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22 May 2015
Central New York Doctor Sentenced to 18 Months ImprisonmentRead the Press Release
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced the sentencing today of Mahesh Kuthuru, age 43, a physician of a Utica and Fulton area pain management practice.
Mahesh Kuthuru, owner and operator of Upstate Pain Management with offices in Fulton and Utica, was sentenced by United States District Court Judge David N. Hurd to eighteen (18) months for Health Care Fraud, and twelve (12) months for Unlawful Distribution of Controlled Substances, to run concurrently, ordered to pay $84,265.11 restitution due to Medicare, along with a $125.00 Special Assessment. The defendant will serve three (3) years of supervised release upon release from prison. He was remanded to the custody of the United States Marshals upon being sentenced.
"The public expects physicians to apply high standards of professionalism in their interactions with their patients and delivery of health care services. Actions such as these demonstrate a complete disregard to the quality of care for patients. These criminal activities place additional burden on the public seeking competent health services, resulting in rising costs of health care," explained United States Attorney Hartunian. "Health care fraud remains a priority of my office and we will continue to aggressively prosecute such cases."
On January 22, 2015, Kuthuru pled guilty to Count 4 of the Superseding Indictment, specifically that he executed a scheme to defraud Medicare, and other health care benefit programs by submitting a claim that the defendant had rendered medical services to a patient, when, in fact, neither he, nor any physician, nor any licensed non-physician practitioner acting under his direct supervision, had rendered those services. On that same date, Kuthuru also pled guilty to Count 1 of the Information of unlawfully distributing controlled substances, a misdemeanor.
According to the Indictment, Kuthuru, and co-defendant Meislin, engaged in a scheme to defraud Medicare by submitting claims for reimbursement that falsely represented that Dr. Kuthuru had performed medical services when in fact he had not. Kuthuru purchased a medical practice in Las Vegas, Nevada, in November 2008. In July 2009 Kuthuru sold his home in Baldwinsville and purchased a home in Las Vegas. By January 2010 through at least September 2011, Kuthuru was spending the majority of his time at his Las Vegas medical practice, coming back to the Utica and Fulton offices to treat patients only on a sporadic basis. From January 2010 through September 2011 there were substantial periods of time when there were no licensed medical personnel whatsoever in the Utica and Fulton offices. Patients there were seen only by unlicensed staff members who had received no formal medical training. The Indictment further charged Kuthuru with unlawful distribution of Schedule II controlled substances including Oxycodone, Oxycotin, Methadone and Morphine Sulphate.
Co-defendant Bonnie Meislin was found guilty by a jury on February 25, 2015 to Counts 1-2, 4-6, 10-17, 19, 22-30, and 31 of the Superseding Indictment. Meislin’s sentencing is set for July 1, 2015 in Utica.
The case was a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the New York State Bureau of Narcotics Enforcement, United States Department of Health and Human Services, New York State Worker’s Compensation Board, Safeguard Services, and Excellus Blue Cross & Blue Shield Special Investigations. The case was prosecuted by Assistant U.S. Attorney Edward R. Broton.
Butte County Man Is Sentenced for Heroin Distribution and Being A Felon in Possession of a FirearmRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin Wagner announced that Seth Michael Bertolini, 44, of Chico, was sentenced Thursday by U.S. District Judge Troy L. Nunley to six years and five months for being a felon in possession of a firearm and for drug trafficking. Bertolini was convicted on January 15, 2015.
This case was the product of an investigation by the Federal Bureau of Investigation, Chico Police Department, and the Butte County Interagency Narcotics Task. Assistant U.S. Attorney Michelle Rodriguez prosecuted the case.
On June 4, 2014, law enforcement in Chico stopped Bertolini for driving with his car’s radio system playing loudly. During the stop, Bertolini emerged from his car animated and agitated. He then turned and fled. After a foot pursuit, Bertolini was caught and found to possess on his person and in his car heroin that was packaged for distribution and a fully loaded Smith and Wesson .32-caliber revolver. During a later search of Bertolini's residence, Bertolini was found to possess additional heroin, trafficking paraphernalia, and another gun, a Ceska Zbrojovka, 7.62 mm, semi-automatic pistol.
Buffalo Man Sentenced for Firearm PossessionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Keith Mixon, 23, of Buffalo, NY, who was convicted of possession of a firearm in furtherance of a drug trafficking crime, was sentenced to five years in prison by Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Wei Xiang, who handled the case, stated that on April 14, 2013, Buffalo Police responded to a call for an individual brandishing a gun at a party at a residence on Newburgh Avenue. When officers arrived, Mixon had 19 packets of methylone, a controlled substance sometimes known as bath salts. Officers later found a .40 caliber Glock handgun, the gun that the defendant was brandishing.
The sentencing is the result of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division.
Buffalo Man Pleads Guilty to Tax Fraud SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Kalah Bishop, 27, of Buffalo, NY, pleaded guilty today to access device fraud before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Maura K. O’Donnell, who is handling the case, stated that beginning in 2012, the defendant and her associates filed fraudulent federal and New York State income tax returns for more than 49 individuals. The tax refunds were deposited onto debit cards, which were then used by Bishop and her associates to make purchases and withdraw cash.
The tax refunds received by the defendant and her associates totaled $435,064. Bishop will be required to pay restitution of $416,192 to the Internal Revenue Service, and $18,872 to the New York State Department of Finance.
The plea is the culmination of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-In-Charge Shantelle P. Kitchen, and investigators from the New York State Department of Taxation and Finance, Criminal Investigations Division, under the direction of Michael Szrama.
Sentencing is scheduled for September 11, 2015 before Judge Arcara.
Buffalo Man Pleads Guilty to Narcotics TraffickingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that William Key, of Buffalo, NY, pleaded guilty to conspiracy to distribute 50 kilograms or more of marijuana, before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison, a fine of $1,000,000, or both.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that the defendant participated in a drug trafficking network which distributed hundreds of pounds of marijuana in the City of Buffalo. Key was on probation following a state drug conviction at the time of his arrest on federal charges.
Key was arrested along with four others involved in the conspiracy. Defendants Mark Moodie, Oneil Bennett, and Wilfred Taylor, have been convicted. Charges are pending against Raymond Lee. 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.
This plea is the culmination of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by Special Agents of Immigration & Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy, and the New York State Police, under the direction of Major Michael Cerretto.
Sentencing is scheduled for September 11, 2015, at 1:00 p.m. before Judge Arcara.
Armed Snohomish County Drug Dealer Sentenced to Long Prison Term for Drug TraffickingRead the Press Release
An Everett resident with prior federal drug felony convictions, was sentenced today in U.S. District Court in Seattle to more than 14 years in prison, announced U.S. Attorney Annette L. Hayes. JOSEPH R. KALAC was convicted at his September 2014 trial of three counts of possessing a controlled substance with intent to distribute, one count of possessing a firearm in furtherance of a drug trafficking crime, and one count each of being a felon in possession of a firearm and ammunition. KALAC later pleaded guilty to an additional charge of failing to surrender to serve a prison sentence as ordered by the court. At sentencing U.S. District Judge Richard A. Jones noted KALAC has an “extensive criminal history and a poor track record on supervision,” and added KALAC is at a “high risk to reoffend.”
According to records filed in the case, KALAC was spotted in a car in an area known for drug activity. When a Snohomish County deputy approached, KALAC sped away. He lost control of his car, crashed it, and ran away from pursuing officers. KALAC was located and arrested. After obtaining a warrant, officers searched the crashed car and found heroin, methamphetamine, crack cocaine, and a loaded semi-automatic pistol in a backpack under the driver’s seat. The backpack also had a scale, packaging material and a drug ledger. At the time KALAC was already on federal supervision for a 2009 drug distribution conviction.
In asking the court for a significant sentence, prosecutors noted that KALAC created a significant danger in the community. “As a felon, KALAC had no right to have a gun….But he nonetheless decided that his interests were better served by arming himself. The drug trade is a dangerous business….. By introducing a gun into an already volatile mix, KALAC tremendously ratcheted up the danger he and those around him faced.”
KALAC’s sentence calls for him to serve 96 months (eight years) on the drug charges and for being a felon in possession of a firearm. An additional 60 months (5 years) sentence must run consecutive for using a firearm in a drug trafficking offense. The additional one year in prison is for failing to surrender.
The case was investigated by the Snohomish County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, & Explosives. The case was prosecuted by Assistant United States Attorneys Mike Dion, Matthew Hampton and Grady Leupold.
Allen, Texas, Man Admits Running A Multi-Million Dollar Oil and Gas Investment Fraud SchemeRead the Press Release
DALLAS — Brian J. Polito of Allen, Texas, appeared yesterday before Chief U.S. District Judge Jorge A. Solis and pleaded guilty to an information charging one count of mail fraud stemming from his operation of an oil and gas investment fraud scheme, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Polito faces a maximum statutory penalty of 20 years in federal prison and $250,000 fine, or twice any pecuniary gain to the defendant or loss to the victims. However, according to the plea agreement filed, if the Court accepts the plea, the maximum term of imprisonment is 96 months. Polito also agrees to the entry of a restitution order, forfeiture order, or both, as determined and imposed by the Court, of an amount equal to the victims’ losses (restitution) or the unlawful proceeds (forfeiture) from the scheme.
According to the factual resume filed in the case, Polito was the sole owner/operator of GC Resources, LLC, an oil and gas investment firm that was located on Preston Road in Dallas. Beginning in December 2011, Polito defrauded investors by selling interests in oil and gas projects in which GC Resources had no ownership or interest.
As part of the scheme, Polito researched “Company A” on the Texas Railroad Commission’s website and determined that Company A’s wells were producing. Polito then identified Company A’s drilling permits for wells that were going to be drilled in the future. Through GC Resources, Polito began soliciting investments into Company A’s projects even though GC Resources had no control or interest in the wells.
To convince investors to invest with GC Resources, Polito told investors that GC Resources owned the oil and gas drilling leases, when, in fact, it did not have any ownership or interest in the lease. Polito also misrepresented that GC Resources had an interest in Company A’s wells, when in reality, GC Resources had zero interest in Company A’s wells. Polito informed actual and potential investors that GC Resources had a contract with Company A, which was false. Polito even supplied investors with a document purporting to be a contract between Company A and GC Resources, but that document was fraudulent, as Polito had created it using Photoshop to forge signatures of Company A employees.
Polito paid investors of Company A projects with other fraudulently obtained funds in the manner of a Ponzi scheme.
Polito solicited investments by making cold calls to potential investors and sending prospective investors a packet of materials that included the forged Company Agreement and other documents. Polito deposited investors’ money in a GC Resources bank account to which he had sole control. Over the course of the scheme, Polito raised multiple millions from victim investors, all of which was used to fund a lavish lifestyle.
When investors asked to see the well site, Polito, or a salesperson working for him, would take investors to the actual well site, which was under the control of Company A, in an effort to further deceive investors and prolong his scheme. Polito even obtained production records from the Railroad Commission’s website for Company A wells and provided that information to investors, even though neither Polito or GC Resources had any interest whatsoever in Company A’s wells.
The government has engaged in significant efforts to secure assets for potential restitution to victims. Among other things, the government has recovered $664,000 from the liquidation of the net equity in the following vehicles: a 2014 Roll Royce Wraith, a 2015 McLaren 650S Coupe, a 2014 Lamborghini, a Aventador Anniversary Coupe, a 2015 BMW M4 Coupe, a 2014 Mercedes E63 Wagon, a 2014 Ferrari 458 Speciale, a 2014 Jeep Cherokee SRT8, and one bank account subject to the entry of restitution and/or forfeiture orders.
Last month, the Securities and Exchange Commission (SEC) also filed suit against Polito and GC Resources, LLC for defrauding investors through the sale of interests in oil and gas wells the company never owned.
The FBI investigated the case. Assistant U.S. Attorneys J. Nicholas Bunch and Melissa A. Childs are prosecuting.
21 May 2015
Worcester Sex Offender Arrested for Distributing Child PornographyRead the Press Release
BOSTON – A convicted sex offender was arrested yesterday on child pornography charges.
Neil Sweeney, 49, of Worcester, was charged with possession and distribution of child pornography. Sweeney was arrested yesterday morning at his Elm Street residence and is presently being held without bail.
According to court documents, in April 2015, Sweeney distributed dozens of videos and images of minors engaging in sexually explicit conduct over the Internet to a federal undercover agent. The investigation was initiated by members of the FBI Newark Division; it was referred to the FBI Boston Division when the investigation revealed that Sweeney resided in Massachusetts. In 1995, Sweeney was convicted in Worcester Superior Court for indecent assault and battery on a person under 14 years of age. As a result of that conviction, Sweeney was required to register as a Level 3 sex offender.
