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Wednesday 4 March 2015
Justice Department Surpasses $2 Billion in Awards under the Radiation Exposure Compensation ActRead the Press Release
WASHINGTON - The Justice Department announced today that it has awarded more than $2 billion in compassionate compensation to eligible claimants under the Radiation Exposure Compensation Act (RECA).
The RECA was enacted in 1990 as a non-adversarial alternative to litigation for individuals who contracted certain illnesses following exposure to radiation as a result of the United States’ atmospheric nuclear testing program and uranium ore processing operations during the Cold War. Congress expanded the scope of the law’s coverage in 2000. In its present form, the RECA provides lump sum compensation awards to individuals who contracted specified diseases in three defined populations: uranium miners, millers and ore transporters who are eligible for $100,000 per claim; participants in atmospheric nuclear weapons tests who are eligible for $75,000 per claim; and individuals who lived downwind of the Nevada Test Site (downwinders) who are eligible for $50,000 per claim.
“RECA claimants worked in hazardous occupations and were subjected to increased risk of disease to serve the national security interests of the United States,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “This extraordinary statute provides partial restitution to these individuals and their families for the sacrifices they made during a critical time in our nation’s history.”
Compensation has been awarded to individuals residing in every state. Since 1990, nearly 43,000 claims have been filed and 32,000 claims have been approved. Residents of the Four Corners Region of the American southwest have filed the majority of RECA claims. The department has awarded more than 9,400 claims filed by residents of Arizona, valued at more than $500 million. Approximately 3,800 claims filed by residents of New Mexico have been awarded, valued at nearly $350 million, and approximately 5,800 claims filed by Utah residents have been awarded, valued at approximately $330 million. Colorado residents have received awards in more than 3,200 claims, valued at more than $213 million.
Awards to Native American claimants total approximately $264 million distributed among members of 17 different tribes. The department has awarded more than 2,800 claims filed by members of the Navajo Nation, valued at more than $212 million. In addition, the department has awarded more than $24 million to members of the Laguna Pueblo Tribe and more than $9 million to members of the Apache Tribes.
Since 1990, the department has awarded more than 3,600 claims filed by veterans, civil servants and contractors who participated onsite in atmospheric nuclear tests, valued in excess of $266 million. Nearly $100 million of this compensation was awarded following a surge in claims filed in 2011 and 2012.
“This benchmark reflects the department’s efforts to help thousands of U.S. citizens reach closure on a unique chapter of our history,” said Deputy Assistant Attorney General Kali N. Bracey of the Civil Division’s Torts Branch. The RECA is administered by the Radiation Exposure Compensation Program, a component of the Constitutional and Specialized Torts Litigation section within the Torts Branch.
The Department of Justice is a part of a broad inter-agency network that includes the Departments of Defense, Veterans Affairs, Labor, Health and Human Services, and Energy, comprising the comprehensive federal radiation compensation system. Eligibility determinations are routinely coordinated with these agencies.
The RECA will expire on July 9, 2022, and claims received after that date will be barred. Individuals interested in filing a claim may visit the department’s RECA website or contact the Radiation Exposure Compensation Program at 800-729-7327.
Justice Department Announces Findings of Two Civil Rights Investigations in Ferguson, MissouriRead the Press Release
Justice Department Finds a Pattern of Civil Rights Violations by the Ferguson Police Department
The Justice Department announced the findings of its two civil rights investigations related to Ferguson, Missouri, today. The Justice Department found that the Ferguson Police Department (FPD) engaged in a pattern or practice of conduct that violates the First, Fourth, and 14th Amendments of the Constitution. The Justice Department also announced that the evidence examined in its independent, federal investigation into the fatal shooting of Michael Brown does not support federal civil rights charges against Ferguson Police Officer Darren Wilson.
“As detailed in our report, this investigation found a community that was deeply polarized, and where deep distrust and hostility often characterized interactions between police and area residents,” said Attorney General Eric Holder. “Our investigation showed that Ferguson police officers routinely violate the Fourth Amendment in stopping people without reasonable suspicion, arresting them without probable cause, and using unreasonable force against them. Now that our investigation has reached its conclusion, it is time for Ferguson’s leaders to take immediate, wholesale and structural corrective action. The report we have issued and the steps we have taken are only the beginning of a necessarily resource-intensive and inclusive process to promote reconciliation, to reduce and eliminate bias, and to bridge gaps and build understanding.”
“While the findings in Ferguson are very serious and the list of needed changes is long, the record of the Civil Rights Division’s work with police departments across the country shows that if the Ferguson Police Department truly commits to community policing, it can restore the trust it has lost,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We look forward to working with City Officials and the many communities that make up Ferguson to develop and institute reforms that will focus the Ferguson Police Department on public safety and constitutional policing instead of revenue. Real community policing is possible and ensures that all people are equal before the law, and that law enforcement is seen as a part of, rather than distant from, the communities they serve.”
Attorney General Holder first announced the comprehensive pattern or practice investigation into the Ferguson Police Department after visiting that community in August 2014, and hearing directly from residents about police practices and the lack of trust between FPD and those they are sworn to protect. The investigation focused on the FPD’s use of force, including deadly force; stops, searches and arrests; discriminatory policing; and treatment of detainees inside Ferguson’s city jail by Ferguson police officers.
In the course of its pattern or practice investigation, the Civil Rights Division reviewed more than 35,000 pages of police records; interviewed and met with city, police and court officials, including the FPD’s chief and numerous other officers; conducted hundreds of in-person and telephone interviews, as well as participated in meetings with community members and groups; observed Ferguson Municipal Court sessions, and; analyzed FPD’s data on stops, searches and arrests. It found that the combination of Ferguson’s focus on generating revenue over public safety, along with racial bias, has a profound effect on the FPD’s police and court practices, resulting in conduct that routinely violates the Constitution and federal law. The department also found that these patterns created a lack of trust between the FPD and significant portions of Ferguson’s residents, especially African Americans.
The department found that the FPD has a pattern or practice of:
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Conducting stops without reasonable suspicion and arrests without probable cause in violation of the Fourth Amendment;
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Interfering with the right to free expression in violation of the First Amendment; and
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Using unreasonable force in violation of the Fourth Amendment.
The department found that Ferguson Municipal Court has a pattern or practice of:
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Focusing on revenue over public safety, leading to court practices that violate the 14th Amendment’s due process and equal protection requirements.
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Court practices exacerbating the harm of Ferguson’s unconstitutional police practices and imposing particular hardship upon Ferguson’s most vulnerable residents, especially upon those living in or near poverty.Minor offenses can generate crippling debts, result in jail time because of an inability to pay and result in the loss of a driver’s license, employment, or housing.
The department found a pattern or practice of racial bias in both the FPD and municipal court:
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The harms of Ferguson’s police and court practices are borne disproportionately by African Americans and that this disproportionate impact is avoidable.
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Ferguson’s harmful court and police practices are due, at least in part, to intentional discrimination, as demonstrated by direct evidence of racial bias and stereotyping about African Americans by certain Ferguson police and municipal court officials.
The findings are laid out in a 100-page report that discusses the evidence and what remedies should be implemented to end the pattern or practice. The findings include two sets of recommendations, 26 in total, that the Justice Department believes are necessary to correct the unconstitutional FPD and Ferguson Municipal Court practices. The recommendations include: changing policing and court practices so that they are based on public safety instead of revenue; improving training and oversight; changing practices to reduce bias, and; ending an overreliance on arrest warrants as a means of collecting fines.
The Justice Department will require that the recommendations and other measures be part of a court-enforceable remedial process that includes involvement from community stakeholders as well as independent oversight. The Justice Department has provided its investigative report to the FPD and in the coming weeks, the Civil Rights Division will seek to work with the City of Ferguson and the Ferguson community to develop and reach an agreement for reform, using the recommendations in the report as the starting point.
The federal criminal investigation into the fatal shooting of Michael Brown sought to determine whether the evidence from the events that led to Brown’s death was sufficient to prove, beyond a reasonable doubt, that Wilson’s actions violated federal civil rights laws that make it a federal crime for someone acting with law enforcement authority to willfully violate a person’s civil rights. As part of the investigation, federal authorities reviewed physical, ballistic, forensic, and crime scene evidence; medical reports and autopsy reports, including an independent autopsy performed by the U.S. Department of Defense Armed Forces Medical Examiner Service; Wilson’s personnel records; audio and video recordings; internet postings, and; the transcripts from the proceedings before the St. Louis County grand jury. Federal investigators interviewed purported eyewitnesses and other individuals claiming to have relevant information. Federal prosecutors and agents re-interviewed dozens of witnesses to evaluate their accounts and obtain more detailed information. FBI agents independently canvassed more than 300 residences to locate and interview additional witnesses.
The standard of proof is the same for all criminal cases: that the defendant committed the crime beyond a reasonable doubt. However, unlike state laws, federal criminal civil rights statutes do not have the equivalent of manslaughter or a statute that makes negligence a crime. Federal statutes require the government to prove that Officer Wilson used unreasonable force when he shot Michael Brown and that he did so willfully, that is, he shot Brown knowing it was wrong and against the law to do so. After a careful and deliberative review of all of the evidence, the department has determined that the evidence does not establish that Darren Wilson violated the applicable federal criminal civil rights statute. The family of Michael Brown was notified earlier today of the department’s findings.
Due to the high interest in this case, the department took the rare step of publicly releasing the closing memo in the case. The report details, in over 80 pages, the evidence, including evidence from witnesses, the autopsies and physical evidence from the analysis of the DNA, blood, shooting scene and ballistics. The report also explains the law as developed by the federal courts and applies that law to the evidence.
DOJ Report on Shooting of Michael Brown
Ferguson Police Department Report
Pattern and Practice Typography
Pattern and Practice Chart
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Justice Department Announces Findings of Two Civil Rights Investigations in Ferguson, MissouriRead the Press Release
WASHINGTON — The Justice Department announced the findings of its two civil rights investigations related to Ferguson, Missouri, today. The Justice Department found that the Ferguson Police Department (FPD) engaged in a pattern or practice of conduct that violates the First, Fourth, and 14th Amendments of the Constitution. The Justice Department also announced that the evidence examined in its independent, federal investigation into the fatal shooting of Michael Brown does not support federal civil rights charges against Ferguson Police Officer Darren Wilson.
"As detailed in our report, this investigation found a community that was deeply polarized, and where deep distrust and hostility often characterized interactions between police and area residents," said Attorney General Eric Holder. "Our investigation showed that Ferguson police officers routinely violate the Fourth Amendment in stopping people without reasonable suspicion, arresting them without probable cause and using unreasonable force against them. Now that our investigation has reached its conclusion, it is time for Ferguson’s leaders to take immediate, wholesale and structural corrective action. The report we have issued and the steps we have taken are only the beginning of a necessarily resource-intensive and inclusive process to promote reconciliation, to reduce and eliminate bias, and to bridge gaps and build understanding."
"While the findings in Ferguson are very serious and the list of needed changes is long, the record of the Civil Rights Division’s work with police departments across the country shows that if the Ferguson Police Department truly commits to community policing, it can restore the trust it has lost," said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. "We look forward to working with City Officials and the many communities that make up Ferguson to develop and institute reforms that will focus the Ferguson Police Department on public safety and constitutional policing instead of revenue. Real community policing is possible and ensures that all people are equal before the law, and that law enforcement is seen as a part of, rather than distant from, the communities they serve."
Attorney General Holder first announced the comprehensive pattern or practice investigation into the Ferguson Police Department after visiting that community in August 2014, and hearing directly from residents about police practices and the lack of trust between FPD and those they are sworn to protect. The investigation focused on the FPD’s use of force, including deadly force; stops, searches and arrests; discriminatory policing; and treatment of detainees inside Ferguson’s city jail by Ferguson police officers.
In the course of its pattern or practice investigation, the Civil Rights Division reviewed more than 35,000 pages of police records; interviewed and met with city, police and court officials, including the FPD’s chief and numerous other officers; conducted hundreds of in-person and telephone interviews, as well as participated in meetings with community members and groups; observed Ferguson Municipal Court sessions, and; analyzed FPD’s data on stops, searches and arrests. It found that the combination of Ferguson’s focus on generating revenue over public safety, along with racial bias, has a profound effect on the FPD’s police and court practices, resulting in conduct that routinely violates the Constitution and federal law. The department also found that these patterns created a lack of trust between the FPD and significant portions of Ferguson’s residents, especially African Americans.
The department found that the FPD has a pattern or practice of:
- Conducting stops without reasonable suspicion and arrests without probable cause in violation of the Fourth Amendment;
- Interfering with the right to free expression in violation of the First Amendment; and
- Using unreasonable force in violation of the Fourth Amendment.
The department found that Ferguson Municipal Court has a pattern or practice of:
- Focusing on revenue over public safety, leading to court practices that violate the 14th Amendment’s due process and equal protection requirements.
- Court practices exacerbating the harm of Ferguson’s unconstitutional police practices and imposing particular hardship upon Ferguson’s most vulnerable residents, especially upon those living in or near poverty. Minor offenses can generate crippling debts, result in jail time because of an inability to pay and result in the loss of a driver’s license, employment, or housing.
The department found a pattern or practice of racial bias in both the FPD and municipal court:
- The harms of Ferguson’s police and court practices are borne disproportionately by African Americans and that this disproportionate impact is avoidable.
- Ferguson’s harmful court and police practices are due, at least in part, to intentional discrimination, as demonstrated by direct evidence of racial bias and stereotyping about African Americans by certain Ferguson police and municipal court officials.
The findings are laid out in a 100-page report that discusses the evidence and what remedies should be implemented to end the pattern or practice. The findings include two sets of recommendations, 26 in total, that the Justice Department believes are necessary to correct the unconstitutional FPD and Ferguson Municipal Court practices. The recommendations include: changing policing and court practices so that they are based on public safety instead of revenue; improving training and oversight; changing practices to reduce bias, and; ending an overreliance on arrest warrants as a means of collecting fines.
The Justice Department will require that the recommendations and other measures be part of a court-enforceable remedial process that includes involvement from community stakeholders, as well as independent oversight. The Justice Department has provided its investigative report to the FPD and in the coming weeks, the Civil Rights Division will seek to work with the City of Ferguson and the Ferguson community to develop and reach an agreement for reform, using the recommendations in the report as the starting point.
The federal criminal investigation into the fatal shooting of Michael Brown sought to determine whether the evidence from the events that led to Brown’s death was sufficient to prove, beyond a reasonable doubt, that Wilson’s actions violated federal civil rights laws that make it a federal crime for someone acting with law enforcement authority to willfully violate a person’s civil rights. As part of the investigation, federal authorities reviewed physical, ballistic, forensic, and crime scene evidence; medical reports and autopsy reports, including an independent autopsy performed by the U.S. Department of Defense Armed Forces Medical Examiner Service; Wilson’s personnel records; audio and video recordings; internet postings, and; the transcripts from the proceedings before the St. Louis County grand jury. Federal investigators interviewed purported eyewitnesses and other individuals claiming to have relevant information. Federal prosecutors and agents re-interviewed dozens of witnesses to evaluate their accounts and obtain more detailed information. FBI agents independently canvassed more than 300 residences to locate and interview additional witnesses.
