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15 April 2015
Baltimore Man Sentenced in Fraud Scheme with Losses of More Than $600,000Read the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Curlee Smittie, age 42, of Baltimore, today to 18 months in prison followed by three years of supervised release for wire fraud in connection with a scheme to defraud his bank and an automobile auction house. Chief Judge Blake also entered an order that Smittie pay restitution of $632,850.24.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea agreement, from April 2008 until January 2009, Smittie fraudulently obtained checks from an automobile auction company by buying cars he already owned, using the company’s short-term credit program.
The company operates auction houses for automobile dealers at locations throughout the United States. Automobile dealers must be registered with the company to buy or sell automobiles at its locations. An individual who wishes to sell an automobile must list the car for sale under the name of a registered automobile dealer. Smittie was registered as a buyer and a seller under the company name Smittie Auto Brokers.
For buyers with an established track record of timely payment, such as Smittie, the company extended short term credit for purchases. Under this arrangement, the company issued a check for the proceeds of the automobile sale to the seller of the automobile on the day of sale. The buyer was allowed to take the automobile, with the promise to pay the purchase price to the auction company within two weeks.
Smittie admitted that he would list an automobile that he already owned for sale under the name of another registered automobile dealer. Smittie then purchased the automobile in his own name or the name of Smittie Auto Brokers, using the auction company’s short term credit program. Thus, Smittie was “selling” the car to himself using the company’s money.
As the person who had listed the car for auction, Smittie accepted the seller proceeds check from the company and deposited those checks into his business checking account. When the time came for Smittie to repay the short term loan from the auction company, Smittie sold another car to himself in the same manner, and used the seller proceeds to pay the previous debt.
As a result of the scheme, from April 2008 until January 2009, Smittie received a total of $2,126,997.50 in seller checks from the auction company and deposited them into his bank account.
In January 2009, employees at the auction company learned of Smittie’s scheme and ordered its bank to stop payment on all checks to sellers from whom Smittie had purchased automobiles. Once all of the checks that Smittie had recently deposited were reversed, the bank was left with a loss of $166,500.16.
When the auction company discovered Smittie’s scheme, Smittie owed the company $702,956.28 for automobiles that he had purchased using the company’s short term credit. The company was able to recover $236,606.20 by repossessing some of the automobiles Smittie had purchased, but was left with a loss of $466,350.08.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the case.
BB&T Bank Robber Sentenced to Federal PrisonRead the Press Release
Orlando, FL – Senior U.S. District Judge G. Kendall Sharp today sentenced Kenyada Emanuel Jacobs (42, Casselberry) to 5 years and 10 months in federal prison for bank robbery. He was also ordered to pay restitution in the amount of $1,750 to BB&T Bank. Jacobs pleaded guilty on January 15, 2015.
According to court documents, on October 27, 2014, Jacobs robbed a BB&T Bank located in Casselberry, Florida. Officers responded to the scene of the robbery and reviewed the bank’s surveillance footage. The officers recognized Jacobs because they had responded to a domestic disturbance involving Jacobs only hours earlier.
This case was investigated by Federal Bureau of Investigation and the Casselberry Police Department. It was prosecuted by Assistant United States Attorney Embry J. Kidd.
Antitrust Division Issues 2015 Annual NewsletterRead the Press Release
The Department of Justice’s Antitrust Division today issued the 2015 edition of its annual newsletter. The newsletter highlights the Antitrust Division’s civil and criminal enforcement actions, international cooperation efforts and competition guidance and advocacy over the last year.
The newsletter includes a message from Assistant Attorney General Bill Baer discussing the division’s recent litigation successes, prosecution of domestic and international cartels, efforts to provide antitrust guidance as new business models and technologies emerge, and continued competition advocacy, both in the U.S. and abroad. Assistant Attorney General Baer emphasized that the division’s ability to enforce antitrust laws across many different industries requires adherence to certain core principles: “We do not pick winners and losers; we focus on removing obstacles to competitive markets and protecting market structures that encourage competition. We want innovators to innovate and disrupters to disrupt, and for American consumers to benefit from dynamic markets.”
This year’s newsletter describes the division’s criminal enforcement efforts, which included obtaining approximately $1.3 billion in criminal fines and penalties – the largest amount ever secured by the division in a single fiscal year – and the incarceration of 21 executives for criminal violations of U.S. antitrust laws. The division also brought its first prosecution against a conspiracy specifically targeting e-commerce, in which pricing algorithms were manipulated to fix prices on the internet.
The civil enforcement update in the newsletter discusses the successful challenge, after a seven-week trial, to American Express’s antisteering rules. The newsletter refers to the decision of National CineMedia and Screenvision to abandon their proposed merger to monopoly after the division sued to enjoin the deal, and details the division’s successful effort to unwind a consummated merger to monopoly in the New York City “hop-on, hop-off” tour bus market. The newsletter also reports on the division’s recent use of disgorgement to ensure that defendants do not profit from unlawful conduct.
Finally, the newsletter includes profiles on division attorneys and economists, as well as an article on the division’s diversity initiatives.
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Amherst Doctor Arrested for Distributing Controlled Substances and Obtaining Prescriptions by FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr., announced today that Dr. Albert R. Cowie, 36, of Amherst, NY, was arrested this morning and charged by criminal complaint with unlawful distribution of a controlled substance, possession of a controlled substance by fraud, and conspiracy to commit a drug felony. The charges carry a maximum penalty of 20 years in prison, a $1,000,000 fine or both.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that according to the complaint, between January 25, 2010 and March 22, 2014, the defendant, a practicing radiologist, wrote 280 illegal prescriptions for controlled substances such as Oxycodone, Percocet, and Hydrocodone. The prescriptions were distributed to three individuals who then went to local pharmacies and had the scripts filled. According to the complaint, the individuals retained some of the controlled substances for personal use but returned the remainder of the narcotics to Cowie for his own use.
The complaint states that the defendant also established a relationship with a prostitute he met at an area strip club. As the relationship continued, Cowie provided $200 a day to the prostitute to support a heroin addiction. The defendant allegedly also injected the prostitute with heroin on one occasion. Subsequently, the defendant gave the prostitute prescriptions for Xanax and Percocet.
The complaint further states that during a meeting between Cowie and a confidential witness, the defendant advised the witness to lie to insurance investigators about his alleged prescription fraud. The witness is quoted as saying to the defendant “okay so just say they were written for me even though they were written for you…is what you’re saying? Cowie replied “right.”
“At a time when many in this community continue to struggle with serious opiate addiction, today’s arrest reveals that such powerful narcotics can sometimes become available for abuse because of the illegal actions of those in the medical community, said U.S. Attorney Hochul.”
Drug Enforcement Administration Special Agent in Charge James J. Hunt stated, “Not only was Dr. Cowie abusing his power to write prescriptions for pain medication, he was abusing the prescription pills himself. As a health care professional, Dr. Cowie should have known better, but this case proves that opiate addiction is a threat to everyone, to all socio and economic strata.” SAC Hunt would like to commend the DEA Buffalo Resident Office and the United States Attorney’s Office Western District of New York for their diligent work on this investigation.
The criminal complaint is the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Federal Bureau of Investigation, the New York State Bureau of Narcotic Enforcement, under the direction of NYS Health Commissioner Howard Zucker, and the Amherst Police Department, under the direction of Chief John Askey.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Amherst Doctor Arrested for Distributing Controlled SubstancesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr., announced today that Dr. Albert R. Cowie, 36, of Amherst, NY, was arrested and charged by criminal complaint with unlawful distribution of a controlled substance, possession of a controlled substance by fraud, and conspiracy to commit a drug felony. The charges carry a maximum penalty of 20 years in prison, a $1,000,000 fine or both.Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that according to the complaint, between January 25, 2010 and March 22, 2014, the defendant, a practicing radiologist, wrote 280 illegal prescriptions for controlled substances such as Oxycodone, Percocet, and Hydrocodone. The prescriptions were distributed to three individuals who then went to local pharmacies and had the scripts filled. According to the complaint, the individuals retained some of the controlled substances for personal use but returned the remainder of the narcotics to Cowie for his own use.
The complaint states that the defendant also established a relationship with a prostitute he met at an area strip club. As the relationship continued, Cowie provided $200 a day to the prostitute to support a heroin addiction. The defendant allegedly also injected the prostitute with heroin on one occasion. Subsequently, the defendant gave the prostitute prescriptions for Xanax and Percocet.
The complaint further states that during a meeting between Cowie and a confidential witness, the defendant advised the witness to lie to insurance investigators about his alleged prescription fraud. The witness is quoted as saying to the defendant “okay so just say they were written for me even though they were written for you…is what you’re saying? Cowie replied “right.”
“At a time when many in this community continue to struggle with serious opiate addiction, today’s arrest reveals that such powerful narcotics can sometimes become available for abuse because of the illegal actions of those in the medical community, said U.S. Attorney Hochul.”
Drug Enforcement Administration Special Agent in Charge James J. Hunt stated, “Not only was Dr. Cowie abusing his power to write prescriptions for pain medication, he was abusing the prescription pills himself. As a health care professional, Dr. Cowie should have known better, but this case proves that opiate addiction is a threat to everyone, to all socio and economic strata.” SAC Hunt would like to commend the DEA Buffalo Resident Office and the United States Attorney’s Office Western District of New York for their diligent work on this investigation.
The criminal complaint is the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Federal Bureau of Investigation, the New York State Bureau of Narcotic Enforcement, under the direction of NYS Health Commissioner Howard Zucker, and the Amherst Police Department, under the direction of Chief John Askey.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Alta, Iowa, Woman Sentenced to Federal Prison for Methamphetamine ConspiracyRead the Press Release
A woman who conspired to distribute methamphetamine was sentenced April 10, 2015, to eight years in federal prison.
Amanda Lee, age 23, from Alta, Iowa, received the prison term after a November 12, 2014, guilty plea to conspiracy to distribute 500 grams or more of methamphetamine mixture.
At the guilty plea, Lee admitted her involvement from February 2013 through February 2014, in a conspiracy that distributed at least 1500 grams of methamphetamine mixture. On February 14, 2014, Sioux City police officers were dispatched to a motel where defendant stayed. Officers found methamphetamine and a loaded revolver. An iPhone was seized from defendant that revealed several text messages with drug-related content and drug-related photos. Transcripts from the stored text messages revealed the defendant sold methamphetamine and possessed a handgun. Defendant was being supplied methamphetamine and was re-selling it in the Sioux City area.
Lee was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Lee was sentenced to 96 months’ imprisonment. A special assessment of $100 was imposed. She must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Lee 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 Jack Lammers and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, which consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Bureau of Immigration and Customs Enforcement; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshal Service; South Dakota Division of Criminal Investigation; and the Woodbury County Attorney’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is 14-4039.
