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Wednesday 20 May 2015
Columbia Women Sentenced in Oxycodone ConspiracyRead the Press Release
Contact Person: Winston David Holliday, Jr. (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Shawnetta Belton, age 32, and Althea Mack, age 35, both of Columbia, South Carolina, were sentenced yesterday for Conspiracy to Possess with Intent to Distribute Oxycodone, a violation of Title 21, U. S. C., § 846. Chief United States District Judge Terry L. Wooten sentenced Belton to ten years imprisonment and Mack to two years imprisonment. Both were immediately taken into custody.
Evidence presented during their change of plea hearings established that Belton worked for a doctor and had access to his prescription pad. She wrote prescriptions for oxycodone and distributed them to others to be filled. Some of these unlawful prescriptions were filled in Columbia, others were filled in Beaufort. Althea Mack was the go-between for the Beaufort prescriptions, receiving them from Belton and distributing them to co-conspirators in Beaufort. Over ninety prescriptions were passed during the course of the conspiracy.
Previously, Desmond Washington, age 39, of Charlotte, North Carolina, was sentenced to 41 months imprisonment for his involvement in the conspiracy, and Latrincy Carter, age 30, of Columbia, was sentenced to 37 months imprisonment.
United States Attorney Bill Nettles stated, “Those who traffic in prescription drugs prey on the addictions of some of our most vulnerable citizens. Our office has dedicated itself to pursuing these drug dealers to punish their conduct and to provide a disincentive to those who would profit from selling pills illegally.”
Fifth Circuit Solicitor Dan Johnson stated, “It’s always a good day when the US Attorney and I can work together to make the community better and to create the positive outcomes that the public expects.” Adds Johnson, “I look forward to working with the United States Attorney and all law enforcement agencies in Richland and Kershaw Counties to further rid our communities of drugs and drug offenders.”
The case was investigated by investigators with the Drug Enforcement Administration, the Richland County Sheriff’s Office, and the S.C. DHEC Bureau of Drug Control. Assistant United States Attorney Winston Holliday of the Columbia office and Assistant Solicitor Joseph Shenkar of Richland County prosecuted the case.
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Civilian Living on Fort Carson Sentenced to 45 Years in Federal Prison for Heinous Domestic Violence AssaultsRead the Press Release
Defendant choked victim until she blacked out, then poured boiling hot water on her groin to bring her back to consciousness
DENVER – Mitchell Lee Gibson, age 30, who resided on-base on Fort Carson near Colorado Springs, Colorado, was sentenced today by U.S. District Court Judge Robert E. Blackburn to serve 540 months (45 years) in federal prison for assault resulting in serious bodily injury, assault with a dangerous weapon and assault of a spouse by strangling and suffocation, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Following his prison sentence, Judge Blackburn ordered Gibson to serve 3 years on supervised release. Gibson, who attended the sentencing hearing in custody, was remanded at the hearing’s conclusion.
Gibson was first arrested based on a Criminal Complaint filed on March 26, 2014. He pled guilty before Judge Blackburn on February 5, 2015, and was sentenced today, May 20, 2015.
According to the stipulated facts contained in the plea agreement, on March 25, 2014 at about 9:45 p.m., Fort Carson Police officers responded to a 911 call from a victim who explained that Gibson had assaulted her. Responding officers immediately saw significant injuries and called for medical assistance. She told officers that Gibson was under the influence of alcohol and prescription medication, and that he threatened to hurt her and a child.
While at the hospital, doctors determined that the female victim had two black eyes, scratches and extensive bruising on her face, arms, chest, shoulders, torso, hips and legs. She had red marks on her arms and throat, and injuries from whipping on her back, torso and legs. She had a bite mark on the back of her neck and blood from a laceration on her ear. She had second degree burns covering her stomach, groin, right arm and right leg. She also had two open blisters from the burns. All of this while she was 9 weeks pregnant.
The investigation determined that Gibson had whipped the victim with a coaxial cable, which he regularly made her retrieve for him prior to the beatings. He would choke her with the cable until she blacked out, and then pour boiling hot water on her stomach, groin and leg to revive her. He had threatened to kill her, a child and then himself.
“Defendant Gibson assaulted his victim in a series of senseless, sadistic attacks that earned him every minute of the stern sentence imposed,” said U.S. Attorney John Walsh. “We hope that his victim – and the larger community -- can now rest easy, knowing that her tormentor will spend decades isolated from society.”
“The level of Mitchell Gibson’s violence and his cruelty toward family members during these assaults are shocking,” said Special Agent in Charge Thomas P. Ravenelle. “We view today’s sentence as a just punishment and deterrent that will help to protect others from his abhorrent conduct.”
This case was investigated by the Fort Carson Police Department and the FBI.
Gibson was prosecuted by Assistant U.S. Attorney Gregory Holloway.
Christian County Sheriff Pleads Guilty to Stealing Public Money, Money LaunderingRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the elected sheriff of Christian County, Mo., pleaded guilty in federal court today to embezzling county funds and to his role in laundering the proceeds of a political supporter’s investment fraud scheme.
“This elected sheriff stole taxpayers’ money and treated the county coffers as his own personal piggy bank,” Dickinson said. “Sheriff Kyle took money that was supposed to be for firearms and other supplies needed by his deputies. But his greed wasn’t limited to public dollars or to the taxpayers whose trust he betrayed. He also abused his position to promote a political supporter’s investment fraud scheme, and even used the criminal profits from the scheme to help bankroll his reelection.
“The shameful actions of this defendant shouldn’t cast a shadow on the integrity and dedication of the vast majority of honest law enforcement officers,” Dickinson said. “No one is above the law. This disgraced law enforcement officer will be held accountable for his actions.”
Joseph “Joey” Edward Kyle, 53, of Ozark, Mo., waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information that charges him with one count of embezzling from Christian County and one count of participating in a money-laundering conspiracy.
Under the terms of today’s plea agreement, Kyle must immediately resign his office as sheriff of Christian County. Kyle was elected to the sheriff’s office in 2008 and reelected in 2012.
Christian County Embezzlement
By pleading guilty today, Kyle admitted that he embezzled $50,290 from Christian County. Kyle submitted 22 fraudulent invoices and purchase orders to the county for goods and services that were never provided between Jan. 1, 2011, and Oct. 14, 2014.
Kyle submitted those requisitions on behalf of EDI Plus, LLC, in Nixa, Mo. EDI was awarded a contract by the county to provide equipment – including firearms and ammunition – for the sheriff’s department from 2011 to 2014. Kyle received cash from EDI for his personal use then submitted fraudulent requisitions for goods and services purportedly supplied by EDI. In reality, no goods or services were provided; instead, these requisitions repaid EDI for the money Kyle personally received.
Money Laundering Conspiracy
Kyle also admitted today that he received $21,350 from another person, identified as “Subject #2” in court documents, for his role in promoting an investment fraud scheme.
According to the plea agreement, Subject #2 owned and operated various companies and, from January 2008 to October 2014, engaged in an investment fraud scheme. Subject #2 solicited Kyle to assist him as a promoter of the scheme, to take advantage of the authority and prestige of Kyle’s position as county sheriff. Kyle referred potential investors, distributed promotional materials, served as a personal reference and recommended that victims invest money in Subject #2’s companies.
In order to persuade potential investors, Subject #2 falsely informed them that Kyle had personally invested funds and that Kyle had assembled an investment group, comprised of deputy sheriffs and others, to invest in Subject #2’s companies. In reality, Kyle did not invest his personal funds in Subject #2’s companies. Instead, Subject #2 gave Kyle 50,000 shares in one of his companies, which Subject #2 normally sold to investors at the rate of one dollar per share.
Kyle founded Five Rivers Management, LLC, purportedly as a law enforcement training company in 2011. He deposited the money he received from Subject #2 into the company’s bank account in order to conceal the source and nature of the payments, and to make them appear to be receipts from Kyle’s law enforcement training company. Subject #2 also made a $3,000 contribution, using victim investor funds, to Kyle’s political campaign on July 1, 2012.
Between June 2012 and January 2014, Subject #2 received investment funds totaling approximately $952,670. At the time he promoted the investment fraud scheme, Kyle states that he believed Subject #2’s companies were legitimately engaged in efforts to bring their products to market. However, Kyle admitted the United States could prove he knew checks written to Five Rivers were the proceeds of some form of unlawful activity. Further, Kyle acknowledged that, at the very least, he deliberately closed his eyes to the fraud, which should have been obvious to him.
Sentencing
Under the terms of today’s plea agreement, Kyle will be sentenced to one year and one day in federal prison without parole. Kyle must pay $50,290 in restitution to Christian County and must forfeit to the government a money judgment of $71,640, representing the proceeds he received from his criminal conduct. Kyle must disclose and surrender any and all property that was purchased with county funds, including firearms, ammunition, vehicles, equipment, preserved food (meals-ready-to-eat) and other supplies. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys James J. Kelleher and Steven M. Mohlhenrich. It was investigated by the FBI, IRS-Criminal Investigation and the Missouri State Highway Patrol.
Chillicothe Man Sentenced for Possessing Pornographic Pictures of Young ChildrenRead the Press Release
COLUMBUS, Ohio – Daniel J. Akehurst, 46, of Chillicothe, Ohio, was sentenced in U.S. District Court to 84 months’ imprisonment for possessing child pornography.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and members of the Franklin County Internet Crimes Against Children (ICAC) Task Force, announced the sentence handed down today by U.S. District Senior Judge George C. Smith.
According to court documents, in September 2013, investigators connected 59 images of child pornography to Akehurst’s IP address. The files depicted nude or partially nude pre-pubescent females, approximately one to seven years old, being sexually abused.
When a search warrant was executed at the defendant’s residence, ICAC Task Force officers discovered more than 16,000 images and videos of child pornography on a computer and thumb drive.
Akehurst pleaded guilty on December 22, 2014, to knowingly possessing visual depictions of child pornography.
The Franklin County ICAC Task Force is a multi-agency effort dedicated to the fight against computer facilitated crimes against children. The following agencies are members:
Franklin County Sheriff’s OfficeUpper Arlington Police Department Grove City Police DepartmentColumbus Police Department Grandview Heights Police DepartmentWhitehall Police Department Hilliard Police DepartmentWesterville Police Department Homeland Security InvestigationsU.S. Secret Service Ohio ICACFranklin County Prosecutor's Office
This case is being brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney's Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims.
U.S. Attorney Stewart commended the cooperative investigation by the Franklin County ICAC Task Force, as well as Assistant United States Attorneys Jessica H. Kim and Heather A. Hill, who are representing the United States in this case.
Certified Public Accountant Charged with Using Her Tax Preparation Business to Fraudulently File Income Tax Returns and Unlawfully Receive Unauthorized RefundsRead the Press Release
A Certified Public Account (CPA) was arrested and charged with using her tax preparation business to facilitate an income tax refund fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Pamella B. Watson, 60, of Davie, was charged by criminal complaint with various violations of Title 18 of the United States Code (U.S.C.), including: submitting false, factitious, or fraudulent claims (18 U.S.C. §287) punishable by up to ten years in prison; aggravated identity theft (18 U.S.C. §1028A) punishable by a mandatory consecutive term of two years in prison; mail fraud (18 U.S.C. §1341) punishable by up to twenty years in prison; wire fraud (18 U.S.C. §1343) punishable by up to twenty years in prison; money laundering concealment (18 U.S.C. §1956) punishable by up to twenty years in prison; and money laundering (18 U.S.C. §1957) punishable by up to ten years in prison.
According to the complaint, Watson operated Watson & Associates Business Services, Inc., a tax preparation business in Miami. Watson allegedly used various methods to fraudulently file federal income tax returns and receive unauthorized tax refunds on behalf of her clients. She allegedly prepared the tax returns and provided the respective client with a copy of the filing which showed a refund amount and/or an amount payable to the IRS. The complaint alleges that without the client’s knowledge or authorization, the figures on the prepared return were changed and a tax return showing a higher refund amount was in fact filed with the IRS. It is further alleged that the client’s bank account received the refund amount reflected on the copy of the filing shown by Watson and the remainder of the inflated tax refund was deposited into an account controlled by the defendant. The complaint alleges that the client did not have any knowledge of the refund falsification and splitting.
The complaint further alleges that Watson prepared approximately 557 federal income tax returns for her clients, for tax years 2010 through 2013. Allegedly, 395 (71%) of the filings received refunds which were split into an account controlled by Watson or the entirety of the refund was diverted into the defendant’s bank account. It is further alleged that 5 of the 557 tax return filings showed an amount due to the IRS and 11 of the tax return filings did not claim a refund. Allegedly, the remaining 541 (97%) tax returns claimed a refund.
The complaint further alleges that an IRS analysis of Watson’s bank accounts, for the period from approximately January 2011 through September 2014, showed more than $3,405,479.20 in tax refund deposits related to 183 client taxpayers. Allegedly, the analysis further showed that 10 checks (totaling $222,676) that had been written by the defendant’s clients to the IRS were in fact posted as credits to Watson’s personal tax account history.
Watson was ordered held in custody following her initial appearance on the complaint. A pre-trial detention hearing before United States Magistrate Judge Lurana S. Snow is scheduled for May 22, 2015 in Fort Lauderdale.
Mr. Ferrer commended the investigative efforts of the IRS-CI. The case is being prosecuted by Senior Litigation Counsel Neil Karadbil.
A complaint contains mere allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Centralia Man Pleads Guilty to Methamphetamine ChargesRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Destry Wood, 50, of Centralia, Illinois, pled guilty on May 19, 2015, to Conspiracy to Manufacture and Distribute Methamphetamine and Possession of Pseudoephedrine with the Intent to Manufacture Methamphetamine as charged against him in an indictment returned by a Federal Grand Jury in November 2014. The offenses took place in Marion, Clinton and St. Clair Counties.
