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Wednesday 8 July 2015
Maryland Man Federally Indicted for Three Bank Robberies in PennsylvaniaRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Wayne Lee Brennan, 40, of Fort Howard, Maryland was indicted by a federal grand jury in Harrisburg, Pennsylvania. The indictment charges Brennan with three counts of bank robbery.
According to United States Attorney Peter Smith, the Indictment alleges that Brennan robbed three South Central Pennsylvania banks between June and September 2014: Santander Bank, Hanover; PNC Bank, Hanover; and PNC Bank, East York. At each bank, Brennan allegedly handed the teller a note demanding money but did not display a firearm. Approximately $5,000 was taken in the three robberies.
This case was investigated by the Federal Bureau of Investigation, the West Manheim Township Police Department, the Hanover Borough Police Department, and the Springettsbury Township Police Department and is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Marina Developer Sentenced to 60 Months in Federal Prison for Defrauding the Village of Riverdale of over $370,000Read the Press Release
CHICAGO – A real estate developer who defrauded the Village of Riverdale of over $370,000 in public funds was sentenced today to 60 months in federal prison.
JOHN THOMAS, 52, of Chicago, owned and controlled Nosmo Kings LLC, which entered into an agreement with Riverdale to develop property along a marina in 2012. Only a portion of the funds were actually used for legitimate construction work. Thomas misappropriated $372,182 for his own personal use after creating and submitting fraudulent invoices for construction work that was never performed.
Thomas pleaded guilty to one count of wire fraud in May 2014. In addition to the five-year sentence, U.S. District Judge James B. Zagel ordered restitution of $372,182.
“John Thomas is a serial con man,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “Within months after release from probation from another federal conviction, the defendant set out to defraud the Village of Riverdale through the use of the village’s Tax Increment Financing program,” Harjani said.
Nosmo Kings entered into a TIF agreement with Riverdale in February 2012. Per the agreement, Thomas was required to submit documentation identifying completed construction expenses, including invoices and checks paid to vendors. Thomas created and submitted false invoices for non-existent companies and for companies that never performed work at the marina. For instance, one of the invoices requested reimbursement of $25,750 for construction supplies from a company that was actually a currency exchange to which Thomas owed money. Thomas used other TIF funds to pay personal expenses and the rent on his apartment.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The government is being represented by Assistant United States Attorney Sunil Harjani.
Madison Woman Pleads Guilty in Scheme that Caused $558,857 Fraudulent Income Tax RefundRead the Press Release
BIRMINGHAM -- A Madison woman pleaded guilty today in federal court to theft of government property and money laundering as part of a scheme to obtain fraudulent tax refunds, including one for $558,857, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Roger C. Stanton.
ANGELIQUE B. HARRIS, 49, entered her guilty plea before U.S. District Judge R. David Proctor. Through a related civil action, she forfeited a 2013 Lexus ES350 luxury automobile worth about $45,000 that she bought with some of the criminal proceeds. Harris' sentencing date has not been set.
A federal grand jury indicted Harris in October. She pleaded guilty to the indictment's charge that she, with the aid of others not named in the indictment, stole U.S. Treasury refunds between February 2013 and February 2014.
Harris also pleaded guilty to money laundering for using proceeds of a fraudulent October 2013 federal income tax refund of $558,857 to purchase the luxury Lexus from a Huntsville dealership. The IRS paid the refund on a tax return fraudulently filed in the name of a couple, identified in the indictment as "P. and A.O." The refund was deposited into an account Harris opened at a Huntsville bank, according to the indictment.
The maximum penalty for theft of government property and money laundering is 10 years in prison and a $250,000 fine.
The IRS and FBI investigated the case, which Assistant U.S. Attorney Russell E. Penfield is prosecuting.
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Liberty Man Sentenced to 15 Years for Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Liberty, Mo., man was sentenced in federal court today for receiving child pornography over the Internet.
Tracy J. Yost, 44, of Liberty, was sentenced by U.S. District Judge Stephen R. Bough to 15 years in federal prison without parole.
On Dec. 4, 2014, Yost pleaded guilty to receiving child pornography over the Internet.
Based upon an investigation of persons using a peer-to-peer file-sharing program, investigators executed a search warrant at Yost’s residence on April 5, 2013, and seized several computer hard drives. Forensic examiners found several videos of child pornography on one of the hard drives. According to court documents, Yost was also involved in a sexually exploitative interaction with a minor.
This case was prosecuted by Assistant U.S. Attorney Teresa Moore. It was investigated by the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Lewisburg men get federal prison time in heroin casesRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that United States District Judge Irene C. Berger sentenced two Lewisburg men to federal prison in heroin cases today. The sentences were handed down in Beckley.
Harry Franklin Huffman II, 26, was sentenced to 27 months’ imprisonment for use of a communication facility to facilitate a felony. Huffman pleaded guilty in March, admitting that on September 23, 2014, he used a telephone in Lewisburg to help set up a drug transaction with a confidential informant. Shortly after that phone conversation, Huffman distributed heroin to the informant.
Kip Aaron Sears, 26, was sentenced to 15 months’ imprisonment for use of a communication facility to facilitate a felony. Sears also pleaded guilty in March. He admitted that on September 30, 2014, he used a telephone in Lewisburg to set up a drug transaction with an informant. Later that day Sears met with the informant and distributed a quantity of heroin.
These cases were prosecuted under the Greenbrier Valley Heroin and Pill Initiative, part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the sale of heroin and the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down the spread of heroin and opiate painkillers in communities across the Southern District. Assistant United States Attorney John File prosecuted these cases.
Leader of International Prescription Drug Ring Sentenced to 15 Years in PrisonRead the Press Release
LONDON - The leader of a large-scale drug trafficking organization, which brought prescription drugs from Mexico to eastern Kentucky and northern Tennessee for nearly 15 years, has been sentenced to 180 months in federal prison.
On July 2nd, U.S. District Judge Gregory F. Van Tatenhove sentenced 60 year-old Donald Lee King, of Speedwell, Tenn., for operating a continuing criminal enterprise to distribute a controlled substance. Under federal law, King must serve at least 85 percent of his prison sentence; and following his release, he will be under the supervision of the U.S. Probation Office for five years. King has also forfeited nearly $75,000 in cash, multiple firearms, vehicles, and other property.
King admitted that, from around 1996 until September of 2013, he developed a large drug distribution network in which others, under his direction, made monthly trips to Texas to obtain large quantities of Alprolazam (Xanax). There, they obtained the drugs from conspirators who were receiving the drugs from a supplier in Mexico. The pills were then transported back to Kentucky and distributed in Bell County, Ky., and Claiborne County, Tenn. Alprozolam is a controlled substance typically used to treat anxiety.
Six co-defendants have previously pleaded guilty and been sentenced for their roles in the conspiracy.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Joseph P. Reagan, Special Agent in Charge, Detroit Field Division, Drug Enforcement Administration (DEA), jointly made the announcement today.
The investigation was conducted by the DEA. Assistant U.S. Attorney W. Samuel Dotson represented the U.S. Attorney’s Office in this case.
Landover Man Sentenced to 11 Years in Prison for Armed Robbery ConspiracyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Evan Anthony Peek-Austin, age 39, of Landover, Maryland, to 11 years in prison, followed by five years of supervised release, for conspiring to commit the robbery of a drug dealer, for using and brandishing a firearm during a crime of violence, and for carjacking.
The sentence 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 Chief Mark A. Magaw of the Prince George’s County Police Department.
According to his plea agreement, on April 11, 2014, Peek Austin and his co-conspirators Shawn Delonte Allen and Joel Varela Linares, entered the victim’s residence and awaited his arrival. As the victim arrived home, Allen approached the victim from behind and forced him at gunpoint into the residence. After zip-tying the victim’s hands, Austin, Linares and Allen questioned the victim about the location of drugs and drug proceeds. The robbers thought the victim was in possession of heroin imported from Guatemala or proceeds from heroin sales. Austin, Allen, and Linares each had a handgun and threatened to kill the victim if he did not produce the drugs or drug proceeds. While questioning the victim, Allen brandished his gun. When the victim claimed that he did not have drugs or drug proceeds, Linares placed a knife to the victim’s neck and Allen struck the victim in the head with a handgun. Allen also heated a metal spoon and placed the hot spoon on the victim’s wrists, demanding the victim tell them the location of the drugs and money.
Austin and his co-conspirators move the victim to the basement where Austin secured the victim’s feet with plastic zip ties. Allen again heated a metal spoon and placed the hot spoon on the victim’s hands and face, while Austin, Allen and Linares continued to demand that the victim tell them the location of the drugs and money. The victim finally told Austin and his co-conspirators that his American friend had the drugs and money and the robbers allowed the victim to call his friend, who was, in fact, a Special Agent with Homeland Security Investigations. The victim arranged to meet with the agent and told Austin and his co-conspirators that his friend would have approximately 10 kilograms of heroin.
Allen and Linares instructed the victim to drive them to the meeting location in Beltsville, Maryland. Linares told the victim that Austin would remain at the victim’s home to wait for the victim’s family and that Austin would harm the victim’s family if the victim did not comply with their instructions. Austin later met up with Allen, Linares and the victim at the meeting location. Once the HSI agent arrived, the victim met the agent and told him that Austin and his co-conspirators were going to kill him. As the HSI agent and the victim left, Allen got out of the car and brandished his gun. Linares entered another vehicle and pursued the agent’s car until he was stopped by Prince George’s County Police officers. Meanwhile, Austin and Allen fled the meeting location in a Honda Prelude and were pursued by law enforcement. They eventually ran away and Allen was subsequently apprehended by police. Austin approached two people in a pick-up truck, brandished his gun and carjacked the truck. Austin drove away in the truck, but was shortly trapped in the area by a gate. Austin then got out of the truck and ran. Austin was later caught by police.
A subsequent search of the Honda Prelude, which was registered to Austin, recovered $5,000 in cash, a black ski mask, black hat, black pellet gun, black single strap backpack containing zip ties and white gloves, and a wallet containing Austin’s identification documents.
Shawn Delonte Allen, age 40, of Waldorf, Maryland and Joel Varela Linares, age 25, of Washington, D.C., previously pleaded guilty to their roles in the robbery. Allen was sentenced to 150 months in prison and Linares is scheduled to be sentenced on August 18, 2015 at 10:30 a.m.
United States Attorney Rod J. Rosenstein praised HSI Baltimore and the Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Daniel C. Gardner and Kelly O. Hayes, who prosecuted the case.
Lake Geneva Resident Charged in Second Fraud IndictmentRead the Press Release
United States Attorney James L. Santelle announced today that a two-count indictment was handed down Tuesday charging Todd Dyer, age 51, a resident of Lake Geneva, Wisconsin, with one count of wire fraud and one count of money laundering. The wire fraud count carries a maximum penalty of 20 years in prison and the money laundering count carries a maximum penalty of 10 years imprisonment.
Dyer was convicted in federal court in 1999 with charges related to his operation of a Ponzi scheme. He was sentenced to 70 months imprisonment for that conduct. Dyer and three others were charged on June 9 with running a separate scheme to defraud that resulted in various criminal counts. In that indictment, Dyer was charged in 31 counts.
According to the current indictment, Dyer defrauded a Missouri individual who was seeking funding to build a manufacturing plant. The plant was budgeted to cost $25 million. Dyer obtained $75,000 from this individual as a result of false representations and promises that Dyer had investors who could fund the entire $25 million cost. According to the indictment, Dyer had no such investors available and used the entire $75,000 for personal purposes.
The case was investigated by agents from the Internal Revenue Service Criminal Division, and agents the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Joseph R. Wall and Benjamin W. Proctor.
The public is cautioned that criminal charges do not constitute evidence of guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.
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KCK Man Indicted for CarjackingRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was indicted by a federal grand jury today for carjacking.
Stephen D. Bagley, 25, of Kansas City, Kan., was charged in a three-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment alleges that Bagley stole a 2008 Nissan Altima at gunpoint on June 22, 2014. Bagley allegedly brandished a Glock .40-caliber pistol during the carjacking. Bagley, who has been convicted of a felony, allegedly was in possession of ammunition.
