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Monday 3 August 2015
Former Hampshire County loan officer sentenced for bank fraudRead the Press Release
MARTINSBURG, WEST VIRGINIA – Kimberly Haslacker, 39, of Romney, West Virginia, was sentenced today to 12 months in prison for bank fraud after she admitted to using her position as a bank loan officer to obtain fraudulent loans, United States Attorney William J. Ihlenfeld, II, announced.
Haslacker was formerly employed as a loan officer at The Bank of Romney. She used her position to submit false and fraudulent loan applications in her own name and in the names of friends and relatives. Using this scheme, she obtained nearly $170,000 in unlawful loan proceeds. She pled guilty in May 2015 to a criminal Information charging her with one count of “Bank Fraud.”
Assistant U.S. Attorney Paul Camilletti prosecuted the case on behalf of the government. The Federal Bureau of Investigation led the inquiry.
Chief U.S. District Judge Gina M. Groh presided.
Former Barboursville Pharmacy operator sentenced for federal banking crimesRead the Press Release
Former A+ Care Pharmacy Sentenced to 64 Months in Federal Prison and Forfeited $2.3 Million and a Lexus
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Kofi Ohene Agyekum, 37, former owner and operator of A+ Care Pharmacy in Barboursville, West Virginia, was sentenced in federal court in Huntington today to five years and four months in federal prison for violating federal banking laws. Federal banking laws aimed at identifying criminal activity, including drug crimes and terrorism, require financial institutions to report cash transactions of more than $10,000 to federal authorities. Structuring, or dividing cash transactions into amounts less than $10,000, is a common technique used by criminals to avoid triggering the reporting requirements and the detection of the underlying crimes.
At his plea hearing in May 2015, Agyekum admitted that he deposited hundreds of thousands of dollars in cash that he derived from his operation of A+ Care Pharmacy. To avoid the federal reporting requirement, Agyekum admitted that he structured each deposit in an amount less than $10,000 and made the deposits in multiple bank accounts in various area banks, including Huntington National Bank, Fifth Third Bank, Chase Bank and First Sentry Bank.
At the sentencing hearing, the Court found that the money Agyekum used in the banking crimes was derived from the distribution of oxycodone from A+ Care Pharmacy, both with prescriptions that had every indicia of illegality and without any prescriptions at all. The Court noted that these were very serious crimes that contributed to the oxycodone abuse epidemic and that Agyekum was driven by simple greed.
Agyekum also agreed to forfeit to the United States more than $2.3 million plus a Lexus.
Chief United States District Judge Robert C. Chambers imposed today’s sentence.
This case was investigated by Internal Revenue Service Criminal Investigation, the Metropolitan Drug Enforcement Network Team, the West Virginia State Police, and the Drug Enforcement Administration. Assistant United States Attorney Monica D. Coleman is responsible for the prosecution.
Former Alabama Jail Employee Sentenced for Stealing Identities as Part of Tax Refund Fraud SchemeRead the Press Release
A Troy, Alabama, man was sentenced to prison today in U.S. District Court for the Middle District of Alabama for his involvement in a stolen identity tax refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
Devon Tucker, 31, a former jailer of the Troy Police Department at the city jail, pleaded guilty earlier this year to one count of conspiracy to defraud the United States and one count of aggravated identity theft. U.S. District Judge Callie V.S. Granade sentenced Tucker to serve 32 months in prison and three years of supervised release, and ordered him to pay $13,162 in restitution to the Internal Revenue Service (IRS).
According to court documents, from January 2014 to January 2015, Tucker stole the personal identification information of approximately 150 individuals who were processed into the Troy city jail. Tucker provided those identities to his co-conspirators for the purpose of filing false federal income tax returns claiming fraudulent refunds from the U.S. Treasury. Tucker was paid in pre-paid debit cards in the names of the identity theft victims for his involvement in the scheme.
“The Tax Division will vigorously pursue and prosecute government employees who abuse their positions by exploiting their access to personal information to victimize members of the community and steal from the U.S. Treasury,” said Acting Assistant Attorney General Ciraolo.
“It is always a sad day when a law enforcement officer sworn to uphold the law, takes advantage of his position for his own personal gain,” stated U.S. Attorney Beck. “This district will continue to vigorously prosecute those who steal identities and file fraudulent tax returns, regardless of where they are employed or what position they hold.”
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Gregory P. Bailey and Michael P. Hatzimichalis of the Tax Division and Assistant U. S. Attorney Jonathan Ross of the Middle District of Alabama, who prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Final Defendant Pleads Guilty in Multistate Conspiracy to Sell over $1 Million in Counterfeit Erectile-Dysfunction DrugsRead the Press Release
FRESNO, Calif. —John Derek Gitmed, 53, of Los Angeles, pleaded guilty today to one count of trafficking in counterfeit goods, United States Attorney Benjamin B. Wagner announced.
According to court documents, Gitmed, along with his ex-wife, Holly Gitmed, 39, of Riverbank, his daughter Felicia Gitmed, 24, of Los Angeles, and his nephew Anthony Pollino, 37, of Los Angeles, conspired to obtain counterfeit copies of the erectile-dysfunction drugs Viagra®, Cialis®, and Levitra®, along with their packaging, and sell them to consumers throughout California and in the Las Vegas, Nevada area. The defendants assured buyers their products were genuine, when they were actually cheaply made foreign copies of the drugs. The defendants operated as a business, calling their operation the “California Confidence Company.” Gitmed admitted that the value of the counterfeit products attributable to him as over $1.2 million.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Michael G. Tierney and Henry Z. Carbajal III are prosecuting the case.
Gitmed is in custody and is scheduled to be sentenced by Senior United States District Judge Anthony W. Ishii on October 19, 2015. He faces a maximum statutory penalty of 20 years in prison and a $5 million 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.
Each of Gitmed’s co-defendants previously pleaded guilty to one count of trafficking in counterfeit goods. Holly Gitmed pleaded guilty on June 8, 2015, and is scheduled to be sentenced on August 24, 2015. Felicia Gitmed pleaded guilty on June 22, 2015, and is scheduled to be sentenced on January 25, 2016. Anthony Pollino pleaded guilty on July 20, 2015 and is scheduled to be sentenced on October 5, 2015.
Federal grant fraud claims settled with Wheeling Jesuit UniversityRead the Press Release
WHEELING, WEST VIRGINIA – Wheeling Jesuit University will pay the United States the sum of $2,300,000 to settle claims that it misused grant funding awarded by the National Aeronautics and Space Administration, the United States Department of Labor, and the National Science Foundation, United States Attorney William J. Ihlenfeld, II, announced today.
The settlement agreement ends an investigation into allegations that the University failed to comply with rules and regulations governing the allocation of costs and expenses associated with several federal grant awards. The University is alleged to have improperly mischaracterized costs, incurred impermissible costs, and misused federal funds and property acquired with federal funds from 2003 to 2010. The settlement, signed today by Ihlenfeld and previously executed by University officials, resolves False Claim Act violations that the United States was prepared to pursue. The agreement does not preclude criminal charges against individuals involved in the grant fraud.“Wheeling Jesuit University applied to the federal government and received many millions of dollars in funding but failed to follow the rules that came with the resources,” said U.S. Attorney Ihlenfeld. “Grantees must use federal money for the purpose for which the grant was given, and for nothing else. The rules are clear, and they exist to ensure that tax dollars are spent appropriately. Educational institutions, like everyone else, must be held accountable when the rules are broken. I’m hopeful that this agreement will allow the University to move forward and to continue to be an important and integral part of our community.”
The allegations arose as the result of an audit conducted by the National Aeronautics and Space Administration which led to the execution of a federal search warrant at University offices and elsewhere in February of 2012. The settlement also addresses the ownership of the National Technology Transfer Center building on the University’s campus. The building was constructed in accordance with a federal grant from the National Aeronautics and Space Administration. Pursuant to the settlement agreement, the University will retain ownership of the building.
The government was represented in the matter by Assistant U.S. Attorney Alan McGonigal.
Federal Way, Washington Man Sentenced to Nearly 20 Years in Prison for Directing Child Rape over the InternetRead the Press Release
A 66-year-old Federal Way, Washington man was sentenced today in U.S. District Court in Seattle to 238 months in prison and lifetime supervised release for receipt and possession of child pornography, announced U.S. Attorney Annette L. Hayes. ANDREW MARK SALAZAR pleaded guilty in April 2015, admitting that he directed women to perform sex acts on young children while he watched the rapes via webcam. The victims were impoverished children in the Philippines whose family members were paid for producing the images of sex assault. At sentencing U.S. District Judge James L. Robart said SALAZAR “bears responsibility for directing conduct by others to victimize these children… The conduct is beyond the limits of what society accepts and will not be tolerated.”
“This defendant thought he could hide behind a computer screen while he reached across the world and horrifically damaged young children,” said U.S. Attorney Annette L. Hayes. “Stopping this kind of child exploitation is a top priority whether the victims are here at home or half way around the world. I commend those who reported the crime to law enforcement, and the agents and officers of the U.S. Secret Service and Federal Way Police Department who fully investigated and put an end to this criminal conduct.”
According to records filed in the case, SALAZAR came to the attention of law enforcement in Western Washington when he brought his phone into a Sprint store to transfer pictures and data to a new phone. Technicians discovered images of children being sexually assaulted on the phone. A subsequent search of SALAZAR’s home revealed several devices with images of children from foreign countries being sexually assaulted while the defendant directed the conduct via webcam and chat sessions. SALAZAR made payment through Western Union and PayPal, and threatened to stop paying the women if they did not follow his directions.
SALAZAR has a prior conviction for rape of a 13-year-old girl in Texas in 1975.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case was investigated by the Federal Way Police Department and U.S. Secret Service. The case is being prosecuted by Cecelia Gregson. Ms. Gregson is a Senior Deputy King County prosecutor specially designated to prosecute child exploitation cases in federal court.
Fci Berlin Inmate Sentenced on Federal Weapon Possession ChargeRead the Press Release
CONCORD, N.H. – Dwayne Palmer, 37, an inmate at the Federal Correctional Institution in Berlin, New Hampshire, was sentenced in United States District Court for the District of New Hampshire on federal weapon possession charges, announced Acting United States Attorney Donald Feith. The Court imposed a term of six months’ imprisonment, to be served consecutive to Palmer’s current prison sentence.
During a routine search in August 2014, correctional officers discovered on Palmer’s person a six-inch piece of wood sharpened into a stabbing weapon.
This prosecution arose from an investigation by the Federal Correctional Institution in Berlin, New Hampshire, in collaboration with the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Nick Abramson and Georgiana L. Konesky.
Father and Son Sentenced for Illegal Deer TraffickingRead the Press Release
COLUMBUS, Ohio – Donald W. Wainwright Sr., 49, of Live Oak, Fla., was sentenced in U.S. District Court to 21 months in prison and a $125,000 fine for 12 charges related to violating the Lacey Act, one count of conspiracy and one count of wire fraud. His son, Donald W. Wainwright, Jr., 29, of Live Oak, Fla., was sentenced to four months of house arrest and three years of probation for eight charges related to violating the Lacey Act.
