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Friday 22 May 2015
Tampa Man Sentenced to More Than Ten Years for Bank Robbing SpreeRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew has sentenced Todd Michael Vincent (48, Tampa) to 10 years and 10 months in federal prison for armed bank robbery. Vincent pleaded guilty to the charges on January 28, 2015.
According to court documents, between August and October 2014, Vincent robbed several bank branches, including Synovus Bank (Tampa), BB&T Bank (Seffner), and US Ameribank (Tampa). He also attempted to rob a Bank of America branch in Riverview. During several of the robberies, Vincent presented bank tellers with a note stating, “I have a gun.” On at least one occasion, he entered the bank, pointed a gun at the teller and said, “I want all of your money…I will shoot you.”
On September 11, 2014, law enforcement received a tip identifying Vincent from bank security photos, along with his possible location. After a brief chase by law enforcement, Vincent was apprehended. In his pocket was $1777.79. Along his flight path, officers recovered a bag containing $9100.
This case was investigated by the FBI and the Hillsborough County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Natalie Hirt Adams and Megan Kistler.
Tampa Coin Dealer Pleads Guilty to Conspiracy to Commit Bank FraudRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Mark Yaffe (55, Tampa) has pleaded guilty to one count of conspiracy to commit bank fraud. He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Yaffe was vice-president and principal of National Gold, Exchange, Inc. (“NGE”), a Tampa-based company in the business of warehousing, retailing, and trading rare coins. NGE entered into a series of loan agreements with Sovereign Bank (“Sovereign”), whereby Sovereign agreed to lend up to approximately $35 million to NGE, secured by NGE’s assets. Yaffe The loan agreements limited the amount of the $35 million NGE could borrow at any given time, using a formula that considered the value of NGE’s assets, which served as collateral for the loans. To make calculation of the formula possible, NGE was required to submit a monthly “borrowing base report,” along with back-up documents, regarding the value of its assets. The loan agreements also gave Sovereign the right to perform unannounced audits of NGE to verify that NGE had sufficient collateral.
On July 10, 2009, NGE began an unannounced audit at NGE. In connection with the audit, on July 11, 2009, Yaffe provided members of Sovereign’s audit team with a false and fraudulent borrowing base report, falsely inflating the value of NGE’s assets. In this report, he included fictitious sales to entities that he knew did not exist: $2,221,975 in false sales to Rifkin Management, Inc., (“Rifkin”) and $2,623,308 in false sales to Tudor Trust. Yaffe also submitted false invoices to Sovereign claiming to prove these fictitious sales and provided to Sovereign contact information for Rifkin and Tudor Trust that was false. An NGE employee reports that Yaffe instructed the employee to lie to Sovereign officials about the fictitious customers and sales. Yaffe then caused approximately $3,049,581 to be transferred out of two NGE bank accounts that were part of Sovereign’s collateral. Under the plea agreement, Yaffe has agreed to forfeit this amount.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by U.S. Department of Justice Trial Attorney Timothy Loper and Assistant United States Attorney Rachelle DesVaux Bedke.
Smithtown Doctor Indicted for the Illegal Distribution of Controlled Substances Without Legitimate Medical NeedRead the Press Release
A federal grand jury indicted Smithtown, New York, doctor Mitchel Fagin this morning on charges that he illegally distributed oxycodone, methodone and alprazalom, highly addictive prescription pain medications.1 The defendant is scheduled to be arraigned this afternoon before United States District Judge Joanna Seybert at the United States Courthouse located in Central Islip, New York.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York.
Fagin surrendered this morning to the Long Island District Office Tactical Diversion Squad, which is comprised of federal agents and officers of the Nassau County, Rockville Centre, and Port Washington police departments. The 12-count indictment and public filings allege that between May 2010 and September 2014, Fagin, a pain management doctor, issued mutltiple controlled substance prescriptions without a legitimate medical purpose to individuals he knew were addicts. Fagin is also alleged to have issued controlled substance prescriptions in exchange for sexual favors from female patients. Fagin was previously investigated by the Office of Professional Medical Conduct resulting in at least one suspension of his medical license.
Acting United States Attorney Currie stated, “Dr. Fagin allegedly used his prescription-writing privileges not to heal, as was his duty, but to victimize vulnerable patients. Doctors who issue prescriptions without a legitimate medical need are violating the law and will be held accountable.” Mr. Currie extended his grateful appreciation to each of the law enforcement agencies for their assistance in this case.
DEA Special Agent-in-Charge Hunt stated, “As detailed in the indictment, Dr. Fagin’s house was a medicine chest for opioid addicts to fuel their addiction. Dr. Fagin allegedly abused his position as a medical practitioner and prescribed medications for non-medical needs. I commend the Long Island District Office Tactical Diversion Squad and the U.S. Attorney’s Office, Eastern District of New York, for their diligent work throughout this investigation.”
If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment and a $1 million fine.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the United States Department of Health and Human Services’ Center for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. So far, the Prescription Drug Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 15 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Lara Treinis Gatz is in charge of the prosecution.
The Defendant:
Name: MITCHEL FAGIN
Age: 63
Residence: Smithtown, New York
______________________________________________________________________________
1. The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Slidell Man Charged with Operating National Ponzi SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOHN SPOSATO, age 64, of Slidell, was charged today in a one-count Bill of Information with wire fraud for his role in promoting and operating a national Ponzi scheme.
According to the Bill of Information, since approximately 2010, SPOSATO was affiliated with, owned, or operated numerous different companies, including: Pegasus Investment & Development Corporation, LLC; Pegasus Investments; Oil Eaters, LLC; Organic Miracle Incorporation; S&J Corporate Properties, LLC; Pegasus Demolition & Debris Removal Service, LLC; and Pegasus Truck Lines, Inc. SPOSATO represented to potential investors that the companies were all investment entities that offered participants the chance to invest in various low-risk, high-reward investment vehicles, including international bank instruments, cutting edge oil remediation and recovery products, and real estate transactions. SPOSATO primarily relied upon word-of-mouth and e-mail correspondence, in which he fraudulently represented that he had knowledge and expertise in financial investing, to attract new investors. SPOSATO told investors that the alleged investments were safe, secure, and never at risk.
SPOSATO did not actually invest the money in any legitimate investment vehicle, instead using it to make retail purchases for himself and his friends for various goods and services, including luxury items such as a new Chevrolet Camaro for one girlfriend and breast augmentation surgery for another girlfriend. In total, between about January 2010, and April 2014, approximately forty-eight individuals invested approximately $811,305 with SPOSATO and his companies.
To perpetuate his scheme, SPOSATO promised guaranteed and extraordinarily high rates of return – rates much higher than market rates –or so called “guaranteed” investments to potential investors, such as a $25,000 investment in “oil-clean remediation work” in the Gulf of Mexico and another $25,000 investment in the purchase of “1,000,000 gallons of EP 55 Bio Fertile” fertilizer. SPOSATO promised that the first investment would result in a profit of $25,000 within approximately two weeks and the second investment would result in a profit of up to $3,000,000 within one year. SPOSATO provided prospective investors false or fraudulent documents to make the investments appear legitimate and to conceal the true nature of the Ponzi scheme. When investors became impatient, SPOSATO used new investor money to pay lulling payments to other investors, which he characterized as partial payments for investments with an overdue return, in an effort to give investors a false sense of security, to deceive investors into believing their money was invested legitimately, and to conceal the true nature of the Ponzi scheme.
If convicted, SPOSATO faces a maximum term of imprisonment of twenty years, followed by up to three years of supervised release, and a $250,000 fine per count.
U.S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
John Sposato Bill of Information.pdf (142.8 KB)
Sherman Jury Finds Pakistani National Guilty of International Drug Conspiracy and Money Laundering CrimesRead the Press Release
SHERMAN — A 49-year-old man from Karachi, Pakistan, has been found guilty of being a member of a large-scale drug trafficking organization responsible for illegally importing and distributing millions of counterfeit, adulterated, and misbranded pills in the Eastern District of Texas and throughout the United States, U.S. Attorney John M. Bales announced.
On May 14, 2015, a federal jury in Sherman, Texas, convicted Muhammad Aijaz Sarfraz of conspiracy to manufacture and distribute controlled substances and international money laundering conspiracy following a four-day trial before U.S. District Judge Amos Mazzant. Today, the Court entered a Preliminary Order of Forfeiture against Sarfraz, awarding the government a $38,967,372 money judgment based on a portion of the drug proceeds generated by the criminal enterprise.
According to information presented in court, from approximately March 2009 until Sarfraz’s arrest in April 2012, Sarfraz and his co-conspirators operated numerous illegal websites through which they distributed millions of illicit Schedule II, III, and IV controlled substances to Internet customers throughout the United States. Those pills included such popular prescription medications as OxyContin, Percocet, Adderall, Ritalin, Hydrocodone, Xanax, Valium, Ambien, and others. The counterfeit drugs were generally manufactured in China, Singapore, Malaysia, India, Pakistan, and Hong Kong. The pills, which were made to look like authentic prescription medications approved for use in the U.S. when validly prescribed by a physician, often contained incorrect active pharmaceutical ingredients or the wrong quantity and dosage strength of those substances. No physicians or medical professionals of any kind were involved at any stage of the drug distribution process. Anyone with access to the Internet, a credit card and a physical mailing address could order drugs from this criminal organization without a prescription or limits on quantity desired.
Key members of the group operated in Pakistan, India, the United Arab Emirates, and other foreign countries. Bulk pill shipments containing 25,000 to 50,000 or more pills at a time were shipped to ground operatives living in the U.S., who would re-ship the pills to co-conspirators operating in other parts of the country and fulfill Internet drug orders by drop-shipping individual pill bottles to Internet customers. Evidence presented at trial established that the drug trafficking organization was capable of distributing upwards of 1 million pills or more per month on average. This is believed to be one of the largest cases of its kind ever prosecuted in the United States in terms of pill quantities involved.
The criminal enterprise laundered money by moving drug proceeds from the United States to various foreign countries for the purpose of promoting the unlawful drug operation. Sarfraz and other conspirators also caused money to be moved back into the U.S. through foreign banks and shell companies for the purpose of funding U.S. operations by, for example, purchasing bulk pill bottles, postage and other shipping supplies, as well as paying ground operatives. It is estimated that the criminal enterprise may have generated as much as $100 million or more in proceeds between 2009 and 2012.
Several low-level ground operatives have been successfully prosecuted in the Eastern District of Texas and elsewhere over the past three years, but Sarfraz is the first upper-level member of the group to be apprehended and prosecuted. Sarfraz faces up to 20 years in federal prison on each of the two drug conspiracy and money laundering conspiracy charges for which he was convicted. A sentencing date has not yet been set.
This case was investigated by the Drug Enforcement Administration and Internal Revenue Service-Criminal Investigations Division, and was prosecuted by Assistant U.S. Attorneys Stevan Buys and Will Tatum.
Sex Trafficker, Christopher T. Bryant, Gets 40 Years in Federal Prison for Trafficking Three Minors in West Michigan and One Woman in ArizonaRead the Press Release
GRAND RAPIDS, MICHIGAN –Patrick Miles, U.S. Attorney for the Western District of Michigan announced today that Christopher T. Bryant, 25, of Detroit was sentenced to 40 years in federal prison for sex trafficking three minor girls in Lansing, Michigan, and one woman in Phoenix, Arizona. This is the second ever federal conviction for sex trafficking in West Michigan, following Eddie Jackson’s 2014 trial for sex trafficking minor girls in Muskegon and Grand Rapids, for which he is serving a 30-year federal sentence.
Bryant faced a minimum possible sentence of 15 years and a maximum of life. At the sentencing hearing today, Bryant refused to take responsibility for his actions. In delivering the 40-year sentence, Chief United States District Judge Paul L. Maloney described Bryant as "a man who is totally self-absorbed," "narcissistic to the extreme," and "a major risk to reoffend."
U.S. Attorney Miles stated, "This case involved yet another predator who took advantage of young girls and forced them into the sex trade. This defendant will now answer for his crimes with a long prison term. The U.S. Attorney’s Office and law enforcement throughout Western Michigan will continue to aggressively fight crimes against children, sex trafficking and human trafficking and see that those who commit these crimes will be brought to justice."
"The sentence handed down today holds Mr. Bryant accountable for his depraved criminal behavior, which violated those who are most vulnerable," stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. "The West Michigan Based Child Exploitation Task Force is committed to safeguarding our children and protecting our communities from the ills of human trafficking."
Bryant’s four victims all testified at trial, along with other witnesses and federal agents. The first testified that she and Bryant were in a relationship in Michigan, and he was repeatedly violent towards her. He took her to Phoenix with him in 2012, where he checked them into a cheap motel, took her across the city to a busy highway intersection, and made her walk the streets for money. He told her how to attract the attention of passing cars and how to walk, but when she refused to get into cars with customers, Bryant became irate. He violently raped her at the motel, and she ran for help the next morning after escaping from him at a fast food restaurant. The other three victims, all minors, testified that Bryant recruited them through Facebook, at a bus station, or through another teenage girl in 2014. He posted photographs of them online advertising them as prostitutes and took them to cheap motels around Lansing, where customers responded to the ads and paid to have sex with them. Bryant told the girls he would split the money with them, but he only gave them drugs and alcohol. When one of the girls stayed out too late one night, Bryant choked her and threatened he could kill her and no one would know.
Bryant has a long criminal history, including violent assaults on other women, drug dealing, home invasion, and a high-speed chase in a stolen car. He made a video in a hotel that was posted on Facebook in late 2013 in which Bryant bragged about pimping "for a living" and how this was "only the beginning."
The FBI and the Ingham County Sheriff’s Office investigated the case jointly. Assistant U.S. Attorneys Tessa Hessmiller and Russ Kavalhuna prosecuted the case. Bryant is linked to an alleged sex trafficking ring in Lansing involving Mariah Haughton and Jonathan Purnell, whose cases are pending in Ingham County.