Bagley is charged with one count of carjacking, one count of using a firearm during a crime of violence and one count of being a felon in possession of ammunition.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jess E. Michaelsen. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Jenkintown Payday Lender Pleads Guilty to RICO ConspiracyRead the Press Release
PHILADELPHIA - Adrian Rubin, 58, of Jenkintown, PA, pleaded guilty today to conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), for the operation of a “payday lending” business that violated the usury laws of Pennsylvania and other states. Rubin also admitted to conspiracy to commit mail fraud and wire fraud, and two counts of mail fraud. U.S. District Court Judge Eduardo C. Robreno scheduled a sentencing hearing for October 28, 2015. Rubin faces a possible advisory sentencing guideline range of at least 10 years in prison with a statutory maximum sentence of 65 years in prison, three years of supervised release, a fine of up to $1 million, and a $400 special assessment.
Between 1998 and 2012, Rubin owned, controlled, financed, and/or worked for multiple businesses that issued short-term loans, commonly known as “payday loans.” Rubin conspired with other people to evade state usury laws and other restrictions on payday loans by engaging in a series of deceptive business practices that included: (a) paying a federally-insured bank, which was not subject to state laws, to pretend that it was the payday lender; (b) relocating his operations to a state considered “usury friendly;” and (c) paying an Indian tribe to pretend that it was the actual payday lender as part of a scheme to have the tribe claim that “sovereign immunity” prevent application of state usury laws and other regulations.
Rubin and his co-conspirators also went to great lengths to hide Rubin’s personal involvement in the payday lending business because he had a criminal record. Rubin, with the knowledge of his co-conspirators, incorporated his payday businesses in the names of his father-in-law and a family friend and then forged the signatures of those people on company documents. In total, Rubin and his co-conspirators reaped tens of millions of dollars from the defendant’s payday lending activities, much of which stemmed from the collection of fees that were usurious in Pennsylvania and elsewhere.
Rubin also admitted helping his two sons with their own multi-million-dollar telemarketing scam that duped more than 70,000 people into buying a credit card http:/www.justice.gov/usao-edpa/pr/trio-charged-selling-worthless-credit-cards. The Platinum Trust card was falsely marketed as a general-purpose credit card that customers could use to buy merchandise over the Internet and improve their credit. Blake and Chase Rubin pleaded guilty and are awaiting sentencing.
This case was investigated by the FBI, the United States Postal Inspection Service, and IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorneys Mark B. Dubnoff and Joel M. Sweet.
Investment Company Executives Indicted for $1.5 Billion Ponzi SchemeRead the Press Release
The president and chief executive officer and two former Asia-based executives of a Las Vegas investment company were indicted today for their roles in an alleged $1.5 billion Ponzi scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Division made the announcement.
“The defendants allegedly preyed on thousands of unsuspecting Japanese victims to enrich themselves by operating a billion-plus dollar Ponzi scheme,” said Assistant Attorney General Caldwell. “This prosecution shows that the Criminal Division will pursue not only those who victimize American citizens, but also those who use the U.S. as a home base to defraud victims abroad.”
“Investment fraud and other financial fraud cases are a high priority for the U.S. Attorney’s Office in Nevada,” said U.S. Attorney Bogden. “These defendants are accused of using a Nevada corporation to conduct their $1.5 billion fraud scheme and falsely telling thousands of overseas victims that their investments would be safely held and managed by an independent, third-party escrow agent in Nevada. Fraudulent ruses and schemes perpetrated by Nevadans using Nevada corporations and entities will continue to be addressed by this office.”
“These indictments are a reminder of the FBI’s determination to identify, investigate and bring to justice those who are committing financial crimes against innocent consumers,” said Special Agent in Charge Bucheit. “We are appreciative of the continued support we receive from our international, federal, state and local law enforcement partners.”
Edwin Fujinaga, 68, of Las Vegas; Junzo Suzuki, 66, of Tokyo; and Paul Suzuki, 36, of Tokyo, were charged in an indictment with eight counts of mail fraud and nine counts of wire fraud. Fujinaga also is charged with three counts of money laundering. The indictment seeks from all three defendants forfeiture of the proceeds from the alleged crimes.
Fujinaga was the president and CEO of Las Vegas-based MRI International Inc. (MRI). Junzo Suzuki previously was MRI’s executive vice president for Asia Pacific, and Paul Suzuki previously was the company’s general manager for Japan operations. MRI purportedly specialized in “factoring,” whereby the company purchased accounts receivable from medical providers at a discount, and then attempted to recover the entire amount, or at least more than the discounted amount, from the debtor.
According to allegations in the indictment, from at least 2009 to 2013, Fujinaga and the Suzukis fraudulently solicited investments from thousands of Japanese residents, and MRI currently owes investors over $1.5 billion. Specifically, the indictment alleges that Fujinaga and the Suzukis promised investors a series of interest payments that would accrue over the life of the investment and that would be paid out along with the face value of the investment at the conclusion of the investments’ duration. The defendants allegedly solicited investments by, among other things, promising investors that their investments would be used only for the purchase of medical accounts receivable (MARS) and by representing that investors funds would be managed and safeguarded by an independent third-party escrow company.
The indictment further alleges that MRI operated as a Ponzi scheme, wherein the defendants used new investors’ money to pay prior investors’ maturing investments. According to the indictment, the defendants also allegedly used investors’ funds for purposes other than the purchase of MARS, including paying themselves sales commissions, subsidizing gambling habits, funding personal travel by private jet, and other personal expenses.
The charges contained in an indictment are merely accusations. A defendant is presumed innocent until and unless proven guilty.
This case is being investigated by the FBI’s Las Vegas Division. Significant assistance was provided by the U.S. Securities and Exchange Commission, the Criminal Division’s Office of International Affairs and Japanese authorities. This case is being prosecuted by Assistant Chief Albert B. Stieglitz Jr. and Trial Attorney Melissa Aoyagi of the Criminal Division’s Fraud Section and First Assistant U.S. Attorney Steven W. Myhre of the District of Nevada.
If you believe you are a victim of this offense, please click on the following link for more information: justice.gov/usao-nv/united-states-v-edwin-fujinaga-junzo-suzuki-and-paul-suzuki-mri.
MRI Indictment
Investment Company Executives Indicted for $1.5 Billion Ponzi SchemeRead the Press Release
WASHINGTON – The president and chief executive officer and two former Asia-based executives of a Las Vegas investment company were indicted today for their roles in an alleged $1.5 billion Ponzi scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Division made the announcement.
“The defendants allegedly preyed on thousands of unsuspecting Japanese victims to enrich themselves by operating a billion-plus dollar Ponzi scheme,” said Assistant Attorney General Caldwell. “This prosecution shows that the Criminal Division will pursue not only those who victimize American citizens, but also those who use the U.S. as a home base to defraud victims abroad.”
“Investment fraud and other financial fraud cases are a high priority for the U.S. Attorney’s Office in Nevada,” said U.S. Attorney Bogden. “These defendants are accused of using a Nevada corporation to conduct their $1.5 billion fraud scheme and falsely telling thousands of overseas victims that their investments would be safely held and managed by an independent, third-party escrow agent in Nevada. Fraudulent ruses and schemes perpetrated by Nevadans using Nevada corporations and entities will continue to be addressed by this office.”
“These indictments are a reminder of the FBI’s determination to identify, investigate and bring to justice those who are committing financial crimes against innocent consumers,” said Special Agent in Charge Bucheit. “We are appreciative of the continued support we receive from our international, federal, state and local law enforcement partners.”
Edwin Fujinaga, 68, of Las Vegas; Junzo Suzuki, 66, of Tokyo; and Paul Suzuki, 36, of Tokyo, were charged in an indictment with eight counts of mail fraud and nine counts of wire fraud. Fujinaga also is charged with three counts of money laundering. The indictment seeks from all three defendants forfeiture of the proceeds from the alleged crimes.
Fujinaga was the president and CEO of Las Vegas-based MRI International Inc. (MRI). Junzo Suzuki previously was MRI’s executive vice president for Asia Pacific, and Paul Suzuki previously was the company’s general manager for Japan operations. MRI purportedly specialized in “factoring,” whereby the company purchased accounts receivable from medical providers at a discount, and then attempted to recover the entire amount, or at least more than the discounted amount, from the debtor.
According to allegations in the indictment, from at least 2009 to 2013, Fujinaga and the Suzukis fraudulently solicited investments from thousands of Japanese residents, and MRI currently owes investors over $1.5 billion. Specifically, the indictment alleges that Fujinaga and the Suzukis promised investors a series of interest payments that would accrue over the life of the investment and that would be paid out along with the face value of the investment at the conclusion of the investments’ duration. The defendants allegedly solicited investments by, among other things, promising investors that their investments would be used only for the purchase of medical accounts receivable (MARS) and by representing that investors funds would be managed and safeguarded by an independent third-party escrow company.
The indictment further alleges that MRI operated as a Ponzi scheme, wherein the defendants used new investors’ money to pay prior investors’ maturing investments. According to the indictment, the defendants also allegedly used investors’ funds for purposes other than the purchase of MARS, including paying themselves sales commissions, subsidizing gambling habits, funding personal travel by private jet, and other personal expenses.
The charges contained in an indictment are merely accusations. A defendant is presumed innocent until and unless proven guilty.
This case is being investigated by the FBI’s Las Vegas Division. Significant assistance was provided by the U.S. Securities and Exchange Commission, the Criminal Division’s Office of International Affairs and Japanese authorities. This case is being prosecuted by Assistant Chief Albert B. Stieglitz Jr. and Trial Attorney Melissa Aoyagi of the Criminal Division’s Fraud Section and First Assistant U.S. Attorney Steven W. Myhre of the District of Nevada.
If you believe you are a victim of this offense, please click on the following link for more information: justice.gov/usao-nv/united-states-v-edwin-fujinaga-junzo-suzuki-and-paul-suzuki-mri
Ida Grove Man Charged with Methamphetamine ConspiracyRead the Press Release
Nathan Paulsen, 28, from Ida Grove, Iowa, has been charged with one count of conspiracy to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. The charges are contained in an Indictment filed on June 17, 2015, in United States District Court in Sioux City.
The Indictment alleges that, from about 2012 through June 2015, Paulsen conspired to distribute 500 grams or more of methamphetamine mixture; and on or about June 6, 2014, he possessed with intent to distribute 500 grams or more of methamphetamine mixture.
If convicted on all charges, Paulsen faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, $200 in special assessments, and at least five years of supervised release following any imprisonment.
Paulsen appeared on June 26, 2015, in federal court in Sioux City and was held without bond. Paulsen’s next appearance for trial is set for August 3, 2015.
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 prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by Iowa Division of Narcotics Enforcement, Ida County Sheriff’s Office, and Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR15-4038.
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Honduran Man Sentenced for Illegal Use of a Social Security NumberRead the Press Release
ESMIN ESPINOZA-ERAZO, age 25, a citizen of Honduras who currently resides in Hammond, Louisiana, was sentenced today after previously pleading guilty to a one-count Indictment for illegal use of a Social Security Number, announced U. S. Attorney Kenneth Allen Polite, Jr. today.
U.S. District Judge Kurt D. Engelhardt sentenced ESMIN ESPINOZA-ERAZO to 27 months imprisonment followed by 3 years of supervised release, a $2,500 fine, and a $100 special assessment.
According to the Indictment, on or about July 16, 2013, ESMIN ESPINOZA-ERAZO submitted a social security number that did not belong to him to a Louisiana Department of Motor Vehicles Office in order to obtain a Louisiana identification card. Based on that false submission, an employee with the Department of Motor Vehicles issued ESMIN ESPINOZA-ERAZO a Louisiana identification card.
U.S. Attorney Polite praised the work of the Homeland Security Investigations and the Louisiana State Police in investigating this matter. Assistant United States Attorney Spiro G. Latsis is in charge of the prosecution.
Harrisburg Man Indicted for 14 Central Pennsylvania Bank RobberiesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Harrisburg man was indicted by a federal grand jury in Harrisburg on charges of committing 14 bank robberies in 4 central Pennsylvania counties from November 2014 through February 2015.
