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9 June 2015
Former Lee Police Chief Convicted by Federal Jury of ExtortionRead the Press Release
BOSTON – The former chief of the Lee Police Department (LPD) was convicted today in U.S. District Court in Springfield following a three-week trial of extorting a $4,000 payment from a couple facing prostitution charges in Southern Berkshire District Court.
Joseph Buffis, 57, of Pittsfield, Mass., was convicted by a federal jury of extortion under color of official right. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Oct. 19, 2015.
As the Lee Police Chief, Buffis solicited and controlled public donations to the Edward J. Laliberte Toy Fund, a children’s holiday toy fund. On Feb. 21, 2012, Buffis extorted a $4,000 check “donation,” payable to the toy fund, from two individuals who were facing prostitution-related charges. Buffis then deposited the $4,000 check into the toy fund’s bank account and quickly withdrew $3,990 of these funds in three checks that he wrote to “Cash,” but deposited into a personal bank account that he owned with his wife. Buffis used the diverted funds to pay various personal expenses. When law enforcement commenced an investigation into this activity, Buffis repeatedly lied about the disposition of these funds.
Buffis faces a second trial on one count of mail fraud. According to the allegations of the superseding indictment, soon after Buffis became Lee Chief of Police in 2011, he arranged for the Town of Lee to provide the LPD with four iPhones – one for himself and three for other LPD officers. Rather than distribute the three iPhones to his LPD officers, Buffis gave them to his wife and their two children for their personal use. From Oct. 5, 2011 to Aug. 21, 2013, Buffis caused the Town of Lee to mail Verizon Wireless a series of checks totaling approximately $5,091 for the phones Buffis’s gave to wife and children.
Today, the jury also acquitted Buffis of three counts of wire fraud, one count of mail fraud, and seven counts of money laundering. Those charges were related to Buffis’s operation of the toy fund.
The extortion charge provides a sentence of no greater than 20 years in prison, five years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B, Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Steven H. Breslow and Deepika Shukla of Ortiz’s Springfield Branch Office.
Former Funeral Home Owner Sentenced to 21 Months in Federal Prison on Food Stamp Benefit Fraud ConvictionRead the Press Release
DALLAS — A Mansfield, Texas, woman who pleaded guilty earlier this year to one count of food stamp benefit fraud, was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Rachel Hardy, 36, was sentenced by U.S. District Judge Barbara M. G. Lynn to 21 months in federal prison and ordered to pay $76,494 in restitution. Judge Lynn ordered that she surrender to the Bureau of Prisons on August 4, 2015.
The U.S. Department of Agriculture’s (USDA) Food Stamp Program is known as the Supplemental Nutritional Assistance Program (SNAP). The Texas Health and Human Services Commission (THHSC) administers SNAP in Texas.
The investigation began in 2012 when the Southwest Region USDA, Office of the Inspector General, received a referral about an individual who was receiving SNAP benefits who had failed to disclose a change in household composition and income from the ownership of two businesses. That individual was later identified as Hardy.
The investigation revealed that Hardy and her husband, who is the father of her youngest child, were married on February 14, 2010, in Las Vegas, Nevada. On April 8, 2010, Hardy submitted a SNAP benefits application, certifying she was a “single-parent-mother,” with no income, living in a household that consisted only of her children. Hardy’s application was approved, and she began receiving SNAP benefits.
On December 1, 2010, Hardy registered with Tarrant County as the owner operator of a tax refund and estate planning business called “Mighty Dollar Tax,” in Arlington, Texas. From April 8, 2010, through June 5, 2011, Hardy completed and submitted THHSC certifications reporting no income and claiming to live alone with her children.
On February 21, 2011, Hardy purchased a 2006 H2 Hummer for $26,000 and a 2008 Mercedes Benz CL S500 sedan for $41,700; she paid for each with a cashier’s check. At the time she purchased these vehicles, Hardy reported to THHSC that she was an unemployed, single-parent-mother living alone at home with her children.
An April 19, 2011, Hardy registered with Tarrant County as the owner operator of the Johnson Family Mortuary in Fort Worth, Texas. Again, on June 14, 2011, Hardy reported to THHSC that she was an unemployed single-parent-mother living alone at home with her children.
That same day, Hardy went to the Dallas County THHSC office where she completed and submitted a THHSC Application for Assistance Form. In doing so, she certified she was a “single-parent-mother” with no income living in a household that consisted only of her children.
On February 11, 2012, Hardy purchased a 2008 Land Rover Range Rover from Park Place Motors with a $53,000 cashier’s check. A few days later, on February 22, 2012, Hardy again certified to THHSC that she was an unemployed single-parent-mother living at home with her children.
The THHSC re-certifications and interviews revealed Hardy neither claimed a spouse nor any other income provided to her, or to anyone else in the household. Hardy admits that she failed to disclose material facts to THHSC and admits unlawfully receiving SNAP benefits to which she was not entitled.
The Texas Housing and Neighborhood Services; THHSC, OIG; USDA, OIG; U.S. Department of Housing and Urban Development, OIG; and U.S. Department of Education, OIG investigated.
Assistant U.S. Attorney Aaron Wiley prosecuted.
Former D’Hanis State Bank President Pleads Guilty to Wire FraudRead the Press Release
In San Antonio today, a former D’Hanis State Bank (DSB) president Laurie Mayfield (aka “Laurie H. Scott”) admitted that she filed fraudulent bank regulating reports which overestimated the bank’s assets announced Acting United States Attorney Richard L. Durbin, Jr., Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and U.S. Secret Service Special Agent in Charge Lee Dotson.
Appearing before United States Magistrate Judge John Primomo, the 54–year-old Fredericksburg, TX, resident pleaded guilty to one count of wire fraud. According to court records, from January 2012 until September 2014, Mayfield prepared and filed false Consolidated Reports of Condition and Income (aka “Call Reports) with federal and state bank regulators on behalf of DSB which overstated the assets of DSB by approximately $830,000. By pleading guilty, Mayfield admitted that on September 16, 2014, she emailed those false reports to a prospective buyer of DSB. The buyer relied on those false DSB Call Reports in their decision to purchase DSB.
Mayfield faces up to 30 years in federal prison. She remains on bond pending sentencing scheduled for September 9, 2015, before United States District Judge Xavier Rodriguez.
The case resulted from a joint investigation by the Federal Bureau of Investigation, U.S. Secret Service, Federal Deposit Insurance Corporation (FDIC) and the Office of Inspector General for the Board of Governors of the Federal Reserve System – Consumer Financial Protection Bureau. This case is being prosecuted by Assistant United States Attorney Greg Surovic.
Former Connecticut Resident Admits Operating Investment SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSEPH T. MORRIS, 52, of Fort Lauderdale, Fla., formerly of Connecticut, pleaded guilty today in Bridgeport federal court to operating an investment scheme that defrauded individuals out of approximately $175,000.
According to court documents and statements made in court, MORRIS and two other individuals formed a company in October 2011 to develop business opportunities in Iraq. The company’s initial focus was on establishing a pizza restaurant at the U.S. Consulate compound in Erbil, Iraq, and establishing a business to distribute and install specialty window film on vehicles and at hotels, residences, and government buildings, which would protect windows and windshields from blast and breakage, and provide heat retention, ultra-violet shielding, and privacy. MORRIS was the company’s in-country manager in Iraq.
In pleading guilty, MORRIS admitted that he made numerous fraudulent representations to his co-founders regarding the restaurant and the window film business, knowing that the representations would be communicated to potential investors to induce them to invest in the company. Through the use of fraudulent emails and photographs, MORRIS falsely represented that a lease had been signed to establish a pizzeria on the U.S. consulate compound in Erbil, that renovations were underway, and that progress was being made toward completing renovations and opening the restaurant. MORRIS also falsely represented that the company had an exclusive arrangement with a specialty window film manufacturer to distribute and install the window film in all of Iraq. Based on these misrepresentations, MORRIS caused approximately a dozen investors, most of whom were U.S. military veterans, to invest approximately $175,000 in the company. Instead of using the money from investors to pay for legitimate business expenses, MORRIS diverted large sums of money for his own personal use.
The scheme was revealed in late April to early May 2012 when one of the co-founders discovered that the company did not have a lease or agreement to open and operate a pizza restaurant at the U.S. consulate compound in Erbil and that the company did not have an exclusive arrangement with a window film manufacturer to distribute and install specialty window film in Iraq.
MORRIS pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years. He is scheduled to be sentenced by U.S. District Judge Jeffrey A. Meyer on September 17, 2015.
This matter has been investigated by the U.S. Secret Service, the Wilton Police Department, and the Connecticut Financial Crimes Task Force, which includes federal, state and local law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorney Neeraj N. Patel.
Former City Employee Sentenced for Million Dollar Ink Cartridge ScamRead the Press Release
PHILADELPHIA – Calvin Duncan, 63, a former Philadelphia Water Department employee, was sentenced today to 24 months in prison and three years of supervised release for a scheme to defraud the City of Philadelphia of more than $1 million. Duncan, of Philadelphia, worked as a mailroom clerk and was responsible for purchasing supplies, including printer ink and toner cartridges, for PWD’s administrative offices. Between January 1, 2006 and January 5, 2012, Duncan ordered printer ink and toner cartridges, for which the City of Philadelphia paid approximately $1,368,091.19, falsely claiming that the cartridges were for PWD employees’ use. Instead, Duncan sold the cartridges for approximately $545,412.79 and had them shipped to his co-conspirators using PWD’s UPS shipping account. Duncan pleaded guilty, on August 9, 2013, to five counts of mail fraud.
In addition to the prison term, U.S. District Court Judge Jan E. DuBois ordered restitution in the amount of $1,368,091.19 and ordered forfeiture of $545,412.39. Duncan’s co-conspirators, Derek and Danita Willis, who own Laser Cartridge Plus, Inc. in Russellville, Arkansas, pleaded guilty on April 29, 2014. Derek Willis was sentenced to 36 months in prison; Danita Willis was sentenced to 12 months and 1 day in prison.
Amy Kurland, Inspector General for the City of Philadelphia , testified at the sentencing hearing for Derek Willis and Danita Willis and described the harm as follows:
“The City of Philadelphia could have used that money for a number of things. Approximately 500 students could have been educated. Teachers could have been hired to educate that number of students. That money would have funded the entire Fire Inspection Department at L&I for a year. The money could have also been used for equipment, for body cameras for 200 officers. …When something like this happens, when people are able to steal that amount of money from the city, it makes the citizens lose confidence in government and lose confidence in the city’s ability to function appropriately.”
The investigation was initiated by the Philadelphia Office of the Inspector General and included the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Tomika N. Stevens Patterson.
Former CEO of Sommet Group Sentenced to 20 Years in Prison for $25 Million Fraud SchemeRead the Press Release
L. Brian Whitfield, 49, formerly of Franklin, Tennessee, was sentenced yesterday to serve 20 years in prison, announced David Rivera, United States Attorney for the Middle District of Tennessee. On November 7, 2014, a jury found Whitfield guilty of conspiracy, wire fraud, theft from an employee benefit program, filing a false tax return, and money laundering.
Today’s sentence, handed down by U.S. District Court Judge Todd J. Campbell, also included imposition of a $1.8 million money judgment and a term of 3 years of supervised release. Judge Campbell also ordered Whitfield to pay more than $25.9 million in restitution.
“This sentence demonstrates that those at the highest levels of corporations, especially chief executives whose criminal schemes rob the innocent of their health, financial future and economic stability, will not find shelter in false assertions of a failing economy,” said United States Attorney David Rivera. “This defendant’s massive fraud scheme harmed more than a thousand victims, and this sentence serves as an appropriate punishment.”
During the trial before Judge Campbell last year, the evidence established that Whitfield controlled the finances and funds of the Sommet Group LLC, a payroll processing company that operated in Franklin, Tennessee. From 2008 until 2010, Whitfield diverted millions of dollars of client funds that had been earmarked to fund client employee retirement accounts, to pay health claims, and to pay taxes. Instead of using these client funds as Sommet had promised, Whitfield diverted millions of dollars to prop up affiliated companies that he controlled and spent millions of dollars to acquire the naming rights of Nashville’s professional hockey arena, which came to be known as the Sommet Center. Whitfield also diverted client money to pay for personal expenses including purchasing a $430,000 houseboat, a $99,000 ski boat, luxury clothing and the construction of a $150,000 pool in his backyard.
