement Administration, Ketchikan Police Department, and the Port of Seattle Police Department who conducted the investigation leading to the successful prosecution in this case.
Justice Department and Consumer Financial Protection Bureau Reach Settlement to Resolve Allegations of Auto Lending Discrimination by Fifth Third BankRead the Press Release
WASHINGTON – The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced an $18 million settlement to resolve allegations that Fifth Third Bank (Fifth Third) engaged in a pattern or practice of discrimination against African-American and Hispanic borrowers in its indirect auto lending business.
The settlement, which is subject to court approval, includes compensation for African-American and Hispanic borrowers who were overcharged, and requires changes to the way that Fifth Third prices automobile loans. Specifically, Fifth Third has agreed to change the way it prices its loans by limiting dealer markup to 125 basis points, or 1.25 percent, for loans of 60 months or less, and to 100 basis points, or one percent, for loans greater than 60 months.
“We commend Fifth Third for its commitment to treating all of its customers fairly without regard to race or national origin and its leadership in agreeing to impose lower caps on discretionary markups,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “This agreement shows that the indirect auto lending industry is moving toward a model of dealer compensation that fairly compensates dealers for their work related to loans, while limiting the dealer markup that leads to discriminatory pricing.”
“Consumers deserve a level playing field when they enter the marketplace, especially when financing an automobile,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio. “This settlement prevents discrimination in setting the price for auto loans.”
“We are committed to promoting fair and equal access to credit in the auto finance marketplace,” said CFPB Director Richard Cordray. “Fifth Third’s move to a new pricing and compensation system represents a significant step toward protecting consumers from discrimination."
The coordinated investigations by the department and the CFPB that preceded today’s settlement determined Fifth Third’s previous system of subjective and unguided pricing discretion directly resulted in the bank’s qualified African-American and Hispanic borrowers paying more than qualified non-Hispanic white borrowers. The department and CFPB anticipate that Fifth Third’s new caps on discretionary markups will substantially reduce or eliminate these disparities.
The investigation relates to what are called “indirect” auto loans, because, rather than taking applications directly from consumers, the bank makes most of its auto loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Fifth Third. Fifth Third’s previous business practice, like that of many other major auto lenders, allowed car dealers discretion to mark up a loan’s interest rate from the price Fifth Third initially sets based on the borrower’s objective credit-related factors. Dealers received greater payments from Fifth Third for loans that included a higher interest rate markup.
The settlement resolves claims by the department and the CFPB that Fifth Third discriminated by charging thousands of African-American and Hispanic borrowers higher interest rates than non-Hispanic white borrowers. The agencies claim that Fifth Third charged borrowers higher interest rates because of their race or national origin and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. The United States’ complaint alleges that the average African-American victim was obligated to pay over $200 more during the term of the loan because of discrimination and the average Hispanic victim was also obligated to pay over $200 more during the term of the loan because of discrimination. The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending. Fifth Third’s settlement with the Department of Justice, which is subject to court approval, was filed today in the U.S. District Court for the Southern District of Ohio in conjunction with the Department of Justice’s complaint. Fifth Third resolved the CFPB’s claims by entering into a public administrative settlement.
The settlement also requires Fifth Third to improve its monitoring and compliance systems. The settlement allows the lender to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results. The department commends Fifth Third for working cooperatively to reach an appropriate resolution of this case.
The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Fifth Third’s discrimination. The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.
The Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Ohio and the CFPB are members of the Financial Fraud Enforcement Task Force. President Obama established that interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
Justice Department and Consumer Financial Protection Bureau Reach Settlement to Resolve Allegations of Auto Lending Discrimination by Fifth Third BankRead the Press Release
The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced an $18 million settlement to resolve allegations that Fifth Third Bank (Fifth Third) engaged in a pattern or practice of discrimination against African-American and Hispanic borrowers in its indirect auto lending business.
The settlement, which is subject to court approval, includes compensation for African-American and Hispanic borrowers who were overcharged, and requires changes to the way that Fifth Third prices automobile loans. Specifically, Fifth Third has agreed to change the way it prices its loans by limiting dealer markup to 125 basis points, or 1.25 percent, for loans of 60 months or less, and to 100 basis points, or one percent, for loans greater than 60 months.
“We commend Fifth Third for its commitment to treating all of its customers fairly without regard to race or national origin and its leadership in agreeing to impose lower caps on discretionary markups,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “This agreement shows that the indirect auto lending industry is moving toward a model of dealer compensation that fairly compensates dealers for their work related to loans, while limiting the dealer markup that leads to discriminatory pricing.”
“Consumers deserve a level playing field when they enter the marketplace, especially when financing an automobile,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio. “This settlement prevents discrimination in setting the price for auto loans.”
“We are committed to promoting fair and equal access to credit in the auto finance marketplace,” said CFPB Director Richard Cordray. “Fifth Third’s move to a new pricing and compensation system represents a significant step toward protecting consumers from discrimination."
The coordinated investigations by the department and the CFPB that preceded today’s settlement determined Fifth Third’s previous system of subjective and unguided pricing discretion directly resulted in the bank’s qualified African-American and Hispanic borrowers paying more than qualified non-Hispanic white borrowers. The department and CFPB anticipate that Fifth Third’s new caps on discretionary markups will substantially reduce or eliminate these disparities.