According to United States Attorney Peter Smith, Andre Mosley, age 47, was charged with robbing 14 financial institutions in Dauphin, Cumberland, Franklin and York Counties from late 2014 through February of 2015. The total amount taken is estimated at approximately $52,000. The institutions were:
Members 1st Federal Credit Union, Harrisburg
Fulton Banks, two Harrisburg branches
Mid-Penn Bank, two Harrisburg branches
M&T Bank, Harrisburg
Patriot Federal Credit Union, Chambersburg
PNC Bank, Carlisle
Members 1st Federal Credit Union, Carlisle
Citizens Bank, Highspire
Fulton Bank, Hummelstown
Santander Bank, Red Lion
Northwest Savings Bank, York
The case was investigated by the Harrisburg Office of the Federal Bureau of Investigation’s Violent Crimes Task Force, the Harrisburg Police Department, the Pennsylvania State Police and local and municipal police departments in the communities where the financial institutions were located. Prosecution of the case has been assigned to Assistant United States Attorney William A. Behe.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment on each count, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Harrisburg Man Federally Indicted for Drug and Firearm OffensesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Tyler Brookin-Jones, 24, of Harrisburg, Pennsylvania, was indicted by a federal grand jury in Harrisburg. The indictment charges Brookin-Jones with distribution of a controlled substance and possession of a firearm by a convicted felon.
According to United States Attorney Peter Smith, the charges against Brookin-Jones are a result of allegations that Brookin-Jones distributed cocaine base, also known as “crack cocaine,” on two occasions in Harrisburg in April of 2015. Law enforcement officers later found Brookin-Jones in possession of a stolen firearm.
This case is being investigated by the Federal Bureau of Investigation and the Harrisburg Bureau of Police. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Greenville Man Sentenced for Drug ConspiracyRead the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flanagan sentenced RANDALL STREETER, 38,of Greenville, North Carolina, to 141 months in prison and 6 years of supervised release for conspiracy to distribute and possess with the intent to distribute heroin, cocaine and crack cocaine. STREETER previously pled guilty to these charges on March 10, 2015.
The Greenville Regional Drug Task Force used a confidential informant to buy heroin from STREETER on three occasions in May 2014. After the last purchase on May 29, 2014, detectives arrested STREETER and found STREETER in possession of heroin, crack cocaine and Percocet pills. The investigation revealed that STREETER was responsible for trafficking 9.12 grams of heroin, 70 grams of cocaine, 1 gram of crack cocaine and 2 Percocet pills. STREETER faced an enhanced sentence due to his status as a career offender based on his prior convictions. STREETER’S prior felony convictions include two counts of conspiracy to commit armed robbery, indecent liberties with a child, possession of cocaine and two counts of selling cocaine.
The investigation of this case was conducted by the Greenville Regional Drug Task Force. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Glen Dale, WV man convicted of selling oxycodoneRead the Press Release
WHEELING, WEST VIRGINIA – Jacob Kessler, 25, of Glen Dale, West Virginia, was convicted of oxycodone trafficking in federal court today, United States Attorney William J. Ihlenfeld, II announced.
An investigation by the Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Kessler sold oxycodone on multiple occasions in 2013, including a sale in February of 2013 near West Virginia Northern Community College.
Kessler pled guilty today to one count of “Distribution of Oxycodone within 1,000 feet of a Protected Location.” He faces up to forty years in prison and a fine of up to $2,000,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Randy Bernard prosecuted the case on behalf of the government.
U.S. Senior District Court Judge Frederick P. Stamp, Jr., presided.
Four Plead Guilty to Oxycodone DistributionRead the Press Release
DONALD FONTENOT, age 61; JOSEPH POUNDS, age 47; EDGAR POUNDS, age 65; and HOUSTON COTTON, age 67; residents of Bogalusa, Louisiana, each pled guilty today to multiple federal charges of selling Roxicodone 30mg tablets to an undercover Drug Enforcement Administration agent, announced U. S. Attorney Kenneth Allen Polite, Jr. Roxicodone is a branded formulation of oxycodone, a prescription-only Schedule II drug controlled substance and a highly addictive and abused semi-synthetic opioid.
According to court documents, DEA conducted the undercover drug purchases as part of an investigation into reports of widespread illegal street sales of Roxicodone pills in and around the City of Bogalusa. The investigation showed that Roxicodone 30mg tablets were being sold by pill traffickers for approximately twenty-five to thirty dollars ($25-30) per tablet. Agents further learned that many of these sellers were patients or close associates of patients of Clinic A, an unregistered pain management clinic operating as a ‘pill mill,’ dispensing Roxicodone prescriptions in exchange for cash outside the scope of professional medical practice and not for a legitimate medical purpose. Clinic A changed locations multiple times during the investigation, operating at times in the New Orleans area and in Kiln, Mississippi, and also changed names on paper, although no signage was ever posted outside the clinic stating the clinic’s name or otherwise indicating that a medical practice was operating therein.
U.S. District Judge Kurt D. Engelhardt scheduled sentencing for October 14, 2015. Each defendant faces a sentence of up to twenty years imprisonment per count. Five other defendants are charged in the Indictment, and trial is scheduled for July 27, 2015.
U.S. Attorney Polite praised the work of the DEA Tactical Diversion Squad in investigating this matter. Assistant United States Attorney Michael B. Redmann is in charge of the prosecution.
Four More Waco Area Aryan Brotherhood Members and Associates Sentenced to Prison for Role in Methamphetamine Distribution OperationRead the Press Release
In Waco, a federal district judge sentenced four Aryan Brotherhood (AB) members and associates to federal prison for their roles in a methamphetamine distribution conspiracy announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division, and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division.
This afternoon, United States District Judge Walter S. Smith sentenced:
- Henry David Walker (aka “Stalker”), age 52, of Temple, TX, to 211 months imprisonment followed by five years of supervised release and ordered him to pay a $2,000 fine;
- Jose Rodriguez, age 25, a resident alien living in Dallas, to 120 months imprisonment followed by three years of supervised release and ordered him to pay a $1,000 fine;
- Vicky Kay Levy, age 52, of Belton, TX, to 70 months imprisonment followed by three years of supervised release and ordered to pay a $1,000 fine; and,
- Ronnie Knepler, age 54, of Belton, to 60 months imprisonment followed by four years of supervised release and ordered to pay a $1,000 fine.
“These sentences resulted from unprecedented collaboration of federal, state, and local law enforcement targeting a large-scale prison gang involved in violent organized crime over three counties in Central Texas,” said FBI Special Agent in Charge Christopher Combs. “This effort not only exemplifies our commitment to prevent gang violence and criminal activity from poisoning our communities, but it also sends a clear message that we will relentlessly pursue and prosecute the leaders and members of these violent criminal enterprises regardless of where they lay their heads.”
“Operation ‘La Flama Blanca’ has inflicted a debilitating blow to the network of shadow and often violent facilitators of the Aryan Brotherhood of Texas,” said Joseph M. Arabit, Special Agent in Charge of the Drug Enforcement Administration--Houston Field Division. “This operation highlights a deliberate and strategic effort to cut off and shut down the supply of methamphetamine trafficked by the Aryan Brotherhood and the corresponding impact that this horrific drug inflicts on our communities.”
To date, 29 individuals have been sentenced in connection with this investigation to imprisonment ranging from 21 months to 35 years in federal prison. Sentencings for three co-defendants are pending. Sylvia O’Neal, age 41, of Temple, is scheduled to be sentenced on August 5, 2015. Amanda Petrie, age 35, of Temple, is set for 1:00pm on August 12, 2015. Colby Warren, age 40, of Gatesville, is scheduled to be sentenced on September 2, 2015.
All of the defendants named above pleaded guilty to one count of conspiracy to possess with intent to distribute methamphetamine. Robert Eaton also pleaded guilty to one count of possession of a firearm during a drug trafficking crime and one count of felon in possession of a firearm. David Henry Walker also pleaded guilty to two counts of felon in possession of a firearm. During this 10-month-long operation, investigators conducted several controlled methamphetamine purchases. To date, authorities have seized approximately nine pounds of “crystal” methamphetamine, 15 firearms, over $9,000 in U.S. Currency and other assets in connection with this investigation.
Derrick Cooper (aka “Red”), age 35, of Temple, and Chris Voerhis (aka “Lurch”), age 50, of Moffat, TX, were also charged by federal grand jury indictment as a result of this investigation. Both remain in federal custody awaiting jury selection and trial scheduled for August 17, 2015, before Judge Smith. Cooper and Voerhis are charged with one count of conspiracy to distribute between 50 grams and 500 grams of methamphetamine and face between five and 40 years imprisonment upon conviction.
This case is the result of a joint investigation conducted by the Federal Bureau of Investigation and the Drug Enforcement Administration together with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Temple Police Department, Texas Department of Public Safety, Texas Department of Criminal Justice-Office of Inspector General, McLennan County Sheriff’s Office, Coryell County Sheriff’s Office, Bell County Sheriff’s Office, Gatesville Police Department, Lampasas Police Department, Killeen Police Department, Austin Police Department and the United States Marshals Service. Assistant United States Attorneys Mark Frazier and Stephanie Smith-Burris are prosecuting this case on behalf of the Government.
Four Men Sentenced for the Armed Robbery of Armored Truck EmployeesRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Antonio Lamar Cooper, age 28, and Juwan Armarni Watkins, age 22, both of Washington, D.C., yesterday to 241 months in prison, and 210 months in prison, respectively, for interfering with interstate commerce by the armed robbery of employees who were transporting money in an armored truck, and using a firearm during the robbery. On July 6, 2015, Judge Hazel sentenced Maurice Lorenzo Foreman, age 24, of Oxon Hill, Maryland, and Eugene Robert Watkins, age 23, of Washington, D.C., to 255 months in prison, and 14 years in prison, respectively, for the same crimes.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief Mark A. Magaw of the Prince George’s County Police Department; Chief Cathy L. Lanier of the Metropolitan Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks.
According to their plea agreements and court documents, on January 15, 2014 the defendants drove a stolen vehicle to a restaurant on Allentown Road in Morningside, Maryland. Outside the restaurant, two armored truck employees were transporting money from the restaurant. One of the defendants pointed a gun at an employee’s face, pushed her to the ground, placed his gun on the back of her head and took her gun. Another defendant pointed his gun at the second employee’s head and took his gun as well. The defendants, all or some of whom were wearing masks and brandishing firearms, robbed the employees of $72,106.54 in cash, $4,028.81 in checks, and personal property.
During their escape, a citizen who witnessed the robbery followed the defendants from the scene and called 911 while in pursuit. The defendants realized that the witness was following them and shot at the witness, hitting the windshield and body of the witness’ vehicle several times. During that shooting, the witness was struck in the face by glass and/or bullet fragments.
According to court documents, Prince George’s County Police officers pursued the defendants’ stolen vehicle into Washington, D.C. where the defendants got out of their vehicle and attempted to flee. With the assistance of a canine search initiated by Metropolitan Police officers, the defendants were subsequently arrested.
United States Attorney Rod J. Rosenstein commended the FBI, Prince George’s County Police Department, Metropolitan Police Department and Prince George’s County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Daniel C. Gardner, Michael T. Packard and William D. Moomau, who prosecuted the case.
Former Security Officers Union Local President Charged with FraudRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Criminal Information was filed in U.S. District Court in Harrisburg charging the former president of the United Government Security Officers of America (UGSOA) Local 304 with stealing almost $67,000 in union funds during an eleven month period that he held the office.
According to United States Attorney Peter Smith, on over a hundred occasions between December 15, 2009 and November 16, 2010, Howard Royal, age 50, of Steelton, Pennsylvania, abused his position as the union president to make fraudulent unauthorized electronic transfers and withdrawals of $66,989.02 of the labor organization’s money. UGSOA represents security officers in state government agencies throughout Pennsylvania. Local 304 is headquartered in Harrisburg.
The investigation was conducted by U.S. Department of Labor and prosecution was assigned to Assistant United States Attorney Peter Hobart.
The government filed a plea agreement together with the Criminal Information. The agreement is subject to the approval of the court.
Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for Wire Fraud is 20 years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Former President of Townsend Controls Inc. Sentenced to Prison for Failing to Pay over $3.3 Million in Federal Employment Taxes and InterestRead the Press Release
A Burbank, Washington, businesswoman was sentenced yesterday to serve more than three years in prison following her February 2015 conviction of 10 counts of failing to pay over federal employment taxes to the Internal Revenue Service (IRS) after a five-day jury trial in U.S. District Court for the Eastern District of Washington, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael C. Ormsby of the Eastern District of Washington.
Maria Elizabeth Townsend, 39, was sentenced by U.S. District Court Judge Thomas O. Rice to serve 40 months in prison to be followed by three years of supervised release, and ordered to pay $3,327,124.49 in restitution to the IRS for employment taxes due and owing plus interest for her 10 counts that she was convicted of in the indictment, a $1,000 special assessment and $8,048.49 in prosecution costs. At the conclusion of yesterday’s sentencing hearing, Judge Rice remanded Townsend to the custody of the U.S. Marshals Service.