The Conspiracy carries a penalty of not less than 5 years, and not more than 40 years in federal prison, up to a $5 million fine, and at least 4 years of supervised release. The charge of Possession of Pseudoephedrine with the Intent to Manufacture Methamphetamine carries a penalty of up to 20 years in prison, up to a $250,000 fine, and up to 3 years of supervised release. Each charge carries a special assessment of $100. Sentencing is scheduled for September 2, 2015.
Information leading to the charges against Wood was obtained in an investigation conducted by the FBI, the Marion County Sheriff’s Office, and the Clinton County Sheriff’s Department, assisted by the Illinois State Police Methamphetamine Response Team, the Centralia Police Department, Jefferson County Sheriff’s Department and the Mt. Vernon Police Department. The case is being handled by Assistant United States Attorney Kit Morrissey.
California Woman Pleads Guilty to Federal Heroin Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Hunter Dwayne Fitzgerald, Jr., 22, of Los Angeles, Calif., pleaded guilty today in federal court in Albuquerque, N.M., to a heroin trafficking charge.
Fitzgerald was arrested on April 11, 2014, at the Amtrak Train Station in Albuquerque after DEA agents found almost a pound and a half of heroin concealed in her baggage during an interdiction investigation. Fitzgerald was subsequently indicted on May 7, 2014, and charged with possession of heroin with intent to distribute on April 11, 2014, in Bernalillo County, N.M.
During today’s proceedings, Fitzgerald pled guilty to the indictment without the benefit of a plea agreement.
At sentencing, Fitzgerald faces a statutory maximum penalty of 20 years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Rumaldo R. Armijo is prosecuting 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 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.
Charles R. Seals of Fort Wayne SentencedRead the Press Release
FORT WAYNE – The United States Attorney for the Northern District of Indiana, David Capp, announces that today, Charles R. Seals, 25, of Fort Wayne, Indiana, was sentenced to a total of 228 months (19 years) of imprisonment along with a term of 2 years of supervised release following his plea of guilty to the felony offenses of armed bank robbery, brandishing a firearm during and in relation to a federal crime of violence, and assaulting and impeding a postal employee.
On December 5, 2013, Mr. Seals and his two codefendants committed the armed robbery of Wells Fargo Bank in Hoagland, Indiana. Prior to entering the bank, Mr. Seals confronted a postal employee at gunpoint and forced them into the bank. Mr. Seals and codefendant Calvin Miller then proceeded to conduct the armed robbery, with Mr. Seals threatening employees with a gun. After taking money from the bank, the two escaped in a getaway vehicle being driven by the third codefendant, Brandon Sizemore. Officers with the Fort Wayne Police Department, Allen County Police Department, and Indiana State Police were successful in apprehending all three suspects after a high speed pursuit.
This investigation was conducted by the FBI’s Northeast Indiana Federal Bank Robbery Task Force (NEIFBRTF) and the United States Postal Inspection Service. The NEIFBRTF is comprised of FBI agents, and personnel from the Indiana State Police, Allen County Police Department, Fort Wayne Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Anthony W. Geller.
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Buffalo Man Pleads Guilty to Tax Fraud SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that James Chatmon, 36, of Buffalo, NY, pleaded guilty today to conspiracy to defraud the Internal Revenue Service by making false claims for income tax refunds before U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Trini E. Ross, who is handling the case, stated that Chatmon gathered biographical information from more than a dozen individuals which he then used to generate false W-2 forms. The individuals then used the forms to file false Federal and New York State income tax returns. Claims for refunds and credits were made on 17 tax returns, even though the persons filing the returns were not entitled to any refunds.
Proceeds totaling $105,088 were divided between Chatmon and the tax-return filers during the scheme, which took place between January 2010 and April 2013. The defendant will be required to pay restitution of $102,149 to the IRS, and $2,939 to the New York State Department of Finance. The total attempted loss figure exceeds $120,000, as some of the false returns did not result in refunds.
The plea is the culmination of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-In-Charge Shantelle P. Kitchen.
Sentencing is scheduled for September 3, 2015 before Judge Arcara.
Bellingham Man Sentenced in Drug and Money Laundering ConspiracyRead the Press Release
Fairbanks, Alaska - U.S. Attorney Karen L. Loeffler announced Friday, May 15, 2015 that Peter M. Thornton was sentenced to 104 months’ imprisonment, followed by five years of supervised release, following his pleas of guilty to conspiracy to distribute heroin and conspiracy to commit money laundering. In addition to his prison sentence, Thornton was ordered to forfeit $24,300 representing property involved in the drug trafficking and money laundering conspiracies.
According to court documents, as early as 2008, Thornton was distributing heroin in Fairbanks to make money and support his own habit. By 2011, Thornton, operating from his residence in Bellingham, WA, conducted the conspiracy to transport and distribute heroin by means of couriers from Washington State to Fairbanks for distribution. Couriers would either fly the drugs carried on their person to Alaska, or Thornton would send drugs through the mails. Thornton purchased airline tickets for some of the conspirators to transport heroin to Alaska. Once in Alaska, the heroin would be redistributed by the co-conspirators.
Thornton instructed couriers and/or redistributors in Alaska to deposit the proceeds of the heroin sales into bank accounts controlled by him at various bank branches in Alaska. From September 2010 through December 2013, approximately $300,000 in cash was deposited into accounts controlled by Thornton.
The drugs were sometimes held at Thornton’s residence at Bellingham. A search conducted by law enforcement of Thornton’s Bellingham home found heroin and cash. As part of Thornton’s sentence the court ordered Thornton to forfeit the cash and a payment in substitution for his Bellingham home.
The case was prosecuted by Assistant U.S. Attorney Stephen Cooper of the U. S. Attorney’s Office for the District of Alaska. The case was investigated by the Organized Crime Drug Enforcement Task Force which includes the Internal Revenue Service Criminal Investigation (IRS-CI), the Drug Enforcement Administration (DEA), and the North Pole Police Department. Additional assistance was provided by the U.S. Attorney’s Office for the Western District Washington.
Ashland man faces additional bank robbery chargesRead the Press Release
A grand jury returned a four-count superseding indictment charging Jordon Louis Dongarra, 33, of Ashland, Ohio, with two counts of bank robbery and two counts of brandishing a firearm during and in relation to a crime of violence, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The superseding indictment filed today alleges that Dongarra robbed the First Merit Bank, located at 1277 Ashland Road, in Mansfield, Ohio, on December 18, 2014; and the Fifth Third Bank, located at 28880 Lorain Road, in North Olmsted, Ohio, on December 30, 2014. Both banks are federally insured financial institutions. An indictment alleging Dongarra robbed the North Olmsted Fifth Third Bank was originally returned on February 25, 2015.
If convicted, the defendant’s sentence will be determined by the court after consideration of the federal sentencing guidelines which depend upon a number of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorneys Justin Seabury Gould and Miranda E. Dugi, and was investigated by the Federal Bureau of Investigation, the Richland County Sheriff’s Office, and the North Olmsted Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Anchorage Man Sentenced to 10 Years in Prison for Drug TraffickingRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that an Anchorage man was sentenced in federal court in Anchorage for 1 count of trafficking narcotics. Max Jewett, 38, of Anchorage had previously pled guilty on December 22, 2014 to 1 count of conspiring to distribute over 50 grams of methamphetamine.
Jewett was sentenced today by United States District Court Judge Sharon L. Gleason, to 120 months in prison.
According to Assistant U.S. Attorney Bryan Schroder, Jewett admitted to distributing illegal drugs in Alaska from October 2011 until his arrest in September 2013. In addition to distributing drugs, Jewett admitted to using his co-conspirators to steal merchandise, especially from home improvement stores, then having them return the items to the store in exchange for gift cards. The co-conspirators would then give the gift cards to Jewett in exchange for drugs. Overall, Jewett admitted distributing over 500 grams of methamphetamine, as well as heroin.
Ms. Loeffler commends the Drug Enforcement Administration and the Anchorage Police Department for the investigation of this case.
AK Steel to Pay $1.3 Million Civil Penalty as Part of Settlement with United States and Michigan for Air Violations at Dearborn Steel PlantRead the Press Release
Under a settlement agreement with the United States and the state of Michigan, AK Steel Corporation will pay a civil penalty of $1.35 million for past violations of the Clean Air Act at its Dearborn, Michigan facility, implement a variety of procedures to reduce future violations and install dynamic air filtration systems at the Salina Elementary and Salina Intermediate Schools across Ferney Street from the plant, announced the Department of Justice, the Environmental Protection Agency (EPA) and the Michigan Department of Environmental Quality (MDEQ).
The settlement will resolve 42 violation notices issued by MDEQ and two notices of violation issued by EPA alleging violations resulting from a wide variety of air emission sources issued against Severstal, the previous owner of the Dearborn facility. AK Steel purchased the facility in September 2014 and has taken responsibility for past violations and improving its compliance with environmental regulations.
“This settlement will result in better management and monitoring practices at the AK Steel facility and measures that will help prevent and reduce dust and hazardous air pollution in neighboring communities,” said Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division. “In agreeing to this judicially enforceable settlement, AK Steel is committed to prevent the violations of its predecessor from recurring, inform the public about its future environmental compliance and provide cleaner air for local school children.”
“People living in Dearborn and southwest Detroit have long been concerned about air pollution from this steel mill,” said Regional Administrator Susan Hedman for EPA. “The consent decree will result in improved air quality in these communities and help prevent future violations of the Clean Air Act.”
The consent decree will require AK Steel to develop an environmental management system for the facility with third-party auditing every six months, annually inspect and continuously monitor the performance of the pollution control equipment at the facility’s basic oxygen furnace and implement a fugitive dust control policy to prevent large particulate emissions into the adjacent neighborhoods. Upon full implementation of the consent decree requirements, particulate matter emissions, including metal hazardous air pollutants, from AK Steel should be reduced by approximately 100 tons per year.
“Manufacturing facilities that are located near neighborhoods and schools have a responsibility to protect the clean air that residents breathe,” said U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan. “This settlement will directly improve air quality for our community in Dearborn and Southwest Detroit.”
“This is welcome news for residents who live near the steel mill,” said Director Dan Wyant of MDEQ. “We are pleased to finally have the past environmental violations addressed and resolved and we look forward to a strong working relationship with new plant owners AK Steel.”
“We have an obligation to protect our air, lands and waterways across the state of Michigan,” said Attorney General Bill Schuette for the state of Michigan. “This is a step forward for cleaner air for the residents of Dearborn.”
The settlement was lodged with the U.S. District Court for the Eastern District of Michigan and is subject to a 30-day public comment period and final court approval. It can be viewed at www.justice.gov/enrd/Consent_Decrees.html
140 Charged in Arkansas as Part of National Prescription Drug InitiativeRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and David Downing, Assistant Special Agent in Charge of the Little Rock District Office of the Drug Enforcement Administration (DEA), were joined today by DEA New Orleans Division Special Agent in Charge Keith Brown in announcing the charging and arrests of multiple individuals in several federal indictments presented as part of a DEA national initiative.
In January 2014, as part of the national effort, the DEA New Orleans Field Division—which includes the DEA Little Rock office—launched an aggressive campaign that targeted the largest sources of illegally diverted pharmaceuticals in Arkansas, Louisiana, Mississippi, and Alabama. This effort, dubbed Operation Pilluted, involved the extensive investigation of rogue medical practitioners, pharmacists, and other DEA Registrants, as well as the aggressive pursuit of more traditional criminal organizations involved in the distribution of pharmaceuticals. Under the auspices of Operation Pilluted, concerted efforts were initiated to heighten community awareness concerning the perils of prescription drug diversion and the strategic implementation/strengthening of pharmaceutical drug laws. Nearly 1,000 law enforcement officers across four states took part in the operation.
In 2014, investigations by DEA and state and local law enforcement agencies resulted in several indictments for the illicit distribution of pharmaceutical narcotics. The most recent Eastern District of Arkansas indictments focus on the illicit distribution of pharmaceuticals in the central Arkansas area, including Pulaski, Faulkner, Perry, Lonoke and Saline Counties. The organization at the center of each investigation is alleged to have been responsible for the diversion and distribution of hundreds of thousands of Schedule II, III, and IV narcotic drugs, including hydrocodone, oxycodone, and alprazolam (Xanax) during the time period of July 2014 through April 2015.
In total, throughout Operation Pilluted Arkansas state and federal authorities have charged 140 individuals with prescription drug crimes, including 94 federal defendants in five separate indictments, and 46 state defendants. Included in that total are 4 doctors, 4 nurses, and 5 pharmacists.
“The abuse of prescription pills is perhaps the greatest drug problem Arkansas currently faces,” Thyer said. “Today’s arrests, and arrests over the course of this operation, include doctors, nurses, and pharmacists, as well as street-level dealers. It is extremely disheartening when trusted professionals such as your local pharmacist or family doctor are engaged in the illegal sale and distribution of controlled substances. My office is committed to stopping the abuse of prescription pills at every level, from the prescribing doctor to individuals trying to sell these drugs on the street. Today’s announcement should signal to those in the medical community and elsewhere that we will aggressively seek to prosecute anyone who violates our prescription drug laws.”
Seven arrests were made today at the KJ Medical Clinic, including Dr. Jerry Reifeiss, prescribing physician, Kristen Holland, pharmacist at Bowman Curve Pharmacy, and Aaron Borengasser, physician’s assistant, formerly with Artex Medical Clinic. In July 2014, DEA received information from local Walgreens and Wal-Mart pharmacies that they were seeing numerous controlled substance prescriptions being written from a clinic in west Little Rock called Artex Medical Clinic. The prescriptions were suspicious, in that they contained typographical errors and were written by the same physician’s assistant for identical pharmaceuticals, namely hydrocodone and alprazolam. Evidence obtained in the investigation revealed that Artex, which later changed its name to KJ Medical Clinic, was operating as a “pill mill,” where individuals obtained prescriptions for narcotic drugs without having legitimate medical need. Beginning in November 2014, individuals were directed by clinic staff to fill the prescriptions at a local pharmacy, Bowman Curve Pharmacy, rather than with a large chain store, such as Walgreens or Wal-Mart. As part of the operation, the homeless and other individuals were recruited to obtain prescriptions at the clinic, after which they would fill the prescriptions, hand over the pills to the recruiter, and receive a small fee.