Carter Stewart, U.S. Attorney for the Southern District of Ohio, Gregory Jackson, Special Agent in Charge, United States Fish and Wildlife Service Office of Law Enforcement, Chief Scott Zody, Ohio Department of Natural Resources Division of Wildlife, Franklin County Prosecutor Ron O’Brien, the Florida Fish and Wildlife Conservation Commission and Georgia Department of Natural Resources announced the sentences handed down by U.S. District Chief Judge Edmund A. Sargus, Jr.
According to court documents, the co-conspirators trafficked in live white-tailed deer. Wainwright Sr. owned hunting preserves in Logan County, Ohio, and Live Oak, Florida; both preserves were named Valley View Whitetails. Wainwright Jr. was part-time resident and part-time operator of the site in Ohio.
Wainwright Sr. illegally shipped deer to Florida from Ohio and attempted to ship deer to Georgia from Ohio. The deer herds involved with these shipments were not certified to be free from chronic wasting disease, tuberculosis and brucellosis. Federal Law requires interstate shipment of deer to be certified to be disease free. As a result, deer herds in Florida were potentially exposed to these diseases. His attempted shipment to Georgia was intercepted on I-71 South, about 50 miles from the Ohio River, when Ohio Wildlife officers noticed deer noses and antlers inside a cargo trailer and pulled over a truck driven by Wainwright Sr.’s employees.
“Trophy-sized white-tailed deer can sell for hundreds of thousands of dollars apiece if the animals come from herds that have been certified by government agricultural officials to be free from disease,” U.S. Attorney Stewart said. “Farmers are intensely interested in the disease status of white-tailed deer herds because their diseases can be transmitted to cattle and humans with potentially fatal results.”
Wainwright Sr. placed federal identification tags from a certified deer that had previously died into the ear of uncertified deer they were selling. He then sold breeding services and semen from the deer to breeders around the United States.
The defendants also sold illegal white-tailed deer hunts at Valley View Whitetails of Ohio. They induced clients from around the country to hunt at Valley View Whitetails of Ohio – charging customers from $1,000 to $50,000 to kill deer inside his high fence preserve when Wainwright did not have a hunting preserve license. The customers then took the bucks back to their home states, including: Florida, Michigan, Alabama and Virginia.
"Chronic wasting disease can decimate wild deer and elk populations and we take egregious violations like this very seriously," said U.S. Fish and Wildlife Service Special Agent in Charge Gregory Jackson. "We would like to thank our law enforcement counterparts in Ohio, Florida and Georgia for sharing their expertise and resources to fully investigate this case.”
Wainwright Sr. pleaded guilty on February 27, 2015, to 12 charges related to violating the Lacey Act, one count of conspiracy and one count of wire fraud. He was also sentenced to 200 hours of community service to be served in a parks system and ordered to publish an article in The Deer Breeders Gazette.
Wainwright Jr. pleaded guilty on February 17, 2015, to eight charges related to violating the Lacey Act.
Under the Lacey Act, it is unlawful to import, export, transport, sell or purchase wildlife, fish or plants that were taken, possessed, transported or sold in violation of a state, federal or foreign law. When it was passed in 1900, the Lacey Act became the first federal law protecting wildlife.
U.S. Attorney Stewart commended the cooperative investigation by law enforcement, as well as Special Assistant United States Attorney Heather Robinson with the Franklin County Prosecutor’s Office and Assistant United States Attorneys Peter Glenn-Applegate and J. Michael Marous, who are representing the United States in this case.
District Man Sentenced to Six Years in Prison for Shooting Juvenile in Southwest WashingtonRead the Press Release
WASHINGTON – Adrian Wade, 20, of Washington, D.C., was sentenced today to a six-year prison term on charges stemming from an incident this year in which he fired a gun at four juveniles, hitting one of them, Acting U.S. Attorney Vincent H. Cohen, Jr. announced.
Wade pled guilty in May 2015, in the Superior Court of the District of Columbia, to two felony offenses of assault with a dangerous weapon and a third offense of possession of firearm during a crime of violence. He was sentenced by the Honorable Todd E. Edelman. Upon completion of his prison term, Wade will be placed on three years of supervised release.
According to the government’s evidence, on the afternoon of Feb. 7, 2015, Wade armed himself with a firearm, and encountered the four juveniles outside a neighborhood store on Half Street SW, between O and N Streets. During the encounter, Wade pointed the gun at the four victims, who immediately fled the area.
Shortly afterward, the four victims were walking along the 100 block of O Street SW. Wade again pointed the firearm at them, this time firing four shots at them. One shot struck a 16-year-old boy in the ankle. Wade then passed the gun to co-defendant JaJuan Smith, who fled the area and disposed of the weapon in a bush. The gun was recovered shortly after the shooting, and the spent shell casings recovered from the scene of the shooting matched the recovered firearm.
Smith, 18, of Washington, D.C., pled guilty to charges of acting as an accessory after the fact, possession of an unregistered firearm, and possession of unregistered ammunition. He was sentenced to two years in prison; the prison time was suspended on the condition he successfully complete 18 months of supervised probation.
In announcing the sentence, Acting U.S. Attorney Cohen commended the work of the officers, detectives, and others who worked on the case from the Metropolitan Police Department. He also expressed appreciation for the work of the District of Columbia Department of Forensic Sciences. Finally, he acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Tamika Garcia, and Assistant U.S. Attorneys William Schurmann and Vivien Cockburn, who investigated and prosecuted the case.
Detroit man sentenced to prison for federal heroin offenseRead the Press Release
Huntington, W.Va. – United States Attorney Booth Goodwin announced today that Lawrence Milton Works, 28, of Detroit, Michigan was sentenced to three years and ten months in federal prison for possession with intent to distribute a quantity of heroin.
In his April 2015 guilty plea, Works admitted that he possessed for distribution, approximately 80 grams of heroin, 117 30 mg oxycodone pills, and approximately 3.3 grams of cocaine at his apartment in East Pea Ridge, Huntington for distribution. Works also had over $5,700.00 in drug proceeds and two firearms inside the apartment.
Today’s sentence was imposed by Chief United States District Court Judge Robert C. Chambers.
The investigation was conducted by the Huntington Violent Crimes and Drug Task Force. Assistant United States Attorney Monica D. Coleman 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.
Detroit heroin dealer sentenced to eleven years in federal prisonRead the Press Release
HUNTINGTON, W.Va. – U.S. Attorney Booth Goodwin announced that Antonio Sanjuan Shadwick, also known as “Eastside,” of Detroit, Michigan, was sentenced to 11 years in federal prison after being convicted of conspiracy to distribution 100 or more grams of heroin. The sentence was imposed by Chief United States District Judge Robert C. Chambers in Huntington.
Shadwick, 32, admitted that from April 2013 through April 4, 2014, he worked with his source to distribute approximately 50 grams of heroin per week to individuals in and around Cabell County. Shadwick was arrested on January 8, 2015, and was found in possession of a loaded handgun, heroin, and crack cocaine. Shadwick admitted that over the course of the conspiracy, he distributed between 1 and 3 kilograms of heroin.
The investigation was conducted by the Huntington FBI Drug Task Force and the Huntington Police Department’s Special Emphasis Unit. Assistant United States Attorneys Haley Bunn and Greg McVey 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. This case was also brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Defendant Sentenced on Federal Firearm ChargeRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces that Jason Rodney Clay of Gulf Shores was sentenced, following an October 2014 guilty plea to a charge of being a prohibited person in possession of a firearm. Clay was previously convicted in Ohio of Breaking & Entering, Theft and Criminal Damaging in 2002; and, Burglary, Theft, Misuse of Credit Cards and Forgery in 2009. Clay was also previously convicted in North Carolina of Possession of Cocaine in 2005; and, four counts of Larceny of Motor Vehicle and Breaking & Entering a Motor Vehicle and Felony Larceny in 2007. By virtue of these convictions Clay is prohibited from possessing firearms or ammunition.
On July 28, 2014, in the early morning hours, Gulf Shores Police Officer Seth Hedley was patrolling West Lagoon Avenue when he noticed Clay wearing dark clothing and looking into several vehicles. Officer Hedley requested backup, and then made contact with Clay. When asked if he had any weapons, Clay said no. During a pat down search, a loaded Springfield XD 9 mm semi-auto handgun was found tucked in his waistband in the small of his back. Clay said that he found the firearm back by the stop sign.
On August 2, 2014, an individual called the Gulf Shores Police Department to report that his vehicle had been broken into while vacationing at a house on West Lagoon Avenue. The individual was already on his way back to Oklahoma, when he noticed his firearm was missing. He said his firearm was pushed down between the seat and the console, but there was no forced entry into the truck and it may have been left unlocked. He described his firearm by make, model and serial number, and the Officer taking the report recognized the description as the firearm that had been recovered earlier in the week from Clay.
Possession of a firearm or ammunition by a previously convicted felon is a violation of Title 18, United States Code Section 922(g)(1). United States District Court Judge Callie V.S. Granade imposed a guideline sentence of 113 months imprisonment, to be followed by 3 years of supervised release.
This case was referred for prosecution by Federal Bureau of Investigation Task Force Officer Joseph Sullivan, with assistance from the Gulf Shores Police Department.
Danbury Resident Admits Stealing Nearly 300K from InvestorsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ALEXANDER BERGEN, 22, of Danbury, waived his right to indictment and pleaded guilty today in Hartford federal court to stealing approximately $300,000 from individuals who invested in his Internet business.
According to court documents and statements made in court, BERGEN operated CT Wholesale, a company that sold electronic equipment and other items by buying the product for a cheaper price and then reselling those products to the customer at a higher price. Beginning in approximately 2013, BERGEN began to accept investment funds from investors who were promised a return on their investments. BERGEN represented to the investors that he would use their investment funds solely to purchase products for resale to his customers and that the investors would receive their principal investment back with a profit in a specified period of time. In some cases, BERGEN entered into written investment agreements with investors in which he expressly represented that the investment funds provided by the investor would be used solely to purchase products.
BERGEN received a total of more than $300,000 from approximately 10 investors. Despite representing to the investors that all of their funds would be used solely to purchase products for resale by CT Wholesale, BERGEN did not use these funds solely to purchase products. In 2013, BERGEN used approximately $150,000 of the investors’ money to pay for his personal credit card bills which included personal expenses for fine dining, travel, and to shop at high-end retail stores.
BERGEN returned less than $40,000 in funds to his investors. Collectively, the investors lost approximately $286,000 of the investment funds they provided to BERGEN.
BERGEN pleaded guilty to one count of interstate transportation of money obtained by fraud. He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on October 14, 2015, at which time he faces a maximum term of imprisonment of 10 years, a maximum fine of more than $500,000 and an order of restitution.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Senior Litigation Counsel Richard J. Schechter.
Corinth Woman Sentenced to Two Years on Federal Drug ChargeRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Krystal Bell, 29, of Corinth, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to two years in prison and three years of supervised release for possession with intent to distribute bath salts. She was also ordered to pay a $1,000 fine. She pleaded guilty to the charge on February 13, 2015.
Court records reveal that on May 30, 2014, the defendant went to the U.S. Post Office in St. Albans, Maine and picked up a package mailed from China. As she left the post office, she was stopped by law enforcement agents conducting surveillance at the post office who had reason to believe the package contained bath salts. Bell told the agents that the package contained Alpha-PVP, that she agreed to pick up the drugs for another person, and that she intended to deliver the drugs to the other person. Alpha-PVP is a schedule I controlled substance and is among a group of illegal, street drugs commonly referred to as bath salts.