The investigation relates to what are called “indirect” auto loans, because, rather than taking applications directly from consumers, the bank makes most of its auto loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Fifth Third. Fifth Third’s previous business practice, like that of many other major auto lenders, allowed car dealers discretion to mark up a loan’s interest rate from the price Fifth Third initially sets based on the borrower’s objective credit-related factors. Dealers received greater payments from Fifth Third for loans that included a higher interest rate markup.
The settlement resolves claims by the department and the CFPB that Fifth Third discriminated by charging thousands of African-American and Hispanic borrowers higher interest rates than non-Hispanic white borrowers. The agencies claim that Fifth Third charged borrowers higher interest rates because of their race or national origin and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. The United States’ complaint alleges that the average African-American victim was obligated to pay over $200 more during the term of the loan because of discrimination and the average Hispanic victim was also obligated to pay over $200 more during the term of the loan because of discrimination. The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending. Fifth Third’s settlement with the Department of Justice, which is subject to court approval, was filed today in the U.S. District Court for the Southern District of Ohio in conjunction with the Department of Justice’s complaint. Fifth Third resolved the CFPB’s claims by entering into a public administrative settlement.
The settlement also requires Fifth Third to improve its monitoring and compliance systems. The settlement allows the lender to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results. The department commends Fifth Third for working cooperatively to reach an appropriate resolution of this case.
The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Fifth Third’s discrimination. The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.
The Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Ohio and the CFPB are members of the Financial Fraud Enforcement Task Force. President Obama established that interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
Justice Department Reaches Agreement with San Juan County, New Mexico, to Improve AccessibilityRead the Press Release
The Justice Department today announced a settlement agreement with San Juan County, New Mexico, to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA). In July 2015, the department celebrated the 25th anniversary of the ADA and the department’s PCA initiative has now resulted in over 200 agreements with cities, town and counties. Today’s agreement will enhance access to all aspects of civic life for persons with disabilities in San Juan County.
The department’s PCA agreement with San Juan County requires the county to make physical modifications to county facilities to ensure that its parking, routes into buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to persons with disabilities. San Juan County also agreed post, publish and distribute a notice on the provisions of the ADA and its applicability to the county’s programs, services and activities as well as provide information to interested persons with disabilities concerning the existence and location of the county’s accessible services, activities and programs. Further, the county will also establish, implement, and post online a policy that the county’s web pages must be accessible and ensure that all of its new and modified pages are accessible. Notably, this agreement also requires the county to ensure that the county’s official website and other web-based services conform to industry guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible.
“This summer we celebrated the 25th anniversary of the ADA and reflected on the great strides we all have made in making the country more accessible to persons with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “As we move into the next quarter century of civil rights for persons with disabilities, we know that there is still much to be done. This agreement is one of many examples of the efforts the division is making with state and local government to ensure that their citizens with disabilities attain equal access to all of their programs, activities and services.”
For more information about the ADA, today’s agreement, the Project Civic Access initiative, individuals may access the ADA Web page at http://www.ada.gov/civicac.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Reaches Agreement with Galveston County, Texas, to Improve Accessibility of Services and ProgramsRead the Press Release
The Justice Department today announced a settlement agreement with Galveston County, Texas. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA). In July 2015, the department celebrated the 25th anniversary of the ADA and the department’s PCA initiative has now resulted in over 200 agreements with cities, town and counties. Today’s agreement will enhance access to all aspects of civic life for persons with disabilities in Galveston County.
The department’s PCA agreement with Galveston County requires the county to make physical modifications to county facilities to ensure that its parking, routes into buildings, entrances and public restrooms are accessible to persons with disabilities. Galveston County also agreed to provide effective communication for individuals who have hearing or visual disabilities; ensure that its emergency management procedures and policies include provisions for the evacuation of persons with disabilities; and, ensure that its emergency shelters are accessible to persons with disabilities. Notably, this agreement also requires the county to ensure that the county’s official website and other web-based services conform to industry guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible.
“This settlement reflects how much the law impacts the everyday lives of residents with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Through Project Civic Access, the Justice Department has worked to ensure that all Galveston County residents and visitors with disabilities have the same access to parks, community centers, museums, libraries and county government buildings, programs, services and activities in these communities.”
“We are committed to ensuring accessibility under the ADA throughout this district,” said U.S. Attorney Kenneth Magidson of the Southern District of Texas. “Our attorneys will continue to work with our local communities and businesses to ensure compliance.”
As we continue to celebrate the achievements towards ensuring equal access for persons with disabilities in the 25 years since the passage of the ADA, the department’s PCA initiative highlights the nation’s progress towards ensuring that persons with disabilities can enjoy equal access to state and local governments.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement with Galveston County requires all actions to be completed within three years. The department will actively monitor the county’s compliance with the agreement.
For more information about the ADA, today’s agreement or the Project Civic Access initiative, individuals may access the ADA Web page at http://www.ada.gov/civicac.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Expands Violence Reduction Network to Five New SitesRead the Press Release
Deputy Attorney General Sally Q. Yates and Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP) today announced that five new cities will join the Violence Reduction Network (VRN), a comprehensive approach to reducing violent crime in communities around the country. The new partnering cities are Little Rock, Arkansas; West Memphis, Arkansas; Compton, California; Flint, Michigan and Newark, New Jersey. They join the inaugural sites of Detroit; Chicago; Camden, New Jersey; Wilmington, Delaware; and Oakland and Richmond, California.
