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Monday 22 June 2015
Second Oklahoma City Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that JONATHAN MIRANDA, age 19, of Oklahoma City, Oklahoma, pled guilty to Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration. The defendant was indicted in April, 2015.
The Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendant, did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered a presentence report to be completed. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Shannon Henson represented the United States.
Rochester Restauranteur Sentenced for Tax EvasionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Konstantinos Votsis, 64, of Rochester, NY, who was convicted of tax evasion, was sentenced to six months home confinement by Chief U.S. District Judge Frank P. Gerace. The defendant was also ordered to complete 100 hours of community service at the Open Door Mission. Votsis must also pay restitution of approximately $308,000 and forfeit $250,000.Assistant U.S. Attorney John J. Field, who handled the matter, stated that Votsis owned and controlled Rookies Neighborhood Sports Bar, a restaurant and bar in Gates, NY In 2009, the defendant learned of a pending audit of his sales taxes, and in response, directed that sales data contained in Rookies’ point-of-sale computer system be deleted. This data, which was later recovered by the Government, showed that Votsis failed to report $986,660 in income from his Rookies business from 2006 through 2008. By concealing such income, the defendant evaded paying $308,062 in taxes that he owed to the Internal Revenue Service.
The sentencing is the culmination of an investigation by Special Agents of the Internal Revenue Service-Criminal Investigation, under the direction of Shantelle P. Kitchen, Special Agent in Charge.
Ritchie County woman convicted of health care fraudRead the Press Release
CLARKSBURG, WEST VIRGINIA – Sherri J. Slaven, 50, of Ellenboro, West Virginia, was convicted of health care fraud today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Slaven operated a home health care business and she engaged in a scheme to defraud the West Virginia Offices of the Insurance Commission Workers’ Compensation Old Fund by repeatedly submitting claims for various health care services that she never performed. She received fraudulent compensation in excess of $100,000 for services that were not provided.
Slaven pled guilty today to one count of "Health Care Fraud." She faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
"Health care fraud wastes taxpayer money and drives up health care costs," said Ihlenfeld. "The U.S. Attorney’s Office is now taking more of a data-driven approach to investigating and prosecuting this type of crime by obtaining and analyzing billing data in real-time. This allows us to speed up our investigations and stop these schemes sooner, thereby protecting the programs that help the sick and the injured."
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The West Virginia Office of the Insurance Commission Office of Inspector General – Fraud Investigations Unit let the inquiry.
U.S. Magistrate Judge John S. Kaull presided.
RICO Conspiracy Charged in Payday Lending CaseRead the Press Release
PHILADELPHIA - Adrian Rubin, 58, of Jenkintown, PA, has been charged with participation in a racketeering conspiracy for the operation of a “payday lending” business that allegedly violated the usury laws of Pennsylvania and other states, announced United States Attorney Zane David Memeger. Rubin is charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), one count of conspiracy to commit mail fraud and wire fraud, and two counts of mail fraud and aiding and abetting mail fraud. It was investigated by the FBI, the United States Postal Inspection Service, and IRS Criminal Investigations.
According to the information unsealed today, between 1998 and 2012, Rubin owned, controlled, financed, and/or worked for multiple businesses that issued short-term loans, commonly known as “payday loans.” Rubin allegedly conspired with other people to evade state usury laws and other restrictions on payday loans by engaging in a series of deceptive business practices that included: (a) paying a federally-insured bank, which was not subject to state laws, to pretend that it was the payday lender; (b) relocating his operations to a state considered “usury friendly;” and (c) paying an Indian tribe to pretend that it was the actual payday lender as part of a scheme to have the tribe claim that “sovereign immunity” prevent application of state usury laws and other regulations.
Rubin and his co-conspirators also allegedly went to great lengths to hide Rubin’s personal involvement in the payday lending business because he had a criminal record. It is further alleged that Rubin, with the knowledge of his co-conspirators, incorporated his payday businesses in the names of his father-in-law and a family friend and then forged the signatures of those people on company documents. In total, it is alleged that Rubin and his co-conspirators reaped tens of millions of dollars from the defendant’s payday lending activities, much of which stemmed from the collection of fees that were usurious in Pennsylvania and elsewhere.
Pennsylvania law makes it a crime to collect interest, fees, and other charges associated with a loan at a rate in excess of 36 percent per year. Payday loans are short-term loans of relatively small amounts of money, usually a few hundred dollars, which borrowers promise to repay out of their next paycheck or regular income payment, such as a social security check. Some loans have finance charges or fees of between 10 and 30 percent of the amount borrowed. Given the short-term nature of these loans, those charges can translate to annual percentage rates of interest (“APR”s) of 260 to 780 percent.
Rubin also was charged with helping his two sons with their own multi-million-dollar telemarketing scam that duped more than 70,000 people into buying a credit card http:/www.justice.gov/usao-edpa/pr/trio-charged-selling-worthless-credit-cards. The Platinum Trust card was falsely marketed as a general-purpose credit card that customers could use to buy merchandise over the Internet and improve their credit. Blake and Chase Rubin pleaded guilty and are awaiting sentencing.
If convicted of all charges, Adrian Rubin faces a possible advisory sentencing guideline range of at least 10 years in prison with a statutory maximum sentence of 65 years in prison, three years of supervised release, a fine of up to $1 million, and a $400 special assessment.
The case is being prosecuted by Assistant United States Attorneys Mark B. Dubnoff and Joel M. Sweet.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Professional Hockey Player Pleads Guilty for Role in Gambling RingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Nathan Paetsch, 28, of Spencerport, NY, pleaded guilty before U.S. District Judge Frank P. Geraci, Jr. to transmission of wagering information and structuring transactions to evade reporting requirements. The charges carry a maximum penalty of seven years in prison, a fine of $750,000 or both.Under the terms of the plea agreement, Paetsch will be sentenced to probation, eight months home confinement, and. 400 hours of community service. The defendant will also forfeit $265,000 to include $22,725 in lieu of a 2011 BMW X5, $76,941 in lieu of his interest in his residence at 25 King Fisher Drive, Spencerport, and $67,197 in lieu of his interest in a residence at 218 Palmetto Dunes Circle, Naples, Florida.
Assistant U.S. Attorney Robert A. Marangola, who is handling the case, stated that Paetsch’s conviction is related to his involvement in an illegal gambling business with Joseph Ruff, 32, his brother Mark Ruff, 40, both of Connecticut and Paul Borrelli, 66, of Rochester. The gambling operation involved sports betting through multiple offshore internet gambling websites.
Specifically, Paetsch used wire communication facilities, including cellular telephones, to transmit in interstate and foreign commerce, bets, wagers and information which assisted in the placing of bets and wagers with the illegal internet gambling business on sporting events and contests. The defendant’s involvement included transmitting information over cellular telephones to assist professional hockey players and others he recruited to place bets. Paetsch’s transmissions entitled him to receive money or credit as a result of bets and wagers. The information transmitted by the defendant crossed state lines as well as the international boundary of the United States. The information provided by Paetsch included usernames and passwords to accounts for bettors to place internet wagers, odds on sporting events, credit limits and balances of bettors, making arrangements for the collection of cash payments from bettors in Canada, New York, New Jersey, Pennsylvania, and Florida, and bank account information to conceal payments for gambling debts owed from wagers placed with the illegal gambling business.
With respect to the structuring charges, on multiple occasions between January 2010 and June 24, 2014, Paetsch withdrew and deposited transactions from accounts at financial institutions, including but not limited to First Niagara Bank, in amounts less than $10,000. The defendant was aware that as a domestic financial institution, banks are obligated by law to report transactions in excess of $10,000. At the time that he made the transfers, Paetsch intended to evade the reporting requirements because he knew the funds involved proceeds of the illegal internet gambling business.
Mark Ruff and joseph Ruff were convicted and sentenced to nine years and 41 months in prison respectively. Paul Borrelli was also convicted and is awaiting sentencing on September 8, 2015 at 3:00 pm before Judge Geraci.
The plea is the culmination of an investigation conducted by the Organized Crime Drug Enforcement Task Force, which includes the Federal Bureau of Investigation, Internal Revenue Service, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, Rochester Police Department, under the direction of Chief Michael Ciminelli, Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, Greece Police Department, under the direction of Chief Patrick Phelan, the Webster Police Department, under the direction of Acting Chief Joseph Rieger, and Monroe County District Attorney’s Office, under the direction of District Attorney Sandra Doorley.
Sentencing for Paetsch is scheduled for August 31, 2015 at 4:00 pm before Judge Geraci.
Port Orange Man Pleads Guilty to Scheme to Defraud Oil Spill Compensation FundRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Robert Lee Craddock (54, Port Orange) pleaded guilty today to wire fraud arising out of a scheme to defraud the compensation fund established as a result of the Deepwater Horizon oil spill in 2010. He faces a maximum penalty of 20 years in federal prison. As part of the plea agreement, Craddock will forfeit the proceeds of the charged criminal conduct as a money judgment in the amount of $117,700. A sentencing date has not yet been set.
According to the plea agreement, following the April 2010 explosion of the Deepwater Horizon oil rig (which was being leased by BP, formerly known as British Petroleum), Craddock submitted a claim to BP and the Gulf Coast Claims Facility (“GCCF”), an independent facility established by BP to compensate qualified claimants for lost earnings purportedly related to the impact of the oil spill on his businesses. As part of the scheme, Craddock crafted fictitious invoices to support the amount of lost earnings that he claimed. The fraudulent scheme resulted in BP and GCCF transmitting $117,700 to Craddock.
This case was investigated by the United States Secret Service. It is being prosecuted by Assistant United States Attorney Embry J. Kidd.
Pilger Man Sentenced for Bankruptcy FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that Jeffrey L. Eckert, age 55, of Pilger, Nebraska, was sentenced for his conviction for making a false oath in a bankruptcy proceeding. Chief United States District Court Judge Laurie Smith Camp sentenced Eckert to 5 years of probation and ordered him to pay restitution in the amount of $50,142.66. Eckert was also ordered to perform 100 hours of community service during the first two years of his term of probation.
Eckert filed a Chapter 13 bankruptcy petition in the District of Nebraska, but his case was later converted to a Chapter 7. At the time of the initial Chapter 13 bankruptcy filing, Wells Fargo Bank was a creditor which was fully secured by assets owned by Eckert. However, after the case was converted to a Chapter 7 bankruptcy, Wells Fargo Bank learned that some of its collateral had been sold or otherwise disposed of by Eckert. When he was questioned under oath at the first meeting of creditors in the Chapter 7 bankruptcy case, Eckert made false statements about the manner in which he disposed of the bank’s collateral.
This case was investigated by the U.S. Secret Service.
