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29 June 2015
Pizza Shop Owner Sentenced to Prison for Unlawfully Exporting Firearms and Accessories to PakistanRead the Press Release
Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Kamran Ashfaq Malik, age 35, of Upper Marlboro, Maryland today to two years in prison, followed by five years of supervised release, for unlawfully exporting semi-automatic rifles, parts and accessories to Pakistan.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; and Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Malik owned and operated a pizza shop in Upper Marlboro, and maintained a second residence in Lahore, Pakistan. Co-defendant Waleeb Aftab worked at the pizza shop. According to Malik’s plea agreement, between September and October 2012, Malik purchased, or caused to be purchased, approximately 48 AR-15 100 round dual drum magazines from various firearms and related accessories dealers. In order to take advantage of the lack of magazine capacity restrictions in Virginia, some of the purchases were made by Malik under the name, Virginia address and bank account of an associate. In other instances Malik provided a false commercial shipping address in Springfield, Virginia.
Between October and November 2012, Malik shipped or caused Aftab and others to ship, several illegal shipments of firearms and firearms parts and accessories to Lahore, Pakistan. In order to conceal the unlawful export of defense items, which are controlled for export, Malik placed false return addresses and names on the packages, as well as falsely identified the contents of the packages, and falsely declared the contents to be of nominal value. Malik directed Aftab to do the same.
On November 28, 2012, during a routine airport security screening in Dubai, United Arab Emirates, one of the packages was found to contain firearm parts and accessories that are prohibited from export to Pakistan without an export license, including: two lower receivers of a semi-automatic rifle, two rifle bolt carriers, rounds of magazines, an optical gun sight and an LED rail mounted flashlight with laser. The defendants never obtained the required licenses to export such items.
On March 7, 2013, after arriving at JFK Airport from Pakistan, Malik’s cell phone and laptop computer were subjected to a border search. Malik’s cell phone contained pictures of AR-15 style semi-automatic rifles and magazines, in some cases in the hands of individuals. The pictures were taken at locations near his residences in Pakistan and Maryland. A text message was also found on Malik’s phone that referenced the tracking number of the shipment detained in Dubai.
On March 6, 2014, Malik dropped off a package for shipment to Pakistan. Malik provided a false address and falsely identified the contents as “screw holders and metal screws.” Immigration and Customs Enforcement agents intercepted the package, which was found to contain 28 .223 caliber bolt carriers. Those items are regulated for export. Malik never sought nor obtained a valid export license for those items.
Malik received numerous export warnings regarding the export restrictions on firearms and related accessories. A notice of these export restrictions were contained on the firearms transaction records for various weapons purchased by Malik between 2012 and 2013, including the purchase of the Colt M-4 whose lower receiver was confiscated in Dubai. In addition, the shipping invoice receipts for the various shipments to Pakistan completed by Malik, or Aftab acting at his direction, contained an export notice and signature block for the shipper certifying that the identifying information for the package was accurate and that it was being shipped in accordance with U.S. export regulations.
Co-defendant Waleed Aftab, age 23, also of Upper Marlboro, pleaded guilty to the same charge and was sentenced to time served of one year.
United States Attorney Rod J. Rosenstein praised Baltimore HSI for their work in the investigation and thanked Assistant United States Attorney Christine Manuelian, who prosecuted the case.
Philadelphia Man Admits Trying to Distribute 1.7 Kilograms of Pure MethamphetamineRead the Press Release
NEWARK, N.J. – A Philadelphia man today admitted trying to deliver 1.7 kilograms of pure methamphetamine in Elizabeth, New Jersey, U.S. Attorney Paul J. Fishman announced.
Aaron Vega-Castelo, 28, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an indictment charging him with one count of distribution and possession with intent to distribute 50 grams or more of methamphetamine.
According to documents filed in this case and statements made in court:
On Dec. 11, 2013, Vega-Castelo was stopped while driving a blue Jeep on the New Jersey Turnpike in Elizabeth. Law enforcement found four plastic food storage-style containers of methamphetamine hydrochloride and two shoeboxes containing approximately $110,000 in cash in the back seat area of his vehicle. Vega-Castelo admitted that at the time he was stopped by law enforcement, he was on his way to deliver the drugs and cash to other individuals near an Ikea in Elizabeth.
DEA testing of the seized methamphetamine revealed that it had a net weight of 1.79 kilograms and substance purity of 95.1 percent, which results in 1.7 kilograms of pure methamphetamine hydrochloride.
The charged offense carries a minimum penalty of ten years in prison, a maximum potential penalty of life in prison and a $10 million fine. Sentencing is scheduled for Oct. 15, 2015.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the Narcotics and Organized Crime Drug Enforcement Task Force Unit in Newark.
Defense counsel: Eric M. Mark Esq., Newark, New Jersey
Pensacola Man Sentenced to 8 Years for Receipt of Child PornographyRead the Press Release
PENSACOLA, FLORIDA – Thomas Victor Sway, 25, of Pensacola, was sentenced to 8 years in prison for receipt of child pornography. The sentence was announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
At trial, the government presented evidence that, between November 2012 and May 2013, Sway received and possessed child pornography, including videos depicting images of minors less than 12 years of age engaged in sex acts. Undercover law enforcement officers discovered and downloaded the pornographic files from a public file sharing network that could be traced to Sway’s computer. After agents executed a search warrant at Sway’s residence, a forensic analysis of his hard drive revealed at least 140 video files containing images of child pornography. Additionally, the system file history indicated a pattern of Sway using dozens of distinct search terms to locate child pornography on the internet. Sway was convicted on April 15, 2015.
The case was investigated by the U.S. Immigration and Customs Enforcement Homeland Security Investigations, the Pensacola Police Department, and the other agencies that are part of the North Florida Internet Crimes Against Children Task Force, whose joint investigation led to the charges in this case. It was prosecuted by Assistant United States Attorney J. Ryan Love.
“This sentence is just one example of the hard work of our district’s prosecutors and law enforcement professionals to combat child exploitation crimes,” said U.S. Attorney Marsh. “These cases illustrate how dangerous the internet can be, and we will continue to investigate and charge those who target children.”
"Protecting children is a top priority for HSI, and we will continue to work in partnership with other agencies, like the Pensacola Police Department and the Northwest Florida Internet Crimes Against Children Task Force, to stop the exploitation of our children," said Susan L. McCormick, special agent in charge of HSI Tampa. “It is imperative for law enforcement to protect those who cannot protect themselves.”
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]New York Attorney Convicted of Defrauding ADP Inc., Broadridge Financial Solutions, Out of Hundreds of Thousands of DollarsRead the Press Release
NEWARK, N.J. – A New York attorney was convicted of mail fraud today for his role in an alleged scheme to defraud two international companies out of hundreds of thousands of dollars by fraudulently billing them for services that were never provided, U.S. Attorney Paul J. Fishman announced.
Marijan Cvjeticanin, 50, of St. James, N.Y., was convicted of nine counts of mail fraud following a one-week trial before U.S. District Judge Michael Shipp in Trenton federal court. The jury deliberated two hours before returning the guilty verdicts.
According to the documents filed in this case and the evidence at trial:
From September 1996 to September 2012, Cvjeticanin worked for Wildes & Weinberg P.C., a New York law firm specializing in immigration law, first as a paralegal and then as an attorney. Among other clients, the firm represented Automatic Data Processing Inc. (ADP) and Broadridge Financial Solutions Inc. (Broadridge) in connection with various immigration law matters. Cvjeticanin was the case manager handling day-to-day tasks, such as preparing Department of Labor certifications and applications for permanent residency for certain foreign workers of those companies employed in the United States on a temporary basis.
The application process required ADP and Broadridge to place job advertisements in the geographic location where the relevant position was located, to demonstrate that there were no minimally qualified United States citizens available to fill that position. Wildes & Weinberg arranged for an independent advertising agency to contract with ADP and Broadridge to place the advertisements. At some point prior to 2010, Cvjeticanin caused ADP and Broadridge to replace the independent advertising agency with Flowerson Holdings Inc., a/k/a Flowerson Advertising (Flowerson). Unbeknownst to Wildes & Weinberg, ADP, or Broadridge, Cvjeticanin was the owner and principal of Flowerson. From that point until September 2012, Flowerson purportedly handled all of the certification advertisement obligations for ADP and Broadridge. In reality, Cvjeticanin did not place the majority of the advertisements as required and instead pocketed the monies paid to him by ADP and Broadridge.
In September 2012, Wildes & Weinberg learned through a routine audit of employee email accounts that Cvjeticanin owned and controlled Flowerson and fired him. The subsequent investigation revealed that between 2010 and September 2012, ADP and Broadridge collectively paid Flowerson approximately $579,000 for advertisements relating to permanent residency applications. Virtually all of the invoices that Flowerson submitted to ADP and Broadridge included charges for advertisements purportedly placed in Computer World magazine as well as advertisements placed in newspapers such as The New York Times, The Boston Globe, The Star-Ledger, The Seattle Times, and others. However, Cvjeticanin never placed the majority of advertisements. Instead, he kept the money for his personal benefit.
The investigation also revealed that from time to time the government would conduct audits of labor certifications submitted on behalf of ADP and Broadridge and request additional information from the filer, including copies of the print advertisements that had been placed. Cvjeticanin was responsible for gathering the print advertisements responsive to the government audit requests. Because Cvjeticanin had not placed most of the print advertisements, he was unable to provide the copies. Cvjeticanin took out advertisements after he received notice of the audit. Cvjeticanin then fraudulently superimposed those advertisements on a newspaper from another date and made a photocopy, which he submitted to the government. The photocopied submissions purported to show that the relevant advertisements had been placed on the appropriate dates.
Cvjeticanin faces a maximum potential penalty of 20 years in prison and a $250,000 fine on each of the counts on which he was convicted. The government is seeking the forfeiture of all funds fraudulently obtained by Cvjeticanin as a result of the scheme. Sentencing is scheduled for Aug. 25, 2015.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, Newark Field Office, and the U.S. Department of State Diplomatic Security Service, New York Field Office, under the direction of Special Agent in Charge David Schnorbus, with the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Dennis C. Carletta of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey; Thomas Ambrosio Esq., Lyndhurst, New Jersey
New Jersey Man Federally Charged with Robbing 14 Banks and Two Businesses in Central Pennsylvania, New York, New Jersey, North Carolina and MarylandRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Warren, New Jersey man was charged in a Criminal Information with committing 14 bank robberies and two robberies of businesses over a period of a year in five states. The charges were filed in U.S. District Court in Harrisburg.
According to United States Attorney Peter Smith, Francis Simmons, age 41, is alleged to have robbed banks and businesses located in Lewisburg, Fogelsville, Dillsburg, Allentown, Wyomissing, Tannersville, Lancaster, Columbia, Hellertown, Hanover, Pennsylvania and Marathon, New York, Swedesboro, New Jersey, Hagerstown, Maryland and Asheboro, North Carolina. The wave of robberies occurred between November 6, 2013 and November 29, 2014. Simmons was allegedly identified by witnesses and surveillance video.
The investigation involved close coordination and cooperation of the Federal Bureau of Investigation, the Pennsylvania State Police, the Cortland County, New York Sheriff Department, and the Police Departments of Upper Macungie Township, Carroll Township, Logan Township, New Jersey, Spring Township, Hagerstown, Maryland, Pocono Township, Lancaster City Bureau of Police, Asheboro, North Carolina, Columbia Borough, Hellertown and Hanover Borough. The case is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
The government also filed a plea agreement that requires approval of the court.
Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for these offenses is 20 years’ imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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New Jersey Man Charged with Conspiracy to Provide Material Support to ISIL and Witness TamperingRead the Press Release
A Hudson County, New Jersey, man was arrested today on charges of conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and aiding and abetting an attempt to do so, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division.
Alaa Saadeh, 23, of West New York, New Jersey, was arrested early this morning at his home. He is charged in a complaint with conspiring with other individuals in New Jersey and New York to provide services and personnel to ISIL, aiding and abetting an attempt to provide services and personnel to ISIL and attempting to persuade a witness to lie to the FBI. The defendant is scheduled to make his initial appearance at 2:30 p.m. today before U.S. Magistrate Judge Cathy L. Waldor of the District of New Jersey.