“The Violence Reduction Network uses every tool in the Justice Department’s toolbox to help communities combat violent crime. And we deploy these resources in a targeted, strategic, data-driven way to get the most bang for our buck,” said Deputy Attorney General Sally Quillian Yates. “While we’re still early in this process with the five cities we announced last year, we’re encouraged by the progress we’ve made so far. And we’re looking forward to getting down to work in the five new cities we’re announcing today.”
Today’s announcement was made before an audience of U.S. Attorneys, police chiefs, sheriffs, mayors, local leaders from the ten sites and Department of Justice representatives at the second annual VRN Summit in Detroit. Through the VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the United States Marshals Service (USMS), the Drug Enforcement Administration (DEA), the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office and the Office on Violence Against Women.
Deputy Attorney General Yates cited the progress reported by the current VRN sites in their first year. In Camden, for example, the FBI assisted the local police display wanted felons’ information on digital billboards, resulting in the arrest of two felons The ATF helped the Camden County Police Department acquire National Integrated Ballistic Information Network (NIBIN) equipment and training. NIBIN has allowed the county to initiate eTrace, an Internet-based firearms tracing and analysis tracking process to enhance criminal investigations.
In Chicago, police used closed-captioned television to post videos of sexual assault suspects on Facebook, leading to arrests. With the advice and technical support of the DOJ VRN partners, the Wilmington Police Department created a new homicide unit and the homicide clearance rate rose from less than 10 percent to more than 50 percent on current-year cases. Detroit started to use sophisticated data analysis techniques to identify warning signals for domestic violence homicides to prevent these crimes and in August 2015 coordinated with the FBI in using the Digital Billboards Initiative to feature a homicide suspect.
Oakland and Richmond, California strengthened their relationships with the DOJ law enforcement partners in significant ways. The ATF embedded three full-time ATF special agents in the Richmond Police Department to assist with commercial armed robberies, shootings, and homicides. A national USMS task force operation in Contra Costa County resulted in the apprehension of over 130 people, including 12 homicide suspects.
The Oakland Police Department (OPD) continues to focus on ways to use analytics to enhance their crime prevention and violence reduction efforts. They have received two training sessions in social network analysis through the VRN. OPD is planning to conduct a full group audit to extract “on the ground” intelligence of known offenders and gangs through focus-group style working sessions with law enforcement and community organizations and will use this intelligence to build and support their social network analysis. The Oakland Police Department also participated in Crime Analysis for Executive Training and is now revamping their crime analysis unit.
This past summer, the FBI, DEA, and USMS participated in the Richmond’s Safe City Summer: Crime Prevention Public Safety Fair, a collaborative effort at Richmond City Hall to combat recent increases in violence and interacted with over 4,000 community members on their agency’s federal law enforcement role in assisting the police department with crime prevention efforts.
The DEA, through their El Paso Intelligence Center (EPIC), is providing all the VRN sites with the opportunity to work collaboratively to enhance their investigations and operations that target criminal activities.
In addition to announcing the five new VRN sites, Deputy Attorney General Yates announced Smart Policing grant awards totaling over $2 million to law enforcement agencies to develop innovative, data-driven approaches to crime.
For more VRN information visit www.bja.gov/Programs/VRN.html.
Justice Department Expands Violence Reduction Network to Five New SitesRead the Press Release
DETROIT— Deputy Attorney General Sally Q. Yates and Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP) today announced that five new cities will join the Violence Reduction Network (VRN), a comprehensive approach to reducing violent crime in communities around the country. The new partnering cities are Little Rock, Arkansas; West Memphis, Arkansas; Compton, California; Flint, Michigan and Newark, New Jersey. They join the inaugural sites of Detroit; Chicago; Camden, New Jersey; Wilmington, Delaware; and Oakland and Richmond, California.
"The Violence Reduction Network uses every tool in the Justice Department’s toolbox to help communities combat violent crime. And we deploy these resources in a targeted, strategic, data-driven way to get the most bang for our buck," said Deputy Attorney General Sally Quillian Yates. "While we’re still early in this process with the five cities we announced last year, we’re encouraged by the progress we’ve made so far. And we’re looking forward to getting down to work in the five new cities we’re announcing today."
Today’s announcement was made before an audience of U.S. Attorneys, police chiefs, sheriffs, mayors, local leaders from the ten sites and Department of Justice representatives at the second annual VRN Summit in Detroit. Through the VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the United States Marshals Service (USMS), the Drug Enforcement Administration (DEA), the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office and the Office on Violence Against Women.
Deputy Attorney General Yates cited the progress reported by the current VRN sites in their first year. In Camden, for example, the FBI assisted the local police display wanted felons’ information on digital billboards, resulting in the arrest of two felons The ATF helped the Camden County Police Department acquire National Integrated Ballistic Information Network (NIBIN) equipment and training. NIBIN has allowed the county to initiate eTrace, an Internet-based firearms tracing and analysis tracking process to enhance criminal investigations.
