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2 September 2015
Allegheny County Man Sentenced for Possessing Child PornographyRead the Press Release
PITTSBURGH - A resident of Crescent, Pennsylvania, has been sentenced in federal court to imprisonment for a term of 12 months and one day followed by 12 years of Supervised Release on his conviction of possession of material depicting the sexual exploitation of a minor and further must register as a convicted sex offender, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Mark A. Chasey, 50, Crescent, Pa.
According to information presented to the court, Chasey knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
Assistant United States Attorney Shaun E. Sweeney prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Homeland Security Investigations for the investigation leading to the successful prosecution of Chasey.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Alabama Real Estate Investor Admits to Bid Rigging and Mail Fraud Conspiracies Involving Foreclosed HomesRead the Press Release
A southern Alabama business man has pleaded guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama.
Michael P. Barbour admitted to conspiring to fraudulently acquire title to foreclosed properties at artificially low prices by agreeing with others not to bid against each other at public foreclosure auctions in southern Alabama.
“Including this defendant, 11 individuals have been convicted for conspiring to corrupt the public foreclosure auction process in Alabama,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Together with our partners at the FBI, we will continue to obtain justice for the homeowners and banks victimized by these crimes.”
“When individuals knowingly defraud homeowners and financial institutions, the FBI is committed to holding them accountable in accordance with the law,” said Special Agent in Charge Robert F. Lasky of the FBI’s Mobile Division. “We will continue working with our law enforcement partners to identify and stop those who line their own pockets at the expense of others."
According to documents filed with the court, from 2003 until 2010, Barbour conspired with other potential bidders for foreclosed properties to designate one person to bid at certain public foreclosure auctions. Once the designated bidder won the property at the public auction, the conspirators held a secret, second auction open only to members of the conspiracy where they paid each other off. As a result of these crimes, homeowners and banks received less than competitive prices for the properties.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum fine. A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
The investigation into fraud and bid rigging in the Alabama real estate foreclosure industry is being conducted by the Washington Criminal II Section of the Antitrust Division and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office of the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
Acoma Pueblo Man Sentenced to Federal Prison for Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Michael Paul Cerno, 38, a member and resident of Acoma Pueblo, N.M., was sentenced this morning in federal court in Santa Fe, N.M., to 65 months in prison followed by five years of supervised release for his child sexual abuse conviction. Cerno will be required to register as a sex offender after completing his prison sentence.
Cerno was arrested on Aug. 22, 2014, on a criminal complaint charging him with sexually abusing a 14-year-old Acoma Pueblo girl in July 2011. According to the complaint, Cerno got the victim intoxicated before violating her. Federal law enforcement authorities initiated the investigation leading to Cerno’s arrest in March 2014.
Cerno was indicted in June 2014, charged with sexually abusing the victim in July 2011 in Acoma Pueblo in Cibola County, N.M. He pled guilty to the indictment on Nov. 19, 2014, and admitted sexually assaulting the victim in July 2011 at a time when the victim was physically incapable of declining to engage in a sexual act because she was intoxicated.
This case was investigated by the Albuquerque office of the FBI, the Laguna/Acoma Agency of the BIA’s Office of Justice Services, and the Acoma Pueblo Tribal Police Department.
The case was prosecuted by Assistant U.S. Attorney David Adams as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
1 September 2015
Woman, Man Charged in Bank RobberiesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a homeless woman and the man who served as her getaway driver have been charged in federal court with robbing two Kansas City metro area banks and a Webb City, Mo., bank this summer.
Sheryl A. Stewart, 31, and Richard Zane Holliday, neither of whom have a known address, have been charged in separate criminal complaints. Holliday was charged today in a three-count criminal complaint filed in the U.S. District Court in Kansas City, Mo. Stewart was charged in a two-count criminal complaint on Aug. 26, 2015. Stewart and Holliday remain in federal custody pending their detention hearings.
The criminal complaints allege that Stewart and Holliday stole $2,212 from Equity Bank, 6209 N.W. 63rd Terr., Kansas City, Mo., on June 24, 2015. According to affidavits submitted in support of the federal criminal complaints, Stewart allegedly walked up to a teller and handed her a handwritten note that read, “This is the robbery. Give me all the money. I am armed.” The teller gave her money from her drawer, the affidavit says, and Stewart left the bank.
The criminal complaints also allege that Stewart and Holliday stole $1,190 from Blue Ridge Bank and Trust, 621 N.W. Duncan Rd., Blue Springs, Mo., on July 8, 2015. According to affidavits, Stewart held up a piece of paper so a teller could read a note that said, in part, “keep smiling,” instructed the teller not to pull any alarms, and mentioned that Stewart was armed. The teller handed Stewart cash from her drawer, the affidavits say, and Stewart left the bank.
Holliday is also charged with stealing $5,090 from Pinnacle Bank, 1010 S. Madison in Webb City, Mo., on July 14, 2015. According to the affidavit, a woman used a note to rob the bank. When the bank teller handed her the money, the robber walked quickly out the front door of the bank and got into a silver/gray-colored four-door Cadillac sedan (no license plate) with tinted windows parked north of the bank and backed up to the front sidewalk curb. The Cadillac, allegedly driven by Holliday, pulled away and went northbound out of sight.
Based upon witness account and surveillance photos, the affidavits say, Holliday’s silver 2007 Cadillac was believed to have been involved in all three bank robberies.
Multiple crime stopper tips were received by law enforcement, which identified Stewart as the bank robber.
On Aug. 30, 2015, Stewart and Holliday were arrested in Cass County, Mo., after a tip was called in to the Cass County Sheriff’s Department regarding a sighting of Stewart and Holliday. Stewart and Holliday had entered a residence of an associate where deputies were alerted to their location. Holliday resisted arrest on outstanding warrants out of Oklahoma, and struck one of the deputies in the face. As a result of that injury, the deputy received multiple stitches. Holliday was confronted by another deputy and taken into custody.
Dickinson cautioned that the charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Christina Y. Tabor. It was investigated by the Kansas City, Mo., Police Department and the FBI.
Vallejo Man Pleads Guilty to Possessing Credit Card Making Equipment and Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Gurpinder Sandhu, 47, of Vallejo, pleaded guilty today to possession of credit card making equipment and aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to court documents, between July 2013 and September 2014 Sandhu and Simone Aguilar, 42, of Vallejo, used stolen identification information to manufacture credit cards and IDs. They used the stolen IDs and credit cards to obtain goods and credit from car dealerships and retail stores. Sandhu fraudulently obtained a 2014 Nissan Rogue, a 2014 Dodge Challenger a 2014 Harley Davidson motorcycle, a 2013 Yamaha motorcycle, a 2010 Chevrolet Corvette, a 2013 Dodge Challenger and a 2013 Dodge Charger.
According to the plea agreement, , law enforcement agents found many counterfeit items in Sandhu’s residence, including credit cards and California driver’s licenses. Agents also found equipment used to manufacture these counterfeit items such as an embossing machine, cameras, printers, scanners, material and chemicals used to produce identification cards, state seals, and a blue backdrop on the wall to imitate a California Department of Motor Vehicles ID photo background. Agents also found documents containing the names of real people, such as rental agreements, Comcast bills and sales receipts. Based on the fraudulent documents found in the residence, at least 50 victims have been identified.
“Identity theft poses a significant vulnerability and often wreaks havoc on the lives of innocent victims,” said Tatum King, acting special agent in charge for HSI San Francisco. “Today’s guilty plea sends a clear message that HSI and our law enforcement partners will work tirelessly to identify those responsible for such schemes and hold them accountable for the harm they cause.”
This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Highway Patrol. Special Assistant United States Attorney Josh F. Sigal is prosecuting the case.
Sandhu is in federal custody. He is scheduled to be sentenced by U.S. District Judge John A. Mendez on December 8, 2015. Sandhu faces a maximum statutory penalty of 15 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Aguilar is charged with conspiracy, possession of counterfeit credit cards, possession of credit card making equipment, passing fraudulent checks, and aggravated identity theft. She remains in custody with a status conference set for October 27, 2015. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
United States Settles Mineral Trespass Claims Against SWN Production (Arkansas), LLC F/K/A Seeco, Inc.Read the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas announced today that SWN Production (Arkansas), LLC f/k/a SEECO, Inc., of Texas (collectively "SEECO") has agreed to pay the United States $950,000 to resolve civil claims against SEECO related to mineral trespass. According to the executed agreement, SEECO must remit full payment within 45 days.
The Southeastern States Field Office of the Bureau of Land Management (BLM) routinely reviews data regarding existing natural gas wells to assess whether the wells are impacting federally owned minerals. In July 2009, BLM developed information indicating a natural gas well operated by SEECO drilled into unleased federally owned minerals located in Conway and Van Buren Counties, Arkansas.
A joint investigation by the United States Department of the Interior Office of the Inspector General and the BLM Special Investigations Group confirmed that SEECO spud (began drilling) the Salinas, Reyes 09-15 #2-20H ("Salinas") well on January 4, 2008, in Conway County, and began production on April 8, 2008. Accordingly, from January 4, 2008, to December 3, 2009, the United States contends that SEECO trespassed into federal minerals for the purpose of obtaining minerals for private gain from the Salinas well. Furthermore, SEECO spud the Griggs 11-15 1-26H ("Griggs") well on November 3, 2009, in Van Buren County, and production began on the Griggs well February 6, 2010. The United States contends that from November 3, 2009, to April 21, 2010, SEECO trespassed into federal minerals for the purpose of obtaining minerals for private gain from the Griggs well.
SEECO produced and sold federally owned natural gas from the wells valued at $950,000. SECCO has fully cooperated with the United States in its civil investigation of this incident.
"This office is committed to protecting and preserving the sanctity of the United States’ natural resources and deterring future violations," Thyer said.
"This civil settlement should remind the oil and gas industry that the Department of the Interior is monitoring federally owned mineral interests, and that the Department of Justice will hold companies responsible if they trespass," Matthew Elliott, Assistant Inspector General for Investigations, Office of Inspector General, U.S. Department of the Interior, said. "I would also like to thank BLM’s Special Investigations Group for referring this matter to us and assisting in our investigation, and Assistant United States Attorney Shannon Smith for her dedicated work to bring this matter to fruition."
The investigation was led by Special Agent, Richard Larrabee, United States Department of the Interior Office of Inspector General, Energy Investigations Unit. Assistant United States Attorney Shannon S. Smith handled the matter for the United States.
Two Minnesota-Based Tax Return Preparers Convicted of Conspiracy, Preparing False Returns and Aggravated Identity TheftRead the Press Release
After a five-day trial in Minneapolis, a federal jury convicted two Brooklyn Center-based tax return preparers of conspiracy to defraud the United States, tax crimes and aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
The jury convicted Ishmael Kosh, a resident of Philadelphia, of one count of conspiracy to defraud the United States and eight counts of aiding and assisting in the preparation of false federal income tax returns. The jury convicted Amadou Sangaray, a resident of New York City, of one count of conspiracy to defraud the United States, four counts of aggravated identity theft and eight counts of aiding and assisting in the preparation of false federal income tax returns.
The defendants were charged in a second superseding indictment with alleged co-conspirators Chatonda Khofi, David Mwangi and Francis Saygbay for their involvement in Primetime Tax Services Inc., (Primetime) a tax preparation business with three locations in the Minneapolis area. All five defendants were charged in a conspiracy to defraud the United States by preparing fraudulent individual federal income tax returns for customers of Primetime for tax years 2006, 2007 and 2008. According to court documents, during these years, the defendants and others filed more than 2,000 federal tax returns through Primetime.
“Today’s verdicts send a clear message that individuals who hold themselves out as tax return preparers, and then prepare and file false returns to steal from the U.S. Treasury, will be prosecuted and will face substantial incarceration and monetary penalties,” stated Acting Assistant Attorney General Ciraolo. “The department, working with the Internal Revenue Service and its other law enforcement partners, is committed to holding these fraudulent return preparers, and those who participate in their illegal enterprises, accountable for their criminal conduct.”