According to documents filed in this case:
The FBI and the Joint Terrorism Task Force (JTTF) have been investigating a group of individuals from New York and New Jersey who have allegedly conspired to provide material support to ISIL. Co-Conspirator 1 (CC-1) is Saadeh’s brother and was a resident of Rutherford, New Jersey, until departing the United States on May 5, 2015, allegedly to join ISIL. Co-Conspirator 2 (CC-2) was a resident of Queens, New York, until he was arrested on June 13, 2015, in New York on terrorism charges. Samuel Rahamin Topaz was a resident of Fort Lee, New Jersey, until he was arrested on June 17, 2015, in New Jersey and charged with conspiring to provide services and personnel to ISIL.
On May 5, 2015, CC-1 attempted to travel from New Jersey to the Middle East, via John F. Kennedy International Airport, allegedly in order to join ISIL. CC-1 was accompanied to JFK by Saadeh and CC-2. On the way to the airport, CC-1 stated that he, Saadeh, CC-2 and Topaz had plans to reunite overseas within a few weeks.
After CC-1’s departure, and despite learning from CC-1’s family that he had been arrested in Jordan on suspicion of supporting ISIL, Saadeh, CC-2 and Topaz continued to discuss their plan to travel overseas to join ISIL. Electronic communications later recovered from Topaz’s phone corroborated their plans. On May 21, 2015, Saadeh and Topaz discussed that they needed to “lay low” and refrain from taking action in furtherance of the conspiracy to provide material support to ISIL that might be detected by law enforcement. Saadeh and Topaz also discussed needing to meet in person to discuss “hijra.” Topaz later told members of the JTTF that he and his conspirators used the term “hijra” (often spelled “hijrah”) to refer to traveling overseas to join ISIL. The next day, Saadeh told another individual that he suspected that CC-2 or Topaz had “snitched” on CC-1 and caused his arrest overseas, and that, if true, Saadeh thought he would have to “kill someone.”
In recorded conversations with an informant, Saadeh revealed his support for ISIL, including the terrorist organization’s use of beheadings and mass killings to impose its violent agenda. Saadeh also stated that he planned to travel overseas with CC-2 “at some point.” Saadeh further stated that he knew CC-1 planned to travel to join ISIL before CC-1 departed the United States, and that he bought CC-1’s airline ticket despite knowing this. The investigation revealed that Saadeh provided CC-1 transportation and removed a SIM card from CC-1’s phone in an apparent effort hide incriminating communications and other data.
In June, after becoming aware that he was under FBI surveillance, Saadeh directed an individual in New Jersey not to tell the FBI about CC-1’s support for ISIL or CC-1’s plans to travel to Syria and Iraq to join ISIL. Saadeh instructed the individual to “play dumb” and be “honest up to a point,” but to be sure not to tell the FBI anything about ISIL.
Each count in the complaint carries a maximum potential penalty of 20 years in prison and a fine of $250,000.
The case is being investigated by the FBI and JTTF. The case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with the assistance of Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Saadeh Criminal Complaint
New Jersey Man Charged with Conspiracy to Provide Material Support to ISIL and Witness TamperingRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was arrested at his home this morning for allegedly conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.
Alaa Saadeh, 23, of West New York, New Jersey, is charged by complaint with conspiring with other individuals in New Jersey and New York to provide services and personnel to ISIL, aiding and abetting an attempt to provide services and personnel to ISIL, and attempting to persuade a witness to lie to the FBI. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this case:
The FBI and the Joint Terrorism Task Force (JTTF) have been investigating a group of individuals from New York and New Jersey who have allegedly conspired to provide material support to ISIL. Conspirator 1 (CC-1) lived in Rutherford, New Jersey, until leaving the country on May 5, 2015, allegedly to join ISIL. Conspirator 2 (CC-2) was a Queens, New York, resident until he was arrested in New York on June 13, 2015, on terrorism charges. Samuel Rahamin Topaz was a Fort Lee, New Jersey, resident until he was arrested in New Jersey on June 17, 2015, and charged with conspiring to provide services and personnel to ISIL.
When CC-1 attempted to travel to the Middle East via John F. Kennedy International Airport (JFK), allegedly in order to join ISIL, he was accompanied by Saadeh and CC-2. On the way to the airport, CC-1 allegedly stated that he, Saadeh, CC-2, and Topaz had plans to reunite overseas within a few weeks.
After CC-1’s departure, and despite learning from CC-1’s family that he had been arrested in Jordan on suspicion of supporting ISIL, Saadeh, CC-2, and Topaz allegedly continued to discuss their plan to travel overseas to join ISIL. Electronic communications later recovered from Topaz’s phone corroborated their plans. On May 21, 2015, Saadeh and Topaz discussed the need to “lay low” and refrain from taking action in furtherance of the conspiracy to provide material support to ISIL that might be detected by law enforcement. Saadeh and Topaz also allegedly discussed needing to meet in person to discuss “hijra,” which Topaz later told members of the JTTF that referred to traveling overseas to join ISIL. The next day, Saadeh allegedly told another individual that he suspected that CC-2 or Topaz had “snitched” on CC-1 and caused his arrest overseas, and, if that was true, Saadeh thought he would have to “kill someone.”
In recorded conversations with an informant, Saadeh revealed his support for ISIL, including its use of beheadings and mass killings to impose its violent agenda. He said he planned to travel overseas with CC-2 “at some point.” Saadeh allegedly said he knew CC-1 planned to travel to join ISIL before CC-1 departed the United States and that he bought CC-1’s airline ticket despite knowing this. The investigation also revealed that Saadeh provided CC-1 transportation and removed a SIM card from CC-1’s phone in an apparent effort to hide incriminating communications and other data.
In June, after becoming aware that he was under FBI surveillance, Saadeh allegedly directed an individual in New Jersey not to tell the FBI about CC-1’s support for ISIL or CC-1’s plans to travel to Syria and Iraq to join ISIL. Saadeh instructed the individual to “play dumb” and be “honest up to a point,” but to be sure not to tell the FBI anything about ISIL.
Each count in the complaint carries a maximum of potential penalty of 20 years in prison and a fine of $250,000.
U.S. Attorney Fishman credited the FBI and the JTTF, under the direction of Special Agent in Charge Frankel, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with the assistance of Trial Attorney Robert J. Sander of the National Security Division’s Counterterrorism Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
New Hampshire Man Pleads Guilty to Social Security FraudRead the Press Release
CONCORD, N.H. –Walter Morton, 49, of Laconia, pleaded guilty today in United States District Court for the District of New Hampshire to three counts of Social Security Fraud, announced Acting United States Attorney Donald Feith.
In June 2009, Morton began receiving Social Security disability benefits. He also began receiving Child’s Insurance Benefits from the Social Security Administration (SSA) on behalf of two minor children, his biological daughter and his former stepson, serving as their representative payee. In this role, Morton was responsible for using the benefits he received on behalf of the children for their current needs, such as food, clothing, housing, and medical care.
On three separate occasions between August 2010 and December 2012, Morton advised SSA that the children resided with him and that he used the benefit payments he received as their representative payee for the children’s care and support. An investigation conducted by SSA’s Office of the Inspector General, however, revealed that the children had not lived with Morton since 2003 and he had not used their benefits for their current needs. Morton’s concealment of the true residency of the children and his failure to use the benefits for their care and support caused him to fraudulently receive $58,459.70 in Child’s Insurance Benefits payments.
“My office will continue to work closely with the Office of the Inspector General for the Social Security Administration to identify and prosecute those individuals who steal from the Social Security Fund by making false claims for benefits,” stated Acting United States Attorney Donald Feith. “Benefit programs exist so that those in need may receive the financial assistance necessary to survive. Those who engage in fraud to obtain benefits threaten the financial security of those citizens legitimately entitled to benefits. I thank the OIG for its excellent investigative work in this case.”
Morton is scheduled to be sentenced on October 2, 2015. He is facing a maximum sentence of five years imprisonment on each of the three counts. He was released on conditions pending sentencing.
The case was investigated by the Social Security Administration’s Office of the Inspector General and prosecuted by Special Assistant United States Attorney Karen Burzycki.
New Hampshire Man Pleads Guilty to Bank RobberyRead the Press Release
CONCORD, NEW HAMPSHIRE - Acting United States Attorney Donald Feith announced that James Oberfeldt, 31, of Claremont, New Hampshire, appeared in United States District Court today and pled guilty to robbing three banks in October and November of 2013 in violation of federal law.
Oberfeldt pled guilty to robbing the One Credit Union in Claremont, New Hampshire on October 11, 2013, The Lake Sunapee Bank in Lebanon, New Hampshire on November 20, 2013 and the Claremont Savings Bank in Claremont, New Hampshire on November 26, 2013. In each of the bank robberies, Oberfeldt wore a dark face mask and carried an air pistol which appeared to be an automatic handgun.
The defendant was identified after being arrested in Massachusetts on December 7, 2013 on other charges after a traffic stop. At the time of his arrest, Massachusetts State Police recovered an air pistol, dark ski mask and several items of clothing in the car driven by Oberfeldt. The clothes and gun were consistent with those of the bank robber, as seen on a surveillance video from the Claremont Savings Bank. Finger prints taken from the door of that bank were tested by the FBI’s Forensic Laboratory and found to match Oberfeldt’s.
The defendant faces a maximum prison term of twenty years on each count and will be sentenced on October 5, 2015.
This case was investigated by the Claremont Police Department, the Lebanon Police Department, the Massachusetts State Police and the Holyoke, Massachusetts Police. The Federal Bureau of Investigation aided in the investigation. The case is being prosecuted by Assistant United States Attorney Helen White Fitzgibbon.
Nevada Woman Sentenced for Stealing $336,000 from Her EmployerRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Nevada, Mo., woman was sentenced in federal court today for a bank fraud scheme in which she embezzled more than $336,000 from her employer and failed to pay taxes on the stolen money.
Patricia Culbertson, 52, of Nevada, was sentenced by U.S. District Judge Beth Phillips to two years in federal prison without parole. The court also ordered Culbertson to pay $412,022 in restitution to the business and to the government.
On Dec. 4, 2014, Culbertson pleaded guilty to bank fraud and filing a false tax return. According to court documents, Culbertson’s four-year-long criminal scheme started just a few years after being released from state probation for trafficking in illegal narcotics.
Culbertson worked for Barrington Manufacturing Corporation (a subsidiary of Hammond Sheet Metal) as a book keeper from June 2009 until she was suspended on June 24, 2014. Her fraud scheme began within six months of being hired. Culbertson admitted that she forged the company owner’s signature on checks from the company’s bank account without authorization in order to cover her gambling debts and for other personal expenses.
On hundreds of occasions, Culbertson stole the identity of various company officials, forged their signatures, and wrote unauthorized checks on the company's operating account and a separate account created to provide financial assistance to her fellow employees. The checks were either deposited into Culbertson’s personal bank account, the bank accounts of her mother and son, or the bank account of her company, PC Tech.
Culbertson’s criminal conduct continued when she realized her fraud had been discovered. In July of 2014, agents spoke with Culbertson at her home and they observed Barrington's financial records that had been removed from the business office. Agents immediately seized and preserved those financial records. After completing their investigation, agents determined that Culbertson destroyed and stole financial documents in an effort to conceal the true scope of her crimes.
Culbertson also admitted that she failed to report this embezzled income on her federal income tax returns for the years 2010, 2011, 2012, and 2013. Culbertson’s actions resulted in a total tax loss to the federal government (without penalties and interest) of $60,431. The total tax loss to the state of Missouri (without penalties and interest) was $14,754.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by IRS-Criminal Investigation, the Missouri State Highway Patrol and the El Dorado Springs, Mo., Police Department.
Morgantown man sentenced for unlawful possession of stolen firearmsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jacob Honaker, 21, of Morgantown, West Virginia, was sentenced today to 33 months in prison for possession of stolen firearms, United States Attorney William J. Ihlenfeld, II, announced.
Throughout 2014, Honaker possessed, bartered, sold, and disposed of multiple stolen firearms, including three semi-automatic pistols and five revolvers. He pled guilty in February 2015 to a criminal Information charging him with one count of “Possession of a Stolen Firearm.”
Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The West Virginia State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge Irene M. Keeley presided.
Montgomery County Conservation Director Charged with Bank Fraud, Wire FraudRead the Press Release
WICHITA, KAN. – A former director of the Montgomery County Conservation District appeared in federal court here Monday on bank fraud and wire fraud charges, U.S. Attorney Barry Grissom said.
Danielle R. Passauer, 29, Neodesha, Kan., was charged with one count of wire fraud and one count of bank fraud. It is alleged that she authorized $27,678 in checks to be paid to her in excess of the amount of her salary. Furthermore, it is alleged she authorized $23,694 in electronic transfer to VISA to pay for her personal, unauthorized expenditures.
