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16 September 2015
Federal Grand Jury Indicts Norfolk Man on Felon in Possession of Ammunition ChargeRead the Press Release
NORFOLK, Va. – Wesley Paul Hadsell, 37, of Norfolk, was indicted by a federal grand jury today on charges of felon in possession of ammunition.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) Washington Field Office, made the announcement after the grand jury returned the indictment. Assistant U.S. Attorney Benjamin L. Hatch is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-116.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
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Federal Charge of Involuntary Manslaughter Filed in Shooting Death at Fort RileyRead the Press Release
TOPEKA, KAN. – Federal prosecutors Wednesday filed an involuntary manslaughter charge against a Riley County man in connection with a shooting death at Fort Riley, U.S. Attorney Barry Grissom said.
Juwuan D. Jackson, 18, who lives on the Fort Riley base, is charged with one count of involuntary manslaughter. A criminal complaint alleges that on Sept. 11, 2015, Jackson handled a firearm in a reckless manner, resulting in the shooting death of 16-year-old Kenyon Givens, who also lives on Fort Riley.
If convicted, Jackson faces a maximum penalty of eight years in federal prison. Army Criminal Investigations Division and the FBI investigated. Special Assistant U.S. Attorney Robin Graham and Assistant U.S. Attorney Tony Mattivi are prosecuting.
Exeter Man Pleads Guilty to Making False StatementsRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Clifford Sprague, 37, of Exeter, Maine, pleaded guilty today in U.S. District Court to making false statements to obtain Social Security Disability Insurance (“SSDI”) benefits. SSDI benefits are paid by the Social Security Administration (“SSA”) to people with disabilities.
According to court records, from March 2011 until March 2012, the defendant received $12,864 in SSDI benefits for himself and his three dependent children. In November 2011, the defendant was required to undergo a Continuing Disability Review to determine if he was still disabled. During this review, the defendant told his representative payee to falsely represent that the defendant did not work outside the house and required someone to clean, bathe, dress and cook for him. In truth and fact, the defendant did not have disabilities that required someone else to clean, bathe, dress and cook for him. The defendant did a significant amount of work outside the house including working as a scrap metal dealer, carpenter and woodcutter.
The defendant faces up to five years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the SSA’s Office of the Inspector General.
Exeter Man Pleads Guilty to Assisting Pharmacy RobberyRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Clifford Sprague, 37, of Exeter, Maine, pled guilty today in U.S. District Court to being an accessory after the fact to a pharmacy robbery. An accessory after the fact is a person who, knowing that an offense against the United States has been committed, comforts or assists the offender in order to hinder or prevent his apprehension, trial or punishment.
According to court records, on March 10, 2012, Michael Thompson entered the Rite Aid pharmacy in Guilford, Maine wearing a bandana, a hood, sunglasses and gloves. He jumped over the pharmacy counter, brandished a large hunting style knife and demanded narcotics. A pharmacist opened the locker containing narcotics and Thompson filled his back pack with more than $5000 worth of them. After the robbery, Thompson called Sprague, told him that he had robbed the pharmacy and asked Sprague to pick him up in his car. Sprague did so. Shortly after picking up Thompson, Sprague saw a Somerset County Sheriff’s Office vehicle. Sprague slowed down his vehicle and told Thompson he needed to get out. Thompson got out of Sprague’s vehicle and fled into the woods. Later, Sprague used and sold some of the narcotics Thompson stole.
On June 29, 2015, Thompson was sentenced to 82 months in prison for his role in the pharmacy robbery.
The defendant faces up to ten years in prison and a $125,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Piscataquis County Sheriff’s Office, the Maine State Police, the Federal Bureau of Investigation and the Somerset County Sheriff’s Office.
El Paso Man Sentenced in New Mexico for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Carlos Jesus Carrasco, 25, of El Paso, Texas, was sentenced today in federal court in Las Cruces, N.M., for his methamphetamine trafficking conviction. Carlos Carrasco was sentenced to 87 months in prison followed by three years of supervised release.
Carlos Carrasco and his co-defendant and cousin, Bernabe Carrasco, 36, also of El Paso, were arrested on Dec. 20, 2013, and charged by criminal complaint with conspiracy and possession of methamphetamine with intent to distribute. According to court filings, the two men were arrested by U.S. Border Patrol agents at the Border Patrol traffic checkpoint on U.S. Highway 54 near Alamogordo, N.M., after the agents discovered that they were concealing packages of methamphetamine on their bodies during a routine immigration check of passengers. The two men subsequently were indicted on the same two charges.
On April 9, 2015, Carlos Carrasco and Bernabe Carrasco both pled guilty to informations charging them with conspiracy to possess methamphetamine with intent to distribute and possession of methamphetamine with intent to distribute. Both men admitted to possessing 2.07 kilograms of methamphetamine on Dec. 20, 2013, which they intended to distribute. Carlos Carrasco and Bernabe Carrasco admitted boarding a bus in El Paso with packages containing methamphetamine strapped to their bodies which they intended to deliver to Amarillo, Texas, in exchange for $1,200.00.
Bernabe Carrasco was sentenced on April 9, 2015, to 63 months in prison followed by four years of supervised release.
This case was investigated by the Las Cruces office of the DEA and U.S. Customs and Border Protection, with assistance from the Doña Ana County Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Amanda Gould of the U.S. Attorney’s Las Cruces Branch Office.
DeCarlos Frazier Found Guilty by Jury TrialRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that DeCarlos Frazier, 32, of Chicago, Illinois, was found guilty after a three-day jury trial of being a felon in possession of a firearm.
According to documents in this case, on March 29, 2014 East Chicago Police observed two males loitering in the area of 149th and Baring Avenue. As officers approached in a marked squad car and attempted to make contact with the subjects, DeCarlos Frazier fled on foot tossing a .38 caliber revolver handgun from his person. When a criminal history was run, it revealed that Frazier had prior a felony conviction for aggravated robbery.
This case is a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the East Chicago Police Department. This case was prosecuted by Assistant United States Attorneys Jennifer Chang-Adiga and Dean R. Lanter.
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Court Judgment Cancels Coal Lease for Utah MineRead the Press Release
SALT LAKE CITY – U.S. District Court Judge Dale A. Kimball has signed a judgment and order against a Utah coal mining company that cancels its federal coal lease and orders the company to pay more than $230,000 for past-due royalties and rental payments, United States Attorney John W. Huber announced today.
The judgment and order follows a stipulated agreement reached by the United States and Hidden Splendor Resources, Inc. (HSRI)
“It is imperative that energy companies operating on federal lands abide by the terms of the lease, post the necessary bonds, and pay the royalties and rentals due to American taxpayers,” Huber said.
The order issued by Kimball declares that HSRI violated the terms of its coal lease and a BLM Notice of Noncompliance by not posting a required bond. It cancels the coal lease for HSRI’s failure to comply with the lease terms and the Notice of Noncompliance that BLM had previously issued to it. And finally, the judgment requires HSRI to pay past-due royalties and rentals in the amount of $230,929.04 plus 1 percent interest until the date of the judgment and, thereafter, interest at the statutory rate until the debt is paid in full.
The U.S. Attorney’s Office in Utah originally filed a civil action against Hidden Splendor Resources on Dec. 29, 2014. Hidden Splendor Resources agreed to work with the United States on the stipulated judgment. The judgment was filed in July.
“This judgment stipulates that unpaid royalties dating back to 2012 and rental payments from 2009 through 2014 must be paid by Hidden Splendor Resources,” said Office of Natural Resources Revenue (ONRR) Director Greg Gould. “ONRR will remain vigilant in collecting every dollar due from energy production that occurs on Federal lands.”
Acting State Director for the Bureau of Land Management in Utah Jenna Whitlock said, “As the administrator of a number of coal leases in Utah, the Bureau of Land Management is committed to helping ensure that minerals are responsibly extracted from public lands. Despite the requirements of the coal lease and our Notice of Noncompliance, the company failed to post the required bond for important post-mining reclamation activities and it is appropriate to cancel their coal lease.”
Hidden Splendor Resources acquired the lease in March 2006 for the Horizon Mine, an underground coal mine located approximately 15 miles northwest of Price, Utah. The company failed to pay royalties from production in the “Horizon Mine” in February, April and July 2012, as well as associated rental payments from 2009 through 2014.
The United States Attorney’s Office acknowledged the cooperation of agencies involved in reaching the stipulated judgment, including the Office of Natural Resources Revenue, the Bureau of Land Management, and the Department of the Interior’s Solicitor’s Office.
The Office of Natural Resources Revenue and the Bureau of Land Management are part of the Department of the Interior. BLM is the leasing and inspection agency involved in onshore production on federal lands, while ONRR is responsible for collecting and disbursing revenues from energy production that occurs onshore on federal and American Indian lands and offshore in the Outer Continental Shelf. During Fiscal Year 2014, ONRR disbursed more than $13.4 billion to states, American Indian Tribes, individual Indian mineral owners, and to various federal accounts, including the U.S. Treasury, the Land and Water Conservation Fund, and the Reclamation Fund.
Court Authorizes IRS to Issue Summonses to Discover U.S. Taxpayers with Offshore Bank Accounts at Belize Bank International Limited and Belize Bank LimitedRead the Press Release
A federal court in Miami entered an order today authorizing the Internal Revenue Service (IRS) to serve a “John Doe” summons seeking information about U.S. taxpayers who may hold offshore accounts at Belize Bank International Limited (BBIL) or Belize Bank Limited (BBL), the Justice Department announced today. The order, which was entered by U.S. District Judge Ursula Ungaro, granted the United States’ petition for permission to seek records of BBIL’s and BBL’s correspondent accounts at Bank of America, N.A. and Citibank, N.A. Those records will allow the IRS to identify U.S. taxpayers who hold or held interests in financial accounts at BBIL and BBL, as well as other financial institutions that used the same correspondent accounts.
“The Department and the IRS are using every tool available to identify and investigate those individuals determined to evade their U.S. tax and reporting obligations through the use of offshore financial accounts and foreign entities,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “These John Doe summonses will provide detailed information about individuals using financial institutions in Belize and, to the extent funds were transferred, other jurisdictions. But rest assured, we are receiving information from many sources regarding hidden foreign accounts and offshore schemes. The time to come clean is now – before we knock on your door.”
“This court action further demonstrates our relentless efforts to pursue and catch those evading taxes with hidden offshore accounts no matter where they are or what structures are used to hide behind,” said Commissioner John Koskinen of the IRS. “This court action also reinforces the ongoing importance of the John Doe summons in international tax enforcement.”
According to the IRS declaration, BBL is incorporated and based in Belize, and directly owns BBIL. The IRS declaration further states that Belize Corporate Services (BCS) is incorporated and based in Belize and offers corporate services including the purchase of “shelf” Belizean international business companies. BBL, BBIL and BCS are all corporate subsidiaries of BCB Holdings Limited, according to the declaration. The declaration describes and IRS Revenue Agent’s review of information submitted by BBL and BBIL customers who disclosed their foreign accounts through the IRS offshore voluntary disclosure programs. The customers in the “John Doe” class may have failed to report income, evaded income taxes, or otherwise violated the internal revenue laws of the United States, according the declaration.
