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25 August 2015
Narcotic Treatment Program Faces Civil PenaltiesRead the Press Release
GAINESVILLE, Ga. - Lanier Treatment Center, Inc., a narcotic treatment program, located in Gainesville, Ga., has agreed to pay a civil settlement of $20,000 to resolve allegations that it violated the recordkeeping requirements of the Controlled Substances Act. Lanier Treatment Center, Inc., also has agreed to additional oversight from the Drug Enforcement Administration (DEA).
“The Controlled Substances Act requires treatment centers like Lanier Treatment Center to keep an accurate inventory of its controlled substances to prevent them from falling into the hands of dealers and addicts,” said Acting U.S. Attorney John Horn. “The diversion of prescription narcotics and painkillers feeds the market for abuse and addiction, and Georgia is experiencing an epidemic of prescription drug abuse. We are committed to preventing the diversion of controlled substances by enforcing the recordkeeping requirements.”
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division commented on the case, “DEA Diversion Investigators will continue to conduct accountability audits to make sure that Narcotics Treatment Programs are abiding by specific rules and regulations. This civil fine shows that DEA and the entire law enforcement community are committed to making sure that such companies are abiding by its mandates.”
The government alleges that Lanier Treatment Center, Inc., failed to maintain a current, complete, and accurate record of all controlled substances received, sold, delivered, or otherwise disposed of. Accountability audits conducted by the DEA revealed overages and shortages of methadone in 2010 and 2013. The government also alleges that Lanier Treatment Center, Inc., failed to conduct a biennial inventory in compliance with all applicable laws and regulations and failed to comply with all applicable laws and regulations regarding written orders for controlled substances. The claims settled are allegations only, and there has been no determination of liability.
The Controlled Substances Act was enacted to ensure that controlled substances are properly regulated and to help prevent drug diversion. Thus, narcotic treatment programs that receive and dispense controlled substances are required to maintain complete and accurate inventories and records of all controlled substances that they purchase, receive, dispense, or destroy. In order to enforce the recordkeeping requirements of the Controlled Substances Act, the Act imposes civil penalties for refusing or negligently failing to maintain the records required by the Act.
This case was investigated by Diversion Investigators from the Drug Enforcement Agency.
The civil settlement was reached by Assistant United States Attorney Lena Amanti.
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 U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Murphysboro Resident Sentenced for Crack cocaine and Firearm OffensesRead the Press Release
On August 20, 2015, Martell L. Brown-Wright, a/k/a "Low Key," 29, of Murphysboro, was sentenced in federal court in Benton, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Brown-Wright, who had previously pled guilty to a four-count indictment charging distribution of crack cocaine within 1,000 feet of a public housing facility (2 counts); possession of crack cocaine with intent to distribute within 1,000 feet of a public housing facility; and possession of a firearm in furtherance of a drug trafficking, was sentenced to a total term of 123 months in federal prison, to be followed by 6 years of supervised release, and fined $500.00. The offenses occurred on September 4-5, 2014, at the New Horizons Housing Complex, in Murphysboro, Jackson County. Evidence at the plea and sentencing hearings established that Brown-Wright sold crack cocaine to a confidential source working for law enforcement. When agents executed a search warrant at the New Horizons apartment where the drug sales had occurred, they located firearms, crack cocaine, a large amount of U.S. Currency, ammunition, and drug packaging materials. Young children were residing at the apartment containing the drugs and firearms. At sentencing, the district court also ordered the forfeiture of a Taurus, model PT-22, .22 caliber semiautomatic pistol, a Jennings, model J22, .22 caliber semiautomatic pistol, along with assorted ammunition.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office and the Murphysboro Police Department. The Jackson County State’s Attorney’s Office assisted in the investigation.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
More Than 1,000 Stakeholders from Throughout Minnesota Convene to Define the Problem with Prescription Painkillers and Develop SolutionsRead the Press Release
Today in Minneapolis, more than 1,000 law enforcement, public health officials, health care professionals, attorneys, drug court representatives, medical students, state, tribal and local government staff, community leaders, recovering addicts and their families from across Minnesota are meeting to address the pain pill problem. The Pain.Pill.Problem. conference brings together experts from the medical, public health and law enforcement fields to look at all sides of opioid abuse and ultimately develop solutions to the problem.
The conference consists of six panels on the following topics:
- The Impact of Opioid Addiction
- Prescribing & Pain Culture
- Pharmacy & Distribution
- Law Enforcement
- Opioid Treatment
- Recovery, Prevention & the Role of Community
Conferees will also hear from speakers on these important issues, including Minnesota Governor Mark Dayton, United States Senator Amy Klobuchar, United States Congressman Tom Emmer, The Honorable Mary Bono, University of Minnesota President Eric Kaler, Dick Beardsley, and others.
“Each case of opioid diversion and addiction represents lives ruined, careers tossed aside and tragic collateral consequences,” said U.S. Attorney Andrew M. Luger. “Doctors, pharmacists, political leaders, legislators, regulators, and civic leaders must address this problem without finger pointing or blame. We need to work together to come up with solutions and that is what the Pain.Pill.Problem. conference is all about. We owe it to our kids, we owe it to our neighbors and we owe it to each other.”
“Narcotic painkillers are being over-prescribed in Minnesota, leading to addiction, abuse and serious consequences. In the last decade, overdose deaths have more than doubled. Painkillers now cause more deaths than heroin and cocaine combined. We need to have a conversation as a society about how we can treat pain in ways that restores function and this conference is a step in the right direction,” said Minnesota Department of Human Services Commissioner Lucinda Jesson.
“Prescription drug abuse has reached crisis levels, and we should leave no stone unturned in our efforts to reverse this deadly trend,” said United States Senator Amy Klobuchar. “I was proud to participate in today’s critical summit on developing new tools and sharing best practices to help fight this devastating epidemic. I will continue to work with all those who share my commitment to combatting prescription drug abuse on behalf of Minnesota families.”
“The sobering truth is more Minnesotan’s are dying from prescription drugs than virtually all other drugs combined,” said Drug Enforcement Administration Assistant Special Agent in Charge Dan Moren. “The source of these pills is not a foreign based drug cartel. The responsibility of reversing this deadly trend rests with our domestic law enforcement, medical/health care, pharmaceutical, and addiction treatment communities changing the way they do business – it starts by learning the facts at the Pain.Pill.Problem. Summit. The public is reminded to properly dispose of all unused and/or expired prescription drugs at the nearest collection site – this service is free and anonymous. For more information, visit www.DEA.gov.”
“Minnesota is facing the same crisis that the rest of the country is,” said the Honorable Mary Bono. “Opioid misuse, and now heroin use, have overtaken our communities like a plague. I applaud the organizers and supporters of the Pain.Pill.Problem. event and thank them for stepping up to address the crisis. Countless lives hang in the balance.”
“Too many people are dying every day across Minnesota from opioid overdose. Those deaths are preventable. I urge every family and community leader to learn what they can do to educate our youth and to take proactive steps to prevent addiction and overdose,” said Hennepin County Sheriff Rich Stanek. “As Sheriff of Hennepin County, I am proud of the partnerships among local, state, federal, and tribal law enforcement agencies to dismantle criminal drug operations and promote prevention.”
“For Minnesota to make progress on the issue of opioids it will require collaboration and engagement by all the stakeholders,” said Dr. W. Michael Hooten, a pain specialist and anesthesiologist at Mayo Clinic. “This conference offered a convening opportunity and I’m optimistic that we can take our learnings and move forward together.”
“This gathering today proves we’re all in this together,” said Nick Motu, Vice President of the Hazelden Betty Ford Institute for Recovery Advocacy. “We’ve made addressing the opioid crisis a bedrock of the advocacy efforts at our organization, and by coming together with others around solutions like we did today, we can make real progress against this epidemic.”
“There are no simple solutions for opiate addiction. To make a meaningful difference, we will need to engage a broad-based coalition,” said Brooks Jackson, MD, dean of the Medical School and vice president of Health Sciences at the University of Minnesota. “This conference is a great first step. We look forward to continuing this work going forward, addressing broader issues like health policy as well as day-to-day issues around care delivery and treatment of addiction.”
For more information, please visit: www.painpillproblem.com
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Mescalero Apache Man Pleads Guilty to Federal Assault ChargeRead the Press Release
ALBUQUERQUE – Christopher Bigmouth, 25, an enrolled member of the Mescalero Apache Nation who resides in Mescalero, N.M., pleaded guilty this afternoon in Las Cruces, N.M., to an assault resulting in serious bodily injury charge. Under the terms of his plea agreement, Bigmouth will be sentenced to 84 months in prison followed by a term of supervised release to be determined by the court.
Bigmouth was arrested on Feb. 20, 2015, on a criminal complaint charging him with assaulting a 14-month-old child on Aug. 22, 2014, by dropping the victim on her head three times. It alleged that the assault occurred on the Mescalero Apache Indian Reservation in Otero County, N.M., The victim was seriously injured and required emergency brain surgery to reduce swelling of the brain.
During today’s proceedings, Bigmouth pled guilty to a felony information charging him with assault resulting in serious bodily injury. In entering the plea, Bigmouth admitted that on Aug. 22, 2014, he intentionally dropped the victim on the floor three times, and that his actions resulted in several injuries to the victim including significant brain swelling requiring emergency surgery and long term cognitive, motor and visual impairment. A sentencing hearing has yet to be scheduled.
This case was investigated by Las Cruces office of the FBI and the Mescalero Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
Medical Director and Three Therapists Convicted in $63 Million Health Care Fraud SchemeRead the Press Release
A federal jury in Miami late yesterday convicted the former medical director of, and three therapists employed by, a now-defunct health care provider of conspiracy to commit health care fraud and related charges for their roles in a scheme to fraudulently bill Medicare and Florida Medicaid more than $63 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Roger Rousseau, 73, of Miami; Doris Crabtree, 62, of Miami; Angela Salafia, 68, of Miami Beach, Florida; and Liliana Marks, 48, of Homestead, Florida, were found guilty of conspiracy to commit health care fraud. In addition, Rousseau was convicted of two counts of health care fraud. Sentencing is scheduled for Nov. 6, 2015, before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida.
Rousseau was the former medical director of Health Care Solutions Network Inc. (HCSN), a now-defunct partial hospitalization program (PHP) that purported to provide intensive treatment for mental illness. Crabtree, Salafia and Marks were therapists who worked for HCSN.
According to the evidence presented at trial, from approximately 2004 through 2011, HCSN billed Medicare and Medicaid for mental health services that were not medically necessary or never provided, and that HCSN paid kickbacks to assisted living facility owners and operators in Miami who, in exchange, referred beneficiaries to HCSN.
The trial evidence showed that Rousseau routinely signed what he knew to be fabricated and altered medical records without reviewing the substance of the records and, in most instances, without ever meeting with the patients. The evidence at trial also demonstrated that Crabtree, Salafia and Marks fabricated medical records to support HCSN’s false and fraudulent claims for reimbursement for PHP services.
In total, HCSN submitted approximately $63.7 million in false and fraudulent claims to Medicare and Medicaid. Medicare and Medicaid paid approximately $28 million on those claims.
In November 2014, following a jury trial, co-defendants Blanca Ruiz and Alina Fonts were convicted of conspiracy to commit health care fraud, and Fonts also was convicted of health care fraud. In February 2015, both Ruiz and Fonts were sentenced to serve six years in prison.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. The case was prosecuted by Trial Attorneys Allan J. Medina, Lisa H. Miller and Bryan D. Fields of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Maryland man guilty of possessing stolen firearmsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Nevyou Alemu, 21, of Gaithersburg, Maryland, was convicted today of possessing stolen firearms, United States Attorney William J. Ihlenfeld, II, announced.
Alemu conspired with Kristopher Seth Davis, 20, of Silver Spring, Maryland and Adesola Vanzant, 21, of Upper Marlboro, Maryland, to steal firearms. In April 2014, the defendants traveled across state lines from Maryland to New Milton, West Virginia and stole approximately 14 firearms and hundreds of rounds of ammunition from a residence. The defendants then transported the stolen firearms and ammunition back across state lines when they returned from West Virginia to Maryland. Specifically, the defendants were discovered in April 2014 in Doddridge County, West Virginia in possession of a stolen .22 caliber pistol and a 20 gauge shotgun.
