Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 6 May 2015
Three Toledo men indicted for making and passing counterfeit billsRead the Press Release
A three-count indictment was filed charging three Toledo men with crimes related to counterfeiting, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Lafoe D. White, 23; Myron A.L. Haskins, 26; and Raymond C. Armstrong, 56, were indicted on charges of conspiracy, counterfeiting obligations or securities of the United States, and uttering counterfeit obligations or securities of the United States.
Count 1 of the indictment alleges that in January 2015, White, Haskins and Armstrong conspired to manufacture and possess counterfeit Federal Reserve Notes and then attempt to pass the counterfeit notes at retail establishments.
On or about January 22, 2015, Myron A.L. Haskins possessed an inkjet printer, linen paper and counterfeit $5, $10, and $20 Federal Reserve Notes. On or about January 22, 2015, Lafoe D. White gave counterfeit $10 Federal Reserve Notes to Raymond C. Armstrong. On or about January 22, 2015, Raymond C. Armstrong attempted to pass counterfeit $10 Federal Reserve Notes at a retail store in Boardman, Ohio, according to the indictment.
Count 2 of the indictment alleges that on or about January 22, 2015, White and Haskins did counterfeit, falsely make and forge counterfeited $5, $10, and $20 Federal Reserve Notes.
Count 3 of the indictment alleges that on or about January 22, 2015 White, Haskins and Armstrong attempted to pass counterfeited obligations at a Wal-Mart in Boardman, Ohio.
If convicted, a defendant’s sentence will be determined by the Court after review of factors unique to this case, including a defendant’s prior criminal record, if any, a defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the United States Secret Service and the Boardman Police Department. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Men Sentenced in Federal Court to Combined Total of over Twenty-One (21) Years in Prison for Child Pornography OffensesRead the Press Release
Fayetteville/Fort Smith, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced that James Gerald Cain, Edward McMahon, and Matthew McMullen were sentenced this week to a combined total of 254 months in federal prison without the possibility of parole for unrelated child pornography offenses, specifically, Receipt of Images of Child Pornography. Cain, 53 of Springdale, was sentenced to 97 months in prison; McMahon, age 61 of Lincoln, was sentenced to 97 months in prison; McMullen, age 32 of Fayetteville, was sentenced to 60 months in prison. The Honorable Timothy L. Brooks and the Honorable P.K. Holmes, III, presided over the sentencing hearings in the United States District Court in Fayetteville and Fort Smith, respectively.
U. S. Attorney Eldridge commented, “There is no higher priority in our office than protecting our children. The sentences announced today send a strong message that we will continue to aggressively prosecute those involved in child pornography offenses. Those that possess and view images of child pornography perpetuate this despicable trade and empower those that directly abuse kids. We will continue to fight these horrendous crimes.”
“Child pornography steals the innocence of children and destroys lives. By downloading and possessing images showing the sexual abuse of minors these defendants re-victimized multiple innocent children, and supported the producers who committed child rape,” said HSI New Orleans Acting Special Agent in Charge Cindy M. Johnson. “Sexual abuse scars children for life, and HSI will continue to use all the tools in its arsenal to identify the perpetrators of these horrendous acts and seek justice on behalf of their victims.” Johnson oversees a five-state area of operations to include Arkansas, Alabama, Louisiana, Mississippi and Tennessee.
With respect to Cain, in August, 2014, the Northwest Arkansas Internet Crimes Against Children Taskforce identified a computer that was engaging in the distribution of child pornography via an internet file sharing program. A subsequent investigation revealed that the subscriber information related to the suspect internet user account returned to the Springdale residence of the defendant, James Cain. In October of 2014, a federal search warrant was executed on Cain’s home where law enforcement seized numerous computers and digital storage devices. Cain admitted at that time to owning the seized equipment and using it to search for and download images of minors engaged in sexually explicit conduct. Further, he stated he had being downloading child pornography for approximately 15 years. A subsequent forensic examination of his computer revealed one thousand images and/or videos of minors engaging in such sexually explicit conduct. Cain was arrested on December 3, 2014 and pleaded guilty to the charge on February 4, 2015. Cain was also sentenced to 15 years supervised release following his prison term and a $1,750.00 fine.
With respect to McMahon, in September, 2014, the Northwest Arkansas Internet Crimes Against Children Taskforce received information from the National Center for Missing and Exploited Children concerning an individual residing in Northwest Arkansas being involved in the posting of child pornography pictures online. As a result, members of the ICAC Taskforce executed a federal search warrant at the home of the defendant, Edward McMahon, in Lincoln, Arkansas. At McMahon’s residence, law enforcement confiscated multiple items of digital evidence that contained child pornography. Additionally, McMahon admitted to law enforcement to owning the seized equipment and to using it to trade child pornography. A subsequent forensic examination of his computer revealed hundreds of images and videos of child pornography. McMahon was arrested on November 21, 2014 and pleaded guilty to the charge on February 4, 2015. McMahon was also sentenced to 10 years supervised release following his prison term and a $1,750.00 fine.
With respect to McMullen, in April, 2014, the Northwest Arkansas/River Valley Internet Crimes Against Children Taskforce executed a federal search warrant at the Fort Smith residence of McMullen related to the possession and distribution of child pornography. While at the scene, the defendant admitted to downloading child pornography from the internet. A subsequent forensic examination of his computer revealed over 400 videos of minors engaging in sex acts. McMullen was arrested on December 2, 2014 and pleaded guilty to the charge on January 20, 2015. At sentencing, the Government presented the Court with evidence that many of the minors depicted were under 10 years of age. McMullen was also sentenced to five years supervised released following his prison term.
These cases were investigated by Homeland Security Investigations, the Northwest Arkansas and River Valley Internet Crimes Against Children Taskforce, and the Washington County Sheriff’s Office. Assistant United States Attorney Dustin Roberts prosecuted the cases for the United States.
These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), 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.
* * * E N D * * *
Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Three Cleveland women indicted for $165,000 check-kiting schemeRead the Press Release
A 32-count federal indictment was filed charging three Cleveland women for their roles in a $165,000 conspiracy to pass fraudulent checks and then withdrew the money, sometimes at a Cleveland casino, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Devinne P. Hollie, 29, Sade Philpott, 29, and Shanita Hollie, 28, are each charged with one count of conspiracy to commit bank fraud and multiple counts of bank fraud.
The Hollies and Philpott, acting with co-conspirators not yet charged, engaged in a check-kiting scheme in which they fraudulently obtained funds from financial institutions by depositing multiple counterfeit and forged checks into co-conspirators’ bank accounts, according to the indictment.
They then withdrew the proceeds from those accounts at ATMs, through debit card purchases, and by making withdrawals at a local casino, according to the indictment.
“This group passed bad checks and stole from banks,” Dettelbach said. “They may be trading their time at a glitzy casino for the comforts of a federal prison.”
“These women believed they had found a shortcut to put money in their pockets and now they will have to pay for their criminal behavior,” Anthony said. “The FBI will continue this investigation in order to bring all individuals involved in this group to justice.”
In most instances, the Hollies and Philpott found a co-conspirator who was willing and able to open a checking account at a bank. Once these co-conspirators obtained debit cards and PINs for the accounts, they passed these items on to the defendants, who then deposited forged and counterfeit checks into the bank accounts. These deposits typically occurred late at night or in the early morning hours, when the banks were closed and could not detect that the checks were counterfeit and forged, according to the indictment.
The defendants and co-conspirators would then often meet at the Horseshoe Casino in downtown Cleveland, where the co-conspirators would use Total Rewards Cards from the casino linked to their bank accounts to make large scale cash withdrawals from the casino’s cage, according to the indictment.
The Hollies, Philpott and their co-conspirators made deposits of counterfeit and forged checks on approximately 31 different occasions. The false and fraudulent deposits totaled approximately $165,000, and the banks lost approximately of $120,000.
If convicted, the defendants’ sentences will be determined by the court after review of the factors unique to this case, including the defendants’ prior criminal records, the defendants’ roles in the offense and the characteristics of the criminal conduct. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorneys Om Kakani and Carmen Brown, following an investigation by the Federal Bureau of Investigation, with assistance from the Ohio Casino Control Commission.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove the defendant guilty beyond a reasonable doubt.
Three Albuquerque Businessmen Plead Guilty to Federal Tax ChargesRead the Press Release
ALBUQUERQUE – Three brothers, all naturalized U.S. citizens from Armenia, entered guilty pleas in Albuquerque, N.M., to conspiring with each other to defraud the United States of corporate income tax due and owing from their jointly owned business, announced U.S. Attorney Damon P. Martinez and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Hrant Kostanian, 51, Hrair Kostanian, 55, and Gayk Kostanian, 59, were indicted on Sept. 23, 2014, and charged with one count of conspiracy and four counts of tax evasion. Count 1 of the indictment charged the three brothers with conspiracy to defraud the United States of corporate taxes owed on income generated by Pro Billiards, Inc., a New Mexico corporation jointly owned by the brothers that does business as “Billiards Palace” in northeast Albuquerque. The conspiracy count also alleges that the Kostanians also evaded personal income tax due and owing on their personal incomes. The brothers are charged with evading approximately $263,600.00 in corporate taxes during tax years 2007, 2008, 2009 and 2010. More specifically, the Kostanians evaded federal taxes owed by their business by underreporting their income as follows:
Count 2 charges the Kostanians with evading $58,834.00 in federal taxes by falsely claiming that their business had $694,293.00 in taxable income in 2007 when in fact it had $906,003.00 in taxable income that year. Count 3 charges the brothers with evading $25,521.00 in federal taxes by falsely claiming that their business had $624,034.00 in taxable income in 2008 when in fact it had $773,289.00 in taxable income that year. Count 4 charges them with evading $33,810.00 in federal taxes by falsely claiming that their business had $543,224.00 in taxable income in 2009 when in fact it had $684,694.00 in taxable income that year. Count 5 charges the Kostanians with evading $10,485.00 in federal taxes by falsely claiming that their business had $476,439.00 in taxable income in 2010 when in fact it had $773,289.00 in taxable income that year.
According to the indictment, the Kostanians perpetuated their fraud against the United States by maintaining false books and records for their business in order to conceal their actual corporate income. The brothers presented the false books and records to their corporate accountant, which caused their accountant to file false corporate income taxes with the IRS. The indictment also stated that the Kostanians diverted the unreported income to their own personal use and maintained a separate accounting ledger that showed their business’s actual income.
Today, the Kostanians each entered a guilty plea to Count 1 of the indictment. In their plea agreements, the brothers admitted conspiring with each other to defraud the United States by obstructing the IRS’s ability to collect corporate income taxes owed by their business. Each admitted that they maintained false books and records that they presented to their corporate accountant for use in preparing the business’s income taxes for 2007, 2008, 2009 and 2010. They also admitted maintaining a separate accounting ledger that showed their business’s actual income. The conspiracy was discovered in Jan. 2011 and Feb. 2011, when Hrair Kostanian and Gayk Kostanian discussed the prospect of selling the business with undercover IRS agents and revealed that the business generated more income than reflected on the business’s corporate tax returns. On Feb. 23, 2011, Hrair and Gayk Kostanian showed the undercover IRS agents documents that detailed the business’s additional, unreported income.
In their plea agreements, all three brothers admitted that they evaded an aggregate of $263,600.00 in federal corporate taxes for tax years 2007 through 2010, by intentionally understating their business’s income. In addition, each of the Kostanians admitted evading his own taxes during that same period by understating his personal income. To that end, Hrant Kostanian admitted evading $33,312.00 in individual taxes; Hrair Kostanian admitted evading $20,386.00 in individual taxes; and Gayk Kostanian admitted evading $16,059.00 in individual taxes.
At sentencing, each of the Kostanian brothers faces a statutory maximum sentence of five years in prison and a fine of $250,000.00. Under their plea agreements the Kostanians will be required jointly to pay $263,600.00 in restitution to the IRS. In addition, the brothers will be required to pay restitution to the IRS as follows: Hrant Kostanian, $33,312.00; Hrair Kostanian, $20,386.00; and Gayk Kostanian, $16,059.00. Sentencing hearings have yet to be scheduled.