If convicted of distribution of child pornography, Sweeney faces a mandatory minimum sentence of 15 years and no greater than 40 years in prison, five years of supervised release, and a fine of $250,000. If convicted of possession of child pornography, Sweeney faces a mandatory minimum sentence of 10 years and no greater than 20 years in prison, five years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Worcester Police Chief Gary J. Geeme, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Greg A. Friedholm of Ortiz’s Worcester Branch Office.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Watsonville Nursing Home Owners, Operators and Manager Agree to Pay $3.8 Million to Settle Allegations of False ClaimsRead the Press Release
SAN FRANCISCO – The owners, operators, and manager of two nursing homes in Watsonville, Calif., have agreed to pay $3.8 million to settle allegations that they submitted false claims to the United States, announced United States Attorney Melinda Haag, U.S. Department of Health and Human Services OIG (HHS-OIG) Special Agent in Charge Ivan Negroni, and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
Today’s settlement stems from a complaint filed by the United States on August 29, 2014, in U.S. District Court for the Northern District of California. In the complaint, the United States alleged the owners, operators, and managers of two nursing homes submitted to federal Medicare and Medi-Cal programs false claims for materially substandard or worthless services. Specifically, the complaint alleges between 2007 and 2012, the defendants persistently overmedicated elderly and vulnerable residents of the nursing homes, causing infection, sepsis, malnutrition, dehydration, falls, fractures, pressure ulcers, and for some residents, premature death. The complaint alleges the defendants violated the Federal False Claims Act, 31 U.S.C. §§ 3729-3733. The named defendants are the nursing homes, Country Villa Watsonville East Nursing Center (renamed Watsonville Nursing Center in April 2014) and Country Villa Watsonville West Nursing and Rehabilitation Center (renamed Watsonville Post-Acute Center in April 2014); the for-profit entities that own and operate the nursing homes, CF Watsonville East, LLC, and CF Watsonville West, LLC; the entity that exercised oversight and control over the finances and operations of the nursing homes, the ARBA Group; and the entities responsible for the management of the nursing homes under consulting agreements with the owners, Country Villa Health Service Corporation, dba Country Villa Health Services.
In addition to the monetary settlement, defendants CF Watsonville East, LLC, and CF Watsonville West, LLC have entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG. Among other things, the CIA requires these defendants to implement and maintain a robust compliance program and retain an independent monitor to help ensure the nursing homes’ compliance with Medicare and Medicaid regulations and standards of care.
“Our nursing home residents rely on the Medicare and Medi-Cal programs to receive life sustaining, and other essential medical services,” said United States Attorney Haag. “The allegations in this complaint are appalling. It is my hope that the families whose loved ones suffer at the hands of nursing homes that provide substandard care can find solace in the commitment from me that these owners, operators, and managers will be held accountable for their actions.”
“It’s outrageous when nursing home owners accept Medicare and Medicaid money to care for vulnerable nursing home residents and in return provide care so lacking in quality and compassion it shocks the senses,” said Special Agent in Charge Ivan Negroni, HHS-OIG. “Our agency is committed to investigating such substandard care and, through our Corporate Integrity Agreement with these two nursing homes, requires an independent monitor and other protections designed to hold these nursing homes accountable for providing appropriate, high quality care in the future.”
“This case demonstrates our continued commitment to investigate, and hold accountable, individuals and organizations seeking to victimize the elderly through the misuse of taxpayer funded Medicare and Medi-Cal programs,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office. “The FBI remains vigilant on our continued effort to work with our civil enforcement partners on these cases and will seek to hold those responsible for providing substandard care accountable for both past violations and future compliance.”
Assistant U.S. Attorney Gioconda Molinari litigated the case with the assistance of paralegal Lucille Yee and auditor Michael Zehr. The lawsuit is the result of an investigation by the U.S. Attorney’s Office, the Federal Bureau of Investigation, and the HHS-OIG.
If you know someone who is the victim of elder abuse, neglect, or exploitation in a nursing home, you can report it to:
- California Long-term-Care Ombudsman, 1-800-231-4024, http://www.aging.ca.gov/Programs/LTCOP/
- Your local California Department of Public Health, Licensing and Certification Division, District office http://www.cdph.ca.gov/HealthInfo/Pages/NursingHomePatient.aspx
- Your local adult protective services office, and/or the police.
Vendor Who Bribed Two-Year College Chancellor Resentenced to Three Years in PrisonRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a computer software vendor to three years in prison for paying more than $600,000 in bribes between 2002 and 2006 to the then chancellor of Alabama's two-year college system, announced U.S. Attorney Joyce White Vance and Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Virginia Emerson Hopkins sentenced JAMES WINSTON HAYES, 71, to prison and again ordered he pay $628,454 in restitution and forfeit $5 million. The judge originally sentenced Hayes to probation in 2011. Today's resentencing was the result of a November ruling by the U.S. Court of Appeals for the Eleventh Circuit, which vacated the judge's earlier sentence. The government challenged the probationary sentence on appeal and the 11th Circuit ruled that a sentence of probation was unreasonable for Hayes' crime.
"Mr. Hayes received millions of taxpayer dollars by bribing the chancellor of Alabama's two-year college system to ensure the defendant's company received contracts from colleges within the system," Vance said. "Through fraudulent contracts and fake invoices, he even had taxpayers financing his bribe payments," she said. "Imprisonment is a necessary and just punishment for his crimes."
“Today’s sentence of James Hayes emphasizes the government’s relentless effort to hold an individual accountable for his criminal behavior,” Hyman-Pillot said. “Mr. Hayes used financial bribes to influence contracts with the Alabama Department of Postsecondary Education. The overall conspiracy was fueled by greed and deceit. I hope this sends a clear message that Internal Revenue Service-Criminal Investigation will continue to trace every penny used in kickback schemes to expose all individuals who engage in bribery and corruption,” she said.
Hayes formerly owned ACCESS Group Software, a Walker County company that sold educational computer software to the Alabama Department of Postsecondary Education. ACCESS did business with more than 25 two-year colleges and technical schools in Alabama. Hayes pleaded guilty in 2008 to bribing Roy Johnson, then chancellor of the two-year college system, and to conspiring to commit money laundering.
Over four years, Hayes paid Johnson more than $600,000 in bribes, and in return, Hayes’ software company obtained lucrative government contracts that earned his company more than $14 million in revenue and about $5 million in profit.
Johnson pleaded guilty in the case to charges of bribery, conspiracy to commit bribery, conspiracy to commit money laundering, obstruction of justice and tampering with a witness. Johnson was sentenced to six years and six months in prison. Both Hayes and Johnson assisted the government in its investigation of corruption in the two-year college system after they were charged. Including Hayes and Johnson, the investigation resulted in 17 convictions.
Assistant U.S. Attorney George Martin prosecuted the case and Assistant U.S. Attorney Praveen Krishna handled the case on appeal.
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Upton Man Pleads Guilty to Robbing Multiple BanksRead the Press Release
Boston – An Upton man pleaded guilty to robbing four banks in a two-week period and making off with $49,000.
Brandon Coldwell, 21, pleaded guilty today before U.S. District Court Chief Judge Patti B. Saris to four counts of bank robbery. He is scheduled to be sentenced on Sept. 3, 2015.
On Sept. 11, 2014, Coldwell kicked off a two-week crime spree by robbing the Mt. Washington Bank in Dorchester. Thereafter, Coldwell robbed a Citizen’s Bank branch in Brookline on Sept. 17, another Citizen’s Bank in Milton two days later, and a third Citizen’s Bank in Framingham on Sept. 24. In total, Coldwell stole $49,000 in less than two weeks.
In all four robberies, Coldwell threatened to shoot bank employees if the tellers did not comply with his demands for cash. Law enforcement identified Coldwell as the perpetrator based on his unique arm tattoos, which were captured on bank surveillance video. During the weeks he committed the robberies, Coldwell was also active on social media and posted pictures of himself wearing the clothing he wore when he committed the crimes as well as displaying his arm tattoos.
The charging statute provides a sentence on each count of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; made the announcement today. Assistance was also provided by the Boston, Brookline, Milton, and Framingham Police Departments. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
University Professor Charged in Wire Fraud SchemeRead the Press Release
PHILADELPHIA – Xiaoxing Xi, 47, of Penn Valley, PA, was charged by indictment, unsealed today, with four counts of wire fraud in an alleged scheme involving the exploitation of technology for the benefit of third parties in China. Xi, a naturalized U.S. citizen and a native of the People’s Republic of China, is a world-renowned expert in the field of magnesium diboride thin film superconducting technology. The fraud, it is alleged, was an effort to assist Chinese entities in becoming world leaders of the superconductivity field.
The charges were announced today by United States Attorney Zane David Memeger, and FBI Special Agent-in-Charge Edward J. Hanko.
The indictment alleges that, in 2002, Xi participated in China’s 863 Program, which was a Chinese government program intended to boost high-technology innovation and development in China. Thereafter, in 2002 to 2003, the indictment alleges that Xi took a sabbatical from his university position and worked with a U.S. company in the field of thin film superconductivity research. During his tenure at the company, individuals there invented a piece of technology which revolutionized the field of superconducting magnesium diboride thin film growth. The indictment alleges that, starting in January 2004, Xi made efforts to obtain the technology from the company. The indictment further alleges that Xi applied for and was awarded a U.S. Defense Department grant to finance his purchase of the device for research relevant to the Department of Defense. In January 2006, Xi obtained the device for 12 months subject to an agreement that he not reproduce, sell, transfer or otherwise distribute the device or any copies of the device to any third party. The indictment alleges that Xi signed this agreement as part of a scheme to defraud the company into providing him the technology, so that he could provide it to entities in China and assist those entities in further exploitation and use of the technology. The indictment further alleges that Xi repeatedly reproduced, sold, transferred, distributed, and otherwise shared the device with, and exploited it for the benefit of, government entities and other third parties in China. It is further alleged that, in exchange for his efforts, Xi repeatedly sought lucrative and prestigious appointments in China.
According to the indictment, Xi’s emails include a communication on May 14, 2010, to an associate in China, confirming the delivery of certain technology to a laboratory in China; and three emails to separate associates in China, in June 2010 and December 2010, in which Xi offers to build a world-class thin film laboratory.
If convicted the defendant faces a maximum possible sentence of 80 years in prison, three years of supervised release, a fine of up to $1 million, and a $400 special assessment.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Jennifer Arbittier Williams.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Attorney's Office Conducts Americans with Disabilities Act Review of New Haven Area HotelsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that the U.S. Attorney’s Office is nearing completion of a review of hotels in and around New Haven to determine if they are being operated in compliance with the Americans with Disabilities Act (ADA).
Under federal law, private entities that own or operate “places of public accommodation,” which includes hotels, are prohibited from discriminating on the basis of disability. The ADA authorizes the U.S. Department of Justice to investigate complaints and to undertake periodic reviews to determine compliance by covered entities. The Justice Department is also authorized to commence a civil lawsuit in federal court in any case that involves a pattern or practice of discrimination or that raises issues of general public importance, and to seek injunctive relief, monetary damages, and civil penalties.
As part of a compliance review survey, 12 New Haven area hotels, which were randomly selected, were asked to complete and return a survey form. Onsite inspections to confirm survey responses were then conducted and each hotel was reviewed for its compliance with federal law. Six of the surveyed hotels were found to have ADA violations. The government has been working with the owners and operators of each hotel found in violation in an effort to secure voluntary compliance. To date, three of the six hotels found in violation, the La Quinta Inn and Suites, Courtyard Marriott and New Haven Hotel, have entered into settlement agreements with the government and are working cooperatively with the government to address the violations.
The government continues to work with the three remaining hotels to secure voluntary compliance agreements and address existing ADA violations.
“The Americans with Disabilities Act ensures that residents and visitors alike are able to access and enjoy the state’s hotels and other public accommodations,” stated U.S. Attorney Daly. “Ensuring these public places are equally accessible to all is essential for businesses to properly serve a diverse population who live, work and visit Connecticut. We look forward to working with the owners and operators of these hotels as we assess their compliance with federal law and work cooperatively to secure voluntary compliance.”
The hotel survey was conducted in accordance with the Justice Department’s statutory responsibility to review compliance with federal law, and not in response to any specific complaint against any of the hotels within the scope of the review. Any member of the public who wishes to file a complaint alleging that a hotel or any other place of public accommodation within the District of Connecticut is not accessible to persons with disabilities may contact the U.S. Attorney’s Office at 203-821-3700.
Additional information about the ADA can be found at www.ada.gov, or by calling the Department’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD). More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
This matter was handled by Assistant U.S. Attorneys David Nelson, Vanessa Avery, and Ndidi N. Moses, and former Assistant U.S. Attorney Lisa Perkins, in coordination with the Disability Rights Section of the U.S. Department of Justice Civil Rights Division.