During the investigation undercover officers and confidential informants working for law enforcement posed as clinic patients, paying $200 and obtaining prescriptions for narcotic drugs without receiving an examination from a physician, or after receiving an inadequate examination. The indictment includes 16 counts against 18 individuals who participated in the clinic’s illicit distribution of pharmaceutical narcotics, including the clinic owners, doctors, nurses, recruiters, and staff, as well as the pharmacists at Bowman Curve Pharmacy. Several individuals known to frequent the clinic have been charged with selling hydrocodone to undercover officers. The operation of KJ Medical Clinic was found to be related to several “pill mills” in the Dallas, Texas area, operators of which are under federal indictment in Texas.
This case was investigated by the DEA—Little Rock Tactical Diversion Squad composed of officers from the Conway Police Department, Beebe Police Department, Little Rock Police Department, Pine Bluff Police Department, Jefferson County Sheriff’s Office, and the Benton Police. Also involved in the investigation were the United States Marshals Service, Little Rock Police Department, and the Saline County Sheriff’s Office.
The case against KJ Medical Clinic is the latest in a series of cases in Operation Pilluted. On Monday, May 18, 2015, the Lonoke County Sheriff’s Office took Dr. Richard Johns of Little Rock into custody charging him with 187 counts of Fraudulent Practices, a class C felony. This investigation first began November 2014 when detectives responded to an overdose death outside of Cabot. The Sheriff’s Office solicited the assistance of the DEA and began a joint investigation into the doctor and the suspected criminal enterprise headed by Dr. Johns. The investigation determined that 187 fraudulent prescriptions have been filled and distributed within the illicit market in Lonoke County alone. That is approximately 16,830 oxycodone pills with a street value of $505,000 since July 2014. Dr. Johns is currently released on bond and a trial is scheduled for July 20, 2015.
On May 6, 2015, the Grand Jury for the Eastern District of Arkansas returned a superseding federal indictment against Perryville pharmacist Christopher Watson and 27 others. In July 2014, the DEA and the Arkansas State Police (ASP) initiated an investigation into Christopher Watson, a licensed pharmacist, who was engaging in the unauthorized distribution of Schedule II, III and IV pharmaceutical narcotics from his family owned and operated store in Perryville, Arkansas. Watson and his father, Tommy Watson, own and operate the Perry County Food and Drug store, and Christopher Watson was the managing pharmacist at that location. Evidence obtained in the investigation showed that Christopher Watson sold tens of thousands of hydrocodone pills and other pharmaceuticals from the pharmacy shelves after hours and forged prescriptions to account for the missing pills, as well as filled fraudulent prescriptions presented by pharmacy customers.
Christopher Watson was federally arrested and indicted in a two-count indictment in February 2015. The present superseding indictment includes 44 counts against 28 individuals who participated in the conspiracy to illicitly distribute pharmaceutical drugs, or who obtained pharmaceuticals by fraud, several firearms charges and forfeiture allegations, as well as a scheme to commit insurance fraud by Christopher Watson wherein Watson falsely billed Medicare Part D for patients’ claims.
The operation resulted in the issuance of an Immediate Suspension Order to the Perry County Food and Drug store, the first Order of its kind issued in Arkansas. This Order was issued by the Administrator of DEA on the grounds that the pharmacy constitutes an imminent danger to public health and safety, and it immediately suspends the DEA Registration of the Perry County Food and Drug store required to dispense controlled substances. As a result of this Order, the Perry County Food and Drug store is prohibited from possessing and/or dispensing controlled substances pending the results of a federal administrative hearing. Trial is currently scheduled in the case for September 21, 2015.
This case was investigated by the DEA—Little Rock Tactical Diversion Squad composed of officers from the Conway Police Department, Beebe Police Department, Little Rock Police Department, Pine Bluff Police Department, Jefferson County Sheriff’s Office, and the Benton Police Department. Also involved in the investigation were the Federal Bureau of Investigation (FBI), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), United States Secret Service, United States Marshals Service, Arkansas State Police, and the Perry County Sheriff’s Office.
On October 8, 2014, the Grand Jury for the Eastern District of Arkansas returned an indictment against Charolda Walton and 32 others involved in an oxycodone distribution ring in Little Rock. In early 2014, DEA received information about large scale oxycodone distribution from a residence at 1723 S. Grant Street in Little Rock. Investigation of this residence identified Charolda Walton, Felicia Holmes, Tim McCain, and others selling bulk amounts of oxycodone tablets for $23-27 per tablet to numerous individuals. Through undercover work, wiretaps, and other operations, the DEA identified mid-level and street-level distributors of oxycodone who received their supplies from the individuals associated with 1723 S. Grant Street. The investigation resulted in the indictment of 33 distributors, including former NFL and Arkansas Razorback running back Cedric Cobbs, the seizure of approximately $22,000, 6 vehicles, a handgun, and 2,210 oxycodone, 189 hydromorphone, and 259 hydrocodone tablets. Distribution of the controlled substances took place at various public locations in Little Rock, Benton, and Sheridan, including restaurant and retail store parking lots. Trial is currently scheduled in the case for June 29, 2015.
A joint investigation into a Dilaudid (hydromorphone) distribution network in the Little Rock area conducted in the fall of 2013 through August 2014 by the DEA and Little Rock Police Department led to a federal indictment against Stephen Otey and his distribution network. Otey was identified as the source of supply for Dilaudid and other pharmaceutical drugs, distributing approximately 2,500 pills per month. It is estimated that the distribution organization profited approximately $25,000 per month from the sale of these pills. The Grand Jury for the Eastern District of Arkansas returned a second superseding indictment on February 4, 2015, charging Otey and seven others co-defendants. Execution of a search warrant at Otey’s residence resulted in the seizure of cash and two firearms, along with various prescription narcotics. Trial is currently scheduled in the case for December 7, 2015.
The final Arkansas case under the Operation Pilluted umbrella stems from an oxycodone distribution ring in central Arkansas that involved Josh Oliver and six other individuals. The DEA, working with local law enforcement agencies in Pulaski, Faulkner, and Saline County, initially discovered people obtaining valid prescriptions for oxycodone and then illegally selling the pills. Ultimately, members of the conspiracy forged prescriptions using computer templates and fraudulently obtained oxycodone. The Grand Jury for the Eastern District of Arkansas returned an indictment on April 2, 2014, and currently all seven defendants have entered guilty pleas and are awaiting sentencing.
“Although prescription medication in the right hands, at the right time and in the right place is safe, the reality is they are deadly to those who abuse the drug,” DEA Assistant Special Agent in Charge David Downing said. “These enforcement activities are the results of our continued commitment to investigating those responsible for turning a blind eye on the fraudulent prescriptions for profit. DEA works side by side with our state and local law enforcement partners in order to keep our neighborhoods free from drug abuse and the dangers that stem from drug trafficking.”
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
(Recently Announced Indictments)
Tuesday 19 May 2015
‘Dirty Block’ Atlantic City, New Jersey, Gang Member Sentenced to 13 Years in Prison on Drug Conspiracy and Weapons ChargesRead the Press Release
CAMDEN, N.J. – An Atlantic City, New Jersey, man was sentenced today to 156 months in prison for distributing heroin on behalf of a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.
Saeed Zaffa, a/k/a “Seed,” 25, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute one kilogram or more of heroin and one count of possessing a firearm as a previously convicted felon. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in this and other cases and statements made in court:
Zaffa was a member of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village Public Housing Complex, Renaissance Plaza and Schoolhouse Apartments.
From October 2010 through February 2013, Zaffa received heroin from Mykal Derry, 34, of Atlantic City, one of the gang’s leaders, and distributed the drugs to other conspirators throughout Atlantic City. Zaffa, a previously convicted felon, was also found in possession of a .40 caliber handgun when he was stopped by Atlantic County police officers on March 11, 2013.
In addition to the prison term, Judge Irenas sentenced Zaffa to serve 10 years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s sentencing.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; the Millville Police Department; the Mullica Township Police Department; the South Jersey Transportation Authority; and the U.S. Secret Service for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.
Defense Counsel: Edward F. Borden Esq., Cherry Hill, New Jersey
Woman Sentenced for Aggravated Identity Theft Connected to Fraudulent Tax Refund SchemeRead the Press Release
Tampa, FL – U.S. District Judge Steven D. Merryday today sentenced Makaeia Demps to two years in federal prison for aggravated identity theft. The Court also ordered her to make restitution to the IRS in the amount of $13,441. Demps pleaded guilty on March 4, 2015.
According to court documents, in December 2011, Demps was arrested by officers from the Clearwater Police Department. In her possession, they found two debit cards in the names of other individuals. An investigation revealed that the debit cards contained funds that had been obtained as the result of fraudulently filed income tax returns. Further investigation linked Demps to the receipt of refunds generated by the filing of additional fraudulent income tax returns.
This case was investigated by Internal Revenue Service Criminal Investigation, with assistance from the Clearwater Police Department. It was prosecuted by Assistant United States Attorney Jay L. Hoffer.
Webster Man Pleads Guilty to Downloading Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney William J. Hochul Jr. announced today that Preston Field, 23, of Webster, NY, pleaded guilty to possession of child pornography before Chief U.S. District Judge Frank P. Geraci. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that from November 2012 to March 2014, the defendant downloaded and stored more than 600 images child pornography, including images portraying sadistic conduct and violence. Field also made his collection available for others to view and download.
The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy.
Sentencing is scheduled for August 5, 2015, at 9:30, before Judge Geraci.
Vancouver, Washington Man Pleads Guilty to ‘Pump and Dump’ Stock Fraud SchemeRead the Press Release
A Vancouver, Washington resident who was a minor participant in an earlier ‘pump and dump’ stock scheme, pleaded guilty today to running his own stock fraud scheme in the months following the earlier investigation, announced U.S. Attorney Annette L. Hayes. TOVY PUSTOVIT, 20, faces up to 20 years in prison when sentenced by U.S. District Judge Ronald B. Leighton on September 14, 2015. Under the terms of the plea agreement, prosecutors have agreed to recommend a sentence no greater than 63 months in prison.
According to the facts admitted in the plea agreement, PUSTOVIT participated in a 2012 scheme with Alexander Hawatmeh, Mikhail Galas and Christopher Mrowca to manipulate the stock of ISM International, Inc. PUSTOVIT was not originally charged criminally in that stock manipulation scheme, but following the arrest of the other defendants, investigators uncovered additional information about PUSTOVIT’s participation and about his continuing to scheme to manipulate penny stocks.
In August 2014, Judge Leighton entered a preliminary injunction barring PUSTOVIT and the other defendants from engaging in stock fraud in a civil enforcement action brought by the U.S. Securities and Exchange Commission. In November 2014 PUSTOVIT conspired with another individual in a ‘pump and dump’ scheme involving three companies in the over-the-counter market. PUSTOVIT and his co-conspirator sought to manipulate the value of Brightech, Inc. (ticker symbol BRTE), General Environmental Management, Inc. (ticker symbol GEVI), and Green Street Capital Corp. (ticker symbol JAGR). The co-conspirator lined up various apparently unrelated accounts and funded them to purchase the penny stocks. After substantial amounts of stock had been purchased, the two sent out email blasts from various stock promotion websites they controlled: Infinity Stock Picks, Zeus Alerts and Hulk Alerts urging others to buy the stocks. When the price rose further, the two dumped their shares making significant profit.
Specifically, they manipulated GEVI in early 2015, accumulating some 2.7 million shares. On February 5, 2015 they sent out email blasts from the three different companies touting the stock as being “ready to soar” in value. The stock price rose sharply on the promotion, and the men sold their stock reaping $83,096 in net profits. In the days that followed the price of the shares collapsed harming numerous investors who had been defrauded.
PUSTOVIT has agreed to forfeit to the U.S. $266,373 as criminal proceeds from the scheme.
The original coconspirators in the trading of ISM International, Inc., Alexander Hawatmeh and Christopher Mrowca, are being sentenced on June 5, 2015.
The case is being investigated by the FBI. The Securities and Exchange Commission (SEC) is conducting a parallel civil investigation. The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Katheryn Kim Frierson.
United Parcel Service Agrees to Settle Alleged Civil False Claims Act ViolationsRead the Press Release
United Parcel Service Inc. (UPS) has agreed to pay $25 million to resolve allegations that it submitted false claims to the federal government in connection with its delivery of Next Day Air overnight packages, the Justice Department announced today. UPS is a package delivery company based in Atlanta.
“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”
“This conduct affected numerous federal agencies,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia. “We place high importance on the integrity of companies that provide services to the government. Combating all manners of fraud on the government is a high priority in the Eastern District of Virginia.”
UPS provides delivery services to hundreds of federal agencies through contracts with the U.S. General Services Administration (GSA) and U.S. Transportation Command, which provides support to Department of Defense agencies. Under these contracts, UPS guaranteed delivery of packages by certain specified times the following day. The settlement announced today resolves allegations that from 2004 to 2014, UPS engaged in practices that concealed its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for the late delivery of packages. In particular, the government alleged that UPS knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time, applied inapplicable “exception codes” to excuse late delivery (such as “security delay,” “customer not in,” or “business closed”), and provided inaccurate “on-time” performance data under the federal contracts.
“The United States should get what it pays for, nothing less,” said Acting Inspector General Robert C. Erickson of the GSA.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Virginia by Robert K. Fulk, a former employee of UPS, who will receive $3.75 million.
The resolution in this matter was the result of a coordinated effort between the U.S. Attorney’s Office of the Eastern District of Virginia, the GSA Office of Inspector General (OIG), the Federal Deposit Insurance Corporation OIG, the Defense Criminal Investigative Service, and the Treasury Inspector General for Tax Administration and the Department of Treasury OIG, with assistance from the Department of Veterans Affairs OIG.
