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9 July 2015
Kansas Prescription Drug Case Has Sent 23 Defendants to Federal PrisonRead the Press Release
KANSAS CITY, KAN. B Federal prosecutors have wrapped up the prosecution of a former Lenexa, Kan., doctor accused of diverting prescription painkillers to a network of users and distributors on the streets of the Kansas City metro area, U.S. Attorney Barry Grissom said. On July 7, the last defendant in the case was sentenced to federal prison.
Dr. James R. Webb, 56, now living in Parkville, Mo., pleaded guilty to conspiracy to distribute oxycodone and hydrocodone. In September, he was sentenced to 12 years in federal prison. The judge entered an order of forfeiture for $7.5 million, representing the proceeds of the crime.
On Tuesday, co-defendant Michael Zona, 39, Shawnee, Kan., was sentenced to 19 months in federal prison.
In Webb’s plea, he admitted that the Drug Enforcement Administration began receiving reports in 2010 that he was selling oxycodone and hydrocodone prescriptions for cash. Webb’s so-called patients reported paying cash for their prescriptions based on the number of pills they could receive. Many of the patients were referred to Perry Drug in Overland Park, Kan.
Investigators used informants and undercover agents to make purchases from Webb. They paid Webb a fee of $870 for an office visit for a prescription for 220 oxycodone tablets, and $1,400 for a prescription for 350 tablets. Webb required they pay him in cash.
In 2011, the DEA obtained records from the Kansas Board of Pharmacy’s prescription monitoring program that identified all prescriptions Webb had issued. They used the records to identify so-called patients who frequently visited the doctor and obtained prescriptions from him for oxycodone and hydrocodone.
Defendants who have been sentenced in the case include:
James R. Webb, Jr., physician, 144 months.
Matthew R. Perry, 45, Overland Park, pharmacist, 72 months.
Gerry Divelbiss, 38, Kansas City, Kan., 72 months.
Ricky Bridges, 39, Kansas City, Kan., 78 months.
Jenna Utterback, 30, Kansas City, Mo., 16 months.
Eric Halbin, 37, Overland Park, Kan., 42 months.
Lacy Mae Morrison, 31, Gardner, Kan., 12 months and a day.
Phil Scimeca, 51, Liberty, Mo. 72 months.
Jamie Eberra, 29, Kansas City, Mo., two years probation.
Regina Ann Miranda, 45, Kansas City, Mo., 12 months and a day.
Larry Lee Ray, 35, Kansas City, Mo., 72 months.
Nick Johnson, 34, Lees Summit, Mo., 34 months.
Joshua Brown, 27, Liberty, Mo., 72 months.
Juan Gutierrez, 39, Kansas City, Mo., 47 months.
Wade Becker, 28, Kansas City, Mo., two years probation.
Beau Berry, 31, Grain Valley, Mo., 42 months.
Luke Dearinger, 35, Gladstone, Mo., 52 months.
Michael Zona, 39, Shawnee, Kan., 19 months.
Jessica Rankin, 40, Shawnee, Kan., 10 months.
Thomas O’Toole, 25, Blue Springs, Mo., 24 months.
Scott Moore, 31, 38 months.
Erica Wikel, 29, 12 months and a day.
Louis Scimeca, 44, 47 months.
Martin Leahy, 53, 42 months.
Tish Waller, 33, 42 months.
Grissom commended the Drug Enforcement Administration, the Lenexa Police Department, the Overland Park Police Department, the Johnson County Sheriff’s Department, the Salina Police Department, the Republic County Sheriff’s Department, the Excelsior Springs, Mo., Police Department and Special Assistant U.S. Attorney Trent Krug for their work on the case.
Kansas City Area Business Owner Indicted in 2014 Indicted Again on Bank FraudRead the Press Release
KANSAS CITY, KAN. - A Kansas City area business owner indicted in 2014 on federal bank fraud charges has been indicted again on charges of committing financial crimes while awaiting trail, U.S. Attorney Barry Grissom said today.
Brenda Wood, 47, Leavenworth, Kan., was indicted in August 2014 on ten counts, including five counts of bank fraud, one count of theft from an employee benefit program and four counts of violating the Employee Retirement Income Security Act. On Wednesday, a federal grand jury returned an indictment adding 16 counts, including eight counts of bank fraud, seven counts of aggravated identity theft and one count of committing a felony while on pretrial release in a federal case.
Allegations in the new indictment include:
- Wood ran a check kiting scheme by opening checking accounts in the names of various businesses and exchanging and cross depositing checks among them.
- Wood used another person’s Social Security number to open a checking account for a business named “Everything Real Estate, Inc.”
- Wood used another person’s Social Security number to open a checking account for a business named “20 W 9th, LLC.”
- Wood used another person’s identity to obtain an American Express card.
- Wood used another person’s Social Security number to open a checking account for a business called “Shelter Management, LLC.”
- Wood provided false information in an application for a loan from Merchant from Merchant Advance Express.
- Wood provided false information in an application for a loan from US Funding.
- Wood used another person’s Social Security number to open a checking account for a company doing business as “Action Real Estate Services.”
Upon conviction the crimes carry the following penalties:
Bank fraud: A maximum penalty of 30 years and a fine up to $1 million on each count.
Theft from an employee benefit program: A maximum penalty of five years and a fine up to $250,000.
Violation of the Employee Retirement Income Security Act: A maximum penalty of 10 years and a fine up to $250,000.
Aggravated identity theft: A mandatory two years to be served consecutively and a fine up to $250,000 on each count.
Wire fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.
Committing a felony while on release: A maximum penalty of 10 years and a fine up to $250,000.
The Department of Labor, Office of Inspector General, the Special Investigator General for the Troubled Asset Relief Program, the Department of Labor Employee Benefits Security Administration and the FBI investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
OTHER GRAND JURY INDICTMENTS
Clifford C. Copp, 58, Overland Park, Kan., who owned Copp Trucking Co. in Kansas City, Kan., has been indicted on a federal tax evasion charge. The company closed in 2001.
The indictment alleges that while Copp Trucking was in business the defendant was responsible for paying quarterly employment taxes for the company. In 2001, he filed reports to the IRS indicating the company owed approximately $939,408 in employment taxes for that year. However, the company did not pay the employment taxes due.
In February 2004 he was assessed trust fund recovery penalties of $669,037. Since then he has provided false information to the IRS. He failed to accurately disclose his monthly income, concealed assets, and placed funds and property in the names of nominees.
If convicted, he faces a maximum penalty of five years in federal prison and a fine up to $250,000. The Internal Revenue Service investigated. Assistant U.S. Attorney Chris Oakley is prosecuting.
Dustin E. Ash, 35, Kansas City, Kan., is charged with two counts of unlawful possession of a firearm following a felony conviction. The crimes are alleged to have occurred June 16, 2015, and June 26, 2014, in Kansas City, Kan.
If convicted, he faces a maximum penalty of life in federal prison and a fine up to $250,000 on each count. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Terra Morehead is prosecuting.
Oliver Kimbrel, 53, Kansas City, Kan., is charged with three counts of possession with intent to distribute crack cocaine, one count of maintaining a residence in furtherance of drug trafficking, and one count of unlawful possession of a firearm following a felony conviction. The crimes are alleged to have occurred in February and March 2014 in Kansas City, Kan.
Upon conviction, the crimes carry the following penalties:
Possession with intent to distribute crack cocaine: A maximum penalty of 20 years in federal prison and a fine up to $1 million on each count.
Maintaining a residence in furtherance of drug trafficking: A maximum penalty of 20 years and a fine up to $500,000.
Unlawful possession of a firearm following a felony conviction: Not less than 15 years and a fine up to $250,000.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Special Assistant U.S. Attorney James Ward is prosecuting.
Yazmin Azucena Maldonado Ballesteros, 38, a citizen of Mexico, is charged with one count of unlawfully re-entering the United States after being deported and one count of using another person’s Social Security number. The crimes are alleged to have occurred in 2012 and 2015.
If convicted, he faces a maximum penalty of 20 years and a fine up to $250,000 on the unlawful re-entry charge, and a mandatory two years to be served consecutively and a fine up to $250,000 on the identity theft charge. The Department of Homeland Security investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Justin Brouillette Facing Federal Carjacking and Firearms ChargesRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez, Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Gorden Eden, Jr., of the Albuquerque Police Department (APD) announced today that Justin Brouillette, 21, of Albuquerque, N.M., has been charged with federal carjacking and firearms offenses. Brouillette’s initial appearance in federal court has not yet been scheduled.
Earlier today, the United States filed a criminal complaint alleging that Brouillette committed the following three crimes in Bernalillo County, N.M., on July 8, 2015: (1) attempted carjacking, (2) using and brandishing a firearm during and in furtherance of a crime of violence, and (3) being a felon in possession of a firearm and ammunition. Brouillette was prohibited from possessing firearms or ammunition because of his status as a convicted felon. Court records reflect that Brouillette has two felony convictions for receiving or transferring stolen vehicles in the Second Judicial District Court for the State of New Mexico in Bernalillo County.
According to the criminal complaint, Brouillette allegedly used a firearm yesterday afternoon to shoot at APD officers as they attempted to execute a traffic stop on Brouillette as he was driving in southeast Albuquerque. It further alleges that shortly thereafter Brouillette crashed his vehicle into another vehicle (the Ford), and then attempted to carjack the Ford by brandishing a firearm at the Ford’s owner and ordering him out of the car. While Brouillette was allegedly attempting to carjack the Ford, APD officers drove into the area and Brouillette allegedly fled on foot after discharging the firearm at the officers for a second time. APD officers arrested Brouillette late yesterday afternoon and retrieved the firearm allegedly used by Brouillette to shoot at the officers.
If convicted on the charges in the criminal complaint, Brouillette faces a statutory maximum penalty of 15 years in prison on the attempted carjacking charge, and a statutory maximum penalty of ten years in prison for being a felon in possession of a firearm. If convicted for brandishing a firearm in furtherance of a crime of violence, Brouillette faces a statutory mandatory minimum of seven years and a maximum of life in prison which must be served consecutive to any sentence imposed on the other two charges. Charges in criminal complaints are mere accusations. Defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the ATF office in Albuquerque and APD. Assistant U.S. Attorney Presiliano A. Torrez is prosecuting the case as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
brouillette_complaint.pdf (246.78 KB)
Justice Department Announces Two Banks Reach Resolutions under Swiss Bank ProgramRead the Press Release
Banque Pasche SA Will Pay $7.229 Million Penalty and ARVEST Privatbank AG Will Pay $1.044 Million Penalty; Both Continue to Cooperate With Department of Justice
The Department of Justice announced today that two banks, Banque Pasche SA and ARVEST Privatbank AG, have reached resolutions under the department’s Swiss Bank Program.
“Banque Pasche and ARVEST have provided detailed information regarding the ways in which Swiss banks helped U.S. taxpayers conceal foreign accounts and evade their U.S. tax obligations, including through the use of numbered and coded accounts and sham offshore entities,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division. “As required under the program, these banks will continue to cooperate as we aggressively pursue those individuals and the professionals who facilitated their criminal conduct.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
Banque Pasche SA is headquartered in Geneva, Switzerland, and owns and controls a group of companies in various jurisdictions, including Monaco and the Bahamas. From at least August 2008 to August 2013, Banque Pasche assisted certain U.S. taxpayers in evading their U.S. taxes and filing obligations, filing false income tax returns with the IRS and hiding offshore assets from the IRS.
Banque Pasche offered a variety of traditional Swiss banking services that it knew could and did assist U.S. taxpayers in concealing assets and income from the IRS. For example, Banque Pasche offered hold mail service, as well as code name or numbered account services. These services allowed certain U.S. taxpayers to minimize the paper trail associated with their undeclared assets and income.
Banque Pasche also permitted certain U.S. taxpayers to open accounts held in the name of sham, conduit or nominee offshore structures where the U.S. taxpayer’s interest in the account was not reported to the IRS. With respect to these accounts, Banque Pasche would obtain from the entity’s directors an IRS Form W-8BEN (or equivalent bank document) that falsely declared that the beneficial owner was not a U.S. taxpayer. As of Dec. 31, 2008, Banque Pasche had U.S.-related accounts held by entities created in Panama or the British Virgin Islands with U.S. beneficial owners. The majority of these accounts had false IRS Forms W-8BEN in the file.
Banque Pasche also opened accounts for U.S. taxpayers who had left other Swiss banks that were being investigated by the department, including UBS and Credit Suisse. Banque Pasche knew or should have known that the beneficial owners of the majority of these accounts were attempting to evade U.S. tax and foreign account reporting requirements. Many of these accounts were held by Panamanian corporations with U.S. beneficial owners. Some of these accounts were managed by a particular Geneva-based attorney who held a power of attorney over them. When these accounts were subsequently closed, the assets were transferred to banks located in Israel and Hong Kong in an attempt to further escape detection from U.S. authorities.
Banque Pasche has fully cooperated with the department during its participation in the Swiss Bank Program. For example, it described in detail the structure of its business with U.S. persons, which included the policies concerning U.S. accountholders. Banque Pasche also provided the names of members of its management committee and information about its relationships with external asset managers.
Since Aug. 1, 2008, Banque Pasche had 186 U.S.-related accounts, as defined under the Swiss Bank Program, with an aggregate maximum balance of approximately $655 million. Of these 186 accounts, 110 had U.S. beneficial owners and an aggregate maximum balance of approximately $111 million. Banque Pasche will pay a penalty of $7.229 million.
ARVEST Privatbank AG was a private bank headquartered in Pfaffikon, Switzerland. It provided portfolio management and related private banking services primarily to high net worth clients. On April 15, 2015, it ceased being a licensed Swiss bank.
ARVEST opened, maintained and serviced accounts for U.S. persons that it knew or had reason to know were likely not declared to the IRS or the U.S. Department of the Treasury, as required by U.S. law. The bank helped clients set up entities, including trusts and foundations, in Liechtenstein, St. Kitts and other jurisdictions, with bank representatives serving as officers of certain of these entities, and opened ARVEST accounts in the names of these entities.
For several U.S. customers, ARVEST gave the accountholders a travel debit card, which did not have a name imprinted on the card. These cards were tied to accounts that the accountholders held in their names at a third-party Swiss Bank specializing in this service.
Since Aug. 1, 2008, ARVEST had 52 U.S.-related accounts, with a maximum aggregate asset value of over $134 million. ARVEST will pay a penalty of $1.044 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“The growing number of non-prosecution agreements for the Swiss Bank Program demonstrates the DOJ and IRS resolve to make it increasingly difficult for taxpayers to leave offshore accounts undeclared,” said Deputy Commissioner Douglas O’Donnell of the IRS Large Business and International Division. “Two additional agreements by ARVEST and Banque Pasche highlight the momentum of resolving these potential criminal liabilities and eliminating institutions holding undeclared funds for U.S. account holders.”
