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19 May 2015
Attorney Sentenced in White Plains Federal Court to Federal Prison for Subscribing to False Federal Income Tax ReturnsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Caroline D. Ciraolo, Acting Assistant Attorney General for the U.S. Department of Justice’s Tax Division, announced that MATTHEW LIBOUS was sentenced yesterday to six months in prison for failing to report income on his tax returns for the 2007, 2008, and 2009 tax years. LIBOUS was convicted at a bench trial in January 2015. United States District Judge Vincent L. Briccetti imposed yesterday’s sentence.
According to the Superseding Indictment and the evidence presented at trial:
LIBOUS engaged in the practice of law from 2006 through 2008. LIBOUS deposited the fees he received into his personal bank account but never reported them on his tax return. In 2008, LIBOUS became a minority partner and manager of Wireless Construction Solutions, LLC ("WCS"), a company that maintained cellular telephone towers. LIBOUS caused WCS to pay thousands of dollars in his personal expenses on his behalf from 2008 to 2011. Judge Briccetti found today that LIBOUS failed to report more than $97,000 in income, leading to a tax loss of more than $38,000.
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In addition to the prison sentence, LIBOUS, 37, of Glen Ridge, New Jersey, was sentenced to one year of supervised release, a $25,000 fine, 100 hours of community service, and costs of prosecution.
Mr. Bharara praised the outstanding investigative work of the Internal Revenue Service - Criminal Investigation and the investigators from the U.S. Attorney's Office for the Southern District of New York.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney James McMahon and Special Assistant U.S. Attorney Andrew Kameros are in charge of the prosecution.
Arizona Man Sentenced to 67 Months Imprisonment for Two CVS RobberiesRead the Press Release
PHOENIX– On May 18, 2015, Darrell Lee Jenkins, Jr., 35, of Tucson, Ariz., was sentenced by U.S. District Judge G. Murray Snow to 67 months’ imprisonment. Jenkins previously pleaded guilty to one count of robbery involving controlled substances and one count of interference with commerce by robbery (a Hobbs Act violation).
On March 13, 2014, Jenkins robbed a CVS pharmacy in Reno, Nev., of over $10,000 in OxyContin. On April 4, 2014, Jenkins again robbed a CVS pharmacy, this time in Flagstaff, Ariz., taking multiple bottles of Oxycodone.
The investigation in this case was conducted by the Flagstaff Police Department, the Reno, Nevada Police Department, and the Federal Bureau of Investigation. The prosecution was handled by Dimitra H. Sampson, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-8090-PCT-GMS and 15-0162-GMS
RELEASE NUMBER: 2015-038_Jenkins
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Arizona Man Sentenced to 30 Years Imprisonment for the Sexual Exploitation of ChildrenRead the Press Release
U.S. Attorney Kenneth A. Polite announced that VITTORIO FRANCESCO GONZALEZ-CASTILLO, age 27, of Tucson, Arizona, was sentenced yesterday by District of Arizona Chief Judge Raner C. Collins to thirty years’ incarceration for his part in two federal child pornography cases. GONZALEZ’s term of imprisonment will be followed by lifetime supervised release with stringent sex offender conditions and the requirement that he register as a sex offender.
In the first case, which arose in Arizona, GONZALEZ-CASTILLO was charged with distribution, receipt, and possession of child pornography after a 2009 investigation by the Federal Bureau of Investigation (FBI) revealed GONZALEZ-CASTILLO’s large-scale trading and distribution of graphic and sadistic child pornography.
In the second case, as a result of a nationwide child exploitation investigation, special agents with the New Orleans Office of the United States Department of Homeland Security, Homeland Security Investigations (“HSI”), determined that GONZALEZ-CASTILLO was responsible for producing videos depicting the sexual exploitation of children. According to court documents, beginning in 2012, and continuing until January 2013, GONZALEZ-CASTILLO conspired with Jonathan Johnson, the administrator of a multi-national child pornography website, to create and post videos depicting the sexual exploitation of children on the Internet. On January 24, 2014, GONZALEZ-CASTILLO was charged with conspiracy to produce child pornography for his part in producing a series of videos depicting a minor engaging in sexually explicit conduct in 2012 and 2013.
GONZALEZ-CASTILLO entered guilty pleas in both cases on November 12, 2014, after the Louisiana matter was transferred to the District of Arizona.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Polite praised the work of the Homeland Security Investigations in Louisiana, Arizona, and California, as well as the U.S. Postal Inspection Service in Louisiana, and the Federal Bureau of Investigation in Tucson, Arizona, Birmingham, Alabama, and Albany, New York in investigating this matter. Assistant U.S. Attorney Carin C. Duryee of the District of Arizona and Assistant U.S. Attorney Brian M. Klebba of the Eastern District of Louisiana were in charge of the prosecution.
Alabama State Parks Agree to Permit Motorized Vehicles for People with DisabilitiesRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama and the State of Alabama Department of Conservation and Natural Resources (Department) announced today that their offices have reached an agreement to permit people with mobility disabilities to use their motorized wheelchairs and other power-driven mobility devices on the roads in all state parks and recreation areas. Previously, state regulations did not specifically allow such devices on roads, even when no sidewalks or alternate routes existed for them. The Department enacted a new state regulation to ensure the rights of park visitors with disabilities under the Americans with Disabilities Act of 1990, see below.
This agreement resulted from a complaint filed with the U.S. Attorney’s Office by a paraplegic man who could not stay at the public campground at Alabama Gulf State Park in Gulf Shores because park personnel banned use of the golf cart he uses for mobility on roads in the park. This prohibition and the lack of sidewalks in the park meant he could not access the park’s attractions and amenities.
"Ensuring that Alabama’s beautiful parks and recreation areas are accessible to everyone, including individuals with disabilities, is a win-win result," said U.S. Attorney Kenyen R. Brown. "ADA compliant facilities aid the disabled and make our communities more welcoming and business friendly. We commend Commissioner Gunter Guy, Jr. for his commitment to seeing that Alabama’s Great Outdoors can be shared by all, regardless of disability."
The new regulation reads:
220-5-.04(10) Notwithstanding any provision above, individuals with a mobility disability may use any motorized vehicle or other power-driven mobility device to access the parks’ amenities as provided in and subject to the provisions of the Americans with
Disabilities Act of 1990, as amended, and 28 C.F.R. § 35.137 (2014) [complete text of the regulation is attached].
Additional Sex Trafficking Charges Filed Against Allentown ManRead the Press Release
PHILADELPHIA - A superseding indictment was filed May 14, 2015 charging Corderro Cody, 27, of Allentown, PA, four additional counts, three additional counts of sex trafficking by force, fraud, or coercion, or attempt, and one count of sex trafficking of a minor. Cody was originally indicted on October 30, 2014, on charges of conspiracy to commit sex trafficking by force, fraud, or coercion, four counts of sex trafficking by force, fraud, or coercion, and conspiracy to transport individuals both intrastate and interstate for the purpose of prostitution.
The superseding indictment alleges that Cody recruited women to work as prostitutes, referred to his prostitution business as the “program,” and advertised the women on Backpage.com. The women were sometimes driven to other states and forced to perform sexual acts. Cody recovered and kept most, if not all, of the money generated by the sexual acts, and used physical force in the form of beatings when the women did not adhere to the “program,” and to maintain the women performing commercial sexual acts.
If convicted, the defendant faces a a mandatory minimum prison term of 15 years up to a maximum of life, a fine of up to $2.5 million, a mandatory minimum five years supervised release up to lifetime supervised release, and a $1,000 special assessment.
The case was investigated by Homeland Security Investigations and the Allentown Police Department. It is being prosecuted by Assistant United States Attorney Sherri A. Stephan, and Trial Attorney Anita Channapati of the Civil Rights Division of the Department of Justice.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Adams County Correctional Center Inmate Pleads Guilty to RiotingRead the Press Release
Jackson, Miss. - Juan Geraldo Arredondo, 35, originally from Chihuahua, Mexico, pled guilty today before Senior U.S. District Judge David C. Bramlette III, to one count of rioting in a federal correctional facility, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway.
The prison riot occurred on May 20, 2012 at the Adams County Correctional Center. During the riot, several correctional officers were assaulted and one correctional officer died as a result of injuries he received during these assaults. Other correctional officers were taken captive and held hostage for several hours by participants in the riot. Total damage to ACCC was estimated to be $1,305,142.00.
Arredondo will be sentenced on August 7, 2015 by U.S. District Judge David C. Bramlette III and faces a maximum penalty of ten years in federal prison and a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Patrick Lemon.
18 May 2015
Zachary Woman Pleads Guilty to Embezzling More Than $80,000 from the Social Security AdministrationRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced the conviction of RUBY C. DUNN, age 63, of Baton Rouge, Louisiana, who pled guilty today before U.S. District Judge Shelly D. Dick to theft of government property, in violation of Title 18, United States Code, Section 641, and admitted to forfeiture allegations contained in the Bill of Information.
According to the factual basis presented to the Court in connection with her plea, DUNN began receiving Social Security Administration (SSA) Survivor’s Benefits in or around 1993. However, in 1999, DUNN re-married and became ineligible for such benefits. In order to continue receiving these benefits, DUNN failed to report her marital status and knowingly made misrepresentations to the SSA, on numerous occasions, intending to conceal her marital status. On one occasion, for instance, when asked about her husband, DUNN falsely represented that he was only a “cousin” who happened to live at the same address. On another occasion, DUNN admitted that she had obtained a marriage license but claimed that she and her husband had not gone through with the marriage. As DUNN admitted in Court today, her scheme continued over a fourteen-year period, during which time she fraudulently obtained more than $80,000 in SSA benefits.
U.S. Attorney Green stated: “This kind of criminal conduct is an affront to all those who dutifully pay into the Social Security system and only receive benefits when it is legal and appropriate for them to receive such benefits. We appreciate the SSA-OIG’s efforts to identify this type of fraudulent conduct and bring it to this Office’s attention so that we may take action.”
This investigation is being conducted by the Social Security Administration’s Office of Inspector General. The matter is being prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
Two Mexican Nationals Arrested in New Mexico on Federal Cocaine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Two Mexican nationals were arrested on May 15, 2015, after U.S. Border Patrol agents allegedly found large quantities of cocaine in their vehicles during separate routine inspections at the U.S. Border Patrol Checkpoint on Interstate 25 north of Las Cruces, N.M. J. Cesar Magallanes-Trejo, 46, and Roberto Rodriguez-Ponce, 28, made their initial appearances in Las Cruces federal court earlier today on separate criminal complaints charging them with possession of cocaine with intent to distribute. Both men remain in custody pending detention hearings which have yet to be scheduled.
The criminal complaint charging Magallanes-Trejo alleges that U.S. Border Patrol agents found approximately 11 kilograms (24 pounds) of cocaine concealed in his vehicle during a routine checkpoint inspection. According to a separate criminal complaint, Rodriguez-Ponce was arrested after U.S. Border Patrol agents found approximately 4.8 kilograms (ten and a half pounds) of cocaine concealed in a hidden compartment in his vehicle.
If convicted of the charge in his criminal complaint, Magallanes-Trejo faces a statutory mandatory minimum of ten years and a maximum of life imprisonment. If convicted of the charge against him, Rodriguez-Ponce faces a statutory mandatory minimum of five years and a maximum of 40 years in prison. Charges in complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
Both cases were investigated by the U.S. Border Patrol and the Las Cruces office of the DEA. The two cases are being prosecuted by the U.S. Attorney’s Las Cruces Branch Office; the Magallanes-Trejo case is being prosecuted by Assistant U.S. Attorney Luis A. Martinez and the Rodriguez-Ponce case is being prosecuted by Special Assistant U.S. Attorney Clara Nevarez Cobos.
Two Maries County People Sentenced on Federal Methamphetamine ChargesRead the Press Release
St. Louis, MO – TIMOTHY JAMES and STARLA DUDENHOEFFER were sentenced to 63 months in prison and 28 months in prison, respectively, involving their distribution of large quantities of methamphetamine in Maries County.
James and Dudenhoeffe, both of Vienna, Missouri, previously pled guilty to one felony count each of conspiracy to distribute methamphetamine. Dudenhoeffer appeared today for sentencing before United States District Judge Henry Autrey. James was sentenced in March.
This case was investigated by the Drug Enforcement Administration. Assistant United States Attorney John Mantovani handled the case for the U.S. Attorney’s Office.