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"Aiken Safe Communities": Two Men Sentenced on Federal Gun ChargesRead the Press Release
Contact Person: Lance Crick (864) 282-2100
COLUMBIA, South Carolina ---- United States Attorney Bill N. Nettles, stated today that two Aiken men, Jesse James Quarles, 34, and Kenneth Islar, 29, were sentenced in federal court in Columbia, each on charges of felon in possession of a firearm, a violation of Title 18, United States Code, Section 922(g)(1). Quarles, classified as an Armed Career Criminal based on his extensive criminal history, was subject to a statutory mandatory minimum of 15 years in prison and was sentenced to a term of imprisonment of 180 months. The Court sentenced Islar to 75 months in prison.
Quarles and Islar were indicted in July 2014 by a federal grand jury in separate indictments and entered guilty pleas in October. As to Quarles, evidence presented at the guilty plea hearing revealed that Quarles possessed a 9mm pistol while at a residence in Aiken County in April 2013. As to Islar, on May 30, 2014, he possessed and discharged a .380 caliber pistol in the Bi-Lo parking lot in Aiken. District Judge J. Michelle Childs of Columbia accepted the guilty pleas and sentenced both defendants Quarles and Islar previously waived their right to a detention hearing in October and remain in custody.
Prior to the federal firearms prosecution, Quarles and Islar were selected to participate in the Aiken Safe Communities. Launched in early 2013, the Aiken Safe Communities Initiative is a unified, proactive community approach to engage, educate, and encourage recurring offenders to change their behavior and make healthy life choices. The initiative also bands together local, state, and federal law enforcement to expedite the investigation and prosecution of individuals who reoffend in lieu of accepting opportunities and assistance offered by the community during public notification meetings held in Aiken several times a year. The next Safe Communities Offender Notification meeting will be held at 6pm on Thursday, May 14, 2015, at Aiken City Hall. The meeting is open to the public.
From 2012-2013, the city of Aiken experienced an 86% reduction in murders. Earlier this year, the South Carolina Community Development Association presented the city of Aiken with its 2014 Award of Excellence, recognizing community development efforts that have significantly improved the quality of life in the community.
Both cases were investigated by the ATF Regional Anti-Gang Enforcement (RAGE) Unit, a joint gang/violent crime task force with the Aiken Department of Public Safety, Aiken County Sheriff’s Office, North Augusta Department of Public Safety, Richmond County Sheriff’s Office, South Carolina Law Enforcement Division, the 2nd Circuit Solicitor’s Office (Aiken, Bamberg, and Barnwell counties), and the Bureau of Alcohol, Tobacco, Firearms and Explosives. These prosecutions as well as the United States Attorney’s Office ongoing commitment to the Aiken Safe Communities Initiative are part of Operation CeaseFire. CeaseFire is a joint local, state, and federal initiative which seeks to prosecute aggressively individuals who unlawfully use, possess, or transfer firearms. Both cases are assigned to Assistant United States Attorney Lance Crick of the Greenville office.
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$1.3M Settlement with Asbury Health Center Resolves False Claims Act AllegationsRead the Press Release
PITTSBURGH - Asbury Health Center, a continuing-care retirement community located in Pittsburgh, has agreed to pay the United States $1,331,837.96 to settle False Claims Act allegations, United States Attorney David J. Hickton announced today.
The settlement results from a self-disclosure by Asbury to the United States Attorney’s Office and Office of Inspector General of the Department of Health and Human Services concerning Medicare payments for skilled nursing facility services. For post-hospital skilled nursing care, Medicare regulations require that a facility obtain a physician certification at the time of admission or as soon thereafter as reasonable and practical. The facility must also obtain a physician recertification within 14 days of admission and every 30 days thereafter. Based on information provided by Asbury, the United States alleged that it had civil claims against Asbury resulting from Medicare payments for post-hospital skilled nursing services that were not supported by physician certifications and recertifications. The settlement resolves the matter without the filing of litigation.
This matter was investigated by the United States Attorney’s Office for the Western District of Pennsylvania and the Office of Inspector General of the Department of Health and Human Services. Assistant United States Attorney David Lew handled this matter on behalf of the United States.
14 April 2015
Zuni Pueblo Man Pleads Guilty to Domestic Assault by a Habitual Offender ChargeRead the Press Release
ALBUQUERQUE – Christopher T. Tsalate, 27, pleaded guilty this morning to a domestic assault by a habitual offender charge. Under the terms of his plea agreement, Tsalate will be sentenced to 14 months and 17 days in federal prison followed by a term of supervised release to be determined by the court.
Tsalate, a member and resident of Zuni Pueblo, N.M., was arrested on Jan. 11, 2015, on an indictment charging him with domestic assault of an intimate partner by a habitual offender based on his two prior domestic violence convictions in the Pueblo of Zuni Tribal Court.
This morning, Tsalate pled guilty to the indictment and admitted assaulting the victim, his spouse, on May 7, 2014, in McKinley County, N.M.
Court records reflect that Tsalate previously was convicted on domestic violence charges before the Zuni Tribal Court in May 2010 and Oct. 2012. The victim in this case was also the victim in both of the prior tribal court cases.
Tsalate remains on conditions of release at a half-way house pending his sentencing hearing which has yet to be scheduled.
This case was investigated by the Zuni Pueblo Tribal Police Department and is being prosecuted by Assistant U.S. Attorney Novaline Wilson. It was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Woodbridge Man Sentenced to 51 Months in Prison for Stealing More Than $1 Million from Milford CompanyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that GIOVANNI MASUCCI, also known as John Masucci, 44, of Woodbridge, was sentenced today by U.S. District Judge Jeffrey A. Meyer in Bridgeport to 51 months of imprisonment, followed by three years of supervised release, for stealing more than $1 million from a Connecticut company.
According to court documents and statements made in court, MASUCCI operated a financial consulting business in North Haven. As part of his business, he provided financial consulting services to a company located in Milford and had access to the company’s checkbooks and financial ledgers. From approximately September 2011 to February 2014, MASUCCI defrauded the Milford company by diverting company funds to his own bank account. He also wrote checks from the company’s bank account to pay his personal credit card bills and the credit card bills of a personal acquaintance. As part of the scheme, MASUCCI created false entries in the corporate check ledger that falsely indicated the checks were written for legitimate business purposes, and he typically forged the signature of the authorized company representative on the checks. In order to conceal his crime, MASUCCI took the company’s check book.
The investigation revealed that MASUCCI used the stolen funds to pay for domestic and international travel, lodging, and to make purchases at several high-end retailers.
Judge Meyer ordered MASUCCI to pay restitution of at least $1.16 million. A final restitution order will be issued after further court proceedings.
MASUCCI was arrested on July 13, 2014. On November 13, he pleaded guilty to one count of wire fraud.
This matter was investigated by the Connecticut Financial Crimes Task Force, the United States Secret Service and the Greenwich Police Department. The case was prosecuted by Assistant U.S. Attorney Ray Miller.
Winters Man Sentenced to 13 Years in Prison for Child Pornography OffenseRead the Press Release
SACRAMENTO, Calif. — Michael Rea, 26, of Winters, was sentenced today by United States District Judge John A. Mendez to 13 years and one month in prison for receiving child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, Rea is a registered sex offender with a history of repeatedly failing to update his registration information. In September 2013, Rea was on probation for a prior conviction for failing to register as required by California’s sex offender registration laws. Agents of the Sacramento Sexual Assault Felony Enforcement (SAFE) Taskforce and the Federal Bureau of Investigation found Rea living with a child at a location where he was not registered to live. A search of his belongings found a DVD containing six movies of children being sexually abused. Rea has been in custody since his arrest.
The SAFE Team is a multi-jurisdictional task force created with grant funding from the California State Office of Emergency Services. The SAFE Task Force is composed of members from the Sacramento County Sheriff’s Office, the Sacramento Police Department, the Sacramento County Probation Department, and the U.S. Marshals Service, and receives support from the California Department of Corrections and Rehabilitation. Assistant United States Attorney Matthew G. Morris prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety.
Docket #: 2:13-cr-397 JAM
Wilbarger County Man Sentenced to 40 Years in Federal Prison on Methamphetamine ConvictionRead the Press Release
WICHITA FALLS, Texas — A Wilbarger County man, who possessed methamphetamine with the intent to distribute it, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to a lengthy federal prison term, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Benny Dennis, 54, of Electra, Texas, was sentenced to 40 years in federal prison at a sentencing hearing held yesterday in federal court in Wichita Falls, Texas. Dennis pleaded guilty on September 30, 2014, to one count of possession with intent to distribute and distribution of five grams or more or methamphetamine.
According to documents filed in the case, on March 6, 2014, at the direction of law enforcement, an individual called Dennis to set up a meeting to pay for methamphetamine that Dennis had “fronted” him and to obtain additional methamphetamine from Dennis. The two met at a house on North Wilbarger Street in Electra. During the meeting, the individual paid Dennis $1,500 cash for one ounce of methamphetamine that Dennis had “fronted” him a few days earlier, and Dennis agreed to “front” the individual an additional ounce of methamphetamine. Dennis advised he had to go to a house on East Lincoln Street in Electra to get the methamphetamine. The individual and Dennis travelled separately to that location and met there a little while later. Dennis gave the individual a clear plastic bag of a clear, crystal-like substance. That substance, which was later tested by a Texas Department of Public Safety laboratory, was, in fact, 27.98 net grams of methamphetamine and had a purity level of 95%, which exceeds five actual grams of methamphetamine.
The Texas Department of Public Safety, the Wichita County District Attorney’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Mary Walters prosecuted.
United States Attorney Announces Settlement with the Fabco Discount Shoe Store for Barring A Wheelchair Bound Woman from Shopping in Its Brooklyn Branch StoreRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the settlement of a federal civil rights suit against the FABCO Shoe Store chain (“FABCO”), for violations of the Americans With Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq. The ADA prohibits discrimination against people with disabilities and requires places of public accommodation to make reasonable accommodations to allow people with disabilities to use and enjoy their facilities.
The settlement resolves claims made by Amal Mohamed, who is disabled and confined to a wheelchair. Mrs. Mohamed alleged that on May 1, 2013, she entered the FABCO branch located at 2171 86th Street in Brooklyn to buy shoes for herself and her children. She further alleged that a FABCO employee told her she was not permitted in the store because the tires on her motorized wheelchair might soil the store’s carpet. Mrs. Mohamed stated that the FABCO employee attempted to remove her physically from the store and stopped only when the employee discovered the wheelchair was too heavy to be moved.
Under the settlement, FABCO will pay $10,000 to Mrs. Mohamed. It will also train all of its store managers on their obligations and responsibilities under the ADA, and FABCO has agreed to post signs in each of its 51 stores welcoming people with disabilities. FABCO cooperated in the government’s investigation.
“Instead of treating Mrs. Mohammad like any other customer, FABCO violated her rights under the ADA by not allowing her to shop for herself and her children and attempting to remove her from the store,” stated U.S. Attorney Lynch. “This settlement serves notice that store owners who fail to respect the rights of individuals with disabilities will be held accountable for their actions.”
FABCO owns and operates 51 discount shoe stores throughout Brooklyn, Queens, Manhattan, and the Bronx, as well as in New Jersey and Westchester County.
Kevan Cleary, Senior Trial Counsel, handled this matter on behalf of the United States.
