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2 June 2015
Chesapeake Man Sentenced to 20 Years in Prison for Drug ConspiracyRead the Press Release
NORFOLK, Va. – German Alvarado Ponce, aka Herman Alvaniz, 37, of Chesapeake, Virginia, was sentenced today to 240 months in prison, followed by five of supervised release on a drug conspiracy charge.
Ponce and five co-defendants were indicted Dec. 17, 2014, and have all pleaded guilty. According to court documents, Ponce led a drug trafficking ring that distributed in excess of 100 kilograms of cocaine in Chesapeake and Portsmouth, Virginia. The DEA conducted a 40-day wiretap of Ponce’s phones, and in July 2014 conducted a takedown of the six charged defendants which resulted in the seizure of 5.5 kilograms of cocaine and over $197,000.
Name
Date of Guilty Plea
Date of Sentencing
German Alvarado Ponce
March 6, 2015
June 2, 2015
Ismael Diaz Amestica
March 18, 2015
June 24, 2015
Kenneth Maurice Bell
February 11, 2015
July 29, 2015
Janette Elena Cruz Miller
March 16, 2015
June 24, 2015
Altagracia Acosta Suarez
March 30, 2015
July 21, 2015
Calvin Maurice Murphy
March 19, 2015
July 29, 2015
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s (DEA) Washington Office, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith.
This case was investigated by the DEA’s Washington Office with the assistance of the Chesapeake Police Department, and was part of the Organized Crime Drug Enforcement Task Forces (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. Assistant U.S. Attorney Darryl J. Mitchell prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-119.
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Canadian Drug Trafficker Sentenced to Seven Years in PrisonRead the Press Release
A 52-year-old Vancouver, British Columbia man was sentenced today in U.S. District Court in Seattle to seven years in prison and four years of supervised release in connection with a scheme to smuggle large quantities of MDMA into the U.S., and Cocaine into Canada, announced U.S. Attorney Annette L. Hayes. PHILIP COTE was arrested in August 2014, and in February 2015 pleaded guilty to Conspiracy to Distribute MDMA and Cocaine. COTE and a co-conspirator traveled in two cars in tandem across the border 86 times since 2006 as part of their drug trafficking activities. At sentencing U.S. District Judge Robert S. Lasnik noted that COTE had “seen people’s lives ruined by drugs,” and yet he transported drugs to make money.
“Enforcement of the federal drug laws at the U.S.-Canada border is a priority for federal law enforcement. Like this defendant, those transporting large loads of dangerous drugs are responsible for enlarging the circle of drug addiction in our communities and will be held to account,” said U.S. Attorney Annette L. Hayes. “I commend Homeland Security Investigations for their diligent work on this case.”
According to records filed in the case, COTE and a co-conspirator made frequent drug runs across the border with one person acting as a lookout in one vehicle and the other carrying drugs in a secret compartment in their vehicle. On July 25, 2014 COTE traveled from British Columbia to Blaine, Washington. He supplied his contact in Blaine with 20 kilos of MDMA or ecstasy hidden in the trunk of a car. COTE met with the contact, believing the contact would deliver the drugs to Southern California. COTE instructed the contact to pick up a 32 kilo load of cocaine and hide it in the walls of an SUV for the return trip. In fact the person COTE met was working with agents from U.S. Immigration and Custom Enforcement’s Homeland Security Investigations (HSI). On August 20, an undercover officer picked up the cocaine load in Southern California. On August 25, 2014 when COTE went to pick up the load in Blaine, he was arrested. COTE has been at the Federal Detention Center at SeaTac since his arrest.
“Cote thought his clean record and trusted traveler program membership would allow him to escape scrutiny at the border,” said Brad Bench, Special Agent in Charge of Homeland Security Investigations in Seattle. “He was mistaken. It was HSI’s coordinated effort to detect border security violators that exposed Cote and his drug trafficking operation.”
The street value of the cocaine that COTE sought to transport to Canada on just this one trip was $1.5 million.
The case was investigated by the Blaine Border Enforcement Security Task Force (BEST Blaine). The ICE Homeland Security Investigations-led BEST is composed of full-time members from U.S. Customs and Border Protection Offices of Air and Marine, Field Operations and Border Patrol; the Whatcom County Sheriff's Office; the U.S. Coast Guard Investigative Service; the Drug Enforcement Administration; the Canada Border Services Agency; and the Royal Canadian Mounted Police. BEST Blaine combats transnational criminal organizations by identifying, investigating and eliminating vulnerabilities along one of the most diverse geographic areas along the northern border.
The case is being prosecuted by Assistant United States Attorney Kate Vaughan.
California Man Receives Life in Prison for Methamphetamine TraffickingRead the Press Release
HONOLULU – United States District Judge Derrick K. Watson today sentenced California resident Alan L. Mapuatuli, age 44, to a prison term of life imprisonment, without the possibility of parole, for distribution of crystal methamphetamine and possession with intent to distribute crystal methamphetamine. Mapuatuli was subject to a mandatory life sentence on the latter charge and eligible for a life sentence on the former as a result of having two prior felony drug trafficking-related convictions in the State of California. Mapuatuli was found guilty after a jury trial in January 2015.
United States Attorney Florence T. Nakakuni said that according to information produced in court, Mapuatuli was convicted as the result of an undercover transaction between Mapuatuli and an informant involving a pound of methamphetamine. That transaction was monitored and recorded by federal agents. Based on information developed in the investigation, Mapuatuli was stopped as he drove away from the transaction. When his vehicle was searched, agents found the cellphone he had used to communicate with the informant, a backpack containing six ounces of crystal methamphetamine, $15,975.00 in U.S. currency, a loaded .45 caliber pistol, and a leather bag which contained an additional pound of crystal methamphetamine.
Mapuatuli also received a five-year term of imprisonment for possession of a firearm in furtherance of a drug trafficking crime, which is required to be consecutive to the other sentences.
The prosecution was the result of an investigation by Homeland Security Investigations/Immigration and Customs Enforcement and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution was handled by Assistant U.S. Attorney Jonathan M. F. Loo.
CFO Embezzles Hundreds of Thousands of Dollars from Charity to Fuel Lavish LifestyleRead the Press Release
SAN DIEGO – Former Chief Financial Officer Nancy Johnson and Accounts Payable Clerk Tamara Azizov pled guilty today and admitted using their positions in entirely separate schemes to steal hundreds of thousands of dollars from the Lawrence Family Jewish Community Center (“JCC”) located in La Jolla, California.
Johnson served as the JCC’s Chief Financial Officer (“CFO”) from April 1991 to April 2014, overseeing its $13 million annual budget. As CFO, Johnson had access to the JCC’s bank accounts, credit card accounts, and bookkeeping records. Johnson used her access (between 2008 and April 2014) to misappropriate $412,289.64, which she used for a variety of purchases including: a stay at the Grand Wailea Resort in Maui; airfare to the Bahamas; Jimmy Choo footwear; tickets to the ESPN X Games; and dinners at upscale eateries such Ruth’s Chris Steakhouse.
As detailed in Court, at the same time Johnson was embezzling funds to pay for lavish vacations and designer clothing, she claimed that the JCC could not afford the numerous programs and activities offered to the community. In fact, Johnson ordered JCC department heads to reduce expenses to make up for the hundreds of thousands of dollars she was siphoning off from the JCC coffers. Moreover, due in part to the embezzlement, the JCC was forced to cut personnel in order to balance its budget.
Azizov served as an Accounts Payable Clerk from June 1989 to May 2014. In this position, she also had access to the JCC’s bank accounts, credit card accounts, and bookkeeping records. In an entirely separate scheme unknown to Johnson, Azizoz misappropriated $154,192.74, which she also used for a variety of purchases, including: Tom Ford sunglasses; $1,820 for sushi at Zip Fusion; Simone Pérèle lingerie; and thousands of dollars’ worth of clothing from Neiman Marcus, Nordstrom, and Anthropologie. Both Johnson and Azizov continued their thefts until leaving the JCC in the spring of 2014.
Johnson and Azizov were able to carry out the embezzlement by virtue of their access to the full range of the JCC’s financial records and accounts. On most occasions, they would simply use the JCC’s credit cards to make personal purchases. In order to fool the JCC’s executive staff, auditors, and bookkeepers, they both (without knowledge of the other) falsely characterized their purchases as legitimate JCC expenses. At the end of the year, Johnson would then allocate her personal expenses to the JCC departments that had not exceeded their budgets.
The JCC was founded in 1945 and promotes the continuity and vibrancy of the Jewish community by offering social, cultural, educational, and recreational programs and services. The JCC operates, among other things, a preschool, a center for senior citizens, and one of the largest single-site summer day camps in California. Each year, thousands of community members attend the JCC’s San Diego Jewish Film Festival and the San Diego Jewish Book Fair.
As part of their pleas, Johnson and Azizov will be required to pay the JCC the funds they stole. Johnson’s next court appearance is on August 28, 2015, at 9 a.m. before U.S. District Judge Dana M. Sabraw. Azizov’s next court appearance is on Sept. 11, 2015, at 10 a.m. before Chief U.S. District Judge Barry T. Moskowitz. Johnson and Azizov will appear for sentencing as well as a hearing to determine the amount of restitution.
“San Diego has many fine charitable institutions like the JCC,” said U.S. Attorney Laura E. Duffy. “I will do everything in my power to insure that individuals who donate to these charities know that their funds are going to be used in an appropriate manner.” FBI Special Agent in Charge, Eric S. Birnbaum commented, "While the FBI investigates many types of fraud, when charitable organizations are victimized by those it entrusts to safeguard its assets, it is profoundly disturbing. The defendants in this case stole money intended to help children and senior citizens to indulge their lavish lifestyles. The FBI remains committed to pursuing those who abuse their position of trust to unlawfully enrich themselves."
Erick Martinez, Special Agent in Charge of IRS Criminal Investigation said, “The defendants misappropriated funds from a local community center designed to enrich the lives of those it served. IRS Criminal Investigation will not stand still while criminals line their pockets with illicit proceeds while community programs go underfunded. The defendants have overstepped their bounds feeling entitled to these funds.”
DEFENDANT Case Number: 15cr1446-DMS Nancy Johnson Age: 59 Escondido, California DEFENDANT Case Number: 15cr1447-BTM Tamara Azizov Age: 62 San Diego, California CHARGESWire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fineFiling a False Tax Return – Title 26, U.S.C., Section 7206(1)
INVESTIGATING AGENCIES
Maximum penalty: 3 years’ imprisonment and $250,000 fineFederal Bureau of Investigation
Internal Revenue Service, Criminal InvestigationBaltimore City Employees and Commercial Trash Haulers Indicted in Separate Bribery and Theft SchemesRead the Press Release
Baltimore, Maryland – A federal grand jury has returned two indictments charging five Baltimore City Department of Public Works (DPW) employees and six commercial trash haulers with conspiracy and other charges, including bribery and theft, related to two schemes to defraud the City of Baltimore through the operation of the DPW waste management services. Two employees are charged in both indictments. The indictments were returned on May 28, 2015 and unsealed today.
“The first indictment alleges that trash haulers paid bribes to landfill employees in exchange for not charging dumping fees, which cheated the city of almost $6 million. The second indictment charges that landfill employees stole scrap metal that the city would have sold for almost $1 million,” said U.S. Attorney Rod J. Rosenstein. “The Baltimore City Inspector General brought these allegations to the attention of federal authorities and assisted in the investigation.”
The first indictment alleges that over a 14-year period three DPW employees solicited and accepted cash payments from at least six private commercial haulers in return for not charging them or their companies the required disposal fees for trash dumped at the Baltimore City Quarantine Road Landfill. The second indictment alleges that over a 9-year period four DPW employees falsely represented on their daily time sheets that they were performing the jobs for which they were hired when, in fact, those employees used their paid positions to engage in a private enterprise for personal gain by selling scrap metal dumped at Baltimore City trash collection sites.
The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Assistant Special Agent in Charge Kathy Montemorra of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
The Department of Public Works’ Bureau of Solid Waste
The DPW’s Bureau of Solid Waste is responsible for managing Baltimore City’s waste management services, including overseeing citizen drop-off centers, such as the Northwest Transfer Station (NWTS) and the Quarantine Road Landfill (Landfill). Baltimore City’s waste management system generates revenue for the City by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities. The City contracts with private salvage companies to purchase and remove scrap metal from its trash collection facilities. DPW employees at the Landfill and NWTS are required to place the recyclable scrap metal in separate bins provided by the salvage companies. The salvage companies regularly pick up the scrap metal and, based on predetermined prices per ton, the salvage companies pay the City for the value of the scrap metal.
Baltimore City residents can deposit small amounts of trash and/or recyclables in dumpsters located near the main entrance of the Landfill, free of charge. Individuals or companies commercially hauling trash that have registered their vehicles with the City and obtained Landfill permits, as well as Baltimore City residents with larger loads, must deposit their trash in an open area located further within the Landfill. Commercial haulers of trash that meet certain vehicle weight limitations must, in addition to purchasing a Landfill permit, pay a waste disposal fee of $67.50 per ton of trash, also referred to as a “tipping fee.” The disposal fee applies to the net weight of the trash deposited at the Landfill.
U.S. v. Washington, Et Al., Criminal No. MJG-15-0303
The 44-count indictment alleges that from approximately 2001 until May 2015, DPW employees sought and accepted cash payments from commercial haulers in return for allowing the commercial haulers to deposit trash at the Landfill without paying the required disposal fees.
The indictment charges:
Tamara Oliver Washington, age 54, of Baltimore; Williams Charles Nemec, Sr., age 55, of Baltimore; Charles Dennis Bolden, Sr., age 68 of Baltimore; Adam Williams, Jr., age 52, of Randallstown; Mustafa Sharif, age 63, of Baltimore; Larry Lowry, age 61, of Orchard Beach, Maryland; Quentin Turgot Glenn, age 49, of Hanover, Maryland; Jessie Lee Wilson, Jr., age 40, of Baltimore; John Howard Brady, age 73, of Glen Burnie.
Washington was a DPW employee assigned to the scale house at the Landfill. DPW employees assigned as scale house operators weigh each truck as it enters the Landfill, which is recorded on a computerized point-of-sale system. To activate the system and record a particular transaction, DPW employees must enter the tag number of the truck and a corresponding billing code. The scale house operators reweigh each truck as it leaves the Landfill. The net weight of the deposited trash and the required disposal fee is then calculated and printed on a receipt that is handed to the driver. Nemec was initially employed by the DPW as a scale house operator at the Landfill and Northwest Transfer Station, and then later promoted to solid waste supervisor. Bolden was employed as a laborer at the Landfill.
Williams, Sharif, Lowry, Glenn, and Brady all had commercial trash hauling businesses in Maryland. Wilson was employed by Glenn.