Tulare County District Attorney’s Investigator Receives Award for His Contribution to the Mission of the Department of JusticeRead the Press Release
FRESNO, Calif. — United States Attorney Benjamin B. Wagner is pleased to announce the 2014 winner of the Eastern District of California Law Enforcement Award for Outstanding Investigator in the Fresno Division. This award is one of four awards presented annually to a law enforcement agency and an officer in each of the Sacramento and Fresno divisions of the Eastern District of California to recognize outstanding collaboration between federal state and local law enforcement in addressing public safety issues in this region.
The 2014 Fresno Division’s Outstanding Law Enforcement Investigator Award goes to Dwayne Johnson of the Tulare County Office of the District Attorney’s Bureau of Investigations for his work with the San Joaquin Valley Mortgage Fraud Task Force (MFTF). In this capacity, Investigator Johnson has worked closely with the Fresno U.S. Attorney’s Office and its partner federal law enforcement agencies in leading several mortgage fraud-related investigations and prosecutions that have targeted large-scale fraud schemes, yielded significant guilty pleas and vindicated the rights of countless victims.
In May 2013, Investigator Johnson was the lead investigator in a fraudulent foreclosure rescue business case. On the basis of a single complaint, Johnson commenced a long-term investigation that ultimately uncovered a fraud scheme that victimized dozens of homeowners in numerous counties, many of whom eventually lost their houses in foreclosure. Johnson prepared and undertook the execution of several search warrants, reviewed thousands of pages of documents, conducted dozens of witness interviews and planned and executed various undercover operations. Juan Ramon Curiel and Santiago Palacios-Hernandez (Case No. 1:13-cr-188 LJO), pleaded guilty in December 2014 and admitted that they had caused more than $2.5 million in losses to more than 50 vulnerable homeowners and financial institutions.
"The financial crisis hit our communities particularly hard and over the past six years our office has taken a leading role in prosecuting those who engaged in mortgage fraud to enrich themselves while harming our economy and driving down the value of our neighborhoods," said U.S. Attorney Wagner. "Our success was only possible because of dedicated, hard-working law enforcement officers like Investigator Johnson. My office, the Eastern District, and Tulare County all owe a great debt to Investigator Johnson and his many skilled and dedicated colleagues in local law enforcement who do the heavy lifting in protecting our communities."
Earlier this year, three of the 2014 awards were presented to the Tehama County Sheriff’s Office and the Fresno County Sheriff’s Office for their outstanding work in cooperation with the U.S. Attorney’s Office. Last week the 2014 award for Outstanding Investigator in the Sacramento Division was presented to Sacramento Police Department’s Detective Derek Stigerts for his work investigating crimes involving the sex trafficking of minors.
Tucson Man Sentenced to 30 Years for Child Pornography OffensesRead the Press Release
TUCSON, Ariz. – Today, Tucson resident Vittorio Francesco Castillo-Gonzalez, 27, was sentenced by Chief U.S. District Judge Raner C. Collins to 30 years’ incarceration for his part in two federal child pornography cases. In the first case, which arose in Arizona, the defendant was charged with distribution, receipt, and possession of child pornography after a 2009 investigation by the Federal Bureau of Investigation (FBI) revealed Gonzalez’s large-scale trading and distribution of graphic and sadistic child pornography. In the second case, which arose from an investigation by Homeland Security Investigations Agents out of Louisiana, the defendant was charged with conspiracy to produce child pornography for his part in producing a series of videos depicting a minor engaging in sexually explicit conduct in 2012 and 2013. The defendant entered guilty pleas in both cases on Nov. 12, 2015, after the Louisiana matter was transferred to the District of Arizona. Gonzalez’s term of imprisonment will be followed by lifetime supervised release with stringent sex offender conditions and the requirement that he register as a sex offender.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims of child sexual abuse. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigations in these cases were conducted by the Federal Bureau of Investigation in Tucson, Ariz., Birmingham, Ala., and Albany, N.Y., and Homeland Security Investigations in Louisiana, Arizona, and California, as well as by the U.S. Postal Inspection Service in Louisiana. The prosecutions were handled by Assistant U.S. Attorneys Carin C. Duryee, District of Arizona, Tucson, and Brian M. Klebba, Eastern District of Louisiana.
CASE NUMBERS: CR 13-0195-RCC; CR 14-1831-RCC
RELEASE NUMBER: 2015-037_Gonzalez
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Three Life Sentences Imposed on Man Following Convictions for Drug Trafficking, Kidnapping, Using Firearms and HIPAA ViolationsRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that United States District Court Judge, Ralph R. Beistline, sentenced an Anchorage man, Stuart T. Seugasala, a.k.a. “Tone,” age 40, to three terms of life imprisonment following his January 2015 convictions on drug trafficking conspiracy and two kidnapping charges. Judge Beistline imposed a consecutive seven year sentence on firearms violations, as well as concurrent ten year terms of convictions for unauthorized access to private health information (HIPAA). There is no parole in the federal penal system. Seugasala will spend the rest of his natural life in custody.
According to Assistant U.S. Attorneys Stephan A. Collins and Frank V. Russo, who tried the case, Seugasala had previously been convicted of drug trafficking in 2000 and served over nine years in prison. Following his release, Seugasala returned to Anchorage, Alaska where he opened and operated a video gaming place that catered to youths called “Friendly Fire.” Seugasala also returned to drug trafficking. In late 2012 to early 2013, Seugasala became associated with Phosavan Khamnivong,a.k.a. “P.K,” a convicted murder who served eight years of a 20 year sentence. The men started bringing nearly pure methamphetamine, as well as other drugs, into Alaska from California. On March 13, 2013, Seugasala, Khaminvong, Timothy Miller, a.k.a. “Lil Tone,” and Anoai Sialofi, a.k.a. “A-Loc,” kidnapped, tortured, and sexually assaulted two men because one of the men owed Khamnivong a past due heroin debt. At Seugasala’s direction, the sexual assault of one of the victims was videotaped so that he could intimidate others that owed the group money. The victims were released after over three hours, and only after one of the victims agreed to repay the drug debt.
One of the victims was so severely injured that that he was admitted to Providence Hospital. On March 15, 2013, Seugasala became so upset at other patrons dining at the Denny’s Restaurant on Benson, in Anchorage, that he followed them while they drove south on the Seward Highway and shot several times at their moving car, hitting it several times. The driver of the target car suffered a neck grazing bullet wound and a severed fingertip wound. The driver also admitted himself to Providence Hospital. On or about March 17, 2013, Seugasala called Stacy Laulu, a friend of his who worked at Providence Hospital, to find out if the victims of his crimes had reported him to the police. Laulu accessed the private electronic medical files of the victims and reported back to Seugasala. Laulu went to trial with Seugasala in January and was convicted of violating the privacy rights of the victims. She is due to be sentence on May 29, and faces up to ten years of imprisonment. Judge Beistline previously sentenced Timothy Miller to a term of 12 years imprisonment and Anoai Sialofi to a term of 235 months imprisonment. Khamnivong is due to be sentenced on June 10, 2015.
In imposing the life sentences on Seugasala, Judge Beistline stated, “You enjoyed being a drug kingpin, you seemed to enjoy the misery that you created, and you enjoyed your criminal posse,” who Seugasala directed to commit home invasion robberies to steal money and/or drugs.
Judge Beistline specifically condemned the video of the sexual assault, which was introduced into evidence at trial, on which Seugasala can be heard and seen torturing one of the victims. “This video is who you are. You enjoyed the drama, the power, the torture, and the sex assault. You were the one that asked that it be created, so you could re-live the excitement, to brag, and to use it for intimidation.” Judge Beistline openly wondered “how a human gets to the point where he treats other people in such an inhumane way.” Judge Beistline described Seugasala’s actions as “so far beyond the pale it is difficult to describe the revulsion the community feels for these crimes.”
Seugasala received maximum ten-year sentences on the HIPAA convictions, the first in the history of Alaska and one of few such cases prosecuted in the country. Judge Beistline noted that in committing these violations, which involved obtaining the victims’ private medical information, Seugasala “disrespected the victims again.”
Judge Beistline noted that life imprisonment was appropriate because Seugasala “cannot be deterred, so the public needs to be protected from you.” The fact that Seugasala committed these crimes while on supervised release for prior drug felonies also demonstrated that he could not be adequately supervised.” Judge Beistine also imposed a seven year sentence on firearms violations, to run consecutively to the life sentences, as mandated by federal law.
Ms. Loeffler commends the Drug Enforcement Administration, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the United States Marshals Service, the Anchorage Police Department, the Alaska State Troopers, and the Valdez Police Department for the investigation that led to the convictions in this case.
Telemarketer Convicted in Timeshare Resale FraudRead the Press Release
HOUSTON – The final defendant in connection with telemarketing fraud and money laundering scheme spanning nearly five years has been convicted of conspiracies to commit wire/mail/telemarketing fraud, announced U.S. Attorney Kenneth Magidson. James Assi Jariv, 64, of Las Vegas, Nev., entered a guilty plea this afternoon before U.S. District Judge Lynn H. Hughes.
Jariv’s son Alexander, 27, his wife Jiwon, 35, his ex-wife Varda, 74, all of Las Vegas, and four others - Ronald Frank Muise, 52, his son Michael Derek Muise, 30, and Thresa Lloyd, 44, all of Las Vegas, Nev.; and Leon Avedikian, 46, of Los Angeles, Calif. - previously pleaded guilty for their roles in the scheme.
Between December 2007 and Feb. 24, 2012, the defendants victimized approximately 1000 victims living in Canada and throughout the United States, including the Southern District of Texas.
The Jarivs and the others used a number of different named companies to conduct their telemarketing timeshare resale scheme targeting timeshare owners throughout the United States and Canada. The timeshare owners were solicited to pay advance fees in exchange for the promise that The Jariv Companies had willing buyers for the timeshare properties or points. However, The Jariv Companies did not have buyers for the timeshare owners’ interests and did not market or sell the property.
The Jariv companies were registered in various states, including Texas, Nevada, California, Illinois and Washington and conducted business at multiple addresses in Houston, Las Vegas, Los Angeles, Chicago and Seattle.
The defendants used mailing addresses or “virtual office suites” in Las Vegas, Houston, Chicago and Seattle for receiving monies from timeshare owners via U.S. Mail or commercial interstate carriers like Fed Ex, all the while maintaining call center offices in Las Vegas, Houston, Chicago and the greater Los Angeles-area from which the defendants, using telephones and email, contacted and communicated with timeshare owners in a scheme to defraud the timeshare owners of money.
The defendants and their employees falsely represented that they had buyers for the timeshare owners interests (either timeshare weeks or points) and solicited fees, ranging from hundreds of dollars to several thousand dollars from each timeshare owner. The defendants falsely represented that the fees were fully refundable at closing and were used to secure the owners’ place in an acquisition involving corporate buyers, as well as to pay for legal expenses such as title searches, estoppel letters and closing costs.
However, closings were not scheduled, purported sales did not occur and no payments were made to timeshare owners for the sale of their property, nor have there been payments by corporations (or other buyers) to The Jariv companies for the purchase of timeshare properties.
The defendants and employees of the Jariv companies did not devote their resources to marketing the timeshare owners’ properties and simply pocketed the advanced fees paid by the timeshare owners with a sizeable percentage of the money used to pay telemarketers. Jariv and his family members kept the balance of advance fees to be deposited into bank accounts controlled by them and frequently transferred it to personal bank accounts or other unrelated corporate bank accounts.
Between Feb. 1, 2011, and Jan. 31, 2012, the defendants deposited into eight bank accounts approximately $6,925,137.04 in fraudulently-obtained timeshare owner funds. Some victims reversed the charges or withdrawals, leaving approximately $5,945,433.04 in victim funds in possession of, and subsequently transferred into, other accounts controlled by the defendants. The funds in the eight victim deposit accounts were all traceable to payments received from victims.
As a result of pleas from all charged defendants, the U.S. has recovered more than $2 million for restitution to victims, many of whom are more than 55 years of age. Money judgments in both the civil forfeiture action and the criminal cases have been obtained to assist the United States in recovering the balance of the $5,945,433.04 restitution that is expected to be a part of the sentences.
The fraud conspiracy conviction carries a maximum imprisonment of 20 years in federal prison. However, because the wire/mail fraud involved telemarketing that involved 10 or more victims older than 55, federal law provides for an additional 10-year-sentence after the one imposed for the underlying conviction. Jariv also faces up to 20 years imprisonment for the money laundering conspiracy.