Community members can help stop child sex trafficking in West Michigan by recognizing the warning signs and reporting suspicious activity to police. Teens who are vulnerable to being targeted by pimps are often discontent in school, absent from school or home, suicidal or suffering from low self-esteem, defiant towards authority, seeking quick sources of income, and craving independence. They may have a history of drug and alcohol use that a pimp can exploit as a means of "payment" to the teen. Warning signs of child sex trafficking include seeing an adult man with multiple teenagers – particularly girls – buying condoms, alcohol, cigarettes, clothing, hair/nail supplies, or prepaid gift or debit cards. Community members may encounter these suspicious situations at pharmacies, convenience stores, gas stations, fast food restaurants, grocery stores, casinos, and hotels.
If you suspect illegal activity involving child exploitation, contact law enforcement immediately. If a child is in imminent danger, call 911. To report suspicious activity involving possible sex trafficking, call: West Michigan Based Child Exploitation Task Force (WEBCHEX) at 616-456-5489; Homeland Security Investigations, Grand Rapids, at 616-235-3936 (x. 2215); or 1-800-THE-LOST® (National Center for Missing and Exploited Children).
The case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office, county prosecutor's offices, and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement.
END
Seventh Defendant Indicted on Federal Charge of Heroin Distribution Resulting in DeathRead the Press Release
Rock Island, Ill. – A Rock Island, Ill., man, Phil Trent, 50, of the 2900 block of 11 1/2 Ave., appeared in federal court this morning for arraignment on a charge of distribution of heroin resulting in death. Trent becomes the seventh defendant charged in the past year with distribution of heroin that resulted in death in the Rock Island Division of the U.S. Attorney’s Office for the Central District of Illinois.
The grand jury returned the indictment against Trent earlier this week; however, the indictment remained sealed pending Trent’s appearance in federal court before U.S. District Judge Sara Darrow, who scheduled Trent’s trial for July 27, 2015. Trent was also ordered to remain in the custody of the U.S. Marshals Service.
The two-count indictment alleges that on Aug. 29, 2014, Trent distributed heroin in Rock Island County, and that the heroin resulted in a death. Count two of the indictment alleges Trent also distributed heroin on Oct. 1, 2014.
In addition to Trent, since April 2014, six defendants have been charged with distribution of heroin resulting in death in the Rock Island Division:
Kyle Joseph Wilson, 25, address unknown, indicted in April 2014 on a charge of distributing heroin that caused the death of another person. On Sept. 24, 2014, Wilson pleaded guilty and is scheduled to be sentenced on July 23, 2015.
Steven Waldrip, 47, of Rock Island, Ill., indicted July 22, 2014, on four counts of distributing heroin, including one count of heroin distribution resulting in the death of another person. On May 15, 2015, Waldrip pleaded guilty to three counts of distributing heroin; Waldrip is scheduled for trial in July 2015, on the remaining charge of heroin distribution resulting in death.
Courtney Davis, 37, of Aledo, Ill., and Bradley DeVriese, 23, address unknown, indicted Feb. 18, 2015, charged with distribution of heroin on July 2, 2014, that resulted in death. A jury trial is scheduled for July 6, 2015, for DeVriese; Davis’s trial date is pending.
Kyle Hull, 22, of the 8500 block of Ridgewood Road, Rock Island, Ill., and Curtis Land, 52, of the 2900 block of 11 1/2 Ave., Rock Island, entered pleas of guilty on May 19, 2015, to distributing the fatal dose of heroin that resulted in a death last year. Land also pled guilty to distributing heroin on another occasion. Sentencing has been scheduled for Sept. 17, 2015.
During court hearings and according to court documents, Land admitted that he gave heroin to Hull in exchange for $90 on Aug. 29, 2014, and again on Aug. 30, 2014. Hull admitted that on Aug. 29, 2014, he purchased the heroin from Land, for his friend, and that he supplied a syringe to his friend to inject the heroin. Hull’s friend fell asleep after injecting the heroin in a park in Rock Island and Hull left. Hull checked on his friend later and found him unconscious, but did not call an ambulance. When Hull returned to the park on the morning of Aug. 30, Hull discovered his friend had died. Both Hull and Land admitted that the death was the direct result of the heroin distribution.
The charges against Trent, Hull and Land are the result of investigation by the Rock Island Police Department; Assistant U.S. Attorneys Don Allegro and Meredith DeCarlo are prosecuting the cases.
The charges against Davis and DeVriese were investigated by the Mercer County Sheriff’s Office and the Aledo Police Department. Assistant U.S. Attorneys Don Allegro and Meredith DeCarlo are prosecuting the case.
Charges against Wilson and Waldrip were investigated by the Bettendorf, Iowa Police Department, the Quad Cities Metropolitan Enforcement Group, and the U.S. Drug Enforcement Administration. The cases are being prosecuted by Assistant U.S. Attorneys Don Allegro and Micah Reyner.
The statutory penalty for distribution of heroin resulting in death is a mandatory minimum term of 20 years, and up to life, in prison, and a fine of up to $1,000,000. The statutory maximum penalty for each count of heroin distribution is 20 years in prison and a fine of up to $1,000,000.
Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent unless proven guilty.
Raleigh Identity Thief Sent to Prison for 7 Years for Role in Credit Card and Cigarette Trafficking SchemeRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that yesterday in federal court Chief United States District Judge James C. Dever, III sentenced SAIKU GANDO BARRIE, 28, of Raleigh, to serve a total of 7 years in prison, followed by 3 years of supervised release, on charges of Aggravated Identity Theft and Conspiracy to Commit Access Device Fraud. BARRIE was also ordered to make restitution to numerous victims.
According to the Indictment, BARRIE was a participant in a five year credit card and cigarette trafficking scheme. The purpose of the scheme was to use stolen credit card account information to purchase large quantities of cigarettes in North Carolina which were resold in New York. To carry out the scheme, participants acquired stolen credit card data from other conspirators and encoded the stolen data onto the magnetic strip of what appeared to be legitimate gift cards. Managers in the scheme, including BARRIE, then distributed the cards to “runners” who traveled to various gas stations, convenience stores, and grocery stores located around the state to purchase dozens of cartons of cigarettes at a time using the counterfeit gift cards. The runners returned the cigarettes to the managers in the scheme, who paid the runners a kickback. Managers, including BARRIE, periodically made trips to New York to sell the cigarettes on the black market for cash.
At the sentencing hearing, the Government argued for a 7 year prison sentence based upon a variety of factors, including the fact that the defendant had been involved in five separate arrest events with state authorities over time, but had been undeterred from the activity. The Government also argued that the case involved untold losses and large numbers of victims whose identities had been compromised. The defendant argued, through counsel, the he carried out the offenses in order to eat. The court specifically rejected this argument when it announced the lengthy prison sentence.
Investigation of BARRIE’s case was conducted by the United States Secret Service, with the assistance of the Raleigh Police Department. Assistant United States Attorney William M. Gilmore represented the United States.
Quincy Man Charged with Child PornographyRead the Press Release
BOSTON – Scot Letourneau, 42, of Quincy, was arrested and charged in federal court yesterday with receipt and possession of child pornography.
As alleged in the charging documents, law enforcement officers learned that an individual was trading images of child pornography on “Kik Messenger,” an instant messaging app, with another individual in Connecticut. After further investigation, law enforcement officers determined that an Internet IP address used in transmitting the contraband images was associated with Letourneau. On May 21, 2015, law enforcement officers executed a search warrant at Letourneau’s home, and a preliminary review of his mobile phone revealed that he exchanged images of child pornography with others using that phone. Investigators also learned that Letourneau had been convicted more than 10 years ago of distribution of child pornography.
In light of Letourneau’s prior conviction, the charge of receipt of child pornography provides for a mandatory minimum term of 15 years and no greater than 40 years in prison, and the charge of possession of child pornography provides for a mandatory minimum term of 10 years and no greater than 20 years in prison. Both statutes provide for a mandatory minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistance was also provided by the Connecticut State Police, the Quincy Police Department, and the U.S. Coast Guard. The case is being prosecuted by Assistant U.S. Attorney Seth B. Orkand of Ortiz’s Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Plummer Man Pleads Guilty to Violating the Bald and Golden Eagle Protection ActRead the Press Release
COEUR D'ALENE - Adrian Q. Brown-Sonder, 23, of Plummer, Idaho, pleaded guilty today to violating the Bald and Golden Eagle Protection Act, U.S. Attorney Wendy J. Olson announced. Brown-Sonder was charged by the United States Attorney’s Office on January 26, 2015.
According to the plea agreement, a confidential informant contacted Coeur d’Alene Tribal Police, who in turn contacted the FBI and U.S. Fish and Wildlife Service, and stated that Brown-Sonder killed eagles and other migratory birds. Several witnesses were interviewed and explained that Brown-Sonder admitted to them that he had killed hawks and eagles. A search warrant at the defendant’s residence resulted in the discovery of a large number of eagle and hawk feathers, as well as a wide array of bird skulls and feet. Two bald eagles, two golden eagles, two rough-legged hawks, two red-tailed hawks, and two unspecified dark-morph hawks were identified by a morphology examination.
Chairman of the Coeur d’Alene Tribal Council wrote a letter to U. S. Fish and Wildlife Service setting forth the tribe’s official position regarding hunting of eagles and other birds of prey, categorically condemning the killing of these birds and supporting protective federal laws. The Chairman wrote that even before the passage of these federal laws, “the tribe revered and admired eagles as symbols of strength and courage.”
The maximum punishment for the first violation of the Bald and Golden Eagle Protection Act is punishable by up to one year in prison, five years of probation, a maximum fine of $100,000, and up to one year of supervised release.
Sentencing is set for August 18, 2015, before U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated by Coeur d’Alene Tribe, U.S. Fish and Wildlife Services and the FBI.
Pasco County Man Federally Charged with Advertising for Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Russell Lee Orr (39, Trinity) has been indicted by a federal grand jury and charged with eight counts of advertising for child pornography. If convicted, he faces a mandatory minimum penalty of 15 years, up to 30 years, in federal prison, and a potential life term of supervision. Orr was arrested on May 21, 2015, at his residence in Trinity, Florida. Following his initial court appearance and a detention hearing later that same day, he was ordered detained.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.
This case was investigated by the St. Johns County Sheriff’s Office and the Federal Bureau of Investigation. It is being 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.
Ogden Man Sentenced to 150-Months in Federal Prison After Shooting at Special Deputy U.S. MarshalsRead the Press Release
SALT LAKE CITY – Lorenzo Puentes, age 38, of Ogden, pleaded guilty in federal court in Salt Lake City Thursday to assault on a federal officer with a dangerous weapon and discharging a firearm during a crime of violence.
U.S. District Judge Dee Benson accepted the guilty pleas and imposed a sentence of 150 months, including 30 months for the assault conviction and 120 months for discharging the firearm during a crime of violence, to run consecutively to each other. Puentes will be on supervised release for 60 months following the completion of his federal prison sentence. There is no parole in the federal prison system. As a special condition of his supervised release, he was ordered not to have any contact with any member or associate of a criminal street gang or prison gang either in person, by mail, by phone, by e-mail, by third party; or any other means.
Deputy United States Marshals were conducting surveillance at a residence in Ogden, Utah, on the evening of Nov. 4, 2014. Puentes, who had an outstanding no-bail arrest warrant for a weapons violation, was believed to be at the residence. During the evening, Puentes stepped outside of the residence to smoke a cigarette. He encountered three Special Deputy United States Marshals who verbally identified themselves as police officers. They are local police officers assigned to the U.S. Marshal Service’s Violent Fugitive Apprehension Strike Team.
Puentes raised his right arm, pointed a handgun at the deputies, and discharged one round toward the deputies. He then turned and ran from the officers. Deputies pursued Puentes approximately one block down the street and took him into custody. A bullet hole was located in a fence directly behind where the deputies were standing at the time of the gunshot. Law enforcement officers recovered the firearm in a nearby driveway the next morning.
“This incident demonstrates the danger that our task force officers face each day. I am proud of their bravery and their service to our community,” James A. Thompson, U.S. Marshal for the District of Utah, said today.
As a part of his plea agreement Thursday, Puentes admitted that he forcibly assaulted the three Special Deputy U.S. Marshals while they were engaged in their official duties. He admitted pointing the handgun toward them and firing a shot in their direction.
A federal grand jury returned an indictment charging Puentes with the two counts in November.
Monmouth County, New Jersey, Man Sentenced to 121 Months in Prison for Possessing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A previously convicted sex offender was sentenced today to 121 months in prison for uploading images of child sexual abuse to an online file-sharing network, U.S. Attorney Paul J. Fishman announced.
Layne Bracht, 32, of Highlands, New Jersey, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to an information charging him with one count of possession of child pornography. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:Bracht, who pleaded guilty to possession of child pornography in 2006, admitted that on Oct. 28, 2013, he knowingly placed images and videos depicting child sexual abuse into shared folders that others could access via a peer-to-peer network. Special agents of the FBI executed a search warrant at his residence in Highlands on Jan. 15, 2014 and seized digital evidence that contained numerous videos and images depicting child sexual abuse, including material involving prepubescent minors and sadistic or masochistic conduct. The digital evidence seized included three files previously downloaded from Bracht by law enforcement agents working in an undercover capacity on the peer-to-peer network.
