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Thursday 4 June 2015
Three People Arrested in Puerto Rico in a Contractor Major Scheme to Defraud the U.S. Department of Veterans AffairsRead the Press Release
On June 3, 2015, a federal grand jury in the District of Puerto Rico returned a five count indictment charging Jose A. Rosa-Colon, his brother and business partner, Ivan Rosa-Colon and Louis Enrique Torres with a multi-million dollar Service-Disabled Veteran-Owned Small Business (SDVOSB) scheme to defraud the U.S. Department of Veteran Affairs. The charges include major fraud against the United States and wire fraud. This investigation was conducted by Special Agents from the U.S. Department of Veteran Affairs, Office of Inspector General, Criminal Investigations Division.
The indictment unsealed in federal court today alleges that from on or about 2007 to 2014, Ivan Rosa-Colon, Jose Rosa-Colon and Torres conspired to use Jose Rosa-Colon’s service-disabled veteran status to create BELKRO General Contractors, which was a pass- through or front company for Ivan Rosa-Colon’s other business, IRC Air Contractors.
The indictment alleges that Ivan Rosa-Colon and Louis Torres used Jose Rosa-Colon’s service-disabled veteran status to certify and register BELKRO General Contractors in various government databases as a SDVOSB after Ivan Rosa- Colon learned that President George W. Bush would be signing a government stimulus package encouraging the use of SDVOSB. The stimulus package would allow for government agencies to award non-competitive, set-aside or sole-source government contracts to SDVOSB like BELKRO General Contractors.
The indictment further alleges that Jose Rosa-Colon, owner of BELKRO General Contractors, was employed as a full-time U.S. Postal Service Carrier; he was not in charge of the day to day operations of BELKRO General Contractors. Jose Rosa-Colon was simply a figurehead or “rent-a-vet”, who was being used for his service-disabled veteran status to obtain contracts for his brother Ivan Rosa-Colon’s company. As a result of the scheme, BELKRO General Contractors unlawfully received set-aside and/or sole-source SDVOSB contracts from the U.S. Department of Veterans Affairs, including contracts involving American Recovery and Reinvestment Act (ARRA) funds.
If convicted, they face a term of 20 years in prison as to each wire fraud charge and up to ten years in prison for the charges of major fraud against the United States. Additionally, they face fines of up to $250,000 and up to three years of supervised release as to each count.
This indictment was announced today by U.S. Attorney Rosa Emilia Rodríguez-Vélez for the District of Puerto Rico, Special Agent in Charge Monty Stokes for the Southeast Field Office, Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division and Acting Special Agent in Charge Sharon Johnson for the Eastern Regional Office, Small Business Administration, Office of Inspector General. The government is represented by Assistant U.S. Attorney Julia Diaz-Rex.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Three More Charged in Federal Steroid and Prescription Narcotic Distribution InvestigationRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury in New Haven has returned a superseding indictment charging 11 individuals with steroid and prescription pill distribution offenses. Eight of the individuals charged in the superseding indictment were arrested in April, and three individuals were arrested this morning.
According to allegations contained in court documents and statements made in court, a long-term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations revealed that former Newtown Police sergeant Steven Santucci was receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation further revealed that other members of the conspiracy were distributing prescription pills, including oxycodone.
Charged in the 12-count superseding indictment are:
STEVEN SANTUCCI, 38, of Waterbury
ALEX KENYHERCZ, 28, of Ansonia
MARK BERTANZA, 33, of Shelton
JASON CHICKOS, 46, of Bridgeport
FRANK PECORA, 53, of Derby
JEFFREY GENTILE, 33, of Ansonia
STEVEN FERNANDES, 54, of Southington
MICHAEL D. MASE, 32, of Sherman
GUIDO VOLPE, 36, of Prospect
JOHN KOCH, 48, of Coventry
LOUIS BORRERO, 52, of Ansonia
SANTUCCI, KENYHERCZ, BERTANZA, CHICKOS, PECORA, GENTILE, FERNANDES and MASE were arrested in late April and were charged by indictment on May 6, 2015. VOLPE, KOCH and BORRERO were arrested today.
The superseding indictment charges all of the defendants with one count of conspiracy to distribute anabolic steroids, an offense that carries a maximum term of imprisonment of 10 years and a fine of up to $500,000. SANTUCCI, KENYHERCZ and BERTANZA are also charged with six counts of possession with intent to distribute anabolic steroids, an offense that carries the same statutory penalties.
The superseding indictment also charges KENYHERCZ, BERTANZA, GENTILE, PECORA and BORRERO with one count of conspiracy to distribute and to possess with intent to distribute oxycodone, an offense that carries a maximum term of imprisonment of 20 years and a fine of up to $1 million. PECORA is also charged with one count of possession with intent to distribute, and distribution of, oxycodone, and possession with intent to distribute cocaine, both of which carry a maximum term of imprisonment of 20 years and a fine of up to $1 million, and with one count of possession of a firearm by a previously convicted felon, which carries a maximum term of imprisonment of 10 years and a fine of up to $250,000.
In addition, SANTUCCI is charged with one count of conspiracy to launder monetary instruments, which carries a maximum term of imprisonment of 20 years and a fine of up to $500,000. This charge stems from SANTUCCI’s alleged use of proceeds of the sale of anabolic steroids to wire payments to foreign sellers of ingredients to make liquid anabolic steroids, and to purchase drug packaging materials from domestic companies.
PECORA is detained while awaiting trial and the other defendants are released on bond.
During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, approximately 350 grams of powder cocaine, and four long guns.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, with the assistance of the U.S. Marshals Service, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Stockton Woman Sentenced to over 5 Years in Prison for Criminal Tax Case and Money LaunderingRead the Press Release
SACRAMENTO, Calif. — Terrylyn McCain, 67, of Stockton, was sentenced today by United States District Judge Troy L. Nunley to five years and 10 months in prison for tax fraud, making false claims against the United States, and money laundering, United States Attorney Benjamin B. Wagner announced. In addition to the prison term, Judge Nunley ordered McCain to pay $156,373 in restitution, the amount she received early in her false refund scheme.
On March 13, 2015, after a five-day trial, a jury found McCain guilty of four counts of mail fraud for mailing false tax returns, four counts of making false claims against the United States by falsifying personal income tax returns for tax years 2005 to 2008, and three counts of money laundering for buying gold with proceeds of the fraud.
According to court documents and evidence introduced at trial, McCain mailed tax returns to the IRS and claimed that banks, tow truck companies, department stores, interior designers and even her gardener had withheld income due to her. To support her scheme, she utilized false documents that indicated significant tax withholdings, including 1099–OID forms that were purportedly issued by financial institutions such as the Bank of Stockton and national retailers such as Costco and Target. In reality, funds were never withheld, the 1099–OID forms were fraudulent, and McCain’s tax returns were falsely inflated by hundreds of thousands of dollars.
In total, McCain filed at least 12 fraudulent returns that sought nearly $3 million in tax refunds. In just one instance, early in the scheme, the IRS refunded $156,373 to McCain. Within the month, she had used the refund money to purchase approximately $62,000 in gold coins, forming the basis for the money laundering charges.
In sentencing McCain, Judge Nunley told the defendant, “You are a cheat, a liar … you stole from the government and others.”
This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys William S. Wong and Kevin Khasigian are prosecuting the case.
South Sioux City, Nebraska Man to Federal Prison for Iowa Methamphetamine ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced June 3, 2015, to more than one year in federal prison.
Victor Gerardo Gonzalez-Hidalgo, 36, from South Sioux City, Nebraska, received the prison term after an October 17, 2014, guilty plea to conspiracy to distribute methamphetamine.
At the guilty plea, Gonzalez-Hidalgo admitted that from September 2013 through May 2014, he was involved in a conspiracy that distributed at least 50 grams of actual (pure) methamphetamine. Gonzalez-Hidalgo admitted to selling one ounce quantities of methamphetamine on nine separate occasions to an undercover law enforcement agent.
Gonzalez-Hidalgo was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Gonzalez-Hidalgo was sentenced to 21 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system. Gonzalez-Hidalgo is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-4046.
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Seven Sacramento Residents Indicted for Identity and Mail Theft SchemeRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 13-count indictment today against seven Sacramento residents, charging them with conspiracy, access device fraud, aggravated identity theft, and possession of stolen mail, United States Attorney Benjamin B. Wagner announced.
The indictment alleges that co-defendants Steven Khamkeuanekeo, 33, Kay Lee, 26, Chee Yang, 27, Frank Her, 36, Amy Her, 33, Lee Yang, 33, and Tou Her, 36, conspired to use unauthorized access devices at large retailers and stole victims’ identities through stolen mail.
According to the indictment, from July 2014 through April 2015, the conspirators obtained personal information from victims through various methods. The conspirators then used that information to create counterfeit access devices or otherwise used unauthorized access devices to obtain things of value in excess of $1,000. Part of the scheme involved using Target store account numbers to buy large amounts of electronics and other goods at Target locations throughout the Sacramento area. The indictment further alleges that one of the defendants, Frank Her, possessed device-making equipment with the intent to defraud.
In all, the indictment alleges that at least 500 counterfeit and unauthorized access devices were possessed, used, produced, or trafficked by members of the conspiracy, and over 2200 victims have been identified to date as having had their identities or mail compromised as a result of the conspiracy.
This case is the product of an investigation by the United States Postal Inspection Service. Assistant United States Attorney Matthew M. Yelovich is prosecuting the case.
If the defendants are convicted, they face maximum statutory penalties ranging from five to 15 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sentencings for May 29 - June 4, 2015Read the Press Release
Paul Allen Miller, 25, of Mills, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on June 4, 2015, for being a felon in possession of a firearm. Miller was arrested in Casper, Wyoming. He received 30 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Natrona County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Erin Meyen, 41, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on June 1, 2015, for willful conversion of supplemental security income benefits. This charge arose from Meyen’s unlawful personal use of Social Security benefits meant to support her disabled son. Meyen received two years of supervised probation, was ordered to pay a $100.00 special assessment and was ordered to pay restitution in the amount of $47,468.95. This case was investigated by the U.S. Social Security Administration, Office of the Inspector General.
Eric D. Cox, 37, of Riverton, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on June 1, 2015, for possession of child pornography. Cox was arrested in Riverton, Wyoming. He received 36 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment. Restitution will be determined at a later date. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force.
Joshua James, 35, of Loveland, Colorado was sentenced by Federal District Court Judge Alan B. Johnson on June 1, 2015, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. James received 168 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $900.00 fine, a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Craig Thomas Rodgers, 60, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on May 29, 2015, for failure to register as a sex offender. Rodgers was arrested in Cheyenne, Wyoming. He received 28 months imprisonment, to be followed by a lifetime term of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the U.S. Marshals Service.
Roger Prado, 34, of Torrington, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on May 29, 2015, for conspiracy to distribute 500 grams of a mixture or substance containing a detectable amount of methamphetamine. Prado was arrested in Torrington, Wyoming. He received 70 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal.
Juan Diaz-Canedo, 39, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on May 29, 2015, for illegal re-entry of a previously deported alien into the United States. Diaz-Canedo was arrested in Jackson, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Ausencio Lopez-Martinez, 25 of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on May 29, 2015 for illegal re-entry of a previously deported alien into the United States. Lopez-Martinez was arrested in Cheyenne, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Rochester Man Sentenced for Trafficking in Credit Card AccountsRead 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 Andres Ahmed Vasquez, 30, of Rochester, NY and Miami, FL, who was convicted of trafficking in and possession of unauthorized counterfeit access devices, was sentenced to 46 months in prison by U.S. District Judge Charles J. Siragusa. He was also ordered to pay restitution of approximately $210,000.Assistant U.S. Attorney John J. Field, who handled the case, stated that between June 2012 and May 2014 Vasquez trafficked in, possessed, and used stolen credit card account numbers and codes belonging to more than 250 different victims. The defendant sold this information to others, who created bogus credit cards that were then used to purchase gift cards at local retailers. Vasquez obtained more than $210,000 as a result of his crimes.
This sentencing is the culmination of an investigation by Special Agents of the United States Secret Service, under the direction of Special Agent in Charge C. Todd Laster.
Prior Felon from Silver City Pleads Guilty to Violating the Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Salvador Murillo Vasquez, 34, of Silver City, N.M., pleaded guilty yesterday in federal court in Las Cruces, N.M., to violating the federal firearms laws. Under the terms of his plea agreement, Vasquez will be sentenced to ten years in federal prison followed by a term of supervised release to be determined by the court.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, 6th Judicial Attorney Francesca Martinez-Estevez, Special Agent in Charge Thomas G. Atteberry of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshal Conrad E. Candelaria for the District of New Mexico, and Cabinet Secretary Gregg Marcantel of the New Mexico Corrections Department.