Following a 2 day trial, U.S. District Judge Irene M. Keeley found Alemu guilty of one count of “Conspiracy to Possess Stolen Firearms,” and one count of “Aiding and Abetting the Possession of Stolen Firearms.” He faces up to five years in prison and a fine of up to $250,000 on the conspiracy charge and up to ten years in prison and a fine of up to $250,000 on the possession charge.
Davis and Vanzant each previously pled guilty to one count of “Aiding and Abetting Possession of Stolen Firearms.” They each face up to ten years in prison and a fine of up to $250,000. 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 defendants.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
Marvin Sharp charged with Child Molesting, Sexual Misconduct with a Minor and Possession of Child PornographyRead the Press Release
(Indianapolis, Ind.) – Marion County Prosecutor Terry Curry and United States Attorney Josh J. Minkler announced today the filing of formal charges against Marvin Sharp for child molestation and possession of child pornography. Sharp has been charged with four counts of Child Molesting (two C Felonies and two Level 4 Felonies) and three counts of Sexual Misconduct with a Minor (Level 5 Felonies) by the Marion County Prosecutor’s Office for allegations of inappropriate behavior with a young woman while acting as her gymnastics coach. Sharp has also been charged with knowing receipt of child pornography and knowing possession of child pornography by the United States Attorney’s Office.
“It is a parent’s worst nightmare that someone whom we entrust with care and guidance of our children -whether a coach, teacher, or otherwise - would abuse that trust and harm our children. Anyone who would harm our children in those circumstances, as we have alleged here, will be held fully accountable for their crimes,” Prosecutor Curry stated.
“Protecting our children has been and will remain a top priority in this office,” said Minkler. “Those who prey on the vulnerable, who cannot protect themselves, can count on the full wrath of state and federal prosecution.”
According to the probable cause affidavit filed in Marion County Superior Court, Sharp is accused of taking inappropriate photographs and inappropriately touching a young woman on many occasions while he was her gymnastics coach. According to the young woman, Sharp frequently told her not to tell her parents about photo-shoots and physical therapy sessions where the inappropriate touching occurred. The alleged acts took place at the defendant’s place of business, Sharp’s Gymnastics Academy, in Indianapolis as well as during an out-of-state trip that the victim and Sharp took together as competitor and coach for a gymnastics event.
Child pornography files were allegedly discovered on computers belonging to Sharp as a result of digital and forensic evidence seized during the execution of search warrants on Sharp’s home and Sharp’s Gymnastics Academy. According to the criminal complaint filed in U. S. District Court, thousands of sexually explicit images of minors were found in a safe in his home as well as images in a file cabinet at his gymnasium. The images displayed minor boys and girls in sexually explicit poses.
Anyone with information concerning additional potential victims is encouraged to call and report to 1-877-ISP-1TIP (1-877-477-1847). Messages left at this hotline will be directed to investigating officers.
A charge of a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
NOTE: The state charging information and probable cause affidavit, federal complaint, and mug shot of Marvin Sharp are attached.
Manager in Counterfeit Credit Card Ring Sentenced to over Six Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Navee Diaz, a/k/a India, age 40, of Owings Mills, Maryland today to 76 months in prison, followed by five years of supervised release, for bank fraud conspiracy and aggravated identity theft, arising from a scheme to use of stolen credit and debit card information to manufacture counterfeit credit cards used to buy merchandise and services. Judge Quarles also entered an order requiring Diaz to pay restitution of $126,318.99.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; Chief Gary Gardner of the Howard County Police Department; Interim Commissioner Kevin Davis of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; Chief Ross C. Buzzuro of the Ocean City Police Department; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Newport News Police Chief Richard W. Myers; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to her plea agreement, starting before January 1, 2011 and continuing through June 2014, Diaz conspired with co-defendants William Downey, Michael Crew and others to manufacture counterfeit debit and credit cards bearing stolen and unauthorized credit and debit card account numbers then use the counterfeit cards to purchase goods and services. Diaz initially became involved in the scheme when her friend, Downey, introduced her to Crew, with whom she became romantically involved. Crew had an embossing machine, and made credit cards using altered gift cards and the credit card and debit card numbers stolen from others. The stolen credit card account numbers were obtained from a variety of sources. Once a valid number was obtained, Diaz and other co-conspirators would use those numbers to obtain other valid numbers, which they would confirm by calling customer service for the issuing financial institution. These numbers were used to manufacture counterfeit access devices bearing the stolen credit and debit card account numbers.
Crew sold the counterfeit credit cards and recruited others, including Diaz, to go out and make purchases on Crew’s instructions. Ultimately, Diaz began to provide cards to others and to take and fulfill orders for items to be purchased with the counterfeit cards. Diaz recruited others into the scheme, obtained cards as needed from Crew and co-defendant Jason Evans, and even manufactured cards herself. She exchanged dozens of text messages each day taking orders, arranging for cards and workers, and conducting other business of the conspiracy. Diaz went out shopping with the cards on a daily basis, with and without other workers in the scheme.
During her participation in the conspiracy, Diaz and her co-conspirators obtained or attempted to obtain extensions of credit from financial institutions of between $200,000 and $400,000, using the financial account numbers of real people. More than 250 individuals and institutions were defrauded by the scheme.
Michael Crew, age 55, of Owings Mills, and Jason Evans, age 32, of Millsboro, Delaware previously pleaded guilty to the same charges and were sentenced to nine years in prison and four years in prison, respectively, and were each ordered to pay restitution of $126,318.99. William Downey, age 43, of Gwynn Oak, Maryland, his brother, Stanley Downey, age 49, formerly of New York, also pleaded guilty to their roles in the conspiracy and are scheduled to be sentenced on October 7, 2015, and October 27, 2015, respectively, both at 1:00 p.m. The Downey brothers remain detained pending sentencing.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service; Howard County, Baltimore City, Baltimore County, Howard County, Ocean City and Newport News Police Departments, HSI Baltimore and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who prosecuted the case.
Man Who Pushed Woman Out of Car Pleads Guilty to Carjacking, Firearm ChargeRead the Press Release
KANSAS CITY, KAN. - A Kansas City, Kan., man pleaded guilty Tuesday to federal charges he pointed a gun at a woman and pushed her out a driver’s side door before stealing her car, U.S. Attorney Barry Grissom said today.
John Michael Devosha, 25, Kansas City, Kan., pleaded guilty to one count of carjacking and one count of using a firearm in furtherance of carjacking.
In his plea, he admitted that on Oct. 22, 2013, was already under federal indictment in another case when he wrecked a stolen pickup truck near 59th and Leavenworth Road in Kansas City, Kan. He abandoned the car and fled on foot in search of another car.
A woman who was driving a 2002 Cadillac Deville was stopped in traffic congestion created by the wreck. Devosha used the handle of his gun to break the woman’s front passenger window and enter her car. He pointed a gun at the woman and told her to drive away fast. Before she could do it, he pushed her out the driver’s side door and onto the road, where she stumbled and injured herself. Then he drove away in her car.
Three days later, Pottawatomie Tribal Police arrested him in Jackson County, Kan., after a 45-mile high speed chase on U.S. Highway 75.
Sentencing is set for Nov. 2, 2015. Both parties have agreed to recommend a sentence of 180 months to run consecutively to a 10-year sentence in the previous federal case. Grissom commended the Pottawatomie Tribal Police, he Kansas City, Kan., Police Department, the Bureau Alcohol, Tobacco, Firearms and Explosives and Special Assistant U.S. Attorney Erin Tomasic, as well as agencies that participated in the arrest including officers from Brown, Jefferson and Jackson counties, as well as police from Holton and Sabetha and the Kickapoo and Sac and Fox tribes.
Leonardtown Man Sentenced to Six Years in Prison for Distribution of Heroin that Resulted in the Death of a FriendRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Joshua Scott Schellhase, age 31, of Leonardtown, Maryland today to six years in prison followed by three years of supervised release for distribution of heroin. A close friend of Schellhase died as a result of using the heroin distributed by Schellhase.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; and St. Mary’s County Sheriff Tim Cameron.
According to his plea agreement, during 2012 Schellhase was close friends with an individual with whom Schellhase used heroin or other opiates on a daily basis. Schellhase and the individual would provide heroin to each other as they were able to obtain it.
On October 11, 2012, the individual contacted Schellhase by text message and Schellhase agreed to give the individual some heroin that Schellhase had recently purchased. During the early evening, Schellhase drove to a residence in Calloway, Maryland. The individual came out of the house and Schellhase gave the individual a small amount of heroin and two cigarettes. The individual went back into the house, went into the bathroom and ingested the heroin he had received from Schellhase. About 15 minutes later, the individual’s girlfriend knocked on the bathroom door, but received no response. She opened the door and discovered the individual slumped over and non-responsive. Emergency medical personnel were called and attempted to revive the individual, but the individual died.
The cause of death was determined to be morphine intoxication. The victim died as a result of ingesting the heroin provided by Schellhase.
United States Attorney Rod J. Rosenstein praised the DEA and St. Mary’s County Sheriff’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Leah J. Bressack, who prosecuted the case.
Last of Four Defendants Charged in the March 2014 Heroin Overdose Death of a Dallas Teenager Admits GuiltRead the Press Release
DALLAS — A 37-year-old heroin dealer is the latest, and last, defendant to appear in federal court and plead guilty to a felony drug offense stemming from his role in the March 2014 heroin overdose death of a Dallas teenage girl, Rian Hannah Lashley, announced John Parker, U.S. Attorney for the Northern District of Texas.
Jimison Erik Coleman, 37, of Los Angeles, California, appeared this morning before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to one count of conspiracy to possess with the intent to distribute heroin. Coleman is the last of four defendants charged in the case to plead guilty. The other three defendants charged in the case, Kathryn Grace Dirks, a/k/a “Kat,” 25; Glen William Brunton, 28; and Cierra Allyn Rounds, 27; also pleaded guilty to that offense. Each defendant faces a maximum statutory sentence of 20 years in federal prison and a $1 million fine; sentencings are set for the upcoming months.
According to documents filed in his case, Coleman admits that from December 2013 until April 2015, he routinely distributed heroin and other drugs to multiple customers, some of whom worked as dancers in various strip bars in the Dallas area as well as clubs in Southern California. From time to time, Coleman fronted quantities of drugs to particular dancers who then, at his direction, sold the drugs to patrons and/or dancers with whom they came in contact. During this time, Coleman distributed multiple grams of heroin, multiple hits of ecstasy and molly, multiple ounces of cocaine and various prescription drugs to numerous customers in North Texas and elsewhere.
During the early morning hours of March 25, 2014, Coleman and Dirks traveled from a residence in Plano, Texas, to a nearby IHOP restaurant, where they joined Rounds, Brunton, and Rian Lashley, and the group ate breakfast. Coleman admits that he had provided Dirks, Rounds and Brunton with heroin on numerous occasions prior to that date.
Late that morning in a parking lot near the IHOP, Coleman gave Brunton five baggies totaling one gram of “China White” heroin and directed him to deliver the heroin to Lashley, who was with Dirks and Rounds in Lashley’s vehicle. Brunton, at Coleman’s direction, distributed the heroin to Rian Lashley for $120.00. After acquiring the heroin, Rounds, Dirks and Lashley left the parking lot in Lashley’s vehicle and traveled to a residence in Dallas where Rounds was living. Coleman and Brunton left the parking lot in a separate vehicle.
On March 25, 2014, Rian Lashley died at a residence after being injected with the heroin that she purchased from Coleman earlier in the day. Coleman was not present when Lashley was injected with the heroin that, according to the autopsy, resulted in her death.
The Dallas Police Department, the FBI, the U.S. Marshals Service, and the Buena Park, California, Police Department investigated. Deputy Criminal Chief Assistant U.S. Attorney Rick Calvert and Assistant U.S. Attorney Phelesa Guy are prosecuting.