Evidence introduced at trial established that in late 2006, defendants Kosh, Sangaray and Khofi set up a Primetime storefront in Brooklyn Center, where they prepared false tax returns that reported false dependents using stolen identities, fake business income and losses, inflated deductions, and inflated credits and false filing status, all to inflate customers’ tax refunds. The defendants directed the Internal Revenue Service (IRS) to send their customers’ refunds to Primetime and then withdrew the return preparation fees from the refund. When a customer came to the office to retrieve their refund check or debit card, the defendants sometimes escorted that customer to a check-cashing location or an ATM and demanded an additional cash fee.
After the guilty verdicts, the court determined that Sangaray was a flight risk and he was detained pending sentencing. The defendants’ sentencings are scheduled for Jan. 5, 2016. At sentencing, the defendants face a statutory maximum sentence of five years in prison for conspiracy, a statutory maximum sentence three years in prison for each count of aiding and assisting in the preparation of false tax returns, and a mandatory minimum sentence of two years in prison for aiding aggravated identity theft. They also face substantial financial penalties and restitution.
“The Internal Revenue Service works very hard to stop these fraudulent refund and identity theft schemes,” said Special Agent in Charge Shea Jones of IRS-Criminal Investigation. “The fraudulent actions of these tax return preparers have caused undue harm to their clients and to the American taxpayers.”
In November 2014, Mwangi pleaded guilty to conspiracy to defraud the United States and Khofi pleaded guilty to conspiracy and aggravated identity theft. In 2013, Stephanie Robinson, a defendant in a related case who worked at Primetime, pleaded guilty to filing her own false return and aiding and assisting the preparation of a false return. Saygbay is set for trial on Nov. 2.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Dennis R. Kihm, Thomas W. Flynn and Ryan R. Raybould and Paralegal Saundra Burgess of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office of the District of Minnesota for their substantial assistance.
Two from Sumter Indicted for Tax FraudRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles announced today an indictment charging Crystal A. Blakely, 26, and Hercules E. Baker, 27, both of Sumter, South Carolina, with their roles in a scheme to defraud the United States by claiming false and fraudulent federal tax refunds.
The indictment alleges that both defendants conspired to defraud the United States Department of Treasury between January 2012 and April 2014 by submitting federal income tax returns to the Internal Revenue Service that claimed false tax refunds, in violation of Title 18, United States Code, Section 286. Blakely is also charged with three counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. The maximum penalty each could receive is ten years’ imprisonment for the conspiracy count, twenty years’ imprisonment for the wire fraud counts, and two years’ consecutive imprisonment for the aggravated identity theft counts.
The indictment is the result of an investigation conducted by the Internal Revenue Service. Assistant United States Attorney Ben Garner of the Columbia office is prosecuting the case.
Mr. Nettles states that the charges in this Indictment are merely accusations and the defendants are presumed innocent until and unless proven guilty.
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Truck Driver Admits Ripping Off Social Security Disability ProgramRead the Press Release
PITTSBURGH – An Armstrong County truck driver pleaded guilty in federal court to a charge of theft of government property, United States Attorney David J. Hickton announced today.
Billy Joe Toy, 44, of Worthington, Pennsylvania, pleaded guilty to one count before United States District Judge Terrence F. McVerry.
In connection with the guilty plea, the court was advised that Toy received Social Security disability insurance benefit payments based on his alleged inability to engage in any substantial gainful activity, and thereby caused $55,012 in disability payments to be paid on behalf of his minor child. At the same time, he was employed as a truck driver, and had his wages paid to his wife’s business in order to conceal their payment.
Judge McVerry scheduled sentencing for Dec. 11, 2015 at 10 a.m. The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued defendant’s release on bond.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Social Security Administration, Office of Inspector General, conducted the investigation that led to the prosecution of Billy Joe Toy.
Three Inmates among Four Charged in Fraud SchemeRead the Press Release
JOHNSTOWN, Pa. – Three federal prison inmates and a resident of Toledo, Ohio, have been indicted by a federal grand jury in Johnstown on charges of credit/debit card fraud and identity theft, United States Attorney David J. Hickton announced today.
The two-count indictment named Jermain R. Stevenson, 25, Antuane Hamilton, 42, and Herbie A. Matthews, 42, all inmates at various federal correctional institutions, and Selina Mack, 21, of Toledo, Ohio.
According to the indictment, from Dec. 23, 2013, to March 30, 2014, Stevenson, Hamilton, Matthews and Mack used debit and credit card information to obtain more than $1,000, knowing that the debit cards and credit cards belong to other persons.
The law provides for a maximum total sentence for each defendant of 12 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Statement by U.S. Attorney’s Office Regarding Fatal Shooting of Artesia Man During Federal Arrest OperationRead the Press Release
ALBUQUERQUE – An Artesia, N.M., man was shot and killed early this morning during a federal arrest operation. The man, Michael Todd Evans, 47, was fatally shot after he opened fire on officers who went to his residence to execute a warrant authorizing his arrest. An ATF Special Agent sustained a non-lethal injury when he was shot by Evans. In accordance with normal procedures, the circumstances surrounding the shooting are being reviewed. No further information will be made available at this time.
Shreveport man sentenced to more than 7 years in prison for possessing an assault rifle after felony convictionsRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Shreveport man was sentenced Monday to 86 months in prison for possessing an assault rifle and ammunition after being convicted of multiple felonies.
Cori Yarborough, 41, of Shreveport, was sentenced by U.S. District Judge Elizabeth E. Foote on one count of possession of a firearm by a convicted felon. He was also sentenced to three years of supervised release. According to the September 25, 2014 guilty plea, Shreveport Police responded to a complaint on May 3, 2014 that someone was driving in a van with an assault rifle. Police stopped Yarborough’s vehicle and found a Colt rifle, model M4, .223 caliber, and ammunition. After examining the rifle, police found that it had been reported stolen. Yarborough has multiple felonies including simple robbery in 1992, aggravated battery in 1997, and attempted burglary of an inhabited dwelling in 2012.
This case is part of Project Safe Neighborhoods, which is a Department of Justice initiative designed to reduce firearm crimes by removing dangerous and persistent felons from the community and promote firearm safety.
The ATF and Shreveport Police Department conducted the investigation. Assistant U.S. Attorney James G. Cowles Jr. prosecuted the case.
San Juan Municipal Police Officer Under Federal CustodyRead the Press Release
SAN JUAN, P.R. – United States Magistrate Judge Bruce J. McGiverin authorized a criminal complaint charging San Juan Municipal police officer Luz Zoraida Rojas-Delgado with one count of human smuggling, announced United States Attorney Rosa Emilia Rodríguez-Vélez. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) is in charge of the investigation.
According to the information contained in the affidavit submitted in support of the criminal complaint, on August 24, 2015, Rojas-Delgado established communication with a Source of Information requesting assistance to smuggle a friend from Antigua to Puerto Rico. Rojas-Delgado had previously engaged in communications with other people in an attempt to make a deal for the venture but did not agree with the price of $3,000 established by the alleged smuggler.
The investigation conducted by the ICE-HSI revealed that on August 25, 2015, Rojas-Delgado agreed with an undercover agent, who she believed was a smuggler, to bring her Dominican friend from Antigua for $2,800. On August 28, 2015, the defendant met with the undercover agent and after paying $1,800 for the smuggling, she was arrested.
The investigation also revealed that Rojas-Delgado stated that she was working on building a case against transporters to later turn it over to pertinent agencies. HSI special agents were able to confirm with the San Juan Municipal Police that Rojas-Delgado was not working on any authorized operation at the time of her arrest.
The case is being prosecuted by Assistant United States Attorney Seth Erbe. If convicted defendant faces a maximum penalty of ten years in prison. A criminal complaint contains only charges and is not evidence of guilt. A defendant is presumed to be innocent unless and until proven guilty.
Rochester Man Sentenced for Enticing, Threatening MinorRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Johnnie Jones, 32, of Rochester, NY, who was convicted of online enticement of a minor, was sentenced to 151 months in prison, to be followed by lifetime supervised release by U.S. District Court Judge Charles J. Siragusa. The defendant was also ordered to forfeit all the digital media used in the commission of the crime.Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that Jones is a Level III Sex Offender as a result of a 2005 Rape conviction in State Court. In 2014, the defendant met and communicated with a minor by mobile telephone and digital tablet using several texting applications. The defendant repeatedly sent the child sexually explicit messages over a period of several weeks and attempted to entice the child into having sex with him. Jones eventually met the child in person and did have sex with her on multiple occasions inside his home. The defendant was convicted of Rape, 3rd Degree, in Monroe County Court for having sex with the child and is awaiting sentencing in that matter in State Court.
When the child tried to stop having contact with Jones, he threatened to kill her, her mother sister. The defendant also said he would “shoot up” the victims’ school.
Until his arrest, Jones lived directly across the street from the George Mather Forbes Elementary School, despite being a registered sex offender.
The case was initially investigated by Officers and Investigators from the Rochester Police Department who in turn, contacted the FBI Child Exploitation Task Force for assistance.
The sentencing is the culmination of an investigation on the part of Officers of the Rochester Police Department, under the direction of Chief Michael Ciminelli and Special Agents of the Federal Bureau of Investigation, Child Exploitation Task Force which also includes the Monroe County Sheriff’s Office and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
Reinbeck Man Charged with Receipt and Possession of Child PornographyRead the Press Release
Michael Cottrell, age 43, of Reinbeck, Iowa, has been charged with one count of receipt of child pornography and one count of possession of child pornography. The charges are contained in an Indictment unsealed on August 27, 2015, in United States District Court in Cedar Rapids.
The Indictment alleges that, between 2012 and 2014, Cottrell received and possessed child pornography.
If convicted, Cottrell faces a mandatory minimum sentence of five years’ imprisonment and a possible maximum sentence of forty years’ imprisonment, a $500,000 fine, a $200 special assessment, and at least five years and up to life on supervised release following any imprisonment.
Cottrell appeared for a detention hearing on August 31, 2015, in federal court in Cedar Rapids and was released on bond. Cottrell’s next appearance for trial is set for October 26, 2015.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, the Grundy County Sheriff’s Office, and the Cedar Rapids Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 15-82.
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Racketeering indictment returned against former WV Division of Highways officialRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal grand jury returned a racketeering indictment today against the former director of the West Virginia Division of Highway’s Equipment Division, United States Attorney William J. Ihlenfeld, II, announced.
Robert Glen Andrew, II, of Bridgeport, West Virginia, has been charged in a 29-count indictment which alleges violations of the Racketeer Influenced and Corrupt Organizations Act. Andrew is alleged to have used his position to create a culture of corruption within the Division of Highways, and to have used the Division of Highways as a vehicle to engage in racketeering activity.Andrew allegedly abused his position of trust in order to use state resources, including employees and equipment, to engage in political activity on state time. He is also alleged to have engaged in bid-rigging by creating non-competitive bid specifications that favored particular vendors and that did not seek to obtain the best value for the State of West Virginia. Andrew is also alleged to have violated, and to have directed others to violate, the statutes and regulations which govern the use and disposition of federal excess property. Andrew is also accused of having tampered with a witness and with documents.
Ohio corporation Mo-Trim, Inc., a business engaged in the building of large commercial mowers, was named in the indictment along with Andrew. Mo-Trim is a vendor which held a mower parts contract with the Division of Highways and which is alleged to have been involved in the preparation of non-competitive bid specifications which did not seek to obtain the best value for the State of West Virginia but instead specifically benefitted Mo-Trim.
Both Andrew and Mo-Trim, Inc. are charged with seven counts of “Wire Fraud,” and one count of “Racketeer Influenced and Corrupt Organizations Act Conspiracy.” Andrew, age 77, is further charged with eight counts of “Mail Fraud,” seven counts of “Causing Theft of Government Property,” four counts of “Wire Fraud,” one count of “Document Tampering,” and one count of “Witness Tampering."
