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Monday 29 June 2015
Lackawanna Man Sentenced on Drug Conspiracy ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that Andre Jones, Jr., 27, of Lackawanna, NY, who was convicted of conspiracy to possess with intent to distribute and to distribute crack cocaine, was sentenced to 41 months in prison by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney John M. Alsup, who handled the case, stated that on multiple occasions between August 30, 2012 and February 8, 2013, the defendant was involved in the sale of cocaine and crack cocaine on multiple occasions to an confidential source working with the Drug Enforcement Administration.
The sentencing is the culmination of an investigation by the Lackawanna Police Department, under the direction of Chief James Michel and the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division.
John Muir Health Agrees to Pay $550,000 to Resolve False Claims AllegationsRead the Press Release
SAN FRANCISCO – John Muir Health has agreed to pay the government $550,000 to resolve allegations that it submitted false claims for Medicare reimbursement, announced United States Attorney Melinda Haag, Department of Health and Human Services Office of Inspector General (OIG) Special Agent in Charge Ivan Negroni, and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
The settlement, unsealed by U.S. District Judge Samuel Conti, resolves a whistleblower lawsuit filed in the United States District Court for the Northern District of California. The United States’ investigation revealed that between January 1, 2009, and December 31, 2013, physicians who were contracted with John Muir Health to deliver radiation therapy failed to adequately supervise that treatment. The proper supervision of radiation therapy is a condition of payment for Medicare.
A former employee of John Muir Health filed the case pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. §§ 3729-33. Under those provisions, private citizens, known as “relators,” may file lawsuits on behalf of the United States and receive a portion of a settlement or judgment. In this case, the relator will receive $110,000 as her share of the government’s recovery.
Assistant U.S. Attorney Melanie L. Proctor handled the matter on behalf of the U.S. Attorney’s Office for the Northern District of California, with assistance of Paralegal Tiffani Chiu. The settlement with John Muir Health is the result of an investigation by the OIG and the Federal Bureau of Investigation.
Hyattsville Man Pleads Guilty to Fraudulent Tax Refund SchemeRead the Press Release
Greenbelt, Maryland – Norman D. West, age 48, of Hyattsville, Maryland and Washington, D.C. pleaded guilty today to conspiracy to commit theft of public money in connection with a fraudulent tax refund scheme.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Jeffrey S. DeWitt, Chief Financial Officer of the Washington, D.C. Office of Tax and Revenue, Criminal Investigation Division; and John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General.
According to West’s plea agreement, West is a musician and operated a putative tax preparation business known as “Flash Cash Financial,” or “Flash Cash,” which had a purported business address in Baltimore, Maryland.
West and his co-conspirators obtained the personal information of “recruits” which West used to file false tax returns in order to generate a fraudulent refund. West initially marketed his scheme using flyers placed in low income areas and the relied upon word of mouth. West paid a co-conspirator a $100 referral fee per recruit. West and his co-conspirators obtained the identities of at least 197 individuals. Using the personal information of those individuals, West made up the rest of the tax returns in order to generate refunds. West listed false wages, falsely claimed educational tax credits, and falsely claimed earned income tax credit.
West filed 197 federal tax returns that claimed $391,553 in fraudulent tax refunds, all of which was issued by the IRS. In addition, West filed 28 fraudulent returns with the District of Columbia, which generated an additional $16,668.30 in fraudulent refunds. All of the refunds were deposited in bank accounts opened by West in the name of Flash Cash. West paid the recruits a small portion of the fraudulent refunds, usually about $500, and kept the rest for himself and his co-conspirators.
The total tax loss is $408,221.30, which is the amount West is required to pay in restitution as part of his plea agreement. West faces a maximum sentence of five year in prison. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for September 21, 2015 at 1:00 p.m.
United States Attorney Rod J. Rosenstein commended the IRS-CI, the Washington, D.C. Office of Tax and Revenue, Criminal Investigation Division, and the Department of Treasury Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory R. Bockin, who is prosecuting the case.
Harford County Cocaine Dealer Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Eric Maurice Clanton, age 35, of Edgewood, Maryland today to 10 years in prison followed by five years of supervised release for conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Special Agent in Charge Shawn Ellerman of the Drug Enforcement Administration, Baltimore District Office; Harford County Sheriff Jeffrey R. Gahler; Chief Henry Trabert of the Aberdeen Police Department; Bel Air Police Interim Chief Jack Meckley; Chief Teresa Walter of the Havre de Grace Police Department; and Harford County State’s Attorney Joseph I. Cassilly.
According to his plea agreement, as part of an investigation into cocaine trafficking, the Harford County Narcotics Task Force intercepted cellular telephone calls and text messages from members of a drug trafficking organization operating in Harford County. Based on the intercepted calls and texts, Eric Clanton was identified as a member of the organization.
For example on August 26, 2014, investigators intercepted a series of text messages between Clanton and a co-conspirator in which they discussed Clanton and a courier traveling to Philadelphia, Pennsylvania, to obtain cocaine. Clanton also discussed which source of supply to use. On September 27, 2014, Clanton and a courier traveled to Philadelphia to meet with a cocaine source of supply. An intercepted conversation between the source and Clanton revealed that Clanton had paid the source $63,410, but owed the source another $190. Based on Clanton’s conversation with the source, law enforcement believes Clanton purchased approximately two kilograms of cocaine, since the cost of a kilogram of cocaine at that time was $30,000 to $35,000.
On October 6, 2014, Clanton and a courier again traveled to Philadelphia to meet the same source of supply. The vehicle operated by Clanton was stopped on its return to Maryland. A search of the vehicle recovered approximately 1.25 kilograms of cocaine.
Clanton admits that he made numerous trips to Philadelphia to obtain cocaine, which was then transported to Harford, Cecil and Baltimore Counties, where Clanton and other members of the conspiracy redistributed the drugs. During his participation in the conspiracy, Clanton was responsible for the distribution of at least five kilograms of cocaine.
United States Attorney Rod J. Rosenstein praised HSI Baltimore and Harford County Narcotics Task Force, comprised of members of the Harford County Sheriff's Office, Maryland State Police, Aberdeen Police Department, Bel Air Police Department, Havre de Grace Police Department and the Harford County States Attorney’s Office. Mr. Rosenstein thanked Assistant U.S. Attorney Christopher J. Romano, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Gurdon Man Convicted of Federal Kidnapping Charge Resulting in DeathRead the Press Release
Hot Springs, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Kevin Bolton, age 39, of Gurdon, Arkansas, pleaded guilty today to one count of Kidnapping Resulting in Death. The Honorable Susan O. Hickey accepted the change of plea in the United States District Court in Hot Springs.
U. S. Attorney Eldridge commented, “This was a horrendous, despicable crime. We will not tolerate acts of violence in our communities, and we will stand up for victims of crime and their families across Arkansas. I appreciate all of the hard work by Clark County Sheriff, Jason Watson and Clark County Prosecuting Attorney, Blake Batson in cooperating to see that justice was done in this case.”
“This was an extraordinary investigation conducted by Sheriff Jason Watson, his deputies, and Special Agent, Scott Clark with the Arkansas State Police,” stated Clark County Prosecuting Attorney, Blake Batson. “Their efforts and the work of U. S. Attorney Conner Eldridge brought justice to this case. We are hopeful that this sentence will bring some closure to this family.”
“I believe justice has been served today for Cassie and her family,” stated Clark County Sheriff, Jason Watson. “I appreciate the work by U.S. attorney Eldridge, Prosecuting Attorney Blake Batson, and everyone involved in this case. There were multiple agencies involved throughout Arkansas and North Carolina. Without their assistance this would not have been possible.”
According to court records, on March 12, 2013, the now deceased victim, visited an apartment in Gurdon, Arkansas, where she encountered the defendant, Kevin Bolton, a Gurdon resident. According to statements made by witnesses, the defendant and the victim left the apartment together around midnight in her vehicle. The victim’s mother, after repeatedly and unsuccessfully trying to contact her daughter the next day, became alarmed and filed a missing person’s report with the Gurdon, Arkansas Police Department.Because Bolton was the last person known to be seen with the victim, a BOLO was issued for Bolton, the victim, and her vehicle. Law enforcement officials learned that Bolton had friends on the Cherokee Indian Reservation in North Carolina and sent the BOLO to the Cherokee Indian Police Department there.On March 20, 2013, Cherokee Indian Police officers located Bolton driving the victim’s vehicle and conducted a traffic stop. After smelling a strong odor, officer’s opened the trunk of the car where they found the victim’s body.Bolton was arrested and taken into custody; he waived extradition and agreed to return to Arkansas for prosecution.Clark County Sheriff, Jason Watson, traveled to Cherokee, North Carolina, to interview Bolton and transport him back to Arkansas. After being read his Miranda warning, Bolton told Sheriff Watson that he had accompanied the victim around midnight on March 12th.He admitted that he and the victim had argued outside her parked car and that he grabbed her around her neck and choked her until she fell to the ground.He stated that he choked her until he believed she was dead and then put her in the backseat of her car. After he was arrested and returned to Arkansas, Bolton led Sheriff Watson to the place where he had choked her and put her in the backseat of her car. That location is in Clark County, Arkansas, within the Western District of Arkansas, Hot Springs Division.Bolton told Sheriff Watson he drove the victim’s vehicle until he heard gagging and choking, so he stopped the car, choked her again, and put her in the trunk of her vehicle.Bolton stated that he believed she was still alive when he placed her inside the trunk and began driving out of Clark County towards Little Rock, Arkansas, where he claimed he spent time with strangers he met on the street. He stated he next drove with her inside the trunk to Cherokee, North Carolina to visit a friend, where he parked the vehicle to hide the rear license plate, and told people the trunk of the vehicle could not be opened because it was bolted shut. An autopsy conducted in North Carolina identified the victim through dental comparison, and ruled the cause of death was asphyxiation due to strangulation.
On January 29, 2014, a Federal Grand Jury issued an indictment against Bolton charging him with one count of kidnapping resulting in death. Bolton will be sentenced on a later date. The statutory penalty for the offense is life imprisonment.
This case was investigated by the Clark County Sheriff’s Office with assistance from the FBI and the Sheriff’s Office of Cherokee, North Carolina. United States Attorney Conner Eldridge and Assistant United States Attorney Kyra Jenner are prosecuting the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Glencoe CampResort II L.L.C. and California Man Sentenced for Clean Water Act ViolationsRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that Glencoe CampResort II L.L.C. of rural Meade County, South Dakota, and Sean Clark from Hacienda Heights, California, pled guilty to and were sentenced for Clean Water Act violations on June 22, 2015, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Sean Clark, age 48, pled guilty to Knowing Discharge of a Pollutant From a Point Source Into a Water of the United States. Glencoe CampResort II, L.L.C., through its managing partner Devorah Lopez, pled guilty to Negligent Discharge of a Pollutant From a Point Source Into a Water of the United States. In accordance with the terms of the negotiated plea agreement, Clark and Glencoe CampResort II were each sentenced to four years of probation, with terms to include complying with an Administrative Order of Consent with the Environmental Protection Agency (EPA), preparing and following an Environmental Compliance plan, and a fine and Community Service payment of $250,000. Clark will also be required to perform 100 hours of community service in South Dakota.
The fine and community service are to be paid jointly and severally between the two Defendants. Of the $250,000, $83,000 was ordered to Meade County to be used for environmental purposes, $83,000 was ordered to the South Dakota Department of Environment and Natural Resources (DENR), and $84,000 was ordered to the United States.
“This case is a prime example of the Federal government working closely with the State, local communities, businesses, and concerned individuals to ensure our water sources remain safe and well suited for multi-purpose use,” said Acting U.S. Attorney Randy Seiler. “Public awareness and support for protecting and enhancing water quality has led to even more vigorous enforcement of environmental laws. And people who intentionally jeopardize water supplies will pay the consequences, as evidenced by the sentence handed down.”
Clark and Lopez purchased Glencoe CampResort II, L.L.C. in January 2009. Bear Butte Creek runs through Glencoe and is a designated cold water fishery by the State of South Dakota. The Creek has been designated as a navigable water of the United States by the United States Army Corps of Engineers. During the Sturgis Motorcycle Rally, the Creek is used by campers at Glencoe for recreational purposes. The Creek is also used by other downstream property owners for watering livestock on their properties.
