Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
12 June 2015
Two Plead Guilty to Healthcare FraudRead the Press Release
ABINGDON, VIRGINIA – A mother and daughter who operated a business that provided oversight to personal care aides caring for elderly and disabled individuals, pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to healthcare fraud.
Connie Robbins, 59, of Sugar Grove, Virginia and Stephanie Dawn Robbins, 37, of Marion, Virginia, both waived their rights to be indicted this morning and pled guilty to a one-count Information charging them with conspiracy to commit healthcare fraud.
“The Virginia Department of Medical Assistance Services offers services to Medicaid recipients to allow those with serious health issues to avoid entering a nursing home and to receive critical medical care in the comfort of their homes. These defendants succumbed to greed and took advantage of the elderly and the disabled for their own financial benefit,” Acting United States Attorney Anthony P. Giorno said today. “Protecting important social programs like Medicaid is a paramount concern to law enforcement and my office will continue to work with the state Attorney General and our federal and state law enforcement partners to investigate and prosecute individuals who defraud the system for their own selfish purposes.”
“Healthcare fraud of this kind wastes taxpayer money and weakens the safety net for our fellow Virginians who truly need assistance,” said Attorney General Mark R. Herring. “My nationally-renowned Medicaid Fraud Control Unit and our federal partners will continue to pursue these cases of fraud and abuse wherever we find them.”
“Having structured programs in place providing the elderly and sick options about their care is critical to effective healthcare in this country. The defendants falsified documents and neglected the needs of their patients. The FBI will continue to investigate allegations of healthcare fraud, to ensure patients who rely on Medicaid and other programs have confidence they will be taken care of and they will not incur additional expenses as a result of criminals defrauding the system,” said Adam S. Lee, Special Agent in Charge, FBI Richmond Division.
According to evidence presented at today’s guilty plea hearing by Virginia Assistant Attorney General and Special Assistant United States Attorney Janine Myatt, Stephanie and Connie Robbins operated Robbins CD Services, a Consumer Directed Service Facilitator (CDSF) service provider. CDSF service providers are hired by Medicaid recipients who are eligible for a waiver that allows them to avoid moving into a nursing home and instead receive critical care in their homes.
The only two employees at CD Robbins Services were Connie Robbins, a registered nurse, and her daughter, Stephanie Robbins, who served as the office manager. Between October 2008 and August 2013, Connie Robbins created false supporting paperwork that documented home face-to-face visits with patients that never occurred. In her role as office manager, Stephanie Robbins billed Virginia Medicaid for the face-to-face home assessments that she knew never occurred. Approximately 35 percent of the home assessments billed by Robbins CD Services and paid by Medicaid never occurred.
At sentencing, each defendant faces a maximum possible penalty of up to 20 years in prison and/or a fine of up to $250,000. The defendants have also agreed to pay $137,106 in restitution.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Medicaid Fraud Control Unit for the Virginia Office of the Attorney General with the assistance of the Department of Medical Assistance Services. Virginia Assistant Attorney General and Special Assistant United States Attorney Janine Myatt is prosecuting the case for the United States.
Two Men Plead Guilty in U.S. Department of State Contracting Fraud Scheme and Contractor Cover-UpRead the Press Release
ALEXANDRIA, Va. – Tony Chandler, 68, of Severn, Maryland, pleaded guilty today to charges of conspiracy to commit wire fraud and a conflict of interest related to his conduct as a U.S. Department of State contracting officer’s representative. In a related case, Curtis L. Wrenn, Jr., 60, of Triangle, Virginia, formerly the president of a contractor performing under Chandler’s supervision, pleaded guilty today to making a false statement to the State Department by concealing that an internal investigation conducted by the contractor discovered credible information of fraud involving Chandler and Marvin Hulsey, 52, of Stafford, Virginia, one of Wrenn’s employees.
In statements of facts filed with the plea agreements, Chandler admitted to conspiring with Hulsey to submit false invoices to the State Department in order to conceal unallowable costs for nutritional supplements purchased by employees under Hulsey’s supervision. As part of the scheme, Hulsey caused the employees to be reimbursed by his employer for the nutritional supplement purchases, and then caused false invoices to be made and submitted to the State Department for the cost of the nutritional supplements. Chandler, as an authorized distributor of the nutritional supplements for a multi-level marketing company, earned commissions in excess of $25,000 from the purchases made by Hulsey’s employees. Despite knowing that he was personally profiting from the sales of the nutritional supplements, Chandler, in his official capacity, approved the majority of the false invoices. The false invoices submitted to the State Department as part of the scheme totaled more than $170,000.
Wrenn, as the president of the State Department contractor employing Hulsey, later learned of Hulsey’s submission of false invoices to the State Department and of Chandler’s role in the scheme. Wrenn knew that he had a responsibility under the Federal Acquisition Regulation to timely disclose to the government credible evidence of fraud, but instead omitted facts related to the fraud from the final letter delivered to the State Department. After submitting the altered letter, Wrenn met with Chandler and told him he had “saved his bacon.” Wrenn later wrote in an email that he told Chandler “to get this resolved with minimal questions or we (sic) throw him under the bus.”
Chandler was previously indicted by a federal grand jury on May 14, 2015. Chandler faces a maximum penalty of 25 years in prison if convicted, while Wrenn faces a maximum penalty of five years in prison if convicted. Both defendants will be sentenced on Sept. 18, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Hulsey was indicted with Chandler on May 14, 2015 for wire fraud and conspiracy to commit wire fraud. Hulsey pleaded not guilty to all charges before U.S. District Judge Claude M. Hilton on May 29, 2015 and is scheduled for trial on Aug. 17, 2015.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Steve A. Linick, Inspector General for the U.S. Department of State and Broadcasting Board of Governors; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Claud M. Hilton.
This case was investigated by the U.S. Department of State, Office of Inspector General (DOS-OIG) and the FBI’s Washington Field Office. Substantial assistance was provided by the Criminal Analysis Branch of the DOS-OIG. Special Assistant U.S. Attorney Brian D. Harrison and Assistant U.S. Attorney Grace L. Hill are prosecuting the case.
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 for Chandler and Hulsey 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-137. Related court documents and information concerning Wrenn may be found on PACER by searching for Case No. 1:15-cr-150.
Two Men Charged with Conspiracy to Provide Material Support to Islamic StateRead the Press Release
WASHINGTON – Today, David Wright aka Dawud Sharif Abdul Khaliq, 25, of Everett, Mass., and Nicholas Rovinski aka Nuh Amriki aka Nuh al Andalusi, 24, of Warwick, Rhode Island, were charged with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. On June 3, 2015, Wright was charged with conspiracy to obstruct justice, and he was taken into custody. Rovinski was arrested yesterday evening at his home in Rhode Island, and will make an appearance in federal court in Boston today.
Wright and Rovinski are charged with conspiring with each other, unknown conspirators and Usaamah Abdullah Rahim, 26, Wright’s uncle, who lived in Roslindale, Mass., until his death on June 2, 2015. Rahim was shot and killed after he attacked law enforcement officers in a Roslindale parking lot.
The complaint affidavit alleges that, beginning at a date unknown but no later than May 2015, Wright, Rovinski and Rahim conspired to commit attacks and kill persons inside the United States, which they believed would support ISIL’s objectives.
The affidavit further alleges that, in furtherance of that plan, Wright, Rovinski and Rahim conspired to attack and behead a person referred to in the affidavit as “Intended Victim-1,” a resident of New York, who had organized a conference in Garland, Texas, on May 3, 2015, featuring cartoons depicting the Islamic Prophet Muhammad. Early on May 31, 2015, Wright and Rahim drove to Rhode Island, picking up Rovinski at his residence in Warwick, Rhode Island, and driving to a Warwick beach to discuss their plot in secrecy.
At approximately 5:00 a.m. on Tuesday, June 2, 2015, it is alleged that Rahim called Wright and advised him, in another guarded conversation, that he had changed plans and that he no longer planned to conduct the attack in New York. Rahim advised Wright that, instead, he intended to attack “those boys in blue” (meaning police officers) locally in Massachusetts either that day or the next day. Wright urged him to first wipe his laptop computer and to destroy his phone so that they could not be searched by law enforcement and urged him to make a will.
The charging statute provides a sentence of no greater than 15 years in prison, up to life of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The initial charge against Wright for obstruction of justice remains pending. A detention hearing has been set for Wright on Friday, June 19, 2015 at 2:00 p.m.
U.S. Attorney Carmen M. Ortiz for the District of Massachusetts, Vincent Lisi, Special Agent in Charge of the FBI’s Boston Field Division and Assistant Attorney General for National Security John P. Carlin and made the announcement.
This investigation is being conducted by the Boston Joint Terrorism Task Force and the Rhode Island Joint Terrorism Task Force with critical assistance from the Rhode Island State Police, the Warwick, RI Police Department, the Rhode Island Fusion Center, the Boston Police Department, the Boston Regional Intelligence Center, the Massachusetts State Police, the Commonwealth Fusion Center, the Everett Police Department, Homeland Security Investigations, the Naval Criminal Investigative Service, and member agencies of the JTTF including the U.S. Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshals Service and others. This case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and Nadine Pellegrini of the District of Massachusetts’s Anti-Terrorism and National Security Unit, with the assistance of Trial Attorney Greg R. Gonzalez of the National Security Division’s Counterterrorism Section.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Two Men Charged with Conspiracy to Provide Material Support to Islamic StateRead the Press Release
Today, David Wright aka Dawud Sharif Abdul Khaliq, 25, of Everett, Massachusetts, and Nicholas Rovinski aka Nuh Amriki aka Nuh al Andalusi, 24, of Warwick, Rhode Island, were charged with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. On June 3, 2015, Wright was charged with conspiracy to obstruct justice, and he was taken into custody. Rovinski was arrested yesterday evening at his home in Rhode Island, and will make an appearance in federal court in Boston today.
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Carmen M. Ortiz for the District of Massachusetts and Special Agent in Charge Vincent Lisi for the FBI’s Boston Field Division made the announcement.
Wright and Rovinski are charged with conspiring with each other, unknown conspirators and Usaamah Abdullah Rahim, 26, Wright’s uncle, who lived in Roslindale, Massachusetts, until his death on June 2, 2015. Rahim was shot and killed after he attacked law enforcement officers in a Roslindale parking lot.
The complaint affidavit alleges that, beginning at a date unknown but no later than May 2015, Wright, Rovinski and Rahim conspired to commit attacks and kill persons inside the United States, which they believed would support ISIL’s objectives.
The affidavit alleges that, in furtherance of that plan, Wright, Rovinski and Rahim conspired to attack and behead a person referred to in the affidavit as “Intended Victim-1,” a resident of New York, who had organized a conference in Garland, Texas, on May 3, 2015, featuring cartoons depicting the Islamic Prophet Muhammad. Early on May 31, 2015, Wright and Rahim drove to Rhode Island, picking up Rovinski at his residence in Warwick, Rhode Island, and driving to a Warwick beach to discuss their plot in secrecy.
The affidavit further alleges that, at approximately 5:00 a.m. on Tuesday, June 2, 2015, Rahim called Wright and advised him, in another guarded conversation, that he had changed plans and that he no longer planned to conduct the attack in New York. Rahim advised Wright that, instead, he intended to attack “those boys in blue” (meaning police officers) locally in Massachusetts either that day or the next day. Wright urged him to first wipe his laptop computer and to destroy his phone so that they could not be searched by law enforcement and urged him to make a will.
The charging statute provides a sentence of no greater than 15 years in prison, up to life of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The initial charge against Wright for obstruction of justice remains pending. A detention hearing has been set for Wright on Friday, June 19, 2015 at 2:00 p.m. Rovinski’s initial appearance is set today at 2:00 p.m. in Courtroom two before Magistrate Judge Donald L. Cabell.
This investigation is being conducted by the FBI’s Boston Field Division, Boston Police Department, Massachusetts State Police and member agencies of the Boston and Rhode Island Joint Terrorism Task Force, including the U.S. Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, U.S. Marshals Service and others.
This case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and Nadine Pellegrini of the District of Massachusetts’s Anti-Terrorism and National Security Unit and Trial Attorney Gregory R. Gonzalez of the Department of Justice’s National Security Division Counterterrorism Section.
Two Ashland Men Sentenced in Money Laundering Conspiracy Involving Stolen MotorcyclesRead the Press Release
LONDON — A federal judge sentenced two men from Ashland, Ky., today for conspiring to commit money laundering, by stripping stolen motorcycles of their original identifying marks, rebuilding and retitling them for innocent buyers.
U.S. District Judge Gregory Van Tatenhove sentenced Richard Meade, 67, to 2 years in prison and Mark Justice, 55, to 18 months in prison, for conspiracy to commit money laundering by illegally transferring the ownership of motorcycles, aiding and abetting money laundering, and aiding and abetting possession of a vehicle and vehicle parts with altered vehicle identification numbers (VIN). At a later date, the Court will determine a restitution amount to compensate the original owners and insurance companies.
Both defendants were convicted in 2013. Evidence established that motorcycles had been stolen at motorcycle rallies in South Carolina, South Dakota and Florida, by a group of thieves who brought them back to Kentucky to strip them and rebuild them. They removed parts of the stolen motorcycles and replaced them with aftermarket parts bearing different VIN numbers, to conceal that they had been stolen. The stolen motorcycles were registered in Kentucky, with new VIN numbers. In 2006 and 2007, Meade and Justice took some of the newly registered motorcycles, sold them and helped provide fraudulent documents for the retitling process.
Six other defendants previously pleaded guilty and have been sentenced for their roles in the case.
The FBI and Kentucky State Police identified nearly 200 victims in this case, which include the original motorcycle owners and insurance companies.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Howard S. Marshall, Special Agent in Charge, FBI, and Rodney Brewer, Kentucky State Police Commissioner jointly announced the sentence.
