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1 June 2015
First Tennessee Bank, N.A. agrees to pay $212.5 Million to Resolve False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
ATLANTA – First Tennessee Bank, N.A. (“First Tennessee”) has agreed to pay the United States $212.5 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. First Tennessee is headquartered in Memphis, Tennessee.
“First Tennessee admitted failings that resulted in poor quality FHA loans. While First Tennessee profited from these loans, taxpayers incurred substantial losses when the loans defaulted,” said John A. Horn, the Acting U.S. Attorney for the Northern District of Georgia. “The settlement, as well as the investigation that preceded it, illustrates that the Department of Justice will closely scrutinize entities that cause financial injury to the Government, and, in turn, the American taxpayer.”
“First Tennessee’s reckless underwriting has resulted in significant losses of federal funds and was precisely the type of conduct that caused the financial crisis and housing market downturn,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will continue to hold accountable lenders who put profits before both their legal obligations and their customers, and restore wrongfully claimed funds to FHA and the treasury.”
“We are pleased that First Tennessee has acknowledged facts that demonstrate its failure to comply with HUD’s requirements and has agreed to settle with the government,” said Helen Kanovsky, HUD’s General Counsel. “We thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us to make this settlement a reality. We hope this agreement sends a message to those lenders with whom we do business that HUD takes compliance very seriously and so should they.”
“Our investigation found that First Tennessee caused FHA to pay claims on loans that the bank never should have approved and insured in the first place,” said HUD Inspector General David A. Montoya. “This settlement reinforces my commitment to combat fraud in the origination of single family mortgages insured by the FHA and makes certain that only qualified, creditworthy borrowers who can repay their mortgages are approved under the FHA program.”
Between January 2006 and October 2008, First Tennessee, through its subsidiary First Horizon Home Loans Corporation (“First Horizon”), participated in the FHA insurance program as a Direct Endorsement Lender (DEL). As a DEL, First Tennessee had the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL such as First Tennessee approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to the U.S. Department of Housing and Urban Development (HUD), FHA’s parent agency, for the losses resulting from the defaulted loan.
Under the DEL program, neither the FHA nor HUD reviews a loan before it is endorsed for FHA insurance. DELs such as First Tennessee are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program. In August 2008, First Tennessee sold First Horizon to Metlife Bank, N.A. (“Metlife”), a wholly-owned subsidiary of Metlife, Inc., which thereafter originated FHA-insured mortgages under the Metlife name. In February 2015, Metlife agreed to pay $123.5 million to resolve its False Claims Act liability arising from its FHA originations after it acquired First Horizon from First Tennessee.
The settlement announced today resolves allegations that First Tennessee failed to comply with FHA origination, underwriting, and quality control requirements. As part of the settlement, First Tennessee admitted to the following facts:
- From January 2006 through October 2008, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements.
- Beginning in late 2007, First Tennessee significantly increased its FHA originations. The quality of First Tennessee’s FHA underwriting significantly decreased during 2008 as its FHA lending increased.
- Beginning no later than early 2008, First Tennessee became aware that a substantial percentage of its FHA loans were not eligible for FHA mortgage insurance due to its own quality control findings. These findings were routinely shared with First Tennessee’s senior managers. Despite internally acknowledging that hundreds of its FHA mortgages had material deficiencies, and despite its obligation to self-report findings of material violations of FHA requirements, First Tennessee failed to report even a single deficient mortgage to FHA.
First Tennessee’s conduct caused FHA to insure hundreds of loans that were not eligible for insurance and, as a result, FHA suffered substantial losses when it later paid insurance claims on those loans.
Assistant United States Attorney Paris A. Wynn handled this matter for the U.S. Attorney’s Office.
The investigation of the allegations in the Government’s complaint was a coordinated effort between the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Northern District of Georgia, HUD, and HUD’s Office of Inspector General.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
First Tennessee Bank N.A. Agrees to Pay $212.5 Million to Resolve False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
First Tennessee Bank N.A. has agreed to pay the United States $212.5 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. First Tennessee is headquartered in Memphis, Tennessee.
“First Tennessee’s reckless underwriting has resulted in significant losses of federal funds and was precisely the type of conduct that caused the financial crisis and housing market downturn,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will continue to hold accountable lenders who put profits before both their legal obligations and their customers, and restore wrongfully claimed funds to FHA and the treasury.”
Between January 2006 and October 2008, First Tennessee, through its subsidiary First Horizon Home Loans Corporation (First Horizon), participated in the FHA insurance program as a Direct Endorsement Lender (DEL). As a DEL, First Tennessee had the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL such as First Tennessee approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, neither the FHA nor HUD reviews a loan before it is endorsed for FHA insurance. DELs such as First Tennessee are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program. In August 2008, First Tennessee sold First Horizon to MetLife Bank N.A. (MetLife), a wholly-owned subsidiary of MetLife Inc., which thereafter originated FHA-insured mortgages under the MetLife name. In February 2015, MetLife agreed to pay $123.5 million to resolve its False Claims Act liability arising from its FHA originations after it acquired First Horizon from First Tennessee.
“First Tennessee admitted failings that resulted in poor quality FHA loans,” said Acting U.S. Attorney John A. Horn of the Northern District of Georgia. “While First Tennessee profited from these loans, taxpayers incurred substantial losses when the loans defaulted. The settlement, as well as the investigation that preceded it, illustrates that the Department of Justice will closely scrutinize entities that cause financial injury to the government, and, in turn, the American taxpayer.”
The settlement announced today resolves allegations that First Tennessee failed to comply with FHA origination, underwriting and quality control requirements. As part of the settlement, First Tennessee admitted to the following facts: From January 2006 through October 2008, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements. Beginning in late 2007, First Tennessee significantly increased its FHA originations. The quality of First Tennessee’s FHA underwriting significantly decreased during 2008 as its FHA lending increased. Beginning no later than early 2008, First Tennessee became aware that a substantial percentage of its FHA loans were not eligible for FHA mortgage insurance due to its own quality control findings. These findings were routinely shared with First Tennessee’s senior managers. Despite internally acknowledging that hundreds of its FHA mortgages had material deficiencies, and despite its obligation to self-report findings of material violations of FHA requirements, First Tennessee failed to report even a single deficient mortgage to FHA. First Tennessee’s conduct caused FHA to insure hundreds of loans that were not eligible for insurance and, as a result, FHA suffered substantial losses when it later paid insurance claims on those loans.
“Our investigation found that First Tennessee caused FHA to pay claims on loans that the bank never should have approved and insured in the first place,” said HUD Inspector General David A. Montoya. “This settlement reinforces my commitment to combat fraud in the origination of single family mortgages insured by the FHA and makes certain that only qualified, creditworthy borrowers who can repay their mortgages are approved under the FHA program.”
“We are pleased that First Tennessee has acknowledged facts that demonstrate its failure to comply with HUD’s requirements and has agreed to settle with the government,” said HUD General Counsel Helen Kanovsky. “We thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us to make this settlement a reality. We hope this agreement sends a message to those lenders with whom we do business that HUD takes compliance very seriously and so should they.”
The investigation of the allegations in the government’s complaint was a coordinated effort between the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Northern District of Georgia, HUD and HUD’s Office of Inspector General.
Essex County, New Jersey, Man Admits Taking Cellphone Pictures While Sexually Abusing Two ChildrenRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man today admitted sexually abusing two girls and recording the conduct on his cellphone, U.S. Attorney Paul J. Fishman announced.
Justin Kinney, 26, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an indictment charging him with two counts of producing child pornography. Kinney was previously arrested and charged by federal complaint on April 20, 2014, and is currently in state custody on related charges.
According to the papers filed in the case and statements made in court:
On Oct. 25, 2012, law enforcement executed a search warrant on Kinney’s laptop computer and cellphone, which revealed several files of child pornography that appeared to be taken with Kinney’s cellphone. Kinney admitted that two of the images, dated Aug. 19, 2012 and Oct. 10, 2012, were taken by him while he sexually abused two girls.
On each count of the production of child pornography, Kinney faces a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. Kinney will be required to register as a sex offender. Sentencing is currently scheduled for Sept. 9, 2015.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Danielle M. Corcione and Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
Defense counsel: Assistant Federal Public Defender John Yauch Esq., Newark
Eleven Sentenced to Combined 97.5 Years in Federal Prison for Methamphetamine Drug Trafficking OffensesRead the Press Release
Fayetteville, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced the final defendants tied to a large-scale drug trafficking organization that operated in Northwest Arkansas were sentenced today. The Honorable Timothy L. Brooks presided over the sentencing hearings in the United States District Court in Fayetteville.
U.S. Attorney Eldridge commented, “These defendants transported large amounts of methamphetamine from California to Arkansas where they sold and distributed it into our communities. The drug trafficking organization responsible has now been successfully dismantled, and its members brought to justice. Our office remains focused on identifying and prosecuting those responsible for bringing drugs onto our streets and crime into our communities.”
“Methamphetamine is a plague that drug traffickers inflict upon law-abiding communities without any regard for the violence and destruction that often accompanies its use,” said Acting Deputy Special Agent in Charge of HSI New Orleans Jerry Templet. “This case illustrates the successful ongoing partnership between HSI, ATF, the DEA, and local law enforcement partners with the Rogers Police Department, Springdale Police Department, Eureka Springs Police Department and the Washington County Sheriff's Office that continue to identify and bring Arkansas drug traffickers to justice.”
"These sentences mark the final blow reflecting the successful dismantling of this large scale methamphetamine trafficking organization," said DEA Assistant Special Agent in Charge David Downing. "By removing these criminals from the streets of Arkansas, they can no longer distribute this toxic poison to our communities. Through remarkable partnerships with HSI, ATF, and local law enforcement partnerships with Rogers Police Department, Springdale Police Department, Eureka Springs Police Department and the Washington County Sheriff's Office, we are making major progress in preventing meth trafficking from taking hold in our communities. This investigation is a compelling example of that success." said Downing.
As early as April, 2014, investigators with United States Homeland Security Investigations (HSI), Drug Enforcement Agency (DEA), and the Rogers, Arkansas Police Department began an investigation into a drug trafficking organization involving the distribution of methamphetamine in Northwest Arkansas. Numerous controlled buys, surveillance, search warrants, and monitoring were used during the course of the investigation, which resulted in the seizure of approximately ten pounds of methamphetamine and eight weapons, including one fully automatic rifle. Investigators were able to track approximately $150,000.00 in cash deposits made into Arkansas banks which were later withdrawn in California.
The defendants were sentenced as follows:
Rudy Richard Sanchez, aka “Lil Man”, 36, of Lowell, Arkansas, was sentenced on May 5, 2015, to 151 months in prison followed by three years of supervised release on one count of Delivery of More Than Five Grams of Actual Methamphetamine. At sentencing, Sanchez was found to be a Career Offender.
Jarvis Miranda, aka “Crazy”, 35, of Springdale, Arkansas, was sentenced on May 28, 2015, to 293 months in prison, 240 months on count one, Conspiracy to Distribute Methamphetamine, and 120 months on count two, Felon in Possession of a Firearm, with 53 months on count two to run consecutively to count one, and 67 months on count two to run concurrently with count one, followed by three years of supervised release on each count, to run concurrently. At sentencing, Miranda was found to be a Career Offender.
Fabian Uribe, aka “Sporty”, 28, of Arleta, California, was sentenced on June 1, 2015, to 240 months in prison followed by three years of supervised release, a $12,500.00 fine and a five year denial of federal benefits on one count of Conspiracy to Distribute a Substance Containing Detectable Amounts of Methamphetamine. Uribe is a member of the “Project Boys” (Sureno faction) a violent street gang based in Pacoima, California.
Cruz Eduardo Segundo, aka “Eddie”, 26, of North Hills, California, was sentenced on June 1, 2015, to 135 months in prison followed by three years of supervised release and a five year denial of federal benefits on one count of Conspiracy to Distribute a Substance Containing Detectible Amounts of Methamphetamine.
Joey Jonathon Morse, aka “Red”, 30, of Springdale, Arkansas, was sentenced on May 26, 2015, to 72 months in prison followed by four years of supervised release on one count of Delivery of Methamphetamine.
Tara Marie Hickman, 39, of Burbank, California, was sentenced on June 1, 2015, to 70 months in prison followed by three years of supervised release on one count of Conspiracy to Distribute a Substance Containing Detectible Amounts of Methamphetamine.
Sara Chaisson, 26, of Houma, Louisiana, was sentenced on March 19, 2015, to 60 months in prison followed by three years of supervised release on one count of Conspiracy to Distribute Methamphetamine.
Henry Alonzo Diaz, aka “Hank”, 34, of Montebello, California, was sentenced on June 1, 2015, to 60 months in prison followed by three years of supervised release, and a $25,000.00 fine on one count of Interstate or Foreign Travel or Transportation In Aid of Racketeering Enterprises.
Karen Vasquez-Benitez, 27, of Los Angeles, California, was sentenced on June 1, 2015, to 60 months in prison followed by three years of supervised release and a $15,000.00 fine on one count of Interstate or Foreign Travel or Transportation In Aid of Racketeering Enterprises.
Nichole Rana Hayes, 27, of Riverside, California, was sentenced on May 27, 2015, to 15 months in prison followed by three years of supervised release on one count of Distribution of Methamphetamine.