Peter Foy Pleads Guilty to Bankruptcy FraudRead the Press Release
The United States Attorney for the District of Vermont announced that Peter Foy, 61, of Alburg, pleaded guilty today in United States District Court in Burlington to a charge that he concealed assets in his bankruptcy case. U.S. District Judge William K. Sessions III released Foy on conditions pending sentencing, which is set for October 13.
On June 9, 2015, the United States filed a one-count information charging Foy with bankruptcy fraud. According to the charging document, in November 2014, Foy filed a chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Vermont. The petition sought to discharge all of Foy's unsecured debts. In his petition and accompanying schedules, which Foy swore were complete and accurate, Foy was required to disclose all his assets and liabilities, including any real estate he owned. Foy did disclose the home he owned in Vermont, but not a second house he owned in Quebec, Canada. Foy had acquired sole title to that five-bedroom lakefront property in 2007. Before filing for bankruptcy, Foy had listed the Quebec house for sale at a price of nearly $340,000 (Canadian). Foy also failed to disclose to the Bankruptcy Court that the Canadian property had reportedly generated rental income of $22,500 in 2013 and $20,300 in 2014.
Foy faces up to five years of imprisonment and a fine of up to $250,000. His actual sentence will be determined with reference to federal sentencing guidelines.
This case was investigated by the Federal Bureau of Investigation.
Foy is represented by Norman Blais. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Omaha Man Sentenced to 15 years in Prison for Conspiring to Distribute Methamphetamine while in Possession of a FirearmRead the Press Release
United States Attorney Deborah R. Gilg announced that Thomas Perez, 32, of Omaha, Nebraska, was sentenced on June 22, 2015, to 15 years in prison by United States District Judge Laurie Smith Camp. Perez had previously pled guilty to Conspiracy to Distribute more than 50 grams of Methamphetamine and Possessing a Firearm in Relation to a Drug Trafficking Crime. Perez was arrested and indicted on the charges after Omaha police officers twice executed search warrants on the same South Omaha residence in April of 2014. In total, officers seized more than three ounces of methamphetamine, three handguns, over $4,000 in currency, and drug paraphernalia.
Because Perez possessed more than 50 grams of actual methamphetamine along with a firearm, he faced a mandatory minimum sentence of 15 years. After serving his sentence Perez will be required to serve a Term of Supervised Release of 5years.
This case was the result of an investigation by the Omaha Police Department and Sarpy County Sheriff’s Office.
Oklahoma City Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that GILBERT ESPINOZA a/k/a "Snow", age 32, of Oklahoma City, Oklahoma, pled guilty to Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration. The defendant was indicted in April, 2015.
The Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendant, did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered a presentence report to be completed. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Shannon Henson represented the United States.
Ohio, West Virginia residents charged with deriving unlawful profits from federal grantsRead the Press Release
WHEELING, WEST VIRGINIA – A federal grand jury has returned an indictment charging Michael J. Marshall, 64, Brandt Stover, 61, Stephen M. Powell, 52, all of Steubenville, Ohio, and Nicole P. Northcraft, 42, of New Cumberland, West Virginia, with manipulating business development programs facilitated by the United States Small Business Administration to derive unlawful profits of approximately twenty-four million dollars, United States Attorney William J. Ihlenfeld, II, announced.The defendants operated various businesses participating in Small Business Administration programs and are alleged to have submitted false eligibility statements and allowed unauthorized individuals to exercise control over the businesses. In total, the defendants are alleged to have fraudulently sought and received federal agency contracts in excess of one hundred and forty million dollars.
The defendants are each charged with:
• One count of “Conspiracy to Defraud the United States,” for which they each face up to five years in prison and a fine of up to $250,000,
• One count of “Attempt and Conspiracy to Commit Wire Fraud.” For which they each face up to 20 years in prison and a fine of up to $250,000, and
• Three counts of “Wire Fraud.” They each face up to 20 years in prison and a fine of up to $250,000 on each count.Stover is additionally charged with:
• Two counts of “Conspiracy to Defraud the Government with Respect to Claims.” He faces up to 10 years in prison and a fine of up to $250,000 on each count,
• Four counts of “Willfully Causing the Submission of False, Fictitious and Fraudulent Claims.” He faces up to five years in prison and a fine of up to $250,000 on each count, and
• One count “Tampering with a Witness,” for which he faces up to 20 years in prison and a fine of up to $250,000.Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
According to Ihlenfeld, the Small Business Administration operates programs to assist socially or economically disadvantaged business operators and disabled veterans in competing for government contracts. The businesses must be unconditionally owned and controlled by the qualifying individuals in order to comply with federal law.
"This indictment alleges that the defendants conspired to exploit the Small Business Administration's 8(a) program regulations to defraud the Department of Defense (DoD) and other federal agencies," said Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Northeast Field Office. "Through these schemes, the defendants allegedly took U.S. taxpayer dollars from the 8(a) contracts intended to support the U.S. military. These acts erode public confidence and deny opportunities for honest contractors. The American taxpayer expects the DoD Office of the Inspector General and DCIS to champion fiscal accountability and acquisition integrity. DCIS, along with our law enforcement partners, continues to shield America's investment in national defense and to vigorously investigate procurement fraud allegations."
“Our office will continue to pursue justice against those who commit fraud to gain access to SBA’s preferential contracting programs,” said Small Business Administration Inspector General Peggy E. Gustafson. “The defendants’ actions deprived legitimate disadvantaged companies of federal contracting opportunities. I want to thank the U.S. Attorney’s office for its dedication and leadership throughout the investigation.”
Assistant U.S. Attorneys Robert H. McWilliams and Andrew Cogar are prosecuting the case on behalf of the government. The United States Small Business Administration, the Department of Defense Inspector General, the Department of Veterans Affairs, the Department of Labor, and the Federal Bureau of Investigation are leading the inquiry.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Office of Juvenile Justice and Delinquency Prevention’s Internet Crimes Against Children Task Forces Arrest More Than 1,000 Child Predators in Operation Broken HeartRead the Press Release
Internet Crimes Against Children (ICAC) Task Forces arrested 1,140 child predators from 41 states during a two-month, nationwide operation, the Office of Juvenile Justice and Delinquency Prevention (OJJDP) announced today.
The 61 ICAC Task Forces, funded through an OJJDP grant program, conducted Operation Broken Heart, a coordinated investigative operation to intensify efforts to identify and arrest child sexual predators during the months of April and May 2015.
“Predators use technology in sinister and inventive ways to reach their child victims across state and national boundaries,” said Administrator Robert L. Listenbee of the OJJDP. “Through collaborative efforts such as Operation Broken Heart, ICAC Task Forces and their law enforcement partners are countering these attacks by pooling resources and investigative expertise, increasing their ability to identify and arrest sexual predators and protect children.”
More than 3,000 federal, state and local law enforcement agencies participated in the operation, which targeted offenders who: possess, manufacture and distribute child pornography; engage in online enticement of children for sexual purposes; engage in the commercial sexual exploitation or prostitution of children; and engage in child sex tourism – traveling abroad for the purpose of sexually abusing children in other countries. ICAC Task Forces first conducted Operation Broken Heart in 2014. The task forces also delivered more than 2,200 presentations on Internet safety to more than 186,000 youth and adults during these two months.
“By arresting and prosecuting child predators across the country, our task forces are sending a clear message that we are working together better than ever before to bring these perpetrators to justice,” said Lt. Andrea Grossman of the Los Angeles Police Department, Commander of the Los Angeles Regional ICAC Task Force and chair of the ICAC Public Awareness and Outreach Committee. “The ICAC Task Forces’ dedicated efforts and professionalism help fulfill the ultimate goal of keeping children safe.”
In 1998, OJJDP launched the ICAC Task Force Program to help federal, state and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communication systems or computer technology to exploit children. To date, the ICAC Task Forces have reviewed more than 516,000 complaints of child exploitation, which resulted in the arrest of more than 54,000 individuals. In addition, since the ICAC program's inception, more than 465,000 law enforcement officers, prosecutors and other professionals have been trained on techniques to investigate and prosecute ICAC related cases.
For more information on local cases, the list of ICAC Task Force Commanders is available at: www.icactaskforce.org.
OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance, the Bureau of Justice Statistics, the National Institute of Justice, OJJDP, the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at www.ojp.gov.
North Miami Beach Resident Sentenced to 4 Years in Prison for Committing State Income Tax Fraud Using Stolen IdentitiesRead the Press Release
A North Miami Beach resident was sentenced to 48 months in prison, followed by three years of supervised release, and was ordered to pay restitution of $110,325, for his involvement in a conspiracy to commit state income tax fraud using stolen identities.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations Miami Office (DOL-OIG), Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), J. Scott Dennis, Chief, North Miami Beach Police Department (NMBPD), and the Ohio Department of Taxation – Criminal Investigations Division, made the announcement.
Earnest Thad Etienne, 29, previously pled guilty to one count of conspiracy to use unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court records, on September 26, 2014, law enforcement executed a state search warrant at Etienne’s residence pursuant to another investigation. During the search, law enforcement officers discovered fifteen prepaid debit cards embossed with various individuals’ names, a thumb drive, ammunition, and $7,750 in cash in Etienne’s bedroom. In another room in the residence, law enforcement discovered additional electronic devices and a bank debit card embossed with the name of an individual who did not appear to live in the residence. Several firearms and additional ammunition were found in the backyard of the home.
Subsequent investigation by federal law enforcement revealed that the thumb drive discovered in Etienne’s room contained the personal identifying information (PII) – including names, dates of birth, and social security numbers – of many individuals with addresses in Ohio. In addition, Etienne used at least one of the debit cards found in his residence to withdraw money associated with fraudulent state of Ohio income tax refunds.
Court documents further state that between January 14, 2014, and September 26, 2014, Etienne and his co-conspirators caused fraudulent income tax returns to be filed in the State of Ohio seeking tax refunds in amounts ranging between $7,543 and $11,515. The conspirators caused the State of Ohio to pay the fraudulent tax refunds to pre-paid debit cards in other individuals’ names or to a bank account in one of the co-conspirator’s names. On several occasions, Etienne withdrew money from the bank account in his co-conspirator’s name that contained fraudulent income tax refunds from the State of Ohio.
Co-defendant Wilbert Champagne, 20, of North Miami Beach, was charged with conspiracy to use unauthorized access devices, use of unauthorized access devices, and aggravated identity theft. Champagne is a fugitive.
Mr. Ferrer commended the investigative efforts of the DOL-OIG, IRS-CI, ICE-HSI, NMBPD and the Ohio Department of Taxation – Criminal Investigations Division. The case is being prosecuted by Assistant U.S. Attorney Jamie R. Galvin.
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.
North Carolina Man Charged with Attempting to Provide Material Support to ISIL and Weapon OffensesRead the Press Release
A Burke County, North Carolina, man has been charged with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division.