The lawsuit is captioned United States ex rel. Fulk v. United Parcel Service, Inc., et al., No. 1:11cv890 (E.D. Va.). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Union City, New Jersey, Man Sentenced to 27 Months in Prison for Operating Supposed Charity as Illegal Bank, Falsifying TaxesRead the Press Release
NEWARK, N.J. - A Union City, New Jersey, man was sentenced today to 27 months in prison for operating a supposed charitable organization, or “gemach,” as an unchartered bank, accepting millions of dollars in deposits – including nearly $1 million of his own money – which he shielded from state or federal regulation, U.S. Attorney Paul J. Fishman announced.
Moshe Schwartz, 34, a/k/a “David Schwartz” or “Gedalya David Schwartz,” previously pleaded guilty before U.S. District Judge Jose L. Linares to two counts of an information: operating an unchartered bank and aiding and assisting in the filing of a false 2007 tax return. Judge Linares imposed the sentence today in Newark federal court.
According to the information and statements made in court:
Schwartz operated Gemach Shefa Chaim (GSC), purportedly to provide interest-free loans to needy members of the Sanz community in Union City. During his guilty plea proceeding, Schwartz admitted he operated GSC as a bank, with millions of dollars in deposits and more than 350 client accounts by July 2009.
To operate a bank in the United States, a bank is required to obtain a charter from the United States or the state in which the bank operates. Chartered banks are subject to oversight, regulation, and periodic review by federal and state authorities. Neither Schwartz nor GSC had such a charter.
Schwartz admitted that, in operating GSC as a bank, he accepted deposits and credited clients’ accounts, wrote checks from GSC as directed by clients, made transfers between accounts, disbursed client funds upon request, negotiated GSC checks presented by persons other than the named payees, conducted wire transfers, provided clients with receipts of transactions, charged clients a fee for bounced checks and provided overdraft notices to clients. Schwartz also admitted that he opened and maintained various bank accounts at financial institutions in or around North Jersey in the name of GSC and used those institutions to deposit client funds, negotiate checks, provide clients with GSC checks and conduct wire transfers. Because client funds were deposited into and commingled within GSC’s bank accounts at financial institutions, the funds could only be traced back to GSC, thereby concealing the true ownership, nature and source of the funds. Many clients were thus able to use their GSC accounts to engage in suspicious and, at times, illegal activities, including evading federal taxes and money laundering.
Schwartz also admitted that he provided false and fraudulent information to his tax preparer in Union City concerning his income for tax year 2007, falsely representing that his income was $24,475 when it was approximately $208,845. Schwartz admitted that he used his own GSC account and a false identity to conceal his income and assets from the IRS, causing a $74,889 tax loss.
In addition to the prison term, Judge Linares sentenced Schwartz to serve two years supervised release and ordered him to pay restitution of $74,889 and a $60,000 fine.
GSC bank accounts were seized in July 2009 and approximately $500,000 was ultimately forfeited. The accounts had been used by Moshe Altman, 45, Itzak Friedlander, 47, and Shimon Haber, 39, to launder proceeds that cooperating witness Solomon Dwek, 42, had purported to be the proceeds of illegal activities. Altman pleaded guilty in December 2010, to, among other things, conspiring to launder monetary instruments and was sentenced in March 2011 to 41 months in prison. Friedlander pleaded guilty in April 2010 to conspiracy to launder monetary instruments and was sentenced in April 2011 to 24 months in prison. Haber pleaded guilty to the same charge in January 2010 and was sentenced in May 2010 to five months in prison.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing; as well as the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the Federal Deposit Insurance Corporation-Office of Inspector General, under the direction of Special Agent in Charge Francis L. Mace; and the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, for their assistance.
The government is represented by Assistant U.S. Attorneys Mark J. McCarren of the Special Prosecutions Division and Frances C. Bajada of the Criminal Division in Newark.
UPS Agrees to Pay $25 Million to Settle Civil False Claims Act ViolationsRead the Press Release
ALEXANDRIA, Va. – United Parcel Service Inc. (UPS) has agreed to pay $25 million to resolve allegations that it submitted false claims to the federal government in connection with its delivery of Next Day Air overnight packages, the Justice Department announced today. UPS is a package delivery company based in Atlanta.
UPS provides delivery services to hundreds of federal agencies through contracts with the U.S. General Services Administration (GSA) and U.S. Transportation Command, which provides support to Department of Defense agencies. Under these contracts, UPS guaranteed delivery of packages by certain specified times the following day. The settlement announced today resolves allegations that from 2004 to 2014, UPS engaged in practices that concealed its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for the late delivery of packages. In particular, the government alleged that UPS knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time, applied inapplicable “exception codes” to excuse late delivery (such as “security delay,” “customer not in,” or “business closed”), and provided inaccurate “on-time” performance data under the federal contracts.
“This conduct affected numerous federal agencies,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “We place high importance on the integrity of companies that provide services to the government. Combating all manner of fraud on the government is a high priority here in the Eastern District of Virginia.”
“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”
“The United States should get what it pays for, nothing less,” said Acting Inspector General Robert C. Erickson of the GSA.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Eastern District of Virginia by Robert K. Fulk, a former employee of UPS, who will receive $3.75 million.
This resolution in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia, the GSA Office of Inspector General (OIG), the Federal Deposit Insurance Corporation OIG, the Defense Criminal Investigative Service, the Treasury Inspector General for Tax Administration, the Department of Treasury OIG, and with assistance from the Department of Veterans Affairs OIG.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Benjamin C. Mizer, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division; Robert C. Erickson, Jr., Acting Inspector General, General Services Administration (GSA); and Fred W. Gibson, Acting Inspector General of the Federal Deposit Insurance Corporation (FDIC), Robert E. Craig, Special Agent in Charge, Defense Criminal Investigative Service, made the announcement after the case was unsealed by the U.S. District Court for the Eastern District of Virginia.
The matter was investigated by Assistant U.S. Attorneys Peter S. Hyun and Kevin Mikolashek of the Eastern District of Virginia.
The lawsuit is captioned United States ex rel. Fulk v. United Parcel Service, Inc., et al., No. 1:11cv890 (E.D. Va.). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
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. 1:11cv890.
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U.S. settles with Marathon Petroleum Corp. to cut harmful air emissions at facilities in Ohio, Kentucky and IndianaRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) announced a settlement with Marathon Petroleum Corporation today that resolves various alleged Clean Air Act violations at ten Marathon facilities and requires Marathon to take steps to reduce harmful air pollution emissions at facilities in three states. The Department of Justice and EPA allege that Marathon failed to comply with certain Clean Air Act fuel quality emissions standards and recordkeeping, sampling and testing requirements. These violations may have resulted in excess emissions of air pollutants from motor vehicles, which can pose threats to public health and the environment. Marathon self-reported many of these issues to EPA.
Under a consent decree lodged in U.S. District Court for the Northern District of Ohio, Marathon will spend over $2.8 million on pollution controls to reduce emissions of volatile organic compounds on 14 fuel storage tanks at its distribution terminals in Indiana, Kentucky and Ohio.
Marathon will also pay a $2.9 million civil penalty and retire 5.5 billion sulfur credits, which have a current market value of $200,000. Sulfur credits are generated when a refiner produces gasoline that contains less sulfur than the federal sulfur standard. These credits can be sold to other refiners that may be unable to meet the standard.
“The changes required by this settlement will positively impact air quality in communities across the Midwest,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “All Americans deserve to enjoy the benefits of clean air, land, and water. These benefits spring from our nation’s bedrock environmental laws and we will use them vigorously in the pursuit of environmental justice.”
“Fuel standards established under the Clean Air Act play a major role in controlling harmful air pollution from vehicles and engines,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “If unchecked, these pollutants can seriously impair the air we breathe, especially during summer months when they can reach higher levels. This settlement incorporates innovative pollution control solutions to reduce air pollution in overburdened communities.
“This agreement will help reduce air pollution emissions in Ohio and elsewhere,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio. “We’re pleased this settlement will protect the air we breathe while promoting the use of next-generation technology.”
In their complaint, The Justice Department and EPA allege that Marathon:
- Produced about 356 million gallons of reformulated gasoline at its Texas City, Texas, refinery during 2007 that did not meet Clean Air Act standards for reducing volatile organic compounds. Volatile organic compounds are one of the primary constituents of smog and react in sunlight to form ground-level ozone. Breathing ozone can trigger a variety of health problems including chest pain, coughing, throat irritation and congestion and can worsen bronchitis, emphysema and asthma. Children, the elderly and people who have lung diseases such as asthma are particularly prone to these problems.
- Produced more than 40 million gallons of gasoline at the Texas City, Texas, refinery in 2009 that exceeded standards for sulfur levels. The goal of the Clean Air Act program that regulates sulfur in gasoline is to minimize emissions from vehicles and to ensure emissions control systems function effectively.
- Sold about 12 million gallons of gasoline that contained elevated levels of ethanol. Excess ethanol in gasoline can harm emission control components on some vehicles and engines.
- Sold about 1 million gallons of gasoline at its Tampa, Florida, terminal in 2013 that exceeded standards for volatility, known as the Reid Vapor Pressure, that help control ground level ozone during summer months. Gasoline with higher volatility results in increased emissions of volatile organic compounds, which contribute to the formation of ground level ozone.
- Failed to comply with numerous sampling, testing, recordkeeping and reporting requirements for fuel production. EPA discovered these violations during inspections of Marathon refineries and laboratories in 2008 and 2009. The sampling, testing, recordkeeping and reporting requirements of the fuels program provide the foundation for EPA’s compliance program.
Marathon will also install geodesic domes, fixed roofs, or secondary rim seals and deck fittings on 14 fuel storage tanks at several of its fuel distribution terminals in order to reduce emissions of volatile organic compounds. Marathon is also required to use innovative pollutant detection technology during the implementation of the environmental mitigation projects. Marathon will use an infrared gas-imaging camera to inspect the fuel storage tanks in order to identify potential defects that may cause excessive emissions. If defects are found, Marathon will conduct up-close inspections and perform repairs where necessary.
EPA’s Next Generation Compliance Strategy promotes advanced emissions and pollutant detection technology so that regulated entities, the government and the public can more easily see pollutant discharges, environmental conditions and noncompliance. Many of the facilities where the pollution controls will be installed are located in areas that may present environmental justice concerns.
More information about EPA’s Next Generation Compliance Strategy is available at: http://www2.epa.gov/compliance/next-generation-compliance.
The proposed consent decree is subject to a 30 day public comment period and is available on EPA’s website at http://www.justice.gov/enrd/consent-decrees.
U.S. Settles with Marathon Petroleum Corporation to Cut Harmful Air Emissions at Facilities in Indiana, Kentucky and OhioRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) announced a settlement with Marathon Petroleum Corporation today that resolves various alleged Clean Air Act violations at ten Marathon facilities and requires Marathon to take steps to reduce harmful air pollution emissions at facilities in three states. The Department of Justice and EPA allege that Marathon failed to comply with certain Clean Air Act fuel quality emissions standards and recordkeeping, sampling and testing requirements. These violations may have resulted in excess emissions of air pollutants from motor vehicles, which can pose threats to public health and the environment. Marathon self-reported many of these issues to EPA.
Under a consent decree lodged in U.S. District Court for the Northern District of Ohio, Marathon will spend over $2.8 million on pollution controls to reduce emissions of volatile organic compounds on 14 fuel storage tanks at its distribution terminals in Indiana, Kentucky and Ohio.
Marathon will also pay a $2.9 million civil penalty and retire 5.5 billion sulfur credits, which have a current market value of $200,000. Sulfur credits are generated when a refiner produces gasoline that contains less sulfur than the federal sulfur standard. These credits can be sold to other refiners that may be unable to meet the standard.
“The changes required by this settlement will positively impact air quality in communities across the Midwest,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “All Americans deserve to enjoy the benefits of clean air, land, and water. These benefits spring from our nation’s bedrock environmental laws and we will use them vigorously in the pursuit of environmental justice.”
“Fuel standards established under the Clean Air Act play a major role in controlling harmful air pollution from vehicles and engines,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “If unchecked, these pollutants can seriously impair the air we breathe, especially during summer months when they can reach higher levels. This settlement incorporates innovative pollution control solutions to reduce air pollution in overburdened communities.
“This agreement will help reduce air pollution emissions in Ohio and elsewhere,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio. “We’re pleased this settlement will protect the air we breathe while promoting the use of next-generation technology.”
In their complaint, The Justice Department and EPA allege that Marathon:
-
Produced about 356 million gallons of reformulated gasoline at its Texas City, Texas, refinery during 2007 that did not meet Clean Air Act standards for reducing volatile organic compounds. Volatile organic compounds are one of the primary constituents of smog and react in sunlight to form ground-level ozone. Breathing ozone can trigger a variety of health problems including chest pain, coughing, throat irritation and congestion and can worsen bronchitis, emphysema and asthma. Children, the elderly and people who have lung diseases such as asthma are particularly prone to these problems.
-
Produced more than 40 million gallons of gasoline at the Texas City, Texas, refinery in 2009 that exceeded standards for sulfur levels. The goal of the Clean Air Act program that regulates sulfur in gasoline is to minimize emissions from vehicles and to ensure emissions control systems function effectively.
-
Sold about 12 million gallons of gasoline that contained elevated levels of ethanol.
-
Sold about 1 million gallons of gasoline at its Tampa, Florida, terminal in 2013 that exceeded standards for volatility, known as the Reid Vapor Pressure, that help control ground level ozone during summer months. Gasoline with higher volatility results in increased emissions of volatile organic compounds, which contribute to the formation of ground level ozone.
-
Failed to comply with numerous sampling, testing, recordkeeping and reporting requirements for fuel production. EPA discovered these violations during inspections of Marathon refineries and laboratories in 2008 and 2009. The sampling, testing, recordkeeping and reporting requirements of the fuels program provide the foundation for EPA’s compliance program.