The investigation was conducted by the FBI, Kentucky State Police, the Boyd County Sheriff’s Office, Ohio Bureau of Investigations, Ohio Attorney General’s Office, and Ohio State Patrol. Assistant United States Attorneys Kenneth R. Taylor and Erin Roth prosecuted this case on behalf of the federal government.
Two Additional Defendants Pled Guilty in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Two additional 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.
Zenova Abrahams, 44 of Naples, and Ronald Reed, 59 of Bartow, each pled guilty to one count of conspiracy to traffic in unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A . On May 14, 2015, co-defendant Joseph Houston, 43 of Naples, pled guilty to the same two charges.
According to court documents, defendants Houston and Abrahams met with a Confidential Informant (CI) in the Southern District of Florida, and described a business arrangement where they would obtain Personally Identifiable Information (PII) from their sources (later identified as co-defendant Reed and another individual), and provide that PII to the CI. The CI purportedly would file federal income tax returns using the PII, and receive refunds in the form of Refund Anticipation Loan checks or Treasury checks. Houston and Abrahams would then take and cash those checks. The Cl was to earn 30% of the profits. Houston and Abrahams would receive the remaining 70%, and pay a percentage of that to their sources for providing the PII.
After the CI provided a total of $5,000 in up-front payments to obtain the PII, Houston and Abrahams provided the CI with lists with 500+ identities containing PII that were to be used in the tax fraud scheme. When Reed met with Houston and attempted to pick up proceeds from the allegedly filed fraudulent tax returns, law enforcement approached Reed. Reed provided information regarding the source of the PII. Through the source’s employment, he/she had access to client files containing PII. Reed explained that many of the 500+ names, dates of birth, and social security numbers were documented in the source’s handwriting. Reed also indicated that the source gave him access to the employer’s files, which he used to prepare a portion of the lists provide to the CI.
Sentencing for defendant Houston is scheduled for July 24, 2015, and sentencing for defendants Abrahams and Reed are scheduled for August 20, 2015, all before U.S. District Court Judge William J. Zloch. At sentencing, the defendants each face a maximum of five 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 FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Laurence M. Bardfeld.
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.
St. Croix Woman Pleads Guilty to Manufacturing MarijuanaRead the Press Release
St. Croix, USVI – On Thursday, June 11, 2015, Gail Leung, 57, pleaded guilty in federal court on St. Croix to one count of manufacturing marijuana, United States Attorney Ronald W. Sharpe announced.
According to the plea agreement filed with the court, on May 28, 2014, Leung knowingly and intentionally grew marijuana on her property in Frederiksted, St. Croix. Law enforcement agents discovered a total of 200 marijuana plants growing on Leung’s property.
As part of her plea agreement, Leung also agreed to forfeit $3,000 to the United States. Leung faces a maximum sentence of five years in prison and a $250,000 fine. A sentencing date has been set for October 14, 2015.
This case was investigated by the U.S. Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorney Rhonda Williams-Henry.
Spokane Man Sentenced to over 19 Years for Unlawful Possession of a Firearm as an Armed Career Criminal and for Violating His Court SupervisionRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Timothy Binford of Spokane, Washington was sentenced in Federal court to over 19 years. Binford was charged with being a previously convicted felon in possession of a firearm. He was found guilty by a jury following a trial in February, 2014. At the time of the firearm offense, Binford was on court supervision stemming from a prior bank robbery conviction.
United States District Court Chief Judge Rosanna Malouf Peterson sentenced Binford to a 211-month term of imprisonment and a 5-year term of court supervision following release from federal prison. The Judge also imposed a 24 month consecutive sentence because Binford violated the court’s previously-imposed conditions of releases. Binford has been in custody since his arrest in September, 2014.
According to information disclosed during the court proceedings, a Spokane County Sheriff’s Detective arrested Binford on an unrelated matter in September, 2014. At the time of his arrest, Binford was in possession of a sports bag containing a Lorcin Model L22 .22 caliber semi-automatic pistol. The firearm was concealed in a pair of gloves. The bag also contained blank .22 caliber ammunition, two zippered bags containing syringes and plastic bindles containing methamphetamine residue, a digital scale, a hand-weapon fashioned from a circular saw blade, a collapsible metal baton, handcuffs, and a skull facemask. Binford was also in possession of a credit card and debit cards belonging to other people. As a previously convicted felon, Binford was prohibited by federal law from possessing any firearms or ammunition that had previously traveled in interstate commerce. Evidence showed that the Lorcin pistol Binford possessed Binford had been manufactured in Mira Loma, California, and had traveled in interstate commerce at some time prior to Binford’s arrest. Binford sentence was enhanced based on his criminal history, which history included three prior felony convictions for violent offenses. ,
Binford, who has been convicted of multiple felony offenses, was subject to court supervision at the time of his arrest. This supervision stemmed from an armed bank robbery conviction for which he had been sentenced to 188 months in prison. Binford had been release from prison on January 10, 2014, and was on court supervision at the time that he possessed the firearm
Michael C. Ormsby said, “The sentence imposed in this case not only reflects the seriousness of keeping firearms out of the hands of previously-convicted felons, but the importance of complying with court-ordered conditions of supervision. This case is yet another example of the commitment of the United States Attorney’s Office to prosecute aggressively firearms-related cases in the Eastern District of Washington.”
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Spokane County Sheriff’s Office. The case was prosecuted by Timothy J. Ohms, an Assistant United States Attorney for the Eastern District of Washington.
Seminole County Man Charged with Possessing Bombs in Winter ParkRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Carl Joseph Thomas Pisa (24, Casselberry) was arrested yesterday after selling explosive devices to an undercover agent in Winter Park. If convicted, he faces a maximum penalty of ten years in federal prison.
According to court documents, in December 2014, an undercover task force agent (UC) with the Orange County Sheriff’s Office contacted Pisa in response to an online ad for a military simulator offered for sale. Pisa agreed to sell him the simulator. Between December 2014 and February 2015, Pisa met with the UC on several occasions to sell the UC explosives. On February 6, 2015, Pisa sold the UC 12 improvised explosive devices in a parking lot in Winter Park. During the meeting, the UC asked Pisa if the explosives could kill somebody, to which Pisa responded, “yes.” In describing the bombs, Pisa explained how ball bearings would blast out from the device in a perfect cone upon initiation. The devices were sent to the Bureau of Alcohol, Tobacco, Firearms, and Explosives laboratory for examination, where they were identified as explosive bombs and destructive devices. It was also determined that they were not properly registered to Pisa in the National Firearms Registration and Transfer Record.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Orange County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney James D. Mandolfo.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Regina Lombardo, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violent crime and improve the quality of life where law enforcement efforts are focused.
Second of Cape Cod Brothers Sentenced to 25 Years for Oxycodone Trafficking SchemeRead the Press Release
BOSTON – The second of a pair of Cape Cod brothers was sentenced today for his role in a three-year, multi-million dollar oxycodone distribution conspiracy that flooded Cape Cod with highly addictive opiates.
Stanley D. Gonsalves, 36, of Sandwich, Mass., was sentenced by U.S. District Court Chief Judge Patti B. Saris to 25 years in prison, six years of supervised release, forfeiture of $3,552,203 and property, including seized money, a house in West Yarmouth, a Cadillac, and a Nissan Altima.
“Opiates are ruining lives, tearing apart families, and poisoning our Commonwealth,” said United States Attorney Carmen M. Ortiz. “While much has been written lately about the incarceration of low-level, non-violent drug defendants, the two defendants in this case are precisely the type of defendant who should be targeted by federal law enforcement: recidivist, violent criminals operating a significant drug organization in a community suffering from opiate abuse.”
“This investigation resulted in the dismantlement of a violent drug trafficking organization that operated throughout Cape Cod for years,” said Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The success of this case is just one example of the FBI’s commitment to rid communities across the Commonwealth of drug trafficking enterprises.”
“The Gonsalves brothers’ large-scale oxycodone conspiracy wreaked havoc on Cape Cod by escalating the opiate epidemic,” said Special Agent William Offord of IRS Criminal Investigation. “Today’s sentence of Stanley Gonsalves highlights the seriousness of his drug, money laundering and firearm offenses. IRS CI will continue to lend our financial expertise by tracking the significant proceeds generated through narcotics trafficking.”
"DEA is committed to investigating and dismantling large scale drug trafficking organizations like this one operated by the Gonsalves brothers," said Special Agent in Charge Michael Ferguson. "Illicit Oxycodone trafficking destroys people’s lives and wreaks havoc in our communities. DEA and our law enforcement partners will aggressively pursue any group that traffic these drugs."
In October 2014, after a month-long federal trial, Stanley Gonsalves was convicted of oxycodone conspiracy, money laundering conspiracy, 17 counts of money laundering, and possession of a firearm in furtherance of a drug trafficking conspiracy. The charges stemmed from a three-year conspiracy involving hundreds of thousands of 30-milligram oxycodone pills, which he and his brother and co-defendant, Joshua M. Gonsalves, distributed on Cape Cod, generating over $5 million in proceeds. Joshua Gonsalves was also convicted at trial of oxycodone trafficking conspiracy, money laundering conspiracy, and a money laundering charge. In January 2015, Chief Judge Saris sentenced Joshua Gonsalves to 20 years in prison, five years of supervised release, and forfeiture of $1,522,372.
During the trial, witnesses testified that couriers working for the Gonsalves brothers transported multi-thousand-pill loads of 30-milligram oxycodone pills from South Florida to New England by plane and by car. The Gonsalves would then split the pills into 100-pill packs for sale to Cape Cod dealers.
The primary object of the related money laundering conspiracy was to use the millions of dollars in drug proceeds to purchase additional oxycodone pills and to pay the ongoing expenses of the oxycodone conspiracy. During the trial, witnesses testified about seizures from the Gonsalves brothers’ co-conspirators of two south-bound cash shipments totaling $140,000 and a north-bound pill shipment of 5,700 pills. Other large pill seizures occurred in Fort Lauderdale (8,000 pills), in Volusia County, Fla. (900 pills), along Route 6 in Barnstable, Mass. (280 pills), and along Route 3 in Kingston, Mass. (4,000 pills). Other related cash seizures from co-conspirators totaled $167,000.
The trial evidence also included extensive testimony about a car chase and rollover incident, which occurred on Route 3 on May 13, 2011, in which the Gonsalves brothers allegedly rammed their Mercedes SUV into a Volvo station wagon, which they mistakenly believed contained $225,000 in cash drug proceeds taken from them in a Bourne robbery. The men in the Volvo, who allegedly were only assisting the primary robbers (who were watching these events unfolding from a different car), managed to survive the rollover crash and then fled into the woods.
The jury also convicted Stanley Gonsalves of possessing an AR-15 semi-automatic rifle, which he kept at his rented home in Onset, Mass.
At today’s sentencing hearing, the prosecutor noted the ongoing opiate epidemic in Massachusetts, which remains a priority for federal, state, and local law enforcement. U.S. Attorney Ortiz is collaborating with federal, state, and local officials to combat opiate addiction in Massachusetts. Chief Judge Saris found the defendant responsible for over 177,000 oxycodone pills and described the defendant’s record as one of “extreme recidivism.”
U.S. Attorney Ortiz; FBI SAC Lisi; IRS Criminal Investigation SAC Offord; DEA SAC Ferguson; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. Significant assistance was also provided by the DEA Cape Cod Drug Task Force; the Barnstable County and Cape and Islands District Attorney’s Offices; the Barnstable, Boston, Bourne, Chatham, Dennis, Franklin, Harwich, Plymouth, Sandwich, Quincy, Yarmouth, and Wareham Police Departments; the Barnstable and Bristol County Sheriff’s Departments; the Florence County (South Carolina), Broward County (Florida) and Volusia County (Florida) Sheriff’s Offices; and the Dillon and Ridgeland (South Carolina) Police Departments.
The case was prosecuted by Assistant U.S. Attorney Timothy E. Moran and recently retired Assistant U.S. Attorney Richard L. Hoffman of Ortiz’s Organized Crime and Gang Unit.
Schnuck Markets Agree to Pay $65,000.00 Civil PenaltyRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Schnuck Markets, Inc. (Schnucks) has paid the United States of America sixty-five thousand dollars ($65,000.00) as part of a voluntary agreement settling allegations that Schnucks violated the Controlled Substances Act.
The United States alleged that Schnucks pharmacies filled prescriptions written by unauthorized practitioners. In particular, the allegations include that the pharmacies filled prescriptions written by mid-level practitioners not authorized to prescribe certain controlled substances and by practitioners who previously surrendered their prescribing privileges.
"Pharmacies are the last line of defense in ensuring that prescription drugs do not fall into the wrong hands. The Controlled Substances Act requires careful scrutiny of each prescription before it is filled. That scrutiny falls squarely on the shoulders of the pharmacy which dispenses the drugs." noted United States Attorney Wigginton. "Abuse of prescription drugs is a nationwide epidemic, and my office will not hesitate to pursue all appropriate penalties, be those civil or criminal, against pharmacies and pharmacists who violate the law."
"I would note that to its credit, Schnucks was cooperative throughout this investigation and the resolution of this case. Schnucks has made significant changes in its pharmacy practices and besides the civil penalty paid, invested additional monies and resources in technology and training to reduce the chance that violations like these ever occur again," said United States Attorney Wigginton.
This matter was investigated by the Saint Louis and Chicago field offices of the Drug Enforcement Administration’s Office of Diversion Control. The case was prosecuted by Assistant United States Attorney Adam Hanna.
Rockland Resident Pleads Guilty to Conspiring to Distribute Crack CocaineRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Jackie Madore, 45, of Rockland, pleaded guilty today in U.S. District Court to conspiracy to possess with the intent to distribute and to distribute 280 grams of a mixture or substance containing cocaine base, commonly referred to as “crack.”