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Las Cruces Resident Sentenced to Five Years in Federal Prison for Trafficking Heroin in Doña Ana CountyRead the Press Release
ALBUQUERQUE – Angel Linares, 20, of Las Cruces N.M., was sentenced today in Las Cruces federal court to five years in federal prison followed by four years of supervised release for heroin trafficking charges in connection with five cases filed in 2013, as the result of a multi-agency investigation into drug trafficking in Doña Ana County, N.M.
Linares, together with a Mexican national and 19 other Las Cruces residents, were charged with heroin trafficking offenses in five indictments filed in Nov. 2013, as a result of a multi-agency investigation led by the FBI that targeted the heroin trafficking activities of Jovita Belmonte-Gonzalez in Doña Ana County. Belmonte-Gonzales, 45, a Mexican national from Ciudad Juarez, Chihuahua, Mexico, was named as the lead defendant in four of five indictments which charged her with supplying heroin to five drug trafficking organizations that distributed heroin in Doña Ana County.
The lead defendant, Belmonte-Gonzalez, pled guilty to heroin trafficking charges in four of the five cases in June 2014, and admitted conducting frequent heroin transactions with her co-defendants between June 2013 and Oct. 2013. Court records reflect that Belmonte-Gonzalez typically negotiated heroin sales by telephone from Juarez and her co-defendants traveled from Doña Ana County to Juarez where they purchased the heroin from her and later distributed the drugs in Doña Ana County. Belmonte-Gonzales faces a mandatory minimum of ten years in prison and a maximum of life in prison, and will be deported after she completes her prison sentence. She remains in federal custody pending her sentencing hearing, which has yet to be scheduled.
Linares entered a guilty plea on Oct. 7, 2014, to a conspiracy to possess heroin with intent to distribute charge. Linares admitted to facilitating the trafficking of approximately 250 grams of heroin between co-defendants and Belmonte-Gonzalez from Sept. 21, 2013 through Oct. 22, 2013.
All 21 of the defendants as a result of the investigation have entered guilty pleas. Ten defendants have been sentenced, and the rest are currently awaiting sentencing hearings.
These cases are being prosecuted by Assistant U.S. Attorney E. Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office. The investigation leading to the charges in the four cases was led by the Las Cruces office of the FBI in collaboration with U.S. Customs and Border Protection, the U.S. Border Patrol, the Las Cruces office of the DEA, the U.S. Marshals Service, the Las Cruces Police Department and the Doña Ana County Sheriff’s Office.
The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Largest Online Male Escort Service RaidedRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging the CEO of Rentboy.com, Jeffrey Hurant, and six Rentboy.com employees with conspiring to violate the Travel Act by promoting prostitution. The defendants were arrested this morning and are scheduled to appear before United States Magistrate Judge Marilyn Go at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Glenn Sorge, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and William J. Bratton, Commissioner, New York City Police Department.
As alleged in the complaint, Rentboy.com is a male escort advertising site founded in 1997 which hosts thousands of paid advertisements. While the site has disclaimers stating that the advertisements are for companionship and not sexual services, Rentboy.com is designed primarily for advertising illegal prostitution. The website charges subscribers a minimum monthly fee of $59.95 and up to several hundred dollars to advertise sexual services. Once the fee is paid, subscribers can select from a number of categories created by Rentboy.com the sexual services they are willing to perform and the price charged. Subscribers can also include their physical descriptions and provide links to another website where their sexual services are rated by prior customers. Between 2010 and 2015, Rentboy.com had over $10 million in gross proceeds.
“As alleged, Rentboy.com attempted to present a veneer of legality, when in fact this internet brothel made millions of dollars from the promotion of illegal prostitution,” stated Acting United States Attorney Currie. Mr. Currie thanked the Drug Enforcement Administration’s Field Office in New York for their assistance in the investigation.
HSI Acting Special Agent in Charge Sorge stated, “The facilitation and promotion of prostitution offenses across state lines and international borders is a federal crime made even more egregious when it’s blatantly advertised by a global criminal enterprise,” said Acting Special Agent in Charge Sorge of HSI New York. “HSI will use its unique authorities to disrupt and dismantle such organizations and seize the millions of dollars in illegal proceeds they generate.”
“As alleged, Rentboy.com profited from the promotion of prostitution despite their claim that their advertisements were not for sexual services. Thanks to the detectives, agents, and prosecutors of the U.S. Attorney’s Office in the Eastern District involved in this investigation, these individuals will be held accountable for running this racket,” said Police Commissioner Bratton.
In addition, earlier today the government served warrants authorizing the seizure of over $1.4 million of alleged criminal proceeds from six bank accounts. The government also took steps to restrain the domain name www.rentboy.com.
The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted each defendant faces up to five years imprisonment and a fine of up to $250,000.
The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Tyler Smith and Melanie Hendry are in charge of the prosecution.
The Defendants:
JEFFREY HURANT
Age: 50
New York, NYMICHAEL SEAN BELMAN
Age: 47
New York, NYCLINT CALERO
Age: 48
New York, NYEDWARD LORENZ ESTANOL
Age: 23
New York, NYSHANE LUKAS
Age: 41
New York, NYDIANA MILAGROS MATTOS
Age: 43
Queens, NYMARCO SOTO DECKER
Age: 28
New York, NYE.D.N.Y. Docket No. 15-MJ-780
Kansas Man Sentenced to Prison for Supplemental Medicare Insurance ScamRead the Press Release
DES MOINES, IA – On August 21, 2015, Brian Curtis Henton, 38, of Olathe, Kansas, was sentenced by United States District Court Judge James E. Gritzner to 12 months and one day in federal prison based on his earlier guilty pleas to two counts of mail fraud, announced United States Attorney Nicholas A. Klinefeldt. Judge Gritzner also ordered Henton to pay $23,300.15 in restitution to Equitable and Cigna insurance companies, and to serve three years of supervised release following his release from federal prison.
According to the plea agreement, from in or about April 2013 until October of 2013, Henton used his Iowa Insurance Producer License and fraudulent applications to sell approximately 120 Equitable and Cigna Supplemental Medicare insurance policies to Kansas residents. Henton admitted that he sold the insurance policies to Kansas residents, but entered false Iowa addresses, false Iowa telephone numbers, and forged applicants’ signatures on the applications when submitted to the insurance companies. As a result of the fraud, Henton received commission payments that he was not entitled to from Equitable and Cigna.
This matter was investigated by the Iowa Insurance Fraud Bureau and the Federal Bureau of Investigation, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Independence Man Indicted for Stealing $247,000 from EmployerRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the financial comptroller of a North Kansas City, Mo., business was indicted by a federal grand jury today for a wire fraud scheme in which he embezzled more than $247,000 from his employer over five years.
John S. Kruse, 48, of Independence, Mo., was charged in a five-count indictment returned by a federal grand jury in Kansas City, Mo.
Kruse was employed as the financial comptroller of BCC Merchant Solutions, a North Kansas City firm that provides electronic payment systems, e-commerce systems, business capital and marketing services to other companies.
Today’s indictment alleges that Kruse engaged in a scheme to steal at least $247,508 from BCC Merchant Solutions from April 2010 until his resignation in July 2014. Kruse allegedly made at least 213 unauthorized wire transfers from his employer’s bank account into his personal bank account. Through his scheme, the indictment says, Kruse embezzled $5,776 in 2010; $36,989 in 2011; $71,868 in 2012; $76,225 in 2013; and $56,648 in 2014.
According to the indictment, Kruse used the money to pay for extravagant trips for his family to Las Vegas, Nev., and to Disneyworld. He allegedly spent $50,934 at convenience stores and for gasoline; $41,197 on entertainment; $138,186 for groceries and general merchandise; $65,416 through PayPal; $49,105 for travel and leisure; $49,773 for miscellaneous; and $50,934 for cash.
As the financial comptroller, Kruse was in charge of paying out sales commissions and bank reconciliations, along with keeping records within QuickBooks. In the course of his job, Kruse was authorized to access BCC Merchant Solutions’ bank account. To hide his embezzlement, the indictment says, Kruse manipulated the QuickBooks records to falsely reflect that the money he transferred into his account was being used elsewhere. Kruse allegedly falsified who the deposits were made to, indicating they were payments made on sales commissions and bank reconciliations.
Kruse is charged with five counts of wire fraud. The indictment also contains a forfeiture allegation, which would require Kruse to forfeit to the government $247,508, representing the proceeds of the alleged wire fraud scheme.
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 Daniel M. Nelson. It was investigated by the U.S. Secret Service and the North Kansas City, Mo., Police Department.
Houston Jury Convicts Illegal Alien for Possession of a FirearmRead the Press Release
HOUSTON – A federal jury has convicted a 34-year-old illegal alien who resided in Houston on one count of being an illegal alien in possession of a firearm, announced U.S. Attorney Kenneth Magidson. The verdict was returned less than an hour ago against Ciro Gomez Cardenas, 34, of Guerrero, Mexico, following a two-day trial and approximately two hours of deliberation.
During trial, the jury heard the testimony of several law enforcement officers who stated they had met with Cardenas at his residence in Houston on March 2, 2015. At that time, he admitted to having a firearm, a 20-gauge Mossberg pistol grip shotgun. In addition to the gun, Cardenas also possessed 64 rounds of 20-gauge and 12-guage shotgun shells. Cardenas was in the country illegally and per federal law, not permitted to possess a firearm.
Agents conducted a search of the residence and discovered the weapon and ammunition, which were manufactured in Connecticut and Arkansas, respectfully, and had traveled in interstate commerce.
Cardenas argued that he was holding the shotgun for a friend who had been previously deported to Mexico approximately two years ago. He further attempted to convince the jury that because he did not purchase the gun, he could not be in possession of it.
The jury was not persuaded and ultimately found him guilty as charged.
U.S. District Judge Keith P. Ellison presided over the trial and has set sentencing for Nov. 17, 2015, at which time Cardenas faces a maximum of up to 10 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The charges are the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Homeland Security Investigations. Authorities with Citizenship and Immigration Services also provided testimony at trial.
Special Assistant U.S. Attorney Rick Bennett and Assistant U.S. Attorney Julie Searle prosecuted the case.
Hawarden Man Sentenced to Thirteen Years for Distributing Child PornographyRead the Press Release
A man who distributed child pornography was sentenced August 19, 2015 to thirteen years in federal prison.
James Ney, age 33, of Hawarden, Iowa, received the sentence after a February 19, 2015 guilty plea to one count of distribution of child pornography. At the guilty plea hearing, Ney admitted that, in 2013, he distributed child pornography to others.
Ney was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Ney was sentenced to 156 months’ imprisonment. A special assessment of $100 was imposed, and he must also serve a five-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by Homeland Security Investigations.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 14-4072.
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Hancock County man sentenced for heroin traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Raymond James Ripley, Sr., 29, of New Cumberland, West Virginia, was sentenced today to 15 months in prison for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Ripley conspired with others to possess and sell heroin in Hancock County, West Virginia throughout 2013 and 2014. He pled guilty in June 2015 to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Heroin.”
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government. The Hancock, Brooke, Weirton Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Frederick P. Stamp presided.
Grand Island Woman Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that on August 25, 2015, Nicole Renee Contreras, age 33 of Grand Island, was sentenced to 10 years (120 months) in prison for her role in a conspiracy to distribute and possess with the intent to distribute 50 grams or more of methamphetamine (actual), 500 grams or more of a mixture or substance containing methamphetamine, a mixture or substance containing cocaine, and a mixture or substance containing marijuana between January of 2010 and October 16, 2014. Following the prison term, Contreras will serve five years on supervised release.
Information provided to law enforcement established that Contreras was responsible for the distribution of at least 50 grams of methamphetamine (actual), at least 500 grams (approximately 18 ounces) of methamphetamine mixture, and small amounts of cocaine and marijuana during that time-period. On October 16, 2014, Contreras was contacted by narcotics officers at a Lincoln motel and gave the officers consent to search which led to the discovery of a total of approximately 95 grams of methamphetamine, approximately one ounce of marijuana and a small amount of cocaine. Contreras admitted to the officers that she had sold methamphetamine from the motel room prior to the officers’ arrival.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Four More Plead Guilty to Tax Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that four more co-defendants have pleaded guilty in federal court to aiding and abetting a fraudulent tax return preparation scheme that claimed nearly $340,000 in fraudulent income tax refunds.
