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23 June 2015
Alpharetta Business Owner Convicted of Defrauding NASA and National Science Foundation of Almost $800,000Read the Press Release
ATLANTA – Craig D. Near and Genziko, Inc., of Alpharetta, Georgia, were convicted by a federal jury Friday, June 19, 2015, on seven counts of wire fraud and two counts of filing false claims against the United States, all relating to a procurement fraud scheme targeting the National Aeronautics and Space Administration (NASA) and the National Science Foundation (NSF).
“For years this defendant supported himself and his family in a suburban lifestyle, with practically his only earnings being the fruits of his scheme defrauding the government,” said Acting U.S. Attorney John Horn. “The Small Business Innovation Research Program, which Near defrauded, supports technological innovation by investing federal research funds in critical priorities. Near’s scheme diverted funds that should have been used for these important goals.”
“The NASA Office of Inspector General is committed to ensuring aggressive oversight of taxpayer funds used for scientific research by NASA contractors and grantees,” said Paul Martin, NASA Inspector General.
“The Small Business Innovation Research Program sets aside funds to support small companies that conduct innovative research. These convictions of guilt on nine counts, including wire fraud and false claims, send a strong signal to anyone who would seek to defraud this program and divert taxpayer dollars intended for scientific research to personal use. I commend the U.S. Attorney’s office and our investigative partners for their work on this case,” said Allison Lerner, the National Science Foundation Inspector General.
“The United States Secret Service and our law enforcement partners take an aggressive approach towards investigating individuals who commit fraud to illegally enrich themselves. We will continue to work closely with prosecutors to ensure offenders are put behind bars,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
According to Acting U.S. Attorney Horn, the charges and other information presented in court: From approximately June 2008 to June 2014, Near submitted numerous fraudulent grant and contract proposals to various federal agencies seeking funds for scientific research. Near submitted all of the proposals through his company, Genziko. All of the proposals falsely stated that Genziko had multiple employees. The proposals also listed the credentials of an apparently impressive management team with many years of experience in the relevant scientific and engineering specialties, without the knowledge or consent of several of those individuals.
Some of the proposals also contained fraudulent budgets. Near, through Genziko, Inc., inserted a variety of fake costs into the fraudulent budgets, including salaries for engineers and technicians who were not needed to accomplish the research work. Near pocketed the salaries for these “phantom employees” and also collected inflated overhead and general and administrative costs from the government based on their fictitious wages. At the same time, Near pocketed money earmarked for the university subcontractors and scientist consultants who actually completed work on the research projects. Taken together, these fraudulent techniques allowed Near and Genziko, Inc., to conceal the fact that they were making profits ranging from 79 to 197 percent on the three proposals that were actually granted by the government. These profits were far in excess of the seven percent maximum that was allowed for these contracts by the NSF and NASA.
In sum, Near and Genziko, Inc., received almost $800,000 in federal research funds on the three granted proposals. Rather than using the money for the scientific research for which it was intended, Near spent it almost entirely on personal expenses such as mortgage payments, private school tuition for his children, vacations, shopping, and large money wires to family and friends overseas.
Sentencing has been scheduled for 10:00 am on September 1, 2015, before United States District Judge Thomas W. Thrash.
This case is being investigated by the National Aeronautics and Space Administration, the National Science Foundation, and the United States Secret Service.
Assistant United States Attorneys Alana R. Black and Lynsey M. Barron are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
APRN Admits Receiving Kickbacks from Drug Company for Prescribing Pain MedicationRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that HEATHER ALFONSO, 42, of Middlebury, waived her right to indictment and pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to receiving kickbacks in relation to a federal healthcare program.
According to court documents and statements made in court, ALFONSO was employed as an Advanced Practice Registered Nurse (APRN) at Comprehensive Pain and Headache Treatment Center (CPHTC) located in Derby. As part of her practice, ALFONSO prescribed various controlled substances to clients of the treatment center.
The investigation revealed that ALFONSO was a heavy prescriber of a drug that is used to treat cancer pain. A review of Medicare Part D prescription drug events for prescribers of the drug showed that ALFONSO was responsible for more than $1 million in claims and was the highest prescriber of the drug in Connecticut. Interviews with several of ALFONSO’s patients, who are Medicare Part D beneficiaries and who were prescribed the drug, revealed that most of them did not have cancer, but were taking the drug to treat their chronic pain. Medicare and most private insurers will not pay for the drug unless the patient has an active cancer diagnosis and an explanation that the drug is needed to manage the patient’s cancer pain.
The investigation further revealed that the manufacturer of the drug paid ALFONSO as a speaker for more than 70 dinner programs at a rate of approximately $1,000 per event. In many instances, the dinner programs were only attended by ALFONSO and a sales representative for the drug manufacturer. In other instances, the programs were attended by individuals, including office staff and friends, who did not have licenses to prescribe controlled substances. For the majority of these dinner programs, ALFONSO did not give any kind of presentation about the drug at all.
From January 2013 until March 2015, ALFONSO was paid $83,000 by the drug manufacturer. In pleading guilty, ALFONSO admitted that the money she was paid influenced her prescribing of the drug.
The charge of receipt of kickbacks in relation to a federal healthcare program carries a maximum term of imprisonment of five years and a fine of up to $250,000. Judge Shea scheduled sentencing for September 17, 2015.
U.S. Attorney Daly stated that the investigation is ongoing.
This investigation is being conducted by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation, with the assistance of the Drug Enforcement Administration’s Diversion Squad. The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Richard M. Molot
U.S. Attorney Daly encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force (203) 785-9270 or 1-800-HHS-TIPS.
22 Individuals Charged in Superseding Indictment for Drug Trafficking in the Municipality of CaguasRead the Press Release
SAN JUAN, Puerto Rico – On June 19, 2015, a federal grand jury in the District of Puerto Rico returned a superseding indictment against 22 defendants charged with conspiracy to possess with intent to distribute, and distribution of, controlled substances, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The Federal Bureau of Investigation (FBI) and the Puerto Rico Police Department (PRPD), Caguas Strike Force, are in charge of the investigation.
On August 7, 2013, federal and state authorities arrested 139 individuals from several areas in the municipality of Caguas. These individuals were charged in four separate indictments. Seventy-nine of those charged were part of a drug trafficking organization which operated in the Turabo Heights Public Housing Project. Today, law enforcement authorities executed 22 arrest warrants against the individuals who continued operating the drug points at Turabo Heights, after the arrests in 2013.
The superseding indictment charges 22 individuals for conspiracy to knowingly and intentionally possess with intent to distribute cocaine base (crack), heroin, cocaine, marihuana, Oxycodone (commonly known as Percocet) and Alprazolam (commonly known as Xanax), all within 1,000 feet of the real property comprising the Turabo Heights Public Housing Project, a housing facility owned by a public housing authority, and other areas nearby and within the Municipality of Caguas, Puerto Rico.
During the span of the conspiracy, in order to be able to operate a drug point at Turabo Heights, “rent” would be paid to the leaders of the drug trafficking organization and their family members. As part of the manner and means of the conspiracy, control of the drug points at Turabo Heights was, obtained and maintained by the use of force, violence, and intimidation. The drug points operated twenty-four (24) hours a day in 3 shifts per day, including a “midnight marihuana” shift. Facilitators would act as intermediaries in drug sale transactions when clients opted not to enter the housing project.
The leader of the organization, José A. García-Cosme, aka “Papo Cachete” was arrested in August of 2013 during the first round of arrests involving this organization. During his absence from the Turabo Heights Public Housing Project, García-Cosme maintained control of the drug points through individuals and co-defendants directly designated by him. These individuals managed the daily activities of the drug points, the execution of the main leader’s orders, the collection of payments or “rent” from the different drug point owners, and the safe delivery of those payments or “rent” directly to the leader.
The superseding indictment also alleges that the co-conspirators had many roles in order to further the goals of the conspiracy, including: the leader, José A. García-Cosme, aka “Papo Cachete”; suppliers; enforcers; runners; sellers; and facilitators. Defendants Juan R. Matos-Vázquez, aka “Juan Cabezón;” Israel Arroyo-Serrano, aka “Pacho;” Alfredo Rivera-Flores, aka “Mamita;” and Raymond O. Díaz, aka “Ratón,” are also facing one charge of conspiracy to possess firearms in furtherance of a drug trafficking crime.
The other defendants are: Ramón L. Massa-González, aka “Flaco;” Luz E. García-Cosme, aka “La Vieja;” Gabriel Arroyo-Serrano, aka “Gloty;” Carlos Andrés García-Cintrón, aka “Carlitos;” Luis Montañez-Matos, aka “Tío Baúl;” Ricardo Pastrana-Tollens, aka “Ricky;” Héctor I. Llorens-Ruiz, aka “Cuajo;” Julio Velázquez-Báez, aka “Mueca;” Israel Banks-Jiménez, aka “Cascarita;” Javier Colón-González, aka “Loquillo;” John Martir-Rosado, aka “Al Qaeda;” Xavier Martínez, aka “Manota;” Jessamine Román-Rosa, aka “Katty;” Christian Colón-Agosto, aka “Loco Hugo;” Miguel Benítez-Benítez, aka “Bebeto;” Raynaldo Vázquez-Centeno, aka “Shamu;” and Neftalí Gómez-Dones. The defendants are facing a forfeiture allegation of forty-five million dollars.
Assistant U.S. Attorneys Alberto López-Rocafort and Teresa Zapata-Valladares are in charge of the prosecution of the case. If convicted the defendants face a minimum sentence of 10 years, and up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
The defendants were the targets of a long-term Organized Crime Drug Enforcement Task Force (OCDEFT) investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
22 June 2015
Winnebago Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Deborah R. Gilg announced that Lawrence A. Smith, age 20, of Winnebago, Nebraska, was sentenced for his conviction for failing to register as a sex offender. Chief United States District Court Judge Laurie Smith Camp sentenced Smith to 18 months of imprisonment to be followed by 5 years of supervised release.
Smith is required to register as a sex offender for life as a result of his prior conviction in the District of Nebraska for a sexual assault. Although Smith did register in Sioux City, Iowa, while he was at a halfway house, he failed to register when he left the facility and went to live on the Omaha Indian Reservation.
The case was investigated by the United States Marshal’s Service.
Waycross Man Sentenced to 286 Months for Coercion and Enticement of A MinorRead the Press Release
Waycross, GA – Jacques Donte Taylor, 24, of Waycross, Georgia, was sentenced today to 286 months in prison by Chief United States District Court Judge Lisa Godbey Wood following his plea of guilty to a charge of coercion and enticement of a child under the age of 18 to engage in illegal sexual activity. The prison term will be followed by a 15 year term of supervised release. Taylor will also be required to register as a sex offender upon his release from prison. Taylor pleaded guilty to the offense on December 8, 2014.
Evidence developed during the investigation revealed that Taylor communicated via Facebook with a twelve-year-old minor female. These communications led to the production of child pornography and the eventual coercion and enticement of the minor to engage in sex acts with him on two occasions. Taylor’s co-defendant, Donnel Cornelius Shavers, 23, also of Waycross, was sentenced by Chief Judge Wood on April 20, 2015 to 300 month’s imprisonment to be followed by a life term of supervised release following his pleas of guilty to charges of production of child pornography and coercion and enticement of a child.
United States Attorney Edward Tarver said, “This investigation again demonstrates the commitment of the U.S. Attorney’s Office to aggressively prosecute individuals who are involved in predatory and exploitative acts directed at children. The conduct of these individuals was abusive and exploitative. The victims of their behavior were minors who had their innocence and childhood stolen from them. Clearly, the conduct of these defendants was deplorable. We cannot and will not tolerate these types of offenses. The pattern of predatory behavior shown by both Taylor and Shavers is one of the many disturbing components of their criminal conduct and the lengthy sentence given to each by the Court is completely justified.”