Specifically, the indictment alleges that the DPW employees allowed the commercial haulers to enter the Landfill with truckloads of trash – sometimes multiple times a day - without activating the computerized truck scales and point-of-sale system, ensuring that there would be no record of the commercial haulers’ use of the Landfill. In exchange, the commercial haulers paid cash bribes to the DPW Employees, ranging from approximately $50 to $100 per Landfill visit. According to the indictment, the bribes were delivered on a daily or weekly basis to the DPW employees in folded paper through the scale house window or dropped off in envelopes at designated times and places outside the Landfill. The DPW employees allegedly divided the cash payments from the commercial haulers among themselves. The payments were approximately 20% to 30% of what the commercial haulers would have otherwise had to pay to use the Landfill. The indictment alleges that when the commercial haulers’ trucks drove onto the outbound scale after dumping their loads of trash, DPW employees handed the truck drivers fraudulent receipts, usually in the form of white scrap paper or a blank receipt, to maintain the pretense that the trucks had been weighed and appropriately charged for using the Landfill.
The indictment alleges that the ongoing relationship between the commercial haulers and DPW employees resulted in a loss of revenue to the DPW and the City of Baltimore of approximately $6,000,000.
The defendants each face a maximum sentence of five years in prison for the conspiracy; and all but Bolden also face a maximum of 10 years in prison for each count of bribery. Washington, Nemec and Bolden face a maximum of 20 years in prison for each count of extortion.
U.S. v. Hazelton, Et Al., Criminal No. MJG-15-0302
The 18-count indictment alleges that from approximately 2005 through March 2015, Jarrod Terrell Hazelton, age 32, of Parkville, Maryland; Michael Theodore Bennett, age 46, of Baltimore; Bolden and Nemec, conspired to unlawfully sell scrap metal from the Landfill and NWTS, while falsely representing to DPW that they were performing the jobs for which they were hired.
The defendants are all employed by DPW at either the Landfill or the NWTS. According to the indictment, the defendants and others used their personal cell phones during work shifts to let each other know when and where recyclable scrap metals were being dumped at the Landfill and NWTS. Hazelton and Bennett used their personal pick-up trucks during work hours to collect the scrap metal and transport it to a private salvage company, frequently making multiple trips during an eight-hour work shift. Hazelton and Bennett sold the scrap metal for as much as $300 per truckload, resulting in a loss of revenue to the City totaling approximately $893,000.
Hazelton and Bennett allegedly used part of the proceeds of the sale of the scrap metal to pay a fee to Bolden and other DPW employees for their help locating, setting aside, collecting and loading the scrap metal onto their trucks. According to the indictment, Hazelton and Bolden also paid Nemec in return for allowing them to collect and transport scrap metal from the Landfill. The indictment alleges that the defendants prepared and submitted false time and attendance records, which claimed they had been working, when they were instead illegally collecting and selling the scrap metal, called “junking.” For Hazelton and Bennett, this allegedly resulted in approximately $60,000 in wages being paid to them for work they did not perform.
The indictment charges Hazelton with filing false tax returns for tax years 2011 through 2014, by failing to report a total of $537,554 in income. Bennett is charged with failing to file tax returns for tax years 2011, 2012, and 2013, even though he had reportable income of at least $180,834, $152,494, and $146,154, respectively.
Finally, the indictment seeks the forfeiture of $953,000, alleged to be the value of the property stolen or obtained by fraud.
The defendants each face a maximum sentence of five years in prison for the conspiracy. Hazleton, Bennett and Nemec each face a maximum of 20 years in prison for wire fraud; and Hazleton, Bennett and Bolden also face a maximum of 10 years in prison for each count of theft from a government program. Hazleton faces a maximum of three years in prison for each of four counts of subscribing to a false tax return and Bennett faces a maximum of one year in prison for each of three counts of failure to file a tax return.
An initial appearance is scheduled at 2:30 p.m. today for Brady, Williams, Sharif, and at 3:00 p.m. for Glenn, Lowry, and Wilson in U.S. District Court in Baltimore. Washington, Nemec, Bolden, Hazelton, and Bennett had an initial appearance on the charges in their previous criminal complaints, and are released under the supervision of U.S. Pretrial Services. They are expected to be arraigned on the charges in the indictments in the next few weeks.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the FBI, IRS-CI, Baltimore Office of Inspector General, and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Martin J. Clarke and Gregory R. Bockin, who are prosecuting the case.
Altamont Man Pleads Guilty to Drug Distribution ChargeRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Ricky T. Garner, age 46, of Altamont, Illinois, pled guilty on Tuesday, June 2, 2015 to a federal indictment charging him with Possession of alpha-PVP with Intent to Distribute.
Garner is scheduled to be sentenced in U.S. District Court in East St. Louis on September 16, 2015 at 1:30 p.m.
"Alpha-PVP" is a prohibited controlled substance very similar to methamphetamine. It is chemically similar to methamphetamine and produces similar effects when ingested.
According to evidence introduced at Garner’s plea hearing, Illinois State Police troopers stopped Garner’s truck near Beecher City, Illinois on October 1, 2014. Garner was arrested because of outstanding arrest warrants. Police found 70 grams (2½ ounces) of alpha-PVP near Garner in the truck.
Garner has been continuously confined since his arrest last October.
At his sentence hearing in September, Garner faces maximum penalties of not more than 20 years imprisonment; a fine of not more than $1,000,000.00; and a term of not less than 3 years of supervised release.
The investigation which resulted in Garner’s arrest and conviction was conducted by an Illinois State Police Swat Team based in Effingham, Illinois.
The case is assigned to Assistant United States Attorney Robert L. Garrison.
Alleged Drug Kingpins Charged with Multi-State Operation That Imported 1,000 Kilograms of Heroin from Mexico into the United StatesRead the Press Release
A 108-count superseding indictment unsealed today charges 37 people (see chart) as participants in a multi-state heroin trafficking organization with ties to Mexico. The charges, which include conducting a continuing criminal enterprise, conspiracy to commit money laundering, 62 counts of money laundering and 43 substantive drug charges, were announced by U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent-in-Charge Gary Tuggle for the Drug Enforcement Administration (DEA).
Members of the Laredo Drug Trafficking Organization (DTO) are charged with the distribution and attempted distribution of multi-kilogram quantities of heroin in Philadelphia. According to the indictment, since 2008, the Laredo DTO has manufactured and imported heroin from its operation in Mexico and supplied other DTOs in Philadelphia, Chicago Camden, New Jersey, and elsewhere.
Brothers Antonio and Ismael Laredo, the alleged leaders of the Laredo DTO, are charged with engagement in a continuing criminal enterprise. They allegedly supervised 21 defendants who are charged with participation in a conspiracy to import heroin from Mexico into the United States and conspiracy to distribute kilogram quantities of heroin manufactured in and smuggled from Mexico into the United States. According to the superseding indictment, the Laredo DTO smuggled-in from Mexico approximately 1,000 kilograms of heroin using various concealment techniques including placing kilogram quantities of heroin in car batteries, car bumpers, concealed vehicle traps and sealed fruit and vegetable cans. Antonio and Ismael Laredo allegedly recruited and hired couriers in the United States to transport and deliver multi-kilogram shipments of heroin, originating in Mexico, to heroin distributors affiliated with the Laredo DTO located in Philadelphia, Camden, New Jersey, Chicago, Atlanta, and New York, New York. Defendant Antonio Marcelo Barragan allegedly served as a Mexican-based supplier of raw opium. Defendant Alejandro Sotelo allegedly served as a stash house operator and distributor of the DTO’s product in Chicago, where he arranged trans-shipment of multi-kilogram quantities of heroin to Philadelphia, New Jersey and New York.
It is further alleged that the Laredo DTO supplied street level heroin bagging and packaging operations in Philadelphia; that heroin, in quantities ranging from 15 to 50 kilograms at a time was regularly moved between the Chicago, operation and the Philadelphia operation; and that members of the DTO, including the Laredo brothers, used violence, such as assaults and kidnapping, threats of violence, including murder and arson and firearms to protect the DTO’s product and proceeds and to prevent members from withdrawing from the organization. The indictment alleges that the Laredo DTO supplied multi-kilogram quantities of heroin to other drug traffickers in the Philadelphia area, including the (Christian) Serrano DTO, charged elsewhere, the (Darbin and Gabriel) Vargas DTO and the Camden, New Jersey, based (Confesor) Montalvo organization, among others.
According to the indictment, members of the Laredo DTO would transport heroin shipments by various means, including car and train. In 2012, a courier concealed three kilograms of heroin inside a car battery for transport from Mexico to Philadelphia; another shipment of four kilograms was concealed inside a car speaker box; a shipment of 7.6 kilograms of heroin was concealed in sealed fruit and vegetable cans in Texas and the couriers were directed to deliver the heroin to defendants Darbin Vargas and Gabriel Vargas, of the Vargas DTO in Philadelphia, in September 2012. The indictment alleges that the Laredo brothers arranged for the manufacture and production of car batteries in Mexico containing concealed compartments to hold multiple kilograms of heroin which were then used to surreptitiously import heroin into the United States.
The indictment further alleges that the Laredo brothers had numerous relatives and associates set up “funnel accounts” that were used for the purpose of laundering the proceeds of the drug operation back to Mexico. According to the indictment, using a variety of money laundering techniques, including the use of the funnel accounts, wire transfers of funds and Western Union money grams, the DTO was able to launder at least $5 million of its heroin proceeds back to Mexico, where the Laredo brothers resided. It was further a part of the conspiracy that the Laredo brothers directed defendant Osmar Flores, doing business as Tri-Country Auto Sales Inc. in Rockford, Illinois, to collect and deposit large sums of cash representing proceeds of the Laredo DTO's heroin trafficking sales in the U.S. to the business bank account of Tri Country Auto Sales Inc. Portions of those funds were allegedly used to purchase multiple vehicles used to transport heroin from Mexico and bulk U.S. currency from the United States to Mexico, in concealed compartments. In addition, defendant Osmar Flores transmitted proceeds of the heroin operation back to the Laredos, both by wire transfers and bulk transfers of cash.
“This indictment and the arrests this morning are a significant victory in our efforts to combat drug trafficking,” said U.S. Attorney Memeger. “Because of the persistent and collaborative efforts of multiple law enforcement agencies across the country, a major supplier of heroin to the Philadelphia region is out of business.”
“Heroin is the top enforcement priority of the Drug Enforcement Administration’s Philadelphia Field Division,” said Special Agent-in-Charge Tuggle. “Dismantling this extremely violent international drug trafficking organization ended the flow of hundreds of kilograms of Mexican based heroin into the Philadelphia region and is a direct result of DEA’s resolve to make our communities safer. This was a cooperative effort with local, state and federal agencies. The flow of Mexican produced heroin into southeast Pennsylvania has been significantly impacted.”
If convicted, the Laredo brothers each face a mandatory sentence of life in prison, tens to hundreds of millions of dollars in fines, as well as a criminal forfeiture judgment to the United States of up to $60 million; most of the remaining drug trafficking defendants face mandatory minimum sentences of at least 10 years in prison (see attached chart).
The case was investigated by the DEA’s offices in Philadelphia, Camden, New Jersey, Mexico City, Mexico, Chicago and Rockford, Illinois, Newark, New Jersey, New York, New York, Tyler, Texas, Raleigh, North Carolina, Jefferson City and St. Louis, Missouri, Richmond, Virginia, and the DEA Special Operations Division; FBI in Philadelphia; U.S. Marshal Service; Homeland Security Investigations in Philadelphia and Richmond, Virginia; Immigration and Customs Enforcement; the Philadelphia Police Department; Darby Borough Police Department; SEPTA Transit Police Department; Berks County District Attorney’s Office; Bucks County District Attorney’s Office in New Jersey; the New Jersey Attorney General’s Office, Parole Board, Cherry Hill Police Department, Delaware River Port Authority Police, Camden County Prosecutor’s Office, Camden County Sherriff’s Office; in Illinois: Rockford Police Department, Will County Sheriff's Department, Skokie Police Department, Aurora Police Department, Oak Lawn Police Department, Addison Police Department, Prospect Heights Police Department, Chicago Police Department, Arlington Heights Police Department, West Chicago Police Department, Cook County Sheriff's Department and McHenry County Narcotics Task Force; in Texas: Texas Department of Safety, CID Mt. Pleasant, Mt. Pleasant Police Department; in Missouri: Missouri State Highway Patrol, Audrain County Sheriff’s Department, East Central Drug Task Force; in Virginia: the Mecklenberg County Commonwealth Attorney’s Office and the Virginia State Police; and the Orange County Sheriff’s Office in North Carolina. Assistance was provided by the U.S. Attorney’s Offices in the Northern District of Illinois and the Eastern District of Virginia. The case is being prosecuted by Assistant United States Attorney Joseph T. Labrum III.
Alleged Drug Kingpins Charged with Importing Heroin from MexicoRead the Press Release
PHILADELPHIA – A 108-count superseding indictment, unsealed today, charges 37 people (see chart) as participants in a multi-state heroin trafficking organization with ties to Mexico. The charges, which include conducting a continuing criminal enterprise, conspiracy to commit money laundering, 62 counts of money laundering, and 43 substantive drug charges, were announced by United States Attorney Zane David Memeger and Drug Enforcement Administration Special Agent-in-Charge Gary Tuggle. Members of the Laredo Drug Trafficking Organization (DTO) are charged with the distribution and attempted distribution of multi-kilogram quantities of heroin in Philadelphia. According to the indictment, since 2008, the Laredo DTO has manufactured and imported heroin from its operation in Mexico and supplied other DTOs in Philadelphia, Pennsylvania, in Camden, New Jersey, in Chicago, Illinois, and elsewhere.
Brothers Antonio and Ismael Laredo, the alleged leaders of the Laredo DTO, are charged with engagement in a continuing criminal enterprise. They allegedly supervised 21 defendants who are charged with participation in a conspiracy to import heroin from Mexico into the United States, and conspiracy to distribute kilogram quantities of heroin manufactured in, and smuggled from, Mexico into the United States. According to the superseding indictment, the Laredo DTO smuggled-in from Mexico approximately 1,000 kilograms of heroin using various concealment techniques including placing kilogram quantities of heroin in car batteries, car bumpers, concealed vehicle traps, and sealed fruit and vegetable cans. Antonio and Ismael Laredo allegedly recruited and hired couriers in the United States to transport and deliver multi-kilogram shipments of heroin, originating in Mexico, to heroin distributors affiliated with the Laredo DTO located in Philadelphia, Pennsylvania, Camden, New Jersey, Chicago, Illinois, Atlanta, Georgia, and New York, New York. Defendant Antonio Marcelo Barragan allegedly served as a Mexican-based supplier of raw opium. Defendant Alejandro Sotelo allegedly served as a stash house operator and distributor of the DTO’s product in Chicago, Illinois, where he arranged trans-shipment of multi-kilogram quantities of heroin to Philadelphia, New Jersey and New York.
