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Thursday 14 May 2015
Duke Energy Subsidiaries Plead Guilty and Sentenced to Pay $102 Million for Clean Water Act CrimesRead the Press Release
WASHINGTON – Three subsidiaries of North Carolina-based Duke Energy Corporation, the largest utility in the United States, pleaded guilty today to nine criminal violations of the Clean Water Act at several of its North Carolina facilities and agreed to pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia. Four of the charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near Eden, North Carolina, in February 2014. The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies’ other facilities.
Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress, must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina, obligations estimated to be approximately $3.4 billion.
Officials from the Justice Department’s Environment and Natural Resources Division and the three U.S. Attorney’s Offices in North Carolina, the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance, EPA’s Office of Inspector General, the Internal Revenue Service (IRS) Criminal Investigations and the North Carolina State Bureau of Investigation (SBI) made the announcement following a plea hearing at the federal courthouse in Greenville, North Carolina today.
“The massive coal ash spill into North Carolina’s Dan River last year was a crime and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise controls over coal ash facilities,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division. “The terms of these three plea agreements will help prevent this kind of environmental disaster from reoccurring in North Carolina and throughout the United States by requiring Duke subsidiaries to follow a rigorous and independently verifiable program to ensure they comply with the law.”
“Duke Energy's crimes reflect a breach of the public trust and a lack of stewardship for the natural resources belonging to all of the citizens of North Carolina,” said U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina. “The massive release at the Dan River coal ash basin revealed criminal misconduct throughout the state – conduct that will no longer be tolerated under the judgment imposed by the court today.”
“Duke’s subsidiaries discharged potentially toxic pollutants that put at risk North Carolina’s water quality and wildlife and today’s outcome ensures they will be held responsible for violating federal environmental requirements,” said Acting U.S. Attorney Jill W. Rose for the Western District of North Carolina. “The defendants will now have to comply with the terms imposed by the court, including paying hefty financial penalties and making significant financial contributions toward improving the quality of impacted waterways, wetlands and our water supply system.”
“Duke’s actions adversely impacted the Dan River ecosystem and caused residents who live near and rely on the water supply much apprehension about the safety of the river,” said Criminal Chief Cliff Barrett for the U.S. Attorney’s Office in the Middle District of North Carolina. “Today’s plea holds Duke accountable for this result and charts a course to remediate the impact of these spills.”
“Over two hundred sixteen million Americans rely on surface water as their source of drinking water,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “Duke Energy put that precious resource at risk in North Carolina as the result of their negligence. Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable.”
On Feb. 20, 2015, the three U.S. Attorney’s Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: the Dan River steam station (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County) and the Riverbend steam station (Gaston County). The alleged violations included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities.
As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will pay a $68 million criminal fine and a total $24 million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia. The companies will also provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of its coal ash basins. In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.
Duke’s subsidiaries operating 18 facilities in five states, including 14 in North Carolina, will also be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited. Results of these audits will be made available to the public to ensure compliance with environmental laws and programs. The companies’ compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.
Approximately 108 million tons of coal ash are currently held in coal ash basins owned and operated by the defendants in North Carolina. Duke Energy Corporation subsidiaries also operate facilities with coal ash basins in South Carolina, approximately 5.99 million tons of coal ash, Kentucky, approximately 1.5 million tons of coal ash, Indiana, approximately 35.6 million tons of coal ash and Ohio, approximately 5.9 million tons of coal ash.
The companies must also meet the obligations imposed under federal and state law to excavate and close coal ash impoundments at the Asheville, Dan River, Riverbend and Sutton facilities.
Additionally, at the insistence of the United States, the holding company Duke Energy Corporation has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.
“Duke’s environmental crimes required a special financial review of their actions to which we were proud to join our partners in investigating,” said Special Agent in Charge Thomas J. Holloman, III of the IRS Criminal Investigation. “The considerable fines, formal apologies and massive cleanup initiatives will impact the Duke image and brand, assuring the public that corporations will be held accountable for their gross actions involving the environment, wildlife and the communities of this great state.”
“The SBI worked closely with the Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service in this matter,” said Acting Director B.W. Collier of the North Carolina SBI. “This type of collaboration is critical to ensuring a thorough and intensive review on cases such as this. The SBI remains committed to the public interest and is prepared to continue assisting the U.S. Attorney’s office.”
The criminal investigation was conducted by the Criminal Investigation Division, Region Four and the Office of Inspector General of EPA, Criminal Investigations of the IRS and North Carolina State Bureau of Investigation with assistance from the Federal Bureau of Investigation and the Department of Defense Criminal Investigative Service.
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Duke Energy Subsidiaries Plead Guilty and Sentenced to Pay $102 Million for Clean Water Act CrimesRead the Press Release
WASHINGTON – Three subsidiaries of North Carolina-based Duke Energy Corporation, the largest utility in the United States, pleaded guilty today to nine criminal violations of the Clean Water Act at several of its North Carolina facilities and agreed to pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia. Four of the charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near Eden, North Carolina, in February 2014. The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies’ other facilities.
Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress, must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina, obligations estimated to be approximately $3.4 billion.
Officials from the Justice Department’s Environment and Natural Resources Division and the three U.S. Attorney’s Offices in North Carolina, the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance, EPA’s Office of Inspector General, the Internal Revenue Service (IRS) Criminal Investigations and the North Carolina State Bureau of Investigation (SBI) made the announcement following a plea hearing at the federal courthouse in Greenville, North Carolina today.
“The massive coal ash spill into North Carolina’s Dan River last year was a crime and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise controls over coal ash facilities,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division. “The terms of these three plea agreements will help prevent this kind of environmental disaster from reoccurring in North Carolina and throughout the United States by requiring Duke subsidiaries to follow a rigorous and independently verifiable program to ensure they comply with the law.”
“Duke Energy's crimes reflect a breach of the public trust and a lack of stewardship for the natural resources belonging to all of the citizens of North Carolina,” said U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina. “The massive release at the Dan River coal ash basin revealed criminal misconduct throughout the state – conduct that will no longer be tolerated under the judgment imposed by the court today.”
“Duke’s subsidiaries discharged potentially toxic pollutants that put at risk North Carolina’s water quality and wildlife and today’s outcome ensures they will be held responsible for violating federal environmental requirements,” said Acting U.S. Attorney Jill W. Rose for the Western District of North Carolina. “The defendants will now have to comply with the terms imposed by the court, including paying hefty financial penalties and making significant financial contributions toward improving the quality of impacted waterways, wetlands and our water supply system.”
“Duke’s actions adversely impacted the Dan River ecosystem and caused residents who live near and rely on the water supply much apprehension about the safety of the river,” said Criminal Chief Cliff Barrett for the U.S. Attorney’s Office in the Middle District of North Carolina. “Today’s plea holds Duke accountable for this result and charts a course to remediate the impact of these spills.”
“Over two hundred sixteen million Americans rely on surface water as their source of drinking water,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “Duke Energy put that precious resource at risk in North Carolina as the result of their negligence. Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable.”
On Feb. 20, 2015, the three U.S. Attorney’s Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: the Dan River steam station (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County) and the Riverbend steam station (Gaston County). The alleged violations included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities.
As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will pay a $68 million criminal fine and a total $24 million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia. The companies will also provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of its coal ash basins. In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.
Duke’s subsidiaries operating 18 facilities in five states, including 14 in North Carolina, will also be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited. Results of these audits will be made available to the public to ensure compliance with environmental laws and programs. The companies’ compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.
Approximately 108 million tons of coal ash are currently held in coal ash basins owned and operated by the defendants in North Carolina. Duke Energy Corporation subsidiaries also operate facilities with coal ash basins in South Carolina, approximately 5.99 million tons of coal ash, Kentucky, approximately 1.5 million tons of coal ash, Indiana, approximately 35.6 million tons of coal ash and Ohio, approximately 5.9 million tons of coal ash.
The companies must also meet the obligations imposed under federal and state law to excavate and close coal ash impoundments at the Asheville, Dan River, Riverbend and Sutton facilities.
Additionally, at the insistence of the United States, the holding company Duke Energy Corporation has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.
“Duke’s environmental crimes required a special financial review of their actions to which we were proud to join our partners in investigating,” said Special Agent in Charge Thomas J. Holloman, III of the IRS Criminal Investigation. “The considerable fines, formal apologies and massive cleanup initiatives will impact the Duke image and brand, assuring the public that corporations will be held accountable for their gross actions involving the environment, wildlife and the communities of this great state.”
“The SBI worked closely with the Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service in this matter,” said Acting Director B.W. Collier of the North Carolina SBI. “This type of collaboration is critical to ensuring a thorough and intensive review on cases such as this. The SBI remains committed to the public interest and is prepared to continue assisting the U.S. Attorney’s office.”
The criminal investigation was conducted by the Criminal Investigation Division, Region Four and the Office of Inspector General of EPA, Criminal Investigations of the IRS and North Carolina State Bureau of Investigation with assistance from the Federal Bureau of Investigation and the Department of Defense Criminal Investigative Service.
District Man Sentenced to Prison for Assaulting Deputy U.S. MarshalsRead the Press Release
WASHINGTON - David Jenkins, also known as Ronald Pannell, 37, has been sentenced to an 18-month prison term for assaulting deputy United States marshals who were attempting to arrest him on a warrant, announced Acting U.S. Attorney Vincent H. Cohen, Jr. and Michael Hughes, U.S. Marshal for the Superior Court of the District of Columbia.
Jenkins, of Washington, D.C., pled guilty in January 2015, in the U.S. District Court for the District of Columbia, to a charge of assaulting, resisting, or impeding law enforcement officers. He was sentenced on May 13, 2015, by the Honorable Ketanji Brown Jackson. Upon completion of his prison term, he will be placed on one year of supervised release.
According to the government’s evidence, on the night of Dec. 30, 2013, deputy marshals went to Maryland Avenue and 19th Street NE to apprehend Jenkins, who was wanted on a warrant charging him with assault with a dangerous weapon. The deputies were assigned to the warrant squad assigned to the Superior Court of the District of Columbia and wore approved U.S. Marshals Service vests with law enforcement insignia.
The deputy marshals located Jenkins in a sport utility vehicle at 19th and L Streets NE. They surrounded the vehicle and activated their police lights. Jenkins immediately fled the front passenger seat of the vehicle and ran on the sidewalk, where he made physical contact with one of the deputies, who fell and injured his hand. Jenkins continued to flee, despite verbal commands to stop. Deputies located him several minutes later, on a basement stairway in the 1700 block of Lang Place NE, where he pushed two of them and was able to run from them for about two blocks before he was apprehended. The Superior Court case later was dismissed, but Jenkins continued to face charges stemming from the assault on the deputy marshals.
In announcing the sentence, Acting U.S. Attorney Cohen and Marshal Hughes commended the actions of the U.S. Marshals Service deputies who investigated the case. He also expressed appreciation for the work of Assistant U.S. Attorney Emory V. Cole, who investigated and prosecuted the case.
Department of Justice and Mohave County, Arizona, Superior Court Work to Ensure Equal Access for Non-English SpeakersRead the Press Release
The Justice Department announced today that it has closed its review of the Language Access Program of the Mohave County, Arizona Superior Court. The closure follows the court’s successful completion of its obligations under an agreement to provide language assistance services to all limited English proficient (LEP) court users. The Civil Rights Division began working with the Mohave County Superior Court in 2013 following the receipt of a complaint by a court user alleging that the court discriminated on the basis of national origin in violation of Title VI of the Civil Rights Act of 1964 by refusing to provide her an interpreter free of charge in a family law matter. Title VI requires recipients of federal financial assistance, such as courts, to provide competent language services free of charge to LEP individuals in all court proceedings and operations.
With the department’s assistance, the Mohave County Superior Court has made a number of improvements to its Language Access Program, including:
- Updating the Court Language Access Plan to clearly state that all LEP parties, witnesses, victims and anyone with an interest in a matter will be provided interpreter services in all court proceedings free of charge regardless of case type, court user income, or language spoken.
- Creating and implementing a language services complaint system.
- Improving access to services outside the courtroom for all court users through bilingual employees, “I Speak” cards available in the clerk’s office, multilingual signage, translated forms on the court’s website, and telephonic or video interpreter services available for all employees to use.
- Training all court staff on the importance of providing appropriate language services.
- Enhancing communication with stakeholders in the community.
- Working with the state court system to improve the efficiency and quality of interpreter services and translations.
“I commend the Mohave Superior Court leadership and staff for their efforts to provide all communities with equal access to justice regardless of the language they speak,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “As Mohave and other courts across Arizona continue to improve language services, we welcome the opportunity to provide assistance when needed.”
The department has worked with courts across the country to improve the provision of language services to LEP individuals. Information on an array of state court language access resources can be found here: http://www.lep.gov/resources/resources.html#SC. In 2014, the department released a “Language Access Planning and Technical Assistance Tool for Courts” which provides court systems with a series of questions to consider as they develop and implement plans to provide language assistance.
Please click here for further information about FCS. For additional LEP-related resources, please go to the Federal Interagency LEP website.