“Holding business owners accountable who willfully evade their employment tax obligations to line their own pockets is among the Tax Division’s highest priorities,” said Acting Assistant Attorney General Ciraolo. “These offenders, who not only steal from the United States, but also take advantage of honest competitors, will be prosecuted to the fullest extent of the law, and like Ms. Townsend, will face incarceration and substantial financial penalties.”
“The sentence imposed in this case reflects the seriousness of ‘white collar’ crime and that those accused of failing to pay over payroll taxes deducted from their employee’s pay checks to the IRS will be fairly and justly held accountable for their criminal conduct,” said U.S. Attorney Ormsby. “This case is yet another example of the commitment of the U.S. Attorney’s Office to prosecute aggressively fraud cases in the Eastern District of Washington. IRS-Criminal Investigation is commended for its tireless efforts in thoroughly investigating this case.”
“Employers who do not withhold employment taxes are not only cheating the government, they are cheating their own employees and creating financial problems for them,” said Chief Richard Weber of IRS-Criminal Investigation. “Ms. Townsend chose to ignore her duty to timely file and pay employment taxes and now has to pay the consequences. Investigating employment tax crimes remains one of IRS-CI’s highest priorities, keeping the playing field level for all businesses in the United States who obey the law and pay their taxes.”
According to information disclosed in court documents and at trial, Townsend was the president and majority shareholder of Townsend Controls Inc. (TCI), a Pascoelectrical contractor. Over time, TCI grew from a small company of 15 employees to more than 150 employees by 2008. The majority of TCI’s employees were members of Local 112 of the International Brotherhood of Electrical Workers Union (Local Union 112). Townsend was responsible for TCI’s operations and finances, and was required to file the Employer’s Quarterly Federal Tax Returns (IRS Forms 941) and pay over to the IRS the company’s federal income, social security and Medicare taxes, known as Federal Insurance Contribution Act (FICA) taxes, that were withheld from the wages of TCI’s employees. For 16 tax quarters, between Oct. 1, 2005, and Sept. 30, 2009, Townsend withheld $3,361,246 in federal employment taxes from the wages of Local Union 112 TCI employees, as well as TCI’s non-union employees, and failed to pay over those taxes due and owing to the IRS. In addition to failing to pay over the taxes due and owing, Townsend also did not file any Forms W-2 for her employees for 2007 and 2008 with the Social Security Administration.
Between April 2007 and September 2009, rather than pay the accumulating employment taxes due to the IRS, Townsend authorized the disbursement of more than $31 million in TCI funds to pay vendors and other business and personal expenses. Specifically, using TCI’s funds, Townsend paid TCI’s vendors and employees; paid a dividend of approximately $200,000 to one of her partners who co-signed a business loan; disbursed $300,000 towards the payment of her joint personal income tax obligations; disbursed more than $260,000 in funds to family members; and spent $22,000 to construct a pool at her residence, $30,000 to purchase a boat, $30,000 to purchase a Cadillac Escalade, $42,982 to purchase a Jeep Commander, $14,850 to purchase a timeshare at Walt Disney World and to fund various physical improvements to TCI’s headquarters.
During court proceedings, a psychiatrist for Townsend testified that she was suffering from multiple psychiatric disorders that paralyzed her when it came to being able to pay over the quarterly employment taxes to the IRS, despite receiving quarterly notices from the IRS that taxes were due and owing. At sentencing, Judge Rice credited the testimony of the psychiatrist who testified for the government and commented that in every other aspect of her life, Townsend was functioning, which included paying the company’s state tax obligations.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Ormsby commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney George J.C. Jacobs III of the Eastern the District of Washington and Trial Attorney Lisa L. Bellamy of the Tax Division, who are prosecuting the case.
Former North Carolina House of Representative Sentenced for Theft from A Non-ProfitRead the Press Release
GREENVILLE - United States Attorney Thomas G. Walker announced today that, STEPHEN A. LAROQUE, 51, of Kinston, North Carolina, was sentenced to 24 months imprisonment followed by 2 years of supervised release. The sentence relates to his theft and embezzlement of hundreds of thousands of dollars from a non-profit of which he served as the Executive Director. Additionally, LAROQUE was ordered to pay $300,000 in criminal restitution to the U.S. Department of Agriculture (USDA) and was fined $5,000.
On January 26, 2015, LAROQUE pled guilty to one count of theft, embezzlement, and misapplication of $150,000 in USDA funds that had been loaned to East Carolina Development Company (“ECDC”), a nonprofit organization based in Kinston, North Carolina. LAROQUE served as Executive Director of ECDC, which was created to provide loans to small rural businesses using federal funds. LAROQUE used his fiduciary position as head of the non-profit to steal and embezzle the federal funds. As part of his plea, LAROQUE agreed to pay back $300,000 in criminal proceeds to the USDA.
According to the Indictment in this case, LAROQUE accomplished his $300,000 theft through four disbursements made by ECDC under the guise of loans to LAROQUE’s wholly-owned company, LaRoque Management Group (LMG). A review of bank records established that such funds were funneled through LMG and then used for LAROQUE’S personal benefit, including his investment in an ice skating rink in Greenville and the purchase of rental property in Kinston.
On June 7, 2013, after a three-week trail, a jury found LAROQUE guilty on each of the twelve counts. Later, the court granted a new trial based on an issue regarding a juror’s internet research during deliberations. The guilty plea came less than a week prior to the second trial.
Investigation of this case was conducted by the Internal Revenue Service - Criminal Investigation, the United States Department of Agriculture, Office of Inspector General-Investigations, Raleigh Office, and the Federal Bureau of Investigation. Assistant United States Attorneys, Dennis M. Duffy and Adam F. Hulbig prosecuted the case.
Former Murray County Judge Sentenced to Five Years in Federal PrisonRead the Press Release
ROME, Ga. – Former Murray County, Georgia, Chief Magistrate Judge Bryant L. Cochran has been sentenced to federal prison for orchestrating the false arrest of a woman who had been sexually propositioned by Cochran, for tampering with a witness, for sexually assaulting a county employee, and for illegally searching a county employee’s personal cell phone.
“Cochran completely abused the trust given to him by the good citizens of Murray County,” said Acting United States Attorney John A. Horn. “Cochran used the power of the bench to victimize a citizen seeking justice and to exploit his staff. There is no greater breakdown in the justice system than when the judge himself violates other citizens’ rights to simply advantage himself.”
“This sentencing concludes a lengthy investigation that not only ended the career of former Murray County Chief Magistrate Judge Cochran, but also the careers of two Murray County law enforcement officers,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office. “While the criminal actions of these individuals are disheartening, in the end, truth and justice prevailed.”
“Being in a position to uphold and enforce the law does not mean you are above the law,” said Vernon Keenan, Director, Georgia Bureau of Investigation. “The GBI will continue to work with the FBI and the U.S. Attorney's office to investigate and hold accountable those who are involved in corruption, regardless of their position.”
According to Acting U.S. Attorney Horn, the charges, and other information presented in court: From January 1, 2004, to August 15, 2012, Bryant Cochran served as the Chief Magistrate Judge in Murray County, Georgia.
In that position, on April 9, 2012, Cochran met with a female citizen regarding a routine legal matter. During the meeting, Cochran made inappropriate sexual advances towards the citizen, including an offer to trade sex for a favorable legal ruling. By mid-July 2012, the allegations of Cochran’s sexual misconduct towards the citizen had become public and gained significant media coverage. In response, Cochran called at least six local and state police officers providing them with a so-called “tip” – that the citizen carried drugs in her vehicle. Cochran also encouraged several of the police officers to stop the citizen because pulling her over would assist Cochran and would dissipate the heat caused by her complaint.
In a further effort to discredit the citizen, Cochran conspired with Clifford J. Joyce (who was Cochran’s tenant) to have the citizen framed for drug possession. Specifically, on or about August 12, 2012, Joyce planted a metal tin containing five packets of methamphetamine under the fender of the citizen’s car.
Two days later, on August 14, 2012, Murray County Sheriff’s Office Deputy Joshua Greeson (who has since been convicted of witness tampering) conducted a traffic stop on a car occupied by the citizen. During the traffic stop, several officers and a police drug dog searched the car for approximately ten minutes – but did not find any drugs. Thereafter, Captain Michael Henderson, who is Cochran’s cousin and who has also been convicted of witness tampering, had an approximately two-minute telephone conversation with Cochran. Following that call, Henderson told an officer at the scene that according to his information; the citizen hid her drugs in a magnetic box under the left, rear tire well. Upon receiving that information, Greeson found the metal box magnetically attached to the car in that precise location. Inside the box, Greeson recovered five small packets containing methamphetamine. Greeson then told the citizen that he had recovered drugs from her car. At that point, the citizen stated that she had been set up by Judge Cochran or Joyce. Despite this, Greeson arrested the citizen and transported her to jail.
On August 15, 2012, the day after the arrest, Cochran resigned his position as Murray County’s Chief Magistrate Judge. On August 22, 2012, Joyce admitted to law enforcement officers that he planted drugs – after which the local District Attorney dismissed the charges against the woman. Finally, in an apparent effort to cover up the framing of the woman, Cochran tried to persuade a witness to provide false information to law enforcement officers.
As the Chief Magistrate Judge, Cochran also sexually assaulted a Murray County court employee and unlawfully searched the personal cellular telephone of another Murray County employee.
On May 13, 2014, a federal grand jury indicted Cochran, 45, of Chatsworth, Georgia for: (1) conspiracy against rights; (2) deprivation of rights under color of law, (3) conspiracy to distribute a controlled substance, and (4) tampering with a witness. The trial of Cochran began on December 2, 2014, and on December 11, 2014, the jury returned guilty verdicts on all counts (after one day of deliberations).
Bryant L. Cochran was sentenced to five years in prison, followed by three years of supervised release, and 100 hours of community service.
This case also resulted in the following convictions:
- On December 13, 2013, Clifford J. Joyce, of Murray County, Ga., was sentenced to one year, six months in prison for conspiring to distribute a controlled substance.
- On October 30, 2013, Michael Henderson, of Murray County, Ga., was sentenced to one year and one day in prison for tampering with a witness.
- On September 25, 2013, Joshua Greeson, of Murray County, Ga., was sentenced to 10 months in prison for tampering with a witness.
This case was investigated by the Federal Bureau of Investigation and Georgia Bureau of Investigation.
Assistant United States Attorneys Jeffrey W. Davis and William L. McKinnon, Jr. prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao-ndga.
Former Military Contractor Sentenced to 54 Months in Prison for Paying Bribe to Army Officer During Iraq WarRead the Press Release
A former military contractor who ran two Kuwaiti companies during the Iraq War was sentenced today to 54 months in prison for paying a $15,000 bribe to a lieutenant in the Army National Guard in exchange for the award of a contract. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania made the announcement.
George H. Lee, 71, of Philadelphia, was sentenced by U.S. District Judge Joel H. Slomsky of the Eastern District of Pennsylvania.
In connection with his guilty plea, Lee admitted that, as the president and chief executive officer of American Logistics Services (ALS), a Kuwaiti company providing supplies to the U.S. military in Iraq, he paid a $15,000 bribe to former Lieutenant Markus E. McClain in exchange for favorable official action in the awarding of an extension of a lucrative bus contract to ALS. Specifically, Lee admitted that, in August 2004, several of his employees met with former Lieutenant McClain at Camp Arifjan, Kuwait, and offered McClain $15,000 and a Rolex watch in exchange for former Lieutenant McClain’s assistance in getting the contract extension to ALS. Former Lieutenant McClain ultimately accepted the bribe payment.
During the sentencing hearing, the court also made specific findings that Lee directed the payment of over $1 million in bribes to other Army personnel.
Former Lieutenant McClain previously pleaded guilty to one count of accepting a gratuity, and will be sentenced on Oct. 23, 2015. In addition, Lee’s son, Justin Lee, previously pleaded guilty to one count of conspiracy to commit bribery and four counts of bribery for his role in the scheme, and is scheduled to be sentenced on Oct. 29, 2015.
The case is being investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the U.S. Department of Homeland Security Immigration and Customs Enforcement, and previously was investigated by the Office of the Special Inspector General for Iraq Reconstruction. The case is being prosecuted by Trial Attorneys John Keller and Richard Evans of the Criminal Division’s Public Integrity Section and the U.S. Attorney’s Office of the Eastern District of Pennsylvania.