The case was investigated by the U.S. Postal Inspection Service and the Maine Drug Enforcement Agency.
Centralia Meth Dealers Enter Guilty PleasRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Michael A. Flanagan, 43, and Dusty Jo Gambill, 40, both of Centralia, Illinois, pled guilty Friday, July 31, 2015, to an 11-count indictment returned by a Federal Grand Jury against them and others. All charges relate to the production and distribution of methamphetamine. Both Flanagan and Gambill were charged in Count 1 of the indictment with Conspiracy to Manufacture and Distribute Methamphetamine from February 28, 2014, through October 1, 2014, in Clinton and Marion Counties. Gambill was also charged in Count 7 of the indictment with Possession of a Listed Chemical (Pseudoephedrine) Knowing or Having Reasonable Cause to Believe that It Would Be Used to Manufacture Methamphetamine.
Count 1 carries a penalty of not less than 5 years, up to a maximum of 40 years in federal prison, a $5 million fine, and at least 4 years’ supervised release. Count 7 carries a maximum penalty of 20 years in prison, a $1 million fine, and not less than 3 years’ supervised release. Both counts require an assessment of $100. There is no parole in the federal system. Sentencing is scheduled November 6, 2015, for Gambill, and November 13, 2015, for Flanagan.
Information leading to the charges against Flanagan and Gambill was obtained in an investigation conducted by the FBI, the Marion County Sheriff’s Office, and the Clinton County Sheriff’s Department, assisted by the Illinois State Police Methamphetamine Response Team, and the Centralia Police Department. The case is being handled by Assistant United States Attorney Kit Morrissey.
Capitol Heights Postal Worker Indicted in Disability Fraud SchemeRead the Press Release
Greenbelt, Maryland – A federal grand jury indicted Leroy T. King, Jr., age 54, of Bryans Road, Maryland, today on charges arising from a scheme to fraudulently obtain at least $60,000 in disability travel benefits.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General; and Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
According to the eight count indictment, King was a U.S. Postal Service city carrier at the Capitol Heights, Maryland post office. On September 24, 2004, King was injured, which qualified him for compensation benefits provided to federal government employees for disability due to personal injury sustained while in the performance of duty. King returned to work in 2008, but remained eligible to receive disability benefits for medical benefits and for travel to and from medical treatment for that injury.
The indictment alleges that from November 2009 to March 2015, King repeatedly sought and received reimbursement for travel expenses allegedly incurred in connection with trips to and from medical treatment that King claimed had occurred, when, in fact, no medical treatment had been provided on the dates for which King sought reimbursement. King allegedly mailed reports to the Department of Labor’s Office of Worker’s Compensation Programs (OWCP) falsely stating that King had driven his vehicle to and from the Southern Maryland Processing and Distribution Center in Capital Heights Maryland, for purposes of medical treatment.
The indictment alleges that King fraudulently obtained at least $60,000 from OWCP as reimbursement.
King faces a maximum sentence of 20 years in prison for mail fraud; and five years in prison for making false statements. No court appearance has been scheduled for King.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the Department of Labor - OIG and U.S. Postal Service - OIG for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Hollis Weisman and Special Assistant United States Attorney Nicholas Patterson, who are prosecuting the case.
Capitol Heights Man Exiled to 17 Years in Prison for Gun and Drug OffensesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Jay Maurice Tharps, age 33, of Capitol Heights, Maryland, today to 17 years in prison followed by three years of supervised release for being a felon in possession of a firearm and ammunition, possession with intent to distribute controlled substances, and possession of a firearm in furtherance of a drug trafficking crime. Judge Grimm found that Tharps was a career offender based on three drug and gun convictions.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief Mark A. Magaw of the Prince George’s County Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks.
According to his plea agreement, on April 11, 2013, Prince George’s County police officers executed a search warrant at Tharps’ residence and seized a loaded handgun with an obliterated serial number; a loaded semi-automatic pistol with an obliterated serial number; another loaded semi-automatic pistol that had been reported stolen; a loaded revolver; a semi-automatic rifle which was found near a high capacity loaded magazine; numerous ammunition; 84 grams of marijuana; and 15 grams of cocaine. Prior to this time, Tharps had been convicted of three felonies for drug and gun violations, and was thus prohibited from possessing firearms and ammunition.
United States Attorney Rod J. Rosenstein commended the ATF, Prince George’s County Police Department and Prince George’s County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Thomas M. Sullivan, who prosecuted the case.
Business Owner Sentenced for Fraudulently Obtaining More than $2.6 Million in Government ContractsRead the Press Release
Greenbelt, Maryland - U.S. District Judge Deborah K. Chasanow sentenced Yogesh K. Patel, age 48, of Gaithersburg, Maryland, today to 21 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with a scheme to fraudulently obtain more than $2.6 million in federal government contracts through a Small Business Administration (SBA) program designed to assist disadvantaged businesses. Judge Chasanow also entered an order that Patel forfeit $554,541.07.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations; and Mary L. Kendall, Deputy Inspector General, Department of the Interior.
According to his plea agreement and court documents, Patel owned 91% of United Native Technologies, Inc. (UNTI), which purported to perform information technology services to the government and commercial clients. In 2005, Patel applied for and was granted certification as a socially and economically disadvantaged owned business under SBA’s program. In addition to a broad scope of assistance from SBA, participants in the program can receive sole source government contracts that are reserved for socially disadvantaged owned companies.
In 2007, Patel met co-defendant Wesley Burnett at a business conference in Costa Rica. Burnett, who was not a member of any economically or socially disadvantaged group, had experience constructing and maintaining barriers at military and government installations. Patel and Burnett agreed that they would use UNTI to bid on SBA set aside contracts for barrier-related work. Burnett would perform the work under the contracts and would pay Patel 4.5 percent of the value of the contracts. In preparing a bid for a contact at Andrews Air Force, which was ultimately awarded to UNTI, Burnett and Patel exchanged emails in June 2011 in which they made statements indicating that they knew this arrangement was illegal.
In 2011, Patel met N.P. They agreed to a fraudulent pass-thru arrangement similar to the one Patel had entered into with Burnett.
From October 2010 to July 2013, UNTI was fraudulently awarded $2,682,430 in set-aside U.S. government contracts.
In 2011, 2012 and 2013, Patel falsely certified to the SBA that no outside entity or individual provided financial support to UNTI when in fact Burnett and N.P. provided financial support to UNTI; and that Patel ran UNTI full-time, when in fact he did not because he was receiving disability compensation from the Social Security Administration in each of those years.
From November 2012 to October 2013, Patel received $973,407.37 in government funds under the fraudulently obtained set-aside contracts. Patel kept a portion of these funds and turned the majority of them over to Burnett. Prior to November 2012, payments under contracts went to Burnett, who provided a portion of the funds to Patel.
Wesley Burnett, age 46, of Hermosa Beach, California, previously pleaded guilty to his role in the scheme. Burnett was sentenced to 42 months in prison and ordered to forfeit $694,893.99.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein praised the SBA OIG, U.S. Air Force Office of Special Investigations, and the Department of the Interior, OIG for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Leo J. Wise and Sean R. Delaney, who prosecuted the case.
Business Owner Pleads Guilty to $493,000 Employment Tax SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., business owner pleaded guilty in federal court today to a scheme to defraud the government by failing to pay over to the Internal Revenue Service more than $260,000 that he collected from his employees in employment taxes. Along with more than $232,000 that he allegedly failed to pay as his employer portion of the taxes, the total loss to the government was more than $493,000.
Joseph Patrick Balano, 54, of Kansas City, Mo., pleaded guilty before U.S. District Judge Gary A. Fenner to the charge contained in a Jan. 7, 2014, federal indictment.
Balano was the owner of Global Employment Group, Inc., doing business as Staffing Connections (Global Employment) in Grandview, Mo., and Kansas City, Mo. Two earlier businesses – Labor Connections and Labor Connections II – were dissolved in 2006, ostensibly because of employment tax issues. In their place, Balano formed Global Employment in December 2006. Employees who had been working for Labor Connections and Labor Connections II began working for Global Employment. Business operations stayed in the same location.
By pleading guilty today, Balano admitted that he withheld employment taxes from his employees, but instead of paying over those taxes to the government, Balano kept most of those taxes for his own personal use. Balano used the money to finance his own personal expenses and expenses for family members, including gambling, mortgage payments (residence and lake house) and car payments.
The total amount withheld from employees but not paid to the IRS from April 2008 to April 2009 was $260,770. In addition, Balano failed to pay the employer portion of the taxes to the IRS as well, in the amount of $232,672. The total amount of loss to the government was $493,443.
Under federal statutes, Balano is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $10,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by IRS-Criminal Investigation.
Berkeley County man sentenced for unlawful possession of nineteen firearmsRead the Press Release
MARTINSBURG, WEST VIRGINIA – Timothy James Fisher, 48, of Bunker Hill, West Virginia, was sentenced today to 48 months in prison for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
In response to reports that a patient at a local hospital had suffered a gunshot wound, the Berkeley County Sheriff’s Office searched Fisher’s house and discovered nineteen firearms. Fisher was previously convicted of the felony offense of “Second Degree Murder” in the Circuit Court of Anne Arundel County, Maryland in 1996. As a result of that conviction, Fisher is prohibited from possessing the aforementioned firearms.
Fisher pled guilty in April 2015 to one count of “Felon in Possession of Firearms.”
Assistant U.S. Attorney Paul Camilletti prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Berkeley County Sheriff’s Office led the investigation.
Chief U.S. District Judge Gina M. Groh presided.
Bay Area Company Agrees to Pay $450,000 to Settle Claims of Failing to Maintain Adequate Records of Controlled Substance UseRead the Press Release
SAN FRANCISO – Sterigenics International LLC and its parent, Sterigenics U.S., LLC, agreed to pay $450,000 to settle allegations by the U.S. Department of Justice that the companies failed to keep and maintain adequate records pertaining to controlled substances, announced United States Attorney Melinda Haag and U.S. Drug Enforcement Administration Acting Special Agent in Charge Bruce Balzano.
Sterigenics is registered as a manufacturer with the DEA, with current authorization to handle certain substances under the Controlled Substances Act, 21 U.S.C. § 801. Specifically, Sterigenics has current authorization to handle certain Schedules II, III, III, and IV controlled substances. In addition, Sterigenics has been approved for a manufacturing license at its Hayward, Calif., location since 2007 and provides contract sterilization for the pharmaceutical, medical device, and food industries at its Hayward plant. In the agreement signed by the Justice Department last Friday, Sterigenics acknowledged it had an obligation to “keep and maintain” records related to its receipt, manufacturing, and distribution of controlled substances in connection with its operations at its Hayward plant. According to the settlement agreement, the Drug Enforcement Administration conducted an investigation and concluded that between April 4, 2011, and April 4, 2013, Sterigenics failed to comply with the Controlled Substances Act in at least 156 instances. The alleged violations included a wide range of documentary deficiencies including the failure to record or maintain adequate inventory records and the failure to record or maintain records of the receipt, storage, or shipment of controlled substances. According to the terms of the agreement, Sterigenics will pay the government $450,000 to resolve all civil and administrative claims related to the alleged recordkeeping violations identified in the investigation.
Assistant U.S. Attorney Jonathan U. Lee handled this matter with the assistance of paralegals Wilson Wong and Cheryl Wagerman.