“Today’s agreements are significant both individually and in conjunction with the previous Swiss Bank Program agreements,” said Chief Richard Weber of IRS-Criminal Investigation. “Individually, each bank agreement provides additional information to the IRS to assist us in going after illegally concealed offshore accounts and the financial professionals who helped U.S. taxpayers hide assets abroad. Collectively, the bank agreements are a testament to the progress of the Swiss Bank Program and our commitment to the ongoing work with Swiss banks still in the process.”
Acting Assistant Attorney General Ciraolo thanked the IRS, in particular, IRS-Criminal Investigation and the IRS Large Business and International Division for their substantial assistance, as well as John E. Sullivan, Thomas G. Voracek, and Brian D. Bailey, who served as counsel on these matters, Senior Litigation Counsel Nanette L. Davis, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jury Finds Sacramento Area Drug Trafficker Guilty on All CountsRead the Press Release
SACRAMENTO, Calif. — Today, after a five-day trial, a federal jury found Isreal “Puck” Washington, 41, of Sacramento, guilty of all 10 counts in the indictment for trafficking heroin, cocaine, cocaine base, and methamphetamine, United States Attorney Benjamin B. Wagner announced.
“Under the Smart on Crime initiative, the U.S. Department of Justice has refocused its narcotics prosecution efforts against the most significant and dangerous offenders.” U.S. Attorney Wagner stated. “Washington is one of those persons. This marks the end of his drug empire.”
This case is the product of an investigation by the Drug Enforcement Administration, the Sacramento County Sheriff’s Office, the Sacramento Police Department, the Vallejo Police Department, and the Sacramento County District Attorney’s Office.
According to court documents and evidence presented at trial, in 2010, Washington distributed large amounts of cocaine base, cocaine, and heroin in the Sacramento area. Washington used various businesses as a front to conceal and disguise his extensive drug trafficking and operated a large “crew” of gang members as his drug distribution organization. During an investigation in 2010 and 2011, one of Washington’s businesses, Wet Ways Auto Body and Paint Shop, was identified as a place where Washington and his associates conducted drug deals.
In 2012, an undercover operative bought heroin and methamphetamine from Washington’s organization. The drug traffickers operating under Washington included co-defendants Deyonte Spears, 27, of Oakland, and Sacramento residents Tyrone Weathersby, 47; Anthony Sanchez, 31; and Myron Meadows, 44. On May 21, 2013, the DEA served search warrants at two Sacramento-area stash pads controlled by Washington. Agents seized a stolen firearm and more than three pounds of heroin at stash pads maintained by the group.
Charges are pending in a separate indictment against Washington that stems from a 2011 homicide investigation. When deputies executed a search warrant at Washington’s residence, they discovered three semi-automatic pistols, including one with a high-capacity magazine. The indictment alleges that Washington is prohibited from possessing firearms because of four prior felony convictions for drug trafficking and assault with a deadly weapon. A status conference for that case will be set in the near future. (Docket # 2:13-cr-207 MCE)
Washington is scheduled to be sentenced on October 1, 2015, by United States District Judge Morrison C. England Jr. Washington’s co-defendants have all previously pleaded guilty. Co‑defendant Spears is scheduled to be sentenced on July 16, 2015; co‑defendant Weathersby was sentenced to 18 months in prison on October 24, 2014; co‑defendant Sanchez is scheduled to be sentenced on September 10, 2015, and co‑defendant Meadows is scheduled to be sentenced on August 13, 2015. Because of his criminal history, Washington faces a mandatory minimum sentence of 20 years in prison on each of counts two and eight. On the remaining counts, Washington faces maximum statutory penalties of up to life in prison and statutory mandatory minimum sentences of 10 years. the other defendants also face sentences of at least 10 years in prison on the counts to which they have pleaded guilty. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) program that was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
When prosecuted in federal court, drug traffickers typically receive much harsher sentences. In addition to the longer sentences imposed, unlike state court prisoners who are released early on parole, there is no early release on parole in the federal system.
Jury Finds Ex-Head of Johnstown Redevelopment Authority Guilty of Extortion, BriberyRead the Press Release
JOHNSTOWN, Pa. - After deliberating approximately two hours, a jury of four men and eight women found Ronald W. Repak guilty of violating federal extortion and bribery laws, United States Attorney David J. Hickton announced today, Thursday, July 9, 2015.
Repak, 63, of Johnstown, Pa, was tried before United States District Judge Kim R. Gibson in Johnstown.
According to Assistant United States Attorney Stephanie L. Haines who prosecuted the case, evidence presented at trial established that Repak, while serving as Executive Director of the Johnstown Redevelopment Authority (JRA), engaged in conduct in violation of the Hobbs Act for extortion under color of official right, and engaged in acts of federal program bribery. Specifically, in exchange for Repak’s official actions and influence as the Executive Director of the JRA to facilitate the award of JRA contracting work, Repak solicited and obtained from local contracting firms a new roof for his personal residence and building demolition and grading services at Evolution Gym, his son’s privately-owned business. He was convicted of two counts for extortion under color of official right and two counts of federal program bribery relative to the roof and the Evolution Gym. Mr. Repak was found not guilty of a charge of extortion under color of official right and federal program bribery in relation to multiple Pittsburgh Steelers football game tickets.
Judge Gibson scheduled sentencing for Dec. 8, 2015, at 10 a.m. Based upon the convictions handed down by the jury, the law provides for a maximum total sentence of 60 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation conducted the investigation that led to the prosecution of Repak.
ICE launches task force in USVI to combat child predatorsRead the Press Release
ST. THOMAS, U.S. Virgin Islands – Citing the need for a territory-wide approach to fighting the escalation of child exploitation and other predatory crimes against children, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in St. Thomas and St. Croix has partnered with members of local, state and federal law enforcement, and community leaders, to form the U.S. Virgin Islands Crimes Against Children Task Force VICACTF).
Through VICACTF, federal and local law enforcement agencies will pool their resources to jointly investigate all crimes committed against children in the USVI. Task Force members will be encouraged to share evidence, ideas and investigative and forensic tools to ensure the most successful prosecutions possible. As such, the VICACTF will allow law enforcement to speak with a unified voice to defend the children of the U.S. Virgin Islands. The VICACTF is composed of the following agencies: ICE-HSI (lead agency), U.S. Attorney’s Office, U.S. Marshals Service, the Virgin Islands Police Department, the Virgin Islands Department of Justice, U.S. Customs and Border Protection (CBP) and the Virgin Islands Department of Human Services and Family Resource Center.
Each year, millions of children fall prey to sexual predators. These young victims are left with permanent psychological, physical and emotional scars. It is one of ICE's most important missions to investigate and target those who possess, transport and produce child pornography, as well as those who engage in child sex tourism, and those who use sex to entice minors. Based on the number of complaints received by the National Center for Missing and Exploited Children (NCMEC) CyberTipline, Internet crimes against children are rising at alarming levels.
In July 2003, in an effort to put an end to this type of criminal activity and protect children worldwide, ICE developed an initiative known as “Operation Predator.” Under Operation Predator, ICE and its law enforcement partners identify, investigate and arrest child predators and sexual offenders wherever they may attempt to hide. Since the inception of Operation Predator, the number of NCMEC referrals for new child exploitation cases in ICE HSI San Juan field office area of responsibility, which includes the USVI and Puerto Rico, has reached an all-time high resulting in more than 245 arrests. This year, the number of child exploitation-related arrests has increased by 39 percent with 50 arrests thus far compared to 36 in fiscal year 2014.
“ICE HSI is pleased to lead this initiative as it shows our commitment and that of our partners to protect our children from online predators,” said Angel M. Melendez, special agent in charge of HSI Puerto Rico and the U.S. Virgin Islands. “Joint partnerships such as the VICACTF should send a clear message to those who exploit the most vulnerable segment of our society, our children, that we will not rest until they are brought to justice.”
“It is absolutely essential that members of law enforcement, social service agencies and other stakeholders work together and leverage existing resources to prevent the exploitation of children,” said U.S. Attorney Ronald W. Sharpe. “The U.S. Attorney’s Office is proud to be a part of this initiative to protect our children.”
“The Virgin Islands Department of Justice is committed to protecting the children within this community and will make every effort to prosecute identified child predators and sexual offenders. With an increase in this type of criminal activity, we must become more vigilant and use our resources more effectively to combat crimes against children and prosecute offenders to the fullest extent of the Law,” said Virgin Islands Acting Attorney General James Carroll.
“The Virgin Islands Police Department embraces the collaborative efforts of the federal and local partnerships in addressing the issues relating to crimes committed against children,” said Virgin Islands Police Commissioner Delroy Richards, Sr. “If the children are indeed our future then we must protect them from all predatory elements that seek to undermine the very laws that are enacted to shield them from those elements. Our resources must be directed to a common goal that centers on the eradication of all suspected predators in the territory. The bottom line is ‘zero’ tolerance.”
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its tollfree 24-hour hotline, 1-800-THE-LOST.
For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.
HSI is a founding member and current chair of the Virtual Global Taskforce, an international alliance of law enforcement agencies and private industry sector partners working together to prevent and deter online child sexual abuse.
# ICE #
U.S. Immigration and Customs Enforcement (ICE) is the largest investigative arm of the Department of Homeland Security. ICE is a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities. For more information, visit: www.ICE.gov. To report suspicious activity, call 1-866-347-2423.Houston Man Pleads Guilty to Conspiracy to Distribute CocaineRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BAKEER RASHED, JR., 33, of Houston, pled guilty today to a one-count superseding Bill of Information charging him with conspiring to distribute 500 grams or more of cocaine hydrochloride.
According to court documents, from July 25, 2006, through February 19, 2007, RASHED conspired to distribute more than 500 grams of cocaine hydrochloride with co-conspirators living in Louisiana. RASHED was the point of contact for facilitating numerous drug deals.
RASHED faces a sentence of not less than 5 years but not more than 40 years of incarceration, a fine of not more than $5,000,000 and supervised release of not less than 4 years. U.S. District Judge Ivan L.R. Lemelle set sentencing for October 14, 2015.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation with assistance from the St. Tammany Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Edward J. Rivera is in charge of the prosecution.
Rashed Bakeer, Jr. Factual Basis.pdf (1.93 MB)
Hood Canal Homeowner Pleads Guilty to Making False Statement to Federal AuthoritiesRead the Press Release
A Hood Canal waterfront property owner pleaded guilty today in U.S. District Court in Tacoma to the federal felony offense of making a false statement to a federal official in connection with his unlawful construction of a beachfront bulkhead, announced U.S. Attorney Annette L. Hayes. JON KOLOSKI, 74, of Potlach in Mason County, constructed the bulkhead in September 2011, without the appropriate permit from the U.S. Army Corps of Engineers. KOLOSKI had been told by both Mason County officials and the Corps that he needed the federal permit to construct the bulkhead. After he failed to complete the permit process, and after the new bulkhead had been installed, KOLOSKI falsely told the U.S. Army Corps of Engineers via email that he no longer needed the permit as he was not going to replace the previously existing bulkhead. A subsequent inspection by the Corps of Engineers revealed the bulkhead had already been constructed and was in violation of federal and state rules. KOLOSKI is scheduled to be sentenced by U.S. District Judge Benjamin H. Settle on October 5, 2015.
“Not only did this defendant knowingly proceed without a permit, he lied to federal officials in an effort to hide his wrongdoing,” said U.S. Attorney Annette L. Hayes. “These lies made it harder to protect the environment that we so cherish here in the Pacific Northwest and violated the public trust.”
According to the plea agreement, KOLOSKI admits that in the late 1990s he started exploring the replacement of the existing bulkhead at his beachfront property. He was told by Mason County authorities that any new bulkhead had to remain on the footprint of the existing bulkhead, and could not extend further than 6 feet past the ordinary high water mark. KOLOSKI was also informed that any work that extended beyond the ordinary high water mark had to be approved and permitted by the U.S. Army Corps of Engineers. In early 2010, Mason County issued permits for a new bulkhead 6 feet past the ordinary high water mark. In June 2010, an official with the U.S. Army Corps of Engineers informed KOLOSKI that he needed to apply for a permit. In paperwork submitted to the Corps, KOLOSKI said the bulkhead would be ten feet past the ordinary high water mark. The Corps asked for more information on the project, but KOLOSKI did not respond and in September 2010 the permit process was cancelled.
In October 2010, KOLOSKI revived the process by submitting some of the required information and he was informed of the time frame for permit approval. Still without a permit, in mid-2011 KOLOSKI went forward and hired a contractor. In September 2011 KOLOSKI had the bulkhead installed ten feet past the ordinary high water mark. The Corps of Engineers was unaware of the construction and sent KOLOSKI information on specific requirements for a permit in early 2012. KOLOSKI responded in April 2012 that due to financial considerations he no longer planned to build the new bulkhead and asked that his application for a permit be withdrawn. KOLOSKI sent the email some six months after having the new bulkhead constructed. In May 2012, a Corps of Engineers inspector visited the KOLOSKI property and discovered the new bulkhead had been constructed without a permit and in violation of rules regarding the distance seaward from the ordinary high water mark.
“The defendant made false statements designed to mislead government authorities,” said Lance Ehrig, Acting Special Agent in Charge of EPA’s criminal enforcement program in the State of Washington. “As a principal founder of an environmental engineering firm and as a geologist, Mr. Koloski was well aware of the permit requirements for shorelines in and around the Puget Sound region. Our government functions properly only when individuals and corporate entities submit honest and truthful information while requesting government oversight of projects that could affect the environment. Today’s guilty plea demonstrates that violators who deliberately waste government resources – and taxpayers’ money – will be prosecuted.”
In addition to the criminal charge, KOLOSKI also settled civil violations of the federal Clean Water Act.
“Mr. Koloski’s unpermitted work resulted in the loss of endangered salmon habitat,” said David Allnutt, Director of the Office of Ecosystems, Tribal and Public Affairs in the EPA Seattle office. “We work closely with our local and state partners and spend millions of dollars on Puget Sound protection and recovery. It is imperative that developers who work on sensitive shoreline habitats have permits that allow for development to proceed in a way that protects the environment.”
KOLOSKI has agreed to pay $60,000 in civil penalties and $60,500 to the Hood Canal Coordinating Council for mitigation of salmon habitat to offset environmental impacts associated with construction of the bulkhead. In addition, the civil settlement requires habitat restoration at the site of the bulkhead to remedy habitat loss.