In July 2012, concerned citizens called the DENR Water Rights program and the United States Army Corps of Engineers to complain about the lack of water in the Creek. As a result, a DENR representative made a site visit to Glencoe, and observed that a dirt dam had been constructed across the Creek impounding water.
It was determined that the dam at the Campground was approximately 75 feet across, 20 feet wide, and 6 feet high, and that approximately 500 cubic yards of material was used to construct the dam, and that the impounded water created a pool approximately 500 feet upstream. Due to the illegal construction of the dam without valid permits, both DENR and the Corps of Engineers issued a Notice of Order to Discontinue Illegal Use of Water and Notice of Violation and Cease and Desist letter to Glencoe. The dam at Glencoe was not removed as ordered, and litigation ensued.
“Federal waterways are regulated to protect water quality, wildlife and human health,” said Jeffrey Martinez, Special Agent in Charge of EPA’s criminal enforcement program in South Dakota. “The defendants’ failure to secure the required permits jeopardized the overall health of Bear Butte Creek, resulting in fish kills and a loss of water for livestock. Today’s sentence demonstrates that EPA and its law enforcement partners will remain vigilant in protecting our local water supplies on which communities depend.”
The investigation was conducted by the EPA, Meade County State’s Attorney’s office, Meade County Sheriff’s Office, DENR, U.S. Army Corps of Engineers, and the South Dakota Attorney General’s Office. The case was prosecuted by Assistant U.S. Attorney Meghan N. Dilges.
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Franklin County Man Indicted on Federal Drug and Weapons ChargesRead the Press Release
St. Louis, MO – BRIAN HENRY JONES, St. Clair, Missouri, was indicted involving his alleged drug activities in Franklin County.
Jones was indicted by a federal grand jury on June 24 for multiple felony counts, including being a felon in possession of a firearm, possession of a sawed-off shotgun, manufacturing methamphetamine, maintaining a drug involved premises and possession of a firearm in furtherance of a drug trafficking crime. He appeared for arraignment in federal court this afternoon in St. Louis.
If convicted, these charges carry penalties ranging from five years to life in prison. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Franklin County Sheriff’s Office, the Multi-County Narcotics and Violent Crimes Enforcement Unit and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Cristian M. Stevens is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Four Jacksonville Residents Charged with Immigration FraudRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Jacksonville residents Mark Laurence Barlaan (35), Winnie Rabaya Barlaan (64), Mary Helen Amaba Barlaan (32), and Peter Laforteza Barlaan (62) with marriage fraud, immigration document fraud, lying to a federal agency, and conspiracy to commit those crimes. The indictment also charges Mary Baarlan with fraudulently obtaining U.S. citizenship. If convicted on all counts, each faces a maximum penalty of 15 to 25 years in federal prison.
According to the indictment, each of the four charged individuals was born in the Philippines. Winnie Barlaan and Peter Barlaan later became naturalized U.S. citizens. Mary Barlaan entered the United States with a temporary visitor’s visa in November 2007, and Mark Barlaan entered the country with a temporary work visa in December 2008.
Mark Barlaan is Peter Barlaan’s son. Before Mark and Mary Barlaan came to the United States, they were in a romantic relationship with each other, and that relationship continued after they came to the United States.
On September 9, 2009, the day after Peter Barlaan became a U.S. citizen, he married Mary Barlaan, his son’s girlfriend. On October 25, 2011, Mark Barlaan and Winnie Barlaan were married. The indictment alleges that the defendants entered into these marriages for the purpose of fraudulently obtaining legal permanent residence and citizenship for Mark and Mary Barlaan. The indictment further alleges that Peter Barlaan paid Winnie Barlaan several thousand dollars in exchange for her marrying Mark Barlaan and cooperating in the immigration proceedings.
Under U.S. immigration law, aliens married to U.S. citizens are given priority in the granting of immigration benefits. By marrying U.S. citizens, Mark and Mary Barlaan could obtain these benefits faster and without meeting the requirements applicable to persons who are not married to U.S. citizens.
The indictment alleges that the individuals made false statements on documents submitted to immigration authorities in an attempt to conceal the fact that they had committed marriage fraud, and that false statements were made in interviews and during other encounters with immigration officers.
On June 5, 2013, Mary Barlaan became a naturalized citizen of the United States. The indictment provides notice that upon a conviction for obtaining naturalization by fraud, Mary Barlaan’s citizenship will be revoked.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Citizenship and Immigration Services. It will be prosecuted by Assistant United States Attorney Arnold B. Corsmeier.
Fort Thompson Man Sentenced for Assault Resulting in Serious Bodily Injury and Assaulting a Federal OfficerRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, man convicted of Assault Resulting in Serious Bodily Injury, and Assaulting, Resisting, and Impeding a Federal Officer was sentenced on June 23, 2015, by U.S. District Judge Roberto A. Lange.
Derek Kenendy, age 35, was sentenced to 27 months in custody, followed by 2 years of supervised release, and a special assessment of $200 to the Federal Crime Victims Fund.
Kennedy was indicted by a federal grand jury on December 9, 2014. He pled guilty on March 26, 2015.
The convictions stem from two separate incidents.
On July 9, 2013, one of the victims was walking home when Kennedy came up to her and hit her on the left side of her face with his fist, knocking her to the ground. While on the ground, Kennedy kicked her in the face, breaking her jaw in two places. The victim had to have her jaw wired shut for several weeks.
On October 4, 2014, the above victim and Kennedy began to argue and Kennedy hit the victim. Law enforcement was called. A Bureau of Indian Affairs (BIA) officer arrived at the home and made contact with the victim and Kennedy.
The officer attempted to arrest Kennedy, who resisted. A physical struggle ensued with the officer, as Kennedy refused to follow commands and swung at the officer.
This case was investigated by the BIA, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Kennedy was immediately turned over to the custody of the U.S. Marshals Service.
Former Woodbury Police Chief Pleads Guilty to Theft of Federal Grant FundsRead the Press Release
Kevin Mooneyham, 47, former Chief of Police for the City of Woodbury, Tennessee, pleaded guilty today before Chief U.S. District Judge Kevin H. Sharp, to theft of federal program funds, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Mooneyham was indicted on April 22, 2015.
During the plea hearing, Mooneyham admitted that, from January 2013 through February 2015, while acting in his official capacity as the Woodbury Police Chief, he submitted fraudulent timesheets for more than $28,000 in overtime hours that he had not in fact worked. The funds used to pay the false overtime hours claimed by Mooneyham were derived from federal grants provided by the National Highway Traffic Safety Administration through the Governor’s Highway Safety Office, specifically for the purpose of enhanced alcohol enforcement efforts.
Mooneyham also admitted during the plea hearing that he misrepresented to other officers of the Woodbury Police Department that federally-funded overtime was not available, despite the fact that he had been submitting and continued to submit timesheets for such overtime on his own behalf. Mooneyham further disclosed that he had misrepresented to a Town of Woodbury official that he had received a large percentage of federally-funded overtime pay because no other officers of the Woodbury Police Department were willing to perform the overtime patrols. In fact, numerous Woodbury Police officers had expressed an interest in performing such overtime patrols.
Mooneyham will be sentenced by Chief Judge Sharp on October 19, 2015. He faces up to 10 years in prison and a fine of up to $250,000, plus forfeiture of the proceeds of his offense.
The case was investigated by the Tennessee Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Bill Abely.
Former UW-Oshkosh Student Sentenced to 40 Months in Prison for Possession of RicinRead the Press Release
WASHINGTON – Kyle Allen Smith, 21, of Oshkosh, Wisconsin, was sentenced today to 40 months in federal prison for possession of ricin by the Chief District Judge William C. Griesbach of the Eastern District of Wisconsin, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney James L. Santelle of the Eastern District of Wisconsin.
Smith was arrested on October 31, 2014, after two professors at the University of Wisconsin at Oshkosh reported to campus authorities that Smith was making unusual inquiries about chemical processes, including extracting of ribosomal inhibiting protein. According to the plea agreement, Smith admitted growing castor bean plants and extracting ricin from the beans. A substance found in Smith’s residence was sent to the Department of Homeland Security’s National Bioforensics Analysis Center at Fort Detrick, Maryland, and tested positive for the toxin ricin. Ricin is a toxin that infects human cells and blocks their ability to synthesize their own protein. Small doses of ricin may be lethal to human beings if ingested, inhaled or injected. Symptoms of ricin poisoning can include difficulty breathing, nausea, vomiting and diarrhea, with possible death occurring within 36 to 72 hours. According to information posted on the website of the Centers for Disease Control and Prevention (CDC), there are no known antidotes for ricin poisoning.
Smith admitted having homicidal thoughts and that these thoughts might have sparked his curiosity about the production of ricin. He stated he would not use or test the ricin on any human because too many people knew what he was doing and would turn him in.
Assistant Attorney General Carlin joined U.S. Attorney Santelle in praising the actions of the professors and the University administration in bringing Smith to the prompt attention of law enforcement authorities. It is a perfect example of “see something, say something,” which guides the required vigilance of our times. Assistant Attorney General Carlin and U.S. Attorney Santelle also thanked the Wisconsin National Guard, 54th Civil Support Team, for the critical assistance they provided in the safe recovery of the ricin.
The case was investigated by the Oshkosh Police Department, the FBI and the University of Wisconsin – Oshkosh Police Department. The case was prosecuted by Assistant U.S. Attorney Paul L. Kanter of the Eastern District of Wisconsin and the Justice Department’s National Security Division.
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Former Owner of Medical Equipment Supply Company Sentenced for $3.5 Million Medicare and Medi-Cal Fraud SchemeRead the Press Release
The former owner of Ezcor Medical Supply was sentenced today to serve 97 months in prison for her role in a fraud scheme that resulted in $3.5 million in fraudulent claims to Medicare and Medi-Cal.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Los Angeles Region, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.
Sylvia Walter-Eze, 48, of Stevenson Ranch, California, was found guilty by a federal jury on March 20, 2015, of conspiracy to commit health care fraud, four counts of health care fraud, and one count of conspiracy to pay illegal health care kickbacks. In addition to imposing the term of imprisonment, U.S District Judge R. Gary Klausner ordered Walter-Eze to pay restitution in the amounts of $1,866,260 to Medicare and $73,268 to Medi-Cal.
The evidence presented at trial showed that Walter-Eze, the former owner of Ezcor, a durable medical equipment (DME) supply company located in Valencia, California, fraudulently billed more than $3.5 million to Medicare and Medi-Cal for DME that was not medically necessary. The trial evidence also demonstrated that Walter-Eze paid illegal kickbacks to patient recruiters in exchange for patient referrals. The evidence further showed that Walter-Eze paid kickbacks to physicians for fraudulent prescriptions for medically unnecessary, and expensive, power wheelchairs, which prescriptions Walter-Eze then used to support her fraudulent claims to Medicare and Medi-Cal. The evidence showed that, between 2007 and 2012, Walter-Eze submitted $3,521,786 in fraudulent claims to Medicare and Medi-Cal, and that she received $1,939,529 in reimbursement for those claims.
The case was investigated by the FBI, HHS-OIG’s Los Angeles Regional Office and the California Department of Justice, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. The case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team, go to: www.stopmedicarefraud.gov.
Former Law Enforcement Officer Sentenced to Federal Prison for Possession of Child PornographyRead the Press Release
In Austin today, a former Galveston Police officer and former security officer with the Texas Attorney General’s Office was sentenced to 90 months in federal prison for possession of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Sam Sparks, ordered that 60-year-old Jose Luis Gardea be placed on supervised release for a period of ten years after completing his prison term and to register as a sex offender.
On March 3, 2015, Gardea pleaded guilty to one count of possession of child pornography. By pleading guilty, Gardea admitted he possessed child pornography on a USB thumb drive, and through an email account. According to court documents, Gardea uploaded child pornography images using Tumblr, an online social media provider. A search of Gardea’s work space at the Texas Attorney General’s Office uncovered a USB thumb drive which had 178 images of females under the age of 18, many of whom were depicted in sexually suggestive and lascivious poses.
“The United States Attorney’s Office will continue to work with local, state, and federal agencies to prosecute predators who victimize children by creating, possessing, and distributing child pornography. Children are some of our most vulnerable victims. Today’s sentence ensures that Mr. Gardea has been punished and will not pose a threat to children for some time to come,” announced Acting United States Attorney Richard L. Durbin, Jr.