As a result of Whitfield’s fraud, retirement funds were not fully deposited into the accounts of employees whose paychecks were processed by Sommet, medical and prescription-drug claims by employees were not fully paid, and taxes owed by clients to federal, state, and local governments went unpaid.
The evidence at trial also proved that Whitfield vastly underreported wages and taxes on Sommet’s quarterly employer tax return that he personally prepared and filed. Across six quarters from 2008 – 2010, Sommet paid more than $83 million in wages to its employees and the employees of its clients, but Whitfield reported less than $4 million in wages to the IRS, resulting in an underpayment of more than $20 million in taxes.
In July 2013 D. Edwin Todd, a part owner of Sommet, pleaded guilty to one count of conspiracy in this case, and Marsha Whitfield, Sommet’s Vice President of Payroll, pleaded guilty to one count of conspiracy and one count of wire fraud. Both Todd and Marsha Whitfield await sentencing.
This case was investigated by agents with the Internal Revenue Service- Criminal Investigation, the Federal Bureau of Investigation and the Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Assistant U.S. Attorneys William F. Abely, Sandra G. Moses, and Stephanie N. Toussaint.
Former Athol City Clerk Sentenced to Prison for EmbezzlementRead the Press Release
COEUR D'ALENE - Sally R. Hansen, 39, the former Athol City Clerk, was sentenced today to 48 months in prison followed by three years of supervised release for embezzlement, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Hansen to pay a special assessment in the amount of $15,000, and to pay $434,112 in restitution to the City of Athol. Hansen pleaded guilty to the charge on January 21, 2015.
According to court documents, during the time of her employment, Hansen used the wires and fraudulently took $417,879 from the City of Athol. She did this by writing fraudulent checks to herself and her husband and using the wires to transfer money between different city accounts.
“The crime Ms. Hansen committed greatly affected the citizens and taxpayers of Athol,” said Olson. “Her repeated violations of her oath of office and responsibilities to be a good steward of the public trust have appropriately ended with a prison sentence.”
The case was investigated by Kootenai County Sheriff and U.S. Secret Service (USSS).
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 2,700 mortgage fraud defendants.
Florida Man Charged with Using Bogus Transportation Company to Defraud New Jersey Factoring Business Out of $220,000Read the Press Release
NEWARK, N.J. - A Seminole, Florida, man was arrested at his home by FBI agents this morning for allegedly using phony invoices from his transportation company to obtain $220,000 from a New Jersey-based factoring business, U.S. Attorney Paul J. Fishman announced.
Karl Stehlin, a/k/a “Mark Sawyer,” 60, was charged by indictment with five counts of wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Thomas B. McCoun III in Tampa, Florida, federal court.
According to the indictment:
From June 2014 through September 2014, Stehlin allegedly defrauded a Bergen County, New Jersey, factoring business that purchased accounts receivable in return for short term financing. Stehlin created a bogus Idaho-based company, Sawyer Express Transportation Inc., and emailed accounts receivable invoices to the factoring company for transportation services that were never provided. As a result, Stehlin was able to defraud the factoring company out of $220,000 in advance payment on those invoices.
The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s arrest. He also thanked special agents of the FBI Tampa Division, under the direction of Special Agent in Charge Paul Wysopal, for their assistance.
The charges in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Lakshmi Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
First Cousins from La Plant Sentenced for IncestRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a La Plant, South Dakota, man and woman, convicted of Incest, were sentenced by U.S. District Judge Roberto A. Lange.
Nicholas Ray White Eagle, age 28, was sentenced to 12 months and one day in custody, followed by 1 year of supervised release. Fawn Lynn Scott, age 22, was sentenced to 4 months in custody, followed by 2 years of supervised release. Both were ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
White Eagle and Scott were indicted by a federal grand jury on January 14, 2015, and pled guilty to Incest in March of 2015.
On or about October 21, 2013, first cousins White Eagle and Scott had consensual sexual intercourse that produced a child with a genetic disability. This is the third child born to these two cousins. At the time of the sexual intercourse, White Eagle and Scott were not legally married and were within the degrees of consanguinity with each other within which a marriage was void.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
White Eagle and Scott were immediately turned over to the custody of the U.S. Marshals Service.
Felon who Recruited and Trained Juveniles for Bank Robberies Sentenced to Seven Years in PrisonRead the Press Release
A 31-year-old King County man was sentenced today in U.S. District Court in Seattle to seven years in prison for his involvement in eight bank robberies in Western Washington, announced U.S. Attorney Annette L. Hayes. VINCENT G. THOMPSON, recruited juveniles who he and a partner trained to commit bank robberies. In addition, THOMPSON and his partner, Robert Cal Adams, robbed Chase Bank on Canyon Road East in Puyallup on April 14, 2014. At sentencing U.S. District Judge John C. Coughenour said the sentence was appropriate because THOMPSON involved juveniles in the crimes. Judge Coughenour ordered THOMPSON to serve three years of supervised release following the prison sentence.
On January 26, 2015, THOMPSON pleaded guilty to two counts of bank robbery. THOMPSON’s co-defendant, Robert Adams was previously sentenced to 120 months for his involvement in a string of bank robberies where three juveniles were provided with threatening notes and instruction on how to execute the bank robberies. Those robberies include the April 1, 2014 robbery of Chase Bank on Pacific Avenue in Tacoma; the April 7, 2014 robbery of US Bank on 176th St., Puyallup, Washington; the April 9, 2014 robberies of Alaska Federal Credit Union branches in Renton and Kent, Washington; the April 9, 2014 robbery of US Bank on Pacific Highway in Des Moines, Washington; the April 10, 2014 robbery of Wells Fargo on 72nd Street East, Tacoma; the April 11, 2014 robbery of BECU on Pacific Highway South, Kent, and the April 11, 2014 robbery of Bank of America on SW 336th St., Federal Way, Washington.
In asking for the seven year sentence prosecutors wrote to the court, “Thompson’s choice to assist in sending juveniles to rob banks presents an extraordinary risk to the community, bank tellers, security guards, law enforcement and – most significantly – the juveniles themselves. This was quite literally a tragedy waiting to happen…. for an adult to encourage juveniles to engage in serious criminal actions – simply because the adult wanted to be ‘paid’ without working – is deserving of a significant period of incarceration.”
The case was investigated by the FBI’s Seattle Safe Streets Task Force, with assistance from multiple local police departments and the Washington State Department of Corrections.
The case was prosecuted by Special Assistant United States Attorney Stephen Hobbs. Mr. Hobbs is a Senior Deputy King County prosecutor specially designated to prosecute cases in federal court.
Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3061
United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictment(s) against the following:
Ten Individuals Charged with Conspiracy to Defraud the United States. The following individuals were charged in a single-count Indictment with conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371.
Richard K. Rouse, age 44, of Donalds, South Carolina
Bernard Williams, age 50, of Clinton, South Carolina
Carlton C. Fuller, age 47, of Cross Hill, South Carolina
Earl J. Stewart, age 57, of New Orleans, Louisiana
James W. Reeder, age 45, of Joanna, South Carolina
Paul J. Gibson, age 60, of Johnston, South Carolina
Willie L. Fuller, age 58, of Greenwood, South Carolina
Leonard T. Hawthorne, age 50, of Clinton, South Carolina
Meredith Q. Williams, age 52, of Greenwood, South Carolina
Clarence Holloway, age 58, of Troy, South Carolina
The maximum penalty each could receive is five years imprisonment and a fine of $250,000.00. The case was investigated by agents of the Department of Veterans Affairs, Office of Inspector General, and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.
Anderson County Woman Indicted for Delay of Mail. Georgia L. Coker, age 22, of Belton, South Carolina, was charged in a single-count Indictment with delay of mail by a postal employee, a violation of Title 18, United States Code, Section 1703. The maximum penalty Coker could receive is five years imprisonment and a fine of $250,000.00. The case was investigated by agents of the United States Postal Service, Office of Inspector General, and is assigned to Assistant United States Attorney David C. Stephens of the Greenville office for prosecution.
Greenville Man Indicted on Drug Charges. Keith E. Smith, age 36, of Greenville, South Carolina, was charged in a single-count Indictment with possessing with intent to distribute controlled substances, a violation of Title 21, United States Code, Section 841(a)(1). The maximum penalty Smith could receive is a minimum term of imprisonment of ten years and a maximum term of life imprisonment and a fine of $8,000,000. The case was investigated by agents of the Drug Enforcement Administration and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.
The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Father, Son Indicted for $862,000 Fraud Against FarmersRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a father and son in northern Missouri were indicted by a federal grand jury today for their roles in a conspiracy to defraud farmers in 10 states of nearly $862,000.
Mark Henry, Sr., 50, of Cameron, Mo., and his son, Mark Henry, Jr., 28, of Lucerne, Mo., were charged in a 15-count indictment returned by a federal grand jury in Kansas City, Mo.
According to today’s indictment, the Henrys represented themselves as farmers and advertised on Craigslist and other places to sell hay to farmers throughout the United States who were experiencing drought conditions between January 2010 and October 2012. They sold more than $3.2 million of hay, which was advertised as “excellent brome, orchard and timothy hay . . . big heavy bales.” According to the indictment, however, most of the hay consisted of weeds, sticks, bushes, small trees, briars, thistles and woody stems; some of it was moldy and of very poor feed quality.
Today’s indictment also alleges that the Henrys purposely shorted farmers and failed to provide all or a portion of the hay to their customers in Missouri, Texas, Oklahoma, Iowa, Colorado, Nebraska, Kansas, Arkansas, Wyoming and New Mexico. They allegedly demanded farmers prepay for the hay and failed to refund the prepayment to farmers who did not receive hay or who received poor quality hay. The Henrys also allegedly failed to pay for hay they had purchased from other farmers for resale.
In one incident cited by the indictment, a customer from Colorado prepaid $5,000 for 60 bales of hay. On Aug. 11, 2012, she arrived at a field and began testing the bales as they were being loaded. Because some bales tested for high moisture content, they were set aside. Mark Henry, Sr., arrived at the field, the indictment says, and began to yell at them. He told her she could not pick and choose what bales she wanted. He told her, if you take one; you take them all. She told Henry, Sr. the bales she set aside would mold, but he responded he was not going to put up with them picking and choosing the bales and ordered them off his property. She asked for her money back, but he told her he did not have his checkbook with him and his son was in Columbia, Mo. The customer’s son told Henry, Sr., they were not leaving until they got their hay bales or their money back. Henry, Sr. allegedly went to his pickup and obtained a claw hammer and advanced towards the son, threatening to bash his head in. They got into their trucks and left without loading the 60 bales she purchased.
Another victim from New Mexico signed a contract for 6,000 bales and wired $195,000 for 3,000 bales in advance. The customer received 90 bales of very poor quality hay, according to the indictment, for a total loss of $195,975 (including trucking and other expenses).
The hay hauling was advertised at $2.50 per load mile to deliver the hay, which was much less than normally charged. According to the indictment, however, those farmers who contracted with the Henrys to haul the hay were charged almost 40 percent more than the advertised price, and the Henrys failed to pay two trucking companies for the hauling: Glaser Trucking Service ($53,400) and Action Transit Company ($4,400), even though the money was collected from the farmers.
In addition, the indictment says, the Henrys advertised the sale of cattle on Craigslist between December 2012 and February 2013. The cattle were advertised as “front pasture” young cows, from the age of four to six. According to the indictment, however, most of the cows were much older and worth less than younger cows. The Henrys sold 389 head of cattle to farmers from Missouri, Kansas, Illinois and Iowa for approximately $538,700. The indictment alleges that approximately $59,700 was fraudulent because the cows were much older and worth less than charged.
According to the indictment, a licensed veterinarian examined 221 of the cows and determined that the age and/or condition of 199 cows was misrepresented. The majority of the cows were worth less than the price charged, the indictment says. The price on the majority of the cows allegedly was overinflated approximately $300 to $400 each.
In addition to the conspiracy, the Henrys are charged together in seven counts of wire fraud and seven counts of mail fraud.
Today’s indictment also contains a forfeiture allegation, which would require both defendants to forfeit to the government any property obtained as a result of the alleged violations, including a money judgment of $861,932.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the FBI, the Missouri State Highway Patrol’s Division of Drug and Crime Control, the Putnam County, Mo., Sheriff’s Department and the Putnam County, Mo., Prosecutor’s Office.