The standard of proof is the same for all criminal cases: that the defendant committed the crime beyond a reasonable doubt. However, unlike state laws, federal criminal civil rights statutes do not have the equivalent of manslaughter or a statute that makes negligence a crime. Federal statutes require the government to prove that Officer Wilson used unreasonable force when he shot Michael Brown and that he did so willfully, that is, he shot Brown knowing it was wrong and against the law to do so. After a careful and deliberative review of all of the evidence, the department has determined that the evidence does not establish that Darren Wilson violated the applicable federal criminal civil rights statute. The family of Michael Brown was notified earlier today of the department’s findings.
Due to the high interest in this case, the department took the rare step of publicly releasing the closing memo in the case. The report details, in over 80 pages, the evidence, including evidence from witnesses, the autopsies and physical evidence from the analysis of the DNA, blood, shooting scene and ballistics. The report also explains the law as developed by the federal courts and applies that law to the evidence.
DOJ Report on Shooting of Michael Brown
Ferguson Police Department Report
Pattern and Practice Charts
Pattern and Practice Typography
Jury Convicts Armed Felon Who Led Police on Interstate ChaseRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that a jury in Athens, Georgia today convicted James Marcus Lloyd, III, age 41 from Charleston, South Carolina of being a felon in possession of a firearm.
On June 24, 2013, Mr. Lloyd was stopped by a deputy with the Greene County Sheriff’s Office on Interstate 20 for several traffic violations. As the deputy stepped from his police car, Mr. Lloyd drove off, leading the police on a high-speed chase. During the chase, which reached speeds of 95 miles per hour, Mr. Lloyd passed numerous vehicles in the emergency lane, including semi-trailer tanker trucks. Eventually, Mr. Lloyd abandoned his car in the median of the Interstate and fled on foot before being caught and arrested by the police. In the path that Mr. Lloyd ran, a short distance from his car, the police found a loaded, semi-automatic 9mm pistol.
“James Marcus Lloyd, III, endangered innocent motorists and law enforcement with his high-speed flight from the police, and he endangered the community at large as a felon who possessed a firearm,” said U.S. Attorney Michael Moore. “With this jury verdict, he will be held accountable for both.”
The case was investigated by the Greene County Sheriff’s Department and the Bureau of Alcohol, Tobacco and Firearms (ATF). Assistant United States Attorneys Tamara Jarrett and Peter Leary are handling the prosecution for the Government.
Inquiries regarding the case should be directed to Pam Lightsey at the United States Attorney’s Office at 478-752-3511.
Iowa Man Sentenced to Federal Prison for Meth-Distribution ConspiracyRead the Press Release
A Mason City man was sentenced February 25, 2015, for his role in a Mason City area methamphetamine conspiracy.
Scott Lee Bailey, age 44, of Mason City, Iowa, received his prison term after an October 16, 2014, guilty plea. Bailey pled guilty to conspiracy to distribute methamphetamine. Bailey was previously convicted of a felony drug offense in Stockton, California, in 2007.
Information provided by the United States at the sentencing and change of plea hearings showed Bailey distributed methamphetamine to confidential informants in the Mason City area. On May 1, 2014, law enforcement officers executed a search warrant at defendant’s residence, and his 2001 Chevrolet. Officers seized from the residence a handgun, $5,613 in U.S. currency, prescription pills, surveillance equipment, baggies, and narcotic paraphernalia. Located in defendant’s vehicle was 18.72 grams 99% pure methamphetamine.
Bailey was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Bailey was sentenced to 292 months’ imprisonment. A special assessment of $100 was imposed. He must also serve an 8-year term of supervised release after the prison term. There is no parole in the federal system.
Bailey is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Jack Lammers and investigated by the North Central Iowa Narcotics Task Force, Cerro Gordo County Sheriff’s Office, Mason City Police Department, Iowa Division of Narcotics Enforcement, and Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is CR 14-3046.
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Illinois Man Charged with Wire FraudRead the Press Release
St. Louis, MO – JASON CRIPE, Windsor, Illinois, was charged in a criminal complaint alleging wire fraud in connection with a bogus advertisement on Craigslist. According to the complaint, Cripe advertised two Bobcat tractors for sale on the website and accepted $12,800 in partial payment. When the delivery date came and went, Cripe is alleged to have offered numerous excuses for his non-delivery. Ultimately, after promising to repay the victims’ money, Cripe is alleged to have cut off communications with the victims and cannot be located. If any member of the public is aware of Cripe’s whereabouts, they are asked to contact the St. Louis office of the Secret Service at 314-529-2238.
If convicted, wire fraud carries a maximum penalty of 20 years in prison and/or a fine of $250,000. Restitution to the victims is also mandatory. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the St. Louis Office of the U.S. Secret Service. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in a criminal complaint are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Huntsville Man Indicted in Conspiracy to Bribe Police Officer ArrestedRead the Press Release
BIRMINGHAM - Federal authorities today arrested a Huntsville man on charges he conspired with Huntsville Police Officer Lewis Hall in efforts to fix cocaine trafficking charges against an individual arrested by another Huntsville officer, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Huntsville Police Chief Lewis Morris.
A federal grand jury last week indicted CEDRIC DUANE RYANS, 42, on charges of conspiracy, bribery and obstruction of justice. The FBI arrested Ryans this morning.
The indictment charges that Ryans conspired with Hall to pay a second officer $5,000 if that officer would claim a July 29 vehicle search he conducted, which resulted in drug-trafficking charges against an "Individual A," was unlawful, thereby making the criminal case against that individual go away. The Huntsville officer who conducted the vehicle search and, subsequently, assisted in the investigation of Hall and Ryans, is identified only as "Cooperating Officer."
Hall pleaded guilty to the conspiracy Feb. 24 and is scheduled for sentencing July 14. According to Ryans' indictment, Ryans provided Hall money to bribe the Cooperating Officer.
On July 31, Ryans and Hall discussed offering the Cooperating Officer a bribe to tell other law enforcement officers that his search of Individual A's vehicle, which uncovered about three ounces of cocaine, was unlawful, according to Ryans' indictment. Hall offered the $5,000 bribe to Cooperating Officer that same day. On Aug. 12, Ryans gave Hall cash to deliver to Cooperating Officer, and Hall delivered $1,000 to the officer, according to Ryans' indictment. Ryans gave Hall more cash on Aug. 24 to pay the officer, the indictment says.
On Sept. 8, Ryans discussed the "fixed case" with Individual A, and Hall had two other conversations in November with Cooperating Officer about what the officer was supposed to say when asked about the search of Individual A's vehicle, the indictment says.
The bribery count charges Ryans with corruptly agreeing to give $5,000 to the Cooperating Officer, an agent of the City of Huntsville and its police department, which received more than $10,000 in federal benefits within one year, to influence the officer in how he reported the July 29 vehicle search.The obstruction of justice count charges Ryans with offering the bribe with the intent to delay or prevent the reporting of a felony or possible felony offense and the violation of conditions of supervised release by Individual A. According to Hall's plea agreement with the government, Individual A was on supervised release following a 15-year prison sentence for conspiracy to distribute a controlled substance when the Cooperating Officer pulled him over on a traffic stop July 29.
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for the bribery count is 10 years in prison and a $250,000 fine, and the maximum for the obstruction count is 20 years in prison and a $250,000.The FBI investigated the case in conjunction with the Huntsville Police Department. Assistant U.S. Attorney George A. Martin Jr. is prosecuting the case.
Honduran National Sentenced for Violating the Federal Gun Control ActRead the Press Release
U.S. Attorney Kenneth A. Polite announced that SANTOS GAVARRETE-NATAREN, 36, a native of Honduras, was sentenced today for knowingly delivering a firearm to a common carrier without written notice.
U.S. District Judge Kurt D. Engelhart sentenced GAVARRETE-NATAREN to 24 months incarceration, followed by 5 years of supervised release and a $1,000 fine.
According to court documents, on or about December 2, 2013, Dip Shipping, a common carrier based in Kenner, received a plastic container for international shipment at its West Bank drop-off location. The container was purportedly from Alfredo Barahona, addressed to Yessenia Martinez in Yoro, Honduras. The shipping label noted that the shipment contained kitchen items and shoes.
While scanning packages with a company-owned X-ray machine, a Dip Shipping employee observed the image of two firearms inside the container. On December 9, 2013, HSI Special Agents were notified of the discovery and responded to Dip Shipping. Upon inspecting the container, the agents discovered that it contained a Smith & Wesson model 642, .38 revolver (SN: CJJ4544) and a Lorcin model L380, .380 semi-automatic handgun (SN: 125407).
HSI agents determined that GAVARRETE shipped the package. GAVARRETE admitted that he did not apply for an export license to ship the firearms. Further, he did not advise Dip Shipping that the package contained firearms.
U.S. Attorney Polite praised the work of the Homeland Security Agents investigating this matter. Assistant United States Attorney Emily K. Greenfield was in charge of prosecuting this case.
Heroin Dealer Pleads Guilty to Violating Federal Drug and Firearms LawsRead the Press Release
PITTSBURGH – Neil Thomas, a/k/a “Menace”, was convicted of conspiring to distribute 100 grams or more of heroin and possessing a firearm in furtherance of a drug trafficking crime, United States Attorney David J. Hickton announced today.
Thomas, 30, formerly of Moon Twp. and Imperial, Pa., pled guilty before United States District Judge David S. Cercone. Judge Cercone scheduled sentencing to occur on July 8, 2015, at 11 a.m.
In support of the guilty plea, the Court was informed that Thomas distributed hundreds of grams of heroin to other heroin dealers in Western Pennsylvania during the months leading up to his arrest in October 2013. The Court was also informed that Thomas stored heroin and firearms at his residence in Allegheny County and would meet customers there, sometimes while his children were also at the residence. A loaded Beretta pistol was found during the service of a search warrant at Thomas’s residence on Oct. 17, 2013, in a location that was accessible to children. In addition, the Court was informed that, had the case gone to trial, the prosecution would have presented evidence that Thomas threatened to harm an associate who owed money for heroin and Thomas fired shots into an apartment building in August 2013 where another drug-trafficking associate he was feuding with lived.
The law provides for a maximum total sentence of at least 15 years and up to life in prison and a fine of up to $8,250,000.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Federal Bureau of Investigation and the Pennsylvania Attorney General’s Office led the multi-agency investigation of this case that also included the Federal Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Moon Township Police Department, the North Fayette Police Department, the Pittsburgh Bureau of Police, the Allegheny County Sheriff’s Office, the Pennsylvania State Police, the McKees Rocks Police Department, the Cranberry Township Police Department, the McKeesport Police Department, and the Wilkinsburg Police Department.
Hartford Man Convicted of Multiple Drug and Gun OffensesRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that RASHAUD JONES, also known as “Buck,” 32, of Hartford and Windsor, has been convicted of multiple narcotics and firearm offenses. On March 2, after a week-long trial before U.S. District Judge Michael P. Shea in Hartford, a jury found JONES guilty of all counts in a seven-count indictment.
This matter was investigated by the Drug Enforcement Administration’s Hartford Task Force, the Hartford Police Department and the Bristol Police Department. The case is being prosecuted by Assistant U.S. Attorneys Geoffrey M. Stone and Peter D. Markle.
According to the evidence disclosed during the trial, this matter stems from a joint investigation led by the Drug Enforcement Administration’s Hartford Task Force. On December 18, 2012, investigators conducted a motor vehicle stop of JONES and seized more than $9,000 in cash, three cellular telephones and other evidence. Investigators then conducted court-authorized searches of JONES’s apartment at 232 Westland Street in Hartford and a car parked at the residence and seized approximately 935 grams of crack cocaine, approximately 635 grams of powder cocaine, narcotics packaging material, a loaded .22 Taurus revolver, a 9mm High Point pistol, a Ruger 345 .45 caliber firearm, a loaded .45 caliber magazine, a loaded .9mm magazine and additional ammunition.
Prior to December 2012, JONES had been convicted of multiple felony offenses.
JONES was found guilty of one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of cocaine base (“crack cocaine”), one count of possession with intent to distribute 280 grams or more of cocaine base, one count of possession with intent to distribute 500 grams or more of cocaine, one count of possession with intent to distribute and distribution of 28 grams or more of cocaine base, possession of a firearm by a previously convicted felon, possession of a firearm in furtherance of a drug trafficking crime, and possession of ammunition by a previously convicted felon.
Judge Shea scheduled sentencing for May 26, 2015, at which time JONES faces a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.PUBLIC AFFAIRS CONTACT:
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[email protected]Former Utilities Workers Union President Admits Embezzling $31KRead the Press Release
PITTSBURGH – A former union official pleaded guilty in federal court to a charge of union embezzlement, United States Attorney David J. Hickton announced today.
Michael C. Trembulak, 41, of Pittsburgh, Pa., pleaded guilty to one count before United States District Court Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Trembulak, while serving as the President of the Utility Workers Union of America AFL-CIO Local 475, embezzled approximately $31,528.65 from the union by making unauthorized debit card cash withdrawals, charges and purchases, and unauthorized teller cash withdrawals, from the union’s checking account during the period from April 19, 2012, to Sept. 19, 2012.
Judge Cercone scheduled sentencing for June 29, 2015 at 10 a.m. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Trembulak on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The Department of Labor, Office of Labor-Management Standards conducted the investigation leading to the indictment in this case.
Former UBS Client Sentenced to Federal Prison for Hiding Income and Assets from IRS in Foreign Bank AccountsRead the Press Release
ATLANTA - Gregg A. Kaminsky has been sentenced for wilfully failing to file a Foreign Bank Account Report with the U.S. Department of Treasury in connection with his concealment of income and assets in accounts in Switzerland, Hong Kong, and Thailand over several years, as well as his failure to report certain income earned in the virtual world, “Second Life.”
“Federal tax revenue is crucial to protecting our borders; fighting terrorism, cybercrime, and other national security threats; providing disaster relief; and to performing other critical government functions,” said Acting U. S. Attorney John Horn. “This office is committed to investigating and prosecuting those who intentionally avoid paying their fair share, whether their schemes involve income earned or hidden offshore, here at home, or even in a virtual world.”
“U.S. citizens who seek to avoid their tax obligations by hiding income in undeclared bank accounts abroad should by now be fully on notice that they will be held accountable for their actions, both civilly and criminally,” stated IRS Criminal Investigation Special Agent in Charge, Veronica F. Hyman-Pillot. “Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don't.”
According to Acting U.S. Attorney Horn, the charges and other information presented in court: Citizens and residents of the United States who have a financial interest in, or signature authority over, a financial account in a foreign country with an aggregate value of more than $10,000 at any time during a calendar year are required to file with the U.S. Department of Treasury a “Report of Foreign Bank and Financial Accounts,” commonly referred to as the “FBAR.” The FBAR for the applicable year must be filed by June 30 of the following year.
Kaminsky is an Internet entrepreneur who serves as the Chief Executive Officer of Circlenet LLC, based in Atlanta, Georgia. From 2000 through mid-2009, Kaminsky owned and controlled a foreign bank account with Union Bank of Switzerland AG (“UBS”), one of the biggest banks in Switzerland and largest wealth managers in the world. By 2006, Kaminsky’s UBS account held approximately $1.1 million. From time to time between 2002 and 2009, Kaminsky caused funds to be wire-transferred from his UBS account in Switzerland to other foreign bank accounts controlled by him in Thailand and Hong Kong. Also during that time, Kaminsky caused his income from at least two different U.S. companies to be direct-deposited into his UBS account in Switzerland.
Yet, over this period, Kaminsky did not disclose his UBS account or other foreign financial accounts to the U. S. Treasury Department as required, and thereby concealed several hundred thousand dollars in taxable income, interest, and dividends from the U.S. Internal Revenue Service (IRS).