In addition to the prison term, Judge Irenas sentenced Bracht to serve 15 years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey, and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Assistant Federal Public Defender Brian P. Reilly Esq., TrentonMoney Launderer for Marijuana Distribution Organization Pleads GuiltyRead the Press Release
Baltimore, Maryland – Richard Drummond, age 38, of Hyattsville, Maryland pleaded guilty today to conspiracy to engage in money laundering.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Chief James W. Johnson of the Baltimore County Police Department; Colonel Michael Kundrat, Chief of the Maryland Transportation Authority Police; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
According to Drummond’s plea agreement, he conspired with others to launder the proceeds from the sale of marijuana. The conspiracy distributed large quantities of marijuana in Maryland, Pennsylvania, Ohio and elsewhere, which generated hundreds of thousands of dollars in proceeds. Richard Drummond’s role in the conspiracy was to gather proceeds from various locations and deliver the cash to his co-conspirators. The proceeds were then deposited in various bank accounts, often in amounts exceeding $10,000, and transferred elsewhere to pay for the acquisition of additional drugs or to fund other activities by members of the conspiracy. Drummond admitted that he laundered between $200,000 and $400,000.
For example, on September 10, 2013, Drummond drove from Maryland to Ohio and took delivery of a white trash bag from a man at a gas station in Cincinnati, Ohio. Drummond then drove to a Family Dollar store and purchased a bag of rubber bands, and returned to his hotel. The following day, September 11, 2013, Drummond was stopped by officers of the Ohio Highway Patrol after he left Cincinnati. When he was stopped by police, Drummond had $96,500 in cash, separated into bundles held together by rubber bands. Extra rubber bands were also found in the vehicle. Drummond then drove back to Maryland. The next day Drummond met with a co-conspirator at a restaurant in Laurel, Maryland.
On October 31, 2013, Drummond traveled from California to Phoenix, Arizona with a co-conspirator. After police conducted surveillance, the vehicle operated by Drummond was stopped and the police recovered approximately $58,000 in cash, along with approximately 27 cellular phones, and an airline boarding pass in the name of the co-conspirator. Drug notations and tally sheets were also recovered, indicating that Drummond and his co-conspirator were engaged in the distribution of marijuana.
Drummond faces a maximum sentence of 20 years in prison for the money laundering conspiracy. As part of his plea agreement, Drummond will also be required to forfeit the cash seized during the 2013 traffic stops, totaling $154,500, as well as any assets derived from, acquired as a result of, or used to facilitate the commission of the money laundering or drug distribution conspiracies. U.S. District Judge Richard D. Bennett has scheduled sentencing for August 14, 2015 at 10:00 a.m.
United States Attorney Rod J. Rosenstein commended the DEA, Baltimore County Police Department, the Maryland Transportation Authority Police, IRS-Criminal Investigation and HSI-Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys James G. Warwick and Kenneth S. Clark, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Massena Woman Sentenced to 36 Months Jail in Identity Theft Tax Fraud CaseRead the Press Release
SYRACUSE, NEW YORK –United States Attorney Richard S. Hartunian and IRS Criminal Investigations, New York Field Office, Special Agent in Charge Shantelle P. Kitchen announced that Lacey Jane Hollinger, 27, of Massena, New York was sentenced on May 20, 2015 in connection with her convictions for mail fraud and aggravated identity theft. The case involved false federal income tax returns that resulted in the theft of over $200,000.00 from the IRS.
Hollinger was sentenced by United States District Court Judge David N. Hurd to serve twenty-four (24) months incarceration for aggravated identity theft and a consecutive term of one year and one day for mail fraud. She was also sentenced to serve three (3) years of supervised release following her release from prison and ordered to make restitution to the IRS in the amount of $212,317.00.
Lacey Hollinger was sentenced for her part of the fraud scheme, which took place in 2011 and 2012, when she contacted Massena area residents via Facebook and other electronic media to tell them they were eligible for a tax refund as part of a U.S. Government "stimulus program". No such program existed. Several dozen responded, providing personal identification information (date of birth, social security number, etc.). This information was then used to create fraudulent tax returns generating over $200,000.00 in tax refunds. Hollinger stole these funds after they were electronically deposited in bank accounts she controlled in Arizona.
Co-defendant, Elaine Monique Zavalas-Charres, is scheduled to be sentenced on June 10, 2015 for her role in the scheme.
"Tax fraud is a serious offense which we will continue to aggressively prosecute," said United States Attorney Richard S. Hartunian. "The use of the identities of innocent taxpayers to steal money from the government through the filing of fraudulent tax returns is on the increase. I urge people to take steps to protect themselves from these types of crimes."
How to reduce your risk
• Don’t routinely carry your Social Security card or any document with your SSN on it.
• Don’t give a business your SSN just because they ask – only when absolutely necessary.
• Protect your personal financial information at home and on your computer.
• Check your credit report annually.
• Check your Social Security Administration earnings statement annually.
• Protect your personal computers by using firewalls, anti-spam/virus software, update security patches and change passwords for Internet accounts.
• Don’t give personal information over the phone, through the mail or the Internet unless you have either initiated the contact or are sure you know who is asking.
The case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigations (Syracuse, New York Field Office), under the direction of Special Agent in Charge Shantelle P. Kitchen. It was prosecuted by Assistant United States Attorney Richard Southwick.
Manhattan U.S. Attorney Announces the Arrest of the Son of Former President of Honduras for Conspiring to Import Cocaine into the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration, today announced that FABIO PORFIRIO LOBO was arrested in the Republic of Haiti and brought to the United States on charges that he conspired to import cocaine into the United States. LOBO was presented and arraigned before U.S. Magistrate Judge Kevin Nathaniel Fox this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Fabio Lobo attempted to break U.S. law by conspiring to traffic in cocaine. Being the son of a former public official, though, does not mean that you are above the law.”
DEA Special Agent in Charge Mark Hamlet said: “The arrest of Fabio Porfirio Lobo proves, once again, that no one is above the law, Mr. Lobo will be prosecuted in a U.S. court thanks, in large part, to the great cooperation from our international partners, particularly the Government of the Republic of Haiti.”
LOBO’s father, Porfirio Lobo, served as president of Honduras between 2010 and 2014. According to the allegations in the Indictment,[1] which was previously unsealed in Manhattan federal court, LOBO conspired with others from 2009 to 2014 to violate U.S. narcotics laws prohibiting the importation of cocaine. Specifically, the Indictment charges LOBO with conspiring to (i) import five or more kilograms of cocaine into the United States from a foreign country; and (ii) distribute five or more kilograms of cocaine knowing and intending that it would be imported into the United States. The charge in the Indictment carries a maximum penalty of life in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge
Mr. Bharara praised the outstanding investigative work of the DEA’s Special Operations Division and New York Strike Force. Mr. Bharara also thanked the DEA’s Port-au-Prince Country Office, the Government of the Republic of Haiti and its Bureau de Lutte Contre le Trafic Illicite de Stupefiants, and the U.S. Department of Justice’s Office of International Affairs for their ongoing assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III, Michael D. Lockard, and Adam Fee are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
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[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Johnston in Great Falls on May 21, 2015, and entering pleas of Not Guilty were:
- MICHALENE FAST BUFFALO HORSE, a 61-year-old resident of Browning, appeared on charges of theft of federally provided welfare benefits by fraud and federal welfare assistance fraud. If convicted of the most serious charge contained in the indictment, FAST BUFFALO HORSE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General. PACER Case Reference. 15-23
Appearing before U.S. Magistrate Judge Lynch in Missoula on May 20, 2015, and entering pleas of Not Guilty were:
- JEREMY MICHAEL HANNUM, a 43-year-old resident of Loon Lake, Washington, appeared on charges of felon in possession of a firearm/armed career criminal. If convicted of the charge contained in the indictment, HANNUM faces life in prison, $250,000 in fines and 5 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Montana Highway Patrol. PACER Case Reference. 15-09
Appearing before U.S. Magistrate Judge Johnston in Great Falls on May 19, 2015, and entering pleas of Not Guilty were:
- JASON ARNOLD ROHRICH, a 39-year-old resident of Great Falls, appeared on charges of possession with intent to distribute methamphetamine. If convicted of the charge contained in the indictment, ROHRICH faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Drug Enforcement Administration and the Russell Country Drug Task Force. PACER Case reference. 15-30
Appearing before U.S. Magistrate Ostby in Billings on May 12, 2015, and entering pleas of Not Guilty were:
- TAJ TESFAYE HAYES, a 38-year-old resident of Oceanside, California, appeared on charges of transportation of a person with intent to engage in criminal sexual activity, interstate travel and use of interstate facility in aid of racketeering and false statements. If convicted of the most serious charges contained in the indictment, HAYES faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation, U.S. Marshals Service, Montana Division of Criminal Investigation and the Billings Police Department. PACER Case Reference. 15-50
Appearing before U.S. Magistrate Ostby in Billings on May 11, 2015, and entering pleas of Not Guilty were:
- JOSEPH LEE BROWN, a 19-year-old resident of Miles City, appeared on charges of possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious charge contained in the indictment, BROWN faces life in prison, $1,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration. PACER Case Reference. 15-39
Appearing before U.S. Magistrate Johnston in Great Falls on May 11, 2015, and entering pleas of Not Guilty were:
- CHANLER CHAZE WHITEGRASS, a 32-year-old resident of Browning, appeared on charges of strangulation, assault resulting in substantial bodily injury and assault with a dangerous weapon. If convicted of the most serious charges contained in the indictment, WHITEGRASS faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-31
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Godfrey Man Pleads Guilty to Multiple Business RobberiesRead the Press Release
On May 22, 2015, Joseph E. Schwank, a twenty-four year old Godfrey, Illinois, man pled guilty in federal district court, in East St. Louis, to one count of Bank Robbery and two counts of Interference with Commerce by Robbery (Hobbs Act Robbery), the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Schwank is scheduled for sentencing on September 16, 2015, at which time he faces a potential sentence for each count of up to 20 years in prison and/or a fine of up to $250,000, up to 3 years of supervised release after his prison term, a mandatory special assessment of $100, and restitution.
Court proceedings revealed that on March 2, 2015, Schwank entered a US Bank branch facility in Alton, Illinois, wearing a hunter’s hat and large white sunglasses. He approached a teller and handed her a note which read, "don’t be a hero put all of the money in your cash register on the counter for me robbery." A teller removed cash in the amount of $1,613 from a drawer and placed it in a bag. Schwank picked up the cash and then exited the bank. On February 23, 2015, Schwank entered a Pizza Hut restaurant in Alton, Illinois, wearing a disguise, walked to the counter, handed a bag to an employee, and stated, "Put the money in the bag." Schwank showed this employee a black airsoft gun he had in his waistband upon making this demand. The employee then provided Schwank with approximately $475 in cash. Schwank then fled from the restaurant. In a third robbery, Schwank entered Domino’s Pizza on March 3, 2015, in Bethalto, Illinois, wearing a disguise, and yelled, "This is a robbery. Give me all the money you have." After being handed approximately $53 in cash by an employee, Schwank fled.
This case was investigated by the Federal Bureau of Investigation and is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Four Indicted on Federal Gun Charges in Rock IslandRead the Press Release
Rock Island, Illinois - Four men have been indicted on separate federal gun charges in the Rock Island Division of the United States District Court, as announced by U.S. Attorney Jim Lewis, Central District of Illinois. A federal grand jury returned the indictments earlier this week but the charges remained sealed pending their arrests and court appearances.
Chavonte A. Bragg, 23, of the 900 block of 14th and ½ Street, Rock Island, IL, has been charged in a three-count indictment with possessing crack cocaine with intent to distribute, possessing a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. The indictment alleges that on April 22, 2015, Bragg possessed at least 28 grams of crack cocaine with the intent to distribute. The indictment also alleges Bragg possessed a handgun in furtherance of a drug trafficking crime, and that Bragg possessed that handgun after having been previously convicted of a felony offense. If convicted on all charges, the statutory maximum penalty is life in prison and a fine of up to $8,500,000. The case is being prosecuted by Assistant U.S. Attorney Micah Reyner, and the charges are the result of an investigation by the Rock Island Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Defendant Bragg appeared in federal court in Rock Island this morning for his initial appearance before U.S. District Judge Sara Darrow. Bragg was also ordered to remain in the custody of the U.S. Marshals Service.
Walker Hampton, 40, of Viola, Ill., has been charged in a four-count indictment with robbery, brandishing a firearm during and in relation to the robbery, possession of stolen firearms, and being a felon in possession of firearms. The indictment alleges that Hampton robbed two employees of the U.S. Post Office in Taylor Ridge, Ill., on Jan. 24, 2015, and that he brandished a handgun during and in relation to the robbery. The indictment further alleges that on Feb. 25, 2015, Hampton possessed stolen firearms and was a felon in possession of firearms. If convicted on all counts, Hampton faces a mandatory minimum sentence of seven years in prison and a statutory maximum of life in prison, and a fine of up to $1,000,000. Hampton was arrested on Feb. 25, on state charges in Mercer County, Illinois and will be transferred to federal custody to be arraigned in U.S. District Court in Rock Island. The case is being prosecuted by Assistant U.S. Attorney Micah Reyner; the charges are the result of an investigation by the Rock Island County Sheriff’s Office, the Mercer County Sheriff’s Office, the U.S. Postal Inspection Service, and the U.S. Bureau of Alcohol, Firearms, Tobacco, and Explosives. Hampton appeared in federal court in Rock Island this morning for his initial appearance before U.S. District Judge Sara Darrow. Hampton was also ordered to remain in the custody of the U.S. Marshals Service.
Kenneth Russell, 34, of the 500 block of 6th Street, Rock Island, Ill., has been charged with being a felon in possession of firearms. The indictment alleges that on April 16, 2015, Russell unlawfully possessed a handgun after having previously been convicted of a felony offense. If convicted, the statutory maximum penalty is ten years in prison, and a fine of up to $250,000. The case is being prosecuted by Assistant U.S. Attorney Micah Reyner, and the charges are the result of an investigation by the Quad City Metropolitan Enforcement Group, the Rock Island Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Jones appeared in federal court in Rock Island this afternoon for his initial appearance before U.S. District Judge Sara Darrow.
