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3 September 2015
Kentwood Woman Sentenced for Stealing Money from United States Post OfficeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that WANDA JAMES, age 46, of Kentwood, was sentenced today after previously pleading guilty to a one-count Bill of Information charging her with making false entries and reports of money belonging to the United States, and in the care, custody and control of the United States Postal Service.
According to court documents, on or about September 10, 2013 through and including on or about February 3, 2014, JAMES, being a Postal Service officer or employee charged with the duty of receiving, holding, or paying over moneys on behalf of the United States, knowingly and willfully made false reports of such moneys. On sixteen separate occasions, JAMES falsely recorded cash purchases of money orders as debit card purchases on her daily financial reports. She did this so she could steal the cash from the money order purchases and conceal the theft by reporting sales as debit card transactions, when, in fact, she well knew that no such purchases had been made. JAMES stole approximately $2,611.61 of United States funds in the custody of the Postal Service.
U.S. District Judge Jane Triche Milazzo sentenced JAMES to 36 months of probation, $100 special assessment, and restitution in the amount of $2,611.61.
U.S. Attorney Polite praised the work of the U.S. Department of Education and the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorney Sharan E. Lieberman was in charge of the prosecution.
Justice Department and University of Nebraska at Kearney Settle Lawsuit over Rights of Students with Psychological Disabilities to Have Assistance Animals in Student HousingRead the Press Release
The Justice Department announced today that the University of Nebraska at Kearney (UNK) and the Board of Regents of the University of Nebraska have agreed to settle a civil rights lawsuit brought by the department. Under the proposed settlement, which must still be approved by the United States District Court for the District of Nebraska in Lincoln, UNK will:
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pay $140,000 to two former students who sought and were denied reasonable accommodations to keep assistance animals in their university apartments; and
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change its housing policy to allow persons with psychological disabilities to keep animals with them in university housing where such animals provide necessary therapeutic benefits to such students.
The proposed settlement would resolve a lawsuit filed by the department in 2011. In that lawsuit, the department alleged that UNK violated the Fair Housing Act when, in 2010, it denied requests to allow two different students with psychological disabilities to keep an emotional support dog with them in University Heights, a 102-unit apartment complex that UNK operates for students near the UNK campus. One of the students filed a complaint with the Department of Housing and Urban Development (HUD), which investigated the complaint and referred it to the department. Under the proposed settlement, UNK has agreed to change its policy to accommodate similar requests going forward.
“This is an important settlement for students with disabilities not only at UNK but throughout the country,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Assistance animals such as emotional support dogs can provide critical support and therapeutic benefits for persons with psychological disabilities. The Fair Housing Act requires that universities accommodate students who need such animals in order to have an equal opportunity to enjoy the benefits of university housing.”
“Allowing a student with disabilities to keep an assistance animal is not only required by law, it can mean the difference between having the opportunity to attend college or not,” said Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “The department will continue to work with the Department of Justice to take appropriate action anytime the Fair Housing Act is violated.”
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777 or through HUD’s website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp.
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Justice Department Announces Enhanced Policy for Use of Cell-Site SimulatorsRead the Press Release
Increased Privacy Protections and Higher Legal Standards to Be Required
The Justice Department today announced a new policy for its use of cell-site simulators that will enhance transparency and accountability, improve training and supervision, establish a higher and more consistent legal standard and increase privacy protections in relation to law enforcement’s use of this critical technology.
The policy, which goes into effect immediately and applies department-wide, will provide department components with standard guidance for the use of cell-site simulators in the department’s domestic criminal investigations and will establish new management controls for the use of the technology.
“With the issuance of this policy, the Department of Justice reaffirms its commitment to hold itself to the highest standards as it performs its critical work to protect public safety,” said Deputy Attorney General Sally Quillian Yates. “Cell-site simulator technology has been instrumental in aiding law enforcement in a broad array of investigations, including kidnappings, fugitive investigations and complicated narcotics cases. This new policy ensures our protocols for this technology are consistent, well-managed and respectful of individuals’ privacy and civil liberties.”
Cell-site simulators are just one tool among many traditional law enforcement techniques and are deployed only in the fraction of cases in which the capability is best suited to achieve specific public safety objectives.
To enhance privacy protections, the new policy establishes a set of required practices with respect to the treatment of information collected through the use of cell-site simulators. This includes data handling requirements and an agency-level implementation of an auditing program to ensure that data is deleted consistent with this policy. For example, when the equipment is used to locate a known cellular device, all data must be deleted as soon as that device is located, and no less than once daily.
Additionally, the policy makes clear that cell-site simulators may not be used to collect the contents of any communication in the course of criminal investigations. This means data contained on the phone itself, such as emails, texts, contact lists and images, may not be collected using this technology.
While the department has, in the past, obtained appropriate legal authorizations to use cell-site simulators, law enforcement agents must now obtain a search warrant supported by probable cause before using a cell-site simulator. There are limited exceptions in the policy for exigent circumstances or exceptional circumstances where the law does not require a search warrant and circumstances make obtaining a search warrant impracticable. Department components will be required to track and report the number of times the technology is deployed under these exceptions.
To ensure that the use of the technology is well managed and consistent across the department, the policy requires appropriate supervision and approval.
Jicarilla Apache Man Pleads Guilty to Assaulting a Federally Commissioned Tribal OfficerRead the Press Release
ALBUQUERQUE – Lawrence Roybal, 53, a member of the Jicarilla Apache Nation who resides in Dulce, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to assaulting a federal officer. The guilty plea was entered without the benefit of a plea agreement.
Roybal was arrested in May 2015, on a criminal complaint charging him with assaulting an officer with a dangerous weapon. According to the criminal complaint, Roybal attacked a Jicarilla Apache Tribal Police Officer with a pitchfork on May 11, 2015. The crime occurred in Dulce, N.M., which is within the Jicarilla Apache Indian Reservation in Rio Arriba County, N.M.
Roybal was indicted on June 9, 2015, and charged with assaulting a federal officer who was engaged in the performance of his official duties. The indictment alleges that the victim was a tribal officer commissioned as a special federal officer by the BIA at the time of the assault.
Today, Roybal entered a guilty plea to the indictment. At sentencing, he faces a statutory maximum sentence of 20 years in federal prison. Roybal has been in custody since his arrest and remains detained pending his sentencing hearing.
This case was investigated by the Farmington office of the FBI and the Jicarilla Apache Tribal Police Department. Assistant U.S. Attorney Raquel Ruiz-Velez is prosecuting the case.
Jefferson County Man Guilty of Producing Child PornographyRead the Press Release
BEAUMONT, Texas – A 20-year-old Beaumont, Texas man has pleaded guilty to federal child exploitation charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Keith Dwayne Marks, Jr. pleaded guilty to production of child pornography today before U.S. Magistrate Judge Zack Hawthorn.
According to information presented in court, on May 21, 2014, law enforcement officers in Grand Prairie, Texas, were notified by a school nurse that a 10-year-old student had come to the nurse’s office feeling ill after receiving a photo on an instant messaging app of a male’s genitals. The student disclosed she had been communicating with the male through several instant messaging and internet video chats and that she knew him as Keith Marks from Beaumont, Texas. It was determined that Marks was a registered sex offender due to a June 3, 2013 conviction for possession of child pornography in Jefferson County, Texas. On Sep. 3, 2014, a search warrant was executed at Marks’s residence in Beaumont. During the search, law enforcement officers discovered images and a video containing child pornography. Further investigation enabled law enforcement officers to locate and identity of the 13-year-old child in those photos in the Houston area. The child confirmed Marks had coerced them into engaging in sexually explicit conduct while filming such conduct with a cellular phone. Marks was indicted by a federal grand jury on June 4, 2015.
Marks faces a minimum of 15 years and up to 30 years in federal prison. A sentencing date has not been set.
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.
This case is being investigated by Homeland Security Investigations (HSI), Beaumont Police Department, the Grand Prairie Police Department and the Pearland Police Department and prosecuted by Assistant U.S. Attorneys Randall L. Fluke and Marisa Miller.
Jacksonville Women Sentenced for Conspiracy to Defraud the United States and Aggravated Identity TheftRead the Press Release
Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan has sentenced two Jacksonville women for conspiracy to defraud the United States and aggravated identity theft. Laura Butler was sentenced to two years and one month in federal prison and Cherica Daniels was sentenced to 18 months’ imprisonment.
Butler pleaded guilty on March 6, 2015, and Daniels pleaded guilty on February 25, 2015.
According to court documents, in 2011, Butler worked at Blue Cross Blue Shield Florida and had access to personal identifying information. During her employment, she accessed several subscribers’ identities and later used them to file false and fraudulent income tax returns. Daniels also participated in the scheme to prepare and file false and fraudulent tax returns. During her initial encounter with law enforcement, Daniels had a black bag containing more than 200 identities, including more than 15 social security numbers.
The case was investigated by The Internal Revenue Service - Criminal Investigation. It was prosecuted by Assistant United States Attorney Kelly S. Karase.
Indictment: Storage Unit in Liberal Concealed Four Pounds of MethRead the Press Release
WICHITA, KAN. - Two people living in Liberal were indicted Wednesday on charges of trafficking more than four pounds of methamphetamine, U.S. Attorney Barry Grissom said.
Jose Alaniz-Hernandez, 37, and Anna Noreiga-Perez, 20, both of whom have been living in Liberal, Kan., were charged with one count of possession with intent to distribute methamphetamine. In court records, prosecutors allege that on Aug. 26, 2015, investigators served a search warrant at Space Station Secure Storage, 1120 E. Second Street in Liberal, Kan. In the unit, which was being used by the defendants, investigators found three Tupperware containers and 17 clear plastic bags containing approximately four pounds of methamphetamine.
“Methamphetamine is a principal drug threat in Kansas,” said U.S. Attorney Barry Grissom. “Whether it comes from laboratories in Mexico or it is locally produced, it is readily available in our communities, along with the violence and related crimes it supports.”
If convicted, the defendants face a penalty of not less than 10 years and a fine up to $4 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney David Lind is prosecuting.
OTHER INDICTMENTS
Azucena Garcia-Ferniza, 21, who has been living in Salina, Kan., is charged with one count of unlawful possession of a firearm by an alien illegally in the United States. The crime is alleged to have occurred May 7, 2015, in Saline County, Kan.
If convicted, she faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Calvin M. Hymon, 31, Topeka, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Aug. 2, 2015, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
Antonio Garcia-Viveros, 32, Kansas City, Kan., and Asuncion Cortez-Chavez, 27, Kansas City, Kan., are charged with one count of possession with intent to distribute methamphetamine. In addition, Garcia-Viveros is charged with one count of unlawful possession of a firearm in furtherance of drug trafficking. The crimes are alleged to have occurred Aug. 6, 2015, in Kansas City, Kan.
Upon conviction, the methamphetamine charge carries a penalty of not less than 10 years and a fine up to $10 million; and the firearm charge carries a penalty of not less than five years and a fine up to $250,000. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Trent Krug is prosecuting.
Jose Luis Garcia-Flores, 44, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported. He was found Aug. 21, 2015, in Finney County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Victor Ruiz-Arias, 45, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported. He was found Aug. 22, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Darnell Sharon O’Connor, 34, Overland Park, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred March 8, 2014, in Lawrence, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Lawrence Police Department investigated. Special Assistant U.S. Attorney James Ward is prosecuting.
Stephen M. Nelson, 26, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred March 8, 2014, in Kansas City, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The U.S. Marshals Service investigated. Special Assistant U.S. Attorney James Ward is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indictment Charges Three People with Running $54 Million “Green Energy” Ponzi SchemeRead the Press Release
An indictment was unsealed today charging three people in an investment scheme, involving a Bala Cynwyd, Pennsylvania-based company, that defrauded more than 300 investors from around the country. Troy Wragg, 34, a former resident of Philadelphia, Pennsylvania, Amanda Knorr, 32, of Hellertown, Pennsylvania, and Wayde McKelvy, 52, of Colorado, are charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, securities fraud and seven counts of wire fraud, announced U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge William F. Sweeney Jr of the FBI’s Philadelphia Division.
As the founders of the Mantria Corporation, Wragg and Knorr allegedly promised investors huge returns for investments in supposedly profitable business ventures in real estate and “green energy.” According to the indictment, Mantria was a Ponzi scheme in which new investor money was used to pay “earnings” to prior investors since the businesses actually generated meager revenues and no profits. To induce investors to invest funds, it is alleged that Wragg and Knorr repeatedly made false representations and material omissions about the economic state of their businesses.
Between 2005 and 2009, Wragg, Knorr and McKelvy, through Mantria, intended to raise over $100 million from investors through Private Placement Memorandums (PPMs). In actuality, they raised $54.5 million. Wragg and Knorr were allegedly able to raise such a large sum of money through the efforts of McKelvy. McKelvy operated what he called “Speed of Wealth” clubs which advertised on television, radio and the internet, held seminars for prospective investors and promised to make them rich. According to the indictment, McKelvy taught investors to liquidate all their assets such as mutual funds and 401k plans, to take out as many loans out as possible, such as home mortgages and credit card debt and invest all those funds in Mantria. During those seminars and other programs, Wragg, Knorr and McKelvy allegedly lied to prospective investors to dupe them into investing in Mantria and promised investment returns as high as 484 percent.
It is further alleged that Wragg, Knorr and McKelvy spent a considerable amount of the investor money on projects to give investors the impression that they were operating wildly profitable businesses. Wragg, Knorr and McKelvy allegedly used the remainder of the funds raised for their own personal enrichment. Wragg, Knorr and McKelvy allegedly continued to defraud investors until November 2009 when the SEC initiated civil securities fraud proceedings against Mantria in Colorado, shut down the company, and obtained an injunction to prevent them from raising any new funds. A receiver was appointed by the court to liquidate what few assets Mantria owned.
In order to lure prospective investors, it is alleged that Wragg, Knorr and McKelvy lied and omitted material facts to mislead investors as to the true financial status of Mantria, including grossly overstating the financial success of Mantria and promising excessive returns.
“The scheme alleged in this indictment offered investors the best of both worlds – investing in sustainable and clean energy products while also making a profit,” said U.S. Attorney Memeger. “Unfortunately for the investors, it was all a hoax and they lost precious savings. These defendants preyed on the emotions of their victims and sold them a scam. This office will continue to make every effort to deter criminals from engaging in these incredibly damaging financial crimes.”