Two Georgia Men Sentenced to Prison for Stolen Identity Tax Refund FraudRead the Press Release
Two Georgia residents were sentenced today in U.S. District Court in Atlanta for their involvement in a stolen identity tax refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney John A. Horn of the Northern District of Georgia.
Obi Emelogu, 51, of Woodstock, Georgia, was sentenced to serve 45 months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $719,872. Oloh Samuel, 33, of Acworth, Georgia, was sentenced to serve 18 months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $146,179. On Oct. 10, 2014, Emelogu pleaded guilty to conspiracy to defraud the United States and aggravated identity theft. On Dec. 2, 2014, Samuel pleaded guilty to conspiracy to defraud the United States.
“One of the Tax Division’s highest priorities is prosecuting individuals who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Acting Assistant Attorney General Ciraolo. “This street crime threatens the very fabric of tax administration and often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations and seek to incarcerate the offenders who view the Federal Treasury as their own personal bank account.”
“These defendants brazenly stole money from the American taxpayers with little regard for whom they affect,” said Acting U.S. Attorney Horn. “We have committed resources to combat this kind of theft, and will aggressively pursue and prosecute those who believe they can file false tax returns.”
“IRS-Criminal Investigation will remain proactive in the investigation of individuals and groups especially return preparers, who engage in stealing the identities of innocent people,” said Special Agent in Charge Veronica F. Hyman-Pillot of Internal Revenue Service-Criminal Investigation (IRS-CI). “We will continue to utilize every tool available to investigate those who conspire with each other to victimize members of our community for their own personal gain.”
“These sentences send a clear message that the federal government will aggressively investigate and prosecute the crime of identity theft involving stolen tax refunds,” said J. Russell George, Treasury Inspector General for Tax Administration (TIGTA). “While criminals may find it easy to steal someone’s identity using their personal information, they need to know that the punishment for committing this crime will be commensurate with the devastating toll identity theft takes on its victims.”
According to court documents other information presented in court, Samuel and Emelogu participated in a scheme using stolen identities to file fraudulent federal income tax returns, including tax returns filed using stolen identities. The scheme involved businesses located in Georgia, including S & O Accounting Services LLC, which was controlled by Samuel, and Xpress Auto Parts & Towing LLC and O.B. Consulting & Tax Services LLC., which were controlled by Emelogu. In 2012, Emelogu filed hundreds of false federal income tax returns with the IRS that included fraudulent claims for tax refunds directed to be paid into his business bank accounts and into a bank account controlled by Samuel. Electronic evidence established that additional false tax returns were also filed from overseas and the refunds were deposited into Samuel’s bank account. At sentencing, the court found that the intended loss amount attributable to Emelogu was more than $400,000 and that the intended loss amount attributable to Samuel was more than $1 million.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Horn commended the special agents of IRS-CI and the TIGTA, who investigated the case, and Assistant U.S. Attorney Thomas J. Krepp of the Northern District of Georgia and Trial Attorney Jason H. Poole of the Tax Division, who prosecuted the case.
Two Georgia Men Sentenced for Conspiring to File False Tax ReturnsRead the Press Release
ATLANTA - Obi Emelogu and Oloh Samuel have been sentenced for their involvement in a tax refund fraud scheme in which Emelogu filed false income tax returns and directed that the fraudulent refunds be deposited into bank accounts he and Samuel controlled.
“These defendants brazenly stole money from the American taxpayers with little regard for whom they affect,” said Acting U.S. Attorney John Horn. “We have committed resources to combat this kind of theft, and will aggressively pursue and prosecute those who believe they can file false tax returns.”
“One of the Tax Division’s highest priorities is prosecuting individuals who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Acting Assistant Attorney General Ciraolo. “This street crime threatens the very fabric of tax administration and often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations and seek to incarcerate the offenders who view the Federal Treasury as their own personal bank account.”
“IRS Criminal Investigation will remain proactive in the investigation of individuals and groups especially return preparers, who engage in stealing the identities of innocent people,” said Veronica F. Hyman-Pillot, Special Agent in Charge. “We will continue to utilize every tool available to investigate those who conspire with each other to victimize members of our community for their own personal gain.”
“These sentences send a clear message that the federal government will aggressively investigate and prosecute the crime of identity theft involving stolen tax refunds,” said J. Russell George, Treasury Inspector General for Tax Administration (TIGTA). “While criminals may find it easy to steal someone’s identity using their personal information, they need to know that the punishment for committing this crime will be commensurate with the devastating toll identity theft takes on its victims.”
According to Acting United States Attorney Horn, the charges and other information presented in court: Emelogu owned and operated “O.B. Consulting and Tax Services, LLC,” a tax preparation business in Marietta, Georgia. In 2012, Emelogu filed hundreds of false tax returns claiming fraudulent refunds that were directed into his bank account. Emelgou also filed false tax returns that were deposited into a bank account Samuel controlled. Electronic evidence also showed that additional false tax returns were filed from overseas and refunds were deposited into Samuel’s bank account. Many of the tax refunds that were directed into the defendants’ bank accounts came from tax returns that used stolen names and social security numbers.
Obi Emelogu, 51, of Woodstock, Georgia, has been sentenced to three years, and nine months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $719,872. Emelogu was convicted on these charges on October 10, 2014, after he pleaded guilty.
Oloh Samuel, 33, of Acworth, Georgia, has been sentenced to one year, and six months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $146,179. Samuel was convicted on these charges on December 2, 2014, after he pleaded guilty.
This case was investigated by the Internal Revenue Service Criminal Investigation and the U.S. Treasury Inspector General for Tax Administration.
Assistant United States Attorney Thomas J. Krepp and DOJ Criminal Tax Division Trial Attorney Jason Poole 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/.
Texas Doctor Sentenced to Prison for Health Care Fraud SchemeRead the Press Release
TYLER, Texas – A 63-year-old Dallas County, Texas, physician, has been sentenced to federal prison for health care fraud and identity theft violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Tariq Mahmood, 63, of Cedar Hill, Texas, was found guilty by a jury of conspiracy to commit health care fraud, seven counts of health care fraud, and seven counts of aggravated identity theft following a four day trial before U.S. District Judge Michael Schneider. He was sentenced to 135 months in federal prison and ordered to pay restitution in the amount of $599,128.02 to Medicare, Medicaid, and Blue Cross Blue Shield of Texas.
According to information presented in court, Mahmood, a general practitioner, owned and operated several hospitals in the state of Texas, including Cozby Germany Hospital in Grand Saline, Renaissance Terrell Hospital in Terrell, Central Texas Hospital in Cameron, Community General Hospital in Dilley, and Lake Whitney Medical Center in Whitney. From January 2010 to April 2013, Mahmood and others carried out a scheme to defraud Medicare and Medicaid through the submission of false and fraudulent claims. Mahmood and others added, changed, and incorrectly sequenced diagnostic codes in a way that did not reflect the actual diagnoses and conditions of the patients and often did so without reviewing the medical records. They submitted false and fraudulent claims to Medicare and Medicaid based on the added, changed, and incorrectly sequenced diagnostic codes. Mahmood and others also unlawfully used Medicare beneficiaries’ names and Medicare numbers in order to commit health care fraud. Mahmood was indicted by a federal grand jury on April 11, 2013.
“Americans enjoy the best health care in the world and the cost for this care is expensive,” said John M. Bales, U.S. Attorney. “What we do not need is providers like Tariq Mahmood who masquerade as physicians who pretend to care about American health care but actually are determined to loot the Medicare Trust Fund. He is now being held to account, and I congratulate the prosecution team for a job very well done.”
“Today, Dr. Mahmood found out what health care providers who defraud Medicare are finding out all over America, you will be held accountable for your greed,” said Mike Fields, Special Agent in Charge, Department of Health and Human Services - OIG. “HHS-OIG agents will continue to work closely with our State and Federal law enforcement partners to protect the Medicare Trust Fund.”
The case was investigated by the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), and the U.S. Postal Inspection Service (USPIS). This case was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and Frank Coan and Special Assistant U.S. Attorney Ken McGurk.
Any individuals with knowledge of these or other health care fraud violations are encouraged to contact the Department of Health and Human Services’ fraud hotline at 1-800-HHS-TIPS (447-8477).
Tax Fraudster Claims Prison SentenceRead the Press Release
U.S. Attorney for the Southern District of California Laura E. Duffy announced that Arman Eritsian was sentenced in federal court yesterday to a 30-month prison term for his role in a conspiracy to defraud the Internal Revenue Service out of hundreds of thousands of dollars by filing false tax returns in the names of stolen identities. Eritsian is one of 20 defendants who have been sentenced in a series of tax and bank fraud prosecutions targeting organized groups that victimized individuals, financial institutions and the U.S. Treasury.
Eritsian, the lead defendant in one indictment, had earlier admitted that between 2010 and 2012, he conspired with others to steal the identifying information of unwitting victims in order to file false tax returns in their names. The conspirators would direct the IRS to pay bogus refund claims to addresses or bank accounts under their control, and then withdraw the fraud proceeds so they could be spent by the conspirators. For his part, Eritsian admitted that he obtained stolen identities that were later used to file fraudulent returns; utilized multiple addresses and bank accounts to receive tax refund checks; used email accounts to communicate details of the conspiracy with coconspirators; and employed debit cards to monitor accounts opened and maintained to receive fraudulent tax refunds.
Chief District Judge Barry Ted Moskowitz explained that the sentence was warranted in part because Eritisan had sought to defraud the very nation that had welcomed him as a persecuted immigrant just a few years earlier. Eritsian emigrated from Azerbaijan to the United States as an asylum seeker, but soon thereafter began to participate in tax and insurance fraud schemes using stolen identities. Within a matter of months of being released from state custody for one of these scams, Eritsian joined others in the tax fraud scheme that led to his federal conviction and the sentence imposed yesterday.
Eritsian’s sentencing is the latest flowing from the September 2013 arrests of dozens of people in “Operation Trillions Trouble.” The four related cases charged over 50 defendants with multiple tax fraud conspiracies and several schemes to defraud American financial institutions. United States Attorney Laura E. Duffy praised the hard work of agents from the FBI and IRS-CI, along with their state and local counterparts, to disrupt and dismantle these fraud schemes and protect American taxpayers.
Erick Martinez, Special Agent in Charge for IRS Criminal Investigation commented, “Identity theft and tax refund fraud were the lifeblood that Arman Eritsian and his co-conspirators used to further their massive fraud scheme. Yesterday’s sentencing of Eritsian, for his lead role in this crime ring, demonstrates IRS Criminal Investigation’s commitment to holding accountable those who victimize the public through brazen attempts at identity theft and tax refund fraud.”
FBI Special Agent in Charge, Eric S. Birnbaum commented, “The FBI will work tirelessly, using all investigative resources and intelligence capabilities, to dismantle sophisticated criminal enterprises that victimize the American public."
Eritsian was also ordered to pay $58,323 in restitution, most of which had already been collected by the IRS.