Assistant U.S. Attorneys Jarod Douglas and Sarah Montoro, along with Special Assistant U.S. Attorney John Parr, are prosecuting the case on behalf of the government. The West Virginia State Police, the West Virginia Commission on Special Investigations, the General Services Administration Office of Inspector General, the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigation conducted the inquiry.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.Priest Pleads Guilty to Stealing Money from His Former ParishRead the Press Release
Edward Belczak, 70, the former priest of St. Thomas More Church in Troy, Michigan, pleaded guilty today to mail fraud, U.S. Attorney Barbara L. McQuade announced. McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Division. Belczak pleaded guilty to devising and executing a scheme to steal $572,775.82 from St. Thomas More Church over several years, and then creating yearly false financial reports that were mailed to the Archdiocese of Detroit that concealed his theft of the money for his own benefit. Belczak admitted that in March 2005, he used $109,570.80 from St. Thomas More’s bank account to pay the down payment on a Florida condominium. According to court records, in April and May 2006, Belczak diverted two checks totaling $420,200 payable to St. Thomas More from the estate of a deceased parishioner. To conceal his illegal conduct, Belczak opened a business bank account in the name of “St. Thomas More c/o Edward Belczak” and deposited both checks into that account. From May 2008 through May 2012, a St. Thomas More parishioner donated money each year to the church, totaling $43,000, for the needs of the church. Each year, Belczak deposited the check made payable to St. Thomas More into the business bank account in the name of “St. Thomas More c/o Edward Belczak.” Belczak entered into a plea agreement that calls for a sentence of between 33 and 41 months in custody. Belczak has agreed to pay restitution to St. Thomas More Church in the amount of $572,775.82. A sentencing hearing was set for December 1, 2015. “Fraud cases typically involve people using lies to steal money, but in a case involving a member of the clergy, the fraud also includes a serious betrayal of trust,” McQuade said. “In this case, Father Belczak abused the sacred trust his parishioners placed in him so that he could enrich himself.” This case was investigated by special agents of the Federal Bureau of Investigation and the Troy Police Department and prosecuted by Assistant U.S. Attorneys Frances Lee Carlson and Adriana Dydell.Ovid Man Arrested on Child Pornography ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Christopher Everhardt, 31, of Ovid, NY, was arrested and charged by criminal complaint with receiving and possessing child pornography. The charges carry a minimum penalty of five years in prison and a maximum penalty of 20 years.Assistant U.S. Attorney John J. Field, who is handling the case, stated that according to the complaint, over a period of at least two years, Everhardt downloaded and offered to trade multiple files containing photographs and videos of child pornography, some involving children as young as five years old.
The defendant made an initial appearance today before U.S. Magistrate Judge Marian W. Payson and is being held. Everhardt is due back in court on September 3, 2015, at 9:00 a.m.
The criminal complaint is the result of/culmination of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Orange County Attorney Charged with Fraud and Money Laundering in Scheme Related to Real Estate Purchases and Other InvestmentsRead the Press Release
LOS ANGELES – An attorney who allegedly took several million dollars in investment capital from clients and used the funds for personal expenses and luxury items was indicted today by a federal grand jury.
Stephen Young Kang, 46, of Newport Beach, was named in a 25-count indictment filed in United States District Court in Los Angeles. The indictment charges Kang with 20 counts of wire fraud and five counts of money laundering.
The indictment comes after Kang was arrested by special agents with the FBI and IRS – Criminal Investigation on August 10 at Los Angeles International Airport as he attempted to board a flight to Seoul, Korea. Kang is currently free on a $750,000 secured bond.
According to the indictment, Kang defrauded a Gardena-based food distribution company, Ottogi America, Inc., whose representatives hired the attorney to help the company purchase additional properties near its distribution center. Between October 2012 and March 2014, Ottogi wire transferred approximately $3.7 million to a trust account in Houston, Texas, to be used for the purchase of the properties. But Kang allegedly did not use the money to invest in properties. Rather, Kang allegedly caused the vast majority of the funds to be transferred to other accounts that he controlled, and then used a substantial portion of Ottogi’s money to pay for personal expenses and business ventures, as well as to make partial payment to other victims.
Kang is also alleged to have defrauded other victims. According to the indictment, Kang agreed to provide legal and investment services to a married couple who wanted to invest money that would help them obtain EB-5 visas, which requires the applicant to invest at least $500,000 in a commercial enterprise that creates or preserves at least 10 permanent, full-time jobs. The indictment alleges that these victims wired more than $1 million to Kang in 2011, but Kang failed to invest the money as promised. Instead, Kang used the funds for personal and business expenses, as well as to pay other individuals who previously invested money with him. When the victims demanded the return of their investment, Kang allegedly concealed the fraud by using money he received from other clients, including Ottogi, to repay a portion of their investment.
Kang is scheduled to be arraigned on the indictment on September 8.
If convicted of the charges in the indictment, Kang faces a statutory maximum penalty of 20 years in federal prison for each of the wire fraud charges and up to 10 years in prison for each of the money laundering offenses.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Based on the evidence in this case, investigators believe Kang may have victimized others in locations where he practiced law or resided, including California, Texas, and Seoul, Korea. Anyone who believes they may have been victimized by Kang should contact the FBI’s Los Angeles Field Office at (310) 477-6565.
The case against Kang is the product of an ongoing investigation by the Federal Bureau of Investigation and IRS – Criminal Investigation.
North Texas Man Sentenced in Fictional Disney SchemeRead the Press Release
SHERMAN, Texas – A 35-year-old Plano, Texas man has been sentenced to federal prison for defrauding investors in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Thomas W. Lucas, Jr., was convicted on Feb. 13, 2015, of seven counts of wire fraud and one count of making a false statement to the FBI and was sentenced to 210 months in federal prison today by U.S. District Judge Amos Mazzant.
According to information presented in court, from 2006 to 2010, Lucas devised and executed an elaborate scheme to defraud approximately 280 investors out of approximately $20 million by telling them he had insider information regarding a Walt Disney resort and theme parks planned for the North Texas area. Lucas’s scheme to defraud solicited two types of investors – those that invested in options to purchase land supposedly near the Walt Disney property and those that actually purchased land supposedly near the Walt Disney property. While information presented in Court showed tens of millions of dollars more were raised based on Lucas’s fraudulent Disney information, the value of the land purchased was subtracted to determine the overall loss amount of approximately $20 million. The 65 investors that invested in options to purchase land lost all of their money invested, which was slightly over $8 million, and received no interest in land.
According to Lucas, the Disney Resort and Theme Park was originally set to be called, “The King Ranch Project,” but that changed in 2007 to “Frontier Disney DFW,” both of which were completely fabricated. Disney witnesses, including Disney’s then Chairman of Parks and Resorts and executive assistants, testified at the trial that the information presented to investors by Lucas was not authentic and that Disney never had any intentions of opening a Disney resort and theme park in north Texas at any time. Lucas pocketed approximately $450,000 from fees and commissions gleaned from the various land deals closed on his fraudulent Disney information. When confronted by the FBI about the scheme, Lucas falsely blamed the Disney information on a man he had previously met at a methadone rehabilitation clinic, who is now deceased. Lucas was indicted by a federal grand jury on Sep. 11, 2013.
Lucas was also ordered to pay restitution in the amount of $8,456,360.00 to the investors who invested in options to purchase land, and was immediately remanded to the custody of the U.S. Marshals Service.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Christopher Eason and J. Andrew Williams.
New Hampshire Man Pleads Guilty to Firearms ChargesRead the Press Release
CONCORD, N.H. – Gordon Potter, 35, formerly of Hampstead, New Hampshire, pleaded guilty in United States District Court for the District of New Hampshire to being a felon and unlawful user of a controlled substance in possession of firearms and ammunition, announced Acting United States Attorney Donald Feith.
On February 26, 2015, Salem Police Detective Robert Genest conducted a traffic stop on a 2008 grey Nissan Sentra. While standing at the driver’s side door of the vehicle, Detective Genest observed a large hunting knife tucked into the side of the seat next to Potter’s left leg. Detective Genest subsequently determined that Potter was a convicted felon who was prohibited from possessing the knife. Detective Genest asked Potter to exit the vehicle and he noticed Potter trying to conceal a hypodermic needle in the palm of his left hand.
Detective Genest conducted a search of the defendant, incident to his arrest, and found a small bottle containing a baggy of a brown, powdery substance and five white pills in the defendant’s front pocket. A subsequent lab analysis determined the brown, powdery substance contained the controlled substances heroin, fentanyl and methamphetamine. The pills tested positive for 1 mg of lorazepam.
A search warrant was executed on the vehicle and the detectives found a 12 gauge Mossberg shotgun; a modified Kel-Tec pistol with silencer; ammunition for the two firearms; a red backpack containing male clothing, a fully loaded magazine to a Springfield .45 caliber pistol and several .45 caliber rounds at the bottom of the backpack; four cell phones, and three laptop computers. The firearms were later determined to be stolen.
On December 20, 2004, Potter was convicted of Burglary in Belknap County Superior Court Docket Number 04-S-324, a crime punishable by more than one (1) year imprisonment. Potter was also convicted of Forgery on June 20, 2006 in Belknap County Superior Court Docket Number 01-S-462, a crime punishable by more than one (1) year imprisonment.
Potter faces a maximum sentence of ten years imprisonment. Potter is scheduled to be sentenced on December 10, 2015. Potter was detained pending sentencing.
The case was investigated by the Salem Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives and is being prosecuted by Assistant U.S. Attorney Debra M. Walsh.
Multi-Defendant Indictment Returned for Conspiracy to Distribute MethamphetamineRead the Press Release
KNOXVILLE, Tenn.-- A federal grand jury in Knoxville returned a 32-count indictment on July 21, 2015, against 36 individuals involved in a conspiracy to distribute methamphetamine, a conspiracy to launder money, and numerous firearms offenses. Those indicted include: Martin Kenneth Wheeler, Jr., 50, of Tucker, Ga.; Abigail B. Thompson, 46, of Whitesburg, Tenn.; Stephen L. Maness, 46, of Maryville, Tenn.; Scottie R. Gray-Stephens, 40, of Knoxville, Tenn.; Glenn M. Tegeler, 48, of Lawrenceville, Ga.; Richard J. Corbett, III, 27, of Strawberry Plains, Tenn.; Thomas O’Neil Moore, 25, of Molena, Ga.; Tracey D. Dugger, 30, of Morristown, Tenn.; Alexander E. Penley, 36, of Greeneville, Tenn.; Juan C. Solis, 38, of Rutledge, Tenn.; Joshua K. Guthry, 27, of Chuckey, Tenn.; Clint L. Epps, 35, of Knoxville, Tenn.; Randall Logan Crawford, 25, of Jacksboro, Tenn.; Lawrence H. Bond, Jr., 53, of Morristown, Tenn.; Jason M. Hammond, 28, of Heiskell, Tenn.; Matthew Todd Bryant, 40, of Knoxville, Tenn.; Cindy D. Davis, 41, of Morristown, Tenn.; Christopher D. Barrett, 38, of Newport, Tenn.; Lext A. Dienst, 40, of Morristown, Tenn.; Christopher W. Visser, 39, of New Market, Tenn.; Jason D. Lowery, 37, of Knoxville, Tenn.; Nathan S. James, 23, of Mooresburg, Tenn.; John R. Fields, 42, of Morristown, Tenn.; Steven M. Watkins, 60, of Knoxville, Tenn.; Brady Thompson, 49, of Soddy Daisy, Tenn.; Brandon S. Estes, 21, of Russellville, Tenn.; Joshua M. Lynn, 26, of Maryville, Tenn.; Eric C. Henson, 32, of Morristown, Tenn.; and, Eduardo Rivera Gattorno, 48, of Chattanooga, Tenn.