If convicted, she faces a maximum penalty of 30 years in federal prison and a fine up to $1 million on each count.
The FBI investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
Millenium Capital Exchange CEO Pleads Guilty to running Foreign Exchange Market Ponzi SchemeRead the Press Release
ATLANTA - Stafford S. Maxwell, the former owner and Chief Executive Officer of Millennium Capital Exchange, Inc., has pleaded guilty to 10 counts of wire fraud for orchestrating a multi-million dollar foreign exchange market Ponzi scheme.
“Maxwell lured investors to his forex firm with bravado and false promises of trading success,” said Acting U.S. Attorney John Horn. “Maxwell’s claims led to nothing more than common theft, as he used lies and deceit to fleece people of their savings.”
“It is hoped that this guilty plea will provide some comfort to the many investors turned victims in this case that Mr. Maxwell will be held accountable for his greed based criminal conduct. The FBI continues to caution investors to be wary of those individuals promising such high rates of returns,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to Acting U.S. Attorney Horn, the charges, and other information presented in court: In March 2007, Maxwell incorporated and owned Millennium Capital Exchange, Inc. (“Millennium”), which purported to be a foreign exchange market trading firm. The foreign exchange market (or forex market) is the global market in which participants buy, sell, exchange, and speculate on currencies. The forex trading market consists of banks, commercial companies, central banks, investment management firms, hedge funds, retail forex brokers, and individual investors. Forex trading involves the trading of currencies from different countries against each other. An example of a forex trade is to buy Japanese yen while simultaneously selling United States dollars. Trading in foreign exchange markets frequently exceeds $5 trillion per day.
From about 2008 to January 2012, Maxwell solicited investments from individuals across the United States with promises of high fixed rates of return to be generated from successful foreign currency trading. In particular, to obtain money from investors, Maxwell falsely stated that: (a) he possessed excellent forex trading skills; (b) he had a long history of forex trading success; (c) he often assured investors that they would earn an annualized rate of return on their investments from approximately 48% to 72%; (d) he used “stops” and “floors” on currency trades to insure that the gains would be large, but that the losses would be small; (e) investors had realized significant gains based on his trading; and (f) he had reserve funds that enabled him to cover any trading losses.
In fact and in truth, Maxwell: (a) had little success executing forex trades; (b) lost almost all the money that he traded in forex markets; (c) was unable to pay investors the promised investment dividends; and (d) possessed no reserve fund to cover forex trading losses.
According to Millennium’s business model, Maxwell was supposed to use the invested funds to make forex trades through accounts at a financial firm in Geneva, Switzerland. Based on his false representations, investors wired Maxwell well over $1 million, expecting that the funds would be traded in the Swiss accounts. After receiving money from investors, however, Maxwell diverted approximately half of the money for other improper purposes. First, in an effort to perpetuate the scheme and make it appear that he was a successful forex trader, Maxwell used the money received from new investors (that was supposed to be traded on the forex market) to pay “dividends” to older investors. Second, Maxwell used the money received from investors (that was supposed to be traded on the forex market) to pay his own personal living expenses. In the end, Maxwell spent or lost almost every dollar invested with him.
On March 17, 2015, Stafford S. Maxwell, 46, of Mableton, Georgia, was indicted on 10 counts of conspiratorial and substantive wire fraud.
Sentencing for Maxwell is scheduled for September 2, 2015, at 10:00 a.m., before United States District Judge Eleanor L. Ross.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Jeffrey W. Davis is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Miami Couple Sentenced for Operating Clinic to Defraud MedicareRead the Press Release
Tampa, FL – U.S. District Judge Susan C. Bucklew sentenced a Miami couple today for their roles in operating a sham clinic. Gladys Fuertes (41) was sentenced to 19 years and 6 months in federal prison for engaging in a conspiracy to commit healthcare fraud, healthcare fraud, aggravated identity theft, and obstruction of a healthcare fraud investigation. Her husband and business partner, Mario Fuertes (41) was sentenced to 11 years and 3 months in federal prison for conspiracy to commit healthcare fraud, healthcare fraud, and obstruction of a healthcare fraud investigation. The Court also ordered them to forfeit $1,036,759.72, proceeds that are traceable to the charged conduct. The Fuerteses were convicted by a federal jury on March 24, 2015.
According to evidence presented during the seven-day trial, Gladys and Mario Fuertes established and operated a sham clinic, Gables Medical and Therapy Center, for the purpose of committing health care fraud. They employed unlicensed medical professionals and misused the Medicare billing numbers of other medical professionals, without their knowledge, in order to claim that they had rendered medical treatment to Gables patients. The Fuerteses also paid a co-conspirator to recruit Medicare beneficiaries for Gables, and to drive patients to the clinic for basic and sham medical services.
Once recruited, Gladys and Mario Fuertes urged the Gables patients to enroll in Universal’s Medicare Part C and Part D plans. They believed that Universal paid a relatively high percentage of its claims. The Fuerteses fraudulently billed Universal and caused Universal’s Medicare Part C plan to be billed for Gables patients’ supposed treatments. The treatments included expensive HIV-related treatments that patients never actually received. Gladys and Mario Fuertes also billed Universal and caused Universal to be billed for services that required a physician’s presence when no licensed physician had been present or had rendered the service. The Fuerteses billed Universal in excess of $900,000.
The Fuerteses and their co-conspirators paid the Medicare beneficiaries, who were recruited to come to Gables for their Medicare identification numbers, to allow Gables to bill Universal for services that were never rendered. In addition, Gladys and Mario Fuertes facilitated the provision of fraudulent prescriptions for controlled substances, including oxycodone, to Gables patients. In some cases, the signatures on the prescriptions were forged. The patients who received these oxycodone prescriptions were assisted in filling them by a co-conspirator. The co-conspirator also purchased the pills from some of the patients and sold them on the street. These prescriptions were paid for as part of the beneficiaries’ Medicare Part D benefits.
Once they learned of the federal health care fraud investigation into their actions, the Fuerteses instructed Gables patients to lie to law enforcement agents and otherwise obstruct a federal investigation into health care fraud at the clinic. The Fuerteses also provided altered Medicare billing documentation to federal agents investigating their activities.
“Today, Gladys and Mario Fuertes found out what health care providers who defraud Medicare are finding out all over America: if you commit health care fraud, you will be held accountable for your greed. From billing for services never provided to selling fraudulent narcotic prescriptions to altering medical records to conceal their crimes, this couple earned their stiff prison sentences,” said Special Agent in Charge Shimon R. Richmond, U.S. Department of Health and Human Services Office of Inspector General. “HHS OIG special agents will continue to work closely with our State and Federal law enforcement partners to protect Federal health care programs and the patients they serve.”
This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Mandy Riedel and Kelley Howard-Allen.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Meridian Man Sentenced to 133 Months in Prison on Drug ChargesRead the Press Release
Jackson, Miss - Cliff Williams, 37, of Meridian, Mississippi, was sentenced by U.S. District Judge Daniel P. Jordan III to 133 months in federal prison followed by three years of supervised release for his role in a conspiracy to possess with intent to distribute actual methamphetamine, announced U.S. Attorney Gregory K. Davis and DEA Special Agent in Charge Keith Brown.
Williams was indicted as a result of DEA’s "Operation Yeti Ice", an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation, which began as an operation targeting illegal narcotics distribution in central Mississippi. The drug network involved the distribution of over 100 Kilograms of Methamphetamine and encompassed the states of California and Mississippi.
This OCDETF operation was led by the Drug Enforcement Administration and the Mississippi Bureau of Narcotics with assistance from the U.S. Marshal Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Postal Service, Internal Revenue Service Criminal Investigation, Scott County Sheriff’s Office, Leake County Sherriff’s Office, Madison County Sherriff’s Office, Carthage Police Department, Forest Police Department, Newton County Sherriff’s Office, Lauderdale County Sherriff’s Office, Decatur Police Department, Richland Police Department, Pearl Police Department, Ridgeland Police Department, and the Jackson Police Department. The case was prosecuted by Assistant U.S. Attorney Erin Chalk.
The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
McAlester Man, Oklahoma City Woman Plead Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that DAVID DEAN CAGLE, age 33, of McAlester, Oklahoma and JESSICA SUZANNE FELIX, age 33, of Oklahoma City, Oklahoma, pled guilty to Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration and coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the United States Attorney’s Office. The defendant was indicted in April, 2015.
The Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendants did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty pleas and ordered presentence reports to be completed. The defendants will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment for CAGLE and FELIX is not less than 10 years imprisonment, followed by 5 years of supervised release.
Assistant United States Attorney Shannon Henson represented the United States.
Macy Man Sentenced for Habitual Domestic Abuse and Aiding the Killing of A Bald EagleRead the Press Release
United States Attorney Deborah R. Gilg announced that Antonio Bertucci, age 24 of Macy, Nebraska, was sentenced today upon his convictions for habitual domestic abuse and aiding and abetting the unlawful killing of a bald eagle. Chief United States District Court Judge Laurie Smith Camp sentenced Bertucci to 35 months of imprisonment on the habitual domestic abuse conviction to be followed by three years of supervised release. Bertucci was further ordered to serve one year of supervised release upon his conviction for the unlawful killing of a bald eagle.
Bertucci was convicted on two counts of habitual domestic abuse relating to incidents which occurred on October 2, 2014 and October 13, 2014 on the Omaha Indian Reservation. In each incident, Bertucci punched his live-in girlfriend in the face and also struck her in the body by either punching or kicking her. Bertucci had two previous convictions for domestic abuse assault in Woodbury County, Iowa.
In February of 2014, Bertucci was the driver of a vehicle in a field on the Omaha Indian Reservation when witnesses observed the passenger shooting at two bald eagles which were in the area. When the tribal police and the tribal game warden responded, Bertucci attempted to flee by driving away at a high rate of speed. However, he was ultimately caught when his vehicle broke down. A search of the vehicle revealed a bald eagle carcass in the trunk.
This case was investigated by the Federal Bureau of Investigation and the United States Fish and Wildlife Service.
Land Developer Involved in Failed Project of Luxury Homes Is Sentenced to 18 Years in Prison for His Role in A $23 Million Bank Loan Scheme and Related ChargesRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced Keith Vinson to 18 years in prison for his role in a scheme involving the failed land development deal of Seven Falls, a golf course and luxury residential community in Henderson County, N.C., announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Vinson, age 57, of Arden, North Carolina, was also ordered to serve three years of supervised release and to pay restitution in the amount of $18,384,584.53. A federal jury convicted Vinson in October 2013 of conspiracy, bank fraud, wire fraud, and money laundering conspiracy.
Acting U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Jason T. Moran, Special Agent in Charge of the Federal Deposit Insurance Corporation (FDIC), Inspector General’s Office of Investigation, Atlanta office.
“Keith Vinson was the central figure among a group of rogue bankers, CPA’s, appraisers, investors and others who together not only violated federal laws, but violated the trust of legitimate investors and potential home owners. The U.S. Attorney’s Office engaged our full resources to investigate and successfully prosecute this greedy group, but the greater message is to those who seek to engage in similar fraudulent activities: we are not finished. Western North Carolina is enticing to investors and developers because of the beauty of the landscape and continued growth; however, those who seek to conduct business in this area should prepare to do so fairly, legally and transparently because we are paying close attention to business transactions by investors, developers and would-be gate keepers” stated Acting United States Attorney Jill Westmoreland Rose.
According to filed court documents, evidence presented at Vinson’s trial and today’s sentencing hearing:
Beginning in 2008, Vinson and his co-defendants conspired and obtained money from several banks through a series of straw borrower transactions in order to funnel monies to Vinson and his failing development of Seven Falls, a proposed golf course and luxury residential community in Henderson County, N.C. A straw borrower is an individual whose name appears on a loan and on the books and records of a bank as the beneficiary of a loan, but whose name is substituted for that of the true borrower and does not in fact receive the benefits of the loan. Lending institutions cannot properly assess the risk of making such loans as they do not know the true circumstances of the loans or the creditworthiness of the true borrowers. Vinson and his conspirators devised this scheme in order to funnel monies to Vinson and his failing development of Seven Falls.