“HSI investigations involving child exploitation fall under Operation Predator, and this case is a clear demonstration of why we use the title of predator for those who seek to victimize the innocent,” said Ryan L. Spradlin, acting special agent in charge of ICE Homeland Security Investigations (HSI) in Atlanta. “The defendants in this case used social media to stalk their prey, entice them to produce child pornography and then coerce them into meeting for the purposes of sexual assault. Law enforcement has identified several victims of this scheme.”
Ware County Sheriff Randy F. Royal said, “I am proud of our investigator who began the initial investigation, which led to Mr. Taylor’s arrest. I am prouder still of the level of support and the spirit of cooperation between our agency and Homeland Security Investigations, which afforded the manpower and resources needed to broaden the scope of the investigation so that all the victims in this case will get the opportunity for justice.”
This prosecution was the result of a joint investigation by the Ware County Sheriff’s Office and Homeland Security Investigations (HSI). This case was brought as part of Project Safe Childhood, which is a nationwide U.S. Department of Justice initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims.
Assistant United States Attorneys Daniel Crumby, Karl Knoche and Joseph Newman prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Washington, D.C. Man Sentenced to 18 Years in Prison for Takoma Park Armed Robbery and Carjacking ShootingsRead the Press Release
Greenbelt, Maryland - U.S. District Judge Deborah K. Chasanow sentenced Tonnie Deonte Floyd, age 23, of Washington, D.C., today to 222 months in prison followed by 5 years of supervised release for robbery, discharging a gun during the robbery and carjacking, in connection with an armored car robbery and a carjacking in which a victim was shot in the head and arm.
The sentenced was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; the members of the FBI Cross Border Task Force - Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Assistant Director in Charge Andrew G. McCabe of the Federal Bureau of Investigation - Washington Field Office; Chief Mark A. Magaw of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Chief Cathy L. Lanier of the Metropolitan Police Department; and by Chief Alan Goldberg of the Takoma Park Police Department.
According to his plea agreement and court documents, on October 26, 2012, Floyd, Anthony Cannon, and Marcellus Freeman, driving a stolen Jeep, followed a Garda Cash Logistics armored transport vehicle to the Cricket store located in the 1300 block of University Boulevard East, Takoma Park, Maryland. A Garda employee went into the store and picked up a bag containing $3,911. As the employee returned to the armored truck, he was confronted by two co-conspirators with guns. The Garda employee dropped the money bag and at least one co-conspirator fired a gun at the employee. The employee shot back. One of the co-conspirators picked up the money bag. The co-conspirators ran back to the stolen Jeep. As the co-conspirators drove away, the employee continued to fire his handgun at the Jeep, striking a tire and the back window. Floyd was wounded in the shoulder during the gunfire.
The co-conspirators left the Jeep in a neighborhood nearby because it had a flat tire as a result of the shooting. They saw a man entering a vehicle, and shot the man in the arm and head, causing permanent and life-threatening bodily injury, then stole his vehicle. They drove the vehicle into the District of Columbia, where they set it on fire.
Marcellus Ramone Freeman, a/k/a Derrick Relando Pitts, age 24, also of Washington, D.C., previously pleaded guilty to robbery, discharging a gun during the robbery and carjacking. Freeman and the government have agreed that if the Court accepts his plea agreement, Freeman will be sentenced to between 241 months and 30 years in prison at his sentencing on July 27, 2015 at 10:00 a.m.
A federal jury convicted Anthony Terrell Cannon, age 26, of Washington, D.C., on September 12, 2014 of conspiracy, robbery, carjacking, two counts of discharging a gun during a crime of violence and interstate transportation of a stolen vehicle. Cannon awaits sentencing.
United States Attorney Rod J. Rosenstein praised the FBI Baltimore and Washington Field Offices, the Prince George’s County and Montgomery County Police Departments, the Metropolitan Police Department and the Takoma Park Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Bryan E. Foreman, who prosecuted the case.
Washington, D.C. Man Sentenced to 10 Years on Federal Importation of Heroin ChargeRead the Press Release
Contact Person: Stacey Haynes (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated that Kenneth Crawford, Jr., age 42, of Washington, D.C. and formerly of Columbia, South Carolina, was sentenced to 120 months imprisonment today in federal court in Columbia, South Carolina, after earlier pleading guilty to importation of 100 grams or more of heroin, in violation of Title 21, United States Code, Sections 952, 960(a)(1), 960(b)(2), and Title 18, United States Code, Section 2. Senior United States District Judge Joseph F. Anderson, Jr., of Columbia imposed the sentence, which will be followed by 8 years of supervised release.
Crawford was one of 10 defendants charged in April 2014, following a series of court-authorized, DEA-monitored wiretaps over several telephones in the Columbia area. The investigation revealed that a group of individuals in the Columbia area were obtaining heroin from various sources outside of South Carolina and then distributing it in the Midlands. Evidence indicated that Crawford was involved in the 2011 and 2012 importation of heroin into the United States from India. Several packages destined for Crawford and containing heroin were intercepted by law enforcement during the investigation. Evidence further showed that the co-defendants later obtained heroin in New York and transported it back to Columbia where it was distributed. The New York heroin suppliers have been charged by the Eastern District of New York for their role in the drug conspiracy. Three of Crawford’s co-defendants have plead guilty to their role in the drug conspiracy here in South Carolina and have been sentenced as follows: Charles Bradley, age 32, of Columbia was sentenced to 57 months imprisonment with 6 years of supervised release to follow; Anthony Glover, age 40, of Columbia was sentenced to 120 months imprisonment with 8 years of supervised release to follow; and Jessany Lyons, age 25, of Far Rockaway, New York, was sentenced to 37 months imprisonment with 3 years of supervised release. Co-defendant Eric Bradley has plead guilty and is currently awaiting sentencing. One co-defendant is awaiting trial and is presumed innocent. Four other co-defendants charged in the indictment remain fugitives.
The case was investigated by the Drug Enforcement Administration’s (DEA) High Intensity Drug Task Force, which is comprised of agents and officers from the DEA, Homeland Security Investigations, United States Secret Service, Columbia Police Department, Richland County Sheriff’s Department, South Carolina State Law Enforcement Division (SLED), Lexington County Sheriff’s Department, Kershaw County Sheriff’s Department, Orangeburg County Sheriff’s Department, and the Fifth Circuit Solicitor’s Office. Assistant United States Attorney Stacey D. Haynes of the Columbia United States Attorney’s Office prosecuted the case.
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Utah Man Pleads Guilty to Fraudulently Concealing and Transferring Assets in BankruptcyRead the Press Release
BOISE – Farrell Larson, 67, of Meadow, Utah, pleaded guilty today in United States District Court to one count of fraudulent transfer and concealment of assets in a bankruptcy, U.S. Attorney Wendy J. Olson announced. Larson was charged by information on June 1, 2015, by the United States Attorney’s Office.
According to the plea agreement, Larson was the President and co-owner of Select Onion and Larson Land Company, LLC, which operated an onion farm and onion processing plant in Ontario, Oregon. Larson Land Company merged with Select Onion and filed Chapter 11 bankruptcy in the District of Idaho in 2012, with Larson signing as debtor. On April 19, 2012, the Honorable Terry L. Myers, Chief Bankruptcy Judge for the District of Idaho, held that Larson could not utilize cash collateral of Larson Land Company or Select Onion. In his plea agreement, Larson admitted that on April 20 and 23, 2012, he caused a total of $56,000 in cash to be withdrawn from Select Onion bank accounts. The cash represented assets obtained by Select Onion after the filing of bankruptcy. The withdraws and subsequent transfer of the money was done without the knowledge or authorization of the bankruptcy court or trustee. In his plea agreement, Larson admitted to knowingly concealing assets from the trustee, his creditors, and the bankruptcy court with the intent to defraud.
A violation of fraudulent transfer and concealment of assets is punishable by a term of imprisonment of up to five years, a term of supervised release of not more than three years, a maximum fine of $250,000, and a special assessment of $100. The Court also may order restitution to the victims of the crime. As part of his plea, Larson agreed to forfeiture of at least $47,000 as proceeds of the charged offense.
Larson's sentencing is scheduled for September 8, 2015, before U.S. District Judge Edward J. Lodge.
The case was investigated by the Special Inspector General for the Troubled Asset Relief Program and the Internal Revenue Service-Criminal Investigation.
Union County, New Jersey, Man Sentenced to 20 Years in Prison for Distributing Images of Child Sexual Abuse over the InternetRead the Press Release
NEWARK, N.J. – A Linden, New Jersey, man was sentenced today to 240 months in prison for emailing multiple videos and pictures of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
John Ellenbacher, 49, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of distributing images of child pornography over the Internet. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Ellenbacher admitted that between Aug. 15, 2012, and Aug. 21, 2012, he distributed 90 images and six videos depicting child sexual abuse to others via email. During his plea hearing, Ellenbacher also admitted to possessing more than 600 images and videos of child pornography on computer devices seized by federal law enforcement agents when they executed a search warrant at his home on March 20, 2013.
In addition to the prison term, Judge Hayden sentenced Ellenbacher to lifetime supervised release. As part of his guilty plea, Ellenbacher agreed to forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge John P. Woods, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Candace Hom Esq., Assistant Federal Public Defender, Newark
Two Plead Guilty to Debt Elimination SchemeRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Jeffrey Scott Green, age 53, and Lisa Flaugher-Green, age 52, both of Easley, pled guilty today in federal court in Greenville, to a conspiracy to defraud, a violation of Title 18, United States Code, Section 1349. Senior United States District Judge Henry M. Herlong, Jr., of Greenville accepted the pleas and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that this was an Electronic Funds Transfer (“EFT”) debt elimination case. Various branches of the Sovereign Citizen movement, which denies the jurisdiction and authority of the federal government, teach that they can discharge debts by presenting a check written off a closed account. The debtor writes on the check “EFT Only for discharge of debt.” On the back he writes “authorized representative without recourse.” Sovereign-Citizen groups falsely teach that if the creditor accepts the instrument then the debt is discharged even though no money ever changes hands. The Defendants were part of a group that endorsed the use of EFT instruments.
It was a part of the scheme and artifice to defraud that Jeffrey Scott Green and Lisa Flaugher-Green wrote checks on closed accounts and noted on the checks “EFT only for discharge of debt.” They then would mail these bogus “EFT instruments” and accompanying documents to creditors in an effort to trick the creditors into issuing documents noting that the debt was paid in full. Once the creditor discovered the scam, Defendants would refuse further payment on the grounds of a discharge procured by “EFT instruments.” Agents estimate that the Defendants attempted to eliminate over half a million dollars in debt using the scheme.
Mr. Nettles stated the maximum penalty the Defendants can receive is a fine of $250,000 and/or imprisonment for 20 years, plus a special assessment of $100.
The case was investigated by agents of the Federal Bureau of Investigation, the Spartanburg County Sheriff’s Office, and the Greenville County Sheriff’s Office. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
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Two Miami Men Sentenced for Armed & Violent Carjacking of IRS EmployeeRead the Press Release
Two Miami men were sentenced today for an armed and violent carjacking in Miami of an Internal Revenue Service (IRS) employee.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Melissa Chedotal, Special Agent in Charge, Treasury Inspector General for Tax Administration (TIGTA), Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Rene Landa, Chief, South Miami Police Department, J.D. Patterson, Director, Miami-Dade Police Department (MDPD), Rodolfo Llanes, Chief, City of Miami Police Department (MPD), and Daniel Oates, Miami Beach Police Department, made the announcement that Ernest Bernard Hammett, 22, and Carl Lee Williams, 23, both of Miami, were sentenced for committing an armed, violent carjacking and brandishing a firearm during a crime of violence, in violation of Title 18, United States Code, Sections 2119(1) and 924(c)(1)(A)(i)-(ii).