The IRS uses what are known as “John Doe” summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown. The John Doe summonses approved today direct Citibank and Bank of America to produce records identifying U.S. taxpayers with accounts at Belize Bank International Limited, Belize Bank Limited, or their affiliates, including other foreign banks that used BBIL and BBL’s correspondent accounts to service U.S. clients. The court also granted the IRS permission to seek records related to Citibank’s and Bank of America’s correspondent accounts for BCS and information related to BCS’s deposit accounts at Bank of America.
A correspondent account is a bank account that one bank maintains for another bank. Financial transactions involving U.S. dollars flow through U.S. banks; therefore, foreign banks that do business in U.S. dollars, but do not have an office in the United States, obtain a correspondent account in order to reach U.S. customers. Transactions in the correspondent account leave a trail in the United States that the IRS can follow, including by using a John Doe summons. The John Doe summons can let the IRS obtain records of money deposited, paid out through checks, and moved through the correspondent account through wire transfers.
Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation. Individuals wishing to learn more about the IRS offshore voluntary disclosure programs should visit http://www.irs.gov/Individuals/International-Taxpayers/Offshore-Voluntary-Disclosure-Program or http://www.irs.gov/Individuals/International-Taxpayers/Options-Available-For-U-S--Taxpayers-with-Undisclosed-Foreign-Financial-Assets.
The Justice Department has previously obtained similar orders from the U.S. District Court of the Southern District of New York, permitting a John Doe summons on UBS AG for records of Swiss bank Wegelin & Co.’s correspondent account at UBS and from the U.S. District Court of the Northern District of California, permitting a John Doe summons on Wells Fargo, N.A., for records of the Barbados-based Canadian Imperial Bank of Commerce FirstCaribbean International Bank (FCIB).
For further information about the Department of Justice’s offshore compliance initiatives, please visit: http://www.justice.gov/tax/offshore-compliance-initiative.
Colorado Woman Admits Participation in Conspiracy to Illegally Transfer FirearmsRead the Press Release
TRENTON, N.J. – A former resident of Colorado today admitted her involvement in a conspiracy to illegally transfer firearms from Colorado to a felon in New Jersey, United States Attorney Paul J. Fishman announced.
Krystel Lopez, 28, of Greeley, Colorado, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to one count of an indictment charging her with conspiracy to illegally transfer firearms interstate.
According to documents filed in this case and statements made in court:
Between February and April 2013, Lopez purchased an assault rifle and a handgun in Colorado. Later in April 2013, she mailed both the assault rifle and the handgun to the business address of a known felon in New Jersey, who was prohibited from possessing such weapons.
The charge of conspiracy to illegally transfer firearms interstate to a known felon carries a maximum sentence five years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 5, 2016.
U.S. Attorney Fishman praised special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Cleveland woman charged with Social Security theftRead the Press Release
A one-count Information was filed charging Beverly Harris, 75, of Cleveland, Ohio, with theft of government funds, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The information alleges that from on or about March 1, 2009, through December 1, 2013, Beverly Harris stole Social Security survivor benefits in the amount of $50,263 from the United States Social Security Administration, to which she was not entitled.
If convicted, the defendant’s sentence will be determined by the Court after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Carmen E. Brown and Special Assistant U.S. Attorney Lisa Sanniti, following an investigation by agents of the Office of Inspector General of the United States Social Security Administration.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Chesapeake Resident Smuggled Silencers into the United States from CanadaRead the Press Release
NORFOLK, Va. – Benjamin Lloyd Fisher, 42, of Chesapeake, was indicted by a federal grand jury today on charges of smuggling goods into the United States and being a prohibited person based on a prior domestic violence conviction.
According to court documents, the Alcohol, Tobacco, Firearms, and Explosives’ (ATF) investigation of a citizen of Canada revealed that he was smuggling firearms, silencers and mechanisms to convert a semi-automatic firearm into a machinegun, into the United States. A search of the Canadian citizen’s email account revealed that he was selling silencers to Fisher, and together they had worked out a plan to smuggle the silencers into the United States. A search warrant was executed at Fisher’s residence in Chesapeake where ATF agents found 13 firearms including pistols, rifles, shotguns, thousands of rounds of ammunitions, and six complete silencers and two silencer parts. The defendant is a prohibited person as he was previously convicted of a domestic violence crime which makes it illegal for him to possess a firearm.
Fisher faces a maximum penalty of 10 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) Washington Field Office, made the announcement after the grand jury returned an indictment today against Fisher. Fisher had previously made an initial appearance before a U.S. Magistrate Judge on a criminal complaint. Assistant U.S. Attorney William Muhr is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-271.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
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Chambersburg Man Indicted for Federal Workers' Compensation FraudRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Chambersburg man has been indicted by a federal grand jury in Harrisburg on a charge of theft and fraud regarding federal workers’ compensation benefits he received from 2011 through 2014.
According to United States Attorney Peter Smith, Chad McClure, age 45, of Chambersburg, PA was charged in an five count indictment with fraudulently receiving $143,475.41 in benefits paid out under the Federal Employees Compensation Act (FECA). The Department of Labor’s Office of Workers’ Compensation administers the FECA program. The indictment alleges that McClure was a civilian employee of the U.S. Army Corps of Engineers. In 2009, he went out on a disability claim. From April 2011 through 2014, McClure, who claimed a work-related injury, concealed his employment and affiliation with, CM Pig Out, a catering services firm, during this same time period he submitted the forms each year by the Office of Workers’ Compensation for benefits to continue to be paid.
The case was investigated by the by the United States Department of Labor’s Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations. Prosecution is assigned to Assistant United States Attorney William A. Behe.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 10 years of imprisonment on each count of theft and 5 years on each count alleging FECA program fraud, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Catholic Community Services of Southern Arizona Receives $600,000 in Federal Grant Funds to Support Victims of Domestic ViolenceRead the Press Release
PHOENIX – Today, U.S. Attorney John S. Leonardo announced that $600,000 in grant funds have been awarded to the Catholic Community Services of Southern Arizona to continue providing immigration legal advice, case evaluation, and representation to victims residing in a five county service area in southern Arizona. The grant funds were awarded by the Office on Violence Against Women (“OVW”), which is a component of the Department of Justice (“DOJ”).
“This Justice Department grant will fund vital legal services to enhance the safety and economic security of the victims of domestic violence in Southern Arizona for a 36 month period.” said U.S. Attorney Leonardo. “We encourage all agencies to be proactive and apply for future grant funding through our Office on Violence Against Women.”
Information about OVW and its programs can be found at: http://www.justice.gov/ovw.
RELEASE NUMBER: 2015-076_CATHOLIC_COMM_SVC GRANT (2015-WL-AX-0030)
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Buffalo Man Pleads Guilty to Money Laundering ConspiracyRead 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 Justin Stevens, 31, of Buffalo, NY, pleaded guilty to money laundering conspiracy before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison and a $500,000 fine.Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that between January 2014 and September 30, 2014, the defendant obtained marijuana via commercial shipments from co-conspirator, James Parish, of Carlsbad, California. In turn, Stevens deposited $38,100 in marijuana proceeds into Parish’s bank account in Buffalo. The defendant also provided $10,000 in proceeds from marijuana distribution to co-conspirator Benjamin Golembiewski to be forwarded on to Parish.
Both Parish and Golembiewski have been convicted and are awaiting sentencing.
The plea is the result of an investigation on the part of the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, and the Niagara Frontier Transportation Authority Police, under the direction of Chief George W. Gast.
Sentencing is scheduled for January 27, 2015, at 1:00 p.m. before Judge Arcara.
Brooksville Bank Executive Charged with Bank FraudRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces the filing of an information and plea agreement charging David Donato (58, Brooksville) with bank fraud. If convicted, he faces a maximum penalty of 30 years in federal prison. The information also notifies Donato that the United States intends to seek a money judgment in the amount of $143,878.80, which is traceable to the proceeds of the fraud.
According to court documents, Donato worked as a Senior Vice President and Commercial Lender for the CenterState Bank located at 12435 Cortez Boulevard in Brooksville. Donato was also the treasurer of the Hernando Youth League (HYL), a non-profit youth sports organization located in Hernando County. As treasurer, Donato maintained the organization’s bank accounts at his branch of CenterState Bank and had sole signature authority.
During a routine audit of its accounts in 2015, officials at CenterState Bank discovered suspicious activity in the accounts maintained by HYL. Further investigation revealed that, between at least 2011 and 2015, Donato had obtained five different lines of credit and loans from the bank in the name of HYL without permission or knowledge from HYL or its Board of Directors. He used the loan proceeds on personal expenses.
In total, Donato obtained $143,878.80 on behalf of HYL based on false statements and forged bank documents. Investigators have determined that Donato used approximately $98,420 for personal expenses, including paying his mortgage, credit cards, and cellphone and cable bills. He wrote checks to himself totaling $39,350 and also wrote checks in exchange for cash totaling $3,400. Each of these checks was written from the HYL accounts without the organization’s knowledge or consent.
An information is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Hernando County Sheriff’s Office and the United States Secret Service. It will be prosecuted by Assistant United States Attorney Mandy Riedel.
Update:
Donato pleaded guilty on Tuesday, September 30, 2015, at 2:00 PM in Tampa before Magistrate Judge Elizabeth A. Jenkins (Courtroom 11A).
A sentencing date has not yet been set.
Broker-Dealer Admits Role in Scheme to Trade on Inside Information Stolen from Prominent Law FirmRead the Press Release
A broker-dealer admitted today to participating in a five-year insider trading scheme that relied on information stolen from a prominent, international law firm, yielding net profits of more than $5.6 million, announced U.S. Attorney Paul J. Fishman for the District of New Jersey.
Vladimir Eydelman, 43, formerly of Colts Neck, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud and one count of tender offer fraud.
According to documents filed in this case and statements made in court: From 2009 to 2013, Eydelman, a broker-dealer employed first by Oppenheimer & Co. and most recently by Morgan Stanley, repeatedly traded on material nonpublic information provided to him by his brokerage client, Frank Tamayo, 42, of Brooklyn, New York, who, in turn, had obtained the inside information from his friend and former law school classmate, Steven Metro, 41, of Katonah, New York. Metro was the managing clerk of the New York office of Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions firms. The inside information divulged by Metro to Tamayo and, in turn, by Tamayo to Eydelman, related to corporate transactions, such as mergers and acquisitions or tender offers, in which the law firm represented a party or financial advisor to the transaction. As the law firm’s managing clerk, a litigation-related function, Metro did not personally work on most of the corporate transactions at issue. In most instances, Metro stole the inside information from the firm by scouring its computer system using search terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names and client-matter numbers.
After obtaining the information, Metro divulged it to Tamayo in person, usually meeting at a bar, coffee shop or other location near their respective workplaces in midtown Manhattan. During such meetings, Metro provided Tamayo inside information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals and information related to how the deals would affect the issuers’ stock price once announced. Tamayo generally would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro.