In order to advance this scheme Vinson and his co-conspirators, including Avery Ted “Buck” Cashion, III, Raymond M. “Ray” Chapman, and others, recruited local bank officials including George Gordon “Buddy” Greenwood and Ted Durham, who at the time were, respectively, President of the Bank of Asheville and the President of Pisgah Community Bank. When bank officials realized that they had reached their legal lending limits with respect to some of the straw borrowers, additional straw borrowers were recruited to the scheme and more straw borrower loans were made to them. Additional straw borrower loans were also necessary to keep loans current, a scheme known as “loan kiting.” The loan kiting scheme became necessary when conspirators were unable to make payments on loans made early in the scheme. Seven Falls and another luxury residential golf development by Vinson named “Queens Gap” failed, resulting in millions in property losses. In addition, both the Bank of Asheville and Pisgah Community Bank failed and were taken over by the FDIC.
Many of Vinson’s co-conspirators were sentenced on June 2, 2015. Avery Ted “Buck” Cashion, III, 61, of Lake Luke, N.C., was sentenced to 36 months in prison; Raymond M. “Ray” Chapman, 68, of Brevard, N.C., was sentenced to 36 months in prison; Thomas E. “Ted” Durham, Jr., former President of the failed Pisgah Community Bank, 60, of Fletcher, N.C., was sentenced to 30 months in prison; and Aaron Ollis, 68, a former licensed Real Estate Appraiser, of Arden, N.C., was sentenced to two years of probation, including 12 months and 1 day home detention. Cashion, Chapman, Durham and Ollis each pleaded guilty to conspiracy to defraud the United States. The defendants were also ordered to pay restitution as follows
Avery Ted “Buck” Cashion, III, $14,266,256.47
Raymond M. “Ray” Chapman, $14,266,256.47
Thomas E. “Ted” Durham, $ 6,237,453.37
Aaron Ollis, $10,199,106.87
George M. Gabler, age 60, of Fletcher, N.C., was convicted of one count of willfully failing to report misconduct associated with two Seven Falls lot loans in March 2010. In court documents, Gabler admitted that he withheld documents from a federal grand jury knowing that they were related to fraudulent loans taken out on behalf of conspirator Keith Vinson. For this offense, Gabler, a former Certified Public Accountant, was sentenced to two years of probation, including 500 hours of community service and a $5,000 fine.
Previously, Buddy Greenwood was sentenced to 42 months in prison; Nicholas Dimitris was sentenced to 12 months plus one day in prison; the former Pisgah Community Bank Chief Credit Officer, Robert Craig Gourlay was sentenced to 15 months in prison; David G. Smith, who worked as a loan officer for Pisgah Community Bank was sentenced to nine months in prison, and Andrew Hager was sentenced to eight months in prison in connection with the Seven Falls scheme.
Vinson is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was being jointly handled by the FBI, IRS-CI, and FDIC-OIG. Assistant U.S. Attorneys Don Gast and Michael Savage are in charge of the prosecution.
Lackawanna Man Sentenced on Drug Conspiracy ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that Andre Jones, Jr., 27, of Lackawanna, NY, who was convicted of conspiracy to possess with intent to distribute and to distribute crack cocaine, was sentenced to 41 months in prison by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney John M. Alsup, who handled the case, stated that on multiple occasions between August 30, 2012 and February 8, 2013, the defendant was involved in the sale of cocaine and crack cocaine on multiple occasions to an confidential source working with the Drug Enforcement Administration.
The sentencing is the culmination of an investigation by the Lackawanna Police Department, under the direction of Chief James Michel and the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division.
John Muir Health Agrees to Pay $550,000 to Resolve False Claims AllegationsRead the Press Release
SAN FRANCISCO – John Muir Health has agreed to pay the government $550,000 to resolve allegations that it submitted false claims for Medicare reimbursement, announced United States Attorney Melinda Haag, Department of Health and Human Services Office of Inspector General (OIG) Special Agent in Charge Ivan Negroni, and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
The settlement, unsealed by U.S. District Judge Samuel Conti, resolves a whistleblower lawsuit filed in the United States District Court for the Northern District of California. The United States’ investigation revealed that between January 1, 2009, and December 31, 2013, physicians who were contracted with John Muir Health to deliver radiation therapy failed to adequately supervise that treatment. The proper supervision of radiation therapy is a condition of payment for Medicare.
A former employee of John Muir Health filed the case pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. §§ 3729-33. Under those provisions, private citizens, known as “relators,” may file lawsuits on behalf of the United States and receive a portion of a settlement or judgment. In this case, the relator will receive $110,000 as her share of the government’s recovery.
Assistant U.S. Attorney Melanie L. Proctor handled the matter on behalf of the U.S. Attorney’s Office for the Northern District of California, with assistance of Paralegal Tiffani Chiu. The settlement with John Muir Health is the result of an investigation by the OIG and the Federal Bureau of Investigation.
Hyattsville Man Pleads Guilty to Fraudulent Tax Refund SchemeRead the Press Release
Greenbelt, Maryland – Norman D. West, age 48, of Hyattsville, Maryland and Washington, D.C. pleaded guilty today to conspiracy to commit theft of public money in connection with a fraudulent tax refund scheme.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Jeffrey S. DeWitt, Chief Financial Officer of the Washington, D.C. Office of Tax and Revenue, Criminal Investigation Division; and John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General.
According to West’s plea agreement, West is a musician and operated a putative tax preparation business known as “Flash Cash Financial,” or “Flash Cash,” which had a purported business address in Baltimore, Maryland.
West and his co-conspirators obtained the personal information of “recruits” which West used to file false tax returns in order to generate a fraudulent refund. West initially marketed his scheme using flyers placed in low income areas and the relied upon word of mouth. West paid a co-conspirator a $100 referral fee per recruit. West and his co-conspirators obtained the identities of at least 197 individuals. Using the personal information of those individuals, West made up the rest of the tax returns in order to generate refunds. West listed false wages, falsely claimed educational tax credits, and falsely claimed earned income tax credit.
West filed 197 federal tax returns that claimed $391,553 in fraudulent tax refunds, all of which was issued by the IRS. In addition, West filed 28 fraudulent returns with the District of Columbia, which generated an additional $16,668.30 in fraudulent refunds. All of the refunds were deposited in bank accounts opened by West in the name of Flash Cash. West paid the recruits a small portion of the fraudulent refunds, usually about $500, and kept the rest for himself and his co-conspirators.
The total tax loss is $408,221.30, which is the amount West is required to pay in restitution as part of his plea agreement. West faces a maximum sentence of five year in prison. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for September 21, 2015 at 1:00 p.m.
United States Attorney Rod J. Rosenstein commended the IRS-CI, the Washington, D.C. Office of Tax and Revenue, Criminal Investigation Division, and the Department of Treasury Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory R. Bockin, who is prosecuting the case.
Harford County Cocaine Dealer Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Eric Maurice Clanton, age 35, of Edgewood, Maryland today to 10 years in prison followed by five years of supervised release for conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Special Agent in Charge Shawn Ellerman of the Drug Enforcement Administration, Baltimore District Office; Harford County Sheriff Jeffrey R. Gahler; Chief Henry Trabert of the Aberdeen Police Department; Bel Air Police Interim Chief Jack Meckley; Chief Teresa Walter of the Havre de Grace Police Department; and Harford County State’s Attorney Joseph I. Cassilly.
According to his plea agreement, as part of an investigation into cocaine trafficking, the Harford County Narcotics Task Force intercepted cellular telephone calls and text messages from members of a drug trafficking organization operating in Harford County. Based on the intercepted calls and texts, Eric Clanton was identified as a member of the organization.
For example on August 26, 2014, investigators intercepted a series of text messages between Clanton and a co-conspirator in which they discussed Clanton and a courier traveling to Philadelphia, Pennsylvania, to obtain cocaine. Clanton also discussed which source of supply to use. On September 27, 2014, Clanton and a courier traveled to Philadelphia to meet with a cocaine source of supply. An intercepted conversation between the source and Clanton revealed that Clanton had paid the source $63,410, but owed the source another $190. Based on Clanton’s conversation with the source, law enforcement believes Clanton purchased approximately two kilograms of cocaine, since the cost of a kilogram of cocaine at that time was $30,000 to $35,000.
On October 6, 2014, Clanton and a courier again traveled to Philadelphia to meet the same source of supply. The vehicle operated by Clanton was stopped on its return to Maryland. A search of the vehicle recovered approximately 1.25 kilograms of cocaine.
Clanton admits that he made numerous trips to Philadelphia to obtain cocaine, which was then transported to Harford, Cecil and Baltimore Counties, where Clanton and other members of the conspiracy redistributed the drugs. During his participation in the conspiracy, Clanton was responsible for the distribution of at least five kilograms of cocaine.
United States Attorney Rod J. Rosenstein praised HSI Baltimore and Harford County Narcotics Task Force, comprised of members of the Harford County Sheriff's Office, Maryland State Police, Aberdeen Police Department, Bel Air Police Department, Havre de Grace Police Department and the Harford County States Attorney’s Office. Mr. Rosenstein thanked Assistant U.S. Attorney Christopher J. Romano, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Gurdon Man Convicted of Federal Kidnapping Charge Resulting in DeathRead the Press Release
Hot Springs, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that Kevin Bolton, age 39, of Gurdon, Arkansas, pleaded guilty today to one count of Kidnapping Resulting in Death. The Honorable Susan O. Hickey accepted the change of plea in the United States District Court in Hot Springs.
U. S. Attorney Eldridge commented, “This was a horrendous, despicable crime. We will not tolerate acts of violence in our communities, and we will stand up for victims of crime and their families across Arkansas. I appreciate all of the hard work by Clark County Sheriff, Jason Watson and Clark County Prosecuting Attorney, Blake Batson in cooperating to see that justice was done in this case.”
“This was an extraordinary investigation conducted by Sheriff Jason Watson, his deputies, and Special Agent, Scott Clark with the Arkansas State Police,” stated Clark County Prosecuting Attorney, Blake Batson. “Their efforts and the work of U. S. Attorney Conner Eldridge brought justice to this case. We are hopeful that this sentence will bring some closure to this family.”
“I believe justice has been served today for Cassie and her family,” stated Clark County Sheriff, Jason Watson. “I appreciate the work by U.S. attorney Eldridge, Prosecuting Attorney Blake Batson, and everyone involved in this case. There were multiple agencies involved throughout Arkansas and North Carolina. Without their assistance this would not have been possible.”
According to court records, on March 12, 2013, the now deceased victim, visited an apartment in Gurdon, Arkansas, where she encountered the defendant, Kevin Bolton, a Gurdon resident. According to statements made by witnesses, the defendant and the victim left the apartment together around midnight in her vehicle. The victim’s mother, after repeatedly and unsuccessfully trying to contact her daughter the next day, became alarmed and filed a missing person’s report with the Gurdon, Arkansas Police Department.Because Bolton was the last person known to be seen with the victim, a BOLO was issued for Bolton, the victim, and her vehicle. Law enforcement officials learned that Bolton had friends on the Cherokee Indian Reservation in North Carolina and sent the BOLO to the Cherokee Indian Police Department there.On March 20, 2013, Cherokee Indian Police officers located Bolton driving the victim’s vehicle and conducted a traffic stop. After smelling a strong odor, officer’s opened the trunk of the car where they found the victim’s body.Bolton was arrested and taken into custody; he waived extradition and agreed to return to Arkansas for prosecution.Clark County Sheriff, Jason Watson, traveled to Cherokee, North Carolina, to interview Bolton and transport him back to Arkansas. After being read his Miranda warning, Bolton told Sheriff Watson that he had accompanied the victim around midnight on March 12th.He admitted that he and the victim had argued outside her parked car and that he grabbed her around her neck and choked her until she fell to the ground.He stated that he choked her until he believed she was dead and then put her in the backseat of her car. After he was arrested and returned to Arkansas, Bolton led Sheriff Watson to the place where he had choked her and put her in the backseat of her car. That location is in Clark County, Arkansas, within the Western District of Arkansas, Hot Springs Division.Bolton told Sheriff Watson he drove the victim’s vehicle until he heard gagging and choking, so he stopped the car, choked her again, and put her in the trunk of her vehicle.Bolton stated that he believed she was still alive when he placed her inside the trunk and began driving out of Clark County towards Little Rock, Arkansas, where he claimed he spent time with strangers he met on the street. He stated he next drove with her inside the trunk to Cherokee, North Carolina to visit a friend, where he parked the vehicle to hide the rear license plate, and told people the trunk of the vehicle could not be opened because it was bolted shut. An autopsy conducted in North Carolina identified the victim through dental comparison, and ruled the cause of death was asphyxiation due to strangulation.