According to court records, between January 2010 and December 2013, the defendant sold crack in Penobscot County and elsewhere. She sold half-gram bags for $50 and gram bags for $100. She transferred the proceeds of her sales to her source of supply in the New Haven, Connecticut area and got cash and crack in exchange. The crack was transported from Connecticut to the Bangor area by other conspirators.
The defendant faces up to 20 years in prison and a $1,000,000 fine. She will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the Maine Drug Enforcement Agency and the Bureau of Alcohol, Tobacco, Firearms and Explosives (New Haven Office).Previously Convicted Owings Mills Sex Offender Sentenced to 11 Years in Prison for Possessing Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell sentenced Shawn Joseph Eisenstein, age 29, of Owings Mills, Maryland, today to 11 years in prison followed by supervised release for life, for possession of child pornography. Eisenstein was previously convicted of distribution of child pornography in Baltimore County and was required to register as a sex offender. Judge Russell ordered that upon his release from prison, Eisenstein must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
On May 28, 2008, Eisenstein was convicted in Baltimore County Circuit Court of distributing child pornography, and sentenced to five years’ incarceration, with three years and six months suspended. Eisenstein was placed on three years of probation upon his release from prison and ordered to register as a sex offender.
According to his plea agreement, in July 2014, Eisenstein uploaded images containing child pornography to his email account. Following the email provider’s discovery of the images, a search warrant for Eisenstein’s residence was executed on July 29, 2014. Eisenstein admitted to using his cell phone and his email accounts to trade files of child pornography with people he met on an image board website. He viewed the child pornography on his cell phone.
A Baltimore County computer forensic examiner subsequently found over 100 images on Eisenstein’s cell phone of children engaged in lewd and sexual activity. In all, Eisenstein possessed over 600 images of child pornography, including pre-pubescent children and images portraying sadistic or masochistic conduct, or other depictions of violence.
Eisenstein further admitted that in October 2011, while still on probation for his previous conviction for distribution of child pornography, he used an email account to communicate with an undercover Baltimore County detective who represented himself as a 13 year old female. During those conversations Eisenstein discussed meeting the “girl” to engage in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, HSI Baltimore, Baltimore County Police Department and Baltimore County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case.
Philadelphia Man Sentenced to Five Years in Prison for Robbing Five Banks Across Two StatesRead the Press Release
CAMDEN, N.J. - A Philadelphia man was sentenced today to 60 months in prison for robbing five banks in New Jersey and Pennsylvania over four months, U.S. Attorney Paul J. Fishman announced today.
Nathaniel Stroud, 34, previously pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging him with two counts of bank robbery. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in the case and statements made in court:
Stroud admitted robbing the following banks:
Date
Bank
Location
Sept. 27, 2013
PNC Bank
2401 Welsh Road, Philadelphia
Nov. 8, 2013
Roma Bank
80 Hartford Road, Delran, New Jersey
Nov. 15, 2013
TD Bank
13 Levitt Parkway, Willingboro, New Jersey
Dec. 19, 2013
TD Bank
2231 Cottman Avenue, Philadelphia
Jan. 9, 2014
1st Constitution Bank
140 Mercer Street, Hightstown, New Jersey
Stroud admitted that at each robbery, he handed the teller a note demanding cash and threatening the use of a gun.
In addition to the prison term, Judge Irenas sentenced Stroud to serve three years of supervised release and ordered him to pay restitution of $21,640.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, in Newark; the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi: and the Mercer County Prosecutor’s Office, under the direction of Acting Prosecutor Angelo J. Onofri, with the investigation. He also thanked the Delran, Willingboro and Hightstown police departments for their assistance.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney's Office Special Prosecutions Division in Camden.
Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden
Owner of Bodybuilding Drug Companies Indicted for Selling Misbranded DrugsRead the Press Release
Greenbelt, Maryland – A federal grand jury indicted Gavin Burns Smith, age 44, of New Port Richey, Florida, on May 20, 2015 for selling misbranded drugs with the intent to defraud, in connection with the sale of peptides to bodybuilders which were not approved by the FDA for human use. The indictment was returned on May 20, 2015 and unsealed yesterday upon his arrest.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Antoinette V. Henry of the U.S. Food & Drug Administration, Office of Criminal Investigations’ Metro Washington Field Office.
According to the seven count indictment, from 2010 to April 2012, Smith owned and operated Precision Peptides, in Lutz, Florida. From April 2012 to May 2015, Smith owned and operated DNA Peptides, in New Port Richey, Florida. Smith placed ads on the companies’ websites and sold body-enhancing injectable drugs to individuals seeking to enhance their physiques. These drugs were not approved by the FDA for use in humans.
On August 22, 2012, law enforcement executed federal search warrants at Precision Peptides and DNA Peptides. At some time between August 22, 2012 and March 2015, Smith began operating DNA Peptides out of his residence.
The indictment alleges that Smith caused DNA Peptides and Precision websites to display numerous disclaimers stating that all products sold were for “research/laboratory use only.” Additionally, prior to purchasing the products from the website, each customer was asked to certify that he or she read the disclaimer that the “chemicals/materials for sale here are . . . not intended for human ingestion.” Yet Smith allegedly intended that the products be used by consumers for bodybuilding purposes.
The drugs Smith allegedly sold included Growth Hormone Releasing Peptide-2, Growth Hormone Releasing Peptide-6, Melanotan II, Growth Hormone Releasing Hormone, Ipamorelin, Human Growth Hormone Fragment, Mechano Growth Factor, and Dehydroepiandrosterone, none of which the FDA has approved for use in humans.
The indictment alleges that Smith sold misbranded drugs to an undercover officer and shipped those drugs to various locations in Laurel, Columbia and Beltsville, Maryland on seven occasions from November 21, 2011 to March 12, 2015.
The indictment seeks forfeiture of $2,102,684.06, the value of the misbranded drugs subject to seizure.
Smith faces a maximum sentence of three years in prison, one year of supervised release, and a $250,000 fine. An initial appearance is scheduled for Smith before Magistrate Judge Jillyn K. Schulze in U.S. District Court in Greenbelt on June 30, 2015 at 1:45 p.m.
United States Attorney Rod J. Rosenstein commended the FDA Office of Criminal Investigations for its work in the investigation and thanked Assistant U.S. Attorney Kelly O. Hayes, who is prosecuting the case.
Norwegian shipping company and engineering officers charged in second indictment with environmental crimes and obstruction of justiceRead the Press Release
LAFAYETTE, La. – A federal grand jury has returned a three-count indictment charging Det Stavangerske Dampskibsselskab AS (DSD Shipping) and four employees with violating the Act to Prevent Pollution from Ships (APPS) and obstruction of justice in connection with the illegal discharge of contaminated waste-water directly into the sea, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Stephanie A. Finley for the Western District of Louisiana.
DSD Shipping is a Norwegian-based shipping company that operates the oil tanker M/T Stavanger Blossom, a vessel engaged in the international transportation of crude oil. Also indicted were four engineering officers employed by DSD Shipping to work aboard the vessel: Daniel Paul Dancu, 51, of Romania; Bo Gao, 49, of China; Xiaobing Chen, 34, of China; and Xin Zhong, 28, of China.
The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water. International and U.S. law requires that these vessels use pollution prevention equipment to preclude the discharge of these materials. Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.
“Companies operating vessels in navigable waterways have a responsibility to prevent oil spills and protect the public and the environment,” said U.S. Attorney Finley. “One of our priorities is to help preserve the natural resources of this state. Violators should be clear - charges will be filed against entities and persons who harm these resources and obstruct investigations.”
According to the indictment, in 2014, DSD Shipping and its employees discharged oil-contaminated waste water generated aboard the M/T Stavanger Blossom directly into the sea. To hide the illegal discharges, DSD Shipping and its employees maintained a fictitious oil record book that failed to record the disposal, transfer, or overboard discharge of oil from the vessel. The indictment further alleges that prior to an inspection by the U.S. Coast Guard, Chen ordered crewmembers to remove piping connected to the vessel’s overboard discharge valve, install new piping, and repaint the piping to hinder an inspection by the U.S. Coast Guard.
DSD Shipping and the engineering officers were charged with violating the APPS for failing to record overboard discharges in the vessel’s oil record book and with obstruction of justice for presenting false documents and deceiving the Coast Guard during an inspection in the Port of Lake Charles. If convicted, DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties. Dancu, Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges.
us_vs_dsd_et_al_15-cr-00125-01-05.pdf (530.45 KB)
This is the second indictment arising from a joint, multi-district investigation by the U.S. Coast Guard, Sector Mobile, U.S. Coast Guard Investigative Services and the Criminal Investigation Division for the Environmental Protection Agency. DSD Shipping, Dancu, Gao, Chen and Zhong were previously indicted in the Southern District of Alabama with a seven-count indictment charging related conduct. Assistant U.S. Attorney Howard C. Parker with the U.S. Attorney’s Office for the Western District of Louisiana, Assistant U.S. Attorney Mike Anderson with the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorney Shane N. Waller Environmental Crimes Section are prosecuting the case.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Norwegian Shipping Company and Engineering Officers Charged in Second Indictment with Environmental Crimes and Obstruction of JusticeRead the Press Release
A federal grand jury in Lafayette, Louisiana, has returned a three-count indictment charging Det Stavangerske Dampskibsselskab AS (DSD Shipping) and four employees with violating the Act to Prevent Pollution from Ships (APPS) and obstruction of justice in connection with the illegal discharge of contaminated waste-water directly into the sea, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Stephanie A. Finley for the Western District of Louisiana. DSD Shipping is a Norwegian-based shipping company that operates the oil tanker M/T Stavanger Blossom, a vessel engaged in the international transportation of crude oil. Also indicted were four engineering officers employed by DSD Shipping to work aboard the vessel: Daniel Paul Dancu, 51, of Romania; Bo Gao, 49, of China; Xiaobing Chen, 34, of China; and Xin Zhong, 28, of China.
The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water. International and U.S. law requires that these vessels use pollution prevention equipment to preclude the discharge of these materials. Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.
“Companies operating vessels in navigable waterways have a responsibility to prevent oil spills and protect the public and the environment,” said U.S. Attorney Finley. “One of our priorities is to help preserve the natural resources of this state. Violators should be clear - charges will be filed against entities and persons who harm these resources and obstruct investigations.”
According to the indictment, in 2014, DSD Shipping and its employees discharged oil-contaminated waste water generated aboard the M/T Stavanger Blossom directly into the sea. To hide the illegal discharges, DSD Shipping and its employees maintained a fictitious oil record book that failed to record the disposal, transfer, or overboard discharge of oil from the vessel. The indictment further alleges that prior to an inspection by the U.S. Coast Guard, Chen ordered crewmembers to remove piping connected to the vessel’s overboard discharge valve, install new piping, and repaint the piping to hinder an inspection by the U.S. Coast Guard.
DSD Shipping and the engineering officers were charged with violating the APPS for failing to record overboard discharges in the vessel’s oil record book and with obstruction of justice for presenting false documents and deceiving the Coast Guard during an inspection in the Port of Lake Charles. If convicted, DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties. Dancu, Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges. An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until and unless proven guilty.
This is the second indictment arising from a joint, multi-district investigation by the U.S. Coast Guard, Sector Mobile, U.S. Coast Guard Investigative Services and the Criminal Investigation Division for the Environmental Protection Agency. DSD Shipping, Dancu, Gao, Chen and Zhong were previously indicted in the Southern District of Alabama with a seven-count indictment charging related conduct. Assistant U.S. Attorney Howard Parker with the U.S. Attorney's Office for the Western District of Louisiana, Assistant U.S. Attorney Mike Anderson with the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorney Shane N. Waller Environmental Crimes Section are prosecuting the case.
Mound Man Pleads Guilty to Tax EvasionRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of JAMES SIGANOS, 50, to one count of tax evasion. SIGANOS was charged on May 26, 2015, by felony information, of evading corporate income taxes. He pleaded guilty yesterday before U.S. District Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn. A sentencing date has not yet been determined.
According to his guilty plea and documents filed in court, SIGANOS was the owner of a carpet-cleaning business located in Mound, Minnesota. As owner of the company, the defendant was responsible for filing federal corporate tax returns on behalf of the company. SIGANOS filed a Form 1120S U.S. Income Tax Return for the calendar year 2009, in which he underreported his company’s gross receipts or sales as $246,166.
In 2009, SIGANOS’ company had approximately $591,013 in gross receipts or sales. To avoid paying taxes on the full amount of his company’s revenue, SIGANOS cashed more than 1,400 checks totaling approximately $410,905 at a check cashing facility in Minneapolis. The result was that the defendant underreported his 2009 income by approximately $344,858. SIGANOS filed no corporate income tax returns for the tax years 2010, 2011, and 2012, resulting in an underreporting of approximately $438,991. The total tax loss caused by SIGANOS is approximately $300,000.
“Tax evasion is not a victimless crime,” said Shea Jones, Special Agent in Charge of the St. Paul Field Office IRS Criminal Investigation. “IRS special agents work diligently to identify and bring to prosecution those who evade their taxes.”
SIGANOS faces up to three years in prison.
This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division.
This case is being prosecuted by Assistant U.S. Attorney Joseph H. Thompson.
Defendant Information:
JAMES SIGANOS, 50
Mound, Minn.
Convicted:
- Tax Evasion, 1 count
###
Additional news available on our website.
Follow us on Twitter and Facebook.
United States Attorney’s Office, District of Minnesota: (612) 664-5600
Missouri Woman Sentenced for Orchestrating Tax Scheme to Obtain “Free Money”Read the Press Release
Tanya Nichols, 34, of St. Louis, Missouri, was sentenced to 57 months in federal prison on June 12, 2015, for orchestrating a four-year long income tax refund scheme, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Nichols was also ordered to pay $603,898 in restitution, to pay a $500 special assessment, and to serve three years of supervised release after she is released from prison.