Vasquez was arrested on Nov. 13, 2014, on a criminal complaint charging him with being a felon in possession of a firearm and ammunition on Feb. 5, 2014, in Grant County, N.M. According to the complaint, on that day, law enforcement officers searched Vasquez’s residence pursuant to the terms of his probation on a state conviction and seized a firearm and ammunition. At the time, Vasquez had absconded from his state probation term. In addition, Vasquez was prohibited from possessing firearms or ammunition because he previously had been convicted of accessory to shooting from a motor vehicle resulting in great bodily injury, burglary of a house and distribution of marijuana. Vasquez was subsequently indicted on Feb. 18, 2015, and charged with being a felon in possession of a firearm and ammunition.
Vasquez was arrested on the federal charge after the 6th Judicial District Attorney’s Office concluded state judicial proceedings relating to Vasquez’s violation of the terms of his state probationary terms.
During yesterday’s proceedings, Vasquez pled guilty to a felony information charging him with possession of a stolen firearm. In entering the guilty plea, Vasquez admitted that on Feb. 5, 2014, in Grant County he possessed a firearm which he knew or had reasonable cause to believe was stolen.
Vasquez remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Marshals Service, and the Probation and Parole Division of the New Mexico Corrections Department, with assistance from the 6th Judicial District Attorney’s Office.
Assistant U.S. Attorney Edwin Garreth Winstead, III, of the U.S. Attorney’s Las Cruces Branch Office is prosecuting this case as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Prior Felon from San Juan County Sentenced to Fifteen Years in Federal Prison for Drug Trafficking and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Casey Wayne Stallings, 30, of Kirtland, N.M., was sentenced this afternoon in federal court in Albuquerque, N.M., for his conviction on methamphetamine trafficking and firearm charges. Stallings was sentenced to 15 years in federal prison followed by five years of supervised release.
U.S. Attorney Damon P. Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Texas, and Commander Kyle Dowdy of the Region II HITDA Narcotics Task Force noted that Stallings was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Stallings and his co-defendant, Jessica Chance Lucero, 25, of Albuquerque, were arrested on May 22, 2014, on an indictment charging them with methamphetamine trafficking and firearms charges. Counts 1 and 2 charged Stallings and Lucero with conspiracy and possession of methamphetamine with intent to distribute. Count 3 charged them with using and carrying a firearm in relation to a drug trafficking crime. Counts 4 and 5 respectively charged Stallings and Lucero with being felons in possession of a firearm. According to the indictment, the defendants committed the five offenses in San Juan County, N.M., on Jan. 27, 2014.
On Feb. 11, 2015, Stallings pled guilty to Counts 2 and 3 of the indictment. In his plea agreement, Stallings admitted that he was a drug dealer and that on Jan. 27, 2014, he possessed a large quantity of methamphetamine at his residence that he intended to sell to his drug customers. Stallings also admitted keeping a firearm in his residence for the purpose of protecting himself from drug customers and other drug dealers who might try to rob him. He also acknowledged that he was prohibited from possessing firearms or ammunition due to his previous felony convictions for robbery, possession of a controlled substance, possession of marijuana, and aggravated assault with a deadly weapon.
Lucero also pled guilty on Feb. 11, 2015. Lucero entered a guilty plea to a felony information charging her with misprision of a felony, and admitted that on Jan. 27, 2014, she failed to report to law enforcement that Stallings was committing federal felony offenses at their residence. More specifically, she admitted knowing that Stallings was selling methamphetamine out of their residence and that he possessed a firearm despite his status as a convicted felon. Lucero was sentenced to five years of probation.
This case was investigated by the Albuquerque office of Homeland Security Investigations and the Region II HIDTA Narcotics Task Force, and was prosecuted by Assistant U.S. Attorneys Lynn Wei-Yu Wang and Samuel A. Hurtado.
The Region II HIDTA Narcotics Task Force is comprised of officers from the Farmington Police Department, San Juan County Sheriff’s Office, Bloomfield Police Department and Aztec Police Department. It is part of the High Intensity Drug Trafficking Areas (HIDTA) program which was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Prior Felon from Albuquerque Pleads Guilty to Federal Carjacking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Jose Rios, 32, of Albuquerque, N.M., pleaded guilty this morning in federal court to federal carjacking and firearms charges. Under the terms of his plea agreement, Rios will be sentenced to 15 years in prison followed by a term of supervised release to be determined by the court.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent Carol K.O. Lee of the FBI’s Albuquerque Division, and Chief Gorden Eden, Jr., of the Albuquerque Police Department.
Rios was indicted on Dec. 17, 2013, and charged with three counts of being a felon in possession of firearms and ammunition (May 9, 2013, July 23, 2013, and Aug. 15, 2013); one count of carjacking on Aug. 14, 2013; and one count of brandishing a firearm during a crime of violence on Aug. 14, 2013. According to the indictment, Rios committed the five crimes in Bernalillo County, N.M. At the time, Rios was prohibited from possessing firearms or ammunition because he previously had been convicted of several felony offenses, including the unlawful taking of a vehicle, aggravated fleeing from a law enforcement officer, and conspiracy to unlawfully take a vehicle.
Rios was arrested on the federal charges on May 9, 2014, after he was transferred to federal custody from state custody where he was facing related state charges. The state charges were dismissed in favor of federal prosecution.
During today’s proceedings, Rios pled guilty to Counts 1, 3 and 4 of the indictment which charged him with being a felon in possession of a firearm and ammunition, carjacking and brandishing a firearm during a crime of violence. In entering the guilty plea, Rios admitted that on May 9, 2013, he unlawfully possessed a revolver and ammunition in Bernalillo County. Rios further admitted that on Aug. 14, 2013, he committed a carjacking when he brandished a firearm at another person so that he could take the person’s vehicle.
Rios has been in custody since his arrest and remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office. It is being prosecuted by Assistant U.S. Attorney Samuel A. Hurtado as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
President of New Jersey-Based Financial Services Firm Sentenced to 10 Years in Prison for Multimillion-Dollar Securities FraudRead the Press Release
The president of an investment and financial services firm was sentenced today to 120 months in prison for evading taxes and defrauding dozens of investors in New Jersey, Pennsylvania, Texas and elsewhere of $5 million, announced by U.S. Attorney Paul J. Fishman for the District of New Jersey.
Everett C. Miller, 45, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to information charging him with one count of securities fraud and one count of tax evasion. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court: Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton, New Jersey. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of seven to 20 percent per year and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: to repay prior investors, most in Ponzi scheme fashion, to pay CMC and its related entities’ payrolls and operating expenses and to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging and vacations; meals, entertainment, retail shopping; and groceries.
On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC and others from selling the notes.
From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008 and 2009, he intentionally failed to provide the Internal Revenue Service (IRS) with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At the plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
In addition to the prison term, Judge Bumb sentenced Miller to three years of supervised release and ordered him to pay restitution of $22.34 million.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larson; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. In addition, he thanked the New Jersey Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Economic Crimes Unit in Newark, New Jersey.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
President of New Jersey-Based Financial Services Firm Sentenced to 10 Years in Prison for Multimillion-Dollar Securities FraudRead the Press Release
Targeted Dozens of Investors Across the Country
CAMDEN, N.J. – The president of an investment and financial services firm was sentenced today to 120 months in prison for evading taxes and defrauding dozens of investors in New Jersey, Pennsylvania, Texas and elsewhere of $5 million, U.S. Attorney Paul J. Fishman announced.
Everett C. Miller, 45, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging him with one count of securities fraud and one count of tax evasion. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities, and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States, and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of 7 to 20 percent per year, and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: (1) to repay prior investors, most in Ponzi scheme fashion, (2) to pay CMC and its related entities’ payrolls and operating expenses, and (3) to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging, and vacations; meals, entertainment, retail shopping; and groceries.
On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC, and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC, and others from selling the notes.
From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008, and 2009, he intentionally failed to provide the IRS with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At the plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
In addition to the prison term, Judge Bumb sentenced Miller to three years of supervised release and ordered him to pay restitution of $22.34 million.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larson; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group, and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. In addition, he thanked the N.J. Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: John A. Azzarello Esq., Chatham, N.J
Postal Carrier Pleads Guilty to Stealing MailRead the Press Release
DAYTON, Ohio – Terrence P. Young, 37, of Dayton, pleaded guilty in U.S. District Court to a charge of delay or destruction of mail, in violation of 18 U.S.C. § 1703(a).
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Scott Balfour, Assistant Special Agent in Charge, U.S. Postal Service Office of the Inspector General, (USPS OIG), announced the plea entered into Tuesday before U.S. District Court Judge Walter H. Rice.
According to court documents, Young, a United States Postal Service carrier, stole Kroger coupons, a Kroger gift card, and a Walmart gift card from mail that had been entrusted to him to deliver. He later used the gift cards at these stores to purchase personal items. When law enforcement officers confronted him, he was found with a mail tub containing more than 200 pieces of first-class mail and approximately 178 pieces of presorted standard mail in the back of his personal car.
Young was employed by the United States Postal Service as a postal carrier from 2010 until March 2015, when he was terminated due, in part, to his theft of mail. His primary job function was to deliver mail along postal route 6, which falls within zip code 45417.
At least 11 customers made complaints at the P.L. Dunbar station in reference to their carrier not delivering their mail. The complaints were similar in nature in that residents advised they were not receiving any mail – including utility bills, business mail, pension checks, insurance correspondence, housing information, court documents and their children’s school information.
“Several customers advised that due to the non-receipt of their mail, they had utilities shut off, lost insurance, missed appointments and court dates, lost out on benefits for their children and were in the process of being evicted from their home without ever receiving notification through the mail,” Assistant United States Attorney Vipal Patel said. “Many had to pay penalties for late payments.”
The parties involved with this case have agreed to a sentencing range of at least one year probation and up to 10 months in prison. Sentencing has been scheduled for 10am on September 8, 2015.U.S. Attorney Stewart commended the cooperative investigation by the USPS OIG, as well as Assistant United States Attorney Vipal Patel, who is representing the United States in this case.
Palm Harbor Oncologist Indicted for Buying Unapproved Cancer Medications from Foreign Sources and Defrauding MedicareRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of a twenty-one count indictment charging Dr. Anda Norbergs (59, Palm Harbor) with nine counts of receiving misbranded drugs in interstate commerce and twelve counts of health care fraud. If convicted, she faces up to three years in federal prison for each count of receiving misbranded drugs and up to ten years on each count of health care fraud. The indictment also notifies Dr. Norbergs that the United States is seeking a money judgment of at least $700,000, which is alleged to be proceeds of the offense.
According to the indictment, Dr. Norbergs, a licensed physician in Florida, was the head doctor, owner, and operator of East Lake Oncology (“ELO”), a cancer treatment clinic located in Palm Harbor. Beginning in at least June 2009, she ordered, and directed others at ELO to order, drugs from foreign distributors, including Quality Specialty Products (“QSP”). The drugs sold to ELO by QSP and the other foreign distributors included drugs from foreign establishments that had not been registered with or approved by the FDA. Many of the drugs were shipped directly to ELO from a location outside the United States, usually the United Kingdom or Canada. The packaging and documents shipped with the drugs showed that they were manufactured and packaged for distribution in foreign countries.
Unbeknownst to patients, these misbranded drugs were then administered at ELO. After administering these drugs to patients, ELO submitted claims for reimbursement to Medicare and other private health care benefit programs. In submitting those claims, Dr. Norbergs falsely represented that the FDA-approved versions of the drugs had been administered, when she knew that unapproved and misbranded versions of those drugs had been given to patients. In so doing, Dr. Norbergs generated profits from the difference between the Medicare reimbursement rates for the FDA-approved drugs and the discounted prices of the misbranded versions of those drugs purchased from foreign distributors.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the U.S. Department of Health and Human Services - Office of Inspector General and the U.S. Food and Drug Administration. It will be prosecuted by Assistant United States Attorney Matthew Jackson.
Patients and/or family members of patients treated by Dr. Norbergs and East Lake Oncology who may have questions or concerns regarding medical treatment received should contact the U.S. Department of Health and Human Services – Office of Inspector General for more information. A dedicated email account has been established. Please contact the case agents at: [email protected].