This investigation was conducted by the FBI together with the Texas Attorney General’s Office. Assistant United States Attorney Matthew Devlin prosecuted this case on behalf of the Government.
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Former High School Teacher Pleads Guilty to Possessing Child PornographyRead the Press Release
Greenbelt, Maryland –Peter Flynn, age 61, of Silver Spring, Maryland pleaded guilty today to possessing child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Flynn is a former special education teacher in Montgomery County. According to his plea agreement, on April 3, 2014, a Maryland State Police Corporal was conducting an online investigation into individuals sharing child pornography on a file sharing network. The MSP Corporal downloaded approximately 205 images and videos of children engaged in sexually explicit conduct that Flynn made available through the file sharing network.
On September 30, 2014, law enforcement executed a search warrant at Flynn’s residence and seized two computers from his basement. Flynn also agreed to be interviewed and admitted that law enforcement would find child pornography on his computer. A subsequent forensic analysis revealed approximately 28,785 image and 795 videos of child pornography and child erotica on the two computers, the majority of which constituted child pornography. Some of the images documented the sexual abuse of prepubescent children, including bondage and violence.
Flynn and the government have agreed that if the Court accepts the plea agreement Flynn will be sentenced to between 24 and 78 months in prison. U.S. District Judge George Jarrod Hazel has scheduled sentencing for October 19, 2015 at 10:00 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the Maryland State Police Internet Crimes Against Children Task Force and HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Conor M. Mulroe of the U.S. Department of Justice, who are prosecuting the case.
Former El Paso County Juvenile Probation Officer/Gang Member Sentenced to 18 Years in Federal Prison for Sex Trafficking ViolationsRead the Press Release
In El Paso this morning, 30-year-old Timothy Keith McCullouch, Jr., a former El Paso County Juvenile Probation Officer, who is also a Folk Nation/Gangster Disciples member, was sentenced to 18 years in federal prison for federal sex trafficking violations announced Acting United States Attorney Richard L. Durbin, Jr., Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, United States District Judge Philip R. Martinez ordered that McCullouch pay a $2,500 fine and be placed on supervised release for a period of ten years after completing his prison term.
On January 16, 2015, jurors found Timothy McCullouch, Jr. and three other gang members—25-year-old Richard Gray, 26-year-old Deion Lockhart and 24-year-old Emmanual Lockhart—guilty of conspiracy to commit sex trafficking of persons.
Testimony during trial revealed that between May 2012 and March 2013, the defendants were involved in the forced prostitution of juveniles and adults by the Folk Nation/Gangster Disciples street gang. The defendants used a combination of force, fraud, and coercion to compel their victims to engage in sexual activities for money in El Paso; Killeen, TX; Albuquerque, NM; Las Vegas, NV; and, in Colorado.
On June 26, 2015, Judge Martinez sentenced Emmanual Lockhart to 20 years imprisonment, Deion Lockhart to 25 years imprisonment, and Richard Gray to life imprisonment for their roles in the sex trafficking scheme.
This investigation was conducted by the ACTeam (Anti-Trafficking Coordination Team) comprised of personnel from Homeland Security Investigations (HSI), Federal Bureau of Investigation (FBI), and U.S. Department of Labor together with the El Paso Police Department Gang Unit and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Assistant United States Attorneys Rifian Newaz and Robert Almonte prosecuted these defendants on behalf of the Government.
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Former DEA Employee Sentenced to Two Years in Prison for Credit Card Fraud SchemeRead the Press Release
Used Fraudulently Acquired Government Credit Cards to Obtain Over $113,000 in Cash
A former Drug Enforcement Administration (DEA) employee was sentenced today to two years in prison for defrauding JPMorgan Chase & Co. out of more than $113,000 using fraudulently issued government credit cards.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Michael P. Tompkins of the the Department of Justice Office of the Inspector General’s (DOJ OIG) Washington, D.C. Field Office made the announcement.
Keenya Meshell Banks, 41, of Upper Marlboro, Maryland, pleaded guilty in April 2015 to one count of wire fraud. In addition to imposing the term of imprisonment, U.S. District Judge Deborah K. Chasanow ordered Banks to pay restitution in the amount of $113,841.
According to her plea agreement, Banks was employed by the DEA as a Program Manager, and was responsible for the approval and issuance of government credit cards to DEA employees. Banks admitted that, while serving in that role, she submitted dozens of fake credit card applications to JPMorgan Chase & Co. for fictitious DEA employees, using names and identifying information of individuals who did not work at the DEA. In at least one instance, however, Banks submitted the identifying information of an actual DEA employee. Through this scheme, Banks admitted that she obtained at least 32 fraudulent credit cards, which she then used to withdraw more than $113,000 from ATMs in Maryland and Northern Virginia. As part of her plea agreement, Banks agreed to forfeit the proceeds she received as a result of the scheme and to pay full restitution.
The case was investigated by the DOJ OIG. The case was prosecuted by Trial Attorneys Richard B. Evans and Justin Weitz of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Thomas P. Windom of the District of Maryland.
Former Community College Employee Charged with Theft for Using College Funds to Purchase $179,500 of Items and Selling Them OnlineRead the Press Release
CHARLOTTE, N.C. – A criminal bill of information was filed today in federal court charging Mary S. Sherrill, 52, of Hickory, N.C. with theft of a program receiving federal funds, for using her employer’s funds to purchase approximately $179,000 worth of items and selling them over the Internet, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.
Robert W. Rolin, Jr. Acting Special Agent in Charge of the United States Secret Service, Charlotte Field Office joins Acting U.S. Attorney Rose in making today’s announcement.
According to filed court documents, from about October 2010 to December 2014, Sherrill was employed by Catawba Valley Community College in Hickory as purchasing coordinator. Court records show that as the college’s purchasing coordinator, Sherrill was authorized to place orders for equipment and other goods on behalf of the college and to pay using the college’s funds. Filed court documents show that Sherrill fraudulently and without authority used the college’s funds to purchase computer hard drives, printer cartridges, and other small computer-related items. According to court records, Sherrill then sold the items via the Internet using her personal eBay seller account and kept the profits. Court records show that Sherrill purchased approximately $179,000 worth of items using the college’s monies.
A signed plea agreement was also filed in federal court today, and Sherrill is expected to enter her guilty plea before a U.S. Magistrate judge when the hearing is scheduled by the Court. The charge levied against Sherrill carries a maximum of 10 years in prison and a $250,000 fine. As part of her plea agreement, Sherrill has agreed to pay restitution, the amount of which will be determined by the Court.
The case was investigated by the U.S. Secret Service. Assistant U.S. Attorney Corey F. Ellis is in charge of the prosecution.
Former CEO and CFO of the Bank of Oswego Indicted for Conspiracy to Commit Bank FraudRead the Press Release
PORTLAND, Ore. – A federal grand jury returned an indictment charging Diana Yates of Sherwood, Oregon and Dan Heine, of Naples, Florida, with one count of conspiring to defraud The Bank of Oswego. The grand jury also charged Heine and Yates with 26 counts of false entries in bank records. Both were arrested on Friday and Yates made her appearance in Portland, Oregon before the Honorable John Acosta. Heine was arraigned in the Middle District of Florida and will make an appearance in the District of Oregon on a later date next month.
Heine is the former Chief Executive Officer of the Bank of Oswego and Yates is its former Chief Financial Officer. The indictment alleges that between September 2009 and through 2014, Heine and Yates conspired to defraud the Bank of Oswego. The purpose of the conspiracy was to deceive the Bank’s Board of Directors, its shareholders, regulators and the public by representing that the Bank was in a much better financial position than it actually was. The defendants achieved this by using Bank or third-party proceeds to pay delinquent loans of customers, mischaracterizing assets in reports to the Board of Directors of the Bank and the Federal Deposit Insurance Corporation (FDIC), and concealing information about loans to bank insiders. The indictment further alleges that Heine and Yates made false entries in the Bank’s reports to the FDIC and to the Bank’s Board of Directors about the status of various loans and transactions.
“Our community and economy depend on the integrity of our financial institutions and the officers charged with ensuring their safety and soundness,” stated Acting U.S. Attorney Billy J. Williams. “Officers who make material misrepresentations about these institutions’ financial well-being will be prosecuted in this District. We are grateful to our law enforcement partners at the FDIC Office of Inspector General and the Federal Bureau of Investigation for their work on this case.”
"The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the United States Attorney’s Office for the District of Oregon and with the Federal Bureau of Investigation (FBI) in defending the integrity of the financial services industry,” said Wade Walters, Special Agent in Charge for the FDIC’s, Office of Inspector General. “We are particularly concerned when senior bank officials, who are in positions of trust within their institutions, are alleged to have falsified financial records to deceive the regulators and the public as to the true condition of their banks. We are committed to helping maintain the safety and soundness of the Nation’s financial institutions.”
“Americans have a right to expect that their financial institutions - and the people who run them - are working to keep their money safe and secure,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon. “When that trust is broken, the impacts on the community, the shareholders and the customers are very real. As alleged in this indictment, the damage estimates can soar into the millions of dollars.”
Each charge carries a maximum sentence of thirty (30) years in prison. If convicted, the defendants face a maximum of thirty years in prison for each count.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
The Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of the Inspector General conducted the investigation. Assistant U.S. Attorneys Claire Fay and Michelle Holman Kerin are prosecuting the case.
Financial Customer Service Specialist to Plead Guilty to Bilking Sisters’ Estate of $1.2 Million DollarsRead the Press Release
PROVIDENCE, R.I. – A former financial customer service specialist for Columbia Management Investment Services (CMIS), a subsidiary of Ameriprise Financial, is expected to plead guilty in federal court in Providence to defrauding the estate of two deceased sisters from Galway, Ireland of more than $1.2 million dollars, announced United States Attorney Peter F. Neronha and Ted A. Arruda, Resident Agent in Charge of the Providence Office of the United States Secret Service.
Ronald Hunt, 44, of Collinsville, Ill., formerly of Bristol, R.I., has been charged by way of an information with one count of wire fraud. A plea agreement in this matter was filed today in U.S. District Court in Providence.
According to court documents, it is alleged that in March 2013, Hunt, while working at a CMIS call center in Providence, used his position to research deceased clients who had unredeemed Ameriprise Financial accounts and no listed beneficiaries. During his research, it is alleged that Hunt identified two such accounts belonging to deceased sisters in Galway, Ireland.
Court documents allege that in May 2013, Hunt established a fictitious business bank account at a Rhode Island bank branch office under the name “Celtic Savings,” located in Bristol, R.I. It is further alleged that two days later, Hunt applied for a mutual fund account, also under the name “Celtic Savings.”
It is alleged that on May 19, 2013, Hunt submitted redemption paperwork for the two sisters’ CMIS accounts, using the alias “Sean Kane” as the fictitious executor for both accounts. It is alleged that on May 20, 2013, using the fictitious “Sean Kane” alias, Hunt transferred $769,242.24 from one sister’s account and $459,531.91 from the second sister’s account into a CMIS account he created. Two days later he transferred the entire amount, $1,228,774.15, to the fictitious business account he created in Rhode Island.
On May 23, 2013 and again on August 29, 2013, Hunt withdrew a total of $750,000.00 from his “Celtic Savings” business account.
An information is merely an allegation 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. Wire fraud is punishable by statutory penalties of up to 20 years imprisonment and a fine of up to $250,000.
The case against Ronald Hunt is being prosecuted by Assistant U.S. Attorney Terrence P. Donnelly.
The matter was investigated by the United States Secret Service, with the assistance of the Securities and Exchange Commission, Division of Enforcement.
Criminal Information and Plea Agreement (4.97 MB)
Faulkton Man Sentenced for Possession of Ammunition by a Prohibited PersonRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Faulkton, South Dakota, man convicted of Possession of Ammunition by a Prohibited Person was sentenced on June 22, 2015, by U.S. District Judge Roberto A. Lange.
Frank Facinelli, age 43, was sentenced to 12 months and 1 day in custody, followed by 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Facinelli was indicted by a federal grand jury on July 15, 2014. He pled guilty on April 6, 2015
Facinelli, who had multiple felony convictions, was convicted of Third Offense felony Driving Under the Influence in 2012 in Faulk County. In October 2014, a parole search of Facinelli’s residence in Faulk County confirmed the presence of approximately 1,000 rounds of ammunition.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Jay Miller prosecuted the case.