On January 29, 2014, a Federal Grand Jury issued an indictment against Bolton charging him with one count of kidnapping resulting in death. Bolton will be sentenced on a later date. The statutory penalty for the offense is life imprisonment.
This case was investigated by the Clark County Sheriff’s Office with assistance from the FBI and the Sheriff’s Office of Cherokee, North Carolina. United States Attorney Conner Eldridge and Assistant United States Attorney Kyra Jenner are prosecuting the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Glencoe CampResort II L.L.C. and California Man Sentenced for Clean Water Act ViolationsRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that Glencoe CampResort II L.L.C. of rural Meade County, South Dakota, and Sean Clark from Hacienda Heights, California, pled guilty to and were sentenced for Clean Water Act violations on June 22, 2015, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Sean Clark, age 48, pled guilty to Knowing Discharge of a Pollutant From a Point Source Into a Water of the United States. Glencoe CampResort II, L.L.C., through its managing partner Devorah Lopez, pled guilty to Negligent Discharge of a Pollutant From a Point Source Into a Water of the United States. In accordance with the terms of the negotiated plea agreement, Clark and Glencoe CampResort II were each sentenced to four years of probation, with terms to include complying with an Administrative Order of Consent with the Environmental Protection Agency (EPA), preparing and following an Environmental Compliance plan, and a fine and Community Service payment of $250,000. Clark will also be required to perform 100 hours of community service in South Dakota.
The fine and community service are to be paid jointly and severally between the two Defendants. Of the $250,000, $83,000 was ordered to Meade County to be used for environmental purposes, $83,000 was ordered to the South Dakota Department of Environment and Natural Resources (DENR), and $84,000 was ordered to the United States.
“This case is a prime example of the Federal government working closely with the State, local communities, businesses, and concerned individuals to ensure our water sources remain safe and well suited for multi-purpose use,” said Acting U.S. Attorney Randy Seiler. “Public awareness and support for protecting and enhancing water quality has led to even more vigorous enforcement of environmental laws. And people who intentionally jeopardize water supplies will pay the consequences, as evidenced by the sentence handed down.”
Clark and Lopez purchased Glencoe CampResort II, L.L.C. in January 2009. Bear Butte Creek runs through Glencoe and is a designated cold water fishery by the State of South Dakota. The Creek has been designated as a navigable water of the United States by the United States Army Corps of Engineers. During the Sturgis Motorcycle Rally, the Creek is used by campers at Glencoe for recreational purposes. The Creek is also used by other downstream property owners for watering livestock on their properties.
In July 2012, concerned citizens called the DENR Water Rights program and the United States Army Corps of Engineers to complain about the lack of water in the Creek. As a result, a DENR representative made a site visit to Glencoe, and observed that a dirt dam had been constructed across the Creek impounding water.
It was determined that the dam at the Campground was approximately 75 feet across, 20 feet wide, and 6 feet high, and that approximately 500 cubic yards of material was used to construct the dam, and that the impounded water created a pool approximately 500 feet upstream. Due to the illegal construction of the dam without valid permits, both DENR and the Corps of Engineers issued a Notice of Order to Discontinue Illegal Use of Water and Notice of Violation and Cease and Desist letter to Glencoe. The dam at Glencoe was not removed as ordered, and litigation ensued.
“Federal waterways are regulated to protect water quality, wildlife and human health,” said Jeffrey Martinez, Special Agent in Charge of EPA’s criminal enforcement program in South Dakota. “The defendants’ failure to secure the required permits jeopardized the overall health of Bear Butte Creek, resulting in fish kills and a loss of water for livestock. Today’s sentence demonstrates that EPA and its law enforcement partners will remain vigilant in protecting our local water supplies on which communities depend.”
The investigation was conducted by the EPA, Meade County State’s Attorney’s office, Meade County Sheriff’s Office, DENR, U.S. Army Corps of Engineers, and the South Dakota Attorney General’s Office. The case was prosecuted by Assistant U.S. Attorney Meghan N. Dilges.
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Franklin County Man Indicted on Federal Drug and Weapons ChargesRead the Press Release
St. Louis, MO – BRIAN HENRY JONES, St. Clair, Missouri, was indicted involving his alleged drug activities in Franklin County.
Jones was indicted by a federal grand jury on June 24 for multiple felony counts, including being a felon in possession of a firearm, possession of a sawed-off shotgun, manufacturing methamphetamine, maintaining a drug involved premises and possession of a firearm in furtherance of a drug trafficking crime. He appeared for arraignment in federal court this afternoon in St. Louis.
If convicted, these charges carry penalties ranging from five years to life in prison. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Franklin County Sheriff’s Office, the Multi-County Narcotics and Violent Crimes Enforcement Unit and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Cristian M. Stevens is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Four Jacksonville Residents Charged with Immigration FraudRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Jacksonville residents Mark Laurence Barlaan (35), Winnie Rabaya Barlaan (64), Mary Helen Amaba Barlaan (32), and Peter Laforteza Barlaan (62) with marriage fraud, immigration document fraud, lying to a federal agency, and conspiracy to commit those crimes. The indictment also charges Mary Baarlan with fraudulently obtaining U.S. citizenship. If convicted on all counts, each faces a maximum penalty of 15 to 25 years in federal prison.
According to the indictment, each of the four charged individuals was born in the Philippines. Winnie Barlaan and Peter Barlaan later became naturalized U.S. citizens. Mary Barlaan entered the United States with a temporary visitor’s visa in November 2007, and Mark Barlaan entered the country with a temporary work visa in December 2008.
Mark Barlaan is Peter Barlaan’s son. Before Mark and Mary Barlaan came to the United States, they were in a romantic relationship with each other, and that relationship continued after they came to the United States.
On September 9, 2009, the day after Peter Barlaan became a U.S. citizen, he married Mary Barlaan, his son’s girlfriend. On October 25, 2011, Mark Barlaan and Winnie Barlaan were married. The indictment alleges that the defendants entered into these marriages for the purpose of fraudulently obtaining legal permanent residence and citizenship for Mark and Mary Barlaan. The indictment further alleges that Peter Barlaan paid Winnie Barlaan several thousand dollars in exchange for her marrying Mark Barlaan and cooperating in the immigration proceedings.
Under U.S. immigration law, aliens married to U.S. citizens are given priority in the granting of immigration benefits. By marrying U.S. citizens, Mark and Mary Barlaan could obtain these benefits faster and without meeting the requirements applicable to persons who are not married to U.S. citizens.
The indictment alleges that the individuals made false statements on documents submitted to immigration authorities in an attempt to conceal the fact that they had committed marriage fraud, and that false statements were made in interviews and during other encounters with immigration officers.
On June 5, 2013, Mary Barlaan became a naturalized citizen of the United States. The indictment provides notice that upon a conviction for obtaining naturalization by fraud, Mary Barlaan’s citizenship will be revoked.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Citizenship and Immigration Services. It will be prosecuted by Assistant United States Attorney Arnold B. Corsmeier.
Fort Thompson Man Sentenced for Assault Resulting in Serious Bodily Injury and Assaulting a Federal OfficerRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, man convicted of Assault Resulting in Serious Bodily Injury, and Assaulting, Resisting, and Impeding a Federal Officer was sentenced on June 23, 2015, by U.S. District Judge Roberto A. Lange.
Derek Kenendy, age 35, was sentenced to 27 months in custody, followed by 2 years of supervised release, and a special assessment of $200 to the Federal Crime Victims Fund.
Kennedy was indicted by a federal grand jury on December 9, 2014. He pled guilty on March 26, 2015.
The convictions stem from two separate incidents.
On July 9, 2013, one of the victims was walking home when Kennedy came up to her and hit her on the left side of her face with his fist, knocking her to the ground. While on the ground, Kennedy kicked her in the face, breaking her jaw in two places. The victim had to have her jaw wired shut for several weeks.
On October 4, 2014, the above victim and Kennedy began to argue and Kennedy hit the victim. Law enforcement was called. A Bureau of Indian Affairs (BIA) officer arrived at the home and made contact with the victim and Kennedy.
The officer attempted to arrest Kennedy, who resisted. A physical struggle ensued with the officer, as Kennedy refused to follow commands and swung at the officer.
This case was investigated by the BIA, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Kennedy was immediately turned over to the custody of the U.S. Marshals Service.
Former Woodbury Police Chief Pleads Guilty to Theft of Federal Grant FundsRead the Press Release
Kevin Mooneyham, 47, former Chief of Police for the City of Woodbury, Tennessee, pleaded guilty today before Chief U.S. District Judge Kevin H. Sharp, to theft of federal program funds, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Mooneyham was indicted on April 22, 2015.
During the plea hearing, Mooneyham admitted that, from January 2013 through February 2015, while acting in his official capacity as the Woodbury Police Chief, he submitted fraudulent timesheets for more than $28,000 in overtime hours that he had not in fact worked. The funds used to pay the false overtime hours claimed by Mooneyham were derived from federal grants provided by the National Highway Traffic Safety Administration through the Governor’s Highway Safety Office, specifically for the purpose of enhanced alcohol enforcement efforts.
Mooneyham also admitted during the plea hearing that he misrepresented to other officers of the Woodbury Police Department that federally-funded overtime was not available, despite the fact that he had been submitting and continued to submit timesheets for such overtime on his own behalf. Mooneyham further disclosed that he had misrepresented to a Town of Woodbury official that he had received a large percentage of federally-funded overtime pay because no other officers of the Woodbury Police Department were willing to perform the overtime patrols. In fact, numerous Woodbury Police officers had expressed an interest in performing such overtime patrols.
Mooneyham will be sentenced by Chief Judge Sharp on October 19, 2015. He faces up to 10 years in prison and a fine of up to $250,000, plus forfeiture of the proceeds of his offense.
The case was investigated by the Tennessee Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Bill Abely.
Former UW-Oshkosh Student Sentenced to 40 Months in Prison for Possession of RicinRead the Press Release
WASHINGTON – Kyle Allen Smith, 21, of Oshkosh, Wisconsin, was sentenced today to 40 months in federal prison for possession of ricin by the Chief District Judge William C. Griesbach of the Eastern District of Wisconsin, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney James L. Santelle of the Eastern District of Wisconsin.
Smith was arrested on October 31, 2014, after two professors at the University of Wisconsin at Oshkosh reported to campus authorities that Smith was making unusual inquiries about chemical processes, including extracting of ribosomal inhibiting protein. According to the plea agreement, Smith admitted growing castor bean plants and extracting ricin from the beans. A substance found in Smith’s residence was sent to the Department of Homeland Security’s National Bioforensics Analysis Center at Fort Detrick, Maryland, and tested positive for the toxin ricin. Ricin is a toxin that infects human cells and blocks their ability to synthesize their own protein. Small doses of ricin may be lethal to human beings if ingested, inhaled or injected. Symptoms of ricin poisoning can include difficulty breathing, nausea, vomiting and diarrhea, with possible death occurring within 36 to 72 hours. According to information posted on the website of the Centers for Disease Control and Prevention (CDC), there are no known antidotes for ricin poisoning.
Smith admitted having homicidal thoughts and that these thoughts might have sparked his curiosity about the production of ricin. He stated he would not use or test the ricin on any human because too many people knew what he was doing and would turn him in.
Assistant Attorney General Carlin joined U.S. Attorney Santelle in praising the actions of the professors and the University administration in bringing Smith to the prompt attention of law enforcement authorities. It is a perfect example of “see something, say something,” which guides the required vigilance of our times. Assistant Attorney General Carlin and U.S. Attorney Santelle also thanked the Wisconsin National Guard, 54th Civil Support Team, for the critical assistance they provided in the safe recovery of the ricin.
The case was investigated by the Oshkosh Police Department, the FBI and the University of Wisconsin – Oshkosh Police Department. The case was prosecuted by Assistant U.S. Attorney Paul L. Kanter of the Eastern District of Wisconsin and the Justice Department’s National Security Division.
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Former Owner of Medical Equipment Supply Company Sentenced for $3.5 Million Medicare and Medi-Cal Fraud SchemeRead the Press Release
The former owner of Ezcor Medical Supply was sentenced today to serve 97 months in prison for her role in a fraud scheme that resulted in $3.5 million in fraudulent claims to Medicare and Medi-Cal.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker 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 Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.