In Chicago, police used closed-captioned television to post videos of sexual assault suspects on Facebook, leading to arrests. With the advice and technical support of the DOJ VRN partners, the Wilmington Police Department created a new homicide unit and the homicide
clearance rate rose from less than 10 percent to more than 50 percent on current-year cases. Detroit started to use sophisticated data analysis techniques to identify warning signals for domestic violence homicides to prevent these crimes and in August 2015 coordinated with the FBI in using the Digital Billboards Initiative to feature a homicide suspect.
Oakland and Richmond, California strengthened their relationships with the DOJ law enforcement partners in significant ways. The ATF embedded three full-time ATF special agents in the Richmond Police Department to assist with commercial armed robberies, shootings, and homicides. A national USMS task force operation in Contra Costa County resulted in the apprehension of over 130 people, including 12 homicide suspects.
The Oakland Police Department (OPD) continues to focus on ways to use analytics to enhance their crime prevention and violence reduction efforts. They have received two training sessions in social network analysis through the VRN. OPD is planning to conduct a full group audit to extract "on the ground" intelligence of known offenders and gangs through focus-group style working sessions with law enforcement and community organizations and will use this intelligence to build and support their social network analysis. The Oakland Police Department also participated in Crime Analysis for Executive Training and is now revamping their crime analysis unit.
This past summer, the FBI, DEA, and USMS participated in the Richmond’s Safe City Summer: Crime Prevention Public Safety Fair, a collaborative effort at Richmond City Hall to combat recent increases in violence and interacted with over 4,000 community members on their agency’s federal law enforcement role in assisting the police department with crime prevention efforts.
The DEA, through their El Paso Intelligence Center (EPIC), is providing all the VRN sites with the opportunity to work collaboratively to enhance their investigations and operations that target criminal activities.
In addition to announcing the five new VRN sites, Deputy Attorney General Yates announced Smart Policing grant awards totaling over $2 million to law enforcement agencies to develop innovative, data-driven approaches to crime.
For more VRN information visit www.bja.gov/Programs/VRN.html.
Justice Department Announces More than $2 Million for Smart Policing InitiativeRead the Press Release
Deputy Attorney General Sally Q. Yates today announced that the Justice Department has awarded more than $2 million in funding for the Smart Policing Initiative (SPI). SPI will support four jurisdictions nationwide by helping them build evidence-based, data-driven tactics and strategies to ensure law enforcement agencies are effective, efficient and economical.
“The goal of these efforts is to make a difference in each community by helping local law enforcement agencies reduce crime and earn the confidence of the citizens they serve,” said Deputy Attorney General Sally Quillian Yates.
The SPI, a competitive grant program administered by the Bureau of Justice Assistance, creates collaborations between law enforcement officials and researchers in 39 communities to tackle such public safety challenges as neighborhood drug markets, gun violence, domestic violence, and the chronic violent offenders who perpetrate such crimes. It encourages innovative use of analysis, technology, and evidence-based practices, while seeking community input on ways to improve policing practices and increase transparency, accountability and legitimacy.
Today’s announcement was made at the 2nd Annual Violence Reduction Network (VRN) Summit. VRN is an unprecedented effort to deliver strategic, intensive training and technical assistance to reduce violence in local communities.
For more information on the Smart Policing Initiative and VRN visit:
https://www.bja.gov/ProgramDetails.aspx?Program_ID=80.
https://www.bja.gov/Programs/VRN.html
About the Office of Justice Programs (OJP)OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at www.ojp.gov.
Justice Department Announces $26 Million in Grants to Develop and Strengthen Criminal Justice and Community Partnerships to Address Sexual Assault, Domestic Violence, Dating and StalkingRead the Press Release
Deputy Attorney General Sally Quillian Yates today announced 44 awards totaling over $26 million in funding through the Department of Justice’s Office on Violence Against Women’s Grants to Encourage Arrest Policies and Enforcement of Protection Orders Program. These 44 recipients will create and enhance collaborative partnerships between criminal justice agencies, victim services providers, and community organizations that respond to sexual assault, domestic violence, dating violence and stalking. The awards were announced at the Justice Department’s Second Annual Violence Reduction Network (VRN) Summit in Detroit, Michigan.
“Sexual assault, domestic violence, dating violence, and stalking are serious crimes that require a robust criminal justice system response in coordination with community based organizations and victim service providers,” said Deputy Attorney General Sally Quillian Yates. “This program challenges the whole community to work together to identify barriers and develop solutions that enhance victim safety and hold offenders accountable.”
Three VRN sites – Chicago, Detroit, and Oakland/Richmond – will directly benefit from these awards. Cook County is receiving an award to develop a multidisciplinary team to strengthen the law enforcement response to victims of sexual assault, domestic violence, dating violence, and stalking who are enrolled in colleges located in Cook County, including Chicago. Contra Costa County, California—home to Richmond—is receiving an award to support the "Contra Costa County Zero Tolerance for Domestic Violence" project, which, among other things, will provide a variety of resources and services for victims of domestic violence and support a full-time probation officer who will monitor 35-40 high-risk domestic violence probationers. And Detroit is receiving an award to improve the information communication systems between the Detroit Police Department’s Domestic Violence Unit and the Wayne County Prosecutor’s Office and to provide centralized, accessible legal and social services to victims of domestic violence.