Fitchburg Man Sentenced for Attempting to Take Delivery of over 500 Pounds of MarijuanaRead the Press Release
CONCORD, N.H. – Acting United States Attorney Donald Feith announced today that Todd Burke, 52, of Fitchburg, Massachusetts, was sentenced today to 28 months in prison by the United States District Court. The court’s sentence was less than the otherwise applicable guideline of 46 months based on the court’s findings that Burke did not profit from his criminal activity, that he was unlikely to recidivate, and that he lacked a criminal history.
Burke pleaded guilty on March 28, 2015, to attempted possession of marijuana with intent to distribute.
According to documents filed in federal court, federal agents located a pallet of boxes that contained approximately 263 kilograms (approximately 579 pounds) of marijuana in Vermont in September of 2014. Agents learned that the marijuana was scheduled to be delivered to a business in Peterborough, New Hampshire. Burke was arrested on September 24, 2014, after he traveled to Peterborough and attempted to take possession of the marijuana. Agents later recovered additional quantities of marijuana and hashish at Burke’s residence in Fitchburg.
In addition to the 28 months of incarceration, Burke was sentenced to serve three years of supervised release after completion of his prison sentence. During the period of supervised release, Burke’s behavior will be monitored by the United States Probation and Pretrial Services Office. Burke also agreed to forfeit his interest in a piece of real estate in Fitchburg to the United States.
This case was investigated by Drug Enforcement Administration, the Fitchburg Police Department and the Peterborough Police Department. It was prosecuted by Assistant United States Attorney John J. Farley.
Fifth Monroe County Defendant Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a fifth Monroe County defendant pleaded guilty today in United States District Court in Scranton, before Senior United States District Judge Edwin M. Kosik, in connection with a methamphetamine-trafficking ring.
According to United States Attorney Peter J. Smith, Anthony Ianuale, age 43, of Sciota, admitted to aiding the distribution of methamphetamine in the Monroe County area in 2014.
Ianuale was one of seven persons indicted by a federal grand jury in April 2014, after an investigation by the Drug Enforcement Administration, the Pennsylvania State Police, the Pocono Mountain Regional Police Department and the Stroud Regional Police Department.
Previously, Scott Borushak, age 51, Emmanuel Tucker, age 39, both of Stroudsburg, and Fred Baumgartner, age 34, of Kresgeville, pleaded guilty and admitted to participating in the trafficking. Jeannine Altemose, age 53, of Stroudsburg, previously entered a guilty plea and admitted to allowing methamphetamine to be distributed and stored in her residence. The charges against the remaining defendants are currently pending.
The cases are being prosecuted by Assistant United States Attorney Robert J. O’Hara.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a $1,000,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Federal and Local Law Enforcement Execute Search Warrants at Large Scale Commercial Marijuana Cultivation Facilities on Tribal LandsRead the Press Release
SACRAMENTO, Calif. — Earlier today, special agents with the Bureau of Indian Affairs (BIA) and the Drug Enforcement Administration (DEA), assisted by other federal and state agencies and the Modoc County Sheriff’s Office, conducted a search of two large-scale marijuana cultivation facilities located on federally recognized tribal lands at the Alturas Indian Rancheria and the XL Ranch in Modoc County, United States Attorney Benjamin B. Wagner announced. At both sites, law enforcement seized a total of at least 12,000 marijuana plants and over 100 pounds of processed marijuana. Other than contraband marijuana and items of evidentiary value, no tribal property was seized, and no federal charges are pending.
The search warrants are part of an ongoing investigation relating to the financing and management of the commercial marijuana-cultivation projects. The search warrant affidavits were unsealed today. While it is generally the policy of the U.S. Attorney’s Office to decline commenting upon ongoing investigations, exceptions are sometimes made when a matter has received substantial publicity and there is a need to inform the community regarding law enforcement actions taken in furtherance of particular public interests. The marijuana grows in question have received substantial attention in Modoc County, as has the U.S. Department of Justice’s guidance relating to marijuana cultivation on tribal lands.
The cultivation facility at the Alturas Indian Rancheria was located within the tribe’s former Event Center, within approximately 100 yards of the tribe’s publicly operated gaming facility, the Desert Rose Casino. The facility on the XL Ranch was immediately adjacent to Highway 395 and the banks of the Pit River, and it consisted of 40 newly constructed greenhouse structures, each of which was capable of accommodating approximately 1,000 marijuana plants, and an additional gable-roofed structure that boosted the square footage of roof-covered structures by another 50 percent. Both of the grow operations, which appear to have been operating in conjunction with each other, were well in excess of the locally enacted marijuana cultivation limits applicable to county land. The volume of marijuana that the XL facility alone was capable of producing, estimated at approximately 40,000-60,000 plants, far exceeds any prior known commercial marijuana grow operation anywhere within the 34-county Eastern District. According to tribal representatives, all of the marijuana cultivated at both facilities was intended to be distributed off tribal lands at various unidentified locations. As indicated in the search warrant affidavits, the investigation to date indicates both operations may have been financed by a third-party foreign national.
The United States Attorney’s Office follows Department of Justice guidelines in exercising its prosecutorial discretion and evaluating the need for investigative and enforcement action with respect to potential violations of federal law. The investigation of the cultivation facilities searched today indicates that both are commercial marijuana cultivation projects operated with the intent to transport large quantities of marijuana off tribal lands for distribution at various locations yet to be identified by the tribes. These facts raise multiple federal enforcement concerns, including the diversion of marijuana to places where it is not authorized and potential threats to public safety, both of which are listed priorities in Department of Justice guidelines. These concerns are only heightened when the activity occurring off tribal lands is not subject to effective state or local regulation.
Consistent with Department of Justice guidelines and the federal government’s trust relationship with recognized tribes, the U.S. Attorney’s Office consulted with members and representatives of both tribes on multiple occasions before today’s action. The U.S. Attorney’s Office reminded the tribes that the cultivation of marijuana is illegal under federal law and that anyone engaging in such activity did so at the risk of enforcement action. The U.S. Attorney’s Office also expressed concern that large-scale commercial marijuana grows on tribal lands have the potential to introduce quantities of marijuana in a manner that violates federal law, is not consistent with California’s Compassionate Use Act, and undermines locally enacted marijuana regulations. The U.S. Attorney’s Office stated that this potential was a concern for local law enforcement throughout the Eastern District and potentially warranted federal action. search warrant (1.63 MB)
Farmington Man Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Michael Graham, 42, of Farmington, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to being a felon in possession of firearms and ammunition.
Graham was charged in an indictment on Aug. 26, 2014, with being a felon in possession of firearms and ammunition on Feb. 9, 2014 in San Juan County, N.M. Graham was prohibited at the time from being in possession of firearms or ammunition because he had previously been convicted of accessory to bringing contraband into a jail, aggravated assault, and being a felon in possession of a firearm.
During today’s proceedings, Graham pled guilty to the indictment under a plea agreement with the U.S. Attorney’s Office. In entering the guilty plea, Graham admitted that on Feb. 9, 2014, in Farmington, he possessed a loaded pistol with an obliterated serial number. Graham admitted knowing that as a convict felon, he was prohibited from possessing firearms or ammunition.
At sentencing, Graham faces a statutory maximum penalty of ten years in federal prison followed by up to three years of supervised release. Graham remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department and is being prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
Former Upper Arlington Financial Advisor Pleads Guilty to Defrauding InvestorsRead the Press Release
COLUMBUS – Jason W. Cox, 39, now of Dublin, Ohio pleaded guilty to two counts of money laundering, two counts of mail fraud, and one count of wire fraud relative to a scheme to defraud his clients, one of which was an impaired adult, of the funds they had invested through him as their financial advisor.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation announced the plea entered into today before U.S. District Chief Judge Edmund A. Sargus, Jr.
According to court documents, the defendant used his position as a financial advisor with a national financial services company at their Upper Arlington office to defraud an impaired adult and other victims.
The impaired adult had been introduced to Cox by her father and was told by her father that Cox would be her financial advisor and that he was a person she could trust to manage her money after her father was no longer around to do so. After the victim’s father died, Cox devised and carried out schemes to defraud the impaired adult, resulting in the loss of her residence and approximately $ 400,000 in assets over the course of 18 months.
Cox would cause the sale of a fund in the victim’s accounts and then wire the funds to her bank or mail a check to her that would be deposited into her account. He would then convince the victim to give him cash or a check in an amount equal to or slightly less than the amount transferred. These amounts were frequent and were generally in thousands of dollars.
“She believed that she and Cox were business partners even though she was unclear what that business was,” Assistant United States Attorney Deborah A. Solove said. “Since she has little concept of the value of money or the relative amounts changing hands, she thought that the money she agave him and the money he gave her was somehow a normal thing to do.”
Cox convinced a second victim to invest some of the money the victim transferred from his 401k after being laid off. Cox asked the victim to invest $60,000 with a guaranteed 10 percent rate of return. The victim agreed to invest $10,000 after Cox sent him the agreement in writing in his employer’s business envelope. Although the victim received his principal and the interest eventually, Cox was fired when this came to light.
The defendant defrauded a third client, an elderly woman, whose adult daughters were handling her financial affairs, whom he paid back with the impaired adult’s money.
Cox was arrested on December 11, 2014 and indicted on January 8, 2015.
“Jason Cox took advantage of an impaired individual for his own financial gain, which is reprehensible,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime.”
Money laundering carries a maximum sentence of 10 years in prison and a $250,000 fine. Mail fraud and wire fraud are crimes punishable by up to 20 years in prison and a $250,000 fine.
U.S. Attorney Stewart commended the investigation of this case by the IRS Criminal Investigation Division, and Assistant U.S. Attorney Deborah A. Solove, who is prosecuting the case.
Executives of Panamanian Corporation and Aviation Company Arrested in Multi-Million Dollar Money Laundering StingRead the Press Release
Michael J. Dodd, also known as “Michael Stanley,” Kenneth Ardell Landgaard, and James Robert Shipman, Jr. were arrested today on charges that they conspired to launder over two million dollars of proceeds from what they thought to be a penny stock fraud scheme. The money was, in fact, provided to the defendants by an undercover law enforcement agent who posed as a criminal stock promoter as part of a sting operation. Defendants Landgaard and Shipman were arrested after flying to an airport in New York on a private jet to take possession of $2,200,000 in cash they had agreed to launder through banks in Panama and Belize. The defendants had already laundered $400,000 in cash previously provided by the undercover agent. Dodd was arrested a few hours later at a Manhattan restaurant where he expected to meet with the undercover agent.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Raymond R. Parmer Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI).
“As charged in the criminal complaint, these defendants agreed to transport millions of dollars of stock fraud proceeds on private jets to Panama and then engage in a series of financial transactions. They did so with the intention of laundering the money, evading federal tax and banking laws, and lining their own pockets,” stated Acting United States Attorney Currie. “Today’s arrests have grounded these defendants, and will serve as a warning to others who are similarly inclined. We are committed to closing fraudulent offshore safe havens and prosecuting those who seek to abuse the financial markets to enrich themselves.”
“As alleged, the defendants willingly entered a scheme to transport more than $2 million of stock fraud profits out of the United States using private jets and financial transactions in exchange for a 13 to 15 percent fee. The FBI is committed to working with our law enforcement partners to investigate and bring those who seek to evade federal tax and banking laws to justice.” stated FBI Assistant Director-in-Charge Rodriguez.
“Conspiring to launder millions of dollars on a private jet may have seemed like a great idea to evade law enforcement but we have proven this method does not fly,” said HSI New York Special Agent-in-Charge Parmer. “HSI and its partners will continue to investigate and prosecute those who attempt to conceal and launder illicit proceeds, no matter what the method.”
“Although it is not primarily thought about from this perspective, consider how money laundering erodes our nation's tax system,” said IRS-CI Special Agent-in-Charge Kitchen. “This is why money laundering investigations are important to the Internal Revenue Service and why we work with our law enforcement partners to dissect all types of complex money laundering schemes, including those with international ramifications.”
