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Tuesday 2 June 2015
Marshall County Man Sentenced to 18 Years in Prison for Sexual Exploitation of MinorsRead the Press Release
Peoria, Ill. - Chief U.S. District Judge James E. Shadid today sentenced Brian A. Miller, 37, of Varna, Ill., to serve 18 years in federal prison, to be followed by 15 years of supervised release. Miller was convicted following a two-day bench trial, on May 20, 2014, of 22 counts of sexual exploitation of a minor. Miller has remained detained in the custody of the U.S. Marshals Service since August 2013, when he was arrested and charged in a federal criminal complaint.
Evidence the government presented during the trial demonstrated that from at least July 2011 through May 2012, on at least 22 occasions, Miller used a cell phone to take images of minors from a hole in the wall of his home while the minors were using a shower.
The charges were investigated by the U.S. Secret Service; the Marshall County Sheriff’s Office, the Peoria County Sheriff’s Office and the Bloomington Police Department. Assistant U.S. Attorney Timothy A. Bass prosecuted the case.
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 U.S. 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.
Manteca CA Man Pleads Guilty to Marijuana DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that ROBERT EDWARD LEE, age 41, of Manteca, California, pled guilty to POSSESSION WITH INTENT TO DISTRIBUTE MARIJUANA, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(D) and Title 18, United States Code, Section 2, punishable by not more than 5 years imprisonment, a fine of up to $250,000.00 or both.
The Indictment alleged that on or about November 20, 2014, in the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with the intent to distribute less than 50 kilograms of marijuana, a Schedule I controlled substance. Co-defendant NICOLAS TRINIDAD CARMONA, age 29, of Martinez, CA pled guilty May 22, 2015 to the same charge.
The charges are a result from an investigation by the U. S. Customs and Border Protection Aviation Enforcement Agency and the Drug Enforcement Agency.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence report. Sentencing will be scheduled after its completion.
Assistant United States Attorney Shannon Henson represented the United States.
Manhattan U.S. Attorney Charges Two Owners of Real Estate Investment Firm for Defrauding Investors of over $17 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Philip Bartlett, the Inspector-in-Charge of the New York Division of the U.S. Postal Inspection Service, (“USPIS”), and Shantelle P. Kitchen, Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service’s Criminal Investigation Division (“IRS”), announced today that CARLTON P. CABOT and TIMOTHY J. KROLL – the former Chief Executive Officer and Chief Operating Officer of Cabot Investment Properties LLC (“CIP”), respectively – were arrested for participating in a scheme to defraud investors in numerous CIP-sponsored real estate investments by misappropriating over $17 million to pay for personal and business expenses and covering up their fraud with manipulated financial statements. CABOT and KROLL are expected to be presented and arraigned before U.S. Magistrate Judge Henry B. Pitman later this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Carlton Cabot and Timothy Kroll conspired to defraud investors out of millions of dollars by misappropriating investor funds, in part to pay for personal luxuries, and they falsified financial statements in an attempt to cover their tracks. The investigative work of the Postal Inspection Service and the IRS put an end to the alleged scheme.”
USPIS Inspector-in-Charge Philip Bartlett said: “This is a classic case of greed overcoming honest business practices. These defendants allegedly carried out a scheme to steal from their investors and investor funded properties all to fund a well-heeled lifestyle. Postal Inspectors and their law enforcement partners have no tolerance for this behavior and will spare no resource to bring these criminals to justice.”
IRS Special Agent-in-Charge Shantelle P. Kitchen said: “The investing public should take notice that the cooperation among federal law enforcement agencies, including IRS Criminal Investigation, the Postal Inspection Service and the U.S. Attorney’s Office, offers an assurance that investment fraud schemes will be uncovered and thoroughly investigated, and that the scammers will be prosecuted.”
According to the allegations contained in the criminal complaint unsealed today in Manhattan federal court[1]:
From 2003 through 2012, CIP – which was controlled by CABOT and KROLL – sponsored and oversaw approximately 18 so-called tenants-in-common (“TIC”) securities offerings to investors located all over the United States (collectively, the “TIC Investments” and the “TIC Investors”). A TIC investment is a real estate investment in which investors collectively own a piece of commercial real estate and are entitled to receive a portion of the rental income from the property.
From 2008 through 2012, CABOT and KROLL engaged in a scheme to defraud the TIC Investors by misappropriating funds belonging to the TIC Investments and concealing their misappropriations by providing false and misleading financial reports and other information to the TIC Investors.
According to the representations in the offering prospectuses for the TIC Investments, CIP was only allowed to collect “excess” rental income from the TIC Investments – i.e., any additional money left over after the TIC Investments had paid the operating expenses for the properties and the disbursements due to the TIC Investors. Despite these representations, CABOT and KROLL repeatedly transferred money out of bank accounts belonging to the TIC Investments and into CIP bank accounts that they controlled (the “CIP Operating Accounts”) before the TIC Investments could use the funds to pay for operating expenses and disbursements to the TIC Investors. CABOT and KROLL then used these funds to pay for the following three unauthorized purposes, without the knowledge or authorization of the TIC Investors:
First, CABOT and KROLL caused millions of dollars to be transferred from the CIP Operating Accounts to the bank accounts of TIC Investments that had no available funds to cover their operating expenses and investor distributions. In this way, CABOT and KROLL were able to perpetuate the fraud scheme by propping up failing TIC Investments using funds belonging to other TIC Investments.
Second, CABOT and KROLL used the funds in the CIP Operating Accounts belonging to the TIC Investments to pay for millions of dollars of personal expenses, including expensive cars and rental apartments and private school tuitions.
Third, CABOT and KROLL used the funds in the CIP Operating Accounts belonging to the TIC Investments to pay for CIP business expenses, including an approximately $1,125,651 civil settlement to certain TIC Investors who had sued CABOT, KROLL, CIP, and a CIP subsidiary.
To conceal their misappropriation of TIC Investment funds from the TIC Investors, CABOT and KROLL provided false and misleading financial reports to the TIC Investors that intentionally hid the fact that CIP owed large sums of money to the TIC Investments. KROLL also gave false and misleading information to the TIC Investors about how the TIC Investment funds were managed in order to prevent the TIC Investors from learning the true financial status of their investment.
By in or about the end of 2012, when CIP ceased its day-to-day operations, CIP and its principals, CABOT and KROLL, owed approximately $17 million to the TIC Investments, which has never been repaid.
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For this conduct, CABOT and KROLL are each charged with the following offenses, which carry the maximum prison terms listed below:
Count
Charge
Maximum Prison Term
Count One
Conspiracy to commit securities fraud
Five years
Count Two
Conspiracy to commit wire fraud
20 years
Count Three
Conspiracy to commit money laundering
20 years
Count Four
Securities fraud
20 years
Count Five
Wire fraud
20 years
Count Six
Money laundering
20 years
Count Seven
Illegal monetary transactions
10 years
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
CABOT, 52, of Stamford, Connecticut, and KROLL, 44, of New Hope, Pennsylvania, were arrested earlier this morning at their residences.
Mr. Bharara praised the investigative work of the USPIS and the IRS.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Christian R. Everdell is in charge of the prosecution.
The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Man Pleads Guilty to Sexual ExploitationRead the Press Release
PLATTSBURGH, NEW YORK – Heath Powers, 34, of Plattsburgh, NY, pled guilty today to eleven (11) counts of production of child pornography, one (1) count of distribution of child pornography, and one (1) count of possession of child pornography announced United States Attorney Richard S. Hartunian and Federal Bureau of Investigation Special Agent-in-Charge Andrew W. Vale. Sentencing will be October 8, 2015 in Albany before United States District Judge Mae D’Agostino.
In entering his guilty plea, Powers admitted that between June through August 2014 he used a minor to engage in sexually explicit conduct and produced graphic images of that conduct. He also admitted that he possessed and distributed child pornography.
At sentencing, the defendant faces at least 15 years and up to 30 years in prison on each production of child pornography charge; at least 5 years and up to 20 years in prison on the distribution of child pornography charge; and up to 20 years in prison on the possession of child pornography charge. He also faces a fine of up to $250,000, a lifetime term of supervised release and registration as a sex offender.
The case was investigated by the Federal Bureau of Investigation. The prosecution is being handled by Assistant United States Attorney Katherine Kopita.
Man Indicted for Submitting False Information and Documents to FEMARead the Press Release
ALBANY, NEW YORK – Scott A. Clapper, Jr., 30, of Schoharie, was arraigned in U. S. District Court in Albany today before U.S. Magistrate Judge Randolph F. Treece on 13 felony counts of disaster-related fraud, announced United States Attorney Richard S. Hartunian and Edward Nasiatka, Special Agent in Charge of the Department Of Homeland Security’s Office of Inspector General, New York Field Office. The defendant was remanded to federal custody. On each count, Clapper faces a maximum imprisonment term of 30 years, a maximum fine of $250,000, a special assessment of $100, and a maximum term of supervised release of 5 years.
According to the indictment, Clapper made false statements and submitted false documents to the Federal Emergency Management Agency ("FEMA") following Hurricane Irene. At that time, the issuance of a Presidential Disaster Declaration allowed FEMA to pay benefits to residents of certain New York counties who were affected by the hurricane and qualified for benefits under FEMA policies and procedures. Clapper, in connection with his applying for and receiving these benefits, made false statements to FEMA about his monthly rent and where he was residing. The indictment also alleges he submitted fraudulent lease agreements and rent receipts to FEMA.
The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the New York Field Office of the Department Of Homeland Security’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael Barnett.
Luzerne County Couple Charged with Possession and Sale of A Stolen FirearmRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today the filing of criminal charges against James Pavlichko, age 29, and Kathryn Teter, age 28, of Nuremberg, Luzerne County, Pennsylvania. The Grand Jury sitting in Scranton returned an Indictment which charges that on April 13, 2015, in Luzerne County, Pennsylvania, Pavlichko and Teter possessed and sold a stolen handgun. The Indictment also alleges that James Pavlichko illegally possessed that same firearm while having the status of a convicted felon.
United States Attorney Peter Smith stated that the charges are the result of an investigation conducted by the Kingston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney John Gurganus is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statutes for each offense is 10 years’ imprisonment, a three year term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Louisville Man Charged with Enticement, Production and Possession of Child PornographyRead the Press Release
Thirteen-year-old alleged victim resided in Texas
Defendant is a Louisville high school teacher
LOUISVILLE, Ky. – A Louisville high school teacher and assistant coach with the school’s athletics department was arrested today and appeared before U.S. Magistrate Judge Dave Whalin, charged in a criminal complaint with violating child exploitation laws, announced Acting United States Attorney John E. Kuhn, Jr.
Patrick Newman, age 33, is charged with engaging in unlawful online communications with a 13-year-old male (“John Doe”). The two used social media applications VINE and KIK for their communications. Newman used a means or facility of interstate commerce to knowingly persuade, induce, entice or coerce John Doe to engage in sexual activity for which a person can be charged with a criminal offense. During the online communications, Newman used, persuaded, induced, enticed, or coerced a minor to engage in sexually explicit conduct for the purpose of producing any visual depiction of such conduct, knowing or having reason to know that such visual depiction would be transported or transmitted using any means or facility of interstate commerce. In addition, Newman is charged with possession of child pornography.
"At this point, the charges relate only to online activity," stated Acting U.S. Attorney John Kuhn. "Law enforcement has no information at present about criminal conduct other than online activity. These very disturbing allegations should underscore how important it is for parents to be aware of their children's internet activity. The Department of Justice is committed to our children’s safety and to prosecuting those who prey on the most vulnerable."
According to the Affidavit attached to the criminal complaint, on January 23, 2015, the National Center for Missing and Exploited Children received a CyberTip from Twitter, Inc. regarding the upload of 12 child pornography videos to VINE (a video sharing website owned by Twitter) and one image, uploaded from the same IP address in Texas, between 12-28-2014 and 12-30-2014.
Further, an investigation by a Texas Police Department revealed that a 13 year-old male had exchanged nude/sexually explicit photographs of himself with an adult male in March, 2015 using KIK messenger. John Doe further described several sexually explicit conversations with the adult male in which sexually explicit photographs and videos were traded between them. John Doe stated the adult male would instruct him to engage in various sexual acts and send videos/photos of the acts to him. John Doe stated that the individual sent him a facial picture and described the man as Caucasian, bald, with a dark beard. According to John Doe, the adult male told him he lived in Oklahoma. An investigation by Texas law enforcement revealed the IP address of the KIK account belonged to Louisville, Kentucky subscriber, defendant Patrick Newman.
A search warrant of Newman’s Louisville home was executed this morning by Homeland Security Investigations (HSI) within the Department of Homeland Security (DHS). Newman was arrested and is currently in the custody of the U.S. Marshals Service. A detention hearing is scheduled before Magistrate Judge Whalin Friday, June 5, 2015 at 1:30pm.
If convicted at trial, Newman faces a mandatory prison term of 15 years and up to and including a life sentence, and up to and including a life period of supervised release.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless and is being investigated by HSI Louisville Division of the Department of Homeland Security.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless proven guilty.
Littleton woman arrested for oil investment schemeRead the Press Release
DENVER – Jill M. Evans, age 49, of Littleton, Colorado was arrested last week on charges of wire fraud and money laundering, the United States Attorney’s Office, IRS – Criminal Investigation (IRS CI) and the Federal Bureau of Investigation (FBI) announced. Evans was indicted by a federal grand jury on May 21, 2015. The indictment remained under seal until her arrest on May 27, 2015. Evans appeared on that date in federal court where she was advised of her rights as well as the charges pending against her. She was then ordered released on May 29, 2015, by a U.S. Magistrate Judge on a 50 percent secured bond, where she needs to pay 10 percent of the bond (or $5,000).
According to the indictment, in September 2011 and continuing through May 2015, Evans devised a scheme to defraud at least eight individuals whom she solicited to invest in alleged oil transactions. Evans informed or caused others to inform potential investors that she or one of her companies, Paramount Mortgage or Evcom, had rights or agreements related to the purchase and resale of petroleum products, including diesel oil or jet fuel. She claimed that the oil deals could not be completed until certain fees or other expenses related to the deals could be paid.
Evans falsely told investors they would receive a return on their investment ranging from fifty percent to fifty times their original investment within a matter of days or weeks. She told investors that their funds would be held in an escrow account and would be fully refundable if the oil deal did not close. Evans instructed investors to transfer funds to bank accounts. Some investors’ funds were not used as represented and were also sent to personal bank accounts that Evans controlled. Of those funds transferred to personal accounts she controlled, she used those funds for her own personal expenses.
She would tell investors that oil deals were nearing successful completion and that disbursements of profits were imminent. She sent e-mails attaching fabricated court documents regarding the status of civil litigation purporting to award Evans or related parties substantial sums of money. When the oil deals failed to close, she told investors that she would be able to pay investors from these proceeds.
Furthermore, Evans concealed from investors her December 2011 criminal indictment by a State of Colorado grand jury and her subsequent March 2013 criminal conviction for theft and forgery. Evans’s bond conditions prohibited her from entering into any financial transactions in excess of $1,000, and the terms of her subsequent state sentence prohibited her from investing money, entering into any financial contracts or arrangements, and having access to or control of any funds of any individual.
Evans was charged with eight counts of wire fraud and six counts of money laundering. Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000. Money laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000. Included in the indictment is a notice of forfeiture for any property traceable to the money laundering charges alleged in the indictment.
This case was investigated by IRS – Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Anna K. Edgar.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Littleton Woman Arrested for Oil Investment SchemeRead the Press Release
DENVER – Jill M. Evans, age 49, of Littleton, Colorado was arrested last week on charges of wire fraud and money laundering, the United States Attorney’s Office, IRS – Criminal Investigation (IRS CI) and the Federal Bureau of Investigation (FBI) announced. Evans was indicted by a federal grand jury on May 21, 2015. The indictment remained under seal until her arrest on May 27, 2015. Evans appeared on that date in federal court where she was advised of her rights as well as the charges pending against her. She was then ordered released on May 29, 2015, by a U.S. Magistrate Judge on a 50 percent secured bond, where she needs to pay 10 percent of the bond (or $5,000).