Roxanna Hernandez, 28, of Springdale, Arkansas, was sentenced on May 27, 2015, to 15 months in prison, followed by three years of supervised release on one count Aiding and Abetting the Distribution of Methamphetamine.
This case was investigated by Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Rogers, Arkansas Police Department, the Springdale, Arkansas Police Department, the Eureka Springs, Arkansas Police Department, the Washington County, Arkansas Sheriff’s Office and the Arkansas State Police. Assistant United States Attorneys Brandon Carter and Kenny Elser prosecuted the cases for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Detroit One Partnership Announces Initiative to Reduce Gun ViolenceRead the Press Release
The Detroit One violence reduction partnership today announced an initiative to reduce gun violence in Detroit. The initiative includes enforcement and public awareness about the serious federal penalties that face violent felons who possess firearms. Joining in the announcement were United States Attorney Barbara L. McQuade, Detroit Mayor Mike Duggan, Wayne County Prosecutor Kym Worthy, Detroit Police Chief James Craig and John Broad, President, Crime Stoppers of Michigan. The Wayne County Prosecutor’s Office and the U.S. Attorney’s Office are focusing on prosecution of the illegal possession of guns by felons with violent criminal convictions. Felons with one prior violent crime conviction who possess a gun in Detroit will face federal prosecution. An offender with three prior violent felony convictions who merely possesses a gun faces a mandatory minimum sentence of 15 years. An offender who uses a gun during a violent crime faces a mandatory minimum sentence of five years, and an additional mandatory minimum sentence of 25 years for a second offense. The public awareness campaign is designed to deter possession of illegal guns by violent felons by raising awareness of the significant federal penalties for firearms offenses. The campaign’s message, "You Do The Math: Felon + Gun = Long Federal Sentences" will be communicated on billboards and in a public service announcement for broadcast media. The billboards are located on E. I-94 Freeway and Conner and the Southfield Freeway and Grand River. Last year, the Detroit One partnership tackled carjacking in Detroit with a similar enforcement and deterrence strategy. Carjacking fell by 32 percent last year. During the past three years, fatal and non-fatal shootings have ranged between 1,400 and 1,600 per year. Violent crimes often increase during warmer weather, so this campaign is designed to coincide with the approaching summer months. "We hope that if violent felons are aware of the very serious penalties for carrying a gun, then they will be less likely to carry one,” McQuade said, “If violent felons do carry guns, we are prepared to back up our warnings with federal prosecution.” Detroit Mayor Mike Duggan stated, "This kind of partnership among all of our local, state and federal law enforcement agencies is something people are going to start seeing a lot more of in Detroit. When we are operating under a single, unified strategy and engaging our community partners more effectively, we will see a reduction in gun violence, just as we have seen reductions in every other major category or crime over the past two years." Wayne County Prosecutor Worthy stated, “We must continue to think of innovative ways to address the problem of gun violence. The Detroit One Initiative does just that. Our work together will allow us to be more effective in reducing the gun violence that plagues our community” “Strong, collaborative relationships with the common goal of making our city safer will continue to reduce violent crime,” said Detroit Police Chief James E. Craig. “This has been a very effective crime-abatement strategy here in Detroit and in other cities around the country.” “Crime Stoppers is pleased to be a partner in the Detroit One violence reduction initiative,” stated John Broad, President. “We encourage those who witness a crime to call their local police department or Crime Stoppers at 1-800-SpeakUp.” Participating agencies in the Detroit One initiative include the Detroit Police Department, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, U.S. Marshals Service, Homeland Security Investigations, Internal Revenue Service, Michigan State Police, Michigan Department of Corrections, Wayne County Sheriff’s Department, Wayne County Prosecutor’s Office and U.S. Attorney’s Office. To view the PSA, please visit our website at http://www.justice.gov/usao/mie/index.html or on YouTube at https://youtu.be/7Nqbi6iUk1QClarksburg woman sentenced for selling heroin near local playgroundRead the Press Release
CLARKSBURG, WEST VIRGINIA – Alicia Radel, 31, of Clarksburg, was sentenced today to 24 months in prison for selling heroin near a local playground, United States Attorney William J. Ihlenfeld, II, announced.
An investigation by the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, revealed that Radel sold heroin in September 2014 near the Clarksburg City Park – North Side Playground. She pled guilty in January 2015 to one count of “Distribution of Heroin within 1,000 Feet of a Protected Location.”
In another matter, Ellan Miller, 54, of Fairmont, West Virginia was sentenced today to 41 months in prison after she was discovered in possession of medication containing pseudoephedrine in Marion County, West Virginia in September 2014. She pled guilty in January 2015 to one count of “Possession of Pseudoephedrine to be used in the Manufacturing of Methamphetamine,” following an investigation by the Three Rivers Drug Task Force.
Assistant U.S. Attorney Shawn Morgan prosecuted Radel and Assistant U.S. Attorney Zelda Wesley prosecuted Miller on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Career bank robber sentencedRead the Press Release
INDIANAPOLIS - United States Attorney Josh J. Minkler announced today that a Fort Wayne man convicted of conspiracy to commit bank robbery in Fishers, IN. was sentenced to 27 years in federal prison. Deandre Armour, 39, Fort Wayne, was sentenced by U. S. District Judge Sarah Evans Barker after being convicted of conspiracy to commit armed bank robbery, bank robbery and brandishing a firearm in relation to a crime of violence.
Minkler said, “Mr. Armour and his robbery team were career bank robbers who held hostages at gunpoint. He will be well into his 60s when he is released from federal prison. Hopefully, that means his career as a bank robber is done.”
In early June 2013, the Federal Bureau of Investigation (FBI) learned that Armour and several others were planning to commit bank robberies in the vicinity of Indianapolis. FBI agents began surveillance of Armour as he cased a Community Bank branch located on Reynolds Drive in Fishers. Agents watched Armour case the same bank for approximately two weeks.
By June 25, 2013, Armour had decided to rob the Community Bank the following morning. Armour and several associates traveled to Fishers from Fort Wayne, Indiana. That evening, Armour and two conspirators purchased items to be used in the robbery, including clothing for disguises, zip ties, latex gloves, and a set of two-way radios.
Early the morning of June 26, 2013, Armour and a conspirator dropped off two accomplices, Duryea Rogers and Xavier Hardy, near the Community Bank, where they hid themselves in a dumpster enclosure near the back door to the bank. Rogers and Hardy wore disguises provided by Armour and carried loaded firearms. Shortly thereafter, Armour and two other accomplices parked in a nearby parking lot where Armour could observe the bank and where he directed the activities of Rogers and Hardy by two-way radio.
A bank employee arrived at about 8:00 AM, and when she went to unlock the back door, Rogers and Hardy emerged from hiding and forced her into the bank at gunpoint. When the employee was unable to open the vault by herself, Rogers forced her onto the floor where he secured her hands and feet with zip ties. Rogers and Hardy then stole the employee’s car and fled. Armour and his accomplices followed in two other vehicles.
FBI agents and officers of the Fishers Police Department quickly tracked the three vehicles to the vicinity of North-by-Northeast Boulevard and Carney Drive near 96th Street in Fishers. Hardy, who was still armed, was apprehended in a hotel lot after a short foot chase. Duryea Rogers fled into a nearby hotel, where he was arrested after officers found him hiding in a closet. Rogers’ handgun and various other evidence was found nearby.
Three other accomplices have been sentenced for their role in the robbery.
Duryea Rogers 28, Fort Wayne- received a 12 year sentence
Xavier Hardy, 27, Fort Wayne, received an 11 year sentence
Tahitia Burnett, 42, Fort Wayne, received a seven year sentence
According to Assistant United States Attorneys William L. McCoskey and Michelle P. Brady, who prosecuted this case for the government, Armour faces five years of supervised release after serving his sentence.
Anchorage Woman Sentenced to Two Years Imprisonment for HIPAA ViolationRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced that on Friday, May 29, United States District Court Judge, Ralph R. Beistline, sentenced an Anchorage woman, Stacy Laulu, age 33, to two years imprisonment on her convictions for two felony violations of the Health Information Portability and Accountability Act (“HIPAA”). The case represented the first felony HIPAA prosecution in Alaska, and one of the few in the country.
Laulu was convicted after trial along with her co-defendant , Stuart Seugasala, who was recently sentenced to life imprisonment on convictions for Drug Conspiracy, Kidnapping, Use of Firearms in Furtherance of those crimes, and HIPAA violations.
According to prosecutors, at the time of the crimes, Laulu worked at Providence Hospital as a financial counselor. In that capacity, she had access to computerized medical records. The evidence at trial established that, in mid-March 2013, Seugasala contacted Laulu on her cellular telephone and asked her to check the medical records of two people he had victimized: one victim who had been sexually assaulted and another who had been shot by Seugasala. Laulu determined the identity of the victims (one of whom was still hospitalized), and provided Seugasala with confidential information about the victims, including what they had told hospital staff about how they sustained their injuries, the severity of the injuries, and what was reflected in hospital records about their cooperation with law enforcement. Laulu communicated this information through text messages to Seugasala.
Seugasala was stopped by the Anchorage Police Department (APD) in May 2013. At the request of the Drug Enforcement Administration (DEA), APD seized Seugasala’s cellular telephone. DEA agents later obtained a search warrant for this telephone, which revealed the texts between Seugasala and Laulu, which Seugasala had attempted to delete from his phone. Laulu was then confronted by DEA agents and admitted to sending the information to Seugasala. Providence Hospital was then notified and Laulu’s employment was terminated.
Evidence at trial established that Laulu’s husband was a close friend and former co-defendant with Seugasala in a federal drug case. At the time of her crimes, Laulu’s husband was awaiting trial on murder charges. Witnesses at Seugasala’s and Laulu’s trial testified that, at times, Seugasala would arrange to drop off drug proceeds for Laulu and her husband’s benefit.
In imposing a two-year sentence on Laulu, Judge Beistline stated that Laulu “displayed no respect for the law or the private and confidential information of the victims,” adding that “in this day and age, every human being expects private records to remain private.” In disclosing the private information to Seugasala, Judge Beistline noted that Laulu assisted Seugasala and his gang’s “lawless pursuits.”
Ms. Loeffler commends the Drug Enforcement Administration, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the United States Marshals Service, the Anchorage Police Department, the Alaska State Troopers, and the Valdez Police Department for the investigation that led to the convictions in this case. Providence Hospital also provided valuable assistance in the form of records and testimony at trial.
Alabama Woman Pleads Guilty for Involvement in Stolen Identity Refund Fraud RingRead the Press Release
A Phenix City, Alabama, resident pleaded guilty today in the Middle District of Alabama for her role in a stolen identity refund fraud (SIRF) scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
According to court documents, between March 2011 and May 2014, Teresa Floyd conspired with her daughter, Lasondra Miles Davis, and others to defraud the United States by filing false federal income tax returns using stolen identities. Miles Davis obtained the means of identification of individuals without their authorization and provided the stolen identities to Floyd. Floyd and her co-conspirators obtained Electronic Filing Identification Numbers (EFINs) from the Internal Revenue Service (IRS) in the names of tax preparation businesses, which Floyd then used to file false tax returns with the stolen identities. All of the false returns included fraudulent claims for tax refunds. Floyd, Miles Davis and others cashed the refund checks at several companies in Alabama and Georgia, and Floyd deposited refund checks into her bank account.
Floyd faces a mandatory statutory sentence of two years in prison for the aggravated identity theft count and an additional statutory maximum sentence of 10 years in prison for the conspiracy count. Both counts include a statutory maximum fine of $250,000. Miles Davis pleaded guilty on April 10 to one count of aggravated identity theft and is scheduled to be sentenced on Aug. 12.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler and Michael P. Hatzimichalis of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
31 May 2015
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Ostby in Billings on May 29, 2015, and entering pleas of Not Guilty were:
- LEVI MICHAEL BIERWILER, a 39-year-old resident of Billings, appeared on charges of conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, BIERWILER faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Federal Bureau of Investigation Task Force, Drug Enforcement Administration and Homeland Security Investigations. PACER Case Reference. 15-53
- JAMES WARD PRICE, a 29-year-old resident of Las Vegas, Nevada, appeared on charges of conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine, possession of a firearm in furtherance of a drug trafficking crime, and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, PRICE faces life in prison, $5,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration, Federal Bureau of Investigation HIDTA and Homeland Security Investigations. PACER Case Reference. 15-58
- HOPE MARGIE RATHBUN, a 36-year-old resident of Billings, appeared on charges of conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine, and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious charges contained in the indictment, RATHBUN faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration, Federal Bureau of Investigation HIDTA and Homeland Security Investigations. PACER Case Reference. 15-59
Appearing before U.S. Magistrate Lynch in Missoula on May 28, 2015, and entering pleas of Not Guilty were:
- BRUCE EDWARD DENNISON, a 52-year-old resident of Bozeman, appeared on charges of conspiracy to distribute heroin and possession with intent to distribute heroin. If convicted of the most serious charge contained in the indictment, DENNISON faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Missouri River Drug Task Force and the Federal Bureau of Investigation. PACER Case Reference. 15-25
- MARK DAVID SMITH, a 37-year-old resident of Bozeman, appeared on charges of possession of a firearm not registered in the national firearms registration and transfer record. If convicted of the charge contained in the indictment, SMITH faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Montana State University Police Department. PACER Case Reference. 15-23
Appearing before U.S. Magistrate Johnston in Great Falls on May 26, 2015 and entering pleas of Not Guilty were:
- DARIN LEE MILLER, a 42-year-old resident of Havre, appeared on charges of income tax evasion. If convicted of the most serious charge contained in the indictment, MILLER faces 5 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Internal Revenue Service Criminal Investigation Division. PACER Case Reference. 15-32
Appearing before U.S. Magistrate Ostby in Billings on May 26, 2015 and entering pleas of Not Guilty were:
- ELIJAH LEE ROCK, a 32-year-old resident of Hardin, appeared on charges of assault resulting in substantial bodily injury of a dating partner, assault with a dangerous weapon, use and discharge of a firearm during and in relation to a crime of violence, robbery involving motor vehicle, and use and brandish a firearm during and in relation to a crime of violence. If convicted of the most serious charges contained in the indictment, ROCK faces life in prison, $250,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-60
Appearing before U.S. Magistrate Ostby in Billings on May 20, 2015 and entering pleas of Not Guilty were:
- GORDON DEAN SMALL, a 43-year-old resident of Billings, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, SMALL faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation, Bureau of Indian Affairs and the Billings Police Department. PACER Case Reference. 15-48
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
29 May 2015
Yancey County Man Sentenced to More Than 21 Years in Prison for Producing Child PornographyRead the Press Release
ASHEVILLE, N.C. – On Thursday, May 28, 2015 U.S. District Judge Martin Reidinger sentenced Patrick Ronald Silva, 44, of Burnsville, N.C. to 262 months in prison on production of child pornography charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Silva was ordered to serve a lifetime of supervised release, to register as a sex offender, and to pay $6,000 as restitution to his victim.