Father in Father-Son Sex Trafficking Operation Sentenced to 13 Years in PrisonRead the Press Release
COLUMBUS – Keith A. Arrick Sr., 47, of Ft. Mitchell, Kentucky was sentenced in U.S. District Court today to 13 years in prison for sex trafficking by force, fraud or coercion.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine and members of the Central Ohio Human Trafficking Task Force, including Marlon V. Miller, Special Agent in Charge, U.S. Homeland Security Investigations, Colonel Paul Pride of the Ohio State Highway Patrol and Columbus Police Chief Kim Jacobs announced the plea entered today before Senior U.S. District Judge Peter C. Economus.
The investigation by the Central Ohio Human Trafficking Task Force found that between September 2013 and February 2014, Arrick Sr. used various hotels in the Columbus area to harbor women, including a minor female, to engage in commercial sex acts for the financial benefit of the defendant. He recruited customers through internet websites by posting photos of the women or others who resembled the women, instructing the women how much to charge for the various acts then kept a portion of the money for himself, and provided the women with illegal narcotics, including heroin. The investigation found that one victim was brought to Columbus from Kentucky. Arrick Sr. used physical violence and threats of physical violence if the victims indicated they wished to stop performing commercial sex acts.
Arrick Sr. pleaded guilty to sex trafficking by force, fraud or coercion in September 2014.
Arrick Sr.’s son, Keith A. Arrick Jr., 22, of Columbus, Ohio pleaded guilty in July 2014 to sex trafficking of children. He was sentenced to10 years in prison.
U.S. Attorney Stewart commended the cooperative investigation by the Central Ohio Human Trafficking Task Force, which was formed in 2012 and is part of the Ohio Attorney General’s Ohio Organized Crime Investigations Commission, and which also includes authorities from the Attorney General's Bureau of Criminal Investigation (BCI), U.S. Homeland Security Investigations, Columbus Division of Police, Ohio State Highway Patrol, Powell Police Department, Federal Bureau of Investigation and the Delaware County Prosecutor's Office. Assistant U.S. Attorney Heather Hill is representing the government in this case.
Environmental Contractor Sentenced to Probation with Home Detention for Defrauding the NavyRead the Press Release
PITTSBURGH - A Washington County resident has been sentenced in federal court to three years of probation, with the first 12 months to served on home detention, on his conviction of wire fraud, United States Attorney David J. Hickton announced today.
Senior United States District Judge Terrence F. McVerry imposed the sentence on Barry Kent Peterson, 48, of Canonsburg, Pa.
According to information presented to the court, Peterson was the Vice President of Fullard Environmental Controls ("FEC") in Ford City, and that FEC performed demolition services in 2007 for the United States Department of the Navy in Beaufort, South Carolina. Peterson, along with another person employed at FEC, defrauded the government by submitting false information to the Department of the Navy regarding the costs that were incurred by FEC to perform the demolition services. Peterson, through FEC, defrauded the government in the amount of approximately $772,701.10. As part of the sentence, Judge McVerry ordered Peterson to forfeit $772,701.10 to the United States government.
During the sentencing hearing, Judge McVerry stated that the sentence of probation, rather than a sentence of imprisonment was due, in part, to Peterson’s extraordinary family hardships relating to the medical conditions of two of Peterson’s children.
Assistant United States Attorney Shaun E. Sweeney prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Defense, Office of Inspector General and Naval Criminal Investigative Service for the investigation leading to the successful prosecution of Peterson.
East Hampton Woman Sentenced to More Than 5 Years in Prison for Real Estate Appraisal SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ANN HILS, 55, of East Hampton, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 63 months of imprisonment, followed by five years of supervised release, for operating a real estate appraisal scheme.
According to court documents and statements made in court, HILS was not a provisional or certified real estate appraiser in the state of Connecticut at any time. Between approximately December 2006 and March 2008, HILS conspired with her daughter, Brandy Gomez, to obtain more than $47,000 in real estate appraisal fees to which they were not entitled. As part of the scheme, HILS and Gomez knowingly submitted falsified work logs to the Connecticut Department of Consumer Protection purporting to show that Gomez, a provisional appraiser, completed dozens of real estate appraisals under the supervision of a certified appraiser when, in fact, Gomez had not performed such work and was not entitled to such appraisal fees.
HILS also used the individual names, certified appraiser license numbers, business names, and, in some instances, signatures, of three certified appraisers without their authorization in dozens of fraudulent real estate appraisals. HILS submitted the appraisals to co-conspirators who used the appraisals in support of obtaining fraudulent mortgages for straw borrowers. The appraisals contributed to more than $2.5 million in actual or intended losses to various mortgage lenders.
HILS was ordered to pay $47,908 in restitution.
On August 22, 2014, HILS pleaded guilty to one count of conspiracy to commit mail and bank fraud.
On March 19, 2014, Gomez pleaded guilty to the same charge. On May 5, 2015, she was sentenced to one day of imprisonment and five years of supervised release, and was ordered to pay $47,908 in restitution.
This case was investigated by the Federal Bureau of Investigation, U.S. Department of Housing and Urban Development – Office of Inspector General, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney David T. Huang.
Dickson-Based Grease Hauling Company and Its President Plead Guilty to Violating the Clean Water ActRead the Press Release
Southern Grease Company, a grease hauling company based in Dickson, Tennessee, and its president, George Butterworth, 75, of Dickson, pleaded guilty today to charges arising from the illegal disposal of waste grease into municipal sewer systems, announced David Rivera, United States Attorney for the Middle District of Tennessee.
Specifically, Southern Grease and Butterworth pleaded guilty to violating the Clean Water Act, conspiring to violate the Clean Water Act, and making false statements to agents with the Environmental Protection Agency. Southern Grease Company also pleaded guilty to one count of mail fraud, arising from its fraudulent promises to customers and municipalities regarding the disposal of waste grease.
“The United States Attorney’s Office and its law enforcement partners are committed to vigorously prosecuting those who knowingly violate environmental laws,” said United States Attorney Rivera. “This case should send a message that corporations and corporate officers that pursue profit at the expense of municipal resources and the public’s right to a clean environment will face serious felony convictions as well as significant financial penalties.”
In a hearing before U.S. District Court Judge Aleta A. Trauger, the defendants acknowledged the following: Southern Grease contracted with restaurants and other customers in Tennessee and Kentucky to collect and dispose of the customers’ waste grease, otherwise known as FOG (Fats, Oils and Grease) waste. From approximately September 2011 through December 2013, Southern Grease, at the direction of Butterworth, charged its customers for the collection and proper disposal of waste grease, but failed to dispose of the collected grease at an appropriate facility as promised. Instead, Southern Grease illegally discharged waste grease into grease interceptors that were connected to the municipal sewer systems. This illegal dumping of grease caused damage to municipal sewer systems, including by blocking pipes and by clogging the operation of pump stations. For example, the defendants admitted that, in December 2013, it dumped waste grease into a grease interceptor in Clarksville, Tennessee, which resulted in the obstruction of pipes within the Clarksville sewer system and damage to a Clarksville pumping station, the operation of which was interrupted for cleaning and repairs.
The defendants also admitted providing false information to municipalities and making false statements to EPA agents regarding the final disposal location of the waste grease collected by Southern Grease.
In December 2014 federal agents seized more than $391,000 that had been involved in or derived from federal criminal offenses relating to the illegal dumping of waste grease by Southern Grease.
Last month, George McGee, 51, of Dickson, also pleaded guilty to violating the Clean Water Act, to conspiring to violate the Clean Water Act, and to making false statements to agents with the EPA. McGee had previously served as Operations Manager for Southern Grease.
Butterworth and McGee each face up to 5 years in prison for each count of conviction, as well as a criminal fine. Southern Grease faces criminal forfeiture as well as maximum criminal fines of up to $250,000 on three counts of conviction and up to $50,000 per day of violation of the Clean Water Act. The defendants will also be sentenced to pay restitution to the City of Clarksville and Dickson County. All will be sentenced by Judge Trauger on September 14, 2015.
The case was investigated by the EPA Criminal Investigation Division, with assistance from the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Delaware Sex Offender Indicted for Producing Child Porn, Illegal Sexual ActivityRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Delaware man with a prior conviction for child sexual abuse was indicted by a federal grand jury today for using the Internet to entice a Richmond, Mo.-area teenager to engage in illicit sexual activity, and for producing and possessing child pornography.
Aaron T. Fletcher, 39, of Seaford, Del., was charged in a three-count indictment returned by a federal grand jury in Kansas City, Mo. Fletcher was convicted in Delaware in 2000 of raping a victim under 16 years of age.
Today’s indictment alleges that Fletcher enticed a minor to engage in illicit sexual activity between Feb. 1, 2015, and March 30, 2015.
Fletcher is also charged with one count of using a minor to produce child pornography between March 27 and 30, 2015, and one count of possessing child pornography on March 30, 2015.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney David Luna. It was investigated by the Richmond, Mo., Police Department, the Ray County, Mo., Sheriff’s Department, the Jackson County, Mo., Sheriff’s Department and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Collier County Man Sentenced to Six Years in Connection with Sunshine Pharmacy Health Care FraudRead the Press Release
Fort Myers, Florida – Senior United States District Judge John E. Steele has sentenced Adam Parrish (35, Naples) to six years in federal prison for conspiracy to commit health care fraud, aggravated identity theft, and improperly using a DEA Registration Number. He pleaded guilty on February 18, 2015.
According to his plea agreement, from February 2009 through July 2012, Adam Parrish conspired with Delmer Holmes Parrish and Patricia Parrish to defraud federal health care benefit programs out of approximately $351,358. All three, along with others, used Sunshine Pharmacy and Sunshine Solutions in Naples to further their unlawful scheme to defraud the government. The co-conspirators submitted and caused claims to be submitted for reimbursement from the Medicaid, Medicare, and TRICARE programs for prescriptions that had not been filled or provided to beneficiaries and recipients, including prescriptions for patients that had not been written or authorized by any duly licensed physician. In addition, they submitted and caused claims to be submitted for beneficiaries and recipients who were deceased. In carrying out the offenses, the conspirators also used the means of identification of individuals who were enrolled in the Medicaid, Medicare, or TRICARE programs without their knowledge or consent. As a result of the scheme, the government was defrauded out of approximately $351,358.
In addition, Adam Parrish admitted that he had unlawfully used the names of three federal health care beneficiaries to commit health care fraud. He also admitted that he had used two different physicians’ DEA Registration Numbers, on three occasions, to acquire or obtain controlled substances from pharmacies in Collier County.
Delmer Parrish and Patricia Parrish were sentenced for their role in the conspiracy in April 2014. Delmer Parrish, who was a licensed pharmacist and owner of Sunshine Pharmacy, surrendered his pharmacist license and was sentenced to 24 months in federal prison. Patricia Parrish, Delmer Parrish’s mother, was sentenced to house arrest for 120 days, to be followed by three years of probation. In addition, Delmer and Patricia Parrish paid $351,358.14 in restitution to the United States at the time of their sentencing.
This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Department of Defense, Defense Criminal Investigative Service; and the Drug Enforcement Administration, with assistance from the Naples Police Department; Collier County Sheriff's Office; and the U.S. Secret Service. It was prosecuted by Assistant United States Attorney David G. Lazarus.
Charleston man pleads guilty to unlawfully possessing a stolen firemanRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that a man from Kanawha County pleaded guilty today in federal court in Charleston to unlawfully possessing a stolen firearm. Joshua Devere, 33, of Charleston entered a guilty plea to possession of a stolen firearm. On September 27, 2013, Devere stole a Remington 12-guage shotgun from the Trading Post sporting goods store in Marmet, Kanawha County, West Virginia.
Devere faces up to 10 years in federal prison when he is sentenced on September 9, 2015.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Marmet Police Department. Assistant United States Attorney Joshua C. Hanks is in charge of the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Carmel Resident Pleads Guilty to Conspiring to Distribute Crack CocaineRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Fern Dowling, 41, of Carmel pleaded guilty yesterday in U.S. District Court to conspiracy to possess with the intent to distribute and to distribute 280 grams of a mixture or substance containing cocaine base, commonly referred to as “crack.”
According to court records, between January 2010 and December 2013, the defendant sold crack in Penobscot County and elsewhere. She sold half-gram bags for $50 and gram bags for $100. She transferred the proceeds of her sales to her source of supply in the New Haven, Connecticut area and got cash and crack in exchange. The crack was transported from Connecticut to the Bangor area by other conspirators.
The defendant faces a minimum of 10 years and up to life in prison and a $10,000,000 fine. She will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the Maine Drug Enforcement Agency and the Bureau of Alcohol, Tobacco, Firearms and Explosives (New Haven Office).