According to the indictment, in September 2011 and continuing through May 2015, Evans devised a scheme to defraud at least eight individuals whom she solicited to invest in alleged oil transactions. Evans informed or caused others to inform potential investors that she or one of her companies, Paramount Mortgage or Evcom, had rights or agreements related to the purchase and resale of petroleum products, including diesel oil or jet fuel. She claimed that the oil deals could not be completed until certain fees or other expenses related to the deals could be paid.
Evans falsely told investors they would receive a return on their investment ranging from fifty percent to fifty times their original investment within a matter of days or weeks. She told investors that their funds would be held in an escrow account and would be fully refundable if the oil deal did not close. Evans instructed investors to transfer funds to bank accounts. Some investors’ funds were not used as represented and were also sent to personal bank accounts that Evans controlled. Of those funds transferred to personal accounts she controlled, she used those funds for her own personal expenses.She would tell investors that oil deals were nearing successful completion and that disbursements of profits were imminent. She sent e-mails attaching fabricated court documents regarding the status of civil litigation purporting to award Evans or related parties substantial sums of money. When the oil deals failed to close, she told investors that she would be able to pay investors from these proceeds.
Furthermore, Evans concealed from investors her December 2011 criminal indictment by a State of Colorado grand jury and her subsequent March 2013 criminal conviction for theft and forgery. Evans’s bond conditions prohibited her from entering into any financial transactions in excess of $1,000, and the terms of her subsequent state sentence prohibited her from investing money, entering into any financial contracts or arrangements, and having access to or control of any funds of any individual.
Evans was charged with eight counts of wire fraud and six counts of money laundering. Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000. Money laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000. Included in the indictment is a notice of forfeiture for any property traceable to the money laundering charges alleged in the indictment.This case was investigated by IRS – Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Anna K. Edgar.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Lawrence, Massachusetts Man Pleads Guilty to Possessing Crack Cocaine and Heroin with Intent to Sell in NashuaRead the Press Release
CONCORD – Acting United States Attorney Donald Feith announced today that Santiago Marino Reyes-Lara, a/k/a Jean Carlos Sotomayor-Venerio, 27, of Lawrence, Massachusetts pleaded guilty today to unlawful possession with the intent to distribute cocaine base (“crack”) and heroin. Reyes-Lara appeared before United States District Court Judge Paul J. Barbadoro to enter his guilty plea.
According to documents that were filed in United States District Court, Reyes-Lara was arrested in Nashua on April 22, 2014 after a vehicle he was operating was found to contain 22 grams of cocaine base (“crack”) and 6.5 grams of heroin. The drugs were hidden in a tire jack.
Reyes-Lara’s arrest was part of a long term investigation by the United States Drug Enforcement Administration’s High Intensity Drug Trafficking Area Task Force and the Nashua and Hudson, New Hampshire Police Departments into the trafficking of cocaine base (“crack”), cocaine and heroin in and around Nashua and Hudson, New Hampshire areas by Lawrence, Massachusetts-based narcotics traffickers. As a result of the four year investigation, sixteen individuals, including Reyes-Lara, were arrested, and approximately $60,000 and multiple vehicles were seized, many of which contained electronic hidden compartments to transport the narcotics into New Hampshire. Narcotics seizures included approximately 1,000 grams of cocaine, 300 grams of heroin, and 200 grams of cocaine base (“crack”).
"Our office will continue to work with local, state and federal law enforcement to identify, investigate and prosecute drug traffickers," stated Acting United States Attorney Donald Feith. "This case demonstrates the excellent results that can be achieved when we combine our resources to take those individuals who would profit from the sale of drugs off the streets."
A sentencing hearing has been scheduled for September 8, 2015. Reyes-Lara faces a maximum sentence of twenty years. He is subject to the advisory sentencing guidelines which will likely generate a sentencing range that is less than twenty years.
Jury Convicts Trio of Public Corruption in Connection with Charter School KickbacksRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted three people of offering and accepting kickbacks as part of a public corruption conspiracy involving a Dayton, Ohio charter school. Two defendants were public officials who ran the school and the other secured a lucrative consulting contract in exchange for bribes to school officials.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Ohio Attorney General Mike DeWine whose office oversees the Ohio Bureau of Criminal Investigation (BCI), and Ohio Auditor Dave Yost announced the verdicts reached today which was returned following a trial that began on May 18, 2015 before U.S. District Judge Algernon L. Marbley.
The jury convicted Shane K. Floyd, 42, Strongsville, Ohio, who served as superintendent of Arise, Arise board chairman Christopher D. Martin, 44, Springfield, Ohio, and Carl L. Robinson, 47, Durham, North Carolina, who operated an educational consulting business called Global Educational Consultants.
According to court testimony, Floyd and Martin solicited and accepted bribes from Robinson in exchange for awarding a lucrative, unbid consulting contract to Global. Arise paid Global $420,919 over 15 months starting in September 2008 at a time when Arise was in a financial crisis unable to pay other vendors and teachers pay and benefits were cut. In exchange for the consulting contract, Robinson paid Floyd and Martin large amounts of cash and other benefits, like an all-expense -paid Las Vegas trip taken by Martin.
All three were convicted of conspiracy, a crime punishable by up to five years in prison, and with federal programs bribery, which is punishable by up to 10 years in prison. In addition, Floyd and Martin were each convicted of one count of making false statements to the FBI, punishable by up to five years imprisonment.
The trio also faces a $420,919 forfeiture, which represents the amount of money derived from the crimes.
A co-defendant, Kristal N. Screven, also known as Kristal Allen, of Dayton, Ohio admitted her role as an Arise board chairman who was bribed by pleading guilty to conspiracy to commit federal programs bribery on May 8, 2015, before U.S. District Judge Marbley.
Arise! Academy was an Ohio Community School, commonly known as a charter school, which operated with federal funds provided through the state of Ohio.
U.S. Attorney Stewart commended the investigation by Special Agents of the FBI and Ohio BCI, who are a part of the FBI’s Public Corruption Task Force, as well as Assistant United States Attorneys Doug Squires and Peter Glenn-Applegate and Special Assistant United States Attorney Kim Robinson, who prosecuted the case.
Jackson Resident Sentenced to Prison for Firearms and Drug TraffickingRead the Press Release
Jackson, Miss – Edward Donnell Ammons, 34, of Jackson, was sentenced by U.S. District Judge Carlton W. Reeves to 188 months in prison for conspiracy to distribute over 100 grams of heroin and 188 months in prison for firearms offenses, announced U.S. Attorney Gregory K. Davis. The sentences will be served concurrently.
Ammons distributed heroin on Earle Street in Jackson, Mississippi, to numerous residents of the Jackson Metro Area. At the time of his arrest, he was found in possession of over 100 grams of heroin and 11 firearms including pistols and assault rifles.
"Thanks to the dedication and hard work of several state and federal law enforcement agencies, another dangerous criminal has been brought to justice," said U.S. Attorney Gregory Davis. "The lethal combination of guns and drugs has no place in society. We will continue to seek out and prosecute those who bring drugs and guns into our Mississippi communities."
This case was investigated by the High Intensity Drug Trafficking Area Task Force headed by the Drug Enforcement Administration with the valuable assistance of the Mississippi Bureau of Narcotics and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Deputy Criminal Chief Darren J. LaMarca.
Interpol: Islamic State Group Gains Support in Africa, AsiaRead the Press Release
United Nations (AP) -- A growing number of extremist groups from Africa to southeast Asia are shifting their allegiance to the Islamic State group, leading to greater risks for "cross-pollination" among conflicts beyond Syria and Iraq, the head of Interpol said Friday.
Jurgen Stock cited this shift as an emerging trend at a U.N. Security Council meeting along with changing travel methods being used by foreign fighters seeking to join groups like the Islamic State and al-Qaida.
Stock was a keynote speaker at a meeting attended by half a dozen ministers including U.S. Secretary of Homeland Security Jeh Johnson to assess progress in implementing a U.S.-sponsored resolution adopted last September requiring all countries to prevent the recruitment and transport of would-be foreign fighters preparing to join extremist groups.
Johnson said the United States will be developing a new passenger data-screening and analysis system within the next 12 months which will be made available to the international community at no cost for both commercial and government organizations to use.
In a report obtained by The Associated Press on April 1, the panel of experts monitoring U.N. sanctions against al-Qaida said the number of fighters leaving home to join al-Qaida and the Islamic State group in Iraq, Syria and other countries has spiked to more than 25,000 from over 100 nations. The panel said its analysis indicated the number of "foreign terrorist fighters" worldwide increased by 71 percent between mid-2014 and March 2015.
Secretary-General Ban Ki-moon said most are young men motivated by extremist ideologies but he called for an examination of the reasons why more women and girls are joining the groups as well. He said he plans to present a plan of action to prevent violent extremism to the General Assembly later this year.
Humane Law Enforcement Awards Presented for Georgia Dog Fighting CaseRead the Press Release
The Humane Society of the United States presented 2014 Humane Law Enforcement Awards to the federal, state, and local agencies responsible for a successful dogfighting case that resulted in the rescue of more than 140 dogs in Georgia. After a four-year long investigation, seven individuals have been prosecuted in connection to the “229 Boys Kennel Club, Inc.” who bred, purchased, sold, and trained American Pit Bull Terriers for the purpose of dogfight gambling.
A special awards ceremony took place June 2, 2015 at the United States Attorney’s Office in the Middle District of Georgia in honor of the cooperative agencies that brought the individuals to justice: the Georgia Bureau of Investigation, Sylvester and Americus Field Offices; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Department of Agriculture Office of Inspector General; the U.S. Marshals Service; and the Albany Police Department. Assistant United States Attorney Julia C. Bowen prosecuted the case on behalf of the Government.
“People who breed animals simply for the sport of killing them show a lack of conscience that is shocking,” United States Attorney Michael Moore said. “These people literally gamble in the flesh and blood of man’s best friend. My office will continue to dismantle any organization in Middle Georgia whose primary objective is to commit criminal conduct through such cruel methods.”
The Humane Society of the United States celebrates the work of law enforcement to crack down on animal fighting, puppy mills, the illegal wildlife trade, poaching, and other forms of cruelty and abuse. Humane Law Enforcement Award recipients exemplify the best of law enforcement in protecting animals from needless violence and harm.
“The Humane Society of the United States recognizes the hard work, dedication and strength of spirit it takes to investigate and prosecute animal cruelty,” said Chris Schindler, manager of animal fighting investigations for The HSUS. “We are grateful for all the agencies who take on these cases, and we are privileged to honor those who stand out among the rest. The agencies involved in bringing down a number of dogfighters in Georgia are commended for their efforts and success.”
Georgia-Based Millard Refrigerated Services to Pay $3 Million Civil Penalty for Ammonia Release That Sickened Workers Responding to Deepwater Horizon Oil SpillRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a final settlement with Millard Refrigerated Services that resolves alleged violations of the Clean Air Act, Emergency Planning and Community Right-to-Know Act and Comprehensive Environmental Response, Compensation, and Liability Act violations for an airborne release of ammonia from Millard’s Theodore, Alabama, facility in 2010. Millard will pay a $3 million penalty for the violations that sickened 152 people responding to the BP oil spill.
“The release of ammonia from Millard's facility created significant health problems,” said Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division. “This settlement underscores how lapses in environmental management can have serious consequences, and today we are holding Millard accountable for this failure to ensure the safety of its workers and the surrounding community.”
“The Clean Air Act exists to protect all of us from preventable threats to our health and safety, such as what happened in this case,” said Keyon R. Brown, U.S. Attorney for the Southern District of Alabama. “On behalf of the citizens of our district, I commend the hard work of the EPA and the Department of Justice’s Environmental and Natural Resources Division in achieving such a significant settlement that vindicates these interests."
“EPA is serious about holding companies that threaten people’s health and safety accountable,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “It’s imperative that companies that use and store potentially-hazardous materials like ammonia ensure their operations do not pose a health risk to their employees or the public.”
On Aug. 23, 2010, the Millard Refrigerated Service warehouse in Theodore, Alabama, released approximately 32,000 pounds of anhydrous ammonia, to which exposure can be lethal, into the air after refrigeration equipment malfunctioned. The ammonia travelled directly over a site where more than 800 people were working on decontaminating ships responding to the Deepwater Horizon oil spill in the Gulf of Mexico. The Mobile, Alabama, Emergency Management Agency ordered an evacuation of the surrounding area and a one mile shelter in place situation following the ammonia release.
One hundred fifty-two people working at the site and on ships were treated for symptoms of ammonia exposure at hospitals in the Mobile area, four of whom were admitted into intensive care units. One Millard employee sustained injuries after briefly losing consciousness from ammonia inhalation.
During its investigation of the warehouse after the ammonia release, EPA discovered that Millard failed to adequately address a well-known risk for ammonia production systems called hydraulic shock, which can cause catastrophic equipment failures. These failures can lead to hazardous releases of anhydrous ammonia. The company’s failure to address this risk, in addition to other deficiencies in its production and safety systems, amounted to 37 distinct violations of the Clean Air Act’s Risk Management Program and General Duty Clause. These requirements compel companies that store or use potentially-hazardous substances like ammonia to identify the hazards posed by their operation, design and maintain a safe facility and minimize the consequences of any releases that might occur. The company’s failure to immediately report a release of anhydrous ammonia above the reportable quantity to the National Response Center amounted to one CERCLA violation. The company’s failure to immediately report a release of anhydrous ammonia to the local and state emergency planning commissions and to file a follow-up reports for two releases amounted to three EPCRA violations.
EPA also discovered that Millard had two prior smaller ammonia releases caused by hydraulic shock, which should have signaled a need to take steps to prevent a catastrophic release like the one that occurred at the Theodore warehouse. Millard sold the Theodore warehouse facility, which is no longer in operation.
The settlement was entered in the District Court in Mobile, Alabama.
To read the settlement, or for more information about the case, visit: www.justice.gov/enrd/consent-decrees
Four Individuals Indicted on Federal Charges Related to Tax Refund SchemeRead the Press Release
St. Louis, MO – Four individuals participated in a scheme to file false claims for federal tax refunds for tax years 2008 through 2011. The indictment alleges that 93 false federal income tax returns were filed by the defendants as part of a scheme which claimed approximately $335,297 in fraudulent refunds and which caused a loss to the United States government of $184,464.
"An integral part of the agency’s mission involves detecting and catching fraudulent tax refund claims," stated Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "The object of these schemes is to defraud the government and the taxpaying public."
ROMEL TOMLIN, with addresses in Grand Prairie, TX and Phoenix, AZ; TYRA TOMLIN, Phoenix, AZ; KEITH HEBB, St. Louis, MO; and JERMAINE IRONS, St. Louis, MO, were indicted by a federal grand jury Wednesday, February 18th. Each defendant was indicted on one felony count of conspiracy to commit wire fraud, three felony counts of theft of public money and four felony counts of aggravated identity theft. The indictment was suppressed until the arrest of all of the defendants. The last defendant to be arrested, Romel Tomlin, appeared for arraignment late Monday afternoon, in St. Louis.
If convicted, the wire fraud conspiracy count carries a maximum penalty of 20 years in prison and each of the theft counts carry a maximum of 10 years in prison. In addition, aggravated identity theft carries a two-year mandatory sentence of imprisonment consecutive to the other counts. All counts carry a fine up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Charles Birmingham is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Fort Myers Man Sentenced in Child Pornography Distribution CaseRead the Press Release
Fort Myers, Florida – United States District Judge John E. Steele today sentenced Warren Hamilton (59, Ft. Myers) to 10 years in federal prison for distributing and possessing child pornography. The Court also ordered him to pay a fine of $17,500, serve a life term of supervision, and register as a sex offender following his release from prison. He pleaded guilty on November 18, 2014.
According to court documents, Hamilton used Internet file sharing programs to distribute and receive child pornography. After a search warrant was executed at his residence, he was found to be in possession of approximately 345,000 child pornography images, including those of children involved in bondage. At the time of his arrest, Hamilton was employed as a computer technician in Ft. Myers.