This case was investigated by the Albuquerque office of IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Reeve L. Swainston.
Sweepstakes Software Providers Sign Agreements Stopping Their Ability to Provide Alleged Illegal Sweepstakes Software to Internet Cafes Throughout the State of North CarolinaRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that the U.S. Attorney’s Office reached agreements with White Sands Technology, LLC, Sierra Software, LLC, TNT Software, LLC, Digital Reveal, LLC, and the principal of Figure 8 Technologies, Inc. These agreements provide that the United States Attorney’s Office for the Eastern District of North Carolina will not prosecute the software companies or their principals, for the use of alleged illegal internet sweepstakes software in internet cafes across the state of North Carolina. These agreements are conditioned upon their agreement that by July 1, 2015, they will no longer have any involvement with sweepstakes in North Carolina involving an entertaining display. The companies supplied hundreds of Internet Cafes in North Carolina:
- White Sands Technology, LLC – Approximately 180 locations
- Sierra Software, LLC – Approximately 175 locations
- TNT Software, LLC, Digital Reveal, LLC – Approximately 40 locations
- Digital Reveal, LLC – Approximately 25 locations
- Figure 8 Technologies, Inc. –Over 200 locations before selling its software in January 2014
Sierra Software, LLC and the principal of Figure 8 Technologies, Inc. agreed that they will not take part in North Carolina in any activities relating to electronic sweepstakes at all. White Sands Technology, LLC, TNT Software, LLC, and Digital Reveal, LLC agreed that they will take no part in any actions relating to sweepstakes relating in any way to the use of an entertaining display in North Carolina. They also agree that to provide notice to the U.S. Attorney’s Office for the Eastern District of North Carolina before taking part in any activities relating to sweepstakes or gambling in North Carolina not covered under the ban. Sweepstakes is defined to include all games where chance predominates.
United States Attorney Thomas G. Walker stated: “We hope this action will be a big step forward in ensuring compliance with North Carolina’s gambling laws. Our office is prepared to assist the state in enforcing large scale violations of the law.”
Mark J. Senter, Branch Head of North Carolina Alcohol Law Enforcement, stated: “Alcohol Law Enforcement is proud to have worked with the U.S. Attorney’s Office for the Eastern District of North Carolina in this case. Sweepstakes machines have been a source of problems for local law enforcement and the community for years. It is our hope this action eliminates this illegal activity.”
Thomas J. Holloman III, Special Agent in Charge, IRS-Criminal Investigation, Charlotte Field Office, stated: “CI stands in support of the USAO’s decision to enter into this non-prosecution agreement. Today’s agreement is consistent with our two-faceted, proactive approach to industry compliance that focuses on investigations and liaison activities essential to the enforcement of tax, money laundering, and related financial crimes to combat illegal activity within the gaming industry, as well as to uncover and shutdown illegal gaming operations. This agreement is a positive step forward in reducing the number of software companies that supply gaming type software crucial to operating internet sweepstakes operations in North Carolina.”
Cumberland County Sheriff Earl R. “Moose” Butler stated: “This announcement marks a major milestone in the long and ongoing fight against illegal gambling. In this case, for several years, video poker machines have been masquerading as sweepstakes. We hope these agreements will stop and deter evasion of North Carolina’s gambling laws. We have long been involved in this fight, and we will not stop until the laws passed by the legislature and the North Carolinians they represent are fully enforced.”
Investigation of this matter was conducted by North Carolina Alcohol Law Enforcement, the Internal Revenue Service, and the Cumberland County Sheriff’s Department in coordination with Assistant United States Attorneys David Bragdon and Joshua Royster.
Strongsville man faces child pornography chargesRead the Press Release
Ross J. Cozens, 68, of Strongsville, was charged with receiving and possessing visual depictions of minors engaged in sexually explicit conduct, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The Indictment charges that from on or about September 22, 2007, through on or about June 16, 2014, in the Northern District of Ohio, Eastern Division, and elsewhere, Cozens knowingly received, using any means and facility of interstate and foreign commerce, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct, and which files had been shipped and transported in and affecting interstate and foreign commerce. The indictment also charges that on December 16, 2014, Cozens possessed a computer, an external hard drive and a USB storage device, each that contained child pornography.
If convicted, the sentence in this case will be determined by the court after consideration of the federal sentencing guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the United States Postal Inspection Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
State Fraud Enforcement Official Arrested, Charged with Wire FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LYNWOOD PATRICK, JR., 39, of East Hartford, was arrested today on a federal criminal complaint charging him with wire fraud in connection with his submission of a fraudulent application for a personal mortgage modification.
PATRICK was arrested this morning at his residence. He appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and was released on a $150,000 bond.
According to the criminal complaint, PATRICK is employed as the Director of Investigations for the State of Connecticut Department of Social Services, Office of Quality Assurance.
The complaint alleges that, from approximately November 2012 through May 2013, PATRICK applied for a mortgage modification under the Making Home Affordable program, a federal initiative designed to assist homeowners who have experienced a decline in income access secure loans at lower rates. When applying for mortgage relief through JP Morgan Chase, PATRICK fabricated State of Connecticut paystubs and lied about his assets in order qualify for the program. Specifically, PATRICK claimed total assets of $500 in one checking account to show that he had experienced a loss of income causing a hardship when, in fact, he had thousands of dollars spread out over multiple accounts at several institutions and his rate of pay had not diminished.
In his capacity as the Director of Investigations, PATRICK is responsible for coordinating and conducting activities to prevent, detect and investigate fraud, waste, abuse and overpayments in the Connecticut Medicaid, Care4Kids, Supplemental Nutritional Assistance and Connecticut Energy Assistance Programs. PATRICK’s salary is partially paid for by the federal Centers for Medicare and Medicaid Services, which is a federal agency within the U.S. Department of Health and Human Services.
The criminal complaint charges PATRICK with wire fraud, which carries a maximum term of imprisonment of 20 years.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Connecticut Public Corruption Task Force, which includes the U.S. Department of Health and Human Services – Office of Inspector General, U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Bureau of Investigation, U.S. Postal Inspection Service and Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
Citizens are encouraged to report to corruption to the Connecticut Public Corruption Task Force by calling 1-800-CALL-FBI (1-800-225-5324).
St. Louis County Man Sentenced on Federal Firearms ChargesRead the Press Release
St. Louis, MO – TODD SCOTT, St. Louis, Missouri, was sentenced to 10 years in prison for illegally possessing a firearm.
According to the plea agreement, Scott was found by St. Louis police officers in possession of a .38 special revolver on November 12, 2013. As a convicted felon, including two prior federal convictions for possession with the intent to distribute heroin and a weapons charge, Scott was prohibited from possessing a firearm.
Scott pled guilty to possessing a firearm as a convicted felon in February. He appeared today for sentencing before Judge Stephen N. Limbaugh, Jr.
This case was investigated by the St. Louis Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
Six Defendants Convicted in Mortgage Fraud Scheme After 12-Day TrialRead the Press Release
SACRAMENTO, Calif. — After a 12–day trial, a federal jury today found six defendants guilty of all counts of wire fraud in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
Irina Markevich, 30, of Rio Linda; Anatoliy Markevich, 35, of Sacramento; and Marina Pukhkan, 53, of Rio Linda, were each convicted of two counts of wire fraud. Daniil Markevich, 38; his wife Svetlana Markevich, 38, both of Escondido; and Alex Markevich, 40, of Rio Linda, were each convicted on one count of wire fraud.
According to evidence presented at trial, between February 2007 and March 2008, the defendants each obtained home loans using fraudulent loan applications and related documents that contained false information about their income, assets, bank accounts, and intent to occupy the residences. The proceeds of the fraud scheme were derived from inflated purchase prices and payments for fake construction work that never in fact took place.
All together the defendants obtained over $5 million in home loans for six properties in Roseville, Sacramento, and West Sacramento, and then made only between three and six payments before letting the loans go into default. Although their loan applications claimed that they individually made approximately $190,000 to $426,000 per year, the defendants’ tax returns showed that they actually made only between about $3,000 and $22,000 in 2007, the year they purchased the homes.
Each of the properties purchased by the defendants was foreclosed upon within about one year of the purchase date. For acting as straw buyers in this mortgage fraud scheme, the defendants were collectively compensated hundreds of thousands of dollars and purchased such things as a Lincoln Navigator and a limousine with the proceeds. The total fraud proceeds to them, other family members, and other participants in the scheme was in excess of $700,000.
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Christopher S. Hales and Special Assistant United States Attorney E. Kate Patchen are prosecuting the case.
All of the defendants are scheduled to be sentenced by United States District Judge John A. Mendez on August 11, 2015. Each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Remlap Man Sentenced to 25 Years in Prison for String of 2012 Armed RobberiesRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Remlap man to 25 years in prison for a string of armed robberies in northeastern Jefferson County in October 2012, including one in which a store customer was shot. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven Gerido announced the sentence.
U.S. District Judge Karon O. Bowdre sentenced JAMEY LEE MATTHEWS, 41, to 25 years in prison, in accordance with a binding plea agreement Matthews entered with the government. The judge also ordered Matthews to pay $202,000 in restitution for medical expenses to the man he shot, and $6,000 to the stores he robbed.
Matthews pleaded guilty in October 2014 to four counts of robbery under the federal Hobbs Act, which involves robbery affecting interstate commerce, one count of armed pharmacy robbery, and one count of discharging a firearm during a crime of violence.
He committed the Hobbs Act robberies at Mike's Quick Stop on the Pinson Valley Parkway on Oct. 11, 2012, Dollar General in Trafford on Oct. 15, 2012, Winn Dixie supermarket on Old Springville Road and Roger's Gas Station in Clay, both on Oct. 19, 2012. He committed the armed pharmacy robbery at Tyner's Pharmacy on Chalkville Road in Birmingham on Oct. 15, 2012. Matthews discharged a firearm during the robbery at Roger's Gas Station.
According to Matthews' plea agreement, he brandished a firearm during all the robberies, but fired a gun as he ran out of Roger's and employees and customers from the gas station chased him. A customer was struck five times and testified during the sentencing hearing that he still has two pellets in his hip.
Authorities charged Matthews with the robberies after he was found, seriously injured, beneath a remote bluff in Remlap on Oct. 20, 2012. After he was flown to UAB for treatment, Blount County Sheriff's deputies found a pick-up truck at the top of the bluff that was registered to Matthews' mother, according to the plea agreement. Four firearms, a customer's check written to Roger's on Oct. 19, and pill bottles from Tyner's Pharmacy were found in the truck. Ballistics tests later matched shell cases recovered from the Roger's robbery to a Rossi .410-caliber shotgun found in the truck, the plea agreement says.
The FBI and ATF investigated the case, which Assistant U.S. Attorney John B. Felton prosecuted.
###
Rathdrum Man Sentenced to Prison for Possession of Child Pornography ChargeRead the Press Release
COEUR D'ALENE - Randy James Hirst, 58, of Rathdrum, Idaho, was sentenced yesterday to 36 months in prison for possessing child pornography, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Hirst to pay $3,000 to a child in one of the images Hirst possessed, and to serve ten years of supervised release upon his release from prison. Hirst pleaded guilty to the charge on January 21, 2015.
According to the plea agreement, Hirst’s computer was identified as making child pornography available in an internet based peer to peer network. A U.S. Secret Service agent discovered Hirst’s online activity and in July 2013, a federal search warrant was served on Hirst’s Rathdrum residence. Investigators seized Hirst’s computers and later found that they contained nine videos and three-hundred images of children engaged in sexually explicit acts. A forensic analysis revealed that Hirst used search terms to find sexually explicit images of preteen girls. During the sentencing hearing, Hirst admitted that he committed the crime and apologized to the Court and his family.
