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10 September 2015
Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Nancy Wicker (803) 929-3000
United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictment(s) against the following:
Two Men Indicted for Counterfeit Access Device Conspiracy
Chernoh A. Jalloh, age 28, and Abraham B. Freeman, age 27, were charged in a 1-count indictment with conspiracy to possess fifteen or more counterfeit access devices, a violation of Title 18, United States Code, Section 1029(b)(2). The maximum penalty Jalloh and Freeman could receive is five years imprisonment and a maximum fine of $250,000. The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) special agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.Illegal Alien Indicted for Possession and Distribution of Child Pornography
Joel Estrada-Secundino was charged in a 2-count indictment with possession of child pornography, a violation of Title 18, United States Code, Section 2252A(a)(5)(B), and distribution of child pornography, a violation of Title 18, United States Code, Section 2252(a)(2). The maximum penalty Estrada-Secundino could receive is 20 years imprisonment and a maximum fine of $250,000 for the possession charge, and not less than 5 years and not more than 20 years imprisonment and a maximum fine of $250,000 for the distribution charge. The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) special agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution. This case is being brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, 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 identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.Four Greenville Residents Charged with Conspiracy
Traci L. Albertson, a/k/a Traci L. Martin, age 43, Geoffrey R. Albertson, age 32, Keelan R. Fowler, age 34, and Donald B. Hudson, age 32, all of Greenville, South Carolina, were charged in a 1-count indictment with conspiracy to steal mail and possess stolen mail; to make, utter and possess counterfeit securities; and to use unauthorized access devices; in violation of Title 18, United States Code, Section 371. The maximum penalty the defendants could receive is five years imprisonment and a maximum fine of $250,000. The case was investigated by United States Postal Inspection Service agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.Social Security Fraud Indictment
Takenya Gallman Rookard, a/k/a “Takenya Natori Gallman,” age 33, of Greenville, was charged in a 2-count indictment. Takenya Gallman Rookard was charged with Theft of Government Property, a violation of Title 18, United States Code, Section 641 and Social Security Fraud, a violation of Title 42, United States Code, Section 408. The maximum penalty Rookard could receive is 10 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Social Security Office of Inspector General and is assigned to Assistant United States Attorney Jamie Lea Schoen of the Greenville office for prosecution.Social Security Fraud Indictment
William Evans, age 61, of Greenville, was charged in a 2-count indictment. William Evans was charged with Theft of Government Property, a violation of Title 18, United States Code, Section 641 and Social Security Fraud, a violation of Title 42, United States Code, Section 408. The maximum penalty Evans could receive is 10 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Social Security Office of Inspector General and is assigned to Assistant United States Attorney Jamie Lea Schoen of the Greenville office for prosecution.Social Security Fraud Indictment
Donna Marie Clark, age 49, of Greenville, was charged in a 2-count indictment. Donna Marie Clark was charged with Theft of Government Property, a violation of Title 18, United States Code, Section 641 and Identity Theft, a violation of Title 18, United States Code, Section 1028A. The maximum penalty Clark could receive is 12 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Social Security Office of Inspector General and is assigned to Assistant United States Attorney Jamie Lea Schoen of the Greenville office for prosecution.Illegal Alien Charged with Possession of a Firearm and Counterfeit Immigration Documents
Jose Manuel Rangel-Flores, age 45, was charged in a 2-count indictment. Jose Manuel Rangel-Flores was charged with being an Illegal Alien in Possession of a Firearm, a violation of Title 18, United States Code, Section 922(g), and Possessing Counterfeit Immigration Documents, a violation of Title 18, United States Code, Section 1546. The maximum penalty Rangel-Flores could receive is 10 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Homeland Security and is assigned to Assistant United States Attorney Jamie Lea Schoen of the Greenville office for prosecution.The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Essex County, New Jersey, Man Admits Defrauding Veterans AffairRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey man today admitted he defrauded the Department of Veterans Affairs of over $150,000 in disability benefits over a 13-year period, U.S. Attorney Paul J. Fishman announced.
Paul Tillson, 49, of Bloomfield, New Jersey, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with embezzlement of funds from the United States.
According to documents filed in this case and statements made in court:
From July 1991 through January 1992, Tillson served as an administrative clerk in the U.S. Army in Saudi Arabia and Kuwait. From November 2000 through July 2013, Tillson received $150,164 in disability benefits based on his claims of combat related injuries. Through an investigation by the Department of Veterans Affairs, it was determined that Tillson did not serve in a combat function or engage in combat during his tour of duty overseas, which commenced after cease-fire terms had been accepted by Iraq. Tillson also acknowledged that he falsified information related to his alleged combat stressors.
The charge of embezzlement of funds from the United States carries a maximum sentence of up to 10 years in prison and a fine of up to $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 16, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, under the direction of Special Agent in Charge Jeffrey G. Hughes, with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Patrick McMahon Esq., Newark
Entrepreneur Admits Paying Bribes to Allentown Public OfficialRead the Press Release
PHILADELPHIA - Ramzi Haddad, 45, of Bethlehem, PA, pleaded guilty today to an information charging him with one count of conspiracy to commit bribery offenses, announced United States Attorney Zane David Memeger. After accepting Haddad’s guilty plea, U.S. District Judge Juan R. Sanchez scheduling a sentencing hearing for December 18, 2015.
During the guilty plea hearing, Haddad admitted the following:
The defendant was an entrepreneur who had business interests in Allentown, including potential contracts with the City of Allentown and the actual and prospective ownership of properties which were regulated and overseen by governing authorities in Allentown, including Public Official #3, who represented the City through an elective office. Public Official #3 aspired to win election to a statewide elective office. To achieve this goal, Public Official #3 knowingly sought campaign contributions in exchange for official actions that he took, attempted to take, and caused and attempted to cause the City of Allentown to take.
After repeated dealings with Public Official #3, the defendant concluded that he was intentionally acting against the defendant’s economic interests while favoring the economic interests of Public Official #3’s major donors and political allies. Concerned that Public Official #3 would otherwise interfere with and block his projects in Allentown, the defendant further concluded that the only way to receive a “fair shake” from Public Official #3 and public officials subordinate to him was to give Public Official #3 items of value, including food, drinks, and campaign contributions. Consequently, the defendant agreed to make contributions to the various campaigns of Public Official #3 when Public Official #3 or his campaign staff solicited campaign contributions. By December 2014, the defendant had explicitly agreed to give campaign contributions to Public Official #3 in exchange for certain official actions that the defendant expected from the City of Allentown. Over the course of the next few months, the defendant made numerous donations in exchange for certain official actions that he expected from the City of Allentown.
On April 17, 2015, Public Official #3 formally announced his candidacy for another elective office, this time for a position in federal government, during a campaign finance reporting period which would end on June 30, 2015. Before making this announcement, Public Official #3 had told the defendant about his plan to run for the federal office, explained his strategy of maximizing contributions prior to the end of the June 30 reporting period, and asked the defendant to raise money for the federal campaign by bundling his own contribution with the contributions of others. The defendant ultimately agreed to raise $25,000 for Public Official #3’s federal campaign before the June 30 deadline.
On May 18, 2015, Public Official #3 traveled from Allentown to New York City in order to meet with the defendant and discuss the official “help” that Public Official #3 could provide in return for the contributions that the defendant would raise for Public Official #3’s federal campaign. In consideration for the defendant’s fundraising commitment, Public Official #3 agreed to intervene with municipal inspections of one of the defendant’s buildings in Allentown.
On June 29, 2015, the defendant delivered to Public Official #3 approximately $15,000 in checks, all made payable to the federal campaign. Public Official #3 reminded the defendant of his pledge to raise a total of $25,000, advised that he bundle additional checks and “back date” them to a date prior to June 30, 2015, and restated his own ability to take official action which could affect the defendant. The next day, the defendant delivered to Public Official #3’s campaign staff two checks, totaling $6,500, both made payable to Public Official #3’s federal campaign. These checks were intended to replace a previous check which the defendant had delivered to Public Official #3 the day before
As part of his agreement with Public Official #3, the defendant, at Public Official #3’s request, also paid for the food and beverage bills when the two met to discuss the defendant’s business interests. During the course of exchanging campaign contributions for official action by Public Official #3, the defendant and Public Official #3 made numerous interstate phone calls and traveled between states, typically between New York and Pennsylvania. Public Official #3 took numerous steps to destroy or avoid creating any records that would show a linkage between his official actions and campaign contributions from donors such as the defendant. For example, on June 29, 2015, Public Official #3 instructed the defendant to immediately delete from his mobile telephone all text messages constituting evidence of the defendant discussing potential municipal contracts with Public Official #3’s campaign staff.
Haddad faces a maximum possible sentence of five years in prison, a $250,000 fine, three years of supervised release and a $100 special assessment.
This case was investigated by the FBI’s Allentown Resident Agency, the Pennsylvania State Police, and IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter.
Elmira Woman Pleads Guilty to Theft ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Sonja Matos, 28, of Elmira, NY, pleaded guilty to theft by credit union employee, before U.S. District Judge Frank P. Geraci, Jr. The charge carries a maximum penalty of 30 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that the defendant worked for the Corning Credit Union as a Risk Management/Card Services employee. Part of her responsibilities included periodically updating the software of Automated Teller Machines (ATM’s) and loading monies into the ATM’s of the Corning Credit Union. From January 2015 through April 2015, Matos took money for herself on a weekly basis from two ATM’s as she was loading the money into the machines. The defendant stole approximately $40,0000. The deposits of the Corning Credit Union are insured by the National Credit Union Administration.
The plea is the result of an investigation by the Federal Bureau of Investigation.
Sentencing is scheduled for December 19, 2015 at 3:30 p.m. before Judge Geraci.
Easton Resident Charged with Illegal ReentryRead the Press Release
Mirna Chacon-Ordonez, a/k/a “Nancy Estefany Chacon-Ordonez,” a/k/a “Mirna Chacon-Del Cid,” a/k/a “Mirna Chacon,” 33, of Easton, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The Indictment alleges that on or about June 28, 2015, Chacon-Ordonez, an alien, and native and citizen of Guatemala, was found in the United States after having been deported from the United States on or about May 21, 2000, January 26, 2009, and October 2, 2009.
If convicted the defendant faces a maximum possible sentence of 10 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Dumas Police Officer and Five Associates Charged with Drug ConspiracyRead the Press Release
Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, along with David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), and Arkansas State Police Colonel William J. Bryant announced today that Dumas Police Officer James Ivory Edgerson, age 37, of Dumas, has been charged by federal criminal complaint with drug conspiracy. Also charged were Kendrick Lamar Edgerson, age 43, of Little Rock; Gregory Lamont Charles, age 41, of Little Rock; Steven Sherrod Miles, age 42, of Dumas; Rodney Lariel Edgerson, age 36, of Little Rock; and Eli Haynes III, age 40, of Arlington, Texas.
James Edgerson was arrested Wednesday night. The other five defendants listed in the complaint were arrested Thursday morning. All defendants except Haynes appeared before United States Magistrate Judge J. Thomas Ray on Thursday. Haynes, who was arrested in Texas, will be seen in Texas by a United States Magistrate Judge on Friday. The five Arkansas defendants were detained pending bond hearings to determine whether the defendants remain in federal custody until an Indictment is returned. The charge in the complaint must be presented to the federal Grand Jury for Indictment within 30 days.
During the execution of three federal search warrants Thursday morning in connection with the arrests, agents seized approximately 28 ounces of powder cocaine, one ounce of crack cocaine, one pound of marijuana, five firearms including a suppressor, and $222,000 in cash.
According to the complaint, James Ivory Edgerson (Edgerson) has been a sworn patrol officer with the Dumas Police Department for approximately 14 years. Between May and September 2015, Edgerson made several drug deliveries of marijuana, cocaine, and methamphetamine to confidential sources. Law enforcement also obtained a court-authorized wiretap on Edgerson’s phone during the conspiracy period.
When Edgerson was arrested he was in a vehicle with approximately three ounces of powder cocaine and one ounce of crack cocaine. Agents executing a search warrant at his home also found approximately $16,000 cash, several firearms and an unregistered firearm suppressor.
"It is extremely disheartening any time a member of law enforcement commits a crime and breaks the trust that the people of his community have placed in him or her," Thyer said. "The citizens of the Eastern District of Arkansas deserve better, and deserve to know that their law enforcement members will honor their vow to protect and serve. When that vow—and that trust—is broken, my office will make sure those individuals are punished and answer for their crimes."
The complaint alleges that Kendrick Lamar Edgerson (Kendrick) was intercepted over Edgerson’s phone engaging in drug trafficking activity with Edgerson. After Kendrick participated in a delivery of nine ounces of cocaine on August 31, 2015, Kendrick fled from police during a traffic stop. As a result of that traffic stop, state authorities cited Kendrick for possession of cocaine with the purpose to distribute, possession of marijuana, and fleeing from a police officer.
Also according to the complaint, on multiple occasions, Edgerson met with Gregory Lamont Charles (Charles) directly before and after controlled deliveries of cocaine, and Charles is believed to be a cocaine supplier. Agents executed a search warrant at Charles’s house Thursday morning and located approximately 25 ounces of cocaine, $206,000 cash, and a firearm.
Edgerson provided Steven Sherrod Miles (Miles) with drugs to sell, and Miles split the profit from the sale of the drugs with Edgerson. Agents located one pound of marijuana at Miles’s home during the execution of a search warrant. In August 2015, Edgerson traveled to Arlington, Texas, to purchase nine ounces of methamphetamine from Eli Haynes III (Haynes). Upon returning to Arkansas, Edgerson sold this methamphetamine.
The complaint also alleges that Rodney Lariel Edgerson (Rodney), who was intercepted on Edgerson’s phone, met with Edgerson on August 15, 2015, and sold him five to six pounds of marijuana.
Rodney and Kendrick are brothers, and are also cousins of Edgerson.
"Edgerson, a police officer with the Dumas Police Department, was arrested today on drug conspiracy charges," Resch said. "Together with our partners, the United States Attorney’s Office, OCDETF, Arkansas State Police, Tri County Drug Task Force, ArkTrust Public Corruption Task Force, and Jefferson County Sheriff’s Office and with the cooperation of the Dumas Police Department, we will aggressively investigate these charges."
The maximum potential penalty for a violation of Title 21, United States Code, Section 846 (drug conspiracy) is up to life imprisonment, up to life supervised release, and a fine of up to $10,000,000.
The investigation was part of Organized Crime and Drug Enforcement Task Force (OCDETF) Operation Blue Dream. The case was investigated by the Federal Bureau of Investigation, Arkansas State Police, Jefferson County Sheriff’s Office, and Tri County Drug Task Force. It is being prosecuted by Assistant U.S. Attorneys Edward Walker and Julie Peters.
The charges stemmed from an investigation by the FBI’s ArkTrust Public Corruption Task Force. The ArkTrust Public Corruption Task Force is comprised of FBI Agents, and Task Force Officers from the Arkansas State Police Department, Pulaski County Sheriff’s Office, and the Little Rock Police Department. If you think you see public corruption contact the public corruption hotline at (501) 221-8200.
A complaint contains only allegations. The defendants are presumed innocent unless and until proven guilty.
Duke Energy Corporation to Reduce Emissions from Power Plants in North Carolina, Fund Environmental ProjectsRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) today announced a settlement with Duke Energy Corporation to resolve Clean Air Act violations at five coal-fired power plants across North Carolina. The settlement resolves long-standing claims that Duke violated the federal Clean Air Act by unlawfully modifying 13 coal-fired electricity generating units located at the Allen, Buck, Cliffside, Dan River and Riverbend plants, without obtaining air permits and installing and operating the required air pollution control technologies.
Duke recently shut down 11 of the 13 units and under today's settlement those shutdowns also become a permanent and enforceable obligation under the consent decree. At the remaining two units, Duke must continuously operate pollution controls and meet interim emission limits before permanently retiring them. In addition, the settlement requires that Duke retire another unit at the Allen plant, spend a total of $4.4 million on environmental mitigation projects and pay a civil penalty of $975,000. The United States is joined in the settlement by co-plaintiffs Environmental Defense, the North Carolina Sierra Club and Environment North Carolina.