All of these individuals appeared in court between July 28, 2015, and September 1, 2015, before U.S. Magistrate Judge C. Clifford Shirley and pleaded not guilty to the charges in the indictment.
Documents on file with the U.S. District Court Clerk detail the charges against these individuals and reveal that they were obtaining crystal methamphetamine, or ICE, from near the Atlanta area and transporting it back to the Eastern District of Tennessee for distribution.
If convicted, all face a minimum and mandatory term of 10 years in prison and a maximum term of life, a maximum fine of $10,000,000.00, and a term of supervised release of at least five years. All also face mandatory court assessments.
This indictment is the result of a multi-agency investigation including the Knoxville Police Department, LaFollette Police Department, White Pine Police Department, Morristown Police Department, Third Judicial Drug Task Force, Fourth Judicial Drug Task Force, Fifth Judicial Drug Task Force, Hamblen County Sheriff’s Office, Fayetteville County (Georgia) Sheriff’s Office, Gordon County (Georgia) Sheriff’s Office, Sevier County Street Crimes Unit, Tennessee Highway Patrol, Tennessee Bureau of Investigation, Georgia Bureau of Investigation, U.S. Marshals Service, Internal Revenue Service, and Drug Enforcement Administration. Assistant U.S. Attorney Caryn L. Hebets will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
This case was a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Mother Sentenced to 25 Years in Prison for Sexually Abusing her Young ChildRead the Press Release
PORTLAND, Ore. – U.S. District Judge Michael H. Simon sentenced Carolyn M. Knudsen, 29, of Camas, Washington, to 300 months in prison, for transporting her young child across state lines from Camas, Washington to Gresham, Oregon, for purposes of sexually abusing the child. Following her release from prison, Knudsen will be required to serve ten years on supervision and register as a sex offender.
Knudsen, and co-defendant James Hickerson, 36, of Gresham, Oregon, were jointly charged with aggravated sex abuse (sex abuse of a minor under the age of 12), transportation of a minor across state lines for unlawful sexual purposes, and production of child pornography. According to court documents, the two sexually abused Knudsen’s toddler child for months, possibly up to two years, in Gresham and on at least one occasion in Washington. The government presented two videos of the abuse at sentencing to refute Knudsen’s claims that she did not sexually abuse her child, that she was forced to engage in the conduct, and that she did not know Hickerson was videotaping the abuse.
Knudsen pled guilty in May as part of a plea agreement calling for the 25-year sentence. Although Knudsen stood by her plea at the sentencing hearing, she denied many of the government’s allegations at her change of plea, and according to the government’s argument at sentencing, in a letter she provided the court immediately before sentencing. Knudsen told the court that it only knew part of the facts and insisted she “did not hurt” her child. However, after viewing the videos in chambers, Judge Simon replied, “It may be true that I’m only getting a portion of what happened, but from the portion that I have seen and that I have read, it does appear to me that you have failed to fulfill the fundamental responsibility of a parent, which is to protect one’s child.” The Court then followed the parties’ joint recommendation and sentenced Knudsen to 25 years in prison for her conduct, finding it an appropriate sentence considering the serious nature of the offense, the defendant’s history and characteristics, the need to promote respect for the law, and to punish and deter future illegal conduct.
Knudsen was facing a mandatory 30-year sentence on the aggravated sex abuse charge, and potentially a higher sentence, if she went to trial or was prosecuted by either state. The Multnomah County District Attorney’s Office and the Clark County, Washington Prosecutors Office agreed not to prosecute Knudsen further as long as she received a sentence of at least 25 years in the federal case. James Hickerson has also entered a guilty plea in this case and in a separate child pornography case. Hickerson is scheduled for sentencing before Judge Simon on November 9, 2015.
Acting U. S. Attorney Billy J. Williams praised the sentence and said, “Child sex abuse is always disturbing, but is particularly reprehensible when it involves a parent. It is simply despicable, and was aggravated in so many respects in this case, between the age of the child, the length of abuse, and the fact that the defendants recorded videos and photographed it. Thanks to the good work of law enforcement and the quick coordination with child welfare, this child was promptly rescued, and the child’s mother will remain behind bars until after the child is an adult.”
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 U.S. Department of Justice and led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This investigation involved the cooperation and participation of the Multnomah County Sheriff’s Office, the Interagency Child Exploitation Proactive Task Force (INTERCEPT), the Vancouver Interagency Crimes Against Children (ICAC) Task Force, the Camas Police Department, Child Protective Services in Vancouver, Washington, the U.S. Department of Homeland Security/Homeland Security Investigations, the Multnomah County District Attorney’s Office, the Clark County, Washington Prosecutor’s Office, and the U. S, Attorney’s Office. The case was prosecuted by Assistant U.S. Attorney Jane Shoemaker.
Miami-Dade County Residents Sentenced in Stolen Identity Unemployment Insurance Fraud and Social Security Fraud SchemeRead the Press Release
Miami brothers Ronet Blanc, 24, and Renet Blanc, 20, were sentenced yesterday to 94 months imprisonment and 82 months imprisonment, respectively, to be followed by three years of supervised release, for filing fraudulent unemployment insurance and Social Security claims using stolen identities.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Rafiq Ahmad, Special Agent in Charge, U.S. Department of Labor, Office of Inspector General (DOL-OIG), Office of Labor Racketeering and Fraud Investigations, Margaret Moore-Jackson, Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), Ronald J. Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Neil Melofchik, Acting Special Agent in Charge, United States Secret Service (USSS), Yukima Everett, Manager, Enforcement Section, Michigan Unemployment Insurance Agency, and J. Scott Dennis, Chief, North Miami Beach Police Department (NMBPD), made the announcement.
According to court records, Ronet and Renet Blanc were involved in a scheme that utilized the stolen identities of Michigan and Florida residents to file fraudulent unemployment insurance claims in both of those states. The State of Michigan Unemployment Insurance Agency then sent unemployment payments, by direct deposit, to bank accounts controlled by the Blancs in Florida. The Blancs were identified on bank surveillance photos withdrawing some of the unauthorized funds.
On Wednesday, March 18, 2015, officers executed a federal search warrant at the Blancs’ residence. In one bedroom, along with Renet Blanc’s personal items, law enforcement discovered numerous sheets of paper, ledgers, and other documents containing the personally identifying information (“PII”)—including names, dates of birth, and Social Security numbers—of various individuals who did not appear to live at the Blancs’ residence. In particular, law enforcement discovered in excess of 50 unique sets of PII on notebook paper, W-2 employment forms, and patient records. Law enforcement also discovered a debit card Renet Blanc was captured using at the bank to withdraw fraudulent unemployment insurance funds.
In another bedroom, along with Ronet Blanc’s personal items, law enforcement discovered a laptop computer. A subsequent forensic search of the computer revealed Ronet Blanc’s resume and a spreadsheet containing the personal identification information (“PII”)—including names, dates of birth, and social security numbers—of at least 3,000 individuals, including residents of Michigan and Florida.
In addition to the fraudulent unemployment insurance claims, the Blancs filed fraudulent Social Security claims. The combined actual intended loss which resulted from the Blancs’ conduct was over $2,000,000.00.
Ronet Blanc and Renet Blanc each previously pleaded guilty to one count of using of one or more unauthorized access devices to obtain $1,000 in value or more during one calendar year, as well as one count of possession of fifteen or more unauthorized access devices, and one count of aggravated identity theft. U.S. District Judge Cecilia Altonaga ordered restitution for Renet Blanc in the amount of $25,724 and Ronet Blanc in the amount of $63,366.
Mr. Ferrer commended the investigative efforts of the U.S. Department of Labor, Office of Inspector General (DOL-OIG), Office of Labor Racketeering and Fraud Investigations, SSA-OIG, USPIS, HSI, USSS, Michigan Unemployment Insurance Agency and NMBPD. This case is being prosecuted by Assistant United States Attorney Ben Widlanski.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Beach Resident Sentenced to 152 Months in Prison for Land Fraud Deal in the BahamasRead the Press Release
Lawrence Foster, 50, from Miami Beach, was sentenced today to 152 months’ imprisonment by U.S. District Judge Donald L. Graham, for conspiring to commit wire fraud and committing substantive counts of wire fraud, and was ordered to pay over $8 million in restitution. The Court also ordered the forfeiture of over $1 million that was seized by federal law enforcement.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Foster was convicted of all counts after a jury trial for his role in defrauding over 100 investors of over $8 million dollars. Foster fraudulently promised investors that his company, Paradise is Mine, was developing land in the Bahamas.
The government announced its intent to use the forfeited monies to repay a portion of the $8 million owed to the victims of the fraudulent scheme.
Foster’s co-defendants were previously sentenced for their roles in the fraudulent scheme.
Salesperson Jordon McCarty, 37, of Fort Lauderdale, was sentenced in November 2013, to 78 month’s imprisonment for his role in defrauding investors. Johana Leon, 39, of Miami Beach, was sentenced in May 2015, to one year and one day imprisonment, after being convicted of structuring currency transactions.
Mr. Ferrer commended the investigative efforts of the FBI. The case was tried by Assistant U.S. Attorneys H. Ron Davidson and Robert Watson. Assistant United States Attorneys Evelyn Sheehan and Karen Moore handled the forfeiture proceedings in this case.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Maryland Man Found Guilty of First-Degree Murder While Armed in 2012 Killing of Taxicab Driver in Northeast WashingtonRead the Press Release
WASHINGTON – Joshua Mebane, 20, of Waldorf, Md., was found guilty by a jury today of first-degree murder while armed and other charges in the November 2012 killing of a taxicab driver in Northeast Washington, Acting U.S. Attorney Vincent H. Cohen, Jr. announced.
In addition to the murder charge, the jury found Mebane guilty of nine other charges, including conspiracy, assault with intent to commit robbery while armed, and firearms offenses. The verdict followed a trial in the Superior Court of the District of Columbia. The Honorable Jennifer Anderson scheduled sentencing for Nov. 13, 2015. Mebane could face decades in prison for the various crimes.
A co-defendant, Linda Bury, also 20, earlier pled guilty to charges of second-degree murder while armed and conspiracy to commit armed robbery. She is awaiting sentencing.
According to the government’s evidence, Mebane and Bury, both 17 years old at the time, met online in October of 2012. Dissatisfied with their respective home environments, they made a plan to run away together. On Nov. 1, 2012, Mebane took a taxi from his family home in Waldorf, Md., to Bury’s family home in Parkton, Md. They then took a cab into the District of Columbia, and they stayed at a motel in Northeast Washington from Nov. 2 to Nov. 7, 2012.
In light of a dwindling money supply, Mebane and Bury devised a plan to commit a robbery of a taxicab driver on the evening of Nov. 7, 2012. A few minutes before 9 p.m., they randomly hailed a taxicab and instructed the driver, Muhammad Quadeer, to drive them to the rear of Hamilton Junior High School in the 1400 block of Brentwood Parkway NE. Once in the rear of the building, Mebane put on a black latex glove, pulled a 9mm pistol from a nylon bag, and fatally shot Mr. Quadeer, 44, once to the back of his head.
In announcing the verdict, Acting U.S. Attorney Cohen commended the work of those who investigated the case from the Metropolitan Police Department (MPD). He also expressed appreciation for the assistance provided by the District of Columbia Department of Forensic Sciences; Bode Technologies; the Charles County, Md. Sheriff’s Department; the Baltimore County, Md. Police Department, and the Gallaudet University Department of Public Safety. In addition, he acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Assistant U.S. Attorney Sharon Donovan; Litigation Technology Specialist Leif Hickling; Paralegal Specialists Kwasi Fields and Benjamin Kagan-Guthrie; Investigative Analyst Zachary McMenamin; Victim/Witness Advocate Marcia Rinker, and Victim/Witness Security Specialist David Foster. Finally, he commended the work of Assistant U.S. Attorney George A. Pace, who investigated and prosecuted the case.