Nichols, and her half-brother Justin Durley, 30, of Hazelwood, Missouri, were indicted by the federal grand jury on August 20, 2014. The pair was charged in lengthy indictment that alleged Nichols functioned as a dishonest tax preparer who filed false tax returns to claim inflated refundable tax credits for low-income tax filers.
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, remarked that, "Nichols, in her fraud scheme, recruited people by promising them ‘free money.’ But there is no free money in the tax code. Tax credits are paid out of the monies collected from men and women who do their lawful duty and contribute to the system. My office will not cease to combat this ‘free money’ mentality responsible for the various types of frauds against the government that we see. Tax cheats such as Nichols do not steal from some unknown ‘government,’ they steal directly out of the pockets of the hard-working people of Southern Illinois."
Nichols pleaded guilty on March 5, 2015, to conspiracy to obstruct or impair the Internal Revenue Service in the lawful assessment and collection of income taxes and distribution of tax refunds, three counts of mail fraud and one count of theft of government property. Durley was not charged with conspiracy, but rather was charged with one count of theft of government property and was separately sentenced to 3 months in prison for stealing more than $3,000.
The scheme to defraud was an ongoing tax refund scheme where Nichols
prepared fraudulent income tax returns for individual tax filers in order to generate "refundable tax credits," such as the earned income tax credit (EIC) and the child tax credit (CTC), which are refunded to the filer. The false information contained in the income tax returns prevented the IRS from making an accurate ascertainment, computation, and assessment of tax liabilities. It also prevented the IRS from making a correct distribution of income tax refunds. The false tax returns generated a larger tax refund than the filer was entitled to receive. Nichols shared the proceeds generated from the fraudulent returns with the tax filers, while collecting a fee in excess of that typically charged by legitimate tax preparers.
Nichols also paid finders’ fees to those who recruited tax filers to participate in the scheme. Evidence in Court revealed that Nichols and her coconspirators solicited low-income individuals residing in St. Louis, Missouri, and East St. Louis, Illinois, to become participants in this refund scheme by promising IRS tax refunds, sometimes marketed as "free money."
"Refundable tax credits" are vulnerable to abuse because they have cash value to tax filers. That means a filer can receive "refund" payments for refundable credits even when the person filing the tax return has never paid any income tax whatsoever. In the case of low-income tax filers, it is common for a person to have little or no federal tax liability while still qualifying to receive these valuable refundable tax credits. This means that a low-income filer can receive a tax "refund" that exceeds the amount of income tax the filer actually paid. In that situation, the filer is not receiving a refund of their money; but rather they are actually profiting from the tax code by receiving thousands of dollars’ worth of refundable tax credits that exceed the filer’s tax obligations. Nichols took advantage of this system by falsifying income, employment, dependents, and other factors, to fraudulently generate these large refundable tax credits.
The investigation was conducted by agents from the Internal Revenue Service / Criminal Investigations. The case was prosecuted by Assistant United States Attorneys Steven D. Weinhoeft and Norman R. Smith.
Man Indicted as Armed Career CriminalRead the Press Release
Robert M. Hertz, age 53, of 2418 Catskill Street SW, Cedar Rapids, Iowa, has been charged in a single count indictment filed today in United States District Court in Cedar Rapids yesterday, with possession of a firearm and ammunition as an armed career criminal.
The Indictment charges Hertz possessed a .40 caliber rifle and 237 rounds of ammunition on May 12, 2015, after he had previously been convicted of three violent felonies or serious drug offenses, namely, Arson, Second Degree Burglary, and Manufacturing Methamphetamine.
If convicted of being an armed career criminal, Hertz faces a mandatory minimum sentence of 15 years’ imprisonment, plus a fine of up to $250,000, and a term of supervised release of up to five years.
The arraignment on the indictment is set for June 16, 2015, at 1:30 p.m.
As with any criminal case, a charge is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Richard L. Murphy and was investigated by Homeland Security Investigations; Alcohol, Tobacco and Firearms; and the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-00053.
Follow us on Twitter @USAO_NDIA.
Man Arrested After Pointing Firearm at and Then Assaulting Federal Contract Security GuardRead the Press Release
DENVER – Christian Edward McCabe, age 25, of Denver, was arrested based on a Criminal Complaint after pointing a firearm at a federal government contract guard, and then resisting arrest, the U.S. Attorney’s Office announced in cooperation with the Federal Protective Service (FPS), a part of the Department of Homeland Security. The incident took place near the Byron White Federal Courthouse, which houses the 10th Circuit Court of Appeals. McCabe made his initial appearance before a U.S. Magistrate Judge yesterday. He is in custody pending a detention hearing and preliminary hearing, scheduled for June 16, 2015 at 10:30 a.m. before U.S. Magistrate Judge Kristen L. Mix.
The case involves a Protective Security Officer (PSO), who is a federally contracted security guard working for Door Electric Company, Inc. (DECO). PSOs are responsible for protecting federal buildings in the downtown Denver area. On June 9, 2015 at 1:50 a.m., a PSO was dispatched the Byron White Federal Courthouse, located at 1823 Stout Street, to remove a homeless man sleeping on the northwest corner steps. As the PSO was escorting the homeless man, an unknown male (later identified as McCabe), approached the two, pointed a handgun, and stated “hey guys.” The handgun was a Glock .40 caliber. The PSO pushed the homeless man out of the line of fire, and then pulled his firearm, pointed it at McCabe, and demanded twice that McCabe drop his weapon. McCabe complied on the second request.
As the PSO attempted to take McCabe into custody, McCabe resisted, resulting in a struggle. The defendant ultimately was able to break free and run from the PSO. He was later caught by two other PSO’s after the original PSO called for help after the struggle. At 2:47 a.m. McCabe was taken to Denver Health Medical Center (DHMC) for a physical evaluation and then transferred to a detention facility. Preliminary toxicology results showed McCabe had cocaine in his blood.
McCabe faces one count of assaulting, resisting, or impeding officers or employees. If convicted he faces not more than 20 years in federal prison, and up to a $250,000 fine.
“The Security Officer in this case showed tremendous restraint, professionalism and courage in dealing with the defendant,” said U.S. Attorney John Walsh. “He protected the man he was escorting from federal property at considerable risk to himself, and was able to restrain the defendant which ultimately helped with his capture before others were harmed.”
This case was investigated by the Federal Protective Service (FPS).
The defendant is being prosecuted by Assistant U.S. Attorney Jeremy Sibert.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a federal grand jury.
The charges contained in the Criminal Compliant are allegations, and the defendant is presumed innocent unless and until proven guilty.
Kennewick Man Sentenced to Four Years in Prison for Evading Taxes on Money He Stole by Defrauding InvestorsRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Michael Peter Spitzauer, age 47, of Kennewick, Washington, was sentenced today after having pled guilty to filing a false tax return and failing to file a tax return. United States District Court Judge Salvador Mendoza, Jr. sentenced Spitzauer to a four-year term of imprisonment and a one-year term of court supervision following release from federal prison. The Court also ordered Spitzauer to pay $10,365,000 in restitution to the victims of his fraud scheme, and $2,585,177 in restitution to the Internal Revenue Service.
According to court records, Spitzauer served as the CEO and President of Green Power, Inc., a biodiesel fuel business that operated at the Port of Pasco, which Spitzauer asserted possessed the technology to turn waste into biofuel. When he pled guilty, Spitzauer admitted that he defrauded various investors by representing that he would maintain their investment deposits in accounts controlled by an attorney, which deposits would not be utilized without the parties’ written agreement. In fact, Spitzauer controlled the bank accounts containing the deposits, and spent the investors’ deposits in unauthorized ways, such as on luxury goods, including a $1 million home in Kennewick, concert tickets, Seahawks and Sounders tickets, private school tuition for his children, and repaying prior investors who sought return of their funds.
Spitzauer also admitted to defrauding additional investors by falsely representing that their funds would be used to pay state agency fees or insurance bonds. As part of his scheme, Spitzauer manufactured fake communications from the state agency and the insurance companies to induce the investors to provide him funds. When Spitzauer received the investors’ funds, he spent the funds in unauthorized ways, such as personal expenditures, cash withdrawals, and unauthorized Green Power expenses.
From 2007 to 2013, Spitzauer stole more than $10.3 million from the various victims, who reside across the globe, including in China, Spain, the Netherlands, Ireland, Australia, Slovenia, Canada, Texas, and Maryland.
Spitzauer further admitted that he filed false tax returns for tax years 2007 and 2009, when he reported that he received no income and failed to disclose the funds he fraudulently obtained from his investors, which totaled approximately $4.5 million in taxable income for 2007 and 2009. Further, Spitzauer admitted that for tax year 2008, he failed to file a tax return, despite receiving approximately $3.2 million in taxable income, which represented funds he stole from the defrauded investors. As a result, Spitzauer evaded the assessment of approximately $2.5 million in taxes.
Michael C. Ormsby said, “The investing public should take notice that the cooperation among federal law enforcement agencies, including the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the U.S. Attorney’s Office, offers an assurance that investment fraud schemes will be uncovered and thoroughly investigated, and that the scammers will be prosecuted. This case is yet another example of the commitment of the United States Attorney’s Office to prosecute aggressively fraud cases in the Eastern District of Washington.”
“Mr. Spitzauer’s conduct is inexcusable” stated Teri Alexander, IRS Special Agent in Charge, Criminal Investigations. “Not only did he cheat investors out of millions of dollars, but he evaded his federal tax obligations by claiming no income from 2007 through 2009. This prosecution is a reminder that fraud will not go unchecked in the Eastern District of Washington and that Special Agents working for the IRS Criminal Investigations will continue to lend financial expertise to their federal law enforcement partners when such matters are investigated.
The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, with assistance from the Department of Homeland Security-Homeland Security Investigations. The case was prosecuted by Mary K. Dimke and James A. Goeke, Assistant United States Attorneys for the Eastern District of Washington.
Jacksonville Tax Preparer Charged with Aiding in Filing False Tax ReturnsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Candia V. Williams with nine counts of aiding in the preparation and filing of false tax returns. If convicted, she faces a maximum penalty of three years in federal prison on each count.
According to the indictment, Williams is the owner and operator of Express Tax Returns, a tax preparation business now known as “Taxonville.” In the course of preparing and filing income tax returns for individuals, Williams allegedly reported false information, including information concerning the individuals’ business income and eligibility for tax credits, in order to maximize refund amounts received.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Internal Revenue Service - Criminal Investigation. It will be prosecuted by Assistant United States Attorney Michael J. Coolican.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Ostby in Billings on June 9, 2015, and entering pleas of Not Guilty were:
- JOHN DAVID HUSKEY, a 43-year-old resident of Billings, appeared on charges of wire fraud. If convicted of the most serious charges contained in the indictment, HUSKEY faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-34
- MONICA LIMBERHAND, a 34-year-old resident of Lame Deer, appeared on charges of assault on a federal officer. If convicted of the charge contained in the indictment, LIMBERHAND faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-64
Appearing before U.S. Magistrate Lynch in Missoula on June 8, 2015 and entering pleas of Not Guilty were:
- ERIC SCOTT NEWMAN, a 38-year-old resident of Belgrade, appeared on charges of conspiracy to distribute heroin and possession with intent to distribute heroin. If convicted of the most serious charge contained in the indictment, NEWMAN faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Missouri River Drug Task Force and the Federal Bureau of Investigation. PACER Case Reference. 15-25
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Houston Man Sentenced After Using Counterfeit Cards in Nearly 400 Transactions at Sam’s ClubRead the Press Release
HOUSTON – Guang Fa Lin, 47, has been ordered to federal prison following his conviction of using counterfeit access devices, announced U.S. Attorney Kenneth Magidson. Lin pleaded guilty Jan. 26, 2015.
Today, U.S. District Judge Sim Lake, who accepted the guilty plea, handed Lin a 24-month sentence and further ordered he pay $206,236.92 in restitution. In handing down the sentence, Judge Lake noted that Lin was to not possess any credit cards without approval and engage in any employment involving a fiduciary role. Lin resided in Houston but has no legal status in the U.S. and is expected to face deportation proceedings following his release from prison.
At the time of his plea, Lin admitted that between 2012 and 2013, he used counterfeit credit cards, debit cards and credit and debit account numbers to obtain goods, services and other things of value. Lin used scores of credit and debit cards in approximately 395 transactions under various Sam’s Club Memberships bearing different identifying information to purchase items such as cigarettes, iPads, gum and gift cards.
The counterfeit cards bore account numbers banks and other financial institutions issued to account holders, many of whom reside outside of Texas. As a result, Lin caused more than $200,000 in losses.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation by U.S. Secret Service. Former Assistant U.S. Attorney (AUSA) Stephen L. Corso prosecuted the case. AUSA Suzanne Elmilady handled the sentencing hearing today.
Grand Bay Man Sentenced to More Than 15 Years in Child Pornography CaseRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced
that Denzil Earl McKathan, 34, of Grand Bay, was sentenced to 188 months in prison for
receiving child pornography. Following his release from prison, McKathan will be supervised for
the rest of his life by the United States Probation Office and required to register as a sex
offender.
McKathan pled guilty to receiving child pornography via the internet on his smartphone.
He had previously been convicted for possession of child pornography in the United States
District Court for the Southern District of Alabama in 2005. A routine check by McKathan’s
supervising probation officer in that case revealed Internet activity by McKathan in 2014, and a
search of his phone revealed nearly 500 images of child pornography, some of which depicted
the abuse of infants and toddlers.