Couple Heads to Prison for Sex Trafficking of Minors in Two StatesRead the Press Release
HOUSTON – David J. Golson, 28, and Arieal J. Bishop, 30, have been ordered to prison following convictions related to crimes that occurred in both Texas and Arkansas, announced U.S. Attorney Kenneth Magidson.
Golson previously pleaded guilty in November 2014 to one count of sex trafficking of minors in Texas and one count of conspiracy to commit sex trafficking in the Arkansas case. Bishop had pleaded to possession of child pornography and transportation of minors in the Texas case and sex trafficking of minors in the Arkansas case.
Today, U.S. District Judge U.S. District Judge Sim Lake handed Golson a total sentence of 60 months in federal prison to be immediately followed by 10 years of supervised release. Bishop was sentenced April 10, 2015, and ordered to serve a total of 120 months in federal prison. Both will also be ordered to register as a sex offender.
The pair faced charges in both Texas and Arkansas. The Texas indictment was returned in April 2013, alleging crimes that occurred between April and September 2011. The charges from Arkansas took place in November 2012. The Arkansas case was eventually transferred to Houston the charges merged. The convictions resolve the allegations in both cases.
The investigation revealed Bishop filmed Golson engaging in sex with a 17-year-old girl within a short time after meeting them. Bishop posted advertisements for commercial sex for both herself and the victim in Houston as well as other cities in Texas and in Louisiana. The victim traveled with Bishop to Louisiana where they met up with Golson and continued to post ads and engage in commercial sex. The victim gave money she earned from commercial sex to Bishop who then gave it to Golson.
Bishop and Golson were originally arrested in Arkansas and charged with sex trafficking offenses involving a different minor victim.
In May 2013, the two appeared in Houston federal court, at which time U.S. Magistrate Judge Stephen W. Smith found them to be a flight risk and ordered them into custody. The court considered that neither person had any legitimate source of income, residence or significant ties to the area. They will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future
The Texas case was investigated by the Houston FBI Innocence Lost Task Force and is being prosecuted by Assistant U.S. Attorney (AUSA) Sherri L. Zack. The Arkansas case was prosecuted by AUSA Kristin Bryant.
Collegeville, Pennsylvania, Man Gets Life Sentence for Preying on ChildrenRead the Press Release
Matthew Krapf, 45, of Collegeville, Pennsylvania, was sentenced today to life in prison for 10 counts, each, of using or inducing a child to pose for child pornography, use of an interstate commerce facility to entice a minor to engage in sexual contact, three counts of distribution of child pornography and one count of possession of child pornography. He was also sentenced to 10 years supervised release. Krapf pleaded guilty on Oct. 28, 2014, to all 24 counts.
Krapf met his victims online and directed the conversation to sexually explicit chats. As early as December 2012, the defendant recorded Skype video chats, later recovered by police, that depicted the defendant directing one victim to masturbate for him. In the months that followed, the defendant met the victim at his parent’s home and engaged in sexual conduct from their very first encounter. A 13-year old victim met the defendant online and engaged in sexually explicit chats from the beginning of their communication, even after informing the defendant that he was just 13-years old. The defendant videotaped his encounters and later distributed the videos over the Internet.
In October 2013, Montgomery County, Pennsylvania, detectives received consent to take over one victim’s identity and corresponded with the defendant on-line and via text messaging. The defendant, believing that he was speaking with the 14-year old victim, made arrangements to meet him at his parents’ home on Nov. 2, 2013 to have sex again. Krapf was arrested by Montgomery County detectives after he entered the victim’s house.
When agents seized his computers, cell phones and collection of DVDs and CDs, a forensic exam uncovered more than two million images of child pornography, including more than 100 videos that the defendant manufactured of the victim teenage boys. Krapf’s collection is believed to be the largest ever seized in the Eastern District of Pennsylvania.
Krapf admitted to meeting one victim on at least eight occasions during the summer of 2013 and engaging in oral sex, anal sex and digital penetration. He also admitted that he knew the victim was just 14-years old before he had any sex with him. Krapf told police that during the time he was engaging in the sexual abuse of this boy, he directed him to have sex with other juvenile boys, record the sex and then send the recording to him and to take nude and sexually explicit photographs of himself. Defendant Krapf also confirmed the July 2013 sexual abuse of the two minor boys, admitting that he engaged in oral and anal sex with these boys, knowing that they were minors and videotaped the encounter. In his confession the defendant also admitted to sexually abusing at least four other underage boys. His abuse of these boys was over a nine year period, dating back to 2005.
“This predator used the internet to identify and begin the process of sexually exploiting his numerous victims,” said U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania. “He then took full advantage of his vulnerable victims through a series of horrific sexual assaults over several years. His post-arrest admissions provide disturbing insight into the methods he used to entice his young victims for his criminal gratification. The sentence handed down today is the only way to guarantee that he will never again victimize an innocent child.”
“The heinous crimes this pedophile committed are something his victims will have to deal with for the rest of their lives, but the community will now be safe from this menace,” said Special Agent in Charge John P. Kelleghan of Homeland Security Investigation (HSI) of Philadelphia. “He will be spending his life in prison as a result of the excellent cooperative efforts of the Limerick, Pennsylvania Police Department, HSI, the Montgomery County District Attorney’s Office and the U.S. Attorney’s Office of the Eastern District of Pennsylvania.”
The case was investigated by HSI, the Montgomery County District Attorney’s Office and the Limerick Township Police Department, and is being prosecuted by Assistant U.S. Attorney Michelle Rotella of the Eastern District of Pennsylvania.
Collegeville Man Gets Life Sentence for Preying on ChildrenRead the Press Release
PHILADELPHIA - Matthew Krapf, 45, of Collegeville, PA, was sentenced today to life in prison for 10 counts, each, of using or inducing a child to pose for child pornography, use of an interstate commerce facility to entice a minor to engage in sexual contact, three counts of distribution of child pornography, and one count of possession of child pornography. He was also sentenced to 10 years supervised release. Krapf pleaded guilty on October 28, 2014 to all 24 counts.
Krapf met his victims online and directed the conversation to sexually explicit chats. As early as December 2012, the defendant recorded Skype video chats (later recovered by police) that depicted the defendant directing one victim to masturbate for him. In the months that followed, the defendant met the victim at his parent’s home and engaged in sexual conduct from their very first encounter. A 13-year old victim met the defendant online and engaged in sexually explicit chats from the beginning of their communication, even after informing the defendant that he was just 13-years old. The defendant videotaped his encounters and later distributed the videos over the Internet.
In October 2013, Montgomery County detectives received consent to take over one victim’s identity and corresponded with the defendant on-line and via text messaging. The defendant, believing that he was speaking with the 14 year old victim, made arrangements to meet him at his parents’ home on November 2, 2013 to again have sex. Krapf was arrested by Montgomery County detectives after he entered the victim’s house.
When agents seized his computers, cell phones, and collection of DVDs and CDs, a forensic exam uncovered more than 2 million images of child pornography, including more than 100 videos that the defendant manufactured of the victim teenage boys. Krapf’s collection is believed to be the largest ever seized in the Eastern District of Pennsylvania.
Krapf admitted to meeting one victim on at least eight occasions during the summer of 2013 and engaging in oral sex, anal sex, and digital penetration. He also admitted that he knew the victim was just 14 years of age before he had any sex with him. Krapf told police that during the time he was engaging in the sexual abuse of this boy, he directed him to have sex with other juvenile boys, record the sex, and then send the recording to him, and to take nude and sexually explicit photographs of himself. Defendant Krapf also confirmed the July 2013 sexual abuse of the two minor boys, admitting that he engaged in oral and anal sex with these boys, knowing that they were minors, and videotaped the encounter. In his confession the defendant also admitted to sexually abusing at least four other underage boys. His abuse of these boys was over a nine year period, dating back to 2005.
“This predator used the internet to identify and begin the process of sexually exploiting his numerous victims,” said U.S. Attorney Zane David Memeger. “He then took full advantage of his vulnerable victims through a series of horrific sexual assaults over several years. His post-arrest admissions provide disturbing insight into the methods he used to entice his young victims for his criminal gratification. The sentence handed down today is the only way to guarantee that he will never again victimize an innocent child.”
“The heinous crimes this pedophile committed are something his victims will have to deal with for the rest of their lives, but the community will now be safe from this menace,” said John P. Kelleghan, HSI Philadelphia special agent in charge. “He will be spending his life in prison as a result of the excellent cooperative efforts of the Limerick Police Department, HSI, the Montgomery County District Attorney’s Office, and the U.S. Attorney’s Office.”
The case was investigated by Homeland Security Investigations, the Montgomery County District Attorney’s Office, and the Limerick Township Police Department, and is being prosecuted by Assistant United States Attorney Michelle Rotella.
Chubbuck Man Indicted for Wire Fraud and Theft of Government FundsRead the Press Release
BOISE - Travis John Attanasio, 53, of Chubbuck, Idaho, was indicted yesterday by a federal grand jury in Boise for wire fraud and theft of government funds, U.S. Attorney Wendy J. Olson announced.
The indictment alleges that between June 29, 2012, and October 30, 2014, Attanasio defrauded a disabled veteran and the federal government of $259,563.12. Attanasio served as the fiduciary for the veteran and instead of conserving the veteran’s funds and monthly benefits from the Veteran’s Administration and Social Security Administration, he spent them at various retail and online vendors. The indictment further alleges that during the time Attanasio received and spent the funds, he knew that the veteran lived in a state veteran’s home and was disabled.
The charge of wire fraud is punishable by up to 20 years in prison, a maximum fine of $250,000.00, and up to three years of supervised release. The charge of theft of government funds is punishable by up to 10 years in prison, a maximum fine of $250,000.00 and up to three years of supervised release.
The case is being jointly investigated by the U.S. Department of Veteran Affairs Office of Inspector General and the Social Security Administration Office of Inspector General with assistance from the Pocatello Police Department. The case is being prosecuted by a Special Assistant U.S. Attorney as part of a partnership venture between the Social Security Administration Office of General Counsel and the United States Attorney’s Office to prosecute social security fraud.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Chicago Man Sentenced to 10.5 Years in Prison for Sex Trafficking of Underage Girl in Sacramento AreaRead the Press Release
SACRAMENTO, Calif. — Marquist Piere Bradford, 29, of Chicago, was sentenced today to 10 and a half years in prison for sex trafficking of minors, U.S. Attorney Benjamin B. Wagner announced.
According to court documents, Bradford recruited a 15-year-old girl to travel from Fresno to Sacramento where she was used by Bradford as part of a prostitution business from January 19 through February 5, 2012. Bradford maintained an apartment in Rancho Cordova that he used as a base of operations for a prostitution business that spanned the Sacramento and Bay areas, as well as cities outside California. At least two of Bradford’s victims were under the age of 18. Bradford fled from Sacramento to the Chicago area after he became aware of law enforcement’s investigation of this case.
US Attorney Wagner stated: “The U.S. Attorney’s Office is committed to ensuring that the weakest and most vulnerable in our society receive the full protections to which they are entitled as Americans. Few are weaker and more vulnerable than the child victims of commercial sexual exploitation. This office is attacking the problem with federal, state and local law enforcement agencies. Since the beginning of 2011, 20 defendants have been sentenced in federal court for this offense with sentences ranging from five to 50 years in prison.”
“Exploiters like Bradford profit from trafficking vulnerable minors, using violence and threats to control the victims,” said Supervisory Special Agent Maria Johnson of the FBI's Sacramento field office. “The FBI and our task force partners are committed to recovering exploited minors and ensuring their traffickers face justice.”
Sacramento County Sheriff Scott Jones stated: “This resolution demonstrates the commitment of the Sacramento County Sheriff's Department in combatting human trafficking in our region, and the importance of ongoing collaborations between law enforcement agencies on all levels. Crimes involving human trafficking and the Internet occur in a dynamic environment that requires advanced investigative techniques. This case was an opportunity to stem the flow of crimes affecting human trafficking victims nationwide.”
This case was the product of an investigation by the Sacramento FBI Innocence Lost Task Force and the Sacramento County Sheriff’s Department. Assistant United States Attorney Matthew G. Morris prosecuted the case.
Charges Filed in Robberies of Pizza Delivery PeopleRead the Press Release
PHILADELPHIA - Titus Kellam, 20, and Kimberly Monfort, 24, both of Philadelphia, Pennsylvania, were charged today by indictment in a scheme involving six armed robberies of pizza delivery employees in Philadelphia, announced United States Attorney Zane David Memeger. Kellam is charged with committing all six robberies, between November 26, 2014 and December 21, 2014, and with brandishing a firearm in two of those robberies. Monfort is charged in one robbery. The charges include Hobbs Act robbery and using, carrying, and brandishing a firearm during a crime of violence.
The indictment alleges that on November 26, 2014, Kellam and Monfort robbed a pizza delivery employee of Key Pizza, located at 1846 S. 12th Street, of cash, food, and a cell phone belonging to that employee, by means of actual and threatened violence. Kellam is further charged in the armed robberies of pizza delivery employees of: Wolf Street Pizza, located at 2135 Wolf Street; City Pizza, located at 100 Snyder Avenue; Uncle Oogie’s Pizzeria, located at 2010 Gerritt Street; Not Just Pizza, located at 2240 S. 11th Street; and Isabella Pizza, located at 1824 East Passyunk Avenue, all in Philadelphia, Pennsylvania.
