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Tuesday 14 July 2015
Massachusetts Man Sentenced to over Seven Years in Prison for Interstate Transportation of Stolen PropertyRead the Press Release
U.S. Attorney Thomas E. Delahanty II of the District of Maine announced today that Lawrence Estrella, 65, of Worcester, Massachusetts, was sentenced today in U.S. District Court by Judge George Z. Singal of the District of Maine to 92 months in prison to be followed by three years of supervised release for interstate transportation of stolen property. Estrella pleaded guilty on Feb. 20, 2015.
According to court records and information from the sentencing hearing, in May 2013, six N.C. Wyeth paintings were stolen from a residence in Portland, Maine. In November 2014, Estrella transported four of the six stolen paintings to California in an effort to sell them. Law enforcement officers in California located his vehicle in the parking lot of a hotel in North Hollywood, California. Estrella’s room at the hotel was searched and a firearm was located, but no paintings were found.
On Dec. 19, 2014, law enforcement officers recovered the four stolen paintings from a pawn shop in Beverly Hills, California. The four recovered paintings are titled, “At a touch from Michael’s knife,” “The Unwrit Dogma,” “The Duel” and “John Brimblecombe.” The four recovered paintings are worth more than $1 million. Oscar Roberts, the man who used the stolen paintings to secure a loan from the Beverly Hills pawn shop, was prosecuted in the U.S. District Court of the Central District of California and was sentenced to 28 months in prison.
The remaining two stolen paintings, “The Encounter on Freshwater Cliff” and “Go, Dutton, and that right speedily,” have not yet been recovered.
This case results from a joint investigation conducted by the FBI’s Portland and Los Angeles offices, the Portland Police Department and the Los Angeles Police Department.
Massachusetts Man Sentenced to over Seven Years for Interstate Transportation of Stolen PropertyRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced today that Lawrence Estrella, 65, of Worcester, Massachusetts, was sentenced today in U.S. District Court by Judge George Z. Singal to 92 months in prison to be followed by 3 years of supervised release for interstate transportation of stolen property. Estrella pleaded guilty on February 20, 2015.
According to court records and information from the sentencing hearing, in May 2013, six N.C. Wyeth paintings were stolen from a residence in Portland. In November 2014, Estrella transported four of the six stolen paintings to California in an effort to sell them. Law enforcement officers in California located his vehicle in the parking lot of a hotel in North Hollywood. Estrella’s room at the hotel was searched and a firearm was located, but no paintings
were found.
On December 19, 2014, law enforcement officers recovered the four stolen paintings from a pawn shop in Beverly Hills, California. The four recovered paintings are titled: “At a touch from Michael’s knife,” “The Unwrit Dogma,” “The Duel,” and “John Brimblecombe.” The four recovered paintings are worth more than $1 million. Oscar Roberts, the man who used the stolen paintings to secure a loan from the Beverly Hills pawn shop, was prosecuted in the U.S. District Court for the Central District of California and was sentenced to 28 months in prison.The remaining two stolen paintings -- “The Encounter on Freshwater Cliff” and “Go, Dutton, and that right speedily” -- have not yet been recovered.
This case results from a joint investigation conducted by the Portland, Maine, and Los Angeles, California, offices of the Federal Bureau of Investigation; the Portland Police Department; and the Los Angeles Police Department.Man Sentenced to Eight Years in Prison for Conspiring with Former U.S. Consulate Official in Visa SchemeRead the Press Release
WASHINGTON – Binh Tang Vo, 41, an American citizen who had been living in Vietnam, was sentenced today to eight years in prison on charges of conspiracy to commit bribery and visa fraud, bribery of a public official, and conspiracy to commit money laundering, announced Acting U.S. Attorney Vincent H. Cohen, Jr. and Bill A. Miller, Director of the U.S. Department of State’s Diplomatic Security Service (DSS).
Vo pled guilty to the charges in March 2015 in the U.S. District Court for the District of Columbia. The plea agreement, which was contingent upon the Court’s approval, called for a prison sentence between six and eight years, as well as forfeiture of nearly $5.1 million. The Honorable Emmet G. Sullivan accepted the plea agreement and sentenced Vo accordingly today.
Vo was arrested on Sept. 24, 2013, at Washington Dulles International Airport and has been held without bond ever since.
According to a statement of facts in support of his guilty plea, Vo conspired with co-defendant Michael Sestak and others to obtain visas to the United States for Vietnamese citizens. Sestak was the Non-Immigrant Visa Chief in the Consular Section of the U.S. Consulate in Ho Chi Minh City, Vietnam from August 2010 to September 2012.
As outlined in the statement of facts, Vo and Sestak conspired with other U.S. citizens and Vietnamese citizens to advertise the scheme and recruit customers. Co-conspirators reached out to people in Vietnam and the United States and advertised the scheme by creating a website and by spreading the word through emails and telephone calls. The conspirators told potential customers that once the customers obtained a visa from the scheme, they could disappear, get married or return to Vietnam and be assured of receiving visas in the future.
Vo and his co-conspirators received biographical information and photographs from customers and assisted them with their visa applications. Upon submitting an application, the applicant would receive an appointment at the Consulate, be interviewed by Sestak, and approved for a visa. Applicants or their families generally paid between $30,000 and $60,000 per visa. Nearly 500 fraudulent visas were issued as a result of the conspiracy.
Applicants paid for their visas in Vietnam, or by routing money to co-conspirators in the United States. Vo admitted to receiving millions of dollars for arranging for Sestak to approve the visas. He ultimately moved some of the money out of Vietnam by using money launderers to move funds through off-shore banks. Co-conspirators also had money laundered through off-shore banks to bank accounts in the United States.
“Binh Vo conspired with a corrupt U.S. Consulate Official to collect bribes in exchange for issuing visas that allowed nearly 500 Vietnamese nationals to enter the United States,” said Acting U.S. Attorney Cohen. “Binh Vo and his family members recruited bribe-paying customers by telling them that once in the United States they could disappear or get married. He collected millions of dollars in bribes by undermining the integrity of the process used to screen foreign visitors to our country. This prison sentence demonstrates our commitment to preserving the integrity of a process that is critical to our national security.”
“The U.S. visa is one of the most coveted travel documents in the world. Foreign nationals who acquire visas fraudulently to enter the United States could do so in order to carry out any number of criminal activities, including terrorism,” said Director Miller. “This case demonstrates Diplomatic Security’s unwavering commitment to investigating visa fraud and ensuring that those who commit this crime are brought to justice.”
Sestak, 44, pled guilty in November 2013 to one count each of conspiracy to commit bribery and visa fraud and to defraud the United States, bribery of a public official, and conspiracy to engage in monetary transactions in property derived from illegal activity. He is scheduled to be sentenced July 1, 2015.
Hong Vo, 29, an American citizen, and Truc Thanh Huynh, 31, a Vietnamese citizen, also pled guilty to conspiring with Sestak and Binh Vo. Hong Vo is Binh Vo’s sister, and Truc Thanh Huynh is Binh Vo’s cousin. Hong Vo was sentenced in March 2014 to seven months in prison and three months of home detention. Truc Tranh Huynh was sentenced in February 2014 to 16 months of incarceration.
According to the statement of facts, fraudulent visas granted by Sestak were connected to an Internet Protocol (“IP”) address controlled by Hong Vo. Huynh allegedly participated in the visa scheme by obtaining documents necessary for the visa applications, collecting money and providing model questions and answers for visa applicants. Sestak also allegedly approved a visa for Huynh to the United States, the application for which was submitted by the IP address controlled by Hong Vo.
The case was investigated and prosecuted by the U.S. Department of State Diplomatic Security Service and Assistant U.S. Attorneys Brenda J. Johnson, Alessio D. Evangelista of the National Security Section, and Catherine K. Connelly and Jennifer Ambuehl of the Asset Forfeiture and Money Laundering Section, as well former Assistant U.S Attorneys Christopher Kavanaugh, and Mona N. Sahaf.
Lewiston Man Sentenced to over 10 Years for Drug Trafficking and Firearms OffensesRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Paul Robinson, 33, of Lewiston, Maine, was sentenced today in U.S. District Court by Judge George Z. Singal to 121 months in prison to be followed by five years of supervised release for distributing cocaine base, also known as crack cocaine, conspiring to distribute crack cocaine, and possessing a firearm during and in relation to a drug trafficking crime. Robinson pleaded guilty on September 4, 2014.
Court records reveal that between early 2011 and September 2013, Robinson and others obtained crack cocaine in Massachusetts for distribution in the Lewiston area. On April 11, 2013, after Robinson distributed about an ounce of crack cocaine, law enforcement officers executed a search warrant at Robinson’s apartment in Lewiston. Among the items seized were crack cocaine, about $4,500 in cash, two firearms, video monitors attached to surveillance cameras facing the front of the building, and EBT cards in the names of five other people. In total, Robinson was held responsible for 2.73 kilograms of crack cocaine.
This case results from a joint investigation conducted by the Maine Drug Enforcement Agency, the U.S. Drug Enforcement Administration, the Maine State Police, the Lewiston and Auburn Police Departments, and the Androscoggin County Sheriff’s Office. This investigation is part of the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.Lawrence Heroin Ring ChargedRead the Press Release
BOSTON – Ten individuals in three states were charged in federal court yesterday with conspiracy to distribute heroin, in connection with a Lawrence-based heroin operation. The ten were charged in two related criminal complaints.
In the late night hours on Sunday, July 12, 2015, Juan Gonzalez-Arias, 31, Jerri Martinez-Tejeda, 31, Yoelly Carmenatty, 27, Michael Bate, 33, and Gilberto Alicea, 32, were arrested for conspiracy to distribute heroin. Another charged defendant, Lily Y. Solis, 28, is in custody in Oklahoma. One defendant, Alejandro Mendez, 31, is in state custody in Massachusetts. Three other defendants, Joel Jahamal Rougeau, 41, Saul Torres, and Hillsaydee Guzman, 31, remain fugitives.
These charges came after a lengthy investigation that culminated in the execution of two search warrants, one for the residence of Gonzalez-Arias, and another for the residence of Martinez-Tejeda and his wife, Carmenatty, in the late evening and early morning hours of July 12-13.
In the Martinez-Tejeda/Carmenatty residence, agents found over $500,000 in cash that was in the process of being counted and packaged. Federal agents also recovered two handguns, various items for the processing and packaging of narcotics, and approximately one kilogram of what is believed to be “cut,” a substance used to dilute the purity of heroin prior to sale. Additionally, agents recovered ledgers appearing to be part of the drug trafficking operation.
In the Gonzalez-Arias residence, agents recovered a firearm, 1.5 kilograms of suspected heroin and an additional $30,088 in cash.
The maximum sentence under the statute is life in prison, followed by supervised release for up to life, a $10,000,000 fine, and a $100 special assessment. Depending on the total amount of drugs recovered and whether a defendant is held responsible for all or a portion of those drugs, the applicable statute also provides a ten year mandatory minimum period of incarceration as well as a mandatory five year period of supervised release. 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; and Michael J. Ferguson, DEA Special Agent in Charge, made the announcement today. The case is being prosecuted by Thomas E. Kanwit of Ortiz’s Narcotics and Money Laundering Unit.
The details contained in the criminal complaints are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Laguna Pueblo Man Sentenced to Probation for Federal Misdemeanor Assault ChargeRead the Press Release
ALBUQUERQUE – Lawrence Lockwood, 32, a member and resident of Laguna Pueblo, N.M., was sentenced today in federal court in Albuquerque, N.M., to two years of probation for his misdemeanor assault conviction.
Lockwood was arrested on Feb. 11, 2015, on a criminal complaint alleging that Lockwood assaulted his intimate partner on Jan. 5, 2015, during a domestic dispute by shoving her onto a bed and restricting her movement.
On April 22, 2015, Lockwood pled guilty to a misdemeanor information charging him with simple assault. In entering his guilty plea, Lockwood admitted that on Jan. 5, 2015, he forcefully pushed the victim at a location within the Pueblo of Laguna in Cibola County, N.M.
This case was investigated by the Laguna Agency of the BIA’s Office of Justice Services and the Pueblo of Laguna Tribal Police Department and was prosecuted by Assistant U.S. Attorneys Novaline D. Wilson and David Adams.
It was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Kings Mountain Man Sentenced to Nine Years for Armed Robbery of Fast Food Chain Restaurant in CharlotteRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today James William Lewis, Jr., 32, of Kings Mountain, N.C. to 108 months in prison for the armed robbery of a Charlotte-area fast food restaurant, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Lewis to serve five years of supervised release and to pay $841 as restitution.
Acting U.S. Attorney Jill Westmoreland Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Kerr Putney, of the Charlotte-Mecklenburg Police Department.
According to filed court documents and today’s sentencing hearing, on December 12, 2013, Lewis robbed a Jack-in-the-Box restaurant, located at 7725 Pineville Matthews Road, in Charlotte.Court documents show that Lewis entered the restaurant and demanded that the manager give him money and threatened to shoot.According to court records, Lewis, who is a former employee of the Jack in the Box restaurant, took the manager back into the office and made him open the safe.Court records indicate that while the manager was opening the safe, Lewis removed a hand gun from under his jacket and proceeded to display and point the hand gun.Lewis then took the cash from the manager and fled the scene, court records show.
In May 2014, Lewis pleaded guilty to one count of Hobbes Act Robbery and one count of use and carry of a firearm in furtherance of a crime of violence, and the possession and brandishing of the firearm
Lewis, who is currently in federal custody, will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and CMPD. Assistant U.S. Attorney Robert Gleason, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Kennewick Man Sentenced to Thirty Years Imprisonment for Production of Child PornographyRead the Press Release
Spokane–Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Sean Michael Challe, age 29, of Kennewick, Washington, was sentenced today for three counts of Production of Child Pornography. United States District Court Judge Salvador Mendoza, Jr. sentenced Sean Michael Challe to a thirty year term of imprisonment, to be followed by a lifetime of court supervision after he is released from federal prison. Challe will also be required to register as a sex offender.