Jeannie Marie Rhodes, 34, of Springfield, Mo., pleaded guilty before U.S. Magistrate Judge David P. Rush today to making a false claim.
Shawna Marie Hughey, 37, of Joplin, Mo., formerly of Springfield, Johnny L. Cooper, 28, of Springfield, and William J. Coonce, 29, of Otterville, Mo., pleaded guilty on Monday, Aug. 24, 2015. Hughey and Coonce each pleaded guilty to two counts of making false claims. Cooper pleaded guilty to one count of making a false claim.
Co-defendant Cherie Christine Dupuis, 43, of Springfield, pleaded guilty on July 21, 2015, to leading the fraudulent tax return preparation conspiracy. Dupuis admitted that she and co-conspirators defrauded the government by filing false claims for income tax refunds from February 2009 to March 2012. In the false and fraudulent federal income tax returns they prepared and filed, conspirators claimed refunds from the IRS totaling approximately $340,630, of which approximately $336,839 was false. Over the course of the scheme, the total actual tax loss to the IRS was $284,169.
Dupuis admitted that she filed fraudulent federal income tax returns in her own name and for at least 19 other individuals. Dupuis would usually split the fraudulent refunds with her co-conspirators. The total amount of the false claims Dupuis personally prepared and/or filed was approximately $298,708, with approximately $256,281 being paid on these false claims and a loss to the government of approximately $213,711.
Rhodes admitted that she aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing a false federal income tax return in 2012. The return listed wages that Rhodes had not received and claimed a refund to which Rhodes knew she was not entitled. Rhodes provided his personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $6,881.
Hughey admitted that she aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing false federal income tax returns in 2011 and 2012. Both returns listed wages that Hughey had not received and claimed refunds to which Hughey knew she was not entitled. Hughey provided her personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $22,626. Hughey also admitted that she paid Dupuis approximately $1,500 for the preparation of her and Cooper’s 2011 federal income tax returns.
Cooper admitted that he aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing a false federal income tax return in 2012. The return listed wages that Cooper had not received and claimed a refund to which Cooper knew he was not entitled. Cooper provided his personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $10,100. Cooper also admitted that he paid Dupuis approximately $2,000 from the proceeds of his fraudulent tax refund.
Coonce admitted that he aided and abetted Dupuis, and was aided and abetted by Dupuis, in filing false federal income tax returns in 2010 and 2011. Both returns listed wages that Coonce had not received and claimed refunds to which Coonce knew he was not entitled. Coonce provided his personal information to Dupuis, which Dupuis then used to file false income tax returns. The total loss to the government was $15,652. Coonce also admitted that he paid Dupuis approximately half of the proceeds of his fraudulent tax refunds.
Co-defendants Jeannette R. Dunn, 48, of Huntsville, Ark., formerly of Springfield, Asia Michelle Couchman, 26, of Oak Grove, Mo., and Delbert L. Allen, 37, of Pleasant Hope, Mo., formerly of Springfield, have pleaded guilty to the same charges.
Under federal statutes, Hughey and Coonce are each subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. Rhodes and Cooper are each subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation.
Former Township Tax Collector Sentenced to Five Years' Probation for Theft of $300,000 in Public FundsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a York County woman was sentenced today to 5 years’ probation by U.S. District Court Judge Sylvia H. Rambo for theft of public funds.
According to United States Attorney Peter Smith, Melissa Ann Arnold, age 46, was charged in February 2015 for stealing more than $300,000 from tax payments made by citizens to Spring Garden Township, York County during 2008 and 2009. Arnold was the Treasurer and Tax Collector for Spring Garden Township from 1995 until October 2009. Arnold was able to steal the tax payments because many of the checks were written out to her and, rather than deposit the checks into the Township’s account, she deposited them into her personal account.
Arnold pled guilty in March 2015.
York County submitted an insurance claim for the funds and received a significant repayment. Arnold entered into an agreement with the insurance company to pay back the full amount of the claim and has already paid almost $50,000 of the amount due.
Judge Rambo made payment of the balance, as well as an additional sum of almost $28,000 to Spring Garden Township for related losses, part of Arnold’s sentence in a restitution order.
The case was investigated by the Federal Bureau of Investigation with assistance of the Pennsylvania State Police and Spring Garden Township Police Department, and was prosecuted by Assistant U.S. Attorney James T. Clancy.
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Former Owner of “Direct Tax” Preparation Business Pleads Guilty in Tax Fraud ScamRead the Press Release
ATLANTA - Jessica L. Hills, the former owner of Direct Tax, has pleaded guilty for her role in a tax fraud scheme by using her business to file thousands of fraudulent returns. Direct Tax was a tax preparation business with three locations in the Atlanta - College Park, Georgia, area.
“The defendant’s conduct cost the U.S. Treasury millions of dollars,” said U.S. Attorney John Horn. “Hills’ actions demonstrated a flagrant disrespect for the law, and compromised the personal information of hundreds of victims.”
“Hills’ actions caused considerable financial damage and personal inconvenience to thousands of taxpayers” stated IRS Criminal Investigation Special Agent in Charge, Veronica F. Hyman-Pillot. “We will continue to pursue individuals like Hills, who abuse positions of trust to commit crimes and victimize members of our community and innocent taxpayers for their own personal gain.”
According to U.S. Attorney Horn, the charges and other information presented in court: During tax years 2012, 2013, and 2014, Direct Tax filed over 2,000 federal income tax returns, seeking millions of dollars in refunds. These returns included either fraudulent information designed to increase the refund amount, or were filed using stolen identities. Hills continued to file fraudulent tax returns even after police in College Park, Georgia, executed a search warrant at her business based on complaints from honest taxpayers, and after the IRS cancelled her electronic filing identification number. In total, Hills filed tax returns claiming over $4 million in tax refunds.
Sentencing for Jessica L. Hills, 30, of Atlanta, Georgia, is scheduled for November 9, 2015, at 10:30 a.m., before U.S. District Judge Steve C. Jones.
This case is being investigated by the Internal Revenue Service Criminal Investigation, FBI, Social Security Administration, U.S. Secret Service, and the Georgia Department of Revenue.
Special Assistant U.S. Attorney Diane C. Schulman and Assistant U.S. Attorney Samir Kaushal are prosecuting 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 U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Former Owner and Operator of NYC Health Clinics Sentenced in Manhattan Federal Court for $30 Million Medicare Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that OSCAR HUACHILLO, the former owner and operator of multiple HIV/AIDS clinics in New York City, was sentenced today in Manhattan federal court to 87 months in prison for orchestrating a scheme to defraud Medicare out of more than $31 million; he was also sentenced to 60 months in prison, to be served concurrently, for evading more than $3.4 million in federal income taxes by falsely underreporting his income. As part of the scheme, HUACHILLO submitted bills to Medicare for expensive treatments that were administered at highly diluted doses or never administered at all, and were often unnecessary. HUACHILLO previously pled guilty to conspiring to commit health care fraud and committing tax evasion before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Oscar Huachillo defrauded Medicare out of tens of millions of dollars and evaded millions of dollars in taxes on his illegal windfall. His schemes put patients at risk, undermined and exploited the Medicare program, and cheated honest taxpayers.”
According to the criminal complaint, superseding information, and other documents filed in Manhattan federal court, as well as statements made at related court proceedings:
HUACHILLO set up and operated multiple health care clinics in New York City that purported to provide injection and infusion treatments to Medicare-eligible HIV/AIDS patients, but that were, in reality, health care fraud mills (the “Clinics”) that routinely billed Medicare for medications that were never provided or were provided at highly diluted doses, and that were often unnecessary because the person being “treated” did not medically need the treatments.
HUACHILLO and his co-conspirators executed the fraudulent scheme by recruiting HIV/AIDS patients who were eligible for Medicare to come to the Clinics multiple times per week, for multiple months, to undergo expensive “treatments” that were often unnecessary. The purported treatments included drugs costing hundreds of dollars each to administer and typically reserved for cancer and anemia patients. HUACHILLO and his co-conspirators paid the patients cash kickbacks of up to $300 per week in exchange for coming to the Clinics and agreeing to undergo the treatments. Patients were also offered approximately $50 for each additional patient they referred to the Clinics. HUACHILLO and his co-conspirators then used these patients’ status as Medicare beneficiaries to submit claims to Medicare for reimbursement for the treatments purportedly administered to the patients, often receiving tens of thousands of dollars in reimbursements per patient. As a result of the scheme, from 2009 through 2013, HUACHILLO and his co-conspirators defrauded the Medicare system out of at least $31 million.
In addition, HUACHILLO willfully evaded over $3.4 million in taxes owed to the IRS during the tax years 2009 through 2011 by falsely underreporting his taxable income, including income he had obtained through fraudulent Medicare claims.
In pronouncing the sentence, Judge Failla said, “[I]n the cases I’ve had as a judge, this is the worst fraud I’ve had. $31 million in losses; that’s terrible.” She also said, “The conduct is simply reprehensible.”
* * *
In addition to the term of prison, HUACHILLO, 55, of Manhattan, was sentenced to three years of supervised release and was ordered to pay $3,454,244.16 in restitution and $31,177,987.84 in forfeiture, including forfeiture of approximately $14 million of assets that were seized at or around the time of HUACHILLO’s arrest in August 2013.
George Juvier, 58, of Manhattan, has been charged separately in connection with the Medicare fraud scheme. In January 2015, Juvier pled guilty to engaging in a health care fraud conspiracy before U.S. Magistrate Judge Frank Maas. Juvier is scheduled to be sentenced at 11:00 a.m. on October 8, 2015, by U.S. District Judge Kimba M. Wood.
Mr. Bharara praised the outstanding efforts of the Department of Health and Human Services-Office of the Inspector General, IRS-Criminal Investigation Division, and the Federal Bureau of Investigation in the investigation. Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Jonathan Cohen is in charge of the prosecution.
Former Omaha Man Sentenced for Tax EvasionRead the Press Release
United States Attorney Deborah R. Gilg and Andrew M. Thornton, Acting Special Agent in Charge of IRS Criminal Investigation, announced that on August 25, 2015, Chet Lee West, 59, of Nebo, North Carolina, was sentenced following his conviction on felony tax charges. West was convicted on February 25, 2015, after a jury found him guilty of three counts of tax evasion relating to tax years 2007, 2008 and 2009. Chief Judge Laurie Smith Camp sentenced West to 51 months imprisonment. After his release from prison, West will begin a term of supervised release of 3 years. West was also ordered to make restitution in the amount of $439,515.81.
An investigation conducted by the Internal Revenue Service determined that from 2007 through 2009 West earned taxable income of approximately $272,224.00 while living and working in Omaha, Nebraska. Upon that income West had a tax due and owing of approximately $52,824.00. West willfully evaded his personal income taxes by failing to file Federal Individual Income Tax Returns for tax years 2007 through 2009. After being informed by the Internal Revenue Service that he was required to file Federal Individual Income Tax Returns, West continued to submit information to his employer in an attempt to avoid the withholding any employment taxes from his pay, including numerous letters and purported affidavits stating his position that he was not subject to taxation on his income. Between 2007 through 2009, West deposited personal income into bank accounts opened in the names of companies he created in an effort to hide and conceal his income from the Internal Revenue Service. West had not filed federal individual income tax returns since at least the 2000 taxable year. The restitution amount ordered by the Court included amounts for other years beyond the counts of conviction and also included interest and penalties.
“Today's sentence sends a loud and clear message that regardless of their opinions, those who willfully defy the tax laws will be fully investigated, prosecuted, and subjected to the full punishment of the law for their actions," said Andrew M. Thornton, Acting Special Agent in Charge of IRS Criminal Investigation.
This case was investigated by the Department of the Treasury, Criminal Investigations.
Former Medical Office Manager Sentenced to Prison for Embezzling $1.5 Million from EmployerRead the Press Release
BOSTON – A former office manager of Northampton Internal Medical Associates (NIMA) was sentenced yesterday in U.S. District Court in Springfield for embezzling more than $1.5 million.
