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22 June 2015
Fort Smith Chiropractor Pleads Guilty to Federal Tax CrimeRead the Press Release
An Arkansas chiropractor pleaded guilty today in the U.S. District Court in the Western District of Arkansas to corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), announced U.S. Attorney Conner Eldridge of the Western District of Arkansas and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. He was previously convicted of federal tax crimes and sentenced to prison.
According to court documents, Philip Roberts, 60, of Fort Smith, Arkansas, filed a series of false and fraudulent documents with the IRS in an effort to obstruct or impede the due administration of the internal revenue laws, including filing false financial instruments that claimed millions of dollars of transactions with both the Secretary of the Treasury and the IRS Commissioner, and filing IRS forms that falsely reported payments. In 2000, after a jury trial, Roberts was convicted of two counts of willfully failing to file federal income tax returns and sentenced to serve 16 months in federal prison.
Roberts’ sentencing hearing has not been scheduled yet before the Honorable U.S. District Judge Timothy L. Brooks of the Western District of Arkansas. Roberts faces a statutory maximum sentence of three years in prison, one year of supervised release and a $250,000 fine for obstructing and impeding the IRS.
U.S. Attorney Eldridge and Acting Assistant Attorney General Ciraolo commended special agents of the IRS and the Treasury Inspector General for Tax Administration, who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division and Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas, who are prosecuting the case.
Former Tribal Councilor of the Seneca Nation of Indians and Vice Chairman of the Board of Directors of the Seneca Gaming Corporation Pleads Guilty to Lying to the FbiRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.—The United States Attorney’s Office announced today that Bergal L. Mitchell, III, 41, of Gowanda, NY, pleaded guilty to lying to Special Agents of the Federal Bureau of Investigation before U.S District Judge Richard J. Arcara. The charge carries a maximum penalty of five years in prison and a $250,000 fine.Assistant U.S. Attorneys Anthony M. Bruce and James P. Kennedy, Jr., who are handling the case, stated that the defendant, who was formerly a tribal councilor of the Seneca Nation of Indians (SNI) and who was, in 2006, Vice Chairman of the Board of Directors of the Seneca Gaming Corporation (SGC), stole for himself $338,000 out of the $2.1 million that the SNI and its subsidiaries paid in order to purchase 251 acres of farmland in Lewiston, NY. That land now serves as the site for the Seneca Hickory Stick Golf Course.
On September 10, 2008, Mitchell was interviewed by FBI agents who were investigating the land purchase. During the interview, the defendant attempted to cover up his theft of the $338,000 by falsely telling the agents that he had no knowledge of a $248,000 wire transfer to an account belonging to his late half-brother. Mitchell also lied about securing a $125,000 cashier’s check from these proceeds which he used to purchase a home for his parents and personally delivered to the sellers of the house. In addition, the defendant lied about using $23,000 of these proceeds to make a loan to friend.
Timothy Toohey, who was convicted of unlawfully receiving an additional $202,000 of the proceeds from the land deal, was sentenced to 33 months in prison.
The plea was the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation. The New York Stated Police, Internal Revenue Service and Niagara County District Attorney’s Office also assisted in the investigation.
Sentencing is scheduled for October 7, 2015 at 1:00 p.m. before Judge Arcara.
Former Treasurer Sentenced to Nearly Three Years in Prison for Embezzling over $419,000 from Fraternal Order of PoliceRead the Press Release
TULSA, Okla.–The former Treasurer of the Fraternal Order of Police Oklahoma State Lodge and the Tulsa Fraternal Order of Police was sentenced today to serve 33 months in federal prison for embezzling over $419,000 from Lodge bank accounts, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma. In addition to the prison sentence, U.S. District Court Chief Judge Gregory K. Frizzell ordered Lorna Jean Vanlandingham to pay restitution in the amount of $291,127.59, three years of supervised release, and a $15,000 fine.
On February 11, 2015, Vanlandingham, of Tulsa, was charged with two-counts of wire fraud. At a plea hearing on March 25, Vanlandingham admitted that from April 6, 2010 to March 11, 2014, she embezzled from the Fraternal Order of Police Oklahoma. Additionally, from January 23, 2013 to April 23, 2014, she admitted to embezzling from the Fraternal Order of Police Tulsa Lodge #93. The loss to the Oklahoma State Lodge was $66,778.53 and the loss to the Tulsa Lodge #93 was $352,313.31.
“Instead of acting in good faith, she abused her position of trust by writing fraudulent checks and making unauthorized transfers which resulted in the loss of over $419,000 from Lodge bank accounts,” said U.S. Attorney Williams. “Throughout the case, my office was committed to seeking justice and to holding the defendant accountable for her misconduct and wrongdoing. All crimes, especially those committed against the law enforcement community, will be investigated and prosecuted to the fullest extent of the law.”
The case was handled by the Federal Bureau of Investigation and Assistant U.S. Attorney Jeffrey A. Gallant prosecuted the case.
Former Rhode Island House Speaker & Providence Licensing Board Vice-Chairman Gordon Fox to Plead Guilty in Federal Court to Wire Fraud, Bribery and Tax EvasionRead the Press Release
PROVIDENCE, R.I. – Former Rhode Island House Speaker Gordon D. Fox, 53, of East Providence, has waived federal indictment and is expected to plead guilty in federal court to a three-count Information charging him with wire fraud, bribery and filing a false tax return. The charges stem from former Speaker Fox’s theft of $108,000 donated by campaign supporters to pay for personal expenses; his acceptance of a $52,000 bribe to advocate and move for issuance of a liquor license for an East Side restaurant while serving as Vice-Chairman of the City of Providence Board of Licenses in 2008; and his failure to account for these illegal sources of income on his tax returns.
An 18-month federal grand jury investigation led by prosecutors from the United States Attorney’s Office and the Rhode Island Attorney General’s Office, the FBI, IRS and Rhode Island State Police, included the execution of court authorized search warrants at the former speaker’s home and State House office in March of 2014; the issuance of more than 200 subpoenas; the examination of more than 36,000 bank, government, personal and campaign records belonging to former Speaker Fox; and forensic examinations of several computers and other electronic devices.
United States Attorney Peter F. Neronha, Rhode Island Attorney General Peter F. Kilmartin, FBI Special Agent in Charge Vincent B. Lisi, IRS Criminal Investigation Special Agent in Charge William P. Offord, and Rhode Island State Police Superintendent Colonel Steven G. O’Donnell today announced the conclusion of the investigation and the filing of the Information, together with a Plea Agreement which, if accepted by the District Court, will result in Former Speaker Fox being sentenced to three years in federal prison.
United States Attorney Peter F. Neronha commented, “When the search warrants in this case were executed nearly a year ago, there was talk about the State House being ‘the People’s House.’ I agree completely. The People’s House should be occupied by elected officials who hold office to serve the people, not themselves. As federal and state prosecutors, and federal and state law enforcement officials, we represent the people of the United States and the people of Rhode Island. And we will go anywhere – anywhere – we can lawfully go to obtain the evidence we need to protect their interests.”
“Last year, as the federal case began against Speaker Fox, I pledged to U.S. Attorney Neronha, the support and resources of the Department of Attorney General should they become necessary. During the investigation, when the evidence of the bribery was discovered, the State possessed the prosecutorial tools necessary to move forward with this charge. It was that need and the state’s ability to move forward which helped secure a just resolution today,” said Attorney General Peter F. Kilmartin. “The close working relationship between the Department of Attorney General and the United States Attorney’s Office allows both offices to leverage state and federal resources to bring those who violate our laws – and the public’s trust – to justice. Hopefully, the state and its citizens can now move on from this case. I wish to commend and thank Assistant Attorney General Patrick Youngs for his effort in this case.”
Vincent B. Lisi, Special Agent in Charge of the FBI’s Boston Division, added, “The citizens of Rhode Island put a lot of trust in their elected officials and once again another elected official has betrayed that trust by using his position to line his own pockets. Mr. Fox will now pay the price for his decision to put his personal greed before his duty to those he was supposed to serve.”
“Gordon Fox accepted a bribe, diverted campaign and PAC funds for his personal use, and omitted this illegal income from his federal income tax returns,” stated William Offord, Special Agent in Charge of IRS Criminal Investigation. “No public official gets a free pass to ignore the tax laws, and IRS Criminal Investigation works to ensure that everyone pays their fair share”.
Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police added, “I commend the United States Attorney and the Attorney General and their prosecutors, agents from the FBI, IRS, and our State Police for their unwavering commitment to justice. Corruption impacts every aspect of our free society, and we stand committed to ferret out and to prosecute those who prey on the public’s trust.”
According to court documents filed in this matter, from February 2008 until March of 2014, just before the execution of federal search warrants at his State House office and home, former Speaker Fox repeatedly used money received from campaign donors to pay for personal expenses. After transferring the money from his campaign accounts to his personal accounts, former Speaker Fox used the money - $108,000 in all - to pay the mortgage on his home, the loan payments on his car, and the balance on his personal American Express card, which he used to make purchases at various retail outlets. To conceal this fraudulent conduct, former Speaker Fox falsified his mandatory Rhode Island Board of Elections filings. According to documents filed in court, at the conclusion of 2013, his filing claimed a balance in the Friends of Fox campaign account of $212,060.66, when in fact the balance in the account was $52,403.02.
According to court documents, in the course of the investigation into former Speaker Fox’s fraudulent diversion of campaign funds for his personal use, prosecutors and investigators discovered that, in 2008, former Speaker Fox accepted a $52,000 bribe while serving as an appointed member and Vice-Chairman of the City Providence Board of Licenses. As alleged in court documents, in 2008, the Shark Sushi Bar and Grill, a new restaurant on Thayer Street in Providence, applied for a liquor license from the Providence Board of Licenses. There was considerable neighborhood opposition to the application. As alleged, in the face of that opposition, Shark Bar partners met with then Vice-Chairman Fox. As a result of this meeting, Vice-Chairman Fox agreed to accept a bribe from the partners in exchange for supporting the Shark Bar application before the Board.
According to court documents, at a Board of Licenses hearing on August 13, 2008, two Shark Bar partners testified in favor of the application, and members of the public voiced their opposition. The Board took the application under advisement. At a subsequent Board hearing on August 29, 2008, Vice-Chairman Fox, pursuant to his agreement with the Shark Bar partners, spoke in detail regarding why the license should be awarded, and moved the Board to approve the Shark Bar’s application. The Board voted to approve the Shark Bar’s application.
The investigation revealed that within a week following the Board’s vote to approve the license application, two Shark Bar partners delivered $32,000 in cash and checks to then Vice-Chairman Fox. A third, silent Shark Bar partner delivered an additional $17,500 to Fox through one of the other Shark Bar partners. In all, Vice-Chairman Fox accepted a $52,000 bribe in exchange for his official action as Vice-Chairman of the Providence Board of Licenses on behalf of the Shark Bar.
Additionally, according to court documents, the investigation determined that for the tax years 2008 through 2012, former Speaker Fox filed false tax returns, in that he knowingly omitted from his statement of total income for each of those calendar years the personal income he received as a result of his receipt of the bribe in 2008 and his fraudulent transfers from his campaign accounts to his personal accounts.
The case is being jointly prosecuted in federal court by Assistant U.S. Attorneys Dulce Donovan and Adi Goldstein, and Rhode Island Assistant Attorney General J. Patrick Youngs.
Gordon Fox is scheduled to appear before U.S. District Court Judge Mary M. Lisi at 12:00 p.m. today for arraignment on the three-count Information and for a change-of-plea hearing.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Former Housing Director in Liberal Sentenced for Wire FraudRead the Press Release
WICHITA, KAN. - A former executive director of the housing authority for the city of Liberal, Kan., was sentenced to a year on federal supervised release and 250 hours of community service for wire fraud, U.S. Attorney Barry Grissom said.