In addition, in 2007 and 2008, Kaminsky omitted his UBS account and associated income from Free Applications for Federal Student Aid (FAFSA) that he electronically filed with the U.S. Department of Education in order to qualify for need-based federal financial aid to fund his tuition for an Executive MBA program at Emory University. At the time of the FAFSA applications, Kaminsky controlled over a half million dollars in his UBS account, which would have made him ineligible for federal student loan assistance.
On June 30, 2008, the U.S. Department of Justice sought court approval to compel UBS to disclose the identities of U.S. account holders who may be using UBS accounts to hide assets overseas and thereby evade U.S. taxes. The request and the order authorizing it were widely reported by the media throughout the United States, and this coverage continued throughout 2008 and 2009 as the U.S., UBS, and Switzerland negotiated a resolution and UBS began disclosing U.S. account holders to the IRS.
Following this news, Kaminsky closed his UBS account and transferred the balance of his UBS account to an account that he controlled at HSBC Bank in Hong Kong. Further, in spring 2010, Kaminsky filed FBARs for his Swiss and Hong Kong accounts for the very first time, also filing amended individual income tax returns for 2007 and 2008 that disclosed the previously unreported income in his UBS account. However, in his amended 2007 and 2008 returns, and in his subsequently filed returns for 2009 through 2012, Kaminsky still failed to report nearly $150,000 in taxable income earned from his business activities in the virtual world, “Second Life.”
Participants in Second Life, referred to as “residents,” can engage in a wide variety of business activities, including buying, renting, and sub-leasing virtual land and buying and selling other virtual goods, services, and experiences for their “avatars.” Transactions are conducted using a virtual currency, “Linden Dollars.” Linden Dollars can be bought and traded on the “Linden Exchange,” and are redeemable for cash.
Including his virtual world income, Kaminsky failed to report over $400,000 in income to the IRS between 2000 and 2012, resulting in a loss to the IRS of approximately $125,000.
Kaminsky, 46, of Atlanta, Georgia, was sentenced today to serve four months in federal prison to be followed by two years of supervised release, two months of home confinement, and 200 hours of community service. Kaminsky was also ordered to pay restitution to the IRS in the amount of $91,983. Kaminsky was convicted on these charges on December 18, 2014, after he pleaded guilty. As part of his plea agreement with the United States, Kaminsky was also required to pay a civil penalty to the IRS in the amount of $250,635.20, which is equivalent to fifty percent of the value of the balance in Kaminsky’s HSBC account in Hong Kong as of June 30, 2009.
This case was investigated by Special Agents of the Criminal Investigation Division of the Internal Revenue Service. Valuable assistance was also provided by Special Agents of the U.S. Department of Education, Office of Inspector General.
Assistant United States Attorney David M. Chaiken prosecuted the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/Former Truck Driver Found Guilty on ChargesRead the Press Release
CONTACT: Margaret McFarland
PHONE: (716) 843-5877
FAX: (716) 551-3051
BUFFALO, N.Y.– A federal jury in Buffalo has returned a verdict of guilty of all counts of an Indictment charging David Allen Vickers, 50, of Stanley, NY with transportation of minors with the intent to have sex, announced U.S. Attorney William J. Hochul, Jr., of the Western District of New York.“That this defendant continuously abused numerous children over almost a quarter of a century makes him one of the area’s most prolific and dangerous abusers we have convicted,” said U.S. Attorney Hochul. “Thanks to the courage of four of the victims who testified, today’s verdicts mean that this defendant will never again harm another child.”
Assistant U.S. Attorneys Aaron J. Mango and Elizabeth R. Moellering stated that the jury found the defendant guilty of transporting two minors in interstate commerce with the intent to engage in criminal sexual activity. According to the evidence introduced at trial, the defendant, an over the road truck driver, transported two victims to Canada, New Jersey and Pennsylvania, and repeatedly abused and molested them while he was making deliveries. This abuse occurred in the time frame of 1999 to 2007.
The trial evidence also disclosed that the defendant abused other children, with the first abuse beginning in 1983. This pattern of abuse included extensive psychological manipulation of the victims (sometimes referred to as “grooming”), and was facilitated through the defendant’s projection of benevolence to the victims’ families. The defendant also established and operated a bed and breakfast on Seneca Lake, “Paradise on the Lake,” to which he took the eventual victims in an effort to manipulate and gain their trust. The defendant also gave the victims alcohol, cigarettes, toys, and access to ATVs.
The defendant’s cover was so successful, in fact, that both of the victims named in the Indictment had at one time been assigned to the custody of the defendant by a Family Court Judge.
The sentencing is scheduled for June 24, 2015. The charges carry a mandatory minimum penalty of 10 years imprisonment, a maximum penalty of life imprisonment, a fine of $250,000, or both.
The trial was the culmination of an investigation on the part of Agents of the Federal Bureau of Investigation under the direction of Brian P. Boetig, Special Agent in Charge, and the Batavia City Police Department under the direction of Chief Shawn Heubusch. The evidence was presented to the jury by Assistant U.S. Attorneys Aaron J. Mango and Elizabeth R. Moellering. The case was heard by United States District Court Judge Richard J. Arcara.
Former New York City Council Member Daniel Halloran Sentenced in White Plains Federal Court to 10 Years in Prison for Role in Bribery and Fraud SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that former New York City Council Member DANIEL HALLORAN was sentenced today in White Plains federal court to 10 years in prison in connection with his role in arranging the bribery of New York City Republican leaders to allow New York State Senator Malcolm Smith, a Democrat, to run as a Republican candidate for New York City Mayor in 2013, and accepting a $15,000 cash bribe in exchange for designating up to $80,000 in New York City funds to a non-profit entity that would allow the money to be embezzled through a no-show job. HALLORAN was sentenced by U.S. District Judge Kenneth M. Karas, who presided over the two-month trial that resulted in HALLORAN’S conviction in August 2014.
U.S. Attorney Preet Bharara said: “When elected officials, like Daniel Halloran, not only corrupt themselves but, unseen, corrupt the body politic from within they undermine the public’s confidence in a representative form of government. I would like to thank our law enforcement partners at the FBI and the Rockland County District Attorney’s Office for working with us to ensure that the defendant was pursued, prosecuted, and faced justice.”
According to the Complaint and the Indictment filed in federal court, the evidence admitted at trial, and statements made at various proceedings in this case, including today’s sentencing:
HALLORAN was elected to the New York City Council in 2009, representing a district in Queens, New York. While a member of the city council, HALLORAN participated in two overlapping criminal schemes that involved the payment of bribes to obtain official action. First, HALLORAN arranged for $110,000 in cash bribes to be paid to leaders of the Republican Party so that they would allow Smith to run for mayor on the Republican Party’s ballot line. Second, HALLORAN accepted an up-front kickback of $15,000 for designating up to $80,000 of New York City Council discretionary funding to a company he believed was controlled by those who paid him the bribes.
The Bribery of Republican Party Leaders
From November 2012 until his arrest in April 2013, HALLORAN agreed with Smith, an undercover FBI agent posing as a wealthy real estate developer (the “UC”), and a cooperating witness (“CW”) to bribe New York City Republican Party leaders in exchange for their authorization of Smith to appear as a Republican candidate for New York City Mayor in 2013, even though Smith is a registered Democrat.
In furtherance of the scheme, HALLORAN arranged for the UC and the CW to meet Vincent Tabone, the Vice Chairman of the Queens County Republican Party, Joseph Savino, the Chairman of the Bronx County Republican Party, and other party leaders. HALLORAN also negotiated the size of bribes that the party leaders required in order to authorize Smith to run on the Republican ballot line. During a meeting with the UC, Tabone accepted a $25,000 cash bribe and agreed to accept another $25,000 after his committee authorized Smith to compete in the Republican primary. Savino similarly accepted a $15,000 cash bribe and agreed to accept another $15,000 after he voted to authorize Smith to compete for the Republican ballot line. In return for his efforts, HALLORAN accepted $15,500 as a down payment on a “broker’s” fee of at least $75,000 and expected to be appointed First Deputy Mayor if Smith was elected mayor.
Bribery for City Council Discretionary Funding
From August 2012 until his arrest in April 2013, HALLORAN accepted an up-front kickback of $15,000 cash from the UC and the CW in exchange for agreeing to steer up to $80,000 in New York City Council discretionary funding to a consulting company he believed was controlled by the UC and the CW (the “Company”).
At a meeting on September 7, 2012, at which HALLORAN and the UC discussed HALLORAN’s need to raise money for his congressional campaign, HALLORAN agreed to hire someone of the CW’s choosing for a congressional staff or some equivalent position, and to help him raise money for his campaign. During the discussion, HALLORAN said: “That’s politics, that’s politics, it’s all about how much. Not whether or will, it’s about how much, and that’s our politicians in New York, they’re all like that…And they get like that because of the drive that the money does for everything else. You can’t do anything without the f***ing money.” During the meeting, the CW paid HALLORAN $7,500. And near the end of the meeting, HALLORAN remarked: “Money is what greases the wheels – good bad, or indifferent.”
In furtherance of this scheme, HALLORAN wrote two letters on New York City Council letterhead about this funding, one to civic organizations and the other to the Company. Despite suggesting in these letters that work would be done by the Company to support the allotment of taxpayer money, HALLORAN agreed with the UC and the CW that the Company would provide no services.
In addition to the prison term, HALLORAN, 42, of Queens, New York, was also sentenced to two years of supervised release, and ordered to forfeit $45,300. HALLORAN’s co-conspirators, Smith and Tabone, were convicted for their roles in the bribery conspiracy in January 2015 and are currently scheduled to be sentenced by Judge Karas on July 1, 2015.
In the sentencing of HALLORAN, Judge Karas remarked, “This was a very serious crime. When a public official gets into cars and takes wads of cash or promises public money in return for cash to the politician, it is so troubling. It causes us all to be cynical about our leaders. It causes us to doubt that our leaders are looking after us. And it's a very serious matter.”
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and Rockland County District Attorney’s Office.
This case is being handled by the Office’s White Plains Division and Public Corruption Unit. Assistant United States Attorneys Douglas B. Bloom and Justin Anderson are in charge of the prosecution.
Former Grady Hospital Payroll Director Sentenced for Embezzling from GradyRead the Press Release
ATLANTA - Donald Thomas, the former payroll director for the Grady Memorial Hospital Corporation, was sentenced to seven years, three months in prison for stealing nearly half a million dollars from the longstanding public institution.
“As a result of the defendant’s embezzlement, Grady Hospital lost hundreds of thousands of dollars that otherwise would have gone towards patient care,” said Acting U.S. Attorney John Horn. “Grady has made monumental changes to restore its financial health, and Thomas used his position of trust at the hospital to harm these efforts simply for his own personal gain. Today he goes to prison.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This sentencing is the price paid for stealing funds from a valued health care institution such as Grady Hospital. The FBI will continue to provide investigative assistance to help protect these institutions that give so much back to their community as Grady does.”
According to Acting U.S. Attorney Horn, the charges and other information presented in court: From December 1994 through June 2011, Thomas served as Assistant Controller for Grady Memorial Hospital Corporation. Grady Hospital has provided health care to thousands of Atlanta-area residents – a large portion of whom are uninsured – for over one hundred years. It has long provided low-cost or free medical care to indigent patients.
While serving as payroll director, Thomas had nearly exclusive control over Grady’s payroll systems. For over three of those years, he falsified additional vacation pay and severance pay for former Grady employees and had the funds deposited into his own accounts. Because Thomas was careful about reversing his fraudulent changes to the payroll system and had most of the funds deposited into a business account, rather than his own, the scheme went undetected. Thomas was laid off in a workforce reduction in 2011, before the fraud was discovered.
Prior to leaving Grady in 2011, Thomas became less careful about covering his tracks, and as a result, some of the falsified pay was reported as income on the former employees’ federal W-2 tax forms. In early 2012, one of those employees noticed the inflated income amount and reported it to Grady. Further investigation led to the discovery of 136 fraudulent transactions in all. Over the course of the scheme, Thomas stole over $480,000.
Thomas, 55, of Atlanta, Georgia, was sentenced by U.S. District Judge Charles A. Pannell, Jr. to seven years and three months in federal prison and three years of supervised release, and ordered to pay $482,851.76 in restitution to Grady Hospital. On December 5, 2014, a jury convicted Thomas of six counts of theft from an organization receiving federal funds, six counts of wire fraud, and two counts of bank fraud. At trial, witnesses from Grady explained how Thomas manipulated the payroll system, as well as the effect of the financial loss on Grady’s ability to provide medical services.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Shanya Dingle and G. Scott Hulsey prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.Former Corporate Executives Sentenced for Securities Fraud and Tax Offenses in Multi-Million Dollar SchemeRead the Press Release
Gilbert Fiorentino, 54, and Carl Fiorentino, 57, both of Coral Gables, Florida, were sentenced yesterday in Federal Court in the Southern District of Florida, in connection with their participation in an illegal scheme to obtain more than $11 million dollars in kickbacks and other benefits, and to conceal this illicit income from the IRS, while employed as senior executives at Systemax, Inc. (“Systemax”) and its subsidiary, TigerDirect, Inc. (“TigerDirect”). Carl Fiorentino was sentenced to 80 months’ imprisonment. Gilbert Fiorentino was sentenced to 60 months’ imprisonment. A hearing to determine the remaining amount of restitution owed to Systemax by the defendants, who are brothers, has been scheduled for April 3, 2015.
On December 2, 2014, Carl Fiorentino pleaded guilty to one count of conspiracy to commit mail and wire fraud, and one count of tax evasion, and Gilbert Fiorentino pleaded guilty to one count of conspiracy to commit securities fraud and to impair and impede the lawful functions of the Internal Revenue Service.
The sentences were announced by Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Loretta E. Lynch, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office.
U.S. Attorney Wifredo A. Ferrer stated, “Gilbert and Carl Fiorentino hid their ill-gotten financial gains from the IRS and the shareholders of Systemax. They violated their positions of trust by accepting illegal kickbacks, driving up the price of the consumer electronics and passing the price increase to the consumer. Yesterday’s sentences demonstrate our commitment to root out corporate fraud and enforce the laws that protect investors in financial markets.”
“For years, the brothers Fiorentino financed their luxury lifestyles with illicit kickbacks, all the while concealing their fraudulent gains from the shareholders of Systemax and the IRS. Such illegal self-enrichment, at the expense of a publicly-traded corporation and the IRS, cannot be tolerated,” stated United States Attorney Lynch. “Yesterday’s sentences should serve as a stern reminder that those who commit corporate fraud will be held accountable.”
Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, stated, “The Fiorentinos financed their extravagant lifestyle with $11 million in kickbacks. These kickbacks paid for, among other things, a waterfront Florida mansion. But the excess ends today. This sentence should put anyone who plans to shakedown shareholders on notice.”
IRS-CI Special Agent-in-Charge Kelly R. Jackson stated, “These high-ranking corporate officials undermined the process of fair and open competition and broke the law when they obtained unlawful kickbacks. They then took steps to hide these kickbacks from Systemax and the IRS. Yesterday’s sentencing sends a clear message to other corporate officials that this type of criminal behavior will be punished. IRS Criminal Investigation will continue to work with its law enforcement partners to investigate corporate officers who misuse their positions of trust and violate the tax laws.”
