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23 April 2015
Louisiana Doctor Pleads Guilty to Health Care Fraud Charges for Writing False Home Health Certifications in $56 Million Fraud SchemeRead the Press Release
WASHINGTON – A Louisiana doctor pleaded guilty to federal health care fraud charges today, admitting that he wrote false home health care certifications that were used in a multi-million dollar Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Michael Anderson of the FBI’s New Orleans Field Office, Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Regional Office and Louisiana Attorney General James D. “Buddy” Caldwell made the announcement.
Winston Murray, M.D., 62, of Hammond, Louisiana, pleaded guilty before Chief U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana to all three charges against him, including one count of conspiracy to commit health care fraud and two counts of health care fraud. He is scheduled to be sentenced on August 12, 2015. Murray is the ninth defendant to plead guilty in this case. The trial for the remaining four defendants is scheduled to begin on May 6, 2015.
At his plea hearing, Murray admitted that he operated a clinic in Hammond, Louisiana, from which he wrote home health care referrals for Medicare beneficiaries he knew were not confined to their homes. Murray further admitted that his referrals were used by home health companies Interlink Health Care Services Inc. (Interlink) and Lakeland Health Care Services Inc. (Lakeland), among others, to fraudulently bill Medicare for home health services supposedly rendered to hundreds of Medicare beneficiaries living in and around Hammond and New Orleans.
Medicare records reveal that Murray’s certifications were used by Interlink and Lakeland to bill Medicare for more than $2.2 million in home health services that were not medically needed or were not provided. From 2007 through 2014, these companies and other companies involved in this scheme submitted more than $56 million in claims to Medicare, a vast majority of which were fraudulent. Medicare paid approximately $50.7 million on these claims.
This case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Medicaid Fraud Control Unit, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana. This case was prosecuted by Trial Attorneys William Kanellis and Antonio Pozos and Assistant Chief Ben Curtis of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.justice.gov/criminal-fraud/health-care-fraud-unit.
Lithia Georgia Man Pleads Guilty to Possession of Counterfeit SecuritiesRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that TORY DERREL LARKINS, age 30, of Lithia, Georgia, pled guilty to POSSESSION OF COUNTERFEIT SECURITIES, in violation of Title 18, United States Code, Section 513(a), punishable by not more than 10 years imprisonment, a fine of up to $250,000.00 or both.
The charge arose from an investigation by the Oklahoma Highway Patrol and the United States Secret Service.
The Indictment alleges that on or about October 9, 2014, within the Eastern District of Oklahoma, TORY DERREL LARKINS, defendant herein, knowingly possessed counterfeit securities, to wit: counterfeit checks purported to be genuine checks of MTW Creations, LLC, drawn on an account at Bank of America, an organization which operates in interstate commerce, with intent to deceive another.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Chris Wilson represented the United States.
Leader of Philadelphia to Morgantown heroin and oxycodone trafficking scheme convictedRead the Press Release
CLARKSBURG, WEST VIRGINIA – Juwan Robert Woods, 32, of Philadelphia, Pennsylvania, was convicted in federal court today for his role in a Philadelphia to Morgantown heroin and painkiller distribution ring, United States Attorney William J. Ihlenfeld, II, announced.
Woods, also known as “Whiz,” helped to orchestrate the drug distribution operation designed to transport large quantities of heroin and prescription painkillers across state lines from Pennsylvania into West Virginia for redistribution and sale. Woods, along with twenty other individuals, was originally charged in a 65-count federal indictment in November 2014. He pled guilty today to a criminal Information charging him with one count of “Aiding and Abetting the Distribution of Oxycodone within 1000’ of Protected Location.” He faces between one and forty years in prison and a fine of up to $2,000,000.00 for selling oxycodone in May 2014 near the Wiles Hill Playground in Morgantown.
Another co-defendant in the drug distribution scheme, Tara Dustin, 23, of Morgantown, pled guilty today to one count of “Distribution of Oxycodone.” She faces up to 20 years in prison and a fine of up to $1,000,000.00 for selling oxycodone in Monongalia County, West Virginia in May 2014.
Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorney Zelda Wesley prosecuted the cases on behalf of the government. The West Virginia State Police Bureau of Criminal Investigation, the Federal Bureau of Investigations, the Mon Valley Drug and Violent Crime Task Force, and the Morgantown Police Department investigated.
U.S. Magistrate Judge John S. Kaull presided.
Jury Convicts Hilliard Man for Role in Cocaine Distribution RingRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted Osvaldo Ortega-Amaya, 29, of Hilliard, Ohio, of conspiracy to possess with intent to distribute and possession with intent to distribute 500 grams or more of cocaine.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA) and Franklin County Sheriff Zach Scott, which was returned following a trial that began on April 20 before U.S. District Judge Gregory L. Frost.
According to court testimony, agents obtained baggies with cocaine residue during a trash retrieval at a Galloway, Ohio residence in December 2014 and January 2015. When law enforcement officials executed a search warrant at the Galloway residence they located approximately 1,100 grams of cocaine, multiple firearms and a large sum of U.S. currency.
Further surveillance led investigators to a residence in Hilliard, Ohio, where Ortega-Amaya resided and stored cocaine for the trafficking ring. There, agents found approximately 594 grams of cocaine, which was hidden in a closet with baby clothes in the residence, several hours after conducting a controlled purchase of another 500+ grams earlier the same day.
The jury convicted Ortega-Amaya of one count of conspiracy to possess with intent to distribute and one count of possession with intent to distribute 500 grams or more of cocaine. Both crimes are punishable by up to 40 years in prison and a $5 million fine.
Ortega-Amaya was indicted by a grand jury on March 5, 2015, charging him and co-defendant Ezequiel Bonilla-Berrios in a two-count indictment. Bonilla-Berrios was not tried in this proceeding.
Stewart commended the cooperative investigation by the DEA and Franklin County Sheriff’s Office, as well as Assistant United States Attorney Mike Hunter and Special Assistant United States Attorney Brian Martinez, who prosecuted the case.
Johnny J.S. Quenga Sentenced to 12 Months PrisonRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that JOHNNY J.S. QUENGA, age 38, of Agat, was sentenced today to 12 months imprisonment, two years supervised release and 200 hours community service before Chief Judge Frances Tydingco-Gatewood, in the District Court of Guam.
Defendant pled guilty to an Information charging him with Conspiracy to Distribute Ice. QUENGA is a co-defendant in U.S. v. Francisco Arias, et.al. The case involved Defendant Arias and Defendant Cortez-Zelaya sending ice to various individuals in Guam. QUENGA received a reduced sentence because he cooperated with the Government.
U.S. Attorney Limtiaco stated, “Our community is not immune from the poison of methamphetamine. This case illustrates the hard work our partners in law enforcement do every day to stop the distribution of methamphetamine into Guam.” This conviction resulted from the concerted efforts of law enforcement partners in the OCDETF investigation, a focused multi- agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
This OCDETF investigation involved federal agents and local law enforcement officers of the U.S. Postal Inspection Service (USPIS), Drug Enforcement Administration (DEA), U.S. Department of Homeland Security Investigations (HSI), Guam Police Department (GPD), Guam Customs and Quarantine Agency (GCQA), Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. National Oceanic Atmosphere Administration (NOAA), and U.S. Coast Guard Criminal Investigative Service (CGIS). The case was prosecuted by Assistant U.S. Attorney Clyde Lemons, Jr.
Indictment Unsealed Charging Shawnee Man for Embezzling from the Citizen Pottawatomie NationRead the Press Release
Oklahoma City, Oklahoma – A federal grand jury indictment was unsealed today charging THOMAS BIERD, 35, from Shawnee, Oklahoma, with embezzlement from the Citizen Pottawatomie Nation, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The Citizen Pottawatomie Nation's included the Community Development Corporation (CDC), which promoted economic development in the Native American community by providing business loans and grants to companies owned by or which primarily employed members of Federally-recognized Indian tribes. Kristi Bias (a/k/a Kristi Coker), 41, from Shawnee, was employed as the Executive Director of the CDC. The indictment alleges that between December, 2010, and September, 2011, Bias and Bierd aided and abetted each other by devising a scheme to embezzle funds from the CDC. Specifically, it is alleged that in her capacity as Executive Director, Bias would cause a check to be issued by the CDC to an entity controlled by Bierd or to an individual specified by Bierd. Bias, it is alleged, would cause false documentation to be placed in the CDC’s file, making it appear that the checks were for the legitimate purposes of the CDC when in fact they were not, and Bierd would kick back a portion of the check proceeds to Bias.
If convicted, Bierd faces up to five years in prison, a $250,000 fine, and payment of restitution to the Tribe. The public is reminded that an indictment is only a charge and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Bierd was arrested earlier today and appeared this afternoon in federal court. He was released on bond and the Court set the trial date for June of 2015.
In a separate case, Kristi Bias was charged on November 7, 2014, and pled guilty to embezzlement from the Tribe on November 25, 2014. She is awaiting sentencing where she also faces up to five years in prison, a $250,000 fine, and payment of restitution to the Tribe.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Tim Ogilvie.
Hitachi Automotive Sales Executive Pleads Guilty to Participating in Auto Parts Price-Fixing ConspiracyRead the Press Release
An executive of Hitachi Automotive Systems Ltd. pleaded guilty today and was sentenced to serve 15 months in a U.S. prison for his role in a global conspiracy to suppress and eliminate competition for certain automotive parts sold in the United States, the Department of Justice announced today.
Takashi Toyokuni, a former manager and director with responsibility over alternators and starters at Hitachi Automotive Systems Ltd. pleaded guilty today in the U.S. District Court of the Eastern District of Michigan to a one count charge of bid rigging and price fixing. As part of his plea agreement, Toyokuni also agreed to cooperate with the department’s ongoing investigation and pay a $20,000 criminal fine.
On Sept. 18, 2014, a federal grand jury in Detroit, Michigan, returned an indictment against Toyokuni, charging him with conspiring to allocate the supply of, rig bids for, and fix, stabilize and maintain the prices of, various automotive parts, including starter motors, alternators, air flow meters, valve timing control devices, fuel injection systems, electronic throttle bodies, ignition coils and inverters and/or motor generators, sold to automobile manufacturers in the United States and elsewhere. The automotive manufacturers included, depending on the product, Ford Motor Co., General Motors LLC, Nissan Motor Co. Ltd., Toyota Motor Corp. and Honda Motor Co. Ltd., and certain of their subsidiaries.
According to the indictment, Toyokuni and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and communications to coordinate bids submitted to the automobile manufacturers. The indictment charged Toyokuni with participating in the conspiracy beginning at least as early as January 2000 until at least February 2010.
“The defendant today accepted responsibility for his role in creating anticompetitive agreements in the automotive industry that undermined the marketplace and harmed U.S. businesses and consumers,” said Deputy Assistant Attorney General Brent Snyder of the Antitrust Division’s criminal enforcement program. “As a result of the many companies and individuals who have accepted responsibility during this investigation, we are transforming a critical industry into a competitive marketplace, which will greatly benefit U.S. consumers.”
Hitachi Automotive Systems Ltd. is a manufacturer of starter motors, alternators, air flow meters, valve timing control devices, fuel injection systems, electronic throttle bodies, ignition coils, inverters and motor generators and was engaged in the sale of these products in the United States and elsewhere. On Nov. 6, 2013, Hitachi Automotive Systems Ltd., pleaded guilty for its involvement in the conspiracy and was sentenced to pay a criminal fine of $195 million.
Toyokuni is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Toyokuni, 52 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing, and bid rigging in the auto parts industry. Additionally, 34 companies pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.4 billion in fines.
Today’s guilty plea arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s pleas are the result of the work of the Division’s Washington Criminal I Section, and special agents of the FBI’s Detroit Field Office. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Detroit Field Office at 313-965-2323.
Toyokuni Plea Agreement
Hillsville Man Arrested on Federal Bank Fraud ChargeRead the Press Release
ABINGDON, VIRGINIA – A Hillsville, Va. accountant and bookkeeper has been arrested on a Federal criminal complaint.
Robert Donald Morgan, III, 43, of Hillsville, Va., was arrested yesterday, April 22, 2015, on a federal criminal complaint charging him with one count of bank fraud, alleging that he knowingly executed a scheme to obtain money for which he was not entitled by fraudulent pretenses, representations or promises.
The investigation of the case was conducted by the United States Secret Service, the Virginia State Police, the Carroll County Sheriff’s Office and the United States Marshals Service. Assistant United States Attorney Jennifer Bockhorst will prosecute the case for the United States.
A criminal complaint is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Harrisburg Man Sentenced to Prison for Conspiracy to Defraud the IRS of Approximately $1 Million in Employment TaxesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Vanny Son, age 33, Harrisburg, Pennsylvania, was sentenced today by U.S. District Court Judge John E. Jones III to 37 months imprisonment to be followed by three years supervised release, and restitution to the IRS in the amount of $682,897, for a conspiracy to defraud the IRS of approximately $1 million in employment taxes between 2006 and 2012.
According to U.S. Attorney Peter Smith, Son operated five employee leasing companies which supplied day laborers to several businesses in the Harrisburg area.
The employee leasing companies were known as V&S Services, Industrial Labor Services, Advance Labor Services, HD Staffing Services and TD Staffing. Between 2006 and 2012, these five businesses paid cash wages of more than $7 million to their employees without withholding any employment taxes, such as social security and Medicare taxes. As a result, approximately $1 million in employment taxes were not collected and paid to the IRS, as required by federal law.
Son was indicted by a grand jury on July 10, 2014 along with Son Thach and Hung Danh, also of Harrisburg. Thach and Danh helped Son operate the employee leasing companies. Thach was previously sentenced to serve one month imprisonment with two years supervised release and pay $682,897 in restitution. Danh remains a fugitive.