After Tamayo received the inside information from Metro, Tamayo would meet with Eydelman, usually at a location near Eydelman’s workplace, such as under the large clock in New York City’s Grand Central Terminal, where Tamayo would pass it on to Eydelman. Tamayo would show Eydelman the paper or napkin on which Tamayo had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo then would place the paper or napkin into his mouth and chew it until it was destroyed.
After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s source at a law firm, Eydelman purchased securities for himself, family members, friends and clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.
Throughout the course of the five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to cash out his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate his law firm source, Metro, for providing them inside information.
By exploiting the information that Metro had stolen from the law firm, Eydelman and conspirators Metro and Tamayo netted more than $5.6 million in illicit profits.
Eydelman faces a maximum potential penalty of five years in prison and a fine of $250,000 on the conspiracy count and a maximum potential penalty of 20 years in prison and a fine of $5 million on the securities and tender offer fraud counts. He also must forfeit the proceeds of the criminal offenses. Sentencing is scheduled for Dec. 21, 2015.
Tamayo pleaded guilty to conspiracy and securities and tender offer fraud on Sept. 19, 2014. Metro has pleaded not guilty to the charges against him and is scheduled to go to trial before Judge Shipp on Feb. 8, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Robert Cohen and Joseph Sansone.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the U.S. Attorney’s Office in Newark and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, New Jersey, as well as Acting Chief Barbara Ward and Assistant U.S. Attorney Jafer Aftab of the Office’s Asset Forfeiture and Money Laundering Unit.
These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Broker-Dealer Admits Role in Scheme to Trade on Inside Information Stolen from Prominent Law FirmRead the Press Release
TRENTON, N.J. B A broker-dealer admitted today to participating in a five-year insider trading scheme that relied on information stolen from a prominent, international law firm, yielding net profits of more than $5.6 million, U.S. Attorney Paul J. Fishman announced.
Vladimir Eydelman, 43, formerly of Colts Neck, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.
According to documents filed in this case and statements made in court:
From 2009 to 2013, Eydelman, a broker-dealer employed first by Oppenheimer & Co. and most recently by Morgan Stanley, repeatedly traded on material nonpublic information provided to him by his brokerage client, Frank Tamayo, 42, of Brooklyn, New York, who, in turn, had obtained the inside information from his friend and former law school classmate, Steven Metro, 41, of Katonah, New York. Metro was the managing clerk of the New York office of Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions firms. The inside information divulged by Metro to Tamayo and, in turn, by Tamayo to Eydelman, related to corporate transactions, such as mergers and acquisitions or tender offers, in which the law firm represented a party or financial advisor to the transaction. As the law firm’s managing clerk, a litigation-related function, Metro did not personally work on most of the corporate transactions at issue. In most instances, Metro stole the inside information from the firm by scouring its computer system using search terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names and client-matter numbers.
After obtaining the information, Metro divulged it to Tamayo in person, usually meeting at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan. During such meetings, Metro provided Tamayo inside information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price once announced. Tamayo generally would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro.
After Tamayo received the inside information from Metro, Tamayo would meet with Eydelman, usually at a location near Eydelman’s workplace, such as under the large clock in New York City’s Grand Central Terminal, where Tamayo would pass it on to Eydelman. Tamayo would show Eydelman the paper or napkin on which Tamayo had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo then would place the paper or napkin into his mouth and chew it until it was destroyed.
After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s source at a law firm, Eydelman purchased securities for himself, family members, friends, and clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.
Throughout the course of the five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to cash out his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate his law firm source, Metro, for providing them inside information.
By exploiting the information that Metro had stolen from the law firm, Eydelman and conspirators Metro and Tamayo netted more than $5.6 million in illicit profits.
Eydelman faces a maximum potential penalty of five years in prison and a fine of $250,000 on the conspiracy count and a maximum potential penalty of 20 years in prison and a fine of $5 million on the securities and tender offer fraud counts. He also must forfeit the proceeds of the criminal offenses. Sentencing is scheduled for Dec. 21, 2015.
Tamayo pleaded guilty to conspiracy and securities and tender offer fraud on Sept. 19, 2014. Metro has pleaded not guilty to the charges against him and is scheduled to go to trial before Judge Shipp on Feb. 8, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Robert Cohen and Joseph Sansone.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the U.S. Attorney’s Office in Newark, and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, as well as Acting Chief Barbara Ward and Assistant U.S. Attorney Jafer Aftab of the Office’s Asset Forfeiture and Money Laundering Unit.
These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Brighton Man Pleads Guilty in Child Pornography CaseRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Joseph Lamica, 26, of Brighton, NY, pleaded guilty to knowing receipt of child pornography, before U.S. District Judge Elizabeth A. Wolford. The charge carries carry a minimum of five years in prison, a maximum penalty of 20 years, and a $250,000 fine.Assistant U.S. Attorney Tiffany H. Lee, handled the case, stated that Lamica was a babysitter who advertised his services on Care.com and Craigslist.com. A family the defendant was working for discovered that Lamica was engaging in inappropriate behavior with nine-year-old son and terminated the babysitting contract. Thereafter, the defendant attempted to approach the boy at school.
The Monroe County Sheriff’s Office obtained a search warrant and searched Lamica’s residence. Deputies found materials and notebooks with writings expressing the defendant’s interest in young boys. Another search warrant was obtained for Lamica’s digital media hardware which contained images of child pornography, and a video of another minor the defendant babysat in 2014.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation's Child Exploitation Task Force which includes the Monroe County Sheriff’s Office, the Rochester Police Department, and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
Sentencing is scheduled for December 14th at 2:00 p.m. Judge Wolford.
Brevard County Heroin Dealer Sentenced to 15 Years in PrisonRead the Press Release
Orlando, FL – Senior U.S. District Judge Kendall Sharp today sentenced Antwon Sexton (37, Cocoa) to 15 years in federal prison for conspiracy to possess with the intent to distribute more than 100 grams of heroin. He pleaded guilty on May 28, 2015.
According to court documents, Sexton was a heroin dealer in Brevard County and had at least one source of supply in New Jersey. He managed at least five others who acted as drivers and/or street level dealers and who also helped him obtain and distribute heroin. During the investigation, agents purchased heroin from Sexton and identified several of his customers.
On March 4, 2015, Sexton arrived in downtown Orlando on a train that had originated in New Jersey. When Sexton departed the train, agents saw that he was carrying a duffle bag. He then got into a van and left the train station. During a traffic stop, agents searched the van and located more than 300 grams of heroin in Sexton’s duffle bag. During the investigation, agents linked Sexton to more than 600 grams of heroin.
This case was investigated by the Drug Enforcement Administration, the Brevard County Sheriff’s Office, and the Titusville Police Department. It was prosecuted by Assistant United States Attorney David Haas.
Baltimore Woman Indicted for Allegedly Stealing Almost $200,000 in Social Security BenefitsRead the Press Release
Baltimore, Maryland – A federal grand jury indicted Patricia Green Jackson, age 63, of Baltimore, for theft of government property and other charges arising from a scheme to steal social security benefits. The indictment was returned on September 15, 2015.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.
According to the two-count indictment, Jackson was a friend of J.W. and a co-signer on J.W.’s bank account. J.W. began receiving retirement benefits from the Social Security Administration (SSA) in 1986, which were paid by direct deposit to her bank account. J.W. died on December 31, 1997. SSA was not aware of J.W.’s death, and continued to make monthly payments of J.W.’s retirement benefits until March 2015.
According to the indictment, after J.W.’s death Jackson used a debit card to withdraw and spend J.W.’s monthly SSA retirement benefits. At the time J.W.’s benefits were suspended in 2015, SSA was paying $1,087 per month in benefits and paid a total of $196,323 in unauthorized benefits after J.W.’s death in 1997. The indictment alleges that not only did Jackson steal those funds, but she concealed J.W.’s death so that SSA would continue to pay J.W.’s retirement benefits.
Jackson faces a maximum sentence of 10 years in prison for theft of government property and a maximum of five years in prison for SSA benefit fraud. No court appearance has been scheduled.
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 commended the Social Security Administration - Office of Inspector General for its work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Lauren E. Perry, who is prosecuting the case.
Austin Couple Sentenced for Producing Sexually Explicit Videos and Images of Two GirlsRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of ANTHONY DOANE EDGE, 36, and DEBORAH SUSAN EDGE, 37, each of whom pleaded guilty to manufacturing child pornography. The defendants were sentenced yesterday before Senior U.S. District Judge Michael Davis in U.S. District Court in Minneapolis, Minn.
According to the defendants’ guilty pleas and documents filed in court, sometime between October 6, 2013, and March 27, 2014, A. EDGE and D. EDGE used a six-year-old minor for the purpose of making a sexually explicit video of the minor’s genitals and pubic area.
According to the defendants’ guilty pleas, A. EDGE made child pornography videos of two young girls in the bathroom of his home using pin-hole cameras disguised to look like household objects, one in the shape of a plastic coat hook and one in the shape of an ink pen. D. EDGE participated in making a child pornography video of one of the young girls. Moreover, more than one thousand suspected images of child pornography were recovered from computers seized at the Edge residence, including many depictions of the sexual exploitation of pre-pubescent children and infants.
This case is the result of an investigation by the Minnesota Bureau of Criminal Apprehension and the Austin Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
If you know of any child who may have been a victim of exploitation, please call the National Center for Missing or Exploited Children (NCMEC) at 1-800-THE-LOST (1-800-843-5678) or visit NCMEC’s web site at www.missingkids.com.
Assistant U.S. Attorneys Katharine T. Buzicky and Carol M. Kayser prosecuted this case.
Defendant Information:
ANTHONY DOANE EDGE, 36
Austin, Minn.
Convicted:
- Production of child pornography, 1 count
Sentenced:
- 25 years in federal prison
DEBORAH SUSAN EDGE, 37
Austin, Minn.
Convicted:
- Production of child pornography, 1 count
Sentenced:
- 10 years in federal prison
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Arizona Department of Public Safety Receives over $40 Million in Federal Grant FundsRead the Press Release
PHOENIX – Today, U.S. Attorney John S. Leonardo announced that $40,786,191 has been awarded to the Arizona Department of Public Safety. These funds will, among other things, be used to provide direct services to crime victims. The funds were awarded by the Office for Victims of Crime (“OVC”), which is a component of the Department of Justice’s Office of Justice Programs (“OJP”).
“The Arizona Department of Public Safety is one of our key law enforcement partners, and we are pleased that the Department of Justice has allocated over $40 million in federal funds to supplement its important work in Arizona,” said Leonardo. “We encourage all agencies to be proactive and apply for future law enforcement grant funding through our Office of Justice Programs.”
"As the state's designated recipient of federal Victims of Crime Act Grants, the Arizona Department of Public Safety realizes that this year’s funding will surpass any level of funding that the agency has ever seen. Our employees also understand the responsibilities associated with this funding and are working hard to distribute these funds to service those most in need” said Col. Frank Milstead, Director of the Arizona Department of Public Safety.