Systemax had its principal place of business in Port Washington, New York, and sold personal computers and other consumer electronics through its websites, retail stores, and direct mail catalogs including TigerDirect, CompUSA, and Circuit City. In fiscal year 2010, Systemax had annual sales revenue of approximately $3.6 billion according to its public filings. Gilbert Fiorentino was a director of Systemax and was the Chief Executive Officer of its Technology Product Group, including its subsidiary TigerDirect. Carl Fiorentino was the former president of TigerDirect. Both defendants worked at TigerDirect’s Miami offices before they were terminated on April 18, 2011.
As senior executives of Systemax and TigerDirect, Gilbert Fiorentino and Carl Fiorentino had responsibility for, among other things, purchasing and sourcing hundreds of millions of dollars’ worth of computer and electronics items for Systemax and its various operations. Gilbert Fiorentino and Carl Fiorentino conspired with each other and third parties to obtain unlawful kickbacks in exchange for steering business to companies that paid the kickbacks. For example, Carl Fiorentino received millions of dollars in payments from one TigerDirect supplier, including more than $3 million to pay for his waterfront residence in Gables Estates and millions of dollars’ worth of luxury furniture, art, and high-end electronics. Gilbert Fiorentino received hundreds of thousands of dollars in payments. These included deliveries of gold coins, cash handed over in the parking lot of the Miami offices of TigerDirect, and furniture and other goods and services delivered to his Gables Estates waterfront home.
In connection with this scheme, Carl and Gilbert Fiorentino filed false United States Individual Income Tax Returns and also regularly signed conflict of interest questionnaires in which they falsely and fraudulently concealed from Systemax their receipt of cash and other remuneration from vendors who did business with the company. In doing so, they mislead Systemax’s auditors and prevented them from performing accurate reviews and audits of the company’s books, records, and accounts. Additionally, when Carl Fiorentino learned that he was under investigation by the government, he obstructed justice by instructing witnesses to lie to federal authorities to conceal his criminal conduct.
This case was originally investigated by the U.S. Attorney’s Office for the Eastern District of New York with the assistance of the FBI New York Field Office and the IRS-CI Miami Field Office. Carl Fiorentino was previously charged in the Eastern District of New York on June 18, 2013, with conspiracy to commit mail and wire fraud, multiple counts of mail and wire fraud, and money laundering. The case involving Carl Fiorentino was transferred to the Southern District of Florida by court order on January 6, 2014.
The sentence was imposed by United States District Judge Jose E. Martinez.
The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy of the Southern District of Florida and Whitman G.S. Knapp of the Eastern District of New York.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement and investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Corporate Executives Sentenced for Securities Fraud and Tax Offenses in Multi-Million Dollar SchemeRead the Press Release
Gilbert Fiorentino, 54, and Carl Fiorentino, 57, both of Coral Gables, Florida, were sentenced yesterday in Federal Court in the Southern District of Florida, in connection with their participation in an illegal scheme to obtain more than $11 million dollars in kickbacks and other benefits, and to conceal this illicit income from the IRS, while employed as senior executives at Systemax, Inc. (“Systemax”) and its subsidiary, TigerDirect, Inc. (“TigerDirect”). Carl Fiorentino was sentenced to 80 months’ imprisonment. Gilbert Fiorentino was sentenced to 60 months’ imprisonment. A hearing to determine the remaining amount of restitution owed to Systemax by the defendants, who are brothers, has been scheduled for April 3, 2015.
On December 2, 2014, Carl Fiorentino pleaded guilty to one count of conspiracy to commit mail and wire fraud, and one count of tax evasion, and Gilbert Fiorentino pleaded guilty to one count of conspiracy to commit securities fraud and to impair and impede the lawful functions of the Internal Revenue Service.
The sentences were announced by Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Loretta E. Lynch, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Kelly R. Jackson, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office.
U.S. Attorney Wifredo A. Ferrer stated, “Gilbert and Carl Fiorentino hid their ill-gotten financial gains from the IRS and the shareholders of Systemax. They violated their positions of trust by accepting illegal kickbacks, driving up the price of the consumer electronics and passing the price increase to the consumer. Yesterday’s sentences demonstrate our commitment to root out corporate fraud and enforce the laws that protect investors in financial markets.”
“For years, the brothers Fiorentino financed their luxury lifestyles with illicit kickbacks, all the while concealing their fraudulent gains from the shareholders of Systemax and the IRS. Such illegal self-enrichment, at the expense of a publicly-traded corporation and the IRS, cannot be tolerated,” stated United States Attorney Lynch. “Yesterday’s sentences should serve as a stern reminder that those who commit corporate fraud will be held accountable.”
Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, stated, “The Fiorentinos financed their extravagant lifestyle with $11 million in kickbacks. These kickbacks paid for, among other things, a waterfront Florida mansion. But the excess ends today. This sentence should put anyone who plans to shakedown shareholders on notice.”
IRS-CI Special Agent-in-Charge Kelly R. Jackson stated, “These high-ranking corporate officials undermined the process of fair and open competition and broke the law when they obtained unlawful kickbacks. They then took steps to hide these kickbacks from Systemax and the IRS. Yesterday’s sentencing sends a clear message to other corporate officials that this type of criminal behavior will be punished. IRS Criminal Investigation will continue to work with its law enforcement partners to investigate corporate officers who misuse their positions of trust and violate the tax laws.”
Systemax had its principal place of business in Port Washington, New York, and sold personal computers and other consumer electronics through its websites, retail stores, and direct mail catalogs including TigerDirect, CompUSA, and Circuit City. In fiscal year 2010, Systemax had annual sales revenue of approximately $3.6 billion according to its public filings. Gilbert Fiorentino was a director of Systemax and was the Chief Executive Officer of its Technology Product Group, including its subsidiary TigerDirect. Carl Fiorentino was the former president of TigerDirect. Both defendants worked at TigerDirect’s Miami offices before they were terminated on April 18, 2011.
As senior executives of Systemax and TigerDirect, Gilbert Fiorentino and Carl Fiorentino had responsibility for, among other things, purchasing and sourcing hundreds of millions of dollars’ worth of computer and electronics items for Systemax and its various operations. Gilbert Fiorentino and Carl Fiorentino conspired with each other and third parties to obtain unlawful kickbacks in exchange for steering business to companies that paid the kickbacks. For example, Carl Fiorentino received millions of dollars in payments from one TigerDirect supplier, including more than $3 million to pay for his waterfront residence in Gables Estates and millions of dollars’ worth of luxury furniture, art, and high-end electronics. Gilbert Fiorentino received hundreds of thousands of dollars in payments. These included deliveries of gold coins, cash handed over in the parking lot of the Miami offices of TigerDirect, and furniture and other goods and services delivered to his Gables Estates waterfront home.
In connection with this scheme, Carl and Gilbert Fiorentino filed false United States Individual Income Tax Returns and also regularly signed conflict of interest questionnaires in which they falsely and fraudulently concealed from Systemax their receipt of cash and other remuneration from vendors who did business with the company. In doing so, they mislead Systemax’s auditors and prevented them from performing accurate reviews and audits of the company’s books, records, and accounts. Additionally, when Carl Fiorentino learned that he was under investigation by the government, he obstructed justice by instructing witnesses to lie to federal authorities to conceal his criminal conduct.
This case was originally investigated by the U.S. Attorney’s Office for the Eastern District of New York with the assistance of the FBI New York Field Office and the IRS-CI Miami Field Office. Carl Fiorentino was previously charged in the Eastern District of New York on June 18, 2013, with conspiracy to commit mail and wire fraud, multiple counts of mail and wire fraud, and money laundering. The case involving Carl Fiorentino was transferred to the Southern District of Florida by court order on January 6, 2014.
The sentence was imposed by United States District Judge Jose E. Martinez.
The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy of the Southern District of Florida and Whitman G.S. Knapp of the Eastern District of New York.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement and investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Florida Man and Woman Indicted on Fraud Charge Involving Tax SchemeRead the Press Release
St. Louis, MO – ALEXSANDR RABIKOV, a native of Belarus and permanent resident of the United States, living in the Ft. Lauderdale, Florida area, and his girlfriend, YULIA BELOMYTTSEVA, a Russian citizen also residing in the Ft. Lauderdale, Florida area, were indicted by a federal grand jury February 11, charging the couple with conspiracy to steal government funds and commit aggravated identity theft. They made their initial appearance in federal court in St. Louis today.
Both have been charged with participating in a conspiracy that targeted a local bank for personal identifiers and spanned across the country and overseas.
According to the indictment and other court papers, Rabikov and Belomyttseva accepted tax refunds paid out by the United States upon receipt of false and fraudulent tax returns filed in the names of American taxpayers. One source of identifiers was the computer system of the Southern Commercial Bank, a financial institution headquartered in St. Louis. Rabikov and Belomyttseva are alleged to have directed proceeds of the conspiracy to financial accounts they controlled in the names of other individuals. It is alleged that members of the conspiracy pay account holders to turn over control of accounts so that the proceeds of the conspiracy are not all directed to financial accounts held in the Defendants’ names. Rabikov is alleged to have recruited Belomyttseva, his girlfriend, into the conspiracy.
If convicted, both defendants face a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by IRS-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Federal Jury Finds Munhall Man Guilty of Illegally Possessing Weapons and AmmoRead the Press Release
PITTSBURGH - Andre Ruffin, a former resident of Munhall, Pa., was convicted by a federal jury of five men and seven women in front of Senior United States District Judge Terrence F. McVerry in Pittsburgh, United States Attorney David J. Hickton announced today. Ruffin was convicted of being a felon in possession of a firearm and/or ammunition.
According to information that was presented at pretrial hearings, Ruffin had been under investigation, by the Allegheny County Police – Homicide Section, for the death of Loretta Jackson that occurred on April 11, 2013. During that investigation, as was revealed at trial, a search warrant was executed at Ruffin’s home on April 22, 2013. During the search of Ruffin’s residence officers recovered an assault weapon and a component for an assault weapon known as a lower receiver. Officers also recovered multiple rounds of various caliber ammunition, a bullet proof vest, firearms holsters, firearms magazines, and various firearms paraphernalia and components.
Subsequent to the search, Special Agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) obtained records and conducted interviews that demonstrated that Ruffin had used his girlfriend (as a “straw purchaser”) to purchase the two firearms from Anthony Arms and Accessories, a West Mifflin firearms dealer, for his own possession. As a convicted felon, Ruffin was not legally permitted to purchase or possess firearms or ammunition. ATF also obtained records and information revealing more than a dozen deliveries of firearms-related parts and paraphernalia were made to the Ruffin home.
Federal law prohibits a person who has been convicted of a crime punishable by a term of imprisonment in excess of one year from lawfully possessing a firearm, firearm components such as a receiver, and ammunition. The Superseding Indictment alleged that Ruffin has been convicted of a multitude of felony offenses including: carjacking; using a firearm during a crime of violence; robbery; attempted theft; and aggravated assault.
Judge McVerry ordered the forfeiture of the firearms and ammunition recovered, and scheduled Ruffin’s sentencing for June 26, 2015 at 10 a.m. Because of the type and number of his previous convictions, the law provides for a total sentence of at least 15 years in prison and up to life, a fine of up to $250,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offense and the prior criminal history of the defendant. Pending sentencing, the court ordered that the defendant remain in jail and he was remanded to the custody of the United States Marshal Service.
Assistant United States Attorneys Jonathan B. Ortiz and Ross E. Lenhardt prosecuted this case on behalf of the government.
This case was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Allegheny County Police Department, the Allegheny County Medical Examiner’s Office - Crime Laboratory, the Allegheny County Sheriff’s Office, the Munhall Police Department and the United States Marshal Service conducted the investigation leading to the conviction in this case.
Any person having information relating to Ruffin and/or the ongoing investigation being conducted by the Allegheny County Police Department – Homicide Section should contact Lieutenant Andrew Shurman at 412-473-1300.
Federal Jury Convicts Illegal Alien of Trafficking Pounds of Meth to Great FallsRead the Press Release
GREAT FALLS – Late Tuesday a federal jury in Great Falls convicted Eduardo Ocegueda-Ruiz, 30, of Los Angeles, California of conspiracy to possess with intent to distribute methamphetamine, possession with intent to distribute methamphetamine, possessing a firearm in furtherance of a drug trafficking crime, being a felon in possession of a firearm, and being an illegal alien in possession of a firearm. After the guilty verdicts were read, Judge Brian Morris of Great Falls set sentencing for June 3, 2015. Ocegueda-Ruiz, who has been convicted previously of numerous drug felonies in California, faces life in prison, and if ever released, a lifetime of supervised release, and $10,000,000 in fines.
Ocegueda-Ruiz was charged in a multiple-count indictment with 19 other defendants as part of a methamphetamine conspiracy entitled “Operation Highline Crystal Highway.” The 19 co-defendants have all plead guilty to felony drugs and gun charges and are awaiting sentencing.
During the 2-day trial, Assistant U.S. Attorneys Jessica Betley and Tara Elliott presented evidence that during the winter and spring of 2013, the Russell Country Drug Task Force began to investigate a large-scale methamphetamine trafficking organization operating out of Great Falls. Throughout the next 18 months, agents discovered large quantities of methamphetamine were routinely being transported from Los Angeles, California, to various areas of Montana, including Butte, Great Falls, and Havre by Ocegueda-Ruiz and co-defendant, Joshua Rodriguez.
Intercepted conversations and informants provided evidence that Ocegueda-Ruiz wanted to come to Montana to “kick in doors with guns blazing,” and appeared to be Rodriguez’s strong arm and enforcer. Ocegueda-Ruiz told co-defendants that he is “illegal” and described how he crosses the border from Mexico into the United States. In addition, Ocegueda-Ruiz admitted to other members of the conspiracy that he and Rodriguez intended to kill another conspirator because the conspirator was “out of control” and causing too much trouble. Witnesses established that Ocegueda-Ruiz regularly brandished firearms as a way to intimidate and threaten other actors in the drug distribution operation.
Ocegueda-Ruiz and Rodriguez made a final trip from California to Montana in the early morning hours of September 25, 2014. At approximately 4 a.m., California Highway Patrol Troopers conducted a traffic stop on a car driven by Rodriguez near Victorville, California. Troopers identified Rodriguez as the driver of the car and Ocegueda-Ruiz as the passenger. The California Highway Patrol’s drug dog alerted to the rear of the car where troopers seized 888.1 grams, or approximately two pounds, of pure methamphetamine. Troopers also seized a scale and empty baggies. Aware that Rodriguez and the defendant were the subject of the Montana investigation, and that allowing the pair to continue on would further that investigation, the troopers advised Ocegueda-Ruiz and Rodriguez that criminal charges would be forthcoming but that they would be released until charges were filed. Ocegueda-Ruiz and Rodriguez were allowed to leave and continued, under law enforcement surveillance, on to Montana.
When Rodriguez and Ocegueda-Ruiz arrived in Montana, they dropped off an amount of methamphetamine in Butte in the early morning hours and then continued on to Great Falls. Ocegueda Ruiz and Rodriguez checked into a Great Falls hotel and then Ocegueda Ruiz went directly to the Holiday Village mall where he conducted a transaction involving the exchange of guns and drugs. Ocegueda Ruiz went into a local restaurant and was arrested when he came back out. Ocegueda-Ruiz had a loaded 9mm semi-automatic pistol in his waistband and a loaded 40 caliber pistol in a restaurant take-out bag. He was also carrying about 70 rounds of ammunition. A search of the local hotel room where Ocegueda-Ruiz and Rodriguez had registered upon their arrival in Great Falls yielded another five pounds, more or less, of pure methamphetamine. The street value of the methamphetamine seized by the California Highway Patrol and the Russell Country Drug Task Force was approximately $340,000.
