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Monday 27 April 2015
North Carolina Man Pleads Guilty to Transporting A Minor for ProstitutionRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Ronnie Travis Hall, III (27, Charlotte, NC) today pleaded guilty to transporting a minor with the intent that she engages in prostitution. Hall faces a minimum mandatory term of ten years, up to life, in federal prison. His sentencing hearing is scheduled for July 20, 2015.
According to court documents, on April 9, 2014, Hall, with the aid of another individual, transported minor victim “J.T.” from Georgia to Florida with the intent that she engage in prostitution. For approximately two months, J.T. worked as a prostitute on the streets and by meeting customers who responded to an Internet ad advertising her sexual services. Hall kept all of the profits.
This case was investigated by the Federal Bureau of Investigation and the Metropolitan Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Joseph M. Schuster.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
New York Man Sentenced for Bank FraudRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Anthony Banks, age 39, New York, was sentenced today by U.S. District Court Judge John E. Jones III in Harrisburg to 21 months imprisonment for bank fraud.
According to U.S. Attorney Peter J. Smith, Banks used a stolen identity to open an account at the bank and fraudulently obtained a debit card to access a bank customer’s account to withdrawal money. Banks was initially charged in September 2013. He pled guilty on December 17, 2014.
This case was investigated by the U.S. Secret Service and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
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New York Man Pleads Guilty to Federal Extortion ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that ERNEST SYKU, 44, of the Bronx, N.Y., pleaded guilty today before U.S. District Judge Robert N. Chatigny in Hartford to a federal extortion charge.
According to court documents and statements made in court, SYKU and Robert Francella, also known as “Bobby Fingers,” of Yonkers, N.Y., threatened a Connecticut resident with violence in order to induce the victim to pay an alleged $240,000 debt. SYKU claimed that this debt was owed to SYKU’s deceased uncle. On one occasion, SYKU told the victim that SYKU was “the one who can break you in many pieces.” SYKU further told the victim “to have mercy on yourself” if the victim did not bring SYKU the money. On another occasion, SYKU provided his cellular telephone to Francella, who left a threatening voice mail for the victim.
SYKU and Francella were arrested on March 13, 2014.
After he was arrested, SYKU confessed to law enforcement that he had directed Francella to scare the victim into paying the alleged debt.
SYKU pleaded guilty to one count of attempted collection of extension of credit by extortionate means, which carries a maximum term of imprisonment of 20 years and a fine of up to $250,000. Judge Chatigny scheduled sentencing for July 15, 2015.
Francella pleaded guilty on November 17, 2014. He awaits sentencing.
This matter was investigated by the FBI Fairfield County Organized Crime Task Force and the Bridgeport Police Department. This case is being prosecuted by Assistant U.S. Attorneys Hal Chen and Heather Cherry.
Navajo Man from Sanostee Pleads Guilty to Federal Assault ChargesRead the Press Release
ALBUQUERQUE – Milton Washburn, 29, an enrolled member of the Navajo Nation who resides in Sanostee, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to assault charges. Under the terms of his plea agreement Washburn will be sentenced to 46 months in federal prison followed by a term of supervised release to be determined by the court.
Washburn was arrested on Oct. 23, 2014, on a criminal complaint charging him with assaulting another Navajo man on Oct. 19, 2014, by running over the victim with a vehicle. Court filings reflect that officers of the Navajo Nation Division of Public Safety responded to a call reporting that the victim had been deliberately run over by a vehicle and was seriously injured. The victim was taken to the hospital where he received medical treatment for a number of internal injuries, including rib fractures, a collapsed lung, a damaged liver, and a spinal fracture.
On Nov. 5, 2014, Washburn was indicted and charged with assault with a dangerous weapon, a vehicle, and assault resulting in serious bodily injury. According to the indictment, Washburn committed these crimes within the Navajo Indian Reservation in San Juan County, N.M.
During today’s proceedings, Washburn pled guilty to one count of assault resulting in serious bodily injury and admitted that on Oct. 19, 2014, he ran over the victim with a vehicle after he engaged in an altercation with the victim. Washburn acknowledged that the victim suffered multiple injuries as a result of the assault.
Washburn has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.This case was investigated by the Shiprock office of the Navajo Nation Division of Public Safety and the Farmington office of the FBI. Assistant U.S. Attorneys Raquel Ruiz-Velez and Elaine Ramirez are prosecuting this case.
Multi-Agency Investigation Dismantles Marijuana Distribution Ring Operating in Southeastern New Mexico and West TexasRead the Press Release
ALBUQUERQUE – Twelve individuals are facing drug trafficking and money laundering charges as the result of a multi-agency investigation targeting marijuana traffickers and money launderers operating in southeastern New Mexico and west Texas. The investigation culminated this morning when ten of the defendants were arrested during an early morning law enforcement operation led by the DEA. Teams of federal, state, county and local law enforcement officers participated in the operation that included arrests in five cities and towns in New Mexico and Texas. The operation also included the execution of federal search warrants at six residences in Texas and one residence in New Mexico.
The results of the investigation were announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
The charges against the defendants, which are contained in three separate federal indictments, are the result of an investigation that began in Oct. 2014, and initially targeted a marijuana trafficking organization allegedly led by Rodolfo Lopez, 31, of El Paso, Texas, that allegedly transported marijuana from El Paso to Chaves County, N.M., and Lubbock, Texas. The investigation expanded to include two smaller drug trafficking organizations that allegedly transported marijuana to Lubbock, Texas, through Chaves County and Eddy County, N.M. The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
During the course of the investigation, law enforcement officers seized approximately 75 pounds of marijuana and $22,166.00 in cash. In addition, during today’s arrest operation, law enforcement officers seized approximately 40 pounds of marijuana, approximately $70,000 in cash, 14 vehicles, including a motorcycle and an ATV, and 16 firearms, including one reported stolen.
In announcing the results of the investigation, U.S. Attorney Damon P. Martinez said, “The indictments announced today should serve as a reminder that marijuana is a dangerous drug and the illegal distribution and sale of marijuana is a serious crime. The Justice Department continues to enforce the drug trafficking laws particularly when illegal marijuana trafficking provides a significant source of revenue for drug trafficking organizations.”
“Today’s arrests in El Paso and Lubbock, Texas, as well as Roswell, New Mexico are another excellent example of the ongoing collaboration between DEA and our federal, state and local law enforcement partners,” said Will R. Glaspy, Special Agent in Charge of the El Paso Division of DEA. “Criminal organizations should reconsider whether they can conduct their illegal activities undetected in our southern New Mexico and West Texas communities. The law enforcement community is committed to rooting out and dismantling these organizations so that they are no longer free to spread its poison in our neighborhoods.”
“It takes a lot of hard work, cooperation, and coordination to take down a multi-state drug trafficking organization with each agency contributing its own valuable knowledge and skills to the investigation” said Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of Internal Revenue Service Criminal Investigation.
Ten of the alleged members of the marijuana importation and distribution ring are charged in a 42 count indictment that alleges drug trafficking and money laundering conspiracies and a series of drug and money laundering substantive offenses. Count 1 of the indictment alleges that from Nov. 2014 through April 2015, all ten defendants participated in a marijuana trafficking conspiracy pursuant to which they distributed in excess of 100 kilograms of marijuana in Chaves County and other places. Count 2 charges six defendants with participating in a conspiracy to launder the proceeds of their alleged marijuana trafficking activities. Counts 3 and 4 of the indictment allege that certain defendants maintained premises in Roswell, N.M., for the purpose of storing marijuana. Three defendants are charged with using a communications facility, telephones, to further the commission of drug trafficking crimes. Twenty-six counts charge certain defendants with drug trafficking crimes and two counts charge certain defendants with money laundering.
Five defendants, including two charged in the ten-defendant indictment, are charged in a separate indictment with participating in a separate marijuana trafficking conspiracy. The indictment alleges that between March 1, 2015 and March 24, 2015, the four defendants conspired to commit a marijuana trafficking crime in Chaves County. It also charges the four defendants with possessing marijuana in Eddy County on March 23, 2015, with the intention of distributing it to others.
A third indictment charges three defendants, including one charged in the ten-defendant indictment, with conspiracy to commit a marijuana trafficking crime in Eddy County between Feb. 12, 2015 and Feb. 26, 2015. Two of the defendants are also charged with possession of marijuana in Eddy County on Feb. 26, 2015, with the intention of distributing it to others.
These cases are the result of an investigation by the Las Cruces offices of the DEA and IRS Criminal Investigation, the Hatch Police Department, the Sunland Police Department, the Chaves County Metro Narcotics Task Force, the Pecos Valley Drug Task Force, the Eddy County Sheriff’s Office. The El Paso office of the U.S. Attorney’s Office for the Western District of Texas and the Lubbock office of the U.S. Attorney’s Office for the Northern District of Texas assisted in the investigation. Assistant U.S. Attorney Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office is prosecuting these cases.
The following additional law enforcement agencies participated in today’s law enforcement operation: the El Paso Division of the DEA, the U.S. Border Patrol, the Roswell Police Department, and the Lubbock Police Department.
The Chaves County Metro Narcotics Task Force is comprised of officers and investigators from the Chaves County Sheriff’s Office and the Roswell Police Department, and the Pecos Valley Drug Task Force is comprised of officers and investigators from the Artesia Police Department, Carlsbad Police Department, Eddy County Sheriff’s Office, FBI, HSI, the Probation and Parole Division of the New Mexico Corrections Department and the 5th Judicial District Attorney’s Office. Both Task Forces are part of the New Mexico HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Indictment in United States v. Lopez, et al., 15-CR-1415-RB
Summary of the Charges
Count 1 of the Indictment charges all ten defendants with conspiracy to possess marijuana with intent to distribute. The statutory maximum penalty for a conviction on this count is imprisonment for not less than five years or more than 40 years and a $5,000,000.00 fine.
Count 2 charges six defendants with conspiracy to launder money. The statutory maximum penalty for a conviction on this count is imprisonment for not more than 20 years and a $250,000.00 fine.
Counts 3 and 4 charge certain defendants with managing or controlling a residence for the purpose of storing a controlled substance. The statutory maximum penalty for a conviction on each of these counts is imprisonment for not more than 20 years and a $500,000.00 fine.
Counts 5, 9, 10, 12, 16, 17, 20, 24, 29 and 35 charge certain defendants with using a communications device (telephone) to facilitate a drug trafficking crime. The statutory maximum penalty for a conviction on each of these counts is imprisonment for not more than four years and a $250,000 fine.
Counts 6, 8, 11, 13, 15, 18, 21, 23, 25, 27, 28, 30, 32-34, 36, 38, 39 and 41 charge certain defendants with possession of marijuana with intent to distribute. The statutory maximum penalty for a conviction on each of these counts is imprisonment for not more than five years and a $250,000.00 fine.
Counts 7, 14, 22, 26, 31, 37 and 40 charge certain defendants with distribution of marijuana. The statutory maximum penalty for a conviction on each of these counts is imprisonment for not more than five years and a $250,000.00 fine.
Counts 19 and 42 charge certain defendants with money laundering. The statutory maximum penalty for a conviction on each of these counts is imprisonment for not more than 20e years and a $250,000.00 fine.
Charges Against Defendants
Rodolfo Lopez, 31, of El Paso, Texas, is charged in Count 1 of the indictment. Lopez has yet to be arrested and is considered a fugitive.
Mayra Elizabeth Martinez-Giron, 24, of El Paso, Texas, is charged in Count 1 of the indictment. Martinez-Giron was arrested in El Paso.
Christian Hugo Contreras, 32, of El Paso, Texas, is charged in Counts 1, 2, 5, 6, 9, 10, 11, 12, 13, 17, 18, 20, 21, 24, 25, 28, 29, 30, 34, 35, 36, 39 and 42 of the indictment. Contreras was arrested in El Paso. Contreras also is charged in the indictment filed in United States v. Lopez-Tellez, et al., 15-CR-1417-RB.
Jesus Noe Lopez-Tellez, 34, of Wolfforth, Texas, is charged in Counts 1, 2, 3 and 19 of the indictment. Contreras was arrested in El Paso. Lopez-Tellez also is charged in the indictments filed in United States v. Lopez-Tellez, et al., 15-CR-1416-RB and United States v. Lopez-Tellez, et al., 15-CR-1417-RB.
Hugo Alejandro Lopez-Tellez, 27, of Roswell, N.M., Texas, is charged in Counts 1, 2, 3, 5, 7, 9, 10, 12, 14, 16, 17, 20, 22, 24, 26, 29, 31, 35, 37, 40 and 42 of the indictment. Lopez-Tellez was arrested in Roswell.
Andrew Ocanas Garza, 37, of Lubbock, Texas, is charged in Count 1 of the indictment. Garza was arrested in Lubbock. Garza also is charged in the indictment filed in United States v. Lopez-Tellez, et al., 15-CR-1416-RB.
Douglas K. Mayes, 52, of Roswell, N.M., is charged in Counts 1, 4, 8, 15, 16, 23, 27, 32, 38, 41 and 42 of the indictment. Mayes was arrested in Roswell.
