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27 May 2015
Utah Man Sentenced to Prison for Filing $1.5 Million in False Claims for Tax Refunds and Presenting Fictitious Financial Instruments to the U.S. GovernmentRead the Press Release
SALT LAKE CITY – A Sandy, Utah, resident was sentenced Tuesday in U.S. District Court in Salt Lake City, Utah, to serve two years in prison for tax evasion, filing false claims for federal income tax refunds, and filing fictitious financial obligations with the U.S. government, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Paul Ben Zaccardi was also ordered to pay restitution to the Internal Revenue Service (IRS) and to serve a four-year term of supervised release upon his release from prison.
“Pursuing and prosecuting individuals who refuse to comply with our nation’s tax laws and take affirmative steps to evade their obligations remains a top priority of the Tax Division,” said Acting Assistant Attorney General Ciraolo. “Tuesday’s sentence reflects what awaits those who engage in such criminal conduct.”
“Yesterday’s sentencing of Paul Zaccardi again emphasizes the Internal Revenue Service and DOJ Tax Division’s aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation’s tax system,” said Special Agent in Charge John Collins of the IRS Criminal Investigation’s Las Vegas Field Office. “Honest taxpayers have been reassured today that no one is above the law–especially when the integrity of the tax administration is at stake.”
On Oct. 29, 2014, Zaccardi pleaded guilty to the offenses charged in the superseding indictment, including one count of tax evasion, five counts of filing false claims for income tax refunds and three counts of filing fictitious obligations. According to the superseding indictment and court documents, in April 2004, Zaccardi embarked on a scheme to evade the payment of his federal income taxes. As part of that scheme and to avoid federal tax levies, Zaccardi transferred title to his residence to a nominee entity that he formed called Saved by Grace Christian Fellowship and caused his business receipts to be deposited into his wife’s bank account.
Zaccardi also presented five separate false tax returns to the IRS falsely claiming tax refunds totaling more than $1.5 million. In addition, from June 2008 to October 2011, Zaccardi presented three separate fictitious financial instruments to the IRS, U.S. Department of the Treasury and the U.S. District Court of the District of Utah for a combined total of $605 million, to purportedly pay his federal income tax liabilities.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS Criminal Investigation, who investigated the case, and Trial Attorneys Stuart Wexler and Ryan Raybould of the Tax Division, who prosecuted the case. She also thanked the U.S. Attorney’s Office of the District of Utah for their substantial assistance.
Additional information about the Tax Division’s national Tax Defier Initiative and its enforcements efforts in this area may be found on the division’s website. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site at http://www.ustreas.gov/irs/ci/.
United States Attorney Office hosts cyber-security presentationRead the Press Release
INDIANAPOLIS - United States Attorney Josh J. Minkler announced that members of the U. S. Attorney’s staff will make a presentation to the parents of students attending IPS School 46, Daniel Webster, 1450 S. Reisner Street at 5:00 PM today on cyber security.
Assistant United States Attorneys Tiffany McCormick and Nicholas Linder will address the dangers and pitfalls of using such social media as computers, laptops, tablets and smart phones including cyberbullying, sexting and child pornography.
“Our world of technology is evolving much faster than we as parents can keep up,” said Minkler. “We must stay intimately involved in our children’s lives both on-line and off-line to keep them safe. Technology has opened our children’s lives to a dangerous world that we did not grow up with.”
The media is welcome and encouraged to attend.
Daniel Webster School 46
1540 S. Reisner Street
5:00 pm, Wednesday, May 27, 2015
Two Individuals Charged for Endorsing and Cashing Stolen and Fraudulently Obtained United States Treasury ChecksRead the Press Release
Two individuals were charged for endorsing and cashing stolen and fraudulently obtained United States Treasury checks.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Pete Hoggins, 32, and Hani Sobhi Alshaikh, a/k/a “Danny,” 35, of the Southern District of Florida, were each charged by indictment with conspiracy to commit forgery and theft of public money, in violation of Title 18, United States Code, Section 371, and theft of public money, in violation of Title 18, United States Code, Section 641. Hoggins was also charged with aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. The defendants face a maximum statutory sentence of five years in prison for the conspiracy charge, and ten years in prison for each of the theft of public money charges. Hoggins also faces a mandatory term of two years in prison, consecutive to any other term of imprisonment, for the aggravated identity theft charges.
According to the indictment, Alshaikh worked at a gas station in Pompano Beach, Florida. On multiple occasions from December 2011 to January 2014, Hoggins brought Alshaikh stolen and fraudulently obtained Treasury checks to cash at this gas station. Hoggins and Alshaikh forged the payee’s endorsement on the Treasury checks. Alshaikh then deposited those checks into several different business checking accounts that he opened at various banks in the name of his company, HSA Investment Group.
Hoggins is scheduled to be arraigned on May 29, 2015 at 10:30 a.m. before U.S. Magistrate Judge Alicia O. Valle. Alshaikh is scheduled to be arraigned on June 11, 2015 at 11:00 a.m. before U.S. Magistrate Judge Alicia O. Valle.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Alicia E. Shick.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
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
Tuscaloosa Man Sentenced to 25 Years in Prison for String of Armed RobberiesRead the Press Release
BIRMINGHAM -- A federal judge on Tuesday sentenced a Tuscaloosa man to 25 years in prison for a string of armed robberies in Tuscaloosa in 2012, announced U.S. Attorney Joyce White Vance and Alcohol, Tobacco, Firearms and Explosives Assistant Special Agent in Charge David Hyche.
U.S. District Judge L. Scott Coogler sentenced DeMARDUS TARVER, 21, to just over four years in prison on the robbery charges, to be followed by nearly 21 years in prison on weapons charges associated with the robberies. Tarver pleaded guilty to four robberies under the federal Hobbs Act, which involves robbery affecting interstate commerce, and to using or brandishing a firearm during two of those robberies.
According to court records, Tarver robbed the following Tuscaloosa stores: Family Variety, 911 East Crescent Ridge Road, on Oct. 21, 2012; Buddy's Food Mart, 14439 Alabama Highway 69, on Oct. 21, 2012; Fast Stop, 2601 Fosters Ferry Road, on Nov. 14, 2012, and Raceway Service Station, 940 Veterans Memorial Parkway, on Nov. 14, 2012. Tarver discharged a gun during the Fast Stop robbery and brandished a gun during the Raceway Service Station robbery.
ATF investigated the case, which Assistant U.S. Attorneys L. James Weil Jr. and Joseph P. Montminy prosecuted.
Troutdale Drug Dealer Sentenced to 96 Months' ImprisonmentRead the Press Release
PORTLAND, Ore. –Ulicis Acevedo-Yanez, 38, of Troutdale, Oregon, was sentenced by U.S. District Court Judge Michael W. Mosman to 96 months in prison following his federal conviction for possession with the intent to distribute methamphetamine. When the defendant is released from prison, he will serve four years of supervised release.
Between September 2012 and April 2013, agents with the Metro Gang Task Force (MGTF) identified the defendant as a methamphetamine and heroin dealer operating within the greater Portland, Oregon metropolitan area. On April 26, 2013, agents arrested the defendant and executed a series of federal search warrants on his residence on S.W. 12th Street, in Troutdale, Oregon, as well as a “drug stash” location he maintained on S.E. Harold Street, in Portland, Oregon. Agents also received consent to search another “drug stash” location the defendant was using on S.E. Hinkley Street, in Happy Valley, Oregon.
In total, the agents seized over one kilogram of methamphetamine, approximately 765 grams of heroin and 10 firearms. During a post-arrest interview the defendant admitted that when he was arrested he was on his way to deliver approximately eight ounces of methamphetamine to a customer. When asked for details of his drug dealing the defendant stated that he usually pays $30,000 for a “brick” (kilogram) of cocaine and most recently purchased one three weeks ago. The defendant said he sold the cocaine for between $33,000 and $35,000 a kilogram. The defendant also said that he is currently paying $7,000 for a pound of methamphetamine and he usually buys five pounds at a time. The defendant also admitted that he pays $27,500 for a kilogram of heroin and then resells it for $950 an ounce. The defendant admitted to dealing methamphetamine, cocaine and heroin for at least a year to supplement his income after he lost his job. The defendant pled guilty to the charge on January 21, 2015.
“Methamphetamine, heroin and cocaine trafficking are scourges within our community,” stated Acting U.S. Attorney Billy Williams. “Our office will continue to work with law enforcement to prosecute high-level drug dealers who profit by selling these poisons within our neighborhoods."
This case resulted from an Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation conducted by the Metro Gang Task Force and the U.S. Attorney’s Office. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking organizations and those primarily responsible for the nation’s illegal drug supply. The case was prosecuted by Assistant U. S. Attorney Scott Kerin.
Topsham Man Pleads Guilty to Mail FraudRead the Press Release
Contact: Donald E. Clark
Assistant United States Attorney
Tel: (207) 780-3257Topsham Man Pleads Guilty to Mail Fraud
Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Brian Lafrance, 36, of Topsham, Maine, pled guilty today in U.S. District Court to mail fraud.
According to court records, between January 2014 and October 29, 2014, the defendant sought to fraudulently obtain $6,383 by claiming that he was owed that amount for electrical work he had performed at a residence located in Portland that was then the subject of federal forfeiture proceedings. In fact, he had never worked on the residence and was not owed any money for work done there. To execute the scheme, the defendant mailed claims to the U.S. Attorney’s Office in Albany, New York and to the U.S. District Courthouse in Syracuse, New York.
Lafrance faces up to 20 years in prison, a $250,000 fine, and three years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.The investigation was conducted by the U.S. Postal Inspection Service.
Three Detroit Residents Plead Guilty to Participating in a Home Mortgage Fraud SchemeRead the Press Release
Three Detroit, Michigan, area residents pleaded guilty today in U.S. District Court for the Eastern District of Michigan to conspiracy to commit bank fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents and statements, from approximately January 2006 to December 2008, Jason Najor, Jeffrey Najor, Joey Murad and others conspired to defraud financial lending institutions by providing fraudulent information on residential mortgage loan applications. The defendants devised a scheme to purchase single-family homes for approximately $5,000 to $40,000 each, and then recruited straw buyers to submit fraudulent loan applications for home mortgages substantially above the original purchase price. The applications falsified the straw buyers’ assets, income and down payment, among other things. The straw buyers were paid fees for their participation, which were sometimes falsely disguised as “landscaping” or “construction” fees. The conspirators made a substantial profit and paid themselves commissions on the sales. Every home purchased and sold as part of the scheme went into foreclosure.
In addition to the seven individuals indicted in the case, three of which pleaded guilty today, two others connected to the scheme have pleaded guilty. One individual is a straw buyer of multiple properties who received substantial fees as part of the scheme. The other individual is a mortgage broker who assisted in the preparation of the false mortgage loan applications. Co-conspirator Wasseem Shamoun also pleaded guilty on Jan. 23 and was sentenced to 15 months in prison and ordered to pay $394,000 in restitution for his role in selling properties to straw buyers.
The three defendants face a maximum statutory penalty of thirty years in prison and a fine of $1 million for conspiracy to commit bank fraud. Sentencing for Joey Murad and Jeffrey Najor is on Sept. 19 and Jason Najor is scheduled to be sentenced on Nov. 17.
Acting Assistant Attorney General Ciraolo commended the special agents of the FBI and IRS Criminal Investigation and the DEA, who investigated the case, and Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office of the Eastern District of Michigan for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Three Admit Roles in December 2014 Armored Car Heist in AmarilloRead the Press Release
AMARILLO, Texas — Three men who were charged with various felony offenses stemming from an alleged heist of money from an armored car on December 22, 2014, in Amarillo, Texas, appeared in federal court yesterday, before U.S. District Judge Mary Lou Robinson, and pleaded guilty to their respective roles, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Trent Michael Cook, 24, Britt Michael Gresham, 24, and Cook’s father, Brian Keith Hodge, 43, each pleaded guilty to one count of conspiracy to interfere with commerce by robbery. Each faces a statutory maximum penalty of 20 years in federal prison and a $250,000 fine. Sentencing is set for August 4, 2015.
According to documents filed in the case, Cook purchased firearms that Cook, Gresham, and Hodge planned to use to rob the vault of Rochester Armored in Amarillo on December 20, 2014. The plan involved Cook using his status as an employee of Rochester Armored to gain access to the company vault that contained millions of dollars in U.S. currency so that the three defendants could commit the armed robbery of Rochester Armored. Cook and Gresham also purchased a van to load and transport bags of U.S. currency taken from Rochester Armored.
Hodge further attempted to obtain a location in Colorado for the defendants to hide after the robbery; in fact, Cook and Gresham were arrested in Colorado Springs, Colorado. When questioned by a Colorado Springs Police Department detective, Cook admitted that he and Gresham stole the money from the Rochester armored car on December 22, 2014. Cook also admitted to initially agreeing with Gresham and Hodge to rob the Rochester vault, which they planned to do on December 20, 2014. Cook admitted they were all armed with Smith and Wesson, Model M&P, 9 millimeter caliber pistols when they went to Rochester on December 20, 2014 to attempt the robbery. Cook said they were not able to complete the robbery because there were additional employees at Rochester that he did not expect, and he notified Gresham and Hodge who were parked outside. Cook also said the white Ford Van was to be used to load up the money and other items to take to Colorado.
Court documents further state that after the defendants were not able to rob the vault, Cook and Gresham decided to steal money from a Rochester armored car, which they did.
The Amarillo Police Department, the Colorado Springs Police Department, the Potter County District Attorney’s Office and the FBI investigated the case. Assistant U.S. Attorney Tim Hammer is in charge of the prosecution.
Texas Woman Sentenced in Federal Adoption Fraud Case in KansasRead the Press Release
KANSAS CITY, KAN. – A Texas woman was sentenced Tuesday to 60 months in federal prison for pretending to be pregnant and defrauding a Kansas couple who wanted to adopt her unborn twins, U.S. Attorney Barry Grissom said.
Chrystal Marie Rippey, 35, Marshall, Texas, pleaded guilty to two counts of wire fraud. In her plea, she admitted she defrauded a couple in Shawnee, Kan. On Aug. 8, 2011, the couple transferred $22,225 to an escrow account in Temecula, Calif., as part of their plan to adopt children from Rippey. On Aug. 25, 2011, American Adoptions in Overland Park, Kan., sent a birth mother packet to Rippey in Temecula California.
According to court records, both transactions were based on false statements by Rippey that she was pregnant and wanted to put her unborn twins up for adoption. The $22,225 was to pay for Rippey’s living expenses.