The criminal complaint was filed today in federal court, charging Justin Nojan Sullivan, 19, of Morganton, North Carolina, with one count of attempting to provide material support to ISIL, one count of transporting and receiving a silencer in interstate commerce with intent to commit a felony, and one count of receipt and possession of an unregistered silencer, unidentified by a serial number. Sullivan was arrested in his home on Friday, June 19, 2015, without incident.
“As alleged in the complaint, the defendant was planning assassinations and violent attacks in the United States and is charged with attempting to provide material support to ISIL and federal firearms violations,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Sullivan is charged with attempting to provide material support to ISIL, a designated terrorist organization that poses a serious threat to our country’s security,” said Acting U.S. Attorney Rose. “My highest priority is to detect and prosecute violent extremists and protect innocent Americans from terrorist attacks.”
“Justin Sullivan intended to commit violent acts against innocent people in the U.S. to support the terrorist organization, ISIL,” said Special Agent in Charge Strong. “As demonstrated in this case federal, state, and local law enforcement will work tirelessly to protect our communities from those who plot to carry out terrorist activities of any kind.”
The criminal complaint alleges that the FBI became aware of Sullivan’s plans to obtain a semi-automatic AR-15 rifle at the Hickory Gun Show in Hickory, North Carolina, on June 20, 2015, which he planned to use to kill a large number of U.S. citizens on behalf of ISIL. According to the criminal complaint, an FBI undercover employee (UC) made contact with Sullivan beginning on or about June 6, 2015, during which time Sullivan described himself as “a mujahid,” and as a Muslim convert living in the eastern United States. Sullivan also told the UC that “the war is here,” and gave the UC the opportunity to join what he called the Islamic State of North America, whose “doctrine is Guerilla Warfare in and out,” the complaint alleges. The criminal complaint further alleges that over the next few days and during various conversations, Sullivan discussed with the UC, among other things, his various terrorist attack concepts and instructed the UC on how to obtain weapons, specifically “an AR-15 .223 with split ammo” at a gun show.
According to the complaint, on or about June 9, 2015, Sullivan discussed with the UC the possibility of making homemade silencers and asked the UC whether he would be able to make one. When the UC said that he thought he could, Sullivan told the UC “Ill need to have one built by next week.” The complaint alleges that Sullivan also told the UC “Yeah ill let u mail me…I plan on using it this mont[h],” and that Sullivan planned on doing “minor assassinations before the big attack for training.” He also told that UC that “we are going to send a video to IS.” According to the complaint, during a follow-up conversation, Sullivan told the UC again that he would need the suppressor “before the end of next week,” apparently referring to June 19, 2015.
On June 19, 2015, the FBI, with the support of the Hickory, North Carolina, Police Department, the Burke County, North Carolina, Sheriff’s Office and the North Carolina State Highway Patrol, arrested Sullivan at his home and located the silencer at his residence, which Sullivan had received earlier that day. No one was harmed during the arrest.
Sullivan is currently in federal custody. Sullivan is expected to make his initial appearance in federal court today.
The charge of conspiracy to provide material support to a designated foreign organization carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The charge of transporting and receiving a silencer in interstate commerce with intent to commit a felony carries a maximum potential penalty of 10 years in prison and a fine of $250,000. The charge of receipt and possession of an unregistered silencer, unidentified by a serial number, carries a maximum potential penalty of 10 years in prison and a fine of $10,000.
The charges contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory Gonzalez of the National Security Division’s Counterterrorism section.
Sullivan Complaint
North Carolina Man Charged with Attempting to Provide Material Support to ISIL and Weapons OffensesRead the Press Release
CHARLOTTE, N.C. – A Burke County, North Carolina, man has been charged with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division.
The criminal complaint was filed today in federal court, charging Justin Nojan Sullivan, 19, of Morganton, North Carolina, with one count of attempting to provide material support to ISIL, one count of transporting and receiving a silencer in interstate commerce with intent to commit a felony, and one count of receipt and possession of an unregistered silencer, unidentified by a serial number. Sullivan was arrested in his home on Friday, June 19, 2015, without incident.
“As alleged in the complaint, the defendant was planning assassinations and violent attacks in the United States and is charged with attempting to provide material support to ISIL and federal firearms violations,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Sullivan is charged with attempting to provide material support to ISIL, a designated terrorist organization that poses a serious threat to our country’s security,” said Acting U.S. Attorney Rose. “My highest priority is to detect and prosecute violent extremists and protect innocent Americans from terrorist attacks.”
“Justin Sullivan intended to commit violent acts against innocent people in the U.S. to support the terrorist organization, ISIL,” said Special Agent in Charge Strong. “As demonstrated in this case federal, state, and local law enforcement will work tirelessly to protect our communities from those who plot to carry out terrorist activities of any kind.”
The criminal complaint alleges that the FBI became aware of Sullivan’s plans to obtain a semi-automatic AR-15 rifle at the Hickory Gun Show in Hickory, North Carolina, on June 20, 2015, which he planned to use to kill a large number of U.S. citizens on behalf of ISIL. According to the criminal complaint, an FBI undercover employee (UC) made contact with Sullivan beginning on or about June 6, 2015, during which time Sullivan described himself as “a mujahid,” and as a Muslim convert living in the eastern United States. Sullivan also told the UC that “the war is here,” and gave the UC the opportunity to join what he called the Islamic State of North America, whose “doctrine is Guerilla Warfare in and out,” the complaint alleges. The criminal complaint further alleges that over the next few days and during various conversations, Sullivan discussed with the UC, among other things, his various terrorist attack concepts and instructed the UC on how to obtain weapons, specifically “an AR-15 .223 with split ammo” at a gun show.
According to the complaint, on or about June 9, 2015, Sullivan discussed with the UC the possibility of making homemade silencers and asked the UC whether he would be able to make one. When the UC said that he thought he could, Sullivan told the UC “Ill need to have one built by next week.” The complaint alleges that Sullivan also told the UC “Yeah ill let u mail me…I plan on using it this mont[h],” and that Sullivan planned on doing “minor assassinations before the big attack for training.” He also told that UC that “we are going to send a video to IS.” According to the complaint, during a follow-up conversation, Sullivan told the UC again that he would need the suppressor “before the end of next week,” apparently referring to June 19, 2015.
On June 19, 2015, the FBI, with the support of the Hickory, North Carolina, Police Department, the Burke County, North Carolina, Sheriff’s Office and the North Carolina State Highway Patrol, arrested Sullivan at his home and located the silencer at his residence, which Sullivan had received earlier that day. No one was harmed during the arrest.
Sullivan is currently in federal custody. Sullivan is expected to make his initial appearance in federal court today.
The charge of conspiracy to provide material support to a designated foreign organization carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The charge of transporting and receiving a silencer in interstate commerce with intent to commit a felony carries a maximum potential penalty of 10 years in prison and a fine of $250,000. The charge of receipt and possession of an unregistered silencer, unidentified by a serial number, carries a maximum potential penalty of 10 years in prison and a fine of $10,000.
The charges contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI. In making today’s announcement, Acting U.S. Attorney Rose also thanked the Charlotte Division of the U.S. Postal Inspection Service for their invaluable assistance. Rose also thanked the North Carolina State Highway Patrol, the Burke County Sheriff’s Office, and the Hickory Police Department and for their help with the investigation.
The case is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory Gonzalez of the National Security Division’s Counterterrorism section.
Niagara Falls Man Charged with Being A Felon in Possession of A Firearm and AmmunitionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a one-count indictment charging Ralik Hamilton, 40, of Niagara Falls, NY, with being a felon in possession of a firearm and ammunition. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.Assistant U.S. Attorney Mary Catherin Baumgarten, who is handling the case, stated that according to the indictment, on April 10, 2015, New York State Parole and other law enforcement officers conducted a search of the defendant’s residence on 4th Street in Niagara Falls. During the search, they recovered a 9 mm pistol and several rounds of ammunition. Having been previously been convicted of a felony, Hamilton is prohibited from legally possessing a firearm.
The defendant was arraigned today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. A detention hearing is scheduled for June 26, 2015 at 2:00 p.m.
The indictment is the result of/culmination of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto, and the New York State Division of Parole, under the direction of Acting Commissioner Anthony Annucci.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Niagara Falls Man Charged with Being A Felon in Possession of A Firearm and AmmunitionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a one-count indictment charging Ralik Hamilton, 40, of Niagara Falls, NY, with being a felon in possession of a firearm and ammunition. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.Assistant U.S. Attorney Mary Catherin Baumgarten, who is handling the case, stated that according to the indictment, on April 10, 2015, New York State Parole and other law enforcement officers conducted a search of the defendant’s residence on 4th Street in Niagara Falls. During the search, they recovered a 9 mm pistol and several rounds of ammunition. Having been previously been convicted of a felony, Hamilton is prohibited from legally possessing a firearm.
The defendant was arraigned today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. A detention hearing is scheduled for June 26, 2015 at 2:00 p.m.
The indictment is the result of/culmination of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto, and the New York State Division of Parole, under the direction of Acting Commissioner Anthony Annucci.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Newton Woman Sentenced to Prison on Drug ChargesRead the Press Release
Jackson, Miss - Angelia Fortenberry, 36, of Newton, was sentenced today by U.S. District Judge Daniel P. Jordan III to 46 months in federal prison followed by three years of supervised release for conspiracy to possess with intent to distribute methamphetamine, announced U.S. Attorney Gregory K. Davis and DEA Special Agent in Charge Keith Brown.
Fortenberry was indicted 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 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.
This case was prosecuted by Assistant U.S. Attorney Erin Chalk.
New Kensington Man Pleads Guilty to Drug ChargeRead the Press Release
PITTSBURGH - A resident of New Kensington, Pa., pleaded guilty in federal court to a charge of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
Tremayne Carr, 38, pleaded guilty to one count before Senior United States District Judge Gustave Diamond.
In connection with the guilty plea, the court was advised that on February 6, 2014, Carr attempted to possess with intent to distribute a quantity of cocaine.
Judge Diamond scheduled sentencing for October 21, 2015 at 10 a.m. The law provides for a maximum total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court ordered that Carr be held in home detention.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Drug Enforcement Administration and the Pennsylvania State Police conducted the investigation that led to the prosecution of Carr.
New Haven Man Admits Illegal Gun PossessionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SHAWN HILL, 31, of New Haven, pleaded guilty today in Hartford federal court to one count of possession of a firearm by a convicted felon. The jury in the case had been picked and HILL’s trial was scheduled to begin this morning.
According to court documents and statements made in court, on December 12, 2012, ATF agents and New Haven Police officers executed a search warrant at a residence on Norton Street in New Haven where HILL had been residing. As New Haven SWAT team members forced entry into the second floor apartment, HILL discarded a fully-loaded Sig Sauer, P229, .40 caliber pistol through a window in a bedroom where a 9-year-old child was sleeping. The pistol was quickly recovered by law enforcement and HILL was arrested.
The firearm had been reported as stolen from Wilmington, North Carolina.
