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4 September 2015
Doctors Convicted in $2.5 Million Health Care Fraud SchemeRead the Press Release
Greenbelt, Maryland - A federal jury convicted two doctors, Paramjit Singh Ajrawat, age 60, and his wife, Sukhveen Kaur Ajrawat, age 57, both of Potomac, Maryland, on charges related to their health care fraud scheme. Paramjit Singh Ajrawat was convicted of one count of health care fraud, two counts of making a false statement related to a health care program, one count of obstruction of justice, four counts of wire fraud, and one count of aggravated identity theft. Sukhveen Kaur Ajrawat was convicted of one count of health care fraud, four counts of making a false statement related to a health care program, one count of obstruction of justice, four counts of obstructing an audit, four counts of wire fraud, and two counts of aggravated identity theft. The convictions are in connection with the pain clinic they owned and operated.
The convictions were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Drew Grimm, Office of Personnel Management, Office of Inspector General; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General.
P. Ajrawat was a licensed physician in Maryland who specialized in interventional pain management. S. Ajrawat was a licensed psychiatrist in Maryland. The Ajrawats owned and operated Washington Pain Management Center (WPMC) located in Greenbelt.
According to evidence presented at the eight day trial, from at least January 2011 through May 2014, the Ajrawats defrauded federal health benefit programs including: Medicare, Medicaid, TRICARE, Federal Employees Health Benefits Program and the Office of Workers’ Compensation Programs. The Ajrawats filed claims for procedures that were not performed. Specifically, the Ajrawats performed less expensive procedures but falsely billed for procedures that provided higher reimbursement amounts. The Ajrawats also submitted claims indicating that they had met the requirements for reimbursement, when in fact, they had not met those requirements. Finally, the Ajrawats submitted claims for procedures that had not been performed at all.
For example, the Ajrawats submitted claims that P. Ajrawat had performed nerve block injections with the use of an imaging guidance machine, when in fact he neither owned nor used such a machine. The Ajrawats also falsely documented patient files to indicate that an imaging guidance machine had been used to verify needle placement and caused the alteration or destruction of patient files to conceal the scheme from auditors and law enforcement.
The government seeks forfeiture of at least $2.5 million, the proceeds of the scheme.
The defendants face a maximum sentence of 10 years in prison for each count of health care fraud, five years in prison for each count of making a false statement related to a health care program; and 20 years in prison for each count of obstruction of justice and each count of wire fraud. Additionally, S. Ajrawat faces five years in prison for each count of obstructing a federal audit. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for February 1, 2016 at 9:30 a.m.
United States Attorney Rod J. Rosenstein praised DCIS, HHS-Office of Inspector General, OPM-Office of Inspector General, FBI, U.S. Department of Labor-Office of Inspector General, and the U.S. Postal Service-Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Kelly O. Hayes and Mara Zusman Greenberg, who are prosecuting the case.
Denver Man Sentenced for Taking His Deceased Mother's Government BenefitsRead the Press Release
DENVER – Ernie Atchley, a 73 year old Denver resident, was sentenced to serve 15 months in federal prison, followed by 3 years of supervised release after previously pleading guilty to failure to disclose an event affecting entitlement to Social Security benefits, the U.S. Attorney’s Office and the Social Security Administration Office of the Inspector General announced. The defendant was also ordered to pay restitution of $465,349.13 to the Social Security Administration as well as two state government entities in California. The sentence was pronounced by U.S. District Court Judge Wiley Y. Daniel.
Atchley was indicted by a federal grand jury on October 8, 2014. He pled guilty before Judge Daniel on March 17, 2015 and was sentenced on August 19, 2015.
According to court documents, including the stipulated facts contained in the defendant’s plea agreement, Atchley’s mother was receiving Social Security survivor’s benefits when she died on July 21, 2001. Although her entitlement to these benefits terminated at her death, monthly benefit payments continued to be made into her bank account through August 2012. At the time she died, the defendant’s mother was receiving $897 per month in Social Security benefits. By 2012, that had increased to $1277 a month. By the time the payments terminated, $151,526 worth of benefits had been overpaid into the account.
Atchley’s mother had also been receiving retirement benefits from the California Public Employees’ Retirement System (CalPERS) and the Los Angeles County Employees’ Retirement Association (LACERA). These payments, too, erroneously continued after her death. LACERA payments continued through March 2013. CalPERS payments continued through June 2013. At the time of death, LACERA was paying $706.24 per month and CalPERS was paying $1126.72 a month. Those amounts increased over time. LACERA’s final payment (in March 2013) was $1017.57. CalPERS’ final payment (in June 2013) was $1503.94. Altogether, LACERA paid $114,492.12 after death. CalPERS paid $203,178.94 after death.
Prior to his mother’s death, the defendant was appointed in state court to be her conservator. All of the payments Atchley received after his mother’s death went into a bank account held by him jointly with a relative whom had no knowledge of the fraud.
Shortly after her death, Atchley began illegally taking money from the account. He would write checks for “medical supplies” or “medical services” to a relative with whom he held a joint account. Defendant would then forge that relative’s endorsement on the check and deposit it into that joint account. From there, he would use the funds to pay various bills—primarily credit cards, but also phone and energy bills.
“Concealing the death of a loved one in order to steal their Social Security benefits is reprehensible,” said Wilbert Craig, Special Agent in Charge of the Social Security Administration’s Office of the Inspector General. “The Social Security Administration’s (SSA) Office of the Inspector General (OIG), in partnership the United States Attorney’s Office, will continue to vigorously respond to allegations of fraud against the SSA and its beneficiaries.”
This case was investigated by the Social Security Administration Office of the Inspector General. The defendant was prosecuted by Special Assistant U.S. Attorney Daniel Burrows.
David Anthony Shoemaker Sentenced to 120 Months in Prison on Federal Child Pornography ChargesRead the Press Release
KNOXVILLE, Tenn.- On August 31, 2015, David Anthony Shoemaker, 29, of Knoxville, Tenn., was sentenced by the Honorable Pamela R. Reeves, U.S. District Judge, to serve 120 months in prison for receiving child pornography. Following his release from prison, Johnson will be supervised by the U.S. Probation Office for a term of 15 years and will be required to register with the sex offender registry in any state in which he resides, works, or attends school.
Shoemaker pleaded guilty in April 2015 to a federal charge stemming from his use of peer-to-peer computer file sharing software to obtain child pornography via the internet. A search warrant for Johnson’s computers revealed that he had had saved a large cache of child pornography to his computers via the use of search terms designed to find depictions of sexual abuse of minors. The Court found that Shoemaker had also distributed child pornography via the peer-to-peer software.
This investigation was conducted by the Knoxville Police Department Internet Crimes Against Children Task Force and U.S. Homeland Security Investigations. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Dade City Gang Member Sentenced to More Than 11 Years in Federal PrisonRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington has sentenced Domingo Zamora (47, Dade City) to 11 years and 6 months in federal prison on drug conspiracy charges. He pleaded guilty on November 21, 2014.
According to court documents, Zamora, a previously convicted felon who was affiliated with a Dade City street gang, sold large amounts of methamphetamine to undercover ATF agents and brokered drug deals between the agents and other sources of supply. He also sold a firearm to an agent on at least one occasion during a drug transaction.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted by Assistant United States Attorney Stacie B. Harris.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Regina Lombardo, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violence in communities.
Controlled Substance User Sentenced to Prison for FirearmRead the Press Release
Kareem Pollard, 28, of Granite City, Illinois, was sentenced today in the United States District Court to 3 years in prison for two counts of Unlawful User of a Controlled Substance in Possession of a Firearm, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, has announced. Pollard will also be on federal supervised release for 2 years following his term of imprisonment. Pollard has been in custody since his arrest on March 26, 2015.
Court documents establish that on May 13, 2014, Pollard was seen walking into a convenience store in Madison, Illinois with a gun in the pocket of his sweatshirt. Law enforcement officers stopped him while he was walking away from the store and located a Rohm .22 caliber revolver in his pocket. When Pollard was interviewed by Madison officers, he admitted to being in possession of the firearm and admitted that he has been addicted to heroin for approximately four years. Then, between December 2, 2014 and January 2, 2015, the Metropolitan Enforcement Group of Southwestern Illinois (MEGSI) caught Pollard selling small amounts of heroin on four separate occasions. During a subsequent search of his residence, a Taurus Judge Revolver was found in Pollard’s bedroom.
The investigation was conducted by the Madison Police Department and the Metropolitan Enforcement Group of Southwestern Illinois (MEGSI). The case was prosecuted by Assistant United States Attorney Ali Summers and Special Assistant United States Attorney Vanessa Lu.
Burlington Man Sentenced for Child Pornography OffenseRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Malcolm Lewis, 38, of Burlington, Vermont, was sentenced on September 3, 2015, in United States District Court in Burlington, Vermont, to serve 106 months incarceration and a 10 year period of supervised release following his conviction on one count of distribution of child pornography, in violation of 18 U.S.C. § 2252(a)(2). Chief U.S. District Judge Christina Reiss also ordered Lewis to pay a $100 special assessment.
According to court records and proceedings, on May 1, 2014, a law enforcement officer was conducting undercover operations on the Ares file-sharing network. The officer observed that a computer using a particular Internet Protocol (IP) address was offering to share videos and still images of child pornography. The officer downloaded three video files from the user of the IP address. These video files depicted small children engaged in sexual activity with adult men, including sadistic and masochistic conduct. Law enforcement traced the IP address to a Burlington address, and obtained a warrant to search the location. Lewis lived at that location and during an interview with law enforcement, he admitted that he downloaded and collected videos and still images he knew to depict child pornography. During a forensic examination of Lewis’ computer, it was discovered that Lewis had more than 2,300 images and 100 videos depicting child pornography. Lewis personally produced approximately 21 of the videos depicting child pornography.
"Few things are more disturbing, heartbreaking, or upsetting to hear than that a child has been harmed by someone who is close to the family," said Matthew Etre, special agent in charge of Homeland Security Investigations (HIS) Boston. "HSI is committed to bringing these predators to justice, and protecting those who shouldn't have to protect themselves."
United States Attorney Eric S. Miller commended HSI’s efforts in the investigation and prosecution of Lewis. The prosecution of Lewis was handled by Assistant U.S. Attorney Barbara A. Masterson. Lewis was represented by David L. McColgin.
U.S. Attorney Miller noted that this prosecution is part of the U.S. Department of Justice's 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.
Brevard County Man Sentenced for Receiving and Possessing Child PornographyRead the Press Release
Orlando, Florida – U.S. District Judge Roy B. Dalton, Jr. has sentenced Billie Jay Rufrano (31, Titusville) to 10 years and 1 month in federal prison for receiving and possessing child pornography. He was also ordered to pay restitution to two victims.
Rufrano was indicted on January 14, 2015, and he pleaded guilty on April 28, 2015.
According to court documents, on October 3, 2014, a state search warrant was executed at Rufrano’s residence and several computers were seized. Forensic analyses of the computer media subsequently revealed 223 movies and 114 images depicting child pornography.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Armed Bank Robber Sentenced to 211 Months ImprisonmentRead the Press Release
OXFORD, Miss. - Felicia C. Adams, United States Attorney for the Northern District of Mississippi, and Special Agent in Charge Donald Alway, Federal Bureau of Investigation, announced that Cordette Lindell Mottley, 28, of Como, Mississippi, was sentenced yesterday by United States District Judge Michael P. Mills in Oxford, Mississippi, to 211 months imprisonment followed by 3 years of supervised release, restitution in the amount of $1200 and a special assessment of $100.
Mottley, a career offender, previously pled guilty on May 12, 2015, to the armed robbery of First Security Bank, Como, Mississippi, in violation of 18 U. S. C. Sections 2113(a) and (d). Mottley was remanded to the custody of the U. S. Marshal Service pending designation by the Federal Bureau of Prisons.
This case was investigated by the Federal Bureau of Investigation and the Panola County Sheriff’s Office and was prosecuted by the United States Attorney’s Office for the Northern District of Mississippi.
