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6 May 2015
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Johnston in Great Falls on May 6, 2015, and entering please of Not Guilty were:
- MELVIN MOSES LILLEY, III, a 22-year-old resident of Wolf Point, appeared on charges of assault with a dangerous weapon, assault resulting in serious bodily injury, and use of a firearm during and in relation to a crime of violence. If convicted of the most serious charges contained in the indictment, LILLEY faces life in prison, $250,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation and Fort Peck Tribes Department of Law and Justice. PACER Case Reference. 15-16
Appearing before U.S. Magistrate Judge Lynch in Missoula on May 6, 2015, and entering pleas of Not Guilty were:
- CHRISTOPHER KELLY FERRARI, a 40-year-old resident of Kalispell, appeared on charges of possession of a firearm not registered in the national firearms registration and transfer record and felon in possession of firearms. If convicted of the most serious charges contained in the indictment, FERRARI faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Flathead County Sheriff’s Office. PACER Case Reference. 15-08
- THOMAS AARON WADDLE, a 41-year-old resident of Butte, appeared on charges of felon in possession of a firearm. If convicted of the charge contained in the indictment, WADDLE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-24
Appearing before U.S. Magistrate Judge Ostby in Billings on May1, 2015, and entering pleas of Not Guilty were:
- DELVENE MARIE EAGLEMAN, a 38-year-old resident of Lame Deer, appeared on charges of assault resulting in serious bodily injury and assault with a dangerous weapon. If convicted of the most serious charge contained in the indictment, EAGLEMAN faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Indian Affairs and the Federal Bureau of Investigation. PACER Case reference. 15-23
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indiana Man Charged with Sexual Exploitation of Macon County MinorRead the Press Release
Springfield, Ill. – Jim Lewis, U.S. Attorney for the Central District of Illinois, announced that a federal grand jury in Springfield returned an indictment today that charges Shawn Shannon, 43, of Muncie, Ind., with one count each of sexual exploitation of a minor and possession of child pornography.
The indictment alleges that from Feb. 28, to March 1, 2015, Shannon enticed, used and coerced a minor to engage in sexually explicit conduct for the purposes of producing visual images of said conduct. The indictment further alleges that Shannon possessed images of child pornography during that same time period.
Shannon’s arraignment is scheduled for May 12, 2015, at 1:30 p.m. before U.S. Magistrate Judge David G. Bernthal in the U.S. courthouse in Urbana.
If convicted, the statutory penalty for sexual exploitation of a minor is 15 to 30 years in prison plus a fine of up to $250,000; the penalty for possession of child pornography is up to 10 years imprisonment plus a fine of up to $250,000.
Shannon was previously charged in a criminal complaint and was arrested on Apr. 15, 2015, in Muncie, Ind. Shannon appeared before U.S. District Judge Colin S. Bruce on April 20, and was ordered to remain detained in U.S. Marshals Service custody.
The case is being prosecuted by Assistant U.S. Attorney Elly M. Peirson. The charges are the result of an investigation by the Decatur Police Department and U.S. Immigration and Customs Enforcement Homeland Security Investigations.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Illinois Couple Indicted for Kidnapping and Transportation of a Minor with Intent to Engage in Sexual ActivityRead the Press Release
A federal grand jury indicted an Illinois couple on charges of kidnapping and transportation with intent to engage in criminal sexual activity with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney James A. Lewis of the Central District of Illinois and Special Agent in Charge Sean Cox of the FBI’s Springfield Division.
“Parents with adopted children who are struggling are all too frequently targets for those willing to say and do whatever it takes to gain access to those vulnerable children,” said Assistant Attorney General Caldwell. “The Criminal Division is committed to bringing to justice anyone who seeks to exploit children and risk their safety. Every child in America deserves a safe home.”
“Protecting children is a community responsibility,” said U.S. Attorney Lewis. “Law enforcement relies on the assistance of proactive neighbors, school officials and parents to protect our kids.”
“The FBI is dedicated to the protection of children,” said Special Agent in Charge Cox. “We will continue to use our resources to pursue those who would exploit them for their own benefit.”
Nicole Eason, 37, and Calvin Eason, 46, formerly of Danville and Westville, Illinois, were charged in an indictment unsealed today with two counts of kidnapping of a minor and one count of transportation of a minor. They were previously charged by a criminal complaint and arrested on April 3, 2015, in Tucson, Arizona. The couple has remained in custody since their arrest.
According to allegations in the criminal complaint, Nicole and Calvin Eason participated in an online adoption discussion board in 2006 and 2007, and sought to adopt a child through a process sometimes referred to as private “re-homing.” This practice is often associated with “disrupted” or failed adoptions, when an adoptive family places their child in another home because the adoptive family can no longer care for the child.
According to the complaint, the Easons communicated with a minor’s parents and allegedly misrepresented material facts about their background to gain the parents’ trust. The Easons also allegedly lied about having a home study “waiver,” which the parents believed was needed to transfer custody of their child. Based on the Easons’ false misrepresentations, the parents transported their child across state lines in 2007. Both Nicole and Calvin Eason allegedly sexually abused the child while he/she was in their custody.
The indictment further alleges that Nicole and Calvin Eason kidnapped a second minor in the same manner in 2008. The Easons allegedly transported the second minor across state lines.
The allegations and charges contained in the complaint and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case is being investigated by FBI’s Springfield Division. The case is being prosecuted by Trial Attorney Jennifer Toritto Leonardo of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Elly Peirson of the Central District of Illinois.
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 Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Illinois Couple Indicted for Kidnapping and Transportation of A Minor with Intent to Engage in Sexual ActivityRead the Press Release
WASHINGTON – A federal grand jury indicted an Illinois couple on charges of kidnapping and transportation with intent to engage in criminal sexual activity with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney James A. Lewis of the Central District of Illinois and Special Agent in Charge Sean Cox of the FBI’s Springfield Division.
“Parents with adopted children who are struggling are all too frequently targets for those willing to say and do whatever it takes to gain access to those vulnerable children,” said Assistant Attorney General Caldwell. “The Criminal Division is committed to bringing to justice anyone who seeks to exploit children and risk their safety. Every child in America deserves a safe home.”
“Protecting children is a community responsibility,” said U.S. Attorney Lewis. “Law enforcement relies on the assistance of proactive neighbors, school officials and parents to protect our kids.”
“The FBI is dedicated to the protection of children,” said Special Agent in Charge Cox. “We will continue to use our resources to pursue those who would exploit them for their own benefit.”
Nicole Eason, 37, and Calvin Eason, 46, formerly of Danville and Westville, Illinois, were charged in an indictment unsealed today with two counts of kidnapping of a minor and one count of transportation of a minor. They were previously charged by a criminal complaint and arrested on April 3, 2015, in Tucson, Arizona. The couple has remained in custody since their arrest.
According to allegations in the criminal complaint, Nicole and Calvin Eason participated in an online adoption discussion board in 2006 and 2007, and sought to adopt a child through a process sometimes referred to as private “re-homing.” This practice is often associated with “disrupted” or failed adoptions, when an adoptive family places their child in another home because the adoptive family can no longer care for the child.
According to the complaint, the Easons communicated with a minor’s parents and allegedly misrepresented material facts about their background to gain the parents’ trust. The Easons also allegedly lied about having a home study “waiver,” which the parents believed was needed to transfer custody of their child. Based on the Easons’ false misrepresentations, the parents transported their child across state lines in 2007. Both Nicole and Calvin Eason allegedly sexually abused the child while he/she was in their custody.
The indictment further alleges that Nicole and Calvin Eason kidnapped a second minor in the same manner in 2008. The Easons allegedly transported the second minor across state lines.
The allegations and charges contained in the complaint and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.This case is being investigated by FBI’s Springfield Division. The case is being prosecuted by Trial Attorney Jennifer Toritto Leonardo of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Elly Peirson of the Central District of Illinois.
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 Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Huber Heights Man Pleads Guilty to Online Child EnticementRead the Press Release
COLUMBUS, Ohio – Keegan L. Sipe, 31, of Huber Heights, Ohio, pleaded guilty in United States District Court to attempted coercion and enticement of minors to engage in unlawful sexual activity.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Upper Arlington Police Chief Brian Quinn, Marlon Miller, Special Agent in Charge, Homeland Security Investigations (HSI), and other members of the Franklin County Internet Crimes Against Children (ICAC) Task Force, announced the plea entered into today before U.S. District Judge Michael H. Watson.
According to court documents, in December 2014, Sipe attempted to persuade an individual via the Internet to engage in sexual activity with females he believed to be 10 and 14 years old. Investigators discovered an advertisement on Craigslist soliciting a “taboo mother and daughter” that stated, “Get with me if you and daughter would like to have some fun. Kinky and taboo age no matter.”
When an undercover investigator responded to the advertisement, Sipe engaged in conversation with the law enforcement official. He believed the investigator was a father arranging for Sipe to meet with his two minor daughters to engage in sexual activity.
On December 20, 2014, Sipe arranged to meet the undercover officer in the Bob Evans parking lot in Hilliard, Ohio. Upon his arrival, he was taken into custody.
The parties involved in this case have agreed to a 10-year prison sentence for Sipe.
The Franklin County ICAC Task Force is a multi-agency effort dedicated to the fight against computer facilitated crimes against children. The following agencies are members:Franklin County Sheriff’s Office Upper Arlington Police Department
Grove City Police Department Columbus Police Department
Grandview Heights Police Department Whitehall Police Department
Hilliard Police Department Westerville Police Department
Homeland Security Investigations U.S. Secret Service
Ohio ICAC Franklin County Prosecutor's OfficeThis case is being brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney's 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 as well as to identify and rescue victims.
U.S. Attorney Stewart commended the cooperative investigation by the Franklin County ICAC Task Force, as well as Assistant United States Attorneys Jessica H. Kim and Heather A. Hill, who are representing the United States in this case.Houston Doctor and Group Home Owner Indicted for Alleged Roles in $5.2 Million Medicare Fraud SchemeRead the Press Release
A Houston doctor and a group home owner were arrested on charges related to their alleged participation in a $5.2 million Medicare fraud scheme involving false claims for mental health treatment.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office, the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) and Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Field Office made the announcement.
Walid H. Hamoudi, M.D., 63, of Houston, and Geraldine J. Caroline, 49, of Houston, were each charged with one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks and five counts of paying and receiving kickbacks. The indictment also charges Hamoudi with one count of money laundering. Both defendants are expected to make their initial appearances in federal court in Houston today.
According to the indictment, Hamoudi and Caroline allegedly participated in a scheme to defraud Medicare beginning in 2010 and continuing until June 2011. The defendants allegedly caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services—a form of intensive outpatient treatment for severe mental illness—to Medicare through a Houston hospital. Hamoudi allegedly paid Caroline kickbacks to send her group home residents to the hospital to receive PHP services even though the patients did not qualify for or receive the services.
The indictment alleges that the defendants and their co-conspirators submitted or caused to be submitted approximately $5.2 million in claims to Medicare and over $380,000 in claims to Medicaid for PHP services purportedly provided by the hospital, when, in fact, the PHP services were medically unnecessary or never provided.