James Jariv is set for sentencing July 27, 2015, while the co-defendants are set for Aug. 17, 2015. Originally on bond, James Jariv was taken into custody following an arrest for an unrelated fraud scheme in Nevada. He will remain in federal custody pending sentencing.
The convictions are the result of an investigation conducted by the Houston Division of U.S. Secret Service (USSS) and Internal Revenue Service – Criminal Investigation with assistance by Las Vegas USSS, FBI and San Francisco Environmental Protection Agency. Assistant U.S. Attorneys Martha Minnis and Katherine Haden are prosecuting the case.
St. Louis Woman Sentenced to Nearly Six Years in Federal Prison for Role in Two Bank RobberiesRead the Press Release
Annalise McGhee, 28, of St. Louis, Missouri, was sentenced today in the U.S. District Court to 70 months in prison on one count of Conspiracy to Commit Bank Robbery and two counts of Bank Robbery in connection with the robbery of Laclede Community Credit Union in Alton, IL, on February 11, 2013, and the robbery of People’s Bank and Trust in Altamont, IL, on February 26, 2013, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois has announced. Following her prison sentence, McGhee will be on federal supervised release for 3 years. McGhee was also ordered to pay restitution in the amount of $5,684. McGhee has been in custody since February 26, 2013.
Documents filed in U.S. District Court establish that on February 11, 2013, McGhee drove her male co-defendant, Altonio Graves, to the Laclede Community Credit Union in Alton, Illinois to commit a robbery. Graves entered the credit union wearing a long black women’s wig, a black hat, and a black trench coat to disguise his appearance. Graves told the teller he had a gun, handed her a plastic grocery bag and a note demanding money. The teller placed $5,684 in the bag and Graves left the credit union with the money. Graves then entered the getaway vehicle being driven by McGhee and the two fled the area and escaped capture at that time.
On February 26, 2013, McGhee drove Graves to the People’s Bank and Trust in Altamont, Illinois to commit a robbery. Graves entered the bank wearing a long black women’s wig, a dark trench coat and a black hat with earflaps to disguise his appearance. Graves handed the teller a plastic grocery bag and a note which stated: "This is a robbery, I have a gun and I will use it." The teller placed $7,390 in the bag and Graves left the bank with the money. Graves then entered the getaway vehicle being driven by McGhee and the two fled the area. Illinois State Police officers located the suspect vehicle on the interstate and attempted a traffic stop. McGhee refused to stop the vehicle and fled from the officers at speeds in excess of 120 mph until she lost control of the vehicle and crashed into a ditch. During a search of Graves and the vehicle, officers located the $7,390 in United States currency taken from the bank. Also during the search of the vehicle, officers recovered a loaded .45 caliber semi-automatic pistol behind the glove box.
Altonio Graves, 39, of St. Louis, Missouri has also pleaded guilty and was sentenced on April 17, 2015 to 10 years in prison for the two bank robberies.
The case was investigated by the Alton Police Department, Altamont Police Department, the Illinois State Police and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Ali Summers.
Southampton Man Charged with Wire FraudRead the Press Release
PHILADELPHIA - Thomas Luther, 49 of Southampton, Pennsylvania was charged today by Information with wire fraud, announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum possible sentence of 20 years in prison, a three-year period of supervised release, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Melanie Babb Wilmoth.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Silver Spring Man Pleads Guilty to Two Bank RobberiesRead the Press Release
Baltimore, Maryland – Paul Milton Laney, age 61, of Silver Spring, Maryland pleaded guilty today to committing two bank robberies within three days.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief J. Thomas Manger of the Montgomery County Police Department.
According to Laney’s plea agreement, on February 18, 2014, Laney entered a bank in the 13000 block of Georgia Avenue in Silver Spring and demanded that the teller put money in a plastic bag that he threw over the counter. The victim teller was frightened and didn’t immediately comply. Laney then leapt up onto the counter, took money directly from the register and stuffed the money into the plastic bag, stealing approximately $2,920. As Laney was leaving, a bank employee approached Laney and attempted to stop him. Laney stated, “If you take another step closer, I’ll blow your head off.” The employee stepped away and allowed Laney to exit the bank.
On February 21, 2014, Laney entered a bank in the 8700 block of Georgia Avenue in Silver Spring, approached one of the tellers, threw a plastic bag over the counter and stated, “This is an armed robbery. I want all your $100s and $50s.” The teller was frightened and was slow to put money in the bag. Laney leaned over the counter and revealed a large kitchen knife inside his jacket and threated to kill the teller. The teller then removed approximately $999 from the register, placed the cash in the bag and handed it to Laney, who exited the bank.
Laney faces a maximum sentence of 20 years in prison for each of the two counts of bank robbery. U.S. District Judge Peter J. Messitte has scheduled sentencing for August 19, 2015 at 9:30 a.m.
United States Attorney Rod J. Rosenstein commended the FBI and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Daniel C. Gardner, who is prosecuting the case.
Shafter Man Sentenced to over 17 Years in Prison for Methamphetamine TraffickingRead the Press Release
FRESNO, Calif. —Santos Acevedo Gutierrez, 41, of Shafter, was sentenced today by United States District Judge Lawrence J. O’Neil to 17 years and six months in prison and the forfeiture of $10,123 for possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, on April 30, 2014, law enforcement officers executed a search warrant at Gutierrez’s home in Shafter and seized approximately four pounds of methamphetamine as well as a digital scale, packaging materials and over $10,000 in United States Currency. Gutierrez was on federal supervised release after serving a prison sentence for a previous federal drug felony conviction at the time of the search.
“As this sentence makes clear, trafficking methamphetamine is a serious offense that will be punished with the fullest extent of the law,” said Michael Toms, resident agent in charge of HSI Bakersfield. “Left unchecked, this highly dangerous substance destroys lives and wreaks havoc on entire communities. HSI, together with its local law enforcement partners, is committed to using every tool and authority at its disposal to combat the menace posed by meth.”
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Kern County Sheriff’s Office. Assistant United States Attorney Brian K. Delaney is prosecuting the case.
Serial Counterfeit Check Fraudster Sentenced to Six Years in PrisonRead the Press Release
ROME, Ga. - Taurus Centaur has been sentenced to six years in prison for engaging in a counterfeit check scheme through which he purchased thousands of dollars in jewelry and consumer goods with counterfeit checks.
“The defendant traveled from state to state, using a stolen identity to pass bad checks to purchase luxury items,” said Acting U.S. Attorney John Horn. “This case serves as a reminder that in this day of sophisticated cybercrime and Internet-based identity theft, there are still traditional, paper-using fraudsters and counterfeiters who prey on unsuspecting citizens and businesses.”
“This case validates the impact of identity theft and check fraud on our communities. Today’s sentence should serve as a reminder that criminals will not get away with taking advantage of unsuspecting victims without bearing the consequences,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
According to Acting U.S. Attorney Horn, the charges and other information presented in court: From October 2011 until April 2014, Centaur traveled in states along the East coast of the United States—Georgia, South Carolina, Tennessee, North Carolina, West Virginia, Pennsylvania, Maryland, and New Jersey—purchasing jewelry and other consumer goods with counterfeit checks and, in some instances, pawning the purchased items for cash.
In executing this scheme, Centaur assumed the identity of an individual in custody with the Virginia Department of Corrections and presented checks bearing that individual’s name at various stores. To assume the name, Centaur forged a “Release Certificate” in the name of the prisoner, used that forged document to obtain a legitimate copy of the prisoner’s birth certificate from the Maryland Division of Vital Records, and then used that birth certificate to request a Social Security card in the name of the prisoner.
Centaur’s spending spree came to an end on April 12, 2014, when he was arrested by the Cartersville, Georgia, Police Department during a traffic stop related to active warrants for his arrest. Inside Centaur’s vehicle, law enforcement found, among other things: a check embossing machine, a typewriter, and counterfeit cashier’s checks.
Taurus Centaur, 48, of Dallas, Texas, was sentenced to a term of imprisonment of six years and ordered to pay restitution in the amount of $172,465.10. He was also ordered to serve three years of supervised release, and the court imposed special conditions of supervised release, including that Centaur may not possess any device-making materials which could be used to manufacture counterfeit instruments, such as computers and printers, without permission of the United States Probation Officer.
This case was investigated by the United States Secret Service.
Assistant United States Attorney Samir Kaushal prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao-ndga.
Savannah Man Indicted for Bank Robbery SpreeRead the Press Release
Savannah, GA – Jerald Bowman, 40, of Savannah, Georgia, was indicted by a federal grand jury sitting in Savannah on charges related to five bank robberies in the Savannah area. Bowman was charged with five counts of armed bank robbery, five counts of using a firearm during a crime of violence and the unlawful possession of a firearm by a convicted felon.
The indictment alleges that Bowman robbed: (1) the Georgia’s Own Credit Union located at 401 Mall Boulevard, Savannah, Georgia on September 30, 2014; (2) the Wells Fargo located at 7939 Waters Avenue, Savannah, Georgia on November 12, 2014; (3) the Heritage Bank located at 14010 Abercorn Street, Savannah, Georgia on December 4, 2014; (4) Navy Federal Credit Union located at 3490 Highway 17 South, Richmond Hill, Georgia on February 3, 2015; and (5) the Wells Fargo located at 6999 Abercorn Street, Savannah, Georgia on March 19, 2015.
If convicted on all counts, Bowman faces a mandatory minimum prison sentence of 107 years. Mr. Tarver emphasized that an indictment is only an accusation and is not evidence of guilt. The defendant is entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The investigation of this case was led by the Federal Bureau of Investigation’s Southeast Georgia Violent Crimes Task Force with assistance from the Savannah-Chatham Metropolitan Police Department, the Richmond Hill Police Department, and the Savannah Parole Office. Assistant United States Attorney Scarlett S. Nokes is prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
San Diego Storage Company Agrees to Pay $170,000 to Settle Justice Department Allegations That it Unlawfully Sold Navy Service Members' BelongingsRead the Press Release
Across Town Movers, a San Diego-based storage company, and its owner, Daniel E. Homan, have agreed to pay nearly $170,000 to resolve allegations by the Department of Justice that it unlawfully sold U.S. Navy service members’ stored goods.
The settlement resolves a lawsuit filed in March by the Department of Justice’s Civil Rights Division and the U.S. Attorneys’ Office for the Southern District of California. The lawsuit alleged that Across Town Movers had a practice of selling active-duty service members’ storage lots without obtaining necessary court orders.
The lawsuit was filed under the Servicemembers Civil Relief Act (SCRA), which protects the rights of service members while on active duty by suspending or modifying certain civil obligations. Under the SCRA, a storage lien may not be enforced against service members during, or 90 days subsequent to, their period of military service without a court order.
Among the aggrieved service members is Master Chief Petty Officer Thomas E. Ward, now retired, who will receive $150,000 as compensation for his auctioned personal property. A long-time car enthusiast and 30-year veteran, Master Chief Ward placed his valuable car parts and many household items into storage when he was deployed overseas. He entrusted Across Town Movers to keep his personal property safe until he returned to his home in San Diego. Just before completing his final tour, Master Chief Ward learned that Across Town Movers had auctioned all of his stored personal property, including rare, vintage car parts, without providing any notice or obtaining a court order. Moreover, Across Town Movers allegedly continued to collect payment of storage fees from the government after it sold Master Chief Ward’s goods.
“This settlement will not only provide relief to ten service members, but also will ensure that business practices change to better protect others,” said Acting Associate Attorney General Stuart F. Delery. “I want to thank the United States Navy for referring this case to the Department of Justice. I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and protect the rights of all the brave men and women who serve in our Armed Forces.”
“We hope that this consent order will send a clear message to all storage companies that before they auction off anyone’s belongings, they should check the Defense Department’s military database and their own files to see if the customer is protected by the Servicemembers Civil Relief Act,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Department of Justice is committed to protecting the rights of the men and women who serve in our Armed Forces, and we will continue to devote time and resources to make sure that they are given the legal protections they deserve.”
“Federal law protects our military service members and their dependents from businesses taking certain adverse actions against them,” said U.S. Attorney Laura E. Duffy of the Southern District of California. “These protections permit service members to devote their full attention to defending the United States. While Master Chief Ward was overseas focusing on defending our country, he understandably did not expect the very company paid to safeguard his valuable property to instead auction it off in his absence. Across Town Movers’ $150,000 payment provides Master Chief Ward the opportunity to repurchase his lost goods.”
Across Town Movers must also compensate other aggrieved service members for unlawfully auctioning their goods.