Owners of Lawrence County Medical Clinics Sentenced for Conspiracy to Commit Health Care FraudRead the Press Release
CINCINNATI – Four people involved in the operation of Advanced Family Medical Center and Watkins-Tsai Imaging in Coal Grove, Ohio were sentenced today for conspiracy to commit health care fraud. They improperly charged government insurance programs for medically unnecessary procedures, most of which were related to the overuse of a CT scan machine.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General, Bret Flinn, Resident Agent in Charge, Defense Criminal Investigative Service, and Antoinette V. Henry, Special Agent in Charge, U.S. Food and Drug Administration Office of Criminal Investigations, announced the sentences handed down today by U.S. District Judge Susan Dlott.
Peter Tsai, 46, owner of Advanced Family Medical Center, his father and mother, Tahsiung Tsai, 74, and Ruey Tsai, 68, who owned Watkins-Tsai Imaging, and Peter Tsai’s cousin, Wei Lih Sheih, aka “Wendy”, 43, who worked for both clinics, had conspired to defraud health care benefit programs including Medicaid, Medicare and Tri-Care between 2004 and 2013 when they were indicted.
All four defendants pleaded guilty to conspiracy to commit health care fraud in August 2014 after four days of trial. Peter Tsai pleaded guilty to the illegal importing of a medical device, namely the purchase of Synvisc knee injections from Canada and Turkey.
Peter Tsai was sentenced to 78 months in prison for a conspiracy to commit health care fraud and the illegal importing of a medical device. For the conspiracy, Defendants Ruey and Tahsiung Tsai were sentenced to 3 years of supervised release, six months of house detention, and community service. As part of the plea agreement, Ruey and Tahsiung Tsai were also required to pay $999,000 towards the restitution by today, which they did. Defendant Wei Lih Sheih was also sentenced to 3 years of supervised release and 12 months of house detention for the conspiracy to commit health care fraud.
According to court documents, both clinics operated out of the same building in Coal Grove. The conspirators performed numerous CT procedures that were unnecessary. For example, Peter Tsai diagnosed most of his patients with a condition called piriformis syndrome in order to give injections guided by his CT scan machine. The defendants also performed unnecessary diagnostic CT scans that were medically unnecessary, including multiple scans of the same body part for the same patient weeks apart. They also performed and billed for CT scans for medically unnecessary injections of an osteoarthritis product, Synvisc, in knees, including injection into young adults without any proper diagnosis of osteoarthritis. One patient received 85 CT-related scans in a 35-month period.
The defendants were also charged with fraudulently inflating their bills to Medicare and Medicaid. Peter Tsai illegally imported misbranded Synvisc from other countries including Canada and Turkey, billed government insurance programs for the injections and transferred money into an account in a Canadian financial institution in order to buy the product.
Stewart commended the cooperative investigation by agents and officers of the agencies named above, as well as Assistant U.S. Attorneys Timothy Mangan and Timothy Oakley, who are representing the United States.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov. Ohioans can report suspected instances of health care fraud to Attorney General DeWine’s office by calling 1-800-282-0515.
Owner of Pain Clinics in Florida and Georgia Sentenced to 14 Years for Conspiracy to Distribute Prescription Drugs to KentuckiansRead the Press Release
LONDON — The owner of two out-of-state pain clinics, where hundreds of thousands of prescription pills were unlawfully distributed to thousands of Kentuckians, has been sentenced to 14 years in federal prison.
On Thursday, May 28, U.S. District Judge Amul Thapar sentenced Joel Shumrak, 67, for conspiracy to distribute oxycodone and alprazolam and laundering money. Shumrak will also forfeit $7 million in proceeds from the drug conspiracy, which he laundered through various banks, including several off-shore banks. Under federal law, he must serve at least 85 percent of his prison sentence.
Beginning around June of 2008, and continuing until June of 2014, thousands of Kentuckians, from Clay, Laurel, Rockcastle, Pulaski, Floyd, Knox, Bell, Pike, Jefferson, Whitley, Madison, Montgomery, Fayette, Magoffin and other Kentucky Counties, travelled to Shumrak’s pain clinics, located in Tucker, Ga., and Broward, Fla., almost daily, to unlawfully obtain prescription pills without a legitimate medical need. Shumrak admitted that his clinics catered to out-of-state patients and that these individuals received little to no physical examinations or other medical treatment before obtaining the drugs. Shumrak further admitted that he was aware that many of these Kentucky patients distributed the drugs upon their return to the Commonwealth.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Joseph Reagan, Special Agent in Charge, DEA, Detroit Field Division; A.D. Wright, Acting Special Agent in Charge, DEA, Miami Field Division; and Daniel Salter, Special Agent in Charge, DEA, Atlanta Field Division, jointly made the announcement.
The investigation was conducted by the DEA in Kentucky, Georgia, Florida and Ohio. Assistant U.S. Attorney Sam Dotson prosecuted this case on behalf of the federal government.
Opelousas woman pleads guilty to stealing identity in order to cash refund checkRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that an Opelousas woman pleaded guilty to stealing a woman’s identity so she could cash a tax refund check worth more than $6,000.
Hailey Guidry, 33, of Opelousas, La., pleaded guilty before U.S. District Judge Richard T. Haik to one count of identity theft. According to evidence presented at the guilty plea, Guidry worked intermittently for her sister’s businesses, which are Guidry’s Tax Service and Dee’s Tax Service. Part of Guidry’s duties involved handling refund checks customers elected to have sent to her sister’s businesses. On May 8, 2013, a refund for a customer of Dee’s Tax Service was received, and Guidry later took possession of the check. Guidry then obtained a false identification card in the name of the customer on May 14, 2013 and cashed the $6,638.05 check the next day using the false identification card.
Guidry faces up to 15 years in prison, two years supervised release, a $250,000 fine and forfeiture of the items seized during the investigation. A sentencing date was not set.
The IRS conducted the investigation. Assistant U.S. Attorney David C. Joseph and Myers P. Namie are prosecuting the case.
Nurse Practitioner, Two Others, Arrested and Charged with Illegally Selling FentanylRead 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 Jennifer Courton, 28; Calvin Elston, Jr., 38, both of Buffalo, NY; and Brandon M. Coburn, 32, of West Seneca, NY, were arrested and charged by criminal complaint with possession with intent to distribute, and to distribute, fentanyl and conspitacy to possess with intent to distribute, and to distribute, fentanyl. The charges carry a maximum penalty of 40 years in prison and a $250,000 fine.Assistant U.S. Attorney Caleb J. Petzoldt, who is handling the case, stated that according to the complaint, between December 2014 and April 2015, Coburn, a licensed nurse practitioner, provided fraudulent Fentanyl prescriptions to Courton and Elston. As a nurse practitioner, Coburn can legally prescribe controlled substances. These prescriptions however were filled by Courton and Elston and sold on the street in the Buffalo area and were not used for a legitimate medical purpose. In some instances, they paid other individuals $50 to fill the prescriptions for them.
Coburn, who is not currently employed as a nurse practitioner in the Western District of New York, previously surrendered his medical license in the State of Arizona for improper professional practice and misconduct. He is the second medical professional arrested this week for a crime involving controlled substances.
Coburn, Courton and Elston made an initial appearance this afternoon before U.S. Magistrate Judge Jeremiah J. McCarthy. Coburn and Courton were released on conditions. Elston is being held pending a detention hearing on June 8, 2015 at 2:30 p.m.
The complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division.
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.
Nigerian Man Sentenced to over Two Years in Prison for Using His Newborn Son's Identity to Defraud BanksRead the Press Release
A Nigerian man who made false claims on employment documents and banking applications was sentenced June 1, 2015 to more than two years in federal prison.
Oluwaseyi Ademola Sadipe, age 39, a Nigerian living in Mason City, Iowa, received the prison term after a February 10, 2015, jury verdict finding him guilty of one count of misuse of a Social Security number, one count of aggravated identity theft, and three counts of making false claims of United States citizenship.
The evidence at trial showed that Sadipe, a lawful permanent resident, falsely claimed to be a U.S. citizen when filling out required employment eligibility verification forms to gain employment with three different employers between December 2013 and June 2014. On the employment forms, Sadipe used his valid Social Security number. In December 2013, Sadipe unlawfully used his five-month-old son’s Social Security number to obtain a checking account. Sadipe spent more than he deposited into the checking account, resulting in a loss of $1,175 to the bank by March 2014. Sadipe also unlawfully used his seven-year-old’s Social Security number on a car loan application in February 2014. Sadipe’s fraudulent use of multiple Social Security numbers was discovered when the car loan application was processed by the bank where Sadipe had opened the checking account.
Sadipe was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Sadipe was sentenced to twenty-five months’ imprisonment. A special assessment of $500 was imposed, and he was ordered to make $2,276.35 in restitution to Clear Lake Bank & Trust ($1,175.27) and First Citizens National Bank ($1,101.08). He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Sadipe is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Office of Inspector General for the Social Security Administration and by Homeland Security Investigations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-3065.
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New Jersey Man Sentenced to More Than a Year in Prison for Illegal Firearms PossessionRead the Press Release
Contact: James M. Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Kevin Anderson, 46, of Mullica Township, New Jersey, was sentenced yesterday in U.S. District Court by Judge John A. Woodcock, Jr. to one year and one day in prison and three years of supervised release for unlawful possession of firearms. He pled guilty to the charge on September 12, 2014.
Court records reveal that on July 12, 2013, Maine probation officers conducting a probation check at a Moose River, Maine residence, discovered seven firearms in Anderson’s bedroom which he purchased in New Jersey, including four handguns that he registered under New Jersey law. The defendant was prohibited from possessing firearms because of prior felony convictions in New Jersey for possession of a destructive device, possession of a sawed-off shotgun and stalking.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Maine Department of Corrections - Adult Community Corrections; U.S. Customs and Border Protection, U.S. Border Patrol; the Somerset County Sheriff’s Office; and the Maine Department of Inland Fisheries and Wildlife, Bureau of Warden Service.
New Jersey Attorney Sentenced to One Year in Prison for His Role in Large Scale Mortgage Fraud SchemeRead the Press Release
NEWARK N.J. – A Westfield, New Jersey, man was sentenced today to 12 months in prison for his role in a large-scale mortgage fraud scheme in which he obtained more than $1 million in illegitimate proceeds, U.S. Attorney Paul J. Fishman announced.
Amedeo Gaglioti, 60, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with wire fraud affecting a financial institution and money laundering. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From December 2007 through August 2010, Gaglioti engaged in a scheme to swindle mortgage lenders by causing fake “short sale” transactions and fraudulently obtaining mortgage loans relating to properties primarily located in northern New Jersey. Gaglioti was the closing attorney for these transactions. As part of the scheme, Gaglioti would prepare two sets of false and misleading closing documents, including HUD-1s, for short sale flip transactions. Through the preparation of these documents, as well as other acts, lenders accepted proceeds of purported short sales in full satisfaction of an existing mortgage. Gaglioti also caused lenders to fund mortgages based upon false and misleading information and documentation. Gaglioti obtained more than $1 million in illegitimate proceeds as a result of the scheme.
In addition to the prison term, Judge Wigenton sentenced Gaglioti to serve three years of supervised release, ordered him to pay restitution of $2,001,245.89 and entered a forfeiture judgment of $1 million.
U .S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano Gregory, for their roles in the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Angelo Servidio Esq., Nutley, New Jersey
Manchester Woman Sentenced to Twenty-One Months’ Imprisonment for Embezzling More than $120,000Read the Press Release
A woman who embezzled more than $120,000 from the bank where she worked was sentenced to twenty-one months in federal prison.
Ann M. Sperfslage, 55, from Manchester, received the prison term after pleading guilty to embezzlement by a bank employee.
At the plea hearing, Sperfslage admitted that, between May 2008 and continuing through August 2010, she embezzled $123,180.59 by creating false loan documents, withdrawing bank funds in accordance with the false documents, and concealing her offense through the temporary misapplication of customer deposits.
Sperfslage was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. She received a sentence of twenty-one months’ imprisonment and was ordered to pay a fine of $5,000. A special assessment of $100 was also imposed.
The case was prosecuted by Assistant United States Attorney Jacob Schunk and was investigated by the Federal Bureau of Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-2002-LRR.
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Luzerne County Man Sentenced to Prison for Unlawfully Possessing A FirearmRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that today in Scranton a 39-year-old Wilkes-Barre man was sentenced to 27 months in prison today by Senior U.S. District Court Judge James M. Munley for unlawfully possessing a firearm as a convicted felon.
According to United States Attorney Peter Smith, the defendant, Joseph White, of Wilkes-Barre, previously pleaded guilty to being in possession of a firearm in Kingston in June 2013.