The EPA worked with a team of agencies which included Mason County, Washington Department of Ecology, Washington Department of Fish and Wildlife, the U.S. Army Corps of Engineers, and National Oceanic and Atmospheric Administration to resolve this case.
The case is being prosecuted by Assistant United States Attorney James Oesterle.
Heroin Supplier and Crack-Cocaine Distributor for the Grape Street Crips Gang Both Plead GuiltyRead the Press Release
NEWARK, N.J. – Two drug suppliers for the Grape Street Crips street gang today admitted distributing large quantities of heroin and crack-cocaine in and around Newark, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Toma Williams, a/k/a “T-Dubbs,” 38, and Jihad Coles, a/k/a “Half Dead,” 30, both of Newark, pleaded guilty before U.S. District Judges Madeline Cox Arleo and Esther Salas, respectively, in Newark federal court. Williams pleaded guilty today to an information charging him with one count of conspiracy to distribute one kilogram or more of heroin and one count of using a firearm in furtherance of a drug-trafficking crime. Coles pleaded guilty on July 8, 2015 to a separate information charging him with one count of conspiracy to distribute 280 grams or more of crack-cocaine.
In May 2015, over the course of three weeks, 50 alleged members and associates of the Grape Street Crips were charged in criminal complaints that alleged drug-trafficking, physical assaults, and witness intimidation. The charges were the result of a long-running investigation led by the Drug Enforcement Administration (DEA) and the FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics. Over the course of the entire investigation, 71 defendants have been charged with federal and state charges.
According to documents filed in this case and statements made in court:
Williams admitted that, between March 2014 and Oct. 3, 2014, he conspired with others to distribute kilogram quantities of heroin to members and associates of the Grape Street Crips. During the course of a wiretap investigation of Williams, the DEA learned that Williams was a supplier of heroin to members of the Grape Street Crips operating in and around the area of North 5th Avenue and 6th Street in Newark. In addition, Williams ran a drug-trafficking organization that supplied heroin to other individuals in and around Newark and Jersey City, New Jersey. Following Williams’ arrest, DEA agents discovered a sophisticated secret compartment inside Williams’ car. Inside that secret compartment, Williams had approximately two kilograms of heroin and a loaded semi-automatic firearm, which Williams admitted today he used to protect his supply of heroin and his drug profits.
Coles admitted that, between March 2012 and August 2012, he conspired with others to distribute hundreds of grams of crack-cocaine at the Mildred Terrell Homes public-housing complex located on Riverview Terrace in Newark, New Jersey. As a long-time member of the Grape Street Crips, Coles admitted today that he served as an organizer and leader of the crack-cocaine distribution conspiracy.
The heroin conspiracy charge to which Williams pleaded guilty carries a mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a fine of up to $10 million. The firearms charge carries a mandatory minimum sentence of five years in prison—which must run consecutive to the sentence imposed for the heroin conspiracy—a maximum sentence of life in prison, and a fine of up to $250,000. The crack-cocaine conspiracy charge to which Coles pleaded guilty carries a mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a fine of up to $10 million. Williams and Coles are scheduled to be sentenced on Oct 19, 2015 and Nov. 9, 2015, respectively.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges. Fishman also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Essex County Sheriff’s Office under the direction of Sheriff Armando B. Fontoura, for their work on the investigation.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Defense counsel:
Toma Williams: Linda Foster, Esq., Newark
Jihad Coles: David A. Ruhnke, Esq., Montclair, New Jersey
Grand Jury Returns Indictment Charging Pair with May Robberies of Check City, Smoke HouseRead the Press Release
SALT LAKE CITY – A federal grand jury returned a five-count indictment Wednesday charging Manmeet Singh Bhatia and Marc Conrad Kammerman with May 14, 2015, robberies of Check City located at 1295 East 3300 South and The Smoke Shop located at 2343 East 3300 South in Salt Lake County.
Bhatia, age 28, of South Jordan and Kammerman, age 41, of Murray, are charged with two counts of robbery, which are violations of the federal Hobbs Act. Kimmerman is also charged with two counts of using a firearm during the commission of a crime of violence and one count of felon in possession of a firearm.
Police officers responded to a robbery in progress at a Check City on 3300 South on May 14, a rainy night. By the time the officers arrived at the business, the alleged suspect had fled the scene. The victim of the robbery described a suspect wielding a black handgun. Later that night, a man walked into The Smoke House, also on 3300 South, a committed a robbery. A black handgun was also used during the commission of this robbery. A witness watched the alleged robber flee the store and get into the passenger side of a black car. The witness was also able to provide a partial license plate number.
Responding officers later observed a black car in a self-service car wash and identified items matching descriptions provided by witnesses at the two businesses. Kammerman, who is a convicted felon, was found in possession of a Beretta 9mm handgun.
The potential maximum penalty for a conviction of robbery under the Hobbs Act is 20 years in federal prison and a fine of $250,000. The potential maximum penalty for brandishing a firearm during the commission of a violent crime is life in prison with a mandatory minimum sentence of seven years. Possession of a firearm by a restricted person carries a potential 10-year sentence. Federal arrest warrants will be issued for the defendants.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office and investigated by the FBI and the Unified Police Department.
Four Leaders and Members of the Schuele Boys Gang Charged for Their Involvement in 15 Years of Drug Trafficking and Violence Including Two MurdersRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a 15 count superseding indictment charging four members of the Schuele Boys Gang with various murder, racketeering conspiracy, drug trafficking and gun charges involving the shooting deaths of two individuals.“While nothing can restore a homicide victim to his family, today’s indictment at least provides answers to two families whose loved ones were murdered,” said U.S. Attorney Hochul. “As alleged, this gang not only committed murder, it filled the streets of a city neighborhood with other crimes of violence, guns and drugs. As we have said in the past, law enforcement will simply not allow a gang to hold a community hostage.”
Aaron Hicks, Marcel Worthy, Roderick Arrington and Letorrance Travis, all of Buffalo, NY, are charged with racketeering conspiracy, narcotics conspiracy and possession of firearms in furtherance of a crime of violence and drug trafficking crime. In addition, defendants Worthy and Arrington are charged with murder in aid of racketeering activity and discharge of a firearm in furtherance of a crime of violence. Arrington is also charged with attempted murder in aid of racketeering activity, possession of heroin with intent to distribute, maintaining a drug involved premises, and possession of a firearm by a convicted felon.
Defendants Hicks and Travis face a mandatory minimum 10 years in prison with a maximum of life if convicted. Defendants Worthy and Arrington face mandatory life in prison.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that according to the superseding indictment, between 2000 and 2015, the defendants were leaders and members of the Schuele Boys Gang, which operated in the Schuele Avenue area of the East Side of Buffalo. The gang is alleged to be responsible for multiple acts of violence and the distribution of illegal narcotics including cocaine, crack cocaine and marijuana.
On December 17, 2006, defendant Worthy and others confronted a group of teenagers at a gas station at Grider Street and East Delavan Avenue in Buffalo, in the neighborhood controlled by the Schuele Boys. Worthy and the others asked them if they were members of the Chelsea Boys, a rival gang, but they were not. A short time later, Worthy and the others drove by the same group of teenagers who were in the vicinity of 82 Durham Avenue and shot and killed 16 year old Kevin Gray.
On August 30, 2012, defendant Arrington shot and killed Quincy Balance in the vicinity of Northland and Stevens Avenues in Buffalo, a neighborhood also controlled by the Schuele Boys. Defendants Hicks, Worthy, Arrington and others believed that victim Quincy Balance was involved in the shooting death of a Schuele Boys associate four days earlier on August 26, 2012.
The superseding indictment further states that on November 6, 2011, law enforcement officers seized 24 kilograms of cocaine and $170,000 in cash from defendant Travis and others. The cocaine was estimated to be worth nearly $1,000,000.
A total of 27 defendants have been charged in the case, to date nine have been convicted.
The superseding indictment is the culmination of an investigation by Federal Bureau of Investigation Safe Streets Task Force, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, the New York State Police, under the direction of Major Michael Cerretto, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, the Edinboro, Pennsylvania Police Department, under the direction of Chief Jeff Craft, and the Edinboro University Police Department, under the direction of Chief Angela Vincent. The FBI Safe Streets Task Force includes the Amherst Police Department; Buffalo Police Department; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Cheektowaga Police Department; Erie County Sheriff’s Office; Hamburg Police Department; Lancaster Police Department; Niagara Frontier Transportation Authority; New York State Department of Correctional Services; New York State Police; U.S. Border Patrol; and U.S. Immigration and Customs Enforcement–Homeland Security Investigations.
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.
Four Convicted in Violent March 2015 Humble Bank RobberyRead the Press Release
HOUSTON – With the guilty pleas of two more men today, four people now stand convicted for the take-over robbery of the Shell Federal Credit Union that occurred March 19, 2015, announced U.S. Attorney Kenneth Magidson.
Derrick Devon Malone, 24, and Christopher Parker, 28, both of Houston, pleaded guilty this morning before U.S. District Judge Alfred H. Bennett to a two-count indictment for bank robbery and possessing a firearm during the commission of a crime of violence. Two others - Shaterrika Monique West-Malone, 27, and Crystal Gail McCain-Sims, 25, also of Houston, previously pleaded guilty in a related case to a one-count criminal information charging them with bank robbery.
On March 19, 2015, the four defendants robbed the Shell Federal Credit Union located at 4787 Wilson Road in Humble.
McCain-Sims drove the group to the bank and served as the getaway driver after the robbery, while West-Malone was the lookout. West-Malone entered the bank shortly before the robbery and notified Malone and Parker via text message that there was no security guard in the premises. She then rejoined McCain-Sims in the getaway vehicle, while the male accomplices entered and robbed the bank.
Malone and Parker entered the bank through the main entrance at approximately 10:59 a.m. During their entry, Malone, who was armed with a pistol, grabbed a departing bank customer with his free hand and threw her back inside and onto the floor. Parker then confronted a bank employee and yelled, “Give me the money b***h,” grabbed one customer’s cash and identification cards from the counter and jumped onto the tellers’ counter where he joined Malone, who was pointing his pistol at the heads and bodies of the tellers. Malone was screaming such things as “Hurry we will shoot you b***h, give me the money b***h, all the money b***h.” Parker also shouted “We want money, I’ll shoot you.”
After seizing a significant amount of cash from the bank as well as a customer, Malone and Parker ran out the door, climbed into the getaway vehicle and fled the scene with their female accomplices.
Malone was captured approximately 30 minutes after the robbery, while Parker was apprehended shortly thereafter.
Bank cameras had captured images of the vehicle which allowed law enforcement to promptly identify the perpetrators. West-Malone was also taken into custody that day as an officer witnessed her exit the getaway vehicle and enter her apartment. McCain-Sims was apprehended the next day following her identification as the owner of the vehicle. Customers and employees inside the credit union later positively identified the two men as the violent robbers.
McCain-Sims was permitted to remain on bond, while the three others are in custody pending their sentencing hearings. McCain-Sims and West-Malone are set for Aug. 27, 2015, at which time they face up to 20 years in prison for bank robbery. Their male accomplices will be sentenced Sept. 17, 2015, at which time they each face up 25 years for the bank robbery as well as a mandatory seven years for the firearms charges which must be served consecutively to the other prison term imposed.
The charges are the result of an investigation by the FBI’s Bank Robbery Task Force which included the Harris County Sherriff’s Office. Assistant U.S. Attorney Michael Kusin is prosecuting the case.
Former President of Townsend Controls, Inc. Sentenced to 40 Months Prison and 3 Years Court Supervision for Failing to Pay $3.3 Million in Payroll TaxesRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Maria Elizabeth Townsend, age 39, of Burbank, Washington, was sentenced yesterday following conviction after a five-day jury trial in February 2015 of ten counts of failing to pay over employment taxes to the IRS. United States District Court Judge Thomas O. Rice sentenced Maria Elizabeth Townsend to a 40-month term of imprisonment and a 3-year term of court supervision following release from federal prison. The Court also ordered Mrs. Townsend to pay $3,327,124 in restitution to the IRS and $8,048 in costs of prosecution to the United States, and a $1,000 special penalty assessment. Mrs. Townsend was immediately taken into custody by the U.S. Marshals following sentencing.
According to information disclosed during court proceedings, Townsend was the President and majority shareholder of Townsend Controls, Inc. (TCI), a Pasco, Washington electrical contractor that employed over a hundred employees. The majority of TCI’s employees were members of Local 112 of the International Brotherhood of Electrical Workers (Local 112). For sixteen quarters between 2005 and 2009, Townsend withheld $3,361,246 in employment taxes from the wages of the members of Local Union 112 that TCI employed as well as its other-non-union employees but failed to pay over those taxes to the IRS. Between April 2007 and September 2009, Townsend authorized the disbursement of over $31 million in TCI funds to pay vendors and for other purposes, instead of the IRS for payroll taxes. According to information disclosed during court proceedings, instead of paying the IRS, Townsend paid TCI’s vendors and employees, paid a large (approximately $200,000) dividend to one of her partners, disbursed $300,000 toward payment of her joint personal income tax obligations, disbursed more than $260,000 in funds to family members, and spent $22,000 to construct a pool at her residence, $30,000 to purchase a boat, $30,000 to purchase a Cadillac Escalade, and $42,982 to purchase a Jeep Commander.
Townsend filed Forms 941 (Quarterly Employment Tax Returns) with the IRS and paid all the employment taxes that were due from the second quarter of 2002 through the third quarter of 2004. Then, Townsend stopped filing Forms 941 from the fourth quarter of 2004 through the third quarter of 2005. Townsend, however, made periodic deposits of payroll taxes during the fourth quarter of 2004 through the second quarter of 2005. An IRS revenue officer visited TCI’s Pasco, Washington office in December 2005, and met with Townsend to secure the delinquent Forms 941 and the payroll taxes owed for the third quarter of 2005. Within a few days of that visit, the IRS received the delinquent Forms 941 for the fourth quarter of 2004 through the third quarter of 2005, signed by Townsend. The IRS also received full payment for the payroll taxes that were due as reported on the Form 941 for the third quarter of 2005. Townsend did not remit any periodic deposits of payroll taxes for the ten consecutive calendar quarters beginning April 1, 2007, through September 30, 2009, even though she continued to preparer TCI’s weekly payroll using accounting software that generated reports showing the amount of taxes withheld from each employee’s paycheck as well as the total amount of taxes withheld from all the employees. She also did not pay over payroll taxes for the quarters ended December 31, 2005, March 31, 2006, June 30, 2006, September 30, 2006, December 31, 2006 and March 31, 2007. In order to conceal the non-payment of employment taxes from the IRS, Townsend did not timely file TCI’s Forms 941 with the IRS, with the exception of the Form 941 for the tax period ended September 30, 2009. An IRS revenue officer ultimately secured the delinquent quarterly employment tax returns in December 2010 after TCI’s dissolution.