“As alleged, these defendants lied about their intentions regarding investors’ money, pocketing a substantial portion for personal use,” said Special Agent in Charge Sweeney Jr. “So long as there are people with money to invest, there will likely be investment swindlers eager to take their money under false pretenses. The FBI will continue to work with its law enforcement and private sector partners to investigate those whose greed-based schemes rob individuals of their hard-earned money.”
If convicted of all charges, the defendants each face possible prison terms, fines, up to five years of supervised release and a $1,000 special assessment.
The criminal case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Robert J. Livermore. The SEC in Colorado investigated and litigated the civil securities fraud charges which formed the basis of the criminal prosecution.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Indictment Charges Three People with Running $54 Million "Green Energy" Ponzi SchemeRead the Press Release
PHILADELPHIA – An indictment was unsealed today charging three people in an investment scheme, involving a Bala Cynwyd, Pennsylvania-based company, that defrauded more than 300 investors from around the country. Troy Wragg, 34, a former resident of Philadelphia, PA, Amanda Knorr, 32, of Hellertown, PA, and Wayde McKelvy, 52, of Colorado, are charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, securities fraud, and seven counts of wire fraud, announced United States Attorney Zane David Memeger and FBI Special Agent-in-Charge William F. Sweeney, Jr.
As the founders of the Mantria Corporation, Wragg and Knorr allegedly promised investors huge returns for investments in supposedly profitable business ventures in real estate and “green energy.” According to the indictment, Mantria was a Ponzi scheme in which new investor money was used to pay “earnings” to prior investors since the businesses actually generated meager revenues and no profits. To induce investors to invest funds, it is alleged that Wragg and Knorr repeatedly made false representations and material omissions about the economic state of their businesses.
Between 2005 and 2009, Wragg, Knorr, and McKelvy, through Mantria, intended to raise over $100 million from investors through Private Placement Memorandums (PPMs). In actuality, they raised $54.5 million. Wragg and Knorr were allegedly able to raise such a large sum of money through the efforts of McKelvy. McKelvy operated what he called “Speed of Wealth” clubs which advertised on television, radio, and the internet, held seminars for prospective investors, and promised to make them rich. According to the indictment, McKelvy taught investors to liquidate all their assets such as mutual funds and 401k plans, to take out as many loans out as possible, such as home mortgages and credit card debt, and invest all those funds in Mantria. During those seminars and other programs, Wragg, Knorr, and McKelvy allegedly lied to prospective investors to dupe them into investing in Mantria and promised investment returns as high as 484%.
It is further alleged that Wragg, Knorr, and McKelvy spent a considerable amount of the investor money on projects to give investors the impression that they were operating wildly profitable businesses. Wragg, Knorr, and McKelvy allegedly used the remainder of the funds raised for their own personal enrichment. Wragg, Knorr, and McKelvy allegedly continued to defraud investors until November 2009 when the SEC initiated civil securities fraud proceedings against Mantria in Colorado, shut down the company, and obtained an injunction to prevent them from raising any new funds. A receiver was appointed by the court to liquidate what few assets Mantria owned.
In order to lure prospective investors, it is alleged that Wragg, Knorr, and McKelvy lied and omitted material facts to mislead investors as to the true financial status of Mantria, including grossly overstating the financial success of Mantria and promising excessive returns.
“The scheme alleged in this indictment offered investors the best of both worlds – investing in sustainable and clean energy products while also making a profit,” said Memeger. “Unfortunately for the investors, it was all a hoax and they lost precious savings. These defendants preyed on the emotions of their victims and sold them a scam. This office will continue to make every effort to deter criminals from engaging in these incredibly damaging financial crimes.”
“As alleged, these defendants lied about their intentions regarding investors’ money, pocketing a substantial portion for personal use,” said Sweeney. “So long as there are people with money to invest, there will likely be investment swindlers eager to take their money under false pretenses. The FBI will continue to work with its law enforcement and private sector partners to investigate those whose greed-based schemes rob individuals of their hard-earned money.”
If convicted of all charges, the defendants each face possible prison terms, fines, up to five years of supervised release, and a $1,000 special assessment.
The criminal case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Robert J. Livermore. The SEC in Colorado investigated and litigated the civil securities fraud charges which formed the basis of the criminal prosecution.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Hospice Facility and Its Manager/Majority Owner to Pay Approximately $5.86 Million to Resolve Continuous Home Care Hospice Fraud AllegationsRead the Press Release
Jackson, Miss. - St. Joseph Hospice Entities, which consists of 13 hospice facilities in Mississippi, Louisiana, Texas and Alabama, and Patrick T. Mitchell, its majority owner and manager, have agreed to pay the United States $5,867,518 under the False Claims Act to resolve allegations that they submitted false claims for delivery of continuous home care hospice services to patients who were not entitled to receive continuous care hospice level treatment, announced United States Attorney Gregory K. Davis, Special Agent in Charge Derrick L. Jackson with the U.S. Department of Health and Human Services - Office of Inspector General, and FBI Special Agent in Charge Donald Alway.
Continuous home care hospice services, sometimes called crisis care services, are provided to hospice-eligible patients in moments of crisis resulting from acute medical symptoms. This level of care is available to a patient when the patient’s acute medical symptoms require immediate and short-term skilled nursing services, allowing the patient to remain in his/her home during a very difficult time. Medicare pays for continuous care hospice services at a rate that is nearly 6 times that of the daily rate for routine home hospice care. The continuous home care reimbursement rate is the highest daily rate a hospice can bill Medicare. Because continuous home care hospice services are limited to moments of crisis and have stringent criteria, they are rarely used.
During the government’s investigation, it was discovered that St. Joseph Hospice was an outlier in its use and billing of continuous care hospice services. The government found that there were a significant number of patients who received continuous care hospice services when there was no crisis, and thus, they were not eligible for such services. The result of this misuse of the continuous home care hospice benefit was millions of dollars of false claims submitted to and paid by the government.
"While the government finds it necessary to provide this very important benefit to its citizens during a time of crisis, it is sometimes the case that companies and/or individuals will abuse the provision of this service through aggressive marketing practices, thrusting patients into services they really do not need in order to increase the company’s reimbursement rate and its bottom line," said United States Attorney Gregory K. Davis. "We will continue to investigate and root out this and other types of healthcare fraud. This is a very important aspect of the work we do, particularly given that healthcare fraud costs taxpayers tens of billions of dollars a year." In addition to saving taxpayer dollars, the United States Attorney believes that such efforts will be important in continuing to stem the tide of rising health care costs.
"St. Joseph Hospice Entities allegedly maxed out Medicare’s hospice benefit to make as much profit as possible," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The Office of Inspector General will continue to work aggressively to eliminate this type of greed in our health care system."
"This type of fraud steals from government programs designed to assist deserving patients," stated Donald Alway, Special Agent in Charge of the FBI in Mississippi. "Our success in this case is an excellent example of the effectiveness of collaboration between federal agencies, and evidence of our commitment to protect the American taxpayer and the integrity of our federal assistance programs."
The allegations in this case arose from a lawsuit filed by 3 whistleblowers, who were former employees of the company, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Such private citizens are referred to as relators. The relators in this case will receive a little more than $1 million from the recovery announced today. The case is styled as United States v. St. Joseph Hospice, et al., Case No. 1:12cv393 (S.D. Miss.).
The investigation and settlement were the result of a coordinated effort among the Office of the United States Attorney for the Southern District of Mississippi, the Federal Bureau of Investigation and the U.S. Department of Health and Human Services - Office of Inspector General. The United States was represented by Assistant United States Attorney Angela Givens Williams.
In addition to the payment of the settlement amount, St. Joseph Hospice Entities has agreed to submit to ongoing monitoring by HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Granite Bay Man Pleads Guilty in Scheme That Defrauded Investors in “Green” Cleaning Product CompanyRead the Press Release
SACRAMENTO, Calif. — Brent Lee Newbold, 58, of Granite Bay, pleaded guilty today to wire fraud and agreed to submit to a restitution order of at least $2.9 million, United States Attorney Benjamin B. Wagner announced.
Newbold was employed as chief executive officer of Holy Cow, a Rocklin-based business that produced a “green” cleaning product, marketed to stores such as Wal‑Mart, ACE Hardware, and Bed, Bath & Beyond.
According to court documents, between October 2007 and January 2010, Newbold engaged in a scheme to defraud investors and lenders. He made a variety of misrepresentations to investors about the financial health of the company, including the company’s debt levels and how invested funds would be used. In fact, Holy Cow bore a significant amount of debt, and Newbold continued to assume additional debt related to Holy Cow. Newbold used investor funds for nonbusiness purposes, diverting it to himself and his wife, paying his mortgage, and paying previous investors.
Based on Newbold’s claims, a corporate investor, Spence Enterprises, invested $2 million in Holy Cow. According to the plea agreement, Newbold, without authorization, diverted over $950,000 from Holy Cow corporate accounts to himself, his wife, his mortgage company, and his previous lenders and investors. Over $550,000 of that money had been invested by Spence Enterprises. When Spence Enterprises learned of Newbold’s diversion of money, they reprimanded him and told him to repay the money.
After he was confronted by Spence Enterprises, Newbold opened a secret account at American River Bank in the name of Holy Cow Inc. Newbold was the sole signatory on the account, and the account statements were sent to Newbold’s residence. Newbold used the bank account to receive funds from undisclosed individual investors in Holy Cow.
Between July 2008 and January 2010, Newbold solicited over 10 individual investors. Newbold falsely claimed that he was authorized to act on behalf of Holy Cow; that he owned Holy Cow; he owned the majority of Holy Cow stock; Holy Cow was financially sound, stable and profitable. In some cases, Newbold provided his individual investors with false Holy Cow stock certificates, false Holy Cow purchase order reports, and corporate promissory notes.
By December 2009, Spence Enterprises put Holy Cow into bankruptcy as a result of the unauthorized and undisclosed debt Newbold was taking on in connection with Holy Cow. The gross loss amount in this case is over $2.9 million.
“The defendant raised money from investors through misrepresentations and false promises,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “Then, without authorization, the defendant diverted approximately $1 million to himself, his wife, his mortgage company, and his previous lenders and investors. This chain of events led the company into bankruptcy. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.
Newbold is scheduled to be sentenced on December 3, 2015, by United States District Judge Morrison C. England Jr. Newbold faces a maximum sentence of 20 years in prison, a $250,000 fine, and a three-year term of supervised release. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Genzyme Corporation to Pay $32.5 Million to Resolve Criminal Liability Relating to SeprafilmRead the Press Release
Sanofi Subsidiary Admits Unlawful Conduct and Agrees to Enhance its Compliance Program
Genzyme Corporation, a wholly-owned biotechnology subsidiary of French pharmaceutical company Sanofi, agreed today to resolve criminal charges that it violated the federal Food, Drug and Cosmetic Act (FDCA) with regard to the unlawful distribution of Seprafilm, a surgical device it markets and promotes, the Justice Department announced.
As part of the agreed resolution, the department filed a two-count criminal information in the U.S. District Court for the Middle District of Florida charging that between 2005 and 2010, Genzyme caused a medical device to become adulterated and misbranded while being held for sale. The conduct occurred prior to Sanofi’s acquisition of Genzyme, based in Cambridge, Massachusetts, in 2011. To resolve these charges, Genzyme agreed to enter into a deferred prosecution agreement with the government for a term of at least two years. As part of the agreement, Genzyme agreed to admit to and accept responsibility for the facts underlying the charges and pay a monetary penalty of $32,587,439. It further agreed to undertake several groundbreaking measures to enhance its internal compliance program. The agreement also acknowledges the significant level of cooperation Genzyme provided to the government during its investigation as well as the company’s independent remediation efforts.
Along with the information, the government also filed a consent motion with the court, requesting that its case against Genzyme be stayed during the term of the agreement. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
Today’s agreement is in addition to a separate $22.28 million civil agreement the government reached with Genzyme in December 2013 to resolve allegations under the False Claims Act related to Seprafilm. After today’s agreement, Genzyme will have paid almost $55 million to resolve government allegations regarding Seprafilm. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
“Today’s action demonstrates that the Department of Justice will evaluate the facts of each case and choose the most appropriate tool of the several available to it to best address criminal misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The deferred prosecution agreement with Genzyme is yet another example of the department’s continuing efforts to ensure that pharmaceutical and medical device manufacturers adhere to laws and regulations that have been put in place to protect the health and safety of the American public.”
According to the papers filed in the district court today, Seprafilm is a clear piece of film that can be applied to internal tissues during pelvic and abdominal surgeries to reduce the formation of adhesions—bands of scar tissue that can form between traumatized tissues and organs after surgery, causing them to stick together. Seprafilm was approved by the U.S. Food and Drug Administration (FDA) for use in patients undergoing open abdominal or pelvic laparotomy, which is a traditional surgical technique that utilizes a relatively large incision to permit the surgeon to open and view the patient’s abdominopelvic contents. Over time, laparotomy became a less common surgical technique in favor of laparoscopic surgery, which is perceived to have several advantages for the patient.
To respond to the diminishing number of laparotomies performed, some Genzyme sales representatives taught surgeons and other medical staff how to mix the Seprafilm sheets into a liquid “slurry” that could be squirted through the narrow tubes used during laparoscopic surgery, even though Seprafilm was never indicated or FDA-approved for use in laparoscopic procedures. Genzyme sales representatives’ participation in the preparation of slurry in the operating room caused Seprafilm to become adulterated, according to the criminal charges.
During the course of the government’s investigation regarding Seprafilm slurry, Genzyme voluntarily disclosed to the government that it had distributed promotional material for Seprafilm that implied that Seprafilm had been proven safe and effective for use in gynecologic cancer surgeries, even though Seprafilm’s FDA-approved label cautioned that the device had not been clinically evaluated in the presence of malignancies. Genzyme based its claim on a study that involved only fourteen patients, which was far too few to support such an assertion. A separate count in the government’s information charges that Genzyme’s use of this misleading promotional material caused Seprafilm to become misbranded while held for sale.
“Patients rely heavily on the integrity and efficacy of claims made by manufacturers of medical products,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “When manufacturers make misleading statements about using their products in ways that have not been approved by the FDA, patient care, confidence, and safety are put at risk.”