DEFENDANT Case Number: 13CR3480-BTMArman Eritsian
Age: 36 Woodland Hills, California CHARGESConspiracy to Commit Mail and Wire Fraud – Title 18, U.S.C., Section 371
INVESTIGATING AGENCIES
Maximum penalty: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitutionFederal Bureau of Investigation
Internal Revenue Service, Criminal InvestigationSouth Florida Doctor Indicted for Medicare FraudRead the Press Release
A South Florida Doctor was charged in a seventy-six count indictment for participating in a Medicare fraud scheme, announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services Office of the Inspector General’s Miami Region (HHS-OIG), Special Agent in Charge Michael D. Angelucci of the U.S. Railroad Retirement Board’s Office of Inspector General (RRB) and Special Agent in Charge John Khin of the Defense Criminal Investigative Service (DCIS).
Salomon E. Melgen, 60, of North Palm Beach, Florida, was chargedin an indictment, with 46 counts of health care fraud, 19 counts of making, presenting and filing false, fictitious and fraudulent claims and 11 counts of making false statements relating to health care.
According to the indictment, Melgen was an ophthalmologist and retina specialist licensed to practice medicine in the state of Florida, who owned and operated Vitreo-Retinal Consultants of the Palm Beaches (VRC), a medical clinic that was incorporated in 1990. VRC conducted business as “Vitreo Retinal Consultants Eye Center” and “The Melgen Retina Eye Center” and had four offices located in Palm Beach and St. Lucie Counties. Melgen’s high-volume medical practice provided services to as many as 100 patients or more in a single day. A large percentage of Melgen’s patients were Medicare beneficiaries.
The indictment alleges that from as early as 2004 and continuing through at least Dec. 31, 2013, Melgen participated in a scheme to defraud Medicare and other health care benefit programs, by submitting false claims and creating fraudulent entries on patients’ medical charts. Melgen is alleged to have falsely diagnosed patients with serious eye conditions, notably age-related macular degeneration (ARMD or AMD) and retinal disorders. Macular degeneration is a disease of the retina that is one of the leading causes of severe vision loss in persons age 65 and older. There are two forms of ARMD, “dry” and “wet.” In patients with dry macular degeneration, the cells of the central area of the retina (the macula) break down, causing distorted and blurred vision. In wet macular degeneration, abnormal blood vessels leak blood and fluid into the macula, causing scarring and rapid loss of vision. Without treatment, wet ARMD can lead to permanent vision loss. Based upon the false diagnoses, the defendant would allegedly perform and bill for medically unreasonable and unnecessary tests and procedures, which included unnecessary laser surgeries and eye injections.
The defendant is also alleged to have made exorbitant and improper profits from the purchase and administration of the drug Lucentis, which is used for the treatment of wet macular degeneration. The defendant would purchase the drug from the manufacturer, Genentech, arrange to have the “single-use” vials split into multiple doses and administered to multiple patients, and then separately bill Medicare and other health care providers at the reimbursement rate for each full dosage.
The defendant is also alleged to have caused patient files to contain false information, including the false diagnoses as well as fictitious drawings and diagrams that misrepresented the condition of the patients’ eyes. The indictment also alleges that the defendant prepared false and fictitious reports regarding his abnormal billing practices, in response to audit inquiries from Medicare.
Additionally, the defendant allegedly submitted claims for incomplete and non-performed diagnostic tests, such as angiographic studies on blind eyes and prosthetic eyes.
The indictment further charges that, between January 2008 and December 2013, the defendant billed the Medicare program more than $190 million, for which he, through VRC, was reimbursed and paid more than $105 million. A substantial portion of these reimbursement payments were allegedly obtained through fraudulent billing.
“Medicare was created to ensure adequate protection for the senior citizens against the cost of health care and to ensure that they are provided with quality medical services,” said U.S. Attorney Ferrer. “Medical professionals who violate their oath by failing to attend to the health of their patients and who submit falsified billing statements for their own personal gain, jeopardize the viability of government benefit programs. Our office will continue to work with all involved agencies to protect our senior citizens, prosecute those individuals who perpetuate the fraudulent schemes and help preserve precious Medicare dollars for the intended beneficiaries – the poor, sick and elderly.”
“People who defraud Medicare indirectly increase the cost of health care for everyone,” said Special Agent in Charge Piro. “The FBI and our law enforcement partners are committed to rooting out this kind of fraud and reclaiming money that was dishonestly obtained.”
“Patients fearing blindness sought treatment from Dr. Melgen’s office,” said Special Agent in Charge Richmond. “Instead, they allegedly received medically unreasonable and unnecessary tests and procedures for which they and taxpayers paid millions of dollars. My office will continue to work with our law enforcement partners to ensure the integrity of the Medicare program.”
“The Office of Inspector General for U.S. Railroad Retirement Board will continue to work with our law enforcement partners to investigate and prosecute any individual that defrauds the Medicare system,” said Special Agent in Charge Angelucci.
"Today's indictment is part of an ongoing effort by the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of federal health care programs and the quality of care our military service members receive,” said Special Agent in Charge Khin. “DCIS will tirelessly pursue allegations of health care fraud that put the Warfighter at risk and burden the Defense Health Agency with unnecessary costs."
Melgen is scheduled to be arraigned on the indictment on April 15, 2015, in West Palm Beach, Florida, before U.S. Magistrate Judge James M. Hopkins of the Southern District of Florida.
U.S. Attorney Ferrer commended the investigative efforts of the FBI, HHS-OIG, RRB and DCIS. This case is being prosecuted by Assistant U.S. Attorneys Roger H. Stefin, Carolyn Bell and Alexandra Chase of the Southern District of Florida.
An indictment is only an accusation and the defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the U.S. Attorney's Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the U.S. District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Silent Business Partner of Organized Crime-Controlled World Trade Center Contractor Indicted for Scheme to Defraud the Port Authority and Related CrimesRead the Press Release
A ten-count indictment was unsealed today in United States District Court for the Eastern District of New York charging the defendant Vincent Vertuccio, also known as “Vinny,” with conspiracy to defraud the Port Authority of New York and New Jersey in connection with the One World Trade Center project located in lower Manhattan, and related money laundering and tax crimes. The defendant Praful Pandya, an accountant, was charged with aiding and assisting in the preparation of false tax returns for Vertuccio. The defendant John Servider, a lawyer, was charged with Vertuccio with conspiracy to alter, and alteration of, records for use in a grand jury proceeding. The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York, on April 8, 2015.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS), Cheryl Garcia, Special Agent-in-Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (DOL-OIG), Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Michael Nestor, Inspector General, Port Authority of New York and New Jersey, Office of Inspector General (PA-OIG).
As alleged in the indictment, Vincent Vertuccio controlled and directed the activities of Crimson Construction Corporation (Crimson), a company that was awarded a contract for work at the One World Trade Center (1WTC) project in lower Manhattan worth approximately $11.4 million. In seeking the contract, Vertuccio directed an employee of Crimson not to disclose Vertuccio’s role in Crimson because of his ties to organized crime. After being awarded the contract, Crimson received more than $1.5 million in connection with the 1WTC project, of which significant sums were diverted into a bank account held by Vertuccio’s mother and used to pay for renovations to Vertuccio’s daughter’s house. As a result, Crimson was unable to meet its obligations at 1WTC and was terminated from the project. Vertuccio, with the assistance of his accountant Praful Pandya, also submitted false and fraudulent individual tax returns for tax years 2008 and 2011.
After Vertuccio became aware of an ongoing grand jury investigation into his conduct, he and his lawyer, John Servider, allegedly conspired to alter invoices and sales receipts issued by a Manhattan jewelry store so as to remove Vertuccio’s name from the records before they were returned to the grand jury.
“As alleged, Vertuccio and his team of criminal consultants, including his accountant and his lawyer, cheated the taxpayers and the criminal justice system for their own corrupt purposes. We will not tolerate self-serving exploitations of Port Authority projects. We will continue to work closely with our law enforcement partners to vigorously prosecute such criminal activity,” stated United States Attorney Lynch.
“As the federal agency responsible for investigating tax crimes, IRS-Criminal Investigation works with our law enforcement partners on a variety of complex financial fraud investigations toward the mutual goals of protecting the American taxpayer and seeing that everyone pays their fair share. When individuals divert money intended for public projects into their own pockets, they risk committing tax and money laundering crimes in the process, inviting additional criminal sanctions. These consequences are magnified by the steps they take to conceal their actions and cover their tracks,” stated IRS Special Agent-in-Charge Kitchen.
“As alleged, the defendants defrauded the Port Authority and the construction of One World Trade Center. When they learned of our investigation, they altered invoices, changed names, and doctored receipts in a vain attempt to avoid detection. We have no tolerance for the shakedown of projects,” stated FBI Assistant Director-in-Charge Rodriguez.
“Today serves as an unfortunate reminder that as alleged in the indictment, organized crime continues to plague the region’s construction industry. Accordingly, we remain vigilant in protecting Port Authority projects and programs from fraudsters who line their pockets at the expense of law-abiding citizens,” stated PA-OIG Inspector General Nestor. Mr. Nestor expressed thanks to his law enforcement partners for their dedication and skill in the investigation of this case and commended the One World Trade Center integrity monitor whose efforts were integral in detecting some of the alleged schemes.
The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Roanne L. Mann at the federal courthouse in Brooklyn. The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled jointly by the Office’s Organized Crime & Gangs Section and the Public Integrity Section. Assistant United States Attorneys Lan Nguyen and M. Kristin Mace, and Special Assistant United States Attorney Jonathan P. Lax are in charge of the prosecution.
The Defendants:
VINCENT VERTUCCIO, a/k/a “Vinny”
Age: 60
Maspeth, NY
PRAFUL PANDYA
Age: 68
Forest Hills, NY
JOHN SERVIDER
Age: 53
Patterson, NY
E.D.N.Y. Docket No. 15-CR-174 (SRT)
Selah Man Sentenced to Twenty-Four Months’ Prison and Three Years’ Court Supervision for Tax Fraud ConspiracyRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Matthew D. Nowlin, age 45, was sentenced for the crime of conspiring to defraud the United States by preparing and filing approximately 49 false claims for income tax refunds. Mr. Nowlin is a resident of Selah, Washington. United States District Court Judge Salvador Mendoza, Jr., sentenced Matthew D. Nowlin to a twenty-four month term of imprisonment, to be followed by a 3 year term of court supervision upon release from federal prison. The Court also ordered Mr. Nowlin to pay $180,000 in restitution to the IRS. Mr. Nowlin was immediately taken into custody by the U.S. Marshals following sentencing.
According to information disclosed during court proceedings, Nowlin conspired with another individual to prepare approximately 49 income tax returns which contained false information and were designed to illegally obtain approximately $275,000 in refunds. Nowlin’s role in the tax fraud conspiracy was primarily as an "enforcer" to ensure that a conspirator would be paid a preparation fee ($1,000 to $2,500) from the fraudulently-obtained refunds. Nowlin also assisted a conspirator in preparing some of the false claims for tax refunds and transmitted some of the false claims to the IRS. Nowlin and a conspirator obtained the personal identifiers (including their names and Social Security Numbers and their dependents’ names and Social Security Numbers) of other individuals and then used that information to file false claims for tax refunds. As part of the scheme, Nowlin and a conspirator falsely claimed the following refundable tax credits on tax returns: Earned Income Tax Credit (EITC); the Additional Child Tax Credit (ACTC); the Recovery Rebate Credit; and the Making Work Pay Credit. As part of the scheme, Nowlin and a conspirator fabricated earned income, reported on the tax returns as Household Help Income (HSH), at amounts to qualify customers for the EITC and other refundable credits. Nowlin’s co-conspirator charged customers $1,000 to $2,500 to prepare their tax returns. Meanwhile, the industry-standard fee for preparing returns is approximately $100 to $200.