It is further alleged that the Laredo DTO supplied street level heroin bagging and packaging operations in Philadelphia; that heroin, in quantities ranging from 15 to 50 kilograms at a time was regularly moved between the Chicago operation and the Philadelphia operation; and that members of the DTO, including the Laredo brothers, used violence, such as assaults and kidnapping, threats of violence, including murder and arson, and firearms to protect the DTO's product and proceeds and to prevent members from withdrawing from the organization. The indictment alleges that the Laredo DTO supplied multi-kilogram quantities of heroin to other drug traffickers in the Philadelphia area, including the
(Christian) Serrano DTO, charged elsewhere, the (Darbin and Gabriel) Vargas DTO, and the Camden, New Jersey based (Confesor) Montalvo organization, among others.
According to the indictment, members of the Laredo DTO would transport heroin shipments by various means, including car and train. In 2012, a courier concealed three kilograms of heroin inside a car battery for transport from Mexico to Philadelphia; another shipment of four kilograms was concealed inside a car speaker box; a shipment of 7.6 kilograms of heroin was concealed in sealed fruit and vegetable cans in Texas, and the couriers were directed to deliver the heroin to defendants Darbin Vargas and Gabriel Vargas, of the Vargas DTO in Philadelphia in September 2012. The indictment alleges that the Laredo brothers arranged for the manufacture and production of car batteries in Mexico containing concealed compartments to hold multiple kilograms of heroin which were then used to surreptitiously import heroin into the United States.
The indictment further alleges that the Laredo brothers had numerous relatives and associates set up “funnel accounts” that were used for the purpose of laundering the proceeds of the drug operation back to Mexico. According to the indictment, using a variety of money laundering techniques, including the use of the funnel accounts, wire transfers of funds, and Western Union money grams, the DTO was able to launder at least $5 million of its heroin proceeds back to Mexico, where the Laredo brothers resided. It was further a part of the conspiracy that the Laredo brothers directed defendant Osmar Flores, doing business as Tri-Country Auto Sales, Inc., in Rockford, Illinois, to collect and deposit large sums of cash representing proceeds of the Laredo DTO's heroin trafficking sales in the U.S. to the business bank account of Tri Country Auto Sales, Inc. Portions of those funds were allegedly used to purchase multiple vehicles used to transport heroin from Mexico and bulk U.S. currency from the United States to Mexico, in concealed compartments. In addition, defendant Osmar Flores transmitted proceeds of the heroin operation back to the Laredos, both by wire transfers and bulk transfers of cash.
“This indictment and the arrests this morning are a significant victory in our efforts to combat drug trafficking,” said Memeger. “Because of the persistent and collaborative efforts of multiple law enforcement agencies across the country, a major supplier of heroin to the Philadelphia region is out of business.”
“Heroin is the top enforcement priority of the Drug Enforcement Administration’s Philadelphia Field Division,” said Special Agent-in-Charge Gary Tuggle. “Dismantling this extremely violent international drug trafficking organization ended the flow of hundreds of kilograms of Mexican based heroin into the Philadelphia region and is a direct result of DEA’s resolve to make our communities safer. This was a cooperative effort with local, state and federal agencies. The flow of Mexican produced heroin into southeast Pennsylvania has been significantly impacted.”
If convicted, the Laredo brothers each face a mandatory sentence of life in prison, tens to hundreds of millions of dollars in fines, as well as a criminal forfeiture judgment to the United States of up to $60 million; most of the remaining drug trafficking defendants face mandatory minimum sentences of at least 10 years in prison (see attached chart).
The case was investigated by the Drug Enforcement Administration’s offices in Philadelphia, PA, Camden, NJ, Mexico City, Mexico, Chicago and Rockford, IL, Newark, NJ, New York, NY, Tyler, TX, Raleigh, NC, Jefferson City and St. Louis, MS, Richmond, VA, and the DEA Special Operations Division; FBI, Philadelphia; U.S. Marshal Service; Homeland Security Investigations in Philadelphia, PA and Richmond, VA; Immigration and Customs Enforcement; the Philadelphia Police Department; Darby Borough Police Department; SEPTA Transit Police Department; Berks County District Attorney’s Office; Bucks County District Attorney’s Office; in New Jersey: the N.J. Attorney General’s Office, N.J. Parole Board, Cherry Hill Police Department, Delaware River Port Authority Police, Camden County Prosecutor’s Office, Camden County Sherriff’s Office; in Illinois: Rockford Police Department, Will County Sheriff's Department, Skokie Police Department, Aurora Police Department, Oak Lawn Police Department, Addison Police Department, Prospect Heights Police Department, Chicago Police Department, Arlington Heights Police Department, West Chicago Police Department, Cook County Sheriff's Department, and McHenry County Narcotics Task Force; in Texas: Texas Department of Safety, CID Mt. Pleasant, Mt. Pleasant Police Department; in Missouri: Missouri State Highway Patrol, Audrain County Sheriff’s Department, East Central Drug Task Force; in Virginia: the Mecklenberg County Commonwealth Attorney’s Office and the Virginia State Police; and the Orange County Sheriff’s Office in North Carolina. Assistance was provided by the U.S. Attorney’s Offices in the Northern District of Illinois and the Eastern District of Virginia. The case is being prosecuted by Assistant United States Attorney Joseph T. Labrum, III.
Alien Smuggler Who Falsified His Military Record Ends up with 30 Months in the Federal BrigRead the Press Release
SAN DIEGO – After a six week continuance to investigate this military record, Defendant Scotty Kamakahohie White was sentenced by Judge Jeffrey T. Miller to 30 months in federal prison and three years of supervised release for his role smuggling an Alien into the United States.
At his initial sentencing hearing on April 17, 2015, White claimed to have served with the United States Army from 2001 until 2006, and to have received an honorable discharge at the rank of Sergeant after three separate tours of duty in Iraq. At that time, Judge Miller told White that his honorable service to the United States in a time of war would be a major consideration in his favor at sentencing. After his record was questioned by the Government, the Court continued the sentencing hearing so that White’s military records could be reviewed.
As revealed today in Court, White’s military record was very different from what he had claimed. Rather than serving for five years with three total tours of duty in a war zone, White served less than 10 months. Moreover, he had not been involved in any combat operations and was discharged as a Private E-1, not a Sergeant. When confronted with his actual military record, White admitted that he actually had gone AWOL and been kicked out of the Army without ever once setting foot in Iraq. With his false statements exposed, White agreed to not oppose a 30-month sentence for his crimes.
DEFENDANTS Case Number: 15cr0028-JM Scotty Kamakahohie White Age: 30 Parker, Arizona CHARGESTransportation of Aliens – Title 8, U.S.C., Section 1324(a)(1)(A)(ii)
INVESTIGATING AGENCIES
Maximum penalty: 10 years’ imprisonment and $250,000 fineUnited States Border Patrol
1 June 2015
Wife of Former Executive at Collin Street Bakery Pleads GuiltyRead the Press Release
DALLAS — The wife of a former executive at the Collin Street Bakery (Bakery) in Corsicana, Texas, appeared Friday before U.S. Magistrate Judge Paul D. Stickney and entered a guilty plea to a conspiracy offense stemming from her husband’s admitted $16 million embezzlement from the Bakery, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Kay Jenkins, 64, of Corsicana, pleaded guilty to one count of conspiracy to commit money laundering. The maximum statutory penalty for that offense is 10 years in federal prison and a fine not to exceed $250,000 or the pecuniary gain to the defendant or loss to the defendant. However, according to plea documents filed in her case, if the Court accepts the plea agreement, the parties agree that the appropriate maximum term of imprisonment is 36 months’ imprisonment. Kay Jenkins remains on bond pending sentencing set for September 16, 2015, before U.S. District Judge Ed Kinkeade.
Jenkins’ husband, Sandy Jenkins, 66, who remains in federal custody, served as the Corporate Controller for the Bakery from February 1998 to June 21, 2013. He was terminated on June 21, 2013, after the Bakery discovered the fraud. He pleaded guilty in May 2014 to one count of mail fraud, one count of conspiracy to commit money laundering, and one count of making a false statement to a financial institution. He faces the following maximum statutory penalties: 20 years in federal prison and a $250,000 fine on the mail fraud conviction; 10 years in federal prison and a $1 million fine on the conspiracy conviction; and 30 years in federal prison and $1.5 million fine on the false statements conviction. He also agreed to a forfeiture money judgment against him of at least $16,649,786, and he agreed to pay full restitution to the Bakery for the entire scope of his criminal conduct. He is scheduled to be sentenced on June 24, 2015, by Judge Kinkeade.
According to plea documents filed in Kay Jenkins’s case, she agreed that the government could readily prove at trial that beginning at least as early as December 2004, and continuing until his termination from the Bakery in June 2013, Sandy Jenkins engaged in a massive scheme to defraud the Bakery in order to financially benefit he and his wife. Over the course of time, Sandy Jenkins embezzled more than $16 million from the Bakery that was used to fund an extravagant lifestyle for the couple. Kay Jenkins did not participate in the embezzlement of funds from the Bakery.
Kay Jenkins admitted that during this period she conspired with her husband to engage in monetary transactions with property derived from a criminal activity. Kay Jenkins agreed that the government could readily prove at trial that the funds involved in these monetary transactions were derived from her husband’s embezzlement of funds from the Bakery.
Starting in approximately 1998, Sandy Jenkins began working at the Bakery with an annual salary of approximately $25,000. In approximately 2000, Sandy Jenkins was promoted to Controller, a position he held until his termination. At no point during his employment at the Bakery did his salary exceed approximately $50,000 per year. Beginning at the approximate time Sandy Jenkins began embezzling money from the Bakery, Kay Jenkins did not work outside of the home. She knew that their income was insufficient to pay for their extravagant lifestyle.
Sandy and Kay Jenkins primarily spent the embezzled funds by making charges on an American Express Centurion credit card that charges a $2,500 yearly service fee but has no credit limit. Both Sandy and Kay Jenkins had these cards, and between 2005 and 2013, they incurred charges totaling approximately $11,120,449 with American Express. Kay Jenkins admits that Sandy Jenkins paid the American Express bill at the end of each billing period using embezzled funds from the Bakery.
Between 2005 and 2013, Sandy and Kay Jenkins incurred charges totaling approximately $1,941,596 on Citibank credit cards and charges totaling approximately $1,196,773 on a Neiman Marcus credit card. Kay Jenkins further admits that she and Sandy Jenkins purchased significant amounts of watches, jewelry and other precious items.
While Sandy Jenkins never specifically discussed with Kay Jenkins that he was embezzling funds from the Bakery, Kay Jenkins admits she deliberately closed her eyes to what would otherwise have been obvious to her. Kay Jenkins knew that Sandy Jenkins provided different explanations to different people when attempting to explain the source of funds, and she knew that some of those explanations were false.
The FBI conducted the investigation. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution and Assistant U.S. Attorney Melissa Childs is handling the forfeiture.
United States Settles False Claims Act Allegations Against Jacksonville-Based Compounding PharmacyRead the Press Release
Jacksonville, FL – United States Attorney A. Lee Bentley, III announces today that the United States has settled allegations that a Jacksonville-based compounding pharmacy knowingly billed the government for compounding pain prescriptions that came from an improper referral source. The allegations resolved included liability under the False Claims Act (FCA).
The government has reached a settlement with the defendant, MediMix, and the top-referring physician – Dr. Ankit Desai. In reaching this settlement, the parties resolved allegations that, from January 1, 2009, until December 2014, Dr. Desai sent hundreds of prescriptions to MediMix. These prescriptions were not appropriately reimbursable because Dr. Desai was married to a Senior Vice President at MediMix. Healthcare providers are generally prohibited from referring business to entities where they have a financial interest. The government agreed to accept $3,775,458 to resolve these allegations.
Today’s settlement involved false claims submitted to the TRICARE program. This case was developed by proactively mining health care reimbursement data. In mining through this data, MediMix was identified as a top biller of compounding pain prescriptions.
“The United States Attorney’s Office is committed to protecting TRICARE and other federal health care programs from fraud,” said U.S. Attorney Bentley. “By bringing FCA cases such as this, we recover funds obtained through fraud and deter others from attempting similar schemes.”
"This settlement highlights another step forward by the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program," said Special Agent in Charge John F. Khin, Southeast Field Office. "Fraud and abuse by pharmacies and medical providers which bill for compounded pain prescriptions is a significant threat to the DoD health care system. TRICARE beneficiaries must be made aware that any medications that are not individually prescribed or dispensed by a bona fide treating physician for a specific medical condition can be ineffective or unsafe."
"This settlement is demonstrative of our joint efforts to investigate allegations of health care fraud, and is a strong example of how collaborative efforts lead to success," stated Assistant Special Agent in Charge Lawrence Koleff with the FBI Jacksonville Division.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was investigated by Defense Criminal Investigative Service, the Federal Bureau of Investigation, the Program Integrity Office at the Defense Health Agency, and Assistant United States Attorney Jason Mehta.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
U.S. Department of Justice’s COPS Office to provide technical assistance to Pasco Police DepartmentRead the Press Release
PASCO, WASHINGTON – In response to a request for assistance from United States Attorney Michael C. Ormsby and Pasco Police Chief Robert Metzger, the Office of Community Oriented Policing Services today announced it will offer technical assistance and training to the Pasco Police Department.
"The lack of trust between the community and the police is at the core of much tension and unrest throughout the nation. The recent tragic shooting of Antonio Zambrano-Montes in Pasco has brought that fact to light and reveals the need for the Pasco Police Department to enhance its community policing efforts," said COPS Office Director Ronald Davis. "It is absolutely critical that the police department do all it can to strengthen police and community relations and rebuild the community’s trust. I applaud Pasco Police Chief Metzger for his leadership in taking this necessary step."
"To be successful, any community oriented policing program must be grounded on trust and communication," said Michael C. Ormsby, United States Attorney for the Eastern District of Washington. "The steps initiated by the COPS program today are important tools to strengthen and enhance trust and communication between the community and the police department. Without a doubt, establishing and maintaining a safe community is the overarching goal of this, and every, community oriented policing program."
Through its Critical Response Technical Assistance program, the COPS Office will work with the Pasco Police Department over the next 12 months, and provide training in community policing and problem-solving, fair and impartial policing and procedural justice. Using a peer-to-peer support and exchange program, the COPS Office will also connect the police department with top law enforcement leaders and subject matter experts in the field to learn the best practices in community policing and crime reduction.
The Critical Response Technical Assistance initiative is a grant program within the COPS Office that is designed to provide immediate assistance to agencies facing crisis. CR-TA has been deployed in jurisdictions such as Ferguson, Mo., Detroit, Mich., Seattle, Wash., New Orleans, La. and San Diego, Calif.
The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of more than 126,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance. For additional information about COPS, please visit www.cops.usdoj.gov.
