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Thursday 9 July 2015
Former Jackson County Correctional Officer Indicted for Using Unreasonable ForceRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former correctional officer at the Jackson County Detention Center has been indicted by a federal grand jury for violating an inmate’s civil rights by using unreasonable force.
Young Isinwa, 45, of Kansas City, Mo., was charged in an indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, July 8, 2015. That indictment was unsealed and made public today upon Isinwa’s arrest and initial court appearance.
The federal indictment alleges that Isinwa deprived an inmate at the Jackson County Detention Center, who is identified in the indictment as “M.F.,” of his Constitutional right to be free from the use of unreasonable force by one acting under color of law.
Isinwa, while on duty working as a correctional officer on Oct. 16, 2011, allegedly kicked M.F. in the head while the inmate was restrained and not posing a threat to Isinwa or others. The inmate suffered bodily injury as a result.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by First Assistant U.S. Attorney David Ketchmark. It was investigated by the FBI.
Former Ft. Hood Soldier Sentenced for Alien SmugglingRead the Press Release
BROWNSVILLE, Texas - Christopher David Wix, a former active duty U.S. Army soldier based at Fort Hood in Killeen, has been sentenced on alien smuggling charges, announced U.S. Attorney Kenneth Magidson. Wix, 21, of Abilene, entered a plea to conspiracy to transport and harbor undocumented aliens Oct. 30, 2014.
Today, U.S. District Judge Hilda Tagle ordered Wix to 12 months and one day in federal prison to be immediately followed by two years of supervised release. At the hearing, additional evidence was presented to include that Wix attempted to use his military identification to facilitate his passing through the immigration checkpoint. In handing down the sentences, Judge Tagle noted Wix’s youthful age and his relatively low rank within the smuggling conspiracy compared to the other defendants as factors for imposing the sentence.
WIx was charged along with Eric Alexander Rodriguez, 20, of Odem, Brandon Troy Robbins, 20, from San Antonio, both also former soldiers based at Ft. Hood; and Arnoldo Gracia, 45, of Harlingen, in a seven-count indictment with the smuggling of undocumented aliens through the immigration checkpoint located at Sarita. Rodriguez, Robbins and Gracia have also entered pleas of guilty and are scheduled for sentencing Aug. 4, 2015.
On Sept. 11, 2014, Rodriguez arrived at the immigration checkpoint in Sarita driving a truck that was registered to Gracia. Customs and Border Protection (CBP) agents looked in the rear floorboard and seat areas and observed his military jacket, a bed sheet and other clothing covering the area. A further inspection revealed two undocumented individuals hiding under the items.
The continuing investigation by Homeland Security Investigations (HSI) revealed two earlier incidents involving Army soldiers stationed at Ft. Hood occurring at the Sarita checkpoint. Agents determined that on April 13, 2014, Robbins had also arrived at the same immigration checkpoint and stated he was soldier going to Fort Hood. In a routine check of his vehicle, agents discovered two undocumented individuals hiding under a blanket. Agents also learned that on June 21, 2014, Wix had arrived at the same checkpoint, driving a car registered to Rodriguez and presented his military identification. Agents conducted a routine check of the vehicle and discovered two undocumented individuals hiding under his military gear. Further investigation revealed Gracia as the person supplying the aliens to the Wix and the others.
Wix was permitted to remain on bond and surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI conducted the investigation with the assistance of CBP. Assistant U. S. Attorney Oscar Ponce is prosecuting the case.
Former FBI agent sentenced for obstructing justice, falsifying records, and possessing heroinRead the Press Release
PHILADELPHIA - Matthew Lowry, 33, of Upper Marlboro, Maryland, was sentenced today to 36 months in prison for tampering with substantial quantities of drug evidence while working as a Special Agent with the Federal Bureau of Investigation ("FBI"). Lowry pleaded guilty to 20 counts of obstruction of justice, 18 counts of falsification of records, 13 counts of conversion of property, and 13 counts of possession of heroin. U.S. District Court Judge Thomas F. Hogan, in the District of Columbia, also ordered 2 years of supervised release, a $15,000 fine, and a $5,425. special assessment.
Lowry was assigned to the Washington, D.C. Field Office ("WFO"), and was a member of the Cross-Border Task Force ("CBTF"). He participated in the undercover purchase of heroin and, in lieu of turning the heroin into evidence and documenting its seizure, Lowry ingested the heroin. He also tampered with heroin evidence seized during several of his investigations.
The matter was referred to the Department of Justice Office of the Inspector General, which conducted the investigation, with assistance from the Federal Bureau of Investigation as requested by the OIG. It was prosecuted by Assistant United States Attorneys Kevin R. Brenner and Maureen McCartney.
Because Lowry’s investigations, as an agent, occurred within the District of Columbia and the districts surrounding it, those offices were recused by the Department of Justice.
Former FBI Agent Sentenced for Obstruction and Drug PossessionRead the Press Release
PHILADELPHIA - Matthew Lowry, 33, of Upper Marlboro, Maryland, was sentenced today to 36 months in prison for various crimes arising from his stealing drug evidence while working as a Special Agent with the Federal Bureau of Investigation (“FBI”). Lowry pleaded guilty, on March 31, 2015, to 20 counts of obstruction of justice, 18 counts of falsification of records, 13 counts of conversion of property, and 13 counts of possession of heroin. U.S. District Court Judge Thomas F. Hogan, in the District of Columbia, also ordered two years of supervised release, a $15,000 fine, and a $5,425 special assessment. As a result of Lowry’s criminal activity, numerous federal investigations were compromised and convicted criminals were released from prison.
Lowry was assigned to a task force that investigated narcotics trafficking and violent gang activity, occurring in and around Washington D.C. and Prince George’s County, Maryland. From approximately July of 2013 through September of 2014, the defendant stole, from FBI custody, at least 20 bags of heroin (some containing hundreds of grams) that he and other agents had seized during the course of five large-scale investigations. The defendant kept the heroin in his government-issued car, in some instances for as long as several months, and he periodically ingested it, often while he was on duty. Before returning the heroin into evidence, the defendant calculated the quantity he had used and replaced it with a different substance, either a weightlifting supplement, Creatine, or a laxative, Purelax. To further conceal his misconduct, the defendant falsified evidence and chain of custody records, including by backdating them and forging his fellow agents’ signatures.
The matter was referred to the Department of Justice Office of the Inspector General, which conducted the investigation, with assistance from the Federal Bureau of Investigation as requested by the OIG. It was prosecuted by Assistant United States Attorneys Kevin R. Brenner and Maureen McCartney.
Because Lowry’s investigations, as an agent, occurred within the District of Columbia and the districts surrounding it, those offices were recused by the Department of Justice.
Former Employee of Leading Proxy Advisory Firm Pleads Guilty in Conspiracy to Provide Confidential Shareholder Voting InformationRead the Press Release
BOSTON – A former employee of one of the country’s leading proxy advisory firms pleaded guilty today in U.S. District Court in Boston to conspiring over a six-year period to provide confidential information about how the firm’s clients had voted on numerous shareholder proposals to a leading proxy solicitation firm.
Brian M. Bennett, 42, of Mount Pleasant, S.C., pleaded guilty to an Information charging him with one count of conspiracy to commit wire fraud and honest services wire fraud. U.S. District Court Judge Denise J. Casper scheduled sentencing for January 13, 2016.
“Individuals who sell the confidences of their employers and clients are committing a crime,” said United States Attorney Carmen M. Ortiz. “The law leaves no room for such betrayals, whether they are in service of a scheme to commit insider trading, to steal intellectual property or, as in today’s case, to provide an unfair advantage in the battle for proxy votes.”
U.S. Attorney Ortiz noted that the government’s investigation is continuing, adding: “Those who would pay such bribes should also take heed: you are no less culpable than the purveyors of the information you are buying. We will use the full arsenal of law enforcement tools available to us to shut down the black market for nonpublic corporate information, and to prosecute those who participate in it.”
Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, said “Mr. Bennett is now facing the consequences for giving away confidential client information in exchange for tickets to high-priced events. The FBI hopes this case sends a strong warning to those individuals and companies who are also buying inside knowledge. They are just as responsible as those selling it and the FBI will use every resource we have to shut them down.”
According to court documents, from 1998 to 2012, Bennett, who was formerly known as Brian M. Zentmyer, worked at one of the leading proxy advisory firms in the United States, including for two years, at the firm’s Boston office. Proxy advisory firms provide institutional investors with research, analysis and recommendations concerning proposals subject to vote by shareholders in publicly-traded companies. The firms may also engage in ancillary businesses, such as helping clients cast their votes, also known as proxy ballots or proxies. Proxy solicitation firms, in turn, assist publicly-traded companies in matters requiring shareholder approval by attempting to gather information about institutional investors’ holdings and the direction of their proxy votes. This information can help proxy solicitors and their clients determine whether particular shareholder proposals are likely to pass or fail, and can thus help to shape their strategies for affecting the outcome of shareholder votes.
Bennett, in the course of his work for the proxy advisory firm, had access to confidential information concerning the firm’s clients, including information about how many shares the clients held in particular publicly-traded companies, whether the clients had voted on particular shareholder proposals, and if so, how they had voted. Bennett was subject to the proxy advisory firm’s code of conduct, which prohibited employees from providing confidential client information to third parties, and accepting gifts.
Between 2008 and 2012, Bennett conspired with an employee of a proxy solicitation firm to provide confidential information about how the proxy advisory firm’s clients had voted on numerous shareholder proposals in return for gifts to Bennett from the proxy solicitation firm. The gifts included tickets worth thousands of dollars to concerts and sporting events.
According to court documents, for example, in February 2008 – one week before the annual shareholder meeting of a California-based semiconductor manufacturer – when the employee of the proxy solicitation firm emailed Bennett inquiring about a pending vote on a proposed performance incentive plan for the California company’s directors and key employees. Bennett responded by providing information about 13 of the company’s institutional shareholders, who were clients of the proxy advisory firm, including how many shares of the company they owned, whether they had voted on the proposed performance incentive plan, and if so, how they had voted. One week later – on the day of the shareholder vote – the proxy solicitation firm employee sent an email to Bennett, inquiring: “I just love asking questions like this: opening day – 3/30 – 2 or 4 tickets?” Bennett responded: “2 tickets is good….” Thereafter, Bennett attended the opening day game between the Atlanta Braves and the Washington Nationals, at Nationals Park in Washington, D.C., using tickets paid for by the proxy solicitation firm.
The charging statute provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense. 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.
U.S. Attorney Ortiz and FBI SAC Lisi made the announcement today. The United States Attorney’s Office has also received valuable assistance from the Securities & Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Sarah E. Walters and Stephen E. Frank, Chief and Deputy Chief, respectively, of Ortiz’s Economic Crimes Unit.
Federal inmate pleads guilty to possessing homemade weapon in prisonRead the Press Release
BLUEFIELD, W.Va. – United States Attorney Booth Goodwin announced today that a federal inmate pleaded guilty to possessing a weapon in a federal prison.
Rico Joy, 34, an inmate at the Federal Correctional Institution at McDowell, located near Welch, West Virginia, admitted that on April 21 he possessed a handcrafted knife known as a “shank.” Joy is serving a twenty-year sentence following his 2007 conviction in South Carolina for being a felon in possession of a firearm and ammunition. He faces up to five additional years in prison when he is sentenced on August 15, 2015.
The case was investigated by the Federal Bureau of Prisons and is being prosecuted by Assistant United States Attorney John File. Senior United States District Judge David A. Faber conducted the plea hearing.
Federal Jury Finds Methamphetamine Trafficker GuiltyRead the Press Release
STATESVILLE, N.C. B On Wednesday, July 8, 2015, a federal jury in sitting in Statesville, convicted Roger Dale Franklin, 54, of Lenoir, N.C., of nine charges, including conspiracy to distribute and to possess with intent to distribute methamphetamine, possession of methamphetamine with intent to distribute, possession of firearms in furtherance of drug trafficking, and possession of firearms by a convicted felon, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.
Acting U.S. Attorney Rose is joined in making today’s announcement by Ryan L. Spradlin, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas, Caldwell County Sheriff Alan C. Jones, and Lenoir Police Chief Scott Brown.
Evidence presented at the two-day trial that ended yesterday established that, from 2007 to 2014, Franklin and his co-conspirators sold more than five kilograms of methamphetamine, which has a street value of more than $150,000. In 2013, law enforcement officials in Lenoir and Caldwell County, as well as Morganton, stopped Franklin in vehicles on four occasions and seized methamphetamine from him, his vehicles, and his co-conspirators. On two of those occasions, he was in possession of handguns.
This prosecution in Operation “Dixie Crystal” is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the conviction of more than 50 defendants on methamphetamine trafficking and firearms charges. OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Franklin was indicted by a federal grand jury on December 16, 2014, which indictment was superseded on April 22, 2015. He has been in federal since February 2, 2015, and was in state custody prior to that. Franklin will remain in custody until his sentencing date, which has not yet been set. He faces a statutory mandatory minimum sentence of 15 years to life, and a fine of up to $10,000,000.
