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24 June 2015
Former Lowndes County, Georgia, Sheriff's Deputy and Civilian Co-Conspirators Sentenced for Civil Rights Conspiracy ChallengeRead the Press Release
Former Lowndes County Sheriff’s Deputy Jason Stacks, 29, was sentenced today to serve 21 months in prison and two years supervised release for his role in a civil rights conspiracy aimed at stealing money from Hispanic motorists, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division and U. S. Attorney Michael J. Moore of the Middle District of Georgia. Also sentenced today were two civilians – Gloria Gallego and Miguel Angel Reyes – who will serve 24 months and 30 months in prison, respectively, as well as three years supervised release for conspiring with Stacks to use his law enforcement authority to unlawfully detain and steal money from the motorists.
On May 6, 2014, Stacks pleaded guilty to a civil rights conspiracy charge, admitting that he participated in a plan with the civilians to subject Hispanic motorists to unlawful traffic stops so that his co-conspirators could then demand that the motorists pay money in order to avoid arrest and/or deportation. On Mar. 26, 2015, Gallego and Reyes pleaded guilty to the same charge. According to information made public in the plea hearings, Stacks, while acting as a sheriff’s deputy, unlawfully detained at least four motorists on Aug. 17, 2013. One of the motorists, who was identified in the plea documents by the initials T.C., was unlawfully detained by Stacks and then approached by Gallego and Reyes, who posed as bilingual passers-by who wanted to help T.C. Gallego and Reyes told T.C. in Spanish that he would be sent to jail or deported if he did not pay them $500. When T.C. responded that he did not have $500 in his car, the conspirators agreed to let T.C. go home to get the money from his relatives. Gallego and Reyes drove T.C. to his residence and took $300 in cash from him. Stacks, Gallego, and Reyes then divided the money among them.
“Stacks abused his authority by engaging in a scheme with two accomplices to target and steal money from those he was sworn to protect,” said Principal Deputy Assistant Attorney General Gupta. “The Justice Department will hold accountable officers who violate their oath by violating the civil rights of members of the public.”
“Law enforcement officers take an oath to protect and serve the public and, based on the duty and responsibility that imposes, the public in turn invests them with great authority and respect,” said U.S. Attorney Moore. “The abuse of that power and authority, such as happened here, lessens that respect and trust by the public in all law enforcement, thus victimizing not only the victims specifically targeted but all law enforcement officers everywhere as well as the public generally.”
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorney Risa Berkower of the Justice Department’s Civil Rights Division, with the assistance of the United States Attorney’s Office for the Middle District of Georgia and the Lowndes County Sheriff’s Office.
Former Lowndes County, Georgia Sheriff's Deputy and Civilian Co-Conspirators Sentenced for Civil Rights Conspiracy ChargeRead the Press Release
WASHINGTON – Former Lowndes County Sheriff’s Deputy Jason Stacks, 29, was sentenced today to serve 21 months in prison and two years supervised release for his role in a civil rights conspiracy aimed at stealing money from Hispanic motorists, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division and U. S. Attorney Michael J. Moore of the Middle District of Georgia. Also sentenced today were two civilians – Gloria Gallego and Miguel Angel Reyes – who will serve 24 months and 30 months in prison, respectively, as well as three years supervised release for conspiring with Stacks to use his law enforcement authority to unlawfully detain and steal money from the motorists.
On May 6, 2014, Stacks pleaded guilty to a civil rights conspiracy charge, admitting that he participated in a plan with the civilians to subject Hispanic motorists to unlawful traffic stops so that his co-conspirators could then demand that the motorists pay money in order to avoid arrest and/or deportation. On Mar. 26, 2015, Gallego and Reyes pleaded guilty to the same charge. According to information made public in the plea hearings, Stacks, while acting as a sheriff’s deputy, unlawfully detained at least four motorists on Aug. 17, 2013. One of the motorists, who was identified in the plea documents by the initials T.C., was unlawfully detained by Stacks and then approached by Gallego and Reyes, who posed as bilingual passers-by who wanted to help T.C. Gallego and Reyes told T.C. in Spanish that he would be sent to jail or deported if he did not pay them $500. When T.C. responded that he did not have $500 in his car, the conspirators agreed to let T.C. go home to get the money from his relatives. Gallego and Reyes drove T.C. to his residence and took $300 in cash from him. Stacks, Gallego, and Reyes then divided the money among them.
“Stacks abused his authority by engaging in a scheme with two accomplices to target and steal money from those he was sworn to protect,” said Principal Deputy Assistant Attorney General Gupta. “The Justice Department will hold accountable officers who violate their oath by violating the civil rights of members of the public.”
“Law enforcement officers take an oath to protect and serve the public and, based on the duty and responsibility that imposes, the public in turn invests them with great authority and respect,” said U.S. Attorney Moore. “The abuse of that power and authority, such as happened here, lessens that respect and trust by the public in all law enforcement, thus victimizing not only the victims specifically targeted but all law enforcement officers everywhere as well as the public generally.”
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorney Risa Berkower of the Justice Department’s Civil Rights Division, with the assistance of the United States Attorney’s Office for the Middle District of Georgia and the Lowndes County Sheriff’s Office.
Former Eugene Gang Member Sentenced to 10 Years in Federal PrisonRead the Press Release
EUGENE, Ore. – Cory Charles Weise, 33, Eugene, Oregon, was sentenced on Wednesday, June 24, 2015, by U.S. District Judge Michael McShane to 120 months in prison for possession with intent to distribute methamphetamine and felon in possession of a firearm. Following his release from prison, Weise will be on supervised release for three years.
Weise was a well-known member of the West Side Gangsters in Lane County, Oregon, and his activities were investigated by the Eugene Police Department (EPD) and the FBI. On November 13, 2013, EPD detectives executed a search warrant at his Eugene residence and in a safe located two firearms and ten grams of a mixture or substance containing methamphetamine. As a convicted felon, Weise was prohibited from possessing firearms. Scales and packaging material were found in his bedroom, and $1,170 cash was found on his person.
The investigation of this case was conducted by the Eugene Police Department Special Investigations Unit and the Eugene Resident Agency office of the FBI. The case was prosecuted by Assistant U.S. Attorney Jeffrey Sweet.
Former Corrections Officer Sentenced for Prison Tax Refund SchemeRead the Press Release
Jacksonville, Florida – United States Senior District Judge Henry Lee Adams, Jr. has sentenced Silvester L. Bowens (49, Jacksonville) to one year and one day in federal prison for conspiracy to defraud the United States and for receiving stolen property of the United States, namely tax refunds in excess of $1,000. He was also ordered to serve a 2-year term of supervised release and to pay the Internal Revenue Service $41,989.17 in restitution. Bowens pleaded guilty on July 1, 2014.
According to court documents, between January 2009 and December 2011, while working with inmates inside a State of Florida prison as a Wellness Director, Bowens participated in a tax refund scheme in which he assisted inmates in removing fraudulently filed tax returns from inside the prison. Bowens opened bank accounts in his name to receive the refunds from the fraudulent returns. As a result of the scheme, more than 40 fraudulent tax returns were filed, directing $386,471 into accounts held by Bowens.
Bowens, along with five others, was indicted in April 2014. Each of the six individuals subsequently pleaded guilty for their respective roles in the scheme. Co-conspirators Tiffani Manning, Christopher Wyant, and Tabatha Dubois were previously sentenced. The sentencing hearings for the remaining defendants, Laura Wright and Chad R. Heins, are scheduled for August 11, 2015.
The case was investigated by the Internal Revenue Service - Criminal Investigation and the Florida Department of Corrections. Assistant United States Attorney Kelly S. Karase is handling the prosecution of this case.
For-Profit Education Company to Pay $13 Million to Resolve Several Cases Alleging Submission of False Claims for Federal Student AidRead the Press Release
Settlement Resolves Allegations and Administrative Claims Involving Schools in Five States
Education Affiliates (EA), a for-profit education company based in White Marsh, Maryland, has agreed to pay $13 million to the United States to resolve allegations that it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid for students enrolled in its programs. EA operates 50 campuses in the United States under various trade names, including All State Career, Fortis Institute, Fortis College, Tri-State Business Institute Inc., Technical Career Institute Inc., Capps College Inc., Driveco CDL Learning Center, Denver School of Nursing and Saint Paul’s School of Nursing, which provide post-secondary education training programs in several professions in the states of Alabama, Florida, Maryland, Ohio and Texas.
“Today’s settlement is an excellent example of cooperation among multiple offices of the federal government to achieve a result that protects federal student aid funding and the interests of individual students,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Schools have an obligation to live up to their commitment to the government and their students when they accept federal student aid funds.”
The government alleged that employees at EA’s All State Career campus in Baltimore altered admissions test results so as to admit unqualified students, created false or fraudulent high school diplomas and falsified students’ federal aid applications, and that multiple EA schools referred prospective students to “diploma mills” to obtain invalid online high school diplomas. These allegations also led to criminal convictions of two All State Careers admission representatives, Barry Sugarman and Jesse Moore, and a test proctor, Jacqueline Caldwell.
“Students who apply for federal financial aid to attend trade and professional schools are required to show that they have the necessary skills to complete the educational program and work in the field,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland. “This settlement resolves the government's allegations that Education Affiliates defrauded the government by changing students' test scores and enrolling students with invalid diploma mill high school ‘diplomas’ ordered online.”
“The various cases that were settled here include numerous allegations of predatory conduct that victimized students and bilked taxpayers,” said Under Secretary Ted Mitchell of the U.S. Department of Education. “In particular, the settlement provides for repayment of $1.9 million in liabilities ordered by Secretary of Education Arne Duncan that resulted from EA awarding federal financial aid to students at its Fortis-Miami campus based on invalid high school credentials issued by a diploma mill. Secretary Duncan made clear that such abusive behavior would not be tolerated, and we will continue to work with the Justice Department and other federal agencies to ensure that postsecondary institutions face consequences when they violate the law.”
The settlement agreement also resolves allegations related to EA schools in Birmingham, Alabama, Houston and Cincinnati, including violations of the ban on incentive compensation for enrollment personnel, misrepresentations of graduation and job placement rates, alteration of attendance records and enrollment of unqualified students.
“Using fake high school diplomas is a particularly insidious abuse of the federal student aid system,” said Inspector General Kathleen Tighe of the U.S. Department of Education’s Office of Inspector General (OIG). “Students received only a worthless piece of paper.” Tighe commended the efforts of OIG staff and Department of Justice attorneys, whose outstanding investigative work led to this significant settlement.
The settlement resolves five lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in the recovery. As part of this resolution, the five whistleblowers will receive payments totaling approximately $1.8 million.
The settlements were the result of a coordinated effort by the U.S. Attorneys’ Offices of the District of Maryland, the Southern District of Texas, the Northern District of Alabama, Southern District of Ohio and the Middle District of Tennessee, as well as the Civil Division’s Commercial Litigation Branch, and the Department of Education and its OIG.
The cases are captioned United States ex rel. Roman v. All State Career, Inc. and Education Affiliates, Inc., Civil Case No. JKB-10-1730 (D.Md.); United States ex rel. Thomas v. Education Affiliates, Inc., Civil Case No. JKB-14-332 (D.Md.); United States ex rel. Andrews v. Education Affiliates, Inc., et al., Civil Case No. H-13-2366 (S.D. Tex.); United States ex rel. Atkins, et al. v. Fortis Institute and Education Affiliates, LLC, Civil Case No. CV-14-1107-S (N.D. Ala.); and United States ex rel. McArthur, Gruff & Associates LLC v. Education Affiliates, Inc., Civil Case No. 1:14-CV-977 (S.D. Oh.). The False Claims Act claims resolved by the settlement are allegations only, and there has been no determination of liability.
For Profit Education Company to Pay $13 Million to Resolve Cases Alleging Submission of False Claims for Federal Student AidRead the Press Release
Baltimore, Maryland – Education Affiliates (“EA”), a for-profit education company based in White Marsh, Maryland, has agreed to pay $13,000,000 to the United States to resolve allegations that it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid for students enrolled in its programs.
The settlement agreement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Principal Deputy Assistant Attorney General Benjamin Mizer of the U.S. Department of Justice Civil Division; U.S. Under Secretary of Education Ted Mitchell; and Inspector General Kathleen Tighe of the U.S. Department of Education Office of Inspector General; United States Attorney for the Southern District of Texas Kenneth Magidson; United States Attorney for the Northern District of Alabama Joyce White Vance; United States Attorney for the Southern District of Ohio Carter M. Stewart; and United States Attorney for the Middle District of Tennessee David Rivera.
“Students who apply for federal financial aid to attend trade and professional schools are required to show that they have the necessary skills to complete the educational program and work in the field,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland. “This settlement resolves the government's allegations that Education Affiliates defrauded the government by changing students' test scores and enrolling students with invalid diploma mill high school 'diplomas' ordered online.”
“Today’s settlement is an excellent example of cooperation among multiple offices of the federal government to achieve a result that protects federal student aid funding and the interests of individual students,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Schools have an obligation to live up to their commitment to the government and their students when they accept federal student aid funds.”
EA provides post-secondary education training programs in a variety of healthcare and trade professions. EA operates 50 campuses in the states of Maryland, Florida, Texas, Alabama and Ohio under various trade names, including All State Career, Fortis Institute, Fortis College, Tri-State Business Institute Inc., Technical Career Institute Inc., Capps College Inc., Driveco CDL Learning Center, Denver School of Nursing and Saint Paul’s School of Nursing, which provide post-secondary education training programs in several professions in the states of Alabama, Florida, Maryland, Ohio and Texas.
The government alleged that employees at EA’s All State Career campus in Baltimore altered admissions test results so as to admit unqualified students, created false or fraudulent high school diplomas, and falsified students’ federal aid applications, and that multiple EA schools referred prospective students to “diploma mills” to obtain invalid online high school diplomas. These allegations also led to criminal convictions of two All State Careers admission representatives, Barry Sugarman and Jesse Moore, and a test proctor, Jacqueline Caldwell.
“The various cases that were settled here include numerous allegations of predatory conduct that victimized students and bilked taxpayers,” said Under Secretary Ted Mitchell of the U.S. Department of Education. “In particular, the settlement provides for repayment of $1.9 million in liabilities ordered by Secretary of Education Arne Duncan that resulted from EA awarding federal financial aid to students at its Fortis-Miami campus based on invalid high school credentials issued by a diploma mill. Secretary Duncan made clear that such abusive behavior would not be tolerated, and we will continue to work with the Justice Department and other federal agencies to ensure that postsecondary institutions face consequences when they violate the law.”
The settlement agreement also resolves allegations related to EA schools in Birmingham, Alabama, Houston and Cincinnati, including violations of the ban on incentive compensation for enrollment personnel, misrepresentations of graduation and job placement rates, alteration of attendance records and enrollment of unqualified students.
“Using fake high school diplomas is a particularly insidious abuse of the federal student aid system,” said Inspector General Kathleen Tighe of the U.S. Department of Education Office of Inspector General. “Students received only a worthless piece of paper.” Tighe commended the efforts of Office of Inspector General staff and Department of Justice attorneys whose outstanding investigative work led to this significant settlement.
The settlement resolves five lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in the recovery. As part of this resolution, the five whistleblowers will receive payments totaling approximately $1.8 million.
The settlements were the result of an investigation by the U.S. Attorney’s Office for the District of Maryland, the Justice Department’s Civil Division, Commercial Litigation Branch, the U.S. Attorney’s Offices for the Southern District of Texas, Northern District of Alabama, Southern District of Ohio, and Middle District of Tennessee, the Department of Education and its Office of Inspector General, and the Federal Bureau of Investigation. Mr. Rosenstein thanked Assistant United States Attorneys Thomas F. Corcoran and Rebecca Koch who handled the Maryland cases.
The cases are captioned United States ex rel. Roman v. All State Career, Inc. and Education Affiliates, Inc., Civil Case No. JKB-10-1730 (D.Md.); United States ex rel. Thomas v. Education Affiliates, Inc., Civil Case No. JKB-14-332 (D.Md.); United States ex rel. Andrews v. Education Affiliates, Inc., et al., Civil Case No. H-13-2366 (S.D. Tex.); United States ex rel. Atkins, et al. v. Fortis Institute and Education Affiliates, LLC, Civil Case No. CV-14-1107-S (N.D. Ala.); and United States ex rel. McArthur, Gruff & Associates LLC v. Education Affiliates, Inc., Civil Case No. 1:14-CV-977 (S.D. Oh.). The False Claims Act claims resolved by the settlement are allegations only and there has been no determination of liability.