Claudia Berenice Hernandez, 33, of El Paso, Texas, is charged in Counts 1, 2, 6, 11, 13, 18, 19, 21, 25, 28, 30, 34, 36, 39 and 42 of the indictment. Hernandez was arrested in El Paso. Hernandez also is charged in the indictment filed in United States v. Lopez-Tellez, et al., 15-CR-1417-RB.
Omar Ortiz, 44, of El Paso, Texas, is charged in Counts 1, 2, 6, 11, 13, 18, 19, 21, 25, 28, 30, 34, 36, 39 and 42 of the indictment. Ortiz was arrested in El Paso. Ortiz also is charged in the indictment filed in United States v. Lopez-Tellez, et al., 15-CR-1417-RB.
Arthur Luna, 46, of Roswell, N.M., Texas, is charged in Counts 1 and 33 of the indictment. Lopez-Tellez was arrested in Roswell.
Indictment in United States v. Lopez-Tellez, et al., 15-CR-1416
Charges and Defendants
Count 1 of the indictment charges all three defendants with conspiracy to possess marijuana with intent to distribute, and Count 2charges two of the defendants with possession of marijuana with intent to distribute. The maximum penalty for a conviction on each of these counts is imprisonment for not more than five years and a $250,000.00 fine.
Jesus Noe Lopez-Tellez, 34, of Wolfforth, Texas, is charged in both counts of the indictment. Lopez-Tellez was arrested in Wolfforth. Lopez-Tellez also is charged in the indictments filed in United States v. Lopez-Tellez, 15-CR-1415-RB, and United States v. Lopez-Tellez et al., 15-CR-1417-RB.
Andrew Ocanas Garza, 37, of Lubbock, Texas, is charged in Count 1of the indictment. Garza was arrested in Lubbock. Garza also is charged in the indictment filed in United States v. Lopez et al., 15-CR-1415-RB.
Antonio Arreola-Herrera, 31, of El Paso, Texas, is charged in both counts of the indictment. Arreola-Herrera was arrested in El Paso.
Indictment in United States v. Lopez-Tellez, et al., 15-CR-1417
Charges and Defendants
Counts 1 and 2 of the indictment charge all four defendants with conspiracy to possess marijuana with intent to distribute and possession of marijuana with intent to distribute. The maximum penalty for a conviction on each of these counts is imprisonment for not more than five years and a $250,000.00 fine.
Emmanuel Lopez-Tellez, 31, a Mexican citizen residing in Ciudad Juarez, Mexico, has yet to be arrested and is considered a fugitive.
Jesus Noe Lopez-Tellez, 34, of Wolfforth, Texas, was arrested in Wolfforth. Lopez-Tellez also is charged in the indictments filed in United States v. Lopez, et al., 15-CR-1415-RB, and United States v. Lopez-Tellez et al., 15-CR-1416-RB.
Christian Hugo Contreras, 32, of El Paso, Texas, was arrested in El Paso. Contreras also is charged in the indictment filed in United States v. Lopez, et al., 15-CR-1415-RB.
Omar Ortiz, 44, of El Paso, Texas, was arrested in El Paso. Ortiz also is charged in the indictment filed in United States v. Lopez, et al., 15-CR-1415.
Charges in indictments are only accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
Photographs of the fugitives, Rodolfo Lopez and Emmanuel Lopez-Tellez, are attached to this press release. Anyone with information on the whereabouts of either of the fugitives is asked to call the DEA at 575-526-0700.
indictment_15cr1415.pdf indictment_15cr1416.pdf indictment_15cr1417.pdf photos_of_fugitives.pdf
Morgantown man sentenced to 3 years for counterfeiting U.S. currencyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Barry Eugene Dragovich, 37, of Morgantown, West Virginia was sentenced today to 37 months in prison for repeatedly possessing and attempting to use counterfeit U.S. currency, United States Attorney William J. Ihlenfeld, II, announced.
Dragovich was discovered in Monongalia County, West Virginia in October 2014 in possession of a large quantity of counterfeit United States currency. He pled guilty in January 2015 to one count of “Possessing Counterfeit Obligations and Securities.”
Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The United States Secret Service investigated.
U.S. District Judge Irene M. Keeley presided.
Modesto Man Sentenced to 18 Months in Prison for Stealing $127,000 in Social Security BenefitsRead the Press Release
FRESNO, Calif. — James Giulio Davidson, 59, of Modesto, was sentenced today by United States District Judge Anthony W. Ishii to 18 months in federal prison and ordered to pay a $127,000 in restitution for theft of government benefits, United States Attorney Benjamin B. Wagner announced.
According to court documents, Davidson and his deceased wife and former co-defendant, Shirley Kay Davidson, stole more than $64,000 in Supplemental Security Income (SSI) benefits and $63,000 in In-Home Supportive Services (IHSS) from January 2003 to July 2010. Shirley Kay Davidson created a fake person named Sharon Guinn to act as her and James Davidson’s purported IHSS caretaker. James and Shirley Davidson regularly filled out false time cards for the purported work provided by Sharon Guinn and then cashed the IHSS wages sent to this fake person for their personal use and benefit. Further, James and Shirley Davidson failed to report this fraudulent source of income to the Social Security Administration during redetermination interviews for continued SSI benefits. Additionally, James and Shirley Davidson stated to the SSA that they separated in November 2007, when in fact they continued to live together, which increased the amount of SSI benefits they received.
This case was the product of an investigation by the Social Security Administration, Office of Inspector General and the Stanislaus County Community Services Agency. Assistant United States Attorneys Grant B. Rabenn and Michael Tierney prosecuted the case.
Docket #: 1:12-cr-168-AWI
Missouri Man Sentenced for Theft of Social Security BenefitsRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that Quentin Jones, 44, of Berkeley, MO, was sentenced today on an indictment charging that he committed theft of government funds. The district court sentenced Jones to five years of probation. Jones was also ordered to pay $119,119 in restitution to the Social Security Administration and a $100 special assessment. Jones admitted that between September 2006 and February 2014, he was unlawfully receiving more than $119,119 in Social Security benefits which were intended for his father. At his sentencing, Jones admitted that his father had passed away in September of 2006 and Jones had been stealing his father’s Social Security since that time.
This is one of several fraud prosecutions on behalf of the Social Security Administration. On July 1, 2014, United States Attorney Wigginton said: "These cases are yet additional examples of the wide-spread fraud that plagues both state and federal programs that are in place to help those in our society who need that help the most. My office will continue to stand beside both federal and state agencies in taking every step necessary to find and prosecute those who steal from, and continue to defraud these vital programs. This is a theft from not only the needy, but from all of us."
The investigation was conducted by the Social Security Administration, Office of Inspector General. The case was prosecuted by Special Assistant United States Attorney John Constance and Assistant United States Attorney Michael Hallock.
Middlesex County, New Jersey, Lawyer Sentenced to 27 Months in Prison for Extorting and Defrauding Police Officers, Others Through Fake IRS InvestigationRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, lawyer and certified public accountant was sentenced today to 27 months in prison for conspiring with a New Jersey mortgage broker to extort and defraud victims by falsely representing to them that they were the subjects of criminal investigations, U.S. Attorney Paul J. Fishman announced.
Thomas G. Frey, 55, of Edison, New Jersey, previously pleaded guilty before U.S. District Judge Joel A. Pisano to two counts of an indictment charging him with conspiracy to commit extortion under fear of economic harm and to commit wire fraud. The sentence was imposed by U.S. District Judge Anne E. Thompson in Trenton federal court.
According to documents filed in this case and statements made in court:
Frey, Robert G. Cusic Jr., a Millstone, New Jersey, mortgage broker, and another conspirator (named “CC-1” in the indictment) schemed to defraud four victims, including two police officers, by falsely representing to them that they were the subjects of criminal investigations, principally by the IRS, in connection with investment properties that some of them owned. Frey and Cusic falsely represented that while Cusic was at a property formerly owned by one of the victims, Cusic encountered two IRS special agents (SA-1 and SA-2) who questioned him extensively about some of the victims.
Frey falsely told the victims he had ongoing communications with SA-1 about the purported investigation and had a special relationship with SA-1. Frey told the victims if they paid up to $20,000 each, he would call SA-1 and have the investigation converted from a criminal tax investigation to an IRS “desk audit,” a civil matter. Frey and CC-1 falsely stated that if the victims did not retain his services and pay the fee, the investigation would likely result in the arrest of certain of the victims.
In addition to the prison term, Judge Thompson sentenced Frey to 3 years of supervised release; 300 hours of community service and fined him $25,000. The defendant was also ordered to repay the Criminal Justice Act funds expended on his behalf.
Frey was previously charged by complaint on April 8, 2011, along with Cusic, with one count of conspiracy to commit extortion and one count of wire fraud. Cusic pleaded guilty Nov. 28, 2011, to conspiring with Frey to extort the victims. He is awaiting sentencing.
U.S. Attorney Fishman credited special agents of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Rodney Davis, Washington Field Division, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division in Trenton.
Defense counsel: Charles E. Waldron Esq., Lawrenceville, N.J.
Michigan man and Morgantown resident sentenced for painkiller traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Ranad Jamal Straughter, 27, of Westland, Michigan, and Andrew W. Bolyard, 23, of Morgantown, West Virginia, were sentenced today for their role in an oxycodone trafficking operation, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Mon Valley Drug and Violent Crime Task Force revealed that Straughter and Bolyard were involved in a prescription painkiller operation designed to transport oxycodone pills across state lines from Detroit, Michigan to Pittsburgh, Pennsylvania and then to Morgantown, West Virginia for redistribution and sale.
In March 2014, Straughter and Bolyard were discovered in possession of oxycodone in Monongalia County, West Virginia. They each pled guilty in December 2014 to one count of “Aiding and Abetting Possession with Intent to Distribute Oxycodone.” Bolyard was sentenced today to 72 months in prison. Straughter was sentenced today to 24 months in prison.
Assistant U.S. Attorney Zelda Wesley prosecuted the defendants on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Miami-Dade County Resident Sentenced to More Than 7 Years in Prison for Unauthorized Possession of Stolen Identities and Tax Fraud SchemeRead the Press Release
A Miami-Dade County resident was sentenced to 87 months in prison, followed by 3 years of supervised release, and was ordered to pay $42,829 in restitution to the Internal Revenue Service (IRS), for unauthorized possession of stolen identities and participating in a tax fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, made the announcement.
Brandon K. Jenkins, 23, of Miami-Dade, previously pled guilty to one count of possession of fifteen or more unauthorized access devices (the social security numbers of other individuals), and one count of aggravated identity theft.
According to court documents, on March 18, 2014, IRS-CI and the USSS executed a residential search warrant and discovered over 3,000 items, including paperwork and notebooks, that contained the personal identifying information (PII) – name, date of birth, and social security number - of various individuals. Located in the bedroom where Jenkins was sleeping was an envelope addressed to “Mr. Brandon K. Jenkins.”. Inside the envelope, law enforcement discovered a wallet with a social security card in the defendant’s name, other documents in the defendant’s name, three debit cards in the names of other individuals, and five “Student Selection Form Cards” containing the names and social security numbers of other individuals.
A forensic analysis of the documents recovered from the target residence revealed Jenkins’ fingerprints on numerous items containing PII. One document, a piece of paper, contained an individual’s PII that had been used to file a fraudulent income tax return from the target residence, where Jenkins’ had been residing.
Mr. Ferrer commended the investigative efforts of IRS-CI and the USSS. The case is being prosecuted by Assistant U.S. Attorneys Brooke C. Watson and Gera R. Peoples.
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.justice.gov/usao-sdfl. 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.
Medtronic Corporation and Executives Agree to Consent Decree to Resolve Allegations of Food, Drug and Cosmetic Act ViolationsRead the Press Release
Medical device manufacturer Medtronic Corporation and two of its top executives have agreed to resolve allegations that they violated various provisions of the federal Food, Drug and Cosmetic Act (FDCA) with regard to the company’s SynchroMed infusion pump. At the request of the U.S. Food and Drug Administration (FDA), the Justice Department today filed a complaint and a proposed consent decree in the U.S. District Court for the District of Minnesota. The complaint alleges that Medtronic, its chief executive officer, S. Omar Ishrak, and its senior vice president, Thomas M. Tefft, have been distributing medical devices in interstate commerce that are adulterated because they were not manufactured in accordance with current good manufacturing processes.
“The proposed consent decree will require Medtronic and its leadership to commit to making changes in their process that will benefit the American public by ensuring that their products are safe and effective for patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will not permit medical device manufacturers to shirk their responsibility to ensure that the devices that patients rely upon are safe.”
The defendants design, manufacture and distribute the SynchroMed II implantable infusion pump system, which is used to deliver medication to treat cancer, chronic pain and severe spasticity. Medical devices such as the Medtronic’s SynchroMed system are required to comply with FDA’s quality system (QS) regulations. The complaint alleges that Medtronic repeatedly failed to correct violations of the QS regulations with regard to the SynchroMed II.
The FDA conducted multiple inspections of Medtronic Neuromodulation’s manufacturing facilities in Columbia Heights, Minnesota, between 2006 and 2013. These inspections revealed significant violations of the QS regulations, many of which related to design controls, complaint handling, and corrective and preventive action. Those regulations ensure that when a device is found to have malfunctioned or caused serious injury to a patient, the complaint is thoroughly investigated and necessary validated design changes are implemented. The problems that the FDA observed with the SynchroMed II pump could result in an over- or under-infusion of medication for patients.