Facinelli was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Eileen M. Decker Sworn in as United States AttorneyRead the Press Release
LOS ANGELES – Eileen M. Decker was sworn in today in a private ceremony as the United States Attorney for the Central District of California.
Decker was sworn in by United States District Judge Beverly Reid O’Connell in her courtroom in the United States Courthouse.
Decker now leads the largest United States Attorney’s Office outside of the District of Columbia. The office, which currently employs approximately 250 attorneys, serves more than 19 million residents in the counties of Los Angeles, Orange, Riverside, San Bernardino, Ventura, Santa Barbara and San Luis Obispo.
“It is a great honor to lead the United States Attorney’s Office,” Decker said today. “It is an office with a great legacy of prosecuting some of the most significant and difficult cases in the nation, and I look forward to building on that legacy in the years to come. I also look forward to working in close partnership with our federal, state and local law enforcement partners in achieving greater public safety throughout the district.”
After being unanimously confirmed by the United States Senate on June 11, Decker was given a four-year appointment by President Barack Obama. Decker succeeds United States Attorney André Birotte Jr., who resigned to become a United States District Judge in August 2014.
Prior to becoming the United States Attorney, Decker was the Deputy Mayor for Homeland Security and Public Safety for the City of Los Angeles, and served in the administrations of Mayor Eric Garcetti and Mayor Antonio Villaraigosa. As Deputy Mayor, Decker was responsible for matters related to the police department, fire department and emergency management department. In addition, she was the principle government liaison to all federal law enforcement agencies for the City of Los Angeles.
Decker was an Assistant United States Attorney from 1995 until 2009, during which time she prosecuted cases in the office’s national security, fraud and violent crime sections. For most of her nearly 15 years as an Assistant United States Attorney, Decker acted as a supervisor, serving as the Chief of the National Security Section (2007 - 2009), Deputy Chief of the Organized Crime and Terrorism Section (2002 – 2007), and Deputy Chief of the Organized Crime Strike Force (1999 – 2002).
From 1990 to 1991, and again from 1992 until 1995, Decker worked in private practice in Los Angeles at the law firm of Gibson, Dunn & Crutcher. From 1991 until 1992, she served as a law clerk to U.S. District Judge Gary L. Taylor in the Central District of California.
Decker received her undergraduate and law degrees from New York University. She also received a Master’s Degree in Homeland Security Studies from the Naval Postgraduate School.
Dexter Man Sentenced to Almost Seven Years for Pharmacy RobberyRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Michael Thompson, 27, of Dexter, Maine, was sentenced today in U.S. District Court by Judge John A Woodcock, Jr., to 82 months in prison and three years of supervised release for pharmacy robbery. He was also ordered to pay $5,178.58 in restitution. He pleaded guilty to the charge on December 9, 2014.
According to court records, on March 10, 2012, Thompson entered the Rite Aid pharmacy in Guilford, Maine wearing a bandana, a hood, sunglasses and gloves. He jumped over the pharmacy counter, brandished a large hunting style knife and demanded narcotics. A pharmacist opened the locker containing narcotics and Thompson filled his back pack with more than $5000 worth of them.
The investigation was conducted by the Piscataquis County Sheriff’s Office, the Maine State Police, the Federal Bureau of Investigation and the Somerset County Sheriff’s Office.
Cybercriminal Sentenced to 50 Months for His Role in Hacking CampaignRead the Press Release
Earlier today at the federal courthouse in Brooklyn, Qendrim Dobruna, a member of an international cybercrime syndicate, was sentenced to 50 months’ imprisonment and restitution in the amount of $14 million for his role in hacking into the computer systems of U.S.-based financial institutions, stealing prepaid debit card data, and eliminating withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals in excess of $14 million in a single weekend. The sentencing was held before U.S. District Judge I. Leo Glasser. Dobruna pleaded guilty to bank fraud on July 11, 2014.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Robert J. Sica, Special Agent in Charge, United States Secret Service, New York Field Office.
“The defendants and his co-conspirators participated in a massive 21st century heist that stretched around the globe. Using sophisticated methods, the organization reached into the computer systems of American-based corporations and transmitted illegally obtained private financial information to confederates in 18 different countries who stole millions of dollars from hundreds of ATMs in a matter of hours,” stated Acting United States Attorney Currie. “Today’s sentence serves as a warning to cybercriminals around the world that law enforcement is committed to solving these cybercrimes, no matter how sophisticated, and bringing the perpetrators to justice, wherever they may be found.”
“This operation demonstrates that combining international law enforcement resources sends a strong message to criminals, that there is no such thing as anonymity in the cyber world. Secret Service agents utilize state-of-the-art investigative techniques to identify and pursue cyber criminals around the world. The adverse impact this individual and other transnational organized criminal groups have on our nation's financial infrastructure is significant and should not be underestimated," said Secret Service Special Agent in Charge Robert J. Sica.”
Between approximately February 27, 2011 and March 1, 2011, the defendant and his co-conspirators conducted an “Unlimited Operation,” which begins when the cybercrime organization hacks into the computer systems of a credit card processor, compromises prepaid debit card accounts, and essentially eliminates the withdrawal limits and account balances of those accounts. The elimination of withdrawal limits enables the hackers and their co-conspirators to withdraw unlimited amounts of cash until the operation is shut down. Next, the cybercrime organization cashes in, by distributing the hacked prepaid debit card numbers to trusted associates around the world, who then immediately withdraw cash from ATMs across the globe. At the end of an operation, when the cards are finally shut down, the casher cells launder the proceeds – often investing the operation’s proceeds in luxury goods – and kick back money to the cybercrime organization’s leaders. On February 27, 2011, hackers targeted a credit card processor that processed transactions for prepaid debit cards issued by the American Red Cross for disaster relief victims. After the hackers penetrated the credit card processor’s computer network, compromised the American Red Cross prepaid card accounts, and manipulated the balances and withdrawal limits, casher cells across the globe operated a coordinated ATM withdrawal campaign. In total, more than 15,000 ATM transactions were conducted in approximately 18 countries around the world using 21 compromised American Red Cross disaster relief prepaid cards, resulting in approximately $14 million in losses to the credit card processor and the American Red Cross.
The defendant, from his apartment in Stuttgart, Germany, participated in the cyber-attack by obtaining account information from the co-conspirators who directly hacked into the U.S.-based financial institution’s database and selling that account information to other co-conspirators over the Internet, including to an individual in Brooklyn, New York.
In announcing the guilty plea, Acting United States Attorney Currie praised the extraordinary efforts of the Secret Service in responding so rapidly to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally. Mr. Currie also thanked the American Red Cross for their cooperation with this investigation.
The government’s case is being prosecuted by Assistant United States Attorney Amir H. Toossi.
The Defendant:
QENDRIM DOBRUNA
Age: 29
Credit Manipulator Sentenced to Two Years in Prison for Mail FraudRead the Press Release
SACRAMENTO, Calif. — United States District Judge William B. Shubb sentenced Ricky Lamont Flemings, 31, of Antelope, to two years in prison for two counts of mail fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Flemings engaged in a long-running scheme to deceive Experian and the other credit reporting agencies by exploiting provisions in the Fair Credit Reporting Act (FCRA), a statute intended to provide consumer protections to individuals. From 2005 until November 12, 2009, Flemings engaged Experian on multiple occasions and falsely reported that he was the victim of identity theft. During that period, Flemings demanded that Experian remove derogatory and other entries from his credit report. However, as he well knew, many of those entries were proper and were the result of his having sought credit or purchased items on credit.
In total, as a result of Flemings’s false statements, Experian blocked 162 inquiries and 40 trade lines from his credit report. Once those trade lines and inquiries were blocked, Flemings then sought further extensions of credit, relying on the fact that creditors would be unable to access the fraudulently blocked entries. As a result, Flemings appeared to be a better credit risk than he actually was.
For instance, between July 9, 2009, and September 5, 2009, Flemings received financing from Schools Financial Credit Union (SFCU), a federally insured credit union, to refinance a 2005 Lincoln Navigator and to purchase a 2006 Monterey boat. The loans were approved after SFCU examined a credit report that did not include fraudulently blocked entries. After receiving credit for the Lincoln and boat, Flemings contacted Experian and reported that the entries on his credit report related to these two items were fraudulent and should be removed.
This case was the product of an investigation by the United States Secret Service and the Placer County Sheriff’s Office. Assistant United States Attorney André M. Espinosa prosecuted the case.
Company with Federal and State Contracts to Pay $390K to Resolve Allegations it Had Unqualified EmployeeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and George C. Jepsen, Attorney General for the State of Connecticut, today announced that GARG CONSULTING SERVICES, INC. (“GARG”) has entered into a civil settlement agreement with the federal government and the State of Connecticut in which GARG will pay $390,000 to resolve allegations that the Rocky Hill-based company failed to authenticate an employee’s purported educational credentials and a professional certification before hiring and assigning him to work on various U.S. Department of Transportation-funded and state-funded highway projects, and on a bridge reconstruction project funded by the National Railroad Passenger Corporation (“Amtrak”).
According to allegations contained in the settlement agreement, GARG provided construction management and inspection services as a contractor or subcontractor for Connecticut Department of Transportation (“CONNDOT”) projects and for an Amtrak project. In 2007, an individual applied for employment with GARG and represented that he was a college graduate with a degree in civil engineering management and with Engineer-in-Training (“EIT”) certification from the State of Connecticut. If appropriate employee screening had been done, GARG would have learned that the employee had not graduated from college and had never sought or obtained EIT certification.
The employee worked at GARG from May 2007 to May 2010. During this time, GARG was a contractor or subcontractor on several federal and state highway and bridge projects. The employee also worked on a GARG subcontract for engineering consulting and professional services related to Amtrak’s replacement of the movable span on the Thames River Bridge. On the CONNDOT and Amtrak projects, GARG submitted payroll invoices for work performed by the company’s employees, including for work performed by the unqualified employee. The contracts and subcontracts entered into by GARG required that the company provide qualified personnel to work on the CONNDOT and Amtrak projects, and GARG submitted project proposals containing the employee’s purported credentials and qualifications. In addition, both CONNDOT and Amtrak were contractually reliant on GARG to provide qualified personnel.
“It is imperative that our roads, bridges and other components of our critical infrastructure are constructed, maintained and inspected only by qualified individuals,” said U.S. Attorney Daly. “This case sends a clear message that government contractors that do not properly vet all of their employees risk investigation and a heavy financial penalty.”
U.S. Attorney Daly also noted that GARG cooperated with the government’s investigation.
“Certifications are critically important, especially in major engineering projects where proper procedures and training help to ensure the safety of the general public,” said Attorney General Jepsen. “Employers have a responsibility to make very sure that their employees are properly certified for the jobs that they are expected to perform. I’m pleased that this matter has been resolved.”
“This investigation demonstrates our commitment to maintaining the integrity of federal acquisition and hiring processes, which is an oversight priority for the Office of Inspector General,” said Todd Damiani, Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General.
“Our investigation sends a strong message to all contractors about their obligation to employ qualified persons to work on critical transportation infrastructure projects,” said Amtrak Inspector General Tom Howard.
As a result of the settlement, there will be no lawsuit filed against GARG regarding the conduct alleged in the settlement agreement. In entering into the settlement, GARG did not admit liability or wrongdoing, and the agreement indicates that the parties settled this matter to avoid the delay, uncertainty, inconvenience, and expense of litigation.
This investigation was conducted by the U.S. Department of Transportation’s Office of Inspector General and Amtrak’s Office of Inspector General. The matter was handled within the U.S. Attorney’s Office by Assistant U.S. Attorney William A. Collier and Auditor Susan N. Spiegel.
Carlisle Resident Sentenced to 30 Year Prison Term for Child AbuseRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today in Harrisburg that Chief U.S. District Court Judge Christopher C. Conner sentenced Zachary Knight, of Carlisle to 30 years imprisonment for sexual abuse of a minor.
According to United States Attorney Peter Smith, Knight, age 20, pleaded guilty in April 2015 to charges of aggravated sexual abuse of a minor and production of child pornography. The plea was entered pursuant to a plea agreement.