Roxanne Tubolino, 56, of Belchertown, Mass., was sentenced by U.S. District Court Judge Mark G. Mastroianni to 39 months in prison, 36 months of supervised release, and was ordered to pay restitution of $1,342,256 to NIMA, $25,000 to NIMA’s insurance company, and $506,447 to the IRS. In January 2015, Tubolino pleaded guilty to one count of wire fraud and six counts of tax evasion.
From 2008 through Sept. 11, 2013, Tubolino was employed as an office manager for NIMA, a medical practice in Northampton. During this period, Tubolino embezzled $1,562,206 by writing numerous checks from NIMA’s corporate account to pay her personal credit card bills. Tubolino concealed this theft by entering these checks into NIMA’s Quickbooks records as business expenses, such as “Oncology Supplies.” Tubolino used the stolen funds to obtain cash advances and for charges relating to her competitive horse showing and at clothing stores, restaurants, and entertainment venues. Furthermore, Tubolino filed income tax returns from 2008 to 2013 in which she did not report any of the income that she received from her embezzlement at NIMA.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. The case was prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office.
Former Investment Banking Analyst with J.P. Morgan Securities and Two Friends Charged in $600,000 Insider Trading SchemeRead the Press Release
LOS ANGELES – An analyst with J.P. Morgan Securities and two longtime friends were taken into custody this morning after being charged in a federal grand jury indictment that alleges they participated in an insider trading scheme that netted more than $600,000 in illicit profits.
Ashish Aggarwal, 27, of San Francisco; Shahriyar Bolandian, 26, of the Palms District in Los Angeles; and Kevan Sadigh, 28, of Encino, are named in an indictment that was unsealed this morning.
The indictment charges each defendant with one count of conspiracy to commit securities and tender offer fraud, 13 substantive counts of securities fraud, 13 substantive counts of tender offer fraud and three substantive counts of wire fraud. Bolandian also is charged with one count of money laundering.
The defendants surrendered to the FBI this morning, and are scheduled to be arraigned this afternoon in United States District Court in downtown Los Angeles.
Between June 2011 and June 2013, Aggarwal was employed by J.P. Morgan Securities, LLC as an investment banking analyst in its San Francisco office. According to the indictment, through his employment, Aggarwal allegedly obtained material, non-public (inside) information about upcoming mergers and acquisitions involving publicly-traded companies. The indictment alleges that Aggarwal disclosed inside information to his friend Bolandian, who, in turn, shared the information with Sadigh, who is also a friend of Bolandian.
Bolandian and Sadigh allegedly used the inside information to trade in advance of the public announcements of Integrated Device Technology Inc.’s April 2012 planned acquisition of PLX Technology Inc., and Salesforce.com Inc.’s June 2013 acquisition of ExactTarget Inc. Through this scheme, Aggarwal, Bolandian and Sadigh allegedly netted more than $600,000 in illicit profits, which the defendants allegedly used to, among other things, cover previous trading losses and to repay liabilities incurred by Aggarwal and Bolandian. After being confronted by special agents with the FBI about their trading in early 2015, Bolandian and Sadigh provided false explanations of the basis of their trading decisions, according to the indictment.
“Every professional with access to inside information has a duty and responsibility to protect that information so no one gains an unfair advantage in the securities markets,” said United States Attorney Eileen M. Decker. “Insider trading corrodes the integrity of the markets and undermines confidence among those who choose to trade. We will bring to justice anyone who illegally uses or shares confidential business information that can be used to manipulate the system.”
David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, stated: “The defendants utilized material non-public information relative to stocks for personal gain without regard for the integrity of the marketplace in which they functioned. Today’s arrests make it clear that greed is not good, and also illustrate the FBI's commitment to identifying and rooting out corrupt trading practices.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If they are convicted of the crimes alleged in the indictment, the three defendants would face statutory maximum sentences of five years in federal prison for the conspiracy count and 20 years for each of the substantive fraud counts. Additionally, Bolandian could be sentenced to as much as 10 years in prison if he is convicted of the money laundering offense.
This case is being prosecuted by Assistant United States Attorney Paul G. Stern, along with Trial Attorneys Thomas B.W. Hall and Alexander F. Porter of the Fraud Section in the Criminal Division at the Department of Justice.
The insider trading scheme was investigated by the FBI.
The Securities and Exchange Commission provided valuable assistance. The SEC filed a related civil action this morning that alleges Aggarwal illegally disclosed nonpublic information (see: http://www.sec.gov/news/pressrelease/2015-174.html).
Former Investment Banking Analyst and Two Friends Charged in Insider Trading SchemeRead the Press Release
An analyst with J.P. Morgan Securities and two longtime friends were taken into custody this morning after being charged in a federal grand jury indictment that alleges they participated in an insider trading scheme that netted more than $600,000 in illicit profits.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California and Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division made the announcement.
Ashish Aggarwal, 27, of San Francisco; Shahriyar Bolandian, 26, of Los Angeles; and Kevan Sadigh, 28, of Los Angeles, are named in an indictment that was unsealed this morning and charges each defendant with one count of conspiracy to commit securities and tender offer fraud, 13 substantive counts of securities fraud, 13 substantive counts of tender offer fraud and three substantive counts of wire fraud. Bolandian also is charged with one count of money laundering.
The defendants surrendered to the FBI this morning, and are scheduled to be arraigned this afternoon before U.S. Magistrate Judge Patrick J. Walsh of the Central District of California.
Between June 2011 and June 2013, Aggarwal was employed by J.P. Morgan Securities, LLC (JPMS) as an investment banking analyst in its San Francisco office. According to the indictment, through his employment, Aggarwal allegedly obtained material, non-public (inside) information about upcoming mergers and acquisitions involving publicly-traded companies. The indictment alleges that Aggarwal disclosed this information to his friend Bolandian who, in turn, shared the information with Sadigh, who is also a friend of Bolandian. Bolandian and Sadigh then allegedly used the inside information to trade in advance of the public announcements of Integrated Device Technology Inc.’s April 2012 planned acquisition of PLX Technology Inc., and Salesforce.com Inc.’s June 2013 acquisition of ExactTarget Inc. According to the indictment, through this scheme, Aggarwal, Bolandian and Sadigh netted more than $600,000 in illicit profits, which the defendants allegedly used to, among other things, cover previous trading losses and to repay liabilities incurred by Aggarwal and Bolandian.
The case was investigated by the FBI. The case is being prosecuted by Trial Attorneys Thomas B.W. Hall and Alexander F. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Paul Stern of the Central District of California. The Securities and Exchange Commission provided valuable assistance.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Aggarwal et al Indictment
Former Insurance Broker Sentenced to Prison for Massive Phony Trucking Cargo Insurance Fraud SchemeRead the Press Release
ATLANTA - John Paul Kill, the former operator of Appeal Insurance Agency, LLC, has been sentenced to four years in federal prison for insurance fraud. Kill illegally collected over $3.7 million from nearly 800 trucking companies nationwide for selling/brokering fictitious cargo insurance policies.
“The defendant held himself out as an honest broker to hundreds of trucking companies, but he simply pocketed their premium payments instead of securing legitimate insurance coverage,” said U.S. Attorney John Horn. “His scam tricked clients into believing they had proper insurance coverage and endangered small businesses operating in more than 20 states.”
“I’m thankful for the diligence of the U.S. Attorney’s Office,” said Insurance Commissioner Ralph Hudgens, whose office referred the case. “This investigation proves that when agencies like the Department of Insurance and the U.S. Attorney’s Office work together, bad actors will be stopped.”
According to U.S. Attorney Horn, the charges, and other information presented in court: John Kill operated an insurance brokerage firm, Appeal Insurance Agency, LLC, in Norcross, Georgia. He began offering cargo insurance policies to trucking companies in 2013. Kill issued policy binders to clients falsely representing that Lloyd’s of London would provide insurance coverage. In reality, Kill never brokered any agreement with Lloyd’s to provide coverage and instead pocketed the premium payments. Most of the victims received no insurance policies at all, and Kill instead attempted to pay claims for losses out of the premium payments he collected from new victims.
In total, nearly 800 trucking companies located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, New Jersey, North Carolina, Ohio, Oklahoma, Oregon Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia paid approximately $3.75 million in premiums for these fraudulent insurance policies from 2013 through mid-2014.
John Kill, 63, of Norcross, Georgia, was sentenced by U.S. District Court Judge Eleanor L. Ross to four years in federal prison to be followed by three years of supervised release, and he was ordered to pay approximately $1.23 million in restitution to victims. Kill was convicted on this charge on May 6, 2015, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation and the Georgia Office of Commissioner of Insurance.
Assistant U.S. Attorney Nathan P. Kitchens 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 Atlanta Division is http://www.justice.gov/usao/gan/.
Former APG Police Officer Admits to Stealing Electronics from Government Buildings While on PatrolRead the Press Release
Baltimore, Maryland – Former Army police officer and sergeant at the Aberdeen Proving Ground (APG), Gregory Lamont McNeill, age 45, of Baltimore, pleaded guilty today to concealing and retaining stolen federal government property.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Joshua Adams, Assistant Special Agent in Charge of the U.S. Army Criminal Investigation Command, Aberdeen Proving Ground; Joel Holdford, Chief of Police, Department of the Army (DA) Police, Aberdeen Proving Ground; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
From December 2002 to February 2015, McNeill was a police officer and sergeant for the DA Police on APG. McNeill patrolled APG during non-business hours. At times he would find buildings unlocked. McNeill would sometimes enter the building to determine whether anyone was working. Many times, no one was working during these non-business hours and the building occupants simply forgot to secure the building.
According to his plea agreement, from at least September 2011 to August 2014, during these building checks, McNeill took items of government property for his own personal use, or for the use of his family members, including laptops, iPad, iPod, camera and accessories, and other electronic equipment. McNeill would place the stolen item in a bag which he transferred from his police vehicle to his personal vehicle at the end of his shift before returning home.
In the months following the theft, four of the five stolen Apple electronic items were linked to iTunes accounts that belonged to McNeill or a member of his family.
On February 5, 2015, agents interviewed McNeill at the APG, while other agents searched his home with the consent of his wife. The agents seized numerous stolen items from his residence. McNeill was unaware of the ongoing search and during his interview, he denied stealing any government property and claimed, for example, that his family did not use Apple products.
During the scheme, McNeill stole approximately $35,000 worth of property belonging to the U.S. Army.
McNeill faces a maximum sentence of 10 years in prison. U.S. District Judge James K. Bredar has scheduled sentencing for November 23, 2015 at 2:00 p.m.
United States Attorney Rod J. Rosenstein commended the Department of the Army Police on Aberdeen Proving Ground; U.S. Army Criminal Investigation Command, and FBI for their work in the investigation. Mr. Rosenstein praised the Defense Criminal Investigative Service – Mid Atlantic for their assistance in the investigation, and thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
Ferriday man, Natchez woman plead guilty to stealing Veterans Affairs benefitsRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a former Concordia Parish couple pleaded guilty Friday to their roles in a scheme to steal Veterans Affairs benefits over a 10-year period.
Alfred Lewis Jr., 67, of Ferriday, La., and Rose M. Lewis, 63, of Natchez, Miss., pleaded guilty before U.S. District Judge Dee D. Drell. Alfred Lewis pleaded guilty to one count of theft of government property or funds, and Rose Lewis pleaded guilty to one count of conspiracy to commit theft of government property or funds. According to evidence presented at the guilty plea, from July of 2003 until November of 2013, the defendants conspired to steal $197,784 in Veterans Affairs benefits. Alfred Lewis served in the U.S. Air Force and applied for veterans benefits in July of 2003. He and Rose Lewis did not disclose to Veterans Affairs that Rose Lewis had been working while living with Alfred Lewis during the 10-year period he received benefits. In written statements of their income sent to Veterans Affairs, they denied they were working when in fact Rose Lewis was earning more than $50,000 a year in Mississippi.
Alfred Lewis faces up to 10 years in prison for the theft count, Rose Lewis faces up to five years in prison for the conspiracy count. They also face three years supervised release, a $250,000 fine and restitution. A sentencing date of November 23, 2015 was set.
Veterans Affairs, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan is prosecuting the case.