Grissom commended the Overland Park Police Department, the U.S. Secret Service and Assistant U.S. Attorney Chris Oakley for their work on the case.
Tallahassee Man Sentenced to 30 Years for Production of Child PornographyRead the Press Release
TALLAHASSEE, FLORIDA – Jonathan Harry Lee Williams of Tallahassee, Florida, was sentenced to 30 years in prison by United States District Judge Mark E. Walker for using a minor to produce child pornography and for possessing child pornography. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Williams, formerly a registrar at Ruediger Elementary School, was arrested on December 11, 2014, after FBI agents executed a search warrant at his home. During the search, law enforcement officers seized Williams’s smart phones, which contained child pornography. Williams, who pled guilty in February 2015, admitted to taking sexually explicit photos of two children and uploading the images to a “photo hosting” website. Williams also admitted that he had been downloading nude photographs of children from the internet for the past ten years.
The case was investigated by the Federal Bureau of Investigation and 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.
Stearns County Man Pleads Guilty to Sending Threatening CommunicationRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of ROBERT JAMES SCHUELLER, 29, who devised a plot to harm his former paramour’s fiancé. SCHUELLER was charged by Information on May 26, 2015, and pleaded guilty yesterday before U.S. District Judge Richard H. Kyle in United States District Court in St. Paul, Minn.
Assistant U.S. Attorney Julie Allyn said: "The defendant spent months trying to seriously harm an unsuspecting victim simply because that man was romantic competition in the defendant’s thwarted love affair. The Government is thankful that the defendant finally accepted responsibility for his bizarre scheme and pled guilty."
According to the defendant’s guilty plea and documents filed in court, SCHUELLER, then vice- president of Nomad Pipeline (Nomad) and married to then president M.S., had an extra-marital affair with an employee of Nomad’s sister company. Approximately three months after R.T. ended the relationship with SCHUELLER, SCHUELLER learned that R.T. was in a relationship with C.A. Therefore, SCHUELLER began attempting to win back R.T.’s affections. When the defendant was unable to win back R.T., he began pursuing various schemes to get C.A. out of the picture and away from R.T.
According to the defendant’s guilty plea and documents filed in court, on February 6, 2014, SCHUELLER called W.E., another Nomad employee, and asked if W.E. stayed in contact with any of his prison contacts because SCHUELLER had a guy that needed to "go away." Over the course of several months, SCHUELLER and W.E. communicated back and forth concerning the defendant’s desire to find someone willing to harm C.A. Once W.E. provided SCHUELLER a specific name as a possible person who could injure C.A., SCHUELLER sent W.E. a package containing $10,000 in cash and a business card, on which C.A.’s name was written. On May 2, 2014, W.E. informed SCHUELLER that he was unable to find someone to carry out the plot to injure C.A. and then returned the $10,000 to SCHUELLER. After this conversation, SCHUELLER texted W.E. and instructed him to burn the business card.
According to the defendant’s guilty plea and documents filed in court, SCHUELLER admitted to attempting to contact several other Nomad employees seeking their assistance in causing bodily injury to C.A. SCHUELLER further admitted to plotting various seduction schemes in an attempt to break-up C.A. and R.T. For example, in January 2014, SCHUELLER paid his sister- in-law $500 to seduce C.A.; and in May 2014, SCHUELLER posted a Craigslist ad titled "Girls– 1 time $5,000 cash offer" that sought a "pretty girl" to "break up a couple by any means necessary" and offered payment for such services.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and the Stearns County Sheriff’s Office.
This case is being prosecuted by Assistant United States Attorneys Julie E. Allyn and Steven L. Schleicher in the U.S. Attorney’s Office newly formed Special Prosecutions Section.
Defendant Information:
ROBERT JAMES SCHUELLER, 29
Farming Township, Minn.
Convicted:
• Threats Transmitted by Interstate Communication, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Stafford Man Pleads Guilty to Attempted Production of Child PornographyRead the Press Release
RICHMOND, Va. – Justin Fox, 31, of Stafford, pleaded guilty today to Attempted Production of Child Pornography.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by U.S. District Judge John Gibney, Jr.
Fox was indicted by a federal grand jury on March 18, 2015. He faces a maximum penalty of 30 years in prison and a mandatory-minimum term of 15 years in prison when sentenced on August 27, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
In a statement of facts filed with the plea agreement, Fox admitted that he engaged in online messaging with a 13-year-old boy. During those conversations, he portrayed himself as a young female and asked the boy to create and send child pornography via online messenger. After the boy sent pornographic images, Fox continued to ask for more, calling the boy his slave. A search warrant executed at Fox’s residence and a forensic search of Fox’s electronic devices allowed law enforcement to identify two additional victims who Fox attempted to entice to produce child pornography.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Heather L. Hart is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No 3:15-cr-47.
St. Thomas Man Sentenced to 22 Months in Prison for Firearm PossessionRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez on Tuesday sentenced Jace R. Clendinen, 31, of St Thomas, to 22 months in prison and three years supervised release for possession of a firearm with an obliterated serial number, United States Attorney Ronald W. Sharpe announced.
On February 9, 2015, a federal jury convicted Clendinen of possession of a firearm with an obliterated serial number. According to the evidence presented at trial, on September 1, 2014, officers of the Virgin Islands Police Department (VIPD) were in the area of the Smith Bay Ballpark during Labor Day J’Ouvert activities, when they witnessed an ammunition magazine fall from a flatbed truck carrying the band. Officers ordered everyone off the truck to determine who had a firearm. Clendinen jumped from the truck and rapidly walked away from the officers. Officers apprehended Clendinen and found a Fabrique Nationale firearm with an obliterated serial number in his possession.
This case was investigated by the VIPD and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Everard E. Potter.
St. Croix Man Arrested on Child Pornography Charges for Firearm PossessionRead the Press Release
St. Croix, USVI – A federal grand jury on Tuesday returned a four-count indictment against Nicholas Mena, 34, of St. Croix, charging him with two counts of production of child pornography, one count of receipt of child pornography and one count of possession of child pornography, United States Attorney Ronald W. Sharpe announced. Mena was arrested on a criminal complaint on April 10, 2015 and has been detained pending trial. His arraignment is scheduled for June 4, 2015.
If convicted of production of child pornography, Mena faces a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years, plus a $250,000 fine. If convicted of receipt of child pornography, Mena faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years, plus a $250,000 fine. If convicted of possession of child pornography, Mena faces a maximum sentence of 10 years in prison and a $250,000 fine.
United States Attorney Sharpe reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty.
The indictment is the result of investigative work by the Department of Homeland Security Immigration and Customs Enforcement, Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney Rami. S. Badawy.
St. Anthony Man Sentenced to 10 Years in Prison for Defrauding More Than $19 Million from InvestorsRead the Press Release
United States Attorney Andrew M. Luger announced the sentencing of TYRONE HERMAN, 56, to 10 years in federal prison for defrauding investors of more than $19 million. HERMAN, who pleaded guilty on October 20, 2014, to one count of wire fraud, was sentenced on May 26, 2015, by Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minn.
"Investment fraud wreaks havoc on real people whose lives and futures are devastated by unscrupulous criminals like Tyrone Herman," said U.S. Attorney Luger. "Working closely with our colleagues from the Minnesota Department of Commerce and the Federal Bureau of Investigation, we are protecting more people than ever before, making it clear to those who would engage in investment fraud that there are significant penalties for such crimes."
Minnesota Department of Commerce Commissioner Mike Rothman said: "We will continue to fight investment fraud and criminal Ponzi schemes. This case highlights the important role of the Commerce Fraud Bureau in protecting Minnesotans against financial crimes. After a concerned citizen gave a tip to our securities investigators, agents from our Fraud Bureau and the FBI collaborated to investigate and stop this fraud scheme that victimized dozens of individuals, many of them seniors."
According to his guilty plea and documents filed in court, HERMAN, from 1998 through December 2013, operated Executive Marketing Group (EMG) and Ty Herman & Associates, which he claimed had business relationships with manufacturers and wholesalers from whom he could purchase small appliances and other inventory at below-retail market rates. HERMAN told the victims that he could re-sell the inventory in which they invested for a profit of 35 percent, and that victims would receive their money back, with a 30 percent rate of return, within 90 days of the sale of inventory.
According to his guilty plea and documents filed in court, HERMAN created false invoices to demonstrate to victims that had sold the inventory. When they demanded return of their investments, HERMAN provided fake bank statements, purporting to show that, while he had the money in his bank account, the Internal Revenue Service had frozen the account so that he could not access the victims’ money. HERMAN repaid some investors with Ponzi-type payments, not from the sale of inventory.
According to HERMAN’S guilty plea and documents filed in court, he stole more than $19 million from 51 separate victims.
This case is the result of an investigation conducted by the Minnesota Department of Commerce Fraud Bureau and the Federal Bureau of Investigation.
Assistant U.S. Attorney Karen Schommer prosecuted the case.
Defendant Information:
TYRONE R. HERMAN, 56
St. Anthony, Minn.
Charges:
• Wire Fraud, 1 count
Sentenced:
• 120 months in prison
• Three years supervised release
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Springfield Man Sentenced for K2 ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the owner of two stores in Springfield, Mo., and Joplin, Mo., was sentenced in federal court today for his role in a conspiracy that involved the distribution of more than $1.6 million in synthetic cannabinoids, also known as K2.
Donald P. Parrett, 43, of Springfield, was sentenced by U.S. Chief District Judge Greg Kays to five years in federal prison without parole.
Parrett owned Head Kase stores in Springfield and Joplin. Parrett oversaw and managed the wholesale and retail distribution of synthetic cannabinoids from Head Kase. Co-defendants Clyde Hicks, 53, of Aurora, Mo., and Lola Hall, 44, Ozark, Mo., were employees of Head Kase and worked as sales clerks. They were sentenced to probation in separate court appearances today.
Parrett, Hicks and Hall each pleaded guilty to participating in a conspiracy to commit mail fraud. They admitted that they conspired to defraud the Food and Drug Administration and the general public by selling synthetic cannabinoids under false representations that the products were “incense” or “potpourri” and “not for human consumption,” when in fact these substances contained synthetic cannabinoids and were intended for human consumption as a drug.
Parrett attempted to conceal his drug distribution by marketing the synthetic cannabinoids as “incense” that was “not intended for human consumption.” Nevertheless, he obtained private laboratory reports which purported to show that the substances for sale did not contain controlled substances. These steps attempted to create a legal fiction that buyers of the synthetic cannabinoids could obtain a “legal” high, since the substances were not sold for human consumption and were purported not to contain controlled substances.
Between November 2010 and July 2012, Parrett’s business generated at least $1,654,410 from the sale of synthetic cannabinoids. Parrett paid at least $570,439 to at least nine separate distributors for his supply of synthetic cannabinoids.
This case was prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Springfield, Mo., Police Department, the Drug Enforcement Administration, the Jasper County Drug Task Force, the Joplin, Mo., Police Department and IRS-Criminal Investigation.
Smithfield Woman Pleads Guilty to Stealing More Than $274,000 from Her EmployerRead the Press Release
PROVIDENCE, R.I. – Christi Romano, aka Christi Machala, 35, of Smithfield, R.I., pleaded guilty in federal court in Providence today to stealing more than $274,000 from Christa Creations, a toy manufacturer and distributor in Smithfield where she was employed, and that she lied to the FBI during the investigation into the theft, announced United States Attorney Peter F. Neronha and Vincent B. Lisi, Special Agent in Charge of the Boston Field Office of the FBI.
Romano pleaded guilty as charged in a federal indictment returned on October 15, 2014, to seven counts of wire fraud and one count of making false statements.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Romano admitted to the court that between February 16, 2010, and March 26, 2012, she made numerous electronic transfers totaling $274,751.06 from a bank account belonging to Christa Creations to pay her personal credit card debt.Romano also admitted to the court that during the investigation she falsely stated to the FBI that she did not steal or misapply funds belonging to Christa Creations.
Romano is scheduled to be sentenced on August 25, 2015.
Wire fraud is punishable by statutory penalties of up to 30 years in federal prison and a fine of up to $1,000,000. Making false statements is punishable by statutory penalties of up to 5 years in federal prison.
The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose.
The matter was investigated by the FBI, with the assistance of the Internal Revenue Service Criminal Investigation.###
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]Seven Charged with Waterloo Firearm and Ammunition OffensesRead the Press Release
Six men and a woman have been charged with firearm and ammunition offenses. The charges are contained in complaints unsealed late yesterday and this morning in United States District Court in Cedar Rapids.
Shane Paul Sliekers, age 30, from Waterloo, Iowa, has been charged with one count of being a felon in possession of a firearm. The Complaint (Case Number 15-MJ-156-JSS) alleges that, on or about August 7, 2014, Sliekers possessed a .380 caliber handgun at his residence on Center Street in Waterloo. Sliekers allegedly used the handgun to fire at his ex-wife and another person on Mulberry Street in Waterloo earlier that same day. Sliekers allegedly had been convicted of felony Second Degree Burglary in 2002 and felony Willful Injury/Domestic Abuse in 2004.
Sliekers is in state custody. No appearance date has been set.
Dameon Harris, age 23, from Waterloo, Iowa, has been charged with one count of being a felon in possession of a firearm. The Complaint (Case Number 15-MJ-152-JSS) alleges that, on or about April 7, 2015, Harris possessed a loaded .22 caliber handgun at his girlfriend’s apartment in Parkview Boulevard in Waterloo. Harris allegedly matched the description of a person involved in a shooting near the apartment earlier that day. Officers allegedly recovered spent .22 caliber shell casings from the area of the shooting. Harris allegedly had been convicted of felony Aggravated Unlawful Use of a Weapon/Vehicle in 2013.
Harris appears today, May 27, 2015, at 10:45 a.m. in federal court in Cedar Rapids.
Dreyan Rashad Anderson, age 19, from Waterloo, Iowa, has been charged with one count of being an unlawful user of marijuana in possession of a firearm and ammunition. The Complaint (Case Number 15-MJ-154-JSS) alleges that, on or about April 7, 2015, Anderson possessed a loaded .32 caliber revolver in his waistband during a traffic stop on Martin Luther King Drive and Linden Avenue in Waterloo. At the time, Anderson was allegedly an unlawful user of marijuana.
Anderson appears today, May 27, 2015, at 1:30 p.m. in federal court in Cedar Rapids.