White was indicted by a federal grand jury in January 2014, as a result of an investigation by special agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Pennsylvania State Police, and Kingston Police.
Judge Munley also ordered White to serve two years on supervised release following his prison sentence, and to pay a special assessment of $100.
Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
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Louisiana Army National Guard Recruiter Sentenced for Conspiracy to Commit Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that PABLO E. PAZ, 45, of New Orleans, was sentenced today after previously pleading guilty to one count of conspiracy to commit theft of government funds.
U.S. District Judge Jay Zainey sentenced PAZ to three years probation and $20,000 restitution.
According to court documents, PAZ was a recruiter for the Louisiana Army National Guard. In this capacity, Paz obtained personally identifiable information (PII), such as names, dates of birth and social security numbers, from potential soldiers that came to the recruiting station for the purpose of becoming a soldier. PAZ provided the PII of potential soldiers to his co-defendant, Ramon Madrid, without the knowledge or consent of the soldiers, to obtain Guard Recruiter Assistance Program (G-RAP) incentive payments to which they were not entitled. Madrid received approximately $20,000 in fraudulently obtained recruitment incentive payments, a portion of which he provided to PAZ.
U.S. Attorney Polite praised the work of the United States Army Criminal Investigation Division Command and the Defense Criminal Investigative Service in investigating this matter. Public Integrity Unit Chief Tracey N. Knight handled this prosecution.
Leader of Laurens County Drug Trafficking Organization Sentenced to over 12 Years in Federal PrisonRead the Press Release
DUBLIN, GA - Michael Derrick Goins, 44, from Miami, Florida was sentenced on last month by Senior U.S. District Court Judge Dudley H. Bowen to 151 months in prison following his conviction on a drug trafficking charge. Goins was one of 10 defendants charged and convicted in the United States District Court in an indictment involving a large drug-trafficking organization operating in Laurens County.
United States Attorney Edward Tarver said, “The persons indicted in this case exploited their ties to the local area to establish a flourishing drug business. In 2013 alone, this organization trafficked about 15 kilograms of cocaine and caused all the attendant misery which follows the drug trade. The dismantling of this organization sends an important message about the consequences of dealing drugs in the Southern District of Georgia. I am pleased that the DEA and the Laurens County Sheriff’s Office formed a very effective partnership to dismantle this organization. This type of cooperation is promoted by the Organized Crime Drug Enforcement Task Force (OCDETF) program, the keystone drug enforcement program of the Department of Justice.”
In addition to Goins, the other Defendants convicted and sentenced as part of this prosecution included:
Andre Colita Wright, 40, Dublin, Georgia, 120 months in prison;
Christopher Derrick Duty, 36, Dublin, Georgia, 36 months in prison
Brady Jerome Linton, 31, Dublin, Georgia, 78 months in prison
Anatay Sxlesyll Kyler, 36, Dublin, Georgia, 71 months in prison;
Jerome Kellam, 38, Dublin, Georgia, 30 months in prison;
Christopher Paul Willis, 36, Dublin, Georgia, 39 months in prison;
Luther Hurst, 52, Dublin, Georgia, 5 years of probation;
Derrick Bernard Moye; 35, Dublin, Georgia, 50 months in prison; and
Verdell Goins, Jr. 45, Dublin, Georgia, 41 months in prison.
The Goins prosecution resulted from a lengthy investigation conducted by members of the DEA, the Laurens County Sheriff’s Office, and the United States Marshal’s Service. The case was prosecuted by Assistant United States Attorney Karl Knoche. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Laredo Resident Pleads Guilty to Threatening to Blow up a Federal BuildingRead the Press Release
LAREDO, Texas – Cristina Lara, 44, has entered a guilty plea to one count of using the telephone to threaten to blow up the Drug Enforcement Administration (DEA) office in Laredo, announced U.S. Attorney Kenneth Magidson.
On the morning of Feb. 21, 2014, DEA received a voicemail message from an anonymous caller threatening to blow up the building. The building houses not only the DEA, but also the FBI, Homeland Security Investigations as well as other federal agencies. It was evacuated immediately.
The FBI traced the message to a phone number located within the Laredo Medical Center which was attached to a particular phone located in the reception area of the building. Video surveillance allegedly shows Lara using the phone at the same time the call was made.
Law enforcement also obtained surveillance video filmed at the time the threatening phone call was made and identified Lara as the person who had placed the threatening phone call. Lara admitted she called the DEA and threatened to blow it up.
Senior U.S. District Judge George P. Kazen will set sentencing at a later date. At that hearing, Lara will face up to 10 years in federal prison and a possible maximum $250,000 fine. She was permitted to remain on bond pending sentencing.
The case is being investigated by FBI and prosecuted by Assistant U.S. Attorney Sonah Lee.
Kentucky Businessman Sentenced in New York Federal Court for $53 Million Tax Scheme and Massive Fraud that Involved Bribery of Bank OfficialsRead the Press Release
Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney Preet Bharara of the Southern District of New York announced that a Kentucky businessman was sentenced today to serve 12 years in prison.
Wilbur Anthony Huff, 53, of Caneyville and Louisville, Kentucky, was also ordered to pay more than $108 million in restitution for committing various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (IRS), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators and an investment bank. In December 2014, Huff pleaded guilty before U.S. District Judge Noemi Reice Buchwald of the Southern District of New York, who imposed today’s sentence.
“The department is committed to vigorously pursuing and prosecuting those individuals who violate the employment tax laws of the United States,” said Acting Assistant Attorney General Ciraolo. “Today’s significant prison sentence sends a loud and clear message to those engaged in such criminal conduct, including owners and operators of professional employer organizations like Mr. Huff, who steal employment taxes collected from their business clients to line their own pockets, instead of paying over those funds to the IRS.”
“Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars and the like,” said U.S. Attorney Bharara. “His crimes have earned him 12 years in prison. I would like to thank our law enforcement partners for their assistance on this case.”
According to the information, plea agreement, sentencing submissions and statements made during court proceedings:
Huff was a businessman who controlled numerous entities located throughout the United States (Huff-Controlled Entities). Huff controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS and other schemes that spanned four states, involving tax violations, bank bribery, fraud on bank regulators and the fraudulent purchase of an insurance company. As part of his crimes, Huff concealed his control of the Huff-Controlled Entities by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers. Huff also maintained a corrupt relationship with Park Avenue Bank and Charles J. Antonucci Sr., the bank’s president and chief executive officer, and Matthew L. Morris, the bank’s senior vice president.
Tax Crimes
From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (PEO) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS and $5 million to Providence Property and Casualty Insurance Company (Providence P&C) – an insurance company based in Oklahoma – for workers’ compensation coverage expenses for O2HR clients, Huff stole the money that his client companies had paid O2HR for those purposes. Among other things, Huff diverted millions of dollars from O2HR to fund his investments in unrelated business ventures and pay his family members’ personal expenses. The expenses included mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, designer clothing, jewelry and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 through 2010, Huff engaged in a massive multi-faceted conspiracy in which he schemed to bribe executives of Park Avenue Bank, defraud bank regulators and the board and shareholders of a publicly-traded company, and fraudulently purchase an Oklahoma insurance company. As described in more detail below, Huff paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between Huff and the bank executives, Huff, Morris, Antonucci and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
Huff further conspired with Morris, Antonucci and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an insurance company based in Oklahoma that provided workers’ compensation insurance for O2HR’s clients and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, Huff paid Morris and Antonucci at least $400,000 in exchange for which they: provided Huff with fraudulent letters of credit obligating Park Avenue Bank to pay $1.75 million to an investor in one of Huff’s businesses if Huff failed to pay the investor back himself; allowed the Huff-Controlled Entities to accrue $9 million in overdrafts; facilitated intra-bank transfers in furtherance of Huff’s fraud; and fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the Huff-Controlled Entities.
Fraud on Bank Regulators and a Publicly-Traded Company
From 2008 to 2009, Huff, Morris and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the bank from engaging in certain types of banking transactions and that would subject the bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the bank’s pre-existing capital. Huff, Morris and Antonucci funneled the $6.5 million from the bank through accounts controlled by Huff to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the bank’s capitalization problem, so that the bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. Huff, Morris and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, Huff, Morris, Antonucci and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York City (the Investment Firm), conspired to defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C and defraud the Investment Firm into providing a $30 million loan to finance the purchase. Specifically, Huff and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan. However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, Huff, Morris, Antonucci and Reichman made and conspired to make a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris and Antonucci had pilfered its remaining assets.
* * *
In addition to his prison sentence, Huff was sentenced to three years of supervised release, and ordered to forfeit $10.8 million to the United States and pay a total of more than $108 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (FDIC) and the IRS.
In imposing today’s sentence, Judge Buchwald said Huff’s crimes were “truly staggering” and “eye popping.” Judge Buchwald described Huff’s conduct, which was preceded by a federal conviction and failure to pay millions in civil judgments, as “a living example” of “chutzpah,” which she defined as “shameless audacity and unmitigated gall.”
Morris and Reichman pleaded guilty for their roles in the above-described offenses on Oct. 17, 2013, and Feb. 20, 2015, respectively. Reichman is scheduled to be sentenced before Judge Buchwald on July 15, and Morris is scheduled to be sentenced before Judge Buchwald on Aug. 19.
Antonucci pleaded guilty to his role in the crimes described above on Oct. 8, 2010, and is scheduled to be sentenced on Aug. 20, also before Judge Buchwald.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Bharara thanked the Special Inspector General for the Troubled Asset Relief Program, the FBI, IRS-Criminal Investigation, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC, for their work in the investigation, and the Tax Division and the U.S. Attorney’s Office of the Southern District of Florida, for their assistance in the prosecution.
Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The case is being handled by the U.S. Attorney’s Office of the Southern District of New York Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella of the Tax Division are in charge of the criminal case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Kentucky Businessman Sentenced in Manhattan Federal Court to 12 Years in Prison for $53 Million Tax Scheme and Massive Fraud That Involved the Bribery of Bank OfficialsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Acting Assistant Attorney General Caroline D. Ciraolo, of the Department of Justice’s Tax Division, announced that WILBUR ANTHONY HUFF, a Kentucky businessman, was sentenced today to 12 years in prison and over $108 million in restitution for committing various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (“IRS”), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators and an investment bank. HUFF pled guilty in December 2014 before U.S. District Judge Naomi Reice Buchwald, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars, and the like. His crimes have earned him 12 years in prison. I would like to thank our law enforcement partners for their assistance on this case.”
Acting Assistant Attorney General Caroline D. Ciraolo said: “The department is committed to vigorously pursuing and prosecuting those individuals who violate the employment tax laws of the United States,” said Acting Assistant Attorney General Ciraolo. “Today’s significant prison sentence sends a loud and clear message to those engaged in such criminal conduct, including owners and operators of Professional Employer Organizations like Mr. Huff, who steal employment taxes collected from their business clients to line their own pockets, instead of paying over those funds to the IRS.”
According to the Information, plea agreement, sentencing submissions, and statements made during court proceedings:
Background
HUFF was a businessman who controlled numerous entities located throughout the United States (“HUFF-Controlled Entities”). HUFF controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS and other schemes, spanning four states, involving tax violations, bank bribery, fraud on bank regulators, and the fraudulent purchase of an insurance company. As part of his crimes, HUFF concealed his control of the HUFF-Controlled Entities by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers. HUFF also maintained a corrupt relationship with Park Avenue Bank and its executives, Charles J. Antonucci, Sr., the president and chief executive officer, and Matthew L. Morris, the senior vice president.
Tax Crimes
From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (“PEO”) located in Tampa, Florida. Like other PEOs, O2HR was paid to manage the payroll, tax, and workers’ compensation insurance obligations of its client companies. However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS, and instead of paying $5 million to Providence Property and Casualty Insurance Company (“Providence P&C”) – an Oklahoma-based insurance company – for workers’ compensation coverage expenses for O2HR clients, HUFF stole the money that his client companies had paid O2HR for those purposes. Among other things, HUFF diverted millions of dollars from O2HR to fund his investments in unrelated business ventures, and to pay his family members’ personal expenses. The expenses included mortgages on HUFF’s homes, rent payments for his children’s apartments, staff and equipment for HUFF’s farm, designer clothing, jewelry, and luxury cars.