Federal inmate sentenced for possessing a weaponRead the Press Release
efield, W.Va. –United States Attorney Booth Goodwin announced today that a federal inmate was sentenced by Senior United States District Judge David A. Faber in Bluefield. Rico Joy, 34, was sentenced to 15 months in federal prison for possession of contraband by an inmate. Joy pled guilty in July of 2015, admitting that on April 21, 2015, he had a handcrafted weapon known as a “shank” while he was serving a sentence at the Federal Correctional Institution at McDowell. The sentence imposed by Judge Faber will run consecutively to the 240-month sentence Joy is serving for being a felon in possession of a firearm.
The case was investigated by the Federal Bureau of Prisons and was prosecuted by Assistant United States Attorney John File.
Father and Son Among Four People Indicted in $2.9 Million Ponzi Scheme Involving Bogus Mortgage Sales in North SuburbsRead the Press Release
CHICAGO — A father and son schemed with a Chicago attorney and a Lincolnwood businessman to sell $2.9 million in phony mortgages to more than a dozen duped investors, according to a federal indictment unsealed Tuesday.
ALBERT ROSSINI, 67, the owner of Devon Street Investments Ltd., in Lincolnwood, plotted with BABAJAN KHOSHABE, 74, and Khoshabe’s son, ANTHONY KHOSHABE, 33, to fraudulently induce at least 15 victims into purchasing purported mortgage notes on apartment buildings in foreclosure, according to the indictment. The trio promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process, the indictment states. In reality, the trio did not own the mortgage notes, and instead used the victims’ funds to make Ponzi-type payments to other investors and pocket the rest, according to the indictment.
A fourth defendant, THOMAS MURPHY, 61, was a licensed Illinois attorney who claimed to validate the sale of the mortgage notes through a phony “Guaranty Agreement” that he prepared and gave to Rossini to present to the victims, according to the indictment.
The 14-count indictment was filed Thursday and unsealed this morning. The four defendants are scheduled to appear for an arraignment at 3:00 p.m. today before U.S. Magistrate Judge Mary M. Rowland.
Rossini, of Skokie, was charged with eleven counts of wire fraud and three counts of mail fraud. Babajan Khoshabe, of Chicago, was charged with eight counts of wire fraud and three counts of mail fraud. Anthony Khoshabe, of Skokie, was charged with five counts of wire fraud and three counts of mail fraud. Murphy, of Chicago, was charged with eleven counts of wire fraud and three counts of mail fraud.
According to the charges, the scheme has been ongoing since approximately September 2011. Rossini and Babajan Khoshabe allegedly told prospective investors that Anthony Khoshabe managed the mortgaged properties through his position at Reliant Management, which shared office space with Devon Street Investments. Anthony Khoshabe would purportedly collect monthly rents from the buildings’ occupants and turn them over to investors. What the defendants failed to reveal is that Reliant Management did not manage the properties, and Anthony Khoshabe had no legal ability to collect the rents, the indictment states. The periodic payments made to investors were actually derived from funds that other investors had pledged into the scheme.
The indictment seeks forfeiture of $2,922,564 in cash, three certificates of deposit totaling $700,000, two properties in Skokie and one property on the North Side of Chicago.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Antonio Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago; and Cook County Sheriff Thomas J. Dart.
The wire and mail fraud counts carry a maximum penalty of 20 years in prison and a $250,000 fine, plus mandatory restitution. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorney Erik A. Hogstrom and Special Assistant U.S. Attorney William Novak.
Individuals or corporate entities who believe they could be a victim of the scheme charged in the indictment are encouraged to contact the FBI’s Chicago office at (312) 421-6700.
Indictment
Dallas Check Cashing Business Owner Admits Conspiring to Launder Monetary InstrumentsRead the Press Release
DALLAS — A man who owned and operated a check cashing business in Dallas appeared today in federal court before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to a superseding information charging one count of conspiracy to launder monetary instruments, announced U.S. Attorney John Parker of the Northern District of Texas.
Obinna Njoku, who was the sole director of All Ways Insurance Group, LLC, and who owned and operated All-Ways Check Cashing, Inc., according to the factual resume filed in the case, faces a maximum statutory sentence of five years in federal prison and a $250,000 fine. He will also be required to forfeit approximately $194,294 in funds that the government has seized from his Comerica Bank accounts. A sentencing date was not set; he will remain on bond.
According to the factual resume filed in the case, from January through April 2012, Njoku was asked by several individuals to cash, through All-Ways, numerous checks purporting to be federal income tax refunds and appearing to be issued to individuals residing in the Dallas area. The individuals asking Njoku to cash these checks brought “batches” of checks, often eight to 12 at a time, to Njoku at the All-Ways location on Forest Lane in Dallas. These “batches” of checks often had consecutive numbers, and each check was always for less than $10,000. The individuals who brought the checks to Njoku to cash were not the individuals to whom the checks were payable. In addition, the total amount of each batch of checks presented to Njoku, as well as the amount of cash released to the respective individual presenting the “batch” of checks, was usually well over $10,000.
Njoku believed, according to the factual resume, that the individuals asking for the checks to be cashed had prepared and filed federal income tax returns for the persons to whom the checks were issued. Njoku suspected that the individuals cashing the checks had illegally obtained higher federal income tax refunds, using improper credits and falsely inflated deductions, for the purported payees on the checks. While he believed the checks were likely derived from criminal activity involving fraudulent federal tax returns, Njoku did not ask or seek details. Further, he did not investigate or confirm that the individuals presenting the checks had been involved in preparing tax returns for the check payees or had any business relationship with the payees. Instead, Njoku deliberately blinded himself to what he suspected was the source of the checks and through All-Ways, caused the checks to be deposited into Comerica Bank accounts and caused funds to be withdrawn from Comerica Bank accounts to give to the individuals presenting the checks. As his commission for cashing the checks, Njoku kept 25% to 35% of the overall amount of each check “batch” presented to him for cashing. This commission was much higher than the usual 3% to 5% commission he collected for other checks presented at All-Ways for cashing.
The factual resume states that these checks presented to Njoku for cashing during this time were derived from fraudulently filed federal income tax returns. The payees on these checks had their identities stolen by individuals who then used the information to file fraudulent federal tax returns with and make fraudulent refund claims of the Internal Revenue Service. The total amount of the checks obtained through wire fraud and cashed by Njoku through All-Ways was at least $300,000.
Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorney John J. de la Garza is in charge of the prosecution.
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Council Bluffs Resident Sentenced to 60 Months on Charge of Possession of a Firearm by a Prohibited PersonRead the Press Release
COUNCIL BLUFFS, IA- On August 24, 2015, David Allen Brensel, a 60 year-old resident of Council Bluffs, Iowa, was sentenced by United States District Court Chief Judge John Jarvey to serve 60 months in prison on the charge of possessing a firearm after a felony conviction, announced United States Attorney Nicholas A. Klinefeldt. Judge Jarvey also ordered Brensel to serve a term of three years of supervised release after he completes his term of imprisonment.
Brensel pleaded guilty to the charge of possession of a firearm by a convicted felon on January 8, 2015. When pleading guilty, Brensel admitted being responsible for the theft of four firearms from a residence in Red Oak, Iowa, and then transporting them to Council Bluffs, Iowa, where he sold them.
The investigation was conducted by the Red Oak, Iowa, Police Department, the Council Bluffs, Iowa, Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Convicted Sex Offender Faces 20 Years in Federal Prison on Federal Child Pornography ConvictionRead the Press Release
DALLAS — Erick Fernando Duarte, 58, of Garland, Texas, appeared in federal court today before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to one count of possession of child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
Duarte, who has been in federal custody since his arrest in May 2015, faces a statutory penalty of not less than 10 years and up to 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. Sentencing is set for December 7, 2015, before U.S. District Judge David C. Godbey.
According to documents filed in the case, in April 2014, a detective with the Garland Police Department received information from the National Center for Missing and Exploited Children (NCMEC) that child pornography had been uploaded to an AOL account by a specific AOL email user. Based on this, subscriber information, and information reported on his updated sex offender registry, Duarte was identified as the user.
A search warrant was secured and executed for Duarte’s residence and cell phone. A review of his cell phone and other media revealed that he had more than 1200 images of child pornography, including images of prepubescent children involved in sex acts, on his cell phone. Duarte admits that some of the images depicted sadistic and/or violent content.
Duarte was convicted in the 265th Judicial District Court of Dallas County, Texas, in October 1995, for the felony assault of Sexual Assault of a Child.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI and the Garland Police Department are investigating the case. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.
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Co-Founder of OXYwater and Wife Sentenced for Wire Fraud, Money Laundering and Tax CrimesRead the Press Release
A husband and wife residing in Lewis Center, Ohio, were sentenced to prison in U.S. District Court today for their roles in a fraud scheme related to the company Imperial Integrative Health Research and Development LLC (Imperial) and its product, OXYwater, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carter M. Stewart of the Southern District of Ohio.
Preston J. Harrison, 43, and Lovena Harrison, 42, were sentenced by U.S. District Judge Gregory L. Frost of the Southern District of Ohio. Preston Harrison was sentenced to serve 83 months in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the Internal Revenue Service (IRS) and $8,840,706 to victims of the fraud, and to forfeit $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account. Lovena Harrison, Preston Harrison’s wife, was sentenced to serve one year and one day in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the IRS.
“The sentences imposed today reflect the department’s commitment to investigating and vigorously prosecuting individuals who defraud investors, misappropriate funds to finance lavish lifestyles and file false tax returns to conceal their ill-gotten gains,” said Acting Assistant Attorney General Ciraolo. “Like the Harrisons, those who engage in such conduct will pay a heavy price.”
The couple went to trial in March and were convicted of multiple crimes. Preston Harrison’s business partner, Thomas E. Jackson, 40, of Powell, Ohio, was also convicted at trial for his role in the scheme and is scheduled to be sentenced on Oct. 1. Preston Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, conspiracy to commit wire fraud, conspiracy to commit money laundering and 12 counts of money laundering. Lovena Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, and structuring financial transactions to evade currency reporting requirements. Jackson was convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, eight counts of wire fraud and 12 counts of money laundering.
“Preston Harrison and his co-conspirators made OXYwater appear to be a lucrative and profitable financial investment, touting investments and endorsements from athletes, a musician and others,” said U.S. Attorney Stewart. “After they convinced folks to invest, they misappropriated that money to fuel their own lavish lifestyle, buying items like jewelry, luxury vehicles, weapons and swimming pools.”
“Today’s sentencings mark the successful end of an investigation that uncovered an investment fraud scheme laced with a web of financial lies that generated millions of dollars through false promises and deceit,” said Acting Special Agent in Charge Troy N. Stemen of the IRS-Criminal Investigation (CI) Cincinnati Field Office. “Investment fraud schemes are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible.”
“The Harrisons and their business partner took advantage of unsuspecting investors to line their own pockets,” said Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division. “Hopefully they will now understand that their irresponsible actions have real consequences.”
According to court testimony, Jackson and Preston Harrison operated Imperial, based in Westerville, Ohio, and developed OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in Imperial about Imperial and OXYwater’s structure, composition, finances, sales and profits in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Preston Harrison produced and sent false and fraudulent documents intended to deceive investors in order to obtain additional investments in Imperial. They then misappropriated that money for their own personal use, including the purchase of jewelry, a Cadillac Escalade, a BMW vehicle, weapons, clothing, home improvements and a swimming pool.
Between August 2010 and spring 2013, Jackson and Preston Harrison misappropriated approximately $2 million of the investors’ funds. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
In 2011, Preston Harrison misappropriated approximately $1.1 million from Imperial, which he and Lovena Harrison diverted into an account in the name of a daycare business and used for personal expenses. The Harrisons did not report the money as income on their 2011 income tax return.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended special agents of IRS-CI and FBI, who investigated the case, as well as Assistant U.S. Attorney Jessica Kim of the Southern District of Ohio and Trial Attorney Jason Scheff of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Co-Founder of OXYwater and Wife Sentenced for Wire Fraud, Money Laundering and Tax CrimesRead the Press Release
WASHINGTON – A husband and wife residing in Lewis Center, Ohio, were sentenced to prison in U.S. District Court today for their roles in a fraud scheme related to the company Imperial Integrative Health Research and Development LLC (Imperial) and its product, OXYwater, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carter M. Stewart of the Southern District of Ohio.