Albuquerque Man Pleads Guilty to Narcotics Trafficking and Firearms Charges Arising Out of Armed Robberies of Two Retail Pharmacies in January and June 2015Read the Press Release
ALBUQUERQUE – Blake Gallardo, 22, of Albuquerque, N.M., pleaded guilty this morning in federal court to narcotics trafficking and firearms charges arising out of the armed robberies of two Albuquerque-area retail pharmacies in Jan. 2015. Under the terms of his plea agreement, Gallardo will be sentenced to a prison term within the range of 15 to 20 years.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, Chief Gorden Eden, Jr., of the Albuquerque Police Department, Chief Pete N. Kassetas of the New Mexico State Police.
Gallardo was one of six defendants charged in four indictments that were announced by federal and local officials on April 29, 2015. The indictments alleged that the six defendants robbed retail pharmacies in Albuquerque to illegally obtain Oxycodone and other highly addictive opioid painkillers. The four indictments charged Gallardo, his co-defendant Josephine Duran, 23, and four other Albuquerque residents with crimes arising out of the armed robberies of retail pharmacies, including violations of the Controlled Substance Registrant Protection Act and the Safe Doses Act, laws passed to address the theft and diversion of prescription drugs.
At the time the indictments were announced, Gallardo and Duran had not been arrested and were considered fugitives. Thereafter, Duran was arrested on May 22, 2015, and Gallardo was arrested on June 11, 2015.
Gallardo and Duran were charged in Indictment 15-CR-1504 with (1) violating the Hobbs Act by interfering with interstate commerce by robbery and violence; (2) brandishing a firearm during a crime of violence; (3) violating the Controlled Substance Registrant Act by robbery involving controlled substance; (4) violating the Safe Doses Act by theft of medical products; and (5) possession of Oxycodone with intent to distribute. These charges arose out of the armed robbery of a Walgreens Pharmacy located at 6565 Paradise Blvd. NW in Albuquerque on Jan. 30, 2015.
Today Gallardo entered a guilty plea to Counts 1, 2, 3 and 5 of the indictment, charges arising out of the Jan. 30, 2015 robbery of the Walgreens Pharmacy on Paradise Blvd. He also pleaded guilty to a felony information charging him with robbery involving controlled substance, a charge arising out of the June 6, 2015 robbery of a Walgreens Pharmacy located at 1201 Unser Blvd. NW in Albuquerque.
In his plea agreement, Gallardo admitted robbing both Walgreens Pharmacies at gunpoint. With respect to the Jan. 30, 2015 robbery, Gallardo entered the pharmacy, jumped over the pharmacy counter while brandishing a firearm, and ordered the pharmacist to open a locker in which controlled substances were stored. Gallardo pointed his firearm at the pharmacist, took her keys, opened the locker, and filled a bag with oxycodone. Gallardo and his co-defendant were arrested on state charges shortly after the robbery.
With respect to the June 6, 2015 robbery, the plea agreement states that Gallardo was armed with a firearm when he entered the pharmacy and jumped over on the pharmacy counter. He grabbed two pharmacy employees and directed them to the pharmacy’s controlled substance locker. Gallardo took several bottles of oxycodone from the locker and ran out of the pharmacy.
Gallardo has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has not yet been scheduled. His co-defendant, Josephine Duran, has entered a not guilty plea to the indictment. She remains in federal custody pending trial.
With respect to the four defendants who are charged in three other pharmacy robbery cases, three have entered not guilty pleas and are detained pending trial. The fourth has entered a guilty plea.
On July 1, 2015, Victor Hurtado, 20, pled guilty to felony charges arising out of the Jan.6, 2015 armed robbery of the Smith’s Pharmacy located at 4016 Louisiana Blvd. NE in Albuquerque. Under the terms of his plea agreement, Hurtado will be sentenced to a prison term within the range of ten to 18 years. He remains in federal custody pending his sentencing hearing, which is scheduled for Oct. 1, 2015.
Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
These cases were investigated by the Albuquerque office of the FBI, the Tactical Diversion Squad of the DEA in Albuquerque, and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office in Bernalillo County. The cases are being prosecuted by Assistant U.S. Attorneys Joel R. Meyers and Shaheen P. Torgoley.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
These cases are being prosecuted pursuant to a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
The cases also are being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
The Controlled Substance Registrant Protection Act was enacted in 1984, to combat the theft of prescription drugs from individuals and businesses registered with the DEA. It created penalties for entering a pharmacy’s premises for the purpose of stealing controlled substances, and includes enhanced punishment for using a dangerous weapon. The Safe Doses Act was enacted in Oct. 2012, to fight medical theft and protect patients from unknowingly using stolen and mishandled drugs. It provides for enhanced sentences for those who rob pharmacies of controlled substances; individuals who steal medical products; and “fences” who knowingly obtain stolen medical products for resale in the supply chain.
Administrator of Chicago-Area Home Visiting Physician Practice Sentenced to More Than Seven Years in Prison for Role in $4 Million Health Care Fraud SchemeRead the Press Release
The lead administrator of a Chicago-area visiting physician practice was sentenced to 87 months in prison for his role in a $4 million health care fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) in Chicago and Acting Special Agent in Charge John A. Brown of the FBI’s Chicago Division made the announcement.
Rick Brown, 58, of Rockford, Illinois, was convicted in May 2015 following a jury trial of one count of conspiracy to commit health care fraud, six counts of health care fraud and three counts of false statements relating to a health care matter. In addition to imposing the prison term, U.S. District Judge Gary Feinerman of the Northern District of Illinois ordered Brown to pay $1.3 million in restitution.
From 2007 to 2011, Brown was the President of Home Care America Inc., which managed the daily business operations of Medicall Physicians Group Ltd. (Medicall), a physician practice that visited patients in their homes and prescribed home health care. The evidence at trial showed that Brown and his co-conspirators routinely billed Medicare for overseeing patient care plans (a service known as “care plan oversight” or CPO) when in fact the doctors at Medicall rarely did so. The evidence at trial also showed that Brown and his co-conspirators billed Medicare for services that were never provided, including services rendered to patients who were deceased, services purportedly provided by medical professionals no longer employed by Medicall, and services purportedly provided by medical professionals who, based on billing records, worked over 24 hours per day.
According to the evidence presented at trial, during the five-year conspiracy, Medicall submitted bills to Medicare for more than $4 million in services that were never provided. Medicare paid more than $1 million on those claims.
Mary Talaga, 54, of Elmwood Park, Illinois, and Roger A. Lucero, 64, of Elmhurst, Illinois, also have been convicted of offenses based on their roles in the scheme. Talaga, Home Care America’s biller, was convicted along with Brown at trial and is scheduled to be sentenced Sept. 18, 2015. Lucero, Medicall’s Medical Director, pleaded guilty and will be sentenced at a later date.
The case was investigated by HHS-OIG and the FBI, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Northern District of Illinois. This case was prosecuted by Trial Attorney Brooke Harper and Senior Trial Attorney Jon Juenger of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
3 September 2015
Wire Fraud Defendant Convicted of Failure to Surrender for Service of SentenceRead the Press Release
HONOLULU - A federal jury yesterday convicted Ruben Carrillo Gonzalez, age 53, for failing to surrender to federal authorities for service of his term of imprisonment. U.S. District Court Judge Leslie E. Kobayashi had ordered Gonzalez to self-surrender on January 5, 2015 at a federal correctional institution in California, but Gonzalez failed to surrender on that date.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said as a result of this conviction for failure to surrender for service of his sentence, Gonzalez is facing a sentence of up to ten years imprisonment which is required to be consecutive, or in addition, to the term of imprisonment for which he failed to surrender. Gonzalez had been sentenced by Judge Kobayashi on September 13, 2012, to 41 months imprisonment for committing wire fraud and had remained out of custody during the time of the appeal of this conviction to the Ninth Circuit Court of Appeals, which ultimately rejected the appeal and affirmed the conviction. According to information produced during the trial, the United States Marshal’s Service arrested Gonzalez on January 9, 2015 in Arizona where he resided pursuant to an arrest warrant issued after he failed to surrender.
This case was investigated by the Marshal’s Service with the assistance of the United States Pre-Trial Services Office. Assistant United States Attorney Chris A. Thomas prosecuted the case.
Waterloo is Awarded a Department of Justice Grant to Combat Drug CrimesRead the Press Release
CEDAR RAPIDS, IOWA—Today the city of Waterloo was awarded an Edward Byrne Memorial Justice Assistance Grant by the United States Department of Justice for fiscal year 2015. The $58,833 grant will be used in a joint effort by the City of Waterloo, Cedar Falls and Black Hawk County to provide continuing support for the Tri-County Drug Enforcement Task Force.
The Task Force is a multi-jurisdictional law enforcement unit responsible for investigating drug related crimes. The funds from this grant will be used to investigative major drug related crimes and support prosecution efforts.
United States Attorney for the Northern District of Iowa, Kevin W. Techau, stated, “This grant supports the common federal, state and local goal of strengthening law enforcement capabilities to investigate targets for the successful prosecution of drug traffickers.”
Currently, the Tri-County Drug Enforcement Task Force has full time investigators from the Waterloo and Cedar Falls Police Departments and the Black Hawk County Sheriff’s Office assigned to it. The Task Force investigates targets and assists in the prosecution of drug traffickers. It also responds to citizens’ complaints and concerns related to drug investigations.
In fiscal year 2014, the Task Force initiated 430 cases and made 173 arrests. It also seized $301,030 in cash and a large amount of illegal drugs with an estimated street value of $2,195,797. It also processed 17 methamphetamine lab sites.
This continued funding will assist in the enforcement against major drug trafficking organizations. The dismantling of these organizations is a priority and has resulted in the disruption of the distribution in the tri-county area of crack cocaine, marijuana, methamphetamine, heroin, hash oil and other illegal narcotics.
The Office of Justice Programs (OJP), which oversees these grants, provides innovative leadership to federal, state, local, and tribal justice systems, by disseminating state-of-the art knowledge and practices across America, and providing grants for the implementation of these crime fighting strategies. Because most of the responsibility for crime control and prevention falls to law enforcement officers in states, cities, and neighborhoods, the federal government can be effective in these areas only to the extent that it can enter into partnerships with these officers. OJP does not directly carry out law enforcement and justice activities. Instead, OJP works in partnership with the justice community to identify the most pressing crime-related challenges confronting the justice system and provides information, training, coordination, and innovative strategies and approaches for addressing these challenges.
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Two Local Men Sentenced on Federal Explosives and Weapons ChargesRead the Press Release
St. Louis, MO – OLAJUWON DAVIS and BRANDON ORLANDO BALDWIN were each sentenced to 84 months in prison on charges of planning and conspiring to ignite explosive devices during the Ferguson protests and procuring firearms for convicted felons.
According to court documents, in August 2014, Olajuwon Davis, a member of the New Black Panther Party, became a frequent protester in Ferguson, Missouri. During the protests, Davis met a fellow protestor by the name of Brandon Orlando Baldwin, who was employed at Cabela’s Inc., Hazelwood, Missouri. Cabela’s is a federally-licensed firearms dealer. Davis and Baldwin began to discuss how they could help arm some of the individuals taking part in the Ferguson protests. Baldwin volunteered that he could use his position at Cabela’s, and thereafter, Davis related to several people that he could procure firearms for convicted felons through Baldwin at the Cabela’s store. In fact, three such purchases were made: one on October 22, 2014, and two on November 7, 2014.
By early to mid-November, Davis and Baldwin’s talk of procuring guns had shifted into acquiring bombs. The discussions included types of bombs, blast radius and cost. Public buildings, police vehicles and police were discussed as possible targets. Also mentioned as possible targets were the St. Louis County Prosecutor and the Ferguson Chief of Police. On November 12, 2014, an undercover informant showed the defendants a recording of a controlled explosion that would be produced by the type of pipe bomb the defendants were talking about purchasing. The defendants requested a delivery date of Friday November 21, 2014.
On Thursday evening November 20, the arranged sale of three bombs was scheduled for shortly after midnight in the early morning hours of Friday. The reason for the delay was so that one of the defendants would be able to withdraw an additional $150 from an ATM machine to complete the purchase price of $250 for the three pipe bombs. The parties then met at a prearranged location in Hazelwood where the exchange of money for the three would-be bombs took place. Immediately upon the exchange taking place, Davis and Baldwin were arrested.