Son was ordered to report to the Bureau of Prisons on May 22, 2015 to commence serving his sentence.
The case was investigated by the Criminal Investigation Division of the IRS. Assistant U.S. Attorney Bruce Brandler prosecuted the case.
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Ft. Hood Mom Pleads Guilty to Injury to a Child by OmissionRead the Press Release
In Waco, a 27-year-old mother living on Fort Hood pleaded guilty this afternoon to injury to a child by omission, announced Acting United States Attorney Richard L. Durbin, Jr. and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division
Appearing before United States District Judge Walter Smith, Sr., Andrea Tubbs admitted that she failed to care for, support and protect her 10-and-a-half-week-old child. According to court records, Tubbs gave birth to a child in September 2013. The child, born prematurely at 32 weeks, was hospitalized for approximately one month after birth in a Neo-natal Intensive Care Unit. On November 29, 2013, Tubbs and the infant’s father, U.S. Army soldier Richard A. White, Jr., dropped the child off with a relative of Tubbs. The relative noticed bruising on the child’s forearms consistent with finger marks as if someone had squeezed the infant too tightly. The relative pointed this out to Tubbs and White the next day when they picked up the child.
Court records also reveal that on December 16, 2013, Tubbs and White took their child to McLane’s Children Hospital, Scott and White, Emergency Room, located in Temple, for a respiratory problem. During treatment, a chest x-ray revealed that the child suffered from multiple bilateral rib fractures in various stages of healing--all were the result of non-accidental trauma. Further investigation by the medical staff revealed a corner fracture to the child’s right humerus, also the result of non-accidental trauma. The corner fracture was no older than seven days. Some of the rib fractures were from seven to ten days old. The remaining rib fractures were from ten to fourteen days old.
After having been previously put on notice by Tubb’s relative, the defendant’s failure to care for, to support and to protect her child from the non-accidental trauma inflicted on its ribs and from the non-accidental trauma inflicted upon its humerus, constitute reckless omissions under Texas law. That is, her failure to act to protect her child caused the described injuries.
Both Tubbs and White have remained in federal custody since their arrest in October 2014. The child has been placed in the custody of relatives. Tubbs, who faces up to two years in federal prison, is scheduled for sentencing on June 17, 2015, before Judge Smith in Waco. White is awaiting jury selection and trial which is scheduled for May 11, 2015. He is charged by a federal grand jury indictment with two counts of injury to a child by omission and two counts of endangering a child by omission.
This case resulted from an investigation by the Federal Bureau of Investigation together with the U.S. Army Criminal Investigation Division and is being prosecuted by Assistant United States Attorneys Mary Kucera and Mark Frazier.
Four Richmond County People SentencedRead the Press Release
GREENSBORO, N.C. – Four Richmond County people were sentenced on April 22, 2015 according to Ripley Rand , United States Attorney for the Middle District of North Carolina.
The four, Larry Shane King, John Monroe Wilson, Lisa Raines Tingle, and Richard Allen Mabe were sentenced by Senior United States District Court Judge James A. Beaty, Jr. A fifth co-defendant, Michael Anthony Treece will be sentenced on May 15, 2015.
The five were involved manufacture, distribution, and use of methamphetamine since sometime in 2013 until late 2014, in Richmond County, North Carolina.
Larry Shane King, 37, Ellerbe, NC was indicted on November 25, 2014 and pleaded guilty on January 22, 2015 to conspiracy to manufacture quantities of methamphetamine. He was sentenced to 151 months in prison, 3 years supervised release and a $100.00 special assessment.
John Monroe Wilson, 35, Ellerbe, NC was indicted on November 25, 2014 and pleaded guilty on January 22, 2015 to conspiracy to manufacture quantities of methamphetamine. He was sentenced to 144 months in prison, 3 years supervised release and a $100.00 special assessment.
Richard Allen Mabe, 50, Ellerbe, NC was indicted on November 25, 2014 and pleaded guilty on January 22, 2015 to conspiracy to manufacture quantities of methamphetamine. He was sentenced to 51 months in prison, 3 years supervised release and a $100.00 special assessment.
Lisa Raines Tingle, 52, Ellerbe, NC was indicted on November 25, 2014 and pleaded guilty on January 22, 2015 to guilty to conspiracy to possess pseudoephedrine, a list I chemical, knowing and having reasonable cause to believe that it would be used to manufacture methamphetamine Se was sentenced to 48 months in prison, 3 years supervised release and a $100.00 special assessment.
The case was investigated by the Richmond County Sheriff’s Office, North Carolina State Bureau of Investigation and by North Carolina Wildlife Resources Commission. The case was prosecuted by Assistant United States Attorney Clifton Barrett.
Docket Number: 1:14CR454
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Former Symantec Marketing Director Sentenced to Three Year Prison Term on Embezzlement ChargesRead the Press Release
SAN JOSE – Lena “Mickey” Jacobs Coombs was sentenced yesterday to 36 months in prison on wire fraud charges related to her embezzlement of money from her former employer, Symantec, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
Coombs, 48, of Highland, Utah, pleaded guilty on December 16, 2014, to one count of wire fraud. From January 2010 through April 2012, she was employed by Symantec as a Director of Marketing and worked at Symantec’s Lindon, Utah facility outside of Salt Lake City. Coombs admitted in her plea agreement that between January 2010 and May 2012, she used various methods to embezzle a total of over $1.137 million from Symantec. For example, Coombs charged personal and other unauthorized expenses on Symantec American Express Cards and then knowingly submitted fraudulent expense reports to disguise these charges as legitimate business expenses. Coombs also submitted fraudulent invoices falsely claiming that a shell company she had created had done marketing work for Symantec. Coombs then diverted the payments on those fraudulent invoices for her personal use. Coombs further admitted that she spent these embezzled Symantec funds on various personal expenses such as such as trips to Hawaii and the 2012 Super Bowl in Indianapolis, concerts, a home remodel, automobile payments, and a personal nanny. Coombs was indicted by a federal grand jury on June 11, 2014, on wire fraud and money laundering charges in violation of 18 U.S.C. § 1343 and 18 U.S.C. § 1957(a).
The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge, following a guilty plea of one count of wire fraud. Judge Koh also sentenced Coombs to serve a three-year period of supervised release and ordered her to pay restitution in the amount of $915,412.71. Judge Koh ordered Coombs to self-surrender by July 6, 2015, at which time the defendant will begin serving her sentence.
Assistant U.S. Attorney Joseph Fazioli is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Former Studio Assistant to Jasper Johns Sentenced in Manhattan Federal Court to 18 Months in Prison for Scheme to Sell Millions of Dollars of Stolen Johns WorksRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that JAMES MEYER, a former assistant to artist Jasper Johns, was sentenced in Manhattan federal court to 18 months in prison for his role the sale of 37 works that MEYER stole from Johns’s studio in Sharon, Connecticut. MEYER pled guilty on August 27, 2014, to one count of interstate transportation of stolen goods. MEYER was sentenced by U.S. District Judge J. Paul Oetken.
Manhattan U.S. Attorney Preet Bharara said: “James Meyer betrayed the trust of his employer, Jasper Johns, by selling, for his own personal gain, works by the artist that were not authorized for sale. Thanks to the hard work of the career prosecutors in my office and the FBI, Meyer’s fraud was uncovered and he will now go to prison for his actions.”
According to the Indictment, plea allocution, statements made at today’s sentencing proceeding, and other documents filed in Manhattan federal court:
MEYER was a studio assistant for Johns for over 25 years, and was responsible for, among other things, maintaining a studio file drawer containing pieces of art that were not yet completed by Johns and not authorized by Johns to be placed in the art market.
During his period of employment for Johns, MEYER removed 83 individual pieces of art from the studio file drawer he was responsible for maintaining, and from elsewhere in Johns’s studio. Between September 2006 and February 2012, MEYER transported more than half of those pieces to an art gallery in Manhattan for the purpose of selling those works without Johns’s knowledge or permission. MEYER represented both to the owner of the gallery (the “Gallery Owner”) and to potential purchasers that these pieces had been given to him as gifts by Johns when, in fact, that was not true.
As part of his scheme, MEYER provided sworn, notarized certifications stating that each piece was an authentic Johns work, that the art had been given to him directly by Johns, that he was the rightful owner of the piece, and that he had the right to sell that particular work. In addition, MEYER conditioned the sale of each of these works on the signed agreement by the purchaser that the art would be kept private for at least eight years, during which time the piece would not be loaned, exhibited, or re-sold.
MEYER also created fictitious inventory numbers for these pieces to give the impression that they were finished works that were authorized by Johns to be sold in the art market. Additionally, to facilitate certain sales, MEYER created fake pages that he inserted into a ledger book of registered pieces of art maintained at Johns’s studio, and which he subsequently photographed, to give additional assurances to prospective buyers about the provenance, or history of ownership, of a particular piece.
During the course of the almost six-year scheme, the Gallery Owner sold 37 works of art on MEYER’s behalf for a total of approximately $10 million, of which approximately $4 million was remitted directly to MEYER.
MEYER, 53, of Salisbury, Connecticut, was also sentenced to two years of supervised release, forfeiture in the amount of $3,992,500, restitution in the amount of $13,455,719, and was ordered to pay a $100 special assessment.
Mr. Bharara praised the outstanding investigative work of the FBI.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Daniel B. Tehrani and Christopher D. Frey are in charge of the prosecution.
Former Prison Guard Sentenced to 3 Years for Identity Theft of Inmates for Purposes of Filing Illegal Tax ReturnsRead the Press Release
CHICAGO — a former Miami Dade County Department of Corrections and Rehabilitation prison guard was sentenced today to 36 months in federal prison by U.S. District Court Judge Charles R. Norgle for his role in a scheme involving theft of prison inmates’ identities which were used to file false tax returns.
The defendant, CORNELIUS CRUMITY, pleaded guilty in May 2014, to one count each of aggravated identity theft and mail fraud in a two-count information, admitting that beginning in January 2008 and continuing through April 2011, he stole at least 50 inmate identities and filed fraudulent federal income taxes, attempting to cause the IRS to issue refunds in amounts totaling approximately $356,000. As a result of his conduct, the defendant caused the United States Treasury to suffer loss of at least $55,888. Judge Norgle also imposed a period of one year supervision after his release. Crumity has been ordered to report to the Bureau of Prisons on July 1, 2015.
Crumity, 39, of Pembroke Pines, Florida, was employed by the Miami-Dade County Department of Corrections and Rehabilitation (the “MDCDC”) as a prison guard. In that position, defendant had access to MDCDC databases and records which included the personal information of inmates, such as names and social security numbers. At various times, without the knowledge or authority of the MDCDC, the defendant accessed and copied the names and social security numbers of inmates who were incarcerated by the MDCDC, and used their names and social security numbers to file false and fraudulent tax returns with the Internal Revenue Service. Crumity filed the false and fraudulent tax returns without the knowledge or authorization of the inmates whose personal identifying information he had obtained from the MDCDC.
When preparing and filing the fraudulent tax returns, Crumity knowingly included false and fabricated W-2s, and false employer, wage and withholding information designed to result in significant tax withholding refunds to the purported filers, generally between $5,600 and $6,100 per return. In addition, he provided false home addresses for the purported filers, where defendant or his co-schemer in Illinois, David Mobley, received mail. In addition, in some instances, defendant caused the United States Treasury to credit the fraudulent tax withholding refunds to debit cards possessed by him or Mobley. After the defendant received the fraudulently issued refunds, he used the funds to his own benefit.
“Few crimes cause greater harm to society than law enforcement corruption,” stated Assistant U.S. Attorney Brian Hayes in the Government’s Sentencing Memorandum. “These ill effects are compounded when committed in a correctional institution, sending a message to inmates that directly contradicts the government’s goals of rehabilitation and reform.”
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Tony Gomez, Postal Inspector in Charge of the U.S. Postal Inspection Service, Chicago; and Stephen Boyd, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.
The government was represented by Assistant U.S. Attorney Brian Hayes.
Former Office Manager Pleads Guilty to Embezzling More Than a Half-Million Dollars from EmployerRead the Press Release
ROME, Ga. - Judy Elaine Henry has pleaded guilty to wire fraud charges arising out of her theft of more than $500,000 from her former employer, Bec-Don, Inc., a company that supplies concrete reinforcing steel and related products to the construction industry.
“This defendant abused her employer’s trust by stealing money from the company account for nearly eight years, ultimately more than $500,000,” said Acting U.S. Attorney John Horn. “Businesses have the right to expect honest services from their employees, but they should nonetheless be vigilant and adopt protocols to safeguard against internal fraud.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The guilty plea of Ms. Henry concludes the federal investigation into her eight years of embezzling from her employer. The loss amounts in this case are significant as well as her breach of trust to those who counted on her to help oversee company funds.”
According to Acting U.S. Attorney Horn, the charges and other information presented in court: Henry was the manager of Bec-Don’s office in Ringgold, Georgia, and was authorized to sign checks on Bec-Don’s account. From approximately 2006 through 2014, Henry embezzled more than $500,000 in company funds by writing checks payable to herself on Bec-Don’s account, and by making false entries in Bec-Don’s checkbook and accounting records to make it appear that the checks had been issued to pay legitimate company expenses. Henry deposited some of the fraudulent checks into her personal account and then used her debit card to spend the stolen money.
Henry, 50, of Lafayette, Georgia, pleaded guilty before U.S. District Court Judge Harold L. Murphy. Sentencing for Henry will be July 10, 2015, at 1:30 p.m.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Russell Phillips is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao-ndga.