Michael C. Ormsby said, "The privilege of living well in the United States carries certain burdens, one of which is the voluntary payment of taxes. The system only works when everyone truthfully reports their income, pays their fair share of taxes, and does not make false claims for tax refunds."
Assistant Special Agent in Charge Steve Bellis of IRS Criminal Investigation said, "Matthew Nowlin's actions effectively stole from honest, hardworking U.S. taxpayers. This is a vivid reminder during this tax filing season to use sound reason by selecting a reputable return preparer."
The investigation was conducted by the Internal Revenue Service, Criminal Investigation. The case was prosecuted by George J.C. Jacobs, III, and Ian Garriques, Assistant United States Attorneys for the Eastern District of Washington.
Pennsylvania teacher convicted of traveling to have sex with minorRead the Press Release
CLARKSBURG, WEST VIRGINIA – Daniel S. McGarvey, 44, a teacher from Uniontown, Pennsylvania, was convicted in federal court after he admitted that he traveled to West Virginia with the intent to engage in sexual conduct with a minor, United States Attorney William J. Ihlenfeld, II, announced.
McGarvey admitted to using internet-based websites and text messaging to communicate with a minor female who he believed to be 15 years old. In October 2014, he travelled to Bridgeport, West Virginia for the purpose of engaging in sexual conduct with the aforementioned minor female.
McGarvey pled guilty today to one count of “Travel with Intent to Engage in Illicit Sexual Conduct” following an investigation by the Bridgeport Police Department and the West Virginia Internet Crimes Against Children Task Force. He faces up to 30 years in prison and fine of up to $250,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government.
U.S. Magistrate Judge John S. Kaull presided.
Palm Beach County Sheriff's Deputy Indicted for Using Excessive Force and Filing False ReportRead the Press Release
A federal grand jury in West Palm Beach, Florida, returned a two-count indictment charging Palm Beach County Sheriff’s Deputy William D. Wheeler, 46, with unlawfully assaulting a man at the Palm Beach County Detention Center on Oct. 9, 2013, and filing a false report on the incident, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI.
According to the allegations contained in court documents, on or about Oct. 9, 2013, Wheeler was employed as a Palm Beach County Sheriff’s Office Deputy and was assigned to the Corrections Division (PBSO) West Detention Center located in Belle Glade, Florida. As part of his duties, the complaint alleges that Wheeler escorted an inmate, J.S., to the medical area of the facility where he was seated in a chair with his hands restrained behind his back with handcuffs. The complaint alleges that J.S. did not comply with the treating nurse’s attempt to review his medical bracelet. The complaint further alleges that as the defendant lifted the inmate’s arm to read the medical bracelet, the inmate pulled his arm away. The complaint alleges that Wheeler then placed his hands around the inmate’s neck, struck the inmate’s head against the wall and pulled the inmate to the floor. The complaint further alleges that the defendant then struck the inmate in the face with his knee. The inmate sustained facial injuries as a result of the incident, which was allegedly captured on a video recording.
According to the complaint, the defendant prepared an incident report regarding the use of force. The complaint further alleges that the defendant was later questioned regarding the incident and claimed to have been physically assaulted by the inmate. The complaint alleges that the defendant’s version of the events is not corroborated by the video footage.
If convicted, Wheeler faces a maximum punishment of 30 years in prison. An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case commends the investigative efforts of the West Palm Beach Resident Agency of the FBI, Ric Bradshaw of the Palm Beach County Sheriff’s Office and State Attorney Dave Aronberg of the Palm Beach County State Attorney’s Office. It is being prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Susan Osborne of the Southern District of Florida.
Palm Beach County Sheriff's Deputy Indicted for Using Excessive Force and Filing False ReportRead the Press Release
A federal grand jury in West Palm Beach, Florida, returned a two-count indictment charging Palm Beach County Sheriff’s Deputy William D. Wheeler, 46, with unlawfully assaulting a man at the Palm Beach County Detention Center on Oct. 9, 2013, and filing a false report on the incident, announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division and Special Agent in Charge George L. Piro of the FBI.
According to the allegations contained in court documents, on or about Oct. 9, 2013, Wheeler was employed as a Palm Beach County Sheriff’s Office Deputy and was assigned to the Corrections Division (PBSO) West Detention Center located in Belle Glade, Florida. As part of his duties, the complaint alleges that Wheeler escorted an inmate, J.S., to the medical area of the facility where he was seated in a chair with his hands restrained behind his back with handcuffs. The complaint alleges that J.S. did not comply with the treating nurse’s attempt to review his medical bracelet. The complaint further alleges that as the defendant lifted the inmate’s arm to read the medical bracelet, the inmate pulled his arm away. The complaint alleges that Wheeler then placed his hands around the inmate’s neck, struck the inmate’s head against the wall and pulled the inmate to the floor. The complaint further alleges that the defendant then struck the inmate in the face with his knee. The inmate sustained facial injuries as a result of the incident, which was allegedly captured on a video recording.
According to the complaint, the defendant prepared an incident report regarding the use of force. The complaint further alleges that the defendant was later questioned regarding the incident and claimed to have been physically assaulted by the inmate. The complaint alleges that the defendant’s version of the events is not corroborated by the video footage.
United States Attorney Wifredo A. Ferrer stated, “Law enforcement officers and public servants are not above the law, but are held to the highest standard. They must protect the civil rights of the individuals they are sworn to protect and monitor. Those individuals who violate our civil liberties and falsify documents to conceal their criminal conduct will be held accountable within the justice system.”
Wheeler is scheduled to be arraigned before U.S. Magistrate Judge James D. Hopkins on April 15, 2015.
If convicted, Wheeler faces a maximum punishment of 30 years in prison.
The Department of Justice commends the investigative efforts of the West Palm Beach Resident Agency of the FBI, Ric Bradshaw of the Palm Beach County Sheriff’s Office and State Attorney Dave Aronberg of the Palm Beach County State Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Susan Rhee Osborne of the Southern District of Florida and Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Attachment: Wheeler, William D. Indictment (PDF)
Owner of Castro Valley Pizzeria Pleads Guilty to Failing to Pay Employment TaxesRead the Press Release
OAKLAND, Calif. – Frank Eugene Gemignani III pleaded guilty to failing to pay over employment taxes today, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
Gemignani, 46, of Concord, operated Pyzano’s Pizzeria in Castro Valley from 1991 through 2012. As the sole proprietor, Gemignani exercised control over Pyzano’s business affairs, including signing and filing Pyzano’s tax returns and paying to the IRS payroll taxes withheld from Pyzano’s employees’ paychecks. According to the plea agreement, Gemignani admitted that from April 1, 2008, through December 31, 2010, he deducted and collected approximately $184,267 in federal income taxes and Federal Insurance Contributions Act taxes (FICA) from Pyzano’s employees’ wages, but then failed to pass these taxes on to the IRS. Additionally, Gemignani failed to pay at least $63,333 of FICA and Federal Unemployment Tax Act taxes Pyzano’s owed for 2009 and 2010. Also, for 2007, Gemignani claimed a credit for amounts withheld from his Pyzano’s paychecks on his U.S. Individual Income Tax Return, Form 1040, even though he knew he had never paid those withholdings over to the IRS.
Gemignani was charged by Indictment on June 19, 2014, with 11 counts of failure to pay over employment taxes and one count of filing a false tax return. Gemignani pleaded guilty to one count failure to pay over employment taxes, in violation of Title 26, U.S.C § 7202. Gemignani’s sentencing hearing is scheduled for September 15, 2015, at 1:00 p.m., before the Honorable Jeffrey S. White, United States District Judge, in Oakland. The maximum statutory penalty for each count of failure to pay over employment taxes, in violation of 26 U.S.C § 7202 is five years in prison, and a fine of $250,000.
Assistant U.S. Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
New York Man Sentenced to 92 Months in Prison for Role in Multimillion-Dollar International Cybercrime SchemeRead the Press Release
Defendant Managed ‘Cash Out’ Crews for Organization that Allegedly Capitalized on Information Hacked From Customers of More Than a Dozen Global Financial Institutions
TRENTON, N.J. – A member of an international cybercrime, identity theft and credit card fraud conspiracy was sentenced today to 92 months in prison for using information hacked from customer accounts held at more than a dozen banks, brokerage firms, payroll processing companies and government agencies in an attempt to steal at least $15 million from American customers, U.S. Attorney Paul J. Fishman announced.
Oleg Pidtergerya, 50, of Brooklyn, New York, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of wire fraud conspiracy and one count of conspiracy to commit access device fraud and identity theft. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
Pidtergerya was asked by leaders of the conspiracy to participate in a scheme to “cash out” bank accounts and pre-paid debit cards opened in the names of others. Oleksiy Sharapka, 34, of Kiev, Ukraine, allegedly directed the conspiracy with the help of Leonid Yanovitsky, 40, also of Kiev. Pidtergerya managed a cash out crew in New York for Sharapka and Yanovitsky.
Conspiring hackers first gained unauthorized access to the bank accounts of customers of more than a dozen global financial institutions and businesses, including: Aon Hewitt; Automatic Data Processing Inc.; Citibank N.A.; E-Trade; Electronic Payments Inc.; Fundtech Holdings LLC, iPayment Inc.; JP Morgan Chase Bank N.A.; Nordstrom Bank; PayPal; TD Ameritrade; U.S. Department of Defense, Defense Finance and Accounting Service; TIAA-CREF; USAA; and Veracity Payment Solutions Inc.
After obtaining unauthorized access to the bank accounts, Sharapka and Yanovitsky diverted money from them to bank accounts and pre-paid debit cards they controlled. They then employed crews of individuals known as “cashers” to withdraw the stolen funds from the fraudulent accounts, among other ways, by making ATM withdrawals and fraudulent purchases in New York, Massachusetts, Georgia and elsewhere. Both Sharapka and Yanovitsky are under indictment in the United States and remain at large.
Pidtergerya admitted he was aware fraudulent accounts and cards were created without the consent of the individuals in whose names they were opened. He admitted coordinating ATM and bank withdrawals of the stolen funds. He also admitted to sending proceeds of the fraud to Sharapka and Yanovitsky in Ukraine.
The government’s ongoing investigation into the organization has so far identified attempts to defraud the victim companies and their customers of more than $15 million.
In addition to the prison term, Judge Sheridan sentenced Pidtergerya to three years of supervised release, ordered him to pay restitution of $1,758,127, and entered a forfeiture judgment of $250,000.
U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli; U.S Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Kevin Kelly; Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Jeffery D. Thorpe, Cyber Field Office; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation leading to today’s sentencing. He also thanked the Department of Homeland Security’s Customs and Border Protection for assistance with the Yarmolitsky arrest.