Brandon Willis McNeal, 24, of the 1600 block of 12th Avenue, Moline, Ill., was charged by the grand jury earlier this week with being a felon in possession of a firearm. The indictment remained sealed pending McNeal’s arrest. The indictment alleges that on Apr. 27, 2015, McNeal unlawfully possessed a handgun after having previously been convicted of a felony offense. If convicted, the statutory maximum penalty is ten years in prison, and a fine of up to $250,000. The case is being prosecuted by Assistant U.S. Attorney John Mehochko, and the charges are the result of an investigation by the Moline Police Department and the Federal Bureau of Investigation. McNeal appeared in federal court in Rock Island this afternoon for his initial appearance before U.S. Magistrate Judge Stephen B. Jackson, Jr. McNeal was also ordered to remain in the custody of the U.S. Marshals Service.
Members of the public are reminded that an indictment is merely an accusation; the defendants are presumed innocent unless proven guilty.
Former Postal Worker Charged with Stolen Identity Refund FraudRead the Press Release
NEWARK, N.J. – A former postal worker who allegedly used stolen identities to assist in the filing of fraudulent tax returns to generate false U.S. Treasury checks was charged today for his involvement in the scam, U.S. Attorney Paul J. Fishman announced.
Luis Martin, 24, of Trenton, New Jersey, was arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, special agents of the U.S. Postal Service Office of Inspector General, and special agents of the U.S. Secret Service. He is charged by complaint with one count of stealing government funds. He is scheduled to make his initial appearance today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the complaint:
Background on Stolen Identify Refund Fraud
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
- SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
- They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
- With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
The Investigation
From June 2014 through February 2015, Martin allegedly caused to be filed 13 fraudulent Form 1040s, claiming $75,380 in fraudulent tax refund payments from the U.S. Treasury. He allegedly used his position as a postal worker in Monmouth County, New Jersey, to facilitate the scheme.
The count of theft of government funds with which Martin is charged is carries a maximum potential penalty of 10 years in prison and a fine of up to $250,000, or twice the gain or loss caused by the offense.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica S. Weyler; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, with the investigation leading to today’s arrest and charge.
The government is represented by Assistant U.S. Attorneys Melissa Wangenheim and Elisa Wiygul of the General Crimes Unit in Newark.
The charges and allegations contained in the Complaint are merely accusations, and the Defendant is considered innocent unless and until proven guilty.
Defense counsel: Carl J. Herman Esq., West Orange, New Jersey
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
Former Plymouth Finance Director Sentenced to 30 Months in Prison for Embezzling More Than $800KRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID J. BERTNAGEL, 41, of Thomaston, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in Bridgeport to 30 months of imprisonment, followed by three years of supervised release, for embezzling more than $800,000 from the Town of Plymouth. Judge Meyer also ordered BERTNAGEL to perform 1,500 hours of community service while on supervised release.
According to court documents and statements made in court, from October 2011 through October 2014, BERTNAGEL was employed as the Finance Director for the Town of Plymouth. During that time period, BERTNAGEL issued 207 checks totaling approximately $808,030 from the Town’s payroll account to himself. BERTNAGEL used the embezzled funds to make mortgage payments, pay credit card bills, fund home improvement projects and purchase more than $100,000 in coins, stamps and other collectibles. He also converted more than $182,000 of the stolen funds by way of cashed checks, ATM withdrawals and money orders.
In addition, BERTNAGEL’s federal tax returns for the 2012 and 2013 tax years failed to report any of his embezzled income, resulting in a tax loss to the government of $145,564 for those two years. BERTNAGEL also did not file a tax return with the IRS for the 2011 tax year.
BERTNAGEL was arrested on January 20, 2015. On February 20, 2015, he pleaded guilty to one count of theft from a local government receiving federal funds and one count making and subscribing a false tax return.
Judge Meyer ordered BERTNAGEL to make restitution in the amount of $808,029.94 to the Town of Plymouth, and to cooperate with the IRS to pay all outstanding taxes, penalties and interest. BERTNAGEL also has agreed to forfeit more than $45,000 that he held in bank accounts, and assorted jewelry, stamps, coins and other collectibles that were seized on the date of his arrest.
This matter was investigated by the Connecticut Public Corruption Task Force, which includes the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division, U.S. Postal Inspection Service, U.S. Department of Housing and Urban Development – Office of Inspector General and U.S. Department of Health and Human Services – Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
Citizens are encouraged to report corrupt activity to the Connecticut Public Corruption Task Force by calling 1-800-CALL-FBI (1-800-225-5324).
Former Deputy Court Clerk Pleads to Embezzling $24,000 from GovernmentRead the Press Release
Memphis, TN – A former Deputy Court Clerk pled guilty Thursday to embezzling more than $24,000 from the City of Memphis during a year-long scheme.
According to the indictment, from December 1, 2013 to December 1, 2014, Tammy Brooks-Carpenter, a Deputy Court Clerk at the time, voided 248 payments made by customers to the City Court Clerk’s office for traffic fines. By doing so, she was able to steal $24,011.50 of the approximate $43,230.50 paid to the government over that period.
Brooks-Carpenter’s illegal actions placed her in violation of Title 18, United States Code, Section 666(a)(1)(A), which makes it a crime to embezzle money from a local government entity that receives in excess of $10,000 of federal assistance during a 12-month period.
During Brooks-Carpenter’s employment at the City Court Clerk’s Office, her duties included accepting payments from customers who were issued motor vehicle citations by the City of Memphis. Brooks-Carpenter was required to enter all transactions into the Electronic Ticket Information System (ETIMS), which recorded the payments. But instead of submitting full payments to the ETIMS System, she voided them and entered in smaller amounts. The remaining funding would then be converted for Brooks-Carpenter’s personal use.
As a result of Brooks-Carpenter not entering full payments, customers who paid their traffic tickets would receive a "Blue Letter," essentially a written message sent out by the City of Memphis to individuals who haven’t paid a fine in the designated timeframe.
Brooks-Carpenter faces up to 10 years in prison and a fine of up to $250,000 when sentenced.
U.S. District Judge John T. Fowlkes, Jr., who presided over the court, set sentencing for August 21, 2015 at 10 a.m. Assistant U.S. Attorney Brian K. Coleman is representing the government in this case.
The Federal Bureau of Investigation, Memphis Police Department, and the Tarnished Badge Task Force investigated this case.
Facebook Predator Sentenced to 29 Years in Prison for Child Pornography and Sexual Extortion OffensesRead the Press Release
SACRAMENTO, Calif. — Jordan James Kirby, 23, of Paradise, was sentenced today by United States District Judge Garland E. Burrell Jr. to 29 years in prison for production of child pornography and enticement of a minor, United States Attorney Benjamin B. Wagner, FBI Special Agent in Charge Monica M. Miller, Butte County District Attorney Michael L. Ramsey, and Paradise Police Chief Gabriela F. Tazzari‑Dineen announced.
According to court documents, between 2011 and 2013, Kirby used various online identities on Facebook to solicit women and juvenile girls for lascivious and sexually explicit photographs, which he would then use them to extort them. Generally, Kirby’s initial posts stated that he was an agent for a modeling agency and offered thousands of dollars to girls for photographs of themselves in their underwear, bikinis, or various stages of undress. As an inducement, Kirby told the girls that he had come into a large amount of money, and sent pictures of himself holding a large wad of cash, or a large amount of cash spread on his computer. After receiving the desired photos, Kirby used the embarrassing pictures to extort or attempt to extort sex acts from victims. On March 6, 2015, Kirby pleaded guilty to two counts of enticement of a minor, three counts of attempted production of child pornography, and one count of attempted enticement of a minor. The victims were between the ages of 10 and 15.
U.S. Attorney Wagner said: “While always reprehensible, on-line exploitation and extortion of under-aged victims inflicts very real and lasting harm upon our community’s most vulnerable victims. We will continue to work together with our federal and local law enforcement partners to bring such predators to justice.”
“Kirby took unlawful and inappropriate pictures of multiple children, using social media as a platform for his crimes, and then extorted an threatened children to obtain more photographs. His is conduct is reprehensible,” said Supervisory Special Agent Monica M. Miller. “Kirby committed his crimes by exploiting the anonymity and distance of internet communications. This case highlights the need for family dialogue about the potential dangers of online interaction. Social media platforms present safety risks that are akin to any public space and all users should know the steps to take to report suspicious activity. In this case, prompt response from the victims’ parents enabled law enforcement to identify Kirby, ceasing his ability to continue to victimize others. We thank our law enforcement partners for the collaborative effort to identify Kirby and ensure that he faced justice for his crimes.”
District Attorney Michael L. Ramsey said: “I appreciate the collaborative work with both the local and federal agencies that resulted in taking a predator off of the streets for the next twenty-nine years.”
Chief Tazzari-Dineen said: “The Paradise Police Department considers the safety of all citizens to be a top priority and it is especially true of children. A predator of young children has been removed from our community. We appreciate the collaboration and assistance of the local FBI Office and the Butte County District Attorney’s Office with this investigation.”
This case was the product of an investigation by the Federal Bureau of Investigation, the Paradise Police Department and the Butte County District Attorney’s Office. Assistant U.S. Attorney Sherry Haus prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
FBI Concludes Lengthy Investigation of Corrections Corporation of AmericaRead the Press Release
BOISE – After a fifteen-month investigation by the Federal Bureau of Investigation, the U.S. Attorney’s Office for the District of Idaho announced today that it is declining prosecution under federal public corruption statutes and federal criminal fraud statutes of any actors in connection with the Corrections Corporation of America (CCA) falsifying staffing rosters and understaffing at the Idaho Correctional Center. CCA operated the Idaho Correctional Center under a contract with the State of Idaho until the end of June 2014.
The FBI initiated an investigation in March 2014 to determine whether CCA or its employees defrauded the State of Idaho by falsifying staffing rosters and understaffing shifts. The investigation included the years from 2008 to early 2014. The FBI also investigated whether any state actors sought to delay, hinder or corruptly influence a state criminal investigation into CCA’s staffing practices and subsequent billings to the State of Idaho under the ICC contract. The Idaho State Police, which initiated an investigation in February 2014 when directed to do so by Governor C.L. “Butch” Otter, discontinued their investigation after meeting with the FBI in March 2014.
“The FBI’s detailed and thorough investigation did not produce evidence of a federal criminal violation,” announced U.S. Attorney Wendy J. Olson. “Rather, the evidence showed that the false entries and understaffing could be attributed only to relatively low-level CCA employees. No evidence obtained during the investigation showed that any CCA employee at the assistant warden level or above participated in creating the falsified rosters, or affirmatively knew that rosters were falsified at the time they were falsified. Likewise, no evidence showed that the false entries were made by the low-level employees with the intent to defraud the state of Idaho of money or property, as is required under the federal criminal fraud statutes.”
Olson continued, “In addition, no evidence obtained during the FBI investigation showed that state employees at the Idaho State Police, the Idaho Department of Correction or the Governor’s Office sought to delay, hinder or corruptly influence a state criminal investigation, as is required under the federal public corruption statutes. Rather, the evidence shows a series of miscommunications and uncorrected assumptions that lead to incorrect reports in the media and incorrect statements in related civil federal court proceedings that the Idaho State Police were conducting a criminal investigation, when in fact they were not.”
The media reports and court statements were made prior to February 2014 when Governor Otter ordered the Idaho State Police to conduct an investigation. “My office and the FBI met early on with the Idaho State Police detectives assigned in 2014 to conduct a criminal investigation,” said Olson. “Following that meeting, to ensure an investigation in which the public could have great confidence and to avoid any appearance of a conflict of interest in investigating activities of the Idaho State Police and other state agencies, we all agreed that it would be best for the FBI to initiate an investigation and for the Idaho State Police to discontinue their investigation. I commend the Idaho State Police and the Idaho Department of Correction for recognizing that a neutral, independent federal investigation was the best course of action in this matter. We have conducted that investigation, reviewed its results, and concluded that there is insufficient evidence to prove any federal criminal charges beyond a reasonable doubt. In such situations, we are obligated to decline prosecution.”
The FBI’s investigation included review of voluminous documents obtained from the Idaho State Police, the Idaho Department of Correction, the Governor’s Office and other state agencies. It also included review of documents obtained from CCA, depositions and pleadings in the related civil proceedings, and interviews of numerous witnesses.
“In assessing whether CCA, or anyone at CCA, violated federal fraud statutes by falsifying staffing rosters, the FBI and assigned prosecutors in this office looked closely at the contract between the state and CCA,” said Olson. “Under the contract’s terms, the state did not directly reimburse CCA for guard or staff hours worked. Rather, all evidence showed that the reimbursement was based on the number of inmates. Where contract terms, such as adequate staffing, were violated, the state had the option of obtaining liquidated damages for the contract violations. Evidence showed that CCA and ICC employees responsible for billing were unaware of the staffing issues or the falsified rosters. This evidence supports the finding that neither CCA nor its employees acted with the intent to defraud.”
The state of Idaho entered into a $1 million civil settlement with CCA in February 2014, prior to Governor Otter directing the Idaho State Police to conduct a criminal investigation. Prior to February 2014, media outlets reported that the Idaho State Police were conducting a criminal investigation. Those reports were based in part on an Idaho Department of Correction employee testifying in federal court in August of 2013 that the Idaho State Police were conducting such an investigation. Throughout 2013, Idaho Department of Correction and Idaho State Police representatives met regularly to address the inaccurate rosters and understaffing at ICC. In addition, the state of Idaho had retained independent auditing firm KPMG to conduct an audit of the staffing entries for 2012. “The evidence obtained during the investigation showed that although Idaho State Police representatives in the meetings never affirmatively represented that they were conducting a criminal investigation and consistently referred to the matter as civil, some Idaho Department of Correction employees believed that a criminal investigation was ongoing based on other statements and actions of Idaho State Police representatives,” said Olson. “Representatives from neither agency made further inquiry or attempted to publicly correct this incorrect assumption. While these miscommunications ultimately gave rise to suspicion of an effort to delay, hinder or influence a state criminal investigation, such miscommunications, unsupported by any other evidence, do not rise to the level of criminal conduct.”