This case was investigated by the United States Probation Office and the office of
Homeland Security Investigations, and was prosecuted by Assistant United States Attorneys
Suntrease Williams-Maynard and Sean P. Costello. The investigation was pursued as part of
Project Safe Childhood, the Department of Justice’s initiative to combat the proliferation of
technology-facilitated sexual exploitation crimes against children. For more information, please
visit
http://www.justice.gov/psc
Fugitive in Federal Pharmacy Robbery Case ArrestedRead the Press Release
ALBUQUERQUE – On April 29, 2015, federal and local officials announced the filing of four indictments alleging that six defendants robbed retail pharmacies in Albuquerque, N.M., to illegally obtain Oxycodone and other highly addictive opioid painkillers. At the time, three of the defendants were fugitives. The last of the three fugitives, Blake Gallardo, 22, of Albuquerque, N.M., was arrested last night. Gallardo made his initial appearance in federal court this morning on Indictment 15-CR-1504-JB, charging him and a co-defendant.
The four indictments announced on April 29, 2015, charged Gallardo and the following five Albuquerque residents with crimes arising out of the armed robberies of retail pharmacies: Roy Christopher, 28, Valentin Garcia, 22, Victor Hurtado, 20, and Joseph Montano, 22. At the time, Duran, Gallardo and Garcia had not been arrested and were considered fugitives. Since then, Garcia was arrested on May 21, 2015, and Duran was arrested the next day.
The indictments allege violations of the Controlled Substance Registrant Protection Act and the Safe Doses Act, laws passed to address the theft and diversion of prescription drugs. The Controlled Substance Registrant Protection Act was enacted in 1984, to combat the theft of prescription drugs from individuals and businesses registered with the DEA. It creates penalties for entering a pharmacy’s premises for the purpose of stealing controlled substances, and includes enhanced punishment for using a dangerous weapon. The Safe Doses Act was enacted in Oct. 2012, to fight medical theft and protect patients from unknowingly using stolen and mishandled drugs. It provides for enhanced sentences for those who rob pharmacies of controlled substances; individuals who steal medical products; and “fences” who knowingly obtain stolen medical products for resale in the supply chain.
Indictment 15-CR-1504 charges Gallardo and Duran with (1) violating the Hobbs Act by interfering with interstate commerce by robbery and violence; (2) brandishing a firearm during a crime of violence; (3) violating the Controlled Substance Registrant Act by robbery involving controlled substance; (4) violating the Safe Doses Act by theft of medical products; and (5) possession of Oxycodone with intent to distribute. The charges against Gallardo and Duran arise out of the armed robbery of a Walgreens Pharmacy on Jan. 30, 2015.
Hurtado, Montano and Garcia are separately charged in two indictments with the same five crimes as Gallardo and Duran. Hurtado and Montano are charged in Indictment 15-CR-1506-JB, based on the armed robbery of a Smith’s Pharmacy on Jan. 6, 2015, and Garcia is charged in Indictment 15-CR-1505-JB, based on the armed robbery of a Walgreens Pharmacy on Jan. 6, 2015.
Christopher is charged in Indictment 15-CR-1504-JB, with (1) violating the Hobbs Act by interfering with interstate commerce by robbery and violence; (2) violating the Safe Doses Act by theft of medical products; and (3) possession of Oxycodone with intent to distribute. The charges against Christopher arise out of the robbery of a CVS Pharmacy on Aug. 14, 2014.
The charges in the indictments carry the following statutory maximum penalties on conviction: Hobbs Act – 20 years of imprisonment; robbery of controlled substances – 25 years of imprisonment; Safe Doses Act – 30 years of imprisonment; possession of Oxycodone with intent to distribute – 20 years in prison. The statutory maximum penalty for a conviction for brandishing a firearm during a crime of violence is a mandatory seven years in prison to be served consecutive to any prison sentence on the other sentence imposed on the other charges.
The defendants have entered not guilty pleas to the charges against them. They remain in federal custody pending trial. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
These cases were investigated by the Albuquerque office of the FBI, the Tactical Diversion Squad of the DEA in Albuquerque, and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office in Bernalillo County. The cases are being prosecuted by Assistant U.S. Attorneys Joel R. Meyers and Shaheen P. Torgoley.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
These cases are being prosecuted pursuant to a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
The cases also are being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Ft. Dix Man Arrested for Alleged Sexual AssaultRead the Press Release
TRENTON, N.J. – A Ft. Dix, New Jersey, man was arrested by the Naval Criminal Investigative Service at a U.S. Marine training facility in Pensacola, Florida, on charges that he allegedly sexually assaulted two young women at Joint Base McGuire-Dix-Lakehurst, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Michael C. Taylor, 19, of Fort Dix, New Jersey, is charged by indictment with three counts of aggravated sexual abuse by force and two counts of abusive sexual contact. He had his initial court appearance this morning before U.S. Magistrate Judge Charles J. Kahn Jr. in Pensacola, Florida, federal court. He will have an initial appearance and arraignment in Trenton federal court at a date to be determined.
According to the indictment:
On March 15, 2014, Taylor caused two individuals to engage in sexual acts by the use of force, and also caused one of the individuals to engage in sexual contact by the use of force. At the time of the alleged offenses, Taylor, who is now a member of the U.S. Marine Corps, was living in military housing at Joint Base McGuire-Dix-Lakehurst as a military dependent.
The three counts of sexual assault each carry a maximum potential penalty of life in prison and a $250,000 fine. The two counts of abusive sexual contact each carry a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the U.S. Air Force Office of Special Investigations, under the leadership of Detachment Commander Matthew J. Sarkissian, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.
Franklinville, New Jersey, Man Admits Using Fraudulent Invoices to Steal More Than $600,000 from Elementary Schools Across the U.S.Read the Press Release
CAMDEN, N.J. – A Franklinville, New Jersey, man today admitted mailing fraudulent invoices for non-existent workbooks to more than 73,000 schools throughout the United States, U.S. Attorney Paul J. Fishman announced.
Robert S. Armstrong, 44, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to Count One of a superseding indictment charging him with mail fraud.
According to documents filed in this case and statements made in court:
Armstrong admitted that from July 2014 through September 2014, he sent more than 73,000 fraudulent invoices to schools throughout the United States seeking payment for non-existent workbooks. Armstrong opened mail boxes in Sewell, New Jersey, and Las Vegas, Nevada, under the name of his business, Scholastic School Supply LLC. Armstrong then drafted fraudulent invoices typically seeking payments of $647.50 for batches of math or language workbooks that the schools never ordered or received. In order to make the invoices appear legitimate, Armstrong included phony International Standard Book Numbers (ISBN), which are unique identifying numbers assigned to each book published in the United States.
Armstrong used a bulk mailing company to mail the phony invoices to more than 73,000 schools. Each invoice included a payment envelope preaddressed to Scholastic School Supply’s Sewell or Las Vegas address.
In response to the phony invoices, hundreds of schools throughout the United States sent payments to Scholastic School Supply. Armstrong deposited the checks from the victim schools into at least seven accounts that he had opened at various banks in the name of Scholastic School Supply. As of March 12, 2015, 938 schools sent checks to Scholastic School Supplies totaling $612,774.
Under terms of the plea agreement, Armstrong has agreed to serve a sentence of 44 months in prison followed by three years of supervised release. According to the Federal Rules of Criminal Procedure, when the parties agree to a stipulated sentence, the judge has the opportunity to accept or reject the plea agreement. Judge Hillman said he will reserve his decision on accepting plea agreement until he reviews a pre-sentence report from the U.S. Probation Office, which typically takes 60 to 90 days to prepare. Contingent upon the acceptance of his guilty plea by Judge Hillman, Armstrong’s sentencing is scheduled for Sept. 25, 2015.
U.S. Attorney Fishman credited law enforcement officers of the U.S. Postal Inspection Service, under the direction of Inspector in Charge David Bosch in Philadelphia; the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Dalton; the Gloucester County Office of Consumer Protection, under the direction of Harold Spence, Director of Consumer Affairs; the Washington Township Police Department, under the direction of Raphael Muniz, Chief of Police; and the Franklin Township Police Department, under the direction of Mike Rock, Chief of Police.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office Criminal Division in Camden and Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office Criminal Division in Newark.
Four Indicted on Gun Charges Related to Scheme to Ship Guns to LebanonRead the Press Release
Ali Afif Al Herz, age 50, Bassem Afif Herz, age 30, Sarah Majid Zeaiter, age 24, and Adam Al Herz, age 22, all from Cedar Rapids, Iowa, have been charged in a 46 Count indictment filed yesterday in United States District Court in Cedar Rapids.
Ali Afif Al Herz is charged with 24 counts of possessing firearms after having been previously convicted of domestic abuse.
Bassem Afif Herz is charged with conspiracy.
Sarah Zeaiter is charged with three counts of making false claims to United States citizenship on bank records and federal firearms forms.
Adam Al Herz is charged with 17 counts of possessing firearms as an unlawful drug user.
Additionally, each defendant is charged with conspiracy to: engage in the business of dealing in firearms; ship and transport firearms in interstate commerce as part of such dealings; fail to notify common carriers of the existence of firearms and ammunition in interstate shipments; and, making false statements and representations on firearms transaction records. The defendants are also charged with conspiring to engage in money laundering.
Each false claim to citizenship charge is punishable by up to three years’ imprisonment. Each unlawful possession of firearms charge is punishable by up to 10 years imprisonment. The firearms conspiracy charge is punishable by up to five years’ imprisonment. The money laundering conspiracy charge is punishable by up to 20 years’ imprisonment.
In addition to the potential terms of imprisonment, each defendant faces a term of supervised release to follow imprisonment, plus a fine of up to $250,000 on each count. The indictment also seeks to forfeit all guns and ammunition involved in the criminal conduct.
The arraignment on the indictment for Adam Al Herz is set for June 17, 2015, at 1:30 p.m. The arraignment on the indictment for the other three defendants is set for June 16, 2015, at 1:30 p.m.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Richard L. Murphy and was investigated by Homeland Security Investigations: Alcohol, Tobacco and Firearms; and the Federal Bureau of Investigation.
Court file information available: https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-00054.
Follow us on Twitter @USAO_NDIA.
Former State Public Health Administrator Sentenced for Bribery, Kickback Scheme and Filing False Income Tax ReturnsRead the Press Release
Springfield, Ill. – A former director of human resources for the Illinois Department of Public Health, Roxanne Jackson, has been sentenced to 25 months in federal prison for her part in a bribery and kickback scheme. In addition to the prison term, U.S. District Judge Sue E. Myerscough ordered Jackson to pay $1,000,000 in restitution to the Illinois Department of Public Health and an additional $172,825 to the IRS. Jackson was ordered to remain on supervised release for three years following her release from prison. Jackson remains on bond and will self-report to begin serving her sentence on a date and location determined by the federal Bureau of Prisons.
Jackson, 50, of Olympia Fields, Ill., waived indictment and pled guilty on Sept. 23, 2014, to participating in a bribery and kickback scheme with IDPH Chief of Staff Quinshanta Golden. Jackson, at Golden’s direction, was a paid consultant to three not-for-profit entities that received state grant funds and a security business that conducted background checks and interviews of Illinois nursing home residents. As part of the scheme, Jackson was required to pay Golden one-half of whatever she received in grant funds, less any funds to be withheld for payment of taxes, which were never paid, and to pay Golden kickbacks for each background investigation performed by the security firm.
As a result of the scheme, from 2006 to 2009, Jackson received more than $1,000,000 in grant and contract funds, and paid Golden approximately $433,000 in kickback payments. For tax years 2006, 2007, 2008, and 2009, Jackson failed to report approximately $908,266 in income, resulting in failure to pay $172,825 in taxes due.
Golden is scheduled to be sentenced on June 19, 2015, for her role in the bribery and kickback scheme and for obstruction of justice.
Central District of Illinois U.S. Attorney Jim Lewis expressed his appreciation to the federal law enforcement officers assigned and the agencies that support the Central District of Illinois U.S. Attorney’s Office’s Public Corruption Task Force and participated in this investigation: the U.S. Postal Inspection Service, Chicago Division; Internal Revenue Service, Criminal Investigation Division, Chicago Field Office; the Illinois Secretary of State Office of Inspector General; and, Illinois State Police, Division of Internal Investigations. Assistant U.S. Attorney Timothy A. Bass prosecuted the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois.
Individuals who wish to provide information to law enforcement regarding matters of alleged public corruption are urged to call the U.S. Attorney’s Office at 217-492-4450.
Former Patriots Player and Former Bank Executive Charged with Securities FraudRead the Press Release
BOSTON – A former New England Patriots player and a former bank executive were arrested this morning on securities fraud charges in connection with an alleged Ponzi scheme involving fraudulent loans to professional athletes.
Will Allen, 36, of Davie, Fla., and Susan Daub, 55, of Coral Springs, Fla., were charged in a criminal complaint with one count of securities fraud. Allen played for the New York Giants from 2001 to 2005, the Miami Dolphins from 2006 to 2011, and the New England Patriots in 2012. Daub was previously employed as a vice president of a bank. Allen and Daub were arrested this morning and had their initial appearances today before a magistrate judge in U.S. District Court in Fort Lauderdale, Fla.
As alleged in the complaint, Allen and Daub were partners in Capital Financial Partners (CFP), a Massachusetts company whose website advertised “private lending to unique individuals.” According to the website, CFP “specialize[d] in issuing short-term loans to professional athletes.” To fund the loans, Allen and Daub allegedly solicited money from investors, telling them that their money would be loaned to the athletes, and that they would be repaid with interest according to a predefined schedule.
While CFP did make some loans to athletes, the complaint alleges that Allen and Daub diverted millions of investor dollars to themselves and other business ventures. To keep investors from discovering their fraud, Allen and Daub allegedly used newly invested money to make payments to existing investors, which they falsely characterized as interest and principal payments from the loan recipients. To generate additional money, Allen and Daub allegedly oversubscribed loans, falsely telling investors that the loans were larger than they actually were and collecting more money from investors than they were actually lending to athletes. In other instances, Allen and Daub allegedly collected money for loans that CFP never made at all.