The case was investigated through the collaborative effort of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), United States Secret Service, United States Border Patrol, and United States Customs and Border Protection. These agencies participate in the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icactaskforce.org.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Previously Convicted Felon Sentenced to 92 Months in Federal PrisonRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Matthew Edward Baumrucker, age 31, of Spokane, Washington was sentenced today after having previously pled guilty on January 8, 2015 to being a Previously Convicted Felon in Possession of a Firearm. Chief United States District Court Judge Rosanna Malouf Peterson sentenced Baumrucker to a 92 month term of imprisonment, to be followed by a three year term of court supervision following he is released from Federal prison.
According to court records, on March 12, 2014, Detectives with the Spokane County Sheriff’s Office were looking for Baumrucker, as he had several active warrants for his arrest. Baumrucker was ultimately located in a motel in Spokane Valley, Washington. Detectives made phone contact with Baumrucker, who agreed to come out of his motel room. After the call, surveillance officers located outside of the motel building saw Baumrucker place a handgun on the air conditioner unit outside of the window to his room. After he was arrested, Baumrucker admitted he possessed the gun, but denied it was his.
Michael C. Ormsby started, "Matthew Baumrucker has a significant criminal history, including a prior federal felony conviction. He was a righteous target and I commend the Spokane Police Department, the Spokane Sheriff’s Office, and the FBI for their efforts in making this a successful prosecution. The public must understand that every previously convicted felon who possesses a firearm and/or even a single round of ammunition faces serious consequences when caught. The 92 month sentence meted out today is just one such example."
This investigation was conducted by the Federal Bureau of Investigation, the Spokane Sheriff’s Office, and the Spokane Police Department. Caitlin A. Baunsgard, an Assistant United States Attorney for the Eastern District of Washington, prosecuted the case.
Plummer Man Sentenced for Breaking Cousin’s JawRead the Press Release
COEUR D'ALENE - Desmond J. Seyler, 26, of Plummer, Idaho, was sentenced yesterday to 15 months in prison for assault resulting in serious bodily injury, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Seyler to serve three years of supervised release, and to pay $20,008.27 in restitution. Seyler pleaded guilty on August 12, 2014.
According to the plea agreement, Seyler admitted that he fractured his cousin’s jaw when he hit her in the face. Seyler was intoxicated at the time he committed the crime. he case was prosecuted in federal court because the offense happened on the Coeur d'Alene Indian Reservation and both Seyler and his victim are members of federally recognized tribes. During sentencing Judge Winmill recognized the defendant’s efforts in engaging in treatment and embracing sobriety.
The case was investigated by the Coeur d’Alene Tribal Police and the Federal Bureau of Investigation (FBI).
Pharmacy Company Agreed to Pay $5 Million to Settle Claims That It Gave Gift Cards and Waived Copayayments for Medicare and Medicaid Patients in Violation of the Anti-Kickback StatuteRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that Physician Pharmacy Alliance, Inc., (“PPA”), agreed to pay $5 Million to settle claims that, under prior ownership, PPA gave improper gift cards in order to induce referrals or enrollments of Medicare and Medicaid patients, and routinely waived copayments of Medicare and Medicaid patients, in violation of the Anti-kickback statute.
“This settlement demonstrates our commitment to protect taxpayer money and the integrity of Medicare and Medicaid health care programs. This case underscores for health care providers that if you commit fraud by giving gift cards or routinely waiving copayments in order to induce referrals, you will be liable for substantial damages and penalties under the Anti-kickback statute,” stated U.S. Attorney Walker.
Health Care Providers are prohibited from giving illegal remunerations under the Anti-kickback statute, which includes giving cash equivalents, such as gift cards, and routinely waiving copayments. PPA provides pharmacy services through home delivery to Medicare and Medicaid patients in North Carolina. PPA’s current owners agreed to this settlement for damages and penalties based upon allegations of PPA practices that occurred prior to their purchase of the business in 2011. The claims resolved by civil settlement are allegations only; there has been no determination of liability.
The settlement was the result of coordinated effort by the U.S. Attorney’s Office for the Eastern District of North Carolina, the United States Department of Health and Human Services Office of the Inspector General, and the North Carolina Department of Justice's Medicaid Investigations Division. Assistant United States Attorneys Neal Fowler and William Gilmore, along with North Carolina Department of Justice Attorneys Stacy Race and Michael Heavner, directed the investigation and negotiated the settlement.
Palos Hills Felon Charged with Illegally Possessing and Dealing Firearms; 10 Guns SeizedRead the Press Release
CHICAGO ― Ten assorted pistols, rifles, shotguns, and a revolver have been seized and a Palos Hills man is facing federal firearms charges as a result of an investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Over the course of the investigation, the defendant illegally sold eight firearms to a confidential informant, and two additional firearms were seized from the defendant’s residence at the time of his arrest in March 2015.
Steven Riley, 23, of Palos Hills, was charged yesterday in a seven count indictment by a federal grand jury on charges of being a felon-in-possession of firearms and dealing firearms without a federal license. Riley was arrested on a federal complaint in March 2015, and remains on bond. Riley will be arraigned on a date to be determined by U.S. District Court Judge Virginia M. Kendall.
According to the complaint, beginning in October 2014 through February 2015, Riley sold numerous firearms to a confidential informant (CI). In recorded conversations between Riley and the CI, Riley discussed the importance of removing the serial numbers so that the firearms could not be traced. Riley also supplied the CI with ammunition at three of the five controlled purchases; one of the guns purchased by the CI was loaded with ammunition.
According to the charges, the CI purchased eight firearms in total from Riley; four rifles, three shotguns, and a revolver, many of which had obliterated serial numbers. Riley is also charged with illegal possession of two loaded semi-automatic pistols recovered at his residence during the execution of a search warrant. In addition, the indictment seeks forfeiture of 1,872 rounds of ammunition seized from his residence on the day of his arrest.
Being a felon-in-possession of a firearm carries a maximum sentence of 10 years in prison and a $250,000 fine. Dealing firearms without a federal license carries a maximum sentence of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Carl Vasilko, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The Hickory Hills Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Elizabeth Pozolo.
Criminal complaints are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Palm Coast Man Indicted on Federal Charge of Failure to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Stephen Paul Cotton (43, Palm Coast) has been indicted for failing to register as a sex offender after traveling from Florida to North Carolina. If convicted, he faces up to 10 years in federal prison. Cotton was arrested in Suwanee, Georgia on April 11, 2015.
According to the indictment, on or about January 6, 1999, Cotton was convicted of committing a lewd and lascivious act on a child in Manatee County, Florida. Subsequent to his conviction, and between July 2, 2012 and December 19, 2014, he traveled from Florida to North Carolina and failed to register as a sex offender, as required by the Sex Offender Registration and Notification Act.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders. This case was investigated by the United States Marshals Service, the Suwanee (Georgia) Police Department, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Office of Justice for Victims of Overseas Terrorism Celebrates 10-Year AnniversaryRead the Press Release
The Justice Department’s Office of Justice for Victims of Overseas Terrorism (OVT) today celebrates its 10-year anniversary of providing specialized assistance to U.S. citizen victims and their families when they are injured or killed in terrorist attacks abroad, announced Assistant Attorney General for National Security John P. Carlin.
OVT was founded on May 6, 2005, by then-Attorney General Alberto Gonzales. It is now part of the Justice Department’s National Security Division, which was created in 2006. OVT’s primary responsibility to Americans who are victims of overseas terrorism is to work to ensure that investigation and prosecution remain a high priority. OVT also updates victims and their families on the progress of any criminal investigation and prosecution, and ensures that the rights of victims and their families are treated with honor and respect by criminal justice systems around the world. The office has worked to provide support to U.S. victims of terrorist attacks in many nations, including Afghanistan, Colombia, Germany, Israel, Iraq, Indonesia, India, Kenya, Pakistan and the Philippines, among others.
“The Office of Justice for Victims of Overseas Terrorism serves as an advocate for our citizens impacted by terrorism as they navigate foreign criminal justice systems in pursuit of accountability,” said Assistant Attorney General Carlin. “I applaud the work they have done over the last decade to aid hundreds of victims and their families, and look forward to continuing to support their office as they provide such critical resources to American victims of terrorism overseas and their families.”
“OVT is truly a groundbreaking office in the Department of Justice,” said Director Heather Cartwright of OVT. “Victims themselves identified the need and called for the creation of an office devoted to advocating for justice for U.S. citizens who suffer terrorist attacks in foreign countries. Ten years after its creation, OVT has developed an advocacy program to support these victims, and looks forward to providing even more comprehensive support and services in the future.”
For more information on the important work done by OVT every day, please visit their website. If you are a U.S. citizen victim of international terrorism or a victim’s family member and you seek information on foreign criminal justice proceedings, OVT can assist you. Please contact OVT at [email protected].
Norristown Bookmaker Pleads to Tax ChargesRead the Press Release
PHILADELPHIA - Jacob Corropolese, Sr., 65, of Norristown, PA, pleaded guilty today to tax charges in connection with his sports bookmaking operation. Corropolese admitted to filing false tax returns when he ran a sports bookmaking operation. Corropolese received more than $500,000 in proceeds from bettors but did not report any income from his bookmaking activities on his federal income tax returns for 2010 and 2011. As a result he substantially underreported his income in each year.
U.S. District Court Judge Jan E. DuBois scheduled a sentencing hearing for DATE. Corropolese faces a maximum possible sentence of six years in prison, one year of supervised release, a $200,000 fine, and restitution to the IRS.
The case was investigated by the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Nancy E. Potts.
Muskogee Man Sentenced to 120 Months for Possession of Firearm with Obliterated Serial NumberRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that STEVEN ALEX HUGHART, age 38, of Muskogee, Oklahoma, was sentenced to 120 months imprisonment, followed by 3 years of supervised release for being a Felon in Possession of a Firearm, in violation of Title 18, United States Code, Section 922(g)(1) and Possession of a Firearm with a Removed, Obliterated, or Altered Serial Number, in violation of Title 18, United States Code, Sections 922(k) and 924(a)(1)(B).
The charges arose from an investigation by the Muskogee Police Department and the Federal Bureau of Investigation. The defendant was indicted in September, 2014 and pled guilty in January, 2015.
The Indictment alleges that on or about February 13, 2014, within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, one .380 Jimenez Arms handgun, bearing an obliterated serial number, which had been shipped and transported in interstate commerce.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
First Assistant United States Attorney Doug Horn represented the United States.
More Charges Against Christan County Reserve Deputy in $14.5 Million Investment Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a reserve deputy sheriff for Christian County, Mo., was indicted by a federal grand jury today on additional charges related to a $14.5 million investment fraud scheme.
Marty Layne Brickey, 44, of Republic, Mo., was charged in a 30-count superseding indictment returned by a federal grand jury in Springfield, Mo. Today’s superseding indictment replaces an indictment that was returned on June 10, 2014, and adds additional charges.
Brickey has been commissioned as a reserve deputy sheriff in Christian County, Mo., since 2012.
Including three counts of wire fraud and six counts of money laundering contained in the original indictment, today’s indictment charges Brickey with a total of 10 counts of wire fraud, 13 counts of money laundering and seven counts of failure to pay employment taxes.
According to the indictment, Brickey owned and operated several companies that marketed, promoted and managed software development. Interzone Entertainment, LLC, had offices located in Springfield, Chicago, Ill., Perth, Australia, Belo Horizonte, Brazil, and in China before it ceased operations in February 2010. Big Collision Games, LLC, had offices in Texas and in Dublin, Ireland. MasterTitle Games, Inc., and Spectacle Games maintained offices in Austin, Texas. Brickey also owned Zoonik USA, Inc., and Studio Avenue, Inc.
The federal indictment alleges that Brickey defrauded investors of more than $14.5 million in a scheme that operated from January 2008 to January 2014. Brickey allegedly told victim investors that their investment funds would be used to bring a video game to market and they would share in the profits. Brickey made false statements to potential investors regarding the amount of capital he had raised from other investors, the indictment says, and how close his companies were to bringing a product to market.