Bank Robber Sentenced to 96 Months in Federal PrisonRead the Press Release
Spokane—Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Dane Edward Andrus, age 42, of Osburn, Idaho, was sentenced for Bank Robbery. United States District Court Judge Stanley A. Bastian sentenced Andrus to a 96 month term of imprisonment, to be followed by a five year term of court supervision upon release from federal prison.
According to information disclosed during the court proceedings, on January 23, 2015, Andrus entered the US Bank located on Nob Hill in Yakima, Washington. He was wearing a ski mask and carrying a pistol. Andrus pointed the pistol at a bank teller, demanded money from the teller, and then fled in a white van. Yakima Police Officers quickly responded to the scene and were soon thereafter following Andrus’ van. Andrus led police on a high speed chase through downtown Yakima and onto Interstate 82, stopping only after law enforcement officers used spike strips to disable the van. Officers arrested Andrus, discovered the pistol, and recovered all of the money he stole from the bank.
Michael C. Ormsby said, “Armed bank robbery is a gravely serious violent crime. As demonstrated in this case, bank robberies will be swiftly investigated, aggressively prosecuted and severely punished.”
This case was investigated by the Federal Bureau of Investigation and the Yakima Police Department. The case was prosecuted by Benjamin D. Seal, an Assistant United States Attorney for the Eastern District of Washington.
Bank EKI Genossenschaft Reaches Resolution under Justice Department's Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Bank EKI Genossenschaft (Bank EKI) has reached a resolution under the department’s Swiss Bank Program.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
- Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Bank EKI agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute Bank EKI for tax-related criminal offenses.
Bank EKI was founded in 1852 and has its headquarters in the tourist resort town of Interlaken, Switzerland. It also operates small branch offices in Bönigen, Wilderswil, Grindelwald and Lauterbrunnen, Switzerland.
Bank EKI opened, serviced and profited from accounts for U.S. clients with the knowledge that many were likely not complying with their tax obligations. Many of the U.S.-related accounts were transferred from other Swiss financial institutions that were closing such accounts, and Bank EKI knew or had reason to know that a portion of these accounts were likely undeclared.
Bank EKI provided traditional Swiss banking services that it knew could assist, and that did in fact assist, certain U.S. taxpayers in concealing their Bank EKI accounts from the Internal Revenue Service (IRS). One such service was hold mail: for a fee, Bank EKI would hold all mail correspondence for a particular client at the bank. By accepting and maintaining such accounts, Bank EKI thus ensured that documents reflecting the existence of the accounts remained outside the United States, beyond the reach of U.S. tax authorities and protected by Swiss banking secrecy laws.
Due in part to the means provided by Bank EKI and its personnel, and with the knowledge that Swiss banking secrecy laws would prevent Bank EKI from disclosing their identities to the IRS, many of the U.S. clients of Bank EKI filed false and fraudulent U.S. Individual Income Tax Returns, or IRS Forms 1040, that failed to report their respective interests in their undeclared accounts and the related income. Moreover, many of the U.S. clients of Bank EKI also failed to file and otherwise report their undeclared accounts on Reports of Foreign Bank and Financial Accounts (FBARs).
Bank EKI did not sufficiently implement an effective system of supervisory policies, procedures or controls over its relationship managers to increase its U.S.-related clients’ tax compliance. Moreover, Bank EKI’s relationship managers too readily accepted representations and directions from the accountholders without adequately investigating questionable information.
Since Aug. 1, 2008, Bank EKI held a total of 64 U.S.-related accounts with just over $21 million in aggregate assets. Bank EKI will pay a penalty of $400,000.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS, and in particular, IRS-Criminal Investigation and the IRS Large Business and International Division for their substantial assistance. Ciraolo also thanked Dara B. Oliphant, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Atwater Woman Sentenced for Student Aid Fraud and Identity TheftRead the Press Release
FRESNO, Calif. — Sherise Lanelle Woolridge, 33, of Atwater, was sentenced today for mail fraud and aggravated identity theft for her role in a student aid fraud scheme, United States Attorney Benjamin B. Wagner announced. United States District Judge Lawrence J. O’Neill sentenced her to four and a half years in prison and ordered her to pay $347,732 in restitution.
According to court documents, Woolridge participated in a scheme to defraud the United States Department of Education of student aid grants and loans. She submitted false financial aid applications to Axia College at the University of Phoenix and Capella University on behalf of students who did not intend to attend either school. She also used stolen or wrongfully obtained personal identifying information of another person to apply for college financial aid. As a result of the scheme to defraud, more than $370,000 in grants and loans were disbursed.
Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. It is not, as Ms. Woolridge just found out, a personal slush fund,” said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Western Regional Office. “I’m proud of the work of OIG special agents and our law enforcement colleagues for holding Ms. Woolridge accountable for her criminal actions. Her sentence should serve as a warning to anyone who intentionally steals or misappropriates Federal student aid dollars: you will be caught and prosecuted to the fullest extent of the law.”
This case is the result of the U.S. Department of Education Office of Inspector General’s criminal investigations aimed at shutting down fraudulent schemes that seek to exploit federal student aid programs. The U.S. Postal Inspection Service assisted in the investigation. United States Attorney Mark J. McKeon is prosecuting the case.
Atlanta man sentenced to federal prison for drug offenseRead the Press Release
HUNTINGTON, W.Va. – An Atlanta man who was caught with crack cocaine and a loaded firearm in Huntington in 2014 was sentenced today to ten years in federal prison, announced U.S. Attorney Booth Goodwin. Reginald Wendell Weems, 33, previously pleaded guilty in federal court in Huntington in April of 2015 to possession with intent to distribute cocaine base.
On September 15, 2014, agents with the DEA Task Force received a tip that Weems was in the 1400 block of 15th Street in Huntington selling crack cocaine. Agents stopped a car in which Weems was a passenger. When agents searched the car, they found over 35 grams of crack and a loaded 9mm pistol. Weems admitted that both the crack cocaine and the gun were his. Weems also admitted that he distributed crack cocaine in the Huntington area.
The United States Drug Enforcement Administration Task Force conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
Armed Cocaine and Crack Cocaine Dealer Sentenced to 15 Years in PrisonRead the Press Release
CHARLOTTE, N.C. B Today, Chief Judge Frank D. Whitney sentenced Davion Junior Gales, age 29, of West Jefferson, North Carolina, to 15 years in prison, followed by five years of supervised release, for conspiracy to distribute and to possess with intent to distribute cocaine and crack cocaine, money laundering conspiracy, and possession of a firearm in furtherance of drug trafficking, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.
Acting U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas; Dewey “Craig” Chillcott, Acting Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD).
According to filed documents and statements made in court, beginning some time in or about 2013 to December 2013, Gales was part of a drug conspiracy that trafficked cocaine and crack cocaine in Mecklenburg County and elsewhere. Court records show that Gales was involved in numerous drug transactions involving multiple kilograms of cocaine. For example, according to court records, on December 2, 2013, Gales paid $75,020 in cash as part of a purchase of approximately $500,000 worth of cocaine. Two days later, on December 4, 2013, Gales provided another $85,000 in cash toward the cocaine purchase, and another $50,005 the following day. Court records show that during one of the drug transactions, Gales possessed a firearm. Court records also show that Gales used drug proceeds to buy expensive vehicles, among other things.
On December 9, 2013, Gales was arrested and law enforcement seized more than two kilograms of cocaine, a firearm, and approximately $118,000 in cash. According to court records, Gales was trafficking some of his cocaine as crack cocaine.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the conviction of more than 35 defendants on cocaine and crack cocaine trafficking, money laundering, and firearms charges. OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Gales was initially charged by complaint on December 4, 2013, indicted by a federal grand jury on December 19, 2013. He has been in federal custody since his arrest on December 9, 2013.
Acting U.S. Attorney Rose commended HSI, ATF, and CMPD for the investigation leading to the successful prosecution of Gales. Assistant U.S. Attorney Steven R. Kaufman is handling the continuing prosecution of this OCDETF operation.
Anderson Man Pleads Guilty to Bank RobberyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Anderson, Mo., man pleaded guilty in federal court today to robbing the Arvest Bank in Anderson.
Perry D. Abercrombie, 58, of Anderson, pleaded guilty before U.S. Magistrate Judge David P. Rush to the charge contained in a June 16, 2015, federal indictment.
By pleading guilty today, Abercrombie admitted to robbing Arvest Bank, 607 N. Highway 71, Anderson, on May 18, 2015.
According to court documents, Abercrombie passed a handwritten note to a bank teller, indicating that he was robbing the bank and had a weapon. The teller retrieved money from her drawer and placed the money on the counter. Abercrombie took the money and the note and put them in his pocket, then left the bank.
A Missouri Highway Patrol trooper notified deputies from the McDonald County Sheriff’s Department that he had seen a pickup in the vicinity of the bank earlier that day. The trooper thought the pickup was suspicious and requested registration information for the vehicle to ensure there were no alerts for the driver or the vehicle. Deputies identified Abercrombie as the vehicle’s owner and retrieved his information, including a photograph. They showed Abercrombie’s driver’s license photo to bank employees, who said he resembled the man who had robbed the bank.
After identifying Abercrombie as a suspect in the bank robbery, a deputy drove to Abercrombie’s residence. After a short time, Abercrombie arrived at the residence. He was questioned by law enforcement officers and eventually admitted that he robbed the bank. He showed officers a cash box in his bedroom where he had put the money stolen from the bank.
Under federal statutes, Abercrombie is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the McDonald County, Mo., Sheriff’s Department and the FBI.
Sunday 2 August 2015
Clearfield Woman Pleads Guilty to Mail, Wire Fraud and Identity Theft in Embezzlement Schemes Involving Two EmployersRead the Press Release
SALT LAKE CITY – Teri Ann Jarvis, age 41, of Clearfield, charged in a federal indictment returned in February with mail fraud, aggravated identity theft, and wire fraud in connection with embezzlement schemes involving two employers, will serve 42 months in federal prison. Jarvis pleaded guilty Wednesday afternoon to one count of mail fraud, one count of wire fraud, and one count of aggravated identity theft.
U.S. District Court Judge Dale A. Kimball imposed the sentence. Kimball ordered Jarvis to pay $846,738.88 to Positive Power, LLC, and $42,958.04 to Bronco Fence Company. She will be allowed to self-surrender in January 2016 to begin serving her sentence.
According to the indictment, Jarvis was an employee of Positive Power, LLC, from October 2006 until around September 2013. Positive Power is based in Ogden and provides electrical contracting services. Jarvis’ duties at the company included assisting with the management of company bank accounts, credit cards, collectables, payables and other financial records. She was not authorized to sign checks or credit cards.
Jarvis was an employee of Bronco Fence Company in Kaysville from about March 2014 through about October 2014. The company specializes in fence, deck, and railing construction. Jarvis’ responsibilities at Bronco Fence included assisting with the management of the office, coordinating with a merchant services company for payment processing, and making accounting entries.
As a part of the plea agreement reached with federal prosecutors, Jarvis admitted that she devised a scheme to defraud her employers to get money. While working for Positive Power, she admitted she forged checks made payable to herself and to pay her mortgage, car payment, and personal credit card payment.