U.S. Army Sergeant Sentenced to 51 Months in Prison for Taking Bribes While Deployed in AfghanistanRead the Press Release
A sergeant with the U.S. Army was sentenced today to 51 months in prison for accepting bribes from Afghan truck drivers at Forward Operating Base (FOB) Gardez in Afghanistan, in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
James Edward Norris, 41, of Fort Irwin, California, was sentenced by Chief U.S. District Judge Clay D. Land of the Middle District of Georgia, who also ordered Norris to pay $176,100 in restitution and to forfeit two vehicles he purchased with money from the bribery scheme and $70,000 in cash that he received from the scheme.
In connection with his guilty plea, Norris admitted that he conspired with other soldiers stationed at FOB Gardez to solicit and accept approximately $2,000 per day from local Afghan truck drivers in exchange for permitting the truck drivers to take thousands of gallons of fuel from the base. Norris admitted that he was personally paid a total of $100,000 over the course of the conspiracy.
Norris and the other soldiers shipped the bribe proceeds back to the United States in tough boxes. Norris admitted that, after returning from deployment, he purchased a 2008 Cadillac Escalade with $31,000 cash derived from the bribery scheme and a custom built 2014 Hardcore Choppers motorcycle with approximately $30,000 in proceeds from the scheme.
Seneca Hampton, another U.S. Army sergeant, pleaded guilty for his role in the scheme on Feb. 10, 2015, and is scheduled to be sentenced on July 28, 2015. Anthony Tran, a former U.S. Army specialist, was indicted on March 10, 2015, for his alleged role in the scheme and remains pending trial. The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency’s Investigative Support Division. The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section.
Two Perry County Residents Sentenced for Methamphetamine ConspiracyRead the Press Release
On May 21, 2015, Brant A. Sizemore, 39, of DuQuoin, and Jamey A. Carson, 36, of Pinckneyville, were sentenced for their involvement in a methamphetamine conspiracy, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Both Sizemore and Carson had previously pled guilty to a one-count indictment charging them and five others with conspiracy to manufacture methamphetamine. Sizemore was sentenced to 120 months in federal prison, 3 years’ supervised release, and fined $625.00. Sizemore was given 60 days credit for time served on related state case. Carson was sentenced to 77 months in federal prison, 3 years’ supervised release, and fined $400.00. The offense occurred between 2012 and September 2014, in Perry, Jackson, Randolph, Williamson, and Franklin Counties. Evidence at the plea and sentencing hearings established that Sizemore and Carson were involved with each other and with others in the manufacture of methamphetamine. At sentencing, the district court found Sizemore responsible for 181 grams of pseudoephedrine, which was possessed for the purpose of manufacturing methamphetamine. Carson was found responsible for 28.8 grams of pseudoephedrine. The other five co-defendants have pled guilty to their role in the methamphetamine conspiracy and are awaiting sentencing.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Murphysboro Police Department, and DuQuoin Police Department. The Pinckneyville Police Department and Illinois State Police Methamphetamine Response Team assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Two People Charged in Connection with Stolen Identity Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – Two people allegedly involved in an extensive scheme to obtain U.S. Government funds through fraudulently obtained refund checks issued by the U.S. Treasury were charged today for their involvement in the scam, U.S. Attorney Paul J. Fishman announced.
Jhan Luis Mejia Marcelino, 25, and Odanys Orlando Rojas, a/k/a “El Fuerte,” 37, both of Bronx, New York, were arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, special agents of the U.S. Postal Service Office of Inspector General, and special agents of the U.S. Secret Service. They are charged by complaint with conspiracy to steal government funds.
Both defendants made their initial court appearances today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Rojas was ordered detained and Marcelino was released on $250,000 unsecured bond.
According to the complaint:
Background on Stolen Identify Refund Fraud
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
- SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
- They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
- With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
The Investigation
Marcelino, Rojas and others allegedly have obtained stolen identities that they used to file, and to assist in the filing of Fraudulent Form 1040s to generate Fraudulent Treasury Checks. From Jan. 31, 2014, through Nov. 22, 2014, the defendants caused to be filed 132 fraudulent Form 1040s, claiming $917,284 in false income tax returns, and causing $14,520 in fraudulent treasury checks to be issued directly from the U.S. Treasury.
Rojas was allegedly responsible for filing 73 Fraudulent Form 1040s, claiming total tax returns of $589,621, on April 22, 2014, alone. From Jan. 31, 2014, through Nov. 22, 2014, the Preparer Tax Identification Number, or “PTIN,” associated with those filings was also used to file 16,037 fraudulent Form 1040s, which claimed $115,455,061 in tax refunds, and caused $2,943,329 in U.S. Treasury refund checks to be issued.
Marcelino was responsible for filing 59 fraudulent Form 1040s, claiming total tax returns of $327,663, on Sept. 2, 2014, alone. From May 4, 2014, through Nov. 21, 2014, the PTIN associated with those filings was also used to file 1,356 fraudulent Form 1040s, claiming $8,416,206 in tax refunds, and causing $572,548 in U.S. Treasury refund checks to be issued.
The conspiracy charge is punishable by a maximum potential penalty of five years in prison. The charge is also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica S. Weyler; and special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli; with the investigation leading to today’s arrests and charges.
The government is represented by Assistant U.S. Attorneys Melissa Wangenheim and Elisa Wiygul of the General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the Defendants are considered innocent unless and until proven guilty.
Defense counsel:
Marcelino: John Yauch Esq., Assistant Federal Public Defender, Newark
Rojas: Timothy R. Anderson Esq., Red Bank, N.J.- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
Three Men Charged in Manhattan Federal Court in Multimillion-Dollar Scheme to Deceive Homeowners into Selling Their HomesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the Federal Bureau of Investigation (“FBI”), Christy Romero, and Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) announced that MARIO ALVARENGA, RAJESH MADDIWAR, and AMIR MEIRI were arrested today for participating in a scheme to fraudulently induce distressed homeowners to sell their homes to a company associated with the defendants. ALVARENGA, MADDIWAR, and MEIRI were presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Kevin Fox.
Manhattan U.S. Attorney Preet Bharara said: “In what is alleged to be a brazen fraud, these defendants manipulated and took advantage of vulnerable people, and in some cases even tricked individuals into losing their homes. I would like to thank our partners – the FBI, SIGTARP, and DFS – for their ongoing assistance on this case.”
FBI Assistant Director Diego Rodriguez said: “The defendants took advantage of distressed home owners, mostly the poor and elderly, promising relief. In reality it was nothing more than a callous scheme that took advantage of the most desperate of victims. And in many cases, the owners were evicted from their homes after being tricked into selling their property to the defendants arrested today.”
Special Inspector General for SIGTARP said: “The three individuals taken into custody today stand charged with preying on struggling homeowners simply looking for a way to keep their homes from falling into foreclosure. These individuals are alleged to have dangled false promises of guaranteed mortgage modifications as a veil for secretly swindling homeowners out of their homes and forcing homeowners to vacate their properties. SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud related to the exploitation of TARP’s housing programs and bring perpetrators to justice. SIGTARP commends U.S. Attorney Bharara, Superintendent Lawsky, and the FBI for their shared commitment to safeguarding taxpayers from TARP-related crime.”
According to the allegations in the Complaint unsealed today in Manhattan federal court[1]:
Since at least 2013, ALVARENGA, MADDIWAR, and MEIRI have defrauded distressed homeowners throughout the Bronx, Brooklyn, and Queens. ALVARENGA, MADDIWAR, and MEIRI falsely represented to these homeowners – some of whom were elderly or in poor health – that they could assist them with a loan modification or similar relief from foreclosure that would allow the homeowners to save their homes. But rather than actually assisting these homeowners, the defendants deceived them into selling their homes to Launch Development LLC (“Launch Development”), a for-profit real estate company also affiliated with the defendants.
ALVARENGA, MADDIWAR, and MEIRI lured victims through the Homeowners Assistance Service of New York (“HASNY”), which purported to provide assistance to homeowners who were seeking to avoid foreclosure of their homes. As part of the scheme, MEIRI directed employees of Launch Development, a company owned in part by MEIRI, to solicit owners of distressed properties and invite them to meet with HASNY representatives so that they could learn more about avoiding foreclosure and saving their homes.
When a homeowner arrived at the HASNY office, he or she met with ALVARENGA, who typically advised the homeowner that HASNY could assist him or her with a loan modification. In still other cases, ALVARENGA advised the homeowner that a loan modification could not be completed, but that the homeowner could engage in a type of short sale in which the homeowner would sell the property to a third party, Launch Development, and then within approximately 90 days arrange for a relative of the homeowner to repurchase the property from Launch Development. ALVARENGA typically explained that the homeowner could remain in his or her home throughout the entire process. ALVARENGA then typically scheduled a closing at which the homeowner would meet with MADDIWAR, who was described as the homeowner’s attorney for the transaction.
At the closing, a homeowner who had been led to believe that he or she was about to receive a loan modification or transfer his or her property to a trusted relative was encouraged to sign documents presented by MADDIWAR, which in some cases were blank. Unbeknownst to the homeowners, by signing the documents, they were selling to Launch Development the homes they had hoped to save. Homeowners often were then forced to vacate their homes soon thereafter.
* * *
ALVARENGA, MADDIWAR, MEIRI are each charged with one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding work of the FBI, SIGTARP, and the New York State Department of Financial Services for their investigative efforts and ongoing support and assistance with the case.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney's Office for the Southern District of New York, at (866) 874-8900, or [email protected]. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution of this case is being overseen by the Office’s General Crimes Unit. Assistant U.S. Attorney Jaimie L. Nawaday is in charge of the case.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Three Indianapolis men indicted on federal firearm chargesRead the Press Release
Indianapolis –United States Attorney Josh J. Minkler announced today the indictment of three Indianapolis men on firearms charges. All three are felons who are not legally permitted to carry a firearm.
Those indicted include:
James Lewis, 35
Adrian Bullock, 25
Jose Eduardo Mercado, 33
“The vast majority of individuals committing violent crimes with firearms in Indianapolis are individuals who are legally prohibited from possessing firearms. Our office is committed to investigating felons who illegally possess firearms and, if the evidence supports it, indicting those felons. This is a proven method of reducing violent crime,” stated Minkler.
Lewis was arrested by members of the United States Marshals Fugitive Task Force who were serving arrest warrants at his residence on the Eastside of Indianapolis on April 13, 2015. Lewis allegedly had a 9mm handgun in his waistband and has prior felonies for robbery, burglary, kidnapping and a parole violation for dealing in narcotics.
Bullock was arrested by IMPD officers on April 18, 2014, as he was driving near his residence in the 1700 block of North Oxford Street. Bullock allegedly ran from a vehicle he was driving and violently fought with officers as they attempted to handcuff him. Inside the vehicle, officers found two rifles and a handgun. A warrant was obtained and officers located two stolen handguns, a shotgun and 17 pounds of marijuana inside his residence. Bullock’s criminal history includes a felony conviction for possession of a controlled substance.
Jose Eduardo Mercado, 33, was arrested by law enforcement after his Northwest side residence was searched and a .40 caliber handgun and over 50 grams of methamphetamine were allegedly found. Mercado is an alien unlawfully in the United States.
“The Indianapolis Metropolitan Police Department has a duty to ensure the safety of those living in our neighborhoods,” said IMPD Chief Rick Hite. “Keeping firearms out of the hands of those who cannot legally possess them remains a top priority of IMPD. We appreciate the hard work of the men and woman of IMPD keeping our neighborhoods safe, and the assistance of our federal partners with their assistance to pursue these cases for prosecution.”
The United States Attorney’s Violent Crime Initiative began in 2011, and is intended to focus on the “worst of the worst” violent offenders by marshaling federal resources to provide local partners the additional tools they may need to succeed in their effort to promote peace.
An indictment is only a charge and not evidence of guilt. All defendants are presumed innocent until proven guilty in federal court.
Tax Fraud Promoters Sentenced to Prison for Conspiring to Defraud Internal Revenue ServiceRead the Press Release
A Midvale, Utah, man and a Henderson, Nevada, woman were sentenced yesterday in the U.S. District Court in Salt Lake City for tax crimes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carlie Christensen of the District of Utah.
Gerrit Timmerman III, 73, of Midvale, was sentenced to serve 48 months in prison to be followed by three years of supervised release. Carol Jean Sing, 75, of Henderson, was sentenced to serve 36 months in prison to be followed by three years of supervised release. In February 2015, Timmerman and Sing were convicted at trial by a federal jury of conspiracy to defraud the United States related to their promotion of a tax fraud scheme.
“Combatting abusive tax schemes remains one of the Tax Division’s highest priorities, and these sentences are the result of our continued efforts to pursue and prosecute fraudulent promoters to the fullest extent of the law,” said Acting Assistant Attorney General Ciraolo. “We will continue to work with our law enforcement partners at the IRS and in the U.S. Attorney’s Offices to identify and dismantle these criminal enterprises and in doing so, protect the American public and the U.S. Treasury.”
