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Tuesday 17 March 2015
Gregg County Convicted Felon Sentenced for Federal Firearms ViolationRead the Press Release
TYLER, Texas - A 39-year-old Longview, Texas man has been sentenced to federal prison for being a felon in possession of a firearm in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
John Blake London pleaded guilty on Dec. 2, 2014, to being a felon in possession of a firearm and was sentenced to 42 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, on July 9, 2014, London was driving a car in Longview when he was detained by a police officer because he had parked in a roadway and was impeding traffic. During the course of the detention, the officer discovered that London had an active warrant so the officer placed him under arrest. The officer then learned that the only passenger in the car had no valid driver’s license, so the officer called for a tow truck and performed an inventory of the car. During the course of the inventory, the officer discovered a sawed-off shotgun. The officer checked London’s criminal history and found that he had been previously convicted of forgery in Gregg County in 2012 and possession of cocaine in Tarrant County in 2008. Convicted felons are prohibited by federal law from owning or possessing firearms or ammunition. London was indicted by a federal grand jury on Sep. 17, 2014.
This case was prosecuted as part of Project Safe Neighborhoods, aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
This case was investigated by the Longview Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Jim Noble.
Georgia Man Pleads Guilty to Fraudulently Obtaining Title Ii Child Insurance BenefitsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Donald Hargrave, 62, of Douglasville, GA, pleaded guilty to unlawfully receiving Title II Child Insurance Benefits before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that between May 2012 and July 2013, while living in Buffalo, the defendant received Title II Child Insurance Benefits from the Social Security Administration but did not use the benefits to support his son. Hargrave received a total of $39,124 to which he was not entitled.
The plea is the result of an investigation by the Office of the Inspector General of the Social Security Administration, under the direction of Special Agent in Charge Edward J. Ryan.
Sentencing is scheduled for July 1, 2015 at 9:00 a.m. before Judge Skretny.
Fugitive Chinese Official and Former Wife Named in Grand Jury Indictment Charging Immigration Fraud and Money LaunderingRead the Press Release
LOS ANGELES – The ex-wife of a former Chinese official was arrested today in Newcastle, Washington, on charges that she and her former husband fraudulently obtained visas to enter the United States through the immigrant investor program and laundered money to purchase property in Washington state.
Shilan Zhao (趙世蘭), 51, of Newcastle, Washington, and her ex-husband Jianjun Qiao (喬建軍), 51, are charged in a federal grand jury indictment unsealed today with conspiracy to commit immigration fraud and international transport of stolen funds, as well as conspiracy to commit money laundering. Zhao is additionally charged with one count of immigration fraud.
The divorced couple’s scheme involved falsely portraying themselves as still married and lying about the source of Zhao's foreign investment, which was required under the EB-5 immigrant investor program to obtain U.S. immigrant visas, according to the indictment. Zhao allegedly stated under oath on documents submitted to U.S. Citizenship and Immigration Services that she had an ownership interest in the companies providing the $500,000 minimum investment, which investigators later learned she did not.
The indictment also states the divorced couple purchased a residence in the Seattle suburb of Newcastle with laundered money related to fraudulent transactions from a grain storehouse in Zhoukou City, Henan Province, China where Qiao served as director from 1998 to 2011.
As part of the indictment, the federal government is seeking the forfeiture of property obtained through the proceeds of the scheme, including the house in Newcastle, Washington. The indictment also alleges that Qiao engaged in fraudulent grain transactions while serving as the grain storehouse director, and Qiao and Zhao had money transferred out of China, with approximately $500,000 being used to purchase the Newcastle property.
Zhao appeared this afternoon in federal court in Seattle, Washington, where the indictment was unsealed. At the government’s request, Zhao was ordered detained (held without bond) and is scheduled to be back in court in Seattle on Friday.
Qiao remains at large and is being sought by U.S. authorities.
If convicted, Zhao faces statutory maximum sentences of five years in federal prison for the charges of conspiracy to commit international transport of stolen funds and immigration fraud, 10 years for the immigration fraud charge, and 20 years for the money laundering conspiracy charge.
This case is the product of a joint investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Internal Revenue Service - Criminal Investigation, which received assistance from U.S. Citizenship and Immigration Services. Investigators also acknowledge the assistance provided by the Supreme People's Procuratorate and Ministry of Public Security of the People's Republic of China.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Release No. 15-028
Former Postal Employee Sentenced for Obstruction of the MailsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jennifer Paonessa, 33, of Niagara Falls, NY, who was convicted of obstruction of the mails, was fined $250.00 by U.S. Magistrate Judge H. Kenneth Schroeder, Jr.Assistant U.S. Attorney Elizabeth R. Moellering, who handled the case, stated that the defendant, a former employee of the United States Postal Service, delayed or failed to deliver mail matter entrusted to her for delivery. The defendant took at least 15 Victoria Secret coupons and used them for her own benefit.
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Postal Service, Office of the Inspector General, under the direction of Monica Weyler.
Former Fugitive Narcotics Trafficker Handed Hefty SentenceRead the Press Release
McALLEN, Texas – Jose Urbano Cortinas, 29, has been ordered to prison for nearly 23 years following his conviction of conspiring to possess with the intent to distribute cocaine, announced U.S. Attorney Kenneth Magidson. Cortinas, of Memphis, Tenn., entered a guilty plea to the charge Oct. 29, 2014.
Today, U.S. District Judge Randy Crane ordered Cortinas to serve a total of 262 months in federal prison to be immediately followed by a five-year-term of supervised release.
The investigation revealed that from 2008 through 2011, Cortinas and others conspired to transport large amounts of cocaine from the Rio Grande Valley to Georgia via tractor-trailers. During the investigation, law enforcement was able to seize several loads of cocaine, including 267 kilograms on May 15, 2009, and 330 kilograms on Jan. 29, 2010.
Cortinas was indicted in 2011, but fled to Arkansas. He was subsequently apprehended in July 2014.
The investigation leading to the charges was conducted by the Drug Enforcement Administration. Assistant U.S. Attorney James Sturgis prosecuted the case.
Former Federal Official Admits Self-Dealing Federal Grants to New Jersey UniversitiesRead the Press Release
TRENTON, N.J. – The former assistant division administrator of the Federal Highway Administration (FHWA), New Jersey Division, today admitted using a straw company to fraudulently obtain grant funds, U.S. Attorney Paul J. Fishman announced.
Lawrence F. Cullari Jr., 43, of Tinton Falls, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of mail fraud.
According to documents filed in this case and statements made in court:
The defendant was the assistant division administrator at the FHWA’s New Jersey Division from 2010 through July 2013 and was able to influence the allocation of U.S. Department of Transportation funding. He also operated a private consulting and engineering company called Dencore Consulting, which was owned by his ex-wife. His former father-in-law owned and operated “Company 1,” an engineering company located in Middletown, New Jersey, that provided mechanical, plumbing and electrical designs for commercial and residential projects.
Cullari admitted that in 2006, he and his father-in-law agreed to use Company 1 as a straw contractor to get FHWA-funded work for Dencore Consulting from Rutgers University’s Center for Advanced Infrastructure and Transportation (Rutgers CAIT) and the N.J. Institute of Technology (NJIT). From May 2006 through June 2013, Cullari prepared bids and work proposals for Company 1 to sign and submit to Rutgers CAIT and NJIT. When Rutgers CAIT or NJIT awarded the projects to Company 1, Cullari arranged for the completion of engineering reports and invoices that fraudulently stated that Company 1 completed the work. After Rutgers CAIT or NJIT paid Company 1, its owner kept a small portion of the payment and wrote a check to Dencore Consulting for the remaining balance.
The mail fraud charge to which Cullari pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 22, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Transportation, Office of the Inspector General, under the direction of Regional Special Agent in Charge Douglas Shoemaker, and the N.J. Department of Transportation, Office of the Inspector General, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
15-090
Defense counsel: Bradley L. Henry Esq., New York
Former Corrections Officer Sentenced to 27 Months in Prison for Taking Cash to Smuggle Contraband into FacilityRead the Press Release
WASHINGTON - Lenard Fleming, 34, a former corrections officer who worked for the Corrections Corporation of America (CCA), was sentenced today to 27 months in prison after earlier pleading guilty to a bribery charge for accepting money to smuggle contraband into the District of Columbia’s Correctional Treatment Facility.
The sentencing was announced by U.S. Attorney Ronald C. Machen Jr.; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas N. Faust, Director of the District of Columbia Department of Corrections.
Fleming, of District Heights, Md., pled guilty in November 2014 in the U.S. District Court for the District of Columbia to one count of bribery. He was sentenced by the Honorable Ketanji Brown Jackson. Upon completion of his prison term, Fleming will be placed on two years of supervised release.
According to the government’s evidence, Fleming had worked for the Corrections Corporation of America (CCA) as a corrections officer at the Correctional Treatment Facility. CCA, a private company, has a contract to provide services to the D.C. Jail.
During the investigation, the FBI recovered contraband from an inmate at the Correctional Treatment Facility in January 2014. Fleming admitted that he smuggled items for the same inmate through that inmate’s contacts outside of the Correctional Treatment Facility. Fleming received cash payments in exchange for smuggling cigarettes and, on one occasion, an iPhone, into the Correctional Treatment Facility for delivery to the inmate.
Fleming was terminated by CCA in February 2014 following a complaint that he was smuggling contraband into the facility for another inmate. CCA was presented with allegations that Fleming met several times with the wife of another inmate. On each occasion, the inmate’s wife provided Fleming cash in exchange for Fleming smuggling cigarettes and synthetic marijuana into the facility and delivering it to the inmate. Fleming was arrested April 30, 2014.
In a related investigation, another former corrections officer at the Correctional Treatment Facility, Darren Malry, 52, pled guilty in October 2014, to a bribery charge. According to the government’s evidence, on March 11, 2014, Malry smuggled contraband into the facility for an inmate. Malry was arrested that day. Malry is to be sentenced March 25, 2015.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Director Faust commended the work of those who jointly worked the case, including agents from the FBI’s Washington Field Office, investigators from the District of Columbia Department of Corrections Office of Investigative Services, and investigators from the Corrections Corporation of America. They also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo, Corinne Kleinman, and Angela Lawrence; Assistant U.S. Attorneys Melinda Williams, Todd Gee, and former Assistant U.S. Attorney Justin Dillon, who assisted in the investigation, and Assistant U.S. Attorneys Catherine K. Connelly, Allessandra Stewart, and Arvind Lal, who assisted with forfeiture issues. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Richard DiZinno, who prosecuted the case.
Former Champaign Business Owner Pleads Guilty to Filing False Income Tax ReturnsRead the Press Release
Urbana, Ill. – Sentencing is scheduled on May 8, 2015, for former business owner Michael S. Fogerson of Champaign, Ill. Yesterday, Fogerson pleaded guilty to two counts of filing a false tax return, as announced by Jim Lewis, U.S. Attorney for the Central District of Illinois. Fogerson remains on bond following his appearance yesterday before U.S. District Judge Harold A. Baker.
According to court documents, Fogerson, 51, was the owner, sole proprietor, and operator of The Smoke Shack in Champaign, Ill., and The Smoker’s Den in Decatur, Ill. During 2009, 2010, and 2011, The Smoke Shack sold tobacco-related products, as well as synthetic marijuana prior to its regulation by state and federal authorities. For tax years 2009 and 2010, Fogerson sold bulk quantities of synthetic marijuana to tobacco product stores similar to The Smoke Shack that operated outside of the Champaign and Decatur area. To lower his individual adjusted gross income, Fogerson failed to report the profits generated from these bulk sales to the Internal Revenue Service. Fogerson admitted he failed to report the profits.
As a result of the unreported receipts from his bulk sales of synthetic marijuana, Fogerson falsely claimed only $28,307 of taxable income on his 2009 Form 1040. In reality, Fogerson had taxable income of approximately $393,799. Thus, Fogerson had an additional income tax due and owing to the United States of America of approximately $128,720 for the 2009 tax year, which he did not pay. Fogerson falsely claimed only $54,522 of taxable income on his 2010 Form 1040. In reality, Fogerson had taxable income of approximately $968,579. Thus, Fogerson had an additional income tax due and owing to the United States of America of approximately $336,491, which he did not pay.
During the investigation, the Internal Revenue Service seized $835,421.89 from Fogerson that was alleged to have been deposited in amounts less than $10,000 to avoid having the bank report the deposits to the Internal Revenue Service. As part of his plea of guilty, Fogerson agreed that $465,211 of the seized currency would be used to pay his back taxes for 2009 and 2010 and that the remaining currency would be forfeited to the United States Treasury.The maximum statutory penalty for each count of filing a false tax return is three years in prison, and a fine of up to $100,000, plus the costs of prosecution.
The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller. The charges are the result of an investigation by Internal Revenue Service, Criminal Investigation Division.
Former CEO of Baltimore Behavioral Health Pleads Guilty to Failing to Transfer Payroll Taxes to the IRS and to Stealing from the Employee Pension PlanRead the Press Release
Baltimore, Maryland – The former Chief Executive Officer (CEO) of Baltimore Behavioral Health (BBH), William Kristen Hathaway, age 52, of Ellicott City, Maryland pleaded guilty today to failing to pay to the IRS more than $2.4 million in payroll taxes deducted from the paychecks of BBH employees, and to stealing more than $53,000 from the BBH employee benefit plan.
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 Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“As chief executive officer of a primary ‘charitable’ organization funded by the government to treat Baltimore drug addicts, William Kristen Hathaway paid lucrative salaries to his family members while cheating the IRS and the employee pension plan,” said U.S. Attorney Rod J. Rosenstein. “This case highlights the need for close oversight of organizations that receive public funds.”
“Hathaway abused his position of trust at Baltimore Behavioral Health,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Through manipulation and theft, Hathaway’s scheme left the American taxpayers and the employees of Baltimore Behavioral Health with the tab for his greed.”
“Mr. Hathaway’s fraudulent actions hurt the livelihood of BBH employees, and he should be held accountable,” stated Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. “My office remains committed to investigating these types of crimes, and we will continue to work diligently with our law enforcement partners to ferret out corrupt individuals.”
According to Hathaway’s plea agreement, he was the CEO for BBH, a tax-exempt organization that provided treatment to people with drug addictions and mental disorders. Hathaway exercised significant control over many aspects of BBH’s business affairs, including managing the company’s financial accounts and overseeing the employee payroll process, which included calculating the withholding of taxes and contributing to and maintaining employee benefit plans. The Board of Directors for BBH was primarily comprised of Hathaway’s relatives, including his wife, his sister, and his mother. Board members were paid a salary.