Carol Beckwith, 64, Eufaula, Okla., pleaded guilty to one count of wire fraud. In her plea, she admitted that before she retired in May 2013 she falsified a copy of the housing authority’s personnel policies. She added language in the section defining retirement compensation so she could collect one-half the value of her accumulated sick leave. She provided the fabricated copy of the policy to the new executive director when she retired and made demand for half her accumulated sick leave in the amount of $30,855.
In October 2013 she caused a civil complaint to be filed in U.S. District Court in Kansas seeking to be paid for half her sick leave and referencing the falsified personnel policy.
Grissom commended the Housing and Urban Development - OIG and Assistant U.S. Attorney Jason Hart for their work on the case.
Former Gulfstream Executive Sentenced to over 11 Years in Federal Prison for Embezzling over $10 Million from the Aerospace CompanyRead the Press Release
LOS ANGELES – The former director of finance and accounting at Gulfstream Aerospace Corporation’s Long Beach facility was sentenced today to 135 months in federal prison for embezzling more than $10 million from his employer over a 13-year period.
Marvin Jay Caukin, 66, of Calabasas, was sentenced this morning by United States District Judge John F. Walter, who remanded the defendant into custody at the conclusion of the sentencing hearing.
In addition to the prison term, Judge Walter ordered the defendant to pay $10.25 million in restitution, and to forfeit to the government his interest of at least $2.4 million in properties in Calabasas and Toluca Lake.
Caukin pleaded guilty in January to conspiracy to commit mail fraud, admitting then that he participated in a long-running scheme to defraud Gulfstream by submitting fictitious business invoices to the aerospace company. According to court documents, the invoices were from bogus companies that had been set up by Caukin’s relatives and associates, and had names that were similar to actual businesses involved in the aerospace industry. Once Gulfstream issued checks in response to the invoices from the bogus vendors, Caukin used the funds to pay for range of personal expenses, including his mortgage, car payments, credit cards and professional escorts.
The scheme ran from soon after he was hired by Gulfstream in the fall of 2000 until approximately May 2013, when he was terminated by the company for failing to disclose a prior embezzlement conviction in federal court and lying about a job he supposedly had while he was actually in prison.
Caukin “proved that short prison sentences do not deter him when he resumed embezzling just after being released from a combined 39-month sentence,” prosecutors wrote in a sentencing memo filed with the court.
“[F]rom 1994 until 2013, when defendant was fired [from Gulfstream], the only years defendant was not continually committing fraud were those in which he was incarcerated.”
The investigation into Caukin’s scheme was conducted by the Federal Bureau of Investigation and the United States Postal Inspection Service.
Release No. 15-063
Former Fund Coordinator Pleads Guilty to Theft from Union FundRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that John Francis Songer (45, DeBary) has pleaded guilty to theft from an employee benefit plan. He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set. Songer was indicted on February 25, 2015.
According to court documents, Songer was the Apprenticeship Administrator and Coordinator of the Joint Apprenticeship Training Committee and Trust Fund for the Sheet Metal Workers’ Local Union No. 15. Over an almost six-year period, Songer used a credit card belonging to the Fund to make more than $50,000 in unauthorized charges. The credit card bill was paid by checks written on the Fund’s bank account. Songer’s unauthorized charges included personal expenditures for adult entertainment, restaurants, and gambling. He also incurred charges for travel-related items that the Fund was not obligated to pay. As part of his plea agreement, Songer has agreed to pay more than $50,000 in restitution to the Fund.
"This criminal action demonstrates the Employee Benefits Security Administration's resolve to vigorously enforce the law to ensure that those who steal from employee benefit plans are brought to justice," said Isabel Colon, Regional Director of EBSA's Atlanta Regional Office.
This case was investigated by the U.S. Department of Labor’s Employee Benefits Security Administration, with assistance from the United States Marshals Service. It is being prosecuted by Assistant United States Attorney Roger B. Handberg.
Former Assistant Town Manager in Abingdon Pleads Guilty to Program FraudRead the Press Release
Abingdon, VIRGINIA – The former assistant town manager of Abingdon pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to one count of program fraud.
William Garrett Jackson, 37, of Abingdon, Virginia, waived his right to be indicted and pled guilty today to one count of theft from a program receiving federal funds. At sentencing, Jackson faces a maximum possible penalty of ten years in prison and/or a fine of up to $250,000.
Jackson admitted today that from 2007 through 2014 he used his town-issued credit card, a card to be used only for official business, for personal expenses. Jackson admitted to using the card for personal expenses such as purchasing a subscription to Netflix, buying groceries, paying his personal cell phone bills, purchasing electronics, and purchasing other unauthorized goods and services. In all, Jackson spent $76,404 on the town’s credit card for personal expenses.
As part of his guilty plea, Jackson has agreed to pay back the full amount of the town’s loss, $76,404, by September 1, 2015.
The investigation of the case was conducted by the United States Secret Service, Virginia State Police, and Town of Abingdon Police Department. Assistant United States Attorney Zachary Lee and Special Assistant United States Attorney Kevin Jayne are prosecuting the case for the United States.
East Hartford Man Sentenced to More Than 5 Years in Federal Prison for Role in Narcotics Trafficking RingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES BROWN, also known as “Decky,” 25, of East Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 66 months of imprisonment, followed by four years of supervised release, for his role in a narcotics trafficking ring.
This matter stems from a joint law enforcement investigation headed by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) into a narcotics trafficking operation headed by Luther Nance, also known as “Papers” and “Cash.” The investigation, which included numerous controlled purchases of narcotics and physical surveillance, revealed that Nance and his associates sold crack cocaine and heroin in several communities throughout Connecticut utilizing multiple bases of operation, including a house on Carroll Road in East Hartford, the Sheldon Oaks housing complex in Hartford and an apartment on Valley Street in Willimantic.
According to court documents and statements made in court, BROWN received wholesale quantities of crack cocaine from Nance and other members of the conspiracy and supplied the drug in smaller quantities to dealers and customers. At times, BROWN converted, or “cooked,” cocaine into crack cocaine. The investigation revealed that BROWN and other members of his crew possessed firearms in association with their narcotics trafficking activities.
On June 27, 2013, a federal grand jury returned a 51-count superseding indictment charging BROWN, Nance and 13 other individuals with narcotics conspiracy and related offenses.
On August 19, 2014, BROWN pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base (“crack cocaine”).
BROWN has been detained in state custody since January 2013 and is serving a state sentence of four years of incarceration and six years of special parole for sale of narcotics. The federal sentence imposed today will run concurrently with the remainder of BROWN’s state sentence.
On March 7, 2014, Nance pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of cocaine base, and one count of conspiracy to engage in money laundering. He is detained while awaiting sentencing.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation Division, the U.S. Marshals Service, the Office of the Chief State’s Attorney, the State’s Attorney for the Judicial District of Hartford, and the Hartford, Willimantic, East Hartford, Enfield and Middletown Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Dallas Man Sentenced to 97 Months in Federal Prison on Drug and Child Obscenity ConvictionsRead the Press Release
DALLAS — A 40-year-old Dallas man who pleaded guilty last year to three federal felony offenses in an investigation that began when law enforcement learned he was claiming packages containing anabolic steroids from a postal center in Dallas, was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Nicholas Todd Freed was sentenced by U.S. District Judge Sam A. Lindsay to 97 months in federal prison. He has been in custody since his arrest in late January 2014 by a Task Force Officer with Homeland Security Investigations (HSI), as he was attempting to claim a package containing anabolic steroids at the Deep Ellum Postal Center in Dallas. Pursuant to the arrest, law enforcement discovered Freed possessed a counterfeit U.S. Marshals Service (USMS) credential and badge. Freed was charged in a federal criminal complaint with attempting to possess anabolic steroids and falsely making, forging, counterfeiting and altering a USMS seal. Later, the investigation revealed that Freed also possessed numerous thumb drives containing images of minors engaging in obscene, sexually explicit conduct.
Freed pleaded guilty in November 2014 to a three-count superseding information charging one count of attempted possession with intent to distribute a controlled substance, one count of possession of a document-making implement with intent that it be used in the production of false documents, and one count of possession of obscene visual representations of the sexual abuse of children.
In early January 2014, U.S. Customs and Border Protection (CBP) in San Francisco identified a U.S. Postal Service Express Mail parcel, arriving from Singapore, as suspicious. The parcel contained approximately 1,087 grams of an oily liquid, later determined to contain an anabolic steroid, and it was addressed to JPEG Press, 3100 Main Street #1, Dallas, Texas 75226, which is the address of the Deep Ellum Postal Center. CBP notified HSI in Dallas of the parcel and its contents.
The ensuing investigation determined that the account for the rental box at the postal center was opened with fictitious information, and the box frequently received similar packages. On January 28, 2014, when the HSI task force officer approached Freed who was at the postal center to pick up the package, he discovered Freed was carrying a USMS badge and apparent counterfeit USMS credentials identifying him as a USMS Chief Inspector.
Later that day during a consensual search at Freed’s residence, law enforcement seized computers and computer equipment as well as other items Freed used to make false government identification documents, including laminating materials, blank plastic cards the size of a driver license, pages of magnetic strips for the backs of identification cards, ink consistent with the Texas seal on state licenses and identifications cards, a laminating press, hologram materials of official government seals, pages of names and identities used in the production of the false identifications, and head shots.
Upon further examination of the seized thumb drives, the task force officer discovered visual depictions of minors, including prepubescent minors, engaging in obscene, sexually explicit conduct.
U.S. Immigration and Customs Enforcement’s HSI , CBP, and the Balch Springs and Dallas Police Departments investigated. Assistant U.S. Attorney Keith Robinson prosecuted.
D.C. man sentenced to six years in federal prison for illegal possession of a firearmRead the Press Release
Charleston, W.Va. – A Washington D.C. convicted felon who illegally possessed a firearm was sentenced today in federal court in Charleston to six years in federal prison, United States Attorney Booth Goodwin announced. Sean Anthony Nalle, 30, previously pleaded guilty on March 23, 2015 to pawning a semiautomatic pistol at Carl’s Pawn Shop in Parkersburg, West Virginia. Nalle was previously convicted of drug trafficking felony offenses in the District of Columbia on March 24, 2006, and June 26, 2009. These convictions make it unlawful for him to possess a firearm.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Parkersburg Police Department conducted the investigation. Assistant United States Attorney Joshua C. Hanks handled the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Corporate Executive Indicted for Allegedly Lying to Federal Agents During Public Corruption Investigation Involving Dallas County CommissionerRead the Press Release
DALLAS — A federal grand jury has returned a two-count indictment charging an Austin, Texas, corporate executive with offenses related to a public corruption investigation involving Dallas County Commissioner John Wiley Price and others, announced John Parker, Acting U.S. Attorney for the Northern District of Texas and Richard L. Durbin, Jr., Acting U.S. Attorney for the Western District of Texas.
Helena Tantillo, 58, of Austin, is charged in the indictment, returned by a federal grand jury in Austin last week, and unsealed today, with two counts of making a false statement to law enforcement. Tantillo surrendered to federal authorities in Austin today and made her initial appearance before a U.S. Magistrate Judge who released her on bond.
A federal criminal indictment is a written statement of the essential facts of the offense charged. A defendant is entitled to the presumption of innocence until proven guilty. The statutory penalty, upon conviction, for the offense charged is five years in federal prison and a $250,000 fine, per count.
The FBI and Internal Revenue Service Criminal Investigation are conducting the investigation. Assistant U.S. Attorneys Walt M. Junker and J. Nicholas Bunch and Deputy Criminal Chief Assistant U.S. Attorney Katherine Miller are prosecuting.
Convicted felon pleads guilty to possession with intent to deliver heroinRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced today that Jazzmyn Rochon Litzy, aka Zoe, 35, from Cabell County, West Virginia, pleaded guilty in federal court in Huntington to possession with intent to deliver heroin. In December of 2014, a member of the Drug Enforcement Administration (DEA) working in an undercover capacity, bought drugs twice from Litzy. Following these drug deals , DEA obtained a search warrant for Litzy’s Huntington home at 127 Oakland Avenue. The search of the home yielded more than 70 grams of heroin, and several firearms. Litzy was previously convicted of robbery in 2001, and drug trafficking and tampering with evidence in 2007. These felony convictions make it a federal crime for Litzy to possess any firearm.