Additional information about OVC and its programs is available at: http://www.ovc.gov/.
Information about OJP and its programs can be found at: http://www.ojp.usdoj.gov.
Learn more about the Arizona Department of Public Safety link: http://www.azdps.gov/.
RELEASE NUMBER: 2015-079_AZ _Dept_Pub_Safety (2015-VA-GX-0032)
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
10th Annual National Prescription Drug Take-Back Day Saturday, September 26, 2015Read the Press Release
Oklahoma City – U.S. Attorney Sanford C. Coats wants to encourage the public to participate in the Drug Enforcement Administration’s 10th National Prescription Drug Take-Back Day set for Saturday, September 26, 2015, from 10:00 a.m. to 2:00 p.m.
"Prescription drug abuse constitutes one of the greatest public safety and public health epidemics of our time, inflicting devastating, long-term, harm to individuals as well as destroying families and communities throughout the country," said U.S. Attorney Sanford C. Coats. "We can all do our part to fight this epidemic by cleaning out our medicine cabinets of unwanted, unneeded, or expired prescription drugs for safe disposal at one of the many collection sites."
Last September, Americans turned in 309 tons (over 617,000 pounds) of prescription drugs at nearly 5,500 sites operated by the DEA and more than 4,000 of its state and local law enforcement partners. When those results are combined with what was collected in its previous Take Back events, DEA and its partners have taken in over 4.8 million pounds—more than 2,400 tons—of pills.
This initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—both pose potential safety and health hazards.
Collection sites will be set up throughout communities nationwide.
*******media Advisory*******Read the Press Release
ALBUQUERQUE – Officials from the Department of Justice and Department of the Interior (Interior) will hold a press conference on THURSDAY, SEPTEMBER 17, 2015, to announce a landmark settlement with a nationwide class of tribes and tribal entities.
WHO: Principal Deputy Assistant Attorney General Benjamin C. Mizer Head of the Justice Department’s Civil Division
U.S. Attorney Damon P. Martinez of the District of New Mexico
DOI Assistant Secretary – Indian Affairs Kevin K. Washburn
President David Jose of Ramah Navajo Chapter
President John Yellowbird Steele of Oglala Sioux Tribe
Governor Val R. Panteah Sr. of Pueblo of Zuni
Michael P. Gross, M.P. Gross Law Firm P.C.
C. Bryant Rogers, partner in VanAmberg, Rogers, Yepa, Abeita, Gomez and Works LLP
Lloyd B. Miller, partner in Sonosky Chambers Sachse Miller & Munson
WHEN:THURSDAY, SEPTEMBER 17, 2015 11:00 a.m. MDT / 1:00 p.m. EDT
WHERE:U.S. Attorney’s Office of the District of New Mexico
201 Third Street NW
10th Floor Multi-Media Room (Reception on Ninth Floor)
Albuquerque, NM 87102
OPEN PRESS
NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials (which must be worn around the neck or pinned to clothing at all times). Media may begin to arrive at 10:00 a.m. MDT. Members of the media must RSVP for the above event to Nicole Navas at [email protected] and Elizabeth Martinez at [email protected] by Thursday, September 17, at 9:00 a.m. EDT. Please include your name, outlet, position, phone number and email address. Inquiries regarding logistics should be directed to Alyssa Ferda at 505-224-1480 or [email protected].
15 September 2015
White Mountain Apache Tribe Receives Nearly $290,000 in Federal Grant Funds to Support Sex Offender Registration and Notification EffortsRead the Press Release
PHOENIX – Today, U.S. Attorney John S. Leonardo announced that $282,014 in additional grant funds have been made available to the White Mountain Apache Tribe to support, maintain, and refine jurisdiction-wide programs and functions under the Sex Offender Registration and Notification Act (“SORNA”). These funds will assist in improving victim notification services, providing educational services, and increasing service capacity. The grant funds were awarded by the Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (“SMART”) Office, which is a component of the Department of Justice’s Office of Justice Programs (“OJP”).
Information about OJP and its programs can be found at: http://www.ojp.usdoj.gov.
RELEASE NUMBER: 2015-071_WHITE MTN GRANT (2015-AW-BX-0017)
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Utah Cities Get Department of Justice Grants to Support Police Departments, Serve CommunitiesRead the Press Release
SALT LAKE CITY – The Department of Justice has awarded grants to several Utah cities under the Edward Byrne Memorial Justice Assistance Grant (JAG) Program. The JAG Program is the primary provider of federal criminal justice funding to state and local jurisdictions and supports a range of program areas including law enforcement, prosecution and court programs, prevention and education programs, corrections and community corrections, drug treatment and enforcement, crime victim and witness initiatives, and planning, evaluation, and technology improvement programs.
Among the cities receiving local solicitation grants this year are West Valley City, Layton, Sandy, Provo, Ogden, West Jordan, Salt Lake City, South Salt Lake City, and Murray. The Utah Commission on Crime and Juvenile Justice (CCJJ) received a JAG grant of $1,421,840 under the state solicitation portion of the grant program.
“This program allows cities to apply for grant funds to address local needs and to support a broad range of local initiatives. Our communities are using the funding to increase officer safety, build transparency between police officers and the communities they serve, and to reduce crime in our neighborhoods. Grant recipients are also using funds to target specific issues we face in Utah, such as prescription drug abuse, domestic violence, and gang violence,” U.S. Attorney for Utah John W. Huber said today. The grants are awarded through DOJ’s Bureau of Justice Assistance.
CCJJ will used its JAG funds to enhance statewide public safety services, support of the Utah Residential Substance Abuse Treatment (RSAT) program; and continue other evidence-based projects that support the juvenile justice system, among other things. CCJJ’s JAG priority areas include addressing gang prevention/education or enforcement, prescription drug abuse prevention/education or enforcement, sexual assault or domestic violence, mental health courts and problem solving courts.
West Valley City will receive $90,892 to purchase body cameras for officers. The goals of the grant funding include facilitating transparency and fostering relationships of trust between officers and citizens of the city.
Layton will receive $13,529 to purchase equipment to increase officer safety and to help provide effective service to city residents and Davis County.
Sandy will also use its $19,579 grant to buy equipment, including in-car video camera systems, to provide increased safety for officers and help reduce crime.
Provo will use its $22,532 grant to enhance officer safety and to protect residents of the city. Purchases will include upgrading computers and software. Funds also will be used to purchase Tasers.
Ogden intends to use its $56,117 grant to purchase body cameras and provide training as a part of the city’s participation in multi-jurisdictional law enforcement efforts.
West Jordan will receive $29,487 to purchase law enforcement equipment, including hand-held radios, to improve the capability of police officers.
Murray intends to use its award of $26,439 to purchase digital in-car cameras to improve the capabilities of first responders in the city.
South Salt Lake City will use its $27,963 grant to purchase body cameras for officers.
Salt Lake City will receive a grant of $291,397 to support the Salt Lake City Police Department’s Explorer Program and the Salt Lake Peer Court. The funding will be used to provide equipment and technology, training for civilians and sworn officers, and organizing enforcement and community overtime projects.
Taylorsville, awarded $29,916, will use its grant money to purchase bicycles, lasers, printers, first aid equipment, surveillance equipment, digital cameras, and safety supply handouts for presentations. The updated equipment will help improve neighborhoods security in Taylorsville.
Two Sentenced to Prison for Trafficking More Than Five Pounds of MethRead the Press Release
BUTTE – A federal judge sentenced two defendants on Tuesday for attempting to transport more than five pounds of methamphetamine into Montana. Ismael Melin, 40, of Long Beach, California was sentenced today to 87 months in federal prison for possession with intent to distribute methamphetamine. Jose Luis Montano-Espericueta, 38, also of Long Beach, was sentenced today to 36 months in federal prison for possession of meth with the intent to distribute. Upon release from prison, both defendants will be remanded to the Bureau of Immigration and Customs Enforcement for deportation to Mexico. Chief U.S. District Court Judge Dana Christensen presided over the proceedings.
In an Offer of Proof filed by Assistant U.S. Attorney Bryan Whittaker, the government stated that if the case had proceeded to trial, the government would have proven that between September 2013 and February 2015, Melin and Montano-Espericueta possessed, with intent to distribute, 500 grams or more of methamphetamine, a Schedule II controlled substance. In January of 2015, agents of the Northwest Drug Task Force set up an ostensible drug deal through use of a Confidential Informant. During the exchange, which took place on February 6, agents obtained from the defendants a cooler in which was concealed approximately five pounds of methamphetamine. The defendants were arrested and during subsequent interviews admitted that they had driven from California to Montana for the purpose of transporting and distributing the methamphetamine in Montana.
The defendants had requested sentences significantly below the recommended guideline range. The United States had argued for sentences within the guideline range based on the extremely large amount of methamphetamine and the profound social and economic toll caused by the drug in Montana.
Assistant U.S. Attorney Bryan Whittaker prosecuted the cases. The crimes were investigated by the Northwest Drug Task Force. The defendants will have to serve at least 85% of their sentences before being released from federal prison.
Two Defendants Plead Guilty in Manhattan Federal Court for Their Roles in Orchestrating $18.5 Million Mortgage Modification Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that PED ABGHARI, a/k/a “Ted Allen,” and JUSTIN ROMANO pled guilty for their roles in orchestrating a massive mortgage modification scheme that collectively defrauded over 8,000 homeowners out of over $18.5 million. ABGHARI and ROMANO each pled guilty to wire fraud and conspiracy to commit wire fraud, and ABGHARI also pled guilty to misprision of a felony. ROMANO pled on September 14, 2015, and ABGHARI pled on September 15, 2015, before U.S. District Judge. John F. Keenan.
Manhattan U.S. Attorney Preet Bharara said: “As they have now admitted, Ped Abghari and Justin Romano took advantage of thousands of homeowners under water with debt and in need of assistance from the Home Affordable Modification Program and similar mortgage modification programs. Instead of helping to lift desperate homeowners out of debt, Abghari and Romano pushed them deeper in through exorbitant fees for mortgage modification services they never intended to provide. More than 8,000 homeowners were victimized by the defendants’ greed, but thanks to the extraordinary efforts of the Office of the Special Inspector General for the Troubled Asset Relief Program, those victims now can find some comfort in knowing that those who preyed on their suffering have been forced to admit to their crimes.”
According to the Indictment, and statements made at the plea proceedings:
The Home Affordable Modification Program
As a result of the financial crisis and collapse of the housing bubble in 2008, Congress enacted the Home Affordable Modification Program (“HAMP”), which was to be funded through the Troubled Asset Relief Program (“TARP”). HAMP permits qualified home owners to obtain mortgage relief. Specifically, HAMP seeks to prevent foreclosure by modifying troubled loans to achieve monthly payments the homeowner can afford.