If convicted, Kellum faces a maximum possible statutory sentence of life in prison, with a statutory mandatory minimum sentence of 32 years imprisonment; Monfort faces a maximum statutory sentence of 20 years in prison.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Yvonne Osirim.
Canada Extradites Second Drug Trafficking Defendant to Colorado for ProsecutionRead the Press Release
DENVER – Javier Batista-Cervantes, age 35, who was until today in Canada, was extradited from Canada to Denver, Colorado so he can face drug trafficking charges, U.S. Attorney John Walsh and Drug Enforcement Administration (DEA) Denver Division Special Agent in Charge Barbra Roach announced. Batista-Cervantes was indicted, along with six others, in 2010 for the importation of cocaine from Mexico. The cocaine was brought to Colorado, where it was then later sent to Canada. The defendant made his initial appearance today before a U.S. Magistrate Judge Michael E. Hegarty. The defendant will next be in court on May 19, 2015 at 2:00 p.m. for arraignment and detention.
According to the indictment, Batista-Cervantes, along with others, conspired to import into the United States from Mexico, and then export from the United States into Canada, cocaine, a Schedule II Controlled Substance. The defendant also faces three counts of using a telephone to facilitate the commission of a drug trafficking felony. If convicted of conspiracy, he faces not less than 10 years, and up to life in federal prison, as well as up to a $4,000,000 fine. If convicted of using a telephone for drug trafficking, the defendant faces not more than 4 years imprisonment, and up to a $250,000 fine, per count, for each of the three counts.
The investigation dates back to when a co-defendant, Calvin Wayne Skidmore, was arrested in 2010 at the Del Bonita Port of Entry by U.S. Customs and Border Protection officers. A search of his vehicle yielded 46 packages of cocaine, equating to 16.5 kilograms, concealed in hidden compartments.
In addition to Batista-Cervantes, two other people named in the indictment remain fugitives. Co-defendant Hector Armondo Chavez was extradited to Colorado from Canada on January 16, 2015. Defendant Hernandez-Renteria is deceased. Dionisio Salgado, a U.S. citizen, pled guilty in a related case in federal court in Colorado and was sentenced to serve 10 years in prison. Canadian citizen Calvin Wayne Skidmore pled guilty in a related case in the District of Montana and was also sentenced to 10 years in prison.
This case was investigated by the DEA. The Lethbridge Regional Police Service, a part of the Alberta Law Enforcement Response Teams in Canada as well as the Royal Canadian Mounted Police, assisted U.S. government authorities. The U.S. Marshals Service assisted in the transportation of Batista-Cervantes from Canada to Colorado. The Department of Justice’s Office of International Affairs provided assistance in this matter. The case is being prosecuted by Assistant U.S. Attorney Michele Korver of the U.S. Attorney’s Office, District of Colorado.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
California Man Sentenced to Federal Prison for Failing to Register as a Sex Offender in New MexicoRead the Press Release
ALBUQUERQUE – Eric Leo Alexander, 37, of Anaheim, Calif., was sentenced today in federal court in Las Cruces, N.M., to 46 months in prison followed by five years of supervised release for violating the Sex Offender Registration and Notification Act (SORNA). The sentence was announced by U.S. Attorney Damon P. Martinez and U.S. Marshal Conrad E. Candelaria.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations.
Alexander was arrested in Anaheim, Calif., on Jan. 10, 2014, on a criminal complaint charging him with violating SORNA by failing to register as a sex offender after traveling in interstate commerce. Alexander subsequently was transferred to New Mexico to face the charges in this case. According to the indictment, which was filed on May 14, 2014, Alexander violated SORNA by failing to register as a sex offender in Doña Ana County, N.M., between Sept. 1, 2013 and Sept. 23, 2013.
Trial against Alexander began Sept. 15, 2014, and concluded the next day when the jury returned a verdict of guilty on the sole count of the indictment. The evidence at trial established that the U.S. Marshals Service initiated an investigation into Alexander in late Sept. 2013, after California authorities requested their assistance in locating and apprehending Alexander. The California authorities reported that Alexander, a fugitive who had violated the conditions of his probation, was believed to be residing in Las Cruces.
Through investigation, the U.S. Marshals Service learned that Alexander’s criminal history included a 2012 conviction for sexually assaulting a minor for which he was sentenced to four years in a California state prison. After he was convicted, Alexander was twice informed of his requirements to register as a sex offender. Alexander also signed forms acknowledging that he was required to register as a sex offender for the rest of his life and update his registration annually. Although Alexander registered as a sex offender in California after he was released from prison in Aug. 2013, he then traveled to Las Cruces without informing the California authorities of his intention to leave.
The U.S. Marshals Service’s investigation revealed that as of Sept. 23, 2013, Alexander had been living at a Las Cruces residence with a woman and her two children for three weeks. It also revealed that Alexander had not registered with the Doña Ana County Sheriff’s Department within three days of moving to New Mexico as required by SORNA.
U.S. Attorney Damon P. Martinez praised the efforts of the U.S. Marshals Service in the investigation and the prosecution of the case. He also thanked the Doña Ana County Sheriff’s Department, Tustin (Calif.) Police Department and Santa Ana (Calif.) Police Department for their assistance in the investigation.
The case was prosecuted by Assistant U.S. Attorneys Amanda Gould and Luis A. Martinez of the U.S. Attorney’s Las Cruces Branch Office.
CBP Officer Charged with Collecting Pay for Hours not WorkedRead the Press Release
LAREDO, Texas - Federal charges have been filed against Jesus Javier Garcia Jr., of Laredo, alleging he committed larceny by wrongfully collecting more than $40,000 in government pay for hours he did not work, announced United States Attorney Kenneth Magidson.
The indictment was returned under seal May 12, 2015, and unsealed today upon his arrest. Garcia, 34, is expected to make his initial appearance before U.S. Magistrate Judge J. Scott Hacker tomorrow at 9:00 a.m.
If convicted, he faces up to 10 years in prison and a possible $250,000 maximum fine.
The investigation leading up to the indictment was conducted by Customs and Border Protection - Office of Internal Affairs and the FBI-Border Corruption Task Force. Assistant U.S. Attorney Christopher S. Coker is prosecuting this case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Butler County Man Pleads Guilty to Stealing $1.2 Million from Presbyterian ManorsRead the Press Release
WICHITA, KAN. – A Butler county man pleaded guilty Thursday to a federal charge of stealing more than $1.2 million from Presbyterian Manors of Mid-America, a Wichita-based company that owns assisted living centers in Kansas and Missouri, U.S. Attorney Barry Grissom said.
In Kansas, the company has facilities in Wichita, Topeka, Kansas City, Olathe, Lawrence, Emporia, Salina, Dodge City, Fort Scott, Parsons, Arkansas City, Newton, Sterling and Clay Center.
Brent A. Shryock, 44, Augusta, Kan., pleaded guilty to one count of mail fraud. In his plea, he admitted the crime occurred while he was employed as information systems director for the company. He was in charge of all computers, telephones, video information and electronic equipment, including the purchase of new or replacement equipment for PMMA, Presbyterian Manor, Aberdeen and Ashfield facilities.
In his plea, Shryock said he created four fictitious companies and used them to submit fraudulent invoices to PMMA. As a result, the company was defrauded out of more than $1.2 million.
Sentencing is set for Aug. 6. The parties have agreed to recommend a sentence of three years in federal prison and restitution to be determined by the judge.
Shryock’s wife and co-defendant, Lori A. Shryock, is scheduled for a change of plea hearing May 22.
Grissom commended the FBI and Assistant U.S. Attorney Alan Metzger for their work on the case.
Bureau of Prisons Employee Who Was Also A Union Official Sentenced for Making False Statements on DocumentsRead the Press Release
DENVER – Aide Spade, age 49, of Evergreen, was recently sentenced by Chief U.S. District Court Judge Marcia S. Krieger to 3 years’ probation and ordered to pay restitution of $14,234.18 plus an additional $5,000 fine for making and using a false document knowing it contained fraudulent statements and entries, the U.S. Attorney’s Office, the Department of Justice Office of the Inspector General (DOJ OIG), and the U.S. Department of Labor’s Office of Labor-Management Standards (OLMS) announced.
Spade was indicted by a federal grand jury in Denver on June 4, 2014. She pled guilty before Chief Judge Krieger on October 14, 2014. She was sentenced on May 11, 2015.
According to the stipulated facts contained in the plea agreement, Spade was the Treasurer of the American Federation of Government Employees (AFGE) Local 709 and an employee of the Bureau of Prisons, assigned to the Federal Correctional Institution in Englewood. As Treasurer, Spade was responsible for maintaining all financial records of the union, preparing the union’s annual financial reports, and keeping records of all financial transactions. Spade used her position as treasurer to embezzle over $59,000 that the Union had received in dues payments from its members. Overall, the defendant issued 33 unauthorized cashier’s checks to herself totaling $46.489.18 and made unauthorized cash withdrawals for her own personal use totaling $12,680. She also submitted forms to the U.S. Department of Labor on which she knowingly and willfully underreported the amount of allowances and disbursements the Union paid to her.
Her embezzlement was discovered when, in April 2012, the AFGE Local 709 membership requested financial records from Spade so they could conduct an audit. Spade delayed, which resulted in AFGE’s National office making an identical request in November of 2012. She then turned over all the records to the Union President and resigned her post with the union and her position with the Bureau of Prisons. The records included a folder with copies of checks and withdrawal slips payable to Spade totaling $40,676.86.
On November 18, 2013, agents of the Department of Labor’s Office of Labor-Management Standards, and the Department of Justice Office of the Inspector General interviewed Spade. During the interview, it was determined that Spade had embezzled union funds for her own personal use, including car payments, gas, and other expenses. After resigning, Spade has paid $44,935.00 to the union as restitution for her embezzlement, leaving a total of $14,234.18 as restitution still due and owing.
“Officials who victimize their unions and union members by stealing funds will face felony prosecution,” said U.S. Attorney John Walsh. “The consequence in this case is that the defendant is now a felon who had to resign from her union position as well as her career service job.”
“The Office of the Inspector General will continue its efforts to ensure that Department of Justice employees who break the law and fail to act with integrity are held accountable and brought to justice,” said Special Agent in Charge Norman Lau of the DOJ OIG.
“This sentence sends a clear message that there are consequences for union officers who break the trust placed in them to be good stewards of union funds,” said Emily Prosise, Denver-St. Louis District Director of the Office of Labor-Management Standards. “The Department of Labor will continue to protect workers by seeking appropriate punishment of, and restitution from, anyone attempting to use their position for personal financial gain at the expense of union members.”
This case was investigated by the Department of Justice Office of the Inspector General and the Department of Labor’s Office of Labor-Management Standards.
The defendant was prosecuted by Special Assistant U.S. Attorney Daniel Burrows and Assistant U.S. Attorney Anna Edgar.
Bossier City woman sentenced to 20 months in prison for filing false tax returnsRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Bossier City woman was sentenced Monday to 20 months in prison for filing false tax returns.
Susan Santoro, 40, of Bossier City, La., was sentenced by U.S. District Judge Elizabeth E. Foote on one count of making or subscribing a false tax return. She was also sentenced to one year of supervised release and ordered to pay restitution of $308,213 to Top Dollar Pawn in Bossier City, $88,347 to the Internal Revenue Service and $44,554.63 to the Louisiana Department of Revenue. According to evidence presented at the January 26, 2015 guilty plea, Santoro, who was the general manager of Top Dollar Pawn in Bossier City from 2009 to 2011, embezzled more than $300,000 from the company. She embezzled the money by falsifying records, which she regularly reviewed and reconciled. A review of her personal bank accounts revealed numerous large, unexplained cash deposits that far exceeded her income from Top Dollar Pawn. The IRS considers the money, which Santoro did not report on her tax returns, as income.
“We are pleased with the sentencing of Ms. Santoro and will continue to work with our federal partners and the U.S. Attorney’s Office to vigorously pursue those who engage in financial crimes,” stated Special Agent in Charge of Internal Revenue Service Criminal Investigation – New Orleans Field Office, Jerome R. McDuffie. “Ms. Santoro used her place of employment to engage in illegal activity and our office will continue to investigate and prosecute those who engage in these actions.”
The FBI and IRS conducted the investigation. Assistant U.S. Attorneys Brandon B. Brown and Cytheria D. Jernigan prosecuted the case.
Bonsall Man Pleads Guilty in Illegal Firearms Trafficking OperationRead the Press Release
SAN DIEGO – Clay Bautista-Marquez of Bonsall pleaded guilty in federal court this morning to a firearms trafficking violation, admitting that he and a co-conspirator sold six untraceable AR-15-style semi-automatic rifles for almost $6,000, and that the guns had been built from unfinished lower receivers.