Brickey allegedly told potential investors he was working with, or close to receiving investments from, various celebrities and important persons, including Shaquille O’Neal, Kanye West, Kim Kardashian, the Sheik of Abu Dhabi and various corporate entities.
In reality, the indictment says, Brickey used a substantial amount of investor funds to pay his personal expenses unrelated to the development and marketing of any video game, and to repay prior investors who had demanded the return of their money. None of Brickey’s companies brought a video game to market, and the total revenue of Brickey’s companies during this time period was approximately $2,281.
Brickey is charged with seven counts of failure to pay employment tax (including federal income taxes, Medicare and Social Security taxes of employees) related to his role as president of Interzone from August 2006 to December 2011.
Between April 2009 and June 2011, the indictment says, Brickey caused Interzone to make hundreds of thousands of dollars of expenditures for his personal benefit while, at the same time, failing to pay over to the IRS the payroll tax due from Interzone’s employees’ paychecks. Interzone allegedly failed to account for and pay over approximately $102,813 in payroll taxes during those seven quarters.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation and the FBI.
Missouri Man Sentenced for Conspiracy to Commit Mail FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ROGER NADEAU, age 51, a resident of Linn, Missouri, was sentenced today for his role in a scheme to defraud the Louisiana Workforce Commission of unemployment benefits. NADEAU previously pled guilty to conspiracy to commit mail fraud.
U.S. District Judge Helen G. Berrigan sentenced NADEAU to one year probation and a $500 fine. Additionally, NADEAU was ordered to pay $2,470 in restitution to the Louisiana Workforce Commission (“LWC”).
According to the court records, beginning at a time unknown, but no later than on or about September 24, 2009, and continuing through on or about January 11, 2014, NADEAU along with CHARLES MIZELL, JR., TERRY CASTILOW, WILLIAM DARRYL KING, DAVID LOWE, JAMES CREEL, JERRY ATHEY, TENILLE NIELSON, and JACQUELINE MYERS conspired to defraud the LWC of money and property by means of false and fraudulent representations, pretenses and promises, well knowing the representations, pretenses and promises were false, and mailed and caused to be mailed through the United States Postal Service unemployment (“UI”) benefit claim forms for the purpose of obtaining UI benefits to which they were not entitled. Specifically, at the time CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU applied for UI benefits and made weekly representations to LWC that they were unemployed and not getting paid, MIZELL, JR., actually employed them at Chamico, Inc., a Bogalusa construction company that concentrates on public, municipal, and industrial contracts.
MIZELL, JR. was the President of Chamico and, according to the court records, asked NADEAU and his other employees to fraudulently file for unemployment so that he would not have to pay their full salaries during tough economic times for his business. NADEAU and the other employees would each get cash from Chamico during the weeks they were claiming unemployment benefits reporting that they were not working and not getting any income from work.
U.S. Attorney Polite praised the work of the Department of Labor-OIG and the Federal Bureau of Investigation with assistance from the Louisiana Workforce Commission in investigating this case. Assistant United States Attorney Emily K. Greenfield was in charge of the prosecution.
Member of the Jenifer Drug Trafficking Organization Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U. S. District Judge Richard D. Bennett sentenced William Hegie, age 54, of Baltimore, to 10 years in prison followed by five years of supervised release for conspiring to distribute five or more kilograms of cocaine, in connection with his participation in the Jenifer drug trafficking organization (Jenifer DTO).
The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Commissioner Anthony W. Batts of the Baltimore Police Department; and Chief James W. Johnson of the Baltimore County Police Department.
According to his plea agreement, from September 2012 to October 2014, the Jenifer DTO supplied Hegie and others with kilogram-quantities of cocaine for distribution in and around the Baltimore-Washington metropolitan areas. Hegie became a member of the conspiracy to distribute more than five kilograms of cocaine.
The Jenifer DTO obtained its cocaine from suppliers in or around Houston, Texas. The Jenifer DTO would transport money hidden in secret compartments in “courier vehicles” from Baltimore to Houston. The cocaine was then transported from Houston to Baltimore in the Jenifer DTO’s courier vehicles. In July 2013, a courier vehicle for the Jenifer DTO was intercepted in Arkansas that contained approximately 23 kilograms of cocaine hidden in a secret compartment. Between August 2013 and October 2014, approximately 30 shipments of cocaine, concealed in secret compartments in the Jenifer DTO’s courier vehicles, were made to the Jenifer DTO. On October 9, 2014, approximately 27 kilograms of cocaine were seized from one of the Jenifer DTO’s courier vehicles.
Hegie agreed that he was a member and co-conspirator of the Jenifer DTO, which was responsible for trafficking no less than 750 kilograms of cocaine from Houston to Baltimore from August 2013 to October 2014.
United States Attorney Rod J. Rosenstein praised the DEA, IRS Criminal Investigation and Baltimore City and County Police Departments for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys John W. Sippel, Jr. and Scott A. Lemmon, who are prosecuting the case, and expressed his appreciation to the United States Attorney’s Offices for the Southern District of Texas and the Southern District of New York for their assistance in this Organized Crime Drug Enforcement Task Force case.
Manhattan U.S. Attorney Settles Civil Fraud Claims Against Vascular Surgery Clinic and Surgeon for Fraudulently Billing Medicare for Nonreimbursable Vascular Surgery ProceduresRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has settled civil fraud claims under the False Claims Act against MATTOO & BHAT MEDICAL ASSOCIATES, P.C. (“MBPC”) and DR. FENG QIN (“DR. QIN”) related to MBPC’s submission of fraudulent claims for reimbursement by Medicare for vascular surgical procedures that are not covered under Medicare. In connection with the settlement, which was approved by U.S. District Judge Louis L. Stanton on May 1, 2015, the defendants agreed to pay a total of $1,150,000 to resolve their liabilities.
Manhattan U.S. Attorney Preet Bharara said: “As they admitted, Mattoo & Bhat Medical Associates, P.C., and Dr. Feng Qin performed and billed Medicare for surgery procedures in violation of Medicare’s billing rules. We will continue to work to protect the public’s money from providers who try to skirt Medicare billing rules for their own profit.”
HHS-OIG Special Agent in Charge Scott Lampert said: “Performing invasive procedures that do not qualify for Medicare reimbursement and then billing Medicare for them undermines the financial integrity of the Medicare program. This settlement is another example of OIG’s commitment to protecting our beneficiaries and taxpayers from such abusive practices.”
According to the complaint filed in Manhattan federal court:
Patients with end-stage renal disease (“ESRD”), who are covered by Medicare, regularly require and receive dialysis treatments. Vascular surgeons may provide vascular access services to these patients, such as creation and maturation of fistulas, a port in the patient’s arm to obtain access to the patient’s circulatory system, through which dialysis is done. In addition, when clinically indicated, such surgeons may provide fistulagrams, a radiological procedure in which dye is injected into the patient’s vein or artery to visualize the port and surrounding blood vessels, and angioplasties, in which wires and balloons are inserted into veins or arteries that have narrowed in order to restore the patient’s blood flow. Routine monitoring of a dialysis patient’s access site, however, is typically done by the patient’s nephrologist and the dialysis nurses and technicians, who are reimbursed by Medicare for the ongoing monitoring and surveillance.
According to Medicare billing rules in New York State, monitoring of a dialysis patient’s access site does not require vascular surgery procedures, such as fistulagrams and angioplasties, and these procedures are not reimbursable unless the patient has specific clinical problems, such as significant difficulty receiving dialysis properly. Routinely performing fistulagrams and angioplasties where there is no supporting clinical indication is not reimbursable by Medicare. The rules also state that angioplasties are reimbursed by Medicare only if, in addition to the clinical findings required to support a fistulagram, there is evidence that the patient’s blood vessel has a restriction greater than 50% of the vessel’s diameter.
MBPC operated two office-based surgical offices in Manhattan and Queens, which operated under the trade name “AV Care,” from December 2010 to April 2012, and DR. QIN worked primarily at MBPC’s Manhattan location. AV Care’s patients were ESRD patients undergoing dialysis treatment. As a regular practice, AV Care routinely scheduled patients for fistulagrams and angioplasties as many as three months in advance, and MBPC surgeons, including DR. QIN, performed these fistualgrams as a matter of routine even if the patient presented without a clinical reason. Furthermore, from time to time, DR. QIN performed angioplasties on AV Care patients where the patient information and records did not support the presence of a restriction greater than 50% of the diameter of the patient’s blood vessel. MBPC wrongly billed Medicare for these procedures, which were excluded from Medicare coverage by the applicable rules.
As part of today’s settlement, MBPC and DR. QIN admitted that they regularly performed, and billed Medicare for, vascular surgery procedures done only for surveillance purposes, in violation of the Medicare billing rules. MBPC agreed to pay $1,000,000 and Dr. QIN agreed to pay $150,000 to resolve their respective liabilities for this conduct. In addition, MBPC and DR. QIN entered into integrity agreements with HHS-OIG, through which they agreed to implement certain compliance measures and submit to monitoring by HHS-OIG.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Rebecca C. Martin and Jean-David Barnea are in charge of the case.
AVCare relator release
Feng Qin stip and order
Mattoo+Bhat stip and order IIManhattan U.S. Attorney Files Suit Against Plastic Surgery Practice and Surgeon for Discriminating Against Patients with DisabilitiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the filing of a lawsuit against the SPRINGFIELD MEDICAL AESTHETIC P.C. d/b/a ADVANCED COSMETIC SURGERY OF NEW YORK (“ADVANCED COSMETIC”), and EMMANUEL O. ASARE, M.D. (“ASARE”), a plastic surgery practice and surgeon in that practice, alleging discrimination on the basis of disability in violation of Title III of the Americans with Disabilities Act of 1990 (“Title III of the ADA”). ADVANCED COSMETIC, which has offices in Manhattan and Long lsland, and ASARE are alleged to have unlawfully discriminated against a prospective patient (the “Patient”) on the basis of his disability by refusing to provide services to the Patient, without even conducting a medical assessment of his condition, because the Patient is HIV positive.
Manhattan U.S. Attorney Preet Bharara said: “Medical providers are not free under the law simply to refuse their services to a person with a serious medical condition like HIV. Individuals with disabilities are entitled to the same medical services as everyone else, and there can be no room in the medical profession for the kind of discrimination alleged in this lawsuit.”
Title III of the ADA prohibits discrimination by doctors, lawyers, hospitals, restaurants, retail stores, hotels, private transportation providers, and other private businesses and nonprofit organizations that provide services to the public. All of these entities are prohibited from excluding individuals with disabilities from their services and programs because they have a serious medical condition, such as HIV.
According to the Complaint filed in Manhattan federal court, the Patient is a cancer survivor living with HIV. In July 2014, the Patient scheduled an appointment at ADVANCED COSMETIC to have an initial consult regarding his gynecomastia, an inflation of breast tissue that is a common side effect of both cancer treatments and anti-retroviral HIV medications. On or about July 14, 2014, the Patient met with ASARE at ADVANCED COSMETIC’s Manhattan offices. Upon learning that the Patient was living with HIV, ASARE immediately told the Patient that ADVANCED COSMETIC did not provide services to those with HIV, and the Patient was asked to leave. Subsequently, ASARE and ADVANCED COSMETIC stated that it is their policy not to provide services to people living with any of a host of ailments, including HIV, cancer, and diabetes.
The Complaint filed today seeks to require ADVANCED COSMETIC and ASARE to take the necessary steps to prevent and remedy any future discrimination on the basis of disability, particularly against those with serious medical conditions such as HIV, cancer, and diabetes, and pay compensation to the victims of discrimination and a civil penalty.
This case is being handled by the Office’s Civil Rights Unit. Assistant United States Attorney Arastu K. Chaudhury is in charge of the case.