The case was investigated by HSI in Charlotte, the Caldwell County Sheriff’s Office, Lenoir Police Department, and Morganton Department of Public Safety.The prosecution of this OCDETF investigation is being handled by Assistant U.S. Attorney Steven R. Kaufman.
Eagle Butte Man Sentenced for Assault with a Dangerous WeaponRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on July 6, 2015, by U.S. District Judge Roberto A. Lange.
Kola Eagle Hunter, age 30, was sentenced to 30 months in custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Eagle Hunter was indicted by a federal grand jury on May 13, 2014, for Assault with a Dangerous Weapon. He pled guilty to the Indictment on April 8, 2015.
The conviction arose from a July 20, 2013, incident in Eagle Butte, when Eagle Hunter drove by the victim’s house and yelled at him. Eagle Hunter was angry with the victim because he believed the victim had broken out the windows in Eagle Hunter’s father’s car several weeks earlier. Later that same day, Eagle Hunter took a club, and ran up to the victim’s front porch. The victim was smoking a cigarette on his front porch when Eagle Hunter struck him in the head with a club. The victim suffered a 5 to 6 inch laceration on his head, which required 16 staples to close.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Alison Ramsdell prosecuted the case.
Eagle Hunter was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Dominican Woman Indicted for Drug Smuggling at Logan AirportRead the Press Release
BOSTON – A Dominican woman was indicted today in U.S. District Court in Boston in connection with smuggling cocaine into the United States at Boston’s Logan International Airport.
Ireline Aponte Melende, 30, of the Dominican Republic was indicted on unlawful importation of a controlled substance. She was arrested and charged in a criminal complaint in May 2015.
According to court documents, on May 10, 2015, Aponte Melende, was stopped at Logan International Airport after she arrived on a flight from the Dominican Republic using a motorized wheelchair. When the wheelchair was x-rayed, Customs and Border Protection officers noticed abnormalities in the wheelchair batteries. The batteries were opened, revealing four bricks containing a white powdery substance which preliminary testing revealed to be cocaine.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $1 million. 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 Bruce Shea, Deputy Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Seth B. Orkand of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
District Court Overturns Bankruptcy Court’s Orders Preventing the Termination of Local Skilled Nursing Facility from Medicare and Medicaid ProgramsRead the Press Release
Tampa, FL – U.S. Attorney A. Lee Bentley, III announces that the U.S. District Court has reversed a series of orders entered by the local bankruptcy court that had impeded efforts by the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), to terminate a skilled nursing facility from the Medicare programs. In its appeals from those orders, the United States argued that the bankruptcy court lacked the judicial power to enjoin the administrative authority of CMS over who may participate in Medicare. The district court adopted that argument in full and, in doing so, cleared the way for the administrative termination of the facility from the federally subsidized health program.
Bayou Shores SNF, LLC (Bayou Shores), provides services to patients with serious psychiatric conditions at its Rehabilitation Center of St. Petersburg. The facility had operated under Medicare and Medicaid provider agreements until surveys by the Florida Agency for Health Care Administration (AHCA) found that conditions at the facility constituted immediate jeopardy to the patients’ health and safety. CMS acted on these findings by sending a letter to Bayou Shores advising that the facility would be terminated from Medicare effective August 3, 2014. Under federal law, a state is required to terminate its Medicaid provider agreement when CMS terminates a provider from Medicare.
On August 1, 2014, Bayou Shores filed suit in district court and sought a temporary restraining order (TRO) preventing CMS from terminating the provider agreements. Bayou Shores sought and received a TRO enjoining the termination. On August 15, 2014, and at the request of the United States, the district court vacated the TRO and dismissed Bayou Shores’ complaint, finding that it had no power to grant relief before Bayou Shores had fully pursued the administrative appeal process established to resolve challenges to CMS termination decisions.
Immediately after the district court entered its order dissolving the TRO, Bayou Shores filed a voluntary Chapter 11 bankruptcy petition with the bankruptcy court. Bayou Shores requested the same relief from the bankruptcy court that had been denied by the district court, and sought an emergency order enjoining the termination decision by CMS. The bankruptcy court entered the injunction, finding that the Bankruptcy Code authorized it to do so. The bankruptcy court later found that Bayou Shores’ provider agreements were executory contracts that could be assumed in bankruptcy and confirmed Bayou Shores’ plan of reorganization with an order that required assumption of the provider agreements that CMS had terminated.
The United States appealed these bankruptcy court orders to the district court. The district court found that “the Bankruptcy Court was without jurisdiction to interpose itself in the [administrative] process [of CMS], including entering an injunction to enjoin the provider agreements’ termination.”
The United States was represented in all the above cases by Assistant United States Attorneys Sean Flynn and Christopher Emden.
Bayou Shores SNF LLC v. Burwell, et al.
Case no. 8:14cv1849-T-33MAP (M.D. Fla.)
In re: Bayou Shores SNF LLC,
Case no. 8:14cv2816-T-30 (M.D. Fla.)
Defendants and Charges added to Stolen Identity Tax Refund Fraud Scheme IndictmentRead the Press Release
HOUSTON – A Houston federal grand Jury has added three defendants and additional conspiracy charges to a November 2014 Stolen Identity Refund Fraud (SIRF) indictment, announced U.S. Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service - Criminal Investigation (IRS-CI). The prosecution is part of a national Stolen Identity Refund Fraud initiative that has resulted in a number of prosecutions throughout the United States in recent months.
The original 22-count indictment charged Ronald Dewayne Hadley with the filing of 22 of stolen identity income tax refund claims. The 29-count superseding indictment returned July 1, 2015, adds defendants Lyndell Leroy Price, Leondray Demond Garrison aka “Dre” and Ryan Duron Clay aka “Clayday” and charges all three with conspiracy and additional false tax refund claims totaling approximately $135,555.
The defendants are expected to make their initial appearances tomorrow at 10:00 a.m. before U.S. Magistrate Judge Frances Stacy. The case is presently assigned to U.S. District Judge Melinda Harmon and set for trial July 20, 2015.
The superseding indictment alleges these defendants conspired to obtain identity information. They then allegedly used that information to file 28 false tax returns indicating all of the taxpayers were “barbers” with only “dividend income” who were entitled to a full refund of a fictitious amount of withholding taxes ranging from $4,977 to $6,733. According to the superseding indictment, the defendants conspired to have the IRS deposit the fraudulent refunds to debit cards which were then emptied and shared. The indictment further alleges that in a few instances, the debit cards were used to make purchases directly from local merchants.
The defendants face up to ten years in federal prison on the conspiracy charge and up to five years in federal prison on each of the 28 false claim charges. The face a fine of up to $250,000 fine on each count of conviction.
The case, investigated by IRS-CI, is being prosecuted by Assistant U.S. Attorney Jimmy Sledge Jr.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Defendants Sentenced in Undercover Enticement OperationRead the Press Release
AMARILLO, Texas — Seven of the nine defendants who pleaded guilty to offenses stemming from an undercover enticement operation conducted by multiple law enforcement agencies earlier this year, have been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas. Five of the seven were sentenced this week.
On July 7, 2015, Aaron Joe Davis, 39, was sentenced to 121 months in federal prison. He pleaded guilty in April 2015 to one count of attempted enticement of a child. Robert James Tidwell, 21, was sentenced to five years’ probation with the first six months to be served in home confinement. He pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor. Kolby Shelb Kemp, 22, was sentenced to 21 months in federal prison. He also pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor.
On July 6, 2015, Brad Eugene Sharber, 45, and Daniel Lee Garcia, 38, were each sentenced to 24 months in federal prison. Each pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor.
On June 9, 2015, Jeffery Robert Abraham, 32, was sentenced to 21months in federal prison. He pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor.
On May 15, 2015, Mario Simental, 28, was sentenced to 120 months in federal prison. He pleaded guilty in March 2015 to one count of attempted enticement of a child.
The two remaining defendants, Kyle Andrew Adair, 22, and Charles Alexander Diaz, 20, have each pleaded guilty to one count of attempted transfer of obscene material to a minor and are awaiting sentencing. Each faces a statutory maximum penalty of 10 years in federal prison and a $250,000 fine.
All defendants with the exception of Tidwell, who is from Pampa, Texas, are Amarillo, Texas, residents.
The cases were brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the Texas Department of Public Safety, Amarillo Police Department, Randall County Sheriff’s Office, Potter County Sheriff’s Office, Randall County District Attorney’s Office, Potter County District Attorney’s Office, West Texas A&M Police Department, Canyon Police Department, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the U.S. Marshals Service.
Assistant U.S. Attorneys Joshua Frausto and Timothy Hammer are prosecuting.
Covan World Wide Moving, Inc., Coleman American Moving Services, Inc. and other related entities Settle False Claims Act Cases for $5,000,000.00Read the Press Release
Contact Person: Bill Nettles (803) 929-3000
COLUMBIA, South Carolina ---- United States Attorney Bill Nettles announced today that the United States Attorney's Office for the District of South Carolina, settled claims of fraud with Covan World Wide Moving, Inc., Coleman American Moving Services, Inc., and other related entities with home offices in Dothan, Alabama. The United States contended that Covan and others increased the weights of shipments and storage of servicemember’s and federal employee’s household goods and then submitted claims for payment to the government for the inflated weights.
The investigation began with the filing of whistleblower lawsuits called qui tams lawsuits under the False Claims Act. The suits were filed by employees of Covan’s Augusta, Georgia facility who witnessed the falsification of weight tickets ultimately used to bill the government. The False Claim Act allows the government to recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim. This settlement includes repayment of actual damages and penalties.
The False Claims Act allows individuals to file lawsuits with allegations that fraud has been committed against the federal government on behalf of the government. Whistleblowers, referred to as Relators in the False Claims Act, are entitled to share in any recovery received by the government. In this case, the two relators collectively will receive 25% of the funds of the settlement or $1,250,000.00 plus they are entitled to attorney fees.
Mr. Nettles said “fraud on the government is high priority in this office. Monies paid to Covan for inflated weights could have been used for the benefit of our servicemembers. Our aggressive pursuit of this case is further proof of our commitment to combat fraudulent claims made against the Federal Government.”
This case was handled by Assistant United States Attorneys Fran Trapp, Jennifer Aldrich and Stan Ragsdale. The case was investigated by the Defense Criminal Investigative Service, the U. S. Army Criminal Investigative Command, and the Office of the Inspector General for General Services Administration.
Frank Robey, the director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit said "We are very pleased with today's announcement and the result of all the hard investigative work and agency cooperation regarding this investigation. We would also like to thank the honest citizens who came forward and did the right thing which allowed us to fully investigate these allegations and reach today's settlement."
John F. Khin, Special Agent in Charge of the DCIS Southeast Field Office stated "The transportation of household goods is essential to the military's logistics program, enabling our warfighters and their families to get to station and ready to assume their duties, wherever on the globe they may be assigned. The Defense Criminal Investigative Service (DCIS) remains vigilant to ensure DOD programs are free from fraud and those who wish to take advantage of the U.S. Military."
General Robert C. Erickson, General Services Administration Acting Inspector General said "I appreciate all of the hard work on this case. We will continue working with law enforcement partners to investigate allegations of fraud against the United States."
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Chicago Woman Sentenced to Two Years in Prison for Money Laundering, False Statements to Law Enforcement and Federal Grand JuryRead the Press Release
Springfield, Ill. – A Chicago woman has been ordered to serve two years in federal prison for her role in a state grant fraud scheme and for repeatedly making false statements to federal agents and the grand jury investigating the scheme. Jeri L. Wright, 49, of Hazel Crest, Ill., appeared today before U.S. District Judge Sue E. Myerscough in Springfield. Wright was also ordered to serve three years on supervised release following her release from prison, the first six months of which are to be served as home confinement with electronic monitoring. Wright was ordered to pay restitution in the amount of $31,821 to the Illinois Department of Commerce and Economic Opportunity.
Following today’s hearing, Wright was remanded to the custody of the U.S. Marshals Service. Wright has remained in law enforcement custody since Feb. 23, 2015, when Judge Myerscough revoked Wright’s personal recognizance bond upon finding probable cause that Wright had participated in an unrelated payroll fraud scheme involving an Indiana employment agency while on bond.
On Mar. 7, 2014, a jury convicted Wright on all counts charged in the indictment: money laundering (two counts); making false statements to federal law enforcement officers (two counts); and giving false testimony before a grand jury (seven counts), related to an investigation of fraudulent use of Illinois Department of Commerce and Economic Opportunity grant funds. At trial, the government presented evidence that Wright participated in a fraud scheme led by her friend, former Country Club Hills, Ill., police chief Regina Evans, that misused a $1.25 million grant awarded in 2009 to We Are Our Brother’s Keeper, a not-for-profit program owned and operated by Regina Evans and her husband, Ronald Evans. Wright was also convicted for making false statements to law enforcement during interviews in 2012 and to a federal grand jury in November 2012.