According to information disclosed during the court proceedings, on September 20, 2014, in Richland, Washington, Challe was socializing with friends on a balcony when he went into their home, where their four year old daughter was sleeping. The father of the minor entered the home to find Challe standing over the minor whose pajamas were pulled town to expose her naked body. Law enforcement was called at that time.
Officers executed search warrants for Challe’s digital devices. Challe’s cellular phone contained photos and videos of the sleeping minor he had taken on September 20, 2014, which constituted child pornography. Challe also maintained photos and video of him molesting and performing oral sodomy on the same minor in June of 2014.
Also found on Challe’s devices were videos of him molesting a two year old male and an approximately nine month old female. Challe was also found to have recorded young boys urinating in two different public restrooms. Additionally, Challe possessed over 20,000 images of other child pornography, and he was found to have been actively trading child pornography via the internet.
Michael C. Ormsby stated, “Prosecuting those who would produce pornographic images of vulnerable minors is a priority of the United States Attorney’s Office for the Eastern District of Washington. Mr. Challe is a dangerous individual who preyed on very young, and thus, very vulnerable children.” He further stated, “This joint federal, state and local agency investigation demonstrates the dedication of the officers and the willingness to utilize resources at every level of law enforcement to bring those who would victimize children to justice.”
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
This investigation was conducted by the Richland Police Department with assistance from the Federal Bureau of Investigation. The case was prosecuted by Laurel Holland, Deputy Prosecuting Attorney for Benton County and Alison L. Gregoire, an Assistant United States Attorney for the Eastern District of Washington.
Justice Department and Consumer Financial Protection Bureau Reach Groundbreaking Settlement to Resolve Allegations of Auto Lending Discrimination by HondaRead the Press Release
The Department of Justice and the Consumer Financial Protection Bureau (CFPB) announced today a groundbreaking settlement to resolve allegations that American Honda Finance Corporation (Honda) engaged in a pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in auto lending. Honda is based in Torrance, California.
The settlement is especially noteworthy because of the company’s commitment to significantly limit the discretion of car dealers to charge interest rate markups on Honda loans. Specifically, Honda has agreed to change the way it prices its loans by limiting dealer markup to 125 basis points (or 1.25 percentage points) for loans of 60 months or less, and to 100 basis points (or 1 percentage point) for loans greater than 60 months. The settlement also provides $24 million in compensation for alleged victims of past discrimination by the nation’s ninth largest auto lender.
“We commend Honda for its leadership in agreeing to impose lower caps on discretionary markups and for its commitment to treating all of its customers fairly without regard to race or national origin,” said Vanita Gupta, head of the Civil Rights Division. “We recognize that dealerships perform a valuable service in connecting customers with lenders and that they should be fairly compensated for that service. We believe that Honda’s new compensation system balances fair compensation for dealers and fair lending for consumers. We hope that Honda’s leadership will spur the rest of the industry to constrain dealer markup to address discriminatory pricing.”
The coordinated investigations by the department and the CFPB that preceded today’s settlement determined this system of subjective and unguided pricing discretion directly results in Honda’s qualified African-American, Hispanic and Asian/Pacific Islander borrowers paying more than qualified non-Hispanic white borrowers. The department and CFPB anticipate that Honda’s new caps on discretionary markups will substantially reduce or eliminate these disparities.
Honda is known as an “indirect” auto lender because, rather than taking applications directly from consumers, the company makes most of its loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Honda. Honda’s business practice, like most other major auto lenders, allows car dealers discretion to vary a loan’s interest rate from the price Honda initially sets based on the borrower’s objective credit-related factors. Dealers receive greater payments from Honda on loans that include a higher interest rate markup.
The settlement resolves claims by the department and the CFPB that Honda discriminated by charging thousands of African-American, Hispanic and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers. The agencies claim that Honda charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. The United States’ complaint alleges that the average African-American victim was obligated to pay over $250 more during the term of the loan because of discrimination, the average Hispanic victim was obligated to pay over $200 more during the term of the loan because of discrimination and the average Asian/Pacific Islander victim was obligated to pay over $150 more during the term of the loan because of discrimination. The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending. Honda’s settlement with the Justice Department, which is subject to court approval, was filed today in the U.S. District Court of the Central District of California in conjunction with the Justice Department’s complaint. Honda resolved the CFPB’s claims by entering into a public administrative settlement.
“The CFPB is committed to creating a fair marketplace for all consumers, and other auto lenders should take note of today’s action,” said Director Richard Cordray of the Consumer Financial Protection Bureau. “Honda’s proactive decision to move to a new pricing and compensation system demonstrates industry leadership and represents a significant step towards protecting consumers from discrimination.”
“Honda’s financing practices that allowed dealerships to mark up individual loans resulted in illegal discrimination, with minority car buyers paying more for their loans than non-minority buyers with similar credit histories,” said U.S. Attorney Eileen M. Decker of the Central District of California. “This settlement provides for Honda to contribute $24 million to a settlement fund to provide redress for thousands of minority borrowers, not only in this district, where Honda’s United States operations are based, but throughout the country. It sends the clear message that discrimination of any kind is intolerable, and that other auto companies should follow Honda’s lead in taking steps to ensure that their sale and financing practices do not result in discrimination.”
In addition to the $24 million in payments for its past conduct, under the Justice Department consent order, Honda will also pay $1 million to fund a consumer financial education program focused on consumer auto finance that is designed to benefit African-American, Hispanic and Asian/Pacific Islander populations.
The settlement also requires Honda to improve its monitoring and compliance systems. The settlement allows the lender to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results. The department commends Honda for working cooperatively to reach an appropriate resolution of this case.
The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Honda’s discrimination. The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.
The Civil Rights Division, the U.S. Attorney’s Office of the Central District of California and the CFPB are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
The department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 40 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The settlements in these matters provide for a total of at least $1.2 billion in monetary relief for impacted communities. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications.
Hudson County, New Jersey, Man Sentenced to 10 Years in Prison for Illegally Selling 33 FirearmsRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man was sentenced today to 120 months in prison for selling 33 firearms to a confidential informant, U.S. Attorney Paul J. Fishman announced.
Bernardo Guzman, 26, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of possessing firearms while being a previously convicted felon. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Guzman admitted that on Nov. 14, 2013, he met with an individual in the parking lot of a grocery store in Fort Lee, New Jersey, to illegally sell three handguns. Guzman also admitted that from June 2013 through February 2014, he sold approximately 33 firearms and hundreds of rounds of ammunition to a confidential informant. The firearms sold by Guzman consisted of semiautomatic weapons, sawed-off shotguns, assault-style rifles and firearms with high-capacity magazines. Some of the firearms had obliterated serial numbers. All of the weapons and ammunition are now in the custody of law enforcement.
In addition to the prison term, Judge Arleo sentenced Guzman to serve three years of supervised release.
The government is represented by Assistant U.S. Attorney Elizabeth M. Harris of the Organized Crime/Gangs Unit of the Criminal Division in Newark.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge George P. Belsky; special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly; and the Jersey City Police Department with the investigation leading to today’s plea.
Defense counsel: Julian Wilsey Esq., Livingston, New Jersey
Hostage Taking Sends Three Men to Federal PrisonRead the Press Release
McALLEN, Texas ‐ Two Mexican nationals and a local resident have been handed significant sentences as a result of their convictions for conspiracy to commit hostage taking, announced U.S. Attorney Kenneth Magidson. Julio Vargas-Hernandez, 39, and Gustavo Morales-Manriquez, 32, pleaded guilty April 17, 2014, while Osiris Bulos-Gonzalez, 23, entered his plea on Oct. 29, 2014.
Today, U.S. District Judge Randy Crane sentenced all three men to a sentence of 262 months in federal prison. Bulos-Gonzalez will serve a three-year-term of supervised release following his sentence, while Vargas-Hernandez and Morales-Manriquez are expected to face deportation proceedings following completion of their prison terms. The sentences today were enhanced as the court took into consideration the fact that a firearm was used and a ransom demand was made. The court further found that the victims, who were citizens of Mexico, were particularly susceptible to this type of offense and took that into consideration when handing down the sentences.
On Feb. 9, 2014, law enforcement received a 911 call from an illegal alien claiming he and a group of other undocumented aliens were being held against their will at a stash house in Pharr. Upon their rescue, these individuals told law enforcement they were kidnapped at gunpoint from a stash house by the defendants and taken to the stash house where they were made to call their families and request money to be paid for their release. They were threatened with death if the money was not paid.
All three defendants have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by Homeland Security Investigations, Border Patrol and Pharr Police Department. Former Assistant U.S. Attorney (AUSA) Juan Villescas prosecuted the case. AUSA Leo J. Leo III handled the sentencing hearing today.
Heber Springs Man Indicted on Multiple Counts of Sexual Exploitation of MinorsRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Cindy Johnson, acting special agent in charge of Homeland Security Investigations New Orleans, announced today the arrest of Spencer Goudy, 22, of Heber Springs, and the unsealing of an indictment against Goudy charging him with multiple counts related to the sexual exploitation of minors.
The seven-count indictment, returned by a Federal Grand Jury on July 7, 2015, charges Goudy with the sexual exploitation of five minors ranging in ages between 13 and 16 at the time of victimization. Goudy is charged with 4 counts of enticement of a minor to engage in a sex act, 2 counts of production of child pornography, and 1 count of possession of child pornography.
Homeland Security agents arrested Goudy on July 14, 2015. He is scheduled to appear before United States Magistrate Judge J. Thomas Ray on July 15, 2015. A trial date will be set at that time.
The investigation began in May 2014, when a 13-year-old female disclosed to the Arkansas State Police Crimes Against Children Division that she was having a sexual relationship with Spencer Goudy. Goudy was arrested and subsequently charged in Cleburne County with Rape of a Minor less than 14 years of age, a violation of Arkansas Code Annotated 5-14-103(a)(3)(A).
Upon Goudy’s arrest, a cellular telephone was seized and later searched pursuant to a federal search warrant. The search of Goudy’s cellular telephone revealed that Goudy was using his cellular telephone to entice multiple minor females to engage in sex acts. 425 West Capitol Avenue, Suite 500 (501) 340-2600 Post Office Box 1229 Little Rock, Arkansas 72203-1229 Further analysis of Goudy’s cellular telephone revealed multiple images of minors engaged in sexually explicit conduct.
“With the advancement of technology and social media, there are now countless ways children can be exploited,” Thyer said. “The arrest of Mr. Goudy today highlights that sad fact and should be another reminder to parents to keep an open dialogue with their children about their use of technology and social media. Our office will continue to prosecute individuals like Mr. Goudy who take advantage of and prey on the vulnerability of children.”
“Individuals who produce child pornography are directly responsible for what is, in plain language, the rape of children. These criminal acts steal the innocence of victims and destroy lives,” Johnson said. “Sexual abuse scars children for life, and HSI will continue to use all the tools in its arsenal to identify the perpetrators of these horrendous acts and seek justice on behalf of their victims.”
Goudy is also charged in White County with Rape of a Minor less than 14 years of age, a violation of Arkansas Code Annotated 5-14-103(a)(3)(A).
Enticement of a Minor to Engage in Sexual Activity, a violation of 18 U.S.C.§ 2422(b), carries a penalty of not less than 10 years to life imprisonment, not less than 5 years to life of supervised release, and a fine of up to $250,000.
Production of Child Pornography carries a penalty of not less than 15 years to life imprisonment, not less than 5 years to life of supervised release, and a fine of up to $250,000. Possession of Child Pornography carries a penalty of not more than 10 years imprisonment, not less than 5 years to life of supervised release, and a fine of up to $250,000.
This investigation was conducted by the Heber Springs Police Department, Arkansas State Police, and HSI. It is being prosecuted by Assistant United States Attorney Kristin Bryant.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Hawaii Businessman Convicted of Federal Tax Crimes for Failing to Report Millions of Dollars in Income Disguised as Company ExpensesRead the Press Release
A Hawaii businessman was convicted yesterday following an 11-day jury trial in Honolulu of one count of corruptly endeavoring to obstruct the administration of the Internal Revenue Code and six counts of filing false individual income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Florence T. Nakakuni of the District of Hawaii.
The jury convicted Albert S.N. Hee, 61, of Kailua, Hawaii, of filing false income tax returns for tax years 2007 through 2012, and of obstructing the Internal Revenue Service (IRS) from 2002 through 2012. According to court documents and the evidence introduced at trial, Hee owned Waimana Enterprises Inc., a telecommunications holding company based in Honolulu. Over the course of a decade, Hee directed Waimana to pay millions of dollars in personal expenses on his behalf. He falsely deducted the payments from his corporate tax returns as if they were legitimate business expenses, and failed to report the payments as income on his individual returns.
“The jury’s verdict reflects the department’s unwavering commitment to U.S. taxpayers to aggressively pursue and prosecute individuals like Mr. Hee, who cheat the government to line their own pockets and finance their extravagant lifestyles,” said Acting Assistant Attorney General Ciraolo.
Hee’s lavish spending included paying more than $96,000 for personal massages; paying his wife and children full-time salaries with benefits packages, even though they performed little to no work for the company; and paying more than $736,900 in college tuition and housing for his three children. Hee also directed Waimana to pay various expenses on his personal credit card, including family trips to Walt Disney World, Tahiti, France, Switzerland, and a four-day vacation at the Mauna Lani resort on the Big Island of Hawaii, which Hee falsely characterized as a “stockholder’s meeting” and deducted as a business expense on the company’s tax return.