Townsend claimed she was suffering from multiple psychiatric disorders, including Bipolar I Disorder and Obsessive Compulsive Disorder that paralyzed her when it came to being able to paying over the payroll taxes. Townsend also claimed TCI’s electricians were independent contractors, not employees, even though she withheld $3.3 million in taxes from their wages.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, “The sentence imposed in this case reflects the seriousness of ‘white collar’ crime and that those accused of failing to pay over payroll taxes to the IRS will be fairly and justly held accountable for their criminal conduct. Ormsby went on to say this is one of the biggest cases of this kind pending in the country and is representative of an important area of emphasis by both Internal Revenue Service and the Department of Justice. This case is yet another example of the commitment of the United States Attorney’s Office to prosecute aggressively fraud cases in the Eastern District of Washington. “Holding business owners accountable who willfully evade their employment tax obligations to line their own pockets is among the Tax Division’s highest priorities,” said Acting Assistant Attorney General Ciraolo. “These offenders, who not only steal from the United States, but also take advantage of honest competitors, will be prosecuted to the fullest extent of the law, and like Ms. Townsend, will face incarceration and substantial financial penalties.” The Internal Revenue Service Criminal Investigation Division is commended for its tireless efforts in thoroughly investigating this case.” IRS Criminal Investigation Special Agent-in-Charge Teri Alexander stated, “Maria Townsend essentially stole not only from the government but from her own employees. IRS Criminal Investigation realizes the detrimental consequences of employment tax evasion. It results in the loss of tax revenue to the United States government and the loss of future Social Security or Medicare benefits for the employees. I want to thank the U.S. Attorney's Office and the Department of Justice, Tax Division, for its dedicated leadership and professionalism in pursuit of justice served today.”
The investigation was conducted by the IRS Criminal Investigation Division. The case was prosecuted by George J.C. Jacobs, III, Assistant United States Attorney for the Eastern District of Washington, and Lisa L. Bellamy, Trial Attorney, U.S. Department of Justice, Tax Division, Criminal Enforcement Section.
Former Owner of Las Vegas Endoscopy Center, Dipak Desai, Sentenced to 71 Months in Federal Prison for Fraud ConvictionRead the Press Release
LAS VEGAS, Nev. – Dipak Desai, the former physician owner of a defunct Nevada endoscopy center, was sentenced today to 71 months in federal prison, three years of supervised release, and ordered to pay over $2.2 million in restitution for defrauding Medicare, Medicaid and other private health insurance companies by inflating and overcharging for anesthesia services, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“Dr. Desai intentionally defrauded the federal health care system for his own personal enrichment,” said U.S. Attorney Bogden. “We are hopeful this closes a long and sordid chapter of harm caused to the people and businesses of Nevada.”
Desai, 65, of Las Vegas, was sentenced by U.S. District Judge Larry R. Hicks. Desai pleaded guilty in April to one count of conspiracy to commit health care fraud and one count of health care fraud.
Tonya Rushing, the former chief operating officer of the endoscopy center, was sentenced in May to one year and one day in prison for her guilty plea to one count of conspiracy to commit health care fraud.
According to Desai’s guilty plea agreement, between about January 2005 and February 2008, Desai and Rushing conspired to overcharge Medicare, Medicaid, and other private health insurance companies at the Endoscopy Center of Southern Nevada by significantly overstating the amount of time the certified registered nurse anesthetists spent with patients on a given procedure. Desai and Rushing created a separate company, Healthcare Business Solutions, owned by Rushing, to handle the billing for the anesthesia services. This company received approximately nine percent of all money collected for anesthesia services rendered at the endoscopy center. Desai and Rushing imposed intense pressure on the endoscopy center employees to schedule and treat as many patients as possible in a day, and instructed the nurse anesthetists to overstate in their records the amount of time they spent on the anesthesia procedures. Desai and Rushing also instructed the office staff to rely on the false anesthesia records when preparing the claims for reimbursement which were sent to Medicare, Medicaid and the insurance companies. The plea agreement states that the parties agreed that the amount of loss to the victims is approximately $2.2 million.
This case was investigated by the FBI, the Office of the Nevada Attorney General, Health and Human Services Office of Inspector General, Department of Labor Office of Inspector General, Food and Drug Administration Office of Criminal Investigations, and the United States Postal Inspection Service, and prosecuted by Assistant U.S. Attorney Crane M. Pomerantz and Mark N. Kemberling, who was designated as a Special Assistant U.S. Attorney on this case and is Chief Deputy Nevada Attorney General.
According to a recent report by the Inspector General for the U.S. Department of Health and Human Services, for every dollar the Departments of Justice and Health and Human Services have spent fighting health care fraud, they have returned an average of nearly eight dollars to the U.S. Treasury, the Medicare Trust Fund and others. To learn more or to report Medicare fraud, go to http://www.stopmedicarefraud.gov/
Former Member of Croatian Defense Council in Bosnia and Herzegovina (HVO) Pleads Guilty to Fraudulently Obtaining Green CardRead the Press Release
United States Attorney Andrew M. Luger and Acting Special Agent in Charge of Homeland Security Investigations St. Paul Division William Lowder today announced the conviction of ZDENKO JAKIŠA, 47, for obtaining a Permanent Resident Card (I-551), commonly referred to as a “Green Card,” by materially false claims and statements. JAKIŠA entered his plea today before Judge Susan Richard Nelson in United States District Court in St. Paul, Minn.
According to the defendant’s guilty plea and documents filed in court, JAKIŠA is a Bosnian citizen and lawful permanent resident of the United States living in Minnesota. On April 17, 2014, JAKIŠA possessed a green card that was unlawfully obtained. In response to questions on his legal permanent resident applications, JAKIŠA knowingly denied that he had been arrested, charged, or imprisoned for breaking the law in Bosnia and Herzegovina.
According to the defendant’s guilty plea and documents filed in court, between July 1990 and October 1997, JAKIŠA was charged with at least seven separate crimes in Bosnia and Herzegovina. On July 13, 1990, JAKIŠA was charged and convicted of Violent Behavior. He was charged with Grand Larceny on April 7, 1991, for allegedly stealing a cash register from a café. JAKIŠA was charged and convicted of Causing General Danger in September 1993 for shooting and killing his neighbor through her bedroom window.
According to JAKIŠA’s guilty plea and documents filed in court, he was arrested, charged and convicted of Theft for stealing commercial scales from an outdoor storage area on October 11, 1994. JAKIŠA was convicted of Infliction of Grievous Bodily Damage in February 1997 for seriously wounding another person who was later discovered bloodied in the street. JAKIŠA was convicted of Disturbing Peace & Public Order for attempting to persuade a woman to leave her home by threatening that he would get a firearm, throwing bricks at her home, and by attempting to break through the front door. Less than a week later, JAKIŠA was charged with fighting and stealing a gold necklace from the victim’s neck.
This case is the result of an investigation conducted by Homeland Security Investigations.
Assistant U.S. Attorney from the District of Minnesota Nathan P. Petterson and Trial Attorney Ann Marie Ursini of the Human Rights and Special Prosecutions Section of the Criminal Division, U.S. Department of Justice are prosecuting the case.
Defendant Information:
ZDENKO JAKIŠA, 47
Forest Lake, Minn.
Convicted:
- Possession of unlawfully obtained documents, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Maryland Licensed Counselor Sentenced to 35 Years in Prison for Conspiring to Sexually Exploit an InfantRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Stephen H. Schaffner, age 35, of Greensboro, Maryland, today to 35 years in prison, followed by supervised release for life, for a conspiracy to sexually exploit a child, and for sexual exploitation of a six week old baby who was born prematurely, in order to produce images documenting the abuse. Judge Motz also ordered that upon his release from prison Schaffner must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; United States Attorney for the Southern District of California Laura E. Duffy; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation - Maryland; Special Agent in Charge Eric Birnbaum of the Federal Bureau of Investigation – San Diego Division; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Chief Jeff A. Jackson of the Greensboro Police Department and Chief David A. Spencer of the Easton Police Department.
“The defendant was caught because in 2014, police were still able to obtain a warrant and find images on a cell phone,” said U.S. Attorney Rod J. Rosenstein. “Companies now market encrypted devices that are immune from search warrants and allow pedophiles to molest children and trade photographs with little risk of detection, even when a federal judge finds that there is probable cause and issues a court order. Law enforcement officials have a responsibility to alert law-abiding citizens about the consequences of ‘going dark,’ so they will not be surprised when police cannot obtain evidence of serious crimes.”
According to his plea agreement, for over four years, Schaffner was a licensed associate counselor in Arizona, providing behavioral health and education services for children ages 11-17 whose lives and family relationships were in crisis, or who were struggling with mental health or substance abuse challenges. Schaffner also worked as a clinician in Easton, Maryland for 18 months, providing individual and family mental health counseling, including treatment for children and for sex offenders. In 2011 and 2012, Schaffner attended trainings and conferences focused on the assessment, management and treatment of sex offenders. On October 30, 2012, Schaffner sent an adult counseling client inappropriate text messages of a sexual nature. In November 2012, Schaffner was fired from the practice where he worked, and his license was later suspended.
Schaffner admitted that beginning in 2004, he collected child pornography he obtained from the internet. Thousands of images and videos of minors engaged in sexually explicit conduct were located on digital devices, storage media and online accounts seized from Schaffner. In his electronic communications, Schaffner repeatedly expressed a sexual interest in boys from “age zero” up, and his desire to commit violent sexual abuse against infants, including making the children cry during the abuse, and injuring or killing children in the course of sexual abuse. He discussed ways to ensure that the children did not report the abuse, including drugging or killing the children.
According to his plea agreement, in late June 2014, Schaffner met Michael Lutts online. Lutts lived in California and worked as a pediatric nurse at a hospital in San Diego County. Schaffner and Lutts communicated electronically using their cellular phones. On August 4, 2014, Lutts brought home a six week old baby boy, born prematurely, who was placed in his care as a foster child. Lutts texted images of the infant to Schaffner.
Over the next several hours, Schaffner exchanged numerous graphic and sexually explicit messages with Lutts about Lutts sexually abusing the infant. Schaffner directed Lutts to sexually abuse the infant in specific ways, to produce photos and video that Lutts was to send to Schaffner. Lutts sent Schaffner images and videos with the infant, including images documenting the sexual abuse of the infant. Schaffner and Lutts also discussed Schaffner travelling to San Diego to rape the infant.
According to court documents, the abuse of the infant was discovered when a federal investigation of individuals transmitting child pornography led authorities to obtain a search warrant for Michael William Lutts’s residence in San Diego on August 26, 2014. During that search, law enforcement seized a cell phone that contained images and videos of Lutts sexually molesting the infant. Michael Lutts pleaded guilty in federal court in the Southern District of California to three counts of sexual exploitation of a child and is scheduled to be sentenced on October 13, 2015.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI’s Baltimore and San Diego offices, the Maryland State Police Interstate Crimes Against Children Task Force (ICAC), the San Diego, California ICAC, Greensboro Police Department, and Easton Police Department for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Alessandra P. Serano from the Southern District of California who is prosecuting the case against Michael Lutts, and Assistant U.S. Attorney Zachary A. Myers from Maryland, who is prosecuting the case against Stephen Schaffner.
Former Loudoun County Sheriff’s Deputy Indicted for Asset Forfeiture EmbezzlementRead the Press Release
ALEXANDRIA, Va. – Frank Michael Pearson, 44, a former Loudon County Sheriff’s Deputy from Winchester, Virginia, was indicted by a federal grand jury today on four counts of theft concerning programs receiving federal benefits in relation to his alleged embezzlement of over $200,000 from the asset forfeiture fund at the Loudon County Sheriff’s Office.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and David J. LeValley, Special Agent in Charge of the Criminal Division, FBI Washington Field Office, announced the charges after the grand jury returned the indictment today. An arraignment has been scheduled for July 24, 2015 at 9 a.m. before U.S. District Judge T. S. Ellis, III.
Pearson faces a maximum penalty of 10 years in prison on each count if convicted. 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.
According to the indictment, beginning in 2006 Pearson was designated as the deputy responsible for overseeing the asset forfeiture program for the Loudon County Sheriff’s Office. The indictment further alleges that from in or about 2010 through in or about 2013, Pearson embarked on a scheme to embezzle and steal money totaling in excess of $200,000, which had been entrusted to him in connection with the program. The indictment further alleges that Pearson concealed his embezzlement scheme by making false statements to his coworkers and others about the timing and fact of whether he had deposited seized money into an escrow account maintained by the Loudoun County Sheriff’s Office at a local bank.
This case was investigated by the FBI’s Washington Field Office and the Virginia State Police. The Loudon County Sheriff’s Office cooperated with the investigation. Assistant U.S. Attorneys Matthew Burke and Mark D. Lytle are prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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. 1:15cr193.
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Former Jackson County Correctional Officer Indicted for Using Unreasonable ForceRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former correctional officer at the Jackson County Detention Center has been indicted by a federal grand jury for violating an inmate’s civil rights by using unreasonable force.
Young Isinwa, 45, of Kansas City, Mo., was charged in an indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, July 8, 2015. That indictment was unsealed and made public today upon Isinwa’s arrest and initial court appearance.
The federal indictment alleges that Isinwa deprived an inmate at the Jackson County Detention Center, who is identified in the indictment as “M.F.,” of his Constitutional right to be free from the use of unreasonable force by one acting under color of law.
Isinwa, while on duty working as a correctional officer on Oct. 16, 2011, allegedly kicked M.F. in the head while the inmate was restrained and not posing a threat to Isinwa or others. The inmate suffered bodily injury as a result.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by First Assistant U.S. Attorney David Ketchmark. It was investigated by the FBI.
Former Ft. Hood Soldier Sentenced for Alien SmugglingRead the Press Release
BROWNSVILLE, Texas - Christopher David Wix, a former active duty U.S. Army soldier based at Fort Hood in Killeen, has been sentenced on alien smuggling charges, announced U.S. Attorney Kenneth Magidson. Wix, 21, of Abilene, entered a plea to conspiracy to transport and harbor undocumented aliens Oct. 30, 2014.
Today, U.S. District Judge Hilda Tagle ordered Wix to 12 months and one day in federal prison to be immediately followed by two years of supervised release. At the hearing, additional evidence was presented to include that Wix attempted to use his military identification to facilitate his passing through the immigration checkpoint. In handing down the sentences, Judge Tagle noted Wix’s youthful age and his relatively low rank within the smuggling conspiracy compared to the other defendants as factors for imposing the sentence.