She also admitted that she used the alias Teri James in her employment application with Bronco Fence to conceal her identity and avoid detection of her previous embezzlement from Positive Power. While working for Bronco Fence, she provided false refund information to the merchant services company used by the business so that the merchant servicer processed the false refunds and transferred the money to her personal bank account. She admitted she offset the money she embezzled from Bronco Fence as “material expenses” in the company records. She admitted altering company financial accounts and records at both companies to conceal her embezzlement of $889,696.92 from the businesses.
“This unscrupulous defendant thought she had figured out a clever scheme to defraud her employers, steal company funds, and thwart the IRS,” said John G. Collins, IRS Criminal Investigation Special Agent in Charge of Utah. “IRS Criminal Investigation has made investigating identity theft a top priority and, together with our partners at the U.S. Attorney’s Office, will hold those who engage in similar behavior fully accountable.”
The case is being investigated by IRS Criminal Investigation special agents, the Weber County Sheriff’s Office, and the Kaysville Police Department and prosecuted by Assistant U.S. Attorneys in the U.S. Attorney’s Office in Salt Lake City.
Friday 31 July 2015
Washington, D.C. and Upper Marlboro Men Each Sentenced to 20 Years in Prison for Armored Car Robbery in Which Employee was ShotRead the Press Release
Greenbelt, Maryland - U.S. District Judge Deborah K. Chasanow today sentenced Keith Willie Reed, age 26, of Washington, D.C., and Tobias Richard Dyer, age 23, of Upper Marlboro, Maryland, each to 20 years in prison followed by 5 years of supervised release, after they pleaded guilty to robbery and interstate transportation of stolen vehicles, in connection with an armored car robbery.
The sentences and guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; the members of the FBI Cross Border Task Force - Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Assistant Director in Charge Andrew G. McCabe of the Federal Bureau of Investigation - Washington Field Office; Chief Mark A. Magaw of the Prince George’s County Police Department; and Chief Cathy L. Lanier of the Metropolitan Police Department.
According to their plea agreements and court documents, Reed, Dyer and others robbed an armored car employee on December 11, 2012, as the employee was carrying money from a business establishment to the armored transport vehicle. Specifically, on December 11, 2012, Reed, Dyer, and other perpetrators stole a 2012 Nissan Altima, and a 2002 Dodge Ram truck. Reed, Dyer other perpetrators transported the Altima from the District of Columbia to Maryland and Virginia. The Dodge Ram was transported by Reed, Dyer, and other perpetrators from Maryland to the District of Columbia.
Reed, Dyer and other conspirators traveled in the stolen Nissan Altima to the 6300 block of Livingston Road in Oxon Hill, Maryland, armed with firearms, in order to rob an armored car employee. The robbers exited the Nissan Altima and shot the employee while he was carrying $2,350 in cash from a store to the armored truck parked outside the store. The robbers took the bag containing the money being carried by the employee, and stole the employee’s gun. The robbers then got back into the stolen Nissan Altima and drove away.
The armored car employee was shot, sustaining life-threatening bodily injury.
Prior to their guilty pleas in Maryland, Reed and Dyer were convicted of similar crimes in a federal case in the Eastern District of Virginia and were each sentenced to 60 years in prison. The Maryland sentence is concurrent to the Virginia sentence.
United States Attorney Rod J. Rosenstein praised the FBI Baltimore and Washington Field Offices, the Prince George’s County and, the Metropolitan Police Department and the Takoma Park Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Special Assistant U.S. Attorney Matthew L. Paeffgen, who prosecuted the case.
Walkersville Man Sentenced to Two Years in Prison for Distribution of MethyloneRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Bradley Newman, age 30, of Walkersville, Maryland today to two years in prison, followed by three years of supervised release, for distribution and possession with intent to distribute methylone.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Special Agent in Charge Shawn Ellerman of the Drug Enforcement Administration, Baltimore District Office; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Frederick Police Department Chief Edward G. Hargis.
According to his plea agreement, on four occasions between October 2012 and January 2013, Bradley Newman distributed methylone to a confidential source, for profit. Each transaction was recorded by audio, video, or both. The substances obtained from Newman were tested and found to contain methylone and Newman admitted that he was selling a controlled substance.
Specifically, on October 11, 2012, Newman sold approximately 53 grams of methylone to the confidential source for $2,000, which was paid to Newman the following day. Subsequently, on November 1, 2012, Newman sold approximately 54 grams of methylone to the confidential source for $2,000; on December 6, 2012, Newman sold approximately 83 grams of methylone to the confidential source for $3,000; and on January 31, 2013, Newman sold approximately 85 grams of methylone to the confidential source for $3,000 (divided into two payments of $1,500 each). In all, Newman possessed with intent to distribute approximately 275 grams of methylone.
United States Attorney Rod J. Rosenstein praised DEA, HSI Baltimore and the Frederick Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Matthew C. Sullivan and Robert R. Harding, who prosecuted this Organized Crime Drug Enforcement Task Force case.
United States Files Complaint against Three Wisconsin Dietary Supplement ManufacturersRead the Press Release
The Department of Justice filed a complaint today alleging that three Wisconsin companies that manufacture dietary supplements were not complying with the U.S. Food and Drug Administration’s (FDA’s) current good manufacturing practices and were misbranding their products. The complaint was filed in the Eastern District of Wisconsin against Atrium Inc., Aspen Group Inc., Nutri-Pak of Wisconsin Inc., and the owners of the three firms, James F. Sommers and Roberta A. Sommers. The companies, located in Wautoma, Wisconsin, sell dietary supplements to retail stores, healthcare professionals and directly to consumers via the Internet.
The complaint alleged that the firms were violating the federal Food, Drug and Cosmetic Act (FDCA) by failing to comply with current good manufacturing practices that, among other things, require manufacturers to establish specifications to ensure the identity and potency of the ingredients in dietary supplements. The complaint also alleged that the firms’ products were misbranded because they failed to identify the part of the plant from which the ingredients were derived, did not list the number of servings per container and failed to identify the serving size.
Supplements manufactured by the firms included Atrium brands Chole-Sterin, Di-Acid Stim, Ocu-Comp and Super-Flex; Aspen brand Flexile-Plus; and Nutri-Pak brands Glucobiotic Supreme and Ocu-Comp.
“Makers of dietary supplements who do not follow the FDA’s regulations put the public at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the FDA to try to make sure that consumers are ingesting safe products and are getting what they paid for.”
“This case and the remedial actions required by the consent decree reflect the continuing focus of our office and the Justice Department generally in safeguarding and promoting the health and well-being of our people,” said U.S. Attorney James L. Santelle of the Eastern District of Wisconsin. “The corrections that these companies are required to accomplish along with oversight and inspection of them, will ensure compliance with the law and responsible sales to consumers.”
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from violating the FDCA. The consent decree requires the dietary supplement manufacturer to cease all operations and requires that if the defendants wish to resume manufacturing dietary supplements in the future, the FDA first must determine that their manufacturing practices have come into compliance with the law. The proposed consent decree is awaiting approval by the court.
The case is being handled by Trial Attorney Patrick Jasperse of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Susan M. Knepel of the Eastern District of Wisconsin, with assistance from Deeona Gaskin of the FDA’s Office of the Chief Counsel.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Two Plead Guilty to Multi-State Heroin Conspiracy, Now Face Decades in Federal PrisonRead the Press Release
U.S. Attorney Kenneth A. Polite announced that STANLEY FULTON, age 39, of New Orleans, and JASON PAYNE, age 37, of Youngstown, Ohio, yesterday became the last of nine defendants under a Superseding Indictment to plead guilty to a multi-state conspiracy to distribute one kilogram or more of heroin.
According to court documents, Drug Enforcement Administration (“DEA”) agents, after conducting a series of court-authorized wire intercepts on the cellular phones of New Orleans area heroin dealers, identified co-defendant FREDRICK DOUGLAS BROOKS III as a Houston-based heroin trafficker who was distributing kilogram quantities of heroin at a time to FULTON in New Orleans and PAYNE in Youngstown, using narcotics and bulk cash couriers who have already pled guilty in the case.
U.S. District Judge Carl J. Barbier scheduled sentencing for October 29, 2015. FULTON faces a sentence of twenty years to life, and PAYNE faces a sentence of ten years to life.
U.S. Attorney Polite praised the work of the DEA New Orleans Police Department High-Intensity Drug Trafficking Area group, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives in investigating this matter with the assistance of the St. Tammany Sheriff’s Office, the St. Bernard Sheriff’s Office, and the Louisiana State Police. Assistant United States Attorneys Michael B. Redmann and Mark A. Miller were in charge of the prosecution.
Two Brothers Plead Guilty to Food Stamp FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Bandar Alsaidi, 28, and his brother, Talal Alsaidi, 31, of both of Buffalo NY, pleaded guilty to unauthorized use of food stamp benefits before U.S. District Judge Richard J. Arcara. The charge carries a maximum sentence of 20 years in prison, a fine of $250,000, or both.Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that the defendants participated in the operation of a business known as Big Boys Food Market located at 1129 East Ferry Street in Buffalo. On November 18, 2011, Bandar Alsaidi signed an application to accept food stamps as the sole proprietor of Big Boys. The store was authorized to accept food stamps beginning on January 18, 2012.
Between April 2012 and May 2013, the defendants, and others, knowingly purchased food stamp benefits for less than their full value for cash from eligible beneficiaries. Retailers are prohibited from exchanging cash for food stamps. During this time period, the defendants each exchanged approximately $147,658.28 of food stamp benefits for cash.
The plea is the result of an investigation by the United States Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires Jr. and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy.
Sentencing is scheduled for November 3, 2015 at 12:30 p.m. before Judge Richard J. Arcara.
Twenty-Two MS-13 Members Sentenced for Violent CrimesRead the Press Release
Twenty-two members of the international gang Mara Salvatrucha-13 (MS-13) have now been sentenced, many to life or decades in prison, for their roles in violent crimes in the Atlanta area between 2005 and 2010, including murders, attempted murders and armed robberies.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney John Horn of the Northern District of Georgia made the announcement.
On July 15, 2013, a jury convicted the following defendants:
- Miguel Alvarado-Linares, aka Joker, 26, of Norcross, Georgia, was convicted of Racketeer Influenced and Corrupt Organization (RICO) conspiracy involving murder, two counts of Violent Crime in Aid of Racketeering (VICAR) involving murder, two counts of VICAR involving attempted murder and four firearms offenses. He was sentenced on Oct. 15, 2013, to serve three life sentences followed by 85 years in prison.
- Ernesto Escobar, aka Pink Panther, aka Flaco, 32, of Norcross, was convicted of one count of RICO conspiracy involving murder, one count of VICAR involving murder and one firearms offense. He was sentenced on Dec. 20, 2013, to serve two life sentences followed by 10 years in prison.
- Dimas Alfaro-Granados, aka Toro, 32, of Duluth, Georgia, was convicted of one count of RICO conspiracy involving murder, two counts of VICAR involving murder and two firearms offenses. He was sentenced on Oct. 30, 2013, to serve three life sentences followed by 35 years in prison.
- Jairo Reyna-Ozuna, aka Flaco, 30, of Norcross, was convicted of one count of RICO conspiracy and one firearms offense. He was sentenced on Jan. 31, 2014, to serve 13 years in prison.
According to the evidence introduced at trial, Alvarado-Linares and Alfaro-Granados, along with another gang member, killed Lal Ko in October 2006. Ko was a fellow MS-13 member, but Alvarado-Linares, one of the gang leaders, thought that Ko was cooperating with police and ordered his murder.