Under the terms of the agreement, which must be approved by the court, Medtronic and the two individual defendants have agreed to stop manufacturing, designing and distributing new SynchroMed II pump systems except in extraordinary cases, such as when a treating physician certifies that a SynchroMed II pump is medically necessary for an individual patient’s treatment. The proposed consent decree also requires Medtronic to retain an expert to help Medtronic correct its regulatory violations. Medtronic may not resume distributing the SynchroMed II pump system until it receives permission from the FDA.
“We will continue to work with the Food and Drug Administration and our partners at the Consumer Protection Branch of the Department of Justice to identify and remedy instances in which medical technology manufacturers in Minnesota fail to adhere to best practices,” said U.S. Attorney Andrew M. Luger of the District of Minnesota. “As an industry leader, Medtronic and its executives must adhere to the high-quality manufacturing processes required under the FDCA.”
The matter is being handled by the Civil Division’s Consumer Protection Branch, the U.S. Attorney’s Office of the District of Minnesota and the FDA’s Office of Chief Counsel.
Media AdvisoryRead the Press Release
Montgomery, Alabama – The U.S. Attorney’s Office for the Middle District of Alabama will host a working group on Wednesday, April 29, 2015 at 10:00 a.m. to address concerns over heroin, prescription drugs, and spice use in the Middle District.
Media members are invited to attend the opening remarks and a PowerPoint presentation that summarizes the subject matter to be discussed. Following the PowerPoint presentation, there will be a brief break for interviews with participants. At the completion of the interviews, the working group will reconvene for a closed session.
Working group participants will include U.S. Attorney George Beck Jr., Alabama Attorney General Luther Strange, Secretary of Law Enforcement Spencer Collier, Superintendent of Education Dr. Thomas Bice, Alabama Department of Forensic Sciences Director Michael Sparks, FBI Special Agent in Charge Robert Lasky, and DEA Assistant Special Agent in Charge Clay Morris.
Other agencies invited to participate include: Alabama Department of Public Health, Alabama Sheriff’s Association, Alabama Police Chief’s Association, Alabama District Attorney’s Association, Alabama Coroner’s Association, Alabama Hospital Association, and the Alabama Pharmacy Board.
We request that members of the media RSVP by email at [email protected], or by calling (334) 551-1706. All media members should plan to arrive no later than 9:45 a.m.
Location:
U.S. Attorney’s Office
131 Clayton Street
Montgomery, Alabama 36104Click Here for a copy of the PowerPoint presentation.
Maryland Man Sentenced to 40 Years in Prison for Shooting Outside Northeast Washington Shoe StoreRead the Press Release
WASHINGTON – Victor L. Coley, 52, of Upper Marlboro, Md., was sentenced today to a 40-year prison term for a broad daylight shooting that took place outside a shoe store in Northeast Washington, Acting U.S. Attorney Vincent H. Cohen, Jr. announced.
Coley was found guilty in February 2015 of a total of 15 charges, including four counts of assault with intent to kill while armed. The verdict followed a trial in the Superior Court of the District of Columbia. He was sentenced by the Honorable J. Michael Ryan.
According to the government’s evidence, the shootings took place at 1:10 p.m. on Nov. 6, 2013 outside the Payless shoe store at the corner of Minnesota Avenue and Clay Place NE. Coley shot one man in the back and another man in the back of the head and then the chest. As the second victim managed to stumble away, Coley fired additional shots, two of which struck innocent bystanders. The man who was shot in the back is paralyzed from the waist down; the other three victims have recovered from their injuries. Dozens of people were outside the shoe store and at a nearby bus stop at the time that the gunfire began.
The investigation revealed that Coley had tried to enlist the intended targets as part of his drug-dealing crew, but they refused. After the shooting, he hid the gun in a house behind the shoe store. Coley was arrested minutes later, while coming out of the house. He has been in custody ever since.
In announcing the sentence, Acting U.S. Attorney Cohen praised the work of the officers and detectives who investigated the case for the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Richard Cheatham and Stephanie Gilbert; Victim/Witness Advocate Diana Lim, Assistant U.S. Attorney Robert Eckert, and former Assistant U.S. Attorney James Smith. Finally, he expressed appreciation for the work of Assistant U.S. Attorneys Jeffrey Nestler and David Misler, who investigated and prosecuted the case.
Man Sentenced for Drug and Gun OffensesRead the Press Release
SYRACUSE, NEW YORK – A man who previously had been found guilty in December 2014 by a federal jury of Possessing with the Intent to Distribute Crack Cocaine; Possessing a Gun in Furtherance of his Drug Dealing; and being a Felon in Possession of a Gun, was sentenced to a term of incarceration in U. S. District Court in Syracuse. SHAEEM GRADY (A/K/A SHAHEEM GRADY), 29, of Syracuse, NY, was sentenced to 75 months incarceration, 3 years of supervised release, and ordered to pay a special assessment of $300 by Senior, U.S. District Judge Frederick J. Scullin, Jr., according to U.S. Attorney Richard S. Hartunian. GRADY was arrested on March 22, 2013, when Syracuse police officers observed a baggie of crack cocaine in his lap as GRADY sat in the passenger seat of a car illegally parked on Catawba Street. Police attempted to place GRADY under arrest but GRADY violently resisted them while attempting to gain access to the center console of the vehicle where a loaded handgun was later recovered. During GRADY’s struggle with the police he told the driver of the vehicle to "pull off, drive away" while the officers were trying to physically remove him from the car. Officers were eventually able to take GRADY into custody. Later, as GRADY was walked to the Public Safety Building he stated to one of the officers "I wasn’t going to kill you." GRADY was prohibited from possessing a firearm due to a 2002 conviction for Criminal Possession of a Weapon in the Second Degree.
This prosecution resulted from an investigation conducted by the Syracuse Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorney Geoffrey Brown. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315) 448-0672.
MEDIA ADVISORY: Kelly T. Currie Will Serve as the Acting United States Attorney for the Eastern District of New YorkRead the Press Release
Effective today, Kelly T. Currie will serve as the acting United States Attorney for the Eastern District of New York. In that capacity, he is responsible for overseeing all federal criminal and civil investigations and cases in Brooklyn, Queens, and Staten Island, as well as Nassau and Suffolk Counties on Long Island. Mr. Currie supervises a staff of approximately 170 attorneys and 129 support personnel. Most recently, Mr. Currie served as First Assistant United States Attorney in this Office.
Mr. Currie returned to the U.S. Attorney’s Office in November 2014 after four years at the law firm Crowell & Moring, LLP. While in private practice, he represented corporations and individuals in white collar criminal defense matters, enforcement actions, corporate internal investigations, and complex civil litigation.
Prior to joining the law firm, Mr. Currie served in the U.S. Attorney’s Office from 1999-2010, including as Deputy Chief of the Criminal Division and Chief of the Violent Crimes & Terrorism Section. Mr. Currie led investigations and prosecutions of a wide range of crimes, including racketeering, international terrorism, securities and wire fraud, money laundering, and murder. He tried 15 cases to verdict and argued over a dozen appeals before the U.S. Court of Appeals for the Second Circuit. As Chief of the Violent Crimes and Terrorism Section, Mr. Currie led teams of prosecutors in bringing nationally-recognized terrorism and national security prosecutions, and RICO prosecutions against violent gang members. He also obtained a trial conviction in the prosecution of the head of securities lending at a major Wall Street investment bank for securities fraud and money laundering.
Mr. Currie joined the U.S. Attorney’s Office after working as an associate at the law firm of Rogers & Wells, LLP. From 1996 to 1998, Mr. Currie served as a senior advisor to former United States Senator George J. Mitchell, who chaired the political negotiations in Northern Ireland that led to the 1998 Good Friday Agreement.
Mr. Currie graduated from the University of Virginia, McIntire School of Commerce in 1986, and the University of Virginia School of Law in 1993.
Lebanese-Born Man Sentenced to Federal Prison on Charges of Making False Statement to a Federal Agent and an Unlawful Attempt at NaturalizationRead the Press Release
Today in San Antonio, United States District Judge Royce C. Lamberth sentenced 45–year-old Lebanese–born Wissam “Sam” Allouche to five years in federal prison for knowingly lying to federal authorities on his U.S. citizenship petition about his relationship with the Amal militia. That announcement was made today by Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
Judge Lamberth sentenced Allouche to five-year terms of imprisonment, to run concurrently, for making a false statement to a federal agent and for an unlawful attempt to procure and obtain naturalization and citizenship. Today, Judge Lamberth found that there was evidence beyond a reasonable doubt that Allouche was a member of the Amal militia and had command authority over Hezbollah.
Testimony during trial revealed that Allouche, who migrated to the United States after marrying his wife, a U.S. Army soldier, failed to disclose in January 2009 to U.S. immigration authorities the fact that in the 1980s, he was a member of the Amal militia in order to remain in the United States. In addition, while seeking a contract linguist position with the U.S. Department of Defense that required top security clearance, evidence revealed that Allouche failed to disclose that he was held as a prisoner of war by Israel. Present and former relatives testified Allouche later made statements that he subsequently killed an Israeli pilot captured by Hezbollah in retaliation for his imprisonment. Evidence presented during trial also showed that in 2009, Allouche unlawfully obtained U.S. citizenship by claiming that he was living with his estranged wife when, in fact, they were in divorce proceedings. On February 20, 2015, jurors convicted Allouche of both charges.
The case was investigated by the FBI and the San Antonio Joint Terrorism Task Force. The case was prosecuted by Assistant U.S. Attorneys Mark Roomberg and Jay Hulings for the Western District of Texas.
Leaders of Meth and Heroin Distribution Ring Sentenced to Long Prison TermsRead the Press Release
The father and two sons who led a Pierce County based drug trafficking ring that distributed methamphetamine and heroin were sentenced last week in U.S. District Court in Tacoma to long prison terms, announced Acting United States Attorney Annette L. Hayes. LUIS HERNANDEZ, 60, of Tacoma was sentenced to ten years in prison. His two sons, JUAN HERNANDEZ, 34, of Kent, Washington and JAIME HERNANDEZ, 29, of Tacoma were each sentenced to twelve years in prison. At the sentencing hearing U.S. District Judge Ronald B. Leighton noted that heroin and meth destroys lives, saying this family group had “worked mightily to destroy other families.”
“Through the course of this case, law enforcement took more than 66 pounds of crystal meth and more than two and a half pounds of heroin off the streets,” said Acting United States Attorney Annette L. Hayes. “The defendants prepared these drugs for distribution in a lab that was fed by the misery and suffering of the addicted and their communities. DEA and their state and local partners should be commended for their work on this case.”
The Drug Enforcement Administration led this wire-tap investigation which uncovered a conversion lab in Spanaway, Washington where liquid meth was processed into highly addictive crystal methamphetamine. The conversion of liquid meth to crystal meth is a potentially dangerous process involving highly flammable chemicals such as acetone. In all fifteen people were charged in connection with this drug distribution ring, and all have entered guilty pleas.
“The leaders of this trafficking group contributed to the methamphetamine and heroin addiction in the Pacific NW,” said DEA Special Agent in Charge Douglas James. “It is clear that the members of this group had no regard for the safety of the community as they operated a methamphetamine conversion lab involving extremely dangerous and flammable chemicals. Methamphetamine and heroin continue to be the top drug threats in the region and DEA will continue to work with our federal, state and local counterparts to address these threats.”
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. This investigation was led by DEA Tacoma in conjunction with Tahoma Narcotics Enforcement Team, Lakewood Police Department, West Sound Narcotics Team, and Pierce County Sheriff’s Office.
The case is being prosecuted by Assistant United States Attorneys Lisca Borichewski, Brian Werner and Marci Ellsworth.
Leader of Oxnard Gang and Mexican Mafia Associate Sentenced to Life Without Parole in Federal Prison for Drug and Gun OffensesRead the Press Release
LOS ANGELES –– The leader of the Oxnard-based Colonia Chiques street gang was sentenced this afternoon to life without parole in federal prison, plus an additional 55-year consecutive term, for his conviction on a host of narcotics and weapons offenses, including leading a continuing criminal enterprise (CCE).
Luis Manuel Tapia, 39, of Ojai, the leader of the Colonia Chiques and a validated associate of the Mexican Mafia prison gang, was sentenced by United States District Judge Otis D. Wright II.
At the conclusion of a trial in September, Tapia was found guilty of each of the 26 federal charges filed against him.
Tapia had previously sustained two narcotics convictions – one involving cocaine, and the second involving methamphetamine – in Ventura County Superior Court. Under federal law, the third drug trafficking conviction last year in federal court brought a mandatory life sentence. The CCE count – in conjunction with special findings made by the jury, such as the fact that the enterprise involved at least a kilogram of actual methamphetamine and that defendant was the organization’s principal leader – also carried a mandatory life sentence.
Tapia was the leader of the Colonia Chiques and was one of Ventura County’s most notorious criminals, according to a sentencing memorandum filed by federal prosecutors. Tapia “was a prolific and versatile poly-drug (methamphetamine, heroin, cocaine) trafficker [who] owed a significant part of his authority to his direct connection to the Mexican Mafia,” according to the court document that discusses Tapia’s importation of high-quality narcotics from Mexico that allowed him to engage in transactions worth as much as $1 million.