Hathaway admitted that from March 2009 through December 2011, he regularly deducted payroll taxes from all employees’ wages without forwarding the money to the IRS. For example in the second quarter of 2009, Hathaway caused $344,112.26 in federal payroll taxes to be withheld from employees’ wages, but he elected not to pay that amount over to the IRS. Hathaway admitted withholding a total of $2,495,779 in payroll taxes from March 2009 through December 2011, but instead of forwarding those funds to the IRS, he spent the money on company expenses. For example, during the same period, Hathaway authorized a total of $2,730,752 in salaries to BBH officers, including himself, and contractual payments to an entity owned and operated by his mother and stepfather.
Hathaway also served as a fiduciary for the employee pension plan and was responsible for transferring employee contributions to the retirement plan, as well as any matching company contributions to the custodian of assets for the BBH employee pension plan. Hathaway admitted that from September 2009 through April 2010, Hathaway diverted $53,530.07 in employee contributions to the BBH employee pension plan to pay company expenses, instead of transferring those funds to the custodian of assets.
Hathaway faces a maximum sentence of five years in prison for each of the two counts. U.S. District Judge Richard D. Bennett has scheduled sentencing for June 18, 2015 at 3:00 p.m.
United States Attorney Rod J. Rosenstein commended the IRS – CI and the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations for their work in the investigation and the Employee Benefits Security Administration for its assistance in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Martin J. Clarke, who is prosecuting the case.
Florida Man Sentenced to 10 Years in Prison for Firearms ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAIME JAUREGUI, age 36, of Orlando, Florida, was sentenced today after a federal jury found him guilty of conspiracy to violate the Gun Control and National Firearms Acts and possession of unregistered firearms.
U.S. District Judge Jay C. Zainey sentenced JAUREGUI to 120 months incarceration, followed by 3 years of supervised release.
According to previously filed court documents, in January 2012, agents of Homeland Security Investigations in New Orleans received information indicating that JAUREGUI was interested in acquiring items listed on the United States Munitions List and smuggling the weapons to end users in Mexico. On at least four occasions from January 2012 through March 21, 2013, JAUREGUI met with an undercover agent in St. Tammany Parish to negotiate the purchase of more than 100 fully automatic assault rifles, grenade launchers, grenades, and night vision goggles, all of which were destined for a Mexican drug trafficking cartel. JAUREGUI provided a cash deposit of approximately $46,000 during those meetings. JAIME JAUREGUI hired CARLOS CABRERA, FRANCISCO MALDONADO, and RUBEN JAUREGUI to assist him with transporting the weapons to the final destinations. None of the men have federal firearms or export licenses. Defendants CABRERA, MALDONADO, and RUBEN JAUREGUI previously pled guilty and have been sentenced.
U.S. Attorney Polite praised the work of Homeland Security Investigations (HSI) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), with assistance from the Defense Criminal Investigative Service (DCIS), the Louisiana State Police, and the St. Tammany Parish Sheriff’s Office for investigating this matter. Assistant U.S. Attorney Gregory M. Kennedy and Special Assistant U.S. Attorney Brian Ebarb are in charge of the prosecution.
Federal Jury Finds Mexican National Guilty of Conspiring to Transport Illegal AliensRead the Press Release
ALBUQUERQUE – A federal jury sitting in Las Cruces, N.M., found Juan De Dios Ramos-Ruiz, 50, a Mexican national residing in Socorro, N.M., guilty on an indictment charging him with conspiracy to transport illegal aliens. The guilty plea was announced by U.S. Attorney Damon P. Martinez and El Paso Sector Chief Border Agent Jeffrey D. Self of the U.S. Border Patrol.
Ramos-Ruiz was arrested on Nov. 18, 2014, on a criminal complaint charging him with conspiracy to transport illegal aliens. He subsequently was indicted on Jan. 14, 2015, and charged with the same crime. Trial against Ramos-Ruiz commenced on March 16, 2015, and concluded late this morning when the jury returned a guilty verdict on the sole count of the indictment.
The evidence at trial established that on July 17, 2014, Border Patrol agents executed a traffic stop of a car driven by a woman (the driver) in the vicinity of Hachita, N.M., in Luna County, N.M. As an agent approached the car, he observed two passengers in the back seat who were crouched down in an effort to conceal themselves. The agents arrested the three individuals after determining that the driver was a U.S. citizen and the two passengers were Mexican nationals illegally in the United States. The driver testified at trial that she was recruited by Ramos-Ruiz to transport the two illegal aliens from Socorro to Deming, N.M., on July 17, 2014, with the understanding that someone else would transport them from there to another destination. The driver described how Ramos-Ruiz drove ahead of her as a “look out” for the Border Patrol while she followed in her vehicle with the two illegal aliens. The driver also admitted that Ramos-Ruiz paid her $200.00 at the beginning of the drive and expected to be paid another $200.00 when she successfully delivered the two illegal aliens to Deming.
The two illegal aliens also testified and admitted paying $3,500.00 each to be smuggled into the United States. They testified that after being transported to the United States-Mexico border near El Paso, Texas, on July 15, 2014, they were picked up by Ramos-Ruiz who took them to a mobile home were they remained until July 17, 2014. In the early morning of July 17, 2014, the illegal aliens were picked up by the driver who instructed them to stay low in the vehicle to avoid detection by law enforcement.
The jury deliberated approximately 25 minutes before returning its guilty verdict.
Ramos-Ruiz has been in federal custody since his arrest and remains in federal custody pending his sentencing hearing which has yet to be scheduled. Ramos-Ruiz faces a statutory maximum penalty of ten years in prison and will be deported after completing his prison sentence.
This case was investigated by the Las Cruces Border Patrol Station of the U.S. Border Patrol and is being prosecuted by Assistant U.S. Attorneys Luis A. Martinez and E. Garreth Winstead, III.
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15-132
FCI Berlin Inmate Sentenced OnRead the Press Release
Federal Weapon Possession ChargeCONCORD, NEW HAMPSHIRE – Myron Armstrong, 38, an inmate at the Federal Correctional Institution in Berlin, New Hampshire, was sentenced on Monday in United States District Court for the District of New Hampshire to two years in prison for federal weapon possession charges, announced United States Attorney John P. Kacavas.
In early 2014, Armstrong created a weapon from a sock and a combination lock, which he subsequently used to assault a fellow inmate. During the ensuing altercation, a federal correctional officer also sustained injuries when he attempted to intervene. United States Attorney John P. Kacavas stated, “The federal prosecution of this defendant demonstrates our resolve to bring violent offenders to justice and our intolerance of such conduct in a federal correctional institution.”
This prosecution arose from an investigation by the Federal Correctional Institution in Berlin, New Hampshire, in collaboration with the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Nick Abramson.
Ephren Taylor Sentenced to Federal PrisonRead the Press Release
ATLANTA - Ephren Taylor II, and Wendy Connor have been sentenced in connection with the fraud scheme they perpetrated while officers at City Capital Corporation. The scheme victimized over 400 people who invested over $16 million.
“Taylor’s ‘Building Wealth’ tour accomplished exactly the opposite, victimizing hundreds of investors and leaving many of them financially ruined,” said Acting U.S. Attorney John Horn. “At churches across the country he touted himself as a socially conscious investor, but his investment opportunities were nothing but a Ponzi scheme designed to build his own personal wealth. This sentencing brings a measure of justice to those who remain devastated by his actions.”
“These defendants are habitual fraudsters and world-class manipulators,” stated Special Agent in Charge Veronica Hyman-Pillot, IRS Criminal Investigation. “Taylor and Connor knew that the investments they were touting were based entirely on deception and lies, which were driven by their insatiable greed. Today, Taylor and Connor have to face the choices they have made and live with the consequences.”
“This case demonstrates the wide-reaching effects of fraudulent investment schemes and their impact on innocent victims. The fact that Ephren Taylor took advantage of people during a time of reverence and trust is particularly heinous,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “Today’s sentence should serve as a reminder that criminals will not get away with taking advantage of unsuspecting victims without bearing the consequences.”According to Acting U.S. Attorney Horn, the charges and other information presented in court: Taylor, the CEO of City Capital Corporation, directed a nationwide Ponzi scheme. All told, he defrauded over 400 victims and convinced them to invest over $16 million. From at least April 2009, when Wendy Connor joined City Capital, through October 2010, 278 victims were defrauded of over $5.8 million.
As part of the scheme, Taylor traveled around the country on a “Building Wealth Tour,” where he gave wealth management seminars to church congregations and where he targeted the African American and Christian communities. During this tour, Taylor claimed to be a socially conscious investor and falsely claimed that 20% of profits were donated to charity. One of the churches on the “Building Wealth Tour” was the New Birth Missionary Baptist Church in Lithonia, Ga. While there, Taylor and Connor met potential investors to discuss possible investments. Over 80 individuals from Georgia lost more than $2 million because of Taylor’s scheme.
The investments pushed by Taylor and Connor included purchasing promissory notes, where the funds invested would be used to support small businesses, such as laundries, juice bars, and gas stations. Taylor and Connor falsely represented the revenues and returns for these businesses knowing that they were not profitable.
Taylor and Connor also pushed an investment in sweepstakes machines. Sweepstakes machines are computers loaded with various games that allow players to win cash prizes. City Capital published offering materials that falsely claimed the average sweepstakes machine would generate 300% investor returns. As part of the fraud scheme, Taylor and Connor also promised that the sweepstakes machine investments were 100% risk free.
Taylor and Connor knew that the investments he was touting were not profitable and that investors were not receiving actual returns from their investments.
As part of the scheme, Taylor and Connor encouraged investors to use self-directed IRAs to make their investments. Many victims transferred their retirement savings to trust companies that act as custodians for self-directed IRAs, expecting these funds to be used to fund the investments pushed by Taylor.
After victims funded their self-directed IRAs, Taylor and Connor directed the use of those funds. The money was not invested as promised, but rather was used to pay ongoing business expenses of City Capital, pay personal expenses for Taylor and Connor, and in some limited instances, to pay supposed returns to earlier investors.
In late 2010, the scheme collapsed and Taylor's victims lost virtually all of their investments.
Taylor, 32, of Overland Park, Kansas, was sentenced by United States District Judge William S. Duffey, Jr., to 19 years, seven months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $15,590,752.81. Wendy Connor, 46, of Raleigh, North Carolina, was also sentenced by Judge Duffey to five years in prison, to be followed by three years of supervised release, the first eighteen months of which are home confinement, and ordered to pay restitution in the amount of $5,818,299.13. Taylor was convicted on these charges on October 8, 2014, after he pleaded guilty to conspiracy to commit wire fraud. Connor was convicted on these charges on October 8, 2014, after she pleaded guilty to the interstate transportation of money taken by fraud.This case was investigated by the United States Secret Service and Internal Revenue Service Criminal Investigation with significant assistance from the United States Securities and Exchange Commission.
Assistant United States Attorney Christopher J. Huber prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
District Man Found Guilty of Sexually Assaulting Woman in Northwest Washington AlleyRead the Press Release
WASHINGTON – George Cocroft, 38, of Washington, D.C., was found guilty today of first-degree sexual abuse, with aggravating circumstances, for sexually assaulting a woman in an alley in Northwest Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Cocroft was found guilty in the Superior Court of the District of Columbia after a bench trial by the Honorable Robert E. Morin. Cocroft, a prior sex offender, will be sentenced on May 22, 2015. He faces up to life imprisonment without the possibility of release and will be required to register as a sex offender for the remainder of his life.
According to the government’s evidence, on Nov. 25, 2012, the victim, then 19, traveled alone by Metro into the District of Columbia. She has an intellectual disability and autism. At approximately 7 p.m., she went into a fast-food restaurant in the Chinatown neighborhood. Once inside, she encountered the defendant, a homeless man, who sat down with her and began complimenting her and holding her hand.
Cocroft and the victim left the restaurant together, at which time the defendant led the victim into a dark alley. The victim initially believed the defendant’s house was in the alley and that they were going to talk so that they could get to know each other better.
Once in the alley, Cocroft began groping the victim and telling her he had not had sex in a long time. The victim was scared and told the defendant that she did not want to have sex. She said that they should wait until they were older and married. The defendant did not stop, however. He led her to a more secluded part of the alley and had her lie face down on concrete barriers. Despite her continued protests, he sexually assaulted her. After the assault, the victim reported what had happened to her to a Metro station manager. The defendant was subsequently arrested pursuant to an arrest warrant.
In announcing the verdict, U.S. Attorney Machen praised the work performed by those who investigated the case from the Metropolitan Police Department’s Sexual Assault Unit. He also acknowledged the critical services provided to the victim at the District of Columbia Children’s Advocacy Center. In addition, he expressed appreciation for the work of those who handled the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughan; Paralegal Supervisor Jason Manuel; Paralegal Specialist Tierra Nanches; Information Technology Specialist Michael Richards; Victim/Witness Security Specialists David Foster and La June Thames; and former Assistant U.S. Attorney Heide Herrmann. Finally, he commended the work of Assistant U.S. Attorneys Amy Zubrensky and Jeff T. Cook, who investigated and prosecuted the matter.
Delano Couple Indicted in Unemployment Insurance SchemeRead the Press Release
FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced today the unsealing of a 10-count indictment following the arrest of Raul Oropeza Lopez, 47, and Ana Maria Oropeza, 41, both of Delano. The Oropezas are charged in the indictment with mail fraud and conspiracy to commit mail fraud in connection with a scheme to submit fraudulent claims for unemployment benefits.
According to court documents, Raul Oropeza Lopez obtained social security numbers, names, and other personal identifying information of U.S. citizens and legal residents and then used the information to provide undocumented workers with false identities so they could work in the United States as farm laborers. Then, when the workers were laid off at the end of the growing season, Oropeza and his wife allegedly filed fraudulent unemployment insurance claims in the names of the assumed identities, relying on the work performed by the undocumented workers to claim unemployment insurance benefits for the Oropezas’ benefit. Over a period of six years, Oropeza and his wife submitted more than 520 fraudulent unemployment insurance claims on behalf of over 70 individuals, collecting more than $1.8 million.
This case is the product of a joint investigation by the U.S. Department of Labor, Office of Inspector General; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Social Security Administration, Office of Inspector General; the Bureau of Alcohol, Tobacco, Firearms and Explosives; United States Postal Inspection Service; and the California Employment Development Department, Criminal Investigations Division. Assistant United States Attorney Mark J. McKeon is prosecuting the case.