Sylvia Walter-Eze, 48, of Stevenson Ranch, California, was found guilty by a federal jury on March 20, 2015, of conspiracy to commit health care fraud, four counts of health care fraud, and one count of conspiracy to pay illegal health care kickbacks. In addition to imposing the term of imprisonment, U.S District Judge R. Gary Klausner ordered Walter-Eze to pay restitution in the amounts of $1,866,260 to Medicare and $73,268 to Medi-Cal.
The evidence presented at trial showed that Walter-Eze, the former owner of Ezcor, a durable medical equipment (DME) supply company located in Valencia, California, fraudulently billed more than $3.5 million to Medicare and Medi-Cal for DME that was not medically necessary. The trial evidence also demonstrated that Walter-Eze paid illegal kickbacks to patient recruiters in exchange for patient referrals. The evidence further showed that Walter-Eze paid kickbacks to physicians for fraudulent prescriptions for medically unnecessary, and expensive, power wheelchairs, which prescriptions Walter-Eze then used to support her fraudulent claims to Medicare and Medi-Cal. The evidence showed that, between 2007 and 2012, Walter-Eze submitted $3,521,786 in fraudulent claims to Medicare and Medi-Cal, and that she received $1,939,529 in reimbursement for those claims.
The case was investigated by the FBI, HHS-OIG’s Los Angeles Regional Office and the California Department of Justice, 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 of the Central District of California. The case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter 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 over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team, go to: www.stopmedicarefraud.gov.
Former Law Enforcement Officer Sentenced to Federal Prison for Possession of Child PornographyRead the Press Release
In Austin today, a former Galveston Police officer and former security officer with the Texas Attorney General’s Office was sentenced to 90 months in federal prison for possession of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Sam Sparks, ordered that 60-year-old Jose Luis Gardea be placed on supervised release for a period of ten years after completing his prison term and to register as a sex offender.
On March 3, 2015, Gardea pleaded guilty to one count of possession of child pornography. By pleading guilty, Gardea admitted he possessed child pornography on a USB thumb drive, and through an email account. According to court documents, Gardea uploaded child pornography images using Tumblr, an online social media provider. A search of Gardea’s work space at the Texas Attorney General’s Office uncovered a USB thumb drive which had 178 images of females under the age of 18, many of whom were depicted in sexually suggestive and lascivious poses.
“The United States Attorney’s Office will continue to work with local, state, and federal agencies to prosecute predators who victimize children by creating, possessing, and distributing child pornography. Children are some of our most vulnerable victims. Today’s sentence ensures that Mr. Gardea has been punished and will not pose a threat to children for some time to come,” announced Acting United States Attorney Richard L. Durbin, Jr.
This investigation was conducted by the FBI together with the Texas Attorney General’s Office. Assistant United States Attorney Matthew Devlin prosecuted this case on behalf of the Government.
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Former High School Teacher Pleads Guilty to Possessing Child PornographyRead the Press Release
Greenbelt, Maryland –Peter Flynn, age 61, of Silver Spring, Maryland pleaded guilty today to possessing child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Flynn is a former special education teacher in Montgomery County. According to his plea agreement, on April 3, 2014, a Maryland State Police Corporal was conducting an online investigation into individuals sharing child pornography on a file sharing network. The MSP Corporal downloaded approximately 205 images and videos of children engaged in sexually explicit conduct that Flynn made available through the file sharing network.
On September 30, 2014, law enforcement executed a search warrant at Flynn’s residence and seized two computers from his basement. Flynn also agreed to be interviewed and admitted that law enforcement would find child pornography on his computer. A subsequent forensic analysis revealed approximately 28,785 image and 795 videos of child pornography and child erotica on the two computers, the majority of which constituted child pornography. Some of the images documented the sexual abuse of prepubescent children, including bondage and violence.
Flynn and the government have agreed that if the Court accepts the plea agreement Flynn will be sentenced to between 24 and 78 months in prison. U.S. District Judge George Jarrod Hazel has scheduled sentencing for October 19, 2015 at 10:00 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the Maryland State Police Internet Crimes Against Children Task Force and HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Conor M. Mulroe of the U.S. Department of Justice, who are prosecuting the case.
Former El Paso County Juvenile Probation Officer/Gang Member Sentenced to 18 Years in Federal Prison for Sex Trafficking ViolationsRead the Press Release
In El Paso this morning, 30-year-old Timothy Keith McCullouch, Jr., a former El Paso County Juvenile Probation Officer, who is also a Folk Nation/Gangster Disciples member, was sentenced to 18 years in federal prison for federal sex trafficking violations announced Acting United States Attorney Richard L. Durbin, Jr., Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez and Federal Bureau of Investigation (FBI) 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 McCullouch pay a $2,500 fine and be placed on supervised release for a period of ten years after completing his prison term.
On January 16, 2015, jurors found Timothy McCullouch, Jr. and three other gang members—25-year-old Richard Gray, 26-year-old Deion Lockhart and 24-year-old Emmanual Lockhart—guilty of conspiracy to commit sex trafficking of persons.
Testimony during trial revealed that between May 2012 and March 2013, the defendants were involved in the forced prostitution of juveniles and adults by the Folk Nation/Gangster Disciples street gang. The defendants used a combination of force, fraud, and coercion to compel their victims to engage in sexual activities for money in El Paso; Killeen, TX; Albuquerque, NM; Las Vegas, NV; and, in Colorado.
On June 26, 2015, Judge Martinez sentenced Emmanual Lockhart to 20 years imprisonment, Deion Lockhart to 25 years imprisonment, and Richard Gray to life imprisonment for their roles in the sex trafficking scheme.
This investigation was conducted by the ACTeam (Anti-Trafficking Coordination Team) comprised of personnel from Homeland Security Investigations (HSI), Federal Bureau of Investigation (FBI), and U.S. Department of Labor together with the El Paso Police Department Gang Unit and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Assistant United States Attorneys Rifian Newaz and Robert Almonte prosecuted these defendants on behalf of the Government.
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Former DEA Employee Sentenced to Two Years in Prison for Credit Card Fraud SchemeRead the Press Release
Used Fraudulently Acquired Government Credit Cards to Obtain Over $113,000 in Cash
A former Drug Enforcement Administration (DEA) employee was sentenced today to two years in prison for defrauding JPMorgan Chase & Co. out of more than $113,000 using fraudulently issued government credit cards.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Michael P. Tompkins of the the Department of Justice Office of the Inspector General’s (DOJ OIG) Washington, D.C. Field Office made the announcement.
Keenya Meshell Banks, 41, of Upper Marlboro, Maryland, pleaded guilty in April 2015 to one count of wire fraud. In addition to imposing the term of imprisonment, U.S. District Judge Deborah K. Chasanow ordered Banks to pay restitution in the amount of $113,841.
According to her plea agreement, Banks was employed by the DEA as a Program Manager, and was responsible for the approval and issuance of government credit cards to DEA employees. Banks admitted that, while serving in that role, she submitted dozens of fake credit card applications to JPMorgan Chase & Co. for fictitious DEA employees, using names and identifying information of individuals who did not work at the DEA. In at least one instance, however, Banks submitted the identifying information of an actual DEA employee. Through this scheme, Banks admitted that she obtained at least 32 fraudulent credit cards, which she then used to withdraw more than $113,000 from ATMs in Maryland and Northern Virginia. As part of her plea agreement, Banks agreed to forfeit the proceeds she received as a result of the scheme and to pay full restitution.
The case was investigated by the DOJ OIG. The case was prosecuted by Trial Attorneys Richard B. Evans and Justin Weitz of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Thomas P. Windom of the District of Maryland.
Former Community College Employee Charged with Theft for Using College Funds to Purchase $179,500 of Items and Selling Them OnlineRead the Press Release
CHARLOTTE, N.C. – A criminal bill of information was filed today in federal court charging Mary S. Sherrill, 52, of Hickory, N.C. with theft of a program receiving federal funds, for using her employer’s funds to purchase approximately $179,000 worth of items and selling them over the Internet, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.
Robert W. Rolin, Jr. Acting Special Agent in Charge of the United States Secret Service, Charlotte Field Office joins Acting U.S. Attorney Rose in making today’s announcement.
According to filed court documents, from about October 2010 to December 2014, Sherrill was employed by Catawba Valley Community College in Hickory as purchasing coordinator. Court records show that as the college’s purchasing coordinator, Sherrill was authorized to place orders for equipment and other goods on behalf of the college and to pay using the college’s funds. Filed court documents show that Sherrill fraudulently and without authority used the college’s funds to purchase computer hard drives, printer cartridges, and other small computer-related items. According to court records, Sherrill then sold the items via the Internet using her personal eBay seller account and kept the profits. Court records show that Sherrill purchased approximately $179,000 worth of items using the college’s monies.
A signed plea agreement was also filed in federal court today, and Sherrill is expected to enter her guilty plea before a U.S. Magistrate judge when the hearing is scheduled by the Court. The charge levied against Sherrill carries a maximum of 10 years in prison and a $250,000 fine. As part of her plea agreement, Sherrill has agreed to pay restitution, the amount of which will be determined by the Court.
The case was investigated by the U.S. Secret Service. Assistant U.S. Attorney Corey F. Ellis is in charge of the prosecution.
Former CEO and CFO of the Bank of Oswego Indicted for Conspiracy to Commit Bank FraudRead the Press Release
PORTLAND, Ore. – A federal grand jury returned an indictment charging Diana Yates of Sherwood, Oregon and Dan Heine, of Naples, Florida, with one count of conspiring to defraud The Bank of Oswego. The grand jury also charged Heine and Yates with 26 counts of false entries in bank records. Both were arrested on Friday and Yates made her appearance in Portland, Oregon before the Honorable John Acosta. Heine was arraigned in the Middle District of Florida and will make an appearance in the District of Oregon on a later date next month.
Heine is the former Chief Executive Officer of the Bank of Oswego and Yates is its former Chief Financial Officer. The indictment alleges that between September 2009 and through 2014, Heine and Yates conspired to defraud the Bank of Oswego. The purpose of the conspiracy was to deceive the Bank’s Board of Directors, its shareholders, regulators and the public by representing that the Bank was in a much better financial position than it actually was. The defendants achieved this by using Bank or third-party proceeds to pay delinquent loans of customers, mischaracterizing assets in reports to the Board of Directors of the Bank and the Federal Deposit Insurance Corporation (FDIC), and concealing information about loans to bank insiders. The indictment further alleges that Heine and Yates made false entries in the Bank’s reports to the FDIC and to the Bank’s Board of Directors about the status of various loans and transactions.
“Our community and economy depend on the integrity of our financial institutions and the officers charged with ensuring their safety and soundness,” stated Acting U.S. Attorney Billy J. Williams. “Officers who make material misrepresentations about these institutions’ financial well-being will be prosecuted in this District. We are grateful to our law enforcement partners at the FDIC Office of Inspector General and the Federal Bureau of Investigation for their work on this case.”
"The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the United States Attorney’s Office for the District of Oregon and with the Federal Bureau of Investigation (FBI) in defending the integrity of the financial services industry,” said Wade Walters, Special Agent in Charge for the FDIC’s, Office of Inspector General. “We are particularly concerned when senior bank officials, who are in positions of trust within their institutions, are alleged to have falsified financial records to deceive the regulators and the public as to the true condition of their banks. We are committed to helping maintain the safety and soundness of the Nation’s financial institutions.”
“Americans have a right to expect that their financial institutions - and the people who run them - are working to keep their money safe and secure,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon. “When that trust is broken, the impacts on the community, the shareholders and the customers are very real. As alleged in this indictment, the damage estimates can soar into the millions of dollars.”
Each charge carries a maximum sentence of thirty (30) years in prison. If convicted, the defendants face a maximum of thirty years in prison for each count.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
The Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of the Inspector General conducted the investigation. Assistant U.S. Attorneys Claire Fay and Michelle Holman Kerin are prosecuting the case.
Financial Customer Service Specialist to Plead Guilty to Bilking Sisters’ Estate of $1.2 Million DollarsRead the Press Release
PROVIDENCE, R.I. – A former financial customer service specialist for Columbia Management Investment Services (CMIS), a subsidiary of Ameriprise Financial, is expected to plead guilty in federal court in Providence to defrauding the estate of two deceased sisters from Galway, Ireland of more than $1.2 million dollars, announced United States Attorney Peter F. Neronha and Ted A. Arruda, Resident Agent in Charge of the Providence Office of the United States Secret Service.
Ronald Hunt, 44, of Collinsville, Ill., formerly of Bristol, R.I., has been charged by way of an information with one count of wire fraud. A plea agreement in this matter was filed today in U.S. District Court in Providence.