Tyrone Parrow, age 25, from Waterloo, Iowa, has been charged with one count of being a domestic abuser in possession of a firearm. The Complaint (Case Number 15-MJ-159-JSS) alleges that, on or about April 7, 2015, at about 1:15 a.m., Parrow possessed a loaded 9 millimeter handgun during a traffic stop in the area of West 9th Street and Linder Drive in Waterloo. A female and a small child were in the vehicle with Parrow at the time of the stop. Parrow allegedly had been convicted of Domestic Abuse Assault / Strangulation and Domestic Abuse Assault Causing Bodily Injury in March 2014.
Parrow is in state custody. No appearance date has been set.
Christine Tiara Williams, age 34, from Cedar Falls, Iowa, and Marcus Robert Sykes, age 29, from Waterloo, Iowa, have each been charged with one count of being unlawful users of marijuana in possession of a firearm. The Complaint (Case Number 15-MJ-157-JSS) alleges that, on or about April 8, 2015, Williams and Sykes possessed a 9 millimeter handgun seized from a vehicle parked at a gas station on La Porte Road in Waterloo. At the time, both Williams and Sykes were allegedly unlawful users of marijuana. Officers’ attention was allegedly brought to the vehicle and block due to an earlier shooting in the 1400 block of Jefferson in Waterloo. Williams allegedly bought the handgun two days before, on April 6, 2015, and gave it to Sykes.
Williams appeared yesterday, May 26, 2015, in federal court in Cedar Rapids and was released on conditions set by the court.
Sykes also appeared yesterday May 26, 2015, in federal court in Cedar Rapids and was detained pending a detention hearing set for May 28, 2015 at 11:00 a.m.
Marshondus Trenedale Brown, age 23, from Waterloo, Iowa, has been charged with one count of being an unlawful user of marijuana in possession of ammunition. The Complaint (Case Number 15-MJ-155-JSS) alleges that, on or about April 17, 2015, Brown possessed .45 caliber ammunition at a convenience store on Broadway Street in Waterloo. At the time, Brown was allegedly an unlawful user of marijuana. Brown had allegedly fired the ammunition from a firearm in connection with a fight that started in the store and then spilled out into the street.
Brown is in state custody. No appearance date has been set.
If convicted, each individual faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, a $100 special assessment, and 3 years of supervised release following any imprisonment.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The cases are being prosecuted by Assistant United States Attorneys Tony Morfitt, C.J. Williams, Dan Chatham, and Tim Vavricek, and Special Assistant United States Attorneys Erin Eldridge and Ravi Narayan in coordination with the Blackhawk County Attorney’s Office. The cases were investigated by the Waterloo Police Department, the Blackhawk County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
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Sacaton Man Sentenced to 57 Months in Prison for Domestic ViolenceRead the Press Release
PHOENIX – On May 26, 2015, Roberto Miguel Nanez, 31, of Sacaton, Ariz., a member of the Gila River Indian Tribe, was sentenced by U.S. District Judge G. Murray Snow to 57 months in prison. Nanez previously pleaded guilty to domestic assault by a habitual offender.
Over the course of 2 days, from Feb. 5-6, 2014, within the Gila River Indian Community, Nanez beat his girlfriend causing bruises over her entire body. Among other things, he choked her with an electrical cord. Prior to this assault, the defendant had been twice convicted of domestic violence.
The investigation in this case was conducted by the Gila River Police Department. The prosecution was handled by Raynette Logan, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-00749-PHX-GMS
RELEASE NUMBER: 2015-041_ Nanez
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Prior Felon from Rio Rancho Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Nicholas Ray Leyba, 35, of Rio Rancho, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to violating the federal firearms laws. The guilty plea was entered without the benefit of a plea agreement.
Leyba was arrested on Feb. 5, 2015, by the Albuquerque Police Department following a SWAT operation involving another crime allegedly committed by Leyba. At the time of his arrest, Leyba had a loaded firearm next to him.
Leyba was transferred into federal custody on Feb. 25, 2015, based on a criminal complaint alleging that he was a felon in possession of a firearm. Leyba subsequently was indicted on Feb. 25, 2015, on that same charge. At the time of his arrest, Leyba was prohibited from possessing firearms or ammunition because he previously had been convicted of the felony offenses of false imprisonment and aggravated assault against a household member with a firearm.
During today’s proceedings, Leyba pled guilty to the indictment and admitted possessing a firearm and ammunition on Feb. 5, 2015.
At sentencing, Leyba faces a maximum statutory penalty of ten years in federal prison. He remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department. Assistant U.S. Attorney Lynn Wei-Yu Wang is prosecuting this case.
Leyba is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Prince George’s County PCP Dealer Sentenced to 13 Years in PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Eric Goodall, age 44, of Temple Hills, Maryland today to 13 years in prison, followed by five years of supervised release, for two counts of possessing with intent to distribute one kilogram or more of phencyclidine (PCP), and illegal possession of ammunition by a convicted felon. Judge Titus also ordered Goodall to forfeit $22,316 seized from his home, a 2013 Porsche Panamera and a 2005 Chevrolet van.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Acting Postal Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service - Washington Division
According to his plea agreement, on October 22, 2013, United States Postal Inspectors intercepted a suspicious Express Mail parcel addressed to a residence in Lanham, Maryland. After obtaining a search warrant for the package, agents found an iced tea jug containing 128 ounces, or approximately 3.6 kilograms, of a PCP mixture. The next day, agents saw Goodall arrive at the residence, park the Chevrolet van he was driving in the driveway and go into the home. Agents then conducted a controlled delivery of the package to Goodall. After Goodall accepted the delivery of the package, law enforcement executed a search warrant at the residence and the Chevrolet van agents saw Goodall driving prior to the delivery. Law enforcement recovered from the van a United States Postal Service receipt for an Express Mail parcel that Postal Inspectors had previously intercepted on August 13, 2013, in California. That package was found to contain $80,000 in cash. Goodall was arrested and provided an address in Temple Hills, Maryland, as his current address.
On October 23, 2013, after the controlled delivery, another parcel addressed to the Lanham residence was intercepted by Postal Inspectors. That package also contained an iced tea jug containing 128 ounces, approximately 3.6 kilograms, of a PCP mixture. On October 25, 2013, members of law enforcement executed a search warrant at Goodall’s Temple Hills residence and recovered $22,316 in cash, a scale, a grain alcohol bottle, and an iced tea jug with PCP residue. In addition, inside the master bedroom, law enforcement found a box of .380 caliber ammunition. Goodall had a previous felony conviction and was prohibited from possessing a firearm or ammunition.
United States Attorney Rod J. Rosenstein praised the FBI and U.S. Postal Inspection Service for their work in the investigation and thanked the Prince George’s County Police Department and Maryland State Police for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Nicolas A. Mitchell, who prosecuted the case.
Ponca City Man Sentenced to 151 Months in Federal Prison for Forcible Sexual AssaultRead the Press Release
Oklahoma City, Oklahoma – Today, Ivan Bennett Willis (22) was sentenced to 151 months in federal prison by Senior United States District Court Judge Robin J. Cauthron announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Upon his release from incarceration, Willis was ordered to serve five years of supervised release and register as a sex offender, said Coats.
In January, Willis was convicted by a jury of forcing his victim to engage in a sexual act on September 22, 2013, at a home located on Ponca Tribal land. This case was investigated by the Federal Bureau of Investigation and Bureau of Indian Affairs; the prosecutor was Assistant U.S. Attorney Rozia McKinney-Foster.
Pennsylvania man sentenced to 12 years in prison for attempting to exploit a Lake Charles child, possessing child pornographyRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Pennsylvania man was sentenced to 151 months in prison for using the internet to attempt to entice a child in Lake Charles, La., to engage in sexual activity and for possessing child pornography.
Timothy Lee Kelly, 41, of Jeannette, Penn., was sentenced by U.S. District Judge Richard T. Haik on one count of using a facility in interstate commerce to attempt to cause a minor to engage in elicit sexual activity and on one count of possession of child pornography. He was also sentenced to a lifetime of supervised release and is required to register as a sex offender.
According to evidence presented at the guilty pleas, Kelly began communicating with a 13-year-old girl in Lake Charles in January of 2013. He discussed sexually explicit conduct, sent explicit images of himself to the girl and requested she send sexually explicit pictures of herself. He also requested that the girl have sex with him and discussed traveling to Louisiana for that purpose. In February of 2013, Kelly was arrested in Pennsylvania for his contact with the minor. While examining the computer and electronic storage devices Kelly owned, agents found child pornography that included adult males sexually assaulting prepubescent children.
“We will aggressively pursue those who sexually abuse minors and possess child pornography,” Finley stated. “Keeping children safe is one of our highest priorities in this District. I hope this serves as a deterrent to anyone seeking to acquire this type of material and a warning that child predators cannot hide.”
This case is part of Project Safe Childhood, a U.S. Department of Justice launched nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. 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.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone app (http://www.ice.gov/predator/smartphone-app). Tips may be submitted anonymously.
Homeland Security Investigations, the Greenburg Pennsylvania Police Department and the Delaware County Internet Crimes Against Children Task Force conducted the investigation. Assistant U.S. Attorneys John Luke Walker and Jamilla A. Bynog prosecuted the case.
Pasadena Man Sentenced to Nine Years in Prison for Conspiracy to Distribute and Receive Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Howard James Clem IV, a/k/a “Jamie,” age 34, of Pasadena, Maryland, today to nine years in prison, followed by lifetime supervised release, for conspiracy to distribute and receive child pornography, and for receipt and possession of child pornography. Clem has been detained since his conviction by a federal jury on January 28, 2015.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Anne Arundel County Police Chief Tim Altomare.
According to the evidence presented at Clem’s six day trial, Clem met Erin Elizabeth Mali in a mobile social networking and dating application in September 2012. Many of the communications exchanged by Mali and Clem, and images Mali sent to Clem focused on graphic sexual conduct involving prepubescent minors. Mali sent Clem images depicting prepubescent minors engaged in sexually explicit conduct, including a prepubescent female whom Mali and Clem identified by name.
According to witness testimony, on June 3, 2013, the social networking and dating application and website captured the images and communications exchanged by Mali and Clem, including child pornography, which caused a “cybertip” to be generated to the National Center for Missing and Exploited Children. An investigation by the Anne Arundel County Police Department resulted in a search warrant being executed at Clem’s and Mali’s residences and on their social networking accounts.
As a result of his conviction, Clem will be required to register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Erin Elizabeth Mali, age 33, of Arnold, Maryland, previously pleaded guilty to conspiracy to distribute and receive child pornography, and to distribution of child pornography and was sentenced to seven years in prison and lifetime supervised release.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Judson T. Mihok and Leo J. Wise, who prosecuted the case.
Parks Pleads Guilty to Wire Fraud, Agrees to Forfeit MillionsRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Stephen K. Parks, 61, of Little Rock, Arkansas, pled guilty on May 27, 2015, to a one-count Federal Information charging him with wire fraud relating to a fraudulent investment scheme involving the sale of refined coal tax credits.
Wednesday’s plea hearing took place in Little Rock before U.S. District Judge J. Leon Holmes. The plea agreement is governed by Federal Rule of Criminal Procedure 11(c)(1)(C), which, if accepted by Judge Holmes, binds the Court to the terms of the plea agreement. In the plea agreement the parties stipulate to a sentence of 27 months imprisonment, plus multiple forfeitures. If at the time of sentencing the Court does not accept the plea agreement and all terms, Parks will have the opportunity to then withdraw his guilty plea.
“Stephen K. Parks’ fraudulent sale of non-existent refined coal tax credits was a flagrant abuse of the tax code,” Thyer stated. “Despite the fact that no federal tax return for Global Coal LLC was filed; no coal was produced, refined, or sold to an unrelated third party; and Global Coal LLC had no facility in place to refine coal, Parks approved the sale of the non-existent federal tax credits. He then used the fraudulently obtained funds to give his wife $40,000 and purchase a house in the Heights, which was intended to be torn down and used as a back yard for his family. The tireless work of the IRS and FBI has resulted in the resolution of this investigation and the recovery of approximately $7.5 million, a house, an office building, two investment accounts, and five vehicles, including a 2008 Bentley.”
“With today’s guilty plea, Parks admitted his role in a scheme to finance his own lifestyle at the expense of the American taxpayer,” stated Assistant Special Agent in Charge David Shepard with the Federal Bureau of Investigation in Little Rock. “We appreciate the hard work of our partners at the U.S. Attorney’s Office and the Internal Revenue Services, and we will continue to work together to pursue those who choose to use their official position for personal gain.”
In addition to serving 27 months in federal prison, if the agreement is accepted, the plea agreement contemplates $845,000 in restitution payable to the IRS, forfeiture of all jewelry purchased with money obtained from the sale of Ecotec Coal and Global Coal tax credits, and consent to the forfeiture of all property seized to date, including approximately $7.5 million, plus other pieces of real and personal property in Case No. 4:13-CV-00054 SWW, with the exception of a home at 2020 N. Spruce Street, Little Rock, AR, and approximately $73,000 seized from that home.
“IRS-Criminal Investigation is committed to unraveling complex fraud schemes,” stated Christopher A. Henry, IRS Special Agent in Charge. “We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means, and the IRS will continue to work to identify and prosecute these types of schemes.”
The refined coal tax credit was added to the tax code by the American Jobs Creation Act of 2004. The credit requires that the refined coal be produced by the taxpayer at a refined coal production facility during the 10-year period beginning on the date the facility was originally placed in service, and sold by the taxpayer to an unrelated person during such 10-year period and such taxable year.
On or about June 1, 2010, Parks formed Global Coal, LLC, and served as its CEO, President and Manager. He was also President of Ecotec Coal, LLC and King Coal, LLC. Global Coal has never refined any coal or sold any refined coal to an unrelated third party, as required by 26 U.S.C. § 45. Global Coal has never had a facility in place to refine coal, as required by 26 U.S.C. § 45. As of March 2015, Global Coal has failed to file any federal income tax returns and has never purported to create refined coal tax credits pursuant to 26 U.S.C. § 45 in any federal tax return. Despite knowledge of these facts, Parks approved and facilitated the sale of nonexistent Global Coal refined coal tax credits through a broker to the investor, representing that the tax credits were valid and available for sale. Parks subsequently used a large portion of the proceeds of that sale for his personal use and the use of his family.
In late 2011, a broker acting on behalf of Parks and Global Coal began communicating with the representative of a potential investor regarding Global Coal and Ecotec Coal refined coal tax credits. Parks represented to the broker that Global Coal tax credits were available for sale and was in communication with the broker throughout the course of the Global Coal tax credit transaction.