Marathon will also install geodesic domes, fixed roofs, or secondary rim seals and deck fittings on 14 fuel storage tanks at several of its fuel distribution terminals in order to reduce emissions of volatile organic compounds. Marathon is also required to use innovative pollutant detection technology during the implementation of the environmental mitigation projects. Marathon will use an infrared gas-imaging camera to inspect the fuel storage tanks in order to identify potential defects that may cause excessive emissions. If defects are found, Marathon will conduct up-close inspections and perform repairs where necessary.
EPA’s Next Generation Compliance Strategy promotes advanced emissions and pollutant detection technology so that regulated entities, the government and the public can more easily see pollutant discharges, environmental conditions and noncompliance. Many of the facilities where the pollution controls will be installed are located in areas that may present environmental justice concerns.
More information about EPA’s Next Generation Compliance Strategy is available at: http://www2.epa.gov/compliance/next-generation-compliance.
The proposed consent decree is subject to a 30 day public comment period and is available on EPA’s website at http://www.justice.gov/enrd/consent-decrees.
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U.S. Attorney Barry Grissom to Take Part in FBI Youth Forum WednesdayRead the Press Release
KANSAS CITY, KAN. – U.S. Attorney Barry Grissom will take part in a Youth and Law Enforcement Forum Wednesday in Kansas City.
“Every young person in America should have the opportunity to grow, succeed and contribute to their community,” Grissom said. “Building trust between law enforcement and the community is one way to help ensure that all our young people can reach their full potential.”
Grissom’s office is helping to sponsor the event, which was organized by the FBI, with support from the U.S. Attorney’s Office for the Western District of Missouri, the Kansas City, Mo., and Kansas City, Kan., police departments and the FBI Citizens Academy Alumni Association. The forum is open to high school and college age youth from Kansas and Missouri. It will provide an opportunity for teens to talk openly about challenges and obstacles facing law enforcement and the teen community and how they can work together.
The forum will be kicked off by the Kansas City Chiefs General Manager John Dorsey at 5:30 p.m., (check-in begins at 5:00 p.m.) Wednesday, May 20. Following a period of questions and answers with leaders of area law enforcement, attendees will have the opportunity to interact with law enforcement and learn first-hand about law enforcement capabilities, tools and potential career opportunities.
The first portion of the program from 5 p.m. to 7 p.m. is closed to the media to encourage an open exchange of dialogue between the attendees and law enforcement. Media outlets are invited to attend the program at 7 p.m. until the program’s conclusion at 8 p.m. at the Robert Mohart Center located at 3200 Wayne Ave., Kansas City, MO.
For more information on the event, contact FBI Public Affairs Officer Bridget Patton at 816-512-8833.
Two Postal Employees Among Four Charged in Alleged Mail Theft ConspiracyRead the Press Release
PROVIDENCE, R.I. – Four individuals, including two mail sorters employed at the Providence Processing and Distribution Center, have been charged in U.S. District Court in Providence by way of federal criminal complaints for their alleged roles in a conspiracy to steal U.S. Treasury checks from the mail and either sell them on the street or deposit them in bank accounts opened with stolen or fraudulent personal information. The funds were withdrawn from ATM machines or used to make retail purchases with the use of debit cards.
The investigation by the Providence Police Intelligence and Organized Crime Unit and United States Postal Service (USPS) Office of Inspector General (OIG) included the execution of court authorized search warrants resulting in the seizure of approximately $1.6 million dollars worth of allegedly stolen U.S. Treasury checks and the seizure of more than $165,000 in proceeds allegedly gained as a result of the sale of stolen U.S. Treasury checks and other items allegedly stolen from the U.S. mail.
United States Attorney Peter F. Neronha, Providence Police Chief Colonel Hugh T. Clements, Jr. and Rafael Medina, Special Agent in Charge of the United States Postal Service, Office of Inspector General, Northeast Area Field Office today announced the arrest and initial appearance in U.S. District Court in Providence of:
Joan Manuel Mustafa, 36, of Providence, on charges of conspiracy, embezzlement, theft of public money (U.S. Treasury checks) and theft of mail;
Erick Vera Garzon, 35, of Providence, on charges of conspiracy, embezzlement, theft of public money (U.S. Treasury checks) and theft of mail;
Brenda Canuelas, 39, of Providence, on charges of conspiracy, theft of mail, theft of government money in excess of $1,000, forging endorsements on Treasury checks in excess of $1,000, bank fraud and aggravated identity theft; and
Secundino Velazquez Tirado, a/k/a Jesus Rivera, 45, of Providence, on charges of conspiracy, theft of mail, theft of government money in excess of $1,000, forging endorsements on Treasury checks in excess of $1,000, bank fraud and aggravated identity theft.
Major David A. Lapatin, Commanding Officer Investigative Division Providence Police Department said, “I commend the Intelligence and Organized Crime Unit of the Providence Police Department. The investigation led by Sgt. Nicholas Ludovici along with Detectives Andres Perez and Andrew Lawton, who did a fine job developing information and worked that information along with federal agencies, brought down the alleged major organized crime pattern that inconvenienced and hurt so many people of the State of Rhode Island.”
“Mail theft is always a crime, but when it is perpetrated by Postal Service employees and it impacts our veterans and our most vulnerable customers who depend on these checks, it is beyond disgraceful,” stated USPS-OIG Special Agent-in-Charge Rafael Medina. “The Special Agents of the USPS-OIG will continue to work closely with our local law enforcement partners to vigorously investigate those Postal Service employees who compromise their integrity for personal gain.”
According to court documents and information presented to the court, in September 2014, USPS-OIG agents began investigating the circumstances surrounding a significant number of missing Treasury checks addressed to individuals in Rhode Island and nearby Massachusetts. The checks were handled by employees at the U.S. Mail Providence Processing and Distribution Center. The investigation determined that many individual bank accounts were being opened in the name on missing checks, usually in a slightly altered form, by individuals other than the true owner of the check. The stolen checks were deposited in the accounts in amounts ranging from a few thousand dollars to more than $10,000. The accounts were then drawn down by cash withdrawals from ATMs, the purchase of goods and services, or by the purchase of money orders. Most of the bank accounts were opened in Rhode Island. Some were opened in Massachusetts, New York, and in the southeast United States.
According to court documents, independent of the ongoing investigation by USPS-OIG, a Providence Police Intelligence and Organized Crime Unit detective developed information that two postal employees at the Processing and Distribution Center, Joan Manuel Mustafa and Erick Vera Garzon, co-workers on the night shift, were allegedly stealing U.S. Treasury checks from the mail while the mail was being sorted. The detective developed information that Garzon was allegedly selling many of the stolen checks on the street at 20% of face value to local buyers and buyers in New York.
Based on the information developed by the detective, court authorized search warrants were obtained for both Mustafa and Garzon’s residences and were executed on April 16, 2015, with the assistance of agents from USPS-OIG. A search of Garzon’s residence and his vehicle resulted in the seizure of more than 900 U.S. Treasury checks valued at approximately $1.6 million dollars, dozens of gift cards and $33,250 in cash. From Mustafa’s residence detectives and other officers and agents seized $19,650 in cash and assorted Visa gift cards. The next day detectives and agents seized $113,100 from a safe deposit box opened by Garzon.
According to court documents, while detectives from the Providence Police Intelligence and Organized Crime Unit were gathering information on Mustafa and Garzon, USPS-OIG agents were reviewing surveillance photographs and videos from area banks and retail stores in an effort to determine who was responsible for depositing the stolen Treasury checks and withdrawing and spending the pilfered funds. Two individuals were identified as allegedly repeatedly making deposits of stolen Treasury checks, making cash withdrawals and making purchases using funds from the stolen checks. Agents and detectives worked together to identify the individuals as being Brenda Canuelas and Secundino Velazquez Tirado.
Canuelas and Tirado were arrested earlier today on federal criminal complaints and released on unsecured bond following initial appearances before U.S. District Court Magistrate Judge Patricia A. Sullivan.
Joan Manuel Mustafa and Erick Vera Garzon were arrested on April 16, 2015, on federal criminal complaints and released on unsecured bond following initial appearances before U.S. District Court Magistrate Judge Patricia A. Sullivan. Court documents pertaining to their arrest remained sealed per an order of the court until the arrest today of Canuelas and Tirado.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
Federal agents from the Veterans Administration Office of Inspector General and the U.S. Treasury Office of Inspector General assisted agents from the United States Postal Service (USPS) Office of Inspector General (OIG) and detectives from the Providence Police Intelligence and Organized Crime Unit in the investigation of this matter.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Two More Plead Guilty to Defrauding the Federal Food Stamp ProgramRead the Press Release
ALBUQUERQUE – Two defendants in a six-defendant case have entered guilty pleas to defrauding the federal food stamp program. Justin Quintana, 29, of Rio Rancho, N.M., plead guilty yesterday and Wilfredo Lopez, 46, of Albuquerque, N.M., entered his guilty plea earlier today. A third defendant, Joshua Moya, 33, also of Albuquerque, entered a guilty plea and was sentenced earlier this year.
Quintana and Lopez were among six defendants charged with defrauding the Food Stamp Program in a 32-count indictment that was filed in Aug. 2014. The indictment alleged that between Sept. 2009 to May 2010, Joseph Martin Padilla, 33, conspired with Quintana, Lopez, Sergio Escobedo, 36, and Veronica Hernandez, 41, to defraud the United States through the unauthorized use of Food Stamp benefits, which are currently called Supplemental Nutrition Assistance Program (SNAP) benefits. During this time, Padilla worked as a Family Assistance Analyst for the Income Support Division of the New Mexico Human Services Department where he allegedly was responsible for determining applicants’ eligibility and benefit level for SNAP benefits.
According to the indictment, SNAP is funded by the U.S. Department of Agriculture and is administered by the States. The program was created to alleviate hunger and malnutrition, and permits low income households to obtain more nutritious diet by increasing the food purchasing power for eligible households. In New Mexico, individuals qualify to participate in SNAP based on income and need by completing an application with the Income Support Division of the New Mexico Human Services Department. Once an applicant is deemed eligible for SNAP benefits by a Family Assistance Analyst, the Analyst establishes a SNAP account in the applicant’s name and electronic benefit transfers (EBT), which are determined based on income, resources and household size, are deposited into the account on a monthly basis.
Count 1 of the indictment alleges that Padilla abused his position as a Family Assistance Analyst to conspire with his co-defendants to defraud the United States through the unauthorized use of SNAP benefits. It alleges that Padilla used names and personal identifiers he obtained from his co-defendants to establish fraudulent SNAP accounts, sometimes in exchange for cash or other things of value. Count 2 alleges that Padilla established a fraudulent SNAP account and used the account to fraudulently obtain approximately $1,468.00 in SNAP benefits for himself. Counts 3 through 27 of the indictment allege that Padilla fraudulently established 25 separate SNAP accounts through which the United States was defrauded of approximately $45,263.00 in SNAP benefits. Counts 28 through 32 allege that Padilla, aided and abetted by his co-defendants, fraudulently established SNAP accounts that were used to fraudulently obtain an aggregate of $12,705.00 in SNAP benefits.
Yesterday Quintana pled guilty to Count 30 of the Indictment, and admitted meeting Padilla through co-defendant Moya and knowing that Padilla had the ability to register people to receive food stamps. Quintana admitted that he agreed to pay Padilla a fee in exchange for arranging for him to receive food stamps unlawfully. Quintana obtained $486.00 in SNAP benefits through his illegal conduct. He also received a fee for collecting SNAP applications from six other people and delivering the completed applications to Padilla for the purpose of assisting them in obtaining SPA benefits unlawfully. Quintana acknowledged that his criminal conduct caused a monetary loss to the U.S. Department of Agriculture of approximately $9,384.00.
Today Lopez entered a guilty plea to Count 32 of the indictment and admitted completing fraudulent applications for SNAP benefits in his name, another for himself in a pseudonym, and in the names of two other individuals. Lopez paid $100.00 to process each of the applications. He acknowledged that his criminal conduct caused a total monetary loss to the U.S. Department of Agriculture of approximately $8,382.00. Under the terms of the plea agreements, Quintana and Lopez each face up to six months in prison when they are sentenced. Each will be required to pay restitution. Their sentencing hearings have yet to be scheduled.
On March 9, 2015, Moya pled guilty to Count 31 of the indictment and admitted that he fraudulently obtained SNAP benefits to which he was not entitled. Moya admitted that in early Dec. 2009, Padilla provided him with an application to obtain food stamps. Moya completed the application and returned it to Padilla for processing even though he knew that he was not entitled to SNAP benefits. Moya admitted unlawfully receiving $866.00 in SNAP benefits. Moya also admitted providing another application for SNAP benefits to a family member and that his relative unlawfully received $1,578.00 in SNAP benefits. On May 6, 2015, Moya was sentenced to six months in prison, or time served, followed by three years of supervised release. Moya also was ordered to pay $2,444.00 in restitution.
Padilla, Escobedo and Hernandez have entered not guilty pleas to the charges in the indictment. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Office of Inspector General for the U.S. Department of Agriculture, and was prosecuted by Assistant U.S. Attorney Sean J. Sullivan.
Two Letcher Men Found Guilty of Tax CrimesRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that Theodore “Ted” J. Nelson, Jr., age 67, and his son, Steven A. Nelson, age 45, both of Letcher, South Dakota, were found guilty of tax crimes as a result of a federal jury trial in Sioux Falls, South Dakota. The trial commenced on May 5, 2015, and ended on May 12, 2015.
The Nelsons were indicted by a federal grand jury on April 8, 2015. Ted Nelson was charged with one count of conspiracy to defraud the United States, six counts of failure to file income tax returns, and one count of impeding the Internal Revenue Service. Steven Nelson was charged with one count of conspiracy to defraud the United States, seven counts of failure to file income tax returns, and one count of impeding the Internal Revenue Service.
The conspiracy charge carries a maximum penalty of 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. For failure to file income tax returns, each count carries a maximum penalty of 1 year in custody and/or a $1,000 fine, no supervised release, a $25 special assessment to the Federal Crime Victims Fund, costs of prosecution, and restitution. The impeding count carries a maximum penalty of 3 years in custody and/or a $5,000 fine, 1 year of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
The Nelsons inherited a family farm and business from Ted Nelson’s parents. They planted and sold grain, raised cattle, performed custom work for neighbors, ran hunting/lodging businesses, leased out their land, and sold some of the land.