The evidence presented during a two-week trial in federal court in Los Angeles showed that Tapia was deeply involved in the business of running the Colonia Chiques and was personally involved in the sale of firearms and narcotics. During a series of secretly recorded meetings with Tapia, he described himself as the “CEO” of his enterprise, comparing it to Walmart because he supplied a wide array of contraband and always guaranteed his product’s quality. In October 2011, Tapia orchestrated a $200,000 drug transaction that involved approximately 10 pounds of nearly pure methamphetamine.
During the investigation, authorities conducted an undercover operation in Las Vegas in which an undercover FBI agent posed as a senior member of the Italian mob and negotiated to have Tapia supply the Las Vegas syndicate of the Italian mob with up to 20 pounds of highly pure methamphetamine every month.
The jury also heard Tapia, in a video recording, bragging that his heroin was so strong that it had “killed six people” – and that this was a “good advertisement” for his drug operation. Tapia also explained how his high-quality methamphetamine – which lab results confirmed was often 100 percent pure – was obtained from Mexican drug cartels. In another video recording, Tapia was heard directing a large assembly of younger Colonia Chiques gang members to monopolize their drug selling territory, to seek out and kill informants – something Tapia had bragged he had previously done personally – and to heed the directives of the Mexican Mafia.
Tapia was specifically found guilty of leading a continuing criminal enterprise that distributed at least 1,000 grams of methamphetamine, conspiracy to distribute controlled substances, conspiracy to engage in the business of dealing in firearms without a license, 10 substantive counts of drug distribution (involving heroin, methamphetamine, and cocaine), three counts of possession of a firearm in furtherance of a drug trafficking crime, seven counts of being a felon in possession of a firearm, and the illegal transfer of a fully-automatic machinegun. Counting the machinegun, investigators seized 19 firearms from Tapia, including an AR-15 assault rifle, a custom built AK-47 with a bayonet, and a pistol grip sawed-off shotgun.
Four of Tapia’s co-defendants – Diana Zamora, Edgar Aguilar, Roger Armendariz and Jaime Cardenas – pleaded guilty to conspiring traffic narcotics and/or firearms and were sentenced to up to 10 years in federal prison. An unknown male, known only as “Pancho,” who allegedly supplied narcotics to Tapia, is a fugitive believed to be in Mexico.
Tapia’s sentencing concludes the second phase of a three-phase investigation called Operation “Supernova,” which was conducted by the Ventura County Federal Violent Crimes Task Force – made up of agents with the Federal Bureau of Investigation and officers with the Oxnard Police Department.
Release No. 15-037
Justice Department Settles with Private Career College for Discrimination Against Applicant with HIVRead the Press Release
The Justice Department announced today that it has reached an agreement with Compass Career Management L.L.C. (Compass Career College) of Hammond, Louisiana, to remedy violations of the Americans with Disabilities Act (ADA). Compass Career College is a private provider of vocational education and career training.
Title III of the ADA prohibits public accommodations, such as private vocational and technical colleges, from discriminating against people with disabilities, including those with HIV. Based on its investigation, the department determined that the college conditionally accepted an applicant into its Licensed Practical Nursing (LPN) program but issued a follow-up letter to the applicant after the college discovered that the applicant has HIV. The college’s letter discouraged the applicant from pursuing enrollment at the college. Despite the college’s letter, the applicant attempted to finalize enrollment at the college, but the college advised the applicant that the class was full and did not admit the applicant. The consent decree, filed today along with a complaint in the U.S. District Court for the Eastern District of Louisiana, must be approved by the court.
Under the terms of the consent decree, the college will implement a nondiscrimination policy to ensure that the college does not discriminate against persons with HIV; stop questioning applicants and students about their HIV status; train college administrators and instructors on ADA requirements and the revised policies required by the consent decree; and report to the department on its compliance with the consent decree. In addition, the college will pay $30,000 in compensatory damages to the applicant, and will pay a civil penalty of $5,000 to the United States.
“We continue to work to eradicate discriminatory and stigmatizing treatment of people with HIV based on unfounded fears and stereotypes,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The ADA clearly protects individuals with HIV and other disabilities from exclusion or marginalization, including in vocational schools, trade schools, and career colleges.”
“This is an important step by the leadership of Compass Career College to ensure compliance with the ADA,” said U.S. Attorney Kenneth Polite Jr. of the Eastern District of Louisiana. “The agreement that we are announcing today reflects the college’s commitment, and that of the Justice Department, to ensure full accessibility and opportunity for individuals with disabilities – including those with HIV – in the private educational setting.”
To read the consent decree and complaint or for more information on the ADA and HIV discrimination, visit www.ada.gov/aids. Title III of the ADA requires public accommodations, such as private schools, to provide individuals with disabilities (including HIV), equal access to goods, services, privileges, facilities, advantages and accommodations. For more information about the ADA, call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
Illinois Insurance Salesman Sentenced for Fraudulently Representing Himself as A Financial Advisor to Victims in AlaskaRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that an Illinois man pled guilty and was sentenced in federal court in Anchorage to ten counts of mail and wire fraud based on his scheme to defraud victims by submitting forged signatures and falsified medical information on insurance applications.
Russell Armstrong, 52, of Lake Bluff, Illinois, pled guilty and was sentenced today by Chief United States District Court Judge Ralph R. Beistline, to 24 months in prison. Any fine amount and restitution to victims will be determined at a hearing on July 9, 2015.
According to Assistant U.S. Attorney Aunnie Steward, Armstrong was an insurance salesman who misled federal postal employees into thinking he was a financial advisor associated with the federal government sent to help them understand their federal benefits. Armstrong sold postal employees life insurance falsely telling them that it was an investment account. Armstrong forged the employees’ signatures, and he falsely omitted their medical information on the life insurance applications. He also set up payroll allotments to insurance companies without the employees’ knowledge. Armstrong started his scheme targeting postal employees unfamiliar with their federal benefits in his home state of Illinois in 2011, and then traveled to Fairbanks and Anchorage in 2013 to carry out his scheme in Alaska. Armstrong attempted to obtain over $90,000 in commissions by selling 22 victims in Alaska life insurance without their knowledge.
In imposing the sentence Judge Beistline noted that Mr. Armstrong was not candid with his victims or investigators looking into his crimes and that his motive was personal gain. Judge Beistline also noted that the victims in this case were all close to retirement and that everyone is vulnerable as they near retirement because they need to make financial decisions to safeguard their future and the future of those that depend on them. In imposing the sentence Judge Beistline said that it is important to ensure that the advice to people as they near retirement is true and accurate and that they are dealt with honestly. Judge Beistline indicated that the sentence is meant to deter others who would deceive people that were relying on them for expert advice.
United States Attorney Karen Loeffler said: “Targeting those seeking financial advice who are preparing for retirement is serious fraud. This conviction and sentence sends a message that this type of predatory fraud affecting the savings and future financial planning of federal employees who have worked for their well-earned retirement will not be tolerated.”
“This case reflects our agency’s commitment to protecting the U.S. Postal Service and its employees, and enforcing the laws that defend the nation’s mail system from illegal use,” said Anthony Galetti, Inspector in Charge of the Seattle Division of the U.S. Postal Inspection Service.
Director Lori Wing-Heier of the State of Alaska Division of Insurance said: “This case demonstrates the Alaska Division of Insurance and its fraud investigation partners are dedicated to protecting Alaska consumers and investigating fraudulent activities by licensed insurance producers.”
Ms. Loeffler commends the United States Postal Inspection Service, with assistance from the State of Alaska Division of Insurance, and the State of Alaska Division of Banking and Securities for the investigation of this case.
Illegal Alien Sentenced to Eighteen Months in PrisonRead the Press Release
A man who illegally returned to the United States and used false documents to obtain employment was sentenced today to 18 months in federal prison.
Anacleto Morales-Carrera, age 40, an illegal alien living in Hampton, Iowa, received the prison term after a February 3, 2015, guilty plea to one count of unlawful use of identification documents, one count of misuse of a social security number, and one count of illegal reentry into the United States by an aggravated felon.
The evidence showed that Morales-Carrera was deported from the United States in January 2001 after having been convicted in Iowa of forgery, a felony offense. The forgery conviction involved the possession of a fraudulent social security card in his name. In November 2005, he was again deported from the United States after having been found in Iowa. In January 2006, Morales-Carrera was convicted in Texas of illegal entry into the United States in December 2005, and again deported on January 12, 2006. After that date, he yet again illegally reentered the United States and in August 2012, Morales-Carrera used a fraudulent permanent resident card and a fraudulent social security card, both in his name, to gain employment in Iowa. However, the account number on the permanent resident card was fictitious and social security account was assigned to someone else.
Morales-Carrera was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Morales-Carrera was sentenced to eighteen months’ imprisonment. A special assessment of $300 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Morales-Carrera is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by Homeland Security Investigations and Immigration and Customs Enforcement.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-0002.
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Husband and Wife Sentenced in Multi-Million Dollar Healthcare Fraud SchemeRead the Press Release
HOUSTON – William Owuama, 56, and Marla Owuama, 47, have been sentenced following their convictions related to a healthcare fraud scheme in which Mr. Owuama’s Company billed Medicare and Medicaid for more than $9 million, announced U.S. Attorney Kenneth Magidson. Both pleaded guilty Feb. 2, 2015. A third defendant – Florida Holiday Island, 65 – is set to be sentenced on Wednesday. All are from Houston.
Today, U.S. District Judge Nancy F. Atlas sentenced William Owuama to a total of 60 months in federal prison for his conviction of conspiracy to commit healthcare fraud and violate the anti-kickback statute. Mr. Owuama must also serve a three-year-term of supervised release following completion of his prison sentence. Marla Owuama was convicted of misprision of a felony for helping to conceal the crime and was ordered to serve a 12-month-term of probation with a condition of home confinement to be followed by one year of supervised release. In addition to their sentences, the Owuamas were ordered to pay $3,951,019.89 in restitution. In handing down the sentences, Judge Atlas noted the massive size of the scheme.William Owuama was the owner of Wilmar Healthcare Systems and his wife was a registered nurse who helped run the clinic. William Owuama violated the anti-kickback statute by participating in the scheme which paid Medicare beneficiaries for visiting the clinic. He also billed Medicare and Medicaid for vestibular testing that was never performed and, for part of the conspiracy, billed under the provider number of a local doctor while that doctor was incarcerated on unrelated charges. From January 2006 through October 2009, Medicare and Medicaid paid Wilmar more than $4.7 million based on the fraudulent claims.
Previously released on bond, all were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges in this case was conducted by the U.S. Department of Health and Human Services – Office of Inspector General, FBI and the Texas Attorney General’s Office Medicaid Fraud Control Unit. Assistant U.S. Attorneys Andrew Leuchtmann, John Pearson and Adrienne Frazior prosecuted the case.
Houston Man Pleads Guilty to Being Alien Smuggling BossRead the Press Release
CORPUS CHRISTI, Texas – A Houston man entered a plea of guilty in Corpus Christi federal court today for his role in a conspiracy to harbor and transport illegal aliens, announced U.S. Attorney Kenneth Magidson. Homero Gonzalez-Carranza, 30, pleaded guilty to being a boss in this conspiracy which existed from January 2007 until January 2015.
Gonzalez-Carranza, a citizen of Mexico who resided in Houston, oversaw the transportation of illegal aliens from the Rio Grande Valley to Houston. Illegal aliens would be harbored at stash houses in Houston until ultimately being transported to their final destinations within the United States. During the conspiracy, illegal aliens suffered injuries during transport, such as during high speed chases and vehicles crashes.
In one instance, 115 illegal aliens were discovered in a house in Houston on March 19, 2014. They were held against their will at the stash house which was about 1400 square feet with boarded up windows and doors.
It is estimated that thousands of illegal aliens were transported and harbored during this conspiracy.
Gonzalez-Carranza is scheduled to be sentenced July 14, 2015, by Senior United States District Judge Hayden Head. At that time, Gonzalez-Carranza faces up to 20 years in prison and up to a $250,000 fine.
The case was investigated by Homeland Security Investigations. Assistant U.S. Attorney Chad W. Cowan is prosecuting the case.
Harrisburg Man Sentenced for Distribution of Crack CocaineRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Ronald Lee Goss, age 40, Harrisburg, was sentenced today by U.S. District Court Judge John E. Jones III in Harrisburg to 156 months imprisonment for distribution of crack cocaine.
According to U.S. Attorney Peter Smith, Goss distributed crack cocaine in the Harrisburg area during 2011. Gross was initially charged in January 2015. He pled guilty on September 30, 2014.
This case was investigated by the Federal Bureau of Investigation’s Capital City Safe Streets Task Force and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
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Guilty Verdict Returned Against Peter Hoffman, Michael Arata, and Susan Hoffman for Fraudulent Film Tax Credit SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that this afternoon, a jury returned guilty verdicts against three defendants for their participation in a conspiracy to commit mail and wire fraud as part of a fraudulent tax credit scheme.