Federal Jury Returns Guilty Verdicts in Junction City Drug Trafficking CaseRead the Press Release
TOPEKA, KAN. - A federal jury here today delivered guilty verdicts against four defendants charged with trafficking crack cocaine in the Junction City and Manhattan areas, U.S. Attorney Barry Grissom said.
During trial, prosecutors presented evidence that in late 2012 and early 2013 agents of Kansas Bureau of Investigation and detectives from the Junction City Police Department investigated a large crack cocaine trafficking organization in Junction City and Manhattan. The organization was led by defendants Albert Banks and Anthony Thompson, who acquired the drugs from three different suppliers and sold the drugs to distributors who resold them on the streets.
The jury returned guilty verdicts against:
Albert Dwayne Banks, 33, Junction, City, Kan, count one (conspiracy to distribute crack cocaine), count eight (distributing crack cocaine, count 11 (distribution crack cocaine), count 12 (distributing crack cocaine), count 15 (distributing crack cocaine) count 16 (distributing crack cocaine), count 17 (distributing crack cocaine).
Johnny Lee Ivory, III, 29, Topeka, Kan., count one (conspiracy to distribute crack cocaine), count 19 (possession with intent to distribute crack cocaine), count 20 (unlawful possession of a firearm following a felony conviction).
Martye Madabuti Madkins, III, 34, Junction City, Kan., count two (distributing crack cocaine), count four (distributing crack cocaine).
Anthony Caryle Thompson, 33, Junction City, Kan., count one (conspiracy to distribute crack cocaine), count three (distributing crack cocaine), count five (distributing crack cocaine), count six (distributing crack cocaine), count seven (distributing crack cocaine), count eight (distributing crack cocaine), count nine (distributing crack cocaine), count 10 (distributing crack cocaine), count 13, distributing crack cocaine).
Defendants Zachary Carlyle Patmon and Otis Dean Ponds were acquitted.
Sentencing is set for Sept. 28.
The crimes carry the following penalties:
Conspiracy: Not less than 10 years in federal prison and a fine up to $10 million.
Distribution: A maximum penalty of 20 years and a fine up to and a fine up to $1 million on each count.
Unlawful possession of a firearm: A maximum penalty of 10 years and a fine up to $250,000.
Grissom commended the Kansas Bureau of Investigation, the Junction City Police Department, the Geary County Attorney’s Office and and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Federal Grand Jury Indicts San Angelo Man on Prepubescent Child Pornography OffenseRead the Press Release
LUBBOCK, Texas — Michael Patrick Redente, 39, of San Angelo, Texas, was charged in a federal indictment, returned last Wednesday, June 17, by a grand jury in Lubbock, Texas, with one count of possession of prepubescent child pornography, announced Acting U.S. Attorney John R. Parker of the Northern District of Texas.
The indictment alleges that on April 21, 2015, when Homeland Security Investigations executed a search warrant at his residence in San Angelo, Redente possessed a computer hard drive containing prepubescent child pornography. Redente appeared before U.S. Magistrate Judge E. Scott Frost in San Angelo today, and was ordered to remain in custody pending a detention hearing that will be scheduled for a later date in Lubbock.
A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the statutory penalty for possession of prepubescent child pornography is a term of imprisonment of not more than 20 years, a fine of up to $250,000 and a term of supervised release of up to life.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation is being conducted by the Department of Homeland Security, Homeland Security Investigations, and the U.S. Air Force Office of Special Investigations at Goodfellow Air Force Base. Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.
FCI-Greenville Inmate Pleads Guilty to Possession of ContrabandRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on June 23, 2015, Anthony Johnson, 25, pled guilty to an indictment charging him with Possession of Contraband by a Federal Inmate. Johnson was an inmate at the Federal Correctional Institution located in Greenville, Illinois at the time the offense was committed. Johnson faces a term of imprisonment of not more than twenty years, a fine up to $250,000, or both, and a term of supervised release of not more than three years which must be served consecutive, or in addition to his current sentence. Sentencing has been scheduled for September 18, 2015, in East St. Louis, Illinois. Johnson has been held without bond since his arraignment on May 12, 2015.
The charge arose on September 28, 2014, when an officer monitoring the visiting room at FCI-Greenville observed Johnson swallow an unknown object. Based on this behavior, Johnson was immediately placed in a dry cell after his visit ended so that his bowel movements could be monitored. On October 1, 2014, Johnson defecated one balloon which contained a white powdery substance. The substance found in the balloon contained heroin with an approximate weight of 1.1 grams.
The case was investigated by the Bureau of Prisons’ Special Investigation Section. The case is assigned to Assistant United States Attorney Angela Scott.
Ex-Billings High School Coach Pleads Guilty to Child Pornography, Coercion and Enticement ChargesRead the Press Release
BILLINGS – Scott James Nichols, 42, of Lockwood, Montana, pleaded guilty today in Billings federal court to distribution of child pornography, two counts of coercion and enticement, and two counts of attempted coercion and enticement. Nichols pleaded to the five counts pursuant to a Superseding Information. On the child pornography count, he faces a mandatory minimum five to twenty years in prison, up to $250,000 dollars in fines, and five years to lifetime supervised release. On the four coercion and enticement- related counts, he faces a mandatory minimum ten years to life in prison, up to $250,000 in fines, and five years to lifetime supervised release. U.S. District Court Judge Susan P. Watters presided over the change of plea and set the sentencing hearing for October 7, 2015, in Billings, Montana.
In court filings, the government stated that if the case had proceeded to trial, it would have proven that around January 2013, a Bozeman police detective received a tip that an individual had solicited explicit images of underage females. Posing as a 16-year-old girl, the detective made contact with the individual on Facebook. The individual solicited sexual images from the detective posing as the young girl. The detective then executed a search warrant on Facebook and discovered the individual was soliciting many apparently underage females through various social networking website, email addresses and a phone. Through a subpoena, the detective learned that the phone number was assigned to Scott James Nichols.
The detective learned that Nichols was, at that time, the Billings West High School Basketball coach and had recently been employed in the Livingston area as a coach. Further investigation revealed that Nichols was using several online aliases and posing as a teenage high school student. Under two aliases, Nichols asked underage females to send sexually explicit images to a specific phone number. Nichols was interviewed and admitted that the number was his. This was confirmed through the phone company.
An examination of Nichols’ phone revealed that he had used his email to receive sexually explicit images from underage females. He also received and distributed child pornography from this email address. Search warrants revealed that Nichols corresponded with underage females frequently through his email accounts. He would contact them, ask their age, ask if they are alone, and would make sexual comments. He would then encourage them to send him sexually explicit images of themselves. One of the counts he pleaded to involves that type of conduct from a computer with an IP address connected to Billings West High School. The other offense involved Nichols chatting under a fake Facebook name with a young woman who identified herself as 13-years-old. He asked her to send pictures of private areas. That conduct was done from an IP address assigned to Billings West High School. Nichols also had sexual Facebook chats with the teen, who identified herself as 14-years-old. He asked her to send him a sexually explicit photo, which she did. Nichols also Facebook chatted with a girl identifying herself as 14-years-old. Nichols asked her to engage in sexual behavior on a webcam with him. Lastly, in relation to the child pornography distribution count, Nichols sent at least 16 emails with files attached containing images of minors engaged in sexually explicit conduct. As part of his plea, Nichols forfeited his computers and phones used in the commission of the above crimes.
This case was prosecuted by Special Assistant U.S. Attorney Ole Olson and investigated by the Internet Crimes Against Children Task Force, including the Billings Police Department and the Federal Bureau of Investigation.
El Salvador National Pleads Guilty to Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that RAMON ANTONIO SORIANO-CANIZALEZ, age 28, a citizen of El Salvador, pled guilty today to a one-count Indictment charging him with illegal reentry into the United States after having been previously deported.
According to the court documents, SORIANO-CANIZALEZ was encountered by Border Patrol agents in the Eastern District of Louisiana on April 29, 2015, after records showed he had been previously deported from the United States to El Salvador on July 26, 2010.
SORIANO-CANIZALEZ faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment. U.S. District Judge Ivan L.R. Lemelle set sentencing for September 23, 2015.
U.S. Attorney Polite praised the work of the United States Border Patrol in investigating this matter. Assistant United States Attorney Emily K. Greenfield is in charge of the prosecution.
Ramon Antonio Soriano-Canizalez Factual basis.pdf (1000.42 KB)
Detroit man convicted of selling oxycodone near local universityRead the Press Release
CLARKSBURG, WEST VIRGINIA – Tyree Dupree Williams, 21, of Detroit, Michigan, was convicted today of prescription painkiller trafficking, United States Attorney William J. Ihlenfeld, II, announced.Williams, also known as “Killa,” sold oxycodone in Monongalia County, West Virginia in September 2014 near the campus of West Virginia University. He pled guilty today to one count of “Aiding and Abetting Distribution of Oxycodone within 1,000 Feet of a Protected Location.” He faces between one and forty years in prison and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Mon Valley Drug and Violent Crime Task Force investigated.
U.S. Magistrate Judge John S. Kaull presided.
Department of Justice Statement on U.S. Citizens Taken Hostage AbroadRead the Press Release
The Department of Justice released the following statement regarding U.S. citizens who are taken hostage abroad:
When a U.S. citizen is taken hostage, the Department of Justice’s top priority is the safe return of the hostage. The families who have been affected by hostage-takings have endured extraordinarily difficult circumstances. In light of recent hostage-takings perpetrated by terrorist groups, some families have expressed concerns that their efforts to retrieve their loved one could lead to potential prosecutions under the statute prohibiting the provision of material support to designated foreign terrorist organizations. In the face of their loved ones being held captive indefinitely by terrorist groups, families have understandably explored every option to secure their loved ones’ safe recovery.
In these cases, the department has focused on helping the families, consistent with the government’s no-concessions policy, and will continue to focus on exploring all appropriate options. The department does not intend to add to families’ pain in such cases by suggesting that they could face criminal prosecution. Perhaps the best indication of how the department will exercise its prosecutorial discretion in enforcing the material support statute is the department’s past record of prosecuting cases under the statute. The department has never used the material support statute to prosecute a hostage’s family or friends for paying a ransom for the safe return of their loved one.
Defendant Sentenced in the Lawman Gun Shop CaseRead the Press Release
SAN JUAN, Puerto Rico – Julio Medina-Mojica, former President of the Humacao Shooting Range, was sentenced to 27 months in prison for unlawful production of an identification document, specifically, a Puerto Rico Concealed Carry Weapons Permit announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Medina-Mojica pled guilty on March 10, 2015.
On or about the 21st day of May, 2012, in the District of Puerto Rico, the defendants aiding and abetting others, did willfully and knowingly cause, without lawful authority, production of identification documents, authentication features, and false identification documents, to wit, a Commonwealth of Puerto Rico Concealed Carry Weapons Permit under Weapons Permit Number XX129, in coordination with referrals by and through The Lawman Gun Shop using an intermediary who was both his employee and a Police of Puerto Rico auxiliary officer.
Defendant Medina-Mojica falsified that weapons training certifications were completed when they were, in fact, not. The defendant admitted that he did this for pecuniary gain in coordination with referrals by and through the Lawman Gun Shop, a federally licensed firearms dealer. The loss generated during the course of the scheme, which involved possession of five or more means of identification, was greater than $120,000. Medina-Mojica also admitted that there were more than 10 victims in this scheme.
“The defendant was entrusted with certifying that proper training was given for individuals who were issued Concealed Carry Weapons Permit, as mandated by Puerto Rico law,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “This is a regulated process in which firearm instructors or shooting clubs are assigned a specific authorization number and seal by the Police of Puerto Rico that are used to certify the completion form. Rather than fulfill that solemn responsibility, Julio Medina-Mojica, acted in concert with others, and sold pre-signed and stamped forms for $50.00 each. He sold out that responsibility.”
Former attorney Antonio M. Peluzzo-Perotin was sentenced on March 25, 2015, to 90 months in prison, and three years of supervised release.
María Del Carmen Rivera-Negrón and Julio Colón-Santiago co-owned The Lawman Gun Shop, a federally licensed firearms (FFL) dealer. Using their positions, the defendants participated in a scheme to have Commonwealth of Puerto Rico Concealed Carry Weapons Permits issued without compliance with applicable law. Both defendants plead guilty and the sentence is scheduled for July 15, 2015.
The Federal Bureau of Investigation (FBI) and the Puerto Rico Police Department (PRPD) are in charge of the investigation. The case is being prosecuted by Assistant U.S. Attorneys José Capó-Iriarte and Luke Cass.
DaVita to Pay $450 Million to Resolve Allegations that it Sought Reimbursement for unnecessary Drug WasteRead the Press Release
ATLANTA – DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste. Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.
“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn. “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”
“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.
At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient. The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.” Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients. DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government. In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.
In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs. As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.
The allegations resolved today arose from a lawsuit filed and ultimately litigated to this successful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter. To bring this case to its successful resolution, whistleblowers Dr. Vainer and Mr. Barbir, along with their attorneys, engaged in extensive and exceptional litigation efforts.
The lawsuit is captioned United States ex rel. Alon J. Vainer, M.D., F.A.C.P. and Daniel D. Barbir, R.N., Plaintiffs v. DaVita, Inc. and Gambro Healthcare, Inc., and their respective subsidiaries and affiliated companies, Defendants, No. 1:07-cv-2509-CAP (N.D. Ga.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Assistant United States Attorney Paris A. Wynn handled this matter for the U.S. Attorney’s Office.
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.
DaVita to Pay $450 Million to Resolve Allegations That it Sought Reimbursement for Unnecessary Drug WastageRead the Press Release
DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste. Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.
“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.
At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient.
The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.” Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients. DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government. In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.
In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs. As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.
“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia. “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”
The allegations resolved today arose from a lawsuit filed and ultimately litigated to this succesful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter.
This case was monitored by the U.S. Attorney’s Office of the Northern District of Georgia and the Civil Division’s Commercial Litigation Branch.
The lawsuit is captioned United States ex rel. Alon J. Vainer, M.D., F.A.C.P. and Daniel D. Barbir, R.N., Plaintiffs v. DaVita, Inc. and Gambro Healthcare, Inc., and their respective subsidiaries and affiliated companies, Defendants, No. 1:07-cv-2509-CAP (N.D. Ga.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Couple from India Arrested in Alien Employment CaseRead the Press Release
McPHERSON, KAN. - A married couple from India who themselves are unlawfully in the United States have been arrested on an indictment charging unlawful employment of aliens, document fraud, bank fraud and making false claims of U.S. citizenship, U. S. Attorney Barry Grissom said Weednesday.
Arrested were Satishkumar “Sam” Patel, 47, and his wife, Daxaben S. Patel, 36, both of McPherson, Kan., who are in federal custody and scheduled to appear at 1:30 p.m. today in U.S. District Court in Wichita. The indictment also charges four other aliens from India who allegedly were employed by the Patels, as well as Nitin B. Patel, 53, a Lawrence, Kan., business partner of Satishkumar Patel’s, and two companies owned by the defendants.
The investigation was led by the Kansas Department of Revenue’s Office of Special Investigations and Alcoholic Beverage Control Division, and Homeland Security Investigations, with the assistance the Social Security Administration Office of Inspector General, the McPherson Police Department, the Kansas Department of Labor and the U.S. Attorney’s office.
The indictment unsealed Wednesday contains 45 counts arising primarily from the Patels’ operation of a gas station and convenience store at 115 W. Kansas in McPherson called Route 56 Express. The indictment also seeks criminal forfeiture of money and property related to the alleged crimes, including the business, real estate, cash, and money held in bank accounts controlled by the Patels. Many of those assets were seized today, Grissom said.
According to the indictment, Satishkumar and Daxaben Patel unlawfully entered the United States in the 1990s and have never had any lawful status here, but were able to obtain Social Security numbers by claiming to be aliens authorized to work. Since then, the indictment alleges, the Patels have pretended to be U.S. citizens, buying a home in McPherson and engaging in business activities that didn’t result in checks of their citizenship or immigration status.
