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Friday 26 June 2015
Philadelphia Pub Owner Charged in Fraud SchemeRead the Press Release
PHILADELPHIA - Michael Hoffner, Sr., 50, of Voorhees, New Jersey was charged by indictment, unsealed today, with 23 counts of wire fraud in connection with a scheme to defraud Navy Federal Credit Union and American Express, announced United States Attorney Zane David Memeger.
According to the indictment, Hoffner owned the Brown Street Pub in Philadelphia, Pennsylvania. The indictment alleges that on 23 occasions, between September and November 2012, Hoffner used a stolen credit number to make charges to either Visa or American Express. The cardholders were not aware of and did not authorize these transactions. The proceeds of these transactions went into accounts that Hoffner controlled.
If convicted the defendant faces a potential advisory sentencing guideline range of at least 18 to 24 months in prison, a $5.75 million fine, and three years of supervised release. The indictment also seeks forfeiture in the amount of $47,209.
The case was investigated by United States Secret Service and is being prosecuted by Assistant United States Attorney David J. Ignall.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Phenix City Woman Sentenced to More Than 12 Years in Prison for Leading $4 Million Dollar Stolen Identity Refund Fraud RingRead the Press Release
Montgomery, Alabama – A Phenix City, Alabama, resident was sentenced to serve more than 12 years in prison for leading a multi-million dollar stolen identity theft ring, announced U.S. Attorney George L. Beck Jr. of the Middle District of Alabama, and acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Tamaica Hoskins, 34, of Phenix City, was sentenced to serve 145 months in prison, three years of supervised release and ordered to forfeit $1,082,842 in proceeds from the scheme by U.S. District Judge Callie V.S. Granade of the Southern District of Alabama.
According to court documents, between September 2011 and June 2014, ringleader Tamaica Hoskins, who was sentenced today, Roberta Pyatt, Lashelia Alexander and others used stolen identities to file more than 1,000 false federal income tax returns that fraudulently claimed more than $4 million in tax refunds. Hoskins obtained stolen identities from various sources, including the identities of employees from a Columbus, Georgia, company. In order to file the false tax returns, Hoskins and Pyatt obtained two Electronic Filing Identification Numbers using sham tax businesses. On behalf of those sham tax businesses, they also applied to various financial institutions for bank products, such as blank check stock. The conspirators directed the Internal Revenue Service (IRS) to mail U.S. Treasury checks to addresses under their control and to send the tax refunds to prepaid debit cards and financial institutions where the conspirators maintained and controlled bank accounts using the sham tax businesses. When the tax refunds were deposited into the conspirators’ accounts at the financial institutions, the conspirators printed the refund checks using the blank check stock. Hoskins and Pyatt each cashed the refund checks at several businesses’ locations in Alabama and Georgia.
Co-conspirator Alexander worked for a Walmart check cashing center in Columbus. In January 2014, Alexander was approached by several co-conspirators about cashing fraudulent tax refund checks issued in the names of third parties and in return, Alexander would receive a portion of the refunds. Hoskins and Pyatt electronically filed fraudulent federal income tax returns for 2013 using the personal identifying information of numerous identity theft victims. Alexander cashed more than $100,000 in fraudulently obtained third-party refund checks containing forged endorsements.
At sentencing, prosecutors read impact statements from several victims whose identities were stolen and false tax returns were filed in their names. One victim described the consequences of the fraud on her and her family, stating:
What your intentional theft did to me was so much more than just stealing money. As a law student, a part-time employee and a full time mom, you stole time from me, time I will never get back, time spent crying because of the avalanche effect of not receiving my income tax check back which I depended on and budgeted for, time checking my mailbox daily, time worrying about whether it was ever going to come, time explaining to my children how there are horrible people in the world who steal because they feel like the world owes them something. Time spent explaining to our youngest that she won’t be getting her braces this year to fix her extremely crooked teeth. Time explaining that Christmas may have to be put on hold this year. Luckily, we are fortunate to have family and friends who love and care enough about us that in our time of need, they stepped up to the plate without batting an eye. We had to borrow money to buy law school books because the tax return was not coming. Financially it was a serious hardship because when you do not have money for necessities, it puts an emotional strain on every part of your life.
Roberta Pyatt pleaded guilty to conspiracy to commit wire fraud and is scheduled to be sentenced in the Middle District of Alabama for her role in the conspiracy on July 16.
“Stolen identity refund fraud is a nationwide epidemic that causes substantial harm to the individuals whose identities are stolen, and a significant loss to the U.S. Treasury,” stated Acting Assistant Attorney General Ciraolo. “Prosecuting those who engage in this criminal conduct is among our highest priorities, and as today’s sentence demonstrates, those who orchestrate these schemes will face lengthy periods of incarceration and steep monetary penalties.”
U.S. Attorney Beck Jr. and Acting Assistant Attorney General Ciraolo commended special agents of IRS–Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorney Todd Brown of the Middle District of Alabama, who are prosecuting the case.
Peabody Tax Preparer Convicted of FraudRead the Press Release
BOSTON – A Peabody tax preparer pleaded guilty today to defrauding small-business clients out of nearly $900,000 that his clients had given him to pay their federal payroll taxes.
Barry Ginsberg, 63, pleaded guilty to multiple counts of mail and wire fraud, preparing false tax returns, and obstructing the IRS, after being indicted in May 2013. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Sept. 28, 2015.
Ginsberg owned and operated a payroll tax business that had a number of so-called “escrow” clients. Ginsberg not only prepared their payroll tax returns, but these clients also sent him money on a regular basis for the purpose of paying their payroll taxes to the IRS. Instead of doing so, however, Ginsberg took the money and used it for other business or personal reasons. As a result, the defendant’s clients—some of whom had trusted him years—racked up significant arrearages with the IRS over time.
To cover up his scheme, Ginsberg falsified his clients’ tax returns, which he was hired to prepare, indicating that the clients’ payroll taxes had been paid in full, when they had not. When asked by clients about their mysterious IRS debts, Ginsberg gave them a litany of false excuses, including blaming the IRS and his own staff.
The mail and wire fraud charges provide for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the total gain or loss, whichever is greater. The maximum penalties for the tax-related crimes are three years in prison, one year of supervised release, and a fine of $100,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Eric P. Christofferson and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.
Oyster-Adams Bilingual School Teacher Pled Guilty to Sexually Abusing 4th Grade Student in ClassroomRead the Press Release
WASHINGTON – Giovanni Pena, 31, of Washington, D.C., pled guilty today to one count of Second-Degree Child Sexual Abuse and to one count of Obscenity, Acting U.S. Attorney Vincent H. Cohen, Jr. announced. The charges stem from Pena’s sexual abuse of a 4th grade student at Oyster-Adams Bilingual School, a D.C. Public School, during the 2013 – 2014 school year. Pena remains held without bond pending sentencing on September 4, 2015 before the Honorable Michael Ryan of the D.C. Superior Court.
According to the government’s evidence, Pena was the child’s 4th grade teacher during 2013 – 2014. Pena sexually abused the child by touching the child’s clothed penis and buttocks. Pena told detectives with the Metropolitan Police Department’s Youth Investigations Division that he was curious whether a 4th grade child could have an erection. Pena also had the child touch Pena’s clothed penis. These incidents took place in the classroom during the school day.
Additionally, Pena sent nude photos of his erect penis to the child, as well as a photo of Pena’s sperm. Pena used the mobile application Snapchat to transmit these images. Pena also taught the child about masturbation.
In announcing the plea, Acting U.S. Attorney Cohen commended the work of the detectives of the Metropolitan Police Department’s Youth Investigations Division. He also commended the efforts of staff from the U.S. Attorney’s Office, including Child Forensic Interview Specialists Tracy Owusu and Karen Giannakoulias, Victim Advocate Elsa Maltese, Criminal Investigator John Marsh, Paralegal Specialists Joyce Arthur and D’Yvonne Key, Legal Intern Allison Denton, and Assistant U.S. Attorney John L. Hill, who prosecuted the case.
Northern California Real Estate Investor Indicted for Bid-Rigging and Fraud Conspiracies at Public Foreclosure AuctionsRead the Press Release
A federal grand jury in San Francisco returned an indictment against a Northern California real estate investor for his role in bid-rigging and fraud conspiracies at public foreclosure auctions in Northern California, the Department of Justice announced today.
A two-count indictment has been filed in the U.S. District Court of the Northern District of California in Oakland, charging Ramin Rad “Ray” Yeganeh of San Mateo, California, with participating in conspiracies to rig bids and defraud mortgage holders and others in Alameda County.
“This defendant conspired to rig bids at home mortgage foreclosure auctions in Alameda County,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Lenders and those who lost their homes to foreclosure are entitled to the proceeds of a competitive auction, and they did not get that here. Whether a conspiracy is local, national or international in scope, the division will investigate and prosecute those who conspire rather than compete.”
To date, 54 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. In addition, 21 real estate investors have been charged in six multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo and San Francisco counties in California.
The indictment alleges, among other things, that as early as September 2008 and continuing until about January 2011, Yeganeh conspired with others not to bid against one another and instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County. Yeganeh was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries by holding second, private auctions open only to members of the conspiracy. Selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
“This is another example of justice being served in preserving the fairness of public real estate foreclosure auctions as well as the FBI’s commitment in investigating those who take advantage of a competitive marketplace,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office. “The FBI will continue to aggressively investigate real estate-related frauds and other violations of federal law which victimize distressed homeowners and financial institutions through the exploitation of the housing crisis.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from the scheme.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
New York City Private Investigator Who Hacked into E-Mail Accounts Sentenced in Manhattan Federal Court to Three Months in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ERIC SALDARRIAGA, a private investigator in New York City, was sentenced today in Manhattan federal court to three months in prison. The sentence was imposed by U.S. District Judge Richard J. Sullivan. SALDARRIAGA pled guilty to conspiracy to commit computer hacking before Judge Sullivan on March 6, 2015.
According to the allegations in documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:
The defendant, a private investigator, owned a company that provided private investigation services to members of the public for a fee. Beginning in 2009, SALDARRIAGA, through services advertised on the Internet (the “Hacking Services”), hired individuals to hack into the e-mail accounts of almost 50 different victims. For certain victims, SALDARRIAGA attempted to gain unlawful access to more than one email account. SALDARRIAGA used the Hacking Services to access, unlawfully and secretly, the e-mail accounts of individuals he investigated on behalf of his clients, as well as individuals in whom SALDARRIAGA was interested for personal reasons.
SALDARRIAGA paid the Hacking Services to provide him with login credentials, including usernames and passwords, for victims’ e-mail accounts. SALDARRIAGA then unlawfully accessed and reviewed victims’ e-mail communications. In total, SALDARRIAGA hired the Hacking Services to hack into, and provide unauthorized access to, at least 60 different e-mail accounts.
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In addition to the prison term, SALDARRIAGA, 41, of Queens, New York, was also sentenced to three years of supervised release and ordered to forfeit $5,000 and pay a $1,000 fine.
Mr. Bharara praised the FBI for their outstanding work in the investigation.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Daniel Noble is in charge of the case.
New Orleans Man Charged with Possession of Child PornographyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DAVID MOREL, age 31, of New Orleans, was charged yesterday in a Bill of Information for crimes involving the sexual exploitation of children.
According to court records, on June 25, 2015, MOREL was charged as a result of a child exploitation investigation conducted by the U.S. Department of Homeland Security-Homeland Security Investigations (“HSI”) and the Louisiana Attorney General’s Office High Tech Crime Unit (“LAGO”). According to court records, HSI and LAGO agents executed a search warrant at MOREL’s residence after determining MOREL was downloading images depicting the sexual victimization of children.
In 2010, MOREL was convicted in Orleans Parish Criminal Court of 536 counts of possession of pornography involving juveniles. He received 10 years suspended and was sentenced to 5 years home incarceration. MOREL was prohibited from using computers and the Internet. MOREL was arrested by the LAGO on December 18, 2014, and is currently in state custody for a violation of his state probation.
Because of his prior state conviction for similar criminal conduct, MOREL faces a mandatory minimum penalty of ten years and a maximum penalty of twenty years, followed by up to a lifetime term of supervised release, and a $250,000 fine.
U. S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
U.S. Attorney Polite praised the work of the U.S. Department of Homeland Security-HSI and the Louisiana Attorney General’s Office High Tech Crime Unit in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U.S. Attorney Brian M. Klebba.
David Morel Bill of Information.pdf (240.58 KB)
Mississippi Women Sentenced to Prison on Drug ChargesRead the Press Release
Jackson, Miss - Princess Grace, a/k/a Princess Rutley, 36 of Meridian, was sentenced on June 25, 2015 by U.S. District Judge Daniel P. Jordan III to 36 months in federal prison followed by three years of supervised release for conspiracy to possess with intent to distribute actual methamphetamine, announced U.S. Attorney Gregory K. Davis and DEA Special Agent in Charge Keith Brown.
Stacy Shelwood, 36, of Newton, was sentenced on June 26, 2015 by U.S. District Judge Daniel P. Jordan III to 63 months in federal prison followed by three years of supervised release for conspiracy to possess with intent to distribute actual methamphetamine.
Both defendandants were indicted and convicted as a result of DEA’s "Operation Yeti Ice", an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation, which began as an operation targeting illegal narcotics distribution in central Mississippi. The drug network involved the distribution of over 100 Kilograms of Methamphetamine and encompassed the states of California and Mississippi.
This OCDETF operation was led by the Drug Enforcement Administration and the Mississippi Bureau of Narcotics with assistance from the U.S. Marshal Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Postal Service, Internal Revenue Service Criminal Investigation, Scott County Sheriff’s Office, Leake County Sherriff’s Office, Madison County Sherriff’s Office, Carthage Police Department, Forest Police Department, Newton County Sherriff’s Office, Lauderdale County Sherriff’s Office, Decatur Police Department, Richland Police Department, Pearl Police Department, Ridgeland Police Department, and the Jackson Police Department. The case was prosecuted by Assistant U.S. Attorney Erin Chalk.