The government is represented by Economic Crimes Unit Chief Gurbir S. Grewal of the U.S. Attorney’s Office in Newark.
The charges and allegations concerning alleged conspirators are merely allegations and the defendants are presumed innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Mitchell Elman Esq., Port Washington, New York
National Crime Victims’ Rights WeekRead the Press Release
Every April, National Crime Victims’ Rights Week (NCVRW) is held to promote victims’ rights and honor crime victims and those who advocate on their behalf. This year’s NCVRW will be held April 19-25 and the theme, “Engaging Communities. Empowering Victims.” presents the opportunity to highlight the diversity of our communities, expand partnerships to serve victims of crime, enhance efforts to meet victims where they are, and empower crime victims as they pursue justice and recovery.
U.S. Attorney Kevin Techau announced today that his office has partnered with the 6th Judicial Department of Correctional Services, Horizons-A Family Service Alliance, St. Luke’s Child Protection Center, Cedar Rapids Police Department, Deaf Iowans Against Abuse and Linn County Attorney’s Office to host events in the Cedar Rapids area throughout this week. These events encourage community members to be engaged, to empower victims, and to provide an opportunity to honor those impacted by crime.
“Ensuring victims are afforded their statutory rights is a top priority for my office and the Department of Justice,” said U.S. Attorney Techau. “By engaging the entire community, we are able to better serve all victims of crime and provide the necessary support through their journey to healing. This year’s theme emphasizes that we all have a role to play.”
On Sunday, April 19, 2015 the Opening Ceremony to kick off the week will be held at the 6th Judicial Department of Correctional Services, 951 29th Avenue SW, Cedar Rapids starting at 1 p.m. The Jennifer Clinton Award, which recognizes someone who has gone above and beyond the call of duty, will be presented to a deserving Cedar Rapids Police officer. The Clothes Line Project from Deaf Iowans Against Abuse will be on display. This project is a way for those affected by violence to highlight the problem of violence against women by designing a t-shirt depicting the impact of the crime on the victim. The public is invited to attend.
Deaf Iowans Against Abuse will be hosting an informal gathering with the Cedar Rapids Police Department and U.S. Attorney's Office with the deaf and hard of hearing communities. It will be held from 9 a.m. to 11 a.m. on Wednesday, April 22, at the office of Deaf Iowans Against Abuse, 1652 42nd St. NE, Suite D, Cedar Rapids. During this event, the Clothesline Project will also be on display. The public is welcome.
The week’s events will end with a Candlelight Vigil on Friday, April 24 at 7 p.m. The vigil will be held at Horizons-A Family Service Alliance, 819 5th St SE. The public is invited to attend.
NCVRW honors and celebrates the achievements of the past thirty years in securing rights, protections, and services for victims. The bipartisan Victims of Crime Act (VOCA), passed by Congress in 1984, created a national fund to ease victims’ suffering. Financed by fines and penalties paid by offenders, the Crime Victims Fund supports victim assistance and services, such as rape crisis and domestic violence programs and victim compensation programs that pay victims’ out-of-pocket expenses such as counseling, funeral expenses, and lost wages. VOCA has also pioneered support efforts for victims of once-hidden crimes such as domestic and sexual violence. Outreach is increasingly focused on previously underserved victim populations, including victims of color, religious and ethnic minorities, LGBTQ victims, and immigrant populations to name a few. Efforts are being made to ensure that all victims, regardless of their background or the crime committed against them, receive the support they deserve.
For additional information about the 2015 National Crime Victims’ Rights Week and how to assist victims in your community, please contact the U.S. Attorney’s Office, Northern District of Iowa at 319-363-6333 or visit www.justice.gov/usao-ndia. For additional ideas on how to support victims of crime, visit the Office for Victims of Crime website, www.ovc.gov.
Follow us on Twitter @USAO_NDIA.
National Crime Victims' Rights Week Event Set for April 19Read the Press Release
CHARLOTTESVILLE, VIRGINIA – The Jefferson Area Victim Assistance Coalition will host a Community Day this Sunday, April 19 from 1 to 4 p.m. at the Ntelos Wireless Pavilion on the downtown mall in Charlottesville to commemorate National Crime Victims’ Rights Week (April 19-15).
The Community Day, which is free and open to the public, has been planned as a family-friendly event with demonstrations and information available from dozens of local agencies. There will be plenty for kids to see and do, including police motorcycles, fire trucks, police cars, and demonstrations by local K9 Officers and therapy dogs. Many of the local agencies will have plenty of giveaways for the kids, bags, cups, bike helmets, Frisbees, key chains and more.
In addition, there will information available for parents, including DNA and fingerprinting kits available, anti-bullying information, tips on home safeguarding, self-defense and how to avoid falling victim to a scam.
The Jefferson Area Victim Assistance Coalition consists of members form the Albemarle Co. Victim/Witness Program, Charlottesville Victim/Witness Program, Fluvanna County Victim/Witness Program, Greene County Victim/Witness Program, Homeland Security Victim/Witness Program, Louisa County Victim/Witness Program, Sexual Assault Resource Agency, University of Virginia Victim/Witness Program and the United States Attorney’s Office Victim/Witness Program.
Local Agencies participating in Sunday’s event include: Louisa Co. Sheriff’s Office, Albemarle Co. PD, Virginia State Police, Charlottesville Fire Department, Charlottesville PD, Jefferson Area Board for Aging, Legal Aid, Shelter for Help in Emergency, Sexual Assault Resource Agency, Jefferson Area Victim Witness Coalition, Offender Aid and Restoration, Foothills Child Advocacy Center, Readykids, Help Save the Next Girl, Fluvanna County Sheriff’s Office, Albemarle Co. Sheriff’s Office, Homeland Security, Women’s Initiative and the United States Attorney’s Office.
Monroe woman sentenced to 24 months in prison for stealing more than $200,000 in Social Security paymentsRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Monroe woman was sentenced Monday to 24 months in prison for stealing more than $200,000 in Social Security benefit payments.
Cassandra D. Ellis, 53, of Monroe, was sentenced by U.S. District Judge Robert G. James on one count of theft of government funds. She was also sentenced to three years of supervised release and ordered to pay $206,325 restitution. According to evidence presented at the January 21, 2015 guilty plea, from February 1996 to April 2014, Ellis deposited and used her deceased grandmother’s Social Security benefit checks, to which she was not entitled. She also led Social Security officials to believe her grandmother was alive in order to continue receiving the checks. The total amount taken was $206,325.
The Social Security Administration, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Seth D. Reeg prosecuted the case.
Men Sentenced for Food Stamp FraudRead the Press Release
ALBANY, NEW YORK – FAISAL Q. MORSHED, 35, of Verplanck, New York, and IBRAHIM Q. MURSHED, 25, of Hudson, New York, were sentenced yesterday for conspiring to commit Supplemental Nutrition Assistance Program ("SNAP") fraud, and SNAP fraud, by Senior United States District Judge Thomas J. McAvoy, announced United States Attorney Richard S. Hartunian, Columbia County Sheriff David Bartlett, U.S. Department of Agriculture, Office of the Inspector General, Northeast Region Special Agent in Charge William G. Squires, Jr., and U.S. Department of Homeland Security, Homeland Security Investigations Assistant Special Agent in Charge Nicholas DiNicola.
FAISAL MORSHED was sentenced to 18 months in prison and three years of supervised release. The court ordered that he pay $247,736 restitution to the U.S. Department of Agriculture ("USDA").
IBRAHIM MURSHED was sentenced to five years of probation. The court ordered that he pay $26,134 restitution to USDA.
As part of their December 3, 2014, guilty pleas, MORSHED and MURSHED admitted that, while working at D&D Deli & Grocery, in Hudson, New York, they conspired to exchange SNAP beneficiaries’ food stamps for cash.
SNAP, formerly known as the Food Stamp Program, uses tax dollars to subsidize food purchases by eligible low-income households. SNAP benefits may only be used to purchase food in approved retail food stores, and may not be exchanged for cash.
A jury convicted coconspirators MOFADDAL M. MURSHED and AHMED A. ALGAHAIM of conspiracy to commit SNAP fraud and SNAP fraud on December 16, 2014. They are scheduled to be sentenced on June 8, 2015, in Albany.
The case was investigated by the Columbia County Sheriff’s Office, the U.S. Department of Agriculture, Office of Inspector General, the U.S. Secret Service, and the Department of Homeland Security, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Married Lawyer and Doctor Plead Guilty in Manhattan Federal Court to Obstructing IRS Audit to Hide False Deductions and Expenses Claimed on Tax ReturnsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Shantelle P. Kitchen, the Special Agent-in-Charge of the New York Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that JEFFREY S. STEIN and MARLA STEIN, who are husband and wife, pled guilty today to obstructing the IRS by, among other things, providing to an IRS auditor phony documents designed to support false deductions both claimed on their joint tax returns for the years 2009-2012. JEFFREY S. STEIN also pled guilty to tax evasion charges for the years 2009-2012. JEFFREY S. STEIN, a vascular surgeon, and MARLA STEIN, a New York personal injury lawyer, entered their guilty pleas before U.S. District Judge Denise L. Cote.
Manhattan U.S. Attorney Preet Bharara said: “As they admitted today, Jeffrey Stein and Marla Stein not only cheated the IRS by claiming hundreds of thousands of dollars of false deductions on their tax returns, they doubled down on their fraud by using the identities of others to create false documents in an attempt to snooker the IRS again – this time during an audit. Lawyers, doctors, and indeed all taxpayers have an obligation not only to report their income and expenses truthfully, but also to deal in an honest and forthright manner with the IRS when it conducts an audit. Those who seek to mislead and defraud the IRS do so at their peril.”
IRS Special Agent-in-Charge Shantelle P. Kitchen said: “It is inexcusable when financially successful individuals, with the resources to meet their tax obligations, defraud the tax system. By doing so, they increase the burden on law abiding American taxpayers, effectively forcing them to make up the difference. As we approach the April 15th tax deadline, this investigation serves as a timely warning to those who contemplate filing fraudulent tax returns through falsifying their expenses. It also reinforces the message that falsifying books and records “after the fact,” in preparation for a tax audit, is also a criminal offense and will be dealt with accordingly. IRS-Criminal Investigation remains committed to protecting the American tax system and ensuring that everyone pays their fair share.”
According to the Information filed today in Manhattan federal court:
JEFFREY S. STEIN was a vascular surgeon who, between 2009 and 2012, conducted business principally through his own Manhattan and Long Island-based medical practice, “Jeffrey Stein, M.D.” Between 2008 and 2011, JEFFREY S. STEIN was also affiliated with and earned income from certain medical groups, including one based in Brooklyn that had contracts with the United States Department of Veterans Affairs (“V.A.”).
MARLA STEIN was an attorney who, between 2009 and 2012, performed legal services largely as an independent contractor to certain Manhattan-based personal injury law firms.
Both JEFFREY S. STEIN and MARLA STEIN reported the profits from their medical and law practices, respectively, on separate Schedules C (Profit or Loss From Business) attached to the joint U.S. Individual Income Tax Returns, Forms 1040, that they filed for the tax years 2009-2012.
