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Wednesday 1 July 2015
Former Systems Administrator Charged with Intentionally Damaging ComputersRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced that former Georgia-Pacific IT specialist and systems administrator BRIAN P. JOHNSON, age 43, of Baton Rouge, Louisiana, was arrested this morning after his indictment last week by a federal grand jury for intentionally damaging protected computers. The indictment charges that, from February 14, 2014 through February 27, 2014, JOHNSON intentionally damaged protected computers and thereby caused more than $5000 in losses to Georgia-Pacific entities.
In an affidavit filed in support of an application for a warrant to search JOHNSON’s home, FBI Special Agent David B. Clarke alleged that, a few hours after JOHNSON’s employment was terminated by Georgia-Pacific on February 14, 2014, Georgia-Pacific computer systems were attacked from a computer address assigned to JOHNSON. Over the next several days, according to Special Agent Clarke, Georgia-Pacific experienced multiple system failures as a result of continued attacks believed to have been instigated by JOHNSON.
If JOHNSON is convicted of the charged offense, he faces a term of imprisonment of up to ten years and a fine of up to $250,000 or twice the amount of loss suffered by Georgia-Pacific.
United States Attorney Green stated, “Cyber crime is one of the highest priorities of the Department of Justice. Attacks on computer systems threaten our security, our economy, and our privacy. Our office is committed to pursuing cyber criminals and to seeking justice and restitution for the companies and individuals they victimize.”
This matter is being investigated by the United States Attorney’s Office for the Middle District of Louisiana and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys M. Patricia Jones and Ryan R. Crosswell.
NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless he is adjudicated guilty at trial or through a guilty plea.
Former State Senator Leland Yee and Three Others Plead Guilty to RacketeeringRead the Press Release
SAN FRANCISCO – Former State Senator Leland Yee, Brandon Jackson, Keith Jackson, and Marlon Sullivan all pleaded guilty in federal court in San Francisco today to charges that they engaged in racketeering activity announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson. By changing their pleas from “not guilty” to “guilty” the four codefendants now each have acknowledged they have participated in the affairs of an enterprise through a pattern of racketeering activity. Each defendant, all residents of San Francisco, has acknowledged guilt with respect to separate facts.
For his part, Yee, 66, acknowledged that he participated in two criminal enterprises, the Leland Yee for Mayor Campaign 2011 and the Leland Yee for Secretary of State campaign. In connection with these campaigns, Yee admitted he (1) accepted $10,000 in exchange for using his influence as a state senator to assist in the process of obtaining a grant from the California Department of Public Health, (2) conspired to extort money from individuals by suggesting he would cast favorable votes for specific legislation only if the money were paid, (3) accepted a $11,000 bribe in exchange for arranging a meeting with another state senator to discuss specific legislation, (4) conspired with others to purchase weapons in the Philippines and import them illegally into the United States, and (5) provided more than $6,000 in cash to a campaign aide knowing the aide would launder the money by arranging to convert the cash into checks made payable to Yee’s Secretary of State campaign. On January 29, 2015, a federal grand jury indicted Yee under a second superseding indictment with conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(d); conspiracy to obtain property under color of official right, in violation of 18 U.S.C. § 1951(a); honest services conspiracy, in violation of 18 U.S.C. § 1349; scheme to defraud citizens of honest services and wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346; conspiracy to traffic in firearms without a license and to illegally import firearms, in violation of 18 U.S.C. §§ 371, 922(a)(1), and 922(l); and conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). According to his plea agreement, Yee pleaded guilty to the racketeering charge and the remaining charges will be dismissed.
“Mr. Yee must now live with the consequences of betraying the trust that was placed in him when he became a public servant,” said U.S. Attorney Melinda Haag. “It is particularly disappointing and troubling when our elected officials violate their obligation to fairly represent their constituents. This office will continue to devote the resources necessary to ensure that our elected officials govern within the law.”
"Senator Yee's admission of guilt today brings some measure of justice to the true victims of his crimes: the people of the state of California," said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office." When a public official uses his office for personal gain and as a platform for illegal activity, he not only betrays the people who elected him to office, but undermines the core principles of our system of government."
Keith Jackson, 50, was Yee’s political consultant and also pleaded guilty to a single charge of racketeering with respect to the same criminal enterprises: the Leland Yee for Mayor Campaign 2011 and the Leland Yee for Secretary of State campaign. In his plea agreement, Jackson admitted he (1) conspired with Yee to accept payments in exchange for providing official services from Yee in his capacity as a state senator, (2) conspired to extort money from individuals by suggesting he would cast favorable votes for specific legislation only if the money were paid, (3) received bribes on Yee’s behalf, (4) conspired with Yee to purchase weapons in the Philippines and import them illegally into the United States, and (5) reimbursed an individual with $3,000 in cash in exchange for two checks made payable to the Leland Yee for Secretary of State campaign knowing that the transaction constituted money laundering and was in furtherance of a weapons trafficking deal. Jackson was charged with 24 counts in the second superseding indictment (as compared to the 9 charges against Yee). The charges included use of interstate commerce facilities in the commission of murder for hire and conspiracy to distribute and possess with intent to distribute cocaine.
According to Sullivan’s plea agreement, he engaged in a separate criminal enterprise, the Chee Kung Tong (CKT). The plea agreement describes CKT as a predominantly Chinese American association, based in Chinatown in San Francisco, formed primarily for civic purposes to benefit the communities of Chinese immigrants and Chinese Americans. According to the plea agreement, CKT developed both positive legal community functions and criminal functions; “[s]ome members of the CKT were strictly involved the CKT’s legal functions and activities while other] members were also involved in illegal functions and activities.” Sullivan, 30, admitted he conspired with Keith Jackson and Brandon Jackson to purchase cocaine and to complete a murder-for-hire transaction. Sullivan further acknowledged being arrested just as he attempted to complete the cocaine transaction. With respect to the murder-for-hire transaction, Sullivan did not discover until after he agreed to perform the murder that both the person requesting the murder and the target were federal agents. Sullivan told one of the agents he could “‘pull it off’ because nobody would suspect me of being capable of murder, based on the fact that he was a licensed sports agent. Sullivan was referring to the fact that he was a sports agent licensed to represent players of, among other associations, the National Football League. Sullivan agreed to accept $10,000 in exchange for completing the murder. In addition, Sullivan admitted participating with Keith Jackson and Brandon Jackson in a scheme to illegally sell multiple firearms. Here again, Sullivan was unaware he was selling the arms to undercover federal agents. Sullivan was charged in the second superseding indictment with conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(d); conspiracy to distribute and possess with intent to distribute cocaine, in violation of 21 U.S.C. § 846, 841(a)(1) and (b)(1)(A); three counts of dealing firearms without a license, in violation of 18 U.S.C. § 922(a)(1); and use of interstate commerce facilities in the commission of murder for hire, in violation of 18 U.S.C. § 1958.
According to Brandon Jackson’s plea agreement, he too participated in illegal activities through CKT. Jackson, 29, admitted that CKT was engaged in narcotics distribution, assault, robbery, extortion, collection of unlawful debt, murder for hire, money laundering, trafficking in stolen goods, illegal firearm possession, and obstruction of justice. Jackson admitted he tried to arrange for the purchase of 10 kilograms of cocaine from a Colombian supplier. The supplier turned out to be a non-existent person created by a federal agent. Jackson was arrested in Hartford, Connecticut, after flying there to complete the transaction. With respect to the murder-for-hire scheme, Jackson agreed to gather intelligence on the intended target including the target’s “daily routine.” Further, Jackson participated with Keith Jackson and Sullivan in the selling of multiple firearms. Brandon Jackson was charged in the second superseding indictment with conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(d); conspiracy to distribute and possess with intent to distribute cocaine, in violation of 21 U.S.C. § 846, 841(a)(1) and (b)(1)(A); six counts of dealing firearms without a license, in violation of 18 U.S.C. § 922(a)(1); and use of interstate commerce facilities in the commission of murder for hire, in violation of 18 U.S.C. § 1958.
Yee and Keith Jackson remain out of custody pending their sentencing hearings. Sullivan and Brandon Jackson are in custody pending their sentencing hearings. All defendants are scheduled to be sentenced on October 21, 2015, at 10:00 a.m., before the Honorable Charles Breyer, U.S. District Judge, in San Francisco. The maximum statutory penalty for participating in the affairs of an enterprise through a pattern of racketeering activity in violation of 18 U.S.C. § 1962(d) is a 20 years of imprisonment, a fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys William Frentzen, Susan Badger, and S. Waqar Hasib are prosecuting the case with the assistance of Rosario Calderon, Kurk Kosek, Ana Guerra, Marina Ponomarchuk, Victoria Etterer, and Lance Libatique. The prosecution is the result of an investigation by Federal Bureau of Investigation; San Francisco Police Department Gang Task Force; Oakland Police Department; Internal Revenue Service, Criminal Investigation; New York Police Department; and the Mercer County New Jersey Sheriff's Office.
Former State Senate Leader Malcolm Smith and Former Queens GOP Leader Vincent Tabone Sentenced in White Plains Federal Court for Bribery and Fraud Charges Connected to 2013 New York City Mayor’s RaceRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that former New York State Senate leader MALCOLM SMITH was sentenced today to seven years in prison for bribing New York City Republican Party leaders, including Queens County Republican Party Vice Chairman VINCENT TABONE, as part of a scheme to allow SMITH, a Democrat, to run as a Republican candidate for New York City Mayor in 2013 and for his role in obtaining New York State funding for a real estate project in Spring Valley, New York, in exchange for cash bribes paid on his behalf to the New York City Republican Party officials. TABONE was sentenced to 42 months in prison for receiving bribes and witness tampering. Both were convicted after a three-and-a-half week jury trial before U.S. District Judge Kenneth M. Karas, who imposed today’s sentences.
Manhattan U.S. Attorney Preet Bharara said: “Bribes and kickbacks should never play a role in the selection of candidates for public office. By attempting to buy and sell a spot on New York City’s Mayoral ballot, Malcolm Smith and Vincent Tabone corrupted one of the most fundamental tenets of the democratic process, that candidates cannot bribe their way onto a ballot. Today’s sentences make clear that the cost of violating the public trust in this way will be measured in years in a federal prison.”
According to the Complaint and the Indictment filed in federal court and the evidence presented at trial:
The Bribery and Extortion Schemes
SMITH was first elected to the New York State Senate in November 2000, and represented a district within Queens, New York. He was chairman of the Independent Democratic Conference of the State Senate and, among other positions, has served as the State Senate’s minority leader, majority leader, and acting lieutenant governor. From about November 2012, through April 2, 2013, SMITH agreed with former New York City councilman Daniel Halloran, who was convicted in a separate trial, and an undercover FBI agent posing as a wealthy real estate developer (the “UC”), and a cooperating witness (“CW”) to bribe New York City Republican Party county leaders, including TABONE, in exchange for their authorization for SMITH to appear as a Republican candidate for New York City Mayor in 2013, even though SMITH is a registered Democrat.
SMITH participated in two overlapping criminal schemes that involved the payment of bribes to obtain official action. First, SMITH, a registered Democrat, authorized the payment of $110,000 in cash bribes to be paid to leaders of the New York City Republican Party, including TABONE, so that they would allow SMITH to run for mayor on the Republican Party’s ballot line. Second, SMITH agreed to use his influence to help steer at least $500,000 in New York State transportation funding to a real estate project the UC and CW had proposed to develop in Spring Valley, New York, in exchange for the UC and CW paying bribes on SMITH’s behalf to the New York City Republican Party Chairs.
In furtherance of the scheme, SMITH authorized the UC and the CW to meet TABONE, the Executive Vice Chairman of the Queens County Republican Party, Joseph Savino, the Chairman of the Bronx County Republican Party, and other party leaders. During a meeting with the UC, TABONE accepted a $25,000 cash bribe in a dimly lit SUV parked in front of a Manhattan restaurant and agreed to accept another $25,000 after his committee authorized SMITH to compete in the Republican primary. Savino similarly accepted a $15,000 cash bribe and agreed to accept another $15,000 after he voted to authorize SMITH to compete for the Republican ballot line. In return for his efforts in negotiating the bribes, Daniel Halloran accepted $15,500 as a down payment on a “broker’s” fee of at least $75,000 and expected to be appointed First Deputy Mayor if Smith was elected mayor.
Witness Tampering
Shortly before the start of a previously scheduled trial, the Government sought permission from the Court to take the deposition of Philip Ragusa, the former Chairman of the Queens County Republican Party. Ragusa, who was gravely ill at the time, was expected to testify favorably to the Government. Over TABONE’s objections, the Court ordered the deposition to take place. TABONE unexpectedly appeared at Ragusa’s home an hour before the scheduled start of the deposition and attempted to pressure Ragusa not to testify against him.
* * *
SMITH, 58, of Queens, was also sentenced to two years of supervised release. TABONE, 48, of Queens, was sentenced to one year supervised release and ordered to forfeit $25,000. SMITH was ordered to surrender to the Bureau of Prisons on September 21, 2015. TABONE was ordered to surrender October 1, 2015.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and the Rockland County District Attorney’s Office.
This case is being handled by the Office’s White Plains Division and Public Corruption Unit. Assistant United States Attorneys Douglas B. Bloom, Justin Anderson and Perry Carbone are in charge of the prosecution.
Former Silk Road Task Force Agent Pleads Guilty to Extortion, Money Laundering and ObstructionRead the Press Release
Ex-DEA Agent Used Undercover Status to Fraudulently Obtain Digital Currency Worth Over $700,000
A former DEA agent pleaded guilty today to extortion, money laundering and obstruction of justice, which he committed while working as an undercover agent investigating Silk Road, an online marketplace used to facilitate the purchase and sale of illegal drugs and other contraband.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C. Field Office and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C. made the announcement.
“While investigating the Silk Road, former DEA Agent Carl Force crossed the line from enforcing the law to breaking it,” said Assistant Attorney General Caldwell. “Seduced by the perceived anonymity of virtual currency and the dark web, Force used invented online personas and encrypted messaging to fraudulently obtain bitcoin worth hundreds of thousands of dollars from the government and investigative targets alike. This guilty plea should send a strong message: neither the supposed anonymity of the dark web nor the use of virtual currency nor the misuse of a law enforcement badge will serve as a shield from the reach of the law.”
“Mr. Force has admitted using his position of authority to weave a complex veil of deception for personal profit,” said U.S. Attorney Haag. “Mr. Force’s actions put at risk other important investigations and betrayed the trust placed in him by his law enforcement partners and the public. We are grateful for the work done by our federal partners to assist in unraveling this crime.”
“Through following the money in the Silk Road investigation it became clear that the defendant was engaged in wire fraud, money laundering, and other related offenses,” said Chief Weber. “He used his position in the investigation to bring himself significant personal financial gain. This investigation sends a clear message -- no person, especially those entrusted with the public’s trust such as federal law enforcement, is above the law and IRS-CI will use their financial investigative skills to track you down.”
Carl M. Force, 46, of Baltimore, Maryland, pleaded guilty before U.S. District Judge Richard Seeborg of the Northern District of California to an information charging him with money laundering, obstruction of justice and extortion under color of official right. Force’s sentencing hearing is scheduled for Oct. 19, 2015.
Force was a Special Agent with the DEA for 15 years. Between 2012 and 2014, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road. Force was the lead undercover agent in communication with Ross Ulbricht, aka “Dread Pirate Roberts,” who ran the Silk Road.