Regina Evans pled guilty to the fraud scheme and was sentenced on May 1, 2014, to 60 months in prison; Ronald Evans pled guilty and was sentenced on July 25, 2014, to 12 months in prison followed by six months home confinement. The couple was ordered to pay restitution in the amount of $917,194. The grant agreement was purportedly to provide bricklaying and electrical pre-apprenticeship training and GED preparation, at the Regal Theater, another entity owned by the Evanses. In fact, little, if any, of the training provided in the grant agreement was ever completed.
The investigation was conducted by federal law enforcement officers and agencies that support the Central District of Illinois U.S. Attorney’s Office’s Public Corruption Task Force: U.S. Postal Inspection Service, Chicago Division; Internal Revenue Service, Criminal Investigation Division, Chicago Field Office; the Illinois Secretary of State Office of Inspector General; and, Illinois State Police, Division of Internal Investigations. Assistant U.S. Attorney Timothy A. Bass prosecuted the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois.
Chicago Man Charged with Possessing with Intent to Distribute Heroin Found During Body Cavity SearchRead the Press Release
Willie Gerald Humphrey, age 27, from Chicago, Illinois, has been charged with one count of possession with intent to distribute heroin. The charge is contained in a Complaint filed on July 7, 2015, in United States District Court in Cedar Rapids.
The Complaint alleges that, on or about February 26, 2015, Humphrey was being watched by officers with the Cedar Rapids Police Department in relation to a heroin investigation. After observing what the officers believed was a heroin transaction between Humphrey and an assumed customer, the officers stopped this person and eventually found .2 grams of suspected heroin hidden in the person’s shoe. The officers then stopped Humphrey’s vehicle. The officers could smell the odor of burnt marijuana emanating from Humphrey’s vehicle, and detained him and his passenger. Officers found $1,049 in cash during an initial search of Humphrey’s person, but found no drugs on him, the passenger, or in the car. The officers then obtained a search warrant and found seven individually wrapped amounts of suspected heroin hidden inside Humphrey’s body.
If convicted, Humphrey faces a possible maximum sentence of 20 years’ imprisonment, a $1,000,000 fine, $100 in special assessments, and up to a lifetime of supervised release following any imprisonment.
Humphrey appeared on July 8, 2015, in federal court in Cedar Rapids and was held without bond. Humphrey’s next appearance for an arraignment has not yet been set.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the Cedar Rapids Police Department Narcotics Unit and the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Cedar Rapids Police Department; the Linn County Sheriff's Office; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement, and is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-mj-218-JSS.
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Charlotte Man Sentenced in Luxury Automobile Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – Michael A. Marshall, 38, of Charlotte, was sentenced today to serve 96 months in prison and to pay $425,442 as restitution for committing bank fraud and related charges, in connection with an automobile loan scheme involving luxury vehicles, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney ordered Marshall to serve the 96-month sentence consecutive to the sentence Marshall previously received for a probation violation from his prior federal felony.
Acting U.S. Attorney Rose is joined in making today’s announcement by Ryan L. Spradlin, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas.
According to filed court documents and court proceedings, from August 2012 to February 2013, Marshall and his co-defendant, Frederick D. Neal, engaged in a fraudulent loan scheme involving luxury vehicles the men purchased in Neal’s name. Court records show that Marshall generally provided the down-payment money for the purchase of the vehicles, and arranged to finance the rest via automobile loans in Neal’s name. Court records indicate that the conspirators obtained the loans by making false statements on the loan applications to the automobile lenders, including falsely claiming that Neal earned over $8,000 per month.
According to court records, the two men fraudulently obtained at least seven luxury vehicles, including a 2009 Maserati Grand Turismo, a 2006 Bentley, a 2011 Porsche Panamera and a 2009 Mercedes Benz SL550, among others. Marshall and Neil “leased” some of the vehicles to others through “Luxotic Rentals, Inc.” (Luxotic), a company controlled by Marshall. Eventually, the vehicles were fraudulently sold to third parties, after “wiping” their titles shortly after obtaining them, according to court records. To get the clean titles, Marshall created fake letters from the automobile lenders purporting to be lien releases for the vehicles, falsely stating that the liens were paid off. Marshall then filed the false lien releases with the North Carolina Division of Motor Vehicles to request and obtain new titles. According to court records, using the new, clean titles, Marshall sold the vehicles to third parties, as if the luxury vehicles were owned free and clear of any liens. According to court records, the scheme caused the lenders a loss of approximately $425,442.
In May 2014, a federal jury found Marshall guilty of conspiracy to commit offenses against the United States, including making false statements to financial institutions, bank fraud and money laundering conspiracy. Neal was sentenced in February 2015 to 18 months in prison, three years of supervised release and was ordered to pay $425,442 as restitution, after pleading guilty to conspiracy to commit offenses against the United States.
The investigation was handled by HSI with the assistance of the North Carolina Division of Motor Vehicles. Assistant U.S. Attorney Kevin Zolot prosecuted the case.
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In a related case, on Wednesday, July 8, 2015, Judge Whitney sentenced Seth Kamose Ali, 42, of Charlotte, to 18 months in prison for assaulting an officer. Court records indicate that while investigating Marshall’s case, law enforcement determined that Ali had notarized at least four of the fraudulent lien release documents used by Marshall to obtain the clean car titles. According to court records, when a federal agent attempted to serve Ali with a trial subpoena in connection with Marshall’s case, Ali slammed his car door on the agent’s hand and attempted to flee by driving his vehicle at high speed toward the agent. A federal jury convicted Ali of assaulting an officer, including acts involving physical contact and inflicting bodily injury.
This investigation was handled by HSI. Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte handled the prosecution.
Central Valley Drug Trafficking Group IndictedRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 22-count indictment Thursday against 13 defendants from Sacramento, Delano (Kern Co.) and Phoenix, Arizona, charging them with illegally trafficking large amounts of methamphetamine, heroin, cocaine, and marijuana, United States Attorney Benjamin B. Wagner announced.
The defendants named in the indictment are:
Jose Manuel Valdez Torres, 39, fugitive, of Delano/Phoenix;
Roberto Gomez Jr., 25, of Antelope;
Leonel Valdez Ayon, aka Leonel Valdez Gonzalez, 27, of Delano;
Leobardo Martinez-Carranza, 22, of Delano;
Edgar Eduardo Herrera, 21, fugitive, of Delano;
Enrique Alonso Valdez Yanez, 38, fugitive, of Mexico;
Jason Duane Rogers, 43, of Citrus Heights;
Shannon Anthony Armstrong, 40, of El Dorado Hills;
Bradley Gene Ward, 36, of Carmichael;
David Andrews Uhrig, 44, of Orangevale;
William James Welch, 53, of Citrus Heights;
Michael William McGibbon, 39, of Citrus Heights, and
Jesus Hunberto Zurita Sicairos, 26, of Phoenix, Arizona.According to court documents, an investigation indicated that Valdez Torres was arranging to smuggle multi-kilogram quantities of methamphetamine, heroin, and cocaine from Mexico into the United States. Once here, the drugs were stored at stash houses in Delano, Sacramento, and Phoenix. The drugs were then sold in ounce and pound quantities to various distributors. On June 24-26, 2015, in a coordinated law enforcement operation, search warrants for 11 residences were executed (three in Delano, eight in the Sacramento area, and one in Phoenix) and 10 individuals were arrested. Over 50 pounds of methamphetamine, a kilogram of heroin, smaller amounts of cocaine and marijuana, and over $275,000 in cash were seized. Numerous firearms were also seized. Gomez, Ward and Welch are each charged with illegal possession of firearms.
This case is the product of an investigation by the U.S. Drug Enforcement Administration Kern County Sheriff’s Office, the Central Valley HIDTA, the Sacramento Sheriff’s Office, the Folsom Police Department, the Citrus Heights Police Department the Arizona HIDTA Initiative, the Maricopa County Drug Suppression Task Force, the Maricopa County Sheriff's Office, the police departments of Tempe, Phoenix, Surprise, and Buckeye, the US Border Patrol, the Phoenix DO Enforcement Group, and the Maricopa County Sheriff's Office Tactical Operations Unit. Assistant United States Attorney Christopher Highsmith is prosecuting the case.
All defendants are named in the first count of the indictment which charges conspiracy to distribute, and to possess with the intent to distribute, methamphetamine, heroin, and cocaine. If convicted on this count, they each face a statutory maximum penalty of life in prison and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was investigated and prosecuted under Organized Crime Drug Enforcement Task Force (OCDETF) Program. The OCDETF Program was established in 1982 to conduct comprehensive, multilevel 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.
Bucks County Man Charged with Running Ponzi SchemeRead the Press Release
PHILADELPHIA - Bogdan K. Stepien, 34, of Richboro, PA, was charged today by indictment with running a Ponzi scheme in which he claimed to be a successful “day trader” and recruited friends and family members to “invest” with him. Stepien is charged with 19 counts of wire fraud, three counts of aggravated identity theft, and four counts of passing counterfeit and forged checks, announced United States Attorney Zane David Memeger.
According to the indictment, between 2011 and 2014, Stepien received funds from each of eight individuals and instead of engaging in high frequency trading with those funds, he used them to pay for his own personal expenses. It is further alleged that to lull his victims into believing that he was successfully investing their funds, Stepien sent them bogus trading account statements and spreadsheets that purported to show their growing investment returns. He allegedly used some of the investor funds to pay what he characterized as distributions or profits to some of his investors when, in fact, the funds were not profits but were merely some of the investors’ principal. In connection with the scheme, Stepien allegedly used the name, address, and forged signature of one of his victims in performing several wire transfers of the victim’s funds to an account in Stepien’s name and for Stepien’s benefit.
The indictment further alleges that on four separate occasions, between August 2014 and April 2015, Stepien passed counterfeit and forged checks in order to purchase luxury automobiles and real estate. Stepien allegedly used two checks, each for over $100,000, to purchase new, custom-ordered Mercedes-Benz automobiles. He allegedly used another check, for more than $70,000, to purchase a new GMC Yukon Denali automobile. He is also charged with purchasing real estate with a bogus $400,000 check. Most of these checks were altered so that they appeared to be official checks, and none of the checks were legitimate.
If convicted, the defendant faces a mandatory minimum prison term of two years for aggravated identity theft with a maximum possible sentence of 20 years for each count of wire fraud, ten years for each count of passing counterfeit and forged checks, three years of supervised release, a fine of up to $6.5 million, a $2,600 special assessment, and full restitution.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Nancy E. Potts.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bristol Man Pleads Guilty to Domestic Violence ChargesRead the Press Release
TALLAHASSEE, FLORIDA – Robert W. McCandless, 38, of Bristol, Florida, pled guilty today to interstate domestic violence and interstate violation of a protection order. The plea was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
During his plea, McCandless admitted to violating a protection order by unlawfully entering the victim’s residence on January 16, 2015. McCandless and the victim had lived together for approximately five years and had two children. After attempting to strangle the victim with a communications cord, McCandless forced her and their children to leave Liberty County with him in the victim’s vehicle. Approximately eight hours later, law enforcement agents pulled over the victim’s vehicle in South Carolina and arrested McCandless. The victim received medical treatment for injuries consistent with strangulation. Law enforcement agents obtained a search warrant for the victim’s residence and found evidence of an assault. The communications cord was also analyzed and found to have the victim’s blood and DNA on it.
Sentencing is scheduled for October 1, 2015, at 9:00 a.m. at the United States Courthouse in Tallahassee, Florida. McCandless faces a maximum of ten years’ imprisonment on each separate count of conviction.
The case was investigated by the Federal Bureau of Investigation, the Florida Department of Law Enforcement, the Liberty County Sheriff’s Office, and the Clarendon County Sheriff’s Office in South Carolina, whose joint investigation led to the charges in this case. It was prosecuted by Assistant United States Attorney Stephen M. Kunz.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Bradenton Man Arrested for Distributing Methamphetamine Disguised as CandyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the filing of a criminal complaint charging Jesus Casteyano, a/k/a Jesus Castellano, a/k/a Jesus Castellano-Andrade (53, Bradenton), with conspiracy to possess with the intent to distribute and distribution of 500 grams or more of methamphetamine. If convicted, he faces a mandatory minimum penalty of 10 years, up to life, in federal prison. Casteyano made his initial appearance in federal court yesterday and was detained pending trial.
According to the complaint, Casteyano and others agreed to distribute and distributed 500 grams or more of a mixture containing a detectable amount of methamphetamine that was contained in and packaged as retail candy. (Criminal Complaint Exhibit A)
A criminal complaint is merely an allegation that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Manatee County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Matthew Perry.