Knight, a resident of a housing area at the U.S. Army War College, was taken into custody by HSI special agents on May 9, 2014. Chief Judge Conner ordered that the 30-year sentenced imposed today will be followed by 25 years of supervised release during which Knight will have restrictions on his contact with minors and his computer use and will be prohibited from contact of any kind with the victim or the victim’s family. According to the government’s evidence, Knight committed the crimes while providing babysitting services for the victim’s family. The evidence included videos Knight made of his abusive acts involving the minor.
The investigation was conducted by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) inter-agency child exploitation task force, with assistance from the U.S. Army Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney James T. Clancy.
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Camdenton Man Sentenced for $1.2 Million K2 Distribution at Lebanon StoreRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Camdenton, Mo., man was sentenced in federal court today for a mail fraud scheme that involved the distribution of more than $1.2 million of synthetic marijuana, commonly referred to as K2, from a head shop in Lebanon, Mo.
Stephen Brian Reynolds, 36, of Camdenton, Mo., was sentenced by U.S. District Judge Beth Phillips to six years in federal prison without parole. The court also ordered Reynolds to forfeit to the government $1,167,990, which was obtained from the distribution of K2, as well as real estate in Eldridge, Mo., funds in bank accounts, approximately $128,000 that was seized from Reynolds’s residence and a safe deposit box, a 2012 Jeep Grand Cherokee, a 2007 Ducati 1098 motorcycle, three pistols, two rifles and a shotgun.
Reynolds, the owner of Lucky’s Novelties in Lebanon, pleaded guilty on Aug. 15, 2014, to participating in a conspiracy to commit mail fraud and to one count of money laundering.
His brother, Eric Scott Reynolds, 33, of Lebanon, was employed at Lucky’s Novelties. Eric Reynolds has also pleaded guilty to his role in the mail fraud conspiracy and to participating in a money-laundering conspiracy. Eric Reynolds, whose bond has been revoked, remains in federal custody pending his sentencing hearing.
Stephen and Eric Reynolds both admitted they participated in a conspiracy to commit mail fraud from March 1, 2011, to Dec. 11, 2012. They defrauded the Food and Drug Administration and the public by using mail deliveries in a conspiracy to distribute several products that were labeled as “incense” or “potpourri” and “not for human consumption,” when in reality these substances were synthetic marijuana intended for human consumption as a drug.
Between Sept. 15, 2011, and July 25, 2012, Stephen and Eric Reynolds deposited $1,245,761 in proceeds from the distribution of K2 into bank accounts and a safety deposit box. Based upon DEA undercover purchases, they charged approximately $1 for every 300 mg of K2. Therefore, they distributed approximately 373 kilograms of K2.
Reynolds was also part-owner of a Springfield, Mo., head shop known as Doobies, which he supplied with wholesale quantities of synthetic marijuana for distribution and from which he received 40 percent of the profits. His partners have also been sentenced in a separate but related case for their roles in a mail fraud conspiracy. Travis Basford, 30, of St. Robert, Mo., was sentenced to six years in federal prison without parole. Kerry Lee Long, 24, of Springfield, was sentenced to two years and six months in federal prison without parole.
Today’s sentencing also reflects the court’s finding that Stephen Reynolds was in possession of firearms in connection with the offense. When DEA agents searched his residence, they seized a Smith and Wesson .380-caliber pistol, a Ruger .380-caliber pistol, an FHN 5.7-caliber pistol, a Ruger AR-15 rifle, a Bushmaster ACR rifle, a Winchester 12-gauge shotgun, body armor and ammunition. Agents also seized cardboard boxes containing synthetic cannabinoids weighing approximately 58 kilograms. Agents also seized $7,506 from a safe in the garage. Law enforcement officers also executed a search warrant at Lucky’s Novelties and seized a handgun.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigations, the Laclede County, Mo., Sheriff’s Department, the Lebanon, Mo., Police Department and the Lake Area Narcotics Enforcement Group (LANEG).
Buffalo Man Sentenced on Aggravated Identity Theft and Other ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Clifton Jackson, 46, of Buffalo, NY, who was convicted following a jury trial of 58 felony counts including conspiracy to unlawfully use Social Security numbers, conspiracy for the filing of false tax returns, filing false tax returns, aggravated identity theft, misuse of social security numbers and theft of government property, was sentenced to 140 months in prison by U.S. District Judge Geoffrey L. Crawford.
“With this ‘get rich quick’ scheme, this defendant sought to victimize both the Government and multiple individuals,” said U.S. Attorney Hochul. “Thanks to the efforts of our federal partners, the defendant’s scheme came to a halt and he will now spend the next 11 years behind bars for his actions. Let this case also serve as a reminder to the public that the Government does not give money away to individuals for providing simple information such as name and date of birth.”
IRS-Criminal Investigation Special Agent in Charge Shantelle P. Kitchen said: “Mr. Jackson’s 140 month prison sentence demonstrates the severe consequences of committing tax fraud using stolen identities. This investigation provides another illustration of the Government’s commitment to fighting this problem.”
Assistant U.S. Attorneys Trini E. Ross and John E. Rogowski, who handled the prosecution of the case, stated that the defendant devised a scheme to defraud individuals and the United States Government by obtaining and using the names, social security numbers and dates of birth issued to over 80 individuals. Jackson then used that information to file fraudulent tax returns for the tax year 2011with the IRS.
The defendant obtained the information by telling individuals that if they provided names, social security numbers and dates of birth, they could receive money from the Government. Jackson also recruited other individuals to provide additional names, social security numbers and dates of birth.
The Government presented more than 60 witnesses during the trial. These witnesses included over 20 individuals who were victimized by the defendant. Over the duration of the scheme, Jackson attempted to defraud the IRS of more than $550,000.
Jackson is currently serving a 10 year state sentenced in Ohio for a drug conviction. Three other defendants were charged and convicted in this case.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, Buffalo Office, under the direction of Supervisory Special Agent Michael Rivera, and the United States Postal Inspection Service under the direction of Shelly Binkowski, Inspector in Charge, Boston Division.Austin Businesswoman Sentenced to Federal Prison for Filing Fraudulent Tax ReturnRead the Press Release
In Austin today, 42-year-old Adela Perez was sentenced to 28 months in federal prison for filing a fraudulent tax return announced Acting United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
In addition to the prison term, United States District Judge Sam Sparks ordered that Perez be placed on supervised release for a period of one year and pay the IRS $99,271 in restitution.
On March 24, 2015, Perez pleaded guilty to one count of filing a fraudulent tax return. By pleading guilty, Perez admitted that from 2008 to 2012, she filed 34 tax returns on behalf of her clients that included fraudulent business expenses in order for her clients to reduce their taxable income and receive higher refunds.
This case was investigated by the IRS-CI. Assistant United States Attorney Michael C. Galdo prosecuted this case on behalf of the Government.
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Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Arizona State Legislature v. Arizona Independent Redistricting CommissionRead the Press Release
Attorney General Loretta E. Lynch released the following statement today after the Supreme Court ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission:
“I am pleased that the Supreme Court has vindicated the rights of voters who want their electoral districts drawn fairly, independently and without undue emphasis on partisan affiliation or political creed. Arizona’s approach to redistricting is an innovative and effective advance in the effort to reduce gerrymandering and give all Americans an opportunity to make their voices heard. Today’s decision is a victory for the people of Arizona, for the promise of fair and competitive elections and for the principles of democratic self-governance that make our nation exceptional.”
Arrested with Dozens of Counterfeit Credit Cards, Texas Man Pleads Guilty to Bank Fraud, Wire FraudRead the Press Release
WICHITA, KAN. – A Texas man who was arrested with dozens of counterfeit credit cards pleaded guilty Monday to federal bank fraud and wire fraud charges, U.S. Attorney Barry Grissom said.
Justin Russell Bennett, 29, pleaded guilty to one count of bank fraud, one count of wire fraud, one count of using a counterfeit credit card, one count of using an embossing machine to create counterfeit credit cards, one count of possession of 15 or more counterfeit credit cards and one count of aggravated identity theft.
Bennett was arrested Sept. 22, 2014, when he ran out of gas on Interstate 70 in Sherman County, Kan. Officers seized 47 counterfeit credit cards, an embossing machine, thousands of blank credit cards and other materials used to create counterfeit cards. He used counterfeit credit cards to rent vehicles, rent motel rooms, purchase items he sold through Internet sites and obtain cash advances.
Sentencing is set for Sept. 14. The crimes carry the following penalties:
Bank fraud: A maximum penalty of 30 years and a fine up to $1 million.
Wire fraud: A maximum penalty of 20 years and a fine up to $250,000.
Using a counterfeit credit card: A maximum penalty of 10 years and a fine up to $250,000.
Using an embossing machine to create counterfeit cards: A maximum penalty of 15 years and a fine up to $250,000.
Possession of 15 or more counterfeit cards: A maximum penalty of 10 years and a fine up to $250,000.
Aggravated identity theft: A mandatory two years consecutive to other sentences and a fine up to $250,000.
The Sherman County Sheriff’s Office and the U.S. Secret Service investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Anchorage Man Sentenced to 18 Years in Prison for Drug Death of 14 Year-Old GirlRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that Sean Michael Warner was sentenced in federal court in Anchorage for one count of distribution of heroin. Warner previously pled guilty on September 2, 2014 to distributing heroin. At that hearing, Warner admitted to personally injecting a 14-year-old minor with heroin on December 23, 2011. Warner also admitted that the injection of heroin caused the death of the minor, identified in court documents as J.D.
Warner, 29, was sentenced today by United States District Court Judge Sharon L. Gleason, to 18 years in prison.
According to Assistant U.S. Attorney Bryan Schroder, Warner injected J.D. twice during the evening of December 22, 2011, and into the early morning hours of December 23rd. When she later went into distress at approximately 9:30 a.m., Warner refused to call for assistance. He finally called 911 at 1:36 p.m. J.D. died on December 29, 2011.
In issuing the sentence, Judge Gleason recognized the grave seriousness of the offense of injecting the young victim with heroin, and especially disregarding her distress.
Ms. Loeffler stated, “This case and the tragedy of the death of this young victim highlights the scourge of heroin and the horrible impact it has on our community.”
Ms. Loeffler commends the Drug Enforcement Administration, the Anchorage Police Department, the U.S. Marshal’s Service, the Federal Bureau of Investigation (FBI), the FBI Laboratory, and the Kenai Police Department for the investigation of this case. This case was originally prosecuted in cooperation with the Anchorage District Attorney’s Office and the Alaska Department of Law.
Acoma Pueblo Man Pleads Guilty to Federal Misdemeanor Assault ChargeRead the Press Release
ALBUQUERQUE – Kevin Bernard Joe, 41, a member and resident of Acoma Pueblo, N.M., pleaded guilty this morning in Albuquerque, N.M., to a federal misdemeanor information charging him with assaulting an Indian woman.
Joe was arrested on April 27, 2015, on a criminal complaint charging him with an assault charge. According to the complaint, on March 23, 2015, the Acoma Pueblo Tribal Police Department was notified by the victim of an assault occurring on Acoma Pueblo in Cibola County, N.M. The complaint alleged that Joe assaulted the victim, an Acoma woman, by punching her multiple times with a closed fist causing injuries to her face, head, and upper body. The victim sustained a laceration above her left eye which needed approximately seven to eight stitches. Joe was subsequently indicted on May 12, 2015, and charged with assaulting an intimate partner resulting in substantial bodily injury.
During today’s proceedings, Joe entered a guilty plea to a misdemeanor information and admitted assaulting the victim by punching her with a closed fist multiple times on her head and body. Joe also acknowledged that his assault caused the victim to suffer a laceration to the left eye that required medical attention.
At his sentencing, Joe faces a statutory maximum penalty of 12 months in federal prison and up to one year of supervised release. Joe has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Pueblo Tribal Police Department. Assistant U.S. Attorney Raquel Ruiz-Velez is prosecuting the case.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Accountant Who Solicited Sexually Explicit Photos from Girls in the Philippines Sentenced to 20 Years in Federal PrisonRead the Press Release
LOS ANGELES – A Simi Valley man was sentenced today to 20 years in federal prison after pleading guilty to child pornography charges and admitting he used social media to solicit girls in the Philippines and Vietnam to send him sexually explicit images of themselves.