EPA estimates that the settlement will reduce emissions by approximately 2,300 tons per year from the three Allen units, as compared to recent emission levels. With these additional retirements, total emissions from all 13 allegedly modified units – which were in excess of 51,000 tons in 2000 when the suit was filed – will be zero.
“The settlement announced today marks another milestone in our ongoing efforts to enforce the Clean Air Act and reduce air pollution from coal-fired power plants,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This settlement is a just and fair resolution to this long-running enforcement action in which we alleged that Duke modified these plants in ways that significantly increased their annual emissions. It is good news for the environment and public health in North Carolina.”
“This settlement brings five more power plants into compliance under EPA’s national initiative to cut pollution from the country’s largest sources,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “After many years, we’ve secured a strong resolution, one that will help reduce asthma attacks and other serious illnesses for the people of North Carolina.”
The United States initially sued Duke in 2000 and trial was set to begin in October 2015 following years of pre-trial litigation, including a landmark 2007 Supreme Court decision agreeing with EPA’s interpretation of Clean Air Act regulations covering modifications that increase the annual amount of pollution from a plant. Under the settlement, Duke must continuously operate existing equipment to control sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions at two electricity-generating units at the Allen facility in Belmont, North Carolina, and meet enforceable emission limits, prior to permanently retiring both units in 2024. In addition, to help mitigate the harm from the alleged violations, the settlement also requires Duke to retire an additional unit at the Allen plant by 2024.
The settlement also requires Duke to spend at least $4.4 million to fund several environmental mitigation projects. These projects include restoring native wildlife and plants on National Park Service and Forest Service lands in North Carolina, a program to help North Carolina residents replace higher polluting wood stoves and fireplaces with cleaner burning alternatives and a program to increase the use of clean energy and energy efficiency measures in economically distressed communities. Other projects may include efforts towards increasing truck stop electrification and electric vehicle charging stations in North Carolina.
SO2 and NOx, two predominant pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air to particulate matter that can cause severe respiratory and cardiovascular impacts and premature death.
This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes coal-fired power plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements. The total combined SO2 and NOx emission reductions secured from all these settlements will exceed two million tons each year once all the required pollution controls have been installed and implemented.
The settlement was lodged with the U.S. District Court for the Middle District of North Carolina and is subject to a 30-day public comment period and final court approval.
For more information on the settlement and to read the proposed settlement, visit http://www.justice.gov/enrd/consent-decrees.
Duke Energy Corporation to Reduce Emissions from Power Plants in North Carolina, Fund Environmental ProjectsRead the Press Release
WASHINGTON – The Department of Justice and the Environmental Protection Agency (EPA) today announced a settlement with Duke Energy Corporation to resolve Clean Air Act violations at five coal-fired power plants across North Carolina. The settlement resolves long-standing claims that Duke violated the federal Clean Air Act by unlawfully modifying 13 coal-fired electricity generating units located at the Allen, Buck, Cliffside, Dan River and Riverbend plants, without obtaining air permits and installing and operating the required air pollution control technologies.
Duke recently shut down 11 of the 13 units and under today's settlement those shutdowns also become a permanent and enforceable obligation under the consent decree. At the remaining two units, Duke must continuously operate pollution controls and meet interim emission limits before permanently retiring them. In addition, the settlement requires that Duke retire another unit at the Allen plant, spend a total of $4.4 million on environmental mitigation projects and pay a civil penalty of $975,000. The United States is joined in the settlement by co-plaintiffs Environmental Defense, the North Carolina Sierra Club and Environment North Carolina.
EPA estimates that the settlement will reduce emissions by approximately 2,300 tons per year from the three Allen units, as compared to recent emission levels. With these additional retirements, total emissions from all 13 allegedly modified units – which were in excess of 51,000 tons in 2000 when the suit was filed – will be zero.
“The settlement announced today marks another milestone in our ongoing efforts to enforce the Clean Air Act and reduce air pollution from coal-fired power plants,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This settlement is a just and fair resolution to this long-running enforcement action in which we alleged that Duke modified these plants in ways that significantly increased their annual emissions. It is good news for the environment and public health in North Carolina.”
“This settlement brings five more power plants into compliance under EPA’s national initiative to cut pollution from the country’s largest sources,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “After many years, we’ve secured a strong resolution, one that will help reduce asthma attacks and other serious illnesses for the people of North Carolina.”
The United States initially sued Duke in 2000 and trial was set to begin in October 2015 following years of pre-trial litigation, including a landmark 2007 Supreme Court decision agreeing with EPA’s interpretation of Clean Air Act regulations covering modifications that increase the annual amount of pollution from a plant. Under the settlement, Duke must continuously operate existing equipment to control sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions at two electricity-generating units at the Allen facility in Belmont, North Carolina, and meet enforceable emission limits, prior to permanently retiring both units in 2024. In addition, to help mitigate the harm from the alleged violations, the settlement also requires Duke to retire an additional unit at the Allen plant by 2024.
The settlement also requires Duke to spend at least $4.4 million to fund several environmental mitigation projects. These projects include restoring native wildlife and plants on National Park Service and Forest Service lands in North Carolina, a program to help North Carolina residents replace higher polluting wood stoves and fireplaces with cleaner burning alternatives and a program to increase the use of clean energy and energy efficiency measures in economically distressed communities. Other projects may include efforts towards increasing truck stop electrification and electric vehicle charging stations in North Carolina.
SO2 and NOx, two predominant pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air to particulate matter that can cause severe respiratory and cardiovascular impacts and premature death.
This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes coal-fired power plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements. The total combined SO2 and NOx emission reductions secured from all these settlements will exceed two million tons each year once all the required pollution controls have been installed and implemented.
The settlement was lodged with the U.S. District Court for the Middle District of North Carolina and is subject to a 30-day public comment period and final court approval.
For more information on the settlement and to read the proposed settlement, visit http://www2.epa.gov/enforcement/duke-energy-corporation-clean-air-act-caa-settlement.
Deputy Director of Hudson County Correctional Facility Sentenced to 21 Months in Prison for Illegal WiretappingRead the Press Release
NEWARK, N.J. – The deputy director of the Hudson County Correctional Facility was sentenced today to 21 months in prison for illegally wiretapping his co-workers and another individual, U.S. Attorney Paul J. Fishman announced.
Kirk Eady, 47, of East Brunswick, New Jersey, was previously found guilty of one count of intentionally intercepting the wire, oral or electronic communications of others following a four-day trial before Judge Jose L. Linares, who imposed the sentence today in Newark federal court.
According to the documents filed in this case and the evidence at trial:
From March 8, 2012, to July 8, 2012, while working as the deputy director of the Hudson County Correctional Facility, Eady used the services of a website on more than 10 occasions to intercept the telephone calls of other Hudson County Correctional Facility employees and another individual who were critical of his work performance. Eady was able to conceal the telephone number from which the call originated. He then called two of the employees at the same time and made it appear that one or both of the other individuals initiated the call. Eady also recorded these telephone conversations and never told the other employees he was recording these private communications. These individuals did not consent to their private conversations being monitored and recorded by Eady.
In addition to the prison term, Judge Linares sentenced Eady to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office Special Prosecution Division.
Defense counsel: Peter Willis Esq., Jersey City, New Jersey
Columbus Man Convicted on Drug & Firearm ChargesRead the Press Release
Arsenio Brundidge, age 28, of Columbus, Georgia was convicted following a jury trial Sept. 10, 2015 on one count of cocaine possession and one count of possession of a firearm by a convicted felon. Chief U.S. District Court Judge Clay D. Land was the presiding judge.
The evidence showed that on November 3, 2014, Deputy Sheriff Clinton Powell of the Muscogee County Sheriff’s Office attempted to serve Brundidge with outstanding arrest warrants. Brundidge attempted to flee, but was captured by Powell and other deputies after a brief chase. During his flight, Brundidge discarded a weapon, which was recovered and found to be a fully loaded Jiminez Arms 9 mm handgun. The weapon had been reported as stolen approximately one month earlier. At the time of his arrest, Brundidge was also found to be in possession of a small amount of both marijuana and cocaine.
Brundidge has an extensive criminal record, including seven prior felony convictions. Sentencing has been set for December 15, 2015.
The case was investigated by the Muscogee County Sheriff’s Office, the Columbus Police Department, and Special Agents Will Panoke and Brian Queener of the Bureau of Alcohol, Tobacco, Firearms & Explosives. Assistant United States Attorney Mel Hyde is prosecuting the case on behalf of the Government.
Columbia Man Sentenced for Bank Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Columbia, Mo., man has been sentenced in federal court for his role in a bank fraud conspiracy that used stolen mail and fake identifications to cash nearly $160,000 in fraudulent checks in Webster County, Mo., and elsewhere.
Michael Anthony Spears, 37, of Columbia, was sentenced on Wednesday, Sept. 9, 2015, by U.S. District Judge M. Douglas Harpool to seven years in federal prison without parole. The court also ordered Spears to pay restitution of $114,127, which represents the ill-gottenproceeds the co-conspirators bilked from 14 separate banks.
On Feb. 3, 2015, Spears pleaded guilty to participating in a conspiracy to defraud more than a dozen banks from July 31, 2013, to Feb. 28, 2014, by passing counterfeited and forged checks with fake identification documents. At least 12 co-conspirators stole mail, printed counterfeit checks, passed counterfeit checks with fake identification and opened at least five fictitious businesses for the sole purpose of concealing the deposit and subsequent withdrawal of counterfeit checks.
Co-defendant Phillip Daren Shockey, 49, of Crawford, has also pleaded guilty to his role as the leader of the conspiracy. Shockey made false identification documents and produced counterfeit checks using account information from mail stolen by others in the conspiracy. Shockey used motel rooms to set up a work station consisting of computers, printers, scanners, a camera, a blue hanging sheet for ID photos, and other items to produce false identification cards and counterfeit checks.
Spears met Shockey in jail and Shockey later contacted him after they both were released from jail.
Spears was a major pawn in the bank fraud scheme. He established fake Missouri Limited Liability Companies (LLCs) in his name to facilitate the passage of fraudulent checks for himself and Shockey. He stole mail in order to provide Shockey with personal identifying information to produce fake identification documents for him and others. He opened bank accounts using fake identification documents and also used fake identification documents of banks customers and others in or order to pass and attempt to pass fraudulent checks drawn upon the banks. Spears passed and attempted to pass 24 checks that he received from Shockey for a loss of at least $159,842.
Other members of the conspiracy sold cattle and then used the financial information from the checks they received from the cattle sale in order to make additional counterfeit checks. Still other members of the conspiracy, including Spears, passed counterfeit checks.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the U.S. Secret Service Financial Crimes Task Force, the U.S. Postal Service – Criminal Investigations, the Springfield, Mo., Police Department, the Missouri State Highway Patrol, the Tulsa, Okla., Police Department, the Jasper County, Mo., Sheriff’s Office, the Webster County, Mo., Sheriff’s Office, the Greene County, Mo., Sheriff’s Office, the Columbia, Mo., Police Department, the Blue Springs, Mo., Police Department, the Monett, Mo., Police Department, the Pierce City, Mo., Police Department, the St. Clair County, Mo., Sheriff’s Department, the Rolla, Mo., Police Department and the Catoosa, Okla., Police Department.
Claymont Man Pleads Guilty to Trafficking in Child Pornography from In-Home DaycareRead the Press Release
WILMINGTON, Del. – Carl McBride, age 50, of Claymont, Delaware, pleaded guilty earlier today to Receipt of Child Pornography, in violation of federal law. Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware.
McBride faces a mandatory minimum sentence of at least five years, and up to twenty years, in prison, a fine of up to $250,000, and a term of supervised release of at least five years to life following his prison sentence. He also will be required to register as a sex offender in any jurisdiction in which he resides, works or attends school. United States District Judge Gregory M. Sleet has scheduled McBride’s sentencing hearing for December 29, 2015 at 10:00 a.m.
According to statements made and documents filed in court, a U.S. Department of Homeland Security special agent identified McBride while conducting an online undercover investigation into hidden, or “dark web,” child pornography trafficking networks. That investigation revealed that McBride had utilized a hidden peer-to-peer computer network to distribute child pornography to over 150 individuals from his Claymont home. After identifying McBride through computer network records, investigators discovered that another person residing at his Claymont residence was then providing daycare services out of the home under the name “Little Tykes Day Care.”
On November 5, 2013, federal law enforcement agents executed a search warrant at McBride’s Claymont home, and seized multiple computers and digital devices. McBride was arrested that day after a forensic examination of a laptop computer found near a diaper changing table revealed over 28,000 files depicting photographs and movies of child pornography. Most of these images depicted the violent sexual abuse of prepubescent girls.
During a post-arrest interview, McBride admitted to trafficking in child pornography, but claimed he was doing so in an effort to identify and help law enforcement agencies apprehend other child predators. McBride admitted, however, that he had not contacted any law enforcement agencies about his ‘efforts’ to catch online predators, adding that he was “almost done collecting the evidence” at the time of the search and his arrest. McBride has been held in federal custody since then. The Office of Child Care Licensing suspended the daycare operator’s license the same day.
This case was investigated by the United States Department of Homeland Security, Homeland Security Investigation. It is being prosecuted by Assistant United States Attorney Edward J. McAndrew.
Buffalo Man Pleads Guilty to Fentanyl DistributionRead 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 Eddie Lee Watson, 64, of Buffalo, NY, pleaded guilty to distribution of fentanyl, before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that on four dates in April, May, and June 2014, the defendant sold fentanyl patches, and on two of those occasions he also sold oxymorphone (e.g. Opana) pills, to an individual in Buffalo.
The plea is the result of an investigation conducted by the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division.
Sentencing is scheduled for December 23, 2015, at 11:00 a.m. before Judge Skretny.
Bucks County Lawyer Sentenced for Tax Evasion and Fraud SchemeRead the Press Release
PHILADELPHIA - Randolph Scott, 72, of Doylestown, PA, an attorney whose practice included estate and probate matters, was sentenced today to 48 months in prison for defrauding a client’s estate of more than $2.3 million. Scott maintained a law office – Randolph Scott Associates – in Warrington, PA. He pleaded guilty on March 25, 2015 to one count each of mail fraud, tax evasion and attempting to interfere with administration of internal revenue laws, and three counts of failure to file income tax returns.
Between December 2005 and October 2011, while representing the estate of John C. Bready, Scott diverted approximately $2,317,917.67 of estate funds to his law office accounts. Because the estate was valued at more than $6 million at the time of Bready’s death in 2005, federal law required that a federal estate tax return be filed which would have resulted in approximately $520,351 being paid to the Internal Revenue Service. Scott purposefully failed to file the required form in order to maintain sufficient money in the estate to pay its beneficiaries and to avoid detection of the theft.
After the estate’s executor died in 2009, Scott failed to disclose the executor’s death so that Scott could continue to receive money intended for the estate at his law firm. Scott would then forge the deceased executor’s signature and deposit funds intended for the estate into accounts under his control. Scott had the successor executor sign a document renouncing the position of successor executor so that Scott could continue to forge the signature of the deceased executor and divert money belonging to the estate.
In addition to the prison term, U.S. District Court Judge J. Curtis Joyner ordered restitution to the estate in the amount of $2,317,917.67, three years of supervised release, and a $375 special assessment.
The case was investigated by the IRS Criminal Investigations and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Judy G. Smith.
Boston Sex Offender Sentenced for Failing to RegisterRead the Press Release
BOSTON – James Edward Mercer, 49, was sentenced yesterday by U.S. District Court Judge Denise J. Casper to 21 months in prison and five years of supervised release. In May 2015, Mercer pleaded guilty to failing to register as a convicted sex offender.
Mercer was previously convicted in Massachusetts in 1992 and again in 1996 of indecent assault and battery on a person above the age of 14. As a result of these convictions, Mercer was classified as a sex offender and is required to register as such in each state in which he resides through December 2018. Mercer first registered as a sex offender in 2005 in Massachusetts. Thereafter he moved to Florida where he failed to register and was convicted, serving a 12 month probation sentence. Following that, Mercer moved to California where he registered; however, in December 2014, Mercer returned to Massachusetts and failed to register as a sex offender here.