The trial evidence showed that in December 2006, when another MS-13 gang member wanted to quit the gang, Alvarado-Linares and Alfaro-Granados ordered him to kill a rival gang member as a condition of leaving MS-13. Following orders, on Christmas Eve 2006, that gang member shot at a vehicle traveling on an interstate highway that he believed contained rival gang members. A 20-year-old passenger in the vehicle was killed.
The evidence at trial also demonstrated that on New Year’s Eve 2006, Alvarado-Linares shot two members of a rival gang.
Finally, the evidence introduced at trial showed that on Aug. 5, 2007, Reyna-Ozuna, who was a gang leader at the time, gave Escobar a .45 caliber semi-automatic handgun and instructed him to shoot a teenager with whom Escobar had an altercation earlier that day.
On Nov. 21, 2013, a jury convicted the following defendants:
- William Espinoza, aka Cheberria, aka El Crazy, 33, of Norcross, was convicted of one count of RICO conspiracy involving murder, one count of VICAR involving attempted murder and one firearms offense. He was sentenced on April 15, 2014, to serve 20 years and eight months in prison.
- Remberto Argueta, aka Pitufo, 26, of Lilburn, Georgia, was convicted of one count of RICO conspiracy involving murder, one count of VICAR involving murder and one firearms offense. He was sentenced on Oct. 29, 2014, to serve two life sentences followed by five years in prison.
According to the evidence presented at trial, on April 13, 2007, Argueta, along with other gang members, attempted to rob Arpolonio Rios-Jarquin, who the defendants suspected was drug dealer. After discovering that Rios-Jarquin was armed, Argueta and fellow MS-13 members engaged in a shootout with Rios-Jarquin, during which Rios-Jarquin was killed.
The trial evidence showed that, on Oct. 24, 2007, Argueta and several other MS-13 members shot at rival gang members, hitting one in the back and another in the hip and arm.
The evidence also demonstrated that, while at a nightclub in DeKalb County, Georgia, on July 20, 2008, Espinoza and other members of MS-13 engaged in a fight with persons they suspected were members of a rival gang. During the fight, Espinoza shot a man in the stomach.
Just two days later, according to evidence introduced at trial, Espinoza and four other MS-13 members identified a victim to rob for beer money. When the victim resisted, Espinoza shot him through the head.
On Oct. 7, 2014, a jury convicted the following defendant:
- Elio Marroquin-Lopez, aka Perico, 29, of Chamblee, Georgia, was convicted of one count of RICO conspiracy. He was sentenced on Oct. 29, 2014, to serve seven years and two months in prison.
According to the evidence introduced at trial, on Dec. 15, 2008, Marroquin-Lopez, who was one of the gang leaders, and two other gang members shot at the owner of an apartment that the defendants were attempting to rob.
The trial evidence also showed that on March 13, 2009, Marroquin-Lopez fought two suspected gang members and shot at one of them.
Finally, the evidence at trial demonstrated that Marroquin-Lopez often distributed baggies of cocaine to fellow MS-13 members at meetings and instructed them to sell the cocaine at clubs.
The following defendants previously pleaded guilty and have been sentenced:
- Jose Delgado, aka Fantasma, 28, of Lawrenceville, Georgia, pleaded guilty to RICO conspiracy involving murder and two counts of VICAR involving murder, and was sentenced on July 31, 2015, to serve 12 years in prison.
- Alex Ferrufino, aka Whiskey, 35, Tucker, Georgia, pleaded guilty to two counts of VICAR involving attempted murder and one firearms offense, and was sentenced on Sept. 11, 2014, to serve 25 years in prison.
- Joseph Ivan Dias, aka Travieso, 27, of Gainesville, Georgia, pleaded guilty to RICO conspiracy and was sentenced on April 1, 2015, to serve 14 years in prison.
- Miguel Guevara, aka Blacky, 31, of Fort Walton Beach, Florida, pleaded guilty to RICO conspiracy involving murder and a firearms offense, and was sentenced on Feb. 13, 2015, to serve 30 years in prison.
- Kenedis Bonilla, aka Mago, 33, of Tucker, pleaded guilty to RICO conspiracy involving murder and a firearms offense, and was sentenced on June 13, 2015, to serve 15 years in prison.
- Salvador Franco, aka Smiley, 30, of Norcross, pleaded guilty to RICO conspiracy and a firearms offense, and was sentenced on Sept.11, 2014, to serve 12 years in prison.
- Edwin Menjivar, aka Chilly Willy, aka Vago, 33, of Norcross, pleaded guilty to RICO conspiracy and VICAR involving attempted murder, and was sentenced on Nov. 21, 2014, to serve 11 years in prison.
- Omar Cubillos, aka Pancho, 30, of Gainesville, pleaded guilty to RICO conspiracy involving murder and a firearms offense, and was sentenced on June 15, 2015, to serve 20 years in prison.
- Carlos Mendoza, aka Catracho, 30, of Atlanta, pleaded guilty to RICO conspiracy involving murder and a firearms offense, and was sentenced on April 30, 2015, to serve 17 years and six months in prison.
- Emmanual Hidalgo, aka Scooby, 29, of Chamblee, pleading guilty to RICO conspiracy involving murder and a firearms offense, and was sentenced on Nov. 21, 2014, to serve 25 years in prison.
- Christopher Castro Ramirez, aka Demente, 26, of Norcross, pleaded guilty to RICO conspiracy and was sentenced on Nov. 1, 2012, to serve two years and six months in prison.
- Enzo Baires, aka Ghost, 25, of Norcross, pleaded guilty to RICO conspiracy involving murder and was sentenced on May 11, 2015, to serve 12 years in prison.
- Irvin Mejia-Cruz, aka Lil Triste, aka Triste, 25, of Duluth, pleaded guilty to RICO conspiracy and was sentenced on Feb. 13, 2015, to serve nine years in prison.
- Walter Aldana, aka Goofy, 25, of Norcross, pleaded guilty to RICO conspiracy and was sentenced on Feb. 13, 2015, to serve 10 years in prison.
- William Pineda, aka Slayer, 32, of Lawrenceville, pleaded guilty to RICO conspiracy and was sentenced on Dec. 11, 2014, to serve seven years in prison.
These cases were investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the FBI with assistance from the U.S. Marshals Service, the Gwinnett County, Georgia, Police Department, the DeKalb County Police Department, the Norcross Police Department, the Chamblee Police Department, and the Gwinnett County Sheriff’s Office.
These cases were prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Paul R. Jones and Kim S. Dammers of the Northern District of Georgia.
Shreveport woman sentenced to 12 months for stealing more than $39,000 in Social Security paymentsRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Shreveport woman was sentenced Thursday to 12 months and one day in prison for stealing more than $39,000 in Social Security benefit payments.
Stephanie D. Lynn, 46, of Shreveport, was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of theft of government funds. She was also sentenced to serve three years of supervised release and ordered to pay $39,435 in restitution. According to evidence presented at the January 15, 2015 guilty plea, Lynn cashed and used her deceased son’s Social Security benefit checks from May 2009 to December 2013. She also did not inform the Social Security Administration that her son had died and submitted paperwork stating that he was alive in order to continue receiving the checks. The total amount taken was $39,435.
The Social Security Administration, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Seth D. Reeg prosecuted the case.
Reading Resident Charged with Illegal Reentry After DeportationRead the Press Release
Jesus Sandoval-Salvador, a/k/a “Miguel Sandoval-Salvador,” 35, of Reading, PA, was charged yesterday by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about April 10, 2015, Sandoval-Salvador, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about February 6, 2007 and March 1, 2013.
If convicted the defendant faces a maximum possible sentence of 20 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Bea Witzleben.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Qiong Lu Pua Found Guilty of Conspiracy Related to Immigration FraudRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced today that defendant QIONG LU PUA, a legal permanent resident of the United States, was found guilty, following a three day jury trial in the U.S. District Court for the Northern Mariana Islands, for conspiracy to defraud the United States. The jury found the defendant planned and orchestrated two fraudulent marriages so that the foreign national spouses could obtain immigration benefits. PUA instructed members of the conspiracy to open bank accounts, apply for passports, and encouraged them to lie to federal immigration officials. The defendant will be sentenced October 30, 2015, and she faces a maximum of five years imprisonment and a $250,000.00 fine.
“Obtaining immigration benefits illegally is a continuing problem that threatens the safety of our community. Becoming a legal permanent resident of the United States is an accomplishment that should not be demeaned by the criminal acts of those who enter into fraudulent marriages. The United States Attorney’s Office will continue to work with our federal and local law enforcement partners, such as the Diplomatic Security Services and Homeland Security Investigations, to put an end to this problem.” United States Attorney Limtiaco stated.
The Diplomatic Security Services agency of the Department of State conducted the investigation with assistance from the Department of Homeland Security, Homeland Security Investigations. Assistant United States Attorney Russell Lorfing and Assistant United States Attorney Ross Naughton prosecuted the case.
Pikesville Man Sentenced to Two Years in Prison for Possession of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Eliot Knecht Friedman, age 57, is a resident of Pikesville, Maryland today to two years in prison, followed by 20 years of supervised release, for possession of child pornography. Judge Bredar ordered that upon his release from prison, Friedman must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). Freidman is a former contract employee at the National Security Agency.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to Friedman’s plea agreement, on June 27, 2014, a Baltimore County police detective was conducting an investigation regarding child pornography located an IP address on the a file sharing network that was sharing files suspected of depicting children engaged in sexually explicit conduct. The detective downloaded files containing child pornography that were being shared from that IP address. Records showed that Friedman was the subscriber for that IP address and Baltimore County detectives obtained a search warrant for the residence.
On July 22, 2014, members of the Baltimore County Police Department executed the warrant at Friedman’s residence. Law enforcement seized a desktop computer, five external hard drives and digital media. More than 150,000 images of child pornography, including images and videos of prepubescent minors, were subsequently found on the computer and other media associated with Friedman.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, the FBI, Baltimore County Police Department and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Ayn B. Ducao, who prosecuted the case.
Philadelphia Woman Charged with Stealing Dead Uncle's BenefitsRead the Press Release
PHILADELPHIA - Tareena Hudson, 41, of Philadelphia, Pennsylvania, was charged today by information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, after her uncle’s death in November 2006 until March 2014 the defendant received retirement benefits intended for her uncle. The defendant’s alleged actions resulted in a loss to the government of approximately $102,993.
If convicted, Hudson faces a maximum possible sentence of 10 years in prison, a three‑year period of supervised release, restitution to the government of $102,993, a $250,000 fine, and a $100 special assessment.
The case was investigated by the Social Security Administration Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Christopher E. Parisi.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Indicted on Child Pornography ChargesRead the Press Release
PHILADELPHIA - Andrew F. Dickson, 51, of Philadelphia, PA, was charged yesterday by indictment with possession of child pornography and receipt of child pornography announced United States Attorney Zane David Memeger.
The indictment alleges that on multiple dates between February 21, 2015 and July 9, 2015, Dickson knowingly possessed child pornography and knowingly accessed the Internet with intent to view child pornography. It is further alleged that on October 19, 2013, Dickson knowingly received child pornography through the use of the Internet.
If convicted the defendant faces a mandatory minimum sentence of five years in prison with a possible advisory sentencing guideline range of up to 135 months, up to a lifetime of supervised release, a $200 special assessment, plus possible fines and restitution.