To file a complaint alleging that any place of public accommodation within the Southern District of New York is not accessible to persons with disabilities, use the Civil Rights Complaint Form available on the United States Attorney’s Office’s website, www.usdoj.gov/usao/nys. Complaints should be sent to:
U.S. Attorney’s Office, Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York, 10007
Attention: Chief, Civil Rights Unit
US v. Asare Complaint with Exhibits
Man Who Was Caught with Almost 100 Pounds of Meth and Marijuana in Vehicle Sentenced to over 30 Years in PrisonRead the Press Release
LAS VEGAS, Nev. – A Topeka, Kansas man who was pulled over by Nevada Highway Patrol Officers in 2013, and found to be in possession of 24 pounds of methamphetamine and 74 pounds of marijuana, was sentenced today to 365 months in prison and 10 years of supervised release, announced U.S. Attorney Daniel G. Bogden, for the District of Nevada.
Paul Edward Davis, 49, who was convicted by a jury in Las Vegas on Dec. 2, 2014, of one count of possession of methamphetamine with the intent to distribute and one count of possession of marijuana with the intent to distribute, was sentenced by U.S. District Judge Andrew P. Gordon.
“This defendant was transporting large quantities of methamphetamine and marijuana,” said U.S. Attorney Bogden. “We work with our Nevada High Intensity Drug Trafficking Area (HIDTA) program and with state and local law enforcement on several task forces to apprehend and prosecute federally drug traffickers who are traveling through our Nevada communities with significant quantities of drugs for distribution.”
According to the court records, on July 27, 2013, at approximately 9:15 p.m., a Nevada Highway Patrol Officer pulled Davis’ SUV over for speeding on I-15 northbound near Las Vegas at Mile Marker 64. The trooper immediately observed the odor of marijuana coming from the inside of the vehicle, and a law enforcement canine dog alerted to the presence of a controlled substance. During a search of the vehicle, officers located three cellular phones, numerous air fresheners, and several large canvas bags in the rear area of the vehicle containing approximately 24 pounds of methamphetamine and 74 pounds of marijuana. Testimony at trial established that the value of the drugs was over $1 million.
Davis was on federal supervised release for a drug trafficking conviction when he was pulled over for this offense. In 2000, he had been convicted by a federal jury in Topeka, Kan., of distributing crack cocaine within 1,000 feet of a university and sentenced to 17½ years in prison and 10 years of supervised release. After serving 11 years, he was re-sentenced and released from prison due to the amendments that were made to the federal sentencing guidelines which reduced the penalties for persons convicted of crimes involving crack cocaine.
The case was prosecuted by Assistant U.S. Attorney Amber M. Craig and investigated by the DEA, Nevada Highway Patrol, and Las Vegas Metropolitan Police Department.
Luzerne County Man Charged with Receiving and Distributing Child PornographyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Pittston man was indicted on April 28, 2015, by a federal grand jury for receiving and distributing child pornography.
According to United States Attorney Peter Smith, the grand jury alleges that Steven Wolfe, age 25, used a computer and other electronic devices to download and distribute images of child pornography during November 2013 through February 4, 2015. Wolfe is currently in Luzerne County Prison and will be appearing before U.S. Magistrate Judge Karoline Mehalchick on Friday, May 8, 2015.
The charge stems from an investigation by Homeland Security Investigations, the Luzerne County District Attorney’s Office, and Pittston Police.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Local Man Sentenced for Drug Trafficking OffensesRead the Press Release
PANAMA CITY, FLORIDA – Jonathon Luke Holder, 23, of Panama City Beach, was sentenced to 7 years and 8 months in federal prison by United States District Judge Richard Smoak for possessing methamphetamine with intent to distribute and for possessing a firearm in furtherance of a drug-trafficking crime. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Holder admitted that, on January 7, 2015, he travelled from Bay County, Florida, to the Atlanta, Georgia, area to purchase methamphetamine that he intended to distribute. When Holder left Bay County to travel to the Atlanta area, he took with him a loaded Ruger 9mm pistol for his protection and for the protection of his drug-trafficking activities.
Holder returned to the Bay County area early the next morning. Holder was arrested as he exited the vehicle he was driving with a small Sentry safe. Inside the safe, Holder had approximately 1010 grams of a mixture and substance containing methamphetamine and the pistol.
This was Holder’s third trip to the Atlanta area to purchase methamphetamine for distribution in the Bay County area. In the first trip, Holder purchased and distributed one pound of methamphetamine, and in the second trip, Holder purchased and distributed two pounds of methamphetamine.
The case was investigated by the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorney Gayle E. Littleton.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Leetonia man charged with sexually exploiting minorsRead the Press Release
Lucas J. Ippolito, 41, of Leetonia, Ohio, was charged with transportation of a minor to engage in illegal sex, sexual exploitation of a child and receipt, distribution and possession of sexually exploitive visual depictions of minors, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The indictment charges that on or about January 23, 2015, Ippolito knowingly transported an individual who had not attained the age of 18 years, that is a 15-year-old girl, in interstate commerce from Pennsylvania to Ohio, with the intent that such 15-year-old girl engage in sexual activity for which Ippolito could be charged with a criminal offense.
The indictment also charges that on or about on or about February 14, 2015, March 14, 2015 and April 3, 2015, Ippolito knowingly transported an individual who had not attained the age of 18 years, that is a 13-year-old girl, in interstate commerce from Pennsylvania to Ohio, with the intent that such 13-year-old girl engage in sexual activity for which he could be charged with a criminal offense.
The indictment also charges that between December 3, 2014 and March 9, 2015, Ippolito persuaded, induced, enticed and coerced the two minors to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
The indictment also charges that from on or about January 6, 2015, through on or about April 7, 2015, Ippolito knowingly received and distributed, using any means and facility of interstate and foreign commerce, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
Lastly, the indictment charges that on or about March 30, 2015, Ippolito knowingly possessed three computers and a cellular phone, each containing child pornography, and at least one image involved in the offense involved a prepubescent minor or a minor who had not attained 12 years of age.
If convicted, the sentence in this case will be determined by the court after consideration of the federal sentencing guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Ohio Bureau of Criminal Investigation and the Youngstown office of the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
LAPD Officer Indicted for Attempting to Smuggle Mexican Citizen in Trunk of His CarRead the Press Release
SAN DIEGO – Los Angeles police Officer Carlos Curiel Quezada, Jr., and his girlfriend, Angelica Godinez, were indicted by a federal grand jury today on charges that they attempted to smuggle a Mexican citizen into the United States in the trunk of Quezada’s car at the Otay Mesa border crossing in March.
According to court documents, Quezada drove his 2014 Nissan Juke, with Godinez as the front seat passenger, into the United States through the Otay Mesa Port of Entry on March 14, 2015, at about 6:30 p.m. They presented their U.S. passports and told a Customs and Border Protection Officer they had nothing to declare. The officer decided to refer them aside for a more intensive inspection.
During the inspection, officers examined the car with the Z-Portal, a non-intrusive imaging device similar to an X-ray, and detected something unusual in the rear cargo area of the vehicle. Antanasio Perez Avalos, a 26-year-old Mexican national, was found in a compartment in the spare-tire area. All three individuals were then taken into custody and interviewed.
Two days later, Quezada and Godinez were charged in a one-count complaint with Bringing in Illegal Aliens without Presentation. On March 19, 2015, the government’s motion to dismiss the complaint, without prejudice, was granted.
The pair was indicted by a federal grand jury today on the same charge - Bringing in Illegal Aliens without Presentation. Quezada is scheduled to be arraigned on the indictment May 7 at 2:00 p.m. before U.S. Magistrate Judge William Gallo and Godinez on May 12 at 9:00 am before U.S. Magistrate Judge Barbara L. Major.
DEFENDANTS Case Number: Carlos Curiel Quezada Jr. Age: 34 Los Angeles, California Angelica Godinez Age: 31 CHARGESBringing in Illegal Aliens without Presentation – Title 8 United States Code Sec. 1324(a)(2)(B)(iii)
INVESTIGATING AGENCIES
Maximum penalty: 10 years’ imprisonment and $250,000 fineU.S. Customs and Border Protection
*The charges and allegations contained in the Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Justice Department Statement on Baltimore Mayor's Request for a Pattern or Practice Investigation into the Baltimore Police DepartmentRead the Press Release
Justice Department spokesperson Dena Iverson released the following statement Wednesday following the request from Baltimore Mayor Stephanie Rawlings-Blake for a pattern or practice investigation into the Baltimore Police Department.
“The Attorney General has received Mayor Rawlings-Blake’s request for a Civil Rights Division 'pattern or practice' investigation into the Baltimore Police Department. The Attorney General is actively considering that option in light of what she heard from law enforcement, city officials, and community, faith and youth leaders in Baltimore yesterday.”
Jury Convicts St. Louis Man, Berkeley Woman of Drug TraffickingRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a St. Louis, Mo., man and a Berkeley, Mo., woman have been convicted by a federal trial jury of their roles in a drug-trafficking conspiracy after the man suffered a heroin overdose in a Columbia, Mo., hotel room.
Gustavo Ruvalcaba, 44, of St. Louis, and Jennifer Ann Foust, 29, of Berkeley, Mo., were found guilty of the charges contained in a Dec. 16, 2014, federal indictment. Following the presentation of evidence, the jury in the U.S. District Court in Jefferson City, Mo., deliberated for about two and a half hours on Tuesday, May 5, 2015, before returning the verdicts to U.S. District Judge Stephen R. Bough, ending a trial that began Monday, May 4, 2015.
Ruvalcaba and Foust each were found guilty of participating in a conspiracy to distribute heroin, crack cocaine, powder cocaine and methamphetamine from July 2013 to July 2014. Ruvalcaba was also convicted of four counts of possessing heroin, crack cocaine, powder cocaine and methamphetamine, each with the intent to distribute, on July 14, 2014. Foust was also charged in the possession counts but the jury was unable to reach a verdict; the court declared a mistrial on those counts in regard to Foust.
Columbia police officers were dispatched to a room at the Super 8 Motel in response to a heroin overdose on July 14, 2014. Foust had called 911 for Ruvalcaba, who was lying on the floor and being treated by EMS and fire personnel when officers arrived. Officers executed a search warrant for the hotel room and seized 16.4 grams of black tar heroin, 6.6 grams of crack cocaine, 35.3 grams of powder cocaine, 11.6 grams of pure methamphetamine, drug paraphernalia, seven cell phones and $78,525 divided up into 8 different manila envelopes and numerous piles.
St. Charles, Mo., police officers also had found Ruvalcaba and Foust together in an Embassy Suites hotel room about a year earlier, on July 10, 2013. Foust initially told officers that nobody else was in the hotel room, but they heard noises in the bathroom. Officers noticed drugs and drug paraphernalia scattered in plain view throughout the room and a large bundle of cash. The bathroom door was locked and they continued to hear sounds of plastic being rubbed together, water running and the toilet flushing. Officers believed evidence was being destroyed, so they jimmied open the bathroom door and found Ruvalcaba, who had two fists full of wet plastic baggies. Other wet baggies were found on the sink. Ruvalcaba was handcuffed and set in a chair.
When one of the officers turned around to speak to Foust, Ruvalcaba quickly ingested some of the 15.4 grams of methamphetamine that was being weighed on a digital scale found in the bedroom. Ruvalcaba, who had chunks of methamphetamine in his mouth and on his face and t-shirt, began to eat the methamphetamine at a fast pace and refused to spit it out. When asked why he had ingested the methamphetamine, Ruvalcaba stated, “You can’t charge me without any evidence.” Officers seized 9.6 grams of crack cocaine, 5.7 grams of methamphetamine, drug paraphernalia, five cell phones and $11,086 from the hotel room.
St. Charles police officers arrested Ruvalcaba and Foust again on Sept. 12, 2013, after their vehicle was pulled over on Interstate 70 for operating without proper registration. A K-9 walked around the vehicle and alerted to several areas of the vehicle, including the trunk. Officers found several syringes in a suitcase in the trunk.
Ruvalcaba and Foust were transported to the police station. While they were waiting in the holdover area, Ruvalcaba, whose right hand was handcuffed to the holding bench, reached with his free left hand to remove his shoe and retrieved a package of methamphetamine. Ruvalcaba threw the package of methamphetamine toward Foust, who pulled it toward her with her foot, placed it in her mouth and swallowed it. Officers ordered Foust to open her mouth and noticed a white residue on her tongue; officers also found methamphetamine on the floor where Foust was sitting.