United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal for the District of Massachusetts, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Seth B. Orkand of Ortiz’s Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Birmingham Store Owner Sentenced to Three Years in Prison for Food Stamp and Tax FraudRead the Press Release
BIRMINGHAM -- A federal judge today sentenced the owner of a Southside Birmingham grocery store to more than three years in prison for food stamp and tax fraud totaling more than $1.6 million, announced U.S. Attorney Joyce White Vance, U.S. Department of Agriculture Office of Inspector General, Investigations, Special Agent in Charge Karen Citizen-Wilcox, and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge R. David Proctor sentenced SUFYAN HAZEM SALEH, 33, of Birmingham, to 36 months in prison for subscribing to false tax returns for 2009 and 2010, and to 37 months in prison for food stamp fraud. The sentences are to run concurrently. Saleh pleaded guilty to the charges in June.
As part of Saleh's sentence, and in accordance with his plea agreement with the government, the judge ordered Saleh to pay restitution of $498,470 to the IRS and $1,125,772 to the USDA, which administers the food stamp program under the name Supplemental Nutrition Assistance Program, or SNAP. Salah also must forfeit $375,220 to the government as proceeds of illegal activity. He must report to prison Dec. 9.
Saleh owns the now closed City Supermarket at 1531 13th Place South, a convenience grocery story that was authorized by USDA to accept food stamp benefits, according to his indictment and plea agreement
Individuals in the SNAP program receive benefits from the USDA on an electronic benefit transfer card, which functions like a debit card. Saleh pleaded guilty to redeeming EBT SNAP benefits for cash, which is prohibited, between January 2010 and December 2011. Of the approximate $1.9 million City Supermarket redeemed in EBT SNAP benefits during that period, the USDA estimated that $1,125,772 was food stamp fraud, according to Saleh's plea.
Saleh also pleaded guilty to tax fraud for under reporting to the IRS his 2009 and 2010 income received from redeeming SNAP benefits. Saleh did not report about $1.6 million in income from food stamp redemption for the two tax years, resulting in a tax loss of about $498,470, according to his plea.
The USDA-OIG and IRS-CI investigated the federal case, which Assistant U.S. Attorney Pat Meadows prosecuted.
Bergen County, New Jersey, Man Pleads Guilty to Multimillion-Dollar Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man admitted today that he conspired to defraud 15 victims of more than $3 million, U.S. Attorney Paul J. Fishman announced.
Paul Mancuso, 49, of Glen Rock, New Jersey, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to one count of conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
On Aug. 21, 2014, a federal grand jury in Newark indicted Mancuso on one count of conspiracy to commit wire fraud and five counts of wire fraud. It also charged Pasquale Stiso, 53, of West Harrison, New York, with one count of conspiracy to commit wire fraud and one count of wire fraud.
Since 2009, Mancuso posed as a real estate investor, broker and developer, as well as a “hard money” lender for other investments. Stiso, a disbarred New York attorney, held himself out as an individual working with Mancuso on various investment projects.
During the plea hearing, Mancuso admitted that he and Stiso fraudulently obtained financing for projects that did not exist or in which they had no actual involvement. Some of the purported projects touted by Mancuso, Stiso, and other conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan.
Victims lost all of their investments in Mancuso’s schemes. Instead of funding the purported projects, Mancuso and Stiso used the money for personal expenses and to finance their involvement in illegal gambling.
The charge of wire fraud conspiracy to which Mancuso pleaded guilty carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater. The indictment also includes a notice of forfeiture of $3,425,750, representing the fraudulent payments Mancuso and Stiso received from the scheme. Sentencing is scheduled for Jan. 12, 2016.
The charges against Stiso are merely accusations, and he is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and criminal investigators from the U.S. Attorney’s Office for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Anthony Mahajan of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Stacy Ann Biancamano Esq., Newark
Benjamin Wey, Founder and President of New York Global Group, Arrested and Charged in Manhattan Federal Court for Securities Fraud Arising Out of Fraudulent Reverse Merger Scheme Involving Chinese CompaniesRead the Press Release
UPDATE
The charges against the defendant in this case, Benjamin Wey, were dismissed on August 8, 2017. Click the link below for further detail.
Benjamin Wey dismissal motion
Charges Also Unsealed Against a Geneva-Based Banker, Who Remains at Large
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment against BENJAMIN WEY and his Geneva-based banker, SEREF DOGAN ERBEK, charging them with conspiracy, securities fraud, wire fraud, and other charges stemming from WEY’s scheme to obtain and conceal his beneficial ownership interest in publicly trading companies through so-called “reverse merger” transactions between Chinese companies and U.S. shell companies, and then to reap tens of millions of dollars of illegal profit by manipulating the companies’ stock prices. WEY was arrested this morning at his home in Manhattan and is expected to be presented today in federal court in Manhattan before United States Magistrate Judge Frank Maas. ERBEK remains at large.
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) announced civil charges against WEY and ERBEK, among others.
U.S. Attorney Preet Bharara said: “Ben Wey fashioned himself a master of industry, but as alleged, he was merely a master of manipulation. The indictment charges that Wey used reverse merger transactions between Chinese companies and U.S. shell companies to illegally conceal his ownership interest and then, with the help of his alleged co-conspirator, manipulated the market so that he could sell his interest at artificially inflated prices. As alleged, in making tens of millions in illicit profit, Wey refused to let the securities laws or the rules of a fair marketplace get in the way of his dishonest scheme.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “The illegal manipulation of stock prices causes significant losses for innocent investors and creates sizeable profits for fraudsters. Wey and Erbek allegedly falsified the true sales volume, demand, and price of stocks in the over-the-counter marketplace through a series of reverse merger transactions involving shell companies. They are believed to have profited in the tens of millions, while victim shareholders were left holding the bill. The FBI and our partners will continue to investigate and prosecute those who cheat the system in this way.”
According to the eight-count Indictment unsealed today in Manhattan federal court[1]:
Among other fraudulent and illicit conduct, WEY engineered reverse mergers between Chinese operating companies and publicly traded U.S. shell companies designed to give WEY significant undisclosed ownership in the resulting publicly trading entities, in violation of U.S. securities laws. Specifically, WEY caused entities controlled by a sibling and other nominees to obtain large portions of the shares of certain U.S. shell companies trading over the counter. WEY then identified various Chinese operating companies that wanted to raise capital in the U.S. markets. WEY, through his company, New York Global Group (“NYGG”), facilitated the Chinese companies’ reverse mergers with the U.S. shell companies in which WEY, through his nominees, secretly held significant ownership interest. Not only did WEY defraud the investing public by failing to disclose, as required under the securities laws, his beneficial ownership of more than five percent of the stock of the new companies, but he then manipulated the market price and demand for the shares in these companies, resulting in tens of millions of dollars of undisclosed and illicit profit.
Reverse Merger Scheme That Illegally Hid Ownership Interest
WEY caused certain entities (the “Nominee Entities”) that were owned or otherwise associated with a sibling of WEY’s (“Wey’s Sibling”), certain other members of WEY’s extended family, and employees of an NYGG entity located in Beijing, China, NYGG-Asia (collectively, the “Nominee Owners” and, together with the Nominee Entities, the “Nominees”), to obtain a substantial portion of the shares of certain U.S. shell companies (the “Shell Companies”) that were trading on the National Association of Securities Dealers’ Over-the-Counter Bulletin Board, a regulated quotation service that displays real-time quotes, last-sale prices, and volume information for certain over-the-counter securities.
Although records associated with the Nominee Entities, all of which were incorporated offshore, identify certain of the Nominee Owners as the sole shareholders, directors, and/or signatories of the Nominee Entities, in fact, and unbeknownst to the investing public, WEY actually controlled the Nominee Entities. In executing the scheme to defraud, WEY routinely directed ERBEK, who knew of WEY’s control over the Nominees and knew of the securities laws’ requirements for disclosing beneficial ownership interest of over five percent, to conduct stock trading for accounts held in the names of the Nominees.
In addition, WEY, through NYGG-Asia, identified various Chinese operating companies (the “Operating Companies”) that wanted to raise capital in the U.S. markets, and offered NYGG’s services in facilitating reverse merger transactions for the purpose of gaining access to those capital markets. WEY intentionally caused the Operating Companies to merge with the particular Shell Companies in which WEY, through the Nominees, held significant, illegally undisclosed ownership stakes. The companies that resulted from these reverse merger transactions were SmartHeat, Inc.; Deer Consumer Products, Inc.; and CleanTech Innovations, Inc. (the “Issuers”).
As a further part of the conspiracy and scheme to defraud, WEY caused the Nominees to continue to retain undisclosed control of more than five percent of the shares of each of the Issuers – shares originally of the Shell Companies that, by virtue of the reverse merger transactions, became shares of the Issuers. Although WEY was required by federal securities laws to report his beneficial ownership in the Issuers, he deliberately did not. In fact, to further obscure from the investing public the extent to which he owned and exercised control over Issuers’ stock, and with ERBEK’s knowledge and assistance, WEY purposefully caused the Nominees’ holdings to be structured in such a way as to ensure that no single one of the Nominees held a greater than five percent beneficial ownership interest in any of the Issuers.
Manipulation of the Market for Shares of the Reverse Merger Companies
At the time that the Issuers emerged from reverse merger transactions, their common stock traded only in over-the-counter markets and in low volumes. The Issuers’ stock could not be sold in significant quantities in the open market until a liquid market developed and the shares traded on an exchange. To create liquidity so that WEY could profit from his scheme, WEY caused the Issuers’ management to apply for listings on the Nasdaq, which would increase market interest and liquidity in the Issuers’ securities. To satisfy Nasdaq’s requirement that an issuer have at least 300 “round-lot” shareholders – defined as shareholders owning at least 100 shares of common stock each – WEY deceptively caused shares of some of the Issuers to be transferred from certain of the Nominees to dozens of WEY’s friends, employees, and business associates, among others, as gifts or unsolicited bonuses in increments of 100 or more, thereby artificially inflating the number of shareholders in each of the Issuers.
Both before and after an Issuer became listed on Nasdaq, WEY and ERBEK caused the share price of its stock to be manipulated in various ways. For example, on multiple occasions, WEY caused two retail brokers located in Manhattan to solicit their customers to buy shares of common stock of the Issuers while those brokers simultaneously actively discouraged the sale of these stocks by their customers, so as to artificially maintain the stock price of each Issuer. Similarly, WEY explicitly instructed ERBEK to maintain the share prices of at least two Issuers’ stock held in certain of the Nominees’ accounts. For example, on or about February 7, 2011, WEY sent an email to ERBEK stating, “Cleantech just traded at $4.50 per share. Please make sure the trader buys the stock at $5 per share, stay at $5 per share bid price, not less. Please make sure this happens right away.” ERBEK agreed to do so, but cautioned WEY, “Obviously, we need to be careful to give such orders/make such comments. I may explain it over the phone; please call me if you have time.” WEY also orchestrated match trades in the securities of the Issuers, for the purpose of manipulating the prices of those stocks.
At the same time that WEY and ERBEK were causing the share prices of the Issuers’ stock to be manipulated, WEY caused shares held in the name of Wey’s Sibling and other Nominees at brokerage accounts in the United States and overseas to be sold, thereby generating millions of dollars in proceeds at artificially inflated prices. WEY caused those proceeds to be transferred from accounts in the United States to accounts overseas, only to then send millions of dollars back to the United States for his own benefit. For example, more than $20 million in cash was transferred from a Hong Kong account in the name of Wey’s Sibling to bank accounts in the United States that WEY and/or WEY’s wife controlled.
* * *
WEY, 43, is charged with one count of conspiracy to commit securities fraud and wire fraud; two counts of securities fraud; one count of wire fraud; two counts of failure to disclose ownership in excess of five percent; and two counts of money laundering. Count One carries a maximum sentence of five years in prison. Counts Two and Four through Eight each carry a maximum sentence of 20 years in prison. Count Three carries a maximum sentence of 25 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense. ERBEK, 53, is charged with one count of conspiracy to commit securities fraud and wire fraud, which carries a maximum sentence of five years in prison; two counts of securities fraud, one of which carries a maximum sentence of 20 years in prison, the other of which carries a sentence of 25 years in prison; and one count of wire fraud, which carries a maximum sentence 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.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the SEC for its assistance. He added that the investigation is continuing.
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’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Sarah Eddy McCallum, Andrew C. Adams, and Michael Ferrara are in charge of the prosecution.
The allegations 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.
Auto Parts Distributor Pleads Guilty to Manufacturing and Selling Pirated Mercedes-Benz SoftwareRead the Press Release
WASHINGTON – An aftermarket auto parts distributor in Harahan, Louisiana, pleaded guilty today to manufacturing and selling over 800 copyright-infringing copies of Mercedes-Benz diagnostic software valued at over $17 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana and Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Division made the announcement.
The Brinson Company (TBC), and its owner, Rainer Wittich, 66, of River Ridge, Louisiana, pleaded guilty before U.S. District Court Judge Nannette Jolivette Brown of the Eastern District of Louisiana to an information charging them, respectively, with conspiracy to commit criminal copyright infringement and to violate the Digital Millennium Copyright Act, and criminal copyright infringement. Sentencing is scheduled for Jan. 16, 2015. As part of its plea agreement, TBC agreed to assist Mercedes-Benz in compiling a list of all customers to whom it sold, distributed, donated or otherwise provided the pirated software.
Wittich owned TBC, which sold replacement parts and diagnostic equipment for Mercedes-Benz vehicles. According to TBC’s plea agreement, beginning in about 2001, in conjunction with two other companies, TBC began developing, manufacturing and selling non-authentic versions of the Mercedes-Benz Star Diagnostic System (SDS), a portable tablet-type computer that contains proprietary software created by Mercedes-Benz to diagnose and repair its automobiles and that requires a code or “license key” to access. TBC admitted that, without authorization, it obtained Mercedes-Benz SDS software and updates, modified and duplicated the software, and installed the software on laptop computers (which served as the SDS units).
TBC further admitted that, not later than June 2010, it began purchasing software for the non-authentic SDS units as well as updates and “patches” for the software from an individual in the United Kingdom. TBC admitted that, after Mercedes-Benz notified the United Kingdom-based individual that his conduct was in violation of the law, representatives of TBC and the co-conspirator companies discussed plans to have him “go underground and off the radar” and continue to provide assistance and support in the production of non-authentic SDS units.
A genuine SDS unit sold for up to $22,000, and purchasers of the SDS paid Mercedes-Benz several thousands of dollars per year to receive regular software updates. According to TBC’s plea agreement, a non-authentic SDS unit sold for up to $11,000. TBC admitted that, in total, it sold approximately 725 non-authentic SDS devices, and that one of its co-conspirators sold at least 95 devices.
“Today’s guilty pleas reaffirm our commitment to protecting consumer rights,” stated U.S. Attorney Polite. “Both businesses and individuals will be held accountable for their fraudulent conduct.”
The case was investigated by the Cyber Task Force of the FBI’s New Orleans Division. The case is being prosecuted by Senior Counsel Evan Williams of the Criminal Division’s Computer Crimes and Intellectual Property Section and Assistant U.S. Attorneys Jordan Ginsberg and Myles Ranier of the Eastern District of Louisiana.
The enforcement action announced today is related to the many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). The IP Task Force supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state, and local law enforcement partners, and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
Auto Parts Distributor Pleads Guilty to Manufacturing and Selling Pirated Mercedes-Benz SoftwareRead the Press Release
Pirated Software Valued at Over $17 Million
An aftermarket auto parts distributor in Harahan, Louisiana, pleaded guilty today to manufacturing and selling over 800 copyright-infringing copies of Mercedes-Benz diagnostic software valued at over $17 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana and Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Division made the announcement.
The Brinson Company (TBC), and its owner, Rainer Wittich, 66, of River Ridge, Louisiana, pleaded guilty before U.S. District Court Judge Nannette Jolivette Brown of the Eastern District of Louisiana to an information charging them, respectively, with conspiracy to commit criminal copyright infringement and to violate the Digital Millennium Copyright Act, and criminal copyright infringement. Sentencing is scheduled for Jan. 16, 2016. As part of its plea agreement, TBC agreed to assist Mercedes-Benz in compiling a list of all customers to whom it sold, distributed, donated or otherwise provided the pirated software.