In connection with his guilty plea, Force admitted that, while working in an undercover capacity using his DEA-sanctioned persona, “Nob,” in the summer of 2013, Force offered to sell Ulbricht fake drivers’ licenses and “inside” law enforcement information about the Silk Road investigation, which information Nob claimed to have accessed through a corrupt government employee. Force admitted that he attempted to conceal his communications with Ulbricht about the payments by directing Ulbricht to use encrypted messaging. Although Force understood these payments, which were made in bitcoin, to be government property, as they constituted evidence of a crime, he admitted that he falsified official reports and stole the funds, depositing the bitcoin into his own personal account and then converting them into dollars. Force admitted that, at the time, the value of the bitcoin he received from Ulbricht was in excess of approximately $100,000.
Force also admitted that he devised and participated in a scheme to fraudulently obtain additional funds from Ulbricht through another online persona, “French Maid,” of which his Task Force colleagues were not aware. Force admitted that, as French Maid, he solicited and received bitcoin payments from Ulbricht worth approximately $100,000 in exchange for information concerning the government’s investigation into the Silk Road.
In connection with his guilty plea, Force also admitted that, in late 2013, in his personal capacity, he invested $110,000 worth of bitcoin in CoinMKT, a digital currency exchange company. Although he did not receive permission from the DEA to do so, he served as CoinMKT’s Chief Compliance Officer. In this role, in February 2014, Force was alerted by CoinMKT to what the company initially believed to be suspicious activity in a particular account. Force admitted that, thereafter, in his capacity as a DEA agent, but without authority or a legal basis to do so, he directed CoinMKT to freeze $337,000 in cash and digital currency from the account and he subsequently transferred the approximately $300,000 of digital currency funds into a personal account that he controlled.
Force also admitted to entering into a $240,000 contract with 20th Century Fox Film Studios related to a film concerning the government’s investigation into the Silk Road. Force admitted that he did not secure the necessary approvals from the DEA to do so.
According to his plea agreement, Force admitted that he had obstructed justice both by soliciting and accepting bitcoin from Ulricht and by lying to federal prosecutors and agents who were investigating potential misconduct by Force and others.
The investigation is ongoing. To date, Force is one of two federal agents charged with crimes in connection to their roles in investigating the Silk Road. Shaun W. Bridges, 32, of Laurel, Maryland, a former Special Agent with the U.S. Secret Service, is charged in a two-count information with money laundering and obstruction of justice related to his diversion of over $800,000 in digital currency that he gained control over as part of the Silk Road investigation. The charges contained in an information are merely accusations, and a defendant is presumed innocent until and unless proven guilty.
The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington, D.C. The following additional components assisted with the investigation: IRS-CI’s New York Field Office, HSI’s Chicago/O’Hare Division, the U.S. Attorney’s Office for the Southern District of New York, the Criminal Division’s Computer Crime and Intellectual Property Section, the Criminal Division’s Office of International Affairs, the U.S. Embassy in Slovenia and the FBI Legal Attaché Office in Tokyo.
The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with assistance from Assistant U.S. Attorney Arvon Perteet.
Force Plea Agreement
Former Silk Road Task Force Agent Pleads Guilty to Extortion, Money Laundering, and ObstructionRead the Press Release
SAN FRANCISCO – Carl M. Force pleaded guilty today to extortion, money laundering, and obstruction of justice in connection with his position as an undercover agent with the Drug Enforcement Administration announced U.S. Attorney Melinda Haag, Assistant Attorney General Leslie R. Caldwell, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C. Field Office and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C.
Force, 46, of Baltimore, had been a Special Agent with the DEA for 15 years. Between 2012 and 2014, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road. Force was the lead undercover agent in communication with Ross Ulbricht, a/k/a “Dread Pirate Roberts,” who ran the Silk Road from the Northern District of California.
In the plea agreement entered today, Force admitted to being on Ulbricht’s payroll in a variety of ways while assigned to investigate Ulbricht and the Silk Road. For example, Force used his official undercover persona, “Nob,” to get Ulbricht to send bitcoin payments in exchange for information, including “insider” law enforcement information; ironically, Force duped Ulbricht into making payments in part by claiming Nob had access to a corrupt government employee. Then, rather than disclose Ulbricht’s payments or turn them over to the government, Force lied on official reports and stole the funds. Force liquidated the digital currency into dollars and had the funds deposited into his own bank account in order to convert the funds to his own personal use. Further, Force also created other unofficial and fictitious personas that he used to extort payment from Ulbricht. For example, Force convinced Ulbricht he was “French Maid” named Carla Sophia who was willing to sell inside law enforcement information about the government’s investigation into the Silk Road in exchange for approximately $100,000 worth of bitcoin. Ulbricht ultimately made the payment and Force, again, stole the funds.
Ulbricht and the government were not the only targets of Force’s scheme: Force also admitted in the plea agreement that he extorted “R.P.,” a California resident. R.P. maintained a digital currency balance with CoinMKT, a California digital currency exchange. Force directed CoinMKT to seize R.P.’s funds despite there being no legal basis to do so. Force then pocketed those sums belonging to R.P., once again transferring them to his own personal digital currency exchange and subsequently converting them to dollars using his personal bank account.
Force also admitted to abusing his position by engaging in a wide array of outside activities without permission while he was a federal agent, all designed to enrich himself. For example, in March 2014, while still employed as a DEA agent, Force entered into a movie contract with Twentieth Century Fox Film Studios related to a movie deal concerning the government’s investigation into the Silk Road. The movie deal called for up to $240,000 in payments to Force. Further, Force also moonlighted as a de facto compliance officer for CoinMKT, the same digital currency exchange involved with Force’s attempt to extort R.P. Force offered to help CoinMKT investigate its customers by using his position as a federal agent and his access to government databases. In addition, Force sent an unauthorized but official Justice Department subpoena to Venmo, a mobile payments company, directing them to unfreeze his own personal account. When Venmo did not comply, Force wrote to another agent suggesting a criminal seizure directed at Venmo’s accounts.
With the proceeds of his criminal activities, Force engaged in a series of complicated transactions, using the bitcoin block chain and several different accounts, all designed to conceal the true source and nature of the proceeds. In today’s plea agreement, Force also admitted he obstructed justice by interfering both with the evidence in the Baltimore case against Ulbricht, and with the San Francisco case into his own illegal acts. For example, Force admitted lying to federal prosecutors and investigators when he, among other things, denied ever using the moniker, “French Maid.” In his agreement with the government, Force has agreed to ask the Judge to impose sentencing enhancements for this obstruction.
“Mr. Force has admitted using his position of authority to weave a complex veil of deception for personal profit,” said U.S. Attorney Haag. “Mr. Force’s actions put at risk other important investigations and betrayed the trust placed in him by his law enforcement partners and the public. We are grateful for the work done by our federal partners to assist in unraveling this crime.”
“While investigating the Silk Road, former DEA Agent Carl Force crossed the line from enforcing the law to breaking it,” said Assistant Attorney General Caldwell. “Seduced by the perceived anonymity of virtual currency and the dark web, Force used invented online personas and encrypted messaging to fraudulently obtain bitcoin worth hundreds of thousands of dollars from the government and investigative targets alike. This guilty plea should send a strong message: neither the supposed anonymity of the dark web nor the use of virtual currency nor the misuse of a law enforcement badge will serve as a shield from the reach of the law.”
“Through following the money in the Silk Road investigation it became clear that the defendant was engaged in wire fraud, money laundering, and other related offenses,” said Chief Weber. “He used his position in the investigation to bring himself significant personal financial gain. This investigation sends a clear message -- no person, especially those entrusted with the public’s trust such as federal law enforcement, is above the law and IRS-CI will use their financial investigative skills to track you down.”
On June 22, 2015, Force was charged in a three-count information with money laundering with predicates of wire fraud and theft of government property, in violation of 18 U.S.C. § 1956(a)(1)(A) and (B); obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2); and extortion under color of official right, in violation of 18 U.S.C. § 1951. Force’s sentencing is scheduled for October 19, 2015, at 2:00 p.m., before the Honorable Richard Seeborg, United States District Judge in San Francisco. The Plea Agreement calls for several sentencing enhancements that the parties agree the Court should impose. The maximum penalty for each count in the information is 20 years and $250,000, but any sentence following conviction would be imposed after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence.
Force is one of two federal agents to be charged with illegal activity in connection with the investigation into the Silk Road. Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the U.S. Secret Service who also was assigned to the Baltimore Silk Road Task Force. Bridges was charged in a two-count information on June 16, 2015 with money laundering with a predicate of wire fraud, in violation of 18 U.S.C. § 1957, and obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2), related to his diversion of over $800,000 in digital currency to which he gained control as part of the Silk Road investigation. In his plea agreement scheduled to be entered before Judge Seeborg on August 31, 2015, Bridges has admitted to the conduct with which he was charged.
The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with the assistance of San Francisco Legal Assistant Daniel Charlier-Smith, Christine Tian and Lance Libatique. Assistant U.S. Attorney Arvon Perteet assisted with Asset Forfeiture aspects of the case. The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington D.C. The prosecution team is also thankful for the assistance of the following components for their support throughout the investigation of this case: IRS Criminal Investigation – New York Field Office, HSI’s Chicago/O’Hare Division, the U.S. Attorney’s Office for the Southern District of New York, the Department of Justice’s Computer Crime and Intellectual Property Section, the U.S. Embassy in Slovenia, and the FBI Legal Attaché Office in Tokyo, Japan.
Former Orleans Parish School Board Employee Pleads Guilty to Conspiracy to Commit Federal Bribery and Honest Services Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ARMER BRIGHT, 51, a resident of Baton Rouge and former employee of the Orleans Parish School Board (“OPSB”), pled guilty today to charges of conspiracy to commit bribery and honest services wire fraud.
According to court documents, BRIGHT admitted that beginning in September 2013 and continuing until January 2015, he and others participated in a conspiracy to commit bribery and honest services wire fraud. BRIGHT admitted that he initiated a scheme to defraud Orleans Parish and its citizens of honest services through bribery and a kickback scheme, whereby IRA THOMAS, an Orleans Parish School Board member, used his public office and official capacity to provide favorable treatment, including attempting to facilitate the awarding of a contract, that was designed to benefit the business and financial interest of an individual who provided him with a bribe and kickback in the form of cash payment disguised as a campaign contribution.
“Today’s guilty plea is the most recent – but not the last – example of our commitment to fighting public corruption,” said U.S. Attorney Polite. “Our investigation in this matter continues.”
BRIGHT faces statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release. U.S. District Judge Susie Morgan set sentencing for September 23, 2015 at 2:00 pm.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorney Sean Toomey is in charge of the prosecution.
Armer Bright Factual Basis.pdf (14.82 KB)
Former Iowa State Researcher Sentenced for Making False StatementsRead the Press Release
Dr. Dong Pyou Han Sentenced to 57 Months Imprisonment for Falsifying HIV/AIDS Research.
DES MOINES, IA – On July 1, 2015, Dr. Dong Pyou Han, age 58, appeared in United States District Court and was sentenced to 57 months in federal prison based on his earlier guilty pleas to two counts of making false statements to the National Institutes of Health. Sentence was imposed by United States Senior District Court Judge James E. Gritzner, announced United States Attorney Nicholas A. Klinefeldt. Judge Gritzner also ordered that Dr. Han serve three years of supervised release following his release from federal prison. Dr. Han will be required to pay $7,216,890.12 in restitution to the National Institutes of Health.
United States Attorney Nicholas A. Klinefeldt stated, "It is important that we stand up not just for punishing the fraud committed against the United States government, but for the research that should be legitimately taking place on this devastating disease."
According to the Indictment, while conducting research on behalf of Iowa State University, Dr. Han falsified scientific data to make it appear an experimental HIV/AIDS vaccine, gp41, neutralized, or controlled, the HIV/AIDS virus in rabbits, when in fact the vaccine did not. The Indictment further alleges that Dr. Han spiked sera samples from gp41-immunized rabbits with human sera containing HIV antibodies. The spiking of the rabbit samples made it appear that gp41 produced neutralizing antibodies against the HIV/AIDS virus. The false data was reported to the National Institutes of Health in a research grant application and funded grant progress reports.
In his plea agreement, Dr. Han admitted he provided false data reported in National Institutes of Health Grant Application, "Enhancing B cell immunity against HIV-1 using novel vaccine delivery platforms" and National Institutes of Health Progress Report, "Characterization of immunogenic and structural properties of HIV-1 envelope." Dr. Han also admitted that data derived from his spiking rabbit sera samples with human antibodies was reported to the National Institutes of Health.
"Taxpayers fund medical research with the hope that promising scientific breakthroughs will result in much-needed treatments and cures for patients. Because the money for medical research is limited and the need for scientific advances is great, funding decisions must be based on the best information available. When Dr. Han faked lab results -- collecting scarce government medical research funding under false presentences -- he recklessly betrayed the public’s trust," said Special Agent in Charge Gerald T. Roy, U.S. Department of Health and Human Services Office of Inspector General. "Researchers who lie about their work will face the consequences."
This case was investigated by the United States Department of Health and Human Services – Office of the Inspector General, the Federal Bureau of Investigation, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Former Healthcare Executive Convicted of Embezzling over $200,000 from Non-Profit OrganizationRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced the conviction of TRAVIS TEMPLET, age 36, of Gonzales, Louisiana, who pled guilty today before U.S. District Judge John W. DeGravelles to engaging in a wire fraud scheme to defraud a non-profit health care organization, in violation of Title 18, United States Code, Section 1343. The defendant faces imprisonment and substantial fines, restitution orders, and forfeiture orders. The sentencing date has not yet been set.
In 2008, the defendant began working as the controller for a non-profit organization headquartered in Baton Rouge that manages nursing homes throughout Louisiana and Arkansas. During today’s hearing, the defendant admitted to using his position as controller to steal more than $208,307 from the organization from 2011 through 2014. He admitted doing so by writing approximately 67 fraudulent checks to himself from the organization’s account. To conceal the fraud, the defendant admitted that he altered the organization’s accounting records and software. He ultimately deposited the proceeds of his fraud into one of his personal accounts.
U.S. Attorney Green stated, “Fraud schemes perpetrated by insiders, particularly those entrusted with an organization’s finances, pose a serious threat to all organizations and, by extension, their employees. Our office will continue to aggressively pursue such matters, along with our federal, state, and local partners. Once identified, these fraudsters must not be allowed to simply move to their next victim employer. Employers and law enforcement must work together to stop them. I applaud the victim organization for uncovering the fraud and assisting in this important matter.”
This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana, the Baton Rouge Office of the United States Secret Service, and the East Baton Rouge Parish Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
Former Correctional Officer Sentenced to over 4 Years in Prison in Baltimore Jail Racketeering ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced former correctional officer Ashley Newton, age 31, of Baltimore, today to 51 months in prison, followed by three years of supervised release, for participating in a racketeering conspiracy and drug conspiracy, involving the smuggling of drugs and contraband inside the Baltimore City Detention Center (BCDC), and for money laundering conspiracy. Newton was convicted on February 5, 2015, after a more than two month long jury trial.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Stephen T. Moyer of the Maryland Department of Public Safety and Correctional Services (DPSCS); Baltimore Police Commissioner Anthony W. Batts; and Baltimore City State’s Attorney Marilyn Mosby.
“Correctional officers were in bed with inmates, in violation of the first principle of prison management,” said U.S. Attorney Rod J. Rosenstein.
“We remain committed to protecting the public, our employees, and the inmates by aggressively rooting out corruption. We applaud the work of the U.S. Attorney and all of our law enforcement partners in this ongoing effort,” said Secretary Stephen T. Moyer of the Maryland Department of Public Safety and Correctional Services.