Furthermore, as part of the settlement, a consent order has been entered that requires Across Town Movers to make systemic changes to its business practices, including developing new policies and procedures consistent with the SCRA and providing SCRA training to its employees. Across Town Movers is enjoined from engaging in future SCRA violations.
A consent order incorporating the terms of this settlement was on Friday, May 14, 2015, in the Southern District of California. This matter resulted from a referral to the Justice Department by the U.S. Navy.
Service members and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php. Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting service members is available at www.servicemembers.gov.
This matter is being handled by an attorney from the Civil Rights Division’s Housing and Civil Enforcement Section and Assistant U.S. Attorneys Dylan M. Aste and Leslie M. Gardner of the Southern District of California.
San Diego Storage Company Agrees to Pay $170,000 to Settle Justice Department Allegations That It Unlawfully Sold Navy Servicemembers’ BelongingsRead the Press Release
SAN DIEGO – Across Town Movers, a San Diego-based storage company, and its owner, Daniel E. Homan, have agreed to pay nearly $170,000 to resolve allegations by the Department of Justice that it unlawfully sold U.S. Navy service members’ stored goods.
The settlement resolves a lawsuit filed in March by the U.S. Attorneys’ Office for the Southern District of California and the Department of Justice’s Civil Rights Division. The lawsuit alleged that Across Town Movers had a practice of selling active-duty service members’ storage lots without obtaining necessary court orders.
The lawsuit was filed under the Servicemembers Civil Relief Act (“SCRA”), which protects the rights of service members while on active duty by suspending or modifying certain civil obligations. Under the SCRA, a storage lien may not be enforced against service members during, or 90 days subsequent to, their period of military service without a court order.
Among the aggrieved service members is Master Chief Petty Officer Thomas E. Ward, now retired, who will receive $150,000 as compensation for his auctioned personal property. A long-time car enthusiast and 30-year veteran, Master Chief Ward placed his valuable car parts and many household items into storage when he was deployed overseas. He entrusted Across Town Movers to keep his personal property safe until he returned to his home in San Diego. Just before completing his final tour, Master Chief Ward learned that Across Town Movers had auctioned all of his stored personal property, including rare, vintage car parts, without providing any notice or obtaining a court order. Moreover, Across Town Movers allegedly continued to collect payment of storage fees from the government after it sold Master Chief Ward’s goods.
“Federal law protects our military service members and their dependents from businesses taking certain adverse actions against them. These protections permit service members to devote their full attention to defending the United States,” said U.S. Attorney Laura E. Duffy. “While Master Chief Ward was overseas focusing on defending our country, he understandably did not expect the very company paid to safeguard his valuable property to instead auction it off in his absence. Across Town Movers’ $150,000 payment provides Master Chief Ward the opportunity to repurchase his lost goods.”
“This settlement will not only provide relief to ten service members, but also will ensure that business practices change to better protect others,” said Acting Associate Attorney General Stuart F. Delery. “I want to thank the United States Navy for referring this case to the Department of Justice. I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and protect the rights of all the brave men and women who serve in our Armed Forces.”
“We hope that this consent order will send a clear message to all storage companies that before they auction off anyone’s belongings, they should check the Defense Department’s military database and their own files to see if the customer is protected by the Servicemembers Civil Relief Act,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Department of Justice is committed to protecting the rights of the men and women who serve in our Armed Forces, and we will continue to devote time and resources to make sure that they are given the legal protections they deserve.”
Across Town Movers must also compensate other aggrieved service members for unlawfully auctioning their goods.
Furthermore, as part of the settlement, a consent order has been entered that requires Across Town Movers to make systemic changes to its business practices, including developing new policies and procedures consistent with the SCRA and providing SCRA training to its employees. Across Town Movers is enjoined from engaging in future SCRA violations.
A consent order incorporating the terms of this settlement was issued in the Southern District of California. This matter resulted from a referral to the Justice Department by the U.S. Navy.
Service members and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php. Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.
This matter is being handled by Assistant U.S. Attorneys Dylan M. Aste and Leslie M. Gardner, and an attorney from the Civil Rights Division.
Repeat Identity Thief Sentenced to Four Years in Prison for Mail Theft, Access Device Fraud and Aggravated Identity TheftRead the Press Release
A repeat offender with prior convictions for forgery and identity theft was sentenced today in U.S. District Court in Seattle to four years in prison, announced U.S. Attorney Annette L. Hayes. BOBBIE DENISE CATTON, 50, pleaded guilty in January 2015 to two counts of possession of stolen mail, one count of access device fraud and one count of aggravated identity theft. At sentencing U.S. District Judge James L. Robart said he wanted to protect the public from “a sophisticated ID theft criminal who is also a drug addict.”
According to records filed in the case, between March of 2013 and January of 2014, CATTON and her cohorts stole large volumes of mail throughout King County from homes and apartment complexes. They used stolen checks, credit and debit card information and identifying documents to commit various types of fraud. When arrested by a King County Sheriff’s Deputy following a traffic stop, CATTON had dozens of credit/debit cards and bank statements in others’ names in her possession, along with financial and identifying information for hundreds of others. Investigators identified 382 victims in the scheme.
In asking for a significant prison sentence, prosecutors highlighted the impact identity theft has on victims. “For individual victims, the time and money required to repair the immediate damage is only the beginning. Once stolen, their identities become a commodity capable of being bought, sold, and traded. Apprehension and prosecution of the initial perpetrator may do little to end a victim’s ordeal. They must remain vigilant and continually invest extra time, and money monitoring their financial lives,” prosecutors wrote in their sentencing memo.
CATTON was previously prosecuted federally in 2002 for identity fraud and was sentenced to 33 months in prison.
The case was investigated by the King County Sheriff’s Office and the U.S. Postal Inspection Service (USPIS). The case was prosecuted by Assistant United States Attorney Matthew Hampton.
Ray M. Mubarak Pleads Guilty to Bank Fraud SchemeRead the Press Release
KNOXVILLE, Tenn. - Ray M. Mubarak, 55, of Knoxville, Tenn., pleaded guilty on May 18, 2015, in the U.S. District Court for the Eastern District of Tennessee, to conspiracy to commit bank fraud, bank fraud, and engaging in an unlawful monetary transaction with bank fraud proceeds. Sentencing has been set for 10:00 a.m., on September 28, 2015.
Mubarak faces a maximum of up to 130 years in prison, as well as supervised release following incarceration, restitutions, and fines. Pursuant to the plea agreement, Mubarak admitted that the loss to the banks resulting from the scheme was more than $1,000,000, but less than $2,500,000.
The plea agreement on file with the U.S. District Court details the scheme to which Mubarak admitted, including providing false tax returns and financial statements to Pinnacle National Bank, SmartBank, and Bank of America in association with loans totaling in excess of $6,000,000. Mubarak further admitted to using loan proceeds for purposes other than those for which he represented the funds would be used, including paying gambling debts, making deposits to a personal stock trading account, and purchasing vehicles.
Agencies involved in the investigation leading to the indictment and guilty plea included the Internal Revenue Service - Criminal Investigation and Federal Bureau Investigation. The investigation and prosecution of Mubarak was coordinated with the Office of the District Attorney General, Sixth Judicial District. Matthew T. Morris, Assistant U.S. Attorney, represented the United States.
Pharmacist Found Guilty in Manhattan Federal Court of Misbranding and Fraud Offenses Arising from Internet Pharmacy SchemeRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that LENA LASHER, a licensed pharmacist, was found guilty in federal court of misbranding and fraud offenses arising from an Internet pharmacy scheme. LASHER was convicted on Friday, May 15, in Manhattan federal court after a two-week trial before U.S. District Judge Naomi Reice Buchwald.
According to the Indictment, and Superseding Indictment, public filings, and evidence presented at trial:
From 2008 through late November 2012, LASHER, along with others, engaged in a scheme to dispense prescription drugs, including addictive pain medications, to customers who ordered them online, without meeting or consulting with a physician. Over the course of the scheme, LASHER, a licensed pharmacist who was the Pharmacist-In-Charge at Hellertown Pharmacy in Hellertown, Pennsylvania, and who supervised a second pharmacy, Palmer Pharmacy & Much More in Easton, Pennsylvania, dispensed and caused others to dispense hundreds of thousands of pain pills without valid prescriptions.
LASHER also directed employees at the two pharmacies she supervised to ship pills in vials with false or misleading labels. At LASHER’s direction, instructions on the labels for how often a customer should take certain drugs were often altered, and the descriptions on the labels regarding the quantity of pills in the pill vial were often inaccurate. She also directed employees to take pills that had been returned by customers or delivery services, remove the labels, and then to re-dispense the pills to other customers with new labels, without informing those new customers that they were receiving pills that had previously been dispensed to others. LASHER also instructed her employees to store pills without required information, such as a lot number or expiration date.
As part of her effort to conceal the nature of the Internet pharmacy business at both pharmacies, LASHER made false representations to multiple state boards of pharmacy and to an investigator with the Commonwealth of Pennsylvania. LASHER also instructed her employees to use code when talking about the Internet pharmacy scheme, telling them to refer to prescription drugs dispensed pursuant to prescriptions obtained over the Internet as “nursing home meds” and not to use the word “Internet” in describing the pharmacies’ business to walk-in customers or the United States Post Office.
* * *
LASHER, 47, of High Bridge, New Jersey, was convicted of one count of conspiracy to introduce misbranded prescription drugs into interstate commerce and to misbrand prescription drugs while held for sale, with intent to defraud or mislead, which carries a maximum sentence of five years; one count of introducing misbranded prescription drugs into interstate commerce, with intent to defraud or mislead, which carries a maximum sentence of three years; one count of conspiracy to commit mail fraud and wire fraud, which carries a maximum sentence of 20 years; one count of mail fraud, which carries a maximum sentence of 20 years; and one count of wire fraud, which carries a maximum sentence of 20 years. LASHER was acquitted of one count of witness tampering. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge.
LASHER, who is scheduled to be sentenced on September 2, 2015 at 2 p.m., was arrested on November 29, 2012, along with Peter J. Riccio, the owner of Hellertown Pharmacy and Palmer Pharmacy & Much More, multiple physicians, and others involved in the Internet pharmacy scheme. Other than defendant Gergana Chervenkova, who remains at large abroad, and who is presumed innocent unless and until proven guilty, all defendants in the case have been convicted.
United States Attorney Bharara praised the investigative work of the Drug Enforcement Administration, the Food and Drug Administration, Office of Criminal Investigations, and the United States Postal Inspection Service, and expressed his appreciation for the assistance of the Commonwealth of Pennsylvania, Department of State, and the New Jersey Department of Law & Public Safety, Division of Law, Professional Boards Prosecution Section.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Daniel C. Richenthal and Kristy J. Greenberg are in charge of the prosecution.15-127
Oregon Man Pleads Guilty to Traveling to Missouri to Engage in Illicit SexRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a LaGrande, Ore., man pleaded guilty in federal court today to traveling across states lines to Missouri to engage in illicit sexual activity with two minors, whom he believed were the daughters of an undercover law enforcement officer.
Abdul Lamont Gamble, 40, of LaGrande, Ore., pleaded guilty before U.S. Chief District Judge Greg Kays to the charge contained in an April 30, 2014, federal indictment.
By pleading guilty today, Gamble admitted that he traveled from Oregon to Missouri between March 25 and April 9, 2014, to engage in illicit sexual conduct with a minor and a commercial sex act with a minor.
Gamble contacted an undercover law enforcement officer through an online social media site in October 2013 and offered to have sex with her fictitious 12-year-old and 15-year-old daughters. Gamble engaged in numerous conversations with the undercover detective through late 2013 and early 2014 via this social media site, email and text messages. Gamble described the specific sexual acts he intended on performing with and on the two minor females, for which he agreed to pay $250.
Gamble traveled to Kansas City, Mo., on a Greyhound bus and arrived on April 9, 2014. The undercover officer met him at the bus station. Gamble reconfirmed the sexual acts he intended on performing on and with the two minor girls.
Gamble and the undercover officer stopped at a CVS on Independence Avenue. Police officers arrested Gamble when he exited the car and began to approach the CVS.
Under federal statutes, Gamble is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick D. Daly. It was investigated by the Kansas City, Mo., Police Department and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Olshen Pleads Guilty to Mail Fraud, Money Laundering in Connection with Fraud Scheme Involving Sports DrinkRead the Press Release
SALT LAKE CITY – Randy Olshen, age 52, of Newport Beach, Calif., indicted by a federal grand jury in September on charges of mail fraud, wire fraud, and money laundering in connection with an investment fraud scheme, entered guilty pleas to money laundering and wire fraud Friday in federal court. At times relevant to the charges in the case, Olshen maintained a residence in Summit County, Utah.