Conspiracy to Commit Bank Bribery, Defraud Bank Regulators, and Fraudulently Purchase an Oklahoma Insurance Company
From 2007 through 2010, HUFF engaged in a massive multifaceted conspiracy, in which he schemed to (i) bribe executives of Park Avenue Bank, (ii) defraud bank regulators and the board and shareholders of a publicly traded company, and (iii) fraudulently purchase an Oklahoma insurance company. As described in more detail below, HUFF paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci in exchange for their favorable treatment at Park Avenue Bank.
As part of the corrupt relationship between HUFF and the bank executives, HUFF, Morris, Antonucci, and others conspired to defraud various entities and regulators during the relevant time period. Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds.
HUFF further conspired with Morris, Antonucci, and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an Oklahoma insurance company that provided workers’ compensation insurance for O2HR’s clients, and to whom O2HR owed a significant debt.
Bribery of Park Avenue Bank Executives
From 2007 to 2009, HUFF paid Morris and Antonucci at least $400,000 in exchange for which they: (i) provided HUFF with fraudulent letters of credit obligating Park Avenue Bank to pay an investor in one of HUFF’s businesses $1.75 million if HUFF failed to pay the investor back himself; (ii) allowed the HUFF-Controlled Entities to accrue $9 million in overdrafts; (iii) facilitated intra-bank transfers in furtherance of HUFF’s frauds; and (iv) fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the HUFF-Controlled Entities.
Fraud on Bank Regulators and a Publicly Traded Company
From 2008 to 2009, HUFF, Morris, and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the Bank from engaging in certain types of banking transactions, and that would subject the Bank to a range of potential enforcement actions by regulators. Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the Bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the Bank’s pre-existing capital. HUFF, Morris, and Antonucci funneled the $6.5 million from the Bank through accounts controlled by HUFF to Antonucci. This was done to make it appear as though Antonucci was helping to stabilize the Bank’s capitalization problem, so the Bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the Bank in a better posture to receive $11 million from the Troubled Asset Relief Program. To conceal their unlawful financial maneuvering, HUFF created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned. HUFF, Morris, and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises, Inc., a publicly traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.
Fraud on Insurance Regulators and the Investment Firm
From July 2008 to November 2009, HUFF, Morris, Antonucci, and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York, New York (the “Investment Firm”), conspired to (i) defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C (the Oklahoma insurance company that was owed $5 million by O2HR), and (ii) defraud the Investment firm into providing a $30 million loan to finance the purchase. Specifically, HUFF and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan. However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, HUFF, Morris, Antonucci, and Reichman made, and conspired to make, a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C. Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and HUFF, Morris, and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C.
After deceiving Oklahoma regulators into approving the sale of Providence P&C, HUFF took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after HUFF, Morris, and Antonucci had pilfered its remaining assets.
* * *
In addition to the prison sentence, HUFF, 53, of Caneyville and Louisville, Kentucky, was sentenced to 3 years of supervised release, and ordered to forfeit $10.8 million to the United States and pay a total of more than $108 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (“FDIC”) and the IRS.
In imposing today’s sentence, Judge Buchwald said Huff’s crimes were “truly staggering” and “eye popping.” Judge Buchwald described Huff’s conduct, which was preceded by a federal conviction and failure to pay millions in civil judgments, as “a living example” of “chutzpah,” which she defined as “shameless audacity and unmitigated gall.”
Matthew L. Morris and Allen Reichman pled guilty for their roles in the above-described offenses on October 17, 2013, and February 20, 2015, respectively. Reichman is scheduled to be sentenced before Judge Buchwald on July 15, 2015. Morris is scheduled to be sentenced before Judge Buchwald on August 19, 2015.
Charles Antonucci pled guilty on October 8, 2010, to his role in the crimes described above and is scheduled to be sentenced on August 20, 2015, also before Judge Buchwald.
Mr. Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, IRS Criminal Investigation, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC. Mr. Bharara also thanked the Department of Justice’s Tax Division and the United States Attorney’s Office for the Southern District of Florida for their assistance.
Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella of the Tax Division are in charge of the criminal case.
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Jury Convicts Fort Peck Man of Raping a Sleeping Woman and Making False Statements to Federal AgentsRead the Press Release
GREAT FALLS – The United States Attorney’s Office announces that on June 2, 2015, a jury convicted Brandon Ray Buckles, 28, of Poplar, Montana, on all charges stemming from a rape on the Fort Peck Indian Reservation. The jury found Buckles guilty of Sexual Abuse and two False Statements to Federal Agents. Buckles faces up to life in prison, up to $250,000 in fines, and up to lifetime supervised release for the rape. For the false statements, he faces up to eight years in prison, a $250,000 fine and three years of supervised release. The false statements related to his claims that he never touched the victim at any time during the date of the rape. The physical evidence showed otherwise.
At trial, Assistant United State Attorney Ryan Weldon presented evidence that Buckles was drinking with the victim and various other friends at a house party in Poplar, Montana. The victim ultimately walked into her bedroom and fell asleep next to another man. Buckles entered the same bedroom to look for his cell phone, but he saw an opportunity to rape the victim. He walked over to the victim, pulled down her pants, and raped her until she ultimately woke and screamed at him to stop. Buckles pulled up his pants, and left the house. The male in the bed next to the victim never awoke during the rape because he was too intoxicated. The victim immediately reported the rape. Evidence from the victim was tested, and Buckles’ DNA was identified as a match. In contrast, Buckles told agents that he never touched the victim at any point.
Sentencing is before U.S. District Judge Brian M. Morris in Great Falls, Montana, on September 8, 2015, at 10:30 a.m. This case was prosecuted by Assistant U.S. Attorney Ryan Weldon and investigated by the Federal Bureau of Investigation and local law enforcement.
Jesse Clyde Lee Sentenced to Serve Seventy-Eight Months in Prison for Arson of A BuildingRead the Press Release
KNOXVILLE, Tenn. – Jesse Clyde Lee, 68, of Knoxville, Tenn., was sentenced on June 4, 2015, to serve 78 months in prison by the Honorable Thomas Varlan, Chief U.S. District Court Judge. Lee pleaded guilty in November 2014 to an information charging him with arson of a building.
In addition to his prison sentence, Lee was ordered to pay $4,771,829.45 in restitution. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for three years.
Lee was the owner of Sports Belle, Inc., an athletic apparel manufacturer in Knoxville, Tenn. According to the plea agreement on file with the U.S. District Court, Lee paid Joseph Beason, 38, of Heiskell, Tenn., $10,000 to set the building which housed Sports Belle on fire so that Lee could collect insurance proceeds. Beason enlisted the assistance of Paul Delude, 42, of Knoxville, Tenn., and Chase Lewis, 30, of Powell, Tenn., to assist in burning the building and the $10,000 would be split three ways. Beason, Delude and Lewis, along with a fourth individual, Emma McMillan, 73, of Powell, Tenn., were all charged in this case and are currently awaiting sentencing.
Agencies involved in the investigation of this case include the Bureau of Alcohol, Tobacco, Firearms and Explosives; Knox County Sheriff’s Department; City of Knoxville Fire Department, Fire and Explosion Investigation Unit; and, Knox County Fire Investigation Unit. Assistant U.S. Attorney Jennifer Kolman represented the United States.
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Humboldt County Marijuana Farmer Sentenced to Life in Prison Plus 35 Years for Murdering Immigrant Worker and Related CrimesRead the Press Release
Mikal X. Wilde, 33, of Kneeland, California, was sentenced today to life in prison plus 35 years for murder and related drug trafficking charges, announced U.S. Attorney Melinda Haag for the Northern District of California and Special Agent in Charge David J. Johnson for the Federal Bureau of Investigations (FBI). The charges stemmed from the defendant’s murder of Mario Roberto Juarez-Madrid and the shooting of Pedro Fernando Lopez-Paz on August 25, 2010, on the defendant’s marijuana farm in Humboldt County, California.
Wilde was found guilty on March 2, 2015, of six felonies including marijuana conspiracy, manufacturing and possessing marijuana with the intent to distribute, murder during a narcotics offense, use and possession of a firearm in connection with a narcotics offense and crime of violence and use of a firearm resulting in first degree premeditated murder. Evidence at trial showed that Wilde began a large marijuana grow with more than 1500 plants on over 800 acres of mountain property in Kneeland, California, close to Eureka, during the summer of 2010. In the course of his marijuana cultivation operation, Wilde hired three workers to water and care for the plants, including Juarez-Madrid and Lopez-Paz, both from Guatemala. During August of 2010, Wilde provided the workers with firearms to protect against robbery of the marijuana grow. In late August, the workers became unhappy and wanted to leave with payment for the work they had already performed after Wilde altered their work conditions. Rather than paying the workers, Wilde took firearms away from them and on August 25, 2010, returned to the property armed and shot them. Wilde shot Lopez-Paz in the face, but he survived, hiding in the woods all night until he found help the following morning. Wilde shot Juarez-Madrid three times and hunted him down. The final shot was a contact wound to the back of Juarez-Madrid’s head. The third worker, Christopher Bigelow, also fled into the woods and hid until he was found by a jogger the following morning.
Wilde was indicted for using a firearm to commit first degree murder, in violation of 18 U.S.C. § 924(j); murder in the course of a narcotics offense, in violation of 21 U.S.C. § 848(e)(1)(A); conspiracy to commit marijuana offenses, in violation of 21 U.S.C. §§ 846 and 841; marijuana offenses, in violation of 21 U.S.C. § 841; and two counts of using a firearm during a crime of violence or narcotics trafficking offense, in violation of 18 U.S.C. § 924(c). The jury found the defendant guilty of a premeditated first degree murder, in addition to the other charges listed above.
According to the government’s filings, Wilde hired immigrants “to work on his marijuana grow in the belief that they were expendable, not in a position to complain and that they might not be missed if they disappeared forever into the woods of Humboldt County. When he could not pay them, he murdered one and tried to murder the other. The defendant preyed on their status and viewed them as free labor that could not stand up to him.” In contending the only appropriate sentence for defendant’s crimes included life in prison, the government argued,. . . the defendant undoubtedly committed the premeditated, heinous and cruel murder of Juarez Madrid by pursuing him and shooting him repeatedly from behind. Then the defendant finished Juarez Madrid off execution style by pushing the gun against the back of the victim’s head and firing into his head. This conduct is sufficient to earn him a life sentence alone. But in this case, the murder is further aggravated by the fact that the defendant also tried to murder Lopez Paz by shooting him in the face. Only good fortune kept this from being a double murder – what Wilde clearly intended to commit.
Wilde has been in federal custody since March 12, 2012, and will begin serving his sentence immediately.
The sentence was handed down by the Honorable U.S. District Judge Edward M. Chen. Judge Chen also sentenced Wilde to pay $50,000 in restitution to his victims and to pay a $600 special assessment.
The case was prosecuted by Assistant U.S. Attorneys Kimberly Hopkins and William Frentzen, paralegal specialist Kevin Costello and legal techs Lance Libatique, Ponly Tu, Daniel Charlier-Smith and Marina Ponomarchuk. The case was investigated by the San Francisco Division and Sacramento Division of the FBI, Humboldt County Sheriff’s Office, Humboldt County District Attorney’s Office, U.S. Marshals Service, California Highway Patrol, CalFire and Redding Police Department.
Humboldt County Marijuana Farmer Sentenced to Life in Prison Plus 35 Years for Murdering Immigrant Worker and Related CrimesRead the Press Release
SAN FRANCISCO– Mikal X. Wilde was sentenced today to life in prison plus 35 years for murder and related drug trafficking charges, announced U.S. Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson. The charges stemmed from the defendant’s murder of Mario Roberto Juarez-Madrid and the shooting of Pedro Fernando Lopez-Paz on August 25, 2010, on the defendant’s marijuana farm in Humboldt County, California.