Wittich owned TBC, which sold replacement parts and diagnostic equipment for Mercedes-Benz vehicles. According to TBC’s plea agreement, beginning in about 2001, in conjunction with two other companies, TBC began developing, manufacturing and selling non-authentic versions of the Mercedes-Benz Star Diagnostic System (SDS), a portable tablet-type computer that contains proprietary software created by Mercedes-Benz to diagnose and repair its automobiles and that requires a code or “license key” to access. TBC admitted that, without authorization, it obtained Mercedes-Benz SDS software and updates, modified and duplicated the software, and installed the software on laptop computers (which served as the SDS units).
TBC further admitted that, not later than June 2010, it began purchasing software for the non-authentic SDS units as well as updates and “patches” for the software from an individual in the United Kingdom. TBC admitted that, after Mercedes-Benz notified the United Kingdom-based individual that his conduct was in violation of the law, representatives of TBC and the co-conspirator companies discussed plans to have him “go underground and off the radar” and continue to provide assistance and support in the production of non-authentic SDS units.
A genuine SDS unit sold for up to $22,000, and purchasers of the SDS paid Mercedes-Benz several thousands of dollars per year to receive regular software updates. According to TBC’s plea agreement, a non-authentic SDS unit sold for up to $11,000. TBC admitted that, in total, it sold approximately 725 non-authentic SDS devices, and that one of its co-conspirators sold at least 95 devices.
The case was investigated by the Cyber Task Force of the FBI’s New Orleans Division. The case is being prosecuted by Senior Counsel Evan Williams of the Criminal Division’s Computer Crimes and Intellectual Property Section and Assistant U.S. Attorneys Jordan Ginsberg and Myles Ranier of the Eastern District of Louisiana.
The enforcement action announced today is related to the many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). The IP Task Force supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state, and local law enforcement partners, and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
TBC Plea Agreement
TBC Factual Basis
Wittich Plea Agreement
Wittich Factual Basis
Armed Home Invader Pleads Guilty to Robbery ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Clarence Lambert, 22, of Brooklyn, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to commit Hobbs Act robbery and use and brandishing of a firearm during a crime of violence. The charges carry a mandatory minimum penalty of seven years in prison, a maximum of life, a fine of $500,000 or both. Under the terms of the plea agreement, Lambert will be sentenced to 25 years in prison.
Assistant U.S. Attorney Robert A. Marangola, who is handling the case, stated that the defendant participated in two armed, home invasion robberies. Lambert and co-defendants Earl McCoy and M.N. believed two victims living at a residence on Hayward Avenue in Rochester were involved in the unlawful possession and distribution of controlled substances, including marijuana and cocaine. As a result, the three conspired to rob the victims in their residence at gunpoint. On September 15, 2014, Lambert and Earl McCoy broke into the residence, brandished firearms, and demanded money and drugs from two victims. Lambert and Earl McCoy restrained the victims at gunpoint, searched the residence, and threatened to kill the victims if they called the police. After finding no money or drugs, the defendant and Earl McCoy fled the residence after taking a cell phone belonging to one of the victims.
On October 7, 2014, Lambert, and co-defendants Earl McCoy, M.N., Jessica Moscicki, Gary Lambert, and Jecovious Barnes, went to 49 Polo Place in Rochester to rob a third victim of jewelry, watches, and cash. Moscicki backed a vehicle into the driveway and waited while the defendant, Jecovious Barnes, and Gary Lambert, who were armed with weapons, including a firearm, broke into the residence. Inside the residence, Clarence Lambert beat the third victim and his wife with a firearm while demanding money, jewelry, and watches. The defendant and his accomplices left with approximately $20,000 in United States currency, five loose diamonds, and approximately 20 to 40 luxury watches.
Jessica Moscicki then drove the defendant, Gary Lambert and Jecovious Barnes from the robbery to meet Earl McCoy and M.N. at the home of M.N.’s mother on Electric Avenue in Rochester. Earl McCoy and M.N. were given the proceeds of the robbery. M.N. then divided some of the proceeds of the robbery, including luxury watches and cash, among the co-conspirators. M.N. maintained possession of the remaining cash, jewelry, and watches stolen from 49 Polo Place.On October 14, 2014, Clarence Lambert and Jessica Moscicki entered Rochester Pawn Brokers on State Street in Rochester to provide one of the stolen watches to owner Samuel, Cruz, Jr. As Cruz examined the watch in a back office, law enforcement officers arrived to take the defendant into custody. Clarence Lambert fled on foot but was taken into custody while hiding inside a garage on Frankfurt Street in Rochester.
“On occasion, a particular group is so violent or dangerous that federal prosecution is warranted,” said U.S. Attorney Hochul. “This was such a group and these were such circumstances.”
Jessica Moscicki, Jecovious Barnes, and Gary Lambert, have been convicted and are in custody awaiting sentencing.
Earl McCoy was arrested November 8, 2014 in North Charleston, South Carolina. He is charged with Hobbs Act conspiracy, Hobbs Act robbery, Attempted Hobbs Act robbery, and three counts of use of a firearm during and in relation to a crime of violence. Charges are pending. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The person identified as M.N. was arrested on May 18, 2015 and is in custody.
The plea is the culmination of an investigation on the part of the Greece Police Department, under the direction of Chief Patrick Phelan, Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Delano A. Reid, Special Agent in Charge, New York Field Division, the Federal Bureau of Investigation, the New York State Police, under the direction of Major Craig Hanesworth, and the Rochester Police Department under the direction of Chief Michael Ciminelli.Sentencing is scheduled for January 15, 2016 at 1:00 pm before the Judge Wolford.
Alleged Document Thief IndictedRead 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 a federal grand jury returned a four count superseding indictment charging Daniel Witek, 52, of Buffalo NY, with three counts of mail fraud and one count of interstate transportation of stolen goods. Each count of mail fraud carries a maximum penalty of 20 years in prison. The interstate transportation of stolen goods charge carries a maximum of 10 years in prison.
Assistant U.S. Attorney Michael DiGiacomo, who is handling the case, stated that according to the superseding indictment, in the spring of 2013, the defendant was a volunteer at the Buffalo History Museum. While volunteering at the museum, Witek devised a scheme to access and steal certain historical writings addressed to Anson Conger Goodyear that belonged to the museum. The defendant then offered to sell the stolen documents to one autograph dealer in New York City and one in New Jersey.
The defendant was arraigned before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and released.
The indictment is the result of an investigation by Special Agents of the Federal Bureau of Investigation Safe Streets Task Force, which includes representatives of the Amherst Police Department; the Buffalo Police Department; U.S. Border Patrol, the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Cheektowaga Police Department; the Erie County Sheriff’s Department; the Hamburg Police Department; the Lancaster Police Department; the Niagara Frontier Transportation Authority Police; the New York State Department of Correctional Services; the New York State Police; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations, and the United States Secret Service under the direction of Special Agent in Charge C. Todd Laster.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until proven guilty.
Alive Hospice Pays U.S. and Tennessee over $1.5 Million to Resolve False Claims Act LawsuitRead the Press Release
Alive Hospice, Inc. has paid over $1.5 million to reimburse the government for alleged overbilling of Medicare and TennCare for hospice services, announced Jack Smith, First Assistant United States Attorney for the Middle District of Tennessee. Alive is a non-profit hospice care provider that operates in Tennessee and provides various levels of hospice services.
“The Medicare and TennCare hospice benefits are meant to provide comfort and care to persons who are terminally ill,” said Jack Smith, Acting U.S. Attorney for the Middle District of Tennessee for the administration of this settlement. “We will continue to work to ensure that these benefits are used for these purposes.”
The Medicare and TennCare hospice benefits are available for patients who are nearing the end of their life. Medicare and TennCare reimburse for four different levels of hospice care: routine home care, continuous home care, inpatient respite care, and general inpatient care. General inpatient services are for pain control or symptom management that cannot be managed in other settings, such as a patient’s home. Medicare and TennCare reimburse for general inpatient care at a higher rate than that paid for routine home care or inpatient respite care.
The settlement resolves the government’s allegations that Alive submitted claims to Medicare and TennCare for general inpatient hospice care for patients who did not qualify for that care during the period from June 1, 2010 through December 31, 2012 and for seven patients who did not qualify for general inpatient services on specific dates in 2007 and 2008.
“We are seeing a trend of false claims involving hospice providers,” said Derrick L. Jackson, the Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Providers are overbilling the Medicare program and taking advantage of patients at a particularly vulnerable point in their lives. HHS-OIG will continue to pursue providers who overbill these programs and will seek appropriate remedies through the U.S. Attorney’s Office.”
“For the benefit of patients and taxpayers, it is critical that we protect against fraud and abuse,” said Attorney General Herbert H. Slatery III. “These programs have limited funds, so we must ensure that every dollar is spent on the care of those most in need.”
Under the settlement agreement, Alive paid a total of $1,548,220.Of that amount, $1,446,132 goes to the United States, and $102,088 goes to the State of Tennessee.
The allegations resolved by today’s settlement were originally raised in a lawsuit filed against Alive by Linda Anderson, a triage nurse who previously worked for Alive.She brought her claims under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery.Anderson will receive $263,197 as her share of the settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by the Attorney General and the Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $22.75 billion through False Claims Act cases, with more than $14.5 billion of that amount recovered in cases involving fraud against federal health care programs.
The case was handled by the United States’ Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by HHS-OIG and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States. Senior Deputy Attorney General Leslie Bridges represented the State of Tennessee.
The case is docketed as United States ex rel. Anderson v. Alive Hospice, Inc., No. 3:12-cv-00597 (M.D. Tenn.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
9 September 2015
Yuma Man Sentenced to 8 Years in Federal Prison for Distribution of Child PornographyRead the Press Release
PHOENIX – Yesterday, David Peter Calik, Jr., 55, of Yuma, Ariz., was sentenced by U.S. District Judge David G. Campbell to 96 months in prison, followed by a term of lifetime supervised release. Calik pleaded guilty on May 1, 2015 to distribution of child pornography.
According to court documents, on Sept. 20, 2013, Calik distributed two images of child pornography. During the investigation it was discovered that Calik possessed 13,180 images and 347 videos of child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-1631-PHX-DGC
RELEASE NUMBER: 2015-069_Calik
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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.
Wendell Couple Plead Guilty to Drug and Firearm OffensesRead the Press Release
BOISE - Miguel Angel Osuna-Zavala, 42, and his wife Diane Osuna, 43, of Wendell, Idaho, pleaded guilty today to federal firearm and drug charges, U.S. Attorney Wendy J. Olson announced. The couple appeared before Senior U.S. District Judge Edward J. Lodge in Boise to enter their pleas. Miguel Osuna-Zavala pleaded guilty to possession of a firearm in furtherance of drug trafficking, and conspiracy to possess with intent to distribute methamphetamine. Diane Osuna pleaded guilty to possession with intent to distribute methamphetamine, and possession of a firearm in furtherance of drug trafficking. They were indicted by a federal grand jury in Boise on March 10, 2015.
According to the plea agreement, on February 2, 2015, a search warrant was executed on the couple’s home in Wendell, Idaho. Inside a safe located in the master bedroom was a package of methamphetamine weighing approximately 65 grams, and a 9mm Sturm Ruger pistol, model P95. The pistol is registered in the name of Diane Osuna. In the house officers also found baggies and a set of digital scales. According to the plea agreements, Diane Osuna would weigh out the drugs for Miguel to sell. Miguel Osuna-Zavala is a Mexican national living illegally in the United States. Diane Osuna is a U.S. citizen.
The charge of conspiracy and possession with intent to distribute methamphetamine are punishable by not less than five years, and no more than 40 years, in prison, and a fine of up to $5,000,000. The charge of possession of a firearm in furtherance of drug trafficking is punishable by not less than five years in prison, consecutive to any other prison term, and a fine of up to $250,000.
Sentencing is set for December 9, 2015, before Judge Lodge at the federal courthouse in Boise.
The case was investigated by the Gooding County Sheriff’s Office and the Bureau of Alcohol, Tobacco and Firearms. The case was prosecuted as part of Idaho’s Project Safe Neighborhoods Program, which seeks to reduce gun violence in Idaho.
Virginia Man Pleads Guilty to Possession of Child PornographyRead the Press Release
WASHINGTON – Donald A. Essex, 68, of Alexandria, Va., pled guilty today to a charge of possession of child pornography, announced Acting U.S. Attorney Vincent H. Cohen, Jr., Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Essex pled guilty in the U.S. District Court for the District of Columbia. The charge carries a statutory maximum of 10 years in prison as well as potential financial penalties. The Honorable Senior Judge Paul L. Friedman scheduled sentencing for Dec. 1, 2015. Essex has been in custody since his arrest on May 15, 2015.
According to the government's evidence, on May 14, 2015, Essex contacted an undercover officer with the FBI's Child Exploitation Task Force, through a social network site. He continued this conversation via instant messaging with the undercover officer, who purported to be the father of an under-aged girl. Essex then began sending approximately a dozen images of child pornography. He also expressed interest in engaging in sexual acts with the under-aged girl. Law enforcement soon identified the defendant and obtained arrest and search warrants.
In a search of Essex’s home at the time of his arrest on May 15, 2015, law enforcement recovered a computer, drives, and other devices. A forensic examination of those devices led to the discovery of images and videos depicting child pornography. Essex pled guilty to knowingly possessing more than 600 images of child pornography.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the plea, Acting U.S. Attorney Cohen, Assistant Director in Charge Abbate, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also expressed appreciation for the assistance provided by the Fairfax County, Va., Police Department. Finally, they acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Joyce Arthur and Assistant Andrea L. Hertzfeld, who is prosecuting the matter.
U.S. Attorney Deborah R. Gilg Appointed to Attorney General’s Advisory CommitteeRead the Press Release
Attorney General Loretta E. Lynch announced today the appointment of U.S. Attorney Deborah R. Gilg of the District of Nebraska to the Attorney General’s Advisory Committee (AGAC), effective Sept. 4, 2015:
“The Attorney General’s Advisory Committee plays a crucial role in shaping the Justice Department’s approach to some of the most pressing public safety issues facing our country today,” said Attorney General Lynch. “I am grateful that the U.S. Attorneys who serve on the AGAC are able to lend their wisdom, their expertise and their counsel to advance the committee’s critical work on behalf of the American people. As a former chair of the AGAC, I know that serving on the committee while leading federal law enforcement efforts within one’s home district is no easy feat. But I also know that the AGAC’s members are on the committee precisely because of their talent and effectiveness as public service leaders. That is why I could not be more pleased to welcome Deborah to the committee, where I know she will continue to serve her district and our country with passion, with intelligence and with results.”
U.S. Attorney Gilg will fill the seat vacated by former U.S. Attorney Conner Eldridge for the Western District of Arkansas, who stepped down on Aug. 22, 2015.
U.S. Attorney Gilg was appointed by President Barack Obama on Oct. 1, 2009, as the 32nd U.S. Attorney of the District of Nebraska and the first female U.S. Attorney of the District of Nebraska. Prior to her appointment, U.S. Attorney Gilg served as an elected county attorney in Western Nebraska for 16 years. In recognition of her expertise as a prosecutor, she was appointed as a deputy county attorney or special prosecutor in more than 21 counties in Nebraska, in addition to maintaining a private law practice. U.S. Attorney Gilg currently serves on the Attorney General’s Subcommittees on Native American Issues, Civil Rights Issues, and Terrorism and National Security Issues.
The AGAC was created in 1973 to serve as the voice of the U.S. Attorneys and to advise the Attorney General on policy, management and operational issues impacting the U.S. Attorneys’ Offices.
Two convicted of heroin, oxycodone traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Zora D. Parks, 29, of Boothsville, West Virginia, and Brittany Wodzinski, 25, of Buckhannon, West Virginia, were convicted of heroin and oxycodone trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
In early 2015, Parks allowed her Taylor County residence to be used to store and distribute heroin. She pled guilty today to one count of “Maintaining Drug-Involved Premises.” She faces up to 20 years in prison and a fine of up to $500,000. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Wodzinski was among 21 individuals charged in a Philadelphia, Pennsylvania to Morgantown, West Virginia heroin and oxycodone trafficking operation in November 2014. She pled guilty today to one count of “Use of a Telephone to Facilitate the Distribution of Oxycodone.” She faces up to four years in prison and a fine of up to $250,000. The West Virginia State Police Bureau of Criminal Investigation, the Federal Bureau of Investigation, and the Mon Valley Drug and Violent Crime Task Force investigated.