The charging statute provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $5 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The U.S. Attorney’s Office received valuable assistance from the Securities and Exchange Commission, which previously charged Allen and Daub in a civil complaint. The criminal case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Legislative Clerk Indicted for White Powder HoaxRead the Press Release
DES MOINES, IA – Michael Dekota McRae, former legislative clerk in the Iowa Legislature, was arraigned this afternoon on an indictment charging him with false information and hoaxes, in violation of Title 18, United States Code, Section 1038(a)(1), announced United States Attorney Nicholas A. Klinefeldt.
If convicted of this charge, McRae faces up to 5 years imprisonment, up to a $250,000 fine. McRae may also be required to reimburse the state for costs associated with the commission and investigation of this crime.
The charge related to an incident at the Iowa Statehouse on April 3, 2012, where McRae reported opening an envelope containing a written death threat and a quantity of white powder during a public legislative session. McRae’s report resulted in the temporary shutdown of the Iowa legislative session.
The indictment, returned by a Southern District of Iowa grand jury on April 29, 2015, alleges McRae to be the author of the threatening letter. Trial has been scheduled for August 3, 2015.
The public is reminded that an indictment is only an accusation, and the defendant is presumed innocent unless and until proven guilty.
Former DEA Agent Arrested at LAX on Fraud and Passport ChargesRead the Press Release
RIVERSIDE, California – A former special agent with the Drug Enforcement Administration has been arrested on federal fraud charges for allegedly posing as an active FBI agent and helping a man who posed as a former federal prosecutor to defraud a man who enlisted their help in recovering money lost in two fraudulent investment schemes.
David Garcia Herrera, 70, of Torrance, was arrested last night at Los Angeles International Airport by special agents with the Federal Bureau of Investigation. Herrera, who is expected to be arraigned on a nine-count indictment this afternoon in United States District Court in Riverside, was arrested as he returned from a trip abroad.
Herrera is one of two defendants charged in an indictment that was returned by a federal grand jury on June 5 with two counts of conspiracy to commit wire fraud, six counts of wire fraud and one count making false statements in a passport application.
The second defendant in the case – Jerome Arthur Whittington, 65, of La Quinta, who allegedly posed as a successful attorney and told at least one victim that he was a former federal prosecutor – is currently in custody after being indicted in June 2014 in relation to two other fraud schemes.
In the indictment filed last week, Whittington and Herrera allegedly joined forces to defraud two victims, one of whom lost money in fraudulent investments, and another who was trying to obtain immigration benefits for his wife.
In the first scheme, Whittington posed as an attorney and Herrera pretended to be an FBI special agent as they falsely promised the victim they could help him recover losses in fraudulent schemes related to two companies, Pacific Property Assets and Medical Capital Corporation. Whittington and Herrera told the victim that they were able to seize assets from the two fraudulent companies, but the victim needed to provide money that would be used to “post bonds” that were required prior to seizing the assets. After Whittington claimed that he had obtained a $4 million judgment, Whittington told the victim that representatives from the companies and other victims were very angry and that he should leave the country to avoid confrontations and harassment.
The victim paid Whittington approximately $290,000 for help in recovering his losses, but Whittington simply used the money for his own person expenses, which included making payments to other victims of his scheme and to Herrera.
In the second scheme discussed in this month’s indictment, Whittington also posed as an attorney. Herrera told the victim in this second scheme that he was an investigator with the FBI and that Whittington was a former federal prosecutor. Based on these and other false statements and promises, the victim retained Whittington and paid approximately $8,500 for assistance in his wife’s immigration case – help that was never provided.
Whittington and Herrera are also charged with making false statements on a passport application. In relation to this count, Herrera allegedly falsely stated that he had been a personal friend of Whittington for seven years.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If they are convicted of the nine counts in the indictments, both defendants would face a statutory maximum penalty of 170 years in federal prison.
Whittington also faces two counts of wire fraud contained in an indictment filed just over one year ago. That indictment alleges that Whittington used lies and misrepresentations – including pretending to be an attorney – to convince one victim to invest in a real estate deal and another to put money into a business venture involving an Internet browser, both of which were fraudulent. As a result of the two schemes outlined in this indictment, the two victims lost approximately $165,000.
The cases against Whittington and Herrera are part of an ongoing investigation being conducted by the FBI and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). The Bossier Parish Sheriff’s Office in Bossier City, Louisiana, and the Ventura County Sheriff’s Department have provided substantial assistance.
Release No. 15-060
Former Captain of Texas Mexican Mafia Sentenced for Narcotics TraffickingRead the Press Release
McALLEN, Texas – An Edinburg man has been ordered to federal prison following his conviction of possession with intent to distribute more than one kilogram of Heroin, announced U.S. Attorney Kenneth Magidson. Jesus Rodriguez Barrientes, 49, pleaded guilty Sept. 5, 2012. Also sentenced today were Elizabeth Michele Barrientes, 40, of Edinburg, and Fermin Martinez-Luna, 43, of Reynosa, Tamaulipas, Mexico.
Today, Chief U.S. District Judge Ricardo H. Hinojosa ordered Jesus Barrientes serve a total of 262 months in federal prison to be immediately followed by five years of supervised release. At the hearing, additional testimony was presented showing that Barrientes directed at least five other subjects to assist with his drug trafficking activities and that some of the heroin purchases were performed at his residence. Evidence also showed he had an extensive criminal record and that he has been a member of the Texas Mexican Mafia for a significant amount of time.
Previous evidence presented to the court proved Rodriguez Barrientes was head of the Texas Mexican Mafia in the Rio Grande Valley and would supply heroin to other members in Texas.
At the time of his plea, Rodriguez Barrientes admitted he planned to receive two kilograms of heroin from a source of supply from Mexico. Martinez-Luna smuggled the heroin from Mexico to the United States and delivered it to a confidential informant. This heroin was to be delivered to Jesus Barrientes later that day.
Martinez-Luna previously pleaded guilty to possession with intent to distribute more than one kilogram of Heroin. He was also sentenced today to a 46-month-term of imprisonment.
Elizabeth Barrientes had pleaded guilty to misprision of felony and received a sentence today of two years probation. At the time of the offense, she was married to Jesus Barrientes and admitted to knowing of her husband’s gang affiliation and his narcotics trafficking activities. Evidence at the time of her plea showed that on one occasion she was present when her husband sold five ounces of heroin to an FBI confidential informant. She concealed the proceeds of the sale in order to prevent law enforcement from detecting the criminal transaction.
Jesus Barrientes and Martinez-Luna have been in custody since their arrest in August 2011 where they will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This prosecution was part of an investigation conducted FBI and the Texas Department of Public Safety. Assistant U.S. Attorney Robert Wells Jr. prosecuted the case.
Fairfield Man Pleads Guilty to Illegally Possessing Firearm in White CountyRead the Press Release
Alvin L. Ewing, II, 51, of Fairfield, Illinois, pled guilty today in United States District Court in Benton to a two-count indictment charging him with being a felon in possession of a firearm and being an illegal drug user in possession of a firearm, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. The offenses occurred on August 21, 2014, in White County.
The charges stemmed from a traffic stop conducted by the Illinois State Police on a motorcycle Ewing was driving near Grayville, Illinois. During the traffic stop the Grayville Police Department’s drug detection dog alerted on the motorcycle. A subsequent search of a box strapped to the motorcycle revealed a Bushmaster .223 caliber AR-15 style rifle and a high capacity magazine loaded with 14 rounds of ammunition. Because he was a convicted felon, Ewing was placed under arrest. A search of Ewing incident to that arrest revealed 4 individually baggies of methamphetamine, a digital scale, and a hypodermic syringe. Ewing admitted that he knowingly possessed the firearm and was a user of methamphetamine.
Sentencing was set for October 6, 2015, at 1:30 p.m. at the United States Courthouse in Benton. Because of his extensive prior conviction record, Ewing faces a minimum of 15 years in prison, a $250,000 fine, and 5 years of supervised release after his incarceration.
Ewing has been held without bond in the custody of the United States Marshal since his arrest on federal charges in October 2014. He was returned to the custody of the Marshal to await sentencing.
The case was investigated by the Carmi office of the Southern Illinois Drug Task Force, the Illinois State Police, and the Grayville Police Department.
The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Drug Trafficker Sentenced to 108 Months in Federal Prison on Firearms and Drugs ConvictionsRead the Press Release
DALLAS — A Dallas man who pleaded guilty last year to his role in a drug trafficking conspiracy and using firearms in furtherance of that drug trafficking crime, has been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Jesse Rodriguez, 35, was sentenced on Wednesday by U.S. District Judge Sam A. Lindsay to serve a total of 108 months in federal prison. Rodriguez pleaded guilty in September 2014 to one count of conspiracy to distribute cocaine and heroin and one count of possessing a firearm in furtherance of that drug trafficking crime.
According to documents filed in the case, Rodriguez admitted that from approximately November 1, 2013, to February 21, 2014, he and co-defendant Felix Medina, 32, conspired together and with others to distribute and possess with the intent to distribute, cocaine and heroin. Rodriguez also admitted that during that time, he possessed numerous firearms. Medina has also pleaded guilty and is scheduled to be sentenced on August 17, 2015.
In furtherance of the conspiracy according to the factual resume, Rodriguez and Medina had two residences in Dallas, next door to the other, from which they would sell and store the drugs, store the proceeds from their illegal drug sales, and possess firearms to protect themselves, the controlled substances, and the proceeds. When law enforcement executed a search warrant at the two residences on February 21, 2014, they found, among other things, approximately 223 grams of suspected cocaine, more than $18,000 in cash, baggies, more than 5,000 rounds of ammunition, video surveillance equipment, and approximately 40 firearms, including one Rodriguez had in his waistband.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Deputy Criminal Chief Assistant U.S. Attorney Lisa Miller prosecuted.
Drug Distributor for Cherry Hill Gang Sentenced to 11 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Robert Sanders, a/k/a “Man,” age 28, of Baltimore, today to 11 years in prison followed by five years of supervised release for conspiracy to distribute and possess with intent to distribute heroin and cocaine base (crack), in connection with his membership in a group known as “Coppin Court” which operated in the Cherry Hill section of Baltimore.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to his plea agreement, Sanders, who is associated with a criminal organization in Cherry Hill known as “Hillside,” as well as “Coppin Court,” is a long time narcotics distributor who has distributed crack cocaine and heroin with members of Coppin Court in Cherry Hill. Sanders has also been associated with other “Down the Hill” individuals selling drugs. Sanders sold crack cocaine out of an apartment located on Round Road in Cherry Hill. Sanders also committed robberies.
Additionally, on February 5, 2003 in the 2800 block of Winwood Court in Cherry Hill, Sanders used a gun to shoot and injure an individual associated with the Up Da Hill group, a rival drug trafficking organization. Sanders possessed this gun in connection with his ongoing drug trafficking activities.
During his participation in the drug conspiracy beginning in at least 2003, Sanders was found to be responsible for the distribution of between one and three kilograms of heroin, and between 280 and 840 grams of crack.
United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation and thanked the FBI, Baltimore County Police Department, Anne Arundel County Police Department and Baltimore City Sheriff’s Office for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys Andrea L. Smith, Seema Mittal and Patricia McLane, who prosecuted this Organized Crime Drug Enforcement Task Force case.
District Woman Sentenced to Nine Years in Prison for Physically Abusing Nine-Year-Old SonRead the Press Release
WASHINGTON – A 27-year-old woman, of Washington D.C., was sentenced today to nine years in prison for physically abusing her son, announced Acting U.S. Attorney Vincent H. Cohen, Jr. and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
The woman, who is not identified here to protect the privacy of the victim, pled guilty in March 2015, in the Superior Court of the District of Columbia, to charges of aggravated assault against a minor, first-degree child cruelty while armed, and first-degree child cruelty. The plea, which was contingent upon the Court’s approval, called for the nine-year prison term. The Honorable Rhonda Reid Winston accepted the plea and sentenced the defendant accordingly. Following her prison term, the defendant will be placed on three years of supervised release.
According to the government’s evidence, between March 2014 and June 2014, the defendant and her boyfriend physically abused the defendant’s nine-year-old son in a variety of ways, including starving him, binding his limbs with duct tape, scalding him with hot water, and keeping him locked inside of a bedroom and bathroom for days at a time. The abuse was discovered in June 2014, when the defendant brought the boy to his biological father, who took the child to the emergency department at Children’s National Medical Center. The defendant’s boyfriend, 52, is awaiting trial in October 2015; he has pled not guilty to charges.
In announcing the sentence, Acting U.S. Attorney Cohen and Chief Lanier commended the work performed by detectives from the Metropolitan Police Department’s Youth Investigations Division. They also recognized the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Victim/Witness Advocate Melissa Milam, Paralegal Specialist D’Yvonne Key; Child Forensic Interview Specialist Tracy Owusu, and Criminal Investigators Tommy Miller and Melissa Matthews.
Finally, they commended the work of Assistant U.S. Attorney Jason Park, who prosecuted the case.
Denver Tre Seven Crip Gang Member Charged with Being a Felon in Possession of a FirearmRead the Press Release
DENVER – Sean Jovan Swanson, age 29, of Denver, was arrested and charged with being a felon in possession of a firearm, U.S. Attorney John Walsh and ATF Denver Division Special Agent in Charge Luke Franey announced. Swanson, a Tre Seven Crip, was first arrested by the Denver Police Department’s Fugitive Unit. The case was then adopted by the ATF. Swanson is in state custody facing assault charges in Denver District Court stemming from an incident where Swanson pistol-whipped a victim, leaving significant facial injuries. The charges were ordered unsealed on June 11, 2015.