Former North Tonawanda Resident Pleads Guilty to Pharmacy RobberyRead 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 Phillip A. Krehan, 32, currently of Addison, Maine and formerly of North Tonawanda, NY, pleaded guilty to pharmacy robbery before U.S. Magistrate Judge Leslie G. Foschio. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that on May 9, 2013, Krehan walked into the Walgreens Pharmacy at 1066 Payne Avenue in North Tonawanda and threatened a pharmacy employee while demanding fentanyl patches and Opana tablets, which were then given to the defendant.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division and the North Tonawanda Police Department, under the direction of Chief William Hall.
Sentencing will be scheduled at a later date before Senior U.S. District Judge William M. Skretny.
Former Ironworkers Business Agent Gets Eight Year SentenceRead the Press Release
PHILADELPHIA- Edward Sweeney, 56, of Philadelphia, was sentenced today to 96 months in prison for his role in the RICO conspiracy involving members of Ironworkers Local 401. Sweeney pleaded guilty on September 30, 2014 to RICO conspiracy, maliciously damaging property by means of fire, use of fire to commit a felony, maliciously damaging property by means of fire, conspiracy to maliciously damage property by means of fire, and attempted maliciously damaging property by means of fire. U.S. District Court Judge Michael Baylson also ordered restitution of $217,000, three years of supervised release, and a $600 special assessment.
Sweeney was a business agent for the Ironworkers Local 401 when he participated in a series of incidents as part of a plan to force non-union contractors to hire union labor. He participated in 10 incidents of extortion or attempted extortion and was involved in the Quaker Meetinghouse arson, an arson on Grays Avenue in Philadelphia, and an attempted arson in Malvern, all of which were in retaliation for contractors’ failure to hire union ironworkers. Sweeney is the 9th defendant to be sentenced in the case.
The case was investigated jointly by the Federal Bureau of Investigation and Department of Labor Office of Inspector General, with assistance provided by the Philadelphia Police Department Corruption Task Force, East Whiteland Township Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Employee Benefit Security Administration. It is being prosecuted by Assistant United States Attorney Robert Livermore with legal assistance provided by Gerald Toner, Acting Deputy Chief for Labor-Management Racketeering, Organized Crime and Gang Section at the Department of Justice.
Former District Attorney Walter P. Reed and His Son, Steven P. Reed, Charged by Federal Grand Jury in Eighteen Count IndictmentRead the Press Release
U.S. Attorney Kenneth A. Polite announced that former District Attorney for the 22nd Judicial District, WALTER P. REED, age 68, and STEVEN P. REED, age 43, both from Covington, were charged with offenses related to their involvement in a conspiracy to commit wire fraud and money laundering related to the misuse of funds from WALTER P. REED’S campaign account. Additionally, WALTER P. REED was charged with wire fraud for his personal misuse of campaign funds, mail fraud based on his diverting into his personal accounts funds from St. Tammany Parish Hospital that were intended for the Office of the District Attorney for the 22nd Judicial District, and filing false tax returns.
According to the Indictment, WALTER P. REED and STEVEN P. REED devised a scheme to defraud the Walter Reed Campaign and contributors to the Walter Reed Campaign by using donations to WALTER P. REED’S campaign to pay for goods and services either unrelated to the campaign or in an amount that grossly exceeded the value of the services provided.
The Indictment alleges that WALTER P. REED caused a series of payments to be made from the Campaign Fund to STEVEN P. REED’s companies in order to pay down a loan on which WALTER P. REED was a cosigner for services that either were not provided or whose value was substantially less than the amount paid. For example, WALTER P. REED caused, STEVEN P. REED’S company, Globop, to be paid approximately $8,352.64 for producing a housewarming party at WALTER P. REED’S new condominium in April 2012 that was unrelated to WALTER P. REED’S campaign. Similarly, STEVEN P. REED’s company, Liquid Bread LLC, received $29,400 from the Campaign Fund account for purportedly providing catering or bar services at a campaign event at the Castine Center in September 2012 that STEVEN P. REED did not actually provide. WALTER P. REED also required two companies that provided services at the September 2012 event to kickback a portion of their payments to STEVEN P. REED as a means to funnel campaign monies to him.
WALTER P. REED also paid for numerous other personal expenses unrelated to his campaign out of his Campaign Fund, including flowers with an accompanying message that stated, “[T]o my rodeo girl from a secret admirer from Camp J,” $1,885.36 for a Thanksgiving Day dinner for REED and approximately ten other members of his family and a $500 gift card for his future personal use, and $2,635.00 to a North shore steakhouse for a dinner he hosted for “Pentecostal Preachers” for the purpose of recruiting clients to refer him private civil legal work. Subsequently, REED also sought, and received, a reimbursement for the $2,635.00 dinner from the law firm with which he was affiliated, which he did not then put back into his Campaign Fund. In total, WALTER P. REED, spent at least $100,000 from the Walter Reed Campaign Fund bank account on personal expenses in this manner, including to recruit potential clients for his private legal practice, to pay off various expenses incurred by his son, STEVEN P. REED, and to pay for private and personal dinners.
The Indictment also alleges that WALTER P. REED diverted money paid by St. Tammany Parish Hospital for work performed by the Office of the District Attorney to his personal bank account. Specifically, between about 1994 and 2014, St. Tammany Parish Hospital retained the services of the Office of the District Attorney to advise it on various matters, for which it agreed to pay between $25,000 and $30,000 per year. REED attended some of the monthly meetings, though on dozens of occasions he directed Assistant District Attorneys to attend. Notwithstanding REED’s use of resources and personnel of his office, REED deposited into his own personal bank account each check provided by St. Tammany Parish Hospital that were intended for the Office of the District Attorney.
If convicted, WALTER P. REED faces up to 277 years in prison, followed by up to a three (3) year term of supervised release, and up to a $ 4,500,000 fine. STEVEN P. REED faces up to 65 years in prison, followed by up to a three (3) year term of supervised release, and up to a $1,000,000 fine.
United States Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation for investigating this matter and thanked the Metropolitan Crime Commission for their assistance. The prosecution of this case is being handled by Assistant United States Attorney Jordan Ginsberg and First Assistant United States Attorney Richard Westling.
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Former Corrections Officer Pleads Guilty to Smuggling Methamphetamine to Prison InmateRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that EUGENE JESUS MENO SUNEGA, age 33, of Sinajana, Guam pled guilty on April 23, 2015, in the U.S. District Court, before Chief Judge Frances Tydingco-Gatewood, to one count of Providing Contraband in Prison. SUNEGA was charged on March 4, 2015 by a federal grand jury in a four-count indictment with Conspiracy to Distribute Methamphetamine, Possession with Intent to Distribute Methamphetamine, Providing Contraband in Prison, and False Statement or Representation. Sentencing for SUNEGA is scheduled for July 27, 2015. The offense of Providing Contraband in Prison carries a statutory maximum sentence of 20 years in prison.
According to court documents, SUNEGA abused his position of trust as a Guam Department of Corrections Officer by attempting to smuggle contraband methamphetamine to prison inmate Gregorio Cruz. The methamphetamine weighed approximately 3.9 grams and was approximately 95.3% pure, according to forensic analysis. SUNEGA also lied to federal agents investigating the incident when he claimed to have never personally smoked methamphetamine.
This incident was discovered by Guam Department of Corrections officials. The federal case is the result of an investigation conducted by the DEA Guam Resident Office and the FBI Guam Resident Agency. Credit is also given to GPD’s Special Investigation Section and to the ATF. The prosecution was handled by Assistant U.S. Attorney Mohammad Khatib.
Former Cordele Resident and Recidivist Sentenced on Child Pornography ChargesRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Christopher B. Wilcox, aged 41, formerly of Cordele, Georgia, was sentenced to serve a mandatory minimum of ten years (120 months) imprisonment in federal prison for possession of child pornography, followed by 15 years of supervised release. He will also be required to register as a sex offender. The sentence was handed down by Senior U.S. District Court Judge W. Louis Sands on April 23, 2015 in Albany, Georgia.
Mr. Wilcox entered a guilty plea to the charge on December 15, 2014 in Albany, Georgia.
This is not Mr. Wilcox’s first offense involving child victims. At the time of the crime to which he pled guilty, Mr. Wilcox was on supervised release from a previous conviction in the United States District Court for the Middle District of Georgia for possession of child pornography in March, 2003, for which he received a sentence of 33 months in prison. He was also subsequently convicted of aggravated child abuse in Crisp County Superior Court in February 2005, for which he was on probation at the time of his latest offense. Mr. Wilcox is currently serving a 10 year parole revocation of his state sentence based on this new offense.
The current charges stem from a search done of the contents of Mr. Wilcox’s computer by the United States Probation Officer overseeing his supervised release for his 2003 conviction.
The lengthy sentence was a result of his two previous felony convictions.
“With the conviction and lengthy prison sentence of Mr. Wilcox, I am confident that we have taken a significant step to protect child victims. He is a repeat offender. Apparently the only place where we can be assured that he is not re-victimizing the child victims of pornography is in prison, so that is where he’ll spend the next decade,” said U.S. Attorney Michael Moore.
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI is pleased with the role that it played in further protecting the children of our community by getting such an individual as Mr. Wilcox off of our streets. The FBI will continue to aggressively identify and investigate such individuals who would exploit and prey on children through child pornography.”
The case was investigated by the Federal Bureau of Investigation, Albany. Assistant United States Attorney Jim Crane prosecuted the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Florida Man Admits to Extorting Philadelphia NightclubRead the Press Release
PHILADELPHIA - Mario Fresta, 37, of Cape Coral, Florida pleaded guilty today to one count of Hobbs Act extortion, announced United States Attorney Zane David Memeger. U.S. District Court Judge Berle M. Schiller scheduled a sentencing hearing for July 15, 2015.
Fresta was an associate of Dominic Verdi, a-then high ranking official in Philadelphia’s Department of Licenses and Inspections and Public Nuisance Task Force. Verdi had an ownership interest in a beer distributor named “Chappy’s Beer, Butts, and Bets.” Fresta, with or without Verdi’s knowledge, instructed O.N.E. Rittenhouse (“ONE”), a bar and nightclub, that if ONE bought its beer from Chappy’s and hired Fresta as a manager at a weekly rate of $400 in cash, Verdi would use his official position to benefit ONE. Even after Fresta ceased his employment at ONE, Fresta instructed the operators at ONE that ONE needed to continue paying the $400 weekly rate plus an additional $300 in cash kickbacks for Verdi and other L&I officials. Fresta informed the owners of ONE that the kickbacks were to protect ONE from suffering economic harm as a result of enforcement actions from L&I and the PTNF. At Fresta’s direction, one of the operators of ONE made approximately 39 cash deposits, totaling more than $19,900, as a result of Fresta’s claim that these payments were allegedly necessary in order to protect ONE from Verdi “shutting down” the establishment.
Fresta faces a maximum possible sentence of 20 years in prison, a $250,000 fine, three years supervised release and a $100 special assessment. The case was investigated by Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Joe Khan.
Final Defendant Sentenced to Serve 42 Months in Prison for Money Laundering in Connection with Federal Wireless Telephone Program SubsidiesRead the Press Release
Oklahoma City, Oklahoma –OSCAR ENRIQUE PEREZ-ZUMAETA, of Cancun, Mexico, was sentenced yesterday by United States District Judge Tim DeGiusti to serve 42 months in prison for money laundering in connection with the Federal Communication Commission’s Lifeline Program, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The current Lifeline Program, which was created in 1985, furthers the FCC’s mission to provide all Americans with access to a basic level of telephone service. Since 2005, Lifeline has provided subsidies to participating telephone companies not only for landline service, but also for wireless service for qualifying low-income customers. The Universal Service Administrative Company (“USAC”) administers the Lifeline Program on behalf of the FCC and under detailed federal regulations. To pay for the program, USAC collects fees from telephone companies, which often pass the fees on to customers as “universal service charges” on monthly telephone bills.
Most participating wireless telephone companies receive a subsidy of $9.25 per month for each qualifying low-income customer. If a qualifying customer lives on “Tribal Lands,” however, the company receives $34.25 per customer. Much of Oklahoma includes Tribal Lands that qualify for the higher monthly subsidy. Before receiving reimbursement, participating telephone companies file forms with the FCC that report the number of Lifeline eligible customers they have served. Companies must also file annual reports to certify that customers who received Lifeline service at an earlier date remain eligible for the program.
Icon Telecom, an Edmond company, was owned exclusively by Wes Yui Chew, also of Edmond. Icon participated in the wireless Lifeline Program from July 2011 until September 2013. An information filed on June 3, 2014, alleged that in September 2011, Icon reported fewer than 2,200 wireless customers who qualified for the Lifeline program. By November 2012, that number had grown to 135,364. The information explains that although it had fewer than ten full-time employees, Icon received a total of $58,283,329 through the Lifeline Program during 2011, 2012, and 2013.
Perez-Zumaeta owned and managed PSPS Sales LLC, a California entity that recruited low-income individuals to apply for Lifeline service through Icon. According to court records, Icon paid over one million dollars to PSPS Sales from December 2011 through April 2013. Perez-Zumaeta was charged with directing PSPS Sales workers to enroll fictitious customers for Icon by using phone book listings and forging Lifeline application forms. He also allegedly directed workers in Mexico to falsify approximately 40,000 Lifeline recertification forms for use in Icon’s fraudulent scheme.
On November 7, 2014, Perez-Zumaeta pled guilty to money laundering by depositing a $52,390.00 check from Icon into a bank account of PSPS Sales on December 7, 2012. He admitted that when he made that deposit, he knew that more than $10,000.00 of those funds was the result of criminal fraud against the FCC.
Perez-Zumaeta has been in federal custody since April 25, 2014, when he was arrested at the San Francisco airport. At his sentencing hearing yesterday, Judge DeGiusti ordered Perez-Zumaeta to serve 42 months in prison, followed by two years of supervised release.