The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Miami Gardens Residents Charged with Selling Crack Cocaine and Firearms OffensesRead the Press Release
Three Miami Gardens residents, Talvet Johnson, 45, Demetrius Brown, 25, and Eric McKenzie, 25, were indicted on charges of selling crack cocaine. Brown is also charged with possessing a firearm in furtherance of drug trafficking and with possession of a firearm by a convicted felon. A fourth Miami Gardens resident, Reuben Oliver, 22, was indicted on charges of selling firearms to a convicted felon. As part of a joint federal-state operation, five other defendants who have been charged by the Miami-Dade State Attorney’s Office with related narcotics offenses remain at large.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Katherine Fernandez Rundle, State Attorney for Miami-Dade County, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Antonio G. Brooklen, Interim Chief, Miami Gardens Police Department (MGPD), made the announcement.
According to court documents and statements made in court, Johnson, Brown, and McKenzie are each charged in separate indictments with selling crack cocaine on multiple occasions in or near a housing complex located in Miami Gardens. If convicted, Brown faces a mandatory minimum sentence of five years’ imprisonment and a maximum term of life imprisonment. Johnson and McKenzie each face a maximum term of 20 years’ imprisonment. Oliver faces a maximum term of 10 years’ imprisonment.
Mr. Ferrer commended the investigative efforts of members of the United States Attorney’s Office Violence Reduction Partnership, which includes the FBI, ATF, and MGPD. The federal cases are being prosecuted by Assistant U.S. Attorneys Olivia S. Choe and Vanessa Snyder. The state cases are being prosecuted by Assistant State Attorney Sarah Lobel.
Through its Violence Reduction Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in various neighborhoods in the Southern District of Florida, while simultaneously working with community leaders and concerned citizens to mentor at-risk youth, provide job training, coordinate social services and support the reintegration of ex-offenders (returning citizens) to the community.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Member of Haitian Hostage - Taking Crew Sentenced to 16 Years in PrisonRead the Press Release
ALEXANDRIA, Va. – Samson Jolibois, 47, of Port-au-Prince, Haiti, was sentenced today to 192 months in prison, followed by three of supervised release for conspiring to commit hostage taking. Jolibois was also ordered to pay over $32,000 in restitution.
Jolibois plead guilty on Feb. 27, 2015. According to court documents, Jolibois was part of a criminal group that kidnapped and held hostage two U.S. citizens in the area of Carrefour, Haiti. The group targeted U.S citizens of Haitian descent who had returned to visit Haiti, because they believed these individuals to be from wealthy families. During two separate events, members of the criminal group took victims at gunpoint from outside their residences and held the victims hostage for several days while seeking ransom money from their families in exchange for the victims’ release. One victim was rescued by Haitian law enforcement, and the other victim escaped captivity.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and George L. Piro, Special Agent in Charge of the FBI’s Miami Field Office, made the announcement after sentencing by U.S. District Judge Liam O’Grady.
This case was investigated by the FBI’s Miami Field Office. Assistant U.S. Attorney Michael P. Ben’Ary prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:13-cr-303.
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Massachusetts Dentist Sentenced to Prison for Tax EvasionRead the Press Release
A Douglas, Massachusetts, dentist was sentenced today to serve 16 months in prison for tax evasion in the U.S. District Court for the District of Massachusetts, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
George Fenzell was indicted in February 2014 by a federal grand jury sitting in Boston on multiple counts of tax evasion and one count of corruptly endeavoring to obstruct the Internal Revenue Service (IRS). In November 2014, he pleaded guilty to one count of tax evasion.
U.S. District Court Judge Timothy S. Hillman also sentenced Fenzell to one year of supervised release and ordered him to pay $157,407 in restitution to the IRS. In sentencing Fenzell, Judge Hillman departed downward from the recommended U.S. Sentencing Guidelines range due, in part, to Fenzell’s cooperation with the government on other matters.
According to court documents, from 1999 through 2012, Fenzell engaged in conduct intended to obstruct the IRS. For the years 1999 through 2007, he failed to file timely federal income tax returns and concealed income that he earned from his dental practice from the IRS. Fenzell operated a dental office located in Shrewsbury, Massachusetts. He concealed his dental business receipts by diverting the funds through nominee entities, including River Valley Dental. He used multiple nominee bank accounts to conceal his ownership of his income and assets. Fenzell also titled and registered a Lincoln Navigator and Ducati motorcycle with another nominee entity, Smiling Trust, and made extensive use of cash in order to conceal his fraud from the IRS.
In response to a Massachusetts Department of Revenue investigation and collection action in 2007, Fenzell filed his delinquent federal tax returns for 2000 through 2005. In filing those returns, Fenzell admitted that he owed federal income taxes totaling $129,841. Fenzell had not made any tax payments to the IRS for those years. Rather than pay the federal income taxes and additional interest and penalties that were due and owing, between 2007 and 2012, Fenzell evaded IRS collection efforts by diverting his business receipts to nominee entities and using nominee bank accounts in Florida and Rhode Island to hide his income and assets. During the same period, he falsified his 2006 and 2007 tax returns that he filed late in 2009, and also failed to file his tax returns for 2008 through 2011.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant Chief John N. Kane Jr. and Trial Attorney Thomas Koelbl of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office of the District of Massachusetts for their substantial assistance.
- Man Sentenced for False Statements in Relation to Blowout Preventer Testing on Oil Platform in Gulf of Mexico
Man Arrested, Charged with Illegal Possession of Body ArmorRead the Press Release
St. Thomas, USVI- Fabian Towers, 50, made his initial appearance in District Court today before U.S. Magistrate Ruth Miller after his arrest for Illegal Possession of Body Armor, United States Attorney Ronald W. Sharpe announced. Towers was remanded to the custody of the U.S. Marshals Service pending a detention hearing scheduled for July 1, 2015.
On April 9, 2015, a federal grand jury returned a two-count indictment charging Towers with Possession of Body Armor by a Violent Felon, in violation of federal and territorial law. According to the indictment, Towers possessed a bullet proof vest and had previously been convicted of First Degree Robbery in 1982 and 1983. As a person convicted of a crime of violence, Towers is prohibited from possessing body armor. If convicted, Towers, faces up to three years in prison on both the federal count and the territorial count.
United States Attorney Sharpe reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The case is the result of a joint investigation by the Federal Bureau of Investigation and the Virgin Islands Police Department. It is being prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Local Physician Sentenced on Health Care Fraud ChargesRead the Press Release
St. Louis, MO – DR. DEVON GOLDING was sentenced yesterday to four months imprisonment and eight months home detention on multiple health care fraud related charges for billing for services not rendered and false statements involving a health care benefit plan. Dr. Golding will also have to pay over $145,000 in restitution.
According to testimony presented at trial, Dr. Golding billed for services on multiple occasions when he was actually out of town. Dr. Golding employed a registered nurse, who at various times during her employment from September 2009 to November 2011, took the examination to become certified as a nurse practitioner. Each time, she failed the examination and advised Dr. Golding that she had failed the examination. She worked five days a week and saw patients on these days. Dr. Golding typically came to the office 2-3 days a week. In Dr. Golding’s absence, the registered nurse examined and diagnosed patients, prescribed narcotic medications and ordered lab tests for the patients. The registered nurse also completed progress notes for the patients, which Dr. Golding signed upon his return to the office, and thereby falsely indicated that he had seen the patients. Dr. Golding directed the registered nurse to provide these services, although he knew these services were beyond the scope of her license as a registered nurse.
Golding, St. Louis, MO, was convicted in February of three felony counts of health care fraud and two felony counts of making false statements related to health services. He appeared Thursday before United States District Judge John A. Ross.
This case was investigated by the United States Department of Health and Human Services-Office of the Inspector General, the Federal Bureau of Investigation and the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office. Assistant United States Attorneys Dorothy McMurtry and Gwen Carroll handled the case for the U.S. Attorney’s Office.
Kenton County Man Admits Making Child Pornography Available for Download on the InternetRead the Press Release
COVINGTON — A Kenton County man has admitted to making child pornography images and videos available for download over the internet.
On Thursday, Alan K. Newberry, 43, of Park Hills, Ky., pleaded guilty to distribution of child pornography. Based on his conviction, Newberry will be required to register as a sex offender for the remainder of his life.
According to Newberry’s plea agreement, authorities with the Kentucky Attorney General’s Office identified child pornography files that had been made available for download on the internet. They traced the source of the images and videos to Newberry’s computer, which was located at his home in Park Hills. Authorities executed a search warrant at Newberry’s residence, searched his computer, and found 4,000 images and 700 videos of children engaged in sexually explicit conduct. Many of the images depicted prepubescent children and sadistic conduct.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Jack Conway, Kentucky Attorney General, jointly announced the guilty plea.
The investigation was conducted by the Office of the Kentucky Attorney General.
Newberry is scheduled for sentencing on September 24, 2015. He faces a maximum of 20 years in prison. The Court must consider the U.S. Sentencing Guidelines and the federal statutes before imposing a sentence.
Judge Imposes Death Sentence for Boston Marathon BomberRead the Press Release
A federal judge in Boston formally sentenced Dzhokhar A. Tsarnaev on June 24, for his role in using weapons of mass destruction at the 2013 Boston Marathon. U.S. District Judge George A. O’Toole of the District of Massachusetts imposed a sentence of death and multiple consecutive life sentences.
U.S. Attorney Carmen M. Ortiz of the District of Massachusetts, Assistant Attorney General for National Security John P. Carlin, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Vincent B. Lisi of the FBI’s Boston Division, Commissioner William B. Evans of the Boston Police Department, Colonel Timothy P. Alben of the Massachusetts State Police, Special Agent in Charge Daniel J. Kumor of the Bureau of Alcohol, Tobacco, Firearms and Explosives’s Boston Field Division and Deputy Special Agent in Charge Michael Shea of Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Boston made the announcement.
In May 2014, a federal jury in Boston recommended that Tsarnaev be sentenced to death. The counts on which the jury recommended a death sentence all related to the pressure cooker bomb Tsarnaev planted and detonated in front of the Forum restaurant, killing Lingzi Lu and Martin Richard. The same jury convicted Tsarnaev on all 30 counts of the indictment on April 8, 2015.
Tsarnaev, 21, a U.S. citizen formerly residing in Cambridge, Massachusetts, was convicted of use of a weapon of mass destruction resulting in death and conspiracy; bombing of a place of public use resulting in death and conspiracy; malicious destruction of property resulting in death and conspiracy; use of a firearm during and in relation to a crime of violence; use of a firearm during and in relation to a crime of violence causing death; carjacking resulting in serious bodily injury; interference with commerce by threats or violence; and aiding and abetting.
Beginning no later than February 2013, Tsarnaev and his brother, Tamerlan Tsarnaev, conspired to detonate improvised explosive devices (IEDs), bomb places of public use and destroy property. On April 15, 2013, during the 117th running of the Boston Marathon, the brothers placed two pressure cooker bombs filled with shrapnel among the crowds of spectators on Boylston Street and then detonated the bombs seconds apart, killing three people, maiming 17 and injuring hundreds more. The brothers fled the scene in the chaos of the destruction. Three days later, on April 18, Tsarnaev and his brother, armed with five IEDs and a Ruger semiautomatic pistol that Tsarnaev had borrowed from a friend, drove to the Massachusetts Institute of Technology (MIT) campus where they shot and killed MIT Police Officer Sean Collier and attempted to steal his service weapon. Approximately 20 minutes later, they carjacked a Mercedes SUV, kidnapped the driver and forced him to drive to a gas station, and robbed him of $800 along the way. After the driver managed to escape, the brothers drove to Laurel Street and Dexter Avenue in Watertown, Massachusetts, where they exploded additional IEDs and engaged in a firefight with Watertown police officers. During the stand-off, Tsarnaev drove the carjacked vehicle at three officers, attempting to kill them and ran over his brother as he escaped. Tsarnaev hid in a winterized boat in a backyard in Watertown until his apprehension and arrest the following night. His brother died from injuries sustained at the scene.
This investigation was conducted by the FBI’s Boston Division, Boston Police Department, Massachusetts State Police, Department of Justice’s National Security Division and member agencies of the Boston Joint Terrorism Task Force, including the ATF, HSI, U.S. Marshals Service, Massachusetts Bay Transit Authority and others. In addition, the Watertown Police Department; the Cambridge, Massachusetts, Police Department; the MIT Police Department; the Boston Fire Department; the National Guard and police, fire and emergency responders from across Massachusetts and New England played critical roles in the investigation and response.