Olson noted that the FBI investigation did not focus on whether understaffing resulted in additional violence within CCA, as alleged in various civil lawsuits brought against CCA and ICC. “The investigating FBI agents were certainly familiar with the allegations in the civil lawsuits but did not identify any evidence that would support a criminal civil rights charge,” said Olson. Olson noted that the FBI had previously conducted an investigation into inmate-on-inmate assaults at the Idaho Correctional Center and that her office had declined prosecution in October 2013 of any criminal civil rights charges based on evidence gathered in that separate investigation.
Everett Man Sentenced to Seven Years in Prison for Role as Supplier of Highly Pure MethamphetamineRead the Press Release
A 27–year-old Everett man who supplied highly pure methamphetamine to a drug trafficking organization operating in Western Washington was sentenced today in U.S. District Court in Seattle to seven years in prison and four years of supervised release for conspiracy to distribute methamphetamine, announced U.S. Attorney Annette L. Hayes. JAIME ARAUJO supplied the highly pure methamphetamine to a number of different drug dealers operating in Whatcom, Skagit and Snohomish Counties. ARAUJO was arrested in March 2014 following a lengthy wiretap investigation of heroin and methamphetamine trafficking. In ARAUJO’s residence law enforcement recovered highly pure methamphetamine, more than $15,000 in cash and evidence of multiple wire transfers of money to Mexico. At sentencing U.S. District Judge Robert S. Lasnik said ARAUJO “had a serious part in a drug trafficking organization wreaking havoc in the community.”
According to records filed in the case, ARAUJO was identified in court authorized wire-taps as the supplier of highly pure methamphetamine to various drug dealers. In recorded phone calls ARAUJO used coded phrases as he talked with others about drug deals and drug smuggling. In one instance he described bringing kilograms of methamphetamine north in a suitcase on a bus. Evidence recovered at ARAUJO’s residence revealed he had been transferring drug money to Mexico, and planned to take drug cash to Mexico to purchase properties. Even after his arrest and incarceration at the Federal Detention Center at SeaTac, ARAUJO made statements on recorded telephone calls that indicate he was still trying to control his drug operation.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the Drug Enforcement Administration (DEA, Bellingham Resident Office), the Whatcom County Drug and Gang Task Force, Skagit County Inter-local Drug Enforcement Unit, Snohomish Regional Drug and Gang Task Force, the U.S. Secret Service, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) and Customs and Border Protection Air and Marine Division.
The case was prosecuted by Assistant United States Attorneys Steven Masada and Karyn Johnson.
Detroit-Area Neurosurgeon Admits Causing Serious Bodily Injury to Patients in $11 Million Health Care Fraud SchemeRead the Press Release
A Detroit-area neurosurgeon pleaded guilty today in two separate criminal cases that resulted in serious bodily injury to his patients and more than $11 million in Medicare, Medicaid and private insurance companies.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Service Office of Inspector General (HHS-OIG), Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Los Angeles Region and Special Agent in Charge Marlon Miller of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Detroit Field Office made the announcement.
“Disregarding his Hippocratic oath to do no harm, Dr. Sabit enriched himself by performing unnecessary, invasive spinal surgeries and implanting costly and unnecessary medical devices, all at the expense of his patients’ health and welfare,” said Assistant Attorney General Caldwell. “Doctors who sell their medical judgment and ethics for personal profit endanger the lives and safety of vulnerable patients who count on their advice to make life-altering decisions. The Criminal Division of the Department of Justice will continue to prioritize the prosecution of doctors whose criminal behavior puts patients at risk.”
“This case of health care fraud is particularly egregious because Dr. Sabit caused serious bodily injury to his patients by acting out of his own greed instead of the best interests of his patients,” said U.S. Attorney McQuade. “Not only did he steal $11 million in insurance proceeds, but he also betrayed his trust to patients by lying to them about the procedures that were medically necessary and that were actually performed.”
Aria O. Sabit, M.D., 39, of Birmingham, Michigan, entered his guilty pleas in both criminal cases at a hearing before U.S. District Judge Paul D. Borman of the Eastern District of Michigan. Sabit pleaded guilty to four counts of health care fraud, one count of conspiracy to commit health care fraud and one count of unlawful distribution of a controlled substance, resulting in losses to Medicare, Medicaid and various private insurance companies. A sentencing hearing is scheduled for Sept. 15, 2015.
According to court documents, Sabit was a licensed neurosurgeon who owned and operated the Michigan Brain and Spine Physicians Group with various locations in the Eastern District of Michigan, including Southfield, Michigan, Clinton Township, Michigan, and Dearborn, Michigan, which opened in approximately April 2011.
During his guilty plea today, Sabit admitted that he derived significant profits by convincing patients to undergo spinal fusion surgeries with instrumentation (meaning specific medical devices designed to stabilize and strengthen the spine), which he never rendered, and subsequently billing public and private healthcare benefit programs for those fraudulent services.
Sabit further admitted he operated on patients and dictated in his operative reports—that he knew would later be used to support his fraudulent insurance claims—that he had performed spinal fusion with instrumentation, which he never performed. This invasive surgery caused serious bodily injury to the patients. Sabit admitted that his operative reports and treatment records contained false statements about the procedures performed, and the instrumentation used in the procedures. Sabit also admitted that, on occasion, he would implant cortical bone dowels and falsely dictate in his operative reports that he had implanted instrumentation. Sabit, then fraudulently billed public and private health care programs for instrumentation, when in fact the implants were tissue. Sabit admitted he failed to render services in relation to lumbar and thoracic fusion surgeries, including in certain instances, billing for implants that were not provided.
Sabit also admitted that, prior to moving to Michigan, he was a resident of Ventura, California, and a licensed neurosurgeon in California. He admitted that in approximately February 2010, he became involved with Apex Medical Technologies LLC (Apex) while he was on the staff of a California hospital.
Apex was owned by another neurosurgeon and three non-physicians who operated Apex as a physician-owned distributorship and paid neurosurgeons lucrative illegal kickbacks tied directly to the volume and complexity of the surgeries that the surgeons performed, and the number of Apex spinal implant devices the surgeons used in their spine surgeries.
In exchange for the opportunity to invest in Apex and share in its profits, Sabit admitted that he agreed to convince his hospital to buy spinal implant devices from Apex and use a sufficient number of Apex spinal implant devices in his spine surgeries. Sabit further admitted that he and Apex’s co-owners used Apex to operate an illegal kickback scheme. In doing so, they concealed Sabit’s involvement in Apex from outsiders. Sabit then required the hospitals and surgical centers where he and his fellow neurosurgeon performed surgeries to purchase spinal implant devices from Apex.
Sabit admitted that his involvement in Apex, and the financial incentives provided to him by Apex and his co-conspirators, caused him to compromise his medical judgment and cause serious bodily injury to his patients by performing medically unnecessary spine surgeries on some of the patients in whom he implanted Apex spinal implant devices. Sabit admitted that on a few occasions, the money he made from using Apex spinal implant devices motivated him either to refer patients in for spine surgery who did not medically need surgery or refer his patients for more complex surgeries, such as multi-level spine fusions, that they did not need.
Sabit also admitted that the financial incentives provided to him by Apex and his co-conspirators caused him to “over instrument” his patients (meaning Sabit used more spinal implant devices than were medically necessary to treat his patients) in order to generate more sales revenue for Apex, which resulted in serious bodily injury to his patients.
The Michigan case was investigated by the FBI, HHS-OIG and ICE. The California case—which was subsequently transferred to the Eastern District of Michigan—was investigated by the FBI and HHS-OIG. The Michigan case is being prosecuted by Assistant U.S. Attorneys Regina R. McCullough and Philip A. Ross of the Eastern District of Michigan. The California case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan, and is being prosecuted by Senior Trial Attorney Jonathan T. Baum and Trial Attorneys Dustin Davis and Blanca Quintero of the Criminal Division’s Fraud Section.
Sabit is also a defendant in two civil False Claims Act cases brought by the Department of Justice in the U.S. District Court of the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Department of Justice Establishes Policy Guidance on Domestic Use of Unmanned Aircraft SystemsRead the Press Release
The Department of Justice issued agency-wide policy guidance today on the use of Unmanned Aircraft Systems (UAS) that sets standards of use and management controls of UAS by the department and its components.
UAS are used at times by law enforcement agencies as cost-effective, efficient and potentially life-saving tools to support public safety efforts. The policy highlights protections of privacy, civil rights and liberties and makes clear that UAS use must be consistent with the protections afforded by the U.S. Constitution. Justice Department components are barred from using UAS solely for the purpose of monitoring activities protected by the First Amendment, and components can only operate UAS on properly authorized investigations and activities. The collection, retention and dissemination of information collected by UAS is also subject to Privacy Act protections.
To ensure accountability, the department will also require that personnel operating UAS are appropriately trained and supervised, including but not limited to a mandatory training on the department’s policies. Annual privacy reviews will be conducted to ensure compliance with the department policy, existing laws and regulations and to identify potential privacy risks.
The guidance issued today is a result of various discussions and research – and meetings will continue to be held at least twice a year to ensure that the department strikes the appropriate balance between its law enforcement and national security missions and respect for civil rights and civil liberties.
Justice Department UAS Policy
Court approves three-year plan to complete desegregation in Avoyelles Parish schoolsRead the Press Release
WASHINGTON – Last night, the U.S. District Court for the Western District of Louisiana approved a comprehensive consent order filed by the Justice Department, the Avoyelles Parish School Board and private plaintiffs in United States v. Avoyelles Parish School Board. The consent order requires the school district to implement remedies in student assignment and discipline to complete the desegregation of the Avoyelles Parish school system.
The Avoyelles Parish School Board serves 5,400 students and has been operating under a continuing duty to desegregate its schools since 1967.
The court retained jurisdiction over the case to ensure that the school board fully implements the relief required by the consent order and complies with applicable federal law. The district may move for dismissal of the case if it successfully complies with the consent order for three years, during which time the school board must:
- Implement a new student assignment and transfer policy, including better address verification measures;
- Adopt a uniform admission process for the school system’s charter school along with a rigorous publicity and outreach program directed toward African-American students;
- Strengthen advertising and marketing of the New Tech magnet program, which is located at a majority African-American high school;
- Conduct a comprehensive study to determine whether a magnet program can be established at a racially identifiable African-American elementary school and take proactive steps to encourage white students to transfer to the school;
- Ensure classes within schools are desegregated;
- Revise discipline policies to reduce racial disparities in the use of exclusionary discipline and expand the school board’s positive behavior interventions and supports program; and
- Hire an experienced consultant to monitor and report annually on the school board’s efforts to comply with the consent order.
consent_order_ecf_330_05-21-15.pdf (2.63 MB)
“The Avoyelles Parish School Board’s unanimous vote to approve the consent order reflects our shared goal of securing equal educational opportunities for all students,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We are confident that this agreement will bring meaningful progress, and we look forward to working closely with the School Board over the next three years to bring this case to a successful close.”
“My office is committed to ensuring that this district’s schools provide all students with equal educational opportunities,” stated U.S. Attorney Stephanie A. Finley of the Western District of Louisiana. “I applaud the Avoyelles Parish School Board for its efforts to eliminate the effects of state-mandated segregation. It is our goal to assist in any way possible so that the Consent Order will work to provide all students in Avoyelles Parish with a quality education, a safe and fruitful learning environment, and academic offerings to help them achieve their dreams.”
Promoting school desegregation and enforcing Title IV of the Civil Rights Act of 1964 is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Court Approves Three-Year Plan to Complete Desegregation in Avoyelles Parish, Louisiana SchoolsRead the Press Release
Last night, the United States District Court for the Western District of Louisiana approved a comprehensive consent order filed by the Justice Department, the Avoyelles Parish School Board, and private plaintiffs in United States v. Avoyelles Parish School Board. The consent order requires the school district to implement remedies in student assignment and discipline to complete the desegregation of the Avoyelles Parish school system.
The Avoyelles Parish School Board serves 5,400 students and has been operating under a continuing duty to desegregate its schools since 1967.
The court retained jurisdiction over the case to ensure that the school board fully implements the relief required by the consent order and complies with applicable federal law. The district may move for dismissal of the case if it successfully complies with the consent order for three years, during which time the school board must:
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Implement a new student assignment and transfer policy, including better address verification measures;
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Adopt a uniform admission process for the school system’s charter school along with a rigorous publicity and outreach program directed toward African-American students;
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Strengthen advertising and marketing of the New Tech magnet program, which is located at a majority African-American high school;
-
Conduct a comprehensive study to determine whether a magnet program can be established at a racially identifiable African-American elementary school, and take proactive steps to encourage white students to transfer to the school;
-
Ensure classes within schools are desegregated;
-
Revise discipline policies to reduce racial disparities in the use of exclusionary discipline and expand the school board’s positive behavior interventions and supports program; and
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Hire an experienced consultant to monitor and report annually on the school board’s efforts to comply with the consent order.
“The Avoyelles Parish School Board’s unanimous vote to approve the consent order reflects our shared goal of securing equal educational opportunities for all students,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We are confident that this agreement will bring meaningful progress, and we look forward to working closely with the School Board over the next three years to bring this case to a successful close.”
“My office is committed to ensuring that this district’s schools provide all students with equal educational opportunities,” stated U.S. Attorney Stephanie A. Finley of the Western District of Louisiana. “I applaud the Avoyelles Parish School Board for its efforts to eliminate the effects of state-mandated segregation. It is our goal to assist in any way possible so that the Consent Order will work to provide all students in Avoyelles Parish with a quality education, a safe and fruitful learning environment, and academic offerings to help them achieve their dreams.”