HILL’s criminal history includes several felony convictions. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
HILL is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on September 14, 2015, at which time he faces a maximum term of imprisonment of 10 years and a fine of up to $250,000.
HILL has been detained since his arrest.
This matter has been investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney John H. Durham.
Navajo Man Pleads Guilty to Federal Involuntary Manslaughter and Assault ChargesRead the Press Release
ALBUQUERQUE – Joshua Rakestraw, 24, an enrolled member of the Navajo Nation who resides in Farmington, N.M., pled guilty on Friday in federal court in Albuquerque, N.M., to involuntary manslaughter and assault charges. Under the terms of his plea agreement, Rakestraw will be sentenced to 48 months in prison followed by up to three years of supervised release.
Rakestraw was arrested on Nov. 3, 2014, on a criminal complaint charging him with killing a Navajo woman and assaulting a Navajo man, causing him to suffer serious bodily injury, on Oct. 28, 2014. The complaint alleged that Rakestraw committed these crimes while under the influence of alcohol in Indian Country in San Juan County, N.M. According to court filings, Rakestraw killed one victim and seriously injured the other victim by running over them with his vehicle at Morgan Lake, south of Kirtland, N.M. At the time, Rakestraw was under the influence of alcohol.
During his change of plea hearing, Rakestraw pled guilty to a felony information charging him with involuntary manslaughter and assault resulting in serious bodily injury. In entering the guilty plea, Rakestraw admitted that on Oct. 28, 2014, at Morgan Lake he drove his truck forward, striking both victims as he drove his truck over them. One of the victims died and the other victim suffered several injuries including a dislocated hip and a broken rib.
Rakestraw has been in federal custody since his arrest and remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Shammara Henderson is prosecuting the case.
Mississippi Man Pleads Guilty to Obstructing Black Bear InvestigationRead the Press Release
Jackson, Miss – Travis Butler, 28, of Meridian, pleaded guilty today to violating the Endangered Species Act and to obstructing the federal investigation into the killing of a Louisiana Black Bear in Lauderdale County, Mississippi, announced U.S. Attorney Gregory K. Davis. The Louisiana Black Blear is a protected species under the Endangered Species Act.
On January 4, 2014, Butler arranged for David Lucas Wimberly, a taxidermist in Quitman, Mississippi, to mount a Louisiana Black Bear illegally killed in the Whynot Community of Lauderdale County. Butler then transported the Bear to Wimberly’s Taxidermy in Quitman, Mississippi. Some 32 days later when federal and state wildlife officers began their investigation into the killing, Butler caused the taxidermist to conceal the Black Bear’s hide from a federal investigator.
David Lucas Wimberly and Chester Brad Williams each previously pleaded guilty to an Endangered Species Act violation involving the same Louisiana Black Bear. They will be sentenced on June 30, 2015, by U.S. District Judge Henry T. Wingate and face a maximum penalty of up to one year in prison.
Butler will be sentenced on September 3, 2015, by U.S. District Judge Henry T. Wingate. He faces a maximum penalty of up to one year in prison under the Endangered Species Act and faces a maximum penalty of up to 20 years in prison for obstructing the investigation. As a result of his guilty plea today to the obstruction charge, Butler can no longer possess a firearm.
The investigation in this case was conducted by the United States Fish and Wildlife Service and the Mississippi Department of Wildlife, Fisheries and Parks. Deputy Criminal Division Chief Darren LaMarca is prosecuting the case.
McCreary County Couple Sentenced to Prison for Defrauding Social Security and Kentucky Medicaid Out of Hundreds of Thousands of DollarsRead the Press Release
LONDON — A McCreary County couple, who defrauded the Social Security Administration and Kentucky Medicaid out of hundreds of thousands of dollars, has been sentenced in federal court.
On Thursday, June 18, U.S. District Judge Gregory F. Van Tatenhove sentenced Oliver Taylor, 59, to 33 months in prison, for theft of government property, health care fraud, and defrauding the Social Security Administration (SSA). Oliver’s wife at the time of the offenses, Lisa Taylor, 51, was sentenced to 18 months in prison, for social security fraud. Both defendants have been ordered to pay full restitution to the SSA. Under federal law, they will have to serve at least 85 percent of their prison sentences.
According to court documents, in 1993, Oliver Taylor began receiving Social Security benefit payments on behalf of his elderly mother. Starting in 1995, following his mother’s death, and continuing until 2014, Oliver Taylor repeatedly failed to report his mother’s death to the SSA, in order to continue receiving her benefit payments for his own personal use. Specifically, Oliver made false statements to the SSA and signed his deceased mother’s name on eligibility forms to indicate she was still alive.
For approximately seven years, Lisa Taylor assisted in the fraud scheme, by signing SSA reports for Oliver and by pretending to be Oliver’s mother during a phone conversation with the SSA.
Because Oliver illegally converted his mother’s benefits to his own use, he was ineligible for his own SSA benefits. Additionally, he fraudulently failed to report the money he collected from his mother’s benefits as income to the SSA and Kentucky Department for Medicaid Services.
As a result of their scheme, the Taylors fraudulently obtained a total of $487,798.98 from the SSA and the Kentucky Department for Medicaid Services.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Margaret Moore-Jackson, Special Agent in Charge, Social Security Administration, Office of Inspector General, Atlanta Field Division, jointly made the announcement.
The investigation was conducted by the Social Security Administration, Office of the Inspector General, Office of Investigations. Assistant U.S. Attorney Adam C. Reeves prosecuted the case.
Martinsburg man convicted of selling cocaine near local schoolRead the Press Release
MARTINSBURG, WEST VIRGINIA – Gary Vincent Whorley, 32, of Martinsburg, was convicted today of selling cocaine near an elementary school, United States Attorney William J. Ihlenfeld, II, announced.
Whorley, also known as “Tyrone,” sold crack cocaine within 1,000 feet of an elementary school located in Jefferson County, West Virginia. He pled guilty today to one count of “Aiding and Abetting the Distribution of Cocaine Base within 1,000 Feet of a School.” He faces between one and forty years in prison and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Paul Camilletti prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Manhattan U.S. Attorney Announces Return to Brazil of Two Masterpieces Linked to Bank FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Deputy Special Agent in Charge Michael Shea of U.S. Immigration and Customs Enforcement’s ("ICE") Homeland Security Investigations New England, announced today that a painting by Jean-Michel Basquiat called "Hannibal" (the "Basquiat"), as well as a Roman Togatus statue, were returned to Brazil at a repatriation ceremony at the United States Attorney’s Office in Manhattan, New York. The painting and the statue were smuggled into the United States in violation of customs law and were forfeited to the government as a result of civil forfeiture action brought by the United States.
Manhattan U.S. Attorney Preet Bharara stated: "Art and antiquities have special value and meaning that cannot readily be quantified. As a result, they have long been the subject of theft and deception, as well as a means to launder illicit proceeds. Art should serve to inspire the mind and nourish the soul, and not be allowed to become a conduit for crime."
HSI Deputy Special Agent in Charge Michael Shea stated: "It is always a pleasure to return cultural artifacts to the people of another nation. I would like to thank our special agents and partners at INTERPOL for their diligence in this investigation. ICE will do everything in its power to help preserve and safeguard a nation's history by identifying, locating, and recovering stolen antiquities."
In related repatriation ceremonies held on September 21, 2010, and May 9, 2014, the U.S. Attorney’s Office for the Southern District of New York returned to Brazil three paintings – "Modern Painting with Yellow Interweave" by Roy Lichtenstein (the "Lichtenstein"), "Figures dans une structure" by Joaquin Torres-Garcia (the "Torres-Garcia"), and "Composition abstraite" by Serge Poliakoff (the "Poliakoff") – that were smuggled into the United States.
The Basquiat and the Togatus once belonged to Brazilian banker Edemar Cid Ferreira. Ferreira, the founder and former president of Banco Santos, S.A. ("Banco Santos"), was convicted in Brazil of crimes against the national financial system and money laundering. In December 2006, Ferreira was sentenced in Brazil to 21 years in prison.
As part of the case, a Sao Paulo Court judge also ordered the search, seizure, and confiscation of assets that Ferreira, his associates, and members of his family had acquired with unlawfully obtained funds from Banco Santos. Those assets included the Basquiat, the Togatus, the Lichtenstein, the Torres-Garcia, the Poliakoff, and other artwork valued at $20 million to $30 million. The artwork was kept in several locations, including Ferreira’s home in the Morumbi neighborhood of Sao Paulo, the main offices of Banco Santos, and at a holding facility. When Brazilian authorities searched these locations, they found that several of the most valuable works of art were missing, including the Basquiat and the Togatus.
The Sao Paulo Court sought INTERPOL’s assistance after searching museums and institutions in Brazil for the missing artwork. In October and November 2007, INTERPOL and the Government of Brazil sought the assistance of the United States to locate and seize the missing works on behalf of the Brazilian government. The ensuing Southern District of New York and HSI investigation revealed that the Basquiat and the Togatus were shipped from the Netherlands to a secure storage facility in New York on August 21, 2007, and September 11, 2007, respectively. The invoices, however, failed to comply with U.S. customs laws in a number of respects. For example, the shipping invoices did not identify the pieces and falsely claimed that their value was $100 each. In fact, the Basquiat alone was recently appraised at $8 million.
HSI special agents based in New Haven, Connecticut, located and seized the Basquiat in November 2007, and the U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture Complaint alleging that the Basquiat had been brought into the United States illegally. Since the filing of the original Complaint in February 2008, the United States seized additional works of art and filed two amended Complaints seeking the forfeiture of the Lichtenstein, the Torres-Garcia, the Poliakoff, and the Togatus.
After extensive litigation, United States District Court Judge Richard J. Sullivan granted the government’s motion for summary judgment and entered an order forfeiting the Basquiat and the Togatus on May 10, 2013. The Second Circuit Court of Appeals affirmed Judge Sullivan’s order on September 9, 2014.
* * *
Mr. Bharara praised the investigative work of HSI in helping to locate and seize the painting. He was grateful for the assistance of the Department of Justice’s Office of International Affairs. Mr. Bharara thanked Brazilian authorities for their assistance in the case. He also acknowledged the assistance of the U.S. Department of State and the U.S. Embassy in Brazil for its assistance in the investigation.
The case is being handled by the Money Laundering and Asset Forfeiture Unit of the U.S. Attorney’s Office. Assistant U.S. Attorney Alexander Wilson is in charge of the litigation.
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Man to Serve 22 Months in Federal Prison for Failing to File Federal Income Tax ReturnsRead the Press Release
DALLAS — A local man who admitted willfully failing to file income tax returns for tax years 2010 and 2011 has been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Anthony Rolfe was sentenced last week to serve a total of 22 months in federal prison and ordered to pay $100,490 in restitution to the Internal Revenue Service (IRS). He pleaded guilty in March 2015 to an Information charging two counts of failure to file. He has been in custody since his arrest in November 2014.