According to trial testimony and court documents, BGF has been the dominant gang at the Baltimore City Detention Center (BCDC), and in several connected facilities, including the Baltimore Central Booking Intake Center, the Women’s Detention Center, which houses many men, and in the Jail Industries Building. Tavon White and other BGF leaders and members incarcerated at BCDC were involved with and often directed the smuggling of contraband into BCDC, including cell phones, tobacco and drugs, through the services of correctional officers (COs), who received payments, gifts, or a share of the profits.
According to evidence presented at trial, Newton was a correctional officer (CO) at the BCDC who smuggled contraband into the jail for distribution by BGF inmates. In return, Newton and other COs received payments, gifts or a share of the profits.
According to trial evidence and other court documents, Newton smuggled drugs and other contraband for a succession of BGF leaders starting as early as 2008. She had long-term sexual relationships with at least two BGF inmates, including Duron Young, a/k/a Pinky. Newton smuggled pills, marijuana and tobacco for Young, and during the conspiracy, Newton smuggled pills for Pinky almost daily. Newton also opened cells doors of inmates for BGF members. For example, on May 19, 2011, Newton opened a grill that allowed a large number of BGF inmates to attack and repeatedly stab an inmate. In 2012, Young became angry at another inmate, whose offense was that he was transporting a lot of contraband around the prison for people other than Young. Newton opened the door of the inmate’s section to permit Young to go in with another BGF gang member and beat up the inmate. Newton also warned the BGF of upcoming prison searches by correctional officers. Newton arranged for money to be sent to inmates and facilitated phone conversations between inmates, including calls from other prisons to BGF leader Tavon White.
This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services, local, state and federal law enforcement agencies, and prosecutors. The Task Force has met regularly for over three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local and federal criminal investigators. Investigations are continuing.
Forty of the 44 defendants charged in the racketeering conspiracy have been convicted, including 24 correctional officers. Thirty-five defendants pleaded guilty and five defendants were convicted after trial. Three defendants were acquitted and one defendant died.
To date, 22 of the correctional officers, including Newton, have been sentenced to up to 51 months in prison.
BGF leader Tavon White, age 37, pleaded guilty to his participation in the racketeering conspiracy and testified at the trial and was sentenced to 12 years in prison. Inmates and leaders in the BGF gang, Russell Carrington, a/k/ Rutt, age 34, and Joseph Young, a/k/a Monster, age 33, both of Baltimore, were convicted after trial and sentenced to 210 months in prison and 15 years in prison, respectively.
U.S. Attorney Rosenstein recognized the efforts of the other members of the Maryland Prison Task Force, including: the Maryland State Police, Prince George’s County Police Department, United States Marshals Office, DEA, Washington-Baltimore High Intensity Drug Trafficking Area and Maryland Coordination and Analysis Center.
United States Attorney Rod J. Rosenstein praised the FBI, Maryland Department of Public Safety and Correctional Services, Baltimore Police Department, and Maryland Prison Task Force, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Five Individuals Sentenced for Their Role in Medicare and Medicaid Fraud Scheme in Florida, Nicaragua and the Dominican RepublicRead the Press Release
Five residents of Miami-Dade County and one resident of Nicaragua were sentenced yesterday for their participation in a $25.2 million Medicare, Medicaid, and wire fraud scheme. Erendira V. Delgado, a/k/a “Eren Delgado,” 31, of Miami, Edgardo Rodriguez, 47, of Nicaragua, Rodney Montoya, 36, of Miami, Deborah Smith, 53, of Hialeah, and Augustin Abaga, 48, of Sunny Isles, were sentenced by U.S. District Court Judge Federico A. Moreno in Miami.
Delgado was sentenced to 40 months imprisonment. E. Rodriguez was sentenced to 42 months imprisonment. Montoya was sentenced to 48 months imprisonment. Smith was sentenced to 15 months imprisonment. Abaga was sentenced to 18 months imprisonment. Each defendant was sentenced to serve a three year term of supervised release upon completion of their incarceration and pay restitution to the Centers for Medicare and Medicaid Services.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Pam Bondi, Florida Attorney General, Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and David Brown, Acting Special Agent in Charge, U.S. Department of State, Diplomatic Security Service (DSS), made the announcement.
On October 30, 2014, a federal grand jury in Miami returned a 36-count indictment charging Pedro Hernandez, a/k/a “Peter Hernandez,” 51, of Miramar, Freddy Zeron, 52, of Miami and Nicaragua, Delgado, E. Rodriguez, R. Montoya, Santiago Bernabe Montoya, 72, of Miami, Jose Eloy Sanchez, a/k/a “Jose Eloy Sanchez Arguello,” 70, of Coral Gables and Nicaragua, Abram J. Rodriguez, a/k/a “Abe Rodriguez,” 31, of Miami, Mirna L Blanco, 49, of Hialeah, Smith and Abaga for allegedly participating in a scheme to defraud Medicare and Medicaid by submitting false and fraudulent enrollment applications which claimed that beneficiaries resided in Florida when, in fact, they resided in Nicaragua and the Dominican Republic. The defendants were charged with conspiracy to commit health care fraud and wire fraud, substantive counts of health care fraud, conspiracy to defraud the United States and make false statements related to health care matters and substantive counts of making false statements related to health care matters.
Beginning on November 19, 2014, ten of the eleven individuals charged in the Indictment were arrested. Sanchez remains at large and is believed to be in Nicaragua. All ten individuals arrested pleaded guilty in federal court. Hernandez and A. Rodriguez pleaded guilty on Friday, June 19, 2015. Zeron pleaded guilty on Tuesday, June 23, 2015. S. Montoya pleaded guilty on May 14, 2015. They are scheduled to be sentenced on August 27, 2015, at 9:30 a.m. before the U.S. District Court Judge Federico A. Moreno.
Previously, on May 5, 2015, Blanco was sentenced to 24 months imprisonment after pleading guilty to conspiracy to commit wire fraud and health care fraud.
As part of the indictment, a Temporary Restraining Order (TRO) was obtained against A. Rodriguez and Montoya. Pursuant to the TRO, various banks froze over $150,000 that were allegedly held in the defendants’ accounts, in order to enjoin the ongoing fraud and restrain the dissipation of fraudulent proceeds.
According to allegations contained in the indictment, Florida Healthcare Plus (“FHCP”) was authorized by the Centers for Medicare and Medicaid Services to offer Medicare Advantage HMO plans to Medicare beneficiaries residing in Miami-Dade County, among other counties in Florida. The defendants recruited individuals who resided in Nicaragua and the Dominican Republic to enroll in Medicare Advantage plans and Florida Medicaid by falsely and fraudulently representing in enrollment applications that they resided in Florida. In these enrollment applications, the defendants represented that the foreign residents resided in Florida by using non-residential addresses, the addresses of beneficiaries’ friends and relatives, and addresses associated with the defendants. The defendants induced the individuals residing in Nicaragua and the Dominican Republic to enroll in Medicare Advantage plans, including FHCP plans, by making false and fraudulent representations, including that Medicare benefits were available in Nicaragua and the Dominican Republic. As a result of the submission of these false and fraudulent enrollment applications, the defendants caused the Center for Medicare and Medicaid services to make monthly capitation payments to FHCP and other Medicare Advantage plans. The defendants also caused the Florida Medicaid program to pay Medicare premiums and deductibles for many beneficiaries who did not reside in Florida, a benefit for which non-Florida residents would not be entitled.
Additionally, the defendants caused individuals associated with Pharmovisa Inc., Axis Le Professional Medical Group, Inc. (“Axis Le”), and Rodney Montoya Corp. in Miami, where defendant Montoya was employed as a doctor, to be designated as the primary care physicians for the beneficiaries residing in Nicaragua and the Dominican Republic. The defendants paid for the beneficiaries to travel from the Dominican Republic so that they could be seen by a U.S. licensed physician. The physician would then provide diagnoses which were used to calculate the amount of money Florida Health Care Plus and other Medicare Advantage plans would receive from Medicare. As a result of these false and fraudulent enrollment applications, the defendants obtained approximately $25,247,413 from Medicare and Florida Medicaid.
According to the indictment, Hernandez was the chief operating officer of FHCP until May 8, 2013, A. Rodriguez was the marketing director until on or about April 21, 2014. E. Rodriguez, Smith and Abaga were insurance agents employed by FHCP during the time of the scheme occurred. Blanco was employed by FHCP, as well as, Axis Le and Rodney Montoya Corp.
U.S. Attorney Wifredo A. Ferrer stated, “Health care fraud cripples the American social service system by increasing health care costs, stealing taxpayer monies that support the Medicare and Medicaid programs, and robbing individuals of quality of life benefits. This case demonstrates that, with the assistance of law enforcement partners, the U.S. Attorney’s Office is able to successfully combat these fraud schemes even when the offenders move the crime outside our shores.”
“This elaborate $25 million Medicare and Medicaid fraud scheme essentially stole millions of taxpayer dollars, and thanks to my Medicaid Fraud Control Unit and our partnerships with federal authorities, these individuals will be held accountable for their brazen actions,” said Attorney General Pam Bondi.
“Greed does not respect the law, does not concern itself with patient welfare and is not limited by international borders. Medicare patients and American taxpayers deserve better,” said Shimon R. Richmond, Special Agent in Charge, Office of Inspector General of the U.S. Department of Health and Human Services. “Working closely with our partners we will meet this greed at every turn and bring these criminals to justice.”
“These fraudsters attempted to cheat Medicare and Medicaid by falsely claiming that beneficiaries resided in Florida when in fact they were living in Nicaragua and the Dominican Republic. A novel idea, but not enough to thwart the hard work and diligence of the agents investigating this matter,” said George L. Piro, Special Agent in Charge, FBI Miami. “A special thanks goes to the U.S. Embassy Managua for their close cooperation and support.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service places us in the unique position to identify criminals who would defraud the U.S. government,” said David Brown, Acting Special Agent in Charge of the Miami Field Office of the Diplomatic Security Service. “Regardless of where they hide, we are able to work with our law enforcement partners -- both domestically and around world -- to bring these criminals to justice.”
Mr. Ferrer commended HHS-OIG, FBI, the Florida Office of the Attorney General, Medicaid Fraud Control Unit, and DSS for their investigative efforts.
Mr. Ferrer also thanked U.S. Department of State, Diplomatic Security Service, Regional Security Office, at the U.S. Embassies in Managua and Santo Domingo for their assistance with this investigation.
This case, brought as part of the Medicare Fraud Strike Force, under the supervision of U.S. Attorney’s Office for the Southern District of Florida, is being prosecuted by Assistant U.S. Attorney Eric E. Morales and Special Assistant United States Attorney Hagerenesh Simmons.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 2,300 defendants who collectively have falsely billed the Medicare program for more than $7 billion. In addition, the Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Fitchburg Man Sentenced to Seven Years on Federal Drug and Gun ChargesRead the Press Release
BOSTON – A Fitchburg man was sentenced yesterday in U.S. District Court in Worcester for selling heroin to a cooperating witness and being a felon in possession of a firearm and ammunition.
Miguel Rivera, 31, was sentenced by U.S. District Court Judge Timothy S. Hillman to seven years in prison and four years of supervised release. In March 2015, Rivera pleaded guilty to conspiracy to distribute heroin, distribution of heroin, and being a felon in possession of a firearm and ammunition.
Between May 2012 and October 2013, Rivera conspired with another individual to sell one hundred grams of heroin to a cooperating witness, and on Sept. 5 and Oct. 4, 2013, Rivera sold heroin to the cooperating witness. In addition, on Nov. 13, 2012, Rivera, having previously been convicted of a felony, illegally possessed a firearm and ammunition.
The charge of conspiracy and distribution of heroin provides for a minimum mandatory sentence of five years and no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release, and a fine of $5 million. The charge of being a felon in possession of a firearm and ammunition provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; and Fitchburg Police Chief Ernest Martineau, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Michelle Dineen Jerrett of Ortiz’s Worcester Branch Office.
Financial Advisor Charged with Fraud Scheme Totaling More Than $3 MillionRead the Press Release
PHILADELPHIA - An indictment was unsealed today charging Malcolm Segal, 69, of Langhorne, PA, with six counts of mail fraud, and three counts of wire fraud, announced United States Attorney Zane David Memeger. Segal was a financial advisor with Aegis Capital Corporation at the time of the alleged scheme to steal funds from individuals who thought they were investing their money in Certificates of Deposit, and from investors who held funds in brokerage accounts at Aegis.
According to the indictment, between July 2011 and July 2014, Segal told client B.P. that Mercantile Bank and Bear Stearns were offering Certificates of Deposit (CDs) that were paying an annual interest rate of up to 12% with a minimum two-year investment of $100,000. Segal allegedly told individuals that he could sell them these CDs through Aegis. The indictment alleges that Segal accepted at least $100,000 from each of six victims, represented that he had purchased CDs on their behalf when he had not, mailed fraudulent deposit confirmations from National CD Sales Inc. to the victims, and mailed the victims checks which he represented as interest payments. According to the indictment, Segal used his victims’ money to pay personal expenses and to pay off other investors instead of purchasing CDs on behalf of the victims as promised. Segal allegedly stole an aggregate total of approximately $1,885,067.10 from the victims, representing the purchase price of the CDs less the purported interest payments. The indictment also alleges that Segal stole approximately $1,218,183.60 from the brokerage accounts of three of his clients at Aegis by making unauthorized wire transfers of funds from those brokerage accounts to a bank account controlled by Segal.
If convicted of all charges, Segal faces a potential advisory guideline sentencing range of 57 to 71 months in prison with a statutory maximum sentence of 180 years in prison.
The case was investigated by FBI and the United States Postal Inspection Service, and is being prosecuted by Assistant United States Attorney Joel D. Goldstein.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Federal Jury Convicts Absarokee Man of Firearms ChargeRead the Press Release
BILLINGS – An Absarokee man, Christopher Michael Emter, 37, has been convicted of being a felon in possession of a firearm following a jury trial in Billings, Montana. Emter is being detained pending sentencing, which U.S. District Court Judge Susan Watters set for October 7, 2015.
On January 12, 2013, a Billings resident notified law enforcement that his vehicle had been broken into and that two firearms had been stolen. One of the weapons stolen was a Sig Sauer .40 caliber pistol. On February 8, 2013, the Stillwater County Sheriff’s Office conducted an investigation into nine vehicles, which had been broken into and had items stolen from them while parked at the Stillwater Mine in Absarokee, Montana. Subsequent investigation revealed that credit cards taken from the vehicles had been used in local gas stations. Videos from that time period were reviewed and helped investigators determine that Emter was the prime suspect.
A search warrant was issued and executed on February 14, 2013, for Christopher Emter’s residence. Many items stolen from the Stillwater Mine vehicles were recovered. Additionally, the Sig Sauer pistol stolen in Billings in January was found at the residence. Prior to the search of the bedroom, Emter was found digging around in the closet and not responding to officer’s commands to show his hands. Officers located the Sig Sauer pistol in a tote in the closet. After the pistol was found, Emter fled the residence but was detained shortly thereafter. Emter is prohibited from possessing a firearm because of a prior felony criminal endangerment conviction in Yellowstone County.
Assistant U.S. Attorney Mike Lahr prosecuted the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Stillwater County Sheriff’s Office.