Promoting school desegregation and enforcing Title IV of the Civil Rights Act of 1964 is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
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Chula Vista Man Guilty of International Trafficking in over $100,000 Worth of Counterfeit World Cup JerseysRead the Press Release
SAN DIEGO – This afternoon Clemente Leon of Chula Vista pled guilty to selling hundreds of thousands of dollars’ worth of counterfeit World Cup soccer jerseys over the internet.
In pleading guilty, Leon admitted that in August of 2013, approximately four months after he began importing soccer jerseys and other clothing from China, he received a Cease and Desist letter from Nike. Leon acknowledged that after learning that the jerseys were counterfeit, he nonetheless continued to import the counterfeit soccer jerseys, and then placed counterfeit World Cup team patches and stencils with the names of World Cup players on the backs of the jerseys, in his garage in Chula Vista. Leon admitted that he sold the jerseys bearing the unauthorized and counterfeit trademarks throughout the United States over the internet on his own website, www.playerasfutbol.com, and via Amazon.com, and received payment via PayPal and other means. Leon agreed that the value of the counterfeit goods he sold was between $120,000 and $320,000. As part of his plea, he agreed to forfeit $50,000 of proceeds from the sale of the counterfeit jerseys.
Leon is scheduled to be sentenced on August 17, 2015, at 8:30 a.m. before the Hon. John A. Houston, United States District Court Judge.
DEFENDANTS Case Number: 15cr1326-JAH Clemente Leon Age: 37Chula Vista, California
CHARGESImportation Contrary to Law—Title 18, United States Code, Section 545
INVESTIGATING AGENCIES
Maximum penalty: 20 years’ imprisonment and $250,000 fineHomeland Security Investigations
Chinese National Convicted of Immigration FraudRead the Press Release
ALEXANDRIA, Va. – Kaixiang Zhu, 44, of Bentonville, Arkansas, was convicted on Wednesday by a federal jury on charges of conspiracy to commit immigration fraud and immigration fraud, stemming from a 2011 attempt at unlawfully obtain a green card.
Zhu was indicted on June 14, 2012. According to court records and evidence presented at trial, Homeland Security Investigations conducted an undercover operation which offered green cards for sale in Northern Virginia hotels. On Aug. 25, 2011, Zhu and others came to a hotel in Crystal City where they were told on videotape that the cards were being obtained unlawfully through a corrupt public official and if they wished to purchase a card they would be fingerprinted. Zhu had been present in the United States without legal status for 10 years and agreed to be fingerprinted despite the warning that doing so was a crime. A total of 24 individuals were charged in 2012. Zhu was located and apprehended in Rogers, Arkansas, at the end of last year.
Zhu faces a maximum penalty of 10 years in prison when sentenced on Aug. 14, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Clark E. Settles, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Washington, DC; and Maggie A. DeBoard, Chief of the Herndon Police Department, made the announcement after the verdict was accepted by U.S. District Judge T.S. Ellis, III.
This case was investigated by Homeland Security Investigations and the Herndon Police Department. Special Assistant U.S. Attorney Caroline Friedman and Assistant U.S. Attorney Ronald L. Walutes, Jr., prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:12-cr-258.
Chemung County Man Sentenced for Receiving, Possessing and Distributing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Terry M. Dickinson, 56, of Millport, NY, who was convicted following a jury trial of distribution of child pornography, receipt of child pornography and possession of child pornography, was sentenced to 40 years in prison and lifetime supervised release by U.S. District Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Tiffany H. Lee, who handled the prosecution of the case, stated that an undercover agent in Elmira, NY, downloaded child pornography from the defendant, through a peer-to-peer software program, in June and July of 2010. Agents executed a search warrant at Dickinson’s residence in August 2010 and seized items of digital media, including computers, thumb drives and memory cards. A forensic analysis determined that the memory cards contained images and videos of child pornography.
The search warrant led to the discovery of a notebook containing handwritten notes that appeared to detail the defendant's sexual encounters with children.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, investigators and troopers of the New York State Police, Troop E, under the direction of Major Craig Hanesworth; and deputies and Investigators from the Chemung County Sheriff’s Office under the direction of Sheriff Christopher Moss.
Central New York Doctor Sentenced to 18 Months ImprisonmentRead the Press Release
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced the sentencing today of Mahesh Kuthuru, age 43, a physician of a Utica and Fulton area pain management practice.
Mahesh Kuthuru, owner and operator of Upstate Pain Management with offices in Fulton and Utica, was sentenced by United States District Court Judge David N. Hurd to eighteen (18) months for Health Care Fraud, and twelve (12) months for Unlawful Distribution of Controlled Substances, to run concurrently, ordered to pay $84,265.11 restitution due to Medicare, along with a $125.00 Special Assessment. The defendant will serve three (3) years of supervised release upon release from prison. He was remanded to the custody of the United States Marshals upon being sentenced.
"The public expects physicians to apply high standards of professionalism in their interactions with their patients and delivery of health care services. Actions such as these demonstrate a complete disregard to the quality of care for patients. These criminal activities place additional burden on the public seeking competent health services, resulting in rising costs of health care," explained United States Attorney Hartunian. "Health care fraud remains a priority of my office and we will continue to aggressively prosecute such cases."
On January 22, 2015, Kuthuru pled guilty to Count 4 of the Superseding Indictment, specifically that he executed a scheme to defraud Medicare, and other health care benefit programs by submitting a claim that the defendant had rendered medical services to a patient, when, in fact, neither he, nor any physician, nor any licensed non-physician practitioner acting under his direct supervision, had rendered those services. On that same date, Kuthuru also pled guilty to Count 1 of the Information of unlawfully distributing controlled substances, a misdemeanor.
According to the Indictment, Kuthuru, and co-defendant Meislin, engaged in a scheme to defraud Medicare by submitting claims for reimbursement that falsely represented that Dr. Kuthuru had performed medical services when in fact he had not. Kuthuru purchased a medical practice in Las Vegas, Nevada, in November 2008. In July 2009 Kuthuru sold his home in Baldwinsville and purchased a home in Las Vegas. By January 2010 through at least September 2011, Kuthuru was spending the majority of his time at his Las Vegas medical practice, coming back to the Utica and Fulton offices to treat patients only on a sporadic basis. From January 2010 through September 2011 there were substantial periods of time when there were no licensed medical personnel whatsoever in the Utica and Fulton offices. Patients there were seen only by unlicensed staff members who had received no formal medical training. The Indictment further charged Kuthuru with unlawful distribution of Schedule II controlled substances including Oxycodone, Oxycotin, Methadone and Morphine Sulphate.
Co-defendant Bonnie Meislin was found guilty by a jury on February 25, 2015 to Counts 1-2, 4-6, 10-17, 19, 22-30, and 31 of the Superseding Indictment. Meislin’s sentencing is set for July 1, 2015 in Utica.
The case was a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the New York State Bureau of Narcotics Enforcement, United States Department of Health and Human Services, New York State Worker’s Compensation Board, Safeguard Services, and Excellus Blue Cross & Blue Shield Special Investigations. The case was prosecuted by Assistant U.S. Attorney Edward R. Broton.
Butte County Man Is Sentenced for Heroin Distribution and Being A Felon in Possession of a FirearmRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin Wagner announced that Seth Michael Bertolini, 44, of Chico, was sentenced Thursday by U.S. District Judge Troy L. Nunley to six years and five months for being a felon in possession of a firearm and for drug trafficking. Bertolini was convicted on January 15, 2015.
This case was the product of an investigation by the Federal Bureau of Investigation, Chico Police Department, and the Butte County Interagency Narcotics Task. Assistant U.S. Attorney Michelle Rodriguez prosecuted the case.
On June 4, 2014, law enforcement in Chico stopped Bertolini for driving with his car’s radio system playing loudly. During the stop, Bertolini emerged from his car animated and agitated. He then turned and fled. After a foot pursuit, Bertolini was caught and found to possess on his person and in his car heroin that was packaged for distribution and a fully loaded Smith and Wesson .32-caliber revolver. During a later search of Bertolini's residence, Bertolini was found to possess additional heroin, trafficking paraphernalia, and another gun, a Ceska Zbrojovka, 7.62 mm, semi-automatic pistol.
Buffalo Man Sentenced for Firearm PossessionRead 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 Keith Mixon, 23, of Buffalo, NY, who was convicted of possession of a firearm in furtherance of a drug trafficking crime, was sentenced to five years in prison by Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Wei Xiang, who handled the case, stated that on April 14, 2013, Buffalo Police responded to a call for an individual brandishing a gun at a party at a residence on Newburgh Avenue. When officers arrived, Mixon had 19 packets of methylone, a controlled substance sometimes known as bath salts. Officers later found a .40 caliber Glock handgun, the gun that the defendant was brandishing.
The sentencing is the result of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division.
Buffalo Man Pleads Guilty to Tax Fraud SchemeRead 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 Kalah Bishop, 27, of Buffalo, NY, pleaded guilty today to access device fraud before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Maura K. O’Donnell, who is handling the case, stated that beginning in 2012, the defendant and her associates filed fraudulent federal and New York State income tax returns for more than 49 individuals. The tax refunds were deposited onto debit cards, which were then used by Bishop and her associates to make purchases and withdraw cash.
The tax refunds received by the defendant and her associates totaled $435,064. Bishop will be required to pay restitution of $416,192 to the Internal Revenue Service, and $18,872 to the New York State Department of Finance.
The plea is the culmination of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-In-Charge Shantelle P. Kitchen, and investigators from the New York State Department of Taxation and Finance, Criminal Investigations Division, under the direction of Michael Szrama.
Sentencing is scheduled for September 11, 2015 before Judge Arcara.
Buffalo Man Pleads Guilty to Narcotics TraffickingRead 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 William Key, of Buffalo, NY, pleaded guilty to conspiracy to distribute 50 kilograms or more of marijuana, before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison, a fine of $1,000,000, or both.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that the defendant participated in a drug trafficking network which distributed hundreds of pounds of marijuana in the City of Buffalo. Key was on probation following a state drug conviction at the time of his arrest on federal charges.
Key was arrested along with four others involved in the conspiracy. Defendants Mark Moodie, Oneil Bennett, and Wilfred Taylor, have been convicted. Charges are pending against Raymond Lee. 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.
This plea is the culmination of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by Special Agents of Immigration & Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy, and the New York State Police, under the direction of Major Michael Cerretto.
Sentencing is scheduled for September 11, 2015, at 1:00 p.m. before Judge Arcara.
Armed Snohomish County Drug Dealer Sentenced to Long Prison Term for Drug TraffickingRead the Press Release
An Everett resident with prior federal drug felony convictions, was sentenced today in U.S. District Court in Seattle to more than 14 years in prison, announced U.S. Attorney Annette L. Hayes. JOSEPH R. KALAC was convicted at his September 2014 trial of three counts of possessing a controlled substance with intent to distribute, one count of possessing a firearm in furtherance of a drug trafficking crime, and one count each of being a felon in possession of a firearm and ammunition. KALAC later pleaded guilty to an additional charge of failing to surrender to serve a prison sentence as ordered by the court. At sentencing U.S. District Judge Richard A. Jones noted KALAC has an “extensive criminal history and a poor track record on supervision,” and added KALAC is at a “high risk to reoffend.”
According to records filed in the case, KALAC was spotted in a car in an area known for drug activity. When a Snohomish County deputy approached, KALAC sped away. He lost control of his car, crashed it, and ran away from pursuing officers. KALAC was located and arrested. After obtaining a warrant, officers searched the crashed car and found heroin, methamphetamine, crack cocaine, and a loaded semi-automatic pistol in a backpack under the driver’s seat. The backpack also had a scale, packaging material and a drug ledger. At the time KALAC was already on federal supervision for a 2009 drug distribution conviction.
In asking the court for a significant sentence, prosecutors noted that KALAC created a significant danger in the community. “As a felon, KALAC had no right to have a gun….But he nonetheless decided that his interests were better served by arming himself. The drug trade is a dangerous business….. By introducing a gun into an already volatile mix, KALAC tremendously ratcheted up the danger he and those around him faced.”
KALAC’s sentence calls for him to serve 96 months (eight years) on the drug charges and for being a felon in possession of a firearm. An additional 60 months (5 years) sentence must run consecutive for using a firearm in a drug trafficking offense. The additional one year in prison is for failing to surrender.
The case was investigated by the Snohomish County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, & Explosives. The case was prosecuted by Assistant United States Attorneys Mike Dion, Matthew Hampton and Grady Leupold.
Allen, Texas, Man Admits Running A Multi-Million Dollar Oil and Gas Investment Fraud SchemeRead the Press Release
DALLAS — Brian J. Polito of Allen, Texas, appeared yesterday before Chief U.S. District Judge Jorge A. Solis and pleaded guilty to an information charging one count of mail fraud stemming from his operation of an oil and gas investment fraud scheme, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Polito faces a maximum statutory penalty of 20 years in federal prison and $250,000 fine, or twice any pecuniary gain to the defendant or loss to the victims. However, according to the plea agreement filed, if the Court accepts the plea, the maximum term of imprisonment is 96 months. Polito also agrees to the entry of a restitution order, forfeiture order, or both, as determined and imposed by the Court, of an amount equal to the victims’ losses (restitution) or the unlawful proceeds (forfeiture) from the scheme.
According to the factual resume filed in the case, Polito was the sole owner/operator of GC Resources, LLC, an oil and gas investment firm that was located on Preston Road in Dallas. Beginning in December 2011, Polito defrauded investors by selling interests in oil and gas projects in which GC Resources had no ownership or interest.
As part of the scheme, Polito researched “Company A” on the Texas Railroad Commission’s website and determined that Company A’s wells were producing. Polito then identified Company A’s drilling permits for wells that were going to be drilled in the future. Through GC Resources, Polito began soliciting investments into Company A’s projects even though GC Resources had no control or interest in the wells.