According to the factual resume filed in the case, Rolfe was employed by Dr. LeeRoy McCurley at a pain management clinic in Dallas, known as Mid-City Medical Clinic. As part of his job, Rolfe picked up the clinic’s earnings and delivered them to McCurley, in person or through McCurley’s office in Grand Prairie, Texas. Rolfe also delivered office supplies to and distributed fliers for the clinic. For these tasks, according to the factual resume and criminal complaint filed in the case, McCurley paid Rolfe thousands of dollars per week in checks that Rolfe deposited into an account at JPMorgan Chase Bank in the name of Platinum A&C Group, LLC, an entity for which Rolfe was a managing partner. Bank records showed that Rolfe deposited more than $500,000 in payments from McCurley in 2010 and 2011 and used the majority of the money on clothing and jewelry, hotel and resort stays, nightclub tabs, and yacht rentals.
IRS Criminal Investigation investigated the case. Assistant U.S. Attorney John de la Garza prosecuted.
Man Stopped for Talking on Cellphone Sentenced to 10 Years in PrisonRead the Press Release
FRESNO, Calif. — Mario Farias Pineda, 23, was sentenced today by United States District Judge Lawrence J. O’Neill to 10 years in prison for possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Pineda was driving northbound on California State Highway 99 when he was pulled over by Fresno County Sheriff’s deputies for talking on his cellphone. The deputies obtained permission to search his vehicle and found approximately 25 pounds of methamphetamine in a hidden compartment behind the rear passenger seat.
This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration and the Fresno County Sheriff’s Office. Assistant United States Attorney Michael Frye prosecuted the case.
Local Man Sentenced for Running $8.7 Million Ponzi SchemeRead the Press Release
CINCINNATI – John R. Bullar, 53, of Cincinnati, Ohio, was sentenced to 100 months in prison, three years of supervised release, was ordered to forfeit $535,408.68, and was ordered to pay approximately $6.2 million in restitution to the victims for committing wire fraud and money laundering relative to a fraudulent investment scheme that he ran for 10 years. Bullar previously pleaded guilty to the aforementioned charges on September 23, 2014.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Ohio Attorney General Mike DeWine, Commissioner Andrea Seidt, Ohio Department of Commerce, Division of Securities and Joseph T. Deters, Hamilton County Prosecuting Attorney announced the sentence handed down today by U.S. District Judge Michael R. Barrett.
According to court documents, between 2003 and September 2013 Bullar devised a scheme to defraud investors by soliciting millions of dollars under false pretenses, failing to invest investors' funds as promised, and misappropriating and converting investors' funds for his own benefit without the knowledge or authorization of the investors.
Bullar was the sole owner and operator of Executive Management Advisors, LLC ("EMA"), which had its principal place of business in Cincinnati, Ohio. Bullar also was the sole owner and operator of Priapus Group, LLC. Since at least 1998, Bullar offered investment opportunities to investors through his company, EMA. Bullar marketed himself as someone experienced in the financial services industry and who was successful in investing in commodity futures.
In an effort to persuade individuals to invest with him, Bullar frequently made numerous false representations. For example, Bullar told potential clients that he never had a losing quarter. Bullar also offered potential investors a false sense of security by telling potential investors that he, himself, was the biggest investor in EMA. Bullar told the investors that he would manage their funds even though it was below his minimum level of investment.
The majority of Bullar’s investors were friends, family members and fellow church members. Bullar told his clients that he had invested their money in precious metals, gold, silver, bonds, and foreign currency and that he made money based on the volatility of the market, regardless of whether the market was up or down. Bullar told clients that he preferred to keep the number of his investor’s small, so that he could "fly under the radar." Bullar also told clients that he had a computerized algorithm system that monitored the market for patterns and alerted him to potential losses. Bullar told investors that although he had been offered millions of dollars for the system he would not sell it, because he could make more money using the system rather than selling it. These representations were false, however, because in reality, Bullar had invested only a small amount of the money that he received from clients, using the vast majority of the money to pay other investors and his own personal expenses.
To induce current clients to keep investing, Bullar provided investors with quarterly statements purporting to show their account balances. These statements often showed substantial gains over a short period of time.
Although Bullar collected over $8.7 million from investors between mid-2006 and September 2013, only $580,500.00 was sent to brokers for trading. The remaining $8.1 million was never invested at all. The small fraction of investor money that Bullar actually sent to brokers for trading failed to generate profits and the money was either lost via trading or later withdrawn by Bullar.
In addition, investors actually paid taxes on the fictitious earnings. Bullar caused Forms 1099 to be issued to investors for tax purposes, which reported the fictitious gains. Investors relied on these documents to file their tax returns and investors paid taxes on the fictitious gains reported to them.
Bullar furthered his scheme by creating an appearance of legitimacy. Bullar created an investment blog for his clients (www.emafutures.com), which he updated regularly, sharing various articles and reports about the market. Bullar outfitted his home office, which investors frequented, with a television and three computer monitors to give investors the impression that he was constantly monitoring the market. Bullar’s expansive 5 bedroom/5 bathroom home also gave investors the impression that he was a successful trading advisor. In addition, Bullar also purchased an adjoining lot with investor money and used investor money to remodel the cabin on the lot, install a swimming pool and outdoor kitchen, and pay for professional landscaping on the lot. Bullar also entertained groups of investors at his home, treating investors to lavish dinners and paying for some investors to vacation with him.
In addition, Bullar used investor money to pay for the mortgage on his home, vacations, country club dues, boats, jet skis, sports tickets, and vehicles, among other things.
“Today's sentencing demonstrates how federal law enforcement, along with our State and Local law enforcement partners, band together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain. IRS Criminal investigators will continue to use their financial expertise to identify and trace laundered funds in these types of investor fraud schemes,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Stewart commended the investigation by the IRS-Criminal Investigation and Ohio Bureau of Criminal Investigation, the coordination of the Hamilton County Prosecutor’s Office, as well as Assistant United States Attorney Emily N. Glatfelter, who represented the United States in this case. U.S. Attorney Stewart also thanked the U.S. Commodity Futures Trading Commission, which has filed civil charges in a separate action.
Husband and Wife Plead Guilty to Tax FraudRead the Press Release
PITTSBURGH- Two individuals pleaded guilty in federal court to a charge of conspiracy to defraud the United States in the computation and collection of individual and corporate income taxes, United States Attorney David J. Hickton announced today.
Paul Schneider and Lynda Schneider, husband and wife, pleaded guilty to one count each before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that the Schneiders failed to file individual or corporate income taxes for themselves and their business, Cedar Direct, a company which designs and promotes the manufacture of log homes between 2006 and 2009. The defendants evaded the payments of taxes by using their corporate business checking account to pay personal expenses, by failing to maintain assets in their own names, and by failing to report or pay individual or corporate income taxes.
Judge Fischer scheduled sentencing for October 28, 2015. The law provides for a total sentence of 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the Schneiders on bond.
Assistant United States Attorney Margaret E. Picking is prosecuting this case on behalf of the government.
The Internal Revenue Service-Criminal Investigations conducted the investigation that led to the prosecution of Paul and Lynda Schneider.
Hugo Company Pays $20,000 for Disturbing Vegetation in Minnesota Valley National Wildlife RefugeRead the Press Release
United States Attorney Andrew M. Luger today announced that LAMETTI & SONS, INC. agreed to pay a $10,000 fine and an additional $10,000 in restitution to the non-profit group Refuge Friends, Inc., to resolve allegations in a criminal petty offense citation charging it with one count of disturbing plants during the summer of 2014 in the Minnesota Valley National Wildlife Refuge in Bloomington, Minn.
According to the citation and documents filed in court, LAMETTI was awarded a contract by the Metropolitan Council Environmental Services Burnsville Interceptor Improvements Project for a multi-year construction project to reline sewer pipes on the Minnesota Valley National Wildlife Refuge in Bloomington. A Special Use Permit with specific limitations was incorporated into the construction plans to protect nearby areas of threatened and special-concern plants within the Refuge, which were delineated with signs that read, “Protected Native plants in this area do not enter or disturb.”
According to the violation notice and other court documents, on July 17, 2014, a concerned citizen reported to local wildlife agencies that a large amount of dead vegetation, which potentially included threatened prairie plants such as tobacco root and the small white lady’s-slipper, had been discovered within the Refuge.
On July 18, 2014, U.S. Fish and Wildlife Service (USFWS) agents and a Metropolitan Council representative investigated the area in which dead vegetation was reported. USFWS agents also noted an additional location of standing water containing dead wildlife directly adjacent to one of the construction sites, which emitted a strong chemical odor. About one week later, a USFWS agent observed that the standing water adjacent to the construction site had dissipated and left approximately 6,229 square feet of dead vegetation.
In a memo dated July 24, 2014, a LAMETTI project manager responded to the Metropolitan Council’s inquiries and stated that up to an estimated 24,000 gallons of heated cure water were released at two separate project construction sites within the Refuge due to a problem with the installation process of the liners on the sewer pipes on two separate dates. The heated cure water release was unauthorized and went unreported prior to the investigation. According to the Special Conditions of the Special Use Permit, the permit holder was required to report all damage to lands within 24 hours of the incident.
“A large portion of the Minnesota Valley National Wildlife Refuge is urban and provides valuable habitat for a wide range of plants and wildlife,” said U.S. Fish and Wildlife Service, Refuge Law Enforcement Officer Scott Pariseau. “Another benefit to our urban refuge is the unique opportunity we provide for the community to enjoy and appreciate wildlife-related recreation close to home. It’s unfortunate that despite all of the planning and permitting to mitigate resource damage from this project, damages to important habitat occurred. We are however pleased to see that the contractor was held responsible for the damage they caused to this public resource.”
The citation issued is the result of an investigation conducted by the U.S. Fish and Wildlife Service.
This case was prosecuted by Assistant U.S. Attorney Benjamin Bejar.
Defendant Information:
LAMETTI & SONS, INC.
Hugo, Minn.
Charges:
- Disturbing plants on National Wildlife Refuge, 1 count
Settlement:
- $10,000 fine
- $10,000 restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Houston Man Heads to Federal Prison for Defrauding Senior CitizensRead the Press Release
HOUSTON – Raymond Goffney, 38, has been ordered to federal prison for his convictions of conspiring to commit wire fraud and aggravated identity theft, announced U.S. Attorney Kenneth Magidson. Goffney pleaded guilty Jan. 26, 2015.
Today, U.S. District Judge Lynn Hughes handed Goffney a sentence of 69 months in federal prison. He was ordered to serve 33 months for the conspiracy in addition to 24 months for the identity theft which must be served consecutively. He was further sentenced to an additional 12 months for violating the terms of his supervised release for a prior federal charge in 2006 involving the possession and distribution of cocaine. In total, Goffney will serve 69 months in federal prison to be immediately followed by five years of supervised release.