In 2008, Hee used company funds to purchase a home in Santa Clara, California, valued at $1.3 million. Hee told his accountants that the property would be used as an employee retreat in an attempt to disguise it as a legitimate business expense. However, Hee’s children testified at trial that from 2008 through 2012, they lived in the home while attending college in Santa Clara and did not pay rent to Waimana for their use of the property. Hee’s son testified that the house was walking distance from the college campus, and that he and his sister rented other rooms of the house to their college friends, but kept the rent that they collected from their roommates and did not give it to their father’s company.
At Hee’s scheduled Oct. 26 sentencing, he faces a statutory maximum sentence of three years in prison for each charge, a fine of up to $250,000 and restitution to the IRS.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Nakakuni commended the special agents of IRS–Criminal Investigation, who investigated the case, and Trial Attorney Quinn P. Harrington of the Tax Division and Assistant U.S. Attorneys Les Osborne and Larry Tong of the District of Hawaii, who are prosecuting the case.
Harrisburg Man Charged with Four Additional Bank Robberies in Pennsylvania and New JerseyRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District of Pennsylvania announced today that a Harrisburg man who pled guilty to the December 9, 2014 robbery of the Mid Penn Bank on North Front Street in Harrisburg has been charged with four additional bank robberies.
According to United States Attorney Peter Smith, Dylan Blum, age 22, has been charged in a four count Criminal Information that was filed in U.S. District Court in Harrisburg on Friday, July 10, 2015, charging him with the robberies of four banks in December of 2014 and January of 2015 in Northampton County, Pennsylvania and in New Jersey. Blum allegedly passed a threatening note to tellers at three of those robberies and attempted to rob another bank but was prevented by employees from entering that bank. Blum allegedly made off with a total of $5,788.00 from the three banks he was able to rob. Blum turned himself in to the Harrisburg Police department on January 3, 2015.
The government also filed a plea agreement in the case which is subject to the approval of the court. Blum is currently in custody.
The case was investigated by the Harrisburg Police Department and the Harrisburg Office of the Federal Bureau of Investigation. Assistant United States Attorney William A. Behe has been assigned to prosecute the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
For this case, the maximum penalty under federal law for each count is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Guilty Plea in Fraudulent Employment Visa SchemeRead the Press Release
CONCORD, N.H. – Jae Won Lee, 38, of Rockville, Maryland, pleaded guilty to two counts of causing others to make false statements on visa applications filed with the National Visa Center in Portsmouth, New Hampshire, reports Acting United States Attorney Donald Feith.
Lee worked with an emigration company in Seoul, South Korea, that helped South Koreans obtain employment-based visas to immigrate to the United States. From in and around March 2008, through in and around December 2014, Lee recruited various U.S. employers, including Wallace Enterprises, Inc. d/b/a The Cleaning Authority, a company in Falls Church, Virginia, to file various documents falsely representing to the United States government that they would hire certain visa applicants if the applicants received employment-based visas, when, in actuality, no positions were available for the applicants. Lee told some employers they were not required to hire the applicants and he paid or offered to pay some employers for filing false documents.
Lee also falsely informed visa applicants that Wallace or other employers would hire them if they were granted visas. That caused the applicants to unwittingly file Applications for Immigrant Visa and Alien Registration with the National Visa Center that contained materially false information identifying Wallace and other companies as the U.S. employers who would hire them if they were issued visas. Lee’s actions resulted in applicants receiving employment-based visas when there was no job waiting for them in the United States.
Lee is facing a maximum sentence of five years in prison and a maximum fine of $250,000. A sentencing hearing has been scheduled for November 3, 2015.
This case was investigated by the offices of the Inspectors General for the Department of State and the Department of Labor. It is being prosecuted by Assistant United States Attorney Mark S. Zuckerman.
Four Plead Guilty in Million Dollar Tax Refund Fraud SchemeRead the Press Release
Maria J. Rodriguez, 45, of Smyrna, Tenn.; Regulo Aldama-Olivares, 26, and Carlos Sanchez-Aldama, 30, both of Mexico; and Marcelino Lainez-Villalobos, 38, of Honduras; each admitted conspiring with one other, and with other persons between January 2011 and June 2014 to defraud the United States.
“Those who exploit the vulnerabilities in the federal tax system and steal from the taxpayers will continue to be pursued by the U.S. Attorney’s Office and our law enforcement partners,” said U.S. Attorney David Rivera.”
Each defendant admitted their participation in the scheme, including some who travelled to Tennessee to supply documents and identifications and prepare mail and retrieve the fraudulent tax returns. The defendants worked together to steal or help others to steal over $1 million of taxpayer money.
“Investigating refund fraud and identity theft continues to be a priority for IRS Criminal Investigation,” added Christopher A. Henry, IRS Special Agent in Charge. “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. Law enforcement is serious about investigating these crimes and holding those who would defraud the government accountable.”
"Identifying financial crimes that threaten the health of our national economy and exposing criminals who attempt to steal from law-abiding taxpayers will continue to be a major investigative priority for HSI," said Cindy M. Johnson, Acting Special Agent in Charge of Homeland Security Investigations in New Orleans.
Each defendant faces 5 or more years in prison and those from Mexico and Honduras also face deportation.
Aldama-Olivares and Lainez-Villalobos are scheduled for sentencing October 30, 2015. Rodriguez and Sanchez-Aldama are scheduled for sentencing November 6, 2015.
This case was investigated by agents of the IRS- Criminal Investigation; Homeland Security Investigations; and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Hilliard Hester.
Former Wheeling Island Casino employee sentenced for wire fraudRead the Press Release
WHEELING, WEST VIRGINIA – Mark E. Patterson, 47, of Wellsburg, West Virginia, was sentenced today to 12 months in prison for wire fraud. United States Attorney William J. Ihlenfeld, II, announced.
Patterson used his position as the main vault banker at Wheeling Island Hotel, Casino and Racetrack to steal more than $300,000 which he then deposited into various personal bank accounts. Patterson routinely underreported the daily cash proceeds earned on the casino floor. In turn, the casino they listed these false amounts on their financial reports which were sent to auditors and their parent company in New York. Patterson pled guilty in October 2014 to one count of “Wire Fraud.”
Assistant U.S. Attorney Robert McWilliams prosecuted the case on behalf of the government. The West Virginia State Police Bureau of Criminal Investigations led the inquiry.
U.S. District Judge John Preston Bailey presided.
Former St. Louis City Police Officer Sentenced to 24 Months on Weapons ChargesRead the Press Release
St. Louis, MO – United States District Court Judge Audrey G. Fleissig sentenced former St. Louis City Police Officer DON McGHEE to 24 months imprisonment this afternoon on charges of providing a firearm to known drug dealers to facilitate their distribution of crack cocaine and marijuana in the City of St. Louis.
According to court documents, McGhee was a St. Louis Metropolitan Police Officer assigned as a Patrolman in the Sixth District. Officer McGhee knew and associated with individuals who stored and distributed quantities of crack cocaine and marijuana in and from a house located on Cottage Avenue in the City of St. Louis. On March 2, 2014, Officer McGhee took a Mossberg 12-gauge pistol grip shotgun to the Cottage Avenue drug house and gave it to one of the drug dealers knowing, believing or having reason to believe that the drug dealer would use the shotgun in relation to and in furtherance of the drug trafficking. During the execution of a search warrant at the Cottage Avenue house several days later, law enforcement officers recovered the Mossberg pistol grip shotgun, fully loaded, along with several other firearms, ammunition, quantities of crack cocaine and marijuana and a large amount of cash.
McGhee, St. Louis City, pled guilty in April 2015 to one felony count of conspiracy to possess a firearm in relation to a drug trafficking crime.
United States Attorney Richard Callahan stated that this case again proved that the St. Louis City Police Department had the will and the integrity to investigate wrongdoing within its own Department. He noted that this investigation originated with the St. Louis City Police Department, which then sought the partnership of additional law enforcement agencies as its investigation expanded. In addition to the St. Louis City Police Department, the case was also investigated by the Federal Bureau of Investigation, the United States Drug Enforcement Administration and the St. Louis Circuit Attorney’s Office.
Former Navy Pilot and Top Gun Graduate Sentenced to 50 Years in Prison in Sextortion CaseRead the Press Release
NORFOLK, Va. – Daniel Chase Harris, 31, of Virginia Beach, Virginia, was sentenced yesterday to 600 months in prison, followed by lifetime supervised release for his crimes including production of child pornography, use of a facility of interstate commerce to entice a minor to engage in criminal sexual activity, receipt of child pornography, transportation of child pornography, possession of child pornography and obstruction of justice.
Harris was found guilty on 31 counts on March 9, 2015, after a 12-day trial. According to court records and the evidence at trial, Harris was a Lieutenant in the U.S. Navy and a Navy Top Gun graduate stationed at Naval Air Station Oceana. Harris was originally arrested by Bedford County Sheriff’s Office in November 2013. The investigation and evidence at trial revealed that Harris posed online as a teenage boy and would convince young teen girls between the ages of 12 and 17 to send him risqué pictures of themselves. He then extorted the girls to send him additional, sexually graphic and explicit images of themselves or he threatened them with posting the images online or sending the images to family or friends. Nine victims were involved in this case, three of whom are from Virginia. In pronouncing the sentence, District Judge Mark S. Davis stated Harris’ actions were “sadistic” and equated to “torture.”
Homeland Security Investigations and the Southern Virginia Internet Crimes Against Children Task Force (SOVA ICAC) led the investigation in this case. Assistant U.S. Attorney Elizabeth M. Yusi and Special Assistant U.S. Attorney Wes Nance, Deputy Commonwealth’s Attorney for Bedford County, are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-76.
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Former Mount Juliet Police Sergeant Charged with Federal Program Fraud and Wire FraudRead the Press Release
Jason Ezell, 40, of Lebanon, Tenn., was charged in a criminal information on July 10, 2015, with federal program fraud and wire fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Ezell was a sergeant with the Mount Juliet Police Department and supervised the Crime Suppression Unit. In that position, Ezell was responsible for preparing time cards and submitting overtime logs for officers working in support of and assisting in federal Organized Crime Drug Enforcement Task Force (OCDETF) investigations. The OCDETF Program is a federal program within the United States Department of Justice which aims to focus federal resources to combat the flow of illicit drugs and dismantle drug trafficking organizations.
During the period of January 2013 through April 2015, Ezell fraudulently submitted City of Mount Juliet Time Card Reports and OCDETF Authorized Overtime Logs for payment, representing that that he had worked more than 500 hours of overtime that he did not in fact work. Ezell was paid more than $12,000 for the overtime he claimed.
If convicted, Ezell faces up to 10 years in prison for federal program fraud and up to 20 years in prison for wire fraud and a $250,000 fine for each charge.
This case was investigated by the Tennessee Bureau of Investigation; the FBI; the District Attorney’s Office for the 19th Judicial District; and the DOJ-Office of Inspector General. Assistant U.S. Attorney Thomas J. Jaworski is prosecuting the case.
A criminal information is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
Former Boston Police Officer Pleads Guilty to Making False StatementsRead the Press Release
BOSTON – A former Boston Police officer and former treasurer of the Boston Police Patrolmen’s Association pleaded guilty today in U.S. District Court in Boston to making a false statement to the FBI in connection with his cash loans to a known criminal.
David Michael Fitzgerald, 49, who resides in Milton, pleaded guilty to a one count Information of making a false statement to the FBI. Fitzgerald was a Boston Police officer from 1996 until this June when he resigned as part of his plea agreement. He was the treasurer of the Boston Police Patrolmen’s Association (BPAA) from 2012 to 2014.
According to court documents, Fitzgerald developed a relationship with an individual who was a known street-level drug dealer and bookmaker. During the course of this relationship, Fitzgerald made cash loans to the individual, which were paid back in weekly installments. On April 27, 2015, Fitzgerald met the individual in Watertown in order to collect a $500 cash installment for one of the outstanding loans. Later that same day, when federal agents who were investigating the matter questioned Fitzgerald, he falsely stated that the purpose of his meeting with the individual was simply social in nature and that he had never loaned money to the individual. Not only were these statements untrue, but they were intended to interfere with an ongoing federal investigation.
The charging statute provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. In addition to his resignation, the plea agreement also contemplates a joint, non-binding recommendation to the Court for a sentence of one year probation. 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. Judge Nathaniel Gorton set sentencing for Oct. 20, 2015.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Evans, made the announcement today. The U.S. Attorney’s Office also wishes to acknowledge the cooperation of the Boston Police Department’s Anti-Corruption Division. The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris and Robert A. Fisher of Ortiz’s Public Corruption & Special Prosecutions Unit.
Five Individuals Indicted in July 2015 Federal Grand JuryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office announced today the results of the July 2015 Federal Grand Jury.
“The following named individuals have been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-parolable.”
ERIC WAYNE LOCKHART, age 30, of Muldrow, Oklahoma
Use Of Telephone To Make Bomb Threat
The Indictment alleges that on or about June 15, 2015, in the Eastern District of Oklahoma, the defendant did, through use of a telephone, make a threat to kill, injure and intimidate an individual by means of an explosive, in and affecting interstate commerce. The charge arose from an investigation by the Sequoyah County Sheriff’s Department and the Bureau of Alcohol, Tobacco and Firearms.
The charges are in violation of Title 18, United States Code, Section 844(e), punishable by up to 10 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Chris Wilson
DERRICK CASEY FRY, age 35, of Nashoba, Oklahoma
a/k/a DERREK CASEY FRYAssault With A Dangerous Weapon
Assault Resulting In Serious Bodily InjuryThe Indictment alleges that on or about the 23rd day of June, 2015, in the Eastern District of Oklahoma, in Indian Country, within the special maritime and territorial jurisdiction of the United States, the defendant, an Indian, assaulted James Belvin with a dangerous weapon, with the intent to do bodily harm which resulted in serious bodily injury. The charges arose from an investigation by the Choctaw Nation Tribal Police and the Federal Bureau of Investigation.