This case was prosecuted by Assistant U.S. Attorneys William Weinreb, Aloke Chakravarty and Nadine Pellegrini of the District of Massachusetts's Anti-Terrorism and National Security Unit, and Trial Attorney Steve Mellin of the Justice Department’s Capital Case Section. Vital assistance was also provided by attorneys from the National Security Division’s Counterterrorism Section and the Criminal Division’s Capital Case Section.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Johnston in Great Falls on June 25, 2015, and entering pleas of Not Guilty were:
- JOHNNY LEE HAMILTON, a 22-year-old resident of Poplar, appeared on charges of burglary. If convicted of the charge contained in the indictment, HAMILTON faces 20 years in prison, $50,000 in fines and 3 years supervised release. The case was investigated by the Fort Peck Tribes Department of Law and Justice. PACER Case Reference. 14-84
Appearing before U.S. Magistrate Lynch in Missoula on June 24, 2015 and entering pleas of Not Guilty were:
- SPENCER JAMES BRUSELL, a 38-year-old resident of Kalispell, appeared on charges of counterfeiting obligations or securities of the United States and uttering counterfeit obligations or securities. If convicted of the most serious charges contained in the indictment, BRUSELL faces 20 years in prison, $250,000,000 in fines and 3 years supervised release. The case was investigated by the United States Secret Service. PACER Case Reference. 15-04
- ERNEST KHALID CALVERT, JR., a 20-year-old resident of Dania Beach, Florida, appeared on charges of conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. If convicted of the most serious charges contained in the indictment, CALVERT faces 20 years in prison, $250,000,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-22
- ROBERT ELLIS NORRIS, a 23-year-old resident of Boynton Beach, Florida, appeared on charges of conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. If convicted of the most serious charges contained in the indictment, NORRIS faces 20 years in prison, $250,000,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-22
Appearing before U.S. Magistrate Ostby in Billings on June 23, 2015, and entering pleas of Not Guilty were:
- LEON SEMINOLE, a 57-year-old resident of Lame Deer, appeared on charges of strangulation and assault resulting in substantial bodily injury. If convicted of the most serious charge contained in the indictment, SEMINOLE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference. 15-62
Appearing before U.S. Magistrate Johnston in Great Falls on June 23, 2015, and entering pleas of Not Guilty were:
- SHAD JAMES HUSTON, a 39-year-old resident of Havre, appeared on charges of false claims act conspiracy, scheme to defraud the Chippewa Cree Tribe/wire, bribery – offering an official of an Indian tribal government receiving federal funding payments for personal benefit and false and fraudulent claims against a federal funded project. If convicted of the most serious charges contained in the indictment, HUSTON faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the U.S. Department of Interior Office of Inspector General, Internal Revenue Service Criminal Investigation Division, the U.S. Department of Health and Human Services Office of Inspector General, Environmental Protection Agency and the Federal Bureau of Investigation. PACER Case Reference. 15-35
Appearing before U.S. Magistrate Ostby in Billings on June 18, 2015, and entering pleas of Not Guilty were:
- JETSEE ALBERTO NUNEZ-GUZMAN, a 34-year-old resident of Mexico, appeared on charges of possession with intent to distribute methamphetamine. If convicted of the charge contained in the indictment, NUNEZ-GUZMAN faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration. PACER Case Reference. 15-68
- CAROL LYNETTE PEARSON, a 43-year-old resident of Billings, appeared on charges of conspiracy to possess with intent to distribute methamphetamine, possession with intent to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, PEARSON faces life in prison, $8,000,000 in fines and 8 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-46
Appearing before U.S. Magistrate Lynch in Missoula on June 17, 2015, and entering pleas of Not Guilty were:
- JOSEPH DAVID ROBERTSON, a 76-year-old resident of Basin, appeared on charges of unauthorized discharge of pollutants into waters of the United States and malicious mischief – injury/depredation of property of the United States. If convicted of the most serious charges contained in the indictment, ROBERTSON faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Environmental Protection Agency and the United States Forest Service. PACER Case Reference. 15-07
- SEIBERT SMITH/DRUMLUMMON GOLD CORPORATION, a 76-year-old resident of Helena, appeared on charges of false statement sin records and false statements within jurisdiction of United States. If convicted of the most serious charge contained in the indictment, SMITH faces 5 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the US Department of Labor Mine Safety and Health Administration. PACER Case Reference. 15-06
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indictment in UPMC Stolen Identity SchemeRead the Press Release
PITTSBURGH - On Wednesday, a federal grand jury in Pittsburgh returned a multi-count indictment against Yoandy Perez Llanes, a foreign national residing outside of the United States. Llanes was charged in a 21-count indictment with a scheme to defraud the Internal Revenue Service, United States Treasury, using the stolen identities of employees of UPMC (University of Pittsburgh Medical Center) to file false federal income tax returns in order to obtain unlawful tax refunds. Llanes and unnamed conspirators converted the unlawful tax refunds to Amazon.com gift cards, which were used to buy merchandise which was shipped internationally. All of these acts occurred generally between January and April, 2014. Llanes is charged with conspiracy to defraud the United States, wire fraud, money laundering and aggravated identity theft.
Early in 2014, thousands of employees of UPMC had their personal information compromised by hackers, who intruded into a UPMC computerized database stealing names, social security numbers, dates of birth and other personal identifying information. This data was then used to file false 2013 federal tax returns. Investigators learned that names and other identifiers were used by Llanes and other conspirators to file 935 false tax returns in which unlawful refunds were requested in the form of Amazon.com gift cards. Quick action by the IRS, UPMC, and Amazon.com frustrated the efforts of the fraudsters to file additional false returns and obtain further fraudulent proceeds. While the perpetrators sought approximately $2.2 million in fraudulent refunds, only $1.4 million was actually disbursed as refunds. Stolen Identity Refund Fraud, such as that alleged to have been perpetrated by Llanes, costs United States taxpayers billions of dollars.
This criminal scheme was complex and crossed national borders. Llanes and the conspirators used anonymous and encrypted email to disguise their identities and proxy computers to file returns. Using the fraudulently obtained Amazon.com gift cards, Llanes purchased hundreds of thousands of dollars in electronic merchandise for shipment through reshipping services in Miami, Florida, with instructions for delivery to “drop” locations outside the United States. Llanes and others then retrieved the merchandise and advertised it for sale on online auction websites overseas.
Though Llanes and the conspirators attempted to conceal their whereabouts and their identities through the use of encrypted email and proxy services, investigators were able to uncover the sophisticated plot and identify Llanes.
The law provides for a sentence of imprisonment, a fine of $5,500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The Internal Revenue Service-Criminal Investigation, the United States Secret Service and the United States Postal Inspection Service, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Indictment in UPMC Stolen Identity SchemeRead the Press Release
On Wednesday, a federal grand jury in Pittsburgh returned a multi-count indictment against Yoandy Perez Llanes, a foreign national residing outside of the United States. Llanes was charged in a 21-count indictment with a scheme to defraud the Internal Revenue Service (IRS), and the U.S. Treasury, using the stolen identities of employees of the University of Pittsburgh Medical Center (UPMC) to file false federal income tax returns in order to obtain unlawful tax refunds. Llanes and unnamed conspirators converted the unlawful tax refunds to Amazon.com gift cards, which were used to buy merchandise which was shipped internationally. All of these acts occurred generally between January and April 2014. Llanes is charged with conspiracy to defraud the United States, wire fraud, money laundering and aggravated identity theft.
Early in 2014, thousands of employees of UPMC had their personal information compromised by hackers, who intruded into a UPMC computerized database stealing names, social security numbers, dates of birth and other personal identifying information. This data was then used to file false 2013 federal tax returns. Investigators learned that names and other identifiers were used by Llanes and other conspirators to file 935 false tax returns in which unlawful refunds were requested in the form of Amazon.com gift cards. Quick action by the IRS, UPMC and Amazon.com frustrated the efforts of the fraudsters to file additional false returns and obtain further fraudulent proceeds. While the perpetrators sought approximately $2.2 million in fraudulent refunds, only $1.4 million was actually disbursed as refunds. Stolen Identity Refund Fraud, such as that alleged to have been perpetrated by Llanes, costs United States taxpayers billions of dollars.
This criminal scheme was complex and crossed national borders. Llanes and the conspirators used anonymous and encrypted email to disguise their identities and proxy computers to file returns. Using the fraudulently obtained Amazon.com gift cards, Llanes purchased hundreds of thousands of dollars in electronic merchandise for shipment through reshipping services in Miami, Florida, with instructions for delivery to “drop” locations outside the United States. Llanes and others then retrieved the merchandise and advertised it for sale on online auction websites overseas.
Though Llanes and the conspirators attempted to conceal their whereabouts and their identities through the use of encrypted email and proxy services, investigators were able to uncover the sophisticated plot and identify Llanes.
The law provides for a sentence of imprisonment, a fine of $5.5 million or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The IRS-CI, the U.S. Secret Service and the U.S. Postal Inspection Service, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Indiana Manufacturer Sentenced in Connection with Clean Air Act False Statement ViolationsRead the Press Release
Calumite Company LLC, a manufacturer of an additive used in the production of glass, was sentenced today in U.S. District Court in Hammond, Indiana, in connection with its September 2014 plea of guilty to two Clean Air Act false statement violations. The company was sentenced to pay a $325,000 fine, serve a two year term of probation and implement an environmental compliance plan that includes an annual environmental compliance training program.
Calumite, located near the shores of Lake Michigan in Portage, Indiana, manufactures and sells a powdery substance of the same name to various glass manufacturers. The company collects slag, a waste product of the steel industry, dries it in a hot gas oven, crushes it into a fine powder and then ships it off-site to glass manufacturers, who use it as an additive to lower the temperature at which glass can be produced.
Calumite's Portage facility was subject to a Title V Clean Air Act Operating Permit issued by the Indiana Department of Environmental Management (IDEM). Among other things, the permit required that Calumite operate, maintain and monitor several “baghouses” on site that are used to control and minimize emissions of a fine particulates. One of the baghouses, known as the loadout baghouse, was used to collect emissions of particulate that occurred during the loading of product onto tractor trailers and rail cars for shipment to customers.
A differential pressure gauge (DP gauge) attached to each baghouse continuously monitored and measured the efficiency and effectiveness of the baghouses, to determine whether they were operating properly. Calumite's Clean Air Act permit required that DP gauges on the baghouses be read daily, while the baghouses were operating and that the results be recorded on daily maintenance log sheets. The company also was required to submit quarterly reports to IDEM that stated whether the company was in compliance with permit requirements.
From Dec. 5, 2008, through late July 2009, Calumite did not maintain the loadout baghouse in operating condition and the DP gauge was broken. Nevertheless, during this same time period, employees continued to load tractor trailers and rail cars with product for shipment off-site. Calumite employees also knowingly continued to routinely fill out daily logs that falsely reflected DP gauge monitoring readings that were within the range allowed by the permit and caused false information to be submitted to IDEM in the company’s quarterly reports.
The Clean Air Act makes it a crime to knowing make a material false statement or omit material information from a document that is required to be filed or maintained under the statute. Both the daily maintenance logs and the quarterly reports were required by Calumite’s permit and the Clean Air Act.
The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the U.S. Environmental Protection Agency’s Criminal Investigation Division and the Indiana Department of Environmental Management’s Office of Criminal Investigations. The case was prosecuted by the U.S. Attorney’s Office for the Northern District of Indiana and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Indiana Manufacturer Sentenced in Connection with Clean Air Act False Statement ViolationsRead the Press Release
WASHINGTON – Calumite Company LLC, a manufacturer of an additive used in the production of glass, was sentenced today in U.S. District Court in Hammond, Indiana, in connection with its September 2014 plea of guilty to two Clean Air Act false statement violations. The company was sentenced to pay a $325,000 fine, serve a two year term of probation and implement an environmental compliance plan that includes an annual environmental compliance training program.
Calumite, located near the shores of Lake Michigan in Portage, Indiana, manufactures and sells a powdery substance of the same name to various glass manufacturers. The company collects slag, a waste product of the steel industry, dries it in a hot gas oven, crushes it into a fine powder and then ships it off-site to glass manufacturers, who use it as an additive to lower the temperature at which glass can be produced.
Calumite's Portage facility was subject to a Title V Clean Air Act Operating Permit issued by the Indiana Department of Environmental Management (IDEM). Among other things, the permit required that Calumite operate, maintain and monitor several “baghouses” on site that are used to control and minimize emissions of a fine particulates. One of the baghouses, known as the loadout baghouse, was used to collect emissions of particulate that occurred during the loading of product onto tractor trailers and rail cars for shipment to customers.
A differential pressure gauge (DP gauge) attached to each baghouse continuously monitored and measured the efficiency and effectiveness of the baghouses, to determine whether they were operating properly. Calumite's Clean Air Act permit required that DP gauges on the baghouses be read daily, while the baghouses were operating and that the results be recorded on daily maintenance log sheets. The company also was required to submit quarterly reports to IDEM that stated whether the company was in compliance with permit requirements.
From Dec. 5, 2008, through late July 2009, Calumite did not maintain the loadout baghouse in operating condition and the DP gauge was broken. Nevertheless, during this same time period, employees continued to load tractor trailers and rail cars with product for shipment off-site. Calumite employees also knowingly continued to routinely fill out daily logs that falsely reflected DP gauge monitoring readings that were within the range allowed by the permit and caused false information to be submitted to IDEM in the company’s quarterly reports.
The Clean Air Act makes it a crime to knowing make a material false statement or omit material information from a document that is required to be filed or maintained under the statute. Both the daily maintenance logs and the quarterly reports were required by Calumite’s permit and the Clean Air Act.
The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the U.S. Environmental Protection Agency’s Criminal Investigation Division and the Indiana Department of Environmental Management’s Office of Criminal Investigations. The case was prosecuted by the U.S. Attorney’s Office for the Northern District of Indiana and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
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Heroin Traffickers Sentenced to Federal PrisonRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.- U.S. Attorney William J. Hochul Jr. announced today that Jonathan Rodriguez Melendez a/k/a ‘Bori”, 25, and C.J. Cortes Rodriguez, 28, both of Rochester, New York, have been sentenced by the Hon. Frank P. Geraci, United States District Court, for their roles in an armed heroin trafficking operation which operated in the northeast section of the city of Rochester.
Assistant U.S. Attorney Douglas E. Gregory, who handled the case, stated that Jonathan Rodriguez Melendez received a sentence of 10 years in federal prison, as well as a $500 fine and 5 years of post-release supervision. C.J. Cortes Rodriguez received a sentence of 9 years and 4 years of post-release supervision. Earlier this year, both men pled guilty to conspiring to distribute quantities of heroin and possession of firearms in connection with the drug offenses. The investigation, which included court ordered wire taps and numerous undercover purchases of heroin from both men, revealed that they were obtaining quantities of heroin from a Philadelphia source of supply and distributing it here in Monroe County.