To convince investors to invest with GC Resources, Polito told investors that GC Resources owned the oil and gas drilling leases, when, in fact, it did not have any ownership or interest in the lease. Polito also misrepresented that GC Resources had an interest in Company A’s wells, when in reality, GC Resources had zero interest in Company A’s wells. Polito informed actual and potential investors that GC Resources had a contract with Company A, which was false. Polito even supplied investors with a document purporting to be a contract between Company A and GC Resources, but that document was fraudulent, as Polito had created it using Photoshop to forge signatures of Company A employees.
Polito paid investors of Company A projects with other fraudulently obtained funds in the manner of a Ponzi scheme.
Polito solicited investments by making cold calls to potential investors and sending prospective investors a packet of materials that included the forged Company Agreement and other documents. Polito deposited investors’ money in a GC Resources bank account to which he had sole control. Over the course of the scheme, Polito raised multiple millions from victim investors, all of which was used to fund a lavish lifestyle.
When investors asked to see the well site, Polito, or a salesperson working for him, would take investors to the actual well site, which was under the control of Company A, in an effort to further deceive investors and prolong his scheme. Polito even obtained production records from the Railroad Commission’s website for Company A wells and provided that information to investors, even though neither Polito or GC Resources had any interest whatsoever in Company A’s wells.
The government has engaged in significant efforts to secure assets for potential restitution to victims. Among other things, the government has recovered $664,000 from the liquidation of the net equity in the following vehicles: a 2014 Roll Royce Wraith, a 2015 McLaren 650S Coupe, a 2014 Lamborghini, a Aventador Anniversary Coupe, a 2015 BMW M4 Coupe, a 2014 Mercedes E63 Wagon, a 2014 Ferrari 458 Speciale, a 2014 Jeep Cherokee SRT8, and one bank account subject to the entry of restitution and/or forfeiture orders.
Last month, the Securities and Exchange Commission (SEC) also filed suit against Polito and GC Resources, LLC for defrauding investors through the sale of interests in oil and gas wells the company never owned.
The FBI investigated the case. Assistant U.S. Attorneys J. Nicholas Bunch and Melissa A. Childs are prosecuting.
Thursday 21 May 2015
Worcester Sex Offender Arrested for Distributing Child PornographyRead the Press Release
BOSTON – A convicted sex offender was arrested yesterday on child pornography charges.
Neil Sweeney, 49, of Worcester, was charged with possession and distribution of child pornography. Sweeney was arrested yesterday morning at his Elm Street residence and is presently being held without bail.
According to court documents, in April 2015, Sweeney distributed dozens of videos and images of minors engaging in sexually explicit conduct over the Internet to a federal undercover agent. The investigation was initiated by members of the FBI Newark Division; it was referred to the FBI Boston Division when the investigation revealed that Sweeney resided in Massachusetts. In 1995, Sweeney was convicted in Worcester Superior Court for indecent assault and battery on a person under 14 years of age. As a result of that conviction, Sweeney was required to register as a Level 3 sex offender.
If convicted of distribution of child pornography, Sweeney faces a mandatory minimum sentence of 15 years and no greater than 40 years in prison, five years of supervised release, and a fine of $250,000. If convicted of possession of child pornography, Sweeney faces a mandatory minimum sentence of 10 years and no greater than 20 years in prison, five years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Worcester Police Chief Gary J. Geeme, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Greg A. Friedholm of Ortiz’s Worcester Branch Office.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Watsonville Nursing Home Owners, Operators and Manager Agree to Pay $3.8 Million to Settle Allegations of False ClaimsRead the Press Release
SAN FRANCISCO – The owners, operators, and manager of two nursing homes in Watsonville, Calif., have agreed to pay $3.8 million to settle allegations that they submitted false claims to the United States, announced United States Attorney Melinda Haag, U.S. Department of Health and Human Services OIG (HHS-OIG) Special Agent in Charge Ivan Negroni, and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
Today’s settlement stems from a complaint filed by the United States on August 29, 2014, in U.S. District Court for the Northern District of California. In the complaint, the United States alleged the owners, operators, and managers of two nursing homes submitted to federal Medicare and Medi-Cal programs false claims for materially substandard or worthless services. Specifically, the complaint alleges between 2007 and 2012, the defendants persistently overmedicated elderly and vulnerable residents of the nursing homes, causing infection, sepsis, malnutrition, dehydration, falls, fractures, pressure ulcers, and for some residents, premature death. The complaint alleges the defendants violated the Federal False Claims Act, 31 U.S.C. §§ 3729-3733. The named defendants are the nursing homes, Country Villa Watsonville East Nursing Center (renamed Watsonville Nursing Center in April 2014) and Country Villa Watsonville West Nursing and Rehabilitation Center (renamed Watsonville Post-Acute Center in April 2014); the for-profit entities that own and operate the nursing homes, CF Watsonville East, LLC, and CF Watsonville West, LLC; the entity that exercised oversight and control over the finances and operations of the nursing homes, the ARBA Group; and the entities responsible for the management of the nursing homes under consulting agreements with the owners, Country Villa Health Service Corporation, dba Country Villa Health Services.
In addition to the monetary settlement, defendants CF Watsonville East, LLC, and CF Watsonville West, LLC have entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG. Among other things, the CIA requires these defendants to implement and maintain a robust compliance program and retain an independent monitor to help ensure the nursing homes’ compliance with Medicare and Medicaid regulations and standards of care.
“Our nursing home residents rely on the Medicare and Medi-Cal programs to receive life sustaining, and other essential medical services,” said United States Attorney Haag. “The allegations in this complaint are appalling. It is my hope that the families whose loved ones suffer at the hands of nursing homes that provide substandard care can find solace in the commitment from me that these owners, operators, and managers will be held accountable for their actions.”
“It’s outrageous when nursing home owners accept Medicare and Medicaid money to care for vulnerable nursing home residents and in return provide care so lacking in quality and compassion it shocks the senses,” said Special Agent in Charge Ivan Negroni, HHS-OIG. “Our agency is committed to investigating such substandard care and, through our Corporate Integrity Agreement with these two nursing homes, requires an independent monitor and other protections designed to hold these nursing homes accountable for providing appropriate, high quality care in the future.”
“This case demonstrates our continued commitment to investigate, and hold accountable, individuals and organizations seeking to victimize the elderly through the misuse of taxpayer funded Medicare and Medi-Cal programs,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office. “The FBI remains vigilant on our continued effort to work with our civil enforcement partners on these cases and will seek to hold those responsible for providing substandard care accountable for both past violations and future compliance.”
Assistant U.S. Attorney Gioconda Molinari litigated the case with the assistance of paralegal Lucille Yee and auditor Michael Zehr. The lawsuit is the result of an investigation by the U.S. Attorney’s Office, the Federal Bureau of Investigation, and the HHS-OIG.
If you know someone who is the victim of elder abuse, neglect, or exploitation in a nursing home, you can report it to:
- California Long-term-Care Ombudsman, 1-800-231-4024, http://www.aging.ca.gov/Programs/LTCOP/
- Your local California Department of Public Health, Licensing and Certification Division, District office http://www.cdph.ca.gov/HealthInfo/Pages/NursingHomePatient.aspx
- Your local adult protective services office, and/or the police.
Vendor Who Bribed Two-Year College Chancellor Resentenced to Three Years in PrisonRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a computer software vendor to three years in prison for paying more than $600,000 in bribes between 2002 and 2006 to the then chancellor of Alabama's two-year college system, announced U.S. Attorney Joyce White Vance and Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Virginia Emerson Hopkins sentenced JAMES WINSTON HAYES, 71, to prison and again ordered he pay $628,454 in restitution and forfeit $5 million. The judge originally sentenced Hayes to probation in 2011. Today's resentencing was the result of a November ruling by the U.S. Court of Appeals for the Eleventh Circuit, which vacated the judge's earlier sentence. The government challenged the probationary sentence on appeal and the 11th Circuit ruled that a sentence of probation was unreasonable for Hayes' crime.
"Mr. Hayes received millions of taxpayer dollars by bribing the chancellor of Alabama's two-year college system to ensure the defendant's company received contracts from colleges within the system," Vance said. "Through fraudulent contracts and fake invoices, he even had taxpayers financing his bribe payments," she said. "Imprisonment is a necessary and just punishment for his crimes."
“Today’s sentence of James Hayes emphasizes the government’s relentless effort to hold an individual accountable for his criminal behavior,” Hyman-Pillot said. “Mr. Hayes used financial bribes to influence contracts with the Alabama Department of Postsecondary Education. The overall conspiracy was fueled by greed and deceit. I hope this sends a clear message that Internal Revenue Service-Criminal Investigation will continue to trace every penny used in kickback schemes to expose all individuals who engage in bribery and corruption,” she said.
Hayes formerly owned ACCESS Group Software, a Walker County company that sold educational computer software to the Alabama Department of Postsecondary Education. ACCESS did business with more than 25 two-year colleges and technical schools in Alabama. Hayes pleaded guilty in 2008 to bribing Roy Johnson, then chancellor of the two-year college system, and to conspiring to commit money laundering.
Over four years, Hayes paid Johnson more than $600,000 in bribes, and in return, Hayes’ software company obtained lucrative government contracts that earned his company more than $14 million in revenue and about $5 million in profit.
Johnson pleaded guilty in the case to charges of bribery, conspiracy to commit bribery, conspiracy to commit money laundering, obstruction of justice and tampering with a witness. Johnson was sentenced to six years and six months in prison. Both Hayes and Johnson assisted the government in its investigation of corruption in the two-year college system after they were charged. Including Hayes and Johnson, the investigation resulted in 17 convictions.
Assistant U.S. Attorney George Martin prosecuted the case and Assistant U.S. Attorney Praveen Krishna handled the case on appeal.
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Upton Man Pleads Guilty to Robbing Multiple BanksRead the Press Release
Boston – An Upton man pleaded guilty to robbing four banks in a two-week period and making off with $49,000.
Brandon Coldwell, 21, pleaded guilty today before U.S. District Court Chief Judge Patti B. Saris to four counts of bank robbery. He is scheduled to be sentenced on Sept. 3, 2015.
On Sept. 11, 2014, Coldwell kicked off a two-week crime spree by robbing the Mt. Washington Bank in Dorchester. Thereafter, Coldwell robbed a Citizen’s Bank branch in Brookline on Sept. 17, another Citizen’s Bank in Milton two days later, and a third Citizen’s Bank in Framingham on Sept. 24. In total, Coldwell stole $49,000 in less than two weeks.
In all four robberies, Coldwell threatened to shoot bank employees if the tellers did not comply with his demands for cash. Law enforcement identified Coldwell as the perpetrator based on his unique arm tattoos, which were captured on bank surveillance video. During the weeks he committed the robberies, Coldwell was also active on social media and posted pictures of himself wearing the clothing he wore when he committed the crimes as well as displaying his arm tattoos.
The charging statute provides a sentence on each count of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; made the announcement today. Assistance was also provided by the Boston, Brookline, Milton, and Framingham Police Departments. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
University Professor Charged in Wire Fraud SchemeRead the Press Release
PHILADELPHIA – Xiaoxing Xi, 47, of Penn Valley, PA, was charged by indictment, unsealed today, with four counts of wire fraud in an alleged scheme involving the exploitation of technology for the benefit of third parties in China. Xi, a naturalized U.S. citizen and a native of the People’s Republic of China, is a world-renowned expert in the field of magnesium diboride thin film superconducting technology. The fraud, it is alleged, was an effort to assist Chinese entities in becoming world leaders of the superconductivity field.
The charges were announced today by United States Attorney Zane David Memeger, and FBI Special Agent-in-Charge Edward J. Hanko.
The indictment alleges that, in 2002, Xi participated in China’s 863 Program, which was a Chinese government program intended to boost high-technology innovation and development in China. Thereafter, in 2002 to 2003, the indictment alleges that Xi took a sabbatical from his university position and worked with a U.S. company in the field of thin film superconductivity research. During his tenure at the company, individuals there invented a piece of technology which revolutionized the field of superconducting magnesium diboride thin film growth. The indictment alleges that, starting in January 2004, Xi made efforts to obtain the technology from the company. The indictment further alleges that Xi applied for and was awarded a U.S. Defense Department grant to finance his purchase of the device for research relevant to the Department of Defense. In January 2006, Xi obtained the device for 12 months subject to an agreement that he not reproduce, sell, transfer or otherwise distribute the device or any copies of the device to any third party. The indictment alleges that Xi signed this agreement as part of a scheme to defraud the company into providing him the technology, so that he could provide it to entities in China and assist those entities in further exploitation and use of the technology. The indictment further alleges that Xi repeatedly reproduced, sold, transferred, distributed, and otherwise shared the device with, and exploited it for the benefit of, government entities and other third parties in China. It is further alleged that, in exchange for his efforts, Xi repeatedly sought lucrative and prestigious appointments in China.
According to the indictment, Xi’s emails include a communication on May 14, 2010, to an associate in China, confirming the delivery of certain technology to a laboratory in China; and three emails to separate associates in China, in June 2010 and December 2010, in which Xi offers to build a world-class thin film laboratory.
If convicted the defendant faces a maximum possible sentence of 80 years in prison, three years of supervised release, a fine of up to $1 million, and a $400 special assessment.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Jennifer Arbittier Williams.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Attorney's Office Conducts Americans with Disabilities Act Review of New Haven Area HotelsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that the U.S. Attorney’s Office is nearing completion of a review of hotels in and around New Haven to determine if they are being operated in compliance with the Americans with Disabilities Act (ADA).
Under federal law, private entities that own or operate “places of public accommodation,” which includes hotels, are prohibited from discriminating on the basis of disability. The ADA authorizes the U.S. Department of Justice to investigate complaints and to undertake periodic reviews to determine compliance by covered entities. The Justice Department is also authorized to commence a civil lawsuit in federal court in any case that involves a pattern or practice of discrimination or that raises issues of general public importance, and to seek injunctive relief, monetary damages, and civil penalties.