Canadian Woman Sentenced for Identity TheftRead the Press Release
PORTLAND, Ore. - Carolyn Gallagher of Canada was sentenced today for the theft of at least 28 Forms I-9 from Urban Outfitters, where she once worked as a manager. Gallagher previously pleaded guilty to identity theft, admitting to stealing Forms I-9 from Urban Outfitters and selling them, knowing that false tax returns would be filed in the names of her victims. Gallagher appeared today before the Honorable Robert E. Jones and was sentenced to 12 months and a day in prison and ordered to forfeit $37,475—the total fraudulent refunds paid out by the Treasury based on the false tax returns in the names of her victims.
Gallagher’s co-conspirators, Jheraun Dunlap, Ernest Bagsby, Jermaine Moore, and Brandi McCall, who conspired in the preparation and filing of over 200 false tax returns, including 28 false tax returns in the names of Gallagher’s victims, were previously sentenced by the Honorable Robert E. Jones to 65 months, 51 months, 45 months, and 12 months and a day in prison.
This case was investigated by the IRS Criminal Investigation Stolen Identity Refund Fraud Task Force. Trial Attorneys Leslie A. Goemaat and Lori A. Hendrickson of the Justice Department’s Tax Division are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
California Man Sentenced for Bank Robbery in Twin FallsRead the Press Release
BOISE - Shawn Smith, 19, of Salinas, California, was sentenced today to 119 months in prison followed by four years of supervised release for bank robbery by use of dangerous weapons, and brandishing of firearms during the commission of a felony offense, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered forfeiture of any interest in the $7,351 stolen from the bank, and forfeiture of the three firearms involved in the bank robbery. Smith pleaded guilty on April 20, 2015.
According to court documents, on November 20, 2014, Smith and his co-defendant Juan Loredo, 22, also of Salinas, California, robbed the First Federal Bank in Twin Falls, Idaho. As the men entered the bank, Loredo brandished a sawed-off shotgun, and Smith brandished a semi-automatic pistol at the tellers and manager. They stole approximately $7,000, all of which was recovered by police when the men were arrested after a high-speed vehicle chase, and foot pursuit.
Sentencing for Loredo has been set for June 22, 2015, before Judge Lodge.
“Those who use firearms to commit violent crimes, such as bank robberies, will be vigorously investigated and prosecuted,” said Olson. “Innocent people who simply go to work each day in commerce, or who go into our banks to transact their daily business, must not be put in fear for their lives.”
The men were apprehended by, and the case was investigated by, the Twin Falls Police Department. The Bureau of Alcohol, Tobacco and Firearms assisted in the investigation and prosecution of these offenses.
Augusta Man Sentenced to Four Years for Leading Mail Theft ConspiracyRead the Press Release
Contact: Jim Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Ryan Pomerleau, 32, of Augusta, Maine was sentenced yesterday in U.S. District Court by Judge John A. Woodcock, Jr. to four years in prison and three years of supervised release for his role in a conspiracy to steal mail. He was also ordered to pay $87,752.22 in restitution. On January 14, 2015, Pomerleau pled guilty to conspiring to steal mail and theft of mail.
Court records reflect that in 2014, U.S. Postal Inspectors learned that Pomerleau had stolen mail, altered checks taken from that mail and enlisted others to cash the altered checks at banks in the Augusta area. Execution of a search warrant at a hotel room in Seabrook, New Hampshire resulted in the seizure of counterfeit checks, typewriters, tools used to alter checks and other evidence linked to Pomerleau. Pomerleau later admitted to Postal Inspectors that he possessed check writing software, check altering equipment and blank checks.
The investigation was conducted by the U.S. Postal Inspection Service and the Augusta, Portland, Saco and Scarborough Police Departments.
Armed Felon Who Led Police on Interstate Chase Sentenced to 96 MonthsRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that James Marcus Lloyd, III, age 41, from Charleston, South Carolina was sentenced today by the Honorable Leslie J. Abrams, United States District Judge in Macon, Georgia. Mr. Lloyd was sentenced to 96 months in prison for being a felon in possession of a firearm. He was convicted by jury on March 4, 2015. This is his third federal conviction-he was previously convicted in federal court of cocaine distribution in 2000 and being a felon in possession of a firearm in 2005.
On June 24, 2013, Mr. Lloyd was stopped by a deputy with the Greene County Sheriff’s Office on Interstate 20 for several traffic violations. As the deputy stepped from his police car, Mr. Lloyd drove off, leading the police on a high-speed chase. During the chase, which reached speeds of 95 miles per hour, Mr. Lloyd passed numerous vehicles in the emergency lane, including semi-trailer tanker trucks. Eventually, Mr. Lloyd abandoned his car in the median of the Interstate and fled on foot before being caught and arrested by the police. In the path that Mr. Lloyd ran, a short distance from his car, the police found a loaded semi-automatic 9mm pistol.
“Mr. Lloyd seems determined to be armed, with this being his second federal conviction for this offense,” said U.S. Attorney Michael J. Moore. “He is also dangerous, putting in jeopardy the lives of himself, the officers trying to apprehend him, and anyone who had the misfortune to be on the road at the time of his latest arrest. He is precisely the sort of person this statute was passed to protect us against. It is good to know society will be free of the threat he poses for the next eight years.”
The case was investigated by the Greene County Sheriff’s Department and the Bureau of Alcohol, Tobacco, and Firearms (ATF). Assistant United States Attorneys Tamara Jarrett and Peter Leary prosecuted the case on behalf of the Government.
Inquiries regarding the case should be directed to Pam Lightsey at the United States Attorney’s Office at 478-752-3511.
3 Involved in Inland Empire Loan Modification Scam That Targeted Financially Distressed Homeowners Guilty of Federal Fraud ChargesRead the Press Release
RIVERSIDE, California – A federal jury today convicted three defendants who worked at a Rancho Cucamonga business that offered bogus loan modification programs to thousands of financially distressed homeowners who lost more than $7 million when they paid for services, including loan modifications, that were never provided.
The three Southland residents found guilty today of federal fraud charges were associated with a telemarketing operation known under a series of names – including 21st Century Legal Services, Inc. – that bilked more than 4,000 homeowners across the nation, many of whom lost their homes to foreclosure.
The defendants found guilty today are:
Christopher Paul George, 45, Rancho Cucamonga, a co-owner of 21th Century, who was found guilty of one count of mail fraud affecting a financial institution, three counts of wire fraud, two counts of wire fraud affecting a financial institution, and one count of conspiracy to commit mail and wire fraud;
Crystal Taiwana Buck, 40, of Long Beach, a sales “closer,” who was convicted of three counts of mail fraud; and
Albert DiRoberto, 62, of Fullerton, who handled both sales and marketing – which included making a commercial for 21th Century and preparing talking points to respond to negative publicity – and who was found guilty of one count of mail fraud affecting a financial institution and two counts of wire fraud affecting a financial institution.
As a result of today’s guilty verdicts, George faces a statutory maximum sentence of 170 years in federal prison, Buck faces a statutory maximum sentence of 60 years in federal prison, and DiRoberto faces a statutory maximum sentence of 90 years in federal prison. All three defendants are scheduled to be sentenced on August 31 by United States District Judge Virginia A. Phillips.
With today’s guilty verdicts, a total of 11 defendants linked to 21st Century have been convicted of federal fraud charges as a result of an investigation conducted by the Federal Bureau of Investigation; IRS - Criminal Investigation; the United States Postal Inspection Service; the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Federal Housing Finance Agency, Office of Inspector General.
During an 18-month period that began in the middle of 2008, a Rancho Cucamonga woman – Andrea Ramirez, 47, who previously pleaded guilty to conspiracy to commit mail fraud and wire fraud – operated 21st Century, which defrauded financially distressed homeowners by making false promises and guarantees regarding 21st Century’s ability to negotiate loan modifications for homeowners. Employees of 21st Century made numerous misrepresentations to victims during the course of the scheme, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the United States government. Victims were generally instructed to stop communicating with their mortgage lenders and to cease making their mortgage payments.
George was a co-owner of 21st Century who acted as a sales manager for the company, and ran his own sales office there for several months. George instructed 21st Century employees to make misrepresentations to distressed homeowners, including guaranteeing that 21st Century would obtain loan modifications and telling homeowners that payments made to 21st Century would go towards homeowners’ mortgages. “Members of the conspiracy preyed upon homeowners who were in desperate financial straits by making promises they had no intention of keeping,” said Acting United States Attorney Stephanie Yonekura. “The impact on victim homeowners across the country was severe, and it’s gratifying to see justice served in this case.”
Ramirez, 21st Century co-owner George and the other 21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings, and the company controlled websites that advertised loan modification services. Once they contacted the distressed homeowners, according to the evidence presented at trial, Ramirez and other 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. Ramirez and other 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, Ramirez and other 21st Century employees would tell homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when in fact Ramirez, George and their co-defendants simply were pocketing the homeowners’ money.
“George, the owner of 21st Century, and his co-conspirators were convicted today following a five-week jury trial for swindling more than 5,000 struggling homeowners out of approximately $7 million using deceit and lies to obtain money for loan modifications which were represented as being affiliated with federal housing aid programs,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “The defendants’ sole goal was getting money from homeowners, and they did and said whatever it took to make that happen. SIGTARP and our law enforcement partners will put an end to schemes that prey on struggling homeowners by falsely claiming to be associated with TARP’s housing programs, and perpetrators of such schemes will be brought to justice for their crimes.”
David Bowdich, Assistant Director in Charge of the FBI’s Los Angeles Field Office, commented: “Today’s conviction is a significant step in our effort to bring justice to victims of mortgage fraud. Mr. George and his co-conspirators were solely motivated by profit and preyed on financially distressed homeowners, in an effort to line their own pockets. This should serve as a reminder that no one is above the laws of this country, and the FBI and our law enforcement partners will continue to root out fraud wherever it is found.”
Erick Martinez, Special Agent in Charge of IRS - Criminal Investigation’s Los Angeles Field Office said, “Using the guise of a federally sponsored loan modification program, the defendants preyed on financially desperate homeowners struggling to keep a roof over their head. As today’s verdicts show, those who find ways to fraudulently benefit from government programs meant to help distressed homeowners keep their homes will be brought to justice.”
Robert Wemyss, Inspector in Charge of the U.S. Postal Inspection Service – Los Angeles Division, stated: “Fraudulent mortgage fraud schemes affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes. The U.S. Postal Inspection Service will continue to investigate these crimes to protect consumers and our nation's mail system from being used for illegal or dangerous purposes."
The jury that returned guilty verdicts today also acquitted George of four counts, and Buck and DiRoberto were found not guilty of eight counts.
In addition to Ramirez and the three found guilty today, seven other defendants previously pleaded guilty. They are:
Michael Bruce Bates, 64, of Moreno Valley;
Michael Lewis Parker, 37, of Pomona;
Catalina Deleon, 38, of Glendora;
Hamid Reza Shalviri, 53, of Montebello;
Yadira Garcia Padilla, 38, of Rancho Cucamonga;
Mindy Sue Holt, 55, of San Bernardino; and
Iris Melissa Pelayo, 45, of Upland.
Ramirez and the other defendants who previously pleaded guilty are scheduled to be sentenced by Judge Phillips over the coming months.
Release No. 15-057
8 June 2015
Wichita Man Pleads Guilty in Plot to Explode Car Bomb at AirportRead the Press Release
WICHITA, KAN. - A Wichita man pleaded guilty to attempting to explode a car bomb at the airport in Wichita, Kan., U.S. Attorney Barry Grissom and John Carlin, Assistant Attorney General for National Security, announced today.
Terry Lee Loewen, 59, Wichita, Kan., pleaded guilty Monday to one count of attempting to use a weapon of mass destruction. Loewen was arrested in December 2013 when he tried to enter the grounds of the Wichita Mid Continent Airport for the purpose of exploding a bomb. (The airport recently was renamed Wichita Dwight D. Eisenhower National Airport).
“Protecting the American people from terrorism is our primary mission,” said U.S. Attorney Barry Grissom. “It is vital that we disrupt attacks against our homeland and bring terrorists to justice.”
“Terry Loewen utilized his privileged airport access to attempt a terrorist attack in Wichita,” said Assistant Attorney General Carlin. “Detecting, disrupting and holding accountable those who wish to harm Americans remains our highest priority.”