“Like many areas of our country, the Rochester community has experienced an alarming increase in overdoses associated with heroin and other opiates,” said U. S. Attorney Hochul. “Certainly the most effective way to combat this crisis would be for users to stop taking these illegal substances or even better, never start. Until that day comes, however, we in law enforcement will continue to use all of our resources to bring to justice those who would poison our community with these deadly substances.”
The investigation was led by the Federal Bureau of Investigation, with the assistance of the Rochester Police Department, under the direction of Chief Michael Ciminelli, and the Greater Rochester Area Narcotics Enforcement Team (GRANET).
Hammond Woman Charged in Tax Fraud Scheme with Mail Fraud and Aggravated Identity TheftRead the Press Release
U.S. Attorney Kenneth A. Polite announced that RAVEN HUGHES, age 27, of Hammond, was charged today in an eight-count Indictment with mail fraud and aggravated identity theft for engaging in a multi-year tax fraud scheme.
According to the Indictment, HUGHES obtained the name and social security number of unsuspecting individuals and used that information without their knowledge or authorization to prepare false tax returns that claimed large tax refunds. The refund checks were mailed to numerous Post Office Boxes opened by HUGHES throughout Louisiana, as well as her residence. Once the tax refund checks were received, HUGHES falsely endorsed the checks and cashed them. HUGHES also arranged for some of the refunds to be transmitted electronically into bank accounts under her control. In total, HUGHES caused not fewer than 148 federal income tax returns to be submitted in the names of at least 103 different individuals without their knowledge or authorization. As a result of the conduct described above, between 2009 and 2012 HUGHES sought over $646,000 in fraudulent tax refunds from the Department of the Treasury, and she received at least $199,050.
“Our agency will vigorously pursue fraudulent refund claims and those individuals who engage in identity theft,” stated Jerome R. McDuffie, Special Agent in Charge, IRS Criminal Investigation. “The message to be taken from today’s court action against Ms. Hughes is simple. We will continue to work with the United States Attorney's Office to aggressively protect innocent taxpayers and preserve the integrity of our tax system. Participation in refund fraud schemes does not pay and those who do so will be prosecuted and held accountable for their illegal activities."
If convicted, HUGHES faces a maximum term of imprisonment for each count of mail fraud of not more than twenty years, followed by up to three years of supervised release, and a $250,000 fine. HUGHES also faces a mandatory consecutive two-year sentence for the commission of aggravated identity theft.
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Internal Revenue Service – Criminal Investigation in investigating this matter. Assistant U.S. Attorney Jordan Ginsberg is in charge of the prosecution.
Raven Hugh Indictment.pdf (1.91 MB)
Gwinnett County Man goes to Prison for Child PornographyRead the Press Release
ATLANTA - Samuel London has been sentenced to eight years and four months in federal prison for downloading child pornography. London’s computer contained thousands of files containing child pornography including images depicting the sexual abuse of infants and toddlers.
“It is beyond belief that anyone could enjoy watching the sexual abuse of infants and toddlers,” said Acting U.S. Attorney John Horn. “This defendant’s conduct fueled the production and trade of this disgusting material.”
“This sentencing of Mr. London removes from our community an individual who has consistently demonstrated his willingness to exploit vulnerable children through child pornography. This case not only reflects the commitment of law enforcement to aggressively pursue these types of cases but also illustrates why we need to,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to Acting U.S. Attorney Horn, the charges and other information presented in court: In August 2013, law enforcement officers in Maryland seized a website that was used by individuals to advertise and distribute child pornography and to discuss the sexual abuse of children. That investigation led to a target in Michigan, who admitted to FBI agents that he had sexually abused his three-year-old daughter while using Skype so that a couple in Georgia could watch the abuse.
FBI agents determined that the couple—Samuel London and Heather Dalton—lived in Sugar Hill, Georgia. FBI agents executed a search warrant at their home on January 24, 2014. Agents found thousands of files containing child pornography on a computer belonging to London, with many of the images depicting the sexual abuse of infants and toddlers.
Samuel London, 30, of Sugar Hill, Georgia, has been sentenced to eight years and four months in prison to be followed by ten years of supervised release. London was convicted on these charges on April 2, 2015, after he pleaded guilty.
Heather Dalton is being prosecuted by the Gwinnett County District Attorney’s Office on charges of child molestation.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Paul R. Jones prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Former UW-Oshkosh Student Sentenced to 40 Months in Prison for Possession of RicinRead the Press Release
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.
Former State Representative Convicted on Bribery ChargeRead the Press Release
A former state representative and Pikeville, Kentucky, coal operator, Wendell Keith Hall, has been convicted by a jury of bribing a federal mine official.
The jury deliberated for one hour and 30 minutes following five days of trial. According to evidence presented at trial, Hall, who represented House District 93 in the Kentucky General Assembly, paid mine reclamation officer Kelly Shortridge for favorable treatment in connection with his official duties.
Shortridge worked as an environmental inspector for the Office of Surface Mine Reclamation and Enforcement, where he was responsible for enforcing federal mine reclamation laws and regulations. From 2006 through 2011, Shortridge inspected mines owned by Hall. Shortridge ignored violations that occurred on Hall’s property in exchange for a series of payments totaling over $46,000.
The evidence also established that the two men disguised the payments as consulting fees. In 2010, they set up a shell company, DKJ Consulting, in the name of Shortridge’s wife and opened a bank account with her as the sole authorized signatory on the account. Hall then used a company he owned, S&K Properties, to funnel money to Shortridge through DKJ to make the payments appear as legitimate business expenses.
“Mr. Hall’s brazen scheme to corrupt an important governmental function for his personal benefit is made all the more egregious by his former status as a member of the Kentucky General Assembly,” said U.S. Attorney Kerry B. Harvey for the Eastern District of Kentucky. “The United States will seek a sentence which properly reflects the serious nature of Mr. Hall’s criminal conduct.”
Shortridge pleaded guilty in February of this year. Shortridge is scheduled to be sentenced on Aug. 6, 2015. U.S. Attorney Harvey, Special Agent in Charge, Howard S. Marshall for the FBI and Scott Oliver of the Office of Inspector General for the Department of Interior jointly made the announcement.
Hall faces a maximum of 10 years in prison. However, any sentence imposed will come after the court considers the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Former State Representative Convicted on Bribery ChargeRead the Press Release
PIKEVILLE – A former state representative and Pikeville coal operator, Wendell Keith Hall, has been convicted by a jury of bribing a federal mine official.
The jury deliberated for one hour and 30 minutes following five days of trial. According to evidence presented at trial, Hall, who represented House District 93 in the Kentucky General Assembly, paid mine reclamation officer Kelly Shortridge for favorable treatment in connection with his official duties.
Shortridge worked at the Kentucky Division of Mine Reclamation and Enforcement, where he was responsible for enforcing mine reclamation laws and regulations. From 2006 through 2011, Shortridge inspected mines owned by Hall. Shortridge ignored violations that occurred on Hall’s property in exchange for a series of payments totaling over $46,000.
The evidence also established that the two men disguised the payments as consulting fees. In 2010, they set up a shell company, DKJ Consulting, in the name of Shortridge’s wife and opened a bank account with her as the sole authorized signatory on the account. Hall then used a company he owned, S&K Properties, to funnel money to Shortridge through DKJ to make the payments appear as legitimate business expenses.
“Mr. Hall’s brazen scheme to corrupt an important governmental function for his personal benefit is made all the more egregious by his former status as a member of the Kentucky General Assembly,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “The United States will seek a sentence which properly reflects the serious nature of Mr. Hall’s criminal conduct.”
Shortridge pleaded guilty in February of this year. Shortridge is scheduled to be sentenced on August 6, 2015.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, FBI; and Scott Oliver, Department of Interior, Office of Inspector General, jointly made the announcement.
Hall faces a maximum of 10 years in prison. However, any sentence imposed will come after the Court considers the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Former Senior Executive of Qualcomm Sentenced to 18 Months and Fined $500,000 for Insider Trading and Money LaunderingRead the Press Release
The former Executive Vice President and President of Global Business Operations for Qualcomm Inc., was sentenced today to 18 months in prison and fined $500,000 for his role in a three-year insider trading scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California made the announcement.
“Through his position as a high-ranking executive at Qualcomm, Jing Wang gained unique access to information about the company’s earnings and intended acquisitions and illegally exploited that inside information for personal gain,” said Assistant Attorney General Caldwell. “He then enlisted the services of others – his stock broker and his brother – to cover up the scheme. This prosecution demonstrates the Criminal Division’s commitment to holding accountable corporate executives who would undermine the integrity of the financial marketplace.”
“Jing Wang was a powerful insider at one of the world’s top corporations – but he threw it all away to make a few hundred thousand dollars,” said U.S. Attorney Duffy. “While Wang has lost his power, his position and his freedom, the real losers here are investors who play by the rules, and our nation’s financial system, which is diminished with every one of these schemes.”
Jing Wang, 52, of Del Mar, California, pleaded guilty in July 2014 to insider trading, money laundering and obstruction of justice for orchestrating a multi-year scheme to trade on the confidential information of Qualcomm and cover up his criminal conduct. The sentence was imposed by U.S. District Judge William Q. Hayes of the Southern District of California.
In connection with his plea, Wang admitted that he made three, separate insider trades using a brokerage account in the name of his British Virgin Island (BVI) shell company, Unicorn Global Enterprises. First, in early 2010, prior to Qualcomm’s announcement of a dividend increase and stock repurchase, Wang bought company stock valued at approximately $277,000. He also admitted that, in December 2010, while attending Qualcomm’s Board of Directors meeting in Hong Kong, and hours after the Board approved a non-public offer to purchase Atheros, a developer of semiconductors for wireless communications, Wang purchased stock in Atheros. Wang further admitted that, just a few weeks later, he directed his stockbroker, Gary Yin, to sell the Atheros stock, for approximately $481,000, and purchase Qualcomm stock one day before the company announced record earnings.
Wang also pleaded guilty to money laundering for transferring the illegal proceeds from Unicorn’s account to an account of a new BVI shell company he controlled. He further admitted to obstructing justice by creating a false cover story in which he and co-conspirator Yin would blame Wang’s brother Bing Wang, who resides in rural China, for the insider trading and ownership of the Unicorn Account. Among other acts, Wang collected incriminating evidence and provided it to Yin to take to China, and arranged meetings between Yin and Bing Wang during which the two rehearsed the false account.
Yin pleaded guilty to conspiring to obstruct justice and launder money, and currently is scheduled to be sentenced on July 17, 2015. Bing Wang has been charged in connection with the scheme, and is wanted on an international arrest warrant.
This case was investigated by the FBI’s San Diego Field Office and the Internal Revenue Service-Criminal Investigation’s San Diego Field Division. The SEC’s Los Angeles Regional Office provided substantial assistance. The case is being prosecuted by Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eric J. Beste of the Southern District of California.
Former Senior Executive of Qualcomm Sentenced to 18 Months and Fined $500,000 for Insider Trading and Money LaunderingRead the Press Release
SAN DIEGO – Jing Wang, former Executive Vice President and President of Global Business Operations for Qualcomm Inc., was sentenced today to 18 months in prison and fined $500,000 for his role in a three-year insider trading scheme.
Wang, 52, who pleaded guilty in July 2014 to insider trading, money laundering and obstruction of justice charges, was sentenced by U.S. District Judge William Q. Hayes for orchestrating a scheme to trade on the confidential information of Qualcomm and covering up his criminal conduct.
“Jing Wang was a powerful insider at one of the world’s top corporations – but he threw it all away to make a few hundred thousand dollars,” said U.S. Attorney Laura Duffy. “While Wang has lost his power, his position and his freedom, the real losers here are investors who play by the rules, and our nation’s financial system, which is diminished with every one of these schemes.”
“Through his position as a high-ranking executive at Qualcomm, Jing Wang gained unique access to information about the company’s earnings and intended acquisitions and illegally exploited that inside information for personal gain,” said Assistant Attorney General Leslie R. Caldwell. “He then enlisted the services of others – his stock broker and his brother – to cover up the scheme. This prosecution demonstrates the Criminal Division’s commitment to holding accountable corporate executives who would undermine the integrity of the financial marketplace.”
In connection with his plea, Wang admitted that he made three, separate insider trades using a brokerage account in the name of his British Virgin Island (BVI) shell company, Unicorn Global Enterprises. First, in early 2010, prior to Qualcomm’s announcement of a dividend increase and stock repurchase, Wang bought company stock valued at approximately $277,000. He also admitted that, in December 2010, while attending Qualcomm’s Board of Directors meeting in Hong Kong, and hours after the Board approved a non-public offer to purchase Atheros, a developer of semiconductors for wireless communications, Wang purchased stock in Atheros. Wang further admitted that, just a few weeks later, he directed his stockbroker, Gary Yin, to sell the Atheros stock, for approximately $481,000, and purchase Qualcomm stock one day before the company announced record earnings.
Wang also pleaded guilty to money laundering for transferring the illegal proceeds from Unicorn’s account to an account of a new BVI shell company he controlled. He further admitted to obstructing justice by creating a false cover story in which he and co-conspirator Yin would blame Wang’s brother Bing Wang, who resides in rural China, for the insider trading and ownership of the Unicorn Account. Among other acts, Wang collected incriminating evidence and provided it to Yin to take to China, and arranged meetings between Yin and Bing Wang during which the two rehearsed the false account.
Yin pleaded guilty to conspiring to obstruct justice and launder money, and currently is scheduled to be sentenced on July 17, 2015. Bing Wang has been charged in connection with the scheme, and is wanted on an international arrest warrant.