Pursuant to HAMP, any homeowner may apply to his or her mortgage provider by completing a short form and submitting it, along with supporting paperwork, to the homeowner’s mortgage provider. HAMP further sets guidelines for lenders to follow in determining eligibility, such as guidelines based on the homeowner’s income and the principal balance remaining on the mortgage. Pursuant to HAMP, only a homeowner’s lender may determine the homeowner’s eligibility for a modification and, if appropriate, the modified rate and monthly payment for which the homeowner is eligible.
HAMP applications are readily available online as well as in many local banks. Submitting an application is, by law, free of charge to the homeowner. Virtually all mortgage providers are required to participate in the HAMP program and accept HAMP applications.
If a HAMP applicant is approved, he or she receives a reduced monthly mortgage payment set by the lender. If the HAMP applicant is not eligible for a modification, the application may be rejected. Common reasons for rejection of a HAMP application include that the homeowner earns too much income to qualify or has not demonstrated sufficient financial hardship or need for a modification.
Mortgage Modification Fraud
PED ABGHARI, a/k/a “Ted Allen,” was a president and owner of an Irvine, California, company that offered purported mortgage modification services (the “Telemarketing Firm”). JUSTIN ROMANO held himself out as the president of two purported law firms (the “Purported Law Firms”), based in Holbrook, New York, and Sayville, New York, which offered purported mortgage modification services in conjunction with the Telemarketing Firm.
From at least January 2011 through May 2014, through the Telemarketing Firm and the Purported Law Firms, ABGHARI and ROMANO, among others, perpetrated a scheme to defraud homeowners in dire financial straits who were seeking relief through HAMP and other mortgage relief programs. Through a series of false and fraudulent representations, the defendants duped thousands of homeowners into paying thousands of dollars each in up-front fees in exchange for little or no service from the defendants or their companies. In total, through their scheme, the defendants obtained over $18.5 million from more than 8,000 victim-homeowners throughout the United States.
Through the Telemarketing Firm, ABGHARI and others purchased thousands of “leads,” consisting of the name, address, and other contact information of homeowners who had fallen behind in making mortgage payments on their homes. ABGHARI and others then caused the Telemarketing Firm to send, by e-mail, false and fraudulent solicitation letters to the homeowners they identified through the “leads,” misleading these homeowners into believing that their mortgages were already under review and that new, modified rates had already been contemplated and approved by the homeowners’ lenders.
At the direction of ABGHARI and ROMANO, among others, the Telemarketing Firm’s telemarketer and sales people (the “Sales Staff”) called homeowners and/or answered telephone calls from homeowners who received the Telemarketing Firm’s fraudulent solicitations. During these calls, in an effort to convince the homeowners to pay up-front fees, the defendants, through the Sales Staff, regularly caused various false and fraudulent representations to be made to homeowners, including that (a) the homeowners were retaining a “law firm” and an “attorney” who would complete the HAMP application and negotiate aggressively on the homeowners’ behalf with banks to modify the terms of the homeowners’ mortgages; (b) the defendants would “pre-approve” the homeowners for a guaranteed modification through HAMP; (c) the defendants employed underwriters who would calculate and guarantee the homeowners a new, modified rate and monthly mortgage payment; and (d) the defendants’ mortgage modification services were free, and the up-front fees paid by the homeowners would be paid directly to the homeowners’ lenders. In truth and in fact, and as ABGHARI and ROMANO well knew, all of these representations were false and fraudulent.
* * *
ABGHARI, 38, of Irvine, California, and ROMANO, 41, of Blue Point, New York, each pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of twenty years in prison. ABGHARI also pled guilty to one count of misprision of a felony, which carries a maximum sentence of three years in prison. Sentencings for ABGHARI and ROMANO have been set for January 14, 2016.
The maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
The remaining defendant charged for his role in the scheme, Dionysius Fiumano, a/k/a “D,” is scheduled to begin trial on December 9, 2015, before Judge Keenan. The charges pending against Fiumano are merely allegations, and he is presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the Office of the Special Inspector General for the Troubled Asset Relief Program.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward B. Diskant and Joshua A. Naftalis are in charge of the prosecution.
Trivillian's Pharmacy sentenced for federal healthcare and drug crimesRead the Press Release
Former Owner Paula Butterfield Sentenced to One Year and One Day in Federal Prison
Charleston, W.Va. – United States Attorney Booth Goodwin announced that Trivillian’s Pharmacy, a long-standing Kanawha City retail and compounding pharmacy, was sentenced today in federal court in Charleston to three years of probation. Trivillian’s Pharmacy had previously entered guilty pleas on February 25, 2015, to healthcare fraud and misbranding drugs. Trivillian’s Pharmacy admitted it defrauded Medicare and Medicaid by dispensing compounded drugs while billing for more expensive brand name drugs, dispensing generic drugs while billing for more expensive brand name drugs, billing for drugs that were never dispensed and dispensing drugs that were compounded outside of a safe and clean environment. Trivillian’s Pharmacy also admitted to dispensing compounded drugs under labels and identification numbers associated with name brand drugs. As part of the plea, Trivillian’s Pharmacy agreed to make restitution to the Medicare and Medicaid programs in the amount of $355, 312.19**, and to forfeit an additional $355,312.19 of proceeds of the fraud schemes to the United States.
Paula J. Butterfield, the former owner and president of Trivillian’s Pharmacy was also sentenced to one year and one day in federal prison, followed by three years of supervised release. Butterfield, who was insured by Medicare, previously pleaded guilty to causing Trivillian’s Pharmacy to bill Medicare for drugs that were never dispensed to her. Butterfield has agreed make restitution to Medicare in the amount of $5,106.90.
Goodwin’s office has also reached a civil settlement with Trivillian’s Pharmacy under the federal False Claims Act, through which the United States recovered an additional $1.1 million for Medicare and Medicaid. The settlement amount represents more than three times the losses suffered by these federal healthcare programs. Between Trivillian’s Pharmacy and Butterfield, a total of more than $1.4 million will be paid through the civil settlement, criminal restitution and asset forfeiture.
Goodwin said, “Pharmacists and pharmacies hold positions of trust in our communities. Patients trust them to provide the medicines they need and bill correctly for the medicines they dispense. The crimes committed in this case represent a substantial breach of that trust. Here, the pharmacist and the pharmacy she owned were held accountable for their crimes and the programs they stole from were made whole. This should send a message to others who would engage in such conduct.”
The investigation was conducted by the United States Health and Human Services, the FDA, the Drug Enforcement Administration, the West Virginia State Police, and the West Virginia Medicaid Fraud Control Unit. Assistant United States Attorney Eumi Choi was in charge of the prosecution. Assistant United States Attorney John Gianola is responsible for the civil settlement.
** The pharmacy gets credit towards restitution for this amount based on its payments to date under the civil settlement.
Topsfield Man Pleads Guilty to Tax and Bankruptcy Fraud ChargesRead the Press Release
BOSTON – A Topsfield man pleaded guilty today in connection with evading nearly $400,000 in federal income taxes and false statements he made in bankruptcy filings.
Robert P. Bonefant, Jr., 57, pleaded guilty to two counts of tax evasion, three counts of filing a false tax return, and three counts of bankruptcy fraud for making false statements. U.S. District Chief Judge Patti B. Saris scheduled sentencing for Dec. 18, 2015.
In late 2008, the IRS assessed Bonefant for $194,430 in taxes owed for tax years 2004 and 2005. Thereafter, Bonefant took steps to prevent the IRS from learning of his true income and determining his actual tax liabilities. He did so by, among other things, depositing $1 million into his father’s bank accounts, including both taxable income and non-taxable business expense reimbursements. Bonefant also filed three federal income tax returns that failed to report significant income he had received for tax years 2009, 2011, and 2012. Additionally, he failed to file taxes for 2010. In total, including the amounts assessed for 2004 and 2005 and the amounts owed for 2009 through 2012, Bonefant failed to pay approximately $386,984 in taxes.
In 2012, Bonefant filed a chapter 7 bankruptcy case in Massachusetts seeking to discharge various debts, including the outstanding 2004 and 2005 federal tax liability. In documents filed with the Bankruptcy Court, and which he signed under the penalty of perjury, Bonefant made false statements concerning his income and assets, as well as his use of his father’s bank accounts.
The charge of tax evasion provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. The charge of filing a false tax return provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $250,000. The charge of bankruptcy fraud provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Trustee’s Office in Boston also provided assistance with this case. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Third Defendant Sentenced in Illegal Deer Trafficking CaseRead the Press Release
COLUMBUS, Ohio – Benjamin N. Chason, 61, of Climax, Ga. pleaded guilty and was sentenced in U.S. District Court for three charges related to violating the Lacey Act. Chason was ordered to pay $1.6 million in fines and restitution, the largest sum of money ordered of an individual to pay for a wildlife crime in the United States.
Of the $1.6 million, $600,000 is to be paid into the Ohio Department of Natural Resources Wildlife Habitat Fund $200,000 to the Federal Endangered Species and Wildlife Diversity Fund, $400,000 to Columbus and Franklin County Metro Parks and $100,000 to the Ohio DNR Division of Wildlife Turn in a Poacher (TIP) program.
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 sentence, which was unsealed yesterday.
According to court documents, Chason and co-conspirator Donald W. Wainwright, Sr., 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. Donald Wainwright, Jr. was part-time resident and part-time operator of the site in Ohio. Chason was part-owner of Valley View Whitetails in Ohio and also owned an extensive high-fenced property containing white-tailed deer in Climax, Ga.
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 shipments of deer to be certified to be disease-free; because the deer in the present case were not certified as disease-free, deer herds (both captive and wild) in Florida were potentially exposed to these diseases. Tuberculosis and brucellosis can also be transmitted from deer to cows and humans.
The attempted shipment to Georgia was intercepted on I-71 South, about 50 miles from the Ohio River, when Ohio Division of Wildlife officers noticed deer noses and antlers inside a cargo trailer and pulled over a truck driven by Wainwright Sr.’s employees.
Wainwright Sr. and Chason placed federal identification tags from a certified deer that had previously died into the ear of an uncertified deer they were selling. They 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.
“Illegal sale and transport of white-tailed deer are serious crimes and I appreciate the teamwork and cooperation between all of the agencies involved to help obtain these convictions,” ODNR Division of Wildlife Chief Scott Zody said.
"We are pleased to see the positive results in this investigation. The U.S. Fish and Wildlife Service, Office of Law Enforcement considers the potential spread of disease caused by the illegal commercialization of fish and wildlife resources a high priority, and we will continue to work closely with our State partners to assist them in these important investigations," said Edward Grace, U.S. Fish and Wildlife Service Deputy Assistant Director for Law Enforcement.
Chason pleaded guilty on May 1, 2014. Besides being ordered to pay restitution, Chason was sentenced to three years of probation and four months of home confinement. Chason also agreed to publish a statement in North American Whitetail Magazine and perform 150 hours community service in an Ohio or Georgia State Park.
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 sentenced to 21 months in prison, a $125,000 fine 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 offering illegal hunts in violation the Lacey Act and was sentenced to four months of house arrest and three years of probation.
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 J. Michael Marous and Peter Glenn-Applegate, who represented the United States in this case.