"HSI continues to work relentlessly to protect the most vulnerable members of society, our children," said Susan L. McCormick, special agent in charge of Homeland Security Investigations (HSI) Tampa.
This case was investigated by the Florida Department of Law Enforcement and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Tama Koss Caldarone.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Real Estate Developer and Two Virginia Recruiters Plead Guilty on Eve of Trial to Mortgage Fraud SchemeRead the Press Release
BOSTON – A former realtor/developer and two out-of-state recruiters pleaded guilty yesterday to wire and bank fraud charges in connection with a multi-year, multi-property mortgage fraud scheme in Boston.
Michael David Scott, 51, of Mansfield, Mass., pleaded guilty to 32 counts of wire fraud, 13 counts of bank fraud, and 22 counts of money laundering; Jerrold Fowler, 31, and Thursa Raetz, 40, both of Norfolk, Va., pleaded guilty to two counts of wire fraud. U.S. District Court Judge Richard G. Stearns scheduled Scott’s sentencing for Aug. 26, 2015, and Fowler and Raetz’s sentencings for Sept. 2, 2015.
From September 2006 to April 2008, Scott, a former realtor and developer, arranged to purchase multi-family residences and then sold individual condominium units in the buildings to straw buyers recruited by him, Fowler and Raetz. The defendants fraudulently recruited straw buyers to purchase condominium units in Roxbury and Dorchester with promises that the buyers would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, but would share in profits when the units were resold. To obtain mortgage loans in the names of the straw buyers, Scott, Fowler, and Raetz submitted mortgage loan applications that falsely represented key information, such as the buyers’ income, personal assets, down payment, and intention to reside in the condominiums. The mortgage lenders (nine national mortgage companies and one local bank) were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closings.
The charge of bank fraud provides a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million on each count. The charge of wire fraud provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 on each count. The charge of money laundering provides a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Victor A. Wild of Ortiz’s Economic Crimes Unit and Ryan M. DiSantis of Ortiz’s Public Corruption Unit.
Former Owner of Insurance Brokerage Agency Pleads Guilty to Stealing $10 Million from AetnaRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BONNEY J. HEBERT, 59, of Killington, Vermont, waived her right to indictment and pleaded guilty today before Senior U.S. District Judge Alfred V. Covello in Hartford to wire fraud and money laundering charges stemming from her theft of more than $10 million from Hartford-based Aetna Life Insurance Company.
According to court documents and statements made in court, HEBERT was the sole owner and president of Academic Risk Resources and Insurance, LLC (“ARRI”), a risk management and insurance brokerage agency based in Boston. ARRI’s business included brokering insurance contracts between health insurance providers and colleges or universities in order to provide health insurance for students and other individuals affiliated with the college or university. In July 2007, HEBERT and ARRI began serving as the broker for a student health insurance contract entered into between Aetna and Rutgers, the State University of New Jersey. The contract between Aetna and Rutgers provided that premiums would be paid by Rutgers to ARRI and then transmitted by ARRI to Aetna.
Between 2009 and 2012, HEBERT failed to pass along to Aetna $10,358,728 in premiums paid by Rutgers. She used the stolen funds on personal expenses and to cover the business expenses of ARRI.
HEBERT pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of engaging in monetary transactions in property derived from specified unlawful activity, which carries a maximum term of imprisonment of 10 years. Judge Covello scheduled sentencing for August 27, 2015.
HEBERT disclosed her fraudulent scheme to Aetna representatives in June 2012. She subsequently sold ARRI to another business and directed that payments related to the sale be made directly to Aetna. Through these payments, HEBERT has repaid Aetna approximately $1.59 million. HEBERT also has not collected more than $900,000 in commissions owed to her by Aetna. As a result, HEBERT currently owes Aetna $7,846,305.45 in restitution.
This matter has been investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.
Former Machesney Park Man Sentenced to 8 Months in Federal Prison for Concealment of Assets from A Bankruptcy TrusteeRead the Press Release
ROCKFORD — A former Machesney Park, Ill. man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for concealing assets from a Bankruptcy Trustee. The defendant, ROBERT J. YONKEE, JR., 56, now of Lake Geneva, Wis., was sentenced to 8 months in federal prison, to be followed by 1 year of supervised release, and was ordered to a fine of $1,000.
In pleading guilty to the charge on Jan. 14, 2015, Yonkee admitted he filed a Chapter 7 Bankruptcy Petition on Sept. 15, 2008, and by signing a Declaration verified his Petition, all his Schedules, and a Statement of Financial Affairs under penalty of perjury. According to the written plea agreement, from Sept. 15, 2008 through at least May 8, 2009, Yonkee fraudulently concealed property from the bankruptcy trustee, including his ownership interest in: a business that sold auto parts, automobiles, and motorcycles; the United States Super Truck Racing Series; Bobby Yonkee Racing; as well as other inventory, merchandise, capital, vehicles, and motorcycles.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Former Executive Director of Choctaw Nation Sentenced to 144 Months, $577,000 Restitution for Theft, Money Laundering and Tax FraudRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that JASON BRENT MERIDA, age 40, of Ft. Towson, Oklahoma, and former Executive Director of Construction for the Choctaw Nation of Oklahoma was sentenced on June 1, 2015 to a total of 144 months in the Federal Bureau of Prisons (BOP) for the following crimes:
Count One: Conspiracy to Commit Theft or Bribery of Programs Receiving Federal Funds; Sentence – 60 months in BOP, 2 years supervised release (SR), $100 Special Assessment (SA)
Count Two: Theft by an Employee or Officer of a Tribal Government Receiving Federal Funds; Sentence – 120 months in BOP, 2 years SR, $100 SA
Count Three: Theft by an Employee or Officer of a Tribal Government Receiving Federal Funds; Sentence – 120 months in BOP, 2 years SR, $100 SA
Count Five: Conspiracy to Commit Money Laundering; Sentence – 24 months in BOP to run consecutively to Counts One, Two and Three, 2 years SR, $100 SA
Count Six: Tax Fraud; Sentence – 36 months in BOP, 1 year SR, $100 SA
Count Seven: Tax Fraud; Sentence – 36 months in BOP, 1 year SR, $100 SA
Merida was ordered to pay $545,000 in restitution to the Choctaw Nation of Oklahoma and $32,149 in restitution to the Internal Revenue Service. Merida was ordered to report to the Federal Bureau of Prisons no later than noon on July 13, 2015.
The charge arose from an investigation by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS). The defendant was indicted in February, 2014. The jury trial began with testimony on October 29, 2014 and concluded with closing arguments and jury deliberations on Thursday, November 20, 2014 with guilty verdicts.
The investigation of corruption at the Choctaw Nation of Oklahoma began in 2010. The primary allegations of this investigation focused on the payment of bribes from steel contractor, Builders Steel Corporation, to officials at the Choctaw Nation of Oklahoma and executives of Flintco, LLC. Flintco, LLC had been hired by the Choctaw Nation to oversee the construction of the Durant Casino and other major construction projects from 2008 through 2010.
Testimony at the trial established that Merida, the former Executive Director of Construction for the Choctaw Nation of Oklahoma, conspired to corruptly demand, solicit and receive cash, trips, a Cadillac Escalade, plumbing fixtures, cattle guards, and other things of value in excess of the $5,000 from subcontractors performing work on Choctaw Nation construction projects. The testimony also revealed Merida, in concert with others, submitted and approved false invoices from subcontractors allowing him to steal, embezzle and fraudulently convert in excess of $500,000 in funds from the Choctaw Nation of Oklahoma which were used to purchase items for Merida and others. The items included firearms, hunting equipment, hunting trips and furniture. Merida also willfully failed to report the proceeds of the fraud on his federal income taxes in 2009 and 2010.
Merida represents the eighth person to date to be convicted as part of this investigation and prosecution. Other defendants previously convicted and sentenced include:
1. Brent Alan Parsons – Brent Parsons, a former executive with Builders Steel Corporation was sentenced to 60 months in the Federal Bureau of Prisons on January 22, 2015. Brent Parsons was further ordered to pay $3,977,200.00 in restitution to the Choctaw Nation of Oklahoma.
2. Lauri Ann Parsons – Lauri Parsons, the former owner of Builders Steel Corporation was sentenced to 48 months in the Federal Bureau of Prisons. Lauri Parsons was further ordered to pay $3,535,498.24 in restitution to the Choctaw Nation of Oklahoma.
3. James Winfield Stewart – Stewart, a former executive with Scott Rice, LLC, Builders Steel Corporation and current owner of L& M Furniture was sentenced to 21 months in the Federal Bureau of Prisons on January 21, 2015. Stewart was further ordered to pay $345,000.00 in restitution to the Choctaw Nation of Oklahoma.
4. Cordell Alan Bugg – Bugg, a former executive with Flintco, LLC was sentenced to 3 years probation with 8 months home detention on January 23, 2015.
5. Robert DeWayne Gifford – Gifford, a former executive with Flintco, LLC was sentenced to 48 months in the Federal Bureau of Prisons on April 9, 2015. Gifford was further ordered to pay $345,000.00 in restitution to the Choctaw Nation of Oklahoma.
6. Jerry Mark Eshenroder – Eshenroder, a former executive with Flintco, LLC, was sentenced to 3 years probation on January 23, 2015.
7. Mark Allen Franklin – Franklin, a former executive with the Choctaw Nation of Oklahoma was sentenced to 3 years probation on February 3, 2015.
The United States Attorney for the Eastern District of Oklahoma, Mark Green, stated “The convictions of Mr. Merida and the other seven defendants are the result of a long and complicated investigation by a team of agents from the FBI and IRS. The investigation consumed hundreds of man hours and the agent’s dedication to the investigation was paramount in the successful prosecution of these individuals. The convictions and resulting sentences send a clear message to businessmen and tribal officials seeking to illegally profit at the expense of tribal members that their greed should not and will not be tolerated. My thanks go out to the investigators, the attorneys and staff who have made this prosecution successful!”
R. Damon Rowe, Special Agent-in-Charge for the IRS, stated “IRS Criminal Investigation stands by its commitment to ensure justice is brought to those who unlawfully abuse their positions of trust. The message in today’s sentencing remains clear: IRS will pursue and prosecute, to the fullest extent of the law, individuals who use corruption and coercion for personal gain. The victims in this case are not only the Citizens of the Choctaw Nation, but also the American Taxpayers who pay their fair share of taxes.”
James Finch, Special Agent-in-Charge for the FBI, stated “The FBI is committed to bringing to justice those entrusted to conduct government business, tribal or otherwise, who compromise that trust for their own personal gain. These sentences confirm there are consequences for individuals who misuse their position or seek to gain an unfair advantage with tribal government.”
The Honorable James H. Payne, Chief District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
First Assistant United States Attorney Doug Horn and Criminal Chief Chris Wilson represented the United States.
Former Buffalo Nurse Arrested and Charged with Stealing Pain Medications Intended for Patients from Local HospitalRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Leyla Samadi, formerly of Buffalo, NY, was arrested and charged by criminal complaint with illegally obtaining controlled substances by fraud. The charge carries a maximum penalty of four years in prison and a $250,000 fine.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that according to the complaint, between November 22, 2014 and January 7, 2015, the defendant tampered with pain medications Demerol and Hydromorphone while working as a registered nurse at Sisters of Charity Hospital in Buffalo.
The complaint states that Samadi, while working in her capacity as nurse, would log into a Pyxis machine which is used to automatically dispense liquid pain medications using her username and fingerprint scan. The defendant would identify the narcotic and patient it would be administered to. Samadi would remove the medication, take it to the patient, scan the patient’s wristband and scan the medication. But rather than administer the medication to the patient, the defendant would instead inject herself with the narcotic. Samadi then replaced the missing medication with saline solution and return it to the Pyxis machine. Once she returned the vile to the Pyxis machine, the defendant would cancel the transaction claiming that she had selected the wrong medication or the wrong patient.
Samadi was arrested this morning at her home in Germantown, Maryland. She will make an initial appearance today in the District of Maryland before being returned to the Western District of New York for prosecution.The complaint is the culmination of an investigation by the Food and Drug Administration, Office of Criminal Investigations, under the direction of Acting Special Agent in Charge Jeffrey Ebersole, the New York State Attorney General’s Office, under the direction of Eric T. Schneiderman, New York State Department of Health, Bureau of Narcotic Enforcement, under the direction of Joshua Vinciguerra, and the New York State Office of the Attorney General, Medicaid Fraud Control Unit, under the direction of Chief Upstate Investigator Upstate William Falk.
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.
Five Involved in Failed Land Development of Luxury Homes Sentenced to PrisonRead the Press Release
ASHEVILLE, N.C. – Five of the eleven defendants charged in connection to a scheme involving the development of Seven Falls, a golf course and luxury residential community in Henderson County, N.C. were sentenced today, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.
Acting U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); Jason Moran, Special Agent in Charge of the Federal Deposit Insurance Corporation (FDIC), Inspector General’s Office of Investigation, Atlanta office.
U.S. District Judge Martin Reidinger sentenced Avery Ted “Buck” Cashion, III, 61, of Lake Luke, N.C., to 36 months in prison, and three years of supervised release; Raymond M. “Ray” Chapman, 68, of Brevard, N.C., to 36 months in prison, and three years of supervised release; Thomas E. “Ted” Durham, Jr., former President of the failed Pisgah Community Bank, 60, of Fletcher, N.C., to 30 months in prison, and three years of supervised release; and Aaron Ollis, 68, a former licensed Real Estate Appraiser, of Arden, N.C., to two years of probation, including 12 months and 1 day home detention. Cashion, Chapman, Durham and Ollis each pleaded guilty to conspiracy to defraud the United States. The defendants were also ordered to pay restitution as follows:
Avery Ted “Buck” Cashion, III, $14,266,256.47
Raymond M. “Ray” Chapman, $14,266,256.47
Thomas E. “Ted” Durham, $ 6,237,453.37
Aaron Ollis, $10,199,106.87
George M. Gabler, age 60, of Fletcher, N.C., was convicted of one count of willfully failing to report misconduct associated with two Seven Falls lot loans in March 2010. In court documents, Gabler admitted that he withheld documents from a federal grand jury knowing that they were related to fraudulent loans taken out on behalf of conspirator Keith Vinson. For this offense, Gabler, a former Certified Public Accountant, was sentenced to two years of probation, including 500 hours of community service and a $5,000 fine.
Keith Vinson, was convicted at trial in October 2013 of conspiracy, bank fraud, wire fraud, and money laundering conspiracy. He is scheduled to be sentenced on June 25, 2015 in Asheville, N.C.
According to court documents filed in the case, trial evidence and statements made in court during the sentencing hearings:
Beginning in 2008, the defendants conspired and obtained money from several banks through a series of straw borrower transactions, in order to funnel monies to Vinson and his failing development of Seven Falls, a golf course and luxury residential community in Henderson County, N.C. A straw borrower is an individual whose name appears on a loan and on the books and records of a bank as the beneficiary of a loan, but whose name is substituted for that of the true borrower and does not in fact receive the benefits of the loan. Lending institutions cannot properly assess the risk of making such loans as they do not know the true circumstances of the loans or the creditworthiness of the true borrowers. The co-conspirators devised this scheme in order to funnel monies to Vinson and his failing development of Seven Falls.
In order to advance this scheme Vinson, Chapman, Cashion and others recruited local bank officials including George Gordon “Buddy” Greenwood and Ted Durham, who at the time were, respectively President of the Bank of Asheville and the President of Pisgah Community Bank. When bank officials realized that they had reached their legal lending limits with respect to some of the straw borrowers, additional straw borrowers were recruited to the scheme and more straw borrower loans were made to them. Additional straw borrower loans were also necessary to keep loans current, a scheme known as “loan kiting.” The loan kiting scheme became necessary when conspirators were unable to make payments on loans made early in the scheme. Seven Falls and another luxury residential golf development by Vinson named “Queens Gap” failed resulting in millions in property losses. In addition, both the Bank of Asheville and Pisgah Community Bank failed and were taken over by the FDIC.