Ryan L. Spradlin, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas, and Sheriff Gary Banks of the Yancey County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.
In June 2014, Silva pleaded guilty to one count of production of child pornography. According to court documents and statements made in court, from May 26, 2012 to June 26, 2012, in Yancey County, Silva solicited his co-defendant, Tabatha Black, to produce child pornography of a female minor. Court records indicate that Silva then distributed the child pornography via the Internet and e-mail. Law enforcement executed a search warrant at Silva’s residence, and seized his computer and cellular phones. A forensic examination of the seized items revealed that they contained images and videos of child pornography. Silva has been in federal custody since April 2014. Black was sentenced in February 2015 to 210 months in prison and a lifetime of supervised release, after pleading guilty to one count of production of child pornography.
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Judge Reidinger also sentenced a second defendant today on child pornography charges. Robert George Ross, 29, of Old Fort, N.C. was sentenced to 60 months in prison, a lifetime of supervised release, and was ordered to register as a sex offender. According to court records, in July 2013 in McDowell County, Ross received and possessed images depicting child pornography. Court records show that Ross possessed approximately 800 images of child pornography as well as numerous videos. Ross pleaded guilty in October 2014 to one count of possession of child pornography and one count of receipt of child pornography. He has been in federal custody since April 2014. The case was investigated by HSI, the Yancey County Sheriff’s Office, and the McDowell County Sheriff’s Office.
In announcing today’s sentences, Acting U.S. Attorney Rose said, “The U.S. Attorney’s Office will continue to work closely with our law enforcement partners to protect the most vulnerable members of our communities from child predators. Victimizing innocent children is repulsive and in all instances will receive swift and forceful attention from my office.” Rose also thanked all the law enforcement agencies that investigated these cases for their outstanding work.
The defendants will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Washington Man Pleads Guilty in Missoula to Drug and Prostitution CrimesRead the Press Release
MISSOULA – Yusuf Reeves, 47, of Spokane Valley, Washington, pleaded guilty today in Missoula federal court to drug and racketeering-related charges. He faces a mandatory prison sentence of five to forty years, up to five million dollars in fines, and at least four years supervised release for the drug crime. For the racketeering crime involving prostitution, he faces up to five years in prison, a $250,000 fine, and three years of supervised release. U.S. Magistrate Court Judge Jeremiah Lynch presided over the change of plea and set sentencing for September 17, 2015 in Missoula. Reeves was detained pending sentencing.
Yusuf pleaded guilty to one count of conspiracy to possess with the intent to distribute and to distribute methamphetamine and heroin as well as one count of interstate travel in aid of racketeering. In an Offer of Proof filed with the Court, federal prosecutor Cyndee Peterson stated that Reeves received methamphetamine and heroin from sources in Washington state and elsewhere. With several others, Reeves conspired to bring heroin and methamphetamine to Missoula County for distribution, and did so over a ten-month period in 2014. During the summer of 2014, Reeves also travelled from Spokane, Washington, to Missoula, Montana, with five others to promote prostitution in violation of Montana law. They rented hotel rooms, or directed others to rent rooms, in Missoula to facilitate those crimes.
This case was prosecuted by Assistant U.S. Attorney Cyndee Peterson and investigated by the Federal Bureau of Investigation, Montana Violent Crime Task Force, Missoula Street Crimes Unit, Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Utah Brothers Sentenced for Trafficking Marijuana into Rhode IslandRead the Press Release
PROVIDENCE, R.I. – Benjamin J. Daniels, 38, of Sandy, Utah, was sentenced today in federal court in Providence, R.I., to 34 months in federal prison to be followed by 5 years supervised release for his participation in a conspiracy to ship 239 pounds of marijuana to Rhode Island from Pennsylvania in December 2013.
Benjamin’s brother, Michael Daniels, 33, of Provo, Utah, formerly of Tiverton, R.I., was sentenced on December 18, 2014, to 18 months in federal prison to be followed by 3 years supervised release for his participation in the drug trafficking conspiracy.
The sentences, imposed by U.S. District Court Chief Judge William E. Smith, are announced by United States Attorney Peter F. Neronha and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations (HSI) for New England.
Benjamin Daniels pleaded guilty on September 14, 2014, to conspiracy to distribute and possess with the intent to distribute fifty kilograms or more of marijuana. Michael Daniels pleaded guilty on August 28, 2014, to conspiracy to distribute and possess with the intent to distribute fifty kilograms or more of marijuana.
According to court files and information presented to the court, in December 2013, HSI agents in Pittsburgh, working with the Customs and Border Protection Air and Marine Division in Riverside, CA, conducted an investigation of a single-engine aircraft located at an airport in New Castle, PA, believed to be involved in the transportation of large quantities of marijuana. A court authorized search of the aircraft resulted in the discovery of twelve sealed boxes marked “Sun Max, Hot Water Solutions” which contained a total of 239 pounds of marijuana. HSI agents determined that Benjamin Daniels arranged to have the packages flown to New England for delivery, either to Benjamin Daniels or a person designated by him.
On December 16, 2013, federal agents followed the shipment from Pennsylvania to North Central Airport in Smithfield, RI. Once on the ground, at the direction of Benjamin Daniels, the boxes were transported to a hotel in Lincoln, RI. At the hotel, HSI agents arrested Michael Daniels as he was loading the boxes into a rented vehicle that he was driving. Agents seized the twelve boxes of marijuana and $4,694 in cash found on Michael Daniels’ person.
A federal arrest warrant was issued for Benjamin Daniels. He was arrested on January 31, 2014, during a traffic stop in Park City, Utah.
The case was prosecuted by Assistant U.S. Attorney Paul F. Daly, Jr.
The Rhode Island State Police High Intensity Drug Trafficking Area Task Force and Warwick Police Department assisted in the investigation of this matter.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Two Wyoming Residents and One Arizona Resident Convicted of Tax Fraud and Obstruction of JusticeRead the Press Release
On May 28, a jury in the District of Wyoming convicted two Cheyenne, Wyoming, residents and a Sedona, Arizona, resident on charges of conspiracy to defraud the United States and obstructing a grand jury investigation. The announcement was made by Acting Assistant Attorney General Caroline D. Ciraolo for the Justice Department’s Tax Division, U.S. Attorney Christopher A. Crofts for the District of Wyoming and Special Agent in Charge Gilbert R. Garza for the Internal Revenue Service (IRS) Criminal Investigations.
Joseph Ruben Hill aka Joe Hill, 56, and Lucille Kathleen Hill aka Kathy Hill, 58, both of Cheyenne, Wyoming, and Gloria Jean Reeder, 68, of Sedona, Arizona, were convicted on charges of conspiracy to defraud the United States and obstructing a grand jury investigation following a three-week trial. In July 2014, Joe Hill, Kathy Hill and Reeder were indicted for conspiring to defraud the United States by promoting and using a sham trust scheme. Joe Hill and Reeder were also indicted for conspiring to obstruct the grand jury investigation in the District of Wyoming by causing individuals to withhold records required to be produced by federal grand jury subpoenas. Joe Hill was indicted on four substantive counts of obstruction with respect to four individuals that he corruptly persuaded to withhold documents from the grand jury. The jury convicted Joe Hill, Kathy Hill and Reeder of all charges alleged in the indictment.
“Yesterday’s verdicts demonstrate that the Tax Division is committed to identifying abusive tax schemes and pursuing and prosecuting the promoters to the fullest extent of the law,” said Acting Assistant Attorney General Ciraolo.
The evidence at trial established that Joe Hill and Kathy Hill last filed a federal individual income tax return in 1994, while Reeder had not filed since 1985. None of the defendants paid any income taxes from those years to the present. Joe Hill and Kathy Hill operated the business Creative Consulting Group (CCG), which sold sham trusts that they claimed would reduce or eliminate an individual’s federal income tax liability. Essentially, the scheme involved assigning income to the trust by using a bank account in the trust’s name that was opened with a false federal tax identification number. The Hills, Reeder, and many other CCG clients who testified during the trial used the CCG trusts to conceal income and assets from the IRS. Kathy Hill and Reeder both had prior IRS assessments of income tax in the 1990s, which they never paid. To prevent the IRS from seizing their homes, they both used false liens to conceal the properties’ equity.
During 2007 through 2012, Joe Hill and Kathy Hill earned almost $500,000 in income through selling the CCG trusts, while Reeder earned more than $400,000 in income from insurance commissions and a travel business. Three trial witnesses who used the CCG trusts --Lawrence Paille, Amanda Campbell and Stephanie Maciel -- previously pleaded guilty to conspiracy to defraud the United States. The unreported income related to the scheme exceeded $2.7 million.
Chief U.S. District Judge Nancy D. Freudenthal set sentencing on Aug 6. The maximum penalty faced by each of the three defendants for conspiracy to defraud the United States is five years in prison and a $250,000 fine. For their convictions for conspiracy to obstruct an official proceeding, Joe Hill and Reeder each face a maximum sentence of 20 years in prison and a $250,000 fine.
“This verdict should send a clear message, promoting or participating in a fraudulent tax scheme is unacceptable; there is no secret formula that can eliminate a person's tax obligations,” said Special Agent in Charge Garza. “We owe it to every American taxpayer to investigate and prosecute individuals who participate in these fraudulent tax schemes.”
The case was investigated by special agents from the Cheyenne, Wyoming, and Denver, Colorado, offices of IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Todd I. Shugart and Eric J. Heimann of the U.S. Attorney’s Office for the District of Wyoming and Trial Attorney Lori A. Hendrickson of the Tax Division.
Two Wyoming Residents and One Arizona Resident Convicted of Tax Fraud and Obstruction of JusticeRead the Press Release
WASHINGTON – On May 28, a jury in the District of Wyoming convicted two Cheyenne, Wyoming, residents and a Sedona, Arizona, resident on charges of conspiracy to defraud the United States and obstructing a grand jury investigation. The announcement was made by Acting Assistant Attorney General Caroline D. Ciraolo for the Justice Department’s Tax Division, U.S. Attorney Christopher A. Crofts for the District of Wyoming and Special Agent in Charge Gilbert R. Garza for the Internal Revenue Service (IRS) Criminal Investigations.
Joseph Ruben Hill aka Joe Hill, 56, and Lucille Kathleen Hill aka Kathy Hill, 58, both of Cheyenne, Wyoming, and Gloria Jean Reeder, 68, of Sedona, Arizona, were convicted on charges of conspiracy to defraud the United States and obstructing a grand jury investigation following a three-week trial. In July 2014, Joe Hill, Kathy Hill and Reeder were indicted for conspiring to defraud the United States by promoting and using a sham trust scheme. Joe Hill and Reeder were also indicted for conspiring to obstruct the grand jury investigation in the District of Wyoming by causing individuals to withhold records required to be produced by federal grand jury subpoenas. Joe Hill was indicted on four substantive counts of obstruction with respect to four individuals that he corruptly persuaded to withhold documents from the grand jury. The jury convicted Joe Hill, Kathy Hill and Reeder of all charges alleged in the indictment.
“Yesterday’s verdicts demonstrate that the Tax Division is committed to identifying abusive tax schemes and pursuing and prosecuting the promoters to the fullest extent of the law,” said Acting Assistant Attorney General Ciraolo.
The evidence at trial established that Joe Hill and Kathy Hill last filed a federal individual income tax return in 1994, while Reeder had not filed since 1985. None of the defendants paid any income taxes from those years to the present. Joe Hill and Kathy Hill operated the business Creative Consulting Group (CCG), which sold sham trusts that they claimed would reduce or eliminate an individual’s federal income tax liability. Essentially, the scheme involved assigning income to the trust by using a bank account in the trust’s name that was opened with a false federal tax identification number. The Hills, Reeder, and many other CCG clients who testified during the trial used the CCG trusts to conceal income and assets from the IRS. Kathy Hill and Reeder both had prior IRS assessments of income tax in the 1990s, which they never paid. To prevent the IRS from seizing their homes, they both used false liens to conceal the properties’ equity.