In his plea, Loewen admitted he came to the attention of the FBI late in May 2013 when he became a Facebook friend of a person who was posting comments advocating violent jihad. The FBI began communicating with Loewen through an undercover employee.
Loewen told the undercover employee he was waiting for what he called “the green light” from Allah to carry out a violent attack on a civilian target. He said he did not expect to live through any of the attacks he had in mind. He said he was inspired by the teachings of Osama bin Laden and Anwar Al Awlaki. He said he had downloaded thousands of pages of information on jihad.
In September 2013, Loewen sent photos of airplanes on the tarmac at the Wichita airport. He commented that he could have “walked over there, shot both pilots … slapped some C4 on both fuel trucks and set them off before anyone even called TSA.”
In October 2013, Loewen met with a second undercover FBI employee who Loewen believed was a “brother” and would help him blow up a plane. Loewen said he had scouted the airport to determine a time and place for an attack that would be sure to kill as many people as possible.
Loewen assisted the second FBI employee in the final assembly of an improvised explosive device. He was not aware that the explosive materials used in the device were inert. In the early hours of Dec. 13, 2013, the second FBI employee picked up Loewen at a Wichita hotel. They drove to where the bomb was stored and finished wiring the device. When they reached the airport, Loewen twice used his badge at a card reader to attempt to get onto the tarmac before he was arrested.
Sentencing will be sent for a later date. Both parties have agreed to recommend a sentence of 20 years in federal prison.
Grissom commended the Wichita FBI Joint Terrorism Task Force, which includes members from the FBI, Sedgwick County Sheriff’s Office and Kansas Highway Patrol. Assisting with the investigation were the FBI Kansas City Division, the Transportation Security Administration, the Wichita Airport Authority, the Wichita Police Department. Grissom also commended the prosecutors on the case: Assistant U.S. Attorney David Smith, Assistant U.S. Attorney Tony Mattivi, and Erin Creegan of the Justice Department’s National Security Division.
U.S. Attorney Announces ‘Be Here for Kids’ Event in PhoenixRead the Press Release
PHOENIX - The U.S. Attorney’s Office for the District of Arizona, as part of the Department of Justice’s Project Safe Childhood initiative, is hosting the ‘Be Here for Kids’ event on Friday, June 12, 2015, at the Desert Ridge Marketplace in Phoenix. The event will take place from 10:00 a.m. to 1:00 p.m.
The National Center for Missing and Exploited Children (NCMEC) created the ‘Be Here for Kids’ campaign to promote awareness about all child safety issues. The campaign is designed to help parents and others teach children to be aware, alert, and cautious to potential threats and to provide steps that children can take to stay safe, both on the Internet and in daily life. Families also are encouraged to take 25 minutes to talk to their children about abduction and safety prevention.
"The annual ‘Be Here for Kids’ national child safety campaign is particularly important this time of year, when children begin their summer breaks and have more time on their hands" said U.S. Attorney John S. Leonardo. "This event is designed to increase awareness among parents and children of the potential threats to child safety present in daily life, including the Internet."
This year’s event is being presented in partnership with the U.S. Marshal’s Service; Maricopa County Attorney’s Office; Phoenix Police Department; Bureau of Alcohol, Tobacco and Firearms; Department of Homeland Security; and the Arizona Attorney General’s Office. The Phoenix Police Department will be providing an armored vehicle from the bomb squad, guests from their K-9 unit, and education on bike safety, child restraints, and traffic. The U.S. Marshal’s Service will be introducing their new Marshal dog and digital child identification kits will be provided free of charge to those that attend.
For more information on NCMEC, visit www.missingkids.com. For more information about the Be Here for Kids campaign, visit www.missingkids.com/behereforkids. For more information on Project Safe Childhood, visit www.projectsafechildhood.gov.
RELEASE NUMBER: 2015-042_Be_Here_for_Kids_Phoenix
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Two Tennessee Men Plead Guilty to Killing Man During Home Invasion RobberyRead the Press Release
Two Tennessee men pleaded guilty to using a firearm to kill during a home invasion robbery they conducted on May 7, 2011, announced U.S. Attorney David Rivera of the Middle District of Tennessee and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Demario Winston, 27, of Clarksville, Tennessee, and Michael Massey, 26, of Lexington, Tennessee, pleaded guilty before Chief District Court Judge Kevin H. Sharp of the Middle District of Tennessee to conspiracy to commit Hobbs Act Robbery and use of a firearm in a crime of violence resulting in death. Massey also pleaded guilty to attempted Hobbs Act Robbery.
According to admissions reflected in the plea agreements, on May 7, 2011, Winston, Massey and others attempted to rob a home in Clarksville, Tenn. and Massey used a sledge hammer to gain entry. The conspirators had previously been told that a large amount of cocaine and cash was stored inside a safe in the basement of the home.
The defendants further admitted that, while inside the home, Winston, who was armed with a 9mm pistol, engaged in a gun fight with the homeowner on the first floor, while other conspirators attempted to force one of the occupants of the home, Raul Triana, to open the safe in the basement, pistol-whipping him in the process. Evidence introduced in the plea hearing indicated that in response to the shooting on the first floor, some of the conspirators fled the home, and Massey, who was armed with an assault rifle, fled through the basement where he encountered Triana and shot and killed him.
In addition, according to the statement of facts in support of Massey’s plea, on Oct. 21, 2011, he and a co-defendant robbed the owner of a Clarksville-based construction company at gunpoint.
This case was investigated by the Clarksville Police Department and the DEA. The case is being prosecuted by Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee and Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section.
Timber Lake Man Sentenced for LarcenyRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Timber Lake, South Dakota, man charged with Larceny, pled guilty to and was sentenced on June 3, 2015, by U.S. Magistrate Judge Mark A. Moreno.
Chapen Kraft, age 18, was sentenced to 18 months of probation and a special assessment of $25 to the Federal Crime Victims Fund.
The conviction stems from an incident between September 15, 2014, and October 11, 2014, when Kraft broke into a barn or storage shed and stole a two-ton jack, a 12-volt jumper box, a roll of air hose, an 8 foot roll of cable, and a used vehicle tire.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Agency. Assistant U.S. Attorney Carrie G. Sanderson prosecuted the case.
Three Methamphetamine Dealers Sentenced in San JoseRead the Press Release
SAN JOSE – Jorge Alejandro Sanchez Jimenez, and Francisco Ortiz, were each sentenced today to ten years in prison, for conspiring to distribute methamphetamine, and Macario Jimenez-Corona was sentenced to seven years in prison for attempting to possess methamphetamine with the intent to distribute it, announced United States Attorney Melinda Haag, Homeland Security Investigations (HSI) Acting Special Agent in Charge Tatum King and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bruce Balzano.
According to the government’s sentencing memorandum filed with respect to Sanchez Jimenez, Sanchez Jimenez had previously worked as a “runner” for a major methamphetamine dealer (Ademar Becerril, a/k/a Fredi Becerril, who was separately prosecuted in Case No. 13-CR-00798-RMW), and then sometime in mid-2013 Sanchez Jimenez split off and formed his own small organization. On June 1, 2015, Becerril was sentenced to over 16 years in prison.
According to his plea agreement, Sanchez Jimenez, 24, distributed methamphetamine in 2012 and 2013 using another person to deliver the drugs and collect cash for him (a runner). As part of his operation, Sanchez Jimenez rented a room in an apartment in San Jose that was used as a location to prepare drugs for delivery. Pursuant to court orders, law enforcement officers intercepted Sanchez Jimenez’ telephone conversations and observed his runner at the apartment. In September 2013, HSI agents searched the rented room and discovered digital scales, plastic containers, packaging material, a scale, rubber bands, approximately $4500 in cash, and handwritten notes which were a form of homemade accounting to track amounts owed by customers, listing the customers and the amounts owed. HSI and DEA agents then intercepted telephone calls in which Sanchez Jimenez indicated he had lost two pounds of drugs. He also indicated where the drugs were hidden. The agents returned to the room, removed an electric heater mounted along the floor of one wall, and found a hole in the wall. Inside the hole, they found approximately 1.2 kilograms of methamphetamine. Sanchez Jimenez fled to Mexico in September 2013, according to the plea agreement. He returned to the Bay Area and was arrested on March 3, 2014. He has been in custody since that date.
According to his plea agreement, Ortiz, 25, delivered methamphetamine on behalf of Becerril in 2013. On December 1, 2013, Ortiz was delivering methamphetamine when one of the other delivery persons, Arturo Cuevas-Quezadaz, was arrested with approximately 7.9 kilograms of methamphetamine. The next day, Ortiz was arrested at a restaurant in San Jose. He has been in custody since then. The agents also seized over $26,000 that Ortiz had delivered to Becerril and a list of drug customers and quantities that they were to receive. (Arturo Cuevas-Quezadaz, who is charged in the same case, pleaded guilty and is set for sentencing in July 2015.)
According to the government’s plea agreement with Jimenez-Corona, 49, on December 1, 2013, Jimenez-Corona was waiting to receive approximately three kilograms of methamphetamine from Arturo Cuevas-Quezadaz. Jimenez-Corona was in a car parked next to the car driven by Arturo Cuevas-Quezadaz, in a parking lot in San Jose when police officers arrested Cuevas-Quezadaz and seized the approximately 7.9 kilograms of methamphetamine he was transporting. Jimenez-Corona was released after being questioned by the officers. He was arrested the next day and has been in custody since then.
The sentences imposed on Francisco Ortiz and Macario Jimenez-Corona were handed down by the Honorable Ronald M. Whyte, U.S. District Judge. Jorge Alejandro Sanchez Jimenez was sentenced by the Honorable Edward J. Davila, U.S. District Judge. Ortiz and Sanchez Jimenez were each sentenced to a 5 year period of supervised release in addition to their prison terms. Macario Jimenez-Corona was sentenced to a 3 year period of supervised release in addition to the term of prison.
These cases are the products of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Summer camps must reasonably accommodate children with disabilitiesRead the Press Release
SHREVEPORT/LAFAYETTE/MONROE/LAKE CHARLES/ALEXANDRIA, La. – Summer camps are required to make reasonable accommodations to accept children with disabilities, U.S. Attorney Stephanie A. Finley announced today.
2015 Marks the 25th anniversary of the Americans with Disabilities Act (“ADA”). The ADA prohibits discrimination and ensures equal opportunity for persons with disabilities in employment, state and local government services, public accommodations, commercial facilities, and transportation.
Summer is here and the U.S. Attorney’s Office wants to ensure that children with disabilities have the opportunity to experience the fun of summer camps. The U.S. Attorney’s Office recently sent the attached flyer to hundreds of summer camps located within the Western District of Louisiana reminding them of their obligations under the ADA.
Summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities. This generally means that children with disabilities are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis, and that camps must train their staff in the requirements of the ADA. Camps are obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.
“Summer is always a special time for children,” Finley said. “Summer camps foster an environment where they can learn to work together, think creatively, and to be independent. Disabled children, whose needs can be reasonably accommodated, must be given the same opportunity as other children.”
Additional information about the ADA is available at www.ada.gov, or through the U.S. Attorney’s Office at (337) 262-6618.
Suburban Investment Advisor Arrested for Defrauding Clients of Approximately $1 MillionRead the Press Release
Chicago – A Wilmette man was arrested this morning by agents from the Federal Bureau of Investigation and detectives from the Norridge and Arlington Heights Police Departments and is facing federal wire fraud charges for defrauding his clients of at least $1 million of investment funds. Alan Gold, age 60, was arrested at his residence and charged by criminal complaint that was unsealed following his arrest. FBI agents also conducted a search pursuant to a search warrant of Gold’s residence this morning. Gold appeared before U.S. Magistrate Judge Jeffrey Gilbert earlier today and was released on a $10,000 recognizance bond and is due back in court for a status on June 15 at 9:00 a.m.
According to the complaint, Gold engaged in a scheme to defraud his clients for at least five years through false statements. Gold, who managed several million dollars of client funds through his company, Alan Gold & Associates, based in his residence, allegedly sent account statements to clients falsely representing that their assets were invested in certain stocks, real estate funds, futures contracts, and other investment products, when Gold had actually spent those client funds on his own personal expenses.
According to the complaint, Gold, as early as 2008, told his clients that he would make “alternative investments” on their behalf using funds that he would wire from their brokerage account to his bank account. Among the investments Gold listed on client account statements were real estate ventures and holdings in real estate ventures, gold and natural gas futures contracts, and the stocks of publicly traded companies. Gold did not purchase securities and futures contracts for his clients, but allegedly spent the funds on gambling expenses at area casinos and personal living expenses. Gold allegedly continued to wire transfer funds from client accounts for at least five years using the same false statements and representations to clients. The scheme was exposed when Gold stopped returning client phone calls and a client reported the matter to law enforcement.