This case was investigated by the FBI’s San Diego Field Office and the Internal Revenue Service-Criminal Investigation’s San Diego Field Division. The SEC’s Los Angeles Regional Office provided substantial assistance. The case is being prosecuted by Assistant U.S. Attorney Eric J. Beste of the Southern District of California and Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section.
DEFENDANT Case Number: 13CR3487-WQH Jing Wang Age: 51 Del Mar, California CHARGESCount 1: Title 15, United States Code, Sections 78j(b), 78ff and 17 C.F.R. § 240.10b-5—Securities Fraud (Insider Trading). Maximum Penalty: 20 years’ custody, a $5 million fine, 3 years’ supervised release, and a $100 special assessment.
Count 2: Title 18, United States Code, Section 1956 – Money Laundering. Maximum Penalty: 20 years’ custody, a fine of $500,000 or twice the value of the property involved in the transaction, 3 years’ supervised release, and a $100 special assessment.
INVESTIGATING AGENCIESFederal Bureau of Investigation
Internal Revenue Service-Criminal InvestigationFormer Otismed CEO Sentenced to Two Years in Prison for Selling Unapproved Surgical DevicesRead the Press Release
Corporation Previously Paid More Than $80 million to Resolve Criminal and Civil Investigations
NEWARK, N.J. – The former president and CEO of OtisMed Corp. was sentenced today to serve 24 months in prison for intentionally distributing a medical device used in knee replacement surgery after its application for marketing clearance had been rejected by the Food and Drug Administration (FDA), the Justice Department announced.
Charlie Chi, 46, of San Francisco, pleaded guilty before U.S. District Judge Claire C. Cecchi in December 2014 to three counts of distributing adulterated medical devices in interstate commerce in violation of the federal Food, Drug, and Cosmetic Act (FDCA) after having been told by the FDA, legal counsel and his own board of directors not to do so. Judge Cecchi imposed the sentence today in Newark federal court. In September 2014, Judge Cecchi sentenced OtisMed Corporation, now a subsidiary of Stryker Corporation, to a criminal fine of $34.4 million and ordered the company to pay $5.16 million in criminal forfeiture. Stryker acquired the company after the criminal conduct for which Chi was sentenced. In a related civil settlement, OtisMed agreed to pay approximately $41.2 million, including interest, to resolve its civil liability for submitting false claims to the Medicare, TRICARE, Federal Employees Health Benefits and Medicaid programs.
“The defendant betrayed the trust of patients whose doctors were using his unapproved surgical device for a serious medical procedure,” U.S. Attorney Fishman said. “With everything else people have to deal with when they are facing surgery, they shouldn’t have to worry whether their doctor is using equipment that has been approved for use. The punishment meted out to Chi and his company is appropriate.”
“Today’s sentencing of OtisMed’s CEO ought to send a clear message to others in positions of authority within the medical device and pharmaceutical industries: the Department of Justice will vigorously prosecute not only corporations, but also the individuals at their helm who are responsible for endangering public health and safety in pursuit of profit,” Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said.
According to documents filed in this case and statements made in court:
In August 2005, Chi was among the founders of OtisMed, and conceived of the OtisKnee orthopedic cutting guide, its primary product. Chi acted as OtisMed’s president, CEO and chairman of its board of directors until OtisMed was acquired by Stryker in November 2009. The OtisKnee was used by surgeons during total knee arthroplasty (TKA), commonly known as knee replacement surgery. The surgical procedure requires a surgeon to remove the ends of the leg bones and to reshape the remaining bone to accommodate the implantation of an artificial knee prosthesis. The cuts to the bone must be made at precise angles because they are critical to the clinical result; failure to achieve the correct angle in TKA procedures can result in failure of the bones and/or the implanted prosthetic joint.
OtisMed marketed the OtisKnee cutting guide as a tool to assist surgeons in making bone cuts specific to individual patients’ anatomy based on MRIs performed prior to surgery. None of OtisMed’s claims regarding the OtisKnee device were evaluated by the FDA before the company used them in advertisements and promotional material.
Between May 2006 and September 2009, OtisMed sold more than 18,000 OtisKnee devices, generating revenue of approximately $27.1 million.
On Oct. 2, 2008, OtisMed submitted a pre-market notification to the FDA seeking clearance to market the OtisKnee. The company had not previously sought the FDA’s clearance or approval and had been falsely representing to physicians and other potential purchasers that the product was exempt from such pre-market requirements.
On Sept. 2, 2009, the FDA sent OtisMed a notice that its submission had been denied, noting that the company had failed to demonstrate that the OtisKnee was as safe and effective as other legally marketed devices. The letter warned OtisMed that distribution of the OtisKnee prior to approval would be an FDCA violation, and indicated the FDA viewed the product as a “significant risk device system,” which is defined as presenting a potential for serious risk to the health, safety or welfare of a subject. Chi and others at OtisMed received advice from legal and regulatory counsel confirming it would be unlawful for OtisMed to continue distributing the OtisKnee.
Though the board of directors unanimously decided to stop further shipments of the devices, Chi was concerned that inconveniencing surgeons planning to use the OtisKnee in scheduled surgeries would exacerbate the negative impact of the FDA letter on the reputation of OtisMed and the device. Chi directed OtisMed employees to organize a mass shipment of all OtisKnee devices that had been manufactured but had not yet been shipped and suggested ways for the employees to hide the shipments from FDA regulators.
At Chi’s direction, OtisMed shipped approximately 218 OtisKnee guides from California to surgeons throughout the United States, including 16 to surgeons in New Jersey, a week after the FDA expressly denied OtisMed’s request for clearance.
“With more than 600,000 knee replacements performed each year, patients rely on FDA to help ensure that the devices are safe and work as intended,” Director George M. Karavetsos of the FDA’s Office of Criminal Investigations said. “When manufacturers ignore FDA requirements, they risk endangering patients’ health and quality of life. We will continue to protect the public health by bringing to justice those who disregard FDA regulations.”
Chi’s sentence marks the culmination of a long-term investigation conducted jointly by the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Antoinette V. Henry, and the Department of Health and Human Services’ Office of Inspector General (HHS-OIG), under the direction of Special Agent in Charge Scott J. Lampert. Counsel to the HHS-OIG and FDA’s Office of Chief Counsel to the FDA also assisted. The National Association of Medicaid Fraud Control Units, along with the Medicaid Fraud Control Unit of the Massachusetts Attorney General’s Office, assisted in coordinating the settlements with the various states.
In addition to the prison term, Judge Cecchi sentenced Chi to one year of supervised release and fined him $75,000.
The government is represented by Chief Jacob T. Elberg of the U.S. Attorney’s Office of the District of New Jersey Health Care and Government Fraud Unit and Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Charlie Chi: Peter Harvey Esq., New York
OtisMed: Brien O’Connor Esq.; Joshua Levy Esq., Boston
Counsel for Relator Richard Adrian: Joseph Callow Esq., Cincinnati, Ohio; Joel Hesch Esq., Lynchburg, Virginia
Former OtisMed CEO Sentenced for Selling Unapproved Surgical DevicesRead the Press Release
Corporation Previously Paid More Than $80 million to Resolve Criminal and Civil Investigations
The former president and CEO of OtisMed Corporation was sentenced today to serve two years in prison for intentionally distributing a medical device used in knee replacement surgery after its application for marketing clearance had been rejected by the Food and Drug Administration (FDA), the Department of Justice announced.
Charlie Chi, 46, of San Francisco, pleaded guilty in December 2014 to three counts of distributing adulterated medical devices in interstate commerce in violation of the federal Food, Drug, and Cosmetic Act (FDCA) after having been told by the FDA, legal counsel and his own board of directors not to do so. U.S. District Judge Claire C. Cecchi in Newark, New Jersey, delivered Chi’s 24-month sentence today and also ordered him to serve one year of supervised release and to pay a $75,000 fine. In September 2014, Judge Cecchi sentenced OtisMed Corporation, now a subsidiary of Stryker Corporation, to a criminal fine of $34.4 million and ordered the company to pay $5.16 million in criminal forfeiture. Stryker acquired the company after the criminal conduct for which he was sentenced today. In a related civil settlement, OtisMed agreed to pay approximately $41.2 million, including interest, to resolve its civil liability for submitting false claims to the Medicare, TRICARE, Federal Employees Health Benefits and Medicaid programs.
“Today’s sentencing of OtisMed’s CEO ought to send a clear message to others in positions of authority within the medical device and pharmaceutical industries: the Department of Justice will vigorously prosecute not only corporations, but also the individuals at their helm who are responsible for endangering public health and safety in pursuit of profit,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
“The defendant betrayed the trust of patients whose doctors were using his unapproved surgical device for a serious medical procedure,” said U.S. Attorney Paul J. Fishman of the U.S. Attorney’s Office of the District of New Jersey. “With everything else people have to deal with when they are facing surgery, they shouldn’t have to worry whether their doctor is using equipment that has been approved for use. The punishment meted out to Chi and his company is appropriate.”
According to documents filed in this case and statements made in court:
In August 2005, Chi was among the founders of OtisMed and conceived of the OtisKnee orthopedic cutting guide, its primary product. Chi acted as OtisMed’s president, CEO and chairman of its board of directors until OtisMed was acquired by Stryker in November 2009. The OtisKnee was used by surgeons during total knee arthroplasty (TKA), commonly known as knee replacement surgery. The surgical procedure requires a surgeon to remove the ends of the leg bones and to reshape the remaining bone to accommodate the implantation of an artificial knee prosthesis. The cuts to the bone must be made at precise angles because they are critical to the clinical result; failure to achieve the correct angle in TKA procedures can result in failure of the bones and/or the implanted prosthetic joint.
OtisMed marketed the OtisKnee cutting guide as a tool to assist surgeons in making bone cuts specific to individual patients’ anatomy based on MRIs performed prior to surgery. None of OtisMed’s claims regarding the OtisKnee device were evaluated by the FDA before the company used them in advertisements and promotional material.
Between May 2006 and September 2009, OtisMed sold more than 18,000 OtisKnee devices, generating revenue of approximately $27.1 million.
On Oct. 2, 2008, OtisMed submitted a pre-market notification to the FDA seeking clearance to market the OtisKnee. The company had not previously sought the FDA’s clearance or approval and had been falsely representing to physicians and other potential purchasers that the product was exempt from such pre-market requirements.
On Sept. 2, 2009, the FDA sent OtisMed a notice that its submission had been denied, noting that the company had failed to demonstrate that the OtisKnee was as safe and effective as other legally marketed devices. The letter warned OtisMed that distribution of the OtisKnee prior to approval would be an FDCA violation, and indicated the FDA viewed the product as part of a “significant risk device system,” which is defined as presenting a potential for serious risk to the health, safety or welfare of a subject. Chi and others at OtisMed received advice from legal and regulatory counsel confirming it would be unlawful for OtisMed to continue distributing the OtisKnee.
Though the board of directors unanimously decided to stop further shipments of the devices, Chi was concerned that inconveniencing surgeons planning to use the OtisKnee in scheduled surgeries would exacerbate the negative impact of the FDA letter on the reputation of OtisMed and the device. Chi directed OtisMed employees to organize a mass shipment of all OtisKnee devices that had been manufactured but had not yet been shipped and suggested ways for the employees to hide the shipments from FDA regulators.
At Chi’s direction, OtisMed shipped approximately 218 OtisKnee guides from California to surgeons throughout the United States, including 16 to surgeons in New Jersey, a week after the FDA expressly denied OtisMed’s request for clearance.
“With more than 600,000 knee replacements performed each year, patients rely on FDA to help ensure that the devices are safe and work as intended,” said Director George M. Karavetsos of the FDA’s Office of Criminal Investigations. “When manufacturers ignore FDA requirements, they risk endangering patients’ health and quality of life. We will continue to protect the public health by bringing to justice those who disregard FDA regulations.”
Chi’s sentence marks the culmination of a long-term investigation conducted jointly by the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Antoinette V. Henry, and the Department of Health and Human Services’ Office of Inspector General (HHS-OIG), under the direction of Special Agent in Charge Scott J. Lampert. Counsel to the HHS-OIG and FDA’s Office of Chief Counsel to the FDA also assisted. The National Association of Medicaid Fraud Control Units, along with the Medicaid Fraud Control Unit of the Massachusetts Attorney General’s Office, assisted in coordinating the settlements with the various states.
The government is represented by Chief Jacob T. Elberg of the U.S. Attorney’s Office of the District of New Jersey Health Care and Government Fraud Unit and Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Former Northampton Man Pleads Guilty to Failing to RegisterRead the Press Release
BOSTON – Wade Branch, 63, pleaded guilty today to one count of failing to register as a sex offender in U.S. District Court in Springfield. Branch was indicted in March 2015. Sentencing is scheduled for September 24, 2015.
In 1990, Branch was convicted of indecent assault and in 2000, he was convicted of rape in Hampden County Superior Court. On multiple occasions, he was given written notice of his obligations to register as a sex offender in the state in which he resides due to his convictions. Branch moved from Massachusetts to California, where he failed to register as a sex offender from 2008 to 2015, as he was required to do.
The charging statute provides for a sentence of no greater than 10 years in prison, a lifetime of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Carmen M. Ortiz and U.S. Marshal John Gibbons for the District of Massachusetts made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Former National Guardsman Sentenced to Two Years Probation for Stealing FirearmRead the Press Release
CONCORD, N.H. – A former private in the New Hampshire National Guard and a current resident of Plaistow, New Hampshire, Eric L. Evers, was sentenced to two years’ probation for stealing a firearm from the New Hampshire National Guard Armory in Manchester, announced Acting United States Attorney Donald Feith.
According to documents filed in United States District Court, Evers, 34, joined the National Guard in December 2009. While participating in a quarterly inspection and maintenance of firearms at the National Guard Armory in Manchester on March 9, 2014, Evers concealed a 9mm Berretta pistol in his pants pocket, left the armory, and hid the pistol in his truck. When Evers returned to the armory, a thorough search for the pistol was being conducted by other guardsmen. This caused Evers to leave the armory, remove the pistol from his truck and bury it in a snowbank near an entrance to the armory’s parking lot, where it was found by another guardsman three days later.