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 defendants.
Assistant U.S. Attorney Zelda Wesley prosecuted Wodzinski, and Wesley and Former Assistant U.S. Attorney Shawn Morgan prosecuted Parks on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Twin Cities Somali Community Leaders, Government Officials and Private Partners Present Plan to Build Community ResilienceRead the Press Release
United States Attorney Andrew M. Luger today was joined by public and private partners in the Building Community Resilience pilot project to announce the project’s first-year accomplishments. Building Community Resilience was designed in close coordination with Minnesota’s Somali community, government stakeholders and private partners to address the root causes of radicalization.
Since Al Shabaab began recruiting Minnesota’s youth in 2006, the Twin Cities have been a focus of overseas terror recruiting by organizations like the Islamic State for Iraq and the Levant (ISIL). This cycle of terror recruiting has exclusively targeted Minnesota’s Somali community, which is why Building Community Resilience is delivering resources to the Somali community.
The highlights of the Building Community Resilience plan include: a mentorship program for Somali youth operated by Big Brothers Big Sisters of the Greater Twin Cities, with initial funding from the Carlson Family Foundation; the Opportunity Hub, which is a public, private and community partnership to provide a one-stop shop for education and workforce resources located in the cedar riverside neighborhood; nearly $500,000 of private and government grant funding to be administered by Youthprise.
Youthprise is a non-profit organization that strategically combines funding, capacity building, policy advocacy, research, and youth engagement under one roof. As an intermediary, Youthprise acts as an incubator, connector and relationship broker, forging connections between community-based organizations, schools, funders, public agencies, youth and adults. Youthprise convenes stakeholders; provides training, coaching and technical assistance; and links organizations doing similar work.
“Today, at the end of the first year of work, we are announcing some of the accomplishments of the Building Community Resilience pilot program,” said U.S. Attorney Luger. “We have developed strong friendships, working relationships and important partnerships to build this plan. This is just the beginning of what we hope to accomplish, and we’re very excited about where we are today.”
“Minneapolis’ Somali community is a tremendous asset to our city,” said Minneapolis Mayor Betsy Hodges. “We must all support this community and their ability to contribute to our prosperity, or we will not be the city we need to be. The extent to which some people in the community are turning to violence as a perceived solution to problems is the extent to which we must provide actual solutions to real problems that people are facing like poverty, unemployment, and homelessness. The steps we are taking today build on our work to strengthen the Somali community. These efforts are critical to ensuring that harming others is never a solution to any problem.”
“The recruitment of a single resident from our city is unacceptable,” said Minneapolis Council Member Abdi Warsame. “My office has been working with federal, state, county and city officials to connect existing opportunities to the East African community in order to tackle the underlining conditions that make our young people vulnerable.”
“This has been one of the greatest opportunities to voice community issues that have traditionally been ignored,” said Hodan Hassan, co-chair of the Somali American Task Force. “If we save even one young person through this collaboration between community, government, and private-sector partners, our mission is accomplished.”
“We are proud to support the ‘Building Community Resilience’ initiative,” said Rich Hoge, Executive Vice President, Mall of America. “Today is about opportunity, solutions and hope. It is a first step in working together to address the challenges we face collectively. We are honored to be a partner in this exciting new program.”
“We are thrilled to be a part of this groundbreaking public/private partnership,” said Wokie Weah, President of Youthprise. “Since our inception, Youthprise has been a huge supporter of Somali-led organizations serving youth and families. Our role in this partnership will build on this work by strengthening the capacity of Somali-led organizations and providing critical funding for youth empowerment. Youthprise will conduct an open competitive process in the distribution of grant funds to community based organizations.”
“We're pleased that Big Brothers Big Sisters of the Greater Twin Cities will be part of this important initiative,” said Gloria Lewis, CEO, Big Brothers Big Sisters of the Greater Twin Cities. “Mentoring helps to foster success in school, improve social and emotional learning, and raise educational expectations. We’re eager to work with the Somali-American community in the Twin Cities bring the positive effects of mentoring to youth who can benefit from the presence of an additional, caring adult, and to help nurture the next generation of our community's citizens and leaders.”
“That I (as a minority member) was able to get this into a major Appropriations bill late in the process indicates the legislatures understanding of the importance of this issue and the need for new approaches,” said State Representative Phyllis Kahn. “I am pleased to be here at this next step.”
Building Community Resilience partners include:
Big Brothers Big Sisters of the Greater Twin Cities
Carlson Family Foundation
City of Minneapolis
City of St. Paul
Hennepin County
Mall of America
Somali-American Task Force
State of Minnesota
Youthprise
United States Transportation Security Administration
United States Customs and Border Protection
United States Department of Justice
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Suburban Pittsburgh Man Sentenced for Violating Drug and Gun LawsRead the Press Release
PITTSBURGH - A Pittsburgh-area resident has been sentenced in federal court to three years of probation, the first year of which will include a condition of home detention, on his conviction of violations of federal firearms and narcotics laws, United States Attorney David J. Hickton announced today.
United States District Judge David Stewart Cercone imposed the sentence on Guy Amatangelo, 42.
According to information presented to the court, Amatangelo was intercepted on a federal wiretap that targeted large-scale heroin and cocaine traffickers in the Hill District section of Pittsburgh and beyond. That wiretap revealed that during September 2013 and October 2013, Amatangelo conspired with others to distribute and possess with intent to distribute crack cocaine. In addition, on Oct. 5, 2013, Amatangelo, an unlawful user of crack cocaine, possessed a firearm.
Assistant United States Attorney Troy Rivetti prosecuted this case on behalf of the government.
This prosecution is the result of a federal OCDETF investigation led by the Federal Bureau of Investigation and the Drug Enforcement Administration. Other participating agencies include the Allegheny County Police Department, Pennsylvania State Police, Allegheny County Sheriff’s Office, Pittsburgh Bureau of Police, Munhall Police Department and Wilkinsburg Police Department.
U.S. Attorney Hickton commended the FBI, DEA and the other agencies for the investigation leading to the successful prosecution of Amatangelo.
Springfield Man Sentenced to 17 Years in Prison for Producing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Springfield, Mo., man was sentenced in federal court today for producing child pornography.
David Albert, 50, of Springfield, was sentenced by U.S. District Judge Beth Phillips to 17 years and six months in federal prison without parole.
On March 11, 2015, Albert pleaded guilty to the sexual exploitation of a child.
A special agent with Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI) in Portland, Maine, discovered a posting on an Internet chat service in October 2014 that offered “trading and sharing” of child pornography. The agent identified Albert, who sent him a pornographic image of an 11-year-old female, as the person responsible for posting the advertisement.
Local law enforcement officers executed a search warrant at Albert’s residence on Oct. 3, 2014. They seized a laptop computer that contained multiple images of child pornography and a cell phone, both of which have been forfeited to the government. Albert was not present in the home at the time the investigators executed the warrant, but was later located at his place of employment. He admitted that he had taken the photo of the 11-year-old victim with his cell phone.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cybercrimes Task Force, Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Springfield, 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."
Spokane Attorney Sentenced to Five Years in Federal Prison for Receipt of Child PornographyRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Kenneth K. Watts, age 66, a bankruptcy attorney in Spokane, Washington, was sentenced on September 4, 2015, after having previously pled guilty on July 2, 2015 to Receipt of Child Pornography. Senior United States District Court Judge Justin L. Quackenbush sentenced Watts to a five year term of imprisonment, to be followed by a ten year term of court supervision after he is released from federal prison. In addition, Watts was ordered to forfeit to the United States the computer laptop, external hard drive and iPad he used to receive and possess child pornography. Watts was also ordered to pay $5,000 in restitution in lieu of forfeiture of his home. Watts will also be required to register as a sex offender.
According to information disclosed during the court proceedings, on May 21, 2014, an employee at the Albertsons store, located on N. Nevada Street in Spokane, Washington, found an iPad left unattended in a shopping cart. In an attempt to locate the owner the store employee turned on the iPad and observed child pornography. The employee immediately contacted the Spokane Police Department. Watts arrived at the Albertsons store on May 21, 2014, while the Spokane Police were still at the store, and admitted the iPad was his and that it contained child pornography. A forensic examination determined that the iPad contained over 900 images of child pornography. On April 7, 2015, Watts was indicted by the Grand Jury for the Eastern District of Washington and charged with offenses relating to the exploitation of children. On April 9, 2015, Watts was arrested at his residence in Spokane by agents from the Federal Bureau of Investigation. Watts confessed that he had child pornography on some of the digital items in his home. A search warrant was obtained for Watts’ computer laptop and external hard drive taken from his home. A forensic examination of these items revealed that Watts was, once again, in possession of child pornography (approximately 2,500 images).
Michael C. Ormsby stated, “The Spokane Police Department and the FBI worked in superb partnership in the investigation this case. The United States Attorney’s Office in the Eastern District of Washington is, and will continue to be, committed to prosecuting aggressively and seeking appropriate punishment for child pornography crimes.”
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States 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. The Project Safe Childhood Initiative (“PSC”) has five major components:
· Integrated federal, state, and local efforts to investigate and prosecute child
exploitation cases, and to identify and rescue children;
· Participation of PSC partners in coordinated national initiatives;
· Increased federal enforcement in child pornography and enticement cases;
· Training of federal, state, and local law enforcement agents; and
· Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
This investigation was conducted by the Spokane Police Department and Federal Bureau of Investigation. The case was prosecuted by James A. Goeke and Stephanie J. Lister, Assistant United States Attorneys for the Eastern District of Washington.
Sixth Member of Colombian Cocaine Exportation Conspiracy SentencedRead the Press Release
NORFOLK, Va. – Julian Manuel Moreno Martinez, 31, of Turbo, Antioquia, Colombia, was sentenced today to 144 months in prison for his role in a cocaine manufacturing and distribution conspiracy centered in Colombia.
Moreno Martinez pleaded guilty on May 11, 2015. According to court documents, Moreno Martinez maintained farmland on the northern coast of Colombia where he provided storage and security for loads of cocaine that were in route for exportation to Central America and, ultimately, the United States. He also personally arranged for transportation of cocaine loads and, at times, made deliveries and sales. Over the course of approximately two years, Moreno Martinez was involved in the movement of over 1,800 kilograms of cocaine destined for the United States. Moreno Martinez is the sixth member of this conspiracy sentenced to-date.
Name
Date of Guilty Plea
Sentencing
German Dario Brand Piedrahita
Sept. 23, 2014
Sentenced on March 3, 2015, to 144 months
Jose Nolber Zuluaga Otalvaro
Dec. 17, 2014
Sentenced on April 7, 2015, to 108 months
Hermes Andrade Quintero
March 12, 2015
Sentenced on June 22, 2015, to 164 months
Osvaldo Jose Lopez Herrera
March 23, 2015
Sentenced June 22, 2015, to 156 months
Sonia Cruz Quiceno
March 19, 2014
Sentenced Sept. 24, 2014, to 168 months
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorneys V. Kathleen Dougherty and Kevin M. Comstock prosecuted the case.
This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) program, a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:13cr122.
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Six More Defendants Plead Guilty in Case Charging Leland Yee and Others with RacketeeringRead the Press Release
SAN FRANCISCO – George Nieh, Leslie Yun, Kevin Sui, Alan Chiu, Yat Wa Pau, and Andy Li all pleaded guilty today to a broad range of charges alleged against them in a superseding indictment filed January 29, 2015, announced Acting United States Attorney Brian J. Stretch and FBI Special Agent in Charge David J. Johnson. The indictment charged the defendants, Leland Yee, and twenty-one others with illegal conduct stemming from an alleged racketeering operation. The guilty pleas bring to ten the number of people who have pleaded guilty to one or more of the charges in the indictment. Unlike earlier pleas, today’s guilty pleas do not include an admission of guilt with respect to the charge that the defendants conspired to conduct the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(d) (RICO conspiracy); yet, the each defendant pleaded guilty one or more of the crimes alleged as part of the RICO conspiracy.
Each defendant, all San Francisco residents, pleaded guilty on the basis of separate individualized facts, but virtually all the facts admitted today were set out in the superseding indictment. George Nieh pleaded guilty to all the counts pending against him in the second superseding indictment with the exception of Count One, the RICO charge. The charges to which Nieh pleaded guilty include 146 counts of money laundering, in violation of 18 U.S.C. § 1956; one count of conspiracy to distribute and possession with intent to distribute marijuana, in violation of 21 U.S.C. § 841; two counts of conspiracy to receive stolen property, in violation of 18 U.S.C. §§ 371, 2314 and 2315; four counts of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g); three counts of distribution and possession with intent to distribute marijuana, in violation of 21 U.S.C. § 841; three counts of conspiracy to traffic and trafficking contraband cigarettes, in violation of 18 U.S.C. § 371, 2315, 2342 and 2344; and two counts of dealing firearms without a license, in violation of 18 U.S.C. § 922(a).
Leslie Yun pleaded guilty to five of the 34 counts of money laundering pending against her, two counts of distribution and possession with intent to distribute marijuana, and three counts of conspiracy to traffic and trafficking in contraband cigarettes. Yun did not plead guilty to the remaining money laundering charges nor the RICO charge. In pleading guilty, Yun admitted she believed funds that she had received were proceeds from unlawful activities. Yun also admitted that on at least three occasions, she shipped, received, or sold contraband cigarettes for which she paid a total of more than $400,000.
Kevin Siu pleaded guilty to eight of the 24 money laundering counts pending against him. He did not plead guilty to the RICO conspiracy charge.
Alan Chiu pleaded guilty to 13 of the 36 money laundering charges pending against him. He, too, did not plead guilty to the RICO charge.
Yat Wa Pau pleaded guilty to two counts of conspiracy to traffic and trafficking of contraband cigarettes. Pau did not plead guilty to the remaining charges pending against him which include the RICO charge; 18 counts of money laundering; and one count of manufacturing, distribution, and possession with intent to distribute marijuana. As part of his guilty plea, Pau admitted he participated in two sales of contraband cigarettes for which he paid over $300,000.
Andy Li pleaded guilty to two counts of being a felon in possession of a firearm, two counts of dealing in firearms without a license, two counts of money laundering, and one count of possession of marijuana with intent to distribute. He did not plead guilty to the RICO charge, the remaining eighteen counts of money laundering, and one count of conspiracy to manufacture marijuana with intent to distribute.
The superseding indictment charged twenty-eight people in all. Eight of the defendants, including the six defendants who pleaded guilty today, Raymond Chow, and Kongphet Chanthavong, are scheduled for trial on November 2, 2015, before U.S. District Judge Charles R. Breyer. The charges against the six defendants to which they have not pleaded guilty are still pending. Judge Breyer scheduled a hearing for Tuesday, September 14, 2015, to discuss additional matters in light of the guilty pleas.
The maximum statutory penalty for participating in the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(d), is a 20 years of imprisonment, a fine of $250,000, plus restitution. The maximum penalty for money laundering, in violation of 18 U.S.C. § 1956, is 20 years imprisonment plus $500,000; the maximum penalty for conspiracy to distribute, distribution and possession with intent to distribute marijuana, in violation of 21 U.S.C. § 841 or § 846, is 20 years and a $1,000,000 fine; the maximum penalty for conspiracy to receive stolen property, in violation of 18 U.S.C. §§ 371, 2314 and 2315, is 5 years and $250,000; the maximum penalty for being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g), is 10 years and $250,000; the maximum penalty for conspiracy to traffic and trafficking contraband cigarettes, in violation of 18 U.S.C. § 371, 2315, 2342 and 2344, is 5 years and $250,000; the maximum penalty for dealing firearms without a license, in violation of 18 U.S.C. § 922(a), is 5 years and $250,000. Additional periods of supervised release and additional fines and assessments may apply. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys William Frentzen, Susan Badger, and S. Waqar Hasib are prosecuting the case with the assistance of Rosario Calderon, Kurk Kosek, Ana Guerra, Marina Ponomarchuk, Victoria Etterer, and Lance Libatique. The prosecution is the result of an investigation by the Federal Bureau of Investigation; San Francisco Police Department Gang Task Force; Oakland Police Department; Internal Revenue Service, Criminal Investigation; New York Police Department; and the Mercer County New Jersey Sheriff's Office.