If convicted of wire fraud, Gold could be sentenced to a maximum term of imprisonment of 20 years and a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation Chicago Office. The Chicago office of the U.S. Securities & Exchange Commission, the Arlington Heights Police Department, and the Norridge Police Department assisted with the investigation.
The government is being represented by Assistant United States Attorney Sunil R. Harjani.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilty beyond a reasonable doubt.
Complaint
St. Louis Man Sentenced for Role in 2001 Arson that Killed his 15-Year-Old SonRead the Press Release
St. Louis, MO - STEVEN HENRY KEMPER, Saint Louis County, was sentenced to 70 months in prison in connection with the November 16, 2001, arson of his family’s home in Florissant, Missouri. Kemper’s 15-year-old son, Zachariah Andrew Kemper, was trapped in the basement and killed during the fire. Kemper previously pled guilty to one-count of aiding and abetting the use of fire to commit mail fraud. He appeared today for sentencing before United States District Court Judge Audrey G. Fleissig.
The 2001 fire was originally the subject of state charges in which only Kemper’s wife, Sandra Bryant, was charged. During the ensuing trial, the judge declared a mistrial after ruling that certain polygraph evidence had mistakenly been shown to the jury. The Missouri Supreme Court ultimately held that because the mistrial was declared over the defense objection, state prosecutors were barred from retrying the defendant in state court because of the United States Constitution’s "double jeopardy" provision.
Sandra Kay Bryant, Saint Louis County, pled guilty to the same charge in March and awaits sentencing in July 2015.
This case was originally investigated by Saint Louis County Police Department. The United States Bureau of Alcohol, Tobacco, Firearms and Explosives took up the investigation after the Missouri Supreme Court decision barring the retrial by state prosecutors. The St. Louis County Prosecutor’s Office also provided significant assistance.
Seattle Man Sentenced for International Parental KidnappingRead the Press Release
A Seattle man who was the subject of an international manhunt last fall, was sentenced today in U.S. District Court in Seattle to time served -- about seven months in prison -- for International Parental Kidnapping, announced U.S. Attorney Annette L. Hayes. JEFFREY FORD HANSON, 46, was taken into custody in late October 2014, on the South Pacific island of Niue, 1,500 miles northeast of New Zealand. HANSON had been sought by law enforcement since September 12, 2014, when he was charged with international parental kidnapping for leaving Seattle with his son in violation of a court approved parenting plan. At the sentencing hearing U.S. District Judge James L. Robart said, “This kind of behavior, international parental kidnapping, is surprisingly common and has provoked significant penalties.” Judge Robart ordered one year of supervised release for HANSON.
According to records filed in the case, on July 17, 2014, HANSON’s son arrived in Seattle with his mother’s permission to visit for the summer months. HANSON knew he was required to return the child to Hazelton, Pennsylvania prior to the start of school in early September 2014. On August 30, 2014, unbeknownst to the mother, HANSON departed the Seattle area aboard his sailboat, the Draco, with the child on board and set sail across the Pacific Ocean. When the boy failed to return to Pennsylvania before school started, the boy’s mother alerted law enforcement. The Coast Guard and law enforcement agencies throughout the Pacific Rim were then asked to be on the lookout for the boat and the child.
According to the FBI, the Niue Police arrested HANSON on October 29th, after HANSON docked his sailboat on Niue shores in violation of Niue immigration and customs laws. The Niue police knew of the warrant for Hanson's arrest because the FBI’s Legal Attaché office in Canberra, Australia, passed the missing person and wanted fliers to the Pacific Transnational Crime Coordination Center (PTCCC), a multi-national law enforcement network, of which the Niue Police Department is a member. Niue police publicized the search for Hanson in the country, and alert members of the public provided the crucial tip that led authorities to HANSON. The 9-year-old boy was safely returned to his mother in Pennsylvania.
The investigation was led jointly by the FBI’s Seattle Safe Streets Task Force (SSSTF), whose many Task Force Officers include members of the Seattle Police Department Major Crimes Task Force. The Hazleton Police Department, the FBI’s Philadelphia and Los Angeles field offices, the Port of Seattle Police Department, the U.S. Coast Guard, and the National Center for Missing and Exploited Children collaborated on the investigation from the beginning. The FBI also values the tremendous assistance of the New Zealand Police, New Zealand Customs Service, and Immigration New Zealand.
The case was prosecuted by Assistant United States Attorneys Justin Arnold and Steven Masada.
San Diego Man Who Ran Investment Scam That Promised ‘Reverse Life Insurance’ Policies Sentenced to over 10 Years in Federal PrisonRead the Press Release
SANTA ANA, California – The founder and chief executive officer of a firm that solicited more than $5 million from victims who thought they were investing in “reverse life insurance” policies has been sentenced to 121 months in prison.
Daniel Christian Stanley Powell, 34, of San Diego, was sentenced on Friday by United States District Judge Josephine L. Staton. In addition to the prison term, Judge Staton ordered the defendant to pay $4,447,290 in restitution to 59 victims.
In imposing the sentence, Judge Staton cited the impact on the victims: “Many [victims] were devastated financially and emotionally, and robbed of their futures and their children’s futures.”
Following a three-week jury trial last November, Powell was convicted of five counts of mail fraud, five counts of wire fraud and three counts of obstruction of justice.
According to the evidence presented at trial, Powell, the founder and operator of the Los Angeles-based Christian Stanley, Inc., told investors that he would use their money to purchase life insurance policies from insured individuals, at which point the company would pay the monthly premiums and become the beneficiaries to the policies. Powell claimed that Christian Stanley would profit by collecting the death benefits when the insureds died or by selling the policies on the life settlement market.
Powell trademarked the phrase “reverse life insurance” and indicated he would take company public by filing documents with the Securities and Exchange Commission.
Powell claimed that investments with Christian Stanley were safe because his company already owned $1.9 billion in reverse life insurance policies in a mutual fund. Contrary to his promises, however, the evidence demonstrated that Christian Stanley did not own any life insurance policies and had earned only $31,250 in revenue since its inception.
As part of the scheme, Powell also told some victims that their money would be invested in gold mines, but Christian Stanley had no interest in any gold mines.
At the sentencing hearing, Powell apologized to his victims. “I did a lot of wrong to a lot of people,” Powell said. “What I am going through is what I deserve.”
In total, approximately 60 victims invested approximately $5.2 million with Christian Stanley. The victims, who were located throughout the United States, invested directly through Powell, other representatives of Christian Stanley, or their own financial advisors. Victims lost approximately $4.4 million as a result of the scheme, which included funds that had been invested through individual retirement accounts.
Powell used victims’ money to make Ponzi-scheme payments to some investors, to pay commissions to representatives who recruited investors, and to create promotional materials, which gave the appearance that Christian Stanley was a legitimate and successful business.
Powell also spent victims’ funds on a luxury apartment on the west side of Los Angeles, Ferrari and Porsche automobiles, and a $35,000 donation to Usher’s New Look foundation, which got him a photograph with former President Bill Clinton that was used as part of Christian Stanley’s promotional materials.
The U.S. Securities and Exchange Commission filed a civil complaint against Powell and his firm in 2011 (www.sec.gov/litigation/litreleases/2011/lr22082.htm). The evidence at the criminal trial showed that Powell knowingly drafted false affidavits to use in his defense to the SEC case and that he lied to the victims about his assets and promised to return their money if they signed the false affidavits. This criminal conduct led to the convictions on the obstruction of justice charges.
The case against Powell is the result of an investigation by the Federal Bureau of Investigation. The Los Angeles Regional Office of the U.S. Securities and Exchange Commission provided assistance in the investigation.
Release No. 15-057
Randolph County woman convicted of oxycodone traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jessie Marie Fox, 22, of Mill Creek, West Virginia, was convicted of oxycodone trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the West Virginia State Police Bureau of Criminal Investigation, the Federal Bureau of Investigation, and the Mon Valley Drug and Violent Crime Task Force revealed that Fox participated in a drug distribution operation designed to transport heroin and prescription painkillers across state lines from Philadelphia, Pennsylvania to Morgantown, West Virginia for redistribution and sale.
Fox pled guilty today to one count of “Use of a Telephone to Facilitate the Distribution of Oxycodone.” She faces up to 4 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government.
U.S. Magistrate Judge John S. Kaull presided.
Providence Resident Sentenced to Federal Prison in Cocaine Trafficking ConspiracyRead the Press Release
PROVIDENCE, R.I. – Juan C. Maldonado, 31, of Providence, was sentenced on Friday, June 5, 2015, to 36 months in federal prison for participating in a conspiracy to trafficking cocaine, announced United States Attorney Peter F. Neronha and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations for New England.
At sentencing, U.S. District Court Judge Mary M. Lisi also ordered Maldonado to serve three years supervised release upon completion of his prison term. Maldonado pleaded guilty on March 13, 2015, as charged in a federal indictment, to one count of conspiracy to distribute and possess with the intent to distribute cocaine, and one count of attempting to possess with the intent to distribute cocaine.
According to information presented to the court, on July 2, 2014, during an inbound inspection from the U.S. Virgin Islands, Customs and Border Protection agents in Puerto Rico discovered two packages which contained safes, each with 4 kilograms of cocaine inside, addressed to recipients in Providence. One was addressed to a house where the defendant, his girlfriend and his brother, Elix Javier, 24, were living. The second package was addressed to a residence where the defendant’s mother, sister and others were living.
On July 7, 2014, an undercover postal inspector delivered the first package to the address where Juan Maldonado was living. The postal inspector was greeted at the door by Mr. Maldonado, who called out for his brother who then signed for and accepted the package. Approximately twenty minutes later, Mr. Maldonado and another individual exited the house. Agents seized a black bag Maldonado was carrying. Inside the bag was the package containing the safe and cocaine delivered by the undercover postal inspector.
Following Maldonado’s arrest, a court authorized search of his residence resulted in the seizure of a shoebox with two digital scales, approximately 80 gross grams of ground up acetaminophen or Tylenol, baggies, and other cutting agents used in the packaging and sale of narcotics.
As agents entered the residence, Elix Javier fled through a back door. He remained a fugitive until his arrest on July 24, 2014, in Lynn, Massachusetts. Elix Javier was acquitted at trial by a jury on March 26, 2015, of one count of conspiracy to distribute and possess with the intent to distribute cocaine and one count of aiding and abetting.
The case was prosecuted by Assistant U.S. Attorney Richard W. Rose.
The matter was investigated by Homeland Security Investigations with the assistance of U.S. Postal Inspectors, R.I. State Police HIDTA Task Force, DEA and Warwick Police Department.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Private investigator Williamson pleads guilty to charges in bribery caseRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that private investigator Robert Williamson pleaded guilty to charges related to his role in a pay-for-plea scheme that garnered favorable treatment for defendants charged with various state crimes.
Prior to the start of trial that was scheduled to begin today, Williamson, 64, of Lafayette, pleaded guilty before U.S. District Judge Elizabeth E. Foote to one count of conspiracy, one count of bribery, and one count of Social Security fraud.
According to the guilty plea, Williamson, who is not licensed to practice law, was part of a conspiracy from March 2008 to February 2012 to solicit thousands of dollars from individuals with pending criminal charges in the 15th Judicial District. Williamson promised favorable resolutions to pending felony and misdemeanor cases, the majority of which were OWI cases. Williamson paid bribes in cash and other things of value to former personnel within the District Attorney=s Office for the 15th Judicial District and employees with other organizations associated with the OWI program, including Acadiana Outreach. Williamson also obtained false and fraudulent certifications from Acadiana Outreach, which certified that his clients completed court-ordered community service, when in fact the individuals had not. Williamson would obtain fraudulent driver safety training certificates showing that Williamson=s Aclients@ completed court-mandated driver improvement programs when they had not. Some of those monies were for fines, penalties and other expenses. The total fraudulent amount will be determined at sentencing. During this time, Robert Williamson also received approximately $77,677.20 from the Social Security Administration that he was not entitled to receive.
williamson_robert_factual_basis_for_plea_06.08.15.pdf (1.42 MB)
“Today marks a successful conclusion of the corruption case involving this defendant and former employees of the Lafayette District Attorney’s Office,” said U.S. Attorney Stephanie Finley. “This is a win for the people of our community who no longer have to be concerned about drunk drivers subverting the criminal justice system. Mr. Williamson will now be held accountable for his role in this bribery scheme and for defrauding the Social Security Administration. I want to personally thank the investigators and prosecutors who worked so diligently on this case.”