During 2007 through 2012, Joe Hill and Kathy Hill earned almost $500,000 in income through selling the CCG trusts, while Reeder earned more than $400,000 in income from insurance commissions and a travel business. Three trial witnesses who used the CCG trusts --Lawrence Paille, Amanda Campbell and Stephanie Maciel -- previously pleaded guilty to conspiracy to defraud the United States. The unreported income related to the scheme exceeded $2.7 million.
Chief U.S. District Judge Nancy D. Freudenthal set sentencing on Aug 6. The maximum penalty faced by each of the three defendants for conspiracy to defraud the United States is five years in prison and a $250,000 fine. For their convictions for conspiracy to obstruct an official proceeding, Joe Hill and Reeder each face a maximum sentence of 20 years in prison and a $250,000 fine.
“This verdict should send a clear message, promoting or participating in a fraudulent tax scheme is unacceptable; there is no secret formula that can eliminate a person's tax obligations,” said Special Agent in Charge Garza. “We owe it to every American taxpayer to investigate and prosecute individuals who participate in these fraudulent tax schemes.”
The case was investigated by special agents from the Cheyenne, Wyoming, and Denver, Colorado, offices of IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Todd I. Shugart and Eric J. Heimann of the U.S. Attorney’s Office for the District of Wyoming and Trial Attorney Lori A. Hendrickson of the Tax Division.
Two Tennessee Men Plead Guilty to Killing During Home Invasion RobberyRead the Press Release
Two Tennessee men pleaded guilty to using a firearm to kill during a home invasion robbery they conducted on May 7, 2011, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Rivera of the Middle District of Tennessee.
Demario Winston, 27, of Clarksville, Tennessee, and Michael Massey, 26, of Lexington, Tennessee, pleaded guilty before Chief District Court Judge Kevin H. Sharp of the Middle District of Tennessee to conspiracy to commit Hobbs Act Robbery and use of a firearm in a crime of violence resulting in death. Massey also pleaded guilty to attempted Hobbs Act Robbery. A sentencing hearing for Massey is scheduled for Sept. 18, 2015, and a sentencing hearing for Winston will be scheduled at a later date.
According admissions reflected in the plea agreements, on May 7, 2011, Winston, Massey and others attempted to rob a home in Clarksville, and Massey used a sledge hammer to gain entry. The conspirators previously had been advised that a large amount of cocaine and cash was stored inside a safe in the basement of the home.
The defendants further admitted that, while inside the home, Winston, who was armed with a 9mm pistol, engaged in a gun fight with the homeowner on the first floor as other conspirators attempted to force one of the occupants of the home, Raul Triana, to open the safe in the basement, and pistol-whipped him in the face in the process. Evidence introduced in the plea hearing indicated that in response to the shooting on the first floor, some of the conspirators fled the home, and Massey, who was armed with an assault rifle, fled through the basement where he encountered Triana and shot and killed him.
In addition, according to the statement of facts in support of Massey’s plea, on Oct. 21, 2011, he and a co-defendant robbed the owner of a Clarksville-based construction company at gunpoint.
This case was investigated by the Clarksville Police Department and the DEA. The case is being prosecuted by Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee.
Two Rochester Men Charged with Bank RobberyRead 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 Michael Hogan and Maximillion Broadnax, both of Rochester, NY, were arrested and charged by criminal complaint with conspiring with each other to rob and with robbing the Chase Bank at 2900 Dewey Avenue in Rochester. The charges carry a maximum possible penalty of 20 years in prison, a fine of $250,000, or both.
Assistant U.S. Charles E. Moynihan, who is handling the case, stated that according to the complaint, on May 22, 2015, Hogan entered the Chase Bank just after it opened and passed the bank teller a note demanding money and saying that nobody would be hurt if the teller complied. The teller provided Hogan with a specific amount of United States Currency.
Hogan left the bank and entered a white minivan in which Broadnax was waiting and the two drove away. Broadnax was arrested later that same day at 17 Second Street in Rochester by members of the Rochester Police Department who were looking for him in connection with his involvement in stolen vehicles. While taking Broadnax into custody, officers saw that Broadnax’s pants fell down and a large amount of United States currency fell out. Officers investigating the case also took Hogan into custody when he approached 17 Second Street.
The charges are a culmination of an investigation by the Rochester Area Major Crimes Task Force which includes the Federal bureau of Investigation, the New York State Police, the Rochester Police Department, the Gates Police Department and the Greece Police Department and the Irondequoit Police Department.
The fact that the defendants have been charged with a crime is merely an accusation and the defendants are presumed innocent until and unless proven guilty.
Two Pine Ridge Men Sentenced for Assault with A Dangerous Weapon and Assault Resulting in Serious Bodily InjuryRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that two Pine Ridge, South Dakota, men convicted of Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury were sentenced on June 2, 2015, by Chief Judge Jeffrey L. Viken, U.S. District Court. The men were found guilty at the conclusion of four-day federal jury trial in Rapid City in February.
Wesley Running Shield, age 28, and Michael Alford, age 33, both of Pine Ridge, were each sentenced to 15 years in custody, 3 years of supervised release, and ordered to pay a $200 special assessment to the Federal Crime Victims Fund.
The convictions stem from Running Shield and Alford assaulting a male with a metal bar and shod feet on June 12, 2014, at Pine Ridge. The defendants utilized a metal bar to break the victim’s leg and hand and caused a large laceration on his head.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety.
Assistant U.S. Attorneys Sarah B. Collins and Kathryn N. Rich prosecuted the case.
Running Shield and Alford were immediately turned over to the custody of the U.S. Marshal's Service.
Two New Jersey Men Convicted on Drug Distributions ChargesRead the Press Release
TRENTON, N.J. – Two New Jersey men were convicted today for their roles in a drug-dealing business involving the sale of cocaine, marijuana, ecstasy and methylone, U.S. Attorney Paul J. Fishman announced.
Luke Atwell, 34, of Hamilton, New Jersey, and Christopher Castelluzzo, 30, of Bayonne, New Jersey, were convicted of conspiracy to distribute or possess with intent to distribute methylone, cocaine, MDMA, and marijuana following a two-week trial before U.S. District Judge Freda L. Wolfson. The jury deliberated for two hours before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial:
Atwell and Castelluzzo were partners in a drug dealing conspiracy that spanned 29 months. In March 2013, the Drug Enforcement Administration (DEA) conducted an investigation resulting in the seizure of more than six kilograms of methylone at a drug mill in East Orange, New Jersey, that was tied to Atwell and Castelluzzo. About a month later, in April 2013, agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), seized 2.9 kilograms of methylone that Atwell intended to pick up at the Manville, New Jersey, Post Office. Agents replaced the package with a dummy package, which Atwell picked up and placed in the car he occupied with Castelluzzo. Following the arrest of both defendants outside the Manville Post Office, agents searched various electronic devices of the defendants and uncovered email communications establishing a drug distribution conspiracy dating back to 2010.
The drug charges on which Atwell and Castelluzzo were convicted carry a maximum potential penalty of 20 years in prison. Sentencing for both defendants is scheduled for Sept. 3, 2015.
U.S. Attorney Fishman credited special agents of HSI, under the direction of Acting Special Agent in Charge Kevin Kelly; and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Courtney A. Howard and Thomas S. Kearney of the Criminal Division in Newark.
Defense counsel: Castelluzzo: Dawn M. Florio Esq., New York
Atwell: Pasquale F. Giannetta Esq., WayneTwo Men Plead Guilty to Crack Cocaine Distribution ChargesRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Russell Gordon, 31, of Ansonia, Connecticut and Robert Joiner, Jr., 30, of Detroit, Michigan pleaded guilty today in U.S. District Court to conspiring to distribute 28 grams or more of cocaine base, often referred to as crack cocaine. Gordon also pleaded guilty to one count of possession with intent to distribute 28 grams or more of cocaine base and Joiner pleaded guilty to one count of distribution of cocaine base.
Court records reveal that between December 2013 and January 2015, Gordon and Joiner conspired with each other and with others to sell crack cocaine in Portland, Maine. Gordon would arrange for the acquisition of drugs out of state. Once the drugs were transported to Maine, they were provided to retail distributors who would sell the drugs in the Portland area, and then return the cash proceeds to Gordon. During the course of the investigation, law enforcement officers conducted controlled purchases of crack cocaine from Joiner and from other members of the conspiracy. Gordon was arrested on January 9, 2015 at 66 Smith Street in Portland. At the time of his arrest, officers found in close proximity to him a bag containing 89 net grams of cocaine base and over $9,000 in cash.
Russell Gordon faces between five and 40 years in prison and a $5,000,000 fine on each count of conviction. Joiner faces up to 40 years in prison and $5,000,000 fine on the conspiracy count and up to 20 years in prison and a $1,000,000 fine on the distribution count. Both will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
This case was investigated by the Southern Maine Gang Task Force, which is comprised of investigators from the Federal Bureau of Investigation, the Portland Police Department, Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration. The Biddeford and Lewiston Police Departments, the Maine Drug Enforcement Agency, and the Maine State Police also assisted with the investigation.
The case also results from the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Two Former Will County Bank Officials Sentenced in Concealing Loan Delinquencies of Two Customers Causing $1.1 Million LossRead the Press Release
CHICAGO — A former director and a former officer of First Community Bank and Trust in Will County were sentenced for fraudulently making false entries in the bank’s records which generated reports falsely representing that loans were current, when, in fact they were delinquent. MARTIN E. SCHMIDT, JR., 56, of Beecher, was sentenced to 8 months of imprisonment by U.S. District Court Judge Charles Kocoras. DONNA M. BARBER, 53, also of Beecher, was sentenced by U.S. District Court Judge Jorge L. Alonso to one year of supervised release, with the first six months to be served as home confinement. Schmidt and Barber were ordered to pay restitution in the amounts of $1,183,374 and $684,938, respectively. Schmidt must report to the Bureau of Prisons on June 2, 2015. As a result of their convictions, both defendants are also barred from associating with or being employed by a financial institution for ten years.
The defendants together concealed that loans totaling approximately $2.8 million where delinquent, and caused the bank to lose more than $1.1 million. Schmidt was senior vice president for lending and a member of the board of directors of First Community Bank and Trust, which operates in Beecher and Peotone, and co-defendant Barber was vice president for mortgage lending.
Schmidt and Barber were charged together in October 2014 in a criminal information with making false bank reports with intent to defraud. Schmidt pled guilty in November 2014, and Barber pled guilty in December 2014.
“Both defendants were long-time trusted employees of the bank,” argued Assistant U.S. Attorney Brian P. Netols in the government’s sentencing memoranda, “In committing the offense, [they] repeatedly betrayed and violated that trust.”
Schmidt and Barber admitted that they caused and made false entries in the bank’s past due accounts report for September 2009 by intentionally omitting to disclose as past due two customers’ loans and advances in the total principal amount of approximately $2.5 million.
According to court documents, Schmidt was the point of contact for Customer K, and Barber was the point of contact for Customer M, and their compensation was based, in part, on the performance of the loans for which they were each responsible. By September 2008, Schmidt and Barber each knew that Customers K and M were unable to make payments to the bank on their various loans. They agreed that they needed to take action to prevent the delinquent accounts from appearing on the bank’s reports and began concealing their past due nature. The false entries extended from September 2008 until October 2009.
Barber, with Schmidt’s knowledge and approval, and Schmidt made and caused false entries in loan records allowing Customer M to skip payments without paying the interest due and extending notes without interest payments being current. Some false entries were made on a retroactive basis so the actual condition of the loans would not appear on the bank’s current monthly records. With these serious delinquencies concealed, the bank made additional loans to Customer M totaling $708,274, on which he subsequently defaulted.
At Schmidt’s request, Barber also made false entries in the Bank’s records relating to Customer K which allowed loan payments to be improperly skipped and overrode restrictions on additional advances. Schmidt then approved $269,038 in loans to Customer K after Schmidt knew that Customer K was then unable to repay. Schmidt also made unauthorized undocumented advances to Customer K totaling $105,562, paid $22,500 of Customer K’s overdrafts, and issued an unauthorized letter of credit to Customer K in the amount of $80,000.
Finally, Schmidt deceived the bank’s board of directors by leading them to believe that he and Barber were properly managing the bank’s loans, when they were actually fraudulently creating reports that made it appear that the loan portfolio was in better shape than it was.
The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Two Additional Men Charged in Federal Drug ConspiracyRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles today announced the indictment and arrest of Shane Henderson, 41, and Christopher Trent Glover, 42, for conspiracy to possess with intent to distribute and to distribute methamphetamine. Henderson and Glover were indicted along with eleven individuals who had previously been indicted for conspiracy to traffic methamphetamine and heroin. Several of the defendants have also been charged with conspiracy to launder money.
The case was investigated by Special Agents with the Drug Enforcement Administration, as well as agents and officers from the State Law Enforcement Division, City of Charleston Police Department, South Carolina Highway Patrol, Spartanburg County Sheriff’s Office and Anderson County Sheriff’s Office.
Assistant United States Attorney Nick Bianchi of the Charleston office is prosecuting the case.