According to the affidavit in support of the Criminal Complaint, on May 1, 2015, the Denver Police Department (DPD) Fugitive Unit was asked to assist in the apprehension of a potentially violent and dangerous individual identified as Sean Jovan Swanson. Swanson had an active felony warrant for Aggravated Robbery, stemming from a “home invasion” incident which occurred on May 1, 2015. On May 5, 2015, the DPD Fugitive Unit responded to the area of the Timbers Hotel. They had obtained information that Swanson was likely staying there.
After conducting surveillance, the DPD Fugitive Unit saw Swanson at the motel lobby, and heard him ask for the key to a particular room. After additional officers arrived at the scene, the Fugitive Unit detectives along with uniformed officers approached the motel room door and knocked. A female answered the door. At that time, officers saw Swanson attempt to flee through a back patio door. He changed his mind, and ran back into the motel room. From there he was taken into custody. In close proximity to Swanson was a backpack. In the backpack was a loaded handgun stolen out of Denver.
Swanson had a number of felony convictions prohibiting him from possessing a firearm or ammunition, including: a) Arapahoe County District Court for Robbery in 2003; b) Denver District Court for Attempted Escape from Felony Pending in 2008; and c) U.S. District Court for being a felon in possession of a firearm in 2011. Swanson was on federal supervised release on this case at the time of his arrest.
Swanson faces one count of being a felon in possession of a firearm. If convicted on that count he faces not more than 10 years in federal prison, and up to a $250,000 fine.
“As illustrated by this case against defendant Swanson, the U.S. Attorney’s Office, ATF and the Denver Police Department use a targeted approach to charging gun cases,” said U.S. Attorney John Walsh. “We carefully consider the impact of such charges on our relationship with the communities affected by gun violence, and we carefully select for prosecution the people whose criminal activities are having the most impact on those communities. We will continue to maintain and build upon the trust of the community in our focused approach toward making those communities safer.”
“Mr. Swanson continued to carry a firearm and engage in violent activity even while being on supervised release for a federal firearms conviction,” said ATF Denver Division Special Agent in Charge Luke Franey. “ATF and our task force partners will continue to have zero tolerance for violent individuals who possess and use firearms.”
“We have an obligation to the community to keep them safe and removing armed criminals from the street is one way we can assure our citizens’ safety,” said Denver Police Chief Robert White. “I cannot stress how important it is that we collaborate with the members of the community to combat violent crimes.”
These cases arise out of the Project Safe Neighborhood initiative, a partnership which includes the Aurora, Denver and Lakewood Police Departments (among others), working in concert with the ATF and the U.S. Attorney’s Office.
The defendant is being prosecuted by Assistant U.S. Attorney Celeste Rangel.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a federal grand jury.
The charges contained in the Criminal Compliant are allegations, and the defendant is presumed innocent unless and until proven guilty.
David Christopher Mayhew Convicted of Conspiracy, Mail Fraud, and Money LaunderingRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced that today in federal court before Senior United States District Judge James C. Fox, a jury convicted DAVID CHRISTOPHER MAYHEW , 43, of Conspiracy, Wire Fraud, Mail Fraud, and Money Laundering.
MAYHEW was named in a Superseding Indictment filed on July 2, 2014. He was originally indicted on July 9, 2013. His co-defendant, Ronald McCullough, has not yet been located and arrested on the charges.
Assistant United States Attorney David A. Bragdon stated: “MAYHEW used trust in himself and trust in others to deprive victims of money, money that many of them had taken a lifetime to save.”
“Few betrayals are as devastating as being the victim of investment fraud. David Mayhew and Ronald McCullough preyed upon people’s trust and financial stability for the sake of greed,” said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation. “Today’s jury verdict with respect to Mayhew, delivers a measure of justice to those victimized. IRS Criminal Investigation remains committed to the pursuit of those who profit at the expense of innocent victims, through criminal activity.”
At trial, the Government presented evidence that MAYHEW was involved in an investment fraud scheme that spanned from January 2009 to May 2012 and swindled more than $2,000,000 from investors, promising them returns as much as 100% in 30 days. One victim testified that he had lost his family’s house as a result of the fraud. Two other victims testified that they had to back out of contracts to purchase property because of the fraud.
Investigation of this case was conducted by the FBI, the IRS Criminal Investigation, the Postal Inspection Service, and the North Carolina Secretary of State’s Office, Securities Division. Assistant United States Attorney David A. Bragdon represented the government.
Columbus Man Sentenced for Six Armed Robberies in Four StatesRead the Press Release
Southern District of Ohio press release:
COLUMBUS, Ohio – William J. McBride, Jr., 49, of Columbus, was sentenced in U.S. District Court to 216 months in prison for armed bank robberies in Ohio, West Virginia, Kentucky and Indiana.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, John E. Kuhn, Jr., Acting United States Attorney for the Western District of Kentucky, Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Joshua Minkler, United States Attorney for the Southern District of Indiana, announced the sentence handed down today by Senior U.S. District Court Judge James L. Graham.
According to court documents, between June 21, 2014 and August 23, 2014, McBride robbed six different federally insured banks in five different federal jurisdictions while armed with a dangerous weapon.
McBride, at gunpoint, demanded and received more than $21,000 in cash total from the banks. The defendant did not wear any disguise during the robberies, and witnesses in each location described him similarly.
On August 23, 2014, a witness reported McBride’s license plate number upon seeing the defendant flee in his vehicle after robbing the Wesbanco Bank in St. Clairsville, Ohio. Law enforcement officials discovered the vehicle was registered to McBride and subsequently arrested him later the same day in a hotel in Columbus, Ohio.
McBride pleaded guilty to six counts of armed robbery on February 2, 2015. He was also sentenced to five years supervised release.
U.S. Attorney Stewart commended the cooperative investigation by the FBI and other law enforcement agencies in each jurisdiction, as well as Assistant United States Attorney Salvador A. Dominguez, who represented the United States in this case.
Columbus Man Sentenced for Six Armed Robberies in Four StatesRead the Press Release
COLUMBUS, Ohio – William J. McBride, Jr., 49, of Columbus, was sentenced in U.S. District Court to 216 months in prison for armed bank robberies in Ohio, West Virginia, Kentucky and Indiana.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, John E. Kuhn, Jr., Acting United States Attorney for the Western District of Kentucky, Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Joshua Minkler, United States Attorney for the Southern District of Indiana, announced the sentence handed down today by Senior U.S. District Court Judge James L. Graham.
According to court documents, between June 21, 2014 and August 23, 2014, McBride robbed six different federally insured banks in five different federal jurisdictions while armed with a dangerous weapon.
McBride, at gunpoint, demanded and received more than $21,000 in cash total from the banks. The defendant did not wear any disguise during the robberies, and witnesses in each location described him similarly.
On August 23, 2014, a witness reported McBride’s license plate number upon seeing the defendant flee in his vehicle after robbing the Wesbanco Bank in St. Clairsville, Ohio. Law enforcement officials discovered the vehicle was registered to McBride and subsequently arrested him later the same day in a hotel in Columbus, Ohio.
McBride pleaded guilty to six counts of armed robbery on February 2, 2015. He was also sentenced to five years supervised release.
U.S. Attorney Stewart commended the cooperative investigation by the FBI and other law enforcement agencies in each jurisdiction, as well as Assistant United States Attorney Salvador A. Dominguez, who represented the United States in this case.
Chinese National Pleads Guilty to Access Device Fraud and Aggravated Identity TheftRead the Press Release
Shu K. Chen, 38, from the People’s Republic of China, entered pleas of guilty to Conspiracy to Commit Wire Fraud and Aggravated Identity Theft, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. Chen faces up to thirty years in prison for the conspiracy and a consecutive two year sentence for the Aggravated Identity Theft charge, plus a $250,000 fine and up to three years supervised release and mandatory restitution.
Chen was originally arrested by the Collinsville Police Department on December 12, 2014, at the Walmart store in Collinsville, Illinois, for using counterfeit credit cards to fraudulently purchase gift cards. Chen, with the assistance of another individual, had used counterfeit credit cards to make purchases at retail locations in other jurisdictions. The credit cards were encoded on the magnetic strip with legitimate credit card account numbers of area residents who were victimized. Chen provided a false New Jersey driver’s license at the time of the arrest in the name of Chang Zhang, which was the name embossed on the front of the counterfeit credit cards.
This case was investigated by the United States Secret Service, the Internal Revenue Service/Criminal Investigation and the Collinsville Police Department, with the assistance of several other local police departments and the Madison County State’s Attorneys Office.
The prosecution of the case is being handled by Assistant U.S. Attorney Norman R. Smith.
Chambersburg Woman Found Guilty of Extortion for Attempting to Shut Down A Rival Tax Preparation BusinessRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Maria Colvard, age 49, of Chambersburg, was convicted late yesterday after a four-day jury trial on two counts of extortion and one count of aiding the impersonation of an employee of the United States. The jury returned the three guilty verdicts yesterday before United States Chief Judge Christopher C. Conner, in federal district court in Harrisburg, Pennsylvania. The jury acquitted Colvard of two counts of witness tampering.
According to U.S. Attorney Peter Smith, between February and May 2013, Colvard convinced an employee at Tax Max LLC, a tax preparation service owned by Colvard in Chambersburg and Hanover, Pennsylvania, to claim to be a criminal investigator with the Internal Revenue Service to shut down the rival business, known as Christina’s Tax Service, also located in Chambersburg. The employee, Merarys Paulino, then claimed to be an IRS agent and demanded money from Christina’s Tax Service as well as its client list. Paulino previously entered a guilty plea to impersonating an IRS agent and cooperated in the prosecution of Colvard.
As a result of the guilty verdicts, Colvard faces up to 24 years’ imprisonment and $600,000 in fines. She also faces deportation as a non-citizen. Chief Judge Conner ordered that Colvard be detained pending sentencing and ordered a presentence report be prepared by the Probation Department.
This case was investigated by the United States Treasury Inspector General for Tax Administration (TIGTA) and was prosecuted by Assistant United States Attorney Daryl F. Bloom.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 24 years’ imprisonment, a term of supervised release following imprisonment, and a $600,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Campaign Manager Sentenced to 24 Months for Coordinated Campaign Contributions and False StatementsRead the Press Release
A former campaign finance manager and political consultant was sentenced today in the Eastern District of Virginia to 24 months for coordinating $325,000 in federal election campaign contributions by a political action committee (PAC) to a congressional campaign committee. This is the first U.S. prosecution based on the coordination of campaign contributions between political committees.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Acting Special Agent in Charge Jennifer Leonard of the FBI Washington, D.C., Field Office’s Criminal Division made the announcement.
“The significant prison sentence imposed on Tyler Harber should cause other political operatives to think twice about circumventing laws that promote transparency in federal elections,” said Assistant Attorney General Caldwell. “As the first conviction for illegal campaign coordination, this case stands as an important step forward in the criminal enforcement of federal campaign finance laws. Illegal campaign coordination can be difficult to detect, which is why we strongly encourage party or campaign insiders to come forward and blow the whistle.”
“Campaign finance laws exist to guard against illegal activity such as coordinated campaign contributions,” said U.S. Attorney Boente. “The citizens of the commonwealth of Virginia can rely on this office enforce federal campaign finance law.”
“As the 2016 election gears up, there may be others, similar to Mr. Harber, who may view campaigns as a venue to misappropriate funds,” said Acting Special Agent in Charge Leonard. “With millions of dollars in play, donors should be aware of how their money will be spent prior to making a donation to a super Pac to ensure that their contributions are being legally expended.”
Tyler Eugene Harber, 34, of Alexandria, Virginia, previously pleaded guilty before U.S. District Judge Liam O’Grady to one count of coordinated federal election contributions and one count of making false statements to the FBI.
Harber was the campaign manager and general political consultant for a candidate for Congress in the November 2012 general election. At the same time, Harber participated in the creation and operation of a PAC, which, unlike the campaign of an individual candidate, may raise and spend money in unlimited amounts from otherwise prohibited sources to influence federal elections so long as it does not coordinate expenditures with a federal campaign.
In connection with his guilty plea, Harber admitted, among other things, that he caused $325,000 in coordinated contributions by directing the PAC to purchase political advertising opposing a rival candidate. Harber admitted that he knew this coordination of expenditures was unlawful.
Harber admitted that he used an alias and other means to deflect inquiries by a political party official. He also admitted that he told multiple lies when interviewed by the FBI concerning his activities.
This case was investigated by the FBI’s Washington, D.C., Field Office’s Northern Virginia Resident Agency. The case is being prosecuted by Director Richard C. Pilger of the Criminal Division’s Public Integrity Section Election Crimes Branch and Chief Mark D. Lytle of the U.S. Attorney’s Office of the Eastern District of Virginia’s Financial Crimes and Public Corruption Unit.
Campaign Aide Admits to Launching False Federal Investigation Aimed at Discrediting Congressional CandidateRead the Press Release
SAN DIEGO – Former Carl DeMaio campaign staffer Todd Bosnich pleaded guilty to obstruction of justice in federal court today, admitting that he instigated and impeded an FBI investigation by sending a threatening email to himself and falsely claiming that it was likely from DeMaio.
Bosnich, who served as policy director for the unsuccessful congressional campaign, made the admissions before U.S. Magistrate Judge Jan Adler. Bosnich was allowed to remain free on a $10,000 bond and was ordered to appear for sentencing on August 31, 2015, at 9 a.m. before U.S. District Judge Larry A. Burns.
Assistant U.S. Attorney Phil Halpern told the court during today’s hearing that Bosnich’s offense “had the potential to effect a national election.” He added: “Mr. Bosnich, for whatever reason, had a great deal of hostility and personal animus towards Mr. DeMaio. As a result of his feeling aggrieved, Bosnich wanted to get back at Mr. DeMaio.”
According to his plea agreement, after he was terminated from his job in May of 2014, a disgruntled Bosnich made sexual harassment accusations against DeMaio. Among other things, he claimed that DeMaio offered him $50,000 in hush money to keep quiet about the harassment.