U.S Attorney’s Office Notifies Summer Camps of Requirements to Accommodate Children with DisabilitiesRead the Press Release
As summer camps prepare to open, U.S. Attorney Carmen Ortiz reminded camps across Massachusetts of their obligation to make their facilities and programs accessible to all children, including those with disabilities. Summer camps, like other places of public accommodation, are required under the Americans with Disabilities Act (ADA), to make reasonable accommodations for children with disabilities.
“Summer camps provide valuable opportunities for children to grow more independent, build confidence, develop leadership qualities, practice positive risk taking, and foster lifelong skills,” said United States Attorney Carmen M. Ortiz. “The law requires camps to provide equal opportunities to disabled children whose needs can be reasonably accommodated. As we mark the 25th anniversary of the ADA, upholding its standards in all environments is a priority of the Department of Justice.”
The U.S. Attorney’s Office seeks to help ensure that children with disabilities receive an equal opportunity to attend and enjoy the offerings at summer camps. To aid this effort, the attached flyer was recently distributed to hundreds of Massachusetts summer camps reminding them of their obligations under the ADA enacted in 1990.
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.
In 2010, to coordinate the efforts of the U.S. Attorney’s Office in enforcing federal civil rights laws, U.S. Attorney Carmen Ortiz formed the Civil Rights Enforcement Team (CRET) which is composed of Assistant U.S. Attorneys and professional staff from the criminal and civil divisions of the office. The primary goals of the CRET is to develop a comprehensive enforcement strategy to address civil rights issues that arise in the District of Massachusetts; to uphold the constitutional rights of all residents, particularly some of the most vulnerable members of society; and to enforce federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status, and national origin.
Additional information about the ADA is available at www.ADA.gov, or through contacting the U.S. Attorney’s Office at 617-748-3100.
Two Individuals Plead Guilty to Conspiring to Defraud Consumers through Fraudulent Debt Relief Services FirmsRead the Press Release
Two individuals pleaded guilty today for their roles at fraudulent debt relief services companies that offered to settle credit card debts but instead took victims’ payments as undisclosed up-front fees, the Justice Department and U.S. Postal Inspection Service (USPIS) announced.
Athena Maldonado, 30, and Christopher Harati, 31, both of Orange County, California, pleaded guilty to a one-count information alleging conspiracy in connection with debt relief companies known as Nelson Gamble & Associates (Nelson Gamble) and Jackson Hunter Morris & Knight LLP (Jackson Hunter). According to the information filed in the case, the defendants and their co-conspirators portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors. Clients made monthly payments expecting the money to go toward settlements. The companies instead took an amount equal to at least 15 percent of clients’ total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees.
“Debt relief service scams prey on vulnerable consumers trying to climb out of tough financial situations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department will aggressively pursue the criminals who operate these schemes.”
Maldonado admitted that she acted as the “legal department” for both companies, and used multiple aliases when responding to complaints submitted by state attorney general offices, the Better Business Bureau and private attorneys. Maldonado admitted that, after Nelson Gamble changed its name to Jackson Hunter, she responded to consumer complaints by falsely stating, among other things, that the two companies were not related and that Jackson Hunter could not refund money paid to Nelson Gamble.
Harati admitted that he worked as a client relations manager for the companies and handled complaint calls from clients. He admitted he told customers that Nelson Gamble and Jackson Hunter were separate companies, falsely stated that Jackson Hunter was a nationwide law firm with years of experience and made other misrepresentations designed to convince customers to stay with the company.
The defendants each face a statutory maximum sentence of five years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, along with mandatory restitution. Their sentencing dates have not been set.
On Dec. 3, 2014, a grand jury in Santa Ana, California, returned a 22-count indictment charging Jeremy Nelson, Elias Ponce and John Vartanian, all of Orange County, for mail fraud, wire fraud, and conspiracy to commit mail and wire fraud in the same fraudulent scheme. The trial in that case is scheduled to begin on Feb. 16, 2016, in Los Angeles.
The Federal Trade Commission (FTC) brought a civil case against Nelson Gamble, Jackson Hunter and other defendants in September 2012, alleging that the defendants falsely claimed they would reduce consumers’ unsecured debt by 50 percent or more, made unauthorized charges to their bank accounts and called phone numbers listed on the National Do Not Call Registry. For more information about debt relief firms, the FTC encourages consumers to review this page on their website.
Principal Deputy Assistant Attorney General Mizer commended the USPIS team assigned to the Civil Division’s Consumer Protection Branch for their investigative efforts, and thanked the U.S. Attorney’s Office of the Central District of California for their contributions to the case. The case is being prosecuted by Trial Attorney Alan Phelps of the Consumer Protection Branch.
Suburban Man Indicted for International Parental KidnappingRead the Press Release
CHICAGO ― A Skokie man was indicted last week for international parental kidnapping of his three children and traveling with them to Turkey without their mother’s consent, permission or knowledge. MURTAZA ALI, 44, of Skokie, was charged with one count of international parental kidnapping by a federal grand jury. Ali was arrested on May 6 upon his return to O’Hare International Airport with the children, and remains in federal custody. Ali is scheduled to be arraigned Tuesday, June 2 at 10:00, in front of U.S. District Judge Samuel Der-Yeghiayan.
According to the court documents, Ali is a Pakistani-national, and with individual A, has three minor children. According to Individual A, on the evening of May 2, 2015, she was at a social gathering. Ali, along with the three children, was scheduled to pick her up after the event. He did not pick her up, and when she arrived home, Ali and the three children were not home, the house was a mess, and the passports and luggage were missing. An investigation by Skokie Police Department determined Ali’s last known location was believed to be near O’Hare Airport.
Ali, along with the three children, boarded a Turkish Airlines flight at O’Hare Airport and arrived in Istanbul, Turkey on May 2. According to Individual A, Ali called her from Turkey and stated that he had the three children and that he was traveling to Pakistan. According to information obtained from Turkish Airlines and other law enforcement agents, there was reason to believe that Ali was planning to board a flight from Turkey bound for Karachi, Pakistan, with the children. He was arrested on a federal complaint when he and his three children returned to the United States on May 6.
The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and William A. Ferrara, Chicago Director of Field Operations, Customs and Border Protection. Skokie Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Heather McShain.
International parental kidnapping carries a maximum sentence of three years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
South Florida Resident Charged in Investor Fraud SchemeRead the Press Release
A Miami-Dade County resident was charged, by Information in the Southern District of Florida, for participating in a Ponzi scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation, and Commissioner Drew J. Breakspear with Florida’s Office of Financial Regulation (OFR), made the announcement.
Phil D. Williamson, 48, of Palmetto Bay, was charged for his participation in a fraud scheme. The defendant was charged with Investment Advisor Fraud, in violation of Title 15, United States Code, Section 80b-6, an offense punishable by up to five years in prison.
According to the Information, Williamson misled investors into believing that he was a registered investment advisor working for a nationally recognized financial services firm. During the course of the fraud scheme, seventeen individuals invested over two million dollars with Williamson. Unbeknownst to them, Williamson was transferring their money into bank accounts in the names of two companies he owned and operated, Sterling Investment Fund, LLC (“Sterling Investment”) and Sterling Financial Partners, Inc. (“Sterling Financial”). Williamson misappropriated and misused much of the money he promised to invest. In order to conceal the fraud from investors, Williamson created false statements of account to lull investors into falsely believing that their principal was safe and generating a positive return. Williamson further lulled investors by engaging in a Ponzi scheme, paying early investors with money he received from newly solicited investors.
A complaint filed by the Securities and Exchange Commission in a companion case has charged Williamson with violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940, and Rule 206(4)-8 thereunder. The SEC is seeking disgorgement of ill-gotten gains, and a permanent injunction against Williamson.
The OFR issued a Stipulation and Consent Agreement with Williamson involving various Florida rules and statutes to include engaging in outside business activity, selling away, unregistered activity, selling unregistered securities, a Ponzi scheme, and several counts of fraud. The OFR is seeking payment of restitution owed to investors and a permanent bar against Williamson.
Mr. Ferrer commended the investigative efforts of the FBI and OFR. The case is being prosecuted by Assistant U.S. Attorney Alejandro Soto.
An Information contains mere allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
South Carolina Sex Offender Sentenced for Failing to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States District Judge Marcia Morales Howard has sentenced Nicodemus Darnell Jefferson (40, Jacksonville) to 16 months in federal prison for failing to register as a sex offender after traveling to Florida from Maryland. He was also ordered to serve a five-year term of supervised release following his incarceration. Jefferson pleaded guilty on March 27, 2015.
According to court documents, Jefferson was convicted in 1998 of criminal sexual conduct with a minor in Charleston County, South Carolina. Subsequent to his conviction, and between March 17, 2014, and September 30, 2014, Jefferson traveled from Maryland to Florida, where he has since resided. He failed to register in Florida as a sex offender as required by the Sex Offender Registration and Notification Act. On September 30, 2014, Jefferson was arrested at his residence. At the time of his arrest, he acknowledged that he had been living there since June 2014. Jefferson had obtained a Florida identification card on August 4, 2014, that referenced a different Jacksonville address as his residence.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders.
This case was investigated by the Jacksonville Sheriff’s Office, the United States Marshals Service, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Somerset County, New Jersey, Man Sentenced to 34 Years in Prison for Production and Transportation of Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Watchung, New Jersey, man was sentenced today to 408 months in prison for producing and transporting sexually explicit videos of children, U.S. Attorney Paul J. Fishman announced.
Patrick T. Deck, 54, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of transportation of child pornography. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Aug. 12, 2012, Deck was arrested at the Land of Make Believe amusement park in Hope, New Jersey, by the N.J. State Police for allegedly filming children, without their or their parents’ knowledge, in the men’s restroom. The following day, law enforcement officers executed a search warrant at Deck’s home in Watchung and discovered multiple videos and images containing child sexual abuse on Deck’s computers and other electronic devices.
Deck also admitted that between 1997 and 2010, he transported two minors, beginning when they were approximately 11 years old, to locations across the country, including New Jersey, New York, Pennsylvania, Colorado and Montana for the purpose of filming the minors in sexually explicit conduct. Deck produced the videos and images of child pornography and then transported those images back to his home in Watchung. In 1988, Deck was convicted in N.J. Superior Court, Burlington County, of two counts of endangering the welfare of a child. Those convictions arose out of prior incidents where Deck photographed or filmed minors engaged in prohibited sexual acts.
As part of his guilty plea, Deck agreed to forfeit the video cameras and other devices that he used to commit the offense. He will also be required to register as a sex offender.
In addition to the prison term, Judge Salas sentenced Deck to serve a lifetime of supervised release.
U.S. Attorney Fishman credited special agents of the Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Warren County Prosecutor’s Office, under the direction of Prosecutor Richard T. Burke, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: James Wronko Esq., Somerville, New Jersey
Sangerville Man Sentenced to Ten Years for Pharmacy RobberyRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that James Stile, 58, of Sangerville, Maine, was sentenced on Friday in U.S. District Court by Judge John A. Woodcock, Jr., to ten years in prison, to be followed by five years of supervised release for pharmacy robbery. He was also ordered to pay $13,306.93 in restitution. Stile pled guilty on October 31, 2014.
Court records and proceedings reveal that on September 12, 2011, Stile entered the E.W. Moore and Sons pharmacy in Bingham, Maine, wearing a dust mask and purple gloves, and pulled a sawed-off shotgun from his pants. Stile pointed the gun at the owner and the three employees who were behind the pharmacy counter. He then ordered the three employees to lie on the floor behind the counter. A customer subsequently entered the store and Stile ordered the customer to go behind the pharmacy counter with the employees. Stile told the owner of the pharmacy to fill a bag with narcotics. As he did so, Stile tied the hands and feet of the customer and the three employees with zip ties. Once the bag was filled with narcotics, Stile instructed the owner to lie down on the floor. Stile then tied the hands and feet of the owner with zip ties and fled the store.
The pharmacist was able to free himself shortly after the robbery and saw the defendant depart in a minivan. The minivan was traced to Stile’s residence in Sangerville. A search warrant was executed at Stile’s residence early the next morning. Among the items found in the minivan on the property was a used dust mask and purple gloves. Three pieces matching the color and material of those gloves were also found at the pharmacy. Stile’s DNA was found in the gloves. In the defendant’s house, officers found the shoes and jacket that the defendant wore during the robbery.
In imposing sentence, Judge Woodcock noted that the violence and planning involved in this pharmacy robbery distinguished it from the other pharmacy robbery cases and noted that the victims must have wondered, as they lay tied up on the ground with a masked man pointing a sawed-off shotgun at them, whether this would be their last day on earth.
U.S Attorney Delahanty commended the investigation that was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Somerset County Sheriff’s Office; the Piscataquis County Sheriff’s Office; the Maine State Police; and the Maine Drug Enforcement Agency. “Their cooperative work led to the quick identification of Stile as the perpetrator.” “This robbery occurred over 3½ years ago at a time when the State of Maine was seeing a substantial increase in pharmacy robberies which became a priority for both federal and state law enforcement authorities,” said Delahanty. “This was definitely one of the most violent pharmacy robberies in Maine. We are very fortunate that no one was physically injured. Stile was quickly found and arrested because of the diligent efforts of multiple county, state and federal law enforcement agencies. This kind of cooperation has time and again provided positive results.”Randolph County woman sentenced for cocaine traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Arica M. Boyles, 27, of Kerens, West Virginia, was sentenced today to 70 months in prison for cocaine trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Arica Boyles and her husband John Boyles collaborated to sell crack cocaine in Tucker County, West Virginia. They each pled guilty in May 2014 to one count of “Aiding and Abetting the Distribution of Cocaine Base.” John Boyles was sentenced to 97 months in prison in November 2014 stemming for the couple’s cocaine trafficking activities.
Assistant U.S. Attorney Stephen Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crime Task Force and the Pocahontas County Sheriff’s Department investigated.
U.S. District Judge John Preston Bailey presided.
Qatar Military Official and Wife Charged with Engaging in Forced LaborRead the Press Release
In San Antonio, a military official from Qatar and his wife, a citizen of the United Arab Emirates, are charged with engaging in forced labor by obtaining the labor and services of two persons by means of force, threats of force, physical restraint, and threats of physical restraint, announced Acting United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge James Spero, Homeland Security Investigations (HSI) in San Antonio.
According to a federal criminal complaint filed this morning, Hassan Salem H. M. Al Homoud and his wife, Zainab Al Hosani, along with their two children, currently reside in San Antonio while Al Homoud is attending military training at Camp Bullis. In mid-2014, the defendants allegedly brought with them to the U.S. two individuals--a housemaid and a servant who have since worked for the family. The housemaid is a citizen of Indonesia; the servant is a citizen of Bangladesh. Both were in the U.S. on visas sponsored by Al Homoud.
The criminal complaint alleges that the defendants housed the workers in primitive conditions, restricted their ability to move or travel, and provided them with limited amounts of food. In order to restrict their liberty to move and travel and to leave their place of employment, Al Homoud and Al Hosani withheld the payment of wages to both workers and deprived them of possession of cell phones, passports, and visas. Al Hosani also threatened the workers with arrest and incarceration in Qatar if they failed to perform their work obligations.