The United States Attorney stated that the charges alleged in the Indictment are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Tonawanda Woman Pleads Guilty to Drug ChargesRead 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 Gail Bishop, 44, of Tonawanda, NY, pleaded guilty to attempt to possess with intent to distribute cocaine before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who is handling the case, stated that on February 3, 2013, the defendant arranged to purchase cocaine from a confidential source (CS) working with the Drug Enforcement Administration at a local coffee shop in Buffalo, NY. Bishop was arrested on February 4, 2013 after providing the CS with $5,000 in United States currency.
Officers subsequently conducted a search of the defendant’s residence and recovered nearly 80 grams of cocaine and items used to cut and package cocaine. Bishop co-owned the residence with her husband Anthony Bishop who was, at the time, and remains in jail for an October 2013 conviction on drug trafficking charges.
The conviction is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division.
Sentencing is scheduled for September 10, 2015 at 1:00 p.m. before Judge Arcara.
Three Men Indicted on Multiple Counts of Fraud and Aggravated Identity TheftRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Joe Eugene Loving (46) and John Thomas Humphreys (41), both of Conroe, Texas, and Paul Corbin Pennington, Jr. (27, Orange Park) with aggravated identity theft, bank fraud, false representation of a Social Security number, and manufacturing and passing counterfeit Federal Reserve notes. Each faces up to 30 years in federal prison on the bank fraud charge, 20 years on the charges of manufacturing and passing counterfeit Federal Reserve notes, 5 years for false representation of a Social Security number, and a 2-year mandatory term of imprisonment for the aggravated identity theft charge.
According to the indictment, in January 2015, Loving, Humphreys, and Pennington obtained the personal identification information of various individuals from Texas and used the information to commit bank fraud in Florida. The three also manufactured and passed counterfeit Federal Reserve notes throughout Clay County.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Clay County Sheriff’s Office, the Green Cove Springs Police Department, and the United States Secret Service. It will be prosecuted by Assistant United States Attorney Kevin C. Frein.
Three Members of ‘Dirty Block’ Atlantic City, New Jersey, Gang Admit Roles in Drug Distribution and Money Laundering ConspiraciesRead the Press Release
TRENTON, N.J. – Two Atlantic City, New Jersey, men and a Millville, New Jersey, woman today admitted their roles in a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.
Franklin Simms, a/k/a “Fat Boy,” 31, pleaded guilty to a superseding information charging him with one count of conspiring to distribute, and to possess with intent to distribute, 100 grams or more of heroin. Rayshell Strong, a/k/a “Big Truck,” 34, pleaded guilty to a superseding information charging him with one count of conspiring to distribute a detectable amount of heroin. Latasha Cherry, a/k/a “Tasha,” 31, pleaded guilty to a superseding information charging her with one count of conspiring to engage in money laundering. All three defendants entered their pleas today before U.S. District Judge Anne E. Thompson in Trenton federal court.
All three were members of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village and Schoolhouse Apartments. To date, 23 of the 34 defendants charged in this matter have been convicted, either through guilty pleas or following trial.
According to documents filed in this case and statements made in court:
Simms and Strong admitted distributing heroin on behalf of one of the gang’s alleged leaders, Tyrone Ellis, a/k/a “Rome,” 33, of Galloway, New Jersey, who was among the 34 defendants charged in May 2013. Simms and Strong admitted that from October 2012 through March 2013, they conspired to distribute between 400 and 700 grams of heroin. Cherry admitted she conspired with Ellis and others to launder the proceeds by transferring cash onto reloadable prepaid debit cards.
The charges against Ellis are merely allegations, and he is considered innocent unless and until proven guilty.
The drug conspiracy charge to which Simms pleaded guilty carries a maximum potential penalty of 40 years in prison and a $5 million fine. The drug distribution conspiracy charge to which Strong pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. The money laundering charge to which Cherry pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Sentencing for all three defendants is scheduled for Sept. 21, 2015.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s sentencing.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; and the Millville Police Department for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.
Defense counsel:
Simms: Troy A. Archie Esq., Cinnaminson, New Jersey
Strong: J. Michael Farrell Esq., Philadelphia
Cherry: Richard Sparaco Esq., Cherry Hill, New JerseyThree Individuals Indicted and Arrested for False Statements in Loan ApplicationsRead the Press Release
SAN JUAN, P.R. – Yesterday, a Federal grand jury returned a three-count indictment charging Alejandro Enrique Mayendía-Blanco, Nell N. Blanco-Casanovas (mother of Alejandro) and Orlando Mayendía-Díaz (father of Alejandro) for false statements in loan applications, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) is in charge of the investigation. The indictment was unsealed today and the defendants were arrested.
These charges stem from schemes used by Alejandro Mayendía-Blanco and his co-defendants to obtain money from mortgage lending institutions. The settlement statements for the loans charged all indicate that the buyers (the parents) provided a payment on the day of the closing. However, per the bank records, Mayendía-Blanco refunded his parents either the same day of the transaction or the following day, using the funds obtained from the bank as seller’s proceeds. Mayendía-Blanco’s parents defaulted on the charged loans.
On or about May 24, 2007, the defendants herein and others known and unknown to the Grand Jury, aiding and abetting each other, knowingly made material false statements to First Equity Mortgage Bankers, Inc. (FEMBI), in connection with a loan application to obtain a mortgage loan in the amount of $1,320,000.00, which was to be assigned, sold, and transferred to First Bank of Puerto Rico, a federally insured financial institution.
The false statements include, but are not limited to the following: the HUD Settlement Statement Form states that Nell N. Blanco-Casasnovas (the borrower) provided $314,267.27 as cash from borrower, when in truth and in fact, as the defendants well knew, such statement was false in that Alejandro E. Mayendía-Blanco (seller), refunded Nell N. Blanco-Casasnovas on or about May 25, 2007, with the funds he obtained as the seller’s proceeds, thus making the loan proceeds the true source of the funds.
Counts two and three of the indictment charge Mayendía-Blanco and his father Mayendía-Díaz with false statements in loan applications for two loans in the amount of $140,000.00 and $148,000.00. They used the same scheme described above.
The case is being investigated by ICE-HSI and prosecuted by Assistant United States Attorney Mariana E. Bauzá-Almonte. If found guilty, defendants are facing a maximum penalty of 30 years in prison.
Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty. The investigations are ongoing.
Tennessee Man Pleads Guilty to Conspiracy to Defraud Cornerstone Community Bank in Dalton, GeorgiaRead the Press Release
ROME, Ga. - Grady Wayne Fricks has pleaded guilty to conspiracy charges arising out of a scheme to defraud Cornerstone Community Bank in Dalton, Georgia.
“This defendant used his connection with a bank insider to obtain a fraudulently inflated loan,” said Acting U.S. Attorney John Horn. “Fricks’ ability to manipulate people to further his scheme left the bank and its stockholders shouldering the loss.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Bank fraud is not a victimless crime. With this guilty plea, Mr. Fricks will be held accountable for his criminal actions and a clear message sent to others considering such greed based fraudulent acts that this is a serious crime with serious consequences.”
According to Acting U.S. Attorney Horn, the charges and other information presented in court: In November 2004, Fricks contacted a senior vice president at Cornerstone Community Bank and stated that he needed an $850,000 loan to purchase property in Ringgold, Georgia. Fricks did not reveal that he had already signed a contract to purchase the property for only $425,000. Fricks had done business with that senior vice president for many years before this, both at Cornerstone and at the bank where the employee had worked before joining Cornerstone. And Fricks had allowed the bank employee free use of his condominium at a beach in Florida, five to ten times.
The senior vice president violated Cornerstone’s policies and procedures by not obtaining a copy of the sales contract between Fricks and the seller of the property to verify the contract price. The senior vice president also allowed Fricks to select an appraiser to appraise the property. Fricks paid the appraiser $1,000 to inflate the appraised value of the property so that Cornerstone would approve the $850,000 loan Fricks was seeking. In addition, Fricks gave the appraiser $100 in cash as a “tip.” The appraiser provided Fricks with a fraudulently inflated appraisal report, which stated that the market value of the property was $1,010,000.
Prior to the loan closing, Fricks contacted the senior vice president at Cornerstone and asked, “Do you care if I get some money back at closing?” The senior vice president responded, “What the bank cares about is that the HUD-1 settlement statement shows a sales price of $850,000.”
At the direction of Fricks, a real estate closing agent created two HUD-l settlement statements: a correct one that listed the purchase price of the property as $425,000, and a fraudulent one that listed the purchase price of the property as $850,000. Fricks forged or caused someone else to forge the seller’s signature on the fraudulent HUD-l settlement statement and then caused the fraudulent HUD-1 settlement statement and the fraudulent appraisal report to be submitted to Cornerstone. Cornerstone relied upon the false information provided by Fricks and loaned Fricks $850,000 to purchase the property. Fricks used only half of the loan proceeds for the purpose intended and used the remainder for purposes that were not authorized or approved by Cornerstone.
Approximately two years later, in October 2006, Fricks contacted the same senior vice president at Cornerstone and stated that he wanted to borrow more money against the property. Fricks paid the same appraiser $1,000 to re-appraise the property and once again directed the appraiser to fraudulently inflate its appraised value. Fricks also gave the appraiser another $100 tip. The appraiser provided Fricks with a new appraisal report, which fraudulently stated that the market value of the property was $1,433,000. Fricks caused the new appraisal report to be sent to Cornerstone, knowing that it was fraudulent. The new appraisal was more than 40% higher than the previous appraisal conducted by the same appraiser just two years earlier. As a result of this new appraisal, Cornerstone released the additional collateral pledged by Fricks when the loan was originated in 2004, consisting of five real properties and the guaranty of Fricks Properties, a company owned by Fricks.
In November 2006, in reliance upon the false and misleading information and documents provided by Fricks and his unindicted co-conspirators, Cornerstone loaned Fricks an additional $177,000. Fricks did not repay the loans, and the bank foreclosed on the property.
Fricks, 65, of Nashville, Tennessee, pleaded guilty before U.S. District Court Judge Harold L. Murphy. Sentencing for Fricks will be August 14, 2015, at 1:30 p.m.
This case is being investigated by the Federal Bureau of Investigation with the assistance of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
Assistant United States Attorney Russell Phillips is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao-ndga.
Tampa Man Pleads Guilty to Firearms and Theft of Government Property OffensesRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Jarvos Leonard White (25, Tampa) today pleaded guilty to possessing a firearm and ammunition after a felony conviction and theft of government property. He faces a maximum penalty of 10 years in federal prison on each count. A sentencing date has not yet been set.
According to court documents, on December 15, 2014, a customer saw White drop a handgun on the floor at the Citrus Park Town Center shopping mall in Tampa. Shortly after, White was arrested as he attempted to leave the mall. In his back pocket, he had pistol with a round chambered. Ten days later, on Christmas morning, several vehicles were burglarized in the Boyette Springs subdivision in Riverview. One of the burglarized vehicles was an FBI vehicle. Among the items stolen were three firearms, ammunition, and body armor. A blood stain from within the vehicle was subsequently determined to match White’s DNA.
This case was investigated by the FBI and the Hillsborough County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Carlton C. Gammons.
Tallahassee Man Sentenced to Prison for Use of Bogus Court OrderRead the Press Release
TALLAHASSEE, FLORIDA – Frank William Johannissohn, 67, of Tallahassee, was sentenced late yesterday by United States District Judge Robert L. Hinkle to 25 months in federal prison for mail fraud and aggravated identity theft. The sentence was announced today by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
In July 2013, Johannissohn mailed a fraudulent “Redress of Alimony” order bearing the forged signatures of a Wakulla County circuit court judge and a deputy clerk of the court to the United States Office of Personnel Management. The fraudulent “Redress of Alimony” purported to order the termination of Johannissohn’s obligations to provide health insurance, survivor benefits, and alimony for his former spouse. Johannissohn mailed the fraudulent document in an attempt to remove his former spouse as the surviving beneficiary of his federal retirement annuity.
The case was investigated by the United States Office of Personnel Management’s Office of Inspector General with the assistance of the Wakulla County Sheriff’s Office and the Leon County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Jason Beaton.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Tacoma Woman Who Led Tax Fraud and ID Theft Scheme Sentenced to 30 Months in PrisonRead the Press Release
A Tacoma, Washington woman who used a prison pen pal program to obtain other peoples’ personally identifying information was sentenced today in U.S. District Court in Tacoma to 30 months in prison for wire fraud and aggravated identity theft, announced U.S. Attorney Annette L. Hayes. SHANNON HENDERSON, 45, filed more than 150 fraudulent tax returns between 2013 and 2014, seeking more than $170,000 in tax refunds. Some $56,000 in tax refunds were sent to HENDERSON at the addresses of friends and family members before the scheme was discovered. At the sentencing hearing U.S. District Judge Ronald B. Leighton said identity theft victimizes people “for no reason other than greed.”
According to the plea agreement, between 2007 and 2009, while incarcerated at the Washington Women’s Correctional Center at Purdy, Washington, HENDERSON became pen pals with various inmates across the country and obtained the names and identifying information of real people from these inmates. HENDERSON also purchased the personal information of people who were employed in Washington State by ABM Janitorial Services from a co-conspirator in order to use these names to file false and fraudulent U.S. Individual Income Tax Returns. HENDERSON used both the names provided by inmates and the names purchased from the co-conspirator to file the fraudulent returns. HENDERSON had the fraudulently claimed refunds loaded onto prepaid debit cards and had the cards mailed to her using the addresses of friends and relatives.