The case has been handled by Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Simon Gaugush, Chief of the General Crimes Section at the U.S. Attorney’s Office of the Middle District of Florida, with support from FDA’s Office of Criminal Investigations and Office of Chief Counsel.
Fresno Podiatrist Indicted for Health Care FraudRead the Press Release
FRESNO, Calif. — A federal grand jury returned a 20-count indictment today against Franklyn Collier Jones, 52, of Fresno, charging him with health care fraud and making false statements relating to a health care matter, United States Attorney Benjamin B. Wagner announced.
According to court documents, Jones practiced podiatry in Fresno. Between 2010 and 2015, Jones allegedly billed Medicare for surgical procedures called avulsions and matrixectomies that he did not perform. In fact, Jones allegedly performed only routine foot care on the patients, such as clipping of toe nails. Jones allegedly billed more than $141,000 for these surgical procedures during this time period.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Mark J. McKeon and Patrick R. Delahunty are prosecuting the case.
If convicted, Jones faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each count of health care fraud; and 5 years in prison and a $250,000 fine for each count of making a false statement. 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.
Former Texas D.P.S. Employee Charged by Federal Indictment for Illegal Drivers License SchemeRead the Press Release
In San Antonio today, federal and state authorities arrested 47-year-old Linda A. Perez for her alleged role in a an illegal driver’s license scheme announced United States Attorney Richard L. Durbin, Jr., Texas Department of Public Safety (DPS) Director Steven C. McCraw and Acting Special Agent in Charge Aristides “Harry” Jimenez, Homeland Security Investigations (HSI) San Antonio.
Perez is charged by federal grand jury indictment, returned yesterday, with one count of transfer of a false identification document and four counts of use of an interstate wire facility in aid of unlawful activity.
According to the indictment, from November 2014 until May 2015, the former DPS Driver’s License Division Customer Service Representative in San Antonio received bribes to process Texas driver’s licenses for undocumented aliens. The bribes she allegedly accepted amounted to between $1,000 and $2,000 for each fraudulent license. The indictment further alleges that Perez would input materially fraudulent information into the Texas DPS computer system in order to process and issue, by U.S. Mail, the driver’s license to the undocumented alien.
Perez had her initial appearance in federal court this afternoon. She was released on a $30,000 bond. No trial date has been scheduled. Upon conviction, Perez faces up to 15 years in federal prison on the transfer count and up to five years in federal prison on each of the remaining counts.
This investigation was conducted by the Texas Rangers along with HSI special agents. Assistant United States Attorney Tom Moore is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is considered innocent until proven guilty in a court of law.
Former Savannah ATF Task Force Officer Charged with Theft of Government MoneyRead the Press Release
Savannah, Ga. – Former ATF Task Force Officer Daryle McCormick has been arraigned on a charge that he fraudulently claimed to have worked approximately 800 hours of overtime resulting in more than $19,500 in additional wages.
“As a federal officer, McCormick was expected – at the very least – to obey the laws that he swore to enforce,” said U.S. Attorney John Horn. “The indictment alleges McCormick violated the law and the trust placed in him by bilking the government out of almost $20,000 in overtime for hours he never worked.”
“The integrity of law enforcement is just as much, if not more, at the heart of these allegations as the monetary loss amounts are. The allegations contained in these charges are serious and the government’s response to those allegations reflects it,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The DOJ OIG appreciates the efforts of the U.S. Attorney’s Office and the FBI to protect taxpayer funds and ensure that federal task force officers are held to the same high standards as any federal employee,” said Special Agent in Charge Robert Bourbon of the DOJ OIG’s Miami Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: From approximately November 25, 1996, to May 7, 2015, Daryle McCormick served as a police officer with Savannah-Chatham Metropolitan Police Department headquartered in Savannah, Georgia. From that position, McCormick became a federally‑deputized Task Force Officer with the U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”). McCormick served as a Task Force Officer with the ATF from approximately September 6, 2005 to June 17, 2014.
As an ATF Task Force Officer, McCormick was eligible to receive overtime pay for working more than eight hours per day. To be paid, McCormick was required to submit an overtime pay request to the ATF, listing the dates worked, the number of hours worked, and the general subject matter of the work. When submitting requests to be paid for overtime hours purportedly worked, McCormick made the following certification: “I certify that the above time was duly earned. I understand that my misstatement concerning the aforementioned time may be cause for dismissal.” Ultimately, when approved, payments for McCormick’s fraudulently claimed overtime came from the U.S. Department of Justice.
From October 2010 to September 2013, McCormick allegedly engaged in a scheme to unlawfully commit overtime fraud by repeatedly submitting overtime payment requests to the ATF for hours that he never worked. For example: the indictment alleges that: (1) McCormick claimed to work overtime on days when he had worked a full day with the ATF and had also worked up to an additional four hours at a second job for a local church; (2) McCormick claimed to have worked overtime conducting surveillance or undercover operations, even though no ATF operations occurred on those dates; and (3) McCormick claimed to have worked overtime conducting surveillance or undercover operations; however, McCormick never drafted reports summarizing the alleged ATF operations.
According to the indictment, from approximately October 18, 2010 to September 28, 2013, McCormick falsely claimed to have worked almost 800 hours in overtime when in fact, he had not worked those overtime hours. Based on those false overtime requests, the Department of Justice paid McCormick more than $19,500 for overtime hours that McCormick never worked.
On August 31, 2015, Daryle McCormick, 47, of Pooler, Georgia, was charged via criminal information with Theft of Government Money.
Members of the public are reminded that the information only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Justice Office of the Inspector General.
Special Assistant U.S Attorney Jeffrey W. Davis is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former New Jersey Resident Sentenced to 37 Months in Prison for Defrauding U.S. Subsidiary of Foreign Investment Bank of More Than $1.5 MillionRead the Press Release
TRENTON, N.J. - A former New Jersey resident who previously worked for the United States subsidiary of a foreign investment bank was sentenced today to 37 months in prison for orchestrating a scheme to defraud his former employer out of more than $1.5 million, U.S. Attorney Paul J. Fishman announced.
Michael Lieberman, 44, formerly of New Jersey and currently a resident of Huntersville, North Carolina, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of wire fraud for executing a scheme over the course of two years, through which he fraudulently transferred more than $1.5 million from accounts of his former employer to bank accounts he controlled. Judge Cooper imposed the sentenced today in Trenton federal court.
According to documents filed in this case and statements made in court:
Lieberman was employed by “Company A,” a United States-based subsidiary of an international investment bank, in its International Settlements Group in Iselin, New Jersey. Company A engaged in and settled cross-border securities transactions and acted as a settlement agent for similar securities transactions entered into by its broker-dealer clients. Company A’s International Settlements Group was responsible for, among other things, wiring funds to settle various securities transactions.
From June 2012 through May 2014, Lieberman devised a scheme to use his position in the International Settlements Group to initiate more than 50 separate fraudulent wire transfers of Company A’s money, directing the proceeds to bank accounts he either owned or controlled. Lieberman then spent Company A’s money for his own purposes, including purchasing a home in North Carolina, making tens of thousands of dollars in credit card payments and spending hundreds of thousands of dollars on hotels, airplane tickets, home furnishings, restaurant tabs and other expenditures.
Lieberman took various steps to conceal his fraudulent activities, including making fictitious entries in Company A’s bookkeeping system and supplying phony documents to others in order to cause them to make false entries in the company’s books and records reflecting fake profits on non-existent transactions.
In addition to the prison term, Judge Cooper sentenced Lieberman to two years of supervised release, ordered him to pay restitution of $1,640,822 and forfeited his house in North Carolina, which he had purchased with embezzled funds.
U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Richard M. Frankel in Newark with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Paul Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit, Zach Intrater, Chief of the General Crimes Unit, and Barbara Ward of the Asset Forfeiture and Money Laundering Unit, in Newark.
This arrest is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Defense counsel: Linda Pellegrino Esq., Newton, New Jersey
Former Director of Detox Center Convicted of Health Care Fraud and Aggravated Identity TheftRead the Press Release
BATON ROUGE – United States Attorney Walt Green announced the conviction of SHANTA R. BARNES, age 49, of Baton Rouge, Louisiana, for health care fraud and aggravated identity theft. Earlier today, BARNES appeared before U.S. District Judge James J. Brady and pled guilty. BARNES also admitted to the forfeiture allegations contained in the Indictment, which was previously returned by a federal grand jury.
According to court documents, BARNES served as the program director of an in-patient drug rehabilitation and detoxification treatment center in Baton Rouge known as Louisiana Health and Rehabilitation Options. As program director, BARNES had access to patients’ personal identifying information, including their dates of birth and Medicaid identification numbers. Through her scheme, BARNES unlawfully enriched herself by using patients’ information, without their knowledge or authorization, to fraudulently obtain powerful narcotic drugs, which she then diverted for her own benefit. By obtaining fraudulent prescriptions in the names of Medicaid recipients and causing the submission of fraudulent claims to Medicaid, BARNES drastically reduced her out-of-pocket costs. As a result of her scheme, BARNES obtained almost 6,000 80-mg oxycodone pills over a period of less than one year.
U.S. Attorney Green stated, “Today’s conviction is the latest example of my office’s commitment to combating health care fraud and drug diversion. This defendant abused her position of trust within a community health care provider and took unlawful advantage of her access to patient records in order to generate and fill dozens of fraudulent prescriptions for powerful and addictive controlled substances. In these types of cases, the defendant lines his or her pockets while fueling others’ painful addictions to controlled substances, attempting to hide criminal conduct behind the guise of being a medical professional. Not only is a serious federal crime, but these schemes are a disservice to the vast majority of medical professionals who are honest and committed to quality patient care. I appreciate all of the hard work and assistance my office has received in this investigation from the U.S. Department of Health & Human Services’ Office of Inspector General, the Drug Enforcement Administration, and our state partners.”
“Prescription drug abuse is an extremely serious problem, not just in Louisiana, but nationwide,” said DEA Assistant Special Agent in Charge Joseph Shepherd. “DEA and our law enforcement partners will continue to investigate professionals in the medical field who operate as drug peddlers. Those persons who disregard their ethical and legal obligations while dispensing pharmaceuticals will be forced to bear the consequences of their actions.”
CJ Porter, the Special Agent in Charge of the Dallas Regional Office for the US Department of Health and Human Services, Office of Inspector General - Investigations, stated: “Prescription drug fraud schemes are rampant, and often include medical identity theft. The criminal prosecution of this defendant, and those like her who are involved in these types of schemes, is an example of our ongoing efforts to address the national prescription drug crisis”
The case is being investigated by the U.S. Department of Health & Human Services’ Office of Inspector General and the Drug Enforcement Administration, with assistance from the Louisiana Department of Health and Hospitals and the Louisiana State Board of Nursing. The case is being prosecuted by Assistant U.S. Attorneys Cam T. Le and Jessica M.P. Thornhill.
Florida Woman Pleads Guilty to Bogus Loan SchemeRead the Press Release
BOSTON – A Florida woman pleaded guilty today in connection with an advance fee scheme involving approximately 100 victims throughout the United States, including many in Massachusetts.
Ann Elizabeth Ursiny, a/k/a Ann Stone, 51, pleaded guilty to 19 counts of mail fraud and 17 counts of wire fraud all in connection with a fraudulent advance fee scheme in which individuals were induced to pay up-front fees to Ursiny and her entity Trace Financial Group, Inc. (“Trace”) based on representations that those individuals would receive real estate loans, when in fact Ursiny never intended to make any such loans. Ursiny was indicted in May 2014. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Dec. 9, 2015. Ursiny’s codefendant, Robert O’Connor, pleaded guilty in June 2015 to participating in the same scheme by recruiting victims to apply for loans and pay the advance fees. O’Connor is scheduled to be sentenced on March 23, 2016.
From early 2010 to 2011, Ursiny recruited agents, including O’Connor, in several states to solicit individuals to apply for real estate loans through Trace and pay the advance fees. In return, the agents were paid a portion of those advance fees. Ursiny told prospective victims that Trace had successfully processed and disbursed many loans, when, in fact, none were ever disbursed. Ursiny focused the scheme on prospective applicants who had poor credit or whose homes were underwater, and represented that Trace could replace their mortgage with a new, smaller mortgage with lower mortgage interest payments. In fact, Trace never funded any of the loans, and failed to pay refunds as promised. Victims’ funds were used for Ursiny’s personal and family expenses, and to pay “commissions” to agents.
The charging statutes each provide a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Federal Jury Finds Francisco Melgar-Cabrera Guilty on Hobbs Act and Felony Murder Charges Arising from Armed Robbery of Two Albuquerque-Area Restaurants and the Murder of Stephanie Anderson in June 2009Read the Press Release
ALBUQUERQUE – A federal jury sitting in Albuquerque, N.M., today returned a guilty verdict against Francisco Melgar-Cabrera, 31, on Hobbs Act robbery and felony murder charges stemming from the armed robberies of two Albuquerque-area restaurants and murder of Stephanie Anderson in June 2009.
The guilty verdict was 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), Special Agent Carol K.O. Lee of the Albuquerque Division of the FBI, and Chief Gordon Eden, Jr., of the Albuquerque Police Department (APD).
In announcing the guilty verdict, U.S. Attorney Damon P. Martinez said, “Although today’s verdict cannot restore the loss of Stephanie Anderson, I hope that it will bring a measure of comfort and closure to her family and friends.” The U.S. Attorney also commended the officers and prosecutors who devoted more than six years to bring a justice to Ms. Anderson’s family and the others who were victimized by Melgar-Cabrera and his three cohorts, all of whom now stand convicted. “In particular, I want to recognize Assistant U.S. Attorney Louis E. Valencia and ATF Special Agent Paul Jessen, both of whom were on the case from the inception of the investigation and delayed retirement plans until all defendants were convicted.”
“I am extremely proud of the work of this office and our law enforcement partners. I would like to recognize the investigative efforts of ATF Special Agents and especially the efforts of ATF Special Agent Paul Jessen, who for years doggedly pursued Melgar-Cabrera for his role in the 2009 murder of Stephanie Anderson. I hope today's verdict of guilt brings some peace to Stephanie’s family,” stated ATF Special Agent in Charge Thomas G Atteberry. “ATF is committed to working with our law enforcement partners – at home and around the world – to take violent criminals off the streets and bring them to justice.”