The workers’ conditions were discovered by an officer of the San Antonio Police Department in early April, when he encountered one of the workers in apparent distress along Camp Bullis Rd. This led law enforcement officers to a nearby apartment occupied by the workers, furnished with only a pallet on the floor for sleeping.
On Saturday, May 30, 2015, special agents of the Department of Homeland Security, Immigration and Customs Enforcement Homeland Security Investigations (HSI), arrested the defendants in San Antonio. Both are scheduled to appear before U.S. Magistrate Judge John Primomo in San Antonio this afternoon. Upon conviction, the defendants face up to 20 years in federal prison and/or a maximum fine of $250,000.
Assistant United States Attorney Bettina Richardson is prosecuting this case on behalf of the Government.
It is important to note that a criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendants are considered innocent until proven guilty in a court of law.
Plano Man Sentenced for Pipeline Bombing IncidentRead the Press Release
PLANO, Texas - A 35-year-old Plano, Texas man has been sentenced to 20 years in federal prison in relation to an incident involving an explosive device in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Anson Chi pleaded guilty on June 3, 2013, to possession of an unregistered firearm or explosive device and malicious use of explosive material and was sentenced to 240 months in federal prison today by U.S. District Judge Richard A. Schell. The Court applied a terrorism enhancement and did an upward departure of the sentencing guidelines. This enhancement classifies Chi as a domestic terrorist.
According to information presented in court, on June 18, 2012, Chi possessed a destructive device or explosive that was not registered in the National Firearms Registration and Transfer Record. The explosive device was manufactured by Chi through the combination of chemicals to create methyl nitrate. Methyl nitrate is a highly volatile explosive capable of inflicting significant damage to persons or property. Chi admitted to obtaining the chemical formula for methyl nitrate and documents related to explosives from the Internet. A superseding indictment was returned by a federal grand jury on Feb. 14, 2013, charging Chi with these violations.
Chi also admitted to intentionally damaging an Atmos Energy pipeline by attaching the explosive device to the pipeline and igniting it. Chi was ordered to pay restitution to Atmos in the amount of $28,127.77.
This case was investigated by the FBI, the FBI-Joint Terrorism Task Force, the Plano Police Department, and the ATF and prosecuted by Assistant U.S. Attorney M. Andrew Stover.
Owner of Fashion District Clothing Company Pleads Guilty to Customs, Immigration and Money Laundering OffensesRead the Press Release
Chinese Immigrant to Lose U.S. Citizenship as a Result of His Illegal Behavior
LOS ANGELES – The owner of a Fashion District import-export business pleaded guilty late Friday afternoon to federal charges stemming from an investigation into “Black Market Peso Exchange” schemes that are used by international drug cartels to launder and send narcotics proceeds out of the United States.
The owner of businesses known as Yili Underwear and Gayima Underwear pleaded guilty in United States District Court pursuant to a plea agreement that requires him to forfeit hundreds of thousands of dollars in assets and will result in the loss of his United States citizenship.
Xilin Chen (陳喜林), 55, of Temple City, pleaded guilty to three felony counts – knowingly passing false documents through a customhouse of the United States, conspiracy to launder money, and unlawful procurement of citizenship.
In a plea agreement filed with the court last week, Xilin Chen acknowledged that he received bulk cash at his business that he had good reason to believe was from illegal activity, specifically drug trafficking. Xilin Chen further acknowledged that he deliberately avoided learning the truth about the bulk cash that was being delivered to his businesses.
The investigation into Chen’s companies was part of a larger investigation into Black Market Peso Exchange (BMPE) schemes in the Fashion District. In a BMPE scheme, operatives for a drug trafficking organization use money derived from the sale of narcotics to purchase goods, typically using large sums of cash. The goods are shipped to another country, where they are sold, and the funds are delivered to the drug trafficking organization. These BMPE schemes – which is a type of trade-based money laundering – are often used by Mexico-based drug trafficking organizations to collect proceeds from their drug sales in the United States without having to take the risk of smuggling large amounts of U.S. currency across the Mexican border and without having to wire the funds through financial institutions, both of which carry the threat of authorities detecting the illegal source of the money.
Xilin Chen pleaded guilty to a customs offense related to a form he filed with U.S. Customs and Border Protection in which he claimed merchandise imported from China was worth $86,635, even though the true value of the clothing was $175,535. In the plea agreement, Xilin Chen admitted that the purpose of undervaluing the merchandise was to defraud the United States out of the proper duty owed on the merchandise. Because the clothing was then sold for prices lower than if the true and correct duty had been paid, the proceeds of the sales were illegal and depositing the proceeds into U.S. banks and then wire transferring some of the funds to China to pay for additional merchandise constituted money laundering.
In his plea agreement, Xilin Chen further acknowledged that on three occasions he accepted bulk cash as payment for clothing from an undercover agent posing as someone using the proceeds of narcotics trafficking to purchase merchandise. Xilin admitted the he was aware, or should have been aware, of the high probability that he was accepting money derived from narcotics trafficking, but he “deliberately avoided asking questions or confirming the truth,” according to the plea agreement.
Xilin Chen also pleaded guilty to illegally procuring citizenship in 2012 when he declared he was not involved in criminal activity, even though he was involved in customs fraud and money laundering.
Xilin Chen’s son – Chuang Feng Chen (aka “Tom” and 陳創鋒), 25, also of Temple City – also pleaded guilty Friday afternoon to conspiracy to pass false documents through a customhouse of the United States.
The Chens pleaded guilty before United States District Judge Percy Anderson, who is scheduled to sentence the defendants on August 24.
As part of this case, the Chens have agreed to forfeit to the United States proceeds from the sales of the building that houses the underwear company, two residences in Temple City and more than $435,000 that was seized during the execution of search warrants and seizure warrants last fall.
As part of the agreement with the Chens, prosecutors have asked Judge Anderson to dismiss charges against Aixia Chen, who is Xilin Chen’s daughter.
The case involving the Chens was investigated by the Drug Enforcement Administration and IRS – Criminal Investigation under the auspices of the Southwest Border Initiative.
Release No. 15-056
Ohio woman convicted of heroin traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Amanda Elaine Wright, 29, of East Liverpool, Ohio, was convicted of heroin trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Wright collaborated with other individuals to possess and distribute heroin in Hancock County, West Virginia throughout 2013 and 2014.
Wright pled guilty today to one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Heroin.” She faces up to 20 years in prison and a fine of up to $1,000,000. 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 Stephen Vogrin prosecuted the case on behalf of the government. The Hancock, Brooke, Weirton Drug and Violent Crimes Task Force, a HIDTA-funded initiative, led the investigation.
Senior U.S. District Judge Frederick P. Stamp presided.
Newport News Man Sentenced for Armed Bank RobberyRead the Press Release
Defendant possessed loaded gun and demanded $40,000
NEWPORT NEWS, Va. – Harrison Nefale Branche, 36, of Newport News, Va., was sentenced today to 117 months in prison, followed by five years of supervised release for armed bank robbery and use, carry and possession of a firearm during a crime of violence.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia and Charles E. Smith, Special Agent in Charge of the ATF Washington Field Office made the announcement after sentencing by U.S. District Judge Robert G. Doumar.
Blanche waived indictment and pled guilty to a criminal information on February 2, 2015. According to court documents, on September 11, 2014, Branche robbed the Virginia Educator’s Credit Union, located at 812 Main Street in Newport News. While brandishing a loaded Hi-Point, semi-automatic pistol, he presented a note to the teller stating he had a gun and demanded $40,000. The teller provided approximately $8,200 and Branche fled the scene. He then discarded his clothes in the storm drain on a public street. When officers encountered him after leaving the credit union he reached into his waistband to retrieve a firearm. Officers ordered him to drop the firearm and he threw it to the ground. The firearm, and approximately $7,800 in U.S. currency located in Branche’s pockets, were recovered. He later admitted his involvement in the robbery and apologized to the bank teller.
This case was investigated by the ATF and the Newport News Police Department. Special Assistant U.S. Attorneys Yvonne Garcia and Ivana Nizich from the Organized Crime and Gang Section of the Justice Department’s Criminal Section, prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:14cr71.
New York Tax Return Preparer Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
A Staten Island, New York, tax return preparer and business owner pleaded guilty today in U.S. District Court in the Eastern District of New York to preparing false federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents and statements, Alabi Gbangbala, 51, was the operator of Broadfield, a tax return preparation business located in Staten Island. For tax years 2008 and 2009, Gbangbala prepared false individual income tax returns for Broadfield clients by, among other things, falsifying self-employment business receipts and losses on Schedules C and inflating or fabricating charitable contributions and unreimbursed employee expenses on Schedule A. Gbangbala was responsible for filing false tax returns on behalf of his clients that resulted in at least a $178,000 tax loss to the U.S. Treasury. Gbangbala also filed false personal individual income tax returns for tax years 2008 through 2010, in which he failed to report his total income for each calendar year.
Gbangbala faces a statutory maximum sentence of three years in prison and a fine of $250,000 for one count of aiding and assisting the preparation of a false return at his Sept. 24 sentencing.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Christopher O’Donnell and Mark McDonald of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office of the Eastern District of New York for their assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Nashville-Based Friendship Home Healthcare and Related Companies Pay U.S. and Tennessee $6.5 Million to Resolve False Claims Act LawsuitRead the Press Release
A group of home health care companies collectively known as “Friendship” and the companies’ owner Theophilus Egbujor paid $6.5 million, plus interest, to resolve allegations that they improperly billed TennCare, Medicare and TRICARE for home health services, announced David Rivera, United States Attorney for the Middle District of Tennessee. Friendship and its owner also agreed to be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG) in an effort to avoid future fraud and compliance failures.
“As this case demonstrates, enforcing the False Claims Act remains a key priority of the U.S. Attorney’s Office for the Middle District of Tennessee,” said United States Attorney Rivera. “The U.S. Attorney’s Office and our law enforcement partners will continue to vigorously pursue those who knowingly submit false claims to government health care programs.”
“We are pleased to be part of this coordinated effort to protect taxpayer dollars,” said Tennessee Attorney General Herbert H. Slatery III. “Preventing and prosecuting fraud in our government healthcare programs not only is a deterrent to those looking to take advantage of the system but also sees that much needed healthcare dollars are used as they are intended to be used.”
The settlement resolves the government’s claims that Friendship submitted false claims to TennCare, Medicare and TRICARE during the period of July 2007 through July 2013. The government asserted that Friendship billed TennCare for private duty nursing services that were furnished or supervised by a woman who was excluded from billing federal and state health care programs and that Friendship submitted required forms to TennCare that contained the forged signature of Friendship’s Director of Nursing. The government also contended that Friendship improperly billed TennCare services without the required forms and signatures. In addition, the government claimed that Friendship failed to repay TennCare within 60 days of learning that Friendship had wrongly billed for care provided by a woman whose nursing license had lapsed.
The specific entities included in the settlement agreement are:
- Friendship Home Healthcare, Inc., which has also done business as Friendship HealthCare System,
- Friendship Home Health, Inc., and Angel Private Duty and Home Health, which have also done business as Friendship Private Duty, and
- Friendship Home Health Agency, LLC.
Under the settlement agreement, Friendship and Egbujor paid a total of $6,500,000, plus interest.Of that amount, $4,025,573 goes to the United States, and $2,474,427 goes to the State of Tennessee.
“Fraud involving home health services is a major problem impacting the Medicare and TennCare programs,” said Derrick L. Jackson, the Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Patients are particularly vulnerable to fraud in a home-based setting because there is often no one looking over the provider’s shoulder. This case demonstrates there are serious consequences to home health agencies that try to defraud federal health care programs.”
The allegations resolved by today’s settlement were originally raised in a lawsuit filed against the Friendship companies and Egbujor by Kay Flippo, a licensed practical nurse who previously worked for Friendship Home Healthcare.She brought her claims under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery.Flippo’s share of the settlement has not been determined.
The case was handled by the United States’ Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by HHS-OIG, the Tennessee Bureau of Investigation Medicaid Fraud Control Unit (TBI MFCU), and the Defense Criminal Investigative Service. Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States. Tennessee Assistant Attorney General Mary McCullohs represented the State of Tennessee.
The case is docketed as United States ex rel. Flippo v. Friendship Home Healthcare, Inc., et al., No. 3:14-cv-1262 (M.D. Tenn.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Morgan Hill Resident Sentenced to over 16 Years in Prison in Connection with Methamphetamine Distribution ConspiracyRead the Press Release
SAN JOSE – Fredi Becerril (a/k/a Ademar Becerril, a/k/a Pitufo) was sentenced today to 196 months in prison for conspiring to distribute methamphetamine, announced United States Attorney Melinda Haag, Homeland Security Investigations Acting Special Agent in Charge Tatum King, and Drug Enforcement Administration Acting Special Agent in Charge Bruce Balzano.
According to the plea agreement, Becerril, 30, of Morgan Hill, was apprehended after law enforcement officers, pursuant to court orders, intercepted telephone conversations between Becerril and co-conspirators Arturo Cuevas-Quezadaz and Francisco Ortiz. Becerril admitted in the plea agreement that on December 1, 2013, he met with Ortiz, Cuevas-Quezadaz, and other co-defendants, at 13805 Center Avenue, San Martin, Calif. These men worked for Becerril and delivered methamphetamine to Becerril’s customers. Becerril gave his co-conspirators handwritten lists of the customers who were to receive the drugs and the quantities of methamphetamine each customer was to receive. After Cuevas-Quezadaz and Ortiz left to make their deliveries, Becerril received a warning that Cuevas-Quezadaz and another man had been arrested. Becerril warned Ortiz about the arrests but directed him to complete certain additional deliveries. When Cuevas-Quezadaz was arrested, the arresting officers found methamphetamine in his car. The DEA laboratory analyzed the seized drugs and determined that the amount of actual (pure) methamphetamine in the seized drugs was 7,949 grams. The DEA laboratory also discovered Becerril’s fingerprints on three of the packages of methamphetamine.
Becerril was arrested the next day, December 2, 2013. At the time of his arrest, agents seized duplicates of the lists he had given to Cuevas-Quezadaz and Ortiz, as well as additional evidence, including $26,960.00 in cash that Ortiz had just delivered to Becerril. Also, on December 2, 2013, a search warrant was executed at Becerril’s house in Morgan Hill. In Becerril’s home, agents discovered a pistol, ammunition, a gold coin and an additional $195,605 in cash.
The sentence was handed down by the Honorable Ronald M. Whyte, U.S. District Judge. Judge Whyte also sentenced Becerril to a 5 year period of supervised release. The defendant has been in federal custody since December 2, 2013.
This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, (OCDETF) a focused 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.