Preston J. Harrison, 43, and Lovena Harrison, 42, were sentenced by U.S. District Judge Gregory L. Frost of the Southern District of Ohio. Preston Harrison was sentenced to serve 83 months in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the Internal Revenue Service (IRS) and $8,840,706 to victims of the fraud, and to forfeit $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account. Lovena Harrison, Preston Harrison’s wife, was sentenced to serve one year and one day in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the IRS.
“The sentences imposed today reflect the department’s commitment to investigating and vigorously prosecuting individuals who defraud investors, misappropriate funds to finance lavish lifestyles and file false tax returns to conceal their ill-gotten gains,” said Acting Assistant Attorney General Ciraolo. “Like the Harrisons, those who engage in such conduct will pay a heavy price.”
The couple went to trial in March and were convicted of multiple crimes. Preston Harrison’s business partner, Thomas E. Jackson, 40, of Powell, Ohio, was also convicted at trial for his role in the scheme and is scheduled to be sentenced on Oct. 1. Preston Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, conspiracy to commit wire fraud, conspiracy to commit money laundering and 12 counts of money laundering. Lovena Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, and structuring financial transactions to evade currency reporting requirements. Jackson was convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, eight counts of wire fraud and 12 counts of money laundering.
“Preston Harrison and his co-conspirators made OXYwater appear to be a lucrative and profitable financial investment, touting investments and endorsements from athletes, a musician and others,” said U.S. Attorney Stewart. “After they convinced folks to invest, they misappropriated that money to fuel their own lavish lifestyle, buying items like jewelry, luxury vehicles, weapons and swimming pools.”
“Today’s sentencings mark the successful end of an investigation that uncovered an investment fraud scheme laced with a web of financial lies that generated millions of dollars through false promises and deceit,” said Acting Special Agent in Charge Troy N. Stemen of the IRS-Criminal Investigation (CI) Cincinnati Field Office. “Investment fraud schemes are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible.”
“The Harrisons and their business partner took advantage of unsuspecting investors to line their own pockets,” said Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division. “Hopefully they will now understand that their irresponsible actions have real consequences.”
According to court testimony, Jackson and Preston Harrison operated Imperial, based in Westerville, Ohio, and developed OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in Imperial about Imperial and OXYwater’s structure, composition, finances, sales and profits in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Preston Harrison produced and sent false and fraudulent documents intended to deceive investors in order to obtain additional investments in Imperial. They then misappropriated that money for their own personal use, including the purchase of jewelry, a Cadillac Escalade, a BMW vehicle, weapons, clothing, home improvements and a swimming pool.
Between August 2010 and spring 2013, Jackson and Preston Harrison misappropriated approximately $2 million of the investors’ funds. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
In 2011, Preston Harrison misappropriated approximately $1.1 million from Imperial, which he and Lovena Harrison diverted into an account in the name of a daycare business and used for personal expenses. The Harrisons did not report the money as income on their 2011 income tax return.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended special agents of IRS-CI and FBI, who investigated the case, as well as Assistant United States Attorney Jessica Kim of the Southern District of Ohio and Trial Attorney Jason Scheff of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Chinese Citizen Sentenced to 18 Months in Prison for Attempt to Export Restricted TechnologyRead the Press Release
A 41-year-old citizen of the People’s Republic of China was sentenced today in U.S. District Court in Seattle to 18 months in prison for Conspiracy to Violate the Arms Export Control Act, announced United States Attorney Annette L. Hayes. YUE WU was arrested October 23, 2014, as he prepared to leave the United States from the San Francisco International Airport. WU had made an unrelated visit to the United States after spending more than two years attempting to obtain a type of accelerometer which is restricted for export from the U.S. At the sentencing hearing U.S. District Judge Richard A. Jones said, “Any time the national security of the United States is implicated, as it was here, that makes it a very serious offense for this and every other federal court.”
According to records filed in the case, in January 2012, WU began his efforts to obtain a type of accelerometer which is used in satellites and spacecraft and can only be exported from the United States if a license is issued by the U.S. State Department. On multiple occasions WU attempted to convince a contact to send the accelerometers to China either disguised in a different export, or via a different country. WU did not know that the person he was working with to obtain the equipment was an undercover law enforcement agent. Over the next two years, via email and telephone communications from China, WU continued to try to get the contact to ship him the accelerometers through various schemes.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The case was prosecuted by Assistant United States Attorney Todd Greenberg.
Carlsbad Woman Sentenced for Violating Federal Narcotics Trafficking LawsRead the Press Release
ALBUQUERQUE – Wanda Jo Bunch, 62, of Carlsbad, N.M., was sentenced yesterday afternoon in federal court in Las Cruces, N.M., to 33 months in federal prison followed by two years of supervised release for her methamphetamine trafficking conviction.
Bunch was arrested on Oct. 16, 2014, on a criminal complaint alleging that she possessed methamphetamine with intent to distribute in Eddy County, N.M., on Sept. 2, 2014. According to the complaint, agents with the Pecos Valley Drug Task Force executed a search warrant on Bunch’s residence where they seized almost 200 grams of marijuana, 92.78 grams of methamphetamine and $4,886.00.
On Jan. 15, 2015, Bunch pled guilty to a felony information charging her with possession of methamphetamine with intent to distribute. Bunch admitted that on Sept. 2, 2014, she possessed methamphetamine in her residence which she intended to deliver to another person.
This case was investigated by the Las Cruces office of the DEA and the Pecos Valley Drug Task Force and was prosecuted by Assistant U.S. Attorney Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office.
The Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Career Offender Sentenced to More Than 12 Years in Federal Prison for Robbing Meriden BankRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MICHAEL MASLAR, 59, of Meriden, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 151 months of imprisonment, followed by three years of supervised release for bank robbery, and for violating the conditions of his supervised release from a prior federal conviction for bank robbery.
According to court documents and statements made in court, on September 22, 2014, MASLAR, wearing a pillowcase with holes cut into it over his head, entered the TD Bank on East Main Street in Meriden, approached the teller counter and demanded that bank employees give him cash in $50 and $100 denominations. MASLAR also stated that he had a gun. Bank employees complied with MASLAR’s demands and gave him $5,658. MASLAR took the money, placed it inside a plastic bag and exited the bank. He was arrested shortly thereafter by Meriden Police.
MASLAR’s criminal history includes two prior federal convictions for bank robbery, as well as convictions for involuntary manslaughter and assault. In March 2003, MASLAR was sentenced in Hartford federal court to 165 months of imprisonment for robbing a bank in Meriden on September 11, 2001. He was released from prison in January 2014, and was on federal supervised release at the time of the September 2014 bank robbery.
MASLAR was been detained since his arrest on September 22, 2014. On March 10, 2015, he pleaded guilty to one count of bank robbery and admitted that he violated the conditions of his supervised release. Judge Shea imposed concurrent sentence of two years of imprisonment for the supervised release violation.
This matter was investigated by the FBI and the Meriden Police Department. The case was prosecuted by Assistant U.S. Attorney Jacabed Rodriguez-Coss.
CMU Student Pleads Guilty to Designing Malware, Selling it on Hacker ForumRead the Press Release
PITTSBURGH – A Carnegie Mellon University student pleaded guilty in federal court to a charge of violating federal laws, United States Attorney David J. Hickton announced today.
Morgan C. Culbertson, 20, of Pittsburgh, Pa., pleaded guilty to one count before United States District Judge Maurice B. Cohill.
According to information presented to the Court, from on or about January 2013 to on or about August 20, 2014, Culbertson participated in a scheme to create and sell malware that could be used to spy on and steal personal information from a Google Android cell phone without the owner’s knowledge. Culbertson crafted a piece of malware ultimately named “Dendroid” which, through the use of a binder, could hide itself within a Google App and then download onto a Google Android phone when the user of that phone downloaded the Google App from a place such as the Google Play Store. Dendroid was designed to avoid detection by anti-virus scanners and Google Play security features and did not affect the functionality of the Google App that it was bound to. Once the malware was downloaded onto a Google Android phone, the malware would connect to a command-and-control server controlled by Culbertson. Dendroid was repeatedly advertised for sale on Darkode with explicit advertisements detailing the malware’s intended capabilities, which included commanding the phone remotely to take photos, intercepting text messages, stealing files, spying on internet browsing history and recording phone calls. In connection with the guilty plea, the court was advised that Culbertson intentionally caused damage without authorization to 10 or more computers.
Judge Cohill scheduled sentencing for Dec. 2, 2015 at 11 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney James T. Kitchen is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Morgan C. Culbertson.
Bridgeport Man Sentenced to 9 Years in Prison for Role in Drug Robbery SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NELSON DIAZ, 26, of Bridgeport, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in New Haven to 108 months of imprisonment, followed by five years of supervised release, for planning to conduct an armed robbery of narcotics stash house.
This matter stems from “Operation Samson,” an initiative headed by the ATF and the Bridgeport and New Haven Police Departments that targeted violent criminals, illegal firearm possession and firearm trafficking. In the spring of 2014, approximately 40 ATF special agents and personnel from Connecticut and across the country were deployed with New Haven and Bridgeport Police to conduct numerous covert operations.
According to court documents and statements made in court, in March 2014, the ATF began an investigation into Carlos “Camby” Colon and Carlos “Joel” Colon, who were known narcotics and firearm traffickers in Bridgeport. Law enforcement also had received information that Joel Colon was interested committing an armed robbery of a drug dealer. During the investigation, which employed the use of an ATF agent working in an undercover capacity, the Colons recruited DIAZ and others to commit an armed robbery of what they believed to be a narcotics stash house of 15 kilograms of cocaine.
On April 11, 2014, DIAZ, the Colons, Humberto Soto, Markus Mendez, Trevor Pierce and Hiram “Gringo” Mojica gathered at a location in Stamford where they believed they would be informed of the address of the narcotics stash house, and would then travel to the stash house to conduct the robbery. All seven were arrested at that time. A search of the car that DIAZ, Pierce and Mojica drove to the location revealed a loaded .40 caliber pistol, an EO Tech sight, black gloves, as well as two rolls of duct tape that DIAZ had recently purchased. A search of the center console of the vehicle that Soto and Mendez drove to the meet location revealed a loaded and 9mm pistol.
Eleven days before he was arrested in this case, DIAZ had pleaded guilty in state court to three counts of sale of narcotics and one count of violating probation for selling heroin on multiple occasions in 2013 while he was on probation for prior drug and gun convictions. He was released on bond prior to reporting to prison.
DIAZ has been detained since April 11, 2014. On March 6, 2015, he pleaded guilty to one count of conspiracy to interfere with commerce by robbery and one count of use of a firearm in furtherance of a crime of violence.
Camby Colon, Joel Colon, Mendez, Soto, Pierce and Mojica also pleaded guilty. On June 17, 2015, Soto was sentenced to 84 months of imprisonment. The other defendants await sentencing.
This case is being prosecuted by Assistant U.S. Attorney Vanessa Richards.
Border Patrol Supervisor Guilty of Stealing Social Security BenefitsRead the Press Release
LAREDO, Texas – A Border Patrol supervisor has entered a guilty plea to stealing his deceased grandmother’s Social Security benefits, announced U.S. Attorney Kenneth Magidson. James J. Doran, 54, entered a guilty plea today before U.S. Magistrate Judge J. Scott Hacker.
At the hearing, Doran admitted he failed to report his grandmother’s death to the Social Security Administration (SSA) in February 2000. After her death, Doran continued to negotiate his grandmother’s monthly widow’s benefits which were being deposited into their joint bank account. He admitted he stole the funds from the time of his grandmother’s death until August 2011. As a result of the illegal behavior, he collected a total of $108,516 in Social Security benefits to which he was not legally entitled.
Doran was permitted to remain on bond pending his sentencing hearing, which will set at a later date before Senior U.S. District Judge Kazen. At the time of sentencing, he will face up to 10 years in federal prison and a possible $250,000 fine.
The charges are the result of an investigation conducted by SSA - Office of Inspector General, Department of Homeland Security - Office of Inspector General and the Bureau of Vital Statistics Fraud Unit. Assistant U.S. Attorney Christopher A. dos Santos is prosecuting the case.