They obtained Kansas driver’s licenses using their Social Security numbers and swearing they were lawfully in the U.S., according to the indictment, resulting in charges of document fraud and use of a fraudulently obtained Social Security number, all felonies. Sastishkumar and Daxaben Patel also are charged with multiple counts of harboring aliens unlawfully in the United States, both by employing them and by providing housing at the Patel’s McPherson home.
The indictment alleges the Patels were able to obtain a mortgage loan to buy the home by falsely claiming on the mortgage loan application that they were United States citizens. Satishkumar Patel also is charged with wire fraud for allegedly filing false quarterly unemployment insurance reports with the Kansas Department of Labor that listed only one employee, Daxaben Patel, for the McPherson gas station when, in fact, at least four other employees worked there.
The charges against Satishkumar Patel and Nitin B. Patel arise out of their ownership of a liquor store in Lawrence in which Satishkumar’s unlawful status in the U.S. and his ownership of the store allegedly were not properly disclosed to the state Alcoholic Beverage Control Division. Foreign nationals are not permitted to obtain a retail liquor license in Kansas, and the identities of all owners of liquor stores are required to be disclosed.
The defendants face a maximum of five years in prison on the alien harboring and Social Security fraud charges, as well as the wire and mail fraud charges. They face a maximum of three years in prison on the false claim of citizenship charges, 10 years in federal prison for document fraud, and 20 years in prison for bank fraud. As in any criminal case, a person charged with a crime is considered innocent until and unless proven guilty. An indictment merely contains allegations of criminal conduct.
The case is being prosecuted by Assistant U.S. Attorney Brent Anderson.
Conspirator in Jamal Dean Attempted Escape Attempt Sentenced to Federal Prison on Methamphetamine ChargeRead the Press Release
A Nebraska woman was sentenced June 26, 2015, to 4 months in federal prison.
Anna Baker, age, 25 from Winnebago, Nebraska, received the prison term after a February 25, 2015 guilty plea to one count of simple possession of methamphetamine.
Facts presented by the United States at her change of plea hearing and sentencing reveal for about three days, starting on April 30, 2013, defendant hid Jamal Dean at her residence on the Winnebago Indian Reservation. She did so knowing Dean was the subject of a joint state and federal criminal investigation and manhunt. During this time, defendant relayed information to Dean from other conspirators, provided him methamphetamine, and provided him the use of her phone.
On or about May 14, 2013, defendant lied to federal agents about when she had last seen Dean and who had stayed at her residence. Additionally, sometime after harboring Dean and before meeting with law enforcement, she deleted the contents of her phone (including text messages).
On February 12, 2015, defendant entered into a plea agreement with the United States admitting her role in the conspiracy. On February 25, 2015, she pled guilty to a related offense but was allowed to remain at liberty. After admitting guilt and pleading guilty, defendant continued her criminal conduct and repeatedly violated the terms of her supervision.
Baker was sentenced in Sioux City by United States Magistrate Judge Leonard Strand. Baker was sentenced to four months’ imprisonment. A special assessment of $25 was imposed. She must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
Baker is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted as a part of Project Safe Neighborhoods, a cooperative local, state, and federal program aimed at the enhanced prosecution of gun crimes. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Homeland Security Investigations; the Tri-State Drug Task Force, the Woodbury County Sheriff’s Office; the Sioux City Police Department, the United States Marshal’s Service; the Iowa Department of Public Safety; the Nebraska Department of Public Safety; and the Woodbury County Attorney’s Office. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-4088.
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Chief Executive Officer of Beauty Products Company Pleads Guilty in Manhattan Federal Court and Chief Financial Officer Arrested in Multimillion-Dollar Accounting Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that EMANUEL COHEN, the former chief executive officer of a Florida-based company that was a wholesaler and distributor of beauty products (the “Company”), pled guilty yesterday in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn to orchestrating a fraudulent scheme to obtain millions of dollars in loans by making false statements and providing false and fraudulent documents concerning the Company’s financial condition to a commercial bank based in New York (the “Bank”). JAY SOSONKO, the former chief operating officer of the Company, was arrested this morning in Boca Raton, Florida, on a criminal complaint (the “Complaint”) for his role in the scheme. SOSONKO was presented today in federal court in West Palm Beach, Florida.
Manhattan U.S. Attorney Preet Bharara said: “As he has now admitted in court, Emanuel Cohen, the CEO of a cosmetics company, defrauded a bank of nearly $5 million by lying and fabricating key financial documents he needed to get loans. Cohen’s alleged cohort, Jay Sosonko, the CFO of the company, was arrested today and will face criminal charges for his alleged involvement in the scheme. We thank the FBI for their tireless efforts to ensure that those who cheat and exploit financial institutions are held accountable.”
FBI Assistant Director in Charge Diego Rodriguez said: “The plea by Cohen for his role in the scheme and the arrest of Sosonko for his alleged role should serve as a reminder that this type of creative accounting ends with handcuffs. The FBI is committed to working with our partners to investigate and bring to justice those who seek to profit illegally from our financial systems.”
According to the allegations contained in the Information to which COHEN pled guilty, statements made during COHEN’s plea proceeding, and the Complaint against SOSONKO unsealed today[1]:
From 2012 through March 2014, COHEN and SOSONKO engaged in a scheme to fraudulently induce the Bank to lend millions of dollars to the Company. Among other things, COHEN and SOSONKO knowingly made false representations to the Bank, concealed material facts from the Bank, and submitted false and fraudulent documents to the Bank, including fabricated borrowing base certificates. Specifically, COHEN and SOSONKO falsely inflated the Company’s sales and accounts receivable on borrowing base certificates that were provided to the Bank pursuant to loan agreements between the Bank and the Company. COHEN and SOSONKO used those falsely inflated sales and accounts receivable to mislead the Bank about the Company’s true financial performance so that the Company could secure and draw down millions of dollars in loans from the Bank that the Company would not otherwise have been entitled to receive.
The Company ultimately defaulted on its loans from the Bank in about March 2014. At that time, the outstanding balance on the loans was approximately $4.8 million.
* * *
COHEN, 71, of Boca Raton, Florida, pled guilty to one count of conspiracy to commit bank fraud and one count of bank fraud, each of which carries a maximum sentence of 30 years in prison. COHEN is scheduled to be sentenced on November 4, 2015, before U.S. District Judge Lewis A. Kaplan.
SOSONKO, 68, of Boca Raton, Florida, is charged with one count of conspiracy to commit bank fraud, one count of bank fraud, and one count of making a false statement to influence bank action, each of which carries a maximum sentence of 30 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and SOSONKO is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Chicago Man Indicted for Fraudulently Obtaining Approximately $9 Million from InvestorsRead the Press Release
CHICAGO — A Chicago resident was charged yesterday with wire fraud after fraudulently obtaining approximately $9 million from approximately 50 investors by making false and misleading representations to the investors, which resulted in a loss to investors of approximately $4 million, according to the indictment. The charges allege that Nick Wurl, 25, of Chicago, was the President of Ludiera Capital, LLC, located in Chicago, and that he falsely represented to investors that Ludiera was in the business of buying, transporting, and selling commodities, such as corn and wheat, domestically and internationally, when, in fact, Ludiera never bought, transported, or sold any commodities.
Wurl was arrested on May 26, 2015, and released on bond. He will be arraigned at a later date in U.S. District Court.
According to the indictment, between approximately July 2013 through May 2015, Wurl made false representations about the nature of Ludiera’s business, the financial condition of Ludiera, the expected return and actual return on the investment, the risk involved in the investment, the status of the investment, and the use of investors’ funds. The indictment also alleges that Wurl misappropriated investors’ funds to trade futures and options without disclosing that he was using investors’ funds for trading, and to pay personal expenses for his own benefit. According to the indictment, Wurl fraudulently retained investors’ funds and concealed the scheme by preparing and distributing fraudulent account statements to investors.
The indictment seeks forfeiture of approximately $9 million.
Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission assisted with the investigation.
The government is being represented by Assistant U.S. Attorney Jacqueline Stern.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Cattaraugus Man Sentenced on Marijuana 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 Joseph Tigano, Sr., 77, who was convicted of manufacturing 50 or more marijuana plants, was sentenced to time served and three years supervised release, by U.S District Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the prosecution of the case, stated that on July 8, 2008, law enforcement officers executed a search warrant at a Mill St. factory that belonged to the defendant’s son, Joseph Tigano III. During the search, officers discovered an active hydroponic marijuana grow operation which included 1414 plants. In addition, officers seized 100 pounds of harvested and processed marijuana packaged for sale. The estimated value of the processed marijuana is between $300,000 and $500,000.
Officers also seized three firearms, United States currency, money orders, and savings bonds. Also seized were a 2007 Cadillac Escalade, a 2005 Jeep Cherokee Limited, and a 2007 Haulmark Trailer.
Tigano and his son were arrested on July 8, 2008. Joseph Tigano III was convicted following a jury trial in May 2015 and is awaiting sentencing on August 13, 2015.
The sentencing is the culmination of an investigation by the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, with the assistance of the Cattaraugus County Sherriff’s Department, under the direction of Sheriff Timothy Whitcomb, and the Southern Tier Regional Task Force, under the direction of Cattaraugus County Sheriff’s Sergeant Ronald Lott, the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, and the Erie County Sheriff’s Department Aviation Unit, under the direction of Timothy Howard.Carbondale Resident Charged with Armed Robbery of Duquoin Shell Gas StationRead the Press Release
On June 16, 2015, Stanley L. Cohen, 32, of Carbondale, IL, was charged in a two-count indictment with Interference with Commerce by Robbery, in violation of the Hobbs Act, and Using, Carrying, and Brandishing a Firearm During a Crime of Violence, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The charges stem from a May 16, 2014, armed robbery of the Shell Gas Station in DuQuoin, Perry County. Cohen is scheduled to make his initial appearance in federal court in Benton on June 30, 2015.
Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
If convicted of the Hobbs Act violation, Cohen faces a term in federal prison of up to 20 years to be followed by 3 years’ supervised release. The firearm offense carries a minimum penalty of 7 years, to a maximum of life in prison, to be followed by 5 years’ supervised release. Federal law requires that any term of imprisonment imposed on the firearm offense must be served consecutive, or in addition to, any term imposed on the Hobbs Act charge. Both offenses also carry a fine of up to $250,000.
The investigation was conducted by the DuQuoin Police Department, Perry County Sheriff’s Department, and Carbondale Police Department.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Buffalo Man Sentenced for Possession of Child PornographyRead 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 Jason Zaifert, 33, of Buffalo, NY, who was convicted of possession of child pornography, was sentenced to 97 months in prison by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that on November 21, 2013, Zaifert possessed child pornography on computers, hard drives and thumb drives in his residence in Buffalo. The defendant possessed over 1,000 image and video files. Some of the images included depictions of violence and some of the children were under 12 years old. Zaifert used peer to peer software to download and view the child pornography.
The sentencing is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations under the direction of Acting Special Agent-In-Charge J. Michael Kennedy.
Branson Man Sentenced for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Branson, Mo., man was sentenced in federal court today for receiving and distributing hundreds of thousands of images of child pornography over the Internet.
Paul Young, 49, of Branson, was sentenced by U.S. District Judge M. Douglas Harpool to 12 years and seven months in federal prison without parole.
On Feb. 3, 2015, Young pleaded guilty to receiving and distributing child pornography over the Internet.
Law enforcement officers who were conducting an investigation into the distribution of child pornography identified Young’s computer as sharing images of child pornography through a peer-to-peer, file-sharing network. Officers executed a search warrant at Young’s residence and seized two computers and three external hard drives, which contained child pornography.
Investigators discovered more than 600,000 images of child pornography and more than 13,000 videos of child pornography on Young’s computers and hard drives. He also possessed depictions of dead women and children in a folder titled “Necro.”
Young also faces state charges in Taney County Circuit Court for possession of child pornography.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Taney County, Mo., Sheriff’s Department, the Nixa, Mo., Police Department and Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
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.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Big Spring Man Pleads Guilty to Federal Child Pornography OffenseRead the Press Release
LUBBOCK, Texas — Gilberto Ray Hinojos, 22, of Big Spring, Texas, appeared today before U.S. Magistrate Judge Nancy M. Koenig and pleaded guilty to a federal child pornography offense, announced John R. Parker, Acting U.S. Attorney for the Northern District of Texas.
Specifically, Hinojos, who remains on bond, pleaded guilty to one count of attempted receipt of a visual depiction of a minor engaging in sexually explicit conduct, and aiding and abetting. He faces a statutory penalty of not less than five years and not more than 20 years in federal prison and a $250,000 fine. A sentencing date will be scheduled at a later time.
According to documents filed in the case, on May 14, 2015, Hinojos responded to an online classified ad posted by the Texas Department of Public Safety. An undercover officer identified himself as a 13-year-old female in communications with Hinojos, who then attempted to receive sexually explicit images of this person and made further arrangements to meet her at a restaurant on 19th Street in Lubbock. Hinojos arrived at the location and was arrested.
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Texas Department of Public Safety and the Federal Bureau of Investigation is investigating. Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.
Beaumont Federal Inmate Sentenced for Drug Transaction during VisitationRead the Press Release
BEAUMONT, Texas – A 28-year-old federal inmate has been sentenced for receiving contraband in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Sultan Adnan Al-Bizri, of Lubbock, Texas, pleaded guilty on Mar. 11, 2015, to attempting to obtain a prohibited object by a federal inmate and was sentenced to 55 months in federal prison on June 23, 2015 by U.S. District Judge Ron Clark.
According to information presented in court, in August 2012, while monitoring inmate telephone calls and emails at the U.S. Penitentiary in the Federal Correctional Complex in Beaumont, officials discovered Al-Bizri and others arranging for the delivery of heroin into the prison during visitation. On Aug. 6, 2012, federal agents intercepted an individual arriving at the prison visitation area with two balloons that contained heroin. Al-Bizri was indicted by a federal grand jury on Oct. 1, 2014.
Al-Bizri was convicted of being a felon in possession of a firearm in the Northern District of Texas in 2010 and sentenced to 120 months in federal prison. He must serve his 55 month sentence from this conviction following the conclusion of his current prison sentence.
This case was investigated by the Drug Enforcement Administration and Bureau of Prisons, Special Investigations and prosecuted by Assistant U.S. Attorney Randall L. Fluke and Special Assistant U.S. Attorney Russell James.
Baltimore Heroin and Cocaine Distributor Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Thomas Linwood Jones, age 45, of Baltimore, Maryland today to 10 years in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin and 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; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, DEA agents conducted an investigation of Jones’ drug distribution operation in 2013 and 2014. From at least November 2013, Jones admitted that he conspired to distribute heroin and cocaine. On January 14, 2014, law enforcement executed search warrants at locations associated with Jones, including a storage unit in Milford Mill, Maryland, Jones’ residence, a house used by Jones in Lochearn, Maryland, and Jones’ pick-up truck. Law enforcement recovered $652,000 in cash, approximately 2.5 kilograms of heroin, approximately 5.5 kilograms of cocaine, a hydraulic kilogram press, cutting agent and digital scales.
During the course of the conspiracy, Jones admitted that he was responsible for the distribution of at least one kilogram of heroin and at least five kilograms of cocaine.
United States Attorney Rod J. Rosenstein praised the DEA and Baltimore Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys James G. Warwick and Seema Mittal, who prosecuted the case.
Armed Career Criminal Sentenced to 15 Years in PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES BROWN, 35, of New Haven, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 180 months of imprisonment, followed by five years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on December 28, 2012, New Haven Police responded to a 911 call of a domestic dispute involving a weapon. Officers arrived at the identified residence and BROWN, who was in the bedroom, was taken into custody. A subsequent search of the bedroom revealed a loaded Smith and Wesson revolver hidden under the mattress of the bed.
Forensic analysis of the firearm revealed DNA that matched BROWN’s DNA.