Related Case
On June 12, 2014, Chew pled guilty to money laundering for his transfer of $20,455,829.10 on April 9, 2013, from an Icon account to a personal account. He admitted that when he made that transfer, he knew that Icon had tens of thousands fewer customers than it had reported to the FCC for the first three months of 2013. Also on June 12, 2014, as the sole owner of Icon, Chew also entered a guilty to plea on behalf of the company to knowingly making a false statement to the FCC on May 13, 2013. Chew admitted that in response to a USAC audit request, Icon intentionally fabricated customer recertification forms, which included fictitious signatures. As part of their plea, Chew and Icon agreed to the forfeiture of $20,542,740.73, which the United States seized on October 4, 2013, from a personal account at Ally Bank that belonged to Chew. They also agreed not to contest the forfeiture of $6,485,933.82 seized on October 7, 2013, from two Icon accounts at BancFirst.
On April 2, 2015, Judge DeGiusti ordered that Chew serve 48 months in federal prison, followed by three years of supervised release, and pay a fine of $117,166.48 (which is the anticipated cost of his federal imprisonment). Chew’s company, Icon Telecom, was sentenced to three years of probation. Chew and Icon agreed not to contest the forfeiture of more than $27 million seized during the investigation.
These cases are the result of an investigation by the Office of Inspector General for the Federal Communications Commission; the Federal Bureau of Investigation; and the Internal Revenue Service Criminal Investigation. These cases are being prosecuted by Assistant U.S. Attorneys Chris M. Stephens and Scott E. Williams.
Reference is made to the information and other public filings for further information
Federal grand jury indicts two Ferriday residents, Bossier City woman for Veterans Affairs benefits fraudRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a federal grand jury indicted a Ferriday couple for hiding income in order to receive more than $197,000 in veterans benefits and a Bossier City woman for stealing veterans’ benefits and lying about the income during bankruptcy proceedings.
Alfred Lewis Jr., 67, and Rose M. Lewis, 63, of both of Ferriday, La., were charged by a federal grand jury with one count of conspiracy to commit theft of government funds and one count of theft of government funds. According to the indictment, from January 2004 until November 2013 the Lewis couple conspired to take approximately $197,784 in Veterans Affairs benefits. In July of 2003, the defendants submitted an application to the Department of Veterans Affairs for pension benefits without listing Rose Lewis’ income. The addition of Rose Lewis’ income, which was more than $54,000 in 2008 and 2009, would have made them ineligible to receive the Veterans Affairs benefits.
A federal grand jury also charged Gloria Lynn Perry, 65, of Bossier City, La., in a separate indictment with one count of theft of government funds and one count of false statement in a bankruptcy matter. According to the indictment, Perry illegally received Veterans Affairs benefits on behalf of her mother from April 1, 2008 through July 1, 2014. Her mother had died in February of 2008. Perry also filed for bankruptcy in 2014. On September 5, 2014, she falsely stated on bankruptcy documents that her income other than employment in the past two years was $7,950 in 2013 and $5,967 in 2014. The truth was she obtained at least $12,000 in 2013 and at least $7,000 in 2014 in Veterans Affairs benefits.
If convicted, all three defendants face up to 10 years in prison for the theft count.
The Lewises face up to five years in prison for the conspiracy count, and Perry faces up to five years in prison for the bankruptcy count. They also face three years of supervised release, restitution and a $250,000 fine.
The Veterans Affairs-Office of Inspector General investigated the cases. Assistant U.S. Attorney Cytheria Jernigan is prosecuting the cases.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Federal Jury in Del Rio Convicts Carrizo Springs-Based Alien Smuggling Operation RingleaderRead the Press Release
In Del Rio today, a federal jury convicted 44–year-old Eduardo Rocha, Sr. (aka “Lalo”), for his leadership role in an undocumented alien smuggling ring operating in Carrizo Springs, TX, that tortured victims while waiting for ransom payments announced Acting United States Attorney Richard L. Durbin, Jr., Homeland Security Investigations (HSI) Special Agent in Charge James Spero and Dimmit County Sheriff Marion Boyd.
As a result of today’s verdict, Rocha faces up to 20 years in prison each for conspiracy to transport illegal aliens involving serious bodily injury and conspiracy to transport illegal aliens involving serious bodily injury; up to 20 years in prison on each of three separate counts of harboring an illegal alien involving serious bodily injury; and, up to life in prison on each of two counts of conspiracy to commit hostage taking. Sentencing is scheduled for October 14, 2015, at 2:00pm.
Evidence presented during trial revealed that Rocha, Sr. operated his smuggling cell between Carrizo Springs and Piedras Negras, Mexico since at least 2013. Rocha, Sr. claimed to be affiliated with Los Zetas, a trans-national Drug Trafficking Organization operating out of Mexico. Members of Rocha, Sr.’s cell had used buildings located at Rocha’s Carrizo Springs property to hold the illegal aliens before transport further into the United States. Witnesses testified that Rocha held the aliens against their will in an effort to extort more money from family members in the United States.
Evidence also revealed that Rocha ordered his accomplices to torture the illegal aliens being held captive in an effort to extort money. A female was raped multiple times, and family members were made to listen over the telephone as aliens were tortured with a hammer, and threatened with decapitation and mutilation. A family member in Virginia called 911, which prompted a rescue operation by Dimmit County Sherriff’s Deputies, Agents with Homeland Security Investigations, and U.S. Border Patrol on May 4, 2014.
Jurors also made a special finding in their verdict that the smuggling offenses each involved serious bodily injury. They also found that Rocha’s Carrizo Springs property should be forfeited to the United States.
Co-conspirators Atanacio Daniel Castro, Eduardo Rocha, Jr., Christopher Jones, Tara Cournoyer, and Esmeralda Cruz remain in federal custody. All have already pleaded guilty to federal conspiracy charges relating to their involvement in Rocha, Sr.’s smuggling operation and are awaiting sentencing.
This case was investigated by HSI agents out of Eagle Pass, TX, with the support of the Dimmit County Sheriff’s Office, U.S. Border Patrol, and the Texas Department of Public Safety criminal laboratory. The case was prosecuted by Assistant United States Attorneys Matthew Watters and Patrick Burke.
Federal Indictment Charges East Providence Resident with Conspiracy, Transportation of Minors and Sex Trafficking of MinorsRead the Press Release
PROVIDENCE, R.I. – A federal grand jury in Providence has returned a six-count indictment charging Reginald Chaney, a/k/a “Reggie”, 19, of East Providence, with conspiracy, sex trafficking of a child and transportation of a minor. It is alleged that Chaney conspired to recruit, transport and coerce two minor females to engage in commercial sex acts.
The indictment charges Chaney with conspiracy to commit sex trafficking of a child, conspiracy to transport a minor, and two counts each of sex trafficking of a child and transportation of a minor.
The indictment, returned on Wednesday, is announced by United States Attorney Peter F. Neronha; Rhode Island Attorney General Peter F. Kilmartin; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations for New England; Providence Police Chief Colonel Hugh T. Clements, Jr.; East Providence Police Chief Christopher J. Parella; and Seekonk, Mass., Police Chief Craig A. Mace.
According to information provided to the court previously, on or about January 18, 2015, Reginald Chaney met two young females, ages 15 and 16, and drove them to a residence in East Providence. It is alleged that at the direction of Chaney, photographs were taken of the victims for the purpose of being displayed on Backpage.com. Later that evening the victims were driven by Chaney to a motel in Seekonk, Mass., and the photographs were then posted on Backpage.com.
It is alleged that on several occasions between on or about January 18, 2015, and January 30, 2015, Chaney arranged for meetings between the victims and individuals who responded to advertisements on Backpage.com, offering the victims for the purposes of commercial sexual activity. The meetings allegedly occurred at motels in Seekonk, Mass., and at locations in Providence, Warwick, Charlestown and Narragansett.
Reginald Chaney was arrested in East Providence by East Providence Police on January 29, 2015, based on information developed during an investigation conducted by the Providence Police Department with assistance of Homeland Security Investigations. Chaney is currently being held in Rhode Island state custody as a superior court probation violator on a 5-year suspended sentence imposed on January 14, 2015, on a weapons charge.
An arraignment date in federal court on the indictment returned on Wednesday has not yet been scheduled. An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Conspiracy to commit sex trafficking of a child and sex trafficking by force or coercion of a child is punishable by statutory penalties of up to life in federal prison with a mandatory minimum term of 15 years and a fine of up to $250,000. Conspiracy to transport a minor and transportation of a minor are punishable by statutory penalties of up to life in federal prison with a mandatory minimum term of 10 years and a fine of up to $250,000.
The case is being prosecuted jointly in federal court by Assistant U.S. Attorney Pamela E. Chin and Assistant Rhode Island Attorney General Daniel Carr Guglielmo.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Federal Charges Filed Against Five Crews Involved in Violent Robberies Throughout Metro AreaRead the Press Release
HOUSTON - In an effort to stem the influx of violent crime in the Houston area, U.S. Attorney Kenneth Magidson announced the filing of five criminal complaints charging 22 defendants with either bank robbery or commercial robbery as well as various firearms charges. Magidson made the announcement along with Perrye K. Turner, special agent in charge of the FBI, and Robert Elder, special agent in charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), as well as various state and local authorities.
The charges in the five separate but similar cases represent a joint initiative aimed at reducing violent takeover robberies of local businesses by organized crews of armed robbers. The criminal complaints were filed April 20-22, 2015, as four of the defendants were taken into custody. An additional 17 defendants have been transferred from state custody to federal custody. Three of those defendants will make their initial appearances in federal court April 24, 2015, at 10:00 a.m. before U.S. Magistrate Judge Frances Stacy, while the remaining 14 are expected to appear April 27-28, 2015, before U.S. Magistrate Judge Stephen Smith. The last defendant remains a fugitive and a warrant remains outstanding for his arrest. Anyone with information about the whereabouts of Michael Cornelious, 25, is asked to contact the FBI at 713-693-5000.
In the first case, Cornelious, Kevin Wayne Viser, 37, Fareed Jerrell Barefield, 26, Carey Dion Mitchell, 24, Johnny Ray Jones, 38, and James Leonard Ferguson, 33, all of Houston, are charged with aiding and abetting bank robbery and aiding and abetting the use and carrying of a firearm during and in relation to a crime of violence. On Aug. 5, 2013, Jones and Ferguson allegedly entered the JP Morgan Chase Bank located at 2929 Shaver Street in Pasadena and ordered customers and employees to the floor at gun point and stole U.S. currency. The complaint filed in that case alleges that while Jones and Ferguson were in the bank, Viser, Barefield, Mitchell and Cornelious were outside conducting surveillance. Cornelious communicated with the suspects inside the bank through an open cell phone connection.
In the second unrelated case, Keith Deshawn Stephens, 27, Keon Kervin Jackson, 26, and Duquam Orlander Mathis, 21, all of Houston, are charged with aiding and abetting bank robbery and discharging a firearm during and in relation to a crime of violence. The criminal complaint alleges that on July 16, 2014, Mathis and Jackson entered the JP Morgan Chase Bank located at 6810 Fry Road in Katy and ordered customers and employees to the floor at gun point. They stole a large amount of U.S. currency, while one of them allegedly fired a shot into the bank’s ceiling to make sure no one followed when they exited. While Mathis and Jackson were in the bank, Stephens was outside of the bank conducting surveillance and communicating with Mathis and Jackson through an open cell phone connection.
The third criminal complaint announced today alleges Calvin Smith, 18, Rodney Ford, 18, Jamone Jones, 20, and Jerrol Bluford, 21, all of Houston, were part of a separate crew responsible for dozens of violent takeover robberies occurring in Harris County. All four men are charged with a federal offense known as the Hobbs Act, interference with commerce by robbery and using and carrying of a firearm during and in relation to a crime of violence. According to the charges, on Jan. 25, 2015, Smith, Ford, Jones and Bluford entered the Metro PCS store at 834 Little York Road #B in Houston. Two of the men were allegedly armed with handguns. Employees of the store were ordered at gunpoint to open the safe and registers in the business and a small amount of U.S. currency was stolen.
The fourth case involves the violent robbery or attempted robbery of three commercial businesses in the North Houston area. Jerrieus Williams, 30, Alonzo Flowers, 22 , Kye Rue, 22, Andre Coleman, 23, and Paul McCoy Jr., 23, all of Houston, are charged with Hobbs Act conspiracy to interfere with commerce by robbery and aiding and abetting the use and carrying of a firearm during and in relation to a crime of violence. On Jan. 14, 2015, Flowers, Coleman and McCoy allegedly entered Jet Pawn, a federal firearms licensee located at 6135 F.M. 2920 in Spring. They were armed with handguns. One of the store employees was ordered at gunpoint to open the safe, from which cash and a firearm were taken. Additionally, 25 guns were stolen from cases on the sales floor. While the robbery was in progress, Williams was across the street conducting surveillance and communicating through an open cell phone line with Coleman. Rue acted as the driver of the getaway car and was waiting outside of the store when the robbers exited.
These same defendants were also allegedly involved in the armed robbery of Cash America Pawn, located at 3211-B F.M. 1960 in Humble on Jan. 9, 2015. The day before the robbery, Williams and Rue cased the pawn store, while Williams and McCoy were identified as the actual robbers. McCoy allegedly held a gun to the head of the store manager and Rue acted as the getaway driver, according to the complaint. These defendants also allegedly attempted to rob the Mad Dog Smoke Shop at 966 West F.M. 1960 in Houston on Jan. 29, 2015. Flowers and Rue allegedly entered the smoke shop with guns and masks covering their faces. However, an employee of the business retrieved his firearm and shot at the suspects, at which time the suspects fell to the ground, but managed to escape before police could arrive. The suspects dropped a firearm, which was later identified as a firearm stolen from Jet Pawn, according to the allegations.