The Internal Revenue Service placed a lien against Ted Nelson’s real estate in January 2004. After that time, the Nelsons created over 30 trusts, corporations, LLCs, and other entities, in an effort to hide their ownership of the farm and its income. Also in 2004, the Nelsons opened a series of bank accounts with themselves or another person as signors, using false tax identification numbers and Social Security numbers. Steve Nelson filed income tax returns through 1996 and Ted Nelson filed them through 1998, and then both stopped filing.
This case was investigated by the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorneys John E. Haak and Ann M. Hoffman prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for August 17, 2015. Ted Nelson was remanded to the custody of the U.S. Marshals Service, and Steve Nelson was released pending sentencing.
Two Letcher Men Found Guilty of Tax CrimesRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that Theodore “Ted” J. Nelson, Jr., age 67, and his son, Steven A. Nelson, age 45, both of Letcher, South Dakota, were found guilty of tax crimes as a result of a federal jury trial in Sioux Falls, South Dakota. The trial commenced on May 5, 2015, and ended on May 12, 2015.
The Nelsons were indicted by a federal grand jury on April 8, 2015. Ted Nelson was charged with one count of conspiracy to defraud the United States, six counts of failure to file income tax returns, and one count of impeding the Internal Revenue Service. Steven Nelson was charged with one count of conspiracy to defraud the United States, seven counts of failure to file income tax returns, and one count of impeding the Internal Revenue Service.
The conspiracy charge carries a maximum penalty of 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. For failure to file income tax returns, each count carries a maximum penalty of 1 year in custody and/or a $1,000 fine, no supervised release, a $25 special assessment to the Federal Crime Victims Fund, costs of prosecution, and restitution. The impeding count carries a maximum penalty of 3 years in custody and/or a $5,000 fine, 1 year of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
The Nelsons inherited a family farm and business from Ted Nelson’s parents. They planted and sold grain, raised cattle, performed custom work for neighbors, ran hunting/lodging businesses, leased out their land, and sold some of the land.
The Internal Revenue Service placed a lien against Ted Nelson’s real estate in January 2004. After that time, the Nelsons created over 30 trusts, corporations, LLCs, and other entities, in an effort to hide their ownership of the farm and its income. Also in 2004, the Nelsons opened a series of bank accounts with themselves or another person as signors, using false tax identification numbers and Social Security numbers. Steve Nelson filed income tax returns through 1996 and Ted Nelson filed them through 1998, and then both stopped filing.
This case was investigated by the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorneys John E. Haak and Ann M. Hoffman prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for August 17, 2015. Ted Nelson was remanded to the custody of the U.S. Marshals Service, and Steve Nelson was released pending sentencing.
Two from Centralia Plead Guilty to Drug ConspiracyRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Daniel L. Gazdik, 51, and Sara Rose Davis, 34, of Centralia, Illinois, pled guilty in federal district court yesterday to Conspiracy to Manufacture and Distribute Methamphetamine as charged against them in an indictment returned by a Federal Grand Jury in December 2014. Gazdik also pled guilty to two counts of Distribution of Methamphetamine and another count of Possession of Pseudoephedrine with the Intent to Manufacture Methamphetamine. The offenses took place in Marion and Clinton Counties.
The Conspiracy carries a penalty of not less than 5 years, up to 40 years in federal prison, up to a $5 million fine, and at least 4 years of supervised release. Each charge of Distribution of Methamphetamine carries a penalty of up to 20 years in prison, up to a $1 million fine, and not less than 3 years of supervised release. The charge of Possession of Pseudoephedrine with the Intent to Manufacture Methamphetamine carries a penalty of up to 20 years in prison, up to a $250,000 fine, and up to 3 years of supervised release. Each charge carries a special assessment of $100. Sentencing is scheduled for September 4, 2015, for Gazdik and August 28, 2015, for Davis.
Information leading to the charges against Gazdik and Davis was obtained in an investigation conducted by the FBI, the Marion County Sheriff’s Office, and the Clinton County Sheriff’s Department, assisted by the Illinois State Police Methamphetamine Response Team, the Centralia Police Department, Jefferson County Sheriff’s Department and the Mt. Vernon Police Department. The case is being handled by Assistant United States Attorney Kit Morrissey.
Two Columbia Area Residents Arraigned for Conspiracy to Commit Bank FraudRead the Press Release
Contact Person: John Potterfield (803) 929-3000
Columbia, South Carolina---- John Wayne Martin, III, age 49, of Lexington, South Carolina; and Brodie Kale Sexton, age 37, of Columbia, South Carolina were both arraigned on a 4-count indictment in reference to a mail theft and forgery ring operating in the Midlands of South Carolina from July 2014 through November 2014. They were charged in an indictment with two other individuals; Sandra Kay Cheeks, age 47, of Lexington, South Carolina; and Brandy Michelle Mitchell, age 35, of Lexington, South Carolina; on these charges. The indictment alleges the individuals would illegally remove checks from mail boxes and other mail receptacles. The defendants would change the amount and the name of the payee on the check to one of the defendants or the name of an innocent victim whose identification had been illegally obtained by the defendants.
Martin and Sexton are charged with Criminal Conspiracy, a violation of 18 U. S. C. §1349; and Aggravated Identity Theft, a violation of 18 U. S. C. §1028A. The maximum sentence each could receive under 18 USC, Section 1349 is a fine of $1,000,000 and/or imprisonment for not more than 30 years. The defendants face a mandatory sentence of 2 years if convicted under 18 USC, Section 1028A.
The investigation, led by the US Postal Inspection Service Columbia, SC field office, was conducted with the cooperation of federal, state, and local law enforcement agencies, along with private industry security personnel. These agencies and groups make up the Midlands Economic Crime Group, or MECG, a working group led by the US Postal Inspection Service and the Lexington County Sheriff’s Office that meets once a month to discuss ongoing criminal incidents involving forgery, theft, fraud, identity theft, and other similar white collar crimes in the Midlands of South Carolina. The case is assigned to Assistant United States Attorney John Potterfield of the Columbia office for prosecution.
The United States Attorney further stated that all charges in the Indictment are merely accusations and that all defendants are presumed innocent until and unless proven guilty in a court of law.
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Twin Falls Former Pharmacy Technician Sentenced for Diverting Controlled SubstancesRead the Press Release
BOISE – Krista Federer, 46, of Twin Falls, Idaho, was sentenced today to 12 months and one day in prison for distributing a controlled substance, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Federer to serve three years of supervised release, and to pay a $1,000 fine.
According to the plea agreement, Federer worked as a pharmacy technician in a pharmacy in Twin Falls, Idaho. She stole and sold bottles of controlled substance prescriptions from the pharmacy stock to another individual without a prescription and outside the normal course of standard pharmacy practice. Generally, Federer arranged for the sales by text message and then put pill bottles in her car glove box in the pharmacy parking lot, where another individual retrieved the controlled substances and left payments. Specifically, on October 6, 2014, Federer illegally sold two bottles, each containing 100 pills of 20 mg oxycodone, and two bottles, each containing 100 pills of Dilaudid 4 mg (hydromorphone) for a total of $1,200. On October 14, 2014, Federer committed a similar diversion of controlled substances from her employer pharmacy by placing in her glove box three bottles, each containing 100 pills of oxycodone 30 mg, in exchange for $1,500. All of these are Schedule II controlled substances.
The case was initiated and investigated by the Twin Falls Police Department, and the Drug Enforcement Administration (DEA) led Tactical Diversion Squad which is comprised of law enforcement personnel from the DEA, Ada County Sheriff’s Office, Boise Police Department, Idaho State Police, Meridian Police Department, Nampa Police Department and U.S. Department of Health and Human Services Office of Inspector General.
Tennessee Man Pleads Guilty to Federal Fraud ChargesRead the Press Release
St. Louis, MO – COLEMAN CARPENTER of Troy, Tennessee, admitted to defrauding his former employer in a scheme involving the purchase of millions of bushels of agricultural commodities between 2009 and 2013.
In the plea, Carpenter admitted to paying $900,000 more than he was authorized to pay for various agricultural commodities while the manager of a grain elevator owned by Bunge North America, which is headquartered in St. Louis.
Carpenter appeared in St. Louis Monday before Judge Rodney W. Sippel, who accepted his guilty plea and set sentencing for August 28, 2015.
Carpenter faces up to 20 years imprisonment and/or a fine of $250,000. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the U.S. Postal Inspection Service and the St. Louis Division of the FBI. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
Store Owners Plead Guilty to Selling Synthetic CannabinoidsRead the Press Release
CONCORD, N.H. – Mohamed Alam, 62, of North Andover, Massachusetts, and Murshed Salam, 47, of Salem, New Hampshire, each plead guilty in United States District Court for the District of New Hampshire to selling synthetic cannabinoids announced Acting United States Attorney Donald Feith. Alam and Salam were selling synthetic cannabinoids under the brand names “Crazy Monkey,” “Sexy Monkey,” “Family Monkey” and “Mad Monkey.” Synthetic cannabinoids are a mixture of a leafy substance that has been sprayed with chemical compounds similar to THC, the psychoactive ingredient found in marijuana. Users smoke the product. The chemical compounds used in the manufacture of these products are ever changing and pose a significant threat to public health.
On June 26, 2013, a federal search warrant was executed at a convenience store located at 4 Main Street, North Andover, Massachusetts owned by Alam. The agents seized approximately 100 packages of “Monkey” products. Alam told law enforcement that he knew his customers were smoking the product even though the product packaging included a warning that the product was not for human consumption. Alam identified Murshed Salam of Salem, New Hampshire as his supplier. Agents then went to the Global Gas Station located at 52 Lowell Road, Salem, New Hampshire owned by Salam and seized several hundred more packages of the Monkey products. Salam was also selling the products as well as supplying Alam with the products.
The products Alam and Salam sold were misbranded because they were sold as potpourri when in fact the product was intended for use as a drug for human consumption and the product labeling, in package form, failed to include the name and address of the manufacturer, packer, or distributor, did not bear adequate directions for use, and did not bear such adequate warnings against use.
“Synthetic cannabinoids present a significant threat to public health,” Acting United States Attorney Donald Feith stated. “This office has notified merchants and businesses about the illegality of selling these products and the dangers they pose to the public. We will continue to work with our local, state and federal partners to investigate and prosecute those businesses who continue to introduce these dangerous products into the stream of commerce.”
“Our school resource officers are educating students of these illicit drugs and their unknown ingredients that can cause traumatic overdose and other medical issues. We will continue to work tirelessly with our law enforcement and community partners in combating substances that harm our citizens,” stated Paul J. Gallagher, Chief of North Andover Police.
Alam and Salam each face a maximum sentence of one year imprisonment. Alam agreed to a money forfeiture of $18,737.00 and Salam agreed to a money forfeiture of $18,245.00. Alam is scheduled to be sentenced on July 30, 2015. Salam’s sentencing hearing is scheduled for . Both were released pending sentencing.
The case was investigated by the North Andover Police Department and the Drug Enforcement Administration and is being prosecuted by Assistant U.S. Attorney Debra M. Walsh.
South Jersey Tax Preparer Pleads Guilty to Tax FraudRead the Press Release
CAMDEN, N.J. – A Salem County, New Jersey, tax preparer today admitted her role in a conspiracy to prepare false and fraudulent income tax returns, U.S. Attorney Paul J. Fishman announced.
Grace Garrett, 63, of Pittsgrove, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging her with conspiring to aid and assist others in the preparation of false and fraudulent tax returns for the tax years 2007 through 2011.
Garrett was a tax preparer at Pender Tax Services in Rosenhayn, New Jersey, through which she and others committed crimes resulting in tax losses of more than $340,000.
According to documents filed in this case and statements made in court:
For the tax years 2007 through 2011, Garrett and a conspirator sought to generate increased referrals, enhance their business, and enrich themselves by preparing and filing income tax returns based on false information. They used a number of fraudulent practices, including falsely claiming a filer was a “head of household;” inventing and inflating deductions; creating fictitious dependents; and creating false credits for education and childcare.
Although taxpayers generally met with Garrett or the conspirator to provide information to prepare their tax returns, it was routinely the conspirator whose name appeared as preparer of the return. The bogus returns resulted in a tax loss to the government of more than $340,000.
The conspiracy charge to which Garrett pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 11, 2015.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Christopher O’Malley Esq., Camden
garrett_grace_information.pdf (304.81 KB)
Six Individuals Sentenced for Fraudlent Schemes Against the U.S. Department of Veterans AffairsRead the Press Release
GREENEVILLE, Tenn. - On May 18, 2015, six individuals who pleaded guilty to knowingly and willfully submitting a total of 464 false claims for travel to the U.S. Department of Veterans Affairs (VA) were sentenced to serve a total of 26 months in prison, four years of federal probation, 15 years of federal supervised release, 300 hours of community service, restitution of $24,581, and assessments of $600.
The six individuals sentenced include: William Anderson, 59, of Knoxville, Tenn.; Georgia Adkins, 40, of Johnson City, Tenn.; David Bell, 54, of Jonesborough, Tenn.; Frederick Deer, 52, of Johnson City, Tenn.; Elliott Harris, 51, of Knoxville, Tenn.; and Matthew Lewandowski, 26, of Johnson City, Tenn.
The VA provides travel assistance to qualified veterans who travel outside their communities to receive health care benefits. Individuals who abuse the benefit by submitting false information to the DVA diminish resources which could be available to qualified veterans.
“The costs of providing medical care for our veterans should never be increased due to false claims submitted by those who would defraud the federal government,” said United States Attorney Bill Killian. “These convictions are notice to those who would consider defrauding the Department of Veterans Affairs, that appropriate penalties await criminal conduct,” he added.