BROWN’s extensive criminal history includes convictions for unlawful restraint in the first degree, robbery in the second degree, robbery in the third degree, and sale of a controlled substance. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
BROWN has been detained since his arrest on December 28, 2012. On June 4, 2014, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
BROWN was sentenced pursuant to the Armed Career Criminal Act, a federal law imposing severe penalties for firearm or ammunition possession by persons who have been convicted of at least three violent felonies or serious drug offenses. A defendant who qualifies as an Armed Career Criminal faces a minimum term of imprisonment of 15 years and a maximum term of life.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department. The case was prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.
Amite Man Sentenced to 106 Months in Prison for Narcotics and Firearms ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BRENT GUZZARDO, age 34, a resident of Amite, was sentenced today for violating the Federal Controlled Substances Act.
U.S. District Judge Kurt D. Engelhardt sentenced GUZZARDO to 106 months incarceration, to be followed by 3 years of supervised release. GUZZARDO was also ordered to pay a special assessment of $200.
On March 25, 2015, GUZZARDO pled guilty to possession with the intent to distribute a quantity of methamphetamine and possessing a firearm in furtherance of a drug trafficking crime. The charges stem from a search warrant that was executed at GUZZARDO’s residence, during which law enforcement officers located several grams of pure methamphetamine, a scale, cash, and a loaded .357 revolver.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration and officers of the Tangipahoa Parish Sheriff’s Office in investigating this matter. Assistant U.S. Attorney David Haller was in charge of the prosecution.
Alleged Mastermind of Global Cybercrime Campaigns Extradited to the United States to Face ChargesRead the Press Release
Earlier today, an indictment was unsealed in a Brooklyn, New York federal court charging Ercan Findikoglu, a Turkish citizen also known as “Segate,” with organizing three worldwide cyberattacks that inflicted $55 million in losses on the global financial system in a matter of hours. The defendant’s organization used sophisticated intrusion techniques to hack into the systems of global financial institutions, steal prepaid debit card data and eliminate withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe. The charges announced today follow charges previously brought against other members of the organization, including members of a New York City cell charged in May 2013 in connection with their roles in two of the attacks. The defendant is scheduled to be arraigned at 11 a.m. today before U.S. Magistrate Judge Lois Bloom at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Acting U.S. Attorney Kelly T. Currie for the Eastern District of New York and Special Agent in Charge Robert J. Sica of the U.S. Secret Service New York Field Office.
“Cybercriminals, and especially hackers as this defendant is alleged to be, wreak havoc and steal millions of dollars by breaching our information systems and networks with clicks and keystrokes from the perceived anonymity of their computers at locations all over the globe,” said Acting U.S. Attorney Currie. “However, in doing so they leave traces in digital space that allow law enforcement to identify, apprehend and ultimately hold them accountable for their crimes.”
Acting U.S. Attorney Currie praised the extraordinary efforts of the Secret Service in investigating these complex network intrusions and thanked the authorities in Germany for their assistance in effecting the defendant’s extradition.
“For the past twenty years, Special Agents assigned to the Secret Service New York Electronic Crimes Task Force have worked closely with our law enforcement partners, the business community and our partners in academia to pursue cybercriminals who have taken aim at our homeland’s financial infrastructure. Today, we recognize our international law enforcement partners who were instrumental in the extradition of Ercan Findikoglu,” said Special Agent in Charge Sica. “The significance of this case cannot be understated as Findikoglu is the alleged mastermind behind the global ATM cashout operations which plagued the financial services sector from 2010 until his capture in late 2013. The Secret Service and its international partners remain committed to solving complex financial crimes as well as tracking down and bringing to justice significant cybercriminals who pose a threat to payment systems worldwide.”
As detailed in the indictment and other court filings, Findikoglu gained unauthorized access to, or “hacked,” the computer networks of at least three payment processors for various types of credit and debit card transactions (the Victim Processors). He then targeted Visa and MasterCard prepaid debit cards serviced by the Victim Processors, breached the security protocols that enforce withdrawal limits on those cards, and then dramatically increased the account balances on those cards to allow withdrawals far in excess of the legitimate card balances.
Findikoglu allegedly managed a trusted group of co-conspirators who disseminated the stolen debit card information to leaders of “cashing crews” around the world; they, in turn, used the stolen information to conduct tens of thousands of fraudulent ATM withdrawals. During these operations, Findikoglu allegedly maintained access to the computer networks of the Victim Processors in order to monitor the withdrawals. These coordinated, calculated cyberattacks are known in the cyber-underworld as “Unlimited Operations,” because the manipulation of withdrawal limits enables the withdrawal of literally unlimited amounts of cash until the operation is shut down.
In one operation on Feb. 27 and 28, 2011, cashing crews withdrew approximately $10 million through approximately 15,000 fraudulent ATM withdrawals in at least 18 countries. In a second operation on Dec. 22, 2012, cashing crews withdrew approximately $5 million through more than 4,500 ATM in approximately 20 countries. In a third operation on Feb. 19 and 20, 2013, cashing cells in 24 countries executed approximately 36,000 transactions and withdrew approximately $40 million from ATMs. During this third operation, in New York City alone, cashing crews withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals over the course of less than 11 hours.
Once the funds were extracted, Findikoglu and high-ranking members of the conspiracy allegedly received the proceeds from other co-conspirators in various forms, including by wire transfer, electronic currency and the personal delivery of U.S. and foreign currency. On one occasion, members of a New York City cashing crew transported approximately $100,000 to co-conspirators in Romania. Findikoglu directed a co-conspirator to destroy evidence of their criminal activities after learning that a member of a New York cashing crew had been arrested.
On Dec. 18, 2013, Findikoglu was arrested in Frankfurt, Germany, and yesterday was extradited to the United States.
The government’s case is being handled by the U.S. Attorney’s Office of the Eastern District of New York’s National Security & Cybercrime Section. Assistant U.S. Attorneys Hilary Jager, Douglas M. Pravda, Richard M. Tucker and Saritha Komatireddy are in charge of the prosecution. Assistant U.S. Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets. Additional assistance was provided by Marcus Busch and Cristina M. Posa of the Justice Department’s Office of International Affairs.
Alleged Mastermind of Global Cybercrime Campaigns Extradited to the United States to Face ChargesRead the Press Release
Earlier today, an indictment was unsealed in Brooklyn federal court charging Ercan Findikoglu, a Turkish citizen also known as “Segate,” with organizing three worldwide cyberattacks that inflicted $55 million in losses on the global financial system in a matter of hours.1 The defendant’s organization used sophisticated intrusion techniques to hack into the systems of global financial institutions, steal prepaid debit card data, and eliminate withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe. The charges announced today follow charges previously brought against other members of the organization, including members of a New York City cell charged in May 2013 in connection with their roles in two of the attacks. The defendant is scheduled to be arraigned at 11 a.m. today before United States Magistrate Judge Lois Bloom at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were 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.
“Cybercriminals, and especially hackers as this defendant is alleged to be, wreak havoc and steal millions of dollars by breaching our information systems and networks with clicks and keystrokes from the perceived anonymity of their computers at locations all over the globe. However, in doing so they leave traces in digital space that allow law enforcement to identify, apprehend, and ultimately hold them accountable for their crimes,” stated Acting United States Attorney Currie. Mr. Currie praised the extraordinary efforts of the Secret Service in investigating these complex network intrusions and thanked the authorities in Germany for their assistance in effecting the defendant’s extradition.
“For the past twenty years, Special Agents assigned to the Secret Service New York Electronic Crimes Task Force have worked closely with our law enforcement partners, the business community, and our partners in academia to pursue cybercriminals who have taken aim at our homeland’s financial infrastructure. Today, we recognize our international law enforcement partners who were instrumental in the extradition of Ercan Findikoglu,” said Secret Service Special Agent in Charge Sica. “The significance of this case cannot be understated as Findikoglu is the alleged mastermind behind the global ATM cashout operations which plagued the financial services sector from 2010 until his capture in late 2013. The Secret Service and its international partners remain committed to solving complex financial crimes as well as tracking down and bringing to justice significant cybercriminals who pose a threat to payment systems worldwide.”
As detailed in the indictment and other court filings, Findikoglu gained unauthorized access to, or “hacked,” the computer networks of at least three payment processors for various types of credit and debit card transactions (the “Victim Processors”). He then targeted Visa and MasterCard prepaid debit cards serviced by the Victim Processors, breached the security protocols that enforce withdrawal limits on those cards, and then dramatically increased the account balances on those cards to allow withdrawals far in excess of the legitimate card balances.
Findikoglu allegedly managed a trusted group of co-conspirators who disseminated the stolen debit card information to leaders of “cashing crews” around the world; they, in turn, used the stolen information to conduct tens of thousands of fraudulent ATM withdrawals. During these operations, Findikoglu allegedly maintained access to the computer networks of the Victim Processors in order to monitor the withdrawals. These coordinated, calculated cyberattacks are known in the cyber-underworld as “Unlimited Operations” because the manipulation of withdrawal limits enables the withdrawal of literally unlimited amounts of cash until the operation is shut down.
In one operation on February 27 and 28, 2011, cashing crews withdrew approximately $10 million through approximately 15,000 fraudulent ATM withdrawals in at least 18 countries. In a second operation on December 22, 2012, cashing crews withdrew approximately $5 million through more than 4,500 ATM in approximately 20 countries. In a third operation on February 19 and 20, 2013, cashing cells in 24 countries executed approximately 36,000 transactions and withdrew approximately $40 million from ATMs. During this third operation, in New York City alone, cashing crews withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals over the course of less than 11 hours.
Once the funds were extracted, Findikoglu and high-ranking members of the conspiracy allegedly received the proceeds from other co-conspirators in various forms, including by wire transfer, electronic currency, and the personal delivery of United States and foreign currency. On one occasion, members of a New York City cashing crew transported approximately $100,000 to co-conspirators in Romania. Findikoglu directed a co-conspirator to destroy evidence of their criminal activities after learning that a member of a New York cashing crew had been arrested.
On December 18, 2013, Findikoglu was arrested in Frankfurt, Germany, and yesterday was extradited to the United States.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Hilary Jager, Douglas M. Pravda, Richard M. Tucker, and Saritha Komatireddy are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets. Additional assistance was provided by Marcus Busch and Cristina M. Posa of the Justice Department’s Office of International Affairs.
The Defendant:
ERCAN FINDIKOGLU
Alias: Segate
Age: 33
Nationality: Turkish
E.D.N.Y. Docket No. 13-CR-440 (KAM)
__________________________________________________________
1. The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Albuquerque Woman Sentenced for Participating in Scheme to Smuggle Drugs into Otero County PrisonRead the Press Release
ALBUQUERQUE – Ana Lopez, 25, of Albuquerque, N.M., was sentenced today in federal court in Las Cruces, N.M., to 30 months in prison followed by two years of supervised release for her conviction on conspiracy to distribute methamphetamine and heroin.
Lopez was one of six individuals charged in April 2014, in a criminal complaint with conspiracy to violate the federal narcotics laws by smuggling controlled substances into the Otero County Prison Facility (OCPF) in Chaparral, N.M. The other defendants charged with participating in the conspiracy were Luis Delgadillo, 38, of El Paso, Texas, who was then employed as a corrections officer at OCPF, Nancy Salas, 36, of Alamogordo, N.M., and three OCPF inmates, Eric Lovato, 31, of Boles Acres, N.M., and Armando Lopez, 28, and Gary Borja, 27, both of Albuquerque. All six defendants subsequently were indicted on Aug. 20, 2014, and charged with conspiracy to distribute methamphetamine and heroin charge on Aug. 20, 2014. At the time the crimes were committed, Delgadillo was a corrections officer at the OCPF.
The FBI initiated an investigation into the case in Jan. 2014, after receiving information from the New Mexico Corrections Department showing that Delgadillo was smuggling heroin and methamphetamine into the OCPF. The investigation, which included a review of recorded inmate telephone calls and OCPF surveillance video, physical surveillance and the results of inmate drug testing, identified the six defendants as members of a conspiracy who smuggled narcotics into the OCPF between Jan. 2014 and April 2014.
Ana Lopez pled guilty on Aug. 25, 2014. In her plea agreement, Ana Lopez admitted participating in a conspiracy to smuggle drugs into the OCPF. The plea agreement states that Ana Lopez was recruited to help smuggle drugs into the prison in Jan. 2014. Ana Lopez admitted delivering an ounce of heroin in Feb. 2014 and again in March 2014, to a person knowing that the person would give it to a corrections officer who would smuggle the heroin into the prison. Ana Lopez also admitted that on April 26, 2014, she met with the corrections officer and gave him 25 grams of methamphetamine, 11 grams of heroin and 10 suboxone pills so he could smuggle the drugs into the prison.
Lopez’s five co-defendants have entered guilty pleas to the indictment. Sentencing hearings have yet to be scheduled.
This case was investigated by the Las Cruces office of the FBI and the New Mexico Corrections Department and is being prosecuted by Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office.
Albuquerque Man Pleads Guilty in New Mexico to Violating Federal Narcotics Trafficking LawsRead the Press Release
ALBUQUERQUE – Luis Juan Contreras-Cano, 20, of Albuquerque, N.M., pleaded guilty today in federal court in to a methamphetamine trafficking charge. Under the terms of his plea agreement, Contreras-Cano will be sentenced to 97 months in federal prison followed by a term of supervised release to be determined by the court.
Contreras-Cano and his co-defendant Carlos Davenport, 41, of El Paso, Texas, were arrested on Dec. 13, 2014, in Bernalillo County, N.M., after law enforcement officers executed a consensual search on the vehicle in which Contreras-Cano and Davenport were traveling and found ten pounds of methamphetamine. Contreras-Cano and Davenport were subsequently indicted on Jan. 8, 2015, and charged with conspiracy to possess methamphetamine with intent to distribute, possession of methamphetamine with intent to distribute on Dec. 13, 2014, and using and carrying firearms in relation to a drug trafficking crime on Dec. 13, 2014. All offenses took place in Bernalillo County.
During today’s proceedings, Contreras-Cano pled guilty to a felony information charging him with conspiracy to distribute methamphetamine. In entering the guilty plea, Contreras-Cano admitted that while driving through Bernalillo County on Dec. 13, 2014, he and Davenport were stopped by Albuquerque Police officers who found ten pounds of methamphetamine, two firearms and ammunition during a consensual search of their vehicle. Contreras-Cano further admitted that he and Davenport had acquired to the methamphetamine in Phoenix, Ariz., and were planning to redistribute the methamphetamine.
On June 17, 2015, Davenport pled guilty to Counts 1 and 3 of the indictment charging him with conspiracy to distribute methamphetamine and using and carrying a firearm in relation to a drug trafficking crime. Under the terms of his plea agreement, Davenport will be sentenced to 15 years in federal prison followed by a term of supervised release to be determined by the court.
Contreras-Cano and Davenport have been in federal custody since they were arrested. They remain detained pending their sentencing hearings, which have not been scheduled.
This case was investigated by the Albuquerque offices of the FBI and Homeland Security Investigations (HSI) and the Albuquerque Police Department. Assistant U.S. Attorneys James R.W. Braun and Joel R. Meyers are prosecuting the case.
42 Defendants Facing State or Federal Drug Charges for Allegedly Selling Heroin on City’s West SideRead the Press Release
CHICAGO — Forty-two defendants are facing state or federal narcotics charges for their alleged roles in supplying and distributing heroin in the area of West Grenshaw Street and Independence Boulevard, in the North Lawndale neighborhood on the city’s west side. An investigation led by officers of the Chicago Police Department and agents of the Drug Enforcement Administration assigned to the High Intensity Drug Trafficking Area (“HIDTA”) Task Force, resulted in federal charges against 16 defendants and state charges against 26 others, who police and federal agents began arresting early this morning.
Twelve firearms, approximately $50,000, nearly a half-kilogram of heroin, and over one-half kilogram of cocaine were seized this morning during the arrests of 32 of the charged defendants. The remaining defendants are either in custody or at large. Additionally, over one and a half kilograms of heroin were seized during the course of the investigation from last August through this month. Early today, Chicago police, DEA agents, and other HIDTA law enforcement partners also executed seven search warrants upon several defendants’ residences and three alleged stash houses, and seized two vehicles, including one defendant’s 2014 Maserati, Gran Turismo.