In the final case announced today, Keith Deshawn Stephens, 27, Zachary Loudd, 23, Jerrel James, 21, Andrew Holley, 22 and Crystal Lewis, 22, all of Houston, are charged with aiding and abetting bank robbery and aiding and abetting the use and carrying of a firearm during and in relation to a crime of Violence. On June 27, 2014, three defendants entered the JP Morgan Chase Bank located at 4755 W. Panther Creek in The Woodlands. They ordered customers and employees to the floor at gunpoint and stole a large amount of U.S. currency.
Those charged with aiding and abetting bank robbery face up to 25 years imprisonment, while the conspiracy to interfere with commerce by robbery or interference with commerce by robbery have maximum penalties of 20 years in federal prison. For those charged with aiding and abetting in the possession or using and carrying a firearm during and in relation to a crime of violence, they face a mandatory seven years in prison which must be served consecutively to the other sentence imposed. If convicted of the discharge of a firearm, those defendants face a mandatory 10-year consecutive sentence.All of the charges also carry as punishment a possible $250,000 fine.
The charges in the respective cases are the result of an investigation by the FBI and ATF along with sheriff’s offices in Harris, Montgomery and Fort Bend Counties, police departments in Houston and Pasadena, Texas Rangers and the Harris County District Attorney’s Office with the assistance of CrimeStoppers.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Federal and Local Law Enforcement Team up for Emphasis Operation in Downtown SeattleRead the Press Release
A four-month undercover law enforcement operation is culminating this week with state and federal arrests of more than 95 defendants whose drug dealing and related criminal activity has plagued downtown Seattle, announced Acting U.S. Attorney Annette L. Hayes. The Seattle Police Department, FBI, King County Prosecutors Office, and the U.S. Attorney’s Office are coordinating a strategy aimed at removing what has become an open air drug market at Pike/Pine and Third Avenue in downtown Seattle. Thirty-seven people have been indicted federally –primarily those drug dealers with the most serious criminal histories. The defendants will appear in U.S. District Court in Seattle over the next few days.
“This operation is about much more than locking up offenders. It is about taking back a key part of our city by addressing the range of factors that allowed it to become a one-stop shop for drugs,” said Acting U.S. Attorney Annette L. Hayes. “We are pleased to be working closely with the City and our federal and local law enforcement partners who all bring important tools to bear to this problem. In our case, we will be asking judges to ban these offenders from coming back to the Pike/Pine area and will hold those who do to account, so that we can return the area to everyone who lives, works and visits our great city.”
The detention motions filed in the federal cases detail the crime problem in the Pike/Pine corridor. In 2014, there were over ten thousand calls for police service in this area alone – an average of twenty-seven calls per day. Four of the seven most dangerous blocks in the entire city fall within this area, as measured by the number of violent crimes. For a three-year period beginning near the end of 2010, there were over 500 violent crimes that occurred on these blocks. Although not all of the violence is directly linked to the drug trade, the open drug market in the area has contributed to a sense of lawlessness, and appears to have brought a number of people to the area with serious criminal histories. Some of the violent incidents include: the March 2015 shooting of a man at 3rd and Pine resulting in serious injuries; the January 2015, shooting of a sixteen-year-old and a twenty-five-year old when more than a dozen shots were fired near Third Avenue and Pine Street; robberies and beatings of citizens in summer 2013; and the March 2013, injury to a twenty-three-year-old woman who was walking just outside of Pike Place Market and was hit by a stray bullet.
“The FBI partners regularly with the SPD Major Crimes Task Force in stopping individuals who violate the law and endanger our community,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle Division. “In this operation, it was our intent to make an immediate, positive impact on a drug market operating brazenly in the heart of our city.”
“The successful operations this week underscore the value of collaborative enforcement efforts with our Federal and regional partners,” said Chief Kathleen O’Toole. “We will continue our collective efforts to promote safe and healthy neighborhoods, Downtown and throughout the City.”
Defendants who have been charged federally sold a wide array of drugs in the Pike/Pine area. Undercover officers bought heroin, cocaine, methamphetamine, prescription drugs and marijuana from offenders whose criminal histories include convictions for attempted rape, robbery, burglary, assault, drug trafficking and illegal use and possession of firearms.
“Seattle residents and visitors should not be forced to navigate a dangerous open-air drug market between the downtown retail core and Pike Place Market,” said Mayor Murray. “Our comprehensive nine-and-a-half block strategy will help break the cycle of addiction by expanding LEAD diversions, while removing violent repeat offenders from our streets. My thanks to the men and women of Seattle Police Department, as well as our federal and local law enforcement partners, for their success in one of the largest criminal investigations in Seattle history.”
“Downtown Seattle is a regional jewel that belongs to all of us,” said King County Prosecutor Dan Satterberg. “Drug dealing, and the misery, violence and crime that follows in its wake, has no place in our downtown. We will shut it down with every tool we have.”
“Legalizing and regulating marijuana and using harm reduction tools to address hard drug addiction does not mean standing by as the heart of our downtown continues for years to house a large-scale, outdoor market for illegal drug sales,” said City Attorney Pete Holmes. “Smarter public policies on drugs never meant that we have to accept open-air drug markets. The approach we’re taking today is an effort to strike the balance necessary to enforce the law and clean up downtown without falling back into the wasteful and counterproductive cycle of the War on Drugs.”
This initiative is jointly led by the Seattle Police Department and the FBI. The federal cases are being prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods. The King County prosecutions are being coordinated by Senior Deputy Prosecutor Mary Barbosa.
Farmington Woman Pleads Guilty to Committing Wire Fraud to Facilitate Scheme to Defraud Insurance CompaniesRead the Press Release
ALBUQUERQUE – Michelle Smith, 33, of Farmington, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to committing wire fraud in furtherance of a scheme to defraud insurance companies. Under the terms of her plea agreement, Smith will be sentenced to a prison term within the range of 18 to 24 months. The plea agreement also provides for the entry of an order requiring Smith to pay restitution to the victims of her criminal conduct as well as the entry of a money judgment against Smith in the amount of $128,371.00, which represents a portion of the profit she derived from her criminal activity.
Smith was charged in Feb. 2014 in an indictment that included 14 counts of wire fraud and four counts of aggravated identity theft. The charges arose out of Smith’s scheme to defraud Allstate Workplace Division and American Heritage Life Insurance (Allstate) of approximately $224,000.00 in advance commissions by submitting fraudulent policy enrollments. At the time of the offenses charged in the indictment, Smith was employed by Wells Insurance Agencies (Wells), exclusive brokers for Allstate with offices in Farmington, as an insurance agent to sell Allstate insurance policies.
According to the indictment, Allstate paid its brokers a commission for each Allstate insurance policy the broker sold. When Allstate received a new policy enrollment, Allstate paid the broker an advance commission amounting to a percentage of six months’ work of premiums on the policy. If the enrollee canceled the policy or fails to pay premiums for six months, the broker was required to return the advance commission to Allstate. When Smith was employed by Wells, Wells paid Smith 70% of the advance commissions she generated by submitting Allstate insurance policy enrollments.
The indictment alleged that from Aug. 2009 through May 2010, Smith devised and engaged in a scheme to defraud Allstate and Wells by submitting fraudulent policy enrollments and obtaining advance commissions to which she was not entitled. During the ten month period, Smith submitted enrollments in the names of approximately 150 different enrollees for a total of approximately 505 Allstate insurance policy enrollments. The enrollment forms transmitted electronically to Allstate by Smith were in the names of individuals who had not purchased insurance from Allstate and had forged signatures. Between Nov. 2009 and April 2010, Smith received approximately $224,000.00 in advance commissions based on the fraudulent enrollments she submitted to Allstate.
Today Smith pled guilty to Count 13, a wire fraud charge, of the Indictment and admitted that between Nov. 2009 and April 2010, she devised a scheme to fraudulently obtain advance commission payments from Allstate and Wells. She further admitted facilitating the scheme by submitting 505 insurance policy enrollments to Allstate, all of which were fraudulent because none of the persons listed on the enrollment forms had agreed to purchase insurance policies from Allstate. Smith acknowledged that as a result of her fraudulent scheme, Allstate issued approximately $324,239.00 in advance commission payments and that she personally received at least $128,371.00 of those payments.
A sentencing hearing for Smith has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and is being prosecuted by Assistant U.S. Attorney Jeremy Peña.
FCI Gilmer inmate convicted, sentenced for unlawful possession of opioid medicationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jerry Gifford, 43, an inmate at the Federal Correctional Institution, Gilmer was convicted and sentenced today for unlawful possession of Buprenorphine, a narcotic medication, United States Attorney William J. Ihlenfeld, II, announced.
An investigation revealed that Gifford arranged to have Suboxone, an opioid medication used to treat addiction and dependence, shipped into the prison in letters addressed to a fellow inmate. He pled guilty today to one count of “Attempted Possession of a Prohibited Object (Buprenorphine).” He was sentenced to an additional six months in prison.
Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Federal Bureau of Prisons and the FCI Gilmer Special Investigative Services Unit investigated.
U.S. Magistrate Judge John S. Kaull presided.
Edwards County Woman Pleads Guilty to Bank Embezzlement ChargeRead the Press Release
Rachel J. Knasinski, 33, of West Salem, Illinois, pleaded guilty to bank embezzlement charges brought in an Information filed in United States District Court in Benton, Illinois, on April 22, 2015, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Knasinski admitted in her guilty plea that from November 2011, to on or about January 9, 2015, in Edwards County, Knasinski, being an employee of The First State Bank of West Salem, a bank whose deposits are insured by the Federal Deposit Insurance Corporation, with intent to injure and defraud The First State Bank of West Salem, did willfully embezzle the sum of over $300,000 of the moneys or funds intrusted to the custody or care of The First State Bank of West Salem.
Knasinski faces a possible penalty of up to 30 years imprisonment, up to $1,000,000 fine, and supervised release of up to 5 years at her sentencing, which has been set for August 4, 2015, in United States District Court in Benton, Illinois.
The investigation in this case was conducted by the Federal Bureau of Investigation.
The case is being handled by Assistant United States Attorney George Norwood.
District Court Enters Permanent Injunction to Prevent Chicago Company and Two Individuals from Distributing Adulterated Mung Beans and Soybean SproutsRead the Press Release
The U.S. District Court for the Northern District of Illinois entered a consent decree for permanent injunction against Wholesome Soy Products Inc., Julia Trinh and Paul Trinh to prevent them from distributing adulterated mung bean and soybean sprouts, the Department of Justice announced today.
The department filed a complaint in the U.S. District Court for the Northern District of Illinois on April 3, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, Wholesome Soy received, processed, manufactured, prepared, packed, held and distributed ready-to-eat mung bean and soybean sprouts. Wholesome Soy operated at 1150 West 40th Street in Chicago.
“We must work to ensure that the food we buy from store shelves is safe and produced under sanitary conditions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will continue to work with our partners at FDA to accomplish that goal.”
The complaint alleged that Julia Trinh is the owner and president of Wholesome Soy, and that until recently, she was responsible for purchasing supplies and equipment, managing contracts and agreements with contractors, handling customer service, hiring, firing, scheduling training, implementing procedures and maintaining quality assurance. The complaint also alleged that Paul Trinh was a manager at Wholesome Soy, and that until recently, he was responsible for production operations, sprout processing and training new hires.
The complaint alleged that the company’s food was prepared, packed and/or held under insanitary conditions and that the defendants failed to institute practices and procedures necessary to ensure that the company can receive, process, manufacture, prepare, pack, hold and distribute food under sanitary conditions.
According to the complaint, the FDA conducted inspections of the company’s facility from Aug. 12, 2014 through Sept. 3, 2014, and in October 2014. As described in the complaint, FDA found insanitary conditions and significant sanitary deficiencies in the October inspection that were repeat observations from the previous inspection. The repeated deficiencies included employee practices that allowed for potential contamination of food contact surfaces and food products; cleaning practices that were inadequate; pest control measures that were ineffective; equipment and utensils that were not properly maintained; and a sprout production environment that was not properly maintained.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree for permanent injunction. Under the permanent injunction, Wholesome Soy, Julia Trinh and Paul Trinh are permanently restrained from directly or indirectly receiving, processing, manufacturing, preparing, packing, holding and/or distributing at the facility at 1150 West 40th Street any article of food, unless the defendants make several changes to their facility, including remedial measures and an implementation of a Listeria monitoring program.
The government is represented by the Civil Division’s Consumer Protection Branch with the assistance of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Deutsche Bank's London Subsidiary Agrees to Plead Guilty in Connection with Long-Running Manipulation of LIBORRead the Press Release
DB Group Services (UK) Limited, a wholly owned subsidiary of Deutsche Bank AG (Deutsche Bank), has agreed to plead guilty to wire fraud for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark interest rate used in financial products and transactions around the world. In addition, Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and antitrust charges in connection with its role in both manipulating U.S. Dollar LIBOR and engaging in a price-fixing conspiracy to rig Yen LIBOR. Together, Deutsche Bank and its subsidiary will pay $775 million in criminal penalties to the Justice Department.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement.
DB Group Services (UK) Limited has agreed to plead guilty to one count of wire fraud, and to pay a $150 million fine, for engaging in a scheme to defraud counterparties to interest rate derivatives trades by secretly manipulating U.S. Dollar LIBOR contributions.
In addition, Deutsche Bank entered into a deferred prosecution agreement today and admitted its role in manipulating LIBOR and participating in a price-fixing conspiracy in violation of the Sherman Act by rigging Yen LIBOR contributions with other banks. The agreement requires the bank to continue cooperating with the Justice Department in its ongoing investigation, to pay a $625 million penalty beyond the fine imposed upon DB Group Services (UK) Limited and to retain a corporate monitor for the three-year term of the agreement.