Both defendants were released on bond. Their next court appearance is before Magistrate Judge Sheila K. Oberto on May 4, 2015.
If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count. 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.Crownpoint Man Pleads Guilty to Federal Sexual Abuse ChargesRead the Press Release
ALBUQUERQUE – Tomson Largo, 26, an enrolled member of the Navajo Nation who resides in Crownpoint, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to sexual abuse charges. Under the terms of his plea agreement, Largo will be sentenced to 90 months in federal prison followed by a lifetime of supervised release. He also will be required to register as a sex offender.
Largo was arrested on Oct. 29, 2014, on a three-count indictment charging him with attempted aggravated sexual abuse, aggravated sexual abuse, and abusive sexual contact. The indictment alleged that Largo committed the offenses on multiple occasions between July 2011 and March 2014, in McKinley County, N.M., within the Navajo Indian Reservation.
During today’s proceedings, Largo pled guilty to all three counts of the indictment. In entering his guilty plea, Largo admitted that between July 1, 2011 and Aug. 31, 2011, he attempted to sexually abuse the victim, an Indian woman, while she was sleeping with her two children. He further admitted that in Dec. 2011, he used force to sexually assault the victim, and in March 2014, he assaulted the victim by shoving his hands down her pants and touching her between the legs. Largo admitted committing each of the three crimes at a residence in Crownpoint.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and the Gallup office of the FBI, and is being prosecuted by Assistant U.S. Attorney Kristopher N. Houghton.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Convicted Fraudster Pleads Guilty in Federal Court to Failing to Surrender for Service of SentenceRead the Press Release
DALLAS — A Irving, Texas, man, who was sentenced to serve 70 months in federal prison in an investor fraud case, pleaded guilty this morning to the federal offense of failing to surrender to serve that sentence, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Michael David Carroll, 39, faces a maximum statutory penalty of 10 years in federal prison, to be served consecutively to the sentence imposed on his prior conviction. He also faces up to a $250,000 fine. Sentencing is set for June 29, 2015, before U.S. District Judge David C. Godbey. By law, any sentence Carroll receives for this new offense must be served consecutively to the 70 month sentence Carroll is already serving.
Carroll pleaded guilty in April 2013 to one count of wire fraud stemming from his role as a registered agent, director and incorporator of The Salad Bowl Franchise Corporation. Carroll ran a scheme to defraud potential investors, and to obtain money and property under false and fraudulent pretenses, by fraudulently inducing investors to purchase a “Salad Bowl” franchise from him.
On March 17, 2014, U.S. District David C. Godbey sentenced Carroll to 70 months in federal prison and ordered to pay more than $1.4 million in restitution. Judge Godbey ordered Carroll to report to federal prison before 11:00 a.m. on Monday, May 19, 2014, to begin serving that sentence.
On April 18, 2014, the Court granted a defense request to delay Carroll’s report date and set a new report date of July 15, 2014. Again, on July 14, 2014, the Court granted another defense request to delay Carroll’s report date and set a new report date of no later than 2:00 p.m. on Monday, September 15, 2014. However, Carroll disobeyed Judge Godbey’s court order when he willfully failed to surrender for service of sentence. On September 17, 2014, Judge Godbey ordered that an arrest warrant be issued for Carroll.
That same day, a special agent with the FBI informed Carroll that he was a fugitive with an outstanding arrest warrant. The agent instructed Carroll to immediately surrender to the FBI office in Dallas. Rather than surrender as ordered, Carroll advised the FBI agent that he would drive to the designated prison facility and surrender the next morning. On September 18, 2014, Carroll finally surrendered to the designated federal prison facility.
The FBI investigated the case and Assistant U.S. Attorney David L. Jarvis is prosecuting.
Clinton, Pa., Sex Offender Sentenced to 3 Years in Prison for Violating the Terms of His Supervised ReleaseRead the Press Release
PITTSBURGH - A resident of Clinton, Pa., had his term of supervised release revoked and was sentenced in federal court to three years imprisonment to be followed by a 15-year term of supervised release, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on Sherwood Stevenson, 76.
According to information presented to the court, Stevenson pretended to be the grandfather of a 12-year old boy during a field trip at the Carnegie Science Center. Stevenson offered candy to the boy and asked him if he wanted to go to the movies sometime. When it was learned that Stevenson was not the boy’s grandfather, the Pittsburgh Police were called. Stevenson provided a false name, date of birth and Social Security number to the Pittsburgh Police. Once detained, the Pittsburgh Police learned his true identity and discovered that he was a registered sex offender. In addition, Stevenson failed to update his Pennsylvania Megan’s Law registration as required when released from prison on Dec. 5, 2014. He also failed to report for mental health treatment on each occasion when it was scheduled in January and February, 2015.
Prior to imposing sentence, Judge Diamond stated that the protection of society was paramount in his decision to sentence Stevenson to the maximum statutory period of imprisonment of three years.
Assistant United States Attorney Stephen R. Kaufman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Stevenson.
Businessman Charged in Motion Picture Tax Credit ScamRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that GEORGE M. KOSTUCH, age 43, of Baton Rouge, Louisiana, has been charged in a Bill of Information with engaging in a wire fraud scheme to defraud the State of Louisiana’s Motion Picture Industry Development Tax Credit Program, in violation of Title 18, United States Code, Section 1343. If convicted, KOSTUCH faces a significant term of imprisonment, a term of supervised release following imprisonment, a fine, and forfeiture of the proceeds from his offense.
The Bill of Information alleges that KOSTUCH owned and operated K 2 Pictures, LLC, which provided technical services for the production of motion pictures. KOSTUCH allegedly caused the issuance and delivery of checks totaling approximately $539,500 for production expenditures that were, in fact, not incurred. According to the Bill of Information, these checks were later used as false documentation for motion picture productions and submitted to the Louisiana Economic Development Office (“LED”).
The Bill of Information alleges further that, between June 1, 2010 and March 24, 2011, the cancelled checks were used in the application and receipt of film tax credits from the LED. The tax credits issued by LED based upon the false expenditures allegedly totaled $161,850.
The LED is a state entity whose mission is to lead economic development for the State of Louisiana. LED operates the Tax Credit Program which is designed to entice production companies to shoot films and video productions in Louisiana. The Tax Credit Program provides a 30% tax credit on qualified expenditures for the production of films in Louisiana. Once issued by LED, the tax credits are fully transferable.
U.S. Attorney Green stated: “This most recent case illustrates our continued commitment to prosecute all abuses of the Tax Credit Program. As I have stated in the past, those who misuse this program, through fraud and deceit, undermine the purpose of the Tax Credit Program and will be investigated and prosecuted to the fullest extent of the law. We appreciate the work of the FBI and the Louisiana Inspector General’s Office in this case, as well as the cooperation of the LED.”
This investigation was conducted by the FBI and the Louisiana Inspector General’s Office and is being prosecuted by Assistant United States Attorneys Frederick A. Menner, Jr. and Paul L. Pugliese.
NOTE: A Bill of Information is an accusation by the United States. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Broward Resident Charged with Passing and Possessing Counterfeit MoneyRead the Press Release
A Pompano Beach, Florida, resident was charged by Information yesterday in Fort Lauderdale with possessing and passing counterfeit currency.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Paula A. Reid, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, and William R. Latchford, Chief, Seminole Police Department, made the announcement.
Bernardo Lecaros, 35, was arrested by the Seminole Police Department and the U.S. Secret Service on December 20, 2014, for passing counterfeit notes at the Seminole Classic Casino in Hollywood, Florida.
According to the documents filed with the court, on both December 10, 2014 and December 14, 2014, Lecaros passed $5,400 in counterfeit currency at the Seminole Classic Casino. Lecaros possessed an additional $37,800 in counterfeit currency. If convicted, Lecaros faces up to twenty years imprisonment, three years of supervised release, a $250,000 fine and restitution as to each count.
Mr. Ferrer commended the investigative efforts of USSS and the Seminole Police Department. The case is being prosecuted by Assistant U.S. Attorney Randy Katz.
An Information is only an accusation, and a defendant is presumed innocent unless and until proven guilty.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Brothers Sentenced to Prison Terms for Shooting and Robbing Man in Northeast WashingtonRead the Press Release
WASHINGTON – Michael Canarte, 23, and his brother, Aubrey Canarte, 30, both of Washington, D.C., have been sentenced to prison terms for robbing and shooting a man in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced today.
The brothers pled guilty in January 2015 to charges of assault with intent to kill and unlawful possession of a firearm. They were sentenced on March 13, 2015 by the Honorable Lynn Leibovitz. Michael Canarte was sentenced to 10 years in prison, and his brother was sentenced to seven years. Following their prison terms, Michael Canarte will be placed on five years of supervised release, and Aubrey Canarte on three years of supervised release.
According to the government’s evidence, the victim was a friend of a man who had been involved in an ongoing dispute with the Canarte brothers. However, the victim was not involved in the dispute. Nonetheless, on the night of Nov. 21, 2013, Aubrey Conarte approached the victim near an apartment building and alley off the 500 block of 60th Street NE and asked about the man. The victim stated that he did not know where the man could be located.
The victim decided to leave the area and began walking further into the alley. At that point, Michael Canarte emerged from the apartment building and began following the victim. He brandished a gun and ordered the victim to get to the ground. He then rifled through the victim’s pockets, taking his wallet and cellphone. The victim begged for his life. Michael Canarte fired six to 10 rounds, hitting the victim in the neck, leg, and torso.
Following the initial group of shots, someone remarked that the victim did not appear “dead yet.” Immediately following the statement, Aubrey Conarte snatched the gun from his brother, walked over to the victim, stood directly above him, and fired two more shots. After the victim saw dirt kick up next to his face, he stopped moving and pretended to be dead, hoping that the brothers would stop shooting at him.
When police and emergency medical personnel arrived on the scene, they discovered the victim and rushed him to Washington Hospital Center. Though he survives, he suffers paralysis and lost the ability to walk.
In announcing the sentencings, U.S. Attorney Machen commended the work of those who investigated the case for the Metropolitan Police Department, including detectives from the Sixth Police District. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Stephanie Gilbert and Antoinette Sakamsa, Victim/Witness Advocate Jennifer Clark, and Assistant U.S. Attorney Robert E. Eckert, Jr., who investigated and prosecuted the matter.
Blackfoot Man Pleads Guilty to Assaulting a Federal OfficerRead the Press Release
POCATELLO – Dude Galloway, 34, of Blackfoot, Idaho, pleaded guilty today in United States District Court to assaulting a federal officer, U.S. Attorney Wendy J. Olson announced. He was indicted by a federal grand jury on May 28, 2014.
According to the plea agreement, on March 18, 2014, Galloway was arrested by the Fort Hall Police Department on an active arrest warrant and was transported by Fort Hall police officers to the Fort Hall Correctional Center. While at the jail, corrections officers attempted to get the defendant to change into jail-issued clothing. While doing so, the defendant struck a Fort Hall Corrections officer in the face with his hands. The federal assault on an officer law deems Fort Hall corrections and police officers to be federal officers.
Assault on a federal officer is punishable by up to eight years in prison, supervised release of up to three years, and a fine of up to $250.000.
Galloway is scheduled to be sentenced on June 15, 2015, before U.S. District Judge Edward J. Lodge at the federal courthouse in Pocatello.
The case was investigated by the Fort Hall Police Department.
Arthur Gerald Reid Sentenced for Sex Trafficking of ChildrenRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced today that Arthur Gerald Reid, 28, of Macon, Georgia, was sentenced on March 17, 2015 to serve 30 years (360 months) in federal prison for sex trafficking of children. The sentence was handed down by the Honorable Hugh Lawson, Senior United States District Court Judge, in Macon, Georgia.
Mr. Reid entered a plea of guilty to the charges on December 23, 2013. As a part of his plea agreement, the defendant admitted that beginning in September, 2011, and continuing until February, 2013, he prostituted a juvenile victim from various motel rooms in Macon, Georgia, and in Tybee Island, Georgia, through the utilization of backpage.com, an erotic services website. Mr. Reid was physically violent toward the juvenile victim. At the time Mr. Reid was encountered by law enforcement on February 26, 2013 at a Macon, Georgia, motel, he was in custody and control of the juvenile victim. Two additional juvenile victims were also with Mr. Reid at the time of the encounter with law enforcement. Mr. Reid admitted to prostituting these juveniles through the utilization of backpage.com as well. Hidden within the motel room was a BB gun, which the juveniles believed to be an authentic firearm.
“Mr. Reid was willing to sell the childhood of these young victims for a few dollars, profiting on the perversions of the “johns” who responded to his internet ads and the vulnerabilities of these children. His lengthy prison sentence means that he will not be a threat to other children in Middle Georgia for the majority of his life. I want to commend the hard work of the FBI, the GBI, and the Bibb County Sheriff’s Office for investigating this case and working with us to protect the children of Middle Georgia,” said United States Attorney Michael J. Moore.
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This defendant, by using intimidation and violence to prey on and exploit juveniles in this manner, truly deserves his time behind bars. The FBI will continue to dedicate significant investigative resources and assets toward the protection of our nation’s children from those individuals who would do them so much harm.”
“Child sex trafficking cases are a priority for the GBI. We will continue to work with local and federal law enforcement partners to bring individuals such as Reid to justice. People who prey on and exploit children deserve to be punished to the fullest extent of the law,” said Vernon Keenan, Director of the Georgia Bureau of Investigation.
The case was investigated by the Federal Bureau of Investigation, the Georgia Bureau of Investigation, and the Bibb County Sheriff’s Office. Assistant United States Attorney Julia C. Bowen represented the Government in the prosecution of the case.
Inquiries regarding this case should be directed to Pamela Lightsey, United States Attorney’s Office, at (478) 621-2603.
American Citizen Pleads Guilty to Bribery of a Public Official and Conspiracy ChargesRead the Press Release
WASHINGTON – Binh Vo, 41, an American citizen living in Vietnam, pled guilty today to charges of conspiracy to commit bribery and visa fraud; bribery of a public official; and conspiracy to commit money laundering, announced U.S. Attorney Ronald C. Machen Jr. and Bill A. Miller, Director of the U.S. Department of State’s Diplomatic Security Service (DSS).