Previously, Buddy Greenwood was sentenced to 42 months in prison; Nicholas Dimitris was sentenced to 12 months plus one day in prison; the former Pisgah Community Bank Chief Credit Officer, Robert Craig Gourlay was sentenced to 15 months in prison; David G. Smith, who worked as a loan officer for Pisgah Community Bank was sentenced to nine months in prison, and Andrew Hager was sentenced to eight months in prison in connection with the Seven Falls scheme.
The investigation was being jointly handled by the FBI, IRS-CI, and FDIC-OIG. Assistant U.S. Attorneys Don Gast and Michael Savage are in charge of the prosecution.
Fayetteville Man Sentenced to over 8 Years in Federal Prison for Felon in Possession of Firearm ViolationRead the Press Release
Fayetteville, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that James VanValkenberg, age 22, of Fayetteville, Arkansas, was sentenced today to 100 months in federal prison followed by three years of supervised release on one count of being a Felon in Possession of a Firearm. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
U.S. Attorney Eldridge commented, “This defendant, a convicted felon, was in possession of a loaded handgun and fleeing from law enforcement near a busy intersection when he was taken into custody. Felons in possession of firearms pose a serious threat of harm to police officers and citizens in our communities. Our office, along with our partners in law enforcement, will continue to investigate and aggressively prosecute these types of cases in order to keep communities throughout the Western District of Arkansas safe from senseless violence.”
According to court records, on November 5, 2014, patrol officers with the Fayetteville Police Department heard a vehicle collision and went to investigate. As the officers approached the scene, they observed VanValkenberg digging around inside of his vehicle. Once VanValkenberg saw the officers, he began walking away from the scene of the accident. Officers gave VanValkenberg repeated verbal commands to stop; however, VanValkenberg quickly fled from the officers and the accident scene. The officers pursued VanValkenberg on foot, and after tasing him twice, were able to catch and subdue him. Once the officers were able to take him into custody, VanValkenberg was found to be in possession of a loaded firearm, specifically a Beretta .25 caliber pistol. The Beretta in VanValkenberg’s possession was determined to have been manufactured outside the state of Arkansas. VanValkenberg has five prior felony convictions, and is therefore prohibited from possessing firearms. On February 4, 2015, VanValkenberg pleaded guilty to one count of being a Felon in Possession of a Firearm.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Fayetteville Police Department. Assistant United States Attorney David Harris prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Dominican Man Guilty of Illegally Reentering the United States After Previous DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE –Ruberky Antonio Romero-Mejia, 37, of the Dominican Republic, pled guilty on May 29, 2015 to a one-count indictment charging him with illegally reentering the United States after having been previously deported, announced Acting United States Attorney Donald Feith. As part of the United States Attorney’s Office for the District of New Hampshire’s fast track program, Romero-Mejia was sentenced to time served and immediately turned over to immigration officials for deportation. Romero-Mejia had been incarcerated since his arrest by immigration officials.
On February 11, 2015, the New Hampshire State Police contacted agents of the Department of Homeland Security concerning an individual who was trying to obtain a New Hampshire identification card under the name Joel Salome-Ortiz. Salome-Ortiz presented altered and inconsistent documents at the Salem office of the Department of Motor Vehicles in support of his attempt to obtain the identification card. Salome-Ortiz was interviewed by immigration officials and agreed to provide a set of digital fingerprints. The digital fingerprints did not match any individual in the DHS’s database and DHS agents noticed that Salome-Ortiz’s fingers appeared to have been scarred and the skin re-sewn. Salome-Ortiz was arrested by state officials on unsworn falsification and tampering with public records charges. The following day, DHS agents obtained a set of inked fingerprints from Salome-Ortiz and they were matched to Ruberky Antonio Romero-Mejia after analysis by DHS lab personnel who specialize in analyzing altered fingertips. Romero-Mejia had been previously deported in March 2010.
The case was investigated by the New Hampshire State Police and agents of the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement. Assistant U.S. Attorney Alfred Rubega prosecuted this case.
Dias Kadyrbayev Sentenced to Six Years for Impeding the Boston Marathon Bombing InvestigationRead the Press Release
BOSTON – Dias Kadyrbayev, 21, a close friend of convicted Boston Marathon bomber, Dzhokhar Tsarnaev, was sentenced today to six years in prison for his role in retrieving, and later disposing of, evidence in the Boston Marathon bombing investigation, specifically Dzhokhar Tsarnaev’s backpack, containing fireworks and other items, as well as his role in concealing Tsarnaev’s laptop computer from law enforcement.Kadyrbayev previously pleaded guilty to conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation.
Kadyrbayev has agreed to be deported to Kazakhstan from the United States after serving his sentence. At the time of his arrest, Kadyrbayev was in the United States on a revoked student visa while attending the University of Massachusetts Dartmouth (UMass).
“The concealment and destruction of evidence can have profound effects on the course of an investigation,” said U.S. Attorney Carmen Ortiz. “Mr. Kadyrbayev knowingly concealed and disposed of critical evidence relating to the Boston Marathon bombing. He now faces the consequences of those actions – six years in federal prison, with deportation to follow.”
On the evening of April 18, 2013, after Kadyrbayev viewed images of the Boston Marathon bombers released to the public, he exchanged text messages with Dzhokhar Tsarnaev. Later that evening, Kadyrbayev, Azamat Tazhayakov and Robel Philipos entered Dzhokhar Tsarnaev’s dormitory room at UMass. Kadyrbayev removed Tsarnaev’s laptop and a backpack containing fireworks, a jar of Vaseline, and a thumb drive. The fireworks appeared to have been opened and manipulated, and some of the explosive powder appeared to have been removed.
After returning to their apartment on the evening of April 18, 2013, and during the morning of April 19, 2013, Kadyrbayev and Tazhayakov watched television news reports and read Internet news articles about the bombing investigation and the manhunt for the two Boston Marathon bombers, whom they believed were Dzhokhar and Tamerlan Tsarnaev. During the early morning hours of April 19, 2013, Kadyrbayev and Tazhayakov agreed that they should get rid of Tsarnaev’s backpack. Kadyrbayev placed the backpack and its contents, including the fireworks, into a large black trash bag and threw the entire bag into the garbage dumpster in his apartment complex. After discarding the backpack in the garbage, Kadyrbayev decided to keep Tsarnaev’s laptop computer and continued to conceal it. He did not attempt to return it to Tsarnaev’s dormitory room, nor did he notify law enforcement that he had Tsarnaev’s computer.
On April 26, 2013, after a two-day search, federal agents found Tsarnaev’s backpack in a New Bedford landfill. Although it was found, the condition of the backpack and its contents had been altered by the actions of Kadyrbayev and Tazhayakov.
In July 2014, Azamat Tazhayakov, 21, was found guilty by a federal jury in Boston of conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation. Sentencing is scheduled for June 5, 2015 at 9:00 a.m. Robel Phillipos, 21, was found guilty in October 2014 of two counts of making false statements to law enforcement in a terrorism investigation, and will also be sentenced on June 5th at 2:00 p.m.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division, made the announcement today. This investigation was conducted by the FBI’s Boston Division and member agencies of the Boston Joint Terrorism Task Force (JTTF) which is comprised of more than 30 federal, state and local enforcement agencies. Homeland Security Investigations in Boston, Massachusetts State Police, University of Massachusetts Dartmouth Department of Public Safety, New Bedford Police Department, Dartmouth Police Department, U.S. Department of Transportation – Office of Inspector General, U.S. Treasury Inspector General for Tax Administration (TIGTA), Essex County Sheriff’s Office, and Internal Revenue Service’s Criminal Investigations in Boston, provided assistance with this investigation.
The case was prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit.
Denver gang member indicted for being a felon in possession of a firearm and ammunitionRead the Press Release
DENVER – Ronald Odean Bryant, age 22, of Denver, Colorado, has been indicted on May 20, 2015 by a federal grand jury in Denver on charges of being a felon in possession of a firearm and being a felon in possession of ammunition, U.S. Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Division Special Agent in Charge Luke Franey announced. Prior to the indictment, Bryant was charged by Criminal Complaint on May 15, 2015. On May 29, 2015 the court ordered that both the original Complaint and the formal charging document, the indictment, be unsealed. The defendant is currently in state custody on unrelated charges. No date has yet been set for when Bryant will be brought to federal court for his initial appearance.
According to court documents, including the original affidavit in support of the Criminal Complaint, on May 11, 2015, at approximately 11:30 p.m. uniformed officers in a marked Denver Police Department patrol vehicle noticed a gold in color Range Rover, with severe damage, including a heavily damaged windshield, damage to the headlight/bumper area, with the turn signals not appearing to work. The break light on the driver’s side was not functioning either. The car was pulled over by the Denver Police patrol vehicle near the intersection of East Bruce Randolph and North York Street.
When the officers approached the car they observed a female driver, a male sitting in the front passenger seat, and two females in the back seat. Each individual provided their identification information. When the officers checked the information, they determined that one of the females, and the male, now identified as Bryant, provided false information. As officers approached the vehicle to discuss the false information the car started to move forward as if it was about to flee. The driver stopped the car after being ordered by an officer to stop. Bryant was then observed to have his hands in his lap, concealed by a leather jacket. He was asked to step out of the car. When he complied, he dropped a plastic baggie of what appeared to be narcotics. It was later determined that the baggie contained methamphetamine.
As Bryant was about to be frisked he fled on foot. Officers gave chase, but did not immediately capture him. The Denver Police Department established a perimeter, and summoned a Police K-9 to the scene. Once the K-9 arrived and the area within the perimeter was searched, Bryant was apprehended without incident. When searched subsequent to arrest a round of ammunition was found in Bryant’s pocket. An inventory search of the vehicle Bryant was in revealed a Ruger .22 caliber pistol loaded with 7 rounds of ammunition. This firearm was located under the rear seat. A small revolver was also located, loaded with one round, in a beer box in the vehicle. Additional investigation determined that one of the females in the vehicle had purchased the Ruger pistol for Bryant several days earlier.
On May 14, 2015, agents and officers reviewed Bryant’s criminal history. Anyone with a felony criminal conviction is prohibited by both federal and state law of possessing a firearm or ammunition. Bryant has been identified as a CMG Blood. He has a prior conviction in Denver District Court for possession of a Schedule II Controlled Substance. Bryant is currently on probation in that case.
Bryant has been charged with one count of being a felon in possession of firearm or ammunition, and one count of being a felon in possession of ammunition. If convicted, the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine on each of the two total counts.
“This case is an example of the close partnership between the Department of Justice, the ATF and the Denver Police Department to combat gun violence on our streets,” said U.S. Attorney John Walsh. “Working together with all levels of law enforcement and the community itself, we are making significant progress in those efforts, and will continue to move forward effectively.”
“ATF and our partners will continue to pursue felons who possess firearms and endanger members of the community,” said ATF Denver Division Special Agent in Charge Luke Franey.
Denver Police Chief Robert White said: “The significant arrest of an individual like Ronald Bryant goes a long way toward making our community safer and addressing violent crime. With zero tolerance for violent crime and a collaborative effort between law enforcement and the community, we can make communities safer and Denver a better place to live.”
This case was investigated by Denver Police Department and the ATF, as part of Project Safe Neighborhood, an initiative which includes the Denver, Aurora and Lakewood Police Departments working in concert with the ATF and the U.S. Attorney’s Office.
The defendant is being prosecuted by Assistant U.S. Attorney Peter McNeilly.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Denver Gang Member Indicted for Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
DENVER – Ronald Odean Bryant, age 22, of Denver, Colorado, has been indicted on May 20, 2015 by a federal grand jury in Denver on charges of being a felon in possession of a firearm and being a felon in possession of ammunition, U.S. Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Division Special Agent in Charge Luke Franey announced. Prior to the indictment, Bryant was charged by Criminal Complaint on May 15, 2015. On May 29, 2015 the court ordered that both the original Complaint and the formal charging document, the indictment, be unsealed. The defendant is currently in state custody on unrelated charges. No date has yet been set for when Bryant will be brought to federal court for his initial appearance.
According to court documents, including the original affidavit in support of the Criminal Complaint, on May 11, 2015, at approximately 11:30 p.m. uniformed officers in a marked Denver Police Department patrol vehicle noticed a gold in color Range Rover, with severe damage, including a heavily damaged windshield, damage to the headlight/bumper area, with the turn signals not appearing to work. The break light on the driver’s side was not functioning either. The car was pulled over by the Denver Police patrol vehicle near the intersection of East Bruce Randolph and North York Street.
When the officers approached the car they observed a female driver, a male sitting in the front passenger seat, and two females in the back seat. Each individual provided their identification information. When the officers checked the information, they determined that one of the females, and the male, now identified as Bryant, provided false information. As officers approached the vehicle to discuss the false information the car started to move forward as if it was about to flee. The driver stopped the car after being ordered by an officer to stop. Bryant was then observed to have his hands in his lap, concealed by a leather jacket. He was asked to step out of the car. When he complied, he dropped a plastic baggie of what appeared to be narcotics. It was later determined that the baggie contained methamphetamine.
As Bryant was about to be frisked he fled on foot. Officers gave chase, but did not immediately capture him. The Denver Police Department established a perimeter, and summoned a Police K-9 to the scene. Once the K-9 arrived and the area within the perimeter was searched, Bryant was apprehended without incident. When searched subsequent to arrest a round of ammunition was found in Bryant’s pocket. An inventory search of the vehicle Bryant was in revealed a Ruger .22 caliber pistol loaded with 7 rounds of ammunition. This firearm was located under the rear seat. A small revolver was also located, loaded with one round, in a beer box in the vehicle. Additional investigation determined that one of the females in the vehicle had purchased the Ruger pistol for Bryant several days earlier.
On May 14, 2015, agents and officers reviewed Bryant’s criminal history. Anyone with a felony criminal conviction is prohibited by both federal and state law of possessing a firearm or ammunition. Bryant has been identified as a CMG Blood. He has a prior conviction in Denver District Court for possession of a Schedule II Controlled Substance. Bryant is currently on probation in that case.
Bryant has been charged with one count of being a felon in possession of firearm or ammunition, and one count of being a felon in possession of ammunition. If convicted, the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine on each of the two total counts.
“This case is an example of the close partnership between the Department of Justice, the ATF and the Denver Police Department to combat gun violence on our streets,” said U.S. Attorney John Walsh. “Working together with all levels of law enforcement and the community itself, we are making significant progress in those efforts, and will continue to move forward effectively.”
“ATF and our partners will continue to pursue felons who possess firearms and endanger members of the community,” said ATF Denver Division Special Agent in Charge Luke Franey.
Denver Police Chief Robert White said: “The significant arrest of an individual like Ronald Bryant goes a long way toward making our community safer and addressing violent crime. With zero tolerance for violent crime and a collaborative effort between law enforcement and the community, we can make communities safer and Denver a better place to live.”
This case was investigated by Denver Police Department and the ATF, as part of Project Safe Neighborhood, an initiative which includes the Denver, Aurora and Lakewood Police Departments working in concert with the ATF and the U.S. Attorney’s Office.
The defendant is being prosecuted by Assistant U.S. Attorney Peter McNeilly.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
Day Trading Broker Steals More Than $6 Million from Investors in Long Running Ponzi SchemeRead the Press Release
SAN DIEGO – Stock broker Sunil Sharma of Carlsbad pleaded guilty in federal court today, admitting that he stole more than $6 million from local investors by falsely claiming their funds were safe through conservative investments when, in reality, he was pursuing a risky day trading strategy that ultimately turned into a massive Ponzi scheme.
According to his plea agreement, Sharma covered up the massive losses by continuing to falsely tell investors that their investments were doing well. He would send his investors monthly or quarterly statements that falsely reflected that their investments were generating the promised returns. Sharma admitted that even while reassuring investors, he diverted approximately $2.5 million in investor funds for his own personal use, including: (1) approximately $700,000 towards the down payment of a $2 million home off Artesian Road in San Diego; (2) approximately $12,000 for a cruise in the Mediterranean; and (3) for leasing a Mercedes SL and a BMW.