On January 9, 2012, the investor agreed to purchase 845,000 Global Coal tax credits and 268,000 Ecotec Coal tax credits for total payment of $723,450. On January 13, 2012, the investor wired $549,250 from a bank in Iowa into King Coal Holding LLC’s account at Delta Trust & Bank in Arkansas. A backdated invoice dated December 30, 2011, reflected the sale of 845,000 Class C Units of interest of Global Coal, LLC, the sole benefit of which is $845,000 of Refined Coal Tax Credits to the investor. The invoice reflected the total due as $549,250 to be wired to a Delta Trust & Bank account with account name “KHC, LLC c/o Global Coal”. The Global Coal, LLC subscription documents reflect that Stephen Parks is the manager and CEO and contain his signature. The documents also acknowledge receipt by Global Coal of $549,250 from the investor. A separate invoice was sent for the Ecotec Coal tax credits, which directed that $174,200 be wired Ecotec Coal’s account at First Security Bank.
From the proceeds of the Global Coal tax credit sale, Parks wrote a $40,000 check to his wife for “Coal Rights Arkansas.” This $40,000 was part of approximately $1.3 million paid to Parks’ wife from 2008-2012 for “advanced royalties.” According to a “Royalty Agreement” backdated to December 1, 2007, Parks’ wife “controls certain mineral rights within the state of Arkansas and King Coal, LLC . . . desires to extract coal from these properties . . .” In fact, Parks’ wife had no interest in any land with coal rights in Arkansas and had no mineral rights to coal during the time she was receiving the “advanced royalties.” In 2014 tax court pleadings, the explanation of Parks’ wife’s receipt of royalties was altered, alleging that Parks’ wife “assisted and facilitated the negotiations” between the parties to a lease agreement regarding coal rights, but witnesses state that Parks’ wife was not involved in the negotiations of the lease agreements.
Also from the proceeds of the Global Coal tax credit sale, a check to Delta Trust & Bank for $301,271.50 was used to purchase a cashier’s check. That cashier’s check was used to purchase 4817 Stonewall Road, Little Rock, Arkansas, a residence located behind the Parks family residence, and was purchased to be torn down and used as a back yard for the Parks family.
The wire fraud charge carries a statutory sentence of not more than 20 years imprisonment, not more than a $250,000 fine, and not more than three years of supervised release. If the plea agreement is accepted, Parks will be sentenced by Judge Holmes at a later date.
The case was investigated by special agents from the Federal Bureau of Investigation and the IRS-Criminal Investigations.
Oneida County Resident Sentenced on Marijuana ChargesRead the Press Release
SYRACUSE, NEW YORK – Hon. Glenn T. Suddaby today sentenced Richard Williams, age 44, of Utica, New York, to thirty (30) months incarceration for his role in a marijuana conspiracy, announced United States Attorney Richard S. Hartunian.
Williams was arrested on June 24, 2014, when he took possession of a U.S. mail parcel containing four pounds of marijuana. Investigation revealed that over a several year period Williams had received numerous such parcels, all shipped from California. These parcels, all of which contained marijuana, were mailed from several different sources of supply in California. Investigation further revealed Williams paid approximately $8,000 to $10,000 for the marijuana in each parcel, which marijuana Williams thereafter sold, in smaller weights, to area customers.
Williams was charged with being a participant in a marijuana conspiracy between 2011 and 2014. On January 22, 2015, Williams pled guilty and admitted to distributing between 100 and 400 kilograms (220 and 880 pounds) of marijuana over the three year period.
After Williams serves his term of imprisonment, he will be placed on supervised release for three years.
The Williams case was investigated by agents and officers of the U.S. Postal Service, the Oneida County Drug Enforcement Task Force, the New York State Police Special Investigations Unit, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, and Firearms. The Williams case was prosecuted by AUSA Carl Eurenius and Oneida County District Attorney’s Office Bureau Chief and Special AUSA Grant Garramone.
North Texas Man Convicted in Foreign Currency Trading SchemeRead the Press Release
SHERMAN, Texas – A 47-year-old former resident of Frisco, Texas, was found guilty of federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Frank Edwin Pate was found guilty by a jury of two counts of wire fraud and one count of mail fraud following a five-day trial before U.S. District Judge Amos Mazzant.
According to information presented in court, Pate perpetrated a fraud scheme on seven individuals who invested money with Pate for the purpose of trading foreign currency on their behalf. The evidence established that seven investors gave Pate a total of over $2.6 million over a several year period for the purpose of currency trading. Instead of using the money for foreign currency trading, Pate spent a large portion of the money for his own personal expenses. Pate was indicted by a federal grand jury on Aug. 13, 2014.
Pate faces up to 20 years in federal prison on each conviction. A sentencing date has not been set.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys J. Andrew Williams and Christopher Eason.
Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and CorruptionRead the Press Release
The Defendants Include Two Current FIFA Vice Presidents and the Current and Former Presidents of the Confederation of North, Central American and Caribbean Association Football (CONCACAF); Seven Defendants Arrested Overseas; Guilty Pleas for Four Individual Defendants and Two Corporate Defendants Also Unsealed
A 47-count indictment was unsealed early this morning in federal court in Brooklyn, New York, charging 14 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The guilty pleas of four individual defendants and two corporate defendants were also unsealed today.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella. Jeffrey Webb and Jack Warner – the current and former presidents of CONCACAF, the continental confederation under FIFA headquartered in the United States – are among the soccer officials charged with racketeering and bribery offenses. The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
The charges were announced by Attorney General Loretta E. Lynch, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Director James B. Comey of the FBI, Assistant Director in Charge Diego W. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI’s Los Angeles Field Office.
Also earlier this morning, Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, the defendants Jeffrey Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel and José Maria Marin, at the request of the United States. Also this morning, a search warrant is being executed at CONCACAF headquarters in Miami, Florida.
The guilty pleas of the four individual and two corporate defendants that were also unsealed today include the guilty pleas of Charles Blazer, the long-serving former general secretary of CONCACAF and former U.S. representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International Inc. and Traffic Sports USA Inc., which is based in Florida.
“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort.”
Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland, as well as several other international partners, for their outstanding assistance in this investigation.
“Today’s announcement should send a message that enough is enough,” said Acting U.S. Attorney Currie. “After decades of what the indictment alleges to be brazen corruption, organized international soccer needs a new start – a new chance for its governing institutions to provide honest oversight and support of a sport that is beloved across the world, increasingly so here in the United States. Let me be clear: this indictment is not the final chapter in our investigation.”
Acting U.S. Attorney Currie extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues abroad, for their tremendous effort in this case.
“As charged in the indictment, the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,” said Director Comey. “Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA. I want to commend the investigators and prosecutors around the world who have pursued this case so diligently, for so many years.”
“When leaders in an organization resort to cheating the very members that they are supposed to represent, they must be held accountable,” said Chief Weber. “Corruption, tax evasion and money laundering are certainly not the cornerstones of any successful business. Whether you call it soccer or football, the fans, players and sponsors around the world who love this game should not have to worry about officials corrupting their sport. This case isn't about soccer, it is about fairness and following the law. IRS-CI will continue to investigate financial crimes and follow the money wherever it may lead around the world, leveling the playing field for those who obey the law.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Enterprise
FIFA is composed of 209 member associations, each representing organized soccer in a particular nation or territory, including the United States and four of its overseas territories. FIFA also recognizes six continental confederations that assist it in governing soccer in different regions of the world. The U.S. Soccer Federation is one of 41 member associations of the confederation known as CONCACAF, which has been headquartered in the United States throughout the period charged in the indictment. The South American confederation, called CONMEBOL, is also a focus of the indictment.
As alleged in the indictment, FIFA and its six continental confederations, together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
As alleged in the indictment, one key way the enterprise derives revenue is to commercialize the media and marketing rights associated with soccer events and tournaments. The organizing entity that owns those rights – as FIFA and CONCACAF do with respect to the World Cup and Gold Cup, their respective flagship tournaments – sells them to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments. The sports marketing companies, in turn, sell the rights downstream to TV and radio broadcast networks, major corporate sponsors and other sub-licensees who want to broadcast the matches or promote their brands. The revenue generated from these contracts is substantial: according to FIFA, 70% of its $5.7 billion in total revenues between 2011 and 2014 was attributable to the sale of TV and marketing rights to the 2014 World Cup.
The Racketeering Conspiracy
The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering. Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF). Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.
The Indicted Defendants
As set forth in the indictment, the defendants and their co-conspirators fall generally into three categories: soccer officials acting in a fiduciary capacity within FIFA and one or more of its constituent organizations; sports media and marketing company executives; and businessmen, bankers and other trusted intermediaries who laundered illicit payments.
Nine of the defendants were FIFA officials by operation of the FIFA statutes, as well as officials of one or more other bodies:
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Jeffrey Webb: Current FIFA vice president and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member and Cayman Islands Football Association (CIFA) president.
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Eduardo Li: Current FIFA executive committee member-elect, CONCACAF executive committee member and Costa Rican soccer federation (FEDEFUT) president.
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Julio Rocha: Current FIFA development officer. Former Central American Football Union (UNCAF) president and Nicaraguan soccer federation (FENIFUT) president.
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Costas Takkas: Current attaché to the CONCACAF president. Former CIFA general secretary.
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Jack Warner: Former FIFA vice president and executive committee member, CONCACAF president, CFU president and Trinidad and Tobago Football Federation (TTFF) special adviser.
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Eugenio Figueredo: Current FIFA vice president and executive committee member. Former CONMEBOL president and Uruguayan soccer federation (AUF) president.
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Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
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José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF president.
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Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president.
Four of the defendants were sports marketing executives:
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Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
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Aaron Davidson: President of Traffic Sports USA Inc. (Traffic USA).
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Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.
And one of the defendants was in the broadcasting business but allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials:
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José Margulies: Controlling principal of Valente Corp. and Somerton Ltd.
The Convicted Individuals and Corporations
The following individuals and corporations previously pleaded guilty under seal:
On July 15, 2013, the defendant Daryll Warner, son of defendant Jack Warner and a former FIFA development officer, waived indictment and pleaded guilty to a two-count information charging him with wire fraud and the structuring of financial transactions.
On Oct. 25, 2013, the defendant Daryan Warner waived indictment and pleaded guilty to a three-count information charging him with wire fraud conspiracy, money laundering conspiracy and the structuring of financial transactions. Daryan Warner forfeited over $1.1 million around the time of his plea and has agreed to pay a second forfeiture money judgment at the time of sentencing.
On Nov. 25, 2013, the defendant Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member, waived indictment and pleaded guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.
On Dec. 12, 2014, the defendant José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pleaded guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.
On May 14, 2015, the defendants Traffic Sports USA Inc. and Traffic Sports International Inc. pleaded guilty to wire fraud conspiracy.
All money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
* * * *
The indictment unsealed today has been assigned to U.S. District Court Judge Raymond J. Dearie of the Eastern District of New York.
The indicted and convicted individual defendants face maximum terms of incarceration of 20 years for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges. In addition, Eugenio Figueredo faces a maximum term of incarceration of 10 years for a charge of naturalization fraud and could have his U.S. citizenship revoked. He also faces a maximum term of incarceration of five years for each tax charge. Charles Blazer faces a maximum term of incarceration of 10 years for the FBAR charge and five years for the tax evasion charges; and Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements. Each individual defendant also faces mandatory restitution, forfeiture and a fine. By the terms of their plea agreements, the corporate defendants face fines of $500,000 and one year of probation.
The government’s investigation is ongoing.
The government’s case is being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, Keith D. Edelman and Brian D. Morris of the Eastern District of New York, with assistance provided by the Justice Department’s Office of International Affairs and Organized Crime and Gang Section.
The Indicted Defendants:
ALEJANDRO BURZACO
Age: 50
Nationality: Argentina
AARON DAVIDSON
Age: 44
Nationality: USA
RAFAEL ESQUIVEL
Age: 68
Nationality: Venezuela
EUGENIO FIGUEREDO
Age: 83
Nationality: USA, Uruguay
HUGO JINKIS
Age: 70
Nationality: Argentina
MARIANO JINKIS
Age: 40
Nationality: Argentina
NICOLÁS LEOZ
Age: 86
Nationality: Paraguay
EDUARDO LI
Age: 56
Nationality: Costa Rica
JOSÉ MARGULIES, also known as José Lazaro
Age: 75
Nationality: Brazil
JOSÉ MARIA MARIN
Age: 83
Nationality: Brazil
JULIO ROCHA
Age: 64
Nationality: Nicaragua
COSTAS TAKKAS
Age: 58
Nationality: United Kingdom
JACK WARNER
Age: 72
Nationality: Trinidad and Tobago
JEFFREY WEBB
Age: 50
Nationality: Cayman Islands
The Convicted Defendants:
CHARLES BLAZER
Age: 70
Nationality: USA
JOSÉ HAWILLA
Age: 71
Nationality: Brazil
DARYAN WARNER
Age: 46
Nationality: Trinidad and Tobago, Grenada
DARYLL WARNER
Age: 40
Nationality: USA, Trinidad and Tobago
TRAFFIC SPORTS INTERNATIONAL INC.
Registered: British Virgin Islands
TRAFFIC SPORTS USA INC.
Registered: USA
E.D.N.Y. Docket Numbers:
United States v. Daryll Warner, 13 Cr. 402 (WFK)
United States v. Daryan Warner, 13 Cr. 584 (WFK)
United States v. Charles Blazer, 13 Cr. 602 (RJD)
United States v. José Hawilla, 14 Cr. 609 (RJD)
United States v. Traffic Sports International, Inc., 14 Cr. 609 (RJD)
United States v. Traffic Sports USA, Inc., 14 Cr. 609 (RJD)
United States v. Jeffrey Webb et al., 15 Cr. 252 (RJD)
Documents:
Webb et al. Indictment (12.25 MB)
Daryan Warner Information (320.77 KB)
Daryll Warner Information (2.26 MB)
Hawilla et al. Information (2.98 MB)
Charles Blazer Information (4.45 MB)
FIFA Graphic (490 KB)
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Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and CorruptionRead the Press Release
BROOKLYN, N.Y. – A 47-count indictment was unsealed early this morning in federal court in Brooklyn charging 14 defendants with racketeering, wire fraud, and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The guilty pleas of four individual defendants and two corporate defendants were also unsealed today.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella. The defendants Jeffrey Webb and Jack Warner – the current and former presidents CONCACAF, the continental confederation under FIFA headquartered in the United States – are among the soccer officials charged with racketeering and bribery offenses. The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
The charges were announced by Attorney General Loretta E. Lynch; Kelly T. Currie, Acting U.S. Attorney for the Eastern District of New York; James B. Comey, Director, Federal Bureau of Investigation (FBI); Diego W. Rodriguez, Assistant Director-in-Charge, FBI, New York Field Office; Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation; and Special Agent in Charge Erick Martinez, IRS Criminal Investigation, Los Angeles Field Office.