Sex Offender Sentenced to 18 Months for Failing to RegisterRead the Press Release
POCATELLO - Geoffrey Lee Hungerford, 25, of Idaho Falls, Idaho, was sentenced today to 18 months in prison followed by five years of supervised release for failing to register as a sex offender, U.S. Attorney Wendy J. Olson announced. Hungerford pleaded guilty to the charge on June 24, 2015.
According to court records, Hungerford was convicted in 2011, in Oregon of attempted rape and was required to register as a sex offender. Hungerford last registered a mailing address in Oregon in March 2014. He admitted in court that he failed to register in Idaho in January 2015, after moving to Idaho Falls. When arrested, Hungerford told law enforcement that he knew he had to register, but had forgotten.
The case was investigated by the United States Marshals Service, with the assistance of the Idaho Falls Police Department.
Hungerford was prosecuted for a violation of the Sex Offender Registration and Notification Act (SORNA) passed by Congress in 2006. The Act requires sex offenders to register and keep their registration current in each jurisdiction where they reside. Violations of SORNA can be prosecuted in federal court.
Seventeen Members and Associates of Two Rival Bronx Street Gangs Charged in Federal Court with Racketeering and Narcotics Offenses, Including Two MurdersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Glenn Sorge, Acting Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), today announced the unsealing of two Indictments charging a total of 17 members and associates of two Bronx-based street gangs, the Taylor Avenue Crew and the Leland Avenue Crew, with various racketeering and narcotics offenses, including two murders of rival gang members.
Twelve of the seventeen defendants, JAMES CAPERS, TOMMY BROWN, JESSE IRVIN, EDWIN MOYE, UNIQUE CHRISTOPHER, DANTE RODGERS, IRVIN ORTIZ, ELIJAH DAVILA, RICARDO GARCIA, PABLO CHEVERE, GLADYS MORALES, KENNETH MERCADO, and ANDREA BELL, were taken into federal custody yesterday or this morning and will be presented before Chief United States Magistrate Judge Frank Maas later today. Four of the defendants, MARQUISE ROCHESTER, CHRISTIAN McKNIGHT, SAMUEL SERRANO, and MESSIAH PERRY, are currently incarcerated in state custody on other charges, and will be presented at a later date. The case of United States v. Irvin Ortiz, et al, 15 Cr. 608 (KPF) has been assigned to U.S. District Judge Katherine Polk Failla. The case of United States v. James Capers, et al., 15 Cr. 607 (WHP) has been assigned to U.S. District Judge William H. Pauley, III.
Manhattan U.S. Attorney Preet Bharara said: “Members of the Taylor Avenue and Leland Avenue Crews allegedly wreaked havoc on the community through the sale of crack cocaine and a wave of violence on the streets of the Bronx. On two occasions, that violence allegedly ended in the murders of rival gang members.”
HSI Acting Special Agent-in-Charge Glenn Sorge said: “Today’s arrests deal a serious blow to two gangs that allegedly used the streets of New York City to sell drugs and commit acts of violence including murder. HSI will continue to work with our law enforcement partners to rid the streets of these dangerous criminal organizations that instill fear in our communities.”
DEA Special Agent in Charge James J. Hunt said: “Drug trafficking inevitably leads to further crime and violence, as depicted in the alleged charges against the members of the Leland Avenue and Taylor Avenue Crews. Through a common goal, law enforcement pooled resources to investigate and arrest those who converted their Avenues into their own private battlefields.”
Police Commissioner William J. Bratton said: “These indictments and arrests are the result of the collaborative power of law enforcement to address narcotics sales and street level shootings, crimes which are often committed by just a few individuals but affect a great many more. I would like to thank the NYPD investigators and our federal law enforcement partners who worked tirelessly to protect this Bronx community and bring justice to those responsible for this scourge of drugs, death and violence.”
As alleged in the Indictments unsealed today in Manhattan federal court[1]:
United States v. Irvin Ortiz, et al., 15 Cr. 608 (KPF)
The Taylor Avenue Crew was a criminal enterprise that operated principally in and around the Bronx, New York, from at least 2012 up to and including 2015. One of the Taylor Avenue Crew’s principal objectives was to sell cocaine base, commonly known as “crack cocaine,” primarily in and around Taylor Avenue in the Bronx. The Taylor Avenue Crew controlled crack cocaine sales within this area by prohibiting and preventing non-members, outsiders, and rival narcotics dealers from distributing crack cocaine in the area controlled by the enterprise.
Members and associates of the Taylor Avenue Crew engaged in acts of violence against the Leland Avenue Crew, a rival gang that sold crack cocaine primarily in and around Leland Avenue, which runs parallel to Taylor Avenue and is located two blocks east. These acts of violence included assaults, attempted murder, and murder, and were committed to protect the Taylor Avenue Crew’s drug territory, to retaliate against members of rival gangs who had encroached on the territory controlled by the Taylor Avenue Crew, and to otherwise promote the standing and reputation of the Taylor Avenue Crew amongst rival gangs.
The violence perpetrated by the Taylor Avenue Crew turned deadly in March 2015. On or about March 3, 2015, ELIJAH DAVILA and Allen McQueen, a now deceased member of the Taylor Avenue Crew, murdered Pablo Beard, a member of the Leland Avenue Crew, by shooting Beard in the vicinity of 1512 Leland Avenue in the Bronx. As alleged in the Ortiz Indictment, DAVILA committed this murder to maintain and increase his position in the Taylor Avenue Crew.
Count One of the Ortiz Indictment charges IRVIN ORTIZ, RICARDO GARCIA, ELIJAH DAVILA, SAMUEL SERRANO, MESSIAH PERRY, PABLO CHEVERE, GLADYS MORALES, and KENNETH MERCADO with participating in a racketeering conspiracy. Count Seven of the Ortiz Indictment charges ORTIZ, GARCIA, DAVILA, SERRANO, PERRY, MORALES, and MERCADO, with a firearms offense in connection with that conspiracy.
Counts Two, Three, Six, and Eight charge DAVILA with conspiracy to commit murder in aid of racketeering activity, murder in aid of racketeering activity, murder in connection with a drug crime, and a related firearms offense in connection with the March 2015 murder of Pablo Beard.
Count Four of the Ortiz Indictment charges MERCADO with assault and attempted murder in aid of racketeering activity in connection with the August 2015 shooting of members of the Leland Avenue Crew.
Count Five of the Ortiz Indictment charges ORTIZ, GARCIA, DAVILA, SERRANO, PERRY, CHEVERE, MORALES, MERCADO, and ANDREA BELL with participating in a narcotics conspiracy, in connection with their distribution of crack cocaine in and around Taylor Avenue.
United States v. James Capers, et al., 15 Cr. 607 (WHP)
The Leland Avenue Crew was a criminal enterprise that operated principally in and around the Bronx, New York, from at least 2012 up to and including 2015. One of the principal objectives of the Leland Avenue Crew was to sell crack cocaine, primarily in and around Leland Avenue in the Bronx. Members and associates of the Leland Avenue Crew engaged in acts of violence against the Taylor Avenue Crew. These acts of violence included assaults, attempted murder, and murder intended either to protect the Leland Avenue Crew’s drug territory, retaliate against members of rival gangs who had encroached on the territory controlled by the Leland Avenue Crew, or to otherwise promote the standing and reputation of the Leland Avenue Crew among rival gangs.
The violence perpetrated by the Leland Avenue Crew also turned deadly in July 2015. On or about July 7, 2015, JAMES CAPERS murdered Allen McQueen, a member of the Taylor Avenue Crew, by shooting McQueen in the vicinity of 1531 Taylor Avenue in the Bronx. As alleged in the Capers Indictment, CAPERS committed this murder to maintain and increase his position in the Leland Avenue Crew.
Count One of the Capers Indictment charges CAPERS, TOMMY BROWN, JESSE IRVIN, MARQUISE ROCHESTER, EDWIN MOYE, CHRISTIAN MCKNIGHT, UNIQUE CHRISTOPHER, and DANTE RODGERS with participating in a racketeering conspiracy. Count Six of the Capers Indictment charges CAPERS, IRVIN, ROCHESTER, MOYE, and MCKNIGHT with a firearms offense in connection with that conspiracy.
Counts Two, Four, and Five charge CAPERS with murder in aid of racketeering activity, murder in connection with a drug crime, and a related firearms offense, in connection with the July 2015 murder of Allen McQueen.
Count Three charges CAPERS, BROWN, IRVIN, ROCHESTER, MOYE, MCKNIGHT, CHRISTOPHER, and RODGERS with participating in a narcotics conspiracy, in connection with their distribution of crack cocaine in and around Leland Avenue.
* * *
Charts containing the names, ages, residences, charges, and maximum penalties for the defendants are set forth below. 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.
Mr. Bharara praised the outstanding investigative work of HSI, the DEA, and the NYPD. He also thanked the Bronx County District Attorney’s Office for its participation and support in this ongoing investigation.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jessica Lonergan, Scott Hartman, and Jason Swergold are in charge of the prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Irvin Ortiz, et al., 15 Cr. 608 (KPF)
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Racketeering conspiracy
18 U.S.C. § 1962(d)
IRVIN ORTIZ
RICARDO GARCIA
ELIJAH DAVILA
SAMUEL SERRANO
MESSIAH PERRY
PABLO CHEVERE
GLADYS MORALES
KENNETH MERCADO
20 years in prison
2
Conspiracy to commit murder in aid of racketeering activity
18 U.S.C. § 1959(a)(5)
ELIJAH DAVILA
10 years in prison
3
Murder in aid of racketeering activity
18 U.S.C. § 1959(a)(1)
ELIJAH DAVILA
Death penalty, or life in prison
4
Assault and attempted murder in aid of racketeering activity
18 U.S.C. §§ 1959(a)(3) and 1959 (a)(5)
KENNETH MERCADO
20 years in prison
5
Narcotics conspiracy
21 U.S.C. § 846
IRVIN ORTIZ
RICARDO GARCIA
ELIJAH DAVILA
SAMUEL SERRANO
MESSIAH PERRY
PABLO CHEVERE
GLADYS MORALES
KENNETH MERCADO
ANDREA BELL
Life in prison
Mandatory minimum of 10 years in prison
6
Murder in connection with a drug crime
21 U.S.C. § 848(e)(1)(A)
ELIJAH DAVILA
Death penalty, or life in prison
Mandatory minimum of 20 years in prison
7
Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence or drug trafficking crime
924(c)(1)(A)(iii)
IRVIN ORTIZ
RICARDO GARCIA
ELIJAH DAVILA
SAMUEL SERRANO
MESSIAH PERRY
GLADYS MORALES
KENNETH MERCADO
Life in prison
Mandatory minimum of 10 years in prison
8
Murder through use of a firearm
18 U.S.C. § 9249(j)
ELIJAH DAVILA
Death penalty, or mandatory minimum of life in prison
DEFENDANT
AGE
RESIDENCE
IRVIN ORTIZ
a/k/a “Goonie”
27
Bronx, NY
RICARDO GARCIA
a/k/a “Bucky”
24
Bronx, NY
ELIJAH DAVILA
a/k/a “Montana”
23
Bronx, NY
SAMUEL SERRANO
a/k/a “Smaxx”
22
Bronx, NY
MESSIAH PERRY
a/k/a “Showtime”
22
Bronx, NY
PABLO CHEVERE
a/k/a “Splash”
32
Bronx, NY
GLADYS MORALES
a/k/a “La Bruja”
34
Bronx, NY
KENNETH MERCADO
a/k/a “Fly,” a/k/a “Twin”
25
Bronx, NY
ANDREA BELL
a/k/a “Andrea Martin,” a/k/a “Drea”
41
Bronx, NY
United States v. James Capers, et al., 15 Cr. 607 (WHP)
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Racketeering conspiracy
18 U.S.C. § 1962(d)
JAMES CAPERS
TOMMY BROWN
JESSE IRVIN
MARQUISE ROCHESTER
EDWIN MOYE
CHRISTIAN MCKNIGHT
UNIQUE CHRISTOPHER
DANTE RODGERS
20 years in prison
2
Murder in aid of racketeering activity
18 U.S.C. § 1959(a)(1)
JAMES CAPERS
Death penalty, or life in prison
3
Narcotics conspiracy
21 U.S.C. § 846
JAMES CAPERS
TOMMY BROWN
JESSE IRVIN
MARQUISE ROCHESTER
EDWIN MOYE
CHRISTIAN MCKNIGHT
UNIQUE CHRISTOPHER
DANTE RODGERS
Life in prison
Mandatory minimum of 10 years in prison
4
Murder in connection with a drug crime
21 U.S.C. § 848(e)(1)(A)
JAMES CAPERS
Death penalty, or life in prison
Mandatory minimum of 20 years in prison
5
Murder through use of a firearm
18 U.S.C. § 924(j)
JAMES CAPERS
Death penalty, or mandatory minimum of life in prison
6
Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence or drug trafficking crime
924(c)(1)(A)(iii)
JAMES CAPERS
JESSE IRVIN
MARQUISE ROCHESTER
EDWIN MOYE
CHRISTIAN MCKNIGHT
Life in prison
Mandatory minimum of 10 years in prison
DEFENDANT
AGE
RESIDENCE
JAMES CAPERS,
a/k/a “Mitch,”
22
Bronx, NY
TOMMY BROWN
a/k/a “Bizzy”
20
Bronx, NY
JESSE IRVIN
a/k/a “Spookz”
24
Bronx, NY
MARQUISE ROCHESTER,
a/k/a “Mook,” a/k/a “Millz”
23
Bronx, NY
EDWIN MOYE,
a/k/a “Eazy”
24
Bronx, NY
CHRISTIAN MCKNIGHT,
a/k/a “Spice”
22
Bronx, NY
UNIQUE CHRISTOPHER,
a/k/a “Bills”
19
Bronx, NY
DANTE RODGERS
21
Bronx, NY
[1] As the introductory phrase signifies, the entirety of the text of the Indictments, and the description of the Indictments set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Scranton Man Sentenced to Prison for Area RobberiesRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that U.S. District Court Judge Robert D. Mariani sentenced Frank McBride, age 29, of Scranton, to 110 months imprisonment. McBride pled guilty in March 2015 to bank robbery and attempted bank robbery, and Hobbs Act robbery (interference with commerce by threats or violence).
According to U.S. Attorney Peter Smith, the charges stemmed from an FBI investigation initiated in June of 2014 after a series of attempted bank robberies in Lackawanna County. A similar scheme was used in each attempted bank robbery and McBride was identified as the perpetrator after review of video surveillance from bank locations and analysis of cell phone records. Law enforcement later learned that McBride was responsible for robberies at gas stations/convenience stores in Scranton and Moosic.
In addition to the prison term, Judge Mariani also ordered that McBride be supervised by a probation officer for three years following his release from prison, and ordered him to make restitution in the amount of $9,829.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Michelle L. Olshefski.
# # #
Russian Agent Pleads Guilty to Leading Scheme to Illegally Export Controlled Technology to Russian MilitaryRead the Press Release
Alexander Fishenko, 49, of Houston, and a dual citizen of the United States and Russia, pleaded guilty today to acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export and illegally exporting controlled microelectronics to Russia, conspiring to launder money and obstruction of justice.
The plea was announced by Assistant Attorney General for National Security John P. Carlin and Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York.
“Alexander Fishenko illegally acted as an agent of the Russian government in the United States and evaded export laws by sending microelectronics and other technology with military applications to Russia,” said Assistant Attorney General Carlin. “By purposefully circumventing U.S. law, including the International Emergency Economic Powers Act and the Arms Export Control Act, the defendant jeopardized our national security. I would like to thank the many members of law enforcement whose tireless efforts led to this guilty plea.”
“Fishenko lined his pockets at the expense of our national security,” said Acting U.S. Attorney Currie. “This prosecution highlights the importance of vigorously enforcing United States export control laws.”
As alleged in the indictment and reflected in court filings, between approximately October 2008 and October 2012, Fishenko led a conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports. The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers and microprocessors. These commodities have applications in and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia does not produce many of these sophisticated goods domestically.