The federal defendants were charged with conspiracy, distribution, or possession with intent to distribute narcotics in five separate criminal complaints that were filed yesterday in U.S. District Court and unsealed following the arrests. The federal defendants are scheduled to begin appearing at 3 p.m. today before U.S. Magistrate Judge Maria Valdez in U.S. District Court. The 26 state defendants face charges ranging from Class 1 to Class X Delivery of a Controlled Substance and face a potential sentencing range of four to 30 years in prison upon conviction. The state defendants are expected to appear in bond court this afternoon at the Leighton Criminal Courts Building in Chicago.
According to a 230-page affidavit in support of the federal arrests and search warrants, the investigation revealed that JAMES TRIPLETT, also known as “Trell,” 33, of Berkley, controlled the distribution of heroin in the area of the 3700 block of West Grenshaw Street, in the North Lawndale neighborhood west of Douglas Park. Triplett allegedly assigned responsibility for heroin distribution on the block he controlled to specific individuals, who further delegated distribution to shift workers who sold heroin throughout the day.
Triplett obtained his heroin largely from supplier, LEVAUGHN COLLINS, also known as “Sweet Bobby,” 34, of Chicago, who along with his narcotics associates, obtained wholesale quantities of heroin which they mixed and packaged for distribution to buyers like Triplett who then subsequently sold the heroin on the street in the area of the 3700 block of West Grenshaw Street.
The area is just south of the Interstate 290 Eisenhower Expressway corridor that has been referred to as the “Heroin Highway” because of the accessibility it provides to city and suburban heroin customers.
“The Chicago HIDTA is a powerful collaboration of local, state, and federal law enforcement which concentrates its efforts on both narcotics suppliers and street-level distributors,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “This investigation and arrests associated with this open air drug market demonstrate how effective teamwork by law enforcement agencies can significantly reduce the flow of narcotics into our communities,” he said.
“This operation demonstrates how police and prosecutors are continuing to work together to dig in at the local level and hammer away at the drug markets plaguing our local communities,” said Cook County State’s Attorney Anita Alvarez. “Once again, we are pleased to join our state and federal law enforcement partners in these ongoing and coordinated efforts.”
“Investigating, charging and arresting heroin dealers is priority number one," said SAC Wichern. "Too many lives in Chicagoland are forever lost due to heroin use. I'm proud of the work done by these agents, officers and prosecutors, who worked tirelessly to achieve these results and I’m confident that with our continued partnership, we will have increasing success."
“IRS Criminal Investigation was an integral part of today’s law enforcement events by investigating the financial aspects of these investigations,” added Special Agent-in-Charge Boyd from IRS/CID.
The complaint affidavit alleges that Triplett was a wholesale supplier of heroin who, through his drug trafficking organization, ran the heroin trade in the area of the 3700 block of West Grenshaw Street. The complaint further alleges that Triplett tasked his narcotics associates with different responsibilities ranging from picking up and transporting the packaged heroin for subsequent distribution, to running the daily operations of the Grenshaw drug spot, to collecting proceeds from heroin sales there. The Triplett drug trafficking organization employed individuals, like MARCETTEAUS MCGEE, aka “Antonio,” aka “Keitho,” 31, of Chicago; CHRISTOPHER TIDWELL, aka “Gov,” 42, of Chicago; JAMES SMITH, aka “J Dub,” 35, of Chicago; and CHIQUITA JACKSON, 29, of Chicago, to manage the Grenshaw drug spot and advise Triplett when resupply was needed, to shuttle heroin among the various stash and retail locations, and to return his share of the profits to him. The organization employed street-level workers responsible for the retail sale of its heroin such as JACKIE TYLER, 29, of Chicago.
Levaughn Collins, a wholesale supplier to the Triplet drug trafficking organization, and others, operated his heroin distribution from his main stash house at 561 East 103rd Place, as well as specific locations such as 2936 West Warren Boulevard, the charges allege. Other defendants, including LARRY COLLINS, aka “Scooter,” 38, of Chicago, JIMMY BELL, aka “Dirt,” 38, of Chicago; LAMEL BURNS, aka “Slim,” 38, of Dolton; and KEVIN GARDNER, aka “Bo,” 35 of Chicago, allegedly assisted Levaughn Collins in diluting the heroin to increase profits and packaging the heroin into smaller, user-sized quantities for street-resale. Heroin packaged and distributed by Collins’s organization was typically packaged in small user-portion plastic bags with orange basketballs, purple lady logos, green Playboy bunnies, Hershey’s kisses, or black panda bear symbols stamped on them.
One federal complaint charges twelve defendants ― James Triplett, Levaughn Collins, Larry Collins, Jimmy Bell, Lamel Burns, Kevin Gardner, Christopher Tidwell, Marcetteaus McGee, James Smith, Chiquette Jackson, Jackie Tyler and ANTON HIGGINS, aka “Spud,” 35, of Chicago― with conspiracy to possess and distribute more than a kilogram of heroin. If convicted, they each face a mandatory minimum sentence of 10 years in prison and a maximum of life imprisonment and a $10 million fine.
DONALD MCINTOSH, aka “Donnie,” 40, of Chicago, and NEKENYA HARDY, aka “Keefy,” 36, of Berwyn, were charged separately with being heroin customers of Levaughn Collins. If convicted, McIntosh faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine and Hardy faces a maximum of 20 years in prison and a $1 million fine.
ANGELES AVALOS, 32, of Chicago, was also charged separately with being a heroin supplier to Levaughn Collins. If convicted, he faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine.
DEONTE THOMAS, aka “12th Street,” 25, of Chicago, was also charged separately with distributing heroin in the 3700 block of West Grenshaw Street. If convicted, he faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine.
The 27 state defendants, charged for their alleged roles in supplying and distributing heroin are: CARL AUSTIN, DEMARIO BUTLER, DEJON CARR, LAVORA CHILDRESS, DEWAYNE COOK, JOHNNY CORBIN, SIMEON CURRIE, DEANDRE CURRY, MARQUITA DAVIS, ORLANDO EDWARDS, TERRELL HARRIS, WILLIE HUGHES, ERIC JACKSON, COSHAWNDRA JENKINS, ERIC LEMON, ANDRE MINOR, BERNARD PERSON, DARRYL PLEASANT, DONALD ROGERS, FLOYD SHAW, KENNETH SMITH, LEONARD SMITH, TIMESHA WASHINGTON, LEONARD WHITE, DOMINICK WILLIAMS and JASON WOODS.
Assistant United States Attorneys Katherine A. Sawyer and Andrew K. Polovin are representing the government in the federal cases. Assistant State’s Attorney Aaron R. Bond is prosecuting the state cases.
The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Collins Complaint
Hardy Complaint
McIntosh Complaint
Avalos Complaint
Greenshaw Affidavit
Thomas Complaint
23 June 2015
Williamson Man Sentenced for Mail Fraud ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that John Jarnot, 56, of Williamson, NY, who was convicted of participating in a mail fraud conspiracy, was sentenced to five years probation by U.S. District Judge Charles J. Siragusa.Assistant U.S. Attorney Bradley E. Tyler stated that Jarnot worked as a forklift mechanic for Xerox Corporation at the company's Webster, NY facilities. The defendant placed false orders for new and repaired forklift parts which were not needed with Clarkson Auto Electric, Inc. This allowed Clarkson Auto Electric to issue payment invoices to Xerox for the new forklift parts that Xerox never received.
Jarnot was indicted along with nine other defendants, all have been convicted.
The sentencing is the culmination of a joint investigation on the part of the Internal Revenue Service, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, and the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector in Charge, Boston Division, United States Postal Inspection Service.
Wethersfield Man Admits Participating in Multiple Swatting IncidentsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MATTHEW TOLLIS, 22, of Wethersfield, pleaded guilty today in New Haven federal court to participating in a series of “swatting” incidents that occurred in Connecticut and other states in 2014.
“Swatting” is the making of a hoax call to any emergency service to elicit an emergency response based on the false report of an ongoing critical incident. Incidents typically produce the deployment of SWAT units, bomb squads, and other police units, as well as the evacuations of schools, businesses and residences.
“Swatting incidents have wasted millions of dollars in law enforcement resources and have caused emotional distress for numerous victims,” stated U.S. Attorney Daly. “This is not a game. We are committed to exposing individuals responsible for these threats and prosecuting them to the full extent of the law.”
According to court documents and statements made in court, TOLLIS was a member of a group primarily consisting of Microsoft X-Box gamers who referred to themselves as “TCOD” (TeAM CrucifiX or Die). TOLLIS and his TCOD associates used the Internet communication service Skype to make hoax threats involving bombs, hostage taking, firearms, and mass murder. TOLLIS was identified as a participant in at least six of these swatting incidents, including a bomb threat to the UConn’s Admissions Department on April 3, 2014. This hoax call resulted in a three-hour, campus-wide lockdown and required the UConn Police and the Connecticut State Police’s Bomb Squad, Emergency Services Unit and SWAT teams to respond.
TOLLIS also participated in TCOD swatting calls to the Boston Convention and Exhibition Center, Boston University, two high schools in New Jersey and a high school in Texas. In pleading guilty, TOLLIS admitted that he identified potential institutions, including UConn and Boston University, for TCOD members to make the threatening calls, and gathered telephone numbers and other information about the targeted institutions.
The investigation revealed that one of the founders of TCOD, a resident of Scotland who has identified himself as “Verified,” was responsible for at least five additional swatting incidents in Connecticut and Massachusetts in 2014. Other members of TCOD also reside in the U.K., and the FBI continues to coordinate its investigation with law enforcement authorities in the U.K.
TOLLIS was arrested on September 3, 2014, on state charges stemming from the UConn swatting incident, and he was arrested on a federal criminal complaint on September 10, 2014. He is currently released on a $100,000 bond.
Today, TOLLIS waived his right to indictment and pleaded guilty to conspiring to engage in the malicious conveying of false information, namely a bomb threat hoax, an offense that carries a maximum term of imprisonment of five years. He is scheduled to be sentenced by Chief U.S. District Judge Janet C. Hall on September 15, 2015.
This matter is being investigated by the FBI’s New Haven, Newark and Boston field offices, the UConn Police Department, the Connecticut Intelligence Center, the Willimantic Police Department, the Monroe Police Department, the Harvard University Police Department, the Boston University Police Department, the Newton (Mass.) Police Department, the Cambridge (Mass.) Police Department and other state and local law enforcement agencies.
U.S. Attorney Daly also acknowledged the critical assistance being provided by the U.S. Attorney’s Office for the District of New Jersey.
The case is being prosecuted by Assistant U.S. Attorneys Krishna R. Patel and Stephen B. Reynolds.
West Point Cadet Convicted in White Plains Federal Court of Distributing, Receiving, and Possessing Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that RICKY PATRICK HESTER, 25, of Granger, Indiana, was found guilty on both counts of a two-count Indictment that charged him with receipt, distribution, and possession of child pornography. The verdict came following a five-day jury trial in White Plains federal court before U.S. District Judge Vincent L. Briccetti.
U.S. Attorney Preet Bharara said: “Ricky Patrick Hester received, distributed, and saved child pornography. In collecting and sharing these appalling videos, he contributed to the victimization of the most vulnerable members of our society, our children. Thanks to the efforts of the Department of Homeland Security, Hester’s conduct was brought to light and he will now be punished for his serious crimes.”
According to the Indictment and the evidence at trial:
From at least as early as November 2012, HESTER used a Yahoo! email account, a file-sharing account on Dropbox.com, as well as his personal cellphone, to collect and share images of children being forced into sexual activity.
On December 18, 2013, HESTER was interviewed by agents with Homeland Security Investigations (“HSI”) and he admitted that he had used his Yahoo! email account to send child pornography, that his preference was for boys as young as four years old, that he had used Dropbox to trade child pornography with others, and that he stored child pornography on his cellphone.
HESTER’s cellphone, which was seized by HSI on December 18, 2013, during a search warrant of HESTER’s dorm room at West Point, contained approximately 1,200 images and videos of children engaging in sexual activity.
Evidence at trial included approximately 100 emails sent or received by HESTER. In many of these emails, HESTER requested videos and images of “kids being forced to do stuff,” “boys being tied up and peed on,” and “man boy hardcore.” In numerous emails, he indicated a preference for boys aged four to 10 years old.
HESTER entered the United States Military Academy at West Point as a cadet in August 2009. He took a sabbatical from West Point from August 2011 through August 2012. He returned to West Point in the fall of 2012. At the time of his arrest, on December 19, 2013, HESTER was one semester away from graduation.
HESTER faces a maximum sentence of 20 years in prison on each of the two counts in the Indictment and a mandatory minimum term of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
HESTER lived in Granger, Indiana, from his arrest until his conviction today. Judge Briccetti remanded him following his conviction. In remanding the defendant, Judge Briccetti underscored that the videos that HESTER sought out and shared depicted children being tortured.
Mr. Bharara praised the outstanding investigative work of the Department of Homeland Security. He also thanked the Army Criminal Investigation Command for their assistance with the investigation.
This prosecution is being handled by the White Plains Division. Assistant United States Attorneys Lauren Schorr, Marcia S. Cohen, and Daniel Filor are in charge of the prosecution.
Washington Man Pleads Guilty to Bringing Drugs and Prostitution to Missoula AreaRead the Press Release
MISSOULA – Frederick Glen Johnson, 47, of Spokane Valley, Washington, pleaded guilty today in Missoula federal court to drug and prostitution-related racketeering charges. He faces a mandatory prison sentence of five to forty years, up to five million dollars in fines, and at least four years supervised release for the drug crime. For the racketeering crime involving prostitution, he faces up to five years in prison, a $250,000 fine, and three years of supervised release. U.S. Magistrate Court Judge Jeremiah Lynch presided over the change of plea and set sentencing for October 1, 2015, in Missoula.
Johnson pleaded guilty to one count of conspiracy to possess with the intent to distribute and to distribute methamphetamine and heroin as well as one count of interstate travel in aid of racketeering. In court documents, federal prosecutor Cyndee Peterson stated that a co-conspirator of Johnson’s received meth and heroin from sources in Washington state and elsewhere. The co-conspirator, Johnson, and others conspired to bring heroin and meth into Missoula County for distribution. Co-conspirators estimated that between approximately February 2014 and November 2014, they collectively possessed with intent to distribute, and did distribute, 50 grams or more of a substance or mixture containing methamphetamine, as well as 100 grams or more of the same in heroin. Johnson also brandished a Raven Arms .25 caliber semi-automatic handgun during the drug transaction.
Johnson also pleaded guilty to interstate travel in aid of racketeering, which involved travel between states in order to engage in unlawful activity. Here, the unlawful activity was prostitution or promoting prostitution in violation of Montana state law. The crime also involved Johnson taking affirmative steps to facilitate the prostitution or its promotion. Johnson travelled from Spokane, Washington to Missoula, Montana, with five people, with the intent to promote prostitution. While in Missoula, Johnson would drive the five individuals to meet with prostitution customers.
This case was prosecuted by Assistant U.S. Attorney Cyndee Peterson and investigated by the Federal Bureau of Investigation, Montana Violent Crime Task Force, Missoula Street Crimes Unit, Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Two Louisiana Residents Plead Guilty in Stolen Identity Tax Fraud SchemeRead the Press Release
Two residents of Tangipahoa Parish, Louisiana, pleaded guilty today to one count of conspiracy to defraud the United States and to commit theft of public money and mail fraud, with one defendant also pleading guilty to aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana.
According to court documents, Corey Lewis, also known as Coco, 37, and Craig Lewis, 40, conspired with each other and others to file false federal income tax returns using stolen identities including false claims for tax refunds. The defendants and others used individuals’ names and social security numbers in order to prepare false tax returns. They directed the Internal Revenue Service (IRS) to mail refund checks to addresses in Louisiana, including to post office boxes that were opened by co-conspirators. Corey Lewis and others falsely endorsed and deposited the refund checks into bank accounts under their control. The proceeds of the refund checks would then be divided amongst the co-conspirators.
The defendants are scheduled to be sentenced in U.S. District Court in the Eastern District of Louisiana on Sept. 22 and each face a statutory maximum sentence of five years in prison and a fine of $250,000 for the conspiracy count. Corey Lewis also faces a mandatory minimum sentence of two years in prison for aggravated identity theft. The defendants also face potential fines, forfeiture and restitution. Brad Lewis, also known as Bird, 32, and Cedrick Mitchell, also known as Skeet, 39, previously pleaded guilty to the same conspiracy charge and await their sentencing hearings on Aug. 25 and Sept. 15, respectively.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Hayden Brockett and Lauren Castaldi of the Tax Division and Assistant U.S. Attorney Dall Kammer of the Eastern District of Louisiana, who are prosecuting the case.