Ronald Carey Shirley, 64, of Simi Valley, a CPA who served as the chief financial officer for the California Angels baseball team in the 1990s, was sentenced by United States District Judge John F. Walter. In addition to the 20-year sentence, Shirley will be subject to a lifetime of supervised release after he finishes his prison term.
Shirley pleaded guilty in April to two counts of attempted receipt of child pornography. He was arrested in February by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) at Los Angeles International Airport as he prepared to depart for Vietnam to visit minor girls he had communicated with on social media.
As today’s sentencing hearing, Judge Walter found that Shirley travelled to Philippines last November for the purpose of having sex with minors, that he was leaving for Vietnam for the same purpose when he was arrested, and that he had planned to return to the Philippines the coming November for the purpose of having sex with minor girls.
During today’s hearing, Judge Walter quoted from a prosecutor’s sentencing memorandum when he said Shirley is “a modern-day parent’s worst nightmare” who is “a sexual predator who indiscriminately uses the Internet to target his victims.”
The investigation into Shirley began after HSI received a lead from the National Center for Missing and Exploited Children (NCMEC) about suspected child sexual exploitation activity linked to a social media account belonging to Shirley. According to court documents, Shirley had online exchanges of a sexual nature with at least three girls over the course of at least seven months. In an exchange with a 16-year-old victim in the Philippines, Shirley told her he wanted to have sex with her and wired her money in exchange for sending him sexually explicit images of herself.
“This sentence should serve as a sobering warning to every sexual predator who thinks they can hide from the law by violating the innocence of children overseas,” said Claude Arnold, special agent in charge of HSI Los Angeles. “There can be no place for the abuse of foreign children by our citizens, and HSI will seek to vindicate the rights of those victims no matter how far they live from our shores.”
The investigation into Shirley was conducted by HSI, which received substantial assistance from HSI’s attaché offices in Manila and Vietnam, the Philippine National Police and the Vietnamese Ministry of Public Security.
CONTACT: Assistant United States Attorney Jennifer Y. Chou (213) 894-6482
Friday 26 June 2015
Wasilla Man Sentenced to 12 Years in Prison for Sexual Exploitation of ChildrenRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Wasilla man was sentenced on Thursday, June 25, 2015, in Federal Court in Anchorage before United States District Judge Timothy M. Burgess to 144 months (12 years) imprisonment and 17 years of Supervised Release for sexual exploitation of children: distributing child pornography.
Daniel Clinton Piaskowski, 33, of Wasilla, was sentenced after pleading guilty for using social media, file sharing and instant messaging, on his computer and cell phone, to connect with other like-minded users, to download, receive and distribute child pornography that depicted prepubescent children engaged in sex acts. Evidence presented at the sentencing hearing showed that during one 18-day period alone – concluding on the day of his arrest – Piaskowski distributed 221 images of child pornography to twelve other males and chatted online with them about having sex with prepubescent children. During their communications, two of the males described themselves to Piaskowski as teen-aged minors.
Judge Burgess commented on the extremely serious consequences that burdened the child sexual exploitation victims involved. Judge Burgess also noted that the Internet has greatly expanded the market for producing child pornography world-wide [which in turn harms more children].
This case was investigated by the Federal Bureau of Investigation, and prosecuted by Assistant U.S. Attorney Audrey J. Renschen.
This prosecution is part of the Department of Justice’s ongoing Project Safe Childhood (PSC) initiative which was launched to increase Federal prosecutions of sexual predators of children, and to reduce the number of Internet crimes against children, including child pornography trafficking. As a part of PSC, the United States Attorney’s Office has teamed with state and local agencies and organizations to increase law enforcement presence on the Internet, and to educate the public about safe Internet use, thereby reducing the risk that children might fall prey to online sexual predators. For additional information on the PSC initiative, please go to www.projectsafechildhood.gov or call the United States Attorney’s Office for the District of Alaska.
WIFLE Presents Top Prosecutor Award to Middle District of Florida AttorneyRead the Press Release
AUSA Rachelle DesVaux Bedke (center) accepts Top Prosecutor Award from WIFLE Foundation, Inc.
WIFLE Foundation President Catherine W. Sanz (left) and Vice President Sheree Mixell presented the award.
TAMPA, FL – Assistant United States Attorney Rachelle DesVaux Bedke was presented with the Top Prosecutor Award by the Women in Federal Law Enforcement (WIFLE) Foundation earlier this month at a ceremony in Tampa.
Ms. DesVaux Bedke received the award in recognition of her outstanding case-handling and exceptional written and oral advocacy on behalf of the United States in two related cases (United States v. Paul Robert Gunter, et al. and United States v. Roger Lee Shoss, et al.) that resulted in the conviction of six individuals who had defrauded thousands of victim-investors worldwide out of more than $137 million. Ms. DesVaux Bedke was lauded for her ability to present complex and technical information about a sophisticated investment fraud and money laundering scheme to federal jurors in a clear, concise, and understandable way, and for securing the convictions of four defendants in two separate trials. She was praised for her superior work in working with law enforcement agencies and securities regulators in multiple countries, analyzing massive amounts of evidence, drafting detailed indictments, and negotiating plea agreements.
United States Attorney A. Lee Bentley, III, who attended the ceremony, said, “Ms. DesVaux Bedke is most deserving of this honor. She is without doubt one of the top federal prosecutors in the country, and her work on these cases was nothing short of amazing.”
Ms. DesVaux Bedke serves as Chief of the Criminal Division (South) of the U.S. Attorney’s Office for the Middle District of Florida. She has been an Assistant United States Attorney with the office since February 1997 and has prosecuted a multitude of offenses involving narcotics, firearms, child exploitation, bank robbery, kidnapping and, most often, frauds involving investments, taxes, mortgages, health care, federal programs, and money laundering.
In addition to Ms. DesVaux Bedke, more than 20 other women were recognized by WIFLE for their exceptional courage, outstanding accomplishments, and significant contributions that have advanced the recruitment, retention, and promotion of women in federal law enforcement. For more information about WIFLE, visit http://www.wifle.org/.
U.S. Attorney Goodwin and IRS award over $200,000 from criminal forfeitures to Wyoming County Law EnforcementRead the Press Release
Beckley, W.Va. – U. S. Attorney Booth Goodwin and Internal Revenue Service (IRS) Special Agent in Charge Thomas Jankowski presented Wyoming County law enforcement agencies with over $200,000 in forfeited cash as a result of their participation in joint investigations with the IRS. The objective of the federal asset forfeiture program is to take the profit out of crime and give it back to communities. Forfeiture proceeds are shared with state and local law enforcement agencies as a result of their direct participation in investigations resulting in forfeiture. The forfeited money shared today resulted from investigations into The New WV Mining Company, James Trent, Brandy Horvath, et al. and Jerry H. Harvey, Jr.. The agencies receiving a share of the forfeiture for their role of the investigations were the Wyoming County Sheriff’s Department - $118,326; Pineville Police Department - $63,034; and the Wyoming County Prosecutor’s Office - $41,468.
As a result of their investigation, Brandy Horvath, President of The New WV Mining Company, Horvath’s then boyfriend James Thomas Trent of Rock View, Wyoming County, and others, were identified as having structured cash withdrawals from the company’s bank accounts. “Structuring” involves the breaking down of cash transactions in the amount of $10,000 or less for the purpose of avoiding bank reporting requirements to the IRS. Horvath was named New WV Mining’s president and sole officer of the company to conceal Trent’s interest in the company. New WV Mining began mining coal for Riverside Energy at a mine near Gary, McDowell County, West Virginia. Once operations began, Horvath routinely withdrew cash for her and Trent’s personal use from New WV Mining’s bank accounts and intentionally misrepresented the nature of the withdrawals as legitimate business expenses, knowing that the personal cash withdrawals would have been taxable to her. As President of New WV Mining, Horvath signed and caused the company’s accountant to file a corporate income tax return for the year 2008 that she knew failed to disclose the true amount of money she and Trent had taken from the company. Horvath pleaded guilty to tax evasion, and on behalf of New WV Mining, she pleaded guilty to structuring cash withdrawals from company bank accounts to avoid IRS reporting requirements. As a result, New WV Mining Company agreed to forfeit $731,581 and a 2011 Nissan 370z. Trent pleaded guilty to federal income tax fraud for reporting he had no earnings on his 2008 personal income tax return, although he had sold the lease and mining permits of a McDowell County-based mining company he owned for which he received $100,000. Horvath and Trent were sentenced to 26 months and 36 months in prison, respectively.
Wyoming County law enforcement was also awarded forfeited cash for their contributions to the investigation of Jerry H. Harvey, Jr., of Oceana, West Virginia. Harvey pleaded guilty and was sentenced to 36 months in federal prison for aiding and abetting structuring financial transactions to avoid IRS bank reporting requirements. Harvey admitted that for more than a year he intentionally made multiple bank withdrawals not exceeding $10,000 so the bank would not report the withdrawals to the IRS. He also admitted that the withdrawn funds were profits he made while engaged in the interstate transportation and receipt of stolen property, from which he gained more than $100,000. Pursuant to his plea agreement, Harvey forfeited $303,000 to the United States.
Twin Brothers Guilty of Wire Fraud, Conspiring to Hack into State Department and Private CompanyRead the Press Release
ALEXANDRIA, Va. – Twin brothers Muneeb and Sohaib Akhter, 23, of Springfield, Virginia, pleaded guilty today to charges of conspiracy to commit wire fraud, conspiracy to access a protected computer without authorization, and conspiracy to access a government computer without authorization. Muneeb Akhter also pleaded guilty to additional charges of accessing a protected computer without authorization, making a false statement, and obstructing justice.
According to the defendants’ statements of facts, which were filed with their plea agreements, beginning in or about March 2014, Muneeb Akhter hacked into the website of a cosmetics company and stole thousands of its customers’ credit card and personal information. The Akhter brothers and co-conspirators used the stolen information to purchase goods and services, including flights, hotel reservations, and attendance at professional conferences. Muneeb Akhter also provided stolen information to an individual he met on the “dark net,” who sold the information to other dark-net users and gave Akhter a share of the profits.
In a separate scheme, the Akhter brothers and co-conspirators engaged in a series of computer intrusions and attempted computer intrusions against the U.S. Department of State to obtain sensitive passport and visa information and other related and valuable information about State Department computer systems. In or around February 2015, Sohaib Akhter used his contract position at the State Department to access sensitive computer systems containing personally identifiable information belonging to dozens of co-workers, acquaintances, a former employer, and a federal law enforcement agent investigating his crimes.
Sohaib Akhter later devised a scheme to ensure that he could maintain perpetual access to desired State Department systems. Sohaib Akhter, with the help of Muneeb Akhter and co-conspirators, attempted to secretly install an electronic collection device inside a State Department building. Once installed, the device could have enabled Sohaib Akhter and co-conspirators to remotely access and collect data from State Department computer systems. Sohaib Akhter was forced to abandon the plan during its execution when he broke the device while attempting to install it behind a wall at a State Department facility in Washington, D.C.
Furthermore, beginning in or about November 2013, Muneeb Akhter was performing contract work for a private data aggregation company located in Rockville, Maryland. He hacked into the company’s database of federal contract information so that he and his brother could use the information to tailor successful bids to win contracts and clients for their own technology company. Muneeb Akhter also inserted codes onto the victim company’s servers that caused them to vote for Akhter in an online contest and send more than 10,000 mass emails to students at George Mason University, also for the purpose of garnering contest votes.
In or about October 2014, Muneeb Akhter lied about his hacking activities and employment history on a government background investigation form prior to successfully obtaining a position with a defense contractor. Furthermore, in or about March 2015, after his arrest and release pending trial, Muneeb Akhter obstructed justice by endeavoring to isolate a key co-conspirator from law enforcement officers investigating the conspirators’ crimes. Among other acts, Muneeb Akhter drove the co-conspirator to the airport and purchased a boarding pass, which the co-conspirator used to travel out of the country to the Republic of Malta. When the co-conspirator returned to the United States, Muneeb Akhter continued to encourage the co-conspirator to avoid law enforcement agents.
The Akhter twins were indicted by a federal grand jury on April 30, 2015. Muneeb Akhter faces a maximum penalty of 50 years in prison, while Sohaib Akhter faces a maximum penalty of 30 years in prison. Both men will be sentenced on Sept. 25, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Gregory Marshall, Chief Security Officer, Department of Homeland Security (DHS); Gregory Starr, Assistant Secretary for the U.S. Department of State’s Bureau of Diplomatic Security; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the pleas were accepted by U.S. District Judge T.S. Ellis, III.