Olshen was one of the founders and president of an entity known as Innovative Health Solutions, LLC (IHS), organized in 2008. IHS specialized in manufacturing and selling sports hydration drinks designed to boost energy and stamina. Olshen, in an effort to promote the growth of IHS, sought investors and made representations to encourage investments in the company.
As a part of the plea agreement reached with federal prosecutors, Olshen admitted that beginning around 2009 and continuing until about February 2013, he devised a scheme to get money and property from IHS investors through materially false representations and the omissions of material facts. He also admitted he diverted portions of the invested funds for purposes not disclosed to or authorized by investors.
For example, Olshen admitted in the plea agreement that he represented to victim investors that IHS had approximately $1.1 million in sales in 2009, when it had approximately $98,275 in sales in 2009. He represented that IHS had projected sales of more than $28 million in sales in 2012, when it had approximately $579,239 in sales in 2012. He also represented that the company had large receivable accounts with various national chains such as Costco, Rite Aid, CVS, and Food Lion. In fact, no such large receivable accounts were owed to IHS.
Olshen admitted he created two sets of IHS accounting records, one that accurately represented company finances and one that was provided to investors and potential investors; fabricated paperwork, such as sales records, to support his misrepresentations regarding the growth of IHS; failed to make numerous payments to creditors; paid a portion of investor funds to others as commissions for obtaining investments for IHS; that he personally declared Chapter 7 bankruptcy around October 18, 2011; and that he used IHS funds for his own personal benefit and expenses in excess of his reported salary. He concealed these material facts from investors as a part of his fraud scheme.
The loss to IHS victim investors resulting from his scheme is approximately $7 million. A final figure will be determined at sentencing. There are more than 50 victims.
The plea agreement includes a recommended sentence of 54 months in federal prison and 36 months of supervised release at the conclusion of the prison term. The sentence is subject to the approval of the court. Sentencing in the case is set for July 29, 2015, at 2:30 p.m.
The case is being investigated by special agents of the FBI, IRS Criminal Investigation, and the Utah Division of Securities. It is being prosecuted by the U.S. Attorney’s Office in Salt Lake City.
Mexican National Sentenced to 5 Years for Participating in a Brutal Family-Run Sex Trafficking OrganizationRead the Press Release
The Department of Justice today announced that United States District Judge Jose E. Martinez of the Southern District of Florida sentenced defendant Carmen Cadena, 48, a Mexican national, to serve five years in prison for her role in a brutal family-run sex trafficking organization. The defendant shall also be ordered to pay restitution and hearing is set on August 10, 2015 to determine the amount.
The defendant pleaded guilty on Jan. 26, 2015, for her role in furthering the criminal conspiracy to lure vulnerable, undocumented Mexican women and girls—some as young as 14 years old—into the United States on false promises of legitimate jobs. Members of the Cadena organization would then use force and violence, sexual assaults and threats to harm to the victims and their families to compel the victims to engage in prostitution in South Florida, 12 hours a day, six days a week and turn over the proceeds to the defendants in order to pay smuggling debts the defendants imposed. When victims ran away, members of the Cadena organization searched for them and subjected them to beatings and rapes upon capture.
Sixteen defendants were charged in a superseding indictment filed in 1998. Mexican authorities arrested Cadena and extradited her to the U.S. in December 2014. Five other family members have been convicted, including Cadena’s husband, Juan Luis Cadena-Sosa, who pleaded guilty in 2008 and was sentenced to 15 years; Cadena’s uncle-in-law, Rogerio Cadena, who pleaded guilty in 1999 and was sentenced to 15 years; and three of Cadena’s brothers-in-law, Abel Cadena-Sosa, who was convicted in Mexico and sentenced to 24 years, and Hugo and Rafael Cadena-Sosa, who pleaded guilty in 2002 and 2014, and were sentenced to five years and 15 years respectively.
Six other defendants previously pleaded guilty in federal court in connection with the scheme, and one was convicted in state court for a murder outside a Cadena-run brothel.
“Today’s sentence marks the culmination of our long fight for justice over the past 16 years on behalf of the young women and girls whose lives were torn apart by the unspeakable violations they endured at the hands of their traffickers,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The relentlessness of our efforts is rivaled only by the courage the survivors demonstrated in coming forward and partnering with us for over a decade to see the perpetrators brought to justice. We are humbled by their resilience and resolve, and we are unwavering in our commitment to combating modern-day slavery.”
“Since 1998, the U.S. Attorney’s Office has worked tirelessly with international, federal, state and local law enforcement agencies to bring to justice sixteen defendants who preyed on vulnerable women and children through documented violence and horrific sexual abuse,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Today’s sentencing of Defendant Carmen Cadena allowed those who were exploited to bear witness to justice.”
“The sentencing of Carmela Cadena concludes a significant investigation of human trafficking and civil rights violations that included the investigative efforts and collaboration of several federal, state and local law enforcement agencies,” said Special Agent in Charge George L. Piro of the FBI’s Miami Field Office. “This investigation brought to an end a brutal family-run sex trafficking organization and helped raise awareness about human trafficking and involuntary servitude in the form of forced prostitution.”
Acting Assistant Attorney General Gupta and United States Attorney Ferrer praised the collaborative efforts of multiple law enforcement agencies involved throughout the investigations and subsequent prosecutions over the years, including the Federal Bureau of Investigation, the Department of Homeland Security’s Customs and Border Protection and Immigration and Customs Enforcement, the Bureau of Alcohol, Tobacco and Firearms, Florida Department of Law Enforcement, Palm Beach County Sheriff’s Office, West Palm Beach Police Department, Okeechobee County Sheriff’s Office, Fort Pierce Police Department, Avon Park Police Department, Boynton Beach Police Department, and Lee County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Adam McMichael and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Mexican National Sentenced to 5 Years for Participating in a Brutal Family-Run Sex Trafficking OrganizationRead the Press Release
The Department of Justice today announced that United States District Judge Jose E. Martinez of the Southern District of Florida sentenced defendant Carmen Cadena, 48, a Mexican national, to serve five years in prison for her role in a brutal family-run sex trafficking organization. The defendant shall also be ordered to pay restitution and hearing is set on August 10, 2015 to determine the amount.
The defendant pleaded guilty on Jan. 26, 2015, for her role in furthering the criminal conspiracy to lure vulnerable, undocumented Mexican women and girls—some as young as 14 years old—into the United States on false promises of legitimate jobs. Members of the Cadena organization would then use force and violence, sexual assaults and threats to harm to the victims and their families to compel the victims to engage in prostitution in South Florida, 12 hours a day, six days a week and turn over the proceeds to the defendants in order to pay smuggling debts the defendants imposed. When victims ran away, members of the Cadena organization searched for them and subjected them to beatings and rapes upon capture.
Sixteen defendants were charged in a superseding indictment filed in 1998. Mexican authorities arrested Cadena and extradited her to the U.S. in December 2014. Five other family members have been convicted, including Cadena’s husband, Juan Luis Cadena-Sosa, who pleaded guilty in 2008 and was sentenced to 15 years; Cadena’s uncle-in-law, Rogerio Cadena, who pleaded guilty in 1999 and was sentenced to 15 years; and three of Cadena’s brothers-in-law, Abel Cadena-Sosa, who was convicted in Mexico and sentenced to 24 years, and Hugo and Rafael Cadena-Sosa, who pleaded guilty in 2002 and 2014, and were sentenced to five years and 15 years respectively.
Six other defendants previously pleaded guilty in federal court in connection with the scheme, and one was convicted in state court for a murder outside a Cadena-run brothel.
“Since 1998, the U.S. Attorney’s Office has worked tirelessly with international, federal, state and local law enforcement agencies to bring to justice sixteen defendants who preyed on vulnerable women and children through documented violence and horrific sexual abuse,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Today’s sentencing of Defendant Carmen Cadena allowed those who were exploited to bear witness to justice.”
“Today’s sentence marks the culmination of our long fight for justice over the past 16 years on behalf of the young women and girls whose lives were torn apart by the unspeakable violations they endured at the hands of their traffickers,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The relentlessness of our efforts is rivaled only by the courage the survivors demonstrated in coming forward and partnering with us for over a decade to see the perpetrators brought to justice. We are humbled by their resilience and resolve, and we are unwavering in our commitment to combating modern-day slavery.”
“The sentencing of Carmela Cadena concludes a significant investigation of human trafficking and civil rights violations that included the investigative efforts and collaboration of several federal, state and local law enforcement agencies,” said Special Agent in Charge George L. Piro of the FBI’s Miami Field Office. “This investigation brought to an end a brutal family-run sex trafficking organization and helped raise awareness about human trafficking and involuntary servitude in the form of forced prostitution.”
United States Attorney Ferrer and Acting Assistant Attorney General Gupta praised the collaborative efforts of multiple law enforcement agencies involved throughout the investigations and subsequent prosecutions over the years, including the Federal Bureau of Investigation, the Department of Homeland Security’s Customs and Border Protection and Immigration and Customs Enforcement, the Bureau of Alcohol, Tobacco and Firearms, Florida Department of Law Enforcement, Palm Beach County Sheriff’s Office, West Palm Beach Police Department, Okeechobee County Sheriff’s Office, Fort Pierce Police Department, Avon Park Police Department, Boynton Beach Police Department, and Lee County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Adam McMichael and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
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.
Man Sentenced to 19 1/2 Years in Prison for Swindling Millions from Persons in Golf Course SchemeRead the Press Release
RENO, Nev. – A man who made false statements and used phony documents to solicit millions from victims who thought they were helping him purchase a golf course in Gardnerville, Nev., was sentenced today to 19½ years in prison, three years of supervised release, and ordered to pay $1.4 million in restitution, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Scott H. Summerhays, 56, currently in custody, but formerly of the South Lake Tahoe area, was sentenced by Senior U.S. District Judge Larry R. Hicks. Summerhays pleaded guilty in February 2014 to 14 counts of wire fraud, seven counts of money laundering, two counts of identity theft, and one count of aggravated identity theft.
“If you are considering a financial arrangement with someone, be sure to check the veracity of any documents they provide you, as fraudulent documents are common and easy to create,” said U.S. Attorney Bogden.
According to the court records, during 2008 to 2010, Summerhays represented to potential investors that he was purchasing the Genoa Lakes Golf Club located west of Gardnerville, Nev. for $17 million and needed a short term loan to complete the deal because his own money was tied up in a trust. Summerhays also represented to the potential investors that he solicited funds for oil and gas investments in Texas and owned over $30 million in Berkshire, Las Vegas Sands and MGM stocks. Summerhays showed some of the investors a fraudulent investment account statement. Summerhays also claimed that he was in partnership with Las Vegas Sands owner Sheldon Aldelson, and showed potential investors a partnership agreement containing the forged signature of Adelson. In reality, Summerhays had no investment portfolio, and Adelson never heard of Summerhays or had any partnerships with him. Using this scheme, Summerhays was able to convince 11 persons to loan him money for the golf course, totaling approximately $3.6 million. None of the investors were repaid and they lost all of the money they loaned Summerhays.
The case was investigated by the FBI and IRS Criminal Investigation, and prosecuted by Assistant U.S. Attorney Megan Rachow.
“The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
Los Angeles Man Who Produced Child Pornography by Photographing Girl While in Philippines Sentenced to Life in Federal PrisonRead the Press Release
LOS ANGELES – A Los Angeles man who was convicted of producing child pornography in the Philippines while being required to register as a sex offender due to his prior conviction for raping a 14-year-old girl was sentenced today to life without parole in federal prison.
Stanley Dan Reczko III, 50, who resided in the Koreatown District of Los Angeles, was sentenced today by United States District Judge George H. King, who in March found the defendant guilty of producing child pornography while being required to register as a sex offender.
“This defendant has a life-long history of violent behavior,” said Acting United States Attorney Stephanie Yonekura. “He has received treatment and counseling, but in light of this case, the help offered to him appears to have had no effect. Even though he has previously served prison time for the rape of a minor, this punishment did not deter his behavior. In light of his recidivism, the life prison sentence is richly deserved.”
In the first part of a bifurcated trial, a federal jury in February found Reczko guilty of sexual exploitation by producing child pornography in the Philippines.
Reczko received the life sentence for the sexual exploitation charge, and he received a consecutive 10-year term for producing child pornography while being required to register as a sex offender.