Williamson faces a maximum penalty of five years in prison for the conspiracy count, 10 years in prison for the bribery count, and five years in prison for the Social Security fraud count. He also faces a $250,000 fine or both with up to three years of supervised release for each count. A sentencing date of September 25, 2015 was set.
The FBI and the Social Security Administration – Office of Inspector General conducted the investigation. Assistant U.S. Attorneys John Luke Walker and Robert C. Abendroth are prosecuting the case.
Oregon Woman Pleads Guilty for Conspiring to File Fraudulent Income Tax Returns Claiming More than $1 Million in RefundsRead the Press Release
A Portland, Oregon, woman pleaded guilty on Friday before U.S. District Court Judge Robert E. Jones in the District of Oregon for conspiring to file fraudulent federal income tax returns that claimed refunds of more than $1 million, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the plea agreement, Jasmine Mason admitted that she conspired with other individuals to prepare and file more than 227 fraudulent income tax returns for calendar year 2009 during the 2010 tax filing season. The false information on the tax returns included fictitious W-2 wage and withholding information and fraudulent refundable tax credits.
As part of the terms of the plea agreement, Mason has agreed to a sentencing recommendation of 32 months in prison for her crimes. She also faces financial penalties of fines and restitution to the Internal Revenue Service (IRS) of more than $330,000 at her Sept. 15 sentencing.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation in Portland, who investigated the case, and Trial Attorneys Lori Hendrickson and Ryan Raybould of the Tax Division, who are prosecuting the case. She also thanked the U.S. Attorney’s Office in Portland for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Omaha Man Sentenced for Manufacturing Counterfeit Identification DocumentsRead the Press Release
United States Attorney, Deborah R. Gilg, announced that Faustino Suastegui-Villalva, 49, was sentenced by United States District Court Judge Laurie Smith Camp to a total of 54 months in federal prison for his role in the production of counterfeit identification documents. Saustegui, a citizen of Mexico, was arrested on October 22, 2014, after a criminal complaint had been filed against him charging him with possessing five or more counterfeit Social Security cards with the intent to sell them. On November 18, 2014, Suastegui was charged in a superseding indictment with conspiring with Fernando Nevarez-Carreon to manufacture and sell counterfeit Social Security cards. Federal agents had purchased counterfeit Social Security cards and other identification documents on July 16, 2014, July 23, 2014, and September 11, 2014. The investigation of Nevarez-Carreon lead to the presence of Suastegui. Federal agents executed a search warrant at the residence of Suastegui and seized equipment used in the manufacturing operation including various computers on which images of counterfeit identification documents were located. The computer equipment contained over one-hundred fraudulent counterfeit identification documents.
Suastegui was sentenced to 30 months in prison upon his conviction on the conspiracy charge and for a charge of unlawfully transferring identification documents. Judge Smith Camp ordered that he serve an additional 24 months consecutive to the original 30 months for his conviction on the aggravated identity theft charge. After completing his 54 month combined prison sentence, Suastegui will be deported back to his home country of Mexico.
Nevarez-Carreon is scheduled to be sentenced for his role in the case on June 29, 2015.
The investigation was conducted by the Social Security Administration Office of Inspector General and by agents with the Department of Homeland Security.
Ohio man convicted of traveling to engage in unlawful sexual conduct with minor victimRead the Press Release
CLARKSBURG, WEST VIRGINIA – Patrick W. Ganim, 29, of, Chagrin Falls, Ohio, was convicted of traveling across state lines to engage in illicit sexual conduct with a minor female today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Ganim communicated with a minor female residing in the Northern District of West Virginia utilizing a variety of internet resources and online messaging tools. In October 2014, Ganim traveled across state lines from Ohio into West Virginia. He then engaged in illicit sexual conduct with the victim. Following their initial meeting, Ganim continued to utilize online messaging services to communicate with the minor victim, planning a subsequent meeting and sending explicit material to the victim.
Ganim pled guilty today to one count of “Travel with Intent to Engage in Illicit Sexual Conduct,” for which he faces up to 30 years in prison and a fine of up to $250,000.00.
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The Preston County Sheriff’s Office, the Bainbridge Township, Ohio Police Department, and the Federal Bureau of Investigation led the inquiry.
U.S. Magistrate Judge John S. Kaull presided.
Nineteen Face Federal Charges in Cumberland & Harnett Counties Cocaine and Crack Distribution RingRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announces that a federal grand jury in Raleigh returned a 39 count indictment (attached) and the defendants were arrested for conspiring to manufacture and distribute cocaine and cocaine base (crack) in large quantities over a four plus years’ time frame.
The following people were indicted and arrested.
- Lemont Jerrone Webb, aka “L Dawg” and “Mont”, 41, of Godwin, NC
- Antoine Dewayne Myles aka “Twan”, 39, of Dunn, NC
- Farrah Michelle Harrell, 37, of Durham, NC
- Douglas Earl Register, 49, of Dunn, NC
- John Bernard Taylor, Jr., 45, of Fayetteville, NC
- Ronald Devon Pegues, 36, of Fuquay Varina, NC
- Major Lewis Clark, Jr., 31, of Dunn, NC
- Cleveland Myles, 49, of Dunn, NC
- Larry Donnell Pearsall, 40, of Godwin, NC
- Nathune Jamerson Myles, 39, of Godwin, NC
- Adriann Roshanda Currie, 38, of Burlington, NC
- Carlos Edward Carmelo, 36, of Fayetteville, NC
- Tiwana Jennelle Smith, 36, of Dunn, NC
- Christopher Lee Johnson, 45, of Fayetteville, NC
- Maurice Shaunt Blanks, 30, of Roseboro, NC
- Chapman Carroll, 31, of Godwin, NC
- Janice Marie Smith, 51 of Fayetteville, NC
- Harry Myles, Sr., 59, of Godwin, NC
- Sophia Latrice Eaddy Myles, 33, of Fayetteville, NC
Harry Myles, Sr. and Sophia Latrice Eaddy Myles were charged with Money Laundering. The others listed above were charged with a Drug Distribution Conspiracy to distribute cocaine and cocaine base (crack). Lemont Jerrone Webb and Antoine Dewayne Myles were also charged with both Drug Distribution and Money Laundering.
If convicted, the maximum penalties for the charged drug counts are life imprisonment, a $10 million fine, and a term of supervised release of not less than 5 years, following any term of imprisonment. The maximum penalties for the money laundering charges are not less than 20 years imprisonment, a $500,000 fine or twice the value of the property involved, whichever is greater, and up to 3 years supervised release following any term of imprisonment.
The charges and allegations contained in the indictment are merely accusations. The defendants are considered innocent unless and until proven guilty in a court of law.
The case is being investigated by the Drug Enforcement Administration (DEA), the Cumberland County Sheriff’s Office (CCSO), the Internal Revenue Service - Criminal Investigation (IRS-CI) and the United States Marshal’s Service (USMS).
New York Man Sentenced for Trafficking Unauthorized Access DevicesRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Bronx, New York, man convicted of Using or Trafficking in an Unauthorized Access Device and Aiding and Abetting was sentenced on June 2, 2015, by U.S. District Judge Roberto A. Lange.
Francis Frias, age 21, was sentenced to serve 2 years in federal prison, followed by 2 years of supervised release, $10,040.92 in restitution, joint and several with his co-defendants, and a $100 special assessment to the Federal Crime Victims Fund.
The conviction arose from activities that occurred between June 23, 2014, and July 5, 2014, when Frias and two co-defendants used “account takeovers” — which is where the defendants posed as established AT&T customers who wanted to upgrade by adding new lines or phones to their existing cell plans. Frias and his co-defendants were provided confidential subscriber information while they were outside an AT&T store. Before Frias or one of his co-defendants went into an AT&T store, another person had already called into AT&T and added one of the three of them as an authorized user to the original AT&T customer’s account. Once the cell phones were purchased, Frias mailed them to addresses provided by another individual. Frias would be paid for each phone he purchased and shipped.
On July 5, 2014, a traffic stop was conducted on Interstate 90 in Jones County. The three individuals in the vehicle, including Frias, were from New York. The vehicle was a rental and was due back in Colorado on June 24, 2014. A probable cause search was conducted and a white plastic bag with 14 brand new, in-the-box Apple 5S iPhones were found in the trunk, along with receipts from an AT&T Store in Pierre, South Dakota. The names on the receipts did not match any of the three individuals in the vehicle.
This case was investigated by the Office of Attorney General, Division of Criminal Investigation, and the U.S. Department of Homeland Security, Secret Service. Assistant U.S. Attorney Jay Miller prosecuted the case.
Frias was immediately turned over to the custody of the U.S. Marshals Service.
Members and Associates of Various White Supremacist Organizations Get Hefty Sentences for Roles in Drug Trafficking ConspiracyRead the Press Release
DALLAS — Two individuals, who were arrested during a November 2014 law enforcement operation in which 37 individuals were charged with felony offenses stemming from their respective roles in a drug distribution conspiracy that operated in North Texas and elsewhere from January 2013 to October 2014, have been sentenced to lengthy federal prison sentences. John Parker, the Acting U.S. Attorney for the Northern District of Texas, made the announcement today.
Brandon Crow, 30, of Garland, Texas, was sentenced on Thursday to 240 months in federal prison and Rhonda Long, a/k/a “Queen Saltine,” 51, of Mesquite, Texas, was sentenced to 188 months in federal prison. Each pleaded guilty in January 2015 to one count of possession of a controlled substance (methamphetamine) with the intent to distribute that controlled substance.
The Texas Department of Public Safety Criminal Investigations Division (DPS-CID) led that November 2014 law enforcement operation in which the defendants were alleged to be members of, or associated with, various white supremacist organizations, including the “Aryan Brotherhood of Texas” (ABT), the “Aryan Circle,” the “Irish Mob,” and the “Dirty White Boys.” Despite their differences, they would often collaborate for purposes of drug distribution or other illegal ventures. The indictment alleged that since January 2013, the defendants conspired together, and with others, to possess with intent to distribute 500 grams or more of methamphetamine. According to the indictment, the defendants used stash houses and other locations to store the quantities of methamphetamine. Each co-conspirator was linked to one another either directly or through another co-conspirator. Certain co-conspirators acted as hubs for narcotics trafficking, supplying methamphetamine to numerous other co-conspirators. Throughout the investigation, over 16 pounds of methamphetamine and five firearms were seized.
To date, 34 of the 37 charged defendants have pleaded guilty and 12 of those have been sentenced. Other defendants, all Dallas residents, receiving long prison sentences for their roles include:
William McDowell, a/k/a “Scout,” 33, of Mesquite, Texas; 188 months
Christy McCellon, a/k/a “90,” 38; of Quitman, Texas, 222 months
Eliezer Jarillo Gonzalez, 22, of Dallas, 180 months
Javier Dominguez, 23, of Dallas, 120 months
Another defendant is scheduled to enter a guilty plea next week, one defendant remains set for trial, and one defendant remains a fugitive.
The investigation is being led by the DPS-CID Gang Unit and the Dallas Police Department Criminal Intelligence Unit with assistance from the Garland Police Department Neighborhood Police Officer Unit, the Mesquite and Rockwall Police Departments and U.S. Immigration and Customs Enforcement Homeland Security Investigations..
Assistant U.S. Attorney P. J. Meitl is prosecuting.
Law Firm Bookkeeper Sentenced to 24 Months Imprisonment forRead the Press Release
Abingdon, VIRGINIA – A former law firm bookkeeper, who previously pled guilty to embezzlement charges, was sentenced last week in the United States District Court for the Western District of Virginia in Abingdon.
Patricia Ethel Chinault, 72, of Apopka, Florida, was sentenced last Friday to 24 months in federal prison. Chinault previously pled guilty to embezzling approximately $1 million from a Carroll County law firm. Chinault, who previously lived in Carroll County, worked as a bookkeeper for the law firm. After she moved to Florida in 2009, she continued to provide bookkeeping services for the firm.
Chinault, who had electronic access to the law firm’s accounts, used that access to fraudulently divert money to herself from 2010 to 2014. Using investigative means, federal law enforcement agents became aware of suspicious activity on one of Chinault’s credit card accounts. Further investigation revealed the extent of Ms. Chinault’s criminal activity.