Together with approximately $1.744 billion in regulatory penalties and disgorgement—$800 million as a result of a Commodity Futures Trading Commission (CFTC) action, $600 million as a result of a New York Department of Financial Services (DFS) action, and $344 million as a result of a U.K. Financial Conduct Authority (FCA) action—the Justice Department’s criminal penalties bring the total amount of penalties to approximately $2.519 billion.
“For years, employees at Deutsche Bank illegally manipulated interest rates around the globe – including LIBORs for U.S. Dollar, Yen, Swiss Franc and Pound Sterling, as well as EURIBOR – in the hopes of fraudulently moving the market to generate profits for their traders at the expense of the bank’s counterparties,” said Assistant Attorney General Caldwell. “Deutsche Bank is the sixth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and today’s criminal resolution represents the largest penalty to date in the LIBOR investigation.”
“Deutsche Bank secretly conspired with its competitors to rig the benchmark interest rates at the heart of the global financial system,” said Assistant Attorney General Baer. “Deutsche Bank’s misconduct not only harmed its unsuspecting counterparties, it undermined the integrity and the competitiveness of financial markets everywhere.”
“Deutsche Bank admitted to manipulating benchmark interest rates in currencies around the globe in order to benefit trading positions,” said Assistant Director in Charge McCabe. “This wide reaching investigation represents yet another step in the FBI’s ongoing effort to find and stop those who deliberately participate in complex financial crimes to further their own bottom line.”
Deutsche Bank was a member of the panel of banks whose submissions were used to calculate the LIBORs for a number of currencies, including U.S. Dollar, Yen, Pound Sterling and Swiss Franc LIBOR, as well as EURIBOR (the Euro Interbank Offered Rate).
According to the agreements, from at least 2003 through early 2011, numerous Deutsche Bank derivatives traders—whose compensation was directly connected to their success in trading financial products tied to LIBOR—engaged in efforts to move these benchmark rates in a direction favorable to their trading positions. Specifically, the derivatives traders requested that LIBOR submitters at Deutsche Bank and other banks submit contributions favorable to trading positions, rather than rates that complied with the definition of LIBOR. Through these schemes, Deutsche Bank defrauded counterparties who were unaware of the manipulation. Deutsche Bank admitted that the conduct affected the resulting LIBOR fix on various occasions.
Deutsche Bank further admitted that its employees engaged in this misconduct through face-to-face requests, electronic communications, which included both emails and electronic chats, and telephone calls. For example, in an electronic chat on March 22, 2005, a Deutsche Bank U.S. Dollar LIBOR submitter explained how he would manipulate the rate for a trader in New York, stating, “if you need something in particular in the libors i.e. you have an interest in a high or a low fix let me know and there’s a high chance i’ll be able to go in a different level. Just give me a shout the day before or send an email from your blackberry first thing.”
In another example described in the statement of facts, on May 17, 2006, the supervisor of LIBOR submissions in London received a request from a trader in New York asking, “If you can help we can use a high 3m fix tom.” The supervisor replied to the trader and a U.S. Dollar LIBOR submitter, “I’m off but [submitter] is your libor man [] [submitter] could you take a look at 3s libor in the morning for [trader].” The submitter agreed to accommodate the request, replying, “Will do chaps.” The following morning, after he submitted the bank’s contribution, the submitter wrote to the trader, “I went in at 19+ for the 3m libor, as you’ll see it almost manage to reach 19.”
In an example from March 2007, a trader thanked one of Deutsche Bank’s EURIBOR submitters for his help in successfully manipulating EURIBOR, saying in an electronic chat: “Great job on this [Submitter], we can do more of this stuff,” to which the submitter replied, “WE CAN MY FRIEND. WE CAN….” Later that day, the submitter bragged about Deutsche Bank’s manipulation by offices in Frankfurt and London in an email to the head of Deutsche Bank’s Global Finance Unit: “HAVE U SEEN THE 3MK FIXING TODAY? THAT WAS AN EXCELLENT CONCERTED ACTION FFT/LDN. CHEERS.”
Deutsche Bank also admitted to working with other banks to manipulate LIBOR contributions. For instance, in a May 2009 electronic chat exchange, a UBS trader asked a Deutsche Bank trader, “cld you do me a favour would you mind moving you 6m libor up a bit today, i have a gigantic fix. . .” The Deutsche Bank trader agreed. The next day, the Deutsche Bank trader confirmed that the Yen LIBOR submission had been beneficial to the UBS trader, asking “u happy with me yesterday?” The UBS trader acknowledged, “thx.”
By entering into a deferred prosecution agreement with Deutsche Bank, the Justice Department took several factors into consideration, including that Deutsche Bank’s cooperation with the government’s investigation was often helpful but also fell short in some important respects. The department also considered the extensive remedial measures undertaken by Deutsche Bank’s management and its enhanced compliance program. Deutsche Bank has agreed to continue cooperating with the government’s investigation, and the agreement does not prevent the Justice Department from prosecuting culpable individuals for related misconduct. The documents will be filed in federal court in the District of Connecticut.
The Justice Department has previously announced resolutions with five other banks for their roles in manipulation of benchmark interest rates, including Barclays Bank PLC, UBS AG, The Royal Bank of Scotland plc, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) and Lloyds Banking Group plc. The department has also charged 12 individuals as a result of this investigation, and three of those individuals have pleaded guilty. The pending charges are merely accusations, and the defendants are considered innocent unless and until proven guilty.
This ongoing investigation is being conducted by special agents, forensic accountants and intelligence analysts of the FBI’s Washington Field Office. The prosecution of Deutsche Bank is being handled by Assistant Chief Jennifer L. Saulino and Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section and Trial Attorney Richard A. Powers of the Antitrust Division’s New York Field Office. Deputy Chief Benjamin D. Singer and Assistant Chief Sandra Moser of the Criminal Division’s Fraud Section, Trial Attorney Daniel Tracer of the Antitrust Division’s New York Office, Assistant U.S. Attorneys Liam Brennan and Christopher Mattei of the District of Connecticut and the Criminal Division’s Office of International Affairs have also provided valuable assistance in this matter.
The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the department and, along with the FCA, has played a major role in the investigation. The Securities and Exchange Commission has also played a significant role in the LIBOR series of investigations. Various agencies and enforcement authorities in the United States and from other nations, including the United Kingdom’s Serious Fraud Office, BaFIN and the European Central Bank, are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by 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. For more information about the task force visit: www.stopfraud.gov.
Deutsche Bank Group Services Statement of Facts
Deutsche Bank Group Services Plea Agreement
Deutsche Bank AG Statement of Facts
Deutsche Bank AG Deferred Prosecution Agreement
Cruise Line Employee Admits Abusive Sexual Contact of Sleeping Woman on Cruise ShipRead the Press Release
NEWARK, N.J. – A Mauritius man today admitted sexually abusing a sleeping woman aboard a cruise ship, U.S. Attorney Paul Fishman announced.
Karan Seechurn, 25, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of abusive sexual contact.
According to documents filed in this case and statements made in court:
Seechurn was employed by a cruise line and was responsible for restocking the minibars located in passengers’ rooms. In order to conduct this duty, he was provided with a key that gave him access to passengers’ rooms. Seechurn admitted that on Dec. 23, 2014, while he was off-duty, he entered a passenger’s room and encountered a sleeping woman. Seechurn admitted that he touched the passenger’s genitalia while she was asleep.
The abusive sexual contact charge to which Seechurn pleaded guilty carries a maximum potential penalty of three years in prison. Sentencing is scheduled for August 3, 2015.
The federal government has special maritime jurisdiction over sexual abuse cases, such as those that occur on cruise ships.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office General Crime Unit in Newark.
Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark
seechurn_karan_information.pdf
Colombian Man Convicted of False Claims of U.S. Citizenship and Aggravated Identity TheftRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Jaime Tovar-Montoya, a/k/a Jimmy Diaz Tovar (57, Colombia, South America), guilty of making false claims of U.S. citizenship and aggravated identity theft. He faces a maximum penalty of 20 years in federal prison. A sentencing hearing is scheduled for July 21, 2015. Tovar-Montoya was indicted on April 15, 2015.
According to testimony and evidence presented at trial, Tovar-Montoya, a citizen of Colombia, applied for and received a Florida Identification Card in 2010, claiming that he was a U.S. citizen and using the name and birth certificate of a resident of Puerto Rico. Later that year, he used the identification card as proof of identity to apply for a U.S. passport, again claiming to be a citizen of the United States, and using the same name, birth date, and Social Security Number of the Puerto Rico resident.
Under federal law, a person who uses a means of identification of another person without lawful authority in order to commit another felony offense is guilty of aggravated identity theft, which carries a mandatory two-year sentence, in addition to any other sentence received. Having been convicted and adjudicated guilty of two counts of aggravated identity theft, Tovar-Montoya currently faces a mandatory minimum sentence of four years’ imprisonment, in addition to any other sentence he may receive.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Bruce S. Ambrose.
Chula Vista Corporate Officers Guilty of International Trafficking in Counterfeit Cell PhonesRead the Press Release
SAN DIEGO - Three corporate officers of Chula Vista-based Ohr, Inc., as well as the corporation itself, pleaded guilty yesterday to charges related to their international trafficking in counterfeit cell phones.
In pleading guilty, Michael Deitz, Sidney Schwarz, and Leora Schwarz admitted that they were officers of Ohr, Inc., from August 29, 2009, through May 31, 2013. The company was engaged in importing cellular phones and accessories from Taiwan to Chula Vista, which were later sold in retail stores in Mexico.
Deitz admitted that he was responsible for ordering the products sold by Ohr, Inc., while Sidney Schwarz acknowledged he was responsible for paying the suppliers. Deitz and Sidney Schwarz admitted that many of the cellular phones and accessories imported from China for Ohr, Inc., were counterfeit, in that they bore unauthorized copies of trademark owned by Apple, Samsung, Motorola, Nokia, Sony Ericsson and Blackberry, among others. They further admitted that they received at least nine notices from U.S. Customs, advising that the products they had imported were counterfeit and had been seized during the relevant period.
After learning that the source was supplying them with counterfeit goods, Deitz and Sidney Schwarz continued to do business with the supplier. Deitz also acknowledged that he received emails from his suppliers in China, discussing “illegal logos” and “copy logos” in relation to the cellular phone products he was purchasing, which he forwarded to Schwarz for payment of the attached invoices.
Deitz admitted in his plea agreement that he was aware that the items identified in the invoices as “copy,” “copy logo,” and “AAA” were counterfeit, and that all the cell phone housings and batteries that he purchased from China bearing trademarks were counterfeit. Both men and the company admitted that on August 9, 2011, Customs seized a box of goods ordered by Deitz on behalf of Ohr, Inc., and addressed to Schwarz’s residence which contained hundreds of counterfeit Nokia and Blackberry cell phone housings and hundreds of counterfeit Motorola, Sony Ericsson, Blackberry and Samsung cell phone batteries (shipped from the supplier who had previously shipped counterfeit goods that had been seized). The men acknowledged that the value of the counterfeit goods they imported from China was between $120,000 and $320,000, and agreed to forfeit $150,000, the proceeds of the offense.
Leora Schwarz admitted that on January 14, 2010, she received a notice from U.S. Customs, advising her that all importers of electronics and cellular phone products whose commercial value exceeded $2,500 had the duty to present formal entry documents to Customs for such entries. Leora Schwarz was aware that shipments of cellular phone products whose value exceeded $2,500 were being sent to Ohr, Inc. from China, and she took no action to have formal entry documents prepared, intended that the merchandise enter through the mail without formal inspection.
Deitz, Sidney Schwarz and Ohr, Inc, are set to be sentenced on July 24, 2015, at 8:30 a.m. before U.S. District Judge Gonzalo Curiel. Leora Schwarz was sentenced to one year of probation and a $1,000 fine.
DEFENDANTS Case Number: 14-CR-1075-GPC Ohr, Inc. Incorporated: 2007 Chula Vista, California Michael Deitz Age: 39 Chula Vista, California Sidney Schwarz Age: 60 Chula Vista, California Leora Schwarz Age: 32 Chula Vista, California CHARGESDefendants Ohr, Inc., Michael Deitz and Sidney Schwarz
Count 18: Importation Contrary to Law, in violation of Title 18, United States Code, Sections 545 and 2
Maximum penalties: Twenty years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture and $100 special assessment.Criminal Forfeiture, in violation of Title 18, United States Code, Section 981(A)(1)(C) and 982(a)(1)(A) and (B); Title 31, United States Code, Section 5317(c)(1) and Title 28, United States Code, Section 2461(d)
Defendant Leora Schwarz
Failure to Present Entry Documents, a misdemeanor, in violation of Title 19, United States Code, Sections 1433 and 1436(c) and Title 18, United States Code, Section 2
INVESTIGATING AGENCIES
Maximum penalty: One year in prison, a $100,000 fine, a term of supervised release of one year, restitution, and a $25 penalty assessmentHomeland Security Investigations
U.S. Postal Inspection ServiceChinese Nationals Sentenced in New Mexico for Conspiring to Violate Arms Export Control ActRead the Press Release
This afternoon, a federal judge in the District of New Mexico sentenced two Chinese nationals for conspiring to violate the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR) by scheming to illegally export defense articles with military application to the People’s Republic of China, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Damon P. Martinez of the District of New Mexico.
Bo Cai, 29, of Nanjing, China, was sentenced to 24 months in prison and his cousin Wentong Cai, 30, of Chifeng, China, was sentenced to 18 months in federal prison. Both will be deported after completing their prison sentences. The two men were charged in three-count superseding indictment with a scheme to illegally export sensors primarily manufactured for sale to the U.S. Department of Defense for use in high-level applications, such as line-of-sight stabilization and precision motion control systems. The Arms Export Control Act and the ITAR prohibit the export of defense-related materials from the United States without obtaining a license or written approval from the U.S. Department of State.