As revealed in court documents, Sharma was a Series 7 licensed broker, who had worked for Merrill Lynch, AG Edwards, and as an independent broker for Raymond James. In 2000, Sharma moved to San Diego where he continued to practice as an independent broker. Due to the market crash that followed September 11, 2001, Sharma and his clients lost a substantial amount of money. As a result, Sharma voluntarily gave up his license to act as a securities broker.
After relinquishing his broker’s license, Sharma began to work in the insurance industry. In 2002, Sharma sold insurance from his business in Rancho Bernardo. He also began teaching seminars highlighting various types of insurance and annuities which could be purchased by his clients.
In 2007, Sharma attended an “Investools” workshop that convinced him that he could make money trading stock options in a conservative manner. After attending the workshop, he set up Gold Coast Holding, LLC (“Gold Coast”) as a vehicle to trade options. Sharma initially funded Gold Coast with approximately $50,000 of his own money that he had made selling insurance. Utilizing a bull and bear spread analysis, Sharma experienced “beginners luck” and began generating profits of more than 10% on his investment by late 2007.
Due to the fact that his insurance clients were making very little money on their personal investments due to low interest rates, Sharma believed that they could make a better return (somewhere in the “neighborhood” of 5%-6%) if he could “day trade” their money and “pocket the difference.” Recognizing that his insurance customers would not have given him money for this venture, he lied to them and falsely stated that Gold Coast was an extremely safe way to earn a monthly retirement income because their money was to be: (1) part of a diversified portfolio; (2) pooled with many other investors; (3) used to buy bonds from emerging markets in Brazil, Russia, India, and China (“BRIC”); and (4) managed by Goldman Sachs. Sharma guaranteed investors a rate of return (typically between 6%-7%) for two to three years and urged his clients to liquidate their retirement accounts and annuities based upon the safety of his investment scheme.
Although Sharma initially planned on buying BRIC bonds with half the investor funds and day trading with the other half, he never in fact purchased BRIC or any other type of bonds. Instead, Gold Coast Holding (and later a second company he established, Safe Harbor Tax Lien Acquisitions) day traded options using TDAmeritrade’s “thinkorswim” trading platform. Between January 2008 and November 2014, Sharma raised $8.36 million from 32 different clients using these two companies. In order to attract new investors, Sharma paid $2.12 million in “returns” to old clients from funds generally derived from the contribution of later investors. For example, of the approximately $3.5 million raised from investors in the first two years of day trading, Sharma – despite some early successes – was left with only about $250,000 by the end of 2009. As a result, Sharma turned Gold Coast into a classic “Ponzi scheme” by paying earlier investors their guaranteed rates of return with approximately $5 million in new funds solicited from later investors.
Prior to the investment scheme collapsing completely, Sharma stopped trading option spreads and switched over to purchasing straight “call” and “put” options. It was Sharma’s hope that adopting this new strategy would allow him to recoup all of his investment losses. Once again, however, Sharma’s strategy proved disastrous. Although he was able to make his December 2014 monthly payout to investors, he ran out of funds in January 2015.
United States Attorney Laura E. Duffy acknowledged that this Ponzi scheme was a bit harder to detect than usual as Sharma did not promise his investors outlandish returns. Nevertheless, she warned all investors to ensure that individuals soliciting money have appropriate licenses and audited financial statements. “All investors – especially when they are dealing with their retirement savings – must exercise due caution before turning over money even to long-time friends or else what appears to be a safe harbor might turn into a ship wreck.”
FBI Special Agent in Charge Eric S. Birnbaum commented, “Mr. Sharma's short term gains have resulted in long term losses for his victims. This case serves as a reminder to ask questions and conduct your own due diligence before investing your hard earned money with any broker or investment fund.” The defendant is scheduled to be sentenced by U.S. District Judge John A. Houston on August 24, 2015 at 8:30 a.m.
DEFENDANTS Case Number: 15cr1396 Sunil Sharma Age: 68 Carlsbad, California CHARGESWire Fraud, in violation of 18 U.S.C. § 1343.
INVESTIGATING AGENCIES
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, restitution.Federal Bureau of Investigation
Cuero Man Gets Max Sentence for Possession of Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – George Deleon, 65, of Cuero, has been sentenced for possession of child pornography, announced U.S. Attorney Kenneth Magidson. He pleaded guilty March 2, 2015.
Late yesterday, he received a sentence of 120 months in federal prison, the statutory maximum, to be immediately followed by 15 years of supervised release.
On May 1, 2013, authorities learned of an allegation of sexual assault involving Deleon and a child victim. Deleon admitted to sexually assaulting the victim, at which time authorities received consent from Deleon to search his cellular telephone. A forensic examination of that phone led to the discovery of 96 images of children involved in sexual explicit conduct.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges against Deleon was the result of an investigation conducted by Homeland Security Investigations and Cuero Police Department.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Conspirators Indicted for Fraudulently Obtaining $1 Million in Vehicle LoansRead the Press Release
Greenbelt, Maryland – A federal grand jury has indicted the following defendants on charges arising from a bank fraud scheme:
Brian Edward Diggs, a/k/a “Bryan Diggs” and “Big Poppa,” age 43, of Brandywine, Maryland;
Patricia Yvonne Diggs, a/k/a “Patricia Yvonne Johnson,” and “Patricia Yvonne Holmes,” age 48, of Brandywine Maryland;
Rechelle Deborjah Fowler, a/k/a “Rechelle Fowler-Jones,” and “Daisy Fowler,” age 45, of Waldorf, Maryland;
Brian Dominique Wilson, age 23, of Brandywine;
Robert Anthony Fitzgerald Lathan, age 37, of Accokeek, Maryland; and
Derrick Kwan Byas, Jr., age 26, of Baltimore.The indictment was returned on April 29, 2015 and partially unsealed today upon the arrests of four defendants.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief Mark A. Magaw of the Prince George’s County Police Department.
“The defendants allegedly submitted fake documents and false information to obtain car loans, defrauding lenders of more than $1 million,” said U.S. Attorney Rod J. Rosenstein. “The defendants also allegedly agreed to sell vehicles to other people and took their money but did not provide the cars. The charge of ‘aggravated identity theft” – using someone else’s identity to commit a crime – carries a mandatory sentence of two years in federal prison, in addition to the penalty for the fraud offense.”
Brian Diggs owned Big Boi Auto Sales LLC, Showcase Auto Sales, Inc., Car Wiz, Inc. and Auto Dupo of Waldorf LLC. Robert Lathan owned Total Computer Solutions, Inc.
According to the two count indictment, from January 2009 to April 29, 2015, the defendants and others created shell entities purporting to be legitimate businesses, including the businesses identified above. The defendants applied for vehicle loans with financial institutions and lenders using false information as to employment history at the shell entities, addresses, dates of birth and social security numbers. They created and submitted fake documents, such as lien releases, utility bills, paystubs, letters of recommendation and a police report. The defendants often applied for vehicle loans on the same vehicle with different lenders. They sold the vehicles, obtained money from the sales and then did not provide the vehicles to the buyers. They deposited the loan funds into bank accounts and cashed loan checks at liquor stores. The defendants failed to pay the vehicle loans, which often resulted in the vehicles being repossessed by the lenders.
As a result of the scheme, the lenders lost over $1 million.
The defendants face a maximum sentence of 30 years in prison for conspiring to commit bank fraud and a mandatory minimum of two years in prison for aggravated identity theft consecutive to any other sentence. An initial appearance was held today for Fowler, Wilson and Lathan in U.S. District Court in Greenbelt and they were released under the supervision of U.S. Pretrial Services. Patricia Diggs also had an initial appearance today and was detained pending a detention hearing on Thursday, June 4, 2015. Byas remains detained on state charges. Brian Diggs is expected to have an initial appearance on June 3, 2015.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and the Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Thomas P. Windom and Joseph R. Baldwin, who are prosecuting the case.
Clarks Green Woman Charged with Two Bank RobberiesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Lisa Alexis Jury, age 47, of Clarks Green, Pennsylvania, has been indicted by a federal grand jury in Scranton on charges of armed bank robbery.
Lisa Alexis Jury was charged with the robbery of:
Peoples Bank, Clarks Summit, Pennsylvania, on October 30, 2014;
P&G Federal Credit Union, Eynon, Pennsylvania, on May 19, 2015.
According to U.S. Attorney Peter Smith, the robberies were investigated by the Federal Bureau of Investigation (FBI), the Pennsylvania State Police, with the assistance of the South Abington Township Police Department and the Archbald Police.
The maximum penalty under the federal statute for each count of armed bank robbery is 25 years’ imprisonment. Jury also faces a term of supervised release following imprisonment, and a fine if convicted. She is in custody.
Prosecution of this case is assigned to Assistant U.S. Attorney John Gurganus.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Chesapeake Man Sentenced to 20 Years in Prison for Drug ConspiracyRead the Press Release
NORFOLK, Va. – German Alvarado Ponce, aka Herman Alvaniz, 37, of Chesapeake, Virginia, was sentenced today to 240 months in prison, followed by five of supervised release on a drug conspiracy charge.
Ponce and five co-defendants were indicted Dec. 17, 2014, and have all pleaded guilty. According to court documents, Ponce led a drug trafficking ring that distributed in excess of 100 kilograms of cocaine in Chesapeake and Portsmouth, Virginia. The DEA conducted a 40-day wiretap of Ponce’s phones, and in July 2014 conducted a takedown of the six charged defendants which resulted in the seizure of 5.5 kilograms of cocaine and over $197,000.
Name
Date of Guilty Plea
Date of Sentencing
German Alvarado Ponce
March 6, 2015
June 2, 2015
Ismael Diaz Amestica
March 18, 2015
June 24, 2015
Kenneth Maurice Bell
February 11, 2015
July 29, 2015
Janette Elena Cruz Miller
March 16, 2015
June 24, 2015
Altagracia Acosta Suarez
March 30, 2015
July 21, 2015
Calvin Maurice Murphy
March 19, 2015
July 29, 2015
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s (DEA) Washington Office, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith.
This case was investigated by the DEA’s Washington Office with the assistance of the Chesapeake Police Department, and was part of the Organized Crime Drug Enforcement Task Forces (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. Assistant U.S. Attorney Darryl J. Mitchell prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-119.
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Canadian Drug Trafficker Sentenced to Seven Years in PrisonRead the Press Release
A 52-year-old Vancouver, British Columbia man was sentenced today in U.S. District Court in Seattle to seven years in prison and four years of supervised release in connection with a scheme to smuggle large quantities of MDMA into the U.S., and Cocaine into Canada, announced U.S. Attorney Annette L. Hayes. PHILIP COTE was arrested in August 2014, and in February 2015 pleaded guilty to Conspiracy to Distribute MDMA and Cocaine. COTE and a co-conspirator traveled in two cars in tandem across the border 86 times since 2006 as part of their drug trafficking activities. At sentencing U.S. District Judge Robert S. Lasnik noted that COTE had “seen people’s lives ruined by drugs,” and yet he transported drugs to make money.
“Enforcement of the federal drug laws at the U.S.-Canada border is a priority for federal law enforcement. Like this defendant, those transporting large loads of dangerous drugs are responsible for enlarging the circle of drug addiction in our communities and will be held to account,” said U.S. Attorney Annette L. Hayes. “I commend Homeland Security Investigations for their diligent work on this case.”
According to records filed in the case, COTE and a co-conspirator made frequent drug runs across the border with one person acting as a lookout in one vehicle and the other carrying drugs in a secret compartment in their vehicle. On July 25, 2014 COTE traveled from British Columbia to Blaine, Washington. He supplied his contact in Blaine with 20 kilos of MDMA or ecstasy hidden in the trunk of a car. COTE met with the contact, believing the contact would deliver the drugs to Southern California. COTE instructed the contact to pick up a 32 kilo load of cocaine and hide it in the walls of an SUV for the return trip. In fact the person COTE met was working with agents from U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (HSI). On August 20, an undercover officer picked up the cocaine load in Southern California. On August 25, 2014 when COTE went to pick up the load in Blaine, he was arrested. COTE has been at the Federal Detention Center at SeaTac since his arrest.
“Cote thought his clean record and trusted traveler program membership would allow him to escape scrutiny at the border,” said Brad Bench, Special Agent in Charge of Homeland Security Investigations in Seattle. “He was mistaken. It was HSI’s coordinated effort to detect border security violators that exposed Cote and his drug trafficking operation.”
The street value of the cocaine that COTE sought to transport to Canada on just this one trip was $1.5 million.
The case was investigated by the Blaine Border Enforcement Security Task Force (BEST Blaine). The ICE Homeland Security Investigations-led BEST is composed of full-time members from U.S. Customs and Border Protection Offices of Air and Marine, Field Operations and Border Patrol; the Whatcom County Sheriff's Office; the U.S. Coast Guard Investigative Service; the Drug Enforcement Administration; the Canada Border Services Agency; and the Royal Canadian Mounted Police. BEST Blaine combats transnational criminal organizations by identifying, investigating and eliminating vulnerabilities along one of the most diverse geographic areas along the northern border.
The case is being prosecuted by Assistant United States Attorney Kate Vaughan.
California Man Receives Life in Prison for Methamphetamine TraffickingRead the Press Release
HONOLULU – United States District Judge Derrick K. Watson today sentenced California resident Alan L. Mapuatuli, age 44, to a prison term of life imprisonment, without the possibility of parole, for distribution of crystal methamphetamine and possession with intent to distribute crystal methamphetamine. Mapuatuli was subject to a mandatory life sentence on the latter charge and eligible for a life sentence on the former as a result of having two prior felony drug trafficking-related convictions in the State of California. Mapuatuli was found guilty after a jury trial in January 2015.
United States Attorney Florence T. Nakakuni said that according to information produced in court, Mapuatuli was convicted as the result of an undercover transaction between Mapuatuli and an informant involving a pound of methamphetamine. That transaction was monitored and recorded by federal agents. Based on information developed in the investigation, Mapuatuli was stopped as he drove away from the transaction. When his vehicle was searched, agents found the cellphone he had used to communicate with the informant, a backpack containing six ounces of crystal methamphetamine, $15,975.00 in U.S. currency, a loaded .45 caliber pistol, and a leather bag which contained an additional pound of crystal methamphetamine.
Mapuatuli also received a five-year term of imprisonment for possession of a firearm in furtherance of a drug trafficking crime, which is required to be consecutive to the other sentences.
The prosecution was the result of an investigation by Homeland Security Investigations/Immigration and Customs Enforcement and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution was handled by Assistant U.S. Attorney Jonathan M. F. Loo.
CFO Embezzles Hundreds of Thousands of Dollars from Charity to Fuel Lavish LifestyleRead the Press Release
SAN DIEGO – Former Chief Financial Officer Nancy Johnson and Accounts Payable Clerk Tamara Azizov pled guilty today and admitted using their positions in entirely separate schemes to steal hundreds of thousands of dollars from the Lawrence Family Jewish Community Center (“JCC”) located in La Jolla, California.
Johnson served as the JCC’s Chief Financial Officer (“CFO”) from April 1991 to April 2014, overseeing its $13 million annual budget. As CFO, Johnson had access to the JCC’s bank accounts, credit card accounts, and bookkeeping records. Johnson used her access (between 2008 and April 2014) to misappropriate $412,289.64, which she used for a variety of purchases including: a stay at the Grand Wailea Resort in Maui; airfare to the Bahamas; Jimmy Choo footwear; tickets to the ESPN X Games; and dinners at upscale eateries such Ruth’s Chris Steakhouse.
As detailed in Court, at the same time Johnson was embezzling funds to pay for lavish vacations and designer clothing, she claimed that the JCC could not afford the numerous programs and activities offered to the community. In fact, Johnson ordered JCC department heads to reduce expenses to make up for the hundreds of thousands of dollars she was siphoning off from the JCC coffers. Moreover, due in part to the embezzlement, the JCC was forced to cut personnel in order to balance its budget.