As part of a compliance review survey, 12 New Haven area hotels, which were randomly selected, were asked to complete and return a survey form. Onsite inspections to confirm survey responses were then conducted and each hotel was reviewed for its compliance with federal law. Six of the surveyed hotels were found to have ADA violations. The government has been working with the owners and operators of each hotel found in violation in an effort to secure voluntary compliance. To date, three of the six hotels found in violation, the La Quinta Inn and Suites, Courtyard Marriott and New Haven Hotel, have entered into settlement agreements with the government and are working cooperatively with the government to address the violations.
The government continues to work with the three remaining hotels to secure voluntary compliance agreements and address existing ADA violations.
“The Americans with Disabilities Act ensures that residents and visitors alike are able to access and enjoy the state’s hotels and other public accommodations,” stated U.S. Attorney Daly. “Ensuring these public places are equally accessible to all is essential for businesses to properly serve a diverse population who live, work and visit Connecticut. We look forward to working with the owners and operators of these hotels as we assess their compliance with federal law and work cooperatively to secure voluntary compliance.”
The hotel survey was conducted in accordance with the Justice Department’s statutory responsibility to review compliance with federal law, and not in response to any specific complaint against any of the hotels within the scope of the review. Any member of the public who wishes to file a complaint alleging that a hotel or any other place of public accommodation within the District of Connecticut is not accessible to persons with disabilities may contact the U.S. Attorney’s Office at 203-821-3700.
Additional information about the ADA can be found at www.ada.gov, or by calling the Department’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD). More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
This matter was handled by Assistant U.S. Attorneys David Nelson, Vanessa Avery, and Ndidi N. Moses, and former Assistant U.S. Attorney Lisa Perkins, in coordination with the Disability Rights Section of the U.S. Department of Justice Civil Rights Division.
U.S. Army Sergeant Sentenced to 51 Months in Prison for Taking Bribes While Deployed in AfghanistanRead the Press Release
A sergeant with the U.S. Army was sentenced today to 51 months in prison for accepting bribes from Afghan truck drivers at Forward Operating Base (FOB) Gardez in Afghanistan, in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
James Edward Norris, 41, of Fort Irwin, California, was sentenced by Chief U.S. District Judge Clay D. Land of the Middle District of Georgia, who also ordered Norris to pay $176,100 in restitution and to forfeit two vehicles he purchased with money from the bribery scheme and $70,000 in cash that he received from the scheme.
In connection with his guilty plea, Norris admitted that he conspired with other soldiers stationed at FOB Gardez to solicit and accept approximately $2,000 per day from local Afghan truck drivers in exchange for permitting the truck drivers to take thousands of gallons of fuel from the base. Norris admitted that he was personally paid a total of $100,000 over the course of the conspiracy.
Norris and the other soldiers shipped the bribe proceeds back to the United States in tough boxes. Norris admitted that, after returning from deployment, he purchased a 2008 Cadillac Escalade with $31,000 cash derived from the bribery scheme and a custom built 2014 Hardcore Choppers motorcycle with approximately $30,000 in proceeds from the scheme.
Seneca Hampton, another U.S. Army sergeant, pleaded guilty for his role in the scheme on Feb. 10, 2015, and is scheduled to be sentenced on July 28, 2015. Anthony Tran, a former U.S. Army specialist, was indicted on March 10, 2015, for his alleged role in the scheme and remains pending trial. The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency’s Investigative Support Division. The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section.
Two Perry County Residents Sentenced for Methamphetamine ConspiracyRead the Press Release
On May 21, 2015, Brant A. Sizemore, 39, of DuQuoin, and Jamey A. Carson, 36, of Pinckneyville, were sentenced for their involvement in a methamphetamine conspiracy, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Both Sizemore and Carson had previously pled guilty to a one-count indictment charging them and five others with conspiracy to manufacture methamphetamine. Sizemore was sentenced to 120 months in federal prison, 3 years’ supervised release, and fined $625.00. Sizemore was given 60 days credit for time served on related state case. Carson was sentenced to 77 months in federal prison, 3 years’ supervised release, and fined $400.00. The offense occurred between 2012 and September 2014, in Perry, Jackson, Randolph, Williamson, and Franklin Counties. Evidence at the plea and sentencing hearings established that Sizemore and Carson were involved with each other and with others in the manufacture of methamphetamine. At sentencing, the district court found Sizemore responsible for 181 grams of pseudoephedrine, which was possessed for the purpose of manufacturing methamphetamine. Carson was found responsible for 28.8 grams of pseudoephedrine. The other five co-defendants have pled guilty to their role in the methamphetamine conspiracy and are awaiting sentencing.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Murphysboro Police Department, and DuQuoin Police Department. The Pinckneyville Police Department and Illinois State Police Methamphetamine Response Team assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Two People Charged in Connection with Stolen Identity Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – Two people allegedly involved in an extensive scheme to obtain U.S. Government funds through fraudulently obtained refund checks issued by the U.S. Treasury were charged today for their involvement in the scam, U.S. Attorney Paul J. Fishman announced.
Jhan Luis Mejia Marcelino, 25, and Odanys Orlando Rojas, a/k/a “El Fuerte,” 37, both of Bronx, New York, were arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, special agents of the U.S. Postal Service Office of Inspector General, and special agents of the U.S. Secret Service. They are charged by complaint with conspiracy to steal government funds.
Both defendants made their initial court appearances today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Rojas was ordered detained and Marcelino was released on $250,000 unsecured bond.
According to the complaint:
Background on Stolen Identify Refund Fraud
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
- SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
- They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
- With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
The Investigation
Marcelino, Rojas and others allegedly have obtained stolen identities that they used to file, and to assist in the filing of Fraudulent Form 1040s to generate Fraudulent Treasury Checks. From Jan. 31, 2014, through Nov. 22, 2014, the defendants caused to be filed 132 fraudulent Form 1040s, claiming $917,284 in false income tax returns, and causing $14,520 in fraudulent treasury checks to be issued directly from the U.S. Treasury.
Rojas was allegedly responsible for filing 73 Fraudulent Form 1040s, claiming total tax returns of $589,621, on April 22, 2014, alone. From Jan. 31, 2014, through Nov. 22, 2014, the Preparer Tax Identification Number, or “PTIN,” associated with those filings was also used to file 16,037 fraudulent Form 1040s, which claimed $115,455,061 in tax refunds, and caused $2,943,329 in U.S. Treasury refund checks to be issued.
Marcelino was responsible for filing 59 fraudulent Form 1040s, claiming total tax returns of $327,663, on Sept. 2, 2014, alone. From May 4, 2014, through Nov. 21, 2014, the PTIN associated with those filings was also used to file 1,356 fraudulent Form 1040s, claiming $8,416,206 in tax refunds, and causing $572,548 in U.S. Treasury refund checks to be issued.
The conspiracy charge is punishable by a maximum potential penalty of five years in prison. The charge is also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica S. Weyler; and special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli; with the investigation leading to today’s arrests and charges.
The government is represented by Assistant U.S. Attorneys Melissa Wangenheim and Elisa Wiygul of the General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the Defendants are considered innocent unless and until proven guilty.
Defense counsel:
Marcelino: John Yauch Esq., Assistant Federal Public Defender, Newark
Rojas: Timothy R. Anderson Esq., Red Bank, N.J.- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
Three Men Charged in Manhattan Federal Court in Multimillion-Dollar Scheme to Deceive Homeowners into Selling Their HomesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the Federal Bureau of Investigation (“FBI”), Christy Romero, and Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) announced that MARIO ALVARENGA, RAJESH MADDIWAR, and AMIR MEIRI were arrested today for participating in a scheme to fraudulently induce distressed homeowners to sell their homes to a company associated with the defendants. ALVARENGA, MADDIWAR, and MEIRI were presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Kevin Fox.
Manhattan U.S. Attorney Preet Bharara said: “In what is alleged to be a brazen fraud, these defendants manipulated and took advantage of vulnerable people, and in some cases even tricked individuals into losing their homes. I would like to thank our partners – the FBI, SIGTARP, and DFS – for their ongoing assistance on this case.”
FBI Assistant Director Diego Rodriguez said: “The defendants took advantage of distressed home owners, mostly the poor and elderly, promising relief. In reality it was nothing more than a callous scheme that took advantage of the most desperate of victims. And in many cases, the owners were evicted from their homes after being tricked into selling their property to the defendants arrested today.”
Special Inspector General for SIGTARP said: “The three individuals taken into custody today stand charged with preying on struggling homeowners simply looking for a way to keep their homes from falling into foreclosure. These individuals are alleged to have dangled false promises of guaranteed mortgage modifications as a veil for secretly swindling homeowners out of their homes and forcing homeowners to vacate their properties. SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud related to the exploitation of TARP’s housing programs and bring perpetrators to justice. SIGTARP commends U.S. Attorney Bharara, Superintendent Lawsky, and the FBI for their shared commitment to safeguarding taxpayers from TARP-related crime.”
According to the allegations in the Complaint unsealed today in Manhattan federal court[1]:
Since at least 2013, ALVARENGA, MADDIWAR, and MEIRI have defrauded distressed homeowners throughout the Bronx, Brooklyn, and Queens. ALVARENGA, MADDIWAR, and MEIRI falsely represented to these homeowners – some of whom were elderly or in poor health – that they could assist them with a loan modification or similar relief from foreclosure that would allow the homeowners to save their homes. But rather than actually assisting these homeowners, the defendants deceived them into selling their homes to Launch Development LLC (“Launch Development”), a for-profit real estate company also affiliated with the defendants.
ALVARENGA, MADDIWAR, and MEIRI lured victims through the Homeowners Assistance Service of New York (“HASNY”), which purported to provide assistance to homeowners who were seeking to avoid foreclosure of their homes. As part of the scheme, MEIRI directed employees of Launch Development, a company owned in part by MEIRI, to solicit owners of distressed properties and invite them to meet with HASNY representatives so that they could learn more about avoiding foreclosure and saving their homes.
When a homeowner arrived at the HASNY office, he or she met with ALVARENGA, who typically advised the homeowner that HASNY could assist him or her with a loan modification. In still other cases, ALVARENGA advised the homeowner that a loan modification could not be completed, but that the homeowner could engage in a type of short sale in which the homeowner would sell the property to a third party, Launch Development, and then within approximately 90 days arrange for a relative of the homeowner to repurchase the property from Launch Development. ALVARENGA typically explained that the homeowner could remain in his or her home throughout the entire process. ALVARENGA then typically scheduled a closing at which the homeowner would meet with MADDIWAR, who was described as the homeowner’s attorney for the transaction.
At the closing, a homeowner who had been led to believe that he or she was about to receive a loan modification or transfer his or her property to a trusted relative was encouraged to sign documents presented by MADDIWAR, which in some cases were blank. Unbeknownst to the homeowners, by signing the documents, they were selling to Launch Development the homes they had hoped to save. Homeowners often were then forced to vacate their homes soon thereafter.
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ALVARENGA, MADDIWAR, MEIRI are each charged with one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding work of the FBI, SIGTARP, and the New York State Department of Financial Services for their investigative efforts and ongoing support and assistance with the case.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney's Office for the Southern District of New York, at (866) 874-8900, or [email protected]. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution of this case is being overseen by the Office’s General Crimes Unit. Assistant U.S. Attorney Jaimie L. Nawaday is in charge of the case.
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.
Three Indianapolis men indicted on federal firearm chargesRead the Press Release
Indianapolis –United States Attorney Josh J. Minkler announced today the indictment of three Indianapolis men on firearms charges. All three are felons who are not legally permitted to carry a firearm.
Those indicted include:
James Lewis, 35
Adrian Bullock, 25
Jose Eduardo Mercado, 33
“The vast majority of individuals committing violent crimes with firearms in Indianapolis are individuals who are legally prohibited from possessing firearms. Our office is committed to investigating felons who illegally possess firearms and, if the evidence supports it, indicting those felons. This is a proven method of reducing violent crime,” stated Minkler.
Lewis was arrested by members of the United States Marshals Fugitive Task Force who were serving arrest warrants at his residence on the Eastside of Indianapolis on April 13, 2015. Lewis allegedly had a 9mm handgun in his waistband and has prior felonies for robbery, burglary, kidnapping and a parole violation for dealing in narcotics.
Bullock was arrested by IMPD officers on April 18, 2014, as he was driving near his residence in the 1700 block of North Oxford Street. Bullock allegedly ran from a vehicle he was driving and violently fought with officers as they attempted to handcuff him. Inside the vehicle, officers found two rifles and a handgun. A warrant was obtained and officers located two stolen handguns, a shotgun and 17 pounds of marijuana inside his residence. Bullock’s criminal history includes a felony conviction for possession of a controlled substance.
Jose Eduardo Mercado, 33, was arrested by law enforcement after his Northwest side residence was searched and a .40 caliber handgun and over 50 grams of methamphetamine were allegedly found. Mercado is an alien unlawfully in the United States.
“The Indianapolis Metropolitan Police Department has a duty to ensure the safety of those living in our neighborhoods,” said IMPD Chief Rick Hite. “Keeping firearms out of the hands of those who cannot legally possess them remains a top priority of IMPD. We appreciate the hard work of the men and woman of IMPD keeping our neighborhoods safe, and the assistance of our federal partners with their assistance to pursue these cases for prosecution.”
The United States Attorney’s Violent Crime Initiative began in 2011, and is intended to focus on the “worst of the worst” violent offenders by marshaling federal resources to provide local partners the additional tools they may need to succeed in their effort to promote peace.
An indictment is only a charge and not evidence of guilt. All defendants are presumed innocent until proven guilty in federal court.