The investigation is a cooperative effort between the Russell Country Drug Task Force which includes law enforcement officers from the Great Falls Police Department, Cascade County Sheriff’s Office, Teton County Sheriff’s Office, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations and the U.S. Border Patrol, as well as the Havre Police Department, Montana Division of Criminal Investigation, U.S. Internal Revenue Service, California Highway Patrol, and Orange County Sheriff’s Office.
Federal Grand Jury Indicts Rockwall Man on Prepubescent Child Pornography OffensesRead the Press Release
DALLAS — Christian C. Winchel, 48, of Rockwall, Texas, was indicted yesterday by a federal grand jury in Dallas on multiple federal child pornography offenses involving prepubescent child pornography, announced Acting U.S. Attorney John Parker of the Northern District of Texas.
Specifically, the indictment charges Winchel with one count of production of child pornography, one count of transporting and shipping child pornography, and two counts of possession of prepubescent child pornography. Winchel has been in custody since his arrest on a related federal criminal complaint in early February 2015.
According to documents filed in the case, on February 4, 2015, special agents with FBI’s Dallas Child Exploitation Task Force executed a federal search warrant at Winchel’s home. Law enforcement located and forensically reviewed multiple files of child pornography, including images of prepubescent child pornography.
Count one of the indictment alleges that on July 23, 2014, Winchel used, persuaded, induced, enticed, and coerced a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of that conduct. Count two of the indictment alleges that on February 1, 2013, Winchel transported images and videos of child pornography from Indiana to Texas. Counts three and four of the indictment allege that on February 4, 2015, Winchel possessed images of prepubescent child pornography on an external hard drive and on a thumb drive.
An indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the statutory penalty for the production count is not less than 15 years or more than 30 years in prison. The statutory penalty for the transportation count is not less than five years and up to 20 years in federal prison. Each of the possession counts carries a maximum statutory penalty of 20 years in federal prison. In addition, each count carries up to a $250,000 fine and up to a lifetime of supervised release.
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
Anyone who knows of someone who may have been victimized in this case is asked to contact the FBI at 972-559-5000.
The FBI’s Dallas Child Exploitation Task Force is conducting the investigation. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.
East St. Louis Man Sentenced to over Five Years for Possession of A Firearm by A Convicted FelonRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that William A. Moore, 29, of East St. Louis, Illinois, was sentenced in federal district court in East St. Louis for the crime of Possession of a Firearm by a Convicted Felon.
Moore was sentenced to 63 months in federal prison, to be followed by 2 years’ supervised release, a $100 special assessment, and a fine of $500. The charge relates to an incident that occurred on December 30, 2013, in East St. Louis, Illinois, when law enforcement agents went to Moore’s home on a state arrest warrant and discovered four firearms in the home. Moore was previously convicted of possession with intent to deliver marijuana on April 8, 2004, in St. Clair County. The sentencing judge also ordered forfeiture of the firearms.
The case was investigated by members of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant U.S. Attorney Stephen B. Clark.
Drug Courier Sentenced to 50 MonthsRead the Press Release
Rodolpho Hernandez Flores, a 47-year old Mexican national, was sentenced today by Chief United States District Court Judge Michael J. Reagan to 50 months in federal prison for possessing with intent to distribute five or more kilograms of heroin, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois.
According to court documents, Flores pled guilty to driving 5.4 kilograms of heroin, hidden in his truck, across the United States to Ohio. An Illinois State Police Trooper stopped Flores on Interstate 55 in April 2014 and following an alert by a drug canine, law enforcement found the heroin in a concealed compartment within the truck. Flores confessed to being a drug courier.
Chief Judge Reagan sentenced Flores after considering many factors, including the facts surrounding the traffic stop, Flores’s prior employment and work history, his character, and the serious amount of heroin in this case, commenting that "it’s a lot of heroin" and that Flores had "up to 50,000 doses of heroin." There is no parole in the federal prison system. In addition to the prison sentence, Judge Reagan also sentenced Flores to serve 3 years of supervised release and pay a $500 fine. According to United States Attorney Wigginton, "The amount of heroin in this case is astonishing and highlights how severe the problem has become in our communities. This is why I have made cases involving heroin one of the highest priorities in my office. We are deeply committed to prosecuting heroin traffickers, whether they are the illegal variety (such as this man) or those who do so with a prescription pad."
The Illinois State Police and Drug Enforcement Administration investigated this case. Assistant United States Attorney Monica A. Stump prosecuted the offense.
Charleston man sentenced for selling pillsRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Clarence Scarberry, 51, of Charleston, was sentenced today in federal court in Charleston to 21 months’ imprisonment and three years of supervised release. Scarberry pled guilty late last year to the distribution of pills containing hydrocodone. Scarberry admitted that he sold pills to an undercover police officer. Scarberry also admitted that he and others had obtained the pills during trips to Florida.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District. Assistant United States Attorney John Frail is responsible for the prosecution.
Chamberlain Man Charged with LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Chamberlain, South Dakota, man has been indicted by a federal grand jury for Larceny.
James Short Bear, age 19, was indicted on February 11, 2015. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 2, 2015, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about between February 11, 2014, and February 13, 2014, Short Bear stole a ceremonial pipe known as a Chanupa, which was the property of another.
The charge is merely an accusation and Short Bear is presumed innocent until and unless proven guilty.The investigation is being conducted by the Federal Bureau of Investigation, and the Bureau of Indian Affairs, Lower Brule agency. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Short Bear was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
California Resident Sentenced to Prison for Tax Evasion Resulting from Multimillion-Dollar Advance Fee Scheme in MarylandRead the Press Release
A Corona, California, woman was sentenced today in the U.S. District Court in the District of Maryland to serve two years in prison to be followed by three years of supervised release after pleading guilty to one count of tax evasion, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Rod J. Rosenstein of the District of Maryland.
Yvette Johnson, formerly of Laytonsville, Maryland, was sentenced by U.S. District Judge Deborah K. Chasanow. As a special condition of Johnson’s supervised release, she is required to cooperate with the Internal Revenue Service (IRS) to determine all taxes owed for tax years 2002 through 2009, and to pay the IRS all additional taxes, interest and penalties.
Johnson’s husband, Shannon Johnson, was sentenced in June 2014 to serve seven years in prison after pleading guilty to an advance fee scheme and tax evasion. The Johnsons were indicted by a federal grand jury in June 2013 for mail and wire fraud charges, as well as tax fraud charges, in connection with a scheme to defraud investors. Shannon Johnson admitted that he ran a fraudulent advance fee scheme from 2006 to 2009, wherein Johnson presented himself as a wealthy international investment banker who could provide millions of dollars and euros in financing to businesses and individuals. In return for substantial advance banking fees, the indictment alleged that the Johnsons promised to provide investors with money which they claimed they held in an overseas bank account. Shannon Johnson provided these businesses and investors with false documents purporting to be from the overseas bank to authenticate the funds. The Johnsons developed relationships with pastors, ministers and religious-based organizations to sell themselves as philanthropists on a humanitarian mission. Shannon Johnson received payments and gifts from pastors and ministers who believed substantial donations would be made to their churches. Businesses and individuals wired and mailed the advance fees to multiple bank accounts controlled by the Johnsons in different states. Yvette Johnson opened bank accounts and conducted financial transactions using proceeds obtained from the Johnsons’ business activities.
The Johnsons spent the $3.7 million in advance fees from individuals and businesses to support their lifestyle, which the indictment alleges included: the purchase of Bentley, Mercedes Benz and BMW automobiles; the leasing of a residence in California for $18,000 a month; travel on private jets; and the funding of the mortgage on their Laytonsville residence. Shannon Johnson admitted that he obtained $3.7 million by victimizing at least 11 individuals and businesses.
The Johnsons also evaded taxes on millions of dollars in income they earned from the advance fee scheme. They admitted that they filed individual tax returns for tax years 1998 through 2001 using false Forms W-2 to fraudulently generate refund claims, evaded the payment of their 2002 through 2006 corporate and individual taxes totaling $98,220, and evaded the assessment of their 2007 through 2009 taxes. The Johnsons attempted to conceal their income and assets from the IRS by selling assets in their own names, titling assets in the names of nominees, using multiple bank accounts across three states to disperse and conceal income, using nominees and fraudulent taxpayer identification numbers to open and maintain bank accounts, and using multiple business names to conduct business.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rosenstein commended the special agents of IRS-Criminal Investigation and the FBI, who investigated the case, and Assistant Chief John N. Kane of the Tax Division and Assistant U.S. Attorney Thomas Sullivan of the District of Maryland, who prosecuted the case.
Braddock Woman Sentenced to Probation with Home Detention for Using Her Children's Social Security BenefitsRead the Press Release
PITTSBURGH – An Allegheny County woman has been sentenced in federal court to three years of probation, four months of home detention, and ordered to pay restitution to the Social Security Administration in the amount of $11,276.00 on her conviction of theft of government property, involving conversion of Social Security benefits, United States Attorney David J. Hickton announced today.
United States District Judge Cathy Bissoon imposed the sentence on Tawanda L. Moore, 37, of Braddock, Pa.
According to information presented to the court, Moore stole more than $11,000 in government funds by converting to her own use Social Security Administration payments designated for the benefit of minor children.
Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Social Security Administration, Office of Inspector General for the investigation leading to the successful prosecution of Moore.
Belleville Man Sentenced for Cocaine Trafficking Conspiracy and Possession of A Firearm in Furtherance of Cocaine TraffickingRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on March 3, 2015, Dewayne Hill, 40, of Belleville, Illinois, was sentenced for Conspiracy to Distribute and Possess with Intent to Distribute Cocaine (Count 1), Possession of a Firearm in Furtherance of a Drug Trafficking Crime (Count 2), and Unlawful Possession of a Firearm and Ammunition by a Previously Convicted Felon (Count 6), following his guilty plea to the charges on October 3, 2014. Hill was sentenced to 10 years in prison on Counts 1 and 6, to run concurrently, and 5 years in prison on Count 2, to run consecutively to the sentence on Count 1, for a total sentence of 15 years. Hill was also ordered to serve 5 years’ supervised release following imprisonment and to pay a $600 fine and a $300 assessment. Hill has been in custody since his arrest on May 7, 2014.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) beginning in April 2013. An ATF special agent posed as a cocaine distributor for a Los Angeles based cocaine trafficking organization which was considering using the Metro East St. Louis area as a hub for distribution. The undercover agent was first introduced to Martez Moore and later to Antwone Johnson, Dewayne Hill, Brian Matthews, Bryant Sawyer, Jaren Jamison, and former East St. Louis police detective Orlando Ward. The undercover agent’s meetings with
Moore culminated in Moore asking the undercover agent to broker the supply of 10 kilograms of cocaine from the Los Angeles organization. In return, Moore agreed to provide armed security for the anticipated delivery of the 10 kilograms of cocaine and distributors for the cocaine. Moore recruited Johnson as a distributor, and Matthews, Sawyer and Jamison as armed security. Moore also recruited Dewayne Hill, his "right hand man," to protect him when he met with and accepted delivery of the cocaine. Hill was in possession of a fully loaded 9mm pistol and an extra clip for the firearm.
All conspirators pleaded guilty. Only Moore remains to be sentenced.
The case was assigned to Assistant United States Attorney Kit Morrissey.
Beckley man sentenced for heroin distributionRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced that a Beckley man was sentenced today in federal court in Beckley for selling heroin. Robert Meade, 28, was sentenced to three years of probation. Meade previously pled guilty in November of 2014, admitting that he sold heroin to a person who was cooperating with law enforcement authorities. The drug deal took place on Laurel Terrace in Beckley. The sentence was imposed by United States District Court Judge Irene C. Berger.
This case was investigated by the Beckley Raleigh County Drug and Violent Crime Task Force.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Beckley man sentenced for federal drug chargeRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that a Beckley man was sentenced for a federal drug charge. Jason Calendar, 40, was sentenced to a four-month term of imprisonment, followed by a three-year term of supervised release. Calendar previously pled guilty in November of 2014, admitted that he sold heroin to a person who was cooperating with law enforcement authorities. The drug deal took place on Laurel Terrace in Beckley.
This case was investigated by the Beckley/Raleigh County Drug and Violent Crime Task Force and is being prosecuted under the Beckley Pill Initiative directed by the United States Attorney’s Office.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Defendant was sentenced by United States District Court Judge Irene C. Berger.
Beckley man sentenced for distribution of heroinRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that another Beckley man was sentenced in federal court for distribution of heroin. Ronald Greer, 60, was sentenced by United States District Judge Irene C. Berger to a 16-month term of imprisonment, followed by a three-year term of supervised release. Greer previously pled guilty in November of 2014, admitting that he sold heroin to a person who was cooperating with law enforcement authorities. The drug deal took place on Adrian Court in Beckley.
This case was investigated by the Beckley/Raleigh County Drug and Violent Crime Task Force.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Bastrop Woman Pleads Guilty to Filing False Tax ReturnsRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a Bossier City woman pleaded guilty on Tuesday, to filing false tax returns.
Stella Marie Dunlap, 37, of Bastrop, La., entered a conditional guilty plea before U.S. Magistrate Judge Karen L. Hayes, to one count of aiding and subscribing a false tax return. The plea will become final when accepted by U.S. District Judge Robert G. James. According to evidence presented at the guilty plea, Dunlap filed fraudulent Forms 1040 during the 2010 and 2011 tax filing seasons while employed as a tax preparer at Faster Tax Services in Bastrop. The returns contained fraudulent W-2 income information from fictitious companies, and the information was used to file Earned Income Tax Credit withholdings. As a result of the fraud, the IRS issued $104,401 in refunds to which taxpayers where not entitled. Dunlap received kickbacks from some of customers as part of the scheme.
Dunlap faces up to three years in prison, one year of supervised release, a $250,000 fine, and restitution. A sentencing date of June 15, 2015 was set.
Internal Revenue Service - Criminal Investigations conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Bastrop Woman Pleads Guilty to Filing False Tax ReturnsRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a Bastrop woman pleaded guilty on Tuesday, to filing false tax returns.
Stella Marie Dunlap, 37, of Bastrop, La., entered a conditional guilty plea before U.S. Magistrate Judge Karen L. Hayes, to one count of aiding and subscribing a false tax return. The plea will become final when accepted by U.S. District Judge Robert G. James. According to evidence presented at the guilty plea, Dunlap filed fraudulent Forms 1040 during the 2010 and 2011 tax filing seasons while employed as a tax preparer at Faster Tax Services in Bastrop. The returns contained fraudulent W-2 income information from fictitious companies, and the information was used to file Earned Income Tax Credit withholdings. As a result of the fraud, the IRS issued $104,401 in refunds to which taxpayers where not entitled. Dunlap received kickbacks from some of customers as part of the scheme.
Dunlap faces up to three years in prison, one year of supervised release, a $250,000 fine, and restitution. A sentencing date of June 15, 2015 was set.
Internal Revenue Service - Criminal Investigations conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Alton Man Sentenced for Selling HeroinRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Glenn P. Lowers, 25, of Alton, Illinois, was sentenced on Wednesday, March 4, 2015 to 144 months in federal prison for selling the heroin which killed Alton resident Joshua Shelton.