Azizov served as an Accounts Payable Clerk from June 1989 to May 2014. In this position, she also had access to the JCC’s bank accounts, credit card accounts, and bookkeeping records. In an entirely separate scheme unknown to Johnson, Azizoz misappropriated $154,192.74, which she also used for a variety of purchases, including: Tom Ford sunglasses; $1,820 for sushi at Zip Fusion; Simone Pérèle lingerie; and thousands of dollars’ worth of clothing from Neiman Marcus, Nordstrom, and Anthropologie. Both Johnson and Azizov continued their thefts until leaving the JCC in the spring of 2014.
Johnson and Azizov were able to carry out the embezzlement by virtue of their access to the full range of the JCC’s financial records and accounts. On most occasions, they would simply use the JCC’s credit cards to make personal purchases. In order to fool the JCC’s executive staff, auditors, and bookkeepers, they both (without knowledge of the other) falsely characterized their purchases as legitimate JCC expenses. At the end of the year, Johnson would then allocate her personal expenses to the JCC departments that had not exceeded their budgets.
The JCC was founded in 1945 and promotes the continuity and vibrancy of the Jewish community by offering social, cultural, educational, and recreational programs and services. The JCC operates, among other things, a preschool, a center for senior citizens, and one of the largest single-site summer day camps in California. Each year, thousands of community members attend the JCC’s San Diego Jewish Film Festival and the San Diego Jewish Book Fair.
As part of their pleas, Johnson and Azizov will be required to pay the JCC the funds they stole. Johnson’s next court appearance is on August 28, 2015, at 9 a.m. before U.S. District Judge Dana M. Sabraw. Azizov’s next court appearance is on Sept. 11, 2015, at 10 a.m. before Chief U.S. District Judge Barry T. Moskowitz. Johnson and Azizov will appear for sentencing as well as a hearing to determine the amount of restitution.
“San Diego has many fine charitable institutions like the JCC,” said U.S. Attorney Laura E. Duffy. “I will do everything in my power to insure that individuals who donate to these charities know that their funds are going to be used in an appropriate manner.” FBI Special Agent in Charge, Eric S. Birnbaum commented, "While the FBI investigates many types of fraud, when charitable organizations are victimized by those it entrusts to safeguard its assets, it is profoundly disturbing. The defendants in this case stole money intended to help children and senior citizens to indulge their lavish lifestyles. The FBI remains committed to pursuing those who abuse their position of trust to unlawfully enrich themselves."
Erick Martinez, Special Agent in Charge of IRS Criminal Investigation said, “The defendants misappropriated funds from a local community center designed to enrich the lives of those it served. IRS Criminal Investigation will not stand still while criminals line their pockets with illicit proceeds while community programs go underfunded. The defendants have overstepped their bounds feeling entitled to these funds.”
DEFENDANT Case Number: 15cr1446-DMS Nancy Johnson Age: 59 Escondido, California DEFENDANT Case Number: 15cr1447-BTM Tamara Azizov Age: 62 San Diego, California CHARGESWire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fineFiling a False Tax Return – Title 26, U.S.C., Section 7206(1)
INVESTIGATING AGENCIES
Maximum penalty: 3 years’ imprisonment and $250,000 fineFederal Bureau of Investigation
Internal Revenue Service, Criminal InvestigationBaltimore City Employees and Commercial Trash Haulers Indicted in Separate Bribery and Theft SchemesRead the Press Release
Baltimore, Maryland – A federal grand jury has returned two indictments charging five Baltimore City Department of Public Works (DPW) employees and six commercial trash haulers with conspiracy and other charges, including bribery and theft, related to two schemes to defraud the City of Baltimore through the operation of the DPW waste management services. Two employees are charged in both indictments. The indictments were returned on May 28, 2015 and unsealed today.
“The first indictment alleges that trash haulers paid bribes to landfill employees in exchange for not charging dumping fees, which cheated the city of almost $6 million. The second indictment charges that landfill employees stole scrap metal that the city would have sold for almost $1 million,” said U.S. Attorney Rod J. Rosenstein. “The Baltimore City Inspector General brought these allegations to the attention of federal authorities and assisted in the investigation.”
The first indictment alleges that over a 14-year period three DPW employees solicited and accepted cash payments from at least six private commercial haulers in return for not charging them or their companies the required disposal fees for trash dumped at the Baltimore City Quarantine Road Landfill. The second indictment alleges that over a 9-year period four DPW employees falsely represented on their daily time sheets that they were performing the jobs for which they were hired when, in fact, those employees used their paid positions to engage in a private enterprise for personal gain by selling scrap metal dumped at Baltimore City trash collection sites.
The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Assistant Special Agent in Charge Kathy Montemorra of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
The Department of Public Works’ Bureau of Solid Waste
The DPW’s Bureau of Solid Waste is responsible for managing Baltimore City’s waste management services, including overseeing citizen drop-off centers, such as the Northwest Transfer Station (NWTS) and the Quarantine Road Landfill (Landfill). Baltimore City’s waste management system generates revenue for the City by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities. The City contracts with private salvage companies to purchase and remove scrap metal from its trash collection facilities. DPW employees at the Landfill and NWTS are required to place the recyclable scrap metal in separate bins provided by the salvage companies. The salvage companies regularly pick up the scrap metal and, based on predetermined prices per ton, the salvage companies pay the City for the value of the scrap metal.
Baltimore City residents can deposit small amounts of trash and/or recyclables in dumpsters located near the main entrance of the Landfill, free of charge. Individuals or companies commercially hauling trash that have registered their vehicles with the City and obtained Landfill permits, as well as Baltimore City residents with larger loads, must deposit their trash in an open area located further within the Landfill. Commercial haulers of trash that meet certain vehicle weight limitations must, in addition to purchasing a Landfill permit, pay a waste disposal fee of $67.50 per ton of trash, also referred to as a “tipping fee.” The disposal fee applies to the net weight of the trash deposited at the Landfill.
U.S. v. Washington, Et Al., Criminal No. MJG-15-0303
The 44-count indictment alleges that from approximately 2001 until May 2015, DPW employees sought and accepted cash payments from commercial haulers in return for allowing the commercial haulers to deposit trash at the Landfill without paying the required disposal fees.
The indictment charges:
Tamara Oliver Washington, age 54, of Baltimore;
Williams Charles Nemec, Sr., age 55, of Baltimore;
Charles Dennis Bolden, Sr., age 68 of Baltimore;
Adam Williams, Jr., age 52, of Randallstown;
Mustafa Sharif, age 63, of Baltimore;
Larry Lowry, age 61, of Orchard Beach, Maryland;
Quentin Turgot Glenn, age 49, of Hanover, Maryland;
Jessie Lee Wilson, Jr., age 40, of Baltimore;
John Howard Brady, age 73, of Glen Burnie.Washington was a DPW employee assigned to the scale house at the Landfill. DPW employees assigned as scale house operators weigh each truck as it enters the Landfill, which is recorded on a computerized point-of-sale system. To activate the system and record a particular transaction, DPW employees must enter the tag number of the truck and a corresponding billing code. The scale house operators reweigh each truck as it leaves the Landfill. The net weight of the deposited trash and the required disposal fee is then calculated and printed on a receipt that is handed to the driver. Nemec was initially employed by the DPW as a scale house operator at the Landfill and Northwest Transfer Station, and then later promoted to solid waste supervisor. Bolden was employed as a laborer at the Landfill.
Williams, Sharif, Lowry, Glenn, and Brady all had commercial trash hauling businesses in Maryland. Wilson was employed by Glenn.
Specifically, the indictment alleges that the DPW employees allowed the commercial haulers to enter the Landfill with truckloads of trash – sometimes multiple times a day - without activating the computerized truck scales and point-of-sale system, ensuring that there would be no record of the commercial haulers’ use of the Landfill. In exchange, the commercial haulers paid cash bribes to the DPW Employees, ranging from approximately $50 to $100 per Landfill visit. According to the indictment, the bribes were delivered on a daily or weekly basis to the DPW employees in folded paper through the scale house window or dropped off in envelopes at designated times and places outside the Landfill. The DPW employees allegedly divided the cash payments from the commercial haulers among themselves. The payments were approximately 20% to 30% of what the commercial haulers would have otherwise had to pay to use the Landfill. The indictment alleges that when the commercial haulers’ trucks drove onto the outbound scale after dumping their loads of trash, DPW employees handed the truck drivers fraudulent receipts, usually in the form of white scrap paper or a blank receipt, to maintain the pretense that the trucks had been weighed and appropriately charged for using the Landfill.
The indictment alleges that the ongoing relationship between the commercial haulers and DPW employees resulted in a loss of revenue to the DPW and the City of Baltimore of approximately $6,000,000.
The defendants each face a maximum sentence of five years in prison for the conspiracy; and all but Bolden also face a maximum of 10 years in prison for each count of bribery. Washington, Nemec and Bolden face a maximum of 20 years in prison for each count of extortion.
U.S. v. Hazelton, Et Al., Criminal No. MJG-15-0302
The 18-count indictment alleges that from approximately 2005 through March 2015, Jarrod Terrell Hazelton, age 32, of Parkville, Maryland; Michael Theodore Bennett, age 46, of Baltimore; Bolden and Nemec, conspired to unlawfully sell scrap metal from the Landfill and NWTS, while falsely representing to DPW that they were performing the jobs for which they were hired.
The defendants are all employed by DPW at either the Landfill or the NWTS. According to the indictment, the defendants and others used their personal cell phones during work shifts to let each other know when and where recyclable scrap metals were being dumped at the Landfill and NWTS. Hazelton and Bennett used their personal pick-up trucks during work hours to collect the scrap metal and transport it to a private salvage company, frequently making multiple trips during an eight-hour work shift. Hazelton and Bennett sold the scrap metal for as much as $300 per truckload, resulting in a loss of revenue to the City totaling approximately $893,000.
Hazelton and Bennett allegedly used part of the proceeds of the sale of the scrap metal to pay a fee to Bolden and other DPW employees for their help locating, setting aside, collecting and loading the scrap metal onto their trucks. According to the indictment, Hazelton and Bolden also paid Nemec in return for allowing them to collect and transport scrap metal from the Landfill. The indictment alleges that the defendants prepared and submitted false time and attendance records, which claimed they had been working, when they were instead illegally collecting and selling the scrap metal, called “junking.” For Hazelton and Bennett, this allegedly resulted in approximately $60,000 in wages being paid to them for work they did not perform.
The indictment charges Hazelton with filing false tax returns for tax years 2011 through 2014, by failing to report a total of $537,554 in income. Bennett is charged with failing to file tax returns for tax years 2011, 2012, and 2013, even though he had reportable income of at least $180,834, $152,494, and $146,154, respectively.
Finally, the indictment seeks the forfeiture of $953,000, alleged to be the value of the property stolen or obtained by fraud.
The defendants each face a maximum sentence of five years in prison for the conspiracy. Hazleton, Bennett and Nemec each face a maximum of 20 years in prison for wire fraud; and Hazleton, Bennett and Bolden also face a maximum of 10 years in prison for each count of theft from a government program. Hazleton faces a maximum of three years in prison for each of four counts of subscribing to a false tax return and Bennett faces a maximum of one year in prison for each of three counts of failure to file a tax return.
An initial appearance is scheduled at 2:30 p.m. today for Brady, Williams, Sharif, and at 3:00 p.m. for Glenn, Lowry, and Wilson in U.S. District Court in Baltimore. Washington, Nemec, Bolden, Hazelton, and Bennett had an initial appearance on the charges in their previous criminal complaints, and are released under the supervision of U.S. Pretrial Services. They are expected to be arraigned on the charges in the indictments in the next few weeks.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the FBI, IRS-CI, Baltimore Office of Inspector General, and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Martin J. Clarke and Gregory R. Bockin, who are prosecuting the case.
Altamont Man Pleads Guilty to Drug Distribution ChargeRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Ricky T. Garner, age 46, of Altamont, Illinois, pled guilty on Tuesday, June 2, 2015 to a federal indictment charging him with Possession of alpha-PVP with Intent to Distribute.
Garner is scheduled to be sentenced in U.S. District Court in East St. Louis on September 16, 2015 at 1:30 p.m.
"Alpha-PVP" is a prohibited controlled substance very similar to methamphetamine. It is chemically similar to methamphetamine and produces similar effects when ingested.
According to evidence introduced at Garner’s plea hearing, Illinois State Police troopers stopped Garner’s truck near Beecher City, Illinois on October 1, 2014. Garner was arrested because of outstanding arrest warrants. Police found 70 grams (2½ ounces) of alpha-PVP near Garner in the truck.
Garner has been continuously confined since his arrest last October.
At his sentence hearing in September, Garner faces maximum penalties of not more than 20 years imprisonment; a fine of not more than $1,000,000.00; and a term of not less than 3 years of supervised release.
The investigation which resulted in Garner’s arrest and conviction was conducted by an Illinois State Police Swat Team based in Effingham, Illinois.
The case is assigned to Assistant United States Attorney Robert L. Garrison.
Alleged Drug Kingpins Charged with Multi-State Operation That Imported 1,000 Kilograms of Heroin from Mexico into the United StatesRead the Press Release
A 108-count superseding indictment unsealed today charges 37 people (see chart) as participants in a multi-state heroin trafficking organization with ties to Mexico. The charges, which include conducting a continuing criminal enterprise, conspiracy to commit money laundering, 62 counts of money laundering and 43 substantive drug charges, were announced by U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent-in-Charge Gary Tuggle for the Drug Enforcement Administration (DEA).
Members of the Laredo Drug Trafficking Organization (DTO) are charged with the distribution and attempted distribution of multi-kilogram quantities of heroin in Philadelphia. According to the indictment, since 2008, the Laredo DTO has manufactured and imported heroin from its operation in Mexico and supplied other DTOs in Philadelphia, Chicago Camden, New Jersey, and elsewhere.
Brothers Antonio and Ismael Laredo, the alleged leaders of the Laredo DTO, are charged with engagement in a continuing criminal enterprise. They allegedly supervised 21 defendants who are charged with participation in a conspiracy to import heroin from Mexico into the United States and conspiracy to distribute kilogram quantities of heroin manufactured in and smuggled from Mexico into the United States. According to the superseding indictment, the Laredo DTO smuggled-in from Mexico approximately 1,000 kilograms of heroin using various concealment techniques including placing kilogram quantities of heroin in car batteries, car bumpers, concealed vehicle traps and sealed fruit and vegetable cans. Antonio and Ismael Laredo allegedly recruited and hired couriers in the United States to transport and deliver multi-kilogram shipments of heroin, originating in Mexico, to heroin distributors affiliated with the Laredo DTO located in Philadelphia, Camden, New Jersey, Chicago, Atlanta, and New York, New York. Defendant Antonio Marcelo Barragan allegedly served as a Mexican-based supplier of raw opium. Defendant Alejandro Sotelo allegedly served as a stash house operator and distributor of the DTO’s product in Chicago, where he arranged trans-shipment of multi-kilogram quantities of heroin to Philadelphia, New Jersey and New York.
It is further alleged that the Laredo DTO supplied street level heroin bagging and packaging operations in Philadelphia; that heroin, in quantities ranging from 15 to 50 kilograms at a time was regularly moved between the Chicago, operation and the Philadelphia operation; and that members of the DTO, including the Laredo brothers, used violence, such as assaults and kidnapping, threats of violence, including murder and arson and firearms to protect the DTO’s product and proceeds and to prevent members from withdrawing from the organization. The indictment alleges that the Laredo DTO supplied multi-kilogram quantities of heroin to other drug traffickers in the Philadelphia area, including the (Christian) Serrano DTO, charged elsewhere, the (Darbin and Gabriel) Vargas DTO and the Camden, New Jersey, based (Confesor) Montalvo organization, among others.