Vo entered the plea in the U.S. District Court for the District of Columbia, where a criminal information was pending against him. The plea agreement, which is contingent upon the Court’s approval, calls for a prison sentence between six and eight years, as well as forfeiture of nearly $5.1 million. The Honorable Emmet G. Sullivan scheduled sentencing for June 12, 2015.
Vo was arrested on Sept. 24, 2013, at Washington Dulles International Airport and has been held without bond ever since.
According to the statement of facts in support of his guilty plea, Vo conspired with co-defendant Michael Sestak and others to obtain visas to the United States for Vietnamese citizens. Sestak, 43, was the Non-Immigrant Visa Chief in the Consular Section of the U.S. Consulate in Ho Chi Minh City, Vietnam from August 2010 to September 2012.
According to the statement of facts, Vo and Sestak conspired with other U.S. citizens and Vietnamese citizens to advertise the scheme and recruit customers. Co-conspirators reached out to people in Vietnam and the United States and advertised the scheme by creating a website and by spreading the word through emails and telephone calls. The conspirators told potential customers that once the customer obtained a visa from the scheme, they could disappear, get married or return to Vietnam and be assured of receiving visas in the future.
According to the statement of facts, Vo and his co-conspirators received biographical information and photographs from customers and assisted them with their visa applications. Upon submitting an application, the applicants would receive an appointment at the Consulate, be interviewed by Sestak, and approved for a visa. Applicants or their families generally paid between $30,000 and $60,000 per visa. Nearly 500 fraudulent visas were issued as a result of the conspiracy.
Applicants paid for their visas in Vietnam, or by routing money to co-conspirators in the United States. Vo admitted to receiving millions of dollars for arranging for Sestak to approve the visas. He ultimately moved some of the money out of Vietnam by using money launderers to move funds through off-shore banks. Co-conspirators also had money laundered through off-shore banks to bank accounts in the United States.
In addition to Sestak, two others have pled guilty to participating in the scheme. They are Hong Vo, 29, an American citizen, and Truc Thanh Huynh, 31, a Vietnamese citizen, all of whom are charged with conspiring with Sestak and Binh Vo. Hong Vo is Binh Vo’s sister, and Truc Thanh Huynh is Bin Vo’s cousin.
According to the statement of facts, fraudulent visas granted by Sestak were connected to an Internet Protocol (“IP”) address controlled by Hong Vo. Huynh allegedly participated in the visa scheme by obtaining documents necessary for the visa applications, collecting money and providing model questions and answers for visa applicants. Sestak also allegedly approved a visa for Huynh to the United States, the application for which was submitted by the IP address controlled by Hong Vo.
The case was investigated and prosecuted by the U.S. Department of State Diplomatic Security Service and Assistant U.S. Attorneys Brenda J. Johnson, Alessio D. Evangelista of the National Security Section, Catherine K. Connelly and Jennifer Ambuehl of the Asset Forfeiture and Money Laundering Section, as well former Assistant United States Attorneys Christopher Kavanaugh, and Mona N. Sahaf.
Alien Sentenced for Misuse of Social Security NumberRead the Press Release
A Mexican citizen who used another person’s social security number was sentenced yesterday to serve 120 days’ incarceration.
Roberto Ambrosio-Salvador, age 43, from Michoacan, Mexico, received the prison term after a January 8, 2015, guilty plea to misuse of a social security account number.
Information presented to the court showed Ambrosio-Salvador used a fraudulent permanent resident alien card, and a social security number issued to a person who is now deceased, for the purpose of obtaining employment in Waterloo, Iowa.
Ambrosio-Salvador was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Ambrosio-Salvador was sentenced to 120 days’ imprisonment, to be followed by a 3-year term of supervised release.
In sentencing Ambrosio-Salvador, Judge Reade noted his two prior criminal convictions for driving while intoxicated.
Ambrosio-Salvador was given credit for time served in custody and ordered released to the Department of Homeland Security detainer for processing and removal from the United States.
The case was prosecuted by Assistant United States Attorney Richard L. Murphy and investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-2048.
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Albuquerque Man Sentenced to Seven Years for Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Jerry Ernest Lopez, 33, of Albuquerque, N.M., was sentenced today in federal court to 84 months in federal prison for his methamphetamine trafficking conviction. He will be on supervised release for four years after he completes his prison sentence.
Lopez is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Lopez was arrested in May 2014, on a criminal complaint alleging that he unlawfully possessed methamphetamine, firearms and ammunition on May 27, 2014, in Bernalillo County, N.M. According to the criminal complaint, officers of the Albuquerque Police Department apprehended Lopez at his residence following the execution of a felony warrant on his residence. The complaint alleges that detective located approximately three ounces of methamphetamine, dozens of prescription pills, more than $10,000.00 in cash, five firearms and significant amounts of ammunition inside safes that were located inside Lopez’s bedroom. At the time, Lopez was prohibited from possessing firearms or ammunition because he previously had been convicted of three counts of possession of a controlled substance and forgery in the 2nd Judicial District Court for the State of New Mexico.
Lopez was indicted on June 24, 2014, in a three-count indictment, charging him with being a felon in possession of firearms and ammunition, possession with intent to distribute methamphetamine, and possession of firearms in furtherance of a drug trafficking crime. On Nov. 5, 2014, Lopez pled guilty to one count of possession with intent to distribute. In entering his guilty plea, Lopez admitted that on May 27, 2014, he possessed more than 50 grams of methamphetamine that was seized by law enforcement from his home in northeast Albuquerque along with $10,335.00 in cash during the execution of a search warrant. Lopez further admitted to being a drug dealer.
This case was investigated by the Albuquerque offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the DEA, and the Albuquerque Police Department with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorney David M. Walsh prosecuted the case.
Additional Sentences Handed Down in East Texas Mortgage Fraud ConspiracyRead the Press Release
PLANO, Texas – Five additional defendants have been sentenced for their roles in a mortgage fraud conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales today. Sentencing hearings were held before U.S. District Judge Marcia Crone.
Djuana Pitts, 46, of DeSoto, Texas, pleaded guilty on Aug. 7, 2013, and was sentenced to 70 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $5,688,047.92.
Patricia Hines, 51, of Cedar Hill, Texas, pleaded guilty on Aug. 8, 2013, and was sentenced to 52 months in federal prison on Mar. 16, 2015, and ordered to pay restitution in the amount of $1,562,070.50.
Elliott Scott, 40, of Houston, Texas, pleaded guilty on Sep. 23, 2014, and was sentenced to 46 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $2,141,357.77.
Allen Kent Barnett, II, 39, of Rockwall, Texas, pleaded guilty on Feb. 18, 2014, and was sentenced to 31 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $3,156,943.31.
Jennifer Gipson, 49, of DeSoto, Texas, pleaded guilty on Oct. 28, 2013, and was sentenced to 12 months and a day in federal prison on Mar. 13, 2015.
Pitts pleaded guilty to conspiracy to commit money laundering. Scott, Barnett and Hines pleaded guilty to conspiracy to commit wire fraud. Gipson pleaded guilty to misprision of a felony.
According to information presented in court, from July 2006 to March 2008, in the Eastern District of Texas and elsewhere, these individuals along with other co-conspirators previously sentenced, were involved in a widespread mortgage fraud conspiracy.
Scott, as an appraiser, and Barnett, as an appraiser trainee, both played roles in the conspiracy to inflate values of properties and to conceal material information from the lending institution in order to induce the company to fund mortgage loans. In addition, Scott and Barnett caused the appraisals to falsely reflect that a co-conspirator or her companies were the public record owners of the properties so as not to alert the lending institutions that they were funding flip transactions.
Pitts, Hines and Gipson all worked at Esquire Title, LLC, a title company. Pitts was an operations manager and Hines and Gipson were assistant escrow officers. Gipson worked under the supervision of Pitts. Pitts and Hines facilitated loan closings. Pitts and Hines’ roles in the conspiracy were to conceal information from the lending institutions in order to induce the lending institution to fund mortgage loans. Pitts also knowingly allowed false title commitments to conceal the true record owner of the properties and false gift letters to be submitted to lending institutions. Pitts and Hines both caused false HUD-1s to be submitted to the lending institutions that indicated the borrowers were the source of the down payments when they both knew that third parties – sometimes even the sellers in the transaction – were the source of the down payments. Hines caused false occupancy affidavits to be submitted to lending institutions, which concealed that the same borrower had purchased multiple properties and indicated on all transactions that the borrower intended to occupy each property as his primary residence. Hines also caused false title commitments to be submitted to the lending institutions that concealed the fact that the property had recently been sold and was a flip transaction. Pitts authorized Hines’ distribution of the criminal proceeds of the underlying wire fraud scheme to other conspirators which distributions typically exceeded $10,000. Gipson knew of the conspiracy between these individuals to defraud lending institutions and she provided a misleading statement to federal agents from IRS Criminal Investigation and FBI when questioned about the conspiracy.
This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case was investigated by Federal Bureau of Investigation and IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Andy Williams and Chris Eason.
13 Indicted in Wellsville Meth RoundupRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned three separate indictments charging 13 defendants with conspiracy to manufacture, possess with intent to distribute and to distribute, methamphetamine. The charge carries a minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.Charged in the indictments are:
• Michael E. Hasert, 60, of Scio, NY;
• Lionel C. Carter, 58, of Wellsville, NY;
• Todd E. Varney, 31, of Wellsville, NY;
• Bradley J. Hollenbeck, 34, of Andover, NY;
• Patrick J. Danielewicz, 34, of Friendship, NY;
• Sarah J. Greene, 37, of Wellsville, NY;
• Elizabeth J. Schreiber, 35, of Scio, NY;
• Michael C. Mullen, 34, of Hornell, NY;
• Timothy J. Billings, 30, of Wellsville, NY;
• Justin L. Billings, 32, of Wellsville, NY;
• Jordan R. Doane, 26, of Friendship, NY;
• Zackery D. Billings, 25, of Springwater, NY;
• Derek Fagan, 30, of Wellsville, NY
In addition, defendant Michael Hasert is charged with possession of marijuana with intent to distribute, maintaining a drug involved premises, possession of firearms in furtherance of drug trafficking and being a felon in possession of firearms. The charges carry a penalty of 20 years in prison and a mandatory five years to be served consecutively to any sentence imposed.
Defendants Timothy and Justin Billings are also facing charges of maintaining a drug involved premises and possession of firearms in furtherance of drug trafficking. These charges also carry a penalty of 20 years in prison and a mandatory five years to be served consecutively to any sentence imposed.
“Over the last several years, we have seen an increase in the number of cases involving this highly toxic and dangerous substance,” said U.S. Attorney Hochul. “The public needs to be educated that ingestion of crystal meth causes profound and almost immediate physical, mental and emotional consequences, while the production process can also be deadly.”
Assistant U.S. Attorney Thomas S. Duszkiewicz, who is handling the case, stated that between January 2011 and late 2014, the defendants conspired to manufacture and distribute methamphetamine. The defendants engaged in the practice of “smurfing” (buying small quantities) at local pharmacies to get around restrictions on purchasing products containing pseudo ephedrine. This is the most important chemical necessary in the process of manufacturing methamphetamine.
The indictments are the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Lieutenant Kevin Reyes and Major David Krause, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Division, the Southern Tier Regional Drug Task Force, under the direction of Cattaraugus County Sheriff Timothy Whitcomb, the Wellsville Police Department, under the direction of Chief Timothy O’Grady, U.S. Border Patrol, under the direction of Patrol Agent in Charge Steven Oldman, and the New York State Department of Environmental Conservation, under the direction of Captain Frank Lauricella.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Monday 16 March 2015
Upper Marlboro CPA Pleads Guilty in Local Corruption SchemeRead the Press Release
Greenbelt, Maryland – George Joseph Grillo, age 64, of Upper Marlboro, Maryland pleaded guilty today to wire fraud and money laundering conspiracy arising from a scheme to make it appear that a minority business enterprise (MBE) performed work on Washington Suburban Sanitary Commission (WSSC) contracts, when in fact, the MBE had not performed the work.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to the plea agreement, in 2009 and 2010 a non-minority-owned water tank painting company (Company 1) obtained three contracts with the WSSC to paint and repair water tanks or equipment: the Falls Road standpipe contract, the Carole Highlands tank contract and the Hampshire Green contract. The combined value of the three contracts was $2,390,177. Each contract required Company 1 to subcontract 28% or 29% of the contract’s value to certified MBEs or small local business enterprises. The required percentage of the contract, which in this case totaled $679,965.20, was to be paid directly to the MBE.
According to his plea agreement, Grillo was a certified public accountant and from 2002 through 2014 was the chief financial officer of a minority business enterprise that operates as a construction company, and a recycling company. Since the 1980’s Grillo had performed accounting work for the owner of Company 1, including preparation of tax returns, payroll for the company, and financial statements.
Grillo admits that from 2010 to 2014, he conspired with others to make it appear that Company 1 met its minority subcontracting requirements on the WSSC contracts.
For example, the owner of Company 1 directed Grillo to send invoices from his minority-owned company indicating that the company had provided materials on two contracts. Grillo created invoices indicating that his company had provided $78,000 worth of materials on the Falls Road contract and $30,000 worth of materials on the Carole Highlands contract. As directed by the owner of Company 1, these invoices were submitted to another minority subcontractor working with Company 1. In fact, neither Grillo’s company, nor the other minority-owned subcontractor had purchased any materials related to these invoices. To make the fake invoices appear authentic, on June 30, 2011, a check was issued to Grillo’s company for $108,000. On July 5, 2011, Grillo issued a check from his company to Company 1 for $106,920.
In 2010, Grillo agreed that his company would serve as the MBE for Company 1 on the Hampshire Green contract. In 2011, although Grillo’s company had not performed any work on the contract, Grillo caused his company to submit an invoice to WSSC for 28% of the Hampshire Green contract, or $57,504.88, to conceal the fact that Company 1 had not met its contractual obligation to subcontract 28% to an MBE. Again, to make it appear that Grillo’s company had performed the work, Company 1 issued a check for $57,504.88 to Grillo’s company, and a short time later, Grillo’s company issued a check back to Company 1 for $58,291.81.
The conspiracy involved between $1 million and $2.5 million of laundered funds.
Grillo faces a maximum sentence of 20 years in prison. U.S. District Judge George J. Hazel has scheduled sentencing for June 29, 2015 at 10:00 a.m.
United States Attorney Rod J. Rosenstein commended the FBI and IRS-CI for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney James I. Pearce and Assistant U.S. Attorney Mara Zusman Greenberg, who are prosecuting the case.