Wilde, 33, of Kneeland, Calif., was found guilty on March 2, 2015, of six felonies including marijuana conspiracy, manufacturing and possessing marijuana with the intent to distribute, murder during a narcotics offense, use and possession of a firearm in connection with a narcotics offense and crime of violence, and use of a firearm resulting in first degree premeditated murder. Evidence at trial showed that Wilde began a large marijuana grow with more than 1500 plants on over 800 acres of mountain property in Kneeland, California – close to Eureka – during the summer of 2010. In the course of his marijuana cultivation operation, Wilde hired three workers to water and care for the plants, including Mr. Juarez-Madrid and Mr. Lopez-Paz, both from Guatemala. During August of 2010, Wilde provided the workers with firearms to protect against robbery of the marijuana grow. In late August, the workers became unhappy and wanted to leave with payment for the work they had already performed after Wilde altered their work conditions. Rather than paying the workers, Wilde took firearms away from them, and on August 25, 2010, returned to the property armed, and shot them. Wilde shot Mr. Lopez-Paz in the face, but he survived, hiding in the woods all night until he found help the following morning. Wilde shot Mr. Juarez-Madrid three times and hunted him down. The final shot was a contact wound to the back of Mr. Juarez-Madrid’s head. The third worker, Christopher Bigelow, also fled into the woods and hid until he was found by a jogger the following morning. Wilde was indicted for Using a Firearm to Commit First Degree Murder, in violation of 18 U.S.C. § 924(j); Murder in the Course of a Narcotics Offense, in violation of 21 U.S.C. § 848(e)(1)(A); Conspiracy to Commit Marijuana Offenses, in violation of 21 U.S.C. §§ 846 and 841; Marijuana Offenses, in violation of 21 U.S.C. § 841; and two counts of Using a Firearm During a Crime of Violence or Narcotics Trafficking Offense, in violation of 18 U.S.C. § 924(c). The jury found the defendant guilty of a premeditated first degree murder, in addition to the other charges listed above.
According to the government’s filings, Wilde hired immigrants “to work on his marijuana grow in the belief that they were expendable, not in a position to complain, and that they might not be missed if they disappeared forever into the woods of Humboldt County. When he could not pay them, he murdered one and tried to murder the other. The defendant preyed on their status and viewed them as free labor that could not stand up to him.” In contending the only appropriate sentence for defendant’s crimes included life in prison, the government argued,
. . . the defendant undoubtedly committed the premeditated, heinous, and cruel murder of Mr. Juarez Madrid by pursuing him and shooting him repeatedly from behind. Then the defendant finished Mr. Juarez Madrid off execution style by pushing the gun against the back of the victim’s head and firing into his head. This conduct is sufficient to earn him a life sentence alone. But in this case, the murder is further aggravated by the fact that the defendant also tried to murder Mr. Lopez Paz by shooting him in the face. Only good fortune kept this from being a double murder – what Wilde clearly intended to commit.
Wilde has been in federal custody since March 12, 2012 and will begin serving his sentence immediately.
The sentence was handed down by the Honorable Edward M. Chen, U.S. District Judge. Judge Chen also sentenced Wilde to pay $50,000 in restitution to his victims and to pay a $600 special assessment.
The case was prosecuted by Assistant United States Attorneys Kimberly Hopkins and William Frentzen, paralegal specialist Kevin Costello, and legal techs Lance Libatique, Ponly Tu, Daniel Charlier-Smith, and Marina Ponomarchuk. The case was investigated by the Federal Bureau of Investigation, San Francisco Division and Sacramento Division; Humboldt County Sheriff’s Office; Humboldt County District Attorney’s Office; United States Marshals Service; California Highway Patrol; CalFire; and Redding Police Department.
Howard County Man Pleads Guilty to Armed Robbery and to Being an Accessory After the Fact to a MurderRead the Press Release
Baltimore, Maryland – Avery Terry, age 23, of Laurel, Maryland, pleaded guilty today to commercial robbery, using and brandishing a firearm during a crime of violence, and accessory after the fact to a second robbery resulting in death.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief Gary Gardner of the Howard County Police Department; and Howard County State’s Attorney Dario Broccolino.
According to Terry’s plea agreement, on January 21, 2014, Terry and another individual robbed the CVS Pharmacy in Elkridge, Maryland, at gun point stealing approximately $200. A store video camera recorded the robbery, including the distinctive clothing worn by the robbers. The gun used during the robbery belonged to Terry, who texted a picture of himself holding the handgun two days before the robbery. Terry had a previous felony conviction for drug distribution and was prohibited from possessing a gun or ammunition.
On January 26, 2014, Howard County Police executed an arrest warrant for the suspected shooter in a January 23, 2014 robbery and homicide of a drug dealer. Law enforcement saw Terry the suspected shooter leaving the alleged shooter’s home. The two got into Terry’s car. Police conducted a traffic stop and arrested the suspected shooter. A black .38 caliber revolver (different from the gun used in the CVS robbery) was found under the driver’s seat where Terry was driving. Ammunition was also found in Terry’s car.
A Howard County detective who was investigating the CVS robbery was also participating in the execution of the arrest warrant that day. The detective noticed clothing in Terry’s car that matched the distinctive clothing worn by the robbers. After being advised of his rights, officers interviewed Terry regarding the gun found in his car. A search warrant was also executed at Terry’s home and law enforcement recovered a mask and other clothing matching that worn by one of the CVS robbers.
After Terry’s arrest, Howard County Police monitored Terry’s jail calls, including a call in which he asked his mother to get his employer to provide a false alibi for him at the time of the CVS robbery. Terry’s mother called the employer and asked him to provide the alibi, but the employer refused and promptly reported the call to police. Cell site data from Terry’s phone revealed that it was used to send calls or data through a cell tower location near the CVS Pharmacy at the time of the robbery.
Subsequent investigation revealed additional information concerning Terry’s knowledge of the January 23, 2014, robbery/homicide. Call records show that between January 21 and January 26, 2014, Terry had frequent and regular telephone communication with two individuals charged with that crime. The alleged shooter is facing murder charges in Howard County Circuit Court. A second alleged co-conspirator is charged federally for his role in the robbery and murder. In addition, Terry admitted that at the time of the suspected shooter’s arrest in Terry’s car, they were attempting to get rid of the murder weapon.
Terry faces a maximum penalty of 20 years in prison for the robbery, a mandatory minimum sentence of seven years and up to life in prison for using and brandishing a firearm during a crime of violence, and a maximum of 10 years in prison for being an accessory after the fact. U.S. District Judge George L. Russell, III has scheduled sentencing for September 11, 2015, at 2:00 p.m.
United States Attorney Rod J. Rosenstein commended the ATF, Howard County Police Department and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Sandra Wilkinson and Zachary A. Myers, who are prosecuting the case.
Hiawatha Man Sentenced to 20 Years for Attempting to Cook Meth That Started Mobile Home FireRead the Press Release
A man whose November 2013 attempt at cooking methamphetamine resulted in a fire that damaged several mobile homes in Hiawatha was sentenced today to 20 years in federal prison.
Michael Landon Monroe Lala, age 27, from Hiawatha, Iowa, received the prison term after a January 27, 2015 guilty plea to attempted manufacture of methamphetamine.
In a plea agreement, Lala admitted that he manufactured methamphetamine many times between April 2012 and May 2014, and that he recruited others to purchase pseudoephedrine for him so he could make meth. Lala also admitted that on November 13, 2013, he was in the process of cooking meth via the “one-pot” method when the bottle he was using in the manufacturing process tipped over, causing a fire. A 14-year-old and the owner of the mobile home in Hiawatha where Lala was cooking the meth were also present in the mobile home when the fire started. The mobile home where the fire started was destroyed, and five neighboring mobile homes were also extensively damaged. Three of the other damaged mobile homes were occupied at the time of the fire. One of those residences was occupied by two adults and four minor children, another was occupied by one adult, and a third was occupied by two adults.
Lala was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Lala was sentenced to 240 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
The case was investigated by the Hiawatha Police Department and the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Linn County Sheriff's Office; the Cedar Rapids Police Department; the Marion Police Department; the Iowa Division of Narcotics Enforcement; and the Sixth Judicial District Department of Correctional Services, and prosecuted by Assistant United States Attorney Dan Chatham.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR14-69-LRR.
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Hartford Man Sentenced to 51 Months in Federal Prison for Illegally Possessing AmmunitionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SETH WATSON, 30, of Hartford, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 51 months of imprisonment, followed by three years of supervised release, for illegally possessing ammunition.
According to court documents and statements made in court, on July 16, 2012, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) received information from the Hartford Police Department’s Shoot Team regarding five individuals who had purchased ammunition from a sporting goods store in East Hartford the previous day. All five of the individuals, including WATSON, were convicted felons. The investigation revealed that WATSON and others had purchased one box of 9mm ammunition, one box of .38 Special ammunition and one box of .45 Auto ammunition. Each of the boxes contained 50 rounds.
The investigation further revealed that the individuals stored firearms and ammunition in the basement of a residence on Pliny Street in Hartford. A court-authorized search of the residence on July 18, 2012, revealed most of the ammunition that had been purchased on July 15, 2012, as well as a loaded 9mm handgun, a loaded .38 caliber revolver, a loaded pistol grip shotgun, and additional rounds of ammunition.
WATSON has been detained since his arrest on July 20, 2012. On April 30, 2014, he pleaded guilty to one count of possession of ammunition by a previously convicted felon.
WATSON’s criminal history includes at least eight felony convictions, including a conviction for burglary in the first degree.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hartford Police Department, with the assistance of the East Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Hardin County Man Sentenced for Attempting to Entice a ChildRead the Press Release
BEAUMONT, Texas – A 47-year-old Kountze, Texas man has been sentenced to federal prison for child exploitation violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Raymond Edward Russ, Jr., pleaded guilty on Oct. 17, 2014, to coercion and enticement involving the sexual exploitation of a child and was sentenced to 120 months in federal prison on June 2, 2015 by U.S. District Judge Thad Heartfield.
According to information presented in court, on May 2, 2014, law enforcement officers became aware of a Craigslist advertisement posted by a person identified as Russ seeking a young female for sexual activity. An undercover officer posing as a 13-year-old girl named Ashley contacted Russ and began corresponding online. During the next 20 days, Russ and “Ashley” engaged in email conversations about “Ashley’s” sexual experiences and that she was only 13. Russ also provided a photo of himself to Ashley. On May 20, 2014, Russ began aggressively pursuing Ashley and attempting to entice her to meet for sexual activity. Russ arranged to pick Ashley up from an apartment complex on Folsom in Beaumont. Russ arrived at the apartment complex and was detained. Russ was indicted by a federal grand jury on June 24, 2015.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. 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 better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Homeland Security Investigations (HSI) and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Michelle Englade.
Guilty Verdict Returned Against Murder-for-Hire DefendantRead the Press Release
U.S. Attorney Kenneth A. Polite announced that this afternoon, a jury returned a guilty verdict against NEMESSIS BATES for his participation in the November 2010 murder of Christopher “Tiger” Smith.
The jury found BATES, age 36, of Kenner, guilty as charged of solicitation to commit a crime of violence, use of interstate commerce facilities in the commission of murder-for-hire, causing death through the use of a firearm, and conspiracy to possess firearms.
According to court documents, on Sunday, November 21, 2010 at 8:10 pm, Christopher Smith was found by Jefferson Parish Sheriff (“JPSO”) deputies lying in the doorway of his Gretna apartment, after having been shot at least twenty times. Smith was pronounced dead at the scene. JPSO’s investigation ultimately revealed that BATES paid co-defendants, AARON SMITH, a/k/a “Beadie,” a/k/a “Beedie,” and WALTER PORTER, a/k/a “Moonie,” a/k/a “Urkel,” $20,000 to murder Christopher Smith. AARON SMITH previously pled guilty and awaits sentencing. WALTER PORTER is awaiting trial.
U.S. District Judge Sarah S. Vance set sentencing for September 9, 2015. BATES faces a maximum penalty of life imprisonment.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation, the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorneys Liz Privitera and Greg Kennedy are in charge of the prosecution.
Guatemalan National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that SERGIO TULIO VARGAS-VARGAS, age 25, a citizen of Guatemala, was sentenced today after previously pleading guilty to a one-count Indictment for illegal reentry of a removed alien.
U.S. District Judge Jay C. Zainey sentenced VARGAS-VARGAS to time served and a $100 special assessment. VARGAS-VARGAS will be surrendered to the custody of the U.S. Immigration & Customs Enforcement for removal proceedings.
According to court documents, VARGAS-VARGAS reentered the United States after having been previously deported on October 25, 2012.
U.S. Attorney Polite praised the work of the United States Immigration and Customs Enforcement Agency in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis was in charge of the prosecution.
Great Falls Man Sentenced to 12 Years for Making Meth in His Grandfather's GarageRead the Press Release
GREAT FALLS—Christopher Stefani, 47, of Great Falls, was sentenced today for manufacturing methamphetamine in his grandfather’s garage, which led to an explosion. Great Falls United States District Court Judge Brian Morris sentenced Stefani to 144 months in prison, followed by a term of 3 supervised release.