The Fiscal Year 2015 Arrest Program grant recipients are:
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Bannock County, ID
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Buncombe County, NC
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Circle, Incorporated, VT
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City and County of Denver, CO
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City and County of San Francisco, CA
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City of Cheyenne, WY
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City of Detroit, MI
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City of Gainesville, FL
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City of Indianapolis, IN
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City of Lee's Summit, MO
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City of Lowell, MA
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City of New Orleans, LA
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City of Richmond, KY
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Contra Costa County, CA
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Council on Domestic Violence and Sexual Assault, MI
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County of Cook, IL
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Cumberland County, ME
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Erie County, NY
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Executive Office of the State of Kansas, KS
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Family Support Center of South Sound, WA
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Grand Traverse Band of Ottawa and Chippewa Indians, MI
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Iowa State Judicial Branch, IA
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James City County, VA
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Jersey Battered Women's Service, Incorporated, NJ
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Lafayette City Parish Consolidated Government, LA
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Lake County, MT
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Maine Coalition to End Domestic Violence, ME
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Metro Government of Nashville & Davidson County, TN
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Monroe County, IN
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Nevada Network Against Domestic Violence, NV
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New Jersey Department of Law & Public Safety, NJ
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New York City Mayor's Office of Criminal Justice, NY
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Oklahoma District Attorneys Council, OK
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Rhode Island Public Safety Grant Administration Office, RI
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Riverside County, CA
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Safe Horizon, Incorporated, NY
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Schuylkill County, PA
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Shelby County, AL
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Strafford County Commissioners, NH
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Suffolk County, NY
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Summit County, OH
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Town of East Bridgewater, MA
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Travis County Domestic Violence & Sexual Assault Survival Center, TX
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Winnebago County Circuit Court, IL
About the Office on Violence Against Women
Created in 1995, the Office on Violence Against Women (OVW) provides federal leadership in developing the Nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. To learn more, visit www.justice.gov/ovw
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Jury Convicts Man of Alien SmugglingRead the Press Release
ALBANY, NEW YORK – A jury last week found Ronaldo Reyes, 39, of Quebec, Canada, guilty of conspiracy to bring aliens to the United States and seven counts of bringing an alien to the United States, announced United States Attorney Richard S. Hartunian, United States Border Patrol Chief Patrol Agent John C. Pfeifer, and Homeland Security Investigations (HSI) Resident Agent in Charge Allen Vanscoy.
Reyes was indicted and extradited from Canada earlier this year. He faces at least five years and a maximum of fifteen years in prison when sentenced by United States District Judge Frederick J. Scullin Jr., as well as a maximum three-year term of supervised release.
Reyes was residing in Canada at the time of his crimes, but is from El Salvador. The evidence at trial, which concluded September 23 with a guilty verdict, established that Reyes smuggled aliens from Canada into the United States between January 2013 and July 22, 2013. Investigations conducted by Border Patrol agents at the Champlain, NY and Beecher Falls, VT, stations resulted in the detentions of 12 undocumented aliens whose passage into the United States was orchestrated by Reyes.
Reyes walked the aliens across the international border at night to a prearranged pickup vehicle before fleeing north to Canada on foot. The aliens paid Reyes thousands of dollars in U.S. and Canadian cash.
“The Department of Justice prioritizes cases involving the smuggling or transporting of undocumented individuals into the United States,” stated United States Attorney Richard S. Hartunian. “I commend the collaboration of our partner agencies, the United States Border Patrol and Homeland Security Investigations, which brought about the conviction.”
“The successful dismantling of this criminal organization was a result of the collaboration amongst several agencies and exemplifies how we conduct business every day,” stated John Pfeifer, Chief Patrol Agent, U.S. Border Patrol.
“Homeland Security Investigations is committed to targeting and dismantling smuggling organizations,” stated HSI Resident Agent in Charge Allen Vanscoy. “These investigations ensure integrity and safety at our borders and, more broadly, U.S. national security.”
This case was investigated by the United States Border Patrol and Homeland Security Investigations, and was prosecuted by Assistant U.S. Attorneys Douglas Collyer and Katherine Kopita.
Iroquois County Man to Serve 20 Years in Federal Prison for Trafficking Kilograms of CocaineRead the Press Release
Urbana, Ill. - U.S. District Court Judge Colin S. Bruce today sentenced Valeriano J., aka ‘Billy,’ Zarate (zah-RAH'-te), 41, of Cissna Park, Ill., to 20 years in federal prison for conspiracy to possess more than five kilograms of cocaine with intent to distribute. Following release from prison, Zarate was ordered to remain on supervised release for 10 years.
Zarate has been detained in the custody of the U.S. Marshals Service since his arrest on Oct. 9, 2014. Zarate entered a plea of guilty on April 17, 2015, to conspiring with others from 2012 to October 2014 to possess cocaine with intent to distribute. Zarate admitted that he and others with whom he conspired agreed to have large quantities of cocaine driven in semi-tractor trailers from outside Illinois to pre-arranged locations in Vermilion County, Ill., as well as near Indianapolis, and other locations.