U.S. Attorney Wigginton commented, "The sentence imposed today is another example of the anti-heroin initiative which I started when I took office. Our anti-heroin initiative is active and ongoing, and it will continue. We are trying to send a message to drug dealers out there that they risk a severe prison sentence every time they sell heroin, especially to a young person in the Southern District of Illinois."
Upon release from prison, Lowers will also be required to serve a supervised release term of three years.
Shelton was 21 years old when he died of a heroin overdose in Alton on September 4, 2013.
Lowers admitted selling Shelton 1/10 gram of heroin for $10 shortly before Shelton’s grandfather discovered his grandson’s body.
The investigation which resulted in Lowers’ arrest and conviction was conducted by the Alton, Illinois Police Department.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Albuquerque Man Pleads Guilty to Federal Methamphetamine Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Manuel Chavez, 33, of Albuquerque, N.M., entered a guilty plea in federal court this morning to methamphetamine trafficking and firearms charges. Under the terms of his plea agreement, Chavez will be sentenced to 15 years in federal prison followed by a term of supervised release to be determined by the court.
Chavez was arrested on April 29, 2014, on a four-count indictment charging him with methamphetamine trafficking and firearms charges. Counts 1 and 2 of the indictment charged Chavez with being a felon in possession of firearms and ammunition in Sept. and Oct. 2013. At the time, Chavez was prohibited from possessing firearms or ammunition because he previously had been convicted of the following felony offenses: conspiracy to possess methamphetamine with intent to distribute, contributing to the delinquency of a minor, aggravated assault, possession of a controlled substance, attempt to bring contraband into a prison and aggravated fleeing from law enforcement. Counts 3 and 4 charged Chavez with possession of methamphetamine with intent to distribute and using and carrying a firearm in relation to a drug trafficking crime on Oct. 24, 2013. The indictment alleged that Chavez committed all four offenses in Bernalillo County, N.M.
During today’s change of plea hearing, Chavez pled guilty to Counts 3 and 4 of the indictment. In his plea agreement, Chavez admitted that on Oct. 24, 2013, deputies of the Bernalillo County Sheriff’s Office executed a search warrant at his residence and found Chavez in possession of more than four ounces of methamphetamine and three firearms and ammunition.
Chavez has been in federal custody since his arrest and remains detained pending his sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Bernalillo County Sheriff’s Office and the Albuquerque Police Department. The case is being prosecuted by Assistant U.S. Attorneys Kimberly A. Brawley and Sarah Mease.
The case is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Al-Qaeda Operative Convicted for Role in International Terrorism Plot Targeting the United States and EuropeRead the Press Release
Defendant and Co-Plotters Came Within Days of Bombing a U.K. Shopping Mall
U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD) announced that earlier today, following a two-week trial, Abid Naseer, 28, a Pakistani national who joined al-Qaeda and plotted to commit a terrorist attack in the United Kingdom, was found guilty by a jury in Brooklyn federal court of providing material support to al-Qaeda, conspiring to provide material support to al-Qaeda, and conspiring to use a destructive device in relation to a crime of violence. The evidence at trial established that the defendant and his accomplices came within days of executing a plot to conduct an attack on a busy shopping mall located in the city center of Manchester, United Kingdom, in April 2009. The planned attack, which also targeted the New York City subway system and a newspaper office in Copenhagen, Denmark, had been directed by and coordinated with senior al-Qaeda leaders in Pakistan. Naseer is the eighth defendant to face charges, and the fourth to be convicted, in Brooklyn federal court related to the al-Qaeda plot, which also involved Adis Medunjanin, Najibullah Zazi, and Zarein Ahmedzay, the three members of the cell that targeted New York City.
“This al-Qaeda plot was intended by the group’s leaders to send a message to the United States and its allies,” said U.S. Attorney Lynch. “Today’s verdict sends an even more powerful message in response: the United States will stop at nothing in order to hold those who plot to kill and maim in the name of religion accountable for their grievous crimes.” U.S. Attorney Lynch extended her grateful appreciation to the FBI’s Joint Terrorism Task Force, which led the investigation and comprises a large number of federal, state, and local agencies from the region. U.S. Attorney Lynch also extended her appreciation to the law enforcement authorities in the United Kingdom and Norway, including the Greater Manchester Police, the British Security Service, and the Norwegian Police Security Service, for their outstanding assistance with the case.
“Abid Naseer was part of an al Qaeda conspiracy that targeted Western countries, including the United States and the United Kingdom, for terrorist attack,” said Assistant Attorney General Carlin. “His conviction reflects our dedication to identifying and holding accountable those who seek to target the United States and its allies. I want to thank the many agents, analysts, and prosecutors who are responsible for this successful result.”
“Naseer knowingly and willingly conspired with others to carry out a destructive plot on behalf of al-Qaeda,” said FBI Assistant Director in Charge Rodriquez. “The wheels were set in motion, and he and his accomplices were prepared to execute their plan. Those who pledge allegiance to terrorists and terrorist organizations throughout the world will be brought to justice, and every effort will be made to protect Americans and our interests throughout the world. The FBI will continue to work with our local and international partners to mitigate the threat of global terrorism.”
“The Abid Naseer case demonstrates that terrorists who target the U.S. and its allies will be brought to justice, no matter where they are,” said NYPD Commissioner Bratton. “This investigation involved leads from the streets of Manchester, England, to New York City, to Usama Bin Laden’s hidden lair in Pakistan. I want to thank the U.S. Attorney for the Eastern District and the members of the N.Y. FBI-NYPD Joint Terrorism Task Force for the work that led to this successful prosecution.”
In approximately September 2008, al-Qaeda leaders in Pakistan recruited Medunjanin, Zazi, and Ahmedzay, three friends from New York City, to conduct a suicide bombing attack in New York City. Those al-Qaeda leaders, including Adnan El-Shukrijumah and Saleh al-Somali, communicated with Zazi about the plot through an al-Qaeda facilitator named “Ahmad,” who was located in Peshawar, Pakistan. In early September 2009, after Medunjanin, Zazi, and Ahmedzay had selected the New York City subway system as their target, Zazi emailed with “Ahmad” in Pakistan about the proper ingredients for the main charge explosive, which included flour and oil. Zazi pleaded guilty to his role in the plot on Feb. 22, 2010; Ahmedzay pleaded guilty on April 23, 2010; and Medunjanin was convicted after trial on May 1, 2012.
The investigation by authorities in the United States and United Kingdom revealed that “Ahmad” had also been communicating with the defendant earlier in 2009. The evidence at trial demonstrated that the defendant and his Pakistani accomplices had been dispatched by al-Qaeda to the U.K. in 2006 in order to begin preparations for an attack in that country. The defendant and his co-conspirators entered the U.K. on student visas but then immediately dropped out of the university in which they had enrolled. The defendant, like Zazi, returned briefly to Peshawar in November 2008, at the same time Zazi and his co-conspirators were receiving weapons and explosives training from al-Qaeda in that region. After returning to the U.K., the defendant sent messages back and forth to the same email account that “Ahmad” was also using to communicate with the American-based al-Qaeda cell on behalf of Saleh al-Somali, al-Qaeda’s then-head of external operations. In the messages, the defendant used coded language to refer to different types of explosives. At the culmination of the plot, in early April 2009, the defendant told “Ahmad” that he was planning a large “wedding” for numerous guests during the upcoming Easter weekend, and that “Ahmad” – whom he called “Sohaib” – should be ready. Notably, Zazi testified that Ahmad had instructed him to use the same code of “marriage” to refer to the planned attack on the New York City subway, and that Zazi emailed Ahmad that “the marriage is ready” just before he drove to New York in early September 2009 to conduct the attack.
On April 8, 2009, the defendant and several associates were arrested in the United Kingdom. In connection with these arrests, U.K. authorities conducted searches of the plotters’ homes as well as an internet café used by the defendant to send his messages to Ahmad, where they seized a large volume of electronic media. As demonstrated at trial, a forensic review of that electronic media revealed that the defendant had downloaded several jihadi nasheeds, or anthems, calling for “death in large numbers.” A document recovered from the raid on Usama bin Laden’s compound in May 2011 contained a letter from Saleh al-Somali to Bin Laden, written on April 16, 2009, that discussed the defendant and his accomplices’ arrests in the U.K.
On Jan. 30, 2012, three defendants were also convicted in a Norwegian court of plotting a similar terrorist attack in Denmark as part of the same overall multinational al-Qaeda conspiracy. During that trial, the United States made available to the Norwegian prosecutors three witnesses who also pleaded guilty to terrorism offenses in the Eastern District of New York: Zazi, Ahmedzay, and Bryant Neal Vinas. Zazi and Ahmedzay again testified in the trial against Naseer.
The defendant faces up to life imprisonment when he is sentenced at a later date by the Honorable Raymond J. Dearie.
The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad, Celia A. Cohen, and Michael P. Canty, with assistance provided by the Justice Department’s National Security Division and Office of International Affairs.
Al-Qaeda Operative Convicted for Role in International Terrorism Plot Targeting the United States and EuropeRead the Press Release
Earlier today, following a two-week trial, Abid Naseer, a Pakistani national who joined al-Qaeda and plotted to commit a terrorist attack in the United Kingdom, was found guilty by a jury in Brooklyn federal court of providing material support to al-Qaeda, conspiring to provide material support to al-Qaeda, and conspiring to use a destructive device in relation to a crime of violence. The evidence at trial established that the defendant and his accomplices came within days of executing a plot to conduct an attack on a busy shopping mall located in the city center of Manchester, United Kingdom in April 2009. The planned attack, which also targeted the New York City subway system and a newspaper office in Copenhagen, Denmark, had been directed by and coordinated with senior al-Qaeda leaders in Pakistan. Naseer is the eighth defendant to face charges, and the fourth to be convicted, in Brooklyn federal court related to the al-Qaeda plot, which also involved Adis Medunjanin, Najibullah Zazi, and Zarein Ahmedzay, the three members of the cell that targeted New York City.
The verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and William J. Bratton, Commissioner, New York City Police Department (NYPD).
“This al-Qaeda plot was intended by the group’s leaders to send a message to the United States and its allies,” stated United States Attorney Lynch. “Today’s verdict sends an even more powerful message in response: the United States will stop at nothing in order to hold those who plot to kill and maim on behalf of terrorist groups accountable for their grievous crimes.” Ms. Lynch extended her grateful appreciation to the FBI’s Joint Terrorism Task Force, which led the investigation and comprises a large number of federal, state, and local agencies from the region. She also sent her appreciation to the Internal Revenue Service–Criminal Investigation, New York, the U.S. Marshal Service, Brooklyn, and the law enforcement authorities in the United Kingdom and Norway, including the Greater Manchester Police, the British Security Service, and the Norwegian Police Security Service, for their outstanding assistance with the case.
“Abid Naseer was part of an al Qaeda conspiracy that targeted Western countries, including the United States and the United Kingdom, for terrorist attack,” said Assistant Attorney General Carlin. “His conviction reflects our dedication to identifying and holding accountable those who seek to target the United States and its allies. I want to thank the many agents, analysts, and prosecutors who are responsible for this successful result.”
FBI Assistant Director-in-Charge Rodriguez stated, “Naseer knowingly and willingly conspired with others to carry out a destructive plot on behalf of al-Qaeda. The wheels were set in motion, and he and his accomplices were prepared to execute their plan. Those who pledge allegiance to terrorists and terrorist organizations throughout the world will be brought to justice, and every effort will be made to protect Americans and our interests throughout the world. The FBI will continue to work with our local and international partners to mitigate the threat of global terrorism.”
“The Abid Naseer case demonstrates that terrorists who target the U.S. and its allies will be brought to justice, no matter where they are. This investigation involved leads from the streets of Manchester, England, to New York City, to Usama Bin Laden’s hidden lair in Pakistan. I want to thank the U.S. Attorney for the Eastern District and the members of the N.Y. FBI-NYPD Joint Terrorism Task Force for the work that led to this successful prosecution,” said Police Commissioner Bratton.
In approximately September 2008, al-Qaeda leaders in Pakistan recruited Medunjanin, Zazi, and Ahmedzay, three friends from New York City, to conduct a suicide bombing attack in New York City. Those al-Qaeda leaders, including Adnan El-Shukrijumah and Saleh al-Somali, communicated with Zazi about the plot through an al-Qaeda facilitator named “Ahmad,” who was located in Peshawar, Pakistan. In early September 2009, after Medunjanin, Zazi, and Ahmedzay had selected the New York City subway system as their target, Zazi emailed with “Ahmad” in Pakistan about the proper ingredients for the main charge explosive, which included flour and oil. Zazi pleaded guilty to his role in the plot on February 22, 2010; Ahmedzay pleaded guilty on April 23, 2010; and Medunjanin was convicted after trial on May 1, 2012.
The investigation by authorities in the United States and United Kingdom revealed that “Ahmad” had also been communicating with the defendant earlier in 2009. The evidence at trial demonstrated that the defendant and his Pakistani accomplices had been dispatched by al-Qaeda to the U.K. in 2006 in order to begin preparations for an attack in that country. The defendant and his co-conspirators entered the U.K. on student visas but then immediately dropped out of the university in which they had enrolled. The defendant, like Zazi, returned briefly to Peshawar in November 2008, at the same time Zazi and his co-conspirators were receiving weapons and explosives training from al-Qaeda in that region. After returning to the U.K., the defendant sent messages back and forth to the same email account that “Ahmad” was also using to communicate with the American-based al-Qaeda cell on behalf of Saleh al-Somali, al-Qaeda’s then-head of external operations. In the messages, the defendant used coded language to refer to different types of explosives. At the culmination of the plot, in early April 2009, the defendant told “Ahmad” that he was planning a large “wedding” for numerous guests during the upcoming Easter weekend, and that “Ahmad” – whom he called “Sohaib” – should be ready. Notably, Zazi testified that Ahmad had instructed him to use the same code of “marriage” to refer to the planned attack on the New York City subway, and that Zazi emailed Ahmad that “the marriage is ready” just before he drove to New York in early September 2009 to conduct the attack.
On April 8, 2009, the defendant and several associates were arrested in the United Kingdom. In connection with these arrests, U.K. authorities conducted searches of the plotters’ homes as well as an internet café used by the defendant to send his messages to Ahmad, where they seized a large volume of electronic media. As demonstrated at trial, a forensic review of that electronic media revealed that the defendant had downloaded several jihadi nasheeds, or anthems, calling for “death in large numbers.” A document recovered from the raid on Usama bin Laden’s compound in May 2011 contained a letter from Saleh al-Somali to Bin Laden, written on April 16, 2009, that discussed the defendant and his accomplices’ arrests in the U.K.
On January 30, 2012, three defendants were also convicted in a Norwegian court of plotting a similar terrorist attack in Denmark as part of the same overall multinational al-Qaeda conspiracy. During that trial, the United States made available to the Norwegian prosecutors three witnesses who also pleaded guilty to terrorism offenses in the Eastern District of New York: Zazi, Ahmedzay, and Bryant Neal Vinas. Zazi and Ahmedzay again testified in the trial against Naseer.
The defendant faces up to life imprisonment when he is sentenced by the Honorable Raymond J. Dearie.
The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad, Celia A. Cohen, and Michael P. Canty, with assistance provided by the Justice Department’s National Security Division and Office of International Affairs.
The Defendant:
ABID NASEER
Age: 28
E.D.N.Y. Docket No. 10-CR-019 (RJD)
Aggravated Felon Sentenced to Prison for Illegal Re-EntryRead the Press Release
A woman who failed to surrender to serve a previous sentence for illegal re-entry was sentenced February 27, 2015, to 12 months in in federal prison.