Under federal statutes, Ruvalcaba is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of 140 years in federal prison without parole, plus a fine up to $13 million. Foust is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 40 years in federal prison without parole, plus a fine up to $5 million. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Stuart J. Zander and Assistant U.S. Attorney Jim Lynn. It was investigated by the Drug Enforcement Administration, the Columbia, Mo., Police Department, the U.S. Postal Inspection Service, the St. Charles City Police Department, the St. Charles County, Mo., Sherriff’s Department and the St. Charles County Regional Drug Task Force.
Johnstown Man Pleads Guilty in Heroin Trafficking RingRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., pleaded guilty in federal court to a charge of conspiracy to distribute heroin, United States Attorney David J. Hickton announced today.
Terrance Sitton, 42, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that from Jan. 22, 2015, to April 17, 2015, Sitton conspired to distribute and possess with the intent to distribute 100 grams or more of heroin.
Judge Gibson scheduled sentencing for Oct. 8, 2015, at 10:00 a.m. The law provides for a total sentence of 40 years in prison, a fine of $5,000,000, 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.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pennsylvania Attorney General's Office, the Cambria County Drug Task Force, the Altoona Police Department, and the Cambria County District Attorney's Office, conducted the investigation that led to the prosecution of Sitton.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Johnston in Great Falls on May 6, 2015, and entering please of Not Guilty were:
- MELVIN MOSES LILLEY, III, a 22-year-old resident of Wolf Point, appeared on charges of assault with a dangerous weapon, assault resulting in serious bodily injury, and use of a firearm during and in relation to a crime of violence. If convicted of the most serious charges contained in the indictment, LILLEY faces life in prison, $250,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation and Fort Peck Tribes Department of Law and Justice. PACER Case Reference. 15-16
Appearing before U.S. Magistrate Judge Lynch in Missoula on May 6, 2015, and entering pleas of Not Guilty were:
- CHRISTOPHER KELLY FERRARI, a 40-year-old resident of Kalispell, appeared on charges of possession of a firearm not registered in the national firearms registration and transfer record and felon in possession of firearms. If convicted of the most serious charges contained in the indictment, FERRARI faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Flathead County Sheriff’s Office. PACER Case Reference. 15-08
- THOMAS AARON WADDLE, a 41-year-old resident of Butte, appeared on charges of felon in possession of a firearm. If convicted of the charge contained in the indictment, WADDLE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-24
Appearing before U.S. Magistrate Judge Ostby in Billings on May1, 2015, and entering pleas of Not Guilty were:
- DELVENE MARIE EAGLEMAN, a 38-year-old resident of Lame Deer, appeared on charges of assault resulting in serious bodily injury and assault with a dangerous weapon. If convicted of the most serious charge contained in the indictment, EAGLEMAN faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Indian Affairs and the Federal Bureau of Investigation. PACER Case reference. 15-23
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indiana Man Charged with Sexual Exploitation of Macon County MinorRead the Press Release
Springfield, Ill. – Jim Lewis, U.S. Attorney for the Central District of Illinois, announced that a federal grand jury in Springfield returned an indictment today that charges Shawn Shannon, 43, of Muncie, Ind., with one count each of sexual exploitation of a minor and possession of child pornography.
The indictment alleges that from Feb. 28, to March 1, 2015, Shannon enticed, used and coerced a minor to engage in sexually explicit conduct for the purposes of producing visual images of said conduct. The indictment further alleges that Shannon possessed images of child pornography during that same time period.
Shannon’s arraignment is scheduled for May 12, 2015, at 1:30 p.m. before U.S. Magistrate Judge David G. Bernthal in the U.S. courthouse in Urbana.
If convicted, the statutory penalty for sexual exploitation of a minor is 15 to 30 years in prison plus a fine of up to $250,000; the penalty for possession of child pornography is up to 10 years imprisonment plus a fine of up to $250,000.
Shannon was previously charged in a criminal complaint and was arrested on Apr. 15, 2015, in Muncie, Ind. Shannon appeared before U.S. District Judge Colin S. Bruce on April 20, and was ordered to remain detained in U.S. Marshals Service custody.
The case is being prosecuted by Assistant U.S. Attorney Elly M. Peirson. The charges are the result of an investigation by the Decatur Police Department and U.S. Immigration and Customs Enforcement Homeland Security Investigations.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Illinois Couple Indicted for Kidnapping and Transportation of a Minor with Intent to Engage in Sexual ActivityRead the Press Release
A federal grand jury indicted an Illinois couple on charges of kidnapping and transportation with intent to engage in criminal sexual activity with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney James A. Lewis of the Central District of Illinois and Special Agent in Charge Sean Cox of the FBI’s Springfield Division.
“Parents with adopted children who are struggling are all too frequently targets for those willing to say and do whatever it takes to gain access to those vulnerable children,” said Assistant Attorney General Caldwell. “The Criminal Division is committed to bringing to justice anyone who seeks to exploit children and risk their safety. Every child in America deserves a safe home.”
“Protecting children is a community responsibility,” said U.S. Attorney Lewis. “Law enforcement relies on the assistance of proactive neighbors, school officials and parents to protect our kids.”
“The FBI is dedicated to the protection of children,” said Special Agent in Charge Cox. “We will continue to use our resources to pursue those who would exploit them for their own benefit.”
Nicole Eason, 37, and Calvin Eason, 46, formerly of Danville and Westville, Illinois, were charged in an indictment unsealed today with two counts of kidnapping of a minor and one count of transportation of a minor. They were previously charged by a criminal complaint and arrested on April 3, 2015, in Tucson, Arizona. The couple has remained in custody since their arrest.
According to allegations in the criminal complaint, Nicole and Calvin Eason participated in an online adoption discussion board in 2006 and 2007, and sought to adopt a child through a process sometimes referred to as private “re-homing.” This practice is often associated with “disrupted” or failed adoptions, when an adoptive family places their child in another home because the adoptive family can no longer care for the child.
According to the complaint, the Easons communicated with a minor’s parents and allegedly misrepresented material facts about their background to gain the parents’ trust. The Easons also allegedly lied about having a home study “waiver,” which the parents believed was needed to transfer custody of their child. Based on the Easons’ false misrepresentations, the parents transported their child across state lines in 2007. Both Nicole and Calvin Eason allegedly sexually abused the child while he/she was in their custody.
The indictment further alleges that Nicole and Calvin Eason kidnapped a second minor in the same manner in 2008. The Easons allegedly transported the second minor across state lines.
The allegations and charges contained in the complaint and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case is being investigated by FBI’s Springfield Division. The case is being prosecuted by Trial Attorney Jennifer Toritto Leonardo of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Elly Peirson of the Central District of Illinois.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. 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.
Illinois Couple Indicted for Kidnapping and Transportation of A Minor with Intent to Engage in Sexual ActivityRead the Press Release
WASHINGTON – A federal grand jury indicted an Illinois couple on charges of kidnapping and transportation with intent to engage in criminal sexual activity with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney James A. Lewis of the Central District of Illinois and Special Agent in Charge Sean Cox of the FBI’s Springfield Division.
“Parents with adopted children who are struggling are all too frequently targets for those willing to say and do whatever it takes to gain access to those vulnerable children,” said Assistant Attorney General Caldwell. “The Criminal Division is committed to bringing to justice anyone who seeks to exploit children and risk their safety. Every child in America deserves a safe home.”
“Protecting children is a community responsibility,” said U.S. Attorney Lewis. “Law enforcement relies on the assistance of proactive neighbors, school officials and parents to protect our kids.”
“The FBI is dedicated to the protection of children,” said Special Agent in Charge Cox. “We will continue to use our resources to pursue those who would exploit them for their own benefit.”
Nicole Eason, 37, and Calvin Eason, 46, formerly of Danville and Westville, Illinois, were charged in an indictment unsealed today with two counts of kidnapping of a minor and one count of transportation of a minor. They were previously charged by a criminal complaint and arrested on April 3, 2015, in Tucson, Arizona. The couple has remained in custody since their arrest.
According to allegations in the criminal complaint, Nicole and Calvin Eason participated in an online adoption discussion board in 2006 and 2007, and sought to adopt a child through a process sometimes referred to as private “re-homing.” This practice is often associated with “disrupted” or failed adoptions, when an adoptive family places their child in another home because the adoptive family can no longer care for the child.
According to the complaint, the Easons communicated with a minor’s parents and allegedly misrepresented material facts about their background to gain the parents’ trust. The Easons also allegedly lied about having a home study “waiver,” which the parents believed was needed to transfer custody of their child. Based on the Easons’ false misrepresentations, the parents transported their child across state lines in 2007. Both Nicole and Calvin Eason allegedly sexually abused the child while he/she was in their custody.
The indictment further alleges that Nicole and Calvin Eason kidnapped a second minor in the same manner in 2008. The Easons allegedly transported the second minor across state lines.
The allegations and charges contained in the complaint and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.This case is being investigated by FBI’s Springfield Division. The case is being prosecuted by Trial Attorney Jennifer Toritto Leonardo of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Elly Peirson of the Central District of Illinois.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. 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.
Huber Heights Man Pleads Guilty to Online Child EnticementRead the Press Release
COLUMBUS, Ohio – Keegan L. Sipe, 31, of Huber Heights, Ohio, pleaded guilty in United States District Court to attempted coercion and enticement of minors to engage in unlawful sexual activity.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Upper Arlington Police Chief Brian Quinn, Marlon Miller, Special Agent in Charge, Homeland Security Investigations (HSI), and other members of the Franklin County Internet Crimes Against Children (ICAC) Task Force, announced the plea entered into today before U.S. District Judge Michael H. Watson.
According to court documents, in December 2014, Sipe attempted to persuade an individual via the Internet to engage in sexual activity with females he believed to be 10 and 14 years old. Investigators discovered an advertisement on Craigslist soliciting a “taboo mother and daughter” that stated, “Get with me if you and daughter would like to have some fun. Kinky and taboo age no matter.”
When an undercover investigator responded to the advertisement, Sipe engaged in conversation with the law enforcement official. He believed the investigator was a father arranging for Sipe to meet with his two minor daughters to engage in sexual activity.
On December 20, 2014, Sipe arranged to meet the undercover officer in the Bob Evans parking lot in Hilliard, Ohio. Upon his arrival, he was taken into custody.
The parties involved in this case have agreed to a 10-year prison sentence for Sipe.
The Franklin County ICAC Task Force is a multi-agency effort dedicated to the fight against computer facilitated crimes against children. The following agencies are members:Franklin County Sheriff’s Office Upper Arlington Police Department
Grove City Police Department Columbus Police Department
Grandview Heights Police Department Whitehall Police Department
Hilliard Police Department Westerville Police Department
Homeland Security Investigations U.S. Secret Service
Ohio ICAC Franklin County Prosecutor's OfficeThis case is being brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney's Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims.
U.S. Attorney Stewart commended the cooperative investigation by the Franklin County ICAC Task Force, as well as Assistant United States Attorneys Jessica H. Kim and Heather A. Hill, who are representing the United States in this case.Houston Doctor and Group Home Owner Indicted for Alleged Roles in $5.2 Million Medicare Fraud SchemeRead the Press Release
A Houston doctor and a group home owner were arrested on charges related to their alleged participation in a $5.2 million Medicare fraud scheme involving false claims for mental health treatment.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office, the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) and Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Field Office made the announcement.
Walid H. Hamoudi, M.D., 63, of Houston, and Geraldine J. Caroline, 49, of Houston, were each charged with one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks and five counts of paying and receiving kickbacks. The indictment also charges Hamoudi with one count of money laundering. Both defendants are expected to make their initial appearances in federal court in Houston today.