Filing of False Tax Returns
In connection with the preparation of their Forms 1040 for the tax years 2009-2012, JEFFREY S. STEIN and MARLA STEIN provided false and fictitious information to their accountant in order to fraudulently reduce the amount of taxes they would have to pay to the IRS. In particular, JEFFREY S. STEIN provided the accountant with (a) wholly fictitious Schedule C expenses purportedly incurred by his medical practice, such as contract labor expenses and transcription services that were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by his medical practice, including travel and auto expenses, deductible meals and entertainment, and the amounts of wages paid to employees of his medical practice. In addition, MARLA STEIN provided this accountant with (a) wholly fictitious Schedule C contract labor and advertising expenses purportedly incurred by her law practice but which were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by her law practice, including those for office supplies and deductible meals and expenses.
In addition to the foregoing, for the tax years 2007-2013, JEFFREY S. STEIN and MARLA STEIN failed to inform their accountant that they employed and paid approximately $15,000 annually in cash wages to a household employee (“the Domestic Employee”) who performed certain cleaning and childcare services in their Upper East Side home.
As a result of the falsely inflated and wholly fictitious information provided by JEFFREY S. STEIN and MARLA STEIN to their accountant in connection with the preparation of their Forms 1040 for the 2009-2012 tax years, the accountant prepared tax returns for JEFFREY S. STEIN and MARLA STEIN that falsely and fraudulently understated their business income and, consequently, the amount of taxes due and owing to the IRS. In addition, as a result of the failure of JEFFREY S. STEIN and MARLA STEIN to inform their accountant of the cash wages paid to their Domestic Employee for the 2007-2013 tax years, JEFFREY S. STEIN and MARLA STEIN failed to pay to the IRS various employment taxes due and owing to the IRS, and also aided the Domestic Employee in avoiding detection by the IRS of the employee’s failure to report her cash wages to the IRS for the tax years 2007-2013.
Obstruction of the IRS Audit
In February 2013, the IRS notified JEFFREY S. STEIN and MARLA STEIN, the defendants, that their tax returns for the 2010 and 2011 tax years had been selected for audit, specifically with respect to their respective Schedule C expenses. In response to requests by the IRS auditor for documents supporting their claimed deductions and expenses, JEFFREY S. STEIN and MARLA STEIN created and provided to their accountant – whom they retained to represent them during the audit – various fabricated and fictitious documents and information as part of a corrupt effort to convince the IRS auditor that the expenses claimed on their respective Schedules C were legitimate.
Among the fabricated and fictitious documents created by JEFFREY S. STEIN and MARLA STEIN and provided to their accountant, in order to pass on to the IRS auditor, were the following:
(a) Using the names of four disabled military veterans (including two former patients) whose identities JEFFREY S. STEIN obtained as a result of his work for the V.A., JEFFREY S. STEIN created bogus invoices in the names of those veterans (“the Bogus Invoices”). The Bogus Invoices falsely recited that the individuals whose names were contained on the invoices had performed during 2010 and 2011, and been paid by JEFFREY S. STEIN for, various medical services rendered to JEFFREY S. STEIN’s medical practice, such as “ultrasound technologist” and “vascular technologist” services. In truth and fact, none of the individuals whose names were placed on the Bogus Invoices provided any of the services recited in the fabricated invoices, which totaled $126,525. One of the veterans whose name was placed on a Bogus Invoice by JEFFREY S. STEIN was not even alive in 2011 – a year for which JEFFREY S. STEIN created a Bogus Invoice for that individual.
(b) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a Long Island hospital (“the Hospital”) reflecting payments sought by the Hospital for “surgical physician assistant cost sharing,” which invoices JEFFREY S. STEIN claimed were paid by his medical practice. In truth and fact, the services reflected in the Hospital invoices were never provided to JEFFREY S. STEIN and never paid by his medical practice as expenses.
(c) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a company that provided transcription services. In truth and fact, the transcription company identified by JEFFREY S. STEIN never provided any transcription services to JEFFREY S. STEIN’s medical practice.
(d) MARLA STEIN created certain documentation indicating that two individuals, whose names and purported tax identification numbers were included thereon, had provided certain services to MARLA STEIN’s law practice and had been paid fee income by MARLA STEIN as a result. In truth and fact, neither of those individuals had provided services to MARLA STEIN’s law practice. Instead, the individuals whose identities were used were those of the Domestic Employee and a medical professional who had performed services for a member of MARLA STEIN’s family.
(e) Using genuine invoices previously provided to MARLA STEIN by photographers and a videographer who had performed services in connection with religious celebrations for members of MARLA STEIN’s family, MARLA STEIN used the names of the photographers and videographer but fraudulently altered the real invoices to make them appear as if the services reflected in the invoices had been provided to MARLA STEIN’s law practice.
JEFFREY S. STEIN, 58, of New York, New York, faces a maximum sentence of eight years in prison, based on the tax evasion and IRS obstruction charges to which he pled guilty. MARLA STEIN, 52, also of Manhattan, faces three years in prison as a result of the IRS obstruction charge to which she pled guilty. Both defendants are scheduled to be sentenced by U.S. District Judge Denise L. Cote on July 28, 2015, at 10:00 a.m. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding efforts of IRS-CI in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Stanley J. Okula, Jr. is in charge of the prosecution.
Manager of Large-Scale Counterfeit Credit Card Scheme Sentenced to 90 Months in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that LUIS GUSTAVO TAVAREZ was sentenced to 90 months in prison for his role in a large-scale counterfeit credit card scheme involving credit card numbers stolen from nearly 200 victims and over $600,000 in losses. TAVAREZ pled guilty on August 28, 2014, to conspiracy to commit access device fraud. TAVAREZ was sentenced by U.S. District Judge Richard J. Sullivan.
Manhattan U.S. Attorney Preet Bharara said: “In what is becoming an increasingly common fraud, Tavarez bought stolen credit card information from hackers and used it to fuel his own greed. I would like to thank the United States Secret Service for their investigative work on the case.”
According to the allegations in the Criminal Complaint, Information, plea allocution, and other court documents:
From April 2013 through April 2014, LUIS GUSTAVO TAVAREZ was one of the managers of an extensive counterfeit credit card fraud scheme operating in half a dozen states along the East Coast in 2013 and 2014. As part of the scheme, TAVAREZ purchased stolen credit card information from computer hackers who remotely compromised databases containing credit card numbers, both directly and from “carding” websites where stolen credit card numbers are sold. TAVAREZ then produced counterfeit credit cards that were encoded with the stolen account information. He personally used those counterfeit cards to make unauthorized purchases of store gift cards and retail items, and also provided them to co-conspirators who acted as “shoppers” at his direction. In total, TAVAREZ and his co-conspirators, including Deivi Martinez-Brito, Anthony Reynoso, Plinio Pineda Lopez, Vicente D. Espinal, and Warner Alvarez Almanzar, used counterfeit cards to make hundreds of purchases of store gift cards and merchandise at national retail chains in New York, New Jersey, Pennsylvania, Connecticut, Rhode Island, and Massachusetts. The gift cards and retail items were then sold to others or returned to the stores for cash refunds.
As part of the scheme, TAVAREZ and his co-conspirators obtained stolen account information from almost 200 victims and used that stolen information to make more than $625,000 in unauthorized purchases.
Two days after pleading guilty on August 28, 2014, TAVAREZ fled and became a fugitive from justice. He was apprehended by the United States Marshals Service on September 16, 2014, at a bus station in Indianapolis, Indiana, and returned for sentencing.
TAVAREZ, 34, of Bronx, New York, was also sentenced to three years’ supervised release, restitution and forfeiture judgments in the amount of $627,441.96, and was ordered to pay a $100 special assessment.
Pineda Lopez, 24, of Bronx, New York, pled guilty and was sentenced on January 12, 2015, to six months in prison and six months’ home confinement by U.S. District Judge Alison J. Nathan. Reynoso, 25, of Bronx, New York, pled guilty and was sentenced on January 29, 2015, to six months in prison and six months’ home confinement by U.S. District Judge Richard M. Berman. Martinez-Brito, 25, of New York, New York, pled guilty before U.S. District Judge Gregory H. Woods, and is scheduled for sentencing on June 2, 2015. Alvarez Almanzar, 21, of New York, New York, pled guilty before Judge Richard J. Sullivan and is scheduled for sentencing on April 17, 2015. The prosecution of Espinal, 25, of Bronx, New York, is ongoing.
Mr. Bharara praised the outstanding investigative work of the United States Secret Service. He also thanked the Office of Homeland Security Investigations for their assistance with this case, and the United States Marshals Service for their successful apprehension of TAVAREZ after he fled.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Alexander Wilson is in charge of the prosecution.
The charges contained in the Criminal Complaint and Information are merely accusations and the defendant whose prosecution is ongoing is presumed innocent unless and until proven guilty.
Man Sentenced to 30 Months in Federal Prison for Possessing over 50,000 Images of Child PornographyRead the Press Release
CHICAGO — A man formerly of Lafayette, Indiana and now in federal custody was sentenced yesterday to 30 months in federal prison for amassing a large collection of child pornography over multiple years. The defendant, THOMAS MANNING, 54, pleaded guilty last July to possessing child pornography, admitting that he had collected more than 50,000 illicit images and videos.
Manning was also ordered to pay a total of $9,750 in restitution to five identified victims who submitted restitution requests to the Court, as well as a $12,500 fine. He was placed on supervised release for five years following his prison term by U.S. District Chief Judge Sharon Johnson Coleman. There was also an order of forfeiture granted, and the defendant will forfeit certain computer equipment used in commission of the crime. Manning must serve at least 85 percent of his sentence before he is eligible for release. There is no parole in the federal prison system.
Manning was an employee of the Environmental Protection Agency, who worked as an Information Technology Specialist and maintained and oversaw EPA’s loaner pool of computers that were shared among EPA employees for official use. According to court documents, in 2012, the defendant used one of the laptops at EPA to search for and view child pornography. The defendant tried to erase his activity, using software designed for that purpose, and then returned the laptop to EPA. In July 2012, another EPA employee was in the process of reassigning the laptop to a new user, when the employee discovered evidence suggesting use of the laptop to view child pornography. The employee informed his supervisor, and the matter was referred to EPA’s Office of the Inspector General. After further investigation, agents learned that Manning also possessed tens of thousands of images of child pornography on a personal hard drive that he stored in a locked drawer in his EPA office.
“Both the number of images defendant collected and the types of images defendant collected distinguish him as someone who had much more than a passing interest in seeing small children being hurt, humiliated, and exploited,” Assistant U.S. Attorney Julie Porter wrote in a sentencing memo.
The federal investigation was conducted by the Environmental Protection Agency, Office of Inspector General (EPA OIG).
“The OIG will continue to work with the U.S. Attorney’s Office to investigate EPA employees engaging in this type of criminal activity,” said Christopher Gaffney, Special Agent in Charge, Environmental Protection Agency, Office of Inspector General.
The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Christopher Gaffney, Special Agent in Charge, Environmental Protection Agency, Office of Inspector General.