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. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the Federal Bureau of Investigations with assistance from the Philadelphia Police Department Special Victims Unit. The case is being prosecuted by Assistant United States Attorney Priya T. De Souza.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Palm Beach County Resident Sentenced for Violations of the Espionage Act and Computer Fraud and Abuse Act for Accessing and Removing Classified Information from Military ComputersRead the Press Release
Christopher R. Glenn, 34, a South Florida Resident, was sentenced on July 31, 2015, to 120 months of imprisonment, to be followed by three years of supervised release, by United States District Judge Kenneth Marra following his guilty plea for violations of Title 18, United States Code, Section 793(e), willful retention of classified national defense information under the Espionage Act, Section 1030(a)(1), computer intrusion under the Computer Fraud and Abuse Act, while employed as a computer systems administrator at a U.S. Military installation in Honduras; and Sections 371 and 1425(a), conspiracy to commit naturalization fraud.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John P. Carlin, Assistant Attorney General for National Security, George Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and members of the South Florida Joint Terrorism Task Force (JTTF), made the announcement.
According to court records, while working as a computer systems administrator at Soto Cano Air Base in Honduras, Glenn accessed a classified Department of Defense network without authorization and removed classified national defense information from the Department of Defense and U.S. Southern Command's (SOUTHCOM's) Joint Task Force - Bravo, including intelligence reports and military plans. Glenn proceeded to encrypt the files and place them on an Internet-accessible network storage device located in his residence in Honduras.
Glenn also conspired with his wife, Khadraa A. Glenn, 28, to commit naturalization fraud for her benefit by fabricating fraudulent documents and submitting false statements and the documents to the U.S. Citizenship and Immigration Services (USCIS). Khadraa A. Glenn previously pled guilty to naturalization fraud conspiracy and was sentenced on October 7, 2014.
“The defendant exploited and violated the special trust placed in him as a computer network system administrator working at a United States military base, in order to penetrate the computer system and steal classified materials. We will continue to investigate and prosecute insider threats to national security and we will bring those violators to justice,” stated U.S. Attorney Ferrer.
“Christopher Glenn exploited his position as a cleared military contractor and systems administrator to steal classified U.S. military secrets,” said Assistant Attorney General Carlin. “In doing so, he violated the unique trust placed in him by the Department of Defense. Insider threats by trusted employees who exploit computer access are a significant danger to U.S. national security and this sentencing shows it will not be tolerated.”
"A person who violated the Espionage Act and had significant ties to South Florida, is Christopher Glenn," said Special Agent in Charge Piro. "A defense contractor whose routine would take him through Broward, Dade and Palm Beach counties, Glenn hacked a classified computer network and gained access to national defense information. More than ever, the Glenns of this world are targeting our nation's most valuable secrets. While it doesn't often make the headlines, the FBI works hard to keep our secrets from falling into the wrong hands."
Mr. Ferrer commended the investigative efforts of the FBI, U.S. Army’s 470th Military Intelligence Brigade, U.S. Army’s Criminal Investigations Division, the U.S. Southern Command (SOUTHCOM), USCIS, IRS-CI, Department of Homeland Security and the JTTF. The case is being prosecuted by Assistant U.S. Attorney Ricardo Del Toro and Trial Attorney Christian Ford of the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Oklahoma City Man to Serve 51 Months in Prison for Illegally Smuggling Firearm Shell Casings to Iran and Possession of Opium with Intent to DistributeRead the Press Release
Oklahoma City, Oklahoma – MAJID IRANPOUR MOBAREKEH, 45, from Oklahoma City, was sentenced by United States District Judge Joe Heaton to serve 51 months in prison for illegally smuggling firearm shell casings to Iran and possession of opium with intent to distribute, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, on July 2, 2014, Mobarekeh illegally sent and exported 450 firearm shell casings from the United States to the Republic of Iran. He was also charged with illegally possessing opium on October 2, 2014, with the intent to distribute. On February 26, 2015, Mobarekeh pled guilty to the charges. After serving his 51-month prison sentence, Mobarekeh was ordered to serve three years on supervised release.
This case is the result of an investigation by the U.S. Immigration and Customs Enforcement, Homeland Security Investigations, and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney David P. Petermann.
Niagara Falls Man Sentenced on Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Harry Hinks, 49, of Niagara Falls, NY, who was convicted of conspiracy to possess with intent to distribute, and to distribute, 100 kilograms or more of marijuana and 500 grams or more of cocaine, was sentenced to 63 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that between December 2010 and April 4, 2011, the defendant organized the distribution of 20-30 pounds of marijuana per week from the Akwesasne Indian Reservation to Niagara Falls. The marijuana was then distributed in the Western New York area.
On April 4, 2011, Hinks was intercepted during a telephone conversation discussing the purchase of two kilograms of cocaine with do-defendant Dennis Berard. The cocaine was going to be purchased by co-conspirator Ronald Carter for further distribution.
Dennis Berard was sentenced to 57 months in prison. Ronald Carter was convicted and is awaiting sentencing.
The sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy and the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto.
New Carrollton Man Sentenced to 13 Years in Prison for the Armed Robberies of Cell Phone StoresRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Tyran Antwain Lane, age 23, of New Carrollton, Maryland, today to 13 years in prison, followed by three years of supervised release, for conspiracy, armed robbery and brandishing a firearm during a crime of violence, related to the robberies of cell phone stores.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Anne Arundel County Police Chief Tim Altomare; Chief J. Thomas Manger of the Montgomery County Police Department; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to his plea agreement, from January 29, 2013 through July 4, 2014, Lane was part of a conspiracy to rob cell phone stores in Anne Arundel, Baltimore and Montgomery Counties, along with co-defendants Donald Scott Deans, and Parris Benjamin Chisholm. The conspirators robbed a total of 10 stores during the course of the conspiracy and Lane actively participated in seven of those robberies.
Specifically, Lane, Dean Chisholm, and others, planned and organized the theft of cash, credit cards, cell phones, portable electronic communications devices, and tablet computers from businesses, their employees and customers. Lane, Dean and Chisholm then sold the stolen property for cash. According to their plea agreement and other court documents Lane, Dean or Chisholm used and brandished a gun to intimidate the employees during the robberies. In at least seven of the armed robberies the defendants used duct tape or other items to restrain employees and trash bags to carry the stolen items. The defendants used Chisholm’s car to travel to and from the robberies and to transport the stolen property and guns used during the robberies until Chisholm’s arrest on March 26, 2013. After Chisholm’s arrest, Lane and Deans committed at least four additional robberies, including two in Virginia.
Cell phone records show that Lane, Dean, Chisholm and others involved in the robberies and/or the sale of the stolen items communicated by cell phone calls and text messages before and after the robberies. In addition, Lane, Dean and Chisholm were all captured on surveillance video at least once during the robbery spree.
Chisholm was arrested on March 26, 2013, after he used a rock to break the front window of a cell phone store in the 7700 block of Belair Road in Baltimore County, and stole four cell phones. Police pulled him over and recovered new and used rolls of duct tape, clothing, and hats similar to those described by victims of the previous robberies from the car. The stolen cell phones were also recovered from the car. Video from the victim store recorded Chisholm as he committed the robbery.
Donald Scott Deans, age 23, of Largo, Maryland and Parris Benjamin Chisholm, age 24, of Millersville, Maryland, previously pleaded guilty to their participation in the robberies. Chisholm was sentenced to 16 years in prison and Deans is scheduled to be sentenced on October 2, 2015, at 2:00 p.m. Deans remains detained.
United States Attorney Rod J. Rosenstein praised the FBI, Anne Arundel County, Montgomery County, and Prince George’s County Police Departments, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney John F. Purcell, Jr., who is prosecuting the case.
Minnesota Man Sentenced to 60 Months for Sexual Assault on U.S. Air Force Base in Okinawa, JapanRead the Press Release
A Minnesota man who worked at Kadena Air Base in Okinawa, Japan, was sentenced today to 60 months for sexual assault. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Andrew M. Luger of the District of Minnesota, Acting Executive Assistant Director Charles Warmuth of the Naval Criminal Investigative Service’s (NCIS) Pacific Operations and Special Agent in Charge Richard T. Thronton of the FBI’s Minneapolis Field Office made the announcement.
Ricky Isiah Sherwood, 19, pleaded guilty on Nov. 14, 2014, to sexual assault. U.S. District Judge Ann D. Montgomery imposed today’s sentence.
In connection with his guilty plea, Sherwood admitted to sexually assaulting a heavily intoxicated minor in a residence on base on Feb. 11, 2014, and to filming parts of the assault using his cellular phone. At the time of the assault, Sherwood was an employee of Kadena Air Base and a dependent of a member of the U.S. Military. The Military Extraterritorial Jurisdiction Act gives federal courts jurisdiction over felonies committed abroad by certain persons employed by or accompanying the U.S. Military.
This case was investigated by NCIS and FBI. This case is being prosecuted by Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Katharine Buzicky of the District of Minnesota.
Minnesota Man Sentenced to 60 Months for Sexual Assault on U.S. Air Force Base in Okinawa, JapanRead the Press Release
WASHINGTON – A Minnesota man who worked at Kadena Air Base in Okinawa, Japan, was sentenced today to 60 months for sexual assault. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Andrew M. Luger of the District of Minnesota, Acting Executive Assistant Director Charles Warmuth of the Naval Criminal Investigative Service’s (NCIS) Pacific Operations and Special Agent in Charge Richard T. Thronton of the FBI’s Minneapolis Field Office made the announcement.
Ricky Isiah Sherwood, 19, pleaded guilty on Nov. 14, 2014, to sexual assault. U.S. District Judge Ann D. Montgomery imposed today’s sentence.
In connection with his guilty plea, Sherwood admitted to sexually assaulting a heavily intoxicated minor in a residence on base on Feb. 11, 2014, and to filming parts of the assault using his cellular phone. At the time of the assault, Sherwood was an employee of Kadena Air Base and a dependent of a member of the U.S. Military. The Military Extraterritorial Jurisdiction Act gives federal courts jurisdiction over felonies committed abroad by certain persons employed by or accompanying the U.S. Military.
This case was investigated by NCIS and FBI. This case is being prosecuted by Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Katharine Buzicky of the District of Minnesota.
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Miami-Dade County Resident Pled Guilty to Filing More Than $7 Million in False Refund Claims with the IRSRead the Press Release
A Miami-Dade County resident pled guilty to filing more than $7 million in false refund claims with the Internal Revenue Service.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Efrain Galvez, 53, of Miami, Florida, pled guilty to one count of making a false, fictitious, and fraudulent claim against the United States, in violation of Title 18, United States Code, Section 287.
According to court documents, Galvez filed false 2005 through 2008 federal income tax returns with the IRS claiming a total of $7,421,987 in fraudulent refunds. In the returns, Galvez falsely asserted that he was owed millions of dollars in income from various entities, and that those entities had withheld the money as federal income tax paid to the IRS. In fact, the entities owed no such income to Galvez, and withheld no such taxes on his behalf. Specifically, Galvez filed a 2007 amended tax return requesting a tax refund of $2,852,566 claiming that he received income from two county courts among other entities. Galvez attached Forms 1099-OID to the tax return, purportedly from the two courts, reflecting that the courts paid the amounts to the IRS on Galvez’s behalf as taxes. The filed 1099-OID forms were false. Neither court paid or owed income to Galvez or withheld taxes on his behalf. The amounts referenced in the court documents were in fact foreclosure judgments filed against Galvez for his failure to pay mortgages.