Attorney General Lynch Announces Federal Marriage Benefits Available to Same-Sex Couples NationwideRead the Press Release
Attorney General Lynch announced today that federal marriage benefits will be available to same-sex couples nationwide following the Supreme Court ruling in Obergefell v. Hodges:
“Following the Supreme Court’s historic decision in Obergefell that every couple has the same right to participate in the institution of marriage, whether the partners are of the same-sex or opposite sexes, I directed Justice Department staff to work with the agencies to ensure that the ruling be given full effect across the federal government. Thanks to their leadership and the quick work of the Social Security Administration and the Department of Veterans Affairs, today I am proud to announce that the critical programs for veterans and elderly and disabled Americans, which previously could not give effect to the marriages of couples living in states that did not recognize those marriages, will now provide federal recognition for all marriages nationwide. The agencies are currently working towards providing guidance to implement this change in law. Just over a year ago, Attorney General Holder announced that agencies across the federal government had implemented the Supreme Court’s Windsor decision by treating married same-sex couples the same as married opposite-sex couples to the greatest extent possible under the law as it then stood. With the Supreme Court’s new ruling that the Constitution requires marriage equality, we have now taken the further step of ensuring that all federal benefits will be available equally to married couples in all 50 states, the District of Columbia and the US Territories. The department will continue to work across the administration to fulfill our commitment to equal treatment for all Americans, including equal access to the benefits of marriage that the Obergefell decision guarantees.”
Aryan Brotherhood of Texas Captain Charged with Illegally Possessing Multiple FirearmsRead the Press Release
Memphis, TN – A high-ranking member of a white supremacist gang was indicted this week for possessing multiple firearms while a felon.
On April 4, 2015, Memphis Police officers responded to a domestic violence complaint. Upon arriving at the scene, officers encountered a woman who came running out of an apartment in emotional distress. She informed officers that her boyfriend, 52-year-old Joseph Shields, was armed with a large firearm and had threatened to kill her. She alleged Shields refused to let her leave their apartment, placed a rifle to her forehead, and threatened to pull the trigger.
Vickers informed officers that Shields was still inside the house and armed with a firearm. Officers subsequently drew their weapons and began giving verbal commands into the apartment for Shields to exit and surrender. Shields refused to comply with the officers’ demands, motivating them to dispatch additional law enforcement personnel to the scene. Officers held the door and continued to give loud verbal commands for the suspect to come out before entering the house and searching for Shields. They discovered a loaded 12-gauge shotgun, two rifles, and numerous rounds of ammunition. But Shields was no longer inside the residence.
Customers at a nearby ice cream stand, Jerry’s Sno Cones, advised officers that they witnessed Shields running from the apartment complex. The witnesses pointed the officers in the direction Shields fled. Officers began travelling in the specified direction and located Shields shortly after. They were able to detain him after a brief struggle.
Shields admitted to law enforcement that he is a captain within the Aryan Brotherhood of Texas (ABT). An unaffiliated spin-off of the white supremacist prison gang, Aryan Brotherhood, ABT is a violent, Texas-based crime syndicate responsible for multiple murders, robberies, aggravated assaults, as well as drug trafficking.
In addition to confiscating ammunition, a loaded shotgun and two rifles — one of which had been stolen out of Tipton County — officers located a large black gun safe with an unspecified number of additional firearms in Shields’ apartment.
Shields’ case is being investigated by the Memphis Police Department. Special Assistant U.S. Attorney Dean DeCandia is representing the government in this case.
Shields faces up to 10 years in federal prison and up to $250,000 in fines if convicted.
The charges and allegations contained in indictments are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Arizona Woman Pleads Guilty to Federal Narcotics Trafficking Charges in New MexicoRead the Press Release
ALBUQUERQUE – Serina Josephina Rivera, 27, of Sells, Ariz., entered a guilty plea yesterday in federal court in Albuquerque, N.M., to methamphetamine and heroin trafficking charges under a plea agreement with the U.S. Attorney’s Office.
Rivera and co-defendant Anna Maria Rodriguez, 32, of Phoenix, Ariz., were arrested on April 25, 2014, and charged in a criminal complaint with possession of methamphetamine and heroin with intent to distribute in Bernalillo County, N.M. According to the complaint, New Mexico State Police recovered bundles containing 5.9 pounds of methamphetamine and 2.8 pounds of heroin which were concealed in the vehicle that Rivera and Rodriguez were driving during a routine traffic stop.
Rivera and Rodriguez were subsequently charged in a three-count indictment that was filed on May 21, 2014. The indictment charged the two women with (1) conspiracy to distribute heroin and methamphetamine, (2) possession of heroin with intent to distribute, and (3) possession of methamphetamine with intent to distribute on April 25, 2014, in Bernalillo County.
During yesterday’s proceedings, Rivera pled guilty to the two counts of the indictment charging her with possession of heroin and methamphetamine with intent to distribute. Rivera admitted that she and Rodriguez were stopped by law enforcement in New Mexico on April 25, 2014, while driving a vehicle containing five packages of methamphetamine and two packages of heroin from Phoenix, Ariz., to Dallas, Texas.
Rodriguez pled guilty to the same charges on June 5, 2015. At sentencing Rivera and Rodriguez each face a maximum penalty of 20 years in prison followed by not less than three years of supervised release. Sentencing hearings have yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorney Joel Meyers is prosecuting the case.
This case was prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Amarillo Man Pleads Guilty to Attempted Child Sex Trafficking OffenseRead the Press Release
AMARILLO, Texas — An Amarillo man appeared in federal court today before U.S. District Judge Mary Lou Robinson and pleaded guilty to an indictment charging one count of attempted sex trafficking of a child, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Deswan Newsome, 19, faces a statutory penalty of not less than 10 years and up to life in federal prison and a $250,000 fine. A sentencing date was not set.
According to plea documents filed in the case, Newsome admitted that from approximately March 30, 2015 to April 3, 2015, he attempted to recruit a 15-year-old girl to engage in commercial sex acts.
The investigation began when a Task Force Officer (TFO) with U.S .Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) learned that a particular individual was using Facebook to recruit and entice teenage females for prostitution. In March 2015, the TFO set up an undercover Facebook account representing himself as a 15-year-old female, “A.M.,” and the two exchanged messages about A.M. working as a prostitute, with the individual claiming, “You can make 2500 in a week if you really put the work into it.” The individual sent A.M. his phone number and the two discussed a meeting, however the conversation ended without any arrangements being made.
On April 1, 2015, the TFO (A.M.) received a private message on his undercover Facebook account from “Deswan Newsome,” later identified as defendant Newsome. Newsome and A.M. exchanged messages about A.M. engaging in prostitution, and A.M. advised Newsome that she was 15-years-old.
On April 2, 2015, an Amarillo Police Department officer, posing as A.M., made a phone call to Newsome, who answered, but then turned the call over to a female who provided more details about prostitution to A.M. A.M. advised this female that she was 15-years-old.
On April 3, 2015, A.M. and Newsome exchanged messages and arranged to meet at a convenience store in Amarillo so A.M. could engage in prostitution. When Newsome arrived at the location, he was identified and taken into custody. Newsome admitted talking to A.M. on Facebook and said that he was going to have someone else teach her how to perform sex acts, and that he’d get 60 percent of the money she made for performing the commercial sex acts.
The Amarillo Police Department and HSI investigated. Assistant U.S. Attorneys Timothy Hammer and Joshua Frausto are prosecuting.
Albuquerque Man Sentenced to Prison for Federal Heroin Trafficking ChargeRead the Press Release
ALBUQUERQUE – David Godfrey, Jr., 28, of Albuquerque, N.M., was sentenced today in federal court to 60 months in prison for his heroin trafficking conviction. Godfrey will be on supervised release for four years following his term of incarceration.
Godfrey was arrested on Sept. 8, 2014, on a two-count indictment charging him with distribution of more than 100 grams of heroin and using and carrying a firearm in relation to a drug trafficking crime. According to the indictment, Godfrey committed the crime on Feb. 13, 2013, in Bernalillo County, N.M.
On April 6, 2015, Godfrey pled guilty to Count 1 of the indictment charging him with distribution of heroin. In entering the guilty plea, Godfrey admitted that on Feb. 13, 2013, he handed a bag containing more than 100 grams of heroin to another person in northeast Albuquerque. Godfrey also admitted that at the time he had a .45 caliber pistol in his waistband for protection.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorney Paul Mysliwiec prosecuted the case.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaboration between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
A Carjacking Spree Leads to Consecutive Federal Sentences for Two Miami ResidentsRead the Press Release
Two men were sentenced to decades in prison, following their participation in a carjacking spree in Miami-Dade and Broward Counties.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), J.D. Patterson Jr., Director, Miami-Dade Police Department (MDPD), Sergio Velazquez, Chief, City of Hialeah Police Department, and Tomas Sanchez, Interim Chief, City of Hollywood Police Department, made the announcement.
Ty West, 19, and Demetrius Bain, 19, both of Miami-Dade County, were sentenced by United States District Court Senior Judge James Lawrence King to consecutive terms of imprisonment totaling 32 years and 35 years respectively, for possession of a firearm by a convicted felon, carjacking and brandishing firearms during a crime of violence, in violation of Title 18, United States Code, Sections 922(g)(1), 2119(1) and 924(c)(1)(A)(ii). Upon completion of their prison sentences, the defendants will be placed on supervised release. West will be on supervised release for a period of five years and Bain for ten years.
According to court documents and information provided in court, on June 19, 2014, West was in the City of Hialeah when he brandished a firearm and threatened to kill the vehicle occupants before he took possession of the car. Days later, on June 26, 2014, West was seen running through private property with a firearm, in Miami-Dade County. Police arrested West and recovered the firearm. However, police were not yet aware of West’s involvement in the earlier carjacking and he was released from state custody.
On July 14, 2014, in the City of Hialeah, Bain and West brandished firearms, ordered a couple from their vehicle, and then stole the victims’ car. A few hours later, West and Bain would later use the stolen vehicle to facilitate the carjacking of a young mother in Broward County. The defendants drove to a residential neighborhood in Hollywood, Florida. As the victim attempted to retrieve her child from the vehicle, Bain approached, brandishing a firearm and demanded that the mother give him her purse. Bain removed the keys from the purse and entered the victim’s vehicle. Just moments before the defendant drove away in the stolen car, the victim was able to recover her child from the vehicle. Police later observed West driving the stolen vehicle in Miami-Dade County. An investigation by law enforcement, including fingerprint examinations and eyewitness statements, linked both West and Bain to the offenses for which they previously pleaded guilty.
Mr. Ferrer commended the investigative efforts of the ATF, MDPD, City of Hialeah Police Department, and City of Hollywood Police Department. This case was prosecuted by Assistant U.S. Attorney Breezye Telfair.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Wednesday 8 July 2015
Uniontown Man Admits Distributing Child Porn VideoRead the Press Release
PITTSBURGH - A Fayette County resident pleaded guilty in federal court to a charge of distribution of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
Ronald Rhodes, 58, of Uniontown, Pa., pleaded guilty to one count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, on or about April 3, 2014, Rhodes distributed a video containing material depicting the sexual exploitation of minors.
Chief Judge Conti scheduled sentencing for Oct. 14, 2015, at 3:30 p.m. The law provides for a maximum total sentence of 30 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
Homeland Security Investigations and the United States Postal Inspection Service conducted the investigation that led to the prosecution of Rhodes.
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.
Two Sentenced to Federal Prison on Child Pornography ChargesRead the Press Release
In Waco today, 34-year-old Justin Keith Vega of Temple, TX, was sentenced to the statutory maximum of 30 years in federal prison for production of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Walter S. Smith, Jr., ordered that Vega pay a $5,000 fine and be placed on supervised release for the remainder of his life after completing his prison term.
On April 30, 2015, Vega pleaded guilty to one count of production of child pornography. By pleading guilty, Vega admitted that in December 2014, he enticed and coerced a six-year old female to engage in sexually explicit conduct for the purposes of producing visual depictions of the activity. This investigation was conducted by the FBI together with the Temple Police Department.
Also today, in an unrelated matter, Judge Smith sentenced 26–year-old Otis Cortez Williams of Killeen, TX, to ten years in federal prison followed by five years of supervised release for possession of child pornography. Williams pleaded guilty to the charge on May 14, 2015. According to court records, investigators with the Texas Attorney General’s Office discovered that Williams was trafficking in child pornography and in April 2014, they executed a search warrant at the defendant’s residence. A subsequent forensics examination of seized materials, including the defendant’s computer and related media, revealed the presence of approximately 9,500 images and 400 videos depicting child pornography.
“The United States Attorney’s Office will continue to work with local, state, and federal agencies to prosecute predators who victimize children by creating, possessing, and distributing child pornography. Children are some of our most vulnerable victims. Today’s sentences ensure that these defendants will not pose a threat to children for some time to come,” announced Acting United States Attorney Richard L. Durbin, Jr.
Assistant United States Attorneys Mark Frazier and Greg Gloff prosecuted these cases on behalf of the Government.
Two Northern California Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
Two Northern California real estate investors pleaded guilty for their role in bid-rigging conspiracies and mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced today.