Writing to the court prosecutors explained how the identity theft had damaged victims, such as those working for the janitorial service. One victim wrote in his impact statement that his credit score was affected and as a result he was denied credit and job opportunities. Judge Leighton ordered HENDERSON to pay $56,605 in restitution to the IRS.
The case was investigated by Internal Revenue Service Criminal Investigation and is being prosecuted by Assistant United States Attorney Rebecca Cohen.
Suquamish Tribal Member Sentenced to 18 Months in Prison for Domestic Violence AssaultsRead the Press Release
An enrolled member of the Suquamish Indian Tribe was sentenced today in U.S. District Court in Tacoma to 18 months in prison for two counts of assault resulting in substantial bodily injury, announced U.S. Attorney Annette L. Hayes. WADE WILLIAMS, 43, of Suquamish, Washington admitted assaulting his domestic partner in February 2013 and in May 2014. Originally charged for the February 2013 assault in Suquamish Tribal Court, the case was later charged federally when the pattern of abuse continued and culminated with an additional serious assault in May 2014. At the sentencing hearing U.S. District Judge Ronald B. Leighton said, “I was taught to treat women not as chattel or as property, but as equals ... As partners. How have we gotten so depraved that we tolerate this conduct for so long?”
According to records filed in the case, in February 2013, WILLIAMS assaulted his then girlfriend, spitting in her face, breaking her cell phone to prevent her from calling the police, and pushing her to the floor where she fell on other items bruising her hands, arms and legs. The victim sought medical attention, and WILLIAMS was charged in Tribal Court. WILLIAMS later violated a Tribal Court-issued No Contact Order and at the urging of WILLIAMS and his family, the victim recanted her statement to police and reconciled with WILLIAMS. As a result he Tribal Court charges were dismissed. On May 5, 2014, WILLIAMS repeatedly beat the victim with a broom, and grabbed her and held her so tightly she could not breathe and lost consciousness. The victim fell and hit her head on stone steps, creating permanent vision problems that ultimately required surgery.
WILLIAMS pleaded guilty to these two federal assault crimes in March 2015.
The case was investigated by the Suquamish Tribal Police Department and the FBI. The case is being prosecuted by Assistant United States Attorneys Ye-Ting Woo and Amy Jaquette.
Because the Suquamish Indian Reservation is a federal-jurisdiction reservation, certain violent crimes occurring on that Reservation are investigated by the FBI in conjunction with the Suquamish Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered during their lives than Caucasian women. The U.S. Attorney’s Office in this District coordinates the engagement and action relative to public safety in tribal communities, including enhanced efforts to investigate and prosecute violent crimes against Indian and non-Indian women and children on federal-jurisdiction reservations under the Justice Department’s Tribal Safety program. To learn more about the Justice Department’s Tribal Safety program, visit http://www.justice.gov/tribal/.
Sixteen Arrested in Cocaine and Crack Cocaine Distribution ConspiracyRead the Press Release
DALLAS — Sixteen defendants have been charged in a federal indictment, partially unsealed yesterday, with felony offenses stemming from their role in a cocaine and crack cocaine distribution conspiracy, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
The defendants, most from north Texas and Oklahoma, were arrested Wednesday in a joint operation led by the Dallas Police Department, Dallas County Sheriff’s Office and the Dallas FBI – Violent Gang Safe Streets Task Force. Each made his initial appearance in federal court yesterday. Some were released on bond, and others are scheduled for detention hearings today and early next week.
The indictment charges each of the below-listed defendants with one count of conspiracy to distribute cocaine base (crack cocaine) and one count of conspiracy to distribute cocaine.
Acacedric Rashod Ware, a/k/a “CD,” 37
Al Torrell Beasley, a/k/a “Rody,” 38
Alondo Wheeler, a/k/a “Lil Dude,” 34
Chester Brown, a/k/a “Baldy,” 40
Christopher Johnson, a/k/a “1800,” 43
Frederick Glennard Brown, a/k/a “Phillip Edwards,” “Moe Curly,” and “Chester Brown,” 39
Jalisa Camille Shields, 27
Maurice Demon Bagley, a/k/a “Money Bags,” 31
Michael Seamster, a/k/a “Little Wanky,” 42
Norberta Annette Ramsey, 43
Omar Sharif Cole, a/k/a “Baby Loc,” 38
Quincy Deon Denby, 33
Raul Alvarado, 34
Roger Deundrea Jackson, a/k/a “Boo-Cat” and “Cat,” 40
Sherman Grant, a/k/a “Tank,” 45
Shirley Delois Young, a/k/a “Shirley Bird,” 45
Count One of the indictment alleges that since approximately January 2013, the defendants conspired together and with others to possess with the intent to distribute and to distribute a mixture or substance containing a detectable amount of cocaine base (crack cocaine).
Count Two of the indictment alleges that during the same period, the defendants conspired together and with others to possess with the intent to distribute and to distribute a mixture or substance containing a detectable amount of cocaine, its salt, optical and geometric isomers, and salts of isomers.
A federal indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each count carries a maximum statutory penalty of 20 years in federal prison and a $1 million fine.
Assistant U.S. Attorney Phelesa Guy is prosecuting.
Second Individual Convicted, and Another Charged, in Wide-Ranging Investigation into Multi-Million Dollar Fraud Scheme Involving U.S. Treasury ChecksRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today the conviction of a second defendant, and the unsealing of an indictment against a third defendant, in an ongoing investigation into various check cashing businesses in Baton Rouge that cashed nearly $4 million in fraudulently-obtained U.S. Treasury checks during 2012 and 2013.
In one case, ALBELK REYES SERRATA, age 26, of Allentown, Pennsylvania, has pled guilty to conspiracy to steal government funds, in violation of Title 18, United States Code, Section 371. As SERRATA acknowledged in Court in connection with his guilty plea before Chief U.S. District Judge Brian A. Jackson yesterday, he participated in a scheme to fraudulently obtain United States Treasury checks and have them cashed by an associate who operated a money service business on Florida Boulevard in Baton Rouge. From April 2012 through April 2013, SERRATA and his co-conspirators fraudulently obtained and cashed approximately 370 Treasury checks, having a total face value of approximately $2.2 million. After the checks were received and cashed in Baton Rouge, SERRATA’s co-conspirator would retain a percentage of the funds for herself, withdraw the remainder of the funds in cash, and then transmit the funds to SERRATA and others. As a result of his role in the scheme, SERRATA faces significant incarceration, fines, restitution, and supervised release following imprisonment.
In another case, CARLOS L. LINARES, age 55, of Baton Rouge, Louisiana, has been charged by a federal grand jury with failing to maintain an effective anti-money laundering program, in violation of Title 31, United States Code, Sections 5318 and 5322. The Indictment was returned by the grand jury on May 20, 2015 and unsealed in Court yesterday. According to the Indictment, LINARES owned, operated, and managed a separate business, also on Florida Boulevard in Baton Rouge, named Latinos Supermarket, LLC. The Indictment alleges that, from March 2012 through May 2013, LINARES took in and deposited more than 270 Treasury checks, totaling $1.6 million, the vast majority of which were addressed to individuals with out-of-state addresses, and most of which had been obtained through fraud. According to the Indictment, LINARES failed to follow the requirements placed on him as a registered money service business and failed to prevent his store from being used to facilitate criminal activity and launder money. If convicted, LINARES also faces significant incarceration, fines, restitution, and supervised release following imprisonment.
U.S. Attorney Green stated: “My office takes these types of offenses very seriously. These crimes put millions of taxpayer dollars at stake, make it more difficult for taxpayers to properly file their own taxes, and threaten the public’s confidence in the Internal Revenue Service. In the case of Mr. Linares’ alleged failure to maintain an effective anti-money laundering program, his alleged conduct invited criminals to come to Baton Rouge and allowed the criminals to line their pockets with the proceeds of fraudulent activity. My office appreciates IRS-CI’s commitment to working with us to root out this type of criminal activity.”
IRS Criminal Investigation Special Agent-in-Charge Jerome R. McDuffie stated: “IRS Criminal Investigation is proud to utilize our forensic accounting skills in cooperation with the U.S. Attorney’s Office to put a stop to bank fraud. The Indictment against Mr. Linares reflects that we will vigorously pursue those who willfully assist in the negotiation of fraudulently-obtained refund checks and fail to comply with federal reporting requirements. Identity Theft, and the prosecution of all involved parties, remains one of our agency’s top priorities.”
This ongoing investigation is being handled by the Internal Revenue Service—Criminal Investigation Division, with assistance from the Louisiana Office of Financial Institutions. The matter is being prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as a Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Ryan Crosswell.
NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Roswell Man Sentenced to Federal Prison for Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Albert Johnny Mondragon, 38, of Roswell, N.M., was sentenced this morning in federal court in Las Cruces, N.M., to 84 months in prison followed by four years of supervised release for trafficking methamphetamine in Lea County, N.M.
Mondragon was arrested on federal charges in Roswell on May 27, 2014, based on a criminal complaint charging him with possession of methamphetamine with intent to distribute. According to the complaint, Mondragon committed the offense on March 7, 2014, in Hobbs, N.M.
Mondragon subsequently was charged on Oct. 7, 2014, in a two-count indictment with possession of methamphetamine with intent to distribute and being a felon in possession of a firearm and ammunition.
On Jan. 14, 2015, Mondragon pled guilty to possession of methamphetamine with intent to distribute. In entering the guilty plea, Mondragon admitted that he was stopped by officers in Hobbs on March 7, 2014, and the officers found approximately 222.98 grams of methamphetamine in the back of his vehicle.
This case was investigated by the Las Cruces offices of the DEA and the Bureau of Alcohol, Tobacco and Firearms and the Lea County Drug Task Force, with assistance from the 5th Judicial District Attorney’s Office. Assistant U.S. Attorney Terri J. Abernathy of the U.S. Attorney’s Las Cruces Branch Office prosecuted this case.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department and the Jal Police Department, and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Ross Ulbricht, A/K/A “Dread Pirate Roberts,” Sentenced in Manhattan Federal Court to Life in PrisonRead the Press Release
Convicted of Multiple Counts for Creating and Operating the “Silk Road" Website, Used by More than 100,000 Users to Buy and Sell More Than $200 Million Worth of Illegal Drugs and Other Unlawful Goods and Services
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ROSS ULBRICHT, a/k/a “Dread Pirate Roberts,” was sentenced today in Manhattan federal court to life in prison in connection with his operation and ownership of Silk Road, a hidden website designed to enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement between January 2011 and October 2013. ULBRICHT was found guilty of each of the seven charges he faced on February 5, 2015, following a four-week jury trial. U.S. District Judge Katherine B. Forrest imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Make no mistake: Ulbricht was a drug dealer and criminal profiteer who exploited people’s addictions and contributed to the deaths of at least six young people. Ulbricht went from hiding his cybercrime identity to becoming the face of cybercrime and as today’s sentence proves, no one is above the law.”
According to the evidence presented at trial, statements made during other public proceedings including today’s sentencing, and other court documents:
ULBRICHT created Silk Road in January 2011, and owned and operated the underground website until it was shut down by law enforcement authorities in October 2013. Silk Road emerged as the most sophisticated and extensive criminal marketplace on the Internet, serving as a sprawling black-market bazaar where unlawful goods and services, including illegal drugs of virtually all varieties, were bought and sold regularly by the site’s users. While in operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to more than 100,000 buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.
ULBRICHT deliberately operated Silk Road as an online criminal marketplace intended to enable its users to buy and sell drugs and other illegal goods and services anonymously and outside the reach of law enforcement. ULBRICHT sought to anonymize transactions on Silk Road in two principal ways. First, ULBRICHT operated Silk Road on what is known as “The Onion Router,” or “Tor” network, a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the networks’ users. Second, ULBRICHT designed Silk Road to include a Bitcoin-based payment system that served to facilitate the illegal commerce conducted on the site, including by concealing the identities and locations of the users transmitting and receiving funds through the site.
The vast majority of items for sale on Silk Road were illegal drugs, which were openly advertised as such on the site. As of September 23, 2013, the Silk Road home page displayed nearly 13,000 listings for controlled substances, listed under such categories as “Cannabis,” “Dissociatives,” “Ecstasy,” “Intoxicants,” “Opioids,” “Precursors,” “Prescription,” “Psychedelics,” and “Stimulants.” From November 2011 to September 2013, law enforcement agents made more than 60 individual undercover purchases of controlled substances from Silk Road vendors. These purchases included heroin, cocaine, ecstasy, and LSD, among other illegal drugs, and were filled by vendors believed to be located in more than ten different countries, including the United States, Germany, the Netherlands, Canada, the United Kingdom, Spain, Ireland, Italy, Austria, and France.
The narcotics distributed on Silk Road have been linked to at least six overdose deaths across the world. These overdose deaths included Jordan M., a 27-year old Microsoft employee who was found unresponsive in front of his computer, which was logged onto Silk Road at the time, and died as a result of heroin and other prescription drugs that he had ordered from Silk Road. Preston B., from Perth, Australia, and Alejandro N., from Camino, California, both 16 years old, died as a result of taking 25i-NBOMe, a powerful synthetic drug designed to mimic LSD (commonly referred to as “N-Bomb”), which was purchased from Silk Road. Additional victims included Bryan B., a 25-year old from Boston, Massachussetts, and Scott W., a 36-year old from Australia, who both died as a result of heroin purchased from Silk Road, and Jacob B., a 22-year old from Australia, who died from health complications that were aggravated by the use of drugs purchased from Silk Road.