According to his plea agreement, Bautista-Marquez pleaded guilty before U.S. Magistrate Judge Jill L. Burkhardt to engaging in the business of manufacturing and dealing in firearms and illegally possessing three rifles and a shotgun to protect his marijuana manufacturing and trafficking operation.
Bautista-Marquez is scheduled to be sentenced before U.S. District Judge William Q. Hayes on August 31, 2015 at 9 a.m.
The case stemmed from an investigation that resulted in the seizure of more than 50 firearms and culminated in March with the arrests of Bautista-Marquez and four other men. Christian Romero, Matthew Nutt and Ruben Tovar-Ordonez were charged with participating in a scheme to manufacture and traffic in firearms. Michael Martin was charged with possession of a firearm – specifically two silencers - not registered to him in the National Firearms Registration and Transfer Record.
Romero was the first to plead guilty on April 28, 2015. In his plea agreement, Romero admitted to manufacturing and selling six AR-15 type semi-automatic rifles bearing no manufacturer’s markings or serial numbers and built from unfinished lower receivers between the dates of December 8, 2014, and March 6, 2015. Like Bautista-Marquez, Romero did not have a license to manufacture or deal in firearms at the time. Romero is scheduled to be sentenced by Judge William Q. Hayes on July 20, 2015.
Cases of the remaining defendants are pending.
During the searches and throughout the investigation, federal agents seized more than 50 firearms, including silencers, a short-barreled shotgun, unfinished lower receivers and AR-15-style homemade assault rifles. Some of the firearms were stolen, or had obliterated serial numbers, or both. Agents also found thousands of rounds of ammunition and numerous unfinished lower receivers commonly known as ULRs.
As part of his plea agreement, Bautista-Marquez has agreed to forfeit to the government three rifles, a shotgun and ammunition and $3,860, all of which were seized during searches.
DEFENDANT Case Number: 14cr3360 Clay Bautista-Marquez Age: 31 Bonsall, California CHARGESEngaging in the Business of Dealing in Firearms without a License, in violation of 18 USC 922(a)(1)(A)
Maximum Penalties: Five years imprisonment, a fine of not more than $250,000, and a term of supervised release of not more than 3 years.Possession of Firearms in furtherance of a drug trafficking crime, in violation of Title 18, USC 924(c)(1)(A). Maximum Penalties: Life in prison, with a mandatory minimum 5 years in prison and maximum fine of $250,000 fine
DEFENDANT Case Number: 15mj0721 *Christian Romero Age: 22 Bonsall, California CHARGESEngaging in the Business of Dealing in Firearms without a License, in violation of 18 USC 922(a)(1)(A)
Maximum Penalties: Five years imprisonment, a fine of not more than $250,000, and a term of supervised release of not more than 3 years.*Romero has pleaded guilty
DEFENDANT Case Number: 15mj0740 Matthew Nutt Age: 29 Escondido, California CHARGESEngaging in the Business of Dealing in Firearms without a License, in violation of 18 USC 922(a)(1)(A)
Maximum Penalties: Five years imprisonment, a fine of not more than $250,000, and a term of supervised release of not more than 3 years.
DEFENDANT Case Number: 14cr3360 Ruben Tovar-Ordonez Age: 45 Temecula, California CHARGESUnlawful Dealing in Firearms, in violation of18 USC 922(a)(1)(A). Maximum Penalties Five years imprisonment, a fine of not more than $250,000, and a term of supervised release of not more than 3 years.
DEFENDANT Case Number: 15mj0741 Michael Martin Age: 38 Bonsall, California CHARGESPossession of a Firearm not Registered to him in the National Firearms Registration and Transfer Record, 26 U.S.C. § 5861(d). Maximum Penalties: Ten years in prison, $10,000 fine.
INVESTIGATING AGENCIESDrug Enforcement Administration
Bureau of Alcohol, Tobacco, Firearms and Explosives
Internal Revenue Service
Bureau of Land Management
San Diego Police Department
Immigration and Customs Enforcement –Enforcement and Removal Operations
United States Marshal’s Service
San Diego Sheriff’s Department*A complaint or indictment are not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Bolingbrook Man Sentenced to 24 Months for Attempting to Illegally Export Thermal Imaging Camera to PakistanRead the Press Release
CHICAGO — A Bolingbrook man was sentenced today to 24 months in federal prison for violating U.S. export laws by attempting to ship a thermal imaging camera from his company in Schaumburg to a company in Pakistan without obtaining a license from the U.S. Commerce Department, federal law enforcement officials announced today. The defendant, Bilal Ahmed, 34, of Bolingbrook, Illinois, was also ordered to complete a term of two years of supervision after his release by U.S. District Judge Rebecca R. Pallmeyer. Ahmed was ordered to report to the Federal Bureau of Prisons on July 17, 2015. Ahmed pled guilty to one count of willfully violating export control regulations, specifically the International Emergency Economic Powers Act, between June 2009 and March 2014.
Ahmed was the owner, president, and registered agent of Trexim Corporation, an Illinois corporation based in Schaumburg, which was in the business of purchasing items for export from the United States. The defendant was regularly involved in the negotiation, purchase, and export of materials from United States manufacturers to overseas locations, including Pakistan. The defendant received orders for goods from Pakistani entities, including Pakistan’s Space and Upper Atmosphere Research Commission, also known as SUPARCO, and then purchased and exported those items to the Pakistani entities, including to SUPARCO. Ahmed knew that the export of goods, particularly the export of goods designated as “dual use” items, was controlled in some instances by the Department of State and the Department of Commerce and was aware that certain items required a license issued from either the Department of State or the Department of Commerce in order to be exported from the United States.
The items exported by Ahmed included, among other things, a FLIR HRC-U thermal imaging camera, carbon fiber to make “bullet proof-vests,” and microwave laminate, all to Pakistan. Each of those items was on a Commerce Department list of controlled export goods for reasons of national security and regional stability. A license was required to ship the items to Pakistan. The defendant exported and attempted to export those items to Pakistan without ever having applied for such a license.
“For a period of at least four years, defendant made it his business to export items from the United States to overseas locations, without obtaining the necessary licenses and approvals when required. In fact, based just on the purchase orders recovered from defendant’s computer at the time of his arrest, purchase orders reflected the export of approximately 203 items from the United States to Pakistan,” stated Assistant U.S. Attorney Bethany Biesenthal in the government’s sentencing memorandum.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Edward Holland, Supervisory Special Agent of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. The Justice Department’s National Security Division provided assistance in the case.
The government was represented by Assistant U.S. Attorney Bethany Biesenthal.
Belle Chasse Man Sentenced for Misuse of a Mariner LicenseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that WILLIE ENGLISH, age 42, of Belle Chasse, was sentenced today for his misuse of a federal license.
U.S. District Judge Mary Ann Vial Lemmon sentenced ENGLISH to three years probation with six months home detention.
According to the court documents, in November 2008, ENGLISH used a fake U.S. Coast Guard Merchant Mariner’s License, purporting to be a Master of vessels not more than 100 gross tons, to maintain employment as a vessel captain at Bud’s Boat Rental in Belle Chase, Louisiana. ENGLISH admitted he made the license while he was a deckhand onboard another vessel for another employer.
U.S. Attorney Polite praised the work of the Coast Guard Investigative Service in investigating this matter. Assistant United States Attorney Emily K. Greenfield was in charge of the prosecution.
Baltimore Robber Exiled to More Than 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Robert Collins, age 49, of Baltimore, Maryland, today to 125 months in prison followed by five years of supervised release for robbery, attempted robbery, and carrying and brandishing a firearm during a robbery.
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; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to his plea agreement, on December 15, 2013, Collins walked into the New York Fried Chicken Restaurant at 542 E. Patapsco in Baltimore. He pointed a handgun at the cashier, demanded that the register be opened and took about $290.
That same day, Collins walked into the Italiano’s Restaurant at 2229 Washington Boulevard in Baltimore. He pointed a handgun at a cashier and demanded money. The cashier refused to cooperate. Collins grabbed three iPhones belonging to other Italiano’s employees and fled. Collins was apprehended and the three iPhones were recovered. Additionally, a .380 caliber pistol was found near Collins.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Scott A. Lemmon, who prosecuted the case.
Baltimore Robber Exiled to 20 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Sharmaine Christopher Diggs, age 35, of Baltimore, today to 20 years in prison followed by five years of supervised release for robbery, and two counts of using and brandishing a firearm during a robbery. Judge Russell also entered an order that Diggs pay restitution of $19,000.
Late yesterday, following a six day trial, a federal jury convicted Diggs’ co-defendant Paul Chance, age 28, of Baltimore, Maryland, of conspiring to commit robbery, three counts of robbery, four counts of possessing and brandishing a firearm in furtherance of robbery, and being a felon in possession of a firearm.
The sentence and conviction were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Baltimore County State’s Attorney Scott Shellenberger; Baltimore City State’s Attorney Marilyn Mosby; Baltimore Police Commissioner Anthony W. Batts; Anne Arundel County Police Chief Tim Altomare; and Anne Arundel County Police Chief Tim Altomare.
According to Diggs’ plea agreement, on March 29, 2013, Diggs and Chance arrived at the Ashland Café on York Road in Cockeysville, Maryland. Both brandished semi-automatic handguns at the owner, who they forced inside his business and bound his hands with duct tape. They threatened to shoot the owner if he did not provide money, and pistol-whipped him. The defendants took $4,000 and a .45 caliber weapon that was in the kitchen safe, and another $15,000 from a downstairs safe. The robbers then forced the owner into the walk-in freezer, and left.
On May 3, 2013, Diggs and another co-conspirator came back to rob the café a second time. Diggs wore a mask and carried a duffle bag and a handgun. The café’s employees called the police. The robbers’ vehicle was stopped a short distance away. Diggs fled, but was located an hour later in the woods. Detectives executed a search warrant and recovered the duffle bag containing a ski mask, duct tape and the handgun and ammunition that was stolen in the first robbery.
According to trial testimony, Chance, armed with a firearm, also robbed the following businesses: Pizza Hut on Annapolis Road in Severn, Maryland on April 7, 2013; the Hobbit Liquor Store on Bowleys Lane in Baltimore on April 26, 2013; and attempted to rob the Olive Garden on Perry Hall Boulevard in Baltimore on April 29, 2013. The jury also found that on April 19, 2013, Chance possessed a semi-automatic rifle and a pump action shotgun. Because of a prior felony conviction, Chance was prohibited from possessing a firearm.
Judge Russell has scheduled sentencing for Paul Chance on August 24, 2015, and he faces a mandatory minimum sentence of 82 years in prison.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore City, Baltimore County and Anne Arundel County Police Departments and Baltimore City, Baltimore County and Anne Arundel County State’s Attorney’s Offices for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Bonnie S. Greenberg and Patricia C. McLane, who prosecuted the case.
Baltimore City Police Officer Charged with TheftRead the Press Release
Baltimore, Maryland – Baltimore City Police officer Maurice Lamar Jeffers, age 47, of Savage, Maryland, has been charged by criminal complaint with theft of government property and stealing property as a federal officer. The criminal complaint was returned on Friday, May 8, 2015 and unsealed today.
The criminal complaint 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; and Commissioner Anthony W. Batts of the Baltimore Police Department.
“The affidavit alleges that agents carried out an undercover operation and obtained a video recording of the defendant stealing cash while he believed he was executing a search warrant,” said U.S. Attorney Rod J. Rosenstein. “I want to thank the officers of the Baltimore Police Department and other agencies that assisted in this investigation.”
According to the criminal complaint, Jeffers has been a sworn member of the Baltimore Police Department for the last 12 years, and is currently assigned as a Task Force Officer (TFO) to the U.S. Marshals’ Capital Area Regional Fugitive Task Force (CARFTF). As a TFO, Jeffers received special deputation to execute arrest and search warrants supporting the federal task force. Jeffers is responsible for locating and arresting offenders who have active local and federal arrest warrants and assisting in locating individuals for other jurisdictions and agencies upon request.
The criminal complaint alleges that Jeffers stole approximately $3,000 on March 10, 2015, while Jeffers was on official business as a TFO for CARFTF. According to the affidavit filed in support of the criminal complaint, law enforcement conducted a covert operation in which agents rented a hotel room and set up surveillance equipment. Law enforcement also placed $3,200 in cash throughout the room – a portion of the money was placed in pain view and the rest was hidden.
At the direction of law enforcement involved in this investigation, Jeffers and other members of CARFTF were told that the subject of a fictitious drug investigation was staying at the hotel room. Jeffers and CARFTF members were directed to secure the subject and the hotel room so that law enforcement could later execute a search warrant in the subject’s hotel room.
According to the criminal complaint, Jeffers and another CARFTF member went to the hotel room to secure it. After Jeffers and the other TFO conducted a security check of the room the other TFO left to report that the room was secured. According to the criminal complaint, after the other TFO left, audio and video surveillance captured Jeffers searching the room and placing the money into his pants pockets. After Jeffers and the other CARFTF members left, law enforcement involved in this investigation conducted an inventory of the hotel room. As seen on the video, the prerecorded funds that had been planted in the hotel room – totaling $3,000 – were gone. The stolen cash was not submitted as evidence, as it should have been if it had been lawfully seized.