Two Louisiana Residents Plead Guilty in Stolen Identity Tax Fraud SchemeRead the Press Release
Two residents of Tangipahoa Parish, Louisiana, pleaded guilty today to one count of conspiracy to defraud the United States and to commit theft of public money and mail fraud, with one defendant also pleading guilty to aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana.
According to court documents, Corey Lewis, also known as Coco, 37, and Craig Lewis, 40, conspired with each other and others to file false federal income tax returns using stolen identities including false claims for tax refunds. The defendants and others used individuals’ names and social security numbers in order to prepare false tax returns. They directed the Internal Revenue Service (IRS) to mail refund checks to addresses in Louisiana, including to post office boxes that were opened by co-conspirators. Corey Lewis and others falsely endorsed and deposited the refund checks into bank accounts under their control. The proceeds of the refund checks would then be divided amongst the co-conspirators.
The defendants are scheduled to be sentenced in U.S. District Court in the Eastern District of Louisiana on Sept. 22 and each face a statutory maximum sentence of five years in prison and a fine of $250,000 for the conspiracy count. Corey Lewis also faces a mandatory minimum sentence of two years in prison for aggravated identity theft. The defendants also face potential fines, forfeiture and restitution. Brad Lewis, also known as Bird, 32, and Cedrick Mitchell, also known as Skeet, 39, previously pleaded guilty to the same conspiracy charge and await their sentencing hearings on Aug. 25 and Sept. 15, respectively.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Hayden Brockett and Lauren Castaldi of the Tax Division and Assistant U.S. Attorney Dall Kammer of the Eastern District of Louisiana, who are prosecuting the case.
Corey Lewis Factual Basis.pdf (599.17 KB)
Craig Lewis Factual Basis.pdf (464.47 KB)
Three MS-13 Leaders Sentenced to Decades in Prison for Racketeering and Related Charges for Multiple Murders and AttacksRead the Press Release
WASHINGTON – Three leaders of MS-13 in Washington, D.C., were sentenced today to decades in prison for conspiring to participate in racketeering activity and other charges stemming from their roles in murders, extortion and other violent crimes in the Washington area.
The sentences were announced by Acting U.S. Attorney Vincent H. Cohen, Jr.; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Clark E. Settles, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington, D.C.; and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
The defendants were found guilty of various federal offenses in August 2013 following a month-long trial in the U.S. District Court for the District of Columbia. They were sentenced by the Honorable Senior Judge Royce C. Lamberth.
Noe Machado-Erazo, aka “Gallo,” 32, of Wheaton, Md., was sentenced to life in prison plus ten years. Jose Martinez-Amaya, 28, aka “Crimen,” of Brentwood, Md., was sentenced to life in prison plus ten years. Yester Ayala, 24, aka “Freeway” and “Daddy Yankee,” of Washington, D.C., was sentenced to 30 years in prison.
“This prosecution shows our commitment to purging MS-13’s bloody brand of violence from the District of Columbia,” said Acting U.S. Attorney Cohen. “These killers brought lawless vengeance to our community and left a 14-year-old boy dead. These gang members will now have decades in prison to reflect on their heinous crimes.”
“MS-13 is a brutally violent gang that has plagued communities in many parts of this country, including Washington, D.C.,” said Assistant Attorney General Caldwell. “The lengthy sentences imposed on the MS-13 leaders convicted in this case reflect the vicious and calculated nature of the murders they committed and the gang they led.”
“HSI continuously targets transnational gangs that wreak havoc on our American communities,” said Special Agent in Charge Settles. “Today’s sentences are testament to the strong investigative work of our HSI special agents and the Metropolitan Police Department.”
“The action by the courts today further exemplifies our message to persons engaging in criminal gang activity: you will find no place for your activities here in Washington, D.C.,” said Chief Lanier. “We will work as long as necessary to ensure this city, and the capital area, are free from the violence and harm gang activity brings into our communities. The agents, officers, and attorneys have done a tremendous job bringing this case to a successful end.”
Machado-Erazo was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence. Martinez-Amaya was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence. Ayala was found guilty of one count of conspiracy to participate in racketeering activity, two counts of murder in aid of racketeering, one count of first-degree premeditated murder and one count of second-degree murder.
The government’s evidence showed that MS-13, a large gang that operates in the United States and Central America, engages in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes. The gang has numerous rules, such as enduring a beating of 13 seconds before becoming a member; killing rival gang members; and staying unfailingly loyal.
According to the government’s evidence, Machado-Erazo was a member and Martinez-Amaya was a leader of the Normandie clique, one of a number of smaller MS-13 groups operating in the Washington area. Ayala was a leader of the Sailors, another clique. The local cliques often act together, and evidence showed that Machado-Erazo was the leader of a program of cliques that worked together. According to evidence presented in court, the local MS-13 cliques act in accordance with the international MS-13’s strictures and have frequent contact with MS-13 leadership in El Salvador. The evidence showed that two of the murders were committed on orders from MS-13 leadership in El Salvador.
The three defendants are among numerous people indicted by a grand jury in 2010 following a federal investigation. Twelve others have pleaded guilty to charges in the case.
The range of criminal activity alleged in the indictment includes acts committed from 2008 through 2010 in the District of Columbia, Maryland, Virginia and other states, as well as El Salvador.
Ayala was convicted of taking part in two in 2008, and Machado-Erazo and Martinez-Amaya were convicted of taking part in the murder of another victim.
The government presented evidence that Ayala helped carry out orders to murder Louis Alberto Membreno-Zelaya, a fellow MS-13 member who had removed his gang tattoos. Membreno-Zelaya, 27, was stabbed at least 20 times, according to evidence presented in court. His body was found on Nov. 6, 2008, in Northwest Washington.
The second murder, according to evidence presented in court, took place in the late afternoon of Dec. 12, 2008. Ayala joined in on an attack against Giovanni Sanchez, 14, near the Columbia Heights Metro station in Washington. Giovanni had 11 stab wounds, and witnesses identified Ayala as one of the assailants.
According to evidence presented at trial, Machado-Erazo and Martinez-Amaya took part in the killing of Felipe Enriquez, 25, whose body was found on March 31, 2010, in Montgomery County, Md. After being lured to a remote park there, Enriquez, another fellow MS-13 member, was fatally shot. Evidence presented during trial showed that Machado-Erazo provided the gun and Martinez-Amaya committed the shooting.
This case was prosecuted by Assistant U.S. Attorney Nihar Mohanty of the District of Columbia and Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section. Those providing assistance from the U.S. Attorney’s Office included former Assistant U.S. Attorney Bill O’Malley; Victim/Witness Services Supervisor David Foster; Victim/Witness Advocates Yvonne Bryant and Christina Principe; Paralegal Specialists Candace Battle, Catherine O’Neal, and Candice Sisco; Legal Assistant Diane Brashears, and Litigation Technology Specialists Paul Howell, William Henderson, and Kimberly Smith.
The case was investigated by HSI and the MPD. Assistance was provided by the Montgomery County, Md., Prince George’s County, Md., and Riverdale Park, Md. Police Departments, the Fairfax County, Va. Police Department; the State’s Attorney’s Office for Montgomery County, the U.S. Attorney’s Office for the District of Maryland and the U.S. Attorney’s Office for the Eastern District of Virginia. Assistance was provided by the Organized Crime Drug Enforcement Task Force (OCDETF).
Three MS-13 Leaders Sentenced for Racketeering and Related Charges for Multiple Murders and AttacksRead the Press Release
Twelve Others Have Pleaded Guilty in the Case
Three leaders of MS-13 in Washington, D.C., were sentenced today to federal prison for conspiring to participate in racketeering activity and other charges stemming from their roles in murders, extortion and other violent crimes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia, Special Agent in Charge Clark E. Settles of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Washington D.C. Field Office and Chief Cathy L. Lanier of the Metropolitan Police Department (MPD) made the announcement.
Noe Machado-Erazo aka Gallo, 32, of Wheaton, Maryland, was sentenced to life in prison plus 10 years in prison. Jose Martinez-Amaya, aka Crimen, 28, of Brentwood, Maryland, was sentenced to life in prison plus 10 years in prison. Yester Ayala, aka Freeway or Daddy Yankee, 24, of Washington, D.C., was sentenced to 30 years in prison. Senior U.S. District Court Judge Royce C. Lamberth of the District of Columbia imposed the sentences.
“MS-13 is a brutally violent gang that has plagued communities in many parts of this country, including Washington, D.C.,” said Assistant Attorney General Caldwell. “The lengthy sentences imposed on the MS-13 leaders convicted in this case reflect the vicious and calculated nature of the murders they committed and the gang they led.”
“This prosecution shows our commitment to purging MS-13’s bloody brand of violence from the District of Columbia,” said Acting U.S. Attorney Cohen. “These killers brought lawless vengeance to our community and left a 14-year-old boy dead. These gang members will now have decades in prison to reflect on their heinous crimes.”
“HSI continuously targets transnational gangs that wreak havoc on our American communities,” said Special Agent in Charge Settles. “Today’s sentences are testament to the strong investigative work of our HSI special agents and the Metropolitan Police Department.”
“The action by the courts today further exemplifies our message to persons engaging in criminal gang activity: you will find no place for your activities here in Washington, D.C.,” said Chief Lanier. “We will work as long as necessary to ensure this city, and the capital area, are free from the violence and harm gang activity brings into our communities. The agents, officers, and attorneys have done a tremendous job bringing this case to a successful end.”
In August 2013, following a month-long trial, Machado-Erazo and Martinez-Amaya were found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence. Ayala was found guilty of conspiracy to participate in racketeering activity, two counts of murder in aid of racketeering, first-degree premeditated murder and second-degree murder.
MS-13 is a large gang that operates in the United States and Central America. Members engage in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes.
According to evidence presented at trial, a number of small MS-13 groups, or cliques, operate in the Washington, D.C., area. The evidence showed that the cliques have frequent contact with MS-13 leadership in El Salvador, and that they act in accordance with the MS-13’s international strictures, including the requirement that members remain unfailingly loyal to the gang.
The evidence presented at trial showed that both Machado-Erazo and Martinez-Amaya were members of the Normandie clique, and that Martinez-Amaya held a leadership position in the group; and that Ayala was a leader of the Sailors, another clique. The evidence also showed that Machado-Erazo coordinated the activities of local MS-13 cliques.
At trial, the government presented evidence that Ayala helped carry out orders to murder Louis Alberto Membreno-Zelaya, a fellow MS-13 member who had removed his gang tattoos. Membreno-Zelaya’s body was found on Nov. 6, 2008, in Northwest Washington, D.C. He had been stabbed at least 20 times.
According to evidence presented at trial, Ayala also participated in the Dec. 12, 2008, murder of 14-year-old Giovanni Sanchez near the Columbia Heights Metro station in Washington D.C. Giovanni was stabbed 11 times.
The evidence at trial also demonstrated that Machado-Erazo and Martinez-Amaya took part in the killing of Felipe Enriquez, an MS-13 member whose body was found on March 31, 2010, in Montgomery County, Maryland. The government presented evidence that Enriquez was lured to a remote park where he was fatally shot by Martinez-Amaya. Evidence presented during the trial showed that Machado-Erazo provided the gun used in the shooting.
The three defendants sentenced today are among numerous individuals charged in a 2010 indictment alleging criminal acts committed between 2008 and 2010 in the District of Columbia, Maryland, Virginia and other states, as well as in El Salvador. Twelve defendants have pleaded guilty to charges in the case.
The case was investigated by ICE-HSI and the MPD. Assistance was provided by the Montgomery County, Prince George’s County and Riverdale Park, Maryland, Police Departments; the Fairfax County, Virginia, Police Department; the State’s Attorney’s Office of Montgomery County; the U.S. Attorney’s Office of the District of Maryland and the U.S. Attorney’s Office of the Eastern District of Virginia. Assistance also was provided by the Organized Crime Drug Enforcement Task Force.
This case was prosecuted by Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Nihar Mohanty of the District of Columbia.
Texas Man Pleads Guilty to Attempted Sexual Enticement of A MinorRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that Michael Doherty (51, Texas) today pleaded guilty to the attempted sexual enticement of a minor. He faces a mandatory minimum term of 10 years, up to life, in federal prison. A sentencing date has not yet been set.
According to court documents, on March 10, 2015, an FBI agent acting in an undercover capacity (“UC”) responded to an Internet advertisement that Doherty had posted about incestuous sexual encounters. The UC responded to the ad posing as the father of a 10-year-old girl that he was sexually abusing. Over the next several days, Doherty and the UC discussed the UC’s abuse of his “daughter.” Doherty told the UC that he wanted to watch the UC have sex with the child, and also requested naked photos of the child.
Doherty later told the UC that he traveled to Florida on business and wanted to “watch” the UC and the child. Over the course of the next several days, Doherty and the UC continued to discuss Doherty’s plans to visit. Doherty sent the UC numerous explicit pictures of himself, and he told the UC that when they met, he wanted to have sex with the 10-year-old girl.
On April 8, 2015, Doherty traveled from Miami to Lake Mary and rented a hotel room. On his way, he stopped and bought a present for the child. When Doherty left his hotel and approached the “father” with whom he had been communicating, he was arrested.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Joseph M. Schuster.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.
Swedish Co-Creator of “Blackshades” Malware That Enabled Users Around the World to Secretly and Remotely Control Victims’ Computers Sentenced to 57 Months in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALEX YÜCEL, the owner of an organization known as “Blackshades” that since 2010 sold and distributed to thousands of people in more than 100 countries a sophisticated and pernicious form of malicious software, or “malware,” known as the Blackshades Remote Access Tool, or “RAT,” was sentenced today in Manhattan federal court to 57 months in prison. The sentence was imposed by U.S. District Judge P. Kevin Castel. YÜCEL pled guilty to computer hacking on February 18, 2015.
Manhattan U.S. Attorney Preet Bharara said: “Alex Yucel created, marketed, and sold software that was designed to accomplish just one thing – gain control of a computer, and with it, a victim’s identity and other important information. This malware victimized thousands of people across the globe and invaded their lives. But Yucel’s computer hacking days are now over.”
According to the allegations in documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:
Beginning in 2010, the “Blackshades” organization, which YÜCEL owned and controlled, sold and distributed malware to thousands of cybercriminals throughout the world. Blackshades’ flagship product was the RAT – a sophisticated piece of malware that enabled cybercriminals secretly and remotely to gain control over a victim’s computer. After installing the RAT on a victim’s computer, a user of the RAT had free rein to, among other things, access and view documents, photographs, and other files on the victim’s computer, record all of the keystrokes entered on the victim’s keyboard, steal the passwords to the victim’s online accounts, and even activate the victim’s web camera to spy on the victim – all of which could be done without the victim’s knowledge. A Blackshades user could also exploit victims’ computers for Distributed Denial of Service (“DDoS”) attacks by commanding Blackshades-infected computers to repeatedly send requests to targeted websites in an effort to disable those websites and deny service from those websites to legitimate visitors.
The RAT was typically advertised on forums for computer hackers and marketed as a product that conveniently combined the features of several different types of hacking tools. Copies of the Blackshades RAT were available for sale, typically for $40 each, on a website maintained by Blackshades. After purchasing a copy of the RAT, a user had to install the RAT on a victim’s computer – i.e., “infect” a victim’s computer. The infection of a victim’s computer could be accomplished in several ways, including by tricking victims into clicking on malicious links or by hiring others to install the RAT on victims’ computers.
The RAT contained tools known as “spreaders” that helped users of the RAT maximize the number of infections. The spreader tools generally worked by using computers that had already been infected to help spread the RAT further to other computers. For instance, to lure additional victims to click on malicious links that would install the RAT on their computers, the RAT allowed cybercriminals to send those malicious links to others via the initial victim’s social media service, making it appear as if the message had come from the initial victim. For example, a RAT user could send an instant message, or IM, to potential victims that appeared to come from the initial victim, inviting them to click on a link that appeared to lead to a legitimate website, but would instead install the RAT on the potential victim’s computer.