Mexican Man Pleads Guilty in Kansas to Laundering $4.7 Million in Drug FundsRead the Press Release
WICHITA, KAN. – A Mexican man pleaded guilty Monday to laundering more than $4.7 million in drug funds through his bank accounts in Kansas and elsewhere, U.S. Attorney Barry Grissom said.
Franz Wiebe Rempel, 44, Cuauhtemoc, Chihuahua, Mexico, pleaded guilty in U.S. District Court in Wichita to one count of money laundering. In his plea, he admitted that from 2009 through July 30, 2013, he laundered drug funds through bank accounts at the Bank of America in Wichita, as well as accounts at Wells Fargo and J.P. Morgan Chase.
In his plea, he admitted he provided his bank account numbers so that another conspirator could distribute the information to others. Rempel had an understanding with the conspirator that third parties would deposit cash into his bank accounts. The deposits would be less than $10,000 in an attempt to avoid federal currency reporting requirements. Once Rempel received the funds, he would transfer or move the money through the U.S. financial system at the other conspirator’s direction. Rempel crossed the border from his home in Mexico almost on a weekly basis in order to move funds. Ultimately, most of the money wound up in the other conspirator’s hands.
Rempel’s accounts received funds deposited from Kansas City, Kan.; Kansas City, Mo.; Oklahoma City; Des Moines; Amarillo, Texas; El Paso, Texas; Knoxville, Tenn., Nashville, Tenn., Memphis, Tenn.; Charlotte, N.C., Atlanta, Ga., and Albuquerque, N.M. Rempel did not know the identities of the people making the deposits but he knew the funds were being transferred for the purpose of paying for drugs.
Sentencing is set for Aug. 17. He faces a maximum penalty of 20 years and a fine up to $500,000. Grissom commended the Drug Enforcement Administration and the Internal Revenue Service for their work on the case.
Mescalero Apache Man Sentenced for Assaulting Intimate PartnerRead the Press Release
ALBUQUERQUE – Sonny Roy Valdez, 20, a member and resident of the Mescalero Apache Nation, was sentenced today in federal court in Las Cruces, N.M., to 30 months in federal prison followed by three years of supervised release for his federal assault conviction. Valdez was also ordered to pay $3,028.00 in restitution to the victim of his crime.
Valdez was arrested on June 5, 2014, on a criminal complaint charging him with assault resulting in serious bodily injury. According to the criminal complaint, Valdez assaulted his intimate partner, a Mescalero Apache woman, on May 27, 2014, by biting off part of her lip. The victim’s injuries required medical treatment and hospitalization. The offense occurred within the Mescalero Apache Reservation in Otero County, N.M.
On Nov. 12, 2014, Valdez pled guilty to a felony information charging him with assault resulting in serious bodily injury and admitted assaulting the victim. His guilty plea was entered without the benefit of a plea agreement.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and was prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Local Tax Return Preparer Heads to Federal PrisonRead the Press Release
HOUSTON - Diane Caldwell Larry has been ordered to prison following her conviction of falsifying client tax returns, announced U.S. Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service-Criminal Investigation (IRS-CI). Larry pleaded guilty July 7, 2014.
Today, U.S. District Judge Vanessa Gilmore, who accepted the guilty plea, handed Larry a total sentence of 12 months and one day in federal prison to be immediately followed by one year of supervised release. She was further ordered to pay $168,792 in restitution. During today’s sentencing hearing, Larry promised never again to involve herself in the preparation of tax returns other than her own.
During her plea hearing in July 2014, Larry admitted that while operating a tax return preparation service under the name Paradise South Tax Services, she prepared 33 materially false client tax returns for tax years 2007 through 2010. Those returns generated excessive refunds and caused aggregate losses to the IRS totaling approximately $168,792. Larry acknowledged she had included in these client tax returns fraudulent “side business” losses and false and excessive itemized deductions and credits in order to generate excessive refunds. When some of these tax returns were audited, Larry made up false documents to create an illusion of legitimacy for some of the false and excessive itemized deductions and credits.
Specifically, Larry admitted she knowingly and willfully included a false $84,215 business loss deduction for a non-existent “side business” as well as false deductions for uniforms upkeep, toll bridge fees, job-related tools and employee business expenses totaling $10,644 in a client’s 2009 tax return. This tax return alone caused a loss to the U.S. Treasury of approximately $18,382.
Previously released on bond, Larry was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The case, investigated by IRS-CI, is being prosecuted by Assistant United States Attorney Jimmy Sledge Jr.
Leichester Woman Pleads Guilty to Conspiracy to Sex Traffic A MinorRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Ashlee Cook, 24, of Leichester, NY, pleaded guilty to conspiring to recruit an underage girl to commit a commercial sex act before Chief U.S. District Judge Frank P. Geraci. The charge carries a maximum penalty of life in prison and a $250,000 fine.
Assistant U.S. Attorney Melissa Marangola, who is handling the case, stated that Cook and her boyfriend, Jacob Shamp, 23, posted an ad on Backpage.com, advertising a minor victim for prostitution. Law enforcement officers conducted an undercover operation and arranged to meet the girl in Gates, NY. When officers arrived, they took a statement from the minor victim.
Jacob Shamp was convicted of the same charge. Both defendants will be sentenced on September 4, 2015 at 10:00 a.m. and 11:00 a.m. respectively before Judge Geraci.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation, the New York State Police, under the direction of Major Craig Hanesworth, and the Gates Police Department, under the direction of Chief James VanBrederode.
Last Charged Conspirator Sentenced in CH2M Hill Time Card Fraud Case; U.S. Totals Nearly $20 Million from Those ResponsibleRead the Press Release
Richland – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that the last of 12 admitted criminal conspirators in the CH2M Hill Hanford Group Inc. (CHG) Time Card Fraud Conspiracy was sentenced for her role in nearly a decade of systemic fraud that took millions from the tax payers. Glenda Michele Davis, a former supervisor at CH2M Hill Hanford Group Inc. (CHG), who admitted her role in the conspiracy and who had cooperated for years with law enforcement, was sentenced to two years of probation and a fine. The other 11 admitted conspirators, including CHG itself, have also described to law enforcement, and ultimately the public, a systemic culture of time card fraud that existed at the Hanford Nuclear Site’s Tank Farms from at least 1999 through at least 2008. Through the 12 admitted criminal conspirators, including CHG, and the four members of management and upper management who paid individual civil fines, the United States has collected or imposed $19,882,412.40, in criminal and civil fines, damages, and penalties directly related to the CHG Time Card Fraud Conspiracy.
“We have been investigating and prosecuting this case since 2008 with our law enforcement partners, the Department of Energy Office of Inspector General and the FBI,” said Michael C. Ormsby. “While we recognize there are many dedicated people who work hard every day to advance the crucial mission of cleaning up Hanford, this case should serve as fair warning to all corporations and individuals doing business at Hanford who might seek to abuse the public’s trust.”
The first conspirator to plead guilty was Carl Schroeder in November of 2011. Between January 2012 and September 2014 another ten individual conspirators pleaded guilty to felony charges for conspiring to defraud the federal government.
Only one of the conspirators to plead guilty, Daniel Paul Niebuhr, did so without agreeing to cooperate with law enforcement. Mr. Niebuhr, a supervisor at CHG, was also the only conspirator sentenced to any prison time receiving a sentence of 30 days in addition to 3 months of home detention, a $34,146.60 fine, and a year of supervised release.
Taken together, the individual criminal defendants were ordered to pay a total of $766,912.40 in criminal fines for the fraud they perpetrated on the public.
In addition, in December of 2014, the United States entered into global criminal and civil settlements with another former CHG supervisor, Stephanie Livesey, and three former CHG upper managers Patrick “Brad” Brannan, Terrence Hissong, and Ryan Dodd. Those settlements involved the dismissal of the criminal charges against them and the imposition of over $100,000 in civil penalties with Mr. Dodd, a former CHG Vice President of Retrieval and Closure Operations, and Mr. Hissong, a former CHG Tank Farms Management Director, admitting no guilt but nonetheless paying $44,000 a piece to settle their personal liability under the False Claims Act.
Earlier, in March of 2013, CHG entered into a global civil and criminal settlement and fully admitted that it had criminally conspired with its own employees to defraud the federal government through the Time Card Fraud Conspiracy. CHG’s written public confession stated that it had conspired with, among others, members of its upper management generally and with Mr. Dodd in particular. CHG paid a total of $18.5 million and agreed to a 3 year corporate monitor at its remaining subsidiary on the Hanford Site, CH2M Hill Plateau Remediation Company (CHPRC). The CHPRC corporate monitor works closely with DOE OIG to help detect and deter fraud and will continue to do so into 2016. In addition, CHG agreed to pay an additional half million dollars to install an accountability system approved by DOE OIG to further help detect and deter any future conduct of this nature.
“While it is disheartening that this systemic fraud was ever perpetrated on the public, we are proud of our accomplishments in this case and thankful for the tremendous efforts of our law enforcement partners, as well as the Department of Energy, in bringing responsible parties to justice,” concluded Michael C. Ormsby. “Through these efforts we’ve made clear that blaming a culture of fraud provides no excuse for people or corporations to participate in that fraud.”
The investigation was conducted by the Department of Energy’s Office of Inspector General and the FBI. The cases were prosecuted by Tyler H.L. Tornabene, an Assistant United States Attorney for the Eastern District of Washington and Daniel H. Fruchter, a trial attorney with the United States Department of Justice, Civil Frauds Section.
KC Man Pleads Guilty to Producing Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., pleaded guilty in federal court today to producing child pornography after recording videos of two minor victims, including a teenager who responded to his online advertisement for modeling and a minor who was secretly filmed in the shower.
Marcus S. Clarke, 43, a citizen of Jamaican residing in Kansas City, pleaded guilty before U.S. District Judge Dean Whipple to one count of producing child pornography and one count of attempting to produce child pornography.
According to court documents, a 15-year-old girl, identified as Jane Doe #1, had been sending and receiving text messages on a borrowed cell phone. The cell phone’s owner notified a Prairie Village, Kan., police detective when she noticed a text conversation about a modeling photo shoot.
MV told law enforcement officers that she responded to a Craigslist advertisement for models for a photo shoot. Clarke picked her up at a park in Prairie Village on Oct. 3, 2014, and drove her to his apartment in the Northland. When they arrived at the apartment, Clarke put a flash drive in his television to display photos of nude females to MV. MV described the images to law enforcement officers as “disturbing” because the women were nude and engaged in sexual activity. Clarke took both nude and non-nude photos and videos of MV using a digital camera and digital recorder.
According to court documents, Clarke had been advertising online for lingerie and nude modeling as far back as September 2012.
An FBI agent used the same cell phone that MV had used to contact Clarke. Several text messages were exchanged in which Clarke made arrangements to meet MV again for another photo shoot. When Clarke arrived at the Prairie Village park to meet MV on Oct. 22, 2014, he was placed under arrest. Law enforcement officers executed a search warrant at Clarke’s residence and seized computers and computer storage devices that contained sexually explicit videos of MV.
Clarke also admitted today that he secretly recorded video of a second victim, identified as Jane Doe #2, to produce child pornography between Jan. 1, 2007, and Dec. 13, 2010. According to court documents, investigators discovered an SD card in Clarke’s apartment that contained video recordings in which Clarke appeared to secretly film a minor female while she took a shower.
Under federal statutes, Clarke is subject to a mandatory minimum sentence of 15 years in federal prison without parole for each count, up to a sentence of 60 years in federal prison without parole, plus a fine up to $500,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Teresa A. Moore. It was investigated by the FBI and the Prairie Village, Kan., Police Department.
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."
Justice Department Reaches Agreement with Pennington County, South Dakota, to Improve AccessibilityRead the Press Release
The Department of Justice announced an agreement with Pennington County, South Dakota, today to resolve accessibility issues in the county’s services, programs, activities and facilities under Title II of the Americans with Disabilities Act (ADA). This year marks the 25th anniversary of the ADA, which the Civil Rights Division plays a critical role in enforcing. In honor of the anniversary, each month the Department of Justice has been highlighting efforts that are making full participation and equal opportunity for people with disabilities a reality.
Pennington County and the department reached an agreement under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the ADA. One of the hallmarks of the agreement is the requirement that the county hire an independent licensed architect (ILA) who is knowledgeable about the architectural accessibility requirements of the ADA. The ILA will certify that the accessibility modifications done to the county’s facilities comply with the ADA Standards for Accessible Design.
The agreement with the county will allow people with disabilities to participate in and benefit from the services provided in Pennington County’s facilities including its New Administration Building, Courthouse Complex, Jail, Jail Annex, Public Safety Building, Public Health Building, Juvenile Services Center and the Pennington County Fairgrounds. The county will renovate and remediate everything from entrances, service areas, counters, restrooms and parking so that people with disabilities can get into county buildings and use the services and programs offered by the county in each of its buildings. In addition, the agreement calls for implementing a comprehensive plan to improve the accessibility of sidewalks, transportation stops and pedestrian crossings by installing accessible curb ramps throughout the county.
“As we continue to celebrate the ADA’s 25th Anniversary this year, today’s agreement is the sixth PCA agreement the Department of Justice has signed in six months and exemplifies our continuing commitment to ensure that citizens with disabilities enjoy the same services, programs and activities that all others enjoy,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Equal access to local government is the cornerstone of Project Civic Access in its quest to protect the civil rights of municipalities’ citizens with disabilities.”
For more information about the ADA, today’s agreement, the Project Civic Access initiative, individuals may access the ADA Web page at http://www.ada.gov/civicac.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Asks Federal Court to Permanently Bar South Carolina Tax Return Preparer from Preparing Federal Tax ReturnsRead the Press Release
The United States filed a complaint seeking to bar a Newberry County, South Carolina, woman from preparing federal tax returns for others, the Justice Department announced today.
The civil complaint against Julie E. Hueble, which was filed in the U.S. District Court for the District of South Carolina, alleges that Hueble owned and operated three Liberty Tax Service franchise locations in Greenwood and Clinton, South Carolina. According to the complaint, Hueble and the employees of her tax preparation stores prepared federal income tax returns that improperly understated customers’ tax liabilities or increased customers’ claims for refundable tax credits.
The complaint alleges that Hueble and her employees prepared returns for customers that, among other things, falsely reported on Schedule Cs (Profit or Loss From Business) non-existent businesses and/or inflated income or deductions. The suit further alleges that Hueble and her employees fabricated other deductions, claimed improper filing statuses and falsely claimed dependents, all of which resulted in fraudulently maximizing refunds and/or refundable credits.
In one example detailed in the complaint, Hueble falsely increased a customer’s taxable income by reporting a fabricated “childcare” business, even though the customer did not own a child care business and gave Hueble no documentation showing that she did. The increased income enabled the customer to receive an inflated Earned Income Tax Credit.