In February 2012, Mohammad Khan, an assistant administrator at the hospital, who managed many of the hospital’s PHPs, pleaded guilty to one count of conspiracy to commit health care fraud, one count of conspiracy to pay illegal kickbacks and five counts of paying illegal kickbacks for his role in the scheme. Khan is scheduled to be sentenced on May 21, 2015.
In October 2014, Earnest Gibson III, the president of the hospital, along with his son Earnest Gibson IV, Regina Askew and Robert Crane, were convicted for their roles in the scheme. William Bullock III, Robert Ferguson, Waddie McDuffie, Sharonda Holmes and Leslie Clark have pleaded guilty for their roles in the scheme. These defendants have not yet been sentenced.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI, IRS-CI, HHS-OIG and the MFCU, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Trial Attorney Ashlee C. McFarlane of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Hedge Fund Executive Sentenced to 30 Months in Prison for Fraud SchemeRead the Press Release
BART GUTEKUNST, 63, of Weston, and a former managing partner and principal of New Stream Capital, LLC, a Ridgefield-based hedge fund, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 30 months of imprisonment, followed by three years of supervised release, for engaging in a scheme to deceive investors in order to obtain and maintain investments.
According to court documents and statements made in court, in November 2007, New Stream Capital, LLC (“New Stream”) launched new feeder funds, one based in the United States (“U.S. Fund”) and a series of funds based in the Cayman Islands (“Cayman Fund”). New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund. Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008. At risk of losing their largest investor, GUTEKUNST, co-managing partner David Bryson and chief financial officer Richard Pereira set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption.
As part of the scheme, GUTEKUNST, Bryson and Pereira had New Stream staff secretly execute documents to effectuate the Bermuda Fund’s special priority. New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund. Moreover, New Stream continued to market to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.
Through this scheme, New Stream investors were defrauded out of more than $46 million.
From April 2008 to December 2010, GUTEKUNST and Bryson each collected more than $5 million in management fees and profit sharing while participating in this fraud scheme.
On May 21, 2014, GUTEKUNST, Bryson and Pereira each pleaded guilty to one count of conspiracy to commit wire fraud.
On May 5, 2015, Bryson was sentenced to 33 months of imprisonment. Pereira is scheduled to be sentenced tomorrow.
This matter was investigated by the Federal Bureau of Investigation and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Liam Brennan and Michael S. McGarry, and Special Assistant U.S. Attorney Sheldon L. Pollock.
HSV Entertainment LLC Agrees to No Longer Supply Internet Sweepstakes at the Roanoke Rapids TheaterRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today, the U.S. Attorney’s Office reached a non-prosecution agreement with HSV Entertainment LLC. The agreement provides that the United States Attorney’s Office for the Eastern District of North Carolina will close its criminal investigation of HSV, conditioned upon HSV’s agreement that it will no longer have any involvement with sweepstakes in North Carolina involving an entertaining display. HSV has had a lease with the City of Roanoke Rapids to operate the Roanoke Rapids Theater. The primary purpose of the lease was to operate an entertainment venue, including concerts and other shows. In addition, HSV also operated pre-reveal internet sweepstakes games. It will terminate its operation of the theater effective May 18, 2015. The City Attorney for Roanoke Rapids has informed the U.S. Attorney’s Office that it will no longer allow sweepstakes devices back in the theater after HSV leaves. Investigation of this matter was conducted by North Carolina Alcohol Law Enforcement and the Internal Revenue Service in coordination with Assistant United States Attorneys David Bragdon and Joshua Royster.
Gun Store Burglar Goes Back to Federal PrisonRead the Press Release
PITTSBURGH - A Westmoreland County resident has been sentenced in federal court to an additional 12 months and one day of incarceration as a result of violating the federal supervised release on his prior federal conviction, United States Attorney David J. Hickton announced today.
United States District Judge Alan Bloch imposed the sentence yesterday on Aaron Booker and added nearly three years of supervision to follow this latest incarceration.
According to information previously presented to the court, in 2009 the defendant was among a group of individuals who broke the front window at a New Kensington firearms dealer and stole 11 pistols and three assault rifles. Booker was originally sentenced to 27 months in federal prison for that incident, and then violated his supervision by assaulting a female victim. Booker was sentenced to “time served” in the Westmoreland County Court of Common Pleas for the assault and faced an additional sentence from Judge Bloch for committing the crime while on supervision following his release from federal prison.
Prior to imposing the new sentence for the supervision violation, Judge Bloch listened to the victim’s statement regarding the sexual nature of the assault and considered the seriousness of that incident.
Assistant United States Attorney Ross E. Lenhardt prosecuted this case on behalf of the government.
United States Attorney Hickton noted that since firearms dealers are federally licensed, the burglary of the gun store was investigated by federal agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) who quickly identified and arrested Booker and his co-conspirators. U.S. Attorney Hickton also noted that Booker was prosecuted for the assault by the Westmoreland County District Attorney’s Office with the assistance of the local police department from the victim’s neighborhood.
Grand Junction Real Estate Developers Are Sentenced to Federal Prison for Money LaunderingRead the Press Release
DENVER – Franklin Thad Harris, age 59, and Merlin D. Unruh, age 53, both of Grand Junction, Colorado, were sentenced today by U.S. District Court Judge Christine M. Arguello to serve 36 months and 28 months in federal prison, respectively, for money laundering, the United States Attorney’s Office, the Federal Bureau of Investigation and IRS Criminal Investigation announced. Following their prison sentences, Harris and Unruh were ordered to serve 3 years each on supervised release. They were also ordered by Judge Arguello to pay $1,844,846.49 in restitution joint and several to the victim bank.
Harris and Unruh were indicted by a federal grand jury in Denver on January 8, 2013, for charges of bank fraud and money laundering. The indictment remained under seal until their arrest on January 11, 2013. A superseding information was filed on April 14, 2014. Harris and Unruh plead guilty to one count of money laundering on July 17, 2014. They were sentenced on May 6, 2015.
According to information contained in court documents, including the stipulated facts contained in their plea agreements, Harris was in the business of constructing housing developments throughout the Grand Junction, Colorado, area. In the mid to late 2000s, Harris was involved in the purchase of several acres of land for various planned housing developments in Grand Junction. Financing for the projects came in the form of secured loans from First National Bank of the Rockies (FNBR). Harris’s partner, Unruh, was in the construction business and was the general contractor on building projects with Harris. TDSM was a Colorado real estate development company incorporated in February 2003 and Harris and Unruh were sole members of the board of directors of TDSM. HARRIS was the President and Registered Agent of TDSM. Unruh was Secretary/Treasurer of TDSM. Unruh incorporated and was the registered agent for McGleeson, Inc., a construction company.
In 2010, several construction loans to Harris had become problem loans as they were in default with FNBR. The Special Assets Department of FNBR began to review the loans and identified potential fraud and requested an outside forensic audit which eventually lead to federal law enforcement agencies being notified. Between October 2007 and December 2008, Harris and Unruh obtained loan disbursements totaling $3,718,351.83. They submitting false and fraudulent expense documentation, primarily false invoices, which represented various types of construction work completed at both sites. In fact, much of the work reflected in the invoices had not been performed at the Chatfield site, and no work was done on the Thunder Valley development.
An IRS Special Agent conducted an analysis of the flow of funds and found Harris and Unruh, on numerous occasions, conducted a series of financial transactions after the draw money was deposited into their construction business account. They diverted funds meant to pay subcontractor invoices to private bank accounts and retirement accounts owned/controlled by them and their spouses.
This case was investigated by agents with Federal Bureau of Investigation (FBI) and IRS Criminal Investigation (IRS CI). The case was prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
French National Arrested on Charges of Alien SmugglingRead the Press Release
Alain Rene Leichtnam, 71, a French national, was arrested April 30, 2015, on a criminal complaint charging him with encouraging and inducing aliens to enter the United States in violation of law, announced U.S. Attorney Ronald W. Sharpe of the District of the Virgin Islands. Leichtnam made his initial appearance on May 1, 2015, and had his detention hearing today before U.S. Magistrate Judge Ruth Miller of the District of the Virgin Islands. Judge Miller detained Leichtnam pending further proceedings and he was remanded to the custody of the U.S. Marshals Service.
According to the complaint, U.S. Customs and Border Protection (CBP), Office of Air and Marine (OAM) and the U.S. Coast Guard (USCG) intercepted a catamaran vessel, Mazurka, off of the coast of St. John, Virgin Islands, in the early morning hours of April 29, 2015. The vessel was operated by Leichtnam and contained 38 Cuban nationals and one national of St. Lucia. None of the individuals possessed the proper documents to lawfully enter the United States. Encouraging and inducing aliens to enter the United States carries a sentence of not more than five years in prison and in the case of a violation in which the offense was done for the purpose of private financial gain, not more than 10 years’ imprisonment.
U.S. Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the CBP, OAM, the USCG and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant U.S. Attorney Kim L. Chisholm of the District of the Virgin Islands.
French National Arrested on Charges of Alien SmugglingRead the Press Release
St. Thomas, USVI- Alain Rene Leichtnam, 71, a French national, was arrested April 30, 2015, on a criminal complaint charging him with encouraging and inducing aliens to enter the United States in violation of law, United States Attorney Ronald W. Sharpe announced today. Leichtnam made his initial appearance on May 1, 2015, and had his detention hearing today before U.S. Magistrate Judge Ruth Miller. Judge Miller detained Leichtnam pending further proceedings and he was remanded to the custody of the United States Marshals Service.
According to the complaint, U.S. Customs and Border Protection (CBP) Office of Air and Marine (OAM) and the United States Coast Guard (USCG) intercepted a catamaran vessel, Mazurka, off of the coast of St. John, Virgin Islands in the early morning hours of April 29, 2015. The vessel was operated by Leichtnam and contained 38 Cuban nationals and one national of St. Lucia. None of the individuals possessed the proper documents to lawfully enter the United States. Encouraging and inducing aliens to enter the United States carries a sentence of not more than five years in prison, and in the case of a violation in which the offense was done for the purpose of private financial gain, not more than 10 years’ imprisonment.
United States Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the CBP, OAM, the USSG, and Homeland Security Investigations (HSI). It is being prosecuted by Assistant United States Attorney Kim L. Chisholm.
Former Westmoreland County Sheriff's Deputy Charged with Possession of Firearms with Obliterated Serial NumbersRead the Press Release
Trusted with Destroying the Firearms, Melvin Hinson Removed the Serial Numbers and Sold or Traded The Firearms
RICHMOND, Va. – Melvin Hinson, 65, of Westmoreland County, Virginia, was indicted yesterday by a federal grand jury on a charge of possessing firearms with the manufacturers’ serial numbers obliterated or removed.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington
Field Division, made the announcement after Hinson’s indictment was returned.Hinson currently faces a maximum penalty of five years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The indictment alleges that from March 1 to March 19, 2014, Hinson possessed a Rohm 38 Special caliber revolver, model RG38; a Harrington and Richardson (H&R) 32 caliber revolver; and a Jimenez Arms 9mm caliber semi-automatic pistol, all with obliterated serial numbers. Hinson was arrested on April 15, 2015, on a Criminal Complaint alleging this same offense. According to the affidavit submitted in support of that Complaint, Hinson, a retired Westmoreland County Sheriff’s Deputy, received firearms from law enforcement agencies for the purpose of destroying them. However, it is alleged, rather than do so, as required, he removed the serial numbers and sold or traded the firearms. According to the affidavit, Hinson distributed at least 12 firearms that have been recovered, each with the manufacturer’s serial number removed or obliterated, including a Kel-Tec carbine style assault rifle with a folding stock and a short-barreled shotgun. The affidavit asserts that a number of these firearms were determined to have come from the Westmoreland County Sheriff’s Office.