The case was investigated by the U.S. Army, Criminal Investigation Division, the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Manchester Police Department and prosecuted by Assistant United States Attorney Bob Kinsella.
Former Member of the United States House of Representatives Charged with Failing to File Federal Income Tax ReturnsRead the Press Release
CHICAGO ― Melvin Reynolds, 63, a former member of the United States House of Representatives, was indicted yesterday on federal charges alleging that he failed to file income tax returns for the years 2009 through 2012.
Reynolds will appear for his arraignment at a date yet to be determined by the U.S. District Court
According to the indictment, Reynolds received gross income in each year in excess of the minimum amount required to file a tax return. As a result, he was required by law, by April 15 of the following year, to file an income tax return (Form 1040 and accompanying attachments). Reynolds willfully failed to file income tax returns for four consecutive years – 2009, 2010, 2011 and 2012.
Each count of failing to file a federal income tax return carries a maximum sentence of one year in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced the indictment with Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigative Division Chicago.
The government is being represented by Assistant U.S. Attorneys Barry Jonas and William E. Ridgway.
Indictment
Former Boaz Housing Authority Comptroller Charged with Theft of HUD FundsRead the Press Release
BIRMINGHAM -- Federal prosecutors on Thursday charged the former comptroller for the Boaz Housing Authority with stealing federal Housing and Urban Development funds, announced U.S. Attorney Joyce White Vance and HUD Special Agent in Charge Nadine E. Gurley.
The one-count information filed in U.S. District Court charges STANLEY J. KNOP, 47, of Crossville, with stealing HUD funds from Aug. 4, 2010, through Oct. 25, 2013, while he was comptroller of the Boaz Housing Authority, which receives HUD funding. The United States seeks forfeiture of $160,618 that has been identified as proceeds of the theft.
“The U.S. Attorney’s Office is dedicated to holding accountable corrupt public employees who steal federal funds entrusted to their oversight," Vance said. "The substantial sum stolen from the Boaz Housing Authority was much needed by that community, but it was deprived of those funds by the acts of a selfish individual. This prosecution can see that those funds are restored to the community,” she said.
“The charges today demonstrate our commitment to combat the theft of HUD funds, especially when the funds involved are earmarked to assist our neediest families," Gurley said. "The United States Department of Housing and Urban Development, Office of Inspector General, will continue to partner with other federal, state and local authorities to ensure that corrupt individuals do not use their positions to enrich themselves at the government’s expense," she said.
Knop could face a maximum penalty of 10 years in prison and a $250,000 fine if convicted of the theft.
HUD-OIG and the FBI investigated the case, which Assistant U.S. Attorney Laura D. Hodge is prosecuting.
The public is reminded that an indictment or information contains only charges. A defendant is presumed innocent unless and until proven guilty.
Former American Samoa Government Official Sentenced to 22 Months in PrisonRead the Press Release
Evelyn Langford 49, of Copperas Cove, Texas, was sentenced today to 22 months in prison and ordered to pay $260,000 in restitution for her convictions for wire fraud and bribery, announced U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division and Special Agent in Charge Paul Delacourt of the FBI’s Honolulu Division.
Langford pleaded guilty on March 20, 2015, to one count of wire fraud and one count of bribery. According to the plea agreement, Langford admitted that in 2012 she was the Director of the Department of Human Resources of the Government of American Samoa (ASG), a territory of the United States located in the South Pacific Ocean. As part of her duties, she was charged with partial oversight of a $24.8 million U.S. Department of Labor (DOL) National Emergency Grant (NEG). The grant was awarded to American Samoa in the wake of a September 2009 tsunami that caused significant damage in American Samoa. Langford admitted that while administering the funds, she accepted payments from a contractor. She then provided that contractor favorable official action.
In February 2012, a company known as the Native Hawaiian Holding Company Inc. (NHHC) entered into a service contract with the ASG. Under this contract, NHHC received approximately $4.7 million of the NEG funds to develop a “contact center” (or call center) industry in American Samoa. The NEG service contract was signed by an NHHC representative, Quin Rudin, and by Langford and other ASG representatives. The contract also contained provisions generally prohibiting employees of the ASG from soliciting or receiving gratuities from NHHC.
Notwithstanding the prohibition from soliciting gratuities, Langford nevertheless requested that Rudin extend her a “loan,” which Rudin agreed to do. Langford received a $10,000 payment from Rudin in April 2012 and a $250,000 payment in May 2012. After receiving the funds, Langford provided favorable official action on behalf of Rudin and NHHC. For example, Langford admitted making arrangements to have NHHC representatives, including Rudin, meet with the Governor of American Samoa for the purpose of “pitching” business ideas to him, including proposals regarding transportation and medical development projects. In addition, Langford concealed the true nature and scope of her dealings with Rudin and NHHC, including by failing to advise other employees of the ASG and employees of the DOL in San Francisco that she had received gifts and payments from NHHC and Rudin and from companies associated with him. Langford, waived indictment and was charged in an information on Jan. 15, 2015. She was charged with wire fraud and bribery concerning programs receiving federal funds in violation.
The individual who made the payments to Langford, Rudin, has been prosecuted separately for a scheme to defraud Cisco Systems Inc., and its subsidiary Cisco Systems Capital Corporation, related to the lease of Cisco equipment. Rudin’s case is pending in the Northern District of California.
The sentence was handed down by District Judge Jon S. Tigar of the Northern District of California, following the guilty plea. Judge Tigar also sentenced the defendant to a three year period of supervised release and ordered her to pay $260,000 in restitution to the ASG. The defendant will begin serving the sentence on Sept. 25, 2015.
The prosecution is the result of a two-year investigation by agents of the FBI’sHonolulu and San Francisco Divisions. The case is being prosecuted by Assistant U.S. Attorneys Kyle F. Waldinger and Hallie Mitchell Hoffman of the Northern District of California, with the assistance of Bridget Kilkenny, Jessica Meegan, Mary Mallory and Allen Williams.
Former American Samoa Government Official Sentenced to 22 Months in PrisonRead the Press Release
SAN FRANCISCO – Evelyn Langford was sentenced today to 22 months in prison and ordered to pay $260,000 in restitution for her convictions for wire fraud and bribery, announced United States Attorney Melinda Haag and Federal Bureau of Investigations Special Agents in Charge David J. Johnson (San Francisco) and Paul Delacourt (Hawaii).
Langford, 49, of Copperas Cove, Texas, pleaded guilty on March 20, 2015, to one count of wire fraud and one count of bribery. According to the plea agreement, Langford admitted that in 2012 she was the Director of the Department of Human Resources of the Government of American Samoa (ASG), a territory of the United States located in the South Pacific Ocean. As part of her duties, she was charged with partial oversight of a $24.8 million U.S. Department of Labor (DOL) National Emergency Grant (NEG). The grant was awarded to American Samoa in the wake of a September 2009 tsunami that caused significant damage in American Samoa. Langford admitted that while administering the funds, she accepted payments from a contractor. She then provided that contractor favorable official action.
In February 2012, a company known as the Native Hawaiian Holding Company, Inc. (NHHC) entered into a service contract with the ASG. Under this contract, NHHC received approximately 4.7 million dollars of the NEG funds to develop a “contact center” (or “call center”) industry in American Samoa. The NEG service contract was signed by an NHHC representative (Quin Rudin) and by Langford and other ASG representatives. The contract also contained provisions generally prohibiting employees of the ASG from soliciting or receiving gratuities from NHHC.
Notwithstanding the prohibition from soliciting gratuities, Langford requested that Rudin extend her a “loan,” which Rudin agreed to do. Langford received a $10,000 payment from Rudin in April 2012 and a $250,000 payment in May 2012. After receiving the funds, Langford provided favorable official action on behalf of Rudin and NHHC. For example, Langford admitted making arrangements to have NHHC representatives, including Rudin, meet with the Governor of American Samoa for the purpose of “pitching” business ideas to him, including proposals regarding transportation and medical development projects. In addition, Langford concealed the true nature and scope of her dealings with Rudin and NHHC. Langford did not advise other employees of the ASG nor employees of the DOL in San Francisco that she had received gifts and payments from NHHC, from Rudin, or from companies associated with Rudin. Langford, waived indictment and was charged in an information on January 15, 2015. She was charged with wire fraud, in violation of 18 U.S.C. § 1343, and bribery concerning programs receiving federal funds, in violation of 18 U.S.C. § 666.
The individual who made the payments to Langford – Quin Rudin – has been prosecuted separately for a scheme to defraud Cisco Systems, Inc. and its subsidiary, Cisco Systems Capital Corporation, related to the lease of Cisco equipment. Rudin’s case is pending in the Northern District of California (case number CR 13-00149 JST).
The sentence was handed down by the Honorable Jon S. Tigar, U.S. District Judge, following the guilty plea. Judge Tigar also sentenced the defendant to a three year period of supervised release and ordered her to pay $260,000 in restitution to the ASG. The defendant will begin serving the sentence on September 25, 2015.
Assistant U.S. Attorneys Kyle F. Waldinger and Hallie Mitchell Hoffman are prosecuting the case with the assistance of Bridget Kilkenny, Jessica Meegan, Mary Mallory, and Allen Williams. The prosecution is the result of a two-year investigation by agents of the Federal Bureau of Investigation located in Honolulu, Hawaii and San Francisco, California.
Folk Nation/Gangster Disciples Gang Member Sentenced to 20 Years in Federal Sex Trafficking ViolationsRead the Press Release
In El Paso this morning, 24-year-old Folk Nation/Gangster Disciples member Emmanual Lockhart was sentenced to 20 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 Lockhart 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 Lockhart and three other gang members--25-year-old Richard Gray, 26-year-old Deion Lockhart and 29–year-old former El Paso County juvenile probation officer Timothy McCullouch, Jr.—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.
Yesterday, Judge Martinez sentenced Richard Gray and Deion Lockhart to life imprisonment and 300 months imprisonment, respectively, for their roles in the sex trafficking scheme. McCullouch is scheduled to be sentenced at 8:30am on Monday, June 29, 2015. McCullouch faces up to life in federal prison.
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 are prosecuting these defendants on behalf of the Government.
Five Waco Area Aryan Brotherhood Members and Associates Sentenced to Federal Prison for Role in Methamphetamine Distribution OperationRead the Press Release
In Waco, a federal district judge sentenced five Aryan Brotherhood (AB) members and associates to federal prison for their roles in a methamphetamine distribution conspiracy announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division, and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division.
During yesterday afternoon’s hearing, United States District Judge Walter S. Smith sentenced:
- Robert Eaton (aka “Compound Rob”), age 40, of Kempner, TX, to 35 years imprisonment followed by five years of supervised release;
- Robert Helms, age 30, of Temple, to 211 months imprisonment followed by five years of supervised release;
- Eric Ganos, age 40, of Temple, to 15 years imprisonment followed by five years of supervised release;
- Kirt Easter, age 49, of Belton, to 10 years imprisonment followed by five years of supervised release; and,
- Sonya Whitenburg, age 23, of Flat, TX, to five years imprisonment followed by five years of supervised release.
In addition to the prison and supervised release terms, Judge Smith ordered each defendant to pay a $1,000 fine.
“These sentences resulted from unprecedented collaboration of federal, state, and local law enforcement targeting a large-scale prison gang involved in violent organized crime over three counties in Central Texas,” said FBI Special Agent in Charge Christopher Combs. “This effort not only exemplifies our commitment to prevent gang violence and criminal activity from poisoning our communities, but it also sends a clear message that we will relentlessly pursue and prosecute the leaders and members of these violent criminal enterprises regardless of where they lay their heads.”
“Operation ‘La Flama Blanca’ has inflicted a debilitating blow to the network of shadow and often violent facilitators of the Aryan Brotherhood of Texas,” said Joseph M. Arabit, Special Agent in Charge of the Drug Enforcement Administration--Houston Field Division. “This operation highlights a deliberate and strategic effort to cut off and shut down the supply of methamphetamine trafficked by the Aryan Brotherhood and the corresponding impact that this horrific drug inflicts on our communities.”
To date, 24 individuals have been sentenced in connection with this investigation. Sentences previously handed down range from 21 months to 188 months in federal prison. Sentencings for eight co-defendants are pending. Vicki Kay Levy, age 52, of Belton, and Wayne Martin Huisinger, age 55, of Belton are set for 1:00pm on July 1, 2015. Henry David Walker (aka “Stalker”), age 52, of Temple; Ronnie Knepler, age 54, of Belton; and Jose Rodriguez, age 25, a resident alien living in Dallas, are scheduled to be sentenced on July 8, 2015. Sylvia O’Neal, age 41, of Temple, is scheduled to be sentenced on August 5, 2015. Amanda Petrie, age 35, of Temple, is set for 1:00pm on August 12, 2015. Colby Warren, age 40, of Gatesville, is scheduled to be sentenced on September 2, 2015.
All of the defendants named above pleaded guilty to one count of conspiracy to possess with intent to distribute methamphetamine. Robert Eaton also pleaded guilty to one count of possession of a firearm during a drug trafficking crime and one count of felon in possession of a firearm. David Henry Walker also pleaded guilty to two counts of felon in possession of a firearm. During this 10-month-long operation, investigators conducted several controlled methamphetamine purchases. To date, authorities have seized approximately nine pounds of “crystal” methamphetamine, 15 firearms, over $9,000 in U.S. Currency and other assets in connection with this investigation.