YÜCEL co-created the Blackshades RAT with Michael Hogue and operated the Blackshades organization with the help of several employees whom YÜCEL paid to advertise the RAT on various Internet forums and to provide customer support. The RAT was purchased by several thousand users in more than 100 countries and used to infect more than half a million computers worldwide. Blackshades generated sales of more than $350,000 between September 2010 and April 2014.
* * *
YÜCEL, 25, a Swedish national, was arrested in Moldova in November 2013. He was the first defendant ever to be extradited from Moldova to the United States. In addition to the prison term, YÜCEL was sentenced to three years supervised release, and forfeiture of $200,000 and the computer equipment used.
Brendan Johnston, an administrator for the Blackshades organization, pled guilty in November 2014, before U.S. District Judge Jesse M. Furman to conspiracy to commit computer hacking. On June 19, 2015, Johnston was sentenced to one year and one day in prison.
Marlen Rappa, a customer of Blackshades who purchased the RAT and used it to infect victims’ computers, spy on those victims using their web cameras, and steal personal files from their computers, pled guilty in October 2014, before U.S. District Judge Valerie E. Caproni. On April 22, 2015, Rappa was sentenced to one year and one day in prison.
Kyle Fedorek, a customer of Blackshades who purchased the RAT and used it to steal financial and other account information from more than 400 victims, pled guilty in August 2014 before U.S. Magistrate Judge Gabriel W. Gorenstein. On February 19, 2015, Fedorek was sentenced by U.S. District Judge Vernon S. Broderick to two years in prison.
Michael Hogue, the co-creator of the RAT, pled guilty before Judge Castel in January 2013, and is awaiting sentencing.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Daniel Noble and Sarah Lai are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is in charge of the forfeiture aspects of the case.
Springfield Man Sentenced to 15 Years for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Andrew Paul Dinsmore, 19, of Springfield, was sentenced by U.S. District Judge M. Douglas Harpool to 15 years in federal prison without parole. The court also sentenced Dinsmore to a life term of supervised release following incarceration, and ordered Dinsmore to pay $3,000 in restitution to a victim.
On Feb. 2, 2015, Dinsmore pleaded guilty to receiving and distributing child pornography between July 5 and Aug. 25, 2014. Law enforcement received a tip from the National Center for Missing and Exploited Children in August 2014 when an Internet site flagged suspected child pornography being uploaded. Investigators identified Dinsmore’s computer as sharing a video of child pornography over the Internet.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
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.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Somerset County, New Jersey, Man Charged with Defrauding Investors of $1.5 MillionRead the Press Release
NEWARK, N.J. – A Somerset County, New Jersey, man is expected to appear in court today on charges of fraud for allegedly soliciting $1.5 million from 16 investors based upon false and fraudulent financial records, U.S. Attorney Paul J. Fishman announced.
Rostyslaw Mykytyn, 56, of Skillman, New Jersey, was indicted by a federal grand jury on June 19, 2015, on five counts of wire fraud. His initial appearance and arraignment is scheduled for later today before U.S. Magistrate Judge James B. Clark III.
According to the indictment:
Mykytyn was the owner, president and CEO of RGM Management Co., d/b/a/ Campbell Co. Inc. Campbell was located in Washington State and provided sales representative services to a company that manufactured and distributed power and cooling infrastructures for large computer spaces. Mykytyn solicited various investors for Campbell based upon false and fraudulent financial statements.
Mykytyn allegedly created false commission statements from a client that showed sales in excess of $4 million, of which Campbell was due $472,720, to make Campbell’s income appear greater than it was. Mykytyn also falsely represented Campbell’s assets to investors who, relying on those representations, wire transferred $1.5 million into the company. Mykytyn would then divert a portion of the investment to himself to pay for his personal expenses, without disclosing the diversion to his investors.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a fine of up to the greater of $250,000 or twice the gain or twice the loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to these charges.
The government is represented by Special Assistant U.S. Attorney Jillian J. Reyes of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Shiprock Man Sentenced for Federal Misdemeanor Assault ConvictionRead the Press Release
ALBUQUERQUE – James Sorrelhorse, Jr., 26, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced today in federal court in Albuquerque, N.M., to time served (131 days) followed by two years of probation for his misdemeanor assault conviction.
Sorrelhorse was arrested on Feb. 17, 2015, on a criminal complaint charging him with stabbing another Navajo man on Nov. 20, 2011, in Shiprock, on the Navajo Indian Reservation in San Juan County, N.M.
On April 17, 2015, Sorrelhorse entered a guilty plea to a misdemeanor information charging him with assault by striking. In entering his guilty plea, Sorrelhorse admitted that on Nov. 20, 2011, he grabbed and assaulted the victim by striking him on the face and head.
This case was investigated by the Shiprock office of the Navajo Nation Division of Public Safety and was prosecuted by Assistant U.S. Attorney Linda Mott.
Seventeen Alleged Leaders and Associates of Clan Usuga Indicted in Brooklyn and Miami as Part of Coordinated Strike Against Colombia’s Largest and Most Influential Drug Trafficking and Armed BACRIM Criminal GroupRead the Press Release
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York and Regional Director Jay Bergman of the Andean Region of the Drug Enforcement Administration (DEA) announced today the unsealing of five indictments in U.S. federal courts in Brooklyn, New York, and Miami charging 17 alleged leaders and associates of Colombia’s largest and most influential BACRIM (banda criminal or criminal group), Clan Usuga (formerly referred to as Los Urabeños). The alleged leaders and other high-ranking members of Clan Usuga are charged with operating continuing criminal enterprises, participating in international cocaine trafficking conspiracies and using firearms in furtherance of drug trafficking crimes. Clan Usuga and many of its principal leaders have been previously designated by the President of the United States and the Department of the Treasury, Office of Foreign Assets Control as specially designated narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act. The Department of State has posted a $5 million reward for information leading to the arrest and/or conviction of alleged Clan Usuga principal leader Dairo Antonio Usuga David, also known as Otoniel.
“The cases referenced today demonstrate that the U.S. government, in collaboration with our international law enforcement partners, continues to successfully combat leaders and associates of BACRIM criminal enterprises that seek to supply narcotics to the United States,” said U.S. Attorney Ferrer. “Together, the U.S. Attorney’s Offices and the Colombian authorities strive to systematically dismantle one BACRIM structure after another and eliminate the threat they pose to our communities.”
“The indictments announced today are the result of a sweeping national and international effort to stem the flow of drugs across the world and into our communities,” said Acting U.S. Attorney Currie. “We stand united with our partners in Colombia in our unwavering commitment to root out the leaders of drug trafficking criminal enterprises wherever they may be found.”
U.S. Attorney Ferrer and Acting U.S. Attorney Currie extended their grateful appreciation to the DEA’s New York Field Division, Miami Field Division and the Bogotá Country Office as well as the Department of Homeland Security, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) New York El Dorado Task Force and the Colombian National Police, the agencies responsible for leading the investigations. Mr. Ferrer and Mr. Currie also expressed their gratitude for the invaluable assistance provided by the Colombian Fiscalia General and the Department of Justice’s Office of International Affairs.
“These indictments are the culmination of years of work and far too often heartfelt sacrifice by the brave men and women of the Colombian National Police and the Office of the Prosecutor General of Colombia,” said DEA Regional Director Bergman. “These indictments represent the United States’ steadfast bilateral commitment to conclusively dismantle what is the largest and arguably the last of the nationally structured criminal bands in Colombia.”
“Today’s indictments illustrate our commitment, along with our international law enforcement partners to disrupt a criminal network responsible for smuggling tons of cocaine into the United States,” said Country Attaché Luis Sierra of ICE-HSI in Colombia. “HSI will continue to use its unique customs authorities to attack and dismantle these types of organizations and will aggressively pursue leads, regardless of where that information may lead us.”
Six of the Clan Usuga leaders were charged in both Brooklyn and Miami. Dairo Antonio Usuga-David aka “Otoniel,” “Mao,” “Gallo,” and “Mauricio-Gallo,” is alleged to be the principal leader of CLAN USUGA. Roberto Vargas Gutierrez aka “Gavilan,” Carlos Alberto Moreno Turberquia aka “Nicolas,” Aristides Manuel Mesa Paez aka “El Indio,” and Cesar Daniel Anaya Martinez aka “Tierra,” are alleged commanders of Clan Usuga responsible for collecting drug taxes, managing armed combatants and maintaining control over specific territorial areas within Colombia. Also charged in Brooklyn and Miami is an alleged manager of Clan Usuga, Ramiro Caro Pineda aka “Nolasco,” who was in charge of collecting drug taxes, coordinating drug shipments and maintaining control over airstrips and ports on the coast of Colombia.
The Brooklyn indictments also charge seven other cartel leaders, including Daniel Rendon-Herrera aka “Don Mario,” the original founder and prior leader of Clan Usuga; Luis Orlando Padierna Pena aka “Inglaterra,” and Jobanis de Jesus Avila Villadiego aka “Chiquito” and “Chiquito Malo,” commanders of Clan Usuga; and Jhoni Alberto Grajales aka “Guajiro,” Orlando Gutierrez-Rendon aka “Negro Orlando,” Gustavo Palomino Araujo aka “Camilo,” and Eduard Fernando Cardoza-Giraldo aka “Boliqueso” – alleged leaders of drug collections offices and paramilitary armed groups aligned with Clan Usuga.
A Miami indictment unsealed today charges Dairo Antonio Usuga-David aka “Otoniel,” “Mao,” and “Mauricio,” Jairo De Jesus Durango Restrepo aka “Gua Gua,” Roberto Vargas Gutierrez aka “Gavilan,” Aristides Manuel Mesa Paez aka “El Indio,” Alverio Feo Alvarado aka “Benevides,” Oscar David Pulgarin-Ganan aka “Nino” and “Coroso,” Ramiro Caro-Pineda aka “Nolasco” and “Hugo,” Cesar Daniel Anaya Martinez aka “Tierra,” and Eduardo Luis Vargas Gutierrez aka “Pipon,” with conspiring to distribute five kilograms or more of cocaine, knowing that it would be imported into the United States. Specifically, the defendants are charged with the distribution from as early as 2002 through June 2015, in Colombia, Venezuela, Ecuador, Guatemala, Panama, Honduras, Costa Rica, Nicaragua, Mexico and elsewhere.
According to a previously unsealed superseding indictment out of Miami, beginning around October 2006 through Feb. 10, 2012, defendants Henry De Jesus Lopez Londono aka “Mi Sangre,” “Salvador,” “Carlos Mario,” “Brother,” “Krackin,” and “Federico,” Jhon Fernando Giraldo Usuga aka “Simon,” and “Revenlino,” Arley Usuga Torres aka “07,” “Siete,” and “Samuel,” Jose Carlos Londono Robledo aka “Tito” and “Wolverine,” Carlos Antonio Moreno Tuberquia aka “Nicholas,” Edison Gomez Molina aka “El Doctor,” and Juan Diego Giraldo Usuga aka “Menor” and “Camilo,” are charged with conspiring to distribute five kilograms or more of cocaine knowing that it would be imported into the United States. Gomez Molina, Giraldo Usuga and Fernando Usuga pleaded guilty to the superseding indictment on Nov. 26, 2013, March 20, 2014, and May 8, 2014, respectively. According to their stipulated factual proffers, from at least October 2006 through February 2012, Gomez Molina, Giraldo Usuga and Fernando Usuga, along with others, used airplanes and other means of transportation to ship multiple loads of cocaine from Colombia to Central America. The loads ranged anywhere from 300 to 600 kilograms each. From there, the cocaine would be delivered to representatives of other organizations, who would take the cocaine and ultimately import it into the United States. Each defendant admitted that he was responsible for the shipment or attempted shipment of at least 150 kilograms of cocaine and knew that the cocaine would ultimately be imported into the United States. Gomez Molina was sentenced to serve 63 months in prison on Feb. 4, 2014. Girlado Usuga was sentenced to serve 63 months in prison on June 9, 2014. Fernando Usuga was sentenced to serve 168 months in prison on Aug. 29, 2014.
In another Miami indictment, Victor Alfonso Mosquera Perez aka “Negro,” is charged with conspiring to distribute five kilograms or more of cocaine, knowing that it would be imported into the United States. Specifically, the distribution allegedly occurred from as early as 2008 until approximately May 9, 2014, in Colombia, Honduras, Nicaragua and elsewhere.
According to another indictment, Andres Fernandez Perez-Restrepo aka “Anthrax,” is charged with conspiring to distribute five kilograms or more of cocaine, knowing that it would imported into the United States. Specifically, the defendant is alleged to have committed the distribution from at least as early as July 2012 through March 2, 2014, in Colombia, Honduras and elsewhere.
As detailed in one of the Brooklyn indictments, between June 2003 and December 2014, Usuga-David, Vargas Gutierrez, Moreno Turberquia, Padierna Pena, Avila Villadiego, Anaya Martinez and others, as leaders of Clan Usuga, conspired to import more than 73 metric tons of cocaine into the United States. Clan Usuga coordinated the production, purchase and transfer of multi-ton shipments of cocaine, as well as the receipt of shipments of cocaine in Mexico and Central America, for ultimate importation into the United States. Clan Usuga also controlled territory in various areas in Colombia and imposed a tax on any drug traffickers operating in those territories – a set fee for every kilogram of cocaine that was manufactured, stored or transported through areas under their control. The indictment further alleges that these defendants employed sicarios, or hitmen, who carried out acts of violence including murders, assaults, kidnappings and assassinations to collect drug debts, maintain discipline, control and expand drug territory and to promote and enhance the position of the organization.
In a second of the indictments unsealed in Brooklyn, Orlando Gutierrez-Rendon aka “Negro Orlando,” is charged with leading the Gutierrez-Rendon drug trafficking organization, a cocaine trafficking and cocaine-debt collection organization based in Cali, Colombia, that was aligned with Clan Usuga. According to the indictment, the Gutierrez-Rendon’s organization was involved in multi-ton shipments of cocaine from Colombia to Mexico, El Salvador and Panama for ultimate importation into the United States. The organization is also alleged to have acted as a collection agency, using violence and murder to collect payments and outstanding debts related to cocaine shipments on behalf of Clan Usuga. In exchange for its role in collecting funds, the organization received ownership interests in the cocaine shipments. Gutierrez-Rendon is also charged with conspiring to murder rival drug traffickers, including the murder of Samir Garcia. Between January 2006 and May 2013, Gutierrez-Rendon allegedly imported more than 30,000 kilograms of cocaine into the United States.
In a third Brooklyn indictment, Gustavo Palomino Araujo aka “Soldado,” “Zarco,” and “Camilo,” is charged with leading the Palomino Araujo, an organization responsible for cocaine trafficking, cocaine-debt collection and a paramilitary organization based in Cali, Colombia, that was aligned with Clan Usuga. The organization allegedly facilitated the transfer of multi-ton shipments of cocaine from Colombia to Mexico and Central America for importation into the United States, controlled territory in various areas in Colombia, imposed a tax on any drug traffickers operating in regions under its control and employed sicarios, or hitmen, to collect debts. Palomino Araujo is also charged with conspiring to murder numerous drug rivals.
In the fourth Brooklyn indictment, Eduard Fernando Cardoza-Giraldo aka “Boliqueso,” is charged with international cocaine trafficking in connection with his role in controlling a drug debt collection office aligned with Clan Usuga.
In all, 25 individuals have been charged in the investigations coordinated between the U.S. Attorneys’ Offices in Brooklyn and Miami. All of the defendants face a maximum sentence of life in prison, if convicted of the charges against them. Certain individuals named in indictments unsealed today have also been charged by other U.S. Attorneys’ Offices around the country. These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
The cases in the U.S. Attorney’s Office of the Eastern District of New York are being prosecuted by Assistant U.S. Attorneys Steven L. Tiscione, Gina M. Parlovecchio and Margaret Lee of the office’s International Narcotics and Money Laundering Section.
The cases in the U.S. Attorney’s Office of the Southern District of Florida are being prosecuted by Assistant U.S. Attorney Michael Nadler of the office’s Narcotics Section.