According to the indictment, Hamoudi and Caroline allegedly participated in a scheme to defraud Medicare beginning in 2010 and continuing until June 2011. The defendants allegedly caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services—a form of intensive outpatient treatment for severe mental illness—to Medicare through a Houston hospital. Hamoudi allegedly paid Caroline kickbacks to send her group home residents to the hospital to receive PHP services even though the patients did not qualify for or receive the services.
The indictment alleges that the defendants and their co-conspirators submitted or caused to be submitted approximately $5.2 million in claims to Medicare and over $380,000 in claims to Medicaid for PHP services purportedly provided by the hospital, when, in fact, the PHP services were medically unnecessary or never provided.
In February 2012, Mohammad Khan, an assistant administrator at the hospital, who managed many of the hospital’s PHPs, pleaded guilty to one count of conspiracy to commit health care fraud, one count of conspiracy to pay illegal kickbacks and five counts of paying illegal kickbacks for his role in the scheme. Khan is scheduled to be sentenced on May 21, 2015.
In October 2014, Earnest Gibson III, the president of the hospital, along with his son Earnest Gibson IV, Regina Askew and Robert Crane, were convicted for their roles in the scheme. William Bullock III, Robert Ferguson, Waddie McDuffie, Sharonda Holmes and Leslie Clark have pleaded guilty for their roles in the scheme. These defendants have not yet been sentenced.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI, IRS-CI, HHS-OIG and the MFCU, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Trial Attorney Ashlee C. McFarlane of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Hedge Fund Executive Sentenced to 30 Months in Prison for Fraud SchemeRead the Press Release
BART GUTEKUNST, 63, of Weston, and a former managing partner and principal of New Stream Capital, LLC, a Ridgefield-based hedge fund, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 30 months of imprisonment, followed by three years of supervised release, for engaging in a scheme to deceive investors in order to obtain and maintain investments.
According to court documents and statements made in court, in November 2007, New Stream Capital, LLC (“New Stream”) launched new feeder funds, one based in the United States (“U.S. Fund”) and a series of funds based in the Cayman Islands (“Cayman Fund”). New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund. Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008. At risk of losing their largest investor, GUTEKUNST, co-managing partner David Bryson and chief financial officer Richard Pereira set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption.
As part of the scheme, GUTEKUNST, Bryson and Pereira had New Stream staff secretly execute documents to effectuate the Bermuda Fund’s special priority. New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund. Moreover, New Stream continued to market to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.
Through this scheme, New Stream investors were defrauded out of more than $46 million.
From April 2008 to December 2010, GUTEKUNST and Bryson each collected more than $5 million in management fees and profit sharing while participating in this fraud scheme.
On May 21, 2014, GUTEKUNST, Bryson and Pereira each pleaded guilty to one count of conspiracy to commit wire fraud.
On May 5, 2015, Bryson was sentenced to 33 months of imprisonment. Pereira is scheduled to be sentenced tomorrow.
This matter was investigated by the Federal Bureau of Investigation and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Liam Brennan and Michael S. McGarry, and Special Assistant U.S. Attorney Sheldon L. Pollock.
HSV Entertainment LLC Agrees to No Longer Supply Internet Sweepstakes at the Roanoke Rapids TheaterRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today, the U.S. Attorney’s Office reached a non-prosecution agreement with HSV Entertainment LLC. The agreement provides that the United States Attorney’s Office for the Eastern District of North Carolina will close its criminal investigation of HSV, conditioned upon HSV’s agreement that it will no longer have any involvement with sweepstakes in North Carolina involving an entertaining display. HSV has had a lease with the City of Roanoke Rapids to operate the Roanoke Rapids Theater. The primary purpose of the lease was to operate an entertainment venue, including concerts and other shows. In addition, HSV also operated pre-reveal internet sweepstakes games. It will terminate its operation of the theater effective May 18, 2015. The City Attorney for Roanoke Rapids has informed the U.S. Attorney’s Office that it will no longer allow sweepstakes devices back in the theater after HSV leaves. Investigation of this matter was conducted by North Carolina Alcohol Law Enforcement and the Internal Revenue Service in coordination with Assistant United States Attorneys David Bragdon and Joshua Royster.
Gun Store Burglar Goes Back to Federal PrisonRead the Press Release
PITTSBURGH - A Westmoreland County resident has been sentenced in federal court to an additional 12 months and one day of incarceration as a result of violating the federal supervised release on his prior federal conviction, United States Attorney David J. Hickton announced today.
United States District Judge Alan Bloch imposed the sentence yesterday on Aaron Booker and added nearly three years of supervision to follow this latest incarceration.
According to information previously presented to the court, in 2009 the defendant was among a group of individuals who broke the front window at a New Kensington firearms dealer and stole 11 pistols and three assault rifles. Booker was originally sentenced to 27 months in federal prison for that incident, and then violated his supervision by assaulting a female victim. Booker was sentenced to “time served” in the Westmoreland County Court of Common Pleas for the assault and faced an additional sentence from Judge Bloch for committing the crime while on supervision following his release from federal prison.
Prior to imposing the new sentence for the supervision violation, Judge Bloch listened to the victim’s statement regarding the sexual nature of the assault and considered the seriousness of that incident.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government.
United States Attorney Hickton noted that since firearms dealers are federally licensed, the burglary of the gun store was investigated by federal agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) who quickly identified and arrested Booker and his co-conspirators. U.S. Attorney Hickton also noted that Booker was prosecuted for the assault by the Westmoreland County District Attorney’s Office with the assistance of the local police department from the victim’s neighborhood.
Grand Junction Real Estate Developers Are Sentenced to Federal Prison for Money LaunderingRead the Press Release
DENVER – Franklin Thad Harris, age 59, and Merlin D. Unruh, age 53, both of Grand Junction, Colorado, were sentenced today by U.S. District Court Judge Christine M. Arguello to serve 36 months and 28 months in federal prison, respectively, for money laundering, the United States Attorney’s Office, the Federal Bureau of Investigation and IRS Criminal Investigation announced. Following their prison sentences, Harris and Unruh were ordered to serve 3 years each on supervised release. They were also ordered by Judge Arguello to pay $1,844,846.49 in restitution joint and several to the victim bank.
Harris and Unruh were indicted by a federal grand jury in Denver on January 8, 2013, for charges of bank fraud and money laundering. The indictment remained under seal until their arrest on January 11, 2013. A superseding information was filed on April 14, 2014. Harris and Unruh plead guilty to one count of money laundering on July 17, 2014. They were sentenced on May 6, 2015.
According to information contained in court documents, including the stipulated facts contained in their plea agreements, Harris was in the business of constructing housing developments throughout the Grand Junction, Colorado, area. In the mid to late 2000s, Harris was involved in the purchase of several acres of land for various planned housing developments in Grand Junction. Financing for the projects came in the form of secured loans from First National Bank of the Rockies (FNBR). Harris’s partner, Unruh, was in the construction business and was the general contractor on building projects with Harris. TDSM was a Colorado real estate development company incorporated in February 2003 and Harris and Unruh were sole members of the board of directors of TDSM. HARRIS was the President and Registered Agent of TDSM. Unruh was Secretary/Treasurer of TDSM. Unruh incorporated and was the registered agent for McGleeson, Inc., a construction company.
In 2010, several construction loans to Harris had become problem loans as they were in default with FNBR. The Special Assets Department of FNBR began to review the loans and identified potential fraud and requested an outside forensic audit which eventually lead to federal law enforcement agencies being notified. Between October 2007 and December 2008, Harris and Unruh obtained loan disbursements totaling $3,718,351.83. They submitting false and fraudulent expense documentation, primarily false invoices, which represented various types of construction work completed at both sites. In fact, much of the work reflected in the invoices had not been performed at the Chatfield site, and no work was done on the Thunder Valley development.
An IRS Special Agent conducted an analysis of the flow of funds and found Harris and Unruh, on numerous occasions, conducted a series of financial transactions after the draw money was deposited into their construction business account. They diverted funds meant to pay subcontractor invoices to private bank accounts and retirement accounts owned/controlled by them and their spouses.
This case was investigated by agents with Federal Bureau of Investigation (FBI) and IRS Criminal Investigation (IRS CI). The case was prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
French National Arrested on Charges of Alien SmugglingRead the Press Release
Alain Rene Leichtnam, 71, a French national, was arrested April 30, 2015, on a criminal complaint charging him with encouraging and inducing aliens to enter the United States in violation of law, announced U.S. Attorney Ronald W. Sharpe of the District of the Virgin Islands. Leichtnam made his initial appearance on May 1, 2015, and had his detention hearing today before U.S. Magistrate Judge Ruth Miller of the District of the Virgin Islands. Judge Miller detained Leichtnam pending further proceedings and he was remanded to the custody of the U.S. Marshals Service.
According to the complaint, U.S. Customs and Border Protection (CBP), Office of Air and Marine (OAM) and the U.S. Coast Guard (USCG) intercepted a catamaran vessel, Mazurka, off of the coast of St. John, Virgin Islands, in the early morning hours of April 29, 2015. The vessel was operated by Leichtnam and contained 38 Cuban nationals and one national of St. Lucia. None of the individuals possessed the proper documents to lawfully enter the United States. Encouraging and inducing aliens to enter the United States carries a sentence of not more than five years in prison and in the case of a violation in which the offense was done for the purpose of private financial gain, not more than 10 years’ imprisonment.
U.S. Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the CBP, OAM, the USCG and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant U.S. Attorney Kim L. Chisholm of the District of the Virgin Islands.
French National Arrested on Charges of Alien SmugglingRead the Press Release
St. Thomas, USVI- Alain Rene Leichtnam, 71, a French national, was arrested April 30, 2015, on a criminal complaint charging him with encouraging and inducing aliens to enter the United States in violation of law, United States Attorney Ronald W. Sharpe announced today. Leichtnam made his initial appearance on May 1, 2015, and had his detention hearing today before U.S. Magistrate Judge Ruth Miller. Judge Miller detained Leichtnam pending further proceedings and he was remanded to the custody of the United States Marshals Service.
According to the complaint, U.S. Customs and Border Protection (CBP) Office of Air and Marine (OAM) and the United States Coast Guard (USCG) intercepted a catamaran vessel, Mazurka, off of the coast of St. John, Virgin Islands in the early morning hours of April 29, 2015. The vessel was operated by Leichtnam and contained 38 Cuban nationals and one national of St. Lucia. None of the individuals possessed the proper documents to lawfully enter the United States. Encouraging and inducing aliens to enter the United States carries a sentence of not more than five years in prison, and in the case of a violation in which the offense was done for the purpose of private financial gain, not more than 10 years’ imprisonment.
United States Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the CBP, OAM, the USSG, and Homeland Security Investigations (HSI). It is being prosecuted by Assistant United States Attorney Kim L. Chisholm.
Former Westmoreland County Sheriff's Deputy Charged with Possession of Firearms with Obliterated Serial NumbersRead the Press Release
Trusted with Destroying the Firearms, Melvin Hinson Removed
the Serial Numbers and Sold or Traded The FirearmsRICHMOND, Va. – Melvin Hinson, 65, of Westmoreland County, Virginia, was indicted yesterday by a federal grand jury on a charge of possessing firearms with the manufacturers’ serial numbers obliterated or removed.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington
Field Division, made the announcement after Hinson’s indictment was returned.Hinson currently faces a maximum penalty of five years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The indictment alleges that from March 1 to March 19, 2014, Hinson possessed a Rohm 38 Special caliber revolver, model RG38; a Harrington and Richardson (H&R) 32 caliber revolver; and a Jimenez Arms 9mm caliber semi-automatic pistol, all with obliterated serial numbers. Hinson was arrested on April 15, 2015, on a Criminal Complaint alleging this same offense. According to the affidavit submitted in support of that Complaint, Hinson, a retired Westmoreland County Sheriff’s Deputy, received firearms from law enforcement agencies for the purpose of destroying them. However, it is alleged, rather than do so, as required, he removed the serial numbers and sold or traded the firearms. According to the affidavit, Hinson distributed at least 12 firearms that have been recovered, each with the manufacturer’s serial number removed or obliterated, including a Kel-Tec carbine style assault rifle with a folding stock and a short-barreled shotgun. The affidavit asserts that a number of these firearms were determined to have come from the Westmoreland County Sheriff’s Office.