Reczko has been in custody since 2007, when he was arrested after returning to the United States by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
“This sentence should serve as a warning to sexual predators who mistakenly believe they can escape justice by exploiting children overseas,” said Mark Selby, deputy special agent in charge for HSI Los Angeles. “There can be no place for the abuse of foreign children by our citizens, and HSI will seek to vindicate the rights of those victims no matter how far they live from our shores. Fortunately, the sentence imposed today virtually assures that no additional children will be harmed by this defendant.”
Authorities began investigating Reczko in May 2007 after the minor victim handed over a CD containing child pornography to the International Justice Mission (IJM), a non-governmental organization working in the Philippines. IJM provided the CD, along with other evidence, to law enforcement officers working out of the U.S. Embassy in Manila. The evidence showed that Reczko had used the minor to produce eight series of child pornography, which included images of him and the victim engaging in sexual intercourse.
Reczko sexually, physically, emotionally, and mentally abused the victim for three years, according to prosecutors.
Release No. 15-047
Lakeland Man Sentenced to 20 Years in Federal Prison for Gun and Drug OffensesRead the Press Release
Tampa, FL – U.S. District Judge James D. Whittemore has sentenced Wayne “Bam Bam” Broderick (39, Lakeland) to 20 years in federal prison for possession of cocaine with intent to distribute and possession of firearms during and in relation to a drug trafficking crime. He pleaded guilty on February 24, 2015.
According to court documents, on February 21, 2014, the Lakeland Police Department (LPD) searched Broderick’s apartment in Lakeland and recovered crack cocaine, marijuana, drug paraphernalia consistent with cooking, packaging, and selling crack cocaine, loaded firearms, including a Hi-Point .40 caliber pistol, a Smith & Wesson .357 caliber revolver, a Browning 9mm pistol, approximately $881 in cash, other ammunition, and evidence of stolen identity refund fraud, including a ledger of stolen personal identifying information.
Again, on June 27, 2014, LPD conducted a search of Broderick’s residence after observing him selling narcotics from his doorway, and found him to be in possession of ammunition, marijuana, crack cocaine, drug paraphernalia, and a loaded Springfield Armory M1911 .45 semi-automatic pistol. Broderick had numerous prior convictions for drug trafficking offenses, and at least one crime of violence that qualified him as a career offender.
This case was investigated by the Lakeland Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the United States Secret Service. It was prosecuted by Assistant United States Attorney Mandy Riedel.
Kennesaw Man Sentenced for Producing Child PornographyRead the Press Release
ATLANTA - Shawnston Beaudoin has been sentenced to 22 years in federal prison for producing child pornography.
“Producing child pornography is an unspeakable crime,” said Acting U.S. Attorney John Horn. “Beaudoin preyed on the vulnerable and innocent of our society for his own personal pleasure. This office’s Project Safe Childhood program is dedicated to searching out and prosecuting anyone who victimizes children to contribute to the child pornography market.”
“Those who collect and distribute child pornography victimize and exploit the children in those images again with each re-distribution. To have an individual such as Mr. Beaudoin, who was actually producing child pornography, off of our streets is a major step toward protecting our community’s children from those who would prey on them,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to Acting U.S. Attorney Horn, the charges and other information presented in court: In February 2014, the FBI received information that Shawnston Beaudoin was collecting and distributing child pornography. On March 5, 2014, FBI agents executed federal search warrants at Beaudoin’s apartment and at a business that he managed in Kennesaw, Georgia. Beaudoin initially admitted to having child pornography but denied having any inappropriate contact with a child. He agreed to take a polygraph test to support his claim.
During the polygraph test, his answers to key questions indicated that he was being deceptive. At that time, he admitted to FBI agents that they would find homemade pornographic images of young girls on his computers. The forensics analysis of his computers revealed that he had personally produced pornographic images of three different children between 2005 and 2013.
Shawnston Beaudoin, 31, of Kennesaw, Georgia, has been sentenced to 22 years in prison to be followed by lifetime supervised release. Beaudoin was convicted on these charges on March 4, 2015, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Paul R. Jones prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
KC Man Charged with Bank Robbery after Fleeing Through Nearby HomeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man who tried to flee from police by breaking into a nearby home was charged in federal court today with robbing the Commerce Bank in the Brookside area on Saturday morning.
Frank L. White, 35, of Kansas City, was charged in the U.S. District Court in Kansas City, Mo., with one count of bank robbery.
Today’s criminal complaint alleges that White stole $1,971 from Commerce Bank, 6336 Brookside Place, Kansas City, Mo., on Saturday, May 16, 2015.
According to an affidavit filed in support of the federal criminal complaint, White originally came into the bank that morning, approached a teller while she was helping a customer and asked when the bank closed. He then left the bank and returned about 10 or 15 minutes later. White approached a teller station while she was helping another customer, the affidavit says, and she told him to step back. Another teller told him they could help him in a moment. White came back to the first teller station, the affidavit says, and was fumbling with a white piece of lined notebook paper that he was not able to get open. The teller locked her bottom teller drawer. White allegedly told the teller not to press any buttons, but she activated the alarm. White allegedly demanded money, stating words to the effect of “give me all the money in the drawer, give me everything” and “give me all the 100’s.” The teller gave White all of the money in her top drawer, the affidavit says, and White left the bank.
Kansas City police officers spotted White walking quickly eastbound on 65th Street across Holmes, according to the affidavit. When White saw their unmarked car, he allegedly began to run through the back yard of a residence on Holmes. The officers pursued on foot, with several citizens showing them the direction where White was running.
As officers entered the back yard of a residence on East 65th Terrace, they saw a broken rear door window. The owner of the residence was in the front yard and pointed the direction White was running. The homeowner later told police that when White broke into his house, he stated several times, “I have a gun, give me the keys to your car.” The homeowner kept telling White, “No, get out of my house” and told him the police were coming. White ran out the front door without taking anything.
When the officers reached the back of another residence on East 65th Terrace, White was being taken into custody by other responding officers.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce E. Clark. It was investigated by the FBI and the Kansas City, Mo., Police Department.
Justice Department Charges Owner of Indiana Mobile Home Park with Discrimination Against Families with ChildrenRead the Press Release
The Justice Department today filed a lawsuit against the corporate owner and agent of the Gentle Manor Estates, a 173-lot mobile home park located in Crown Point, Indiana, for discriminating against families with children in violation of the Fair Housing Act.
The lawsuit, filed in the U.S. District Court for the Northern District of Indiana, alleges that Gentle Manor Estates, LLC and John Townsend, the corporate owner and agent, respectively, of the Gentle Manor Estates, violated the Fair Housing Act by maintaining and enforcing a discriminatory policy of refusing to allow families with children to live at the mobile home park. The allegations are based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“For over 25 years, the Fair Housing Act has prohibited housing providers from discriminating against families with children,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure that families with children have equal access to housing opportunities.”
The lawsuit seeks an order prohibiting the defendants from engaging in future unlawful discrimination. It also seeks the payment of a civil penalty and monetary damages for the individuals who were refused the opportunity to rent at Gentle Manor Estates because of familial status.
Individuals who may have information related to this lawsuit should contact the Justice Department toll-free at 1-800-896-7743, mailbox 9994, or e-mail the Justice Department at [email protected]. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Judge Sentences Felon to 7+ Years in Prison for Illegally Possessing WeaponRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been sentenced in federal court to 92 months imprisonment on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Jarron Darvez Jackson, 31.
According to information presented to the court, On April 16, 2011, Jackson became involved in a physical altercation inside the McDonald’s restaurant on Sassafras Street in Erie, Pennsylvania. After the altercation, Jackson retrieved a Kimber .45 caliber handgun from his vehicle and shot at other individuals as they were driving away from the restaurant. Jackson was prohibited from firearm possession because of his prior criminal convictions.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Erie Police Department for the investigation leading to the successful prosecution of Jackson.
Justice Department Charges Owner of Indiana Mobile Home Park with Discrimination Against Families with ChildrenRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against the corporate owner and agent of the Gentle Manor Estates, a 173-lot mobile home park located in Crown Point, Indiana, for discriminating against families with children in violation of the Fair Housing Act.
The lawsuit, filed in the U.S. District Court for the Northern District of Indiana, alleges that Gentle Manor Estates, LLC and John Townsend, the corporate owner and agent, respectively, of the Gentle Manor Estates, violated the Fair Housing Act by maintaining and enforcing a discriminatory policy of refusing to allow families with children to live at the mobile home park. The allegations are based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“For over 25 years, the Fair Housing Act has prohibited housing providers from discriminating against families with children,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure that families with children have equal access to housing opportunities.”
The lawsuit seeks an order prohibiting the defendants from engaging in future unlawful discrimination. It also seeks the payment of a civil penalty and monetary damages for the individuals who were refused the opportunity to rent at Gentle Manor Estates because of familial status.
Individuals who may have information related to this lawsuit should contact the Justice Department toll-free at 1-800-896-7743, mailbox 9994, or e-mail the Justice Department at [email protected]. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
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Individual Sentenced to 72 Months in Prison for Wire Fraud and Money LaunderingRead the Press Release
San Juan, Puerto Rico – On May 13, 2015, defendant Miguel A. Merced-Torres was sentenced to a term of imprisonment of 72 months (six years), followed by three years of Supervised Release Term by US District Court Judge Jay A. García-Gregory, announced United States Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez.
On April 24, 2014, a federal grand jury returned an 18-count indictment charging the defendant for the use of interstate wired communications to commit fraud and money laundering. Miguel A. Merced-Torres plead guilty on September 2, 2014. The investigation was conducted by the Federal Bureau of Investigation and the United States Secret Service.
Merced-Torres was the incorporator and resident agent of MM Technology Wireless Group, a corporation registered with the Puerto Rico State Department since June 9, 2009. From on or about July, 2006, to on or about February, 2013, the defendant devised a scheme and artifice to defraud other persons, and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises.
Through the scheme Merced-Torres obtained money from investors by falsely representing himself as a representative of the Federal Communications Commission, hereinafter “FCC.” Merced-Torres falsely promised said investors that they were going to receive financial benefits and profits from their investments in cellular tower administration contracts. The defendant would convince victims to invest money by falsely representing that the FCC was actively seeking individuals to invest money in exchange for the FCC’s issuance of cellular tower administration contracts, which would render considerable profit for the investors.
Merced-Torres requested and received bank wire transfers totaling the sum of approximately $15,000,000 from all the victims.
Miguel Merced-Torres is facing a money judgment of $9,089,777.37. During a two day hearing the victims addressed the Court on the monetary losses they suffered and how it affected their lives. The Court reserved judgment and will impose restitution on a later date. Merced-Torres is also facing a forfeiture allegation of: a land lot located at Turabo Ward in the municipality of Caguas; a residential apartment located at Islabella Condominium in Caguas; a land lot located at Tomas de Castro Ward in Caguas; an apartment at Villas del Mar Condominium in the municipality of Cabo Rojo; a land lot located at La Serranía Urbanization in Caguas; a lot located in Turabo Gardens Urbanization in Caguas; a land lot located at Tejas Ward in the municipality of Las Piedras; a land lot located in San Lorenzo Valley Urbanization in the municipality of San Lorenzo; and a house located on Calle Rufo Ramirez, Barrio Celada, in the municipality of Gurabo.
“This individual defrauded investors who trusted him with their savings and he stole money from them for personal gain. The U.S. Attorney’s Office will continue to prosecute financial crimes and protect the citizens of Puerto Rico,” said United States Attorney Rosa Emilia Rodríguez-Vélez. “Although this sentence can’t by itself undo the damage suffered by the many victims of this fraudulent scheme, justice was done.”
The case was prosecuted by Assistant U.S. Attorney Olga Castellón.
Head Administrator of Online Bulletin Board Sentenced for Promoting Child PornographyRead the Press Release
A German citizen was sentenced today to six years in prison for operating a web-based bulletin board for child pornography.
The sentence was announced by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Postal Inspector in Charge Gary Barksdale of the U.S. Postal Inspection Service’s (USPIS) Washington, D.C., Division, Postal Inspector in Charge Robert Wemyss of the USPIS Los Angeles Division and Special Agent in Charge Claude Arnold of the U.S. Immigration and Customs Enforcement’s Office of Homeland Security Investigations (ICE-HSI) Los Angeles.
Klaus Von Der Heide, 51, of Berlin, pleaded guilty on July 15, 2014, in U.S. District Court for the District of Columbia to one count of conspiring to promote child pornography, one count of promoting child pornography and one count of transporting child pornography.