An indictment is a formal charging document notifying the defendant of the charges. All persons charged in an indictment are presumed innocent until proven guilty.
Seventeen Alleged Leaders and Associates of Clan Usuga Indicted in Brooklyn and Miami as Part of Coordinated Strike Against Colombia’s Largest and Most Influential Drug Trafficking and Armed Bacrim Criminal GroupRead the Press Release
BOGOTA, COLOMBIA --Wifredo A. Ferrer, United States Attorney for the Southern District of Florida (SDFL), Kelly T. Currie, Acting United States Attorney for the Eastern District of New York (EDNY) and Jay Bergman, Regional Director of the Andean Region for the U.S. Drug Enforcement Administration (DEA), announced today the unsealing of five indictments in U.S. federal courts in Brooklyn, New York and Miami, Florida charging 17 alleged leaders and associates of Colombia’s largest and most influential BACRIM (banda criminal or criminal group), CLAN USUGA (formerly referred to as Los Urabeños). The alleged leaders and other high-ranking members of CLAN USUGA are charged with operating continuing criminal enterprises, participating in international cocaine trafficking conspiracies, and using firearms in furtherance of drug trafficking crimes. CLAN USUGA and many of its principal leaders have been previously designated by the President of the United States and the U.S. Department of the Treasury, Office of Foreign Assets Control as specially designated narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act. The U.S. Department of State has posted a $5 million reward for information leading to the arrest and/or conviction of alleged CLAN USUGA principal leader Dairo Antonio Usuga David, also known as Otoniel.
“The indictments announced today are the result of a sweeping national and international effort to stem the flow of drugs across the world and into our communities,” said Kelly T. Currie, Acting U.S. Attorney for the Eastern District of New York. “We stand united with our partners in Colombia in our unwavering commitment to root out the leaders of drug trafficking criminal enterprises wherever they may be found.”
“The cases referenced today demonstrate that the U.S. government, in collaboration with our international law enforcement partners, continues to successfully combat leaders and associates of BACRIM criminal enterprises that seek to supply narcotics to the United States,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “Together, the U.S. Attorney’s Offices and the Colombian authorities strive to systematically dismantle one BACRIM structure after another and eliminate the threat they pose to our communities.”
Mr. Currie and Mr. Ferrer extended their grateful appreciation to the Drug Enforcement Administration’s New York Field Division, Miami Field Division, and the Bogota Country Office as well as the Department of Homeland Security, Homeland Security Investigations (HSI) New York El Dorado Task Force, and the Colombian National Police, the agencies responsible for leading the investigations. Mr. Currie and Mr. Ferrer also expressed their gratitude for the invaluable assistance provided by the Colombian Fiscalia General and the U.S. Department of Justice Office of International Affairs.
“These indictments are the culmination of years of work and far too often heartfelt sacrifice by the brave men and women of the Colombian National Police and the Office of the Prosecutor General of Colombia,” said DEA Regional Director Jay Bergman. “These indictments represent the United States’ steadfast bilateral commitment to conclusively dismantle what is the largest and arguably the last of the nationally structured criminal bands in Colombia.”
“Today’s indictments illustrate our commitment, along with our international law enforcement partners to disrupt a criminal network responsible for smuggling tons of cocaine into the United States,” said Luis Sierra, country attaché for HSI in Colombia. “HSI will continue to use its unique customs authorities to attack and dismantle these types of organizations, and will aggressively pursue leads, regardless of where that information may lead us.”
Six of the CLAN USUGA leaders were charged in both Brooklyn and Miami. Dairo Antonio Usuga-David, also known as “Otoniel,” “Mao,” “Gallo,” and “Mauricio-Gallo,” is alleged to be the principal leader of CLAN USUGA. Roberto Vargas Gutierrez, also known as “Gavilan,” Carlos Alberto Moreno Turberquia, also known as “Nicolas,” Aristides Manuel Mesa Paez, also known as “El Indio,” and Cesar Daniel Anaya Martinez, also known as “Tierra,” are alleged commanders of CLAN USUGA responsible for collecting drug taxes, managing armed combatants, and maintaining control over specific territorial areas within Colombia. Also charged in Brooklyn and Miami is an alleged manager of CLAN USUGA, Ramiro Caro Pineda, also known as “Nolasco,” who was in charge of collecting drug taxes, coordinating drug shipments, and maintaining control over airstrips and ports on the coast of Colombia.
The Brooklyn indictments also charge seven other cartel leaders, including Daniel Rendon-Herrera, also known as “Don Mario,” the original founder and prior leader of CLAN USUGA; Luis Orlando Padierna Pena, also known as “Inglaterra,” and Jobanis de Jesus Avila Villadiego, also known as “Chiquito” and “Chiquito Malo,” commanders of CLAN USUGA; and Jhoni Alberto Grajales, also known as “Guajiro,” Orlando Gutierrez-Rendon, also known as “Negro Orlando,” Gustavo Palomino Araujo, also known as “Camilo,” and Eduard Fernando Cardoza-Giraldo, also known as “Boliqueso” – alleged leaders of drug collections offices and paramilitary armed groups aligned with CLAN USUGA.
A Miami indictment unsealed today, United States v. Dairo Antonio Usuga-David, et. al., 15 CR 20403-WPD, charges Dairo Antonio Usuga-David, also known as “Otoniel,” “Mao,” and “Mauricio,” Jairo De Jesus Durango Restrepo, also known as “Gua Gua,” Roberto Vargas Gutierrez, also known as “Gavilan,” Aristides Manuel Mesa Paez, also known as “El Indio,” Alverio Feo Alvarado, also known as “Benevides,” Oscar David Pulgarin-Ganan, also known as “Nino” and “Coroso,” Ramiro Caro-Pineda, also known as “Nolasco” and “Hugo,” Cesar Daniel Anaya Martinez, also known as “Tierra,” and Eduardo Luis Vargas Gutierrez, also known as “Pipon,” with conspiring to distribute 5 kilograms or more of cocaine, knowing that it would be imported into the United States. Specifically, the defendants are charged with the distribution from as early as 2002 through June 2015, in Colombia, Venezuela, Ecuador, Guatemala, Panama, Honduras, Costa Rica, Nicaragua, Mexico, and elsewhere.
According to a previously unsealed superseding indictment out of Miami, United States v. Lopez Londono, et. al., 10 CR 20763 – Lenard (DE 9), beginning around October 2006 through February 10, 2012, defendants Henry De Jesus Lopez Londono, also known as “Mi Sangre,” “Salvador,” “Carlos Mario,” “Brother,” “Krackin,” and “Federico,” Jhon Fernando Giraldo Usuga, also known as “Simon,” and “Revenlino,” Arley Usuga Torres, also known as “07,” “Siete,” and “Samuel,” Jose Carlos Londono Robledo, also known as “Tito” and “Wolverine,” Carlos Antonio Moreno Tuberquia, also known as “Nicholas,” Edison Gomez Molina, also known as “El Doctor,” and Juan Diego Giraldo Usuga, also known as “Menor” and “Camilo,” are charged with conspiring to distribute 5 kilograms or more of cocaine knowing that it would be imported into the United States. Gomez Molina, Giraldo Usuga, and Fernando Usuga pled guilty to the superseding indictment on November 26, 2013, March 20, 2014, and May 8, 2014, respectively (DE 72, 98, 110). According to their stipulated factual proffers (DE 74, 101, 112), from at least October 2006 through February 2012, Gomez Molina, Giraldo Usuga, and Fernando Usuga, along with others, used airplanes and other means of transportation to ship multiple loads of cocaine from Colombia to Central America. The loads ranged anywhere from 300 to 600 kilograms each. From there, the cocaine would be delivered to representatives of other organizations, who would take the cocaine and ultimately import it into the United States. Each defendant admitted that he was responsible for the shipment or attempted shipment of at least 150 kilograms of cocaine and knew that the cocaine would ultimately be imported into the United States. Gomez Molina was sentenced to 63 months in prison on February 4, 2014 (DE 90). Girlado Usuga was sentenced to 63 months’ imprisonment on June 9, 2014 (DE 124). Fernando Usuga was sentenced to 168 months’ imprisonment on August 29, 2014 (DE 139).
In another Miami indictment, United States v. Victor Alfonso Mosquera Perez, 14 CR 20332 – Moore/McAliley (DE 1), Victor Alfonso Mosquera Perez, also known as “Negro,” is charged with conspiring to distribute 5 kilograms or more of cocaine, knowing that it would be imported into the United States. Specifically, the distribution allegedly occurred from as early as 2008 until approximately May 9, 2014, in Colombia, Honduras, Nicaragua, and elsewhere.
According to another indictment, United States v. Andres Fernandez Perez-Restrepo, 14 CR 20333 – Ungaro/Otazo-Reyes (DE 1), Andres Fernandez Perez-Restrepo, also known as “Anthrax,” is charged with conspiring to distribute 5 kilograms or more of cocaine, knowing that it would imported into the United States. Specifically, the defendant is alleged to have committed the distribution from at least as early as July 2012 through March 2, 2014, in Colombia, Honduras, and elsewhere.
As detailed in one of the Brooklyn indictments, United States v. Usuga-David et al., 14 CR 625 (S-2) (DLI), between June 2003 and December 2014, Usuga-David, Vargas Gutierrez, Moreno Turberquia, Padierna Pena, Avila Villadiego, Anaya Martinez, and others, as leaders of CLAN USUGA, conspired to import more than 73 metric tons of cocaine into the United States. CLAN USUGA coordinated the production, purchase, and transfer of multi-ton shipments of cocaine, as well as the receipt of shipments of cocaine in Mexico and Central America, for ultimate importation into the United States. CLAN USUGA also controlled territory in various areas in Colombia and imposed a tax on any drug traffickers operating in those territories – a set fee for every kilogram of cocaine that was manufactured, stored, or transported through areas under their control. The indictment further alleges that these defendants employed sicarios, or hitmen, who carried out acts of violence including murders, assaults, kidnappings, and assassinations to collect drug debts, maintain discipline, control and expand drug territory, and to promote and enhance the position of the organization.
In a second of the indictments unsealed in Brooklyn, United States v. Gutierrez-Rendon, 14 CR 607 (CBA), Orlando Gutierrez-Rendon, also known as “Negro Orlando,” is charged with leading the Gutierrez-Rendon drug trafficking organization, a cocaine trafficking and cocaine-debt collection organization based in Cali, Colombia that was aligned with CLAN USUGA. According to the indictment, the Gutierrez-Rendon’s organization was involved in multi-ton shipments of cocaine from Colombia to Mexico, El Salvador, and Panama for ultimate importation into the United States. The organization is also alleged to have acted as a collection agency, using violence and murder to collect payments and outstanding debts related to cocaine shipments on behalf of CLAN USUGA. In exchange for its role in collecting funds, the organization received ownership interests in the cocaine shipments. Gutierrez-Rendon is also charged with conspiring to murder rival drug traffickers, including the murder of Samir Garcia. Between January 2006 and May 2013, Gutierrez-Rendon allegedly imported more than 30,000 kilograms of cocaine into the United States.
In a third Brooklyn indictment, United States v. Palomino-Araujo, 15 CR 162 (CBA), Gustavo Palomino Araujo, also known as “Soldado,” “Zarco,” and “Camilo,” is charged with leading the Palomino Araujo an organization responsible for cocaine trafficking, cocaine-debt collection, and a paramilitary organization based in Cali, Colombia that was aligned with CLAN USUGA. The organization allegedly facilitated the transfer of multi-ton shipments of cocaine from Colombia to Mexico and Central America for importation into the United States, controlled territory in various areas in Colombia, imposed a tax on any drug traffickers operating in regions under its control, and employed sicarios, or hitmen, to collect debts. Palomino Araujo is also charged with conspiring to murder numerous drug rivals.
In the fourth Brooklyn indictment, United States v. Cardoza-Giraldo, 15 CR 305 (KAM), Eduard Fernando Cardoza-Giraldo, also known as “Boliqueso,” is charged with international cocaine trafficking in connection with his role in controlling a drug debt collection office aligned with CLAN USUGA.
In all, 25 individuals have been charged in the investigations coordinated between the U.S. Attorneys’ Offices in Brooklyn and Miami. All of the defendants face a maximum sentence of life in prison if convicted of the charges against them. Certain individuals named in indictments unsealed today have also been charged by other U.S. Attorneys’ Offices around the country. These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
The cases in the Eastern District of New York are being prosecuted by Assistant U.S. Attorneys Steven L. Tiscione, Gina M. Parlovecchio, and Margaret Lee from the Office’s International Narcotics and Money Laundering Section.
The cases in the Southern District of Florida are being prosecuted by Assistant U.S. Attorney Michael Nadler from the Office’s Narcotics Section.
An indictment is a formal charging document notifying the defendant of the charges. All persons charged in an indictment are presumed innocent until proven guilty.
BACRIM.Clan Usuga Joint PR Spanish version
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Londono, Henry De Jesus Lopez, et al Indictment
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negro.orlando.indictment
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Secret Owner of Offshore Brokerage Firm Arrested for Alleged Leadership Role in A $300 Million Securities Fraud and Money Laundering SchemeRead the Press Release
Gregg R. Mulholland, a dual U.S. and Canadian citizen, was arrested at Phoenix International Airport earlier today during a layover of his flight from Canada to Mexico on charges of securities fraud conspiracy and money laundering conspiracy for fraudulently manipulating the stocks of numerous U.S. publicly-traded companies and then laundering approximately $300 million in profits through at least five offshore law firms. Mulholland was the secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama and Belize City, Belize, which was indicted in September 2014 (United States v. Bandfield, et al., 14-CR-476 (ILG)). The defendant’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for tomorrow before United States Magistrate Judge Eileen Willett at the Sandra Day O’Connor United States Courthouse in Phoenix, Arizona.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Raymond R. Parmer Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI).
“As charged in the criminal complaint, Mulholland used an elaborate offshore corporate structure built on lies and deceit to defraud U.S. investors in publicly-traded companies and profited to the tune of $300 million. He concealed his leadership role in this fraudulent network, which included stock promoters, lawyers, and broker-dealers, by using aliases and sham companies, and fled the United States when his secretly-owned brokerage firm was indicted last summer,” stated Acting United States Attorney Currie. “We are committed to closing fraudulent offshore safe havens and prosecuting those who seek to abuse the financial markets to enrich themselves.” Mr. Currie thanked the Securities and Exchange Commission and the Justice Department’s Office of International Affairs for their cooperation and assistance in the investigation.
“Mulholland’s alleged sophisticated scheme for ill-gotten gains included everything from lies, fraud, and offshore firms. It all caught up with him today when he was arrested and charged with securities fraud conspiracy and money laundering conspiracy. The FBI will continue to work with our partners to police our markets and ensure they are legal, fair, and equitable,” stated FBI Assistant Director-in-Charge Rodriguez.
“The use of overseas accounts and other offshore mechanisms to conceal income and assets is obviously of great interest to the Internal Revenue Service,” stated IRS-CI Special Agent-in-Charge Kitchen. “Investment fraud schemes that incorporate these means to hide proceeds ultimately make the Internal Revenue Service an unwitting, additional victim. In response, IRS-Criminal Investigation, working with our law enforcement partners, will follow the global financial trail to unravel such crimes.”
“Mulholland’s arrest puts an end to an alleged money laundering and security fraud scheme that was motivated by greed,” said HSI New Special Agent in Charge Parmer. “HSI will work with our law enforcement partners and use every tool at our disposal to combat financial crimes that cost tax payers millions of dollars.”
According to the complaint unsealed this morning in Brooklyn federal court, between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (a) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (b) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (c) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms. Through this scheme, the Mulholland Group laundered approximately $300 million in fraudulent proceeds.
To facilitate these interrelated schemes, the complaint charges that the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm. This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in numerous “pump and dump” schemes. This structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap in May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK. Prior to this May 15, 2014 conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.
Mulholland used the services of a U.S.-based lawyer to launder the $300 million generated through his stock manipulation of CYNK and other U.S. companies – directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. These concealment schemes enabled Mulholland to evade reporting requirements to the IRS.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Mulholland faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis and Winston Paes are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division will be responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendant:
GREGG R. MULHOLLAND
Age: 45
San Juan Capistrano, California
Vancouver, Canada