Litzy faces up to 20 years in federal prison. She is scheduled to be sentenced on September 21, 2015.
United States District Judge Robert C. Chambers, presided over the plea hearing.
The investigation is being conducted by the Drug Enforcement Administration, the Huntington Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Timothy D. Boggess is handling the prosecution.
Colorado Man Sentenced in New Mexico for Robbing Wells Fargo Bank in Farmington in September 2012 and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Robert O’Dell Neihart, 44, of Ignacio, Colo., was sentenced this afternoon in federal court in Las Cruces, N.M., to 148 months in prison for the armed robbery of a Wells Fargo Bank branch located in in Farmington, N.M. Neihart will be on supervised release for three years after completing his prison sentence.
Neihart was arrested in Nov. 2012, on a two-count indictment charging him with the armed robbery of the Wells Fargo Bank branch located on East Main Street in Farmington on Sept. 21, 2012, and using a firearm during a crime of violence. Count 1 of the indictment also charged co-defendant Denise Myrick, 45, also of Ignacio, Colo., with aiding and abetting Neihart in robbing the bank. Prosecution of the case against Neihart was delayed by competency proceedings.
On Feb. 20, 2015, Neihart pled guilty to both counts of the indictment, and admitted that on Sept. 21, 2012, he robbed the bank by approaching a teller and handing her a two-page letter demanding money. Neihart further admitted that he had a pistol in his possession at the time of the robbery, which he later used to shoot at police vehicles that pursued him after the bank robbery. Neihart was arrested at his Colorado residence later that day by the officers who were in pursuit.
Myrick pled guilty on Dec. 4, 2013, to a misdemeanor information charging her with aiding and abetting a bank robbery. In entering her guilty plea, Myrick admitted driving Neihart to the bank and assisting him in his attempted escape. She was sentenced on Mar. 4, 2014, to three years of probation.
This case was investigated by the Albuquerque and Farmington offices of the FBI, the Farmington Police Department, San Juan County Sheriff’s Office and the La Plata County (Colorado) Sheriff’s Department. The case was prosecuted by Assistant U.S. Attorney William J. Pflugrath.
Clearwater Man Sentenced for Receipt and Distribution of Infant and Toddler Child PornographyRead the Press Release
Tampa, FL – U.S. District Judge Charlene Edwards Honeywell today sentenced Jonathan Patrick Gregory Peterson (33, Clearwater) to 12 years and 7 months in federal prison for receiving and distributing child pornography. The Court also ordered him to forfeit a Sony PlayStation 3, several hard drives, and two cell phones, which he used to commit the offenses. Peterson pleaded guilty on March 3, 2015.
According to court documents, from at least October 2010, through his arrest in August 2014, Peterson actively traded pornographic images of infants and toddlers through various e-mail accounts. FBI agents identified Peterson after he tried to exchange images and videos depicting child pornography with an undercover officer. When Peterson was arrested, he admitted to trading child pornography over the Internet using his cell phone and PlayStation 3 console. A forensic examination showed that Peterson possessed more than 9,000 images of child pornography on his various devices at the time of his arrest.
This case was investigated by the Federal Bureau of Investigation and the Largo Police Department. It was prosecuted by Assistant United States Attorney Josephine W. Thomas.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Charleston heroin dealer pleads guilty in federal courtRead the Press Release
Charleston, W.Va. – Christopher Strick, 36, of Charleston, West Virginia pled guilty today in federal court in Charleston to distribution of heroin, announced United States Attorney Booth Goodwin. Strick admitted that on January 13, 2012, he sold heroin to a confidential informant working with the Metropolitan Drug Enforcement Network Team (“MDent”) in exchange for $200.00. The transaction occurred at defendant’s Edgewood Drive residence.
Strick faces up to twenty years in prison and a $1,000,000 fine when sentenced on September 22, 2015.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal heroin and pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Ceres Man Sentenced to over 7 Years in Prison for Receiving Child PornographyRead the Press Release
FRESNO, Calif. — George Esle Pires, 56, of Ceres, was sentenced today by United States District Judge Anthony W. Ishii to seven years and three months in prison for receiving child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, between November 2006 and November 2012, Pires received images of minors engaged in sexually explicit conduct.
This case was the product of an investigation by the Federal Bureau of Investigation and the Ceres Police Department. Assistant United States Attorneys Grant B. Rabenn and Jeffrey Spivak prosecuted the case.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
California Man Pleads Guilty in Prescription Drug Diversion SchemeRead the Press Release
A Corona, California, man pleaded guilty today in U.S. District Court in Cincinnati to one count of conspiracy to commit mail and wire fraud for his participation in a large-scale, nationwide prescription drug diversion scheme.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent In Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) Cincinnati Field Office announced the guilty plea, entered today by U.S. District Judge Timothy S. Black.
According to court documents, from May 2010 through December 2012, Vin Nguyen, 45, and others conspired to distribute illegally-diverted prescription drugs while concealing the true, illicit sources of the drugs. Nguyen purchased prescription drugs, including HIV medications, anti-psychotic medications and other brand name drugs, from various unlicensed and illegal sources in California and Florida. Working with co-conspirators, Nguyen then sold the drugs to other drug diverters without the statutorily required pedigree documents stating the origin of the drugs. Nguyen and his co-conspirators sold more than $6.5 million worth of diverted drugs.
“Illegal prescription drug diversion threatens the security of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “The Department of Justice will continue to protect American consumers by prosecuting those who engage in prescription drug diversion.”
From December 2011 through December 2012, Nguyen and others sold diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC). On May 6, David Miller and MIC were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license. Those charges remain pending.
Nguyen and his co-conspirators used the company name “Modern Medical” when selling drugs to Miller and MIC. Modern Medical is a real California company that had no involvement in the drug sales. Nguyen and his co-conspirators simply hijacked the name to conceal their involvement and the true, illicit drug sources.
Miller and MIC, in turn, sold the prescription drugs obtained from Nguyen – and multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio. Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico. These false pedigrees covered up the illegitimate sources of the drugs – various illicit, unlicensed suppliers, including Nguyen – and falsely stated that B&Y Wholesale was an authorized distributor of the prescription drugs.
On Feb. 19, Yusef Yassin Gomez, the owner of B&Y Wholesale in Puerto Rico, pleaded guilty to one count of conspiracy to distribute prescription drugs without a wholesale license for his role in the conspiracy.
This matter is being investigated by FDA-OCI and the USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.
California Man Pleads Guilty in Prescription Drug Diversion SchemeRead the Press Release
WASHINGTON – A Corona, California, man pleaded guilty today in U.S. District Court in Cincinnati to one count of conspiracy to commit mail and wire fraud for his participation in a large-scale, nationwide prescription drug diversion scheme.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent In Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) Cincinnati Field Office announced the guilty plea, entered today by U.S. District Judge Timothy S. Black.
According to court documents, from May 2010 through December 2012, Vin Nguyen, 45, and others conspired to distribute illegally-diverted prescription drugs while concealing the true, illicit sources of the drugs. Nguyen purchased prescription drugs, including HIV medications, anti-psychotic medications and other brand name drugs, from various unlicensed and illegal sources in California and Florida. Working with co-conspirators, Nguyen then sold the drugs to other drug diverters without the statutorily required pedigree documents stating the origin of the drugs. Nguyen and his co-conspirators sold more than $6.5 million worth of diverted drugs.
“Illegal prescription drug diversion threatens the security of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “The Department of Justice will continue to protect American consumers by prosecuting those who engage in prescription drug diversion.”
From December 2011 through December 2012, Nguyen and others sold diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC). On May 6, David Miller and MIC were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license. Those charges remain pending.
Nguyen and his co-conspirators used the company name “Modern Medical” when selling drugs to Miller and MIC. Modern Medical is a real California company that had no involvement in the drug sales. Nguyen and his co-conspirators simply hijacked the name to conceal their involvement and the true, illicit drug sources.
Miller and MIC, in turn, sold the prescription drugs obtained from Nguyen – and multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio. Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico. These false pedigrees covered up the illegitimate sources of the drugs – various illicit, unlicensed suppliers, including Nguyen – and falsely stated that B&Y Wholesale was an authorized distributor of the prescription drugs.
On Feb. 19, Yusef Yassin Gomez, the owner of B&Y Wholesale in Puerto Rico, pleaded guilty to one count of conspiracy to distribute prescription drugs without a wholesale license for his role in the conspiracy.
This matter is being investigated by FDA-OCI and the USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.
Businessman Sentenced for Bakersfield Drug OperationRead the Press Release
FRESNO, Calif. — Joseph Nolan, 59, a Malibu businessman and Ventura County resident, was sentenced today to 18 months in prison, to be followed by three years of supervised release, for conspiring to manufacture, distribute, and possess with intent to distribute marijuana cultivated at a warehouse that he owned in Bakersfield, according to U.S. Attorney Benjamin B. Wagner.
According to the plea agreement and other court documents, Nolan set up a sophisticated indoor marijuana cultivation operation in a light industrial area in Bakersfield using K&N Manufacturing, his stone cutting business, as a front. Nolan used the accounts of another business, Cross Creek Building Center in Malibu, to pay the growers and cover the costs of electricity, supplies, and equipment. The Bakersfield marijuana operation supplied marijuana to the Blue Banana, a marijuana storefront and cultivation operation in Northridge that was shut down by the City of Los Angeles for failure to comply with local law. The Bakersfield marijuana operation was disrupted when law enforcement officers obtained and executed a search warrant there. During the search, officers seized 1,161 marijuana plants and 55 pounds of processed marijuana valued at over $4.8 million, along with thousands of dollars of marijuana cultivation equipment. In sentencing Nolan, Senior U.S. District Judge Anthony W. Ishii ordered the forfeiture of over 300 pieces of equipment used for the indoor cultivation of marijuana.
Nolan was the last of six defendants to be sentenced in connection with the marijuana operation. Mark Jeff Zeldes, 53, of Broomfield, Colorado, was sentenced last month to three years and eight months in prison for his involvement in the drug conspiracy. Joseph Taylor, 55, of Thousand Oaks, California, was sentenced to three years and one month in prison. Mark McGrath, 53, of Bakersfield, was sentenced to two years and two months in prison. Dustin York, 37, of Newbury, California, was sentenced to one year and 10 months in prison. Jeremy Dunn, 22, of Thousand Oaks, was sentenced to one year and three months in prison.
The case was the product of an investigation conducted by the Drug Enforcement Administration, the Bakersfield Police Department, the Kern County Sheriff’s Office, and the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) Task Force. Assistant U.S. Attorney Karen Escobar prosecuted the case.
Bonners Ferry Man Sentenced for Violent ATM Theft in McCall and String of Prior ATM Larcenies across the U.S.Read the Press Release
BOISE — Nathan Paul Davenport, 35, formerly of Bonners Ferry, Idaho, was sentenced today to 217 months in prison for ATM larceny, conspiracy, and use of a firearm, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Davenport to serve five years of supervised release after his prison term, and pay restitution to victims, primarily the affected banks, of $1,174,928.32. The Court also ordered forfeiture of any proceeds of the crimes. Davenport’s sentence will be credited for his time in custody since his arrest. He pleaded guilty to the charges on March 30, 2015.