According to his plea agreement, from April 2011 through February 2014, Von Der Heide and others conspired to operate Cam-Foundation, a secure web-based bulletin board that traded images of child pornography, mostly in the form of self-produced webcam images. Members could join this group only upon invitation and after approval by the group’s administrators, including Von Der Heide. As of February 2014, 719 members belonged to Cam-Foundation, which was hosted on computer servers under Von Der Heide’s control and located in Germany.
Von Der Heide, as the lead administrator, maintained Cam-Foundation and controlled the design, creation and management of the site, and oversaw its day-to-day operations. Von Der Heide published rules and guidelines regarding membership, posting and accessing images on the site and payment to belong to the site. Von Der Heide solicited fees from Cam-Foundation members to be paid directly to him in order to cover the cost of a new cloud storage system that he controlled. Von Der Heide encouraged Cam-Foundation members to meet him in person within the United States to personally hand him money for Cam-Foundation membership. He traveled to the United States to collect the money and was arrested by federal law enforcement.
The case was investigated by the USPIS Washington, D.C., and Los Angeles Divisions and the HSI Los Angeles in collaboration with the HSI-led Orange County, California, Child Exploitation Task Force. This case was prosecuted by Trial Attorney Jennifer Toritto Leonardo of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Hartford Crack Dealer Sentenced to 10 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSHUA EASTERLING, also known as “Skeet,” “Squash” and “SQ,” 28, of Hartford, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 120 months of imprisonment, followed by eight years of supervised release, for distributing crack cocaine.
This matter stems from “Operation Vinefield,” a joint law enforcement investigation headed by the FBI’s Northern Connecticut Violent Crimes Task Force targeting narcotics trafficking and gang violence in Hartford’s North End. As a result of the nine-month investigation, 38 individuals were charged with various offenses related to the distribution of crack cocaine and the unlawful possession and dealing of firearms in and around Hartford.
According to court documents and statements made in court, the investigation revealed EASTERLING controlled the distribution of crack cocaine in Hartford’s lower Vine Street area. EASTERLING distributed crack to other street-level dealers, and also sold the drug directly to customers.
During the investigation, EASTERLING’s drug trafficking organization was responsible for distributing more than six kilograms of crack.
EASTERLING’s criminal history includes several felony convictions.
EASTERLING has been detained since his arrest on February 23, 2012, and he pleaded guilty on February 15, 2013.
This matter was investigated by the FBI’s Northern Connecticut Violent Crimes Task Force, the Connecticut State Police, the Hartford Police Department, and the Connecticut Department of Correction. The case was prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Georgia Man Sentenced to Prison in Wire Fraud Scheme That Bilked Airlines by Obtaining Free ‘Non-Rev’ Tickets for Non-EmployeesRead the Press Release
LOS ANGELES – A Georgia man who fraudulently booked airline reservations by pretending to be a flight crew member was sentenced today to six months in federal prison, as well as six months of home detention.
Gilbert Myers Jr., 38, of Atlanta, was sentenced this afternoon in Los Angeles by United States District Judge Dean D. Pregerson.
In addition to the prison term, Judge Pregerson ordered Myers to pay $91,660 in restitution to the victim airlines.
Myers pleaded guilty in January to conspiracy to commit wire fraud, admitting that he orchestrated a scheme to defraud air carriers by having travelers illegally board aircrafts while pretending to be employees of other airlines. In exchange for arranging their travel as “non-rev” employee travelers, Myers typically charged approximately $2,000 for one year of unlimited free flights.
Myers fraudulently booked hundreds of flights on victim airlines that include AirTran Airways, JetBlue, Spirit Airlines, Sun Country Airlines and United Airlines.
The fraudulent travelers utilized Myers’ services to fly in and out of Los Angeles County airports by pretending to be in-flight crew members employed by other airlines. To obtain boarding passes and stand-by tickets (for which airline employees pay little or nothing, hence non-revenue), Myers called the victim airline’s reservation call center and gave the victim airline’s representative the name of a traveler, the airline he supposedly worked for, a bogus employee identification number, and a date of hire. Myers typically lied to the victim airline and said he worked on a flight crew for another airline, according to court documents.
Myers advised the fraudulent travelers to avoid detection by dressing appropriately and responding to questions about their employment at another airline. With the fraudulently obtained boarding pass and their real photo identification, the fraudulent traveler went through Transportation Security Administration security screening. The fraudulent travelers boarded planes listed as employees of other airlines. All of the travelers were subject to full security screenings by the Transportation Security Administration.
In the plea agreement, Myers admitted to several specific, fraudulent booking calls. As part of the conspiracy, Myers acknowledges that he “fraudulently booked these and hundreds of other flights with victim airlines.”
The fair market value of the fraudulently obtained plane tickets was more than $277,000, and attorneys in the case agreed that the applicable amount of restitution is approximately $91,660.
All of the victim airlines fully cooperated in the investigation.
Myers was arrested in July 2014 without incident at a Beverly Hills hotel after agreeing to meet a potential traveler who was actually an undercover FBI agent.
The case against Myers is the result of an investigation by the FBI’s Joint Terrorism Task Force.
Release No. 15-048
Garden City Resident Pleads Guilty to ThreateningRead the Press Release
SAVANNAH, GA – David Nolan Evans, 41, of Garden City, Georgia pled guilty last week before United States District Court Judge William T. Moore, Jr. for threatening to blow up the State Probation Office in Savannah.
Evidence presented at the guilty plea hearing revealed that Evans, who was on state probation at the time, called the 911 center on December 22, 2014 and threatened to use an explosive device to kill people at the State Probation Office in Savannah. As a result of his call, the Probation Office was evacuated. Later in January 2015, Evans constructed a fake bomb that he planted in a rest room at the State Probation Office. When questioned by law enforcement, Evans admitted that his threatening actions were motivated by a desire to get out of probation reporting requirements.
Evans now faces a sentence of up to 10 years in prison, 3 years supervised release, and a $250,000 fine. Evans’ sentencing hearing will be scheduled after the United States Probation Office completes a presentence investigation.
The Indictment arose out of a joint investigation by the FBI, the ATF, the Savannah Probation Office and Parole, and the Savannah-Chatham Metropolitan Police Department. Assistant United States Attorney Charlie Bourne is prosecuting the case on behalf of the United States. Any further questions should be directed to First Assistant James D. Durham at (912) 201-2547.
Fourth MS-13 Member Pleads Guilty in Violent Racketeering ConspiracyRead the Press Release
Greenbelt, Maryland – Carlos Beltran-Flores, aka “Joker,” age 23, of Hyattsville, Maryland, pleaded guilty today to conspiracy to participate in a racketeering enterprise known as La Mara Salvatrucha, or MS-13, including murder, attempted murder, assault, extortion and robbery; and carrying, using and brandishing a firearm during a crime of violence.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Mark A. Magaw of the Prince George’s County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; Chief J. Thomas Manger of the Montgomery County Police Department; Chief Alan Goldberg of the Takoma Park Police Department; and Montgomery County State’s Attorney John McCarthy.
MS-13 is a national and international gang composed primarily of immigrants or descendants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County and Montgomery County, Maryland. MS-13 members are required to commit acts of violence both to maintain membership and discipline within the gang and against rival gangs.
According to his plea agreement and court documents, from 2009 until at least 2013, Beltran-Flores was a member of the Peajes Locos Salvatrucha clique of MS-13. Beltran-Flores and MS-13 members committed crimes to further the interests of the gang, including murder, assault, robbery, extortion by threat of violence, obstruction of justice, witness tampering, and witness retaliation.
Beltran-Flores admitted that on September 3, 2010, he and another MS-13 member assaulted and robbed a victim in the area of New Hampshire Avenue in Hyattsville. On November 15, 2010, Beltran-Flores and other MS-13 members robbed two other victims in the area of Jamestown Road in Hyattsville, and one member stabbed the victims.
On January 10, 2011, Beltran-Flores and other MS-13 members murdered a person they believed was a rival gang member, and attempted to murder another purported rival gang member, in the parking lot of the former Shoppers Food Warehouse on University Boulevard in Hyattsville. The group repeatedly punched, kicked, and stabbed the victims, one of which survived the attack. Beltran-Flores helped plan the attack and afterwards, hid the murder weapons in a nearby park.
On January 13, 2011, after attending a Peajes clique meeting at which a member criticized other MS-13 members for not committing enough violent crimes, Beltran-Flores, co-defendant Wilmer Argueta, and other MS-13 members got into a mini-van driven by co-defendant Roni Arriola-Palma. Near the Fort Totten Metro Station, they saw a person they believed was an associate of a rival gang. Argueta and other MS-13 members attacked the victim and dragged him back into the mini-van. Beltran-Flores and others continued to assault him, at times attempting to use a seat belt to strangle the victim. Arriola-Palma eventually parked near a dead end in the vicinity of Chillum Manor Road. Beltran-Flores, Argueta, and others kicked, stabbed and choked the victim. They forcefully stripped the victim of all of his heavy winter clothing in order to stab him. After assaulting the victim near the mini-van, they dragged the victim into the woods, where they left him for dead, and fled. The victim survived the attack.
From March to November, 2011, members of the Peajes clique threatened to kill a fellow MS-13 gang member unless he paid them. Beltran-Flores arranged the extortion payments using Facebook and text messaging to relay the extortion demands to the victim. Beltran-Flores picked up several extortion payments, and sent other members to pick up payments on his behalf.
From September to November 2011 and while incarcerated in the Prince George’s County Corrections Facility, Argueta ordered MS-13 members to kill a victim who planned to testify against him in state court. Acting on this order to kill, Beltran-Flores and two others drove to the victim’s house on November 15, 2011, and spotted the victim in front of his house. Beltran-Flores shot at the victim several times from the moving car, striking the victim once in the chest. A short car chase ensued during which Beltran-Flores threw the gun out of the car. He was arrested with the two other MS-13 members. The victim survived the attack.
Beltran-Flores and the government have agreed that if the Court accepts the plea agreement, Beltran-Flores will be sentenced to between 20 and 40 years in prison. U.S. District Judge Roger W. Titus has scheduled sentencing for November 13, 2015, at 9:00 a.m. Beltran-Flores remains detained pending sentencing.
Francisco Hernandez, age 22, Roni Arriola-Palma, age 25, and Wilmer Argueta, age 23, all of Hyattsville, Maryland, previously pleaded guilty for their roles in the racketeering conspiracy and are scheduled to be sentenced on June 29, June 30, and August 4, 2015, respectively.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, the Prince George’s County and Montgomery County Police Departments, the Prince George’s County State’s Attorney’s Office, the Takoma Park Police Department, and the Montgomery County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein also recognized the Prince George’s County Sheriff’s Office, HSI Baltimore’s Operation Community Shield Task Force, and the Maryland Department of Corrections Intelligence Unit for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau, Lindsay Eyler Kaplan, and Trial Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section, who are prosecuting this case.
Four Persons Charged with Eastern Iowa Bank RobberyRead the Press Release
Shiloh Palmer, 22, Andrew Palmer, 24, Elizabeth Olinger, 26, and Peter Olinger, 42, from Mechanicsville, Iowa, each have been charged with four counts of bank robbery and related offenses. The charges are contained in an Indictment unsealed today in United States District Court in Cedar Rapids.
The Indictment alleges that, on or about April 6, 2015, defendants robbed, and/or aided and abetted the robbery of, the Exchange State Bank of Martelle, Iowa. The Indictment alleges defendants either personally, or aided and abetted, the theft of over $30,000 from an employee of the bank through force, violence, and intimidation; used, carried and brandished two shotguns in furtherance of the bank robbery, or aided and abetted the same; and used fire to commit a federal felony offense, or aided and abetted the same.
If convicted on all charges, each defendant faces a mandatory minimum sentence of 17 years’ imprisonment and a possible maximum sentence of life imprisonment, a $1 million fine, $400 in special assessments, and 16 years of supervised release following any imprisonment.
All four individuals appeared yesterday in federal court in Cedar Rapids and were held without bond. Their next appearance will be a detention hearing set for May 20, 2015, at 9 a.m.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Timothy L. Vavricek and was investigated by the FBI, the Jones County Sheriff’s Office, the Iowa DCI, the Iowa State Fire Marshal’s Office, the Lisbon Police Department, the Mt. Vernon Police Department, the Cedar County Sheriff’s Office, the Mechanicsville Police Department, and the Linn County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-0047-LRR.