Real estate investors John Shiells, of Danville, California, and Miguel De Sanz, of San Francisco, each pleaded guilty to three counts of bid rigging and three counts of mail fraud in the U.S. District Court of the Northern District of California in Oakland, California, today. Both were charged in an indictment returned by a federal grand jury in the Northern District of California on Nov. 19, 2014.
“These defendants took turns paying others or being paid by others to not bid at foreclosure auctions, all so that the conspirators could buy properties at reduced prices,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The defendants and their co-conspirators corrupted these auctions and deprived lenders and homeowners of auction proceeds that were rightfully theirs.”
To date, 56 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. In addition, multi-count indictments are pending against 19 real estate investors that have been charged for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo and San Francisco counties.
According to court documents, Shiells and De Sanz agreed not to compete to purchase selected properties at public real estate foreclosure auctions, designated which conspirator would win the selected properties and refrained from bidding on the selected properties at the public auctions. This collusion began in Alameda County as early as June 2007; in Contra Costa County as July 2008; and in San Francisco County as early as November 2008. The deals continued until approximately January 2011.
Both Shiells and De Sanz were also charged with using the mail to carry out the schemes to fraudulently acquire the titles to selected properties sold at public auctions in Alameda, Contra Costa and San Francisco counties, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries.
“The FBI continues to work closely with the Antitrust Division to target those individuals who engage in fraudulent bid rigging and other anticompetitive activities at foreclosure auctions,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division. “We are committed to bringing to justice those who engage in illegal and unfair practices that adversely impact legitimate home buyers and sellers.”
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for violations of the Sherman Act may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties in California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Division. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Two Men Found Guilty of Wilson PNC Bank RobberyRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced that Monday in federal court, a jury found ROBERT EARL MAYS and PARIS CORDAVA WILLIAMS, from the District of Columbia, guilty of bank robbery and aiding and abetting. WILLIAMS also was found guilty of possession of a firearm by a felon. The Honorable James C. Fox was the presiding United States District Court Judge.
According to the investigation, MAYS and WILLIAMS were traveling with a third man, RICKY FRANKS, in a car rented by FRANKS from the District of Columbia. On November 13, 2014, close to closing time, WILLIAMS and FRANKS entered the PNC Bank located at 3401 Raleigh Road Parkway in Wilson, North Carolina and robbed it. FRANKS vaulted the teller counter and took approximately $1,579.00 in United States currency from a teller’s drawer. When FRANKS grabbed the money, he also grabbed the GPS tracking device. FRANKS and WILLIAMS hid with the money and tracking device in the trunk of the rental car. MAYS drove the car a short distance away. The Wilson Police Department was alerted of the robbery and also notified that the moving tracking device became stationary on Raleigh Road. After a systematic search of cars in a stopped line of traffic near the bank, by Wilson Police Department officers, officers located FRANKS and WILLIAMS in the car’s trunk with the bag of money, GPS tracker and a firearm.
FRANKS pled guilty to bank robbery and possession of firearm by a felon before trial.
Investigation of this case was conducted by the Federal Bureau of Investigation, and the Wilson Police Department. The Bureau of Alcohol, Tobacco, Firearms, and Explosives also assisted. Assistant United States Attorneys S. Katherine Burnette and Carrie D. Randa represented the government.
Three Real Estate Developers Sentenced to Prison for their Roles in $27.8 Million Mortgage Fraud SchemeRead the Press Release
Three Miami real estate developers were sentenced to prison terms today for their roles in a mortgage fraud scheme that caused losses of $27.8 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Nadine Gurley of the Department of Housing and Urban Development’s Office of Inspector General (HUD-OIG) and Special Agent in Charge Timothy A. Mowery of the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG) made the announcement.
Stavroula Mendez, 68, was sentenced to 135 months in prison; Lazaro Mendez, 42, was sentenced to 108 months in prison; and Marie Mendez, 49, was sentenced to 57 months in prison. U.S. District Judge Patricia A. Seitz of the Southern District of Florida also ordered each of the defendants to forfeit $35,252,331 in fraudulent proceeds and to pay $21,240,064 in restitution. In November 2014, all three defendants were convicted of wire fraud, bank fraud and conspiracy. Eleven other co-conspirators were previously convicted of fraud in connection with the scheme.
Stavroula Mendez, Lazaro Mendez and Marie Mendez owned, controlled or managed various condominium developments in the Miami area. According to evidence presented at trial, the defendants engaged in a scheme in which they facilitated payments to straw buyers as well as the submission of false loan applications on behalf of the straw buyers to secure mortgages to purchase units in the developments. Once the units were sold, the defendants retained both the profits from the sales and control over the units.
The trial evidence showed that Lazaro Mendez recruited family members and others to be straw buyers of units that he controlled at one development and that he facilitated the submission of false loan applications. In addition, Lazaro Mendez enlisted mortgage brokers and another individual to recruit straw buyers and to assist them in obtaining fraudulent loans. Lazaro Mendez received kickbacks for each referred buyer.
The evidence at trial demonstrated that, after units were sold at a development that Stavroula Mendez and her husband controlled, Stavroula Mendez funneled a portion of the loan proceeds to shell companies to pay the straw buyers’ closing cash obligations and mortgage payments. The evidence presented at trial further established that, in 2008 and 2009, Stavroula Mendez used other shell companies to divert more than $2 million of the fraudulent proceeds to bank accounts in Switzerland and Liechtenstein.
According to the evidence presented at trial, Marie Mendez used rental payments received by the conspirators to make mortgage payments, and directed cash to another individual to make mortgage payments on behalf of straw buyers. The evidence also showed that Marie Mendez submitted fraudulent loan applications for three condominium units that were purchased in her name.
Eventually, the defendants and their co-conspirators were unable to make mortgage payments, which caused dozens of condominium units to go into foreclosure. The scheme caused the Federal Housing Administration, Freddie Mac, Fannie Mae and private lenders to sustain combined losses of $27.8 million.
The case was investigated by the HUD-OIG and the FHFA-OIG. The case was prosecuted by Trial Attorneys Gary A. Winters, Brian R. Young and Kyle Maurer of the Criminal Division’s Fraud Section.
Three Real Estate Developers Sentenced to Prison for Their Roles in $27.8 Million Mortgage Fraud SchemeRead the Press Release
Three Miami real estate developers were sentenced to prison terms today for their roles in a mortgage fraud scheme that caused losses of $27.8 million.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Nadine Gurley of the Department of Housing and Urban Development’s Office of Inspector General (HUD-OIG) and Special Agent in Charge Timothy A. Mowery of the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG) made the announcement.
Stavroula Mendez, 68, was sentenced to 135 months in prison; Lazaro Mendez, 42, was sentenced to 108 months in prison; and Marie Mendez, 49, was sentenced to 57 months in prison. U.S. District Judge Patricia A. Seitz of the Southern District of Florida also ordered each of the defendants to forfeit $35,252,331 in fraudulent proceeds and to pay $21,240,064 in restitution. In November 2014, all three defendants were convicted of wire fraud, bank fraud and conspiracy. Eleven other co-conspirators were previously convicted of fraud in connection with the scheme.
Stavroula Mendez, Lazaro Mendez and Marie Mendez owned, controlled or managed various condominium developments in the Miami area. According to evidence presented at trial, the defendants engaged in a scheme in which they facilitated payments to straw buyers as well as the submission of false loan applications on behalf of the straw buyers to secure mortgages to purchase units in the developments. Once the units were sold, the defendants retained both the profits from the sales and control over the units.
The trial evidence showed that Lazaro Mendez recruited family members and others to be straw buyers of units that he controlled at one development and that he facilitated the submission of false loan applications. In addition, Lazaro Mendez enlisted mortgage brokers and another individual to recruit straw buyers and to assist them in obtaining fraudulent loans. Lazaro Mendez received kickbacks for each referred buyer.
The evidence at trial demonstrated that, after units were sold at a development that Stavroula Mendez and her husband controlled, Stavroula Mendez funneled a portion of the loan proceeds to shell companies to pay the straw buyers’ closing cash obligations and mortgage payments. The evidence presented at trial further established that, in 2008 and 2009, Stavroula Mendez used other shell companies to divert more than $2 million of the fraudulent proceeds to bank accounts in Switzerland and Liechtenstein.
According to the evidence presented at trial, Marie Mendez used rental payments received by the conspirators to make mortgage payments, and directed cash to another individual to make mortgage payments on behalf of straw buyers. The evidence also showed that Marie Mendez submitted fraudulent loan applications for three condominium units that were purchased in her name.
Eventually, the defendants and their co-conspirators were unable to make mortgage payments, which caused dozens of condominium units to go into foreclosure. The scheme caused the Federal Housing Administration, Freddie Mac, Fannie Mae and private lenders to sustain combined losses of $27.8 million.
The case was investigated by the HUD-OIG and the FHFA-OIG. The case was prosecuted by Trial Attorneys Gary A. Winters, Brian R. Young and Kyle Maurer of the Criminal Division’s Fraud Section.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Social Security Administration Benefits Authorizer and Four Others Charged in $1.9 Million Kickback SchemeRead the Press Release
CHICAGO — A benefits authorizer at the Social Security Administration in Chicago authorized over $1.9 million in fraudulent benefits to more than 150 recipients who kicked backed cash to him and several others, according to a federal indictment unsealed today.
The benefits authorizer, JAYSON CRUZ, 39, of Chicago, worked at the Social Security Administration’s Great Lakes Program Service Center in Chicago. Cruz and four others were arrested this morning by federal authorities.
The ten-count indictment, which was filed on June 30, 2015, and unsealed today following the arrests, alleges that the defendants fraudulently caused the Social Security Administration to issue more than $1.9 million in payments to approximately 154 recipients between approximately September 2009 and December 2013.
Cruz was charged with ten counts of wire fraud. MONICA KNOX-SUMRELL, 41; VONZELL WHITE, 33; MICHAEL ELARDE, 37; and JERRY BROWN JR., 36, all of Chicago, were each charged with two counts of wire fraud. All five defendants pleaded not guilty during their arraignments this afternoon before U.S. District Judge Virginia M. Kendall in Chicago. All five defendants were released on their own recognizance. Judge Kendall scheduled a status hearing for 9/16/15 for all defendants.
According to the indictment, Cruz was one of the Social Security Administration employees responsible for authorizing monthly Old-Age, Survivors, and Disability Insurance Benefits to beneficiaries, representative payees, qualifying family members and representatives of deceased beneficiaries. The indictment alleges that Cruz, Knox-Sumrell, White, Elarde, and Brown recruited recipients of these benefits to receive additional payments on top of what they were legitimately owed. After Cruz fraudulently authorized the excess payments, Cruz, Knox-Sumrell, White, Elarde and Brown collected the majority of the money back from the recruited individuals, according to the indictment. Cruz also fraudulently authorized “underpayments” to White, Elarde, Brown and others, by falsely representing that they were relatives or representatives of deceased beneficiaries who were owed money from the Social Security Administration, according to the indictment.
Cruz authorized the fraudulent payments by entering false codes into the Social Security Administration’s electronic system, the indictment alleges. According to the indictment, Social Security Administration procedures allowed Cruz to authorize a payment of less than $6,000.00 to a recipient without supervisor approval. Cruz authorized the fraudulent payments in amounts slightly less than $6,000 in order to avoid detection of the fraud, the indictment alleges.
The indictment also alleges that Knox-Sumrell falsely represented to recipients that she worked for the Social Security Administration in order to further the scheme
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tracey Thanos, Special Agent in Charge of the Chicago Field Division of the Social Security Administration’s Office of the Inspector General. “Employee fraud is something we take very seriously,” Thanos said. “We have no higher priority than investigating and pursuing justice whenever these instances occur, and we will continue to do so.”
The investigation is ongoing, the officials said.
The indictment seeks forfeiture from all five defendants of approximately $1,981,290, as well as a residence in Chicago. Each count of wire fraud carries a maximum sentence of 20 years in prison; a $250,000 fine, which may be increased to the greater of twice the gain or twice the loss3
from the crime; and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.The government is being represented by Special Assistant U.S. Attorney Heidi Manschreck.
Indictment
Sioux City Man to Federal Prison for Crack Cocaine ConspiracyRead the Press Release
A man who conspired to distribute crack cocaine was sentenced July 8, 2015, to more than five years in federal prison.
James Lillard, 34, from Sioux City, Iowa, received the prison term after an April 1, 2015, guilty plea to conspiracy to distribute crack cocaine.
At the guilty plea, Lillard admitted his involvement with the distribution of at least 28 grams but less than 112 grams of crack cocaine. On two separate occasions in July 2013, Lillard distributed a total of 4.9 grams of cocaine base to an individual cooperating with law enforcement.
Lillard was sentenced in Sioux City by United States District Court Judge Donald E. O’Brien. Lillard was sentenced to 70 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Lillard is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR14-4071.