Bosnich also told a radio reporter during an interview on June 2, 2014 that he had received threatening emails from an anonymous source that he was “positive” were from DeMaio or someone closely associated with DeMaio.
According to his plea agreement, Bosnich admitted that three days later, on June 5, 2014, Bosnich set up a dummy yahoo email account, [email protected], from his North County residence using bogus personal information including a false date of birth and gender. According to his admissions, he then sent a “particularly ugly and threatening message” to his own personal email account. The email suggested that the “anonymous” author of the email would ensure that Bosnich never again worked in politics if he didn’t stop making accusations against DeMaio.
During multiple interviews with the FBI, Bosnich – supposedly the victim of threatening emails - continued to claim that he did not know who sent the emails, but he believed DeMaio was behind the anonymous threats. Based on these false claims, a grand jury issued subpoenas attempting to identify the source of the emails. All the while, it was Bosnich himself who had sent the emails.
“The integrity of the American electoral process is the very bedrock of our democracy,” said U.S. Attorney Laura E. Duffy. “These actions were far from a harmless prank and cannot be tolerated.”
FBI Special Agent in Charge Eric S. Birnbaum commented, “Mr. Bosnich engaged in a pattern of lies and deceitful acts in an effort to obstruct FBI agents from getting to the truth in this case. Even when given opportunities to recant his statements he continued to knowingly provide false information portraying himself as a victim in this matter and giving the appearance that a candidate running for office was behind the threatening emails. Today’s conviction sends a clear message that the FBI will aggressively investigate and pursue prosecution of those who attempt to obstruct federal investigations and illegally undermine our electoral process.”
The background of Bosnich’s obstruction was detailed in Court documents, which recalled how DeMaio announced his intention to run for California's 52nd Congressional District in May 2013 (the year before the actual election). In October 2013, Bosnich was hired by DeMaio's campaign to serve as its Policy Director.
In May 2014, Bosnich was terminated by DeMaio’s campaign. The reason for his termination, as well as the events that occurred immediately before and after his termination, are a matter of dispute. Bosnich claimed that DeMaio made a series of unwanted sexual advances towards him in the Spring of 2014, and that when he complained to DeMaio’s campaign manager, he was first marginalized and later offered a $50,000 “payment” in exchange for signing a “non-disclosure” agreement
As revealed in the pleadings, the DeMaio campaign maintained that Bosnich was terminated not because of a sexual harassment claim, but because of poor work performance. Specifically, the campaign asserted that Bosnich was first terminated as a paid employee because he issued a report to the media that was both inaccurate and plagiarized. The campaign then alleged that Bosnich (on May 24, 2014) was barred from working in any capacity because he “misappropriated” several internal emails. Finally, the Campaign asserted that Bosnich vandalized its campaign headquarters (on May 28, 2014) after he had been fired for cause.
Sometime between the late evening of May 27, 2014, and the early morning of May 28, 2014, an intruder at DeMaio’s campaign headquarters cut telephone cords, broke laptop computers, damaged office equipment, and stole several items from the office. Among the items stolen was a notebook containing sensitive campaign information, as well as the office’s cable modem and router.
On May 29, 2014, Bosnich wrote several emails to the Chief-of-Staff for DeMaio’s opponent, Scott Peters. Bosnich initiated contact by sending several internal DeMaio campaign emails that he received during his time serving as the Campaign’s Policy Director. He also reiterated his claim that DeMaio had sexually harassed him and threatened to destroy him if he did not stay quiet about the harassment.
On May 31, 2014, the Peters’ Campaign chief of staff delivered the emails received from Bosnich to the San Diego Police Department (“SDPD”). She told the SDPD that the emails arrived unexpectedly and she decided to give them to the police because: (1) they included allegations regarding possible threats and sexual harassment; and (2) she thought there might be some connection between Bosnich’s emails and the recent burglary of the DeMaio campaign office.
Later that same day, SDPD detectives interviewed Bosnich, who denied any involvement in the burglary. To the contrary, Bosnich told the detectives: (1) he had been harassed by DeMaio on a number of occasions; (2) that he complained to DeMaio’s campaign manager about the harassment; and (3) the campaign manager offered Bosnich a job with the San Diego Republican Party if he would keep silent. In addition, Bosnich stated that he was informed that his career would be destroyed if he spoke to anyone about DeMaio’s harassment.
On June 2, 2014, Bosnich recorded an interview with a local radio personality. During the interview, he repeated the allegations he had previously told the detectives. He also stated for the first time that he had received threatening emails. Although these emails were allegedly anonymous, Bosnich stated that he was “positive” that DeMaio (or someone closely associated with DeMaio) was behind the threats. Subsequently, Bosnich repeated his allegations (including the allegedly anonymous threats) to an increasingly wide array of news media outlets.
On June 5, 2014, Bosnich set up the “dummy” Yahoo email account. After doing so, he used it (for the first and only time) to send a particularly ugly and threatening message to his own personal email account. The email referenced Bosnich’s disclosures to Peters’ chief of staff and suggested that the “anonymous” author of the email would ensure that Bosnich never again worked in politics if he didn’t stop making accusations against DeMaio.
Bosnich admitted in federal court that his main purpose in sending the threatening email to himself was to bolster his claims that DeMaio was threatening him to remain silent about the alleged sexual harassment. In this fashion, Bosnich’s claims about DeMaio’s sexual harassment appeared not only to be legitimate, but to take on a new and, perhaps, more sinister context. The SDPD was sufficiently concerned about the serious nature of the allegations that they notified the FBI.
On June 16, 2014, FBI agents and Halpern interviewed Bosnich in the presence of attorneys that he retained to prepare the filing of a sexual harassment suit against DeMaio. At the meeting, Bosnich reiterated his prior sexual harassment allegations against DeMaio. In an attempt to influence the investigation of DeMaio, Bosnich also falsely claimed that an anonymous source sent him the threatening email from the “elimanagment” account. Bosnich also speculated that the author of the emails was DeMaio or someone associated with his campaign.
During the late summer and early fall, the United States acted upon the false information provided by Bosnich in following up all available leads related to the threatening email. Rather than recant his false statements at an October 17, 2014 meeting with the FBI Agents and Assistant U.S. Attorneys, Bosnich continued to conceal the fact that he was the author of the threatening email. He also continued to suggest that the email might have been sent by DeMaio or one of his close associates.
Documentation: Information... Plea Agreement...
DEFENDANTS Case Number: 15cr1544-LAB Todd Bosnich Age: 29 Del Mar, California CHARGESObstruction of Justice – Title 18, U.S.C., Section 1512
INVESTIGATING AGENCIES
Maximum penalty: 20 years’ imprisonment and $250,000 fineFederal Bureau of Investigation
Attorney General Recognizes Wisconsin Federal ProsecutorRead the Press Release
United States Attorney James L. Santelle announced today that on June 4, 2015, Assistant United States Attorney (AUSA) Benjamin L. Whittemore was one of 160 employees of the United States Department of Justice (DOJ) recognized by Attorney General Loretta Lynch, Deputy Attorney General Sally Quillian Yates, and Executive Office for United States Attorneys (EOUSA) Director Monty Wilkinson at the 31st Annual EOUSA Director’s Awards Ceremony in Washington D.C. AUSA Whittemore was recognized for Superior Performance while serving as the DOJ Community Prosecutor assigned to engage and work with the Menominee Indian Tribe.
The Eastern District of Wisconsin was one of 31 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In her prepared remarks, Attorney General Lynch told the awardees: “Our honorees include career executives and supervisors; Assistant U.S. Attorneys and Special Assistant U.S. Attorneys; appellate attorneys and law enforcement officials; administrators, paralegals, and public affairs officers. These individuals, and so many others, have faced daunting and sometimes dangerous challenges. They have dedicated their leadership and their expertise, their time and their energy, to the service of their mission. And they have remained devoted, at all times, to the high ideals and deeply-held values that animate our country and our cause.”
According to United States Attorney Santelle: “Mr. Whittemore’s tireless work in identifying and addressing threats to public safety on the Menominee Indian Reservation, his prosecution of a large volume of difficult sexual assault cases, and his commitment to working on behalf of Tribal victims led to him being considered a trusted partner of the Tribe, including its leadership. Mr. Whittemore’s work modernizing the Tribe’s drug code and updating its domestic violence laws will have lasting impact on the community. His training, education, and outreach efforts have greatly enhanced the working relationship and trust between Tribal and federal public safety agencies and helped to make the Menominee Reservation a safer place.”
# # # # #
Another South Texan Heads to Federal Prison in Large-Scale Drug-Trafficking ConspiracyRead the Press Release
CORPUS CHRISTI, Texas – Rodolfo Casares, 38, of Brownsville, has been ordered to federal prison following his convictions on one count of conspiracy to commit drug trafficking and two counts of possession with intent to distribute controlled substances - methamphetamine and cocaine, respectively, announced U.S. Attorney Kenneth Magidson. The jury deliberated for two hours and returned the guilty verdicts Jan. 22, 2015, following a two-day trial.
Today, U.S. District Judge Nelva Gonzales Ramos, who presided over the trial, handed Casares a total sentence of 25 years in federal prison to be immediately followed by five years of supervised release.
At trial, the jury heard from 10 government witnesses, which included testimony that Casares supplied heroin, methamphetamine and cocaine to a major drug trafficking organization headquartered in Mathis and lead by Ricardo Guerrero, 56, of Mathis. On March 18, 2014, Guerrero was convicted by a federal jury in Corpus Christi for being the leader of this conspiracy and was subsequently sentenced to life imprisonment on June 5, 2014.
Casares was involved in the conspiracy from 2009 through most of 2012 and utilized his connections in Mexico to obtain the illegal narcotics and had them crossed into the United States at Brownsville, McAllen or Laredo. Once here, the illegal narcotics were then transported to Guerrero and stored in numerous properties Guerrero owned in Mathis and in neighboring counties.
Guerrero then made the arrangements to sell the heroin, methamphetamine and cocaine throughout the Southern District of Texas and in San Antonio. On Aug. 20, 2011, three conspirators that Casares had hired were arrested at the U.S. Border Patrol Checkpoint at Hebbronville while attempting to transport methamphetamine and cocaine to Guerrero.
Trial testimony also provided that Guerrero’s criminal organization was moving kilogram amounts of methamphetamine, heroin and cocaine at least once or twice a month during the conspiracy.
Casares will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future
Those charged in relation to this case were identified through a long-term investigation conducted jointly by Homeland Security Investigations and Texas Department of Public Safety in coordination with the United States Attorney’s Office. Assistant U.S. Attorney Chad W. Cowan is prosecuting the case.
Alexandria Man Sentenced to 24 Months in Prison for Coordinated Campaign Contributions and False StatementsRead the Press Release
First Criminal Sentence in the United States For
Campaign Finance Coordination between Political Committees
ALEXANDRIA, Va. – Tyler Eugene Harber, 34, of Alexandria, a former campaign finance manager and political consultant, was sentenced today to 24 months in prison, followed by two years of supervised release for coordinating $325,000 in federal election campaign contributions by a political action committee (PAC) to a Congressional campaign committee.
This is the first criminal prosecution in the United States based upon the coordination of campaign contributions between political committees. As a condition of Harber’s supervised release, he is prohibited from participating in a political campaign for the duration of his supervised release.
“Campaign finance laws exist to guard against illegal activity such as coordinated campaign contributions,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “The citizens of the Commonwealth of Virginia can rely on this office enforce federal campaign finance law.”
“The significant prison sentence imposed on Tyler Harber should cause other political operatives to think twice about circumventing laws that promote transparency in federal elections,” said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division. “As the first conviction for illegal campaign coordination, this case stands as an important step forward in the criminal enforcement of federal campaign finance laws. Illegal campaign coordination can be difficult to detect, which is why we strongly encourage party or campaign insiders to come forward and blow the whistle.”
“As the 2016 election gears up, there may be others, similar to Mr. Harber, who may view campaigns as a venue to misappropriate funds,” said Acting Special Agent in Charge Jennifer Leonard of the FBI’s Washington D.C. Field Office’s Criminal Division. “With millions of dollars in play, donors should be aware of how their money will be spent prior to making a donation to a SuperPac to ensure that their contributions are being legally expended.”
Harber pleaded guilty on Feb. 12, 2015 to one count of coordinated federal election contributions and one count of making false statements to the FBI.
According to plea documents, Harber was the Campaign Manager and General Political Consultant for a candidate for Congress in the November 2012 general election. At the same time, Harber participated in the creation and operation of a PAC, which was legally allowed to raise and spend money in unlimited amounts from otherwise prohibited sources to influence federal elections so long as it did not coordinate expenditures with a federal campaign.
Harber admitted, among other things, that he made and directed coordinated expenditures by the PAC to influence the election with $325,000 of political advertising opposing a rival candidate. The coordination of expenditures made them illegal campaign contributions to the authorized committee of Harber’s candidate, and Harber admitted that he knew this coordination of expenditures was an unlawful means of contributing money to a campaign committee. He further admitted that he used an alias and other means to conceal his action from inquiries by an official of the same political party as Harber’s candidate.
Harber further admitted that he told multiple lies when interviewed by the FBI concerning his activities.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Leslie R. Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division; and Acting Special Agent in Charge Jennifer Leonard of the FBI’s Washington D.C. Field Office’s Criminal Division made the announcement after the sentence was delivered by U.S. District Judge Liam O’Grady.
This case was investigated by the FBI’s Washington Field Office, Northern Virginia Resident Agency. The case is being prosecuted by Assistant U.S. Attorney Mark D. Lytle of the Financial Crimes and Public Corruption Unit of the Eastern District of Virginia, and Richard C. Pilger, Director of the Election Crimes Branch of the Criminal Division’s Public Integrity Section.
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. 1:14-cr-373.