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Former Faculty Member at UW Business School Pleads Guilty to Wire Fraud in Connection with ‘Ponzi’ SchemeRead the Press Release
A Seattle man who operated an investment advisory business for more than 20 years, pleaded guilty to wire fraud today in U.S. District Court in Seattle, announced U.S. Attorney Annette L. Hayes. SATYEN CHATTERJEE, a/k/a Satyen Chattopadhyay, 65, owned and operated Strategic Capital Management, Inc. from 1992 until the Washington State Department of Financial Institutions ordered it to cease operating illegally in October 2013. CHATTERJEE, who once taught at the University of Washington Business School, admitted engaging in a scheme to defraud investors between 2007 and 2013. Sentencing is scheduled before U.S. District Judge Thomas S. Zilly on August 20, 2015.
According to records filed in the case and with the Department of Financial Institutions (DFI), the investigation revealed that at least five victims were defrauded of more than $600,000. CHATTERJEE convinced various investors to make investments with him in what he represented were fixed rate securities. But in fact CHATTERJEE transferred the funds to his own bank accounts, used the money for his own expenses, or lost it as a day trader in the stock market. CHATTERJEE also solicited and accepted investments in a nutritional supplement company called Metamune, Inc, but instead of actually using the money for the nutritional supplement company, CHATTERJEE used the money for his own expenses or to pay off prior investors in the fixed rate securities scheme.
For one investor CHATTERJEE created a false account statement making the investor believe his investment was secure. In 2011, CHATTERJEE sent a series of lulling emails to some clients falsely indicating that long time investment associates had defaulted on agreements he had with them, and blaming them for losses in the investments.
Under the terms of the plea agreement, prosecutors will recommend no more than 63 months in prison for CHATTERJEE. However, Judge Zilly is free to sentence CHATTERJEE up to the statutory maximum of 20 years in prison.
The case was investigated by the Washington State Department of Financial Institutions (DFI) and the FBI. The case is being prosecuted by Assistant United States Attorney Justin W. Arnold and Special Assistant United States Attorney Robert Kondrat. Mr. Kondrat is an attorney with DFI.
Former Chief Clerk of the Chatham CountyRead the Press Release
SAVANNAH, GA – Former Chief Clerk of the Chatham County Probate Court, Kim H. Birge, 61, has been indicted by a federal grand jury sitting in Savannah on charges of mail fraud and federal program fraud.
According to the allegations contained in the Indictment, between January 2011 and November 2014, Birge embezzled and stole more than $700,000 from the Probate Court’s bank accounts. Birge would deposit fees and conservatorship funds into the Court’s bank accounts, but would later write checks payable to cash out of those accounts for her personal benefit. In addition, Birge forged the signatures of conservators or their attorneys to create false documentation of conservatorship money being spent or disbursed.
Birge faces a maximum sentence of 20 years in prison, $250,000 fine and 3 years of supervised release on each of the four mail fraud charges, and a maximum sentence of 10 years in prison, $250,000 fine and 3 years of supervised release on the federal program fraud charge. An indictment is only an accusation and is not evidence of guilt. The defendant is entitled to a fair trial, during which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by the United States Secret Service and the Savannah Chatham Metropolitan Police Department. Assistant United States Attorneys Brian T. Rafferty and Scarlett S. Nokes are prosecuting the case on behalf of the United States. Any questions should be directed to First Assistant United States Attorney James D. Durham at (912) 201-2547.
Former Bank of America Executive Sentenced to Serve 26 Months in Prison for Role in Conspiracy and Fraud Involving Investment Contracts for Municipal Bond ProceedsRead the Press Release
A former Bank of America executive was sentenced today for his participation in a conspiracy and scheme to defraud related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced today.
Phillip D. Murphy, the former managing director of Bank of America’s municipal derivatives group from 1998 to 2002, was sentenced to serve 26 months in prison by U.S. District Judge Max O. Cogburn Jr. of the U.S. District Court of the Western District of North Carolina.
On Feb. 10, 2014, Murphy pleaded guilty to participating in multiple fraud conspiracies and schemes with various financial institutions and brokers from as early as 1998 until 2006. Bank of America and other financial institutions, acting as “providers,” offered a certain type of contract – known as an investment agreement – to state, county and local governments and agencies, and not-for-profit entities, throughout the United States. These public entities sought to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects. Public entities typically hire a broker to assist them in investing their money and to conduct a competitive bidding process to determine the winning provider.
“Individual accountability is the cornerstone of protecting the integrity of our financial markets,” said Deputy Assistant Attorney General Brent Snyder of the Antitrust Division’s Criminal Enforcement Program. “This sentence is a result of our continued resolve to vigorously prosecute bank executives whose greed and illegal schemes undermine our free and fair financial markets.”
According to court documents, Murphy conspired with employees of Rubin/Chambers Dunhill Insurance Services Inc., also known as CDR Financial Products, a broker of municipal contracts, and others. Murphy also pleaded guilty to conspiring with others to make false entries in the reports and statements originating from his desk, which were sent to bank management. Murphy conspired with CDR and others to increase the number and profitability of investment agreements and other municipal finance contracts awarded to Bank of America. Murphy won investment agreements through CDR’s manipulation of the bidding process in obtaining losing bids from other providers, which is explicitly prohibited by U.S. Treasury regulations. As a result, various providers won investment agreements and other municipal finance contracts at artificially determined prices. Murphy also submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.
In conjunction with the bid rigging, Murphy and his co-conspirators submitted numerous intentionally false certifications that were relied upon by both municipalities and the Internal Revenue Service (IRS). These false certifications misrepresented that the bidding process had been conducted in a competitive manner that was in conformance with U.S. Treasury regulations. These false certifications caused municipalities to award contracts to Bank of America and other providers based on false and misleading information. The false certifications also impeded and obstructed the ability of the IRS to collect revenue owed to the U.S. Treasury.
“We trust those in positions of leadership and power to do the right thing when it comes to taking care of our money,” said Chief Richard Weber of the IRS’s Criminal Investigation. “When that trust is broken through these types of criminal activities, than those individuals need to be held accountable. Today's sentencing reflects our commitment to ensuring fairness for those engaged in these types of investments.”
“By knowingly exploiting vulnerabilities in the bidding process, Murphy ignored policies put in place to allow for the ethical distribution of municipal bond proceeds,” said Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office. “In the end, he brokered a deal that served his own best interests. Today’s sentence is proof of our continued determination to root out those whose business practices contribute to the deterioration of healthy competition in the municipal bidding process.”
Including Murphy, 17 individuals and one corporation have been convicted or pleaded guilty as a result of the Antitrust Division’s municipal bonds investigation.
The sentence announced today resulted from an investigation conducted by the Antitrust Division’s New York Office, the FBI and IRS-CI. The division also coordinated its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York. The U.S. Attorney’s Office of the Western District of North Carolina provided valuable assistance in this matter.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial market should contact the Antitrust Division’s New York Office at 212-335-8000, the FBI at 212-384-5000, the IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.html.
Former Bakersfield Real Estate Agent Sentenced for Mortgage Fraud SchemeRead the Press Release
FRESNO, Calif. — Arlene Jeanette Mojardin, 32, of Bakersfield, was sentenced today by United States District Judge Anthony W. Ishii to two years and six months in prison for conspiring to commit bank fraud, mail fraud, and wire fraud, in connection with a mortgage fraud scheme in Bakersfield, United States Attorney Benjamin B. Wagner announced.
According to court documents, from 2007 to 2010, Mojardin conspired with others to use straw buyers to purchase residential properties in Bakersfield. They paid straw buyers to purchase properties developed by Jara Brothers Investments (JBI) and Pershing Partners LLC and funded the purchases using loans they obtained based on false and fraudulent loan applications. The loan applications contained false statements concerning the straw buyers’ employment status, income, assets, intent to occupy the properties as their personal residences, and the source for the down payments for the purchase of the properties. The conspirators concealed from the lenders that the property developers funded some down payments. They submitted false supporting documentation to lenders such as false and altered bank account statements purporting to show that the straw buyers had high bank account balances, false verifications of the straw buyers’ bank account funds, false verifications of rent purporting to be from the straw buyers’ landlords, false pay stubs, and false verifications of employment.
Mojardin was a licensed real estate agent and handled many of the real estate transactions in furtherance of the conspiracy. She was also employed at relevant times at JBI, was a property buyer from Pershing Partners on at least two of the real estate transactions in the conspiracy, and obtained loans based on false and fraudulent information. Mojardin received proceeds from the conspiracy including payments for purchasing property as a nominee buyer and payments for acting as the real estate agent on many of the other transactions in the conspiracy. Mojardin admitted she caused lenders approximately $3,713,600 in losses due to her role in the conspiracy.
This case is the product of a joint investigation by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff, Henry Z. Carbajal III, and Megan A. S. Richards are prosecuting the case.
Co-defendant Antonio Perez-Marcial was sentenced on May 12, 2014, to three years and 10 months in prison for his role in the conspiracy. Co-defendant Candace Gonzales previously pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud, and her sentencing is set for June 8, 2015. Co-defendant Ricardo Salinas previously pleaded guilty to bank fraud, and his sentencing is set for June 29, 2015. Co-defendant Melissa Jara pleaded guilty to wire fraud and her sentencing is set for June 22, 2015. Co-defendants Eliseo and Sergio Jara previously pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud, and their sentencing hearings are set for June 22, 2015. Co-defendants Lucia and Joseph Chavez previously pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud and their sentencing hearings are set for July 20, 2015.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
Erik Weinmann Sentenced to 21 Months for Robbery of Merchants Bank in ColchesterRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Erik Weinmann, 31, of Newport, Vermont was sentenced today to 21 months in prison for robbing a Merchants Bank in Colchester, Vermont in July 2014. U.S. District Judge William K. Sessions III also ordered that Weinmann receive a two-year period of supervised release following the term of imprisonment. The Court ordered Weinmann to surrender to serve his sentence on June 23, 2015.
According to court records, on July 25, 2014, Weinmann entered the Merchants Bank on Bessette Drive in Colchester and gave a demand note to a bank teller. The note indicated that the robber had a gun and demanded money. The bank teller gave Weinmann $4,770 in cash and he left the bank. The Colchester Police Department apprehended Weinmann minutes later at the nearby Visiting Nurse Association. At the time of his arrest, Weinmann was in possession of the cash and a toy gun. Upon his arrest, Weinmann admitted to robbing the bank.
This matter was investigated by the Federal Bureau of Investigation and the Colchester Police Department. The government was represented by Assistant U.S. Attorney Kevin J. Doyle. Weinmann was represented by Michael L. Desautels, Esq., the Federal Defender for the District of Vermont.
Erie Man Sentenced for Violating Federal Gun LawsRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been sentenced in federal court to 4 years probation, 24 months home detention and ordered to forfeit firearms, destructive devices and explosive materials on his conviction of violating federal gun laws, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Gerald Szymanowski, 67.
According to information presented to the court, on or about June 19, 2014, Szymanowski possessed approximately 38 unregistered firearms, including machineguns, silencers and destructive devices not registered to him in the National Firearms Registration and Transfer record and manufactured approximately 372 devices of varying sizes containing explosive materials.
Prior to imposing sentence, Judge Cercone commented on the seriousness of the offense, but imposed the sentence on Szymanowski primarily because of Szymanowski’s frail health.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives for the investigation leading to the successful prosecution of Szymanowski.
Court of Appeals Upholds Edison Burgos-Montes ConvictionRead the Press Release
SAN JUAN, Puerto Rico – On May 13, 2015, the United States Court of Appeals for the First Circuit submitted a 57 page opinion affirming the conviction of Edison Burgos-Montes, announced Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.
Edison Burgos-Montes appealed from his conviction for two counts of drug conspiracy and two counts of murder. The latter stemmed from the disappearance of Burgos-Montes’ girlfriend – Madelin Semidey-Morales – shortly after Burgos-Montes learned that she had been acting as a government informant. Burgos-Montes challenged the sufficiency of the evidence supporting his conviction, the denial of several pre-trial motions to suppress evidence, and a number of other district court actions before and during trial.
In upholding the jury’s verdict, a three-judge panel of the Court of Appeals found Burgos-Montes’ arguments unpersuasive and, thus, affirmed his conviction.
“The U.S. Attorney’s Office for the District of Puerto Rico congratulates all the prosecutors and agents who worked tirelessly in the investigation and prosecution of Burgos-Montes, with great success,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. The appeal was handled by Assistant U.S. Attorney Francisco A. Besosa, of the U.S. Attorney’s Office Appellate Division.