Between Jan. 1, 2013, and Nov. 30, 2013, Goffney engaged in a wire fraud conspiracy to unlawfully obtain cash and defraud Compass Bank, a Federal Deposit Insurance Corporation - insured institution. Goffney and others unlawfully obtained, shared and busted out multiple cards for cash and shared the proceeds with each other. Goffney and his co-conspirators stole the identities of approximately 75 individuals, the vast majority of whom were senior citizens. These identities were then taken to apply for fraudulent credit cards with Compass Bank. Goffney used both legitimate and fake businesses, under his sole ownership and control, to run the fraudulent credit transactions.
Goffney and others stole a total of approximately $1.1 million during the conspiracy.
He was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation by U.S. Secret Service and the U.S. Postal Inspection Service. Assistant U.S. Attorney Julie Searle prosecuted the case.
Holdenville Man Pleads Guilty to Communicating A Bomb Threat to Hughes County CourthouseRead the Press Release
The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CALEB TRENT HODGINS, age 20, of Holdenville, Oklahoma, pled guilty to an Information charging him with USE OF TELEPHONE TO COMMUNICATE BOMB THREAT, in violation of Title 18, United States Code, Sections 844(e) and 2.
The charge arose from an investigation by the Federal Bureau of Investigation and the Hughes County Sheriff’s Department.
The Information alleged that on or about May 21, 2014, in the Eastern District of Oklahoma, the defendant, through use of a telephone, maliciously conveyed false information knowing the same to be false concerning an attempt and alleged attempt being made to unlawfully damage and destroy a building, to-wit: the Hughes County Courthouse in Holdenville, Oklahoma, by means of an explosive, in and affecting interstate commerce.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the defendant’s guilty plea, and ordered the completion of a presentence report. Sentencing will be scheduled upon its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is up to 10 years imprisonment, a fine of up to $250,000.00 or both.
Assistant United States Attorney Chris Wilson represented the United States.
Fort Smith Chiropractor Pleads Guilty to Federal Tax CrimeRead the Press Release
An Arkansas chiropractor pleaded guilty today in the U.S. District Court in the Western District of Arkansas to corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), announced U.S. Attorney Conner Eldridge of the Western District of Arkansas and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. He was previously convicted of federal tax crimes and sentenced to prison.
According to court documents, Philip Roberts, 60, of Fort Smith, Arkansas, filed a series of false and fraudulent documents with the IRS in an effort to obstruct or impede the due administration of the internal revenue laws, including filing false financial instruments that claimed millions of dollars of transactions with both the Secretary of the Treasury and the IRS Commissioner, and filing IRS forms that falsely reported payments. In 2000, after a jury trial, Roberts was convicted of two counts of willfully failing to file federal income tax returns and sentenced to serve 16 months in federal prison.
Roberts’ sentencing hearing has not been scheduled yet before the Honorable U.S. District Judge Timothy L. Brooks of the Western District of Arkansas. Roberts faces a statutory maximum sentence of three years in prison, one year of supervised release and a $250,000 fine for obstructing and impeding the IRS.
U.S. Attorney Eldridge and Acting Assistant Attorney General Ciraolo commended special agents of the IRS and the Treasury Inspector General for Tax Administration, who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division and Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas, who are prosecuting the case.
Former Tribal Councilor of the Seneca Nation of Indians and Vice Chairman of the Board of Directors of the Seneca Gaming Corporation Pleads Guilty to Lying to the FbiRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.—The United States Attorney’s Office announced today that Bergal L. Mitchell, III, 41, of Gowanda, NY, pleaded guilty to lying to Special Agents of the Federal Bureau of Investigation before U.S District Judge Richard J. Arcara. The charge carries a maximum penalty of five years in prison and a $250,000 fine.Assistant U.S. Attorneys Anthony M. Bruce and James P. Kennedy, Jr., who are handling the case, stated that the defendant, who was formerly a tribal councilor of the Seneca Nation of Indians (SNI) and who was, in 2006, Vice Chairman of the Board of Directors of the Seneca Gaming Corporation (SGC), stole for himself $338,000 out of the $2.1 million that the SNI and its subsidiaries paid in order to purchase 251 acres of farmland in Lewiston, NY. That land now serves as the site for the Seneca Hickory Stick Golf Course.
On September 10, 2008, Mitchell was interviewed by FBI agents who were investigating the land purchase. During the interview, the defendant attempted to cover up his theft of the $338,000 by falsely telling the agents that he had no knowledge of a $248,000 wire transfer to an account belonging to his late half-brother. Mitchell also lied about securing a $125,000 cashier’s check from these proceeds which he used to purchase a home for his parents and personally delivered to the sellers of the house. In addition, the defendant lied about using $23,000 of these proceeds to make a loan to friend.
Timothy Toohey, who was convicted of unlawfully receiving an additional $202,000 of the proceeds from the land deal, was sentenced to 33 months in prison.
The plea was the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation. The New York Stated Police, Internal Revenue Service and Niagara County District Attorney’s Office also assisted in the investigation.
Sentencing is scheduled for October 7, 2015 at 1:00 p.m. before Judge Arcara.
Former Treasurer Sentenced to Nearly Three Years in Prison for Embezzling over $419,000 from Fraternal Order of PoliceRead the Press Release
TULSA, Okla.–The former Treasurer of the Fraternal Order of Police Oklahoma State Lodge and the Tulsa Fraternal Order of Police was sentenced today to serve 33 months in federal prison for embezzling over $419,000 from Lodge bank accounts, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma. In addition to the prison sentence, U.S. District Court Chief Judge Gregory K. Frizzell ordered Lorna Jean Vanlandingham to pay restitution in the amount of $291,127.59, three years of supervised release, and a $15,000 fine.
On February 11, 2015, Vanlandingham, of Tulsa, was charged with two-counts of wire fraud. At a plea hearing on March 25, Vanlandingham admitted that from April 6, 2010 to March 11, 2014, she embezzled from the Fraternal Order of Police Oklahoma. Additionally, from January 23, 2013 to April 23, 2014, she admitted to embezzling from the Fraternal Order of Police Tulsa Lodge #93. The loss to the Oklahoma State Lodge was $66,778.53 and the loss to the Tulsa Lodge #93 was $352,313.31.
“Instead of acting in good faith, she abused her position of trust by writing fraudulent checks and making unauthorized transfers which resulted in the loss of over $419,000 from Lodge bank accounts,” said U.S. Attorney Williams. “Throughout the case, my office was committed to seeking justice and to holding the defendant accountable for her misconduct and wrongdoing. All crimes, especially those committed against the law enforcement community, will be investigated and prosecuted to the fullest extent of the law.”
The case was handled by the Federal Bureau of Investigation and Assistant U.S. Attorney Jeffrey A. Gallant prosecuted the case.
Former Rhode Island House Speaker & Providence Licensing Board Vice-Chairman Gordon Fox to Plead Guilty in Federal Court to Wire Fraud, Bribery and Tax EvasionRead the Press Release
PROVIDENCE, R.I. – Former Rhode Island House Speaker Gordon D. Fox, 53, of East Providence, has waived federal indictment and is expected to plead guilty in federal court to a three-count Information charging him with wire fraud, bribery and filing a false tax return. The charges stem from former Speaker Fox’s theft of $108,000 donated by campaign supporters to pay for personal expenses; his acceptance of a $52,000 bribe to advocate and move for issuance of a liquor license for an East Side restaurant while serving as Vice-Chairman of the City of Providence Board of Licenses in 2008; and his failure to account for these illegal sources of income on his tax returns.
An 18-month federal grand jury investigation led by prosecutors from the United States Attorney’s Office and the Rhode Island Attorney General’s Office, the FBI, IRS and Rhode Island State Police, included the execution of court authorized search warrants at the former speaker’s home and State House office in March of 2014; the issuance of more than 200 subpoenas; the examination of more than 36,000 bank, government, personal and campaign records belonging to former Speaker Fox; and forensic examinations of several computers and other electronic devices.
United States Attorney Peter F. Neronha, Rhode Island Attorney General Peter F. Kilmartin, FBI Special Agent in Charge Vincent B. Lisi, IRS Criminal Investigation Special Agent in Charge William P. Offord, and Rhode Island State Police Superintendent Colonel Steven G. O’Donnell today announced the conclusion of the investigation and the filing of the Information, together with a Plea Agreement which, if accepted by the District Court, will result in Former Speaker Fox being sentenced to three years in federal prison.
United States Attorney Peter F. Neronha commented, “When the search warrants in this case were executed nearly a year ago, there was talk about the State House being ‘the People’s House.’ I agree completely. The People’s House should be occupied by elected officials who hold office to serve the people, not themselves. As federal and state prosecutors, and federal and state law enforcement officials, we represent the people of the United States and the people of Rhode Island. And we will go anywhere – anywhere – we can lawfully go to obtain the evidence we need to protect their interests.”
“Last year, as the federal case began against Speaker Fox, I pledged to U.S. Attorney Neronha, the support and resources of the Department of Attorney General should they become necessary. During the investigation, when the evidence of the bribery was discovered, the State possessed the prosecutorial tools necessary to move forward with this charge. It was that need and the state’s ability to move forward which helped secure a just resolution today,” said Attorney General Peter F. Kilmartin. “The close working relationship between the Department of Attorney General and the United States Attorney’s Office allows both offices to leverage state and federal resources to bring those who violate our laws – and the public’s trust – to justice. Hopefully, the state and its citizens can now move on from this case. I wish to commend and thank Assistant Attorney General Patrick Youngs for his effort in this case.”
Vincent B. Lisi, Special Agent in Charge of the FBI’s Boston Division, added, “The citizens of Rhode Island put a lot of trust in their elected officials and once again another elected official has betrayed that trust by using his position to line his own pockets. Mr. Fox will now pay the price for his decision to put his personal greed before his duty to those he was supposed to serve.”
“Gordon Fox accepted a bribe, diverted campaign and PAC funds for his personal use, and omitted this illegal income from his federal income tax returns,” stated William Offord, Special Agent in Charge of IRS Criminal Investigation. “No public official gets a free pass to ignore the tax laws, and IRS Criminal Investigation works to ensure that everyone pays their fair share”.
Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police added, “I commend the United States Attorney and the Attorney General and their prosecutors, agents from the FBI, IRS, and our State Police for their unwavering commitment to justice. Corruption impacts every aspect of our free society, and we stand committed to ferret out and to prosecute those who prey on the public’s trust.”