This case was investigated by ATF, with the assistance of Virginia State Police, the Colonial Beach Police Department and the Westmoreland County Sheriff’s Office. Assistant U.S. Attorney Olivia L. Norman is prosecuting the case on behalf of the United States.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-81.
Former Vice-President and Seven Others Charged in Scheme to Defraud Beer Company of over $7 MillionRead the Press Release
CHICAGO — A former Vice-President of a brewing company was charged in a twenty count indictment yesterday along with seven co-defendants, as a result of an alleged scheme to defraud the company of at least $7 million by submitting false estimates and invoices that billed for fictitious promotional and marketing events. DAVID COLLETTI, 58, of Chicago, was charged in a federal grand jury indictment with wire fraud along with seven other co-defendants; RODERICK GROETZINGER, 61, of North Carolina, ANDREW VALLOZZI, 53, of Florida, JAMES RITTENBERG, 72, of Chicago, SCOTT DARST, 68, of Las Vegas, THOMAS LONGHI, 57, of Florida, FRANCIS BUONAURO Jr., 72, of Florida, and MARYANN ROZENBERG, 57, of Wisconsin. Defendants RITTENBERG and DARST were also charged with mail fraud. All eight defendants will be arraigned at a date determined by U.S. District Court.
The indictment alleges that COLLETTI, as a Vice-President, oversaw the marketing, promotion, and sale of beer for the victim company, which hired third-party vendors to organize and hold events and promotions designed to market the company’s beer. According to the indictment, GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG controlled entities which claimed to provide third-party vendor services to the victim company during the course of the alleged scheme. The entities included Beverage Industry Marketing Services, Rave Media, Events Marketing Network LLC, AVA Advertising, Inc., AVA Marketing and Communications, LLC, Food and Beverage Network, Inc., Prime Promotions, Inc., P&D Marketing, Inc., Longhi Golf Operations, F&B Marketing, and Golden Logistics.
The indictment alleges that during COLLETTI’s tenure at the company, he worked with GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG to submit false estimates and invoices in the name of entities which falsely billed the company for fictitious promotional events and for events at inflated prices. The estimates and invoices misrepresented the date, location, cost and type of events that were supposedly being held to market the company’s products. The fictitious events included supposed food and beer pairings, trainings, and promotions for certain customer accounts, held at casinos, hotels, and flea markets.
The indictment alleges that COLLETTI oversaw the approval of a number of these false invoices for payment and the company paid in excess of $7 million to the defendants’ entities. Subsequently, some of the defendants arranged for COLLETTI to receive a portion of the payments. According to the indictment, the defendants used the victim company’s money, for among other things, defendants’ personal expenses, collectible firearms, international golf trips, hunting trips, investments in a hotel and bar, and an arena football team.
The indictment seeks forfeiture of at least $7 million.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Jessica Romero and Jennie Levin.
Each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Former Stanislaus County Resident Arrested for Tax EvasionRead the Press Release
FRESNO, Calif. — Frank A. Bilan, 66, of Lodi, was arrested today on a three-count indictment charging him with one count of corrupt endeavor to obstruct and impede the administration of the internal revenue laws and two counts of failing to file tax returns, United States Attorney Benjamin B. Wagner announced.
According to court documents, Bilan, who formerly lived in Newman in Stanislaus County, earned income as a salaried engineer and through his engineering consulting business. However, Bilan did not timely file tax returns for tax years 2001 through 2009. When the IRS sent correspondence to Bilan regarding past due taxes, Bilan responded by submitting fictitious financial instruments titled “Money Order” or “Money Order Private Issue” in purported payment of his tax liabilities, attempting to file false purported income tax returns, and falsely reporting on an IRS form the discharge of monies owed by Bilan to the IRS. Bilan also failed to file income tax returns for tax years 2008 and 2009. The indictment alleges that between 2005 and 2009, Bilan received over $900,000 in income.
This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Henry Z. Carbajal III is prosecuting the case.
If convicted of a corrupt endeavor to obstruct and impede the administration of the internal revenue laws, Bilan faces a maximum statutory penalty of three years in prison and a $250,000 fine. The maximum statutory penalty for willful failure to file a tax return is up to one year in prison and a $100,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Pasco Teacher Sentenced to Fifteen Years for Online Enticement of A MinorRead the Press Release
Tampa, FL – U.S. District Judge Susan C. Bucklew today sentenced David Wendel Thompson (49, Seffner) to 15 years in federal prison for online enticement of a minor. The Court also sentenced him to 10 years of supervision following his release following his release from prison. Thompson pleaded guilty on October 20, 2014.
According to court documents, between December 14, 2013, and March 14, 2014, Thompson used Facebook to attempt to persuade two minor females in Belize, ages 13 and 15, to engage in sexual intercourse with him. He did so using his own Facebook account and a fake Facebook account that he had set up to appear as though it belonged to a female teenager in Belize.
On March 14, 2014, Thompson flew from Tampa to Belize, with a layover in Miami, to meet the minors with the intent of engaging in sexual activity. He was denied entry into Belize and returned to Miami, where he was arrested. Thompson admitted to communicating with the girls on Facebook and to knowing that they were underage. Prior to his arrest, Thompson was a social studies teacher at Centennial Middle School in Dade City.
“Crimes against children are always devastating, but it is particularly egregious when a person of trust, like this teacher, conspires to commit such atrocities,” said Susan L. McCormick, special agent in charge of HSI Tampa. “This case is the result of hard work by HSI special agents in Tampa, Miami and the Cyber Crimes Center, as well as our partners at the U.S. Department of State.”
“The Diplomatic Security Service maintains an excellent relationship with local law enforcement personnel. This close cooperation between our agents and local law enforcement was key to David Wendel Thompson’s capture,” said Acting Special Agent in Charge David Brown of the DSS Miami Field Office. “It is this type of worldwide law enforcement coordination that gives Diplomatic Security an unparalleled ability to locate, pursue, and apprehend fugitives.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, in conjunction with the U.S. Department of State. It was prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (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.justice.gov/psc.
Former Owner of Empire Towers Pleads Guilty to Fraudulent $7 Million Bond Scheme and Filing a False Tax ReturnRead the Press Release
Baltimore, Maryland - Wilfred T. Azar, III, age 53, formerly of Queenstown, Maryland, pleaded guilty today to securities fraud and filing a false tax return.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
In 1999, Azar became president and majority owner of Empire Corporation and exercised complete control over the operations of Empire. Empire Corporation owned Empire Towers Corporation. Empire Towers Corporation’s primary asset was Empire Towers, a 10 story office building in Glen Burnie, Maryland.
According to Azar’s plea agreement, by January 2006, Empire Corporation could no longer pay its expenses and was effectively insolvent. By 2007, Empire Towers Corporation had exhausted its lines of credit from lending institutions.
From January 2006 to April 2010, Azar caused Empire Corporation to sell bonds to over 50 individual investors for more than $7 million. While many of the bonds were titled “registered,” the bonds were not registered with either the U.S. Securities and Exchange Commission (SEC) or the state of Maryland. In addition, Azar falsely told investors that Empire Corporation was in good financial health and that the company generated enough revenue to pay the promised 10 percent annual rate of return. Azar falsely represented that the money invested would be used for a specific renovation project or other capital improvement at the Empire Towers office building. Azar failed to inform investors that he used most of the money raised from previous bond sales for his own personal purposes. Although the bonds were issued by Empire Corporation, Azar diverted millions of dollars of proceeds from the bond sales to his own bank account and the bank accounts of other companies that he controlled.
During the period of the fraud, Azar misappropriated approximately $7,219,362 in investor proceeds raised through the sale of bonds. Azar used the bond proceeds: to purchase a $100,000 Aston Martin luxury automobile; to pay the $3,000 monthly mortgage on his primary residence; to pay $51,000 to an Azar trust; to purchase Baltimore Ravens season tickets for $17,298; and to pay $25,389 in country club dues. In addition, Azar charged over $420,000 to a credit card paid by Empire Management Services, including daily living expenses, lavish vacations, and university tuition for one of his children. Azar also diverted more than $1.07 million in Empire funds to other unrelated businesses he controlled under the guise of “loans” which were never repaid.
During 2009, Azar embezzled approximately $1,959,250 in Empire funds, which he failed to report as income on his tax return. This resulted in a tax loss to the government of $469,936.
Azar faces a maximum sentence of 20 years in prison for securities fraud, and a maximum of three years in prison for filing a false tax return. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for August 12, 2015, at 10:00 a.m.
The SEC has also filed a complaint against Azar and another individual in connection with the scheme, and that case is pending.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the IRS-CI, FBI and SEC for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory Bockin and Trial Attorney Kenneth Vert of the Justice Department’s Tax Division, who are prosecuting the case.
Former Owner of Empire Towers Pleads Guilty for Fraudulent $7 Million Bond Scheme and Filing False Tax ReturnRead the Press Release
Misled More Than 50 Individual Investors Who Bought Bonds
A former Queenstown, Maryland, resident pleaded guilty today to securities fraud and filing a false tax return.
The guilty plea was announced by U.S. Attorney Rod J. Rosenstein of the District of Maryland, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington, D.C., Field Office and Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Division.
In 1999, Wilfred T. Azar III, 53, became the president and majority owner of Empire Corporation and exercised complete control over the operations of Empire. Empire Corporation owned Empire Towers Corporation. Empire Towers Corporation’s primary asset was Empire Towers, a 10-story office building in Glen Burnie, Maryland.
According to Azar’s plea agreement, by January 2006, Empire Corporation could no longer pay its expenses and was effectively insolvent. By 2007, Empire Towers Corporation had exhausted its lines of credit from lending institutions.
From January 2006 to April 2010, Azar caused Empire Corporation to sell bonds to more than 50 individual investors for more than $7 million. While many of the bonds were titled “registered,” the bonds were not registered with either the U.S. Securities and Exchange Commission (SEC) or the state of Maryland. In addition, Azar falsely told investors that Empire Corporation was in good financial health and that the company generated enough revenue to pay the promised 10 percent annual rate of return. Azar falsely represented that the money invested would be used for a specific renovation project or other capital improvement at the Empire Towers office building. Azar failed to inform investors that he used most of the money raised from previous bond sales for his own personal purposes. Although the bonds were issued by Empire Corporation, Azar diverted millions of dollars of proceeds from the bond sales to his own bank account and to the bank accounts of other companies that he controlled.