According to the complaint unsealed this afternoon and other documents filed in the Eastern District of New York, the defendants used private jets and off-shore bank accounts in Panama to launder cash for an undercover FBI agent who posed as a corrupt stock promoter. In his dealings with the defendants, the undercover agent represented himself to be a middleman working with corrupt stock brokers who artificially inflated prices for worthless stock in exchange for high commissions. In exchange for a 13% to 15% fee, the defendants agreed to launder $2,600,000. Immediately prior to their arrest earlier today, Landgaard and Shipman accepted $2,200,000 from the undercover agent, which they believed to be proceeds from the penny stock fraud. In conversations which were recorded by the FBI, the defendants explained in detail the measures they took to avoid detection of their money laundering scheme by law enforcement. Dodd insisted that the undercover agent download and use encryption software for online chats and voice communications. Landgaard insisted that the cash be provided in expensive Louis Vuitton duffel bags, and Shipman explained their reasoning: “You know why they do that? Because cops can’t get the authority to buy a Louis Vuitton bag, it’s too expensive … they can’t get the authorization to buy a Louis Vuitton bag. And if you think about it, it’s very smart.” Landgaard and Shipman also insisted that the undercover agent buy a “throwaway” or “burner” phone on which to speak to them about the scheme.
The defendants are scheduled to be arraigned on Thursday, July 9, 2015 before a United States Magistrate Judge at the federal courthouse in Brooklyn. The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the men face a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Jack Dennehy is in charge of the prosecution. Assistant United States Attorneys Brian Morris and Karin Orenstein of the Office’s Civil Division will be responsible for the forfeiture of assets.
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 is 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 Defendants:
Name: Michael Dodd, also known as "Michael Stanley"
Age: 65
Panama City, Panama
Name: Kenneth Landgaard
Age: 46
Alexandria, Minnesota
Name: James Robert Shipman, Jr.
Age: 64
Hollywood, Florida
Estonian National Pleads Guilty in Manhattan Federal Court to Charges Arising from Massive Cyber Fraud Scheme That Infected Millions of Computers WorldwideRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that VLADIMIR TSASTSIN pled guilty to wire fraud and computer intrusion charges arising from his operation of a massive and sophisticated Internet fraud scheme that infected with malware more than four million computers located in over 100 countries. The malware secretly altered the settings on infected computers, enabling TSASTSIN and the six other charged defendants – Timur Gerassimenko, Dmitri Jegorov, Valeri Aleksejev, Konstantin Poltev, Andrey Taame, and Anton Ivanov – to digitally hijack Internet searches, re-route computers to certain websites and advertisements, and receive payment for the hijacked Internet traffic. TSASTSIN pled guilty today to one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer intrusion before U.S. Magistrate Judge Michael H. Dolinger. Sentencing is scheduled for October 14, 2015, before U.S. District Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Preet Bharara said: “Vladimir Tsastsin has admitted to his role in a massive cyber hack and fraud scheme that infected millions of computers in over one hundred countries and netted Tsastsin and his co-conspirators over fourteen million dollars. Today’s guilty plea highlights not just the international scope of the threat posed by cyber criminals, but also the global reach of this Office and our law enforcement partners here and around the world to track down and prevent such criminals.”
According to the Indictment and other court documents previously filed in Manhattan federal court, and today’s plea proceeding:
From 2007 until October 2011, TSASTSIN, Gerassimenko, Jegorov, Aleksejev, Poltev, Taame, and Ivanov controlled and operated various companies that masqueraded as legitimate publisher networks (the “Publisher Networks”) in the Internet advertising industry. The Publisher Networks entered into agreements with ad brokers under which they were paid based on the number of times Internet users clicked on the links for certain websites or advertisements, or based on the number of times certain advertisements were displayed on certain websites. Thus, the more traffic that went to the advertisers’ websites and display ads, the more money the defendants earned under their agreements with the ad brokers. The defendants fraudulently increased the traffic to the websites and advertisements that would earn them money and made it appear to advertisers that the Internet traffic came from legitimate clicks and ad displays on the defendants’ Publisher Networks when, in actuality, it had not.
To carry out the scheme, the defendants and their co-conspirators used what are known as “rogue” Domain Name System (“DNS”) servers, and malware (“the Malware”) that was designed to alter the DNS server settings on infected computers. Victims’ computers became infected with the Malware when they visited certain websites or downloaded certain software to view videos online. The Malware altered the DNS server settings on victims’ computers to route the infected computers to rogue DNS servers controlled and operated by the defendants and their co-conspirators. The re-routing took two forms that are described in detail below: “click hijacking” and “advertising replacement fraud.” The Malware also prevented the infected computers from receiving anti-virus software updates or operating system updates that otherwise might have detected the Malware and stopped it. In addition, the infected computers were also left vulnerable to infections by other viruses.
Click Hijacking
When the user of an infected computer clicked on a search result link displayed through a search engine query, the Malware caused the computer to be re-routed to a different website. Instead of being brought to the website to which the user asked to go, the user was brought to a website designated by the defendants. Each “click” triggered payment to the defendants under their advertising agreements. This click hijacking occurred for clicks on unpaid links that appeared in response to a user’s query as well as clicks on “sponsored” links or advertisements that appeared in response to a user’s query – often at the top of, or to the right of, the search results – thus causing the search engines to lose money. For example, when the user of an infected computer clicked on the domain name link for the official website of Apple-iTunes, the user was instead taken to a website for a business unaffiliated with Apple Inc. that purported to sell Apple software.
Advertising Replacement Fraud
Using the DNS changer Malware and rogue DNS servers, the defendants also replaced legitimate advertisements on websites with substituted advertisements that triggered payments to the defendants. For example, when the user of an infected computer visited the home page of the Wall Street Journal, a featured advertisement for the American Express “Plum Card” had been fraudulently replaced with an ad for “Fashion Girl LA.”
The defendants earned millions of dollars under their advertising agreements, not by legitimately displaying advertisements through their Publisher Networks, but rather by using the Malware to fraudulently drive Internet traffic to the websites and ads that would earn them more money. As a result, the defendants and their co-conspirators earned at least $14 million in ill-gotten gains through click hijacking and advertisement replacement fraud. The defendants laundered the proceeds of the scheme through numerous companies including, among others, Rove Digital, an Estonian corporation, and others listed in the Indictment.
* * *
TSASTSIN, 35, of Estonia, faces a maximum sentence of 20 years in prison on the wire fraud conspiracy count and five years in prison on the computer intrusion conspiracy count. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Estonian nationals Gerassimenko, Jegorov, Poltev, and Aleksejev have each pled guilty to the same wire fraud and computer intrusion conspiracy counts.Aleksejev was sentenced to 48 months in prison.Ivanov pled guilty to all charges and was sentenced to time served.Judge Kaplan has scheduled the sentencings of Gerassimenko, Jegorov and Poltev for July 23, 2015. The last defendant, Taame, who is a Russian national, remains at large. The charges against Taame are merely accusations and he is presumed innocent unless and until proven guilty.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation, the National Aeronautics and Space Administration-Office of the Inspector General, and the Estonian National Police and Border Guard Board.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah Lai and Alexander Wilson are in charge of the prosecution.
Doctor Sentenced to 63 Months in Prison for Accepting $1.8 Million in Bribes for Test ReferralsRead the Press Release
A Morris County, New Jersey, doctor was sentenced today to 63 months in prison for accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, as part of a long-running scheme operated by the lab, its president and numerous associates, U.S. Attorney Paul J. Fishman for the District of New Jersey announced.
Frank Santangelo, 45, of Boonton, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. Judge Chesler imposed the sentence today in Newark federal court.
“Santangelo admitted he violated the trust of his patients, who should be able to count on their doctors’ prescribing only tests that are necessary and recommending providers based solely on their qualifications,” U.S. Attorney Fishman said. “This type of fraud compromises patient care and drives up the cost of health care.”
“Today’s sentencing of Frank Santangelo is the result of a long-term, multi-agency investigation into a complex health care fraud scheme which involved millions of dollars,” said Special Agent in Charge Richard M. Frankel of the Newark Division for the FBI. “Santangelo’s arrest and sentencing send the message the FBI and its law enforcement partners will continue to zealously investigate these fraud and abuse schemes, which divert critical resources from of our already overburdened health care system and contribute exponentially to the rising cost of health care.”
Including Santangelo, 38 people, 26 of them doctors, have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
According to documents filed in this and other cases and statements made in court: Santangelo, who has offices in Montville, New Jersey, and Wayne, New Jersey, received more than $1.8 million in bribe payments from BLS for referrals for which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements and sham service agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party – often tens of thousands of dollars a month – totaling more than $1 million between 2010 and his arrest in April 2013.
Santangelo acknowledged the authenticity of text messages between himself and BLS president and part owner David Nicoll, 41, of Mountain Lakes, New Jersey in which Santangelo referred to ordering unnecessary tests to increase referrals to BLS in exchange for bribes. In one text message conversation, Santangelo said he and another doctor had “put our heads together and added a significant amount of testing….The testing is 90 percent legit.” Santangelo detailed his plan to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
In another text message conversation, Nicoll wrote to Santangelo about the status of their referral agreement, stating that BLS “really can’t afford the 40-50,000 [dollars] a month if the girls aren’t going to be drawing any blood,” to which Santangelo responded by stating, “U no u can count on me!” and “I never let u down!”
He also pleaded guilty to money laundering, admitting that he used another individual in an attempt to hide the bribes from BLS, and to failing to file tax returns from 2009-2011 and pay taxes owed during that time period.
On April 9, 2013, federal agents arrested David Nicoll; Scott Nicoll, 34, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 36, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Santangelo. David and Scott Nicoll and Nordman are awaiting sentencing.
“Physicians who accept kickbacks in exchange for patient referrals and ordering medically unnecessary blood tests undermine the public’s faith in the medical profession and the financial stability of Medicare,” said Special Agent in Charge Scott J. Lampert for the Department of Health and Human Services Office of Inspector General (OIG). “OIG will continue to protect both taxpayers and patients by holding physicians accountable for such wrongdoing.”
In addition to the prison term, Judge Chesler sentenced Santangelo to three years of supervised release and fined him $6,250. Santangelo must also forfeit more than $1.8 million as part of his plea agreement. The investigation has so far recovered more than $11.5 million through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel; Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish and Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Doctor Sentenced to 63 Months in Prison for Accepting $1.8 Million in Bribes for Test ReferralsRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, doctor was sentenced today to 63 months in prison for accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Frank Santangelo, 45, of Boonton, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. Judge Chesler imposed the sentence today in Newark federal court.
“Santangelo admitted he violated the trust of his patients, who should be able to count on their doctors’ prescribing only tests that are necessary and recommending providers based solely on their qualifications,” U.S. Attorney Fishman said. “This type of fraud compromises patient care and drives up the cost of health care.”
“Today’s sentencing of Frank Santangelo is the result of a long-term, multi-agency investigation into a complex health care fraud scheme which involved millions of dollars,” Richard M. Frankel, FBI Special Agent in Charge, Newark Division, said. “Santangelo’s arrest and sentencing send the message the FBI and its law enforcement partners will continue to zealously investigate these fraud and abuse schemes, which divert critical resources from of our already overburdened health care system and contribute exponentially to the rising cost of health care.”
Including Santangelo, 38 people – 26 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
According to documents filed in this and other cases and statements made in court:
Santangelo, who has offices in Montville, New Jersey, and Wayne, New Jersey, received more than $1.8 million in bribe payments from BLS for referrals for which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements and sham service agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party – often tens of thousands of dollars a month – totaling more than $1 million between 2010 and his arrest in April 2013.
Santangelo acknowledged the authenticity of text messages between himself and BLS president and part owner David Nicoll in which Santangelo referred to ordering unnecessary tests to increase referrals to BLS in exchange for bribes. In one text message conversation, Santangelo said he and another doctor had “put our heads together and added a significant amount of testing…. The testing is 90 percent legit.” Santangelo detailed his plan to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
In another text message conversation, David Nicoll wrote to Santangelo about the status of their referral agreement, stating that BLS “really can’t afford the 40-50,000 [dollars] a month if the girls aren’t going to be drawing any blood,” to which Santangelo responded by stating, “U no u can count on me!” and “I never let u down!”
He also pleaded guilty to money laundering, admitting that he used another individual in an attempt to hide the bribes from BLS, and to failing to file tax returns from 2009-2011 and pay taxes owed during that time period.
On April 9, 2013, federal agents arrested David Nicoll, 41, of Mountain Lakes, New Jersey; Scott Nicoll, 34, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 36, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Santangelo. David and Scott Nicoll and Nordman are awaiting sentencing.