“Individuals who enrich themselves by promoting tax avoidance schemes and assisting others in evading state and federal taxes are defrauding American taxpayers,” said U.S. Attorney Christensen. “They should expect to be prosecuted, convicted and sentenced to federal prison for this conduct, as yesterday’s sentences demonstrate.”
According to the evidence introduced at trial, between April 23, 2004, and March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing “corporations sole” as part of their scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that corporations sole were exempt from United States income tax laws, had no obligation to file tax returns and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from IRS collection activity by transferring property to the corporation sole.
According to evidence presented at trial, Sing used Trioid International Group Inc. as a resident agent for corporations sole and other business entities for their clients. Sing and Timmerman also utilized a website to list the tax benefits of corporations sole and to post articles about the supposed tax benefits of corporations sole. At the same time, Timmerman was actively assisting others in evading their state and federal income tax liabilities and recommended the corporation sole to his clients as another way to impair the IRS. Both defendants referred customers to one another and paid each other referral fees.
“Yesterday’s sentencing of Gerrit Timmerman and Carol Sing 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 jail time,” said Special Agent in Charge John G. Collins of IRS-Criminal Investigation in Utah. “The Internal Revenue Service, in partnership with the U.S. Attorney’s Office and the Tax Division, will continue the aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation's tax system. Honest taxpayers have been reassured today that no one is above the law – especially when the integrity of tax administration is at stake.”
A corporation sole is a form of incorporation allowed by some states, primarily for use by religious leaders to hold title to property. Several states, including Utah and Nevada, have disallowed the creation of new corporations sole. The IRS has publicized the fact that corporations sole have been abused by promoters in Revenue Ruling 2004-27, and has even included corporations sole on their “dirty dozen” tax scams in prior years.
Assistant Attorney General Ciraolo and U.S. Attorney Christensen commended the special agents of IRS–Criminal Investigation, who investigated this case, as well as Trial Attorneys Dennis R. Kihm and Andrea A. Kafka of the Tax Division, who prosecuted the case.
Tax Fraud Promoters Sentenced to Prison for Conspiring to Defraud Internal Revenue ServiceRead the Press Release
SALT LAKE CITY – A Midvale, Utah, man and a Henderson, Nevada, woman were sentenced Wednesday afternoon in U.S. District Court in Salt Lake City for tax crimes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carlie Christensen of the District of Utah.
Gerrit Timmerman III, 73, of Midvale, was sentenced to 48 months in prison to be followed by three years of supervised release. Carol Jean Sing, 75, of Henderson, was sentenced to 36 months in prison to be followed by three years of supervised release. In February 2015, Timmerman and Sing were convicted at trial by a federal jury of conspiracy to defraud the United States related to their promotion of a tax fraud scheme.
“Combatting abusive tax schemes remains one of the Tax Division’s highest priorities, and these sentences are the result of our continued efforts to pursue and prosecute fraudulent promoters to the fullest extent of the law,” said Acting Assistant Attorney General Ciraolo. “We will continue to work with our law enforcement partners at the IRS and in the U.S. Attorney’s Offices to identify and dismantle these criminal enterprises and in doing so, protect the American public and the U.S. Treasury.”
“Individuals who enrich themselves by promoting tax avoidance schemes and assisting others in evading state and federal taxes are defrauding American taxpayers,” said U.S. Attorney Christensen. “They should expect to be prosecuted, convicted and sentenced to federal prison for this conduct, as these sentences demonstrate.”
According to the evidence introduced at trial, between April 23, 2004, and March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing “corporations sole” as part of their scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that corporations sole were exempt from United States income tax laws, had no obligation to file tax returns and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from IRS collection activity by transferring property to the corporation sole.
According to evidence presented at trial, Sing used Trioid International Group Inc. as a resident agent for corporations sole and other business entities for their clients. Sing and Timmerman also utilized a website to list the tax benefits of corporations sole and to post articles about the supposed tax benefits of corporations sole. At the same time, Timmerman was actively assisting others in evading their state and federal income tax liabilities and recommended the corporation sole to his clients as another way to impair the IRS. Both defendants referred customers to one another and paid each other referral fees.
“Yesterday’s sentencing of Gerrit Timmerman and Carol Sing 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 jail time,” said Special Agent in Charge John G. Collins of IRS-Criminal Investigation in Utah. “The Internal Revenue Service, in partnership with the U.S. Attorney’s Office and the Tax Division, will continue the aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation's tax system. Honest taxpayers have been reassured today that no one is above the law -- especially when the integrity of tax administration is at stake.”
A corporation sole is a form of incorporation allowed by some states, primarily for use by religious leaders to hold title to property. Several states, including Utah and Nevada, have disallowed the creation of new corporations sole. The IRS has publicized the fact that corporations sole have been abused by promoters in Revenue Ruling 2004-27, and has even included corporations sole on their “dirty dozen” tax scams in prior years.
Assistant Attorney General Ciraolo and U.S. Attorney Christensen commended the special agents of IRS–Criminal Investigation, who investigated this case, as well as Trial Attorneys Dennis R. Kihm and Andrea A. Kafka of the Tax Division, who prosecuted the case.
Tacoma Man Who Sexually Exploited Teen Girls Sentenced to 8+ Years in PrisonRead the Press Release
A 31-year-old Tacoma man who transported two teen-age runaways from Spokane to Pierce County and advertised them for sex via Backpage.com, was sentenced today in U.S. District Court in Tacoma to 100 months in prison, announced U.S. Attorney Annette L. Hayes. CLIFTON ESKRIDGE, III, pleaded guilty to possession of child pornography in July 2014. At sentencing U.S. District Judge Benjamin H. Settle said ESKRIDGE caused “great harm to these girls” and ordered ESKRIDGE to serve 15 years of supervised release following prison.
According to records filed in the case, in March 2013, ESKRIDGE transported two teen girls, ages 15 and 16 from Spokane, Washington to Pierce County, and both girls were runaways. ESKRIDGE produced a sexually explicit video and photos of the teen girls in April 2013 using his smartphone and computer. ESKRIDGE also advertised the teens for sex on Backpage.com. ESKRIDGE was arrested and initially charged in Pierce County Superior Court with commercial sex abuse of a minor. ESKRIDGE attempted to discourage the teens from speaking to federal investigators but his efforts were unsuccessful. The investigation resulted in a federal indictment in February 2014. ESKRIDGE has been in federal custody since that time.
ESKRIDGE was ordered to register as a sex offender.
The case was investigated by the South Sound Child Exploitation Task Force which involves agents and officers of the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) and the Lakewood Police Department.
The case was prosecuted by Assistant United States Attorney Ye-Ting Woo.
Six Southeast New Mexico Residents and a Texan Facing Federal Firearms and Narcotics ChargesRead the Press Release
ALBUQUERQUE – Investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lea County Drug Task Force and the Pecos Valley Drug Task Force have resulted in the filing of federal charges against six individuals who reside in southeastern New Mexico and a Texan. Five of the seven defendants were arrested yesterday and made their initial appearances in federal court in Las Cruces, N.M., this morning. The other two are in state custody and will be transferred to federal custody to face the charges against them.
Dessi Timothy Burton, 22, of Odessa, Texas, was arrested on a criminal complaint charging him with being a felon in possession of a firearm on Sept. 30, 2014, in Lea County. The criminal complaint alleges that Burton unlawfully possessed firearms while attempting to sell a semi-automatic pistol, two semi-automatic rifles, a shotgun and ammunition to an undercover officer. At the time Burton was prohibited from possessing firearms or ammunition because he previously had been convicted of child abuse and possession of a controlled substance.
Michael Gibson, 26, of Lovington, N.M., was arrested on a criminal complaint charging him with possession of methamphetamine with intent to distribute and using a firearm in furtherance of a drug trafficking crime in Lea County, N.M., in Sept. 2014. The criminal complaint alleges that on Sept. 10, 2014, Gibson sold approximately two ounces of methamphetamine to another person on Sept. 10, 2014, in Hobbs, N.M. Gibson allegedly displayed a handgun while negotiating the drug deal.
Shawn Hedgecock, 43, of Carlsbad, N.M., is charged in a criminal complaint with being a felon in possession of a firearm, and possession of an unregistered firearm with an obliterated serial number on Feb. 9, 2015, in Eddy County, N.M. The criminal complaint alleges that on Feb. 9, 2015, officers went to Hedgecock’s residence for the purpose of executing state court warrants for Hedgecock’s arrest. During a consensual search of the residence, the officers allegedly seized an unregistered sawed off shotgun and ammunition. Hedgecock was prohibited at the time from possessing firearms or ammunition because he previously had been convicted of the following felony offenses: possession of methamphetamine, possession of drug paraphernalia, concealing identity, and tampering with evidence. Hedgecock is in state custody on other charges and will be transferred to federal custody to face the charges in the criminal complaint.
The criminal complaint against Jared Taylor Pendleton, 30, and Jasmine Tapia, 19, both of Hobbs, N.M., charges Pendleton with being a felon in possession of a firearm, and charges both Pendleton and Tapia with possession of a sawed-off shotgun in Lea County. According to the criminal complaint, on Oct. 23, 2013, Tapia assisted Pendleton in selling an unregistered sawed-off shotgun to an undercover officer. At the time, Pendleton was prohibited from possessing firearms or ammunition because he previously had been convicted of fraud and the unlawful taking of a vehicle. Pendleton was arrested yesterday. Tapia is in state custody on related charges and will be transferred to federal custody to face the charges in the criminal complaint.
Daniel Ramirez, 19, of Hobbs, N.M., was arrested on a criminal complaint charging him with possession of a firearm with an obliterated serial number and using a firearm in furtherance of a drug trafficking crime on Dec. 12, 2014, in Lea County. The criminal complaint alleges that on Dec. 12, 2014, Ramirez was arrested for resisting officers and was found to be in possession of a semi-automatic handgun with an obliterated serial number, ammunition, approximately 11 ounces of cocaine, approximately 9.5 ounces of marijuana, and $420.00 cash.
Jestin White, 22, of Hobbs, N.M., was arrested on a criminal complaint charging him with possession of a controlled substance with intent to distribute on May 19, 2015, in Lea County. The complaint alleges that from Sept. 4, 2014 through May 19, 2015, White sold approximately 411.1 grams of cocaine, a .22 caliber rifle and ammunition to undercover law enforcement.
If convicted of the charges against them, each of the defendants faces a statutory maximum of ten years in federal prison on the firearms charges. If convicted on the narcotics charges against them, Gibson and White each faces a statutory maximum penalty of 20 years in federal prison. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
These cases were investigated by the Las Cruces and Roswell offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lea County Drug Task Force and the Pecos Valley Drug Task Force with assistance from the 5th Judicial District Attorney’s Office. The U.S. Marshals Service assisted in yesterday’s law enforcement operation. Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department the Tatum Police Department and the Jal Police Department, and the Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The two task forces are part of the New Mexico HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Today’s law enforcement action and arrests were undertaken 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. This initiative recognizes that on a per capita basis, New Mexico’s violent crime rates significantly exceed the national average.
Six Defendants Sentenced in Fraudulent Tax Refund SchemeRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that all six defendants involved in a recent scheme to defraud the Internal Revenue Service (IRS) and identity theft have now been sentenced by U.S. District Judge Karen E. Schreier. On February 4, 2014, all six defendants were indicted for Conspiracy to Defraud the United States and five of the six defendants were indicted for Aggravated Identity Theft.
Jennifer Robinson, age 26, of Fargo, ND, pled guilty to the charges in October of 2014. She was sentenced on May 18, 2015, to 1 day in custody to be followed by 2 years of supervised release on the conspiracy charge, and 24 months in custody to be followed by 1 year of supervised release on the identity theft offense. The time in custody will be served consecutively, and the supervised release will be served concurrently. Robinson was also ordered to pay $33,015.00 in restitution to the IRS.
Shawnte Washington, age 32, of Tampa, FL, pled guilty to the charges in February of 2015. She was sentenced on May 18, 2015, to 1 day in custody to be followed by 2 years of supervised release on the conspiracy charge, and 24 months in custody to be followed by 1 year of supervised release on the identity theft offense. The time in custody will be served consecutively, and the supervised release will be served concurrently. Washington was also ordered to pay $16,065.00 in restitution to the IRS.
Undra Stewart Franks, age 28, of Little Rock, AR, pled guilty to the offenses in February of 2015. He was sentenced on May 4, 2015, to 1 day in custody to be followed by 2 years of supervised release on the conspiracy charge, and 24 months in custody to be followed by 1 year of supervised release on the identity theft offense. The time in custody will be served consecutively, and the supervised release will be served concurrently. Franks was also ordered to pay $9,679.00 in restitution to the IRS.