According to the indictment and other court filings, in 1998, Fishenko founded Arc Electronics Inc. (Arc), which was also indicted, in Houston. Between 2002 and the present, Arc has shipped approximately $50 million worth of microelectronics and other technologies to Russia. Fishenko also served as an executive of co-defendant Apex System L.L.C. (Apex) a Moscow-based procurement firm. Apex, working through subsidiaries, served as a certified supplier of military equipment for the Russian government. Fishenko exported many of these high-tech goods, frequently through intermediary procurement firms, to Russian end users, including Russian military and intelligence agencies. To induce manufacturers and suppliers to sell them these high-tech goods and to evade applicable export controls, Fishenko and his co-conspirators often provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters and falsely classified the goods they exported on export records submitted to the Department of Commerce. For example, Arc falsely claimed to be a traffic light manufacturer on its website. In fact, Arc manufactured no goods and operated exclusively as an exporter.
Despite this ploy, the investigation revealed that the defendants were supplying Russian government agencies with sophisticated microelectronics. For example, the investigation uncovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (FSB), Russia’s primary domestic intelligence agency, to an Apex affiliate regarding certain microchips that Arc obtained for the FSB. The letter stated that the microchips were faulty and demanded that the defendants supply replacement parts.
The guilty plea took place before U.S. District Judge Sterling Johnson Jr. of the Eastern District of New York. At sentencing, Fishenko faces up to 20 years in prison for each violation of the International Emergency Economic Powers Act and the Arms Export Control Act, up to 20 years in prison for money laundering conspiracy and obstruction of justice and up to 10 years in prison for acting as a Russian agent. The defendant will also face potential criminal forfeiture and fines.
Ten other individuals and two corporations were originally charged in October 2012. Four members of the conspiracy have pleaded guilty and three are scheduled to commence trial on Sept. 21, 2015.
The case is being investigated by the FBI and the Department of Commerce. The case is being prosecuted by Assistant U.S. Attorneys Daniel Silver, Una Dean, Richard Tucker and Claire Kedeshian of the Eastern District of New York, as well as Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.
Russian Agent Pleads Guilty to Leading Scheme to Illegally Export Controlled Technology to the Russian MilitaryRead the Press Release
Earlier today, Alexander Fishenko, a dual citizen of the United States and Russia, pled guilty at the federal courthouse in Brooklyn, New York, to all charges pending against him, including acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export, and illegally exporting, controlled microelectronics to Russia, conspiring to launder money, and obstruction of justice. Fishenko, ten other individuals, and two corporations were originally charged in October 2012. Four members of the conspiracy previously pled guilty, and three are scheduled to commence trial on September 21, 2015.[1]
The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and John P. Carlin, Assistant Attorney General for National Security.
“Fishenko lined his pockets at the expense of our national security,” stated Acting United States Attorney Currie. “This prosecution highlights the importance of vigorously enforcing United States export control laws.” Mr. Currie thanked the Federal Bureau of Investigation and the Department of Commerce for their leading roles in the investigation.
“Alexander Fishenko illegally acted as an agent of the Russian government in the United States and evaded export laws by sending microelectronics and other technology with military applications to Russia,” said Assistant Attorney General Carlin. “By purposefully circumventing U.S. law, including the International Emergency Economic Powers Act and the Arms Export Control Act, the defendant jeopardized our national security. I would like to thank the many members of law enforcement whose tireless efforts led to this guilty plea.”
As alleged in the indictment and reflected in court filings, between approximately October 2008 and October 2012, Fishenko led a conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports. The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers, and microprocessors. These commodities have applications, and are frequently used, in a wide range of military systems, including radar and surveillance systems, missile guidance systems, and detonation triggers. Russia does not produce many of these sophisticated goods domestically.
In 1998, Fishenko founded Arc Electronics, Inc. (Arc), which was also indicted, in Houston, Texas. Between 2002 and the present, Arc has shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. Fishenko also served as an executive of co-defendant Apex System, L.L.C. (Apex) a Moscow, Russia-based procurement firm. Apex, working through subsidiaries, served as a certified supplier of military equipment for the Russian government. Fishenko exported many of these high-tech goods, frequently through intermediary procurement firms, to Russian end users, including Russian military and intelligence agencies. To induce manufacturers and suppliers to sell them these high-tech goods, and to evade applicable export controls, Fishenko and his co-conspirators often provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce. For example, Arc falsely claimed to be a traffic light manufacturer on its website. In fact, Arc manufactured no goods and operated exclusively as an exporter.
Despite this subterfuge, the investigation revealed that the defendants were supplying Russian government agencies with sophisticated microelectronics. For example, the investigation uncovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (FSB), Russia’s primary domestic intelligence agency, to an Apex affiliate regarding certain microchips obtained for the FSB by Arc. The letter stated that the microchips were faulty and demanded that the defendants supply replacement parts.
Today’s proceeding took place before United States District Judge Sterling Johnson, Jr. When sentenced, Fishenko faces up to 20 years in prison for each violation of the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act (AECA), up to 20 years in prison for money laundering conspiracy and obstruction of justice, and up to 10 years in prison for acting as a Russian agent, as well as criminal forfeiture and fines.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Daniel Silver, Una Dean, Richard Tucker, and Claire Kedeshian, as well as Trial Attorney David Recker from the Department of Justice’s Counterintelligence and Export Control Section, are in charge of the prosecution.
The Defendant:
ALEXANDER FISHENKO
Age: 49
Houston, TexasE.D.N.Y. Docket No. 12 CR 626 (SJ)
[1] As to the defendants awaiting trial, the charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Rayville man sentenced to more than 9 years in prison for stealing motor vehiclesRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Rayville man was sentenced Tuesday to 110 months in prison for his role in a vehicle theft ring that stretched from Louisiana to Mississippi.
James Phillips, 63, of Rayville, La., was sentenced by U.S. District Judge Robert G. James on one count of interstate transportation of stolen motor vehicles. He was also sentenced to serve three years of supervised release and pay $443,500 restitution. According to the May 13, 2015 guilty plea, Phillips was apprehended on August 16, 2013 driving a recently stolen vehicle. After further investigation, Phillips was identified as a leader of an organization involving several conspirators who stole and disposed of more than 30 tractors, trailers and other motor vehicles from Louisiana and Mississippi with a value in excess of $850,000.
The two co-defendants were sentenced on August 12, 2015. Otis Frankenll, 61, of Delhi, La., was sentenced to 18 months in prison and three years of supervised release on one count of interstate transportation of stolen motor vehicles. Gary Hunter, 54, of Greenville, Miss., was sentenced to five years of probation on one count of interstate transportation of stolen goods. They were also ordered to pay $120,100 restitution.
The charges were the result of a joint investigation between the FBI and the West Carroll Parish Sheriff’s Office. Assistant U.S. Attorney Joseph G. Jarzabek prosecuted the case.
Queen City Dry Waller Pleads Guilty to Employment Tax ScamRead the Press Release
CONCORD, N.H. – Acting United States Attorney Donald Feith announced that today Cruz E. Galvan pleaded guilty to one count of Federal Employment Tax Evasion in connection with his scheme to dodge federal employment taxes on wages he paid to employees of his Manchester, N.H., dry wall business, Four Star Drywall, LLC. Galvan, age 39, resides in Manchester.
During his plea hearing, Galvan admitted that from April 2010 until December 2012, he paid the employees of Four Star Drywall with vouchers instead of with checks. He further admitted that he instructed those employees to present the vouchers to a local check cashing business to which he previously had provided funds and instructions to pay the vouchers upon presentment in cash. Galvan acknowledged that he did not report to the Internal Revenue Service the wages he paid in that fashion, thereby evading federal income tax withholding and Social Security, Medicare and federal unemployment taxes. The scheme resulted in a total tax loss of several hundred thousand dollars.
The United States District Court scheduled Galvan’s sentencing hearing for December 23, 2015. If the court accepts the parties’ joint sentencing recommendation, Galvan will be sentenced to a term of incarceration of eighteen months and required to pay restitution of approximately $670,000 to the Internal Revenue Service, including $100,000 before his sentencing.
“Individuals engaged in business who attempt to avoid their tax obligations as employers cause great harm to their employees and obtain an unfair advantage over their competitors who are complying with their obligations,” stated Acting U.S. Attorney Donald Feith. “We will continue to work with our federal law enforcement partners to identify, investigate and prosecute these individuals.”
The investigation of Galvan was led by the Manchester, N.H., offices of the Internal Revenue Service, the Department of Homeland Security and the Department of Labor, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Bill Morse.
Property Development Company Executive Sentenced to Nearly Three Years for Committing $1.2 Million in Bank FraudRead the Press Release
TULSA, Okla.—Bruce Carlton Wright, 69, of Norman, was sentenced Tuesday by United States District Court Chief Judge Gregory K. Frizzell to 33 months in prison for defrauding the IBC Bank of $1,176,490.60, announced United States Attorney Danny C. Williams Sr. of the Northern District of Oklahoma. As part of his sentence, a criminal forfeiture money judgment was entered against the defendant in the amount of $1,176,490.60.
From June 2007 to July 2008, Wright and his co-defendant, Robert Alan Blaksley, 51, of Owasso, conspired to submit fraudulent invoices to IBC Bank from his property development company for work that was not performed on a Bentonville, Arkansas property.
Wright and Blaksley were charged on August 13, 2014 with conspiracy and 11 counts of bank fraud. Wright was found guilty following an 8-day jury trial that ended on May 28, 2015, and Blaksley pleaded guilty on May 8, 2015.
The case was investigated by the FBI and Assistant United States Attorneys Joel-lyn A. McCormick and Catherine Depew prosecuted the case.
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Prison Guards Charged with Smuggling Contraband into Four Philadelphia PrisonsRead the Press Release
PHILADELPHIA – Separate indictments were unsealed today charging four current and two former correctional officers for the Philadelphia Prison System with attempting to deliver OxyContin pills and, in some cases, a cellular telephone to inmates in exchange for cash payments. Each defendant is charged, separately, with attempted extortion and attempted distribution of controlled substances, while one defendant (John Wesley Herder) is also charged with making false statements to law enforcement officers. The defendants, all of whom are from Philadelphia, are: John Wesley Herder, 49, employed at the Curran-Fromhold Correctional Facility (“CFCF”); Bryant Fields, 43, employed at The Detention Center; George Kindle, 29, employed at The House of Corrections; Marc Thompson, 23, formerly employed at The House of Corrections; Dupree Myers, 27, formerly employed at CFCF; and Joseph Romano, 31, previously employed at The Philadelphia Industrial Correctional Center (“PICC”) and currently employed at the Riverside Correctional Facility.
The indictments were announced today by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge William F. Sweeney, Jr., and Philadelphia Prisons Commissioner Louis Giorla. Each indictment charges a defendant with agreeing to deliver a cellular telephone and/or pills to a prisoner in exchange for a cash payment of between $500 and $1,500. To obtain the contraband and payment, each defendant arranged a meeting with the inmate’s purported associate at locations in Philadelphia. During the ensuing meeting, the inmate’s purported associate handed the contraband and cash payment to the defendant, and the defendant subsequently smuggled the contraband past prison security and delivered it to an inmate.
According to the indictment, defendant John Wesley Herder agreed to supply a CFCF prisoner with 100 OxyContin (oxycodone) pills and a cellular telephone in exchange for a $1,000 cash payment. On October 17, 2013, in Philadelphia, Herder met with Person #1 and Person #1 provided Herder with 100 pills, represented to contain OxyContin (oxycodone), a Nokia cellular telephone, and $1,000 in cash. During his meeting with Person #1, Herder allegedly stated, “Just tell [the inmate] to sit tight and I got it coming to him, ok.” On October 29, 2013, Herder allegedly provided the purported OxyContin pills and cellular telephone to the CFCF inmate. During an interview with federal law enforcement agents on June 18, 2015, Herder allegedly gave a false statement about bringing contraband into CFCF.
On or about October 11, 2013 and then again on November 15, 2013, defendant George Kindle is alleged to have delivered 100 pills, represented to contain OxyContin (oxycodone), and a cellular telephone to an inmate at The House of Corrections. In each instance, Kindle accepted a $1,000 cash payment in exchange for his agreement to deliver contraband to the inmate.
On or about September 16, 2013, defendant Marc Thompson is alleged to have delivered 100 pills, represented to contain OxyContin (oxycodone), and a Blackberry cellular telephone to an inmate at The House of Corrections in exchange for a $1,500 cash payment.
On or about March 10, 2014, defendant Bryant Fields is alleged to have delivered 50 pills, represented to contain OxyContin (oxycodone), to an inmate at The Detention Center in exchange for a $500 cash payment.
On or about July 29, 2014, defendant Joseph Romano is alleged to have delivered 100 pills, represented to contain OxyContin (oxycodone), to an inmate at PICC in exchange for a $1,000 cash payment.
Between December 22, 2014 and December 29, 2014, defendant Dupree Myers is alleged to have delivered at least 71 pills, represented to contain OxyContin, and an LG cellular telephone to an inmate at CFCF in exchange for a $1,000 cash payment.
“Prison safety depends on prison guards acting with honesty and integrity,” said Memeger. “Prison guards who violate security procedures by smuggling drugs and other contraband to inmates undermine that safety and make an inherently dangerous environment more dangerous.”
“Correctional officers willing to sell their services are not only violating their oath, but they are deliberately choosing to place their colleagues and the very public they are charged with protecting into harm’s way,“ said Sweeney. “Commissioner Giorla and his team should be commended for the leadership they displayed in working to address a threat they identified. The FBI’s public corruption task force will continue to work with our partners to aggressively investigate allegations of corruption, especially those that impact the safety of the public.”
“It is regrettable that sworn staff, who have an obligation to provide a lawful and secure environment in our jails, chose to offer their badges for sale and pervert their authority for personal gain,” said Giorla. “When any corrections employee engages in corrupt activity, they endanger their colleagues, those in custody, and the public. These indictments are the result of a lengthy and thorough investigation sought by the Philadelphia Prisons to address a growing number of contraband seizures in our jails. We hope the message is clear: the Philadelphia Prison System will have no place for staff memebers who use the power of their position to engage in criminal acts.”
If convicted, defendants Thompson, Fields, Romano, and Myers face a statutory maximum sentence of 40 years in prison; defendant Herder faces a statutory maximum sentence of 45 years in prison; defendant Kindle faces a statutory maximum sentence of 80 years in prison. Each defendant also faces possible fines, supervised release, and special assessments.
The case was investigated by the FBI and the Philadelphia Department of Corrections with assistance from the Philadelphia Police Department’s Prison Intelligence Group. It is being prosecuted by Assistant United States Attorney Kevin Brenner.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
President of Office Equipment Leasing Company Arrested for Engaging in Multi-Million Dollar Fraud SchemeRead the Press Release
Michael Conway, the President of Choice Office Solutions LLC (Choice Office), was arrested earlier today on charges of wire fraud and aggravated identity theft in connection with a scheme where he forged lease agreements to defraud an individual investor and De Lage Landen Financial Solutions Partner (DLLFSP) of approximately $3.5 million. Earlier today, FBI agents also executed a search of Choice Office’s offices in Fairfield, New Jersey. The defendant’s initial appearance is scheduled for this afternoon before United States Magistrate Judge Cheryl L. Pollak at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges and arrest were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“As charged in the criminal complaint, Conway claimed to have lucrative contracts to lease office equipment with more than 50 companies, including law firms, universities, and a major league baseball franchise, and relied on these lease contracts to obtain financing. In reality, the only one making money on these phony lease agreements was the defendant himself,” stated Acting United States Attorney Currie.
“Crime does not need to be violent to have a devastating impact on society. White collar crimes, like the ones alleged herein, can reach more victims and have a disparate impact on the most vulnerable persons and businesses. Fraud disguises itself as legitimate and true, while abusing trust and eroding faith in fair and honest dealings. The FBI will continue to investigate lack of integrity leading to criminal activities in order to protect the community from such harm,” stated FBI Assistant Director-in-Charge Rodriguez.
According to the complaint unsealed this morning in Brooklyn federal court, from approximately March 2014 to August 2015, Conway forged lease agreements with various companies in the business of leasing office equipment, and then used these fraudulent agreements to obtain financing from private investors. As part of the scheme, Conway induced an individual investor to become partners with him in the leasing business. Conway would then purportedly secure a lease from a company, present the signed lease and invoices to the individual investor, who would provide funds to purchase the office equipment to be leased. In this manner, Conway presented the individual investor with leases from approximately 58 companies, including law firms, universities, hospitals, and hotels, and the individual investor paid Conway approximately $3.1 million to purchase office equipment. In reality, most of the leasing agreements that Conway provided to the individual investor were fraudulent, and Conway pocketed most of the individual investor’s money.