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San Antonio Woman Indicted for Wire Fraud and Identity TheftRead the Press Release
In San Antonio today, a federal grand jury indicted 35-year-old Jessica Rivas Alva in connection with a scheme to defraud undocumented immigrants and their family members out of money by claiming to work on behalf of an attorney announced Acting United States Attorney Richard L. Durbin, Jr. and Homeland Security Investigations (HSI) Special Agent in Charge, James C. Spero.
The indictment charges the San Antonio resident with three counts of wire fraud and two counts of aggravated identity theft. According to court records, in April of 2015, Alva faxed forged letters whereby she fraudulently used the name and state bar number of two former employers, both of whom are San Antonio-based attorneys, to gain access to two immigration detention facilities in Louisiana. While at the South Louisiana Correctional Center in Basile and the LaSalle Detention Facility in Jena, Alva met with detained immigrants and offered to have the attorneys provide legal services for a fee. The immigrants’ families were then instructed to deposit those fees into a bank account that belonged to Alva. Alva was not an attorney and was not actually working for either attorney at the time she made the fraudulent representations. Furthermore, at the time Alva entered the detention facilities, she was enjoined by a Texas state court from entering any immigration facility in the United States unless accompanied by an attorney for whom she worked.
Wire fraud carries a maximum penalty of 20 years imprisonment upon conviction. Aggravated identity theft carries a mandatory minimum sentence of two years upon conviction. Both charges have a maximum fine of $250,000.
Last week, federal authorities arrested Alva in Sulphur, Louisiana. She remains in federal custody at this time awaiting transfer to the Western District of Texas.
This case was investigated by agents with HSI and Enforcement and Removal Operations with Immigration and Customs Enforcement. Assistant United States Attorneys Tom Moore and Christina Playton are prosecuting this case on behalf of the Government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is considered innocent until proven guilty in a court of law.
Salisbury Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
Baltimore, Maryland – David C. Andrews, age 52, of Salisbury, Maryland, pleaded guilty today to distribution of child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Worcester County Sheriff Reggie T. Mason, Sr.; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Wicomico County Sheriff Michael A. Lewis; and Wicomico County State’s Attorney Matthew Maciarello.
According to Andrews’ plea agreement, between May 28 and July 12, 2010, Andrews made files depicting children engaged in sexually explicit conduct available to others through a file sharing program installed on his computer. On July 17, 2010, a Wicomico County Sheriff’s detective working on undercover investigations of individuals trafficking child pornography through the use of file sharing programs was able to download child pornography being shared using the internet account at Andrews’ residence. A search warrant was executed at Andrews’ home and law enforcement located Andrews’ computer which contained 49 images and approximately 160 video segments of child pornography. Andrews admitted that he collected and shared child pornography over the internet, including the video downloaded by the detective. On October 12, 2011, Andrews pleaded guilty to possession of child pornography in Wicomico County Circuit Court. The charge for possession of child pornography with intent to distribute was dropped.
Also according to Andrews’ plea agreement, on May 12, 2014, a Worcester County Sheriff’s Office detective was conducting an online investigation for individuals using file sharing software to share child pornography. During the investigation, the detective downloaded a video from Andrews that depicted a prepubescent girl engaged in sexually explicit conduct. Investigators determined that the IP address associated with the account was assigned to Andrews’ residence.
On June 20, 2014, Andrews saw law enforcement officers conducting surveillance and photographing his home in preparation for obtaining a search warrant. Andrews admitted that on June 22, 2014, he ran memory-wiping software on the hard drive and reinstalled the operating system, thereby deleting any files or images, including any files containing child pornography from his laptop. When law enforcement executed a search warrant at Andrews’ home on June 24, 2014, they were initially unable to find any devices belonging to Andrews or that appeared to be associated with child pornography. After locating Andrews’ laptop in the laundry room, investigators realized the hard drive had been removed. Andrews directed the investigators to a truck tire in the back yard of the uninhabited house next door where law enforcement recovered a gallon zip lock bag containing the hard drive from the laptop, as well as a tablet computer.
Although a forensic examination of the laptop hard drive was not able to recover any images or files, a forensic analysis of the tablet recovered 142 images of child pornography. Andrews admitted that he attempted to delete the files in an attempt to conceal them from investigators. Twenty-five of the images belonged to a series of child pornography whose victim(s) were previously identified by the National Center for Missing and Exploited Children.
As part of his plea agreement, Andrews 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). In addition, Andrews will be required to pay restitution to any identified victims used to produce the child pornography Andrews distributed.
Andrews and the government have agreed that if the Court accepts the plea agreement Andrews will be sentenced to between 70 and 87 months in prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for October 27, 2015 at 3:00 p.m.
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 HSI Baltimore and Ocean City, Maryland, the Worcester County Sheriff’s Office, Maryland State Police, Wicomico County Sheriff’s Office, and the Wicomico County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Zachary A. Myers, who is prosecuting the case.
Rochester Woman Sentenced for False Passport ApplicationRead 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 that Jennifer Gilbert, 47, of Rochester, NY, who was convicted of fraudulently obtaining a U.S. Passport by making false statements in the passport application, was sentenced to five years probation to include six months home detention by Chief U.S. District Judge Frank P. Geraci. The defendant will also have to perform 100 hours of community service.Assistant U.S. Attorney John J. Field, who handled the matter, stated that Gilbert applied for a passport in 2007 using the name and identification of another individual, Lena B.W. Years later, in May 2014, Lena B.W. applied for a passport for herself. Lena B.W.’s application triggered a review of the 2007 application that defendant had submitted, and resulted in defendant’s fraud being discovered.
The sentencing is the culmination of an investigation by Special Agents from the United States Department of State, under the direction of Special Agent in Charge William Ferrari.
Ringleader of Extortion Ring Sentenced to More Than 14 Years in Manhattan Federal Prison for Massive “Call Center” Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director in Charge New York Field Office of the Federal Bureau of Investigation (“FBI”), and Timothy P. Camus, Deputy Inspector General for Investigations of the United States Treasury Inspector General for Tax Administration (“TIGTA”), announced today that SAHIL PATEL was sentenced to 175 months in prison and $1 million in forfeiture for his role in organizing the U.S. side of a massive fraud and extortion ring run through various “call centers” located in India, through which PATEL and his coconspirators impersonated American law enforcement officials and threatened victims with arrest and financial penalties unless those victims made payments to avoid purported charges. PATEL pleaded guilty in January 2015 before U.S. District Judge Alvin Hellerstein, who imposed the sentence today.
Manhattan U.S. Attorney Preet Bharara said: “Sahil Patel’s elaborate scheme involved impersonating law enforcement officers and using intimidation and fear to bilk over a million dollars from hundreds of unsuspecting victims. I want to thank the FBI and the Treasury Inspector General for Tax Administration for their excellent work in this investigation.”
Assistant Director in Charge Diego Rodriguez said: “This duplicitous consumer fraud scheme preyed on the vulnerabilities of victims who were forced to pay false penalties for fear of retribution. Wreaking havoc on hundreds of innocent Americans, Patel and his co-conspirators also called into question the integrity of the federal law enforcement community by falsely portraying themselves as government officials. Today’s sentencing serves as a fine example of how the FBI and our partners are successfully combining efforts to eliminate sophisticated impersonation scams.”
Deputy Inspector General Timothy P. Camus said: “Through his ruthless criminal enterprise, Mr. Patel has inflicted harm on thousands of innocent Americans who fell victim to his impersonation scheme. Victimizing taxpayers by impersonating the IRS is a serious crime and individuals who do so will be prosecuted to the fullest extent of the law.”
According to the Superseding Indictment, other documents filed in Manhattan federal court, and statements made at related court proceedings:
From December 2011 through the day of his arrest on December 18, 2013, PATEL participated as a leader in a sophisticated scheme to intimidate and defraud hundreds of innocent victims of hundreds of dollars apiece.
Throughout the course of the fraud, telephone call centers located in India hired English-speaking employees to place telephone calls to individuals living in the U.S. Armed with long lists of potential victims, referred to by PATEL and his co-conspirators as “lead sheets,” those India-based callers systematically placed thousands of calls to individuals in the U.S. in the hopes of intimidating the call recipients into providing a payment to the co-conspirators. In order to extort these victims, the India-based callers impersonated law enforcement officials of the FBI and IRS and threatened their victims with financial penalties and arrest in connection with fabricated financial crimes.
In order to receive funds in a manner that would mask the identity of PATEL and his co-conspirators, the ring undertook several measures to anonymize itself, including by using anonymized voice-over-internet technology, which was subscribed under fraudulent names in order to give the appearance of being related to U.S. law enforcement agencies.
Patel and his co-conspirators also used several layers of wire transactions in order to conceal the destination and nature of the extorted payments, which totaled at least $1.2 million dollars.
* * *
In addition to the prison sentence, PATEL, 36, of Tatamy, Pennsylvania, was sentenced to three years of supervised release.
In imposing today’s sentence, Judge Hellerstein said: “The nature of this crime robbed people of their identities and their money in a way that causes people to feel they have been almost destroyed.”
If you have been targeted by this scam, you can report the incident to TIGTA at www.tigta.gov and clicking on the IRS Impersonation Scam Reporting tab in the upper right corner, or call the TIGTA hotline at 1-800-366-4484.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Andrew C. Adams is in charge of the prosecution.
Prison Tax Fraud Ringleader Sentenced to 7 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Edwin Ludwig IV, 34, currently an inmate in an Oklahoma state prison, was sentenced today to seven years in prison for conspiring to defraud the United States and for filing false claims for federal tax refunds, United States Attorney Benjamin B. Wagner announced. Ludwig was ordered to pay over $219,000 in restitution.
According to court documents, beginning in March 2011, Ludwig and three fellow inmates in the California Correctional Center in Susanville obtained personal identification information of other inmates at the correctional center. Ludwig then provided the information to co-defendants on the outside who prepared and filed false income tax returns with the Internal Revenue Service, claiming refunds to which the inmates were not entitled. False tax returns also were filed in some of the defendants’ own names. The defendants caused the false refund checks to be deposited to various bank accounts they controlled. According to the indictment, the investigation into the conspiracy began on January 11, 2012, when a correctional officer found some records behind Ludwig’s personal locker.
According to court documents, the refunds were used for personal expenditures, and included the purchase of prepaid debit cards, and adding money to inmates’ commissary accounts. At sentencing, Ludwig stated that some of the proceeds had been used to purchase drugs. In all, the conspiracy resulted in at least 247 false claims for income tax returns in tax years 2008 through 2011. Although the IRS stopped some of the refunds, approximately 138 fraudulent refunds totaling approximately $219,984 were issued.
Charges against six co-defendants are pending. A status conference for them is scheduled for September 2, 2015. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the Investigative Service Unit at the California Correctional Center. Assistant United States Attorney Sherry D. Hartel Haus is prosecuting the case.
Portland Man Pleads Guilty to Crack Cocaine Distribution ChargesRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Marco Gordon, 34, of Portland and Detroit, Michigan, pleaded guilty yesterday in U.S. District Court to conspiring to distribute 28 grams or more of cocaine base, often referred to as crack cocaine, and to possession with intent to distribute 28 grams or more of cocaine base.
Court records reveal that between December 2013 and January 2015, Gordon conspired with others to distribute crack cocaine. Conspirators arranged for the acquisition of drugs out of state and transported them to Maine where they were provided to retail distributors, including Gordon, who sold them in the Portland area. During the course of the investigation, law enforcement officers conducted controlled purchases of crack cocaine from members of the conspiracy. On January 9, 2015, officers arrested Gordon on Gilman Street in Portland and seized 183.6 grams of crack cocaine and over $3,400 in cash.
Gordon faces between five and 40 years in prison and a $5,000,000 fine on each count. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. In May 2015, conspirators Russell Gordon and Robert Joiner, Jr. pleaded guilty to crack cocaine distribution charges and await sentencing.
This case was investigated by the Southern Maine Gang Task Force, which is comprised of agents and officers from the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Drug Enforcement Administration; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the Portland and Biddeford Police Departments. The Lewiston Police Department, Maine Drug Enforcement Agency, and Maine State Police also assisted with the investigation.
The case also results from the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Owner of Louisiana Automotive Businesses Pleads Guilty for Role in Stolen Identity Refund Fraud SchemeRead the Press Release
A resident of Tangipahoa Parish, Louisiana, and the owner of two automotive businesses pleaded guilty today for his involvement in a stolen identity refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana.
Martin Jackson Sr., 48, pleaded guilty to one count of a triple object conspiracy to defraud the United States, to commit theft of public money and mail fraud. According to court documents, Jackson conspired with at least six other individuals to use stolen identities to file false federal income tax returns that fraudulently claimed tax refunds. Jackson owns Woodscale Automotive Sales LLC and Woodscale Autobody and Mec. LLC. He used the business bank accounts as part of the scheme. Some of the co-conspirators prepared and filed the false tax returns using the stolen identity information and requested that the Internal Revenue Service (IRS) mail the refund checks to addresses in Louisiana, including to post office boxes that were opened by co-conspirators. Jackson deposited refund checks into his business bank accounts and gave cash or checks to his co-conspirators, while retaining a portion of the proceeds for himself.