Derrick Cooper (aka “Red”), age 35, of Temple, and Chris Voerhis (aka “Lurch”), age 50, of Moffat, TX, were also charged by federal grand jury indictment as a result of this investigation. Both remain in federal custody awaiting jury selection and trial scheduled for August 17, 2015, before Judge Smith. Cooper and Voerhis are charged with one count of conspiracy to distribute between 50 grams and 500 grams of methamphetamine and face between five and 40 years imprisonment upon conviction.
This case is the result of a joint investigation conducted by the Federal Bureau of Investigation and the Drug Enforcement Administration together with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Temple Police Department, Texas Department of Public Safety, Texas Department of Criminal Justice-Office of Inspector General, McLennan County Sheriff’s Office, Coryell County Sheriff’s Office, Bell County Sheriff’s Office, Gatesville Police Department, Lampasas Police Department, Killeen Police Department, Austin Police Department and the United States Marshals Service. Assistant United States Attorneys Mark Frazier and Stephanie Smith-Burris are prosecuting this case on behalf of the Government.
First Jamaican Man Extradited to United States in Connection with International Lottery Scheme Sentenced to PrisonRead the Press Release
A Jamaican man was sentenced today in Fort Lauderdale, Florida, after he pleaded guilty to his role in an international lottery scheme against elderly victims in the United States.
Damion Bryan Barrett, 28, was sentenced by U.S. District Court Judge William J. Zloch of the Southern District of Florida to serve 46 months in prison and five years of supervised release. Barrett was also ordered to pay $94,456 in restitution.
Barrett was indicted by a federal grand jury in Fort Lauderdale on Aug. 9, 2012, and was arrested in Jan. 2015 in Jamaica based on the United States’ request that he be extradited to this country. Barrett was extradited to the United States on Feb. 12 and was the first Jamaican to be extradited to the United States based on charges that he committed fraud as part of an international lottery scheme.
On April 10, Barrett pleaded guilty to one count of conspiracy to commit wire fraud. The prosecution is part of the United States’ ongoing crackdown on fraudulent international lottery schemes.
“This sentence sends a very strong message that scammers operating in foreign countries will be held accountable for the laws they break in the United States,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department is committed to bringing these international fraudsters to justice.”
“This case is an excellent example of coordination between domestic and international law enforcement agencies to hold those who facilitate and participate in fraudulent schemes accountable,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “We will continue to foster this cooperation in order to crackdown on international lottery fraud so that members of our community are protected and are not deprived of their hard earned savings.”
As part of his guilty plea, Barrett acknowledged that had the case gone to trial, the United States would have proved beyond a reasonable doubt that from 2008 through 2012, he was a member of a conspiracy in which elderly victims were informed that they had won a large amount of money in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings. Barrett also admitted that the United States would have proved that he knew the claims of lottery winnings were completely fabricated and that he and his co-conspirators kept the victims’ money for their own benefit without paying any lottery winnings. Barrett also admitted that the United States would have proved that in an effort to convince the victims that the lottery winnings were real, the conspirators sent the victims communications discussing their purported lottery winnings, which falsely claimed to be from a genuine sweepstakes company and from federal agencies including the Internal Revenue Service and the Federal Reserve. In fact, these communications were not from a genuine sweepstakes company or from agencies of the United States.
Barrett’s co-defendant, Oneike Barnett, 29, pleaded guilty on Feb. 28, 2014, to conspiracy to commit wire fraud. On April 29, 2014, U.S. District Court Judge Zloch sentenced Barnett to serve 60 months in prison and five years of supervised release, and to pay $94,456 in restitution for his role in this case.
Principal Deputy Assistant Attorney General Mizer and U.S. Attorney Ferrer commended the investigative efforts of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Postal Inspection Service and the U.S. Marshals Service. The case was prosecuted by Trial Attorney Kathryn Drenning of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bertha Mitrani of the Southern District of Florida.
First Jamaican Man Extradited to United States in Connection with International Lottery Scheme Sentenced to PrisonRead the Press Release
A Jamaican man was sentenced today in Fort Lauderdale, Florida, after he pleaded guilty to his role in an international lottery scheme against elderly victims in the United States.
Damion Bryan Barrett, 28, was sentenced by U.S. District Court Judge William J. Zloch of the Southern District of Florida to serve 46 months in prison and five years of supervised release. Barrett was also ordered to pay $94,456 in restitution.
Barrett was indicted by a federal grand jury in Fort Lauderdale on Aug. 9, 2012, and was arrested in Jan. 2015 in Jamaica based on the United States’ request that he be extradited to this country. Barrett was extradited to the United States on Feb. 12 and was the first Jamaican to be extradited to the United States based on charges that he committed fraud as part of an international lottery scheme.
On April 10, Barrett pleaded guilty to one count of conspiracy to commit wire fraud. The prosecution is part of the United States’ ongoing crackdown on fraudulent international lottery schemes.
“This case is an excellent example of coordination between domestic and international law enforcement agencies to hold those who facilitate and participate in fraudulent schemes accountable,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “We will continue to foster this cooperation in order to crackdown on international lottery fraud so that members of our community are protected and are not deprived of their hard earned savings.”
“This sentence sends a very strong message that scammers operating in foreign countries will be held accountable for the laws they break in the United States,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department is committed to bringing these international fraudsters to justice.”
As part of his guilty plea, Barrett acknowledged that had the case gone to trial, the United States would have proved beyond a reasonable doubt that from 2008 through 2012, he was a member of a conspiracy in which elderly victims were informed that they had won a large amount of money in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings. Barrett also admitted that the United States would have proved that he knew the claims of lottery winnings were completely fabricated and that he and his co-conspirators kept the victims’ money for their own benefit without paying any lottery winnings. Barrett also admitted that the United States would have proved that in an effort to convince the victims that the lottery winnings were real, the conspirators sent the victims communications discussing their purported lottery winnings, which falsely claimed to be from a genuine sweepstakes company and from federal agencies including the Internal Revenue Service and the Federal Reserve. In fact, these communications were not from a genuine sweepstakes company or from agencies of the United States.
Barrett’s co-defendant, Oneike Barnett, 29, pleaded guilty on Feb. 28, 2014, to conspiracy to commit wire fraud. On April 29, 2014, U.S. District Court Judge William J. Zloch sentenced Barnett to serve 60 months in prison and five years of supervised release, and to pay $94,456 in restitution for his role in this case.
U.S. Attorney Ferrer and Principal Deputy Assistant Attorney General Mizer commended the investigative efforts of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Postal Inspection Service and the U.S. Marshals Service. The case was prosecuted by Assistant U.S. Attorney Bertha Mitrani of the Southern District of Florida and Trial Attorney Kathryn Drenning of the Civil Division’s Consumer Protection Branch.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Felon from Pojoaque Sentenced to Federal Prison for Unlawfully Possessing AmmunitionRead the Press Release
ALBUQUERQUE – Nicholas Mondragon, 32, of Pojoaque, N.M., was sentenced late yesterday afternoon in federal court in Albuquerque, N.M., to a year and a day in prison for being a felon in possession of ammunition. Mondragon will be on supervised release for three years after completing his prison sentence.
Mondragon pled guilty on July 17, 2014, to a felony information charging him with being a felon in possession of ammunition. In entering the guilty plea, Mondragon admitted that on Feb. 25, 2014, he purchased a box of ammunition in Las Vegas, N.M. Mondragon made the purchase despite knowing that he was prohibited from doing so because he had previously been convicted of multiple felony offenses including disposing of stolen property, aggravated assault against a household member, attempt to commit a felony, theft of a rental property, and theft of government property.
This case was investigated by the Albuquerque office of the FBI and was prosecuted by Assistant U.S. Attorney William J. Pflugrath.
Federal Grand Jury in Fort Wayne Returns a 7 Count IndictmentRead the Press Release
Fort Wayne, Indiana - The United States Attorney's Office announced the return of an indictment charging Kelly Custer, 53, of Fort Wayne, Indiana; William Custer, Jr., 26 of Fort Wayne, Indiana; Ashley Custer, 25, of Fort Wayne, Indiana; and Sidney Custer, 24, of New Haven, Indiana --- with 1 count of conspiracy to commit wire fraud. Kelly Custer was also charged with 3 counts of wire fraud and 3 counts of interstate communications with intent to extort. The government is also seeking forfeiture by way of a money judgment in the amount of approximately $1.5 million as well as forfeiture of real property. .
According to documents filed in this case, on March 19, 2015, individuals reported to law enforcement that they were being extorted by the mafia. The individuals provided information detailing an extortion scheme that started in 2007 when they lived in Fort Wayne and continued as they moved to Florida where they currently reside.
According to the individuals, the extortion began after they were informed by Kelly Custer that the mafia had determined that they owed a debt and that if they did not pay the debt their lives, their friends’, families’ lives or her life would be in jeopardy. The individuals indicated that they initially received all the information concerning the extortion through Kelly Custer, and that she relayed the threats and demands to them personally. After the individuals moved to Florida, however the threats continued from Kelly Custer in the form of texts causing the individuals to believe some messages came from actual mafia members. In February of 2015, the individuals were informed that Kelly Custer had been killed as a result of problems she had with the mafia; however the individuals continued to receive threatening text messages from persons identifying themselves to be mafia members utilizing Kelly Custer’s phone.
The individuals made the demanded payments primarily to Kelly Custer, but also directed payments William Custer, Jr., Ashley Custer, and Sidney Custer on numerous occasions as they were instructed to do in the threatening text messages. The individuals reported that, in response to the threatening text messages, they had paid “the mafia” approximately 1.5 million over the past seven years, and approximately $250,000-$300,000 since moving to Florida. They said that, in response to threats they usually paid between $3,000 and $10,000 at a time, but that on at least one occasion they paid $50,000 after receiving a threatening message indicating that if they did not pay that amount a friend’s daughter would be killed.
This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Nathaniel C. Henson.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Drug Trafficker Sentenced to 15 Years in PrisonRead the Press Release
SAN DIEGO – Drug trafficker Juan Castro-Navarro - who a prosecutor contends used his cell phone to document the kidnapping, torture and murder of a man in retaliation for the theft of 10 pounds of methamphetamine - was sentenced in federal court today to 182 months in prison.
According to court documents, Castro, aka “J,” sent photos of the victim in a series of text messages to fellow traffickers and his girlfriend or wife, at one point telling her during one exchange: “I just want you to know that I love you guys and that I’m only going to kill one more. I have never killed anyone who didn’t deserve it. I’ll see you later.”
Upon receiving the images, the girlfriend replied: “What is this? Are you OK? Thank God. Be careful my love. I love you with all my heart.”
In other text exchanges, Castro and other traffickers bent on revenge for the robbery of the methamphetamine used emoticons to express feelings. According to court records, one individual, identified as Pokemon, texted: “Did you beat him or choke him?” Castro replied: “The second.” Pokemon’s response, “Very well,” and then he used a semi-colon and a parenthesis to denote a winking face.
Castro pleaded guilty on January 13, 2015, to conspiracy to distribute over 40 kilograms of methamphetamine and two kilograms of heroin. In furtherance of the conspiracy, Castro admitted that he managed other codefendants in the distribution of methamphetamine and heroin within California, and from California to Utah, Washington and other parts of the United States. He was sentenced today by U.S. District Judge Gonzalo P. Curiel, who granted the government’s request for a sentencing enhancement because of the evidence of violence found on Castro’s cell phone. At the sentencing hearing, Judge Curiel stated that Castro had become a “monster” based on the violence shown in the case, and deemed the narcotics that Castro trafficked within the United States “poison.”
U.S. authorities did not charge Castro with murder because the U.S. government lacked jurisdiction since it appears the victim was not a U.S. citizen and the crime occurred in Tijuana. However, in order to get the sentencing enhancement, the prosecutor filed, among other things, a supplemental sentencing document – a newspaper article. The article from a Tijuana newspaper said that a dead person wrapped in a blanket, wearing a black sweatshirt and jeans and showing signs of beating on his entire body, was found on January 23, 2014 – the day after Castro sent the text messages. The victim in the text message photos had been wearing the same clothing.
In the spring of 2013, HSI agents began investigating Castro and his distribution network. Their investigation indicated that Castro was a narcotics broker who would pair Mexico-based sources of supply with customers outside California, and facilitate the transportation of narcotics to the customers. To further the investigation, in November 2013 court authorization was received to intercept two telephones used by Castro. During the first 30-day period of interception, agents successfully seized 19 pounds of methamphetamine and over two pounds of heroin from a load car leaving a stash house, located in Ontario, California, used by Castro. Following the seizure, based on interceptions indicating that the stash house was being emptied, a court-authorized search was executed at the stash house and agents seized an additional 41 pounds of methamphetamine, $68,850 and three firearms.
According to court documents, in January 2014, interception continued on one of Castro’s telephones. While intercepting Castro’s telephone, agents learned that Castro and codefendant Oscar Ureta-Cervantes, who has also pleaded guilty to conspiracy to distribute methamphetamine and heroin and awaits sentencing, and another individual known as Marlon coordinated the sale of 10 pounds of methamphetamine. Ureta was to deliver the methamphetamine to an individual known as David in Los Angeles. However, on the morning of January 22, 2014, Ureta was robbed of the 10 pounds of methamphetamine. In retaliation and in order to recover the stolen methamphetamine, a gang member associated with David was kidnapped in Tijuana, Mexico by Marlon and other individuals.
After the kidnapping, Castro joined Marlon. Castro then took photographs of the kidnapped victim with his cell phone and sent them to Ureta, and the girlfriend and others. The first photograph shows an individual with a black eye, tied and taped, sitting in a chair with hands behind his back. The victim is wearing a black sweatshirt and green/gray jeans. After Castro sent the first photograph, he sent a message to Ureta, stating: “I’m so f---ing pissed and these people are doing as I say.” In another conversation, Castro informed Ureta that they were “extracting information” from the victim.