According to court documents, it is alleged that in March 2013, Hunt, while working at a CMIS call center in Providence, used his position to research deceased clients who had unredeemed Ameriprise Financial accounts and no listed beneficiaries. During his research, it is alleged that Hunt identified two such accounts belonging to deceased sisters in Galway, Ireland.
Court documents allege that in May 2013, Hunt established a fictitious business bank account at a Rhode Island bank branch office under the name “Celtic Savings,” located in Bristol, R.I. It is further alleged that two days later, Hunt applied for a mutual fund account, also under the name “Celtic Savings.”
It is alleged that on May 19, 2013, Hunt submitted redemption paperwork for the two sisters’ CMIS accounts, using the alias “Sean Kane” as the fictitious executor for both accounts. It is alleged that on May 20, 2013, using the fictitious “Sean Kane” alias, Hunt transferred $769,242.24 from one sister’s account and $459,531.91 from the second sister’s account into a CMIS account he created. Two days later he transferred the entire amount, $1,228,774.15, to the fictitious business account he created in Rhode Island.
On May 23, 2013 and again on August 29, 2013, Hunt withdrew a total of $750,000.00 from his “Celtic Savings” business account.
An information is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt. Wire fraud is punishable by statutory penalties of up to 20 years imprisonment and a fine of up to $250,000.
The case against Ronald Hunt is being prosecuted by Assistant U.S. Attorney Terrence P. Donnelly.
The matter was investigated by the United States Secret Service, with the assistance of the Securities and Exchange Commission, Division of Enforcement.
Criminal Information and Plea Agreement (4.97 MB)
Faulkton Man Sentenced for Possession of Ammunition by a Prohibited PersonRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Faulkton, South Dakota, man convicted of Possession of Ammunition by a Prohibited Person was sentenced on June 22, 2015, by U.S. District Judge Roberto A. Lange.
Frank Facinelli, age 43, was sentenced to 12 months and 1 day in custody, followed by 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Facinelli was indicted by a federal grand jury on July 15, 2014. He pled guilty on April 6, 2015
Facinelli, who had multiple felony convictions, was convicted of Third Offense felony Driving Under the Influence in 2012 in Faulk County. In October 2014, a parole search of Facinelli’s residence in Faulk County confirmed the presence of approximately 1,000 rounds of ammunition.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Jay Miller prosecuted the case.
Facinelli was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Eileen M. Decker Sworn in as United States AttorneyRead the Press Release
LOS ANGELES – Eileen M. Decker was sworn in today in a private ceremony as the United States Attorney for the Central District of California.
Decker was sworn in by United States District Judge Beverly Reid O’Connell in her courtroom in the United States Courthouse.
Decker now leads the largest United States Attorney’s Office outside of the District of Columbia. The office, which currently employs approximately 250 attorneys, serves more than 19 million residents in the counties of Los Angeles, Orange, Riverside, San Bernardino, Ventura, Santa Barbara and San Luis Obispo.
“It is a great honor to lead the United States Attorney’s Office,” Decker said today. “It is an office with a great legacy of prosecuting some of the most significant and difficult cases in the nation, and I look forward to building on that legacy in the years to come. I also look forward to working in close partnership with our federal, state and local law enforcement partners in achieving greater public safety throughout the district.”
After being unanimously confirmed by the United States Senate on June 11, Decker was given a four-year appointment by President Barack Obama. Decker succeeds United States Attorney André Birotte Jr., who resigned to become a United States District Judge in August 2014.
Prior to becoming the United States Attorney, Decker was the Deputy Mayor for Homeland Security and Public Safety for the City of Los Angeles, and served in the administrations of Mayor Eric Garcetti and Mayor Antonio Villaraigosa. As Deputy Mayor, Decker was responsible for matters related to the police department, fire department and emergency management department. In addition, she was the principle government liaison to all federal law enforcement agencies for the City of Los Angeles.
Decker was an Assistant United States Attorney from 1995 until 2009, during which time she prosecuted cases in the office’s national security, fraud and violent crime sections. For most of her nearly 15 years as an Assistant United States Attorney, Decker acted as a supervisor, serving as the Chief of the National Security Section (2007 - 2009), Deputy Chief of the Organized Crime and Terrorism Section (2002 – 2007), and Deputy Chief of the Organized Crime Strike Force (1999 – 2002).
From 1990 to 1991, and again from 1992 until 1995, Decker worked in private practice in Los Angeles at the law firm of Gibson, Dunn & Crutcher. From 1991 until 1992, she served as a law clerk to U.S. District Judge Gary L. Taylor in the Central District of California.
Decker received her undergraduate and law degrees from New York University. She also received a Master’s Degree in Homeland Security Studies from the Naval Postgraduate School.
Dexter Man Sentenced to Almost Seven Years for Pharmacy RobberyRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Michael Thompson, 27, of Dexter, Maine, was sentenced today in U.S. District Court by Judge John A Woodcock, Jr., to 82 months in prison and three years of supervised release for pharmacy robbery. He was also ordered to pay $5,178.58 in restitution. He pleaded guilty to the charge on December 9, 2014.
According to court records, on March 10, 2012, Thompson entered the Rite Aid pharmacy in Guilford, Maine wearing a bandana, a hood, sunglasses and gloves. He jumped over the pharmacy counter, brandished a large hunting style knife and demanded narcotics. A pharmacist opened the locker containing narcotics and Thompson filled his back pack with more than $5000 worth of them.
The investigation was conducted by the Piscataquis County Sheriff’s Office, the Maine State Police, the Federal Bureau of Investigation and the Somerset County Sheriff’s Office.
Cybercriminal Sentenced to 50 Months for His Role in Hacking CampaignRead the Press Release
Earlier today at the federal courthouse in Brooklyn, Qendrim Dobruna, a member of an international cybercrime syndicate, was sentenced to 50 months’ imprisonment and restitution in the amount of $14 million for his role in hacking into the computer systems of U.S.-based financial institutions, stealing prepaid debit card data, and eliminating withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals in excess of $14 million in a single weekend. The sentencing was held before U.S. District Judge I. Leo Glasser. Dobruna pleaded guilty to bank fraud on July 11, 2014.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Robert J. Sica, Special Agent in Charge, United States Secret Service, New York Field Office.
“The defendants and his co-conspirators participated in a massive 21st century heist that stretched around the globe. Using sophisticated methods, the organization reached into the computer systems of American-based corporations and transmitted illegally obtained private financial information to confederates in 18 different countries who stole millions of dollars from hundreds of ATMs in a matter of hours,” stated Acting United States Attorney Currie. “Today’s sentence serves as a warning to cybercriminals around the world that law enforcement is committed to solving these cybercrimes, no matter how sophisticated, and bringing the perpetrators to justice, wherever they may be found.”
“This operation demonstrates that combining international law enforcement resources sends a strong message to criminals, that there is no such thing as anonymity in the cyber world. Secret Service agents utilize state-of-the-art investigative techniques to identify and pursue cyber criminals around the world. The adverse impact this individual and other transnational organized criminal groups have on our nation's financial infrastructure is significant and should not be underestimated," said Secret Service Special Agent in Charge Robert J. Sica.”
Between approximately February 27, 2011 and March 1, 2011, the defendant and his co-conspirators conducted an “Unlimited Operation,” which begins when the cybercrime organization hacks into the computer systems of a credit card processor, compromises prepaid debit card accounts, and essentially eliminates the withdrawal limits and account balances of those accounts. The elimination of withdrawal limits enables the hackers and their co-conspirators to withdraw unlimited amounts of cash until the operation is shut down. Next, the cybercrime organization cashes in, by distributing the hacked prepaid debit card numbers to trusted associates around the world, who then immediately withdraw cash from ATMs across the globe. At the end of an operation, when the cards are finally shut down, the casher cells launder the proceeds – often investing the operation’s proceeds in luxury goods – and kick back money to the cybercrime organization’s leaders. On February 27, 2011, hackers targeted a credit card processor that processed transactions for prepaid debit cards issued by the American Red Cross for disaster relief victims. After the hackers penetrated the credit card processor’s computer network, compromised the American Red Cross prepaid card accounts, and manipulated the balances and withdrawal limits, casher cells across the globe operated a coordinated ATM withdrawal campaign. In total, more than 15,000 ATM transactions were conducted in approximately 18 countries around the world using 21 compromised American Red Cross disaster relief prepaid cards, resulting in approximately $14 million in losses to the credit card processor and the American Red Cross.
The defendant, from his apartment in Stuttgart, Germany, participated in the cyber-attack by obtaining account information from the co-conspirators who directly hacked into the U.S.-based financial institution’s database and selling that account information to other co-conspirators over the Internet, including to an individual in Brooklyn, New York.
In announcing the guilty plea, Acting United States Attorney Currie praised the extraordinary efforts of the Secret Service in responding so rapidly to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally. Mr. Currie also thanked the American Red Cross for their cooperation with this investigation.
The government’s case is being prosecuted by Assistant United States Attorney Amir H. Toossi.
The Defendant:
QENDRIM DOBRUNA
Age: 29
Credit Manipulator Sentenced to Two Years in Prison for Mail FraudRead the Press Release
SACRAMENTO, Calif. — United States District Judge William B. Shubb sentenced Ricky Lamont Flemings, 31, of Antelope, to two years in prison for two counts of mail fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Flemings engaged in a long-running scheme to deceive Experian and the other credit reporting agencies by exploiting provisions in the Fair Credit Reporting Act (FCRA), a statute intended to provide consumer protections to individuals. From 2005 until November 12, 2009, Flemings engaged Experian on multiple occasions and falsely reported that he was the victim of identity theft. During that period, Flemings demanded that Experian remove derogatory and other entries from his credit report. However, as he well knew, many of those entries were proper and were the result of his having sought credit or purchased items on credit.
In total, as a result of Flemings’s false statements, Experian blocked 162 inquiries and 40 trade lines from his credit report. Once those trade lines and inquiries were blocked, Flemings then sought further extensions of credit, relying on the fact that creditors would be unable to access the fraudulently blocked entries. As a result, Flemings appeared to be a better credit risk than he actually was.
For instance, between July 9, 2009, and September 5, 2009, Flemings received financing from Schools Financial Credit Union (SFCU), a federally insured credit union, to refinance a 2005 Lincoln Navigator and to purchase a 2006 Monterey boat. The loans were approved after SFCU examined a credit report that did not include fraudulently blocked entries. After receiving credit for the Lincoln and boat, Flemings contacted Experian and reported that the entries on his credit report related to these two items were fraudulent and should be removed.
This case was the product of an investigation by the United States Secret Service and the Placer County Sheriff’s Office. Assistant United States Attorney André M. Espinosa prosecuted the case.
Company with Federal and State Contracts to Pay $390K to Resolve Allegations it Had Unqualified EmployeeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and George C. Jepsen, Attorney General for the State of Connecticut, today announced that GARG CONSULTING SERVICES, INC. (“GARG”) has entered into a civil settlement agreement with the federal government and the State of Connecticut in which GARG will pay $390,000 to resolve allegations that the Rocky Hill-based company failed to authenticate an employee’s purported educational credentials and a professional certification before hiring and assigning him to work on various U.S. Department of Transportation-funded and state-funded highway projects, and on a bridge reconstruction project funded by the National Railroad Passenger Corporation (“Amtrak”).
According to allegations contained in the settlement agreement, GARG provided construction management and inspection services as a contractor or subcontractor for Connecticut Department of Transportation (“CONNDOT”) projects and for an Amtrak project. In 2007, an individual applied for employment with GARG and represented that he was a college graduate with a degree in civil engineering management and with Engineer-in-Training (“EIT”) certification from the State of Connecticut. If appropriate employee screening had been done, GARG would have learned that the employee had not graduated from college and had never sought or obtained EIT certification.
The employee worked at GARG from May 2007 to May 2010. During this time, GARG was a contractor or subcontractor on several federal and state highway and bridge projects. The employee also worked on a GARG subcontract for engineering consulting and professional services related to Amtrak’s replacement of the movable span on the Thames River Bridge. On the CONNDOT and Amtrak projects, GARG submitted payroll invoices for work performed by the company’s employees, including for work performed by the unqualified employee. The contracts and subcontracts entered into by GARG required that the company provide qualified personnel to work on the CONNDOT and Amtrak projects, and GARG submitted project proposals containing the employee’s purported credentials and qualifications. In addition, both CONNDOT and Amtrak were contractually reliant on GARG to provide qualified personnel.