Chinault spent most of the stolen money on internet gambling. The Court ordered Chinault to pay restitution of $960,809.
The investigation of the case was conducted by the United States Secret Service. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
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Kentucky Woman Sentenced to 30 Months for Embezzling from EmployerRead the Press Release
CINCINNATI – Michelle M. Clemons, 32, of Independence, Ky., was sentenced in U.S. District Court to 30 months in prison for three counts of wire fraud.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Michael R. Barrett.
According to court documents, beginning in or about July 2005, Clemons worked as the controller for Art Woodworking and Manufacturing Co. located in Cincinnati. From at least 2006 until February 2013, Clemons used wire communications to embezzle funds from Art Woodworking. During that time, she electronically transferred more than $411,000 from the company for her own financial benefit.
“As controller, the defendant oversaw payroll for the company, had access to its financial information and was responsible for directing funds for the payment of company debts,” Assistant United States Attorney Jessica Knight told the court. “Clemons abused her position of trust at Art Woodworking and began diverting unauthorized payroll and reimbursements to her personal bank account.”
Clemons would issue herself unauthorized payroll checks using the direct deposit function or through manual payroll checks deposited into her personal bank account. She also issued reimbursements for business expenses she did not incur. Clemons often manipulated the accounting software to make the checks she wrote to herself appear as if they were used for a business purpose, when in fact, Clemons was cashing or depositing the checks into her personal bank account.
Furthermore, she used three business credit cards in the name of Art Woodworking for personal expenses such as to fund a Disney Vacation Club and subsequent trip in Florida, and to pay her personal real estate tax bill.
Clemons was also sentenced to three years supervised release and ordered to pay restitution of $231,671.42 to Art Woodworking and $100,000 to Selective Insurance.
Clemons pleaded guilty on August 14, 2014 to wire fraud.
U.S. Attorney Stewart commended the cooperative investigation by the FBI, as well as Assistant United States Attorney Jessica Knight, who represented the United States in this case.
Kansas Man Pleads Guilty in Plot to Explode Car Bomb at AirportRead the Press Release
A Wichita, Kansas, man pleaded guilty to attempting to explode a car bomb at the airport in Wichita, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Barry R. Grissom of the District of Kansas.
Terry Lee Loewen, 59, of Wichita, pleaded guilty today to one count of attempting to use a weapon of mass destruction. Loewen was arrested in December 2013 when he tried to enter the grounds of the Wichita Mid-Continent Airport for the purpose of exploding a bomb. (The airport recently was renamed Wichita Dwight D. Eisenhower National Airport).
“Terry Loewen utilized his privileged airport access to attempt a terrorist attack in Wichita,” said Assistant Attorney General Carlin. “Detecting, disrupting and holding accountable those who wish to harm Americans remains our highest priority.”
“Protecting the American people from terrorism is our primary mission,” said U.S. Attorney Grissom. “It is vital that we disrupt attacks against our homeland and bring terrorists to justice.”
In his plea, Loewen admitted he came to the attention of the FBI late in May 2013 when he became a Facebook friend of a person who was posting comments advocating violent jihad. The FBI began communicating with Loewen through an undercover employee. After Loewen expressed his desire to engage in violent jihad, the undercover employee offered to introduce him to someone who could help him do it.
Loewen told the undercover employee he was waiting for what he called “the green light” from Allah to carry out a violent attack on a civilian target. He said he did not expect to live through any of the attacks he had in mind. He also said he was inspired by the teachings of Osama bin Laden and Anwar al-Awlaki, and that he had downloaded thousands of pages of information on jihad.
In September 2013, Loewen sent photos of airplanes on the tarmac at the Wichita airport. He commented that he could have “walked over there, shot both pilots … slapped some C4 on both fuel trucks and set them off before anyone even called TSA.”
In October 2013, Loewen met with a second undercover FBI employee who Loewen believed was a “brother” and would help him blow up a plane. Loewen said he had scouted the airport to determine a time and place for an attack that would be sure to kill as many people as possible.
Loewen assisted the second FBI employee in the final assembly of an improvised explosive device. He was not aware that the explosive materials used in the device were inert. In the early hours of Dec. 13, 2013, the second FBI employee picked up Loewen at a Wichita hotel. They drove to where the bomb was stored and finished wiring the device. When they reached the airport, Loewen twice used his airport badge at a card reader to attempt to get onto the tarmac before he was arrested.
Loewen’s sentencing will be scheduled at a later date. Both parties have agreed to recommend a sentence of 20 years in federal prison.
Assistant Attorney General Carlin and U.S. Attorney Grissom commended the FBI Wichita Joint Terrorism Task Force, which includes members from the FBI, Sedgwick County, Kansas, Sheriff’s Office and Kansas Highway Patrol. Assisting with the investigation were the FBI Kansas City Division, the Transportation Security Administration, the Wichita Airport Authority and the Wichita Police Department. Assistant Attorney General Carlin and U.S. Attorney Grissom also commended the prosecutors on the case, Assistant U.S. Attorneys David Smith and Tony Mattivi of the District of Kansas and Trial Attorney Erin Creegan of the Justice Department’s National Security Division.
Loewen Plea Agreement
Jenison Woman, Renata Nicole Annese, Sentenced for Wire Fraud SchemeRead the Press Release
Renata Nicole Annese stole over $800,000.00 in a credit card fraud scheme
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that Renata Nicole Annese, 39, of Jenison, Michigan, received a sentence of imprisonment of 60 months in U.S. District Court for the Western District of Michigan today. Her sentence followed her guilty plea in January, 2015, to one count of wire fraud arising out of her role in a credit card fraud scheme. "Bringing fraudsters to justice and deterring fraudulent conduct through vigorous prosecution of those who take advantage of others remains an important priority of this office. Ms. Annese selfishly took advantage of her position of trust and now must pay the price," said U.S. Attorney Miles.
As part of her judgment of conviction, the court ordered Annese to pay restitution in the amount of $872,929.23. Annese was additionally ordered to forfeit her equity interest in her home in Jenison, Michigan, because she used the proceeds of her fraud to make her mortgage payments. Annese paid the victim $30,000.00, representing her equity interest, prior to sentencing. In issuing her sentence, U.S. District Court Judge Robert J. Jonker noted that her conduct "was not just an isolated fraud, but a long-term pattern."
From October 2006 until April 2013, Annese used interstate wires to defraud the former owner of the Sleep Inn hotel in Allendale, Michigan, of nearly a million dollars. Annese did so by regularly accessing the Internet so that she could edit data related to the hotel’s credit card sales. Annese then inserted her own personal credit card and bank debit card numbers on the payment side of many of those transactions. This caused the hotel customers’ cards to be charged, but directed the customers’ banks to send the payments to Annese’s credit and debit cards, instead of to the hotel’s bank account. Defendant concealed her fraud by pairing her credit or bank debit card numbers with names and charge amounts actually associated with real hotel customers. This made it appear as if those customers were receiving a credit back to their cards, when in reality Annese was receiving the payments. The former owner of Sleep Inn sold the hotel in 2013 because of its struggling financial performance and did not learn of Annese’s fraud until shortly after the sale.
"Defendant Annese repeatedly used the Internet to siphon funds intended for her employer and divert them illegally to her own bank accounts," stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. "As reflected in this case, there are always very real victims on the other end of financial fraud crimes. The FBI remains committed to deterring this type of conduct and bringing justice to those who perpetrate fraudulent financial schemes in violation of federal law."
The Federal Bureau of Investigation conducted the investigation and Assistant United States Attorney Ronald M. Stella prosecuted the case.
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Investment Consultant Sentenced to 51 Months in Federal Prison for Running Ponzi SchemeRead the Press Release
FORT WORTH, Texas — A California man who pleaded guilty earlier this year to one count of wire fraud stemming from a Ponzi scheme he ran that defrauded investors in North Texas and throughout the country, was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Piyush Bachubhai Patel, 54, most recently of Clovis, California, was sentenced to 51 months in federal prison and ordered to pay approximately $700,000 in restitution by U.S. District Judge Reed C. O’Connor. Judge O’Connor ordered that he surrender to the Bureau of Prisons on June 30, 2015.
According to documents filed in the case, from approximately January 1, 2008 through 2013, Patel, who represented himself as an investment consultant, d/b/a Elite Financial Services and 777 Consulting Services, devised and ran a scheme in which he solicited and obtained money from victim investors. As part of his scheme, he made false representations including how their money would be invested, how much of their money would be invested, and how much money they had in their accounts.
Patel told one particular investor that he had more than 50 investors in his stock investment plan and that his investments had realized annual returns of 89% over the last three years. Based on Patel’s representations, this investor decided to invest with Patel, and wired nearly $250,000 to Patel.
After Patel received this investor’s money, he did not invest it as he stated he would. Instead, Patel used a significant portion of the money to pay personal expenses, pay down loans, and obtain cash. Patel then proceeded to lose most of the money that he did invest.
Even though Patel used a large portion of this investor’s money for personal expenses and lost more than $100,000 of it by day-trading, Patel emailed account statements to this investor falsely representing that the investor’s account balance had appreciated to nearly $300,000. However, on the date of those statements, there was only approximately $40,000 in the investor’s account.
Based on false account statements, this victim investor decided to invest an additional $90,000 with Patel. Once again, Patel used a large portion of the money to pay personal expenses and debts, and lost most of the money that he did invest. By February 2011, the approximate balance in the investor’s account was only $10,000.
In the following months, Patel falsely told the investor that his account balance had grown to over $470,000. In May 2011, this investor contacted Patel and advised he wanted to make an immediate $20,000 withdrawal and schedule monthly $9,000 disbursements from the account. Patel agreed to send the money as requested but advised that he could not send it until June. When the investor did not receive the money in June, he again contacted Patel. In late July 2011, Patel deposited $20,000 into this investor’s bank account, but he never sent the investor monthly disbursements. Despite repeated attempts, the investor never received any additional funds from Patel.
During the course of his scheme, Patel also solicited and obtained money from other victim investors using tactics similar to those described above. Patel also deceived these victim investors about the amount of their money that was, or would be, invested, as well as the value of their accounts.
The FBI investigated the case.
Former State Fraud Enforcement Official Pleads Guilty to Federal Fraud ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LYNWOOD PATRICK, JR., 39, of East Hartford, waived his right to indictment and pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to one count of mail fraud related to his submission of a fraudulent application for a personal mortgage modification.
According to court documents and statements made in court, from approximately October 2012 through May 2013, while he was employed as the Director of Investigations for the State of Connecticut Department of Social Services (DSS), Office of Quality Assurance, PATRICK applied for a mortgage modification through JP Morgan Chase under the Making Home Affordable program, a federal initiative designed to assist homeowners who have experienced a decline in income access secure loans at lower rates. The application requested assistance in connection with a property PATRICK owned in East Hartford.
During the application process, PATRICK represented that the East Hartford property was his primary residence and was owner occupied when, in fact, the property was not his primary residence and he did not occupy it. PATRICK also fabricated State of Connecticut paystubs and lied about his assets in order qualify for the program. Specifically, PATRICK claimed total assets of $500 in one checking account to show that he had experienced a loss of income causing a hardship when, in fact, he had thousands of dollars spread out over multiple accounts at several institutions and his rate of pay had not diminished.
The investigation revealed that, in connection with the loan application, PATRICK faxed fraudulent documents to JP Morgan Chase from DSS offices and used a DSS fax coversheet.
In his capacity as the Director of Investigations, PATRICK was responsible for coordinating and conducting activities to prevent, detect and investigate fraud, waste, abuse and overpayments in the Connecticut Medicaid, Care4Kids, Supplemental Nutritional Assistance and Connecticut Energy Assistance Programs. PATRICK’s salary was partially paid for by the federal Centers for Medicare and Medicaid Services, which is a federal agency within the U.S. Department of Health and Human Services.
Judge Bolden scheduled sentencing for August 31, 2015, at which time PATRICK faces a maximum term of imprisonment of 20 years.
PATRICK has been released on a $150,000 bond since his arrest on May 6, 2015.
This matter is being investigated by the Connecticut Public Corruption Task Force, which includes the U.S. Department of Health and Human Services – Office of Inspector General, U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Bureau of Investigation, U.S. Postal Inspection Service and Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Christopher M. Mattei.
Citizens are encouraged to report corruption to the Connecticut Public Corruption Task Force by calling 1-800-CALL-FBI (1-800-225-5324).