Timothy L. Brister, Jr., age 30, of Tampa, FL, pled guilty to the offenses in January of 2015. He was sentenced on April 27, 2015, to 1 day in custody to be followed by 2 years of supervised release on the conspiracy charge, and 24 months in custody to be followed by 1 year of supervised release on the identity theft offense. The time in custody will be served consecutively, and the supervised release will be served concurrently. Brister was also ordered to pay $9,679.00 in restitution to the IRS.
Anna Weber, age 28, of Horace, ND, pled guilty to the conspiracy charge in October of 2014. She was sentenced on April 16, 2015, to 3 years of probation. Weber was also ordered to pay $73,146.81 in restitution to the IRS.
Donta J. Moore, age 29, of Kansas City, MO, pled guilty to the charges in October of 2014. He was sentenced on March 13, 2015, to 27 months in custody to be followed by 2 years of supervised release on the conspiracy charge, and 24 months in custody to be followed by 1 year of supervised release on the identity theft offense. The time in custody will be served consecutively, and the supervised release will be served concurrently. Moore was also ordered to pay $160,176.18 in restitution to the IRS.
Donta Moore and Undra Stewart Franks played for the Sioux Falls Storm Arena Football team in 2012.
The convictions stemmed from the defendants conspiring to defraud the United States by using stolen personal information, including names, Social Security numbers, and dates of birth, to file fraudulent income tax returns which claimed false income tax refunds. Five of the six defendants were also convicted of identity theft for their part in stealing the personal information. The investigation was conducted by the IRS– Criminal Investigation. The Moorhead, MN Police Department and the U.S. Secret Service also aided in the investigation. Assistant U.S. Attorney John E. Haak prosecuted the case.
Shuman Center Youth Care Worker Sentenced to Probation for Federal MisdemeanorRead the Press Release
PITTSBURGH - A former resident of Pittsburgh, Pennsylvania was sentenced yesterday in federal court to one year probation on a misdemeanor charge of deprivation of civil rights under color of law, to which the defendant pleaded guilty earlier this year, United States Attorney David J. Hickton announced today.
United States Magistrate Judge Lisa Pupo Lenihan imposed the sentence on McArthur Mosley, 28, of Pittsburgh, Pa.
According to information presented to the court, on or about April 14, 2014, Mosley, while acting under color of law as a youth care worker with the Shuman Juvenile Detention Center, willfully deprived the victim of the right, secured and protected by the United States Constitution, not to be subjected to excessive force amounting to punishment by someone acting under color of law.
Assistant United States Attorneys Cindy K. Chung and Shaun Sweeney prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation for conducting the investigation that led to the successful prosecution of McArthur Mosley.
Shreveport man sentenced to 17 years in prison for possessing a firearm after felony convictionsRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Shreveport man was sentenced Wednesday to 210 months in prison as an Armed Career Offender for possessing a firearm after being convicted of multiple felonies.
Ronnie Eugene Bishop, 39, of Shreveport, was sentenced by U.S. District Judge Elizabeth E. Foote on two counts of possessing a firearm after being convicted of a felony. He was also sentenced to five years of supervised release. According to evidence presented at the December 9, 2014, guilty plea, Bishop pawned a 12-gauge shotgun on December 23, 2013, and a .270 caliber rifle on December 27, 2013, at the same pawn shop in Bossier City, La. Both firearms had been reported stolen by the owner. Prior to pawning the firearms, Bishop had multiple felony convictions and was sentenced as an Armed Career Offender. The mandatory minimum sentence for an Armed Career Offender is 15 years in prison.
To be found an Armed Career Offender under federal law, a defendant must have three previous convictions that are either a violent felony or a serious drug offense, or both, committed on occasions different from one another.A serious drug offense can be an offense under federal or state law if it involves the manufacturing, distributing or possessing with intent to manufacture or distribute a controlled substance for which a maximum term of imprisonment of 10 years or more is prescribed by law.
“This defendant had multiple felony convictions and was prohibited by law from possessing a firearm; yet, he not only continued to possess them, but he was pawning stolen firearms,” Finley stated. “The safety and security of the community is our highest priority. This case is a result of a collaborative effort of federal and state agencies working together. I want to thank the ATF, Louisiana Department of Corrections, Probation and Parole Division, and the Assistant U.S. Attorney who worked on this case.”
The ATF and the Louisiana Department of Corrections Probation and Parole Division conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. prosecuted the case as part of Project Safe Neighborhoods Program, which is a Department of Justice initiative with state and local authorities designed to reduce the possession of firearms by prohibited persons and the use of firearms to commit crimes.
Sacramento Attorney Pleads Guilty to Tax EvasionRead the Press Release
SACRAMENTO, Calif. — James Stewart Richards, 69, of West Sacramento, pleaded guilty today to tax evasion, United States Attorney Benjamin B. Wagner announced.
According to court documents, between 1994 and 2003, Richards, a member of the California and Hawaii bar organizations, owed federal income taxes totaling over $170,000, which he did not pay. Instead, he took steps to evade payment of some or all of the taxes he owed. He filed a false “Offer in Compromise” to the IRS that omitted bank accounts and six rental properties. He used a nominee bank account for his own assets. When alerted by the bank that the IRS was making inquiries about the nominee account, Richards called the bank and asked that they provide no records to the IRS. He also withdrew $100,000 from the account in cashier’s checks. Richards purchased a yacht that he registered and titled in nominee’s name in order to conceal the asset. Also, he made false statements about his assets to a bankruptcy court and to the IRS.
This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Audrey B. Hemesath and Nirav Desai are prosecuting the case.
Richards is scheduled to be sentenced on September 10, 2015, by United States District Judge Morrison C. England Jr. Richards faces a maximum penalty of five years in prison and a $100,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
SFPD Officer Sentenced to 12 Months for Role in Conspiracy to Provide Drugs to InformantsRead the Press Release
SAN FRANCISCO– Former San Francisco Police Officer Reynaldo Vargas was sentenced today to 12 months in prison for his participation in a conspiracy to steal money and property and provide illegal drugs to informants, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
Vargas, 46, was indicted by a federal grand jury on February 25, 2014. He pleaded guilty on October 21, 2014, to conspiracy to distribute controlled substances, in violation of 21 U.S.C. § 846; distribution of marijuana, in violation of 21 U.S.C. § 84; conspiracy to commit theft concerning a federally funded program, in violation of 18 U.S.C. § 666(a); and theft concerning a federally funded program, in violation of 18 U.S.C. § 666(a). According to the plea agreement, Vargas admitted that he and two other SFPD officers, Ian Furminger and Edmond Robles, repeatedly stole money and property during searches and arrests. Vargas also admitted the officers kept the stolen items for themselves and that he provided drugs seized by the SFPD to informants.
Vargas testified at the trial of Furminger and Robles, who were convicted by a jury in San Francisco on December 15, 2014. After their convictions, Furminger was sentenced to a term of 41 months in prison and Robles was sentenced to a term of 39 months.
Vargas’s 12-month sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge. Judge Breyer also sentenced Vargas to a three year term of supervised release. Vargas was given two months to voluntarily surrender to begin serving his sentence.
In sentencing Vargas, Judge Breyer described Vargas’s testimony as “crucial, essential, to the successful prosecution of the case.” Judge Breyer described the testimony as “genuine” and lauded Vargas for truly accepting responsibility and making a concerted effort to transform his life for the better. The Court acknowledged the difficulty of testifying as a police officer against other police officers and said that he “hope[d] that other police officers understand that when they see this type of activity by colleagues . . . it hurts them, as well as the police officers who are involved.”
The investigation that led to Vargas’s plea and cooperation began with the public release of a videotape showing SFPD officers entering a single room occupancy hotel room without a warrant. The investigation, which was conducted by the FBI and SFPD Internal Affairs Division, grew to include, among other things, allegations that Vargas, Robles, and Furminger engaged in the theft of tens of thousands of dollars and valuable property during the course of performing their official duties. The officers also filed false police reports that did not identify the money and property they had stolen.
“The misconduct of the police officers prosecuted in this case damaged the credibility of good police officers everywhere,” said United States Attorney Melinda Haag. “Without the trust of the community, police officers are not able to safely and effectively do their jobs,” she said.
At Vargas’s sentencing, Judge Breyer said that this is one of the most serious cases he has seen as a district judge. He described why it is critical that police officers act with honesty and integrity:
Police officers go out every day putting their lives at risk, and you have done that repeatedly. And whether they come back at night, whether they can perform their duties, in large part, depends on whether the public accepts them as guardians of their safety. You are the agents of all of us. You are the people out on the street representing every judge, every prosecutor, every defense lawyer, and everybody else who lives in this city, including those people who are so vulnerable that they have fallen susceptible to disease, to addiction, to a way of crime. You represent them. . . . And the success of your task, of all of our tasks, is that society accepts what we do, they think that the system is fair, they think that the prosecutor, the defense lawyer, the judge, the police officer, will be fair in administering the law. . . . [A]nything that detracts from the credibility of the people who are involved in the justice system, jeopardizes the justice system . . . . And unless we have a system that is credible, we are no different, no different at all, from any totalitarian state in which police, prosecutors, judges, lawyers, act capriciously, act without due process.
This case was prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office for the Northern District of California. It is the result of an investigation conducted by the FBI’s San Francisco Division, with the assistance of the SFPD Internal Affairs Division.
Philadelphia Woman Sentenced for Fraud on FEMARead the Press Release
Celeste Palmer, 54, of Philadelphia, PA, was sentenced today to a day in custody followed by three years supervised release, with the first four months of supervised release to be served in a halfway house, and the next six months to be served on house arrest, for scheming to receive disaster relief assistance from the Federal Emergency Management Agency (FEMA), when she was not entitled to receive those benefits. Palmer pleaded guilty to one count of wire fraud on December 1, 2014.
After Hurricane Irene came through the Philadelphia area on August 26, 2011, Palmer made fraudulent claims to FEMA for disaster assistance, which Palmer supported with falsified rent receipts and leases. Palmer’s scheme led FEMA to award her disaster rental assistance in the total amount of $14,487, to which Palmer knew she was not entitled.
The case was investigated by the Department of Homeland Security’s Office of the Inspector General and was prosecuted by Assistant United States Attorney Mary E. Crawley.
Paul Hendler Imprisoned for Series of FraudsRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Paul Hendler, 43, of Taftsville, was sentenced today in United States District Court in Brattleboro to 27 months of imprisonment following his guilty plea to federal fraud charges. United States District Court Judge J. Garvan Murtha ordered that Hendler serve three years of supervised release following completion of his prison term and pay restitution in the amount of $550,000. The court ordered Hendler to surrender to the Bureau of Prisons on July 7 to begin serving his sentence.
In January 2012, a federal grand jury in Rutland returned a 14-count superseding indictment charging Hendler with mail and wire fraud, interstate transportation of stolen money, forgery and engaging in monetary transactions involving more than $10,000 of criminally derived property. The indictment alleged that, between 2005 and 2010, Hendler schemed to defraud two Vermont businesses he helped found, as well as a New York doctor whom he solicited to invest in one of the companies. According to the indictment, in the early 2000s, Hendler founded JavaPop, Inc, a Woodstock company that manufactured carbonated coffee-based drinks. The indictment accused Hendler of defrauding JavaPop of more than $150,000 by misappropriating for his own benefit, in 2007, a $99,000 company line of credit at Bank of America. It also charged him with making off with $56,000 in JavaPop funds that Hendler received in 2008 after selling four company vehicles.
Another part of the indictment alleged that Hendler defrauded a New York City doctor by inducing him to make a $140,000 investment in JavaPop under false pretenses in 2005. According to the indictment, Hendler never turned the money over to JavaPop but instead used it for himself. $56,000 of the doctor’s money was used to make a downpayment on a house Hendler purchased in Woodstock.
The indictment also charged Hendler with defrauding Green Mountain Digital of Woodstock, another business Hendler helped found in 2007-08. According to the indictment, Hendler submitted falsified and fraudulent documentation to Green Mountain Digital which caused the company to reimburse him for expenses he did not actually incur. It also charged him with making off with $25,000 paid over to him by another business partner, and embezzling $33,000 from the Blueberry Hill Inn in Goshen by forging the signature of the Inn's owner on a series of checks Hendler issued to himself.
As part of the sentence, the court ordered Hendler to pay full restitution to the victims named in the indictment, as well as to the victims of several other frauds Hendler committed after the superseding indictment was returned.
This case was investigated by the Internal Revenue Service and the Woodstock Police Department.