Monty Stokes, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General (VA OIG), said, “We are committed to thoroughly investigating allegations of fraud against VA programs and resources to ensure veterans are afforded the legitimate benefits they have earned. These convictions reflect the successful cooperation and dedication of the VA OIG, VA Police, and the Department of Justice to bring frauds to justice.”
These indictments and subsequent convictions were the result of an investigation conducted by the Department of Veterans Affairs Office of Inspector General, Nashville Resident Agency, and VA Police Service of Mountain Home, Tenn. Assistant U.S. Attorneys Nicholas Regalia and Helen Smith represented the United States.
Sex Offender Sentenced to Prison for Violating Federal Registration and Notification LawRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that LESTER JOY, 34, was sentenced yesterday by U.S. District Judge Michael P. Shea in Hartford to 27 months of imprisonment, followed by five years of supervised release, for failing to register as a sex offender.
The Sex Offender Registration and Notification Act (“SORNA”), which was passed by Congress in 2006 as part of the Adam Walsh Act, provides a comprehensive set of minimum standards for sex offender registration and notification in the United States and seeks to strengthen the nationwide network of sex offender registration and notification programs. In part, SORNA requires registered sex offenders to register and keep their registration current in each jurisdiction in which they reside, work, or go to school.
According to court documents and statements made in court, on October 25, 2002, JOY was convicted in the State of New Jersey of sexual assault in the second degree, endangering the welfare of a child in the third degree and theft in the third degree. For these offenses, he was sentenced to three years of imprisonment, lifetime community supervision and was subject to lifetime registration as a sex offender. On January 4, 2006, JOY was convicted in Suffolk County, New York, of three counts of rape in the third degree, two counts of criminal sexual acts in the third degree and two counts of disseminating indecent material to a minor. For these offenses, he was sentenced to a period of 42 to 84 months of incarceration and lifetime probation.
In 2013, prior to his release from prison, JOY was informed of his registration obligations under SORNA and he signed forms stating that he understood his sex offender registration requirements in both New York and New Jersey.
On November 30, 2013, JOY was released from the Morris County, New Jersey jail following service of a sentence for violation of his lifetime term of community supervision in New Jersey. However, he did not register as a sex offender in either New Jersey or New York, and moved to Connecticut. He failed to notify New Jersey, New York and Connecticut officials of his move to Connecticut, as required.
JOY has been detained since his arrest in New Haven on March 16, 2014. He pleaded guilty to the offense on February 23, 2015.
This matter was investigated by the U.S. Marshals Service and was prosecuted by Assistant U.S. Attorney Deborah R. Slater.
Seven Minnesota Men Indicted for ConspiracyTo Provide Material Support to the Islamic State of Iraq and the LevantRead the Press Release
United States Attorney for the District of Minnesota Andrew M. Luger and FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton today announced a superseding indictment charging seven Minnesota men with conspiracy to provide material support to a designated foreign terrorist organization, namely, the Islamic State of Iraq and the Levant (ISIL).1 An indictment filed on February 19, 2015, charging HAMZA NAJ AHMED, 21, has been superseded to add ZACHARIA YUSUF ABDURAHMAN, 19; ADNAN FARAH, 19; HANAD MUSTAFE MUSSE, 19; GULED ALI OMAR, 20; ABDIRAHMAN YASIN DAUD, 21; and MOHAMED ABDIHAMID FARAH, 21.
According to the indictment and documents filed in court, for at least the last ten months, the Minneapolis Division of the FBI has been conducting an investigation into a group of individuals who have tried to join – and in some cases succeeded in joining – overseas designated foreign terrorist organizations. At least nine Minnesotans have now been charged as part of this conspiracy to provide material support to ISIL. The men are all associates and friends of one another. Among the co-conspirators are ABDULLAHI YUSUF and ABDI NUR, both of whom were originally charged by criminal complaint in November 2014.
The superseding indictment adds ABDURAHMAN, MUSSE, OMAR, DAUD, A. FARAH, and M. FARAH to the February 19, 2015, indictment charging AHMED with conspiracy to provide material support to a designated foreign terrorist organization. The superseding indictment also adds charges of attempt to provide material support to a designated foreign terrorist organization against OMAR, M. FARAH, ABDURAHMAN, MUSSE and DAUD.
According to the indictment and documents filed in court, M. FARAH is further charged with making a false statement during a terrorism investigation, because he lied to FBI agents about the circumstances surrounding his November 2014 bus trip to JFK Airport and subsequent scheduled departure to Europe.
According to the indictment and documents filed in court, AHMED and MUSSE are also charged with financial aid fraud. On November 8, 2014, both AHMED and MUSSE withdrew more than $1,000 in federal financial aid funds to purchase international airplane tickets from New York’s JFK Airport to destinations in Europe.
This case is the result of an investigation conducted by the FBI-led Joint Terrorism Task Force.
Defendant Information:
HAMZA NAJ AHMED, 21
Savage, Minn.
Charges:
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
• False statement, 1 count
• Financial aid fraud, 1 count
MOHAMED ABDIHAMID FARAH, 21
Minneapolis, Minn.
Charges:
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 2 counts
• False statement, 1 count
HANAD MUSTAFE MUSSE, 19
Minneapolis, Minn.
Charges:
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
• Financial aid fraud, 1 count
GULED ALI OMAR, 20
Minneapolis, Minn.
Charges:
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
ZACHARIA YUSUF ABDURAHMAN, 19
Columbia Heights, Minn.
Charges:
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
ABDIRAHMAN YASIN DAUD, 21
Minneapolis, Minn.
Charges:
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
ADNAN FARAH, 19
Minneapolis, Minn.
Charges:
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
San Francisco Art Fraudster Convicted of Mail Fraud, Wire Fraud, Making False Declarations, Escape, and Contempt After Three Week Jury TrialRead the Press Release
SAN FRANCISCO- A federal jury convicted Luke D. Brugnara today of mail fraud, wire fraud, false declarations to a court, escape, and contempt of court, announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David Johnson and U.S. Marshal Don O’Keefe.
Brugnara, 51, of San Francisco, was originally charged with fraud in a criminal complaint filed May 27, 2014. The criminal complaint described Brugnara’s refusal to pay for several pieces of art after he convinced a New York art dealer to ship the art to his California home. Brugnara was arrested on May 28, 2014, but then escaped from custody of his lawyer on February 5, 2015. He was apprehended six days later and stood trial for the fraud charges and the additional escape charge beginning April 27, 2015.
The jury found that Brugnara committed wire and mail fraud in connection with his agreement to purchase several works of art for a combined total of approximately $11,000,000 from a New York art dealer, Rose Long. The jury also found that defendant made false declarations to the court when he testified at a preliminary hearing in June 2014 that he had received a phone call from someone at Sotheby’s telling him that the artwork in question was fake. Further, the jury found that the defendant escaped from the San Francisco federal building on February 5, 2015, in contempt of the orders of the district court. Defendant was also acquitted of two counts of wire fraud and one count of making false declarations to a court. The guilty verdict followed a three week jury trial before the Honorable William Alsup, U.S. District Court Judge.
Evidence at trial showed that, in late March and early April 2014, Brugnara told Ms. Long that he would pay approximately $11 million for works of art by Willem de Kooning, Pablo Picasso, Joan Miró, George Luks, and Edgar Degas that were owned by Ms. Long and others. Based on his representations that he would pay for the artwork and put it in a museum, Ms. Long and the owners shipped the artwork to Brugnara at his house in the Sea Cliff neighborhood of San Francisco.
The evidence at trial demonstrated that the artwork was shipped to Brugnara’s residence and, on April 7, 2014, delivered in five wooden crates. When the artwork arrived, Brugnara refused to pay for it, return it, or inspect it, and told Ms. Long that she had given the artwork to him as a gift. Eventually, Ms. Long reported the crime to the FBI, which executed a search warrant at Brugnara’s residence in late May 2014. During the search, the FBI recovered only four of the five crates of artwork. The fifth crate, containing a “Little Dancer” sculpture by Edgar Degas, was never recovered.
After Brugnara was charged with fraud in connection with the art transaction, he testified before Judge Alsup in a preliminary hearing regarding his probation status. During that testimony, Brugnara explained that he had not paid for the artwork because he had received a phone call from someone at the art auction house Sotheby’s in the days before the delivery of the artwork. The evidence at trial demonstrated that such a phone call never happened.
On December 23, 2014, while Brunaga was in custody, Judge Alsup issued an order furloughing Brugnara to the custody of his lawyer in the federal building for the purpose of preparing for trial. The furlough was ordered “from 9 A.M. to 3 P.M. on any business day by reservation the previous business day.” On February 5, 2015, Brugnara violated the terms of this court order when he escaped from his lawyer’s custody at 450 Golden Gate Avenue in San Francisco, California. Brugnara was filmed sprinting away from the Federal Building. The evidence at trial established that he called a friend from a pay telephone and had her meet him with a car so that they could drive away from the area. After he absconded, Brugnara was a fugitive for six days. He was apprehended in Los Gatos, California, on February 11, 2015, as a result of a cooperative effort by the United States Marshals Service and the Federal Bureau of Investigation. He thereafter remained in custody throughout the trial.
Brugnara waived his right to counsel and conducted the trial as a pro se defendant with the assistance of two attorneys appointed as advisory counsel. Judge Alsup found Brugnara in summary contempt of numerous ordersand sentenced him to well over a year of imprisonment for his outbursts and obstructive conduct during trial, to be served consecutive to any sentence imposed for the underlying offenses.
Brugnara is being held in the custody of the U.S. Marshals Service pending sentencing. Brugnara’s sentencing hearing on the convictions is scheduled for September 8, 2015, before Judge Alsup, in San Francisco. The maximum statutory penalty for mail fraud, in violation of Title 18, United States Code, Section 1341, and wire fraud, in violation of Title 18, United States Code, Section 1343, is 20 years in prison, a fine of $250,000, forfeiture, and restitution. The maximum statutory penalty for false declarations to a court, in violation of Title 18, United States Code, Section 1623, and escape, in violation of Title 18, United States Code, Section 751(a), is 5 years in prison, a fine of $250,000, forfeiture, and restitution. The penalty for contempt of court, in violation of Title 18, United States Code, Section 401(3), is at the discretion of the court. Any sentence following conviction, however, would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Robin Harris and Benjamin Kingsley are prosecuting the case with the assistance of Mary Mallory, Denise Oki, Jessica Meegan, and Trina Khadoo. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the United States Marshals Service.
Regional Controller of Massachusetts-Based Corporation Sentenced for Stealing over $1 Million from EmployerRead the Press Release
BOSTON – The regional controller of a multi-state corporation was sentenced in U.S. District Court in Worcester today in connection with a scheme to defraud over $1 million from his employer.
Michael Catlow, 51, of Seekonk, Mass., was sentenced by U.S. District Court Judge Timothy S. Hillman to 30 months in prison, three years of supervised release, and was ordered to pay $1,018,624 in restitution and forfeiture. In January 2015, Catlow pleaded guilty to four counts of mail fraud.
From 2004 until 2013, Catlow served as the regional controller for a large multi-state corporation based in Westborough, Mass. In that capacity, he was authorized to sign checks for its corporate accounts in amounts up to $10,000. From February 2008 through May 2013, Catlow used the authority granted to him by his employer to write checks upon, and make withdrawals from, the company’s accounts to pay his own personal expenses. These frauds paid for luxury box season tickets to the Patriots, travel, vacation homes, personal credit cards, and expenses for a business operated by Catlow’s former spouse.
When the fraud was discovered in May 2013, Catlow confessed, first to his employer, then in a video recorded confession to law enforcement officers. Over the course of five years and hundreds of fraudulent transactions, Catlow’s embezzlement netted him $1,018,612.
United States Attorney Carmen M. Ortiz; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; and Westborough Police Chief Al Gordon, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Mark Grady of Ortiz’s Worcester Branch Office.
Readout of Attorney General Lynch's Visit to Cincinnati, OhioRead the Press Release
Attorney General Loretta E. Lynch traveled to Cincinnati, Ohio, today for the first stop in her national Community Policing Tour to highlight collaborative programs and policing practices designed to advance public safety, strengthen police-community relations and foster mutual trust and respect. The Attorney General also announced that she will visit Birmingham, Alabama; Pittsburgh, Pennsylvania; East Haven, Connecticut; Seattle, Washington; and Richmond, California.
The Attorney General was joined by U.S. Attorney Carter M. Stewart for the Southern District of Ohio, Director Ron Davis for the Community Oriented Policing Services (COPS) Office, Mayor John Cranley for the city Cincinnati, and Cincinnati Police Chief Jeffrey Blackwell.
While in Cincinnati, the Attorney General met with youth and law enforcement at Chase Elementary School to witness firsthand the city’s Right to Read Program in which Cincinnati police officers work with University of Cincinnati students to mentor and tutor children. At Chase Elementary, the Attorney General played “Jeopardy” with the elementary school students. She, the Attorney General, was gratified to hear how the young students described police as peace keepers and protectors of the community. In her remarks to the students and local officers, the Attorney General said, “It’s tremendous what you’ve been doing,” to show how integral law enforcement can be in the lives of our communities. She also described the innovative approach in Cincinnati as a model for other departments to follow.
After visiting the school, the Attorney General spoke briefly to reporters and took a few questions about her interactions with the children and the importance of community policing.
“What I saw were children being engaged, children learning, children finding that learning can be fun, children learning about senses – about the world around them – at an age where, I think educators will tell you, it is really crucial that we not lose our children and they not fall out of the educational system and that they develop that love for learning,” Attorney General Lynch told reporters. “But I also saw children who were aware of the larger community around them and had a very good sense of what law enforcement does – law enforcement at its best because they are seeing law enforcement at best. So in their interactions in the future they will have that context into which to put them as well as law enforcement will have those interactions into which to put them.”