The charges are in violation of Title 18, United States Code, Sections 1153, 1151 and 113(a)(3) and Title 18, United States Code, Sections 1153, 1151 and 113(a)(6), punishable by not more than 10 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Edward Snow
JAVONTE SHAWN ALEXANDER, age 23, of Brooklyn, New York
MALIK AIULU ANDREWS, age 19, of Oxnard, California
JAMES RODNEY SIMS, age 27, of Douglasville, Georgia
Possession Of Fifteen Or More Counterfeit Access Devices
The Indictment alleges that on or about April 24, 2015, within the Eastern District of Oklahoma, the Defendants, each aiding and abetting the other, knowingly possessed fifteen (15) or more access devices as defined in Title 18, United States Code, Sections 1029(e)(1), 1029(e)(2) or 1029(e)(3), which are counterfeit or unauthorized access devices, with said activity affecting interstate commerce.
The charges arose from an investigation by the Oklahoma Highway Patrol and the United States Secret Service. The charges are in violation of Title 18, United States Code, Sections 1029(a)(3) and 2, punishable by up to 10 years imprisonment, a fine of up to $250,00.00 or both.
Assistant United States Attorney Melody Nelson
Federal Welfare Fraud Conviction Results in Prison and Deportation of Muhammad DalalliRead the Press Release
Muhammad Dalalli Sentenced for Role in Welfare Fraud Scheme
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Muhammad Dalalli, 41, of Grand Rapids, was sentenced by Chief U.S. District Judge Robert J. Jonker for his scheme to defraud the federal government in connection with subsistence benefits.
On November 4, 2013, Dalalli and his wife were charged with defrauding the federal government of numerous subsistence benefits after arriving in the United States from Iraq. The programs defrauded included the Women, Infants and Children ("WIC") program, Temporary Assistance to Needy Families ("TANF"), HUD, and Medicaid benefits. Dalalli and his wife defrauded these programs by failing to reveal their ownership of Lebanese bank accounts and other assets, and by concealing their living arrangements in connection with their receipt of HUD-subsidized housing. The fraud scheme resulted in losses totaling $126,739. Dalalli, a naturalized U.S. citizen, was additionally charged with making false statements in connection with his citizenship application.
Dalalli’s trial commenced on January 13, 2015. After the first day of trial he entered a guilty plea to all counts. Shortly thereafter, he requested that his guilty pleas be set aside, claiming that he had been coerced into pleading guilty by his defense attorney. This request was denied by Judge Jonker, who noted that the court had inquired at length with Dalalli concerning his decision to plead guilty, and Dalalli had assured the court that his decision to plead guilty was voluntary.
On July 14, 2015, Judge Jonker sentenced Dalalli to serve a prison term of 27 months, followed by supervised release of 36 months. The sentence included restitution of $126,739. Dalalli was also stripped of his U.S. citizenship and ordered deported following the completion of his sentence. Dalalli’s wife, Rima Alame, will be sentenced on August 31, 2015.
This case was investigated by the Department of Agriculture, Office of Inspector General, the Federal Bureau of Investigation, and the Michigan Department of Health and Human Services, Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Timothy VerHey.
Federal Grand Jury Indictment(s)Read the Press Release
Contact Person: Beth Drake (803) 929-3000
United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictment(s) against the following:
Gaffney Man Indicted for Food Stamp Fraud
Mickey Dean Allison, Jr., age 39, owner of Original Allison’s Produce, from Gaffney, South Carolina, was charged in a two-count indictment. Allison was charged with Food Stamp Fraud, a violation of Title 7, United States Code, Section 2024, and Defrauding the United States Government, a violation of Title 18, United States Code, Section 641. The maximum penalty Allison could receive is 20 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Office of Inspector General for the USDA and Cherokee County Sheriff's Office and is assigned to Assistant United States Attorney Jamie Lea Schoen of the Greenville office for prosecution.The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Entercom Required to Divest Three Denver Radio Stations as Part of Lincoln AcquisitionRead the Press Release
Settlement Preserves Competition That Benefits Radio Advertisers
Entercom Communications Corp. (Entercom) will be required to divest three radio stations in Denver, in order to proceed with its acquisition of Lincoln Financial Media Company (Lincoln). Without these divestitures, the transaction would have resulted in higher prices and a reduced quality of service to purchasers of English-language radio advertising in Denver.
“Entercom and Lincoln own some of the most highly rated radio stations in Denver, and advertisers targeting radio listeners in Denver have benefitted from competition between them,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “These divestures will preserve that competitive dynamic.”
The Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court of the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit. According to the complaint, the proposed merger would have eliminated the head-to-head competition that currently exists between Entercom’s and Lincoln’s radio stations for the business of local and national companies that advertise to English-language listeners on radio stations in Denver. Under the terms of the proposed settlement, Entercom has agreed to divest three stations in Denver to a department-approved buyer.
Entercom is incorporated in Pennsylvania and headquartered in Bala Cynwyd, Pennsylvania. Lincoln is an indirect, wholly owned subsidiary of Lincoln National Corp. Lincoln is organized under the laws of North Carolina, and headquartered in Atlanta. Both Entercom and Lincoln operate broadcast radio stations in various metropolitan areas throughout the United States.
As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to David Kully, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Fourth Floor, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Entercom Complaint
Entercom Explanation
Entercom Hold Separate Stipulation and Order
Entercom Proposed Final Judgment
Entercom Competitive Impact Statement
El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor Realizan Acuerdo Conciliatorio Innovador en Resolución de Alegatos de Discriminación en Créditos para Automoviles por parte de HondaRead the Press Release
WASHINGTON – El Departamento de Justicia [Department of Justice (DOJ)] y la Oficina para la Protección Financiera del Consumidor [Consumer Financial Protection Bureau (CFPB)] anunciaron hoy un acuerdo conciliatorio innovador para resolver alegatos de que American Honda Finance Corporation (Honda) mantuvo un patrón o práctica de discriminación contra prestatarios afroestadounidenses, hispanos y asiáticos/isleños del Pacífico en préstamos automóviles. Honda tiene sede en Torrance, California.
El acuerdo conciliatorio es especialmente destacable debido al compromiso de la compañía de limitar significativamente la libertad de criterio de los concesionarios de automóviles para cobrar sobreprecios en las tasas de interés en préstamos de Honda. Específicamente, Honda aceptó cambiar la manera en que establece el precio de sus préstamos limitando los márgenes de ganancias de los vendedores a 125 puntos base (o 1.25%) para préstamos de 60 meses o menos y a 100 puntos base (o 1%) para préstamos de más de 60 meses. El acuerdo conciliatorio también establece 24 millones de dólares en compensación para supuestas víctimas de discriminación pasada por parte del noveno mayor prestamista automotor del país.
“Felicitamos a Honda por su liderazgo en aceptar imponer límites inferiores a los márgenes de ganancias discrecionales y por su compromiso de tratar de manera justa a todos sus clientes sin importar su raza u origen nacional”, dijo la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta de la División de Derechos Civiles. “Reconocemos que los concesionarios brindan un servicio valioso al conectar a los clientes con los prestamistas, y que deben ser compensados de manera justa por ese servicio. Creemos que el nuevo sistema de compensación de Honda logra el equilibrio entre una compensación justa para los vendedores y préstamos justos para los consumidores. Esperamos que el liderazgo de Honda incentive al resto de la industria a restringir los márgenes de ganancias de los vendedores para abordar el tema de la fijación de precios discriminatorios”.
Las investigaciones coordinadas por parte del departamento y la CFPB que precedieron al acuerdo conciliatorio de hoy establecieron que este sistema de determinación subjetiva y libre de los precios hace que prestatarios calificados afroestadounidenses, hispanos y asiáticos/isleños del Pacífico de Honda terminen pagando más que los prestatarios blancos no hispanos calificados. El Departamento y la CFPB preveen que los nuevos límites de Honda respecto a los márgenes de ganancias discresionales reducirán o eliminarán substancialmente estas disparidades.
Honda es conocida como prestamista automotriz “indirecta” porque, en vez de recibir solicitudes directamente de los consumidores, la compañía realiza la mayoría de sus préstamos a través de concesionarios de todo el país que ayudan a sus clientes a pagar por su automóvil nuevo o usado presentando su solicitud de préstamo a Honda. La práctica comercial de Honda, como la de la mayoría de las grandes sociedades de préstamo automotores, permite que los concesionarios varíen la tasa de interés de un préstamo respecto de la tasa inicialmente establecida por Honda según factores crediticios objetivos del prestatario. Los concesionarios reciben pagos más altos de Honda por préstamos que incluyan una tasa de interés más alta.
El acuerdo conciliatorio resuelve alegatos del Departamento y la CFPB de que Honda discriminó por cobrar a miles de prestatarios afoestadounidenses, hispanos y asiáticos/isleños del Pacífico mayores tasas de interés que a prestatarios blancos no hispanos. Las agencias alegan que Honda les cobraba mayores tasas de interés a los prestatarios debido a su raza u origen nacional, y no debido a su solvencia u otros criterios objetivos relacionados con el riesgo crediticio. La demanda de los Estados Unidos alega que la víctima afroestadounidense promedio fue obligada a pagar más de 250 dólares más durante el préstamo por discriminación, la víctima hispana promedio fue obligada a pagar más de 200 dólares más durante el préstamo por discriminación y la víctima asiática/isleña del Pacífico promedio fue obligada a pagar más de 150 dólares más durante el préstamo por discriminación. La Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)] prohibe esta clase de discriminación en todos los tipos de préstamos, entre ellos los préstamos automotores. El acuerdo conciliatorio de Honda con el DOJ, que está sujeto a la aprobación del tribunal, fue presentado hoy en el Tribunal Federal de Distrito del Distrito Central de California junto con la demanda del DOJ. Honda resolvió los alegatos de la CFPB firmando un acuerdo conciliatorio administrativo público.
“El CFPB está comprometido a crear un mercado justo para todos los consumidores, y otros prestamistas automotores deberían tener en cuenta la acción de hoy”, dijo el Director Richard Cordray de la CFPB. “El nuevo sistema de fijación de precios y compensación de Honda demuestra liderazgo en la industria y representa un paso significativo en la protección de los consumidores contra la discriminación”.
“Las prácticas de financiamiento de Honda que permitían a los concesionarios poner sobreprecios en préstamos individuales trajeron como resultado discriminación ilegal, ya que compradores de autos minoritarios pagaron más por sus préstamos que compradores no pertenecientes a minorías con historiales crediticios similares”, dijo la Fiscal Federal Eileen M. Decker del Distrito Central de California. “Este acuerdo conciliatorio establece que Honda aportará 24 millones de dólares a un fondo del acuerdo conciliatorio para ofrecer un desagravio a miles de prestatarios minoritarios, no solo en este distrito, donde tienen sede las operaciones en Estados Unidos de Honda, sino en todo el país. Esto envía un mensaje claro de que no se tolerará ningún tipo de discriminación, y de que las demás empresas automotrices deberían seguir el camino de Honda y tomar medidas para asegurarse de que sus prácticas de venta y financiación no traigan como resultado actos de discrminación”.
Además de los 24 millones de dólares en pagos por su conducta en el pasado, bajo la orden por consentimiento del DOJ, Honda también deberá pagar 1 millón de dólares para financiar un programa de educación financiera al consumidor enfocado en la financiación automotriz para clientes que está diseñado para beneficiar a poblaciones afroestadounidenses, hispanas y asiáticas/isleñas del Pacífico.
El acuerdo conciliatorio también exige que Honda mejore sus sistemas de monitoreo y cumplimiento. El acuerdo conciliatorio permite que el prestamista experimente con diferentes enfoques para reducir la discriminación y requiere que informe periódicamente al departamento y la CFPB sobre los resultados de sus iniciativas, así como también comente maneras potenciales de mejorar los resultados. El departamento felicita a Honda por trabajar de manera cooperativa para llegar a una resolución adecuada de este caso.
El acuerdo conciliatorio establece la existencia de un administrador para ubicar a las víctimas y distribuir los pagos de compensación sin costo para los prestatarios a los que el departamento y la CFPB identifiquen como víctimas de discriminación de Honda. El departamento y la CFPB realizarán un anuncio público y publicarán información en sus portales una vez que existan más detalles sobre el proceso de compensación. El administrador del acuerdo se comunicará con los prestatarios que son elegibles para recibir compensación bajo el acuerdo conciliatorio y no es necesario que se comuniquen con el departamento o la CFPB por el momento.
La División de Derechos Civiles, la Fiscalía Federal para el Distrito Central de California y la CFPB son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama fundó la Fuerza de Tarea de Coacción contra el Fraude Financiero para generar una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de agencias federales, autoridades regulatorias, inspectores generales y fuerzas del orden público estatales y locales quienes, trabajando juntos, implementan un conjunto poderoso de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar las iniciativas en todo el poder ejecutivo federal y, junto con asociados estatales y locales, investigar y enjuiciar delitos financieros importantes, garantizar un castigo justo y eficaz para quienes cometen delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar ganancias para las víctimas de delitos financieros.
La coacción asociada a las leyes de otorgamiento justo de préstamos por parte del departamento es llevada a cabo por la Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles. Desde que se estableció la Unidad de Préstamos Justos en febrero de 2010, entabló o resolvió 40 casos de préstamos bajo la Ley de Vivienda Justa, la ECOA y la Ley de Alivio Civil para los Miembros de las Fuerzas Armadas [Servicemembers Civil Relief Act]. Los acuerdos en estos casos proveen un total de al menos 1,200 millones de dólares en asistencia monetaria para comunidades afectadas. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso sujetos a ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications.