In addition to illegal narcotics, other illicit goods and services were openly bought and sold on Silk Road. For example, as of September 23, 2013, there were: 159 listings under the category “Services,” most of which offered computer hacking services, such as a listing by a vendor offering to hack into social networking accounts of the customer’s choosing; 801 listings under the category “Digital goods,” including malicious software, hacked accounts at various online services, and pirated media content; and 169 listings under the category “Forgeries,” including offers to produce fake driver’s licenses, passports, Social Security cards, utility bills, credit card statements, car insurance records, and other forms of false identification documents.
Using the online moniker “Dread Pirate Roberts,” or “DPR,” ULBRICHT controlled and oversaw every aspect of Silk Road, and managed a staff of paid, online administrators and computer programmers who assisted with the day-to-day operation of the site. Through his ownership and operation of Silk Road, ULBRICHT reaped commissions worth more than $13 million generated from the illicit sales conducted through the site. ULBRICHT also demonstrated a willingness to use violence to protect his criminal enterprise and the anonymity of its users, soliciting six murders-for-hire in connection with operating the site, although there is no evidence that these murders were actually carried out.
* * *
ULBRICHT, 31, of San Francisco, California, was convicted of seven offenses after a four-week jury trial: distributing narcotics, distributing narcotics by means of the Internet, conspiring to distribute narcotics, engaging in a continuing criminal enterprise, conspiring to commit computer hacking, conspiring to traffic in false identity documents, and conspiring to commit money laundering.
In addition to the life sentence prison term, ULBRICHT was ordered to forfeit $183,961,921.
In imposing today’s sentence, Judge Forrest said: “There must be no doubt that lawlessness will not be tolerated. There must be no doubt that no one is above the law - no matter one’s education or privileges. All stand equal before the law. There must be no doubt that you cannot run a massive criminal enterprise and because it occurred over the Internet minimize the crime committed on that basis.”
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and its New York Special Operations and Cyber Division, as well as the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the IRS, the New York City Police Department, U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Secret Service, the U.S. Marshals Service, Office of Foreign Assets Control, and NY Department of Taxation. Mr. Bharara also thanked the ICE-HSI Chicago-O’Hare office for its assistance and support, as well as the Department of Justice’s Computer Crime and Intellectual Property Section and Office of International Affairs. Additionally, Mr. Bharara praised the foreign law enforcement partners whose contributions to the success of the investigation and prosecution have been invaluable, namely, the Reykjavik Metropolitan Police of the Republic of Iceland, and the French Republic’s Central Office for the Fight Against Crime Linked to Information Technology and Communication.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Serrin Turner and Timothy T. Howard are in charge of the prosecution, and Assistant United States Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
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Rockford Man Charged in Federal Court with Drug OffenseRead the Press Release
ROCKFORD — A Rockford, Ill. man was charged yesterday in federal court with possessing with the intent to distribute narcotic drugs. ANTHONY ROSS, 34, of Rockford, Ill., was charged with possessing with the intent to distribute cocaine, cocaine base (crack cocaine), and heroin on May 28, 2015. According to the complaint, Ross was taken into custody outside an apartment on 23rd Street in Rockford. When law enforcement officers went into the apartment to execute a search warrant, they found $1,205 in cash, two loaded semi-automatic pistols, and numerous packages of cocaine, cocaine base and heroin. When law enforcement officers went to a second location that day, a residence on Orchard Avenue in Rockford, they found over a kilogram of cocaine and 214 grams of heroin.
ROSS was brought before U.S. Magistrate Judge Iain D. Johnston yesterday for an initial appearance. He was ordered to be held pending a detention hearing and a preliminary hearing on June 2, 2015, at 2:30 p.m.
Possession with the intent to distribute of the charged narcotic drug Controlled Substances carries a maximum potential penalty of up to 20 years in prison, at least 3 years of supervised release following imprisonment, and a fine of up to $1,000,000. 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 a complaint is only a charge 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.
The charge was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; CARL VASILKO, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives; JOSEPH P. BRUSCATO, Winnebago County State’s Attorney; and GARY CARUANA, Winnebago County Sheriff. Officers of the Rockford Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney John G. McKenzie.
Complaint
Rochester Man Indicted on Robbery and Gun ChargesRead 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 a federal grand jury in Rochester has returned an indictment charging Aaron L. Rucker, 38, of Rochester, NY, with attempted Hobbs Act robbery and use of a firearm during a crime of violence. The charges carry a mandatory minimum penalty of seven years in prison and a maximum of life and a $250,000 fine.
Assistant U.S. Attorney Frank H. Sherman, who is handling the case, stated that according to the indictment, on November 4, 2014, the defendant is accused of attempting and conspiring to rob money and controlled substances from an individual engaged in the unlawful distribution and possession of controlled substances, including heroin and marijuana. Rucker is also accused of brandishing a firearm in furtherance of the crime.
Rucker was arraigned this afternoon before U.S. Magistrate Judge Johnathan W. Feldman. He is being held pending a detention hearing on June 4, 2015 at 4:00 p.m.
The indictment is the culmination of an investigation on the part of the Rochester Area Major Crimes Task Force and the Rochester Police Department, under the direction of Chief Michael Ciminelli.
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.
Rapid City Man Sentenced to Life for Drug ConspiracyRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man convicted of Conspiracy to Distribute Methamphetamine, Possession of Firearms During a Drug Trafficking Crime, Felon and Fugitive in Possession of Firearms, Possession of Methamphetamine with the Intent to Distribute, and Distribution of Methamphetamine was sentenced on May 27, 2015, by Chief Judge Jeffrey L. Viken, U.S. District Court. The convictions were the result of an eight-day federal jury trial in Rapid City in December of 2014.
Luis Olivares, age 43, was sentenced to life imprisonment without the possibility of release, and ordered to pay $600 in special assessments to the Federal Crime Victims Fund.
The convictions stem from a conspiracy led by Olivares, involving the recruitment of many other participants, including minors, to illegally distribute approximately 5 to 15 kilograms of methamphetamine in South Dakota and elsewhere. The conspiracy began in 2008 and concluded in late 2010 after Olivares and 15 others were indicted for various drug and firearms offenses.
While involved in this conspiracy, Olivares engaged law enforcement in a high-speed chase, which ended in him crashing his vehicle, which had approximately two pounds of methamphetamine inside. During the pursuit by law enforcement, Olivares threw a pound of methamphetamine out the car window. After the crash, he fled on foot and hid an additional pound of methamphetamine under a rock in a field.
Olivares has two previous drug felony convictions out of Colorado, which contributed to his enhanced sentence. All of the 15 co-defendants pleaded guilty to at least one federal felony offense. The methamphetamine that Olivares led the others in distributing was distributed primarily in Rapid City and on the Pine Ridge Indian Reservation.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, Drug Enforcement Administration, the Unified Narcotics Enforcement Team, the Rapid City Police Department, the Pennington County Sheriff’s Office, and the South Dakota Highway Patrol. Assistant U.S. Attorneys Kathryn N. Rich and Jay Miller prosecuted the case.
Olivares was immediately returned to the custody of the U.S. Marshals Service.
Pharr Woman Pleads Guilty in Liquid Silicone Injection CaseRead the Press Release
McALLEN, Texas – Maribel Quintero, 39, has entered a guilty plea to violating the U.S. Food, Drug and Cosmetics Act, announced U.S. Attorney Kenneth Magidson.
Quintero, of Pharr, admitted administering injections of liquid silicone into individuals who wanted to enhance the structure of their buttocks. These injections were not approved by the Food and Drug Administration (FDA). Quintero also falsely represented to customers to whom she administered the liquid silicone that they were safe when, in fact, they were not.
On Sept. 9, 2014, she possessed an adulterated device - liquid silicone - and was about to use it on a male customer. She admitted that she intended to mislead him by not disclosing that she had knowledge of previous complications due to the use of the liquid silicone.
U.S. District Judge Randy Crane accepted the plea and has set sentencing for Aug. 10, 2015. At that time, she faces up to three years in prison and a possible $250,000 fine.
The investigation into this case began in August 2014 after law enforcement received information that Quintero was involved with providing liquid silicone to women to effect the structure and function of their bodies.
The charges are the result of an investigation by the FDA - Office of Criminal Investigations, FDA - Forensic Chemistry Center, Hidalgo County Sheriff's Office and the FBI. Assistant U.S. Attorneys Kimberly Ann Leo and Alex Benavides are prosecuting the case.
New York State Residents Sentenced for Roles in Mail and Wire Fraud Conspiracy Relating to Life InsuranceRead the Press Release
CONCORD – Two New York City men, who previously pled guilty to conspiracy to commit mail and wire fraud in connection with a scheme to fraudulently obtain high value life insurance policies for the purpose of selling those policies to third party investors, have been sentenced to 18 months in federal prison. The scheme, which related to Stranger Originated Life Insurance (“STOLI”) policies, allowed the defendants to earn substantial commissions from the insurance companies issuing the policies based on the false information provided by the defendants.
According to documents filed in the United States District Court and other documents in the public record, Robert Wertheim and Abraham Kirschenbaum, both of New York, admitted that they conspired with others to identify elderly individuals interested in purchasing high value life insurance policies at no cost. Wertheim and Kirschenbaum conspired with others to provide false information on multi-million dollar life insurance policies to induce insurance companies to issue the policies, including but not limited to materially false information as to the assets held by and net worth of the insureds, whether or not the insureds intended to finance the cost of the substantial premiums associated with such policies, and whether the insureds intended to assign the beneficial interest in the policy to third parties. Some of the policies issued based upon the false representations were issued by a New Hampshire insurance company, Lincoln National Life Insurance Company.
Kirschenbaum and Wertheim, who faced a maximum prison sentence of 5 years in federal prison, were both sentenced to 18 months based on their substantial assistance to the government in its ongoing investigation of others. Additionally, Kirschenbaum was ordered to forfeit $1,000,000.
“Fraudulent life insurance procurement schemes pervert the market for life insurance policies,” said Acting United States Attorney Donald Feith. “By conspiring with others to infect the life insurance market with these fraudulently obtained policies, the defendant skewed the normal operation of life insurance and put insurers at substantial risk from the losses that could be incurred relating to such policies. Our office’s investigation of this practice is ongoing.”
The United States Secret Service, the United States Postal Inspection Service and the Federal Bureau of Investigation led the investigation of this case.
New Jersey Developer to Pay Civil Penalty for Stormwater Violations and Preserve WetlandsRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) today announced that it have reached an agreement with Garden Homes and its affiliated companies to settle their alleged failure to control stormwater discharges. These failures potentially resulted in pollutant discharges to the Passaic, Hackensack, Rahway, Raritan, Saddle and Delaware River watersheds. The agreement requires Garden Homes to pay a $225,000 penalty and implement measures to improve the company’s stormwater practices. In addition, the company has agreed to provide 108 acres of land for preservation within the Highlands Preservation Area in Morris County, New Jersey, protecting it from possible future development. This land contains approximately 23 acres of wetlands adjacent to the Berkshire Valley Wildlife Management Area and in the Highlands Preservation Area—a critical drinking water protection area for the state of New Jersey.
“Today’s settlement will help protect New Jersey waterways from the harmful pollutants contained in stormwater runoff from Garden Homes’ construction sites and also preserve valuable wetlands and wildlife habitat,” said Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division. “One of the important parts of the settlement is the requirement that Garden Homes develop a corporate-wide stormwater management program which may stimulate better management practices throughout the construction business.”
“Stormwater often carries pollution and sediment into local waterways that can damage water quality,” said Regional Administrator Judith A. Enck for EPA. “Large quantities of stormwater can run off of construction sites and it is critically important that stormwater be controlled. The EPA takes these violations seriously and this legal settlement not only holds the company accountable, but also includes measures to preserve 108 acres of land that contains vital wetlands near a wildlife area.”
Under the federal Clean Water Act, developers and contractors responsible for operations at construction sites one acre or larger are required to implement stormwater pollution prevention plans to keep soil and contaminants from running off into nearby waterways. These plans can include measures such as the establishment of sediment barriers, the implementation of controls to hinder stormwater flowing onto the construction site and the protection of slopes. Water carries soil and contaminants off of construction sites at a rate typically 10 to 20 times greater than that from agricultural lands and 1,000 to 2,000 times greater than that from forested lands.
Under the settlement, Garden Homes will undertake a corporate-wide evaluation of its existing stormwater practices and develop a corporate-wide stormwater management program. In addition, Garden Homes will designate one of its employees as its company stormwater manager, who will be responsible for preparing all stormwater pollution prevention plans, developing and overseeing stormwater compliance training and conducting unannounced site inspections, among other responsibilities. The company will also designate individual site stormwater managers for its various sites. EPA estimates the value of these measures to be $539,000 for the first year and approximately $380,057 annually thereafter.
The complaint alleged that Garden Homes violated numerous stormwater requirements at ten of the company’s sites in New Jersey by failing to conduct and document weekly inspections; failing to install perimeter silt fencing along the perimeter of construction sites; failing to maintain a spill kit on-site; and allowing fuel to spill on the ground uphill from an unprotected catch basin, among other allegations. The violations at issue in this case were found at multiple construction sites owned and/or operated by Garden Homes through their affiliates. These repetitive violations continued to persist despite two administrative penalty actions taken by Region 2 against affiliates of Garden Homes.