United States' Investigation of Oregon's Mental Health SystemRead the Press Release
On goingFor more information please see the attached documents linked below.
State and Feds Reach Accord on Mental Health Plan - March 3rd 2012
U.S. Attorney's Office and Civil Rights Division Sign Agreement Move Forward on State-Wide Community Mental Health Reform - November 9th 2012
Letter to John Dunbar - April 9th 2013
Oregon Mental Health Cover Letter for the Interim Report - January 2nd 2014
Oregon Mental Health Attachment to State Interim Report - January 2nd 2014
Oregonian Article - January 23rd 2014
Oregon’s Status Resolving the U.S. Department of Justice’s Investigation into Oregon’s Mental Healthcare System - March 11th 2015
United States Attorney Ronald C. Machen Jr. to Step Down Vincent H. Cohen Jr. to Become Acting U.S. AttorneyRead the Press Release
WASHINGTON –Ronald C. Machen Jr. announced today that he is resigning as United States Attorney for the District of Columbia, effective April 1, 2015, ending more than five years of leading the nation’s largest U.S. Attorney’s Office.
U.S. Attorney Machen, 45, said he intends to return to private practice. Principal Assistant U.S. Attorney Vincent H. Cohen, Jr., 44, a native Washingtonian, will become Acting U.S. Attorney when Mr. Machen leaves office.
“During more than five years as United States Attorney for the District of Columbia, Ron Machen has distinguished himself as a skilled leader, a devoted public servant, and a forceful champion of justice on behalf of the American people,” said Attorney General Eric Holder. “Throughout his remarkable tenure, Ron has applied his boundless talent and consummate judgment to protect the safety and security of all Americans in cases involving violent crime, national security threats, and public corruption. As one of Ron’s predecessors as U.S. Attorney in Washington, I know firsthand the unique demands of leading the nation’s largest U.S. Attorney’s Office. But Ron has never been deterred by a difficult challenge, nor slowed in his pursuit of a safer, stronger Washington. I was fortunate to be able to hire Ron as an Assistant U.S. Attorney in the Office in 1997, and I see in him now the exceptional qualities that I saw in him then: unassailable integrity, relentless determination, and a passion for law and justice. I congratulate him on the outstanding results he has achieved as U.S. Attorney for the District of Columbia. I thank him for his inspiring service. And I look forward to all that he will accomplish in the next stage of his already extraordinary career.”
“After more than five years as United States Attorney, it is time for me to step down,” said U.S. Attorney Machen. “Serving as the U.S. Attorney for the District of Columbia has been the highest honor of my professional career. I am tremendously grateful to the President, Attorney General Holder, and Congresswoman Eleanor Holmes Norton for placing their trust in me. The men and women of this office are among the most dedicated and talented public servants in the country. I am proud of the work we have done together to achieve justice in the courthouse and to build bonds of trust with the community that we serve. I leave this position confident that my extraordinary colleagues will continue to pursue justice and protect the residents of the District and this great nation.”
After nomination by President Obama and unanimous Senate confirmation, Mr. Machen was sworn in as U.S. Attorney for the District of Columbia on Feb. 18, 2010. With more than 300 attorneys, the U.S. Attorney’s Office for the District of Columbia is the largest U.S. Attorney’s office in the country, and is unique in that it prosecutes local offenses as well as federal crimes.Mr. Machen first joined the U.S. Attorney’s Office for the District of Columbia in January 1997. He was hired by Mr. Holder, who was then the U.S. Attorney. Mr. Machen worked as an Assistant U.S. Attorney for the office for almost five years. In 2001, he entered private practice, where he handled white-collar criminal defense, corporate internal investigations, and civil litigation until 2010, when he became the 56th U.S. Attorney in the history of the District of Columbia. Upon resignation, he will be the longest-serving U.S. Attorney for the District of Columbia in over 35 years.
During Mr. Machen’s time as U.S. Attorney, the office secured convictions of terrorists and spies who threatened national security; prosecuted corrupt public officials; successfully convicted scores of violent offenders; and secured over $2 billion in financial recoveries for American taxpayers. Mr. Machen also championed a host of initiatives, including community outreach and youth engagement; a Cold Case Unit, to investigate and prosecute older homicide cases; a Conviction Integrity Unit, to investigate claims of actual innocence; and a Cyber Unit to prosecute high-tech crimes that threaten national security, intellectual property, and personal privacy.
National Security. Over the last five years, the office has secured convictions against dozens of defendants who harmed Americans and American interests, including 13 convictions in terrorism-related cases. The office has repeatedly been called on to handle some of the Justice Department’s most sensitive and significant cases, including the current prosecution of Ahmed Abu Khatallah for his alleged participation in the 2012 attack on U.S. facilities in Benghazi, Libya, which resulted in the deaths of four Americans.
During Mr. Machen’s tenure, the office successfully prosecuted a State Department official who carried out a 30-year conspiracy to provide secrets to Cuba, as well as a government scientist who tried to sell classified information to a purported Israeli intelligence officer. The office also secured guilty pleas from four members of a Mexican drug cartel that murdered a U.S. agent in 2011. In December 2012, the office successfully prosecuted a Chinese-owned nuclear construction company, marking the first time that a People’s Republic of China corporate entity had pled guilty in a U.S. criminal export matter. In October 2014, the office obtained guilty verdicts against four former Blackwater security guards involved in the mass killing of Iraqi civilians in Baghdad’s Nisur Square.
Following a special assignment from the Attorney General, Mr. Machen also led the investigation of the illegal disclosure of classified information relating to a terrorist plot by Al-Qaeda in the Arabian Peninsula to conduct a suicide attack on a U.S.-bound airliner. That investigation led to the successful prosecution of a former FBI analyst who received the longest prison sentence ever in a leak case in a federal court.
Public Corruption. U.S. Attorney Machen placed a high priority on investigating cases involving public corruption in both the federal and District of Columbia governments. Since 2010, the office has obtained trial convictions or guilty pleas from more than 160 defendants, making it a national leader.
During Mr. Machen’s tenure, the office secured felony guilty pleas from three sitting members of the District of Columbia Council – Harry L. Thomas Jr., Kwame Brown, and Michael A. Brown – in addition to Ted G. Loza, the Chief of Staff to a fourth member of the Council. Loza and Michael Brown were each convicted for taking cash payments from individuals seeking favorable treatment from the D.C. government. Thomas was convicted for stealing $350,000 in taxpayers’ money. Kwame Brown was convicted of bank fraud and became the first public official in D.C. history to plead guilty to a criminal campaign finance violation. Mr. Machen also led the ongoing investigation into a criminal conspiracy in the 2010 D.C. mayoral election. To date, that investigation has resulted in the felony convictions of six people associated with a 2010 mayoral campaign.
Mr. Machen also focused on corruption in the federal government. During his tenure, the office obtained convictions of 20 individuals and one company as part of an investigation into the largest domestic bribery and bid-rigging scheme in the history of federal contracting. That investigation led to the convictions of numerous corrupt public officials, executives of government contractors, and others who conspired to cheat taxpayers. The office also obtained the conviction of former Congressman Jesse L. Jackson, Jr. for conspiring to defraud his campaigns of almost $750,000 in funds that were used to pay for personal items and expenses. In addition, the office secured the conviction of former Congressman Trey Radel for cocaine possession.
Violent Crime. Over the past five years, working with the Metropolitan Police Department and other law enforcement agencies, the office has obtained convictions of over 375 murderers. The total includes five men who were found guilty by a jury of murder, conspiracy, and other charges stemming from a series of violent crimes that culminated on the night of March 30, 2010 with a deadly mass shooting on South Capitol Street. Targeting the area’s most violent offenders and networks of drug distributors, the office has obtained convictions of more than 75 members of over a dozen gangs and crews, including MS-13.
Under U.S. Attorney Machen’s leadership, the office launched a Cold Case Unit, comprised of a team of veteran prosecutors that works to investigate and prosecute older murder cases. Over the past several years, more than 20 people have been convicted in these older homicide cases, dating to the 1980s and 1990s. To assist with these and other cases, Mr. Machen appointed the office’s first Special Counsel for DNA and Forensic Litigation. In that role, an experienced prosecutor works full-time on forensic issues to ensure that the office makes use of all available technologies to solve murders and other crimes.
The office also has earned national recognition for its work with the FBI, MPD and other agencies in targeting cases involving child sex offenses and exploitation. Over 80 defendants have been convicted of such crimes over the past five years, including Eric Justin Toth, a former private school teacher and camp counselor, who was apprehended in Nicaragua in 2013 and is now serving 25 years in prison on child pornography and other charges.
Financial Recoveries. Under Mr. Machen’s leadership, the office has sharpened its focus on financial recoveries, generating nearly $2.5 billion for the federal government over the last five years through civil and criminal collections and asset forfeiture. For example, the office has obtained more than $1.5 billion in recoveries from European banks – including ABN Amro Bank, ING Bank N.V., Standard Chartered Bank, and Commerzbank AG – that have admitted moving money illegally through the U.S. financial system on behalf of sanctioned countries and entities. Reflecting the importance he places on this mission, Mr. Machen established an Asset Forfeiture and Money Laundering Section in 2010 within the office’s Criminal Division. Similarly, as the District of Columbia has seen a growing number of qui tam lawsuits filed under the False Claims Act, Mr. Machen doubled the number of civil attorneys dedicated to filing affirmative cases on behalf of the United States to recover from those who defraud the American taxpayer. Among other successes, those civil litigators obtained a $93 million settlement with a telecommunications company that overcharged the government. Many of the cases pursued during Mr. Machen’s tenure focused on fraud on federal health care programs, including the arrests of more than 20 individuals in the largest health care fraud takedown in the history of the District of Columbia and a $34 million civil and criminal settlement with an international pharmaceutical company for off-label marketing of one of its drugs.
Community Outreach. Within the community, U.S. Attorney Machen led an expansion of the office’s outreach efforts, sponsoring youth summits, neighborhood town halls, a clergy ambassador program, domestic and senior abuse seminars, and other events designed to build bonds of trust between citizens and law enforcement. The office has been hailed as a national leader for its robust and sustained efforts to engage at-risk youth, address the root causes of crime, and enlist faith and community leaders as allies in responding to public safety challenges. Mr. Machen also focused extensive resources on re-entry programs for returning offenders, seeking to connect them with housing, employment, and other services in order to reduce recidivism and allow them to begin contributing to the community.
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United States Attorney Joined by 17 Federal, State and Local Law EnforcementRead the Press Release
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian was joined today by seventeen other federal, state and local law enforcement agencies to announce the initiation of the LEADership – Legal Education And Decision-making – Project in the enlarged City School District of Troy.
"The LEADership Project is a crime prevention program designed to reach the youngest members of our communities – all 5
th grade students in the Enlarged City of Troy School District – and to teach them Legal Education And Decision-making skills, skills which will help them to avoid gangs, drugs and violence and lead productive, law abiding lives.," said U.S. Attorney Hartunian. "With the LEADership Project we hope to accomplish two goals: first, to increase the awareness of our youth, specifically Troy’s 5th graders, about the dangers that gangs present to them and their communities, by discussing the myths of gang life, and letting them hear from a former gang member that gang life really amounts to ‘no life’. The second thing we hope to accomplish, in furtherance of Attorney General Eric Holder’s Smart on Crime initiative, is to build greater trust between Troy’s community members and the law enforcement officials who put their lives on the line every day to preserve public safety."
Joining the U.S. Attorney in today’s announcement were the heads of the following agencies, all participating in the project:
• United States Attorney’s Office
• Bureau of Alcohol, Tobacco, Firearms and Explosives
• Federal Bureau of Investigation
• Internal Revenue Service-Criminal Investigations
• Transportation Security Administration
• United States Coastal Guard- Sector New York
• United States Immigration and Customs Enforcement- Homeland Security Investigations
• United States Marshals Service
• United States Postal Inspection Service
• United Sates Postal Service Office of the Inspector General
• United States Probation and Pretrial Services
• New York State Department of Corrections and Community Supervision
Twenty-Four Years in Federal Prison for Forestville Man Convicted for Cocaine Distribution and Illegal Possession of FirearmsRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced David Dwayne Rudolph, age 33, of Capitol Heights, Maryland today to 24 years in prison, followed by five years of supervised release, for possession with intent to distribute crack and powder cocaine and marijuana; and for being a felon in possession of a firearm. Judge Chuang also ordered that Rudolph forfeit four firearms and $9,432 in cash seized during the investigation, as well as a 2005 GMC Yukon used by Rudolph to facilitate his drug trafficking.
“Despite four prior state felony convictions, David Dwayne Rudolph was caught with an arsenal of loaded weapons and other tools of the drug trade,” said U.S. Attorney Rod J. Rosenstein. “If we want to continue reducing violent crime, we need to show zero tolerance for armed criminals.”
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to his plea agreement, on April 8, 2014, Prince George’s County Police officers executed a search warrant at a Forestville apartment used by Rudolph to store drugs. The search recovered a semi-automatic handgun, 160 grams of crack cocaine, 115 grams of marijuana, and three digital scales and a glass container with cocaine residue.
On June 26, 2014, Prince George’s County Police officers executed an arrest warrant for Rudolph when he was driving his vehicle, a 2005 GMC Yukon. Officers located $1,725 in cash, 39 bags containing a total of 17 grams of crack cocaine, and several cell phones in the car. The next day, law enforcement executed a search warrant at Rudolph’s residence in Forestville. During the search, officers recovered a bullet proof vest, approximately 690 grams of crack cocaine, 55 grams of powder cocaine, 1,205 grams of marijuana, and $7,707 in cash. In addition, law enforcement recovered a .45 caliber pistol loaded with 12 rounds of ammunition, a 9mm pistol loaded with 16 rounds of ammunition, and a .32 caliber pistol loaded with 11 rounds of ammunition. Rudolph had previous felony convictions and was prohibited from possessing a firearm or ammunition.
United States Attorney Rod J. Rosenstein praised the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leah J. Bressack and Lindsay Eyler Kaplan, who prosecuted the case.
Topeka Man Pleads No Contest in Two Armed RobberiesRead the Press Release
TOPEKA, KAN. - A Topeka man pleaded no contest Monday to federal armed robbery charges, U.S. Attorney Barry Grissom said.