The jury found PETER M. HOFFMAN, age 65, of Los Angeles, guilty on Counts 1 through 21, which includes a variety of substantive mail and wire fraud offenses. In total, PETER HOFFMAN faces 405 years in prison. MICHAEL P. ARATA, age 49, of New Orleans, was convicted on Counts 1 through 7, 13, and 21 through 25, which includes four counts of making false statements. He faces a maximum of 185 years in prison. Lastly, the jury found SUSAN HOFFMAN, age 69, of New Orleans, guilty on Counts 1, 11, and 21, for which she faces a total of 45 years in prison.
U.S. Attorney Polite stated: “I appreciate the hard work of AUSAs Baehr, Kammer, and Menon, as well as our law enforcement partners from the FBI and the Louisiana Office of the Inspector General. We are pleased with the verdict, and we thank the jury and the court for their consideration of this case. This case is important because it sends the message that our state’s business, especially our growing film industry, will no longer fall prey to fraud and corruption. Just as important, today’s verdict underscores the fact that wherever we find criminal conduct, as we did in the case of the Hoffmans and Michael Arata, we will follow the facts and bring justice to those individuals, regardless of where they live, their wealth, or their last names.”
Louisiana State Inspector General Stephen Street commented: “I am pleased that the jury saw this for what it was: plain and simple thievery. These guilty verdicts should send the message loud and clear that we have zero tolerance for those who defraud Louisiana's tax credit programs, and will continue to make pursuing these criminal cases a top priority. I want to thank our partners at the FBI and United States Attorney’s Office for their outstanding work on this case, and in particular the Assistant United States Attorneys for a fine job with the prosecution.”
Gila River Man Sentenced to 15 Years in PrisonRead the Press Release
PHOENIX – Today, Manuel Ybarra Garcia, 41, of Sacaton, Ariz., a member of the Gila River Indian Community, was sentenced by U.S. District Judge Douglas L. Rayes to 180 months in prison followed by lifetime supervised release. Garcia pleaded guilty on Dec. 9, 2014, to abusive sexual contact of a minor. The crime occurred on the Gila River Indian Reservation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation in this case was conducted by the Gila River Police Department. The prosecution was handled by Raynette Logan, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-00888-PHX-DLR
RELEASE NUMBER: 2015-033_Garcia
Georgia Man Sentenced to 35 Years in Prison for Drug TraffickingRead the Press Release
Transported cocaine and heroin to the Norfolk area
NORFOLK, Va. – Steve Jacob Joseph 35, of Alpharetta, Georgia, was sentenced today to 420 months in prison, followed by 5 years of supervised release for conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and one kilogram or more of heroin.
Dana J. Boente, United States Attorney for the Eastern District of Virginia and Michael Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Norfolk, made the announcement after sentencing by United States District Judge Mark S. Davis.
Joseph and his co-conspirator, Nicole Felicia Clark, were found guilty on December 5, 2014 after a three-day trial by a federal jury. According to court records and evidence at trial, Joseph and Clark were both members of a large-scale drug trafficking organization that transported cocaine and heroin to the Norfolk area from New York City and Atlanta, Georgia. Clark transported kilograms of cocaine and heroin from Georgia to Norfolk in a secret compartment in a 2007 GMC Yukon SUV. Clark transported hundreds of thousands of dollars in drug money from Norfolk to Atlanta. Joseph managed the drug operation in Atlanta. He loaded cocaine and heroin into the GMC Yukon for delivery by Clark to Virginia. Joseph handled the drug money generated by drug sales in Virginia and paid the group’s California supplier. On November 4, 2013, Clark was arrested by Officers with the Clayton County Georgia Police Department following a traffic stop of the GMC Yukon in suburban Atlanta. During the stop, the investigating officer conducted a search of the Yukon, discovered the secret compartment with 2.5 kilograms of cocaine and 595 grams of heroin inside. Trial testimony indicated that Clark was in the process of transporting the seized drugs to Norfolk. Joseph was arrested by the Clayton County PD later that evening in a car stereo installation shop named JMW Customs Auto in Rex, Georgia. Police seized approximately $10,000 in cash from Joseph. The police also seized from the shop a DVR security camera system on which were found videos depicting Joseph and Clark placing items in the secret compartment in the GMC Yukon.
Clark, 36, also of Ellenwood, Georgia, was found guilty of three counts of possession of heroin with intent to distribute and was sentenced on March 20, 2015 to 240 months in prison.
This case was investigated by the Department of Homeland Security, Homeland Security Investigations. Assistant United States Attorney Darryl J. Mitchell prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-8.
Georgia Hospital to Pay $20 Million to Resolve False Claims Act AllegationsRead the Press Release
The Medical Center of Central Georgia (MCCG) has agreed to pay $20 million to settle allegations that the hospital violated the False Claims Act by billing Medicare for more expensive inpatient services that should have been billed as less costly outpatient or observation services, the Justice Department announced today. MCCG is located in Macon, Georgia, and is the second largest hospital in the state.
“Charging the government for higher cost inpatient services when the patient care received was outpatient or observation services causes Medicare to pay more than it should,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “This department will continue its work to stop abuses of the nation’s health care resources and to ensure patients receive the most appropriate care.”
This settlement resolves the United States’ investigation into MCCG’s inpatient admission practices. The government contends that from 2004 through 2008, MCCG violated the False Claims Act by knowingly charging Medicare for medically unnecessary inpatient admissions when the care provided should have been billed as less costly outpatient or observation services. Because hospitals generally receive significantly higher payments from Medicare for inpatient admissions as opposed to outpatient or observation services, the admission of numerous patients whose care should have been billed as outpatient or observation services, as alleged here, can result in substantial financial harm to Medicare.
“Overcharging the government for medical services wastes our country’s limited health care resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia. “When a provider inflates its billings, we will aggressively seek to recover the overcharges under the False Claims Act.”
As part of this agreement, MCCG entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG) that requires the company to engage in significant compliance efforts over the next five years. Under the agreement, MCCG is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries.
“Unnecessarily admitting patients who could have been treated in an outpatient or observation setting is not only a waste of taxpayer dollars, but a fundamental breach of trust,” said Special Agent in Charge Derrick L. Jackson of HHS-OIG in Atlanta. “Medicare beneficiaries must feel secure and know that the care selected for them is in their best interest, and not merely what will generate the most revenue for the facility.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was investigated by HHS-OIG and the U.S. Attorney’s Office of the Northern District of Georgia. The claims resolved by this settlement are allegations only and there has been no determination of liability.
Georgia Hospital to Pay $20 Million to Resolve False Claims Act AllegationsRead the Press Release
ATLANTA - The Medical Center of Central Georgia (MCCG) has agreed to pay $20 million to settle allegations that the hospital violated the False Claims Act by billing Medicare for more expensive inpatient services that should have been billed as less costly outpatient or observation services, the United States Attorney’s Office announced today. MCCG is located in Macon, Georgia, and is the second largest hospital in the state.
“Overcharging the government for medical services wastes our country’s limited health care resources,” said Acting U.S. Attorney John Horn. “When a provider inflates its billings, we will aggressively seek to recover the overcharges under the False Claims Act.”
“Charging the government for higher cost inpatient services when the patient care received was outpatient or observation services causes Medicare to pay more than it should,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “This department will continue its work to stop abuses of the nation’s health care resources and to ensure patients receive the most appropriate care.”
“Unnecessarily admitting patients who could have been treated in an out-patient or observation setting is not only a waste of taxpayer dollars, but a fundamental breach of trust,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Medicare beneficiaries must feel secure and know that the care selected for them is in their best interest, and not merely what will generate the most revenue for the facility.”
This settlement resolves the United States’ investigation into MCCG’s inpatient admission practices. The government contends that from 2004 through 2008, MCCG violated the False Claims Act by knowingly charging Medicare for medically unnecessary inpatient admissions when the care provided should have been billed as less costly outpatient or observation services. Because hospitals generally receive significantly higher payments from Medicare for inpatient admissions as opposed to outpatient or observation services, the admission of numerous patients whose care should have been billed as outpatient or observation services, as alleged here, can result in substantial financial harm to Medicare.
As part of this agreement, MCCG entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG) that requires the company to engage in significant compliance efforts over the next five years. Under the agreement, MCCG is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims settled by the settlement agreement are allegations only; there has been no determination of liability.
This case was investigated by Special Agents of Health & Human Services, Office of Inspector General.
The civil settlement was reached by Assistant United States Attorney Christopher J. Huber.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Fourth Defendant Sentenced for Marijuana Cultivation Operation in Sequoia National ForestRead the Press Release
FRESNO, Calif. — David Arreola, 29, of Michoacán, Mexico, was sentenced today to seven and a half years in prison for conspiring to manufacture, distribute and possess with intent to distribute marijuana grown on public land and possessing a firearm in furtherance of the conspiracy, U.S. Attorney Benjamin B. Wagner announced.
According to court documents, Arreola and his co-defendants, Hernan Cortez-Villaseñor, 40; Homero Pacheco-Rivera, 22; Alfonso Cornejo, 32; and Jose Luis García-Villa, 22, all of Michoacán, Mexico, conspired in the cultivation of approximately 8,876 marijuana plants in the Greenhorn Creek area of the Sequoia National Forest in Kern County. Arreola also admitted that he possessed a 9 millimeter semi-automatic handgun in furtherance of the conspiracy and was in possession of the weapon at the time of his apprehension at the grow site by law enforcement officers.
In sentencing Arreola, Senior U.S. District Judge Anthony W. Ishii also ordered Arreola to make restitution to the U.S. Forest Service of $3,300 for damage to the land and natural resources caused by the marijuana operation. According to court documents, the Greenhorn Creek site sustained extensive damage as a result of the operation. Native oak trees and other vegetation were cut down or otherwise killed to make room for the marijuana plants. The soil was tilled, and fertilizers and pesticides, including Fosfuro de Zinc, an illegal rat poison, were spread throughout the site. As noted in his plea agreement, Fosfuro de Zinc contains zinc phosphide, a highly toxic chemical that can sicken or kill human beings. When Arreola was apprehended, he was sick and had to be air-lifted out of the grow site. According to Arreola, several other growers had previously left the site, because they were sick.
Three of Arreola’s co-defendants previously entered guilty pleas and were sentenced. Cortez-Villaseñor was sentenced to 10 years in prison, and Cornejo and García-Villa were both sentenced to 3 years and 10 months in prison. Pacheco-Rivera is a fugitive. Upon completion of his prison sentence, Arreola, like his co-defendants, faces potential removal to Mexico.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Environmental Protection Agency Criminal Investigation Division (EPA-CID), and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar prosecuted the case.
Docket #: 1:12-cr-184 AWI
Fort Myers Man Sentenced in Child Pornography Distribution CaseRead the Press Release
Fort Myers, Florida – U.S. District Judge John A. Steele has sentenced David E. Judd (35, Ft. Myers) to 72 months in federal prison for distributing and possessing child pornography. The Court also ordered him to serve a life term of supervision as a sexual offender. Judd pleaded guilty on January 26, 2015.
According to court documents, Judd utilized a peer-to-peer Internet network to distribute child pornography images and videos. During an undercover operation, law enforcement agents downloaded child pornography images and videos from Judd’s Internet Protocol address. After a search warrant was executed at his residence, Judd was found to be in possession of over 8,800 child pornography images.
This case was investigated by the Lee County Sherriff’s Office and the Federal Bureau of Investigation’s Child Exploitation Unit. It was prosecuted by Assistant United States Attorney Tama Koss Caldarone.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc
Fort Collins Businessman Charged with Failing to File Income Tax Returns with the IrsRead the Press Release
DENVER – Donald D. Smith, age 66, of Fort Collins, Colorado, was charged by an Information with three counts of failing to file income tax returns, announced United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Gilbert R. Garza. The Information was filed on April 8, 2015, but remained sealed until his initial appearance which was on April 21, 2015. The case is now pending.
According to the Information, during calendar year 2008, Smith, the owner and operator of a business named Mountain West Children’s Academy LLC, had and received gross income of approximately $183,343. Smith was required by law, following the close of that calendar year, and on or before April 15, 2009, to file an income tax return to the Internal Revenue Service (IRS), stating specifically the items of his gross income and any deductions and credits to which he was entitled. In short, Smith willfully failed to file an income tax return.
During the calendar year 2009 and 2010, Smith followed a similar pattern. During 2009, Smith received gross income of approximately $122,068. During 2010, Smith received gross income of approximately $154,900. For both years Smith was required by law to file income tax returns with the Internal Revenue Service. Smith willfully failed to file income tax returns due with the Internal Revenue Service on April 15, 2010 and April 18, 2011, respectively.
Smith was charged with three counts of failing to file income tax return with the Internal Revenue Service, each of which carries a penalty of not more than 1 year in federal prison, and a fine of up to $100,000.
This case was investigated by the Internal Revenue Service – Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Patricia Davies.
An Information is a formal charging document, where the defendant waives the Constitutional right to be indicted by a federal grand jury.
The charges contained in the Information are allegations, and the defendant is presumed innocent unless and until proven guilty.