Jeffers faces a maximum sentence of 10 years in prison for each of the two theft counts. An initial appearance was held on May 8, 2015, in U.S. District Court in Baltimore. Jeffers was released under the supervision of U.S. Pretrial Services.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the Baltimore FBI Public Corruption Task Force, which includes Agents and law enforcement officers from the IRS, the Baltimore Police Department, the Prince George’s County Police Department and the Baltimore FBI, for their work in the investigation, and recognized the U.S. Marshals Service for its assistance. Mr. Rosenstein thanked Assistant United States Attorney David I. Sharfstein, who is prosecuting the case.
Attorney General Loretta E. Lynch Appoints U.S. Attorney Wagner to Co-chair White Collar/Fraud SubcommitteeRead the Press Release
SACRAMENTO, Calif. — The United States Attorney’s Office announced today that Attorney General Loretta E. Lynch has appointed U.S. Attorney Benjamin B. Wagner to serve as co-chair of the White Collar/Fraud Subcommittee of the United States Department of Justice’s Attorney General’s Advisory Committee (AGAC).
Created in 1973, the AGAC provides advice and counsel to the Attorney General and other senior leaders in the U.S. Department of Justice on policy, management and operational issues, helping to shape policies to accomplish the Department’s core mission of serving justice. The White Collar/Fraud Subcommittee reports to the AGAC and represents the voice of the 93 U.S. Attorneys in matters relating to white collar crime. U.S. Attorney Wagner’s co-chair on the White Collar/Fraud Subcommittee is Melinda Haag, the U.S. Attorney for the Northern District of California.
Wagner previously served for three years on the AGAC after being appointed by Attorney General Eric Holder in May 2010. Wagner continues to serve on several AGAC subcommittees, including those focusing on Civil Rights and Terrorism and National Security.
Arizona Man Sentenced for Communicating ThreatsRead the Press Release
GREENSBORO, N. C. - An Arizona man was sentenced to 30 months in prison for communicating interstate threats, announced United States Attorney Ripley Rand.
Aaron Jerome Khan, 27, of Tucson, Arizona, pleaded guilty on December 1, 2014, to one count of interstate communication of a threat with intent to injure, an offense punishable by a maximum of 5 years imprisonment. He was sentenced on May 12, 2015, by the Honorable Catherine C. Eagles to 30 months imprisonment followed by 3 years supervised release.
Khan made threatening communications to the victim, a person with whom Khan had had a dating relationship while they both lived in Arizona, by sending numerous e-mail and text messages to the victim between December 2011 and October 2014. After the dating relationship ended, the victim obtained a no-contact order in Arizona and later began attending school in North Carolina. Khan continued to send the victim harassing messages via email and text message, which she first reported to campus security officials on December 9, 2011. Campus security officers contacted Khan to ask him to stop sending the victim messages; Khan said he would do so, but he continued to harass the victim with messages, including threats to kill the victim. In some messages, Khan included images of handguns. After Khan found out that the victim was attending school in North Carolina, he told the victim that that he was coming to North Carolina to see her. Airline records show that Khan flew to Raleigh on October 2, 2014. While traveling to North Carolina, Khan repeatedly texted and emailed the victim of his intention to find her. The victim notified the police, and Khan was arrested on state cyberstalking charges upon his arrival in North Carolina.
“No one deserves to be subjected to this kind of deplorable behavior, and our office will not tolerate violence against intimate partners,” said United States Attorney Rand. “We will continue to work effectively with our federal, state, and local partners to hold abusers accountable for their criminal acts and to help domestic violence victims take their lives back.”
This case was prosecuted by Assistant United States Attorney Anand P. Ramaswamy and investigated by the Town of Chapel Hill Police Department and by the University of North Carolina Department of Public Safety.
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Ambulance Companies Pay $595,000 to Settle Allegations of Medically Unnecessary Ambulance TransportationRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that EFK OF CONNECTICUT, INC., d/b/a NELSON AMBULANCE SERVICE, located in North Haven, and SKMP ENTERPRISES, INC., d/b/a ACCESS AMBULANCE SERVICE, located in Bridgeport, have entered into a civil settlement agreement with the government in which they will pay $595,000 to resolve allegations that they improperly billed the Medicare and Medicaid programs.
The government alleges that NELSON AMBULANCE SERVICE (“NELSON”) and ACCESS AMBULANCE SERVICE (“ACCESS”), routinely billed for non-emergency, scheduled ambulance services that were not medically necessary. The medically unnecessary ambulance services were provided to Medicare and Medicaid beneficiaries being transported to and from their regularly scheduled dialysis treatments. Patients transported by NELSON and ACCESS were typically picked up at their residences or at nursing homes and transported by ambulance to and from dialysis treatment three times per week.
Relevant regulations indicate that medical necessity for ambulance transport is established when the patient’s condition is such that the use of any other means of transportation is contraindicated. The regulations indicate that the patient must be “bed confined” or otherwise have a medical condition such that transportation by ambulance is medically required.
The government alleges that NELSON and ACCESS, which have the same ownership, regularly transported patients by ambulance, at an average cost of approximately $380 for each round trip, when the patients did not meet the criteria of being “bed confined” or otherwise have a medical condition requiring transportation by ambulance. Some of the same patients NELSON and ACCESS regularly transported by ambulance were transported to and from other doctor’s visits utilizing a wheelchair van, at an average cost of only $60 for each round trip.
To resolve their liability, NELSON and ACCESS will pay $595,000 for conduct occurring between January 2008 and August 2013.
In entering into the civil settlement agreement, NELSON and ACCESS did not admit liability.
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot and Auditor Kevin Saunders.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.
A Miami-Dade Resident was Sentenced for Selling Personal Identifying Information to be used in a Tax Refund Fraud SchemeRead the Press Release
A Miami-Dade County resident was sentenced to 12 months and one day in prison, followed by two years of supervised release for selling personal identifying information (PII), including stolen names, dates of birth, and social security numbers belonging to real individuals (most of whom were from the State of Rhode Island), to be used in a tax refund fraud scheme.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Jeff Pierre Michel, 25, previously pled guilty to one count of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2).
According to court documents, on April 8, 2013, a confidential law enforcement source arranged for Michel to sell PII to an undercover law enforcement officer. On April 9, 2013, Michel sold 100 pieces of PII, belonging to 100 different individuals, to the undercover law enforcement officer in exchange for $500. On April 22, 2013, Michel sold additional pieces of PII (less than the previously agreed upon amount of 150 pieces of PII) to an undercover law enforcement officer in exchange for $800. In order to compensate for the missing PII, Michel provided the undercover law enforcement officer with a TurboTax username and password. Michel intended that the PII would be used, along with the TurboTax username and password, to commit stolen identity income tax refund fraud over the internet.
Mr. Ferrer commended the investigative efforts of ICE-HSI and IRS-CI. This case was prosecuted by Assistant U.S. Attorney Frank R. Maderal.
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.
Wednesday 13 May 2015
World Triathlon Corporation (Ironman) Forfeits More Than $2.7 Million in Lottery ProceedsRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that the World Triathlon Corporation (Ironman) has agreed to forfeit $2,761,910 in lottery proceeds to the United States government. According to a sworn complaint filed in U.S. District Court in Tampa, Ironman illegally charged athletes for a chance to win the opportunity to compete in the “Ironman World Championship,” held each October in Hawaii.
According to the complaint, Ironman, the company that organizes, promotes, and licenses “Ironman” triathlons around the world, has agreed to forfeit to the United States lottery proceeds that it has earned since October 24, 2012. Ironman charged athletes, who did not otherwise qualify, $50 to enter lotteries for the chance to compete in the Ironman World Championship. Thousands of athletes purchased multiple entries. Ironman would have been permitted to give away the opportunity to compete in the race, but violated the law when it charged athletes money for the chance to win.
Ironman cooperated fully in the investigation and voluntarily provided all information necessary to allow the parties to promptly resolve the matter.
The case was investigated by Assistant United States Attorneys James A. Muench and Natalie Hirt Adams, with assistance from the Federal Bureau of Investigation.
Woman Sentenced to 33 Months for Selling Stolen Merchandise on the InternetRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced Maria Steele Vera, 60, of Dallas, Texas to 33 months in prison and to one year of supervised release for selling stolen merchandise on the Internet, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. In April 2014, Vera pleaded guilty to wire fraud in connection with her scheme. Judge Conrad also ordered Vera to pay more than $70,000 in restitution.
Acting U.S. Attorney Rose is joined in making today’s announcement by Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division.
According to filed court documents and court proceedings, from 2009 to 2013, Vera shoplifted items from numerous hobby and craft retail stores in Mecklenburg County and elsewhere, which she then listed for sale on E-bay. Court records indicate that Vera created various E-bay seller accounts and sold the stolen items below retail value. Court records also show that this scheme netted Vera between $400,000 and $1,000,000. According to court records, when law enforcement executed a search warrant at Vera’s residence, they recovered 70 plastic crates full of stolen craft and scrapbooking products, as well as 50 flat rate mailing boxes.
Following the sentencing hearing Vera was released on bond. She will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
Acting U.S. Attorney Rose credited the U.S. Secret Service for the investigation leading to today’s sentence.
Assistant U.S. Attorney Kevin Zolot of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Virginia Department of Juvenile Justice Employee Pleads Guilty to BriberyRead the Press Release
RICHMOND, Va. – Connie E. Richardson, 64, of Richmond, Virginia, pleaded guilty today to a criminal information charging her with bribery concerning a program receiving federal funds.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the Richmond Division of the Federal Bureau of Investigation, made the announcement after the plea was accepted by U.S. Magistrate Judge Roderick Young.
Richardson faces a maximum penalty of 10 years in prison when she is sentenced on July 30, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
According to a statement of facts filed with the plea agreement, Richardson was employed by the Virginia Department of Juvenile Justice (VDJJ) as its Runaway Coordinator. In that role, she was responsible for administering services related to the transport of juveniles from one state to another. From October 2010 through February 2015, Richardson accepted over $30,000 from the owner of a security company that provided transportation and escort services for VDJJ. In return, Richardson steered the vast majority of VDJJ’s transportation and escort requests to the company and she knowingly approved inflated and falsified invoices submitted by the company. From October 2010 through February 2015, VDJJ paid this security company over $469,000 for transportation and escort services.
This case was investigated by Federal Bureau of Investigation and the Virginia State Police Assistant U.S. Attorney Katherine Lee Martin is prosecuting the case on behalf of the United States.
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. 3:15cr78.
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United States Reaches $22 Million Settlement Agreement with CVS for Unlawful Distribution of Controlled SubstancesRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces today that CVS Health has agreed to pay $22 million to resolve allegations that two of its retail stores in the City of Sanford distributed controlled substances based on prescriptions that had not been issued for legitimate medical purposes by a health care provider acting in the usual course of professional practice. CVS acknowledged that its retail pharmacies had a responsibility to dispense only those prescriptions that were issued based on legitimate medical need. CVS further acknowledged that certain of its retail stores dispensed certain controlled substances in a manner not fully consistent with their compliance obligations under the Controlled Substances Act and the related regulations.
The Controlled Substances Act authorizes the United States to seek civil penalties for a pharmacy’s failure to fulfill its corresponding responsibility to dispense only those prescriptions that have been issued for a legitimate medical purpose by a health care provider acting in the usual course of professional practice. Knowingly filling an illegitimate prescription subjects a pharmacy to civil penalties under the Controlled Substances Act.
This settlement caps off an investigation that began as part of DEA’s crackdown on pill mills in Florida. Prescription drug addicts were travelling to Florida, known as the nation’s epicenter for the illegal distribution of prescription drugs, for access to physicians who were prescribing pain medication without regard to medical need and to pharmacies that were filling the prescriptions despite red flags that they were illegitimate. The investigation led to DEA’s execution of administrative inspection warrants at two CVS stores in Sanford. As a result, the DEA licenses of both stores were revoked in June 2012.
“Prescription drug abuse continues to be a problem in Florida and throughout the country,” said U.S. Attorney Bentley. “We are using all of the tools at our disposal to combat this problem, including civil penalties for pharmacies that fail to comply with the Controlled Substances Act.”
This settlement illustrates the United States Attorney’s Office efforts to address the wrongdoing that occurred at the height of Florida’s pill mill crisis.
This matter was investigated by the Drug Enforcement Administration Diversion Group in Orlando. It was handled by Assistant U.S. Attorney Katherine M. Ho.
United Kingdom Man Pleads Guilty to Federal Charges in Two Separate Fraud ConspiraciesRead the Press Release
HOUSTON – Marc T. Duchesne, 53, of the United Kingdom, has pleaded guilty to two federal charges stemming from separate schemes involving financial fraud in Texas and the District of Columbia, announced U.S. Attorney Kenneth Magidson of the Southern District of Texas and Vincent H. Cohen Jr., Acting U.S. Attorney for the District of Columbia.
Duchesne pleaded guilty May 11, 2015, to one count of conspiracy to commit wire fraud in the Texas case and one count of conspiracy to commit securities fraud and wire fraud in the unrelated case District of Columbia case. Duchesne entered both pleas before U.S. District Judge Reggie B. Walton in the District of Columbia.