Henry Earl Sirvira, 46, Topeka, Kan., entered a plea of nolo contendere to two counts of commercial robbery and one count of brandishing a firearm during a robbery. During the plea hearing, prosecutors told the judge that on July 29, 2013, Sirvira and co-defendant Quartez Norwood robbed the EZ Payday Advance at 2613 S.W. 21st Street in Topeka. Sirvira pointed a handgun at an employee and threatened to kill him unless he opened the safe.
On Aug. 3, 2013, Sirvira and Norwood robbed the Family Dollar Store at 2616 S.E. 6th Street in Topeka. Norwood pointed a gun at the clerk while Sirvira assaulted a patron in another part of the store.
Sentencing is set for June 1. Both parties have agreed to recommend a sentence of 11 years in federal prison.
Co-defendants include:
Quartez Norwood, who was sentenced to 180 months.
Henry Lavelle Davis, who was sentenced to 84 months.
Robert Wayne Redmond, who was sentenced to 60 months.
Xavier Leron Sims, who was sentenced to 35 months.
Grissom commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
Topeka Business Owner Sentenced in Check Kiting SchemeRead the Press Release
TOPEKA, KAN. - A Topeka business owner who pleaded guilty to writing more than 5,000 insufficient fund checks in a check kiting scheme was sentenced Monday to 37 months in federal prison, U.S. Attorney Barry Grissom said. The defendant was ordered to pay more than $538,000 in restitution.
John Charles Humpage, III, 49, Topeka, Kan., pleaded guilty to one count of bank fraud. In his plea, he admitted that in 2008 he defrauded the Educational Credit Union, Kaw Valley State Bank and Alliance Bank. Humpage did business under various names including Humpco, Inc., Crescent Limousine, Yellow Cab of Topeka and Wire and Glass Lease, LLC. He carried out a scheme to defraud the banks by exchanging and cross-depositing insufficiently funded checks between two or more of his bank accounts. In that manner, he generated artificially inflated account balances. The check kiting scheme utilized bank system Afloat@ periods for purposes of creating artificially enhanced bank account balances.
From May through August 2008 he exchanged and cross deposited more than 5,000 insufficient checks and created in excess of $78 million in aggregate deposit amounts. Those deposits falsely inflated his bank account balances by more than $600,000.
Grissom commended the FBI and Assistant U.S. Attorney Richard Hathaway for his work on the case.
Three Individuals Charged with Defrauding Banks and Usda Export Financing ProgramRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on February 20, 2015, a federal grand jury in New Haven returned a 23-count indictment charging BRETT C. LILLEMOE, 45, of Minneapolis, Minn., PABLO CALDERON, 59, Darien, Conn., and SARAH ZIRBES, 39, Minneapolis, Minn., with conspiracy, fraud and money laundering offenses related to a multimillion dollar scheme to defraud banks participating in a USDA-backed export financing program. The indictment alleges that the three defendants engaged in a conspiracy to defraud U.S. financial institutions that secured loans to Russian Banks based on altered documents. The loans were backed by a credit guarantee program run by the U.S. Department of Agriculture (USDA), and when the loans went into default and were subsequently not paid back, the USDA lost millions of dollars.
LILLEMOE was arraigned on March 13 in Bridgeport federal court. He entered a plea of not guilty to all of the charges against him and was released on a $250,000 bond. ZIRBES was arraigned on March 6, pleaded not guilty and is released on a $100,000 bond. CALDERON is scheduled to be arraigned this afternoon at in Bridgeport.
As alleged in the indictment, the USDA provides credit guarantees through the Export Credit Guarantee Program (GSM-102), which is designed to encourage financing of commercial exports of U.S. agricultural products. The GSM-102 program guarantees credit extended by U.S. financial institutions in the U.S. to approved foreign banks, including banks in Russia. As part of the program, the Commodity Credit Corporation (CCC), which is an agency and instrumentality of the USDA, enters into payment guarantees (“credit guarantees”).
The credit guarantees are designed to encourage exports to buyers in foreign countries – mainly developing countries. The program operates in cases where credit is necessary to increase or maintain U.S. exports to a foreign market and where U.S. financial institutions might be otherwise unwilling to provide financing without the guarantee. In providing the credit guarantee facility, the CCC seeks to expand market opportunities for U.S. agricultural exporters and assist long-term market development for U.S. agricultural commodities.
In connection with the GSM-102 program, a foreign importer that has contracted to buy U.S. agricultural products can apply for a letter of credit (“LOC”) from a foreign bank that has been approved by the USDA’s Foreign Agricultural Service (FAS). The foreign bank then issues a letter of credit in favor of the U.S. exporter. The U.S. exporter then, consistent with the requirements of the GSM-102 program, presents proper shipping documents to an approved U.S. financial institution, including a copy of an original bill of lading, certificate of origin, and evidence of export. The U.S. financial institution then provides funds to the U.S. exporter which, in exchange, assigns the rights to the proceeds payable under the letter of credit from the foreign bank to the U.S. financial institution in the same dollar-denominated amount, less any fees. If the foreign bank defaults on its payments to the U.S. financial institution, the U.S. financial institution may submit a claim to the USDA FAS under the guarantee for up to 98 percent of the payment amount owed at the time of the default.
The indictment alleges that between September 2007 and January 2012, LILLEMOE, CALDERON, ZERBES and others devised and executed a scheme to defraud various U.S. financial institutions, including Deutsche Bank A.G. and Colorado-based CoBank ACB, by presenting false and altered shipping documents, including altered bills of lading, in connection with securing funding on loans guaranteed by the GSM-102.
The indictment alleges that LILLEMOE, CALDERON, ZERBES established multiple entities with separate names for the purpose of obtaining a greater share of the allocation of guarantees from the GSM-102 program, and used multiple bank accounts in the names of the various entities in order to further create the appearance that the entities were operating as separate and unrelated entities. The defendants then, in various ways, paid for or otherwise acquired bills of lading and other shipping documents for shipments of agricultural products that they did not physically ship and for which they did not participate in the physical movement of the products in any capacity.
It is further alleged that LILLEMOE entered into agreements with foreign banks, including International Industrial Bank (IIB) in Russia, to provide them capital that would be made available to them from a U.S. financial institution through the use of the GSM-102 program. LILLEMOE subsequently obtained letters of credit from the foreign banks. LILLEMOE, CALDERON, and ZIRBES and others then altered copies of certain shipping documents, including bills of lading marked “Copy non negotiable,” by whiting out portions of the documents, stamping the word “original” on the documents, and adding shading on certain sections of the bills of lading. The defendants also prepared and executed documents termed “commercial invoices” purporting to represent sales of agricultural commodities between entities that they controlled, as well as between entities that they controlled and other entities.
The defendants then used these fraudulent documents to obtain large amounts of capital from U.S. banks in connection with the GSM-102 program, and then provided the funds to the foreign banks in exchange for a percentage fee for themselves and their various entities. Although the foreign banks were obligated to repay the funds to the U.S. financial institutions by virtue of the letters of credit issued to the U.S. financial institutions, in a number of instances, the foreign banks failed to do so. Nevertheless, LILLEMOE, CALDERON, ZIRBES and their various entities retained millions of dollars of fees they had collected in connection with the GSM-102 transactions.
Through this alleged scheme, the foreign banks defaulted on over $10 million of loans for which the USDA’s GSM-102 program had to pay out the guarantees.
The indictment further alleges that, on November 17, 2011, CALDERON stated to federal agents investigating this matter that LILLEMOE was his “supplier” and that he, CALDERON, “purchased commodities from Lillemoe.” In truth, LILLEMOE was not CALDERON’s supplier and CALDERON did not purchase commodities from LILLEMOE. Rather, LILLEMOE was a partner and co-conspirator with whom CALDERON orchestrated paper-only transactions.
The indictment charges LILLEMOE, CALDERON and ZIRBES with one count of conspiracy to commit wire fraud and bank fraud, and multiple counts of wire fraud, offenses that carry a maximum term of imprisonment of 20 years on each count. The indictment also charges each defendant with one count of bank fraud, which carries a maximum term of imprisonment of 30 years, and one count of money laundering, which carries a maximum term of imprisonment of 10 years. In addition, CALDERON is charged with one count of making a false statement to federal law enforcement, which carries a maximum term of imprisonment of five years.
U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Department of Agriculture, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and John H. Durham.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Three Defendants Plead Guilty in Bakersfield Mortgage Fraud SchemeRead the Press Release
FRESNO, Calif. — Three members of the same family entered guilty pleas today in connection with a $5.6 million mortgage fraud scheme in Bakersfield, U.S. Attorney Benjamin B. Wagner announced.
Bakersfield residents Eliseo Jara Jr., 35, and his brother, Sergio Jara, 33, pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud. Sergio Jara’s wife, Melissa Jara, 34, pleaded guilty to wire fraud.
According to court documents, from 2007 to 2010, the Jara brothers conspired with others to use straw buyers to purchase residential properties in Bakersfield developed by Jara Brothers Investments (JBI) and Pershing Partners LLC. The conspirators paid straw buyers to purchase the properties from JBI and Pershing Partners, and funded the purchases using loans they obtained for the straw buyers based on false and fraudulent loan applications. Melissa Jara admitted to causing false loan applications and supporting documents to be submitted to a lender in order for a straw buyer to finance the purchase of a property from an LLC that she owned and controlled.
As part of their plea agreements, each defendant agreed to forfeit their interests in six properties in Bakersfield, a 2007 Lexus, and approximately $110,419 seized from a bank account. Additionally, Eliseo Jara agreed to a personal forfeiture money judgment of $5,664,250. Sergio Jara agreed to a personal forfeiture money judgment of $4,743,500. Melissa Jara agreed to a personal forfeiture money judgment of $534,750. Melissa Jara also agreed to deposit $100,000 with the Court toward her victim restitution obligation prior to her sentencing hearing.
This case is the product of a joint investigation by the Internal Revenue Service‑Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff, Henry Z. Carbajal III, and Megan A. S. Richards are prosecuting the case.
The maximum sentence for the conspiracy charge and the wire fraud charge is 30 years in prison and a $1 million fine. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Four co-defendants have previously pleaded guilty. Antonio Perez-Marcial was sentenced on May 12, 2014 to 46 months in prison. Arlene Mojardin is scheduled to be sentenced on May 18, 2015. Candace Gonzales is scheduled to be sentenced on June 8, 2015. Ricardo Salinas is set for sentencing on June 29, 2015. The indictment charges two additional defendants, who are set to proceed to trial on April 28, 2015, before Judge Ishii. The charges as to these defendants are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Taiwan Businessman Sentenced to 24 Months for Conspiring to Violate U.S. Laws Preventing Proliferation of Weapons of Mass DestructionRead the Press Release
Assistant Attorney General for National Security John P. Carlin; U.S. Attorney Zachary T. Fardon of the Northern District of Illinois; Special Agent in Charge Robert J. Holley of the FBI’s Chicago Office; Special Agent in Charge Gary Hartwig of U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) in Chicago; and Acting Special Agent in Charge David Nardella of the U.S. Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement of the Chicago Field Office announced today that a former resident of Taiwan, who the United States has linked to the supply of weapons manufacturing machinery to North Korea, was sentenced today to serve 24 months in federal prison by U.S. District Court Judge Charles R. Norgle of the Northern District of Illinois.
The defendant, Hsien Tai Tsai, 69, pleaded guilty in October 2014, admitting that he conspired with others to interfere with and obstruct U.S. regulations that seek to disrupt the proliferation of weapons of mass destruction. When imposing sentence, Judge Norgle credited Tsai for the substantial assistance he provided, and would continue to provide, to the government in its investigation of weapons of mass destruction proliferators. Tsai, also known as Alex Tsai, was arrested in May 2013 in Tallinn, Estonia, and was later extradited to the United States, where he remains in federal custody.
“Hsien Tai Tsai violated a critical sanctions regime and undermined and interfered with U.S. efforts to disrupt North Korea's weapons of mass destruction and advanced weapons programs,” said Assistant Attorney General Carlin. “These sanctions are meant to raise the cost for WMD proliferators to do business and deter others from proliferating by denying them access to our financial and commercial systems. This prosecution makes clear that we will use all of our tools to identify and arrest WMD proliferators and to disrupt their efforts to undermine our country's security. I’d like to thank all who helped with this investigation and prosecution.”
“Aggressive enforcement of U.S. laws targeting those who supply goods, services or other support to proliferators of weapons of mass destruction is vital to ensuring global safety,” said U.S. Attorney Fardon. “As this case demonstrates, companies and individuals who seek to evade these laws will confront an international law enforcement community working cooperatively and effectively to stem these threats.”
According to court documents, Tsai was associated with at least three companies based in Taiwan – Global Interface Company Inc., Trans Merits Co. Ltd., and Trans Multi Mechanics Co. Ltd. – that purchased and then exported, and attempted to purchase and then export, from the United States and other countries machinery used to fabricate metals and other materials with a high degree of precision.
In January 2009, under Executive Order 13382, which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Tsai, Global Interface and Trans Merits as proliferators of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with them. At that time, the Treasury Department said that Tsai was designated because he provided, or attempted to provide, financial, technological, or other support for, or goods or services in support of, the Korea Mining Development Trading Corporation, which the Treasury Department has stated is North Korea’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons. Additionally, Tsai he had been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program. After the OFAC designations, Tsai and others continued to conduct business together, but attempted to hide Tsai’s and Trans Merit’s involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. Later, in 2013, Trans Multi Mechanics was also designated by OFAC.
In pleading guilty, Tsai admitted that he was involved in multiple commercial and financial transactions to undermine the sanctions against WMD proliferations, including the purchase of a Bryant center hole grinder from a U.S. company based in suburban Chicago, and exported it to Taiwan in 2009 using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material. Tsai also admitted having a role in Trans Merits’ transactions involving LED road lights and an oil pump, and using third parties to wire transfer funds to the United States.
The case was investigated by the FBI, ICE-HSI and the U.S. Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement, with assistance provided by the Justice Department’s Office of International Affairs. Assistant Attorney General Carlin would like to give special thanks to the Estonian Internal Security Service and the Estonian Prosecutor’s Office who cooperated with the United States. The case is being prosecuted by Assistant U.S. Attorney Brian Hayes of the Northern District of Illinois and Trial Attorney Brandon L. Van Grack of the Justice Department’s National Security Division.