Former Lexington County Sheriff James R. Metts SentencedRead the Press Release
Contact Person: Jay Richardson (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that James R. Metts, age 68, was sentenced today in federal court in Columbia, South Carolina, for Conspiracy to Harbor Illegal Aliens, a violation of 8 U.S.C. § 1324(a)(1)(A)(v)(I). Chief United States District Judge Terry L. Wooten sentenced Metts to 12 months and one day in prison, 2 years of supervised release, and a $10,000 fine.
Evidence presented throughout the prosecution established that Metts was the forty-two year sheriff of Lexington County. Beginning in September 2011, Metts agreed with a City Councilman, and an owner of local restaurants, to assist restaurant employees to avoid identification and processing by a federal immigration program housed at the Lexington County Detention Center. As one example, on September 16, 2011, a restaurant employee who was an illegal alien was arrested and transported to the detention center. The restaurant owner contacted the City Councilman who in turn called Metts and requested assistance. Metts contacted a member of his command staff about the illegal alien. Based on Metts’ early intervention, this alien was released improperly on a state bond prior to being identified or processed by federal immigration authorities as reflected in the federal immigration logbook with the notation, “Release per Sheriff Metts.”
Bill Nettles stated, “One of the cornerstones of democracy is citizens having faith that law enforcement acts with integrity and not in a self-serving ‘good ole boy’ system. Today’s resolution is a step towards restoring the shine to the badge that Mr. Metts tarnished.”
The case was part of the cooperative efforts of the Federal Bureau of Investigation, Homeland Security Investigation, State Law Enforcement Division, the South Carolina Attorney General’s Office, and the United States Attorney’s Office. Assistant United States Attorneys Jay N. Richardson and Jim May prosecuted the case.
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Former Detroit man pleads guilty to federal drug chargeRead the Press Release
HUNTINGTON, W.Va. – A former Detroit man pleaded guilty today to a federal drug charge, announced U.S. Attorney Booth Goodwin. Tony Searcy, 48, pleaded guilty in federal court in Huntington to possessing heroin with the intent to distribute it. Searcy admitted that on September 26, 2014, he traveled from Detroit, Michigan to Huntington, West Virginia, with approximately 100 grams of heroin that he planned to sell in the Huntington area.
Searcy faces up to twenty years of imprisonment when he is sentenced on August 10, 2015.
The investigation was conducted by the Drug Enforcement Administration Task Force. Assistant United States Attorneys Greg McVey and Jennifer Rada Herrald are in charge of the prosecution.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Former Controller of Greenwich Hedge Fund Sentenced to 4 Years in Prison for Embezzling More Than $9 MillionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on April 24, 2015, LAWRENCE J. HERZING, 45, of Greenwich, was sentenced by U.S. District Judge Jeffrey Alker Meyer in Bridgeport to 48 months of imprisonment, followed by three years of supervised release, for embezzling more than $9 million from the hedge fund where he was employed.
According to court documents and statements made in court, HERZING was employed as the controller of Greenwich-based Contrarian Capital Management, L.L.C. On 32 occasions between 2004 and 2013, HERZING used his position to wire $9,202,417.54 from his employer to accounts that he controlled.
Judge Meyer ordered HERZING to pay full restitution. HERZING has forfeited his residence and funds seized from his accounts, totaling more than $5 million.
HERZING was arrested on October 29, 2014. On January 29, 2015, he pleaded guilty to one count of wire fraud.
This matter was investigated by the Federal Bureau of Investigation, with the assistance of the Greenwich Police Department. The case was prosecuted by Assistant U.S. Attorneys Heather Cherry and Jonathan Francis.
Former Community Health Clinic CFO Pleads Guilty in Scheme to Defraud Millions from GovernmentRead the Press Release
BIRMINGHAM -- The former financial officer of two non-profit health clinics in Alabama for the poor and homeless pleaded guilty today to multiple federal charges related to a scheme to defraud millions of dollars from the clinics and the federal government health agencies that provide most of their funding.
TERRI McGUIRE MOLLICA, 48, of Birmingham entered her plea before U.S. District Judge Karon O. Bowdre. She is scheduled for sentencing Sept. 11. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Regional Office Special Agent in Charge Derrick L. Jackson, announced Mollica's guilty plea.
As part of the plea, she must voluntarily forfeit $938,211 that the government seized last year from her investment and credit union accounts. Mollica acknowledged those funds are proceeds of illegal activity.
A federal grand jury indicted Mollica late last year on 74 counts related to the scheme to defraud the government through the two health care clinics, Birmingham Health Care and Central Alabama Comprehensive Health Inc., five counts of filing false tax returns, and three counts related to her scheme to defraud a life insurance company.
Mollica pleaded guilty to 19 counts related to the fraud against the government -- six counts of wire fraud affecting a financial institution, eight counts of mail fraud affecting a financial institution and five counts of money laundering. She pleaded guilty to four counts of filing false tax returns and to one count of mail fraud and one count of aggravated identity theft related to the insurance fraud.
Mollica's crimes, as outlined in court records, are as follows:
Mollica was the chief financial officer of the non-profit Birmingham Health Care from April 2005 through November 2008. She also performed fiscal duties for Central Alabama Comprehensive Health Inc. CACH is a non-profit clinic in Tuskegee intended to provide primary and preventative health care to people in east Alabama, regardless of their ability to pay. BHC's chief executive officer served for a time as the chief executive officer of the Tuskegee clinic and, in 2008, BHC took over fiscal responsibility of CACH.
Between January 2008 and March 2012, Mollica aided others in diverting about $11 million in federal grant money, assets and property of BHC and CACH to numerous private entities using "Synergy" in the name. Mollica and others retained authority over the affairs of BHC and CACH as they operated the Synergy entities. Mollica then conducted financial transactions to transfer money from the private entities to herself and others, illegally receiving about $1.7 million through the scheme.
BHC began receiving grants from the Health Resources and Human Services Administration, an arm of the U.S. Department of Health and Human Services, more than 20 years ago. Federal grants administered by HRSA and HHS constitute the overwhelming majority of BHC and CACH funding.
Mollica and others misrepresented and concealed information from HRSA to ensure the agency would continue to grant money to the Birmingham and Tuskegee community health clinics.
The maximum penalties for the offenses charged are as follows:
- mail fraud related to the health clinics, 30 years in prison and a $1 million fine;
- mail fraud related to insurance fraud, 20 years in prison and a $250,000 fine;
- wire fraud, 30 years in prison and a $1 million fine;
- money laundering (counts 56, 60 & 68), 20 years in prison and a $500,000 fine, or twice the value of the property involved;
- money laundering (counts 70 -73) involving criminally derived property valued at more than $10,000, 10 years in prison and a $250,000 fine;
- aggravated identity theft, mandatory two years in prison added to any sentence imposed for the underlying felony and a $250,000 fine;
- filing a false tax return, three years in prison and a $100,000 fine.
The FBI, IRS and HHS-OIG investigated the case. Assistant U.S. Attorneys Tamarra Matthews Johnson and Melissa Kay Atwood are prosecuting the case.
Former Chief of Staff to House Republican Minority Leader Admits Profiting by Steering Campaign BusinessRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that GEORGE GALLO, 46, of East Hampton, waived his right to indictment and pleaded guilty today before U.S. District Judge Vanessa L. Bryant in Hartford to one count of mail fraud related to his receipt of more than $100,000 from a political campaign direct mail company to which he steered business.
According to court documents and statements made in court, GALLO was an employee of the State of Connecticut as the Chief of Staff to the Minority Leader of the Connecticut House of Representatives. As part of his responsibilities, GALLO was responsible for designing and overseeing the campaign program of the House Republican Campaign Committee (“HRCC”), a state-registered political action committee that provides material and strategic support to Republican candidates for the Connecticut House of Representatives.
In 2008, GALLO and others developed a HRCC campaign program in anticipation of the first general election cycle in which candidates seeking election to the Connecticut General Assembly or statewide office would receive public financing through the state’s Citizens’ Election Program (“CEP”). The purpose of the new program, in part, was to enable the HRCC to centrally coordinate CEP funded campaigns by providing Republican House candidates with access to comprehensive campaign related services, including direct mail services, voter information, polling, messaging advice and campaign management. GALLO selected the campaign service vendors that were permitted to participate in the HRCC program.
In pleading guilty, GALLO admitted that he informed an employee of a Florida-based company that provided direct mail services to political campaigns of a new business opportunity in Connecticut. GALLO indicated to the employee that the CEP would lead to greater numbers of well-funded Republican House candidates in need of direct mail services, and that the Florida company could serve as a HRCC sponsored vendor with access to CEP funded Republican candidates. In exchange, the company would make payments to GALLO equal to 10 percent of the revenue that the company received from candidates participating in the HRCC program. GALLO indicated to the employee that such an arrangement would be “good for [the company] and good for George Gallo.” The employee agreed to GALLO’s proposal.
As part of the scheme, GALLO and the HRCC hosted “campaign schools” for House Republican candidates where HRCC sponsored vendors, including the Florida company, gave presentations marketing their services. GALLO and others arranged for candidates to meet individually with the Florida company to discuss in greater detail the company’s services, prices and a direct mail plan. These meetings occurred at several locations, including the State Capitol.
During the 2008 and 2012 election cycles, GALLO made false representations to the Minority Leader of the Connecticut House of Representatives that he did not have a financial relationship with or receive any compensation from any of the HRCC sponsored vendors. During the 2008, 2010 and 2012 election cycles, GALLO made additional false representations to others, knowing that his statements would be communicated to House Republican candidates participating in the HRCC campaign program, that he did not receive any compensation from any HRCC sponsored vendor.
From 2008 through 2012, the Florida company mailed checks made payable to the Vinco Group, a Cromwell based limited liability company in which GALLO was the sole member, totaling approximately $117,266.63.
In pleading guilty, GALLO further admitted that he made multiple false statements to FBI special agents on October 1, 2013, when he was interviewed about his relationship with HRCC sponsored vendors. In the interview, GALLO denied that either he or the Vinco Group had a business relationship with any vendors utilized by HRCC, and he denied that he had received any income through the Vinco Group since becoming Chief of Staff to the Connecticut House Minority Leader.
Judge Bryant scheduled sentencing for July 29, 2015, at which time GALLO faces a maximum term of imprisonment of 20 years.
Follow his guilty plea, GALLO was released on a $200,000 bond.
This matter is being investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation Division, with the assistance of the Connecticut Public Corruption Task Force and the State Election Enforcement Commission. The case is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
Former Chief Information Officer of Foundry Networks Sentenced to 78 Months in Prison for Participating in Insider Trading Scheme That Reaped Tens of Millions in Unlawful GainsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVID RILEY, former Chief Information Officer of Foundry Networks, Inc. (“Foundry”), a California-based technology company that was acquired by Brocade Communications, Inc. (“Brocade”), in 2008, was sentenced today to 78 months in prison for his participation in an insider trading scheme that yielded approximately $39 million in ill-gotten gains. The sentence was imposed by U.S. District Judge Valerie E. Caproni. RILEY was convicted following a 13-day trial in September 2014 in which the jury unanimously concluded that RILEY passed inside information about Foundry’s acquisition by Brocade and about Foundry’s earnings for the first quarter of 2008 to Matthew Teeple, a former analyst for San Francisco-based hedge fund Artis Capital Management, L.P. (“Artis”). Teeple pled guilty to related charges in May 2014 and was sentenced principally to 60 months in prison by U.S. District Judge Robert P. Patterson on October 16, 2014.
Manhattan U.S. Attorney Preet Bharara said: “David Riley took advantage of his insider position at Foundry Networks to funnel sensitive nonpublic financial information to Matthew Teeple. This inside information enabled Teeple’s firm to reap nearly $40 million in illegal profits. This conduct has now earned Riley more than six years in federal prison.”
According to the Superseding Indictment filed February 20, 2014, other court documents, and the evidence presented at trial:
As CIO and a Vice President at Foundry, RILEY had access to monthly and quarterly financial reporting, along with other sensitive, nonpublic information (the “Inside Information”) relating to Foundry, well before such information became public. RILEY provided this Inside Information to Teeple – sometimes by telephone and sometimes during meetings the two arranged in the San Jose, California, area. On several occasions, RILEY spoke with Teeple while logged into the database that Foundry used to maintain sensitive financial information. The Inside Information that RILEY passed to Teeple included quarterly financial performance numbers during the first quarter of 2008 and information regarding Brocade’s intended acquisition of Foundry in July 2008.
Teeple passed the Inside Information he got from RILEY on to others, including others at Artis. From the Inside Information Teeple provided about Foundry, Artis ultimately reaped gains of approximately $39 million.
In addition to the prison sentence he received today, RILEY, 48, of San Jose, California, was ordered to pay a fine of $50,000.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission, which has filed civil charges in a separate action.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Telemachus P. Kasulis and Sarah E. McCallum, and Special Assistant U.S. Attorney Michael P. Holland, are in charge of the prosecution.