This case was investigated by the Internal Security and Investigations Division of the Office of the Chief Security Officer, DHS Headquarters; the U.S. Department of State’s Bureau of Diplomatic Security, and FBI’s Washington Field Office. Special Assistant U.S. Attorneys John Taddei and Jennifer Clarke are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-124.
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Tonawanda Man Pleads Guilty to Drug Importation ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Peter Viera, 22, of Tonawanda, N.Y., pleaded guilty to conspiracy to import methylone, a Schedule I controlled substance, before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that between December 1, 2011, and May 22, 2013, the defendant ordered approximately $60,000 worth of methylone from China as part of the conspiracy to import and sell methylone in Western New York. On May 31, 2013, Viera was parked in a car across from the LaSalle Post Office in Niagara Falls, N.Y. observing a co-conspirator pick up a package from the Post Office, which had been sent from China. Unbeknownst to Viera and his co-conspirators -- the package was intercepted two days prior by U.S. Postal inspectors and found to contain approximately one kilogram of methylone.
The plea is the result of an investigation by an investigation on the part of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero and the United States Postal Inspection Service, under the direction of U.S. Postal Inspection Service, Boston Division, under the direction of Inspector in Charge, Shelly A. Binkowski.
Sentencing is scheduled for October 13, 2015 at 1:00 before Judge Arcara.
Tolar, Texas, Man Sentenced to 720 Months in Federal Prison for Production of Child PornographyRead the Press Release
FORT WORTH — A Tolar, Texas, man was sentenced yesterday by U.S. District Judge Terry R. Means to 720 months in federal prison on a child pornography conviction, announced Acting U.S. Attorney John R. Parker of the Northern District of Texas.
Jonathan Daniel Kutej, 34, was convicted in November 2014 to two counts of production of child pornography.
According to documents filed in the case, on July 17, 2013 Kutej persuaded a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of that conduct.
On August 14, 2013 Kutej took sexually explicit photos with his Apple iPhone of a separate minor child. After discovering the photos the minor child’s mother contacted Investigators. An arrest warrant was obtained August 15, 2013, Kutej was carrying a black Apple iPhone in the back pocket of his pants at the time of the arrest that contained the sexually explicit photos of the minor girl.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
Homeland Security Investigations (HSI) and the Hood County District Attorney’s Office investigated. Assistant U.S. Attorney A. Saleem prosecuted.
Tennessee Man Pleads Guilty to Hobbs Act Robbery of Former EmployerRead the Press Release
A Tennessee man pleaded guilty to Hobbs Act robbery and use of a handgun in a crime of violence, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Rivera of the Middle District of Tennessee.
Deonte Graham, 34, of Clarksville Tennessee, pleaded guilty before Chief U.S. District Judge Kevin Sharp of the Middle District of Tennessee.
On Oct. 21, 2011, Singletary Construction in Clarksville, Tennessee, was robbed of $17,000 in cash by two masked men with a gun. Physical evidence recovered in connection with the robbery resulted in the identification of Michael Massey as one of the robbery suspects. In May 2015, Massey pleaded guilty to his role in the robbery.
In connection with today’s guilty plea, Graham admitted that, in October 2011, he had worked for Singletary for more than one year. According to Graham’s admissions, after the owner of the company accused Graham of misrepresenting the hours he worked and docked his pay, Graham and Massey devised a plan to rob Singletary. Graham also admitted that, in December 2012, he bragged to a former Singletary employee about arranging the robbery because Singletary owed him money.
This case was investigated by Clarksville, Tennessee, Police Department and the Drug Enforcement Administration. The case is being prosecuted by Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee.
Deonte Graham Plea Agreement
Telemarketer Sentenced for Roll in Multi-Million Dollar ScamRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that James Richard Currey, 55, of Winter Park, FL, was sentenced in federal court this morning on one count of conspiracy to commit mail and wire fraud in connection with telemarketing. Currey was sentenced to one year in prison, to be followed by five years of supervised release. Currey was also ordered to pay $67,137.50 in restitution to the individual victims and a $100 special assessment.
The investigation determined that Curry was a telemarketer for National Solutions and related companies located in Orlando, Florida. National Solutions defrauded consumers across the continent using the fictitious names, Bluescape Timeshares International, Country Wide Timeshares, Countrywide Timeshares MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun Property’s, Universal Propertys, VIM Timeshares, Propertys DRK, Quick Sale Advisers, Quick Sale International, City Resorts, Resort Advisers, American Timeshares, Exit Week, and Resort Advisors International. These companies targeted owners of timeshares throughout the United States and Canada. In various court filings related to the National Solutions scam, the government has alleged that the overall scam bilked over 2,500 consumers out of at least $6 million, including eight victims within the Southern District of Illinois.
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 Midwest Region Office of the Federal Trade Commission and 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.
Swiss Bank Reaches Resolution under Justice Department's Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Ersparniskasse Schaffhausen AG (EKS) has reached a resolution under the department’s Swiss Bank Program.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, EKS agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute EKS for tax-related criminal offenses.
EKS was founded in 1817 and is wholly owned by a Swiss charitable foundation. It is headquartered in the city and canton of Schaffhausen, Switzerland. EKS opened, maintained and serviced accounts for U.S. persons that it knew or had reason to know were likely not declared to the Internal Revenue Service (IRS) or the U.S. Department of the Treasury as required by U.S. law.
From 2004 through 2011, EKS accepted referrals of U.S. persons as new clients from an external asset manager who, until 2009, resided in the United States and conducted some of his business through a corporation organized under the laws of the United States. The majority of the accounts that came to EKS as a result of these referrals were held in the names of non-U.S. entities that were beneficially owned by U.S. persons.
In May 2008, with the knowledge and approval of EKS management, the external asset manager and an EKS relationship manager visited five U.S. cities to meet with U.S. clients and attorneys who had the potential to refer new clients. Topics discussed during their meetings included the “crisis” involving Swiss bank UBS AG, client satisfaction with EKS, the performance of client accounts at EKS and the “asset protection” benefits of EKS.
Until 2009, EKS opened numbered accounts for U.S. persons, including code-name or pseudonym accounts, upon request. Upon opening this type of account, an EKS employee would enter the accountholder’s name in a physical register rather than in the bank’s electronic records system. This action limited the number of EKS personnel who knew the client’s identity. Holders of these accounts could also provide documents to EKS using only their code names or numbers as their authorized signatures.
EKS provided all of its clients, including U.S. persons, with the option to request that EKS retain all mail related to a client’s financial accounts in exchange for a standard service fee. EKS understood that providing such hold-mail agreements upon request could allow U.S. persons to keep evidence of their EKS accounts outside of the United States and thus assist them in concealing assets and income from the IRS.
EKS also accepted IRS Forms W-8BEN for U.S.-related accounts held in the names of non-U.S. entities, such as foreign corporations, trusts or foundations. Because Swiss law required EKS to identify the true beneficial owners of the entities on a document called a Form A, EKS knew that these accounts were beneficially owned by U.S. persons. Nonetheless, EKS accepted Forms W-8BEN that it knew falsely stated that the entities were the beneficial owners of the accounts.
EKS was aware of the 2009 IRS Offshore Voluntary Disclosure Program for U.S. persons. Despite knowing of that program and knowing or having reason to know that some of its U.S. clients had likely not declared their EKS accounts to the IRS, EKS made no effort to encourage its U.S. clients to disclose their accounts through that program.
During 2009, consultants reported to EKS, among other things, that EKS had increased risks because of its relationship with the external asset manager; that it was only a matter of time until small banks came into contact with U.S. authorities; and that there was a latent risk that previous revenues from EKS’s “U.S. strategy” could be seized or corresponding fines imposed. According to minutes of a 2009 meeting of the EKS board of directors, an EKS executive stated, among other things, that “there is practically no risk if U.S. customers travel to Switzerland and a customer account is handled locally,” and that he had been informed that Swiss bank Wegelin & Co. was going to keep its previous U.S. customers.
In October 2009, the EKS board of directors voted to continue the account relationships with clients of the external asset manager, including his U.S. clients, under certain conditions, including that his business be relocated to Switzerland. The board also voted to “have the option of entering into new cross-border business relationships.”
Since Aug. 1, 2008, EKS provided private banking services for 90 U.S.-related accounts with approximately $65 million in assets. Thirty-seven of these accounts were opened after Aug. 1, 2008. EKS will pay a penalty of $2.066 million.
In accordance with the terms of the Swiss Bank Program, EKS mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at EKS who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at EKS must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS, and in particular, IRS-Criminal Investigation and the IRS Large Business and International Division for their substantial assistance, Gregory E. Van Hoey and Michael R. Pahl, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Statement from the United States AttorneyRead the Press Release
INDIANAPOLIS - Tim Durham was resentenced today by U.S. District Judge Jane Magnus-Stinson to 50 years in federal prison; the same sentence he originally received after his jury trial on securities and wire fraud charges. Mr. Durham’s sentence means he will effectively spend the rest of his life in prison for stealing over $220 million dollars from nearly 5000 victims, many of whom lost their life’s savings.
Mr. Durham’s actions were a result of greed, arrogance and deceit and his sentence is a just consequence for his crimes.
Stafford Doctor Sentenced to Four Years in Prison for Distribution of Oxycodone and Health Care FraudRead the Press Release
ALEXANDRIA, Va. – Nibedita Mohanty, M.D., 56, of Stafford, Virginia, was sentenced today to 48 months in prison, followed by three years of supervised release for distribution and dispensation of controlled substances and aiding and abetting health care fraud. Dr. Mohanty, who was formerly the Chief of Medicine at Stafford Hospital from June 2009 through Feb. 12, 2013, was also fined $15,000 and ordered to pay a forfeiture of cash proceeds in the amount of $43,120.
Dr. Mohanty pleaded guilty on Feb. 23, 2015. According to court documents, Dr. Mohanty admitted to issuing prescriptions for oxycodone which were not for a legitimate medical purpose and beyond the bounds of medical practice. In one such instance, on May 2, 2011, Dr. Mohanty issued a prescription for oxycodone to patient who experienced a nonfatal narcotics overdose. Dr. Mohanty subsequently treated the patient at the hospital. On May 31, 2011, Dr. Mohanty issued another oxycodone prescription to same patient. The next day, the patient was found deceased in the bathroom of a friend’s home. The cause of death was determined to be accidental acute combined oxycodone and imipramine toxicity.
In another instance, on Oct. 3, 2011, Dr. Mohanty issued a prescription for oxycodone to a patient. Nine days later the patient was found unresponsive in her home. Hospital records and testimony would have shown that the nonfatal overdose was oxycodone related.
In addition, Dr. Mohanty admitted that she aided and abetted a patient in the commission of health care fraud. Dr. Mohanty acknowledged that she did not possess a “X” DEA number, nor was she authorized for office-based narcotic buprenorphine treatment. Despite this Dr. Mohanty prescribed Subutex, which contains buprenorphine, to a patient who she was treating for drug addiction and dependence, which was billed to and paid for by the patient’s health insurance.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; and Charles E. Jett, Stafford County Sheriff, made the announcement after sentencing by U.S. District Judge Liam O’Grady.
The case was investigated by the Stafford County Sheriff’s Office, and the FBI’s Richmond and Washington Field Offices. Assistant U.S. Attorney Gene Rossi and Special Assistant U.S. Attorneys Jennifer Ballantyne and Nicole Grosnoff are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-256.
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Shiprock Man Sentenced to Prison for Federal Theft ConvictionRead the Press Release
ALBUQUERQUE – Orlando Jay Johnson, 24, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced this afternoon in federal court in Albuquerque, N.M., to 12 months in federal prison followed by three years of supervised release for his conviction on theft occurring in Indian Country.
Johnson was arrested on Oct. 31, 2014, after officers of the Navajo Nation Division of Public Safety were called to a fast food restaurant in Shiprock in response to a report that an elderly Navajo man had been robbed of his wallet and money. According to the criminal complaint, Johnson followed the victim out of the restaurant and stole the wallet from the victim’s pocket. The victim chased Johnson for approximately half a mile in his truck until he caught up to Johnson, who returned the wallet.