According to the indictment, members of the Laredo DTO would transport heroin shipments by various means, including car and train. In 2012, a courier concealed three kilograms of heroin inside a car battery for transport from Mexico to Philadelphia; another shipment of four kilograms was concealed inside a car speaker box; a shipment of 7.6 kilograms of heroin was concealed in sealed fruit and vegetable cans in Texas and the couriers were directed to deliver the heroin to defendants Darbin Vargas and Gabriel Vargas, of the Vargas DTO in Philadelphia, in September 2012. The indictment alleges that the Laredo brothers arranged for the manufacture and production of car batteries in Mexico containing concealed compartments to hold multiple kilograms of heroin which were then used to surreptitiously import heroin into the United States.
The indictment further alleges that the Laredo brothers had numerous relatives and associates set up “funnel accounts” that were used for the purpose of laundering the proceeds of the drug operation back to Mexico. According to the indictment, using a variety of money laundering techniques, including the use of the funnel accounts, wire transfers of funds and Western Union money grams, the DTO was able to launder at least $5 million of its heroin proceeds back to Mexico, where the Laredo brothers resided. It was further a part of the conspiracy that the Laredo brothers directed defendant Osmar Flores, doing business as Tri-Country Auto Sales Inc. in Rockford, Illinois, to collect and deposit large sums of cash representing proceeds of the Laredo DTO's heroin trafficking sales in the U.S. to the business bank account of Tri Country Auto Sales Inc. Portions of those funds were allegedly used to purchase multiple vehicles used to transport heroin from Mexico and bulk U.S. currency from the United States to Mexico, in concealed compartments. In addition, defendant Osmar Flores transmitted proceeds of the heroin operation back to the Laredos, both by wire transfers and bulk transfers of cash.
“This indictment and the arrests this morning are a significant victory in our efforts to combat drug trafficking,” said U.S. Attorney Memeger. “Because of the persistent and collaborative efforts of multiple law enforcement agencies across the country, a major supplier of heroin to the Philadelphia region is out of business.”
“Heroin is the top enforcement priority of the Drug Enforcement Administration’s Philadelphia Field Division,” said Special Agent-in-Charge Tuggle. “Dismantling this extremely violent international drug trafficking organization ended the flow of hundreds of kilograms of Mexican based heroin into the Philadelphia region and is a direct result of DEA’s resolve to make our communities safer. This was a cooperative effort with local, state and federal agencies. The flow of Mexican produced heroin into southeast Pennsylvania has been significantly impacted.”
If convicted, the Laredo brothers each face a mandatory sentence of life in prison, tens to hundreds of millions of dollars in fines, as well as a criminal forfeiture judgment to the United States of up to $60 million; most of the remaining drug trafficking defendants face mandatory minimum sentences of at least 10 years in prison (see attached chart).
The case was investigated by the DEA’s offices in Philadelphia, Camden, New Jersey, Mexico City, Mexico, Chicago and Rockford, Illinois, Newark, New Jersey, New York, New York, Tyler, Texas, Raleigh, North Carolina, Jefferson City and St. Louis, Missouri, Richmond, Virginia, and the DEA Special Operations Division; FBI in Philadelphia; U.S. Marshal Service; Homeland Security Investigations in Philadelphia and Richmond, Virginia; Immigration and Customs Enforcement; the Philadelphia Police Department; Darby Borough Police Department; SEPTA Transit Police Department; Berks County District Attorney’s Office; Bucks County District Attorney’s Office in New Jersey; the New Jersey Attorney General’s Office, Parole Board, Cherry Hill Police Department, Delaware River Port Authority Police, Camden County Prosecutor’s Office, Camden County Sherriff’s Office; in Illinois: Rockford Police Department, Will County Sheriff's Department, Skokie Police Department, Aurora Police Department, Oak Lawn Police Department, Addison Police Department, Prospect Heights Police Department, Chicago Police Department, Arlington Heights Police Department, West Chicago Police Department, Cook County Sheriff's Department and McHenry County Narcotics Task Force; in Texas: Texas Department of Safety, CID Mt. Pleasant, Mt. Pleasant Police Department; in Missouri: Missouri State Highway Patrol, Audrain County Sheriff’s Department, East Central Drug Task Force; in Virginia: the Mecklenberg County Commonwealth Attorney’s Office and the Virginia State Police; and the Orange County Sheriff’s Office in North Carolina. Assistance was provided by the U.S. Attorney’s Offices in the Northern District of Illinois and the Eastern District of Virginia. The case is being prosecuted by Assistant United States Attorney Joseph T. Labrum III.
Alleged Drug Kingpins Charged with Importing Heroin from MexicoRead the Press Release
PHILADELPHIA – A 108-count superseding indictment, unsealed today, charges 37 people (see chart) as participants in a multi-state heroin trafficking organization with ties to Mexico. The charges, which include conducting a continuing criminal enterprise, conspiracy to commit money laundering, 62 counts of money laundering, and 43 substantive drug charges, were announced by United States Attorney Zane David Memeger and Drug Enforcement Administration Special Agent-in-Charge Gary Tuggle. Members of the Laredo Drug Trafficking Organization (DTO) are charged with the distribution and attempted distribution of multi-kilogram quantities of heroin in Philadelphia. According to the indictment, since 2008, the Laredo DTO has manufactured and imported heroin from its operation in Mexico and supplied other DTOs in Philadelphia, Pennsylvania, in Camden, New Jersey, in Chicago, Illinois, and elsewhere.
Brothers Antonio and Ismael Laredo, the alleged leaders of the Laredo DTO, are charged with engagement in a continuing criminal enterprise. They allegedly supervised 21 defendants who are charged with participation in a conspiracy to import heroin from Mexico into the United States, and conspiracy to distribute kilogram quantities of heroin manufactured in, and smuggled from, Mexico into the United States. According to the superseding indictment, the Laredo DTO smuggled-in from Mexico approximately 1,000 kilograms of heroin using various concealment techniques including placing kilogram quantities of heroin in car batteries, car bumpers, concealed vehicle traps, and sealed fruit and vegetable cans. Antonio and Ismael Laredo allegedly recruited and hired couriers in the United States to transport and deliver multi-kilogram shipments of heroin, originating in Mexico, to heroin distributors affiliated with the Laredo DTO located in Philadelphia, Pennsylvania, Camden, New Jersey, Chicago, Illinois, Atlanta, Georgia, and New York, New York. Defendant Antonio Marcelo Barragan allegedly served as a Mexican-based supplier of raw opium. Defendant Alejandro Sotelo allegedly served as a stash house operator and distributor of the DTO’s product in Chicago, Illinois, where he arranged trans-shipment of multi-kilogram quantities of heroin to Philadelphia, New Jersey and New York.
It is further alleged that the Laredo DTO supplied street level heroin bagging and packaging operations in Philadelphia; that heroin, in quantities ranging from 15 to 50 kilograms at a time was regularly moved between the Chicago operation and the Philadelphia operation; and that members of the DTO, including the Laredo brothers, used violence, such as assaults and kidnapping, threats of violence, including murder and arson, and firearms to protect the DTO's product and proceeds and to prevent members from withdrawing from the organization. The indictment alleges that the Laredo DTO supplied multi-kilogram quantities of heroin to other drug traffickers in the Philadelphia area, including the
(Christian) Serrano DTO, charged elsewhere, the (Darbin and Gabriel) Vargas DTO, and the Camden, New Jersey based (Confesor) Montalvo organization, among others.
According to the indictment, members of the Laredo DTO would transport heroin shipments by various means, including car and train. In 2012, a courier concealed three kilograms of heroin inside a car battery for transport from Mexico to Philadelphia; another shipment of four kilograms was concealed inside a car speaker box; a shipment of 7.6 kilograms of heroin was concealed in sealed fruit and vegetable cans in Texas, and the couriers were directed to deliver the heroin to defendants Darbin Vargas and Gabriel Vargas, of the Vargas DTO in Philadelphia in September 2012. The indictment alleges that the Laredo brothers arranged for the manufacture and production of car batteries in Mexico containing concealed compartments to hold multiple kilograms of heroin which were then used to surreptitiously import heroin into the United States.
The indictment further alleges that the Laredo brothers had numerous relatives and associates set up “funnel accounts” that were used for the purpose of laundering the proceeds of the drug operation back to Mexico. According to the indictment, using a variety of money laundering techniques, including the use of the funnel accounts, wire transfers of funds, and Western Union money grams, the DTO was able to launder at least $5 million of its heroin proceeds back to Mexico, where the Laredo brothers resided. It was further a part of the conspiracy that the Laredo brothers directed defendant Osmar Flores, doing business as Tri-Country Auto Sales, Inc., in Rockford, Illinois, to collect and deposit large sums of cash representing proceeds of the Laredo DTO's heroin trafficking sales in the U.S. to the business bank account of Tri Country Auto Sales, Inc. Portions of those funds were allegedly used to purchase multiple vehicles used to transport heroin from Mexico and bulk U.S. currency from the United States to Mexico, in concealed compartments. In addition, defendant Osmar Flores transmitted proceeds of the heroin operation back to the Laredos, both by wire transfers and bulk transfers of cash.
“This indictment and the arrests this morning are a significant victory in our efforts to combat drug trafficking,” said Memeger. “Because of the persistent and collaborative efforts of multiple law enforcement agencies across the country, a major supplier of heroin to the Philadelphia region is out of business.”
“Heroin is the top enforcement priority of the Drug Enforcement Administration’s Philadelphia Field Division,” said Special Agent-in-Charge Gary Tuggle. “Dismantling this extremely violent international drug trafficking organization ended the flow of hundreds of kilograms of Mexican based heroin into the Philadelphia region and is a direct result of DEA’s resolve to make our communities safer. This was a cooperative effort with local, state and federal agencies. The flow of Mexican produced heroin into southeast Pennsylvania has been significantly impacted.”
If convicted, the Laredo brothers each face a mandatory sentence of life in prison, tens to hundreds of millions of dollars in fines, as well as a criminal forfeiture judgment to the United States of up to $60 million; most of the remaining drug trafficking defendants face mandatory minimum sentences of at least 10 years in prison (see attached chart).
The case was investigated by the Drug Enforcement Administration’s offices in Philadelphia, PA, Camden, NJ, Mexico City, Mexico, Chicago and Rockford, IL, Newark, NJ, New York, NY, Tyler, TX, Raleigh, NC, Jefferson City and St. Louis, MS, Richmond, VA, and the DEA Special Operations Division; FBI, Philadelphia; U.S. Marshal Service; Homeland Security Investigations in Philadelphia, PA and Richmond, VA; Immigration and Customs Enforcement; the Philadelphia Police Department; Darby Borough Police Department; SEPTA Transit Police Department; Berks County District Attorney’s Office; Bucks County District Attorney’s Office; in New Jersey: the N.J. Attorney General’s Office, N.J. Parole Board, Cherry Hill Police Department, Delaware River Port Authority Police, Camden County Prosecutor’s Office, Camden County Sherriff’s Office; in Illinois: Rockford Police Department, Will County Sheriff's Department, Skokie Police Department, Aurora Police Department, Oak Lawn Police Department, Addison Police Department, Prospect Heights Police Department, Chicago Police Department, Arlington Heights Police Department, West Chicago Police Department, Cook County Sheriff's Department, and McHenry County Narcotics Task Force; in Texas: Texas Department of Safety, CID Mt. Pleasant, Mt. Pleasant Police Department; in Missouri: Missouri State Highway Patrol, Audrain County Sheriff’s Department, East Central Drug Task Force; in Virginia: the Mecklenberg County Commonwealth Attorney’s Office and the Virginia State Police; and the Orange County Sheriff’s Office in North Carolina. Assistance was provided by the U.S. Attorney’s Offices in the Northern District of Illinois and the Eastern District of Virginia. The case is being prosecuted by Assistant United States Attorney Joseph T. Labrum, III.
Alien Smuggler Who Falsified His Military Record Ends up with 30 Months in the Federal BrigRead the Press Release
SAN DIEGO – After a six week continuance to investigate this military record, Defendant Scotty Kamakahohie White was sentenced by Judge Jeffrey T. Miller to 30 months in federal prison and three years of supervised release for his role smuggling an Alien into the United States.
At his initial sentencing hearing on April 17, 2015, White claimed to have served with the United States Army from 2001 until 2006, and to have received an honorable discharge at the rank of Sergeant after three separate tours of duty in Iraq. At that time, Judge Miller told White that his honorable service to the United States in a time of war would be a major consideration in his favor at sentencing. After his record was questioned by the Government, the Court continued the sentencing hearing so that White’s military records could be reviewed.
As revealed today in Court, White’s military record was very different from what he had claimed. Rather than serving for five years with three total tours of duty in a war zone, White served less than 10 months. Moreover, he had not been involved in any combat operations and was discharged as a Private E-1, not a Sergeant. When confronted with his actual military record, White admitted that he actually had gone AWOL and been kicked out of the Army without ever once setting foot in Iraq. With his false statements exposed, White agreed to not oppose a 30-month sentence for his crimes.
DEFENDANTS Case Number: 15cr0028-JM Scotty Kamakahohie White Age: 30 Parker, Arizona CHARGESTransportation of Aliens – Title 8, U.S.C., Section 1324(a)(1)(A)(ii)
INVESTIGATING AGENCIES
Maximum penalty: 10 years’ imprisonment and $250,000 fineUnited States Border Patrol
Monday 1 June 2015
Wife of Former Executive at Collin Street Bakery Pleads GuiltyRead the Press Release
DALLAS — The wife of a former executive at the Collin Street Bakery (Bakery) in Corsicana, Texas, appeared Friday before U.S. Magistrate Judge Paul D. Stickney and entered a guilty plea to a conspiracy offense stemming from her husband’s admitted $16 million embezzlement from the Bakery, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Kay Jenkins, 64, of Corsicana, pleaded guilty to one count of conspiracy to commit money laundering. The maximum statutory penalty for that offense is 10 years in federal prison and a fine not to exceed $250,000 or the pecuniary gain to the defendant or loss to the defendant. However, according to plea documents filed in her case, if the Court accepts the plea agreement, the parties agree that the appropriate maximum term of imprisonment is 36 months’ imprisonment. Kay Jenkins remains on bond pending sentencing set for September 16, 2015, before U.S. District Judge Ed Kinkeade.
Jenkins’ husband, Sandy Jenkins, 66, who remains in federal custody, served as the Corporate Controller for the Bakery from February 1998 to June 21, 2013. He was terminated on June 21, 2013, after the Bakery discovered the fraud. He pleaded guilty in May 2014 to one count of mail fraud, one count of conspiracy to commit money laundering, and one count of making a false statement to a financial institution. He faces the following maximum statutory penalties: 20 years in federal prison and a $250,000 fine on the mail fraud conviction; 10 years in federal prison and a $1 million fine on the conspiracy conviction; and 30 years in federal prison and $1.5 million fine on the false statements conviction. He also agreed to a forfeiture money judgment against him of at least $16,649,786, and he agreed to pay full restitution to the Bakery for the entire scope of his criminal conduct. He is scheduled to be sentenced on June 24, 2015, by Judge Kinkeade.
According to plea documents filed in Kay Jenkins’s case, she agreed that the government could readily prove at trial that beginning at least as early as December 2004, and continuing until his termination from the Bakery in June 2013, Sandy Jenkins engaged in a massive scheme to defraud the Bakery in order to financially benefit he and his wife. Over the course of time, Sandy Jenkins embezzled more than $16 million from the Bakery that was used to fund an extravagant lifestyle for the couple. Kay Jenkins did not participate in the embezzlement of funds from the Bakery.
Kay Jenkins admitted that during this period she conspired with her husband to engage in monetary transactions with property derived from a criminal activity. Kay Jenkins agreed that the government could readily prove at trial that the funds involved in these monetary transactions were derived from her husband’s embezzlement of funds from the Bakery.
Starting in approximately 1998, Sandy Jenkins began working at the Bakery with an annual salary of approximately $25,000. In approximately 2000, Sandy Jenkins was promoted to Controller, a position he held until his termination. At no point during his employment at the Bakery did his salary exceed approximately $50,000 per year. Beginning at the approximate time Sandy Jenkins began embezzling money from the Bakery, Kay Jenkins did not work outside of the home. She knew that their income was insufficient to pay for their extravagant lifestyle.