In the Texas case, Duchesne and his co-conspirators engaged in a scheme from 2000 to 2005 that involved the selling of fraudulent liability insurance policies to apartment complexes, condominium associations, bars, restaurants and other businesses throughout the United States and Caribbean. One company that purchased the insurance was Shoreline Cruises Inc. which operated a 40-foot tour boat called the Ethan Allen on Lake George, N.Y. The tour boat operator discovered its insurance policy was fictitious after the Ethan Allen sank on Oct. 2, 2005, in a tragic accident that claimed the lives of 20 elderly tourists. The total loss was $2,455,531.
Four others have also been convicted in this scheme. Christopher Purser pleaded guilty to conspiracy to commit wire fraud, while Edmund Benton, Malchus Irvin Boncamper and Robert Steve Mills pleaded guilty to conspiracy to launder money. Purser received a sentence of 188 months, while Boncamper is serving a 97-month-term. Benton and Mills were both ordered to serve 120 months of federal imprisonment.
In the separate and unrelated case in the District of Columbia, Duchesne engaged in a conspiracy from May 2002 through October 2002 to defraud investors by fraudulently creating Nationwide Capital Corporation (publicly traded as NCCN) and then artificially driving up its stock price. Unbeknownst to the U.S. Securities and Exchange Commission (SEC) or investors, Duchesne and his co-conspirators owned and controlled vast amounts of the stock. They employed tactics such as bid manipulation, false SEC filings and false press releases to effectuate their scheme. The National Association of Securities Dealers estimated losses to investors to be in excess of $2 million.
The plea, which is contingent upon the court’s approval, calls for a prison sentence of 91-97 months. Also, as part of the plea agreement, Duchesne is to pay a total of $4,543,261 ($2,455,531 and $2,087,730 in the Texas and District of Columbia cases, respectively). Judge Walton has set sentencing for July 30, 2015.
The case in Texas was investigated by Internal Revenue Service - Criminal Investigation with assistance from Homeland Security Investigations and the Texas, New York and California Departments of Insurance. During this four-year investigation, the U.S. government also received extensive and valuable assistance from the governments of St. Kitts and Nevis and also St. Vincent and the Grenadines. Investigators also received valuable assistance from the governments of The Bahamas, Nicaragua, The Philippines and Australia. Assistant U.S. Attorneys John Lewis and Belinda Beek prosecuted the case.
The case in the District of Columbia was investigated by the FBI’s Washington Field Office and the SEC. Assistant U.S. Attorneys Mervin A. Bourne Jr. and Lionel André prosecuted that case.United Kingdom Man Pleads Guilty to Federal Charges in Two Separate Fraud ConspiraciesRead the Press Release
WASHINGTON – Marc T. Duchesne, 53, of the United Kingdom, has pled guilty to two federal charges stemming from separate schemes involving financial fraud in the District of Columbia and Texas, announced Vincent H. Cohen, Jr., Acting U.S. Attorney for the District of Columbia, and Kenneth Magidson, U.S. Attorney for the Southern District of Texas.
Duchesne pled guilty on May 11, 2015, to one count of conspiracy to commit securities fraud and wire fraud in the District of Columbia case and one count of conspiracy to commit wire fraud in the unrelated case that had originated in Texas. Duchesne entered both pleas before the Honorable Reggie B. Walton in the United States District Court for the District of Columbia.
The plea, which is contingent upon the Court’s approval, calls for a prison sentence of 91 to 97 months. Also, as part of the plea agreement, Duchesne is to pay a total of $4,543,261 ($2,087,730 and $2,455,531 in the District of Columbia and Texas cases, respectively). Judge Walton has set sentencing for July 30, 2015.
According to the government’s evidence, in the District of Columbia case, Duchesne engaged in a conspiracy from May 2002 through October 2002 to defraud investors by fraudulently creating Nationwide Capital Corporation (publicly traded as NCCN), and then artificially driving up its stock price. Unbeknownst to the U.S. Securities and Exchange Commission (SEC) or investors, Duchesne and his co-conspirators owned and controlled vast amounts of the stock. They employed tactics such as bid manipulation, false SEC filings, and false press releases to effectuate their scheme. The National Association of Securities Dealers estimated losses to investors to be in excess of $2 million.
In the Texas case, Duchesne and his co-conspirators engaged in a scheme from 2000 to 2005 that involved the selling of fraudulent liability insurance policies to apartment complexes, condominium associations, bars, restaurants and other businesses throughout the United States and Caribbean. One company that purchased the insurance was Shoreline Cruises Inc. which operated a 40-foot tour boat called the Ethan Allen on Lake George, N.Y. The tour boat operator discovered its insurance policy was fictitious after the Ethan Allen sank on Oct. 2, 2005, in a tragic accident that claimed the lives of 20 elderly tourists. The total loss was $2,455,531.
Four others have also been convicted in the Texas matter. Christopher Purser pled guilty to conspiracy to commit wire fraud, while Edmund Benton, Malchus Irvin Boncamper and Robert Steve Mills pled guilty to conspiracy to launder money. Purser received a sentence of 188 months, while Boncamper is serving a 97-month-term. Benton and Mills were both ordered to serve 120 months of federal imprisonment.
The case in the District of Columbia was investigated by the FBI’s Washington Field Office and the SEC. Assistant U.S. Attorneys Mervin A. Bourne, Jr. and Lionel André prosecuted that case. Assistance was provided by Paralegal Specialists Corinne Kleinman and Krishawn Graham.
The case in Texas was investigated by Internal Revenue Service - Criminal Investigation with assistance from Homeland Security Investigations and the Texas, New York and California Departments of Insurance. During this four-year investigation, the U.S. government also received extensive and valuable assistance from the governments of St. Kitts and Nevis and also St. Vincent and the Grenadines. Investigators also received valuable assistance from the governments of The Bahamas, Nicaragua, The Philippines and Australia. Assistant U.S. Attorneys John Lewis and Belinda Beek prosecuted the case.
U.S. Attorney's Office for the Western District of Louisiana remembers fallen law enforcement officers during national Police Week 2015Read the Press Release
SHREVEPORT/LAFAYETTE/ALEXANDRIA/LAKECHARLES/MONROE, La. – Communities across the United States are coming together during National Police Week - May 10th through May 15th - to honor and remember those law enforcement officers who made the ultimate sacrifice, as well as the family members, friends and fellow officers they left behind.
“National Police Week is a time of remembrance of fallen officers who gave their lives to protect ours,” stated U.S. Attorney Stephanie Finley. “Law enforcement officers risk their lives for all of us, and the men and women of the Western District salute and remember them. In our communities, their contributions are felt and deeply appreciated.”
This year, the names of 273 officers killed in the line of duty are being added to the National Law Enforcement Officers Memorial in Washington, D.C., during the 27th Annual 2015 Candlelight Vigil on the evening of May 13. These names include officers who were killed during 2014 and officers who died in previous years who have not been previously added to the Memorial.
The fallen officers of 2014 include two members of the law enforcement community in the Western District of Louisiana. They are:
- Deputy Sheriff Carlos Papillion of the St. Landry Parish Sheriff’s Office, who died January 28, 2014.
- Deputy Sheriff Allen Bares Jr. of the Vermilion Parish Sheriff’s Office, who died June 23, 2014.
In order to assist local public safety officers in the work that they do, the U.S. Attorney’s Office, Western District of Louisiana, offers safety and survival training throughout the year to increase awareness of the hazards they encounter on a daily basis. The course curriculum and sessions are overseen by the Western District’s Law Enforcement Community Coordinator, Michael Campbell, a former Chief of Police for the City of Shreveport. The Western District of Louisiana consists of 42 of Louisiana’s 64 parishes, and the courses are open to federal, state, local, military and tribal offices.
“We have and will continue to offer officer safety and survival training to increase awareness of the hazards our public safety officers face on a daily basis,” Finley stated. “Our goal is for all public safety officers to return home to their families at the end of their shifts each and every day.”
The Department of Justice also offers numerous grants to law enforcement agencies such as a new program to help equip officers with body cameras. The Department of Justice announced this month a $20 million Body-Worn Camera (BWC) Pilot Partnership Program to respond to the immediate needs of local and tribal law enforcement organizations. The investment includes $17 million in competitive grants for the purchase of body-worn cameras, $2 million for training and technical assistance and $1 million for the development of evaluation tools to study best practices.
“This new program will enhance the services and protections local law enforcement agencies provide in our communities,” Finley stated. “The program can also build trust and keep officers and the public safe. I urge law enforcement agencies and local governments to look into implementing this program and accessing available grants to reduce associated costs.”
Body-worn_camera_fact_sheet_.pdf (842.05 KB)
Administered by the Bureau of Justice Assistance (BJA) under the Justice Department’s Office of Justice Programs (OJP), the BWC pilot program will provide support to help law enforcement agencies develop, implement and evaluate body-worn camera programs across the United States. For additional information about the BWC Pilot Implementation Program, visit this website: http://go.usa.gov/3BtMW.
U.S. Attorney's Office Settles Americans with Disabilities Act Case with Patriot National BankRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that the U.S. Attorney’s Office has reached an Americans with Disabilities Act (ADA) settlement with Stamford-based Patriot National Bank to ensure equal access for individuals with disabilities at all Patriot Bank locations.
The agreement resolves an ADA complaint filed by an individual who is deaf or hard of hearing who alleged that Patriot National Bank would not do business with her over the phone using a telecommunications relay service. Since the commencement of the investigation, Patriot National Bank has worked cooperatively to develop and amend its policies and practices to comply with the ADA and the Department of Justice’s implementing regulations.
“Individuals who have disabilities must not be denied equal access to the services offered by financial institutions simply because of their disability,” said U.S. Attorney Daly. “Patriot National Bank’s cooperation during this investigation has shown that it is committed to equal access and effective communication with its customers who have disabilities. Our office has received other complaints against other major financial institutions, alleging that they are also refusing to communicate with individuals with disabilities who use relay services to communicate by telephone. These refusals are discrimination, and we will be looking into these complaints.”
The agreement requires Patriot Bank to accept all relay calls in all of its branches and amend its policies, practices, and training to ensure the removal of barriers to access at its retail stores. This includes, but is not limited to:
- Providing appropriate auxiliary aids and services to persons with disabilities when necessary to ensure effective communication throughout its financial services and programs.
- Adopting and enforcing a policy on effective communication with individuals who are deaf, are hard of hearing or have speech disabilities, for all retail stores and financial services.
- Posting a summary of the policy in retail locations and distributing the policy to current and new employees and contractors.
- Accepting calls made through a relay service operator by customers who are deaf, are hard of hearing or have speech disabilities on an equivalent basis to calls from other customers. This includes eliminating special security provisions applied to relay calls and using the same caller verification procedures whether or not a customer uses a relay service.
- Ensuring that its ATMs and websites are accessible to individuals with disabilities.
- Providing staff training on the ADA and Patriot Bank’s obligations to provide effective communication to individuals with disabilities.
- Posting and maintaining in a conspicuous location in all banking stores a notice stating that individuals with disabilities have a right under the ADA to request a sign language or oral interpreter or other auxiliary aids or services.
Title III of the ADA prohibits discrimination against individuals with disabilities by businesses that serve the public. Among other things, the ADA requires financial institutions, accountants, lawyers, doctors and other businesses to provide auxiliary aids and services that are necessary for effective communication. For individuals who are deaf or hard of hearing, auxiliary aids include qualified sign language or oral interpreters, use of relay services, computer-assisted real time transcription, and, for simple communications, the exchange of written notes.
Individuals who believe that they may have been victims of discrimination can file a complaint with the U.S. Attorney’s Office at 203-821-3700. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Additional information about the ADA can be found at www.ada.gov, or by calling the Department’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
This matter was handled by Assistant U.S. Attorney Ndidi N. Moses with the assistance of the Disability Rights Section of the U.S. Department of Justice Civil Rights Division.
Two Employees of Information Technology Companies Arrested for Harboring Foreign WorkersRead the Press Release
NEWARK, N.J. –Two employees of SCM Data Inc. and MMC Systems Inc. were arrested today for their alleged roles in a scheme that fraudulently used the H1-B visa program to reduce skilled labor costs, U.S. Attorney Paul J. Fishman announced.
Hiral Patel, 32, and Shikha Mohta, 31, both of Jersey City, New Jersey, were each charged by complaint with one count of conspiracy to bring in and harbor aliens and to obstruct justice. They are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint:
SCM Data and MMC Systems offered consultants to clients in need of IT support. Both companies recruited foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas. The H1-B program allows businesses in the United States to temporarily employ foreign workers with specialized or technical expertise in a particular field, such as accounting, engineering or computer science. As part of the H-1B program, the Department of Homeland Security (DHS) and the Department of Labor (DOL) require employers to meet specific labor conditions to ensure that American workers are not adversely impacted, while the DOL’s Wage and Hour Division safeguards the treatment and compensation of H-1B workers. Congress sets a numerical cap for the admission of skilled workers into the United States.