Bo Cai entered a guilty plea to all three counts of the superseding indictment in July 2014, and Wentong Cai pleaded guilty to Count 3 of the superseding indictment in December 2014. In entering the guilty pleas, each admitted that from March 2012 to December 2013, they conspired with each other to illegally export sensors from the United States to China without first obtaining the required export license. Bo Cai admitted that in March 2012, while he was employed by a technology company in China, he embarked on an illegal scheme to smuggle sensors out of the United States to China for one of his customers despite knowledge that the sensors could not be exported without a license and that the United States did not issue licenses to export the sensors to China. Wentong Cai admitted that while he was in the United States on a student visa, Bo Cai enlisted him to acquire the sensors under the ruse that he planned to use the sensors at Iowa State University where he was a graduate microbiology student.
Court filings indicate that the investigation of this case began in October 2013, when an undercover U.S. Immigration and Customs Enforcement Homeland Security Investigations (HSI) agent responded to Wentong Cai’s overtures. After negotiations by telephone and email, in December 2013, Bo Cai and Wentong Cai traveled to New Mexico, where they obtained a sensor from undercover HSI agents and developed a plan for smuggling the sensor out of the United States to China. On Dec. 11, 2013, Bo Cai was arrested at an airport in Los Angeles, as he was preparing to board a flight to China, after the sensor was discovered concealed in a computer speaker in his luggage. Wentong Cai subsequently was arrested on Jan. 22, 2014, in Ames, Iowa.
The HSI Albuquerque, New Mexico, office led the investigation of this case with assistance from the U.S. Air Force Office of Special Investigations, the Defense Security Service, HSI in Iowa and Los Angeles and the FBI. Iowa State University cooperated throughout with HSI’s investigation. Assistant U.S. Attorneys Dean S. Tuckman and Fred J. Federici of the District of New Mexico prosecuted the case with assistance from Deputy Chief Deborah Curtis and Trial Attorneys David Recker and Brian Fleming of the Justice Department’s National Security Division. The U.S. Attorney’s Office of the Central District of California and the U.S. Attorney’s Office of the Southern District of Iowa also assisted in the prosecution.
Chinese Nationals Sentenced in New Mexico for Conspiring to Violate Arms Export Control ActRead the Press Release
ALBUQUERQUE – This afternoon, a federal judge in the District of New Mexico sentenced two Chinese nationals for conspiring to violate the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR) by scheming to illegally export defense articles with military application to the People’s Republic of China, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Damon P. Martinez of the District of New Mexico.
Bo Cai, 29, of Nanjing, China, was sentenced to 24 months in prison and his cousin Wentong Cai, 30, of Chifeng, China, was sentenced to 18 months in federal prison. Both will be deported after completing their prison sentences. The two men were charged in three-count superseding indictment with a scheme to illegally export sensors primarily manufactured for sale to the U.S. Department of Defense for use in high-level applications, such as line-of-sight stabilization and precision motion control systems. The Arms Export Control Act and the ITAR prohibit the export of defense-related materials from the United States without obtaining a license or written approval from the U.S. Department of State.
Bo Cai entered a guilty plea to all three counts of the superseding indictment in July 2014, and Wentong Cai pleaded guilty to Count 3 of the superseding indictment in December 2014. In entering the guilty pleas, each admitted that from March 2012 to December 2013, they conspired with each other to illegally export sensors from the United States to China without first obtaining the required export license. Bo Cai admitted that in March 2012, while he was employed by a technology company in China, he embarked on an illegal scheme to smuggle sensors out of the United States to China for one of his customers despite knowledge that the sensors could not be exported without a license and that the United States did not issue licenses to export the sensors to China. Wentong Cai admitted that while he was in the United States on a student visa, Bo Cai enlisted him to acquire the sensors under the ruse that he planned to use the sensors at Iowa State University where he was a graduate microbiology student.
Court filings indicate that the investigation of this case began in October 2013, when an undercover U.S. Immigration and Customs Enforcement Homeland Security Investigations (HSI) agent responded to Wentong Cai’s overtures. After negotiations by telephone and email, in December 2013, Bo Cai and Wentong Cai traveled to New Mexico, where they obtained a sensor from undercover HSI agents and developed a plan for smuggling the sensor out of the United States to China. On Dec. 11, 2013, Bo Cai was arrested at an airport in Los Angeles, as he was preparing to board a flight to China, after the sensor was discovered concealed in a computer speaker in his luggage. Wentong Cai subsequently was arrested on Jan. 22, 2014, in Ames, Iowa.
The HSI Albuquerque, New Mexico, office led the investigation of this case with assistance from the U.S. Air Force Office of Special Investigations, the Defense Security Service, HSI in Iowa and Los Angeles, the FBI and the U.S. Department of State. Iowa State University cooperated throughout with HSI’s investigation. Assistant U.S. Attorneys Dean S. Tuckman and Fred J. Federici of the District of New Mexico prosecuted the case with assistance from Deputy Chief Deborah Curtis and Trial Attorneys David Recker and Brian Fleming of the Justice Department’s National Security Division. The U.S. Attorney’s Office of the Central District of California and the U.S. Attorney’s Office of the Southern District of Iowa also assisted in the prosecution.
Children’s Summer Camps and the Americans with Disabilities ActRead the Press Release
2015 is the 25th anniversary of the Americans with Disabilities Act (ADA). The U.S. Department of Justice is committed to the goals of the ADA and its enforcement. The United States Attorney’s Office for the Middle District of Pennsylvania is urging everyone to be especially mindful of children protected and helped by the ADA. For that reason, we are marking the ADA’s anniversary by issuing a letter with ADA information to children’s summer camps in counties within the Middle District.
The information is contained in a brochure which briefly describes the ADA’s requirements, lists helpful tips for summer camps and provides resources for further information.
Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities. This means that children with disabilities are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis, and that camps must train their staff in the requirements of the ADA. Camps are also obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.
Additional information about the ADA is available at www.ada.gov, or through contacting the ADA information line at (800) 514-0301 (voice) or (800) 514-0383 (TTY).
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Cancer Center Guilty of Purchasing Misbranded Foreign DrugsRead the Press Release
CORPUS CHRISTI, Texas – Dr. Mohamad Ayman Ghraowi has entered a guilty plea on behalf of Corpus Christi-based South Texas Comprehensive Cancer Centers PLLC (STCCC) to a violation of the federal Food, Drug and Cosmetic Act (FDCA), announced U.S. Attorney Kenneth Magidson announced.
STCCC was charged with causing the introduction into interstate commerce of misbranded prescription cancer drugs worth more than $900,000, between Feb. 22, 2010, and Jan. 17, 2012. STCCC was a professional association existing under Texas state law with clinics located within the Southern District of Texas, which provided care and treatment for patients with cancer and blood diseases.
In 2012, the Food and Drug Administration (FDA) received information from the United Kingdom Medicines and Healthcare Products Regulatory Agency regarding the appearance of counterfeit versions of the cancer drug Avastin. Regulators determined that some of these counterfeit drugs may have been illegally imported into the U.S. FDA investigators tracked the counterfeit drugs to a distributor offering numerous misbranded foreign drugs for sale to cancer clinics in the U.S. STCCC was determined to be one of the clinics purchasing misbranded foreign drugs from the distributor.
The FDA is responsible for protecting the health and safety of the American public by ensuring, among other things, that drugs are safe and effective for their intended uses and that the drugs bear labeling that contains true and accurate information. FDA's responsibilities include regulating the manufacture and distribution of drugs, including prescription drugs, shipped or received in interstate commerce, as well as the labeling of such drugs. FDA carries out its responsibilities by enforcing the FDCA and other pertinent laws and regulations.
One of the goals of the FDCA has been to ensure the integrity of America’s drug supply. Congress determined that the public interest in the purity of prescription drugs and pharmaceutical products distributed to American consumers is so great as to warrant imposition of the highest standard of care on those who distribute those products to the public. Under the FDCA, the responsibility for maintaining the quality and safety of drugs is not placed on the innocent public that purchases drugs but rather on those who sell and distribute drugs. Under the FDCA, consumers have a right to expect that drug distributors will be vigilant and responsible in matters that affect the public health.
While the U.S. wholesale distribution market is highly regulated, many other markets around the world are not. Pharmaceutical distributors who circumvent U.S. law and illegally import foreign pharmaceuticals into the United States put American consumers at risk for receiving counterfeit, misbranded or adulterated drugs.
Following the guilty plea, U.S. Magistrate Judge B. Janice Ellington ordered the corporation to serve five years of probation and forfeit $900,000, an amount equivalent to the purchase price of the misbranded drugs.
The case was investigated by FDA - Office of Criminal Investigations, U.S. Department of Health and Human Services – Office of Inspector General, Defense Criminal Investigative Service and the Texas Attorney General’s Office – Medicaid Fraud Control Unit. The case is being prosecuted by Assistant United States Attorney (AUSA) Robert D. Thorpe Jr. and Special AUSA Brittany Jensen.
CEO Who Oversaw Multimillion-Dollar Corporate Accounting Fraud Pleads Guilty in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that STEVEN KAITZ, the chief executive officer and one of three owners and principals of G3K Displays, Inc., and related entities (“G3K”) – a New Jersey-based company that provided in-store displays for retailers – pled guilty today in Manhattan federal court to an elaborate scheme to defraud G3K’s lenders and customers out of millions of dollars. Among other things, KAITZ admitted that he and others fraudulently inflated G3K’s sales and accounts receivable to secure millions of dollars in loans, and falsely verified to G3K’s lenders and outside auditors false financial information about G3K. KAITZ was charged along with four others in January 2015, and he pled guilty today before United States District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Preet Bharara said: “With today’s guilty plea, Steven Kaitz has taken responsibility for his role in a scheme to inflate his company’s sales and accounts in order to secure over $18.6 million in loans. Not only did Kaitz obtain these funds for his company through lies and misrepresentations, but he also misappropriated some of the money for himself, spending it on luxury items and kickbacks.”
According to the Indictment and statements made during the plea proceeding:
KAITZ, was one of three owners and principals of G3K, a company that manufactured and designed displays for retailers around the world, including major retailers of sports apparel and footwear.
From approximately 2012 to May 2014, in order to trick various lenders, including Veritas Financial Partners, LLC, and MVC Capital, into lending at least $18.6 million to G3K, KAITZ and others engaged in a scheme to falsely inflate G3K’s revenue and accounts receivable, and as part of the scheme, made and caused to be made materially false and misleading statements about G3K’s financial condition. To create the false impression of sales, the defendants created phony documents, including fake and falsely inflated purchase orders purporting to reflect sales to G3K’s customers. The defendants also tricked certain of the company’s customers into paying falsely inflated invoices from G3K.
The defendants took elaborate steps to keep the scheme afloat and prevent G3K’s lenders and outside auditors from discovering the fraud. For example, KAITZ was involved in the creation of fake email accounts purporting to belong to fictitious employees of Footlocker and Adidas, G3K’s two largest customers. KAITZ and his co-defendants operated these fake email accounts themselves, pretending to be employees of those customers, and then used those fake email accounts to “verify” false information about G3K’s financial condition, including its sales and accounts receivable, to G3K’s lenders and outside auditors. To keep their scheme afloat, KAITZ and the other owners of G3K also utilized shell companies to engage in “round-trip” transactions to create the false appearance that customers were paying G3K’s phony outstanding receivables.
KAITZ and the other owners of G3K further misappropriated approximately $2.8 million of the loan proceeds for their own personal use, to pay for homes and luxury cars, private school tuition, and personal credit card bills, as well as kickbacks to another co-defendant in exchange for her role in the scheme.
As of May 2014, when G3K’s lenders terminated their lending relationships with the company after discovering the fraud, G3K had approximately $18.6 million in loans outstanding.
KAITZ, 56, of Jersey City, New Jersey, pled guilty to one count of conspiracy to commit bank fraud and wire fraud, which carries a maximum sentence of 30 years in prison. As part of the plea agreement, he agreed to pay restitution in the amount of $18,600,000, and he agreed to forfeit $1,382,427. KAITZ is scheduled to be sentenced by Judge Rakoff on September 8, 2015, at 4:00 p.m.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. The charges remain pending against KAITZ’s co-defendants, who are presumed innocent unless and until they are proven guilty.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Complex Frauds & Cybercrime Unit. Assistant U.S. Attorneys Joshua A. Naftalis and Rosemary Nidiry are in charge of the prosecution.
U.S. v. Steven Kaitz, et al. Indictment
Buffalo Man Sentenced for Committing Six Bank RobberiesRead 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 Michael Mitchell, a/k/a Max, 22, of Buffalo, NY, who was convicted of six counts of bank robbery, was sentenced to 108 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S Attorney Mary Catherine Baumgarten, who handled the case, stated that between October 2013 and January 9, 2014, Mitchell committed six bank robberies and aided another individual in committing a seventh robbery in the Buffalo and Rochester, NY areas.
In October 2013, the defendant planned then aided another individual in robbing the First Niagara Bank at 529 Elmwood Avenue in Buffalo on October 23, 2013. Mitchell also committed the following robberies:
• December 3, 2013, First Niagara Bank, 529 Elmwood Avenue, Buffalo
• December 16, 2013, First Niagara Bank, 805 Main Street, Niagara Falls
• December 26, 2013, First Niagara Bank, 70 Lyell Avenue, Rochester
• December 27, 2013, KeyBank, 201 Amherst Street, Buffalo
• January 3, 2014, M&T Bank, 130 Grant Street, Buffalo
• January 9, 2014, First Niagara Bank, 1248 Abbott Road, LackawannaDuring each of the robberies, Mitchell passed a note to the teller demanding money and threatened the use of a weapon.
“While some bank robbery investigations may take a bit longer than others, this case demonstrates that eventually all who commit such crimes get caught,” said U.S. Attorney Hochul.