In another conversation, Castro informed Ureta: “I haven’t killed him because he says he is going to bring me 20 pieces” [units of narcotics]. Castro then sent another photograph to Ureta. The photograph shows a person wearing a black and white jacket holding down the victim with one knee on the victim’s back as the person pulls on one end of a baseball bat. The victim is face down on a concrete floor with his pants half off. Another person in a blue plaid shirt is holding the victim’s head down. A third person, wearing black boots, is standing nearby holding a baseball bat.
Half an hour later, Castro sent Ureta another photograph of the victim. The photograph shows the victim, face down and naked from the waist down, with a green plastic bag over his head as one person is stepping on the back of the victim’s head, another is holding the victim’s arms behind his back, and a third is stepping on the victim’s legs. The victim’s buttocks show signs of bruising. Castro then stated that the victim was “gone.” Shortly thereafter, Castro admitted via text message to Pokemon, as noted above, that the victim had been choked. Castro then sent Ureta a final photograph of the victim. The last photograph shows a lifeless body, wrapped in a blanket.
During the torture, Castro also sent his girlfriend the photographs described above and several messages, telling her not to worry because he was working. Castro instructed her to “look at it [the first photograph] and erase it,” and further reminded Eloisa “not to forget to erase” their conversations. Then, in the early morning hours of January 23, 2014, Castro messaged his girlfriend: “Open up, Hun,” showing that Castro had arrived home.
DEFENDANT Juan Castro-Navarro Age: 43 Hometown: Culiacan, Sinaloa, Mexico CHARGESConspiracy to Distribute Methamphetamine and Heroin – Title 21, U.S.C., Sections 841(a)(1) and 846
INVESTIGATING AGENCIES
Maximum penalty: Life imprisonment and a mandatory minimum term of 10 years and $10 million fineDepartment of Homeland Security, Homeland Security Investigations (HSI)
Cranston, Warwick Police Investigation Leads to Federal Drug Trafficking ChargesRead the Press Release
PROVIDENCE, R.I. – Dennis Bernard, 29, of Cranston, arrested by Cranston and Warwick Police on Thursday on federal drug trafficking charges, was ordered to home confinement with GPS monitoring following an initial appearance today in U.S. District Court in Providence, announced United States Attorney Peter F. Neronha, Cranston Police Chief Colonel Michael J. Winquist and Warwick Police Chief Colonel Stephen M. McCartney.
Bernard is charged by way of a federal criminal complaint with one count each of possession with the intent to distribute 28 grams or more of crack cocaine, possession with the intent to distribute heroin, and distribution of crack cocaine.
According to an affidavit in support of a criminal complaint filed with the court, during the month of June, members of the Cranston Police Special Investigations Unit and the Warwick Police Special Operations Group worked collaboratively to investigate Bernard’s alleged drug trafficking activities in Cranston and Warwick. During the investigation, a Warwick undercover detective allegedly made at least four purchases of crack cocaine.
On Thursday, one day after the alleged fourth purchase, law enforcement executed a court authorized search warrant at Bernard’s Cranston residence where they located and seized nearly 45 grams of crack cocaine and nearly 21 grams of heroin stashed inside a backpack found hidden in bedroom closet, and $5,000 in cash found concealed inside a panel in a bathroom. Additionally, law enforcement seized $1,251 in cash and 2.4 grams of crack cocaine located in the kitchen, and various items used in the packaging and distribution of drugs.
Law enforcement also seized a BMW automobile, a Rolex watch and other assorted jewelry which the investigation revealed were allegedly purchased by Bernard with proceeds allegedly derived from the sale of crack cocaine and heroin.
A criminal complaint 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.
The case is being prosecuted by Assistant U.S. Attorneys Pamela E. Chin and Paul F. Daly, Jr.
The Rhode Island DEA Drug Task Force assisted Cranston and Warwick Police in the investigation of this matter.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact:
Jim Martin
(401) 709-5357
Email: [email protected]
on Twitter @USAO_RI
Child Pornography SentenceRead the Press Release
The United States Attorney for the Southern District of Alabama, Kenyen R. Brown, announces that Joshua Hamilton Purvis was sentenced for possession of child pornography in violation of 18 U.S.C. Section 2252A(a)(5)(B). Purvis was sentenced to serve 120 months imprisonment and a life time term of supervised release by Judge Kristi Dubose. A minimum mandatory sentence of 120 months imprisonment is required when the defendant has prior qualifying convictions. He was also required to obtain mental health treatment, forfeit his telephone and pay a $100 Special Assessment.
This case was investigated by the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney's Office for the Southern District of Alabama, AUSA Sean P. Costello.
Child Pornography SentenceRead the Press Release
The United States Attorney for the Southern District of Alabama, Kenyen R. Brown, announces that Joshua Hamilton Purvis was sentenced for possession of child pornography in violation of 18 U.S.C. Section 2252A(a)(5)(B). Purvis was sentenced to serve 120 months imprisonment and a life time term of supervised release by Judge Kristi Dubose. A minimum mandatory sentence of 120 months imprisonment is required when the defendant has prior qualifying convictions. He was also required to obtain mental health treatment, forfeit his telephone and pay a $100 Special Assessment.
This case was investigated by the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney's Office for the Southern District of Alabama, AUSA Sean P. Costello.
Barge Captain Sentenced to Six Months for Fatal 2005 Explosion That Discharged Slurry Oil in Chicago Canal and Marine CompanyOrdered to Pay over $5.3 Million in RestitutionRead the Press Release
CHICAGO — The captain of a petroleum barge that exploded in 2005, resulting in the death of a crew member, was sentenced to six months in federal prison today after being convicted of felony maritime negligence and causing thousands of gallons of oil to pollute the Chicago Sanitary and Ship Canal. The corporate barge owner, convicted of the same offenses, was sentenced to three years of supervised release and make restitution in excess of $5.3 million to the National Pollution Funds Center for the monies it paid out as a result of the spill. The defendants, DENNIS MICHAEL EGAN and EGAN MARINE CORP., were found guilty in June 2014 following a bench trial.
Egan, 36, of Topeka, Ill., and formerly of Lemont, and Egan Marine Corp., of Lemont, were each convicted of one count of negligent manslaughter of a seaman and one count of negligently discharging oil pollution to a navigable waterway. The verdict was delivered in an oral ruling from the bench by U.S. District Judge James Zagel in June 2014. In addition to the prison sentence, Judge Zagel also ordered Dennis Egan to one year of supervised release. Judge Zagel has scheduled a hearing for July 1 to rule on restitution amounts to the family of the victim.
According to the evidence at trial and court records, on Jan. 19, 2005, a fully-loaded Egan Marine Corp. tank barge, known as the EMC-423, being pushed by the tow boat Lisa E, was transporting approximately 600,000 gallons of clarified slurry oil (CSO) from the ExxonMobil Oil Corp. refinery near Joliet to the Ameropan Oil Corp. facility near the canal and California Avenue in Chicago. CSO is a byproduct of petroleum refining that can also be used as fuel, among other uses. Egan Marine Corp. employee Dennis Michael Egan was the pilot of the Lisa E and Captain of the vessels. As captain, Egan was responsible for the actions of his three-man crew and the safe operation of the vessels. About 4:40 p.m., just after clearing the Cicero Avenue Bridge and heading northeast parallel to the I-55 Stevenson Expressway, a large explosion, originating in one of the EMC-423’s four cargo tanks, occurred aboard the barge. As a result, the EMC-423 sank, discharging thousands of gallons of CSO and other oils into the canal. Immediately after the blast, crewman Alexander Oliva, 29, who had been aboard the barge, was determined to be missing. His body was recovered from the canal near Laramie Avenue on Feb. 4, 2005.
Finding both defendants guilty following trial, Judge Zagel ruled that the explosion occurred when the open flame from a propane fueled torch, which Alex Oliva was using to heat the barge’s cargo pump in preparation for offloading, came into contact with ignitable CSO vapors being vented from a storage tank headspace to the deck of the barge within mere inches of the cargo pump. The use of any open flame on a loaded petroleum barge is a violation of Coast Guard regulations and safe industry practice. The barge did have a lawful onboard heating system, but it was disconnected from the cargo pump, thereby requiring the crew to use an alternative means of heating the cargo pump for offloading. Judge Zagel concluded that the defendants were negligent because they knew that the crew occasionally used an open flame to heat the cargo pump but nonetheless permitted the crew to engage in the illegal and unsafe practice. As a result, the defendants were found guilty of negligently causing the death of Alex Oliva and negligently violating the Clean Water Act by discharging thousands of gallons of oil into the Canal, in violation of the Clean Water Act.
The total cleanup and other costs from the spill exceeded $12 million, more than $5.3 million of which was paid by the National Pollution Funds Center from a federal trust fund used to pay the costs of mitigating oil spill incidents, as well as legitimate damage claims of affected third parties. The fund was established by the Oil Pollution Act of 1990 following the Exxon Valdez spill in Alaska.
In imposing sentence, Judge Zagel remarked that when bad things don’t happen for a long period of time, there is a distinct risk that the level of care is lowered and this is the case where the catastrophe occurred.
“This case provides a tragic example of what happens when a vessel captain, and his employer, violate their special duty of care to their crew and the public by disregarding basic safety requirements,” said U.S. Attorney Zachary T. Fardon. “The ultimate tragedy of their crimes is that Alex Oliva would not have lost his life if the defendants valued basic safety higher than expediency.”
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Neal R. Marzloff, Special Agent-in-Charge of the U.S. Coast Guard Investigative Service, Central Region in Cleveland; and Justin Oesterreich, Acting Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division in Chicago.
The government was represented by Assistant U.S. Attorneys Timothy Chapman and Matthew Hiller and Special Assistant U.S. Attorney Crissy Pellegrin, of the U.S. EPA’s Office of Regional Counsel for Region 5 in Chicago.
Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Obergefell v. HodgesRead the Press Release
Attorney General Loretta E. Lynch released the following statement today after the Supreme Court ruling in Obergefell v. Hodges:
“Today, the Supreme Court of the United States has recognized the equality, dignity and essential humanity of our gay and lesbian brothers and sisters and reaffirmed this country’s bedrock principle – engraved over the entrance to the Court itself – that all Americans are entitled to equal justice under law. By putting an end to an era of state-sanctioned discrimination, the decision lights the way to a future of acceptance, inclusion and opportunity for gay and lesbian Americans and their families. It encapsulates a nation’s enormous leap of understanding – rooted in compassion, tolerance and empathy – and reflects the countless hearts touched and minds opened along the way. It vindicates an idea whose time has come at last.
Today’s result would not have been possible without the passionate advocacy and innumerable acts of personal bravery of generations of leaders, who have fought for the simple freedom to pursue their own happiness with those whom they love. Their fight, galvanized by the Stonewall riots nearly a half-century ago, was waged in the face of pervasive bigotry and widespread resistance and its progress was never guaranteed. But after too many lifetimes of isolation, humiliation and harassment – and steeled by unimaginable courage and indomitable conviction – gay and lesbian citizens across the country bravely came out into the open and awakened the conscience of a nation. Their courage has led us to this day; to a decision from the nation’s highest court declaring them to have full and equal rights to marry in the country they fought to change; and to a victory that they have justly and finally won.
I have no illusions that Obergefell v. Hodges spells the end of anti-gay prejudice. Difficult legal issues lie ahead and the protections written into law are not all they should be. That’s why this march must go on and why this cause will endure, until all Americans – regardless of sexual orientation – are afforded the equal rights, equal treatment and equal opportunity they deserve. But on a day like today – a day that marks a watershed moment in the progress of this movement, in the story of this community and in the history of this nation – it is proper that we pause and take stock of just how far we have come. The Justice Department is proud to have been a part of this journey, from Attorney General Eric Holder’s unwavering leadership in advancing the cause of equality to the groundbreaking progress we have witnessed today. Going forward, we are committed to standing on the side of equality – and standing with the LGBT community – to keep up the fight for safety, opportunity, dignity and justice for all.”
Arizona Man Pleads Guilty to Federal Wire Fraud Charges in New MexicoRead the Press Release
ALBUQUERQUE – Joseph Lawler, 54, of Peoria, Ariz., entered a guilty plea in federal court in Albuquerque, N.M., to a 12-count superseding indictment charging him with wire fraud offenses. The guilty plea, which was entered without the benefit of a plea agreement, was announced by U.S. Attorney Damon P. Martinez and Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division.
Lawler pled guilty to all 12 counts of a superseding indictment that was filed on June 9, 2015, and alleged that between Aug. 2010 and July 2014, Lawler engaged in an illegal scheme to defraud investors of hundreds of thousands of dollars. Lawler executed the scheme by causing others to create a company, Projaris Management, LLC (Projaris), that purported to provide investment services. He also caused others to open four accounts for Projaris at a bank in Farmington, N.M., and one account at a bank in Phoenix, Ariz. Although the bank accounts were not in Lawler’s name and he was not an authorized signer, Lawler exercised sole control over the bank accounts.
The superseding indictment alleged that Lawler used Projaris and the bank accounts to execute a scheme to defraud investors in Projaris by making false representations to obtain investment funds which he used for other purposes. Lawler falsely represented to investors that their funds would be invested in gold, silver, real estate, or real estate investment trust funds. Instead, Lawler used investors’ funds to pay other Projaris investors who threatened to report him to law enforcement authorities. Lawler also used investors’ funds to pay for his living expenses and vehicles.
The superseding indictment includes forfeiture allegations which assert that Lawler derived at least $288,889.50 as a result of his criminal conduct and which require that Lawler forfeit money or assets in that amount.
A sentencing, Lawler faces a statutory maximum penalty of 20 years in prison on each of the 12 wire fraud charges in the superseding indictment. A sentencing date has not been set.
This case was investigated by the Albuquerque office of the FBI and is being prosecuted by Assistant U.S. Attorney Tara C. Neda.