WIx was charged along with Eric Alexander Rodriguez, 20, of Odem, Brandon Troy Robbins, 20, from San Antonio, both also former soldiers based at Ft. Hood; and Arnoldo Gracia, 45, of Harlingen, in a seven-count indictment with the smuggling of undocumented aliens through the immigration checkpoint located at Sarita. Rodriguez, Robbins and Gracia have also entered pleas of guilty and are scheduled for sentencing Aug. 4, 2015.
On Sept. 11, 2014, Rodriguez arrived at the immigration checkpoint in Sarita driving a truck that was registered to Gracia. Customs and Border Protection (CBP) agents looked in the rear floorboard and seat areas and observed his military jacket, a bed sheet and other clothing covering the area. A further inspection revealed two undocumented individuals hiding under the items.
The continuing investigation by Homeland Security Investigations (HSI) revealed two earlier incidents involving Army soldiers stationed at Ft. Hood occurring at the Sarita checkpoint. Agents determined that on April 13, 2014, Robbins had also arrived at the same immigration checkpoint and stated he was soldier going to Fort Hood. In a routine check of his vehicle, agents discovered two undocumented individuals hiding under a blanket. Agents also learned that on June 21, 2014, Wix had arrived at the same checkpoint, driving a car registered to Rodriguez and presented his military identification. Agents conducted a routine check of the vehicle and discovered two undocumented individuals hiding under his military gear. Further investigation revealed Gracia as the person supplying the aliens to the Wix and the others.
Wix was permitted to remain on bond and surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI conducted the investigation with the assistance of CBP. Assistant U. S. Attorney Oscar Ponce is prosecuting the case.
Former FBI agent sentenced for obstructing justice, falsifying records, and possessing heroinRead the Press Release
PHILADELPHIA - Matthew Lowry, 33, of Upper Marlboro, Maryland, was sentenced today to 36 months in prison for tampering with substantial quantities of drug evidence while working as a Special Agent with the Federal Bureau of Investigation ("FBI"). Lowry pleaded guilty to 20 counts of obstruction of justice, 18 counts of falsification of records, 13 counts of conversion of property, and 13 counts of possession of heroin. U.S. District Court Judge Thomas F. Hogan, in the District of Columbia, also ordered 2 years of supervised release, a $15,000 fine, and a $5,425. special assessment.
Lowry was assigned to the Washington, D.C. Field Office ("WFO"), and was a member of the Cross-Border Task Force ("CBTF"). He participated in the undercover purchase of heroin and, in lieu of turning the heroin into evidence and documenting its seizure, Lowry ingested the heroin. He also tampered with heroin evidence seized during several of his investigations.
The matter was referred to the Department of Justice Office of the Inspector General, which conducted the investigation, with assistance from the Federal Bureau of Investigation as requested by the OIG. It was prosecuted by Assistant United States Attorneys Kevin R. Brenner and Maureen McCartney.
Because Lowry’s investigations, as an agent, occurred within the District of Columbia and the districts surrounding it, those offices were recused by the Department of Justice.
Former FBI Agent Sentenced for Obstruction and Drug PossessionRead the Press Release
PHILADELPHIA - Matthew Lowry, 33, of Upper Marlboro, Maryland, was sentenced today to 36 months in prison for various crimes arising from his stealing drug evidence while working as a Special Agent with the Federal Bureau of Investigation (“FBI”). Lowry pleaded guilty, on March 31, 2015, to 20 counts of obstruction of justice, 18 counts of falsification of records, 13 counts of conversion of property, and 13 counts of possession of heroin. U.S. District Court Judge Thomas F. Hogan, in the District of Columbia, also ordered two years of supervised release, a $15,000 fine, and a $5,425 special assessment. As a result of Lowry’s criminal activity, numerous federal investigations were compromised and convicted criminals were released from prison.
Lowry was assigned to a task force that investigated narcotics trafficking and violent gang activity, occurring in and around Washington D.C. and Prince George’s County, Maryland. From approximately July of 2013 through September of 2014, the defendant stole, from FBI custody, at least 20 bags of heroin (some containing hundreds of grams) that he and other agents had seized during the course of five large-scale investigations. The defendant kept the heroin in his government-issued car, in some instances for as long as several months, and he periodically ingested it, often while he was on duty. Before returning the heroin into evidence, the defendant calculated the quantity he had used and replaced it with a different substance, either a weightlifting supplement, Creatine, or a laxative, Purelax. To further conceal his misconduct, the defendant falsified evidence and chain of custody records, including by backdating them and forging his fellow agents’ signatures.
The matter was referred to the Department of Justice Office of the Inspector General, which conducted the investigation, with assistance from the Federal Bureau of Investigation as requested by the OIG. It was prosecuted by Assistant United States Attorneys Kevin R. Brenner and Maureen McCartney.
Because Lowry’s investigations, as an agent, occurred within the District of Columbia and the districts surrounding it, those offices were recused by the Department of Justice.
Former Employee of Leading Proxy Advisory Firm Pleads Guilty in Conspiracy to Provide Confidential Shareholder Voting InformationRead the Press Release
BOSTON – A former employee of one of the country’s leading proxy advisory firms pleaded guilty today in U.S. District Court in Boston to conspiring over a six-year period to provide confidential information about how the firm’s clients had voted on numerous shareholder proposals to a leading proxy solicitation firm.
Brian M. Bennett, 42, of Mount Pleasant, S.C., pleaded guilty to an Information charging him with one count of conspiracy to commit wire fraud and honest services wire fraud. U.S. District Court Judge Denise J. Casper scheduled sentencing for January 13, 2016.
“Individuals who sell the confidences of their employers and clients are committing a crime,” said United States Attorney Carmen M. Ortiz. “The law leaves no room for such betrayals, whether they are in service of a scheme to commit insider trading, to steal intellectual property or, as in today’s case, to provide an unfair advantage in the battle for proxy votes.”
U.S. Attorney Ortiz noted that the government’s investigation is continuing, adding: “Those who would pay such bribes should also take heed: you are no less culpable than the purveyors of the information you are buying. We will use the full arsenal of law enforcement tools available to us to shut down the black market for nonpublic corporate information, and to prosecute those who participate in it.”
Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, said “Mr. Bennett is now facing the consequences for giving away confidential client information in exchange for tickets to high-priced events. The FBI hopes this case sends a strong warning to those individuals and companies who are also buying inside knowledge. They are just as responsible as those selling it and the FBI will use every resource we have to shut them down.”
According to court documents, from 1998 to 2012, Bennett, who was formerly known as Brian M. Zentmyer, worked at one of the leading proxy advisory firms in the United States, including for two years, at the firm’s Boston office. Proxy advisory firms provide institutional investors with research, analysis and recommendations concerning proposals subject to vote by shareholders in publicly-traded companies. The firms may also engage in ancillary businesses, such as helping clients cast their votes, also known as proxy ballots or proxies. Proxy solicitation firms, in turn, assist publicly-traded companies in matters requiring shareholder approval by attempting to gather information about institutional investors’ holdings and the direction of their proxy votes. This information can help proxy solicitors and their clients determine whether particular shareholder proposals are likely to pass or fail, and can thus help to shape their strategies for affecting the outcome of shareholder votes.
Bennett, in the course of his work for the proxy advisory firm, had access to confidential information concerning the firm’s clients, including information about how many shares the clients held in particular publicly-traded companies, whether the clients had voted on particular shareholder proposals, and if so, how they had voted. Bennett was subject to the proxy advisory firm’s code of conduct, which prohibited employees from providing confidential client information to third parties, and accepting gifts.
Between 2008 and 2012, Bennett conspired with an employee of a proxy solicitation firm to provide confidential information about how the proxy advisory firm’s clients had voted on numerous shareholder proposals in return for gifts to Bennett from the proxy solicitation firm. The gifts included tickets worth thousands of dollars to concerts and sporting events.
According to court documents, for example, in February 2008 – one week before the annual shareholder meeting of a California-based semiconductor manufacturer – when the employee of the proxy solicitation firm emailed Bennett inquiring about a pending vote on a proposed performance incentive plan for the California company’s directors and key employees. Bennett responded by providing information about 13 of the company’s institutional shareholders, who were clients of the proxy advisory firm, including how many shares of the company they owned, whether they had voted on the proposed performance incentive plan, and if so, how they had voted. One week later – on the day of the shareholder vote – the proxy solicitation firm employee sent an email to Bennett, inquiring: “I just love asking questions like this: opening day – 3/30 – 2 or 4 tickets?” Bennett responded: “2 tickets is good….” Thereafter, Bennett attended the opening day game between the Atlanta Braves and the Washington Nationals, at Nationals Park in Washington, D.C., using tickets paid for by the proxy solicitation firm.
The charging statute provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and FBI SAC Lisi made the announcement today. The United States Attorney’s Office has also received valuable assistance from the Securities & Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Sarah E. Walters and Stephen E. Frank, Chief and Deputy Chief, respectively, of Ortiz’s Economic Crimes Unit.
Federal inmate pleads guilty to possessing homemade weapon in prisonRead the Press Release
BLUEFIELD, W.Va. – United States Attorney Booth Goodwin announced today that a federal inmate pleaded guilty to possessing a weapon in a federal prison.
Rico Joy, 34, an inmate at the Federal Correctional Institution at McDowell, located near Welch, West Virginia, admitted that on April 21 he possessed a handcrafted knife known as a “shank.” Joy is serving a twenty-year sentence following his 2007 conviction in South Carolina for being a felon in possession of a firearm and ammunition. He faces up to five additional years in prison when he is sentenced on August 15, 2015.
The case was investigated by the Federal Bureau of Prisons and is being prosecuted by Assistant United States Attorney John File. Senior United States District Judge David A. Faber conducted the plea hearing.
Federal Jury Finds Methamphetamine Trafficker GuiltyRead the Press Release
STATESVILLE, N.C. B On Wednesday, July 8, 2015, a federal jury in sitting in Statesville, convicted Roger Dale Franklin, 54, of Lenoir, N.C., of nine charges, including conspiracy to distribute and to possess with intent to distribute methamphetamine, possession of methamphetamine with intent to distribute, possession of firearms in furtherance of drug trafficking, and possession of firearms by a convicted felon, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.
Acting U.S. Attorney Rose is joined in making today’s announcement by Ryan L. Spradlin, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas, Caldwell County Sheriff Alan C. Jones, and Lenoir Police Chief Scott Brown.
Evidence presented at the two-day trial that ended yesterday established that, from 2007 to 2014, Franklin and his co-conspirators sold more than five kilograms of methamphetamine, which has a street value of more than $150,000. In 2013, law enforcement officials in Lenoir and Caldwell County, as well as Morganton, stopped Franklin in vehicles on four occasions and seized methamphetamine from him, his vehicles, and his co-conspirators. On two of those occasions, he was in possession of handguns.
This prosecution in Operation “Dixie Crystal” is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the conviction of more than 50 defendants on methamphetamine trafficking and firearms charges. OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Franklin was indicted by a federal grand jury on December 16, 2014, which indictment was superseded on April 22, 2015. He has been in federal since February 2, 2015, and was in state custody prior to that. Franklin will remain in custody until his sentencing date, which has not yet been set. He faces a statutory mandatory minimum sentence of 15 years to life, and a fine of up to $10,000,000.
The case was investigated by HSI in Charlotte, the Caldwell County Sheriff’s Office, Lenoir Police Department, and Morganton Department of Public Safety.The prosecution of this OCDETF investigation is being handled by Assistant U.S. Attorney Steven R. Kaufman.
Eagle Butte Man Sentenced for Assault with a Dangerous WeaponRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on July 6, 2015, by U.S. District Judge Roberto A. Lange.
Kola Eagle Hunter, age 30, was sentenced to 30 months in custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Eagle Hunter was indicted by a federal grand jury on May 13, 2014, for Assault with a Dangerous Weapon. He pled guilty to the Indictment on April 8, 2015.
The conviction arose from a July 20, 2013, incident in Eagle Butte, when Eagle Hunter drove by the victim’s house and yelled at him. Eagle Hunter was angry with the victim because he believed the victim had broken out the windows in Eagle Hunter’s father’s car several weeks earlier. Later that same day, Eagle Hunter took a club, and ran up to the victim’s front porch. The victim was smoking a cigarette on his front porch when Eagle Hunter struck him in the head with a club. The victim suffered a 5 to 6 inch laceration on his head, which required 16 staples to close.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Alison Ramsdell prosecuted the case.
Eagle Hunter was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Dominican Woman Indicted for Drug Smuggling at Logan AirportRead the Press Release
BOSTON – A Dominican woman was indicted today in U.S. District Court in Boston in connection with smuggling cocaine into the United States at Boston’s Logan International Airport.
Ireline Aponte Melende, 30, of the Dominican Republic was indicted on unlawful importation of a controlled substance. She was arrested and charged in a criminal complaint in May 2015.
According to court documents, on May 10, 2015, Aponte Melende, was stopped at Logan International Airport after she arrived on a flight from the Dominican Republic using a motorized wheelchair. When the wheelchair was x-rayed, Customs and Border Protection officers noticed abnormalities in the wheelchair batteries. The batteries were opened, revealing four bricks containing a white powdery substance which preliminary testing revealed to be cocaine.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $1 million. 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 Shea, Deputy Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Seth B. Orkand of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
District Court Overturns Bankruptcy Court’s Orders Preventing the Termination of Local Skilled Nursing Facility from Medicare and Medicaid ProgramsRead the Press Release
Tampa, FL – U.S. Attorney A. Lee Bentley, III announces that the U.S. District Court has reversed a series of orders entered by the local bankruptcy court that had impeded efforts by the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), to terminate a skilled nursing facility from the Medicare programs. In its appeals from those orders, the United States argued that the bankruptcy court lacked the judicial power to enjoin the administrative authority of CMS over who may participate in Medicare. The district court adopted that argument in full and, in doing so, cleared the way for the administrative termination of the facility from the federally subsidized health program.
Bayou Shores SNF, LLC (Bayou Shores), provides services to patients with serious psychiatric conditions at its Rehabilitation Center of St. Petersburg. The facility had operated under Medicare and Medicaid provider agreements until surveys by the Florida Agency for Health Care Administration (AHCA) found that conditions at the facility constituted immediate jeopardy to the patients’ health and safety. CMS acted on these findings by sending a letter to Bayou Shores advising that the facility would be terminated from Medicare effective August 3, 2014. Under federal law, a state is required to terminate its Medicaid provider agreement when CMS terminates a provider from Medicare.