Patel, Mohta and other conspirators recruited foreign workers with purported IT expertise who sought work in the United States. The conspirators then sponsored the foreign workers’ H1-B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States. When submitting the visa paperwork to the DHS, the conspirators falsely represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas. Contrary to these representations and in violation of the H-1B program, Patel, Mohta and others paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems.
In some instances, Patel, Mohta and others generated false payroll records to create the appearance that the foreign workers were paid full-time wages. On multiple occasions the conspirators required workers to pay SCM Data or MMC Systems their gross wages in cash. In exchange, SCM Data or MMC Systems would subtract taxes and fees and issue payroll checks to the foreign workers in a smaller amount. The conspirators then encouraged the foreign workers to submit the bogus payroll checks to the DHS as proof that the workers were engaged in full-time work despite the fact that they were not working for SCM Data and MMC Systems.
This scheme provided Patel, Mohta and others with a labor pool of inexpensive, skilled foreign workers who could be used on an “as needed” basis. The scheme was profitable because it required minimal overhead, and SCM Data and MMC Systems could charge significant hourly rates for the foreign workers’ services. The conspirators earned a substantial profit margin when a foreign worker was assigned to a project and incurred few costs when a foreign worker was without billable work.
The conspiracy charge with which Patel and Mohta are charged carries a maximum potential penalty of five years in prison and a $250,000 fine.
U.S. Attorney Fishman praised special agents of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
patel_hiral_and_mohta_shikha_complaint.pdf (1.18 MB)
Tioga County Man Pleads Guilty to Environmental CrimeRead the Press Release
SYRACUSE, NEW YORK – On May 12, 2015, BRIAN DAVIS (46), of Owego, New York, pled guilty to one felony count of treating, storing, and disposing of hazardous waste without a permit, in violation of the Resource Conservation and Recovery Act, announces United States Attorney Richard S. Hartunian and Vernesa D. Jones-Allen, Special Agent in Charge, New York Area Office, Criminal Investigation Division, U.S. Environmental Protection Agency ("EPA").
In June 2013, DAVIS, the owner of Large Car LLC, a company in Owego that installs and removes old industrial plating equipment for re-use or recycling, agreed to remove various hazardous chemicals, including arsenic, chromium, lead, and selenium, from a bankrupt waste generator facility in New Hampshire. DAVIS did not have a permit or environmental license to remove these chemicals, but he nevertheless transported them to the Large Car LLC facility in Owego, where he treated, stored, and disposed of them over the course of nearly a year. Specifically, DAVIS stored the hazardous waste without labeling it, properly isolating incompatible materials, or protecting it from the elements. DAVIS also treated and disposed of much of this waste by igniting and evaporating it, mixing it with other materials, and shipping it offsite without manifesting it.
DAVIS, who will be sentenced in Binghamton on September 25, 2015, by Senior United States District Judge Thomas J. McAvoy, faces up to 5 years in prison and a fine of up to $15 million. DAVIS will also be responsible to pay any charges associated with the cleanup and removal of the remaining hazardous waste material.
This case was investigated by the EPA Criminal Investigation Division and by criminal investigators with the New York State Department of Environmental Conservation, and it is being prosecuted by Assistant United States Attorney Michael F. Perry.
For additional information, please contact Executive Assistant U.S. Attorney John G. Duncan at 315-448-0672.
Three More Indicted in Credit Card Fraud and Cigarette Trafficking ConspiracyRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced the indictment of ALPHA OUMAR DIALLO, 24, of Raleigh, MAMADOU LAMARANA BAH, also known as “Lanzo”, 34, of Bronx, NY, and MAMADOU JALLOW, also known as “Mike”, 32, of Raleigh. DIALLO, BAH, and JALLOW were each charged in indictments alleging Conspiracy to Commit Access Device Fraud, Access Device Fraud, and Aggravated Identity Theft. DIALLO also faces the charge of Felon in Possession of a Firearm.
The indictments generally allege that DIALLO, BAH, and JALLOW, were engaged in a schemes to acquire, among other things, large quantities of cigarettes in North Carolina and elsewhere using counterfeit gift and debit cards. The cards utilized by the conspirators were counterfeit because the data encoded in the magnetic strip of the cards had been altered to contain credit and debit card numbers that were not encoded upon them at the time they were manufactured. The indictments further alleged that conspirators acquired stolen credit and debit card data from sources on the internet, and received the stolen data in the form of internet email accounts to which they had access. It is alleged that the conspirators used the stolen credit and debit card data to fraudulently re-encode cards for later use to purchase cigarettes and other items.
After acquiring several counterfeit cards, the indictments allege that the conspirators used the cards, and caused the cards to be used, to purchase numerous cartons of cigarettes. The conspirators would generally travel from one store to another in a vehicle during a single trip to acquire a large volume of cigarettes. Other conspirators would then transport the cigarettes to other states to be resold at a profit.
If convicted, the maximum punishment for Conspiracy to Commit Access Device Fraud and Access Device Fraud is up to 20 years in prison. The punishment for Aggravated Identity Theft is a mandatory two years in prison consecutive to any other penalty imposed. The maximum punishment on the charge of Felon in Possession of a Firearm is up to 10 years in prison.
Anyone with information on the whereabouts of ALPHA OUMAR DIALLO is asked to please contact the United States Secret Service at (919) 855-1052.
An indictment is an allegation of a crime. All defendants are presumed under the law to be innocent until proven guilty.
The investigation of this case is being conducted by the United States Secret Service. Assistant United States Attorney William M. Gilmore is the assigned prosecutor on the case from the Economic Crimes Division of the United States Attorney's Office.
Three El Paso Men Sentenced to Federal Prison for the Distribution of CocaineRead the Press Release
In El Paso today, 35-year-old Isaac Hernandez, (aka “ICE”), the leader of an El Paso-based cocaine trafficking organization, was sentenced to eight years in federal prison announced Acting United States Attorney Richard L. Durbin, Jr., Drug Enforcement Administration Special Agent in Charge Will Glaspy, El Paso Division; and, Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, United States District Judge Philip R. Martinez ordered that Hernandez pay a $10,000 fine and be placed on supervised release for five years after completing his prison term.
Hernandez is the third defendant to be sentenced to federal prison for his role in the drug trafficking scheme. Yesterday, May 12, 2015, 35-year-old Joel Moreno was sentenced to six years in federal prison followed by five years of supervised release and fined $5,000. On May 7, 2015, 34-year-old Carlos Escobedo was sentenced to two years in federal prison followed by two years of supervised release.
All of the defendants pleaded guilty to conspiracy to possess with intent to deliver cocaine. By pleading guilty, the defendants admitted to trafficking over 500 grams of cocaine in the Western District of Texas between January 2013 and July 2014. According to court records, these defendants conspired to distribute a total of approximately two kilograms of cocaine.
This joint investigation was conducted by the Drug Enforcement Administration (DEA) and the Federal Bureau of Investigation (FBI).
Statement by Attorney General Lynch on the Confirmation of Sally Quillian Yates as Deputy Attorney GeneralRead the Press Release
Attorney General Loretta E. Lynch released the following statement on the confirmation of Sally Quillian Yates as Deputy Attorney General:
“I am pleased to congratulate Sally Yates on her confirmation as Deputy Attorney General – a vital position she has already held in an acting capacity and in which I am confident she will continue to excel. I thank the members of the United States Senate for their prompt action on her nomination.
“At every stage of her career, Sally has demonstrated her dedication to the rule of law, her devotion to the cause of justice and her commitment to all those whom the law protects and empowers. Her leadership and her skill have earned her the respect and the trust of law enforcement professionals at every level. And her exemplary work on a wide range of issues – from combating public corruption to prosecuting acts of terrorism – has proven that she is equal to any task.
“During the time we served together as U.S. Attorneys and through these first few weeks of my tenure as Attorney General, Sally has been an indispensable ally, an outstanding professional, and a judicious and expert advisor. I congratulate her once again on her confirmation, and I look forward to all that the Department of Justice will continue to achieve with the help of her exceptional leadership.”
Springfield Woman Sentenced for $200,000 Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., woman was sentenced in federal court today for a wire fraud scheme in which she made hundreds of fraudulent transactions and stole more than $200,000 from a couple who hired her to be their personal assistant.
Tessa A. Riley, 25, of Springfield, was sentenced by U.S. District Judge Beth Phillips to two years in federal prison without parole. The court also ordered Riley to pay $215,167 in restitution to her victims.
Riley was hired as a personal assistant by a husband and wife (identified as “R.E.” and “A.E.”) in February 2012 to make travel arrangements, run errands, respond to correspondence, call repairmen and enter personal finances on their Quicken computer budget program. They hired Riley because their professions – he is an engineering professor and she is a physician – required them to travel and work away from their home for extended periods of time. She was given permission to make small purchases and to make travel arrangements on a credit card.
On Dec. 10, 2014, Riley pleaded guilty to the wire fraud scheme that began about four months after she was hired. Riley admitted that she linked her credit card to her employers’ checking account, which allowed her to make online payments, credits and withdrawals from the checking account automatically when expenses were reported on her credit card. Between June 2012 and September 2013, Riley made 333 fraudulent transactions that withdrew $192,019 from that checking account.
Riley also admitted that she used her employers’ credit cards to make $29,144 in unauthorized purchases in 23 fraudulent transactions. In total, Riley embezzled $221,164 in funds from her employers’ checking account and credit cards.
According to court documents, Riley knew that R.E. suffered from two diagnoses of cancer, one of which involved a brain tumor. Riley continued to steal from their accounts while they were in Houston, Texas, for three months while R.E. received life-saving cancer treatments. As a result of her fraud scheme, the victims were forced to withdraw a considerable sum of money from their retirement funds in order to cover the lost funds stolen by Riley.
When the victims discovered unexplained transactions on their accounts and told Riley they were going to meet with the bank personally, she sent a text message admitting to her fraud and theft. Riley’s text messages stated that she embezzled these funds because she was trying to “make ends meet.” She also asked the victims to not press charges.
In reality, according to court documents, many of the automatic withdrawal and credit card transactions were to purchase luxury items. Riley purchased a car for herself and then made payments utilizing the victims’ bank account. She purchased airline tickets and stayed in expensive hotels overseas. Riley’s credit card receipts showed that she ate at expensive restaurants nearly every night and traveled to Kansas City, St. Louis, New York, Chicago and many cities overseas. Riley used her credit cards to pay for her tuition at Drury University and Missouri State University. She repeatedly used her credit cards to make high-end clothing and technology purchases. Riley also made cash withdrawals and purchased health and beauty products that she was selling as a side business.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Secret Service and the Greene County, Mo., Sheriff’s Department.
Southern Oregon Lawyer Sentenced After Pleading Guilty to Tax CrimeRead the Press Release
EUGENE, Ore. - Shane Reed, 53, of Rogue River, Oregon, pleaded guilty in U.S. District Court in Eugene to willfully failing to pay $125,000 in federal income taxes. He was sentenced to five years of probation.
Reed admitted that in 2006, 2007 and 2008 he filed U.S. Income Tax returns reporting a total of $880,000. Based on that income he owed $129,000 in income taxes and did not pay those taxes. Rather, he used his substantial earnings to fund a lavish lifestyle that included mortgage payments on a million dollar home with a heated swimming pool, $110,000 in vehicle expenditures, and $40,000 to pay for purchases at high end retail stores.
According to court records, Reed has since paid all of his taxes for 2006-2008, but still owes the IRS about $150,000 in back taxes for 2012 and 2013. As a part of his probation, the Court ordered Reed to pay all of his taxes and to comply with all tax laws required to lawfully operate his law practice. Reed was additionally ordered to perform 250 hours of community service.
U. S. Magistrate Judge Thomas Coffin presided over the case, which was investigated by the Internal Revenue Service – Criminal Investigations, and prosecuted by Assistant U. S. Attorney Chris Cardani.
Southern California Medical Supply Company Owner Sentenced to Four Years in Prison for $8.3 Million Medicare Fraud SchemeRead the Press Release
A registered nurse who owned a medical supply company was sentenced today in Los Angeles to four years in federal prison for her role in an $8.3 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Los Angeles Region, Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office and Special Agent in Charge Erick Martinez of the IRS-Criminal Investigation’s Los Angeles Field Office made the announcement.
Olufunke Ibiyemi Fadojutimi, 43, of Carson, California, was convicted by a jury on July 31, 2014, of conspiracy to commit health care fraud, seven counts of health care fraud and one count of money laundering. In addition to the prison term, U.S. District Judge Christina A. Snyder of the Central District of California ordered Fadojutimi was ordered to pay restitution in the amount of $4,372,466, jointly and severally with a co-defendant.
During trial, the evidence showed that Fadojutimi, a registered nurse and the former owner of Lutemi Medical Supply, fraudulently billed Medicare for more than $8 million of durable medical equipment that was not medically necessary. The evidence specifically showed that, between September 2003 and May 2010, Fadojutimi and others paid cash kickbacks to patient recruiters in exchange for patient referrals, and additional kickbacks to physicians for fraudulent prescriptions for medically unnecessary durable medical equipment, such as power wheelchairs. Fadojutimi and others then used these prescriptions to support fraudulent claims to Medicare.