Hammett was sentenced to a term of 25 years’ imprisonment. Williams was sentenced to 15 years’ imprisonment. After release from imprisonment, Hammett will serve a term of 10 years of supervised release and Williams will serve a term of 5 years of supervised release. Both the defendants were also ordered to pay $35,023.25 in restitution.
According to statements made and documents filed in court, Hammett and Williams attacked the victim, an IRS employee, at a parking garage in South Miami on May 29, 2014. They forcibly took the victim’s property, including jewelry, a laptop computer, credit and debit cards and the victim’s vehicle. During the course of the carjacking, Hammett and Williams physically restrained, punched and choked the victim. The defendants also brandished and utilized a .40 caliber handgun to repeatedly strike the victim, causing the victim to suffer serious bodily injury. When another vehicle arrived in the garage, the victim escaped and notified security at the parking garage. Hammett and Williams then fled in the victim’s vehicle, which law enforcement promptly tracked to the Brownsville neighborhood of Miami. Hammett and Williams were arrested after attempting to flee on foot and toss the .40 caliber handgun. In addition to possessing some of the victim’s stolen property, the defendants were further identified through DNA evidence.
Mr. Ferrer commended the investigative efforts of members of the Violence Reduction Partnership, including TIGTA, ATF, FBI, South Miami Police Department, MDPD, MPD, and Miami Beach Police Department. This case is being prosecuted by Assistant U.S. Attorney’s Sean T. McLaughlin and Anita White.
Through its Violence Reduction Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in various neighborhoods in the Southern District of Florida, while simultaneously working with community leaders and concerned citizens to mentor at-risk youth, provide job training, coordinate social services and support the reintegration of ex-offenders (returning citizens) to the community.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Colombian Nationals Sentenced for Conspiring to Import Cocaine into the United StatesRead the Press Release
Involved in the production and shipment of hundreds of kilograms of cocaine
NORFOLK, Va. – Hermes Andrade Quintero, 45, of Medellin, Colombia, was sentenced today to 164 months in prison, followed by five years of supervised release, for conspiracy to manufacture and distribute cocaine for the purpose of importation into the United States. His co-conspirator Osvaldo Jose Lopez Herrera, 37, of Ayapel Cordoba, Colombia, was sentenced to a term of 156 months, followed by five years of supervised release, for the same charge.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s (DEA) Washington Office; and John S. Adams, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.
Andrade Quintero and Lopez Herrera pleaded guilty on March 12 and 23, 2015, respectively, to conspiracy to manufacture and distribute cocaine for the purpose of importation into the United States. According to court documents, both men are associates of the Bacrim Los Urabeños, and admitted to their roles in the production of large quantities of cocaine in Colombia, and the subsequent transport of the cocaine to other members of the conspiracy for the eventual importation into the United States. Within the conspiracy, Andrade Quintero was responsible for constructing and operating a cocaine laboratory, transporting loads of cocaine, finding sellers of cocaine to fill orders, and coordinating payment for various loads of narcotics. Over the course of his two-year involvement in the conspiracy, he was attributed with the production and distribution of nearly 900 kilograms of cocaine. Lopez Herrera’s role was that of a courier, transporting several hundred kilograms of cocaine at a time to the Colombian coast, where additional co-conspirators exported it to the United States and elsewhere. All told, during the four years he worked with the conspiracy, Lopez Herrera was involved in the transportation of 2,300 kilograms of cocaine.
This case was investigated by the Norfolk Resident Office and Bogota, Colombia Country Office of the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Colombian National Police. Assistant U.S. Attorneys V. Kathleen Dougherty and Kevin M. Comstock are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:13cr122.
Twenty Sentenced in Drug Trafficking ConspiracyRead the Press Release
COLUMBUS, Ohio – Twenty people indicted in December 2013 have been sentenced in U.S. District Court as of today for participating in a drug trafficking organization in Central Ohio.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Franklin County Sheriff Zach Scott and Columbus Police Chief Kim Jacobs announced the sentences.
The sentences are a result of a year-long investigation into the organization by local, state and federal law enforcement.
The organization was responsible for distributing cocaine, oxycodone, crack cocaine and marijuana in the central Ohio area. Some members of the organization, including some convicted felons, possessed firearms in furtherance of the drug trafficking activities. The group supplied drug distributors with firearms to protect the distributors, the drug supply and proceeds from potential robberies. Firearms were placed in strategic places in various locations to intimidate potential robbers.
According to court documents, members of the group would torture and threaten individuals with serious physical harm who were perceived as owing money or drugs to members of – or individuals who were seen as potential witnesses against – the drug conspiracy.
Some of the defendants would launder their drug trafficking proceeds by exchanging tens of thousands of dollars for casino chips at Hollywood Casino in Columbus.
Jermonte M. Fletcher was also indicted on drug, firearm and money laundering charges in connection with the group. He was fatally injured during a shootout with law enforcement agents in Columbus on January 27, 2015. Fletcher had been facing a statutory mandatory minimum of 115 years in prison.
U.S. Attorney Stewart acknowledged the cooperative investigation by the FBI, Columbus Police, Franklin County Sheriff, DEA, ATF, the Ohio Casino Control Commission, and Franklin County Prosecutor Ron O’Brien’s Office, as well as Assistant U.S. Attorneys David DeVillers and Kevin Kelley, and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who prosecuted the case.
Three men sentenced on child pornography casesRead the Press Release
INDIANAPOLIS-United States Attorney Josh Minkler announced today the sentencing of three men for child pornography stemming from cases in the Southern District of Indiana.
John D. Gries, 48, Bayshore, New York,
James McCullars, 56, Huntsville, Alabama,
Brian K Chandler 36, Kokomo, Indiana
McCullars was sentenced to life in prison, must pay a $50,000 fine to the victims and had his house forfeited; Gries was sentenced to 30 years, both by U.S. District Court Judge Sarah Evans Barker. Chandler was sentenced to 45 years in federal prison by U. S. District Judge William T. Lawrence.
“These three men have made a career out of sexually abusing and exploiting children,” said Minkler. “The consequence for Mr. McCullars is that he will never get out of prison alive and never again exploit children again. If Mr. Gries and Mr. Chandler survive their prison sentences, they will hopefully be too old to exploit children.”
According to evidence presented at trial, Gries and McCullars operated their conspiracy for over 11 years from 2000 to 2012, without being detected by law enforcement. They operated various members-only online chat rooms dedicated to the advertisement, distribution, receipt and possession of child pornography. The trial evidence, as well as admissions by other defendants prosecuted in connection with “Operation Rounder,” showed that McCullars, Gries and other members of the conspiracy used these chat rooms and a number of online servers to expand their personal collections of materials depicting the exploitation of children, and sought to evade law enforcement through the use of sophisticated data encryption software.
Operation Rounder has rescued nearly 100 children around the world who have been identified as victims of abuse. Other defendants who have been convicted in connection with this investigation include:
John Edwards, 62, of Indianapolis, sentenced to 17.5 years;
Thomas Vaughn, 45, of Anderson, Indiana, sentenced to 11 years;
John Rex Powell, 43, of Fort Myers, Florida, sentenced to 30 years;
Donald Printup, 36, of Niagara Falls, New York, sentenced to 14 years;
Michael Fredette, 46, of Waterford, New York, sentenced to 27 years;
Robert Guillen, 43, of Wesley Chapel, Florida, sentenced to 14 years;
David Bebetu, 51, of Agoura Hills, California, sentenced to 12.5 years;
Stephen Harvey Dault, 48, of McKinney, Texas, sentenced to 17 years; and
Rick Ricardo Leon, 53, of Arlington, Virginia, sentenced to 12.5 years.
This case was investigated by the U.S. Postal Inspection Service, Indiana State Police with assistance from the Indiana Internet Crimes Against Children Task Force and the Department of Justice’s High Technology Investigative Unit, as a part of Project Safe Childhood. This case was prosecuted by Trial Attorney Amy Larson of the Criminal Division’s Child Exploitation and Obscenity Section and Senior Litigation Counsel Steven D. DeBrota of the Southern District of Indiana.
In an unrelated case, Brian K. Chandler was convicted of five counts of sexual exploitation of a minor, five counts of distribution of child pornography and registered sex offender charges.
Between July 20, 2013, and August 2, 2013, Chandler enticed a minor boy which he had occasional custody of, to engage in sexually explicit conduct, then recorded that activity on his cell phone for later distribution. Chandler produced seven videos of the molestation, and was required to register as a sex offender during the period of his criminal activity.
It was also determined through forensic technology that Chandler possessed hundreds of other pornographic images and distributed them to others in his network to view. Chandler was convicted of possession of child pornography in Howard County Circuit Court in 2004 and 2011. He was required to register as a sex offender from his convictions and did not.
The Chandler case was investigated by the Federal Bureau of Investigation, Indiana State Police and the Kokomo Police Department. It was prosecuted by Assistant United States Attorney Tiffany J. McCormick.
Led by U.S. Attorneys’ 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 exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Summer camps and the Americans with Disabilities ActRead the Press Release
Indianapolis –As summer is officially upon us, United States Attorney Josh J. Minkler wants to remind camp organizers and parents that all children are welcome to attend camps, especially those with disabilities. The U.S. Attorney’s Office is circulating a flyer to hundreds of summer camps located within the Southern District of Indiana reminding them of their obligations under the Americans with Disabilities Act (“ADA”).
Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities. This generally means that children with disabilities are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis, and that camps must train their staff in the requirements of the ADA. Camps are obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.
“Summer camps present tremendous growth opportunities for children to learn independence, try new activities and gain self-confidence,” Minkler said. “The law requires camps to provide equal opportunities to disabled children whose needs can be reasonably accommodated.”
Additional information about the ADA is available at www.ada.gov, the ADA Information Line at (800) 514-0301 (Voice) and (800) 514-0383 (TTY) or by contacting the U.S. Attorney’s Office at (317) 226-6333, Toll-Free (888) 368-5067, TTY (317) 226-5438 or via e-mail at [email protected].
Statements of Head of the Civil Rights Division Vanita Gupta and U.S. Attorney Preet Bharara of the Southern District of New York on the Agreement in Principle Regarding Rikers IslandRead the Press Release
Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today in connection with the agreement in principle in Nunez v. City of New York embodied in the attached letter filed today with the court:
“The Civil Rights Division is committed to transformative reform at Rikers Island. We are deeply encouraged by this agreement in principle. We are also grateful to have worked with the U.S. Attorney’s Office in this landmark civil rights case, a model for corrections reform throughout the country.”
U.S. Attorney Preet Bharara of the Southern District of New York issued the following statement in connection with the agreement in principle among the parties in Nunez v. City of New York:
“I have repeatedly made clear our unwavering commitment to enduring and enforceable reform at Rikers Island. Today, we have reached a groundbreaking agreement in principle with city officials, subject to ultimate approval by the court. This comprehensive framework requires the city to implement sweeping operational changes to fix a broken system and dismantle a decades-long culture of violence. Its ongoing implementation will be overseen by the court and an independent federal monitor. Federal prosecutors will remain vigilant to ensure that the Constitution protects each and every person within the walls of Rikers Island.”
Statements of Manhattan U.S. Attorney Preet Bharara and Head of the Civil Rights Division Vanita Gupta on Agreement in Principle Regarding Rikers IslandRead the Press Release
Manhattan U.S. Attorney Preet Bharara issued the following statement today in connection with the agreement in principle among the parties in Nunez v. City of New York embodied in the attached letter filed today with the court:
“I have repeatedly made clear our unwavering commitment to enduring and enforceable reform at Rikers Island. Today, we have reached a groundbreaking agreement in principle with City officials, subject to ultimate approval by the Court. This comprehensive framework requires the City to implement sweeping operational changes to fix a broken system and dismantle a decades-long culture of violence. Its ongoing implementation will be overseen by the Court and an independent federal monitor. Federal prosecutors will remain vigilant to ensure that the Constitution protects each and every person within the walls of Rikers Island.”
Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today:
“The Civil Rights Division is committed to transformative reform at Rikers Island. We are deeply encouraged by this agreement in principle. We are also grateful to have worked with the U.S. Attorney’s Office on this landmark civil rights case, a model for corrections reform throughout the country.”
Stamford Man Sentenced to 4 Years in Prison for Illegal Gun Possession, Violating Supervised ReleaseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on June 19, 2015, FRANK GREEN, SR., 50, of Stamford, was sentenced by U.S. District Judge Robert N. Chatigny in Hartford to 48 months of imprisonment, followed by three years of supervised release, for being a felon in possession of a firearm, and for violating the terms and conditions of his supervised release from a prior federal conviction. GREEN pleaded guilty on March 24, 2015.
According to court documents and statements made in court, in August and September 2013, Stamford Police made two controlled purchases of purported cocaine from GREEN in the vicinity of a home on Amelia Place where GREEN had been residing. On October 4, 2013, police executed a search warrant at the home and seized from GREEN’s bedroom three small baggies of cocaine, a scale, packaging material, a cutting agent and a loaded .38 caliber revolver.
GREEN’s criminal history includes several state felony convictions and a federal narcotics felony conviction. In June 2011, GREEN was sentenced by Judge Chatigny to 39 months of imprisonment, followed by three years of supervised release, for his role in a cocaine distribution conspiracy. He was released from federal prison in April 2013.
On Friday, Judge Chatigny sentenced GREEN to 37 months of imprisonment for illegally possessing the firearm and a consecutive 11-month prison term for the supervised release violation.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Stamford Police Department. This case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
Second Oklahoma City Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that JONATHAN MIRANDA, age 19, of Oklahoma City, Oklahoma, pled guilty to Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration. The defendant was indicted in April, 2015.
The Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendant, did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered a presentence report to be completed. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Shannon Henson represented the United States.
Rochester Restauranteur Sentenced for Tax EvasionRead 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 Konstantinos Votsis, 64, of Rochester, NY, who was convicted of tax evasion, was sentenced to six months home confinement by Chief U.S. District Judge Frank P. Gerace. The defendant was also ordered to complete 100 hours of community service at the Open Door Mission. Votsis must also pay restitution of approximately $308,000 and forfeit $250,000.Assistant U.S. Attorney John J. Field, who handled the matter, stated that Votsis owned and controlled Rookies Neighborhood Sports Bar, a restaurant and bar in Gates, NY In 2009, the defendant learned of a pending audit of his sales taxes, and in response, directed that sales data contained in Rookies’ point-of-sale computer system be deleted. This data, which was later recovered by the Government, showed that Votsis failed to report $986,660 in income from his Rookies business from 2006 through 2008. By concealing such income, the defendant evaded paying $308,062 in taxes that he owed to the Internal Revenue Service.
The sentencing is the culmination of an investigation by Special Agents of the Internal Revenue Service-Criminal Investigation, under the direction of Shantelle P. Kitchen, Special Agent in Charge.
Ritchie County woman convicted of health care fraudRead the Press Release
CLARKSBURG, WEST VIRGINIA – Sherri J. Slaven, 50, of Ellenboro, West Virginia, was convicted of health care fraud today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Slaven operated a home health care business and she engaged in a scheme to defraud the West Virginia Offices of the Insurance Commission Workers’ Compensation Old Fund by repeatedly submitting claims for various health care services that she never performed. She received fraudulent compensation in excess of $100,000 for services that were not provided.
Slaven pled guilty today to one count of "Health Care Fraud." She faces up to 10 years in prison and a fine of up to $250,000. 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.
"Health care fraud wastes taxpayer money and drives up health care costs," said Ihlenfeld. "The U.S. Attorney’s Office is now taking more of a data-driven approach to investigating and prosecuting this type of crime by obtaining and analyzing billing data in real-time. This allows us to speed up our investigations and stop these schemes sooner, thereby protecting the programs that help the sick and the injured."
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The West Virginia Office of the Insurance Commission Office of Inspector General – Fraud Investigations Unit let the inquiry.
U.S. Magistrate Judge John S. Kaull presided.
RICO Conspiracy Charged in Payday Lending CaseRead the Press Release
PHILADELPHIA - Adrian Rubin, 58, of Jenkintown, PA, has been charged with participation in a racketeering conspiracy for the operation of a “payday lending” business that allegedly violated the usury laws of Pennsylvania and other states, announced United States Attorney Zane David Memeger. Rubin is charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), one count of conspiracy to commit mail fraud and wire fraud, and two counts of mail fraud and aiding and abetting mail fraud. It was investigated by the FBI, the United States Postal Inspection Service, and IRS Criminal Investigations.
According to the information unsealed today, between 1998 and 2012, Rubin owned, controlled, financed, and/or worked for multiple businesses that issued short-term loans, commonly known as “payday loans.” Rubin allegedly conspired with other people to evade state usury laws and other restrictions on payday loans by engaging in a series of deceptive business practices that included: (a) paying a federally-insured bank, which was not subject to state laws, to pretend that it was the payday lender; (b) relocating his operations to a state considered “usury friendly;” and (c) paying an Indian tribe to pretend that it was the actual payday lender as part of a scheme to have the tribe claim that “sovereign immunity” prevent application of state usury laws and other regulations.
Rubin and his co-conspirators also allegedly went to great lengths to hide Rubin’s personal involvement in the payday lending business because he had a criminal record. It is further alleged that Rubin, with the knowledge of his co-conspirators, incorporated his payday businesses in the names of his father-in-law and a family friend and then forged the signatures of those people on company documents. In total, it is alleged that Rubin and his co-conspirators reaped tens of millions of dollars from the defendant’s payday lending activities, much of which stemmed from the collection of fees that were usurious in Pennsylvania and elsewhere.
Pennsylvania law makes it a crime to collect interest, fees, and other charges associated with a loan at a rate in excess of 36 percent per year. Payday loans are short-term loans of relatively small amounts of money, usually a few hundred dollars, which borrowers promise to repay out of their next paycheck or regular income payment, such as a social security check. Some loans have finance charges or fees of between 10 and 30 percent of the amount borrowed. Given the short-term nature of these loans, those charges can translate to annual percentage rates of interest (“APR”s) of 260 to 780 percent.
Rubin also was charged with helping his two sons with their own multi-million-dollar telemarketing scam that duped more than 70,000 people into buying a credit card http:/www.justice.gov/usao-edpa/pr/trio-charged-selling-worthless-credit-cards. The Platinum Trust card was falsely marketed as a general-purpose credit card that customers could use to buy merchandise over the Internet and improve their credit. Blake and Chase Rubin pleaded guilty and are awaiting sentencing.
If convicted of all charges, Adrian Rubin faces a possible advisory sentencing guideline range of at least 10 years in prison with a statutory maximum sentence of 65 years in prison, three years of supervised release, a fine of up to $1 million, and a $400 special assessment.
The case is being prosecuted by Assistant United States Attorneys Mark B. Dubnoff and Joel M. Sweet.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Professional Hockey Player Pleads Guilty for Role in Gambling RingRead 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 Nathan Paetsch, 28, of Spencerport, NY, pleaded guilty before U.S. District Judge Frank P. Geraci, Jr. to transmission of wagering information and structuring transactions to evade reporting requirements. The charges carry a maximum penalty of seven years in prison, a fine of $750,000 or both.Under the terms of the plea agreement, Paetsch will be sentenced to probation, eight months home confinement, and. 400 hours of community service. The defendant will also forfeit $265,000 to include $22,725 in lieu of a 2011 BMW X5, $76,941 in lieu of his interest in his residence at 25 King Fisher Drive, Spencerport, and $67,197 in lieu of his interest in a residence at 218 Palmetto Dunes Circle, Naples, Florida.
Assistant U.S. Attorney Robert A. Marangola, who is handling the case, stated that Paetsch’s conviction is related to his involvement in an illegal gambling business with Joseph Ruff, 32, his brother Mark Ruff, 40, both of Connecticut and Paul Borrelli, 66, of Rochester. The gambling operation involved sports betting through multiple offshore internet gambling websites.
Specifically, Paetsch used wire communication facilities, including cellular telephones, to transmit in interstate and foreign commerce, bets, wagers and information which assisted in the placing of bets and wagers with the illegal internet gambling business on sporting events and contests. The defendant’s involvement included transmitting information over cellular telephones to assist professional hockey players and others he recruited to place bets. Paetsch’s transmissions entitled him to receive money or credit as a result of bets and wagers. The information transmitted by the defendant crossed state lines as well as the international boundary of the United States. The information provided by Paetsch included usernames and passwords to accounts for bettors to place internet wagers, odds on sporting events, credit limits and balances of bettors, making arrangements for the collection of cash payments from bettors in Canada, New York, New Jersey, Pennsylvania, and Florida, and bank account information to conceal payments for gambling debts owed from wagers placed with the illegal gambling business.
With respect to the structuring charges, on multiple occasions between January 2010 and June 24, 2014, Paetsch withdrew and deposited transactions from accounts at financial institutions, including but not limited to First Niagara Bank, in amounts less than $10,000. The defendant was aware that as a domestic financial institution, banks are obligated by law to report transactions in excess of $10,000. At the time that he made the transfers, Paetsch intended to evade the reporting requirements because he knew the funds involved proceeds of the illegal internet gambling business.
Mark Ruff and joseph Ruff were convicted and sentenced to nine years and 41 months in prison respectively. Paul Borrelli was also convicted and is awaiting sentencing on September 8, 2015 at 3:00 pm before Judge Geraci.
The plea is the culmination of an investigation conducted by the Organized Crime Drug Enforcement Task Force, which includes the Federal Bureau of Investigation, Internal Revenue Service, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, Rochester Police Department, under the direction of Chief Michael Ciminelli, Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, Greece Police Department, under the direction of Chief Patrick Phelan, the Webster Police Department, under the direction of Acting Chief Joseph Rieger, and Monroe County District Attorney’s Office, under the direction of District Attorney Sandra Doorley.
Sentencing for Paetsch is scheduled for August 31, 2015 at 4:00 pm before Judge Geraci.
Port Orange Man Pleads Guilty to Scheme to Defraud Oil Spill Compensation FundRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Robert Lee Craddock (54, Port Orange) pleaded guilty today to wire fraud arising out of a scheme to defraud the compensation fund established as a result of the Deepwater Horizon oil spill in 2010. He faces a maximum penalty of 20 years in federal prison. As part of the plea agreement, Craddock will forfeit the proceeds of the charged criminal conduct as a money judgment in the amount of $117,700. A sentencing date has not yet been set.
According to the plea agreement, following the April 2010 explosion of the Deepwater Horizon oil rig (which was being leased by BP, formerly known as British Petroleum), Craddock submitted a claim to BP and the Gulf Coast Claims Facility (“GCCF”), an independent facility established by BP to compensate qualified claimants for lost earnings purportedly related to the impact of the oil spill on his businesses. As part of the scheme, Craddock crafted fictitious invoices to support the amount of lost earnings that he claimed. The fraudulent scheme resulted in BP and GCCF transmitting $117,700 to Craddock.
This case was investigated by the United States Secret Service. It is being prosecuted by Assistant United States Attorney Embry J. Kidd.
Pilger Man Sentenced for Bankruptcy FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that Jeffrey L. Eckert, age 55, of Pilger, Nebraska, was sentenced for his conviction for making a false oath in a bankruptcy proceeding. Chief United States District Court Judge Laurie Smith Camp sentenced Eckert to 5 years of probation and ordered him to pay restitution in the amount of $50,142.66. Eckert was also ordered to perform 100 hours of community service during the first two years of his term of probation.