Stefani previously pleaded guilty to manufacturing methamphetamine. In an Offer of Proof filed by the government, and accessible through PACER, the government stated that if the case had proceeded to trial, it would have proven that on July 8, 2014,
an explosion occurred while Stefani manufactured methamphetamine in his 94-year-old grandfather’s garage in Great Falls, Montana. This methamphetamine laboratory was not reported to police until a few days later after a caregiver for Stefani’s grandfather realized someone had been making methamphetamine in the garage. At the time of the explosion, a neighbor had spotted a white cloud of smoke come out of the garage. Immediately after the explosion, the neighbor saw Stefani drive quickly down the back alley.
The caretaker went into the garage during the evening of July 9, 2014. She saw a burn mark on the floor, as well as salt and Coleman fuel. She did not want to disrupt Stefani’s elderly grandfather from sleeping that night, so she called police the next day. The caretaker told detectives that Stefani used his grandfather’s garage as his personal work area, and came and went as he pleased. She said Stefani had last been in the garage on July 8, 2014, and she spoke to him that same day. Stefani had reported he severely burned his leg on a motorcycle and was in a lot of pain.
During the investigation, detectives found a one gallon can of Coleman Fuel had caught fire and scorched the surrounding area. Detectives also found four Walgreens receipts for pseudoephedrine. They recovered a bloody bandage, coffee filters, battery tops, tubing, a salt container, and liquid fire sulfuric acid, which were all items consistent with manufacturing methamphetamine. Detectives found gas generators with tubing coming out of the lids and a white substance in the coffee filters. The DEA Laboratory analyzed items from the scene and concluded they contained methamphetamine.
This case was prosecuted by Assistant United States Attorney Jessica Betley. Because there is no parole in the federal system, Stefani will have to serve at least 85% of his sentence before he is released from prison. The case was investigated by Russell Country Task Force, which includes law enforcement from the Great Fall Police Department.
Gore Woman Pleads Guilty to Wire Fraud, $146,000 Loss to Bacone CollegeRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that TAMMY JEAN McDANIELS, age 56, of Gore, Oklahoma, pled guilty to an Information charging her with WIRE FRAUD, in violation of Title 18, United States Code, Section 1343.
The charge arose from an investigation by the Federal Bureau of Investigation and the Muskogee Police Department.
The Information alleged that from on or about October 1, 2012 to on or about December 19, 2014, within the Eastern District of Oklahoma and elsewhere, McDANIELS, the former Director of Human Resources at Bacone College, devised and intended to devise a scheme to defraud Bacone College, and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises. The scheme involved McDANIELS fraudulently reactivating former employees and contractors on the payroll records and causing false payments to be made to her bank accounts. As a result of McDANIELS’ actions, Bacone College sustained a loss of approximately $146,000.00.
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 completion of that report. The defendant was released on bond pending sentencing.
The statutory range of punishment is up to 20 years imprisonment, a fine of up to $250,000.00 or both.
Assistant United States Attorney Chris Wilson represented the United States.
Former bookkeeper indicted on fraud and identity theft charges for use of employer’s credit cardsRead the Press Release
Bookkeeper made unauthorized purchases totaling over $105,000
EVANSVILLE - United States Attorney Josh J. Minkler announced today federal charges against the former bookkeeper of Marine Industries Corporation (MIC). Alice Marie Casey, 44, of Jeffersonville, Indiana, was indicted on three counts of access device fraud and one count of aggravated identity theft.
“White collar crime is stealing,” said Minkler. “It removes billions of dollars from investors and often negatively impacts our economy. Ms. Casey, will no longer be lining her pockets with others people’s money.”
Casey served as the bookkeeper at MIC in Jeffersonville, Indiana, where she paid company credit card bills, issued company credit cards to new employees, destroyed and cancelled company credit cards of former employees, and completed tasks associated with the company’s mail.
Casey opened a Visa credit card in the name of the company’s chief executive officer without authorization and then added a new card to that account. With this new account, Casey is alleged to have obtained goods and merchandise for her personal benefit, including a firearm, household furniture, and funeral arrangements, with a total value of approximately $10,312.22.
Casey also opened a second Visa credit card in the name of Marie Casey, without authorization of MIC, which Casey used to obtain goods and merchandise for her personal benefit, including a firearm, Halloween costumes, and life insurance policies, with a total value of approximately $52,239.67.
Further, Casey made purchases using the MIC office Visa credit card without authorization to obtain goods and merchandise for her personal benefit, including a mini I-pad, theater tickets, and utilities, with a total value of approximately $43,308.60.
This investigation was a collaborative effort between the United States Secret Service and the Jeffersonville Police Department.
Casey had her initial appearance this week in federal court in New Albany and was released. Her trial date is set for July 13, 2015.
According to Assistant United States Attorney Kyle Sawa, who is prosecuting this case for the government, Casey faces up to 10 years for two of the fraud counts and up to 15 years for the third count, if convicted. In addition, Casey faces two years consecutive to those counts, if convicted for aggravated identity theft.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Former Piedras Negras “Plaza” Drug Trafficker Sentenced to Federal PrisonRead the Press Release
In San Antonio today, 46-year-old Esiquiel Rodriguez (aka “Cheke”), a former major drug trafficker in the Piedras Negras “Plaza,” was sentenced to 420 months in federal prison for federal drug and firearm violations announced Acting United States Attorney Richard Durbin, Jr., DEA Special Agent in Charge Joseph M. Arabit and San Antonio Police Chief Anthony Treviño.
Rodriguez was arrested in April 2013 by the San Antonio Police Department on a charge of possession with intent to distribute methamphetamine. During a subsequent consensual search of his residence, investigators discovered a .357 caliber revolver. On September 29, 2014, Rodriguez pleaded guilty to possession with intent to distribute over 300 grams of pure methamphetamine and one count of undocumented alien in possession of a firearm.
In a separate but related matter, on April 9, 2015, Rodriguez pleaded guilty to one count of conspiracy to possess with intent to distribute a controlled substance. By pleading guilty, Rodriguez admitted that since the early 2000s, he was one of the major drug traffickers in the Piedras Negras “Plaza” in Coahuila, Mexico, and was responsible for the transportation of thousands of kilograms of cocaine and marijuana from Mexico into the United States.
Law enforcement investigations revealed that Rodriguez had strong associations with various large scale narcotics organizations, including the Los Zetas transnational drug cartel. From approximately 2007 through 2009, Rodriguez worked with various high level Zetas trafficking cocaine. The investigation revealed that between 2007 and 2009, Rodriguez and others smuggled a minimum of 500 kilograms of cocaine per month from Mexico into the United States, and at least 6,000 kilograms per year during this time frame. Most of this cocaine was smuggled through the Eagle Pass Port of Entry to San Antonio and then distributed to other destinations throughout the United States. Many of the same persons and vehicles used to smuggle narcotics into the United States were used to smuggle millions of dollars of drug proceeds back into Mexico as well as weapons for the Zetas. These weapons were assault type weapons which were used to control the Plazas or drug trafficking areas controlled by the Zetas.
As a result of his guilty plea to the related drug conspiracy charge, Rodriguez also faces a sentence of 35 years in federal prison if the terms of the plea agreement are approved by the Court. Sentencing in that case is scheduled for 8:30am on July 24, 2015, before Chief United States District Judge Fred Biery.
This charges resulted from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation conducted by agents with the Drug Enforcement Administration (DEA), San Antonio Police Department and the High Intensity Drug Trafficking Area Task Force (HIDTA), which is comprised of investigators from the Texas Department of Public Safety, Homeland Security Investigations (HSI), Federal Bureau of Investigation (FBI) , Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Internal Revenue Service-Criminal Investigation (IRS-CI). The U.S. Border Patrol also assisted in this investigation.
The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering operations, and those primarily responsible for the nation’s illegal drug supply.
Former Officer of Nationwide Fence and Supply Co. Pays $358,707.06 to Settle Alleged False Claims Act Violations Involving Disadvantaged Business Enterprise Requirements in Federally Funded ProjectsRead the Press Release
Alleged Violations Involved Federally Funded Transportation Projects in Kentucky and Indiana
LOUISVILLE, Ky. – Micheal DeMil, a former officer of RMD Holdings, Ltd d/b/a Nationwide Fence and Supply Co. (Nationwide) today paid $358,707.06 to settle allegations that while a project manager, he violated the Disadvantaged Business Enterprise (DBE) requirements in certain federally funded construction projects, announced Acting U.S. Attorney John E. Kuhn, Jr. Today’s payment, in addition to a $1,750,000 payment by Nationwide in December of 2014, settles allegations that the company circumvented the DBE requirements in federally funded construction projects.
“The Disadvantaged Business Enterprise program was created to ensure a level playing field for small, minority-owned and women-owned companies in federally funded transportation projects,” stated Acting U.S. Attorney Kuhn. “By circumventing the law, Mr. DeMil undermined the goal of assisting disadvantaged companies in a market where the federal government invests many millions of dollars.”
The settlement agreement arises from Nationwide’s utilization of a DBE company as a pass through in order to meet the requirements specified in federally funded projects. In particular, the United States contends that during the period from January 6, 2008, through July 16, 2010, then officer and project manager Micheal Demil caused Nationwide to misrepresent how it utilized Sallie’s Wholesale Construction, Inc. This was in violation of federal regulations guiding participation of DBEs in federally funded Department of Transportation Financial Assistance Programs. The projects were in Indiana (where Nationwide installed security fencing at an airport) and in Kentucky (where Nationwide installed high tension cable barriers in Barren, Bullitt, Hart and Jefferson Counties in June of 2008). On both of these projects Michael DeMil acted as project manager.
An earlier settlement agreement with Nationwide covered conduct in 2008, when the Department of Transportation-Office of Inspector General began investigating Nationwide. The federally funded projects were performed between October 20, 2006, through July 16, 2010, in Kentucky, Indiana, Illinois, Georgia and New York and most involved the installation of guardrails, security fencing, and cable barriers along interstates.
At the time, Nationwide was co-owned by two brothers: Micheal DeMil and Robert DeMil. The company was a specialty construction group that conducted business in 33 states with its principal office located in Chesterfield Township, Michigan. Many of the transportation projects on which Nationwide worked were funded in whole or in part by the United States, and each project required a certain percentage of DBE participation. Nationwide was not a certified DBE.
The DBE program generally requires that recipients of federal highway funds establish a program to assist women owned or minority owned businesses to compete for work on federally funded construction projects. Recipients of these funds often accomplish this goal by requiring that each construction project include a certain percentage of participation by a DBE company. This percentage can be met by contractors utilizing DBE subcontractors to either perform work on the project or to supply materials.
Micheal DeMil and Fenton Construction and Excavating, Inc. (where Mr. DeMil is now the majority shareholder, co-director, and Vice President) also have agreed to enter into a three year administrative settlement and compliance agreement with the United States Department of Transportation, Federal Highway Administration (FHWA). This agreement requires DeMil and Fenton to adopt and implement an Ethics Code and Corporate Compliance Program; appoint a Corporate Compliance Officer; and retain an independent Monitor to evaluate the Company's performance of this Agreement and to submit periodic reports directly to the FHWA.
This settlement agreement is neither an admission of liability by Micheal DeMil , nor a concession by the United States that its claims are not well founded.
This case was investigated by the U.S. Attorney’s Offices for the Western District of Kentucky, Northern District of Georgia, Middle District of Georgia, Southern District of Georgia, Southern District of Indiana, and the Central District of Illinois. The matter was prosecuted by Assistant United States Attorney Benjamin S. Schecter in the Western District of Kentucky, Trial Attorney Kelley Hauser with the U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Frauds Section, and was investigated by U.S. Department of Transportation Office of Inspector General (DOT-OIG) and the Federal Highway Administration’s Office of Civil Rights.
Former FBI Special Agent Indicted for Theft of Drug Proceeds and Obstruction of JusticeRead the Press Release
A former special agent of the FBI was indicted yesterday for allegedly stealing over $100,000 of drug proceeds seized during the execution of search warrants and obstructing justice by taking steps to hide his alleged theft.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Angel D. Gunn of the Justice Department’s Office of the Inspector General’s Los Angeles Field Office made the announcement.
“As alleged, former Agent Bowman put his own greed above the trust placed in him by the FBI and the American public,” said Assistant Attorney General Caldwell. “Corrupt law enforcement agents not only compromise those investigations in which they are involved, but also damage the reputations of fellow law enforcement officers who are dedicated to public service and the protection of all Americans.”
Scott M. Bowman, 44, of Moreno Valley, California, was charged in the Central District of California with three counts of conversion of property by a federal employee, three counts of obstruction of justice, two counts of money laundering, one count of falsification of records and one count of witness tampering.
According to allegations in the indictment, which was unsealed today, Bowman misappropriated over $100,000 of drug proceeds seized in June and August 2014 during the execution of three search warrants. The defendant allegedly misappropriated these funds after they were transferred to his custody in his official capacity as a federal law enforcement officer.