Texas Man Pleads Guilty to Federal Hate Crime Against Gay African American ManRead the Press Release
A Texas man has pleaded guilty to hate crime offenses for his role in a Mar. 8, 2012, assault of a gay African American man in Corpus Christi, Texas, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Department of Justice’s Civil Rights Division, and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Ramiro Serrata Jr., 22, pleaded guilty in federal court in Corpus Christi to one count of conspiracy to commit hate crimes and one count of a hate crime violation based on sexual orientation.
During the plea hearing, Serrata admitted that he and others conspired to assault a gay African American man because of his race, color and sexual orientation. Serrata admitted that during the assault, he and his co-conspirators punched and kicked the man and assaulted him with various dangerous weapons, including a frying pan, a mug, a sock filled with batteries, a broom and a belt.
Serrata admitted that when the victim began to bleed, the conspirators forced him to remove all of his clothing and clean up the blood throughout the apartment. After the victim was completely naked, one of the conspirators pointed a gun at the victim, while Serrata sodomized him with a broom. During the assault, the conspirators poured bleach onto the man’s face and eyes, pistol-whipped him with a handgun and whipped him with a belt.
Serrata acknowledged that throughout the assault, the conspirators repeatedly called the victim racial and homophobic slurs and made other anti-black and anti-gay statements. The conspirators also prevented the man from leaving the apartment by physical force and threats of force. The victim eventually escaped the apartment by jumping out of a window.
Serrata will be sentenced on Dec. 9, 2015, and faces a maximum sentence of fifteen years in prison. Serrata is incarcerated pending sentencing.
Jimmy Garza Jr. is also charged with related hate crimes in connection to this offense. His trial is scheduled for Sept. 29, 2015. He has pleaded not guilty, and is presumed innocent unless and until proven guilty.
This case was investigated by the FBI’s Corpus Christi Resident Agency with assistance from the Corpus Christi Police Department and is being prosecuted by Trial Attorneys Jared Fishman and Nicholas Durham of the Civil Rights Division and Assistant U.S. Attorney Ruben Perez of the Southern District of Texas.
Tennessee Woman Pleads Guilty to Filing False Tax ClaimRead the Press Release
A Nashville, Tennessee, resident pleaded guilty to filing a false claim with the U.S. government, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney David Rivera of the Middle District of Tennessee.
According to court documents and statements at the plea hearing, Karen Liane Miller, 60, admitted that from in or about August 2008 until in or about July 2009, she knowingly prepared and submitted to the Internal Revenue Service (IRS) multiple false federal income tax returns on behalf of her friends, family and herself. The returns reported false amounts of taxable income on attached Forms 1099-OID (Original Issue Discount) and Forms 1099-A that Miller created and fraudulently represented to have been issued by financial institutions. The returns also reported identical or near-identical false amounts of federal income tax withheld from the fictitious income to generate claims for tax refunds that were significantly higher than what the taxpayers were entitled to receive. Miller filed 48 fraudulent tax returns that falsely claimed more than $19.8 million in refunds. The IRS issued $1,003,238 in refunds for eight of the 48 fraudulent returns.
The sentencing hearing is set for Jan. 8, 2016. Pursuant to the plea agreement, Miller faces a potential statutory maximum sentence of five years in prison, restitution in the amount of $1,003,328 to the IRS and a fine.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rivera commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Alexander R. Effendi and Nathan P. Brooks of the Tax Division and Assistant U.S. Attorney Carrie Daughtrey, who are prosecuting the case.
Six-Time Cedar Rapids Felon Sent to Prison for the Maximum Ten Years for Possessing a Firearm and AmmunitionRead the Press Release
A convicted felon who possessed a firearm and ammunition on the streets of Cedar Rapids in March was sentenced yesterday to ten years in federal prison, the statutory maximum sentence possible for his crime.
Gregg Morris McGee a/k/a “Jimmy Ray Williams” a/k/a “Mykiel Lewis” a/k/a “Calvin McGee,” age 38, from Cedar Rapids, Iowa, received the prison term after a June 8, 2015, guilty plea to one count of possessing a firearm and ammunition as a felon.
At the guilty plea hearing, McGee admitted that he knowingly possessed a Glock Model 17, 9mm pistol and Remington-Peters 9mm ammunition. At the plea hearing, McGee also admitted to six prior felony convictions in state court for theft in the second degree, forgery, and possession of a simulated controlled substance with intent to deliver.
McGee was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade to 120 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. McGee is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the FBI’s Safe Streets Task Force.
Court file information available: https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-00040.
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Shreveport optometrist pleads guilty to illegally writing prescriptionsRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Shreveport optometrist pleaded guilty Monday to writing prescriptions for non-patients and non-medical purposes.
Charles D. Shanks, 63, of Shreveport, entered a conditional guilty plea before U.S. Magistrate Judge Mark L. Hornsby for one count of distributing or dispensing a controlled substance. The plea will become final when accepted by U.S. District Judge Donald E. Walter. According to evidence presented at the guilty plea, Shanks, a Shreveport optometrist, wrote dozens of prescriptions for codeine and hydrocodone in 2012 and 2013 from pharmacies and wholesale distributors that were for non-patients and not for valid medical purposes.
Shanks faces up to 10 years in prison, two years of supervised release and a $500,000 fine. A sentencing date of January 11, 2016 was set.
The DEA conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Seven Wichita Area Residents Charged with Federal Unemployment Benefits FraudRead the Press Release
WICHITA, KAN. - Seven Wichita area residents were indicted in separate cases Tuesday on federal charges of fraudulently receiving unemployment benefits, U.S. Attorney Barry Grissom said.
The indictments allege each of the defendants submitted false information to the Kansas Department of Labor in order to receive unemployment benefits to which they were not entitled.
Each of the defendants was charged with one count of wire fraud. The defendants include:
John C. Hutchinson, 36, Wichita, who worked for The Specialists Group, LLC and Home Depot USA Inc., and is alleged to have fraudulently received $25,888 in benefits.
Ricky J. Henderson, 32, Wichita, Kan., who worked for CNH America, LLC, and is alleged to have fraudulently received $12,405 in benefits.
Edward L. Schwartz, 46, Colwich, Kan., who worked for CNH America, LLC, and Angela D. Schwartz, 41, Colwich, Kan. They are alleged to have fraudulently received $10,320 in benefits.
Terrance Turner, 32, Wichita, Kan., who worked for CNH America, LLC, and is alleged to have fraudulently received $10,879 in benefits.
David J. Smith, 34, Wichita, Kan., who worked for CNH America, LLC, and is alleged to have fraudulently received $9,582 in benefits.
Ignacio Calderon, 49, Wichita, Kan, who worked for CNH America, LLC, and is alleged to have fraudulently received $15,401 in benefits.
If convicted, the defendants face a maximum penalty of 20 years in federal prison and a fine up to $250,000. The Kansas Department of Labor investigated. Assistant U.S. Attorney Alan Metzger and Assistant U.S. Attorney Matt Treaster are prosecuting.
OTHER INDICTMENTS
Brandon L. Hutchinson, 30, Wichita, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Aug. 13, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Lanny Welch is prosecuting.
Jose Francisco Beltran, 39, Tucson, Ariz., is charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred Aug. 27, 2015, in Lincoln County, Kan.
If convicted, he faces a penalty of not less than 10 years in federal prison and a fine up to $4 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.
Martin A. Garcia-Corona, 23, and Ana L. Armenta, 31, are charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred Sept. 3, 2015, in Sedgwick County, Kan.
If convicted, they face a penalty of not less than 10 years and a fine up to $4 million. The Wichita Police Department investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
Joel Zamarripa-Favela, 28, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported. He was found Sept. 3, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Fernando Delgado-Ornales, 39, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported. He was found Aug. 10, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Roberto Castro-Alaniz, 39, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported. He was found Aug. 27, 2015, in Seward County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Seven Indicted for Allegedly Staging Dozens of Car Accidents in a $1.2 Million Insurance Fraud SchemeRead the Press Release
FRESNO, Calif. — Four of seven defendants were arrested today on federal charges related to their alleged involvement in a scheme that defrauded insurance companies of at least $1.2 million by staging car crashes and submitting false insurance claims, United States Attorney Benjamin B. Wagner announced.
A federal grand jury returned the sealed indictment on August 27, 2015, which was unsealed after the arrests today.
The indictment charges Juan Ortiz Rivas, 38, of Ceres; Oscar Diaz Landa, 45, of San Jose; Victor Hugo Soriano-Villafan, 25, of Modesto; Liobigildo Vargas, 45, of Turlock; Juan Marquez Cadenas, 29, of Patterson; Cristopher Santiago Sanchez-Becerra, 31, of Stockton; and, Alfonso Apu, 47, of Modesto with conspiracy to commit mail fraud and mail fraud. Landa, Sanchez-Becerra, and Apu were arrested this morning at their residences, and Vargas was arrested at his business Vargas Auto Body in Turlock. Soriano-Villafan was arrested last week in Las Vegas and arraigned in U.S. District Court in Fresno.
According to court documents, from October 2011 until August 2014, the defendants conspired to stage dozens of car accidents and submit false claims seeking compensation for the damage caused by the staged accidents. In each staged accident, the defendants damaged two or three vehicles and caused about $5,000 to $10,000 of damage to each vehicle. After each staged collision, all parties involved submitted a similar cover story to an insurer that concealed the true cause of the accident and commonly used aliases, false identities, and false addresses. The defendants usually used different vehicles in the staged collisions by obtaining many different vehicles and using false identities to both register the vehicles with the Department of Motor Vehicles and obtain insurance policies for the vehicles.
The indictment further alleges that the defendants were able to repeat the scheme in dozens of crashes by recruiting other individuals in the staged collisions. These individuals would allow their vehicles to be damaged in a staged collision and submit their own claim for damages after receiving instructions from the defendants about the cover story to use. In many instances, false claims were submitted to the recruited individual’s insurance company. Commonly, the defendants would also offer to repair the recruited individual’s vehicle at one of their automobile repair shops, usually with less-than-complete repair work, for a fee less than the payment from an insurance company on the damaged vehicle.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Department of Insurance, Fraud Division. Assistant United States Attorneys Patrick R. Delahunty and Henry Z. Carbajal III are prosecuting the case.
If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of the indictment. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Scranton Man Sentenced to Prison for Use of an Interstate Communication Device to Entice A Minor to Engage in SexRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Scranton man was sentenced today in federal court in Scranton by United States District Judge Edwin M. Kosik to serve 60 months in prison on the charge of using an interstate communication device to entice a minor to engage in sexual activity.
According to United States Attorney Peter Smith, Hugo Perez Banda, age 28, pleaded guilty to utilizing the internet and a cellular device, to knowingly attempt to entice a minor to engage in sexual activity, in March 2015.
The charges were brought after Scranton Police received a complaint that Banda had communicated with a 14 year old minor using Facebook, and requesting the minor to both send photographs of her genital area to Banda over the internet, and to accompany Banda to a local motel in order to engage in sexual intercourse.