“Physicians who accept kickbacks in exchange for patient referrals and ordering medically unnecessary blood tests undermine the public’s faith in the medical profession and the financial stability of Medicare,” said Special Agent in Charge Scott J. Lampert, U.S. Department of Health and Human Services Office of Inspector General. “OIG will continue to protect both taxpayers and patients by holding physicians accountable for such wrongdoing.”
In addition to the prison term, Judge Chesler sentenced Santangelo to three years of supervised release and fined him $6,250. Santangelo must also forfeit more than $1.8 million as part of his plea agreement. The investigation has so far recovered more than $11.5 million through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Thomas Ambrosio Esq., Lyndhurst, New Jersey
District Man Sentenced to Eight Years in Prison for Bias-Related Attack of Man in Northeast WashingtonRead the Press Release
WASHINGTON – David Morris, 33, of Washington, D.C., was sentenced today to an eight-year prison term for the felony offense of assault with intent to kill, with a bias enhancement, for repeatedly attacking a male co-worker who he believed was making a sexual overture toward him, Acting U.S. Attorney Vincent H. Cohen, Jr. announced.
Morris pled guilty to the charge on May 14, 2015, in the Superior Court of the District of Columbia. He was sentenced by the Honorable Patricia A. Broderick. Upon completion of his prison term, Morris will be placed on three years of supervised release.
“This criminal’s prejudices drove him to punch, stomp, and use a metal pole to beat his co-worker,” said Acting U.S. Attorney Cohen. “He will spend the next eight years in prison as punishment for this brutal assault. The U.S. Attorney’s Office will continue to prioritize the prosecution of criminals who express their hate through violence.”
According to the government’s evidence, Morris and the victim, 52, were friends and work colleagues at the time of the attack. On the evening of March 14, 2015, the two men were at Morris’s apartment in the 200 block of 61st Street NE, drinking alcohol. Morris interpreted an action from the victim as a homosexual overture. He became enraged and physically threw the victim out of his apartment and down the hallway stairs, toward the first floor of the building. He then dragged the victim from the foyer onto the pathway in front of the building, leaving him there while he went back inside. Two minutes later, however, Morris returned outside, jumped off of a ledge, and, while wearing boots, stomped on the victim’s head. While the victim remained on the ground, Morris repeatedly punched him in the head and upper body.
Morris verbally expressed his rage at the victim, repeatedly exclaiming that the victim “tried to rape me” and similar phrases. He then began once again punching him in the head and upper body. He returned inside, only to come back out about six minutes later – this time with a metal pole. He poked the victim with the pole and then struck him with it multiple times in the head and upper body. Yet again, Morris returned inside, only to come back out a short time later. Still wearing boots, Morris kicked the victim in the head. Then he approached the victim’s car and scratched and marked it before finally leaving the scene.
The victim, who was left on the pathway, bleeding profusely from the head, was hospitalized for almost two weeks. He received about 10 stitches to close a gash on the top of his head. He also lost feeling in the right side of his face and will require facial surgery to attempt to repair that damage. His eyesight also has deteriorated significantly. He still uses a cane.
In announcing the sentence, Acting U.S. Attorney Cohen commended the work of the officers, detectives, and others who worked on the case from the Metropolitan Police Department. He also expressed appreciation for the work of the Forensic Services Division of the U.S. Secret Service. Finally, he acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Richard Cheatham, Victim/Witness Advocate Jennifer Clark, and Assistant U.S. Attorney Jeffrey S. Nestler, who investigated and prosecuted the case.
Danville Man Pleads Guilty to Possession of Child PornographyRead the Press Release
OAKLAND – Mitchell Phillip Wolf pleaded guilty in federal court in Oakland today to possession of child pornography, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson
As part of his plea agreement, Wolf, 59, of Danville, Calif., admitted to knowingly possessing approximately 50,000 digital files depicting minors engaged in sexually explicit conduct. Wolf admitted to intentionally saving the image and video files to his personal desktop computer and to assorted CD-ROMs and DVDs that he stored in his home office, bedroom, and briefcase. On many of the CD-ROMs and DVDs, Wolf hand-labeled their content with terms consistent with child pornography, such as “PTHC” for “pre-teen hardcore.” Wolf also admitted to downloading the digital files from the internet using an online peer-to-peer file sharing program. Wolf was charged by information on April 3, 2015, with a single count of possession of child pornography in violation of 18 U.S.C. § 2252 (a)(4)(B). Pursuant to the plea agreement, Wolf pleaded guilty to the count as charged.
Wolf is currently released on a $250,000 bond. His sentencing hearing is scheduled for October 21, 2015, before the Honorable Phyllis J. Hamilton, U.S. District Judge, in Oakland. The maximum statutory penalty for a violation of 18 U.S.C. § 2252 (a)(4)(B) is 10 years in prison, a fine of $250,000, a lifetime term of supervised release, and payment of restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Wade M. Rhyne is prosecuting the case with the assistance of Janice Pagsanjan and Noble Hughes. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Silicon Valley Internet Crimes Against Children’s Task Force, and the Contra Costa County District Attorney’s Office.
Community leaders announce progress in fight to combat drug abuseRead the Press Release
HEELING, WEST VIRGINIA – A diverse group of community leaders from across the Ohio Valley joined United States Attorney William J. Ihlenfeld, II, today to highlight the progress of the United States Attorney’s Addiction Action Plan.
According to Ihlenfeld, the Action Plan is a comprehensive, multidisciplinary approach to combat drug abuse and overdoses. The Action Plan was formed in the fall of 2014 and community leaders in the Ohio Valley announced their recommendations last December. The Action Plan incorporates eight subcommittees, led by experts from various fields including education and news media, treatment and recovery, and law enforcement and community corrections.
“It has become increasingly clear that a traditional approach to combatting drug abuse, focused on arrests and prosecutions, is not enough,” noted U.S. Attorney Ihlenfeld. “Drug dealers have found increasingly entrepreneurial ways to capitalize on the unforgiving grip of addiction. The CDC announced this week that heroin use in the United States has increased by 62% over the last decade. We must respond with new and innovative ideas to reverse this trend. I am thrilled that a diverse group of thought leaders from the Ohio Valley has come together to find creative ways to combat drug abuse and save lives. They have made significant progress in recent months and I look forward to seeing what comes next.”
The Action Plan subcommittees announced several tangible results achieved to date, including:
News Media and Education. Student leaders from across the Ohio Valley have envisioned and designed an innovative series of viral marketing awareness videos with support from the Education and News Media Subcommittees. These videos will be distributed on social media and displayed at various school and community events. The Wheeling Nailers hockey team will partner with the Action Plan to play these videos at games during the upcoming season. The first video in the #ThisIsHeroin series premiered in early July 2015 and has already gained significant traction on YouTube and social media.
Medical. With support from the Medical Subcommittee, the U.S. Attorney’s Office recently hosted the 2015 West Virginia Prescriber Education Conference to better education physicians and pharmacists on best practices for prescribing and dispensing narcotic medications. Michael Botticelli, the Director of the White House Office of National Drug Control Policy, delivered the keynote address at the conference. The event was well-attended by substance abuse professionals, physicians, and pharmacists.
Treatment. The Treatment Subcommittee recently launched the drugfreeov.com website which provides a simple roadmap to treatment by providing a comprehensive directory of substance abuse treatment resources in the Ohio Valley. The website has had nearly 1,000 visitors since it launched in March 2015. The Treatment Subcommittee is also partnering with the Wheeling Police Department to develop a crisis intervention training program for the officers. Further, the Treatment Subcommittee has developed a Justice Reinvestment Program that services Marshall and Ohio Counties. The program has already provided substance abuse treatment for 20 individuals diverted from drug and mental health courts, parole, and/or probation.
Community Corrections. In the continued effort to find creative alternatives to traditional criminal prosecutions, the Community Corrections Subcommittee was instrumental in developing and launching the first Federal Drug Court in West Virginia.
Enforcement. Law enforcement officials are also improving how they investigate and prosecute drug trafficking. The U.S. Attorney’s Office provided training to local law enforcement, encouraging the development of standardized best practice for investigating a drug overdose. This has led to an increased emphasis on the investigation and prosecution of interstate drug distribution operations in which drugs are transported across state lines into West Virginia for purely economic gain. The U.S. Attorney’s Office is also developing a national curriculum to improve the investigation and prosecution of fatal drug overdoses.
Anyone interested in additional information on the effort to combat drug abuse is encouraged to contact the United States Attorney’s Office for the Northern District of West Virginia at (304) 234-0100. Continuing updates will also be available through the U.S. Attorney’s official Twitter page @NDWVnews.
Columbus Man Sentenced to more than 10 years in Prison for Conspiring to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that Christopher Shea, 34, of Columbus, Nebraska, was sentenced on July 7, 2015, to 121 months in prison by Senior United States District Judge Joseph F. Bataillon. Shea had previously pled guilty to Conspiracy to Distribute more than 50 grams of Methamphetamine. Shea was arrested and indicted on the charge after he was found in possession of approximately a quarter pound of methamphetamine on October 9, 2014. During a post arrest interview, Shea admitted that he had been selling quarter pounds of methamphetamine on a weekly basis in the Columbus area during the summer of 2014. After serving his sentence Shea will be required to serve a term of supervised release of 5years.
This case was the result of an investigation by the Nebraska State Patrol.
Cleveland woman faces charges related to Section 8 rentalRead the Press Release
A Cleveland woman faces criminal charges related to collecting Section 8 payments for renting a property to a relative, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Jasmine Ganaway, 36, was charged via criminal information with one count of theft of public money and one count of concealment of assets in bankruptcy.
Ganaway formerd LRG Development in 2006. She purchased residence on East 146th Street in Cleveland then transferred ownership to LRG. That residence in 2008 was certified for the Housing Choice Voucher Program, or Section 8, In November 2008, two of Ganaway’s relatives executed a lease agreement for part of the property on East 146th Street, despite a prohibition against leasing to relatives, according to the information.
Between 2009 and 2015, the Cuyahoga Metropolitan Housing Authority made deposits under the Section 8 program into Ganaway’s checking account totaling approximately $35,611, according to the information.
In October 2013, Gananway also fraudulently concealed her ownership interest in LRG and rental income as part of her bankruptcy proceedings, according to the information.
This case is being prosecuted by Assistant U.S. Attorney Robert J. Patton following an investigation by the U.S. Department of Housing and Urban Development-Office of Inspector General and the CMHA police.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
A charge is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Chief Mate Sentenced to Three Months in Prison for Environmental CrimesRead the Press Release
Valerii Georgiev, 42, a Russian citizen, and the former chief mate of the ocean cargo vessel M/V Murcia Carrier, was sentenced to a term of three months prison for failing to maintain an accurate oil record book in violation of the Act to Prevent Pollution from Ships (APPS), by the Honorable Joseph Rodriguez, the Department of Justice Environment and Natural Resources Division and the U.S Attorney’s Office for the District of New Jersey announced today.
APPS requires vessels like the M/V Murcia Carrier to maintain a record known as an oil record book in which all transfers and disposals of oil-contaminated waste, including the discharge overboard of such waste, must be fully and accurately recorded.
On April 27, 2014, at the direction of Georgiev, crew members on board the M/V Murcia Carrier dumped overboard several barrels containing some hydraulic oil. While Georgiev disputes the number of barrels dumped into the sea, the government believes that approximately 20 barrels of hydraulic oil were dumped overboard. The dumping occurred in international waters off the coast of Florida while the vessel was in transit from Costa Rica to New Jersey. The dumping was not recorded in the ship’s oil record book. During the course of the Coast Guard boarding, Georgiev denied that dumping occurred and instructed crew members on board the vessel to deny that dumping had occurred.
On June 17, 2015, Norbulk Shipping UK Ltd, a company in Glasgow, United Kingdom and operator of the M/V Murcia Carrier pleaded guilty failing to maintain an accurate oil record logbook and providing false statements with respect to the vessel’s garbage record book. The company was sentenced to pay a fine of $750,000 and placed on probation for three years.
The case was investigated by U.S. Coast Guard Sector Delaware Bay and the U.S. Coast Guard Investigative Service. The case was prosecuted by Joel La Bissonniere of the Environmental Crimes Section of the Department of Justice and Assistant U.S. Attorneys Kathleen O’Leary and Matthew Smith of the U.S. Attorney’s Office of the District of New Jersey.