This case was investigated by ATF, with the assistance of Virginia State Police, the Colonial Beach Police Department and the Westmoreland County Sheriff’s Office. Assistant U.S. Attorney Olivia L. Norman is prosecuting the case on behalf of the United States.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-81.
Former Vice-President and Seven Others Charged in Scheme to Defraud Beer Company of over $7 MillionRead the Press Release
CHICAGO — A former Vice-President of a brewing company was charged in a twenty count indictment yesterday along with seven co-defendants, as a result of an alleged scheme to defraud the company of at least $7 million by submitting false estimates and invoices that billed for fictitious promotional and marketing events. DAVID COLLETTI, 58, of Chicago, was charged in a federal grand jury indictment with wire fraud along with seven other co-defendants; RODERICK GROETZINGER, 61, of North Carolina, ANDREW VALLOZZI, 53, of Florida, JAMES RITTENBERG, 72, of Chicago, SCOTT DARST, 68, of Las Vegas, THOMAS LONGHI, 57, of Florida, FRANCIS BUONAURO Jr., 72, of Florida, and MARYANN ROZENBERG, 57, of Wisconsin. Defendants RITTENBERG and DARST were also charged with mail fraud. All eight defendants will be arraigned at a date determined by U.S. District Court.
The indictment alleges that COLLETTI, as a Vice-President, oversaw the marketing, promotion, and sale of beer for the victim company, which hired third-party vendors to organize and hold events and promotions designed to market the company’s beer. According to the indictment, GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG controlled entities which claimed to provide third-party vendor services to the victim company during the course of the alleged scheme. The entities included Beverage Industry Marketing Services, Rave Media, Events Marketing Network LLC, AVA Advertising, Inc., AVA Marketing and Communications, LLC, Food and Beverage Network, Inc., Prime Promotions, Inc., P&D Marketing, Inc., Longhi Golf Operations, F&B Marketing, and Golden Logistics.
The indictment alleges that during COLLETTI’s tenure at the company, he worked with GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG to submit false estimates and invoices in the name of entities which falsely billed the company for fictitious promotional events and for events at inflated prices. The estimates and invoices misrepresented the date, location, cost and type of events that were supposedly being held to market the company’s products. The fictitious events included supposed food and beer pairings, trainings, and promotions for certain customer accounts, held at casinos, hotels, and flea markets.
The indictment alleges that COLLETTI oversaw the approval of a number of these false invoices for payment and the company paid in excess of $7 million to the defendants’ entities. Subsequently, some of the defendants arranged for COLLETTI to receive a portion of the payments. According to the indictment, the defendants used the victim company’s money, for among other things, defendants’ personal expenses, collectible firearms, international golf trips, hunting trips, investments in a hotel and bar, and an arena football team.
The indictment seeks forfeiture of at least $7 million.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Jessica Romero and Jennie Levin.
Each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Former Stanislaus County Resident Arrested for Tax EvasionRead the Press Release
FRESNO, Calif. — Frank A. Bilan, 66, of Lodi, was arrested today on a three-count indictment charging him with one count of corrupt endeavor to obstruct and impede the administration of the internal revenue laws and two counts of failing to file tax returns, United States Attorney Benjamin B. Wagner announced.
According to court documents, Bilan, who formerly lived in Newman in Stanislaus County, earned income as a salaried engineer and through his engineering consulting business. However, Bilan did not timely file tax returns for tax years 2001 through 2009. When the IRS sent correspondence to Bilan regarding past due taxes, Bilan responded by submitting fictitious financial instruments titled “Money Order” or “Money Order Private Issue” in purported payment of his tax liabilities, attempting to file false purported income tax returns, and falsely reporting on an IRS form the discharge of monies owed by Bilan to the IRS. Bilan also failed to file income tax returns for tax years 2008 and 2009. The indictment alleges that between 2005 and 2009, Bilan received over $900,000 in income.
This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Henry Z. Carbajal III is prosecuting the case.
If convicted of a corrupt endeavor to obstruct and impede the administration of the internal revenue laws, Bilan faces a maximum statutory penalty of three years in prison and a $250,000 fine. The maximum statutory penalty for willful failure to file a tax return is up to one year in prison and a $100,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Pasco Teacher Sentenced to Fifteen Years for Online Enticement of A MinorRead the Press Release
Tampa, FL – U.S. District Judge Susan C. Bucklew today sentenced David Wendel Thompson (49, Seffner) to 15 years in federal prison for online enticement of a minor. The Court also sentenced him to 10 years of supervision following his release following his release from prison. Thompson pleaded guilty on October 20, 2014.
According to court documents, between December 14, 2013, and March 14, 2014, Thompson used Facebook to attempt to persuade two minor females in Belize, ages 13 and 15, to engage in sexual intercourse with him. He did so using his own Facebook account and a fake Facebook account that he had set up to appear as though it belonged to a female teenager in Belize.
On March 14, 2014, Thompson flew from Tampa to Belize, with a layover in Miami, to meet the minors with the intent of engaging in sexual activity. He was denied entry into Belize and returned to Miami, where he was arrested. Thompson admitted to communicating with the girls on Facebook and to knowing that they were underage. Prior to his arrest, Thompson was a social studies teacher at Centennial Middle School in Dade City.
“Crimes against children are always devastating, but it is particularly egregious when a person of trust, like this teacher, conspires to commit such atrocities,” said Susan L. McCormick, special agent in charge of HSI Tampa. “This case is the result of hard work by HSI special agents in Tampa, Miami and the Cyber Crimes Center, as well as our partners at the U.S. Department of State.”
“The Diplomatic Security Service maintains an excellent relationship with local law enforcement personnel. This close cooperation between our agents and local law enforcement was key to David Wendel Thompson’s capture,” said Acting Special Agent in Charge David Brown of the DSS Miami Field Office. “It is this type of worldwide law enforcement coordination that gives Diplomatic Security an unparalleled ability to locate, pursue, and apprehend fugitives.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, in conjunction with the U.S. Department of State. It was prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to 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.justice.gov/psc.
Former Owner of Empire Towers Pleads Guilty to Fraudulent $7 Million Bond Scheme and Filing a False Tax ReturnRead the Press Release
Baltimore, Maryland - Wilfred T. Azar, III, age 53, formerly of Queenstown, Maryland, pleaded guilty today to securities fraud and filing a false tax return.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
In 1999, Azar became president and majority owner of Empire Corporation and exercised complete control over the operations of Empire. Empire Corporation owned Empire Towers Corporation. Empire Towers Corporation’s primary asset was Empire Towers, a 10 story office building in Glen Burnie, Maryland.
According to Azar’s plea agreement, by January 2006, Empire Corporation could no longer pay its expenses and was effectively insolvent. By 2007, Empire Towers Corporation had exhausted its lines of credit from lending institutions.
From January 2006 to April 2010, Azar caused Empire Corporation to sell bonds to over 50 individual investors for more than $7 million. While many of the bonds were titled “registered,” the bonds were not registered with either the U.S. Securities and Exchange Commission (SEC) or the state of Maryland. In addition, Azar falsely told investors that Empire Corporation was in good financial health and that the company generated enough revenue to pay the promised 10 percent annual rate of return. Azar falsely represented that the money invested would be used for a specific renovation project or other capital improvement at the Empire Towers office building. Azar failed to inform investors that he used most of the money raised from previous bond sales for his own personal purposes. Although the bonds were issued by Empire Corporation, Azar diverted millions of dollars of proceeds from the bond sales to his own bank account and the bank accounts of other companies that he controlled.
During the period of the fraud, Azar misappropriated approximately $7,219,362 in investor proceeds raised through the sale of bonds. Azar used the bond proceeds: to purchase a $100,000 Aston Martin luxury automobile; to pay the $3,000 monthly mortgage on his primary residence; to pay $51,000 to an Azar trust; to purchase Baltimore Ravens season tickets for $17,298; and to pay $25,389 in country club dues. In addition, Azar charged over $420,000 to a credit card paid by Empire Management Services, including daily living expenses, lavish vacations, and university tuition for one of his children. Azar also diverted more than $1.07 million in Empire funds to other unrelated businesses he controlled under the guise of “loans” which were never repaid.
During 2009, Azar embezzled approximately $1,959,250 in Empire funds, which he failed to report as income on his tax return. This resulted in a tax loss to the government of $469,936.
Azar faces a maximum sentence of 20 years in prison for securities fraud, and a maximum of three years in prison for filing a false tax return. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for August 12, 2015, at 10:00 a.m.
The SEC has also filed a complaint against Azar and another individual in connection with the scheme, and that case is pending.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the IRS-CI, FBI and SEC for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory Bockin and Trial Attorney Kenneth Vert of the Justice Department’s Tax Division, who are prosecuting the case.
Former Owner of Empire Towers Pleads Guilty for Fraudulent $7 Million Bond Scheme and Filing False Tax ReturnRead the Press Release
Misled More Than 50 Individual Investors Who Bought Bonds
A former Queenstown, Maryland, resident pleaded guilty today to securities fraud and filing a false tax return.
The guilty plea was announced by U.S. Attorney Rod J. Rosenstein of the District of Maryland, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington, D.C., Field Office and Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Division.
In 1999, Wilfred T. Azar III, 53, became the president and majority owner of Empire Corporation and exercised complete control over the operations of Empire. Empire Corporation owned Empire Towers Corporation. Empire Towers Corporation’s primary asset was Empire Towers, a 10-story office building in Glen Burnie, Maryland.
According to Azar’s plea agreement, by January 2006, Empire Corporation could no longer pay its expenses and was effectively insolvent. By 2007, Empire Towers Corporation had exhausted its lines of credit from lending institutions.
From January 2006 to April 2010, Azar caused Empire Corporation to sell bonds to more than 50 individual investors for more than $7 million. While many of the bonds were titled “registered,” the bonds were not registered with either the U.S. Securities and Exchange Commission (SEC) or the state of Maryland. In addition, Azar falsely told investors that Empire Corporation was in good financial health and that the company generated enough revenue to pay the promised 10 percent annual rate of return. Azar falsely represented that the money invested would be used for a specific renovation project or other capital improvement at the Empire Towers office building. Azar failed to inform investors that he used most of the money raised from previous bond sales for his own personal purposes. Although the bonds were issued by Empire Corporation, Azar diverted millions of dollars of proceeds from the bond sales to his own bank account and to the bank accounts of other companies that he controlled.
During the period of the fraud, Azar misappropriated approximately $7,219,362 in investor proceeds raised through the sale of bonds. Azar used the bond proceeds: to purchase a $100,000 Aston Martin luxury automobile; to pay the $3,000 monthly mortgage on his primary residence; to pay $51,000 to an Azar trust; to purchase Baltimore Ravens season tickets for $17,298; and to pay $25,389 in country club dues. In addition, Azar charged more than $420,000 to a credit card paid by Empire Management Services, including daily living expenses, lavish vacations and university tuition for one of his children. Azar also diverted more than $1.07 million in Empire funds to other unrelated businesses he controlled under the guise of “loans” which were never repaid.
During 2009, Azar embezzled approximately $1,959,250 in Empire funds, which he failed to report as income on his tax return. This resulted in a tax loss to the government of $469,936.
Azar faces a statutory maximum sentence of 20 years in prison for securities fraud, and a maximum of three years in prison for filing a false tax return. U.S. District Judge William D. Quarles Jr. has scheduled sentencing for Aug. 12 at 10:00 a.m.
The SEC has also filed a complaint against Azar and another individual in connection with the scheme, and that case is pending.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants, including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
U.S. Attorney Rosenstein praised the IRS-CI, FBI and SEC for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory Bockin of the District of Maryland and Trial Attorney Kenneth Vert of the Justice Department’s Tax Division, who are prosecuting the case.