According to the plea agreement, on January 10, 2014, Davenport and his co-defendant, Matthew Taber Annable, aiding and abetting each other, broke into and stole cash from an automated teller machine (ATM) located at the Idaho First Bank in McCall, Idaho. They stole a Ford truck in McCall, which Davenport used to pull the door off the ATM. When Davenport was escaping with the proceeds, he twice stopped the stolen truck and fired a Ruger .223 caliber assault rifle at pursing officers of the McCall Police Department. The officers’ vehicles were hit numerous times; fortunately no one was injured. Davenport and Annable communicated over an open cell phone connection during the larceny and shootings and then met up after Davenport evaded the pursuing McCall Police officers. They moved the firearms, tools, and stolen ATM money from the stolen Ford to their own vehicle and escaped. Davenport and Annable were arrested without incident on January 12, 2014, in Orem, Utah. Davenport was carrying a bag with the proceeds of the McCall ATM larceny, approximately $27,000. The two men were in custody on related Wyoming charges prior to being transported to Boise on the Idaho charges. In the District of Wyoming, both men pleaded guilty to single counts of ATM theft and aiding and abetting and each received a fourteen month prison sentence.
The McCall shooting and larceny were the final crimes in an ATM larceny spree that stretched from October, 2012, through January, 2014, and through Florida, Texas, Colorado, Wyoming and other states. These larcenies included two committed against Idaho Banking Company in Boise and Meridian on January 5, 2014.
Annable pleaded guilty on April 20, 2015, to bank larceny by use of a dangerous weapon and conspiracy to commit bank larceny. He is scheduled to be sentenced on August 24, 2015, before Judge Lodge.
The case was investigated by the Federal Bureau of Investigation, the Idaho State Police, the Valley County Sheriff’s Office, and the McCall Police Department.
Mapquest map demonstrating the locations of ATM larcenies that Davenport admitted in his plea agreement. The ATM in McCall after Davenport ripped off the door and stole the money. Proceeds of the McCall ATM larceny found in Davenport’s possession at the time of his arrest.
Ruger .223 assault rifle used by Davenport to shoot at pursuing officers of the McCall Police Department.Arkansas Chiropractor Pleads Guilty to Federal Tax CrimeRead the Press Release
An Arkansas chiropractor pleaded guilty today in the U.S. District Court in the Western District of Arkansas to corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Conner Eldridge of the Western District of Arkansas. He was previously convicted of federal tax crimes and sentenced to prison.
According to court documents, Philip Roberts, 60, of Fort Smith, Arkansas, filed a series of false and fraudulent documents with the IRS in an effort to obstruct or impede the due administration of the internal revenue laws, including filing false financial instruments that claimed millions of dollars of transactions with both the Secretary of the Treasury and the IRS Commissioner, and filing IRS forms that falsely reported payments. In 2000, after a jury trial, Roberts was convicted of two counts of willfully failing to file federal income tax returns and sentenced to serve 16 months in federal prison.
Roberts’ sentencing hearing has not been scheduled yet before the Honorable U.S. District Judge Timothy L. Brooks of the Western District of Arkansas. Roberts faces a statutory maximum sentence of three years in prison, one year of supervised release and a $250,000 fine for obstructing and impeding the IRS.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Eldridge commended special agents of the IRS and the Treasury Inspector General for Tax Administration, who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division and Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas, who are prosecuting the case.
Another member of Newman Drug Network pleads guilty to drug traffickingRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Booth Goodwin announced that Mark Silverburg, also known as “Dip,” 41, of Lexington, Kentucky and Alpharetta, Georgia, was sentenced to 41 months imprisonment in federal court in Huntington. Silverburg had previously pleaded guilty in October of 2014 to conspiring with others to distribute cocaine and marijuana. Silverburg admitted that between approximately 2010 and January 20, 2014, he supplied cocaine and marijuana for Kenneth Newman, also known as “K-Kutta.” Silverburg, along with others working for him, transported cocaine from the Lexington, Kentucky area to Newman in Huntington. One of those individuals, Leroy Wilson, previously plead guilty to his role as a courier of drugs and money for Silverburg.
On January 8, 2014, Wilson transported approximately $6,800 from Newman’s residence on Artisan Avenue in Huntington to Silverburg near Lexington, Kentucky. On January 9, 2014, Silverburg instructed Wilson to travel to Huntington from Lexington to Newman’s residence. Prior to that drive, Silverburg placed a brown paper bag in the trunk of the car Wilson was driving. Once Wilson arrived at Newman’s residence, Newman took two plastic bags full of cocaine out of the brown paper bag. In a statement given to agents with the Drug Enforcement Administration, Wilson estimated the total weight of the cocaine to be between six and nine ounces.
Silverburg, Kenneth and George Newman, and seven other defendants have pled guilty to various charges stemming from the yearlong investigation by agents the DEA, Huntington Police Department, ATF, and the Metropolitan Drug Enforcement Network Team. The investigation revealed that in addition to cocaine and heroin, members of the Newman drug trafficking conspiracy were responsible for distributing oxycodone, crack cocaine, morphine, MDMA, known on the street as “Molly” or “Ecstasy,” and marijuana.
The case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
***media Advisory***Read the Press Release
ALBUQUERQUE – James D. Ginger, Ph.D., the court-appointed independent monitor overseeing the reform process of the Albuquerque Police Department, will hold a press conference to introduce the members of the monitoring team and discuss the role of the Independent Monitor. Dr. Ginger will be joined by U.S. Attorney Damon P. Martinez, Albuquerque Mayor Richard M. Berry, City Councilor Trudy Jones, Albuquerque Police Chief Gorden Eden, Jr., Albuquerque City Attorney Jessica M. Hernandez and President Stephanie Lopez of the Albuquerque Police Officers’ Association. The press conference will be held TOMORROW, JUNE 23, 2015 AT 10:00 A.M. at the U.S. Attorney’s Office. No further information will be released until the press conference.
WHO: James D. Ginger, Ph.D., Court-Appointed Independent Monitor
U.S. Attorney Damon P. Martinez
Albuquerque Mayor Richard M. Berry
Albuquerque City Councilor Trudy Jones
Albuquerque Police Chief Gorden Eden, Jr.
Albuquerque City Attorney Jessica M. Hernandez
President Stephanie Lopez, Albuquerque Police Officers’ Association
WHAT: Press conference to introduce monitoring team for reform process of
Albuquerque Police Department
WHEN: TUESDAY, JUNE 23, 2015, 10:00 A.M.
WHERE: U.S. Attorney’s Office
10th Floor Multi-Media Room (Reception on 9th Floor)
201 Third Street NW
Albuquerque, NM 87102
OPEN PRESS
NOTE: All media must present government-issued photo ID (such as driver’s license) as well as valid media credentials. Media may begin to arrive at 9:45 a.m. Inquiries regarding logistics should be directed to Alyssa Ferda at 505-224-1480 or [email protected].
19 June 2015
Wyatt Detention Center Correctional Officer Sentenced for Accepting Payment to Deliver Contraband to an InmateRead the Press Release
PROVIDENCE, R.I. – Scott William Allen Denton, 32, of Warwick, a former correctional officer and employee at the Wyatt Detention Center in Central Falls, R.I., was sentenced in U.S. District Court in Providence on Thursday by U.S. District Court Judge John J. McConnell, Jr., to three years probation and ordered to perform 300 hours of community service for accepting $500 in cash payments to deliver contraband to an inmate.
Denton pleaded guilty on March 6, 2015, to one count of bribery by a public official. Denton has resigned from his position at the Wyatt Detention Center.
Denton’s sentence is announced by United States Attorney Peter F. Neronha and Department of Justice Office of the Inspector General Special Agent in Charge Ronald G. Gardella, New York Field Office.
At the time of his guilty plea, Denton admitted to the court that he agreed to accept $500 in cash payments from an inmate’s family to deliver pills and pornography to the inmate. Denton admitted that he delivered the contraband after the inmate’s wife made a $200 cash deposit into his bank account on March 7, 2013, and a $300 cash deposit on May 17, 2013.
The case was prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
The matter was investigated by the Department of Justice Office of Inspector General.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Willapa Bay Oyster Processor and Company President Plead Guilty to Violating Clean Water ActRead the Press Release
Ocean Park, Washington oyster processing company WIEGARDT BROTHERS, INC. (WBI) and company President and majority owner FREDERIC “FRITZ” WIEGARDT, pleaded guilty today in U.S. District Court in Tacoma to violating the Clean Water Act, announced U.S. Attorney Annette L. Hayes. The company admits that from at least 2012 to 2014, the company violated its permit to discharge effluent into Willapa Bay. Specifically, the company President knew that the company’s General Manager was not properly performing the required monthly effluent sampling as required by the permit. As part of its guilty plea WIEGARDT BROTHERS, INC. agreed to pay a $100,000 fine, make a $75,000 community service payment, implement an EPA approved environmental management system to insure future compliance, and publish a public apology in the Pacific Coast Shellfish Growers Association’s quarterly newsletter. As part of his plea agreement, Mr. WIEGARDT is jointly responsible for payment of the $100,000 criminal fine and must complete 75 hours of community service. Under the terms of the plea agreements, Magistrate Judge David W. Christel is not bound by the sentencing agreements and is free to impose any sentence allowed by law.
“Protection of our environment is at the heart of Clean Water Act,” said U.S. Attorney Annette L. Hayes. “Here, a company that profits from our region’s clean waters failed to take important steps to protect those very resources. These pleas, including the mandated environmental management system, will provide regulatory officials the means to monitor the company’s compliance efforts going forward.”
“America’s environmental laws protect human health by keeping our harbors, bays and waterways from becoming dumping grounds for waste materials,” said Lance Ehrig, Acting Special Agent in Charge of EPA’s criminal enforcement program in the state of Washington. “The defendants failed to take the necessary steps to verify that wastewater discharges from the production facility did not include pollutants above approved permit limits. Given this failure, it is appropriate that the company pay to improve Willapa Bay, one of the most pristine estuaries in the United States, and implement a compliance plan to help assure this type of criminal violation doesn’t happen again.”
According to the plea agreement the oyster processing company has a National Pollution Discharge Elimination System (NPDES) permit which requires monthly testing to ensure the wastewater discharged from the plant does not have harmful levels of pollutants such as fecal coliform. The water samples are to be taken from the discharge pipe with the lab analysis and data submitted to the Washington State Department of Ecology. At some point before 2012, WIEGARDT became aware that the general manager at the plant was not taking the samples from the discharge pipe because some of the equipment was not working properly. In 2012, WIEGARDT was informed by the general manager that the samples were being taken from the “bubbler,” a water and air based cleaning system. Sampling from this location is not representative of the facility’s waste stream and is not authorized by the facility’s NPDES permit. Indeed, sampling from the bubbler – the location where shucked oysters are cleaned – failed to account for the vast majority of wastewater components that were discharged from the facility during hours of operation.
After being notified about the improper sampling and reporting, WIEGARDT took no action for more than a year. On August 22, 2014 the company reported the violations of the NPDES permit to the Department of Ecology and has been working with environmental regulators on a remediation plan. Given the company’s practices, regulators were unable to assess whether the violations resulted in any environmental harm.
The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID) and is being prosecuted by Assistant United States Attorney James Oesterle and Special Assistant United States Attorney Karla Perrin.
Westerly Bank Robber Sentenced to Nearly Six Years in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – Lawrence M. Sullivan, 36, of Pawcatuck, Conn., was sentenced in U.S. District Court in Providence on Thursday to 70 months in federal prison for robbing a branch office of the Washington Trust Company in Westerly, R.I., on September 15, 2014, announced United States Attorney Peter F. Neronha and Westerly Police Chief Edward W. St. Clair.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Sullivan to serve three years supervised release upon completion of his prison term. Sullivan pleaded guilty on March 2, 2015, to one count of bank robbery.
At the time of his guilty plea, Sullivan admitted to the court that on September 15, 2014, he approached a teller at a Washington Trust Company branch office located inside a supermarket in Westerly and demanded cash. According to the teller, Sullivan threatened to “start shooting” if his demands were not met. The teller gave Sullivan $1,049.
On September 16, 2014, acting on information provided by Westerly Police Department detectives, Groton, Conn., police located and arrested Sullivan at a motel in Groton. Sullivan was discovered hiding inside a storage closet at the motel.