The Attorney General also visited the Cincinnati Police Department for a meet and greet with police officers. She commended the department’s efforts to reach out to the community, saying, “It's very easy for the cameras to show up when something's on fire, but we also want them to see the work that you're doing day in and day out.” She also thanked the officers on behalf of the Justice Department for the “hard work” they do every day and spoke to officers that were hired with COPS Office hiring grants. The Justice Department through its COPS Office yesterday announced five separate grant funding opportunities of up to $163 million for law enforcement agencies to help implement the recommendations made by the President’s Task Force on 21st Century Policing.
Following her meeting with police officers, the Attorney General ate lunch with U.S. Attorney Stewart, COPS Director Davis, and Cincinnati Police Chief Blackwell at local restaurant Skyline Chili.
Following a tour led by the curator of the National Underground Railroad Freedom Center, the Attorney General convened a meeting with city officials, law enforcement, local and faith leaders, young people and other members of the community to discuss ways in which the success Cincinnati has seen in building trust between law enforcement and the community can be replicated in cities across the nation.
“Every city deserves an outstanding, world-class police force that works alongside local residents to protect public safety,” said Attorney General Lynch. “And every officer deserves the tools, training, and support they need to do their jobs as safely and effectively as possible.” Her full remarks can be found here.
The Attorney General also visited with Department of Justice employees at the office of the U.S. Attorney for the Southern District of Ohio. Following that meeting, the Attorney General met with the family of John Crawford III, a 22-year African-American man, was shot and killed by a Beavercreek, Ohio police officer inside a Wal-Mart store while Crawford held a BB gun.
Pittsburgh Man Sentenced to 10 Years in Federal Prison for Possessing Child PornographyRead the Press Release
PITTSBURGH. - A former resident of Allegheny County, Pennsylvania, was sentenced in federal court to 10 years imprisonment, followed by a lifetime supervised release, on his conviction of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
United States District Judge Gustave Diamond imposed the sentence on James Stover, 28, formerly of Pittsburgh, Pa.
According to information presented to the court, on or about Aug. 15, 2013, Stover knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation for conducting the investigation that led to the successful prosecution of Stover.
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.
Philadelphia Man Indicted on Gun ChargeRead the Press Release
PHILADELPHIA – Daniel Shank, 39, of Philadelphia, was charged today by indictment with possession of a firearm and ammunition by a convicted felon, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a maximum possible sentence of 10 years in prison, up to lifetime supervised release, and a $100 special assessment.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Police Department. It is being prosecuted by Special Assistant United States Attorney Jordan Strauss.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Charged with Robbing Metro PCS StoresRead the Press Release
PHILADELPHIA - Edwin Jimerson, 24, of Philadelphia, PA, was charged today by indictment with three robberies at Metro PCS stores in Philadelphia, in April of 2015, announced United States Attorney Zane David Memeger. Jimerson is charged with robbery which interfered with interstate commerce and brandishing, using and carrying a firearm during and in relation to a crime of violence. According to the indictment, on April 3, 2015, Jimerson robbed the Metro PCS at 6342 Rising Sun Avenue, of approximately $905; on April 6, 2015, Jimerson robbed the Metro PCS at 1414 Point Breeze Avenue, of approximately $1500; and on April 8, 2015, Jimerson robbed the Metro PCS at 7219 Frankford Avenue, of approximately $200.
If convicted of all charges, Jimerson defendant faces a mandatory minimum of sentenced of 57 years in prison up to life, up to five years of supervised release, a possible fine, a special assessment of $600, restitution, and forfeiture of the firearm and ammunition.
This case was investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, and the Philadelphia District Attorney's Office. It is being prosecuted by Assistant United States Attorney Ewald Zittlau.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pharmacy Owner Sentenced for Conspiracy to Distribute Contraband Cigarettes, Health Care Fraud, and Receiving and Distributing Misbranded DrugsRead the Press Release
Baltimore, Maryland - U.S. District Judge William D. Quarles, Jr. sentenced the owner of Health Way Pharmacy, Salim Yusufov, age 43, of Reisterstown, Maryland, today to 12 months home confinement as part of four years’ probation, for a conspiracy to traffic over $6.6 million in contraband cigarettes, health care fraud, and receipt and delivery of misbranded drugs. Judge Quarles also ordered Yusufov to forfeit $200,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Antoinette V. Henry of the U.S. Food & Drug Administration, Office of Criminal Investigations; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
“Distribution of unapproved foreign drugs presents a real danger to U.S. consumers especially barbiturates, which are potentially addictive prescription drugs," said Antoinette V. Henry, Special Agent in Charge, FDA Office of Criminal Investigations’ Metro Washington Field Office. “We will continue our work to keep such illegal medicines out of the U.S. marketplace and help bring to justice those who would circumvent FDA requirements and place the public health at risk.”
According to his guilty plea, Salim Yusufov, conspired with his brother, Elmar Rakhamimov, and other family members and associates to receive, possess, sell and distribute contraband cigarettes, that is, cigarettes on which the applicable state taxes have not been paid. Rakhamimov, who was the leader and organizer of the scheme, purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area. Salim Yusufov received more than $81,000 in kickbacks for brokering the first nine of the contraband cigarette transactions with the undercover FBI agent. These transactions included thousands of cartons of contraband cigarettes. The cigarettes were sold and distributed in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $5.85 per package of cigarettes ($58.50 per carton of cigarettes). The total tax evaded was more than $1 million.
Salim Yusufov also admitted that he illegally provided unapproved prescription drugs from Germany and Eastern Europe and sold them to customers. Corvalol, also referred to Corvalolum, and Valocordin, is not approved by the FDA for distribution in the United States, although it is sold in Eastern European countries, where it is used to treat elevated blood pressure and as a tranquilizer and sedative. Valocordin and Corvalol contain large amounts of phenobarbital, a prescription drug regulated by the FDA. According to his plea agreement, from July 23, 2010 through July 14, 2011, Yusufov, who is not a licensed pharmacist, imported and distributed Valocordin, dispensing the drug without a prescription.
In addition, Yusufov admitted to defrauding Medicare and Medicaid by causing Health Way Pharmacy to bill for prescriptions and/or prescription refills that the pharmacy did not provide to customers. One of the ways Yusufov did this was by intentionally failing to reverse claims for payment submitted to Medicare when customers did not pick up or otherwise receive refills. A second way that Yusufov defrauded Medicare and Medicaid was by providing drugs other than those prescribed, while still invoicing Medicare or Medicaid for the prescribed medication.
Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 42, of Owings Mills, Maryland, and seven other co-conspirators have been convicted for their roles in the scheme and are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, U.S. Food & Drug Administration, Office of Criminal Investigations and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who are prosecuting the case.
New Jersey man sentenced to 12 years for drug traffickingRead the Press Release
ELKINS, WEST VIRGINIA – Matthew Lee Cordero, 32, of Vineland, New Jersey, was sentenced to 151 months in prison for oxycodone trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Cordero was engaged in a scheme to procure oxycodone from sources in Detroit, New Jersey, and Florida for redistribution in the Northern District of West Virginia. Specifically, Cordero sold oxycodone in Randolph County in October 2014. He pled guilty in February 2015 to one count of “Distribution of Oxycodone,”
Additionally, Arthur Pritt, 38, of Archer, Florida, was sentenced to 24 months in prison for marijuana trafficking. From December 2008 through December 2014, he repeatedly obtained marijuana from sources in California and Pennsylvania. He then arranged for the drugs to be transported across state lines into Randolph County, West Virginia for redistribution and sale. He pled guilty in February 2015 to one count of “Conspiracy to Distribute Marijuana.”
Assistant U.S. Attorney Stephen Warner prosecuted the cases on behalf of the government. The Mountain Region Drug and Violent Crimes Task Force, the United States Forest Service, the West Virginia State Police, the Randolph and Upshur County Sheriff's Offices, the U.S. Drug Enforcement Administration, the U.S. Internal Revenue Service, the Harrison County Sheriff's Department, and the U.S. Postal Service investigated.
U.S. District Judge John Preston Bailey presided.
Nebraska LECC Criminal Justice ConferenceRead the Press Release
The 28th Annual Nebraska Law Enforcement Coordinating Committee (LECC) Criminal Justice and County Attorney’s Conference is being held in Kearney, Nebraska May 20-22, 2015 with more than 300 local, state, and federal law enforcement officials and prosecutors attending.
The conference is designed to bring training to law enforcement officials and prosecutors in the latest topics impacting the criminal justice system. The conference is annually hosted by the United States Attorney's Office, Nebraska County Attorneys Association and the Nebraska Sheriffs Association.
This year’s topics include:
• Marijuana Legalization – The Consequences of Legalized Marijuana
• Nikko Jenkins Murder Spree Trilogy - Case Presentation and Study
• Winning Strategies for Prosecutors and Law Enforcement from Investigation to Trial
• Asset Forfeiture Changes on the Federal Level
• Supreme Court and Legislative updates
• State-Wide Child Advocacy Centers
• Juvenile Diversion Programs and Juvenile LegislationAwards will be presented during the Thursday evening (May 20th) banquet by United States Attorney Deborah R. Gilg, to criminal justice officials for their outstanding contributions to the criminal justice system and their communities.
Mobile County Man Sentenced to 30 Months for Illegal Possession of FirearmsRead the Press Release
The United States Attorney Kenyen R. Brown announces that Aaron Hill, a 20 year old, resident of Mobile, was sentenced today to 30 months incarceration followed by three years of supervised release for possession of a 20 gauge shotgun and a 9mm pistol after being convicted of a felony, Robbery 1st Degree
On February, 2015, Mr. Hill pled guilty to being a felon in possession of a firearm after an investigation revealed that a search of his residence was conducted pursuant to that terms of supervised release and the two firearms were uncovered.
Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case and presented it to the U.S. Attorney's Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
Mobile County Man Sentenced to 120 Months for Role in Methamphetamine Conspiracy and Possession of Firearms in Furtherance of Drug Trafficking CrimeRead the Press Release
The United States Attorney Kenyen R. Brown announces that Phouva Phothisat, a 28 year old, Irvington resident, was sentenced today to 120 months incarceration for possession of numerous firearms kept for protection and for his role as a drug dealer in a methamphetamine conspiracy where more than 100 grams of methamphetamine was seized.
On October 27, 2014, Mr. Phothisat pled guilty to Counts One and Ten of a 12 count indictment. Counts One and Ten charged him with conspiring to possess with intent to distribute methamphetamine and possession of numerous firearms during and in relation to his drug dealing crime, respectively.
Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives along with special agents of the Department of Homeland Security investigated the case and presented it to the U.S. Attorney's Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney Gina S. Vann.
Mobile County Man Sentenced to 108 Months for Role in Methamphetamine Conspiracy and Illegal Possession of A FirearmRead the Press Release
The United States Attorney Kenyen R. Brown announces that Sisavang Phothisat, a 39 year old, Theodore resident, was sentenced today to 108 months incarceration for possession of a Taurus revolver after being convicted of attempted murder in Fresno County, California and for his role as a drug dealer in a methamphetamine conspiracy where more than 100 grams of methamphetamine was seized.
On October 30, 2014, Mr. Phothisat pled guilty to Counts One and Eight of a 12 count indictment. Counts One and Eight charged him with conspiring to possess with intent to distribute methamphetamine and being a felon in possession of a firearm, respectively.
Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives along with special agents of the Department of Homeland Security investigated the case and presented it to the U.S. Attorney's Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney Gina S. Vann.
Methamphetamine Traffickers Sentenced to 23 Years and 17 Years in PrisonRead the Press Release
SAN JOSE – Salvador Espinoza-Patino and Alejandro Espinoza Del Toro were sentenced to 23 and 17 years in prison, respectively, for conspiracy to possess with intent to distribute and to distribute methamphetamine, conspiracy to commit money laundering, and distribution of methamphetamine, announced United States Attorney Melinda Haag and Drug Enforcement Administration Acting Special Agent in Charge Bruce Balzano.
Espinoza-Patino, 32, of Fremont, Calif, was indicted by a federal grand jury on February 28, 2013, for one count of conspiring to possess with the intent to distribute and to distribute methamphetamine, in violation of 21 U.S.C. § 846; two counts of conspiring to commit money laundering, in violation of 18 U.S.C. § 1956(h) and §1956(a)(2)(b)(i), and two counts of distribution of methamphetamine, in violation of 21 U.S.C. § 841(a)(1). On October 27, 2014, Espinoza-Patino pleaded guilty without a plea agreement to all the charges alleged against him in the indictment.
Del Toro, (a/k/a “Marco Antonio Ortuno Del Toro”), 24, of Los Banos, Calif., was also indicted by a federal grand jury on February 28, 2013. He was charged in the indictment with one count of conspiracy to possess with the intent to distribute and to distribute methamphetamine, in violation of 21 U.S.C. § 841(a)(1); one count of conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h) and 18 U.S.C. § 1956(a)(2)(B)(i); and one count of distribution of methamphetamine, in violation of 21 U.S.C. § 841(a)(1). On December 5, 2014, he pleaded guilty to all the charges alleged against him in the indictment.
According to government filings, the investigation established that Espinoza-Patino was a leader within a drug trafficking organization that was involved in large scale methamphetamine trafficking. On November 30, 2012, agents executed search warrants at a number of locations. The bulk of the methamphetamine was seized from two stash houses that Espinoza-Patino and Del Toro maintained. Specifically, when agents executed a search warrant at the stash house located at 2219 Raquet Club Drive in Los Banos, agents seized approximately 554 pounds (259 kilograms) of methamphetamine, two firearms, and a vehicle that had a hidden compartment. Likewise, when agents executed a search warrant at the stash house located at 441 North Santa Venetia in Los Banos, agents seized approximately 104 pounds (47 kilograms) of methamphetamine, and a vehicle that had a hidden compartment.
The sentences of Espinoza-Patino and Del Toro were handed down by the Honorable Lucy H. Koh, U.S. District Judge. Judge Koh also sentenced both Espinoza-Patino and Del Toro to a 5-year period of supervised release. The defendants have been in federal custody since November 30, 2012.Assistant U.S. Attorneys Richard Cheng and Chinhayi Cadet are prosecuting the case. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.