During the period of the fraud, Azar misappropriated approximately $7,219,362 in investor proceeds raised through the sale of bonds. Azar used the bond proceeds: to purchase a $100,000 Aston Martin luxury automobile; to pay the $3,000 monthly mortgage on his primary residence; to pay $51,000 to an Azar trust; to purchase Baltimore Ravens season tickets for $17,298; and to pay $25,389 in country club dues. In addition, Azar charged more than $420,000 to a credit card paid by Empire Management Services, including daily living expenses, lavish vacations and university tuition for one of his children. Azar also diverted more than $1.07 million in Empire funds to other unrelated businesses he controlled under the guise of “loans” which were never repaid.
During 2009, Azar embezzled approximately $1,959,250 in Empire funds, which he failed to report as income on his tax return. This resulted in a tax loss to the government of $469,936.
Azar faces a statutory maximum sentence of 20 years in prison for securities fraud, and a maximum of three years in prison for filing a false tax return. U.S. District Judge William D. Quarles Jr. has scheduled sentencing for Aug. 12 at 10:00 a.m.
The SEC has also filed a complaint against Azar and another individual in connection with the scheme, and that case is pending.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 the inception of FFETF in November 2009, the department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants, including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
U.S. Attorney Rosenstein praised the IRS-CI, FBI and SEC for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory Bockin of the District of Maryland and Trial Attorney Kenneth Vert of the Justice Department’s Tax Division, who are prosecuting the case.
Former National Guardsman from Akron pleads guilty to theft of public fundsRead the Press Release
Former Army National Guard soldier Ryan Patrick Breiding, 29, of Akron, has pleaded guilty to theft of public money, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The theft of Department of Defense funds, which occurred between 2008 and 2010, totaled approximately $27,000.
The Army National Guard established the Guard Recruiting Assistance Program (G-RAP) to aid in its recruiting efforts. G-RAP was designed to offer monetary recruiting incentives to part-time soldiers to identify and encourage individuals to serve in the Army National Guard and other military branches, according to court documents.
Breiding fraudulently submitted 14 potential soldiers through his online G-RAP account from July 2006 to November 2010. None of the 14 potential soldiers provided his or her information to Breiding. Breiding submitted fabricated details of his relationship with these potential soldiers in order to receive recruiting incentives to which he was not entitled. Breiding received $27,000 belonging to the United States to which he was not entitled because of the inappropriately procured personal information and fabricated relationship details he provided, according to court documents.
The U.S. Army Criminal Investigation Command conducted the investigation. The case is being prosecuted by Assistant United States Attorney Justin Seabury Gould.
Breiding will be sentenced on July 8, 2015, at 11:30 a.m., before United States District Judge Patricia A. Gaughan. His sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
Former Insurance Broker Pleads Guilty to Nationwide Phony Trucking Cargo Insurance Fraud SchemeRead the Press Release
ATLANTA - John Paul Kill, the former operator of Appeal Insurance Agency, LLC, has pleaded guilty to a charge of insurance fraud. Kill collected over $3.7 million from nearly 800 trucking companies nationwide for fraudulent cargo insurance policies.
“This defendant swindled hundreds of trucking companies into purchasing phantom cargo insurance policies,” said Acting U.S. Attorney John Horn. “Kill abused his clients’ trust and led many small businesses to operate on our roads unwittingly without proper insurance and put them at risk for catastrophic losses.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This case was about theft and greed on a large scale. Mr. Kill displayed a complete disregard for his client companies, leaving them legally and fiscally vulnerable while allowing them to believe that they had appropriate insurance coverage. The FBI is pleased with the role it played in bringing this case forward for prosecution and holding Mr. Kill accountable for his criminal actions.”
“I applaud Acting U.S. Attorney John Horn for his handling of this case,” said Insurance Commissioner Ralph Hudgens. “I hope this guilty plea sends a clear signal that my office, and federal authorities, will take decisive action if we catch someone scamming Georgia consumers.”
According to Acting United States Attorney Horn, the charges and other information presented in court: Kill operated an insurance brokerage firm, Appeal Insurance Agency, LLC, in Norcross, Georgia and began offering cargo insurance policies to trucking companies in 2013. Kill falsely represented to clients that he would bind cargo insurance policies through Lloyd’s of London. In the insurance industry, binding coverage serves as an agreement between the insurance provider and insured parties to provide insurance coverage. In reality, Kill did not bind any policies with Lloyd’s and instead pocketed the premium payments.
For a small portion of victims, Kill bound cargo insurance policies through a different company that offered less extensive coverage than what the trucking companies thought they purchased through Kill. Most of the victims received no insurance policies at all, and Kill instead attempted to pay claims for losses out of the premium payments he collected for new policies.
In total, nearly 800 trucking companies located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia paid approximately $3.75 million in premiums for these fraudulent insurance policies from 2013 through mid-2014.
Kill, 63, of Norcross, Georgia, pleaded guilty before U.S. District Court Judge Eleanor L. Ross. Sentencing for Kill is scheduled for July 10, 2015, at 10:00 a.m.
This case is being investigated by the Federal Bureau of Investigation and the Georgia Office of Commissioner of Insurance.
Assistant United States Attorney Nathan P. Kitchens is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Former Fugitive Sentenced to over 15 Years in Prison for Bank Fraud and Failure to AppearRead the Press Release
SACRAMENTO, Calif. — Niesha Nicole Jackson, 35, was sentenced today by United States District Judge Kimberly Mueller to 15 years and seven months in prison for bank fraud and failure to appear for sentencing, United States Attorney Benjamin B. Wagner announced. Jackson had failed to appear for sentencing on the bank fraud conviction in 2011 and had been living as a fugitive until April 2014.
On July 30, 2009, a federal grand jury indicted Jackson on one count of conspiracy to commit bank fraud and one count of bank fraud. According to court documents, Jackson was part of a credit card scheme that netted over one million dollars in losses to 37 banks in 2007 and 2008. Operating from California, the scheme’s organizers sent runners to Alabama, Arizona, Illinois, Indiana, Montana, New Mexico, Ohio, Oklahoma, and Texas to use prepaid credit cards at banks for cash advances. Although the cards only had small amounts of money available, the runners would tell the bank tellers to call a toll-free number that was controlled by Jackson or another co-conspirator. Jackson, posing as a card services representative, would mislead the bank employee into believing that there were thousands of dollars available on the card, and then would instruct the teller what buttons to press on the card terminal in order to make the transaction go through. After receiving the cash, the runner would keep a portion, and the rest of the fraudulently obtained funds would go to the organizers in the Sacramento area. Jackson pleaded guilty in March 2010, but then failed to appear at her sentencing.
While she was a fugitive, Jackson was featured on CNBC’s program “American Greed: The Fugitives” and labeled as the “Bank Robbing Babe.” In April 2014, after receiving information that Jackson was in Fairfield, the Pacific Southwest Regional Fugitive Task Force, composed of U.S. Marshals and state and local agencies, set up surveillance and arrested her at a hotel. When Jackson was arrested, she had in her possession jewelry, a Cartier wristwatch, five pairs of luxury-brand shoes, 27 luxury-brand purses, and a T-shirt with “BR Babe” printed on it.
At sentencing today, Jackson addressed the Court and said that she had panicked on the day of her sentencing, and while on the run, she knew that one day it “would all come to an end.” Judge Mueller commented that in 2011, she had been inclined to impose a 10‑year sentence on Jackson, but that today, a longer sentence was necessary to send a message to defendants who might think about absconding. The judge said that even if Jackson had panicked on the day of sentencing, “she had plenty of time to think about it.” Thus, the Court imposed an increased sentence of 12 and a half years for the bank fraud and an additional, consecutive three years and one month for the charge of failure to appear.
This case was the product of an investigation by the U.S. Secret Service and the Federal Bureau of Investigation with assistance from police and sheriff’s departments in several states. Seven other defendants have previously been convicted and sentenced for their roles in the conspiracy. Assistant United States Attorney Matthew D. Segal prosecuted the case.
Former Chief Credit Officer and Former Controller of Wilmington Trust Indicted for False StatementsRead the Press Release
WILMINGTON, Del. – William North, the former Chief Credit Officer and Kevyn Rakowski, the former Controller, of Wilmington Trust, were indicted today for their respective roles in making false statements to agencies of the United States government. The charges include one count of making false statements to the Securities and Exchange Commission (SEC), and three counts of making false statements to Federal Reserve. The charges stem from North’s and Rakowski’s involvement in concealing from the market and the Federal Reserve the total quantity of past due loans on the bank’s books during October and November 2009.
Wilmington Trust was required to report in its quarterly filings with both the SEC and the Federal Reserve the quantity of its loans for which payment was past due for 90 days or more. Investors and banking regulators consider the 90-day number in evaluating the health of a bank’s loan portfolio. According to the Indictment, North, age 55, of Bryn Mawr, Pennsylvania, and Rakowski, age 61, of Lakewood Ranch, Florida, helped conceal the truth about the quality of Wilmington Trust’s loan portfolio from the investing public and from the bank’s regulators.
Notwithstanding these reporting requirements and the value of this metric to investors and regulators, North and Rakowski participated in Wilmington Trust’s failure to include in its reporting a material quantity of past due loans. North, as the bank’s Chief Credit Officer, approved the exclusion or “waiver” of such loans from internal reports that he knew would be used to generate the bank’s external financial reports. Rakowski, as Controller, approved the bank’s filings with the SEC and the Federal Reserve knowing that those reports did not include past due loans that had been “waived.”
In November 2010, Wilmington Trust was acquired by another bank at a discount of approximately 46% from the bank’s share price the prior trading day.
In announcing the Indictment, United States Attorney for the District of Delaware Charles M. Oberly, III, stated, “This Indictment represents another significant step forward in holding accountable those individuals whose criminal conduct contributed to the decline of Wilmington Trust. As the Chief Credit Officer and Controller of Wilmington Trust, North and Rakowski knew that the false information being provided to the Bank’s regulators and shareholders masked the true condition of its loan portfolio. Their respective roles in compiling and providing this false information to regulators during the Fall of 2009 are addressed in the Indictment returned today by the Grand Jury.”
“We are committed to holding accountable wrongdoers whose fraudulent actions impact the safety and soundness of financial institutions regulated by the Federal Reserve Board,” said Mark Bialek, Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.
“Bankers across our nation faced rising past due loans during the financial crisis, but not all made a choice to hide the bad loans from shareholders and regulators like these two former Wilmington Trust officers are alleged to have done,” said Christy Romero, Special Inspector General for TARP (SIGTARP). We commend United States Attorney Charles Oberly and our law enforcement partners for standing firm with SIGTARP to combat TARP-related crime.”
“Today’s indictment of William North and Kevyn Rakowski sends a strong message that individuals who engage in this type of financial fraud will not go undetected” said Akeia Conner, Special Agent In Charge, IRS Criminal Investigation. "The IRS is proud to share its financial investigative expertise in this and other increasingly sophisticated financial investigations. We will continue to work with our law enforcement partners to bring this investigation to a thorough and complete conclusion."