According to court records, at the time of his arrest, Sullivan was serving a term of 3 years federal supervised release, having recently completed serving a 63-month federal prison sentence imposed in February 2010 for robbing two banks in Connecticut and one in Maine, in 2008 and 2009. He pleaded guilty in U.S. District Court in New Haven in December 2009 to two counts of bank robbery.
The case was prosecuted by Assistant U.S. Attorney Sandra R. Hebert.
The FBI and the Groton, Conn., Police Department assisted the Westerly Police Department in the investigation of this matter.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Violent Bloods Gang Member Sentenced to Seven Years in PrisonRead the Press Release
Woodbridge Man involved in Armed Robbery and Assault Crimes
ALEXANDRIA, Va. – Johnathan Davon Coleman, aka “Swag,” 23, of Woodbridge, Virginia, was sentenced today to 84 months in prison, followed by five of supervised release for his role in the armed robbery of an escort.
Coleman pleaded guilty on March 18, 2015, to using, carrying, and brandishing a firearm during or in relation to a crime of violence. According to court documents, Coleman, along with another Bloods gang member, robbed an escort at gun point on June 26, 2013, at a Dumfries, Virginia hotel. Coleman set up the escort for the robbery by pretending to be a client. He pushed his way into her hotel room, shoved the victim into a mirror, and ultimately robbed her while brandishing a firearm. Court records also reveal that Coleman took part in a Nov. 10, 2014, assault on a residence that involved attacking an individual who answered the door, throwing bricks through the windows of the residence, and discharging a firearm into the residence. This incident occurred in Prince William County, Virginia.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police; and Stephan M. Hudson, Prince William County Chief of Police; made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema.
This case was investigated by the FBI’s Washington Field Office, the Fairfax County Police Department, and the Prince William County Police Department. Assistant U.S. Attorney G. Zachary Terwilliger is prosecuting the case with assistance from the Prince William County and Spotsylvania County Commonwealth Attorneys’ Offices.
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. 1:15-cr-012.
United States Files Suit against Texas Subsidiary of BAE Systems Alleging False Claims under Army Contract for TrucksRead the Press Release
The United States has filed a complaint against BAE Systems Tactical Vehicle Systems LP (BAE) for knowingly overcharging the Army for materials under a military truck contract, the Justice Department announced today. BAE is a subsidiary of BAE Systems Inc., headquartered in Arlington, Virginia, which is owned by BAE Systems plc, a global defense, security and aerospace company headquartered in London. BAE is located in Sealy, Texas.
“Those who do business with the United States must act in good faith,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, the head of the Justice Department’s Civil Division. “We will ensure that contractors do not abuse the military’s procurement process at the expense of our troops abroad and the taxpayers at home.”
In 2008, the Army Tactical Command Life Cycle Management Command, in Warren, Michigan, awarded BAE a contract to build more than 20,000 trucks for the military, known as Family of Medium Tactical Vehicles (FMTVs). Government procurement law requires contractors negotiating government contracts above a threshold price, to disclose cost or pricing data relevant to the negotiations. The purpose of requiring a contractor to disclose this information is to put the government on equal footing with the contractor and ensure a fair and reasonable price. The government alleges that BAE knowingly inflated the price of the FMTV contract by concealing cost and pricing data on numerous parts and materials during contract negotiations, despite having certified that the data it had disclosed was accurate, complete and current.
“We expect government contractors to act with integrity when they fulfill their contractual obligations to the government,” said U.S. Attorney Kenneth Magidson of the Southern District of Texas. “Breach of that trust results in being held accountable in court.”
“Private companies are entitled to earn an honest profit from procurement contracts with the U.S. government, but they may not knowingly overcharge the military for supplies and materials,” said U.S. Attorney Barbara McQuade of the Eastern District of Michigan. “The conduct alleged in this complaint is akin to charging $600 for a hammer.”
The government’s complaint alleges claims under the Truth-in-Negotiations Act, which requires the truthful disclosure of cost or pricing data, and the False Claims Act, which prohibits knowingly submitting false claims for federal funds.
The lawsuit is being handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Southern District of Texas and the U.S. Attorney’s Office of the Eastern District of Michigan. Investigative support is being provided by the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Army Criminal Investigation Command.
The case is captioned United States v. BAE Systems Tactical Vehicle Systems, LP (E.D. Mich.). The claims asserted in this case are allegations only; there has been no determination of liability.
US Attorney Wagner’s Remarks on the Shooting Incident in Charleston, South CarolinaRead the Press Release
SACRAMENTO, Calif. Yesterday, United States Attorney Benjamin B. Wagner sent the following remarks to various community members:
This afternoon I participated in a national conference call with other U.S. Attorneys about yesterday’s horrific shooting at the Emanuel AME Church in Charleston. The call was led by Vanita Gupta, the Acting Assistant Attorney General for the Civil Rights Division, and Bill Nettles, the U.S. Attorney in South Carolina.
As you know, a suspect is in custody. The U.S. Department of Justice has opened a federal hate crime investigation into the shooting, in addition to the murder investigation being pursued by local authorities. The FBI and ATF are working closely with local law enforcement agencies in both investigations.
There should be no doubt that this shooting was an act of domestic terrorism. Protecting Americans from the threat of terrorism of all types is the top priority of the U.S. Department of Justice. We and our federal law enforcement partners are committed to doing all we can to prevent, respond to, and prosecute such crimes.
The Attorney General [Loretta Lynch] has stated, and I agree, that there is no place for acts like these in our country or in civilized society.
U.S. Citizen Arrested for Attempting to Provide Material Support to ISIL and Other Federal OffensesRead the Press Release
Amir Said Abdul Rahman Al-Ghazi, 38, a U.S. Citizen, was arrested this morning in North Olmstead, Ohio, on charges that he attempted to provide material support to the Islamic State of Iraq and the Levant (ISIL), possessed a firearm as a convicted felon and trafficked marijuana.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Steven D. Dettelbach of the Northern District of Ohio and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division made the announcement.
“According to the allegations in the complaint, Al-Ghazi attempted to provide material support to ISIL and committed other federal weapon and drug offenses,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Today’s charges are a stark reminder that the radical and dangerous philosophies espoused by groups such as ISIL can be spread in our community through computers and social media,” said U.S. Attorney Dettelbach. “Law enforcement will remain vigilant in combating violent extremism in all its forms.”
“This arrest demonstrates law enforcement’s number one priority – to keep our communities and our nation safe,” said Special Agent in Charge Anthony. “It is clear that no area is immune from the influence of ISIL and its recruitment machine. We hope this arrest will serve as a strong message to others who may consider providing support to terrorists. The FBI and our Joint Terrorism Task Force partners are committed to identifying and stopping these individuals.”
According to the complaint, Al-Ghazi, who changed his name from Robert McCollum earlier this year, is alleged to have pledged his support to ISIL and Abu Bakr Al-Baghdadi via social media in 2014. From July 2014 to June 2015, Al-Ghazi made multiple statements trying to persuade others to join ISIL. He also expressed his own desire to perpetrate an attack on the United States and had attempted to purchase an AK-47 assault rifle. Al-Ghazi has communicated with individuals he believed to be members of ISIL in the Middle East and took steps to create propaganda videos for ISIL.
Al-Ghazi was also charged with distributing a schedule 1 controlled substance – marijuana. From the period of February 2014 through June 2015, Al-Ghazi sold almost two kilograms of marijuana to a confidential informant. He was also charged with possessing a firearm even though he had multiple prior felony convictions. On multiple occasions Al-Ghazi expressed his interest in purchasing an AK-47, eventually purchasing one from an FBI undercover employee on June 19, 2015.
This case is being investigated by the FBI’s Cleveland Division’s Joint Terrorism Task Force. This case is being prosecuted by the U.S. Attorney’s Office of the Northern District of Ohio and the National Security Division’s Counterterrorism Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Al-Ghazi Complaint
U.S. Attorney Barry Grissom to Speak at Mt. Zion Baptist ChurchRead the Press Release
KANSAS CITY, KAN. - U.S. Attorney Barry Grissom will speak during a prayer service Saturday in Kansas City, Kan., for the victims of the shooting in Charleston, S.C.
“Our thoughts and prayers are with the families and loved ones of the victims in Charleston,” Grissom said. “The Department of Justice has opened a hate crime investigation. We will use every tool to investigate this tragic event.”
The service will be from 9:15 a.m. to 10:15 a.m. Saturday at Mt. Zion Baptist Church, 417 Richmond Ave., in Kansas City, Kan. The Rev. C.L. Bachus will preside.
Two More Banks Reach Resolutions Under Justice Department's Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that two banks, Bank Linth LLB AG (Bank Linth) and Bank Sparhafen Zurich AG (BSZ), have reached resolutions under the department’s Swiss Bank Program.
“With each agreement signed under the Swiss Bank Program, we are learning more and more about the schemes individuals are employing to hide their assets overseas,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division. “At this point, the message should be clear. Those who use foreign jurisdictions to evade their U.S. tax obligations will be held fully accountable and pay a heavy price for their conduct.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
- Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
Bank Linth, one of the largest regional banks in Eastern Switzerland, was founded in 1848. It is headquartered in Uznach, Switzerland, which is approximately 35 miles southeast of Zurich. Bank Linth provided private banking and asset management services to U.S. taxpayers through private bankers based in Switzerland. It opened, serviced and profited from accounts for U.S. clients with the knowledge that many were likely not complying with their tax obligations.
Bank Linth’s cross-border banking business aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts. Bank Linth provided this assistance to U.S. clients in a variety of ways, including the following:
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Opening and maintaining accounts in the names of sham entities;
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Providing U.S. taxpayers with numbered accounts that hid the taxpayers’ identities;
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Facilitating U.S. taxpayers’ withdrawal of cash from undeclared accounts; and
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Agreeing to hold bank statements and other mail relating to accounts rather than sending them to U.S. taxpayers in the United States.
On several occasions, Bank Linth opened accounts for U.S. taxpayers through an external asset manager, and one of these accounts was opened in the name of a sham foundation. In that instance, Bank Linth knowingly accepted and included in account records forms provided by the directors of the sham foundation that falsely represented the ownership of the assets in the account for U.S. federal income tax purposes.
In accordance with the terms of the Swiss Bank Program, Bank Linth described in detail the structure of its banking business, including its management and supervisory structure, and provided the names of management and legal and compliance officials. Bank Linth further provided detailed and specific information related to its illegal U.S. cross-border business, including the bank’s misconduct, policies that contributed to that misconduct and the names of the relationship managers overseeing the bank’s U.S.-related business. Bank Linth also obtained affidavits from bank employees regarding the bank’s conduct and related matters.
Since Aug. 1, 2008, Bank Linth held 126 U.S.-related accounts, with over $102 million in assets. Bank Linth will pay a penalty of $4.15 million.
BSZ was founded in 1850 and has its sole office in Zurich. BSZ knew that U.S. persons had a duty under U.S. law to report their income to the Internal Revenue Service (IRS) and to pay taxes on that income, including all income earned in accounts that BSZ maintained in Switzerland. Despite this knowledge, BSZ opened, maintained and serviced accounts for U.S. persons that it knew or had reason to know were likely not declared to the IRS or the U.S. Treasury, as required by U.S. law.
After Aug. 1, 2008, U.S. persons opened 32 U.S.-related accounts at BSZ, and only one of them provided a Form W-9 to BSZ upon opening an account. In most cases, the U.S. persons who opened accounts at BSZ during this period had been required to close their accounts at other Swiss banks, and BSZ knew or had reason to know that most of these accounts were likely not declared to the IRS. Moreover, 22 of the U.S.-related accounts opened during this period were funded by transfers from banks that were or are the targets of Justice Department criminal investigation.
Two relationship managers at BSZ were responsible for managing most of its U.S.-related accounts in the period since Aug. 1, 2008, and one of those managers directly reported to BSZ’s chief executive officer. BSZ relationship managers assisted U.S. persons in executing waiver forms that directed the bank not to acquire U.S. securities in their accounts. BSZ knew that the purpose and effect of these forms was to avoid disclosing the identities of the U.S. persons to the IRS.