Man Pleads Guilty to Firearm ChargesRead the Press Release
St. Thomas, USVI –
D’mari Heyliger, 23, pleaded guilty Monday in District Court on
St. Thomas to Possession of a Firearm with an Obliterated Serial Number and
Possession of an Unlicensed Firearm, United States Attorney Ronald W. Sharpe
announced. Sentencing is scheduled for January 11, 2016.
According to the plea agreement filed with the court, on December 20, 2013, a federal
search warrant was executed on Heyliger’s residence in St. Thomas and two firearms were
located in his bedroom. Both firearms had obliterated serial numbers, and Heyliger is not
authorized to possess a firearm in the Virgin Islands. Heyliger faces a maximum sentence of five
years in prison and a $250,000 fine for Possession of a Firearm with an Obliterated Serial
Number, and five years in prison and a $15,000 fine for Possession of an Unlicensed Firearm.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and
Explosives (ATF). It is being prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Logan man sentenced in federal court for lying in attempt to retrieve pawned gunsRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Brian Keith Conley, 42, of Logan, was sentenced today in federal court in Charleston for making a false statement in connection with an attempt to acquire firearms. Conley was sentenced to serve one month in federal prison followed by three years of supervised release, seven months of which will be spent on home confinement.
Conley previously pleaded guilty and admitted that on October 29, 2014 when trying to retrieve guns he had pawned at a local pawn shop, he completed a required federal form on which he denied that he had ever been convicted of domestic violence. Conley knew, however, that he had been previously convicted of domestic battery in Logan County Magistrate Court of domestic battery. Conley was unable to retrieve the guns from the pawn shop, and law enforcement was alerted to Conley’s unlawful possession of firearms and his attempt to retrieve them from the pawn shop.
The United States Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney C. Haley Bunn handled the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
Local Music Instructor Charged with Production of Child PornographyRead the Press Release
ALEXANDRIA, Va. – A Manassas man who served as a volunteer with the music programs at Osbourn High School and Grace E. Metz Middle School in Manassas has been charged by criminal complaint with production of child pornography.
According to court documents and court proceedings, David Alexander Battle, II, 23, who worked for a private music company in Manassas, was arrested by the Manassas City Police Department on June 16, 2015, after law enforcement executed a search warrant at his residence and discovered evidence of child pornography, including two gigabytes of videos that appeared to be child pornography involving infants. Other evidence found at Battle’s residence included child pornography primarily of young boys and girls.
Battle initially faced child pornography charges in Prince William County, however, as the investigation into his online activity continued, federal prosecutors became involved and he was charged federally on Aug. 6, 2015. Battle is currently detained and awaiting trial.
Battle faces a mandatory minimum of 15 years in prison and a maximum penalty of 30 years, if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Anyone with information about this case is encouraged to contact the Northern Virginia-Washington, DC Internet Crimes Against Children (ICAC) Task Force, or the Manassas City Police Department Investigative Services Division at 703-257-8092.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Douglas W. Keen, Manassas City Chief of Police; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after Battle’s initial appearance before U.S. Magistrate Judge Theresa Carroll Buchanan on Aug. 24, 2015. Assistant U.S. Attorney Jay Prabhu is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-mj-416.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
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Local Construction Company Settles Allegations of Fraud Involving A Disadvantaged Business EnterpriseRead the Press Release
Civil Constructors, LLC, has agreed to pay the United States $400,000.00 to settle False Claims Act allegations, announced David Rivera, United States Attorney for the Middle District of Tennessee. The settlement resolves an investigation of the corporation’s predecessor entity, Civil Constructors, Inc. (“CCI”), for submitting false claims for payment to the United States in connection with the United States Department of Transportation’s Disadvantaged Business Enterprise (“DBE”) Program.
The DBE Program provides a vehicle for increasing the participation by Minority Business Enterprises in state and local transportation projects and ensures that DBEs can compete fairly for federally funded transportation-related work.
“Enforcement of the False Claims Act is a top priority of the Department of Justice and this office,” said U.S. Attorney David Rivera. “This enforcement effort includes investigating schemes to exploit federal programs aimed to help small and minority businesses to compete in the federal marketplace. The U.S. Attorney’s Office will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
The United States alleged that CCI, as the prime contractor on a federally-funded construction project on South Water Street in Gallatin, Tenn., agreed that it would use a DBE to perform subcontracted work on the project. That DBE, Columbia Construction, did not possess the necessary resources to perform the actual work. The subcontracted work was, instead, performed by a company that was not qualified as a DBE. CCI used Columbia Construction as a “pass through” entity on the project, a role in which it did not perform a commercially useful function.
“Disadvantaged Business Enterprise fraud like that perpetrated by Civil Constructors harms both the integrity of the DBE program and law-abiding DBE contractors trying to compete on a level playing field for contracts,” said Marlies Gonzalez, regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General. “Working with our Federal, State, and local law enforcement and prosecutorial partners, our agents will vigorously pursue those who violate the law, and expose and shut down fraud schemes that adversely affect public trust and DOT-assisted programs.”
This matter was investigated by the DOT-Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.
Linn Woman Pleads Guilty to Illegal Firearm, MethRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Linn, Mo., woman pleaded guilty in federal court today to illegally possessing methamphetamine and a firearm.
Sangria Dawn Mueller, 39, of Linn, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to both counts of a June 25, 2015, federal indictment.
By pleading guilty today, Mueller admitted that she was in possession of methamphetamine with the intent to distribute on Feb. 20, 2014, in Osage County, Mo.
Mueller also admitted that she was in possession of a Smith & Wesson 9mm semi-automatic handgun on Feb. 20, 2014. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Mueller has three prior felony convictions for possession of a controlled substance and a prior felony conviction for driving while revoked.
Law enforcement officers executed a search warrant at Mueller’s residence on Feb. 20, 2014. Officers found an ammunition box in the garage that contained three bags of methamphetamine totaling 165 grams and the firearm in the top drawer of a bedroom dresser.
Under federal statutes, Mueller is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1,250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander. It was investigated by the Drug Enforcement Administration, the Osage County, Mo., Sheriff’s Department, the Missouri State Highway Patrol, and the Lake Area Narcotics Enforcement Group (LANEG).
Leader of group that planned to rob cocaine stash house sentenced to 17 years in prisonRead the Press Release
The leader of a group of men who distributed heroin and cocaine and planned to use firearms to rob what they believed to be a drug stash house was sentenced to more than 17 years in prison.
Kali Alexander, 24, of Willoughby Hills, was sentenced to 211 months in federal prison. Rasheam Nichols, 24, of Cleveland, was sentenced to 15 years in prison.
A jury convicted Alexander, Nichols, Justin Maxwell, 26, Terrance Chappell, 22, and Kenneth Flowers, 21, all of Cleveland, on all 11 counts earlier this summer.
Maxwell, Chappell and Flowers are scheduled to be sentenced this week. They face mandatory minimum sentences of 15 years in prison.
Alexander recruited the other defendants to steal up to nine kilograms of cocaine from a stash house in Cleveland. The group planned to rob the stash house, then Alexander would sell the stolen cocaine and split the profits, according to court documents.
Alexander met with an undercover ATF agent last year and expressed an interest and willingness to commit the robbery. “I promise you, I know what I’m doing, I’m about to holler at my big brother, then we going to orchestrate it from there,” according to court documents.
Alexander, Nichols, Maxwell, Chappell and Flowers met with the ATF undercover on September 3, 2014, and discussed the strategy for the robbery. Then the five men drove to agreed-upon location in anticipation of acquiring a specific vehicle to use during the robbery, at which point they were arrested, according to court documents.
The indictments are the result of “Operation Samson II,” an initiative last summer in which 60 people were indicted and 110 firearms were seized.
“This was a violent crew who had no qualms about using firearms to get drugs and money,” said U.S. Attorney Steven M. Dettelbach. “Cleveland is safer with these men off the streets.”
"There is no place in our society for those who use firearms for violent, criminal purposes," said Donald Soranno, Special Agent in Charge of ATF's Columbus Field Division. "ATF will continue to work with our law enforcement partners at every level to bring those individuals to justice."
This case was prosecuted by Assistant U.S. Attorneys Kelly M. Galvin and Paul Flannery. Operation Samson II was a cooperative effort between the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cleveland Division of Police, the Ohio Adult Parole Authority, the U.S. Marshals Service, the U.S. Attorney’s Office and the Cuyahoga County Prosecutor’s Office.
Laredo Tax Return Preparer IndictedRead the Press Release
LAREDO, Texas – The owner of Premier Fastax in Laredo and Rio Bravo has been taken into custody on charges of tax fraud, announced U.S. Kenneth Magidson along with Special Agent in Charge Rick Goss of Internal Revenue Service – Criminal Investigation (IRS-CI). Maria Elena Ramirez is charged in a 23-count indictment alleging she assisting in the preparation of false tax returns, filed false tax returns and obstructing the Internal Revenue Code.
The indictment was returned under seal Aug. 18, 2015, and unsealed upon her arrest today. She is expected to make her initial appearance before U.S. Magistrate Judge Guillermo Garcia tomorrow at 9:00 a.m.
The Indictment alleges Ramirez falsified employment and income on her client’s tax returns so that they qualified for tax credits and refund checks they otherwise could not have obtained. Ramirez also allegedly falsified her own tax returns by understating her business income and taxable income. According to the indictment, Ramirez also attempted to obstruct the IRS investigation by filing false supporting documentation with the IRS and by instructing some of her clients to lie to IRS agents who were investigating her.
Ramirez faces up the three years in federal prison if convicted of any of the charges as well as a possible $100,000 fine.
The investigation leading to the charges was conducted by IRS - CI. Assistant U.S. Attorney Robert S. Johnson is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Lafayette business owner pleads guilty to defrauding investors out of $1.27 millionRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Lafayette woman pleaded guilty Monday to defrauding investors out of more than $1.27 million.
Catherine Doucet Romero, 52, of Lafayette, pleaded guilty before U.S. District Judge Richard T. Haik to one count of wire fraud and one count of money laundering. According to the guilty plea, from March 2007 to July 2009, Romero tricked investors into believing that their money was going to be used to purchase a manufacturing facility and tannery for exotic skin products, to include alligator and stingray. Instead, Romero used the money to pay personal bills and expenses of an unrelated business. The amount stolen in the scheme is $1,271,000.
“Ms. Romero conned individuals into believing that they were investing in a unique Louisiana business, knowing full well that she was going to divert their investment to her personal use,” Finley stated. “This case further demonstrates our ongoing commitment to deter investor fraud in Louisiana.”
Romero faces 20 years in prison and five years of supervised release for the wire fraud count and 10 years in prison and three years of supervised release for the money laundering count. She also faces a $250,000 fine, restitution and forfeiture. A sentencing date was not set.
The FBI conducted the investigation. Assistant U.S. Attorney John Luke Walker is prosecuting the case.
Kirtland, N.M., Man Sentenced to 100 Months for Conviction on Federal Sexual Assault ChargesRead the Press Release
ALBUQUERQUE – Steven Michael John was sentenced today in federal court in Santa Fe, N.M., to 100 months in prison followed by five years of supervised release for his conviction on sexual assault charges. John will be required to register as a sex offender after he completes his prison sentence. John’s sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, and Director Jesse Delmar of the Navajo Nation Division of Public Safety.
John, 23, an enrolled member of the Navajo Nation who resides in Kirtland, N.M., was arrested on July 24, 2013, on a criminal complaint alleging sexual abuse charges. John was indicted on Aug. 14, 2013, and charged with attempted aggravated sexual abuse and abusive sexual contact. The indictment alleged that John attempted to force the victim to engage in a sexual act at a location within the Navajo Indian Reservation in San Juan County, N.M., on July 18, 2013. It also alleged that John engaged in sexual contact with the victim on that day.