The case is being investigated by the Federal Bureau of Investigation, the Department of Treasury’s Special Inspector General for the Troubled Asset Relief Program, the Internal Revenue Service’s Criminal Investigative Division, and the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau. The Securities and Exchange Commission has also contributed to the investigation. The case is being prosecuted by Assistant U.S. Attorneys Robert Kravetz and Lesley Wolf of the District of Delaware.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.Final Defendant Sentenced in Operation Tow Scam 15 Defendants Convicted and SentencedRead the Press Release
CHICAGO — Former Chicago police officer Francis Zoller was the final defendant to be sentenced today in the six year investigation Operation Tow Scam, led by the Federal Bureau of Investigation. Zoller, 46, of Chicago, pled guilty on June 11, 2014 to one count of attempted extortion under color of official right and one count of mail fraud. U.S. District Court Judge Samuel Der-Yeghiayan sentenced Zoller to 12 months and one day in prison, followed by a term of one year of supervised release. Judge Der-Yeghiayan also ordered Zoller to pay restitution in the amount of $14,020, and to report to the Bureau of Prisons on August 11, 2015.
According to the court documents, Zoller engaged in a pattern of extortion of tow truck drivers and was also willing to stage an accident with one of them which led an insurance company to issue a check for $17,000 for damage that never occurred. Zoller used the authority of his office to extort money from his favored tow drivers, but he also misused his office to privilege those drivers over other towing companies who sought to obtain vehicle tows at accidents. “Zoller’s misuse of his authority on the streets of Chicago harmed the Chicago Police Department, the citizens he was sworn to protect and the tow truck drivers who were trying to make a living at accident scenes,” argued Assistant U.S. Attorney Michael Donovan in the government’s sentencing memorandum.
In total, 15 defendants were charged with extortion, tax fraud, lying to federal agents and accessing federal law enforcement database information. Of the 15 defendants, 14 pled guilty and one was convicted at trial. Of the 15 defendants, 11 are former police officers, including Zoller. Those convicted in connection to the Operation were:
Jimmie Akins, former CPD officer, pled guilty to attempted extortion under color of official right and filing a false tax return, and was sentenced to 18 months imprisonment;Michael Ciancio, formerCPD officer, pled guilty to attempted extortion under color of official right, and was sentenced to 24 months imprisonment;
Scott Campbell, former CPD officer, pled guilty to mail fraud and tax misdemeanor, and was sentenced to one year of probation;
Joseph Grillo, formerCPD officer, pled guilty to mail fraud, and was sentenced to two years probation;
James Athans, pled guilty tomail fraud and tax fraud and was sentenced to a year and a day in prison;
Joseph DeMichael, pled guilty to mail fraud, and was sentenced to two years probation;
Juan Prado, former CPD officer,pled guilty to attempted extortion under color of official right, and was sentenced to 46 months imprisonment;
James Wodnicki, former CPD officer, pled guilty to attempted extortion under color of official right and was sentenced to 24 months imprisonment;
Marcos Hernandez, formerCPD officer, pled guilty to improper access of a federal database, and was sentenced to two years probation;
Givoanni Rodriguez, pled guilty to making false statements to a federal officer, and was sentenced to two years probation;
Deavalin Page, former CPD officer,convicted after a jury trial of attempted extortion under color of official right, and was sentenced to 51 months imprisonment;
Gregory Garibay, former CPD officer, pled guilty to attempted extortion under color of official right and mail fraud, and was sentenced to 24 months imprisonment;
Brian Chandler, pled guilty to wire fraud and bank larceny, and was sentenced to 20 months imprisonment;
Ali Haleem, former CPD officer,pled guilty to attempted extortion under color of official right and selling firearms to a felon, and was sentenced to 15 months imprisonment.
Zoller’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago Police Department, Office of Internal Affairs, and the Internal Revenue Service, Criminal Investigative Division, assisted in the investigation.
The government was represented by Assistant United States Attorneys Michael Donovan and Maggie Schneider.
Federal inmate charged with having drugs in prisonRead the Press Release
A federal grand jury returned a one-count indictment charging Albert Hewins, 30, an inmate in FCI Elkton, with possessing contraband in prison, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The indictment alleges that on or about May 23, 2014, Hewins, an inmate in FCI Elkton, Elkton, Ohio, possessed prohibited objects - five suboxone strips containing buprenorphine, a Schedule III narcotic drug.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation and the Federal Bureau of Prisons. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Federal Indictment: Topeka Couple Forced Teenage Girl into ProstitutionRead the Press Release
TOPEKA, KAN. – A federal grand jury Wednesday returned indictments against a Topeka couple accused of forcing a teenage girl into prostitution, U.S. Attorney Barry Grissom said.
Reginald E. Newman, 29, and his wife, Tiara Jade Newman, 21, both of Topeka, are charged with one count of conspiracy to commit sex trafficking of a minor, and one count of sex trafficking of a minor.
“In Kansas, law enforcement agencies on the federal, state and local levels are working together to fight human trafficking,” Grissom said.
The indictment alleges the victim was introduced to the couple on March 21, 2015, and the couple conspired through March 30, 2015, to engage her in prostitution. She voluntarily travelled with them from Topeka to Manhattan, Kan., where they planned for her to engage in commercial sex acts. The defendants posted advertisements on a commercial Web site, including one offering a “two girl special.”
The indictment alleges Reginald Newman held a gun to the victim’s head and threatened to kill her if she did not participate in a commercial sex act with a male customer. Furthermore, Reginald Newman forcefully administered an illegal narcotic to the victim.
If convicted, the defendants face a penalty of not less than 15 years on in federal prison on the sex trafficking charge and a maximum penalty of life on the conspiracy charge. Assistant U.S. Attorney Christine Kenney is prosecuting.
Grissom thanked the following agencies for their work on the investigation: The Topeka Police Department, Homeland Security Investigations, the Riley County Police Department, the Junction City Police Department, the Kansas Department of Revenue, the Fort Riley Police Department, the Ottawa Police Department, the Shawnee County District Attorney’s Office, the Pottawatomie County Attorney, the Riley County Attorney and local human trafficking victim specialists.
OTHER FEDERAL GRAND JURY INDICTMENTS
Monte L. Hendricks, 23, who is being held in the Shawnee County Jail, is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Jan. 31, 2014, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The Topeka Police Department and the FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
Brendon E. Hoskins, 24, Topeka, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred March 3, 2015, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Federal Grand Jury Indicts San Antonio Businessman in Tax, Mail and Bankruptcy Fraud SchemesRead the Press Release
A San Antonio businessman stands charged by indictment with defrauding personal injury clients, evading payment of more than $1 million in taxes, and attempting to hide substantial assets from the Bankruptcy Trustee announced Acting United States Attorney Richard L. Durbin, Jr.; Christopher Combs, Federal Bureau of Investigation (FBI) Special Agent in Charge of the San Antonio Division; William Cotter, Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge; and, Judy A. Robbins, U.S. Trustee for the Southern and Western Districts of Texas.
A 16-count indictment returned by a federal grand jury yesterday charges 46–year-old Elpidio Gongora (aka “Pete Gongora”) with five counts of mail fraud, five counts of bankruptcy fraud, one count of tax evasion and five counts of aggravated identity theft.
According to the indictment, from 2009 through 2014, Gongora operated the law offices of several personal injury attorneys in the city of San Antonio and elsewhere in Texas, Arkansas and New Mexico. The indictment alleges that Gongora stole money from these attorneys and their clients by his failure to pay monies owed to clients under settlement agreements or pay obligations for medical treatment and physical therapy after committing to do so. To carry out his scheme, the indictment alleges that Gongora and his co-actors fraudulently endorsed personal injury settlement checks and would hide from the attorneys his failure to pay the clients their full case settlement proceeds.
In 2013, Gongora and his wife filed for Chapter 7 Bankruptcy in the Western District of Texas. The indictment alleges that, in relation to that filing, Gongora failed to disclose to the Bankruptcy Trustee that he owned personal assets that included a 33-foot Chris Craft cabin cruiser; a 29-foot 2005 Seaswirl boat; a 2005 Ford F-150 truck; real property located on Elm Valley in San Antonio; and, a residence located in Aransas Pass, TX.
The indictment further alleges that Gongora willfully attempted to evade paying over $1 million in taxes owed to the Internal Revenue Service for calendar years 2003 through 2005 and 2007 through 2013.
Gongora remains in federal custody following his arrest at the San Antonio International Airport last month. Upon conviction, each mail fraud count is punishable by imprisonment up to 20 years; bankruptcy fraud, up to five years; tax evasion, up to five years; and, aggravated identity theft, a term of two years.
These charges resulted from an investigation conducted by agents with the Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation (IRS-CI) and the U.S. Trustee’s Office. Assistant United States Attorney Bud Paulissen is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Federal Grand Jury Criminal Indictments AnnouncedRead the Press Release
Derick Dean Brown. Sexual Exploitation of a Child, Receipt of Child Pornography, Enticement, and Possession of Child Pornography. Brown, 24, of Collinsville, Oklahoma, is charged with sexual exploitation of a female minor, receiving and possessing child pornography, and two-counts of enticement. If convicted, the statutory minimum penalty for sexual exploitation of a child is 15 years in prison and not more than 30 years, and a $250,000 fine; the statutory minimum penalty for receipt of child pornography is five years in prison and not more than 20 years, and a $250,000 fine; the statutory minimum for enticement is 10 years in prison with a maximum of life in prison and a $250,000 fine; and the statutory maximum penalty for possession of child pornography is 20 years in prison and a $250,000 fine. Upon conviction, the defendant faces the forfeiture of his Ford Mustang used to commit or facilitate the commission of the enticement offenses. The Federal Bureau of Investigation is handling the case.
Armando Calzada-Maravillas. Alien in the United States After Deportation. Calzada-Maravillas, 46, was arrested and is charged with having returned to the United States unlawfully after being deported in December 2008, near Hidalgo, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. United States Immigration and Customs Enforcement is the investigating agency.
Ronald Steve Mason, II. Felon in Possession of Firearm and Ammunition. Mason, 31, of Tulsa, is charged with possessing a 9mm semiautomatic pistol and ammunition after prior felony convictions. If convicted, the statutory maximum penalty is 10 years in prison and a $250,000 fine. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation are the investigating agencies.
Brian K. Morrison. Failure to Register as a Sex Offender. Morrison, 45, of Tulsa, is charged with failing to register under the required Sex Offender Registration and Notification Act after a prior sex offender conviction. If convicted, the statutory maximum penalty is 10 years in prison and a $250,000 fine. United States Marshal Services is the investigating agency.
Dennis Ray Smith and Shannon Renee Friddle. Conspiracy to Commit Copyright Infringement. Smith, 60, and Friddle, 40, both of Broken Arrow, Oklahoma, are charged with conspiring to commit copyright infringement of certain movies and television shows. From September 2012 to July 2014, Smith and Friddle manufactured and sold thousands of counterfeit DVDs containing pirated movies and TV shows protected by copyright. If convicted, the statutory maximum penalty is five years in prison and a $250,000 fine. Upon conviction, the defendants face forfeiture of more than $105,000 in proceeds obtained as a result of the copyright infringement offense. United States Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) is investigating the case.
Fayette County Postal Contractor Charged with Stealing $20 from EnvelopeRead the Press Release
PITTSBURGH - A resident of Uniontown, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of mail theft, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on May 5, named Scott E. Funk, 44, as the sole defendant.