In addition to the prison term, Judge Kosik also ordered that Banda be supervised by a probation officer for five years following his release from prison. It is also noted that Banda is subject to deportation upon his release from prison.
The investigation was conducted by Homeland Security Investigations, the Pennsylvania State Police, and the Scranton Police Department. The case was prosecuted by Assistant United States Attorney Todd K. Hinkley.
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.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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Russian National Admits Role in Largest Known Data Breach Conspiracy Ever ProsecutedRead the Press Release
Hackers Targeted Major Payment Processors, Retailers and Financial Institutions Around the World
A Russian national today admitted his role in a worldwide hacking and data breach scheme that targeted major corporate networks, compromised more than 160 million credit card numbers and resulted in hundreds of millions of dollars in losses – the largest such scheme ever prosecuted in the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Director Joseph P. Clancy of the U.S. Secret Service made the announcement.
Vladimir Drinkman, 34, of Syktyvkar, Russia, and Moscow, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle of the District of New Jersey to one count of conspiracy to commit unauthorized access of protected computers and one count of conspiracy to commit wire fraud. Drinkman was arrested in the Netherlands on June 28, 2012, and was extradited to the District of New Jersey on Feb. 17, 2015. Sentencing is scheduled for Jan. 15, 2016.
“This hacking ring’s widespread attacks on American companies caused serious harm and more than $300 million in losses to people and businesses in the United States,” said Assistant Attorney General Caldwell. “As demonstrated by today’s conviction, our close cooperation with our international partners makes it more likely every day that we will find and bring to justice cyber criminals who attack America – wherever in the world they may be. As law enforcement around the world responds to the cyber threat that affects us all, I am confident that this type of international cooperation that led to this result will be the new normal.”
“Defendants like Vladimir Drinkman, who have the skills to break into our computer networks and the inclination to do so, pose a cutting edge threat to our economic well-being, our privacy and our national security,” said U.S. Attorney Fishman. “The crimes to which he admitted his guilt have a real, practical cost to our privacy and our pocketbooks. Today’s guilty plea is a tribute to the skill and perseverance of the agents and prosecutors who brought him to justice.”
“This cyber case highlights the effectiveness of global law enforcement partnerships in the detection and dismantling of criminal enterprises targeting U.S. citizens,” said Director Clancy. “The support of U.S. Attorney’s offices and the resulting plea enhances the Secret Service’s commitment to vigorously pursue transnational threats to the U.S. financial infrastructure.”
According to documents filed in this case and statements made in court, Drinkman and four co-defendants allegedly hacked into the networks of corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information that the conspirators could exploit for profit, including the computer networks of NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard.
According to the indictment in this case and statements made in court, the five defendants each played specific roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, allegedly specialized in penetrating network security and gaining access to the corporate victims’ systems. Drinkman and Roman Kotov, 34, of Moscow, allegedly specialized in mining the networks to steal valuable data. The hackers hid their activities using anonymous web-hosting services allegedly provided by Mikhail Rytikov, 28, of Odessa, Ukraine. Dmitriy Smilianets, 32, of Moscow, allegedly sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 34, of Miami, in connection with five corporate data breaches, including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: the first charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia in an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited on Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large.
The Attacks
According to documents filed in this case and statements made in court, the five defendants penetrated the computer networks of several of the corporate victims and stole user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired more than 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programming language designed to manage data held in particular types of databases; the hackers allegedly identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants allegedly placed malicious code (malware) in the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were allegedly able to regain access through persistent attacks.
Instant message chats obtained by law enforcement revealed that the defendants allegedly targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway, sometimes leaving malware implanted in multiple companies’ servers for more than a year.
The defendants allegedly used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then allegedly used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
According to documents filed in this case and statements made in court, after acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was allegedly in charge of sales, selling the data only to trusted identity theft wholesalers. He allegedly charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
According to documents filed in this case and statements made in court, the defendants allegedly used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allegedly allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants allegedly communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators allegedly attempted to meet in person.
To protect against detection by the victim companies, the defendants allegedly altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also allegedly worked to evade existing protections by security software.
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions of dollars in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.
The charges and allegations contained in indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the U.S. Secret Service’s Criminal Investigations Division and Newark, New Jersey, Division. The case is being prosecuted by Trial Attorney Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, Chief Gurbir S. Grewal of the District of New Jersey’s Economic Crimes Unit and Assistant U.S. Attorney Andrew S. Pak of the District of New Jersey. The Criminal Division’s Office of International Affairs, public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police also provided valuable assistance.
Drinkman Plea Agreement
Russian National Admits Role in Largest Known Data Breach Conspiracy Ever ChargedRead the Press Release
Hackers Targeted Major Payment Processors, Retailers and Financial Institutions Around the World
CAMDEN, N.J. – A Russian national today admitted his role in a worldwide hacking and data breach scheme that targeted major corporate networks, compromised more than 160 million credit card numbers and resulted in hundreds of millions of dollars in losses – the largest such scheme ever prosecuted in the United States.
The guilty plea was announced by New Jersey U.S. Attorney Paul J. Fishman, U.S. Secret Service Director Joseph P. Clancy and Assistant Attorney General Leslie Caldwell.
Vladimir Drinkman, 34, of Syktyvkar, Russia, and Moscow, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle of the District of New Jersey to one count of conspiracy to commit unauthorized access of protected computers and one count of conspiracy to commit wire fraud. Drinkman was arrested in the Netherlands on June 28, 2012, and was extradited to the District of New Jersey on Feb. 17, 2015.
“Defendants like Vladimir Drinkman, who have the skills to break into our computer networks and the inclination to do so, pose a cutting edge threat to our economic well-being, our privacy and our national security,” U.S. Attorney Fishman said. “The crimes to which he admitted his guilt have a real, practical cost to our privacy and our pocketbooks. Today’s guilty plea is a tribute to the skill and perseverance of the agents and prosecutors who brought him to justice.”
“This hacking ring’s widespread attacks on American companies caused serious harm and more than $300 million in losses to people and businesses in the U.S.,” said Assistant Attorney General Caldwell. “As demonstrated by today’s conviction, our close cooperation with our international partners makes it more likely every day that we will find and bring to justice cyber criminals who attack America – wherever in the world they may be. As law enforcement around the world responds to the cyber threat that affects us all, I am confident that this type of international cooperation that led to this result will be the new normal.”
“This cyber case highlights the effectiveness of global law enforcement partnerships in the detection and dismantling of criminal enterprises targeting United States citizens,” Director Clancy said. “The support of U.S. Attorney’s offices and the resulting plea enhances the Secret Service’s commitment to vigorously pursue transnational threats to the U.S. financial infrastructure”.
According to documents filed in this case and statements made in court:
Drinkman and four co-defendants hacked into the networks of corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information that the conspirators could exploit for profit, including the computer networks of NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard.
The five defendants each played specific roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, specialized in penetrating network security and gaining access to the corporate victims’ systems. Drinkman and Roman Kotov, 34, of Moscow, also a hacker, specialized in mining the networks to steal valuable data. The hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 28, of Odessa, Ukraine. Dmitriy Smilianets, 32, of Moscow, sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 34, of Miami, Florida, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: the first charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large.
The Attacks
The five defendants penetrated the computer networks of several of the corporate victims and stole user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired more than 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants placed malicious code, or malware, in the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were able to regain access through persistent attacks.
Instant message chats obtained by law enforcement revealed the defendants often targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway. The defendants had malware implanted in multiple companies’ servers for more than a year.
The defendants used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was in charge of sales, selling the data only to trusted identity theft wholesalers. He charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators attempted to meet in person.
To protect against detection by the victim companies, the defendants altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also worked to evade existing protections by security software.
* * *
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges. The charges and allegations contained in indictments against the remaining defendants are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The count of conspiracy to commit wire fraud in a manner affecting a financial institution to which Drinkman pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of the greatest of $1 million or twice the gain or loss from the offense. The count of conspiracy to gain unauthorized access to computers to which Drinkman pleaded guilty carries a maximum potential penalty of five years in prison and a fine of the greatest of $250,000 or twice the gain or loss from the offense. Sentencing is scheduled for Jan. 15, 2016.
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations, under the direction of Director Clancy, and the Newark Division, under the direction of Special Agent in Charge Carl Agnelli, for the ongoing investigation leading to today’s guilty plea.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit, Trial Attorneys Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, and Judith Friedman of the Office of International Affairs.
U.S. Attorney Fishman also thanked public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
Defense counsel: Florian Miedel Esq., New York; Bart Stapert Esq., Amsterdam, Netherlands
Rhode Island Businessman Pleads Guilty to Marketing and Selling Unapproved Remedies for Cancer Mitigation and Treatment, Tax EvasionRead the Press Release
PROVIDENCE, R.I. – James Feijo, 68, owner and operator of Daniel Chapter One, a Portsmouth, R.I., based company, pleaded guilty in federal court in Providence to marketing and selling products not approved by the U.S. Food and Drug Administration (FDA) as cancer mitigation and treatment options, and failing to pay more than $218,000 in employment taxes due the IRS, announced United States Attorney Peter F. Neronha, Michael Mangiacotti, Resident Agent in Charge of the FDA Office of Criminal Investigations, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Feijo pleaded guilty to one count of introduction of a new unapproved drug and one count of tax evasion.
At the time of his guilty plea, Feijo admitted to the court that he engaged in the marketing, sale and distribution of unapproved health products and supplements, 7 Herb Formula, Bio Shark and GDU, which were not generally recognized as safe and effective for use by the FDA. Additionally, the products, as marketed, were not generally recognized as safe and effective by qualified experts for the cure, mitigation, treatment, or prevention of cancer. The products were marketed and sold through various websites, in-store advertisements, a call center, on the Feijos’ daily radio program, and through the use of promotional materials and publications.
In addition, at the time of his guilty plea, Feijo admitted to the court that from 2006 through 2011, he falsely represented to Daniel Chapter One employees that they were independent contractors, when in truth they were employees of Daniel Chapter One. During that time, Feijo failed to issue IRS Wage and Tax Statements, Forms W-2, accounting for employees’ wages and taxes withheld. Feijo admitted that through 2011, Daniel Chapter One employees were paid by checks written out to cash, and that for at least sixteen quarters he failed to collect, account for and pay over employment taxes due the IRS totaling $218,408.04.
Feijo is scheduled to be sentenced by U.S. District Court Judge John J. McConnell, Jr., on January 12, 2016.
The case is being prosecuted by Assistant U.S. Attorney Terrence P. Donnelly.
The matter was investigated by the Rhode Island FDA Task Force and by IRS Criminal Investigation.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Retired Master Deputy Sheriff Sentenced to 20 Years in Prison for Child Pornography ChargesRead the Press Release
A retired master deputy sheriff was sentenced today to 20 years in prison for receiving, distributing and possessing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Alysa D. Erichs of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Miami Field Division and Sheriff Ken J. Mascara of the St. Lucie County, Florida, Sheriff’s Office.
Cameron Dean Bates, 50, of Port St. Lucie, Florida, was found guilty by a jury on June 11, 2015, of four counts of receipt of child pornography, one count of distribution of child pornography and one count of possession of child pornography. In addition to imposing the prison term, Chief U.S. District Judge K. Michael Moore of the Southern District of Florida ordered Bates to pay $3,500 in restitution to a victim.
In March 2011, St. Lucie County Sheriff’s Office detectives and members of the South Florida Internet Crimes Against Children Task Force (ICAC) began an investigation using peer-to-peer (P2P) software. According to evidence presented at trial, investigators discovered that, between December 2010 and June 2012, several Internet protocol (IP) addresses linked to Bates in both St. Lucie County and Palm Beach County were used to download and share child pornography files. The trial evidence showed that a laptop computer recovered during a search of Bates’ home contained numerous images and videos of child pornography, including at least one image depicting a child under the age of 12.
This case was investigated by the St. Lucie County Sheriff’s Office, the South Florida ICAC and ICE-HSI, with assistance from the Palm Beach County, Florida, Sheriff’s Office. The case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Ben Widlanski of the Southern District of Florida.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Justice Department in May 2006 to combat the growing epidemic of child exploitation and abuse. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Retired Master Deputy Sheriff Sentenced to 20 Years in Prison for Child Pornography ChargesRead the Press Release
A retired master deputy sheriff was sentenced today to 20 years in prison, to be followed by 15 years of supervised release, for receiving, distributing and possessing child pornography, announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Alysa D. Erichs of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Miami Field Division and Sheriff Ken J. Mascara of the St. Lucie County, Florida, Sheriff’s Office.
Cameron Dean Bates, 50, of Port St. Lucie, Florida, was found guilty by a jury on June 11, 2015, of four counts of receipt of child pornography, one count of distribution of child pornography and one count of possession of child pornography. In addition to imposing the prison term, Chief U.S. District Judge K. Michael Moore of the Southern District of Florida ordered Bates to pay $3,500 in restitution to a victim.
In March 2011, St. Lucie County Sheriff’s Office detectives and members of the South Florida Internet Crimes Against Children Task Force (ICAC) began an investigation using peer-to-peer (P2P) software. According to evidence presented at trial, investigators discovered that, between December 2010 and June 2012, several Internet protocol (IP) addresses linked to Bates in both St. Lucie County and Palm Beach County were used to download and share child pornography files. The trial evidence showed that a laptop computer recovered during a search of Bates’ home contained numerous images and videos of child pornography, including at least one image depicting a child under the age of 12.
This case was investigated by the St. Lucie County Sheriff’s Office, the South Florida ICAC and ICE-HSI, with assistance from the Palm Beach County, Florida, Sheriff’s Office. The case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Ben Widlanski of the Southern District of Florida.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Justice Department in May 2006 to combat the growing epidemic of child exploitation and abuse. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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.
Readout of Assistant Attorney General for National Security John P. Carlin’s Address at French American Foundation EventRead the Press Release
Speaking today at the French American Foundation, Assistant Attorney General for National Security John P. Carlin called for French and European cooperation on combating nation state-sponsored theft of intellectual property, as well as destructive cyber-attacks.
Carlin highlighted the recent massive cyberattack by purported jihadis on French TV5Monde to illustrate a common purpose. “It’s not a matter of whether a nation will fall prey to a cyber-attack, but when,” said Carlin. He stressed the importance of global cooperation to increase the cost of hacking. “It’s about deterrence. Until nation states and terrorists stop stealing and committing bullying, destructive cyber-attacks, we must increase the cost. Whether you are the Syrian Electronic Army, ISIL or a state-sponsored hacker, we can and will find you. And when we do, there will be consequences. Prosecution, sanctions, diplomacy and designations are just some of the many options we have. Together, we will find the right tool, or right combination of tools, to make this activity very, very costly.” Carlin committed to playing the long game, saying, “As international partners, we need to keep at it, keep applying that pressure. That’s how you change behavior. It will not happen overnight.”
Carlin has long stressed the need for global responsibility. He told today’s attendees, including French and U.S. government officials, think tanks, private industry, academia and security and insurance professionals, “It was true when we said it in May 2014 following the PLA indictment, and it remains true today: we are aware of no nation that publicly states that theft of information for commercial gain is acceptable. It is time for us to, once and for all, come to a common agreement about acceptable state behavior in cyberspace.”
Carlin also addressed the importance of executive involvement in cybersecurity and managing cyber risk:
“These are C-suite decisions. You cannot manage your corporate cyber risk if you do not understand and prioritize it. You must make cyber defense a key component of your business strategy, and then invest in it. Also consider cyber insurance to protect your bottom line and – most important from my vantage point – do not go it alone. The Justice Department is here to help you when you encounter cyber threats.”
Carlin also highlighted the need for nations to apply the lessons learned in counterterrorism to emerging threats in cyberspace. He closed his remarks by saying:
France is one of America’s oldest and closet allies, and has long stood with us in our efforts to combat terrorism. When nations band together to combat terrorism, as we did following the brutal attack at the offices of the Charlie Hebdo magazine, we are strong and we will win. But that principle is not limited to terrorism – it extends to all threats to our nations’ security. We are in this fight together, and we have to learn from one another, so that the same actors, using the same tools and signatures, cannot simply move from one country’s network to another, targeting our intellectual property and innovation or damaging our networks. Digital security is vital to national security.
Pottawattamie County Resident Sentenced to Five Years in Prison for Interstate Travel with Intent to Engage in a Sexual Act with a JuvenileRead the Press Release
COUNCIL BLUFFS, IA - On September 14, 2015, Tyler Lewis Gunderson, a 25 year-old resident of Pottawattamie County, Iowa, was sentenced by Senior United States District Court Judge Robert Pratt, to 60 months in prison on the charge of interstate travel with intent to engage in a sexual act with a juvenile, announced United States Attorney Nicholas A. Klinefeldt. Gunderson was also ordered to serve ten years of supervised release following the period of imprisonment.
Gunderson entered a guilty plea to the charge on July 2, 2015. The guilty plea proceeding established that Gunderson travelled from Iowa to Omaha, Nebraska, to pick-up a juvenile he had met in Omaha, and that Gunderson then drove the juvenile to various locations in and around Council Bluffs, Iowa, for the purposes of engaging in sexual intercourse.
The investigation of this matter was conducted by the Council Bluffs, Iowa, Police Department, the Omaha, Nebraska, Police Department, and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Postal Worker Pleads Guilty for Delay or Destruction of MailRead the Press Release
U.S. Attorney Kenneth A. Polite announced that AVA SMITH, age 21, of Harvey, pled guilty yesterday for delay or destruction of mail.
According to court records, on December 16, 2014, the Office of Inspector General for the United States Postal Service (“Postal OIG”) received information that a significant amount of First Class and Standard mail had been discarded. It was determined that the mail was to be delivered on December 8, 2014, by postal carrier SMITH. A review of the discarded mail revealed 573 pieces of First Class Mail, 142 pieces of Standard Mail, and 30 pieces of Non-Profit Mail. The First Class Mail included bank and insurance statements/invoices, credit card and other bills/statements.
SMITH faces a maximum penalty of five years imprisonment, followed by up to three years of supervised release, and a $250,000 fine. U.S. District Judge Susie Morgan set sentencing on December 16, 2015.
U.S. Attorney Polite praised the work of the U.S. Postal Inspection Service, Office of Inspector General in investigating this matter. The prosecution of this case is being handled by Fraud Unit Chief, Assistant U.S. Attorney Brian M. Klebba.
Postal Employee Charged with Misappropriation of Postal FundsRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today Lori Haberle, age 45, of Kelayres, PA, has been charged in a one-count Indictment with misappropriation of Postal funds by a federal grand jury in Scranton.
According to United States Attorney Peter Smith, in January through March 2015, Haberle, a Postal Service support employee, misappropriated postal funds at the Kelayres and Quakake Post Offices in Schuylkill County, resulting in a loss of at least $1,155 to the United States Postal Service.
The investigation of this case was conducted by the United States Postal Service. Prosecution is assigned to Assistant United States Attorney John C. Gurganus, Jr.
Haberle faces a maximum sentence of 10 years imprisonment and fines totaling $250,000.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Philadelphia Man Charged with RobberyRead the Press Release
Mikel Smith, 25, of Philadelphia, PA, was charged today by information with robbery which interfered with interstate commerce for the armed robbery on November 16, 2014 of approximately $400 from the Dunkin Donuts, located at 717 East Girard Avenue, Philadelphia, Pennsylvania; announced United States Attorney Zane David Memeger. Defendants brandished a handgun during each of the four robberies. Smith is also charged with possession of a firearm by a convicted felon.
If convicted of the charge, defendant faces a maximum sentence of 20 years imprisonment, a maximum period of supervised release of three years, a substantial fine, a special assessment, and restitution.
This case was investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, and the Philadelphia District Attorney's Office, and is being prosecuted by Assistant United States Attorney Ewald Zittlau.
An Indictment or an Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Charged with False Statements and TheftRead the Press Release
PHILADELPHIA - Benjamin Twiggs, 37, of Philadelphia, Pennsylvania, was charged by indictment yesterday with one count of making a false statement and one count of transportation of goods taken by fraud, announced United States Attorney Zane David Memeger. The fraud is in connection with the federal Computers For Learning (CFL) program, a program meant to allow federal agencies to donate excess computer equipment to schools and educational nonprofit organizations.
According to the indictment, in October 2013, Twiggs used a false document to state to the Department of Homeland Security that his organization was an IRS-recognized tax-exempt organization, when Twiggs knew that it was not. The indictment charges further that in January 2015, Twiggs transported in interstate commerce 96 computer monitors that he had taken by fraud from the U.S. Patent and Trademark Office, which had donated them through the CFL program.
If convicted of the charges, the defendant faces a maximum possible statutory sentence of 15 years in prison, three years of supervised release, a fine of up to $500,000, a $200 special assessment, and forfeiture.
The case was investigated by the General Services Administration's Office of Inspector General. It is being prosecuted by Assistant United States Attorney Elizabeth Abrams.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pensacola Man Sentenced to 240 Months for Receipt of Child PornographyRead the Press Release
PENSACOLA, FLORIDA – Shawn P. Caldwell, 36, a registered sex offender who resides in Pensacola, Florida, was sentenced to 240 months in prison yesterday for receipt of child pornography. The sentence was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
During an undercover operation, law enforcement officers discovered Caldwell was in possession of 76 child pornography files at his Pensacola residence. At his plea hearing on June 24, 2015, Caldwell admitted that, between April 2011 and April 2015, he received child pornography images and videos from the internet, which he downloaded from several peer-to-peer programs. A forensic review of Caldwell’s electronic devices revealed approximately 263 videos and more than 1,000 images of child pornography, including images of children under the age of 12.
The charges were the result of an investigation by the Federal Bureau of Investigation, the Florida Department of Law Enforcement, and the Pensacola Police Department. The case was prosecuted by Assistant United States Attorney Jeffrey Tharp.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]