Former V.i. Army National Guard Major Convicted by Jury for Wire FraudRead the Press Release
St. Thomas, USVI – After a three-day trial, a federal jury found former Virgin Islands National Guard Major Sherrymae Morales, 54, guilty of 21 counts of wire fraud, United States Attorney Ronald W. Sharpe announced today.
DistrictCourt Judge Curtis V. Gomez set the sentencing hearing for October 20, 2015. Morales was ordered to self-surrender to the United States Marshals Service on July 15, 2015, at 3 p.m.
According to evidence presented at trial, from 2010 until 2011, Morales was employed as a full-time employee with the Virgin Islands National Guard (VING) on St. Croix. At the same time she was employed as a full-time VING employee, Morales also held a full-time contract position with the Military Personnel Services Corporation (MPSC), which provides employee support services to members of the VING. Evidence presented at trial demonstrated that Morales submitted time sheets to both the MPSC and VING for the same 40-hour work weeks over a period of 14 months.
Morales faces a maximum sentence of 20 years imprisonment and fines of up to $250,000 on each count of conviction. The case was investigated by the United States Army Criminal Investigation Command-Major Procurement Fraud Unit, Defense Criminal Investigative Service and U.S. Immigration and Customs Enforcement's Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Everard E. Potter.
Executives Sentenced in Multi-Million Dollar Loan Fraud SchemeRead the Press Release
BOSTON – Two executives of a purported financing company were sentenced yesterday in U.S. District Court in Boston in connection with a multi-year scheme to defraud loan applicants of millions of dollars.
Damien John Hess, 37, of Laguna Niguel, Calif., was sentenced by U.S. District Chief Judge Patti B. Saris to 51 months in prison, three years of supervised release, and ordered to pay restitution of $2,881,925 and forfeiture. In November 2014, Hess pleaded guilty to one count of conspiracy to commit wire fraud and seven counts of wire fraud.
Lucas Ford, 38, of Post Falls, Idaho, was sentenced by Chief Judge Saris to three years of probation, with 10 months to be served in a halfway house. In June 2014, Ford pleaded guilty to conspiracy to commit wire fraud.
Hess was the chief executive officer and Ford the chief operating officer of Quest Capital Finance, a purported financing company that was, in reality, a front used to steal millions of dollars from prospective borrowers. As part of the scheme, Hess and Ford and others at Quest told applicants that, in order to obtain the promised loans, the applicants first needed to pay several hundred thousand dollars into a third-party escrow account where the money would be held until all contingencies for the loans were resolved. From 2008 through 2011, Hess and Ford used this approach to persuade businesses and individuals to put millions of dollars into escrow as deposits towards future loans. Hess, Ford, and others at Quest promised the borrowers that the deposits would not be moved out of escrow until the loans were funded. Instead, Hess transferred much of the money to Quest or to his own personal accounts while never actually arranging any financing. Quest never refunded the deposits.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. The case was prosecuted by Assistant U.S. Attorneys Sara Miron Bloom of Ortiz’s Economic Crimes Unit, Patrick Callahan of the Civil Division, and Doreen Rachal of the Asset Forfeiture Unit.
Evelyn Jean Vickers Sentenced to 110 Months on A-PVP ChargesRead the Press Release
GREENEVILLE, Tenn. – Evelyn Jean Vickers, 39, of Kingsport, Tenn., was sentenced on June 30, 2015, by the Honorable R. Leon Jordan, U.S. District Court Judge, to a federal prison term of 110 months for her role in an extensive a-PVP (alpha-pyrrolidinopentiophenone) distribution conspiracy centered in and around the Sullivan County area and for being a convicted felon in possession of a firearm. A-PVP is a synthetic drug which is commonly referred to on the street as “gravel” or “flakka.”
Vickers’s federal sentence was ordered to run consecutively to her sentences and probation revocations in Sullivan County General Sessions Court as well as any sentence that may be imposed in Sullivan County Circuit Court.
According to the plea agreement on file with the U.S. District Court Clerk, Vickers admitted that she conspired to distribute and was accountable for a conservative estimate of 5,200 grams of a-PVP between March 2012 and March 2014. In December 2013, Vickers, who was already a convicted felon, was arrested while in possession of a .22 caliber pistol in a room at a hotel in Kingsport, Tenn. Vickers admitted that she was one of the primary a-PVP distributors for co-defendant, Richard Hillman, 54, of Kingsport, Tenn., and for portions of the conspiracy, she sold an ounce of a-PVP per day.
Hillman is currently scheduled to be sentenced on August 13, 2015. Others who have been previously sentenced in this a-PVP trafficking investigation include Austin Michael Stallard, Johnny Michael Stallard, Phillip Wayne Mullins and Johnny White, who were respectively sentenced to serve 121 months, 180 months, 151 months and 120 months in federal prison.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Vickers and her co-defendants include the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Homeland Security Investigations, Sullivan County Sheriff’s Office, Kingsport Police Department, Hawkins County Sheriff’s Department, Johnson City Police Department, Greeneville Police Department, Hendersonville, North Carolina Police Department, and Scott County, Virginia Sheriff’s Office. Assistant U.S. Attorney Wayne Taylor represented the United States.
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Elyria man charged with theft of government fundsRead the Press Release
A criminal information was filed charging Edward Erickson, 68, of Elyria, with theft of government money and property, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Erickson is accused of illegally receiving low-income pension payments from the Department of Veterans Affairs in the amount of $57,024, according to the information.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Department of Veterans Affairs, Office of Inspector General-Criminal Investigations Division, Cleveland Resident Agency. The case is being handled by Assistant United States Attorneys Noah P. Hood and Gene Crawford.
District Court Enters Permanent Injunction against New Jersey Drug Manufacturer and its President to Stop Distribution of Unapproved and Misbranded DrugsRead the Press Release
The U.S. District Court for the District of New Jersey entered a consent decree of permanent injunction against Acino Products LLC, of Hamilton, New Jersey, and its president, Ravi Deshpande, to prevent the distribution of unapproved and misbranded drugs, the Department of Justice announced today.
Acino manufactures and distributes hydrocortisone acetate suppositories under the brand names Rectacort-HC and GRx HiCort 25. Deshpande is Acino’s president and is responsible for, and has authority over, all operations at the firm.
The department filed a complaint in the U.S. District Court for the District of New Jersey at the request of the U.S. Food and Drug Administration (FDA), alleging that the company’s suppositories are not approved by the FDA and that they are misbranded because they do not bear adequate directions for use as required by law.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from committing violations of the federal Food, Drug and Cosmetic Act. The consent decree requires the drug manufacturer to cease all manufacture and distribution of the unapproved and misbranded suppositories, and to destroy any such suppositories already in existence.
“The department will not hesitate to bring enforcement actions against manufacturers who do not follow the necessary procedures to comply with our nation’s drug safety laws,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division.
“Companies that manufacture and distribute drugs must comply with FDA regulations,” said FDA Associate Commissioner Melinda Plaisier of Regulatory Affairs. “Acino repeatedly violated federal law through their actions. We must continue to oversee manufacturers to ensure that patients have access to safe and effective approved drugs.”
The FDA has conducted at least three inspections of the facility between Feb. 6, 2014, and March 5, 2014; Aug. 7, 2014, and 19, 2014; and Jan. 12, 2015, and 25, 2015.
According to the complaint, during the February/March 2014 inspection, FDA investigators documented the company’s manufacturing of hydrocortisone acetate suppositories on behalf of Ascend Laboratories LLC. The complaint alleges that at the conclusion of the inspection, Deshpande indicated that he was aware that the suppositories were being marketed by Ascend as prescription drugs without FDA approval.
In May 2014, the government conducted a seizure of certain unapproved and misbranded drugs that were being distributed by Ascend, including suppositories that Acino had manufactured for Ascend. The government notified Acino and Deshpande of the seizure by a letter dated May 15, 2014. According to the complaint, the letter made clear that the suppositories were unapproved and misbranded drugs, however, Acino and Deshpande continued to manufacture the products.
According to the complaint, at the conclusion of the August 2014 and January 2015 inspections, FDA investigators again discussed the unapproved status of the hydrocortisone acetate 25 mg suppositories with Deshpande, who indicated that he was aware of the need to pursue FDA approval for the drug. As alleged in the complaint, to date, Acino and Deshpande have not filed the necessary application with the FDA to gain approval for the unapproved drug products.
The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Yen Hoang of the Department of Health and Human Services’ Office of General Counsel – Food and Drug Division, and Assistant U.S. Attorney Bernard J. Cooney of the District of New Jersey.
Dallas-Area Woman Sentenced for Conspiracy to Trafficking Minor into the New Orleans-AreaRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANDREA BIRDOW, age 24, from Sherman, Texas, was sentenced today after pleading guilty to conspiring with her boyfriend, TAUREAN JACKSON, to traffick a minor from the Dallas area into the New Orleans area for the purposes of that minor engaging in prostitution.
U.S. District Judge Susie Morgan sentenced BIRDOW to time served, followed by one year of supervised release.
According to court documents, BIRDOW met JACKSON, the creator and host of a Dallas-area radio program entitled, “Cheap Hoes Gotta Go,” in 2012, after JACKSON recruited her to join “Star City Vixens,” an entity he created to foster and promote prostitution. JACKSON became BIRDOW’s pimp and arranged for her to engage in sexual acts with others in exchange for money. JACKSON was responsible for advertising and scheduling prostitution calls with BIRDOW. JACKSON kept all, or most, of the proceeds from the prostitution calls. As a means of controlling BIRDOW’S behavior and ensuring her compliance, JACKSON beat and choked BIRDOW on multiple occasions, often in front of others. On several occasions, JACKSON burned BIRDOW with lit cigarettes to discipline her.
In mid-June 2013, JACKSON and BIRDOW met the victim, who was then 16-years-old, in the Dallas area and recruited her to begin working for JACKSON as a prostitute. Over the course of the next several weeks, JACKSON and BIRDOW drove the victim throughout Texas and Louisiana for the purpose of BIRDOW and the victim engaging in prostitution, which JACKSON advertised and arranged using an online classified advertisement. JACKSON arranged for the victim to watch BIRDOW engage in prostitution acts as a means of educating
her on the best way to perform sexual acts. To control the victim’s behavior, JACKSON beat BIRDOW in front of the victim, warning that he would do the same to the victim if she tried to leave him, and separately beat the victim with an extension cord. Ultimately, BIRDOW and the victim were arrested on July 10, 2013, in a Metairie hotel room by undercover law enforcement officers who responded to an online classified advertisement offering a prostitution date.
JACKSON pled guilty earlier this year and is scheduled to be sentenced on July 15, 2015.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
U.S. Attorney Polite praised the work of the Jefferson Parish Sheriff's Office for initiating the case, and the Federal Bureau of Investigation, with assistance from the FBI Dallas Child Exploitation Task Force, and the Dallas Police Department High Risk Victims Unit for investigating this case. Assistant United States Attorneys Jordan Ginsberg and Brandon Long are in charge of the prosecution.
Dallas Roommates Sentenced in Federal Firearms Offense CaseRead the Press Release
DALLAS — A convicted felon, who admitted conspiring with his roommates to have a federal jury acquit him at trial, was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Chaddrick Darrion Ashley, 25, was sentenced today by U.S. District Judge Barbara M. G. Lynn to 180 months in federal prison. He pleaded guilty in March 2015 to one count of conspiracy to obstruct justice.
In April 2015, Ashley’s roommates, Daisy Emerson, 24, and Ofelia Nunez, 19, were each sentenced by Judge Lynn to 21 months in federal prison. Each pleaded guilty to one count of conspiracy to obstruct an official proceeding and one count of making a false declaration before a court.
According to documents filed in the case, Emerson and Nunez’s roommate, convicted felon Chaddrick Darrion Ashley, 25, was arrested on March 26, 2014, for possession of a firearm by a felon. Shortly after his arrest, Emerson conspired with Ashley and Nunez to come up with a strategy to exonerate Ashley. They agreed that Nunez would execute a false affidavit claiming she, not Ashley, owned the gun, and that Nunez had mistakenly left her gun in the car.
Nunez executed that false affidavit, and just days before Ashley’s trial on that offense in federal court, she executed a second affidavit affirming those facts. Both she and Emerson falsely testified in Ashley’s federal trial on the firearm offense in September 2014 to corruptly obstruct and influence those official proceedings. Nunez falsely testified as to several facts about events on the day of Ashley’s arrest, and Emerson falsely testified, denying any involvement in producing the false affidavit. The goal of their conspiracy was, through false affidavits and false testimony at trial, to have the jury acquit Ashley.
Ashley’s trial ended in a mistrial. Approximately one month later, however, a federal grand jury returned a superseding indictment charging him with one count of conspiracy to obstruct justice and one count of possession of a firearm by a convicted felon. He pleaded guilty to the conspiracy count, admitting he helped Emerson and Nunez execute a false affidavit and encouraged them to testify falsely at his trial.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.
Convicted Felon Sentenced to 14.5 Years for Federal Firearm OffensesRead the Press Release
PENSACOLA, FLORIDA – Darius D. Williams, 24, of Pensacola, Florida, was sentenced to 14.5 years in prison late yesterday for possession of a firearm by a convicted felon and for possession of a stolen firearm. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
During his guilty plea in February 2015, Williams admitted to knowingly possessing a stolen firearm, after prior convictions for felony offenses. In the early morning hours of September 14, 2014, a person was shot in the head outside a Pensacola bar. A responding law enforcement officer pursued a suspicious vehicle that was fleeing the scene of the shooting at a high rate of speed. When the vehicle stopped, Williams jumped from the rear seat, holding a .40 caliber Smith & Wesson pistol, and continued his flight on foot. Williams was ultimately apprehended, and the arresting officer recovered the firearm that Williams had discarded during his flight. Forensic tests revealed gunshot residue on Williams’s hands and clothes. Williams’s DNA was also found on the firearm. The victim of the shooting survived.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the Escambia County Sheriff’s Office. It was prosecuted by Assistant United States Attorney David L. Goldberg.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]
Charleston man sentenced to more than three years in federal prison for illegal possession of a firearmRead the Press Release
Charleston, W.Va. – A Charleston man who illegally possessed a firearm was sentenced today in federal court in Charleston to 37 months in federal prison, United States Attorney Booth Goodwin announced. Travis Devon Woods, 26, previously pleaded guilty on March 12, 2015, to being a felon in possession of a firearm. On December 16, 2013, on the West Side of Charleston, members of law enforcement approached Woods to discuss an incident that had occurred nearby. When officers asked Woods to stop to speak with them, Woods fled on foot down a nearby alley. After a brief chase, law caught Woods and found a loaded Taurus .45 caliber semi-automatic pistol in the alley where Woods fled. The West Virginia State Police Forensic Library matched Woods’s DNA to DNA recovered from the weapon.
Woods had previously been convicted in Kanawha County, West Virginia, in 2009 of nighttime burglary and first degree robbery. The sentence imposed by the federal court will run consecutive to a state sentence that he is currently serving for parole violations.
The Charleston Police Department, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, conducted the investigation. Assistant United States Attorney Jennifer Rada Herrald handled the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Buffalo Woman Sentenced on Drug Conspiracy ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Fannie Long, 53, of Buffalo, NY, who was convicted of conspiracy to distribute fentanyl, was sentenced to 96 months in prison by Senior U.S. District Judge William M. Skretny.Assistant U.S. Attorney Frank T. Pimentel, who handled the case, stated that between January 2009 and September 26, 2013, the defendant conspired with co-defendant Sherylrica Quisenberry to distribute controlled substances. Long obtained fentanyl prescriptions from medical professionals which were then filled and sold by the defendant. In addition, Long obtained fraudulent prescriptions which were not written by medical professionals. The prescriptions were made out in the names of individuals engaged by the defendant. These individuals would fill the fraudulent prescriptions and then turn the controlled substances over to Long for further distribution. The controlled substances included Lortab, Xanax and Soma.