According to court documents, overt acts to further the conspiracy included distribution by Zarate on Dec. 8, 2013, of approximately 11 kilograms of cocaine to an individual in Youngstown, Ohio; on Dec. 12, 2013, travel by Zarate with a co-conspirator to Columbus, Ohio to receive approximately $1.2 million in payment for 36 kilograms of cocaine previously distributed by the conspirators; and, in June 2014, co-conspirators drove a semi-tractor trailer from Texas to Vermilion County, Ill., loaded with approximately 49 kilograms of cocaine, hidden in a load of mangos, to deliver to Zarate and others at a location arranged by Zarate. According to DEA agents, the verified 49 kilogram “bricks” of cocaine hidden in the tractor-trailer were valued at more than $1,000,000 wholesale, with a street value of more than $4,000,000.
According to the factual basis included in the plea agreement, officers with the Bryant, Ark., police department discovered the cocaine in the load of mangos on June 18, 2014, when they stopped to assist after the tractor-trailer broke down on Interstate 30 in Arkansas. The driver and passenger were traveling from Mission, Texas, and planned to deliver the mangos to a location in Chicago. After delivering the mangos, they planned to travel to a gas station in Oakwood, Ill., where they would be directed to a drop-off location to deliver the cocaine to Zarate and others. Zarate paid the owner of the drop-off location to allow the tractor-trailer to be unloaded there. On June 19, 2014, DEA agents attempted to make a controlled delivery of “bricks” of fake cocaine.
The case against Zarate was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Eugene L. Miller.
Illinois Woman Pleads Guilty to Charges of Providing Material Support to TerroristsRead the Press Release
St. Louis, MO – JASMINKA ROMIC, Rockford, Illinois, pled guilty to conspiracy to commit an offense against the United States by conspiring to provide material support to terrorists and designated foreign terrorist organizations. She entered her plea of guilty earlier today in the Federal District Court for the Eastern District of Missouri, before United States District Judge Catherine D. Perry. Sentencing has been set for January 5, 2016.
If convicted, the crime of Conspiracy to Commit Offenses Against the United States carries a penalty ranging up to 5 years imprisonment and/or a fine up to $250,000. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the St. Louis FBI’s Joint Terrorism Task Force, U.S. Immigration and Customs Enforcement’s (ICE) - Homeland Security Investigations (HSI), U. S. Postal Inspection Service, St. Louis Metropolitan and St. Louis County Police Departments, with assistance from multiple law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorneys Matthew Drake, Howard Marcus and Kenneth Tihen of the Eastern District of Missouri and Mara Kohn, a Trial Attorney in the Counterterrorism Section of the Department of Justice.
Huntington man sentenced to three and half years for role in Federal heroin conspiracyRead the Press Release
HUNTINGTON, W.Va. – A Huntington man who participated in a heroin distribution scheme in 2013 was sentenced today to 40 months in federal prison, announced U.S. Attorney Booth Goodwin. Domenico Chianesi II, 35, previously pleaded guilty in federal court in Huntington in December of 2014 to conspiracy to distribute heroin.
From at least February of 2013 to August 21, 2013, Chianesi and others conspired to distribute heroin in the Huntington area. Chianesi permitted others to transport heroin from Detroit, Michigan to his residence located at 208 8th Avenue in Huntington where the heroin was stored and prepared for distribution. Chianesi also sold heroin at the direction of others and transferred drug proceeds to the organization leaders by using various financial services companies. On August 21, 2013, agents executed a search warrant at Chianesi’s residence where they seized over 130 grams of heroin and over $10,000 in cash.
The Huntington FBI Drug Task Force and Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Gun Dealer Sentenced for Conspiracy in Bribes, Kickbacks for Glock FirearmsRead the Press Release
TOPEKA, KAN. – An Olathe gun dealer was sentenced Monday to 18 months in federal prison for paying bribes to employees of the company that makes Glock firearms, U.S. Attorney Barry Grissom said.
John Sullivan Ralph, III, 42, Olathe, Kan., pleaded guilty to one count of conspiracy to defraud Glock by paying bribes and kickbacks to Glock employees for preferential treatment. Ralph owned Global Guns & Hunting, Inc., of Olathe, Kan., doing business as OMB Guns. From 2003 to 2009 Ralph paid 140 bribes and kickbacks to co-defendants totaling approximately $900,000.
Co-defendants include:
Lisa Delaine Dutton, who was sentenced to 12 months and a day.
Welcome D. Wood, Jr., who is set for sentencing Nov. 16.
James Craig Dutton, who is set for sentencing Nov. 9.
Paula Ann Wood, who is set for sentencing Nov. 16.
Grissom commended the FBI and Assistant U.S. Attorney Richard Hathaway is prosecuting.
Government Settles False Claims Act Allegations against American Access Care Holdings, LLC for $3.5 MillionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Philip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General, today announced that AMERICAN ACCESS CARE HOLDINGS, LLC has entered into a civil settlement agreement with the Government in which it will pay $3,594,791 to resolve allegations that it violated the False Claims Act.
Prior to its merger with Fresenius Vascular Care, Inc. (“Fresenius”) in October 2011, AMERICAN ACCESS CARE HOLDINGS, LLC (“AAC”) operated a number of vascular access centers in the United States, including one in Fairfield, Connecticut. Among other services, vascular access centers address complications with dialysis access for patients with kidney disease. The government alleges that, between January 2007 and September 2011, AAC improperly billed Medicare and Medicaid for multiple percutaneous transluminal angioplasties performed during the same patient encounter. The government also alleges that, between October 2005 and September 2011, AAC improperly submitted claims to Medicare and Medicaid for procedures performed during follow-up visits that were not medically necessary.