“Many professionals from a multitude of agencies worked long and hard to make this day possible. The tragic death of Stephanie Anderson demanded justice, and the FBI and its partners in this country and in El Salvador made sure justice was served,” said FBI Special Agent in Charge Carol K.O. Lee. “In addition to the FBI Special Agents and other staff involved in this case, I want to thank the FBI Legal Attaché in San Salvador, the U.S. Department of State, U.S. Department of Justice Office of International Affairs, U.S. Attorney's Office, the FBI's Transnational Anti-Gang Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, U.S. Immigration and Customs Enforcement, the Government of El Salvador, and the Albuquerque Police Department.”
“We hope this step brings a sense of closure and justice to Ms. Anderson’s family and all of those involved,” APD Chief Gorden Eden said. “Our goal in law enforcement is to pursue justice no matter how long it takes or how many hurdles we may face. I am thankful for all of our law enforcement partnerships and the positive impact we are able to have especially when dangerous criminals like Melgar-Cabrera face extended federal sentences.”
The long delay in bringing Melgar-Cabrera, a Salvadoran national, to trial was occasioned by his flight to El Salvador shortly after Ms. Anderson was murdered. He was arrested on Sept. 14, 2013, by Salvadoran law enforcement authorities, and was extradited to the United States on May 21, 2014. By that time, Melgar-Cabrera’s three co-defendants had entered guilty pleas and had been sentenced.
Melgar-Cabrera and two co-defendants Marvin Aguilar-Lopez and Pablo De Leon Ortiz, both Salvadoran nationals, were indicted in Oct. 2009, and charged with violating the Hobbs Act by robbing a business involved in interstate commerce, felony murder and firearms offenses. The charges arose from the armed robbery of a Denny’s Restaurant located at 1602 Coors Blvd. NW in Albuquerque on June 20, 2009, and the murder of Ms. Anderson, a cook at the restaurant.
In April 2010, the indictment was superseded to add Melgar-Cabrera’s brother, Jose Melgar-Cabrera, also a Salvadoran national, as a defendant. Jose Melgar-Cabrera was charged as an accessory after the fact for assisting Melgar-Cabrera’s flight to avoid apprehension. A second superseding indictment, filed in Oct. 2010, added four new robbery and firearms offenses against Melgar-Cabrera, Aguilar-Lopez and De Leon Ortiz that arose out of the armed robbery of a Lone Star Steakhouse & Saloon located at 10019 Coors Blvd. NW in Albuquerque on June 13, 2009.
The trial of Melgar-Cabrera for the armed robbery of two businesses involved in interstate commerce and felony murder began on Aug. 25, 2015 and ended today when the jury returned a verdict of guilty on all three charges. During the trial, the jury learned that Melgar-Cabrera, Aguilar-Lopez and De Leon Ortiz robbed the Lone Star Steakhouse at gunpoint at 11:00 a.m. on June 13, 2009. Witnesses testified that they saw two masked men with firearms rush the restaurant’s general manager, who was on his way to deposit the prior day’s receipts, and push their guns into his stomach. One of the masked men took the money bag from the general manager and the other took money from the general manager’s wallet. A third man drove the two masked men away in a gold-colored car. The evidence revealed that Melgar-Cabrera was the man who drove the two masked men, Aguilar-Lopez and De Leon Ortiz, away from the Lone Star Steakhouse.
The evidence also established that on the morning of June 20, 2009, Melgar-Cabrera, Aguilar-Lopez and De Leon-Ortiz, who were masked and armed, charged into the Denny’s Restaurant, brandished their weapons, and demanded that everyone get down on the floor. The men were in the Denny’s for a few minutes during which a frenzy of activity ensued including the following: a restaurant employee dropped a tray of beverages and Aguilar-Lopez slipped on the wet floor and fired his weapon; De Leon-Ortiz grabbed the manager, held a gun to his head, and threatened to kill him if he didn’t turn over the restaurant’s money; and Melgar-Cabrera threatened a waitress and demanded that she open the cash register. After Melgar-Cabrera and De Leon-Ortiz grabbed cash out of the register, the three men fled from the restaurant. Shortly thereafter, Ms. Anderson, who was struck by the bullet fired by Aguilar-Lopez, died of a gunshot wound.
About 20 minutes later, APD officers who were conducting surveillance in the area of the Denny’s restaurant as part of a robbery tactical plan followed Aguilar-Lopez as he drove to Melgar-Cabrera’s residence where they arrested him. The APD officers found evidence of the Denny’s robbery, including a revolver, a rifle, trays of rolled coins and Denny’s gift cards, in the car. De Leon-Ortiz was arrested by APD officers about 40 minutes after the robbery. Melgar-Cabrera, who were in his residence when Aguilar-Lopez was arrested, fled out the back door. Thereafter, Melgar-Cabrera fled to El Salvador with the aid of his brother.
Melgar-Cabrera has been in federal custody since he was extradited to the United States in May 2014 and remains detained pending a sentencing hearing, which has yet to be scheduled. At sentencing, Melgar-Cabrera faces a statutory maximum penalty of 20 years on each of the two robbery charges and a statutory maximum penalty of life imprisonment on the felony murder charge.
Aguilar-Lopez and De Leon Ortiz each entered guilty pleas to armed robbery and felony murder charges. Aguilar-Lopez was sentenced to 40 years in prison and De Leon Ortiz was sentenced to a 35-year term of imprisonment. They will be deported after completing their prison sentences. Jose Melgar-Cabrera pled guilty to being an accessory after the fact and was sentenced to 48 months in prison. After completing his prison sentence, Jose Melgar-Cabrera was deported to El Salvador.
This case was investigated by the Albuquerque offices of ATF and FBI and APD, and is being prosecuted by Assistant U.S. Attorneys Louis E. Valencia and Presiliano A. Torrez.
Eric Michael Johnson Sentenced to 240 Months in Prison on Federal Child Pornography and Travel ChargesRead the Press Release
KNOXVILLE, Tenn. – On Sept. 3, 2015, Eric Michael Johnson, 29, of Jamesville, Wis., was sentenced in the by the Honorable Pamela R. Reeves, U.S. District Judge, to serve 240 months in prison for using a minor to produce child pornography and traveling interstate for the purpose of having illicit sex with a minor. Following his release from prison, Johnson will be supervised by the U.S. Probation Office for a term of 10 years and will be required to register with the sex offender registry in any state in which he resides, works, or attends school.
Johnson pleaded guilty in April 2015 to federal charges stemming from his October 2014 arrest in Knoxville. Johnson exchanged email messages with an undercover law enforcement officer in which he expressed interest in having sex with a 12-year-old female. He drove from Wisconsin to Knoxville for the purpose of having sex with the girl. A search warrant for his cellular telephone revealed that he had previously sexually molested a minor female and made video recordings of the molestation, leading to additional charges pertaining to the production of child pornography.
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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District Man Pleads Guilty to Sexually Abusing Child RelativeRead the Press Release
WASHINGTON – A 31-year-old man, from Washington, D.C., pled guilty today to a felony charge stemming from the sexual abuse of a child who is a relative, Acting U.S. Attorney Vincent H. Cohen, Jr. announced
The defendant, who is not identified here to protect the privacy of the victim, pled guilty in the Superior Court of the District of Columbia to one count of first-degree child sexual abuse. The plea, which is contingent upon the Court’s approval, calls for a prison sentence of 135 months, and requires the defendant to register for life as a sex offender. The Honorable Michael Ryan scheduled sentencing for Nov. 13, 2015.
The charge stems from the man’s sexual abuse of a female relative when she was 10 to 11 years old. According to the government’s evidence, the defendant, on multiple occasions, went to the child’s home in Northwest Washington, where he engaged in various sexual acts with her. In May of this year, the girl disclosed vaginal discomfort to her mother, and was taken to Children’s National Medical Center. There, doctors diagnosed the child with Trichomonas, a sexually transmitted disease (STD). Afterwards, the child disclosed that the defendant had been sexually abusing her for the past one and a half to two years.
After the defendant’s arrest in July, the government obtained a urine sample from him, which was sent to the Johns Hopkins University’s STD Laboratory. The lab results showed that he possessed Trichomonas, the same STD he transferred to the child. The defendant has been in custody since his arrest.
In announcing the plea, Acting U.S. Attorney Cohen commended the work of the detectives of the Metropolitan Police Department’s Youth Investigations Division. He acknowledged the critical services provided to the complainant at the District of Columbia Children’s Advocacy Center, and the specialized medical treatment provided at the Children’s National Medical Center. He further commended the vital assistance provided by Dr. Jonathan Zenilman, Dr. Charlotte Gaydos, and Laboratory Manager Laura Dize from the Infectious Diseases Department at Johns Hopkins University. Finally, he commended the efforts of staff from the U.S. Attorney’s Office, including Child Forensic Interview Specialists Tracy Owusu and Karen Giannakoulias; Victim/Witness Advocate Veronica Vaughn; Paralegal Specialist Joyce Arthur; Legal Intern Allison Denton, and Assistant U.S. Attorney John L. Hill, who prosecuted the case.
Dea-Led Multi-Agency Task Force Dismantles Large Marijuana Grow Operation in Cotopaxi and Westcliffe ColoradoRead the Press Release
DENVER – On Tuesday, September 1, 2015, DEA-led special agents, task force officers and other members of law enforcement, including the Sheriffs’ Offices of Custer and Fremont Counties, executed eight search and arrest warrants in and around the towns of Cotopaxi and Westcliffe, Colorado. The warrants were the result of a large multi-jurisdictional investigation into the illegal growth and distribution of marijuana. As a result of the search warrants, over 1,000 marijuana plants were found, as were approximately 50 pounds of dried marijuana, 28 firearms (13 rifles, 8 shotguns and 7 handguns), and over $25,000 in cash. In addition to the seizures, a superseding indictment was obtained that charged 20 individuals with Conspiracy and marijuana trafficking. Of the 20 defendants charged, 17 are in custody. The remaining defendants are fugitives.
According to court documents, the investigation began in May of 2014, where after a traffic stop, a drug investigation began. During the investigation agents and officers noted that a target vehicle left Cotopaxi on October 20, 2014. That vehicle, which was with another vehicle traveling in tandem, was pulled over on October 21, 2014 in Pennsylvania. As a result of that traffic stop, three duffel bags containing approximately 34 pounds of marijuana were found in the car. On November 3, 2014, another target vehicle under surveillance was followed to a UPS store in Colorado Springs, where the occupants unloaded two large boxes, using the UPS service to send them to Florida addresses. The boxes were seized. Later UPS called stating that they had two additional boxes dropped off containing marijuana at a different Colorado Springs UPS store. Those boxes were seized as well. The packages in total contained approximately 26 pounds of marijuana.
As a result of the seizure of marijuana from vehicles leaving Cotopaxi and going to locations out of state, the U.S. Attorney’s Office, in conjunction with the DEA, obtained the search and arrest warrants. Those warrants were executed.
All 20 defendants face a variety of drug trafficking charges, including Conspiracy to distribute and possess with intent to distribute more than 1,000 plants of marijuana. They each face penalties of not less than 10 years, and up to life in federal prison.
The search warrants were executed at addresses in Custer and Fremont Counties. The Sheriffs and their offices for both counties were invaluable during the investigation and during the execution of the warrants. Residents from both counties had made multiple complaints about the defendants’ conduct not only to law enforcement, but also to elected officials. As this investigation is on-going, additional arrests are possible.
“This heavily armed, rogue drug trafficking organization was transporting a substantial amount of marijuana to people outside Colorado,” said U.S. Attorney John Walsh. “And the drug traffickers were making a large profit in return.”
“Colorado’s permissive Marijuana policies and laws continue to be exploited by large scale Marijuana trafficking organizations, who are establishing their Marijuana grow operations in Colorado to support their nationwide Marijuana distribution network,” said DEA Denver Division Special Agent in Charge Barbra Roach.
“I would like to extend my appreciation to the U.S. Attorney’s Office, DEA, Fremont County Sheriff’s Office, Pueblo County Sheriff’s Office and the Pueblo Police Department for their direct assistance in this operation,” said Custer County Sheriff Shannon K. Byerly. “Their help was critical in conducting this without incident. I would also like to recognize the efforts of the men and women of the Custer County Sheriff’s Office who contributed to this mission. This was an important step to gain control over the illegal production and sales of Marijuana in our area and we will continue to investigate those attempting to take advantage of the Marijuana laws in Colorado. Our communities earned an important victory today.”
“Because of the negative impact illegal drug trafficking has on our communities, we are very appreciative of the superb relationships that have been fostered between the federal agencies and all the local agencies involved. With this cooperative effort, we have come together to address a mutual problem,” said Fremont County Undersheriff Ty Martin.
“ATF maintains a strong relationship with the DEA and is committed to working with them and all of our Federal, State and Local partners to combat firearm and narcotic violations,” said ATF Denver Division Acting Special Agent in Charge Ron Humphreis.
“The indictment of these individuals is due to the successful efforts of various state and federal law enforcement agencies working together. IRS Criminal Investigation special agents are uniquely trained to follow the money and provide financial expertise to the overall investigation,” said Steven Osborne, Acting Special Agent in Charge of IRS Criminal Investigation, Denver Field Office.
The following agencies were involved in the execution of the search and arrest warrants: the DEA, IRS Criminal Investigation, ATF, Immigration and Customs Enforcements (ICE) Homeland Security Investigations (HSI), U.S. Marshals Service, the El Paso County Sheriff’s Department, the Pueblo County Sheriff’s Department, the Pueblo Police Department, the Fremont County Sheriff’s Department, the Florence Police Department, the Colorado State Patrol, the Douglas County Sheriff’s Department, and the Custer County Sheriff’s Department.
The defendants are being prosecuted by Assistant U.S. Attorney Zachary Phillips.
The charges outlined above are allegations, and the defendants are presumed innocent unless and until proven guilty.
Danbury Woman Involved in Home Invasion Robberies Sentenced to 3 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CASEY KERSHAW, 27, of Danbury, was sentenced yesterday by U.S. District Judge Stefan R. Underhill in Bridgeport to 36 months of imprisonment, followed by three years of supervised release, for participating in Danbury-area violent home invasion robberies of illegal drugs and drug trafficking proceeds.