Former Chief Information Officer of Foundry Networks Sentenced to 78 Months in Prison for Participating in Insider Trading Scheme That Reaped Tens of Millions in Unlawful GainsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVID RILEY, former Chief Information Officer of Foundry Networks, Inc. (“Foundry”), a California-based technology company that was acquired by Brocade Communications, Inc. (“Brocade”), in 2008, was sentenced today to 78 months in prison for his participation in an insider trading scheme that yielded approximately $39 million in ill-gotten gains. The sentence was imposed by U.S. District Judge Valerie E. Caproni. RILEY was convicted following a 13-day trial in September 2014 in which the jury unanimously concluded that RILEY passed inside information about Foundry’s acquisition by Brocade and about Foundry’s earnings for the first quarter of 2008 to Matthew Teeple, a former analyst for San Francisco-based hedge fund Artis Capital Management, L.P. (“Artis”). Teeple pled guilty to related charges in May 2014 and was sentenced principally to 60 months in prison by U.S. District Judge Robert P. Patterson on October 16, 2014.
Manhattan U.S. Attorney Preet Bharara said: “David Riley took advantage of his insider position at Foundry Networks to funnel sensitive nonpublic financial information to Matthew Teeple. This inside information enabled Teeple’s firm to reap nearly $40 million in illegal profits. This conduct has now earned Riley more than six years in federal prison.”
According to the Superseding Indictment filed February 20, 2014, other court documents, and the evidence presented at trial:
As CIO and a Vice President at Foundry, RILEY had access to monthly and quarterly financial reporting, along with other sensitive, nonpublic information (the “Inside Information”) relating to Foundry, well before such information became public. RILEY provided this Inside Information to Teeple – sometimes by telephone and sometimes during meetings the two arranged in the San Jose, California, area. On several occasions, RILEY spoke with Teeple while logged into the database that Foundry used to maintain sensitive financial information. The Inside Information that RILEY passed to Teeple included quarterly financial performance numbers during the first quarter of 2008 and information regarding Brocade’s intended acquisition of Foundry in July 2008.
Teeple passed the Inside Information he got from RILEY on to others, including others at Artis. From the Inside Information Teeple provided about Foundry, Artis ultimately reaped gains of approximately $39 million.
In addition to the prison sentence he received today, RILEY, 48, of San Jose, California, was ordered to pay a fine of $50,000.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission, which has filed civil charges in a separate action.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Telemachus P. Kasulis and Sarah E. McCallum, and Special Assistant U.S. Attorney Michael P. Holland, are in charge of the prosecution.
Former Bank Employee Sentenced to Prison for Bank FraudRead the Press Release
Cynthia L. Palmer, 45, of Alton, Illinois, was sentenced to serve twenty-one months in prison as a result of her conviction for bank fraud in a scheme to defraud and embezzle from U.S. Bank, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Palmer was additionally ordered to serve two years of supervised release following her release from prison and was ordered to pay restitution in the amount of $105,827.62.
The conviction is the result of Palmer's conduct while employed by U.S. Bank at the Bethalto Airport Branch in Bethalto, Illinois as a Universal Banker. Palmer made unauthorized debits on customer’s accounts and in so doing principally targeted older individuals with customers' ages ranging from 65 to 96. Palmer was terminated by U.S. Bank effective December 12, 2013. U.S. Bank promptly made all of the victims whole and thereby sustained the entire loss.
The successful prosecution is the result of an investigation conducted by the U.S. Secret Service with the assistance of U.S. Bank. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
Florida Man and Company Sentenced for Violating the International Emergency Economic Powers Act and US Department of Commerce Denial OrderRead the Press Release
A Palm Beach County, Florida, man and company were sentenced for violating the International Emergency Economic Powers Act (IEEPA), as well as the terms of a denial order issued by the U.S. Department of Commerce.
The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge John F. Khin Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS), Special Agent in Charge Alysa Erichs of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) and Acting Special Agent in Charge Gordon Pomeroy of the U.S. Department of Commerce’s Office of Export Enforcement.
Russell Henderson Marshall, 53, was sentenced by U.S. District Judge Kenneth A. Marra of the Southern District of Florida to serve 41 months in prison and will be removed from the United States upon the completion of his sentence. In imposing the sentence, Judge Marra found that the order denying export privileges issued by the Department of Commerce constituted a national security control, which subjected Marshall to an enhanced sentence. Universal Industries Limited Inc. was sentenced to a term of one year probation and a special assessment of $400 upon a finding that the corporation is currently listed as inactive by the Florida Division of Corporations as a result of Marshall’s arrest.
Marshall and his company Universal Industries Limited Inc. were previously convicted in a 2011 case in the Southern District of Florida for violating the Arms Export Control Act, after which the Department of Commerce issued a denial order prohibiting Universal Industries Limited Inc. and its owners, agents and employees from participating in any transaction involving the export of any item subject to the Department of Commerce‘s Export Administration Regulations (EAR). Marshall and Universal Industries Limited Inc. violated IEEPA and the U.S. Department of Commerce’s denial order by attempting to send three temperature transmitters used on F-16 fighter jets and a saddle part for the J-69 engine used on 737 military trainer aircraft to Thailand and Pakistan, respectively.
“By repeatedly taking actions that violated export control laws and an order issued by the Department of Commerce, Marshall and Universal Industries Limited Inc. actively engaged in efforts that threatened our national security,” said Assistant Attorney General Carlin. “This sentencing serves as another reminder that we will not tolerate this activity. Protecting our national assets, including highly sensitive technologies, from falling into the hands of those who may wish to do us harm is one of our top national security priorities. The National Security Division commends the law enforcement agents, analysts, and prosecutors who took part ensuring justice was served.”
“National security controls exist to ensure that sensitive U.S. technologies are protected,” said U.S. Attorney Ferrer. “Zero tolerance will be afforded individuals who knowingly continue to violate our export control laws and jeopardize the nation’s security.”
“Today's sentencing demonstrates the continued commitment of the Defense Criminal Investigative Service and partner agencies to protect sensitive U.S. defense technology from being illegally exported,” said Special Agent in Charge Khin. “American military prowess depends on lawful, controlled exports of sensitive technology by U.S. industries, which is why DCIS will continue its present campaign to aggressively investigate and prosecute criminal violations regarding the illegal procurement or export of sensitive technology.”
“One of Homeland Security Investigation's top enforcement priorities is preventing the exportation of U.S. military products and sensitive technology, and preventing those technologies and weaponry from falling into the hands of those who might seek to harm America or its interests,” said Special Agent in Charge Erichs. “Technology used by the United States and its allies give us a strategic military advantage, which is why HSI will continue to work with its law enforcement partners to ensure such technology doesn't fall into the hands of those opposed to U.S. national security interests.”
“The Office of Export Enforcement is committed to working with our law enforcement partners to pursue individuals who violate our nation's export control laws,” said Acting Special Agent in Charge Pomeroy. “As the sentence in this case demonstrates, we will not allow our national security to be compromised by individuals who intentionally violate these laws.”
According to court documents and information presented during the sentencing hearing, the DoD Inspector General received a hotline complaint concerning Marshall and Universal Industries Limited Inc. in November 2012. The subsequent investigation revealed that the defendants brokered the sale of military aircraft parts which were subject to license controls by the Department of Commerce, and which the defendants knew were intended to be illegally exported to Thailand and Pakistan.
On Feb. 6, 2015, Marshall and Universal Industries Limited Inc. entered guilty pleas to an information that charged them with knowingly and willfully engaging in negotiations concerning selling, delivering or otherwise servicing a transaction involving an item to be exported from the United States to Thailand and subject to the EAR.
Assistant Attorney General Carlin joins U.S. Attorney Ferrer in commending the investigative efforts of the DoD, DCIS, ICE-HSI and the U.S. Department of Commerce’s Office of Export Enforcement for their outstanding efforts in investigating this matter. The case was prosecuted by Assistant U.S. Attorney Michael Walleisa of the Southern District of Florida.
Florida Man and Company Sentenced for Violating the International Emergency Economic Powers Act and U.S. Department of Commerce Denial OrderRead the Press Release
A Palm Beach County, Florida, man and company were sentenced for violating the International Emergency Economic Powers Act (IEEPA), as well as the terms of a denial order issued by the U.S. Department of Commerce.
The announcement was made by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General for National Security John P. Carlin, Special Agent in Charge John F. Khin Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS), Special Agent in Charge Alysa Erichs of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) and Acting Special Agent in Charge Gordon Pomeroy of the U.S. Department of Commerce’s Office of Export Enforcement.
Russell Henderson Marshall, 53, was sentenced by U.S. District Judge Kenneth A. Marra of the Southern District of Florida to serve 41 months in prison and will be removed from the United States upon the completion of his sentence. In imposing the sentence, Judge Marra found that the order denying export privileges issued by the Department of Commerce constituted a national security control, which subjected Marshall to an enhanced sentence. Universal Industries Limited Inc. was sentenced to a term of one year probation and a special assessment of $400 upon a finding that the corporation is currently listed as inactive by the Florida Division of Corporations as a result of Marshall’s arrest.
Marshall and his company Universal Industries Limited Inc. were previously convicted in a 2011 case in the Southern District of Florida for violating the Arms Export Control Act, after which the Department of Commerce issued a denial order prohibiting Universal Industries Limited Inc. and its owners, agents and employees from participating in any transaction involving the export of any item subject to the Department of Commerce‘s Export Administration Regulations (EAR). Marshall and Universal Industries Limited Inc. violated IEEPA and the U.S. Department of Commerce’s denial order by attempting to send three temperature transmitters used on F-16 fighter jets and a saddle part for the J-69 engine used on 737 military trainer aircraft to Thailand and Pakistan, respectively.
“National security controls exist to ensure that sensitive U.S. technologies are protected,” said U.S. Attorney Ferrer. “Zero tolerance will be afforded individuals who knowingly continue to violate our export control laws and jeopardize the nation’s security.”
“By repeatedly taking actions that violated export control laws and an order issued by the Department of Commerce, Marshall and Universal Industries Limited Inc. actively engaged in efforts that threatened our national security,” said Assistant Attorney General Carlin. “This sentencing serves as another reminder that we will not tolerate this activity. Protecting our national assets, including highly sensitive technologies, from falling into the hands of those who may wish to do us harm is one of our top national security priorities. The National Security Division commends the law enforcement agents, analysts, and prosecutors who took part ensuring justice was served.”
“Today's sentencing demonstrates the continued commitment of the Defense Criminal Investigative Service and partner agencies to protect sensitive U.S. defense technology from being illegally exported,” said Special Agent in Charge Khin. “American military prowess depends on lawful, controlled exports of sensitive technology by U.S. industries, which is why DCIS will continue its present campaign to aggressively investigate and prosecute criminal violations regarding the illegal procurement or export of sensitive technology.”
“One of Homeland Security Investigation's top enforcement priorities is preventing the exportation of U.S. military products and sensitive technology, and preventing those technologies and weaponry from falling into the hands of those who might seek to harm America or its interests,” said Special Agent in Charge Erichs. “Technology used by the United States and its allies give us a strategic military advantage, which is why HSI will continue to work with its law enforcement partners to ensure such technology doesn't fall into the hands of those opposed to U.S. national security interests.”
“The Office of Export Enforcement is committed to working with our law enforcement partners to pursue individuals who violate our nation's export control laws,” said Acting Special Agent in Charge Pomeroy. “As the sentence in this case demonstrates, we will not allow our national security to be compromised by individuals who intentionally violate these laws.”
According to court documents and information presented during the sentencing hearing, the DoD Inspector General received a hotline complaint concerning Marshall and Universal Industries Limited Inc. in November 2012. The subsequent investigation revealed that the defendants brokered the sale of military aircraft parts which were subject to license controls by the Department of Commerce, and which the defendants knew were intended to be illegally exported to Thailand and Pakistan.
On Feb. 6, 2015, Marshall and Universal Industries Limited Inc. entered guilty pleas to an information that charged them with knowingly and willfully engaging in negotiations concerning selling, delivering or otherwise servicing a transaction involving an item to be exported from the United States to Thailand and subject to the EAR.
U.S. Attorney Ferrer joins Assistant Attorney General Carlin in commending the investigative efforts of the DoD, DCIS, ICE-HSI and the U.S. Department of Commerce’s Office of Export Enforcement for their outstanding efforts in investigating this matter. The case was prosecuted by Assistant U.S. Attorney Michael Walleisa of the Southern District of Florida.
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.justice.gov/usao-sdfl. 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
Federal Judge Permanently Shuts Down Tax Preparer Who Operated Inland Empire Tax ServiceRead the Press Release
LOS ANGELES – A federal court has permanently barred a woman who operated a Moreno Valley tax preparation service from preparing tax returns for others, the United States Attorney’s Office announced today.
Nancy L. Hilton, 69, who also used the name Nancy L. Olson, was ordered to never again prepare tax returns for others in a permanent injunction that was signed by United States District Judge Michael W. Fitzgerald on April 22.
The permanent injunction concludes a lawsuit filed one week ago that alleged Hilton prepared fraudulent tax returns and supervised the preparation of fraudulent tax returns by at least five others who knew they were preparing false income tax returns. The fraudulent tax returns were prepared at Hilton’s business, Nancy Olson & Associates.
The suit alleged that Hilton obtained the names, dates of birth and social security numbers of numerous people, and that Hilton used this information to file fraudulent tax returns in the names of those people. Hilton would keep a portion – typically 50 percent – of the illicit refunds which resulted from the filing of the fraudulent returns. When Hilton learned of the government’s investigation into her tax preparation business, she intentionally deleted data from business computers in an attempt to impede and obstruct the government’s investigation, according to the government’s lawsuit.