Taiwan Businessman Sentenced to 24 Months for Conspiring to Violate U.S. Laws Preventing Proliferation of Weapons of Mass DestructionRead the Press Release
CHICAGO – Assistant Attorney General for National Security John P. Carlin; U.S. Attorney Zachary T. Fardon of the Northern District of Illinois; Special Agent in Charge Robert J. Holley of the FBI’s Chicago Office; Special Agent in Charge Gary Hartwig of U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) in Chicago; and Acting Special Agent in Charge David Nardella of the U.S. Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement of the Chicago Field Office announced today that a former resident of Taiwan, who the United States has linked to the supply of weapons manufacturing machinery to North Korea, was sentenced today to serve 24 months in federal prison by U.S. District Court Judge Charles R. Norgle of the Northern District of Illinois. The defendant, Hsien Tai Tsai, 69, pleaded guilty in October 2014, admitting that he conspired with others to interfere with and obstruct U.S. regulations that seek to disrupt the proliferation of weapons of mass destruction. When imposing sentence, Judge Norgle credited Tsai for the substantial assistance he provided, and would continue to provide, to the government in its investigation of weapons of mass destruction proliferators. Tsai, also known as Alex Tsai, was arrested in May 2013 in Tallinn, Estonia, and was later extradited to the United States, where he remains in federal custody.
“Aggressive enforcement of U.S. laws targeting those who supply goods, services, or other support to proliferators of weapons of mass destruction is vital to ensuring global safety,” stated Zachary T. Fardon, United States Attorney, after the sentence was announced. “As this case demonstrates, companies and individuals who seek to evade these laws will confront an international law enforcement community working cooperatively and effectively to stem these threats,” said U.S. Attorney Fardon.
“Hsien Tai Tsai violated a critical sanctions regime and undermined and interfered with U.S. efforts to disrupt North Korea's weapons of mass destruction and advanced weapons programs,” said Assistant Attorney General Carlin. “These sanctions are meant to raise the cost for WMD proliferators to do business and deter others from proliferating by denying them access to our financial and commercial systems. This prosecution makes clear that we will use all of our tools to identify and arrest WMD proliferators and to disrupt their efforts to undermine our country's security. I’d like to thank all who helped with this investigation and prosecution.”
According to court documents, Tsai was associated with at least three companies based in Taiwan – Global Interface Company Inc., Trans Merits Co. Ltd., and Trans Multi Mechanics Co. Ltd. – that purchased and then exported, and attempted to purchase and then export, from the United States and other countries machinery used to fabricate metals and other materials with a high degree of precision.
In January 2009, under Executive Order 13382, which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Tsai, Global Interface and Trans Merits as proliferators of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with them. At that time, the Treasury Department said that Tsai was designated because he provided, or attempted to provide, financial, technological, or other support for, or goods or services in support of, the Korea Mining Development Trading Corporation, which the Treasury Department has stated is North Korea’s premier arms dealer and main exporter of goods and equipment related to ballistic missiles and conventional weapons. Additionally, Tsai had been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program. After the OFAC designations, Tsai and others continued to conduct business together, but attempted to hide Tsai’s and Trans Merit’s involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. Later, in 2013, Trans Multi Mechanics was also designated by OFAC.
In pleading guilty, Tsai admitted that he was involved in multiple commercial and financial transactions to undermine the sanctions against WMD proliferations, including the purchase of a Bryant center hole grinder from a U.S. company based in suburban Chicago, and exported it to Taiwan in 2009 using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material. Tsai also admitted having a role in Trans Merits’ transactions involving LED road lights and an oil pump, and using third parties to wire transfer funds to the United States.
The case was investigated by the FBI, ICE-HSI and the U.S. Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement, with assistance provided by the Justice Department’s Office of International Affairs. The Estonian Internal Security Service and the Estonian Prosecutor’s Office cooperated with the United States. The case was prosecuted by Assistant U.S. Attorney Brian Hayes of the Northern District of Illinois and Trial Attorney Brandon L. Van Grack of the Justice Department’s National Security Division.
Taft Man Sentenced to 10 Years in Prison for Possession with Intent to Distribute Methamphetamine and HeroinRead the Press Release
FRESNO, Calif. — David Edward Hampton Jr., 34, of Taft, was sentenced today by United States District Judge Lawrence J. O’Neil to 10 years and one month in prison for possession with intent to distribute methamphetamine and heroin, United States Attorney Benjamin B. Wagner announced.
According to court documents, in February 2014, agents learned that Hampton had mailed a package to Rapid City, South Dakota from Taft. It was believed that the package was destined for one of Hampton’s methamphetamine distributors. The package was intercepted and found to contain approximately 444 grams of methamphetamine. On March 24, 2014, Hampton mailed another package from Taft to South Dakota, which was also seized and found to contain approximately 167 grams of methamphetamine.
On March 25, 2014, a federal search warrant was executed on Hampton’s residence and agents found approximately 459 grams of methamphetamine and 16 grams of heroin. Hampton admitted that the narcotics seized from his residence were his and that he intended to distribute them for profit.
This case was the product of an investigation by the Violent Crime Task Force which includes the Bakersfield Police Department, the Kern County Sheriff’s Office, the Kern County Probation Office, and the Federal Bureau of Investigation. Assistant United States Attorney Brian K. Delaney is prosecuting the case.
Sugar Land Man Heads to Prison for Trafficking Counterfeit Louis Vuitton, Coach and Other MerchandiseRead the Press Release
HOUSTON – Han Woon Liew, 46, of Sugar Land, has been ordered to federal prison following his conviction of conspiracy to traffic in counterfeit goods, announced United States Attorney Kenneth Magidson along with Brian M. Moskowitz, special agent in charge of Homeland Security Investigations (HSI) in Houston. Liew pleaded guilty Nov. 18, 2014.
Today, U.S. District Judge Lynn C. Hughes ordered he serve 70 months of federal imprisonment to be immediately followed by three years of supervised release. He was further ordered to pay $2.6 million in restitution.
“The partnership between HSI - Houston special agents and officers of the Houston Police Department (HPD) led to the downfall of one of the region’s largest distributors of counterfeit luxury goods” said Moskowitz. “The significant prison sentence imposed by the court highlights the serious nature of intellectual property crimes and the large restitution figure reinforces the fact that these are not victimless crimes.”
Liew admitted that from January 2012 through April 2014, he intentionally trafficked in goods, specifically counterfeit Louis Vuitton, Michael Kors, Coach and Gucci purses and wallets. Liew knowingly used counterfeit marks, which were registered trademarks, in an attempt to make the items appear legitimate.
Liew was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was conducted by Homeland Security Investigations with the assistance of HPD. Assistant U.S. Attorney (AUSA) Celia Moyer and Special AUSA Mark Evans are prosecuting the case.
Statement by Attorney General Holder on the Departure of Ronald C. Machen Jr. as the US Attorney of the District of ColumbiaRead the Press Release
Attorney General Eric Holder released the following statement on the departure of U.S. Attorney Ronald C. Machen Jr. of the District of Columbia:
“During more than five years as U.S. Attorney of the District of Columbia, Ron Machen Jr. has distinguished himself as a skilled leader, a devoted public servant and a forceful champion of justice on behalf of the American people. Throughout his remarkable tenure, Ron has applied his boundless talent and consummate judgment to protect the safety and security of all Americans in cases involving violent crime, national security threats and public corruption. As one of Ron’s predecessors as U.S. Attorney in Washington, I know firsthand the unique demands of leading the nation’s largest U.S. Attorney’s Office. But Ron has never been deterred by a difficult challenge, nor slowed in his pursuit of a safer, stronger Washington. I was fortunate to be able to hire Ron as an Assistant U.S. Attorney in the Office in 1997, and I see in him now the exceptional qualities that I saw in him then: unassailable integrity, relentless determination and a passion for law and justice. I congratulate him on the outstanding results he has achieved as U.S. Attorney of the District of Columbia. I thank him for his inspiring service. And I look forward to all that he will accomplish in the next stage of his already extraordinary career.”
Six Leaders and Members of Phantom Outlaw Motorcycle Club and Vice Lords Street Gang Convicted of Violent Racketeering-Related CrimesRead the Press Release
Today, a federal jury in Detroit convicted six leaders and members of the violent Phantom Outlaw Motorcycle Club, many of whom were also leaders and members of the Vice Lords street gang, of conspiracy to commit murder and other violent racketeering-related offenses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Steve Bogdalek of the Bureau of Alcohol, Tobacco, Firearms and Explosives’s (ATF) Detroit Field Division and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Division made the announcement.
“The Phantom Motorcycle Club used violence and plotted murder in an effort to prevail in a gang war against rival motorcycle clubs in Michigan and throughout the country, and its leaders and members attempted to kill anyone who stood in their way,” said Assistant Attorney General Caldwell. “The trial convictions of the gang’s National President, National Enforcer and four other members bring to a close this dangerous organization’s violent reign. I am thankful for the courageous and diligent efforts of our prosecutors and law enforcement partners who successfully brought this criminal enterprise to justice.”
“The Detroit One partnership has focused on dismantling violent street gangs like this one because they cause intolerable harm to public safety in our neighborhoods,” said U.S. Attorney McQuade. “We will continue to target and disrupt violent gangs in hopes of restoring peace for residents in our community.”
“The amount of pain, suffering and fear that violent gangs bring to our communities is immeasurable,” said Special Agent in Charge Bogdalek. “Our goal was to disable the group by targeting its leadership, the convictions today of leaders and members of these illegal motorcycle gangs is an excellent example of success that comes from effective law enforcement cooperation.”
“As part of the Detroit One Initiative, this joint investigation effectively targeted and neutralized violent criminal offenders of the Phantom Outlaw Motorcycle Club,” said Special Agent in Charge Abbate. “Our efforts to combat violent crime continue to be waged each and every day in cooperation with our local, state, and federal law enforcement partners. Protecting our communities from offenders such as these is among our highest priorities, and we will continue this fight on behalf of the citizens we serve and protect.”
The jury convicted the defendants of the following offenses:
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Antonio Johnson, aka, “Mister Tony,” “MT,” and “Big Bro,” 40, of Detroit, the National President of the Phantoms and the “Three-Star General” over the Vice Lords street gang in Michigan, was convicted of engaging in a RICO conspiracy, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon in aid of racketeering, using and carrying firearms during and in relation to a crime of violence and being a felon in possession of firearms.
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Marvin Nicholson, aka, “Chosen One,” 46, of Detroit, the National Enforcer of the Phantoms and a Vice Lords member, was convicted of engaging in a RICO conspiracy, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon in aid of racketeering, assault on federal officers, using and carrying firearms during and in relation to a crime of violence and being a felon in possession of firearms.
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Brian Sorrell, 28, aka, “PC,” of Detroit, a member of the Detroit Chapter of the Phantoms and the Vice Lords, was convicted of engaging in a RICO conspiracy, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon in aid of racketeering and using and carrying firearms during and in relation to a crime of violence.
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Sherman Brown, aka, “Tank,” 43, of Detroit, the Sergeant-at-Arms of the Detroit Chapter of the Phantoms and a Vice Lords member, was convicted of conspiracy to commit murder in aid of racketeering.
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Brian Jackson, aka, “Wood,” 48, of Detroit, the Master Sergeant of the Inkster, Michigan Chapter of the Phantoms, was convicted of conspiracy to commit murder in aid of racketeering.
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Matthew Schamante, aka, “Arsenal,” 32, of Waterford, Michigan, the President of the Pontiac, Michigan Chapter of the Phantoms, was convicted of engaging in a RICO conspiracy and possessing an unregistered short-barrel shotgun.
At trial, evidence showed that the Phantom Outlaw Motorcycle Club is headquartered in northwest Detroit and has chapters throughout Michigan, Ohio, Kentucky, Illinois, New York, New Jersey, Texas, Georgia, Missouri and Tennessee, as well as a chapter of “Nomads” that travel at will. The evidence showed that the club and its members were involved in a range of criminal activity including conspiracy to commit murder, shootings, robbery, extortion and the possession and sale of stolen vehicles and motorcycles.
Evidence also showed that the leadership of the Phantoms was heavily involved in the Vice Lords street gang, including Johnson, who was both the National President of the Phantoms and the “Three-Star General” over the Vice Lords street gang in Michigan. The Vice Lords is a well-known street gang originating from Chicago. Specifically, the evidence showed that Johnson used the Vice Lords to assist the Phantoms in various criminal endeavors, including to search for and violently attack rivals of the Phantoms.
The evidence specifically demonstrated that, on Sept. 8, 2013, Johnson ordered numerous Phantoms, including Nicholson and Sorrell, to take the vests or “rags” of the Satan Sidekicks Motorcycle Club, a rival motorcycle club. During the attempted robbery, Sorrell shot the victim in the face.
Additionally, according to the evidence, Johnson blamed the Hell Lovers Outlaw Motorcycle Club for the murder of a Phantoms member in late September 2013, and ordered a three-phase murder plot against the Hell Lovers in retaliation. In the first phase, the Phantoms were to murder at least three members of the Hell Lovers in Detroit in order to lure additional Hell Lovers to Michigan for the funeral. In the second phase, the Phantoms were to murder all members of the Hell Lovers who would be at the Hell Lovers’ Detroit, Michigan clubhouse following the funeral of the three members murdered in the first phase. In the third phase, the Phantoms were to kill Hell Lovers in other cities throughout the country where the Phantoms had chapters. The mass murder plot was interrupted before it came to fruition by search warrants executed by the ATF and FBI in October 2013. At trial, evidence showed that the Phantoms were preparing for the first phase of the murder plot at the time of the search warrants, including stockpiling firearms, hiring a thief to steal a van to be used in the murders, conducting research and surveillance of their intended victims, and assigning Phantom members and Vice Lords members to stalk and murder the intended victims. Johnson, Nicholson, Sorrell, Brown and Jackson were all convicted of the murder plot.
Finally, the evidence demonstrated that, on Oct. 4, 2013, while the ATF and FBI attempted to execute a search warrant at his residence in Detroit, Nicholson shot at ATF agents four times as they attempted to enter his residence. A wall prevented the bullets from hitting the agents. The firearm that Nicholson used to shoot at the ATF agents was registered to Schamante.
Sentencing hearings will be scheduled at a later date before U.S. District Judge Paul D. Borman of the Eastern District of Michigan. Five defendants have previously pleaded guilty in the case to charges including RICO conspiracy and assault with a dangerous weapon in aid of racketeering, and await sentencing.