Trial of this case began on Aug. 18, 2014, and concluded on Aug. 20, 2014 when the jury returned a guilty verdict on both counts of the indictment.
The evidence at trial established that on the afternoon of July 18, 2013, John broke into a residence in Sanostee, N.M., and attempted to rape a 16- year-old Navajo girl. The victim was taking a shower when John entered the residence and attacked her. Although the victim resisted John’s attack and was able to prevent John from raping her, John groped the victim’s naked body during their struggle. After John fled from the residence, the victim called 911 and reported the assault. The evidence presented to the jury included photographs of the injuries the victim suffered as she struggled against John’s attack, and the testimony of medical professionals who treated the victim after the assault.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. The case was prosecuted by Assistant U.S. Attorneys Jennifer M. Rozzoni and Kristopher N. Houghton.
The case 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.
KMART Corporation Pays $1.4 Million to Resolve False Claims Act Allegations in Connection with Drug Manufacturer Coupons and Gas DiscountsRead the Press Release
KMART Corp. (Kmart), a discount department store chain that operates approximately 780 in-store pharmacies throughout the United States, Puerto Rico and the U.S. Virgin Islands, has paid the United States $1.4 million to resolve allegations that it violated the False Claims Act by using drug manufacturer coupons and gasoline discounts as improper Medicare beneficiary inducements, the Justice Department announced today.
“The United States will continue to pursue retail pharmacies that improperly attempt to influence a beneficiary’s choice of pharmacy,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The government will not permit pharmacies to use improper business tactics to solicit business that does nothing to improve the quality of healthcare received by Medicare beneficiaries and increases the costs of the Medicare program.”
The settlement resolves allegations that Kmart violated the False Claims Act by providing illegal inducements to beneficiaries of the Medicare program. The government alleged that from June 2011 to June 2014, Kmart knowingly and improperly influenced the decisions of Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by permitting the Medicare beneficiaries to use drug manufacturer coupons to reduce or eliminate prescription co-pays that they otherwise would be obligated to pay. Federal law prohibits a person from offering beneficiaries of certain federal health programs, such as Medicare, remuneration that is intended to influence the beneficiary’s choice of provider. The government alleged that Kmart’s conduct caused the Medicare beneficiaries to seek expensive, brand name drugs in lieu of cheaper generic drugs, which caused the government’s costs to increase without any medical benefit to the beneficiary. The government also alleged that Kmart improperly encouraged Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by offering them varying levels of discounts on the purchase of gasoline at participating gas stations based on the number of prescriptions that they filled at Kmart pharmacies.
The settlement resolves allegations in a lawsuit filed by Joshua Leighr, a former Kmart pharmacist, under the qui tam, or whistleblower provisions of the False Claims Act. The act authorizes private parties, such as Mr. Leighr, to sue for fraud on behalf of the United States and to share in any recovery. Mr. Leighr will receive approximately $248,500 of the settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24.9 billion through False Claims Act cases, with more than $15.9 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was investigated jointly by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Western District of Missouri, the Department of Health and Human Services’ Office of Inspector General and the U.S. Postal Service’s Office of Inspector General.
The claims settled by today’s agreement are allegations only and there has been no determination of liability.
The case is captioned U.S. ex rel. Leighr v. Kmart Sears Holding Corporation and Kmart Corporation, Case No. 4:13cv00988-DGK (W.D. Missouri).
KC Man Pleads Guilty to Armed Robbery ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to his role in a conspiracy to commit several armed robberies at restaurants in the metropolitan area.
Jeremy Hunter, also known as “Heat,” 25, of Kansas City, pleaded guilty before U.S. District Judge Beth Phillips to the charges contained in an April 15, 2015, federal indictment.
By pleading guilty today, Hunter admitted that he participated in a conspiracy to rob several fast food restaurants in the Kansas City area in the fall of 2014. Hunter admitted that he participated in one of the robberies, and loaned his assault rifle to co-conspirators to use in several other robberies.
Hunter stole $6,800 from a Chipotle in Blue Springs, Mo., on Nov. 16, 2014, after being given access to the back door by a co-conspirator who was employed by the restaurant. Armed with his assault rifle, Hunter forced the restaurant employees to the ground as he kicked the door into the manager’s office. Once in the manager’s office, Hunter ordered the supervisor to open the safe and put all the money into a green duffle bag. Hunter was wearing a grey hooded sweatshirt, black ski masks and blue latex surgical gloves to mask his identity.
Hunter’s three co-conspirators, who worked at the Blue Springs Chipotle restaurant, also robbed a Chipotle restaurant in Lee’s Summit, Mo., on Nov. 3, 2014, taking $1,600; a Burger King restaurant in Independence, Mo., on Nov. 10, 2014, taking $914; and a Burger King restaurant in Independence on Nov. 30, 2014, taking $565. Hunter loaned them his assault rifle to use in some of the robberies, in exchange for part of the proceeds.
Under federal statutes, Hunter is subject to a mandatory minimum sentence of seven years in federal prison without parole for the charge of using a firearm in a crime of violence, to run consecutively to a sentence of up to 20 years in federal prison without parole for the charge of conspiracy to obstruct commerce by robbery, plus a fine up to $500,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Charles E. Ambrose, Jr. It was investigated by the Kansas City, Mo., Police Department, the Lee’s Summit, Mo., Police Department, the Blue Springs, Mo., Police Department and the FBI.
Justice Department Seeks to Shut Down Fraudulent Colorado-Area Tax Return BusinessRead the Press Release
The United States has asked a federal court to permanently bar a Colorado man and the tax preparation business he operates from preparing federal tax returns for others, the Justice Department announced today.
According to the government’s civil complaint, Gerardo Herrera and his business, El Lobo Multiservicios Professionales Inc., fraudulently reduced their customers’ tax liabilities by reporting extra dependents and claiming bogus deductions. For example, the complaint alleges that Herrera and his staff have repeatedly claimed their customers’ extended family members as dependents, even though they do not qualify for dependent status under federal law, and have improperly claimed deductions for personal expenses like cell phones and car insurance. In addition, according to the complaint, audits have shown that Herrera and his workers exaggerated deductions, reported fraudulent charitable contribution deductions and claimed improper head of household filing status. The complaint alleges that the Internal Revenue Service (IRS) audited more than 200 returns prepared by Herrera’s business and found misrepresentations on more than 99 percent of them.
Return-preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Reaches Agreement with Cedar Rapids, Iowa, to Improve Accessibility of Services and ProgramsRead the Press Release
The Department of Justice announced today an agreement with Cedar Rapids, Iowa, to improve access to all aspects of civic life for people with disabilities in Cedar Rapids. This year marks the 25th anniversary of the Americans with Disabilities Act (ADA), which the Civil Rights Division plays a critical role in enforcing.
Cedar Rapids and the Department of Justice reached an agreement under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the ADA. Under the agreement, the city is required to ensure that people with disabilities can fully take advantage of the city’s services, programs and activities.
“Over the last 25 years, the ADA has required states and local governments to examine their facilities and provide citizens with disabilities the same program access to city services that all other citizens enjoy,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Agreements such as this one will ensure that individuals with disabilities in Cedar Rapids have more access to city services and programs which is essential for them to enjoy their civil right to full participation in American life.”
The agreement with Cedar Rapids will allow people with disabilities, like Catherine Hafsi and Cherie Clark, to access county services, programs and activities. Ms. Hafsi, who uses a walker, encountered problems with the entrance door to the parking pay system in a municipal lot across from the federal courthouse as well as with sidewalks when she visited the Fair Housing Office at the Veteran’s Memorial Building. Similarly, Ms. Clark, who uses a wheelchair and a walker, has encountered several accessibility issues with sidewalks and entrances to city facilities in Cedar Rapids. Experiences like these, however, will become a thing of the past over the next four years thanks to the PCA agreement. More of Ms. Hafsi’s and Ms. Clark’s stories are on the Justice Department blog, where each month of 2015, the department is highlighting how PCA agreements have an impact on the everyday lives of people with disabilities.
Under the agreement, Cedar Rapids will install, repair or replace thousands of sidewalks and curb ramps throughout Cedar Rapids to bring them into compliance with current ADA standards to improve access for persons with disabilities. Cedar Rapids will also ensure that its city parking lots and toilet rooms are accessible to persons with disabilities and enhance accessibility throughout the city’s park system.
This agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The four-year agreement will remain in effect until September 1, 2019. The department will actively monitor compliance with the agreement.
For more information about the ADA, today’s agreement, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for state and local governments, individuals may access the ADA Web page at http://www.ada.gov/civicac.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Reaches Agreement with Cedar Rapids to Improve Accessibility of Services and ProgramsRead the Press Release
CEDAR RAPIDS, IOWA – The Department of Justice announced today an agreement with Cedar Rapids to improve access to all aspects of civic life for people with disabilities in the city. This year marks the 25th anniversary of the Americans with Disabilities Act (ADA), which the Civil Rights Division plays a critical role in enforcing.
Cedar Rapids and the Department of Justice reached an agreement under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the ADA. Under the agreement, the city is required to ensure that people with disabilities can fully take advantage of the city’s services, programs and activities.
“Today's agreement represents a significant step towards ensuring all members of our community are treated fairly," said Kevin W. Techau, United States Attorney for the Northern District of Iowa. "As our nation celebrates the 25th anniversary of the ADA, I am proud that the city of Cedar Rapids has taken this opportunity to work with the Department of Justice to enhance the lives of all of its citizens.”
“Over the last 25 years, the ADA has required states and local governments to examine their facilities and provide citizens with disabilities the same program access to city services that all other citizens enjoy,” said Principal Deputy Attorney General Vanita Gupta, head of the Civil Rights Division. “Agreements such as this one will ensure that individuals with disabilities in Cedar Rapids have more access to city services and programs which is essential for them to enjoy their civil right to full participation in American life.”
The agreement with Cedar Rapids will allow people with disabilities, like Catherine Hafsi and Cherie Clark, to access county services, programs and activities. Ms. Hafsi, who uses a walker, encountered problems with the entrance door to the parking pay system in a municipal lot across from the federal courthouse as well as with sidewalks when she visited the Fair Housing Office at the Veteran’s Memorial Building. Similarly, Ms. Clark, who uses a wheelchair and a walker, has encountered several accessibility issues with sidewalks and entrances to city facilities. Experiences like these, however, will become a thing of the past over the next four years thanks to the PCA agreement.
Under the agreement, Cedar Rapids will install, repair or replace thousands of sidewalks and curb ramps throughout the city to bring them into compliance with current ADA standards to improve access for persons with disabilities. Cedar Rapids will also ensure that its city parking lots and toilet rooms are accessible to persons with disabilities and enhance accessibility throughout the city’s park system.
This agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The four-year agreement will remain in effect until September 1, 2019. The department will actively monitor compliance with the agreement.
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Jesup, GA Residents Sentenced to Federal Prison in Identity Theft and Tax Return ScamRead the Press Release
Brunswick, GA – Aquilla Terrell Randolph, 39, of Jesup, Georgia, was sentenced last week to 68 months in prison by United States Court Chief Judge Lisa Godbey Wood after pleading guilty to his role in an identity theft and tax return scam. Last month, Randolph’s co-conspirator, Edward C. Jennings, 37, also of Jesup, Georgia, was sentenced to 9 months in prison.
According to evidence presented at the guilty plea and sentencing hearings, Randolph used the stolen identities of others to file fraudulent tax returns with the IRS. Randolph stole the identities of at least 26 individuals to file at least 35 fraudulent tax returns, which resulted in fraudulent refund payments totaling over $280,000. Jennings assisted Randolph by allowing refund checks to be mailed to his residence and later cashing at least one fraudulently obtained refund check.
United States Attorney Edward Tarver stated, “Prosecuting identity thieves who profit by defrauding innocent citizens and the IRS remains a high priority in the Southern District of Georgia. As these defendants have learned, we will work closely with the IRS to investigate tax refund scams in order to hold the perpetrators accountable.”
“Identity thieves continue to believe they can rob from the American taxpayer,” said Veronica F. Hyman-Pillot. “These sentences show IRS-CI’s commitment to pursue the individuals whose objective is to defraud the tax system.”
This case was investigated by Special Agents with IRS-CI. Assistant United States Attorney Scarlett S. Nokes and former Assistant United States Attorney T. Shane Mayes prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Jared Fogle co-defendant formally charged with child exploitation and distribution of child pornographyRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler announced that Russell C. Taylor, 43, Indianapolis, was charged by criminal information today with 12 counts of child exploitation involving 12 minor children in Indiana. He was also charged with one count of distributing and receiving child pornography through an alleged conspiracy with Jared Fogle. Taylor has filed a plea agreement with the court acknowledging his crimes.
“Protecting those who cannot protect themselves will always be a priority of this office,” said Minkler. “Adults who sexually exploit children by producing child pornography knowingly cause vast harm to their victims and should expect appropriately strong punishment.”
Indiana State Police detectives received information that Taylor was in possession of illegal pornographic images and served a search warrant at his home on April 29, 2015, along with law enforcement officers from the Indianapolis Metropolitan Police Department and the FBI. The investigator used a mobile forensic laboratory to conduct the search of Taylor’s home. The investigators found a cache of sexually explicit photos and videos Taylor produced by secretly filming minor children at this home and they obtained a second search warrant for child pornography. In total, the investigators found over 400 videos of child pornography in computers, cellular phones, and storage media recovered from a home office. Taylor is charged with producing these videos inside his current and former Indianapolis residences using hidden cameras, during the period between March 2011 and January 30, 2015.
According to the facts Taylor admitted in the written plea agreement filed today, on multiple occasions between March 2011 and April 2015, he used multiple hidden cameras in his residences to produce child pornography involving 12 minors. He knew that the victims in these images or videos were under the age of 18 years. He also knew their identities.
Taylor and his friend Jared Fogle discussed among themselves the fact that Taylor was secretly producing sexually explicit videos of minors in Taylor’s current and former residence. Fogle chose to benefit from such production by obtaining access to a significant amount of such material over the time period. However, Fogle did not produce any of this material himself.
None of the minors in the videos were aware that they were being filmed. Rather, Taylor produced the videos using multiple hidden cameras set up in his residences and oriented to show them nude, changing clothes, or engaged in other activities.
Taylor also obtained from the Internet and provided Fogle with child pornography he downloaded from Internet sources which may be classified as commercial material produced by other persons. The unidentified victims in these commercial images and videos were as young as approximately six years of age.
During the investigation, Taylor admitted that child pornography was recovered during a search of his residence, where it was found in computer equipment, storage devices, cameras and other media analyzed by the Cybercrime Section of the Indiana State Police. This included the material involving child victims 1 through 12 as well as the commercial child pornography.
All of the images and videos included a lascivious exhibition of the genitals or pubic area of the relevant minor victim, while some material also included other sexually explicit conduct depending upon the minor involved.
On multiple occasions, Taylor provided Fogle with access to the images or videos by sharing them on a computer that Taylor owned. They frequently travel together for business trips. Taylor and Fogle were close friends. Taylor also provided Fogle with some images and videos through text messages and a thumb drive.
Jared Fogle, who was charged by this office on August 19, 2015, has signed a plea agreement and has a November 19, 2015 sentencing date before U.S. District Judge Tanya Walton Pratt.
According to Senior Litigation Counsel Steven DeBrota, who is prosecuting this case for the government, Taylor had admitted to all 13 charges. Under the terms of the plea agreement, he cannot ask the court for a sentence below 15 years of imprisonment. The government can ask for a sentence of up to 35 years of imprisonment, followed by supervised release for the remainder of Taylor’s life. However, the court will ultimately determine the sentence to impose. He is presently detained in the custody of the U.S. Marshal
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Office and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resource.”
A criminal information is only a charge. The defendant is presumed innocent until proven guilty in federal court.
Illegal Immigrant Sentenced to Prison for Firearm PossessionRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez on Monday sentenced Eilin Castillo, 37, of the Dominican Republic, to 14 months in prison and three years of supervised release for
Possession of a Firearm by an Illegal Alien, United States Attorney Ronald W. Sharpe announced.
On May 8, 2015, Castillo pleaded guilty to Possession of a Firearm by an Illegal Alien. Court records show that in November 2014, Castillo, who is an illegal immigrant with no authority to be in the United States or possess a firearm, possessed and discharged a firearm with an obliterated serial number. Castillo discharged the firearm in a residential area on St. Thomas in connection with a domestic dispute. After discharging the firearm, Castillo attempted to dispose of it, but law enforcement agents recovered the firearm.This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland
Security Investigations and prosecuted by Assistant United States Attorney David White.Gila River Man Sentenced to 9 Years in Prison for StabbingRead the Press Release
PHOENIX – Yesterday, Kenneth Wayne Morgan, Jr., 38, of Blackwater, Ariz., was sentenced by U.S. District Judge G. Murray Snow to 108 months in prison. On April 30, 2015, Morgan was found guilty by a jury of assault resulting in serious bodily injury.
On Jan. 29, 2014, Morgan entered a home on the Gila River Indian Community and stabbed a man in the head, causing a 10 cm. gash from the victim’s temple through his ear. The victim was air-evacuated to a local hospital where he was treated for the life threatening injury. Both Morgan and the victim are members of the Gila River Indian Community.
The investigation in this case was conducted by the Gila River Police Department. The prosecution was handled by Raynette Logan and Brooke Mickelson, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-14-01126-PHX-GMS
RELEASE NUMBER: 2015-066_Morgan
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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Former United Commercial Bank Chief Credit Officer Sentenced to over Eight Years for Felony Fraud ConvictionRead the Press Release
The Fraud Caused the Ninth Largest Bank Failure with Estimated Losses in Excess Of $677 Million
Ebrahim Shabudin, 66, of Moraga, California, was sentenced today to 97 months in prison for his role in a securities fraud scheme and other corporate fraud offenses stemming from the failure of United Commercial Bank (UCB), announced U.S. Attorney Melinda Haag of the Northern District of California, Acting Inspector General Fred W. Gibson, Jr. of the Office of the Inspector General for the Federal Deposit Insurance Corporation (FDIC), Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP), Inspector General Mark Bialek of the Board of Governors of the Federal Reserve System and the Office of the Inspector General of the Consumer Financial Protection Bureau and Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division. The sentencing brings to a close one of the most significant prosecutions to arise out of the 2008 financial crisis.
Shabudin was the Chief Operating Officer and Chief Credit Officer at UCB in 2008 and 2009. Shabudin was the second most senior officer in executive management at UCB after former Chief Executive Officer Thomas Shiu-Kit (“Tommy”) Wu.
On Nov. 6, 2009, UCB was taken over by the FDIC. With over $10.9 billion in assets, UCB’s failure was the ninth largest failure since 2007 of a bank insured by the FDIC’s Deposit Insurance Fund, according to the FDIC. In 2013, FDIC estimated that total losses for UCB would exceed $1.1 billion. Through 2014, however, with the recovery of the United States economy, FDIC now estimates the loss to the Deposit Insurance Fund to be approximately $677 million. On Nov. 14, 2008, the Troubled Asset Relief Program (TARP) provided approximately $298 million in federal funds to UCB during the financial crisis. Shabudin was charged with conspiring with others within the bank to falsify key bank records as part of a scheme to conceal millions of dollars in losses and falsely inflate the bank’s financial statements. Among the records Shabudin was charged with falsifying were those filed with the United States Securities and Exchange Commission (SEC) and FDIC related to the third and fourth quarters of 2008 describing UCB’s so-called Allowance for Loan Losses. Also falsified were documents relating to UCB’s quarterly and year-end earnings per share as announced by the bank to the investing public. On March 25, 2015, following a six-week trial before the U.S. District Judge Jeffrey S. White , a jury found Shabudin guilty of seven crimes related to the scheme:
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Count One:Conspiracy to Commit Securities Fraud, with a maximum penalty of 25 years of imprisonment, a $250,000 fine, a five year term of supervised release and a $100 special assessment.
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Count Two:Securities Fraud, with a maximum penalty of 25 years of imprisonment, a $250,000 fine, a five year term of supervised release and a $100 special assessment.
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Count Three:Falsifying Corporate Books and Records, with a maximum penalty of 20 years of imprisonment, a $5,000,000 fine, a three year term of supervised release and a $100 special assessment.
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Count Four:False Statements to Accountants, with a maximum penalty of 20 years of imprisonment, a $5,000,000 fine, a three year term of supervised release and a $100 special assessment.
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Count Five:Circumventing Internal Accounting Controls, with a maximum penalty of 20 years or imprisonment, a $5,000,000 fine, a three year term of supervised release and a $100 special assessment.
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Count Six:Conspiracy to Commit False Bank Entries, Reports, and Transactions, with a maximum penalty of five years of imprisonment, a $250,000 fine, a three year term of supervised release and a $100 special assessment.
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Court Seven:False Bank Entries, Reports, and Transactions, with a maximum penalty of 30 years of imprisonment, a $1,000,000 fine, a five year term of supervised release and a $100 special assessment.
“As the Chief Operating Officer and Chief Credit Officer of United Commercial Bank, Ebrahim Shabudin presided over one of the largest securities fraud schemes in the history of this district,” said U.S. Attorney Haag. “His prison term should serve as a warning to persons who believe that complex commercial crime will not be detected and prosecuted. I am proud of all the hard work of the attorneys and staff of this office and of our federal partners that resulted in this successful prosecution.”
“Today's sentencing of Mr. Shabudin sends a powerful message to the public that bank insiders who abuse their positions of trust and cause irreparable harm to their banks will be brought to justice and held accountable,” said Acting Inspector General Gibson, Jr. “We appreciate the U.S. Attorney’s Office’s efforts in bringing this matter to a successful conclusion and achieving results that should deter others from similar criminal activity. We are committed to continuing to work with our law enforcement colleagues on cases like this one, in the interest of ensuring the safety and soundness of the nation's banks and the viability of the FDIC’s Deposit Insurance Fund—which suffered massive losses when United Commercial Bank failed.”
“This is the most significant prosecution for crimes arising out of the bailout,” said Special Inspector General Romero. “Like many bankers during the financial crisis, this senior officer of a TARP bank faced defaulting loans and declining collateral, but unlike others, Ebrahim Shabudin deliberately turned to crime to deceive and now he will spend the next eight years in federal prison. Fixated on protecting the bank’s reputation, Shabudin embarked on an elaborate criminal scheme to hide the bank’s declining financial condition that resulted from the bank’s risky aggressive growth strategy pre-crisis. Hoping that things would get better, Shabudin gambled with $300 million of taxpayer bailout money, all of which was lost when the bank failed. We commend U.S. Attorney Melinda Haag for standing united with SIGTARP in our relentless pursuit to bring justice for bailout-related crime.”
Shabudin’s sentence was handed down today by the Honorable U.S. District Judge Jeffrey S. White. Judge White also sentenced Shabudin to three years supervised release and ordered restitution in the amount of $348,000. Shabudin surrendered to the U.S. Marshal on, in November to begin his sentence.
On Dec. 9, 2014, Chief Financial Officer Craig S. On for UCB pleaded guilty to one count of Conspiracy to Make a Materially False and Misleading Statement to an Accountant. On Oct. 7, 2014, the bank’s Senior Vice President, Thomas Yu, pleaded guilty to charges of conspiracy to commit false bank entries, reports and transactions related to his preparation of false and misleading reports. Both On and Yu await sentencing.
Assistant U.S. Attorneys Adam A. Reeves and Robert David Rees are prosecuting the case with the assistance of Denise Oki, Phillip Villanueva, Bridget Kilkenny and Trina Khadoo. The prosecution is the result of a five year investigation by the FDIC-OIG, SIGTARP, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau Office of Inspector General and the FBI
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Former United Commercial Bank Chief Credit Officer Sentenced to over Eight Years for Felony Fraud ConvictionRead the Press Release
OAKLAND –Ebrahim Shabudin was sentenced today to 97 months in prison for his role in a securities fraud scheme and other corporate fraud offenses stemming from the failure of United Commercial Bank, announced U.S. Attorney Melinda Haag; Federal Deposit Insurance Corporation, Office of the Inspector General, Acting Inspector General Fred W. Gibson, Jr.; Special Inspector General for the Troubled Asset Relief Program Christy Goldsmith Romero; Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, Office of the Inspector General, Inspector General Mark Bialek; and FBI Special Agent in Charge David J. Johnson. The sentencing brings to a close one of the most significant prosecutions to arise out of the 2008 financial crisis.
Shabudin, 66, of Moraga, Calif., was the Chief Operating Officer and Chief Credit Officer at United Commercial Bank (“UCB”) in 2008 and 2009. Shabudin was the second most senior officer in executive management at UCB after former Chief Executive Officer Thomas Shiu-Kit (“Tommy”) Wu.
On November 6, 2009, UCB was taken over by the Federal Deposit Insurance Corporation (“FDIC”). With over $10.9 billion in assets, UCB’s failure was the ninth largest failure since 2007 of a bank insured by the FDIC’s Deposit Insurance Fund, according to the FDIC. In 2013, FDIC estimated that total losses for UCB would exceed $1.1 billion. Through 2014, however, with the recovery of the United States economy, FDIC now estimates the loss to the Deposit Insurance Fund to be approximately $677 million. On November 14, 2008, the Troubled Asset Relief Program (“TARP”) provided approximately $298 million in federal funds to UCB during the financial crisis. Shabudin was charged with conspiring with others within the bank to falsify key bank records as part of a scheme to conceal millions of dollars in losses and falsely inflate the bank’s financial statements. Among the records Shabudin was charged with falsifying were those filed with the United States Securities and Exchange Commission (“SEC”) and FDIC related to the third and fourth quarters of 2008 describing UCB’s so-called Allowance for Loan Losses. Also falsified were documents relating to UCB’s quarterly and year-end earnings per share as announced by the bank to the investing public. On March 25, 2015, following a six-week trial before the Honorable Jeffrey S. White, U.S. District Judge, a jury found Shabudin guilty of seven crimes related to the scheme:
Count One: Conspiracy to Commit Securities Fraud, in violation of 18 U.S.C. § 1349, with a maximum penalty of 25 years of imprisonment, a $250,000 fine, a 5 year term of supervised release, and a $100 special assessment.
Count Two: Securities Fraud, in violation of 18 U.S.C. § 1348, with a maximum penalty of 25 years of imprisonment, a $250,000 fine, a 5 year term of supervised release, and a $100 special assessment.
Count Three: Falsifying Corporate Books and Records, in violation of 15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(5), and 78ff, and 17 C.F.R. § 240.13b2-1, with a maximum penalty of 20 years of imprisonment, a $5,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
Count Four: False Statements to Accountants, in violation of 15 U.S.C. § 78ff, and 17 C.F.R. § 13b2-2, with a maximum penalty of 20 years of imprisonment, a $5,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
Count Five: Circumventing Internal Accounting Controls, in violation of 15 U.S.C. §§ 78m(b)(2)(B) and 78ff, with a maximum penalty of 20 years or imprisonment, a $5,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
Count Six: Conspiracy to Commit False Bank Entries, Reports, and Transactions, in violation of 18 U.S.C. § 371, with a maximum penalty of 5 years of imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
Court Seven: False Bank Entries, Reports, and Transactions, in violation of 18 U.S.C. § 1005, with a maximum penalty of 30 years of imprisonment, a $1,000,000 fine, a 5 year term of supervised release, and a $100 special assessment.
“As the Chief Operating Officer and Chief Credit Officer of United Commercial Bank, Ebrahim Shabudin presided over one of the largest securities fraud schemes in the history of this district,” said U.S. Attorney Melinda Haag. “His prison term should serve as a warning to persons who believe that complex commercial crime will not be detected and prosecuted. I am proud of all the hard work of the attorneys and staff of this office and of our federal partners that resulted in this successful prosecution.”
"Today's sentencing of Mr. Shabudin sends a powerful message to the public that bank insiders who abuse their positions of trust and cause irreparable harm to their banks will be brought to justice and held accountable,” said Fred W. Gibson, Jr.
Acting Inspector General, Federal Deposit Insurance Corporation. “We appreciate the U.S. Attorney’s Office’s efforts in bringing this matter to a successful conclusion and achieving results that should deter others from similar criminal activity. We are committed to continuing to work with our law enforcement colleagues on cases like this one, in the interest of ensuring the safety and soundness of the nation's banks and the viability of the FDIC's Deposit Insurance Fund—which suffered massive losses when United Commercial Bank failed.”
“This is the most significant prosecution for crimes arising out of the bailout,” said Christy Goldsmith Romero, Special Inspector General for TARP (SIGTARP). “Like many bankers during the financial crisis, this senior officer of a TARP bank faced defaulting loans and declining collateral, but unlike others, Ebrahim Shabudin deliberately turned to crime to deceive, and now he will spend the next eight years in federal prison. Fixated on protecting the bank’s reputation, Shabudin embarked on an elaborate criminal scheme to hide the bank’s declining financial condition that resulted from the bank’s risky aggressive growth strategy pre-crisis. Hoping that things would get better, Shabudin gambled with $300 million of taxpayer bailout money, all of which was lost when the bank failed. We commend United States Attorney Melinda Haag for standing united with SIGTARP in our relentless pursuit to bring justice for bailout-related crime.”
Shabudin’s sentence was handed down today by the Honorable Jeffrey S. White, United States District Judge. Judge White also sentenced Shabudin to three years’ supervised release and ordered forfeiture of $ 348,000. Shabudin will surrender to the U.S. Marshal in November to begin his sentence.
On December 9, 2014, UCB’s Chief Financial Officer, Craig S. On, pleaded guilty to one count of Conspiracy to Make a Materially False and Misleading Statement to an Accountant. On October 7, 2014, the bank’s Senior Vice President, Thomas Yu, pleaded guilty to charges of conspiracy to commit false bank entries, reports, and transactions related to his preparation of false and misleading reports. Both On and Yu await sentencing.
Assistant U.S. Attorneys Adam A. Reeves and Robert David Rees are prosecuting the case with the assistance of Denise Oki, Phillip Villanueva, Bridget Kilkenny and Trina Khadoo. The prosecution is the result of a five year investigation by the FDIC-OIG, SIGTARP, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau Office of Inspector General, and the FBI.
Former Respiratory Care Practitioner Sentenced for Health Care Fraud ChargesRead the Press Release
CHARLOTTESVILLE, VIRGINIA – A former respiratory therapist, who practiced in both Free Union, Va. and Earlysville, Va., pled guilty on April 20, 2015, to committing health care fraud and was sentenced August 28, 2015, in the United States District Court for the Western District of Virginia in Charlottesville.
At his guilty plea hearing, Karsten, operating as PDK Oximetry, LLC, admitted that between 2006 and 2010 he fraudulently billed Medicare for his services by using false Current Procedural Terminology (CPT) codes. Karsten admitted to using CPT codes that he knew would yield higher Medicare reimbursement payments for himself even though the service he was billing for was not provided and could not be provided by a home mail test practice, such as the one he owned and operated.
Between 2006 and 2010, Karsten fraudulently overbilled Medicare $2,499,276, and was overpaid $2,376,953 by Medicare. Karsten was sentenced last Friday in United States District Court to 36 months of federal incarceration and was ordered to pay $2.3 million in restitution to Medicare.
In sentencing Karsten, the Court said that Karsten had committed a serious crime, that there was no doubt that Karsten stole money that did not belong to him, and that there was no justification for it, noting that Karsten committed the wrongful acts time and time and time again in small increments over a period of four years. The Court also stated that the sentence of 36 months incarceration was imposed, in part, to promote respect for the law and to deter others from stealing from health care programs. The court noted that laws are structures that hold us together as a society and that there must be just punishment for persons who break those laws.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Department of Health and Human Services- Office of the Inspector General. Assistant United States Attorney Jennie L.M. Waering is prosecuting the case for the United States.
Former Owings Mills Postal Service Employee Pleads Guilty to Embezzling More Than $92,000Read the Press Release
Baltimore, Maryland – Tonya Lucille Higgs, age 50, of Owings Mills, Maryland pleaded guilty today to misappropriation of postal funds.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General.
According to Higgs’ plea agreement Higgs had been an employee of the United States Postal Service (USPS) since 1995. In March 2011, she was promoted to Lead Sales and Service Associate at the Owings Mills Post Office. Her job responsibilities included consolidating and verifying postal monies and daily financial reports. From October 6, 2011 to May 10, 2014, Higgs fraudulently issued 272 Postal Service no-fee money orders, embezzling a total of approximately $92,147.76 from the USPS. To conceal the scheme, Higgs entered these money orders into the Postal Service database as refunds, so Higgs would not be expected to collect any money from the “customer.” Higgs also wrote relatives, friends, neighbors and associates names on the no-fee money orders to cover up the scheme. The majority of fraudulent no-fee money orders were either made payable to Higgs or used to pay Higgs’ personal bills. After learning of the suspiciously high number of no-fee money orders for refunds issued by Higgs, she was interviewed on May 15, 2014 by Special Agents of the USPS Office of Inspector General. Higgs admitted stealing postal funds through the issuance of no fee-money orders. Higgs was placed on emergency leave in no-pay status at the conclusion of the interview and subsequently fired.
Higgs faces a maximum sentence of 10 years in prison for misappropriation of postal funds. U.S. District Judge Ellen L. Hollander has scheduled sentencing for November 5, 2015 at 10:00 a.m.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Service, Office of Inspector General, for its work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney David P. Kehoe and Assistant U.S. Attorney Rachel M. Yasser, who are prosecuting the case.
Former Miami Dade College Employee Sentenced in Identity Theft Tax Fraud SchemeRead the Press Release
A former Miami Dade College (MDC) employee was sentenced to 36 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $19,083 for his participation in an identity theft tax fraud scheme.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Steve Steinberg, Chief, Aventura Police Department, made the announcement.
Michelson Jeancy, 35, of Miami, previously pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, Jeancy worked at MDC as a Student Services Assistant. As part of his regular employment, the defendant had access to student records, which contained personal identifying information (“PII”). Between February 2013 and June 2104, the defendant stole the PII of current and former MDC students. Using the students’ PII, the defendant and his accomplices filed fraudulent tax returns.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and the City of Aventura Police Department. The case is being prosecuted by Assistant U.S. Attorney Gera Peoples.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Deputy Convicted of Civil Rights Violations and Obstruction of JusticeRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury today found Michael J. Ronga (43, Cape Coral) guilty of deprivation of civil rights under color of law and obstruction of justice. He faces a maximum penalty of 10 years in federal prison for the civil rights violation and up to 20 years’ imprisonment for the obstruction charge. A sentencing hearing is scheduled for November 30, 2015.
Ronga was indicted on February 23, 2015.
According to testimony and evidence presented at trial, on May 5, 2013, Ronga, a deputy with the Lee County Sheriff’s Office (LCSO), provided a courtesy transport to victim R.L.C. Ronga subsequently assaulted R.L.C., causing bodily injury. He also robbed the victim of his cash and cellphone. R.L.C. reported the assault and robbery to the LCSO, and an investigation ensued. During the course of the investigation, Ronga lied to law enforcement about his interaction with the victim.
This case was investigated by Lee County Sheriff’s Office, the Federal Bureau of Investigation, and the Florida Department of Law Enforcement. It was prosecuted by Chief Assistant United States Attorney Jesus M. Casas and Special Assistant United States Attorney Amira D. Fox.