Similar charges are pending against Sherylrica Quisenberry. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The sentencing is the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office.
Authorities Arrest Six in Alleged Cocaine Trafficking RingRead the Press Release
HOUSTON – A total of six people have been taken into custody on allegations related to a cocaine conspiracy dating back to April 2011, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Joseph M. Arabit of the Drug Enforcement Administration (DEA).
The charges are the result of a multi-year investigation and the return of a six-count sealed indictment April 29, 2015. The indictment was unsealed following the appearance of Isaac Heron, 37, and Douglas Ramirez, 32, both of Houston; and Leroy Greer, 51, of Missouri City, in federal court this morning. At that hearing, U.S. Magistrate Judge Mary Milloy ordered they remain temporarily in custody. They will appear in court again tomorrow at 2:00 p.m. for a counsel determination hearing.
Juan Banda, 42, Kevin Biggurs, 24, and Victor Oliva, 33, were also taken into custody today and are expected to make their initial appearances before Judge Milloy at 10:00 a.m. tomorrow.
Two more defendants - Eddie Bejar, 30, and Jean Lucio, 31, both also of Houston - are charged but not as yet in custody. They are considered fugitives and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact the DEA at 713-693-3000.
With the exception of Greer, all are charged with conspiracy to possess with the intent to distribute cocaine and aiding and abetting possession with intent to distribute cocaine. If convicted, they face a minimum of 10 years and up to life in federal prison as well as a possible $10 million fine. Greer is charged solely with two counts of structuring financial transactions and faces up to five years imprisonment and a possible $250,000 fine.
The case was result of an Organized Crime Drug Enforcement Task Force investigation led by the DEA with the assistance of Internal Revenue Service - Criminal Investigation and police departments in Pasadena and Houston. Assistant U.S. Attorney Mark E. Donnelly is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Armed Robber Pleads Guilty to Two Store RobberiesRead the Press Release
Baltimore, Maryland – Donte Maurice Johnson, age 30, of Baltimore, Maryland, pleaded guilty on June 30, 2015, to two commercial robberies and to using and brandishing a firearm during a crime of violence.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Commissioner Anthony W. Batts of the Baltimore Police Department; Baltimore County State’s Attorney Scott Shellenberger; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to his plea agreement, on November 2, 2013, Johnson robbed a grocery on Claremont Avenue in Baltimore. Johnson held a shotgun to the store owner’s head and demanded money. A co-conspirator stood inside the door as a look-out. The robbers took between $600 and $700.
On November 25, 2013, Johnson and the co-conspirator robbed a convenience store, located on Philadelphia Road in Baltimore. Specifically, two employees were working at the counter area of the store and two men approached the counter. Donte Johnson pointed a shotgun at both employees and demanded that they open the registers. In fear for their lives, the clerks complied. Johnson reached over the counter and obtained money from one register. The co-conspirator walked behind the counter and retrieved money from another register. The total loss to the store was $153.
Donte Johnson continued to rob the store’s customers. As this was happening, a customer was able to leave the store and get into his vehicle, which was parked in the store’s parking lot. He called 911 and waited for the robbers to exit. The customer saw the robbers run across Philadelphia Road to the parking lot of a bar across the street, and enter a dark green Honda Civic. The customer followed Johnson and the co-conspirator so he would be able to give directions to the police. Once the robbers turned onto Square Ridge Road, the car stopped, and Donte Johnson fired one round from a shotgun at the customer in his vehicle.
Baltimore County Police detectives were able to locate the shotgun used in the convenience store robbery. The shotgun had two unfired shotgun shells lying on the ground next to it and one fired shotgun shell casing loaded in the action of the gun.
Johnson and the government have agreed that if the Court accepts the plea agreement Johnson will be sentenced to between 183 and 198 months in prison. U.S. District Judge Ellen L. Hollander has scheduled sentencing for September 2, 2015 at 2:15 p.m. Johnson remains detained.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Baltimore City Police Department and the Baltimore County and Baltimore City State’s Attorney’s Offices for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Bonnie S. Greenberg, who prosecuted the case.
Area Man Sentenced for Failure to AppearRead the Press Release
St. Louis, MO – DARIUS ISOM, St. Louis, Missouri, was sentenced to an additional six months in prison for failing to appear to federal prison to serve his sentence.
According to court documents, on October 15, 2014, Isom was sentenced to 24 months of imprisonment upon his conviction for aggravated identity theft. He requested the Court to allow him to voluntarily surrender for service of his sentence instead of immediately being taken into custody. The Court granted Isom’s request and ordered him to surrender at the institution designated by the Bureau of Prisons when he was notified by United States Marshals. After being granted one extension, he was scheduled to surrender December 30, 2014, but failed to report as scheduled. When he was contacted by federal authorities, he advised them that he was in Atlanta, Georgia, and would report at the earliest, on January 6, 2015. He was directed to immediately surrender to a local U.S. Marshal’s Office to avoid the issuance of a warrant for his arrest. Isom refused, stating, “I’ve got to do what I’ve got do, and you’ve got to do what you’ve got to do.”
Isom appeared for sentencing today before United States District Judge Rodney W. Sippel.
This case was investigated by the United States Marshal’s Service. Assistant United States Attorney Anthony Franks handled the case for the U.S. Attorney’s Office.
Alice Man Sentenced for Possession of Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Jon Michael Charles, 26, of Alice, has been ordered to federal prison following his conviction of possessing child pornography, announced U.S. Attorney Kenneth Magidson.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced Charles to 60 months in federal prison. Charles was further ordered to serve 10 years of supervised release following completion of his prison term and must register as a sex offender.
At the time of his plea, the court heard that FBI agents in Corpus Christi office received a cyber-tip from the National Center for Missing and Exploited Children about an individual using an email address to upload several images of child pornography to a file storage service provided by Google.
Agents learned the email address was associated with Charles and in July 2014, executed a search warrant at his residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 300 images and 10 videos of child pornography.
Charles has remained in custody since his arrest and will remain there pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. The charges against him were the result of an investigation conducted by the FBI and the Corpus Christi Police Department’s Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
Albuquerque Resident Pleads Guilty to Federal Charges Arising Out of January 2015 Pharmacy Robbery and March 2015 Traffic StopRead the Press Release
ALBUQUERQUE – Victor Hurtado, 20, of Albuquerque, N.M., pleaded guilty today in federal court to felony charges arising out of a pharmacy robbery in Jan. 2015, and a traffic stop in March 2015. Under the terms of his plea agreement, Hurtado will be sentenced within the range of ten to 18 years in federal prison followed by a term of supervised release to be determined by the court. Hurtado also will be required to pay restitution to the pharmacy.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, Chief Gorden Eden, Jr., of the Albuquerque Police Department, Chief Pete N. Kassetas of the New Mexico State Police.
Hurtado and his co-defendant, Joseph Montano, 22, also of Albuquerque, were two of six defendants charged in four indictments with robbing retail pharmacies in Albuquerque. The indictment against Hurtado and Montano alleged that the two men (1) violated the Hobbs Act by interfering with interstate commerce by robbery and violence; (2) brandished a firearm during a crime of violence; (3) violated the Controlled Substance Registrant Act by robbery involving controlled substance; (4) violated the Safe Doses Act by theft of medical products; and (5) possessed Oxycodone with intent to distribute. The charges against Hurtado and Montano arose from the Jan. 6, 2015, armed robbery of the Smith’s Pharmacy located at 4016 Louisiana Blvd. NE in Albuquerque.
During today’s proceedings, Hurtado pled guilty to Count 1, 2 and 5 of the indictment, charging him with robbing a commercial business engaged in interstate commerce; brandishing a firearm during a crime of violence, and possession of Oxycodone with intent to distribute. In entering the guilty plea, Hurtado admitted that on Jan. 6, 2015, he entered the Smith’s Pharmacy, jumped over the counter while brandishing a firearm, and ordered the pharmacist to open the safe where controlled substances were kept. He also admitted pointing the firearm at the pharmacy employees to gain their compliance, and that he stole bottles of Oxycodone from the pharmacy’s inventory.
Hurtado also pled guilty to a one-count felony information charging him with possession of methamphetamine with intent to distribute. Hurtado admitted that he was arrested on state charges on March 5, 2015, after an officer of the New Mexico State Police found approximately 54 grams of heroin and 133 grams of methamphetamine in the vehicle Hurtado was driving. Hurtado admitted that he and another person intended to distribute the drugs seized by the New Mexico State Police.
Hurtado has been in federal custody since his arrest on April 29, 2015, and remains detained pending his sentencing hearing, which has yet to be scheduled.
Montano has entered a not guilty plea to the indictment. He remains in federal custody pending trial. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque office of the FBI, the Tactical Diversion Squad of the DEA in Albuquerque, the Albuquerque Police Department and the New Mexico State Police, with assistance from the 2nd Judicial District Attorney’s Office in Bernalillo County. The case is being prosecuted by Assistant U.S. Attorneys Joel R. Meyers and Shaheen P. Torgoley.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
These cases are being prosecuted pursuant to a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
The cases also are 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 and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Alamogordo Man Pleads Guilty to Violating the Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Kenneth Colby Miller, 31, of Alamogordo, N.M., pleaded guilty today in federal court in Las Cruces, N.M., to violating the federal firearms laws by possessing an unregistered firearm. Under the terms of his plea agreement, Miller will be sentenced to 30 months in prison followed by more than three years of supervised release.
Miller was arrested on April 30, 2015, on a criminal complaint charging him with possession of an unregistered firearm. According to the complaint, on Dec. 3, 2014, in Chaves County, N.M., an officer with the Roswell Police Department conducted a routine traffic stop on Miller’s vehicle, and after a consensual search, the officer recovered a single shot “sawed-off” shotgun with no visible serial number or manufacturers markings. After further investigation, Miller’s background also revealed that he had been convicted twice of unlawful taking of a motor vehicle and reckless driving.
During today’s proceedings, Miller pled guilty to a felony information charging him with possession of an unregistered firearm. In entering the guilty plea, Miller admitted that on Dec. 3, 2014, he possessed a sawed off 20 gauge shotgun which did not have a serial number and was not registered to him in the National Firearms Registration and Transfer Record.
Miller has been in custody since his arrest and remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Roswell Police Department. Assistant U.S. Attorney Luis A. Martinez of the U.S. Attorney’s Las Cruces Branch Office is prosecuting this case.
Tuesday 30 June 2015
Woman in Prison for BP Oil Spill Fraud Now Charged with Food Stamp Fraud and Tax EvasionRead the Press Release
BIRMINGHAM -- Federal prosecutors have charged a McCalla woman, already serving time for attempting to defraud the Gulf Coast oil spill claims fund, with food stamp fraud and evading income taxes, announced U.S. Attorney Joyce White Vance, Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Agriculture Office of Inspector General, Investigations, Special Agent in Charge Karen Citizen-Wilcox.
The U.S. Attorney's Office last week charged SHERICA LACEY LEE, 33, with one count of tax evasion and one count of wire fraud through an information filed in U.S. District Court. The information also seeks to have Lee forfeit $23,757 to the government as proceeds of illegal activity. The government also filed a plea agreement with Lee in which she agrees to plead guilty to the charges and to pay restitution of $134,448 to the IRS for taxes not paid in 2008 through 2010, plus $23,757 to the Department of Agriculture for food stamp benefits she was not eligible to receive between July 2009 and June 2013. Lee also consents, additionally, to forfeit the $23,757 sought in the information.
"This defendant is in prison for trying to steal money intended for the victims of the massive BP oil spill in the Gulf of Mexico, and now she must face the charges that she stole from U.S. taxpayers and from money intended to feed poor families," Vance said. "Fraud seemed to be this defendant's default mode, but government agencies and this office hit the kill switch."
"Sherica Lacey Lee attempted to evade her tax obligation by not reporting all of her income to the Internal Revenue Service,” Hyman-Pillot said. "Tax evasion undermines the integrity of our nation’s tax system, which is built on voluntary compliance. IRS Criminal Investigation will continue to enforce the nation’s tax laws and recommend prosecution on individuals who choose to violate our tax system.”
The information charges Lee evaded income taxes for 2008 by preparing and submitting a personal tax return that falsely reported she had no taxable income, when she had $229,147 in taxable income that year. Lee ran a tax preparation business, Lacey's Income Tax Service, with several locations in the Birmingham area. Between 2008 and 2010, according her plea agreement, Lee's company filed more than 2,000 tax returns and generated about $2.5 million in receipts.
The information also charges Lee with wire fraud as part of a scheme to obtain federal benefits from the USDA Supplemental Nutrition Assistance Program. USDA administered SNAP, formerly known as the Federal Food Stamp Program, in conjunction with the Alabama Department of Human Resources.
Although Lee had income in excess of $200,000 in 2009, she applied for SNAP benefits by falsely stating on her application to DHR that she had no household income, cash on hand, or money in the bank, according to her plea agreement. Lee submitted additional false application forms in 2010, 2011 and 2012. Her applications caused the $23,757 in SNAP benefits to be wired to an account established in her name and loaded monthly onto an Electronic Benefit Transfer card, which could be used as a debit card to purchase food.
Lee was sentenced in June 2014 to one year and a day in prison for attempting to defraud the Gulf Coast Claims Facility. As part of Lee's plea agreement in the current case, she and the government agree to a prison sentence of 24 months, unless the low end of the U.S. Sentencing Guideline range is more than 24 months. In that case, the government would recommend the low end of the guideline range. The government also would recommend that Lee's sentence run concurrently with the sentence she is now serving.
IRS, Criminal Investigation, and USDA-OIG investigated the case, which Assistant U.S. Attorney Pat Meadows is prosecuting.
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Wisconsin Man, Edward Joseph Peterson, Sentenced to Seven Years for Repeated Child Sexual Abuse on Indian Land Near PetoskeyRead the Press Release
GRAND RAPIDS, MICHIGAN – Edward Joseph Peterson, 61, of the Lac Du Flambeau Band of the Lake Superior Chippewa tribe in Wisconsin, received a seven-year sentence in federal prison for child sexual abuse on June 29, 2015. A grand jury charged Peterson with seven counts of abusive sexual contact with four different children under 12 years old from 2009 to 2011. Peterson pled guilty to one count, and the judge ordered him to pay $100,000 in restitution to the victims for counseling.
In 2009, two young girls in the Little Traverse Bay Band of Odawa Indians reported that Peterson touched them on their breasts and buttocks while they were visiting his house on tribal land in Emmet County, near Petoskey. In 2011, two more girls reported that Peterson touched their genitals and buttocks, also on tribal land. A fifth girl later reported that Peterson also sexually abused her. In 2012, the FBI interviewed Peterson about the allegations, which he denied. Following the interview, while the investigation continued, Peterson sexually abused another young girl in Wisconsin. As a result, Peterson pled guilty in Wisconsin state court in 2014 to First Degree Child Sexual Assault and is currently serving a four-year sentence. U.S. District Judge Robert Holmes Bell ordered the federal sentence to be served consecutively to the state sentence, totaling a combined sentence of 11 years. Peterson will be subject to a 10-year period of federal supervised release after prison and will be required to register as a sex offender.