The indictment alleges that Bowman used the stolen money for his own purposes, including spending $43,850 in cash to purchase a 2012 Dodge Challenger coupe, $27,500 in cash to purchase a 2013 Toyota Scion FR-S coupe and approximately $26,612 in cash to outfit these vehicles with new equipment including speakers, rims and tires. According to the allegations in the indictment, the defendant also used approximately $15,000 of the misappropriated cash to pay for cosmetic surgery for his spouse, and opened a checking account into which he deposited approximately $10,665 of the stolen funds, a portion of which he used to pay for a weekend stay at a luxury hotel, casino and resort in Las Vegas, Nevada.
According to the indictment, to conceal his misappropriation of the drug proceeds, Bowman allegedly falsified official FBI reports and other records. Specifically, in connection with one of the seizures, Bowman allegedly endorsed an evidence receipt knowing that it did not accurately reflect the amount of cash seized and altered the same receipt by forging the signature of a police detective next to his own.
The indictment further alleges that Bowman made false representations to his colleagues regarding the disposition of certain seized drug proceeds. In addition, Bowman allegedly sent an email to the detective whose signature Bowman had forged setting forth a detailed cover story that the detective should offer if asked about Bowman’s activities with respect to the seized drug proceeds. According to the indictment, Bowman also allegedly provided the detective with a copy of the forged receipt so that the detective falsely could claim the forged signature as his own, if asked.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
This case was investigated by the Department of Justice Office of the Inspector General and is being prosecuted by Trial Attorneys Robert J. Heberle and Lauren Bell of the Criminal Division’s Public Integrity Section.
Bowman Indictment
Former Deputy Constable Pleads Guilty to Alien SmugglingRead the Press Release
CORPUS CHRISTI, Texas – A former Cameron County Deputy Constable has entered a plea of guilty to transporting illegal aliens, announced U.S. Attorney Kenneth Magidson.
Luis Enrique Guevara, 44, of Brownsville, entered his plea today before U.S. Magistrate Judge Jason Libby, admitting he transported three illegal aliens in a Nissan Pathfinder.
Guevara was arrested April 9, 2015, after an officer with the Robstown Police Department (RPD) stopped him for speeding as he was driving the Pathfinder north on U.S. Highway 77 through Robstown.
During the traffic stop, Guevara told the arresting officer he was a former police officer from Cameron County and a former narcotics officer with the Los Fresnos Police Department. After his arrest, Guevara told investigators he had transported illegal aliens several times prior and that he was paid $2,500 per illegal alien transported.
At the time of the arrest, Guevara was a reserve deputy constable in Cameron County. He no longer holds that position.
Guevara is scheduled to be sentenced on Sept. 10, 2015, by U.S. District Judge Nelva Gonzales Ramos. At that time, Guevara faces up to five years in prison and up to a $250,000 fine.
The charges are the result of an investigation by Homeland Security Investigations with the assistance of RPD. The case is being prosecuted by Assistant U.S. Attorney Chad W. Cowan.
Former COO of Wireless Retailer Pleads Guilty to Selling Confidential Information to Financial Services FirmRead the Press Release
BOSTON – A Connecticut executive pleaded guilty today in U.S. District Court in Boston to charges that he sold confidential business information regarding the wireless industry to an analyst at a Boston-based financial services firm.
“Today’s guilty plea confirms that the sale of confidential business information by corporate insiders – in violation of their duties to employers, business partners, customers, or shareholders – is a crime. And that is true whether the information is used to cheat the stock markets via insider trading, or for some other purpose,” said United States Attorney Carmen M. Ortiz.
“Mr. Dunham abused his position and violated his duty to his employer, customers, and shareholders by stealing business secrets for personal gain,” said Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office. “The FBI hopes this case sends a clear signal to business insiders that breaching a duty of confidentiality by misusing information will not be tolerated.”
James Dunham, 59, of Glastonbury, Conn. pleaded guilty to one count of wire fraud after being arrested and charged in February 2015. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Sept. 3, 2015.
Dunham, formerly the Chief Operating Officer (COO) of a retailer for a major provider of wireless services, had access to confidential information regarding sales, compensation, and product launches at the retailer’s 400 locations. For more than two years, Dunham had a secret consulting agreement with a financial services firm to provide confidential information in return for which he was paid $2,000 per month.
The charging document identifies seven research notes prepared and distributed by the financial services firm that include information supplied by Dunham, including information regarding the status of certain product launches, the number of new subscribers to a specific wireless provider, and sales and return information for specific smartphones. In particular, Dunham was the source for an April 11, 2013, research note in which the firm reported that returns were exceeding sales for a specific smartphone. Following distribution of that note, the stock price for the smartphone manufacturer dropped seven percent in a single day.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of the greater of $250,000, or twice the gross gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and SAC Lisi of the FBI made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission. The case is being prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit.
Former Advisory Neighborhood Commissioner Found Guilty of Hate-Based Attack of Homeless ManRead the Press Release
WASHINGTON - Robert “Leo” Dwyer, 33, of Washington, D.C., was found guilty today of a hate crime for assaulting a homeless man last summer in Northwest Washington, Acting U.S. Attorney Vincent H. Cohen, Jr. announced. At the time of the offense, the defendant was a member of the District of Columbia’s Advisory Neighborhood Commission (ANC).
“Robert Dwyer targeted this victim for assault because he was homeless,” said Acting U.S. Attorney Cohen. “This prosecution vindicates the principle that everyone in our community deserves the protection of the law. We will not tolerate this reprehensible behavior in the District of Columbia.”
Dwyer was found guilty after a two-day bench trial in the Superior Court for the District of Columbia of simple assault with a bias enhancement, based on the homelessness of the victim. The Honorable Neal E. Kravitz scheduled sentencing for Aug. 12, 2015. Dwyer faces a statutory maximum of 270 days of incarceration and a potential fine of up to $1,500.
In presenting his findings today, Judge Kravitz noted that there was no question that the crime was motivated by the defendant’s hostility toward homeless people, including the victim.
According to the government’s evidence, on July 28, 2014, at approximately 3 a.m., Dwyer was at the intersection of 17th and Corcoran Streets NW, where he stormed the area where homeless men slept and kept their property. Dwyer began throwing homeless men’s bedding and other possessions into the street, as well as dumping other belongings into nearby trash bins. He then began spraying the area with a cleaning solution, while the victim and other homeless men looked on in disbelief.
The victim, a local homeless man, then rode his bike past the defendant. Dwyer turned and sprayed the victim multiple times in the face, arms, and neck. He used a racial slur and profanity in declaring that he hated homeless people “dirtying up the streets.” He also told an eyewitness that he “hate[d] these people sleeping here.” Upon being sprayed, the victim fell off his bike, but recovered and rode his bike to the Third District police station. He immediately reported the attack to Metropolitan Police detectives, who promptly investigated. Dwyer left the scene prior to police arriving. The victim received medical attention on the scene for his injuries.
The defendant was identified by an eyewitness as being an Advisory Neighborhood Commissioner at the time for the Dupont Circle neighborhood.
In announcing the verdict, Acting U.S. Attorney Cohen commended the work of the detectives and officers who investigated the case from the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Arviette Spain, Victim/Witness Advocate Diana Lim, Criminal Investigator Durand Odom, and Legal Intern Michelle Munneke. Finally, he expressed appreciation for the work of Assistant U.S. Attorneys Geoffrey Starks and Alysa Kociuruba and Deputy Chiefs Fernando Campoamor-Sanchez and Michelle Parikh, of the Felony Major Crimes Trial Section, who investigated and prosecuted the case.
Foreign National Sentenced to 5 Years in Prison for Firearm Offense, Growing Marijuana in Mendocino National Forest, and Destruction of National LandsRead the Press Release
SACRAMENTO, Calif. — Ivan Espinoza Villafana, 25, a Mexican national, was sentenced today by United States District Judge Troy L. Nunley to five years in prison and restitution of $14,400 for possession of a firearm by an illegal alien, cultivation of marijuana, and depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, on August 19, 2014, law enforcement officers entered a marijuana cultivation site near Ice Springs in the Mendocino National Forest in Glenn County where 732 marijuana plants were growing. After seeing law enforcement approach, Villafana fled. He was apprehended and arrested at the site. At the time of his arrest, Villafana had a loaded Smith & Wesson revolver tucked in his waistband. Officers also found a rifle in the camp area of the site. Villafana has been in custody since his arrest.
Marijuana cultivation at the site caused significant natural resource damage. Irrigation piping diverted water from a nearby stream to the marijuana plants, which require approximately 6-8 gallons of water per plant per day. Law enforcement also observed numerous bags of fertilizer and pesticides, which were used to grow marijuana. A U.S. Forest Service hydrologist who surveyed the site concluded that fertilizer and pesticides impact runoff into streams and would damage water quality and harm wildlife, as animals in the National Forest are likely to ingest the pesticides and fertilizers. Further, marijuana cultivators at the site cut and cleared trees and vegetation in the National Forest to make room for marijuana plants. Repairing and rehabilitating the damage to the National Forest from this cultivation will cost the United States between $14,400 and $73,500.
This case was the product of an investigation by the United States Forest Service, Glenn County Sheriff’s Office, and California Department of Fish and Wildlife. Assistant United States Attorney Christiaan Highsmith prosecuted the case.
Federal Jury Convicts Father for Lying to FBI About Helping Fugitive Son Escape to MexicoRead the Press Release
In El Paso this afternoon, a federal jury convicted 53-year-old Victor Manuel Solis, a legal permanent resident living in Lancaster, CA, of making a false statement to El Paso FBI agents concerning an ongoing investigation and search for his son, former Los Angeles Police officer Henry Solis. That announcement was made today by Acting United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge Douglas E. Lindquist of the FBI’s El Paso Division.
Testimony presented during trial revealed that on March 16, 2015, Victor Solis willfully attempted to prevent law enforcement from locating Henry Solis by representing to FBI agents that he, alone, crossed into Mexico on March 14, 2015. Photographs released by the FBI show that Victor Solis, accompanied by Henry Solis, crossed into Juarez, Mexico, from El Paso at the Paso Del Norte Port of Entry on March 14, 2015. Henry Solis, who was recently captured in Mexico and returned to the United States, faces state charges related to his alleged involvement in a homicide in Pomona, CA, in April.
Victor Solis, who is currently on bond, faces up to five years in federal prison and a maximum $250,000 fine. Sentencing is scheduled for August 20, 2015, before United States District Judge Philip R. Martinez.
The case resulted from a joint investigation by the El Paso and Los Angeles Field Offices of the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorneys Kyle Meyers and Carlos Hermosillo.
Federal Grand Jury Indicts Texas Mexican Mafia Members in Connection with the Death of Balcones Heights Police Officer Julian PesinaRead the Press Release
In San Antonio today, federal authorities arrested 26-year-old Texas Mexican Mafia (TMM) member Jesse Santibanez without incident. A federal grand jury yesterday indicted Santibanez and fellow TMM members Jerry Idrogo, age 34, and Alfredo Cardona, age 36, in connection with the death of Balcones Heights Police Officer Julian Pesina last year announced Acting United States Attorney Richard L. Durbin, Jr. and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
The indictment, unsealed today, charges the defendants with one count of using and discharging a firearm during a crime of violence. The indictment alleges that the defendants knowingly used and discharged a firearm in relation to the murder of Pesina. On May 4, 2014, Pesina’s body was discovered in front of his business, the Notorious Ink Tattoo and Piercing Studio located on Hillcrest Drive.
Court documents allege that Pesina had claimed membership in the TMM, and was selling narcotics and paying the “dime” (the 10% street tax) to the TMM, when the TMM learned from Pesina’s Facebook page that he was a police officer. On May 4, 2014, Idrogo contacted Pesina and arranged for pickup of the “dime” outside of Pesina’s tattoo shop. Just before meeting Pesina, Idrogo dropped off Santibanez and Cardona on the side of the building. Once Pesina walked up to the car and handed Idrogo the “dime” payment money, Santibanez and Cardona shot and killed Pesina.
Santibanez remains in federal custody following his initial appearance in federal court this afternoon. Idrogo, Cardona were already in custody prior to today on related State charges. Initial appearances in federal court for Idrogo and Cardona have yet to be scheduled. Each defendant faces a mandatory minimum of ten years and up to life in federal prison upon conviction.
This indictment resulted from an investigation conducted by the FBI together with the San Antonio Police Department.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.