Also earlier this morning, Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, the defendants Jeffrey Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel, and José Maria Marin, at the request of the United States.1
The guilty pleas of the four individual and two corporate defendants that were also unsealed today include the guilty pleas of Charles Blazer, the long-serving former general secretary of CONCACAF and former U.S. representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International, Inc. and Traffic Sports USA, Inc., which is based in Florida.
“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort.” Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland, as well as several other international partners, for their outstanding assistance in this investigation.
“Today’s announcement should send a message that enough is enough. After decades of what the indictment alleges to be brazen corruption, organized international soccer needs a new start – a new chance for its governing institutions to provide honest oversight and support of a sport that is beloved across the world, increasingly so here in the United States. Let me be clear: this indictment is not the final chapter in our investigation,” stated Acting United States Attorney Currie. Mr. Currie extended his thanks to the agents, analysts, and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS Criminal Investigation Los Angeles Field Office, as well as their colleagues abroad, for their tremendous effort in this case.
“As charged in the indictment, the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world. Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA. I want to commend the investigators and prosecutors around the world who have pursued this case so diligently, for so many years,” said FBI Director Comey.
“When leaders in an organization resort to cheating the very members that they are supposed to represent, they must be held accountable,” said IRS Criminal Investigation Chief Weber. “Corruption, tax evasion, and money laundering are certainly not the cornerstones of any successful business. Whether you call it soccer or football, the fans, players, and sponsors around the world who love this game should not have to worry about officials corrupting their sport. This case isn’t about soccer, it is about fairness and following the law. IRS CI will continue to investigate financial crimes and follow the money wherever it may lead around the world, leveling the playing field for those who obey the law.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Enterprise
FIFA is composed of 209 member associations, each representing organized soccer in a particular nation or territory, including the United States and four of its overseas territories. FIFA also recognizes six continental confederations that assist it in governing soccer in different regions of the world. The U.S. Soccer Federation is one of 41 member associations of the confederation known as CONCACAF, which has been headquartered in the United States throughout the period charged in the indictment. The South American confederation, called CONMEBOL, is also a focus of the indictment.
As alleged in the indictment, FIFA and its six continental confederations, together with affiliated regional federations, national member associations, and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
As alleged in the indictment, one key way the enterprise derives revenue is to commercialize the media and marketing rights associated with soccer events and tournaments. The organizing entity that owns those rights – as FIFA and CONCACAF do with respect to the World Cup and the Gold Cup, their respective flagship tournaments – sells them to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments. The sports marketing companies, in turn, sell the rights downstream to TV and radio broadcast networks, major corporate sponsors, and other sub-licensees who want to broadcast the matches or promote their brands. The revenue generated from these contracts is substantial: according to FIFA, 70% of its $5.7 billion in total revenues between 2011 and 2014 was attributable to the sale of TV and marketing rights to the 2014 World Cup.
The Racketeering Conspiracy
The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery, and money laundering. Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores, and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF). Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup, and the 2011 FIFA presidential election.
The Indicted Defendants
As set forth in the indictment, the defendants and their co-conspirators fall generally into three categories: soccer officials acting in a fiduciary capacity within FIFA and one or more of its constituent organizations; sports media and marketing company executives; and businessmen, bankers, and other trusted intermediaries who laundered illicit payments.
Nine of the defendants were FIFA officials by operation of the FIFA statutes, as well as officials of one or more other bodies:
Jeffrey Webb: Current FIFA vice president and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member, and Cayman Islands Football Association (CIFA) president.
Eduardo Li: Current FIFA executive committee member-elect, CONCACAF executive committee member, and Costa Rican soccer federation (FEDEFUT) president.
Julio Rocha: Current FIFA development officer. Former Central American Football Union (UNCAF) president and Nicaraguan soccer federation (FENIFUT) president.
Costas Takkas: Current attaché to the CONCACAF president. Former CIFA general secretary.
Jack Warner: Former FIFA vice president and executive committee member, CONCACAF president, CFU president, and Trinidad and Tobago Football Federation (TTFF) special adviser.
Eugenio Figueredo: Current FIFA vice president and executive committee member. Former CONMEBOL president and Uruguayan soccer federation (AUF) president.
Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF president.
Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president.
Four of the defendants were sports marketing executives:
Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
Aaron Davidson: President of Traffic Sports USA, Inc. (Traffic USA).
Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.
And one of the defendants was in the broadcasting business but allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials:
José Margulies: Controlling principal of Valente Corp. and Somerton Ltd.
The Convicted Individuals and Corporations
The following individuals and corporations previously pled guilty under seal:
On July 15, 2013, the defendant Daryll Warner, son of defendant Jack Warner and a former FIFA development officer, waived indictment and pled guilty to a two-count information charging him with wire fraud and the structuring of financial transactions.
On October 25, 2013, the defendant Daryan Warner, son of defendant Jack Warner and a businessman, waived indictment and pled guilty to a three-count information charging him with wire fraud conspiracy, money laundering conspiracy, and the structuring of financial transactions. Daryan Warner forfeited over $1.1 million around the time of his plea and has agreed to pay a second forfeiture money judgment at the time of sentencing.
On November 25, 2013, the defendant Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member, waived indictment and pled guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion, and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.
On December 12, 2014, the defendant José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pled guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.
On May 14, 2015, the defendants Traffic Sports USA, Inc. and Traffic Sports International, Inc. pled guilty to wire fraud conspiracy.
All money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
The indictment unsealed today has been assigned to the Honorable Raymond J. Dearie, United States District Judge for the Eastern District of New York.
The indicted and convicted individual defendants face maximum terms of incarceration of 20 years for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering, and obstruction of justice charges. In addition, the defendant Eugenio Figueredo faces a maximum term of incarceration of 10 years for a charge of naturalization fraud and could have his U.S. citizenship revoked. He also faces a maximum term of incarceration of 5 years for each tax charge. The defendant Charles Blazer faces a maximum term of incarceration of 10 years for the FBAR charge and 5 years for the tax evasion charges; and the defendants Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements. Each individual defendant also faces mandatory restitution, forfeiture, and a fine. By the terms of their plea agreements, the corporate defendants face fines of $500,000 and one year of probation.
The government’s investigation is ongoing.
The government’s case is being prosecuted by Assistant United States Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, Keith D. Edelman, and Brian D. Morris, with assistance provided by the Justice Department’s Office of International Affairs and Organized Crime and Gang Section.
The Indicted Defendants:
ALEJANDRO BURZACO
Age: 50
Nationality: Argentina
AARON DAVIDSON
Age: 44
Nationality: USA
RAFAEL ESQUIVEL
Age: 68
Nationality: Venezuela
EUGENIO FIGUEREDO
Age: 83
Nationality: USA, Uruguay
HUGO JINKIS
Age: 70
Nationality: Argentina
MARIANO JINKIS
Age: 40
Nationality: Argentina
NICOLÁS LEOZ
Age: 86
Nationality: Paraguay
EDUARDO LI
Age: 56
Nationality: Costa Rica
JOSÉ MARGULIES, also known as José Lazaro
Age: 75
Nationality: Brazil
JOSÉ MARIA MARIN
Age: 83
Nationality: Brazil
JULIO ROCHA
Age: 64
Nationality: Nicaragua
COSTAS TAKKAS
Age: 58
Nationality: United Kingdom
JACK WARNER
Age: 72
Nationality: Trinidad and Tobago
JEFFREY WEBB
Age: 50
Nationality: Cayman Islands
The Convicted Defendants:
CHARLES BLAZER
Age: 70
Nationality: USA
JOSÉ HAWILLA
Age: 71
Nationality: Brazil
DARYAN WARNER
Age: 46
Nationality: Trinidad and Tobago, Grenada
DARYLL WARNER
Age: 40
Nationality: USA, Trinidad and Tobago
TRAFFIC SPORTS INTERNATIONAL, INC.
Registered: British Virgin Islands
TRAFFIC SPORTS USA, INC.
Registered: USA
E.D.N.Y. Docket Numbers:
United States v. Daryll Warner, 13 Cr. 402 (WFK)
United States v. Daryan Warner, 13 Cr. 584 (WFK)
United States v. Charles Blazer, 13 Cr. 602 (RJD)
United States v. José Hawilla, 14 Cr. 609 (RJD)
United States v. Traffic Sports International, Inc., 14 Cr. 609 (RJD)
United States v. Traffic Sports USA, Inc., 14 Cr. 609 (RJD)
United States v. Jeffrey Webb et al., 15 Cr. 252 (RJD)
_______________________________________________________________________
1. Also this morning, a search warrant is being executed at CONCACAF headquarters in Miami, Florida.
Attachments
- UNITED STATES V. CHARLES BLAZER
- UNITED STATES V. DARYAN WARNER
- UNITED STATES V. DARYLL WARNER
- UNITED STATES V. JOSE HAWILLA ET AL
- FIFA Press Visuals.05.27.2015
- FIFA Indictment - Certified Copy_Clean_Reduced Size_Redacted (2)
New Orleans Businessman Pleads Guilty to Wire Fraud and Failing to Pay over TaxesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JASON C. DOYLE, age 38, of New Orleans, pled guilty yesterday to wire fraud and failing to pay over taxes.
According to documents filed in federal court, DOYLE operated, controlled, marketed and sold several restaurant franchises to willing investors. From 2010 through 2014, DOYLE defrauded three investors who paid him monies for a restaurant franchise. DOYLE defrauded the investors of monies totaling in excess of $888,000. These investor monies were paid to DOYLE with the understanding that DOYLE would furnish them with either a restaurant or the equipment and essentials necessary to open a restaurant establishment. Instead of using the investor funds to complete the promised restaurant project, DOYLE fraudulently diverted the monies for his own personal use.
In 2010, DOYLE also deducted federal taxes from his employees’ wages. However, he failed to pay over the collected employee taxes to the Department of Treasury, in violation of federal tax law. The taxes due and owing to the Department of Treasury exceed $105,000.
The maximum penalty for wire fraud is twenty years imprisonment and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss to the victim. The maximum penalty for failing to pay over taxes is five years imprisonment and/or a fine of $250,000. U.S. District Judge Sarah S. Vance set ssentencing for August 16, 2015.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigations Division in investigating this matter. Assistant United States Attorneys, Richard R. Pickens, II and Andre J. Lagarde are in charge of the prosecution.
Jason Doyle Factual Basis (3.17 MB)
New Haven Man Sentenced to Prison for Role in Check Fraud RingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BRANDON KEY BENTLEY, 31, of New Haven, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 12 months and one day of imprisonment, followed by five years of supervised release, for his role in a check fraud ring.
According to court documents and statements made in court, between July 2010 and May 2011, BENTLEY, Langston Neal and Benjii Carr obtained stolen checks, recruited “runners” who cashed the checks, and altered the checks to list the runners as the lawful payees. The three individuals drove the runners to several Connecticut bank branches and directed them to enter the banks and cash the checks. The runners were paid a small part of the cash proceeds. Through this scheme, 39 checks totaling $114,102.34 were altered and presented to banks, and 37 of those checks totaling $104,070.94 were cashed by the banks.
On September 9, 2014, BENTLEY pleaded guilty to one count of conspiracy to commit bank fraud.
Neal, of Charlotte, N.C., and Carr, of New Haven, previously pleaded guilty to the same charge and were sentenced to prison terms of 18 months and 30 months, respectively.
Each of the three defendants was ordered to pay full restitution.
This matter was investigated by the U.S. Postal Inspection Service, along with the Connecticut Financial Fraud Task Force and the Branford, Madison, Middlebury, Milford, New Britain, New Haven, New Milford, North Branford, Waterbury, Woodbridge and Southbury Police Departments. U.S. Attorney Daly also acknowledged the cooperation and assistance of the State’s Attorney’s Offices for the Judicial Districts of New Haven, Waterbury, Fairfield and Tolland. The case was prosecuted by Assistant U.S. Attorney Henry K. Kopel.
New Albany, Indiana Man Charged with Interstate Transportation for ProstitutionRead the Press Release
LOUISVILLE, Ky. – Acting United States Attorney John E. Kuhn, Jr. today announced the indictment of a New Albany, Indiana, man on charges of interstate transportation for prostitution.
David McNeary, age 33, was charged by grand jury indictment on May 20, 2015. The indictment was unsealed yesterday during his initial appearance before Magistrate Judge Colin H. Lindsay. Today, during arraignment and detention hearing, Judge Lindsay placed McNeary on home detention with work release. McNeary was arrested Friday, May 22, 2015, in Jeffersonville, Indiana.
According to the indictment, between January 2014 and March 2014, McNeary, knowingly transported four different adult females during at least three different trips from Indiana to Kentucky, with the intent that they engage in prostitution.
If convicted at trial, McNeary could be sentenced to no more than ten years in prison for each count, no less than five years of supervised release and fined $250,000 for each count.
This case is being prosecuted by Assistant United States Attorney Amanda Gregory and is being investigated by the Federal Bureau of Investigation (FBI).
***
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Navajo Man from Tohatchi Pleads Guilty to Federal Aggravated Sexual Abuse ChargesRead the Press Release
ALBUQUERQUE – Donald Norton, 46, an enrolled member of the Navajo Nation who resides in Tohatchi, N.M., pled guilty this afternoon in federal court in Albuquerque, N.M., to a felony information charging him with sexually abusing a minor child. Under the terms of his plea agreement, Norton will be sentenced within the range of 15 to 25 years in prison followed by not less than five years of supervised release. Norton will be required to register as a sex offender after completing his prison sentence.
Norton was arrested on Dec. 2, 2013, on an indictment alleging that he sexually abused the victim in Dec. 2009, and from May 2010 through Aug. 2010, in Indian Country in McKinley County, N.M.
During today’s change of plea hearing, Norton entered a guilty plea to an aggravated sexual abuse charge. In entering his guilty plea, Norton admitted sexually molesting a child in Dec. 2009. Norton committed the crime within the Navajo Indian Reservation.
Norton has been in the custody of the U.S. Marshals Service since his arrest and will remain detained pending his sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and the Navajo Nation Division of Public Safety. The case is being prosecuted by Assistant U.S. Jacob Wishard as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Minnesota Business Executive Sentenced to 5 Years in Prison on Charges of Conspiracy, Tax Evasion, and Failure to File Tax ReturnsRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of MICHAEL ANDREW SCHLEGEL, 56, to 60 months in prison for conspiracy to defraud the United States, tax evasion, and failure to file tax returns. SCHLEGEL, who was convicted on March 13, 2014 following a seven-day trial, was sentenced on May 19, 2015 before Judge Patrick J. Schiltz in United States District Court in Minneapolis, Minn.