At the sentencing hearing, U.S. District Judge Bell read aloud from a number of statements written by the victims and their parents. All the statements discussed both an intense sense of betrayal and anger, as well as the need for ongoing counseling on the girls’ road towards recovery. In delivering the sentence, Judge Bell stated that Peterson has "no respect for the law, or even for people." He noted the importance of protecting the public from Peterson, especially given that Peterson abused yet another child after being notified by the FBI of the investigation into child sexual abuse in Michigan.
In announcing the sentence, U.S. Attorney Patrick Miles stated, "I applaud the children in this case for having the bravery to report what happened to them rather than suffering in silence. The fact that all the children described the same type of abuse over time shows a disturbing pattern of pedophilia and conveys the danger that Peterson presents to communities everywhere."
"The defendant in this case sexually abused a number of children, displaying an utter disregard for human decency and the law," stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. "Those same children demonstrated remarkable courage, bravely reporting the crimes in the face of their abuser and helping to bring an end to the perpetrator’s abusive actions. The FBI and its tribal law enforcement partners continue working to protect our communities and combat sexual predators who commit such depraved criminal acts."
Leaders from the Little Traverse Bay Band of Odawa Indians, where the offenses took place, attended the sentencing. The tribe’s Chairperson and the Chief of Police stated, "Fortunately, we do not have a large number of criminal cases arising from our tribe, but when a crime like this occurs, we are glad to see tribal and federal law enforcement working together for justice and are committed to providing whatever services the victims might need as they heal."
The federal investigation was conducted by the FBI in collaboration with tribal law enforcement. Assistant U.S. Attorneys Jeff J. Davis and Tessa K. Hessmiller prosecuted the case.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
Wife of Department of Defense Employee and Subcontractor Conspire to Fraudulently Obtain over $750,000 from Contracts with Aberdeen Proving GroundRead the Press Release
Baltimore, Maryland – Sandra Nixon, a/k/a “Lisa Hart,” age 52, of Silver Spring, and Kenneth Dawson, age 52, of Niceville, Florida, pleaded guilty today to conspiring to defraud the United States.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Frank Robey, Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
"Ms. Nixon and Mr. Dawson unlawfully manipulated the federal contracting process, a system the public expects to be fair and transparent, and that the Defense Department relies upon to support our men and women in uniform," said Robert Craig, Special Agent in Charge for the DCIS, Mid-Atlantic Field Office. "The Defense Criminal Investigative Service, its law enforcement partners, and the U.S. Attorney's Office are committed to maintaining the integrity of the contracting process through the identification and investigation of those alleged to have abused it."
Sandra Nixon was married to co-defendant Mark Nixon. Mark Nixon was a civilian employee of the Department of Defense, and worked at the U.S. Army Research Laboratories (ARL) in Hampton, Virginia, and Aberdeen, Maryland. From 2008 to December 2010, Nixon was the director of the Vehicle Technology Directorate with ARL at Aberdeen Proving Ground. Kenneth Dawson was a longtime friend of the Nixons.
Sandra and Mark Nixon also had a financial interest and management role in the operation of the following companies: Motile Robotics, Inc. (MRI), located in Joppa, Maryland; Atlantic Capital Enterprises (ACE); and Arrow Technical Incorporated (ATI).
Sandra and Mark Nixon reached an agreement with Kenneth Dawson to create and operate MRI. Dawson had full time employment with two different defense contractors that required him to report to work at Eglin Air Force Base in Florida, where he lived. In 2007, Dawson used his personal credit cards to pay for startup costs associated with MRI, and the Nixons reimbursed Dawson for these expenses. Although Dawson was the supposed president of MRI, in reality, Sandra and Mark Nixon created MRI, provided significant input regarding its operation, and were in effect a silent and undisclosed partner, owner and co-president. They helped operate MRI using the aliases “Lisa Hart” and "Paul Martin" in order to conceal their financial interest.
According to their plea agreements, in 2008, Mark Nixon determined that microsystem controls research was needed, including the fabrication of a small open-jet wind tunnel. Mark Nixon created and approved government documents that caused ARL to fund this research, and became the designated team leader for ARL on the research project.
In January 2009, the United States awarded a large defense contractor a task order to construct the open flow wind tunnel from February 2008 to 2011, worth approximately $3.6 million. Mark Nixon persuaded the defense contractor to use MRI as a subcontractor. Mark Nixon also played an important role in the government awarding the defense contractor another task order to construct a closed circuit wind tunnel from January 2009 to 2011, for approximately $3.5 million, under which MRI was a subcontractor. Mark Nixon provided the contracting officer with a technical evaluation of the contract and its cost, and acted as the government official overseeing and managing this work on a routine basis.
Pursuant to the conspiracy, the United States was billed for more than $35,000 in false labor charges by a relative of Sandra Nixon, who was characterized as an aerospace engineer. In reality, the relative was a retired school employee. Although Mark Nixon knew that he had a prohibited financial interest in MRI, he conducted a technical evaluation of MRI’s capabilities as a subcontractor, and approved the false invoices.
MRI received more than $5 million in federal funds under these task orders. Mark Nixon caused MRI to pay money to ATI, and ATI to pay ACE. The three defendants personally benefited from over $750,000 sent to these companies. The Nixons personally received more than $400,000 as a result of the task orders awarded to MRI.
Sandra Nixon and the government have agreed that if the Court accepts her plea agreement, Nixon will be sentenced to six months in prison followed by three years of supervised release. Kenneth Dawson faces a maximum sentence of five years in prison. Sandra Nixon and Dawson also agree to pay restitution of at least $750,000. U.S. District Judge Marvin J. Garbis has scheduled sentencing for Sandra Nixon on October 2, 2015 at 9:30 a.m. and for Kenneth Dawson on October 30, 2015 at 10:00 a.m.
Mark Nixon, age 54, of Silver Spring, Maryland, pleaded guilty on June 15, 2015 to the conspiracy and to acts affecting a personal financial interest. Mark Nixon and the government have agreed that if the Court accepts his plea agreement, Nixon will be sentenced to 42 months in prison followed by three years of supervised release. Mark Nixon also agrees to forfeit and pay restitution of at least $750,000. Mark Nixon is scheduled to be sentenced on September 18, 2015 at 9:30 a.m.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Rod J. Rosenstein commended the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit, DCIS and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Harry M. Gruber and P. Michael Cunningham, who are prosecuting the case.
Westlake police officer indicted for excessive force, obstructionRead the Press Release
A Westlake police officer was indicted in federal court for excessive use of force on an arrested suspect and subsequently attempting to cover up the incident, law enforcement officials said.
Robert Toth, 48, of North Olmsted, was indicted on one count of excessive use of force and two counts of obstruction.
Count 1 charges Toth, in his capacity as a police officer, with causing bodily injury to someone identified as T.A. on or about April 24, 2014. In doing so, Toth deprived T.A. of his Constitutional right to be free from the unreasonable use of force by a law enforcement officer.
Count 2 charges that between April 25, 2014, and May 1, 2014, Toth knowingly falsified a document – specifically an official report concerning the arrest of T.A. – with the intent to impede, obstruct and influence the investigation and proper administration of that matter.
Count 3 charges that on May 3, 2014, Toth impeded an investigation by providing false information to a federal law enforcement officer surrounding the encounter with and arrest of T.A.
“The vast majority of police officers do their jobs with courage and honor,” U.S. Attorney Steven M. Dettelbach said. “However, when we believe that the evidence demonstrates that an officer has intentionally crossed the line into criminal conduct, we will not hesitate to take appropriate action. I want to compliment the FBI on their thorough and professional investigation into this matter.”
This case is being prosecuted by Assistant U.S. Attorneys Bridget M. Brennan and Chelsea Rice following an investigation by the Federal Bureau of Investigation’s Cleveland office.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Wasi Syed and Shahab Mir Plead Guilty in Stolen Polysilicon CaseRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces that Wasi Ismail Syed, age 38, of McKinney, Texas, and his brother-in-law Shahab Uddin Mir, age 35, of Frisco, Texas, have each pled guilty to two conspiracy charges related to a scheme to buy and sell stolen polysilicon and to launder the proceeds from these transactions. William Short of Loxley, Alabama, George Welford of Gautier, Mississippi, and Darlene Row of Dallas, Texas, have all previously pled guilty to their roles in these conspiracies.
William Short and George Welford are former employees of the Mitsubishi Polysilicon manufacturing plant located in Theodore, Alabama. The plant produces exceptionally high-grade polysilicon, which is a material used in the manufacturing of computer chips that control high-tech devices from super computers, to hospital equipment, avionics, and weapons systems. The polysilicon produced at the Theodore plant is ultra-pure. There are only four plants in the United States, and approximately a dozen worldwide, that produce this type of high-grade polysilicon.
In late 2008, Short and Welford began stealing polysilicon rods from the Mitsubishi plant. Using reinforced backpacks and lunch pails, Short and Welford walked several rods per day out of the plant and into their vehicles. Before long, Short and Welford had stolen so much polysilicon that they needed a storage unit, and ultimately a warehouse to house the stolen material. Since the rods were stolen very shortly after coming out of the reactors, they were not etched or vacuum-sealed in a clean room like the finished rods coming out of the plant. Consequently, the rods lacked the normal specification sheets that are attached to the packaging.
Soon after they started stealing the polysilicon rods, Short and Welford began looking for a purchaser. Using the aliases William Smith (Short) and Butch Cassidy (Welford), the pair found Horizon Silicon online. The Dallas, Texas-based company was owned and operated by brothers-in-law Wasi Syed and Shahab Mir, and Darlene Row worked as a secretary.
Short and Welford negotiated with Syed and Row for the price and amount of polysilicon to be sold. During the course of negotiations, Syed flew to Pensacola, Florida, to see the polysilicon for himself. This meeting, in which Syed tested the polysilicon with a resistivity meter to check its purity level, occurred at night in a Krystal’s parking lot.
After testing the buckets of polysilicon, Syed agreed to buy the polysilicon from Short and Welford for a price well below the market value. One condition of the deal was that payments were to be made in cash and in person.
Between February 2009 and Marcy 2014, Short and Welford stole, and then subsequently sold, approximately 50 metric tons of Mitsubishi polysilicon rods to Horizon Silicon. Typically, Syed would find a buyer for the polysilicon he was purchasing from Short and Welford. Then Row would arrange for the polysilicon to be picked up and delivered to a port city on the west coast. Finally, Mir would fly or drive to Mobile, Alabama, and other locations along the Gulf Coast, with either backpacks or suitcases full of cash to pay Short and Welford.
The stolen polysilicon, which was valued at over $2.5 million, was exported from the United States after being sold by Syed to other buyers. While the final destination for all of the stolen polysilicon rods is not clear, at least some of the material ended up in the People’s Republic of China.
In early 2014, Short and Welford were caught by Mitsubishi. Syed, Mir, and Row were subsequently arrested in Texas in May 2014. In February 2015, Short and Welford each pled guilty to one count of conspiracy to possess, transport, buy, and sell stolen material in interstate commerce and to one count of conspiracy to commit money laundering. Row pled guilty to the same charges in March 2015, as did Syed and Mir on June 29, 2015.
This matter was investigated by Homeland Security Investigations and IRS-Criminal Investigations in Mobile, Alabama, with assistance from the Dallas, Texas office of these agencies. The case was prosecuted by Donna B. Dobbins and Christopher J. Bodnar, Assistant United States Attorneys with the U.S. Attorney’s Office for the Southern District of Alabama.
Volo, Illinois Woman Indicted for the Robbery and Attempted Robbery of Three Chase Bank BranchesRead the Press Release
ROCKFORD — A Lake County woman was indicted today in federal court and charged with two counts of bank robbery and one count of attempted bank robbery. TERESA M. KNOWLES, 39, of Volo, Ill., was charged with the robbery of Chase Bank, in Crystal Lake, Ill. on March 21, 2015, and Chase Bank, in Grayslake, Ill. on March 24, 2015, as well as the attempted robbery of Chase Bank in Johnsburg, Illinois, on March 24, 2015.
Knowles is scheduled to appear before U. S. Magistrate Judge Iain D. Johnson for an initial appearance on Thursday, July 2, 2015, at 11:00 a.m. in federal court in Rockford. Each count of bank robbery and attempted bank robbery carries a maximum potential penalty of up to 20 years in prison, up to 3 years of supervised release following imprisonment, a fine of up to $250,000, and full restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The Johnsburg Police Department, McHenry Police Department, Grayslake Police Department, and Crystal Lake Police Department assisted in the investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Indictment
VMware and Carahsoft Agree to Pay $75.5 Million to Settle Claims that they Concealed Commercial Pricing and Overcharged the GovernmentRead the Press Release
ALEXANDRIA, Va. – VMware Inc. and Carahsoft Technology Corporation have agreed to pay $75.5 million to resolve allegations that they violated the False Claims Act by misrepresenting their commercial pricing practices and overcharging the government on VMware software products and related services.
VMware is a Delaware corporation that specializes in computer virtualization software and has its principal place of business in Palo Alto, California. Carahsoft is a privately held Maryland corporation that distributes information technology products to federal, state and local governments and has its principal place of business in Reston, Virginia.
“Transparency by contractors in the disclosure of their discounts and prices offered to commercial customers is critical in the award of GSA Multiple Award Schedule contracts and the prices charged to government agency purchasers,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government give the taxpayers a fair deal,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “Government contractors who seek to profit improperly at the expense of taxpayers face serious consequences.”
“We will continue to look into all allegations of false claims in GSA contracts,” said Acting Inspector General Robert C. Erickson of the U.S. General Services Administration (GSA). “I appreciate the hard work of our auditors, our agents and the attorneys on this complex case that has resulted in a large amount of money being returned to the United States.”
Under the Multiple Award Schedule (MAS) Program, prospective vendors agree to disclose commercial pricing policies and practices to the GSA in exchange for the opportunity to gain access to the broad federal marketplace and the ease of administration that comes from selling to any government purchaser under one central contract. GSA regulations require that, during contract negotiations with GSA, prospective vendors seeking an MAS contract make “current, accurate and complete” disclosures of the standard and non-standard discounts they offer to commercial customers. The GSA relies on the accuracy of these disclosures in order to negotiate fair pricing for government purchasers. Additionally, after the MAS contract is awarded, regulations require that MAS Program vendors disclose to the GSA changes in their commercial pricing practices, including improved discounts that are offered to commercial customers, after the MAS contract is in place.
The settlement resolves allegations that VMware and Carahsoft made false statements to the government in connection with the sale of VMware products and services under Carahsoft’s MAS contract. These false statements allegedly concealed the companies’ commercial pricing practices and enabled the companies to overcharge the government for VMware’s products and services from 2007 through 2013.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Virginia by Dane Smith, who is a former vice president of the Americas at VMware Inc. Mr. Smith’s share of the recovery has not been determined.
The settlement was the result of a coordinated effort by the U.S. Attorney’s Office of the Eastern District of Virginia, the Civil Division’s Commercial Litigation Branch, and the GSA’s Office of Inspector General, with assistance from the Defense Criminal Investigative Service Mid-Atlantic Field Office. This matter was investigated by Assistant U.S. Attorney Steve Gordon and Benjamin Wei of the Department of Justice.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 10-CV-769.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
ALEXANDRIA, Va. – VMware Inc. and Carahsoft Technology Corporation have agreed to pay $75.5 million to resolve allegations that they violated the False Claims Act by misrepresenting their commercial pricing practices and overcharging the government on VMware software products and related services.
VMware is a Delaware corporation that specializes in computer virtualization software and has its principal place of business in Palo Alto, California. Carahsoft is a privately held Maryland corporation that distributes information technology products to federal, state and local governments and has its principal place of business in Reston, Virginia.