One of the fraudulent leasing agreements was purportedly with the New York Mets. Relying on it, the individual investor wire transferred approximately $500,000 to Conway’s bank account ostensibly to purchase office equipment. Conway then used the same forged lease agreement, and a forged authorization letter from the New York Mets purportedly signed by Jeffrey Wilpon, the team’s Chief Operating Officer, to obtain financing from DLLFSP. Based on these fraudulent documents, DLLFSP wire transferred a total of approximately $313,000 to Conway’s bank account.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Conway faces a mandatory minimum sentence of two years imprisonment and a maximum sentence of 22 years.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Winston Paes and Celia Cohen are in charge of the prosecution.
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 ww.StopFraud.gov.
The Defendant:
MICHAEL CONWAY
Age: 39
Verona, New JerseyPittsburgh Man Pleads Guilty to Trafficking HeroinRead the Press Release
PITTSBURGH – Kevin Livsey, of Pittsburgh, pled guilty to heroin trafficking charges, United States Attorney David J. Hickton announced today.
Livsey, 28, pled guilty to distributing heroin on June 24, 2014, and again on July 3, 2014. As of those dates, Livsey had already been convicted of drug trafficking in a case prosecuted in the Allegheny County Court of Common Pleas. United States District Court Judge Nora Barry Fischer scheduled sentencing to occur on Jan. 22, 2016, at 9 a.m.
The law provides for a maximum total sentence of up to 20 years in prison and a $1,000,000 fine. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Drug Enforcement Administration and the Bureau of Pittsburgh Police led the multi-agency investigation of this case that also included the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Department of Homeland Security/Homeland Security Investigations, the United States Marshals Service, the Pennsylvania State Police, the Scott Township Police Department, the Munhall Police Department, the Baldwin Police Department, and the Pleasant Hills Police Department. The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Philadelphia Woman Sentenced for Stealing Dead Husband's BenefitsRead the Press Release
PHILADELPHIA - Shirley Goldwire, 68, of Philadelphia, Pennsylvania, was sentenced today to 18 months in prison for two counts of theft of government funds and was ordered to pay $264,021 in restitution to the government. She pleaded guilty on April 20, 2015 to two counts of conversion of government funds.
From 1998 through 2012, Goldwire stole retirement benefits intended for her husband by forging his name on checks tied to his bank account and by creating a false power of attorney over her dead husband’s affairs. In addition, the defendant stole benefits intended for a friend of her ex-husband, who was also deceased. The defendant obtained this money by using a debit card tied to the account.
The Social Security Administration discovered the defendant’s fraud through its Centenarian Project, a project in which Social Security field office employees attempt personal contact with beneficiaries, who are at or around 100 years of age, to verify that they are alive and receiving their benefits. When the Social Security Administration began investigating whether Goldwire’s husband was alive, the defendant lied. She also had her son impersonate her dead husband via a phone call to a Social Security employee on two separate occasions. The defendant’s actions resulted in a loss to the government of $264,021.
The case was investigated by the Social Security Administration Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
Pennsylvania Man Sentenced to Prison Term for His Role in Fraudulent U.S. Treasury Check SchemeRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that Chief U.S. District Judge Brian A. Jackson has sentenced ALBELK REYES SERRATA, also known as Alberto Reyes, age 26, of Philadelphia, Pennsylvania, to thirty-seven (37) months in federal prison for his role in a conspiracy that involved the cashing of more than $2.2 million in fraudulently-obtained U.S. Treasury checks during 2012 and 2013. Following his release from imprisonment, REYES will be required to serve a 3-year term of supervised release. REYES was also ordered to make restitution in the amount of $2.2 million, to forfeit an additional $220,000 as proceeds from his criminal conduct, and to pay a $100 special assessment.
On May 28, 2015, SERRATA had appeared in Court and pled guilty to participating in a conspiracy to steal government funds, in violation of Title 18, United States Code, Section 371. In connection with his plea, SERRATA admitted that throughout 2012 and 2013, he participated in a scheme to obtain more than 350 fraudulent United States Treasury checks and have them cashed by a co-conspirator in Baton Rouge.
SERRATA’s sentencing is part of a broader investigation of check cashing businesses in Baton Rouge that are alleged to have obtained and cashed millions of dollars in fraudulently-obtained U.S. Treasury checks during 2012 and 2013. To date, the investigation has also resulted in the following prosecutions:
- In one case, ANYELINA REYES, age 36, of Baton Rouge, Louisiana, has been charged with conspiracy to steal government funds, in violation of Title 18, United States Code, Section 371. As REYES has acknowledged, she operated a store on Florida Boulevard called “A&R Elite Team, LLC,” and, after opening a bank account for her store, she agreed to help SERRATA and others facilitate their scheme by cashing checks they sent to her. From April 2012 through April 2013, REYES deposited approximately 370 fraudulently-obtained Treasury checks into her business account, with such checks having a total face value of approximately $2.2 million. On November 20, 2014, REYES appeared before Chief Judge Jackson and pled guilty. She is currently awaiting sentencing.
- In another case, CARLOS L. LINARES, age 55, of Baton Rouge, has been charged in a Superseding Indictment with theft of government funds, in violation of Title 18, United States Code, Section 641, failure to maintain an effective anti-money laundering program, in violation of Title 31, United States Code, Sections 5318 and 5322, and two counts of obstruction of a federal proceeding, in violation of Title 18, United States Code, Section 1505. The Superseding Indictment alleges that LINARES operated a store on Florida Boulevard called “Latinos Supermarket, LLC,” and that he cashed more than 250 U.S. Treasury checks that had been obtained through fraud. The Superseding Indictment further alleges that LINARES knowingly failed to take basic steps to maintan an effective anti-money laundering program at his store, which, as LINARES knew, was required by the Bank Secrecy Act. In 2010 and again in 2013, as the Internal Revenue Service attempted to determine whether LINARES was following the law, LINARES is alleged to have obstructed and impeded the exams. LINARES has entered pleas of not guilty to the charges contained in the Superseding Indictment, and is scheduled for trial next month.
U.S. Attorney Green stated: “Mr. Serrata’s sentence confirms that identity theft and crimes involving stolen U.S. Treasury checks are very serious. Those involved in schemes such as this one – which cost the United States Treasury millions of taxpayer dollars – will be investigated and prosecuted, and if convicted, they will face severe consequences.”
Jerome R. McDuffie, IRS-CI Special Agent-in-Charge, stated, “IRS Criminal Investigation is determined to stop false tax refund schemes and we will vigorously pursue all those who participate in identity theft crimes and launder the proceeds. The sentencing today of Mr. Reyes Serrata confirms that participation in these schemes does not pay, and those who do so will be investigated and prosecuted. IRS Criminal Investigation will continue to aggressively work with the U.S. Attorney’s Office to protect innocent taxpayers’ sensitive information and maintain the public’s trust.”
This ongoing investigation is being handled by the Internal Revenue Service—Criminal Investigation Division, with valuable assistance from the Louisiana Office of Financial Institutions and the United States Postal Inspection Service, among other agencies. The matter is being prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as a Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Ryan Crosswell.
NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Palmer Man Sentenced to 84 Months for Drug Trafficking & Firearms OffensesRead the Press Release
Anchorage, Alaska - Acting U.S. Attorney Kevin R. Feldis announced today that a Palmer man has been sentenced by United States District Court Judge Timothy M. Burgess to serve 84 months in prison for distributing methamphetamine while in possession of two firearms.
Corry William Dawson, 41, of Palmer, Alaska, previously pled guilty two felonies – 1) possession of methamphetamine with the intent to distribute it; and 2) possession of firearms in furtherance of a drug trafficking crime. Following his release from prison, Dawson will remain on supervised release for a period of five years.
According to Assistant U.S. Attorney Stephanie C. Courter, who prosecuted the case, in August 2014, Dawson was contacted by members of the Alaska State Troopers while in his vehicle outside a Palmer residence. When troopers asked Dawson to step out of his vehicle, they discovered a .40 caliber pistol inside the pocket of the driver’s side door. Dawson had stored an addition firearm – a .223 caliber rifle – elsewhere in the truck. In addition to the guns, Dawson also possessed two baggies of methamphetamine, two digital scales, a drug ledger, cash, and other items indicia of drug trafficking.
When questioned about the items in his truck, Dawson admitted that the methamphetamine and the guns were his and that he was prohibited from possessing the guns due to his prior felony conviction. He also admitted to law enforcement that he kept the firearms because there was always a chance that he could be robbed while selling methamphetamine.
During the sentencing hearing, Judge Burgess described Dawson’s crimes as extremely serious in nature, noting that possessing guns while being involved in drug trafficking is an “inherently dangerous” combination. Burgess went on to comment that adding guns to a drug crime is nothing short of a “prescription for disaster.”
In announcing the sentence, Feldis commended the efforts of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Alaska State Troopers (AST), who investigated the case.
Owner of Dietary Supplement Company Sentenced to Prison for Multimillion-Dollar Scheme to Adulterate Dietary SupplementsRead the Press Release
Company’s Executive Vice President Pleads Guilty to Obstruction of an Agency Investigation
The owner and president of a dietary supplement manufacturing company in Flanders, New Jersey, was sentenced to prison today for the sale of diluted and adulterated dietary ingredients and supplements, the Department of Justice announced.
Barry Steinlight, 70, of Hackettstown, New Jersey, was sentenced by U.S. District Court Judge Esther Salas of the District of New Jersey to serve 40 months in prison and one year of supervised release. Steinlight was also ordered to forfeit $1 million in profits from his fraudulent scheme. Steinlight previously pleaded guilty to a one-count information charging him with conspiring to commit wire fraud.
“The Justice Department has increased its attention on supplement sellers like Barry Steinlight who sell products that are not what they claim to be,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will investigate and prosecute companies and individuals that sell supplements that threaten the health of the American public and drain their bank accounts with misrepresented products.”
Steinlight was the president and owner of Raw Deal Inc., a dietary supplement manufacturer. In pleading guilty, Steinlight admitted that from at least 2009 through November 2013, he instructed Raw Deal employees to add “fillers,” including maltodextrin, viobin cocoa replacer and rice flours, to the dietary ingredients and supplements sold to customers. These “fillers” were added without customer consent or knowledge. Steinlight also directed Raw Deal employees not to list the “fillers” as ingredients on certificates of analysis issued to its customers as proof of the identity of the ingredients contained in the products. During his plea hearing, Steinlight admitted that Raw Deal Inc.’s gross profits during the scheme were between $7 million and $20 million.
Yesterday, Raw Deal’s executive vice president, Catherine Palmer, 38, of Budd Lake, New Jersey, pleaded guilty to a one-count information charging her with obstructing an agency investigation. The obstruction charge carries a statutory maximum sentence of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Her sentencing is scheduled for Dec. 21.
According to court documents, Palmer lied to U.S. Food and Drug Administration (FDA) investigators and ordered a subordinate to falsify a dietary supplement product’s ingredient list before submitting it to the FDA. In addition, she admitted instructing a Raw Deal employee not to run blenders during the 2012 inspection so that the FDA would not see “fillers” being added to customer orders. This practice hid from the FDA the fact that Steinlight and Raw Deal diluted the products before sale to unsuspecting customers.
Court documents also revealed that Steinlight directed Raw Deal employees to create certificates of authenticity that falsely claimed that certain Raw Deal products were kosher or organic.
“Consumers expect labels that accurately describe the products they ingest,” said U.S. Attorney Paul J. Fishman of the District of New Jersey. “Steinlight deceived his customers as part of a four-year scheme in which he delivered bogus, mislabeled products. Today he was appropriately punished for his crime.”
“Today’s announcement demonstrates that those who sell adulterated dietary supplements and purposely subvert the regulatory functions of the FDA by providing false and misleading information will be held accountable for their actions,” said Acting Special Agent in Charge Jeffrey J. Ebersole of the FDA Office of Criminal Investigations’ New York Field Office. “We commend the efforts of the Department of Justice for vigorously pursuing the prosecution of this matter.”
Principal Deputy Assistant Attorney General Mizer and U.S. Attorney Fishman commended the investigative efforts of the FDA’s Office of Criminal Investigations. The government is represented by Assistant U.S. Attorney Joseph Mack of the District of New Jersey, Deputy Chief of the office’s Health Care and Government Fraud Unit; Special Assistant U.S. Attorney Shannon M. Singleton of the FDA’s Office of Chief Counsel; and Trial Attorneys Patrick Runkle and David Sullivan of the Civil Division’s Consumer Protection Branch. Paralegal Jeffrey Skonieczny of the District of New Jersey also assisted in the criminal investigation.
Owner of Dietary Supplement Company Sentenced to 40 Months in Prison for Multimillion-Dollar Scheme to Adulterate Dietary SupplementsRead the Press Release
NEWARK, N.J. – The owner and president of a dietary supplement manufacturing company in Flanders, New Jersey, was sentenced today to 40 months in prison for directing the sale of diluted and adulterated dietary ingredients and supplements sold by his company, U.S. Attorney Paul J. Fishman announced.
Barry Steinlight, 70, of Hackettstown, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to a one-count information charging him with conspiring to commit wire fraud. Judge Salas imposed the sentence today in Newark federal court.
“Consumers expect labels that accurately describe the products they ingest,” U.S. Attorney Fishman said. “Steinlight deceived his customers as part of a four-year scheme in which he delivered bogus, mislabeled products. Today he was appropriately punished for his crime.”
“The Justice Department has increased its attention on supplement sellers like Barry Steinlight who sell products that are not what they claim to be,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will investigate and prosecute companies and individuals that sell supplements that threaten the health of the American public and drain their bank accounts with misrepresented products.”
“Today’s announcement demonstrates that those who sell adulterated dietary supplements and purposely subvert the regulatory functions of the FDA by providing false and misleading information will be held accountable for their actions,” stated Jeffrey J. Ebersole, Acting Special Agent in Charge, FDA Office of Criminal Investigations’ New York Field Office. “We commend the efforts of the Department of Justice for vigorously pursuing the prosecution of this matter.”
According to documents filed in this case and statements made in court:
Steinlight was the president and owner of Raw Deal Inc., a dietary supplement manufacturing facility. From at least 2009 through November 2013, Steinlight instructed Raw Deal employees to add “fillers,” including maltodextrin, viobin cocoa replacer and rice flours to the dietary ingredients and supplements packaged for, and sold to, Raw Deal’s customers. These “fillers” were added without customer consent or knowledge. Steinlight also directed Raw Deal employees not to list the “fillers” as ingredients on the certificates of analysis (COAs) issued to its customers as proof of the identity of the ingredients contained in the products.
In addition to directing the dilution and adulteration of Raw Deal’s products, Steinlight also directed Raw Deal employees to create COAs that falsely certified that certain of Raw Deal’s products were kosher or organic. Also, during an FDA inspection of Raw Deal in February 2012, Steinlight instructed employees to alter a document before providing it to the FDA.
Raw Deal’s executive vice president, Catherine Palmer, 38, of Budd Lake, New Jersey, admitted that during the 2012 FDA inspection, she ordered a subordinate to falsify an ingredient list of a dietary supplement product before submitting it to the FDA. In addition, she admitted instructing a Raw Deal employee not to run blenders during the 2012 inspection so that the FDA would not see “fillers” being added to customer orders.
In addition to the prison term, Judge Salas sentenced Steinlight to one year of supervised release. During his plea hearing, Steinlight admitted that Raw Deal’s gross profits during the scheme were between $7 million and $20 million. As part of his plea agreement, Steinlight must forfeit $1,036,834 in profits from the scheme.
Palmer pleaded guilty yesterday to a one-count information charging her with obstructing an FDA investigation. The obstruction charge carries a maximum potential sentence of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Her sentencing is scheduled for Dec. 21, 2015.
The government is represented by Assistant U.S. Attorney Joseph Mack, Deputy Chief of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit, Special Assistant U.S. Attorney Shannon M. Singleton from the FDA’s Office of Chief Counsel, and Trial Attorneys Patrick Runkle and David Sullivan of the Civil Division’s Consumer Protection Branch.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office for the District of New Jersey shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.