Bergen County, New Jersey, Man Admits Conspiring with Wife to Defraud Two New York Law Firms Out of More Than $7 MillionRead the Press Release
NEWARK, N.J. – A Englewood Cliffs, New Jersey, man today admitted using bogus litigation support companies to obtain millions from two law firms where his wife was a partner, U.S. Attorney Paul J. Fishman announced.
Melvin Feliz, 48, of Englewood Cliffs, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion.
According to documents filed in the case and statements made in court:
Feliz’s wife, Keila Ravelo, 49, also of Englewood Cliffs, worked as a partner at Law Firm 1 from July 1, 2005 through October 2010. She then joined Law Firm 2 as a partner and worked there from October 2010 through November 2014. Feliz admitted that during that time, Feliz and Ravelo formed two limited liability companies, Vendor 1 and Vendor 2, that purported to provide litigation support for both firms, but in fact provided no actual services.
Feliz admitted that from 2008 through July 2014, he and Ravelo controlled the Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1, Law Firm 2 and a client of both firms for work that was never performed. Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2 that Ravelo and Feliz later used for personal expenses.
Over the course of the conspiracy, the law firms paid Vendor 1 and Vendor 2 a combined total of approximately $7.8 million. Feliz admitted that he failed to report the income on his tax returns, including nearly $2,360,000 in illicit profits from 2012 alone.
The charge of conspiracy to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The tax evasion charge is punishable by a maximum potential penalty of five years in prison and $250,000 fine. Sentencing is scheduled for Dec. 14, 2015.
Charges against Ravelo are merely accusations and are still pending. She is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited law enforcement officers of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Carl Kotowski, and law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Andrew Kogan, Brian Urbano and Ronnell Wilson of the U.S. Attorney’s Office Criminal Division; Barbara Ward, Chief of the office’s Asset Forfeiture and Money Laundering Unit; and Assistant U.S. Attorney David Foster of the U.S. Attorney’s Office Special Prosecution’s Division in Newark.
Defense counsel: Jason Orlando Esq., Jersey City, New JerseyMelvin Feliz
Bank Branch Manager Sentenced to over 8 Years in Prison for Armored Truck RobberyRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Valentina Elebesunu, age 50, of Temple Hills, Maryland to 105 months in prison followed by three years of supervised release for conspiring to commit, and committing, an armed robbery of an armored truck. Judge Hazel also entered an order that Elebesunu pay restitution of $272,956.17.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; and Chief Mark A. Magaw of the Prince George’s County Police Department.
Elebesunu was the branch manager at a Bank of America located at 3413 Kenilworth Avenue in Hyattsville, Maryland. According to evidence presented at the five day trial, between mid-November and November 21, 2012, Elebesunu conspired with Damione Lewis – a security guard at the bank, Delacey Brown, Taurian Miller, Adriane Baldwin and Barrington Turner to rob an armored truck that serviced the bank branch. Elebesunu had provided Lewis with inside information about the amount of funds scheduled to be picked up by the armored truck. Lewis then provided that information to the other co-conspirators.
On November 21, 2012, an armored car employee picked up $272,956.17 from the bank. Elebesunu and Lewis were working their respective jobs at the bank at the time. Elebesunu’s co-conspirators were in vans outside the bank. As the employee was taking the money from the bank to the armored truck, Elebesunu’s co-conspirators brandished firearms at the employee, took the money bags to their vans and drove away. The robbery proceeds were later divided between Elebesunu and her co-conspirators.
Damione Lewis, age 36, of New Carrolton, Maryland; Delacey Kinte Brown, age 38, of Landover, Maryland; and Taurian Devon Miller, age 31, and Adrian Baldwin, age 29, both of Washington, DC; and Barrington Turner, age 35, of Forestville, Maryland; have all pleaded guilty to their roles in the robbery. Lewis is scheduled to be sentenced on September 2, 2015. The remaining four defendants were sentenced to between 51 and 96 months in prison.
United States Attorney Rod J. Rosenstein praised the FBI, Prince George’s County Police Department and other members of the Cross Border Task Force for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys William D. Moomau and Bryan E. Foreman, who prosecuted the case.
Attempted Robbers of Jewelry Store SentencedRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Darnell Kenneth-Maurice Brown, 23, Zackary Ian Cender, 19, and Charles Milton Fortune, 22, of East Lansing, Michigan, have been sentenced for their roles in the attempted robbery of Paul Medawar Fine Jewelry that occurred on January 23, 2015, in Grand Rapids. U.S. District Judge Janet T. Neff imposed a sentence of 12 months and one day of imprisonment on Cender, while Brown and Fortune were sentenced last week to 30 months each.
On the morning of January 23, Brown, Cender, and Fortune, along with four men left Lansing for Grand Rapids in two cars for the purpose of robbing a jewelry store in Grand Rapids. They drove by the jewelry store before parking at a nearby apartment complex. They then stole a pickup truck, and Brown, Cender, and three others travelled to the jewelry store in the stolen truck. Fortune and another stayed with the cars at the apartment complex. Once at the store, the driver waited in the truck while four robbers, including Brown and Cender, entered. Brown acted as a lookout while Cender and two others went to jewelry cases containing Rolex watches and began smashing the glass cases with short-handled sledgehammers. Employees and customers fled the showroom. The robbery was disrupted when one of the employees returned to the showroom and fired a weapon in the direction of the robbers. Brown, Cender, and Fortune were apprehended by local police while fleeing the area. The other four conspirators escaped and have yet to be charged.
“This was a carefully planned attempted robbery,” U.S. Attorney Miles said. “The coordination and circumstances of this robbery indicate that these defendants had help. We are asking for the public’s assistance in identifying the other perpetrators of this criminal act and in bringing them to justice.” The U.S. Attorney noted that the public can contact the Federal Bureau of Investigation (“FBI”) at (313) 965-2323 with any information about this case."The audacity with which this robbery was committed posed a substantial threat to the business place and public-at-large, and will not be tolerated,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, along with its law enforcement partners on both sides of the state, is committed to seeing that all of the co-conspirators involved in this case are arrested and brought to justice, and will not stop pursuing them until this is accomplished.”
The FBI and the Kent County Sheriff’s Department are investigating this case. Assistant U.S. Attorneys Justin M. Presant and Daniel Y. Mekaru are prosecuting it.
Attempted Bank Robber Sentenced to Five Years in Federal PrisonRead the Press Release
DALLAS — A Dallas man who admitted that he tried to rob a Bank of America branch in Dallas in 2013 was sentenced yesterday, announced U.S. Attorney John Parker of the Northern District of Texas.
James Samuel Murray, 51, was sentenced by U.S. District Judge David C. Godbey to 60 months in federal prison. He has been in custody since his arrest on a related federal criminal complaint filed in October 2013, shortly after the attempted robbery. Murray pleaded guilty in April 2014 to one count of attempted bank robbery.
According to documents filed in the case, on October 8, 2013, Murray entered the Bank of America located at 6166 Retail Road in Dallas with the intent to rob it. Upon entering the bank, Murray approached a teller and presented a note, which stated, in part, I have a 9 millimetter [sic] Berretta [sic] pistol so do not panick [sic]. … I want all the money out of your register and then go to the day safe or wherever you have to and make sure I get fifty thousand dollars or more and do not waste time! … Also just so you know, I know your full name and where you live and if anything goes wrong with the money I will be seeing you very soon! I did my studying on this bank and you! OK! :-) be happy ok!
The teller, in fear for her life, removed money from the teller drawer and placed it in a bag behind the counter. The teller then exited the teller area with the money and went to a secure area of the bank where she watched Murray’s actions from a monitor. Shortly afterwards, officers with the Dallas Police Department arrested Murray in the bank lobby, and during a search, officers recovered the robbery note. The bag of money was never delivered to Murray.
The FBI Dallas Violent Crimes Task Force and the Dallas Police Department investigated. Assistant U.S. Attorney Keith Robinson prosecuted.
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Anderson Couple Pleads Guilty to Offenses Related to Marijuana CultivationRead the Press Release
SACRAMENTO, Calif. — Anderson residents John Wesley Lane, 35, and Kelsey Ann Lane, 28, pleaded guilty today to charges related to marijuana cultivation and distribution, United States Attorney Benjamin B. Wagner announced. John Lane pleaded guilty to possession with intent to distribute at least 50 kilograms of marijuana, and Kelsey Lane pleaded guilty to concealment of a felony.
According to court documents, on December 13, 2012, law enforcement agents executed federal search warrants at three properties owned, leased, or associated with John and Kelsey Lane: a warehouse in Anderson, the Lanes’ residence, and the California Patients Collective marijuana dispensary in Redding.
From the marijuana manufacturing operation inside the Anderson warehouse, agents seized approximately 2,700 mature marijuana plants, 1,300 marijuana clones, and approximately 40 kilograms of processed marijuana. Agents seized approximately 130 pounds of processed marijuana, numerous firearms, and $51,860 from the couple’s home, and nearly 200 marijuana plants, processed marijuana, concentrated cannabis, edible marijuana, and $4,673 from the marijuana dispensary.
Federal search warrants were again executed in May 2013, after law enforcement learned the Lanes were continuing to grow marijuana. During the execution of the search warrants, agents seized 2,329 mature marijuana plants and 1,724 clones at the warehouse.
The defendants are scheduled to be sentenced by U.S. District Judge John A. Mendez on February 16, 2016. John Lane faces a maximum sentence of 10 years in prison and Kelsey Lane faces up to three years in prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the North State Marijuana Investigation Team, the Siskiyou County Narcotics Task Force, the Drug Enforcement Administration, the Bureau of Land Management, the Alcoholic Beverage Control, Shasta County Sheriff's Office, Trinity County Sheriff’s Office, Shasta Interagency Narcotic Task Force, the California Department of Justice, and the FBI. Assistant U.S. Attorney Justin Lee is prosecuting the case.
Alabama Resident Indicted in Stolen Identity Refund Fraud Scheme Claiming More than $1 Million in Fraudulent RefundsRead the Press Release
An indictment was unsealed yesterday charging an Alabama man with multiple tax-related crimes, including one count of conspiracy to defraud the United States, three counts of wire fraud, four counts of stealing U.S. Treasury funds and four counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
According to the allegations in the indictment, returned by a federal grand jury sitting in Montgomery, Alabama, Tavarious Jackson, of Montgomery County, Alabama, along with several co-conspirators, used stolen personal identification information to prepare and file false federal income tax returns. From about February 2011 through April 2013, the conspirators filed more than 500 false returns that fraudulently claimed more than $1 million in tax refunds.
If convicted, Jackson faces a statutory maximum sentence of 10 years in prison for conspiracy, 20 years in prison for each count of wire fraud, 10 years in prison for each count of stealing government funds and a mandatory minimum sentence of two years in prison for aggravated identity theft. Jackson also faces substantial monetary penalties and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Gregory Bailey and Robert Boudreau of the Tax Division and Assistant U. S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Acoma Pueblo Woman Pleads Guilty to Federal Child Abuse ChargeRead the Press Release
ALBUQUERQUE – Aiela Salvador, 28, a member and resident of Acoma Pueblo, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a misdemeanor child abuse charge.
Salvador was arrested on July 18, 2013, on a criminal complaint alleging that on June 25, 2013, in Cibola County, N.M., she endangered the lives and safety of two children, a 3-year-old and 2-year-old, by passing out due to heavy intoxication and abandoning the children. The children were unkempt and neglected in a house without power or running water, and the two-year-old was found wandering outside the house. The children, who did not suffer bodily injury, were taken to the Acoma Social Services Department. Salvador was subsequently indicted on Aug. 7, 2013, and charged with committing child abuse by placing the children in a situation that may have endangered their lives or health.
During today’s proceedings, Salvador pled guilty to an information charging her with misdemeanor abandonment of a child. Salvador admitted that on June 25, 2013, she abandoned two children when she consumed alcoholic beverages to the point of passing out inside her home. Criminal proceedings of this case were delayed by Salvador’s participation in a pretrial diversion program.
At sentencing, Salvador faces a statutory maximum penalty of 12 months in prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Pueblo Tribal Police Department. Assistant U.S. Attorney David Adams is prosecuting the case.