Hendler is represented by Brad Stetler. The prosecutor is Assistant
U.S. Attorney Gregory Waples.Parkersburg man sentenced to federal prison for illegal firearm possessionRead the Press Release
CHARLESTON, W.Va. – A Parkersburg man who was shot during his arrest in July of 2014 was sentenced today to seven years in federal prison, U.S. Attorney Booth Goodwin announced. Paul Christopher Johnson, 43, of Parkersburg, West Virginia previously pleaded guilty in February of 2015 to being a felon in possession of a firearm. On July 15, 2014, officers of the Parkersburg Narcotics and Violent Crimes Task Force attempted to serve Johnson with an arrest warrant as he was in a parked vehicle on Bird Street in Parkersburg. Johnson got out of his vehicle, pointed a loaded Taurus .45 caliber pistol at police and told them he was “not going back [to prison].” As officers attempted to convince Johnson to put down the weapon and surrender, he got back into the vehicle and drove away. Police caught up with him and stopped him at the corner of Plum Street and Washington Avenue. Johnson again got out of the vehicle and pointed his pistol at the responding officers. Johnson refused to obey commands to drop the weapon and moved toward the officers while waving the gun. Officers fired and wounded Johnson. According to his criminal record, Johnson had been previously convicted of the felony offenses of aggravated robbery and third offense shoplifting. On July 15, 2014, police were attempting to arrest Johnson for a drug trafficking offense.
Because the Parkersburg Police Department and the Wood County Sheriff’s Department were involved in the arrest, this investigation was conducted by the West Virginia State Police. Assistant U.S. Attorney Joshua Hanks handled the prosecution. The sentence was imposed by United States District Judge John T. Copenhaver, Jr.
The case is part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Owner of Parsippany-Based Diagnostic Testing FacilityRead the Press Release
NEWARK, N.J. - A Morris County, New Jersey, man was sentenced today to 12 months in prison for his role in a scheme to bill for diagnostic testing services he did not render and to enable a cardiologist to evade the Medicare program’s pre-payment review of his claims, U.S. Attorney Paul J. Fishman announced.
Vijay Patel, 57, of Parsippany, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of health care fraud. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2009 to the present, Patel has been the owner of a diagnostic testing facility in Parsippany called Mobile Diagnostic Testing of NJ LLC (Mobile Diagnostic). He was also a participant in Medicare.
Patel had an associate identified as “S.A.,” who was a cardiologist and also a participant in the Medicare program. From around 2009 through 2012, S.A.’s Medicare contractor had placed him on so-called “pre-payment review,” which was initiated to ensure that S.A. was submitting claims within established rules and regulations and consistent with appropriate medical decision-making, and which required S.A. to submit medical and other documentation to support the services being billed to Medicare. Under pre-payment review, claims for reimbursement that did not have the documentation necessary to support the services being billed are rejected by the Medicare contractor.
From November 2009 through October 2012, Patel and S.A. engaged in a scheme to defraud Medicare whereby S.A. paid Patel substantial sums of money to enable S.A. to evade Medicare’s prepayment review. Patel admitted in court that he submitted claims to Medicare for diagnostic testing services that S.A. had performed as if Mobile Diagnostic had performed the services instead of S.A. Once Medicare paid Patel and Mobile Diagnostic for diagnostic testing services that S.A. had actually provided, Patel then transferred a portion of the payment to S.A. and kept a substantial portion for himself.
In addition to the prison term, Judge Salas sentenced Patel to two years of supervised release.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, for the investigation leading today’s sentencing.
The government is represented by Assistant U.S. Attorney Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
Orlando Woman Charged in Multi-Count Indictment for Fraudulent SchemesRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Lashunda Veneice Redd (35, Orlando) with one count of theft of government money, two counts of aggravated identity theft, and nine counts of making, uttering, and possessing counterfeit and forged securities. If convicted, she faces a maximum penalty of 10 years in federal prison for the theft of government money, a mandatory minimum of 2 years’ imprisonment for each aggravated identity theft charge, and a maximum of 10 years in prison for the counterfeit and forged securities charges.
According to court documents, between December 2014 and April 2015, across at least four Central Florida counties, Redd stole money from the Social Security Administration. Following up on a lead from the Bureau of Fiscal Services, investigators learned that Redd’s mother had requested several replacement checks for her Social Security benefits. These checks were then altered to be made payable to different individuals, including Redd, for larger dollar amounts. On January 22, 2015, Redd cashed a check originally made payable to her mother that had been altered to name her (Redd) as the payee. The amount of money payable on the check had also been altered from $640 to $1,940, resulting in a loss of $1,300 to the government.
On December 3 and 24, 2014, Redd unlawfully used two other individuals’ means of identification to commit bank fraud in relation to her fraudulently altered United States Treasury check scheme.
The investigation also revealed that Redd had made, uttered, and possessed counterfeit and forged checks, which she had used at Publix stores in Orange, Brevard, and Seminole counties from January to March 2015, resulting in a loss of thousands of dollars to Publix.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Social Security Administration, Office of the Inspector General, and the Department of Treasury, Office of the Inspector General. It will be prosecuted by Assistant United States Attorney Joseph M. Schuster.
Officials from the U.S., Canada and Mexico Participate in Trilateral Meeting in Mexico City to Discuss Antitrust EnforcementRead the Press Release
The heads of the antitrust agencies of the United States, Canada and Mexico met today in Mexico City to discuss their ongoing work to ensure effective antitrust enforcement cooperation in our increasingly interconnected markets.
The meetings were held among Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division, Chairwoman Edith Ramirez of the Federal Trade Commission, Canadian Commissioner of Competition John Pecman and President Alejandra Palacios Prieto of the Mexican Federal Economic Competition Commission.
The discussions covered a wide range of topics, including implementation of Mexico’s new competition law, enforcement cooperation among the three countries’ antitrust agencies, approaches to innovative and disruptive technologies and current enforcement priorities.
“We value our close relationships with our antitrust partners north and south of the border,” said Assistant Attorney General Baer. “Our shared enforcement interests and tradition of cooperating when investigating mergers and cartels ensure that North American markets remain competitive. These annual ‘trilateral’ meetings give us a chance to review and improve our enforcement cooperation and to engage in policy dialogue on emerging topics of common interest.”
“These meetings are an important element in building and maintaining the strong relationships that help us meet enforcement and policy challenges in all three countries,” said Chairwoman Ramirez. “The need to cooperate across our borders increases every year, and we are working together to meet that challenge.”
The four agency heads also spoke at a public conference organized by the Mexican agency, which included remarks by Assistant Attorney General Baer on the importance of anti-cartel enforcement and the role of criminal sanctions in the United States.
The meetings build on the foundations laid by the 1995 antitrust cooperation agreement between the United States and Canada, the 2000 agreement between the United States and Mexico and the 2001 agreement between Canada and Mexico. The agreements commit the antitrust agencies to cooperate and coordinate with each other to make their antitrust policies and enforcement as consistent and effective as possible.
Oakland Woman Sentenced to Three Years for Attempting to Smuggle Cocaine Through Airport SecurityRead the Press Release
OAKLAND – Cheryl Denise Frazier was sentenced today to three years in prison for possession with intent to distribute cocaine, announced United States Attorney Melinda Haag and Drug Enforcement Administration Acting Special Agent in Charge Bruce Balzano.
Frazier, 48, of Oakland, pleaded guilty on January 23, 2015, to possessing cocaine with intent to distribute. According to her plea agreement, Frazier admitted that on August 20, 2014, she entered the Oakland International Airport in Oakland, Calif., with 600 grams of cocaine hidden inside her clothing. She further admitted that she entered the airport with the cocaine concealed on her body for the purpose of smuggling the drugs onto a commercial flight for later distribution to another person. Frazier was charged by information on January 15, 2015, for possession with intent to distribute cocaine in violation of 21 U.S.C. § 841(a)(1).
The sentence was handed down by the Honorable James Donato, U.S. District Judge. The defendant will begin serving the sentence immediately and has been in custody since her arrest in August 2014.
Assistant U.S. Attorney Garth Hire is prosecuting the case with the assistance of Melissa Dorton. The prosecution is the result of an investigation by the U.S. Drug Enforcement Administration and the Alameda County Sheriff’s Office.
O.C. Man Who Hawked Bogus Investments in Treatments for Common Ailments Sentenced to over 12 Years in Federal PrisonRead the Press Release
SANTA ANA, California – An Irvine man who ran a fraud scheme that raised well over $3 million from victims who thought they were investing in products that would treat childhood obesity and Type II diabetes was sentenced today to 151 months in federal prison.
Charles M. “Chuck” Davis, 57, was sentenced by United States District Judge Andrew Guilford. In addition to the prison term, Judge Guilford ordered Davis to pay $3,468,934 in restitution to 66 victims.
Following a seven-day last June, a federal jury found Davis guilty of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering.
The evidence presented during the trial showed that Davis operated an investment scam involving the Newport Beach-based LifeRight Holdings, Inc. According to promises made by Davis, LifeRight was going to develop and use infomercials to market a product to combat child obesity. Davis promised investors a 15 percent return in only 13 months, as well as royalties on products sold and an option to convert the investment into shares of LifeRight stock when the company began selling product. Davis took in approximately $2.5 million from 45 investors, who lost all of their money.
The second scheme involved a company called DT2, which purportedly offered a product to treat Type II diabetes. From 2009 until Davis was jailed in 2011, Davis raised approximately $900,000 from about 21 DT2 investors. Similar to the LifeRight scam, Davis diverted the investor funds to other companies and, instead of spending the money on DT2 business, Davis used the money to pay for high-end restaurants, expenses sustained by several girlfriends, spa treatments, cash withdrawals, and his civil and criminal defense attorneys. The victims in the DT2 also lost all of their money.
In both schemes, Davis never had a real product.
Davis has been in custody since September 2011, when his bond in this case was revoked after a judge found he was improperly soliciting money in the DT2 scheme.
The case against Davis was investigated by the Federal Bureau of Investigation.
Release No. 15-049
New York Man Arrested for Allegedly Defrauding Investors Out of More Than $2 Million for Crossfit Business VenturesRead the Press Release
NEWARK, N.J. - A New York man involved in several CrossFit training businesses was arrested this morning by the FBI in connection with a scheme to defraud various potential investors, lenders and business partners out of over $2 million, U.S. Attorney Paul J. Fishman announced.
Joshua Bryce Newman, 35, is charged by criminal complaint with two counts of wire fraud. Newman is scheduled to make his initial appearance this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the complaint:
Newman was a self-styled entrepreneur who engaged in a variety of business ventures, including venture capital work, a film production company and businesses that offer CrossFit training, a popular strength and conditioning program typically run in facilities known as “boxes.” Newman found himself facing mounting legal and financial troubles largely as a result of judgments and liens filed against him and his film production company, Cyan Pictures, after its project about the New York Yankees failed. For example, a civil lawsuit filed against Newman alleges that he and others lied about the amount of money they raised for the project and that they had diverted funds meant for the film into their personal accounts.
The criminal complaint alleges that from 2012 through April 2015, Newman made material misrepresentations to solicit investments for CrossFit business enterprises and used the funds for personal expenses, including paying back others who invested in his prior projects. Using doctored or bogus documentation, Newman lulled his victims into believing that their investment money was safe or that he was in a position to repay their loans. The false documents included doctored operating agreements, false statements of ownership percentages held by various individuals and bogus Schedule K-1s purporting to show the amount of annual partnership gains or losses reported to the IRS. Newman also deceived his potential partners, purported investors and lenders into believing that one of his CrossFit ventures had raised millions of dollars in funding.
When investors and lenders raised concerns about Newman’s sincerity or threatened legal action to recoup their funds, he typically gave them false assurances or agreed to return the funds. In reality, he often had no funds to return and made various excuses, including blaming his lack of payment on wire transfers delays. He also stalled for time by giving his victims checks drawn on accounts with insufficient funds and even sent a picture of a purported wire transfer order for $165,000 that never existed.
The complaint alleges that even after his partners removed him from one of the CrossFit companies because of suspected fraudulent activity and willful misconduct, Newman continued to solicit investments on behalf of the company that he used for personal expenses.
The investigation to date has revealed that Newman defrauded numerous investors, creditors and potential partners out of more than $2 million.
Newman faces a maximum potential sentence of 20 years in prison on each count, a fine of $250,000 or twice the gain or loss from the offense and a mandatory restitution order in the full amount of the loss to the victims.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s charges.
The charges in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Paul A. Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark.
New Orleans Man Sentenced for Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAMES CONRAD, JR., age 50, New Orleans, was sentenced today to one year and one day imprisonment for the theft of $247,800 in government funds.
U.S. District Judge Nannette Jolivette Brown sentenced CONRAD one year and one day imprisonment, to be followed by three years of supervised release. CONRAD was also ordered to pay restitution in the amount of $192,245.12.