Until 2012, BSZ provided its U.S. clients with an option for hold-mail agreements, even though it understood that providing these agreements upon request could allow U.S. persons to keep evidence of their accounts outside of the United States in order to conceal assets and income from the IRS. One U.S. client told his BSZ relationship manager by email that the hold-mail fee was “cheap insurance against having my dealings with you come to the attention of the government revenue authorities.”
BSZ also offered travel cash cards to its clients, including U.S. persons. A client could instruct BSZ to load up to 10,000 Swiss francs, U.S. dollars or euros from his or her BSZ bank account onto a travel cash card. The client could then use the card for purchases or remit unused balances back to the BSZ account. U.S. persons’ use of these cards facilitated access to or use of undeclared funds on deposit at BSZ. One BSZ relationship manager sent a brochure about travel cash cards to a U.S. client who did not wish to transfer money to the United States because of “surveillance” concerns.
In accordance with the terms of the Swiss Bank Program, BSZ described in detail the structure, operation and supervision of its U.S. cross-border business, including the names of relevant individuals and entities. It also encouraged existing and prior holders of U.S.-related accounts to disclose their accounts to the IRS through the Offshore Voluntary Disclosure Program.
Since Aug. 1, 2008, BSZ held 91 U.S.-related accounts, with over $25 million in assets. BSZ will pay a penalty of $1.81 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“With two more non-prosecution agreements with Bank Linth and Bank Sparhafen Zurich, the Swiss Bank Program continues to bring into compliance those U.S. taxpayers that hid behind bank secrecy laws or held undeclared offshore accounts,” said Deputy Commissioner Douglas O’Donnell of the IRS Large Business and International Division. “The program provides Swiss banks a path to resolution. These additional agreements demonstrate that efforts by the IRS and DOJ are both effective and successful.”
“The success of the Swiss Bank Program and the assistance IRS-Criminal Investigation provides is clear,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The Swiss Bank Program is proving to be tremendously successful not only for the number of participating banks but for the multiplier effect. With the vast amount of information these banks are providing and the investigative skills of IRS-CI special agents, we now have clear roadmaps identifying accountholders and facilitators as well as the ability to track the movement of money to other accounts in other countries. For those who may still be trying to hide cash or assets offshore, your time is up.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS Large Business and International Division for their substantial assistance, as well as Dara B. Oliphant, Gregory E. Van Hoey, and Michael R. Pahl, who served as counsel on these matters, Senior Litigation Counsel Nanette L. Davis, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Bank Linth (566.31 KB)
Bank Sparhafen Zurich (439.96 KB)
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Two Defendants Plead Guilty in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Two defendants pled guilty in a stolen identity tax refund fraud scheme.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Kiesha Adderly Mitchell, 36, and Melissa Pearl Davis, 32, both of Miami, each pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. As part of their plea agreements, each defendant agreed to restitution in the amount of $219,721.
According to court documents, in 2009, the defendants applied to the Internal Revenue Service (“IRS”) for Electronic Filing Identification Numbers (“EFINs”) in the name of corporate or fictitious entities they controlled, including K. Mitch Services, Inc. and Pebbles Tax & Notary Services. The defendants used those EFINs to submit false and fraudulent federal income tax returns to the IRS, using the names and Social Security numbers of other individuals, without the taxpayers’ authority. After the tax returns were received by the IRS, various financial institutions would authorize the defendants to load onto debit cards refund anticipation loans in the names of tax payers whose names and Social Security numbers were used to file the false and fraudulent tax returns. The defendants then withdrew the unlawfully obtained tax proceeds from the debit cards for their personal use and enrichment. The total intended loss from the defendants’ false and fraudulent filings of unauthorized income tax returns was over $400,000.
Sentencing for both defendants is scheduled for August 20, 2015 before U.S. District Court Judge Darrin P. Gayles. At sentencing, the defendants each face a maximum of ten years in prison for the conspiracy charge, and a mandatory term of two years in prison, consecutive to any other term in prison, for the aggravated identity theft charge.
Mr. Ferrer commended the investigative efforts of the Identity Theft Strike Force, with special commendation to the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Californians Charged in Methamphetamine ConspiracyRead the Press Release
Two California residents were indicted by a federal grand jury on Tuesday, June 16, 2015, for methamphetamine-related charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Marcos Becerra, 29, and Francisco Ramirez-Quintero, 44, both of Richmond, CA, were charged with participating in a conspiracy to distribute more than a 500 grams of methamphetamine and for possessing methamphetamine with the intent to distribute. The two face a minimum of 10 years up to a maximum of life in federal prison if convicted. However, the United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing. The charges are related to a June 24, 2014, seizure of methamphetamine.
The investigation is being conducted by agents from the Drug Enforcement Administration (DEA) and the Cahokia Police Department. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
Three Men Sentenced on Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Eric J. Humphrey, 36, of Amherst, NY, his father, John E. Humphrey, Jr., 55, of Buffalo, NY, and Anthony Taylor, 53, of Amherst, NY, who were convicted of conspiracy to possess with intent to distribute various quantities of cocaine and crack cocaine, were sentenced by U.S. District Judge Richard J. Arcara. Eric Humphrey was sentenced to 60 months in prison, John Humphrey 12 months and Anthony was sentenced to time served (22 months).Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the case, stated that the defendants were arrested along with Charles M. Humphrey, Jr. and James Humphrey, Jr. in February 2010 on charges involving the possession and sale of cocaine and crack cocaine in the Buffalo area.
Items seized during the execution of search warrants executed at the time of their arrests included quantities of cocaine, crack cocaine, marijuana, supplies used in the packagaing of cocaine and crack cocaine, $153,000 in cash, ammunition and three vehicles.
The investigation resulted in the liquor license revocation of “The Good Life,” a Bailey Avenue sports bar owned by Eric Humphrey.
Charles M. Humphrey, Jr. and James Humphrey, Jr. have also been convicted and are awaiting sentencing.
The sentencings are the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. hunt, New York Field Division, the Buffalo Police Department, udner the direction of Commissioner Daniel Derenda, and the Erie County District Attorney’s Office, under the direction of District Attorney Frank A. Sedita. Additioanl assistance was provided by the Amherst Police Department and the Federal Bureau of Investigation Safe Streets Task Force.
Three Men Charged in Multi-Million Dollar Software Piracy SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., man, a Maryland man and a Denver, Colo., man have been charged in federal court for their roles in one of the largest software piracy schemes ever prosecuted by the U.S. Department of Justice.
The multi-million dollar scheme, with co-conspirators in the People’s Republic of China and across the United States, illegally sold millions of dollars of Microsoft Corporation and Adobe Systems, Inc., software product key codes through a charitable organization and several online businesses. More than $18 million in assets, including luxury automobiles and expensive real estate, have been seized through federal forfeiture complaints. Those affidavits allege that conspirators reaped about $30 million in profits from customers who paid about $90 million for the pirated software.
The federal investigation, which originated in Kansas City, Mo., resulted in several criminal cases being filed within the past week.
Reza Davachi, 41, of Damascus, was charged in a criminal complaint filed under seal in the U.S. District Court in Kansas City, Mo., on Wednesday, June 17, 2015. The complaint, which was unsealed and made public today following Davachi’s arrest and initial court appearance, charges him with participating in a conspiracy to commit the crimes of wire fraud; unauthorized solicitation of access devices; trafficking in illicit labels, counterfeit labels and counterfeit documentation and packaging; and trafficking in counterfeit goods.
In separate but related cases, Casey Lee Ross, 28, of Kansas City, Mo., and Matthew Lockwood, 37, of Denver, each pleaded guilty to their roles in this same conspiracy on June 11, 2015.
Within an hour of his attorney being notified of Ross’s and Lockwood’s guilty pleas last week, Davachi purchased an airline ticket departing Baltimore-Washington International Airport for London (United Kingdom) Heathrow Airport. Davachi was arrested last night when he arrived at the airport to board the plane. Davachi remains in federal custody following his initial court appearance earlier today in the U.S. District Court in Baltimore, Md.
According to an affidavit filed in support of the federal criminal complaint, the investigation began when federal agents in Kansas City, Mo., learned in 2013 that Ross had purchased (and redistributed) tens of thousands of illegitimate and unauthorized Microsoft product key codes and counterfeit product key cards from suspect sources in China. Microsoft product key codes are used to obtain full access to unlocked, licensed versions of various Microsoft copyrighted software programs.
Ross admitted that he purchased approximately 30,159 product key codes and counterfeit product key cards. Ross purchased these product key codes at prices well below that of the estimated retail price. In many cases, the affidavit says, they were distributed on counterfeit card stock intended to make it appear as if they were genuine Microsoft products.
Ross (doing business as Software Slashers) distributed large quantities of these product key codes and counterfeit Microsoft product key cards to Davachi and other co-conspirators in the United States, the affidavit says, who in turn sold the product key codes and counterfeit product key cards through their respective Web sites as well as on e-commerce sites such as eBay or Amazon.
Davachi allegedly obtained these products through various sources, including Ross and known counterfeiters in the China. Davachi allegedly sent numerous wire transfers totaling approximately $672,300 to this suspect source of supply in China. The affidavit details communication between Davachi and these known counterfeiters in China where the design and manufacture of these counterfeit product key cares is discussed.
Davachi, in turn, allegedly supplied other individuals with these counterfeit, illicit and/or unauthorized software products. The affidavit alleges that Davachi received millions of dollars in revenue through these illicit sales.
According to the affidavit, Davachi used a charitable organization called The Sixth Man Foundation, doing business as Project Contact Africa (an eBay charity store) and several businesses (including Rez Candles, Inc., digitaldeliverydownloads.com and checkus1st.com) to sell unauthorized product key codes and counterfeit software product key cards at prices that ranged from a third to a half of the manufacturer’s suggested retail price or estimated retail price.
Davachi allegedly sold millions of dollars of unauthorized product key codes and counterfeit software product key cards through the eBay charity store for Project Contact Africa, a formally registered 501(c)(3) charitable organization. The primary exempt purpose for this charity, according to publicly-available tax filings, is “to support a medical clinic in Africa for needy families and children.” The 501(c)(3) organization relates back to a charity originally formed in the state of Oregon to provide “money, goods, or services to the poor,” and to “provide aid to the Portland (community) Trailblazer fans.”
Davachi allegedly sold thousands of Microsoft products through his Project Contact Africa eBay charity store, which claimed that proceeds from software sales went “100% to charity.” Since its creation in 2004, the affidavit says, the Project Contact Africa eBay charity account has received in excess of $10.4 million in payments and deposits. Publicly-available tax filings filed on behalf of the charity claim a total of $865,972 in contributions over this same period of time.
Microsoft fraud investigators advised federal agents that they were aware of dozens of infringement reports related to Davachi and Rez Candles and that they had sent numerous cease and desist letters. In August of 2010 another software developer, Adobe, sued Davachi and Project Contact Africa for willful copyright and trademark infringement.
According to the affidavit, Davachi engaged in at least 15 transactions with Lockwood (doing business as Discount Mountain, Inc.) for these suspected counterfeit, illicit, and/or unauthorized software and software components, from March 25, 2013, to Feb. 15, 2014, totaling $1,243,570.
In addition to his purchases from Davachi, Lockwood admitted that he paid Ross $1,127,190 for unauthorized product key codes and counterfeit product key cards. Lockwood also admitted that he paid $1,574,054 to unidentified persons in the state of Washington for various software items. Lockwood admitted that he obtained approximately 6,165 certificates of authenticity, 4,996 “Lenovo” product key cards and approximately 11,000 unauthorized product key codes.
Federal agents executed search warrants at Davachi’s residence and principal place of business on Dec. 10, 2014. Agents seized approximately $72,391 in cash, 2,716 mint coins, 665 Canadian mint coins, 164 silver pieces and a 2013 Tesla Model S valued at approximately $71,640. Contraband and counterfeit evidence included thousands of items of counterfeit, illicit, and unauthorized software and software components. There were in excess of 5,000 standalone certificates of authenticity recovered at Davachi’s business and personal residence that were not affixed to, enclosed with, or accompanying their associated copies of the copyrighted Microsoft computer programs.