According to court documents filed in this matter, from February 2008 until March of 2014, just before the execution of federal search warrants at his State House office and home, former Speaker Fox repeatedly used money received from campaign donors to pay for personal expenses. After transferring the money from his campaign accounts to his personal accounts, former Speaker Fox used the money - $108,000 in all - to pay the mortgage on his home, the loan payments on his car, and the balance on his personal American Express card, which he used to make purchases at various retail outlets. To conceal this fraudulent conduct, former Speaker Fox falsified his mandatory Rhode Island Board of Elections filings. According to documents filed in court, at the conclusion of 2013, his filing claimed a balance in the Friends of Fox campaign account of $212,060.66, when in fact the balance in the account was $52,403.02.
According to court documents, in the course of the investigation into former Speaker Fox’s fraudulent diversion of campaign funds for his personal use, prosecutors and investigators discovered that, in 2008, former Speaker Fox accepted a $52,000 bribe while serving as an appointed member and Vice-Chairman of the City Providence Board of Licenses. As alleged in court documents, in 2008, the Shark Sushi Bar and Grill, a new restaurant on Thayer Street in Providence, applied for a liquor license from the Providence Board of Licenses. There was considerable neighborhood opposition to the application. As alleged, in the face of that opposition, Shark Bar partners met with then Vice-Chairman Fox. As a result of this meeting, Vice-Chairman Fox agreed to accept a bribe from the partners in exchange for supporting the Shark Bar application before the Board.
According to court documents, at a Board of Licenses hearing on August 13, 2008, two Shark Bar partners testified in favor of the application, and members of the public voiced their opposition. The Board took the application under advisement. At a subsequent Board hearing on August 29, 2008, Vice-Chairman Fox, pursuant to his agreement with the Shark Bar partners, spoke in detail regarding why the license should be awarded, and moved the Board to approve the Shark Bar’s application. The Board voted to approve the Shark Bar’s application.
The investigation revealed that within a week following the Board’s vote to approve the license application, two Shark Bar partners delivered $32,000 in cash and checks to then Vice-Chairman Fox. A third, silent Shark Bar partner delivered an additional $17,500 to Fox through one of the other Shark Bar partners. In all, Vice-Chairman Fox accepted a $52,000 bribe in exchange for his official action as Vice-Chairman of the Providence Board of Licenses on behalf of the Shark Bar.
Additionally, according to court documents, the investigation determined that for the tax years 2008 through 2012, former Speaker Fox filed false tax returns, in that he knowingly omitted from his statement of total income for each of those calendar years the personal income he received as a result of his receipt of the bribe in 2008 and his fraudulent transfers from his campaign accounts to his personal accounts.
The case is being jointly prosecuted in federal court by Assistant U.S. Attorneys Dulce Donovan and Adi Goldstein, and Rhode Island Assistant Attorney General J. Patrick Youngs.
Gordon Fox is scheduled to appear before U.S. District Court Judge Mary M. Lisi at 12:00 p.m. today for arraignment on the three-count Information and for a change-of-plea hearing.
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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: 401-709-5357
[email protected]Former Housing Director in Liberal Sentenced for Wire FraudRead the Press Release
WICHITA, KAN. - A former executive director of the housing authority for the city of Liberal, Kan., was sentenced to a year on federal supervised release and 250 hours of community service for wire fraud, U.S. Attorney Barry Grissom said.
Carol Beckwith, 64, Eufaula, Okla., pleaded guilty to one count of wire fraud. In her plea, she admitted that before she retired in May 2013 she falsified a copy of the housing authority’s personnel policies. She added language in the section defining retirement compensation so she could collect one-half the value of her accumulated sick leave. She provided the fabricated copy of the policy to the new executive director when she retired and made demand for half her accumulated sick leave in the amount of $30,855.
In October 2013 she caused a civil complaint to be filed in U.S. District Court in Kansas seeking to be paid for half her sick leave and referencing the falsified personnel policy.
Grissom commended the Housing and Urban Development - OIG and Assistant U.S. Attorney Jason Hart for their work on the case.
Former Gulfstream Executive Sentenced to over 11 Years in Federal Prison for Embezzling over $10 Million from the Aerospace CompanyRead the Press Release
LOS ANGELES – The former director of finance and accounting at Gulfstream Aerospace Corporation’s Long Beach facility was sentenced today to 135 months in federal prison for embezzling more than $10 million from his employer over a 13-year period.
Marvin Jay Caukin, 66, of Calabasas, was sentenced this morning by United States District Judge John F. Walter, who remanded the defendant into custody at the conclusion of the sentencing hearing.
In addition to the prison term, Judge Walter ordered the defendant to pay $10.25 million in restitution, and to forfeit to the government his interest of at least $2.4 million in properties in Calabasas and Toluca Lake.
Caukin pleaded guilty in January to conspiracy to commit mail fraud, admitting then that he participated in a long-running scheme to defraud Gulfstream by submitting fictitious business invoices to the aerospace company. According to court documents, the invoices were from bogus companies that had been set up by Caukin’s relatives and associates, and had names that were similar to actual businesses involved in the aerospace industry. Once Gulfstream issued checks in response to the invoices from the bogus vendors, Caukin used the funds to pay for range of personal expenses, including his mortgage, car payments, credit cards and professional escorts.
The scheme ran from soon after he was hired by Gulfstream in the fall of 2000 until approximately May 2013, when he was terminated by the company for failing to disclose a prior embezzlement conviction in federal court and lying about a job he supposedly had while he was actually in prison.
Caukin “proved that short prison sentences do not deter him when he resumed embezzling just after being released from a combined 39-month sentence,” prosecutors wrote in a sentencing memo filed with the court.
“[F]rom 1994 until 2013, when defendant was fired [from Gulfstream], the only years defendant was not continually committing fraud were those in which he was incarcerated.”
The investigation into Caukin’s scheme was conducted by the Federal Bureau of Investigation and the United States Postal Inspection Service.
Release No. 15-063
Former Fund Coordinator Pleads Guilty to Theft from Union FundRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that John Francis Songer (45, DeBary) has pleaded guilty to theft from an employee benefit plan. He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set. Songer was indicted on February 25, 2015.
According to court documents, Songer was the Apprenticeship Administrator and Coordinator of the Joint Apprenticeship Training Committee and Trust Fund for the Sheet Metal Workers’ Local Union No. 15. Over an almost six-year period, Songer used a credit card belonging to the Fund to make more than $50,000 in unauthorized charges. The credit card bill was paid by checks written on the Fund’s bank account. Songer’s unauthorized charges included personal expenditures for adult entertainment, restaurants, and gambling. He also incurred charges for travel-related items that the Fund was not obligated to pay. As part of his plea agreement, Songer has agreed to pay more than $50,000 in restitution to the Fund.
"This criminal action demonstrates the Employee Benefits Security Administration's resolve to vigorously enforce the law to ensure that those who steal from employee benefit plans are brought to justice," said Isabel Colon, Regional Director of EBSA's Atlanta Regional Office.
This case was investigated by the U.S. Department of Labor’s Employee Benefits Security Administration, with assistance from the United States Marshals Service. It is being prosecuted by Assistant United States Attorney Roger B. Handberg.
Former Assistant Town Manager in Abingdon Pleads Guilty to Program FraudRead the Press Release
Abingdon, VIRGINIA – The former assistant town manager of Abingdon pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to one count of program fraud.
William Garrett Jackson, 37, of Abingdon, Virginia, waived his right to be indicted and pled guilty today to one count of theft from a program receiving federal funds. At sentencing, Jackson faces a maximum possible penalty of ten years in prison and/or a fine of up to $250,000.
Jackson admitted today that from 2007 through 2014 he used his town-issued credit card, a card to be used only for official business, for personal expenses. Jackson admitted to using the card for personal expenses such as purchasing a subscription to Netflix, buying groceries, paying his personal cell phone bills, purchasing electronics, and purchasing other unauthorized goods and services. In all, Jackson spent $76,404 on the town’s credit card for personal expenses.
As part of his guilty plea, Jackson has agreed to pay back the full amount of the town’s loss, $76,404, by September 1, 2015.
The investigation of the case was conducted by the United States Secret Service, Virginia State Police, and Town of Abingdon Police Department. Assistant United States Attorney Zachary Lee and Special Assistant United States Attorney Kevin Jayne are prosecuting the case for the United States.
East Hartford Man Sentenced to More Than 5 Years in Federal Prison for Role in Narcotics Trafficking RingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES BROWN, also known as “Decky,” 25, of East Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 66 months of imprisonment, followed by four years of supervised release, for his role in a narcotics trafficking ring.
This matter stems from a joint law enforcement investigation headed by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) into a narcotics trafficking operation headed by Luther Nance, also known as “Papers” and “Cash.” The investigation, which included numerous controlled purchases of narcotics and physical surveillance, revealed that Nance and his associates sold crack cocaine and heroin in several communities throughout Connecticut utilizing multiple bases of operation, including a house on Carroll Road in East Hartford, the Sheldon Oaks housing complex in Hartford and an apartment on Valley Street in Willimantic.
According to court documents and statements made in court, BROWN received wholesale quantities of crack cocaine from Nance and other members of the conspiracy and supplied the drug in smaller quantities to dealers and customers. At times, BROWN converted, or “cooked,” cocaine into crack cocaine. The investigation revealed that BROWN and other members of his crew possessed firearms in association with their narcotics trafficking activities.
On June 27, 2013, a federal grand jury returned a 51-count superseding indictment charging BROWN, Nance and 13 other individuals with narcotics conspiracy and related offenses.
On August 19, 2014, BROWN pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base (“crack cocaine”).
BROWN has been detained in state custody since January 2013 and is serving a state sentence of four years of incarceration and six years of special parole for sale of narcotics. The federal sentence imposed today will run concurrently with the remainder of BROWN’s state sentence.
On March 7, 2014, Nance pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of cocaine base, and one count of conspiracy to engage in money laundering. He is detained while awaiting sentencing.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation Division, the U.S. Marshals Service, the Office of the Chief State’s Attorney, the State’s Attorney for the Judicial District of Hartford, and the Hartford, Willimantic, East Hartford, Enfield and Middletown Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Dallas Man Sentenced to 97 Months in Federal Prison on Drug and Child Obscenity ConvictionsRead the Press Release
DALLAS — A 40-year-old Dallas man who pleaded guilty last year to three federal felony offenses in an investigation that began when law enforcement learned he was claiming packages containing anabolic steroids from a postal center in Dallas, was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Nicholas Todd Freed was sentenced by U.S. District Judge Sam A. Lindsay to 97 months in federal prison. He has been in custody since his arrest in late January 2014 by a Task Force Officer with Homeland Security Investigations (HSI), as he was attempting to claim a package containing anabolic steroids at the Deep Ellum Postal Center in Dallas. Pursuant to the arrest, law enforcement discovered Freed possessed a counterfeit U.S. Marshals Service (USMS) credential and badge. Freed was charged in a federal criminal complaint with attempting to possess anabolic steroids and falsely making, forging, counterfeiting and altering a USMS seal. Later, the investigation revealed that Freed also possessed numerous thumb drives containing images of minors engaging in obscene, sexually explicit conduct.