According to the Indictment, on Sept. 9, 2014, defendant, while working as a contract driver responsible for transporting mail and equipment for several post offices in Fayette County, Pennsylvania, stole $20 from an envelope addressed to a recipient in Ellsworth, Pa.
The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.
The United States Postal Service Office of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
East Boston Man Charged with Malathion MisuseRead the Press Release
BOSTON – An East Boston man was indicted on Thursday, April 30, 2015, in connection with his unlawful application of a federally-registered pesticide.
Jose Sanchez, Sr., 60, used a pesticide containing Malathion in a home when Malathion is only approved for exterior use. Under the federal Fungicide, Insecticide and Rodenticide Act (FIFRA), registered pesticides may only be used in a manner consistent with their approved labeling, in part to ensure the safety of persons who may be exposed to the toxins contained in the pesticide.
The charging statute provides a sentence of no greater than 30 days in prison and a fine of $1,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Tyler Amon, Special Agent in Charge of the U.S. Environmental Protection Agency, Criminal Investigation Division, Boston Office, made the announcement today. The case is being prosecuted by Thomas E. Kanwit of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Contractors and Developer Charged in White Plains Federal Court with Conspiracy, Fraud, and Kickback SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Christina Scaringi, Special Agent in Charge, Department of Housing and Urban Development, Office of the Inspector General ("HUD-OIG"), Northeast Region, announced today the return of a Superseding Indictment charging MICHAEL BARNETT, ROBERT LEES, and KEVIN DICELLO with conspiracy, fraud, and false statement charges in connection with the development of Vineyard Commons, a luxury residential complex in Ulster County, New York. This case is assigned to Judge Kenneth M. Karas.
Manhattan U.S. Attorney Preet Bharara said: “Michael Barnett allegedly abused his position as the developer of Vineyard Commons to enrich himself and defraud his construction lender and, ultimately, the U.S. Department of Housing and Urban Development, which guaranteed the construction loan. As charged, Robert Lees and Kevin DiCello were all too willing to go along with Barnett's demand for an $865,000 kickback so that they could get more business from Barnett in the future.”
HUD-OIG Special Agent in Charge Christina Scaringi said: “These defendants were entrusted to use federally-insured funds to provide decent affordable housing for our senior citizens. Instead, as alleged, they lied to the lender and siphoned project funds to satisfy their greed. The HUD OIG will not tolerate this behavior and is committed to rooting out those who choose to engage in these outrageous acts.”
According to the allegations made in the Superseding Indictment*:
BARNETT, who was the developer of Vineyard Commons, sought kickbacks and investments from subcontractors and vendors on the project and made false statements to the project's lender so that he could draw down on the project's line of credit. LEES and DICELLO were a division president and vice president of operations, respectively, for a subcontractor and vendor that provided rough carpentry and lumber supplies on the project (the "Lumber Company"). The indictment charges that LEES and DICELLO agreed to have their employer pay BARNETT a
kickback of approximately $865,000 in exchange for the Vineyard Commons contract, as well as future business on other developments BARNETT was planning.
BARNETT, LEES, and DICELLO entered into an agreement by which the Lumber Company inflated its bid for labor and materials by approximately $865,000, which would be paid to BARNETT as a kickback from the Lumber Company.
The defendants intended that the kickback would be funded unwittingly by the construction lender, and ultimately by HUD through its guaranty of the construction loan, through the submission of false and inflated requests to draw down the construction loan.
In January 2010, the Lumber Company made a partial kickback payment of $200,000 to BARNETT, and the defendants disguised the transaction on the Lumber Company's books by making it appear to be a customer rebate payable to a company controlled by BARNETT that was not involved in the development of Vineyard Commons. BARNETT then used the $200,000 as a partial payment of an obligation he had to the general contractor on Vineyard Commons.
BARNETT solicited subcontractors and vendors on the Vineyard Commons project, including the Lumber Company, to provide labor and materials to build a pool house at his home. Some of these subcontractors and vendors, including the Lumber Company, agreed to do so.
BARNETT submitted false invoices to the construction lender in order to enrich himself fraudulently by drawing down the loan.
The defendants and the counts with which they are charged in the Superseding Indictment are set forth in the attached list.
Mr. Bharara thanked the HUD-OIG for its outstanding work on the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Michael Maimin and James McMahon are in charge of the prosecution.
*The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
View Chart
US v Barnett et al Indictment
Columbian National Sentenced for Illegally ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANTONIO CAICEO-VALENCIA, age 42, a citizen of Columbia, was sentenced after previously pleading guilty to a one-count Indictment for illegal reentry of a removed alien.
U.S. District Judge Helen G. Berrigan sentenced CAICEO-VALENCIA to 30 months imprisonment followed by 3 year of supervised release, and a $100 special assessment. Upon completion of his sentence, CAICEO-VALENCIA will be surrendered to the custody of U.S. Immigration & Customs Enforcement for removal proceedings.
According to court documents, on or about November 20, 2014, CAICEO-VALENCIA was found in the United States after having been officially deported and removed on or about December 27, 2010
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, ICE Enforcement and Removal Operations in investigating this matter. Assistant United States Attorney Spiro G. Latsis was in charge of the prosecution.
Cleveland woman indicted for improperly cashing $338,000 worth of Social Security checks over 24 yearsRead the Press Release
A federal grand jury indicted Carolyn Freeman, 61, of Cleveland for theft of government funds, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
The indictment alleges that Freeman fraudulently cashed Social Security widow’s benefits checks from November 1989 until April 2014, taking a total of $338,504 in benefits to which she was not entitled.
The Social Security Administration Office of Inspector General conducted the investigation. The case is being prosecuted by Special Assistant United States Attorney Lisa J. Sanniti and Assistant United States Attorney M. Kendra Klump.
If convicted, the Court will determine the defendant’s sentence after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum. In most cases, it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
City of Caribou, Maine, Agrees to Settle Justice Department Lawsuit Alleging Sex DiscriminationRead the Press Release
The Justice Department announced today that it has agreed to enter into a consent decree with the city of Caribou, Maine, that, if approved by the U.S. District Court for the District of Maine, will resolve allegations that Caribou discriminated against a female employee based upon her sex, in violation of Title VII of the Civil Rights Act of 1964.
The department’s complaint alleges that Caribou discriminated against a female city employee when she was regularly subjected to sexual harassment in the workplace by the city’s former Fire Chief, Roy Woods. According to the complaint, the sexual harassment of the victim included both unwanted touching and comments, culminating in Mr. Woods sexually assaulting the victim. At the time of the assault, the victim was 18 years old and worked for Caribou under Mr. Woods’ supervision. Mr. Woods was 66.
According to the department’s complaint, Caribou did not take reasonable steps to prevent Woods’ unlawful acts. For instance, supervisory employees with Caribou knew that Woods had a history of sexually harassing women in the workplace but Caribou never took any action to stop his harassment. Caribou did not take any corrective action at all until Dec. 27, 2011, after Woods had assaulted the victim. The victim was never provided with Caribou’s sexual harassment policy and was unaware of the process for reporting Woods’ illegal conduct before it escalated to an assault. The department’s complaint was based on a charge of discrimination filed by the victim with the Equal Employment Opportunity Commission (EEOC) and the Maine Human Rights Commission that was forwarded to the department by the EEOC’s Boston Office.
Under the terms of the consent decree, once approved by the district court, Caribou is required to review and revise its sexual harassment policies in order to protect its employees from sexual harassment in the workplace. Caribou must provide training to its employees on its newly revised policies for the prevention of sexual harassment. The consent decree also requires Caribou to pay the victim a monetary award of $85,000.
“All Americans are entitled to a workplace that is free of unlawful harassment based upon sex,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The early resolution of this case, without contested litigation, was in the best interests of all parties concerned.”
The United States is represented in this case by Civil Rights Division attorney Allan Townsend.
The enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its web sites at http://www.justice.gov/crt/ and http://www.justice.gov/crt/emp/.
Chesapeake Man Sentenced for Possession of Fraudulent Debit CardsRead the Press Release
Cards were re-encoded with other account numbers
NORFOLK, Va. – Rickie Bailey, Jr., 25, of Chesapeake, was sentenced today to 33 months in prison for possession of 15 or more unauthorized access devices.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Douglas F. Mease, Special Agent in Charge of the United States Secret Service’s Richmond Field Office; and Kelvin L. Wright, Chief of Police, Chesapeake Police Department, made the announcement after Bailey was sentenced by Senior U.S. District Judge Robert G. Doumar.
Bailey pled guilty on October 30, 2014. According to the statement of facts filed with his plea agreement, in April of 2014, Bailey was in possession of counterfeit debit cards when he was confronted by officers from the Chesapeake Police Department. The officers were able to enter and speak to Bailey in his room at the Sun Suites Motel in Chesapeake. It was there that the officers found debit cards, a magnetic card reader/writer, receipts for recent purchases, and a notebook that contained a handwritten list of names with associated dates of birth and social security numbers. Agents with the United States Secret Service later analyzed all of the debit cards. Of the 46 cards analyzed, 36 of them had been re-encoded with other account numbers. Twenty-seven of the 36 cards were associated with names that were found among the list of names in the notebook or notebook papers.
This case was investigated by the U.S. Secret Service and the Chesapeake Police Department. Assistant United States Attorney Randy Stoker prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-121.
Buffalo Man Sentenced for Robbing Four BanksRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Clifford B. Smith, 34, of Buffalo, NY, who was convicted of bank robbery and tampering with a witness, was sentenced to 151 months in prison and ordered to pay restitution in the amount of $31,392 by Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that between September 2011 and November 2011, Smith robbed four HSBC Bank locations throughout the City of Buffalo. On each occasion, he presented the teller with a note and threatened a gun.
During the last robbery, Smith brandished a gun and robbed three tellers and told the tellers that if a dye pack goes off outside, someone is going to get shot. During this robbery, one of the customers experienced chest pain and thought she was having a heart attack. The defendant robbed the branch twice within two weeks, and one of the tellers recognized Smith from the earlier robbery.
Smith also attempted to convince a witness to lie and say that she was with the defendant when the robberies occurred. Smith later sent a letter to the woman providing her with some of the dates that he wanted her to use for his alibi.
The sentencing is the culmination of an investigation by the Buffalo and Philadelphia Offices of the Federal Bureau of Investigation, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Buffalo Man Pleads Guilty to Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that James Humphrey, Jr., 41, of Buffalo, NY, pleaded guilty to conspiracy to distribute over 500 grams of cocaine before U.S. District Judge Richard J. Arcara. The charge carries a mandatory minimum penalty of five years, a maximum of 40 years and a $5,000,000 fine.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that the defendant, along with co-defendants, distributed multiple quantities of cocaine between 2009 and January 2010. Humphrey traveled to Ohio to obtain quantities of cocaine for distribution. The defendant was arrested along with four others. All five defendants have now been convicted.
The plea is the culmination of any investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division.
Sentencing is scheduled for August 26, 2015 at 1:00 p.m. before Judge Arcara.