“Transparency by contractors in the disclosure of their discounts and prices offered to commercial customers is critical in the award of GSA Multiple Award Schedule contracts and the prices charged to government agency purchasers,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government give the taxpayers a fair deal,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “Government contractors who seek to profit improperly at the expense of taxpayers face serious consequences.”
“We will continue to look into all allegations of false claims in GSA contracts,” said Acting Inspector General Robert C. Erickson of the U.S. General Services Administration (GSA). “I appreciate the hard work of our auditors, our agents and the attorneys on this complex case that has resulted in a large amount of money being returned to the United States.”
Under the Multiple Award Schedule (MAS) Program, prospective vendors agree to disclose commercial pricing policies and practices to the GSA in exchange for the opportunity to gain access to the broad federal marketplace and the ease of administration that comes from selling to any government purchaser under one central contract. GSA regulations require that, during contract negotiations with GSA, prospective vendors seeking an MAS contract make “current, accurate and complete” disclosures of the standard and non-standard discounts they offer to commercial customers. The GSA relies on the accuracy of these disclosures in order to negotiate fair pricing for government purchasers. Additionally, after the MAS contract is awarded, regulations require that MAS Program vendors disclose to the GSA changes in their commercial pricing practices, including improved discounts that are offered to commercial customers, after the MAS contract is in place.
The settlement resolves allegations that VMware and Carahsoft made false statements to the government in connection with the sale of VMware products and services under Carahsoft’s MAS contract. These false statements allegedly concealed the companies’ commercial pricing practices and enabled the companies to overcharge the government for VMware’s products and services from 2007 through 2013.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Virginia by Dane Smith, who is a former vice president of the Americas at VMware Inc. Mr. Smith’s share of the recovery has not been determined.
The settlement was the result of a coordinated effort by the U.S. Attorney’s Office of the Eastern District of Virginia, the Civil Division’s Commercial Litigation Branch, and the GSA’s Office of Inspector General, with assistance from the Defense Criminal Investigative Service Mid-Atlantic Field Office. This matter was investigated by Assistant U.S. Attorney Steve Gordon and Benjamin Wei of the Department of Justice.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 10-CV-769.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
VMWare and Carahsoft Agree to Pay $75.5 Million to Settle Claims that they Concealed Commercial Pricing and Overcharged the GovernmentRead the Press Release
VMware Inc. and Carahsoft Technology Corporation have agreed to pay $75.5 million to resolve allegations that they violated the False Claims Act by misrepresenting their commercial pricing practices and overcharging the government on VMware software products and related services, the Department of Justice announced today. VMware is a Delaware corporation that specializes in computer virtualization software and has its principal place of business in Palo Alto, California. Carahsoft is a privately held Maryland corporation that distributes information technology products to federal, state and local governments and has its principal place of business in Reston, Virginia.
“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government give the taxpayers a fair deal,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “Government contractors who seek to profit improperly at the expense of taxpayers face serious consequences.”
“Transparency by contractors in the disclosure of their discounts and prices offered to commercial customers is critical in the award of GSA Multiple Award Schedule contracts and the prices charged to government agency purchasers,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
“We will continue to look into all allegations of false claims in GSA contracts,” said Acting Inspector General Robert C. Erickson of the U.S. General Services Administration (GSA). “I appreciate the hard work of our auditors, our agents and the attorneys on this complex case that has resulted in a large amount of money being returned to the United States.” Under the Multiple Award Schedule (MAS) Program, prospective vendors agree to disclose commercial pricing policies and practices to the GSA in exchange for the opportunity to gain access to the broad federal marketplace and the ease of administration that comes from selling to any government purchaser under one central contract. GSA regulations require that, during contract negotiations with GSA, prospective vendors seeking an MAS contract make “current, accurate and complete” disclosures of the standard and non-standard discounts they offer to commercial customers. The GSA relies on the accuracy of these disclosures in order to negotiate fair pricing for government purchasers. Additionally, after the MAS contract is awarded, regulations require that MAS Program vendors disclose to the GSA changes in their commercial pricing practices, including improved discounts that are offered to commercial customers, after the MAS contract is in place.
The settlement resolves allegations that VMware and Carahsoft made false statements to the government in connection with the sale of VMware products and services under Carahsoft’s MAS contract. These false statements allegedly concealed the companies’ commercial pricing practices and enabled the companies to overcharge the government for VMware’s products and services from 2007 through 2013.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Virginia by Dane Smith, who is a former vice president of the Americas at VMware Inc. Mr. Smith’s share of the recovery has not been determined.
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Eastern District of Virginia and the GSA’s Office of Inspector General, with assistance from the Defense Criminal Investigative Service Mid-Atlantic Field Office. The case is captioned United States ex rel. Smith v. VMware, Inc., et al., Case No. 10-CV-769 (E.D. Va.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
United States Reaches Civil Settlement with Doctor and His Clinic for False Claims Submitted to Medicare and TRICARERead the Press Release
St. Louis, MO: The United States has reached a civil settlement with MOHAMMAD AKHTAR CHOUDHARY, M.D., and his company, ROLLA NEUROLOGY PAIN & SLEEP CENTER, LLC.
According to the allegations of the United States, Dr. Choudhary and his company, located in Rolla, Missouri, violated the False Claims Act by submitting false claims to Medicare and TRICARE by upcoding claims for payment by not accurately stating the level of services that was provided for evaluation and management of patients and for nerve conduction studies. As part of the civil settlement, the Defendants will pay the United States $861,571.
This settlement is part of ongoing efforts by the Department of Justice, the Department of Health and Human Services and the Defense Health Agency to recover funds diverted from Medicare and TRICARE. Assistant United States Attorney Suzanne Moore handled the case for the U.S. Attorney’s Office.
United States Attorney's Office recovers over twenty million dollars in case against Community Health NetworkRead the Press Release
Josh J. Minkler, United States Attorney, announced today a $20,324,902.22 civil settlement with Community Health Network (ACHN), a non-profit health system with more than 200 sites of care and affiliates throughout the State of Indiana. The settlement will resolve allegations that CHN submitted false claims to the Medicare and Medicaid programs.
"The civil False Claims Act was created to serve as a tool for combating fraud, waste and abuse in federally funded programs," Minkler stated. "This recovery sends the message that health care providers must comply with all applicable state and federal regulations when billing the United States Government for services, or they will face consequences." Under the False Claims Act, the Government may collect three times the loss it incurred, plus a fine of $5,500 to $11,000 for each false bill submitted.
This settlement is the result of an investigation conducted by the Department of Health and Human Services – Office of the Inspector General (“HHS-OIG”); the Federal Bureau of Investigation; and the State of Indiana Attorney General’s Office Medicaid Fraud Control Unit in coordination with the United States Attorney's Office and the United States Department of Justice in Washington, D.C.
Specifically, the United States alleges that since the late 1990s through October 2009, CHN had contracts with free-standing ambulatory surgery centers or “ASCs” not owned by CHN. Through these contracts, the ASCs would provide out-patient surgical services to CHN patients. CHN would then bill Medicare and Medicaid for the surgical services through the billing departments of its hospitals. When CHN presented the bill to the Medicare and Medicaid contractors, however, the billing information represented that the surgery was performed in the out-patient department of one of CHN’s hospitals, rather than in an ASC. Because the Medicare and Medicaid billing rates for surgeries performed in an ASC are generally lower than the billing rates for out-patient surgeries performed in a hospital, CHN received higher reimbursement from the Medicare and Medicaid programs than it was entitled. According to the United States, medical providers were specifically placed on notice by the Centers for Medicare and Medicaid Services (“CMS”) in late November 2007 that services provided in an ASC should only be billed at ASC rates, but CHN continued this practice until October 1, 2009.
According to Assistant United States Attorney Shelese Woods, who handled the case for the United States, CHN has also agreed to enter into a Corporate Integrity Agreement with HHS-OIG. “Our agency will continue to hold health care providers accountable for overbilling the Medicare and Medicaid programs,” said Special Agent in Charge Lamont Pugh III, U.S. Department of Health & Human Services, Office of Inspector General. “Our Corporate Integrity Agreement with CHN requires board of directors oversight as well as compliance mechanisms that are designed to help ensure that CHN submits appropriate claims to federal health care programs moving forward.”
The claims resolved by this settlement are allegations only and there has been no determination of liability. In investigating the case, HHS-OIG did not uncover any evidence of physical injury or harm to patients as a result of the alleged conduct.
Two Sentenced for Aiding Series of Bank and Business RobberiesRead the Press Release
SCRANTON – The United States Attorney's Office for the Middle District of Pennsylvania announced that Cindy Conden, age 29, of Hanover Township was sentenced today by U.S. District Court Senior Judge Richard P. Conaboy to 46 months’ imprisonment for aiding in the commission of multiple robberies.
Conden’s father, Charles Conden, age 48, also of Hanover Township, was sentenced by Judge Conaboy on June 23, 2015 to 84 months’ imprisonment. Both Cindy and Charles Conden pleaded guilty to the charges pursuant to plea agreements that were filed in February 2015.
According to United States Attorney Peter Smith, Jeffrey Townsley, age 43, Kingston, engaged in an 18-day crime spree beginning on December 24, 2013 and ending on January 10, 2014. The crimes included two bank robberies and seven robberies of local businesses. Townsley was arrested on January 10, 2014. He is currently serving a federal sentence of 151 months’ imprisonment imposed by Judge Conaboy on April 15, 2015.
Charles Conden aided Townsley in the robberies at Aldi’s Market in Kingston on January 7, 2014, Thomas’ Market in Larksville on January 8, 2014, and the Family Dollar in Ashley on January 10, 2014. Cindy Conden and James Hughes also aided Townsley in the commission of the Aldi’s robbery.
James Hughes, age 26, of Nanticoke, is scheduled to be sentenced on August 15, 2015. Hughes pleaded guilty pursuant to a plea agreement in May 2015 to aiding in the multiple robberies.
The investigation was conducted by the Federal Bureau of Investigation with the assistance of police departments of Kingston, Kingston Township, Larksville, Hanover Township, Wilkes-Barre, Plains, and Ashley, and the Luzerne County District Attorney Detectives. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
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Two Memphis Men Sentenced to a Total of 260 Months for Robbing Whitehaven Dollar GeneralRead the Press Release
Memphis, TN – Two convicted felons responsible for robbing a Dollar General in Whitehaven have been collectively sentenced to 260 months in prison.
According to facts presented in court, on the evening of November 9, 2013, Johnnie Trenell, 31, and Maurice Harris, 22, entered the Dollar General located at 3909 Elvis Presley Blvd. armed with a Taurus 9mm pistol. Trenell jumped the counter and pointed the silver and black firearm at the cashier and demanded that the employee get on the floor. While Trenell occupied the cashier, Harris demanded another Dollar General employee to open the safe. Unable to do so, the second employee was then ordered to open the cash registers, remove the money in them and place it in a Dollar General bag.
After receiving a robbery in progress call at the Dollar General, Memphis Police Department officers arrived on the scene, according to court statements. Trenell and Harris fled to the back of the store after realizing law enforcement officers were outside the establishment. Shortly after entering the store, officers arrested both defendants and recovered the 9mm pistol they used, as well as $619 in a Dollar General bag. Officers were able to locate Harris’ vehicle, and recovered Harris’ fingerprints from items on the counter. One of the robbery victims also identified Trenell as the gunman.
On May 19th, District Court Judge S. Thomas Anderson sentenced Harris to 120 months in federal prison and three years of supervised release. Harris pled guilty to the Hobbs Act, a law that makes it a federal crime to commit a robbery that interferes with interstate commerce. Harris also pled guilty to being a felon in possession of a firearm.
Today, Trenell was sentenced to 140 months in federal prison and three years of supervised release by Judge Anderson. He also pled guilty to the Hobbs Act and being a felon in possession of a firearm.
This case was investigated by the FBI’s Memphis Safe Streets Task Force. Assistant U.S. Attorney Brian Coleman prosecuted the case on the government’s behalf.
Two Area Men Charged in Separate Federal Child Pornography IndictmentsRead the Press Release
ROCKFORD — Two area men were charged by a federal grand jury in separate cases on child pornography charges. ZACHARY RODRIGUEZ, 24, of Loves Park, Ill., was indicted on June 16, 2015, on one count of using a minor to engage in sexually explicit conduct in November 2014. Rodriguez appeared in federal court on June 23, 2015, and pled not guilty.
ADRIAN C. PETERS, 22, of South Beloit, Ill., was charged today with 12 counts of using a minor to engage in sexually explicit conduct for the purpose of transmitting a live visual depiction that would be transmitted and transported by a means or facility of interstate and foreign commerce, during the period of October 2012 to December 2014. Peters is scheduled to appear today at 3:00 p.m. before Magistrate Judge Iain D. Johnston.
Each count of sexual exploitation of a minor carries a potential penalty of a minimum of 15 years and a maximum of up to 30 years in prison, up to five years of supervised release following imprisonment, a fine of up to $250,000, and full restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The indictments were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The Winnebago County Sheriff’s Office assisted in the investigations, along with the South Beloit Police Department in the charges against Peters, and the Loves Park Police Department in the charge against Rodriguez.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Rodriguez Indictment
Peters IndictmentThree People Charged in Conspiracy to Sell Counterfeit Hair Care ProductsRead the Press Release
PHILADELPHIA – Three people were charged by information, filed or unsealed today, in a conspiracy to import and sell counterfeit goods, announced United States Attorney Zane David Memeger. Stephen Voudouris, Sr., 59, of Newtown Square, PA, Yung Chung, 31, of West Chester, PA, and Jaimmy Chun, 30, of Philadelphia, PA, are charged with conspiracy, trafficking in counterfeit goods and wire fraud. Voudouris, Sr. is also charged with smuggling counterfeit goods into the United States.
Stephen Voudouris, Sr. and Yung Chung were partners and owners of Misikko.com, headquartered in Newtown Square, Pennsylvania, an online retailer of luxury hair care appliances, including flat irons and blow dryers. Misikko.com was not an authorized dealer of brands such as CHI, T3 and Babyliss. According to the charging documents, in an effort to maximize profits, Voudouris, Sr., Chung and an employee, Chun, sought out Chinese manufacturing companies from which they could purchase cheap goods bearing counterfeit trademarks of CHI, T3 and Babyliss. It is further alleged that the defendants then resold the counterfeit goods as authentic, for top dollar, to the American public.
Allegedly at the direction of Voudouris, Sr., in a scheme to drive consumers to their website and maximize profits, Misikko.com also purported to sell "Breast Cancer Awareness" products. The Misikko.com website was designed to make consumers believe that breast cancer charities would benefit from the purchase of certain pink products. For some products, Misikko.com represented that $25 from every purchase would benefit a prominent breast cancer foundation. It is alleged, however, that no donations were ever made to a breast cancer charity.
If convicted of all charges, Stephen Voudouris, Sr. faces a potential advisory guideline sentencing range of 33 to 41 months in prison, a three-year period of supervised release, a fine of up to $1 million, and a $400 special assessment; Yung Chung and Jaimmy Chun each face a potential advisory sentencing guideline range of 24 to 30 months in prison, a three-year period of supervised release, a fine of up to $750,000, and a $300 special assessment. Each defendant is also responsible jointly and severally for full restitution of approximately $150,346.