Sandy and Kay Jenkins primarily spent the embezzled funds by making charges on an American Express Centurion credit card that charges a $2,500 yearly service fee but has no credit limit. Both Sandy and Kay Jenkins had these cards, and between 2005 and 2013, they incurred charges totaling approximately $11,120,449 with American Express. Kay Jenkins admits that Sandy Jenkins paid the American Express bill at the end of each billing period using embezzled funds from the Bakery.
Between 2005 and 2013, Sandy and Kay Jenkins incurred charges totaling approximately $1,941,596 on Citibank credit cards and charges totaling approximately $1,196,773 on a Neiman Marcus credit card. Kay Jenkins further admits that she and Sandy Jenkins purchased significant amounts of watches, jewelry and other precious items.
While Sandy Jenkins never specifically discussed with Kay Jenkins that he was embezzling funds from the Bakery, Kay Jenkins admits she deliberately closed her eyes to what would otherwise have been obvious to her. Kay Jenkins knew that Sandy Jenkins provided different explanations to different people when attempting to explain the source of funds, and she knew that some of those explanations were false.
The FBI conducted the investigation. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution and Assistant U.S. Attorney Melissa Childs is handling the forfeiture.
United States Settles False Claims Act Allegations Against Jacksonville-Based Compounding PharmacyRead the Press Release
Jacksonville, FL – United States Attorney A. Lee Bentley, III announces today that the United States has settled allegations that a Jacksonville-based compounding pharmacy knowingly billed the government for compounding pain prescriptions that came from an improper referral source. The allegations resolved included liability under the False Claims Act (FCA).
The government has reached a settlement with the defendant, MediMix, and the top-referring physician – Dr. Ankit Desai. In reaching this settlement, the parties resolved allegations that, from January 1, 2009, until December 2014, Dr. Desai sent hundreds of prescriptions to MediMix. These prescriptions were not appropriately reimbursable because Dr. Desai was married to a Senior Vice President at MediMix. Healthcare providers are generally prohibited from referring business to entities where they have a financial interest. The government agreed to accept $3,775,458 to resolve these allegations.
Today’s settlement involved false claims submitted to the TRICARE program. This case was developed by proactively mining health care reimbursement data. In mining through this data, MediMix was identified as a top biller of compounding pain prescriptions.
“The United States Attorney’s Office is committed to protecting TRICARE and other federal health care programs from fraud,” said U.S. Attorney Bentley. “By bringing FCA cases such as this, we recover funds obtained through fraud and deter others from attempting similar schemes.”
"This settlement highlights another step forward by the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program," said Special Agent in Charge John F. Khin, Southeast Field Office. "Fraud and abuse by pharmacies and medical providers which bill for compounded pain prescriptions is a significant threat to the DoD health care system. TRICARE beneficiaries must be made aware that any medications that are not individually prescribed or dispensed by a bona fide treating physician for a specific medical condition can be ineffective or unsafe."
"This settlement is demonstrative of our joint efforts to investigate allegations of health care fraud, and is a strong example of how collaborative efforts lead to success," stated Assistant Special Agent in Charge Lawrence Koleff with the FBI Jacksonville Division.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was investigated by Defense Criminal Investigative Service, the Federal Bureau of Investigation, the Program Integrity Office at the Defense Health Agency, and Assistant United States Attorney Jason Mehta.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
U.S. Department of Justice’s COPS Office to provide technical assistance to Pasco Police DepartmentRead the Press Release
PASCO, WASHINGTON – In response to a request for assistance from United States Attorney Michael C. Ormsby and Pasco Police Chief Robert Metzger, the Office of Community Oriented Policing Services today announced it will offer technical assistance and training to the Pasco Police Department.
"The lack of trust between the community and the police is at the core of much tension and unrest throughout the nation. The recent tragic shooting of Antonio Zambrano-Montes in Pasco has brought that fact to light and reveals the need for the Pasco Police Department to enhance its community policing efforts," said COPS Office Director Ronald Davis. "It is absolutely critical that the police department do all it can to strengthen police and community relations and rebuild the community’s trust. I applaud Pasco Police Chief Metzger for his leadership in taking this necessary step."
"To be successful, any community oriented policing program must be grounded on trust and communication," said Michael C. Ormsby, United States Attorney for the Eastern District of Washington. "The steps initiated by the COPS program today are important tools to strengthen and enhance trust and communication between the community and the police department. Without a doubt, establishing and maintaining a safe community is the overarching goal of this, and every, community oriented policing program."
Through its Critical Response Technical Assistance program, the COPS Office will work with the Pasco Police Department over the next 12 months, and provide training in community policing and problem-solving, fair and impartial policing and procedural justice. Using a peer-to-peer support and exchange program, the COPS Office will also connect the police department with top law enforcement leaders and subject matter experts in the field to learn the best practices in community policing and crime reduction.
The Critical Response Technical Assistance initiative is a grant program within the COPS Office that is designed to provide immediate assistance to agencies facing crisis. CR-TA has been deployed in jurisdictions such as Ferguson, Mo., Detroit, Mich., Seattle, Wash., New Orleans, La. and San Diego, Calif.
The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of more than 126,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance. For additional information about COPS, please visit www.cops.usdoj.gov.
U.S Attorney’s Office Notifies Summer Camps of Requirements to Accommodate Children with DisabilitiesRead the Press Release
As summer camps prepare to open, U.S. Attorney Carmen Ortiz reminded camps across Massachusetts of their obligation to make their facilities and programs accessible to all children, including those with disabilities. Summer camps, like other places of public accommodation, are required under the Americans with Disabilities Act (ADA), to make reasonable accommodations for children with disabilities.
“Summer camps provide valuable opportunities for children to grow more independent, build confidence, develop leadership qualities, practice positive risk taking, and foster lifelong skills,” said United States Attorney Carmen M. Ortiz. “The law requires camps to provide equal opportunities to disabled children whose needs can be reasonably accommodated. As we mark the 25th anniversary of the ADA, upholding its standards in all environments is a priority of the Department of Justice.”
The U.S. Attorney’s Office seeks to help ensure that children with disabilities receive an equal opportunity to attend and enjoy the offerings at summer camps. To aid this effort, the attached flyer was recently distributed to hundreds of Massachusetts summer camps reminding them of their obligations under the ADA enacted in 1990.
Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities. This generally means that children with disabilities are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis, and that camps must train their staff in the requirements of the ADA. Camps are obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.
In 2010, to coordinate the efforts of the U.S. Attorney’s Office in enforcing federal civil rights laws, U.S. Attorney Carmen Ortiz formed the Civil Rights Enforcement Team (CRET) which is composed of Assistant U.S. Attorneys and professional staff from the criminal and civil divisions of the office. The primary goals of the CRET is to develop a comprehensive enforcement strategy to address civil rights issues that arise in the District of Massachusetts; to uphold the constitutional rights of all residents, particularly some of the most vulnerable members of society; and to enforce federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status, and national origin.
Additional information about the ADA is available at www.ADA.gov, or through contacting the U.S. Attorney’s Office at 617-748-3100.
Two Individuals Plead Guilty to Conspiring to Defraud Consumers through Fraudulent Debt Relief Services FirmsRead the Press Release
Two individuals pleaded guilty today for their roles at fraudulent debt relief services companies that offered to settle credit card debts but instead took victims’ payments as undisclosed up-front fees, the Justice Department and U.S. Postal Inspection Service (USPIS) announced.
Athena Maldonado, 30, and Christopher Harati, 31, both of Orange County, California, pleaded guilty to a one-count information alleging conspiracy in connection with debt relief companies known as Nelson Gamble & Associates (Nelson Gamble) and Jackson Hunter Morris & Knight LLP (Jackson Hunter). According to the information filed in the case, the defendants and their co-conspirators portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors. Clients made monthly payments expecting the money to go toward settlements. The companies instead took an amount equal to at least 15 percent of clients’ total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees.
“Debt relief service scams prey on vulnerable consumers trying to climb out of tough financial situations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department will aggressively pursue the criminals who operate these schemes.”
Maldonado admitted that she acted as the “legal department” for both companies, and used multiple aliases when responding to complaints submitted by state attorney general offices, the Better Business Bureau and private attorneys. Maldonado admitted that, after Nelson Gamble changed its name to Jackson Hunter, she responded to consumer complaints by falsely stating, among other things, that the two companies were not related and that Jackson Hunter could not refund money paid to Nelson Gamble.
Harati admitted that he worked as a client relations manager for the companies and handled complaint calls from clients. He admitted he told customers that Nelson Gamble and Jackson Hunter were separate companies, falsely stated that Jackson Hunter was a nationwide law firm with years of experience and made other misrepresentations designed to convince customers to stay with the company.
The defendants each face a statutory maximum sentence of five years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, along with mandatory restitution. Their sentencing dates have not been set.
On Dec. 3, 2014, a grand jury in Santa Ana, California, returned a 22-count indictment charging Jeremy Nelson, Elias Ponce and John Vartanian, all of Orange County, for mail fraud, wire fraud, and conspiracy to commit mail and wire fraud in the same fraudulent scheme. The trial in that case is scheduled to begin on Feb. 16, 2016, in Los Angeles.
The Federal Trade Commission (FTC) brought a civil case against Nelson Gamble, Jackson Hunter and other defendants in September 2012, alleging that the defendants falsely claimed they would reduce consumers’ unsecured debt by 50 percent or more, made unauthorized charges to their bank accounts and called phone numbers listed on the National Do Not Call Registry. For more information about debt relief firms, the FTC encourages consumers to review this page on their website.
Principal Deputy Assistant Attorney General Mizer commended the USPIS team assigned to the Civil Division’s Consumer Protection Branch for their investigative efforts, and thanked the U.S. Attorney’s Office of the Central District of California for their contributions to the case. The case is being prosecuted by Trial Attorney Alan Phelps of the Consumer Protection Branch.
Suburban Man Indicted for International Parental KidnappingRead the Press Release
CHICAGO ― A Skokie man was indicted last week for international parental kidnapping of his three children and traveling with them to Turkey without their mother’s consent, permission or knowledge. MURTAZA ALI, 44, of Skokie, was charged with one count of international parental kidnapping by a federal grand jury. Ali was arrested on May 6 upon his return to O’Hare International Airport with the children, and remains in federal custody. Ali is scheduled to be arraigned Tuesday, June 2 at 10:00, in front of U.S. District Judge Samuel Der-Yeghiayan.
According to the court documents, Ali is a Pakistani-national, and with individual A, has three minor children. According to Individual A, on the evening of May 2, 2015, she was at a social gathering. Ali, along with the three children, was scheduled to pick her up after the event. He did not pick her up, and when she arrived home, Ali and the three children were not home, the house was a mess, and the passports and luggage were missing. An investigation by Skokie Police Department determined Ali’s last known location was believed to be near O’Hare Airport.
Ali, along with the three children, boarded a Turkish Airlines flight at O’Hare Airport and arrived in Istanbul, Turkey on May 2. According to Individual A, Ali called her from Turkey and stated that he had the three children and that he was traveling to Pakistan. According to information obtained from Turkish Airlines and other law enforcement agents, there was reason to believe that Ali was planning to board a flight from Turkey bound for Karachi, Pakistan, with the children. He was arrested on a federal complaint when he and his three children returned to the United States on May 6.
The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and William A. Ferrara, Chicago Director of Field Operations, Customs and Border Protection. Skokie Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Heather McShain.
International parental kidnapping carries a maximum sentence of three years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
South Florida Resident Charged in Investor Fraud SchemeRead the Press Release
A Miami-Dade County resident was charged, by Information in the Southern District of Florida, for participating in a Ponzi scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation, and Commissioner Drew J. Breakspear with Florida’s Office of Financial Regulation (OFR), made the announcement.
Phil D. Williamson, 48, of Palmetto Bay, was charged for his participation in a fraud scheme. The defendant was charged with Investment Advisor Fraud, in violation of Title 15, United States Code, Section 80b-6, an offense punishable by up to five years in prison.
According to the Information, Williamson misled investors into believing that he was a registered investment advisor working for a nationally recognized financial services firm. During the course of the fraud scheme, seventeen individuals invested over two million dollars with Williamson. Unbeknownst to them, Williamson was transferring their money into bank accounts in the names of two companies he owned and operated, Sterling Investment Fund, LLC (“Sterling Investment”) and Sterling Financial Partners, Inc. (“Sterling Financial”). Williamson misappropriated and misused much of the money he promised to invest. In order to conceal the fraud from investors, Williamson created false statements of account to lull investors into falsely believing that their principal was safe and generating a positive return. Williamson further lulled investors by engaging in a Ponzi scheme, paying early investors with money he received from newly solicited investors.
A complaint filed by the Securities and Exchange Commission in a companion case has charged Williamson with violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940, and Rule 206(4)-8 thereunder. The SEC is seeking disgorgement of ill-gotten gains, and a permanent injunction against Williamson.
The OFR issued a Stipulation and Consent Agreement with Williamson involving various Florida rules and statutes to include engaging in outside business activity, selling away, unregistered activity, selling unregistered securities, a Ponzi scheme, and several counts of fraud. The OFR is seeking payment of restitution owed to investors and a permanent bar against Williamson.
Mr. Ferrer commended the investigative efforts of the FBI and OFR. The case is being prosecuted by Assistant U.S. Attorney Alejandro Soto.
An Information contains mere allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
South Carolina Sex Offender Sentenced for Failing to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States District Judge Marcia Morales Howard has sentenced Nicodemus Darnell Jefferson (40, Jacksonville) to 16 months in federal prison for failing to register as a sex offender after traveling to Florida from Maryland. He was also ordered to serve a five-year term of supervised release following his incarceration. Jefferson pleaded guilty on March 27, 2015.
According to court documents, Jefferson was convicted in 1998 of criminal sexual conduct with a minor in Charleston County, South Carolina. Subsequent to his conviction, and between March 17, 2014, and September 30, 2014, Jefferson traveled from Maryland to Florida, where he has since resided. He failed to register in Florida as a sex offender as required by the Sex Offender Registration and Notification Act. On September 30, 2014, Jefferson was arrested at his residence. At the time of his arrest, he acknowledged that he had been living there since June 2014. Jefferson had obtained a Florida identification card on August 4, 2014, that referenced a different Jacksonville address as his residence.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders.
This case was investigated by the Jacksonville Sheriff’s Office, the United States Marshals Service, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Somerset County, New Jersey, Man Sentenced to 34 Years in Prison for Production and Transportation of Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Watchung, New Jersey, man was sentenced today to 408 months in prison for producing and transporting sexually explicit videos of children, U.S. Attorney Paul J. Fishman announced.
Patrick T. Deck, 54, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of transportation of child pornography. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Aug. 12, 2012, Deck was arrested at the Land of Make Believe amusement park in Hope, New Jersey, by the N.J. State Police for allegedly filming children, without their or their parents’ knowledge, in the men’s restroom. The following day, law enforcement officers executed a search warrant at Deck’s home in Watchung and discovered multiple videos and images containing child sexual abuse on Deck’s computers and other electronic devices.
Deck also admitted that between 1997 and 2010, he transported two minors, beginning when they were approximately 11 years old, to locations across the country, including New Jersey, New York, Pennsylvania, Colorado and Montana for the purpose of filming the minors in sexually explicit conduct. Deck produced the videos and images of child pornography and then transported those images back to his home in Watchung. In 1988, Deck was convicted in N.J. Superior Court, Burlington County, of two counts of endangering the welfare of a child. Those convictions arose out of prior incidents where Deck photographed or filmed minors engaged in prohibited sexual acts.
As part of his guilty plea, Deck agreed to forfeit the video cameras and other devices that he used to commit the offense. He will also be required to register as a sex offender.
In addition to the prison term, Judge Salas sentenced Deck to serve a lifetime of supervised release.
U.S. Attorney Fishman credited special agents of the Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Warren County Prosecutor’s Office, under the direction of Prosecutor Richard T. Burke, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: James Wronko Esq., Somerville, New Jersey