According to court documents and statements made in court, in January 2013 the Danbury Police Department began investigating a narcotics trafficking network that maintained a series of drug distribution locations, known as trap houses, in Danbury, out of which members of the organization sold crack and heroin. The organization also rented hotel rooms where they packaged and distributed narcotics. During the investigation, law enforcement learned that the individuals who headed the drug trafficking ring had organized and committed armed home invasion robberies of marijuana dealers.
On January 30, 2013, KERSHAW drove four of her co-defendants to the residence of a known marijuana dealer. The men, some of whom were armed with firearms, then forced entry into the residence. At the time, the victim of the robbery was with his mother, his girlfriend, their infant child and a friend. Once inside, one of the defendants pistol whipped the victim and demanded that he give them drugs and money. The victim then gave the defendants a bag containing approximately $30,000 and one pound of marijuana. The defendants then fled. KERSHAW picked up her co-defendants and drove them to her residence. At KERSHAW’s residence, the co-defendants divided the money, with KERSHAW receiving $2,000. KERSHAW and her co-defendants then went to the Mohegan Sun Casino.
KERSHAW also was involved in the planning of a robbery that occurred on February 18, 2013. During this robbery, one of KERSHAW’s co-defendants struck a male victim in the head with a handgun repeatedly before dropping the gun during a struggle. Investigators subsequently recovered the gun and found that it was fully loaded. After this robbery, the co-defendants gathered at KERSHAW’s residence to re-group.
The investigation also revealed that KERSHAW had been involved in drug trafficking and had allowed her co-defendants to store firearms at her residence.
KERSHAW has been detained since her arrest on October 16, 2013. On October 14, 2014, she pleaded guilty to one count of interference with commerce by robbery.
This matter has been investigated by the Drug Enforcement Administration’s New Haven Task Force and the Danbury Police Department. The DEA Task Force includes personnel from the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia, Meriden, East Haven and Derby Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Tracy Dayton and Vanessa Richards.
Clovis Man Indicted for Producing Fraudulent California Driver’s Licences and Counterfeiting MoneyRead the Press Release
FRESNO, Calif. — A federal grand jury returned a six-count indictment today against Larry Landseadal, 46, of Clovis, charging him with production of false identification documents, possession of false identification documents, possession of document-making implements, possession of 15 or more fraudulent counterfeit access devices, counterfeiting United States currency and possession of images for counterfeiting United States currency, United States Attorney Benjamin B. Wagner announced.
According to court documents, Landseadal possessed over 260 profiles of individuals, including their names, social security numbers, and other personal identifying information. He also produced false California driver’s licenses and possessed both counterfeit United States currency and images used to counterfeit United States currency.
This case is the product of an investigation by the United States Secret Service, the Clovis Police Department, and the Fresno Police Department. Assistant United States Attorney Mia A. Giacomazzi is prosecuting the case.
If convicted, Landseadal faces a maximum statutory penalty of 30 years 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.
Chamois Man Indicted for Manufacturing Meth, Possessing Two BombsRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Chamois, Mo., man has been indicted by a federal grand jury for manufacturing methamphetamine and for possessing two bombs.
Zachary Scott Reed, 22, of Chamois, was charged in a two-count indictment returned under seal by a federal grand jury in Jefferson City, Mo., on July 15, 2015. That indictment was unsealed and made public upon Reed’s arrest and initial court appearance on Tuesday, Sept. 1, 2015. Reed remains in federal custody pending a detention hearing, which has not yet been scheduled.
The federal indictment alleges that Reed manufactured methamphetamine on Sept. 7, 2014, in Osage County, Mo.
The indictment also alleges that Reed illegally possessed an incendiary device labeled “Fragmenting Grenade” and an incendiary device labeled “Concession (sic) Grenade.” According to court documents, the two explosive bombs, which contained rusty nails, were designed as improvised explosive weapons. The two bombs and a methamphetamine lab were seized by law enforcement officers during the execution of a search warrant at Reed’s residence on Sept. 7, 2014.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lake Area Narcotics Enforcement Group and the Osage County, Mo., Sheriff’s Department.
Cahokia 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 D. Bradley, 26, Cahokia, IL, was arraigned on an Indictment charging him with the Unlawful Possession of a Firearm by a Previously Convicted Felon. Bradley’s trial is scheduled for November 2, 2014, and he was ordered held without bond until that time.
The indictment alleges that, on July 18, 2015, Bradley unlawfully possessed a Ruger, .9mm pistol, after having been previously convicted of Second Degree Murder 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 following incarceration.
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 Fairview Heights Police Department. The case is assigned to Assistant United States Attorney Angela Scott.
Buffalo man convicted of production, receipt and 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 a federal jury has convicted Paul F. Archambault, Jr., 29, of Buffalo, NY, of production, receipt and possession of child pornography. The charges carry a mandatory minimum penalty of 25 years in prison, a maximum of 50 years, and a fine of $250,000.
Assistant U.S. Attorneys Aaron J. Mango and Scott S. Allen, Jr., who handled the prosecution of the case, stated that in August 2012, the defendant contacted the minor victim via MeetMe.com, a social networking website. Archambault later enticed that minor victim to engage in sexually explicit conduct for the purpose of producing visual depictions. The defendant was also found guilty of two counts of receipt of child pornography for images he obtained from the minor victim via email, and one count of possessing child pornography on a SD card, located within one of the defendant’s two cellular phones.
Archambault was previously convicted of possessing child pornography in the Northern District of New York in 2009.
The trial verdict is the result of an investigation on the part of Agents of the Federal Bureau of Investigation, and the United States Marshals Service, under the direction of Charles Salina.
Sentencing is scheduled for December 22, 2015 before U.S. District Judge Richard J. Arcara who presided over the trial of the case.
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.
Buffalo Police Officer Facing Third Civil Rights ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a superseding indictment charging Corey Krug, 40, of Buffalo, NY, with two additional counts of deprivation of rights under color of law. The charges carry a maximum penalty of 10 years and a $250,000.
Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that according to the superseding indictment, on February 4, 2011, while on duty, Krug used excessive force during the arrest of an individual identified as D.R. causing bodily injury.
In addition, the defendant was indicted on a charge of deprivation of rights under color of law for an incident on November 27, 2014 (Thanksgiving Day). According to a previously filed complaint, Krug pushed an individual known as D.F. to the ground on Chippewa Street, pushed his knee onto D.F’s chest and used his night stick to strike the victim repeatedly in the legs causing pain, swelling and bruising.
In the original indictment returned by the grant jury on August 27, 2015, Krug was charged with deprivation of rights under color of law and filing a false report for an incident on August 29, 2010 while he was on duty. According to the indictment, the defendant used unreasonable and excessive force against an individual identified as M.W. Later that day, Krug filed a use of force report but failed to disclose that he struck the victim during the incident with an “impact weapon” causing bodily injury.
Krug will be arraigned on September 8, 2015 at 10:30 a.m. before U.S. Magistrate Judge H. Kenneth Schroeder.
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.
Buffalo Man Pleads Guilty to Sex TraffickingRead 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 Kenneth White, 39, of Buffalo, NY, pleaded guilty to sex trafficking before U.S. District Judge William M. Skretny. The charge carries a minimum sentence of 15 years in prison, a maximum of life, and a $250,000 fine.
Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that White utilized force to cause five victims to engage in commercial sex acts between 2006 and 2012. The defendant received all of the money earned by the victims as a result of these acts. White knew that one of the victims was under 18 at the time. The defendant utilized the internet to advertise the victims and solicit customers.
The plea is the result of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and the Internal Revenue Service, Criminal Investigations Division, under the direction of under the direction of Special Agent-in- Charge Shantelle P. Kitchen.
Sentencing is scheduled for December 9, 2015 at 3:00 p.m. before Judge Skretny.
Bowling Green, Kentucky, Substitute Teacher Charged with Possession and Distribution of Child PornographyRead the Press Release
Arrest part of an international undercover investigation by Toronto, Ontario police
BOWLING GREEN, Ky. – A substitute teacher, formerly employed by the Bowling Green (Kentucky) School system, was charged in a criminal complaint this week with possession and distribution of child pornography announced United States Attorney John E. Kuhn, Jr.
Leon Lussier, age 49, of Bowling Green, Kentucky, was arrested on September 1, 2015, and appeared before United States Magistrate Judge H. Brent Brennenstuhl later that day.
According to an affidavit attached to the criminal complaint, the international investigation started in January 2015, when the Toronto, Ontario, Canada Police Service, Child Exploitation Section, received information regarding the investigation of a group of individuals involved in the sexual abuse of children, including the distribution of child pornography. On June 23, 2015, a Toronto Police Service Detective Constable logged into an undercover software account and observed a person with the username “I luv boys” was streaming child pornography videos by sharing his computer screen. The user streamed four videos containing child pornography. Further investigation led law enforcement to Lussier as the person with username “I luv boys.”
A search warrant of Lussier’s Bowling Green home resulted in the seizure of numerous computer media. A preview of an HP Pavilion by a Computer Forensics Agent revealed several videos containing child pornography. Several of the videos had been previously viewed in a chat room by an undercover officer. The videos were being live-streamed on a computer with an IP address assigned to Lussier.
If convicted at trial, Lussier faces not less than 5 years and not more than 25 years in prison, a 500,000.00 fine, and supervised release of at least five years and could be any number of years, including life. Lussier is being held in the custody of the United States Marshals Service pending a detention hearing scheduled for Friday, September 4, 2015, at 10:00 a.m. before Magistrate Judge Brennenstuhl.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless. This case is being investigated by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Canadian authorities, Bowling Green Police Department and U.S. Marshals Service.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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The charge of a person by a Criminal Complaint is an accusation only and that person is presumed innocent until and unless proven guilty.
Baltimore City Landfill Employee Admits to Stealing Scrap Metal from the Landfill for Personal GainRead the Press Release
Baltimore, Maryland – Michael Theodore Bennett, age 46, of Baltimore, an employee at the Baltimore City Landfill, pleaded guilty today to conspiracy to steal from a program receiving federal funds, wire fraud and failure to file a tax return in connection with a scheme in which employees stole scrap metal from the Baltimore City Landfill for personal gain.
The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
Baltimore City residents can deposit small amounts of trash and/or recyclables in dumpsters located near the main entrance of the Landfill, free of charge. Individuals or companies commercially hauling trash that have registered their vehicles with the City must obtained Landfill permits, and must deposit their trash in an open area located farther within the Landfill. Commercial haulers of trash must also pay a waste disposal fee of $67.50 per ton of trash deposited at the Landfill.
In addition to the revenue generated by the collection of disposal fees, Baltimore City’s waste management system generates revenue by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities, including household appliances, steel cables, copper wires, car parts, computer parts, door and window frames. The City awards contracts to private salvage companies to purchase and remove such scrap metal from its trash collection facilities.
DPW employees at the Landfill and other trash collection sites are required to segregate the recyclable scrap metal from general refuse and place it in separate bins provided by the salvage companies. The companies regularly pick up the scrap metal, weigh it and send a tonnage report to the City. Based on predetermined prices per ton, the City sends an invoice to the companies requesting payment for the value of the scrap metal the companies removed during a given period of time. Salvaging by employees, also referred to as “junking,” was strictly prohibited and employees were put on notice that any salvaging of metal constituted theft of City property.
From 2007 until May 2015, Bennett and other Landfill employees, including supervisor William Nemec, falsely represented to the DPW that they were performing the jobs for which they were hired when in fact, they used their paid positions during work hours to unlawfully collect and sell scrap metal for personal gain. Bennett and other employees used part of the proceeds of the sale of the scrap metal to pay other DPW employees for their help locating, setting aside, collecting and loading the scrap metal onto their trucks. Bennett and others paid cash to supervisors to look the other way and not report them of collecting and transporting the stolen scrap metal, including Nemec. Bennett and others under Nemec’s supervision also relied on Nemec to authorize and submit false time and attendance records to conceal the junking scheme.
Bennett and other employees at the Landfill used their personal cell phones to let each other know when and where recyclable scrap metals were being dumped at the Landfill and to coordinate their arrival at the private salvage yard. After collecting and creating piles of the scrap metal at various locations, Bennett and others transported the scrap metal using their personal pick-up trucks to a private salvage company, frequently making multiple trips during a single, eight-hour work shift. The stolen scrap metal that they sold to the private salvage company for cash resulted in a loss of revenue to the City totaling hundreds of thousands of dollars.
Bennett prepared and submitted false time and attendance records, which claimed he had been working, when he was instead illegally collecting and selling the scrap metal, resulting in wages being paid to Bennett for work he did not perform.
Bennett also admitted that he failed to report approximately $479,468 of income for tax years 2011, through 2013, the majority of which was obtained from the illegal junking scheme.
The loss to the City of Baltimore as a result of the junking scheme was $400,000, and the tax loss to the government for Bennett’s failure to file tax returns was $126,273. As part of his plea agreement, Bennett agreed to the entry of an order to pay restitution of $526,273, the total amount of the loss.
Bennett faces a maximum sentence of five years in prison for the conspiracy, 20 years in prison for wire fraud, and one year in prison for failure to file a tax return. U.S. District Judge Marvin J. Garbis has scheduled sentencing for December 21, 2015 at 10:00 a.m.
Former DPW employee Tamara Oliver Washington, age 55 and William Charles Nemec, Sr., age 55, both of Baltimore; and commercial haulers Mustafa Sharif, age 63, of Baltimore, and Adam Williams, Jr., age 52, of Randallstown, pleaded guilty to their participation in a related bribery scheme. Nemec also pleaded guilty to the “junking” scheme. Washington is scheduled to be sentenced on October 20, 2015, Williams on October 21 and Sharif on November 6, 2015. Washington and Nemec have each agreed to the entry of an order to pay $6 million in restitution. Sharif has agreed to forfeit and pay restitution of $500,000 and Williams has agreed to forfeit and pay restitution of $900,000.
United States Attorney Rod J. Rosenstein praised the FBI, IRS-CI, Baltimore Office of Inspector General and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Martin J. Clarke, who is prosecuting the case.