On August 1, 2014, Bayou Shores filed suit in district court and sought a temporary restraining order (TRO) preventing CMS from terminating the provider agreements. Bayou Shores sought and received a TRO enjoining the termination. On August 15, 2014, and at the request of the United States, the district court vacated the TRO and dismissed Bayou Shores’ complaint, finding that it had no power to grant relief before Bayou Shores had fully pursued the administrative appeal process established to resolve challenges to CMS termination decisions.
Immediately after the district court entered its order dissolving the TRO, Bayou Shores filed a voluntary Chapter 11 bankruptcy petition with the bankruptcy court. Bayou Shores requested the same relief from the bankruptcy court that had been denied by the district court, and sought an emergency order enjoining the termination decision by CMS. The bankruptcy court entered the injunction, finding that the Bankruptcy Code authorized it to do so. The bankruptcy court later found that Bayou Shores’ provider agreements were executory contracts that could be assumed in bankruptcy and confirmed Bayou Shores’ plan of reorganization with an order that required assumption of the provider agreements that CMS had terminated.
The United States appealed these bankruptcy court orders to the district court. The district court found that “the Bankruptcy Court was without jurisdiction to interpose itself in the [administrative] process [of CMS], including entering an injunction to enjoin the provider agreements’ termination.”
The United States was represented in all the above cases by Assistant United States Attorneys Sean Flynn and Christopher Emden.
Bayou Shores SNF LLC v. Burwell, et al.
Case no. 8:14cv1849-T-33MAP (M.D. Fla.)
In re: Bayou Shores SNF LLC,
Case no. 8:14cv2816-T-30 (M.D. Fla.)
Defendants and Charges added to Stolen Identity Tax Refund Fraud Scheme IndictmentRead the Press Release
HOUSTON – A Houston federal grand Jury has added three defendants and additional conspiracy charges to a November 2014 Stolen Identity Refund Fraud (SIRF) indictment, announced U.S. Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service - Criminal Investigation (IRS-CI). The prosecution is part of a national Stolen Identity Refund Fraud initiative that has resulted in a number of prosecutions throughout the United States in recent months.
The original 22-count indictment charged Ronald Dewayne Hadley with the filing of 22 of stolen identity income tax refund claims. The 29-count superseding indictment returned July 1, 2015, adds defendants Lyndell Leroy Price, Leondray Demond Garrison aka “Dre” and Ryan Duron Clay aka “Clayday” and charges all three with conspiracy and additional false tax refund claims totaling approximately $135,555.
The defendants are expected to make their initial appearances tomorrow at 10:00 a.m. before U.S. Magistrate Judge Frances Stacy. The case is presently assigned to U.S. District Judge Melinda Harmon and set for trial July 20, 2015.
The superseding indictment alleges these defendants conspired to obtain identity information. They then allegedly used that information to file 28 false tax returns indicating all of the taxpayers were “barbers” with only “dividend income” who were entitled to a full refund of a fictitious amount of withholding taxes ranging from $4,977 to $6,733. According to the superseding indictment, the defendants conspired to have the IRS deposit the fraudulent refunds to debit cards which were then emptied and shared. The indictment further alleges that in a few instances, the debit cards were used to make purchases directly from local merchants.
The defendants face up to ten years in federal prison on the conspiracy charge and up to five years in federal prison on each of the 28 false claim charges. The face a fine of up to $250,000 fine on each count of conviction.
The case, investigated by IRS-CI, is being prosecuted by Assistant U.S. Attorney Jimmy Sledge Jr.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Defendants Sentenced in Undercover Enticement OperationRead the Press Release
AMARILLO, Texas — Seven of the nine defendants who pleaded guilty to offenses stemming from an undercover enticement operation conducted by multiple law enforcement agencies earlier this year, have been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas. Five of the seven were sentenced this week.
On July 7, 2015, Aaron Joe Davis, 39, was sentenced to 121 months in federal prison. He pleaded guilty in April 2015 to one count of attempted enticement of a child. Robert James Tidwell, 21, was sentenced to five years’ probation with the first six months to be served in home confinement. He pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor. Kolby Shelb Kemp, 22, was sentenced to 21 months in federal prison. He also pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor.
On July 6, 2015, Brad Eugene Sharber, 45, and Daniel Lee Garcia, 38, were each sentenced to 24 months in federal prison. Each pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor.
On June 9, 2015, Jeffery Robert Abraham, 32, was sentenced to 21months in federal prison. He pleaded guilty in March 2015 to one count of attempted transfer of obscene material to a minor.
On May 15, 2015, Mario Simental, 28, was sentenced to 120 months in federal prison. He pleaded guilty in March 2015 to one count of attempted enticement of a child.
The two remaining defendants, Kyle Andrew Adair, 22, and Charles Alexander Diaz, 20, have each pleaded guilty to one count of attempted transfer of obscene material to a minor and are awaiting sentencing. Each faces a statutory maximum penalty of 10 years in federal prison and a $250,000 fine.
All defendants with the exception of Tidwell, who is from Pampa, Texas, are Amarillo, Texas, residents.
The cases were brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the Texas Department of Public Safety, Amarillo Police Department, Randall County Sheriff’s Office, Potter County Sheriff’s Office, Randall County District Attorney’s Office, Potter County District Attorney’s Office, West Texas A&M Police Department, Canyon Police Department, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the U.S. Marshals Service.
Assistant U.S. Attorneys Joshua Frausto and Timothy Hammer are prosecuting.
Covan World Wide Moving, Inc., Coleman American Moving Services, Inc. and other related entities Settle False Claims Act Cases for $5,000,000.00Read the Press Release
Contact Person: Bill Nettles (803) 929-3000
COLUMBIA, South Carolina ---- United States Attorney Bill Nettles announced today that the United States Attorney's Office for the District of South Carolina, settled claims of fraud with Covan World Wide Moving, Inc., Coleman American Moving Services, Inc., and other related entities with home offices in Dothan, Alabama. The United States contended that Covan and others increased the weights of shipments and storage of servicemember’s and federal employee’s household goods and then submitted claims for payment to the government for the inflated weights.
The investigation began with the filing of whistleblower lawsuits called qui tams lawsuits under the False Claims Act. The suits were filed by employees of Covan’s Augusta, Georgia facility who witnessed the falsification of weight tickets ultimately used to bill the government. The False Claim Act allows the government to recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim. This settlement includes repayment of actual damages and penalties.
The False Claims Act allows individuals to file lawsuits with allegations that fraud has been committed against the federal government on behalf of the government. Whistleblowers, referred to as Relators in the False Claims Act, are entitled to share in any recovery received by the government. In this case, the two relators collectively will receive 25% of the funds of the settlement or $1,250,000.00 plus they are entitled to attorney fees.
Mr. Nettles said “fraud on the government is high priority in this office. Monies paid to Covan for inflated weights could have been used for the benefit of our servicemembers. Our aggressive pursuit of this case is further proof of our commitment to combat fraudulent claims made against the Federal Government.”
This case was handled by Assistant United States Attorneys Fran Trapp, Jennifer Aldrich and Stan Ragsdale. The case was investigated by the Defense Criminal Investigative Service, the U. S. Army Criminal Investigative Command, and the Office of the Inspector General for General Services Administration.
Frank Robey, the director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit said "We are very pleased with today's announcement and the result of all the hard investigative work and agency cooperation regarding this investigation. We would also like to thank the honest citizens who came forward and did the right thing which allowed us to fully investigate these allegations and reach today's settlement."
John F. Khin, Special Agent in Charge of the DCIS Southeast Field Office stated "The transportation of household goods is essential to the military's logistics program, enabling our warfighters and their families to get to station and ready to assume their duties, wherever on the globe they may be assigned. The Defense Criminal Investigative Service (DCIS) remains vigilant to ensure DOD programs are free from fraud and those who wish to take advantage of the U.S. Military."
General Robert C. Erickson, General Services Administration Acting Inspector General said "I appreciate all of the hard work on this case. We will continue working with law enforcement partners to investigate allegations of fraud against the United States."
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Chicago Woman Sentenced to Two Years in Prison for Money Laundering, False Statements to Law Enforcement and Federal Grand JuryRead the Press Release
Springfield, Ill. – A Chicago woman has been ordered to serve two years in federal prison for her role in a state grant fraud scheme and for repeatedly making false statements to federal agents and the grand jury investigating the scheme. Jeri L. Wright, 49, of Hazel Crest, Ill., appeared today before U.S. District Judge Sue E. Myerscough in Springfield. Wright was also ordered to serve three years on supervised release following her release from prison, the first six months of which are to be served as home confinement with electronic monitoring. Wright was ordered to pay restitution in the amount of $31,821 to the Illinois Department of Commerce and Economic Opportunity.
Following today’s hearing, Wright was remanded to the custody of the U.S. Marshals Service. Wright has remained in law enforcement custody since Feb. 23, 2015, when Judge Myerscough revoked Wright’s personal recognizance bond upon finding probable cause that Wright had participated in an unrelated payroll fraud scheme involving an Indiana employment agency while on bond.
On Mar. 7, 2014, a jury convicted Wright on all counts charged in the indictment: money laundering (two counts); making false statements to federal law enforcement officers (two counts); and giving false testimony before a grand jury (seven counts), related to an investigation of fraudulent use of Illinois Department of Commerce and Economic Opportunity grant funds. At trial, the government presented evidence that Wright participated in a fraud scheme led by her friend, former Country Club Hills, Ill., police chief Regina Evans, that misused a $1.25 million grant awarded in 2009 to We Are Our Brother’s Keeper, a not-for-profit program owned and operated by Regina Evans and her husband, Ronald Evans. Wright was also convicted for making false statements to law enforcement during interviews in 2012 and to a federal grand jury in November 2012.
Regina Evans pled guilty to the fraud scheme and was sentenced on May 1, 2014, to 60 months in prison; Ronald Evans pled guilty and was sentenced on July 25, 2014, to 12 months in prison followed by six months home confinement. The couple was ordered to pay restitution in the amount of $917,194. The grant agreement was purportedly to provide bricklaying and electrical pre-apprenticeship training and GED preparation, at the Regal Theater, another entity owned by the Evanses. In fact, little, if any, of the training provided in the grant agreement was ever completed.
The investigation was conducted by federal law enforcement officers and agencies that support the Central District of Illinois U.S. Attorney’s Office’s Public Corruption Task Force: U.S. Postal Inspection Service, Chicago Division; Internal Revenue Service, Criminal Investigation Division, Chicago Field Office; the Illinois Secretary of State Office of Inspector General; and, Illinois State Police, Division of Internal Investigations. Assistant U.S. Attorney Timothy A. Bass prosecuted the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois.
Chicago Man Charged with Possessing with Intent to Distribute Heroin Found During Body Cavity SearchRead the Press Release
Willie Gerald Humphrey, age 27, from Chicago, Illinois, has been charged with one count of possession with intent to distribute heroin. The charge is contained in a Complaint filed on July 7, 2015, in United States District Court in Cedar Rapids.
The Complaint alleges that, on or about February 26, 2015, Humphrey was being watched by officers with the Cedar Rapids Police Department in relation to a heroin investigation. After observing what the officers believed was a heroin transaction between Humphrey and an assumed customer, the officers stopped this person and eventually found .2 grams of suspected heroin hidden in the person’s shoe. The officers then stopped Humphrey’s vehicle. The officers could smell the odor of burnt marijuana emanating from Humphrey’s vehicle, and detained him and his passenger. Officers found $1,049 in cash during an initial search of Humphrey’s person, but found no drugs on him, the passenger, or in the car. The officers then obtained a search warrant and found seven individually wrapped amounts of suspected heroin hidden inside Humphrey’s body.
If convicted, Humphrey faces a possible maximum sentence of 20 years’ imprisonment, a $1,000,000 fine, $100 in special assessments, and up to a lifetime of supervised release following any imprisonment.
Humphrey appeared on July 8, 2015, in federal court in Cedar Rapids and was held without bond. Humphrey’s next appearance for an arraignment has not yet been set.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the Cedar Rapids Police Department Narcotics Unit and the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Cedar Rapids Police Department; the Linn County Sheriff's Office; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement, and is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-mj-218-JSS.
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Charlotte Man Sentenced in Luxury Automobile Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – Michael A. Marshall, 38, of Charlotte, was sentenced today to serve 96 months in prison and to pay $425,442 as restitution for committing bank fraud and related charges, in connection with an automobile loan scheme involving luxury vehicles, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney ordered Marshall to serve the 96-month sentence consecutive to the sentence Marshall previously received for a probation violation from his prior federal felony.
Acting U.S. Attorney Rose is joined in making today’s announcement by Ryan L. Spradlin, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas.
According to filed court documents and court proceedings, from August 2012 to February 2013, Marshall and his co-defendant, Frederick D. Neal, engaged in a fraudulent loan scheme involving luxury vehicles the men purchased in Neal’s name. Court records show that Marshall generally provided the down-payment money for the purchase of the vehicles, and arranged to finance the rest via automobile loans in Neal’s name. Court records indicate that the conspirators obtained the loans by making false statements on the loan applications to the automobile lenders, including falsely claiming that Neal earned over $8,000 per month.
According to court records, the two men fraudulently obtained at least seven luxury vehicles, including a 2009 Maserati Grand Turismo, a 2006 Bentley, a 2011 Porsche Panamera and a 2009 Mercedes Benz SL550, among others. Marshall and Neil “leased” some of the vehicles to others through “Luxotic Rentals, Inc.” (Luxotic), a company controlled by Marshall. Eventually, the vehicles were fraudulently sold to third parties, after “wiping” their titles shortly after obtaining them, according to court records. To get the clean titles, Marshall created fake letters from the automobile lenders purporting to be lien releases for the vehicles, falsely stating that the liens were paid off. Marshall then filed the false lien releases with the North Carolina Division of Motor Vehicles to request and obtain new titles. According to court records, using the new, clean titles, Marshall sold the vehicles to third parties, as if the luxury vehicles were owned free and clear of any liens. According to court records, the scheme caused the lenders a loss of approximately $425,442.
In May 2014, a federal jury found Marshall guilty of conspiracy to commit offenses against the United States, including making false statements to financial institutions, bank fraud and money laundering conspiracy. Neal was sentenced in February 2015 to 18 months in prison, three years of supervised release and was ordered to pay $425,442 as restitution, after pleading guilty to conspiracy to commit offenses against the United States.
The investigation was handled by HSI with the assistance of the North Carolina Division of Motor Vehicles. Assistant U.S. Attorney Kevin Zolot prosecuted the case.