As a result of this fraud scheme, Fadojutimi and others submitted approximately $8.3 million in false and fraudulent claims to Medicare, and received almost $4.3 million on those claims.
The case was investigated by the FBI, IRS, and HHS-OIG’s Los Angeles Regional Office, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case was prosecuted by Trial Attorneys Fred Medick and Blanca Quintero of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Sodus Woman Sentenced on False Statement ChargeRead 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 Sara Carbajal, 42, of Sodus, NY, who was convicted of submitting a false and fraudulent written statement, was sentenced to one year probation by U.S. District Judge Elizabeth A.Wolford.
Assistant U.S. Attorney Tiffany H. Lee, who handled the case, stated that Carbajal managed Carbajal Labor. In that role, the defendant filed a false Form I-9 for employment eligibility verification. On the form, Carbajal affirmed under penalty of perjury that the contents were true and accurate when she knew that the individual whose information she was verifying was present illegally in the United States and not eligible for employment.
The sentencing is the culmination of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under direction of Acting Special Agent in Charge J. Michael Kennedy.
Siemens Medical Solutions USA, Inc., to Pay $5.9 Million to Resolve Civil False Claims Act AllegationsRead the Press Release
PHILADELPHIA – Healthcare technology company Siemens Medical Solutions USA, Inc. (“SMS”) has agreed to pay $5.9 million to resolve an investigation into the overcharging of the federal government for purchases of medical imaging equipment. The civil resolution was announced today by United States Attorney Zane David Memeger.
On behalf of the United State Department of Defense (“DoD”), the Defense Supply Center of Philadelphia (“DSCP”) negotiated and entered into an agreement with SMS for the purchase of medical imaging equipment and support products between 2002 and 2008 (the “DSCP Contract”). The United States Department of Veterans Affairs (“VA”) also purchased medical imaging equipment through the DSCP Contract.
The United States alleged that SMS failed to provide the best price for certain DoD purchases made pursuant to the DSCP Contract. Specifically, SMS did not give the DoD the largest discount that a private or commercial customer had received for a “like system,” and, in doing so, overcharged the government. SMS also withheld information about this overcharging and kept money that it was not entitled to retain. After SMS uncovered evidence of the overcharging, SMS issued mass discounts on multiple occasions to address the misbilling on a prospective basis. SMS did not correct the overcharging that had occurred and further concealed it from the United States.
The United States also alleged that SMS overcharged the VA for certain imaging equipment orders – purchases made under the DSCP Contract – that had been converted to a newer model. Specifically, certain VA orders did not receive the larger discount that applied to the newer model which was delivered.
The allegations arose from an investigation led by the Department of Defense Office of Inspector General's Defense Criminal Investigative Service. The case was handled by Assistant United States Attorneys Eric D. Gill and Viveca D. Parker.
Sex offender convicted of failure to update registrationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Bobby Wayne Blackwell, 57, of Morgantown, West Virginia, was convicted in federal court after he admitted that he failed to update his sex offender registration, United States Attorney William J. Ihlenfeld, II, announced today.
Blackwell was previously convicted of “Rape” in November 1975 in the Court of Common Pleas of Clinton County, Pennsylvania. He was also convicted of “Attempt to Commit Rape” in October 1983 in the Court of Common Pleas of Lycoming County, Pennsylvania. As a result of these convictions, he is required to register as a sex offender.
An investigation by the West Virginia State Police and the United States Marshals Service revealed that in approximately October 2014, Blackwell moved from West Virginia to Pennsylvania without updating his sex offender registration.
Blackwell pled guilty to one count of “Failure to Update Sex Offender Registration.” He faces up to ten years in prison and a fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Sacramento Police Detective Receives Award for His Contribution to the Mission of the U.S. Attorney’s Office and the Department of JusticeRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner is pleased to announce the 2014 winner of the Eastern District of California Law Enforcement Award for Outstanding Investigator in the Sacramento Division. This award is one of four awards presented annually to a law enforcement agency and an officer in the Sacramento and Fresno divisions of the Eastern District of California to recognize outstanding collaboration between federal, state, and local law enforcement in addressing public safety issues in this region.
The winner of Sacramento Division’s Outstanding Investigator Award is Sacramento Police Detective Derek Stigerts for his work investigating crimes involving the sex trafficking of minors. Over the years, Detective Stigerts has worked on some of the most significant sex trafficking cases prosecuted by the U.S. Attorney’s Office. Two of those cases were brought against violent pimps Deandre Brown and Steven McKesson and resulted in lengthy federal prison sentences. Just last year, Detective Stigerts was instrumental in the conviction of Percy Love, a sex trafficker currently awaiting sentencing by the district court. None of those results would have been possible without Detective Stigerts’ dedication and expertise. He is a nationally recognized expert on sex trafficking crimes, and he frequently provides training to other law enforcement agencies. Even more important is Detective Stigerts’ unseen work with the victims of these crimes, helping them to reach the point where they can tell their stories and move forward with their lives.
U.S. Attorney Wagner stated: “It is my honor to recognize Derek Stigerts for the incredibly difficult and important work that he does. He brings some of our most dangerous criminals to justice, and he protects and assists some of the most vulnerable members of our community. It is because of Derek’s and his colleagues’ hard work that the Eastern District of California is seen as a national leader in the investigation and prosecution of the commercial exploitation of children. We thank him for his service.”
Earlier this year, two of the 2014 awards were presented to the Tehama County Sheriff’s Office and the Fresno County Sheriff’s office for their outstanding work in cooperation with the U.S. Attorney’s Office. The fourth and final award winner will be announced next week.
Rowan County Man Sentenced for Attempting to Aid International Terrorist OrganizationRead the Press Release
GREENSBORO, N.C. - U.S. Attorney Ripley Rand of the Middle District of North Carolina, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge John Strong of the FBI’s Charlotte, North Carolina, Division announced today that Donald Ray Morgan of Rowan County, North Carolina, was sentenced to 243 months in federal prison, 3 years supervised release and a $200.00 special assessment for attempting to provide material support to a designated foreign terrorist organization and possession of firearm by a felon.
Donald Ray Morgan, age 44, of Rowan County was sentenced this morning by United States District Court Judge Thomas D. Schroeder. On October 30, 2014, MORGAN pleaded guilty to attempted provision of material support to a foreign terrorist organization and possession of firearm by a felon.
According to court documents, Morgan knowingly attempted beginning in or about January 2014 until on or about August 2, 2014, to provide support and resources, including his own services, to the designated foreign terrorist organization al-Qa’ida in Iraq, also known as Islamic State of Iraq and the Levant (“ISIL”) and the Islamic State of Iraq an al-Sham (“ISIS”). On at least one occasion Morgan unsuccessfully attempted to travel from Lebanon to Syria to join ISIL/ISIS. Morgan also frequently used social media and an interview with an international journalist to express his support for the ISIL/ISIS and violent terrorist activities.
Court documents also reveal that Morgan possessed and later sold an assault rifle in January 2012 after having been convicted of a North Carolina state felony offense in 1997.
Morgan was initially arrested on August 2, 2014, at JFK International Airport in New York, New York, on a federal indictment for possession of a firearm by a felon, a violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
U.S. Attorney Rand commended the work of the Federal Bureau of Investigation, the Greensboro Resident Agency Joint Terrorism Task Force (Greensboro Police Department, Guilford County Sheriff’s Office, High Point Police Department, and the Winston-Salem Police Department), the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the United States Marshals Service, and United States Customs and Border Protection in bringing MORGAN to justice. Rand added, “We will continue to do everything we can to shine a light on the false allure of violent extremism and protect innocent people from terrorist activity, whether inside or outside the United States.”
“Morgan attempted to travel to Syria in order to provide material support to ISIL,” said Assistant Attorney General Carlin. “The sentence in this case demonstrates that we will continue to bring to justice those who engage in this conduct, and that protecting the nation against these threats remains one of our highest priorities.”
"Donald Ray Morgan proved himself to be a threat to national security. He traveled overseas with intentions to join the violent terrorist group, ISIL in Syria. One of the FBI’s highest priorities is to stop American citizens who support terrorist organizations and ensure they are held accountable for their actions,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
The investigation was conducted by the Federal Bureau of Investigation, Charlotte Division, the Greensboro Resident Agency Joint Terrorism Task Force (JTTF), and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Greensboro JTTF includes the following agencies: Federal Bureau of Investigation, Greensboro Police Department, Guilford County Sheriff’s Office, High Point Police Department, and the Winston-Salem Police Department. The prosecution is being handled by Assistant United States Attorney Graham Green with the assistance of Trial Attorney Paul Casey of the Counterterrorism Section of the Justice Department’s National Security Division.
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Rio Rancho Man Sentenced to Federal Prison for Heroin Trafficking and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Mark Herrera, 29, of Rio Rancho, N.M., was sentenced this afternoon in federal court in Albuquerque, N.M., to 70 months in prison followed by three years of supervised release for his conviction on heroin trafficking and firearms charges.
Herrera was arrested in Aug. 2014, on a criminal complaint after officers executed federal search warrants on his vehicle and residence and seized more than seven ounces of heroin, marijuana, approximately $5,000.00 in cash, a firearm and ammunition, and drug paraphernalia. In his post-arrest statement, Herrera told the officers that he sold six to eight ounces of heroin every two to three days, and that he used a firearm for protection.
On Feb. 13, 2015, Herrera pled guilty to a two-count felony information charging him with being a felon in possession of a firearm and ammunition and possession of heroin with intent to distribute. In entering the guilty plea, Herrera admitted that when he was arrested on Aug. 1, 2014, he possessed approximately seven ounces of heroin, drug paraphernalia, $5,000.00 in cash, and a loaded semi-automatic pistol. At the time of his arrest, Herrera was prohibited from possessing firearms or ammunition because he previously had been convicted of robbery and escape in Colorado.
This case was investigated by the Albuquerque offices of the ATF and the DEA and the Rio Rancho Police Department. Assistant U.S. Attorney Presiliano Torrez prosecuted the case.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaboration between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Rhode Island Woman Charged with Defrauding Worcester-Area ImmigrantsRead the Press Release
BOSTON – A Rhode Island woman was arrested this morning and charged in U.S. District Court in Worcester with federal wire fraud in connection with a scheme to defraud undocumented immigrants that netted over $600,000.
Patria Zuniga, 52, of Woonsocket, RI, was charged with one count of wire fraud. She was arrested at her home this morning and appeared before U.S. Magistrate Judge David H. Hennessy this afternoon.
According to the complaint, from 2010 through 2012, Zuniga posed as an immigration official and specifically targeted undocumented immigrants who sought to normalize their immigration status. As part of her scheme, Zuniga told her victims that she could assist them in obtaining lawful permanent residence in the U.S. in exchange for payments of $9,000 to $10,000 per person. After receiving the initial payments, Zuniga demanded additional funds from immigrants and their families, and threatened to have them deported if they refused to pay.
Over the course of the scheme, it is alleged that Zuniga collected over $600,000 from immigrants via cash, money orders, and bank and Western Union wire transfers. Zuniga also allegedly attempted to distance herself from the fraud scheme and avoid detection by having third-parties (including family members) receive the payments on her behalf.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz, Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigation in Boston, and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case was investigated by HSI’s Document and Benefit Fraud Task Force, and is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Postal Service Employees Arrested at O’Hare Airport for Opening and Stealing Contents from Packages Including NarcoticsRead the Press Release
CHICAGO — Two Postal Service employees were arrested today for allegedly opening and stealing the contents of Express Mail and Priority Mail parcels, which included narcotics. The defendants, Aramis Brown and Zaphronsia Wheeler, were arrested following an investigation by United States Postal Service Office of Inspector General (Postal OIG) and the United States Postal Inspection Service (USPIS).
Brown, 29, of Chicago, and Wheeler, 39, of Chicago, were charged by criminal complaints that were unsealed following their initial appearances today. They appeared today before Magistrate Judge Michael T. Mason in U.S. District Court and were released on a $4500 bond.
According to the complaint affidavits, Brown and Wheeler are Postal Service employees at the International Service Center located at O’Hare Airport, Chicago, Illinois (“International Service Center”) and allegedly have been opening and stealing the contents of Express Mail and Priority Mail parcels. These rifled Express and Priority Mail parcels fit the general profile for parcels which contain narcotics, in that they are sent from narcotics source states, from fictitious senders or to fictitious recipients, and narcotics sniffing canines alert to the parcels. The defendants are alleged to have stolen contents, some which included narcotics, out of Express and Priority Mail parcels from at least 16 pieces of mail on at least seven occasions.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Scott Caspall, Special Agent-In-Charge of the Chicago Great Lakes Area Field Office of the U.S. Postal Service Office of Inspector General; and Tony Gomez, Postal Inspector in Charge, U.S. Postal Inspection Service. Cook County Sheriff’s Office, Plainfield and Romeoville Police Departments assisted in the investigation.
The government is being represented by Special Assistant U.S. Attorney William Novak.
Theft of mail and narcotics offenses carries a maximum penalty of 5 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Complaint