“It is imperative that our roads, bridges and other components of our critical infrastructure are constructed, maintained and inspected only by qualified individuals,” said U.S. Attorney Daly. “This case sends a clear message that government contractors that do not properly vet all of their employees risk investigation and a heavy financial penalty.”
U.S. Attorney Daly also noted that GARG cooperated with the government’s investigation.
“Certifications are critically important, especially in major engineering projects where proper procedures and training help to ensure the safety of the general public,” said Attorney General Jepsen. “Employers have a responsibility to make very sure that their employees are properly certified for the jobs that they are expected to perform. I’m pleased that this matter has been resolved.”
“This investigation demonstrates our commitment to maintaining the integrity of federal acquisition and hiring processes, which is an oversight priority for the Office of Inspector General,” said Todd Damiani, Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General.
“Our investigation sends a strong message to all contractors about their obligation to employ qualified persons to work on critical transportation infrastructure projects,” said Amtrak Inspector General Tom Howard.
As a result of the settlement, there will be no lawsuit filed against GARG regarding the conduct alleged in the settlement agreement. In entering into the settlement, GARG did not admit liability or wrongdoing, and the agreement indicates that the parties settled this matter to avoid the delay, uncertainty, inconvenience, and expense of litigation.
This investigation was conducted by the U.S. Department of Transportation’s Office of Inspector General and Amtrak’s Office of Inspector General. The matter was handled within the U.S. Attorney’s Office by Assistant U.S. Attorney William A. Collier and Auditor Susan N. Spiegel.
Carlisle Resident Sentenced to 30 Year Prison Term for Child AbuseRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today in Harrisburg that Chief U.S. District Court Judge Christopher C. Conner sentenced Zachary Knight, of Carlisle to 30 years imprisonment for sexual abuse of a minor.
According to United States Attorney Peter Smith, Knight, age 20, pleaded guilty in April 2015 to charges of aggravated sexual abuse of a minor and production of child pornography. The plea was entered pursuant to a plea agreement.
Knight, a resident of a housing area at the U.S. Army War College, was taken into custody by HSI special agents on May 9, 2014. Chief Judge Conner ordered that the 30-year sentenced imposed today will be followed by 25 years of supervised release during which Knight will have restrictions on his contact with minors and his computer use and will be prohibited from contact of any kind with the victim or the victim’s family. According to the government’s evidence, Knight committed the crimes while providing babysitting services for the victim’s family. The evidence included videos Knight made of his abusive acts involving the minor.
The investigation was conducted by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) inter-agency child exploitation task force, with assistance from the U.S. Army Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney James T. Clancy.
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Camdenton Man Sentenced for $1.2 Million K2 Distribution at Lebanon StoreRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Camdenton, Mo., man was sentenced in federal court today for a mail fraud scheme that involved the distribution of more than $1.2 million of synthetic marijuana, commonly referred to as K2, from a head shop in Lebanon, Mo.
Stephen Brian Reynolds, 36, of Camdenton, Mo., was sentenced by U.S. District Judge Beth Phillips to six years in federal prison without parole. The court also ordered Reynolds to forfeit to the government $1,167,990, which was obtained from the distribution of K2, as well as real estate in Eldridge, Mo., funds in bank accounts, approximately $128,000 that was seized from Reynolds’s residence and a safe deposit box, a 2012 Jeep Grand Cherokee, a 2007 Ducati 1098 motorcycle, three pistols, two rifles and a shotgun.
Reynolds, the owner of Lucky’s Novelties in Lebanon, pleaded guilty on Aug. 15, 2014, to participating in a conspiracy to commit mail fraud and to one count of money laundering.
His brother, Eric Scott Reynolds, 33, of Lebanon, was employed at Lucky’s Novelties. Eric Reynolds has also pleaded guilty to his role in the mail fraud conspiracy and to participating in a money-laundering conspiracy. Eric Reynolds, whose bond has been revoked, remains in federal custody pending his sentencing hearing.
Stephen and Eric Reynolds both admitted they participated in a conspiracy to commit mail fraud from March 1, 2011, to Dec. 11, 2012. They defrauded the Food and Drug Administration and the public by using mail deliveries in a conspiracy to distribute several products that were labeled as “incense” or “potpourri” and “not for human consumption,” when in reality these substances were synthetic marijuana intended for human consumption as a drug.
Between Sept. 15, 2011, and July 25, 2012, Stephen and Eric Reynolds deposited $1,245,761 in proceeds from the distribution of K2 into bank accounts and a safety deposit box. Based upon DEA undercover purchases, they charged approximately $1 for every 300 mg of K2. Therefore, they distributed approximately 373 kilograms of K2.
Reynolds was also part-owner of a Springfield, Mo., head shop known as Doobies, which he supplied with wholesale quantities of synthetic marijuana for distribution and from which he received 40 percent of the profits. His partners have also been sentenced in a separate but related case for their roles in a mail fraud conspiracy. Travis Basford, 30, of St. Robert, Mo., was sentenced to six years in federal prison without parole. Kerry Lee Long, 24, of Springfield, was sentenced to two years and six months in federal prison without parole.
Today’s sentencing also reflects the court’s finding that Stephen Reynolds was in possession of firearms in connection with the offense. When DEA agents searched his residence, they seized a Smith and Wesson .380-caliber pistol, a Ruger .380-caliber pistol, an FHN 5.7-caliber pistol, a Ruger AR-15 rifle, a Bushmaster ACR rifle, a Winchester 12-gauge shotgun, body armor and ammunition. Agents also seized cardboard boxes containing synthetic cannabinoids weighing approximately 58 kilograms. Agents also seized $7,506 from a safe in the garage. Law enforcement officers also executed a search warrant at Lucky’s Novelties and seized a handgun.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigations, the Laclede County, Mo., Sheriff’s Department, the Lebanon, Mo., Police Department and the Lake Area Narcotics Enforcement Group (LANEG).
Buffalo Man Sentenced on Aggravated Identity Theft and Other ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Clifton Jackson, 46, of Buffalo, NY, who was convicted following a jury trial of 58 felony counts including conspiracy to unlawfully use Social Security numbers, conspiracy for the filing of false tax returns, filing false tax returns, aggravated identity theft, misuse of social security numbers and theft of government property, was sentenced to 140 months in prison by U.S. District Judge Geoffrey L. Crawford.
“With this ‘get rich quick’ scheme, this defendant sought to victimize both the Government and multiple individuals,” said U.S. Attorney Hochul. “Thanks to the efforts of our federal partners, the defendant’s scheme came to a halt and he will now spend the next 11 years behind bars for his actions. Let this case also serve as a reminder to the public that the Government does not give money away to individuals for providing simple information such as name and date of birth.”
IRS-Criminal Investigation Special Agent in Charge Shantelle P. Kitchen said: “Mr. Jackson’s 140 month prison sentence demonstrates the severe consequences of committing tax fraud using stolen identities. This investigation provides another illustration of the Government’s commitment to fighting this problem.”
Assistant U.S. Attorneys Trini E. Ross and John E. Rogowski, who handled the prosecution of the case, stated that the defendant devised a scheme to defraud individuals and the United States Government by obtaining and using the names, social security numbers and dates of birth issued to over 80 individuals. Jackson then used that information to file fraudulent tax returns for the tax year 2011with the IRS.
The defendant obtained the information by telling individuals that if they provided names, social security numbers and dates of birth, they could receive money from the Government. Jackson also recruited other individuals to provide additional names, social security numbers and dates of birth.
The Government presented more than 60 witnesses during the trial. These witnesses included over 20 individuals who were victimized by the defendant. Over the duration of the scheme, Jackson attempted to defraud the IRS of more than $550,000.
Jackson is currently serving a 10 year state sentenced in Ohio for a drug conviction. Three other defendants were charged and convicted in this case.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, Buffalo Office, under the direction of Supervisory Special Agent Michael Rivera, and the United States Postal Inspection Service under the direction of Shelly Binkowski, Inspector in Charge, Boston Division.Austin Businesswoman Sentenced to Federal Prison for Filing Fraudulent Tax ReturnRead the Press Release
In Austin today, 42-year-old Adela Perez was sentenced to 28 months in federal prison for filing a fraudulent tax return announced Acting United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
In addition to the prison term, United States District Judge Sam Sparks ordered that Perez be placed on supervised release for a period of one year and pay the IRS $99,271 in restitution.
On March 24, 2015, Perez pleaded guilty to one count of filing a fraudulent tax return. By pleading guilty, Perez admitted that from 2008 to 2012, she filed 34 tax returns on behalf of her clients that included fraudulent business expenses in order for her clients to reduce their taxable income and receive higher refunds.
This case was investigated by the IRS-CI. Assistant United States Attorney Michael C. Galdo prosecuted this case on behalf of the Government.
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Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Arizona State Legislature v. Arizona Independent Redistricting CommissionRead the Press Release
Attorney General Loretta E. Lynch released the following statement today after the Supreme Court ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission:
“I am pleased that the Supreme Court has vindicated the rights of voters who want their electoral districts drawn fairly, independently and without undue emphasis on partisan affiliation or political creed. Arizona’s approach to redistricting is an innovative and effective advance in the effort to reduce gerrymandering and give all Americans an opportunity to make their voices heard. Today’s decision is a victory for the people of Arizona, for the promise of fair and competitive elections and for the principles of democratic self-governance that make our nation exceptional.”
Arrested with Dozens of Counterfeit Credit Cards, Texas Man Pleads Guilty to Bank Fraud, Wire FraudRead the Press Release
WICHITA, KAN. – A Texas man who was arrested with dozens of counterfeit credit cards pleaded guilty Monday to federal bank fraud and wire fraud charges, U.S. Attorney Barry Grissom said.
Justin Russell Bennett, 29, pleaded guilty to one count of bank fraud, one count of wire fraud, one count of using a counterfeit credit card, one count of using an embossing machine to create counterfeit credit cards, one count of possession of 15 or more counterfeit credit cards and one count of aggravated identity theft.
Bennett was arrested Sept. 22, 2014, when he ran out of gas on Interstate 70 in Sherman County, Kan. Officers seized 47 counterfeit credit cards, an embossing machine, thousands of blank credit cards and other materials used to create counterfeit cards. He used counterfeit credit cards to rent vehicles, rent motel rooms, purchase items he sold through Internet sites and obtain cash advances.
Sentencing is set for Sept. 14. The crimes carry the following penalties:
Bank fraud: A maximum penalty of 30 years and a fine up to $1 million.
Wire fraud: A maximum penalty of 20 years and a fine up to $250,000.
Using a counterfeit credit card: A maximum penalty of 10 years and a fine up to $250,000.
Using an embossing machine to create counterfeit cards: A maximum penalty of 15 years and a fine up to $250,000.
Possession of 15 or more counterfeit cards: A maximum penalty of 10 years and a fine up to $250,000.
Aggravated identity theft: A mandatory two years consecutive to other sentences and a fine up to $250,000.
The Sherman County Sheriff’s Office and the U.S. Secret Service investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Anchorage Man Sentenced to 18 Years in Prison for Drug Death of 14 Year-Old GirlRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that Sean Michael Warner was sentenced in federal court in Anchorage for one count of distribution of heroin. Warner previously pled guilty on September 2, 2014 to distributing heroin. At that hearing, Warner admitted to personally injecting a 14-year-old minor with heroin on December 23, 2011. Warner also admitted that the injection of heroin caused the death of the minor, identified in court documents as J.D.
Warner, 29, was sentenced today by United States District Court Judge Sharon L. Gleason, to 18 years in prison.
According to Assistant U.S. Attorney Bryan Schroder, Warner injected J.D. twice during the evening of December 22, 2011, and into the early morning hours of December 23rd. When she later went into distress at approximately 9:30 a.m., Warner refused to call for assistance. He finally called 911 at 1:36 p.m. J.D. died on December 29, 2011.
In issuing the sentence, Judge Gleason recognized the grave seriousness of the offense of injecting the young victim with heroin, and especially disregarding her distress.
Ms. Loeffler stated, “This case and the tragedy of the death of this young victim highlights the scourge of heroin and the horrible impact it has on our community.”
Ms. Loeffler commends the Drug Enforcement Administration, the Anchorage Police Department, the U.S. Marshal’s Service, the Federal Bureau of Investigation (FBI), the FBI Laboratory, and the Kenai Police Department for the investigation of this case. This case was originally prosecuted in cooperation with the Anchorage District Attorney’s Office and the Alaska Department of Law.