Eckert filed a Chapter 13 bankruptcy petition in the District of Nebraska, but his case was later converted to a Chapter 7. At the time of the initial Chapter 13 bankruptcy filing, Wells Fargo Bank was a creditor which was fully secured by assets owned by Eckert. However, after the case was converted to a Chapter 7 bankruptcy, Wells Fargo Bank learned that some of its collateral had been sold or otherwise disposed of by Eckert. When he was questioned under oath at the first meeting of creditors in the Chapter 7 bankruptcy case, Eckert made false statements about the manner in which he disposed of the bank’s collateral.
This case was investigated by the U.S. Secret Service.
Peter Foy Pleads Guilty to Bankruptcy FraudRead the Press Release
The United States Attorney for the District of Vermont announced that Peter Foy, 61, of Alburg, pleaded guilty today in United States District Court in Burlington to a charge that he concealed assets in his bankruptcy case. U.S. District Judge William K. Sessions III released Foy on conditions pending sentencing, which is set for October 13.
On June 9, 2015, the United States filed a one-count information charging Foy with bankruptcy fraud. According to the charging document, in November 2014, Foy filed a chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Vermont. The petition sought to discharge all of Foy's unsecured debts. In his petition and accompanying schedules, which Foy swore were complete and accurate, Foy was required to disclose all his assets and liabilities, including any real estate he owned. Foy did disclose the home he owned in Vermont, but not a second house he owned in Quebec, Canada. Foy had acquired sole title to that five-bedroom lakefront property in 2007. Before filing for bankruptcy, Foy had listed the Quebec house for sale at a price of nearly $340,000 (Canadian). Foy also failed to disclose to the Bankruptcy Court that the Canadian property had reportedly generated rental income of $22,500 in 2013 and $20,300 in 2014.
Foy faces up to five years of imprisonment and a fine of up to $250,000. His actual sentence will be determined with reference to federal sentencing guidelines.
This case was investigated by the Federal Bureau of Investigation.
Foy is represented by Norman Blais. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Omaha Man Sentenced to 15 years in Prison for Conspiring to Distribute Methamphetamine while in Possession of a FirearmRead the Press Release
United States Attorney Deborah R. Gilg announced that Thomas Perez, 32, of Omaha, Nebraska, was sentenced on June 22, 2015, to 15 years in prison by United States District Judge Laurie Smith Camp. Perez had previously pled guilty to Conspiracy to Distribute more than 50 grams of Methamphetamine and Possessing a Firearm in Relation to a Drug Trafficking Crime. Perez was arrested and indicted on the charges after Omaha police officers twice executed search warrants on the same South Omaha residence in April of 2014. In total, officers seized more than three ounces of methamphetamine, three handguns, over $4,000 in currency, and drug paraphernalia.
Because Perez possessed more than 50 grams of actual methamphetamine along with a firearm, he faced a mandatory minimum sentence of 15 years. After serving his sentence Perez will be required to serve a Term of Supervised Release of 5years.
This case was the result of an investigation by the Omaha Police Department and Sarpy County Sheriff’s Office.
Oklahoma City Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that GILBERT ESPINOZA a/k/a "Snow", age 32, of Oklahoma City, Oklahoma, pled guilty to Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(l) and 841(b)(1)(A).
The charge is a result of an investigation by the Drug Enforcement Administration. The defendant was indicted in April, 2015.
The Indictment alleged that beginning in or about July 2014, the exact date being unknown to the Grand Jury, and continuing until on or about the date of the Indictment, within the Eastern District of Oklahoma and elsewhere, the defendant, did knowingly and intentionally conspire, confederate and agree together and with others, known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered a presentence report to be completed. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Shannon Henson represented the United States.
Ohio, West Virginia residents charged with deriving unlawful profits from federal grantsRead the Press Release
WHEELING, WEST VIRGINIA – A federal grand jury has returned an indictment charging Michael J. Marshall, 64, Brandt Stover, 61, Stephen M. Powell, 52, all of Steubenville, Ohio, and Nicole P. Northcraft, 42, of New Cumberland, West Virginia, with manipulating business development programs facilitated by the United States Small Business Administration to derive unlawful profits of approximately twenty-four million dollars, United States Attorney William J. Ihlenfeld, II, announced.The defendants operated various businesses participating in Small Business Administration programs and are alleged to have submitted false eligibility statements and allowed unauthorized individuals to exercise control over the businesses. In total, the defendants are alleged to have fraudulently sought and received federal agency contracts in excess of one hundred and forty million dollars.
The defendants are each charged with:
• One count of “Conspiracy to Defraud the United States,” for which they each face up to five years in prison and a fine of up to $250,000, • One count of “Attempt and Conspiracy to Commit Wire Fraud.” For which they each face up to 20 years in prison and a fine of up to $250,000, and
• Three counts of “Wire Fraud.” They each face up to 20 years in prison and a fine of up to $250,000 on each count.Stover is additionally charged with:
• Two counts of “Conspiracy to Defraud the Government with Respect to Claims.” He faces up to 10 years in prison and a fine of up to $250,000 on each count, • Four counts of “Willfully Causing the Submission of False, Fictitious and Fraudulent Claims.” He faces up to five years in prison and a fine of up to $250,000 on each count, and
• One count “Tampering with a Witness,” for which he faces up to 20 years in prison and a fine of up to $250,000.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.
According to Ihlenfeld, the Small Business Administration operates programs to assist socially or economically disadvantaged business operators and disabled veterans in competing for government contracts. The businesses must be unconditionally owned and controlled by the qualifying individuals in order to comply with federal law.
"This indictment alleges that the defendants conspired to exploit the Small Business Administration's 8(a) program regulations to defraud the Department of Defense (DoD) and other federal agencies," said Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Northeast Field Office. "Through these schemes, the defendants allegedly took U.S. taxpayer dollars from the 8(a) contracts intended to support the U.S. military. These acts erode public confidence and deny opportunities for honest contractors. The American taxpayer expects the DoD Office of the Inspector General and DCIS to champion fiscal accountability and acquisition integrity. DCIS, along with our law enforcement partners, continues to shield America's investment in national defense and to vigorously investigate procurement fraud allegations."
“Our office will continue to pursue justice against those who commit fraud to gain access to SBA’s preferential contracting programs,” said Small Business Administration Inspector General Peggy E. Gustafson. “The defendants’ actions deprived legitimate disadvantaged companies of federal contracting opportunities. I want to thank the U.S. Attorney’s office for its dedication and leadership throughout the investigation.”
Assistant U.S. Attorneys Robert H. McWilliams and Andrew Cogar are prosecuting the case on behalf of the government. The United States Small Business Administration, the Department of Defense Inspector General, the Department of Veterans Affairs, the Department of Labor, and the Federal Bureau of Investigation are leading the inquiry.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Office of Juvenile Justice and Delinquency Prevention’s Internet Crimes Against Children Task Forces Arrest More Than 1,000 Child Predators in Operation Broken HeartRead the Press Release
Internet Crimes Against Children (ICAC) Task Forces arrested 1,140 child predators from 41 states during a two-month, nationwide operation, the Office of Juvenile Justice and Delinquency Prevention (OJJDP) announced today.
The 61 ICAC Task Forces, funded through an OJJDP grant program, conducted Operation Broken Heart, a coordinated investigative operation to intensify efforts to identify and arrest child sexual predators during the months of April and May 2015.
“Predators use technology in sinister and inventive ways to reach their child victims across state and national boundaries,” said Administrator Robert L. Listenbee of the OJJDP. “Through collaborative efforts such as Operation Broken Heart, ICAC Task Forces and their law enforcement partners are countering these attacks by pooling resources and investigative expertise, increasing their ability to identify and arrest sexual predators and protect children.”
More than 3,000 federal, state and local law enforcement agencies participated in the operation, which targeted offenders who: possess, manufacture and distribute child pornography; engage in online enticement of children for sexual purposes; engage in the commercial sexual exploitation or prostitution of children; and engage in child sex tourism – traveling abroad for the purpose of sexually abusing children in other countries. ICAC Task Forces first conducted Operation Broken Heart in 2014. The task forces also delivered more than 2,200 presentations on Internet safety to more than 186,000 youth and adults during these two months.
“By arresting and prosecuting child predators across the country, our task forces are sending a clear message that we are working together better than ever before to bring these perpetrators to justice,” said Lt. Andrea Grossman of the Los Angeles Police Department, Commander of the Los Angeles Regional ICAC Task Force and chair of the ICAC Public Awareness and Outreach Committee. “The ICAC Task Forces’ dedicated efforts and professionalism help fulfill the ultimate goal of keeping children safe.”
In 1998, OJJDP launched the ICAC Task Force Program to help federal, state and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communication systems or computer technology to exploit children. To date, the ICAC Task Forces have reviewed more than 516,000 complaints of child exploitation, which resulted in the arrest of more than 54,000 individuals. In addition, since the ICAC program's inception, more than 465,000 law enforcement officers, prosecutors and other professionals have been trained on techniques to investigate and prosecute ICAC related cases.
For more information on local cases, the list of ICAC Task Force Commanders is available at: www.icactaskforce.org.
OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance, the Bureau of Justice Statistics, the National Institute of Justice, OJJDP, the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at www.ojp.gov.
North Miami Beach Resident Sentenced to 4 Years in Prison for Committing State Income Tax Fraud Using Stolen IdentitiesRead the Press Release
A North Miami Beach resident was sentenced to 48 months in prison, followed by three years of supervised release, and was ordered to pay restitution of $110,325, for his involvement in a conspiracy to commit state income tax fraud using stolen identities.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations Miami Office (DOL-OIG), Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), J. Scott Dennis, Chief, North Miami Beach Police Department (NMBPD), and the Ohio Department of Taxation – Criminal Investigations Division, made the announcement.
Earnest Thad Etienne, 29, previously pled guilty to one count of conspiracy to use unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court records, on September 26, 2014, law enforcement executed a state search warrant at Etienne’s residence pursuant to another investigation. During the search, law enforcement officers discovered fifteen prepaid debit cards embossed with various individuals’ names, a thumb drive, ammunition, and $7,750 in cash in Etienne’s bedroom. In another room in the residence, law enforcement discovered additional electronic devices and a bank debit card embossed with the name of an individual who did not appear to live in the residence. Several firearms and additional ammunition were found in the backyard of the home.
Subsequent investigation by federal law enforcement revealed that the thumb drive discovered in Etienne’s room contained the personal identifying information (PII) – including names, dates of birth, and social security numbers – of many individuals with addresses in Ohio. In addition, Etienne used at least one of the debit cards found in his residence to withdraw money associated with fraudulent state of Ohio income tax refunds.
Court documents further state that between January 14, 2014, and September 26, 2014, Etienne and his co-conspirators caused fraudulent income tax returns to be filed in the State of Ohio seeking tax refunds in amounts ranging between $7,543 and $11,515. The conspirators caused the State of Ohio to pay the fraudulent tax refunds to pre-paid debit cards in other individuals’ names or to a bank account in one of the co-conspirator’s names. On several occasions, Etienne withdrew money from the bank account in his co-conspirator’s name that contained fraudulent income tax refunds from the State of Ohio.
Co-defendant Wilbert Champagne, 20, of North Miami Beach, was charged with conspiracy to use unauthorized access devices, use of unauthorized access devices, and aggravated identity theft. Champagne is a fugitive.
Mr. Ferrer commended the investigative efforts of the DOL-OIG, IRS-CI, ICE-HSI, NMBPD and the Ohio Department of Taxation – Criminal Investigations Division. The case is being prosecuted by Assistant U.S. Attorney Jamie R. Galvin.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
North Carolina Man Charged with Attempting to Provide Material Support to ISIL and Weapon OffensesRead the Press Release
A Burke County, North Carolina, man has been charged with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division.