Olajuwon Davis, St. Louis, pled guilty in June to one felony count each of conspiracy to damage or destroy a building, vehicle and other property by use of an explosive, conspiracy to make false written statements in connection with the purchase of firearms and the transfer of firearms to a felon and two felony counts of aiding and abetting in the making of false written statements in connection with a firearms purchase.
Brandon Orlando Baldwin, St. Louis, Missouri, pled guilty in June to one felony count each of conspiracy to damage or destroy a building, vehicle and other property by use of an explosive, conspiracy to make false written statements in connection with the purchase of firearms and the transfer of firearms to a felon and two felony counts of making false written statements in connection with a firearms purchase. Both defendants appeared today for sentencing before United States District Judge Henry Autrey.
United States Attorney Richard Callahan congratulated law enforcement for preventing what potentially could have been a major disaster. "The disruption of this plot, coming as it did on the eve of the expected Grand Jury announcement, undoubtedly saved lives. Luckily for all of us, we’ll never know just how many," he said.
"We are pleased both members of the New Black Panther Party, St. Louis Chapter admitted their guilt before the Court," said William P. Woods, Special Agent in Charge of the FBI St. Louis Division. "The ultimate satisfaction is that we prevented their violent acts during the Ferguson protests, which saved lives."
This case was investigated by the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Bureau of Alcohol, Tobacco, Firearms & Explosives, St Louis County Police Department and the St Louis Metropolitan Police Department.
Two Former Executives of Athletic Equipment Company Sentenced for Roles in Extensive Fraud on New Jersey SchoolsRead the Press Release
NEWARK, N.J. – The former chief financial officer and chief executive officer of a leading supplier of athletic equipment and reconditioning services were sentenced today for their roles in a conspiracy to defraud schools in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Mitchell Kurlander, 57, of Allentown, Pennsylvania, was sentenced to 41 months in prison and his father-in-law, Alan Abeshaus, 83, of Highland Beach, Florida, was sentenced to three years of probation, including nine months of home confinement. Each defendant previously pleaded guilty before U.S. District Judge William H. Walls to one count of mail and wire fraud conspiracy. Judge Walls imposed the sentences today in Newark federal court.
According to documents filed in the case and statements made in court:
Circle System Group Inc. (Circle) sold and reconditioned athletic equipment, uniforms, and apparel. Although its services were marketed nationally, a large portion of Circle’s business focused on middle schools, high schools, colleges, and youth sports programs in New Jersey. Circle’s business depended primarily on a sales force that attempted to maintain relationships with the school officials—including athletic directors, equipment managers, trainers, and coaches—who were responsible for purchasing athletic equipment and reconditioning services on behalf of the schools. Kurlander was the CFO and Abeshaus was the CEO.
From at least 1997 to June 2007, Circle engaged in a number of business practices aimed at defrauding schools, including keeping duplicate payments by schools that should have been returned or credited back to schools, submitting fake quotes to school officials, and submitting fraudulent invoices to schools.
Circle sent invoices and monthly statements of account to schools. Schools often paid both the invoices and statements, paying twice for the same items or services. At the direction of Kurlander and Abeshaus, Circle improperly retained at least $822,000 in overpayments from various schools in New Jersey and elsewhere and converted these overpayments to the personal use and benefit of Abeshaus.
Circle and its sales staff often would provide multiple price quotes, including some that appeared to come from other companies, to allow schools with requirements to obtain multiple price quotes to justify a contract with Circle. Using quote forms with the letterhead of other companies, Circle administrative staff would prepare fake, higher quotes at the direction of Kurlander and others. Circle submitted numerous such fake quotes to schools in New Jersey and elsewhere during the course of the conspiracy.
As a routine business practice, and to ingratiate Circle with school officials, Kurlander authorized Circle employees to make gifts and donations to schools and school officials, and often would take officials on golf outings and to meals. Kurlander routinely inflated Circle’s invoices for services and goods to those schools to reimburse Circle for these donations and gifts. Gifts provided by Circle to school officials included computers, digital cameras, flat-screen TVs, golf clubs, leather jackets and other personal apparel.
Circle sometimes also submitted bid packages and price quotations for goods and reconditioning services that were lower than the prices that Circle intended to charge schools. After Circle obtained a school’s business, Circle would, at Kurlander’s direction, garner its desired profits by fraudulently inflating the quantity or nature of the reconditioning work or by fraudulently inflating other invoices to those schools for reconditioning services.
In addition to the prison term, Judge Walls sentenced Kurlander to three years of supervised release, fined him $15,000 and ordered him to pay $1,052,942 in restitution. Abeshaus was fined $250,000, ordered to forfeit $300,000, and pay $1 million in restitution.
Three other individuals previously pleaded guilty to their involvement in the conspiracy. On Dec. 22, 2008, former Circle president David Drill pleaded guilty to conspiring to defraud, among other Circle customers, various New Jersey schools. Two school officials—former Long Branch High School Athletic Director Charles Ferrara Jr. and former Elizabeth High School official Robert Firestone—pleaded guilty on Nov. 22, 2010, and Jan. 5, 2011, respectively, to participating in the conspiracy. Ferrara and Firestone admitted, among other things, that they received items from Circle for their personal use and directed Circle to fraudulently bill the cost of those items back to their respective schools. Drill is awaiting sentencing before U.S. District Judge Esther Salas. Ferrara was sentenced by U.S. District Judge Jose L. Linares in June 2014 to one year of probation. Firestone was sentenced by U.S. District Judge Claire C. Cecchi in November 2014 to one year of probation.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Steven Anderson of the Mid-Atlantic Region and Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s sentences.
The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr. and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel:
Kurlander: William A. DeStefano Esq., Philadelphia
Abeshaus: Kevin H. Marino Esq., Chatham, New Jersey
Torrington Man Charged with Child Pornography OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that TIMOTHY J. ALLEN, 34, of Torrington, was arrested yesterday and charged by federal criminal complaint with receipt and possession of child pornography.
Following his arrest, ALLEN appeared before U.S. Magistrate Judge Sarah A.L. Merriam in New Haven and was released on a $50,000 bond under electronic monitoring.
The charge of receipt of child pornography carries a mandatory minimum term of imprisonment of five years, a maximum term of imprisonment of 20 years and a fine of up to $250,000. The charge of possession of child pornography carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorney Jacabed Rodriguez-Coss.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Ten Arrested on Firearms and Narcotics Trafficking Charges During Two-Day Law Enforcement Operation in Eddy CountyRead the Press Release
ALBUQUERQUE – A series of undercover investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Pecos Valley Drug Task Force and the Artesia Police Department have resulted in the filing of federal firearms and narcotics trafficking charges against eleven individuals. On Sept. 1 and 2, 2015, law enforcement officers engaged in a multi-agency operation in Eddy County, N.M., and arrested seven of the federal defendants. The officers also arrested three others on state felony narcotics trafficking charges during the two-day law enforcement operation.
The results of the undercover investigations were announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Thomas G. Atteberry of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Commander James A. McCormack of the Pecos Valley Drug Task Force, and Chief Don Raley of the Artesia Police Department.
The seven federal defendants arrested during the law enforcement operation made their initial appearances in federal court in Roswell, N.M., this morning. One of the federal defendants is in state custody and will be transferred to federal custody to face the charges against him, and two others have yet to be apprehended and are considered fugitives. The eleventh federal defendant was shot and killed on Tuesday morning when officers attempted to arrest him.
The undercover investigations leading to the federal charges were led by the ATF office Las Cruces, the Pecos Valley Drug Task Force and the Artesia Police Department. During the course of the undercover investigations, law enforcement officers seized or purchased 21 firearms and ammunition, 49 ½ sticks of dynamite, approximately 240.16 grams of methamphetamine, a pound of marijuana, and 33 tablets of prescription opioids.
The following ten defendants are facing federal charges as a result of the undercover investigations:
- Victor R. Castillo, 36, of Artesia, N.M., is charged with being a felon in possession of a firearm and ammunition and unlawful possession of an unregistered short-barreled shotgun. The indictment alleges that Castillo committed the crimes in Eddy County in Jan. 2015. If convicted, Castillo faces a statutory maximum penalty of ten years in prison. Castillo was arrested on Sept. 1, 2015.
- Frederic Dodd, 39, of McIntosh, N.M., is charged with being a felon in possession of firearms and ammunition. The indictment alleges that Dodd committed the crime in Eddy County in May 2014. If convicted, Dodd faces a statutory maximum penalty of ten years in prison. Dodd was arrested on Sept. 1, 2015.
- Charles E. Gist, 56, of Artesia, N.M., and Jose Alfredo Villa, 34, of Lake Arthur, N.M., are charged with conspiracy to distribute methamphetamine and distribution of methamphetamine. The indictment alleges that the crimes were committed in Eddy County in Nov. and Dec. 2014. If convicted, each man faces a statutory mandatory minimum penalty of five years and a maximum of 40 years in prison. Gist was arrested on Sept. 2, 2015, and Villa was arrested on Sept. 1, 2015.
- Dallas Ellis Hnulik, 27, of Artesia, N.M., is charged with distributing methamphetamine on two occasions. The indictment alleges that he committed the crimes in Eddy County in June and July 2014. If convicted, Hnulik faces a statutory mandatory minimum penalty of five years and a maximum of 40 years in prison. Hnulik is in state custody on other charges and will be transferred to federal custody to face the charges in the indictment.
- Albert Douglas Lotts, 36, and Jackie Dean Brown, III, 34, both of Artesia, N.M., are charged with being felons in possession of firearms and ammunition. The indictment alleges that the two men committed these crimes in Eddy County in Jan. 2014. If convicted, each man faces a statutory maximum penalty of ten years in prison. Lotts was arrested on Sept. 1, 2015. Brown has yet to be arrested and is considered a fugitive.
- Jesus Adam Perez, 39, of McIntosh, N.M., is charged with the unlawful possession of a firearm and ammunition by a person convicted of a domestic violence misdemeanor and distributing marijuana. The indictment alleges that Perez committed these crimes in Eddy County in Nov. 2014. If convicted, Perez faces a statutory maximum of ten years in federal prison. Perez has yet to be arrested and is considered a fugitive.
- Floyd Albert Sherrell, 33, of Artesia, N.M. is charged with being a felon in possession of firearms and ammunition and distributing methamphetamine. The indictment alleges that he committed the crimes in Eddy County in June 2014. If convicted, Sherrell faces a statutory maximum penalty of ten years on the firearms charge and a statutory mandatory minimum penalty of five years and a maximum of 40 years in prison on the methamphetamine charge.
- Ronald Troy Bettencourt, 54, of Artesia, N.M., is charged in a five-count indictment that also charged Michael Todd Evans, 47. Bettencourt is charged with being a felon in possession of firearms and ammunition, being a felon in possession of explosives, and distributing methamphetamine. Bettencourt is alleged to have committed the crimes in Eddy County in Jan. 2014. If convicted, Bettencourt faces a statutory maximum penalty of ten years in prison on the firearms and explosives counts and a statutory mandatory minimum penalty of five years and a maximum of 40 years in prison on the methamphetamine charge. Bettencourt was arrested on Sept. 1, 2015. Evans was shot and killed on Sept. 1, 2015 when he opened fire on officers who were seeking to execute a warrant authorizing his arrest.
The prosecutions of Bettencourt, Brown, Castillo and Hnulik are being pursued under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. This initiative recognizes that on a per capita basis, New Mexico’s violent crime rates, including that of Eddy County, significantly exceed the national average.
The following defendants, all of whom reside in Carlsbad, N.M., were arrested on state felony narcotics trafficking charges: Ricky Gauntt, 61, Leah Hayhurst, 29, and Amanda Lujan, 27.
Charges in indictments and criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the federal cases. The state cases are being prosecuted by the 5th Judicial District Attorney’s Office. The federal cases were investigated by the Las Cruces office of ATF, the Pecos Valley Drug Task Force and the Artesia Police Department. The following agencies participated in the Sept. 1-2, 2015 law enforcement operation: ATF, Pecos Valley Drug Task Force, Artesia Police Department, Carlsbad Police Department, Eddy County Sheriff’s Office, Lake Arthur Police Department, and the Probation and Parole Division of the New Mexico Corrections Department.
The Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Photographs of the federal fugitives, Jackie Dean Brown, III, and Jesus Adam Perez are attached to this press release. Anyone with information on the whereabouts of these fugitive is asked to contact the ATF in Las Cruces at 575-522-0699.
Tampa Man Pleads Guilty to Sexual Enticement of A ChildRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Christopher James Everding (28, Tampa) has pleaded guilty to one count of attempting to entice a child to engage in illicit sexual conduct. He faces a mandatory minimum sentence of 10 years, up to life, in federal prison. His sentencing hearing is scheduled for November 16, 2015.
According to the plea agreement, from May 15, 2015, to May 22, 2015, Everding engaged in communications via the Internet with an undercover officer about his intent to engage the undercover officer’s 13-year-old fictitious daughter in sex and bestiality. On May 22, 2015, Everding traveled from Tampa to Brevard County for the purpose of engaging the “child” in illicit sexual conduct and was arrested.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Brevard County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Superseding Indictment Against Washington State Auditor Troy X. Kelley adds Money Laundering and Additional Tax ChargesRead the Press Release
A U.S. Grand Jury in Seattle has returned a superseding seventeen-count indictment against TROY X. KELLEY, 50, of Tacoma for his scheme to keep stolen money and hide it from both the IRS and those due a refund related to their purchase of a home or refinance of a home mortgage, announced U.S. Attorney Annette L. Hayes. KELLEY was indicted in April. The superseding indictment adds money laundering and tax evasion charges for conduct between 2011 and 2015, including conduct after KELLEY was elected Washington State Auditor. KELLEY will be scheduled for arraignment on the superseding indictment next week in U.S. District Court in Tacoma.
“The superseding indictment alleges that Mr. Kelley’s scheme continued even after his election to statewide office,” said U.S. Attorney Annette L. Hayes. “As set out in the new charges, he is alleged to have laundered money as recently as February of this year.”
According to the counts in the original indictment, between 2003 and 2008, KELLEY operated a business that was paid by real estate title companies to track documents related to real estate sales and refinancings. KELLEY had agreements with those companies for the fees he could charge in connection with the document-tracking work. While the title companies withheld $100-$150 on each loan to pay the fee, the bulk of the money was to be returned to the borrower with KELLEY’s company being paid approximately $15- $20 per transaction. In most cases, KELLEY kept the entire amount withheld on each loan resulting in more than $2 million in stolen money. When the amount withheld by title companies became the subject of civil litigation, KELLEY obstructed the litigation, repeatedly lying in a declaration and in depositions while under oath. The original indictment also charges KELLEY with making false statements to Internal Revenue Service agents who questioned him about his scheme in April 2013, and with corruptly interfering with Internal Revenue law and filing false income tax returns in 2008.
The superseding indictment adds five counts of money laundering for KELLEY’s scheme to transfer and use the stolen funds for his own benefit. The money laundering counts are for conduct in 2011, 2012, 2013, 2014, and 2015. The superseding indictment also adds three additional tax evasion counts alleging KELLEY filed false tax returns for 2011, 2012 and 2013.
One count from the original indictment has been dropped in the superseding indictment. KELLEY is no longer charged with Attempted Obstruction of Civil Lawsuit due to changes in case law.
The charges contained in the superseding indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Possession and concealment of stolen property is punishable by up to ten years in prison. Money Laundering is punishable by up to twenty years in prison. False declarations and false statements are punishable by up to 5 years in prison. The remaining charges are punishable by up to three years in prison.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and the FBI.
The case is being prosecuted by Assistant United States Attorneys Arlen Storm, Kathryn Frierson and Andrew Friedman.
kelley_superseding_indictment.pdf (2.6 MB)
Spring Man Lands in Federal Prison for Stealing MailRead the Press Release
HOUSTON – A 33-year-old Spring man has been ordered to prison after he admitted to breaking into a U.S. Postal Service (USPS) mail collection box and stealing people’s mail, announced U.S. Attorney Kenneth Magidson. Edward Wayne Rothlander pleaded guilty March 10, 2015.
Today, U.S. District Judge David Hittner, who accepted the guilty plea, handed Rothlander a 37-month sentence to be immediately followed by three years of supervised release.
As part of his plea, Rothlander admitted that on or about Dec. 22, 2014, he knowingly broke into an outside mail collection box at the U.S. Post Office located at 211 Baker Road in Houston and stole several pieces of mail.
The investigation began following the break-in of a USPS blue mail collection box on three occasions in a two-month period in late 2014. On or about Dec. 12, 2014, authorities placed a parcel that contained a GPS tracker inside the collection box. Shortly thereafter, the tracker emitted a signal meaning that the parcel was taken. The signal was traced to a location on Rivergate in Spring.
Using surveillance photos, authorities were able to identify Rothlander and the vehicle he used in the crime.
Rothlander admitted to authorities they would find stolen mail at his residence on Diane Lane. He further admitted that he had thrown away what he thought to be a garage door opener at the Rivergate location. Authorities located the device, which was actually the GPS tracker.A search was also conducted at Rothlander’s residence, at which time authorities located a black Outdoor Products back pack, a cardboard box and a small blue box, all of which contained stolen mail. The individuals who had mailed some of the items were contacted and reported they had mailed multiple Christmas cards from the Baker Road Post Office.
Authorities recovered 90 uncashed checks with a total intended loss of $75,796.04.
Rothlander will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges were the result of an investigation conducted by the U.S. Postal Inspection Service, Harris County Sheriff’s Office and the Harris County Precinct 4 Constables Office. Assistant U.S. Attorneys Mel Pechacek and Megan Paulson are prosecuting the case.
South Carolina Woman Sentenced to Seven Months in Prison for Trafficking Guns into New JerseyRead the Press Release
CAMDEN, N.J. – A Greeley, South Carolina, woman was sentenced today to seven months in prison for her role in a scheme to traffic multiple firearms into New Jersey, U.S. Attorney Paul J. Fishman announced.
Katelynn Schippnick, 25, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging her with one count of conspiring to deal firearms without a license. Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between April 8, 2013, and July 28, 2014, Schippnick conspired with Marcus Rutling, 33, of Camden and Saluda, South Carolina, Anthony Gilmore, 26, of Lawnside, New Jersey, Shawn Tribbett, 33, of Camden, Joseph Rutling, 24, of Camden, and others to illegally sell firearms without a license, including handguns, shotguns and an assault rifle. After other conspirators obtained the firearms from pawn shops, gun stores and other sources in South Carolina, Schippnick brokered and arranged the sale of the firearms and brought them to New Jersey, at times using Amtrak trains to transport the guns. Schippnick assisted in the sale of at least five firearms, including handguns and a shotgun, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
In addition to the prison term, Judge Bumb sentenced Schippnick to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing. He also thanked special agents from the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, as well as officers from the Winslow Township and Clementon, New Jersey, police departments, for their work in the case.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Martin Isenberg Esq., Gibbsboro, New Jersey
Six convicted in Baltimore to West Virginia heroin trafficking operationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Six individuals were convicted in federal court this week for their role in a multi-state heroin trafficking operation, United States Attorney William J. Ihlenfeld, II, announced.
The defendants convicted this week participated in a drug trafficking scheme in which heroin was transported across state lines from Baltimore, Maryland into West Virginia. The operation was disrupted in June 2015 by a 163-count federal indictment encompassing 41 defendants.
Shawn Bowers, 27, of Braddock Heights, Maryland, pled guilty to one count of “Conspiracy to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. James Francis Hansen, Jr., 48, of Berkeley Springs, West Virginia, pled guilty to one count of “Aiding and Abetting Possession with Intent to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. Darla Kinser, 30, of Martinsburg, pled guilty to one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering.” She faces up to five years in prison and a fine of up to $500,000.
Michelle Lynn Warnick, 33, of Kearneysville, West Virginia, pled guilty to one count of “Use of a Telephone to Facilitate the Distribution of Heroin,” and one count of “Interstate Travel in Aid of Racketeering.” She faces up to four years in prison on the telephone count and up to five years in prison on the interstate travel count. They each face a fine of up to $500,000 on each count.
Steward Eugene Whitehead, Jr., 29, of Inwood, West Virginia, and William Wasson, 38, of Falling Waters, West Virginia, each pled guilty to one count of “Use of a Telephone to Facilitate the Distribution of Heroin,” and one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering.” They each face up to four years in prison on the telephone count and up to five years in prison on the interstate travel count. They each face a fine of up to $500,000 on each count. 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. Attorneys Anna Krasinski and Paul Camilletti prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, and the Federal Bureau of Investigation led the inquiry.
U.S. Magistrate Judge Robert W. Trumble presided.
Six Defendants Sentenced in City of Miami Public Corruption/Kickback CaseRead the Press Release
Two former City of Miami Public Service Aides (PSA), three tow truck drivers, and the former owner of a tow company were sentenced by U.S. District Court Judge Marcia Cooke today for their participation in a kickback/bribery scheme. In that scheme, four tow truck drivers paid PSAs thousands of dollars in a series of bribes over a multi-year period. In exchange for the payments, the PSAs provided the tow truck drivers accident location information and other confidential information from their police department computers.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and Rodolfo Llanes, Chief, City of Miami Police Department (MPD), made the announcement.
City of Miami PSA Aristides Paulino, 31, City of Miami PSA Keri Dixon, 27, Jesus Tello, 29, Ronald Alfaro, 27, Reinaldo Martin Cruz, 30, and Robert Muriedas, 43, all of Miami, previously pled guilty to one count of conspiring to deprive the public of honest services through the use of interstate wires and conspiring to participate in a bribery scheme as/with a City of Miami Police Department employee in connection with a series of transactions valued at $5,000 or more in violation of Title 18, United States Code, Section 371. Robert Muriedas, the former owner of a tow truck company involved in the scheme, received a sentence of 34 months imprisonment. PSA Paulino and PSA Dixon were each sentenced to 30 and 29 months, respectively. The tow trucks’ operators, Tello, Alfaro, and Martin Cruz were each sentenced to 32, 29, and 29 months of imprisonment, respectively. All of the defendants are also required to serve one year supervised release, upon their release from prison.
Michael Perez, 22, of Miami, has been scheduled for sentencing at 11:00 a.m. on October 21, 2015.
According to the facts set forth in court documents, the City of Miami has established a wrecker operator system for the purpose of protecting drivers and preventing corruption. For example, when a car is disabled because of an accident, the driver must call a tow company himself or herself, have his or her insurance company arrange a tow, or ask the responding officer or PSA to arrange a tow. If an officer or PSA is asked to arrange the tow, almost every police department, including MPD, has strict regulations on how that tow referral must be made.
As further alleged, the information provided by PSAs Paulino and Dixon to tow truck operators Tello, Martin Cruz, Alfaro and Perez, and other unnamed co-conspirators, enabled the tow truck operators to arrive first at accident scenes, often times even before the arrival of law enforcement. Once there, the tow truck operators would illegally solicit stranded accident victims for towing and steer those victims to a particular collision repair business.
According to the factual proffers in the court file, Paulino admitted taking more than $35,000 worth of bribes between 2011 and 2014, and Dixon admitted receiving more than $20,000 in bribes between 2012 and 2014. Court documents stated that at the times when PSAs Paulino and Dixon were present at the accident locations, Paulino and Dixon actively assisted the tow truck operators in soliciting business from the stranded individuals. When the damaged vehicles were towed, they were delivered to a particular collision repair business which would pay a kickback to the tow truck operators, the PSAs, and the owner of the tow truck. Payment of these kickbacks was prohibited by the tow truck company’s contract with the City of Miami and the City of Miami also lost revenue because each tow was not properly logged as a rotational tow.
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force and the Internal Affairs Section of MPD. This case is being prosecuted by Assistant U.S. Attorney Anthony Lacosta.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Shasta County Man Sentenced to 6.5 Years in Prison for Receiving Child PornographyRead the Press Release
SACRAMENTO, Calif. — Larry Steven Occhipinti, 40, of Cottonwood, was sentenced today by United States District Judge Troy L. Nunley to 6 1/2 years in prison and a lifetime of supervised release for receipt of child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, law enforcement identified a computer at Occhipinti’s residence offering files of child pornography. On May 2, 2014, law enforcement agents executed a search warrant and found hundreds of deleted images of child pornography on Occhipinti’s computer and compact disks containing more than a dozen videos of child pornography.