Jackson is the final co-conspirator to plead guilty of the seven defendants indicted in this case. Previously, Angela Chaney, 43, Thaddeus Richardson, 50, Corey Lewis, aka Coco, 37, Craig Lewis, 40, Brad Lewis, aka Bird, 32, and Cedrick Mitchell, aka Skeet, 39, pleaded guilty. Their sentencings are scheduled in August and September.
U.S. District Court Judge Jay Zainey of the Eastern District of Louisiana set sentencing for Jackson on Oct. 6. Jackson faces a statutory maximum sentence of five years in prison and a $250,000 fine, or twice the gross gain or loss caused by the offense and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Hayden Brockett and Lauren Castaldi of the Tax Division and Assistant U.S. Attorney Dall Kammer of the Eastern District of Louisiana, who are prosecuting the case.
Owner of Louisiana Automotive Businesses Pleads Guilty for Role in Stolen Identity Refund Fraud SchemeRead the Press Release
A resident of Tangipahoa Parish, Louisiana, and the owner of two automotive businesses pleaded guilty today for his involvement in a stolen identity refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana.
Martin Jackson Sr., 48, pleaded guilty to one count of a triple object conspiracy to defraud the United States, to commit theft of public money and mail fraud. According to court documents, Jackson conspired with at least six other individuals to use stolen identities to file false federal income tax returns that fraudulently claimed tax refunds. Jackson owns Woodscale Automotive Sales LLC and Woodscale Autobody and Mec. LLC. He used the business bank accounts as part of the scheme. Some of the co-conspirators prepared and filed the false tax returns using the stolen identity information and requested that the Internal Revenue Service (IRS) mail the refund checks to addresses in Louisiana, including to post office boxes that were opened by co-conspirators. Jackson deposited refund checks into his business bank accounts and gave cash or checks to his co-conspirators, while retaining a portion of the proceeds for himself.
Jackson is the final co-conspirator to plead guilty of the seven defendants indicted in this case. Previously, Angela Chaney, 43, Thaddeus Richardson, 50, Corey Lewis, aka Coco, 37, Craig Lewis, 40, Brad Lewis, aka Bird, 32, and Cedrick Mitchell, aka Skeet, 39, pleaded guilty. Their sentencings are scheduled in August and September.
U.S. District Court Judge Jay Zainey of the Eastern District of Louisiana set sentencing for Jackson on Oct. 6. Jackson faces a statutory maximum sentence of five years in prison and a $250,000 fine, or twice the gross gain or loss caused by the offense and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Hayden Brockett and Lauren Castaldi of the Tax Division and Assistant U.S. Attorney Dall Kammer of the Eastern District of Louisiana, who are prosecuting the case.
Oak Hill man pleads guilty to possession of child pornographyRead the Press Release
Defendant had more than 600 child-pornography photos and videos
CHARLESTON, W. Va. – An Oak Hill, West Virginia man pleaded guilty today to possessing child pornography, United States Attorney Booth Goodwin announced. William A. Cracraft, 52, admitted to having more than 600 photographs and videos of child pornography on his computers and mobile phones.
The images included sexually explicit depictions of prepubescent minors, as well as scenes of sadistic and masochistic conduct and of violence toward minors.
Cracraft faces up to 20 years in prison and a $250,000 fine when he is sentenced on October 8, 2015. The devices containing the child pornography will be destroyed.
The Department of Homeland Security and the West Virginia State Police conducted the investigation. Assistant United States Attorney Erik S. Goes is handling the prosecution. United States District Judge John T. Copenhaver, Jr., conducted the plea hearing.
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 http://www.justice.gov/usao/wvs/PSCpage.html.
New York Man Admits Role in Scheme to Bilk Bank Customer AccountsRead the Press Release
PHILADELPHIA – Divine Garcia, 29, of New Rochelle, NY, pleaded guilty today to conspiracy and bank fraud. Garcia was a middleman in a fraud conspiracy that involved recruiting employees at various banks, between Pennsylvania and New York, to provide information about bank customers’ accounts. A sentencing date is scheduled for October 19, 2015.
Garcia and his co-conspirators, charged elsewhere, formed an organization based out of New York which stole large sums of money from FDIC insured banks across the United States, including some in the Eastern District of Pennsylvania. The organization included numerous bank employees, three of whom were recruited by Garcia to provide confidential information about customers and their accounts. The organization used this information to take control of the customers’ account. Once they had sufficient control, an imposter working for the organization would enter a branch carrying: (a) a fake identification card, which Garcia had given them, with the biographical information of the customer but the photo of the imposter; and (b) a pre-printed and signed withdrawal slip with a signature which mimicked the customer’s actual signature. Using the forged withdrawal slip and fake identification card, the imposter would typically withdraw large sums of U.S. currency at various branches. The imposters were often accompanied by a handler from the organization, who would organize and supervise the fraudulent transactions. In total, Garcia provided the bank fraud organization with 65 confidential customer account profiles. From those accounts, the organization stole $481,856.00.
Garcia faces a maximum statutory sentence of 35 years in prison, a fine of up to $4 million, five years of supervised release, and a $200 special assessment.
The case was investigated by Homeland Security Investigations and U.S. Secret Service. It is being prosecuted by Assistant United States Attorney Robert J. Livermore.
New York City Corrections Officer and 11 Additional Members and Associates of A Queens-Based Sect of the Bloods Gang Arrested on Narcotics Conspiracy ChargesRead the Press Release
Earlier today, a total of 12 members and associates of the Bloods street gang located in Queens, New York, including Covel Duncan, a New York City Corrections Officer at Riker’s Island, were arrested on narcotics trafficking charges. The defendants’ initial appearances are scheduled this afternoon before United States Magistrate Judge James Orenstein at the federal courthouse in Brooklyn.[1]
The charges and arrests were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Raymond R. Parmer, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI), and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Agency, New York.
As charged in the criminal complaint, between November 2014 and June 2015, the defendants Kamel Lambus, Stanley Fuller, Shavona Trappier, Shakeem Powell, Tyran Trotter, Henry Curry, Sean Brabram, Tiheem Crocker, Scott Williams, Earl Davis, Michael Scott, and Andre Mitchell, and others, conspired to distribute over a kilogram of heroin. Lambus and Fuller are allegedly leaders of a sect of the Bloods gang called the Paper Chasing Goons (PCG) or POV City, and used a network of distributors, some of whom are also members of PCG/POV City, to sell hundreds of glassines of heroin daily to customers throughout Queens and elsewhere. The glassines were marked with labels including “Sweet Dreams,” “First Take,” “Pepsi,” and “Coca Cola.” Duncan was charged separately in a criminal complaint charging her with possessing heroin with intent to distribute.
The gang had several stash houses used to store narcotics and the proceeds of narcotics sales. This morning, search warrants were executed at three stash houses in Queens located at 119-26 165th Street, 107-53 Watson Place, and Lambus’s residence. Law enforcement agents seized 40 glassines of heroin labeled “Coca Cola” and “Sweet Dreams” and over $5,000 in U.S. currency from Lambus’s residence. Additionally, law enforcement agents seized approximately 500 glassines of heroin bearing the labels “Coca Cola” and “Sweet Dreams” and approximately $7,000 in U.S. currency from the residence where Trappier and Duncan were arrested, and 250 glassines of heroin bearing the label “Coca Cola” from the residence where Mitchell was arrested.
During the investigation, law enforcement intercepted numerous telephone communications which revealed that Lambus and Fuller sent samples of heroin to their distributors to test for quality, and supplied the members of their gang, as well as other narcotics traffickers, with heroin on a daily basis.
Acting United States Attorney Currie stated, “Members of street gangs who distribute heroin are on notice that they will be held strictly accountable for their actions. We and our partners in law enforcement are committed to ending the scourge of illegal narcotics in our communities.” Mr. Currie expressed his grateful appreciation to the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms & Explosives, the New York City Police Department, the Internal Revenue Service, and the New York State Department of Corrections and Supervision for their assistance in the investigation.
“Today’s arrests help dismantle a violent gang responsible for flooding the streets of New York with heroin,” said HSI Special Agent-in-Charge Parmer. “Working alongside our law enforcement partners, HSI will continue to use its unique authorities to ensure gangs and their members are brought to justice.”
DEA Special Agent-in-Charge Hunt stated, “These alleged gang members were distributing heroin with brand names such as “Sweet Dreams,” “Pepsi,” and “Coca Cola” – three things that appeal to America’s youth. The CDC reported the heroin death rate has quadrupled in a decade, and today’s collaborative efforts demonstrate law enforcement’s commitment to arresting those responsible for trafficking heroin which ultimately opens the door to increased heroin abuse, addiction, crime, and violence.”
“This investigation is an example of multiple law enforcement agencies working together toward a common objective, which is to protect our communities from individuals who would compromise the safety and well-being of our neighborhoods through the trafficking of illegal narcotics,” said Police Commissioner William J. Bratton. “I would like to thank the NYPD Gang Squad Queens and our many law enforcement partners whose work in this investigation resulted in the charges and arrests of these alleged gang members.”
ATF Special Agent in Charge Delano A. Reid states: "The ATF is grateful to the United States Attorneys Office as well as our law enforcement partners for their assistance and investigative expertise in dismantling what once was allegedly a structured and organized heroin ring. The arrests of these alleged gang members will hopefully create a ripple effect inside their ranks and remind them that when they decide to engage in narcotics trafficking, the full weight of law enforcement will be there at every turn. "
IRS-CI Special Agent-in-Charge Shantelle P. Kitchen said, “IRS Criminal Investigation is proud to work with our partner law enforcement agencies in the investigation of crimes that directly impact our communities, including narcotics, illegal firearms, and gang activities. We are always ready to apply our expertise to the financial aspects of investigations of criminal organizations.”
If convicted, the defendants each face a maximum sentence of life imprisonment and a $10 million fine.[2]
The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Kenji Price, Lauren Elbert, and Michael Robotti are in charge of the prosecution.
The Defendants:
Name: COVEL DUNCAN
Age: 30
Residence: Queens, New YorkName: KAMEL LAMBUS
Age: 32
Residence: Queens, New YorkName: STANLEY FULLER
Age: 40
Residence: Queens, New YorkName: SHAVONA TRAPPIER
Age: 25
Residence: Queens, New YorkName: SHAKEEM POWELL
Age: 26
Residence: Queens, New YorkName: TYRAN TROTTER
Age: 20
Residence: Queens, New YorkName: HENRY CURRY
Age: 26
Residence: Queens, New YorkName: SEAN BRABRAM
Age: 46
Residence: Queens, New YorkName: TIHEEM CROCKER
Age: 40
Residence: Queens, New YorkName: SCOTT WILLIAMS
Age: 30
Residence: Queens, New YorkName: EARL DAVIS
Age: 50
Residence: Queens, New YorkName: MICHAEL SCOTT
Age: 45
Residence: Queens, New YorkName: ANDRE MITCHELL
Age: 28
Residence: Queens, New York
[1] The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
[2] Duncan faces a maximum term of imprisonment of 20 years and no minimum term of imprisonment.
New U.S. Attorney Announces Office Leadership ChangesRead the Press Release
SALT LAKE CITY – United States Attorney John W. Huber, who became U.S. Attorney for the District of Utah in mid-June after being nominated by President Obama and confirmed by the U.S. Senate, has announced his new office leadership team. The changes are effective immediately.
“The attorneys I have appointed to leadership positions in the office bring experience and sound judgment to their new responsibilities. They live in Utah neighborhoods and are committed to working with our local, state, and federal law enforcement partners to make communities safe for everyone,” Huber said.
“These changes will have immediate impact. For example, I have appointed veteran prosecutor Rob Lund as the new chief of our White Collar Section. For the past 10 years, drug cartel members have been looking over their shoulders because of Lund’s work in fighting narcotics traffickers. Now Ponzi scheme and white collar fraudsters in our state will do the same because of Lund’s dedication to bringing offenders to justice,” Huber said.
Diana Hagen, who joined the U.S. Attorney’s Office in 2001 and has been chief of the Appellate Section since 2006, will be First Assistant U.S. Attorney in the office. This is the top Assistant U.S. Attorney position in the office. Hagen has briefed hundreds of federal appeals and has personally argued more than 70 cases before the Tenth Circuit Court of Appeals. She was a member of the trial team that prosecuted Brian David Mitchell and Wanda Barzee for the kidnaping of Elizabeth Smart. She also has been active in local and federal bar associations and is the president-elect of Women Lawyers of Utah.
Andrew Choate will be Executive Assistant U.S. Attorney in the office. Choate joined the U.S. Attorney’s Office as a Special Assistant U.S. Attorney in 2010 and became an Assistant U.S. Attorney in June 2014. Prior to his new appointment, Choate worked in the office’s National Security Section as chief of the Immigration Crimes Unit and deputy section chief. He has been involved in the prosecution of several immigration fraud, national security, and domestic terrorism cases. Before joining the U.S. Attorney’s Office, he worked as Assistant Chief Counsel for the U.S. Department of Homeland Security in Salt Lake City.