The criminal complaint was filed today in federal court, charging Justin Nojan Sullivan, 19, of Morganton, North Carolina, with one count of attempting to provide material support to ISIL, one count of transporting and receiving a silencer in interstate commerce with intent to commit a felony, and one count of receipt and possession of an unregistered silencer, unidentified by a serial number. Sullivan was arrested in his home on Friday, June 19, 2015, without incident.
“As alleged in the complaint, the defendant was planning assassinations and violent attacks in the United States and is charged with attempting to provide material support to ISIL and federal firearms violations,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Sullivan is charged with attempting to provide material support to ISIL, a designated terrorist organization that poses a serious threat to our country’s security,” said Acting U.S. Attorney Rose. “My highest priority is to detect and prosecute violent extremists and protect innocent Americans from terrorist attacks.”
“Justin Sullivan intended to commit violent acts against innocent people in the U.S. to support the terrorist organization, ISIL,” said Special Agent in Charge Strong. “As demonstrated in this case federal, state, and local law enforcement will work tirelessly to protect our communities from those who plot to carry out terrorist activities of any kind.”
The criminal complaint alleges that the FBI became aware of Sullivan’s plans to obtain a semi-automatic AR-15 rifle at the Hickory Gun Show in Hickory, North Carolina, on June 20, 2015, which he planned to use to kill a large number of U.S. citizens on behalf of ISIL. According to the criminal complaint, an FBI undercover employee (UC) made contact with Sullivan beginning on or about June 6, 2015, during which time Sullivan described himself as “a mujahid,” and as a Muslim convert living in the eastern United States. Sullivan also told the UC that “the war is here,” and gave the UC the opportunity to join what he called the Islamic State of North America, whose “doctrine is Guerilla Warfare in and out,” the complaint alleges. The criminal complaint further alleges that over the next few days and during various conversations, Sullivan discussed with the UC, among other things, his various terrorist attack concepts and instructed the UC on how to obtain weapons, specifically “an AR-15 .223 with split ammo” at a gun show.
According to the complaint, on or about June 9, 2015, Sullivan discussed with the UC the possibility of making homemade silencers and asked the UC whether he would be able to make one. When the UC said that he thought he could, Sullivan told the UC “Ill need to have one built by next week.” The complaint alleges that Sullivan also told the UC “Yeah ill let u mail me…I plan on using it this mont[h],” and that Sullivan planned on doing “minor assassinations before the big attack for training.” He also told that UC that “we are going to send a video to IS.” According to the complaint, during a follow-up conversation, Sullivan told the UC again that he would need the suppressor “before the end of next week,” apparently referring to June 19, 2015.
On June 19, 2015, the FBI, with the support of the Hickory, North Carolina, Police Department, the Burke County, North Carolina, Sheriff’s Office and the North Carolina State Highway Patrol, arrested Sullivan at his home and located the silencer at his residence, which Sullivan had received earlier that day. No one was harmed during the arrest.
Sullivan is currently in federal custody. Sullivan is expected to make his initial appearance in federal court today.
The charge of conspiracy to provide material support to a designated foreign organization carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The charge of transporting and receiving a silencer in interstate commerce with intent to commit a felony carries a maximum potential penalty of 10 years in prison and a fine of $250,000. The charge of receipt and possession of an unregistered silencer, unidentified by a serial number, carries a maximum potential penalty of 10 years in prison and a fine of $10,000.
The charges contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory Gonzalez of the National Security Division’s Counterterrorism section.
Sullivan Complaint
North Carolina Man Charged with Attempting to Provide Material Support to ISIL and Weapons OffensesRead the Press Release
CHARLOTTE, N.C. – A Burke County, North Carolina, man has been charged with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division.
The criminal complaint was filed today in federal court, charging Justin Nojan Sullivan, 19, of Morganton, North Carolina, with one count of attempting to provide material support to ISIL, one count of transporting and receiving a silencer in interstate commerce with intent to commit a felony, and one count of receipt and possession of an unregistered silencer, unidentified by a serial number. Sullivan was arrested in his home on Friday, June 19, 2015, without incident.
“As alleged in the complaint, the defendant was planning assassinations and violent attacks in the United States and is charged with attempting to provide material support to ISIL and federal firearms violations,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Sullivan is charged with attempting to provide material support to ISIL, a designated terrorist organization that poses a serious threat to our country’s security,” said Acting U.S. Attorney Rose. “My highest priority is to detect and prosecute violent extremists and protect innocent Americans from terrorist attacks.”
“Justin Sullivan intended to commit violent acts against innocent people in the U.S. to support the terrorist organization, ISIL,” said Special Agent in Charge Strong. “As demonstrated in this case federal, state, and local law enforcement will work tirelessly to protect our communities from those who plot to carry out terrorist activities of any kind.”
The criminal complaint alleges that the FBI became aware of Sullivan’s plans to obtain a semi-automatic AR-15 rifle at the Hickory Gun Show in Hickory, North Carolina, on June 20, 2015, which he planned to use to kill a large number of U.S. citizens on behalf of ISIL. According to the criminal complaint, an FBI undercover employee (UC) made contact with Sullivan beginning on or about June 6, 2015, during which time Sullivan described himself as “a mujahid,” and as a Muslim convert living in the eastern United States. Sullivan also told the UC that “the war is here,” and gave the UC the opportunity to join what he called the Islamic State of North America, whose “doctrine is Guerilla Warfare in and out,” the complaint alleges. The criminal complaint further alleges that over the next few days and during various conversations, Sullivan discussed with the UC, among other things, his various terrorist attack concepts and instructed the UC on how to obtain weapons, specifically “an AR-15 .223 with split ammo” at a gun show.
According to the complaint, on or about June 9, 2015, Sullivan discussed with the UC the possibility of making homemade silencers and asked the UC whether he would be able to make one. When the UC said that he thought he could, Sullivan told the UC “Ill need to have one built by next week.” The complaint alleges that Sullivan also told the UC “Yeah ill let u mail me…I plan on using it this mont[h],” and that Sullivan planned on doing “minor assassinations before the big attack for training.” He also told that UC that “we are going to send a video to IS.” According to the complaint, during a follow-up conversation, Sullivan told the UC again that he would need the suppressor “before the end of next week,” apparently referring to June 19, 2015.
On June 19, 2015, the FBI, with the support of the Hickory, North Carolina, Police Department, the Burke County, North Carolina, Sheriff’s Office and the North Carolina State Highway Patrol, arrested Sullivan at his home and located the silencer at his residence, which Sullivan had received earlier that day. No one was harmed during the arrest.
Sullivan is currently in federal custody. Sullivan is expected to make his initial appearance in federal court today.
The charge of conspiracy to provide material support to a designated foreign organization carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The charge of transporting and receiving a silencer in interstate commerce with intent to commit a felony carries a maximum potential penalty of 10 years in prison and a fine of $250,000. The charge of receipt and possession of an unregistered silencer, unidentified by a serial number, carries a maximum potential penalty of 10 years in prison and a fine of $10,000.
The charges contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI. In making today’s announcement, Acting U.S. Attorney Rose also thanked the Charlotte Division of the U.S. Postal Inspection Service for their invaluable assistance. Rose also thanked the North Carolina State Highway Patrol, the Burke County Sheriff’s Office, and the Hickory Police Department and for their help with the investigation.
The case is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory Gonzalez of the National Security Division’s Counterterrorism section.
Niagara Falls Man Charged with Being A Felon in Possession of A Firearm and AmmunitionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a one-count indictment charging Ralik Hamilton, 40, of Niagara Falls, NY, with being a felon in possession of a firearm and ammunition. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.Assistant U.S. Attorney Mary Catherin Baumgarten, who is handling the case, stated that according to the indictment, on April 10, 2015, New York State Parole and other law enforcement officers conducted a search of the defendant’s residence on 4th Street in Niagara Falls. During the search, they recovered a 9 mm pistol and several rounds of ammunition. Having been previously been convicted of a felony, Hamilton is prohibited from legally possessing a firearm.
The defendant was arraigned today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. A detention hearing is scheduled for June 26, 2015 at 2:00 p.m.
The indictment is the result of/culmination of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto, and the New York State Division of Parole, under the direction of Acting Commissioner Anthony Annucci.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Niagara Falls Man Charged with Being A Felon in Possession of A Firearm and AmmunitionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a one-count indictment charging Ralik Hamilton, 40, of Niagara Falls, NY, with being a felon in possession of a firearm and ammunition. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.Assistant U.S. Attorney Mary Catherin Baumgarten, who is handling the case, stated that according to the indictment, on April 10, 2015, New York State Parole and other law enforcement officers conducted a search of the defendant’s residence on 4th Street in Niagara Falls. During the search, they recovered a 9 mm pistol and several rounds of ammunition. Having been previously been convicted of a felony, Hamilton is prohibited from legally possessing a firearm.
The defendant was arraigned today before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. A detention hearing is scheduled for June 26, 2015 at 2:00 p.m.
The indictment is the result of/culmination of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto, and the New York State Division of Parole, under the direction of Acting Commissioner Anthony Annucci.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Newton Woman Sentenced to Prison on Drug ChargesRead the Press Release
Jackson, Miss - Angelia Fortenberry, 36, of Newton, was sentenced today by U.S. District Judge Daniel P. Jordan III to 46 months in federal prison followed by three years of supervised release for conspiracy to possess with intent to distribute methamphetamine, announced U.S. Attorney Gregory K. Davis and DEA Special Agent in Charge Keith Brown.
Fortenberry was indicted as a result of DEA’s "Operation Yeti Ice", an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation, which began as an operation targeting illegal narcotics distribution in central Mississippi. The drug network involved the distribution of over 100 Kilograms of Methamphetamine and encompassed the states of California and Mississippi.
This OCDETF operation was led by the Drug Enforcement Administration and the Mississippi Bureau of Narcotics with assistance from the U.S. Marshal Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Postal Service, Internal Revenue Service Criminal Investigation, Scott County Sheriff’s Office, Leake County Sherriff’s Office, Madison County Sherriff’s Office, Carthage Police Department, Forest Police Department, Newton County Sherriff’s Office, Lauderdale County Sherriff’s Office, Decatur Police Department, Richland Police Department, Pearl Police Department, Ridgeland Police Department, and the Jackson Police Department.
The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
This case was prosecuted by Assistant U.S. Attorney Erin Chalk.
New Kensington Man Pleads Guilty to Drug ChargeRead the Press Release
PITTSBURGH - A resident of New Kensington, Pa., pleaded guilty in federal court to a charge of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
Tremayne Carr, 38, pleaded guilty to one count before Senior United States District Judge Gustave Diamond.
In connection with the guilty plea, the court was advised that on February 6, 2014, Carr attempted to possess with intent to distribute a quantity of cocaine.
Judge Diamond scheduled sentencing for October 21, 2015 at 10 a.m. The law provides for a maximum total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court ordered that Carr be held in home detention.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Drug Enforcement Administration and the Pennsylvania State Police conducted the investigation that led to the prosecution of Carr.
New Haven Man Admits Illegal Gun PossessionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SHAWN HILL, 31, of New Haven, pleaded guilty today in Hartford federal court to one count of possession of a firearm by a convicted felon. The jury in the case had been picked and HILL’s trial was scheduled to begin this morning.
According to court documents and statements made in court, on December 12, 2012, ATF agents and New Haven Police officers executed a search warrant at a residence on Norton Street in New Haven where HILL had been residing. As New Haven SWAT team members forced entry into the second floor apartment, HILL discarded a fully-loaded Sig Sauer, P229, .40 caliber pistol through a window in a bedroom where a 9-year-old child was sleeping. The pistol was quickly recovered by law enforcement and HILL was arrested.
The firearm had been reported as stolen from Wilmington, North Carolina.