At the sentencing hearing, Occhipinti claimed that he had never hurt a child. Judge Nunley disagreed, noting that by viewing such images of child pornography, Occhipinti was contributing to the market for producers of these images. “To say that you’ve never hurt anyone, you need to understand . . . that you have,” Judge Nunley said.
“When a predator publishes the victim’s images on the Internet, they live on forever. Today’s sentencing serves as a reminder that ICE will work tirelessly with its law enforcement counterparts to identify and hold accountable those who prey on innocent children,” said Tatum King, acting special agent in charge for HSI San Francisco.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Special Assistant United States Attorney Josh F. Sigal prosecuted the case.
Occhipinti is scheduled to self-surrender to begin serving his sentence on November 3, 2015.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Schroder & Co. Bank AG Reaches Resolution under Justice Department's Swiss Bank Program and Agrees to Pay $10.3 Million PenaltyRead the Press Release
The Department of Justice announced today that Schroder & Co. Bank AG has reached a resolution under the department’s Swiss Bank Program.
“As today’s agreement reflects, Swiss banks continue to lift the veil of secrecy surrounding bank accounts opened and maintained for U.S. individuals in the names of sham structures such as trusts, foundations and foreign corporations,” said Acting Deputy Assistant Attorney General Larry J. Wszalek of the Department of Justice’s Tax Division. “The department’s prosecutors and the IRS are actively following these leads to criminally investigate and prosecute those individuals who willfully evaded or assisted in the evasion of U.S. income tax obligations.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Schroder Bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute the bank for tax-related criminal offenses.
Schroder Bank was founded in 1967 and received its Swiss banking license in 1970. Since 1984, Schroder Bank has had a branch in Geneva. The bank has two wholly owned subsidiaries, Schroder Trust AG (domiciled in Geneva) and Schroder Cayman Bank & Trust Company Ltd. (domiciled in George Town, Grand Cayman). Schroder Cayman Bank & Trust Company Ltd. provides services to clients such as the creation and support of trusts, foundations and other corporate bodies. Both subsidiaries also acted in some cases as an account signatory for entities holding an account with the bank. Schroder Bank is in the process of closing the operations of Schroder Trust AG and Schroder Cayman Bank & Trust Company Ltd.
Schroder Bank opened accounts for trusts and companies owned by trusts, foundations and other corporate bodies established and incorporated under the laws of the British Virgin Islands, the Cayman Islands, Panama, Liechtenstein and other non-U.S. jurisdictions, where the beneficiary or beneficial owner named on the Form A was a U.S. citizen or resident. In addition, a small number of accounts were opened for U.S. limited liability companies (LLCs) with U.S. citizens or residents as members, as well as for U.S. LLCs with non-U.S. persons as members. Schroder Bank communicated directly with the beneficial owners of some accounts of trusts, foundations or corporate bodies, and it arranged for the issuance of credit cards to the beneficial owners of some such accounts that appear in some cases to have been used for personal expenses.
Schroder Bank also processed cash withdrawals in amounts exceeding $100,000 or the Swiss franc equivalent. For at least three U.S.-related accounts, a series of withdrawals that in aggregate exceeded $1 million were made. In addition, at least 26 U.S.-related accountholders received cash or checks in amounts exceeding $100,000 on closure of their accounts, including in at least three cases cash or checks in excess of $1 million.
Between 2004 and 2008, four Schroder Bank employees traveled to the U.S. in connection with the bank’s business with respect to U.S.-related accounts. In 2008, Swiss bank UBS AG publicly announced that it was the target of a criminal investigation by the Internal Revenue Service (IRS) and the department, and that it would be exiting and no longer accepting certain U.S. clients. In a later deferred prosecution agreement, UBS admitted that its cross-border banking business used Swiss privacy law to aid and assist U.S. clients in opening accounts and maintaining undeclared assets and income from the IRS. Between Aug. 1, 2008, and June 30, 2009, Schroder Bank opened eight U.S.-related accounts with funds received from UBS, which was then under investigation by the U.S. government.
Since Aug. 1, 2008, Schroder Bank had 243 U.S.-related accounts with approximately $506 million in assets under management. Schroder Bank will pay a $10.354 million penalty.
In accordance with the terms of the Swiss Bank Program, Schroder Bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at Schroder Bank who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at Schroder Bank must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“The cumulative penalties the Swiss Bank Program has generated to date are extraordinary,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “However, a significant element of the program is the highly-detailed account and transactional data that has been provided to IRS specifically for law enforcement purposes. We will continue to use this information to vigorously pursue U.S. taxpayers who may still be trying to illegally conceal offshore accounts, ensuring we are all playing by the same rules.”
Acting Deputy Assistant Attorney General Wszalek thanked the IRS, and in particular, IRS-CI and the IRS Large Business and International Division for their substantial assistance. Wszalek also thanked Sean P. Beaty and Gregory S. Seador, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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San Juan Man Convicted of Downloading Sadistic Child Pornography VideosRead the Press Release
McALLEN, Texas – A 29-year-old resident of San Juan has entered a guilty plea to one count of receipt of child pornography, announced U.S. Attorney Kenneth Magidson
Ruben James Rios came to the attention of law enforcement following an investigation which began Feb. 8, 2015, into persons using the Internet to traffic in child pornography. A special agent with Homeland Security Investigations (HSI) was able to locate and identify a computer as offering to participate in the receipt of child pornography movies through the peer-to-peer network on the Internet. Through the investigation, it was determined that the computer was located in a residence in San Juan.
On May 27, 2015, authorities executed a search warrant at that residence during which time they seized a laptop computer and various external storage media devices. A forensic examination on the devices revealed a total of 147 child pornography movies involving clearly young children engaged in sexually explicit conduct. These movies included children under the age of 12 engaged in sadistic conduct and acts of violence. Some of the movies are of known victims as identified through the National Center for Missing and Exploited Children.
Rios admitted he downloaded child pornography from the Internet thereby receiving the child pornography found on his computer and external storage media devices.
U.S. District Judge Micaela Alvarez, who accepted the guilty plea today, has set sentencing for Nov. 19, 2015. At that time, Rios faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The charges are the result of an investigation conducted by HSI.
This case, prosecuted by Assistant United States Attorneys Alex Benavides and Kimberly Ann Leo, 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."
Sallisaw Man Sentenced to 52 Months, $4,800 Restitution for Wire Fraud, Uttering A Counterfeiting Security and Identity TheftRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CHRISTOPHER JACOB FROEHLICH, age 29, of Sallisaw, Oklahoma, was sentenced to 28 months imprisonment on three counts of Wire Fraud, in violation of Title 18, United States Code, Sections 1343 and one count of UTTERING A COUNTERFEIT SECURITY WITH INTENT TO DECEIVE, in violation of Title 18, United States Code, Section 513(a). FROEHLICH was also sentenced to 24 months on two counts of AGGRAVATED IDENTITY THEFT, in violation of Title 18, United States Code, Section 1028A(a)(1) which were ordered to run consecutive to the other charges. The defendant was ordered to pay $4,851 restitution.
The charges arose from an investigation by the United States Postal Inspector and the United States Secret Service. The defendant was indicted in September, 2014.
The Indictment alleged that from December 25, 2013 to March 24, 2014, within the Eastern District of Oklahoma and elsewhere, the defendant devised a scheme and artifice to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises. It was part of the scheme that the defendant used his computer to create fraudulent accounts at various financial institutions. The defendant created these fraudulent accounts using the identities of other persons without their permission. The defendant also created and uttered counterfeit checks.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. The defendant remains in the custody of the United States Marshal pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Chris Wilson represented the United States.
Salem Man Sentenced to 15 Years Under the Armed Career Criminal ActRead the Press Release
PORTLAND, Ore. – Alberto Contreras, 34, of Salem, Oregon, was sentenced today under the Armed Career Criminal Act to the mandatory minimum sentence of 15 years in prison by U. S. District Court Judge Marco A. Hernandez. Contreras pled guilty to being a felon in possession of a firearm with an Armed Career Criminal enhancement on March 23, 2015. Following his prison term, Contreras will serve five years of supervised release.
This case arose out of an investigation by the Salem Police Department after they developed information that Contreras was selling methamphetamine while carrying a firearm. Following a traffic stop of the vehicle he was driving on March 12, 2014, police developed probable cause to search the vehicle, and a loaded 9mm Ruger pistol, which had previously been stolen, was found hidden in the vehicle in addition to a digital scale. Subsequently, Contreras allowed the police to search his apartment and a small amount of methamphetamine and two digital scales were located.
Under federal law, any person who possesses a firearm after being previously convicted of three violent felonies or drug trafficking crimes qualifies as an armed career criminal and faces a mandatory 15-year minimum sentence. Contreras qualified for that sentence based upon the following prior convictions: (1) Delivery of a Controlled Substance, Marion County, 2001, sentence of 16 months imposed; (2) Assault II, Marion County, 2003, sentence of 60 months imposed; (3) Delivery of a Controlled Substance, Marion County, 2011, sentence of 19 months imposed.
This case was investigated by the Salem Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U. S. Attorney Fred Weinhouse.
Real Estate Agent Sentenced to 7 Years and Promoter Sentenced to 2 Years for Their Roles in Federal Racketeering ConspiracyRead the Press Release
CHARLOTTE, N.C. – Nathan Shane Wolf, 44, and John Wayne Perry, Jr., 34, both of Charlotte, were sentenced this week by Senior U.S. District Judge Graham C. Mullen on federal racketeering charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. An additional defendant, Purnell Wood, 44, was sentenced on Friday, July 31, 2015 for his role in the federal racketeering Enterprise.
Acting U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
These convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, 89 defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives. Of the 89 defendants convicted, two remain to be sentenced.
Wolf, a licensed real estate agent, was sentenced to 7 years in prison followed by three years of supervised release. Wolf was convicted by a jury in October 2013. According to trial evidence, Wolf was a participant in the enterprise’s mortgage fraud operations, accounting for over $13 million in fraudulently-obtained loans, with losses of more than $7 million. Witnesses testified that Wolf arranged for builders of luxury real estate to pretend to sell such real estate at an inflated price – what Wolf called the “gross price” – in order to get an inflated mortgage loans from a bank. In reality, the builders accepted the true, lower, price – what Wolf called the “strike price” – while Wolf arranged for the difference between the inflated price and the true price to be paid from the loan proceeds as kickbacks. Such kickbacks were funneled through sham companies and disguised to look like payments for work actually done on the real estate. Trial evidence established that the work was never done, but instead these kickbacks were payments to the buyers and promoters who helped bring the parties to the fraud together. According to the evidence at trial, the kickbacks generally ranged from approximately $50,000 to almost $600,000. According to today’s sentencing hearing, Defendant Wolf received more than $200,000 in commissions on the fraudulent transactions, which represented the vast majority of his income during the years he was committing fraud.
Perry was sentenced to 24 months in prison followed by two years of supervised release. According to court records and today’s sentencing hearing, Perry served the Enterprise as a promoter in its mortgage fraud operations, arranging a fraudulent transaction that resulted in a loss of approximately $500,000. More than $200,000 in kickbacks were then funneled through Perry’s bank account following the closing. Defendant and his co-conspirators falsely represented the kickback money was for brick work done on the property.
Wood was sentenced to 21 months in prison followed by one year supervised release. According to court records and the sentencing hearing, Wood also served the Enterprise as a promoter in its mortgage fraud operations, arranging two mortgage fraud transactions with losses of more than $1.5 million, funneling nearly a half million dollars in kickbacks through his sham company following closing. Defendant and his co-conspirators falsely represented that this kickback monies were for payment for home improvements.
In pronouncing these sentences Senior Judge Mullen noted that the calculated losses did not include the effects on the neighborhoods where houses purchased through fraud were located and that the victims of this fraud extended beyond the lending institutions to other people who lived in those neighborhoods and saw their property values negatively impacted by the fraud.
Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento. The Mehr case was tried by Assistant United States Attorneys Maria K. Vento and Jenny G. Sugar.