The conduct addressed by the settlement occurred prior to the merger with Fresenius.
“It is imperative that all health care providers bill only for appropriate and necessary medical treatments and bill for such services accurately and honestly,” said U.S. Attorney Daly. “The U.S. Attorney’s Office will vigorously investigate any provider that submits fraudulent claims to Medicare or Medicaid as this misconduct cheats the system, increasing the cost of health care for all of the rest of us.”
“Health care providers will not be permitted to provide unnecessary medical procedures – in this case, invasive procedures – on patients and then pocket the improper payments they receive as a result,” said HHS-OIG Special Agent in Charge Coyne. “Our agency is dedicated to investigating health care fraud schemes that divert scarce taxpayer funds meant to provide for legitimate patient care.”
The Connecticut settlement is related to a parallel resolution of claims against AAC by the U.S. Attorney for the District of Rhode Island, and follows a third settlement against the company in the Southern District of Florida, in the case United States ex rel. Souza v. American Access Care of Miami, LLC.
In entering into the civil settlement agreement, AAC did not admit liability and disputes the government’s allegations.
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot and Auditor Kevin Saunders.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.
German Business Charged with Smuggling Realistic Federal Law Enforcement Badges into the United StatesRead the Press Release
ATLANTA – German company Master-Equipment has been charged with manufacturing, selling, and smuggling realistic American federal law enforcement badges into the United States. The charges arise out of an investigation of a phony DEA badge use by Daniel Harbison, a Georgia resident who was sentenced to federal prison after impersonating a DEA agent in June 2015.
“The production and sale of genuine-looking federal badges by Master-Equipment potentially places a badge in the hands of individuals, like Daniel Harbison, who are not law enforcement but use them for their own purposes,” said U.S. Attorney John Horn. “This type of product only serves to undermine the trust the public places in law enforcement.”
“The dismantling of a foreign based company’s ability to sell counterfeit U.S. law enforcement badges to a U.S. market is critical in the post 9/11 era,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office. “While this case was initiated by an unlawful traffic stop by an individual impersonating a federal law enforcement officer, those circumstances and consequences could have been much different and far more tragic.”
According to U.S. Attorney Horn, the criminal complaint, and other information presented in court: Master-Equipment is a distributor and reseller of law enforcement equipment and accessories located in Kaarst, Germany. Master-Equipment uses the website www.badge-police.com to sell and advertise its products over the Internet. Master-Equipment’s website is entirely in English and it contains no German.
Master-Equipment claims that its products are made in America and its website contains an image of a bald eagle, the American flag, and the phrase “God Bless America.” Most of the equipment and accessories sold by Master-Equipment bear the name of American-based law enforcement agencies. The website also contains photographs of and testimonials from purported customers who claim to be former U.S. federal law enforcement officers.
Via its website, Master-Equipment sells a variety of realistic replicas of badges used by American federal law enforcement agencies. For example, Master-Equipment sells badges bearing the name of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), Customs and Border Protection (“CBP”), Drug Enforcement Administration (“DEA”), Department of Homeland Security (“DHS”), Federal Bureau of Investigation (“FBI”), Internal Revenue Service (“IRS”), and United States Marshals Service (“USMS”). Master-Equipment also sells a variety of badges bearing the name of the Central Intelligence Agency (“CIA”).
According to its website, Master-Equipment only sells its badges to “active [and] retired police officers, collectors, or for theatrical production.” Through its website, Master-Equipment implies that it is lawful for a customer to purchase badges as collectable items, so long as the customer does not use the badges to impersonate a law enforcement officer. In fact, under U.S. federal law it is illegal to knowingly manufacture, sell, or possess badges or colorable imitations thereof, which are used by U.S. federal law enforcement departments or agencies, regardless of whether they are used by collectors, theatrical productions, or any other purpose.
In April 2015, an American citizen used a Master-Equipment badge to impersonate a U.S. federal law enforcement officer. Specifically, on April 3, 2015, in Doraville, Georgia, Daniel Harbison (a three-time convicted felon) conducted a traffic stop of a vehicle by engaging police-style green and white flashing lights. Unbeknownst to Harbison, the vehicle was being driven by an off-duty Corporal with the Doraville Police Department. During the unauthorized traffic stop, Harbison wore a T-shirt printed with the letters “DEA,” carried a .45 caliber handgun in a thigh holster, and possessed an identification card purportedly issued by the DEA. The Doraville officer also saw that Harbison possessed a realistic gold and blue badge engraved with the letters “US.” Harbison told the Doraville officer that he was a federal officer. The Doraville officer then stated that other police officers were in route to check the authenticity of Harbison’s law enforcement credentials. Harbison then returned to his car and fled the scene.
Later that day, police officers identified Harbison’s residence and ultimately, he was arrested. At Harbison’s residence, police officers recovered several items, including: (a) a Springfield .45 caliber handgun, (b) a DEA T-shirt, (c) green and white lights, (d) an identification card purportedly issued by the DEA, and (e) a gold and blue badge engraved with the letters “US” that is alleged to have been manufactured by Master-Equipment.