HILL’s criminal history includes several felony convictions. 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.
HILL is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on September 14, 2015, at which time he faces a maximum term of imprisonment of 10 years and a fine of up to $250,000.
HILL has been detained since his arrest.
This matter has been investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney John H. Durham.
Navajo Man Pleads Guilty to Federal Involuntary Manslaughter and Assault ChargesRead the Press Release
ALBUQUERQUE – Joshua Rakestraw, 24, an enrolled member of the Navajo Nation who resides in Farmington, N.M., pled guilty on Friday in federal court in Albuquerque, N.M., to involuntary manslaughter and assault charges. Under the terms of his plea agreement, Rakestraw will be sentenced to 48 months in prison followed by up to three years of supervised release.
Rakestraw was arrested on Nov. 3, 2014, on a criminal complaint charging him with killing a Navajo woman and assaulting a Navajo man, causing him to suffer serious bodily injury, on Oct. 28, 2014. The complaint alleged that Rakestraw committed these crimes while under the influence of alcohol in Indian Country in San Juan County, N.M. According to court filings, Rakestraw killed one victim and seriously injured the other victim by running over them with his vehicle at Morgan Lake, south of Kirtland, N.M. At the time, Rakestraw was under the influence of alcohol.
During his change of plea hearing, Rakestraw pled guilty to a felony information charging him with involuntary manslaughter and assault resulting in serious bodily injury. In entering the guilty plea, Rakestraw admitted that on Oct. 28, 2014, at Morgan Lake he drove his truck forward, striking both victims as he drove his truck over them. One of the victims died and the other victim suffered several injuries including a dislocated hip and a broken rib.
Rakestraw has been in federal custody since his arrest and remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Shammara Henderson is prosecuting the case.
Mississippi Man Pleads Guilty to Obstructing Black Bear InvestigationRead the Press Release
Jackson, Miss – Travis Butler, 28, of Meridian, pleaded guilty today to violating the Endangered Species Act and to obstructing the federal investigation into the killing of a Louisiana Black Bear in Lauderdale County, Mississippi, announced U.S. Attorney Gregory K. Davis. The Louisiana Black Blear is a protected species under the Endangered Species Act.
On January 4, 2014, Butler arranged for David Lucas Wimberly, a taxidermist in Quitman, Mississippi, to mount a Louisiana Black Bear illegally killed in the Whynot Community of Lauderdale County. Butler then transported the Bear to Wimberly’s Taxidermy in Quitman, Mississippi. Some 32 days later when federal and state wildlife officers began their investigation into the killing, Butler caused the taxidermist to conceal the Black Bear’s hide from a federal investigator.
David Lucas Wimberly and Chester Brad Williams each previously pleaded guilty to an Endangered Species Act violation involving the same Louisiana Black Bear. They will be sentenced on June 30, 2015, by U.S. District Judge Henry T. Wingate and face a maximum penalty of up to one year in prison.
Butler will be sentenced on September 3, 2015, by U.S. District Judge Henry T. Wingate. He faces a maximum penalty of up to one year in prison under the Endangered Species Act and faces a maximum penalty of up to 20 years in prison for obstructing the investigation. As a result of his guilty plea today to the obstruction charge, Butler can no longer possess a firearm.
The investigation in this case was conducted by the United States Fish and Wildlife Service and the Mississippi Department of Wildlife, Fisheries and Parks. Deputy Criminal Division Chief Darren LaMarca is prosecuting the case.
McCreary County Couple Sentenced to Prison for Defrauding Social Security and Kentucky Medicaid Out of Hundreds of Thousands of DollarsRead the Press Release
LONDON — A McCreary County couple, who defrauded the Social Security Administration and Kentucky Medicaid out of hundreds of thousands of dollars, has been sentenced in federal court.
On Thursday, June 18, U.S. District Judge Gregory F. Van Tatenhove sentenced Oliver Taylor, 59, to 33 months in prison, for theft of government property, health care fraud, and defrauding the Social Security Administration (SSA). Oliver’s wife at the time of the offenses, Lisa Taylor, 51, was sentenced to 18 months in prison, for social security fraud. Both defendants have been ordered to pay full restitution to the SSA. Under federal law, they will have to serve at least 85 percent of their prison sentences.
According to court documents, in 1993, Oliver Taylor began receiving Social Security benefit payments on behalf of his elderly mother. Starting in 1995, following his mother’s death, and continuing until 2014, Oliver Taylor repeatedly failed to report his mother’s death to the SSA, in order to continue receiving her benefit payments for his own personal use. Specifically, Oliver made false statements to the SSA and signed his deceased mother’s name on eligibility forms to indicate she was still alive.
For approximately seven years, Lisa Taylor assisted in the fraud scheme, by signing SSA reports for Oliver and by pretending to be Oliver’s mother during a phone conversation with the SSA.
Because Oliver illegally converted his mother’s benefits to his own use, he was ineligible for his own SSA benefits. Additionally, he fraudulently failed to report the money he collected from his mother’s benefits as income to the SSA and Kentucky Department for Medicaid Services.
As a result of their scheme, the Taylors fraudulently obtained a total of $487,798.98 from the SSA and the Kentucky Department for Medicaid Services.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Margaret Moore-Jackson, Special Agent in Charge, Social Security Administration, Office of Inspector General, Atlanta Field Division, jointly made the announcement.
The investigation was conducted by the Social Security Administration, Office of the Inspector General, Office of Investigations. Assistant U.S. Attorney Adam C. Reeves prosecuted the case.
Martinsburg man convicted of selling cocaine near local schoolRead the Press Release
MARTINSBURG, WEST VIRGINIA – Gary Vincent Whorley, 32, of Martinsburg, was convicted today of selling cocaine near an elementary school, United States Attorney William J. Ihlenfeld, II, announced.
Whorley, also known as “Tyrone,” sold crack cocaine within 1,000 feet of an elementary school located in Jefferson County, West Virginia. He pled guilty today to one count of “Aiding and Abetting the Distribution of Cocaine Base within 1,000 Feet of a School.” 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 Paul Camilletti prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Manhattan U.S. Attorney Announces Return to Brazil of Two Masterpieces Linked to Bank FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Deputy Special Agent in Charge Michael Shea of U.S. Immigration and Customs Enforcement’s ("ICE") Homeland Security Investigations New England, announced today that a painting by Jean-Michel Basquiat called "Hannibal" (the "Basquiat"), as well as a Roman Togatus statue, were returned to Brazil at a repatriation ceremony at the United States Attorney’s Office in Manhattan, New York. The painting and the statue were smuggled into the United States in violation of customs law and were forfeited to the government as a result of civil forfeiture action brought by the United States.
Manhattan U.S. Attorney Preet Bharara stated: "Art and antiquities have special value and meaning that cannot readily be quantified. As a result, they have long been the subject of theft and deception, as well as a means to launder illicit proceeds. Art should serve to inspire the mind and nourish the soul, and not be allowed to become a conduit for crime."
HSI Deputy Special Agent in Charge Michael Shea stated: "It is always a pleasure to return cultural artifacts to the people of another nation. I would like to thank our special agents and partners at INTERPOL for their diligence in this investigation. ICE will do everything in its power to help preserve and safeguard a nation's history by identifying, locating, and recovering stolen antiquities."
In related repatriation ceremonies held on September 21, 2010, and May 9, 2014, the U.S. Attorney’s Office for the Southern District of New York returned to Brazil three paintings – "Modern Painting with Yellow Interweave" by Roy Lichtenstein (the "Lichtenstein"), "Figures dans une structure" by Joaquin Torres-Garcia (the "Torres-Garcia"), and "Composition abstraite" by Serge Poliakoff (the "Poliakoff") – that were smuggled into the United States.
The Basquiat and the Togatus once belonged to Brazilian banker Edemar Cid Ferreira. Ferreira, the founder and former president of Banco Santos, S.A. ("Banco Santos"), was convicted in Brazil of crimes against the national financial system and money laundering. In December 2006, Ferreira was sentenced in Brazil to 21 years in prison.
As part of the case, a Sao Paulo Court judge also ordered the search, seizure, and confiscation of assets that Ferreira, his associates, and members of his family had acquired with unlawfully obtained funds from Banco Santos. Those assets included the Basquiat, the Togatus, the Lichtenstein, the Torres-Garcia, the Poliakoff, and other artwork valued at $20 million to $30 million. The artwork was kept in several locations, including Ferreira’s home in the Morumbi neighborhood of Sao Paulo, the main offices of Banco Santos, and at a holding facility. When Brazilian authorities searched these locations, they found that several of the most valuable works of art were missing, including the Basquiat and the Togatus.
The Sao Paulo Court sought INTERPOL’s assistance after searching museums and institutions in Brazil for the missing artwork. In October and November 2007, INTERPOL and the Government of Brazil sought the assistance of the United States to locate and seize the missing works on behalf of the Brazilian government. The ensuing Southern District of New York and HSI investigation revealed that the Basquiat and the Togatus were shipped from the Netherlands to a secure storage facility in New York on August 21, 2007, and September 11, 2007, respectively. The invoices, however, failed to comply with U.S. customs laws in a number of respects. For example, the shipping invoices did not identify the pieces and falsely claimed that their value was $100 each. In fact, the Basquiat alone was recently appraised at $8 million.
HSI special agents based in New Haven, Connecticut, located and seized the Basquiat in November 2007, and the U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture Complaint alleging that the Basquiat had been brought into the United States illegally. Since the filing of the original Complaint in February 2008, the United States seized additional works of art and filed two amended Complaints seeking the forfeiture of the Lichtenstein, the Torres-Garcia, the Poliakoff, and the Togatus.
After extensive litigation, United States District Court Judge Richard J. Sullivan granted the government’s motion for summary judgment and entered an order forfeiting the Basquiat and the Togatus on May 10, 2013. The Second Circuit Court of Appeals affirmed Judge Sullivan’s order on September 9, 2014.
* * *
Mr. Bharara praised the investigative work of HSI in helping to locate and seize the painting. He was grateful for the assistance of the Department of Justice’s Office of International Affairs. Mr. Bharara thanked Brazilian authorities for their assistance in the case. He also acknowledged the assistance of the U.S. Department of State and the U.S. Embassy in Brazil for its assistance in the investigation.
The case is being handled by the Money Laundering and Asset Forfeiture Unit of the U.S. Attorney’s Office. Assistant U.S. Attorney Alexander Wilson is in charge of the litigation.
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Man to Serve 22 Months in Federal Prison for Failing to File Federal Income Tax ReturnsRead the Press Release
DALLAS — A local man who admitted willfully failing to file income tax returns for tax years 2010 and 2011 has been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Anthony Rolfe was sentenced last week to serve a total of 22 months in federal prison and ordered to pay $100,490 in restitution to the Internal Revenue Service (IRS). He pleaded guilty in March 2015 to an Information charging two counts of failure to file. He has been in custody since his arrest in November 2014.
According to the factual resume filed in the case, Rolfe was employed by Dr. LeeRoy McCurley at a pain management clinic in Dallas, known as Mid-City Medical Clinic. As part of his job, Rolfe picked up the clinic’s earnings and delivered them to McCurley, in person or through McCurley’s office in Grand Prairie, Texas. Rolfe also delivered office supplies to and distributed fliers for the clinic. For these tasks, according to the factual resume and criminal complaint filed in the case, McCurley paid Rolfe thousands of dollars per week in checks that Rolfe deposited into an account at JPMorgan Chase Bank in the name of Platinum A&C Group, LLC, an entity for which Rolfe was a managing partner. Bank records showed that Rolfe deposited more than $500,000 in payments from McCurley in 2010 and 2011 and used the majority of the money on clothing and jewelry, hotel and resort stays, nightclub tabs, and yacht rentals.
IRS Criminal Investigation investigated the case. Assistant U.S. Attorney John de la Garza prosecuted.