CONRAD had pled guilty to stealing $196,690.43 from the United States Office of Personnel Management and $51,110 from Social Security Administration over the course of 15 years. CONRAD jointly held a bank account with his aunt, who died in 1998. Unaware of CONRAD’S aunt’s death, the two agencies continued wiring survivor and retirement benefits for her to the account. CONRAD, knowing the payments did not belong to him, received the benefits until 2013 when the agencies learned that his aunt had died. After the crime was discovered, the government recovered $55,555.31 from the bank account.
U.S. Attorney Polite praised the work of the Office of Personnel Management - Office of Inspector General and the Social Security Administration - Office of Inspector General in investigating this matter. Assistant U.S. Attorney Chandra Menon was in charge of this prosecution.
New Orleans C.P.A. Sentenced to 30 Months in Prison for Embezzlement SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that PAUL E. GARDNER, age 57, of New Orleans, was sentenced today for an embezzlement scheme which took place during GARDNER’s employment with Clovelly Oil Co., L.L.C. (“Clovelly Oil”).
U.S. District Judge Nannette Jolivette Brown sentenced GARDNER to thirty months imprisonment, followed by two years supervised release. In addition to the term of imprisonment, GARDNER was ordered to pay restitution in the amount of $1,798,000.
According to court documents, GARDNER operated an accounting, consulting, and tax preparation business under the name Paul E. Gardner, C.P.A. for the past thirty years. In October 2007, Clovelly Oil hired GARDNER as a part-time bookkeeper. GARDNER was responsible for recording the receipts and disbursements for Clovelly and preparing the royalty checks for Clovelly’s more than two-hundred owners. In addition, GARDNER handled the bi-weekly payroll for all of Clovelly’s employees and he was responsible for paying himself.
Beginning in August 2010, and continuing until his termination in May 2014, GARDNER embezzled $1,798,000 from Clovelly Oil by manipulating the bi-weekly payroll records of Clovelly. Every two weeks, GARDNER logged into Clovelly’s on-line bank accounting system using his username and password given to him so he could prepare Clovelly’s payroll and increased his bi-weekly compensation by sometimes as much as $20,000. GARDNER diverted the illegally obtained funds into bank accounts held by the defendant. According to the Bill of Information, GARDNER used the embezzled funds to satisfy gambling debts incurred at a New Orleans casino.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. The prosecution of this case is being handled by Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.
Monroe County Man Enters Guilty Plea to Theft of MailRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Monroe County man pleaded guilty today in United States District Court in Scranton, before Senior United States District Judge Edwin M. Kosik, to the charge of theft of mail.
According to United States Attorney Peter Smith, Jacob Tanner, age 29, of East Stroudsburg, Monroe County, admitted to stealing mail in the Stroudsburg area in 2014. The thefts were discovered after a number of Stroudsburg residents complained about missing, torn or discarded mail. Tanner was observed on surveillance video removing mail from a mailbox outside a residence in Stroudsburg. Postal Authorities later apprehended Tanner in possession of stolen mail in December 2014.
The case was investigated by the United States Postal Service, Office of Postal Inspection Services, and is being prosecuted by Assistant United States Attorney Robert J. O’Hara.
Anyone who believes they may be a victim or have further information should contact Postal Inspector David Heinke, United States Postal Service, at 877-876-2455
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 5 years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Manhattan U.S. Attorney Announces Consent Decree Resolving Westchester County’s ViolationsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Judith Enck, Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that Westchester County (“Westchester” or the “County”) has entered into a consent decree with the United States to resolve the civil lawsuit filed in August 2013, alleging that since April 2012 the County has failed to operate its Water District No. 1 in compliance with regulations designed to protect the public from Cryptosporidium, a parasite that can cause severe gastrointestinal illness. Water District No. 1 supplies water to residents of Scarsdale, White Plains, Mount Vernon, and Yonkers. Since April 2012, a significant portion of the drinking water distributed by Water District No. 1 has not been properly treated.
U.S. Attorney Preet Bharara stated: “For years, Westchester County has flouted its obligations under the Safe Drinking Water Act by failing to ensure that drinking water supplied by Westchester Water District No. 1 was properly treated for Cryptosporidium. Today’s consent decree ensures that Westchester will finally come into compliance with EPA standards, and will pay a significant civil penalty for its years of noncompliance.”
EPA Regional Administrator Enck stated: “The people of Westchester deserve high quality drinking water. These long-overdue drinking water treatment upgrades will bring Westchester into compliance with the Safe Drinking Water Act, and will protect the people of Mount Vernon, Scarsdale, White Plains and Yonkers from water-borne diseases.”
According to the allegations of the complaint:
Since April 2012, Westchester, through its Water District No. 1, has failed to comply with the Long Term 2 Enhanced Surface Water Treatment Rule (the “Enhanced Water Treatment Rule”) by failing to upgrade its water treatment facilities or capabilities to properly treat its drinking water for Cryptosporidium. Public water systems that were required to comply with the Enhanced Water Treatment Rule had more than six years from the enactment of the rule to achieve compliance. The Enhanced Water Treatment Rule specifically targets public water systems with higher potential risks of Cryptosporidium contamination; it requires such public water systems to treat unfiltered surface water for this parasite. Cryptosporidium contamination can lead to cryptosporidiosis, a potentially fatal gastrointestinal illness in humans for which there is no known treatment. The illness poses greater risks to people with weakened immune systems, such as young children, pregnant women, and the elderly.
Previously in this litigation, the U.S. District Court in White Plains ruled that Water District No. 1 is a public water system and that Water District No. 1 was subject to an April 1, 2012, deadline to comply with the treatment requirements in the Enhanced Water Treatment Rule.
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In the consent decree filed today in White Plains federal court, Westchester admits, acknowledges, and accepts responsibility for the following:
- Westchester operates Water District No. 1.
- Westchester, “as operator of Water District No. 1, failed to ensure that Water District No. 1 implemented the water treatment measures of the Enhanced Water Treatment Rule.”
- The Enhanced Water Treatment Rule “required certain public water systems to implement specific water treatment measures” by April 1, 2012.
- “Water District No. 1 did not implement the water treatment measures of the Enhanced Water Treatment Rule by April 1, 2012, and to date has not implemented the water treatment measures of the Enhanced Water Treatment Rule.”
Pursuant to the consent decree filed today, Westchester will make capital improvements within Water District No. 1 to bring it into compliance with the Enhanced Water Treatment Rule. These capital improvements will cost approximately $10 million. While the capital improvements are being completed, the consent decree requires Westchester to undertake interim measures, including to reduce the amount of noncompliant water supplied by Water District No. 1 and enhanced monitoring of source water from the Kensico Reservoir for Cryptosporidium. Westchester will make the enhanced source monitoring results available to the public on its website.
In addition to this injunctive relief, Westchester will pay a civil penalty of $1,108,771, the largest civil penalty ever imposed under the Safe Drinking Water Act on the operator of a public water system. Westchester will be subject to substantial additional penalties if it fails to adhere to the deadlines in the consent decree.
Finally, Westchester has agreed to spend an additional $691,229 on supplemental environmental projects for the benefit of the residents of Water District No. 1. Westchester has committed to expend these funds (i) to increase the number of days during which unused pharmaceuticals and hazardous household chemicals will be accepted from residents of Water District No. 1 at Westchester’s Household Materials Recovery Facility or at other designated sites and (ii) to purchase at least $100,000 worth of 55-gallon rain barrels for residential collection and storage of roof rainwater runoff, to be distributed to residents of Water District No. 1.
The consent decree will be lodged with the District Court for a period of at least 30 days, and notice of the consent decree will be published in the Federal Register before the consent decree is submitted for the Court’s approval. This will afford members of the public the opportunity to submit comments on the consent decree to the Department of Justice.
This case is being handled by the Office’s Environmental Protection Unit. Assistant United States Attorneys Andrew E. Krause and Cristine Irvin Phillips are in charge of the case.
Logan man pleads guilty to being a convicted felon in possession of firearmsRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Gary Brian Adams, 35, of Logan, West Virginia pleaded guilty today in federal court in Charleston to being a convicted felon in possession of three firearms. In May of 2013, officers with the West Virginia State Police and the Logan County Sheriff’s Department responded to a home near Chapmanville and recovered three firearms that Adams had stored in the home. Adams has two prior felony drug trafficking convictions from Logan County, so he is prohibited by federal law from possessing firearms. Adams faces up to 10 years’ imprisonment when he is sentenced on August 27, 2015.
This case was investigated by the West Virginia State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Lake Charles store owners plead guilty to selling counterfeit merchandiseRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that two Lake Charles retail store owners pleaded guilty to selling more than 800 counterfeit items.
Kayed Masoud, 31, and Ahmad Alnaasan, 42, both of Lake Charles, entered conditional guilty pleas to one count of trademark infringement to U.S. Magistrate Judge Kathleen Kay. The pleas will become final when accepted by U.S. District Judge Patricia Minaldi. According to evidence presented at the guilty plea, members of the Sulphur Police Department went to K&A Golden Fashions to recover stolen property and noticed a large number of counterfeit items such as brand name purses and shoes. After an investigation, Homeland Security Investigation agents executed a search warrant on September 26, 2013 and found 866 counterfeit items with branding such as “Nike,” “Coach” and “Polo.” The value of the items is estimated to be between $30,000 and $60,000.
The defendants face up to 10 years in prison, two to three years of supervised release, and a $2 million fine. A sentencing date of August 27, 2015 was set.
Homeland Security Investigations and the Sulphur Police Department conducted the investigation. Assistant U.S. Attorney Howard C. Parker is prosecuting the case.
Justice Department Finds That Hinds County, Mississippi, Fails to Protect Prisoners from Harm and Detains Prisoners Beyond Court-Ordered Release DatesRead the Press Release
Today, the Justice Department’s Civil Rights Division announced that it has completed its investigation of the Hinds County Adult Detention Center and the Jackson City Detention Center and issued a letter of findings that determined that Hinds County, Mississippi, violates prisoners’ constitutional rights at both jail facilities. The department found that the jail facilities fail to protect prisoners from violence by other prisoners and from improper use of force by staff. The department also found that the jail facilities detain prisoners beyond court-ordered release dates.
Systemic deficiencies contribute to serious harm and risk of harm at the jail facilities. In the past three years, at least three major riots occurred, resulting in one prisoner’s death and the closing of entire housing units. The department also documented rampant prisoner-on-prisoner violence, including an additional prisoner-on-prisoner homicide and a remarkable volume of contraband. The department found systemic deficiencies in staffing; policies and training; security and classification procedures; physical plant and maintenance; contraband control; and administrative review and other accountability measures to prevent, detect and investigate improper uses of force.
The department found that in an effort to address staffing and security concerns, Hinds County has locked down and otherwise improperly housed prisoners—severely limiting or eliminating access to treatment, education, exercise and visitation. The department noted that juvenile prisoners and prisoners with mental illness are acutely harmed by the lockdowns. One prisoner, who could neither speak nor hear, had been living in a cramped, dark booking cell with a reeking toilet for nearly three years.
The department also found that inadequate staffing and training, a backlog in record filing, and a lack of centralized information have resulted in prisoners being held beyond court-ordered release dates. The delays, most of which were between one and ten days, arose in a variety of circumstances, including after judges ordered prisoners released for lack of probable cause, for lack of prosecution, after adjudication of a guilty plea, and after requisite contempt fines had been paid. The longest period of over-detention—70 days—was for a 13-year-old middle school student, who was held a total of 173 days at the jail facilities without an indictment. The department also voiced concern that delays in indicting prisoners, obtaining forensic mental health review, and bringing cases to trial may lead to unnecessary and prolonged incarceration, draining much-needed resources from the jail facilities.
“Hinds County Adult Detention Center and the Jackson City Detention Center are facilities in crisis,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Making these facilities safe will require broad systemic reforms and a local commitment to improve staffing and operations. The jail facilities play an integral part in the county’s criminal justice system, and it will take cooperation between everyone involved to make the changes needed. The Civil Rights Division looks forward to working with county officials to bring these facilities into compliance with constitutional standards.”
“The Hinds County detention facilities have an obligation to provide conditions of confinement that do not offend the Constitution,” said U.S. Attorney Gregory K. Davis of the Southern District of Mississippi. “This office will work with the Civil Rights Division of the Department of Justice to address and remedy the violations revealed by the investigation.”
The department’s investigation involved in-depth review and analysis of documents, including policies and procedures, incident reports, grievances, legal complaints and grand jury inspection reports. The department also interviewed jail administrators, staff, prisoners, county officials and various criminal justice stakeholders.
The Civil Rights of Institutionalized Persons Act (CRIPA) authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional rights of persons confined in a jail, prison or other correctional facility. The Attorney General may initiate a lawsuit pursuant to CRIPA forty-nine days after issuance of the findings letter to correct deficiencies identified in the letter if county officials have not satisfactorily addressed the concerns.