Freed pleaded guilty in November 2014 to a three-count superseding information charging one count of attempted possession with intent to distribute a controlled substance, one count of possession of a document-making implement with intent that it be used in the production of false documents, and one count of possession of obscene visual representations of the sexual abuse of children.
In early January 2014, U.S. Customs and Border Protection (CBP) in San Francisco identified a U.S. Postal Service Express Mail parcel, arriving from Singapore, as suspicious. The parcel contained approximately 1,087 grams of an oily liquid, later determined to contain an anabolic steroid, and it was addressed to JPEG Press, 3100 Main Street #1, Dallas, Texas 75226, which is the address of the Deep Ellum Postal Center. CBP notified HSI in Dallas of the parcel and its contents.
The ensuing investigation determined that the account for the rental box at the postal center was opened with fictitious information, and the box frequently received similar packages. On January 28, 2014, when the HSI task force officer approached Freed who was at the postal center to pick up the package, he discovered Freed was carrying a USMS badge and apparent counterfeit USMS credentials identifying him as a USMS Chief Inspector.
Later that day during a consensual search at Freed’s residence, law enforcement seized computers and computer equipment as well as other items Freed used to make false government identification documents, including laminating materials, blank plastic cards the size of a driver license, pages of magnetic strips for the backs of identification cards, ink consistent with the Texas seal on state licenses and identifications cards, a laminating press, hologram materials of official government seals, pages of names and identities used in the production of the false identifications, and head shots.
Upon further examination of the seized thumb drives, the task force officer discovered visual depictions of minors, including prepubescent minors, engaging in obscene, sexually explicit conduct.
U.S. Immigration and Customs Enforcement’s HSI , CBP, and the Balch Springs and Dallas Police Departments investigated. Assistant U.S. Attorney Keith Robinson prosecuted.
D.C. man sentenced to six years in federal prison for illegal possession of a firearmRead the Press Release
Charleston, W.Va. – A Washington D.C. convicted felon who illegally possessed a firearm was sentenced today in federal court in Charleston to six years in federal prison, United States Attorney Booth Goodwin announced. Sean Anthony Nalle, 30, previously pleaded guilty on March 23, 2015 to pawning a semiautomatic pistol at Carl’s Pawn Shop in Parkersburg, West Virginia. Nalle was previously convicted of drug trafficking felony offenses in the District of Columbia on March 24, 2006, and June 26, 2009. These convictions make it unlawful for him to possess a firearm.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Parkersburg Police Department conducted the investigation. Assistant United States Attorney Joshua C. Hanks handled the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Corporate Executive Indicted for Allegedly Lying to Federal Agents During Public Corruption Investigation Involving Dallas County CommissionerRead the Press Release
DALLAS — A federal grand jury has returned a two-count indictment charging an Austin, Texas, corporate executive with offenses related to a public corruption investigation involving Dallas County Commissioner John Wiley Price and others, announced John Parker, Acting U.S. Attorney for the Northern District of Texas and Richard L. Durbin, Jr., Acting U.S. Attorney for the Western District of Texas.
Helena Tantillo, 58, of Austin, is charged in the indictment, returned by a federal grand jury in Austin last week, and unsealed today, with two counts of making a false statement to law enforcement. Tantillo surrendered to federal authorities in Austin today and made her initial appearance before a U.S. Magistrate Judge who released her on bond.
A federal criminal indictment is a written statement of the essential facts of the offense charged. A defendant is entitled to the presumption of innocence until proven guilty. The statutory penalty, upon conviction, for the offense charged is five years in federal prison and a $250,000 fine, per count.
The FBI and Internal Revenue Service Criminal Investigation are conducting the investigation. Assistant U.S. Attorneys Walt M. Junker and J. Nicholas Bunch and Deputy Criminal Chief Assistant U.S. Attorney Katherine Miller are prosecuting.
Convicted felon pleads guilty to possession with intent to deliver heroinRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Jazzmyn Rochon Litzy, aka Zoe, 35, from Cabell County, West Virginia, pleaded guilty in federal court in Huntington to possession with intent to deliver heroin. In December of 2014, a member of the Drug Enforcement Administration (DEA) working in an undercover capacity, bought drugs twice from Litzy. Following these drug deals , DEA obtained a search warrant for Litzy’s Huntington home at 127 Oakland Avenue. The search of the home yielded more than 70 grams of heroin, and several firearms. Litzy was previously convicted of robbery in 2001, and drug trafficking and tampering with evidence in 2007. These felony convictions make it a federal crime for Litzy to possess any firearm.
Litzy faces up to 20 years in federal prison. She is scheduled to be sentenced on September 21, 2015.
United States District Judge Robert C. Chambers, presided over the plea hearing.
The investigation is being conducted by the Drug Enforcement Administration, the Huntington Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Timothy D. Boggess is handling the prosecution.
Colorado Man Sentenced in New Mexico for Robbing Wells Fargo Bank in Farmington in September 2012 and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Robert O’Dell Neihart, 44, of Ignacio, Colo., was sentenced this afternoon in federal court in Las Cruces, N.M., to 148 months in prison for the armed robbery of a Wells Fargo Bank branch located in in Farmington, N.M. Neihart will be on supervised release for three years after completing his prison sentence.
Neihart was arrested in Nov. 2012, on a two-count indictment charging him with the armed robbery of the Wells Fargo Bank branch located on East Main Street in Farmington on Sept. 21, 2012, and using a firearm during a crime of violence. Count 1 of the indictment also charged co-defendant Denise Myrick, 45, also of Ignacio, Colo., with aiding and abetting Neihart in robbing the bank. Prosecution of the case against Neihart was delayed by competency proceedings.
On Feb. 20, 2015, Neihart pled guilty to both counts of the indictment, and admitted that on Sept. 21, 2012, he robbed the bank by approaching a teller and handing her a two-page letter demanding money. Neihart further admitted that he had a pistol in his possession at the time of the robbery, which he later used to shoot at police vehicles that pursued him after the bank robbery. Neihart was arrested at his Colorado residence later that day by the officers who were in pursuit.
Myrick pled guilty on Dec. 4, 2013, to a misdemeanor information charging her with aiding and abetting a bank robbery. In entering her guilty plea, Myrick admitted driving Neihart to the bank and assisting him in his attempted escape. She was sentenced on Mar. 4, 2014, to three years of probation.
This case was investigated by the Albuquerque and Farmington offices of the FBI, the Farmington Police Department, San Juan County Sheriff’s Office and the La Plata County (Colorado) Sheriff’s Department. The case was prosecuted by Assistant U.S. Attorney William J. Pflugrath.
Clearwater Man Sentenced for Receipt and Distribution of Infant and Toddler Child PornographyRead the Press Release
Tampa, FL – U.S. District Judge Charlene Edwards Honeywell today sentenced Jonathan Patrick Gregory Peterson (33, Clearwater) to 12 years and 7 months in federal prison for receiving and distributing child pornography. The Court also ordered him to forfeit a Sony PlayStation 3, several hard drives, and two cell phones, which he used to commit the offenses. Peterson pleaded guilty on March 3, 2015.
According to court documents, from at least October 2010, through his arrest in August 2014, Peterson actively traded pornographic images of infants and toddlers through various e-mail accounts. FBI agents identified Peterson after he tried to exchange images and videos depicting child pornography with an undercover officer. When Peterson was arrested, he admitted to trading child pornography over the Internet using his cell phone and PlayStation 3 console. A forensic examination showed that Peterson possessed more than 9,000 images of child pornography on his various devices at the time of his arrest.
This case was investigated by the Federal Bureau of Investigation and the Largo Police Department. It was prosecuted by Assistant United States Attorney Josephine W. Thomas.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Charleston heroin dealer pleads guilty in federal courtRead the Press Release
Charleston, W.Va. – Christopher Strick, 36, of Charleston, West Virginia pled guilty today in federal court in Charleston to distribution of heroin, announced United States Attorney Booth Goodwin. Strick admitted that on January 13, 2012, he sold heroin to a confidential informant working with the Metropolitan Drug Enforcement Network Team (“MDent”) in exchange for $200.00. The transaction occurred at defendant’s Edgewood Drive residence.
Strick faces up to twenty years in prison and a $1,000,000 fine when sentenced on September 22, 2015.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal heroin and pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Ceres Man Sentenced to over 7 Years in Prison for Receiving Child PornographyRead the Press Release
FRESNO, Calif. — George Esle Pires, 56, of Ceres, was sentenced today by United States District Judge Anthony W. Ishii to seven years and three months in prison for receiving child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, between November 2006 and November 2012, Pires received images of minors engaged in sexually explicit conduct.
This case was the product of an investigation by the Federal Bureau of Investigation and the Ceres Police Department. Assistant United States Attorneys Grant B. Rabenn and Jeffrey Spivak prosecuted the case.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
California Man Pleads Guilty in Prescription Drug Diversion SchemeRead the Press Release
A Corona, California, man pleaded guilty today in U.S. District Court in Cincinnati to one count of conspiracy to commit mail and wire fraud for his participation in a large-scale, nationwide prescription drug diversion scheme.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent In Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) Cincinnati Field Office announced the guilty plea, entered today by U.S. District Judge Timothy S. Black.
According to court documents, from May 2010 through December 2012, Vin Nguyen, 45, and others conspired to distribute illegally-diverted prescription drugs while concealing the true, illicit sources of the drugs. Nguyen purchased prescription drugs, including HIV medications, anti-psychotic medications and other brand name drugs, from various unlicensed and illegal sources in California and Florida. Working with co-conspirators, Nguyen then sold the drugs to other drug diverters without the statutorily required pedigree documents stating the origin of the drugs. Nguyen and his co-conspirators sold more than $6.5 million worth of diverted drugs.
“Illegal prescription drug diversion threatens the security of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “The Department of Justice will continue to protect American consumers by prosecuting those who engage in prescription drug diversion.”
From December 2011 through December 2012, Nguyen and others sold diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC). On May 6, David Miller and MIC were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license. Those charges remain pending.
Nguyen and his co-conspirators used the company name “Modern Medical” when selling drugs to Miller and MIC. Modern Medical is a real California company that had no involvement in the drug sales. Nguyen and his co-conspirators simply hijacked the name to conceal their involvement and the true, illicit drug sources.
Miller and MIC, in turn, sold the prescription drugs obtained from Nguyen – and multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio. Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico. These false pedigrees covered up the illegitimate sources of the drugs – various illicit, unlicensed suppliers, including Nguyen – and falsely stated that B&Y Wholesale was an authorized distributor of the prescription drugs.
On Feb. 19, Yusef Yassin Gomez, the owner of B&Y Wholesale in Puerto Rico, pleaded guilty to one count of conspiracy to distribute prescription drugs without a wholesale license for his role in the conspiracy.
This matter is being investigated by FDA-OCI and the USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.