In connection with its investigation, the FBI conducted two undercover operations. In May 2015, a FBI undercover agent, posing as an ordinary U.S. civilian, ordered a FBI badge from Master-Equipment via its website. In June 2015, Master-Equipment mailed the undercover agent a badge engraved with the words “Federal Bureau of Investigation – Department of Justice” and embossed with the letters “U.S.” The fake FBI badge sent by Master-Equipment was realistic and virtually identical to a genuine FBI badge (although it was slightly larger). In July 2015, a FBI undercover agent, posing as an ordinary U.S. citizen, ordered a FBI badge from Master-Equipment via its website. In July 2015, Master-Equipment mailed the undercover agent a badge engraved with the words “Federal Bureau of Investigation – Department of Justice” and embossed with the letters “US” The second fake FBI badge sent by Master-Equipment is realistic and virtually identical to a genuine FBI badge.
On April 23, 2015, a grand jury charged Daniel Harbison, 40, of Dunwoody, Georgia, with being a felon in possession of a firearm. Harbison pleaded guilty to that charge on June 9, 2015. On August 27, 2015, Harbison was sentenced to serve one year, nine months in prison.
On September 10, 2015, Master-Equipment was charged in a six-count criminal complaint with smuggling goods into the United States, trafficking in counterfeit goods, and manufacturing and selling fake federal law enforcement badges. In connection with the criminal complaint, the FBI seized the website (www.badge-police.com) that Master-Equipment used to sell its fake badges.
Members of the public are reminded that the criminal complaint 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 U.S. Attorney Jeffrey W. Davis, Special Assistant U.S. Attorney Erin Sanders, and Assistant U.S. Attorney G. Jeffrey Viscomi are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Nursing Home Administrator Sentenced to Federal Prison for Stealing Veterans BenefitsRead the Press Release
ATLANTA – Denise M. Bailey, the former administrator of an assisted living facility, has been sentenced to federal prison for misappropriating over $300,000 in veterans benefits that belonged to one of the facility’s residents.
“While working as a nursing home administrator, the defendant stole disability benefits from a Vietnam veteran who lived in the nursing home,” said U.S. Attorney John Horn. “This disabled veteran was entitled to every penny of his disability award after honorably serving our country, and needed the money to live comfortably in assisted living – yet Bailey spent the money for her own personal expenses.”
Special Agent in Charge Monty Stokes, U.S. Department of Veterans Affairs, Office of Inspector General said, “today’s sentencing is the result of a joint effort to investigate and prosecute a VA fiduciary who embezzled funds from a veteran who was not capable of managing his financial affairs. We will continue to vigorously investigate those whose actions corrupt the integrity of VA fiduciary programs intended to care for our nation’s venerable veterans.”
According to U.S. Attorney Horn, the charges and other information presented in court: Bailey was the administrator at Azalea Gardens, an assisted living facility located in Conyers, Georgia. One of the facility’s residents was a Vietnam veteran who needed long-term care after suffering a heart attack in 2006. In December 2010, the Department of Veterans Affairs appointed Bailey to be the fiduciary for the veteran. As his fiduciary, Bailey agreed to use any veterans benefits awarded to the veteran only for his benefit.
On July 7, 2011, the VA awarded the veteran retroactive disability benefits in the amount of $313,452.37, which was deposited in an account held in the name of the veteran with Bailey as administrator. Bailey drained the account within four days. After transferring the money from that account to the Azalea Gardens account, Bailey transferred the majority of it to herself, or accounts controlled by her, and used a portion to pay off family credit cards bills. During the later VA investigation, Bailey submitted fraudulent bills in an attempt to justify the payments, falsely claiming that the veteran owed money to Azalea Gardens for extraordinary services. Bailey had not informed the veteran or his family about the VA payment or the alleged bills for these services.
Bailey, 49, of Danielsville, Georgia, was sentenced by United States District Judge Thomas W. Thrash, Jr., to one year in prison and two years of supervised release. A decision will be made at a later date regarding the restitution amount still owed to Henderson’s family. On July 7, 2015, Bailey pleaded guilty to misappropriating veterans funds while acting as a fiduciary.
This case was investigated by Special Agents of the Department of Veterans Affairs, Office of Inspector General. Valuable assistance was also provided by the Conyers Police Department.
Assistant U.S. Attorney Stephen H. McClain prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao/gan/.
Former Kittery Woman Sentenced to over a Year in Prison for Bankruptcy FraudRead the Press Release
Contact: Donald E. Clark
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Rana J. Clarizio, 46, of Oak Brook, Illinois, and formerly of Kittery, Maine, was sentenced today in U.S. District Court by Judge George Z. Singal to 366 days years in prison and three years of supervised release for bankruptcy fraud. She was also ordered to pay about $185,000 in restitution. She pled guilty on May 11, 2015.
According to court records, on March 21, 2014, the defendant filed for bankruptcy in Maine. On April 4, 2014, she filed Schedules of Assets and Liabilities ("schedules") and a Statement of Financial Affairs ("SOFA") under the penalty of perjury in which she failed to disclose about $185,000 worth of property of the bankruptcy estate. On May 2, 2014, she falsely testified under oath at a meeting of her creditors that her schedules and SOFA were true and correct. In addition, in anticipation of the bankruptcy filing, she transferred and concealed over $125,000 worth of property of the estate that she failed to disclose in her April schedules and SOFA.
The investigation was conducted by the Federal Bureau of Investigation.