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In a related case, on Wednesday, July 8, 2015, Judge Whitney sentenced Seth Kamose Ali, 42, of Charlotte, to 18 months in prison for assaulting an officer. Court records indicate that while investigating Marshall’s case, law enforcement determined that Ali had notarized at least four of the fraudulent lien release documents used by Marshall to obtain the clean car titles. According to court records, when a federal agent attempted to serve Ali with a trial subpoena in connection with Marshall’s case, Ali slammed his car door on the agent’s hand and attempted to flee by driving his vehicle at high speed toward the agent. A federal jury convicted Ali of assaulting an officer, including acts involving physical contact and inflicting bodily injury.
This investigation was handled by HSI. Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte handled the prosecution.
Central Valley Drug Trafficking Group IndictedRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 22-count indictment Thursday against 13 defendants from Sacramento, Delano (Kern Co.) and Phoenix, Arizona, charging them with illegally trafficking large amounts of methamphetamine, heroin, cocaine, and marijuana, United States Attorney Benjamin B. Wagner announced.
The defendants named in the indictment are:
Jose Manuel Valdez Torres, 39, fugitive, of Delano/Phoenix; Roberto Gomez Jr., 25, of Antelope; Leonel Valdez Ayon, aka Leonel Valdez Gonzalez, 27, of Delano; Leobardo Martinez-Carranza, 22, of Delano; Edgar Eduardo Herrera, 21, fugitive, of Delano; Enrique Alonso Valdez Yanez, 38, fugitive, of Mexico; Jason Duane Rogers, 43, of Citrus Heights; Shannon Anthony Armstrong, 40, of El Dorado Hills; Bradley Gene Ward, 36, of Carmichael; David Andrews Uhrig, 44, of Orangevale; William James Welch, 53, of Citrus Heights; Michael William McGibbon, 39, of Citrus Heights, and
Jesus Hunberto Zurita Sicairos, 26, of Phoenix, Arizona.According to court documents, an investigation indicated that Valdez Torres was arranging to smuggle multi-kilogram quantities of methamphetamine, heroin, and cocaine from Mexico into the United States. Once here, the drugs were stored at stash houses in Delano, Sacramento, and Phoenix. The drugs were then sold in ounce and pound quantities to various distributors. On June 24-26, 2015, in a coordinated law enforcement operation, search warrants for 11 residences were executed (three in Delano, eight in the Sacramento area, and one in Phoenix) and 10 individuals were arrested. Over 50 pounds of methamphetamine, a kilogram of heroin, smaller amounts of cocaine and marijuana, and over $275,000 in cash were seized. Numerous firearms were also seized. Gomez, Ward and Welch are each charged with illegal possession of firearms.
This case is the product of an investigation by the U.S. Drug Enforcement Administration Kern County Sheriff’s Office, the Central Valley HIDTA, the Sacramento Sheriff’s Office, the Folsom Police Department, the Citrus Heights Police Department the Arizona HIDTA Initiative, the Maricopa County Drug Suppression Task Force, the Maricopa County Sheriff's Office, the police departments of Tempe, Phoenix, Surprise, and Buckeye, the US Border Patrol, the Phoenix DO Enforcement Group, and the Maricopa County Sheriff's Office Tactical Operations Unit. Assistant United States Attorney Christopher Highsmith is prosecuting the case.
All defendants are named in the first count of the indictment which charges conspiracy to distribute, and to possess with the intent to distribute, methamphetamine, heroin, and cocaine. If convicted on this count, they each face a statutory maximum penalty of life in prison and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was investigated and prosecuted under Organized Crime Drug Enforcement Task Force (OCDETF) Program. The OCDETF Program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Bucks County Man Charged with Running Ponzi SchemeRead the Press Release
PHILADELPHIA - Bogdan K. Stepien, 34, of Richboro, PA, was charged today by indictment with running a Ponzi scheme in which he claimed to be a successful “day trader” and recruited friends and family members to “invest” with him. Stepien is charged with 19 counts of wire fraud, three counts of aggravated identity theft, and four counts of passing counterfeit and forged checks, announced United States Attorney Zane David Memeger.
According to the indictment, between 2011 and 2014, Stepien received funds from each of eight individuals and instead of engaging in high frequency trading with those funds, he used them to pay for his own personal expenses. It is further alleged that to lull his victims into believing that he was successfully investing their funds, Stepien sent them bogus trading account statements and spreadsheets that purported to show their growing investment returns. He allegedly used some of the investor funds to pay what he characterized as distributions or profits to some of his investors when, in fact, the funds were not profits but were merely some of the investors’ principal. In connection with the scheme, Stepien allegedly used the name, address, and forged signature of one of his victims in performing several wire transfers of the victim’s funds to an account in Stepien’s name and for Stepien’s benefit.
The indictment further alleges that on four separate occasions, between August 2014 and April 2015, Stepien passed counterfeit and forged checks in order to purchase luxury automobiles and real estate. Stepien allegedly used two checks, each for over $100,000, to purchase new, custom-ordered Mercedes-Benz automobiles. He allegedly used another check, for more than $70,000, to purchase a new GMC Yukon Denali automobile. He is also charged with purchasing real estate with a bogus $400,000 check. Most of these checks were altered so that they appeared to be official checks, and none of the checks were legitimate.
If convicted, the defendant faces a mandatory minimum prison term of two years for aggravated identity theft with a maximum possible sentence of 20 years for each count of wire fraud, ten years for each count of passing counterfeit and forged checks, three years of supervised release, a fine of up to $6.5 million, a $2,600 special assessment, and full restitution.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Nancy E. Potts.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bristol Man Pleads Guilty to Domestic Violence ChargesRead the Press Release
TALLAHASSEE, FLORIDA – Robert W. McCandless, 38, of Bristol, Florida, pled guilty today to interstate domestic violence and interstate violation of a protection order. The plea was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
During his plea, McCandless admitted to violating a protection order by unlawfully entering the victim’s residence on January 16, 2015. McCandless and the victim had lived together for approximately five years and had two children. After attempting to strangle the victim with a communications cord, McCandless forced her and their children to leave Liberty County with him in the victim’s vehicle. Approximately eight hours later, law enforcement agents pulled over the victim’s vehicle in South Carolina and arrested McCandless. The victim received medical treatment for injuries consistent with strangulation. Law enforcement agents obtained a search warrant for the victim’s residence and found evidence of an assault. The communications cord was also analyzed and found to have the victim’s blood and DNA on it.
Sentencing is scheduled for October 1, 2015, at 9:00 a.m. at the United States Courthouse in Tallahassee, Florida. McCandless faces a maximum of ten years’ imprisonment on each separate count of conviction.
The case was investigated by the Federal Bureau of Investigation, the Florida Department of Law Enforcement, the Liberty County Sheriff’s Office, and the Clarendon County Sheriff’s Office in South Carolina, whose joint investigation led to the charges in this case. It was prosecuted by Assistant United States Attorney Stephen M. Kunz.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Bradenton Man Arrested for Distributing Methamphetamine Disguised as CandyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the filing of a criminal complaint charging Jesus Casteyano, a/k/a Jesus Castellano, a/k/a Jesus Castellano-Andrade (53, Bradenton), with conspiracy to possess with the intent to distribute and distribution of 500 grams or more of methamphetamine. If convicted, he faces a mandatory minimum penalty of 10 years, up to life, in federal prison. Casteyano made his initial appearance in federal court yesterday and was detained pending trial.
According to the complaint, Casteyano and others agreed to distribute and distributed 500 grams or more of a mixture containing a detectable amount of methamphetamine that was contained in and packaged as retail candy. (Criminal Complaint Exhibit A)
A criminal complaint is merely an allegation that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Manatee County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Matthew Perry.
Attorney General Lynch Announces Federal Marriage Benefits Available to Same-Sex Couples NationwideRead the Press Release
Attorney General Lynch announced today that federal marriage benefits will be available to same-sex couples nationwide following the Supreme Court ruling in Obergefell v. Hodges:
“Following the Supreme Court’s historic decision in Obergefell that every couple has the same right to participate in the institution of marriage, whether the partners are of the same-sex or opposite sexes, I directed Justice Department staff to work with the agencies to ensure that the ruling be given full effect across the federal government. Thanks to their leadership and the quick work of the Social Security Administration and the Department of Veterans Affairs, today I am proud to announce that the critical programs for veterans and elderly and disabled Americans, which previously could not give effect to the marriages of couples living in states that did not recognize those marriages, will now provide federal recognition for all marriages nationwide. The agencies are currently working towards providing guidance to implement this change in law. Just over a year ago, Attorney General Holder announced that agencies across the federal government had implemented the Supreme Court’s Windsor decision by treating married same-sex couples the same as married opposite-sex couples to the greatest extent possible under the law as it then stood. With the Supreme Court’s new ruling that the Constitution requires marriage equality, we have now taken the further step of ensuring that all federal benefits will be available equally to married couples in all 50 states, the District of Columbia and the US Territories. The department will continue to work across the administration to fulfill our commitment to equal treatment for all Americans, including equal access to the benefits of marriage that the Obergefell decision guarantees.”
Aryan Brotherhood of Texas Captain Charged with Illegally Possessing Multiple FirearmsRead the Press Release
Memphis, TN – A high-ranking member of a white supremacist gang was indicted this week for possessing multiple firearms while a felon.
On April 4, 2015, Memphis Police officers responded to a domestic violence complaint. Upon arriving at the scene, officers encountered a woman who came running out of an apartment in emotional distress. She informed officers that her boyfriend, 52-year-old Joseph Shields, was armed with a large firearm and had threatened to kill her. She alleged Shields refused to let her leave their apartment, placed a rifle to her forehead, and threatened to pull the trigger.
Vickers informed officers that Shields was still inside the house and armed with a firearm. Officers subsequently drew their weapons and began giving verbal commands into the apartment for Shields to exit and surrender. Shields refused to comply with the officers’ demands, motivating them to dispatch additional law enforcement personnel to the scene. Officers held the door and continued to give loud verbal commands for the suspect to come out before entering the house and searching for Shields. They discovered a loaded 12-gauge shotgun, two rifles, and numerous rounds of ammunition. But Shields was no longer inside the residence.
Customers at a nearby ice cream stand, Jerry’s Sno Cones, advised officers that they witnessed Shields running from the apartment complex. The witnesses pointed the officers in the direction Shields fled. Officers began travelling in the specified direction and located Shields shortly after. They were able to detain him after a brief struggle.
Shields admitted to law enforcement that he is a captain within the Aryan Brotherhood of Texas (ABT). An unaffiliated spin-off of the white supremacist prison gang, Aryan Brotherhood, ABT is a violent, Texas-based crime syndicate responsible for multiple murders, robberies, aggravated assaults, as well as drug trafficking.
In addition to confiscating ammunition, a loaded shotgun and two rifles — one of which had been stolen out of Tipton County — officers located a large black gun safe with an unspecified number of additional firearms in Shields’ apartment.
Shields’ case is being investigated by the Memphis Police Department. Special Assistant U.S. Attorney Dean DeCandia is representing the government in this case.
Shields faces up to 10 years in federal prison and up to $250,000 in fines if convicted.
The charges and allegations contained in indictments are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Arizona Woman Pleads Guilty to Federal Narcotics Trafficking Charges in New MexicoRead the Press Release
ALBUQUERQUE – Serina Josephina Rivera, 27, of Sells, Ariz., entered a guilty plea yesterday in federal court in Albuquerque, N.M., to methamphetamine and heroin trafficking charges under a plea agreement with the U.S. Attorney’s Office.
Rivera and co-defendant Anna Maria Rodriguez, 32, of Phoenix, Ariz., were arrested on April 25, 2014, and charged in a criminal complaint with possession of methamphetamine and heroin with intent to distribute in Bernalillo County, N.M. According to the complaint, New Mexico State Police recovered bundles containing 5.9 pounds of methamphetamine and 2.8 pounds of heroin which were concealed in the vehicle that Rivera and Rodriguez were driving during a routine traffic stop.
Rivera and Rodriguez were subsequently charged in a three-count indictment that was filed on May 21, 2014. The indictment charged the two women with (1) conspiracy to distribute heroin and methamphetamine, (2) possession of heroin with intent to distribute, and (3) possession of methamphetamine with intent to distribute on April 25, 2014, in Bernalillo County.
During yesterday’s proceedings, Rivera pled guilty to the two counts of the indictment charging her with possession of heroin and methamphetamine with intent to distribute. Rivera admitted that she and Rodriguez were stopped by law enforcement in New Mexico on April 25, 2014, while driving a vehicle containing five packages of methamphetamine and two packages of heroin from Phoenix, Ariz., to Dallas, Texas.
Rodriguez pled guilty to the same charges on June 5, 2015. At sentencing Rivera and Rodriguez each face a maximum penalty of 20 years in prison followed by not less than three years of supervised release. Sentencing hearings have yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorney Joel Meyers is prosecuting the case.
This case was prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Amarillo Man Pleads Guilty to Attempted Child Sex Trafficking OffenseRead the Press Release
AMARILLO, Texas — An Amarillo man appeared in federal court today before U.S. District Judge Mary Lou Robinson and pleaded guilty to an indictment charging one count of attempted sex trafficking of a child, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Deswan Newsome, 19, faces a statutory penalty of not less than 10 years and up to life in federal prison and a $250,000 fine. A sentencing date was not set.
According to plea documents filed in the case, Newsome admitted that from approximately March 30, 2015 to April 3, 2015, he attempted to recruit a 15-year-old girl to engage in commercial sex acts.
The investigation began when a Task Force Officer (TFO) with U.S .Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) learned that a particular individual was using Facebook to recruit and entice teenage females for prostitution. In March 2015, the TFO set up an undercover Facebook account representing himself as a 15-year-old female, “A.M.,” and the two exchanged messages about A.M. working as a prostitute, with the individual claiming, “You can make 2500 in a week if you really put the work into it.” The individual sent A.M. his phone number and the two discussed a meeting, however the conversation ended without any arrangements being made.
On April 1, 2015, the TFO (A.M.) received a private message on his undercover Facebook account from “Deswan Newsome,” later identified as defendant Newsome. Newsome and A.M. exchanged messages about A.M. engaging in prostitution, and A.M. advised Newsome that she was 15-years-old.
On April 2, 2015, an Amarillo Police Department officer, posing as A.M., made a phone call to Newsome, who answered, but then turned the call over to a female who provided more details about prostitution to A.M. A.M. advised this female that she was 15-years-old.
On April 3, 2015, A.M. and Newsome exchanged messages and arranged to meet at a convenience store in Amarillo so A.M. could engage in prostitution. When Newsome arrived at the location, he was identified and taken into custody. Newsome admitted talking to A.M. on Facebook and said that he was going to have someone else teach her how to perform sex acts, and that he’d get 60 percent of the money she made for performing the commercial sex acts.
The Amarillo Police Department and HSI investigated. Assistant U.S. Attorneys Timothy Hammer and Joshua Frausto are prosecuting.