Easton Police Commissioner Charged in Federal Steroid and Prescription Narcotic Distribution InvestigationRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that RAYMOND J. MARTIN, 48, of Easton, was arrested today in connection with a federal steroid and prescription narcotic distribution investigation.
MARTIN, who is a member of the Easton Police Commission, appeared before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and was released on bond.
This matter stems from a long term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations into individuals who were receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation also revealed that certain individuals were distributing prescription pills, including oxycodone.
As alleged in the criminal complaint, a court-authorized wiretap intercepted MARTIN engaging in text communications with other members of the conspiracy discussing the distribution of anabolic steroids and oxycodone.
The complaint charges MARTIN with conspiracy to possess oxycodone with intent to distribute, an offense that carries a maximum term of imprisonment of 20 years.
Eleven other individuals have been charged as a result of the investigation. During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, more than 1,000 oxycodone pills, approximately 350 grams of powder cocaine and four long guns.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations, with the assistance of the U.S. Marshals Service.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
U.S. Attorney Daly stressed that a federal complaint is not evidence of guilt. Charges are only allegations and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
East Haven Resident Admits Operating $2 Million Investment SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that JOHN D’AURIA, 41, of East Haven, waived his right to indictment and pleaded guilty yesterday before U.S. District Judge Michael P. Shea in Hartford to one count of wire fraud stemming from his operation of an investment scheme that defrauded investors of approximately $2.4 million.
According to court documents and statements made in court, D’AURIA conducted an investment business using the name Fifth Street Capital. D’AURIA was a licensed and registered investment adviser but lost his license in approximately 2011. From approximately 2010 to 2014, D’AURIA engaged in a scheme to defraud investors who had provided him with investment funds by failing to invest the funds as represented and by using the majority of the funds for his personal use.
As part of his scheme, D’AURIA made false statements and misrepresentations to his investors regarding the purported returns generated by their investments. He also represented to investors that their funds were fully invested in separate accounts. In truth, D’AURIA did not fully invest the investors’ funds but rather commingled the funds in his own personal bank accounts and his own trading account.
As a result of D’AURIA’s scheme to defraud, approximately eight investors lost a total of approximately $2.4 million of the funds they provided to D’AURIA.
Judge Shea scheduled sentencing for October 6, 2015, at which time D’AURIA faces a maximum term of imprisonment of 20 years, a maximum fine of more than $4.8 million and an order of restitution.
D’AURIA is released on a $100,000 bond.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Senior Litigation Counsel Richard J. Schechter.
Drug Dealer Sentenced to 120 Months in PrisonRead the Press Release
PORTLAND, Ore. – Tyson Gregory Fortner, 36, of Portland, Oregon, was sentenced by U.S. District Judge Marco A. Hernandez to 120 months in prison following his federal conviction for possession with the intent to distribute methamphetamine. When the defendant is released from prison, he will serve five years of supervised release.
On June 26, 2013, investigators from the Clackamas County Interagency Task Force received information from a confidential informant (CI) that the defendant was a methamphetamine dealer operating in the Portland, Oregon area. Surveillance teams set up on the defendant’s residence in Portland, Oregon and, after he was observed driving away from the residence, they conducted a traffic stop on his car. The defendant was found to be driving without a license. A subsequent search of the defendant’s car found 89 grams of methamphetamine, 38 grams of heroin, a digital scale, and $8,100 in cash. When the officers searched the defendant they found a drug record ledger and $655 in cash. A subsequent search of the defendant’s residence resulted in the discovery of an additional 572 grams of methamphetamine, 123 grams of heroin, 4 grams of psilocybin mushrooms, 14 grams of cocaine, drug packaging material, a digital scale, a .45 caliber Smith and Wesson handgun, a .45 caliber Colt handgun, brass knuckles, and $49,850 in cash. The officers’ investigation revealed that the defendant possessed the drugs with the intent to distribute them and that over the previous eight months he had conservatively distributed at least 84 kilograms of methamphetamine and 567 grams of heroin. The defendant was arrested and indicted on federal charges on July 9, 2013.
“Methamphetamine has been identified as the region’s most serious drug threat, and heroin is a close second,” stated Acting U.S. Attorney Billy Williams. “Our office will continue to work with law enforcement to prosecute these significant drug dealers who are spreading destruction throughout the community for their own personal profit.”
According to the Oregon High Intensity Drug Trafficking Area (HIDTA) Program:
Methamphetamine in the form of crystal methamphetamine, or “ice,” continues to be readily available and widely used throughout the Oregon HIDTA and represents the region’s most serious drug threat. Methamphetamine is a highly addictive central nervous system stimulant that is abused for its euphoric and stimulant effects. Chronic methamphetamine abusers exhibit violent behavior, confusion, insomnia and psychotic characteristics such as hallucinations and paranoia. Methamphetamine-related crime, such as identity theft, abused and neglected children, and other serious person and property crimes, continues to occur at a palpable rate and is prevalent throughout the HIDTA region.
Oregon and Idaho law enforcement officers surveyed in 2015 indicated methamphetamine remains a significant threat due to its level of use and availability; nexus to other crimes such as violent activity and property crime; societal impact; and connection to drug trafficking organizations, primarily MNDTOs [multi-national drug trafficking organizations]. Of law enforcement agencies surveyed, 62 percent reported methamphetamine as the greatest Oregon HIDTA Program drug threat to their area, with the majority indicating methamphetamine as the drug that contributes most to violent crime (88%) and property crime (69%). Furthermore, over 60 percent of officers ranked methamphetamine as the drug that serves as the primary funding source for major criminal activity.
Threat Assessment and Counter-Drug Strategy, Program Year 2016, Oregon HIDTA Program, at 12-13 (June 2015).
The HIDTA report also noted that “heroin availability and its use has reached a critical level and represents a close second to methamphetamine as the region’s most serious drug threat” and that “[n]early a quarter (24%) of law enforcement officers surveyed in Oregon and Idaho in 2015 indicated that heroin was the principal threat to their area due to the substantial rise in availability and the increase in the number of new and younger users and associated overdoses.” Id. at 20.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation involving the Clackamas County Interagency Task Force, the Drug Enforcement Administration, Department of Homeland Security Investigations, the Portland Police Bureau and the U.S. Attorney’s Office. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking organizations and those primarily responsible for the nation’s illegal drug supply. The case was prosecuted by Assistant U. S. Attorney Scott Kerin.
Charlotte Man Sentenced to More Than 15 Years in Prison for Sex Trafficking of A MinorRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Tony Lee Drum, 32, of Charlotte, to 188 months in prison for two counts of sex trafficking of minors and two counts of transporting minors across states lines for purposes of prostitution, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Judge Cogburn also sentenced Drum to a lifetime of supervised release upon completion of his prison term.
Ryan L. Spradlin, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Chief Kerr Putney, of the Charlotte-Mecklenburg Police Department (CMPD) join Acting U.S. Attorney Rose in making today’s announcement.
According to filed court documents and statements made in court, between August 2013 and October 2013, Drum knowingly recruited, enticed, and harbored two minor females, identified in court documents as “D.W.” and “A.C.,” for the purpose of engaging in commercial sex acts. Court records show that Drum met D.W. on a telephone chat service and A.C. on social media, and he knew both girls were minors. On two occasions, court records indicate that Drum drove across state lines to pick up the minors and transport them to Charlotte to engage in prostitution. According to court documents, an alert CMPD officer encountered D.W. while patrolling an area in Charlotte in September, 2013, and later identified her as a missing teen. Law enforcement found A.C. sleeping in Drum’s car in October, 2013, while serving an arrest warrant on Drum for trafficking D.W.
“Drum preyed upon young, vulnerable victims, and with the promise of food, shelter and security, he lured them to Charlotte with the intention of exploiting them for his financial benefit. Fortunately, a well-trained law enforcement officer observed one of the victims and the immediate circumstance and as a result, two young women were rescued from a life on the streets. My office is committed to prosecuting sex trafficking cases and continuing to work with our law enforcement partners to identify those who engage in this illegal, dehumanizing business,” said Acting U.S. Attorney Rose.
“Unfortunately, child predators have become increasingly adept at using social media and other modern communication tools to identify and manipulate their victims,” said Special Agent in Charge Ryan L. Spradlin, ICE Homeland Security Investigations Atlanta. “Whenever HSI and our law enforcement partners encounter children for sale, we won’t rest until we’ve identified and arrested the predators seeking to pimp them out and have rescued their victims from a life of exploitation and abuse.”
Drum will remain in federal custody until he is transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation of the case was handled by the HSI and CMPD. Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s office in Charlotte, prosecuted the case.
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.
Cedar Rapids Felon Sent to Prison for the Maximum Ten Years for Possessing a Firearm and AmmunitionRead the Press Release
A convicted felon who possessed a firearm and ammunition on the streets of Cedar Rapids last October was sentenced today to ten years in federal prison, the statutory maximum sentence possible for his crime.
Bernard James Butler II, age 24, from Cedar Rapids, Iowa, received the prison term after a March 30, 2015, guilty plea to one count of possessing a firearm and ammunition as a felon.
At the guilty plea hearing, Butler admitted that he knowingly possessed a Fabrique Nationale FNX-40 .40 caliber pistol on October 29, 2014, and ammunition. At the plea hearing, Butler also admitted to prior felony convictions in state court for going armed with intent; intimidation with a dangerous weapon; burglary in the second degree; and possession of a controlled substance with intent to deliver.
Butler was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade to 120 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Butler is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the FBI’s Safe Streets Task Force.
Court file information available: https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-001.
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Canadian Man Admits Role in Microcap Stock Manipulation SchemeRead the Press Release
Newark, N.J. – A Canadian stock promoter today admitted his role in a scheme to artificially inflate the stock price of a publicly traded company through manipulative trading and other fraudulent means, U.S. Attorney Paul J. Fishman announced.
Mitchell G. Adam, 47, of Vancouver, Canada, pleaded guilty before U.S. District Judge Jose Linares to an information charging him with conspiracy to commit securities and mail fraud. Adam was initially charged by criminal complaint and arrested on May 20, 2015 at the George Bush Intercontinental Airport in Houston.
According to documents filed in this case and statements made in court:
Between July 2013 and November 2013, Adam conspired with Adam S. Gottbetter, 26, of New York, Kenneth David Stevenson, 55, of Vancouver, and others to manipulate the stock of HBP Energy Corp. (HBPE), a developmental stage company based in Houston. Adam and his conspirators obtained and concealed control of a significant portion of free-trading shares of HBPE stock and agreed to fraudulently inflate the price and trading volume of the stocks through a variety of means, including disseminating false or misleading promotional materials to the investing public and engaging in manipulative trading of the stocks to create the appearance of market interest. Afterwards, they planned to sell the stocks at the fraudulently inflated prices or use the fraudulently inflated value of the companies to solicit private investments, thereby profiting at the expense of the investing public.
Adam and the other conspirators recruited a stock promoter and trader who owned a broker-dealer in New York and who claimed to have experience in various manipulative and fraudulent trading strategies. Unbeknownst to Adam and his co-conspirators, however, this individual was cooperating with law enforcement (the “CW”).
During the scheme, the CW informed Adam, Gottbetter and Stevenson that he had developed an algorithmic trading system, or black box, for the purpose of manipulating the price of stocks. The CW explained that he controlled approximately 32 online brokerage accounts that were opened in the names of foreign nominees and that a computer program that he created could trade between those accounts to create the appearance of massive volume in any stock. Adam, Gottbetter and Stevenson directed the CW to use the black box in connection with the HBPE scheme. In addition to using the CW to manipulate HBPE’s stock, Adam, Gottbetter and Stevenson planned an elaborate promotional campaign that would take place after HBPE’s stock was manipulated to a certain level, including international “call rooms,” listing HBPE’s stock on foreign exchanges, a “road show” and other activities. Law enforcement intervened before the HBPE promotion could take place.
The conspiracy count to which Adam pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Oct. 27, 2015.
Gottbetter and Stevenson both pleaded guilty for their roles in the scheme. Gottbetter was sentenced to 18 months in prison on May 26, 2015. Stevenson was sentenced to one year of probation on May 28, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s plea. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Andrew Calamari.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
Defense Counsel: Frank A. Rubino, Esq. Coral Gables, Florida
Bristol, Virginia Man Pleads Guilty to Knowingly Failing to Update His Sex Offender RegistrationRead the Press Release
ABINGDON, VIRGINIA – A Bristol, Va. man who failed to update his sex offender registration, after resisting arrest and fleeing from police officers in August 2014, pled guilty today in the United States District Court for the Western District of Virginia in Abingdon.
Stevenson G. Harrison, Jr., 34, of Bristol, Va., pled guilty today to a one count indictment of failing to register and update his registration as required by the Sex Offender Registration and Notification Act [SORNA]. At sentencing, Harrison faces a maximum possible penalty of ten years in prison and/or a fine of up to $250,000.
Harrison admitted today that he was required to register under SORNA because of three 1996 convictions he received in Washington County, Virginia for aggravated sexual assault of a minor. Harrison also admitted to failing to update his sex offender registration in August 2014 as required by SORNA. At the guilty plea hearing, Special Assistant United States Attorney Kevin L. Jayne stated that had the government gone to trial, it would had been prepared to prove that in August 2014, Harrison resisted arrest and fled from Bristol, Virginia Police Department officers who attempted to serve Harrison with an arrest warrant. Two officers were injured as a result of the struggle. A manhunt ensued for Harrison, and he was arrested in November 2014 in Lakeland, Florida by the United States Marshals Service.