Last month, Hilton pleaded guilty to criminal conspiracy and identity theft charges for preparing and overseeing the preparation of bogus tax returns (see: http://www.irs.gov/pub/foia/ig/ci/LAFO-2015-10.pdf). Hilton faces up to 30 years in federal prison when she is sentenced on July 6 by United States District Judge Dean D. Pregerson.
Release No. 15-036
Fairmont, WV man sentenced for role in manufacturing methamphetamineRead the Press Release
CLARKSBURG, WEST VIRGINIA – Timothy, Wayne Ferrell, Jr., 33, of Fairmont, West Virginia, was sentenced today for his role in manufacturing methamphetamine, United States Attorney William J. Ihlenfeld, II, announced.Ferrell was discovered in Marion County, West Virginia in May 2014 in possession of medication containing pseudoephedrine, an ingredient commonly used to manufacture methamphetamine. He was also discovered in September 2014 in unlawful possession of a rifle. He pled guilty in December 2014 to one count of “Possession of Pseudoephedrine to be used in the Manufacture of Methamphetamine,” and one count of “Possession of Firearm by Unlawful User/Drug Addict to Controlled Substance.”
Ferrell was sentenced today to 46 months in prison for the drug possession charge and 21 months in prison for the firearm possession charge. The sentences imposed today will run concurrently with each other for a total of 46 months in prison. Ferrell will receive credit for time served since October 2014.
In another matter, Jason Allen Clayton, 40, of Fairmont, West Virginia, was discovered in Marion County in January 2014 in possession of medication containing pseudoephedrine. He pled guilty today to a criminal Information charging him with one count of “Possession of Pseudoephedrine to be used in the Manufacture of Methamphetamine.” He faces up to 20 years in prison and a fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Morgan prosecuted the cases on behalf of the government. The Three Rivers Drug and Violent Crime Task Force investigated both cases.
U.S. District Judge Irene M. Keeley presided over the Ferrell sentencing hearing. U.S. Magistrate Judge John S. Kaull presided over the Clayton plea hearing.
FCI Gilmer inmate convicted, sentenced for assaulting fellow prisonerRead the Press Release
CLARKSBURG, WEST VIRGINIA – Gary Govindass, 36, an inmate at the Federal Correctional Institution, Gilmer, was convicted and sentenced today for assaulting a fellow prisoner, United States Attorney William J. Ihlenfeld, II, announced.
In October 2014, Govindass became engaged in a physical altercation with a fellow FCI Gilmer inmate. The altercation escalated and the victim suffered multiple stab wounds.
Govindass pled guilty today to a criminal Information charging him with one count of “Assault with a Dangerous Weapon with Intent to Do Bodily Harm.” He was sentenced to an additional 12 months in prison.
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The Federal Bureau of Prisons and the FCI Gilmer Special Investigative Services Unit led the inquiry.
U.S. District Judge Irene M. Keeley presided.
Essex County, New Jersey, Man Sentenced to Three Years’ Probation for Role in ‘Double-Dipping’ SchemeRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to three years’ probation for defrauding Home Depot Inc. out of more than $470,000 through an elaborate “double-dipping” scheme he committed at various Home Depot locations, including in New Jersey, U.S. Attorney Paul J. Fishman announced.
Daniel Chalet, 29, of Bloomfield, previously pleaded guilty before U.S. Magistrate Judge James B. Clark III to an information charging him with one count of conspiracy to commit wire fraud. U.S. District Judge Jose L. Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From March 2009 through June 2012, Chalet and his conspirators routinely purchased various items from Home Depot locations in New Jersey, New York, Massachusetts, Delaware, Maryland, Connecticut and Pennsylvania. The conspirators would assemble two shopping carts containing identical items. They then purchased the items in one cart (Cart 1) and stashed the other cart in the store (Cart 2). They would typically purchase the items in Cart 1 using cash, fraudulently obtained Home Depot store credit, or some combination thereof. Chalet and his conspirators would then leave the store with the items in Cart 1, as well as the receipt for the purchase, leaving Cart 2 inside the store.
The conspirators would return to the store almost immediately with a receipt corresponding to the items in Cart 1 and retrieve Cart 2, which contained the identical set of items. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, Chalet and his conspirators would return to the register with Cart 2, and purchase only the additional small item. They would present the receipt for the items from Cart 1 and deceive the cashier into believing that the items in Cart 2 had already been purchased.
Chalet and his conspirators would later go back to the same Home Depot store or travel to different Home Depot store locations to return the items. In some instances, they presented a receipt for the return, and in other instances, the defendants obtained a refund for store credit without presenting a receipt.
Chalet and his conspirators carried out the scheme hundreds of times at various Home Depot locations, fraudulently obtaining Home Depot store credit and refunds totaling at least $470,511.66.
In addition to probation, Judge Linares sentenced Chalet to pay restitution of $472,465.49.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Carl Agnelli, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Richard Roberts Esq., Newark
Equity Trader Sentenced to 30 Months in Federal Prison and Ordered to Disgorge More Than $3.5 Million in Illegal Profits on Securities Fraud ConvictionRead the Press Release
DALLAS — Daniel Lutz Bergin, 42, of Dallas, was sentenced Friday afternoon by U.S. District Judge Barbara M. G. Lynn to 30 months in federal prison following his guilty plea in July 2014 to one count of securities fraud, announced Acting U.S. Attorney John Parker of the Northern District of Texas. Bergin was also ordered to pay a money judgment of $1,384,603 and a $500,000 fine with additional disgorgement in a companion case brought by the Securities and Exchange Commission of approximately $1.7 million—resulting in total monetary remedies in the case that exceed $3.5 million. Judge Lynn ordered that Bergin surrender to the Bureau of Prisons on or before June 23, 2015.
According to plea documents filed in the case and the evidence presented at sentencing, Bergin was an equity trader at Cushing MLP Asset Management, LP (Cushing), a registered investment advisor located on Preston Road in Dallas. Cushing had approximately $2.5 billion in discretionary assets under management. Cushing provided advisory and portfolio management services to institutional clients, including high net worth individuals, investment companies, pooled investment vehicles, pension and profit sharing plans, charitable organizations and state/municipal government entities.
Beginning in at least January 2010 and continuing until his termination on May 23, 2013, Bergin devised and executed a “front-running” scheme in which he misused “inside” or “material, non-public” information when placing trades in a personal brokerage account held in the name of his wife. Bergin’s front-running scheme involved (a) obtaining material, non-public information from his employer concerning large orders to purchase or sell securities for its advisory clients; and (b) subsequently executing trades in the same securities, prior to the execution of the larger customer orders, in anticipation of the movement in price that the large trade was likely to cause. The government’s evidence at sentencing identified 696 transactions in which Bergin traded in energy MLP securities at the same time as Cushing traded in the same securities. Over the course of the scheme, Bergin’s profits from the illegal trading exceeded $3 million.
In furtherance of the scheme, Bergin made false statements and material omissions to Cushing, in violation of Cushing’s Code of Ethics in connection with the front-running trades. In particular, although Bergin disclosed certain personal brokerage accounts held in his name at Fidelity and Scottrade, Bergin failed to disclose brokerage accounts maintained at Fidelity in the name of his wife. After Bergin’s and his wife’s Fidelity accounts were closed by Fidelity, Bergin opened E*TRADE accounts in his wife’s name, which were not disclosed to Cushing as required, and which he continued to use to make unlawful front-running trades.
The evidence at sentencing also established that Bergin made false statements to the SEC in connection with his personal trading, and then continued engaging in illegal front-running trades up until the date of his termination.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The FBI investigated with assistance from the Fort Worth Regional Office of the Securities and Exchange Commission. Assistant U.S. Attorney J. Nicholas Bunch prosecuted.
East St. Louis Man Sentenced to 52 Months in Prison for Illegal Possession of A FirearmRead the Press Release
Octavius Thomas, 31, of East St. Louis, Illinois was sentenced today in the United States District Court to 52 months in prison for Felon in Possession of a Firearm, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, has announced. Thomas was also ordered to pay a fine of $500, a $100 special assessment and to serve a term of 2 years of supervised release following imprisonment. Thomas has been in custody since his arrest on August 28, 2014.
"Getting illegal weapons, and those who traffic in them, off of our streets and out of our communities is, and will remain, one of my top priorities." noted United States Attorney Wigginton.
Court documents establish that on August 5, 2014, Thomas sold a .44 caliber Amadeo Rossi revolver to a confidential informant working with the Bureau of Alcohol, Tobacco, Firearms and Explosives in exchange for a motorcycle and $40 in United States currency. At the time Thomas sold the firearm, Thomas was a previously convicted felon, having been convicted of the offense of Second Degree Murder in 2002.
The investigation was conducted by the Bureau of Alcohol, Tobacco and Firearms (ATF). The case was prosecuted by Assistant United States Attorney Ali Summers.
Dutchess County Man Pleads Guilty in White Plains Federal Court to Distributing Heroin and Fentanyl That Caused the Deaths of Three PeopleRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DENNIS SICA pled guilty today in White Plains federal court to participating in a conspiracy to distribute heroin and fentanyl, the use of which resulted in the deaths of three individuals: Anthony Delello, Laura Brown, and Thomas Miller. SICA was arrested by state authorities on February 2, 2014, and was transferred to federal custody on June 19, 2014. He pled guilty before United States District Judge Cathy Seibel on the day trial was scheduled to begin on the one-count Indictment to which he pled.
U.S. Attorney Preet Bharara stated: “With today’s guilty plea, Dennis Sica formally acknowledged his role in causing the deaths of three young people. The outcome of this prosecution may do little to console the family members who lost their loved ones to the scourge of heroin and Sica’s willingness to exploit their addictions for personal gain. One can hope, however, that the significant penalties Sica faces for his crimes will deter those who peddle deadly drugs and avoid the tragedy that these young victims and their families have suffered.”
According to the allegations contained in the Indictment, the underlying criminal Complaint unsealed on June 19, 2014, and statements made during court proceedings:
From at least late 2013 to February 2014, SICA and others worked together in Dutchess County to sell a particularly potent form of heroin, bags of which were stamped with the brand name “Breaking Bad.” At least some of the heroin distributed by SICA was laced with fentanyl, a synthetic opioid that is significantly stronger than street heroin.
On the night of December 28, 2013, SICA sold “Breaking Bad” heroin to Anthony Delello, a 20-year-old resident of Beekman, New York. Delello snorted some of SICA’s heroin and was found dead by his girlfriend the following day. The Dutchess County Medical Examiner’s report concluded that he died from “acute heroin intoxication.”
Delello’s death did not stop SICA from selling “Breaking Bad” heroin. Four days after Delello was found dead, SICA exchanged a series of text messages with a co-conspirator in which SICA urged the co-conspirator to delete the text message history in the phone they used to sell heroin and, if asked, to deny knowing anything about Delello or the manner of his death.
Slightly more than a month after Delello’s death, two more individuals died after overdosing on “Breaking Bad” heroin. On February 1, 2014, Thomas Miller, 31, was found dead by his mother at his home in Pawling, New York. A hypodermic needle, as well as several glassine bags stamped with the words “Breaking Bad,” were found near his body. Some of the glassine bags were full, others were empty. A chemical analysis of the contents of the full glassine bags showed that they contained a mixture of quinine, fentanyl, and heroin. The medical examiner’s report indicates that Miller died of “acute intoxication by the combined effects of heroin and fentanyl.”
The same day that Miller was found dead, Laura Brown, 35, was found dead of an apparent heroin overdose in New Milford, Connecticut. Brown was found with needles and glassine bags near her body. Several of the glassine bags were stamped with the words “Breaking Bad.” The autopsy performed on Brown’s body showed that she died of “acute heroin and fentanyl intoxication.” According to Brown’s brother, he and Brown together bought “Breaking Bad” heroin from SICA two days before Brown was found dead.
On February 2, 2014, SICA was arrested by state authorities in East Fishkill, New York, after a car in which he was riding was stopped by law enforcement. During a subsequent search of the car, law enforcement officers recovered several glassine bags stamped with a “Breaking Bad” stamp identical to the one that appears on the envelopes recovered from Thomas Miller’s bedroom.
SICA, 37, of Hopewell Junction, New York, pled guilty to one count of conspiracy to distribute heroin and fentanyl resulting in death. The offense carries a mandatory minimum penalty of 20 years in prison, a maximum penalty of life in prison, and a maximum fine of $1 million or twice the gain or loss resulting from the crime. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the Drug Enforcement Administration’s (“DEA”) Tactical Diversion Squad and the Dutchess County Drug Task Force. The DEA Tactical Diversion Squad is composed of agents and officers of the DEA, the New York City Police Department, the Westchester County Police Department, and the Town of Orangetown Police Department. The Dutchess County Drug Task Force is composed of the City of Poughkeepsie Police Department, the Town of Poughkeepsie Police Department, the East Fishkill Police Department, and the Dutchess County Sheriff’s Office. Mr. Bharara also thanked the New York State Police Forensics Unit, the Dutchess County District Attorney’s Office, the Dutchess County Sheriff’s Office, and the police department for the City of New Milford, Connecticut, for their assistance in the investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Scott Hartman and Benjamin Allee are in charge of the prosecution.