Albuquerque Man Sentenced to Prison for Federal Heroin Trafficking ChargeRead the Press Release
ALBUQUERQUE – David Godfrey, Jr., 28, of Albuquerque, N.M., was sentenced today in federal court to 60 months in prison for his heroin trafficking conviction. Godfrey will be on supervised release for four years following his term of incarceration.
Godfrey was arrested on Sept. 8, 2014, on a two-count indictment charging him with distribution of more than 100 grams of heroin and using and carrying a firearm in relation to a drug trafficking crime. According to the indictment, Godfrey committed the crime on Feb. 13, 2013, in Bernalillo County, N.M.
On April 6, 2015, Godfrey pled guilty to Count 1 of the indictment charging him with distribution of heroin. In entering the guilty plea, Godfrey admitted that on Feb. 13, 2013, he handed a bag containing more than 100 grams of heroin to another person in northeast Albuquerque. Godfrey also admitted that at the time he had a .45 caliber pistol in his waistband for protection.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorney Paul Mysliwiec prosecuted the case.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaboration between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
A Carjacking Spree Leads to Consecutive Federal Sentences for Two Miami ResidentsRead the Press Release
Two men were sentenced to decades in prison, following their participation in a carjacking spree in Miami-Dade and Broward Counties.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), J.D. Patterson Jr., Director, Miami-Dade Police Department (MDPD), Sergio Velazquez, Chief, City of Hialeah Police Department, and Tomas Sanchez, Interim Chief, City of Hollywood Police Department, made the announcement.
Ty West, 19, and Demetrius Bain, 19, both of Miami-Dade County, were sentenced by United States District Court Senior Judge James Lawrence King to consecutive terms of imprisonment totaling 32 years and 35 years respectively, for possession of a firearm by a convicted felon, carjacking and brandishing firearms during a crime of violence, in violation of Title 18, United States Code, Sections 922(g)(1), 2119(1) and 924(c)(1)(A)(ii). Upon completion of their prison sentences, the defendants will be placed on supervised release. West will be on supervised release for a period of five years and Bain for ten years.
According to court documents and information provided in court, on June 19, 2014, West was in the City of Hialeah when he brandished a firearm and threatened to kill the vehicle occupants before he took possession of the car. Days later, on June 26, 2014, West was seen running through private property with a firearm, in Miami-Dade County. Police arrested West and recovered the firearm. However, police were not yet aware of West’s involvement in the earlier carjacking and he was released from state custody.
On July 14, 2014, in the City of Hialeah, Bain and West brandished firearms, ordered a couple from their vehicle, and then stole the victims’ car. A few hours later, West and Bain would later use the stolen vehicle to facilitate the carjacking of a young mother in Broward County. The defendants drove to a residential neighborhood in Hollywood, Florida. As the victim attempted to retrieve her child from the vehicle, Bain approached, brandishing a firearm and demanded that the mother give him her purse. Bain removed the keys from the purse and entered the victim’s vehicle. Just moments before the defendant drove away in the stolen car, the victim was able to recover her child from the vehicle. Police later observed West driving the stolen vehicle in Miami-Dade County. An investigation by law enforcement, including fingerprint examinations and eyewitness statements, linked both West and Bain to the offenses for which they previously pleaded guilty.
Mr. Ferrer commended the investigative efforts of the ATF, MDPD, City of Hialeah Police Department, and City of Hollywood Police Department. This case was prosecuted by Assistant U.S. Attorney Breezye Telfair.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
8 July 2015
Uniontown Man Admits Distributing Child Porn VideoRead the Press Release
PITTSBURGH - A Fayette County resident pleaded guilty in federal court to a charge of distribution of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
Ronald Rhodes, 58, of Uniontown, Pa., pleaded guilty to one count before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, on or about April 3, 2014, Rhodes distributed a video containing material depicting the sexual exploitation of minors.
Chief Judge Conti scheduled sentencing for Oct. 14, 2015, at 3:30 p.m. The law provides for a maximum total sentence of 30 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
Homeland Security Investigations and the United States Postal Inspection Service conducted the investigation that led to the prosecution of Rhodes.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Two Sentenced to Federal Prison on Child Pornography ChargesRead the Press Release
In Waco today, 34-year-old Justin Keith Vega of Temple, TX, was sentenced to the statutory maximum of 30 years in federal prison for production of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Walter S. Smith, Jr., ordered that Vega pay a $5,000 fine and be placed on supervised release for the remainder of his life after completing his prison term.
On April 30, 2015, Vega pleaded guilty to one count of production of child pornography. By pleading guilty, Vega admitted that in December 2014, he enticed and coerced a six-year old female to engage in sexually explicit conduct for the purposes of producing visual depictions of the activity. This investigation was conducted by the FBI together with the Temple Police Department.
Also today, in an unrelated matter, Judge Smith sentenced 26–year-old Otis Cortez Williams of Killeen, TX, to ten years in federal prison followed by five years of supervised release for possession of child pornography. Williams pleaded guilty to the charge on May 14, 2015. According to court records, investigators with the Texas Attorney General’s Office discovered that Williams was trafficking in child pornography and in April 2014, they executed a search warrant at the defendant’s residence. A subsequent forensics examination of seized materials, including the defendant’s computer and related media, revealed the presence of approximately 9,500 images and 400 videos depicting child pornography.
“The United States Attorney’s Office will continue to work with local, state, and federal agencies to prosecute predators who victimize children by creating, possessing, and distributing child pornography. Children are some of our most vulnerable victims. Today’s sentences ensure that these defendants will not pose a threat to children for some time to come,” announced Acting United States Attorney Richard L. Durbin, Jr.
Assistant United States Attorneys Mark Frazier and Greg Gloff prosecuted these cases on behalf of the Government.
Two Northern California Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
Two Northern California real estate investors pleaded guilty for their role in bid-rigging conspiracies and mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced today.
Real estate investors John Shiells, of Danville, California, and Miguel De Sanz, of San Francisco, each pleaded guilty to three counts of bid rigging and three counts of mail fraud in the U.S. District Court of the Northern District of California in Oakland, California, today. Both were charged in an indictment returned by a federal grand jury in the Northern District of California on Nov. 19, 2014.
“These defendants took turns paying others or being paid by others to not bid at foreclosure auctions, all so that the conspirators could buy properties at reduced prices,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The defendants and their co-conspirators corrupted these auctions and deprived lenders and homeowners of auction proceeds that were rightfully theirs.”
To date, 56 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. In addition, multi-count indictments are pending against 19 real estate investors that have been charged for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo and San Francisco counties.
According to court documents, Shiells and De Sanz agreed not to compete to purchase selected properties at public real estate foreclosure auctions, designated which conspirator would win the selected properties and refrained from bidding on the selected properties at the public auctions. This collusion began in Alameda County as early as June 2007; in Contra Costa County as July 2008; and in San Francisco County as early as November 2008. The deals continued until approximately January 2011.
Both Shiells and De Sanz were also charged with using the mail to carry out the schemes to fraudulently acquire the titles to selected properties sold at public auctions in Alameda, Contra Costa and San Francisco counties, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries.
“The FBI continues to work closely with the Antitrust Division to target those individuals who engage in fraudulent bid rigging and other anticompetitive activities at foreclosure auctions,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division. “We are committed to bringing to justice those who engage in illegal and unfair practices that adversely impact legitimate home buyers and sellers.”
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for violations of the Sherman Act may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties in California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Division. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Two Men Found Guilty of Wilson PNC Bank RobberyRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced that Monday in federal court, a jury found ROBERT EARL MAYS and PARIS CORDAVA WILLIAMS, from the District of Columbia, guilty of bank robbery and aiding and abetting. WILLIAMS also was found guilty of possession of a firearm by a felon. The Honorable James C. Fox was the presiding United States District Court Judge.
According to the investigation, MAYS and WILLIAMS were traveling with a third man, RICKY FRANKS, in a car rented by FRANKS from the District of Columbia. On November 13, 2014, close to closing time, WILLIAMS and FRANKS entered the PNC Bank located at 3401 Raleigh Road Parkway in Wilson, North Carolina and robbed it. FRANKS vaulted the teller counter and took approximately $1,579.00 in United States currency from a teller’s drawer. When FRANKS grabbed the money, he also grabbed the GPS tracking device. FRANKS and WILLIAMS hid with the money and tracking device in the trunk of the rental car. MAYS drove the car a short distance away. The Wilson Police Department was alerted of the robbery and also notified that the moving tracking device became stationary on Raleigh Road. After a systematic search of cars in a stopped line of traffic near the bank, by Wilson Police Department officers, officers located FRANKS and WILLIAMS in the car’s trunk with the bag of money, GPS tracker and a firearm.
FRANKS pled guilty to bank robbery and possession of firearm by a felon before trial.
Investigation of this case was conducted by the Federal Bureau of Investigation, and the Wilson Police Department. The Bureau of Alcohol, Tobacco, Firearms, and Explosives also assisted. Assistant United States Attorneys S. Katherine Burnette and Carrie D. Randa represented the government.
Three Real Estate Developers Sentenced to Prison for their Roles in $27.8 Million Mortgage Fraud SchemeRead the Press Release
Three Miami real estate developers were sentenced to prison terms today for their roles in a mortgage fraud scheme that caused losses of $27.8 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Nadine Gurley of the Department of Housing and Urban Development’s Office of Inspector General (HUD-OIG) and Special Agent in Charge Timothy A. Mowery of the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG) made the announcement.
Stavroula Mendez, 68, was sentenced to 135 months in prison; Lazaro Mendez, 42, was sentenced to 108 months in prison; and Marie Mendez, 49, was sentenced to 57 months in prison. U.S. District Judge Patricia A. Seitz of the Southern District of Florida also ordered each of the defendants to forfeit $35,252,331 in fraudulent proceeds and to pay $21,240,064 in restitution. In November 2014, all three defendants were convicted of wire fraud, bank fraud and conspiracy. Eleven other co-conspirators were previously convicted of fraud in connection with the scheme.
Stavroula Mendez, Lazaro Mendez and Marie Mendez owned, controlled or managed various condominium developments in the Miami area. According to evidence presented at trial, the defendants engaged in a scheme in which they facilitated payments to straw buyers as well as the submission of false loan applications on behalf of the straw buyers to secure mortgages to purchase units in the developments. Once the units were sold, the defendants retained both the profits from the sales and control over the units.
The trial evidence showed that Lazaro Mendez recruited family members and others to be straw buyers of units that he controlled at one development and that he facilitated the submission of false loan applications. In addition, Lazaro Mendez enlisted mortgage brokers and another individual to recruit straw buyers and to assist them in obtaining fraudulent loans. Lazaro Mendez received kickbacks for each referred buyer.
The evidence at trial demonstrated that, after units were sold at a development that Stavroula Mendez and her husband controlled, Stavroula Mendez funneled a portion of the loan proceeds to shell companies to pay the straw buyers’ closing cash obligations and mortgage payments. The evidence presented at trial further established that, in 2008 and 2009, Stavroula Mendez used other shell companies to divert more than $2 million of the fraudulent proceeds to bank accounts in Switzerland and Liechtenstein.
According to the evidence presented at trial, Marie Mendez used rental payments received by the conspirators to make mortgage payments, and directed cash to another individual to make mortgage payments on behalf of straw buyers. The evidence also showed that Marie Mendez submitted fraudulent loan applications for three condominium units that were purchased in her name.
Eventually, the defendants and their co-conspirators were unable to make mortgage payments, which caused dozens of condominium units to go into foreclosure. The scheme caused the Federal Housing Administration, Freddie Mac, Fannie Mae and private lenders to sustain combined losses of $27.8 million.
The case was investigated by the HUD-OIG and the FHFA-OIG. The case was prosecuted by Trial Attorneys Gary A. Winters, Brian R. Young and Kyle Maurer of the Criminal Division’s Fraud Section.
Three Real Estate Developers Sentenced to Prison for Their Roles in $27.8 Million Mortgage Fraud SchemeRead the Press Release
Three Miami real estate developers were sentenced to prison terms today for their roles in a mortgage fraud scheme that caused losses of $27.8 million.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Nadine Gurley of the Department of Housing and Urban Development’s Office of Inspector General (HUD-OIG) and Special Agent in Charge Timothy A. Mowery of the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG) made the announcement.
Stavroula Mendez, 68, was sentenced to 135 months in prison; Lazaro Mendez, 42, was sentenced to 108 months in prison; and Marie Mendez, 49, was sentenced to 57 months in prison. U.S. District Judge Patricia A. Seitz of the Southern District of Florida also ordered each of the defendants to forfeit $35,252,331 in fraudulent proceeds and to pay $21,240,064 in restitution. In November 2014, all three defendants were convicted of wire fraud, bank fraud and conspiracy. Eleven other co-conspirators were previously convicted of fraud in connection with the scheme.
Stavroula Mendez, Lazaro Mendez and Marie Mendez owned, controlled or managed various condominium developments in the Miami area. According to evidence presented at trial, the defendants engaged in a scheme in which they facilitated payments to straw buyers as well as the submission of false loan applications on behalf of the straw buyers to secure mortgages to purchase units in the developments. Once the units were sold, the defendants retained both the profits from the sales and control over the units.
The trial evidence showed that Lazaro Mendez recruited family members and others to be straw buyers of units that he controlled at one development and that he facilitated the submission of false loan applications. In addition, Lazaro Mendez enlisted mortgage brokers and another individual to recruit straw buyers and to assist them in obtaining fraudulent loans. Lazaro Mendez received kickbacks for each referred buyer.
The evidence at trial demonstrated that, after units were sold at a development that Stavroula Mendez and her husband controlled, Stavroula Mendez funneled a portion of the loan proceeds to shell companies to pay the straw buyers’ closing cash obligations and mortgage payments. The evidence presented at trial further established that, in 2008 and 2009, Stavroula Mendez used other shell companies to divert more than $2 million of the fraudulent proceeds to bank accounts in Switzerland and Liechtenstein.
According to the evidence presented at trial, Marie Mendez used rental payments received by the conspirators to make mortgage payments, and directed cash to another individual to make mortgage payments on behalf of straw buyers. The evidence also showed that Marie Mendez submitted fraudulent loan applications for three condominium units that were purchased in her name.
Eventually, the defendants and their co-conspirators were unable to make mortgage payments, which caused dozens of condominium units to go into foreclosure. The scheme caused the Federal Housing Administration, Freddie Mac, Fannie Mae and private lenders to sustain combined losses of $27.8 million.
The case was investigated by the HUD-OIG and the FHFA-OIG. The case was prosecuted by Trial Attorneys Gary A. Winters, Brian R. Young and Kyle Maurer of the Criminal Division’s Fraud Section.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.