The complaint states that Hueble’s tax-preparation stores prepared 2,165 federal income tax returns between 2012 and 2014, and Hueble prepared 904 returns during this period. An analysis of returns filed between 2012 and 2014 revealed that the harm to the U.S. Treasury caused by Hueble’s conduct could be more than $1 million, according to the suit.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Jury convicts five from Northeast Ohio for conspiracy to rob stash house and sell drugsRead the Press Release
Five men from Northeast Ohio were convicted of multiple crimes for their roles in a conspiracy to distribute heroin and cocaine and use firearms to rob what they believed to be a drug stash house.
A jury convicted Kali Alexander, 24, of Willoughby Hills, Rasheam Nichols, 24, Justin Maxwell, 26, Terrance Chappell, 22, and Kenneth Flowers, 21, all of Cleveland, on all 11 counts. They are scheduled to be sentenced in September.
Alexander recruited the other defendants to steal up to nine kilograms of cocaine from a stash house in Cleveland. The group planned to rob the stash house, then Alexander would sell the stolen cocaine and split the profits, according to court documents.
Alexander met with an undercover ATF agent last year and expressed an interest and willingness to commit the robbery. “I promise you, I know what I’m doing, I’m about to holler at my big brother, then we going to orchestrate it from there,” according to court documents.
Alexander, Nichols, Maxwell, Chappell and Flowers met with the ATF undercover on September 3, 2014, and discussed the strategy for the robbery. Then the five men drove to agreed-upon location in anticipation of acquiring a specific vehicle to use during the robbery, at which point they were arrested, according to court documents.
The indictments are the result of “Operation Samson II,” an initiative last summer in which 60 people were indicted and 110 firearms were seized. To date, 58 of the 60 people have been found guilty.
“This operation was like a vacuum cleaner, sucking up illegal firearms from the streets of Cleveland,” said U.S. Attorney Steven M. Dettelbach.
"There is no place in our society for those who use firearms for violent, criminal purposes," said Donald Soranno, Special Agent in Charge of ATF's Columbus Field Division. "ATF will continue to work with our law enforcement partners at every level to bring those individuals to justice."
This initiative was a cooperative effort between the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cleveland Division of Police, the Ohio Adult Parole Authority, the U.S. Marshals Service, the U.S. Attorney’s Office and the Cuyahoga County Prosecutor’s Office.
Indictment Unsealed Charging Former Altus Bank President and Altus Business Partner with Bank FraudRead the Press Release
Oklahoma City, Oklahoma – A federal indictment has been unsealed charging PAUL HAROLD DOUGHTY and FRED DON ANDERSON with bank fraud, conspiracy to commit bank fraud, false statements to banks, and misapplication of bank funds in connection with First State Bank of Altus (“FSB”) and various loan schemes, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Doughty, 66, of Edmond, Oklahoma, was the former president and chairman of FSB. Anderson, 66, of Eagle Point, Oregon, partnered with Doughty in several businesses headquartered in Altus. In July 2009, state banking regulators closed FSB due to the bank’s loan losses, and the Federal Deposit Insurance Corporation was appointed as the bank’s receiver.
The counts against Doughty and Anderson charge fraud related to three alleged loan schemes: (1) a series of FSB loans to finance a real estate development in Routt County, Colorado; (2) a series of “senior life settlement loans” from FSB to support an Altus aerospace company; and (3) a $2 million unauthorized loan from FSB to a company under Doughty and Anderson’s control.
According to the indictment, in 2006 and 2007 Doughty and Anderson recruited buyers for 19 Colorado real estate lots priced at approximately $700,000 each. The indictment alleges that Doughty approved and issued 14 loans to buyers, totaling more than $10,000,000.00 in loan proceeds for the seller, Mountain Adventure Property Investments, LLC (“MAPI”). MAPI was a Colorado company that Anderson had an indirect ownership interest in and where he served as president and manager. It is alleged that each loan exceeded Doughty’s individual lending authority, and most of the loans were issued without FSB loan committee or board approval, including a $580,000.00 loan to Anderson’s personal company. The indictment alleges that most lot sales were presented to buyers as “zero money down” investments, and that the earnest money for the purchases was either advanced or refunded to many of the buyers by Anderson on behalf of MAPI. Doughty and Anderson also assured the buyers that MAPI would make all payments on the loans to the bank. It is alleged that on the few occasions when Doughty presented a Colorado loan to FSB’s loan committee, he misrepresented the source and amount of borrowers’ down payments and the borrowers’ responsibility for making payment on the loans. The indictment includes eight counts for conspiracy, bank fraud, unauthorized issuance of a loan, and false statements related to the Colorado lot loans from FSB.
The indictment also alleges Doughty made false statements to Vectra Bank in Colorado in applying for his own loan to purchase a Colorado lot from MAPI. In his loan application, Doughty omitted his earlier $580,000.00 loan from a different bank and also represented to Vectra Bank that his down payment on the new lot was not borrowed. According to the indictment, Doughty planned to be reimbursed by Anderson from MAPI, the seller, for his entire down payment.
Second, the indictment charges Doughty and Anderson in connection with five $2.5 million individual loans taken out by FSB borrowers in 2008 in so-called “senior life settlement” loans. According to the indictment, Doughty and Anderson recruited borrowers to take out these “self-paying” loans to provide money for investments in Altus-based Quartz Mountain Aerospace, Inc. (“QMA”). It is alleged that a portion of the loan proceeds was invested in QMA, and another portion would pay the loan’s interest. It is also alleged that the remaining proceeds on the loans would buy and maintain third-party life insurance policies, where the death benefits on the third parties were intended to repay the loan’s principal. The indictment alleges that each loan exceeded Doughty’s lending authority, and he issued senior life settlement loans without FSB’s loan committee or board approval. According to the indictment, Doughty and Anderson funneled $125,000.00 in “service fees” to their shared company, Altus Ventures, from each loan. This service fee was not disclosed to FSB. The indictment charges Doughty and Anderson with false statements, unauthorized issuance of a loan, and misapplication of bank funds with the senior life settlement loans, including a $2.5 million loan issued to Anderson’s personal company.
Third, the indictment alleges that in January 2008, Doughty and Anderson arranged a $2 million loan from FSB to Ethanol Products Group, LLC (“EPG”), a startup company in which both Anderson and Doughty had an ownership interest. It is alleged that Doughty advanced the $2 million from FSB, above his individual lending authority, without approval by FSB’s loan committee or board. The indictment alleges that soon before issuing the loan, Doughty e-mailed Anderson his “cash strategy” for two of the other companies they controlled; the “strategy” showed all EPG loan proceeds would be directed to companies controlled by Anderson and Doughty, ultimately diverting $100,000.00 in “officer bonuses” to Anderson and Doughty. The indictment charges Doughty with unauthorized issuance of a loan and misapplication of bank funds, and Anderson is charged with participation in an unauthorized loan in relation to the EPG loan.
The indictment was unsealed after Anderson was recently arrested and had his initial appearance on the charges in Eugene, Oregon. Anderson’s arraignment in Oklahoma City federal court has been set for June 10, 2015. The arraignment for Doughty is set for June 5, 2015, in Oklahoma City federal court.
For each of the fifteen counts in the indictment, the charged defendant faces up to thirty years in prison and a fine of $1,000,000.00. Under federal law, each defendant would be required to pay restitution to victims. Furthermore, the indictment seeks forfeiture from each defendant in the amount of the proceeds of the fraudulent schemes and in the amount of the property involved in the offenses.
These charges are the result of an investigation conducted by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation - Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Chris M. Stephens and K. McKenzie Anderson.
Reference is made to the indictment and other public filings for further information. An indictment is only a charge and is not evidence of guilt. A defendant is presumed innnocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Ihsaan Al-Amin Sentenced to 100 Month in Prison for Illegally Dispensing Controlled SubstancesRead the Press Release
CHATTANOOGA, Tenn. – On June 1, 2015, Ihsaan Al-Amin, 64, of Smyrna, Ga., was sentenced by the Honorable Curtis L. Collier, U.S. District Court Judge, to serve 100 months in prison, followed by two years of supervised release. In November 2013, Dr. Al-Amin pleaded guilty to a one count bill of information charging him with illegally dispensing controlled substances and two counts of an indictment charging him with tax evasion.
Al-Amin operated the O’Neil Pain Clinic in Chattanooga until 2010, when a joint law enforcement investigation revealed that he had illegally prescribed thousands of pills containing opiates and, during 2005 and 2006, significantly under-reported his taxable income on his tax returns.
Agencies involved in this joint investigation included the Internal Revenue Service Criminal Investigation (IRS-CI), Federal Bureau of Investigation (FBI), Tennessee Bureau of Investigation (TBI), Drug Enforcement Administration (DEA), Hamilton County Sheriff’s Office, and Tennessee State Health Related Boards. Assistant U.S. Attorney James Brooks represented the United States.
U.S. Attorney Bill Killian said, “We continue to prosecute medical professionals who, by their acts, contribute to the prescription drug problems in Tennessee. Those specially trained in the field of medicine know the effects of their illegal acts regarding prescription drugs.”
“Today’s sentencing sends a clear message that illegally prescribing narcotics for profit is a serious crime and will be punished accordingly,” stated Christopher A. Henry, Special Agent in Charge. “IRS Criminal Investigation is proud to work with our law enforcement partners, by providing our financial investigative expertise, to shut down these pill mills and stop the flow of these illegal drugs into our communities.”
TBI Director Mark Gwyn added, “Investigations like this one are by their nature very time and labor-intensive, and we were fortunate to work closely with the FBI and IRS on this case. So it is rewarding to see that a doctor who has violated the trust of his patients, and the community as a whole, is getting the message that these actions will not be tolerated. We will pursue them the same way we pursue street traffickers.”
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Houston Man Indicted for Wire Fraud and Aggravated Identity Theft in Tax SchemeRead the Press Release
HOUSTON – Federal charges have been filed against Tom Ineze Emasealu, 30, of Houston, alleging he committed wire fraud and aggravated identity theft in conjunction with a fraudulent tax refund scheme, announced U.S. Attorney Kenneth Magidson.
The 10-count indictment was returned May 20, 2015. He will appear in federal court before U.S. Magistrate Judge Nancy Johnson at 10:00 a.m. today for his arraignment. Initially arrest upon the filing of a criminal complaint in April, he has remained in custody pending further criminal proceedings.
Emasealu is charged with five counts of wire fraud and five counts of aggravated identity theft.
The indictment alleges that between Jan. 1, 2014, through May 8, 2015, Emasealu stole the identities of multiple victims to engage in a fraudulent tax refund scheme. Emasealu allegedly stole the identities of hundreds of victims, including their names, dates of birth and Social Security numbers. According to the allegations, he used the victim’s personal identifiers to apply for tax refunds and would then allegedly direct the tax refund monies to be deposited into bank accounts under his sole ownership and control.
On average, each fraudulently filed tax refund application netted Emasealu between $3,000 and $10,000, according to the indictment. In total, Emasealu allegedly obtained, or attempted to obtain, approximately $1.2 million.
If convicted, he faces up to 30 years imprisonment for each count of wire fraud and a possible $1 million fine. Emasealu will also face an additional 24 months in federal prison for each conviction of aggravated identity theft which must be served consecutively to any other sentence imposed.
This case is being investigated by the U.S. Postal Inspection Service and Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorney Julie Searle is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Health Care Provider Sentenced to 75 Months for $2.5 Million Health Care FraudRead the Press Release
CHICAGO ― A former owner and operator of Selectcare Health, Inc., a provider of outpatient physical and respiratory therapy located in Park Ridge and Skokie, was sentenced to federal prison for engaging in a $2.5 million health care fraud scheme. Ankur Roy, 38, of Miami Beach, Florida, was sentenced last Friday to 75 months in prison followed by 3 years of supervision after his release by U.S. District Court Judge Gary Feinerman. Roy was also ordered to forfeit more than $2.5 million in proceeds he and his codefendants gained by defrauding Medicare and Blue Cross Blue Shield of Illinois. Roy was ordered to surrender to the Federal Bureau of Prisons on July 15, 2015. Roy was charged in 2013 with two co-defendants who both pled guilty; Dipen Desai, who was sentenced to 27 months’ imprisonment in December 2014, and Akash Patel, who is scheduled to be sentenced in July. Roy was convicted of five counts of the indictment by a jury in July 2014.
Between March and May 2011, Roy and his co-defendants submitted false and fraudulent health insurance claim forms to Medicare and Blue Cross Blue Shield for respiratory therapy services that they knew were never provided to patients. Roy, who proposed the scheme to his co-defendants as a means to extricate themselves from debt, designed the scheme to avoid raising red flags with Medicare and Blue Cross Blue Shield’s fraud detection systems. As a result of these false claims, Medicare and Blue Cross Blue Shield paid defendants over $2.5 million. Defendant took over $600,000 of that sum and used it for his own personal purposes, including for personal expenses, paying off credit card bills and repaying his student loan.
“Defendant Roy’s fraud deprived Medicare and Blue Cross Blue Shield of over $2.5 million, a substantial sum of money that should have gone to pay for medical services for senior citizens, and not to line his and his partners’ pockets,” Assistant U.S. Attorney Maureen Merin argued at sentencing.
The sentence today was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Robert J. Holley, Special Agent in Charge of the Federal Bureau of Investigation Chicago; Lamont Pugh III, Special Agent in Charge of the Chicago Regional Office of Health and Human Services, Office of Inspector General; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago.
The government was represented by Assistant U.S. Attorney Maureen Merin.
Georgia Man Gets Probation, Ordered to Pay Restitution for Stolen Identity Refund Fraud SchemeRead the Press Release
PITTSBURGH, PA - A resident of the State of Georgia has been sentenced in federal court to probation for a term of five years and restitution ordered in the amount of $139,357.27 on his conviction of wire fraud conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Edward Claude Hammitt, 67, of Summerville, GA.
In connection with the guilty plea, the court was advised that Hammitt and others conspired to steal identities of other persons which were used to file false electronic federal tax returns between 2010 and 2012.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service-Criminal Investigation for the successful prosecution of Hammitt.
Four Indicted in Money Laundering ConspiracyRead the Press Release
DALLAS — Three individuals have been arrested on an indictment, unsealed on Friday, charging one count of conspiracy to commit money laundering stemming from their scheme to steal personal identifying information, use it to fraudulently obtain income tax refunds, and then launder those funds, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Latonya Lanette Carson, 41, Ricardo Garth Solomon, 49, and Smith Olsola Akin, 32, have made their initial appearances in federal court and each remains in custody. A detention hearing is set for this afternoon for Carson. Another defendant, Segun Edomwonyi, a/k/a “Benny O. Prince,” 49, has not been apprehended.
The indictment alleges that the defendants’ scheme began in 2010. They allegedly obtained stolen names and other personal identifying information and used that information to create fraudulent tax returns claiming fraudulent refunds. They electronically filed the fraudulent returns with the Internal Revenue Service (IRS) and directed the refunds to be deposited onto reloadable debit cards they had purchased and registered online in the names of the identity victims. The defendants then used these debit cards, funded by the fraudulent income tax refunds, to obtain cash and purchase used cars from wholesale dealers in Dallas County.