Maria Parra-Rosales, age 27, from Mexico, received the prison term after an October 27, 2014, guilty plea to one count of failure to surrender.
At the guilty plea, Parra-Rosales admitted she fled to Mexico after being convicted on November 15, 2013, in the United States District Court for the Northern District of Iowa of illegal re-entry as an aggravated felon. Parra-Rosales was to self-surrender to the Waseca Women’s Institution in Minnesota on May 15, 2014. She failed to surrender, and a warrant was issued for her arrest. Eventually, she surrendered herself to the U.S. Border Patrol at the United States border on June 26, 2014.
Parra-Rosales was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Parra-Rosales was sentenced to 12 months’ imprisonment. She must also serve a 1-year term of supervised release after the prison term. A special assessment of $100 was imposed. There is no parole in the federal system.
Parra-Rosales is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Kevin C. Fletcher and investigated by the U.S. Marshals’ Service and Homeland Security Investigations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR14-4077.
Follow us on Twitter @USAO_NDIA.
Aggravated Felon Sentenced to Prison for Illegal Re-EntryRead the Press Release
A man who illegally re-entered the United States from Mexico was sentenced February 27, 2015, to 7 months in in federal prison.
Christian Vargas-Ortiz, age 22, from Mexico, received the prison term after a November 6, 2014, guilty plea to one count of illegal re-entry as an aggravated felon.
At the guilty plea, Vargas-Ortiz admitted he had re-entered the United States without permission after being removed from the country on May 30, 2014. On November 6, 2013, Vargas-Ortiz was convicted of identity theft and forgery in the Iowa District Court for Sioux County. Vargas-Ortiz came to the attention of Homeland Security Investigations (HSI) after he was arrested on August 22, 2014, in Sioux County, Iowa for driving while license barred.
Vargas-Ortiz was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Vargas-Ortiz was sentenced to 7 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Vargas-Ortiz is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Kevin C. Fletcher and investigated by HSI and the Enforcement and Removal Office of the Immigration and Customs Enforcement Bureau.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR14-4077.
Follow us on Twitter @USAO_NDIA.
10 Men Charged with Trafficking Guns into Camden, New Jersey, and Related Firearms OffensesRead the Press Release
CAMDEN, N.J. - Agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), assisted by investigators from local, county, state and federal partner agencies, arrested multiple individuals throughout South Jersey and Pennsylvania this morning for illegally selling and possessing 82 firearms in the Camden area over a 12-month period, U.S. Attorney Paul J. Fishman announced.
Altogether, 10 men were charged, with eight arrested this morning during predawn raids, and two others already in custody on unrelated charges. Following six separate but coordinated ATF investigations that each involved video and audio-recorded illegal firearms sales by the defendants to a confidential informant and/or an undercover officer, the defendants were charged with various firearms offenses, including dealing firearms without a license, conspiring with others to deal firearms without a license, and selling stolen firearms. The defendants are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Karen M. Williams and U.S. Magistrate Judge Ann Marie Donio in Camden federal court.
The guns ranged from semiautomatic pistols to sawed-off shotguns, assault-style rifles and pistols with high-capacity magazines. Many of the guns were stolen, straw-purchased, or had obliterated serial numbers. A ballistics vest, alleged by one of the sellers to have been stolen from a military base, was also sold to a cooperating informant.
“The great work of ATF and our other federal, state, and local law enforcement partners, took 82 guns off the streets of Camden. As alleged in the complaints, the defendants were willing to sell these weapons without regard to how they would ultimately be used. This is one part of our multi-facetted strategy to keep the people of Camden safe,” U.S. Attorney Fishman said.
“The alleged charges and subsequent arrests announced today send a direct message not to engage in the unlawful trafficking of firearms. Unlicensed dealers of firearms are nothing more than greedy criminal merchants, who seek profits at the expense of public safety, all too often with deadly consequences,” said ATF Special Agent in Charge George Belsky. “ATF will continue to identify, target, and arrest gun thieves, gun traffickers, and straw buyers, who are responsible for starting the sequence of violence in our neighborhoods by peddling guns to criminals. ATF remains dedicated to our core mission of fighting violent crime with our State and local partners to keep our homes, streets, and neighborhoods safe from firearms related violence.”According to separate federal criminal complaints filed today in Camden federal court:
- Orlando Matos, 47, of Camden, Robby Velazquez, 24, of Pennsauken, New Jersey and Orlando Velazquez, 46, of Pennsauken were each charged with one count of dealing firearms without a license and one count of conspiring with others to deal firearms without a license. Matos is also charged with one count of being a felon in possession of a firearm. From March 2014 through February 2015, Matos and Velazquez allegedly sold 30 firearms, including two sawed-off shotguns and a high-capacity assault-style rifle. Several of the firearms were stolen or had obliterated serial numbers.
- David Potts, 43, of Camden, and Darnel Johns, 47, of Albrightsville, Pennsylvania,are each charged with one count of conspiring with others to deal firearms without a license. Potts is also charged with one count of being a felon in possession of a firearm. From September 2014 through December 2014, Potts and Johns allegedly sold 22 firearms, including a sawed-off shotgun, three high-capacity assault-style rifles (one with a 73-round drum magazine and one with five 30-round magazines) and a high-capacity assault-style pistol with a 30-round magazine. Several of the guns were stolen, had obliterated serial numbers or were straw-purchased.
- Donavin Jackson, 20, of Cherry Hill, New Jersey, and Dominique Lawrence, 27, of Camden, are each charged with one count of dealing firearms without a license. From June 2014 through July 2014, Jackson and Lawrence allegedly sold six firearms, including a high-capacity assault-style rifle and a high-capacity assault-style pistol. One of the guns had an obliterated serial number and was straw-purchased.
- Jayson Quinones, 21, of Camden,is charged with one count of dealing firearms without a license. From September 2014 through January 2015, Quinones allegedly sold eight firearms, including a .45 caliber pistol and a .357 Magnum revolver.
- Dante Witcher, 45, of Camden, is charged with one count of dealing firearms without a license, one count of being a felon in possession of a firearm and one count of selling a stolen firearm. From September 2014 through November 2014, Witcher allegedly sold 15 firearms, all of which were stolen from gun stores in North Carolina. All fifteen firearms were new, high-caliber (9mm, .40, .44) handguns.
- Elliot Nock, 31, of Camden,is charged with one count of being a felon in possession of a firearm. On Oct. 31, 2013, the defendant allegedly sold a high-capacity assault-style pistol with a 30-round magazine.
Both the charge of conspiring to deal firearms without a license and the related charges of dealing firearms without a license each carry a maximum potential penalty of five years in prison and a $250,000 fine. The charges of possessing a firearm while being a convicted felon and selling a stolen firearm each carry a maximum penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of George P. Belsky, Jr.; Special Agent in Charge of ATF’s Newark Field Division, and Essam Rabadi, Special Agent in Charge of ATF’s Philadelphia Field Division, with the investigation. He additionally credited special agents of the DEA, Maple Shade Resident Office, under the direction of Special Agent in Charge Carl J. Kotowski; the ATF Charlotte Field Division under the direction of Special Agent in Charge, Wayne L. Dixie, Jr.; investigators with the Camden County Prosecutor’s Office, under the direction of Prosecutor Eva Marie Colalillo; detectives of the Camden County Police Department – Metro, under the direction of Chief J. Scott Thomson; the Newark Police Department’s Ballistics Laboratory; and the Bergen County Sheriff’s Office Ballistics Laboratory, with the investigation. He additionally credited the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos, Jr.; investigators under the Camden High Intensity Drug Trafficking Area; the New Jersey State Police’s Metro South Unit, under the direction of Superintendent Col. Rick Fuentes; the New Jersey State Parole Board, under the direction of Chairman James T. Plousis; the Camden County Sheriff’s Office, under the direction of Sheriff Charles H. Billingham; and the Cherry Hill, Pennsauken and Maple Shade Police Departments.
The government is represented by Assistant U.S. Attorneys Howard Wiener (Potts and Johns), Steven J. D’Aguanno (Quinones), Patrick C. Askin (Jackson and Lawrence), Justin C. Danilewitz (Matos, Robby and Orlando Velazquez) and Sara Aliabadi (Witcher, Nock) of the U.S. Attorney’s Office Criminal Division in Camden.
This case was coordinated through the Camden County Crime Collaboration (“C-4”). Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. Such intense coordination greatly enhances the law enforcement community’s ability to correctly identify and successfully prosecute Camden’s most dangerous criminals.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
15-075
Defense counsel: TBD
Tuesday 3 March 2015
York Springs Man Sentenced to Prison for Workers' Compensation FraudRead the Press Release
The U.S. Attorney's Office for the Middle District of Pennsylvania announced that Robert M. Fowler, 61, of York Springs, Pennsylvania, was sentenced yesterday for workers' compensation fraud involving $24,934.68 of benefits he was not entitled to receive. U.S. District Court Judge William W. Caldwell sentenced Mr. Fowler to three months' imprisonment to be followed by two years supervised release and ordered him to pay $23,792.00 in restitution. Fowler was ordered to surrender to the Bureau of Prisons by March 25, 2015.
According to U.S. Attorney Peter Smith, Fowler sustained an on-the-job injury in 1999 while working at the Defense Industrial Plant Equipment Center in Mechanicsburg, Pennsylvania, and began receiving federal workers' compensation benefits from the Office of Workers' Compensation Programs (OWCP) shortly thereafter. Recipients of these benefits are required to submit forms to OWCP on a periodic basis to insure they are still eligible to receive the benefits.
Fowler previously admitted that he lied on several forms he submitted to OWCP because he falsely claimed he was not incarcerated during the prior fifteen months for a felony and was residing with his wife. In fact, Fowler was in the Adams County Jail between September 2012 and July 2013 and had not resided with his wife between October 2010 and March 2014. As a result of the false statements, OWCP paid Fowler $24,934.18 which he was not entitled to receive.
Fowler was charged in a criminal Information filed in the U.S. District Court in July 2014.
The case was investigated by the U.S. Department of Labor, Office of Inspector General, and was assigned to Bruce Brandler, Chief of the Criminal Division, for prosecution.
Worley Man Sentenced for Theft from the Benewah MarketRead the Press Release
COEUR D'ALENE - Adam Lee SiJohn, 26, of Worley, Idaho, was sentenced today to six months in prison for his part in the theft of more than $22,000 from the Benewah Market in Plummer, Idaho, U.S. Attorney Wendy J. Olson announced. U.S. District Court Judge Edward J. Lodge also ordered SiJohn to pay $22,665.04 in restitution. SiJohn was indicted by a federal grand jury in Coeur d'Alene on October 21, 2014, and pleaded guilty to theft from a tribal organization on December 10, 2014.
According to the plea agreement, SiJohn admitted that on the late evening and early morning of August 20 and 21, 2014, he and his two co-defendants devised a plan to rob the Benewah Market. SiJohn as given the keys and the combination to the store safe. SiJohn took three bank bags from the safe. The bags contained cash and checks totaling $22,655.04.
The case was investigated by the Coeur d’Alene Tribal Police and the Federal Bureau of Investigation.
Virginia Man Sentenced to 54 Months in Prison for Possession of Child Pornography and Traveling to Engage in Illicit Sexual Conduct with a MinorRead the Press Release
WASHINGTON – Ryan Chord, 35, of Virginia Beach, Va., was sentenced today to 54 months in prison on federal charges of traveling interstate to engage in illicit sexual conduct with a minor and possession of child pornography, announced U.S. Attorney Ronald C. Machen Jr., Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Chord pled guilty in November 2014 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Christopher R. Cooper. Upon completion of his prison term, Chord will be placed on 10 years of supervised release. He also will be required to register as a sex offender for at least 15 years.
According to the government's evidence, on Feb. 21, 2014, Chord contacted an undercover officer with the FBI's Child Exploitation Task Force, through a social network site. Over the next few days, Chord engaged in instant messaging with the undercover officer, whom he believed was the father of an under-aged girl. During this period, Chord arranged with the undercover officer to meet for the purpose of engaging in sexual acts with that child.
During the course of their communications, Chord also sent the undercover officer approximately 17 images of child pornography. On March 7, 2014, Chord traveled from Virginia Beach to a pre-arranged meeting place in Washington, D.C. When he arrived at the meeting place, he was arrested.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge McCabe, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who prosecuted the case.
15-035
Union County, New Jersey, Salesman Admits to Bribing a Doctor in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
Thirty-seven Defendants – Including 24 Doctors – Have Pleaded Guilty to Roles in Massive Healthcare Bribery Scheme
NEWARK, N.J. – A Berkeley Heights, New Jersey, man today admitted bribing a doctor in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Michael J. Zarrelli, 48, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of conspiring to bribe a doctor and one count of money laundering.
Including Zarrelli, 37 people – 24 of them doctors – have pleaded guilty in connection with the bribery scheme – which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has to date recovered more than $10.5 million through forfeiture.According to documents filed in this and related cases and statements made in court:
Zarrelli admitted he agreed with BLS president David Nicoll, 40, of Mountain Lakes, New Jersey, his brother, Scott Nicoll, 34, of Wayne, New Jersey, and others to pay cash bribes to a doctor in return for referring patient blood specimens to BLS. The referrals sent to BLS by the doctor that Zarrelli bribed generated more than $400,000 in lab business for BLS.
On April 9, 2013, federal agents arrested David and Scott Nicoll, as well as Craig Nordman, 36, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 45, of Boonton, New Jersey. In June 2013, David and Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme.
The bribery count to which Zarrelli pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. The money laundering count carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Sentencing is scheduled for June 30, 2015. As part of his guilty plea, Zarrelli must forfeit $247,264, representing the payment he received from BLS.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS– Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty plea.
The Government is represented by Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
15-074Defense counsel: Michael Critchley Esq., Roseland, New Jersey
U.S. Trustee Program Reaches $50 Million Settlement with JPMorgan Chase to Protect Homeowners in BankruptcyRead the Press Release
Settlement Addresses Robo-Signing and Other Improper Practices in Bankruptcy Cases
The Department of Justice’s U.S. Trustee Program (USTP) has entered into a national settlement agreement with JPMorgan Chase Bank N.A. (Chase) requiring Chase to pay more than $50 million, including cash payments, mortgage loan credits and loan forgiveness, to over 25,000 homeowners who are or were in bankruptcy. Chase will also change internal operations and submit to oversight by an independent compliance reviewer. The proposed settlement has been filed in the U.S. Bankruptcy Court for the Eastern District of Michigan, where it is subject to court approval.
In the proposed settlement, Chase acknowledges that it filed in bankruptcy courts around the country more than 50,000 payment change notices that were improperly signed, under penalty of perjury, by persons who had not reviewed the accuracy of the notices. More than 25,000 notices were signed in the names of former employees or of employees who had nothing to do with reviewing the accuracy of the filings. The rest of the notices were signed by individuals employed by a third party vendor on matters unrelated to checking the accuracy of the filings.
Chase also acknowledges that it failed to file timely, accurate notices of mortgage payment changes and failed to provide timely, accurate escrow statements.
“It is shocking that the conduct admitted to by Chase in this settlement, including the filing of tens of thousands of documents in court that never had been reviewed by the people who attested to their accuracy, continued as long as it did,” said Acting Associate Attorney General Stuart F. Delery. “Such unlawful and abusive banking practices can deprive American homeowners of a fair chance in the bankruptcy system, and we will not tolerate them.”