Bourbonnais Tax Preparer Sentenced to 24 Months in Prison for Filing False Income Tax ReturnsRead the Press Release
Peoria, Ill. – A Bourbonnais, Ill., man, Robert J. Deangelo, has been sentenced to two years in prison for filing false income tax returns. On May 4, Senior U.S. District Judge Michael M. Mihm ordered that Deangelo, 63, serve 24 months in federal prison, and one year of supervised release following his release from prison. Deangelo was ordered to report on July 14, 2015, to the federal Bureau of Prisons to begin serving his sentence. Deangelo was also ordered to pay restitution in the total amount of $62,947.00 to the IRS, as well as a $1,200.00 special assessment. In addition, Deangelo was ordered to pay the cost of prosecution in the amount of $5,962.39 to the United States.
On Dec. 10, 2014, a jury convicted Deangelo of 12 counts of filing false income tax returns. From 2007 to 2010, DeAngelo provided tax services from his home office, on St. Pauls Drive, Bourbonnais, that included the preparation and filing of tax returns for hundreds of clients. During the trial, the government presented evidence to establish that for the 2008, 2009, and 2010 tax years, DeAngelo falsely underreported his tax business’s gross receipts and inflated its expenses. Despite receiving tens of thousands of dollars in income during this time, DeAngelo paid no federal income tax for those years, and in fact, claimed an earned income credit. For tax years 2008, 2009, and 2010, DeAngelo failed to pay more than $30,000 in federal income taxes that were due and owing. During this time period, DeAngelo also created false employee business expense deductions, namely unreimbursed business mileage, for his tax return clients, without their knowledge. The false income tax returns provided larger refunds for DeAngelo’s clients and resulted in an overall tax loss of more than $50,000.
During the jury trial, DeAngelo testified on his own behalf. At sentencing, Judge Mihm found that DeAngelo’s trial testimony was “outrageous” and that he committed perjury during his trial. Judge Mihm cited the perjured testimony and the need to deter other paid tax preparers from committing tax fraud as reasons in support of the sentence of imprisonment. Judge Mihm also prohibited DeAngelo from preparing tax returns for other individuals during the period of his supervised release.
The case was prosecuted by Assistant U.S. Attorney Eugene L. Miller. The charges were investigated by the Internal Revenue Service Criminal Investigation Division.
Belleville Woman Guilty of Preparing False Tax ReturnsRead the Press Release
Earlier today, Tanesa L. Beverly, 31, of Belleville, Illinois, pled guilty to offenses arising from her participation in a fraudulent tax return preparation business, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced.
Beverly pled guilty to one count of conspiring to submit false claims to the United States and five additional counts of preparing false federal tax returns. Beverly is one of five defendants charged in a January 22, 2015, indictment relating to a tax return preparation business known as Tax King. Beverly and the other four defendants worked as return preparers at the East St. Louis office of Tax King. In pleading guilty today, Beverly admitted that she created false returns which enabled Tax King’s clients to obtain much bigger refunds than they were entitled to receive. Beverly did this by creating false Business Income and Schedules Cs in order to cause the clients to qualify for larger Earned Income Credits ("EICs"). The loss to the Government as a result of false returns prepared by Beverly is estimated to be $73,393.
The charge of conspiring to submit false claims carries a maximum sentence of 10 years in prison and a $250,000 fine. Each charge of preparing false income tax returns carries a maximum sentence of 3 years in prison and a fine of $250,000. Beverly’s sentencing hearing is scheduled for December 1, 2015, at 9:30 a.m.
The trial of the remaining five defendants, Edric A. Russell, Lakesha R. Wilson, Melissa L. Wiley, and Pierre J. Carter, is scheduled to begin on September 8, 2015.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge and is entitled to a fair trial at which the Government must prove guilt beyond a reasonable doubt.
The case was investigated by the Internal Revenue Service/Criminal Investigations. The prosecution is being handled by Assistant United States Attorney Scott A. Verseman.
Bay County Woman Sentenced for Impersonating a Law Enforcement OfficerRead the Press Release
PANAMA CITY, FLORIDA – Marcia Dawn Lowery, 41, of Parker, Florida, was sentenced to four and a half months in federal prison by United States District Judge Richard Smoak for impersonating a federal law enforcement officer. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Between September and October 2014, Lowery resided at the Smuggler’s Cove residential complex (the “complex”) in Bay County where she posed as a Deputy United States Marshal. Lowery told residents in the complex that she working undercover. To further her impersonation, Lowery walked around the complex wearing a t-shirt with the word “POLICE” on it.
While posing as a Deputy United States Marshal, Lowery: (1) told a resident in the complex that Lowery would arrest the resident’s children for their bad behavior and take them to juvenile detention; (2) told a resident in the complex that the resident was in Lowery’s protective custody because of the resident’s outstanding arrest warrant from Tennessee; (3) told a resident, who was on probation, that Lowery would get the resident’s conviction expunged if the resident provided Lowery with the names of his drug sources, which he did; and (4) based on her representations that she was a Deputy United States Marshal, obtained extensions on her rent, which went unpaid and resulted in a loss to the complex of approximately $1500.
The case was investigated by the United States Marshals Service, Federal Bureau of Investigation, Parker Police Department, and the Bay County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Gayle E. Littleton.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Andover Man and His Woburn Construction Company Charged with Defrauding Union Benefit Funds and IRSRead the Press Release
BOSTON – An Andover man and his Woburn company were charged yesterday with paying employees in cash in order to avoid paying union benefits and employment taxes.
Ronald P. Mulcahey, 53, and Wing Environmental, Inc., were indicted on theft from benefit plans subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) and making false statements in documents submitted to benefit plans subject to ERISA. Mulcahey was also charged with tax evasion.
The indictment alleges that Mulcahey was the owner and sole corporate officer of Wing Inc. Specialty Trades, EWT-Fireproofing, Inc., and Wing Environmental, Inc. Wing Environmental was a union company that provided asbestos abatement and demolition services and had a collective bargaining agreement with the Laborer’s International Union of North America, Local 1421. As a union employer, Wing Environmental was required to accurately report to the union benefit funds the number of hours worked by its union employees and to make the corresponding contributions to the funds. The indictment further alleges that, between January 2008 and June 2011, Mulcahey and Wing Environmental engaged in a scheme to defraud the union benefit funds by paying some of those employees in cash. By keeping the cash payments off-the-books, Mulcahey and Wing Environmental falsely underreported the union workers’ hours in order to avoid making the required hourly payments to the benefit funds. Union benefit funds are used to provide healthcare, pensions and other services to union members.
According to the indictment, Wing Specialty Trades and EWT-Fireproofing were non-union companies that provided asbestos abatement, demolition, and fireproofing services. All of Mulcahey’s companies were required by federal tax law to accurately report their total payments to employees and to withhold and pay to the IRS the applicable employment and income taxes based on those payments. Between January 2008 and June 2011, it is alleged that Mulcahey was defrauding the IRS by paying certain employees of all three of his companies in cash. By keeping the cash payments off-the-books, Mulcahey falsely underreported his workers’ wages to the IRS and avoided paying employment taxes on the unreported wages.
Each of the charging statutes provides for a sentence of no greater than five years in prison and three years of supervised release. The ERISA charges provide for a fine of no greater than $250,000 and the tax charges provide for a fine of no greater than $100,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Cheryl Garcia, Special Agent in Charge of the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Susan A. Hensley, Regional Director of the Employee Benefits Security Administration, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kristina E. Barclay of Ortiz’s Public Corruption Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Albuquerque Barber Sentenced for Defrauding the Federal Food Stamp ProgramRead the Press Release
ALBUQUERQUE – Joshua Moya, 33, of Albuquerque, N.M., was sentenced this morning in federal court to six months in prison, or time served, followed by three years of supervised release for defrauding the Supplemental Nutrition Assistance Program, more commonly known as the “Food Stamp” Program. Moya also was ordered to pay $2,444.00 in restitution.
Moya is one of six Albuquerque residents charged with defrauding the Food Stamp Program in a 32-count indictment that was filed in Aug. 2014. The indictment alleged that between Sept. 2009 to May 2010, Joseph Martin Padilla, 33, conspired with Moya, Sergio Escobedo, 36, Veronica Hernandez, 44, Justin Quintana, 28, and Wilfredo Lopez, 46, to defraud the United States through the unauthorized use of Food Stamp benefits, which are currently called Supplemental Nutrition Assistance Program (SNAP) benefits. During this time, Padilla worked as a Family Assistance Analyst for the Income Support Division of the New Mexico Human Services Department where he allegedly was responsible for determining applicants’ eligibility and benefit level for SNAP benefits.
According to the indictment, SNAP is funded by the U.S. Department of Agriculture and is administered by the States. The program was created to alleviate hunger and malnutrition, and permits low income households to obtain more nutritious diet by increasing the food purchasing power for eligible households. In New Mexico, individuals qualify to participate in SNAP based on income and need by completing an application with the Income Support Division of the New Mexico Human Services Department. Once an applicant is deemed eligible for SNAP benefits by a Family Assistance Analyst, the Analyst establishes a SNAP account in the applicant’s name and electronic benefit transfers (EBT), which are determined based on income, resources and household size, are deposited into the account on a monthly basis.
Count 1 of the indictment alleges that Padilla abused his position as a Family Assistance Analyst to conspire with his co-defendants to defraud the United States through the unauthorized use of SNAP benefits. It alleges that Padilla used names and personal identifiers he obtained from his co-defendants to establish fraudulent SNAP accounts, sometimes in exchange for cash or other things of value. Count 2 alleges that Padilla established a fraudulent SNAP account and used the account to fraudulently obtain approximately $1,468.00 in SNAP benefits for himself. Counts 3 through 27 of the indictment allege that Padilla fraudulently established 25 separate SNAP accounts through which the United States was defrauded of approximately $45,263.00 in SNAP benefits. Counts 28 through 32 allege that Padilla, aided and abetted by his co-defendants, fraudulently established SNAP accounts that were used to fraudulently obtain an aggregate of $12,705.00 in SNAP benefits.
On March 9, 2015, Moya entered a guilty plea to Count 31 of the indictment and admitted that he fraudulently obtained SNAP benefits to which he was not entitled. In his plea agreement, Moya admitted that in early Dec. 2009, Padilla approached him while he was working in an Albuquerque barber shop and provided him with an application to obtain food stamps. Moya admitted knowing that Padilla worked for the State of New Mexico and had the ability to register him for SNAP benefits. Moya completed the application and returned it to Padilla for processing even though he knew that he was not entitled to SNAP benefits. Moya admitted unlawfully receiving $866.00 in SNAP benefits. Moya also admitted providing another application for SNAP benefits to a family member and that his relative unlawfully received $1,578.00 in SNAP benefits.
Padilla and his four remaining co-defendants have entered not guilty pleas to the charges in the indictment. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Office of Inspector General for the U.S. Department of Agriculture, and was prosecuted by Assistant U.S. Attorney Sean J. Sullivan.
Alabama Man Sentenced to 17 and A Half Years in Prison for His Role in $15 Million Mortgage Fraud Scheme, Including Attempted Murder of A WitnessRead the Press Release
CAMDEN, N.J. – A Ventress, Alabama, man was sentenced today to 210 months in prison for conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Kinard Henson, 43, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and one count of attempted murder of a witness in a federal case. Judge Simandle imposed the sentence today in Camden federal court.