Court documents indicate that Galvez had previously filed legitimate tax returns that did not include fabricated income and withholding amounts, knew that he had not received the income from the various entities reported on the fraudulent returns, knew that the taxes claimed had not been withheld, and knew that the 1099-OID forms were false.
Galvez is scheduled to be sentenced on October 15, 2015 at 10:00 a.m. before United States District Judge William J. Zloch. At sentencing, the defendant faces a maximum of five years of imprisonment.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney John P. Gonsoulin.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
McAllen Area Doctor’s Assistant Convicted in Illegal Kickback SchemeRead the Press Release
McALLEN, Texas ‐ Argentina Cavazos, 57, has pleaded guilty to illegal remunerations for her role in a scheme to solicit and obtain illegal kickbacks in exchange for patient referrals, announced U.S. Attorney Kenneth Magidson.
Cavazos, a doctor’s assistant for a McAllen area physician, admitted to engaging in a kickback scheme by exchanging referrals of Medicare beneficiaries for money. From Nov. 15, 2010, to July 9, 2012, Cavazos received 11 illegal kickback checks in exchange for referrals of Medicare beneficiaries, whose information was used by home health care companies to bill Medicare. Cavazos admitted to using her position as a doctor’s assistant to gain access to patient information. Cavazos provided the patient information to another person who then compensated Cavazos with checks of various amounts.
U.S. District Judge Randy Crane accepted the plea today and has set sentencing for Oct. 15, 2015. At that time, Cavazos faces up to five years in federal prison and a possible $25,000 fine.
The investigation leading to the charges was conducted by the Department of Health and Human Services‐Office of Inspector General and the FBI. Assistant U.S. Attorney Michael Day is prosecuting the case.
Maryland Man Sentenced to Five Years in Prison for Setting Fire to Ex-Girlfriend's Apartment BuildingRead the Press Release
WASHINGTON – Joseph F. Brown, 42, of Bladensburg, Md., was sentenced today to a five-year prison term for intentionally setting fire to his ex-girlfriend’s apartment building earlier this year, Acting U.S. Attorney Vincent H. Cohen, Jr. announced.
Brown pled guilty in June 2015, in the Superior Court of the District of Columbia, to charges of arson and second-degree burglary. He was sentenced by the Honorable Yvonne M. Williams. Following his prison term, Brown will be placed on three years of supervised release. During that time, Brown will be placed on GPS monitoring and must stay away from the victim.
According to the government’s evidence, on April 4, 2015, Brown went to visit his ex-girlfriend at her apartment in the 3200 block of 11th Place SE. At approximately 1 a.m., she asked Brown to leave. Shortly after she asked him to leave, she heard a loud explosion by her front door. She looked out the window and saw Brown running out of her building with his sleeve on fire. She also saw flames and smoke coming through her front door. She then saw Brown pull in front of her apartment building, blow the horn in his car, and drive away.
A witness also had seen Brown running out of the building with his sleeve on fire. The witness heard Brown yell, “How do you like that?” Brown also shouted profanities toward his ex-girlfriend’s window. Shortly after the incident, Brown sent her a text message that read, in relevant part, “you worried bout me setting your building on fire..you lucky it wasn’t you..”
All four of the apartments in the building were occupied, and all had to be evacuated. Several young children were among the residents who had to evacuate. No one was injured.
Firefighters with the District of Columbia Department of Fire and Emergency Medical Services arrived shortly thereafter and saw smoke and flames coming from the front of the building. After the fire was extinguished, a fire investigator responded to the scene and conducted a complete origin and cause fire scene investigation. The investigation revealed that the fire was incendiary--that is, intentionally set--using gasoline as an accelerant.
The building was deemed uninhabitable, and the residents were forced to relocate as a result of the arson. Brown was arrested May 13, 2015, and has been in custody ever since.
In announcing the sentence, Acting U.S. Attorney Cohen praised the work of those who investigated the case from the D.C. Fire and Emergency Medical Service’s Fire Investigations Unit. He also expressed appreciation for the assistance of the U.S. Marshals Service and the Metropolitan Police Department. He acknowledged the work of those who handled the case for the U.S. Attorney’s Office, including Victim/Witness Advocates Maria Shumar and Elsa Maltese and Paralegal Specialist Erica Vample.
Finally, he commended the work of Assistant U.S. Attorney Elana Suttenberg, who investigated and prosecuted the matter.
Married Lawyer and Doctor Sentenced to Prison for Obstructing IRS Audit to Hide False Deductions and Expenses Claimed on Tax ReturnsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JEFFREY S. STEIN and MARLA STEIN, who are husband and wife, were sentenced today to 18 months and 12 months and one day in prison, respectively, for obstructing the IRS by, among other things, providing to an IRS auditor phony documents designed to support false deductions both claimed on their joint tax returns for the years 2009-2012. JEFFREY S. STEIN, a vascular surgeon, and MARLA STEIN, a New York personal injury lawyer, were both sentenced by U.S. District Judge Denise L. Cote.
Manhattan U.S. Attorney Preet Bharara said: “Taxpayers have an obligation not only to file truthful and accurate tax returns, but also to deal with the IRS honestly during audits. Jeffrey and Marla Stein failed to do so, and as a result, both have been sentenced today to jail terms.”
According to the Information and other documents filed in Manhattan federal court, as well as the transcript of today’s sentencing proceedings:
JEFFREY S. STEIN was a vascular surgeon who, between 2009 and 2012, conducted business principally through his own Manhattan and Long Island-based medical practice, “Jeffrey Stein, M.D.” Between 2008 and 2011, JEFFREY S. STEIN was also affiliated with and earned income from certain medical groups, including one based in Brooklyn that had contracts with the United States Department of Veterans Affairs (“V.A.”).
MARLA STEIN was an attorney who, between 2009 and 2012, performed legal services largely as an independent contractor to certain Manhattan-based personal injury law firms.
Both JEFFREY S. STEIN and MARLA STEIN reported the profits from their medical and law practices, respectively, on separate Schedules C (Profit or Loss From Business) attached to the joint U.S. Individual Income Tax Returns, Forms 1040, that they filed for the tax years 2009-2012.
Filing of False Tax Returns
In connection with the preparation of their Forms 1040 for the tax years 2009-2012, JEFFREY S. STEIN and MARLA STEIN provided false and fictitious information to their accountant in order to fraudulently reduce the amount of taxes they would have to pay to the IRS. In particular, JEFFREY S. STEIN provided the accountant with (a) wholly fictitious Schedule C expenses purportedly incurred by his medical practice, such as contract labor expenses and transcription services that were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by his medical practice, including travel and auto expenses, deductible meals and entertainment, and the amounts of wages paid to employees of his medical practice. In addition, MARLA STEIN provided this accountant with (a) wholly fictitious Schedule C contract labor and advertising expenses purportedly incurred by her law practice but which were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by her law practice, including those for office supplies and deductible meals and expenses.
In addition to the foregoing, for the tax years 2007-2013, JEFFREY S. STEIN and MARLA STEIN failed to inform their accountant that they employed and paid approximately $15,000 annually in cash wages to a household employee (“the Domestic Employee”) who performed certain cleaning and childcare services in their Upper East Side home.
As a result of the falsely inflated and wholly fictitious information provided by JEFFREY S. STEIN and MARLA STEIN to their accountant in connection with the preparation of their Forms 1040 for the 2009-2012 tax years, the accountant prepared tax returns for JEFFREY S. STEIN and MARLA STEIN that falsely and fraudulently understated their business income and, consequently, the amount of taxes due and owing to the IRS. In addition, as a result of the failure of JEFFREY S. STEIN and MARLA STEIN to inform their accountant of the cash wages paid to their Domestic Employee for the 2007-2013 tax years, JEFFREY S. STEIN and MARLA STEIN failed to pay to the IRS various employment taxes due and owing to the IRS, and also aided the Domestic Employee in avoiding detection by the IRS of the employee’s failure to report her cash wages to the IRS for the tax years 2007-2013.
Obstruction of the IRS Audit
In February 2013, the IRS notified JEFFREY S. STEIN and MARLA STEIN, the defendants, that their tax returns for the 2010 and 2011 tax years had been selected for audit, specifically with respect to their respective Schedule C expenses. In response to requests by the IRS auditor for documents supporting their claimed deductions and expenses, JEFFREY S. STEIN and MARLA STEIN created and provided to their accountant – whom they retained to represent them during the audit – various fabricated and fictitious documents and information as part of a corrupt effort to convince the IRS auditor that the expenses claimed on their respective Schedules C were legitimate.
Among the fabricated and fictitious documents created by JEFFREY S. STEIN and MARLA STEIN and provided to their accountant, in order to pass on to the IRS auditor, were the following:
(a) Using the names of four disabled military veterans (including two former patients) whose identities and other personal information JEFFREY S. STEIN obtained as a result of his work for the V.A., JEFFREY S. STEIN created bogus invoices in the names of those veterans (“the Bogus Invoices”). The Bogus Invoices falsely recited that the individuals whose names were contained on the invoices had performed during 2010 and 2011, and been paid by JEFFREY S. STEIN for, various medical services rendered to JEFFREY S. STEIN’s medical practice, such as “ultrasound technologist” and “vascular technologist” services. In truth and fact, none of the individuals whose names were placed on the Bogus Invoices provided any of the services recited in the fabricated invoices, which totaled $126,525. One of the veterans whose name and social security number were placed on a Bogus Invoice by JEFFREY S. STEIN was not even alive in 2011 – a year for which JEFFREY S. STEIN created a Bogus Invoice for that individual.
(b) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a Long Island hospital (“the Hospital”) reflecting payments sought by the Hospital for “surgical physician assistant cost sharing,” which invoices JEFFREY S. STEIN claimed were paid by his medical practice. In truth and fact, the services reflected in the Hospital invoices were never provided to JEFFREY S. STEIN and never paid by his medical practice as expenses.
(c) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a company that provided transcription services. In truth and fact, the transcription company identified by JEFFREY S. STEIN never provided any transcription services to JEFFREY S. STEIN’s medical practice.
(d) MARLA STEIN created certain documentation indicating that two individuals, whose names and purported tax identification numbers were included thereon, had provided certain services to MARLA STEIN’s law practice and had been paid fee income by MARLA STEIN as a result. In truth and fact, neither of those individuals had provided services to MARLA STEIN’s law practice. Instead, the individuals whose identities and social security numbers were used were those of the Domestic Employee and a medical professional who had performed services for a member of MARLA STEIN’s immediate family.
(e) Using genuine invoices previously provided to MARLA STEIN by photographers and a videographer who had performed services in connection with religious celebrations for MARLA STEIN’s family, MARLA STEIN used the names of the photographers and videographer but fraudulently altered the real invoices to make them appear as if the services reflected in the invoices had been provided to MARLA STEIN’s law practice, as part of her work on personal injury cases.
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In addition to prison terms, JEFFREY S. STEIN, 58, of New York, New York, and MARLA STEIN, 52, also of Manhattan, were also ordered to pay restitution to the IRS in the aggregate amount of $344,989.
Mr. Bharara praised the outstanding investigative work of IRS-CI.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Stanley J. Okula, Jr. is in charge of the prosecution.