Under the terms of the proposed settlement, Garden Homes will donate land within the Highlands Preservation Area as a supplemental environmental project. This donation of land will further aid in the recovery of threatened and endangered species, particularly the Indiana Bat and bog turtle, which have a known presence in the vicinity.
The proposed consent decree has been lodged in the U.S. District Court for the state of New Jersey and is subject to a 30-day public comment period and final court approval. A copy is available on the Department of Justice website at: http://justice.gov/enrd/Consent_Decrees.html
For more information about requirements of the Clean Water Act and how EPA protects the nation’s water, visit http://water.epa.gov/
Follow EPA Region 2 on Twitter at http://twitter.com/eparegion2 and Facebook at http://facebook.com/eparegion2
Mulga Mother and Sons Indicted on Prescription Pill Distribution ChargesRead the Press Release
BIRMINGHAM -- A federal grand jury on Thursday indicted a Mulga woman and her two sons in connection with the illegal distribution of prescription painkillers, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.
A three-count indictment filed in U.S. District Court charges SUSAN ROBERTSON HICKS, 49, JONATHAN CODY HICKS, 26, and DUSTIN WADE COX, 33, with conspiring to possess, with the intent to distribute, oxycodone between January and May in Jefferson County. The indictment also charges Susan Hicks and son, Jonathan Hicks, with possessing and distributing the opioid painkiller on March 30, and charges the mother and son, Dustin Cox, with possessing and distributing oxycodone on April 27.
The three defendants were arrested on a federal complaint May 1. According to the sworn affidavit supporting the complaint, DEA agents, using a confidential source, bought 20 oxycodone tablets from Susan and Cody Hicks at their Birmingport Road home on March 30. On April 27, the same confidential source, under DEA surveillance, went to Hicks' home and bought 20 oxycodone pills from Dustin Cox, five of which Cox took from a prescription pill bottle bearing Susan Hicks' name, according to the affidavit.
The maximum penalty for the distribution charges is 20 years in prison and a $5 million fine.
The DEA investigated the case, which Assistant U.S. Attorney Austin D. Shutt is prosecuting.
Federal complaints and indictments contain charges. Defendants are presumed innocent unless and until proven guilty.
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Moorpark Man Who Pleaded Guilty to Producing Child Pornography in ‘Sextortion’ Case Sentenced to 15 Years in Federal PrisonRead the Press Release
LOS ANGELES – A Moorpark man who used social networking websites to trick, extort or threaten more than a dozen girls and boys into sending him naked photos and videos was sentenced today to 15 years in federal prison for producing child pornography.
Jeremy Brendan Sears, 24, was sentenced this morning by United States District Judge John F. Walter.
Once Sears finishes his prison term, Judge Walter ordered that he will be on supervised released for the rest of his life.
Sears pleaded guilty in January to one count of production of child pornography in a binding plea agreement that called for a sentence of at least 15 years.
According to court documents, Sears set up fake profiles on Facebook, Meetme, and other social networking websites that appeared to be from teenage boys and girls. Sears allegedly used the bogus profiles to communicate with real-life teenagers, sometimes beginning online romantic relationships with the real-life teens and then encouraging them to send him sexually explicit videos and photos of themselves. Sears “used false online identities to persuade teenage victims to send defendant sexually explicit photos or to engage in sexually explicit video webchats that defendant recorded,” prosecutors wrote in a sentencing memorandum filed with the court.
In some cases, Sears threatened to harm the real-life teens or their loved-ones unless they sent him naked images. In some cases, after receiving the images of the underage victims, Sears would distribute those images, along with the victims’ names and personal information, to other members of his online social networking groups or to publicly accessible websites.
“Other times, [Sears] would make physical threats against his minor victims, threatening that the victims would be raped, tortured, or killed if they did not give defendant a thing of value — namely, nude and sexually explicit images of themselves,” Sears admitted in his plea agreement.
Sears approached some of his victims after finding them active in social-networking groups for fans of music acts popular with young teenagers, such as Justin Bieber or One Direction. Sears harassed victims by making online accusations about their sexual activity, insulting them, or repeatedly insulting people the victims liked, according to the plea agreement filed in this case. “Defendant would then offer to stop the harassment if his victims would send him sexually explicit images or would transmit to him live depictions of themselves engaging in sexually explicit conduct.”
The investigation was conducted by the Federal Bureau of Investigation and the Ventura County Sheriff’s Office.
Release No. 15-054
Mississippi sheriff’s office employee indicted for using stolen identities to file fraudulent tax returns sent to Louisiana post office boxes in Tallulah, La.Read the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a federal grand jury indicted a Mississippi woman for being part of a scheme to file fraudulent income tax returns using stolen identities and causing the refunds to be mailed to post office boxes in Louisiana.
Shannon A. Brumfield, 48, of Byram, Miss., was indicted on one count of conspiracy to commit mail fraud, 11 counts of mail fraud and 10 counts of aggravated identity theft. According to the indictment, Brumfield used her position as a lieutenant at Hinds County Detention Center to access the Hinds County Jail Management System and steal names and Social Security numbers of inmates and other individuals. Brumfield and other members of the conspiracy not named in the indictment used the stolen identities to file fictitious IRS tax returns from May 2011 until December 2012. Based on the fraudulent returns, the IRS issued tax refunds and mailed them to U.S. Post Office boxes in Tallulah, La.
Brumfield faces up to 20 years in prison and a $250,000 fine for the conspiracy count and each mail fraud count. She faces a mandatory term of imprisonment of two years for the aggravated identity theft counts, which must run consecutive to any other term of imprisonment. She also faces up to three years of supervised release and possible forfeiture of property derived from the proceeds of the offenses.
Indictment_US_v._Brumfield.pdf (266.71 KB)
The IRS – Criminal Investigation Division conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Miami Dade College Student Sentenced for Her Involvement in a Stolen Identity Tax Refund Fraud Scheme Involving Her Student Financial Services AccountRead the Press Release
A Miami Dade College student was sentenced to 21 months in prison, followed by three years of supervised release, and was ordered to pay restitution of $63,000, for her involvement in a stolen identity tax refund fraud scheme involving her student financial services account.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, FBI, Miami Field Office, made the announcement.
A federal jury previously convicted Laquisha Q. Johnson, 24, of Opa Locka, Florida, for her involvement in a stolen identity tax refund fraud scheme that utilized her student Higher One financial services account. Johnson was convicted of three counts of receiving stolen government property.
As shown at trial, Johnson was a student at Miami Dade College. During her time as a student, Johnson opened a bank account serviced by Higher One, Inc., which provides financial services to colleges and universities throughout the United States, including Miami Dade College in Florida. After opening this account, tax refunds issued to three different victim-taxpayers were direct deposited into Johnson’s account. This included a tax refund of $61,000 that had been issued to a victim-taxpayer with the initials E.R.L. An aggregate amount of tax refunds in the amount of $63,000 was deposited into Johnson’s account.
Mr. Ferrer commended the investigative efforts of IRS-CI and the FBI. The case is being prosecuted by Assistant U.S. Attorneys John Byrne and John Gonsoulin.
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.
Mexican Man Guilty of Illegally Reentering the United States After Previous DeportationsRead the Press Release
CONCORD, NEW HAMPSHIRE – Carlos Gomez-Lopez, of Mexico, pled guilty to a one-count indictment alleging that he illegally reentered the United States after having been previously deported, announced Acting United States Attorney Donald Feith. He was sentenced immediately and will be deported.
The Nashua Police Department arrested Gomez-Lopez in January 2015 for operating without a license. At the time of his arrest, Gomez-Lopez identified himself as Esau Gomez-Lopez. The Nashua Police submitted Gomez-Lopez’s fingerprints for analysis and the fingerprint matched Department of Homeland Security records for Carlos Gomez-Lopez. The records maintained by DHS established that Gomez-Lopez had been deported from the United States to Mexico on five previous occasions – June 2004, September 2004, November 2012, and twice in December 2012.
Gomez-Lopez was arrested in Nashua by DHS agents on March 11, 2015. He was indicted in by a grand jury for the District of New Hampshire on March 25, 2015. Gomez-Lopez pled guilty to knowingly reentering the United States after having previously having been deported to his native Mexico and was sentenced to time served since his arrest on March 30, 2015. He is in the custody of immigration officials and will be deported.
The case was investigated by the Nashua Police Department and agents from the Department of Homeland Security. The case was prosecuted by Assistant U.S. Attorney Alfred Rubega.
Mescalero Apache Man Sentenced for Federal Assault ConvictionRead the Press Release
ALBUQUERQUE – Clay Samson Geronimo, 27, a member of the Mescalero Apache Nation who resides in Mescalero, N.M., was sentenced this morning 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. Geronimo was also ordered to pay $1,216.00 in restitution to cover medical expenses for the victim of his crime.
Geronimo was arrested on Feb. 21, 2014, on a criminal complaint alleging that he assaulted a Mescalero Apache woman on Jan. 12, 2014, on the Mescalero Apache Reservation in Otero County, N.M., and caused her to suffer serious bodily injuries. Geronimo was indicted on May 14, 2014, and charged with assault resulting in serious bodily injury.
Court filings reflect that on Jan. 12, 2014, Geronimo assaulted the victim by striking her in the face with his fists. As a result of the assault, the victim sustained a fractured eye socket and fractured nasal bones, which required surgical treatment. Geronimo was arrested on tribal charges on Jan. 12, 2014, and entered a no contest plea in Mescalero Tribal Court.
Geronimo pled guilty to the indictment on Oct. 10, 2014, 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.
Medford Woman Indicted for Disclosing Social Security NumbersRead the Press Release
BOSTON – A Medford woman was arrested today for unlawfully disclosing Social Security numbers.
Lynrolte Cezaire, 27, was indicted on unlawful disclosure of Social Security numbers between July 2011 and April 2014.
The statute provides for a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; John Gibbons, U.S. Marshal of the U.S. Marshals Service, District of Massachusetts; and Medford Police Chief Leo Sacco, made the announcement today. The case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns, or information regarding this case should email [email protected].
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Man Sentenced to 21 Months in Federal Prison for Sending Obscene Material to A Lubbock Police Officer Posing Online as A 13 Year-Old Female in an Undercover OperationRead the Press Release
LUBBOCK, Texas — A 53-year-old League City, Texas, man, Nilanjan Brahma, was sentenced today by U.S. District Judge Sam R. Cummings to 21 months in federal prison, following his guilty plea in October 2014 to one count of attempted transfer of obscene materials to a minor, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Brahma must surrender to the Bureau of Prisons on July 6, 2015.
According to plea documents filed in the case, from approximately April 25, 2011, through February 19, 2012, Brahma engaged in a series of communications, via messaging, texting, and telephone, with a person he believed to be a 13-year-old female, “Jane Doe,” who represented that she lived in Lubbock, Texas. In fact, Jane Doe was an undercover officer with the Lubbock Police Department.
On April 25, 2011, Brahma chatted with Jane Doe and sent her nine photographs. Five of those photographs depict an adult male engaged in sexually explicit conduct and are considered obscene.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Lubbock Police Department, the FBI, and the League City Police Department investigated the case. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Man Arrested for Illegally Exporting Assault Rifle and Pistol PartsRead the Press Release
BOSTON – A Massachusetts man was arrested this morning on charges that he illegally shipped hundreds of firearm parts to 22 different countries, including Finland where parts allegedly ended up in the hands of the Cannonballs Outlaw Motorcycle Gang.
David L. Maricola, 59, of Southbridge, Mass., was arrested on a 32-count federal indictment on charges of conspiracy, illegally exporting defense articles, making false statements on customs forms and money laundering. He is scheduled to appear in U.S. District Court in Boston at 12:00p.m. today before Chief Magistrate Judge Jennifer C. Boal.
The indictment, which was unsealed today, alleges that between December 2010 and March 2012, Maricola exported and attempted to export hundreds of assault rifle and firearm components, including parts for M16, M4, and AR-15 assault rifles and UZI submachine guns. Additionally, it is alleged that between November 2010 and March 2012, Maricola conspired with Arto Laatikainen, a Finnish citizen, to illegally export firearm parts from the U.S. to Finland and that Maricola shipped Laatikainen more than $100,000 worth of firearm components. Laatikainen procured firearms and firearm components and sold them to criminal organizations in Finland, including the Cannonballs Outlaw Motorcycle Gang.Laatikainen, 31,is also charged in the Indictment.
According to the indictment, Maricola obtained many of the parts he illegally exported from gunbroker.com, an auction-type website, instructed his foreign buyers to send him money using PayPal and told them, “DO NOT MENTION GUN PARTS.” Maricola exported hundreds of firearm parts overseas using the U.S. Postal Service. In order to ship his packages, Maricola lied on customs documents about the contents and value of the articles he was sending overseas. For instance, he repeatedly falsely described parts for AR-15 assault rifles as aluminum sculptures.
The statuatory penalty for each illegal export and monely laundering count is up to 20 years in prison and up to five years in prison on the conspiracy and false statement counts. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by Homeland Security Investigations in Boston; Defense Criminal Investigative Service; and Department of Commerce, Office of Export Enforcement. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and U.S. Postal Service, Office of Inspector General, provided substantial assistance during the investigation. The case is being prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann of Ortiz’s Anti-Terrorism and National Security Unit.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.