According to the documents filed in this case and statements made in court:
Henson was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Henson’s conspirators located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Florida – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.
Henson and others recruited straw buyers to purchase certain properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Henson’s conspirators also caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Henson received a portion of the proceeds after his conspirators had funds wired or checks deposited into various accounts they controlled.
Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times.
In addition to the prison term, Judge Simandle sentenced Henson to serve five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Stanley King Esq., Woodbury, New Jersey
5 May 2015
“SNAP” Fraudster Sentenced to PrisonRead the Press Release
Tampa, FL – U.S. District Judge Steven D. Merryday has sentenced Basem Abualteen (48, Lakeland) to 18 months in federal prison for conspiracy to defraud the United States. The Court also ordered him to pay $2,110,778 in restitution. Abualteen pleaded guilty on December 23, 2014.
According to court documents, from January 2013 to August 27, 2014, Abualteen conspired with Hamzeh Abu-Aish and Shoeneikia Abu-Aish to defraud the U.S. Department of Agriculture's food stamp program, now known as the Supplemental Nutrition Assistance Program (SNAP). Hamzeh Abu-Aish was the owner of Finest Meat Market d/b/a Finest Super Market located in Lakeland. Abualteen and Shoeneikia Abu-Aish worked as Finest store clerks beginning in January 2013. Hamzeh Abu-Aish instructed the clerks to purchase SNAP benefits from SNAP recipients in exchange for cash and a commission, a practice called “cash back” or “discounting.” For example, a SNAP recipient would approach a store clerk and ask for $100 in cash, the store clerk would then charge $200 to the SNAP recipient’s Electronic Benefit Transfer (EBT) card, and then give the SNAP recipient $100 in cash. This practice is strictly prohibited by SNAP regulations.
During the course of the scheme, SNAP EBT redemptions at Finest far exceeded the national and state averages of similarly sized stores. In July 2013, the average SNAP benefit redemptions for a similarly sized store was $7,059 in Florida, and $6,490 nationally. Finest had $160,821 in SNAP benefit redemptions for that same time period. During Abualteen’s participation in the scheme, Finest submitted and received approximately $2,110,778 in fraudulent SNAP EBT redemptions.
Hamzeh Abu-Aish and Shoeneikia Abu-Aish previously pleaded guilty for their roles in this scheme. Shoeneikia Abu-Aish has been sentenced to three years’ probation. The sentencing hearing for Hamzeh Abu-Aish is scheduled for July 17, 2015.
This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Agriculture’s Office of the Inspector General. It was prosecuted by Assistant United States Attorneys Matthew Jackson and Mark Bini.
Watertown Resident Pleads Guilty to Role in Bank Fraud SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Patricia Ferrick, Special Agent In Charge, Federal Bureau of Investigation, and William Offord, Special Agent in Charge, IRS Criminal Investigation announced that JASON CALABRESE, 43, of Watertown, pleaded guilty today before U.S. District Judge Janet Bond Arterton in New Haven to his involvement in a series of fraudulent mortgage loan applications.
According to court documents and statements made in court, in November 2005, CALABRESE’s co-conspirator, Thomas Provenzano, obtained a $923,200 loan to purchase a lakefront home located at 27 Palmer Road in Morris for more than $1.1 million, despite lacking the income to pay off the mortgage. The 27 Palmer Road property was owned by an entity controlled by Ryan Geddes, another co-conspirator. To finance the purchase, Provenzano applied for a mortgage through CALABRESE, who was a mortgage broker. The mortgage loan application contained statements that CALABRESE knew were false, namely, that Provenzano had worked for the past four years as the “General Manager” for a Geddes-owned construction company, and that Provenzano’s income from the listed job was $20,000 per month, or $240,000 per year. In fact, Provenzano’s income was substantially less than that amount. CALABRESE submitted the false loan application to a lender, which issued a $923,000 mortgage. At the closing, CALABRESE’s mortgage company was paid a $32,312 broker’s fee.
In November 2006, Provenzano applied for a new mortgage through CALABRESE to refinance the November 2005 mortgage for the 27 Palmer Road property. The mortgage refinancing application also contained statements that CALABRESE knew were false, namely, that Provenzano had worked for the past five years at Geddes’s construction company, and that Provenzano’s income from the listed job was $28,000 per month, or $336,000 per year. CALABRESE submitted the false loan application to a federally-insured lender, which issued a $936,000 mortgage. At the closing, CALABRESE’s mortgage company was paid an $18,720 broker’s fee.
The 2005 loan application had stated that Provenzano would reside in the 27 Palmer Road property as an owner-occupant. In fact, Geddes and his family continued to reside in the property. For a few years, Geddes paid Provenzano “rent,” which Provenzano used to cover the mortgage payments. But when Geddes moved out of the 27 Palmer Road property, he stopped forwarding payments to Provenzano, who stopped paying the mortgage. Accordingly the 27 Palmer Road property went into foreclosure.
CALABRESE pleaded guilty to one count of conspiracy to commit bank fraud. He is scheduled to be sentenced on July 28, 2015, at which time he faces a maximum term of imprisonment of 30 years. Provenzano and Geddes previously pleaded guilty. On December 1, 2014, Provenzano was sentenced to 18 months of imprisonment. Geddes awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys Henry Kopel and Michael Gustafson.
Verona Man Facing Child Pornography ChargesRead the Press Release
PITTSBURGH - A resident of Verona, Pa., has been indicted by a federal grand jury in Pittsburgh on a charge of distribution of material depicting the sexual exploitation of a minor, and a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The two-count indictment, which was returned on March 17, named David Hudak, 45 as the sole defendant.
According to the indictment, from Feb. 14, 2013 through March 8, 2013, Hudak distributed visual depictions, namely photographs in computer graphics files, the production of which involved the use of a minor engaging in sexually explicit conduct. The indictment further charges that Hudak, on April 24, 2013, unlawfully possessed in computer graphics files, photographs and videos depicting minors engaged in sexually explicit conduct.
The law provides for a maximum total sentence of 30 years in prison, a fine of $500,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and other members of the Western Pennsylvania Violent Crimes Against Children Task Force conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
USP Hazelton inmate charged with assaulting fellow prisonerRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal grand jury returned an indictment today charging Deonte Spicer, 28, an inmate at the United States Penitentiary Hazelton, with assaulting a fellow prisoner, United States Attorney William J. Ihlenfeld, II, announced.
Spicer allegedly stabbed a fellow inmate multiple times with a hand crafted weapon during a physical altercation in February 2015.
Spicer is charged with one count of “Assault with a Dangerous Weapon with Intent to Do Bodily Harm.” He faces up to 10 years in prison and a fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew Cogar is prosecuting the case on behalf of the government. The Federal Bureau of Prisons and the Special Investigative Services Unit at USP Hazelton are leading the investigation.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Charges Huntsville Man with Crossing State Line for Sex with ChildRead the Press Release
BIRMINGHAM -- Federal prosecutors today charged a Huntsville man with crossing the Alabama state line with the intent to engage in a sexual act with a child younger than 12, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
The U.S. Attorney's Office charged CHARLES WALKER DUNNAVANT, 32, in a one-count information filed in U.S. District Court. According to the charge, Dunnavant crossed the state line in April 2013 in order to engage in a sex act with a child. Dunnavant entered a plea agreement with the government, which was filed under seal.
The maximum penalty for the charge is 30 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Mary Stuart Burrell is investigating.
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Two Upshur County men charged with methamphetamine traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal grand jury returned an indictment today charging Arwen Tinuviel Palmer, 35, and Dustin Lynn Phillips, 33, both of Buckhannon, West Virginia, with methamphetamine trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Palmer and Phillips allegedly possessed and distributed methamphetamine in Upshur County, West Virginia throughout 2014.
Both defendants are charged with one count of “Possession with Intent to Distribute Methamphetamine.” Palmer is further charged with three counts of “Methamphetamine Distribution.” Phillips is further charged with two counts of “Methamphetamine Distribution.” They each face up to 20 years in prison and a fine of up to $1,000,000.00 on each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorney Stephen Warner is prosecuting the case on behalf of the government. The Upshur County Sheriff’s Office and the Mountain Region Drug and Violent Crime Task Force are leading the investigation.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Men Plead Guilty to Drug Conspiracy After Manufacturing Methamphetamine in LancasterRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that John Ruth, 40, and Michael Jachimiak, 37, both of Lancaster, N.Y., pleaded guilty to conspiracy to manufacture methamphetamine, before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Mary Catherine Baumgarten, who is handling the case, stated that in the early morning hours of June 19, 2014, officers from the Lancaster Police Department conducted a trash pull at 97 Field Street in Lancaster and seized approximately 736 spent pseudophedrine blister packs, and receipts for the purchase of precursor materials used to manufacture methamphetamine. Later that day, officers and Drug Enforcement Administration special agents executed a NYS search warrant at the residence. Officers seized 3-hydrocholoric acid gas generators, hypodermic needles containing suspected liquid methamphetamine, white, crystalline substance weighing approximately 43.27 grams, Mason jars containing “one-pot” methamphetamine laboratory residue, 1 Coleman fuel bottle, 1 can of Zippo acid, 2 bottles of ammonium nitrate, and other precursors used to manufacture methamphetamine.
Ruth manufactured methamphetamine, with the assistance of Jachimiak, numerous times at the residence. At various times, Ruth arranged for other individuals to purchase pseudophedrine tablets and other materials needed to manufacture methamphetamine. Ruth used some of the methamphetamine and sold some of it. The substances seized were sent to the DEA Northeast Regional Laboratory for analysis, which confirmed that the substances contained methamphetamine residue.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division and the Lancaster Police Department, under the direction of Chief Gerald Gill.
Ruth will be sentenced on August 24, 2015 at 1:00 p.m., Jachimiak on August 20, 2105 at 12:30 p.m., both before Judge Arcara.
Two Doctors Each Sentenced to 37 Months in Prison for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – Two doctors were sentenced to prison today for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Eugene DeSimone, 60, of Eatontown, New Jersey, who practiced in Secaucus, and Franz Goyzueta, 67, of New York, who practiced in New York, were each sentenced to 37 months in prison. DeSimone and Goyzueta previously pleaded guilty before U.S. District Judge Stanley R. Chesler to separate informations charging them each with one count of accepting bribes. Judge Chesler imposed both sentences today in Newark federal court.
Including DeSimone and Goyzueta, 38 people – 26 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has so far recovered more than $10.5 million to date through forfeiture.
According to documents filed in this and related cases and statements made in court:
DeSimone accepted $1,500 in cash per month between August 2010 and March 2013 in return for referring patient blood specimens to BLS, for which BLS received $980,000. Goyzueta accepted as much as $3,000 per month from BLS between December 2013 and March 2013 in return for patient blood specimen referrals, for which BLS received approximately $713,249.
In addition to the prison terms, Judge Chesler sentenced both DeSimone and Goyzueta to serve one year of supervised release; he fined Goyzueta $75,000 and DeSimone $5,000. As part of their guilty pleas, DeSimone must forfeit $260,500 and Goyzueta must forfeit $72,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation.
The government is represented by Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.