The arrests in this case were made as part of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit, and through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and the FBI. By working collaboratively, local, state and federal law enforcement are striving to maximize their ability to identify and arrest the persons and groups initiating the violence in Detroit. These convictions are a tangible and significant result of this joint effort.
The case is being prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section, and Assistant U.S. Attorneys Christopher Graveline and Louis Gabel of the Eastern District of Michigan.
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Serial Bank Robber Receives 25-Year Federal Prison TermRead the Press Release
PORTLAND, Ore.—Christian Olivier DeLaurentiis, 33, of Aloha, Oregon, was sentenced today by U.S. District Judge Marco Hernandez to 25 years in prison for a series of seven bank robberies committed in Western Oregon in early 2012. Judge Hernandez ordered the sentence to be served concurrently with the sentence yet to be imposed in Washington County Circuit Court for aggravated murder and abuse of a corpse, to which defendant has also pleaded guilty.
DeLaurentiis pleaded guilty in federal court on November 17, 2014, to the following bank robberies:
- January 2, 2012, at U.S. Bank in Medford, Oregon;
- February 8, 2012, at U.S. Bank in Hillsboro, Oregon;
- February 13, 2012, at U.S. Bank in Clackamas, Oregon;
- February 24, 2012, at U.S. Bank in Beaverton, Oregon;
- February 28, 2012, at Wells Fargo Bank in Troutdale, Oregon;
- March 19, 2012, at U.S. Bank in Wilsonville, Oregon;
- April 3, 2012, at Washington Federal Bank in Woodburn, Oregon.
The first five robberies involved demand notes with representations that DeLaurentiis was armed, but the tellers saw no weapons.In the Wilsonville robbery DeLaurentiis was armed with a purported bomb which turned out to be a hoax device.In the Woodburn robbery he was armed with a handgun which he waved at the tellers.
DeLaurentiis is awaiting sentencing in Washington County on his guilty pleas to the murder and dismemberment of an accomplice in the bank robberies. In May 2012 law enforcement officers found the remains of the accomplice in a freezer in DeLaurentiis’ Aloha residence.
The bank robbery investigations were conducted by the FBI in conjunction with local law enforcement agencies in each jurisdiction. The federal case was prosecuted by Assistant U. S. Attorney Stephen F. Peifer.
Self Storage Managers Plead Guilty to Investment FraudRead the Press Release
SAN DIEGO – The three owner/operators of Equity Based Services (EBS), Howard Kaplan and his two sons, Stephen and Eric Kaplan, pled guilty today to conspiring to commit wire fraud. According to the charging documents, the three principals admitted stealing over a half million dollars from investors while operating the business.
EBS (operating as American Mini Storage) was formed, in 1995, as a San Diego-based private real estate company specializing in the acquisition and management of self-storage properties. According to the plea agreements filed in court, beginning in or about 2001 and continuing to sometime in 2010, the company and its affiliates offered individuals the opportunity to invest in syndicates comprised of approximately 77 self-storage projects in a dozen different states. In doing so, they failed to disclose material information about the source of periodic return payments and the actual past performance of the self-storage projects.
Investors in the various syndicates were convinced to invest with the Kaplans, in part, by the representation that they would be entitled to a “Preferred Return,” usually in the amount of 8% per annum. This Preferred Return would generally be paid on a monthly, quarterly or other periodic basis; and, if not paid, would accrue until the property was sold. Investors were also promised that the defendants would not share in or be paid their fee (consisting of 25% of the profits) unless and until all other investors had received their 8% return. From approximately 2002 through August 2010, EBS regularly distributed the 8% periodic return to investors. Based, in part, on these regular 8% Preferred Returns, many earlier investors invested in one or more subsequent projects. These regular payments also attracted new investors.
Unknown to investors, some of the regular 8% Preferred Returns were made possible only because defendant Howard Kaplan was diverting funds from better-performing properties or using fees paid to EBS generated by new project syndications. As admitted in court proceedings, defendant Howard Kaplan failed to disclose to investors that their investment project was not generating enough operational profit to justify the 8% return. Similarly, he concealed from investors that certain individual syndications were, in fact, not generating sufficient funds to even cover their operational costs and debt service. In addition, Howard Kaplan also failed to disclose to investors that he was commingling their funds and using them to pay other projects’ debt service.
In entering his plea, Howard Kaplan admitted he breached his fiduciary responsibility and duty to investors by pre-funding the return payments through a process of raising excess funds for individual projects. Also, he induced investors to invest additional funds in projects without informing these investors as to the true financial condition of the properties, and created new and sometimes undisclosed fees called “capital assignment considerations” and “equity consulting fees”.
Defendants Stephen and Eric Kaplan admitted they were aware of the above misconduct by their father no later than January 2010. Despite this knowledge, they continued to seek and accept investments while failing to disclose the true financial status of the properties and misuse of funds to both new and old investors.
This case is being co-prosecuted with the California Attorney General’s Office, with assistance from the California Department of Business Oversight.
DEFENDANTS Case Number: Howard Kaplan Age: 71 El Cajon, California Stephen Kaplan Age: 51 La Jolla, California Eric Kaplan Age: 43 San Diego, California CHARGESTitle 18, U.S.C., Sec. 371 – Conspiracy to commit wire fraud. Maximum penalties under the statute include 5 years in prison, $250,000 fine, three years of supervised release.
INVESTIGATING AGENCIESCalifornia Department of Business Oversight
Federal Bureau of InvestigationReno, Nevada Man Sentenced for Aggravated Identity Theft for Fraudulent Credit Card Use in BoiseRead the Press Release
BOISE – Rapphel Johnson, 28, of Reno, Nevada, was sentenced today to 24 months in prison for aggravated identity theft, U.S. Attorney Wendy J. Olson announced. U.S. District Chief Judge B. Lynn Winmill also ordered Johnson to pay a $5,000 fine, and serve one year of supervised release following the prison term.
Johnson was indicted in September 2014, for access device fraud (credit card fraud) and aggravated identity theft. According to the plea agreement, Johnson admitted that on September 1, 2014, he and a co-defendant knowingly used counterfeit credit cards containing the account numbers of real people to make a number of fraudulent purchases in Boise at stores including Rite Aid, Subway, T-Mobile, Finish Line, and Macy’s. In particular, Johnson admitted using a counterfeit credit card, with another person’s account number, to purchase a Microsoft Surface Pro 3 at the Boise Towne Square Mall. Additionally, Johnson admitted that when he was contacted by police at a motel room rented with a counterfeit credit card, he threw several counterfeit credit cards out the motel room window.
Johnson’s co-defendant, Elizabeth Carter, is scheduled for sentencing on May 12, 2015.
The case was investigated by the United States Secret Service and the Boise Police Department.
Pikesville Business Owner Pleads Guilty to Conspiracy to Distribute over $6.6 Million in Contraband CigarettesRead the Press Release
Baltimore, Maryland – Ilgar Rakhamimov, age 41, of Pikesville, Maryland, pleaded guilty today to conspiracy to receive, possess, sell and distribute over $6.6 million in contraband cigarettes, that is, cigarettes on which the applicable state taxes have not been paid.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Antoinette V. Henry of the U.S. Food & Drug Administration, Office of Criminal Investigations; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to their guilty pleas, Elmar Rakhamimov (no relation to Ilgar Rakhamimov) was the leader and organizer of the scheme, and he coordinated with Ilgar Rakhamimov and another conspirator to collect the money to purchase the contraband cigarettes, and to arrange for the storage and transportation of the contraband cigarettes to Brooklyn, New York. Other members of the conspiracy included Zarakh Yelizarov, Salim Yusufov, Adam Azerman, Shamil Novakhov, and Ruslan Ykiew. Elmar Rakhamimov, Ilgar Rakhamimov, and another conspirator purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area.
The first transaction occurred at Chesapeake Monuments, a business owned by Ilgar Rakhamimov, on December 11, 2011, when Elmar Rakhamimov and Ilgar Rakhamimov purchased 20 master cases of contraband cigarettes in exchange for $18,000 in cash. After the first transaction, the contraband cigarettes were delivered to and stored at the home of Elmar Rakhamimov in Owings Mills. Prior to each transaction, Elmar Rakhamimov, Ilgar Rakhamimov, and a third co-conspirator discussed the transaction on the phone, and frequently met at Elmar Rakhamimov’s home to discuss the purchase and compile and count the money for the transaction.
The cigarettes were sold and distributed in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $4.35 per package of cigarettes ($43.50 per carton of cigarettes). The total tax evaded over the course of the conspiracy was more than $2.5 million.
Following many of the deliveries, the conspirators met at Elmar Rakhamimov’s residence to discuss moving the cigarettes to Brooklyn, New York where the cigarettes were sold at a profit to individuals in New York, who further distributed the contraband cigarettes. The cigarettes were often transported from Maryland to New York by Adam Azerman, who delivered them to Shamil Novakhov, a relative of Ilgar Rakhamimov. Ilgar Rakhamimov brought Novakhov into the conspiracy, and was the primary contact with Novakov throughout the conspiracy. Novakhov’s nephew, Ruslan Ykiew, also would travel from New York to Maryland to obtain contraband cigarettes and transport them to his uncle in New York. Ykiew initially stored the cigarettes in a restaurant he owned. At Novakhov’s request, in 2012 Ykiew rented a warehouse for the storage of the contraband cigarettes. Ilgar Rakhamimov and his co-conspirators paid $30 for each carton of contraband cigarettes, and sold them to buyers in New York for approximately $41 - $45 per carton.
Yelizarov and Elmar Rakhamimov laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, Estonia, and New York, to a bank in Maryland, disguising the money as legitimate business payments for medical equipment or supplies. From December 27, 2012 through September 5, 2013, Yelizarov and Rakhamimov wired a total of $649,500 through 12 transactions.
Ilgar Rakhamimov faces a maximum sentence of five years in prison for conspiracy to traffic in contraband cigarettes. As part of his plea agreement, Ilgar Rakhamimov is also required to pay a $50,000 fine. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for Ilgar Rakhamimov for June 11, 2015, at 1:00 p.m.
Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 42, of Owings Mills, Maryland, and his brother, Salim Yusufov, age 43, of Reisterstown, Maryland; Zarakh Yelizarov, age 52, and Adam Azerman, age 59, both of Pikesville; and Shamil Novakhov, age 58, and Ruslan Ykiew, age 39, both of Brooklyn, New York, previously pleaded guilty to their roles in the conspiracy and are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, U.S. Food & Drug Administration, Office of Criminal Investigations and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who are prosecuting the case.
Philadelphia Woman Charged with Concealing Child's Death to Continue Receiving BenefitsRead the Press Release
PHILADELPHIA - Nakia Calicat, 38, of Philadelphia, PA, was charged by indictment, unsealed today, with concealing the death of her child in order to continue receiving Supplemental Security Income payments for her deceased daughter, announced United States Attorney Zane David Memeger. Calicat is charged with ten counts of wire fraud, one count of theft of government money, two counts of false statements, and one count of Social Security representative payee fraud.
Calicat gave birth to a child in December 2006 and filed for SSI benefits in March 2007. The child died in July of 2010 but the Social Security Administration (“SSA”) did not learn of the death until August of 2013. SSA sent notice to Calicat that the benefits for her child would be terminated. In October 2013, the indictment alleges that Calicat told an SSA employee that her child was still alive. In August 2014, Calicat spoke to a Special Agent with the Social Security Administration Office of Inspector General and, again, allegedly lied about her daughter’s death. According to the indictment, between July 2010 and August 2014, Calicat illegally received Social Security benefits on behalf of her decease child defrauding the government of approximately $26,224.
If convicted, the defendant faces a maximum possible statutory sentence of up to 225 years in prison, a three‑year period of supervised release, a $3.5 million fine, restitution of $26,224 and a $1,400 special assessment.
The case was investigated by the Social Security Administration Office of Inspector General and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
North Carolina Man Indicted for Filing False Claims for Tax Refunds and Identity TheftRead the Press Release
A federal grand jury in the Eastern District of North Carolina has returned an indictment against a Raleigh, North Carolina, resident for one count of conspiracy to defraud the United States, 17 counts of presenting false claims to the Internal Revenue Service (IRS), three counts of wire fraud and two counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.
Christian Rhodes, of Raleigh, was arrested earlier today on the indictment, which alleges that Rhodes and others solicited individuals in order to prepare their federal tax returns that used false information to claim tax refunds that the individuals were not entitled to receive. The tax returns that Rhodes prepared and filed contained false wages, tax withholdings and deductions. Rhodes directed the IRS to deposit refunds electronically into bank accounts in his own name and in the names of third-party taxpayers. Rhodes also used stolen identities in order to file false claims for tax refunds.
If convicted, Rhodes faces a statutory maximum sentence of 10 years in prison for the conspiracy count, five years in prison for each false claims count, 20 years in prison for each wire fraud count, and a maximum fine of $250,000 for each count. Rhodes also faces a statutory mandatory minimum sentence of two years in prison for the aggravated identity theft count.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Susan Menzer of the U.S. Attorney’s Office for the Eastern District of North Carolina, and Trial Attorneys Lauren Castaldi and Rebecca Perlmutter of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.
An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty in a U.S. District Court.
North Carolina Man Indicted for Filing False Claims for Tax Refunds and Identity TheftRead the Press Release
WASHINGTON – A federal grand jury in the Eastern District of North Carolina has returned an indictment against a Raleigh, North Carolina, resident for one count of conspiracy to defraud the United States, 17 counts of presenting false claims to the Internal Revenue Service (IRS), three counts of wire fraud and two counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.
Christian Rhodes, of Raleigh, was arrested earlier today on the indictment, which alleges that Rhodes and others solicited individuals in order to prepare their federal tax returns that used false information to claim tax refunds that the individuals were not entitled to receive. The tax returns that Rhodes prepared and filed contained false wages, tax withholdings and deductions. Rhodes directed the IRS to deposit refunds electronically into bank accounts in his own name and in the names of third-party taxpayers. Rhodes also used stolen identities in order to file false claims for tax refunds.
If convicted, Rhodes faces a statutory maximum sentence of 10 years in prison for the conspiracy count, five years in prison for each false claims count, 20 years in prison for each wire fraud count, and a maximum fine of $250,000 for each count. Rhodes also faces a statutory mandatory minimum sentence of two years in prison for the aggravated identity theft count.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Susan Menzer of the U.S. Attorney’s Office for the Eastern District of North Carolina, and Trial Attorneys Lauren Castaldi and Rebecca Perlmutter of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.
An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty in a U.S. District Court.