Co-defendant Sheila L. Cassata pleaded guilty to bank robbery and will be sentenced on June 5, 2015 at 12:00 p.m.
The sentencing is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Lackawanna Police Department, under the direction of Chief James Michel, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto, and Rochester Police Department, under the direction of Chief Michael Ciminelli.
Broward Resident Pleads Guilty to Traveling to Colombia to Engage in Sexual Activity with MinorsRead the Press Release
Dennis De Jesus, 46, of Fort Lauderdale, pled guilty to traveling to Colombia in order to engage in illicit sexual activity with two persons under the age of eighteen, enticing the minors to engage in sexual activity, and knowingly possessing a visual depiction of a minor engaged in sexually explicit conduct.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Miami Office, and Luis Sierra, Country Attaché HSI Andean Region, Colombia, made the announcement.
According to court documents and statements made in court, the ICE-HSI’s Attaché Office in Colombia and the Colombian Attorney General’s Technical Investigative Corps Transnational Criminal Investigative Unit (CTI TCIU) conducted an undercover operation into a sex trafficking ring that was suspected of exploiting minors in Colombia.
In September 2014, HSI in Bogotá, Colombia received information that Dennis De Jesus intended to travel, the following month, from the United States to Colombia in order to engage in sexual activity with minors.
In an effort to further the investigation, a confidential source working with law enforcement created an undercover account on a social media internet networking site. De Jesus became a social media friend of the confidential source utilizing the account. During the course of their internet communications, De Jesus discussed his plans to travel to Colombia in order to engage in illicit sexual activity with minors in Colombia.
On October 11, 2014, law enforcement officers executed a search warrant at De Jesus’s home in North Lauderdale, Florida. During the search, agents discovered a computer in De Jesus’s bedroom, in addition to various costumes and masks. A forensic analysis of the computer recovered videos depicted De Jesus with minors wearing costumes and masks. At least one of the recovered videos showed two minors engaging in sexual acts.
Law enforcement also recovered De Jesus’ cellular telephone. The telephone contained text messages between De Jesus, the undercover officer and two minors. In the messages, De Jesus stated that he intended to return to Colombia in order to have a private party with minor females engaged in the sex tourism trade. De Jesus also referenced his previous trip to Colombia, during which time he and a minor engaged in illicit sexual acts. Using his cellular telephone, De Jesus sent photographs of the costumes and presents he intended to give the minors in exchange for the sexual acts.
The investigation further revealed that De Jesus had traveled to Medellin, Colombia in June 2013 and engaged in illicit sexual conduct with minor females.
De Jesus is scheduled to be sentenced on June 30, 2015 at 9:00 a.m. by U.S. District Judge James I. Cohn. At sentencing, De Jesus faces a mandatory minimum term of 10 years in prison up to a statutory maximum term of life in prison. \
Mr. Ferrer commended the investigative efforts of HSI (Miami and Bogota), United States Customs and Border Protection, Department of Justice, Judicial Attaché’s Office in Bogota, Colombia, Broward Sheriff’s Office, Florida Department of Law Enforcement, CTI TCIU, Colombian Navy, Colombian Army Special Forces, and Instituto Colombiano de Bienestar Familiar. This case is being prosecuted by Assistant U.S. Attorneys Francis Viamontes and Jodi Anton.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Boise Man Pleads Guilty to Possession of Meth and Unlawful Possession of a FirearmRead the Press Release
BOISE – Rodolfo Antonio Ortega, 29, of Boise, Idaho, pleaded guilty to one count of possessing methamphetamine for distribution, and one count of felon in possession of a firearm, U.S. Attorney Wendy J. Olson announced.
According to court proceedings, Ortega was arrested in a Boise hotel parking lot on October 21, 2014. When the officers searched his car they found a loaded .357 Colt revolver, 9.5 ounces of methamphetamine, scales, baggies, and about $4,774 in cash. Ortega admitted that he is a convicted felon and knowingly possessed the firearm. Ortega has two prior felony convictions. He also admitted that he possessed the methamphetamine with intent to distribute it. According to his plea agreement, Ortega acknowledges that he is a Career Offender, which will enhance the sentencing guideline range applicable to his case.
The penalty for possession of meth with intent to distribute it is not less than 5 years, and not more than 40 years. Possession of a firearm by a convicted felon is punishable by imprisonment for not more than 10 years. Punishment as a Career Offender increases the punishment range. Ortega’s sentencing is set for July 7, 2015 before U.S. District Judge B. Lynn Winmill.
The Indictment was handed down on November 13, 2014. The case was investigated by the Boise City Police Department and the Drug Enforcement Administration.
Armed Robbery Spree Gets Wayne County Man Long Prison TermRead the Press Release
PHILADELPHIA – Dale Mentzer, 37, of Waymart, PA, was sentenced today to 264 months in prison for a string of armed robberies that he committed, between July 11, 2013 and July 19, 2013 with a co-defendant, in Berks, Chester, Lebanon, and Northampton Counties. Mentzer and Heath DeRizzo, 38, of Manheim, PA, were charged with two counts of interference with interstate commerce by robbery, four counts of bank robbery, two counts of use and carrying of a firearm during a crime of violence, and two counts of convicted felon in possession of a firearm. A third defendant, Samantha Henderson, 24, of Fredericksburg, PA, was charged with accessory to robbery after the fact. Mentzer pleaded guilty on December 11, 2014. DeRizzo and Henderson also pleaded guilty and will be sentenced next month. U.S. District Court Judge Edward G. Smith ordered the federal prison term to run consecutive to a 15-year sentence Mentzer is currently serving in Maryland for other robberies. He also ordered restitution in the amount of $8,926, a special assessment of $800, and five years of supervised release.
Mentzer and DeRizzo committed armed robberies at a Sovereign Bank branch in Kutztown, on July 11, 2013; a Northwest Savings Bank branch in Myerstown, on July 16, 2013; a First Cornerstone Bank branch in Phoenixville and The Rodeway Inn motel in Muhlenberg, on July 18, 2013; a National Penn Bank branch, on July 19, 2013; and, that same day, Cihylik Farms in Allen Township. Henderson assisted Mentzer and DeRizzo in their efforts to avoid apprehension.
The case was investigated by the Federal Bureau of Investigation-Allentown Resident Agency, Pennsylvania State Police, East Pikeland Township Police Department, Northampton Police Department, the Northampton County District Attorney’s Office, Kutztown Police Department, Muhlenberg Township Police Department, Worcester County Bureau of Investigation, and FBI Baltimore-Salisbury Resident Agency. It is being prosecuted by Assistant United States Attorney John Gallagher and Special AUSA Kelly Lewis Fallenstein.
Acting US Attorney Jill Westmoreland Rose Statement on the Sentencing of David PetraeusRead the Press Release
Acting U.S. Attorney Jill Westmoreland Rose released the following statement on the sentencing of David Petraeus:
“Good afternoon. David Petraeus appeared before U.S. Magistrate Judge David Keesler of the Western District of North Carolina today and admitted to the unauthorized removal and retention of classified information and lying to the FBI and CIA about his possession and handling of classified information. Petraeus was sentenced to a two-year probationary term and was ordered to pay $100,000 fine. I want to thank my colleagues at DOJ National Security Division, the Charlotte FBI office for leading the investigation, as well as all our investigative partners for their work on the case.”
Acting US Attorney Jill Westmoreland Rose Statement on the Sentencing of David PetraeusRead the Press Release
CHARLOTTE – Acting U.S. Attorney Jill Westmoreland Rose released the following statement on the sentencing of David Petraeus:
“Good afternoon.David Petraeus appeared before U.S. Magistrate Judge David Keesler of the Western District of North Carolina today and admitted to the unauthorized removal and retention of classified information and lying to the FBI and CIA about his possession and handling of classified information.Petraeus was sentenced to a two-year probationary term and was ordered to pay $100,000 fine.I want to thank my colleagues at DOJ National Security Division, the Charlotte FBI office for leading the investigation, as well as all our investigative partners for their work on the case.”
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Acoma Pueblo Man Sentenced to Federal Prison for Assaulting His Intimate PartnerRead the Press Release
ALBUQUERQUE – Brian J. Juanico, 37, a member and resident of the Acoma Pueblo, N.M., was sentenced today in Albuquerque, N.M., to 18 months in federal prison followed by three years of supervised release for assaulting his intimate partner. He also was ordered to pay a fine in the amount of $53,424.00.
Juanico was arrested on Aug. 15, 2014, on a criminal complaint alleging that on April 6, 2014, he assaulted his intimate partner, an Acoma Pueblo woman, by strangulation. According to the complaint, Juanico committed the crime on the Acoma Indian Reservation in Cibola County, N.M. Court records reflect that Juanico was arrested on related tribal charges on May 1, 2014.
Juanico was indicted in Sept. 2014, in an indictment charging him with assaulting his intimate partner on April 6, 2014. The indictment alleged that Juanico strangled and attempted to suffocate the victim three separate and distinct times on that day.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Pueblo Tribal Police Department and was prosecuted by Assistant U.S. Attorneys Novaline D. Wilson and David Adams.
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.
AUSA Mark Bennett honored for prosecuting mortgage-fraud casesRead the Press Release
Assistant U.S. Attorney Mark S. Bennett was honored this week for his work prosecuting mortgage-fraud cases by the United States Department of Housing and Urban Development – Office of Inspector General.
Bennett has prosecuted nearly 100 defendants involved in mortgage fraud. Northeast Ohio is recognized as one of the areas hardest hit by the mortgage-fraud crisis that swept the country in the early 2000s.
“Your efforts have truly made a difference to the public,” Nicholas Padilla, Jr., the deputy assistant Inspector General for HUD, said in presenting the award.
“Mark has been tenacious in seeking justice for the victims of mortgage fraud, and those who caused so much hardship in our city,” said U.S. Attorney Steven M. Dettelbach.
Among the cases Bennett has prosecuted:
United States v. Thomas France: France, of Strongsville, was sentenced to more than 10 years in prison and ordered to pay more than $3 million in restitution for fraud involving six properties in Medina. France was part of a group that sold the homes at fraudulently inflated purchase prices. All the homes eventually went into foreclosure, resulting in a loss of approximately $3.3 million.
United States v. Anthony Viola and Uri Gofman: Viola, a real estate company owner from Cleveland Heights, was sentenced to more than 12 years in prison and real estate owner Uri Gofman, of Beachwood, was sentenced to more than eight years in prison. A jury convicted Viola and Gofman of multiple counts related to the fraudlulent sale of 34 homes, resulting in a loss of more than $3 million.
United States v. Romero Minor, et. al: Minor, of Macon, Georgia, was sentenced to nearly six years in prison for fraud involving $7.5 million and 48 properties in Mahoning and Trumbull Counties. Minor recruited straw buyers to “purchase” properties in their names. Minor represented to the straw buyers that he needed individuals like them with good credit to apply for mortgage loans on properties in their names as a way of helping other individuals in the community with bad credit who could not purchase homes in their own names, He then conspired with others to prepare and submit fraudulent mortgage loan applications to various mortgage lenders knowing that they contained false information. Minor received thousands of dollars at closing from the mortgage proceeds with the assistance of the title agents. Overall, nine people were convicted of crimes for their roles in the scheme.
Bennett, 45, joined the U.S. Attorney’s Office in 2007. He previously worked for the Ohio Attorney General. He is a graduate of Baldwin Wallace College and the Cleveland-Marshall College of Law and serves on the Legal Aid Society’s board.
22 April 2015
“Mr. Move” Owner Sentenced on Eight Counts of Operating an Illegal Interstate Moving BusinessRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DUNWOODIE MCDUFFIE, age 48, a resident of Metairie and the owner of a Metairie moving company, was sentenced today on eight counts of conducting interstate household goods moves without the proper Department of Transportation authorities.
According to court records, MCDUFFIE pled guilty on November 5, 2014, to an eight-count Bill of Information. In 2007, MCDUFFIE applied for authorization to conduct interstate moves with his company Mr. Move, but never followed through with the various requirements to maintain authority to conduct interstate moves. MCDUFFIE nonetheless continued to operate his interstate moving business, knowing that he lacked the proper authority to do so. Each of the eight charges represents a different move conducted by MCDUFFIE’s business in 2013.
U.S. District Judge Martin L.C. Feldman sentenced MCDUFFIE to 6 months imprisonment, to be followed by 1 year of supervised release.
U.S. Attorney Polite praised the work of the Department of Transportation, Office of the Inspector General in investigating this matter. Assistant United States Attorney David Haller was in charge of the prosecution.
West Dundee Man Indicted for Allegedly Receiving and Possessing Child PornographyRead the Press Release
CHICAGO ― A federal grand jury returned a two count indictment charging BRUCE H. NIGGEMANN with receiving and possessing child pornography, federal law enforcement officials announced today.
Niggemann, 65, of West Dundee, was indicted April 16 on one count of receiving and one count of possessing child pornography, all via computer. The indictment was under seal until Niggemann’s arrest this morning. Niggemann was arraigned earlier today in U.S. District Court before Judge Charles R. Norgle, Sr. He remains in federal custody until a detention hearing scheduled for April 27, 2015 at 11:30 before Magistrate Judge Sheila M. Finnegan.
The indictment also seeks forfeiture of a laptop computer and a desktop computer and hard drives that were seized at Niggemann’s residence when special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed a federal search warrant at Niggemann’s residence in West Dundee.
In the circumstances in this case, receiving child pornography carries a maximum sentence of 40 years and a mandatory minimum sentence of 15 years in prison, while the count of possession carries a maximum sentence of 20 years, and a mandatory minimum sentence of ten years. Each count also carries a maximum fine of $250,000. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI in Chicago. The Kane County Sheriff’s Office assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Kaarina Salovaara.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment