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Friday 10 July 2015
Anne Arundel County Drug Dealer Sentenced to 7 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Victor Maurice Cook, age 40, of Millersville, Maryland today to a total of seven years in prison. Judge Motz sentenced Cook to five years in prison followed by five years of supervised release, for possession with intent to distribute cocaine, and two years in prison, consecutive to the five year sentence, for violating his supervised release from a previous drug conviction.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Special Agent in Charge Shawn Ellerman of the Drug Enforcement Administration, Baltimore District Office; and Anne Arundel County Police Chief Tim Altomare.
According to his plea agreement, on October 20, 2014, law enforcement officers received information that Cook would be engaged in a narcotics transaction in the vicinity of Route 2 and Arnold Road in Anne Arundel County. At that location, agents saw Cook crossing over the center lane divide several times and speaking on a hand held telephone as he was driving. Anne Arundel County Police detectives attempted to pull Cook over, but Cook continued driving, then tried to swerve into the detectives’ cars, striking one of them. Officers continued following Cook through the parking lots of businesses and ultimately heading southbound on Route 2. When Cook approached a red light with cars stopped at the intersection, Cook drove his car over the curb to get around the traffic and avoid stopping at the intersection. As he was driving, Cook threw a white plastic bag out of the passenger side window of his vehicle. Agents recovered the bag, while other officers approached Cook’s stopped vehicle and ordered him out. Cook struggled with the officers, but was ultimately removed from the vehicle, arrested and handcuffed. The plastic bag was found to contain over a kilogram of cocaine.
Cook also violated his supervised release from a 2001 federal drug conviction for which he served a 12 year sentence. Cook was serving five years of supervised release for this conviction when he was arrested in October 2014.
United States Attorney Rod J. Rosenstein praised the DEA and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Andrea L. Smith, who prosecuted this Organized Crime Drug Enforcement case, as well as Cook’s previous drug case.
Alton Man Pleads Guilty to Child Pornography ChargesRead the Press Release
Shaun Meyer, 33, of Alton, plead guilty today in the United States District Court to a one-count indictment charging him with Receipt of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced.
Court documents filed in the US District Court establish that during an undercover Internet investigation, agents from the United States Secret Service Illinois Cyber-Crime Unit determined that Meyer was receiving child pornography using a peer-to-peer file sharing network. Agents obtained and executed a search warrant for Meyer’s residence during which they seized Meyer’s laptop computer. Meyer was interviewed by law enforcement agents and admitted that he had been downloading child pornography from the Internet for approximately two years using a file sharing program. During a forensic examination of Meyer’s laptop computer, agents recovered 171 video files containing child pornography.
Meyer faces a term of in federal prison of not less than five, but not more than twenty years, a fine up to $250,000, and a term of supervised release of not less than five years up to a term for life. Sentencing is scheduled for October 22, 2015.
This case is part of Project Safe Childhood, a nationwide initiative launched in 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."
The investigation was conducted by the United States Secret Service Southern Illinois Cyber-Crime Unit, the Greenville Police Department and the Madison County Sheriff’s Department. The case is being prosecuted by Assistant United States Attorney Ali Summers.
Acton Man Indicted on Child Pornography ChargesRead the Press Release
BOSTON – Kenneth Howell, 49, was indicted today on one count of receipt of child pornography and one count of possession of child pornography. Howell was arrested and charged in a criminal complaint in May 2015.
In April 2015, Howell first came to the attention of federal agents when chat messages exchanged between another individual and he revealed that Howell was paying to view sex acts performed by minors in the Philippines over the Internet. In May 2015, law enforcement executed a search warrant at Howell’s home during which time Howell admitted that he downloaded, saved and distributed child pornography, and that he had been trading images of child pornography for four to five years. A preliminary review of Howell’s computer revealed over 100 videos of child pornography.
The charge of receipt of child pornography provides for a mandatory minimum term of five years and no greater than 20 years in prison. The charge of possession of child pornography provides for no greater than 20 years in prison. Both statutes provide for a mandatory minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Michael Shea, Deputy Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistance was also provided by the Massachusetts State Police and the Acton Police Department. The case is being prosecuted by Assistant U.S. Attorney Eve A. Piemonte of Ortiz’s Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Thursday 9 July 2015
Winterville Man Sentenced for Receiving Child PornographyRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that in federal court today, WILLIE RIGGS GODFREY, III, 44of Winterville, North Carolina, was sentenced before United States District Judge Terrence W. Boyle. GODFREY received 125 months imprisonment followed by a 10 year term of supervised release.
On November 24, 2014, a Criminal Indictment was filed charging GODFRFEY with receiving and possessing child pornography, in violation of Title 18, United States Code, Section 2252. On January 20, 2015, GODFREY pleaded guilty to receiving child pornography.
According to the investigation, on January 13, 2014, the Pitt County Sheriff’s Office received a tip of an IP address downloading child pornography. On January 30, 2014, the Pitt County Sheriff’s Office received information that the IP address was in use by GODFREY at his house. On February 4, 2014, reports showed that IP address was last active on February 1, 2014, with 51 possible files believed to be child pornography.
On February 6, 2014, the Pitt County Sheriff’s Office executed a search warrant on GODFREY’s residence. GODFREY voluntarily acknowledged being in receipt of child pornography which would be on his computer but nothing produced by him. A search of GODFREY’s computer revealed 5,312 images, 162 videos, and 18 compressed files of child pornography and erotica.
Investigation of this case was conducted by the Pitt County Sheriff’s Office. Assistant United States Attorney Rudy E. Renfer prosecuted the case for the United States.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Vivian man, Texas man sentenced for cocaine and methamphetamine chargesRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that two men were sentenced for their roles in a cocaine and methamphetamine distribution ring operating in Caddo and Bossier parishes.
Eugene O’Neal Cross, 40, of Marshall, Texas, was sentenced to 120 months in prison for one count of distribution of methamphetamine; and Anthony D. Jackson, 25, of Vivian, La., was sentenced to 60 months in prison for one count of conspiracy to distribute cocaine by U.S. District Judge Donald E. Walter. According to evidence presented at the March 31, 2015, guilty plea, from February 21, 2014, until July 26, 2014, Jackson conspired to possess and distribute more than 500 grams of cocaine. Cross admitted to distributing more than 50 grams of methamphetamine on January 21, 2014. Using surveillance and controlled buys, agents recorded the defendants at various times possessing and distributing drugs in Caddo and Bossier parishes.
The defendants were arrested as part of the Organized Crime Drug Enforcement Task Force (OCDETF) Operation Cross the Line. The DEA and the Caddo-Shreveport Narcotics Task Force investigated the case. The OCDETF program is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for targeting national and regional level drug trafficking organizations, coordinating the necessary law enforcement entities and resources, and disrupting and dismantling of major drug trafficking organizations.
Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
Union Employee Sentenced for Theft from Health Care FundRead 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 Paul Harnas, Jr., 30, of Elmira, NY, who was convicted of conspiring to defraud the Plumbers & Steamfitters Local 267 Insurance Fund, was sentenced to three years of supervised release by Chief U.S. District Judge Frank P. Geraci. The defendant was also ordered to pay restitution totaling $23,445 and perform 100 hours of community service. In addition, Harnas was directed to pay a 25% penalty on the fraudulently-obtained money to the Local 267 Insurance Fund.Assistant U.S. Attorney John J. Field, who handled the case, stated that Harnas created fake invoices for dental services that were never provided to him. The defendant then used the invoices to support false claims for reimbursement from the Local 267 Insurance Fund. Harnas also assisted others, including Jared Stevens, Gregory Haller and others who were involved in the scheme, by providing them with fake invoices. In total, Harnas and his co-conspirators fraudulently induced the Local 267 Insurance Fund to pay them $49,502.51 using this scheme.
Jared Stevens and Gregory Haller have been convicted and are awaiting sentencing.
The sentencing is the culmination of an investigation by Special Agents of the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia of the New York Regional Office, and the New York State Department of Financial Services, Frauds Bureau, under the direction of Superintendent Benjamin Lawsky.
Two charged with paying bribes to former head of anti-poverty agencyRead the Press Release
Two men were charged for paying bribes to the former head of a Cleveland-area anti-poverty agency in return for contracts from the agency, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office, and Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General—Chicago Region.
Robert Moman and John Calvetta were each charged via criminal information with one count of honest services mail fraud.
Moman, 77, of Tougloo, Miss., and John Calvetta, 71, of Solon, are charged with paying bribes to Jacqueline K. Middleton, who served as president and chief executive officer of the Council of Economic Opportunities of Greater Cleveland.
The CEOGC was organized with the purpose of serving low-income people of Cuyahoga County and Greater Cleveland. The CEOGC administered several federal, state and local programs designed to address the needs of low-income individuals, including Head Start, the Community Services Block Grant program and the Home Energy Assistance program.
Middleton, of Shaker Heights, previously pleaded guilty to two counts of honest services fraud, one count of bribery in federally funded programs and one count of Hobbs Act Conspiracy. She was sentenced to 30 months in federal prison.
Moman worked as a consultant for CEOGC. He received approximately $169,036 from CEOGC from 2008 through 2012. Moman provided $11,200 in kickback payments to Middleton in return for favorable actions, such as her authorization of contracts to Moman, according to the information.
Calvetta was an employee of a home and business renovation company located in Cleveland. That company received approximately $318,699 from CEOGC between 2008 and 2010 for parking lot renovations, flooring installation,classroom remodeling and other work. Calvetta provided gifts, payments and other things of value to Middleton worth $9,249 in the form of home renovation work and payments to vendors for related supplies on her behalf. This was done in return for Middleton steering work to the company, according to the information.
The case is being prosecuted by Assistant U.S. Attorney Michael L. Collyer following an investigation by the Federal Bureau of Investigation and the Department of Health and Human Services—Office of Inspector General.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
A charge is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Two Doctors and Four Others Arrested in $12 Million Health Care Fraud ConspiracyRead the Press Release
HOUSTON – Six Houstonians are in custody on wide-ranging charges involving a $12 million conspiracy to commit health care fraud and to pay kickbacks, announced U.S. Attorney Kenneth Magidson. The arrests were made in conjunction with a search warrant executed at a downtown office building where several clinics and a blood testing laboratory were located.
The 25-count indictment was returned July 1, 2015, and unsealed today. Those charged and arrested today include the owner and operator of the clinics and lab - Mktrich “Mike” Yepremian, 58, Dr. Harding Ross, 61, Dr. Faiz Ahmed, 63, Michael Wayne Wilson, 46, and Eric Johnson, 61, all of Houston. A sixth defendant - Jermaine Doleman, 38, also of Houston, was already in custody in another health care fraud scheme charged in this district over allegedly similar conduct.
They are expected to make their initial appearances before U.S. Magistrate Judge Frances Stacy at 2:00 p.m. today.
The indictment alleges Yepremian paid Doleman, Wilson and Johnson to bring Medicare and Medicaid patients to his clinics in order for him to bill for multiple, medically unnecessary diagnostic and blood tests. In turn, Doleman, Wilson and Johnson would then allegedly pay the patients to attend the clinics.
According to the indictment, the scheme began in 2006. The indictment alleges Yepremian controlled all funds from the false billing, but the clinics were allegedly held in the names of “straw owners.” The clinics involved included Crawford Medical Services, Mid City Healthcare and Care Family Practice all in Houston; Arca Medical Clinic formerly in Conroe and now in Houston, as well as a lab called Empire Clinical Laboratory in Houston.
Yepremian is also charged with money laundering for allegedly funneling money to relatives.
The statutory maximum penalty upon conviction of either the conspiracy, money laundering or any of the substantive counts of health care fraud is up to 10 years in federal prison and a possible $250,000 maximum fine. If convicted of a violation of the anti-kickback statute, Yepremian, Wilson and Johnson also face up to five years imprisonment as well as a possible $250,000 maximum fine.
The charges are the result of the investigative efforts of the Texas Attorney General’s Medicaid Fraud Control Unit and the FBI. Special Assistant U.S. Attorney Suzanne Bradley and Assistant U.S. Attorney Tina Ansari are prosecuting the case.
Two Convicted in Multi-Million Dollar Investment Fraud Scheme That Victimized Professional Hockey Players and Long Island InvestorsRead the Press Release
Following ten weeks of trial, a federal jury in Central Islip, New York, today returned a verdict convicting Phillip A. Kenner, a financial advisor, and Tommy C. Constantine, a part-time race car driver, on charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy arising from the defendants’ pocketing of millions of dollars raised from Long Island businessmen and professional athletes ostensibly for the purpose of funding the development of land in Hawaii and a start-up credit card business based in Arizona. Sentencing has been scheduled for November 20, 2015. The defendants face a maximum of 20 years’ imprisonment on each count of conviction as well as forfeiture of up to $30 million in proceeds derived from the frauds.
The verdict was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS).
The evidence from 39 government witnesses and hundreds of exhibits, including audio recordings made by several investor victims of each of the defendants as they struggled to comprehend the extent of their losses, established that as early as 2004, Kenner and Constantine used a labyrinth of holding companies to siphon millions in investor dollars away from their intended use and into companies, real estate, and other ventures that solely benefitted the defendants.
“Driven by personal greed, Kenner and Constantine spent years lying to investors and stealing their money, and then attempted to conceal their fraud by repeatedly and brazenly avoiding responsibility, shifting blame, and scapegoating others. Today, their scheme has been brought to an end,” stated Acting United States Attorney Currie. Mr. Currie expressed his grateful appreciation to the United States Attorney’s Office for the District of Arizona, the FBI and IRS Phoenix Offices, and the Scottsdale Police Department for their assistance in this prosecution.
"After defrauding victim investors out of millions of dollars over many years, the lies, deception, and criminal behavior of Kenner and Constantine have caught up with them today. The FBI thanks all of our partners for their assistance with this case," said FBI Assistant Director-in-Charge Rodriguez.
“Hopefully, today’s verdict will bring some closure to the victims of Kenner and Constantine,” said IRS Special Agent-in-Charge Kitchen. “Their success in defrauding so many individuals reinforces how important it is to use care when investing, no matter how much confidence you have in the individual or company you are investing with. Fortunately, federal law enforcement strives to be vigilant in uncovering fraud schemes and thorough in its investigation of them.”
As a college hockey player at Renssellaer Polytechnic Institute in Troy, New York, Kenner befriended then-teammate and future Olympian and National Hockey League (NHL) star Joe Juneau, who testified during the trial that after college he helped introduce Kenner to a number of other NHL players in the 1990’s as Kenner began working as a financial advisor in Boston. Through those early contacts, Kenner developed a clientele that included one-time New York Islanders forward Michael Peca, 1995 first-round draft pick and U.S. Olympian Bryan Berard, and Stanley Cup champions Darryl Sydor, Bill Ranford, and Sergei Gonchar, among other NHL players, whose careers blossomed just as Kenner took over greater and greater control of their finances and wealth.
The Hawaii Real Estate Investment Scheme
Beginning in 2003, Kenner convinced Peca, Berard, and several other clients to invest $100,000 each for the development of land in Hawaii into luxury estates. Kenner also had the players open lines of credit, collateralized by their personal stock, bond, and savings accounts, worth at least $10 million. Witness after witness testified that Kenner assured them that the credit lines would be used only to pay for initial development costs associated with the Hawaii project, and would be fully replenished after Lehman Brothers Holdings, Inc. agreed to loan the project up to $105 million in August 2006. In fact, the government’s evidence established that Kenner borrowed nearly all of his clients’ lines of credit and used the money to purchase his personal interest in unrelated real estate projects in Hawaii and Mexico, transfer funds to his partner in crime Constantine, and fund both his and Constantine’s personal expenses.
Meanwhile, Kenner and Constantine negotiated sweetheart deals that also dissipated the players’ assets and diverted millions to the defendants’ various pet projects. In one such deal, Constantine brokered a loan from an Arizona businessman for $3.5 million, ostensibly to close on a certain Hawaii parcel of land. The loan would have been unnecessary but for the fact that Kenner had already stolen millions through the player lines of credit. Worse, the loan agreement included a $2 million prepayment penalty at a time when the Lehman funding deal was all but certain to trigger the penalty. Although he put up no money of his own, Constantine walked away from that single loan with some $2 million that represented the diverted player assets. Bank records established that Constantine almost immediately kicked back a portion of the loan repayment proceeds to Kenner.
The Eufora LLC Scheme
During the conspiracy, Constantine operated Eufora, LLC, a prepaid debit card business which he founded in 2002. Between February 2008 and May 2009, as Eufora’s operating balances were in the red and Constantine testified in civil depositions that the company was nearly worthless, Kenner urged his clients to invest in Eufora. Approximately $700,000 of player investments was immediately wired out of Eufora to Kenner-controlled accounts. Another $725,000 in funds were similarly diverted to accounts that Constantine controlled and was used to cover the costs of Kenner’s and Constantine’s personal mortgages, credit card bills, and other debts.
In December 2009, Constantine fraudulently convinced a Long Island electrician, who had previously worked on a Kenner real estate project, to invest another $200,000 in Eufora, an investment that Constantine subsequently disavowed. In a recorded phone conversation played for the jury, Constantine offered a series of contradictory explanations refusing to acknowledge that the $200,000 was to have bought the victim a 1.5 percent interest in the company, which included a refusal to admit receiving the money, an admission that the investment had been received but not approved by Eufora’s board of directors, and even a suggestion that the victim should have asked for the money back before it was spent, even though records show that victim’s money was diverted and spent by the defendant within a day of being wired into Constantine’s control.
The Global Settlement Fund Scheme
In early 2009, Kenner’s player-clients who had opened lines of credit for the Hawaii venture received notices that their lines of credit were in default. For years, Kenner concealed that he had wiped out most of his clients’ savings by borrowing against one line of credit to pay monthly interest charges for another. By late 2008, the concealment scheme collapsed. Rather than admit to the diversions, Kenner and Constantine used the crisis to engineer a new phase of their fraud conspiracy by persuading the players to contribute new money towards something they termed the Global Settlement Fund or GSF.
At trial, the victims testified that Constantine and Kenner told them that the reason for their losses was the purported failure to repay loans by the managing partner of a Mexican resort known as Diamante Cabo San Lucas (DCSL). None of the players had previously been told that funds intended for the Hawaii land deal had been loaned to another developer in Mexico. Furthermore, documentary evidence at trial showed that much of the money that Kenner stole from the Hawaii project ended up being used to buy Kenner a personal 39 percent stake in DCSL.
Convinced that the only hope to recoup their losses lay in contributing to the Global Settlement Fund to fund litigation against the DCSL partner, Constantine and Kenner raised more than $2.9 million from the players. However, only $225,000 in contributions to the GSF were used for litigation. Instead, the vast majority of the money was again diverted to the defendants’ personal use, which included Constantine buying his personal home out of foreclosure, Kenner and Constantine paying legal bills related to Kenner’s personal investment in a tequila company in Mexico, defending Constantine in Florida litigation over his race car sponsorship activities, and an aborted effort by Constantine to buy Playboy Enterprises.
The Sag Harbor Scheme
In a separate scheme, Kenner acquired a 25 percent interest in real property in Sag Harbor, New York, without using any of his own money. To achieve this result, Kenner took $395,000 from Michael Peca’s line of credit, without Peca’s knowledge or permission, while at the same time convincing Berard to pay $375,000 for a supposed 50 percent interest, when in fact Kenner diluted Berard’s stake by half and pocketed the excess money. In early 2010, the investors realized Kenner had not contributed any of his own money, and they sold the property at a loss.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorneys James M. Miskiewicz, Saritha Komatireddy, and Diane Leonardo are in charge of the prosecution.
The Defendants:
PHILLIP KENNER
Age: 46
Scottsdale, AZTOMMY CONSTANTINE
Age: 48
Scottsdale, AZE.D.N.Y. Docket No. 13-CR-607 (JFB)
Two Chiropractors Arrested for Roles in Health Care Fraud Scheme Connected to Clinics in Bakersfield, Visalia and FresnoRead the Press Release
FRESNO, Calif. — Following arrests made earlier today, a federal indictment was unsealed charging three defendants with conspiracy to commit health care fraud and 15 counts of health care fraud, United States Attorney Benjamin B. Wagner announced.
Chiropractor Bahar Gharib-Danesh, 38, of Woodland Hills, was arrested in Los Angeles; Chiropractor Na Young Eoh, 41, of Bakersfield, was arrested in Bakersfield; and clinical psychologist John Terrence, 72, of Marina Del Rey, is expected to voluntarily appear before the U.S. District Court in Fresno within the next 30 days.
“Identifying and prosecuting fraud in the provision of health care services is a priority for this office,” said U.S. Attorney Wagner. “We will continue to work with our federal and state partners in pursuing dishonest health care providers who plunder public and private health care insurance plans for their own gain.”
According to the indictment returned on July 2, 2015, Gharib-Danesh was a chiropractor and the manager of Pain Relief Health Centers (PRHC). PRHC was headquartered in Los Angeles, and had clinics in Bakersfield, Visalia and Fresno, as well as in Los Angeles County. Eoh was also a chiropractor, and was the treating physician for PRHC’s Kern County workers’ compensation claims. Terrence was a clinical psychologist who saw patients from the Bakersfield clinic.
According to the indictment, PRHC recruited patients who were workers claiming to have an injury. In treating the patients, Gharib-Danesh instructed her staff to add as many injured body parts for treatment as possible to generate higher billings. The treatment plan generally included shock wave therapy, electro stimulation therapy, myo-facial release/massage, physical therapy, chiropractic manipulation, compound creams, and psychological evaluation. Nearly every patient was scheduled for the same treatments, and the maximum amount of treatments allowed by law was generally billed to the insurance company. Eoh operated out of the Bakersfield Clinic, the Visalia Clinic, and the Fresno Clinic and would sign the treatment plans and referral forms.
If the claim of injury was denied by the insurance company, a lien would be filed, and the claims would either be litigated before the California Workers’ Compensation Appeals Board or be settled by negotiations through the parties. Lien settlements for less than the full amount of the claim were acceptable because of the high volume of patients recruited and by the large amount of medical fees generated.
The indictment further alleges that Gharib-Danesh directed Eoh to refer all patients who came into the clinic to Terrence for a psychological evaluation, regardless of the injury the patient reported. Terrence submitted bills and reports for each patient that were virtually identical. He also allegedly fraudulently billed for patients at a rate higher than legally allowed. According to the indictment, Terrence provided each patient with approximately 20.8 hours of psychological evaluations in a single day. On one day, Terrence billed a total of 291.2 hours for treating 14 patients. In one period of two weeks, Terrence billed over a thousand hours treating patients and writing reports. Between 2005 and 2012, Terrence submitted claims for psychological services in workers’ compensation cases totaling in excess of $5.6 million.
This case is the product of an investigation by the Federal Bureau of Investigation, the California Department of Insurance, and the Kern County District Attorney’s Office. Assistant United States Attorneys Mark J. McKeon and Patrick R. Delahunty are prosecuting the case.
If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of the indictment. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Transporter Guilty of Moving Huge Cocaine LoadRead the Press Release
LAREDO, Texas – A Laredo man has entered a guilty plea to possessing with the intent to deliver 58 kilograms of cocaine, announced U.S. Attorney Kenneth Magidson.
Heriberto Benavides Jr., 26, pleaded guilty before U.S. Magistrate Judge Guillermo R. Garcia. At the hearing, Benavides admitted that on May 4, 2015, he drove a green Jeep Liberty he knew was loaded with 40 bundles of containing cocaine from Laredo, intending to take the drugs across the country to New York City.
As he attempted to cross through the Border Patrol checkpoint on I-35, a canine alerted to the presence of drugs hidden somewhere in the vehicle. Authorities soon discovered the bundles which were found to weigh 128 pounds. Benavides them admitted to Homeland Security Investigations (HSI) agents that he was transporting he drugs in order to avoid paying for a prior incident when he had unsuccessfully attempted to transport another drug load.
Benavides has been in custody since his arrest on May 4, 2015, where he will remain pending sentencing, which will be set in the near future. At sentencing, Benavides faces a minimum sentence of 10 years in federal prison and a possible $10 million fine.
The investigation leading to the charges was conducted by Border Patrol and HSI. Assistant U.S. Attorney Jose Homero Ramirez is prosecuting the case.Three More Defendants from Georgia Sentenced in Credit Card Fraud SchemeRead the Press Release
BOISE – Clarence Collins, 34, of Douglasville, Georgia, Charles Moore, 25, of Stone Mountain, Georgia, and Jonathan Penn, 20 of Suwanee, Georgia, were each sentenced this week in United States District Court for their roles in a credit card scheme that targeted local retailers in October 2014, U.S. Attorney Wendy J. Olson announced. Terrance Barimah, 26, of Floranceville, Georgia, was scheduled for sentencing on July 8, 2015, but failed to appear for the hearing. Chief U.S. District Judge B. Lynn Winmill issued a warrant for his arrest.
Clarence Collins was sentenced on July 6, 2015, to 78 months in prison followed by three years of supervised release for conspiracy to commit wire fraud and aggravated identity theft. Judge Winmill also ordered Collins to pay restitution of $22,679.54 along with the other co-defendants and to forfeit $49,953.41 in cash proceeds from the offense. He pleaded guilty on March 31, 2015.
Charles Moore was sentenced to 51 months in prison followed by three years of supervised release for conspiracy to commit wire fraud and aggravated identity theft. Judge Winmill also ordered Moore to pay restitution of $22,679.54 along with the other co-defendants and to forfeit $49,953.41 in cash proceeds from the offense. He pleaded guilty on April 26, 2015.
Jonathan Penn was sentenced to 24 months in prison followed by three years of supervised release for conspiracy to commit wire fraud. Judge Winmill also ordered Penn to pay restitution of $22,679.54 along with the other co-defendants and to forfeit $49,953.41 in cash proceeds from the offense. He pleaded guilty on April 26, 2015.
According to the plea agreements, Collins, Moore, and Penn each admitted traveling to Idaho, along with their co-defendants, for the purpose of making fraudulent purchases of gift cards and prepaid debit cards from retail stores, using stolen credit card numbers encoded onto stock debit cards. Each defendant admitted to obtaining the stock debit cards encoded with unauthorized credit card numbers, and making purchases at retail stores on October 5, 2014.
In his plea agreement, Collins admitted to traveling to five separate retail stores, and making eight purchases of gift cards and pre-paid debit cards, using five different credit card numbers that he was not authorized to use. Upon his arrest, officers found seven debit cards encoded with unauthorized credit card numbers in his possession, and 46 gift cards in the vehicle he was in.
In his plea agreement, Moore admitted to traveling to five separate retail stores, and making twenty-nine purchases of gift cards and pre-paid debit cards, using nine different credit card numbers that he was not authorized to use. Upon his arrest, officers found $2,740 and 43 gift cards in his possession.
In his plea agreement, Penn admitted to traveling to five separate retail stores, and making twenty-four purchases of gift cards and pre-paid debit cards, using six different credit card numbers that he was not authorized to use. Upon his arrest, officers found three debit cards encoded with unauthorized credit card numbers and thirty gift cards in his possession.
Collins, Moore, Penn, and Barimah were indicted, along with Kyandre Banks, 34, of Lilburn, Georgia, Brian Treadwell, 25, of Buford, Georgia, Mikki Williams, 25, of Loganville, Georgia, Rashine Kale, 38, of Lawrenceville, Georgia, Jean Estinville, 26, of Lawrenceville, Georgia, and Rakeen Anderson, of Atlanta, Georgia, on charges relating to a wire fraud and identity theft scheme. Collins, Banks, Estinville, Kale, Moore, Penn, Williams and Treadwell were each charged with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Anderson was charged with conspiracy to commit wire fraud and wire fraud. Barimah was charged with conspiracy to commit wire fraud and illegal possession of device-making equipment.
Co-defendants Brian Treadwell and Mikki Williams were sentenced on June 16, 2014. Treadwell received 75 months in prison for conspiracy to commit wire fraud and aggravated identity theft. Williams received three years of probation and 200 hours of community service for misprision of a felony.
Three more defendants are scheduled for sentencing before Judge Winmill. Co-defendant Rashine Kale is scheduled for sentencing on July 22, 2015. Co-defendant Jean Estinville is scheduled for sentencing on August 4, 2015. Co-Defendant Rakeen Anderson is scheduled for sentencing on August 17, 2015. Co-defendant Kyandre Banks remains a fugitive.
The case was investigated by the United States Secret Service and the Boise Police Department.
Three Individuals Found Guilty of Firearm OffensesRead the Press Release
SAN JUAN, P.R. – After an eight-day jury trial, José Cepeda-Martínez, Peter Rosario-Serrano and Juan Tanco-Baez were found guilty of firearm offenses, announced United States Attorney Rosa Emilia Rodríguez-Vélez. United States District Court Senior Judge Daniel Domínguez presided over the trial.
According to the evidence presented at trial, on or about March 26, 2014, the Puerto Rico Police Department (PRPD) arrested Cepeda-Martínez, Rosario-Serrano and Tanco-Báez for weapons violations and for the murder of an individual which occurred at the Román Baldorioty de Castro Expressway in Carolina, PR on the same day.
In the morning of March 26, 2014, a 911 call alerted the PRPD about a rapid gunfire reported at the Baldorioty Expressway. The call also alerted about a Jeep Cherokee fleeing the scene and going towards San Juan. Officers who were patrolling the area noted and identified the license plate of the Jeep Cherokee, and immediately pursued the vehicle. The individuals ended up fleeing the scene and later were arrested. A total of three Glock Pistols, two of them modified to fire as automatic weapons, ammunition, marihuana and three cellular phones were seized upon arrest.
“This conviction marks yet another victory in our fight against illegal firearms and violent crime in Puerto Rico. Our team of prosecutors and case agents set an excellent example of teamwork during the investigation which led to the conviction of these defendants at trial,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.
The case was prosecuted by Special Assistant United States Attorney Kelly Zenón-Matos and Assistant United States Attorney Victor Acevedo-Hernández. The defendants are facing a maximum sentence of 10 years for each count.
Three Charged in Manhattan Federal Court in Connection with June 18, 2015, Upper West Side MurderRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the New York Division of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of charges against ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS.
U.S. Attorney Preet Bharara stated: “A shopkeeper at a small store on the Upper West Side of Manhattan tragically lost his life last month when he was shot and killed during a robbery of his store. My Office and our law enforcement partners will ensure that those responsible for such senseless violence will be held to account.”
ATF Special-Agent-in-Charge Delano A. Reid stated: “With the arrest of Michael Adams, the reign of terror this alleged murderous robbery crew perpetrated on our streets comes to an end. The crew’s violent acts necessitated a quick response from law enforcement. I am grateful to all the investigators and prosecutors involved. Their hard work made it possible to quickly identify and arrest each of the crew members so that they no longer pose a threat to the citizens of New York City. The ATF is committed to combating violent crime and will invest its resources and personnel as needed to ensure that the quality of life in this great city is not diminished by those who have little or no regard for human life.”
NYPD Commissioner William J. Bratton stated: “Investigators wasted no time in tracking down and holding those persons allegedly responsible for this violent robbery, which ended in the senseless death of shopkeeper Bubacarr Camera. I want to thank the NYPD detectives and our law enforcement partners who were integral to these arrests, which I hope will offer some consolation to the family who lost their loved one to a meaningless criminal act.”
According to the allegations in the Indictment unsealed today in Manhattan federal court and other documents in the public record[1]:
On June 18, 2015, ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS shot and killed a shopkeeper, Bubacarr Camera, in the course of a robbery of a store located at 906 Amsterdam Avenue on the Upper West Side of Manhattan.
Two days before that murder, on June 16, 2015, ZUBEARU BETTIS and STEPHEN ADAMS robbed another shopkeeper at a store located at 2251 7th Avenue, in Manhattan. During that robbery, BETTIS brandished and discharged a firearm, while ADAMS physically accosted the victim.
* * *
BETTIS, 44, and STEPHEN ADAMS, 27, both of the Bronx, are charged with robbery and conspiracy to commit robbery, possessing a firearm in furtherance of a crime of violence, which firearm was brandished and discharged, and possessing a firearm in furtherance of a crime of violence resulting in death. MICHAEL ADAMS, 29, of the Bronx, is charged with robbery and conspiracy to commit robbery, and possessing a firearm in furtherance of a crime of violence resulting in death. If convicted, all three defendants face a maximum of life in prison or death, and a mandatory minimum of 10 years in prison. The maximum and minimum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.
MICHAEL ADAMS was arrested this morning in the Bronx and was presented this afternoon before United States Magistrate Judge Michael H. Dolinger and ordered detained. BETTIS and STEPHEN ADAMS were previously arrested on June 26, 2015, and ordered detained.
Mr. Bharara praised the outstanding investigative work of the SPARTA Task Force – which comprises agents and detectives of the ATF, the NYPD, and the U.S. Marshals Service – and of detectives from the NYPD’s Manhattan North Homicide Squad and the 24th Precinct Detective Squad. He also thanked the New York County District Attorney’s Office for their assistance.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Zubearu Bettis et al., 15 Cr. 410 (LAK)
COUNT
CHARGE
DEFENDANTS
MAXIMUM PENALTIES
1
Conspiracy to commit robbery
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
20 years in prison
2
Robbery
ZUBEARU BETTIS and STEPHEN ADAMS
20 years in prison
3
Robbery
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
20 years in prison
4
Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, which was brandished and discharged
ZUBEARU BETTIS and STEPHEN ADAMS
Life in prison
Mandatory minimum 10 years in prison consecutive to any other sentence
5
Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, resulting in the death of another
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
Life in prison or the death penalty
Mandatory minimum 10 years in prison consecutive to any other sentence
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Tampa Woman Sentenced to Two Years in Prison on Health Care Fraud ChargesRead the Press Release
Tampa, FL – United States District Judge Mary S. Scriven today sentenced Lisvet Martinez (42, Tampa) to two years in federal prison for health care fraud. The Court also entered a forfeiture money judgment of $124,676.25, along with a restitution order in the amount of $224,715.09. Martinez pleaded guilty on February 25, 2015.
According to court documents, Martinez operated Lissmart Medical Supply and Lissmart Pharmacy. She fraudulently billed Medicare and Medicaid for enteral nutrition services and supplies for beneficiaries who are not intubated and, therefore, not qualified to receive these services. Instead, Martinez provided oral nutrition products, like Boost, that are normally available at retail locations. She billed Medicare and Medicaid by submitting false documentation that these services were medically necessary and that she had the medical documentation of their intubated condition, when she did not.
In addition, Martinez fraudulently billed Medicare Part D and Medicaid for prescriptions that had not been prescribed by a physician, were not medically necessary, and had not been supplied to Lissmart Pharmacy.
This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General and the Florida Attorney General’s Medicaid Fraud Control Unit. It was prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.
Sentencings for July 6 - July 9, 2015Read the Press Release
Andrew Lambert Silicani, 23, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on July 9, 2015, on four counts of use of interstate commerce facilities in the commission of murder-for-hire. Silicani was arrested in Rawlins, Wyoming. He received 420 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $400.00 special assessment. This case was investigated by the Wyoming Department of Corrections and the Federal Bureau of Investigation.
James Robert Ford, 49, of Rock Springs, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on July 8, 2015, for conspiracy to distribute between 50 and 200 grams of a mixture or substance containing a detectable amount of methamphetamine and for possession of an unregistered sawed-off shotgun. Ford was arrested in Rock Springs, Wyoming. He received 57 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $200.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation, the U.S. Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Juan Jose Cortez-Becerra, 38, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on July 6, 2015, for illegal re-entry of a previously deported alien into the United States. Cortez-Becerra was arrested in Jackson, Wyoming. He received time served, plus 10 days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Lazaro Fernandez-Vargas, 40, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on July 6, 2015, for illegal re-entry of a previously deported alien into the United States. Fernandez-Vargas was arrested in Jackson, Wyoming. He received time served, plus 10 days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Scott resident pleads guilty to failing to update his sex offender registrationRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Scott resident pleaded guilty to failing to register his correct address for his sex offender identification.
Charles Edward Shinn, 44, of Scott, La., pleaded guilty before U.S. District Judge Richard T. Haik to one count of failure to update his sex offender registration. According to evidence presented at the guilty plea, U.S. Marshals learned in January of 2015 that Shinn was living in Louisiana even though he was registered as a sex offender in Mississippi. Upon further investigation, Shinn was found to be living in Scott and working in Lake Charles, La. Shinn was arrested on February 6, 2015. Law enforcement found multiple receipts from local stores in Louisiana dating back to September of 2014, and the owner of the home in Mississippi where Shinn said he lived reported that Shinn had never lived there.
Shinn was convicted in March of 1996 of felony carnal knowledge of a juvenile in St. Tammany Parish in the 22nd Judicial District of Louisiana. The offense occurred in December of 1993 and involved a 13-year-old. Shinn received four years of probation and was required to register as a sex offender. He never complied with sex offender registration requirements, removed himself from Louisiana Probation and Parole supervision in 1999, and remained a fugitive for the next 10 years. Shinn was arrested in August of 2010 and prosecuted by the U.S. Attorney for the Southern District of Alabama for failure to register as a sex offender. In August of 2011, he received a 10-month federal prison sentence, revocation for the State of Louisiana probation violation, and five years of federal supervised release. After completing his revocation prison term in June of 2014, Shinn was released from the Louisiana Department of Corrections, but never reported to U.S. Probation concerning his federal supervised release. He registered as a sex offender in St. Martin Parish on June 9, 2014, and reported on July 1, 2014, that he had moved to a Mississippi address.
Shinn faces up to 10 years in prison, five years to life supervised release and a $250,000 fine. A sentencing date was not set.
The U.S. Marshals Service conducted the investigation. Assistant U.S. Attorney Robert F. Moore is prosecuting the case.
San Antonio Businessman Sentenced to Federal Prison in Bribery SchemeRead the Press Release
In San Antonio today, 51-year-old Oscar Gilberto Rodriguez was sentenced to 30 months in federal prison for his role in a bribery scheme involving City of San Antonio contracts announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Xavier Rodriguez ordered that the former employee of the San Antonio firm Pape-Dawson Engineers, Inc., pay over $315,000 restitution and be placed on supervised release for a period of three years after completing his prison term.
According to court records, between 2004 and 2009, the defendant conspired with a former City of San Antonio employee to defraud and steal money from Pape-Dawson and its clients through Rapid Permit Service, Inc. (RPS). RPS was a hoax company created by Rodriguez and 44–year-old Fernando Jose De Leon, former Assistant Development Services Director of the Land Development Division within the City of San Antonio’s Planning and Development Services Department, to do permit expediting work on Pape-Dawson projects. As part of the conspiracy, Rodriguez would submit fraudulent RPS invoices to Pape-Dawson for payment. Rodriguez and De Leon subsequently divided the illegally obtained proceeds.
On October 16, 2014, Rodriguez and De Leon each pleaded guilty to conspiracy to commit wire fraud, mail fraud and to use interstate communication facilities to facilitate bribery under Texas law. Sentencing for De Leon is scheduled for 1:30pm on August 5, 2015, before Judge Rodriguez. De Leon faces up to five years in federal prison.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney James Blankinship is prosecuting this case on behalf of the Government.
Rockford Man Sentenced to 12 Years in Federal Prison for Drug-Trafficking and Firearm OffensesRead the Press Release
ROCKFORD — A Rockford man was sentenced yesterday in federal court on drug-trafficking and firearm charges. JARVIS WASHINGTON, 28, of Rockford, Ill., was sentenced by U.S. District Judge Frederick J. Kapala to a total of 12 years in federal prison, and ordered to serve 4 years of supervised release following his term of imprisonment. After a 3-day jury trial in U.S. District Court, Washington was convicted on April 1, 2015, of possession of heroin and cocaine base (“crack cocaine”) with intent to distribute, possession of marijuana with intent to distribute, and possession of a firearm and ammunition as a felon.
According to the indictment and evidence at trial, on Sept. 24, 2013, Washington possessed with intent to distribute at least 94.6 grams of heroin, 227.1 grams of crack cocaine, and 376.7 grams of marijuana. Many of the drugs were already individually packaged for sale, and Washington possessed the tools to package the remaining drugs for sale. In addition, Washington possessed a loaded .45 caliber handgun and both .45 caliber and .40 caliber ammunition. Washington previously had been convicted of a felony punishable by a term of imprisonment exceeding one year and, therefore, was prohibited by law from possessing a firearm and ammunition.
The defendant was originally charged in state court and was transferred to federal court where he was charged under tough federal firearms laws as part of the Project Safe Neighborhoods program. Project Safe Neighborhoods is an intensive, cooperative effort between local, state, and federal law enforcement to attack gun crimes. The cornerstone of the program is that every defendant committing an offense involving a gun will be reviewed for possible federal prosecution in order to obtain the harshest penalties for the worst offenders. Additional information about Project Safe Neighborhoods may be found at: www.psn.gov.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffrey A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Gary Caruana, Winnebago County Sheriff. The Rockford Police Department and Loves Park Police Department assisted in the investigation.
The government was represented by Assistant U.S. Attorneys John G. McKenzie and Talia Bucci.
Redding Man Pleads Guilty to Falsely Certifying More than 570 Oxygen Cylinders for Reuse, Including Reuse in AircraftRead the Press Release
SACRAMENTO, Calif. — Danniel A. Hoose, 49, of Redding, pleaded guilty today to one count of falsely certifying more than 570 oxygen cylinders for reuse, including reuse in aircraft, United States Attorney Benjamin B. Wagner announced.
According to court documents, Hoose owned and operated Shasta Fire Equipment Inc. (Shasta) in Redding and held a Department of Transportation (DOT)-issued permit to test oxygen and other gas-containing cylinders and to certify those cylinders for reuse for various purposes, including in aircraft. Acting on an anonymous complaint, investigators discovered that between March 2013 and June 2013, Hoose was personally responsible for performing all cylinder tests at Shasta, even though Hoose’s DOT certification to perform such tests had expired nearly a year earlier. Investigators also found that Shasta’s re-qualification equipment was in disrepair, and that Shasta’s test procedures, test accuracy, and test records failed to satisfy regulatory requirements.
According to documents filed in federal court today, Hoose admitted that he falsely certified more than 570 cylinders for reuse after conducting incomplete or, in some cases, no tests on those cylinders. Hoose also admitted that approximately 58 oxygen cylinders that he improperly tested or did not test were returned to service and installed in aircraft.
All of the cylinders were recovered and re-tested during the investigation.
This case is the product of an investigation by the U.S. Department of Transportation, Office of Inspector General. Assistant United States Attorney André M. Espinosa is prosecuting the case.
Hoose is scheduled to appear before U.S. District Judge Troy L. Nunley on September 10, 2015, for sentencing. The maximum statutory penalty for a making and using a materially false writing concerning an aircraft part, which relates to the aviation quality of a part installed in an aircraft, is 15 years in prison. 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.
Pasco Man Sentenced to More Than 7 ½ Years’ Prison for Possession of a FirearmRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Victor Manuel Angulo, age 36, of Pasco, Washington, was sentenced today after having been found guilty after a jury trial of being a felon in possession of a firearm and ammunition. Senior United States District Court Judge Edward F. Shea sentenced Angulo to a 92-month term of imprisonment and a three-year term of court supervision following release from federal prison.
Angulo was previously convicted of felony drug charges, specifically two counts of Delivery of Cocaine in 2000 in Franklin County Superior Court, for which he was sentenced to 21 months of imprisonment. In October of 2013, Angulo was convicted in Pasco Municipal Court of Assault-Domestic Violence against his former girlfriend, for which he subject to a no-contact order with his former girlfriend. According to testimony at trial, Angulo arrived at his former girlfriend’s home in Pasco, on the night of December 24, 2013, and let himself into her house when she was not there. Her parents arrived at the residence and found Angulo in her home at midnight, with a firearm. When his former girlfriend’s family called the police, Angulo fled out the backdoor of the residence and discarded the firearm in a neighbor’s trashcan prior to being apprehended by the responding Pasco Police Department officers. When arrested, Angulo had ammunition in his pocket and the Pasco Police officers located the discarded firearm.
According to information disclosed during court proceedings, at the time Angulo possessed the firearm, he was federally prohibited from possessing a firearm on four grounds: Angulo was a felon, Angulo had been convicted of a misdemeanor domestic violence assault offense, Angulo was subject to a no-contact order, and Angulo was a regular methamphetamine user.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, “Convicted felons, particularly those with domestic violence convictions and subject to no-contact orders, who violate those no-contact orders while possessing firearms, are particularly dangerous. Federal and local law enforcement officers are committed to protecting the community from such offenders. This case is just one example of the successful cooperation of the ATF and the Pasco Police Department to reduce gun-related violence in our community.”
The investigation was conducted by the Pasco Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Mary K. Dimke, Assistant United States Attorney for the Eastern District of Washington, and Brian Hultgrenn, a Special Assistant United States Attorney, from the Franklin County Prosecutor’s Office.
Owners and Chiropractor Indicted in Alleged Nationwide Worker’s Compensation Fraud SchemeRead the Press Release
HOUSTON – The owners and others associated with Team Work Ready (TWR) have been charged in a conspiracy involving health care fraud and money laundering, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Max Eamiguel, U.S. Postal Service - Office of Inspector General (USPS-OIG), Southern Area Field Office, Special Agent in Charge David C. Wickersham, U.S. Department of Labor - Office of Inspector General (DOL-OIG), Office of Labor Racketeering and Fraud Investigations and Special Agent in Charge Lucy Cruz of IRS - Criminal Investigation (IRS-CI). TWR has clinics in five States including Federal Work Ready in Houston, Alamo Work Ready in San Antonio and Bayou Work Ready in New Orleans, Louisiana.
The 20-count indictment was returned June 30, 2015, and unsealed as chief financial officer Pam Rose, 53, and rehabilitation director chiropractor Hugo Jaime, 42, made their initial appearances before U.S. Magistrate Judge Frances Stacy this afternoon. CEO Jeff Rose, 52, and vice president of operations Frankie Sanders, 53, are expected to turn themselves in to authorities tomorrow and to make their initial appearances before Judge Stacy. All of the defendants reside in Houston.
“Today’s arrests should send a clear message to all health care providers that workers’ compensation fraud is a federal crime that carries serious consequences and will not be tolerated,” said Eamiguel. “The USPS-OIG, along with our law enforcement partners, will continue to aggressively investigate those who engage in fraudulent activities intended to defraud federal benefit programs and the Postal Service.”
According to the indictment, Jeffrey Rose, Sanders and Jamie conspired to submit false and fraudulent claims for health care benefits to the Federal Employees Compensation Act, through the Department of Labor - Office of Worker’s Compensation (OWCP). The defendants allegedly submitted claims for one-on-one physical therapy when patients were playing a Nintendo Wii™ game, sitting in an electronic massage chair, independently using treadmills and bicycles, playing water volley ball and watching television. The indictment further alleges the defendants received payments for sending patients to physicians, including a surgeon with unsteady hands, and providers of diagnostic services.
“The Office of Inspector General will continue to work cooperatively with our law enforcement partners to investigate these types of allegations,” said Wickersham.
The indictment alleges that between January 2011 and June 2015, TWR submitted at least $6,787,058 in false and fraudulent claims to the OWCP and received $5,656,778 as payment for the claims. Within the same indictment, it is also alleged that Jeffrey Rose and Pamela Rose conspired to conceal and disguise approximately $700,000 in payments from OWCP when federal search warrants were executed on TWR clinics in July 2013.
“The IRS will continue to focus efforts on financial investigations that involve egregious victimization of the health care system,” said Cruz.
Conspiracy to commit health care fraud, health care fraud and engaging in a monetary transaction in criminally derived property carries a possible sentence of up to 10 years in federal prison and a possible $250,000 fine. The sentence for a conviction of money laundering is up to 20 years in prison and a fine of either $500,000 or twice the value of the property involved in the money laundering.
This case was the result of a joint investigation with USPS-OIG, DOL-OIG, IRS-CI, Department of Veterans Affairs – OIG and Department of Homeland Security - Office of Inspector General. Assistant United States Attorney Julie Redlinger is prosecuting the case.
Ohio woman charged with making false statement to FDICRead the Press Release
A criminal information was filed charging Sharon E. Piper, 55, of Columbus Grove, Ohio, with making a materially false statement relating to a matter within the jurisdiction of the Federal Deposit Insurance Corporation, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Piper worked as the head teller for the Union Bank Company at its Columbus Grove branch. In 2010, she falsely stated the vault at the bank was in balance when she knew it was missing $145,000 in currency, according to the information.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation, Lima, Ohio. The case is being handled by Assistant United States Attorney Gene Crawford.
An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Ohio Insurance Salesman Indicted for Tax Evasion Spanning More than 10 YearsRead the Press Release
A Parma, Ohio, resident was indicted by a grand jury sitting in Cleveland in the Northern District of Ohio for one count of tax evasion of payment for conduct spanning from 2001 through 2015, and five counts of failure to file federal income tax returns for tax years 2008 through 2012, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.
According to the allegations in the indictment, John Christopher Raschella worked as an insurance salesman, and also had a degree in accounting and had previously worked as a tax return preparer. From 1989 through 2012, Raschella earned substantial income and failed to file timely federal income tax returns with the Internal Revenue Service (IRS) to report his insurance commissions as an independent contractor and other income that he earned in those years. Even after Raschella received notices from the IRS indicating that he owed taxes, he failed to pay the amounts due. From 1989 through 1991, 1993 through 1999, and 2001 through 2010, Raschella also delinquently filed tax returns on which he reported that he owed income taxes. However, even in the 1992, 2000, 2011 and 2012 tax years, Raschella failed to pay all of the taxes due and owing, and the delinquent tax returns for some of those years contained false statements about Raschella’s home address, marital status, gross receipts and business expenses.
The indictment further alleges that beginning in or around 2001, the IRS attempted to collect Raschella’s unpaid taxes by levying his bank accounts and insurance commissions. In response to these actions, Raschella took steps to obstruct the IRS’ collection efforts. He attempted to assign his insurance commissions to third parties, including nominee corporations that he established in Nevada and Utah. He also directed that his insurance commissions be deposited into the bank account of his girlfriend, and leased and purchased three luxury vehicles that he registered in nominee names. In or around 2010, Raschella caused an individual in the state of Texas to submit a fraudulent IRS Form for Release of Levy/Release of Property from Levy, to the company for which Raschella sold insurance in an effort to reduce the amount of money that the insurance company paid over to the IRS pursuant to a levy.
If convicted, Raschella faces a statutory maximum sentence of five years in prison and a $250,000 fine for the tax evasion count, and a statutory maximum sentence of one year in prison and a $100,000 fine for each count of failure to file tax returns.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated this case, and Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan of the Tax Division, who are prosecuting this case. Ciraolo also thanked the U.S. Attorney’s Office of the Northern District of Ohio for providing substantial assistance.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
New Orleans Woman Sentenced for Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that SYLVIA CHESTNUT, age 37, of New Orleans, was sentenced today after pleading guilty to a one-count Bill of Information charging her with stealing property from a Navy Exchange Store in Florida.
U.S. District Judge Lance M. Africk sentenced CHESTNUT to sixty days imprisonment, followed by three years of supervised release. Additionally, CHESTNUT was ordered to pay full restitution to the Navy Exchange.
According to court documents, between November 12, 2011 and December 18, 2011, CHESTNUT wrote 43 worthless checks totaling $20,549.36 to two Naval Exchange Stores located at the Naval Air Station in Jacksonville, Florida, and Naval Station Mayport, Florida. CHESTNUT used the worthless checks to purchase clothing, household items, pre-paid Visa cards, and other personal items.
U.S. Attorney Polite praised the work of the Naval Criminal Investigative Service (NCIS), in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis and Assistant U.S. Attorney Kevin Frein of the United States Attorney’s Office for the Middle District of Florida were in charge of the prosecution.
Multi-state cargo theft ring busted in Southern IndianaRead the Press Release
New Albany – United States Attorney Josh J. Minkler announced the unsealing of a twenty-three count indictment charging eight individuals in an organized scheme to steal tens of millions of dollars in merchandise from shipments of cargo moving through the state of Indiana and elsewhere.
“Interfering with interstate commerce is a crime that affects us all through higher consumer prices and the disruption of product supply to retail outlets,” said Minkler. “Those who choose to engage in this type of theft will be held strictly accountable.”
This indictment is the culmination of a joint, multi-year investigation involving the Federal Bureau of Investigation, Kentucky State Police, Louisville (KY) Metropolitan Police Department, Wythe County (VA) Sheriff’s Department, Indiana State Police, Illinois State Police, Virginia State Police, Georgia Bureau of Investigation, Fayette County (OH) Sheriff’s Department, Oklahoma City (OK) Police Department, and the Tennessee Highway Patrol, among others. Two private entities, CargoNet and the National Insurance Crime Bureau, also significantly assisted in the investigation.
As alleged in the indictment, between August of 2012 and May of 2015,
CARLOS ENRIQUE FREIRE-PIFFERRER, 36, Louisville,
JUAN PEREZ-GONZALEZ, 41, Louisville,
EDUARDO HERNANDEZ, 52, Miami,
MARIO HERNANDEZ-OQUENDO, 37, Miami,
YOEL PALENZUELA-MENDEZ, 40, Miami,
ORLIS MACHADO-CANTILLO, 44, Louisville,
MIGUEL MOMPIE, 47, Louisville,
RITZY ROBERT-MONTANER, 25, Louisville,
conspired to and stole millions of dollars in cargo being transported in interstate commerce by semi-tractor trailers. The group would then transport the stolen merchandise to locations in Kentucky, New Jersey, Florida, and elsewhere, and sell the stolen merchandise for financial gain.
In carrying out the wide-ranging scheme, it is alleged that the defendants and their co-conspirators traveled from various locations throughout the United States to Virginia, Illinois, Indiana, Kentucky, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, and other states to steal products that were being shipped in interstate commerce. Specifically, it is alleged that the defendants surveyed distribution facilities used by various national companies to ship their products. The defendants would then locate and follow semi-tractor trailers leaving the distribution facilities until the driver of the cargo load would stop to rest or refuel his/her truck. The defendants would then act in concert to steal the entire semi-tractor and trailer loaded with merchandise.
In many cases, the defendants would abandon the stolen tractor a short distance away after attaching the stolen trailer to a tractor owned/operated by one of the members of the theft group. Many times the defendants would quickly paint over any logos on the stolen trailer in an effort to conceal the identity of the trailer and evade law enforcement detection.
According to the indictment, on 11 separate occasions this group stole cargo loads traveling within the Southern District of Indiana and/or used interstate highways within the district to transport the stolen merchandise to other states. Stolen cargo shipments are alleged to have included computers and computer equipment, cellular telephones, electronics, appliances, perfume, cosmetics, clothing, baby formula, and tires. The value of merchandise stolen from or unlawfully transported through Indiana alone is alleged to exceed $17.5 million.
“This case not only emphasizes the cooperation between federal, state and local law enforcement agencies to investigate and prosecute those who engage in this type of crime, but also reveals the damaging effects of such crimes on our community which will not be tolerated,” said Special Agent in Charge of the Indianapolis FBI, W. Jay Abbott.
According to Assistant United States Attorney Matthew J. Rinka, who is prosecuting this case for the government, Ritzy Robert-Montaner, Mario Hernandez-Oquendo, and Eduardo Hernandez have been arraigned on the charges in New Albany before U.S. Magistrate Judge Van T. Willis. The remaining defendants will be arraigned at a later date.
The defendants face sentences of up to 10 years imprisonment for each count of possession or transportation of stolen goods in interstate commerce, and up to five years on the conspiracy charge. The defendants also face up to three years of supervised release following any term of imprisonment.
An Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Missouri City Woman Admits to Stealing More Than $1 Million from Former EmployerRead the Press Release
HOUSTON - Michelle Robyn Freytag, 47, of Missouri City, has pleaded guilty to defrauding her former employer - a Houston businessman - of more than $1.3 million, announced U.S. Attorney Kenneth Magidson.
Freytag was hired in April 2009 to be her employer’s executive assistant. As part of her guilty plea today, she has admitted that as early as August 2009, she began misusing her position and her access to his credit card and banking information. She arranged for credit cards to be assigned in her name but under her employer’s various accounts at Whitney National Bank. As the executive assistant, Freytag was able to arrange for her personal expenditures to be satisfied with monies from bank accounts assigned to her employer or his other companies.
Over the next four years, Freytag repeated this process and obtained, without authorization from her employer, at least four additional Whitney Bank credit cards in his name, his spouse’s name and in the name of two of his other companies. Freytag obtained these credit cards by falsely representing to Whitney Bank that her employer had authorized the issuance of these cards or by falsely representing that certain previously issued credit cards had allegedly been lost and that replacements were requested by her employer or his spouse. Freytag used these credit cards to take cash advances and to make personal expenditures. She would then cause these cash advances and personal expenditures to be satisfied with monies from bank accounts assigned to her employer or his other businesses.
According to the plea agreement, Freytag’s unauthorized cash advances and personal expenditures between August 2009 and January 2014, when her scheme was discovered, totaled approximately $1.3 million.
U.S. District Judge Keith P. Ellison accepted the guilty plea on one count of wire fraud today and has set sentencing for Sept. 29, 2015. At that time, Freytag faces up to 20 years in federal prison and a possible $250,000 maximum fine.
The investigation was conducted by the FBI. Assistant U.S. Attorney Jason Varnado is prosecuting the case.
Methamphetamine and Heroin Traffickers Ordered to PrisonRead the Press Release
LAREDO, Texas – A total of four drug traffickers have been sentenced for their convictions related to a drug trafficking conspiracy involving methamphetamine and heroin, announced U.S. Attorney Kenneth Magidson.
Santos Arturo Ortiz, 28, Armando Bautista Jr., 30, Kenneth John Swisher, 56, and Alan Salinas, 28, all of Laredo, all previously pleaded guilty for their criminal conduct as did Juan Uxmal Villegas, 36, of San Antonio.
Today, U.S. District Judge Marina Garcia Marmolejo handed Ortiz a sentence of 168 months in federal prison to be followed by five years of supervised release. Bautista and Salinas were also sentenced today to respective sentences of 120 and 124 months imprisonment and five years of supervised release. Swisher was sentenced earlier this week to a 120-month-term of imprisonment for his role in the conspiracy. Villegas will be sentenced Monday, July 13, 2015.
At the hearing, one of the defendants stated that “it was easy money.” In response, Judge Marmolejo noted “I hope that you come to the point in your life that you never consider transporting narcotics easy money.”
Ortiz would receive methamphetamine and heroin from an employee at a downtown Laredo fast food restaurant. The drugs would then be transported by co-conspirators to San Antonio where Villegas would distribute the narcotics in the local area.
Swisher was permitted to remain on bond, while the remaining defendants are in custody.
The case was investigated by the Drug Enforcement Administration. Assistant U.S. Attorney (AUSA) Christopher S. Coker and former AUSA Elizabeth Rabe prosecuted the case.
Manhattan U.S. Attorney Recovers $360,000 in Civil Penalties from A Rochester Pharmaceutical Company That Violated the Controlled Substances ActRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent-in-Charge of the New York Field Division of the U.S. Drug Enforcement Administration (“DEA”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced today that the United States has filed and settled a civil lawsuit against ROCHESTER DRUG COOPERATIVE, INC., (“RDC”), a Rochester, New York, pharmaceutical distributor of controlled substances. Under the settlement, RDC admitted and accepted responsibility for numerous violations of the Controlled Substances Act (the “CSA” or the “Act”), and agreed to pay $360,000 in penalties and to re-submit to DEA corrected record-keeping reports required by the CSA. The settlement agreement, in the form of a consent order, was approved today in Manhattan federal court by United States District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara stated: “Pharmaceutical distributors are supposed to be one of the first lines of defense in the growing oxycodone epidemic. Today’s consent order demonstrates that distributors that do not properly track and report the purchase and sale of drugs with a high potential for abuse will be held accountable.”
DEA Special Agent-in-Charge James J. Hunt said: “The Controlled Substances Act is the cornerstone of preventing prescription drug diversion and drug abuse. Today’s announcement has a dual purpose; to remind pharmaceutical distributors of their reporting requirements, and to reiterate law enforcement’s ongoing efforts to curtail opioid abuse throughout our nation.”
Commissioner William J. Bratton said: “The law mandates that pharmaceutical companies track their distribution of controlled substances, allowing law enforcement to investigate and stop the exploitation of highly addictive prescription drugs, especially those which have led to numerous opioid addictions and overdose deaths. The NYPD, along with our law enforcement partners, remain committed to stopping the distribution of illegal narcotics.”
According to the Complaint filed in federal court: The CSA creates a comprehensive distribution and monitoring system for those authorized to handle controlled substances, at the heart of which are registration and tracking requirements. The DEA tracks the commercial distribution of substances with a high potential for abuse through its Automation of Reports and Consolidated Orders System, or “ARCOS.” The Complaint alleges that, following an audit of various pharmacies in the New York City area, the DEA discovered that the pharmacies had reported thousands of purchase orders from RDC that RDC did not correspondingly report to the DEA through ARCOS. In response, in 2013, the DEA’s New York Field Division Tactical Diversion Squad conducted an on-site investigation and audit at RDC’s headquarters in Rochester, New York. The DEA’s audit confirmed that RDC’s ARCOS reporting system was underreporting many thousands of drug sales to pharmacies throughout the northeast region.
RDC responded that it expected to be able to resolve this issue through the pending acquisition of a new computer ordering system. But in 2014, DEA re-assessed RDC’s compliance, and discovered that RDC had not implemented the new order system. As a result, RDC’s failure to electronically report thousands of shipments of CSA-controlled substances, including Oxycodone and its variants, continued. During this time, the DEA also determined that RDC had failed to report the theft or significant loss of controlled substances in ARCOS, as required by the CSA and its implementing regulations.
In the settlement agreement, RDC admitted that between July 2013 and July 2014, it failed to report any electronic distribution transactions in its DEA ARCOS reports, and admitted that between July 2012 and July 2014, it failed to provide the required theft or significant loss reporting in ARCOS to the DEA. Under the Consent Order, RDC must pay $360,000 in civil penalties to the United States and reconstruct complete and correct historical ARCOS data for the last five years for submission to the DEA.
Mr. Bharara praised the DEA New York Division Tactical Diversion Squad for their invaluable work on this case. The DEA Tactical Diversion Squad comprises agents, investigators, and officers from the DEA, the New York City Police Department, the Orangetown Police Department, and the Westchester County Police Department.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the case.
Man Sentenced to 78 months for Possessing, Sharing Child PornographyRead the Press Release
Memphis, TN – A 24-year-old man in Halls, Tennessee has been sentenced to 78 months in prison for possessing and distributing child pornography.
According to a federal indictment, on August 30, 2012, Lindell "Logan" Luck intentionally distributed computer images and video files of minors engaging in sexually explicit conduct. Luck downloaded and shared the images using his ASUS Notebook computer.
According to statements made in court, Memphis Child Exploitation Task Force agents signed into a peer-to-peer file sharing network to identify potential program users who may have been in possession of or sharing child pornography. This file sharing network enabled users to exchange digital music, images, and videos directly without going through central servers. A program user could search for files made available by all other users, browse all files made available by a particular user, and download desired files.
While using the network, agents performed a "browse request" and received a response from an IP address associated with a computer later determined to be at Luck’s residence in Halls, Tennessee, according to court statements. Law enforcement officials discovered that the computer contained multiple files depicting minor children engaged in sexually explicit conduct.
On October 24, 2012, police officers executed a search warrant and seized Luck’s computer. A forensic examination revealed that the device contained visual depictions of minors under the age of 12 engaging in sexually explicit conduct as well as other child pornographic files.
Luck was charged with one count of distribution of child pornography and two counts of possession of child pornography. This week, he was sentenced to 78 months imprisonment and five years of supervised release by Judge Samuel H. Mays.
The case was investigated by the Department of Homeland Security and the Federal Bureau of Investigation. Both agencies are members of the Memphis Child Exploitation Task Force. Assistant U.S. Attorney Leetra Harris prosecuted the case on the government’s behalf.
Little Rock Man Arrested in Ongoing Scheme to Steal Feeding Program FundsRead the Press Release
LITTLE ROCK – Another feeding program sponsor has been indicted for his role in a scheme to steal federal money. Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced that Michael R. Lee, age 24, of Little Rock, was arrested Wednesday following the filing of a 20-count indictment.
The indictment, returned by a Federal Grand Jury on July 7, 2015, charges Lee with 20 counts of wire fraud as part of a scheme to fraudulently obtain United States Department of Agriculture (USDA) program funds. Lee appeared Thursday, July 9, 2015, before United States Magistrate Judge J. Thomas Ray and was released on bond.
According to the indictment, the USDA funds the Child and Adult Care Feeding Program, which includes an at-risk after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. Once approved, they can provide meals as part of the feeding program and be reimbursed based on the number of eligible meals they serve.
The indictment states that Lee operated as a sponsor for a feeding program through an organization called Our Children of Tomorrow. It alleges that a relative of Lee worked for DHS and processed applications from sponsors applying to participate in the feeding programs.
Lee applied with DHS to participate as a sponsor and then had his relative at DHS approved his applications. The indictment states that Lee falsely represented his average daily attendance and greatly inflated the number of meals provided. At one location, he reported attendance ranging from 115 to 450 children, when no more than 25-30 children 425 West Capitol Avenue, Suite 500 (501) 340-2600 Post Office Box 1229 Little Rock, Arkansas 72203-1229 were ever seen there. At another location, Lee reported between 76 to 350 children, but no children were seen at that feeding site.
The statutory penalty for wire fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than three years’ supervised release.
The investigation is ongoing and is conducted by the United States Secret Service, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, United States Department of Agriculture—Office of Inspector General, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris and Allison W. Bragg.
If you are aware of any fraudulent activity regarding these feeding programs, please e-mail that information to the U.S. Attorney’s office at [email protected].”
An indictment contains only allegations. Defendants are presumed innocent until proven guilty.
Large-Scale Multi-State Methamphetamine Organization Members Plead Guilty to ConspiracyRead the Press Release
BOISE – Maribel Betancourt, 41, of Meridian, Idaho, pleaded guilty yesterday to conspiracy to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. Betancourt is scheduled to be sentenced before Chief U.S. District Judge B. Lynn Winmill on September 29, 2015. Conspiracy to distribute methamphetamine is punishable by up to 20 years imprisonment, a $1,000,000 fine, and at least three years of supervised release. Betancourt has also agreed to forfeit $2,000 in cash proceeds.
Betancourt and thirteen co-defendants were charged on February 10, 2015, in a ten count indictment alleging conspiracy to distribute methamphetamine, distributing methamphetamine, possession with intent to distribute methamphetamine, and possession of a firearm in furtherance of a drug trafficking crime. According to court documents, the conspiracy was responsible for bringing over 4.5 kilograms of high purity methamphetamine from California to Idaho from August 2014, to January 2015.
Co-defendants Jose Luis Corrales Cruz, 58, of Ramona, California; Juan Navarrete, 19, of Ontario, Oregon; and Jorge Sandoval, 21, of Placentia, California, pleaded guilty in June to conspiracy to distribute more than 500 grams of methamphetamine and agreed to forfeit $100,000 in cash proceeds. Conspiracy to distribute more than 500 grams of methamphetamine is punishable by at least 10 years in prison and not more than life, a $10,000,000 fine, and at least five years of supervised release. Ruby Martinez, 41, of Nampa, Idaho; Marco Antonio Tinoco, 26, of Ontario, Oregon; and Hernan Arteaga-Solchaga, 23, of Nampa, Idaho, pleaded guilty earlier this month to conspiracy to distribute methamphetamine. Martinez and Arteaga-Solchaga agreed to forfeit $2,500 in cash proceeds, while Tinoco agreed to forfeit $4,500. The six of the above defendants are set for sentencing in September 2015.
Oscar Adan Jaimez-Munoz, 35, of Placentia, California; Ruben Rangel Perez, 34, of Placentia, California; Rafael Sotero Lopez-Vasquez, 43, of Nampa, Idaho; and Andres Navarrette, Jr., 26, of Ontario, Oregon, have change of plea hearings later this month. Carmen J. Gomez-Rangel, 49, of Nampa, Idaho, remains a fugitive.
Francisco Sandoval, 60, of Placentia, California, and Horacio Linares, 47, of Anaheim, California, are currently set for trial on November 16, 2015, before Judge Winmill.
This case was investigated by the Drug Enforcement Administration, the Ada County Sheriff’s Office, the Boise Police Department, the Meridian Police Department and the Nampa Police Department, as well as the Organized Crime and Drug Enforcement Task Force (OCDETF), which includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Kansas Prescription Drug Case Has Sent 23 Defendants to Federal PrisonRead the Press Release
KANSAS CITY, KAN. B Federal prosecutors have wrapped up the prosecution of a former Lenexa, Kan., doctor accused of diverting prescription painkillers to a network of users and distributors on the streets of the Kansas City metro area, U.S. Attorney Barry Grissom said. On July 7, the last defendant in the case was sentenced to federal prison.
Dr. James R. Webb, 56, now living in Parkville, Mo., pleaded guilty to conspiracy to distribute oxycodone and hydrocodone. In September, he was sentenced to 12 years in federal prison. The judge entered an order of forfeiture for $7.5 million, representing the proceeds of the crime.
On Tuesday, co-defendant Michael Zona, 39, Shawnee, Kan., was sentenced to 19 months in federal prison.
In Webb’s plea, he admitted that the Drug Enforcement Administration began receiving reports in 2010 that he was selling oxycodone and hydrocodone prescriptions for cash. Webb’s so-called patients reported paying cash for their prescriptions based on the number of pills they could receive. Many of the patients were referred to Perry Drug in Overland Park, Kan.
Investigators used informants and undercover agents to make purchases from Webb. They paid Webb a fee of $870 for an office visit for a prescription for 220 oxycodone tablets, and $1,400 for a prescription for 350 tablets. Webb required they pay him in cash.
In 2011, the DEA obtained records from the Kansas Board of Pharmacy’s prescription monitoring program that identified all prescriptions Webb had issued. They used the records to identify so-called patients who frequently visited the doctor and obtained prescriptions from him for oxycodone and hydrocodone.
Defendants who have been sentenced in the case include:
James R. Webb, Jr., physician, 144 months.
Matthew R. Perry, 45, Overland Park, pharmacist, 72 months.
Gerry Divelbiss, 38, Kansas City, Kan., 72 months.
Ricky Bridges, 39, Kansas City, Kan., 78 months.
Jenna Utterback, 30, Kansas City, Mo., 16 months.
Eric Halbin, 37, Overland Park, Kan., 42 months.
Lacy Mae Morrison, 31, Gardner, Kan., 12 months and a day.
Phil Scimeca, 51, Liberty, Mo. 72 months.
Jamie Eberra, 29, Kansas City, Mo., two years probation.
Regina Ann Miranda, 45, Kansas City, Mo., 12 months and a day.
Larry Lee Ray, 35, Kansas City, Mo., 72 months.
Nick Johnson, 34, Lees Summit, Mo., 34 months.
Joshua Brown, 27, Liberty, Mo., 72 months.
Juan Gutierrez, 39, Kansas City, Mo., 47 months.
Wade Becker, 28, Kansas City, Mo., two years probation.
Beau Berry, 31, Grain Valley, Mo., 42 months.
Luke Dearinger, 35, Gladstone, Mo., 52 months.
Michael Zona, 39, Shawnee, Kan., 19 months.
Jessica Rankin, 40, Shawnee, Kan., 10 months.
Thomas O’Toole, 25, Blue Springs, Mo., 24 months.
Scott Moore, 31, 38 months.
Erica Wikel, 29, 12 months and a day.
Louis Scimeca, 44, 47 months.
Martin Leahy, 53, 42 months.
Tish Waller, 33, 42 months.
Grissom commended the Drug Enforcement Administration, the Lenexa Police Department, the Overland Park Police Department, the Johnson County Sheriff’s Department, the Salina Police Department, the Republic County Sheriff’s Department, the Excelsior Springs, Mo., Police Department and Special Assistant U.S. Attorney Trent Krug for their work on the case.
Kansas City Area Business Owner Indicted in 2014 Indicted Again on Bank FraudRead the Press Release
KANSAS CITY, KAN. - A Kansas City area business owner indicted in 2014 on federal bank fraud charges has been indicted again on charges of committing financial crimes while awaiting trail, U.S. Attorney Barry Grissom said today.
Brenda Wood, 47, Leavenworth, Kan., was indicted in August 2014 on ten counts, including five counts of bank fraud, one count of theft from an employee benefit program and four counts of violating the Employee Retirement Income Security Act. On Wednesday, a federal grand jury returned an indictment adding 16 counts, including eight counts of bank fraud, seven counts of aggravated identity theft and one count of committing a felony while on pretrial release in a federal case.
Allegations in the new indictment include:
- Wood ran a check kiting scheme by opening checking accounts in the names of various businesses and exchanging and cross depositing checks among them.
- Wood used another person’s Social Security number to open a checking account for a business named “Everything Real Estate, Inc.”
- Wood used another person’s Social Security number to open a checking account for a business named “20 W 9th, LLC.”
- Wood used another person’s identity to obtain an American Express card.
- Wood used another person’s Social Security number to open a checking account for a business called “Shelter Management, LLC.”
- Wood provided false information in an application for a loan from Merchant from Merchant Advance Express.
- Wood provided false information in an application for a loan from US Funding.
- Wood used another person’s Social Security number to open a checking account for a company doing business as “Action Real Estate Services.”
Upon conviction the crimes carry the following penalties:
Bank fraud: A maximum penalty of 30 years and a fine up to $1 million on each count.
Theft from an employee benefit program: A maximum penalty of five years and a fine up to $250,000.
Violation of the Employee Retirement Income Security Act: A maximum penalty of 10 years and a fine up to $250,000.
Aggravated identity theft: A mandatory two years to be served consecutively and a fine up to $250,000 on each count.
Wire fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.
Committing a felony while on release: A maximum penalty of 10 years and a fine up to $250,000.
The Department of Labor, Office of Inspector General, the Special Investigator General for the Troubled Asset Relief Program, the Department of Labor Employee Benefits Security Administration and the FBI investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
OTHER GRAND JURY INDICTMENTS
Clifford C. Copp, 58, Overland Park, Kan., who owned Copp Trucking Co. in Kansas City, Kan., has been indicted on a federal tax evasion charge. The company closed in 2001.
The indictment alleges that while Copp Trucking was in business the defendant was responsible for paying quarterly employment taxes for the company. In 2001, he filed reports to the IRS indicating the company owed approximately $939,408 in employment taxes for that year. However, the company did not pay the employment taxes due.
In February 2004 he was assessed trust fund recovery penalties of $669,037. Since then he has provided false information to the IRS. He failed to accurately disclose his monthly income, concealed assets, and placed funds and property in the names of nominees.
If convicted, he faces a maximum penalty of five years in federal prison and a fine up to $250,000. The Internal Revenue Service investigated. Assistant U.S. Attorney Chris Oakley is prosecuting.
Dustin E. Ash, 35, Kansas City, Kan., is charged with two counts of unlawful possession of a firearm following a felony conviction. The crimes are alleged to have occurred June 16, 2015, and June 26, 2014, in Kansas City, Kan.
If convicted, he faces a maximum penalty of life in federal prison and a fine up to $250,000 on each count. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Terra Morehead is prosecuting.
Oliver Kimbrel, 53, Kansas City, Kan., is charged with three counts of possession with intent to distribute crack cocaine, one count of maintaining a residence in furtherance of drug trafficking, and one count of unlawful possession of a firearm following a felony conviction. The crimes are alleged to have occurred in February and March 2014 in Kansas City, Kan.
Upon conviction, the crimes carry the following penalties:
Possession with intent to distribute crack cocaine: A maximum penalty of 20 years in federal prison and a fine up to $1 million on each count.
Maintaining a residence in furtherance of drug trafficking: A maximum penalty of 20 years and a fine up to $500,000.
Unlawful possession of a firearm following a felony conviction: Not less than 15 years and a fine up to $250,000.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Special Assistant U.S. Attorney James Ward is prosecuting.
Yazmin Azucena Maldonado Ballesteros, 38, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported and one count of using another person’s Social Security number. The crimes are alleged to have occurred in 2012 and 2015.
If convicted, he faces a maximum penalty of 20 years and a fine up to $250,000 on the unlawful re-entry charge, and a mandatory two years to be served consecutively and a fine up to $250,000 on the identity theft charge. The Department of Homeland Security investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Justin Brouillette Facing Federal Carjacking and Firearms ChargesRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez, Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Gorden Eden, Jr., of the Albuquerque Police Department (APD) announced today that Justin Brouillette, 21, of Albuquerque, N.M., has been charged with federal carjacking and firearms offenses. Brouillette’s initial appearance in federal court has not yet been scheduled.
Earlier today, the United States filed a criminal complaint alleging that Brouillette committed the following three crimes in Bernalillo County, N.M., on July 8, 2015: (1) attempted carjacking, (2) using and brandishing a firearm during and in furtherance of a crime of violence, and (3) being a felon in possession of a firearm and ammunition. Brouillette was prohibited from possessing firearms or ammunition because of his status as a convicted felon. Court records reflect that Brouillette has two felony convictions for receiving or transferring stolen vehicles in the Second Judicial District Court for the State of New Mexico in Bernalillo County.
According to the criminal complaint, Brouillette allegedly used a firearm yesterday afternoon to shoot at APD officers as they attempted to execute a traffic stop on Brouillette as he was driving in southeast Albuquerque. It further alleges that shortly thereafter Brouillette crashed his vehicle into another vehicle (the Ford), and then attempted to carjack the Ford by brandishing a firearm at the Ford’s owner and ordering him out of the car. While Brouillette was allegedly attempting to carjack the Ford, APD officers drove into the area and Brouillette allegedly fled on foot after discharging the firearm at the officers for a second time. APD officers arrested Brouillette late yesterday afternoon and retrieved the firearm allegedly used by Brouillette to shoot at the officers.
If convicted on the charges in the criminal complaint, Brouillette faces a statutory maximum penalty of 15 years in prison on the attempted carjacking charge, and a statutory maximum penalty of ten years in prison for being a felon in possession of a firearm. If convicted for brandishing a firearm in furtherance of a crime of violence, Brouillette faces a statutory mandatory minimum of seven years and a maximum of life in prison which must be served consecutive to any sentence imposed on the other two charges. Charges in criminal complaints are mere accusations. Defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the ATF office in Albuquerque and APD. Assistant U.S. Attorney Presiliano A. Torrez is prosecuting the case as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
brouillette_complaint.pdf (246.78 KB)
Justice Department Announces Two Banks Reach Resolutions under Swiss Bank ProgramRead the Press Release
Banque Pasche SA Will Pay $7.229 Million Penalty and ARVEST Privatbank AG Will Pay $1.044 Million Penalty; Both Continue to Cooperate With Department of Justice
The Department of Justice announced today that two banks, Banque Pasche SA and ARVEST Privatbank AG, have reached resolutions under the department’s Swiss Bank Program.
“Banque Pasche and ARVEST have provided detailed information regarding the ways in which Swiss banks helped U.S. taxpayers conceal foreign accounts and evade their U.S. tax obligations, including through the use of numbered and coded accounts and sham offshore entities,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division. “As required under the program, these banks will continue to cooperate as we aggressively pursue those individuals and the professionals who facilitated their criminal conduct.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
Banque Pasche SA is headquartered in Geneva, Switzerland, and owns and controls a group of companies in various jurisdictions, including Monaco and the Bahamas. From at least August 2008 to August 2013, Banque Pasche assisted certain U.S. taxpayers in evading their U.S. taxes and filing obligations, filing false income tax returns with the IRS and hiding offshore assets from the IRS.
Banque Pasche offered a variety of traditional Swiss banking services that it knew could and did assist U.S. taxpayers in concealing assets and income from the IRS. For example, Banque Pasche offered hold mail service, as well as code name or numbered account services. These services allowed certain U.S. taxpayers to minimize the paper trail associated with their undeclared assets and income.
Banque Pasche also permitted certain U.S. taxpayers to open accounts held in the name of sham, conduit or nominee offshore structures where the U.S. taxpayer’s interest in the account was not reported to the IRS. With respect to these accounts, Banque Pasche would obtain from the entity’s directors an IRS Form W-8BEN (or equivalent bank document) that falsely declared that the beneficial owner was not a U.S. taxpayer. As of Dec. 31, 2008, Banque Pasche had U.S.-related accounts held by entities created in Panama or the British Virgin Islands with U.S. beneficial owners. The majority of these accounts had false IRS Forms W-8BEN in the file.
Banque Pasche also opened accounts for U.S. taxpayers who had left other Swiss banks that were being investigated by the department, including UBS and Credit Suisse. Banque Pasche knew or should have known that the beneficial owners of the majority of these accounts were attempting to evade U.S. tax and foreign account reporting requirements. Many of these accounts were held by Panamanian corporations with U.S. beneficial owners. Some of these accounts were managed by a particular Geneva-based attorney who held a power of attorney over them. When these accounts were subsequently closed, the assets were transferred to banks located in Israel and Hong Kong in an attempt to further escape detection from U.S. authorities.
Banque Pasche has fully cooperated with the department during its participation in the Swiss Bank Program. For example, it described in detail the structure of its business with U.S. persons, which included the policies concerning U.S. accountholders. Banque Pasche also provided the names of members of its management committee and information about its relationships with external asset managers.
Since Aug. 1, 2008, Banque Pasche had 186 U.S.-related accounts, as defined under the Swiss Bank Program, with an aggregate maximum balance of approximately $655 million. Of these 186 accounts, 110 had U.S. beneficial owners and an aggregate maximum balance of approximately $111 million. Banque Pasche will pay a penalty of $7.229 million.
ARVEST Privatbank AG was a private bank headquartered in Pfaffikon, Switzerland. It provided portfolio management and related private banking services primarily to high net worth clients. On April 15, 2015, it ceased being a licensed Swiss bank.
ARVEST opened, maintained and serviced accounts for U.S. persons that it knew or had reason to know were likely not declared to the IRS or the U.S. Department of the Treasury, as required by U.S. law. The bank helped clients set up entities, including trusts and foundations, in Liechtenstein, St. Kitts and other jurisdictions, with bank representatives serving as officers of certain of these entities, and opened ARVEST accounts in the names of these entities.
For several U.S. customers, ARVEST gave the accountholders a travel debit card, which did not have a name imprinted on the card. These cards were tied to accounts that the accountholders held in their names at a third-party Swiss Bank specializing in this service.
Since Aug. 1, 2008, ARVEST had 52 U.S.-related accounts, with a maximum aggregate asset value of over $134 million. ARVEST will pay a penalty of $1.044 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“The growing number of non-prosecution agreements for the Swiss Bank Program demonstrates the DOJ and IRS resolve to make it increasingly difficult for taxpayers to leave offshore accounts undeclared,” said Deputy Commissioner Douglas O’Donnell of the IRS Large Business and International Division. “Two additional agreements by ARVEST and Banque Pasche highlight the momentum of resolving these potential criminal liabilities and eliminating institutions holding undeclared funds for U.S. account holders.”
“Today’s agreements are significant both individually and in conjunction with the previous Swiss Bank Program agreements,” said Chief Richard Weber of IRS-Criminal Investigation. “Individually, each bank agreement provides additional information to the IRS to assist us in going after illegally concealed offshore accounts and the financial professionals who helped U.S. taxpayers hide assets abroad. Collectively, the bank agreements are a testament to the progress of the Swiss Bank Program and our commitment to the ongoing work with Swiss banks still in the process.”
Acting Assistant Attorney General Ciraolo thanked the IRS, in particular, IRS-Criminal Investigation and the IRS Large Business and International Division for their substantial assistance, as well as John E. Sullivan, Thomas G. Voracek, and Brian D. Bailey, who served as counsel on these matters, Senior Litigation Counsel Nanette L. Davis, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jury Finds Sacramento Area Drug Trafficker Guilty on All CountsRead the Press Release
SACRAMENTO, Calif. — Today, after a five-day trial, a federal jury found Isreal “Puck” Washington, 41, of Sacramento, guilty of all 10 counts in the indictment for trafficking heroin, cocaine, cocaine base, and methamphetamine, United States Attorney Benjamin B. Wagner announced.
“Under the Smart on Crime initiative, the U.S. Department of Justice has refocused its narcotics prosecution efforts against the most significant and dangerous offenders.” U.S. Attorney Wagner stated. “Washington is one of those persons. This marks the end of his drug empire.”
This case is the product of an investigation by the Drug Enforcement Administration, the Sacramento County Sheriff’s Office, the Sacramento Police Department, the Vallejo Police Department, and the Sacramento County District Attorney’s Office.
According to court documents and evidence presented at trial, in 2010, Washington distributed large amounts of cocaine base, cocaine, and heroin in the Sacramento area. Washington used various businesses as a front to conceal and disguise his extensive drug trafficking and operated a large “crew” of gang members as his drug distribution organization. During an investigation in 2010 and 2011, one of Washington’s businesses, Wet Ways Auto Body and Paint Shop, was identified as a place where Washington and his associates conducted drug deals.
In 2012, an undercover operative bought heroin and methamphetamine from Washington’s organization. The drug traffickers operating under Washington included co-defendants Deyonte Spears, 27, of Oakland, and Sacramento residents Tyrone Weathersby, 47; Anthony Sanchez, 31; and Myron Meadows, 44. On May 21, 2013, the DEA served search warrants at two Sacramento-area stash pads controlled by Washington. Agents seized a stolen firearm and more than three pounds of heroin at stash pads maintained by the group.
Charges are pending in a separate indictment against Washington that stems from a 2011 homicide investigation. When deputies executed a search warrant at Washington’s residence, they discovered three semi-automatic pistols, including one with a high-capacity magazine. The indictment alleges that Washington is prohibited from possessing firearms because of four prior felony convictions for drug trafficking and assault with a deadly weapon. A status conference for that case will be set in the near future. (Docket # 2:13-cr-207 MCE)
Washington is scheduled to be sentenced on October 1, 2015, by United States District Judge Morrison C. England Jr. Washington’s co-defendants have all previously pleaded guilty. Co‑defendant Spears is scheduled to be sentenced on July 16, 2015; co‑defendant Weathersby was sentenced to 18 months in prison on October 24, 2014; co‑defendant Sanchez is scheduled to be sentenced on September 10, 2015, and co‑defendant Meadows is scheduled to be sentenced on August 13, 2015. Because of his criminal history, Washington faces a mandatory minimum sentence of 20 years in prison on each of counts two and eight. On the remaining counts, Washington faces maximum statutory penalties of up to life in prison and statutory mandatory minimum sentences of 10 years. the other defendants also face sentences of at least 10 years in prison on the counts to which they have pleaded guilty. The actual sentences, 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.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) program that was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. 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.
When prosecuted in federal court, drug traffickers typically receive much harsher sentences. In addition to the longer sentences imposed, unlike state court prisoners who are released early on parole, there is no early release on parole in the federal system.
Jury Finds Ex-Head of Johnstown Redevelopment Authority Guilty of Extortion, BriberyRead the Press Release
JOHNSTOWN, Pa. - After deliberating approximately two hours, a jury of four men and eight women found Ronald W. Repak guilty of violating federal extortion and bribery laws, United States Attorney David J. Hickton announced today, Thursday, July 9, 2015.
Repak, 63, of Johnstown, Pa, was tried before United States District Judge Kim R. Gibson in Johnstown.
According to Assistant United States Attorney Stephanie L. Haines who prosecuted the case, evidence presented at trial established that Repak, while serving as Executive Director of the Johnstown Redevelopment Authority (JRA), engaged in conduct in violation of the Hobbs Act for extortion under color of official right, and engaged in acts of federal program bribery. Specifically, in exchange for Repak’s official actions and influence as the Executive Director of the JRA to facilitate the award of JRA contracting work, Repak solicited and obtained from local contracting firms a new roof for his personal residence and building demolition and grading services at Evolution Gym, his son’s privately-owned business. He was convicted of two counts for extortion under color of official right and two counts of federal program bribery relative to the roof and the Evolution Gym. Mr. Repak was found not guilty of a charge of extortion under color of official right and federal program bribery in relation to multiple Pittsburgh Steelers football game tickets.
Judge Gibson scheduled sentencing for Dec. 8, 2015, at 10 a.m. Based upon the convictions handed down by the jury, the law provides for a maximum total sentence of 60 years in prison, a fine of $1,000,000, 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, if any, of the defendant.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation conducted the investigation that led to the prosecution of Repak.
ICE launches task force in USVI to combat child predatorsRead the Press Release
ST. THOMAS, U.S. Virgin Islands – Citing the need for a territory-wide approach to fighting the escalation of child exploitation and other predatory crimes against children, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in St. Thomas and St. Croix has partnered with members of local, state and federal law enforcement, and community leaders, to form the U.S. Virgin Islands Crimes Against Children Task Force VICACTF).
Through VICACTF, federal and local law enforcement agencies will pool their resources to jointly investigate all crimes committed against children in the USVI. Task Force members will be encouraged to share evidence, ideas and investigative and forensic tools to ensure the most successful prosecutions possible. As such, the VICACTF will allow law enforcement to speak with a unified voice to defend the children of the U.S. Virgin Islands. The VICACTF is composed of the following agencies: ICE-HSI (lead agency), U.S. Attorney’s Office, U.S. Marshals Service, the Virgin Islands Police Department, the Virgin Islands Department of Justice, U.S. Customs and Border Protection (CBP) and the Virgin Islands Department of Human Services and Family Resource Center.
Each year, millions of children fall prey to sexual predators. These young victims are left with permanent psychological, physical and emotional scars. It is one of ICE's most important missions to investigate and target those who possess, transport and produce child pornography, as well as those
who engage in child sex tourism, and those who use sex to entice minors. Based on the number of complaints received by the National Center for Missing and Exploited Children (NCMEC) CyberTipline, Internet crimes against children are rising at alarming levels.In July 2003, in an effort to put an end to this type of criminal activity and protect children worldwide, ICE developed an initiative known as “Operation Predator.” Under Operation Predator, ICE and its law enforcement partners identify, investigate and arrest child predators and sexual offenders wherever they may attempt to hide. Since the inception of Operation Predator, the number of NCMEC referrals for new child exploitation cases in ICE HSI San Juan field office area of responsibility, which includes the USVI and Puerto Rico, has reached an all-time high resulting in more than 245 arrests. This year, the number of child exploitation-related arrests has increased by 39 percent with 50 arrests thus far compared to 36 in fiscal year 2014.
“ICE HSI is pleased to lead this initiative as it shows our commitment and that of our partners to protect our children from online predators,” said Angel M. Melendez, special agent in charge of HSI Puerto Rico and the U.S. Virgin Islands. “Joint partnerships such as the VICACTF should send a clear message to those who exploit the most vulnerable segment of our society, our children, that we will not rest until they are brought to justice.”
“It is absolutely essential that members of law enforcement, social service agencies and other stakeholders work together and leverage existing resources to prevent the exploitation of children,” said U.S. Attorney Ronald W. Sharpe. “The U.S. Attorney’s Office is proud to be a part of this initiative to protect our children.”
“The Virgin Islands Department of Justice is committed to protecting the children within this community and will make every effort to prosecute identified child predators and sexual offenders. With an increase in this type of criminal activity, we must become more vigilant and use our
resources more effectively to combat crimes against children and prosecute offenders to the fullest extent of the Law,” said Virgin Islands Acting Attorney General James Carroll.“The Virgin Islands Police Department embraces the collaborative efforts of the federal and local partnerships in addressing the issues relating to crimes committed against children,” said Virgin Islands Police Commissioner Delroy Richards, Sr. “If the children are indeed our future then we must protect them from all predatory elements that seek to undermine the very laws that are enacted to shield them from those elements. Our resources must be directed to a common goal that centers on the eradication of all suspected predators in the territory. The bottom line is ‘zero’ tolerance.”
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its tollfree 24-hour hotline, 1-800-THE-LOST.
For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.
HSI is a founding member and current chair of the Virtual Global Taskforce, an international alliance of law enforcement agencies and private industry sector partners working together to prevent and deter online child sexual abuse.
# ICE #
U.S. Immigration and Customs Enforcement (ICE) is the largest investigative arm of the Department of Homeland Security. ICE is a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities. For more information, visit: www.ICE.gov. To report suspicious activity, call 1-866-347-2423.Houston Man Pleads Guilty to Conspiracy to Distribute CocaineRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BAKEER RASHED, JR., 33, of Houston, pled guilty today to a one-count superseding Bill of Information charging him with conspiring to distribute 500 grams or more of cocaine hydrochloride.
According to court documents, from July 25, 2006, through February 19, 2007, RASHED conspired to distribute more than 500 grams of cocaine hydrochloride with co-conspirators living in Louisiana. RASHED was the point of contact for facilitating numerous drug deals.
RASHED faces a sentence of not less than 5 years but not more than 40 years of incarceration, a fine of not more than $5,000,000 and supervised release of not less than 4 years. U.S. District Judge Ivan L.R. Lemelle set sentencing for October 14, 2015.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation with assistance from the St. Tammany Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Edward J. Rivera is in charge of the prosecution.
Rashed Bakeer, Jr. Factual Basis.pdf (1.93 MB)
Hood Canal Homeowner Pleads Guilty to Making False Statement to Federal AuthoritiesRead the Press Release
A Hood Canal waterfront property owner pleaded guilty today in U.S. District Court in Tacoma to the federal felony offense of making a false statement to a federal official in connection with his unlawful construction of a beachfront bulkhead, announced U.S. Attorney Annette L. Hayes. JON KOLOSKI, 74, of Potlach in Mason County, constructed the bulkhead in September 2011, without the appropriate permit from the U.S. Army Corps of Engineers. KOLOSKI had been told by both Mason County officials and the Corps that he needed the federal permit to construct the bulkhead. After he failed to complete the permit process, and after the new bulkhead had been installed, KOLOSKI falsely told the U.S. Army Corps of Engineers via email that he no longer needed the permit as he was not going to replace the previously existing bulkhead. A subsequent inspection by the Corps of Engineers revealed the bulkhead had already been constructed and was in violation of federal and state rules. KOLOSKI is scheduled to be sentenced by U.S. District Judge Benjamin H. Settle on October 5, 2015.
“Not only did this defendant knowingly proceed without a permit, he lied to federal officials in an effort to hide his wrongdoing,” said U.S. Attorney Annette L. Hayes. “These lies made it harder to protect the environment that we so cherish here in the Pacific Northwest and violated the public trust.”
According to the plea agreement, KOLOSKI admits that in the late 1990s he started exploring the replacement of the existing bulkhead at his beachfront property. He was told by Mason County authorities that any new bulkhead had to remain on the footprint of the existing bulkhead, and could not extend further than 6 feet past the ordinary high water mark. KOLOSKI was also informed that any work that extended beyond the ordinary high water mark had to be approved and permitted by the U.S. Army Corps of Engineers. In early 2010, Mason County issued permits for a new bulkhead 6 feet past the ordinary high water mark. In June 2010, an official with the U.S. Army Corps of Engineers informed KOLOSKI that he needed to apply for a permit. In paperwork submitted to the Corps, KOLOSKI said the bulkhead would be ten feet past the ordinary high water mark. The Corps asked for more information on the project, but KOLOSKI did not respond and in September 2010 the permit process was cancelled.
In October 2010, KOLOSKI revived the process by submitting some of the required information and he was informed of the time frame for permit approval. Still without a permit, in mid-2011 KOLOSKI went forward and hired a contractor. In September 2011 KOLOSKI had the bulkhead installed ten feet past the ordinary high water mark. The Corps of Engineers was unaware of the construction and sent KOLOSKI information on specific requirements for a permit in early 2012. KOLOSKI responded in April 2012 that due to financial considerations he no longer planned to build the new bulkhead and asked that his application for a permit be withdrawn. KOLOSKI sent the email some six months after having the new bulkhead constructed. In May 2012, a Corps of Engineers inspector visited the KOLOSKI property and discovered the new bulkhead had been constructed without a permit and in violation of rules regarding the distance seaward from the ordinary high water mark.
“The defendant made false statements designed to mislead government authorities,” said Lance Ehrig, Acting Special Agent in Charge of EPA’s criminal enforcement program in the State of Washington. “As a principal founder of an environmental engineering firm and as a geologist, Mr. Koloski was well aware of the permit requirements for shorelines in and around the Puget Sound region. Our government functions properly only when individuals and corporate entities submit honest and truthful information while requesting government oversight of projects that could affect the environment. Today’s guilty plea demonstrates that violators who deliberately waste government resources – and taxpayers’ money – will be prosecuted.”
In addition to the criminal charge, KOLOSKI also settled civil violations of the federal Clean Water Act.
“Mr. Koloski’s unpermitted work resulted in the loss of endangered salmon habitat,” said David Allnutt, Director of the Office of Ecosystems, Tribal and Public Affairs in the EPA Seattle office. “We work closely with our local and state partners and spend millions of dollars on Puget Sound protection and recovery. It is imperative that developers who work on sensitive shoreline habitats have permits that allow for development to proceed in a way that protects the environment.”
KOLOSKI has agreed to pay $60,000 in civil penalties and $60,500 to the Hood Canal Coordinating Council for mitigation of salmon habitat to offset environmental impacts associated with construction of the bulkhead. In addition, the civil settlement requires habitat restoration at the site of the bulkhead to remedy habitat loss.
The EPA worked with a team of agencies which included Mason County, Washington Department of Ecology, Washington Department of Fish and Wildlife, the U.S. Army Corps of Engineers, and National Oceanic and Atmospheric Administration to resolve this case.
The case is being prosecuted by Assistant United States Attorney James Oesterle.
Heroin Supplier and Crack-Cocaine Distributor for the Grape Street Crips Gang Both Plead GuiltyRead the Press Release
NEWARK, N.J. – Two drug suppliers for the Grape Street Crips street gang today admitted distributing large quantities of heroin and crack-cocaine in and around Newark, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Toma Williams, a/k/a “T-Dubbs,” 38, and Jihad Coles, a/k/a “Half Dead,” 30, both of Newark, pleaded guilty before U.S. District Judges Madeline Cox Arleo and Esther Salas, respectively, in Newark federal court. Williams pleaded guilty today to an information charging him with one count of conspiracy to distribute one kilogram or more of heroin and one count of using a firearm in furtherance of a drug-trafficking crime. Coles pleaded guilty on July 8, 2015 to a separate information charging him with one count of conspiracy to distribute 280 grams or more of crack-cocaine.
In May 2015, over the course of three weeks, 50 alleged members and associates of the Grape Street Crips were charged in criminal complaints that alleged drug-trafficking, physical assaults, and witness intimidation. The charges were the result of a long-running investigation led by the Drug Enforcement Administration (DEA) and the FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics. Over the course of the entire investigation, 71 defendants have been charged with federal and state charges.
According to documents filed in this case and statements made in court:
Williams admitted that, between March 2014 and Oct. 3, 2014, he conspired with others to distribute kilogram quantities of heroin to members and associates of the Grape Street Crips. During the course of a wiretap investigation of Williams, the DEA learned that Williams was a supplier of heroin to members of the Grape Street Crips operating in and around the area of North 5th Avenue and 6th Street in Newark. In addition, Williams ran a drug-trafficking organization that supplied heroin to other individuals in and around Newark and Jersey City, New Jersey. Following Williams’ arrest, DEA agents discovered a sophisticated secret compartment inside Williams’ car. Inside that secret compartment, Williams had approximately two kilograms of heroin and a loaded semi-automatic firearm, which Williams admitted today he used to protect his supply of heroin and his drug profits.
Coles admitted that, between March 2012 and August 2012, he conspired with others to distribute hundreds of grams of crack-cocaine at the Mildred Terrell Homes public-housing complex located on Riverview Terrace in Newark, New Jersey. As a long-time member of the Grape Street Crips, Coles admitted today that he served as an organizer and leader of the crack-cocaine distribution conspiracy.
The heroin conspiracy charge to which Williams pleaded guilty carries a mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a fine of up to $10 million. The firearms charge carries a mandatory minimum sentence of five years in prison—which must run consecutive to the sentence imposed for the heroin conspiracy—a maximum sentence of life in prison, and a fine of up to $250,000. The crack-cocaine conspiracy charge to which Coles pleaded guilty carries a mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a fine of up to $10 million. Williams and Coles are scheduled to be sentenced on Oct 19, 2015 and Nov. 9, 2015, respectively.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges. Fishman also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Essex County Sheriff’s Office under the direction of Sheriff Armando B. Fontoura, for their work on the investigation.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Defense counsel:
Toma Williams: Linda Foster, Esq., Newark
Jihad Coles: David A. Ruhnke, Esq., Montclair, New Jersey
Grand Jury Returns Indictment Charging Pair with May Robberies of Check City, Smoke HouseRead the Press Release
SALT LAKE CITY – A federal grand jury returned a five-count indictment Wednesday charging Manmeet Singh Bhatia and Marc Conrad Kammerman with May 14, 2015, robberies of Check City located at 1295 East 3300 South and The Smoke Shop located at 2343 East 3300 South in Salt Lake County.
Bhatia, age 28, of South Jordan and Kammerman, age 41, of Murray, are charged with two counts of robbery, which are violations of the federal Hobbs Act. Kimmerman is also charged with two counts of using a firearm during the commission of a crime of violence and one count of felon in possession of a firearm.
Police officers responded to a robbery in progress at a Check City on 3300 South on May 14, a rainy night. By the time the officers arrived at the business, the alleged suspect had fled the scene. The victim of the robbery described a suspect wielding a black handgun. Later that night, a man walked into The Smoke House, also on 3300 South, a committed a robbery. A black handgun was also used during the commission of this robbery. A witness watched the alleged robber flee the store and get into the passenger side of a black car. The witness was also able to provide a partial license plate number.
Responding officers later observed a black car in a self-service car wash and identified items matching descriptions provided by witnesses at the two businesses. Kammerman, who is a convicted felon, was found in possession of a Beretta 9mm handgun.
The potential maximum penalty for a conviction of robbery under the Hobbs Act is 20 years in federal prison and a fine of $250,000. The potential maximum penalty for brandishing a firearm during the commission of a violent crime is life in prison with a mandatory minimum sentence of seven years. Possession of a firearm by a restricted person carries a potential 10-year sentence. Federal arrest warrants will be issued for the defendants.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office and investigated by the FBI and the Unified Police Department.
Four Leaders and Members of the Schuele Boys Gang Charged for Their Involvement in 15 Years of Drug Trafficking and Violence Including Two MurdersRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a 15 count superseding indictment charging four members of the Schuele Boys Gang with various murder, racketeering conspiracy, drug trafficking and gun charges involving the shooting deaths of two individuals.“While nothing can restore a homicide victim to his family, today’s indictment at least provides answers to two families whose loved ones were murdered,” said U.S. Attorney Hochul. “As alleged, this gang not only committed murder, it filled the streets of a city neighborhood with other crimes of violence, guns and drugs. As we have said in the past, law enforcement will simply not allow a gang to hold a community hostage.”
Aaron Hicks, Marcel Worthy, Roderick Arrington and Letorrance Travis, all of Buffalo, NY, are charged with racketeering conspiracy, narcotics conspiracy and possession of firearms in furtherance of a crime of violence and drug trafficking crime. In addition, defendants Worthy and Arrington are charged with murder in aid of racketeering activity and discharge of a firearm in furtherance of a crime of violence. Arrington is also charged with attempted murder in aid of racketeering activity, possession of heroin with intent to distribute, maintaining a drug involved premises, and possession of a firearm by a convicted felon.
Defendants Hicks and Travis face a mandatory minimum 10 years in prison with a maximum of life if convicted. Defendants Worthy and Arrington face mandatory life in prison.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that according to the superseding indictment, between 2000 and 2015, the defendants were leaders and members of the Schuele Boys Gang, which operated in the Schuele Avenue area of the East Side of Buffalo. The gang is alleged to be responsible for multiple acts of violence and the distribution of illegal narcotics including cocaine, crack cocaine and marijuana.
On December 17, 2006, defendant Worthy and others confronted a group of teenagers at a gas station at Grider Street and East Delavan Avenue in Buffalo, in the neighborhood controlled by the Schuele Boys. Worthy and the others asked them if they were members of the Chelsea Boys, a rival gang, but they were not. A short time later, Worthy and the others drove by the same group of teenagers who were in the vicinity of 82 Durham Avenue and shot and killed 16 year old Kevin Gray.
On August 30, 2012, defendant Arrington shot and killed Quincy Balance in the vicinity of Northland and Stevens Avenues in Buffalo, a neighborhood also controlled by the Schuele Boys. Defendants Hicks, Worthy, Arrington and others believed that victim Quincy Balance was involved in the shooting death of a Schuele Boys associate four days earlier on August 26, 2012.
The superseding indictment further states that on November 6, 2011, law enforcement officers seized 24 kilograms of cocaine and $170,000 in cash from defendant Travis and others. The cocaine was estimated to be worth nearly $1,000,000.
A total of 27 defendants have been charged in the case, to date nine have been convicted.
The superseding indictment is the culmination of an investigation by Federal Bureau of Investigation Safe Streets Task Force, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, the New York State Police, under the direction of Major Michael Cerretto, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, the Edinboro, Pennsylvania Police Department, under the direction of Chief Jeff Craft, and the Edinboro University Police Department, under the direction of Chief Angela Vincent. The FBI Safe Streets Task Force includes the Amherst Police Department; Buffalo Police Department; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Cheektowaga Police Department; Erie County Sheriff’s Office; Hamburg Police Department; Lancaster Police Department; Niagara Frontier Transportation Authority; New York State Department of Correctional Services; New York State Police; U.S. Border Patrol; and U.S. Immigration and Customs Enforcement–Homeland Security Investigations.
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.
Four Convicted in Violent March 2015 Humble Bank RobberyRead the Press Release
HOUSTON – With the guilty pleas of two more men today, four people now stand convicted for the take-over robbery of the Shell Federal Credit Union that occurred March 19, 2015, announced U.S. Attorney Kenneth Magidson.
Derrick Devon Malone, 24, and Christopher Parker, 28, both of Houston, pleaded guilty this morning before U.S. District Judge Alfred H. Bennett to a two-count indictment for bank robbery and possessing a firearm during the commission of a crime of violence. Two others - Shaterrika Monique West-Malone, 27, and Crystal Gail McCain-Sims, 25, also of Houston, previously pleaded guilty in a related case to a one-count criminal information charging them with bank robbery.
On March 19, 2015, the four defendants robbed the Shell Federal Credit Union located at 4787 Wilson Road in Humble.
McCain-Sims drove the group to the bank and served as the getaway driver after the robbery, while West-Malone was the lookout. West-Malone entered the bank shortly before the robbery and notified Malone and Parker via text message that there was no security guard in the premises. She then rejoined McCain-Sims in the getaway vehicle, while the male accomplices entered and robbed the bank.
Malone and Parker entered the bank through the main entrance at approximately 10:59 a.m. During their entry, Malone, who was armed with a pistol, grabbed a departing bank customer with his free hand and threw her back inside and onto the floor. Parker then confronted a bank employee and yelled, “Give me the money b***h,” grabbed one customer’s cash and identification cards from the counter and jumped onto the tellers’ counter where he joined Malone, who was pointing his pistol at the heads and bodies of the tellers. Malone was screaming such things as “Hurry we will shoot you b***h, give me the money b***h, all the money b***h.” Parker also shouted “We want money, I’ll shoot you.”
After seizing a significant amount of cash from the bank as well as a customer, Malone and Parker ran out the door, climbed into the getaway vehicle and fled the scene with their female accomplices.
Malone was captured approximately 30 minutes after the robbery, while Parker was apprehended shortly thereafter.
Bank cameras had captured images of the vehicle which allowed law enforcement to promptly identify the perpetrators. West-Malone was also taken into custody that day as an officer witnessed her exit the getaway vehicle and enter her apartment. McCain-Sims was apprehended the next day following her identification as the owner of the vehicle. Customers and employees inside the credit union later positively identified the two men as the violent robbers.
McCain-Sims was permitted to remain on bond, while the three others are in custody pending their sentencing hearings. McCain-Sims and West-Malone are set for Aug. 27, 2015, at which time they face up to 20 years in prison for bank robbery. Their male accomplices will be sentenced Sept. 17, 2015, at which time they each face up 25 years for the bank robbery as well as a mandatory seven years for the firearms charges which must be served consecutively to the other prison term imposed.
The charges are the result of an investigation by the FBI’s Bank Robbery Task Force which included the Harris County Sherriff’s Office. Assistant U.S. Attorney Michael Kusin is prosecuting the case.
Former President of Townsend Controls, Inc. Sentenced to 40 Months Prison and 3 Years Court Supervision for Failing to Pay $3.3 Million in Payroll TaxesRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Maria Elizabeth Townsend, age 39, of Burbank, Washington, was sentenced yesterday following conviction after a five-day jury trial in February 2015 of ten counts of failing to pay over employment taxes to the IRS. United States District Court Judge Thomas O. Rice sentenced Maria Elizabeth Townsend to a 40-month term of imprisonment and a 3-year term of court supervision following release from federal prison. The Court also ordered Mrs. Townsend to pay $3,327,124 in restitution to the IRS and $8,048 in costs of prosecution to the United States, and a $1,000 special penalty assessment. Mrs. Townsend was immediately taken into custody by the U.S. Marshals following sentencing.
According to information disclosed during court proceedings, Townsend was the President and majority shareholder of Townsend Controls, Inc. (TCI), a Pasco, Washington electrical contractor that employed over a hundred employees. The majority of TCI’s employees were members of Local 112 of the International Brotherhood of Electrical Workers (Local 112). For sixteen quarters between 2005 and 2009, Townsend withheld $3,361,246 in employment taxes from the wages of the members of Local Union 112 that TCI employed as well as its other-non-union employees but failed to pay over those taxes to the IRS. Between April 2007 and September 2009, Townsend authorized the disbursement of over $31 million in TCI funds to pay vendors and for other purposes, instead of the IRS for payroll taxes. According to information disclosed during court proceedings, instead of paying the IRS, Townsend paid TCI’s vendors and employees, paid a large (approximately $200,000) dividend to one of her partners, disbursed $300,000 toward payment of her joint personal income tax obligations, disbursed more than $260,000 in funds to family members, and spent $22,000 to construct a pool at her residence, $30,000 to purchase a boat, $30,000 to purchase a Cadillac Escalade, and $42,982 to purchase a Jeep Commander.
Townsend filed Forms 941 (Quarterly Employment Tax Returns) with the IRS and paid all the employment taxes that were due from the second quarter of 2002 through the third quarter of 2004. Then, Townsend stopped filing Forms 941 from the fourth quarter of 2004 through the third quarter of 2005. Townsend, however, made periodic deposits of payroll taxes during the fourth quarter of 2004 through the second quarter of 2005. An IRS revenue officer visited TCI’s Pasco, Washington office in December 2005, and met with Townsend to secure the delinquent Forms 941 and the payroll taxes owed for the third quarter of 2005. Within a few days of that visit, the IRS received the delinquent Forms 941 for the fourth quarter of 2004 through the third quarter of 2005, signed by Townsend. The IRS also received full payment for the payroll taxes that were due as reported on the Form 941 for the third quarter of 2005. Townsend did not remit any periodic deposits of payroll taxes for the ten consecutive calendar quarters beginning April 1, 2007, through September 30, 2009, even though she continued to preparer TCI’s weekly payroll using accounting software that generated reports showing the amount of taxes withheld from each employee’s paycheck as well as the total amount of taxes withheld from all the employees. She also did not pay over payroll taxes for the quarters ended December 31, 2005, March 31, 2006, June 30, 2006, September 30, 2006, December 31, 2006 and March 31, 2007. In order to conceal the non-payment of employment taxes from the IRS, Townsend did not timely file TCI’s Forms 941 with the IRS, with the exception of the Form 941 for the tax period ended September 30, 2009. An IRS revenue officer ultimately secured the delinquent quarterly employment tax returns in December 2010 after TCI’s dissolution.
Townsend claimed she was suffering from multiple psychiatric disorders, including Bipolar I Disorder and Obsessive Compulsive Disorder that paralyzed her when it came to being able to paying over the payroll taxes. Townsend also claimed TCI’s electricians were independent contractors, not employees, even though she withheld $3.3 million in taxes from their wages.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, “The sentence imposed in this case reflects the seriousness of ‘white collar’ crime and that those accused of failing to pay over payroll taxes to the IRS will be fairly and justly held accountable for their criminal conduct. Ormsby went on to say this is one of the biggest cases of this kind pending in the country and is representative of an important area of emphasis by both Internal Revenue Service and the Department of Justice. This case is yet another example of the commitment of the United States Attorney’s Office to prosecute aggressively fraud cases in the Eastern District of Washington. “Holding business owners accountable who willfully evade their employment tax obligations to line their own pockets is among the Tax Division’s highest priorities,” said Acting Assistant Attorney General Ciraolo. “These offenders, who not only steal from the United States, but also take advantage of honest competitors, will be prosecuted to the fullest extent of the law, and like Ms. Townsend, will face incarceration and substantial financial penalties.” The Internal Revenue Service Criminal Investigation Division is commended for its tireless efforts in thoroughly investigating this case.” IRS Criminal Investigation Special Agent-in-Charge Teri Alexander stated, “Maria Townsend essentially stole not only from the government but from her own employees. IRS Criminal Investigation realizes the detrimental consequences of employment tax evasion. It results in the loss of tax revenue to the United States government and the loss of future Social Security or Medicare benefits for the employees. I want to thank the U.S. Attorney's Office and the Department of Justice, Tax Division, for its dedicated leadership and professionalism in pursuit of justice served today.”
The investigation was conducted by the IRS Criminal Investigation Division. The case was prosecuted by George J.C. Jacobs, III, Assistant United States Attorney for the Eastern District of Washington, and Lisa L. Bellamy, Trial Attorney, U.S. Department of Justice, Tax Division, Criminal Enforcement Section.
Former Owner of Las Vegas Endoscopy Center, Dipak Desai, Sentenced to 71 Months in Federal Prison for Fraud ConvictionRead the Press Release
LAS VEGAS, Nev. – Dipak Desai, the former physician owner of a defunct Nevada endoscopy center, was sentenced today to 71 months in federal prison, three years of supervised release, and ordered to pay over $2.2 million in restitution for defrauding Medicare, Medicaid and other private health insurance companies by inflating and overcharging for anesthesia services, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“Dr. Desai intentionally defrauded the federal health care system for his own personal enrichment,” said U.S. Attorney Bogden. “We are hopeful this closes a long and sordid chapter of harm caused to the people and businesses of Nevada.”
Desai, 65, of Las Vegas, was sentenced by U.S. District Judge Larry R. Hicks. Desai pleaded guilty in April to one count of conspiracy to commit health care fraud and one count of health care fraud.
Tonya Rushing, the former chief operating officer of the endoscopy center, was sentenced in May to one year and one day in prison for her guilty plea to one count of conspiracy to commit health care fraud.
According to Desai’s guilty plea agreement, between about January 2005 and February 2008, Desai and Rushing conspired to overcharge Medicare, Medicaid, and other private health insurance companies at the Endoscopy Center of Southern Nevada by significantly overstating the amount of time the certified registered nurse anesthetists spent with patients on a given procedure. Desai and Rushing created a separate company, Healthcare Business Solutions, owned by Rushing, to handle the billing for the anesthesia services. This company received approximately nine percent of all money collected for anesthesia services rendered at the endoscopy center. Desai and Rushing imposed intense pressure on the endoscopy center employees to schedule and treat as many patients as possible in a day, and instructed the nurse anesthetists to overstate in their records the amount of time they spent on the anesthesia procedures. Desai and Rushing also instructed the office staff to rely on the false anesthesia records when preparing the claims for reimbursement which were sent to Medicare, Medicaid and the insurance companies. The plea agreement states that the parties agreed that the amount of loss to the victims is approximately $2.2 million.
This case was investigated by the FBI, the Office of the Nevada Attorney General, Health and Human Services Office of Inspector General, Department of Labor Office of Inspector General, Food and Drug Administration Office of Criminal Investigations, and the United States Postal Inspection Service, and prosecuted by Assistant U.S. Attorney Crane M. Pomerantz and Mark N. Kemberling, who was designated as a Special Assistant U.S. Attorney on this case and is Chief Deputy Nevada Attorney General.
According to a recent report by the Inspector General for the U.S. Department of Health and Human Services, for every dollar the Departments of Justice and Health and Human Services have spent fighting health care fraud, they have returned an average of nearly eight dollars to the U.S. Treasury, the Medicare Trust Fund and others. To learn more or to report Medicare fraud, go to http://www.stopmedicarefraud.gov/
Former Member of Croatian Defense Council in Bosnia and Herzegovina (HVO) Pleads Guilty to Fraudulently Obtaining Green CardRead the Press Release
United States Attorney Andrew M. Luger and Acting Special Agent in Charge of Homeland Security Investigations St. Paul Division William Lowder today announced the conviction of ZDENKO JAKIŠA, 47, for obtaining a Permanent Resident Card (I-551), commonly referred to as a “Green Card,” by materially false claims and statements. JAKIŠA entered his plea today before Judge Susan Richard Nelson in United States District Court in St. Paul, Minn.
According to the defendant’s guilty plea and documents filed in court, JAKIŠA is a Bosnian citizen and lawful permanent resident of the United States living in Minnesota. On April 17, 2014, JAKIŠA possessed a green card that was unlawfully obtained. In response to questions on his legal permanent resident applications, JAKIŠA knowingly denied that he had been arrested, charged, or imprisoned for breaking the law in Bosnia and Herzegovina.
According to the defendant’s guilty plea and documents filed in court, between July 1990 and October 1997, JAKIŠA was charged with at least seven separate crimes in Bosnia and Herzegovina. On July 13, 1990, JAKIŠA was charged and convicted of Violent Behavior. He was charged with Grand Larceny on April 7, 1991, for allegedly stealing a cash register from a café. JAKIŠA was charged and convicted of Causing General Danger in September 1993 for shooting and killing his neighbor through her bedroom window.
According to JAKIŠA’s guilty plea and documents filed in court, he was arrested, charged and convicted of Theft for stealing commercial scales from an outdoor storage area on October 11, 1994. JAKIŠA was convicted of Infliction of Grievous Bodily Damage in February 1997 for seriously wounding another person who was later discovered bloodied in the street. JAKIŠA was convicted of Disturbing Peace & Public Order for attempting to persuade a woman to leave her home by threatening that he would get a firearm, throwing bricks at her home, and by attempting to break through the front door. Less than a week later, JAKIŠA was charged with fighting and stealing a gold necklace from the victim’s neck.
This case is the result of an investigation conducted by Homeland Security Investigations.
Assistant U.S. Attorney from the District of Minnesota Nathan P. Petterson and Trial Attorney Ann Marie Ursini of the Human Rights and Special Prosecutions Section of the Criminal Division, U.S. Department of Justice are prosecuting the case.
Defendant Information:
ZDENKO JAKIŠA, 47
Forest Lake, Minn.
Convicted:
- Possession of unlawfully obtained documents, 1 count
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Former Maryland Licensed Counselor Sentenced to 35 Years in Prison for Conspiring to Sexually Exploit an InfantRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Stephen H. Schaffner, age 35, of Greensboro, Maryland, today to 35 years in prison, followed by supervised release for life, for a conspiracy to sexually exploit a child, and for sexual exploitation of a six week old baby who was born prematurely, in order to produce images documenting the abuse. Judge Motz also ordered that upon his release from prison Schaffner must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; United States Attorney for the Southern District of California Laura E. Duffy; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation - Maryland; Special Agent in Charge Eric Birnbaum of the Federal Bureau of Investigation – San Diego Division; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Chief Jeff A. Jackson of the Greensboro Police Department and Chief David A. Spencer of the Easton Police Department.
“The defendant was caught because in 2014, police were still able to obtain a warrant and find images on a cell phone,” said U.S. Attorney Rod J. Rosenstein. “Companies now market encrypted devices that are immune from search warrants and allow pedophiles to molest children and trade photographs with little risk of detection, even when a federal judge finds that there is probable cause and issues a court order. Law enforcement officials have a responsibility to alert law-abiding citizens about the consequences of ‘going dark,’ so they will not be surprised when police cannot obtain evidence of serious crimes.”
According to his plea agreement, for over four years, Schaffner was a licensed associate counselor in Arizona, providing behavioral health and education services for children ages 11-17 whose lives and family relationships were in crisis, or who were struggling with mental health or substance abuse challenges. Schaffner also worked as a clinician in Easton, Maryland for 18 months, providing individual and family mental health counseling, including treatment for children and for sex offenders. In 2011 and 2012, Schaffner attended trainings and conferences focused on the assessment, management and treatment of sex offenders. On October 30, 2012, Schaffner sent an adult counseling client inappropriate text messages of a sexual nature. In November 2012, Schaffner was fired from the practice where he worked, and his license was later suspended.
Schaffner admitted that beginning in 2004, he collected child pornography he obtained from the internet. Thousands of images and videos of minors engaged in sexually explicit conduct were located on digital devices, storage media and online accounts seized from Schaffner. In his electronic communications, Schaffner repeatedly expressed a sexual interest in boys from “age zero” up, and his desire to commit violent sexual abuse against infants, including making the children cry during the abuse, and injuring or killing children in the course of sexual abuse. He discussed ways to ensure that the children did not report the abuse, including drugging or killing the children.
According to his plea agreement, in late June 2014, Schaffner met Michael Lutts online. Lutts lived in California and worked as a pediatric nurse at a hospital in San Diego County. Schaffner and Lutts communicated electronically using their cellular phones. On August 4, 2014, Lutts brought home a six week old baby boy, born prematurely, who was placed in his care as a foster child. Lutts texted images of the infant to Schaffner.
Over the next several hours, Schaffner exchanged numerous graphic and sexually explicit messages with Lutts about Lutts sexually abusing the infant. Schaffner directed Lutts to sexually abuse the infant in specific ways, to produce photos and video that Lutts was to send to Schaffner. Lutts sent Schaffner images and videos with the infant, including images documenting the sexual abuse of the infant. Schaffner and Lutts also discussed Schaffner travelling to San Diego to rape the infant.
According to court documents, the abuse of the infant was discovered when a federal investigation of individuals transmitting child pornography led authorities to obtain a search warrant for Michael William Lutts’s residence in San Diego on August 26, 2014. During that search, law enforcement seized a cell phone that contained images and videos of Lutts sexually molesting the infant. Michael Lutts pleaded guilty in federal court in the Southern District of California to three counts of sexual exploitation of a child and is scheduled to be sentenced on October 13, 2015.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI’s Baltimore and San Diego offices, the Maryland State Police Interstate Crimes Against Children Task Force (ICAC), the San Diego, California ICAC, Greensboro Police Department, and Easton Police Department for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Alessandra P. Serano from the Southern District of California who is prosecuting the case against Michael Lutts, and Assistant U.S. Attorney Zachary A. Myers from Maryland, who is prosecuting the case against Stephen Schaffner.
Former Loudoun County Sheriff’s Deputy Indicted for Asset Forfeiture EmbezzlementRead the Press Release
ALEXANDRIA, Va. – Frank Michael Pearson, 44, a former Loudon County Sheriff’s Deputy from Winchester, Virginia, was indicted by a federal grand jury today on four counts of theft concerning programs receiving federal benefits in relation to his alleged embezzlement of over $200,000 from the asset forfeiture fund at the Loudon County Sheriff’s Office.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and David J. LeValley, Special Agent in Charge of the Criminal Division, FBI Washington Field Office, announced the charges after the grand jury returned the indictment today. An arraignment has been scheduled for July 24, 2015 at 9 a.m. before U.S. District Judge T. S. Ellis, III.
Pearson faces a maximum penalty of 10 years in prison on each count 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.
According to the indictment, beginning in 2006 Pearson was designated as the deputy responsible for overseeing the asset forfeiture program for the Loudon County Sheriff’s Office. The indictment further alleges that from in or about 2010 through in or about 2013, Pearson embarked on a scheme to embezzle and steal money totaling in excess of $200,000, which had been entrusted to him in connection with the program. The indictment further alleges that Pearson concealed his embezzlement scheme by making false statements to his coworkers and others about the timing and fact of whether he had deposited seized money into an escrow account maintained by the Loudoun County Sheriff’s Office at a local bank.
This case was investigated by the FBI’s Washington Field Office and the Virginia State Police. The Loudon County Sheriff’s Office cooperated with the investigation. Assistant U.S. Attorneys Matthew Burke and Mark D. Lytle are prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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. 1:15cr193.
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