“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.”
Rancho Cucamonga Man Indicted for Committing Sexual Abuse of a Minor in Yosemite National ParkRead the Press Release
FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Marcus Anthony Maluhia Araiza Jr., 18, of Rancho Cucamonga, charging him with aggravated sexual abuse of a child and abusive sexual contact with a child under 12 years of age, United States Attorney Benjamin B. Wagner announced.
According to allegations in a criminal complaint previously filed against Araiza, during the early morning hours of August 26, 2015, National Park Service rangers responded to a call that an 11-year-old boy was molested while in a restroom at Camp Curry in Yosemite National Park. The boy reported being in the restroom when an unknown man grabbed him and touched his genitals. The boy was able to escape from the bathroom get to his mother. Flyers posted in Curry Village led to Araiza’s arrest later that morning.
This case is the product of an investigation by the National Park Service. Assistant United States Attorney Michael S. Frye is prosecuting the case.
If convicted, Araiza faces a statutory penalty of up to life in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Prior Drug Dealing + Gun = 15 Years in Federal PrisonRead the Press Release
PITTSBURGH - A resident of Pittsburgh, has been sentenced in federal court to 15 years in prison on his conviction of federal drug and firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge Mark Hornak imposed the sentence upon defendant Self Strawder, 31, on September 2, 2015.
According to information presented to the court, on June 1, 2014, Homestead Police responded to a domestic disturbance and observed the defendant drop a pistol handle extender as he fled into a building. In the hallway, they located a loaded pistol. Strawder was also located and found to possess 40 stamp bags of heroin and $1,804 in cash.
On Sept. 15, 2014, Pittsburgh Police observed Strawder, then a wanted fugitive, discarding marijuana as he fled on foot. He was apprehended and found to have a loaded pistol, 128 stamp bags of heroin and $765 on his person.
Judge Hornak determined that Strawder has multiple prior convictions including: burglary of a residence; theft of firearms and other items; and dealing heroin, cocaine and marijuana. Federal law precludes a person with any prior convictions for crimes punishable by more than one year from possessing a firearm or ammunition. Individuals with three or more felony drug convictions and/or crimes of violence face a minimum mandatory 15 years or more in federal prison.
Prior to imposing sentence, Judge Hornak determined that a 15-year period of incarceration was a serious sentence imposed for serious offenses. The Court also determined that a 10-year period of supervision by the United States Probation Office after his release from jail was necessary to deter Strawder from similar criminal conduct in the future.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government.
This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pittsburgh Bureau of Police and the Homestead Police Department for the investigation leading to the successful prosecution of Strawder.
Philadelphia Woman Charged with Lying About Marriage to Get Government BenefitsRead the Press Release
PHILADELPHIA - Roma Gardner-Kunkle, 55, of Philadelphia, Pennsylvania, was charged today by information with one count of theft of government funds, announced United States Attorney Zane David Memeger. The defendant was approved for SSI benefits based on an application she made in February 1987. In 1995, she married and was obligated to inform the Social Security Administration (“SSA”) of changes to her household composition, household income, and marital status.
According to the information, in December of 2005, during a redetermination interview with SSA, the defendant falsely stated that she had never been married and that she lived alone. She made the statements in order to receive more Supplemental Security Income benefits than she was entitled to receive. The defendant’s alleged actions resulted in a loss to the government of approximately $48,071.70.
If convicted, the defendant faces a possible term of imprisonment, up to three years of supervised release, restitution to the government in the amount of $48,071.70, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by the Social Security Administration-Office of Inspector General and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
An information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Woman Charged with Defrauding FEMARead the Press Release
PHILADELPHIA - Schwana Debnam, 38, of Philadelphia, PA, was charged by information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, the defendant applied for and received Federal Emergency Management Agency (“FEMA”) benefits, alleging that she had been displaced from her home as a result of Hurricane Irene. The information charges that the representations in the defendant’s application to FEMA were false, and that, in fact, she was never displaced from her primary residence. The defendant’s alleged actions resulted in a loss to the government of approximately $26,756.
If convicted, the defendant faces a statutory maximum sentence of 10 years in prison, up to three years of supervised release, restitution to the government of $26,756, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by Homeland Security, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Bea Witzleben.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
North Carolina Man Pleads Guilty to Possession of Stolen FirearmsRead the Press Release
NORFOLK, Va. – Robert James Gibson, 25, of Roxobel, North Carolina, pleaded guilty today to charges of possession of stolen firearms.
According to a statement of facts filed with the plea agreement, Gibson and a co-conspirator broke into AWH Arms in Virginia Beach and stole 22 firearms which Gibson and the co-conspirator were selling to people on the streets. This case came to light when a drunken individual left a night club and started shooting a gun into the air. After responding to a call about the shooting, police recovered the firearm and discovered it was stolen from the break-in at AWH Arms. The drunken individual identified both Gibson and the co-conspirator who sold him the stolen firearm.
Gibson was indicted by a federal grand jury on June 3, 2015. Gibson faces a maximum penalty of 10 years in prison when sentenced on Dec. 3, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the plea was accepted by U.S. District Judge Mark S. Davis. Assistant U.S. Attorney William D. Muhr is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-69.
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Ninth Defendant Pleads Guilty to Tax Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Springfield, Mo., woman pleaded guilty in federal court today to her role in a fraudulent tax return preparation scheme that claimed nearly $340,000 in fraudulent income tax refunds.
Heather Nicole Drennen, 32, of Cameron, Mo., formerly of Springfield, pleaded guilty before U.S. Magistrate Judge David P. Rush to making a false and fraudulent income tax return.
Co-defendant Cherie Christine Dupuis, 43, of Springfield, pleaded guilty on July 21, 2015, to leading the fraudulent tax return preparation conspiracy. Dupuis admitted that she and co-conspirators defrauded the government by filing false claims for income tax refunds from February 2009 to March 2012. In the false and fraudulent federal income tax returns they prepared and filed, conspirators claimed refunds from the IRS totaling approximately $340,630, of which approximately $336,839 was false. Over the course of the scheme, the total actual tax loss to the IRS was $284,169.
Dupuis admitted that she filed fraudulent federal income tax returns in her own name and for at least 19 other individuals. Dupuis would usually split the fraudulent refunds with her co-conspirators. The total amount of the false claims Dupuis personally prepared and/or filed was approximately $298,708, with approximately $256,281 being paid on these false claims and a loss to the government of approximately $213,711.
Drennen admitted that she filed a false federal income tax return for the 2011 tax year using another person’s identity, including that person’s name and Social Security number. This 2011 federal income tax return falsely listed wages that had not been earned and federal income tax withholdings that had not been withheld. As a result, Drennen fraudulently received a $5,592 income tax refund.
Drennen is the ninth defendant to plead guilty to her role in the scheme. In addition to Dupuis, co-defendants Johnny L. Cooper, 28, and Jeannie Marie Rhodes, 34, both of Springfield, Shawna Marie Hughey, 37, of Joplin, Mo., formerly of Springfield, William J. Coonce, 29, of Otterville, Mo., Jeannette R. Dunn, 48, of Huntsville, Ark., formerly of Springfield, Asia Michelle Couchman, 26, of Oak Grove, Mo., and Delbert L. Allen, 37, of Pleasant Hope, Mo., formerly of Springfield, have also pleaded guilty.
Under federal statutes, Drennen is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation.
New Orleans Man Indicted for Narcotics and Firearms ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DARION TINSON, age 33, of New Orleans, was charged today in a four count Indictment for violations of the Federal Controlled Substances Act and the Federal Gun Control Act.
According to the Indictment, TINSON conspired to possess and possessed with the intent to distribute a mixture or substance containing a detectable amount of heroin, a Schedule I controlled substance. In addition, TINSON faces charges of possessing a firearm in furtherance of his drug trafficking trade and for being a convicted felon in possession of a firearm in violation of the Federal Gun Control Act.
If convicted on the drug charges, TINSON faces up to 20 years in prison on each charge, a fine of up to $1,000,000, and at least three years of supervised release following any term of imprisonment. If convicted of the gun charges, TINSON would face an additional five years in prison that must run consecutive to any other sentence.
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney David Haller is in charge of the prosecution.
New Orleans Man Indicted for Failure to Register as a Convicted Sex OffenderRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BENIAIH LEWIS, age 26, of New Orleans, was charged today in a one count Indictment for failure to register as a sex offender in violation of the Sex Offender Registration and Notification Act.
According to court records, LEWIS was convicted of Possession of Child Pornography in violation of California Penal Code Section 311.11(a) on October 3, 2012, and, because of his conviction, LEWIS was required to register as a sex offender for life pursuant to the Sex Offender Registration and Notification Act. LEWIS completed his last known sex offender registration form with the Fresno Police Department in California in 2013. According to today’s indictment, at some time after August 2013, LEWIS moved from California to Louisiana and failed to notify law enforcement authorities of his move to Louisiana.
If convicted of the failure to register charge, LEWIS faces a maximum term of imprisonment of ten years, a fine of $250,000 and up to three years of supervised release.U. S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Polite praised the work of the U. S. Department of Homeland Security-HSI, the U.S. Marshals Service, and the Fresno California Police Department in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U.S. Attorney Brian M. Klebba.
New Haven Man Admits Paying Nearly $350K in Bribes to West Haven Housing Authority OfficialRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ANDREW ROSS, 58, of New Haven, waived his right to indictment and pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to paying nearly $350,000 in bribes to the former executive director of the West Haven Housing Authority in exchange for government contracts and business.
According to court documents and statements made in court, Michael Siwek was the executive director of the West Haven Housing Authority (“WHHA”), an agency that received federal funding. As part of his duties, Siwek had substantial discretion over awarding WHHA business and contracts. Siwek also owned and controlled Four Star Development Company, LLC (“Four Star”). Between January 2007 and February 2012, ROSS, who controlled business entities that received WHHA business and contracts for financial and consulting services, made approximately $349,500 in corrupt payments to Siwek and Four Star.
In total, Siwek received approximately $1.5 million in bribes from individuals who received business with the WHHA and the entities that the WHHA controlled.
ROSS pleaded guilty to one count of conspiracy to commit bribery in connection with a program receiving federal funds, which carries a maximum term of imprisonment of five years. Judge Shea scheduled sentencing for January 29, 2016.
On September 4, 2014, Siwek pleaded guilty to related charges. He awaits sentencing.
U.S. Attorney Daly stated that the investigation is ongoing.
This matter is being investigated by the U.S. Department of Housing and Urban Development – Office of Inspector General, the Federal Bureau of Investigation, and Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Sarah Karwan.
Citizens are encouraged to report corruption to the Connecticut Public Corruption Task Force by calling 203-238-0505.
New Charges and Defendants Added in Superseding Indictment for Credit Card SchemeRead the Press Release
SACRAMENTO, Calif. — A superseding indictment has been unsealed that charges three defendants for participating a large-scale scheme to defraud over 119,000 credit card account holders by making false charges on their accounts, United States Attorney Benjamin B. Wagner announced.
The original indictment was returned on March 20, 2014, and charged Mihran Melkonyan, 35, of Sacramento, and Rouslan Akhmerov, 41, of Los Angeles, with 23 counts of wire fraud and mail fraud. Akhmerov pleaded guilty to credit card fraud on December 15, 2014, and is awaiting sentencing.
The superseding indictment charges Melkonyan and adds defendants Ruslan Kirilyuk, 37, of Los Angeles, and Aleksandr Maslov, 34, of Sacramento, to the indictment, charging all three defendants with 24 counts of wire fraud and two counts of mail fraud. Kirilyuk is also charged with one count of aggravated identity theft. Melkonyan has been in custody since his arrest on April 15, 2015. Maslov was arrested on Tuesday and released on bond. Kirilyuk has yet to appear, and there is a warrant for his arrest.
According to court documents, between October 5, 2011, and March 5, 2014, the defendants participated in a scheme to obtain money from credit card holders, credit card companies, and third-party credit card payment processors by charging individuals’ credit cards without their permission or knowledge for goods and services that were not provided.
The defendants created at least 70 fictitious businesses for the purpose of billing stolen credit cards, using names that sounded legitimate such as 24 Quick Stop, Best Box, Chevran, Marshall Store, Stop Shop Market, Walt Mart, and Whole Store. In some cases, the fictitious businesses had Internet domain names and email addresses associated with them that were used to create the appearance of a legitimate business. Some of these fictitious businesses were established in the names of unknowing victims; for example, the defendants obtained stolen or misappropriated copies of student transcripts from a Sacramento-area high school and used the students’ identities to establish the fictitious businesses.
According to the superseding indictment, the defendants obtained information for credit card accounts and processed a large number of small payments from different credit cards in a relatively short period of time. The credit card providers such as American Express and third-party payment processors such as PayPal credited the businesses’ accounts based on the processed credit card transactions for the purported sales.
As part of the scheme, the defendants opened multiple bank accounts that they controlled using the identity theft victims. These accounts were linked directly to the businesses’ merchant accounts with credit card providers and third-party credit card payment processors. The defendants transferred money from the businesses’ merchant accounts to the bank accounts of the victims, and then withdrew cash from these accounts through ATM withdrawals, using debit cards and other means.
This case is the product of an investigation by the Federal Bureau of Investigation and the United States Secret Service. Assistant United States Attorneys Michael D. Anderson and Matthew M. Yelovich are prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire and mail fraud. Kirilyuk faces an additional two years in prison consecutive to any other penalty if convicted on the aggravated identity theft count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
NGK Insulators Ltd. to Pay $65.3 Million for Fixing Prices on Auto PartsRead the Press Release
Automotive parts supplier NGK Insulators Ltd. has agreed to plead guilty and to pay a $65.3 million criminal fine for its role in a conspiracy to fix prices and rig bids for ceramic substrates for automotive catalytic converters supplied to automobile manufacturers. The company will also plead guilty to obstruction of justice.
According to the two-count felony charge filed today in the Eastern District of Michigan, NGK Insulators, based in Nagoya, Japan, conspired to rig bids for, and to fix, stabilize and maintain the prices of, catalytic converter substrates. The parts were supplied to automobile manufacturers such as General Motors Company, Toyota Motor Corporation, Nissan Motor Company Ltd and certain of their subsidiaries, affiliates and suppliers in the United States and elsewhere. NGK Insulators was involved in the conspiracy from at least July 2000 until at least February 2010. NGK Insulators is also charged with obstructing justice between February 2010 and approximately July 2012, for altering, destroying, mutilating and concealing documents with the intent of impeding the investigation into criminal antitrust violations in the automotive parts industry. NGK Insulators has agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“Companies and their executives who commit antitrust crimes will be found out and punished,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “And if they attempt to obstruct our investigation, they will face even harsher consequences.”
Ceramic substrates are uncoated ceramic monoliths with a fine honeycomb structure that are used in automotive catalytic converters. Catalytic converters are critical emissions control devices that convert pollutants in an exhaust gas stream into less harmful gases through catalytic chemical reactions.
According to the charge, NGK Insulators and representatives of another corporate conspirator had conversations in which they agreed upon anticompetitive bids and price quotations on bids to be submitted to certain automobile manufacturers. NGK Insulators, which sells a variety of ceramic and metallic products for the automotive industry, power generation, electronics components and other industrial processes, is the second-largest worldwide manufacturer of ceramic substrates for automotive catalytic converters.
Additionally, after becoming aware of antitrust investigations in the United States and other countries, NGK Insulators and certain of its executives and employees obstructed justice through a series of actions in both the United States and Japan. NGK Insulators deleted and attempted to delete electronic files, destroyed and concealed paper files, removed and replaced high executives’ office computers, removed and concealed electronic files stored on its U.S. office computer system, attempted to destroy paper files located in the U.S., engaged in misleading actions and withheld information about the offenses under investigation.
The charges against NGK Insulators are the latest in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry. Including NGK Insulators, 36 companies and 30 executives have pleaded guilty or agreed to plead guilty in the ongoing investigation and have agreed to pay more than $2.5 billion in criminal fines.
NGK Insulators is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. NGK Insulators is also charged with obstruction of justice, which carries a maximum penalty of $500,000 per count for corporations.
Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
NGK Insulators Information (209.19 KB)
Moody Man Pleads Guilty to Stealing $41,098 from Jewish TempleRead the Press Release
BIRMINGHAM -- A Moody man pleaded guilty this week in federal court to one count of wire fraud as part of his scheme to steal $41,098 from his employer, Temple Emanu-el in Birmingham, announced First Assistant United States Attorney Robert Posey and FBI Special Agent in Charge Roger C. Stanton.
CHARLES M. COLLINS, 66, entered his guilty plea before U.S. District Judge Abdul Kallon. His sentencing is scheduled Dec. 4.
Collins served as the accounting manager for Temple Emanu-el from June 2008 to November 2013, when his scheme was discovered. In his plea agreement with prosecutors, Collins admitted that he took advantage of that position to send unauthorized wire transfers from a local bank into his own personal bank accounts. Collins agreed to forfeit $41,098 to the government as proceeds of illegal activity.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Xavier O. Carter Sr. is prosecuting.
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Montgomery County Man Sentenced to 42 Months in Prison for Deceptive Telemarketing Fraud Scheme that Defrauded Clients of $2.9 MillionRead the Press Release
Greenbelt, Maryland - U.S. District Judge Theodore Chuang sentenced Richard A. Brennan, age 43, of Clarksburg, Maryland, today to 42 months in prison, followed by three years of supervised release, for mail fraud, and for making a false statement on a tax return. Judge Chuang entered a judgment ordering Brennan to pay a $150,000 fine, $2.9 million in restitution to the victims of the fraud and $297,087 in restitution to the Internal Revenue Service. In addition, Judge Chuang ordered Brennan to perform 200 hours of community service.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Maryland Attorney General Brian E. Frosh.
According to his plea agreement, until January 2009, Brennan was a licensed attorney in Maryland. In late 2005 or early 2006, Brennan established the Law Offices of Richard A. Brennan (LORAB) to perform debt settlement services. “Debt settlement” differs from “debt management” services, in that, in debt management, debtors continue to make payments on accounts on negotiated terms, while debt settlement involves allowing debt accounts to go delinquent and making a lump sum offer to settle the account. While debt management services – and the fees that could be charged customers – were closely regulated in Maryland, debt settlement services were not.
The Maryland Attorney General’s Office and the Maryland Attorney Grievance Commission both received a high number of complaints from Brennan’s customers reporting that they were deceived by telemarketers who convinced them of the high probability of success by engaging Brennan and his debt settlement program, but who reported seeing little success in having their debts resolved. When the clients complained to LORAB, their calls frequently went unreturned and they were typically told their payments would not be refunded as they constituted Brennan’s attorney fees.
In October 2007, Brennan agreed with the Maryland Attorney General’s Office to cease engaging in a number of business practices, including misuse and commingling of his clients’ funds. Despite this, Brennan violated the agreement by continuing to recruit new clients without making the disclosures required under the agreement with the Attorney General’s office, and by omitting any mention of his restrictions under the agreement, which included a requirement that he maintain a surety bond in order to continue to provide debt settlement services.
To evade the restrictions in the agreement and to keep new clients from researching the large numbers of complaints posted online about his practices, Brennan changed his business entity name several times in quick succession, to include doing business for a few months as the Capital Law Group, then the Frederick Law Group and later as the Metro Law Group. Brennan also instructed telemarketers working for him to deny the new entities’ relationship with Richard Brennan.
In January 2009, Brennan surrendered his license to practice law by signing a joint petition with the Attorney Grievance commission. In that document, Brennan admitted that he had used client trust money for purposes other than its intended use. In June, 2009, Brennan appeared before the Circuit Court of Frederick County and acknowledged that he continued to debit funds from client bank accounts even after his surety bond had been revoked. Brennan was ordered to pay a $2.58 million money judgment in restitution to clients from whom he collected money up until October 2007. The Court also briefly jailed Brennan for contempt after he failed to provide the Attorney General’s Office a list of clients or accounting for funds as he had promised.
Even after losing his license to practice and this judgment, Brennan continued to attempt to defraud debt clients. On November 6, 2009, Brennan mailed an existing Frederick Law Group client a letter under the business entity name “International Debt Solutions.” In that letter, Brennan acknowledged that Frederick Law Group’s “web site and call center have been closed” “[d]ue to unforeseen circumstances” and attempted to dissociate himself with that firm by claiming that that “[Frederick Law Group] has forwarded us your information.” Brennan asked the client to fill out a new representation agreement, power of attorney, and electronic funds transfer authorization, which the victim returned by mail to an address two houses away from Brennan’s.
Brennan’s debt settlement fraud scheme caused the loss of approximately $2.9 million to his clients between October 18, 2007, and 2010, and involved more than 250 victims.
Brennan also admitted that he filed false tax returns in 2006 and 2007, underreporting his income in both years. For example, in 2007, Brennan reported an adjusted gross income of negative $576,273.10 when he had unreported business receipts that year of at least $9,229,802. Additionally, Brennan received a total of $5,387 in tax refunds based on his knowingly false returns submitted for 2006 and 2007. Brennan filed no tax returns for the tax year 2008, despite receiving over $6 million into business bank accounts he controlled. The total approximate tax loss to the United States is $297,087.
Further, Brennan knowingly possessed unregistered machineguns and short-barreled rifles and also engaged in the unlicensed manufacture of the machineguns. Specifically, in February 2011, a search warrant executed at Brennan’s home in Clarksburg, Maryland, yielded evidence that Brennan unlawfully converted 10 semiautomatic rifles into fully automatic weapons, and modified another rifle so that it had a barrel length of less than six inches. Brennan failed to register those modified weapons, as required by law.
United States Attorney Rod J. Rosenstein praised U.S. Postal Inspection Service, ATF, IRS-Criminal Investigation, and the Maryland Attorney General’s Office for their work in the investigation and thanked the Maryland Attorney Grievance Commission for its assistance. Mr. Rosenstein thanked Assistant United States Attorney Joseph R. Baldwin, who prosecuted the case.
Michigan Man Guilty of Mail Fraud in $50 Million Ponzi SchemeRead the Press Release
A Michigan man was found guilty today of fifteen counts of mail fraud in a $50 million Ponzi scheme that spanned ten years.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced today that after a six-week trial, Joseph P. Zada, 57, of Grosse Pointe Shores, Michigan, and formerly of Wellington, Florida, was found guilty today of 15 counts of mail fraud in a $50 million Ponzi scheme that spanned ten years.
The victims included an internationally acclaimed hockey player, a former Olympic equestrian champion, a veterinarian, a jeweler, and a pawnbroker, as well as a number of firefighters. Zada told the victims that he was investing their money in oil and currency trading through a top-secret board headquartered in London. In truth, he never invested their money, but instead squandered it on a lavish jet-set lifestyle, which included mansions in Florida and Michigan. The victims were defrauded out of more than $50 million. When pressed to return the investment money, Zada claimed he was awaiting a billion dollar inheritance from a member of the royal family of Saudi Arabia, but the inheritance never materialized.
Zada was taken into custody immediately after the verdict was read. Zada faces up to 20 years in prison for each of the 15 counts. His sentencing is scheduled for November 20, 2015 at 2:00 p.m. before U.S. District Judge Kenneth A. Marra.
Mr. Ferrer commended the investigative efforts of the FBI. This case is being prosecuted by Assistant United States Attorneys Rolando Garcia and Adrienne Rabinowitz.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami-Dade County Resident Sentenced to Four Years in Prison for Causing the Filing of False Cash Payment ReportsRead the Press Release
A Miami-Dade County resident was sentenced to 48 months in prison, followed by three years of supervised release, and was ordered to pay a money judgment in the amount of $165,000 and to forfeit $69,900.22 and a BMW seized during the investigation.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Key, Chief, Opa-locka Police Department, and J.D. Patterson Jr., Director, Miami-Dade Police Department (MDPD), made the announcement.
Geovanys Guevara, 41, of Hialeah, was previously convicted by a federal jury of three counts of causing the filing of false reports of cash payments over $10,000 received in a trade or business, specifically Form 8300, with the Treasury Department, for the purpose of evading reporting these payments to the Treasury Department, in violation of Title 31, United States Code, Sections 5324(b)(2) and (d)(2).