“This settlement should signal once again to banks and mortgage servicers that they cannot continue to flout legal requirements, compromise the integrity of the bankruptcy system and abuse their customers in financial distress,” said Director Cliff White of the U.S. Trustee Program. “It should be acknowledged that Chase responded to the U.S. Trustee’s court actions by conducting an internal investigation and taking steps to mitigate harm to homeowners. But years after uncovering improper mortgage servicing practices and entering into court-ordered settlements to fix flawed systems, it is deeply disturbing that a major bank would still make improper court filings and fail to provide adequate and timely notices to homeowners about payments due. Other servicers should take note that the U.S. Trustee Program will continue to police their practices and will work to ensure that those who do not comply with bankruptcy law protections for homeowners will pay a price, just as Chase has done in this matter.”
Payments, Credits and Contributions of More Than $50 Million:
In the proposed settlement, Chase agrees to provide payments, credits and contributions totaling more than $50 million:
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Chase will provide $22.4 million in credits and second lien forgiveness to about 400 homeowners who received inaccurate payment increase notices during their bankruptcy cases.
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Chase will pay $10.8 million to more than 12,000 homeowners in bankruptcy through credits or refunds for payment increases or decreases that were not timely filed in bankruptcy court and noticed to the homeowners.
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Chase will pay $4.8 million to more than 18,000 homeowners who did not receive accurate and timely escrow statements. This includes credits for taxes and insurance owed by the homeowners and paid by Chase during periods covered by escrow statements that were not timely filed and transmitted to homeowners.
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Chase will pay $4.9 million, through payment of approximately $600 per loan, to more than 8,000 homeowners whose escrow payments Chase may have applied in a manner inconsistent with escrow statements it provided to the homeowners.
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Chase will contribute $7.5 million to the American Bankruptcy Institute’s endowment for financial education and support for the Credit Abuse Resistance Education Program.
Changes to Internal Operations: In the proposed settlement Chase also agrees to make necessary changes to its technology, policies, procedures, internal controls and other oversight systems to ensure that the problems identified in the settlement do not recur.
Oversight by Independent Reviewer: Amy Walsh, a partner with the law firm Morvillo LLP, has been selected to serve as independent reviewer to verify that Chase complies with the settlement order. The independent reviewer will file public reports with the bankruptcy court.
No Effect on Additional Relief by Homeowners: This settlement does not affect the rights of any homeowners to seek any relief against Chase that they may deem appropriate.
Chase Contact Information: Homeowners with questions about the settlement may contact Chase at 866-451-2327.
The settlement is the culmination of actions taken by the U.S. Trustee Program in districts around the country concerning Chase’s improper practices in bankruptcy cases, including robo-signing. Director White commended the U.S. Trustee Program team in the field and headquarters who expertly identified, investigated, litigated and settled this matter, including Deputy Director and General Counsel Ramona Elliott, National Creditor Enforcement Coordinator Gail Geiger and Trial Attorneys Diarmuid Gorham and Kelley Callard.
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The U.S. Trustee Program has 21 regions and 93 field office locations.
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U.S. Trustee Program Reaches $50 Million Settlement with JPMorgan Chase to Protect Homeowners in BankruptcyRead the Press Release
Settlement Addresses Robo-Signing and Other Improper Practices in Bankruptcy Cases
WASHINGTON – The Department of Justice’s United States Trustee Program (USTP) has entered into a national settlement agreement with JPMorgan Chase Bank, N.A. (Chase) requiring Chase to pay more than $50 million including cash payments, mortgage loan credits and loan forgiveness to over 25,000 homeowners who are or were in bankruptcy. Chase will also change internal operations and submit to oversight by an independent compliance reviewer. The proposed settlement has been filed in the United States Bankruptcy Court for the Eastern District of Michigan, where it is subject to court approval.
In the proposed settlement, Chase acknowledges that it filed in bankruptcy courts around the country more than 50,000 payment change notices that were improperly signed, under penalty of perjury, by persons who had not reviewed the accuracy of the notices. More than 25,000 notices were signed in the names of former employees or of employees who had nothing to do with reviewing the accuracy of the filings. The rest of the notices were signed by individuals employed by a third party vendor on matters unrelated to checking the accuracy of the filings.
Chase also acknowledges that it failed to file timely, accurate notices of mortgage payment changes and failed to provide timely, accurate escrow statements.
“It is shocking that the conduct admitted to by Chase in this settlement, including the filing of tens of thousands of documents in court that never had been reviewed by the people who attested to their accuracy, continued as long as it did,” said Acting Associate Attorney General Stuart F. Delery. “Such unlawful and abusive banking practices can deprive American homeowners of a fair chance in the bankruptcy system, and we will not tolerate them.”
“This settlement should signal once again to banks and mortgage servicers that they cannot continue to flout legal requirements, compromise the integrity of the bankruptcy system and abuse their customers in financial distress,” stated U.S. Trustee Program Director Cliff White. “It should be acknowledged that Chase responded to the U.S. Trustee’s court actions by conducting an internal investigation and taking steps to mitigate harm to homeowners. But years after uncovering improper mortgage servicing practices and entering into court-ordered settlements to fix flawed systems, it is deeply disturbing that a major bank would still make improper court filings and fail to provide adequate and timely notices to homeowners about payments due. Other servicers should take note that the U.S. Trustee Program will continue to police their practices and will work to ensure that those who do not comply with bankruptcy law protections for homeowners will pay a price, just as Chase has done in this matter.”
Payments, Credits and Contributions of More Than $50 Million.
In the proposed settlement, Chase agrees to provide payments, credits and contributions totaling more than $50 million:
- Chase will provide $22.4 million in credits and second lien forgiveness to about 400 homeowners who received inaccurate payment increase notices during their bankruptcy cases.
- Chase will pay $10.8 million to more than 12,000 homeowners in bankruptcy through credits or refunds for payment increases or decreases that were not timely filed in bankruptcy court and noticed to the homeowners.
- Chase will pay $4.8 million to more than 18,000 homeowners who did not receive accurate and timely escrow statements. This includes credits for taxes and insurance owed by the homeowners and paid by Chase during periods covered by escrow statements that were not timely filed and transmitted to homeowners.
- Chase will pay $4.9 million, through payment of approximately $600 per loan, to more than 8,000 homeowners whose escrow payments Chase may have applied in a manner inconsistent with escrow statements it provided to the homeowners.
- Chase will contribute $7.5 million to the American Bankruptcy Institute’s endowment for financial education and support for the Credit Abuse Resistance Education Program.
Changes to Internal Operations. In the proposed settlement Chase also agrees to make necessary changes to its technology, policies, procedures, internal controls and other oversight systems to ensure that the problems identified in the settlement do not recur.
Oversight by Independent Reviewer. Amy Walsh, a partner with the law firm Morvillo LLP, has been selected to serve as independent reviewer to verify that Chase complies with the settlement order. The independent reviewer will file public reports with the bankruptcy court.
No Effect on Additional Relief by Homeowners. This settlement does not affect the rights of any homeowners to seek any relief against Chase that they may deem appropriate.
Chase Contact Information. Homeowners with questions about the settlement may contact Chase at 866-451-2327.
The settlement is the culmination of actions taken by the USTP in districts around the country concerning Chase’s improper practices in bankruptcy cases, including robo-signing. Director White commended the USTP team in the field and headquarters who expertly identified, investigated, litigated and settled this matter, including Deputy Director and General Counsel Ramona Elliott, National Creditor Enforcement Coordinator Gail Geiger and Trial Attorneys Diarmuid Gorham and Kelley Callard.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 93 field office locations.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Order Approving Settlement [PDF 3.96 MB]
U.S. Navy Veteran Sentenced to More Than Seven Years for Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – U.S. District Judge Marcia Morales Howard has sentenced Richard Dale Brooks (55, Cocoa) to 7 years and 11 months in federal prison on five counts of receiving child pornography over the Internet, and one count of possessing child pornography. The Court also ordered him to forfeit a computer that he had used in the commission of the offenses.
A federal jury found Brooks guilty, after a three-day trial, on June 5, 2014.
At trial, the government presented evidence that law enforcement had identified Richard Dale Brooks while investigating individuals sharing child pornography via a peer-to-peer file-sharing program in May 2012. Law enforcement obtained a search warrant for Brooks’s Jacksonville residence and discovered several computers containing child pornography. Specifically, agents discovered that Brooks had received at least 49 still images and 78 video files of child pornography, including depictions of prepubescent minors and child pornography material portraying sadistic and masochistic conduct, and depictions of violence.
According to court documents, Brooks requested a sentence of 60 months’ imprisonment, the lowest available sentence under the law, in light of his 20-year military career and his lack of criminal history.
The case was investigated by the U.S. Immigration and Customs Enforcement's Homeland Security Investigations and the Jacksonville Sheriff's Office. It was prosecuted by Assistant United States Attorney Kelly S. Karase.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Two Members of Sports Betting Ring Sentenced to Prison for RacketeeringRead the Press Release
PHILADELPHIA – Two members of the Mastronardo Bookmaking Organization, a multi-million dollar sports betting operation, were sentenced to prison today by U.S. District Court Judge Jan E. DuBois. John Vito Mastronardo, Jr., 59, of Boca Raton, Florida, was sentenced to nine months in prison, to be followed by three years of supervised release with the first 9 months on house arrest, and a $5,000 fine. He pleaded guilty, on February 6, 2014, to conspiring to participate in a racketeering enterprise (RICO), conducting an illegal gambling business, conducting three conspiracies to launder money, and transmitting wagering information. Joseph F. Mastronardo, 33, of Huntingdon Valley, Pennsylvania, was sentenced to five months in prison, to be followed by three years of supervised release with the first 5 months on house arrest, and a $5,000 fine. He pleaded guilty, on January 31, 2014, to conspiring to participate in a racketeering enterprise (RICO), conducting an illegal gambling business, conspiring to launder money, and aggravated structuring. Joseph F. Mastronardo is the son of Joseph Vito Mastronardo, Jr., who was the leader of the organization.
At its peak, the Mastronardo Bookmaking Organization had more than 1,000 bettors and was generating millions of dollars a year. Between January 1, 2005 and January 1, 2011, the organization utilized internet websites (www.betroma.com and www.betrose.com) and telephone numbers that allowed bettors to place sports bets on football, baseball, basketball, golf, horse racing, and other sporting events. Residents of Costa Rica staffed the internet websites and answered the telephones. In 2006 and 2010, law enforcement seized over $2.1 million of cash that Joseph Vito Mastronardo, Jr., hid in and around his home, including in specially-built secret compartments and in PVC pipes that were buried in his backyard.
A total of 16 defendants were indicted in the case, 15 of whom were charged with conspiring to participate in a racketeering enterprise (RICO) and conducting an illegal gambling business. All 15 pleaded guilty. Charges against the 16th defendant, Joanna Mastronardo, will be dismissed. U.S. District Court Judge Jan E. DuBois has ordered the forfeiture of approximately $3.7 million in the case. Sentencing hearings are pending for 12 of the defendants.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, the Montgomery County Detective Bureau, and the Montgomery County District Attorney’s Office. It is being prosecuted by Assistant United States Attorney Jason P. Bologna and Department of Justice Trial Attorney Kelly Pearson.
Two Indicted for Making Terrorist HoaxRead the Press Release
Oklahoma City, Oklahoma – Today, a federal grand jury returned an indictment charging ISRAA JAFAR ALI, 19, from Oklahoma City, and SAJJAD HUSSEIN AL FEHAIDAH, 23, from Saudi Arabia, with conspiracy to make a terrorist hoax and for making a terrorist hoax, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to the indictment, it is alleged that on September 19, 2014, Ms. Ali made a 911 call to the Edmond Police Department using the cell phone of her boyfriend, Mr. Al Fenaidah. Ms. Ali allegedly reported that a Saudi Arabian international male student would commit a suicide bombing at an unspecified Christian church near the University of Central Oklahoma (UCO) campus within two to three weeks by strapping ion himself an explosive device (a bomb laden vest containing nails) to kill a number of people. It is alleged that Mr. Al Fenaidah provided Ms. Ali his cell phone to make the false report and accessed his Facebook account to research biographical information on the Saudi Arabian male to provide to Ali. The indictment alleges that the purpose of the conspiracy by Ali and Fehaidah was to retaliate against the Saudi Arabian male international student.
If convicted, each defendant faces up to five years in prison and a $250,000 fine on the conspiracy count and up to five years in prison and a $250,000 fine on the terrorist hoax count. Reference is made to the court record for further information. The public is reminded this is simply a charge and both defendants are presumed innocent unless and until they are convicted beyond a reasonable doubt.
The Federal Bureau of Investigation and United States Attorney’s Office would like to thank the Edmond Police Department and the following members of the FBI Joint Terrorism Task Force who assisted in the investigation: the Oklahoma City Police Department, the Oklahoma Highway Patrol, the United States Secret Service, and the Department of Homeland Security. The case is being prosecuted by Assistant U.S. Attorney Ed Kumiega.
Two Former Civilian Military Employees and One Military Contractor Convicted in Bribery Scheme at Georgia Military BaseRead the Press Release
Two former civilian employees at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, and one military contractor were convicted by a federal jury today of bribery and fraud charges related to military trucking contracts, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
Christopher Whitman, 48, co-owner of United Logistics, an Albany-based trucking company and freight transportation broker, was convicted of 43 counts of honest services wire fraud, five counts of bribery, five counts of obstructing justice and one count of theft of government property. Shawn McCarty, 36, of Albany, Georgia, a former employee at the MCLB-Albany, was convicted of 15 counts of honest services wire fraud, one count of bribery and one count of obstructing justice. Bradford Newell, 43, of Sylvester, Georgia, also a former employee at the MCLB-Albany, was convicted of 13 counts of honest services wire fraud, one count of bribery and one count of theft of government property.
According to evidence presented at trial, Whitman paid more than $800,000 in bribes to three former officials of the Defense Logistics Agency (DLA) at the MCLB-Albany, including the head of the DLA Traffic Office and McCarty, to obtain commercial trucking business from the base. The transportation contracts were loaded with unnecessary premium-priced requirements, including expedited service, expensive trailers and exclusive use, which requires that freight be shipped separately from other equipment, even if that results in a truck not being filled to capacity. As a result of these contracts, Whitman’s company grossed more than $37 million over less than four years.
The evidence further demonstrated that Whitman paid approximately $200,000 in bribes to the former inventory control manager of the Distribution Management Center at MCLB-Albany, Newell and others, who used their official positions to help Whitman steal more than $1 million in surplus equipment from the base, including bulldozers, cranes and front-end loaders. In exchange for the bribes, Newell and the inventory control manager removed the surplus items from Marine Corps inventory and arranged to have them transported off the base by Whitman’s company. Whitman then arranged to improve and paint the stolen equipment, and sell it to private purchasers.
One former United Logistics employee, a business partner of Whitman’s, two former DLA officials and another MCLB official previously pleaded guilty for their roles in the fraud and corruption scheme.
The case was investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit, Defense Criminal Investigative Service, DLA Office of the Inspector General, and the Department of Labor Office of the Inspector General. The case is being prosecuted by Deputy Chief J.P. Cooney and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. The associated forfeiture litigation is being handled by Assistant Deputy Chief Darrin McCullough of the Asset Forfeiture and Money Laundering Section and the Middle District of Georgia.