The investigation of the case was conducted by the United States Marshals Service, the Virginia State Police, and the Bristol, Virginia Police Department. Special Assistant United States Attorney Kevin L. Jayne is prosecuting the case for the United States.
Bowling Green, Armed Career Criminal Sentenced to 15 Years in Prison for Conspiracy to Possess and Distribute Marijuana and Cocaine and Possession of A Firearm by A Convicted FelonRead the Press Release
BOWLING GREEN, Ky. – A Bowling Green armed career criminal was sentenced to 15 years in prison followed by 5 years of Supervised Release by United States District Court Judge Greg N. Stivers, for conspiring to possess and distribute marijuana, cocaine and cocaine base, possession of a firearm by a convicted felon, distribution of cocaine base, and maintaining a residence for the purpose of distributing controlled substances, today announced United States Attorney John E. Kuhn, Jr.
Antwain Santez Sweatt, age 37, pled guilty to five charges in a Superseding Indictment on April 21, 2015. According to the Plea Agreement, between June and July 2014, in Warren County, Kentucky, Sweatt knowingly conspired with others to possess with intent to distribute and distribute marijuana, cocaine and cocaine base. He also admitted to distributing cocaine base, commonly referred to as “crack cocaine,” on July 3, 2014. Further, Sweatt admitted to renting a house located at 834 Victoria Street, in Bowling Green, for the purpose of distributing or using controlled substances. Finally, Sweatt admitted to knowingly possessing a Jiminez Arms, 9 millimeter pistol and ammunition, after having been convicted of a felony. In fact, Sweatt was a multi-convicted felon.
On March 10, 1997, Sweatt was sentenced to 7 years in prison for trafficking in a controlled substance and possession of a controlled substance. On February 3, 2003, Sweatt was sentenced to 10 years in prison for trafficking in a controlled substance and, in a separate case, 15 years in prison for disarming a police officer, second degree assault and resisting arrest.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Bowling Green Police Department, and the Bowling Green/Warren County Drug Task Force conducted the investigation.
Bertha Croom Convicted of Stealing over $125,000 from Social Security AdministrationRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced that Bertha Augustus Croom, age 60, of Baton Rouge, Louisiana, pled guilty on Monday, July 6, 2015 before United States District Judge Shelly Dick to defrauding the U.S. Social Security Administration for more than a decade.
Croom pled guilty to a Bill of Information which alleged that she stole and converted to her own use $127,137 in Retirement Survivor Insurance funds of the Social Security Administration (“SSA”), which she received in the name of her deceased mother. The funds were stolen over the course of 18 years. The government funds misappropriated were retirement survivor funds to which Croom’s mother was entitled, as long as she was alive.
On multiple occasions, Croom falsely represented to SSA that her mother was alive, residing with her, and that she (Croom) was expending the government retirement survivor funds for the benefit of her mother. The funds were disbursed by SSA and collected by Croom beginning on or about March 3, 1995 and continuing through January 3, 2013. According to the East Baton Rouge Coroner’s Office, however, Croom’s mother had died on February 8, 1995.
On multiple occasions between 2011 and 2013, Croom submitted Verification Forms to SSA in which she falsely represented that her mother resided with her (Croom). Additionally, Croom advised SSA in writing that she (Croom) and her mother used the SSA payments to share the cost of living together.
This matter was investigated by the Office of Inspector General for the Social Security Administration. It is being prosecuted by Assistant United States Attorney René Salomon.
Atlantic County, New Jersey, Man Sentenced to More Than Nine Years in Prison for Role in Heroin ConspiracyRead the Press Release
CAMDEN, N.J. – A Pleasantville, New Jersey, man was sentenced today to 110 months in prison for his involvement in a scheme to distribute heroin in around Atlantic County, New Jersey, U.S. Attorney Paul J. Fishman announced.
Nassaun Hines, a/k/a “Bubbles,” a/k/a “Nay,” 30, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to a superseding information charging him with knowingly and intentionally conspiring to distribute 100 to 400 grams of heroin, and possession of a firearm by a previously convicted felon. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From late 2009 and through May 2010, law enforcement officers identified a large-scale, criminal organization that distributed more than one kilogram of heroin throughout the southern New Jersey area. Jamal Reid, 30, of Mays Landing, New Jersey, was the organizer and leader of the ring.
Hines admitted that from January 2009 through May 2010, he sold quantities of heroin in Atlantic County and conspired with others in connection with his drug trafficking activity. Hines admitted that after Reid “fronted” him bulk amounts of heroin, Hines gave the drugs to other members of the conspiracy for distribution and collected payment on Reid’s behalf. In addition, Hines, who is a previously convicted felon, also admitted that he knowingly possessed a firearm on May 15, 2010.
In addition to the prison term, Judge Rodriguez sentenced Hines to serve five years of supervised release.
Reid previously pleaded guilty to Count 1 and Count 2 of a superseding indictment charging him with conspiracy to distribute one kilogram or more of heroin and possessing a firearm as a previously convicted felon. He was sentenced to 154 months in prison on May 28, 2015.
U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency Safe Streets Task Force, under the direction of Special Agent in Charge Richard M. Frankel, which consisted of officers from Atlantic County Prosecutor's Office, Atlantic City Police Department, Northfield Police Department and Pleasantville Police Department; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge George P. Belsky, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: John F. Renner Esq., Marlton, New Jersey
Assistant Attorney General John C. Cruden Announces Leadership Staff Positions in the Environment and Natural Resources DivisionRead the Press Release
Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division (ENRD) announced the appointment of key positions within his leadership staff.
Varu Chilakamarri – Chief of Staff
As Chief of Staff, Chilakamarri will advise Assistant Attorney General Cruden on strategic goals and initiatives, serve as a liaison to senior leadership offices and work on special projects, including helping to coordinate the development of the division’s new animal welfare program.
“Varu is an outstanding lawyer, and a dedicated and accomplished public servant who has already proven herself in a variety of challenging positions with this Justice Department,” said Assistant Attorney General Cruden. “We are lucky to have her now with the Environment Division and I look forward to drawing on her wise counsel, impeccable judgment and administrative skill as we carry out our mission.”
Ms. Chilakamarri has served as a career attorney in the Justice Department for the past nine years, most recently joining ENRD’s Appellate Section earlier this year. Prior to that, she served in the Office of the Associate Attorney General, where she advised department leadership on Civil Division litigation, national security cases, immigration reform and worked to improve agency coordination in the enforcement of federal animal welfare laws. Ms. Chilakamarri joined the Justice Department in 2006 through the Attorney General’s Honors Program as a Trial Attorney in the Civil Division’s Federal Programs Branch, where she was lead counsel representing federal agencies in a broad range of cases concerning the constitutionality of government policies, programs and statutes. She was the recipient of an Attorney General’s Award for Outstanding Service in 2013 and she has also received awards from the Civil Division for her work on preemption cases involving state immigration laws, including in United States v. Arizona. Before joining the Justice Department, she clerked for Judge R. Guy Cole in the U.S. Court of Appeals for the Sixth Circuit and Judge Timothy B. Dyk in the U.S. Court of Appeals for the Federal Circuit. Ms. Chilakamarri graduated from Georgetown University Law Center, where she was Order of the Coif and Articles Editor for the Georgetown Law Journal. She earned degrees in Environmental Science and Political Science from Ohio State University, with honors.
Patricia McKenna – General Counsel and Attorney Educational Coordinator
Assistant Attorney General Cruden named Patricia McKenna to the newly created position of General Counsel and Attorney Educational Coordinator. In this role, Ms. McKenna has the dual responsibility of formulating and coordinating legal policies, plans and objectives on matters related to employee and labor relations, contract and procurement law, appropriations law and other programmatic, operational, administrative and general legal issues as well as serving as the principal division official responsible for managing, overseeing and administering ENRD’s attorney training program. This new position places renewed emphasis on the importance of attorney training in the division.
“Patricia’s depth of experience makes her an ideal candidate to strengthen the human capital of the division and lead efforts to continually train and equip ENRD attorneys so they can grow professionally,” said Assistant Attorney General Cruden. “With her valuable leadership and talent, I believe we can hone the skills that in turn will strengthen our representation of the United States in federal court.”
Ms. McKenna has been an attorney with the Environmental Enforcement Section (EES) of the Environment and Natural Resources Division for 16 years, the last nine as a Senior Attorney supervising EES matters in the Northeast and the Caribbean. She has broad experience representing the United States in all of the major pollution control statutes and has worked extensively on environmental issues in the Caribbean, most notably the Puerto Rico Aqueduct and Sewage Authority and Virgin Island Water and Power Authority cases. In addition, during her time at EES she has been actively involved in hiring and training for the division. Ms. McKenna has also received multiple awards within the department, including the Attorney General’s John Marshall Award in 2002 and the Drenaye Houston Mentor Award in 2013, as well as many awards from the Environmental Protection Agency for her outstanding work. Ms. McKenna began her career as a law clerk for Magistrate Judge A. Simon Chrein in the Eastern District of New York and spent three years as a general litigation associate at O’Melveny & Myers, LLP in New York City. She graduated Order of the Coif from the College of William & Mary, Marshall Wythe School of Law and graduated magna cum laude from Siena College.
Amarillo Man Faces up to 20 Years in Federal Prison for Possessing Prepubescent Child PornographyRead the Press Release
AMARILLO, Texas — Brent Michael McClain, 39, of Amarillo, Texas, appeared today before U.S. District Judge Mary Lou Robinson and pleaded guilty to one count of possession of child pornography, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
McClain, who remains on bond, faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. A sentencing date was not set.
According to plea documents filed in the case, a special agent with the Federal Bureau of Investigation (FBI), working in an undercover capacity in a peer-to-peer (P2P) file-sharing program, saw an invitation from an individual, later identified as McClain, and accepted that invitation. McClain initiated a chat conversation with the undercover agent and gave the undercover agent his password to share files on the P2P network.
The undercover agent browsed McClain’s shared folders and downloaded approximately 30 child pornography images and one child pornography video, including at least one image of a prepubescent male.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI investigated. Assistant U.S. Attorney Timothy Hammer is in charge of the prosecution.
Alleged Armed Robber of Three Manhattan Banks Arrested and Charged in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Commissioner of the Police Department for the City of New York (“NYPD”), announced the arrest last night of LEONID KAZIYEV by agents and detectives of the FBI-NYPD Joint Violent Crimes Task Force (the “Task Force”). KAZIYEV is charged with the armed robberies of three Manhattan banks over the last six months.
Manhattan U.S. Attorney Preet Bharara said: “In this day and age of electronic banking, old-fashioned, stickup bank robberies still happen. As alleged in the Complaint, Leonid Kaziyev went on an armed bank robbery spree over the last several months, targeting two banks in Manhattan on three different occasions, putting innocent people at risk. Thanks to the work of the FBI-NYPD Joint Violent Crimes Task Force, Kaziyev is now in custody.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Leonid Kaziyev brandished a weapon to obtain cash from bank tellers carrying out their daily duties. This dangerous situation happened not once, but at least three times. Thanks to the diligent work of FBI Special Agents and NYPD Detectives assigned to the FBI/NYPD Joint Violent Crimes Task Force, Kaziyev was arrested yesterday."
NYPD Commissioner William J. Bratton said: “There is no better example of collaboration: NYPD detectives and FBI agents working together to address a crime problem. Diligent investigative work has led to the arrest of Mr. Kaziyev for holding up banks across Manhattan, as alleged. I want to thank the agents, detectives and prosecutors who have been working to make this possible.”
A six-count Complaint was unsealed in Manhattan federal court.[1] According to the Complaint, on two different occasions, on December 9, 2014 and June 5, 2015, KAZIYEV robbed the same branch of HSBC bank located on Fifth Avenue and East 21st Street in Manhattan, while brandishing a firearm; and robbed a branch of Bank of America, on Broadway and West 63rd Street in Manhattan, while brandishing a firearm, on May 21, 2015. During each of these robberies, KAZIYEV demanded money from the bank teller working at the window, while displaying a firearm. He escaped with over $10,000 cash each time. KAZIYEV was captured on surveillance video footage during each of the three armed robberies, and a vehicle registered to KAZIYEV was captured on Automatic License Plate Reader (“LPR”) data, arriving to, and leaving, the scenes of the robberies.
KAZIYEV was arrested last night in Queens, New York, by the Task Force, which comprises FBI agents and NYPD detectives. He will be presented later today in Manhattan federal court before U.S Magistrate Judge Ronald L. Ellis. KAZIYEV is charged with three counts of bank robbery, each of which carries a maximum term of 20 years in prison, and three counts of brandishing a firearm in connection with each robbery, each of which carries a mandatory minimum term of seven years in prison consecutive to any other term of imprisonment, up to life in prison. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
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Mr. Bharara praised the outstanding investigative work of the FBI-NYPD Joint Violent Crimes Task Force. He added that the investigation is continuing.
The Office’s Violent and Organized Crime Unit is overseeing the case. Assistant U.S. Attorney Justina L. Geraci is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
ADX inmate convicted of three counts of assault, resisting and impeding a federal employeeRead the Press Release
DENVER – Ishmael Petty, age 46, an inmate at the USP Florence Administrative Maximum Security Prison (ADX) in Florence, Colorado, was found guilty today following a two day jury trial of three counts of assault, resisting and impeding a federal employee using a dangerous weapon resulting in bodily injury, the U.S. Attorney’s Office, the Federal Bureau of Investigation (FBI) and the Federal Bureau of Prisons (BOP) announced. The jury deliberated for one hour and twenty minutes before reaching their unanimous guilty verdicts. The jury trial was heard before U.S. District Court Judge Philip A. Brimmer. Petty is scheduled to be sentenced by Judge Brimmer on October 30, 2015.
Petty was indicted by a federal grand jury on January 27, 2015. The jury trial began on July 13, 2015. It concluded today, July 14, 2015.
According to court documents, and evidence presented at trial, on September 11, 2013, Petty, who was serving a life sentence at ADX for killing his 71 year old cell mate at the United States Penitentiary Pollock in Louisiana, attacked two BOP librarians and a case manager as they were delivering books to his cell. At ADX there is an outer door, a secure area, and then an inner door before entering the actual cell. While the BOP employees believed that Petty was in his cell, he was in fact hiding in the area between the outer and inner doors. He was wearing self-made body armor, consisting of cardboard box like material, and had a weapon, specifically a shank. When the attack began, Petty threw hot sauce in the eyes of one BOP librarian, and then attacked the other librarian. The third BOP employee, a case manager, quickly came to their aid and called for help. One of the BOP employees used their baton to try and subdue Petty. Petty ultimately took control of two batons and used them in his attack. Once the call for help was made Petty went back into his cell.
Prior to Petty’s life sentence for killing his cellmate, he was sentenced to federal prison for 420 months for an elaborate armed bank robbery in Mississippi where he was wearing a police officer’s uniform.
“Defendant stands convicted of a cowardly and brutal assault on defenseless staff at ADX. The defendant, who was serving time at ADX for murdering his cellmate at another prison, ambushed and brutally assaulted two staff librarians, using his much greater size to injure the older of the two severely and permanently,” said U.S. Attorney John Walsh. “Only the courageous intervention of a third staff member prevented the defendant from killing that librarian.”
Petty, who is currently serving a life sentence, faces not more than 20 years in prison, and up to a $250,000 fine per count for each of the three counts of conviction.
This case was investigated by the FBI with support from the Federal Bureau of Prisons.
This trial was handled by Assistant U.S. Attorneys Colleen Covell and Rebecca Weber.
Monday 13 July 2015
Williamsburg Man Sentenced for Timeshare FraudRead the Press Release
NEWPORT NEWS, Va. – Keith D. Kosco, 57, of Williamsburg, Va., was sentenced today to 74 months in prison for Conspiracy to Commit Mail and Wire Fraud, Aggravated Identity Theft and Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity. Additionally, Kosco was ordered to pay restitution, jointly with his co-defendant, Julie Duffield, in excess of $740,000.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office made the announcement after sentencing by U.S. District Judge Robert G. Doumar.
Kosco was indicted by a federal grand jury on November 17, 2014, and pled guilty on March 17, 2015. In a statement of facts filed with his plea agreement Keith Kosco admitted to being the owner and operator of a number of entities involved in travel, tourism and timeshare businesses including Resort Realty, Inc., Resort Solutions, Inc., and Exotic Equity Transfers, LLC (“EET”). A timeshare unit, generally a fully furnished resort accommodation, is a deeded or non-deeded interest in real estate divided into intervals, most commonly by week. Since at least 2007, EET conducted timeshare transfers in exchange for fees charged to the original owner.
Keith Kosco and his employees represented that the timeshare unit transfers conducted by EET would be legitimate and result in clean title passing to a new owner with no further obligations of timeshare ownership (including maintenance fees) on the original owner once the transfer was complete. Transfer paperwork was handled by EET in coordination with Professional Closing Company which served as a third party closing entity, and was operated by co-defendant Julie Duffield. From at least 2009 – 2013, Kosco, Duffield and their employees conducted fraudulent transfers of over 1,000 timeshare units into the names of stolen identities, including Kosco’s incarcerated daughter, who were unaware that they were receiving these properties, and straw buyers (about ten total), who they paid $35-$50 for each transferred unit. The defendants collected fees for conducting the transfers from the original owners. None of the stolen identities / straw buyers paid the required maintenance fees or taxes on the timeshare units, resulting in over $800,000 in losses to select resorts for the unpaid fees. Kosco, Duffield and their employees engaged in various fraudulent acts in support of the scheme, including false statements and promises to resorts, propping up stolen identities with email accounts, bank accounts and tax returns, falsely notarizing signatures and preparing fraudulent deed paperwork. The transfers also had a devastating impact on the credit of the stolen identities/straw buyers.
Julie Duffield pled guilty on January 12, 2015, to conspiracy to commit mail and wire fraud. On May 5, 2015, she was sentenced to twenty-six months in prison and ordered to pay restitution, jointly with Kosco, in excess of $740,000. In a related case, Brendan Hawkins pled guilty on December 22, 2014, to conspiracy to commit mail fraud and on April 29, 2015, he was sentenced to 46 months in prison and ordered to pay more than $500,000 in restitution.
This case was investigated by the FBI and the Internal Revenue Service. Assistant U.S. Attorneys Brian J. Samuels and Kaitlin C. Gratton are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:14cr66.
Waterville Man Resentenced to an Additional 18 Months for Failing to Pay RestitutionRead the Press Release
Contact: Jim Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Gregory Violette, 59, of Waterville, was resentenced today in U.S. District Court by Judge George Z. Singal to 18 months in prison and two years of supervised release for failing to pay restitution.
Court records reflect that on October 31, 2002, Violette was sentenced to 87 months in prison for wire, mail and bankruptcy fraud; making false statements to financial institutions; and money laundering. He was also ordered to serve three years of supervised release and to pay $422,657 in restitution to the victims of his fraud. As of June 2, 2015, he still owed $406,487 in restitution. The Court resentenced the defendant to an additional 18 months in prison to be followed by two more years of supervised release after finding that Violette transferred more than $70,000 to his wife in order to prevent the money from being used to pay restitution to his victims.
The investigation was conducted by the U.S Probation Office and the Office of the Inspector General for the U.S. Department of Veterans Affairs.
United States Files Enforcement Action Against Iowa Dietary Supplement Company and Principals to Stop Distribution of Adulterated and Misbranded Dietary SupplementsRead the Press Release
CEDAR RAPIDS, IOWA – The United States filed a civil complaint today in federal court against Iowa Select Herbs LLC, of Cedar Rapids, Iowa, its president and CEO, Gordon L. Freeman, and a partial owner, Lois A. Dotterweich, to prevent the distribution of adulterated and misbranded dietary supplements, announced Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
Iowa Select Herbs LLC manufactures and distributes a variety of dietary supplements, consisting primarily of extracts from various plants, including papaya leaf, echinacea, elderberry and nettle leaf. The firm also produces a product called “Cold BeGone,” which purports to be a complex of natural ingredients. The complaint alleges that the company’s dietary supplements are manufactured under conditions that are inadequate to ensure the safety of its products and also make unlawful claims to treat or prevent diseases. The department filed the injunction action in the Northern District of Iowa on behalf of the U.S. Food and Drug Administration (FDA).
“The Department of Justice is committed to ensuring that dietary supplements are manufactured and distributed in compliance with the law,” said Principal Deputy Assistant Attorney General Mizer. “We will pursue actions against manufacturers who do not manufacture their products under proper conditions or who make unlawful claims about them.”
According to the complaint, an FDA inspection performed in August 2014 revealed that the company’s dietary supplements are adulterated within the meaning of the federal Food, Drug and Cosmetic Act because they are manufactured, prepared, packed or held in a manner that does not conform to Dietary Supplement Current Good Manufacturing Practices. The complaint alleges, for example, that the company repeatedly failed to test its dietary ingredients, in order to verify their identity, before using them. The complaint also alleges that the firm’s dietary supplements qualify as unapproved and misbranded drugs, in that they claim to treat or prevent a variety of diseases, including cancer, malaria and heart disease, but have never been submitted to the FDA for approval, and have never been found safe and effective for those purposes.
The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Laura Akowuah of the Department of Health and Human Services’ Office of General Counsel – Food and Drug Division.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-cv-60.
Follow us on Twitter @USAO_NDIA.
Truck Driver Sentenced to Max in Child Pornography CaseRead the Press Release
LAREDO, Texas – A truck driver, initially attempting to transport illegal aliens through the Border Patrol (BP) checkpoint, has been ordered to federal prison after authorities found child pornography on his cell phone, announced U.S. Attorney Kenneth Magidson.
Timothy Glenn Williams, 50, of Carl Junction, Missouri, pleaded guilty to one count of possession of child pornography on Nov. 12, 2014.
As part of the sentencing which concluded at a hearing this afternoon, U.S. District Judge Marina Garcia Marmolejo heard additional evidence regarding Williams’ contact list from his cell phone which included 83 underage females he claimed to have met online. Although their birthdates clearly appeared on his phone, Williams attempted to convince the court that he did not realize all of the girls were underage and that he did not know he had befriended so many young females online. Judge Marmolejo ultimately handed Williams a sentence of 120 months, the statutory maximum, in federal prison to be immediately followed by 25 years of supervised release. He will also be ordered to register as a sex offender.
On May 8, 2012, Williams was arrested at the BP station located on Interstate 35, north of Laredo, for transporting illegal aliens within the U.S. for profit. A BP canine had alerted to the tractor and he was driving which led authorities to conduct further inspection. A total of 15 aliens were subsequently discovered within the trailer. Upon further investigation by Homeland Security Investigations (HSI) agents, they found suspected images of child pornography on Williams’ cell phone. Forensic analysis ultimately led to the discovery of 297 images of child pornography in his possession. Williams also admitted to HSI agents that he had downloaded the child pornography from the Internet.
Williams has been in custody since his arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI investigated with the assistance of BP. Assistant U.S. Attorney Sonah Lee is prosecuting the case.
Three Colorado Men Plead Guilty to Illegally Traficking in PaddlefishRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that three Colorado men pleaded guilty in federal court today to illegally trafficking in paddlefish caviar after being caught in an undercover operation in the Warsaw, Mo., area.
In support of Missouri’s paddlefish conservation efforts, the U.S. Fish and Wildlife Service and the Missouri Department of Conservation conducted a covert investigation, “Operation Roadhouse,” centered on an area known as the Roadhouse in Warsaw. As part of the covert operation, state and federal officers operated a paddlefish snagging business. Covert officers also sold paddlefish to people who were interested in buying them.
“Federal law protects our natural resources, such as Missouri’s paddlefish, which have been over-fished until their population has suffered a steep decline,” Dickinson said. “We take seriously the environmental protections provided by federal and state laws, and will investigate and prosecute those who violate them.”
“The American paddlefish is an important cultural and sport-fishing resource to the people of Missouri. This investigation reaffirms our commitment to work with our state wildlife law enforcement partners to protect our nation's wildlife resources and hold violators accountable for their actions,” said Edward Grace, Deputy Chief for the U.S. Fish and Wildlife Service’s Office of Law Enforcement.
“We appreciated the support and partnership of the U.S. Fish and Wildlife Service, the U.S. Attorney's Office and the Department of Justice’s Environmental Crimes Section in helping to protect Missouri’s natural resources,” said Missouri Department of Conservation Protection Chief Larry Yamnitz.
Arkadiy Lvovskiy, 54, of Aurora, Colo., and Dmitri Elitchev, 49, of Centennial, Colo., pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to participating in a conspiracy to illegally traffic in paddlefish and paddlefish eggs in violation of the Lacey Act. Artour Magdessian, 48, of Lone Tree, Colo., pleaded guilty to trafficking in paddlefish and paddlefish eggs in violation of the Lacey Act.
By pleading guilty today, Lvovskiy and Elitchev admitted that in April 2011 they traveled to Warsaw, where they illegally purchased five female paddlefish and a container of paddlefish eggs. They processed the eggs from all of those paddlefish into caviar and transported them from Missouri to Colorado. Lvovskiy and Elitchev further admitted that they returned to Warsaw, in March 2012 and purchased eight more female paddlefish. As they had in 2011, they processed the eggs into caviar and transported them from Missouri to Colorado.
Lvovskiy, Elitchev, and Magdessian further admitted that they traveled to Warsaw in April 2012 with co-defendant Felix Baravik, 50, of Aurora, Colo. While in Warsaw, the men befriended covert Fish and Wildlife Service agents who were posing as fishermen staying in the same area. The defendants purchased two female paddlefish from the covert agents. The defendants also purchased three more female paddlefish from other sources and harvested paddlefish in excess of the Missouri take and possession limits. The defendants processed the eggs from all of those paddlefish into caviar and transported them from Missouri to Colorado.
The retail value of the paddlefish caviar at issue in this case is estimated to be between $30,000 and $50,000.
Baravik pleaded guilty on Aug. 19, 2014, to illegally trafficking in paddlefish in violation of the Lacey Act.
Under federal statutes, Lvovskiy, Elitchev and Magdessian are each subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
The Lacey Act
The Lacey Act is a federal statute which makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase fish that were taken, possessed, transported or sold in violation of any law or regulation of any state, or to attempt to do so. Such conduct constitutes a felony crime if the defendant knowingly engaged in conduct involving the purchase or sale, offer to purchase or sell, or intent to purchase or sell, fish with a market value in excess of $350, knowing that the fish were taken, possessed, transported or sold in violation of, or in a manner unlawful under, a law or regulation of any state.
Paddlefish Trafficking
The American paddlefish (Polydon spathula), also called the Mississippi paddlefish or the “spoonbill,” is a freshwater fish that is primarily found in the Mississippi River drainage system. Paddlefish eggs are marketed as caviar. Paddlefish were once common in waters throughout the Midwest. However, the global decline in other caviar sources, such as sturgeon, has led to an increased demand for paddlefish caviar. This increased demand has led to over-fishing of paddlefish, and consequent decline of the paddlefish population.
Missouri law prohibits the transportation of paddlefish eggs which have been removed or extracted from a paddlefish carcass. Missouri law also prohibits the sale or purchase, or offer of sale or purchase, of paddlefish eggs. There are also several restrictions on the purchase and possession of whole paddlefish in Missouri.
This case is being prosecuted by Senior Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section and Assistant U.S. Attorney Lawrence E. Miller of the U.S. Attorney’s Office for the Western District of Missouri. It was investigated by the U.S. Fish and Wildlife Service and the Missouri Department of Conservation, with assistance by the Oklahoma Department of Wildlife Conservation.
Statement of Deputy Attorney General Sally Quillian Yates on the President's Clemency DecisionsRead the Press Release
Deputy Attorney General Sally Quillian Yates released the following statement after the clemency announcement made today by President Obama:
“Last year, the President asked the Justice Department to develop criteria for identifying and recommending for executive clemency those non-violent, low-level offenders who received harsh sentences they would not receive if sentenced today. The President's decision to commute the sentences of 46 more individuals today is another sign of our commitment to correcting these inequities. We will continue to recommend to the President appropriate candidates for clemency, and we will continue to work with Congress on recalibrating our sentencing laws for non-violent drug offenders.”
Six Nigerian Nationals Extradited from South Africa to Mississippi to Face Fraud ChargesRead the Press Release
Six Nigerian nationals were extradited from South Africa to Gulfport, Mississippi, to face a nine-count federal indictment in the Southern District of Mississippi alleging various Internet fraud schemes. A total of 20 defendants are charged in this case.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Gregory K. Davis of the Southern District of Mississippi made the announcement.
Oladimeji Seun Ayelotan, 30; Rasaq Aderoju Raheem, 31; Olusegun Seyi Shonekan, 33; Taofeeq Olamilekan Oyelade, 30; Olufemi Obaro Omoraka, 26; and Anuoluwapo Segun Adegbemigun, 39, are charged along with 15 others in an Oct. 7, 2014, indictment with conspiracy to commit mail fraud, wire fraud, bank fraud, conspiracy to commit identity theft, use of unauthorized account access devices, theft of U.S. government funds and conspiracy to commit money laundering. The charges stem from the defendants alleged participation in numerous Internet-based complex financial fraud schemes, including romance scams, re-shipping scams, fraudulent check scams and work-at-home scams, as well as bank, financial and credit card account takeovers.
According to the allegations in the indictment, from as early as 2001, the defendants identified and solicited potential victims through online dating websites and work-at-home opportunities. In some instances, the defendants allegedly carried on fictitious online romantic relationships with victims for the purpose of using the victims to further certain objectives of the conspiracy. For example, the indictment alleges that the defendants convinced victims to ship and receive merchandise purchased with stolen personal identifying information (PII) and compromised credit card and banking information, to deposit counterfeit checks, and to transfer proceeds of the conspiracy via wire, U.S. mail or express delivery services.
To date, defendants Teslim Olarewaju Kiriji, 30; Olutoyin Ogunlade, 41; and Dennis Brian Ladden, 75, have been convicted of offenses relating to their roles in the schemes. Defendants Susan Anne Villeneuve, 49; and Genoveva Farfan, 45; Sesan Olumide Farin, 40; Femi Alexander Mewase, 44; Rhulane Fionah Hlungwane, 24; and Adekunle Adefila, 40, are awaiting trial. The United States is seeking extradition from Nigeria of defendants Kayode Bamidele, Ajayi Oluwaseyi Stephen and Emmanuel Adeniyi Osokomaiya. Defendants Gabriel Oludare Adeniran and Oduntan Sikiru Lawani remain fugitives.
The charges and allegations in the indictment are merely accusations. A defendant is presumed innocent until and unless proven guilty.
This case is being investigated by Homeland Security Investigations (HSI) and the U.S. Postal Inspection Service. Significant assistance was also provided by the Criminal Division’s Office of International Affairs, the HSI Cyber Crimes Center, HSI Attachés in Pretoria and Dakar, U.S. Marshals Service’s International Investigations Branch and the Southern District of Mississippi, the South African Police Service (SAPS) Directorate of Priority Crimes Investigation (DPCI) Electronic Crimes Unit, the SAPS Interpol Extradition Unit, the South African National Prosecution Authority, and the South African Department of Justice and Constitutional Development. The case is being prosecuted by Trial Attorney Robert Tully of the Criminal Division’s Organized Crime Gang Section and Assistant U.S. Attorneys Annette Williams and Scott Gilbert of the Southern District of Mississippi.
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If you believe that you may have been a victim of criminal fraud committed by any of the defendants, please go to http://www.justice.gov/usao-sdms/scams and complete the questionnaire using the password scams. Defendants allegedly used the following email addresses and names to perpetuate the scheme:
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
Richard Wasser Adeline Piper
Glenn Sattelberg Folly Edwards
Samuel Maxwell Stacy Adams
Regina Darwin Justin Worsham
Marlon Chase Karen Robinson
Dickson Jones Mark Miller
Kimberly Faye Mark Smith
Lorene M. Garrett John Gervino
Mark Gentile Sarah Powell
Kevin Smith Anita Lauren
Any information that you provide through the questionnaire may be helpful in the criminal investigation and prosecution of this case. A federal investigator may contact you with additional questions or to request documents you may have. Please note that submitting the questionnaire is not a substitute for consulting with your own attorney to determine what actions and remedies may be available to you through civil litigation. If you have any questions related to this matter that are not addressed at the above websites, you may contact federal law enforcement authorities at [email protected].
Ayelotan Second Superseding Indictment
Six Nigerian Nationals Extradited from Sout Africa to Mississippi to Face Fraud ChargesRead the Press Release
WASHINGTON – Six Nigerian nationals were extradited from South Africa to Gulfport, Mississippi, to face a nine-count federal indictment in the Southern District of Mississippi alleging various Internet fraud schemes. A total of 20 defendants are charged in this case.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Gregory K. Davis of the Southern District of Mississippi made the announcement.
Oladimeji Seun Ayelotan, 30; Rasaq Aderoju Raheem, 31; Olusegun Seyi Shonekan, 33; Taofeeq Olamilekan Oyelade, 30; Olufemi Obaro Omoraka, 26; and Anuoluwapo Segun Adegbemigun, 39, are charged along with 15 others in an Oct. 7, 2014, indictment with conspiracy to commit mail fraud, wire fraud, bank fraud, conspiracy to commit identity theft, use of unauthorized account access devices, theft of U.S. government funds and conspiracy to commit money laundering. The charges stem from the defendants alleged participation in numerous Internet-based complex financial fraud schemes, including romance scams, re-shipping scams, fraudulent check scams and work-at-home scams, as well as bank, financial and credit card account takeovers.
According to the allegations in the indictment, from as early as 2001, the defendants identified and solicited potential victims through online dating websites and work-at-home opportunities. In some instances, the defendants allegedly carried on fictitious online romantic relationships with victims for the purpose of using the victims to further certain objectives of the conspiracy. For example, the indictment alleges that the defendants convinced victims to ship and receive merchandise purchased with stolen personal identifying information (PII) and compromised credit card and banking information, to deposit counterfeit checks, and to transfer proceeds of the conspiracy via wire, U.S. mail or express delivery services.
To date, defendants Teslim Olarewaju Kiriji, 30; Olutoyin Ogunlade, 41; and Dennis Brian Ladden, 75, have been convicted of offenses relating to their roles in the schemes. Defendants Susan Anne Villeneuve, 49; and Genoveva Farfan, 45; Sesan Olumide Farin, 40; Femi Alexander Mewase, 44; Rhulane Fionah Hlungwane, 24; and Adekunle Adefila, 40, are awaiting trial. The United States is seeking extradition from Nigeria of defendants Kayode Bamidele, Ajayi Oluwaseyi Stephen and Emmanuel Adeniyi Osokomaiya. Defendants Gabriel Oludare Adeniran and Oduntan Sikiru Lawani remain fugitives.
The charges and allegations in the indictment are merely accusations. A defendant is presumed innocent until and unless proven guilty.
This case is being investigated by Homeland Security Investigations (HSI) and the U.S. Postal Inspection Service. Significant assistance was also provided by the Criminal Division’s Office of International Affairs, the HSI Cyber Crimes Center, HSI Attachés in Pretoria and Dakar, U.S. Marshals Service’s International Investigations Branch and the Southern District of Mississippi, the South African Police Service (SAPS) Directorate of Priority Crimes Investigation (DPCI) Electronic Crimes Unit, the SAPS Interpol Extradition Unit, the South African National Prosecution Authority, and the South African Department of Justice and Constitutional Development. The case is being prosecuted by Trial Attorney Robert Tully of the Criminal Division’s Organized Crime Gang Section and Assistant U.S. Attorneys Annette Williams and Scott Gilbert of the Southern District of Mississippi.
# # #
If you believe that you may have been a victim of criminal fraud committed by any of the defendants, please go to http://www.justice.gov/usao-sdms/scams and complete the questionnaire using the password scams. Defendants allegedly used the following email addresses and names to perpetuate the scheme:
Richard Wasser Adeline Piper
Glenn Sattelberg Folly Edwards
Samuel Maxwell Stacy Adams
Regina Darwin Justin Worsham
Marlon Chase Karen Robinson
Dickson Jones Mark Miller
Kimberly Faye Mark Smith
Lorene M. Garrett John Gervino
Mark Gentile Sarah Powell
Kevin Smith Anita Lauren
Any information that you provide through the questionnaire may be helpful in the criminal investigation and prosecution of this case. A federal investigator may contact you with additional questions or to request documents you may have. Please note that submitting the questionnaire is not a substitute for consulting with your own attorney to determine what actions and remedies may be available to you through civil litigation. If you have any questions related to this matter that are not addressed at the above websites, you may contact federal law enforcement authorities at [email protected].
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Seaport and Fort Point the Focus of U.S. Attorney Review of Disability AccessRead the Press Release
BOSTON – The U.S. Attorney’s Office announced today that it has launched a review of restaurants in Boston to determine whether they are being operated in compliance with the Americans with Disabilities Act of 1990 (ADA).
The U.S. Attorney’s Office has selected for review restaurants in Boston’s Seaport and Fort Point neighborhoods. With the ongoing construction and development in this area of the city, the review is intended to ensure that these neighborhoods are accessible to the increasing numbers of residents and tourists who will be visiting.
“This year marks the 25th anniversary of the Americans with Disabilities Act, and reminds us that all individuals with disabilities deserve to have full access to public places,” said United States Attorney Carmen M. Ortiz. “We look forward to partnering with restaurants to make sure that they are accessible to every resident and visitor to our City.”
Federal law prohibits discrimination on the basis of disability by the owners and operators of places of public accommodation, which includes restaurants. The ADA authorizes the U.S. Department of Justice to undertake periodic reviews of covered establishments. This initiative is being conducted in accordance with the Department of Justice’s statutory responsibility to review compliance with federal law and not in response to any specific complaint against any of the restaurants.
To facilitate its compliance review, the U.S. Attorney’s Office has been conducting site visits of the restaurants to assess accessibility and to evaluate compliance with federal ADA regulations. If the site visits reveal that a particular restaurant is not in compliance with the law, the U.S. Attorney’s Office intends to notify the owners and operators to secure voluntary compliance. The Department of Justice is also authorized to commence a civil lawsuit in federal court in any case that involves a pattern or practice of discrimination or raises issues of general public importance.
In 2010, to coordinate the efforts of the U.S. Attorney’s Office in enforcing federal civil rights laws, U.S. Attorney Carmen Ortiz formed the Civil Rights Enforcement Team (CRET), which is composed of Assistant U.S. Attorneys and professional staff from the criminal and civil divisions of the office. The primary goals of the CRET are to uphold the constitutional rights of all residents, particularly the most vulnerable members of society and to enforce federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status, and national origin.
Additional information about the ADA is available at www.ADA.gov or through contacting the U.S. Attorney’s Office at (617) 748-3100.
Ridgefield Physician Sentenced to Prison for Health Care Fraud, Pays $270K in False Claims Act SettlementRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID LESTER JOHNSTON, 46, of Ridgefield, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to three months of imprisonment, followed by three years of supervised release, the first six months of which must be served in home confinement, for committing health care fraud. JOHNSTON also was ordered to perform 150 hours of community service.
JOHNSTON is an osteopathic physician who operates Osteopathic Wellness Center, LLC, in Ridgefield. On January 16, 2015, JOHNSTON pleaded guilty to one count of health care fraud and admitted that he engaged in a scheme to defraud several private health insurance companies by submitting claims for evaluation and management services (physician office visits) that he did not perform, and by misrepresenting the nature of the services that were performed.
According to court documents and statements made in court, JOHNSTON submitted claims for physician office visits that were not performed at all. Instead, the patients only received massages and related services from a massage therapist. In addition, JOHNSTON falsely described the services rendered and falsely stated that he himself had rendered the services. The investigation revealed that on several occasions, JOHNSTON was out of the country when the massage therapist was seeing JOHNSTON’s patients.
JOHNSTON was ordered to pay restitution in the amount of $172,950.
In addition, as part of the resolution of this case, JOHNSTON entered into a civil settlement with the government and has agreed to pay $270,528 to settle federal civil claims that JOHNSTON submitted false claims to the Medicare program for office visits, osteopathic manipulative treatment and physical therapy services that were not performed. Instead, the Medicare patients treated by the massage therapist in JOHNSTON’s practice only received massages and related services. Medicare does not recognize massage therapists as providers and they are not eligible to participate in the Medicare program. JOHNSTON nevertheless billed the Medicare program as if he had provided the services in question.
Pursuant to the civil settlement, Johnston has been excluded from participation in all federal health care programs for a period of five years.
This matter was investigated by the Office of the Inspector General of the U.S. Department of Health and Human Services and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Christopher Mattei, Heather Cherry and Richard Molot.