Dickinson cautioned that the charge contained in the complaint against Davachi is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
These cases are being prosecuted by Assistant U.S. Attorney Patrick D. Daly; Assistant U.S. Attorney J. Curt Bohling is responsible for the civil proceedings. They were investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Tennessee State Representative Joe Armstrong Indicted for Conspiracy to Defraud the United States, Tax Evasion, and Filing A False Tax ReturnRead the Press Release
KNOXVILLE, Tenn. – On June 16, 2015, a federal grand jury returned a three-count indictment against Tennessee State Representative Joe Armstrong charging him with conspiracy to defraud the United States, tax evasion and filing a false federal income tax return.
Armstrong appeared in U.S. District Court on June 19, 2015, and pleaded not guilty to the charges. A trial has been set for 9:00 a.m., on August 25, 2015, before the Honorable Thomas A. Varlan, Chief U.S. District Court Judge.
The indictment, which is on file with the U.S. District Court, alleges that Armstrong utilized his position as a legislator to profit from the sale of Tennessee cigarette tax stamps and avoid the payment of federal income taxes.
Agencies involved in this investigation include the Internal Revenue Service, Criminal Investigation Division and the Federal Bureau of Investigation. Assistant U.S. Attorney Charles E. Atchley, Jr., represented the United States.
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Tax Fraudster Receives 27-Year Prison SentenceRead the Press Release
Tampa, Florida – U.S. District Judge Charlene Honeywell has sentenced James Lee Cobb, III (37, Tampa) to 27 years in federal prison, followed by 5 years of supervised release, for conspiracy to commit mail and wire fraud, wire fraud, aggravated identity theft, and for being a felon in possession of a firearm as an armed career criminal. As part of his sentence, the Court also entered a forfeiture money judgment in the amount of $1,820,759, and an order of restitution in the same amount. Cobb pleaded guilty on December 1, 2014.
According to court documents, Cobb conspired with others to use more than 7,000 stolen names, dates of birth, and Social Security numbers to file false tax returns and open pre-paid debit cards. He also obtained “burner” phones using stolen identities. From an unknown date in 2011, and continuing November 2013, Cobb and his co-conspirators filed false tax returns claiming approximately $3 million in refunds.
During the execution of a search warrant at Cobb’s residence, law enforcement officers recovered lists and medical records containing the personal identifying information of more than 7,000 victims. Many of the victims had their identities stolen from healthcare facilities, including from the James A. Haley VA hospital; the Florida Hospital (formerly known as University Community Hospital); ambulance services in Virginia, Georgia, and Texas; a local medical billing company; and court records. In addition, a number of deceased victims’ names were obtained from genealogy websites.
Officers also found two guns in the residence – a loaded handgun and an AR-15-style rifle with a fully-loaded, 30-round magazine. At the time of this offense, Cobb was on supervised release from a prior federal conviction.
This case was investigated by the Tampa Police Department, the Internal Revenue Service - Criminal Investigation, the U.S. Department of Veterans Affairs - Office of Inspector General, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the members of the Tampa Bay Identity Theft Alliance, including the Hillsborough County Sheriff’s Office. This case was prosecuted by Assistant United States Attorney Thomas N. Palermo and U.S Department of Justice Trial Attorney Timothy P. Loper of the Criminal Division’s Fraud Section.
St. Louis Resident Charged for Selling CrackRead the Press Release
A St. Louis, Missouri, man was indicted by a federal grand jury on Tuesday, June 16, 2015, for distribution of a controlled substance, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Eric J. Simpson was charged with one count of selling crack cocaine on March 12, 2015. Simpson faces up to a maximum of 20 years in federal prison if convicted. However, the United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing.
The investigation is being conducted by agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATF). The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
Roy Resident Pleads Guilty to Robbery, Firearms Violation; Plea Agreement Includes 180-Month Prison SentenceRead the Press Release
SALT LAKE CITY – Justin Andrew Adams, age 32, of Roy, charged in a federal indictment returned in November 2014 with three Weber County robberies and three firearms violations, pleaded guilty in U.S. District Court Friday morning to one robbery and one firearms violation.
Adams admitted that he committed an Oct. 30, 2014, robbery of a Walmart located at 4848 South 900 West in Riverdale. He admitted he threatened to shoot the cashier during the robbery. He also admitted that on the same day, he was in possession of an unregistered short-barrel rifle.
The plea agreement executed Friday morning includes a recommended sentence of 180 months in federal prison to be followed by 36 months of supervised release. Adams is scheduled to be sentenced Sept. 8, 2015, at 2:30 p.m. by U.S. District Judge Robert J. Shelby.
In addition to the Walmart robbery in Riverdale, Adams was also charged with an Oct. 24, 2014, robbery of the Walgreens Pharmacy located at 1208 Washington Boulevard in Ogden and an Oct. 26, 2014, robbery of a Walmart located at 1710 East Skyline Drive in South Ogden. He also was charged with using a firearm during a crime of violence and possession of a firearm by a restricted person. Although these charges will be dismissed at sentencing, the plea agreement includes a stipulated agreement that this relevant conduct can be considered as a part of the facts the Court takes into consideration in sentencing Adams.
Adams was arrested by police officers responding to the Riverdale Walmart robbery.
The case is being prosecuted by the U.S. Attorney’s Office in Utah. The FBI, the ATF, the Weber County Sheriff’s Office and police departments in Ogden, South Ogden, and Riverdale contributed to the investigation.
Rockford Man Sentenced to 12 Months in Federal Prison for Fraud Involving More Than $500,000 in Fictitious Money OrdersRead the Press Release
ROCKFORD — A Rockford, Ill. man was sentenced today by U.S. District Judge Philip G. Reinhard for producing a fictitious financial instrument that appeared to be issued under the authority of the U.S. Treasury. BRADLEY SHERMAN HAMPTON, 55, was sentenced to 12 months and one day in federal prison, to be followed by 3 years supervised release, and ordered to pay restitution of $76,500.
Hampton, who pled guilty on Feb. 5, 2015, admitted that on Aug. 31, 2009, he created a fictitious $48,780 money order in an attempt to defraud Regions Bank and the U.S. Treasury. According to the written plea agreement, Hampton also admitted that in 2009 he produced eight other fictitious money orders in an attempt to defraud. The nine fictitious money orders totaled $547,578.47 and purported to be issued under the authority of a Federal Reserve Bank, the Department of the Treasury, or the United States Treasury. The fictitious money orders were made payable to Chase Home Finance, Chase National Payment Service, Holcomb State Bank, Regency Worldwide Development, Inc., Harley Davidson Credit, and the Faith Center in Rockford, Ill. The $76,500 restitution is owed to the sole money order recipient that accepted a money order and disbursed money.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Frank Benedetto, Special Agent-in-Charge of the Secret Service’s Chicago Field Office.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Prosthetic Device Company Pleads Guilty to Health Care FraudRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Suncoast Brace & Limb, Inc. (“SCBL”), based in Bradenton, today pleaded guilty to health care fraud. The corporation faces a maximum fine of $500,000 and the payment of restitution at the time of sentencing. A sentencing date has not yet been set.
According to the plea agreement, between July 2009 and March 2012, SCBL engaged in a scheme to defraud the U.S. Department of Health & Human Services through a pattern of submitting fraudulent claims for prosthetic devices that had allegedly been provided to patients. In reality, SCBL often submitted reimbursement claims to Medicare and Medicaid for prosthetic devices that were either unnecessary or duplicative, or that were not at all compatible with the needs of the particular patient. As a consequence of these actions, SCBL received reimbursement from Medicaid and Medicare in the amount of approximately $1,493,368. Under the terms of the plea agreement, SCBL will pay restitution to the Department of Health and Human Services. In addition, SCBL and its principal owner will be excluded from participation in federal health care programs for a substantial period of time.
This case was investigated by the U.S. Department of Health & Human Services-Office of Inspector General, the Federal Bureau of Investigation, and the Florida Office of the Attorney General - Medicaid Fraud Control Unit. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
Oregon Resident Sentenced to 87 Months in Prison in Connection with 2009 Suicide Bombing of ISI Headquarters in PakistanRead the Press Release
Reaz Qadir Khan, 51, a naturalized U.S. Citizen living in Portland, Oregon, was sentenced today to 87 months in prison by U.S. District Court Judge Michael W. Mosman of the District of Oregon in connection with the May 27, 2009, suicide bomb attack at Pakistan’s intelligence service (ISI) headquarters in Lahore, Pakistan. The attack killed approximately 30 people and injured some 300 more.
Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Billy J. Williams of the District of Oregon and Special Agent in Charge Greg Bretzing of the FBI’s Portland Division made the announcement.
Khan previously entered a guilty plea admitting that he acted as an accessory after the fact to the crime of providing material support to terrorists. In entering his plea, Khan admitted arranging for the delivery of approximately $2,450 to Maldivian Ali Jaleel, one of the suicide bombers responsible for the May 27, 2009, attack. Khan also admitted to providing advice and financial assistance to Jaleel’s wives after the bombing, while knowing that providing such assistance would hinder and prevent the apprehension of Jaleel’s wives and others who may have helped in the attack. The 87-month sentence was jointly recommended by the parties and concludes a lengthy investigation of Khan’s connection to the attack.
“With today's sentence, the court held the defendant accountable and made it clear that no community should be subjected to the dangers posed by those seeking to assist violent extremists whether here or abroad,” said Acting U.S. Attorney Williams. “Today's result would not have been possible without the hard work of the dedicated professionals in the law enforcement and intelligence communities. I look forward to our continued work with Muslim communities in Oregon who are committed to ensuring that all people are safe from the threat of violent extremism.”
“The threads of violent extremism are weaving a path through many American cities,” said Special Agent in Charge Bretzing. “As in the Khan case, sometimes that path leads to those who are willing to fund activities overseas. In other instances, the path leads to homegrown extremists who are willing to commit heinous acts or to those who inspire them to do so. As the threat becomes more insidious and difficult to track, we rely on our shared community to come forward to help us identify and isolate those who would do harm to our nation. I would ask anyone with information about potential threats to call their local FBI office.”
This case was investigated by the FBI’s Joint Terrorism Task Force. The prosecution was handled by Assistant U.S. Attorneys Ethan D. Knight and Charles F. Gorder Jr. of the U.S. Attorney’s Office in the District of Oregon. Trial Attorney David P. Cora from the Counterterrorism Section of the Depart of Justice’s National Security Division assisted.
Oregon Resident Sentenced to 87 Months in Prison in Connection with 2009 Suicide Bombing of ISI Headquarters in Lahore, PakistanRead the Press Release
PORTLAND, Ore, – Reaz Qadir Khan, 51, a naturalized U.S. Citizen residing in Portland, Oregon, was sentenced today to 87 months in prison by U.S. District Judge Michael Mosman in connection with the May 27, 2009 suicide bomb attack at Pakistan’s intelligence service headquarters in Lahore, Pakistan. The attack killed approximately 30 people and injured some 300 more.
Khan had previously entered a plea to the crime of accessory after the fact to the crime of providing material support to terrorists. In entering his plea, Khan admitted arranging for the delivery of approximately $2,450 to Maldivian Ali Jaleel, one of the suicide bombers responsible for the May 27, 2009 attack. Khan also admitted to providing advice and financial assistance to Jaleel’s wives after the bombing, while knowing that providing such assistance would hinder and prevent the apprehension of Jaleel’s wives and others who may have helped Jaleel.
The 87 month sentence was jointly recommended by the parties and concludes a lengthy investigation of Khan’s connection to the attack. “With today’s sentence, the Court held the defendant accountable and made it clear that no community should be subjected to the dangers posed by those seeking to assist violent extremists whether here or abroad,” said Acting U.S. Attorney Billy J. Williams. “Today’s result would not have been possible without the hard work of the dedicated professionals in the law enforcement and intelligence communities. I look forward to our continued work with Muslim communities in Oregon who are committed to ensuring that all people are safe from the threat of violent extremism, and to counter the global recruitment efforts of ISIS and other terrorists organizations to travel abroad to join them or commit acts of terrorism in this country."