Robert Lunnen has been named chief of the Criminal Division in the office. The Criminal Division is one of three divisions in the office. Lunnen joined the U.S. Attorney’s Office in 2002 after working in the Narcotics and Dangerous Drug Section at the U.S. Department of Justice. As a part of that position, Lunnen served for three years as the Judicial Attaché for DOJ in Bogota, Columbia. Lunnen later served for more than three years as the Judicial Attaché in Kabul, Afghanistan, where he was the senior DOJ official in Afghanistan, directing the Department’s Rule of Law reform program.
David Backman, who has been an Assistant U.S. Attorney for 13 years, will be deputy chief of the Criminal Division. He previously worked in the office’s Violent Crime Section and also served as Executive Assistant U.S. Attorney in the office. Backman clerked for U.S. District Court Judge Dee Benson prior to joining the office.
Jared Bennett will continue as chief of the Civil Division in the office and Dan Price will continue as deputy chief of that division.
Karin Fojtik, who has been an Assistant U.S. Attorney in the office since 2004, will be chief of the Violent Crime Section. Fojtik clerked for former U.S. District Court Judge Paul Cassell. She also was an Assistant Utah Attorney General and an assistant prosecutor in Salt Lake City and Sandy. Drew Yeates, who has been in the office for more than seven years, will be the deputy chief of the Violent Crime Section. Yeates was a deputy district attorney and an assistant city prosecutor in Utah prior to joining the office. He also has been Project Safe Neighborhoods Coordinator in the U.S. Attorney’s Office.
Robert Lund will be moving from chief of the Narcotics Section and the Organized Crime Drug Enforcement Task Force (OCDETF) in the office, a position he has had since 2007, to chief of the White Collar Section. Lund joined the U.S. Attorney’s Office in 2001 after working as a state prosecutor and private attorney. Lund is a judge advocate in the Army National Guard and teaches trial advocacy at the University of Utah law school.
Taking over as chief of the Narcotics Section and OCDETF will be Vernon Stejskal. Stejskal was an Assistant Utah Attorney General and Special Assistant U.S. Attorney from 2002 to 2012 and was assigned to the DEA Metro Narcotics Task Force. He became an Assistant U.S. Attorney in 2012 and has been working in the Narcotics Section.
Elizabethanne Stevens, who joined the Utah office in 1995 after working in the Criminal Division’s Fraud Section at the Department of Justice, will be chief of the Appellate Section in the office. Stevens has been working in the Appellate Section since 2005. Prior to joining the Appellate Section, Stevens was chief of the White Collar Section. Jeannette Swent, who has been an AUSA in the office since 1995 and has served as Civil Appellate Coordinator since 1997, will be deputy chief of the Appellate Section. Swent was chief of the office’s Civil Division for several years.
Alicia H. Cook, who joined the U.S. Attorney’s Office in October 2012 after working as a Deputy District Attorney for Salt Lake County for about 12 years, will continue as chief of the National Security Section in the office. Richard Daynes, who has been an Assistant U.S. Attorney for more than 13 years, has been appointed deputy chief of the National Security Section. Daynes has been chief of the Identity Theft Unit in the office and co-chairs the Utah Identity Theft Task Force. He was previously chief of the Asset Forfeiture Section in the office.
Tyler Murray will continue as chief of the Asset Forfeiture Section in the office. Murray joined the office in September 2008 as a member of the Affirmative Civil Enforcement section of the Civil Division where he focused on wildfire recovery litigation. He transferred to the Asset Forfeiture Section in 2012.
New Jersey Couple Convicted on Federal Child Abuse ChargesRead the Press Release
NEWARK, N.J. – A former U.S. Army major and his wife were convicted today on federal charges that they abused their adopted children, who all were less than 4 years old and developmentally delayed, through neglectful and cruel acts, including by breaking their bones, denying them medical attention, withholding water and force-feeding them hot sauce, U.S. Attorney Paul J. Fishman announced.
Carolyn Jackson, 37, and John E. Jackson, 40, formerly a Major in the Army at the Picatinny Arsenal Installation in Morris County, New Jersey, who was discharged from the Army in May 2015, were each found guilty of one count of conspiracy to endanger the welfare of a child; Carolyn Jackson was found guilty of 11 substantive counts of endangering the welfare of a child and John Jackson was found guilty of nine substantive counts of endangering the welfare of a child following four months of trial before U.S. District Judge Katharine S. Hayden in Newark federal court. The jury deliberated four days before delivering the guilty verdicts.
The case falls under federal jurisdiction because the crimes were committed on a military base.
According to documents filed in this case and the evidence at trial:
From August 2005 until April 23, 2010, Carolyn and John Jackson conspired to engage in a constant course of neglect and cruelty towards three children they fostered and then adopted. The Jacksons told their biological children not to report the physical assaults to others, saying that the punishments and disciplinary techniques were justified, as they were “training” the adopted children how to behave.
After John Jackson was informed by a family friend that the oldest biological child had revealed the abuse in the Jackson household, John Jackson reported the breach to Carolyn Jackson, who retaliated against that biological child by beating the child 30 times with a belt.
As part of the conspiracy, the Jacksons physically assaulted their adopted children with various objects, causing two children to sustain fractured bones (including a fractured spine, fractured skull and fractured upper arms); failed to seek prompt medical attention for their injuries; withheld sufficient nourishment and food from their adopted children; withheld adequate water from two of their children and, at times, prohibited them from drinking water altogether; forced two of the children to consume foods intended to cause them pain and suffering, such as red pepper flakes and hot sauce, and caused one child to ingest excessive sodium or sodium-laden substances while being deprived of water, leading to a life-threatening condition on two separate occasions in two states. The Jacksons even punished one adopted child, who had to resort to sneaking food and drinking from the toilet, by hitting the child, making the child ingest hot sauce, and forcing the child to eat a raw onion like an apple.
None of the children, adoptive and biological, remain in the custody of the defendants.
Carolyn and John Jackson each face a maximum potential penalty of 10 years in prison on each of the counts on which they were convicted, as well as a maximum $250,000 fine for each count. Sentencing is scheduled for Oct. 13, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s convictions. He also thanked the U.S. Army Criminal Investigation Command, under the command of Major General David E. Quantock, and the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp.
The government is represented by Assistant U.S. Attorneys Melissa L. Jampol and Joseph B. Shumofsky of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
Carolyn Jackson: Rubin Sinins and Herbert Waldman Esqs., Springfield
John Jackson: David Holman and Carol Gillen Esqs., Assistant Federal Public Defenders, Newark
New Jersey Brothers Convicted of Shipping $1 Million Worth of Stolen CarsRead the Press Release
CAMDEN, N.J. – Two New Jersey men were convicted today for their roles in a large-scale conspiracy to ship stolen luxury cars to Hong Kong and elsewhere, U.S. Attorney Paul J. Fishman announced.
Andrew Clarke, 44 of Irvington, New Jersey, and Llewellyn Clarke, 42 of North Plainfield, New Jersey, were convicted on all four counts of a superseding indictment charging them each with one count of conspiracy to transport stolen motor vehicles and three counts of transportation of stolen motor vehicles in interstate and foreign commerce. They were convicted following a three-week trial before U.S. District Judge Robert B. Kugler in Camden federal court. The jury deliberated for about three hours before returning the guilty verdicts.
According to documents filed in in this case and evidence presented at trial:
The stolen car exportation ring was investigated by a multi-agency task force led by Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The investigation revealed that the Clarkes were purchasing stolen luxury cars from thieves operating in northern New Jersey and New York. The Clarke brothers then recruited other conspirators to “re-tag” those cars, or have fraudulent vehicle identification numbers placed on the cars to mask the fact that they were stolen, and then had false title documents produced for those cars in New Jersey and Georgia. After the fake documents were created, the Clarkes shipped several of those stolen cars, valued at nearly $1 million, from New Jersey to Hong Kong, while other cars were shipped to Georgia, Maryland and elsewhere. Once overseas or out-of-state, the stolen cars were then re-sold, some to unsuspecting buyers who later learned that their vehicles were in fact stolen.
Both defendants were detained pending their sentencing, which is scheduled for Oct.15, 2015. Both defendants face up to 35 years in prison as a result of their convictions.
U.S. Attorney Fishman credited special agents of ICE HSI, under the leadership of Executive Associate Director Peter Edge and Acting Special Agent in Charge Kevin Kelly, and the N.J. State Police, under the direction of Superintendent Col. Rick Fuentes, for the investigation leading to today’s convictions. He also thanked U.S. Customs and Border Protection; the Waterfront Commission of New York Harbor; Essex County Prosecutor Carolyn Murray, Middlesex County Prosecutor Andrew Carey, Hudson County Prosecutor Esther Suarez, and Union County Acting Prosecutor Grace H. Park, the Essex and Hudson County Sheriff’s Departments, the Newark Police Department, the U.S. Coast Guard Investigative Service, the Port Authority of New York and New Jersey, the New Jersey Motor Vehicle Commission, the Georgia Department of Revenue, and the Maryland State Police for their roles.
The government is represented by Assistant U.S. Attorney José R. Almonte and James M. Donnelly of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
Andrew Clarke: Brian O’Malley Esq., Haddon Heights, New Jersey
Llewellyn Clarke: Paul Sarmousakis Esq., Avalon, New Jersey
Mill Creek Man Charged with Importing Drug Paraphernalia and Trafficking in Counterfeit GoodsRead the Press Release
A Mill Creek, Washington man was arrested today on a criminal complaint charging him with importing drug paraphernalia and trafficking in counterfeit goods following a multi-year investigation by Homeland Security Investigations, announced U.S. Attorney Annette L. Hayes. JAE SEON YOON, (AKA: Jason YOON), 55, is the president or vice-president of multiple companies doing business in Washington State: J&J, Inc. (d/b/a “Top Wholesale, Inc.”), Smomax, Inc. (d/b/a “346 Glass Pipe/Master Trading”) and Three People Corp. (d/b/a/ “Cigar USA”). The criminal complaint alleges YOON imported and distributed drug paraphernalia and other goods with counterfeit markings that made them appear to be from established suppliers. YOON allegedly used stickers with Seahawks and other NFL team logos to increase the price of the drug paraphernalia he sold. YOON was arrested this morning as part of a search of three properties where law enforcement believes the counterfeit goods were being stored. YOON will appear in U.S. District Court in Tacoma at 2:30 Wednesday July 8, 2015.
According to the criminal complaint, YOON imported drug paraphernalia from China, sometimes via Canada, by marking them as vases, laboratory glassware, or oil and vinegar dispensers. Multiple shipments were seized by law enforcement. While the items were made in China, they were falsely marked with the logos of companies who manufacture similar goods in Germany and Canada. YOON also imported e-cigarettes and chargers which bore counterfeit Underwriters Lab (U/L) markings. U/L is an American worldwide safety consulting and certification company that provides safety standards for electrical devices and components. YOON’s companies then sold the counterfeit items to small “mom and pop” type retail stores.
The criminal complaint describes how YOON also imported counterfeit Seahawks logo stickers to stick on items to increase their value, and how he trafficked in “Hello Kitty” logo items despite being served with a cease and desist letter by the registered trademark owner.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations with assistance from U.S. Customs and Border Protection (CBP), the Washington State Liquor and Cannabis Control Board, and the Food and Drug Administration (FDA) Office of Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Marci Ellsworth.
Midlothian Man Sentenced to Four Years in Prison for Conspiring to Distribute Anabolic SteroidsRead the Press Release
RICHMOND, Va. – Carl E. Macchiarulo, 44, of Midlothian, Virginia, was sentenced today to 48 months in prison, followed by three years of supervised release for conspiring to distribute and possess with intent to distribute anabolic steroids. Macchiarulo was also fined $10,000.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division; and David McGinnis, Acting Inspector in Charge of the Washington Division of the United States Postal Inspection Service (USPIS), made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr.
Macchiarulo pleaded guilty on April 8, 2015. According to court documents, Macchiarulo operated an illegal steroid distribution business known as CK Labs out of his home in Midlothian, Virginia, between December 2012 and September 2014. In operating the business, Macchiarulo imported raw steroid powders and pills from China and other foreign countries, manufactured finished steroid products at his home, and distributed steroids to his customers through the mail. Macchiarulo advertised his business on various internet sites known to serve as a marketplace for the distribution of anabolic steroids. During the course of the conspiracy, Macchiarulo imported at least 16 kg of raw steroid powders and thousands of steroid pills, and distributed steroid products to customers located in over 30 states, including to at least one amateur athlete. As part of the plea agreement, Macchiarulo agreed to forfeit $163,455 in U.S. currency that was seized by law enforcement as proceeds of the conspiracy.
This case was investigated by the FBI’s Richmond Division and the USPIS. Assistant U.S. Attorneys Dominick S. Gerace and Erik S. Siebert prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15CR00050.
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