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15 September 2015
Dallas Securities Broker Admits FraudRead the Press Release
DALLAS — Wade Lawrence, 43, of Dallas, a securities broker, appeared this morning before U.S. Magistrate Judge David L. Horan and pleaded guilty to a felony Information charging one count of securities fraud, announced U.S. Attorney John Parker of the Northern District of Texas.
Lawrence faces a maximum statutory penalty of five years in federal prison and a $250,000 fine or twice any pecuniary gain to the defendant or loss to the victims. In addition, Lawrence agrees to forfeit $1,542,966, in proceeds traceable to the offense, in the form of a money judgment and proceeds from the sale of his residence. Lawrence will remain on bond pending sentencing, a date for which was not set.
According to documents filed in the case, from June 2008 through July 2011, Lawrence worked as a securities broker by Oppenheimer & Co. Inc., in Dallas and was active in conducting trades in his customer brokerage accounts. In 2010 and 2011, Lawrence began to lose significant amounts of money, both in his clients’ trading accounts and his individual trading account. In August 2011, Lawrence moved to Southwest Securities in Dallas, where his trading losses continued.
Beginning in January 2012 and continuing through September 2013, Lawrence engaged in a scheme to defraud to obtain funds from individuals, with whom many he had longstanding personal and business relationships and who trusted him. He falsely offered for sale various investments, including real estate ventures and securities outside the brokerage accounts at Southwest Securities. He also offered interests in what he represented were a high-risk investment in options on the Volatility Index (VIX) on the Chicago Board Options Exchange.
Lawrence also solicited funds from several individuals by falsely representing they would be invested in a duplex. He falsely represented to other investors that their money would be invested in various securities such as in Facebook and Southwest Securities.
Lawrence represented to investors that their investments would return anywhere from 20 to 100 percent, and that it was possible to double their investment. In each case, he directed the investor to mail or wire-transfer funds to his personal account at Wells Fargo Bank, instead of a Southwest Securities account, giving various explanations for this, including that he was trying to start his own VIX fund and needed to establish a history for the fund.
Lawrence, however, only invested some of the investors’ money as represented. Instead, he spent several hundred thousand dollars of the proceeds for personal living expenses, including travel, mortgage payments on his Dallas residence, and a $10,000 piece of jewelry. In total, Lawrence obtained approximately $2,124,000 from the scheme. He returned approximately $581,034 to some of the investors.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The FBI investigated the case. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
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Council Bluffs, Iowa, Resident Sentenced for Possession with Intent to Distribute MethamphetamineRead the Press Release
COUNCIL BLUFFS, IA - On September 14, 2015, Daniel Eugene Hannan, a 40 year-old resident of Council Bluffs, Iowa, was sentenced by Senior United States District Court Judge Robert Pratt to 120 months in prison on the charges of possession with intent to distribute methamphetamine and possession of a stolen firearm, announced United States Attorney Nicholas A. Klinefeldt. Hannan was also ordered to serve five years of supervised release following the period of imprisonment.
The investigation of this matter began as a result of Hannan fleeing from law enforcement. When located, Hannan was found to have a large amount of methamphetamine which Hannan intended to distribute. A subsequent search warrant located additional methamphetamine and a shotgun which had been stolen from a burglary in Red Oak, Iowa. Hannan entered a guilty plea to the charges of possession with intent to distribute methamphetamine and possession of a stolen firearm on June 4, 2015.
The investigation of this matter was conducted by the Southwest Iowa Narcotics Task Force, the Council Bluffs, Iowa, Police Department, and the Red Oak, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Convicted Sex Offender Sentenced for Sexual Enticement of A ChildRead the Press Release
Orlando, Florida – United States District Judge Roy B. Dalton, Jr. has sentenced Jacob Isaac Bomboy (25, Lake County) to 12 years in federal prison for attempting to entice a child to engage in illicit sexual conduct. He pleaded guilty on June 1, 2015.
According to the plea agreement, from November 7, 2014, to March 11, 2015, Bomboy engaged in online communications with an undercover FBI agent posing as a 13-year-old girl, and he made arrangements to meet the “child” for sex. On March 11, 2015, Bomboy traveled to a prearranged meeting location in Seminole County and was arrested.
The plea agreement also notes that Bomboy was previously arrested by state authorities for solicitation of sex with a minor. He was ultimately convicted for attempted child abuse and was sentenced to five years of sex offender probation. Bomboy was on probation when he attempted to meet the 13-year-old girl for sex.
This case was investigated by the Federal Bureau of Investigation, and it was prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
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 (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Coeur d’Alene Man Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
COEUR D'ALENE - Keith David Killingsworth, 38, of Coeur d’Alene, Idaho, pleaded guilty today in federal court to possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Killingsworth was indicted by a federal grand jury in Coeur d'Alene on February 18, 2015.
According to the plea agreement, between July 2013, and December 2013, investigators with the Idaho Internet Crimes Against Children Task Force (ICAC) observed that a computer in Coeur d’Alene, Idaho, was making sexually explicit images of minors available on the internet. ICAC investigators were able to determine that the images were being shared from a computer at Killingsworth’s residence and obtained a search warrant.
ICAC investigators seized a number of computers from Killingsworth’s residence. A United States Secret Service forensic examiner later found that one of these computers, seized from Killingsworth’s bedroom, contained over 2,000 images and 67 videos, depicting minors engaged in sexually explicit conduct. Search terms indicated that Killingsworth was looking for child pornography. The National Center for Missing and Exploited Children determined that Killingsworth’s child pornography collection included images of minors from multiple states, including Washington, Indiana, New Jersey, Iowa, Texas, Georgia, Pennsylvania, and a number of foreign countries.
The charge of possession of sexually explicit images of minors is punishable by up to 20 years in prison, a maximum fine of $250,000.00, and up to lifetime supervised release.
Sentencing is set for December 15, 2015, before Senior United States District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated through the collaborative effort of the Coeur d’Alene Police Department, the Kootenai County Prosecutor’s Office, Boise Police Department, the Federal Bureau of Investigation (FBI), and the United States Secret Service. These agencies participate in the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icactaskforce.org.
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.”
Clinton County, Kentucky, Man Sentenced for Filing False Tax ReturnsRead the Press Release
Failed to report earnings and pay income taxes on $386,183.67 during a six year period and overstated business expenses of $581,519.91
BOWLING GREEN, Ky. – A Clinton County, Kentucky, businessman and oil driller was sentenced by U.S. District Judge Greg N. Stivers to six months in prison and ordered to pay restitution of $283,385 (the tax due) to the Internal revenue service for failing to report approximately $386,183.67 in income and royalty income during a six year period and for overstating business expenses of $581,519.91 announced United States Attorney John E. Kuhn, Jr. There is no parole in the Federal Court system.
Further, Judge Stivers yesterday ordered Steven L. Burchett, age 51, to pay for the costs of his incarceration and 1 year of supervised release to follow his release from prison. Finally, Stivers imposed a fine of $10,000 per count of conviction for a total of $60,000. During the sentencing hearing, the evidence established that between 2006 to 2011, Burchett partially paid for a home and driveway with income for which he did not pay taxes. In addition, Burchett deducted the building of his home and driveway as business expenses. Burchett deducted multiple cash withdrawals as business expenses. Finally, evidence was introduced at the hearing that Burchett owned several luxury automobiles including a Dodge Viper, Cadillac Escalade, and Cadillac XLRV that he fraudulently deducted as a business expenses
Previously, Burchett admitted to willfully making and subscribing U.S. Individual Tax Returns, for the calendar years 2006 through 2011,which were written under the penalty of perjury and filed with the Internal Revenue Service, (IRS) and included information he did not believe to be true and correct.
Specifically, on October 11, 2008, Burchett filed a U.S. Individual Tax Return for calendar year 2006, with the IRS, in which he failed to report approximately $224,735.76 of additional income on Form 1040 line 22.
On October 8, 2008, Burchett filed a U.S. Individual Tax Return, for the calendar year 2007, with the IRS, in which he failed to report approximately $27,003.91 of additional income.
On October 15, 2009, defendant Burchett filed a U.S. Individual Tax Return, for the calendar year 2008, with the IRS, and overstated approximately $41,394 in business expenses and failed to report royalty income of approximately $18,236 and understated approximately $56,895 in additional income.
On April 15, 2010, Burchett filed a joint U.S. Individual Tax Return, for the calendar year 2009, and overstated approximately $90,650 in business expenses and failed to report approximately $38,323 in royalty income and understated approximately $123,225 in additional income.
On April 15, 2011, Burchett filed a joint U.S. Individual Tax Return, for the calendar year 2010, and overstated approximately $305,564 in business expenses and failed to report approximately $64,490 in royalty income and understated approximately $360,380 in additional income.
On April 15, 2012, Burchett filed a joint U.S. Individual Tax Return, for the calendar year 2011, and overstated approximately $72,050 in business expenses and failed to report approximately$74,778 in royalty income and understated approximately $135,611 in additional income..
If convicted at trial, Burchett could have been sentenced to three years in prison on each of the six charges for a total of eighteen years, a total fine of $1,500,000., and a period of up to one year of supervised release.
This case was prosecuted by Assistant United States Attorney Joshua Judd and was investigated by the Criminal Investigation Division of the Internal Revenue Service.
Clarksburg woman convicted of selling cocaine near Harrison County playgroundRead the Press Release
CLARKSBIRG, WEST VIRGINIA – Jessica A. McCracken, 32, of Clarksburg, was convicted of cocaine trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
McCracken sold cocaine base near the Harrison Street Playground in Harrison County West Virginia. She pled guilty today to one count of “Distribution of Cocaine Base within 1,000 Feet of a Protected Location.” She will face between one and forty years in prison and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge John S. Kaull presided.
Carmen Dozier Imprisoned for Inn Embezzlement and Bank FraudRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Carmen Dozier, 39, of Rutland, was sentenced today in United States District Court in Rutland to 15 months of imprisonment following her guilty plea to wire fraud. U.S. District Judge Geoffrey Crawford also ordered that Dozier serve three years of supervised release following completion of her prison term and pay restitution of more than $81,000. The court directed that Dozier surrender to the Bureau of Prisons on a to-be-determined date after November 1.
Last February, a federal grand jury in Rutland returned a two-count indictment charging Dozier with wire fraud and bank fraud. According to the indictment, in May 2013 Dozier was hired as the front desk manager at the Brandon Inn in Brandon, Vermont. Dozier prepared payroll records which were sent to the Inn's payroll processing company. She also took and confirmed reservations and paid vendors for goods and services for the Inn. Beginning in July 2013 and continuing until mid-May 2014, Dozier embezzled about $75,000 from the Inn. She did this by falsifying the Inn's payroll records to inflate the regular and overtime hours she ostensibly worked, causing the Inn's payroll processor to issue her paychecks or electronic direct deposits in amounts that exceeded her earned income. Dozier also caused fraudulent electronic transfers of Inn funds to her personal bank account at Lake Sunapee Bank. In addition, Dozier fraudulently used credit cards issued to the Inn's owners to make personal purchases, and fraudulently opened and used a BillMeLater PayPal service account.
Dozier also defrauded Lake Sunapee Bank by depositing, and attempting to deposit, about $20,000 worth of checks which were made payable to Dozier and which were purportedly signed by family members. In fact, the checks were written against out-of-state accounts which either were closed or did not contain sufficient funds. Dozier attempted to withdraw the apparent proceeds of the checks from Lake Sunapee Bank before the checks were dishonored. Lake Sunapee Bank suffered a loss of more than $3800.
This case was investigated by the Brandon Police Department and the Federal Bureau of Investigation.
Dozier is represented by Federal Public Defender Michael Desautels. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Carlsbad Couple Admits Selling Unapproved “Energy Wave” Medical DevicesRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – September 15, 2015
SAN DIEGO – David and Sandra Perez pleaded guilty in federal court today to charges relating to the sale of “Energy Wave” medical devices via the Internet – devices they marketed as an effective treatment for cancer and AIDS, yet had not received necessary approval from the U.S. Food and Drug Administration.
According to their plea agreements, the couple marketed the Energy Wave device over the Internet from their home in Carlsbad. They have since moved to Oregon. David Perez admitted scheming with the manufacturer of the devices, David Arthur, who marketed the “Energy Wave” device over the internet using the website www.myenergywave.com. Arthur previously pleaded guilty and is awaiting sentencing.
As detailed in court, the Energy Wave device consists of a micro-current frequency generator with a digital readout, two stainless steel cylinders and two personal application plates with connectors and lead wire for the cylinders and plates. Users were provided with an operating manual and a list of Auto Codes that set forth hundreds of digital settings for the device, directed to specific conditions from abdominal pain, AIDS and diabetes to stroke, ulcer and worms. The Auto Codes and Manual advised users to connect the cylinders or plates to the machine and touch them to the body for a recommended run time to treat each condition.
David Perez admitted selling each device for approximately $1,200 to $1,500, and receiving gross proceeds of approximately $271,000. He also acknowledged that he intended to defraud and mislead the FDA by attempting to evade the agency’s oversight of medical claims made regarding the Energy Wave device by maintaining a separate website (rifecodes.com) to which he referred customers who needed to obtain the auto codes that allegedly were effective in treating the various medical conditions.
Sandra Perez admitted assisting her husband by shipping the “Energy Wave” devices and depositing the funds necessary to pay coconspirator David Arthur for the devices. The couple admitted that they knew or should have known a number of their customers were vulnerable because they had purchased the device in an attempt to cure cancer, and that they were marketing the device without the proper FDA approvals.
“Those who are sick and desperate for relief are particularly vulnerable to scams, and we are doing our best to protect them from people who exploit the weak for their own financial gain,” said U.S. Attorney Laura Duffy.
“The FDA oversees approvals for medical devices to ensure that the public is protected from devices that are unsafe or ineffective,” said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations’ Los Angeles Field Office. “We will continue to commit our efforts to remove potentially dangerous medical devices from the U.S. marketplace.”
David Perez is scheduled to be sentenced January 11, 2016 before U.S. District Judge Roger T. Benitez. His wife was sentenced by U.S. Magistrate Judge William Gallo to one year of probation, and ordered to perform 100 hours of community service and pay restitution of $1,495 to a purchaser of the device.
During today’s hearing, Judge Gallo stated: “I believe you had to know at some level that this was junk science.”
DEFENDANT Criminal Case No. 15cr0360-BEN
David Perez Age: 60
Medford, Oregon
Sandra Perez Age: 55
Medford, Oregon
SUMMARY OF CHARGES
David Perez:
Conspiracy– Title 18, U.S.C., Section 371
Maximum penalty: Three years in prison and $250,000 fine
Sandra Perez:
Sale of Unapproved Medical Devices-Title 21, U.S.C., Sections 331(a) and 333(a)(2), a misdemeanor
Maximum penalty: One year in prison and $100,000 fine
AGENCIES
Food and Drug Administration, Office of Criminal Investigations
Homeland Security Investigations
Postal Inspection Service
Caribou Man Sentenced to 35 Months on Firearms ChargeRead the Press Release
Contact: James M. Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that George D. LaCasse, 35, of Caribou, Maine, was sentenced in U.S. District Court by Judge John A. Woodcock, Jr. to 35 months in prison and three years of supervised release by for his unlawful possession of firearms. LaCasse pleaded guilty on April 11, 2015.
Court records reveal that on May 23, 2014, LaCasse arranged for another person to purchase a 9mm pistol for him from Ben’s Trading Post in Presque Isle, Maine. LaCasse was at the Trading Post when the firearm was purchased. Witnesses saw him with the pistol. He admitted to others that he had a gun. Federal agents also recovered 9mm casings and other evidence that LaCasse had used the firearm for target practice. LaCasse was prohibited from possessing firearms because he had felony convictions in Massachusetts in 2009.
The investigation was conducted by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Caribou Police Department.
Canton man sentenced to prison, ordered to repay $6.7 million, for fraud in getting federal contractsRead the Press Release
A Canton man was sentenced to one year in prison and ordered to repay $6.7 million for making false representations about the company’s office location so it could obtain a HUBZone certification and qualify for federal contracts, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
William Richardson III, also known as Buster Richardson, previously pleaded guilty to one count of wire fraud.
The Historically Underutilized Business Zone Act of 1997 (the HUBZone Program), was established to provide federal contracting assistance for qualified small business concerns located in historically underutilized business zones in an effort to increase employment opportunities, investment, and economic development in those areas. Under the HUBZone Program, certain government contracting opportunities were “set aside” to be awarded only to eligible HUBZone Program participants, according to court documents.
There were four requirements to participate in the HUBZone Program. First, a firm had to be classified as a small business. Second, the firm had to be controlled and owned at least 51 percent by United States citizens. Third, a firm’s principal office had to be located in a designated HUBZone area. Fourth, at least 35 percent of the firm’s employees had to reside in a designated HUBZone area. Only firms that satisfied all of these requirements were eligible to participate in the HUBZone Program and compete for HUBZone set-aside and/or sole-source contracts, according to court documents.
Before a firm could participate in this program and bid on designated government contracts, it had to seek and obtain a certification from the United States Small Business Administration (SBA) verifying that the firm was HUBZone Program eligible. The SBA relied on information that was provided by applicant firms to determine and certify eligibility, according to court documents.
In August 2000, to obtain a HUBZone certification, Richardson and his company, TAB Construction Company, submitted to SBA a HUBZone application in which Richardson falsely stated that TAB’s principal office was located at 1010 Walnut Avenue NE in Canton, a location that was within a designated HUBZone area. TAB’s principal office was actually located in another area of Canton that was not within a HUBZone area, specifically 4534 Vliet Street SW, according to court documents.
Richardson falsely represented in TAB’s application that the Vliet Street SW location was only a storage area for equipment and was not the company’s principal office location. Richardson and TAB provided supporting information and documents to SBA, including a fake lease, to back up this false claim, according to court documents.
Based on Richardson’s false representations, SBA certified that TAB was HUBZone Program eligible and placed TAB on the government’s List of Qualified HUBZone Small Business Concerns, according to court documents.
With this designation, Richardson and TAB received contracts from the U.S. Army Corps of Engineers, the U.S. Coast Guard and the National Park Service between 2005 and 2012, according to court documents.
“Cutting corners to fraudulently gain advantages in the federal contracting system will not be tolerated,” Dettelbach said.
“Let this sentencing demonstrate to the public that the Department of Homeland Security, Office of Inspector General stands committed to working with its law enforcement partners to hold accountable anyone who brazenly defies federal law to take advantage of federal programs funded by the taxpayers’ hard-earned money,” said John Tiano, Special Agent in Charge, Department of Homeland Security, Office of Inspector General.
“The Defense Criminal Investigative Service is committed to working with our partner agencies to combat fraud impacting the integrity of the Department of Defense’s procurement system,” said Brian Reihms, Special Agent in Charge, Defense Criminal Investigative Service.
"Today's sentencing demonstrates that those who provide services for the U.S. government and purposely provide false and misleading information for their own personal gain, will be held accountable for their actions," said the Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit, Frank Robey. "Our organization will continue to use every tool at our disposal to protect the nation's finances."
This case is being prosecuted by Assistant U.S. Attorney Rebecca Lutzko following an investigation by the Small Business Administration – Office of Inspector General; Defense Criminal Investigative Service; Department of Homeland Security- Office of Inspector General and the U.S. Army’s Criminal Investigation Division.
California Man Sentenced to Four Years in Prison for Multi-State Fraud Against United States Post OfficesRead the Press Release
PHOENIX – Yesterday, Kaleb Matias Wiewandt, 36, of Los Angeles, Calif., was sentenced by United States District Judge Susan R. Bolton to 51-months in prison and ordered to pay $1.1 million in restitution. Wiewandt previously pled guilty to conspiracy to commit mail and wire fraud for conspiring with others to steal several million postage stamps from the United States Postal Service.
“The defendant’s elaborate scheme to steal postage stamps from dozens of post offices was a significant offense that warranted a lengthy prison sentence,” said U.S. Attorney John S Leonardo.
"The health and success of the Postal Service depends upon strong and aggressive revenue protection," said Robert Wemyss, Inspector in Charge, Los Angeles Division. "The U.S. Postal Inspection Service will continue to identify and pursue criminals who deliberately avoid proper payment of postage."
Between May 2013 and April 2015, Wiewandt actively participated in a conspiracy to steal large numbers of postage stamps from various post offices in the United States. To execute the fraud, Wiewandt would set up a fictitious business by renting temporary office space, developing a business name and insignia, and creating a variety of business related documents such as business checks, invoices, and business cards. In nearly every case, the fictitious business invoice was transmitted to the post office to convey the false impression that a local business was seeking to purchase postage stamps in an amount that was between a few thousand dollars to approximately $21,000. If the post office accepted the invoice, Wiewandt would send a third-party courier to the post office with a fictitious business check. Postal clerks who called the phone numbers on the fictitious business invoice or check would be assured of the legitimacy of the transaction by Wiewandt or some other co-conspirator.
The investigation in this case was conducted by the United States Postal Inspection Services. The prosecution was handled by Raymond K. Woo, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-0633-PHX-SRB
RELEASE NUMBER: 2015-074_ Wiewandt
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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.
Broward County Resident Convicted in Social Security Theft SchemeRead the Press Release
A Deerfield Beach resident pled guilty today to having stolen Social Security benefits for more than thirty years.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Margaret Moore-Jackson, Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General, made the announcement.
Claudia Carpenter, 60, of Deerfield Beach, pled guilty to two counts of theft of government funds, in violation of Title 18, United States Code, Section 641. Carpenter is scheduled to be sentenced on November 24, 2015 at 9:30 a.m. by U.S. District Judge Beth Bloom in Fort Lauderdale. The defendant faces up to ten years in prison, three years of supervised release and a $250,000 fine. The defendant will also be required to pay restitution.
According to information presented in court, the Social Security Administration administers numerous programs to provide for the material needs of individuals and their families, including retirement security insurance. Monthly benefits are paid to eligible retired workers and their eligible dependents. From approximately October 1984 through March 2015, Carpenter falsely obtained Social Security Administration Retirement Security Income (“RSI”) benefits that had been issued to her mother, who died in September 1984. The funds were directly deposited into a joint checking account the defendant shared with her deceased mother. After her mother’s death, the defendant continued to receive unauthorized SSA benefits, totaling $239,089. Carpenter withdrew these unauthorized funds by writing checks made payable to “cash” from the account and through cash withdrawals at automatic teller machines.
Mr. Ferrer commended the investigative efforts of SSA’s Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorney Randy Katz.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Brother of San Diego Man Killed Fighting with ISIL Indicted for False Statements Made in Connection with Terrorism InvestigationRead the Press Release
Assistant U.S. Attorneys Shane Harrigan (619) 546-6981 and Caroline Han (619) 546-6968
NEWS RELEASE SUMMARY – September 14, 2015
SAN DIEGO - Marchello Dsaun McCain was arraigned in federal court today on new charges that he made false statements to the FBI in connection with an international terrorism investigation of his brother, Douglas McCain, an American believed killed while fighting with the Islamic State of Iraq and the Levant (ISIL) in Syria.
According to the indictment, Marchello McCain made false statements to Federal Bureau of Investigation Joint Terrorism Task Force (FBI-JTTF) agents about his knowledge of his brother’s travel to Syria and the use of a credit card to purchase Douglas McCain’s airline tickets from the United States to Turkey, a transit point for individuals travelling to Syria. On August 26, 2014, several U.S. media outlets reported that Douglas McCain had been killed in Syria fighting for ISIL in a battle against the Free Syrian Army.
In January 2015, FBI-JTTF agents arrested Marchello McCain in connection with an indictment charging him with three counts of possession of firearms and ammunition by a felon. A superseding indictment charging him with two additional counts of possession of firearms and ammunition by a felon and one count of possession of body armor by a violent felon was filed against him in March 2015. The second superseding indictment was unsealed today during a hearing before U.S. District Judge Thomas Whelan. McCain is currently being held in custody without bond.
U.S. Attorney Laura E. Duffy praised the work of the FBI-JTTF in furthering our joint mission of safeguarding our national security by working countless hours on this investigation. The FBI-JTTF’s investigation of Douglas McCain’s travel to Syria is particularly important because it involves ISIL, a foreign terrorist organization which threatens to induce our youth into committing violence against foreigners and U.S. citizens alike.
Marchello McCain’s next court date is a motion hearing scheduled before District Judge Whelan on October 19, 2015.
This case is being prosecuted in federal court in San Diego by Assistant U.S. Attorneys Shane Harrigan and Caroline Han. This case was investigated by the San Diego Joint Terrorism Task Force; the Federal Bureau of Investigation; the Federal Air Marshal Service; the Department of Homeland Security, Homeland Security Investigations; and the Department of Homeland Security, U.S. Border Patrol.
DEFENDANT Criminal Case No. 15CR0174-W
Marchello Dsaun McCain San Diego, California Age 33
SUMMARY OF CHARGES
Counts 1-4, and 6:
Title 18, U.S.C., Sections 922(g)(1) – Felon in Possession of Firearms and Ammunition
Maximum penalties: Ten years in prison and a $250,000 fine.
Count 5:
Title 18, U.S.C., Sections 931 – Felon in Possession of Body Armor by a Violent Felon
Maximum penalties: Three years in prison and a $250,000 fine.
Count 7:
Title 18, U.S.C., Sections 1001(a)(2) – False Statements Involving International Terrorism
Maximum penalties: Eight years in prison and a $250,000 fine.
INVESTIGATING AGENCIES
San Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Federal Air Marshal Service
Department of Homeland Security, Homeland Security Investigations
Department of Homeland Security, U.S. Border Patrol
*An indictment itself is not evidence that the defendants committed the crimes charged. The defendant is presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Broker Immediately Remanded into Custody to Begin Serving 33 Month SentenceRead the Press Release
Assistant U.S. Attorney Phillip L.B. Halpern (619) 546-6964
NEWS RELEASE SUMMARY – September 14, 2015
SAN DIEGO – Stock broker Sunil Sharma of Carlsbad was sentenced in federal court today to 33 months in custody for stealing more than $6 million from local investors by falsely claiming their funds were safely placed in conservative investments when, in reality, he was pursuing a risky day trading strategy that ultimately turned into a massive Ponzi scheme.
“You have not only destroyed the lives of the people who appeared in court today, but the lives of hundreds of others who make up their extended family,” said U.S. District Court Judge John A. Houston during the sentencing hearing.
As detailed in court papers, Sharma covered up his massive trading losses by continuing to falsely tell investors that their investments were doing well. Among other things, he would send investors monthly or quarterly statements that falsely reflected that their investments were generating the promised returns. Sharma admitted that even while reassuring investors, he diverted approximately $2.5 million in investor funds for his own personal use, including: (1) approximately $700,000 towards the down payment of a $2 million home off Artesian Road in San Diego; (2) approximately $12,000 for a cruise in the Mediterranean; and (3) for leasing a Mercedes SL and a BMW.
As revealed in court documents, Sharma was a Series 7 licensed broker, who had worked for Merrill Lynch, AG Edwards, and as an independent broker for Raymond James. In 2000, Sharma moved to San Diego where he continued to practice as an independent broker. Due to the market crash that followed September 11, 2001, Sharma and his clients lost a substantial amount of money. As a result, Sharma voluntarily gave up his license to act as a securities broker.
After relinquishing his broker’s license, Sharma began to work in the insurance industry. In 2002, Sharma sold insurance from his business in Rancho Bernardo. He also began teaching seminars highlighting various types of insurance and annuities which could be purchased by his clients.
In 2007, Sharma set up Gold Coast Holding, LLC (“Gold Coast”) as a vehicle to trade options and initially funded the company with approximately $50,000 of his own money. After experiencing a bit of “beginners luck” he began telling his insurance clients that they could make better returns if he could “day trade” their money. Recognizing that his customers would not give him money for risky options trading, he lied to them and falsely stated that Gold Coast was an extremely safe way to earn a monthly retirement income because their money was to be: (1) part of a diversified portfolio; (2) pooled with many other investors; (3) used to buy bonds from emerging markets in Brazil, Russia, India, and China (“BRIC”); and (4) managed by Goldman Sachs. Sharma guaranteed investors a rate of return (typically between 6%-7%) for two to three years and urged his clients to liquidate their retirement accounts and annuities based upon the safety of his investment scheme.
From the outset, Gold Coast (and later a second company he established, Safe Harbor Tax Lien Acquisitions) exclusively used the money for day trading options. Between January 2008 and November 2014, Sharma raised $8.36 million from 32 different clients using these two companies. In order to attract new investors, Sharma paid $2.12 million in “returns” to old clients from funds generally derived from the contribution of later investors.
For example, of the approximately $3.5 million he raised from investors in the first two years of day trading, Sharma was left with only about $250,000 by the end of 2009. As a result, Sharma turned Gold Coast into a classic “Ponzi scheme” by paying earlier investors their guaranteed rates of return with approximately $5 million in new funds solicited from later investors.
Prior to the investment scheme collapsing completely, Sharma stopped trading option spreads and switched over to purchasing straight “call” and “put” options. It was Sharma’s hope that adopting this new strategy would allow him to recoup all of his investment losses. Once again, however, Sharma’s strategy proved disastrous. Although he was able to make his December 2014 monthly payout to investors, he ran out of funds in January 2015.
United States Attorney Laura E. Duffy acknowledged that this Ponzi scheme was a bit harder to detect than usual as Sharma did not promise his investors outlandish returns. Nevertheless, she warned all investors to ensure that individuals soliciting money have appropriate licenses and audited financial statements. “All investors – especially when they are dealing with their retirement savings – must exercise due caution before turning over money even to long-time friends or else what appears to be a safe harbor might turn into a ship wreck.”
“Mr. Sharma engaged in an elaborate Ponzi scheme to steal millions of dollars from people who trusted him with their life savings,” said FBI Special Agent in Charge, Eric S. Birnbaum. “Today’s sentencing makes it clear that the FBI and U.S. Attorney’s Office will work together to identify, disrupt and hold accountable those individuals that are involved in sophisticated financial fraud schemes that steal money from the American public.”
DEFENDANT: Case Number 15cr1396
Sunil Sharma Age: 68 Carlsbad, CA
CHARGE
Wire Fraud, in violation of 18 U.S.C. § 1343.
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, restitution.
AGENCY
Federal Bureau of Investigation
Brockton Man Convicted by Federal Jury of Illegal Firearm PossessionRead the Press Release
BOSTON – A Brockton man was convicted in U.S. District Court in Boston on Friday, Sept. 11, 2015, for being a felon in possession of a firearm and ammunition.
Foster L. Starks, Jr., 54, of Brockton, was convicted following a week-long jury trial of being a felon in possession of a firearm and ammunition. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Oct. 28, 2015.
On May 24, 2009, at 11:05 p.m., Starks was stopped by a Massachusetts State Police Trooper for a marked lanes violation while driving on Route 24 North in Raynham. Starks was arrested after the Trooper discovered that he was driving with a suspended license. The vehicle needed to be towed, and prior to towing, the Trooper was required to conduct a search of the contents of the vehicle. While performing the search, the Trooper found a shopping bag on the front passenger seat containing a .45 caliber handgun loaded with seven bullets. The shopping bag also contained two boxes of additional ammunition and four bottles containing prescription medications. Starks has numerous prior convictions for various violent crimes, including armed robbery, and therefore was prohibited from possessing firearms or ammunition.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys David G. Tobin and Jordi de Llano of Ortiz’s Major Crimes Unit.
Belen Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Darrell Ray Trammell, 65, of Belen, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge. Under the terms of his plea agreement, the government will recommend that Trammell be sentenced to a term of imprisonment not to exceed 84 months followed by a term of supervised release to be determined by the court.
Trammell was arrested in Aug. 2014, on an indictment charging him and co-defendant Cynthia Boykin, 49, also of Belen, with participation in a conspiracy to distribute methamphetamine in Valencia County, N.M. According to the indictment, the conspiracy continued from Nov. 2013 to Jan. 2014. The indictment also charged Trammell and Boykin with distributing methamphetamine in Valencia County in Dec. 2013, and Trammell alone with distributing methamphetamine in Bernalillo County, N.M., in Jan. 2014.
During today’s proceedings, Trammell pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. In entering the plea, Trammell admitted that on Jan. 8, 2014, he distributed methamphetamine to an undercover law enforcement officer in exchange for $1,700.00.
Trammell remains in custody pending a sentencing hearing which has yet to be scheduled.
Co-defendant Boykin was arrested in March 2015. On May 20, 2015, Boykin pled guilty to a felony information charging her with possession of methamphetamine with intent to distribute. She admitted that on Dec. 12, 2013, she distributed three grams of methamphetamine to an undercover law enforcement officer. At sentencing, Boykin faces a statutory maximum penalty of 20 years in prison followed by not less than three years of supervised release. A sentencing hearing has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorneys David M. Walsh and Stephen R. Kotz are prosecuting the case.
Bank La Roche & Co AG Reaches Resolution under Justice Department's Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Bank La Roche & Co AG has reached a resolution under the department’s Swiss Bank Program.
“Today’s agreement is yet another example of a foreign financial institution coming forward, acknowledging its criminal conduct, taking the necessary steps to resolve its criminal exposure, cooperating with the department’s ongoing investigations and paying appropriate penalties,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “The continued success of the program is evident from the 35 agreements signed to date, and the treasure trove of information provided regarding U.S. accountholders, the foreign and domestic facilitators who assisted in the concealment of U.S- related accounts and the various entities and institutions that played critical roles in these schemes.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, La Roche agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
La Roche was founded in 1787 and is based in Basel, Switzerland, with offices in Olten and Bern, Switzerland. In 2011, La Roche closed a Hong Kong asset management subsidiary that opened in 2008. On Feb. 13, 2015, La Roche sold its business to Notenstein Privatbank AG. Most of La Roche’s employees and the clients of La Roche, with the exception of U.S. taxpayers and a few other clients, will be transferred to Notenstein Privatbank AG. The transaction is expected to close in October 2015. Thereafter, La Roche intends to wind down its remaining business and relinquish its banking license.
La Roche assisted some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income the clients held in their accounts from the Internal Revenue Service (IRS). La Roche used a variety of means to assist some U.S. clients in concealing the assets and income the clients held in their La Roche undeclared accounts, including by:
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providing numbered accounts for 70 U.S. taxpayers;
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holding bank statements and other mail relating to 66 U.S.-related numbered accounts, as well as 20 named accounts of U.S. taxpayers domiciled in the United States;
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allowing substantial cash and precious metal withdrawals in connection with the closures of 27 U.S. taxpayers’ accounts for a total amount of $11.6 million;
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maintaining records in which certain U.S. taxpayers expressly instructed La Roche not to disclose their names to the IRS;
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providing travel cash cards to five U.S. taxpayers upon their request; and
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opening an account in June 2010 for a U.S. taxpayer who left UBS and who transferred $126,000 from UBS to the La Roche account.
In 51 instances, La Roche maintained accounts for U.S. taxpayers as beneficial owners of accounts held by non-U.S. corporations, foundations or other entities, some of which were sham entities, that concealed the beneficial ownership of the U.S. taxpayers. These entities included Liechtenstein foundations, two of which were established or administered by a Liechtenstein trust company, whose manager and director had a long-standing personal relationship with La Roche.
Due in part to the assistance of La Roche and its personnel, and with the knowledge that Swiss banking secrecy laws would prevent La Roche from disclosing their identities to the IRS, some U.S. clients of La Roche filed false and fraudulent U.S. Individual Income Tax Returns (IRS Forms 1040), which failed to report their interests in their undeclared accounts and the related income. Some of La Roche’s U.S. clients also failed to file and otherwise report their undeclared accounts on Reports of Foreign Bank and Financial Accounts (FBARs).
As part of its participation in the Swiss Bank Program, La Roche provided information concerning 10 U.S. client accounts held at La Roche in Switzerland since August 2008 sufficient to make treaty requests to the Swiss competent authority for U.S. client account records. It also provided a list of the names and functions of individuals who structured, operated or supervised the cross-border business at La Roche.
Since Aug. 1, 2008, La Roche maintained 201 U.S.-related accounts with a maximum aggregate value of approximately $193.9 million. 136 of these accounts were beneficially owned by U.S. clients domiciled in the United States, 36 of which were maintained in the names of entities. La Roche will pay a penalty of $9.296 million.
In accordance with the terms of the Swiss Bank Program, La Roche mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at La Roche who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at La Roche must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“With each agreement signed under the Swiss Bank Program, we gather more specific information about the schemes used to hide assets overseas,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The sheer magnitude of information collected as a result of these agreements will be used to pursue tax evaders around the world and will have profound ramifications in developing innovative international tax compliance strategies in the future.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS Large Business & International Division for their substantial assistance. Ciraolo also thanked Karen M. Quesnel, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Associate of Memphis Mob Pleads Guilty to Drug ConspiracyRead the Press Release
Memphis, TN – An associate of the Memphis Mob, a violent street organization, has pled guilty to conspiring to possess hydrocodone with the intent to distribute. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty plea today.
According to the indictment, Terrance Freeman unlawfully conspired with others to distribute large quantities of hydrocodone throughout the Memphis area beginning at a time period unknown to law enforcement but up until April 2014.
A yearlong investigation conducted by the Federal Bureau of Investigation (FBI) into the Memphis Mob revealed Freeman’s illicit activity. According to information presented in court, FBI agents executed a search warrant on Freeman’s house in April 2014. Numerous hydrocodone pills, more than $8,000 in drug currency, and a loaded Glock 9mm pistol with a 31-round extended magazine were recovered during the search. Freeman, who has three prior felony convictions, was subsequently detained on federal drug charges.
On Monday, September 14th, he accepted a plea of 12 ½ years in federal prison. Freeman also faces a fine of up to $2,500,000 when sentenced.
He’s scheduled to be sentenced by Judge Samuel H. Mays Jr. on December 17, 2015.
The case was investigated by the FBI and the Memphis Police Department.
Assistant U.S. Attorneys Daniel French and Reagan Taylor are prosecuting this case on the government’s behalf.
Announcement of the Second Chance OR Else (SCORE) Drug Market Intervention ProgramRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama, Mobile Police Department (MPD) Chief of Police James Barber, Health Officer for Mobile County, Bernard H. Eichold II, and community leaders from Mobile’s Campground neighborhood announce a ceremony to acknowledge the successful progress of the Second Chance OR Else (SCORE) Program participants. The ceremony will take place on September 17, 2015 at Mount Olive Missionary Baptist Church located at 409 Lexington Avenue in Mobile, Alabama at 6pm. Friends and family members of the SCORE Program participants, law enforcement, the community and the media are encouraged to attend.
The SCORE Program is a collaborative Drug Market Intervention Program (DMIP) of the US Attorney’s Office, MPD, Mobile County Health Department’s Fatherhood Initiative and community leaders from Mobile’s Campground community. The purpose of the SCORE Program is to make the community safer by providing a select few street or low-level non-violent drug dealers an opportunity to engage in an intensive community mentorship program where the participants are connected with social service providers, community leaders and area clergy, all of which can assist them in transitioning their behavior and lives away from a life of crime. Participation in the SCORE is one year. Next week’s event marks SCORE Program participants’ successful six month participation in the program.
US Attorney Brown and Chief Barber will be available for interviews at the conclusion of the ceremony on September 17th.
12 People Charged with Heroin Trafficking After Statewide Multi-Jurisdictional InvestigationsRead the Press Release
The Office of the United States Attorney for the District of Vermont and Vermont's federal, state, and local law enforcement officials today announced federal criminal charges against 12 individuals accused of trafficking heroin in Vermont. The charges resulted from three long-term investigations characterized by a high level of cooperation among federal, state, and local agencies. In total, the three investigations seized the equivalent of 20,000 bags of heroin with a street value of approximately $200,000.
United States Attorney Eric Miller praised the agencies that assisted in the investigations and arrests, which included the Drug Enforcement Administration (DEA), the Vermont State Police Drug Task Force, the Federal Bureau of Investigation (FBI), the Bureau of Alcohol Tobacco and Firearms (ATF), Homeland Security Investigations (HSI), Customs and Border Protection (Plattsburgh Air Branch), the Burlington Police Department, the Rutland Police Department, and St. Johnsbury Police Department. Miller pointed to the recent criminal charges as examples of the cross-jurisdictional cooperation necessary to combat heroin trafficking in Vermont, saying, "We will continue to achieve these meaningful results only by sharing information, expertise, and personnel across federal, state and local agencies."
All of the charges announced today will be prosecuted by the United States Attorney’s Office’s Heroin Trafficking Team. First organized in January 2015, the Heroin Trafficking Team is an effort by the United States Attorney's Office to focus federal prosecutorial resources in a manner best designed to disrupt the flow of heroin into and within Vermont. The Team consists of four prosecutors, each of whom is assigned to one of the four quadrants of the State for purposes of initial charging decisions and information gathering. They conduct weekly conference calls with the officers and agents performing the on-the-ground police work in those quadrants. Together, the prosecutors, officers, and agents prioritize targets and discuss strategic and legal issues surrounding each investigation. The Team members also meet regularly to share information about their quadrants.
The United States Attorney’s Office has charged 87 defendants with heroin-related federal crimes in the first eight months 2015, compared to 56 defendants during that same period last year, an increase of nearly 60%. Those increases are directly attributable to the combined work of law enforcement officers and prosecutors.
State, federal, and local officials have made clear their commitment to continuing their high level of coordination in response to Vermont’s heroin crisis. “DEA is committed to investigating and dismantling Drug Trafficking Organizations (DTO), like those operating in Vermont,” said Special Agent in Charge Michael J. Ferguson. “DEA will aggressively pursue trafficking organizations or individuals who are coming from out of state to distribute illegal drugs -- in this case heroin and cocaine -- to areas of Vermont in order to profit and destroy people’s lives, and wreak havoc in our communities. This investigation would not have been a success without the continued commitment of our state and local law enforcement partners.”
Vermont Governor Peter Shumlin added, "I want to thank the United States Attorney’s Office and all of the state, federal, and local law enforcement officers who worked together to bring these individuals to justice. Their coordinated efforts to keep this poison out of Vermont are a key part in our battle against addiction. We're all in this one together - prosecutors, judges, law enforcement, health care providers, policy makers, and others. Everyone has a part to play as we work to find new and better ways to confront a problem affecting every state in America."
A brief summary of each investigation and the resulting allegations is provided below. Documents related to each investigation are attached to the electronic copy of this press release posted on the website of the United States Attorney’s Office.
The Allegations Regarding Miguel Zayas, Lamar Carter, and Others
On September 10, 2015, a federal grand jury returned a fourteen-count indictment charging eight people with a large-scale heroin and crack cocaine trafficking conspiracy based in Caledonia County. Miguel Zayas, Lamar Carter, Karen Schumann, Derek Dawson, Ryan Farnham, Thomas Newman, Taylor May, and one other not yet arrested, are charged with conspiring to distribute heroin and crack cocaine in Vermont from early 2014 through August of this year. In filings with the court, the government has alleged the following with respect to the defendants: The drug ring – which trafficked mainly in heroin – was supplied by Zayas, 30, of New Jersey City, New Jersey and, his partner, Lamar Carter, age 24, who is from Brattleboro and also has ties to New Jersey. The remaining six defendants named in the indictment are Vermonters who reside in Caledonia County and served as the local infrastructure for the Zayas-Carter heroin business. These local facilitators are Schumann, age 37, of St. Johnsbury; Dawson, age 25, of St. Johnsbury; Farnham, age 24, of St. Johnsbury; Newman, age 35, of Barnet; and May, age 19, of Lyndon, along with one other defendant who is still at large. Earlier this year, two other Vermont facilitators of the Zayas-Carter heroin business, Sue-Ann Christie, age 46, of St. Johnsbury, and Jacob Isham, age 28, of Lyndon were charged in separate indictments with distribution of heroin. Also yesterday, Lamar Carter’s mother, Jacobina Carter, 39, of Brattleboro was arrested for an unrelated heroin distribution she allegedly committed in Brattleboro earlier this year.
The Zayas-Carter investigation was a long-term multiagency effort spearheaded by the Vermont State Police Drug Task Force. Other agencies involved in the investigation include the FBI, HSI, and the St. Johnsbury Police Department. The Drug Task Force and FBI took the lead in conducting controlled buys and interviewing witnesses. The FBI and HSI played an instrumental role in obtaining federal search warrants for the targets’ cell phone coordinates and electronic devices, as well as for residences of local facilitator defendants in St. Johnsbury and Barnet, Vermont. The St. Johnsbury police department played a key role in assisting with execution of a search warrant at the St. Johnsbury residence of Karen Schumann, who is charged not only with the heroin conspiracy, but with making her residence available for drug use and distribution.
The United States Attorney’s Office emphasizes that the charges against the defendants are only accusations and the defendants are presumed innocent unless and until they are proven guilty.
The Allegations Regarding Michael Villanueava (aka “Unc”)
In January of this year Tyrone Dixon was found by the Department of Homeland Security in Vermont with approximately 80 grams of crack cocaine hidden inside a loaf of bread. In June, he pleaded guilty and admitted in Court to having that drug while working with a man known to Dixon as “Unc.”
In February of this year, the Vermont State police stopped a Vermont-registered jeep on the interstate and discovered approximately 600 bags of heroin in the center console. The vehicle was registered to Sarah Ellwood. Building on some of the intelligence developed from these two cases by the Vermont Drug Task Force and other agencies, in July of this year the DEA obtained warrants to search a hotel room registered in the name of Sarah Ellwood, in Williston, as well as the Ellwood residence in Saint Albans.
In connection with these operations, DEA found approximately 216 grams of heroin, and approximately 250 grams of crack cocaine, a handgun, and a significant amount of cash. The grand jury subsequently indicted John and Angela Hoffman and Dorsey Hunt with conspiracy to distribute crack cocaine and heroin. As alleged in court filings, the Hoffmans and Hunt admitted to working with and at the direction of “Unc” in connection with their drug distribution activities.
Earlier this month, following up on another tip, DEA obtained a warrant to search a hotel room in South Burlington. In connection with this operation in which Burlington and South Burlington Police participated, DEA found approximately 223 grams of heroin and 280 grams of crack cocaine, resulting in charges against three additional persons: Michael Villanueva (whose nickname is “Unc”), Sarah Ellwood, and Felicia Livingston.
The United States Attorney’s Office emphasizes that the charges against Villanueva, Ellwood, Livingston, Hunt, and Hoffman are only accusations and the defendants are presumed innocent unless and until they are proven guilty.
The Allegations Regarding Troy Barnes
Troy Barnes of Rutland was arrested on August 20, as law enforcement executed a warrant obtained by the Vermont Drug Task Force authorizing the search of Barnes’ Rutland residence. Police found approximately 200 grams of heroin – nearly half a pound -- at Barnes’ residence. They also found a loaded handgun in the same kitchen pantry where Barnes allegedly kept part of his stash. This operation was conducted by the Vermont Drug Task Force working closely with the DEA, the FBI, ATF, the Rutland Police Department and other agencies. On August 26, the grand jury in Rutland returned an indictment charging Barnes with possessing more than 100 grams of heroin with the intent to distribute it.
The United States Attorney’s Office emphasizes that the charges against Barnes are only accusations and he is presumed innocent unless and until he is proven guilty.
14 September 2015
Williamson County Woman Pleads Guilty to Escape OffenseRead the Press Release
On September 11, 2015, Latoya M. McDaniel, 29, of Marion, pled guilty to a one-count indictment charging Escape from Federal Custody, United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence at the plea hearing established that McDaniel was serving a 78 month federal sentence for Conspiracy to Distribute Crack Cocaine. McDaniel was being housed through the Centerstone facility in Marion, Illinois. On April 6, 2015, McDaniel failed to return to Centerstone as required. McDaniel fled the area and was located and arrested by the United States Marshals Service in Missouri on June 23, 2015.
The escape offense carries a penalty of up to 5 years of federal prison, in addition to the sentence already being served, to be followed by 3 years’ supervised release, and a maximum fine of $250,000.
The investigation was conducted by the United States Marshals Service. The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Wilkes-Barre Man Pleads Guilty to Federal Heroin Trafficking OffenseRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Wilkes-Barre man pleaded guilty today in United States District Court in Scranton, before United States District Judge Malachy E. Mannion, to a federal heroin trafficking charge.
According to United States Attorney Peter Smith, Larry Hayes, age 28, admitted to the charge of possession with intent to distribute heroin. Hayes and another defendant were indicted by a grand jury in June 2015.
The charges stem from an incident in which investigators served a search warrant at a residence located on Sullivan Street in Wilkes-Barre and seized heroin from a bedroom in which Hayes was sleeping. From another bedroom in which the co-defendant was sleeping, investigators seized an additional amount of heroin and two firearms.
The investigation was conducted by the Wilkes-Barre Police Department and the Bureau of Alcohol, Tobacco and Firearms (ATF).
The charges against the co-defendant, Disean Kendricks, are still pending.
The cases are being prosecuted by Assistant United States Attorney Robert J. O’Hara.
Indictments and Criminal Informations 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 20 years of imprisonment, 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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West Michigan Farmer, Leonard Arthur Kolberg, Jr., Sentenced to Prison for Defrauding Federal Farm Programs of More Than $500,000Read the Press Release
GRAND RAPIDS, MICHIGAN — Leonard Arthur "Lenny" Kolberg, Jr., 57, of Bangor, Michigan, was sentenced today to one year and one day in prison for defrauding federal farm programs of more than $500,000. U.S. District Judge Paul L. Maloney imposed the sentence.
In December 2009, Kolberg, who was a farmer and owner of Kolberg Farms, pledged a portion of his harvested corn in exchange for a $145,000 marketing assistance loan from the Farm Services Agency. Marketing assistance loans are designed to provide farmers with interim financing at harvest time to help them meet cash flow needs without having to sell their commodities when market prices are at their lowest. Kolberg defrauded the Farm Services Agency by lying about the amount of corn he pledged as security for the loan, and by selling the corn in the private market and keeping the proceeds, instead of paying off the loan. Kolberg hid some of his activity by selling the corn in other peoples’ names.
At the same time, Kolberg filed fraudulent crop insurance claims in connection with his 2009 harvest. He subsequently filed fraudulent crop insurance claims in connection with his 2013 and 2014 harvests. All told, Kolberg defrauded federal farm programs of $524,838.00.
U.S. Attorney Miles said that "protecting taxpayers and honest, hardworking farmers who rely on farm assistance programs is an important part of our mission. Individuals who defraud those programs should know that they will be prosecuted."
The case was investigated by the U.S. Department of Agriculture Office of Inspector General. It was prosecuted by Assistant U.S. Attorney Clay Stiffler.
END
US v. City of Portland - Compliance Assessment ReportRead the Press Release
The United States has prepared the enclosed periodic compliance status assessment report (hereinafter, ‘Report’) in preparation for our September 14, 2015 meeting with the Albina Ministerial Alliance Coalition for Justice and Police Reform (AMAC) regarding the City of Portland’s (the City) progress in implementing the parties’ Settlement Agreement,
see Collaborative Agreement 15, Dec. 30, 2013, ECF No. 55-1. This Report also serves as a platform to respond to the Court’s order to "describe to the Court the progress being made toward achieving substantial compliance with all provisions of the Settlement Agreement and any obstacles or impediments toward that end." Order, July 30, 2015, ECF No. 99. We will provide a copy of this Report to the Court, the AMAC, and the Compliance Officer/Community Liaison (COCL), and we anticipate presenting a copy to the Community Oversight Advisory Board (COAB) at its October meeting. We also plan to post it on our public DOJ website. In addition to the comprehensive assessment required pursuant to paragraph 175 of the Settlement Agreement, see ECF No. 4-1 175, the United States may provide additional periodic compliance status assessment reports and technical assistance as we monitor the City’s compliance with the Settlement Agreement, pursuant to paragraph 167.
For the attached Report, we reviewed extensive documentation, particularly PPB’s quarterly self-assessment reports from the First Quarter of 2014 through the present. Each quarterly self-report referred to documentation that PPB believes supports its own assessment of compliance. References to "folders" herein are to the City’s individually-numbered electronic folders corresponding to the paragraph(s) of the Settlement Agreement that the documentation reportedly supports. This Report considers the information provided by the City as of August 28, 2015, up to and including the Quarterly Report for the Second Quarter of 2015 and supporting documentation. In addition to document review, we also consulted with our two expert consultants, conducted interviews of City employees, and made personal observations at City-sponsored meetings (such as the Community and Police Relations Council, Citizens Review Committee, Community Oversight and Advisory Board, Behavioral Health Unit Advisory Committee, and the Training Advisory Council).
As the City is aware, the Effective Date of the Settlement Agreement is August 29, 2014. During this past year, however, the DOJ and City have engaged in additional settlement negotiations regarding the City’s appeal of the Court’s order entering the Settlement Agreement, which was finally resolved on July 30, 2015, when the Court entered an amended Order. To the extent that we have not yet been able to engage in a full assessment of implementation of any particular area of the Settlement Agreement, we have so noted in our analysis.
This Report uses the following color-coded compliance status levels to indicate our current assessment of PPB’s progress in complying with each provision of the Settlement Agreement:
Blue: compliance rating pending or not measured. This level indicates that either the specific provision does not have a specific measurement to assess, or that the DOJ has not yet been able to fully assess compliance, either due to insufficient documentation provided for assessment, or because DOJ must complete additional analysis/observation of how the specific provision is being implemented.
Green: substantial compliance with an ongoing obligation. This level indicates that the City has implemented the specific provision as required by the Settlement Agreement, and that the City has an ongoing obligation to continue such action to remain in compliance.
Yellow: partial compliance with an ongoing obligation. This level indicates that while there has been progress made with implementation, specific areas need further attention in order to reach substantial compliance.
Red: non-compliance. This level indicates that we have recognized barriers to achieving implementation of the provision that must be addressed to achieve compliance.
The Parties have acknowledged that the systemic reforms required by the Settlement Agreement will take time to implement.
See, e.g., Settlement Agreement 178(a) (anticipating substantial compliance with all provisions by October 12, 2017). Our analysis and technical assistance provided with this Report is intended to both acknowledge the City’s accomplishments achieved thus far in the implementation of the Settlement Agreement and to advise the City on certain course corrections that will help achieve compliance.
As always, we appreciate the various City bureaus’ efforts and progress in implementing the terms of our Settlement Agreement and look forward to a continued cooperative relationship in achieving our mutual goal of sustained constitutional and effective policing in the City of Portland.
For a copy of the original cover letter as well as the full compliance report please see the attached .pdf document.
us_v._city_of_portland_-_compliance_assesment_report_and_cover_letter_-_september_10_2015.pdf (556.05 KB)
Two Plead Guilty in Conspiracy to Cash Stolen U.S. Treasury ChecksRead the Press Release
PROVIDENCE, R.I. – Brenda Canuelas, 39, and Jesus Rivera, 45, of Providence, pleaded guilty in U.S. District Court in Providence to conspiring with one another to cash between $81,463 and $107,006 worth of stolen United States Treasury checks, announced United States Attorney Peter F. Neronha, Providence Police Chief Colonel Hugh T. Clements, Jr. and Rafael Medina, Special Agent in Charge of the Northeast Area United States Postal Service Office of Inspector General (USPS-OIG).
Appearing before U.S. District Court Judge John J. McConnell, Jr., Canuelas and Rivera pleaded guilty to one count of conspiracy and one count of converting stolen U.S. Treasury checks. They are scheduled to be sentenced on December 15, 2015.
According to court documents and information presented to the court, in September 2014, USPS-OIG agents and detectives from the Providence Police Intelligence and Organized Crime Unit began investigating the circumstances surrounding a significant number of missing Treasury checks addressed to individuals in Rhode Island and nearby Massachusetts. The investigation determined that many individual bank accounts were being opened in the name on missing checks, usually in a slightly altered form, by individuals other than the true owner of the check. The stolen checks were deposited in the accounts in amounts ranging from a few thousand dollars to more than $10,000. The accounts were then drawn down by cash withdrawals from ATMs, the purchase of goods and services, or by the purchase of money orders. Most of the bank accounts were opened in Rhode Island.
According to court documents, USPS-OIG agents reviewed surveillance photographs and videos from area banks and retail stores and identified two individuals who repeatedly made deposits of stolen U.S. Treasury checks, made cash withdrawals and made purchases using funds from the stolen checks. USPS-OIG agents and Providence Police Intelligence and Organized Crime Unit detectives worked together to identify the individuals as Brenda Canuelas and Jesus Rivera.
The defendants were arrested on May 19, 2015.
The case is being prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
Federal agents from the Veterans Administration Office of Inspector General and the U.S. Treasury Office of Inspector General assisted agents from the United States Postal Service Office of Inspector General and detectives from the Providence Police Intelligence and Organized Crime Unit in the investigation of this matter.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Two Mobile Phone Industry Executives Arrested in Multimillion-Dollar Consumer Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, William P. Offord, the Special Agent-in-Charge of the Boston Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrests of DARCY WEDD and ERDOLO EROMO, the CEO and Senior Vice-President of Business Development, respectively, at a mobile aggregation company based in the United States (the “U.S. Mobile Aggregator”), for their participation in a scheme to charge mobile phone customers millions of dollars in monthly fees for unsolicited, recurring text messages without the customers’ knowledge or consent – a practice known as “auto-subscribing.” EROMO was arrested this morning in California, and is expected to be presented today in federal court in Los Angeles before United States Magistrate Judge John E. McDermott. WEDD was arrested this afternoon in New York, and is expected to be presented today in federal court in New York before United States Magistrate Judge Ronald L. Ellis. Also named in the Indictment were CHRISTOPHER GOFF, MICHAEL PEARSE, YONGCHAO LIU, a/k/a “Kevin Liu,” and YONG JASON LEE, a/k/a “Jason Lee,” all of whom were previously charged in a criminal complaint for their respective roles in the scheme.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Darcy Wedd, Erdolo Eromo and their co-conspirators engaged in a practice known as ‘auto-subscribing,’ forcing mobile phone users to pay charges for unsolicited and unwanted text messaging services, including horoscopes and celebrity gossip. Although the text messages were often trivial, what the defendants allegedly did was far from a joking matter. Their criminal scheme allegedly fleeced hundreds of thousands of everyday customers from around the country out of millions of dollars.”
IRS Special Agent-in-Charge William Offord said: “Criminals rely more and more on technology to facilitate their fraud schemes. Those considering this type of cybercrime should take note: “auto-subscribing” scams could mean “auto-arrest,” conviction and jail time.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, the defendants and their co-conspirators profited in the sum of tens of millions of dollars from the scheme to charge mobile phone customers monthly fees for unsolicited text messages. Consumer fraud like this can have devastating impacts on consumers, businesses and the integrity of the mobile phone industry.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court:[1]
The Auto-Subscription Scheme
From in or about 2011, through in or about 2013, WEDD, EROMO, GOFF, PEARSE, LIU, LEE, and other co-conspirators engaged in a multimillion-dollar scheme to defraud consumers by placing unauthorized charges for premium text messaging services on consumers’ cellular phone bills, without the consumers’ knowledge or consent, through a practice known as “auto-subscribing.”
During the relevant time period, LEE and two other co-conspirators (“CC-1” and “CC-2”) worked for a company that offered premium text messaging services to mobile phone customers (the “Content Provider”). WEDD, EROMO, GOFF, and another co-conspirator (“CC-3”) worked for the U.S. Mobile Aggregator. PEARSE and LIU worked for a mobile aggregator based in Australia (the “Australian Mobile Aggregator”). Mobile aggregators compile, or “aggregate,” charges for premium text messaging services – such as monthly horoscopes, celebrity gossip, and trivia facts – on consumers’ mobile phone bills.
In or about 2010, CC-1 decided to begin auto-subscribing mobile phone users to the Content Provider’s premium text messaging services in order to boost the Content Provider’s sagging revenues. CC-1 approached PEARSE and LIU and asked them to build a computer program that could spoof the required consumer authorizations for premium text messaging services – i.e., a program that could generate the text message correspondence that one would ordinarily see if a consumer was genuinely signing up to receive the services. PEARSE and LIU agreed to build the program (the “Auto-Subscription Platform”), which was operational by in or about the middle of 2011. In or about July 2011, CC-1 approached GOFF, who was the account manager for the Content Provider at the U.S. Mobile Aggregator, in order to obtain a large volume of mobile phone numbers to run through the Auto-Subscription Platform. GOFF sent CC-1 hundreds of thousands of phone numbers, in exchange for payment, for the purpose of auto-subscribing consumers.
In or about October 2011, CC-1 met with WEDD and told him, in sum and substance, that CC-1 wanted to auto-subscribe consumers through the U.S. Mobile Aggregator’s billing platform and needed additional phone numbers to do so. WEDD agreed to assist CC-1 in exchange for an up-front payment of approximately $100,000 and a percentage of the auto-subscription proceeds. WEDD further told CC-1, in sum and substance, that CC-3, who was the Vice President of Compliance and Consumer Protection for the U.S. Mobile Aggregator, would provide phone numbers to CC-1 and that all payments needed to go through CC-3. WEDD later received his portion of the payments from CC-1 via CC-3.
After CC-1 received phone numbers from WEDD and CC-3, CC-1 passed them on to LEE, the Chief Technology Officer of the Content Provider, who was responsible for verifying that the numbers were still valid and active, and for sorting and filtering the numbers to make it easier to run them through the Auto-Subscription Platform. After LEE performed these functions, CC-1 sent the numbers to PEARSE and LIU to be run through the Auto-Subscription Platform.
CC-1 also met with EROMO, at the direction of WEDD. EROMO told CC-1, in sum and substance, that EROMO knew about the plan to auto-subscribe consumers and requested $10,000 in cash to migrate each of CC-1’s premium text messaging services to a different billing platform at the U.S. Mobile Aggregator to facilitate the auto-subscriptions. EROMO and CC-3 also sold CC-1 and CC-2 so-called “blacklists” or “ninja lists” for approximately $10,000 each. The blacklists or ninja lists, which were lists of phone numbers that should not be auto-subscribed, included phone numbers belonging to executives at the mobile phone carriers and people at mobile industry compliance groups, who would likely initiate an audit if they noticed that they had been auto-subscribed to a premium text messaging service that they had not authorized. To pay EROMO for his assistance, CC-1 sent, or caused to be sent, several cash payments to EROMO’s residence through the mail.
The auto-subscription scheme affected hundreds of thousands of consumers and generated tens of millions of dollars in proceeds, which the defendants apportioned among themselves and were used to fund a lavish lifestyle of expensive vacations and gambling.
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WEDD, EROMO, GOFF, PEARSE, LIU, and LEE are each charged with one count of conspiracy to commit wire fraud and mail fraud, and one count of wire fraud, each of which carries a maximum term of 20 years in prison. WEDD, EROMO, and GOFF are also each charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
GOFF and LEE were arrested on May 27, 2015. PEARSE and LIU reside in Australia and have not yet been arrested.
Mr. Bharara praised the investigative work of the IRS-CI and the FBI, and expressed his sincere gratitude to the Federal Trade Commission for their support and assistance with the investigation. He also thanked the U.S. Attorney’s Office for the Central District of California for their help in coordinating the arrests of the defendants.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Christian R. Everdell and Sarah E. Paul are in charge of the prosecution.Assistant U.S. Attorney Edward B. Diskant of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Harrison County, WV men sentenced for unlawful possession of firearmsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Wade Highland, 45, of Lost Creek, West Virginia, and Darius Henning, 24, of Clarksburg, were sentenced today in federal court for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
Highland was sentenced today to 57 months in prison. He was previously convicted in February 2009 of “Grand Larceny” in the Circuit Court of Harrison County, West Virginia. As a result of the conviction, he is prohibited from possessing firearms. In August 2014, Highland was discovered in unlawful possession of thirteen firearms. He pled guilty in May 2015 to one count of Felon in Possession of a Firearm.” The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
Henning was previously convicted in January 2011 of “First Degree Robbery” in the Circuit Court of Harrison County, West Virginia. As a result of that conviction, he is prohibited from possessing firearms. He was discovered in January 2015 in possession of a stolen .45 caliber pistol in Harrison County, West Virginia. He pled guilty in May 2015 to one count of “Felon in Possession of Firearm” and one count of “Possession of Stolen Firearm.” He was sentenced today to 63 months in prison on each count. These sentences will run concurrently for a total of 63 months of incarceration. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Clarksburg Police Department investigated.
Assistant U.S. Attorney Zelda Wesley prosecuted Highland and Wesley and former Assistant U.S. Attorney Shawn Morgan prosecuted Henning on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Twenty-Eight South Florida Residents Sentenced in Marriage and Immigration Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, announce that on August 24, 2015, Inaldo Chavez, 57, of Hialeah, Caridad Baez, 50, of Hialeah, and Masiel Puron, 33, of Marathon, were sentenced following their pleas of guilty to various immigration fraud charges. The conspiracy’s organizers, Chavez and Baez, were sentenced to 21 months’ imprisonment. Recruiter Puron was sentenced to 10 months’ imprisonment. The other defendants, Elides Rodriguez Vallejo, 42, of Marathon, Claudio Catapano, 49, of Argentina, Naile Yubero Carrasco, 30, of Hialeah, Enrique Giglio, 32, of Venezuela, Duniesky Alvarez Perez, 26, of Homestead, Angela Cuellar Velandia, 29, of Colombia, Marcos Vila, 25, of Homestead, Olena Pokotiuk, 27, of Ukraine, Dayana Trigueiro, 21, of Homestead, Vladimir Popa, 28, of Moldova, Yinet Hernandez Martinez, 31, of Weston, Daylin Ramirez Pereira, 24, of Marathon, Igor Singereanu, 29, of Moldova, Jennifer Gutierrez, 22, of Marathon, Serghei Serdiuc, 27, of Moldova, Suset Nodarse Gonzalez, 23, of Coral Gables, Eldar Ben Atar, 28, of Israel, Kassandra Perdomo, 21, of Miami, Efrain Basaldella Landa, 24, of Venezuela, Elio Martinez Alan, 44, of Hialeah, Maria Pinto Camacho, 48, of Venezuela, Jenny Gonzalez, 24, of Miami, and Ido Sharir, 25, of Israel, were sentenced in June following their pleas of guilty to various immigration fraud charges. They received varying sentences. One other individual charged in the indictment remains as a fugitive, Camilo Benavides Prieto, 30, of Colombia.
According to court documents, between May 2011 and February 2014, organizers, Chavez and Baez, and recruiters, including Puron, arranged for United States citizens and lawful permanent residents to enter into fraudulent marriages with aliens for the purpose of evading the immigration laws of the United States. Chavez, Baez, and Puron charged the aliens a fee to arrange the fraudulent marriages, notarized the fraudulent marriage licenses, completed the necessary immigration paperwork, and prepared the co-conspirators for their interviews with United States Citizenship and Immigration Services. The United States citizen and lawful permanent resident co-conspirators also charged the aliens a fee to enter into the fraudulent marriages. Aliens Catapano, Giglio, Velandia, Pokotiuk, Popa, Prieto, Singereanu, Serdiuc, Atar, Landa, Camacho, and Sharir, all paid a fee to enter into fraudulent marriages with United States citizens Gutierrez and Jenny Gonzalez, and lawful permanent residents Vallejo, Carrasco, Perez, Vila, Trigueiro, Martinez, Pereira, Suset Gonzalez, Perdomo, and Alan. These fraudulent marriages took place in the Southern District of Florida. In addition, during the time that they were arranging the fraudulent marriages, Chavez and Baez personally attempted to fraudulently obtain naturalization.
Mr. Ferrer commended the investigative efforts of ICE-HSI and U.S. Citizenship and Immigration Services, who provided significant and valuable support to this investigation. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.
An indictment is only an accusation, and the defendants are presumed innocent until proven guilty.
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.
Tumalo Falls Vandalism Case ResolvedRead the Press Release
EUGENE, Ore. - On May 2, 2015, the railing at Tumalo Falls in Tumalo, Oregon, was vandalized. The U.S. Forest Service investigated the incident, issued a federal ticket for the violation, and referred the matter to the U.S. Attorney’s Office. A fine was assessed and restitution was paid to the U.S. Forest Service to repair the railing. The citation is now resolved. The details of the federal ticket are not public record and no further information will be provided.
Three plead guilty in Charleston to federal heroin chargesRead the Press Release
Charleston, W.Va. – Co-defendants Michael Richard, 30, Cassandra Washington, 24, both of Charleston, and James Harris, 23, of Detroit, Michigan, pled guilty today in federal court in Charleston to their individual roles in the sale of heroin from a home in in Elkview, West Virginia in April of 2014. Richard admitted that on April 10, 2014, he sold heroin to a confidential informant working with the Metropolitan Drug Enforcement Network Team (MDENT) in exchange for $120.00.Washington and Harris admitted that when agents of the MDENT executed a search warrant at the Elkview residence a short time after the controlled buy, they were both inside the residence. After seizing additional amounts of heroin, digital scales and the money that law enforcement had used to make undercover buys, Harris admitted he transported the heroin from Detroit with another individual for sale from the Elkview residence by Richard and Washington. Washington also admitted that she intended to sell the heroin provided by Harris. All three face up to twenty years imprisonment and a $1,000,000.00 fine when sentenced on December 10, 2015.
The case was investigated by MDENT. AUSA John Frail is responsible for the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal heroin and pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Three More Individuals Charged in Effort to Combat Prescription Drug AbuseRead the Press Release
BATON ROUGE, LA –United States Attorney Walt Green announced that combined federal, state, and local efforts to combat prescription drug abuse has resulted in a federal grand jury indictment charging three individuals in a prescription drug and cocaine distribution conspiracy. The Indictment alleges that between October and December of 2013, the defendants conspired to distribute oxycodone and cocaine. If convicted, each defendant could face significant incarceration, fines, restitution, forfeiture, and supervised release following imprisonment.
The following individuals have been indicted:
ARMAD RASHAD BROWN, a.k.a. “Stacks,” age 36, of Baton Rouge, Louisiana, is charged with one count of conspiracy to distribute and possess with the intent to distribute a controlled substance, and five counts of distribution of a controlled substance.
BRIA HUNTSBERRY, age 23, of Baton Rouge, Louisiana, is charged with one count of conspiracy to distribute and possess with the intent to distribute a controlled substance and one count of distribution of a controlled substance.
TAMARA ACHORD, age 45, of Baton Rouge, Louisiana, is charged with one count of conspiracy to distribute and possess with the intent to distribute a controlled substance, one count of possession with the intent to distribute a controlled substance, and two counts of distribution of a controlled substance.
According to law enforcement officials, during the arrest of BROWN pursuant to the arrest warrant issued in this case, agents recovered approximately 416 Oxycodone pills, 175 grams of Ecstasy, and three firearms, including an AK-47 from BROWN’s residence.
United States Attorney Green stated: “Prescription drug misuse and addiction is a prevalent issue affecting Baton Rouge and the nation at large. In particular, studies have shown that prescription drugs account for a vast majority of drug overdoses. Prescription drug abuse and the related societal costs are a high priority of this office, and we are committed to reversing this deadly trend.”
DEA Assistant Special Agent in Charge Joseph Shepherd stated: “Prescription drugs continue to be an extremely serious problem, not just in Louisiana, but nationwide. DEA and our law enforcement partners will continue to investigate organizations that peddle drugs in our communities. Those persons who are involved in this illicit activity will be forced to bear the consequences of their actions.”
This ongoing investigation is being handled by the United States Attorney’s Office for the Middle District of Louisiana in conjunction with the Drug Enforcement Administration, the Baton Rouge Police Department, the East Baton Rouge Parish Sheriff’s Office, the Iberville Parish Sheriff’s Office, and the Louisiana State Police. It is being prosecuted by Assistant United States Attorney Jamie A. Flowers, Jr.
NOTE: An indictment is an accusation by the Grand Jury. The defendants are presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Texas Fugitive Pleads Guilty to Aggravated Identity Theft and Manufacturing Counterfeit Federal Reserve NotesRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Joe Eugene Loving (46, Texas) has pleaded guilty to manufacturing counterfeit Federal Reserve notes, false representation of a Social Security number, and aggravated identity theft. He faces a maximum penalty of 25 years in federal prison for the counterfeit notes and false representation charges, to be followed by a consecutive mandatory minimum of 2 years’ imprisonment for the aggravated identity theft charge. A sentencing date has not yet been set.
According to the plea agreement, on February 2, 2015, the Green Cove Springs Police Department received information that two individuals, later identified as Loving and John Thomas Humphreys, were manufacturing counterfeit Federal Reserve notes in their hotel room at the Astoria Hotel in Clay County. The two men had active arrest warrants for parole violations in Texas and were subsequently arrested at the hotel by deputies from the Clay County Sheriff’s Office. Deputies found a counterfeit $100.00 note on Loving after his arrest.
During an interview with law enforcement, Humphreys and Loving stated, among other things, that they had been involved in a drug deal in Texas in December 2014 and had been on the run ever since. They estimated printing and passing at least $10,000.00 in counterfeit currency. In addition, they printed counterfeit checks using the identities of others.
During a subsequent search of the hotel room, agents located a box of personal identification information and financial documents belonging to other individuals, a printer/scanner/copier with counterfeit checks lying on top of it, counterfeit currency, and various computer media which had been used to manufacture the counterfeit currency.
A third individual, Paul Corbin Pennington, Jr., was also charged in this case for passing counterfeit currency. Pennington, a maintenance worker at the Astoria Hotel, loaned Loving and Humphreys his computer to watch movies. Loving and Humphreys used the computer to print counterfeit checks. Pennington confessed to law enforcement officers that he had passed counterfeit currency in Clay County.
Pennington previously pleaded guilty to one count of passing counterfeit currency. His sentencing hearing is scheduled for October 13, 2015. Humphreys previously pleaded guilty to manufacturing counterfeit Federal Reserve notes, false representation of a Social Security number, and aggravated identity theft. His sentencing hearing is scheduled for October 27, 2015.
This case was investigated by the Green Cove Springs Police Department, the Clay County Sheriff’s Office, and the United States Secret Service Jacksonville Field Office. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
St. Thomas Man Pleads Guilty to Possession of Firearm by Convicted FelonRead the Press Release
St. Thomas, USVI – On Monday, September 14, 2015, Lued Browne, 44, pleaded guilty in District Court on St. Thomas to Possession of a Firearm by a Convicted Felon, United States Attorney Ronald W. Sharpe announced. Sentencing is scheduled for January 4, 2016.
According to the plea agreement filed with the court, on May 22, 2015, Virgin Islands Police Department officers responded to a report that a vehicle was blocking the exit at Antilles School. Upon arrival at the scene, officers observed Browne, the sole occupant of the vehicle, sitting in the driver’s seat of the vehicle. The officers also observed a firearm between the driver’s seat and center console of the vehicle, which they immediately confiscated. Further investigation revealed that Browne has a prior felony conviction and could not legally possess a firearm in the Virgin Islands. Browne faces a maximum sentence of 10 years in prison and a $250,000 fine.
This case is the result of a joint investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Virgin Islands Police Department. It is being prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
St. Thomas Man Pleads Guilty to Firearm Conspiracy ChargeRead the Press Release
St. Thomas, USVI – On Monday, September 14, 2015, Ja’moi Khadeem Corraspe, 22, pleaded guilty in District Court on St. Thomas to Conspiracy to Ship Firearms with Obliterated Serial Numbers, United States Attorney Ronald W. Sharpe announced. Sentencing is scheduled for January 4, 2016.
According to the plea agreement filed with the court, between August 6, 2013 and October 7, 2013, Corraspe conspired with other individuals to unlawfully mail firearms with obliterated serial numbers from Jacksonville, Florida to St. Thomas. He directed the shipping of two firearms from Jacksonville to St. Thomas: a Smith and Wesson, Model SD40VE, .40 caliber pistol and a Glock, Model 20, 10mm pistol, both with obliterated serial numbers. Corraspe is not a federal licensed firearms dealer and is not authorized to possess the two firearms in the District of the Virgin Islands. He faces a maximum sentence of five years in prison and a $250,000 fine.
This case is the result of a joint investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Springfield Man Pleads Guilty to $1.1 Million Investment Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man pleaded guilty in federal court today to a more than $1.1 million investment fraud scheme.
Christopher Hanson, 53, of Springfield, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a two-count information that charges him with wire fraud and money laundering. Hanson is the owner of Hanson Holdings, LLC.
By pleading guilty today, Hanson admitted that he was responsible for losses that totaled $1,134,500 for three victims of his investment fraud scheme.
Hanson offered the three victims what he described as “an investment opportunity.” Hanson told two of the victims that he would take their investment monies and purchase a collateralized mortgage obligation (CMO). Hanson claimed that a line of credit would be obtained against the CMO and both victim investors would receive their original investment plus a substantial dividend within months. Hanson told the third victim that he would purchase bonds and securities with his $100,000 investment. Hanson claimed this investment would generate a 250 percent return and that the victim investor would receive double his original investment within 40 weeks.
According to today’s plea agreement, financial records revealed that none of the monies obtained by Hanson or Hanson Holdings from these three investors were used to purchase securities or a CMO as Hanson had promised. Agents determined that Hanson authorized the release of the investors’ monies from his Scottrade Account, ETrade Account, or StockCross Account, into his personal bank accounts. The monies were then used to either pay other investors or pay expenses that were completely unrelated.
Under federal statutes, Hanson is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and IRS-Criminal Investigation.
Sarasota Man Sentenced to Prison for Investment FraudRead the Press Release
Tampa, FL –U.S. District Judge Elizabeth A. Kovachevich has sentenced Gaeton Della Penna (62, Sarasota) to five years and ten months in federal prison for mail and wire fraud related to an investment scheme. As part of his sentence, the court ordered restitution for his victims and entered a money judgment of more than $2.8 million, representing the proceeds of fraud. Della Penna pleaded guilty on May 5, 2015.
According to court documents, Della Penna enticed investors to invest in his “investment funds” by guaranteeing them at least 5% yearly interest on their investment, with the principal to be returned at the end of an 18-month period, minus a nominal management/organizational fee paid to Della Penna, plus any trading profits. These representations were false. Rather than making profitable trades and protecting investors’ principal, Della Penna used a portion of the investors’ money for trading, lost money in his trades, and misappropriated the rest of the investors’ money by using it to repay other investors’ principal. False statements and “quarterly” interest checks were sent to the investors to entice them to invest more money. Della Penna also paid personal expenditures with the investors’ money, including mortgage payments on his waterfront residence.
This case was investigated by the United States Secret Service and the Sarasota Police Department. It was prosecuted by Assistant United States Attorney Kelley Howard-Allen.
Rhode Island Man Sentenced to Five Years in Prison for Masterminding Bank Fraud Conspiracy, Identity Theft, Passing Counterfeit MoneyRead the Press Release
PROVIDENCE, R.I. – David Alcantara, 33, of Warwick, has been sentenced to 60 months in federal prison for masterminding an elaborate conspiracy to defraud two Rhode Island banks of nearly $600,000, by using stolen personal identifying information of several unsuspecting individuals, announced United States Attorney Peter F. Neronha and Ted A. Arruda, Resident Agent in Charge of the Providence Office of the U.S. Secret Service.
A federal court jury convicted Alcantara on May 1, 2015, of leading the conspiracy to defraud the banks and for leading a conspiracy to convert counterfeit $100 bills into real American dollars by making small retail purchases with bogus $100 bills and receiving cash back in Rhode Island, Massachusetts and Connecticut.
The jury convicted Alcantara of conspiracy to commit bank fraud, eight counts of aggravated identity theft and conspiracy to pass counterfeit money.
According to the government’s evidence presented at trial, in December 2009 and January 2010, Alcantara’s schemes resulted in the transfer of over $600,000 from bank accounts of legitimate bank customers into accounts fraudulently created with the use of several individuals’ stolen identities. Money was then withdrawn from the fraudulent accounts in the form of cashier’s checks.
In one scheme, Alcantara was responsible for the use of stolen identifying information belonging to a small business owner in Harrisburg, Pennsylvania, to affect in Rhode Island the transfer of $250,000 from the company’s business account into a newly opened fraudulent bank account. The account was opened using stolen identifying information of an individual who is deceased.
In a second scheme, Alcantara provided others with stolen identifying information of unsuspecting individuals and instructed them on how to use the information to establish fraudulent bank accounts at several branch offices of the same bank. Alcantara also provided them with stolen identifying information of legitimate owners of existing accounts at the same bank and instructed them to transfer funds from the legitimate accounts into the fraudulent accounts.
According to the government’s evidence, at the same time that Alcantara was affecting the bank fraud schemes, he reached out to an individual he thought could assist him in obtaining fraudulent Massachusetts drivers’ licenses. The individual he reached out to was in fact an undercover DEA agent. The DEA agent, working in conjunction with U.S. Secret Service Agents who were investigating Alcantara and the bank fraud schemes and the passing of bogus $100 bills, recorded several conversations he had with Alcantara as he attempted to secure the fraudulent IDs.
Alcantara has been detained since the date of his conviction.
The case was prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and Lee H. Vilker.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Retired Sheriff’s Deputy Guilty of Firearm ChargeRead the Press Release
RICHMOND, Va. – Melvin Hinson, 56, of Kinsale, pleaded guilty today to the charge of possession of firearms with obliterated, removed, or altered serial numbers.
In a statement of facts filed with the plea agreement, Hinson, a retired Westmoreland County Sheriff’s deputy, admitted that starting before March 2014, and continuing through and including March 19, 2014, he received firearms from law enforcement agencies for the purpose of destroying the firearms for the agencies. But instead of destroying the firearms, Hinson removed the serial numbers from the firearms and sold or traded them. According to the statement of facts, there were eight firearms involved, including a sawed-off shotgun and a sawed-off rifle. All eight of the firearms entrusted to Hinson for destruction have been recovered by law enforcement.
Hinson, who was indicted by a federal grand jury on May 5, 2015, faces a maximum penalty of five years in prison when sentenced on Dec. 18, 2015. 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 J.D. Durastanti, Assistant Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), made the announcement after the plea was accepted by U.S. District Judge John A. Gibney. Assistant U.S. Attorney Olivia L. Norman 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. 3:15-cr-081.
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Pawtucket, R.I., Man Detained on Federal Firearm, Drug Trafficking ChargesRead the Press Release
PROVIDENCE, R.I. – Jose Gomez, 26, of Pawtucket, has been ordered detained in federal custody following an investigation into Gomez’s alleged trafficking of crack cocaine, including the alleged trading of firearms for crack cocaine, announced United States Attorney Peter F. Neronha and Daniel J. Kumor, Special Agent in Charge of the Boston Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The investigation included three undercover purchases of crack cocaine allegedly from Gomez and a court authorized search of Gomez’s residence. Inside Gomez’s residence, law enforcement located a one-year-old child and a two-year-old child unattended in a bedroom where they also allegedly discovered approximately four grams of crack cocaine on a window sill.
Gomez is detained on a criminal complaint charging him with three counts of distribution of crack cocaine, one count of possession with the intent to distribute crack cocaine, one count of being a felon in possession of a firearm and one count of possession of a firearm in furtherance of a drug trafficking crime.
According to court documents and information presented to the court, it is alleged that on two occasions between August 31 and September 3, 2015, Gomez sold nearly three grams of crack cocaine for $200 in cash to an undercover ATF agent. Both transactions alleged occurred outside of Gomez’s Pawtucket residence.
According to court documents and information presented to the court, on September 8, 2015, the ATF undercover agent allegedly arranged with Gomez to trade two firearms for $200 in cash and a quantity of crack cocaine. The two met outside of Gomez’s residence two days later, and moments after Gomez allegedly exchanged $200 in cash and a plastic bag containing crack cocaine for the two firearms, a .380 caliber handgun and a 9mm handgun, agents detained Gomez.
According to information presented to the court, a court authorized search of Gomez’s residence moments after Gomez was detained allegedly resulted in the discovery of approximately four grams of crack cocaine on a digital scale stored on a window sill inside a bedroom where two unattended children, aged one and two, were located. The bedroom doorway was blocked to prevent the unattended children from leaving the room.
A criminal complaint is merely an allegation 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.
ATF was assisted in the investigation of this matter by Pawtucket Police, Central Falls Police and the Special Investigations Unit of the Adult Correctional Institutions.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Pastor Sentenced for Filing False Tax ReturnsRead the Press Release
BOSTON – A former Worcester tax preparer was sentenced today for filing false tax returns with the IRS.
Nydia Elicier, 56, owner of Cox Elicier Tax, was sentenced by U.S. District Court Judge Timothy Hillman to two years of probation, the first three months of which she is restricted by location monitoring, and 100 hours of community service. Elicier is also prohibited from working as a tax preparer. In April 2015, Elicier was convicted following a four-day jury trial of four counts of aiding or assisting in the preparation of false tax returns.
In 2008, Elicier, who also served as a pastor in a Worcester congregation, inflated client refunds by falsifying deductions in filings with the IRS. Specifically, Elicier generated illegal refunds for clients by claiming deductions typically reserved for educators, false gifts to charity, overinflated medical expenses, and fraudulent unreimbursed employee expenses.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Nixa Woman Sentenced to 20 Years for Sexual Exploitation of Two ChildrenRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Nixa, Mo., woman was sentenced in federal court today for sexually exploiting two children to produce child pornography, which she distributed over the Internet.
Meagan Nell Bowman, 26, of Nixa, was sentenced by U.S. Chief District Judge Greg Kays to 20 years in federal prison without parole. The court also sentenced Bowman to supervised release for the rest of her life following incarceration.
On Dec. 11, 2014, Bowman pleaded guilty to all four counts of a federal indictment that charge her with two counts of sexually exploiting a minor and two counts of receiving and distributing child pornography.
Bowman’s estranged husband discovered photographs in her e-mail account of her sexual abuse of a 3-year-old child and a 2-year-old child. Bowman admitted that she was communicating over the Internet with two unknown men whom she met after posting an advertisement on Craigslist. She then used her cell phone to take photos of herself sexually abusing the 3-year-old child and sent them to the two men. She also admitted that 32 images of child pornography found on her cell phone were created by herself or received from the men she was interacting with over the Internet.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and the Nixa, Mo., Police Department.
Project Safe Childhood
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."
Nigerian Man Sentenced to 12.5 Years in Prison for Operating Sophisticated $13 Million Internet Fraud SchemeRead the Press Release
PHOENIX – Today, Alex Sualim, 44, of Toronto, Canada, was sentenced by U.S. District Judge Susan R. Bolton to 12.5 years (150 months) in prison and ordered to pay over $13 million in restitution. Sualim previously pleaded guilty to conspiracy to commit wire fraud.
“We want to thank our law enforcement partners for their diligence during this multi-year investigation, which resulted in the successful identification, arrest, and prosecution of a foreign national who was using advanced technological tools to prey on American victims,” stated U.S. Attorney John S. Leonardo. “We remain committed to aggressively prosecuting those who would engage in fraud and cyber-crime.”
“The defendant operated a sophisticated, international fraud scheme that spanned four continents and swindled millions of dollars from more than a dozen victims. The lengthy prison sentence reflects the severity of his egregious crimes. IRS-CI will continue to work with its international law enforcement partners to investigate transnational organized crime,” stated IRS-Criminal Investigation (IRS-CI) Special Agent in Charge Ismael Nevarez Jr.
“The defendant wrongly believed being outside the United States gave him the freedom to carry out his criminal activities. The FBI remains committed to pursue these criminals wherever they may hide. This case is a fine example of the partnership the FBI has with our international law enforcement partners through our legal attaches, as well as with domestic law enforcement agencies-all working together to bring justice on behalf of our citizens.” stated FBI Special Agent in Charge Douglas Price.
Between 2009 and 2013, Sualim helped operate a fraud scheme that spanned four continents and duped more than a dozen victims out of more than $13 million. The scheme’s details were unusually sophisticated. First, Sualim would create a website for a Canadian company that purported to manufacture semiconductor chips. Next, Sualim would create passports, email accounts, and toll-free phone numbers for the Canadian company’s supposed employees. And next, Sualim would send millions of solicitation emails—on behalf of the supposed Canadian employees—to Americans whose email addresses he’d purchased from a spam vendor. These emails would explain that the Canadian company needed a product called “silicon germanium” to manufacture its semiconductor chips, that the company wished to enlist an American distributor to obtain the product from China, and that the Canadian company would cover the entire upfront cost of the product. If a victim expressed interest in this seemingly risk-free arrangement, he would be sent a series of additional emails accompanied by professional-looking purchase orders, proposed contracts, and other documents designed to give the transaction a veneer of legitimacy. Finally, on the eve of the first shipment from China, the victim would be told that the Canadian company’s financing had unexpectedly fallen through and that the American distributor needed to supply some of the upfront cost, after all.
If a victim agreed to this new arrangement, he’d be told how to wire his portion to an overseas bank account (typically located in Cyprus, Greece, Hong Kong, or China). Next, Sualim would arrange for a supposed employee of the Chinese manufacturer (who, in reality, was one of Sualim’s co-conspirators) to call or email the victim and explain that his company had just been purchased by a new parent company that required a larger minimum order. These victims were told they needed to wire more money to the overseas bank account in order to complete the first order. Many victims fell for this ruse and sent more money (sometimes several times). Finally, in the last iteration of the scheme, Sualim would arrange for large packages to be shipped to victims, who were told the packages contained the silicon germanium but were cautioned not to open the packages because silicon germanium is a highly-unstable material that can only be handled in a sterile laboratory environment. In fact, the packages were filled with worthless filler material. Nevertheless, some victims fell for the ruse, believed they were receiving the contracted-for product, and kept wiring more money to the designated overseas bank account in the hope of obtaining more shipments. Once victims discovered they were being scammed and demanded answers, their supposed Chinese and Canadian counterparts would simply stop responding to emails and phone calls.
During the operation of the scheme, Sualim—a college-educated electrical engineer who hails from Nigeria—lived in a multi-million dollar waterfront home in Toronto and had a fleet of luxury vehicles, including a Porsche, a Mercedes, and a Tesla that cost more than $100,000. Under his plea agreement, Sualim agreed to liquidate, for the benefit of victims, more than $2 million of Canadian assets.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, with assistance from the Royal Canadian Mounted Police. The prosecution was handled by Dominic Lanza and Peter Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-13-1515-PHX-SRB
RELEASE NUMBER: 2015-070_Sualim
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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.
New York Man Sentenced for Possession of Fraudulent Credit Cards and Aggravated Identity TheftRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that U.S. District Court Judge Robert D. Mariani sentenced Robert Cagle, age 50, Bronx, New York on Friday, September 11, 2015 to 48 months imprisonment. Cagle pled guilty in April 2015 to possession of fraudulent credit cards and aggravated identity theft.
According to U.S. Attorney Peter Smith, a Criminal Information was filed in March 2015 charging Cagle with access device fraud and aggravated identity theft. Allegedly, in April 2014, Pennsylvania State Police conducted a search of a disabled vehicle on Interstate 81. Cagle, a passenger in the vehicle, was found to be in possession of 71 fraudulent credit/debit cards, as well as equipment intended to be used for the manufacture of the counterfeit devices.
In addition to the prison term, Judge Mariani also ordered that Cagle be supervised by a probation officer for three years following his release from prison.
The case was investigated by the U.S. Secret Service and the Pennsylvania State Police and prosecuted by Assistant United States Attorney Michelle L. Olshefski.
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Navajo Man from Yatahey, N.M., Pleads Guilty to Federal Child Sexual Abuse ChargesRead the Press Release
ALBUQUERQUE – David Castillo, 38, an enrolled member of the Navajo Nation who resides in Yatahey, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to a felony information charging him with two counts of aggravated sexual abuse of a child. Under the terms of his plea agreement, Castillo will be sentenced to 20 years in federal prison followed by a term of supervised release to be determined by the court. Castillo also will be required to register as a sex offender.
Castillo was arrested May 17, 2015, on a two-count indictment charging him with aggravated sexual abuse of a child under the age of 12 on a date between May 1, 2006 and Sept. 4, 2006, and again on a date between Dec. 20, 2006 and Jan. 8, 2007, in Indian Country in McKinley County, N.M.
During today’s change of plea hearing, Castillo pled guilty to a two-count felony information charging him with aggravated sexual abuse. In entering his guilty plea, Castillo admitted sexually assaulting the victim in the summer of 2006, when the victim was eight years old. He also admitted sexually assaulting the victim over the Christmas holiday in 2006, when the victim was nine years old. According to the plea agreement, Castillo sexually assaulted the victim five times during the periods of time and that the he committed the crimes on the Navajo Indian Reservation.
Castillo has been in federal custody since his arrest and remains detained pending his sentencing hearing which has yet to be scheduled.
This case was investigated by the Gallup office of the FBI and the New Mexico State Police and is being prosecuted by Assistant U.S. Attorney Sarah Mease.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s 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 http://www.justice.gov/psc/.
Milwaukee Man Sentenced on Federal Gun Charge as an Armed Career CriminalRead the Press Release
Gregory J. Haanstad, Acting U.S. Attorney for the Eastern District of Wisconsin, announced that Justin King Nalls (age: 27) of Milwaukee, Wisconsin, appeared in federal court in Green Bay and was sentenced to 180 months in federal prison for being a felon in possession of a firearm. Based on his criminal record of violent felonies, Nalls qualified as an Armed Career Criminal under federal law which required that he be sentenced to not less than 15 years and up to a lifetime in prison. He was convicted in state court of two armed robberies in 2005 and a burglary in 2009.
Nalls was arrested in October of 2014 for his role in the armed robbery of a Kewaunee County tavern. Further investigation linked Nalls to an additional armed robbery in Sheboygan County and a violent robbery in the City of Milwaukee. Nalls and a female associate placed ads offering prostitution services online, and then robbed at gunpoint those who responded to the advertisements. A search of Nalls’ residence and vehicle yielded a loaded .44 revolver and ammunition for a .357 caliber firearm, both of which are illegal for Nalls or any felon to possess.
In pronouncing sentence, Chief U.S. District Court Judge William C. Griesbach noted the need to protect the community from future criminal acts, the need to send a strong message of deterrence to others, as well as the substantial penalties that the U.S. Congress ascribes to individuals like Nalls with violent felony convictions in their past.
The case was investigated by the Kewaunee County Sheriff’s Department, the City of Kewaunee Police Department, the Kewaunee County District Attorney’s Office, the Wisconsin Department of Justice - Division of Criminal Investigation, and the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). It was prosecuted by Assistant United States Attorney Daniel R. Humble.
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Michigan Man Sentenced for Production of Child Pornographyand CyberstalkingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that James S. Allen, 38, of New Baltimore, MI, who was convicted of production of child pornography and cyberstalking, was sentenced to 262 months in prison and 10 years supervised release by U.S. District Judge Richard J. Arcara.
"This shocking case demonstrates how technology can make our children more vulnerable than ever to predators", said U.S. Attorney Hochul. "Parents, children, and in fact any who use internet-based media, need to know how to protect themselves from those inhabiting this virtual world."
Assistant U.S. Attorneys Aaron J. Mango and Scott S. Allen, who handled the case, stated that between April and August of 2012, the defendant utilized the internet and text messages to stalk, communicate with, and threaten 18 female victims in the Western District of New York, many of them minors, in an effort to obtain pornographic pictures of the minors. Allen contacted the victims and told them that he found naked pictures of them on the internet. The defendant then directed the victims to a specific website to view the pictures. In reality, the website was a front or a phishing site by which the defendant sought to surreptitiously obtain the victim’s private e-mail address and password.
Once the targeted victim input the requested information, the victim’s personal e-mail addresses and passwords went straight to the defendant via the internet. Allen then seized control of the victim’s e-mail accounts, contacted the victims, and threatened that if they did not engage in a Skype video chat with him, he would distribute naked photos of the victims over the internet. Once a victim and the defendant logged onto Skype (the defendant utilized the screen name “shhh.shhh,” Allen further demanded that the victims take their clothes off and engage in sexual conduct, with the additional threat that naked pictures of them would be sent out to all of Western New York if the girl did not comply. As a result of the defendant's repeated and sustained harassment of the victims, many victims suffered substantial emotional distress.
The sentencing is the culmination of an investigation by on the part of Special Agents of the Federal Bureau of Investigation’s Child Exploitation Task force which includes the Buffalo Police Department, the Cheektowaga Police Department, and the Niagara County Sheriff’s Office, and the Kenmore Police Department, under the direction of Chief Peter Breitnauer. Additional assistance was also provided by the FBI Forensic Laboratory in Quantico, Virginia, and the Western New York Regional Computer Forensic Laboratory.
Miami Resident Sentenced in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Kiesha Adderly Mitchell, 36, of Miami, was sentenced by U.S. District Court Judge Darrin P. Gayles to 48 months in prison, to be followed by three years of supervised release, for her participation in a stolen identity tax refund fraud scheme. Mitchell was also ordered to pay restitution in the amount of $219,721.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
The same sentence was imposed upon Mitchell’s co-defendant, Melissa Pearl Davis, 32, on August 20, 2015.
Defendants Mitchell and Davis each previously pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. As part of their pleas, each defendant agreed to pay restitution in the amount of $219,721.
According to court documents, in 2009, the defendants applied to the Internal Revenue Service (“IRS”) for Electronic Filing Identification Numbers (“EFINs”) in the name of corporate or fictitious entities they controlled, including K. Mitch Services, Inc. and Pebbles Tax & Notary Services. The defendants used those EFINs to submit false and fraudulent federal income tax returns to the IRS, using the names and Social Security numbers of other individuals, without the taxpayers’ authority. After the tax returns were received by the IRS, various financial institutions would authorize the defendants to load onto debit cards refund anticipation loans in the names of tax payers whose names and Social Security numbers were used to file the false and fraudulent tax returns. The defendants then withdrew the unlawfully obtained tax proceeds from the debit cards for their personal use and enrichment. The total intended loss from the defendants’ false and fraudulent filings of unauthorized income tax returns was over $400,000.
Mr. Ferrer commended the investigative efforts of the South Florida Identity Theft Tax Fraud Strike Force, with special commendation to the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Maple Heights man sentenced to 15 years in prison for firearms convictionRead the Press Release
A Maple Heights man was sentenced to more than 15 years in prison for illegally possessing firearms and counterfeit currency, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Donald Soranno, Special Agent in Charge of ATF's Columbus Field Division.
Daunte Byrd, 29, was sentenced to 182 months in prison after previously being found guilty of being a felon in possession of a firearm and possession of counterfeit currency.
Byrd was arrested in October 2014 and found to have $5,850 in counterfeit currency and a loaded 9 mm handgun. Byrd was prohibited from having firearms or ammunition because of multiple felony convictions, including several convictions involving violence and a firearm.
Byrd was convicted as part of Operation Samson II, an enhanced enforcement initiative targeting the criminal possession, use and sale of firearms in Greater Cleveland. The summer-long initiative organized around three operational groups. The first used undercover operations to investigate people known to criminally possess, use and sell firearms, as well as people possessing firearms while conducting drug activities. The second group used firearms trace data and ballistics information from the National Ballistics Information Network to pursue leads related to firearms that have been diverted from legal commerce to criminal use. The third group involved ATF Industry Operations conducting inspections at Cleveland-area federal firearms licensees to ensure that dealers are selling firearms in accordance with federal law and regulations.
Byrd told a confidential information in August 2014 that he could obtain and sell firearms, as well as grenades. Byrd also expressed interest in the robbery of a drug stash house. He also discussed selling fraudulent heroin and counterfeit currency, according to court documents.
This case is being prosecuted by Assistant U.S. Attorney Kelly L. Galvin following an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Cleveland Division of Police.
Mansfield Man Charged in Armed Robbery of Grandview BankRead the Press Release
DALLAS — A Mansfield, Texas, man has been charged in a federal criminal complaint with committing the takeover-style, armed robbery last week of the Grandview Bank in Grandview, Texas, announced U.S. Attorney John Parker of the Northern District of Texas.
Michael Dwayne Bailey, 41, made his initial appearance this afternoon before U.S. Magistrate Judge David L. Horan, who ordered that he remain in custody pending a detention hearing set for Friday, September 18, 2015, at 2:00 p.m.
According to the complaint, on Thursday, September 10, 2015, at approximately noon, a man wearing a Texas Longhorns baseball cap, sunglasses, black leather jacket, dark glasses, and subsequently identified as the alleged robber, entered the Grandview Bank located at 105 East Criner Street. He approached a teller, who noticed he was wearing a dark bandana over the lower half of his face, pointed a handgun at the teller, and demanded money.
In fear for her life, the teller froze. The robber climbed on the counter and through the teller window and pointed the handgun directly at the teller’s face, and repeated his demand. Again, fearing for her life, the teller began withdrawing cash from her cash drawer, and the robber reached into the drawer and began grabbing money. The teller handed the money to the robber who took all of it and ran out of the bank. By this time, other bank employees had called 911. An observer saw the robber run to a red, two-door coupe with disabled veteran plates and notified law enforcement.
Acting on the tip, an officer with the Alvarado Police Officer caught up with the robber and activated his red and blue lights and siren, signaling the robber to stop, but the robber did not pull over. Instead, a high-speed pursuit ensued, and officers from several police agencies joined the Alvarado Police Department. They pursued the robber to the city of Mansfield, Texas, and during the pursuit, the robber drove on the wrong side of the road on I-35 and onto the shoulder before ultimately blowing a tire. Speeds even reached 150 miles per hour during the pursuit. The robber and a female passenger were both arrested.
At the time of his arrest, Bailey was wearing a Texas Longhorns ball cap, sunglasses, a black leather jacket and dark pants. The police also recovered the dark-colored bandanna. Knowing the robber was armed, officers searched the car and located a Smith & Wesson 9 millimeter handgun loaded with hollow-point ammunition.
The female passenger was identified as Bailey’s 19-year-old daughter. Officers located the exact amount of cash stolen in the robbery in her purse.
A federal complaint is a written statement of the essential facts of the offenses charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. If convicted of this offense, however, Bailey faces up to 25 years in federal prison and a $250,000 fine. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment.
The FBI, Alvarado Police Department and Mansfield Police Department are investigating. Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay is prosecuting.
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Manhattan U.S. Attorney Announces Charges Against Florida Man for Attempting to Gain Unauthorized Access to the Computer Network of A Global Charitable OrganizationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York and Robert J. Sica, the Special Agent in Charge of the New York Office of the United States Secret Service (“USSS”), announced today the filing of a criminal complaint against TIMOTHY SEDLAK for attempting to gain unauthorized access to the computer network of a global charitable organization based in New York, New York (the “Organization”). SEDLAK was arrested in Ocoee, Florida in the evening of September 11, 2015. He will be presented later today in federal court in Orlando, Florida before United States Magistrate Judge Gregory J. Kelly.
According to the Complaint filed today in Manhattan federal court[1]:
From in or about June 2015, up to and including in or about July 2015, computers associated with two particular internet protocol addresses (the “IP Addresses”) made nearly four hundred thousand attempts to gain unauthorized access to the Organization’s computer network. As a result, numerous Organization employees experienced difficulty accessing their Organization email accounts, and were disrupted in their ability to conduct regular business functions. Both of the IP Addresses were subscribed to SEDLAK at SEDLAK’s residence in Florida (the “Sedlak Residence”)
In particular, between June 22, 2015 and July 8, 2015, from one of the IP Addresses, there were approximately 195,000 attempts to log into approximately twenty email accounts of the Organization. Between July 8, 2015 and July 10, 2015, from the other IP Address, there were an additional approximately 195,000 attempts to log into approximately six email accounts of the Organization. SEDLAK has never been employed by the Organization, and was not authorized to access any email accounts of the Organization.
On or about September 11, 2015, USSS agents executed a search warrant at the Sedlak Residence, from which they seized, among other things, (i) approximately 30 computers connected to the same internal network, which enabled each computer to communicate with the others (the “Sedlak Computers”); (ii) notes pertaining to the Organization, an executive of the Organization (“Individual-1”) and an individual who has been publicly affiliated with the Organization (“Individual-2”), including e-mail addresses, registrant information for certain website domain names, and certain IP address information associated with the Organization, Individual-1 and/or Individual-2; and (iii) lists of e-mail addresses and e-mail servers, many of which included the word “jihad.” The Sedlak Computers contained, among other things, a list of certain Organization employees’ email account usernames, and a “brute force” password-cracking tool. Such a tool is designed to launch a relentless barrage of potential passwords at an email account in an attempt to guess the account’s password.
On or about September 11, 2015, USSS agents interviewed SEDLAK, who claimed to be using the Sedlak Computers to conduct “research” into charitable organizations in the course of his work as a private investigator. In particular, SEDLAK claimed to be trying to determine if such organizations are unintentionally financing jihadist groups by sending, to charitable organizations in the Middle East, funds which are then seized by jihadist groups. When asked about notes pertaining to Individual-1 and Individual-2 found at the Sedlak Residence, SEDLAK claimed that he came across such information in his “research” into the financing of jihadist groups. SEDLAK claimed that he hoped to sell the information he found.
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SEDLAK, 42, of Ocoee, Florida, is charged with one count of attempted unauthorized access to a computer, which carries a maximum sentence of five years. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the U.S. Secret Service. Mr. Bharara also noted that the investigation remains ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Kristy J. Greenberg is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.