Arizona Man and U.S. Citizen Residing in Germany Convicted of Sexual AssaultRead the Press Release
Two men were convicted today following a five-day jury trial in the District of Arizona for the sexual assault of a 17-year-old female in Landstuhl, Germany.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John S. Leonardo of the District of Arizona, Special Agent James Boerner of the U.S. Army Criminal Investigative Command (CID), Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division and Assistant Director in Charge Andrew McCabe of the FBI’s Washington, D.C., Field Office made the announcement.
Joseph S. Martin, 20, of Peoria, Arizona, and Christopher J. Heikkila, 21, a U.S. citizen residing in Weilerbach, Germany, were each convicted of one count of sexual abuse and one count of abusive sexual contact. The sentencing hearing for Martin and Heikkila is scheduled for Nov. 16, 2015, before U.S. District Judge David G. Campbell of the District of Arizona, who presided over the trial.
According to the evidence presented at trial, on or about Oct. 19, 2013, Martin and Heikkila sexually assaulted a 17-year-old female in Landstuhl while she was incapacitated. At the time, Martin and Heikkila were employees of the Army & Air Force Exchange Service on Ramstein Air Force Base in Ramstein, Germany, as well as dependents of civilian employees of the military. The Military Extraterritorial Jurisdiction Act gives U.S. federal courts jurisdiction over felonies committed abroad by certain persons employed by or accompanying the U.S. military.
The trial evidence showed that, beginning on or before Oct. 13, 2013, Martin and Heikkila used social media websites to post comments and exchange a series of messages specifically targeting the victim and planning the sexual assault. The evidence further demonstrated that two men continued discussing the assault on social media after it occurred.
The case was investigated by Army CID and the FBI’s Phoenix Division and Washington Field Office. The case is being prosecuted by Trial Attorneys Christine Duey and Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Joseph E. Koehler of the District of Arizona.
2 September 2015
Violent Indianapolis heroin trafficking organization dismantledRead the Press Release
Indianapolis – United States Attorney Josh Minkler announced today the arrests of 11 members belonging to a drug trafficking organization which distributed heroin and methamphetamine in the Indianapolis area. Further, they ordered acts of violence against those perceived as competitors.
“This is the face of organized crime today. These defendants are some of the most violent in Indianapolis,” said Minkler. “Not only did they sell large quantities of narcotics but most had prior felony convictions, possessed and used firearms and threatened acts of violence in furtherance of their crimes.”
Beginning in December 2014 through August 2105, David McMichel, a/k/a White Boy, a/k/a David Webster 31, Indianapolis, allegedly ran a drug trafficking organization from his home on the Westside of Indianapolis. The McMichel Drug Trafficking Organization (MDTO) moved large quantities of heroin and methamphetamine from suppliers in Arizona to Indianapolis, Fort Wayne and other locations. The MDTO obtained most of its drug supply from Fernando Vaca-Mata, 32, and Jose Prieto, 33, to be redistributed to lower level dealers.
As leader of the MDTO, McMichel negotiated with suppliers to obtain pound quantities of the narcotics. Further, he distributed and supervised the delivery of the narcotics and acquisition of weapons, collected proceeds from the narcotics sales and arranged to store the narcotics in stash houses around Indianapolis.
Throughout the months’-long investigation, McMichel ran the MDTO from his home while on house arrest serving a sentence for his third felony conviction. According to the complaint, a court authorized wiretap intercepted McMichel ordering shootings. McMichel stated he had a “list a block long” of individuals he wanted dead. He had members of the MDTO obtain photographs from Facebook of some of his intended targets.
Based on the wiretap, law enforcement intervened and arrested James Caldwell, a/k/a Bo, who was in possession of a loaded 9mm handgun before any acts of violence could take place. Caldwell was on probation for manslaughter and could not legally possess a firearm.
Arrest and search warrants were served early this morning by federal, state and local law enforcement agencies. At 1220 N Groff Av, a suspect fired a handgun through the door of the bedroom she was occupying. Officers did not return fire and no one was injured. Over the nine-month investigation, 19 firearms, $160,000 in cash and several pounds of heroin, and methamphetamine were confiscated. Also recovered were two ballistic vests. Law enforcement documented 36 drug transactions in the furtherance of the drug organization’s goal of infesting the westside with heroin and methamphetamine.
Also arrested:
Sophia Gutierrez, 33
Steven Nichols, a/k/a Stevie, 39
Shewanna Jackson, 32
Tyrel Barker, a/k/a T, 48
James Caldwell, a/k/a Bo, 37
Michael Wrightsman, a/k/a Mike Mike, 42
Forest Toliver, a/k/a Bear, 33
Beronta Smith, a/k/a B12, 36
Jacob Dodson a/k/a Jake, 24, remains a fugitive
Steven Eldridge, Jr. a/k/a Little Stevie, 21, remains a fugitive.
“Violence and drug dealing go hand in hand” said DEA Assistant Special Agent in Charge Greg Westfall. “Attacking heroin traffickers in unison with our outstanding law enforcement partners is DEA’s number one priority.”
“The Indianapolis Metropolitan Police Department continues to work with our state and federal partners to reduce violence and drug trafficking in Indianapolis,” said Chief Rick Hite. “Today’s operation ends a long-term, sophisticated investigation with the arrest of twelve suspects involved in drug trafficking within our community. We will continue our commitment to make Indianapolis a safe place to work and raise a family.”
This case was jointly investigated by the Drug Enforcement Administration, Hamilton-Boone County Drug Task Force, Bureau of Alcohol Tobacco Firearms and Explosives, Indianapolis Metropolitan Police Department, Metro Drug Task Force and the Marion County Prosecutor’s Office.
According to Assistant United States Attorney Jeffrey D. Preston who is prosecuting this case for the government, all defendants face decades of time in federal prison if convicted.
A complaint is merely a charge and all defendants are presumed innocent until proven guilty in a federal court.
Violent Career Criminal Sentenced to 50 Years in PrisonRead the Press Release
EUGENE, OR – Thomas William Cornelius, Jr., age 50, of Coos County, Oregon, was sentenced on Tuesday, September 1, 2015, by Chief U.S. District Judge Anne Aiken to 50 years in prison for being a felon in possession of firearms and for violent assaults he committed in prison while awaiting trial.
Cornelius, who has a lengthy criminal record, began burglarizing residences throughout Oregon shortly after being released from prison in August 2010. Cornelius forcibly broke into homes and, while armed with a loaded gun, stole firearms, jewelry, cash and electronics. By May 2011, Cornelius had burglarized 25 homes in Coos, Curry, Lane and Douglas counties. While returning from a vacation in Hawaii, Cornelius was stopped for speeding by an Oregon State trooper. The trooper arrested Cornelius after discovering two loaded pistols in the trunk of his rental car, which he had stolen during prior burglaries.
A subsequent investigation by the Oregon State Police and the Bureau of Alcohol, Tobacco and Firearms led to the recovery of several other guns and valuables Cornelius had stolen from burglarized homes. The investigation also led to the identification and prosecution of Cornelius’ accomplices. In September 2011, a federal grand jury indicted Cornelius for being a felon in possession of stolen weapons.
While awaiting trial in the Federal Correctional Institution in Sheridan, Oregon, Cornelius assaulted another inmate from behind with a prison shank. He bashed the inmate several times in the head and then stabbed him in the abdomen. Prison officials transferred Cornelius into the Special Housing Unit at Sheridan. In August 2013 Cornelius attacked another inmate with a razor blade he had secreted in his clothing. Cornelius repeatedly cut the throat of this inmate, who was handcuffed at the time. The inmate survived the attack.
A federal grand jury returned additional indictments against Cornelius for the prison assaults. Three separate trials ensued. In 2014 and 2015 federal trial juries convicted Cornelius for assault with a dangerous weapon, assault with intent to commit murder, possessing prohibited objects in a correctional facility, and eight felon-in-possession charges.
Cornelius’ criminal history includes convictions for:
- Burglary (1985, 1988)
- Unauthorized Use of a Motor Vehicle (1985, 1986)
- Failure to Appear (1985)
- Escape (1988, 1990)
- Assault (1988, 1990)
- Inmate in Possession of a Firearm (1990)
- Assault in the Second Degree with a Firearm (1997)
- Robbery in the First Degree with a Firearm (1997)
- Felon in Possession of a Firearm – Armed Career Criminal (1997).
In the 1997 case, Cornelius robbed a Portland, Oregon jewelry store and shot the owner during the course of the robbery.
After a sentencing hearing on September 1, 2015, Chief Judge Aiken sentenced Cornelius to a total of 50 years in federal prison based on the three jury convictions. “We applaud this lengthy and appropriate sentence imposed by Judge Aiken. This defendant’s criminal history is replete with violent, repetitive, and highly dangerous criminal conduct that has impacted numerous victims and law enforcement agencies for many years,” said Acting U.S. Attorney Billy J. Williams. “He is more than deserving of the sentence of 50 years. This sentence will ensure that a dangerous criminal, clearly beyond reform, will spend the rest of his life in prison. Our thanks to the many law enforcement partners who have assisted an outstanding prosecution team in working to see that justice was done.”
The investigation of this case was conducted by the Bureau of Alcohol, Tobacco, and Firearms, the United States Bureau of Prisons, the Oregon State Police, Coos, Curry, Lane and Douglas County Sheriffs, with assistance from the Eugene, North Bend, Coos Bay, and Springfield Police Departments, and the Coos County District Attorney. The case was prosecuted by Assistant U.S. Attorney Frank R Papagni, Jr.
United States Sues Qualium Corporation and Bay Area Sleep Clinics to Recover Damages Under the False Claims ActRead the Press Release
SAN JOSE – The United States has filed a False Claims Act complaint against the owners and operators of Bay Sleep Clinic and their related businesses, Qualium Corporation, CPAP Specialist, and Amerimed Corporation, announced Acting United States Attorney Brian J. Stretch and U.S. Department of Health and Human Services Acting Special Agent in Charge Gerald Roy.
The government’s complaint alleges that Saratoga, Calif., residents Anooshiravan Mostowfipour, 57, and Tahereh Nader, 56, and their companies fraudulently billed the Medicare program for diagnostic sleep tests. Defendants Mostowfipour and Nader own Qualium Corporation, which operates fourteen sleep clinics doing business as Bay Sleep Clinic. The defendants also own Amerimed Corporation, which distributes durable medical equipment under the names Amerimed Sleep Diagnostics and Amerimed CPAP Specialists. The defendants are alleged to have submitted over 14,000 false claims to Medicare for diagnostic sleep studies and durable medical equipment.
The United States’ complaint was filed in a whistleblower action, captioned United States ex rel. Dresser v. Qualium Corp., et al., Civil Action No. 12-1745 (N.D. Cal.), that was filed under the qui tam provisions of the False Claims Act. The False Claims Act allows for private persons, such as Elma F. Dresser in this case, to file actions to provide the government information about wrongdoing. The United States is entitled to intervene, as it did here in May 2015, and take over such lawsuits. By filing its complaint in intervention today, the government provides the allegations that will establish the parameters of its claims. In this case, the government alleges defendants billed Medicare for tests that were conducted at unapproved locations and performed by technicians lacking the licenses or certifications required by Medicare payment rules and regulations. Specifically, the government alleges that defendants obtained approval to treat Medicare patients at only two of their locations and then treated patients at all their Bay Sleep Clinic locations. Defendants then falsified documents to state that the patients had been treated at one of the two approved locations. The government also alleges that the defendants fraudulently billed Medicare for medical devices in violation of Medicare rules, and regulations that prohibit providers of diagnostic sleep tests from supplying medical devices and from sharing a sleep laboratory location with a durable medical equipment supplier.
Under the False Claims Act statute, if it is established that a person has submitted or caused others to submit false or fraudulent claims to the United States, the government can recover treble damages and $5,500 to $11,000 for each false or fraudulent claim filed. If the government is successful in resolving or litigating its claims, the whistleblower who initiated the action can receive a share of between 15 percent to 25 percent of the amount recovered.
The whistleblower action in this case contained additional allegations. However, the United States is intervening only with regard to certain allegations, i.e., that Qualium Corporation (doing business as Bay Sleep Clinic), Amerimed Corporation (doing business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialists), Nader, and Mostowfipour submitted false claims to Medicare for durable medical equipment and for sleep tests performed at unapproved locations or by unqualified technicians. The United States is not pursuing the whistleblower’s additional claims against the third-party company used by the defendants to submit claims to Medicare nor claims regarding alleged improper payments made by the defendants to medical providers.
Assistant U.S. Attorneys Kimberly Friday and Robin M. Wall are handling the case with assistance from Financial Fraud Investigator Michael Zehr. The investigation was conducted by the U.S. Attorney’s Office for the Northern District of California and the Office of Inspector General of the Department of Health and Human Services.
The claims asserted in the complaint are allegations only, and there has been no determination of liability.
United States Files Lawsuit Against URS Federal Services and Yang Enterprises Alleging Defrauding of NASA and GSARead the Press Release
Orlando, Florida - United States Attorney A. Lee Bentley, III announces today that the United States has formally filed a lawsuit against URS Federal Services, Inc. and its subcontractor Yang Enterprises, Inc. This lawsuit is brought pursuant to the False Claims Act.
In its complaint, the government describes a six-year scheme in which URS and Yang – recipients of over a billion dollars in federal government contracts – systematically defrauded the government. The complaint alleges that URS and Yang, who were responsible for overseeing a General Services Administration (GSA) fleet of approximately 400 vehicles for NASA at Kennedy Space Center, submitted more than a thousand claims for undocumented and unreasonable early replacement of car tires.
The complaint alleges that, between June 2009 and April 2015, URS and Yang submitted $387,000 in false claims to the federal government for payment. During this time period, URS and Yang billed NASA for an unprecedented number of tire replacements, excluding ones for blowouts or catastrophic damage. For example, the government alleges that URS ordered six tire replacements for one vehicle during a 27-month period. Some of these tires had fewer than 5,000 miles of use on them. In some cases, installed tires on government vehicles appeared to have been removed and replaced by inferior tires by the time the vehicle was re-serviced. The government alleges that roughly half of the vehicle fleet for which URS and Yang were responsible had vehicles with tires that did not last 60% of their expected tire life.
“We expect government contractors to act with integrity when they fulfill their contractual obligations to the government,” stated U.S. Attorney Bentley. “Overbilling for services that are not documented or not reasonable hurts the taxpayer.”
This case is being investigated by the General Services Administration - Office of Inspector General, the National Aeronautics and Space Administration - Office of Inspector General, and Assistant United States Attorney Jason Mehta.