According to the evidence presented at trial and documents filed in court, from 2002 to 2009, SCHLEGEL controlled NatureRich, Inc., a multi-level marketing company that sold natural and health-related products. Like similar companies, NatureRich paid commissions to salespeople based on direct sales and on the sales of downstream salespeople. At various times between 2002 and 2009, SCHLEGEL and co-defendant Bradley Mark Collin received wages and commission payments from NatureRich that totaled more than $400,000. SCHLEGEL also caused NatureRich to pay his commissions to a nominee trust called the "Andrew James Living Trust," from which he then paid his family’s expenses. During that time, SCHLEGEL also operated a painting business, receiving more than $400,000 in income from painting contracts.
According to the evidence presented at trial and documents filed in court, in 2004, the defendants, through the use of nominee entities, began engaging the "warehouse" banking services of Olympic Business Systems and Century Business Concepts. Warehouse banking refers to the use of one or more bank accounts in which the funds of multiple clients are deposited and transacted, thereby concealing the true source of the funds and the individual truly responsible for the transactions.
According to the evidence presented at trial and documents filed in court, the defendants also filed misleading federal corporate tax returns in the name of NatureRich in an effort to conceal the true extent of their personal interest in and the income derived from NatureRich. In all, the defendants attempted to conceal at least $3 million in gross income from the IRS, thereby avoiding income taxes on that amount and also avoiding having those funds seized for payment of their previous tax debts.
According to the evidence presented at trial and documents filed in court, from 2002 through 2010, SCHLEGEL, and his co-defendant Bradley Mark Collin, conspired with each other and others to defraud the U.S. by obstructing the Internal Revenue Service ("IRS") in its lawful collection and assessment of individual income taxes. To that end, SCHLEGEL failed to make any payments toward the back taxes, interest and penalties levied against him in 2000, which totaled more than $600,000. SCHLEGEL failed to file federal individual tax returns for tax years 2002-2009, pursuing "tax protestor" ideologies.
On December 23, 2013, Bradley Mark Collin pleaded guilty to one count of conspiracy to defraud the United States. On November 4, 2014, Bradley Mark Collin was sentenced to federal prison for 24 months and 3 years supervised release by Federal District Court Judge Patrick J. Schiltz.
"These sentencings should send a clear message; schemes to evade the payment of taxes are a violation of the Federal Tax laws and the consequences of such schemes can and will result in significant jail time" stated IRS Criminal Investigation Special Agent in Charge Shea Jones of the St. Paul Field Office.
These cases are the result of an investigation by the IRS Criminal Investigation. They were prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and John E. Kokkinen.
Defendant Information:
ANDREW SCHLEGEL, 56
Corcoran, Minn.
Convicted:
• Conspiracy to Defraud the United States, 1 count
• Attempt to Evade or Defeat Tax, 3 counts
• Willful Failure to File Tax Returns, 3 counts
Sentenced:
• 60 months in prison
• 3 years supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Mexican National Pleads Guilty to KidnappingRead the Press Release
McALLEN, Texas ‐ Martin Margarito-Casimiro, 28, of Camargo, Tamaulipas, Mexico, has pleaded guilty to kidnapping, announced U.S. Attorney Kenneth Magidson.
On Jan. 22, 2015, law enforcement responded to a man’s cry for help as he ran down the street with rope still tied around his arms and legs. That victim led law enforcement to the McAllen residence where he had been held. There, law enforcement found another victim with his arms and legs bound. At that time, law enforcement discovered Margarito-Casimiro and others who were attempting to flee.
During the guilty plea today, Margarito-Casimiro admitted he held at least one victim at gunpoint for ransom and directed co-conspirators to tie the victim’s hands and feet. The victim was told he needed to pay in order to be released.
Based on today’s conviction, Margarito-Casimiro could face up to life in prison. He is set for sentencing Aug. 20, 2015, before U.S. District Judge Micaela Alvarez. He will remain in custody pending that hearing.
The investigation leading to the charges was conducted by Homeland Security Investigations and McAllen Police Department. Assistant U.S. Attorney Kristen Rees and Leo J. Leo are prosecuting the case.
Methamphetamine Trafficker Sentenced to 10 Years in PrisonRead the Press Release
SAN JOSE – Alondra Nayali Torres-Sanchez was sentenced today to 10 years in prison, for distribution of methamphetamine, announced United States Attorney Melinda Haag and Drug Enforcement Administration Acting Special Agent in Charge Bruce Balzano.
Torres-Sanchez, 28, a citizen of Mexico living in Canada at the time of the offense, previously pleaded guilty on December 2, 2014, to one count of distribution and possession with the intent to distribute methamphetamine, in violation of 21 U.S.C. § 841(a).
According to government filings, Torres-Sanchez arranged for the distribution of 65.9 grams of 99% pure methamphetamine in San Jose, Calif., on May 31, 2012. Thereafter, again from Canada, she arranged the distribution of 1.929 kilograms of 99% pure methamphetamine in San Jose, Calif., on August 9, 2012. Torres-Sanchez was charged in an information on December 2, 2014, for distribution and possession with the intent to distribute methamphetamine—the charge to which she pleaded guilty.
The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge. Judge Koh also sentenced Torres-Sanchez to a 5 year period of supervised release. The defendant has been in federal custody since October 30, 2013.
Assistant U.S. Attorneys Richard Cheng and Chinhayi Cadet are prosecuting the case. The prosecution is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Members of Phantom Outlaw Motorcycle Club Convicted of Violent Racketeering-Related CrimesRead the Press Release
Today, a federal jury in Detroit convicted two members of the violent Phantom Outlaw Motorcycle Club, one of whom also was a member of the Vice Lords street gang, on separate crimes of conspiracy to commit murder in aid of racketeering, and assault with a dangerous weapon in aid of racketeering and a firearms offense.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Detroit Field Division and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Division made the announcement.
“The dismantling of the Phantom Outlaw Motorcycle Club demonstrates how law enforcement authorities and community members can work hand-in-hand to combat gang violence across the nation,” said Assistant Attorney General Caldwell. “In this case, law enforcement unquestionably saved lives by making a wave of arrests to prevent a planned nationwide campaign of violence against a rival motorcycle gang. The verdict in this case holds violent gang members accountable for the destruction they inflicted and the havoc they intended to wreak.”
“The Detroit One initiative targets criminal gang members like these defendants, who are responsible for gun violence in neighborhoods,” said U.S. Attorney McQuade. “We hope that removing dangerous trigger pullers will give our communities the peaceful quality of life we all deserve.”
“ATF works every day with our partners to take the most violent offenders off our streets and put them behind bars,” said Special Agent in Charge S. Robin Shoemaker. “Without partnership, without standing up against the violence, no public safety issues can be solved. ATF is committed to this fight, and committed to working together to keep our citizen safe and our communities livable.”
“The defendants in this case were active members of violent criminal groups, one of which was based in Detroit and operated across numerous, and sometimes distant, states,” said Special Agent in Charge Abbate. “These convictions reflect our continuing resolve through interstate cooperation between federal, state and local law enforcement authorities to prevent violent crime regardless of how far its reach may extend.”
The jury convicted the defendants of the following offenses:
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Christopher Odum (aka Murder), 29, of Detroit, a member of the Detroit chapters of both the Phantoms and the Vice Lords, was convicted of conspiracy to commit murder in aid of racketeering.
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William Frazier (aka Daytona), 37, of Auburn Hills, the Vice President of the Pontiac, Michigan, chapter of the Phantoms, was convicted of two counts of assault with a dangerous weapon in aid of racketeering, and one count of using and carrying firearms during and in relation to a crime of violence.
The evidence showed that the Phantom Outlaw Motorcycle Club and its members were involved in a range of criminal activity including conspiracy to commit murder, shootings, robberies, extortion and the possession and sale of stolen vehicles and motorcycles. The evidence also showed overlap between the leadership of the Phantoms and membership in the Vice Lords street gang, which assisted the Phantoms in various criminal endeavors, including searching for and violently attacking rivals of the Phantoms.
Specifically, the evidence at trial demonstrated that, on Oct. 27, 2012, at the Columbus, Ohio clubhouse of the Toros Motorcycle Club, a fight took place between the Phantoms and the Zulus Motorcycle Club, a rival gang. During the fight, William Frazier, a Phantom member, shot two men.
The evidence at trial also showed that, on Sept. 8, 2013, Antonio Johnson, who was both the National President of the Phantoms and the “Three-Star General” over the Vice Lords in Michigan, ordered numerous Phantoms, including Christopher Odum, to rob the Satan Sidekicks Motorcycle Club, a rival motorcycle club. During the attempted robbery, a Phantom member, Bryan Sorrell (aka PC) shot a Satan Sidekick member in the face. A few days later, Odum and another Phantom violently assaulted a prospective member of the Satan Sidekicks during another attempted robbery at a gas station.
Additionally, according to the evidence presented at trial, Johnson blamed the Hell Lovers Outlaw Motorcycle Club for a September 2013 murder of a Phantoms member, and ordered retaliatory murders that were to be carried out in three phases. In the first phase, the Phantoms were to murder at least three members of the Hell Lovers in Detroit in order to lure additional Hell Lovers to Michigan for the funeral. In the second phase, the Phantoms were to murder all members of the Hell Lovers who would be at the Hell Lovers’ Detroit clubhouse following the funeral. In the third phase, the Phantoms were to kill Hell Lovers in other cities throughout the country where the Phantoms had chapters. In October 2013, ATF and FBI agents disrupted the mass murder plot. At trial, the government presented evidence that, at the time that investigators disrupted the murder plot, the Phantoms were preparing for the first phase, including stockpiling firearms, conducting research and surveillance of their intended victims, and assigning Phantom members and Vice Lords members to stalk and murder the intended victims. Odum participated in the murder plot.
This was the second of two recent trials in the prosecution of the Phantoms. On March 16, 2015, a jury convicted six leaders and members of the Phantoms, many of whom also were leaders and members of the Vice Lords, for various crimes, including the September – October 2013 murder plot against the Hell Lovers and the September 2013 shooting of the Satan Sidekicks member. Among those six convicted defendants were Johnson and Marvin Nicholson, who was both the National Enforcer of the Phantoms and a member of the Vice Lords. The charges included RICO conspiracy involving murder, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, firearms offenses, and assault on federal officers. In addition, four defendants previously have pleaded guilty to charges, including RICO conspiracy and assault with a dangerous weapon in aid of racketeering, and await sentencing.
The arrests in this case were made as part of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit, and through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and the FBI. By working collaboratively, local, state and federal law enforcement are striving to maximize their ability to identify and arrest the persons and groups initiating the violence in Detroit. These convictions are a tangible and significant result of this joint effort.
The case is being prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Louis Gabel of the Eastern District of Michigan.
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Man Pleads Guilty to Conspiracy to Transmit Stolen MoniesRead the Press Release
In San Antonio this afternoon, 57-year-old Rolando Gonzalez-Trevino from Coahuila, Mexico, pleaded guilty to one count of conspiracy to transmit stolen monies in interstate and foreign commerce announced Acting United States Attorney Richard L. Durbin, Jr.
Appearing before United States Magistrate Judge Henry J. Bemporad, Gonzalez-Trevino admitted he, in concert with others, caused stolen funds in the amount of $1,846,782.10 to be transmitted to the United States through electronic bank transfers. Gonzalez-Trevino admitted that these funds were stolen from the State of Coahuila, Mexico. The United States seized these funds and interest derived therefrom as part of the case. As part of Gonzalez-Trevino’s plea agreement, seized funds in the amount of the transfers and interest will be forfeited to the United States.
The offense to which Gonzalez-Trevino pled guilty carries punishment up to 5 years in federal prison. Sentencing is scheduled for 9:30am on September 3, 2015, before United States District Judge Orlando L. Garcia in San Antonio.
This case is part of an ongoing investigation in the Western District of Texas by the Organized Crime Drug Enforcement Task Forces (OCDETF), and was investigated by the Department of Homeland Security Investigations, the Drug Enforcement Administration and the Internal Revenue Service - Criminal Investigations Division. The principal mission of the OCDETF program is to dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations.
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Man Arrested on Charges of Wire Fraud, Blackmail, Obtaining Money Under False Pretenses and ExtortionRead the Press Release
St. Croix, USVI – Miguel A. Esperanza-Vazquez, 59, was arrested today after a federal grand jury returned a five-count indictment on Tuesday charging him with two counts of wire fraud, one count of blackmail, one count of obtaining money under false pretenses, and one count of extortion, United States Attorney Ronald W. Sharpe announced. After his arrest, Esperanza-Vazquez was arraigned in District Court before U.S. Magistrate Judge George W. Cannon. He was released on an unsecured bond.
The five-count indictment is the result of months of investigative work by the Federal Bureau of Investigation, U.S. Department of Homeland Security Office of the Inspector General, U.S. Immigration and Customs Enforcement Office of Professional Responsibility, and Internal Revenue Service Criminal Investigations. The indictment alleges that Esperanza-Vazquez attempted to extort money from an undocumented immigrant while pretending to be a member of law enforcement.
If convicted of wire fraud, Esperanza-Vazquez faces a maximum sentence of 20 years in prison and a $250,000 fine on each count. If convicted of blackmail, he faces a maximum sentence of one year in prison and a $100,000 fine. If convicted of obtaining money under false pretenses, he faces a maximum sentence of 10 years in prison. If convicted of extortion, he faces a maximum sentence of five years in prison.
United States Attorney Sharpe reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant U.S. Attorney Christian Stringer.
Local Defense Attorney Convicted in Connection to Scheme to Obstruct JusticeRead the Press Release
HOUSTON – Abraham Moses Fisch, 56, a criminal defense attorney in Houston, has been convicted on 18 counts to include conspiracy, obstruction of justice, money laundering, conspiracy to commit money laundering and failure to file tax returns, announced United States Attorney Kenneth Magidson. The jury returned its verdicts late today following a 15-day trial and approximately 14 hours of deliberations.
Lloyd Glen Williams, 67, a former used car financier in Houston, previously entered a plea of guilty to conspiring to obstruct justice and to filing a false tax return.