The department commends county officials and jail facilities staff for their cooperation and receptivity to the department’s concerns and looks forward to continuing to work with them in a collaborative manner to resolve the department’s findings expeditiously and under mutually agreeable terms.
For more information on the Civil Rights Division, please visit www.justice.gov/crt.
Houma Interpreter Indicted for Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that TRINA MARIE BOURG, age 45, of Houma, was charged today in a five-count Superseding Indictment for crimes involving the solicitation of illegal payments from undocumented clients and their family members.
According to court records, on May 7, 2014, the U.S. Department of Homeland Security-Homeland Security Investigations (“HSI”) received information that BOURG, who worked as a Spanish language interpreter contract employee for the Office of the District Defender for the 32nd Judicial District for Terrebonne Parish, was soliciting illegal payments from undocumented clients. Unknown to the clients’ attorneys, BOURG represented to the clients that she would use the money she received to bribe United States Immigration Officials in order to remove the immigration detainers or federal immigration charges from the clients’ criminal or administrative cases.
In 2011, and again in 2014, BOURG solicited illegal payments totaling more than $5,000 from Client “A” and his family members. The Indictment alleges BOURG employed threats and intimidation to coerce the family members into paying BOURG.
The Indictment also alleges that for a payment of $12,000 to $20,000, BOURG offered to marry one of her clients in order to improve his immigration status.
It is important to note that no federal immigration officials have been implicated in this investigation, nor is it believed that any federal officials were complicit in BOURG’s crimes. BOURG was originally indicted in August 2014.
If convicted, BOURG faces a term of incarceration of up to twenty years and a fine of $250,000 per count. U.S. District Judge Susie Morgan set a trial date on July 27, 2015, before United States District Judge Susie Morgan.
U. S. Attorney Polite reiterated that the Superseding Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the U. S. Department of Homeland Security-HSI (McAllen, TX and Houma, LA offices), the Louisiana State Police-Criminal Investigation Division, and the Terrebonne Parish Sheriff’s Office in investigating this matter. The prosecution of this case is being handled by Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba and Assistant U.S. Attorney Marquest Meeks.
Trina Marie Bourg Superseding Indictment.pdf (126.31 KB)
Herrin Man Sentenced on Heroin OffenseRead the Press Release
On May 15, 2015, Adam M. Calvert, 31, Herrin, Ill., was sentenced for his involvement in a heroin violation, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Calvert, who had previously pled guilty to a one-count indictment charging conspiracy to distribute heroin, was sentenced to 100 months in federal prison, 3 years’ supervised release, and fined $200.00. The offense occurred between 2012 and January 2014, in Williamson and Jackson Counties. Evidence at the plea and sentencing hearings established that Calvert was involved with others in the distribution of heroin. On multiple occasions, Calvert sold heroin to a confidential source working for law enforcement. During the execution of a July 2013 search warrant at Calvert’s Herrin residence, officers located syringes, pre-recorded buy money, a digital scale, and numerous other drug-related items. During a later January 2014 arrest, officers located heroin in Calvert’s sock. At that time, officers again located digital scales, used syringes, and other drug-related items at Calvert’s residence. At sentencing, the district court found Calvert responsible for more than 1.2 kilograms of heroin.
The investigation was conducted by the Southern Illinois Enforcement and the Drug Enforcement Administration. The Williamson County State’s Attorney’s Office assisted in the investigation.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Harrison County, WV man convicted of unlawful possession of firearmsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Darius Henning, 24, of Clarksburg, was convicted today in federal court of unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
Henning was convicted in January 2011 of “First Degree Robbery” in the Circuit Court of Harrison County, West Virginia. As a result of that conviction, he is prohibited from possessing firearms. He was discovered in January 2015 in possession of a stolen .45 caliber pistol in Harrison County, West Virginia.
Henning pled guilty today to one count of “Felon in Possession of Firearm” and one count of “Possession of Stolen Firearm.” He faces up to ten years in prison and a fine of up to $250,000.00 on each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Clarksburg Police Department investigated.
U.S. District Judge Irene M. Keeley presided.
Haitian Man Pleads Guilty to Alien SmugglingRead the Press Release
A Haitian man pled guilty yesterday before Chief U.S. Magistrate Judge Frank J. Lynch, Jr. to alien smuggling.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), made the announcement.
Veronel Charles, 37, of Haiti, pled guilty to two counts of transporting aliens into the United States, in violation of Title 8, United States Code, Section 1324(a). Sentencing is scheduled for August 28, 2015, at 9:30 a.m., before U.S. District Judge Robin L. Rosenberg in Ft. Pierce. At sentencing, Charles faces for each of the two counts a mandatory minimum of three years, up to a maximum of ten years, in prison.
According to court documents, Charles piloted a boat from the Bahamas during the night of March 15-16, 2015, to land on the Florida coast in the early morning hours in St. Lucie County. With Charles in the boat were 19 other passengers, all unauthorized aliens from Haiti and the Dominican Republic. Five of the aliens aboard were aliens previously deported from the United States after criminal convictions for aggravated felonies.
Mr. Ferrer commended the investigative efforts of HSI, and the assistance of the U.S. Border Patrol and the Martin County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorney Theodore M. Cooperstein.
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
Franklin Woman Pleads Guilty to Theft of Social Security BenefitsRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Barbara Phillips, 66, of Franklin, Maine, pled guilty yesterday in U.S. District Court to theft of public money.
According to court records, from about August 2011 until December of 2013, Phillips withdrew social security funds being deposited in her deceased mother’s checking account. In all, Phillip’s stole over $31,000 by drafting checks to herself from the decedent’s account.
Phillips faces up to 10 years in prison, a $250,000 fine, and three years of supervised release. She will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Social Security Administration Office of the Inspector General.
Four South Florida Residents Charged in Sweepstakes Fraud SchemeRead the Press Release
Four Florida residents were charged, by indictment in the Southern District of Florida, for participating in a sweepstakes fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Ronald J. Verrochio, Inspector in Charge of the Miami Division, U.S. Postal Inspection Service (USPIS), made the announcement.
Matthew Pisoni, 42, of Fort Lauderdale, Marcus Pradel, 39, of Boca Raton, John Leon, 47, of Wilton Manors, and Victor Ramirez, 35, of Aventura, were indicted for their participation in a sweepstakes fraud scheme. The defendants are charged with conspiring to commit mail fraud, in violation of Title 18, United States Code, Section 1349; mail fraud, in violation of Title 18, United States Code, Section 1341; conspiring to commit money laundering, in violation of Title 18, United States Code, Section 1956(h); and money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i). The maximum statutory penalty for each count in the indictment is twenty years in prison. Ramirez is also charged with conspiring to structure deposits, in violation of Title 18, United States Code, Section 371, an offense punishable by up to five years in prison.
According to the indictment, unsealed today before the United States District Court in the Southern District of Florida, the four defendants falsely notified individuals by mail that they had won a substantial prize. The letters sent by the defendants fraudulently represented that the recipients needed to pay the defendants a fee ranging from $20 to $50 to redeem their purported winnings. During the course of the mail fraud conspiracy, more than a hundred thousand victims in the United States and abroad were fraudulently induced to pay the fees by the defendants’ misleading claims that they had won a prize. The fraudulent letters directed victims to pay the fees in cash, or by check or money orders made payable to fictitious companies controlled directly and indirectly by the defendants and their co-conspirators. In some instances, the defendants directed co-conspirators and associates to deposit victim checks into shell companies and laundered that money, and in other instances, the criminal proceeds were laundered through international bank accounts controlled directly and indirectly by the defendants and their co-conspirators.
According to a complaint filed by the Federal Trade Commission (FTC) in a companion case, since at least 2010, the defendants collected over $25 million from consumers through this fraudulent sweepstakes operation.
Mr. Ferrer commended the investigative efforts of the IRS-CI, USPIS, FTC, the Aventura Police Department and local and international law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorneys Alejandro Soto, Elijah Levitt, and H. Ron Davidson.
An indictment contains mere allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Four Mexican Nationals Sentenced for Conspiracy to Sell False ID Documents to Illegal AliensRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that four Mexican nationals have been sentenced in federal court for their roles in a conspiracy that produced and sold thousands of false identification documents to illegal aliens.
Eriberto Moises Medina-Aranda, 40, of Rayville, Mo., was sentenced by U.S. District Judge Dean Whipple on Wednesday, May 20, 2015, to 10 years in federal prison without parole. Cesar Mujica-Aranda (Medina-Aranda’s half-brother), also known as “Oscar Gomez,” 25, a citizen of Mexico residing in Liberty, Mo., was sentenced to five years in federal prison without parole.
Bernardino Bautista-Hernandez, 33, also known as “Brujo,” a citizen of Mexico residing in Kansas City, Mo., was sentenced to one year and one day in federal prison without parole. Ulises Montiel-Lazcano, also known as “Loco”, 35, a citizen of Mexico residing in Merriam, Kan., was sentenced to 11 months in federal prison without parole.
They must also forfeit to the government $403,700, which represents the total proceeds from the sale of counterfeit identification documents – criminal investigators estimate that the criminal enterprise manufactured and sold at least 7,122 fraudulent identification documents.
Each of the co-defendants pleaded guilty to his role in the conspiracy to produce false Social Security cards, false Lawful Permanent Resident cards and false driver’s licenses from various states within the United States as well as Mexican states between Sept. 1, 2013, and Feb. 21, 2014. Conspirators produced and sold thousands of false identification documents to illegal aliens so that the illegal aliens could stay and work within the United States. Conspirators sold the counterfeit identification documents for at least $100.
Medina-Aranda admitted that he oversaw the production and distribution of false identification documents. There were numerous street level dealers involved in the conspiracy. The street dealers would typically pay $50 for each counterfeit identification document sold and the street dealers would keep the excess proceeds they were able to obtain from the sale of the counterfeit documents.
Medina-Aranda also pleaded guilty to being an illegal alien in possession of firearms. Medina-Aranda admitted that in February 2014 he was in possession of a Smith & Wesson semi-automatic rifle, a Marlin rifle and ammunition, all of which were found in his residence by federal law enforcement agents. Medina-Aranda is illegally residing in the United States. His spouse, a citizen of the United States, purchased the Smith & Wesson semi-automatic rifle for him as a birthday gift at the Excelsior Springs, Mo., Wal-Mart store. His plea agreement contains a photograph of Medina-Aranda posing with the semi-automatic assault rifle next to a painting of Al Pacino in his “Scarface” role, who is holding a rifle in a similar pose.
Mujica-Aranda admitted that he managed the production of counterfeit identification documents at his Liberty apartment. He managed the production of the false identification documents and sold the documents to numerous street level dealers, such as Bautista-Hernandez and Montiel-Lazcano. Mujica-Aranda produced fraudulent Lawful Permanent Resident cards, counterfeit Social Security cards, and false driver’s licenses from various states within the United States as well as Mexican states.
On Jan. 30, 2014, Mujica-Aranda threw away a white plastic bag containing shredded pieces of fraudulent identity documents in a trash can at a gas station at St. John Avenue and Belmont in Kansas City, Mo. Early the next morning, a federal agent located the bag in the trash can. The bag contained shredded pieces of fraudulent identification documents, and weighed approximately two pounds. Each piece was approximately the size of a small paper clip, and the shredded pieces were immediately recognizable as fraudulent Lawful Permanent Resident cards, Social Security cards, Missouri non-driver’s licenses and Kansas identification cards. The agent also discovered two reels of depleted color card printer ribbon within the shredded pieces. One reel had images of fraudulent Lawful Permanent Resident cards.
Investigators secured a total of 16 reels of depleted color card printer ribbons weighing a total of 24 pounds, which were seized from a dumpster located at a gas station, a residence in Liberty, Mo., and a storage unit in Excelsior Springs, Mo. A United States Secret Service forensic testing lab evaluated these ribbons and was able to ascertain that the ribbons contained front and back images of 3,185 Lawful Permanent Resident cards.
Luis Daniel Cabrera-Guzman, also known as “Driver,” 30, a citizen of Mexico residing in Kansas City, was sentenced on March 24, 2015, to two years in federal prison without parole after pleading guilty in a separate but related case to his role in the conspiracy. The court also ordered Cabrera-Guzman to forfeit $403,700 to the government, including $9,376 that was seized by law enforcement officers at the time of his arrest. According to court documents, Cabrera-Guzman has been illegally living in the United States periodically since 2001. He was deported in May 2009 and June 2009 and illegally reentered the country.
These cases were prosecuted by Special Assistant U.S. Attorney Trey Alford. They were investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Social Security Administration, Office of the Inspector General, the Kansas Department of Revenue – Office of Special Investigations, the Missouri Department of Revenue – Compliance Investigation Bureau and the Clay County, Mo., Prosecuting Attorney’s Office.