The lawsuit contains allegations only, and there has been no determination of liability.
U.S. Attorney’s Office mourns the loss of Assistant United States Attorney John BroadwellRead the Press Release
SHREVEPORT, La. – It is with profound sadness that U.S. Attorney Stephanie A. Finley announces that Civil Assistant U.S. Attorney John A. Broadwell passed away today after a long battle with cancer.
AUSA Broadwell had more than 30 years of experience practicing law, with the majority of those years at the U.S. Attorney’s Office, Shreveport Division. Mr. Broadwell received his undergraduate degree from the University of New Orleans in 1979 and his law degree from Loyola University in New Orleans in 1983. That same year, he married his way to Shreveport and joined a small firm that engaged primarily in civil litigation. Not long after that, he joined the Caddo Parish District Attorney’s Office where he initially handled appeals and later handled misdemeanors and felonies as a litigating Assistant District Attorney. In January of 1987, Mr. Broadwell joined the U.S. Attorney’s Office and handled appeals to the Fifth Circuit for approximately three years before joining the Civil Division. He served 13 years as the Deputy and Civil Chief of the Civil Division from April 1989 to February 2002 and later served as litigator handling a wide variety of civil matters. AUSA Broadwell served the U.S. Attorney’s Office and the Department of Justice with distinction under five Presidents.
“John was a special kind of leader in our office. I was fortunate to know him for many years and have shared numerous conversations on a variety of topics, but the lasting lesson that will stay with me is his example of how to walk gracefully when confronted with mortality. I have never seen someone more courageous, caring and at peace with life and death. John wanted everyone else, despite the heaviness of his diagnosis, to be okay. He served this District admirably, with great pride and distinction,” Finley stated. “His wit, experience, and commitment to the Western District of Louisiana and the Department of Justice will be sorely missed by all. The value of his service cannot be measured. We ask for prayers and support for his family during this time of grief.”
In the 2014 August/September Edition of the Louisiana Bar Journal, John Broadwell said his goodbyes to his Louisiana colleagues in the legal profession in an open letter to the Louisiana Bar Journal. The letter can be viewed online on page 170 at http://files.lsba.org/documents/publications/BarJournal/Journal-Aug-Sept-2014.pdf.
John is survived by his wife, Diane Davis Broadwell, two children, Christopher Moore Broadwell and Heather Diane Broadwell, granddaughter, Hattie Broadwell, mother, Laura Jean Broadwell, and brothers, Dr. Larry K. Broadwell and Terry D. Broadwell. Plans for a memorial service are pending.
Two Perry County Men Indicted by Feds on Explosives and Firearm ChargesRead the Press Release
Freedom C. Davis, 19, of Tamaroa, IL, and Samuel L. Dunson, 19, of DuQuoin, IL, were indicted on August 21, 2015, on explosives and firearm charges in a three count Indictment returned by a Federal Grand Jury, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that on August 5, 2015, around 5:00 a.m., in Perry County, Illinois, Davis and Dunson did knowingly possess a destructive device, further described as an Improvised Explosive Incendiary Device, which had not been registered to either of them in the National Firearms Registration and Transfer Record in violation of federal law.
Count 2 charges that on August 5, 2015, around 5:30 a.m., in Perry County, Illinois, Davis and Dunson did knowingly possess a destructive device, further described as an Improvised Explosive Incendiary Device, which had not been registered to either of them in the National Firearms Registration and Transfer Record in violation of federal law.
Count 3 charges that on August 5, 2015, in Perry County, Illinois, Dunson did knowingly possess a firearm, that is, a weapon made from a Revelation model 350M shotgun, with a barrel length of less than 18 inches, and commonly referred to as a sawed-off shotgun, which had not been registered to him in the National Firearms Registration and Transfer Record in violation of federal law.
Each Count carries a possible penalty of up to 10 years’ imprisonment, up to a $250,000 fine, and no more than 3 years’ supervised release.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the DuQuoin, IL Police Department, and the Illinois State Police Department.
The case is being handled by Assistant United States Attorney George Norwood.
Two Men Sentenced to Prison Terms for Participation in Armed PCP Drug Distribution RingRead the Press Release
WASHINGTON – Two men have been sentenced to prison terms for their roles in an armed narcotics organization that trafficked phencyclidine (PCP) in Southeast Washington. The defendants were arrested in 2013 after a local resident walked into the Seventh District Police station and reported that armed defendants had forcibly taken over his apartment in the Woodberry Village Apartment complex to distribute PCP.
The sentences were announced by Acting U.S. Attorney Vincent H. Cohen, Jr and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Dawayne Brown, 21, and Keith Matthews, 24, both of Washington, D.C., were found guilty in March 2015 following a nine-week jury trial in the U.S. District Court of the District of Columbia. Brown was found guilty of second-degree burglary while armed with a firearm, possession with intent to distribute PCP, and possession of a firearm. Matthews was found guilty of being a felon in possession of a firearm.
The Honorable Richard J. Leon sentenced the defendants on Sept. 1, 2015. Brown was sentenced to 14 years in prison, to be followed by eight years of supervised release. Matthews was sentenced to a nine-year prison term, to be followed by three years of supervised release. Four others have been convicted or entered guilty pleas and are awaiting sentencing.
Brown, Matthews, and the four other co-defendants were indicted in 2013 following an investigation by the Metropolitan Police Department of violent distributors of PCP in the Woodberry Village area of Southeast Washington. The investigation revealed that from May 2012 through April 2013, the defendants and fellow 23rd Street crew members (also known as “Little Mexico”) worked together to distribute PCP in the Woodberry Village area by taking over apartments from the residents and selling narcotics from the safety of these apartments. The crew members were often armed with firearms, and they sold large amounts of PCP in the local area. The crew members also regularly exposed young children to narcotics and firearms.
The investigation revealed that in January 2013, Brown violently took over the apartment of a resident at gunpoint to facilitate PCP sales, and that Brown used an 11-year-old child to facilitate his drug distribution. Brown and Matthews thereafter took control and used the resident’s apartment against his will, and they stored numerous firearms and bottles of PCP in his apartment. Despite being intimidated and in fear, the resident reported the defendants’ crimes by walking into the Seventh District Station to report that the defendants had taken over his apartment and that they were in possession of a large quantity of PCP and a number of firearms. Police immediately responded to the resident’s apartment and found Brown inside with three loaded firearms, including an Uzi-style firearm with 19 rounds of ammunition, and multiple bottles of PCP.
During the course of the investigation, MPD uncovered numerous other apartments being used by crew members to distribute narcotics and they seized multiple bottles of PCP, more than eight firearms, body armor, and over $3,500 in cash. Since the first arrest of the 23rd Street members in January 2013, more than a dozen 23rd Street drug traffickers, many of whom are known to be violent, have been identified, arrested and charged with narcotics, firearms and/or related criminal conduct.
In announcing the sentences, Acting U.S. Attorney Cohen and Chief Lanier commended the work of the agents, officers and investigators from the Seventh Police District who investigated the case. They also cited the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Crystal Barclay, Anthony Griffith, and Theresa Nelson, the Litigation Support Unit; Tanya Via, Debra Cannon, and Wanda Queen of the Victim/Witness Assistance Unit, Criminal Investigators Durand Odom and Nelson Rhone, and former intern Daniella Sterns.
Finally, they acknowledged the work of Assistant U.S. Attorneys Tejpal S. Chawla and George Eliopoulos, who prosecuted the case.
Two Men Charged with Federal Drug Offense Following Investigation into Distribution of Synthetic CannabinoidsRead the Press Release
WASHINGTON – Two men have been charged with a federal drug offense following a law enforcement investigation that led to the seizure of roughly 265 pounds of suspected synthetic cannabinoids at a warehouse in Washington, D.C.
The charges were filed today by the U.S. Attorney’s Office for the District of Columbia following an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Maryland State Police, and the Metropolitan Police Department. Assistance was provided by the U.S. Drug Enforcement Administration.
Yenework Tefera Abera, 41, of Alexandria, Va., and Siraj Issa, 33, of Washington, D.C., appeared this afternoon in the U.S. District Court for the District of Columbia. Each was charged in a criminal complaint with possession with intent to distribute a controlled substance. The Honorable G. Michael Harvey ordered them held pending a detention hearing on Sept. 8, 2015. The charge carries a statutory maximum of 20 years in prison and potential financial penalties.
“The charges filed today reflect our steadfast commitment to dealing with the serious problem of synthetic cannabinoids,” said Acting U.S. Attorney Vincent H. Cohen, Jr. “Whether it has been educating our citizens throughout the District of Columbia about the dangers of synthetic cannabinoids or pursuing local and federal investigations to target the distributors and street sellers of this dangerous drug, the U.S. Attorney’s Office has been aggressively attacking this problem at all fronts. And we will continue to do so to keep our community safe.”
“Synthetic drugs pose a serious public health and safety issue to our communities,” said Clark Settles, Special Agent in Charge for US Immigration and Customs Enforcement’s Homeland Security Investigations, Washington, D.C. office. “This operation’s success is a testament to the excellent working relationship between our agencies and sends a clear message to anyone involved in illicit drug trade that we are united in our efforts to disrupt and dismantle their operations.”
According to the charging documents, Abera and Issa were arrested on Sept. 1, 2015 at a storage facility in Northwest Washington. The two men were observed by law enforcement moving boxes of synthetic cannabinoids into a storage unit at the facility. Law enforcement seized a shipment of 14 boxes weighing approximately 265 pounds. The boxes contained individual packages of substances labeled “Bizarro,” a marketing name for a synthetic cannabinoid.
Charges contained in criminal complaints are merely allegations that a defendant has committed a violation of criminal laws, and every defendant is presumed innocent until, and unless, proven guilty.
This case is being prosecuted by Assistant U.S. Attorney Stephen J. Gripkey of the Violent Crime and Narcotics Trafficking Section of the U.S. Attorney’s Office for the District of Columbia.
Two Bergen County, New Jersey, Men Charged with Defrauding Mortgage Lenders Through Illicit Short SalesRead the Press Release
NEWARK, N.J. – A father and son were arrested this morning for engaging in a scheme that used straw buyers and short sales on two Bergen County properties to defraud mortgage lenders out of hundreds of thousands of dollars, U.S. Attorney Paul J. Fishman announced.
George Bussanich Sr., 56, of Park Ridge, New Jersey, and George Bussanich Jr., 35, of Upper Saddle River, New Jersey, are charged by indictment with one count of conspiracy to commit bank fraud and two counts of bank fraud. They are scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this case and statements made in court:
Between 2009 and 2012, Bussanich Sr. and Bussanich Jr. allegedly conspired to defraud mortgage lenders through the sham short sales of two properties located on Jefferson Avenue in Emerson, New Jersey and Lillian Street in Park Ridge.
Bussanich Sr. controlled various purported medical clinics and surgical centers in New Jersey. He recruited his business partner and an employee from a sleep clinic in Cliffside Park, New Jersey, to pose as legitimate, unrelated buyers of the properties. In order to conceal his involvement, Bussanich Sr. used a business entity he controlled to fund each short sale transaction and the subsequent repurchase of those properties. Bussanich Jr., the record owner of both properties, negotiated the short sales with the lenders using materially false information that misrepresented the circumstances of the short sales, the relationships of the parties and the source of funding for the transactions.
Approximately two years after the fraudulent short sales, Bussanich Sr., bought the properties back from the straw purchasers using money that he owed the aforementioned business partner from a prior business venture.
Each count in the indictment carries a maximum of potential penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Stock Promoter Indicted for Conspiring to Commit Securities FraudRead the Press Release
BOSTON – A Colorado stock promoter was charged today in U.S. District Court in Boston with conspiring to commit securities fraud by promoting shares of a company and then secretly selling them, without disclosing that he and his co-conspirators controlled almost all of the available shares.
Scott F. Gelbard, 39, a former resident of Lone Tree, Colo., who has since moved to Canada’s Pacific Northwest, was indicted on one count of conspiracy to commit securities fraud and one count of securities fraud.
According to the indictment, Gelbard and his business partners owned and operated Regency Group, LLC, a stock-promotion company in Colorado. Gelbard allegedly hired a disbarred attorney to set up brokerage accounts in the name of phony Panamanian entities that the former attorney controlled so that Gelbard and his partners could secretly accumulate, and then sell, stock in companies that they were promoting. One of those companies was Greenchek Technology, Inc., a firm that purportedly made gasoline-emission-reduction products. Beginning in 2008, Gelbard and his partners allegedly began transferring Greenchek shares they had acquired to the entities controlled by the former attorney. They then intentionally failed to file required disclosures that they had accumulated over 85% of Greenchek’s available shares, despite U.S. Securities and Exchange Commission requirements that such disclosures be made when ownership of a company’s stock exceeds five percent.
As alleged in the indictment, Gelbard then hired a company to distribute certain promotional materials concerning Greenchek, including a series of press releases issued between February and June 2009. Beginning in February 2009, Gelbard and his partners began selling the stock held in the names of the phony Panamanian entities, generating more than $4 million in proceeds by June 2009. At Gelbard’s direction, the former attorney then laundered the proceeds through accounts in Panama and transmitted the money to accounts that Gelbard and his partners controlled or to pay debts that they owed. A federal grand jury in Massachusetts returned the indictment here because a number of victims lived in the Commonwealth.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of the greater of $250,000 or twice the gross gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Steven Osborne, Special Agent in Charge of the Internal Revenue Service Criminal Investigations, Denver Field Office; and Joseph R. Bonavolonta, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
St. Thomas Resident Sentenced to Federal Prison for Firearm ChargeRead the Press Release
St. Thomas, USVI - District Court Judge Curtis V. Gomez today sentenced Clinton G. Todman, Jr., 44, to 40 months in federal prison for his conviction of Felon in Possession of a Firearm, United States Attorney Ronald W. Sharpe announced. In addition to the prison term, Judge Gomez sentenced Todman to serve three years of supervised release, pay a $100 special assessment, and perform 250 hours of community service.
Todman pleaded guilty on May 7, 2015 to the charge of Felon in Possession of a Firearm. According to court documents, on February 5, 2015, after receiving descriptions of two vehicles exchanging gunfire in the area of the Cost-U-Less on St. Thomas, Virgin Islands police officers searched for vehicles matching the descriptions. The vehicles were described as a black and a goldcolored Honda. During their search for the vehicles, officers observed Todman in the driver’s seat of a black Honda in the area of Tutu High Rise. After Todman exited the vehicle, the officers patted him down for their safety and retrieved a Kel-Tec, .40 caliber firearm with an obliterated serial number. Todman was not authorized to carry a firearm because in 1991, he was convicted of a felony in the District Court of the Virgin Islands.
This case was investigated by the Virgin Islands Police Department and the Bureau of Alcohol,Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Nelson L. Jones.
St. Joseph Man Pleads Guilty to His Role in Solar Company's $1.4 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced an owner of a solar energy installation company in St. Joseph, Mo., pleaded guilty in federal court today to his role in a fraud scheme that totaled nearly $1.4 million in rebates through state and federal programs.
Richard Schonemann, 38, of St. Joseph, waived his right to a grand jury and pleaded guilty before U.S. Chief District Judge Greg Kays to a two-count information that charges him with one count of conspiracy related to false statements in regard to a federal rebate program, and one count of false statements related to kilowatt updates in a federal solar rebate program.
Schonemann was an owner of US Solar in St. Joseph, which sold and installed solar-powered panel systems to businesses and home owners in northwest Missouri. Between 2011 and 2013, Schonemann and US Solar participated in two solar panel rebate programs, one authorized by the state of Missouri and the second administered by the federal government. As a result of this scheme, US Solar received a total of $1,398,236 in fraudulent rebates.
Solar Photovoltaic Rebate Program ($465,360 Fraud Scheme)
According to today’s plea agreement, US Solar and a co-conspirator were involved in obtaining fraudulent rebates from KCP&L as part of the state rebate program. US Solar overstated the number of solar panels installed on approximately 27 homes or businesses from December 2011 through June 2013. As a result, US Solar was paid $465,360 more in rebates than the company was entitled to receive.
KCP&L administered the state’s Solar Photovoltaic Rebate Program, which was created in 2008 by the state of Missouri and funded by a tax on power customers. The rebate allowed for a payment of $2 per watt, not to exceed $50,000, to customers that installed solar powered panel systems on their homes or businesses. US Solar was one of the larger solar powered panel system installation companies that utilized this rebate program through KCP&L. To utilize the state rebate program, US Solar submitted applications and schematic drawings on behalf of their customers via email to KCP&L. Once the application process was completed, funds were disbursed to US Solar by checks mailed from KCP&L.
American Recovery and Reinvestment Act of 2009 ($932,876 Fraud Scheme)
During the investigation of the state rebate scheme, the FBI uncovered unexplained payments from the federal government to US Solar that led to the discovery of a second fraudulent scheme that was part of the conspiracy.
Schonemann and a co-conspirator obtained fraudulent rebates authorized by the American Recovery and Reinvestment Act of 2009. Under the federal program, the government reimbursed 30 percent of the cost of the installation of a solar-powered panel system leased to the property owner. US Solar received federal funds under this program from August 2011 to September 2013, because US Solar certified they installed systems and leased those systems to the property owners. The certification was false because the systems were owned by customers rather than leased. US Solar submitted forged lease contracts in order to receive the federal rebates.
US Solar received 34 payments from the federal government, totaling $932,876. US Solar was not eligible to receive any of the $932,876 paid under the federal program.
False Statements
Additionally, each year after installation, US Solar was required to certify that the installed systems were still running and report the systems’ output. Schonemann and a co-conspirator provided updates showing kilowatt usage on each of those properties to the federal government in 2012 and 2013. In some instances, Schonemann simply made up the numbers.
A co-conspirator created false paperwork and computer entries using US Solar customer information. The conspiracy involved the use of false paperwork and computer entries, including lease agreements, certification that US Solar retained ownership of the solar-powered panel systems, detailed cost breakdowns on each system and usage reports. Schonemann and a co-conspirator were involved in preparation of the false usage reports.
One of the fraudulent federal payments related to Schonemann’s place of employment, Prolific Technologies, Inc. Fraudulent paperwork was submitted requesting payment for 36 extra panels not installed or leased, resulting in a rebate overpayment of $20,028.
Penalties
Under the terms of today’s plea agreement, Schonemann must forfeit to the government $350,000 that he received from the fraud scheme.
During the course of the conspiracy, Schonemann received payments from US Solar that were described as profit distributions. A significant source for those profit distributions were funds received by US Solar from the federal program. A portion of those funds were used towards the construction of a new house Schonemann built, which is currently listed for sale at an asking price of over $400,000.
Schonemann’s residential property is currently named in a civil judicial forfeiture action. Schonemann will be allowed to market this property and, if the property is sold, the first $350,000 in net equity will be used to pay restitution for the federal program fraud. If there is not a signed real estate contract on the property by Oct. 1, 2015, the civil forfeiture action shall proceed and the property will be forfeited to the government to be sold by the U.S. Marshal’s Service.
Under the terms of today’s plea agreement, the government’s sentencing recommendation to the court will not exceed 15 months in federal prison. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the FBI.
South Carolina Anesthesiologist Convicted of Internet Solicitation of A MinorRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found John Francis Williams (69, Blythewood, SC) guilty of using the Internet to attempt to persuade a minor to engage in sexual activity. He faces a maximum penalty of life in federal prison. A sentencing hearing is scheduled for November 20, 2015.
Williams was indicted on February 6, 2013.
According to evidence presented at trial, in October 2012, while visiting his vacation home in Port Orange, Florida, Williams responded to a Craigslist ad. The ad had been placed by an undercover officer posing as the mother of a 14-year-old girl who was looking for a man to teach her child about sex. After a series of emails and phone calls with the “mother,” Williams drove to a house where he intended to have sex with the teen. He brought an overnight bag containing condoms, lubricants, and vibrators.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Volusia County Sheriff’s Office, the Brevard County Sheriff’s Office, and the Internet Crimes Against Children Task Force. It is being prosecuted by Assistant United States Attorney Bruce S. Ambrose.
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.
Sex Offender Pleads Guilty to Failing to Register and Assault on an OfficerRead the Press Release
POCATELLO - Ronald Lee Chaney, 34, of Idaho Falls, Idaho, pleaded guilty yesterday to failing to register as a sex offender and assault on an officer, U.S. Attorney Wendy J. Olson announced. Chaney was indicted by a federal grand jury in Pocatello on August 27, 2013.
According to the plea agreement, Chaney was convicted in May 2002, of sexual abuse of a child under the age of sixteen years in Idaho. As a result of the conviction, the defendant was required to register and update his registration under the Sex Offender Registration and Notification Act (SORNA). SORNA requires that sex offenders register and keep current their registration in each jurisdiction where they reside.
Chaney’s last registered address, according to the plea agreement, was a half-way house in Arkansas in May 2013. On July 1, 2013, the defendant and another fugitive sex offender travelled by bus from Salt Lake City, Utah, to Pocatello, Idaho, where Chaney resided until he was arrested on August 7, 2013. In an attempt to avoid arrest Chaney jumped from a third story window and forcibly assaulted and impeded a Pocatello police detective who was assisting the United States Marshals Service apprehend Chaney. The Pocatello police detective’s report indicates that Chaney punched him on the forehead during the encounter, and also that the defendant placed his hands around the detective’s neck and squeezed.
The crime of failure to register as a sex offender is punishable by up to ten years in prison, a maximum fine of $250,000.00, and up to a life term of supervised release. Assault of an officer is punishable by up to eight years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for November 17, 2015, before U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Idaho Sex Offender Watch Task Force (ISOW) and the United States Marshals Service (USMS).
Ronald Lee Chaney was prosecuted for a violation of the Sex Offender Registration and Notification Act (SORNA) passed by Congress in 2006. The Act requires sex offenders to register and keep their registration current in each jurisdiction where they reside. Violations of SORNA can be prosecuted in federal court.
Savannah River Site Contractor Agrees to Pay $3.8 Million to Settle False Claims Act AllegationsRead the Press Release
Contact Person: James Leventis (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles announced today that Parsons Government Services Inc. has agreed to pay the United States $3.8 million to settle allegations that the company knowingly mischarged the U.S. Department of Energy (DOE) for ineligible or inflated short-term and long-term employee relocation costs in connection with its contract on the DOE Salt Waste Processing Facility Project (SWPF) at the DOE Savannah River Site in Aiken, South Carolina. Parsons is headquartered in Pasadena, California.
“The District of South Carolina continues to devote significant resources to pursuing claims under the False Claims Act and this is yet another example of how this commitment is benefiting the taxpayers by recovering funds for the government,” said U.S. Attorney Bill Nettles of the District of South Carolina
“Those who expect to do business with the government must do so fairly and honestly,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates that the Department of Justice will pursue contractors that knowingly seek taxpayer funds to which they are not entitled.”
Since Sept. 1, 2002, Parsons has been the primary construction contractor on the DOE’s SWPF project at the Savannah River Site. Pursuant to the terms of the SWPF contract, Parsons was entitled to be reimbursed for the payments it made to eligible employees for moving, meals, lodging and transportation expenses incurred when the employees were relocated or transferred by Parsons to work on the SWPF project in Aiken. In order to be entitled to reimbursement by the DOE, however, Parsons was required to take steps to ensure that the employees met certain contractual requirements of eligibility, such as maintaining a permanent residence at the location from which they were transferred. The United States alleged that Parsons sought and obtained reimbursement for these relocation expenses under the SWPF contract even for employees it knew did not qualify for these payments under the terms of the contract.
The settlement was the result of a coordinated effort by the United States Attorney’s Office for the District of South Carolina, the Civil Division’s Commercial Litigation Branch, the DOE Savannah River Operations Office and the DOE Office of Inspector General.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
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Romanian Man Sentenced for False Visa PetitionRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced Bogdan Dragos (34, Romania) to two years in federal prison for filing a false petition to obtain visas for foreign workers. He pleaded guilty on June 12, 2015.
According to court documents, in 2010, while operating an employment agency in Daytona Beach, Dragos filed a petition with United States Citizenship and Immigration Services (USCIS) to obtain 392 visas for unnamed workers from the Philippines. In that petition, he falsely claimed that he had contracts with 12 hotels in the Daytona Beach area to provide foreign workers on a temporary basis. USCIS approved the petition and a large number of Filipino workers started applying for visas at the U.S. Embassy in Manila. The fraud was detected when an employee from the U.S. Embassy began calling the hotels in Daytona Beach and learned that the purported contracts did not exist.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Department of State’s Diplomatic Security Service. It was prosecuted by Assistant United States Attorney Bruce S. Ambrose.
Restaurant Owner Pleads Guilty to $400,000 Tax Fraud SchemeRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of DEXI ZHENG, 33, to filing a false federal income tax return. ZHENG was charged on July 6, 2015, by felony information, with one count of filing a false individual tax return. He pleaded guilty on August 21, 2015, before U.S. District Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn. A sentencing date has not yet been determined.
“Individuals who corruptly violate the tax law to further their business interests and intentionally falsify their tax returns undermine public confidence in our tax system and unfairly disadvantage businesses that play by the rules,” stated Special Agent in Charge Shea Jones of the IRS Criminal Investigation Division. “The IRS Criminal Investigation Division, together with the U.S. Attorney’s Office, will investigate and prosecute those who violate our tax system.”
According to his guilty plea and documents filed in court, from at least 2009 to 2013, ZHENG was the owner of two restaurants located in St. Michael and Big Lake, Minn. As owner of the restaurants, the defendant was responsible for reporting the profit or loss from the two restaurants on his federal individual income tax returns.
According to his guilty plea and documents filed in court, from at least 2009 to 2013, ZHENG avoided paying taxes on the full amount of the restaurants’ revenue in at least two ways. First, ZHENG intentionally failed to deposit any of the cash receipts into the restaurants’ bank accounts and failed to report the restaurants’ cash receipts on his Schedule C. Second, ZHENG recruited his father, G.Z., to act as a nominee and include the profits from the St. Michael restaurant on G.Z.’s individual income tax returns even though he was not the actual owner of the restaurant. In doing so, ZHENG caused G.Z. to exclude the St. Michael restaurant’s cash receipts from G.Z’s Schedule C. The total loss caused by ZHENG is approximately $420,000.
ZHENG faces up to three years in prison.
This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division.
This case is being prosecuted by Assistant U.S. Attorney Kimberly A. Svendsen.
Defendant Information:
DEXI ZHENG, 33
St. Michael, Minn.
Convicted:
- Filing a False Individual Tax Return, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Republic Man Sentenced for Stealing Guns from Pawn ShopRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Republic, Mo., man was sentenced in federal court today for stealing 23 firearms during a burglary at an Ozark, Mo., pawn shop.
Michael Cameron Heston, 26, of Republic, was sentenced by U.S. District Judge M. Douglas Harpool to five years and six months in federal prison without parole. The court also ordered Heston to pay $5,900 in restitution for damages related to the theft of firearms and the breaking and entering of the business.
On March 31, 2015, Heston pleaded guilty to aiding and abetting in the theft of firearms from a licensed firearm dealer. Co-defendants Daryl Bradley Maples, 28, Corey Lee Downard, 33, and Matthew James Oakley, 24, all of Springfield, have pleaded guilty to the same charge. Maples was sentenced on April 16, 2015, to six years in federal prison without parole and ordered to pay $5,900 in restitution (for which he is jointly and severally liable with Heston).
Heston, Maples, Downard and Oakley each admitted that they broke into Sutton Gun and Pawn, 3994 N. 20th St., Ozark, at 2:16 a.m. on Dec. 21, 2012. Maples (who was previously employed at the store) admitted that he smashed out the glass from the front door. Then Heston, Maples and Downard went inside and took firearms from the display cases. Oakley admitted that he was the getaway driver during the robbery.
They stole 23 firearms and various amounts of ammunition. After the burglary, Oakley sped off with Maples, Heston and Downard to Maples’ residence, where they divided the spoils of the burglary and set up plans to exchange or barter the stolen firearms for cash or drugs.
When Maples was arrested on Dec. 26, 2012, he had in his possession two of the firearms that were stolen in the pawn shop burglary, an F.N. 9mm pistol and a Colt .38-caliber revolver, as well as assorted ammunition.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ozark, Mo., Police Department and the Springfield, Mo., Police Department.