Over the course of the conspiracy, according to the indictment, the defendants established several bank accounts in the names of businesses that purportedly operated as used car businesses. Nearly 2000 money orders and checks, purchased in part with the proceeds from the fraudulently filed income tax returns, were deposited into these accounts.
The indictment alleges that between May 2012 and May 2014, the defendants and their conspirators paid $1,184,950 from these accounts to purchase used cars from wholesale dealer auctions in Dallas County, and that between January 2012 and January 2015, the defendants and their conspirators exported approximately 204 used cars to Nigeria.
The FBI, IRS Criminal Investigation, U.S Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Secret Service and the Texas Department of Public Safety investigated. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
Fort Campbell Army Sergeant Charged with Taking Bribes While Serving in AfghanistanRead the Press Release
PADUCAH, Ky. – Acting United States Attorney John E. Kuhn, Jr. today announced charges against a Fort Campbell, Kentucky, Army Sergeant for his role as a public official, for conspiring with another to commit an offense against the United States, namely bribery.
According to the federal information, filed in U.S. District court today in Paducah, Kentucky, Ramiro Pena, Jr., age 43, received and accepted illegal bribes totaling $100,000 U.S. currency and a Rolex watch, in return for being influenced in the performance of an official act, that is, ensuring the successful approval and processing of contracts to restock supplies while serving at Humanitarian Air Yard (“HA Yard”) at Bagram Airfield (“Bagram”) in Afghanistan.
From January 1, 2008 through September 30, 2009, Pena worked as a U.S. Army Sergeant First Class at the HA Yard at Bagram as a Project Purchasing Officer (“PPO”) who maintained the supply orders and made sure the inventory levels were never low. Pena’s supervisor at the HA Yard was Army Master Sergeant Jimmy W. Dennis, who was charged and convicted in the Western District of Tennessee. Dennis was the Army Paying Agent at the HA yard and worked with Pena to procure supplies for the HA Yard by issuing contracts to local Afghan vendors for supplies.
Between June 5, 2008 and March 21, 2009, Dennis and Pena processed approximately 217 contracts worth approximately $30,760,255 for Afghan vendors to provide supplies to the HA Yard. According to the federal information, Pena and Dennis received money and jewelry from the vendors in return for their official acts on the HA Yard contracts.
Further, it is alleged that Pena received about $100,000 from Dennis in approximately six installments and a Rolex watch which was provided by a vendor seeking to obtain HA Yard contracts.
Pena allegedly sent approximately $22,000 of the bribe money home in greeting cards addressed to his wife who resided at Fort Campbell. He sent three to four bills totaling $300 to $400 in each card at a time so as to not bring attention to the envelope at the post office. It is further alleged that Pena used bribe money to purchase a Harley Davidson motorcycle and pay his and his family’s personal expenses in Afghanistan and in the United States.
If convicted at trial, Pena could receive the maximum punishment of five years in prison, a $250,000 fine, no more than three years of supervised release, and forfeiture to the United States of any property traceable to the conspiracy to commit bribery.
This case is being prosecuted by Trial Attorney Daniel P. Butler of the Department of Justice, Criminal Division, Fraud Section and by Assistant United States Attorney Nute A. Bonner. These matters were investigated by the Special Inspector General for Afghanistan Reconstruction, FBI, Army Criminal Investigative Division, Defense Criminal Investigative Service, and Air Force Office of Special Investigation.
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The filing of a Criminal Information is an accusation only and that person is presumed innocent unless and until proven guilty.
Former Warrensburg Postal Worker Pleads Guilty to Stealing MailRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former postal worker in Warrensburg, Mo., pleaded guilty in federal court today to stealing thousands of pieces of mail that were not delivered.
David Thompson, 54, of Warrensburg, Mo., pleaded guilty before U.S. District Judge Dean Whipple to the delay and destruction of mail by a postal employee.
Thompson, who began his career with the U.S. Postal Service in 1990, was the regular mail carrier assigned to a delivery route from the Warrensburg post office on 201 E. Gay Street. He was placed on off-duty status on Jan. 21, 2014, and he is no longer in the employment of the Postal Service.
By pleading guilty today, Thompson admitted that he stole at least 20,000 pieces of mail addressed to 5,571 recipients from May 2012 to Jan. 18, 2014. Thompson admitted that he threw the mail into a dumpster or kept it in his house and personal vehicle rather than delivering the mail to its recipients. The mail was unopened and no specific monetary loss was identified.
Thompson’s supervisors suspected in late 2013 that he was drinking alcohol while on duty and while delivering mail on his official route. During their investigation, a covert camera was installed in his delivery vehicle. Thompson was observed pulling mail already sorted for delivery and placing the mail in a white tub, which he hid in a carport at his personal residence. The next two days, he also pulled mail already sorted for delivery, and each day he bundled it and put it into his personal vehicle. On Jan. 11, 2014, Thompson was recorded throwing a bundle of mail into a trash container, and later placing a tub of mail underneath the carport at his residence. On Jan. 13, 2014, he placed his coat over a tub of mail and placed the mail into his personal vehicle. On Jan. 15, 2014, he took a tub of mail and placed it under the carport at his residence. The next two days, he did the same thing. He took more mail on Jan. 18, 2014. On Jan. 17, 2014, a federal agent recovered four black plastic trash bags of mail from Thompson’s route from the dumpster behind the Elk’s Lodge (where Thompson was a member and served as Exalted Ruler) located at 822 E. Young Avenue in Warrensburg.
Under federal statutes, Thompson is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Postal Service Office of Inspector General.
Former Member of Moreno Valley City Council Sentenced to Five Years in Federal Prison for Taking $2.3 Million Cash BribeRead the Press Release
RIVERSIDE, California – In a case stemming from what is believed to be the largest bribe ever accepted by a public official in an undercover operation, a former member of the Moreno Valley City Council was sentenced this afternoon to 60 months in federal prison for taking a $2.36 million cash bribe from an undercover operative posing as a real estate broker.
Marcelo Co, 64, was sentenced this afternoon by United States District Judge Jesus G. Bernal. Co pleaded guilty last year to one bribery count and one count of filing a false corporate tax return.
The case against Co was the result of an investigation by the Inland Regional Corruption Task Force, which is comprised of prosecutors, agents and investigators from the Federal Bureau of Investigation, IRS – Criminal Investigation, the Riverside County District Attorney’s Office and the United States Attorney’s Office.
Co was elected to the Moreno Valley City Council in November 2010 and resigned from his seat in August 2013 after being charged in state court in an unrelated case. Court documents filed in the federal case outline a bribery scheme in which Co told a businessman and an undercover FBI operative posing as a real estate broker that he would control a voting majority of the Moreno Valley City Council and would be able to guarantee land use decisions that would benefit the businessman and the land broker. Co also promised to always vote in favor of land use decisions that would benefit the real estate broker.
Co solicited campaign donations from the FBI undercover operative and the businessman, who was cooperating with the investigation. Co eventually received payments of $5,000 and $10,000 that he said were to be used to finance the campaigns of individuals who would vote with him on land use issues.
In the fall of 2012, Co met with the undercover operative to discuss a multimillion dollar sale of a 30-acre parcel that he owned. Co told the real estate broker that once he
had control of the City Council, he could change the zoning of the property and the land value would dramatically increase. With the City Council election in November 2012, Co told the undercover investigator that he had the votes to alter the zoning and increase the value of Co’s 30-acre parcel, which had been appraised at $710,000. Co proposed that the undercover operative purchase the property for $5.36 million, which would include a cash payment of $2.36 million.
At a meeting on January 30, 2013, Co agreed to sell the property for $5.36 million, but that the publicly filed documents would reflect a sale price of only $3 million. At this meeting, Co accepted $2.36 million in cash.
The tax charge concerns a federal Corporation Income Tax Return (Form 1120) that Co filed for his company, Qwik Pack Systems, for tax year 2010. In that filing with the IRS, Co failed to report well over $100,000 in income. This tax charge is not related to the bribery scheme.
Co must surrender himself to authorities on October 30 to begin serving his sentence.
Release No. 15-057
Former IRS Employee Pleads Guilty to $326,000 Fraud Scheme, Identity TheftRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former employee of the Internal Revenue Service pleaded guilty in federal court today to using stolen identities in a scheme to receive $326,000 in fraudulent tax refunds.
Demetria Michele Brown, 38, of Birmingham, Ala., pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to two counts of wire fraud and one count of aggravated identity theft.
By pleading guilty today, Brown admitted that she engaged in a scheme to submit hundreds of false and fraudulent state and federal income tax returns in order to generate refunds from 2008 to 2011. Brown, formerly of Fairview Heights, Ill., worked at an IRS office in St. Louis, Mo., during the fraud scheme.
Brown filed more than 120 fraudulent federal tax returns, resulting in a loss of approximately $211,000. Brown filed at least 236 fraudulent state tax returns, resulting in a loss of approximately $115,000, for an aggregate loss amount of approximately $326,000.
The scheme involved Brown obtaining personal identification information, including names, Social Security numbers, and dates of birth of other persons without their knowledge or consent. Brown completed U.S. individual income tax returns and Missouri state income tax returns for persons using the personal identification information she had obtained, adding other information which was false and fraudulent, including the address, place of employment, wages earned, taxes withheld and the fact that a refund was due.
Under federal statutes, Brown is subject to a sentence of up to 20 years in federal prison without parole for each wire fraud count and a mandatory consecutive sentence of two years in federal prison without parole for aggravated identity theft, plus a fine up to $750,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the FBI, IRS-Criminal Investigation, the Missouri Department of Revenue – Compliance and Investigation Bureau and the Missouri Department of Revenue – Criminal Investigation Bureau.
Former Greece Police Officer Sentenced for Possessing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that John Casey, 47, formerly of Greece, NY, who was convicted of possession of child pornography, was sentenced to 48 months in prison and 10 years supervised release by U.S. District Court Judge Elizabeth A. Wolford. The defendant will have to register as a sexual offender.
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that in March 2014, Federal Agents from Homeland Security Investigations working online in an undercover capacity observed the defendant sharing images of child pornography on the internet. At that time, they were able to download several sexually explicit images of children being raped from the defendant’s computer. They identified Casey’s physical location and then obtained and executed a federal search warrant for his Greece residence. During the search, agents seized multiple digital items which were forensically analyzed. Child pornography images and movies were recovered from two laptops which were also linked to the files shared online. Some of the images depicted children as young as infants being sexually abused.
Federal investigators reviewed the defendant’s time records and online activities and determined that the child pornography was downloaded during times when Casey was not at work as a Greece Police Officer. Agents also determined that no official or departmental equipment was used. Officers from the Greece Police Department assisted with the investigation.
The sentencing is the culmination of an investigation on the part of Officers of the Greece Police Department, under the direction of Chief Patrick Phelan and Special Agents of Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy.
Former Amherst Woman Charged in Murder-For-Hire PlotRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Debra Arno, 56, formerly of Amherst, NY, was arrested and charged by criminal complaint with federal murder-for-hire. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney John M. Alsup, who is handling the case, stated that according to the complaint, on May 26, 2015, the Kenmore Police Department received a tip about a murder for hire plan. The individual told officers that another person had been given money by the defendant to murder her ex-husband, his current wife and their daughter. The individual reported to officers seeing hand written letters detailing the schedule and current residence of the family along with photos. On May 27, the Kenmore Police Department identified Arno’s ex-husband, his wife and their daughter. Officers also alerted the victims of the murder-for-hire plan.
On May 28, 2015, a search warrant was executed at the residence of the person allegedly hired by the defendant to carry out the murders. Officers seized a number of items including multiple documents from Arno to the individual including photos of the intended victims, a diagram of their residence and a schedule of their activities. Also seized were two cellular telephones and three shotguns.
The complaint alleges that Arno was going to pay the defendant a total of $20,000 to commit the murders.
Arno made an initial appearance this morning before U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and is being detained pending a detention hearing on June 2, 2015 at 11:15 a.m.
The criminal complaint is the result of an investigation by the Village of Kenmore Police Department, under the direction of Chief Peter Breitnauer, the East Aurora Police Department, under the direction of Chief Ronald Krowka, and the Federal Bureau of Investigation Safe Streets Task Force which includes the Amherst Police Department; Buffalo Police Department; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Cheektowaga Police Department; Erie County Sheriff’s Office; Hamburg Police Department; Lancaster Police Department; Niagara Frontier Transportation Authority; New York State Department of Correctional Services; New York State Police; U.S. Border Patrol; and U.S. Immigration and Customs Enforcement–Homeland Security Investigations.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Florida Timeshare Resale Co-Owner Sentenced for Role in Multi-Million Dollar ScamRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Leandro Velazquez, 36, of Kissimmee, Florida, was sentenced in the U.S. District Court for the Southern District of Illinois on May 28, 2015, to 108 months in federal prison for his role is a conspiracy to commit mail and wire fraud.
In February 2014, a grand jury returned a one-count indictment charging Velazquez with conspiracy to commit mail fraud and wire fraud in connection with telemarketing. The indictment alleged that Velazquez, and others were engaged in an extensive telemarketing scam which operated in Orlando, Florida, that bilked thousands of victims of approximately $6 million dollars, victimizing consumers throughout the United States and Canada. There were victims in seven of the thirty eight (38) counties comprising the Southern District of Illinois.
According to documents filed with the Court in connection with his guilty plea and sentencing, Velazquez was a co-owner of National Solutions and related companies located in Orlando, Florida. The scheme operated under more than a dozen business names including Bluescape Timeshares International, Country Wide Timeshares, Countrywide Timesharesales, and Landmark Timeshares, among others. Evidence provided to the Court established that Velazquez' participation in the scheme began on or about December 5, 2007 and continued through July 13, 2011. Telemarketers for National Solutions placed cold calls to timeshare owners and then falsely represented that their company had actual buyers for the owners’ timeshare property. Telemarketers then solicited advanced fees of up to several thousand dollars from each victim in purported closing costs that they promised would be refunded to the owner once the closing on the property occurred. Many timeshare owners were told that their closings were scheduled within a number of days. Despite collecting fees from these victims, these companies were not successful in selling a single timeshare unit, according to testimony from the U.S. Postal Inspection Service.
The Federal Trade Commission investigated the National Solutions businesses and brought a civil complaint in the United States District Court for the Middle District of Florida in Orlando. In that action the FTC seized the offices and records of National Solutions on July 13, 2011 pursuant to Court Order.
This prosecution follows an investigation by the Midwest Region Office of the Federal Trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service. The prosecution of the case was handled by Assistant U.S. Attorneys Bruce E. Reppert and Michael J. Quinley.
Consumers who believe that they have been the victim of a consumer fraud should call the Federal Trade Commission 1-877-FTC-HELP (1-877-382-4357) or file an online complaint at https://www.ftccomplaintassistant.gov.