Man Stopped for Talking on Cellphone Sentenced to 10 Years in PrisonRead the Press Release
FRESNO, Calif. — Mario Farias Pineda, 23, was sentenced today by United States District Judge Lawrence J. O’Neill to 10 years in prison for possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Pineda was driving northbound on California State Highway 99 when he was pulled over by Fresno County Sheriff’s deputies for talking on his cellphone. The deputies obtained permission to search his vehicle and found approximately 25 pounds of methamphetamine in a hidden compartment behind the rear passenger seat.
This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration and the Fresno County Sheriff’s Office. Assistant United States Attorney Michael Frye prosecuted the case.
Local Man Sentenced for Running $8.7 Million Ponzi SchemeRead the Press Release
CINCINNATI – John R. Bullar, 53, of Cincinnati, Ohio, was sentenced to 100 months in prison, three years of supervised release, was ordered to forfeit $535,408.68, and was ordered to pay approximately $6.2 million in restitution to the victims for committing wire fraud and money laundering relative to a fraudulent investment scheme that he ran for 10 years. Bullar previously pleaded guilty to the aforementioned charges on September 23, 2014.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Ohio Attorney General Mike DeWine, Commissioner Andrea Seidt, Ohio Department of Commerce, Division of Securities and Joseph T. Deters, Hamilton County Prosecuting Attorney announced the sentence handed down today by U.S. District Judge Michael R. Barrett.
According to court documents, between 2003 and September 2013 Bullar devised a scheme to defraud investors by soliciting millions of dollars under false pretenses, failing to invest investors' funds as promised, and misappropriating and converting investors' funds for his own benefit without the knowledge or authorization of the investors.
Bullar was the sole owner and operator of Executive Management Advisors, LLC ("EMA"), which had its principal place of business in Cincinnati, Ohio. Bullar also was the sole owner and operator of Priapus Group, LLC. Since at least 1998, Bullar offered investment opportunities to investors through his company, EMA. Bullar marketed himself as someone experienced in the financial services industry and who was successful in investing in commodity futures.
In an effort to persuade individuals to invest with him, Bullar frequently made numerous false representations. For example, Bullar told potential clients that he never had a losing quarter. Bullar also offered potential investors a false sense of security by telling potential investors that he, himself, was the biggest investor in EMA. Bullar told the investors that he would manage their funds even though it was below his minimum level of investment.
The majority of Bullar’s investors were friends, family members and fellow church members. Bullar told his clients that he had invested their money in precious metals, gold, silver, bonds, and foreign currency and that he made money based on the volatility of the market, regardless of whether the market was up or down. Bullar told clients that he preferred to keep the number of his investor’s small, so that he could "fly under the radar." Bullar also told clients that he had a computerized algorithm system that monitored the market for patterns and alerted him to potential losses. Bullar told investors that although he had been offered millions of dollars for the system he would not sell it, because he could make more money using the system rather than selling it. These representations were false, however, because in reality, Bullar had invested only a small amount of the money that he received from clients, using the vast majority of the money to pay other investors and his own personal expenses.
To induce current clients to keep investing, Bullar provided investors with quarterly statements purporting to show their account balances. These statements often showed substantial gains over a short period of time.
Although Bullar collected over $8.7 million from investors between mid-2006 and September 2013, only $580,500.00 was sent to brokers for trading. The remaining $8.1 million was never invested at all. The small fraction of investor money that Bullar actually sent to brokers for trading failed to generate profits and the money was either lost via trading or later withdrawn by Bullar.
In addition, investors actually paid taxes on the fictitious earnings. Bullar caused Forms 1099 to be issued to investors for tax purposes, which reported the fictitious gains. Investors relied on these documents to file their tax returns and investors paid taxes on the fictitious gains reported to them.
Bullar furthered his scheme by creating an appearance of legitimacy. Bullar created an investment blog for his clients (www.emafutures.com), which he updated regularly, sharing various articles and reports about the market. Bullar outfitted his home office, which investors frequented, with a television and three computer monitors to give investors the impression that he was constantly monitoring the market. Bullar’s expansive 5 bedroom/5 bathroom home also gave investors the impression that he was a successful trading advisor. In addition, Bullar also purchased an adjoining lot with investor money and used investor money to remodel the cabin on the lot, install a swimming pool and outdoor kitchen, and pay for professional landscaping on the lot. Bullar also entertained groups of investors at his home, treating investors to lavish dinners and paying for some investors to vacation with him.
In addition, Bullar used investor money to pay for the mortgage on his home, vacations, country club dues, boats, jet skis, sports tickets, and vehicles, among other things.
“Today's sentencing demonstrates how federal law enforcement, along with our State and Local law enforcement partners, band together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain. IRS Criminal investigators will continue to use their financial expertise to identify and trace laundered funds in these types of investor fraud schemes,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Stewart commended the investigation by the IRS-Criminal Investigation and Ohio Bureau of Criminal Investigation, the coordination of the Hamilton County Prosecutor’s Office, as well as Assistant United States Attorney Emily N. Glatfelter, who represented the United States in this case. U.S. Attorney Stewart also thanked the U.S. Commodity Futures Trading Commission, which has filed civil charges in a separate action.
Husband and Wife Plead Guilty to Tax FraudRead the Press Release
PITTSBURGH- Two individuals pleaded guilty in federal court to a charge of conspiracy to defraud the United States in the computation and collection of individual and corporate income taxes, United States Attorney David J. Hickton announced today.
Paul Schneider and Lynda Schneider, husband and wife, pleaded guilty to one count each before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that the Schneiders failed to file individual or corporate income taxes for themselves and their business, Cedar Direct, a company which designs and promotes the manufacture of log homes between 2006 and 2009. The defendants evaded the payments of taxes by using their corporate business checking account to pay personal expenses, by failing to maintain assets in their own names, and by failing to report or pay individual or corporate income taxes.
Judge Fischer scheduled sentencing for October 28, 2015. The law provides for a total sentence of 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the Schneiders on bond.
Assistant United States Attorney Margaret E. Picking is prosecuting this case on behalf of the government.
The Internal Revenue Service-Criminal Investigations conducted the investigation that led to the prosecution of Paul and Lynda Schneider.
Hugo Company Pays $20,000 for Disturbing Vegetation in Minnesota Valley National Wildlife RefugeRead the Press Release
United States Attorney Andrew M. Luger today announced that LAMETTI & SONS, INC. agreed to pay a $10,000 fine and an additional $10,000 in restitution to the non-profit group Refuge Friends, Inc., to resolve allegations in a criminal petty offense citation charging it with one count of disturbing plants during the summer of 2014 in the Minnesota Valley National Wildlife Refuge in Bloomington, Minn.
According to the citation and documents filed in court, LAMETTI was awarded a contract by the Metropolitan Council Environmental Services Burnsville Interceptor Improvements Project for a multi-year construction project to reline sewer pipes on the Minnesota Valley National Wildlife Refuge in Bloomington. A Special Use Permit with specific limitations was incorporated into the construction plans to protect nearby areas of threatened and special-concern plants within the Refuge, which were delineated with signs that read, “Protected Native plants in this area do not enter or disturb.”
According to the violation notice and other court documents, on July 17, 2014, a concerned citizen reported to local wildlife agencies that a large amount of dead vegetation, which potentially included threatened prairie plants such as tobacco root and the small white lady’s-slipper, had been discovered within the Refuge.
On July 18, 2014, U.S. Fish and Wildlife Service (USFWS) agents and a Metropolitan Council representative investigated the area in which dead vegetation was reported. USFWS agents also noted an additional location of standing water containing dead wildlife directly adjacent to one of the construction sites, which emitted a strong chemical odor. About one week later, a USFWS agent observed that the standing water adjacent to the construction site had dissipated and left approximately 6,229 square feet of dead vegetation.
In a memo dated July 24, 2014, a LAMETTI project manager responded to the Metropolitan Council’s inquiries and stated that up to an estimated 24,000 gallons of heated cure water were released at two separate project construction sites within the Refuge due to a problem with the installation process of the liners on the sewer pipes on two separate dates. The heated cure water release was unauthorized and went unreported prior to the investigation. According to the Special Conditions of the Special Use Permit, the permit holder was required to report all damage to lands within 24 hours of the incident.
“A large portion of the Minnesota Valley National Wildlife Refuge is urban and provides valuable habitat for a wide range of plants and wildlife,” said U.S. Fish and Wildlife Service, Refuge Law Enforcement Officer Scott Pariseau. “Another benefit to our urban refuge is the unique opportunity we provide for the community to enjoy and appreciate wildlife-related recreation close to home. It’s unfortunate that despite all of the planning and permitting to mitigate resource damage from this project, damages to important habitat occurred. We are however pleased to see that the contractor was held responsible for the damage they caused to this public resource.”
The citation issued is the result of an investigation conducted by the U.S. Fish and Wildlife Service.
This case was prosecuted by Assistant U.S. Attorney Benjamin Bejar.
Defendant Information:
LAMETTI & SONS, INC.
Hugo, Minn.
Charges:
- Disturbing plants on National Wildlife Refuge, 1 count
Settlement:
- $10,000 fine
- $10,000 restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Houston Man Heads to Federal Prison for Defrauding Senior CitizensRead the Press Release
HOUSTON – Raymond Goffney, 38, has been ordered to federal prison for his convictions of conspiring to commit wire fraud and aggravated identity theft, announced U.S. Attorney Kenneth Magidson. Goffney pleaded guilty Jan. 26, 2015.
Today, U.S. District Judge Lynn Hughes handed Goffney a sentence of 69 months in federal prison. He was ordered to serve 33 months for the conspiracy in addition to 24 months for the identity theft which must be served consecutively. He was further sentenced to an additional 12 months for violating the terms of his supervised release for a prior federal charge in 2006 involving the possession and distribution of cocaine. In total, Goffney will serve 69 months in federal prison to be immediately followed by five years of supervised release.
Between Jan. 1, 2013, and Nov. 30, 2013, Goffney engaged in a wire fraud conspiracy to unlawfully obtain cash and defraud Compass Bank, a Federal Deposit Insurance Corporation - insured institution. Goffney and others unlawfully obtained, shared and busted out multiple cards for cash and shared the proceeds with each other. Goffney and his co-conspirators stole the identities of approximately 75 individuals, the vast majority of whom were senior citizens. These identities were then taken to apply for fraudulent credit cards with Compass Bank. Goffney used both legitimate and fake businesses, under his sole ownership and control, to run the fraudulent credit transactions.
Goffney and others stole a total of approximately $1.1 million during the conspiracy.
He was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation by U.S. Secret Service and the U.S. Postal Inspection Service. Assistant U.S. Attorney Julie Searle prosecuted the case.
Holdenville Man Pleads Guilty to Communicating A Bomb Threat to Hughes County CourthouseRead the Press Release
The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CALEB TRENT HODGINS, age 20, of Holdenville, Oklahoma, pled guilty to an Information charging him with USE OF TELEPHONE TO COMMUNICATE BOMB THREAT, in violation of Title 18, United States Code, Sections 844(e) and 2.
The charge arose from an investigation by the Federal Bureau of Investigation and the Hughes County Sheriff’s Department.
The Information alleged that on or about May 21, 2014, in the Eastern District of Oklahoma, the defendant, through use of a telephone, maliciously conveyed false information knowing the same to be false concerning an attempt and alleged attempt being made to unlawfully damage and destroy a building, to-wit: the Hughes County Courthouse in Holdenville, Oklahoma, by means of an explosive, in and affecting interstate commerce.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the defendant’s guilty plea, and ordered the completion of a presentence report. Sentencing will be scheduled upon its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is up to 10 years imprisonment, a fine of up to $250,000.00 or both.
Assistant United States Attorney Chris Wilson represented the United States.