The evidence at trial showed that Fisch and Williams conspired to defraud defendants who were facing federal criminal charges in Houston. The fraud was perpetrated in at least four different federal criminal cases pending in Houston, including U.S. v. Edilberto Portillo et al. (H-06-182), U.S. v. Hugo Barrera Cavazos et al. (H-06-422), U.S. v. Umawa Oke Imo et al. (H-09-426) and U.S. v. Clifford Ubani and Princewill Njoku et al. (H-09-421 and H-10-416).
The defendants in the four cases as well as their wives and associates testified that Williams and Fisch told them that in return for paying exorbitant fees, Williams would pay off his alleged government contacts in Washington D.C. in order to obtain a “guaranteed” dismissal of the criminal cases. Those individuals were supposedly officials at the Central Intelligence Agency, FBI, Department of Justice and Medicare.
Drug trafficker Edilberto Portillo and his wife, Elida Sanchez, paid $1.1 million to Fisch in order to obtain the dismissal of their charges. Fisch paid $700,000 of the Portillo/Sanchez fee to Williams. Umawa Oke Imo, a defendant in a large health care fraud case, testified that Fisch and Williams quoted him a fee of $3 million in order to obtain a dismissal. In reality, however, no officials were paid, no cases were dismissed, and Fisch and Williams simply split the fees between them.
The evidence showed that the scam undermined the functioning of the federal justice system by misleading defendants about the nature of the cooperation process with the government and interfering with defendants’ cooperation with the government, including failing to pass information from a defendant to the government. It also interfered with plea negotiations with the government by preventing defendants from timely entering guilty pleas because of the mistaken belief their case was going to be dismissed.
The scam also interfered with defendants’ relationships with former and subsequent counsel, including communicating with represented defendants unbeknownst to their legitimate counsel, causing them to fire counsel, not to communicate fully and truthfully with their attorneys and not to assist their attorneys in preparing their defense or in negotiating guilty pleas.
Fisch and Williams also insisted that defendants keep the nature of Williams’ so-called “assistance” secret from the court, the government and other attorneys.
Fisch was convicted of money laundering based on the deposit of the funds earned from the scheme, which totaled at least $1,150,000. The United States is seeking forfeiture of that amount as money derived from the criminal activity.
U.S. District Judge Lee H. Rosenthal has set sentencing for Sept. 29, 2015. At that time, Fisch faces up to five years for the conspiracy, 10 years on each of the four counts of obstruction of justice, 10 years for each of the seven counts of money laundering, 10 years for conspiracy to commit money laundering and one year for each of the five counts of failure to file tax returns in addition to substantial monetary fines. He was permitted to remain on bond pending that hearing.
The investigation that led to this indictment and the arrests and plea was conducted by the FBI and Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorneys Robert S. Johnson and John P. Pearson.
Livingston County Man Arrested for Importing Designer DrugRead 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 Jack Jett, 41, of Hemlock, NY, was arrested and charged by criminal complaint with unlawful possession and importation of Alpha PVP, a schedule I controlled substance. The charge carries a maximum penalty of 20 years and a $1,000,000 fine.
“Some areas around the country are sounding the warning bell about the dangerous effects of Alpha PVP,” said U.S. Attorney Hochul. “In the last year alone, our Office has prosecuted nine defendants on charges involving this dangerous and potentially deadly drug. Seven of those nine defendants now stand convicted.”
Assistant U.S. Attorney Jennifer M. Noto, who is handling the case, stated that according to the complaint, the defendant was arrested following the controlled delivery of a package containing approximately three kilograms of Alpha PVP, a schedule I designer drug. The package was sent to Jett at his residence in Hemlock from China. The complaint states that the defendant admitted to law enforcement officers that he ordered the package from China and he knew that it contained Alpha PVP. The defendant further admitted that he distributed Alpha PVP.Alpha PVP, more commonly known as bath salts, is a schedule I controlled substance that has been reported to be the cause or a contributing cause of death in suicides and polydrug overdoses. Alpha PVP has also been known to cause paranoia and hallucinations.
U.S. Attorney Hochul further stated “Ordering any legal drug online must be done very carefully and under the strict guidelines of a medical professional. The public should also know that if you order illegal drugs, you will be prosecuted to the fullest extent of the law.”
Jett made an initial appearance before U.S. Magistrate Judge Johnathan W. Feldman and was released on bail.
The criminal complaint is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy, the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector in Charge, Boston Division, the New York State Police, under the direction of Major Craig Hanesworth, the Hornell Police Department, under the direction of Chief TJ Murray, the Steuben County Sheriff’s Department, under the direction David V. Cole, and the Ontario County Sheriff’s Department, under the direction of Philip C. Povero.
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.
Lincoln Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that Jason Michael Leatherwood, 41, of Lincoln, was sentenced to 10 years and eight months, (128 months), in federal prison for conspiracy to distribute and possess with intent to distribute 500 grams or more of a mixture or substance containing methamphetamine between about October of 2012 and April of 2014. Following the prison term, Leatherwood will serve five years on supervised release.
Information provided to law enforcement indicated that Leatherwood was responsible for the distribution of at least 1.5 kilograms (approximately three pounds) of methamphetamine. In December of 2013, an undercover officer purchased a small amount of methamphetamine from Leatherwood. In February of 2014, Leatherwood was contacted by law enforcement officers and found to be in possession of methamphetamine residue. At that time, he admitted he had been selling small amounts of methamphetamine for approximately two years. In April of 2014, Leatherwood was contacted again and was found to be in possession of approximately ¼ ounce of methamphetamine.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Law Enforcement Executives Attend Civil Rights Seminar in WorcesterRead the Press Release
BOSTON – The United States Attorney’s Office, Justice Department’s Community Relations Service, Federal Bureau of Investigation and the City of Worcester sponsored a civil rights seminar today for law enforcement executives. District Attorney Joseph Early Jr. and nearly 100 other law enforcement executives from federal, state and local agencies attended the seminar which was hosted by the College of the Holy Cross in Worcester.
United States Attorney Carmen M. Ortiz said, "Effective police practices and training programs are important tools to prevent officer misconduct and to improve the community’s confidence with law enforcement. Today's training was an important opportunity to reeducate executives, learn from the mistakes of others and in some cases reaffirm areas where police departments are doing it right."
During the seminar, staff from the U.S. Attorney’s Office and the Federal Bureau of Investigation’s Public Corruption and Civil Rights Division in Washington, D.C. provided participants with information about how police departments can implement or enhance procedures that may reduce officer misconduct. Participants also learned how the Department of Justice has assisted law enforcement and communities with improving relationships as a result of police pattern or practice investigations. The East Haven Police Department in Connecticut provided insight about its November 2012 consent decree with the Department, and the Community Relations Service provided presentations about fundamental human bias and conflict de-escalation.
“I want to thank U.S. Attorney Ortiz and the Department of Justice for coming to Worcester today. We need to be proactive on the issues of misconduct, fundamental human bias, and conflict de-escalation. Seminars like this are a great chance for our local public safety officers to discuss best practices with their counterparts from across the state,” said Worcester Mayor Joseph M. Petty.
Worcester City Manager Edward Augustus said, “Quality, community policing is imperative for the health and vitality of a city and the well-being and peace of mind of its residents. I am thankful to all the police officials who demonstrated their commitment to those ideals by attending this seminar, and to the office of U.S. Attorney Carmen Ortiz, the FBI and DOJ’s Community Relations Service for sponsoring and to the College of the Holy Cross for hosting this important, timely event.”
“The FBI's Civil Rights Program is committed to restoring trust in law enforcement and to educating our partners about lessons learned from those who have abused their power and abandoned their responsibilities,” said Vincent B. Lisi, Special Agent in Charge of the FBI’s Boston Field Division.“The city of Worcester’s leadership should be commended for hosting a seminar on civil rights for law enforcement,” said Francis Amoroso, Regional Director of the Community Relations Service in New England.
“I was proud to be a part of such a timely and important seminar,” District Attorney Early said. “Raising awareness of civil rights among our law enforcement partners was an admirable undertaking. I was glad to be a part of it.”
If you would like information about how to sponsor a civil rights seminar in the District of Massachusetts, please contact the U.S. Attorney’s Office at 617-748-3100 and ask to speak to the Law Enforcement Coordinator.
Law Enforcement and Community Partners Unite to Combat Crimes Against ChildrenRead the Press Release
Tampa, FL - U.S. Attorney A. Lee Bentley, III and representatives of several federal, state, and local law enforcement agencies are continuing the observance of National Missing Children's Day (May 25th) by convening in Tampa today to announce an expanded national child safety campaign. Originally created in 2007 by the National Center for Missing and Exploited Children (NCMEC) as a campaign among federal, state, and local agencies to prevent, enforce, and prosecute crimes of exploitation against children, “Take 25” urged parents to take 25 minutes to talk to their children about Internet safety, prevention, and abduction. Beginning May 21, 2015, NCMEC’s expanded initiative, "Be Here for Kids,” encourages the public to get involved in the mission to find and protect children.
“Child predators are using more cunning and persuasive techniques and technologies to lure and exploit innocent children,” said U.S. Attorney A. Lee Bentley, III. “As a community, we must educate ourselves and others to raise awareness on how to best protect our children against these threats.”
The Department of Justice is committed to the safety and well-being of our children and has placed a high priority on protecting and combating the sexual exploitation of minors. In 2006, Project Safe Childhood was launched by the Department of Justice as a unified and comprehensive strategy to combat child exploitation by combining law enforcement efforts, community action, and public awareness. It marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, and to identify and rescue victims. The goal of Project Safe Childhood is to reduce the sexual exploitation of children.
From October 1, 2013, through April 30, 2015, the U.S. Attorney's Office for the Middle District of Florida, with the close assistance of numerous federal, state, and local agencies, brought 204 Project Safe Childhood cases against 209 individuals. The charges in those cases vary by defendant, but they include conspiring to travel in interstate commerce to engage in illicit sexual conduct, production of child pornography, distribution and receipt of child pornography, and possession of child pornography. In addition, the MDFL has prosecuted numerous cases involving human trafficking, where individuals, including minors, were forced to commit commercial sex acts. These cases were brought by each of the five division offices of the Middle District of Florida.
Children of all ages are victimized through child pornography, from as young as infants and toddlers, to adolescents. About half of the victims are younger than 12 years old. NCMEC reports that 24 percent of identified victims were pubescent, and 76 percent were prepubescent. To learn more about the Be Here for Kids Campaign, visit www.BeHereForKids.org.
Law enforcement agencies participating in today’s event included representatives from U.S. Immigration and Customs Enforcement's Homeland Security Investigations, the Florida Department of Law Enforcement, Hillsborough County Sheriff's Office, Tampa Police Department, and the Clearwater Police Department (Clearwater/Tampa Bay Area Task Force Against Human Trafficking).
Significant MDFL Cases
October 2013 through April 2015
Tampa Division
United States vs. Matthew William McLean. On March 23, 2014, a 14-year-old juvenile was reported missing to the Hillsborough County Sheriff’s Office. Law enforcement investigators learned that the juvenile had been involved in online communications (e.g. Kik messenger, Skype) with the defendant, a 25-year-old registered sex offender from Minneapolis, Minnesota. A few days earlier, McLean had purchased a Greyhound bus ticket from Minneapolis to Tampa, and on March 23rd, he purchased two bus tickets from Tampa to Brownsville, Texas, with a stop in Tallahassee. Law enforcement responded to the bus station, recovered the minor, and arrested McLean. During the trip to Tallahassee, McLean engaged in sex acts with the minor. He was sentenced to 31 years and 6 months in prison in March 2015.
United States vs. Benjamin Cuadrado. Between July 26, 2012, and March 25, 2014, Cuadrado produced, transported, received, and possessed child pornography. He used his cellular phone to produce at least 70 videos of him sexually assaulting an infant and a toddler in his care. He transported the child pornography over the Internet using his email account and an Internet messaging program. A forensic review of Cuadrado’s cellular phone revealed 250 videos and more than 4,000 images of child pornography, including files depicting pre-pubescent children and sadomasochistic conduct. He was sentenced to 80 years in prison in March 2015.
United States vs. Melvin Barber Bridgers, III. From at least December 2012, through his arrest on May 1, 2014, Bridgers used multiple Facebook accounts to pose as a young teenage girl and befriend other girls between the ages of 10 and 16 years old. After befriending the minors, he engaged in online chats with them and used manipulation, coercion, threats, and extortion to compel the minors to send him sexually graphic photographs through Facebook. Bridgers then threatened the minor victims with exposing the sexually graphic photos to their parents, or to other Internet users, in order to extort more sexually graphic photographs and videos from them. On May 1, 2014, law enforcement executed a federal search warrant at Bridgers’s residence and obtained computer media containing numerous chat logs with the minor victims, as well as over 28,000 images and videos containing child pornography. Law enforcement agents estimate that over a two-year period, Bridgers attempted to make contact with and sexually extort, or “sextort,” thousands of young girls on Facebook. To date, approximately 129 of Bridgers’s victims have been positively identified, making this one of the largest online child “sextortion” cases prosecuted in the United States. He was sentenced to 40 years in prison in April 2015.
United States vs. Michael C. Vella. A 16-year-old female reported to law enforcement that Vella had been forcing her to have sex with him since the middle of 2012. She also disclosed that Vella had, on at least one occasion, used his laptop computer to record their encounter. The video was recorded in a hotel room when he transported the victim to the Orlando area. At the time the arrest warrant was issued, Vella was deployed to Afghanistan as a Department of Defense contractor. He was sentenced to 30 years in prison in November 2014.
Orlando Division
United States vs. Matthew C. Graziotti. Graziotti distributed 141 images and 6 videos depicting the sexual abuse and exploitation of children to an undercover FBI agent. During the execution of a search warrant, agents located thousands of child pornography images on Graziotti’s computer involving children under the age of 12. One computer folder, named “personally known,” contained sexually explicit photographs and videos of 29 children that Graziotti had sexually abused when they were under the age of 12. Graziotti stored the sexually explicit images that he produced in subfolders bearing each child’s name. He produced these images from 2010 through 2014, during which he taught elementary school in South Daytona and was the director of the school’s summer day camp program. He also coached youth sports. He was sentenced to 210 years in prison on January 26, 2015.