“The threads of violent extremism are weaving a path through many American cities. As in the Khan case, sometimes that path leads to those who are willing to fund activities overseas. In other instances, the path leads to homegrown extremists who are willing to commit heinous acts or to those who inspire them to do so,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon. “As the threat becomes more insidious and difficult to track, we rely on our shared community to come forward to help us identify and isolate those who would do harm to our nation. I would ask anyone with information about potential threats to call their local FBI office.”
This case was investigated by the FBI’s Joint Terrorism Task Force. The prosecution was handled by Assistant U.S. Attorneys Ethan D. Knight and Charles F. Gorder, Jr. from the U.S. Attorney’s Office in the District of Oregon. Trial Attorney David P. Cora from the Counterterrorism Section of the Depart of Justice’s National Security Division assisted.
Operator of O.I.D. Process Pleads Guilty for Involvement in $228 Million Fraudulent Tax Refund SchemeRead the Press Release
A California man pleaded guilty yesterday to one count of conspiracy to submit false claims, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Melinda Haag of the Northern District of California.
According to the plea agreement, Duffy R. Dashner, aka Kevin Dashner, 42, of Reseda, California, and his co-conspirators, including Mark R. Maness, operated a business called O.I.D. Process through which they helped others to prepare and file individual federal income tax returns that claimed false Original Issue Discount (OID) interest income and federal tax withholdings, resulting in fraudulent claims for tax refunds (OID returns). Dashner and Maness charged clients of O.I.D. Process a non-refundable registration fee to join the organization, and a 20 percent “refund acquisition fee” for any refund check issued by the Internal Revenue Service (IRS). Dashner and Maness also operated a website and conducted weekly conference calls with clients to promote their business and to assist clients in preparing and filing OID returns.
Dashner and Maness required clients of O.I.D. Process to change their mailing address with the IRS to the address of another co-conspirator who was an attorney in San Francisco. As a result, all correspondence from the IRS to the clients and the clients’ OID refund checks were sent to the attorney’s address rather than the clients’ home address. By receiving the refund checks, Dashner and Maness were able to ensure that they received their 20 percent refund acquisition fee. O.I.D. Process clients filed approximately 200 fraudulent OID returns claiming refunds that totaled approximately $228 million.
Dashner’s sentencing hearing is scheduled for Oct. 2 in San Francisco before U.S. District Judge Susan Illston of the Northern District of California. The statutory maximum sentence for conspiracy to submit false claims is 10 years in prison and a $250,000 fine. Maness previously pleaded guilty to conspiracy to submit false claims against the United States and was sentenced in February 2015 to serve 41 months in prison, and ordered to pay $1,176,668 in restitution to the IRS.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Haag commended the special agents of IRS–Criminal Investigation, who investigated the case, and Trial Attorney Matthew J. Kluge of the Tax Division and Assistant U.S. Attorney Michael G. Pitman of the Northern District of California, who are prosecuting this case.
Further Information:
Case #: CR 12-646-SI
Electronic court filings and further procedural and docket information are available on the U.S. District Court for the Northern District of California’s website. Judges’ calendars with schedules for upcoming court hearings can also be viewed on the court’s website.
Operator of O.I.D. Process, $228 Million Fraudulent Tax Refund Scheme, Pleads GuiltyRead the Press Release
SAN FRANCISCO, Calif. – Duffy R. Dashner (a/k/a Kevin Dashner), pleaded guilty to one count of conspiracy to submit false claims United States Attorney Melinda Haag, Acting Assistant Attorney General for the Tax Division Caroline D. Ciraolo, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Jose M. Martinez, announced.
According to the plea agreement, Dashner, 42, of Reseda, Calif., and his co-conspirators, including Mark R. Maness, operated a business called O.I.D. Process through which they helped others to prepare and file individual federal income tax returns that claimed false Original Issue Discount (OID) interest income and federal tax withholdings, resulting in fraudulent claims for tax refunds (OID returns). Dashner and Maness charged clients of O.I.D. Process a non-refundable registration fee to join the organization, and a 20 percent “refund acquisition fee” for any refund check issued by the Internal Revenue Service (IRS). Dashner and Maness also operated a website and conducted weekly conference calls with clients to promote their business and to assist clients in preparing and filing OID returns.
Dashner and Maness required clients of O.I.D. Process to change their mailing address with the IRS to the address of another co-conspirator who was an attorney in San Francisco. As a result, all correspondence from the IRS to the clients, and the clients’ O.I.D. refund checks, were sent to the attorney’s address rather than the clients’ home address. In this way, Dashner and Maness ensured they would receive a 20 percent refund acquisition fee. O.I.D. Process clients filed approximately 200 O.I.D. returns claiming refunds that totaled approximately $228 million.
Dashner was charged by indictment with one count of conspiracy to submit false claims, in violation of Title 18, U.S.C. § 286, and two counts of aiding and assisting in the presentation of a false income tax return, in violation of Title 26, U.S.C. § 7206(2). Dashner pleaded guilty to one count of conspiracy to submit false claims, in violation of 18 U.S.C § 286. Dashner’s sentencing hearing is scheduled for October 2, 2015 at 11:00 a.m., before the Honorable Susan Illston, United States District Judge, in San Francisco. The maximum statutory penalty for the conspiracy to submit false claims, in violation of 18 U.S.C § 286 is 10 years in prison, and a $250,000 fine, although any sentence would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. Maness previously pleaded guilty to conspiracy to submit false claims against the United States and was sentenced in February 2015 to serve 41 months in prison, and ordered to pay $1,176,668 in restitution to the IRS.
United States Department of Justice Tax Division Trial Attorney Matthew J. Kluge and Assistant United States Attorney Michael G. Pitman are prosecuting this case. The prosecution is the result of an investigation by IRS-CI.
Ontario, Ny Man Sentenced on Tax ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Gerald Fretto, 51, of Ontario, NY, who was convicted of filing a false income tax return, was sentenced to three years probation and 100 hours of community service by Chief U.S. District Judge Frank P. Geraci.Assistant U.S. Attorney Bradley E. Tyler, who handled the case, stated that for the tax year 2007, the defendant filed a tax return that did not report all of the income he earned in that year.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, and the U.S. Postal Inspection Service, under the direction of Special Agent in Charge Shelly Binkowski.
Omaha Men Sentenced for Investment Fraud SchemeRead the Press Release
United States Attorney Deborah R. Gilg announced that on June 18, 2015, Senior United States District Court Judge Joseph Bataillon sentenced Jonathan Arrington of Omaha, Nebraska, age 45, to a 5 year term of imprisonment, following his conviction for wire fraud. After his release from prison, Arrington will begin a term of supervised release of 3 years. On that same day, Judge Bataillon also sentenced Michael Kratville, of Omaha, Nebraska, an attorney, age 53, to a 4 year term of imprisonment, following his conviction for wire fraud. After his release from prison, Kratville will begin a term of supervised release of 3 years. Lastly, on June 18, 2015, Judge Bataillon also sentenced Michael Welke of Omaha, Nebraska, age 40, to a 3 year term of imprisonment, following his conviction for wire fraud. After his release from prison, Welke will begin a term of supervised release of 3 years. All three defendants will be ordered to make restitution, the amounts to be determined by the court at a later date.
Begin in 2005 and continuing through 2008, Arrington, Kratville and Welke conducted an investment fraud scheme whereby they and their companies, Elite Management Holdings Corporation (EMHC) and MGM Enterprises, all operating out of Nebraska, defrauded at least 100 individuals out of approximately $4,000,000. The defendants solicited mostly friends and acquaintances to invest in "club-like" investment pools operated by EMHC and MGM. These pool funds were purportedly traded in commodity futures contracts (futures) and off-exchange foreign currency contracts (FOREX). To entice prospective pool participants and retain existing pool participants, the defendants pitched their supposed extensive skills and experience in market analysis and investment strategies and the supposedly extremely successful, historical performance of their futures and FOREX trading, models, and strategies. They also claimed to their investors that their trading returns had met or exceeded 3 percent every month from May, 2002 through at least 2007. They further advised their investors that they had sophisticated procedures in place to prevent losses, and that their losses would be limited, because no more than 10 percent of their investment principal (i.e., participating funds) would ever be at risk.
The truth of the matter was that the defendants never did successfully trade in futures, FOREX, or options. Not only did the defendants fail to generate returns of 3 percent or more each and every month from 2002 through June, 2007, the trading conducted on the defendants' behalf by various other traders resulted in nearly a total loss for every investor. Additionally, more than 10 percent of the investors' participating funds were at risk throughout the operation as part of the defendants' fraudulent scheme.
Instead of disclosing the actual trading performance of the pool funds, the defendants periodically provided pool participants with false account statements that provided false returns and false account balances over the course of the scheme. Additionally, the defendants' misappropriated a significant amount of the funds for their own personal use and to pay other pool participants in a Ponzi-like manner in furtherance of the defendants' fraudulent scheme. As a result of the defendants' scheme to defraud, investors suffered an ultimate loss of approximately $4,000,000.00.
This case was investigated by the United States Postal Inspection Service.
Napa Resident Sentenced to Five Years in Prison for Bank Robbery SpreeRead the Press Release
OAKLAND – Joshua James Metoxen was sentenced to five years in prison (to be served consecutive to a two-year state sentence), and ordered to pay $17,251 in restitution for robbing eight banks, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
Metoxen, 25, of Napa, pleaded guilty on April 2, 2015, to eight counts of bank robbery. According to the plea agreement, Metoxen admitted to using force or intimidation to rob banks in San Ramon, Middletown, Milpitas, Pleasant Hill, Castro Valley, and Santa Rosa. Metoxen entered the banks wearing sunglasses and a hooded sweatshirt, approached the victim tellers to ask for change, and presented a note that demanded money. Metoxen usually made verbal demands and ordered the tellers to comply with his demands.
Metoxen, was indicted by a federal grand jury on August 14, 2014. He was charged with unarmed robbery of the following banks:
- $2,108 from a U.S. Bank branch in San Ramon, California, on February 23, 2013
- $4,106 from a West America branch in Middletown, California, on February 27, 2013
- $1,350 from a U.S. Bank branch in Milpitas, California, on March 5, 2013
- $4,295 from a Tri-Counties Bank branch in Middletown, California, on March 7, 2013
- $1,479 from a U.S. Bank branch in Pleasant Hill, California, on March 18, 2013
- $1,133 from a U.S. Bank branch in Milpitas, California, on March 20, 2013
- $1,000 from a U.S. Bank branch in Castro Valley, California, on March 21, 2013
- $1,780 from a U.S. Bank branch in Santa Rosa, California, on March 26, 2013
A number of law enforcement bulletins describing the suspect and the cars he used were issued during this multi-agency investigation. Metoxen was apprehended on March 28, 2013, when he attempted to rob a bank in Novato for the second time in two months. The teller called 911 while Metoxen was still in the bank. A Novato detective was able to identify the car being driven by Metoxen as he drove it away from the bank. Novato police arrested Metoxen on Highway 101.
The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, U.S. District Judge. Judge Gonzalez Rogers also sentenced the defendant to a three year period of supervised release. Metoxen, who has been in custody since his March 2013 arrest, will begin serving his five year sentence immediately.
Assistant U.S. Attorney Christina McCall is prosecuting the case with the assistance of Patty Lau and Vanessa Quant. The prosecution is the result of an investigation by the Federal Bureau of Investigation, Lake County Sheriff’s Office, Novato Police Department, San Ramon Police Department, Milpitas Police Department, Marin County Sheriff’s Office, Pleasant Hill Police Department, Alameda County Sheriff’s Office, Livermore Police Department, and Santa Rosa Police Department.