On March 26, 2015, Johnson pled guilty to a felony information charging him with theft occurring in Indian Country. In entering the guilty plea, Johnson admitted that on Oct. 23, 2014, in San Juan County, N.M., he stole a wallet and cash from the victim.
This case was investigated by the Farmington office of the FBI and Shiprock office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Raquel Ruiz-Velez prosecuted this case.
Seven Indicted for $3 Million Mortgage Fraud ConspiracyRead the Press Release
FRESNO, Calif. — A federal grand jury returned a 15-count indictment on Thursday against seven individuals, charging them with conspiracy to commit mail fraud and bank fraud, mail fraud and aiding and abetting, and making false statements to a bank in a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
Jyoteshna Karan, 43, and Praveen Singh, 36, were arrested this morning at their home in Modesto. Mahendra Prasad, 53, was arrested this morning at his home in Fremont. The remaining defendants each received a summons to appear for arraignment: Phul Singh, 79; and Sunita Singh, 60, both of Modesto, Nani Isaac, 69, of Ceres, and Martin Bahrami, 42, of Turlock.
According to court documents, the defendants conspired to defraud mortgage lending companies and financial institutions by making false statements on loan applications and short-sale applications in order to obtain properties under their names and the names of others. The false statements included statements relating to the defendants’ employment, their familial relationship, income, and their intent to occupy the home as their primary residence.
According to the indictment, the conspiracy encompassed at least 25 properties from Sacramento to Modesto. As a result of the scheme, lenders lost in excess of $3 million.
“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the United States Attorney for the Eastern District of California and our law enforcement colleagues in announcing these indictments” said Wade Walters, Special Agent in Charge for the FDIC’s Office of Inspector General. “We are committed to our partnerships with others in federal, state, and local law enforcement organizations as we address mortgage fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal misconduct that undermines that integrity will be held accountable.”
“The partnership between the Stanislaus County District Attorney’s Office, federal agencies and the U.S. Attorney’s Office allows us to investigate the most complex real estate fraud cases at the local level and yet prosecute at the federal level to ensure full accountability. This is a true benefit to the community,” said Stanislaus County District Attorney Birgit Fladager.
“The short sale process is intended to assist legitimately distressed homeowners,” said Leslie DeMarco, Special Agent in Charge, Federal Housing Finance Agency Office of Inspector General. “Our investigation disclosed that Karan and others allegedly manipulated the process for their personal gain. FHFA-OIG is committed to ensuring that real estate professionals maintain the highest ethical standards, which in turn will protect taxpayers.”
“Early this morning, SIGTARP agents and our law enforcement partners arrested or served summons on seven individuals who stand charged with operating a fraud scheme that cost financial institutions, including multiple TARP banks, millions of dollars in losses,” said Christy Romero, Special Inspector General for TARP. “The seven allegedly conspired to falsify information on mortgage loan and short-sale applications submitted to multiple financial institutions in order to obtain properties across Eastern California. SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud perpetrated at the expense of taxpayers’ TARP bank investments and bring accountability to those who engage in these schemes.”
This case is the product of an investigation by the Stanislaus County District Attorney’s Office, the Federal Bureau of Investigation, the Federal Housing Finance Agency Office of Inspector General, the Federal Deposit Insurance Corporation Office of Inspector General, and the Office of the Special Inspector General for the Troubled Asset Relief Program. Assistant United States Attorneys Mark E. Cullers and Patrick Delahunty are prosecuting the case.
Jyoteshna Karan and Praveen Singh are scheduled to appear for arraignment in U.S. District Court in Fresno, on Friday, June 26, 2015, at 1:30 p.m. before U.S. Magistrate Judge Gary Austin. Phul Singh, Sunita Singh, Nani Isaac and Martin Bahrami are scheduled to appear for arraignment in U.S. District Court in Fresno, on Wednesday, July 1, 2015, at 1:30 p.m. before U.S. Magistrate Judge Gary Austin. Mahendra Prasad is scheduled to appear in U.S. District Court in San Jose on June 26, 2015, for arraignment.
If convicted, each defendant faces a maximum statutory penalty of 30 years in prison and a $1 million fine per count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sean Meadows Sentenced to 25 Years for Defrauding Investors of More Than $13 MillionRead the Press Release
United States Attorney Andrew M. Luger today announced the sentence of SEAN MEADOWS, 42, to 25 years in federal prison for using his financial planning and asset management firm, Meadows Financial Group (MFG), to operate a long-term Ponzi scheme in which he stole more than $13 million from at least 100 individual victims. MEADOWS was indicted on August 5, 2014, and pleaded guilty on December 11, 2014. He was sentenced today before United States District Court Judge Susan Richard Nelson.
“Sean Meadows systematically destroyed the financial security of more than one hundred working and middle class people, leaving them with no possibility of recovery,” said U.S. Attorney Luger. “Over the past year we have charged more than a dozen individuals for conducting investment fraud schemes that resulted in the loss of tens of millions of dollars from hundreds of victims. Like Meadows, many of these criminals preyed on the most vulnerable victims – working-class retirees seeking to make a little more out of their golden years. It is a priority of my office to put a stop to this kind of malicious financial exploitation. Working together with excellent investigators at the Minnesota Department of Commerce Fraud Bureau, IRS-CID, United States Postal Inspection Service, SEC and FBI, we are focused on catching these types of cases at the earliest stages to prevent the kind of financial catastrophe that Sean Meadows caused to the victims in this case.”
“Sean Meadows pretended to be a trusted investment adviser, but he abused that trust by lying to and stealing from his clients,” said Minnesota Commerce Commissioner Mike Rothman. “Instead of investing his clients’ hard-earned retirement savings, he used their money to bankroll his own extravagant lifestyle. Meadows not only robbed his victims of their lifetime savings. He also robbed them of their peace of mind and their dreams of a secure retirement. The Commerce Department Fraud Bureau put a stop to his crimes and worked closely with federal authorities to bring Meadows to justice.”
"Illegal activity involving the investment industry has brought financial ruin to many Americans” said Special Agent in Charge Shea Jones of the IRS Criminal Investigation St. Paul Field Office. “Today's sentencing of Mr. Meadows reinforces our commitment to identify and prosecute those who prey upon honest, hard-working taxpayers that have taken what has belonged to others for their own personal financial gain.”
According to the defendant’s guilty plea and documents filed in court, MEADOWS operated MFG, through which he sold insurance and investment products to clients in Minnesota, Indiana, Arizona, and elsewhere. From 2007 until April 2014, MEADOWS successfully solicited a total of at least $13 million from more than 100 clients for a purported investment managed by MFG. The defendant falsely told victims that he would use their funds to purchase bonds, real estate, or other legitimate third-party investments.
According to the defendant’s guilty plea and documents filed in court, MEADOWS lured victims into removing funds from their retirement and other savings accounts by promising high rates of returns – up to 10 percent annually – when, in fact, he did not invest their funds and did not have a legitimate means by which to make interest payments. Instead, MEADOWS used funds from new investors to make interest and/or principal repayments to existing investors. For example, as charged in the indictment, on September 26, 2013, MEADOWS made a payment of more than $500,000 to one victim, purportedly paying off a successful investment with MFG. In fact, the payment was actually comprised of newly invested funds from other victims.
According to the defendant’s guilty plea and documents filed in court, MEADOWS used the illicit proceeds of the Ponzi scheme to pay personal expenses, including: making “salary” payments to himself; making payments to his spouse; paying expenses on personal investment properties; paying personal credit card bills; purchasing a vehicle for himself; traveling to Las Vegas; gambling at various casinos and online; and spending more than $135,000 at adult entertainment establishments in Minnesota and Las Vegas.
Among the victims MEADOWS defrauded are senior citizens and the disabled, poor or terminally ill. Victims were left in financial ruin because they lost their financial security, retirement funds, their ability to support their families, and in some cases, their ability to pay for cancer treatments.
According to documents filed in court, as just one example, one 66-year-old victim identified in court papers as “Victim 1,” had approximately $200,000 saved in a MetLife annuity when she met the defendant. MEADOWS convinced her to entrust him with the annuity to invest. In November 2013, Victim 1 was diagnosed with lung cancer and was told she only had 18 months to live. When she asked the defendant to surrender her investment so she could travel, enjoy her remaining time and divide her money amongst her family, Meadows convinced her to instead move most of the money to a high interest bond that was “very liquid.” She wrote a check to MFG for $215,000. An Allianz internal investigator soon called her and asked if she was aware of the surrender penalties she would have to pay. The victim called MEADOWS, who told her to “relax” and avoided her questions by first saying he was recovering from knee surgery and later that he was on vacation in Arizona. Victim 1 asked the defendant for $20,000 to cover her credit card debt, which he claimed he would provide, but the money never arrived. MEADOWS left Victim 1 without the funds to travel, without the funds to seek advanced treatment for cancer and with no money to leave to her family.
This case is the result of an investigation conducted by the Minnesota Department of Commerce, Securities and Exchange Commission, the United States Postal Inspection Service, the Internal Revenue Service – Criminal Investigation, and the FBI.
This case was prosecuted by Assistant U.S. Attorneys Benjamin F. Langner and Melinda A. Williams.
Defendant Information:
SEAN MEADOWS, 42
Eden Prairie, Minn.
Convicted:
- Wire Fraud, 7 counts
- Mail Fraud, 3 counts
- Transaction Involving Fraud Proceeds, 1 count
Sentenced
- 25 years in prison
- 3 years supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Puyallup Man Sentenced to Two Years in Prison for Hash Oil BlastRead the Press Release
A Puyallup man making hash oil for an illegal marijuana edible operation was sentenced today in U.S. District Court in Tacoma to 24 months in prison and three years’ supervised release, announced U.S. Attorney Annette L. Hayes. SETH M. CLEEK, 22, was using highly flammable butane gas to make hash oil on May 20, 2014 when the operation exploded and caught fire. Butane canisters were hurled in every direction – putting those living near the scene, and first responders at risk. One canister was driven through a plastic planter – demonstrating the force of the explosion. Fortunately CLEEK’s family, including his 18-month-old child, was not injured in the blast. U.S. District Judge Ronald B. Leighton imposed the sentence.
According to records filed in the case, CLEEK was being paid $10 for each “tube” of marijuana he sought to turn into butane honey oil (BHO). The process, which involves forcing butane gas through marijuana clippings packed in a tube, and then boiling off the solvent can prove highly explosive. CLEEK was using some 20 cases of butane supplied to him by co-defendant Kevin Weeks, when the operation exploded. The resulting fire melted the siding on the Puyallup home and destroyed a plastic basketball backboard.
The investigation revealed that CLEEK was working for Weeks – the operator of a marijuana “medible” company called ‘Cap’n Cosmics. The company had no state licensure to make marijuana products, and used marketing that mimics the look of a children’s cereal, “Cap’n Crunch.” Search warrants served several weeks after the Puyallup explosion revealed that Weeks had moved the BHO manufacturing operation to an industrial area, but was using a method that could have resulted in a much greater and even more damaging explosion. In all some 1800 pounds of marijuana and marijuana laced food products were seized in the investigation.
The case was investigated by the Puyallup Police Department, Pierce County Sheriff’s Department, the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The Pierce County Prosecutors Office assisted with the case. The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and Todd Greenberg.
Project Safe Childhood Newmarket Man Sentenced for Child Pornography PossessionRead the Press Release
CONCORD, NEW HAMPSHIRE: Brian Sorrentino, 36, of Newmarket, was sentenced on Thursday, June 25, 2015 in the United States District Court for the District of New Hampshire on one count of possessing child pornography, announced Acting United States Attorney Donald Feith. The Court imposed a term of 30 month’s imprisonment and five years of supervised release.
The investigation into Sorrentino began in 2008, when the Portsmouth Police Department and the Department of Homeland Security traced internet activity involving child pornography back to Sorrentino’s residence. When Portsmouth detectives approached Sorrentino at his home, he admitted to possessing images of child pornography, hundreds of which were subsequently found during a forensic analysis of Sorrentino’s computer.
The case was investigated by the Portsmouth, New Hampshire Police Department in conjunction with the the New Hampshire Crimes Against Children Task Force (NH ICAC), and the Department of Homeland Security, Homeland Security Investigations. This case was prosecuted by Assistant United States Attorney Nick Abramson.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.