As shown at trial and in court documents, Guevara purchased three cars in the names of another individual at a Miami-Dade car dealership: a Ferrari involving cash in the amount of $95,000, a Lamborghini involving cash in the amount of $20,000, and a Rolls Royce involving cash in the amount of $50,000. Because Guevara used a straw buyer to purchase the vehicles, his actions caused the car dealership to file a Form 8300 for each purchase containing material omissions and misstatements of fact concerning the true identity of the person from whom the cash was received. Federal law requires every non-financial trade and business to file a Form 8300 with the Treasury Department to report cash payments received over $10,000 during a transaction or two or more related transactions.
Mr. Ferrer commended the investigative efforts of the South Florida Financial Crimes Strike Force, with special commendation to IRS-CI, the Opa-locka Police Department, and the MDPD. The case is being prosecuted by Assistant U.S. Attorneys Elijah A. Levitt and Timothy Abraham.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mexican Citizen Living in San Antonio Sentenced to Life in Federal Prison for his Role in Kidnapping SchemeRead the Press Release
In San Antonio today, a federal judge sentenced 36-year-old Agustin Sergio Deleon Garza to life in federal prison for his role in the kidnapping of a Mexican businessman in December 2013 announced United States Attorney Richard L. Durbin, Jr., Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and Special Agent in Charge Joseph M. Arabit of the DEA’s Houston Division.
In addition to the prison term, Senior United States District Judge Royce Lamberth ordered Deleon Garza to pay $73,800 restitution to his victim.
On January 15, 2015, a jury found Deleon Garza guilty of one count of conspiracy to kidnap; one count of aiding and abetting kidnapping; two counts of receipt of ransom money; one count of interstate communication of ransom; one count of conspiracy to commit money laundering; and, one count of aiding and abetting money laundering.
Evidence presented during trial revealed that on December 27, 2013, Jorge Luis Martin Cavazos Cantu was kidnapped from his Monterrey, Mexico residence by several men. While Cantu was in the custody of his abductors in Mexico, Deleon Garza placed several phone calls from Bexar County to Cantu’s family seeking ransom. In each call, Deleon Garza used a cellphone app which disguised his voice and his location. Cantu was released on January 29, 2014, after the ransom was paid.
“Kidnapping is a terrifying crime for the victim and for his family. Everyone knows that kidnappings can end very badly. Fortunately, the victim in this case survived and was released. Deleon Garza’s life-imprisonment sentence is appropriate and very well deserved,” stated United States Attorney Richard Durbin.
This case was investigated by special agents with the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA) in San Antonio and in Mexico (Monterrey and Mexico City) in cooperation with the State of Nuevo León anti kidnapping unit and the attorney general's office in Monterrey.
“The sentence handed down today sends a clear message to criminals who attempt to carry out acts of violence in other countries while enjoying the privileges and freedoms of living in this great nation. The FBI, working with our law enforcement partners, in the US and the world, will ensure that you are held accountable for your violent criminal acts,” stated FBI Special Agent in Charge Christopher Combs, San Antonio Division.
“This sentence represents outstanding law enforcement collaboration among agencies in the United States and Mexico, and demonstrates the bilateral tenacity involved with bringing those who threaten our communities to justice,” stated Joseph M. Arabit, DEA Special Agent in Charge, Houston Division.
Assistant United States Attorney Erica Benites Giese prosecuted this case on behalf of the Government.
Metro-East Man Charged with Firearm OffenseRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on September 2, 2015, Anthony M. Williams, 33, East St. Louis, IL, was arraigned on an Indictment charging him with the Unlawful Possession of a Firearm by a Previously Convicted Felon. Williams’ trial is scheduled for October 26, 2015. Williams was ordered held without bond pending trial.
The indictment alleges that, on April 10, 2015, Williams unlawfully possessed an FEG, .9mm pistol, after having been previously convicted of Unlawful Possession of a Weapon by a Felon in St. Clair County, Illinois.
The penalty for the Unlawful Possession of a Firearm by a Previously Convicted Felon is a term of imprisonment of not more than ten years, a fine up to $250,000, or both, and a term of supervised release of not more than three years.
An indictment is merely the method by which federal charges are lodged. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case was investigated by the Illinois State Police’s Metro-East Police Assistance Team. The case is assigned to Assistant United States Attorney Angela Scott.
Men Plead Guilty to Federal Child Pornography OffensesRead the Press Release
LUBBOCK, Texas — In unrelated cases, two defendants appeared in federal court this afternoon and pleaded guilty to federal child pornography offenses, announced John Parker, U.S. Attorney for the Northern District of Texas.
Felipe Martinez Ramirez, 47, of Ozona, Texas, pleaded guilty before U.S. Magistrate Judge Nancy M. Koenig to one count of producing child pornography. Ramirez, who has been in custody since his arrest this past July, faces a statutory penalty of not less than 15 years or more than 30 years in federal prison and a $250,000 fine. A sentencing date was not set.
According to plea documents filed in the case, Ramirez enticed a minor female to engage in sexually explicit conduct with him at a residence in Ozona, and he used a cell phone to record that conduct reflected in a bathroom mirror.
In the other case, Jacob Seth Thornton, 28, of Lubbock, pleaded guilty before Judge Koenig to one count of receiving a visual depiction of a minor engaging in sexually explicit conduct. He faces a statutory penalty of not less than five years or more than 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. He remains on bond and a sentencing date was not set.
According to plea documents filed in his case, Thornton kept a laptop at his residence that he used, to among other things, search the Internet for images and videos depicting minors engaged in sexually explicit conduct. Thornton used peer-to-peer file sharing software to receive the seven images described in the indictment, as well as many others.
The cases were brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s 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 sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Crockett County Sheriff’s Office investigated the Ramirez case. ICE HSI and the Lubbock County Sheriff’s Office investigated the Thornton case. Assistant U.S. Attorney Steven M. Sucsy is in charge of prosecuting both cases.
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MS-13 Gang Associate Sentenced to 20 Years in Prison for the Robbery of a Brothel that included a Rape and MurderRead the Press Release
Greenbelt, Maryland - U.S. District Judge Paul W. Grimm sentenced Alexsi Lopez, age 27, of Hyattsville, Maryland, today to 20 years in prison, followed by three years of supervised release, for conspiracy and the violent robbery of a Hyattsville brothel that resulted in a rape and murder. A federal jury convicted Lopez of those crimes on April 9, 2015.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to the evidence presented at his six day trial, Lopez was associated with the MS-13 gang and knew his co-defendant, Ramon Miguel Cerros-Cruz through MS-13. Evidence showed that Lopez and Cerros-Cruz familiarized themselves with the location and operation of brothels in the Hyattsville-Langley Park area of Prince George’s County, then planned the robbery of a Hyattsville brothel apartment. According to trial testimony, on February 28, 2007, Lopez and Cerros-Cruz entered the brothel apartment armed with knives, and using force and violence, demanded money from the people within the brothel and searched the apartment for cash and items of value. Witnesses testified that Lopez and Cerros-Cruz bound one of the brothel’s employees, raped another employee and murdered a third person who arrived at the brothel during the commission of the rape and robbery, stabbing him multiple times when he resisted the demands of the defendants. DNA evidence placed Lopez and Cerros-Cruz at the scene.
Ramon Miguel Cerros-Cruz, age 25, of Silver Spring, Maryland previously pleaded guilty to the robbery conspiracy and was sentenced of 10 years in prison.
United States Attorney Rod J. Rosenstein praised HSI Baltimore and the Prince George’s County Police Department for their work in the investigation and thanked the Prince Georges County Department of Corrections and the Maryland Department of Public Safety and Correctional Services for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Daniel C. Gardner, who prosecuted the case.
Long Island Man Charged with Sexual Exploitation, Enticement, and Child Pornography CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that HASSAN KHAN, a Long Island resident, was arrested today and charged in a criminal complaint with five counts stemming from his sexual exploitation and enticement of a minor and his receipt of child pornography. KHAN was presented today in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein.
U.S. Attorney Preet Bharara said: “As alleged, Hassan Khan sexually exploited an innocent child, beginning the grooming process when she was just 11 years old. This Office is dedicated to ensuring that those who sexually abuse children are held to account. I want to thank the FBI for their remarkable work in this case.”
Assistant Director-in-Charge Diego Rodriguez said: “Khan was arrested today for allegedly targeting, grooming, and exploiting a minor for several years. He carried out this illicit behavior by enticing her online and engaging in sexually explicit conduct with her, both in the United States and abroad. As this terrifying ordeal comes to an end, the nightmare continues for the victim and her family. Innocence, once stolen, is not easily restored. The FBI, with assistance from our local and international partners, will continue to pursue sexual predators, remove them from their hideaway, and deliver them into the arms of the law.”
According to the Complaint unsealed today in Manhattan federal court[1]:
In or about 2007, KHAN initiated online conversations with a then-11-year-old girl (the "Victim."). Between 2007 and 2013, KHAN, who was aware of the Victim's age, coerced and enticed the Victim to engage in illegal sexual activity. The Complaint further alleges that KHAN engaged in a sexual act with the Victim, and coerced and enticed the Victim to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
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KHAN, 28, was arrested today in Manhattan, New York. The Complaint charges KHAN in five counts. Counts One and Two charge KHAN with coercing and enticing a minor to engage in illegal sexual activity. Count Three charges KHAN with sexual exploitation of a child. Count Four charges KHAN with sexual exploitation of a child outside of the United States. Count Five charges KHAN with receipt of child pornography. Counts One and Two carry a mandatory minimum sentence of 10 years in prison and a maximum penalty of life in prison. Counts Three and Four carry a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison. Count Five carries a mandatory minimum sentence of five years in prison and 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 defendant will be determined by the judge.
Mr. Bharara praised the efforts of the FBI in this investigation. He added that the investigation is continuing. Any individuals who believe they have information concerning HASSAN KHAN that may be relevant to the investigation should contact the Federal Bureau of Investigation at 1-212-384-1000.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Alex Rossmiller is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Logan County Home Care Giver Guilty of Aggravated Identity TheftRead the Press Release
Ordered to pay $56,543.93 in restitution
BOWLING GREEN, Ky. – A Logan County, Kentucky home care giver pleaded guilty in U.S. District Court this week to identity theft and agreed to serve a 24 month prison sentence and agreed to pay restitution in the amount of $56,543.93 announced United States Attorney John E. Kuhn, Jr.
Crystal Hullett, age 38, of Russellville, pleaded guilty to five counts of aggravated identity theft before U.S. District Judge Greg Stivers on September 2, 2015.
According to the plea agreement, Hullett was a home care giver to the victim R.W. between June 2012 and January 2014. During that time, Hullett defrauded R.W. of money and property by making unauthorized purchases of personal items and gift cards at various merchants in Russellville, Kentucky by using R.W.’s debit card. Further, Hullett knowingly possessed and used the name, signature, and debit card of R.W. without lawful authority.
At the time of sentencing, the United States will move for the dismissal of counts 1,2,3,4, and 5 of the indictment and agree that a sentence of 24 months is appropriate. The restitution order of $56,543.93 is due at the time of sentencing on January 12, 2016, at 10:30am in Bowling Green, before Judge Stivers.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by United States Secret Service, United States Postal Inspection Service and the Russellville Police Department.
Lackawanna Man Sentenced for Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051Buffalo, N.Y.‐‐U.S. Attorney William J. Hochul, Jr. announced today that James M. Meyers, 29, of Lackawanna, NY, who was convicted of possession of child pornography, was sentenced to 30 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that on June 24, 2014, the Wyoming County Sheriff’s Department responded to a complaint in the Town of Pike. At that time, deputies were given a digital memory card (SD card) which contained what appeared to be images of child pornography. Subsequent investigation determined that the SD card belonged to the defendant. A forensic analysis determined the images were in fact child pornography. Some of the images contained graphic images of prepubescent children.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and the Wyoming County Sheriff’s Department, under the direction of Sheriff Gregory Rudolph.
Today’s indictment is the culmination of an investigation by the Federal Bureau of Investigation and the Buffalo Police Department, under the direction of Commissioner
Daniel Derenda.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.