United States vs. Xavier Francisco Villanueva, et al. Between January 17, 2013 and January 25, 2013, Orange County gang members agreed to recruit and entice a 14-year-old girl to engage in commercial sex acts. The defendants were part of the “Nine Trey Billy Bad Ass” gang, which is affiliated with the “Bloods” street gang. Over a period of nine days, they used drugs, intimidation, and physical restraint to cause the minor to engage in prostitution with customers they solicited through the Internet. On January 25, 2013, the minor escaped from the house where she was being held captive. Xavier Francisco Villanueva a/k/a “X,” (25, Orlando) was sentenced to 19 years and 7 months in prison; Jose Carmona, a/k/a “Hood,” (21, Orlando) was sentenced to a term of 12 years and 6 months; Ashley Nicole Barnett, a/k/a “Snow,” (25, Orlando) was sentenced to 10 years’ imprisonment; and Keith E. Romby, II, a/k/a “PJ,” (23, Orlando) was sentenced to 8 years and 4 months in prison.
United States vs. Michael Glenn Glascock. From October 11, 2012, through October 11, 2013, Glascock used a three-year-old victim to produce visual depictions of the child engaging in sexually explicit conduct. In the fall of 2013, an undercover agent with the Brevard County Sheriff’s Office responded to an online advertisement that Glascock had posted on Craigslist. The agent communicated with Glascock over the Internet and by cell phone. During these conversations, Glascock described his sexual abuse of the minor victim and expressed an interest in meeting the agent and the agent’s fictitious minor daughter. Glascock further expressed a desire to meet and engage in illegal sexual activity with the fictitious child, and he offered to allow the agent to engage in sexual activity with the minor victim. After finalizing plans to meet, agents went to Glascock’s home, where they met him and located the minor victim. The victim was taken to a medical facility and examined for sexual assault. Subsequent laboratory tests revealed the presence of Glascock’s semen on the child’s body, as well as in the child’s diaper. Glascock admitted to producing pornographic images of the minor victim, to sexually abusing the minor as depicted in some of the images, and to distributing and receiving images of child pornography over the Internet. Agents executed a search warrant at Glascock’s home and recovered his cell phones, SD cards, and the digital camera that he had used to produce some of the explicit images involving the minor victim. A forensic examination of these devices revealed that there were 24 images depicting explicit sexual conduct involving the minor victim on one of the SD cards. He was sentenced to life in prison on February 6, 2015.
United States vs. Jonathan Tyler Prive. In September and October 2013, an undercover agent with the Brevard County Sheriff’s Office conducted an investigation into an individual identified as Michael Glenn Glascock. The undercover investigation revealed that Glascock was sexually abusing a three-year-old minor victim, producing child pornography images of the minor victim, and distributing some of these images to others. Law enforcement agents eventually arrested Glascock at his residence in Brevard County, located the minor victim, and executed a search warrant at Glascock’s residence. A forensic examination of Glascock’s electronic devices and a review of his email accounts revealed emails between Prive and Glascock. In these emails, the two discussed a prior incident where Prive had sexually abused the minor victim at Glascock’s home, while Glascock was present. After discovering these emails, the undercover agent used Glascock’s email account to initiate online communications with Prive. He later communicated with the undercover agent via the Internet and arranged to meet the agent (posing as Glascock) for the purpose of engaging in illegal sexual activity with the minor victim for a second time. Prive traveled to the street where this residence was located and was arrested. In his possession was a packet of lubricant that he had brought for his planned meeting with the minor victim. He was sentenced to 30 years and 5 months in prison in April 2015.
Jacksonville Division
United States vs. Christopher Richard Cloonan. In March 2014, an undercover officer (UC) in Washington, D.C. posted an advertisement on an online website frequented by individuals who have a sexual interest in children. Cloonan responded to the ad and expressed interest and experience in sexual activity with a child. Later, Cloonan sent the UC an email indicating that he was alone with an infant child. Attached to the email were two images that Cloonan had produced depicting an infant engaged in sexually explicit conduct. Cloonan later sent the UC an email containing two additional images that depicted the same infant. In several subsequent emails, Cloonan discussed his fantasies about sex with children. A search warrant was later executed at Cloonan’s residence, where a forensic analysis of his phone revealed that it contained at least 85 images of child pornography, most depicting infants and toddlers. Two of the images of the infant that were taken by Cloonan and sent to the UC were also present on the smart phone. He was sentenced to life imprisonment on February 27, 2015.
United States vs. Lucas Michael Chansler. From 2007 through January 2010, Chansler transmitted threatening communications to hundreds of girls over the Internet. He transmitted these threats with the intent to extort photographs and webcam videos showing the victims exposing themselves and engaging in sexually explicit conduct. Chansler pretended to be a friend, acquaintance, or admirer of the victims on various social networking websites. After gaining some measure of trust from a particular child, Chansler would invite her to engage in a live video chat and later would ask her to expose herself. Unbeknownst to the child, he was recording the video session. Chansler often enticed his victims to expose themselves by showing a streaming video of a minor male exposing himself or engaging in masturbation. If a victim did expose herself, he recorded it and then later sent it to her over the Internet. Chansler would then demand additional and more graphic images or webcam videos. He would inform the child that if she did not comply, he would post the images and videos online, or send them to her family and friends. He was sentenced to 105 years in prison in November 2014.
United States vs. Charles Hudson. On January 6, 2014, an officer with the Jacksonville Sheriff’s Office was dispatched to a residence in response to a call regarding allegations of sexual battery on a minor child. Subsequently, detectives from the JSO Sex Crimes Unit interviewed the child, who indicated that she had been sexually abused by Hudson. Two days later, detectives obtained a search warrant for Hudson’s residence. During the execution of the warrant, officers discovered numerous items of digital media, including several computers, cameras, SD cards, CDs, and DVDs. In the attic, officers recovered a backpack containing cameras, sex devices and restraints, and several pill bottles bearing Hudson’s name. Five SD cards were found inside one of the pill bottles. Subsequent forensic analyses of the five SD cards revealed approximately 90 video and image files depicting sexually explicit conduct involving Hudson. At least two of these videos, which had been produced by Hudson, depicted him and a minor child engaged in sexually explicit conduct. He was sentenced to 60 years in prison in March 2015.
Fort Myers
United States vs. William Graydon Roberts. Roberts began communicating with a 9-year-old girl via Skype, requesting that she send sexually explicit photos to his private email account. He also sent the minor text messages instructing her on how to upload videos to YouTube. Subsequent search warrants of Internet Service Providers revealed images of the minor by Roberts on his electronic devices. Following his arrest, he pleaded guilty to receiving pornographic images of the minor, at his request. He was sentenced to 12 years in prison in March 2015.
United States vs. David Edward Judd. An FBI task force investigation into the sharing of child pornography over the Internet revealed a Fort Myers residence registered to Judd. Further investigation revealed that Judd had been downloading child pornography for years, with a preference for teenage girls. Seized computer items at the residence contained at least 8,831 images of child pornography on Judd’s computer hard drive. He subsequently pleaded guilty and was sentenced to 72 months in prison in April 2015.
Laurel Heroin Dealer Sentenced to 15 Years in PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore Chuang sentenced Christian Diamond Byrd, age 44, of Laurel, Maryland today to 15 years in prison followed by four years of supervised release for distribution of heroin. Judge Chuang also ordered Byrd to forfeit $440,000, as the proceeds of his drug distribution.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Assistant Director in Charge Andrew G. McCabe of the Federal Bureau of Investigation - Washington Field Office; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to his plea agreement, Byrd admitted that from May 2012 through September 2014 he regularly distributed heroin in 50 gram and 100 gram quantities. For example, Byrd sold a confidential source 100 grams of heroin for $11,000 on June 11, 2014, and again on July 9, 2014. On July 24, 2014, Byrd sold a confidential source 50 grams of heroin for $5,500. Each transaction took place in Laurel, Maryland and was video and audio recorded.
On October 1, 2014, a search warrant was executed at Byrd’s residence and law enforcement recovered $31,400, including some of the money given to Byrd by the confidential source on June 11th. Byrd was arrested on October 1, 2014 and agents seized approximately one gram of heroin and $8,510 in cash from Byrd.
United States Attorney Rod J. Rosenstein praised DEA, FBI, IRS-CI and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Thomas Windom, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Lake City Man Sentenced to More Than Seven Years for Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States District Judge Marcia Morales Howard has sentenced Samuel Franklin Crews (32, Lake City) to seven years and eight months in federal prison for knowingly receiving images and videos of child pornography over the Internet. He has been in custody since his arrest on December 31, 2013.
According to court documents, an FBI agent in Jacksonville began an undercover investigation to identify individuals in that area that had access to and/or were trading images and videos depicting child pornography over the Internet. The agent determined that a computer in the Lake City area was hosting images of child pornography using a peer-to-peer file sharing program. The agent was able to download several videos depicting child pornography from this computer. The subscriber information was traced to Crews’s Lake City residence.
Law enforcement officers executed a federal search warrant at Crews=s residence and seized his computer. Crews told the agents, among other things, that he had come across child pornography using a file sharing program on the Internet and became “curious,” he had searched for and downloaded more child pornography using certain search terms, and he knew that viewing such material is harmful to children. Subsequent analysis of Crews’s computer revealed that it contained 124 images and 10 videos depicting the sexual abuse of children.
This case was investigated by the Federal Bureau of Investigation, the Florida Department of Law Enforcement, the Columbia County Sheriff’s Office, and the Gainesville Police Department. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
This is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Justice Department Settles Immigration-Related Claim Against Luis Esparza Services, Inc.Read the Press Release
The Justice Department reached an agreement today with Luis Esparza Services, Inc. (LES), a farm labor contractor company based in Bakersfield, California, resolving claims that the company discriminated against individuals because of citizenship status in violation of the Immigration and Nationality Act (INA). This agreement contains the largest civil penalty the Justice Department has ever secured to resolve a discrimination claim under the INA.
The Justice Department’s investigation found that LES required work-authorized non-U.S. citizens to produce documents issued by the Department of Homeland Security as a condition of employment, but did not require the same of U.S. citizen workers. The anti-discrimination provision of the INA prohibits employers from placing additional documentary burdens on workers during the employment eligibility verification process based on their citizenship status.
Under the settlement agreement, LES will pay $320,000 in civil penalties; compensate a worker who lost wages due to LES’s employment eligibility verification practices; undergo training on the anti-discrimination provision of the INA; revise its employment eligibility verification policies; and be subject to monitoring of its employment eligibility verification practices for three years.
“Creating unlawful discriminatory barriers that prevent work-authorized immigrants from working is unacceptable,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Justice Department is committed to removing these barriers and ensuring equal employment opportunities.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation. The case was handled by OSC Trial Attorney Adriana Vieco.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship, immigration status, or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral, should contact the worker hotline above for assistance.
Justice Department Files Lawsuit to Permanently Bar Kentucky Man from Preparing Tax ReturnsRead the Press Release
The United States filed a complaint to permanently bar a Louisville, Kentucky, man and his business, NJ Mobile Tax Service, LLC, from preparing federal income tax returns for others, the Justice Department announced today.
According to the complaint, which was filed in the U.S. District Court of the Western District of Kentucky, Napoleon L. Jackson has prepared federal income tax returns that improperly understated his customers’ income tax liabilities. According to the suit, in a flyer for NJ Mobile, Jackson, offers to travel to his customers’ homes and prepare their tax returns. The flyer invites potential customers to “Let me do the numbers & I’ll even come to you,” and boasts that “[Jackson] can increase your chances for a higher return.”
The complaint alleges that Jackson understated his customers’ federal tax liabilities by, among other things:
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Falsely claiming deductions related to home ownership for taxpayers that did not own homes, including cases where Jackson prepared and filed returns from customers’ rental homes;
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Falsely claiming dependents, including listing Jackson’s relatives, as dependents on a customer’s tax return;
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Fabricating charitable contributions, and offering to falsify letters from a church that indicated the customers contributed $5,500 in cash to the church that the customers had not in fact donated; and
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Falsely claiming education credits for taxpayers who were not entitled to them.
The Internal Revenue Service (IRS) audited 31 tax returns that Jackson prepared on behalf of 20 customers for tax years 2010 and 2011. An examination of these 31 returns resulted in an increase in taxes owed for every return, according to the suit. The complaint further alleges that Jackson prepared at least 162 returns from 2010 to 2011, and continues to prepare returns today. Overall, the suit alleges that Jackson’s conduct may have cost the U.S. Treasury more than $800,000.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
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Justice Department Files Lawsuit to Permanently Bar Kentucky Man from Preparing Tax ReturnsRead the Press Release
WASHINGTON — The United States filed a complaint to permanently bar a Louisville, Kentucky, man and his business, NJ Mobile Tax Service, LLC, from preparing federal income tax returns for others, the Justice Department announced today.
According to the complaint, which was filed in the U.S. District Court of the Western District of Kentucky, Napoleon L. Jackson has prepared federal income tax returns that improperly understated his customers’ income tax liabilities. According to the suit, in a flyer for NJ Mobile, Jackson, offers to travel to his customers’ homes and prepare their tax returns. The flyer invites potential customers to “Let me do the numbers & I’ll even come to you,” and boasts that “[Jackson] can increase your chances for a higher return.”
The complaint alleges that Jackson understated his customers’ federal tax liabilities by, among other things:
- Falsely claiming deductions related to home ownership for taxpayers that did not own homes, including cases where Jackson prepared and filed returns from customers’ rental homes;
- Falsely claiming dependents, including listing Jackson’s relatives, as dependents on a customer’s tax return;
- Fabricating charitable contributions, and offering to falsify letters from a church that indicated the customers contributed $5,500 in cash to the church that the customers had not in fact donated; and
- Falsely claiming education credits for taxpayers who were not entitled to them.
The Internal Revenue Service (IRS) audited 31 tax returns that Jackson prepared on behalf of 20 customers for tax years 2010 and 2011. An examination of these 31 returns resulted in an increase in taxes owed for every return, according to the suit. The complaint further alleges that Jackson prepared at least 162 returns from 2010 to 2011, and continues to prepare returns today. Overall, the suit alleges that Jackson’s conduct may have cost the U.S. Treasury more than $800,000.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Jury Convicts Man of Methamphetamine ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was convicted by a jury May 22, 2015, after a 2 ½-day trial in federal court in Sioux City.
Jose W. Orellana, 42, from South Sioux City, Nebraska, was convicted of conspiracy to distribute 5 grams or more but less than 50 grams of actual (pure) methamphetamine. The verdict was returned May 22, 2015, following about 3 ½ hours of jury deliberations.
The evidence at trial showed that Orellana participated in a conspiracy that distributed methamphetamine in Sioux City, Iowa and South Sioux City, Nebraska. Law enforcement officers collected evidence from September 2013 through May 13, 2014.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Orellana was taken into custody by the United States Marshal after the verdict was returned and will remain in custody pending sentencing. Orellana faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 40 years’ imprisonment, a $5,000,000 fine, a special assessment of $100, and four years up to life of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-4046.
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