The case was investigated by Homeland Security Investigations with the assistance of the Federal Reserve Board Office of the Inspector General. It is being prosecuted by Assistant United States Attorneys Alicia M. Freind and Mary E. Crawley.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Thirty Year-Old Man Found Guilty of Transportation of an 8-10 Year-Old Minor with the Intent to Engage in Criminal Sexual ConductRead the Press Release
SAN JUAN, P.R. – After a four-day jury trial, Randy Charriez-Rolón was found guilty of two counts of transportation of a minor with intent to engage in Criminal Sexual Conduct and one count of possession of child pornography, announced United States Attorney Rosa Emilia Rodríguez-Vélez. Chief United States District Court Judge Aida Delgado-Colón presided over the trial.
According to the Superseding Indictment, the defendant transported a minor, identified as “John Doe,” to, among other places, a park near his school and to the parking lot of public swimming pool, both located in Toa Alta, Puerto Rico, where he sexually abused the minor inside his heavily tinted car.
During trial, the government presented evidence that Charriez-Rolón purchased numerous gifts for John Doe as an enticement for engaging in the illicit sexual conduct and also threatened to harm John Doe and his parents if he did not agree to continue engaging in such conduct.
“This case revealed the disturbing truth that some adults will go to great lengths to sexually exploit minors. The conviction of this predator showed the commitment of our state and federal law enforcement agencies to apprehend and prosecute criminals that victimize our children,” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “The U.S. Attorney’s Office for the District of Puerto Rico will continue to prosecute sexual predators in order to protect the vulnerable victims of these crimes, our children.”
The case was prosecuted by Assistant United States Attorney Marshal Morgan and Special Assistant United States Attorney Cristina Caraballo. The now convicted defendant faces a maximum penalty of up to life imprisonment. The sentencing is scheduled for October, 2015, and the defendant was remanded to the custody of the U.S. Marshals.
Third Individual Pleads Guilty to Investment FraudRead the Press Release
Ocala, Florida – United States Attorney A. Lee Bentley, III announces that Jenifer E. Hoffman (38, Clermont) has pleaded guilty to conspiracy to commit wire fraud and to making a false tax return. She faces up to 20 years in federal prison for the conspiracy charge and up to 3 years in federal prison for the false tax return charge. Hoffman has also agreed to pay more than $11.6 million in restitution to her victims. A sentencing date has not yet been set.
According to court documents, Hoffman and her two conspirators, John C. Boschert (43, Apopka) and Bryan T. Zuzga (37, Coldwater, Michigan), defrauded over 100 victims out of more than $11 million through investments offered in connection with a company called Assured Capital Consultants. As part of their solicitations, the conspirators represented to investors that money would be placed in a Performing Private Placement Investment, and that Boschert had connections to the trading program being used. Investors were told that their investments would be safe and that none of their money would leave the attorney escrow account that belonged to Zuzga, who was represented as being an attorney licensed in Florida. Investors were further advised that their funds would be used as collateral for a line of credit, which would then be used in trading.
None of those representations were true. Zuzga was not an attorney licensed in Florida or any other state, and the funds were not deposited into any escrow account controlled by him. Instead, the three operated a scheme in which money from later investors was paid to earlier investors. They also used some of the money from the scheme for themselves, including purchasing residences for Hoffman and Zuzga.
In a prior civil proceeding, the United States forfeited two residences belonging to Hoffman and Zuzga, which had been purchased with proceeds from the scheme. The United States obtained more than $850,000 from the sale of the properties. The proceeds from those sales were distributed to the victims of the scheme.
Boschert and Zuzga previously pleaded guilty to conspiracy to commit wire fraud. On June 23, 2015, Boschert was sentenced to nine years in federal prison. Zuzga’s sentencing date has not yet been set.
This case was investigated by the Internal Revenue Service – Criminal Investigation, the United States Secret Service, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Roger B. Handberg, James Mandolfo, and Nicole M. Andrejko.
Texas Man Pleads Guilty to Federal Hate Crime for Assaulting an Elderly African-American ManRead the Press Release
A man from Katy, Texas, has entered a guilty plea to a federal hate crime related to the racially-motivated assault of an 81-year-old African-American man, announced Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Conrad Alvin Barrett, 29, was charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. On Nov. 24, 2013, he attacked the elderly African-American man because of the man’s race and color in what Barrett called a “knockout.”
At the hearing today, evidence revealed that Barrett recorded himself on his cell phone attacking the African-American man. In the recording, Barrett questions whether there would be national attention if he attacked a person of color. Barrett also claimed he would not hit “defenseless people” just moments before punching the elderly man in the face and with such force that the victim immediately fell to the ground. Barrett then laughed and said “knockout,” as he ran to his vehicle and fled. The victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.
“This was a senseless and heinous act of violence that was committed simply because the victim was African American,” said Principal Deputy Assistant Attorney General Gupta. “The Department of Justice will continue to use every tool in our arsenal to vindicate the rights of victims of violent crimes.”
“The defendant’s admissions today resolve any question as to his guilt and are consistent with what we had planned to present at trial,” said U.S. Attorney Magidson. “We do not take criminal civil rights violations lightly and are now prepared to move forward at sentencing to fully advocate for the appropriate punishment in this case.”
The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act was passed on Oct. 22, 2009, and signed into law by President Barack Obama six days later. Shepard was a gay student who was tortured and murdered in 1998 near Laramie, Wyoming. Byrd was an African-American man who was tied to a truck by two white supremacists, dragged behind it and decapitated in Jasper, Texas, in 1998.
U.S. District Judge Gray Miller of the Southern District of Texas accepted Barrett’s plea today and has set sentencing for September 18, 2015. At that time, he faces up to 10 years in federal prison and a $250,000 fine.
The charges are the result of an investigation conducted by the FBI in cooperation with the Fulshear, Texas, and Katy Police Departments as well as the Drug Enforcement Administration. Civil Rights Division Trial Attorneys Saeed Mody and Olimpia Michel are prosecuting the case along with Assistant U.S. Attorneys Ruben R. Perez and Joe Magliolo of the Southern District of Texas, in cooperation with District Attorney John Healey of Ft. Bend County, Texas.
Telemarketer Pleads Guilty Role in Multi-Million Dollar ScamRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Patrick A. Nosack, 34, of Henderson, Nevada, pled guilty in federal court this morning to conspiracy to commit mail and wire fraud in connection with telemarketing. Nosack faces maximum penalties of 25 years in federal prison, a $250,000 fine, five years of supervised release, and a $100 special assessment. Nosack is being held without bond pending his sentencing, which is set for Thursday, September 17, 2015.
The charge arose out of a telemarketing scam which operated in Las Vegas, Nevada, which bilked over 3,000 victims of approximately 10 million dollars. Consumers were victimized in all fifty states, the District of Columbia and Puerto Rico, all ten Canadian provinces and the Northwest Territory of Canada, as well as Australia, Israel and the United Kingdom. There were at least twelve victims in nine of the thirty-eight counties comprising the Southern District of Illinois. The scheme operated from December 5, 2006, until January 24, 2012.
Nosack was a telemarketer at a telemarketing company, called Vacation Max, which operated a timeshare resale scam. The company purported to be a Georgia corporation located in Delaware, but actually operated in Las Vegas, Nevada. The company falsely represented that they had found corporate buyers interested in acquiring blocks of timeshare units including the consumer's timeshare unit for purported business and tax purposes. The company solicited fees of up to several thousand dollars from each timeshare owner in purported pre-paid closing costs and related expenses. Like all such scams, none of the purported sales occurred and Vacation Max did not successfully sell any consumer’s timeshare interest except a relatively small number at fire sale prices.
This prosecution is one of nearly 100 timeshare resale fraud prosecutions brought in the Southern District of Illinois over the past four years. The case is part of an ongoing investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service. The prosecution of this case is being handled by Assistant United States Attorneys William E. Coonan and Michael Hallock.
Statement of U.S. Attorney Damon P. Martinez on Gaming at Pueblo of PojoaqueRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez released the following statement on the expiration of the gaming compact between the Pueblo of Pojoaque and the State of New Mexico:
“The gaming compact between the Pueblo of Pojoaque and the State of New Mexico expires today, June 30, 2015. The inability of the Pueblo and the State to reach an agreement on terms for a new compact has resulted in a lawsuit, New Mexico v. U.S. Department of the Interior, et al., which is now pending in the U.S. Court of Appeals for the Tenth Circuit. The failure of the Pueblo and State to reach an agreement has also resulted in uncertainty as to what will happen to the Pueblo’s gaming facilities after today.
“I believe that the public interest is best served by maintaining the status quo while the appeal in the Tenth Circuit litigation is pending. I therefore have advised the Pueblo and the State that I will exercise my discretion not to bring an enforcement action against the Pueblo during the pendency of the appeal so long as the Pueblo continues to operate its gaming facilities in accord with the terms of its expiring compact to the extent feasible. The Pueblo has given its commitment to me that it will comply with this condition, and I have warned the Pueblo that any failure by the Pueblo to live up to this commitment during the pendency of the appeal may result in an enforcement action to shut down the Pueblo’s casino-style gambling operations. To ensure that I can meaningfully assess whether the Pueblo is complying with the terms of the expiring compact, the Pueblo has agreed to regularly provide me with detailed information that allows me to do so on a timely basis.
“Through the Tenth Circuit litigation, the State, the U.S. Department of the Interior and the Pueblo are each seeking to determine their respective rights and their authority to enter into lawful gaming compacts. I believe it is important to permit the parties to that litigation to receive the benefit of the Tenth Circuit’s ruling on the appeal, without the process being short-circuited by premature closure of the Pueblo’s casino gambling activities. My decision will (i) maintain the status quo to the extent feasible, (ii) protect the interests of all residents of the Pojoaque Valley, (iii) shield the other gaming tribes of New Mexico from unfair competitive disadvantage, and (iv) safeguard funds that would have gone to the State of New Mexico as revenue sharing had the current compact been extended.
“In making this decision, I am mindful of my responsibilities as the chief federal law enforcement official in New Mexico, which includes enforcement of federal Indian gaming laws. The Indian Gaming Regulatory Act, which is the principal law at issue, prohibits tribes from conducting casino-style gambling in the absence of a duly authorized compact. I recognize the effects that uncompacted gaming by the Pueblo could have on the State and on other tribes, both gaming and non-gaming. All other gaming tribes are making revenue sharing payments to the State, the size of which vary according to each tribe’s compact and the dollar amount of their ‘net win.’ Uncompacted gaming by Pojoaque Pueblo without continued revenue sharing to the State would put other gaming tribes at an unfair competitive disadvantage. On the other hand, I also recognize that premature cessation of Pojoaque Pueblo gaming could have detrimental impacts on state tourism, and on employment and services for the people of the Pojoaque Valley.
“Under the terms of the expiring compact, Pojoaque Pueblo was obliged to pay eight percent of its ‘net win’ as revenue sharing to the State of New Mexico. The 2015 form compact approved by the New Mexico legislature that has been accepted by several other gaming tribes provides for this rate to rise as high as ten percent in 2018. Representatives of the State have advised me that they cannot accept payment of revenue sharing funds from Pojoaque Pueblo on gaming proceeds obtained after June 30 in the absence of a valid compact. In keeping with my decision to maintain the status quo during the pendency of the appeal to the extent feasible, the competitive disadvantage at which other gaming tribes would be placed if Pojoaque Pueblo were to conduct casino-style gaming without making revenue sharing payments will be mitigated by the Pueblo’s commitment to set aside the funds that would have gone to revenue sharing for eventual distribution pursuant to a negotiated compact or other appropriate court action after resolution of the appeal. The funds will be deposited into an account overseen by an independent trustee. Here too, the Pueblo has committed to regularly providing me with detailed information that will allow me to verify that the Pueblo is complying with its promise to safeguard the revenue sharing funds that would have gone to the State.
“Among the safeguards that were written into the expiring compact between the Pueblo and the State were requirements that the Pueblo maintain a tribal gaming agency to provide for the physical safety of patrons and of personnel of gaming enterprises; to provide for protection of property of patrons and the gaming enterprise from illegal activity; and to detain persons who may be involved in illegal acts for the purpose of notifying law enforcement authorities. The Pueblo has committed to continued compliance with these terms during the pendency of the Tenth Circuit appeal. Likewise, the Pueblo has committed to continued compliance with the other terms of the expiring compact, including but not limited to prohibition on casino-style gambling by persons under the age of 21, and prohibition on employment of gaming employees who are under the age of 21 or who are not licensed in accordance with federal and tribal law. The Pueblo has also committed to continued compliance with the terms of the expiring compact pertaining to fair gaming practices, including but not limited to posting the odds of a winning outcome on each machine; ensuring minimum payouts of at least 80 percent; maintaining current limitations on alcohol sales; and prohibiting acceptance of IOUs from patrons.
“I have advised the Pueblo that it is up to me to determine whether or not the Pueblo has complied with its commitments, and that I reserve the right to seek closure of the Pueblo’s casino gambling operations in the event of any noncompliance. Moreover, my decision not to bring an immediate enforcement action upon expiration of Pojoaque Pueblo’s current compact only extends to the limited period of time until the Tenth Circuit Court of Appeals rules on the pending litigation.”
150630_usa_letter_to_gov_talachy.pdf (624.99 KB) 150628_gov_talachy_letter_to_usa.pdf (3.71 MB)
South Sioux City Man Sentenced to 235 months in Prison on Methamphetamine and Firearm ChargesRead the Press Release
United States Attorney Deborah R. Gilg announced that Jacob W. Deng, 33, was sentenced on June 29, 2015, to 235 months in prison after a jury trial resulted in guilty verdicts on charges of Conspiracy to Distribute Methamphetamine, Distribution of Methamphetamine, Possession with Intent to Distribute Methamphetamine and Marijuana, and Felon in Possession of a Firearm. On April 3, 2015, Deng was found guilty of all charges after a two and a half day jury trial before the Honorable Laurie Smith Camp, United States District Judge.
The evidence presented at trial revealed that on April 17, 2014, South Sioux City DEA Task Force Officers executed a search warrant on Deng’s South Sioux City apartment and discovered approximately two ounces of crystal methamphetamine, multiple ounces of marijuana, drug packaging materials, over $7,000 in cash, and two firearms. Prior to the execution of the search warrant, Deng delivered methamphetamine to a cooperating witness while inside his apartment. At the time of the delivery Deng had a prior felony conviction for delivery of a controlled substance.
This case was the result of an investigation by the South Sioux City Police Department and DEA Tri-State Drug Task Force.
Serial Bank Robber Pleads GuiltyRead the Press Release
MEDFORD, Ore. - On Monday, June 29, 2015, Bradley William Monical pled guilty to bank robbery and weapons charges related to a string of armed bank robberies he committed in 2010. Monical pled guilty to three armed bank robberies that occurred in Medford, Klamath Falls and Redmond, Oregon. He also pled guilty to using a firearm in connection with a violent crime based on his use of a handgun in the Medford and Klamath Falls robberies. Monical also pled guilty to three armed bank robberies that occurred in Washington and an additional bank robbery that occurred in Idaho.
Monical was in custody on pending bank robbery charges when he escaped from the Jackson County Jail on November 19, 2012. Monical was later found in Oregon City and was arrested by the United States Marshals. At the time of his arrest, he was found with his girlfriend, Carolyn Gibson. Gibson pled guilty to concealing a person from arrest for providing money and a vehicle for Monical after his escape. Gibson was sentenced to probation on February 2, 2015.
Monical is scheduled to be sentenced on September 23, 2015, before the Honorable Michael McShane.
This case was investigated by the Medford Police Department, the Jackson County Sheriff’s Office, the FBI, and the United States Marshals Service, and was prosecuted by Assistant U.S. Attorney Judith R. Harper.