Chicago Man Federally Indicted for Armed Robberies in HarrisburgRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Silas Lee Sneed, age 25, of Chicago, Illinois, was indicted by a federal grand jury in Harrisburg. The indictment charges Sneed with three counts of robbery and one count of use of a firearm during a crime of violence.
According to United States Attorney Peter Smith, the charges against Sneed are a result of allegations that Sneed robbed a retail establishment in Harrisburg and attempted to rob two others during the evening of May 7, 2015. At each store, Sneed allegedly threatened the employees with a firearm. Sneed was taken into custody by Harrisburg Police early the following morning.
The investigation was conducted by the Federal Bureau of Investigation and the Harrisburg Bureau of Police. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is lifetime imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Charleston man gets 3+ years in federal prison for timeshare fraudRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that David Brandon Ball, 35, of Charleston, was sentenced to 37 months in federal prison for defrauding timeshare owners throughout the United States and Canada.
Ball and an associate, David Andrew Glynn, formed Mountain State Resales, LLC (MSR), a bogus company used to defraud timeshare owners of money. Ball and his associates told timeshare owners that MSR had a buyer for their timeshares and persuaded them to advance money to MSR in South Charleston to cover fees and expenses necessary for the sales.
In truth, however, MSR had no buyers for the timeshares. Ball knew that the timeshare owners would not receive anything in return for money sent to MSR.
In an unusual twist on their principal scam, Ball and his associates, including Glynn, also posed as “agents” eager to help timeshare owners who had lost money in other timeshare fraud schemes. In this spin-off scheme, they said they were affiliated with a non-existent organization named “Internal Revenue Recovery Associates” and were investigating timeshare fraud. Ball admitted that he and his coconspirators told the timeshare owners to send money to MSR to assist “agents” in recovering the lost funds.
“This guy was stealing money out of both pockets of timeshare owners,” said U.S. Attorney Goodwin. “He got rich by setting up fake timeshare sales, while at the same time posing as someone who could help fraud victims get their money back. It would be hard to believe if it weren’t true.”
“Protecting innocent citizens against fraud schemes like this is an important part of what my office does,” Goodwin continued. “I’m happy to say this crook is heading to federal prison.”
Neither MSR nor Internal Recovery Associates were legitimate businesses. Both were used to defraud timeshare owners. Ball admitted that MSR received at least $80,346 from the conspiracy.
Ball further admitted that in 2013, he operated a Florida-based company called International Transfers and Documents (International Transfers), which, like MSR, was created and used to defraud timeshare owners. This Florida scheme tricked victims out of more than $145,000.
Ball was ordered to pay restitution to the victims of both MSR and International Transfers in the amount of $210,920.25. Glynn previously pleaded guilty and received 30 months in federal prison for his role in the offense.
Ball’s sentence was handed down by United States District Judge John T. Copenhaver, Jr., in Charleston.
Today’s sentencing stems from an investigation being conducted by the West Virginia State Police, the Federal Bureau of Investigation, and the United States Postal Inspection Service. Assistant United States Attorney Meredith George Thomas is handling the prosecution.
Cargo Ship Officer Sentenced to Three Months in Prison for Failing to Report Oil He Ordered Dumped into OceanRead the Press Release
CAMDEN, N.J. –The former chief mate of the ocean cargo vessel M/V Murcia Carrier was sentenced today to three months in prison for failing to report the hydraulic oil he ordered dumped into the ocean, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General John C. Cruden for the U.S. Department of Justice Environment and Natural Resources Division announced.
Valerii Georgiev, 42, a Russian citizen, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of failing to maintain an accurate oil record book in violation of the Act to Prevent Pollution from Ships (APPS). Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
APPS requires vessels like the M/V Murcia Carrier to maintain a record known as an oil record book in which all transfers and disposals of oil-contaminated waste, including the discharge overboard of such waste, must be fully and accurately recorded.
On April 27, 2014, at the direction of Georgiev, M/V Murcia Carrier crew members dumped several barrels containing hydraulic oil overboard. While Georgiev disputes the number of barrels dumped into the sea, the government believes that approximately 20 barrels of hydraulic oil were dumped overboard. The dumping occurred in international waters off the coast of Florida while the vessel was in transit from Costa Rica to New Jersey. The dumping was not recorded in the ship’s oil record book. When the Coast Guard boarded the vessel, Georgiev denied that the dumping occurred and instructed crew members to do the same.
On June 17, 2015, Norbulk Shipping UK Ltd, a company in Glasgow, United Kingdom, and operator of the M/V Murcia Carrier pleaded guilty to failing to maintain an accurate oil record book and providing false statements with respect to the vessel’s garbage record book. The company was sentenced to pay a fine of $750,000 and placed on probation for three years.
The case was investigated by U.S. Coast Guard Sector Delaware Bay and the U.S. Coast Guard Investigative Service. The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Matthew Smith of the U.S. Attorney’s Office, District of New Jersey, and Joel La Bissonniere of the Environmental Crimes Section of the Department of Justice.
Defense counsel: Michael Keith Twersky Esq., Atlantic City, New Jersey.
Canadian Corporation Pleads Guilty to Importation of Contaminated Cattle FeedRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Yves Bolduc, President of the Quebec cattle feed brokerage and manufacturing company, Meunerie Sawyerville, Inc., appeared today in United States District Court in Rutland to enter a plea of guilty on behalf of the Canadian corporation. The defendant corporation pled guilty to one felony count of making a false statement to Customs and Border Protection officials, and one felony count of fraudulently causing the cattle feed drug monensin to be introduced into interstate commerce at a level of concentration significantly higher than that allowed by the Food and Drug Administration.
According to court documents, on or about Sept. 12, 2012, Meunerie Sawyerville sent a driver into the United States with a truckload of cattle feed medicated with the regulated drug monensin at a concentration above that allowed by the FDA and 200% above the amount on the feed label. The feed was sampled at the border, and the driver was ordered to warehouse the feed pending further testing from the FDA. Contrary to orders from U.S. officials, Bolduc instructed the driver to deliver the feed to the Vermont farmer as planned, without informing the farmer that the feed had been sampled and ordered held by the FDA. The driver did deliver the medicated feed to the customer, and the Vermont cows consumed the contaminated feed.
Bolduc thereafter engineered a plan that a sham shipment of similar-looking cattle feed cross the border under false Customs documentation to be stored on an unrelated piece of land in Vermont until requested for redelivery by Customs and Border Protection. Upon Customs’ request, Bolduc ordered that the sham shipment be presented for redelivery, accompanied by the fictitious documentation, offering up the sham shipment feed to the U.S. government as the held tainted feed that was in fact already consumed by Vermont cows.
According to court documents, the parties have agreed that the appropriate sentence is a fine of $80,000, and a term of probation of one year. The actual sentence will be determined with reference to federal sentencing guidelines.
Meunerie Sawyerville is represented by Attorney Bud Allen. The prosecutor is Assistant U.S. Attorney Abigail Averbach.
Camp Hill Man Sentenced to Federal Prison for Participation in Illegal Sports Gambling OperationRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Steven Sheely, Sr., age 60 of Camp Hill, Pennsylvania was sentenced today by Senior U.S. District Court Judge William C. Caldwell to 14 months in federal prison.
Sheely Sr. pled guilty on February 17, 2015, to conspiracy to run an illegal sports gambling operation. His son, Steven Sheely, Jr., pled guilty on December 4, 2014 and was sentenced in March 2015 to five months in federal prison.
According to United States Attorney Peter Smith, Sheely, Sr. and the others took in millions of dollars in illegal bets on sporting events. The bookmaking activity took place mainly in central Pennsylvania where the participants lived. The conspiracy was uncovered primarily through the use of a court-authorized wiretap and the arrest of the participants in May 2014.
The prosecution stemmed from an investigation conducted by the Federal Bureau of Investigation, the Pennsylvania Department of Agriculture’s Racing Commission, and the Pennsylvania State Police. Assistant United States Attorney William A. Behe was assigned to handle the investigation and prosecution of the case.
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Bergen County, New Jersey, Man Convicted of Failing to Register as A Sex OffenderRead the Press Release
NEWARK, N.J. – A Teaneck, New Jersey, man was convicted today of failing to register as a sex offender when he moved to New Jersey in the fall of 2013, U.S. Attorney Paul J. Fishman announced.
Richard Joseph, a/k/a “Richard Beltre,” a/k/a “Joseph Richards,” a/k/a “Aaron Joseph,” 42, of Teaneck, New Jersey, who is classified as a Tier III sex offender in New York, was convicted after a bench trial before U.S. District Judge Susan D. Wigenton in Newark federal court of one count of failing to register or update a registration as required by the Sex Offender Registration and Notification Act (“SORNA”).
SORNA requires that all sex offenders who, among other things, travel in interstate or foreign commerce, must register as a sex offender and keep that registration current in each jurisdiction where the sex offender resides.
According to documents filed in this case and the factual stipulations presented at trial:
Joseph was required to register as a sex offender due to his 2002 conviction in New York for rape in the third degree. He first registered as a sex offender in New York using the alias “Richard J. Beltre” in 2006 and knew that he was required to register as a sex offender every time he changed his address. However, when Joseph was released from the custody of the N.Y. State Department Correctional Services in 2013, he failed to report as directed by the N.Y. State Division of Parole and a warrant was issued for his arrest. He was eventually arrested on Oct. 11, 2013, having lived in Bergen County since Sept. 7, 2013. During that time, Joseph failed to register as a sex offender in New Jersey.
Joseph faces a maximum potential sentence of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 29, 2015.
U.S. Attorney Fishman credited the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos, Jr., and the U.S. Marshals Service New York/New Jersey Regional Fugitive Task Force with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Sara F. Merin and Jane H. Yoon of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Timothy Donohue Esq., West Orange, New Jersey
Beckley-area man pleads guilty to federal drug chargeRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Lorenzo Anderson, 32, of Beckley, pleaded guilty to a federal drug charge. Anderson admitted that on February 16, 2015, when a search warrant was executed at his Beckley home, he was in possession of cocaine base with the intent to distribute it.
Anderson faces up to 20 years in prison and a $1,000,000 fine. United States District Judge Irene C. Berger scheduled Anderson’s sentencing for October 21, 2015.
The Beckley/Raleigh County Drug and Violent Crime Unit conducted the investigation.
Atlanta Man Pleads Guilty to Methamphetine Conspiracy ChargeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAMES WOOLF, age 41, a resident of Atlanta, Georgia, pled guilty before United States District Judge Martin L. C. Feldman to one count of conspiracy to distribute and possess with intent to distribute fifty grams or more of methamphetamine.
According to the indictment, beginning on a date unknown and continuing until on or about September 8, 2013, WOOLF knowingly combined, conspired, confederated and agreed with persons known and unknown to the Grand Jury, to distribute and possess with the intent to distribute a fifty (50) grams or more of methamphetamine.
WOOLF faces a minimum term of imprisonment of twenty years, a maximum term of life imprisonment, a fine of $10,000,000.00, at least five years of supervised release after imprisonment, and a $100.00 special assessment. District Judge Feldman set sentencing for October 21, 2015.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney Andre’ Jones is the prosecuting attorney.
Appleton Man Indicted on Methamphetamine and Firearm ChargesRead the Press Release
Mr. James L. Santelle, United States Attorney for the Eastern District of Wisconsin, announced that on July 7, 2015, a federal grand jury returned a two-count indictment against Khee Vang (age: 36) of Appleton, Wisconsin, charging him with a count of possession with intent to distribute methamphetamine in violation of Title 21, United States Code, Sections 841(a)(1), (b)(1)(B) and, further, charging him with possession of a firearm in furtherance of a drug crime in violation of Title 18, United States Code, Section 924(c)(1)(A)(i). If convicted of the drug offense, the defendant faces a sentence of between five and forty years imprisonment, a five million dollar fine, and between four years and a lifetime of supervised release. Conviction on the firearm offense carries a mandatory consecutive term of five years imprisonment and up to a life sentence.
According to court filings, the defendant was under surveillance when he travelled from Appleton to La Crosse to purchase methamphetamine. The defendant was stopped by law enforcement in the City of Menasha and was found to be in possession of 117 grams of methamphetamine and a semi-automatic weapon.
The case was investigated by the Wisconsin Department of Justice, Division of Criminal Investigation, the Lake Winnebago Area Metropolitan Enforcement Group, and the United States Drug Enforcement Administration, with the assistance of the Wisconsin State Patrol. It is being prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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