The government was represented by Assistant U.S. Attorney Julie Porter.
Local Company Dumps Hazardous Wastes Containing Nickel and Zinc into SewersRead the Press Release
Southern California Plating Company (“SoCal Plating”), a local metal finishing company located in Logan Heights, and its owner, Paul Hummell, admitted illegally storing hazardous waste and unlawfully discharging the waste into the sewer system. In pleading guilty, SoCal Plating acknowledged that it illegally discharged industrial wastewaters in excess of its permit limits into the City of San Diego sewer system.
As detailed in Court, the firm’s permit required compliance with Federal pretreatment standards for metal finishers, which limits the daily maximum concentration of nickel to 3.98 mg/L and the daily maximum concentration of zinc to 2.61 mg/L. However, SoCal Plating admitted that on July 8, 2013 and October 8, 2013, its employees discharged industrial wastewater to the sewer system which contained zinc and nickel in excess of these limits.
Company owner Paul Hummell admitted that the firm’s metal finishing operations generated a number of wastewater streams, including spent corrosive cleaning and process baths, and rinse waters which were corrosive and contaminated with toxic heavy metals.
On January 28, 2014, an inspection by the San Diego Department of Environmental Health Services (“DEH”) at SoCal Plating revealed drums of wastewater which had been stored at the site for over 90 days. The drums were sampled and found to contain chromium in toxic concentrations rendering it federally regulated hazardous waste. Hummell admitted that he knew that the industrial wastewater stored at the facility was hazardous waste and that no permit existed to store hazardous waste at the SoCal Plating site.
In pleading guilty, SoCal Plating agreed to pay restitution of $8,266 to DEH and $28,130 to the City of San Diego Industrial Waste Control Program for costs associated with monitoring the firm’s discharge and disposal of its wastewaters. Wastewater containing heavy metals such as those generated by metal finishers is required to be treated prior to discharge to the sewer system in order to avoid compromising the treatment works and/or pass through to the receiving waters. Heavy metals in high concentrations can damage the digesters at the sewage treatment plants, causing them to operate less efficiently.
"EPA is committed to achieve environmental justice for American communities overburdened from the illegal discharge of industrial materials," said Jay M. Green, Special Agent in Charge for EPA’s criminal enforcement program in California. The defendants’ manner of doing business is not only dangerous, it is criminal. By refusing to comply with the law, the defendants put the unsuspecting public at serious risk"
San Diego FBI Special Agent In Charge Eric S. Birnbaum commented “The metal plating industry requires strict adherence to environmental laws due to the toxic chemicals it uses and the danger these chemicals present to our community. Today's conviction holds the defendant accountable for his actions, and is a step in the right direction to address, a public health threat to the citizens of San Diego, and of Logan Heights in particular. The FBI will continue to work with our public and private sector partners in our ongoing efforts to safeguard the health of our citizens and prevent the ongoing degradation of our natural resources through criminal prosecution."
Sentencing for SoCal Plating and Hummell is set for August 3, 2015, at 9:00 a.m. before the Honorable Marilyn L. Huff, United States District Judge.
DEFENDANT Case Number: 15cr0947-H Paul Charles Hummell, Jr. Age: 71 San Diego, California CHARGESCount 1: Illegal Storage of Hazardous Waste, in violation of 42 U.S.C. § 6928(d)(2)(A)
Maximum Penalties: 5 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution
DEFENDANT Case Number: 15cr0946-H Southern California Plating Company Incorporated: 1983 San Diego, California CHARGESCount 1: Illegal Discharge of Pollutants, in violation of 33 U.S.C. § 1317(d) and 1319©(2)(A)
Maximum Penalties: 5 years’ probation, $500,000 fine or twice the pecuniary gain or loss resulting from the offense and a minimum fine of $5,000 per day of violation, $400 special assessment, restitution INVESTIGATING AGENCIESU.S. Environmental Protection Agency, Criminal Investigations Division
Federal Bureau of InvestigationLee's Summit Soccer Coach Sentenced to 30 Years for Secret Videos of 11 Child VictimsRead the Press Release
KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Lee’s Summit, Mo., youth soccer coach was sentenced in federal court today to attempting to produce child pornography by secretly videotaping members of his soccer team.
Joel D. White, 41, of Lee’s Summit, was sentenced by U.S. District Judge Dean Whipple to 30 years in federal prison without parole. White pleaded guilty on July 30, 2014, to three counts of attempting to produce child pornography.
White coached a girls under-12 soccer team and a girls under-15 soccer team through the Lee’s Summit Soccer Association. The Lee’s Summit Soccer Association has cooperated fully with law enforcement officers during this investigation. White also owned his own business, Adida Entertainment, which provided DJ and photography services for weddings, parties, dances, and reunions at both public and private events.
White admitted that he videotaped 11 child victims without their consent while they were changing clothes in his daughter’s bedroom at his residence. White videotaped the child victims 10 to 15 times without their consent from approximately May 2012 until October 2012, when the victims were between 11 and 12 years of age. White also admitted that he touched one of the child victims on the breast with his hand and mouth while she was sleeping next to his own minor relative at his residence, and that he recorded this touching.
White is clearly identified in the videos setting up the camera and recovering the camera after the child victims leave the room. In one video, as White recovers the camera, he looks into the camera and gives himself two “thumbs up.”
Under Department of Justice guidelines, the attempted production of child pornography is ordinarily charged in cases that involve surreptitious recordings. The statutory penalties for producing child pornography are the same as the penalties for attempting to produce child pornography.
The investigation began when White was arrested for stealing in Commerce City, Colo. In March 2013 the soccer stadium in Commerce City was hosting a world cup qualifying game. Colorado authorities contacted White at the stadium when he was accused of stealing soccer-related items and merchandise from the stadium. Officers searched White as well as his backpack, camera, vehicle and hotel room. Officers located stolen items in White’s possession and in his hotel room and White was arrested for felony stealing. White’s cameras, computer and computer media were recovered during the course of the stealing investigation.
Detectives wanted to investigate the possibility that White was placing advertisements on sites such as “Craigslist” to sell the stolen items. They began reviewing the cameras and computer media and observed a video of a minor female changing clothes in what appeared to be White’s residence. Commerce City police officials then contacted the Lee’s Summit, Mo., Police Department to take the lead on the child pornography investigation.
This case was prosecuted by Assistant U.S. Attorney Teresa A. Moore. It was investigated by the Lee’s Summit, Mo., Police Department and the Commerce City, Colo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Las Vegas Man Pleads Guilty to Shipping Packages of Controlled Substances from Las Vegas to Tennessee and TexasRead the Press Release
LAS VEGAS, Nev. – A Las Vegas man pleaded guilty today to shipping illegal drugs, including codeine and marijuana, from Nevada to other states, and using a false identity and structured bank deposits to hide over $850,000 in proceeds that he received from the drug trafficking activities, announced U.S. Attorney Daniel G. Bogden, for the District of Nevada.
Damien Williams, 26, pleaded guilty before Senior U.S. District Judge Howard D. McKibben to one count of conspiracy to distribute a controlled substance, one count of conspiracy to launder money, and one count of aggravated identity theft, and is scheduled to be sentenced on July 22, 2015. Williams faces a maximum of 20 years in prison on the drug and money laundering counts, two consecutive years in prison on the aggravated identity theft count, and fines of up to $1 million.
“We work with our local and federal law enforcement partners to identify and prosecute persons who are unlawfully using the mails to ship controlled substances to other states,” said U.S. Attorney Bogden. “As this case shows, using a false identity and structuring your bank deposits is not going to go unnoticed by our investigators.”
According to the guilty plea agreement, between May 2012 and October 2013, Williams used the identification documents of “Goldie Cage” to obtain a Nevada identification card, rent an apartment, obtain an automobile loan, and open bank accounts Cage’s name. During the same period, Williams was sending packages of controlled substances, including codeine and marijuana, to persons in Tennessee and Texas. In exchange for the controlled substances, Williams received approximately $856,000 in proceeds, which were deposited by persons in other states into the bank accounts that Williams had opened under Cage’s name. Williams would then withdraw the funds and use them in furtherance of additional illegal drug activities. The deposits and withdrawals were structured in amounts of less than $10,000 in order to avoid federal bank reporting requirements.
This case was investigated by IRS Criminal Investigation, U.S. Postal Inspection Service, and Henderson Police Department.
Justice Department Asks Federal Court to Shut Down Fraudulent Tax Return Business Operated by Retired Chicago Fire Department CaptainRead the Press Release
The United States has filed a complaint seeking to bar a retired Chicago firefighter from preparing federal tax returns for others, the Justice Department announced today.
The civil complaint against Irving Brown Sr., which was filed in the U.S. District Court for the Northern District of Illinois, alleges that Brown has prepared federal income tax returns for firefighters and other Chicago-area taxpayers which understate the customers’ correct tax liabilities in order to minimize the taxes they owe and maximize tax refunds. The suit alleges that Brown operates Irving Brown Sr. Tax Services out of his Chicago home.
The government alleges that Brown obtains inflated tax refunds for his customers through the use of fraudulent earned income tax credits, false charitable deductions and fake business expenses on a Schedule C (Profit or Loss From Business). The suit alleges that the customers own no business or, if they do, the business-related expenses are false. The Internal Revenue Service (IRS) interviewed several of Brown’s customers, who stated that the improper deductions, credits and Schedule C business expenses and income were false and not based on information they provided to Brown, according to the suit.
According to the complaint, Brown also frequently prepares returns claiming head of household filing status for customers who are ineligible for that status. For other customers, the complaint alleges that Brown created false Schedule E (Supplemental Income and Loss) expenses from fictitious rental real estate to create tax deductions. Among other things, a Schedule E is used to report income or loss from rental real estate property. The complaint alleges that, in some instances, Brown prepared false invoices and receipts in order to substantiate the false expenses for customers who were being examined by the IRS.
The lawsuit states that the IRS estimates Brown has prepared more than 2,000 tax returns since 2011. The IRS has completed examinations of 94 of those returns, and the total tax deficiency for those returns alone exceeds $740,000, according to the complaint. Based on the number of returns the defendant prepared, the complaint alleges that Brown’s actions could have cost the U.S. Treasury more than $1 million.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Indictment and Historic Drug Seizure in Operation ArmageddonRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today the unsealing of a federal grand jury indictment and a historic drug seizure in connection with Operation Armageddon, an extensive investigation aimed at a drug trafficking network operating in Louisiana and California.
As part of the operation, agents executed federal search warrants which resulted in the seizure of over nine (9) kilograms of high-grade methamphetamine with a potential retail value of over a million dollars, eight (8) pounds of marijuana, and numerous weapons, including an AR/15 assault rifle. The methamphetamine seizure is the largest in the history of the East Baton Rouge Parish Sheriff’s Office, which was one of the participating agencies.
The operation has also resulted in a federal grand jury indictment against the nine (9) individuals listed below. The indictment charges significant drug trafficking, money laundering, and firearms offenses. If convicted, these defendants face significant terms of imprisonment, fines, and the forfeiture of proceeds from the illegal activity.
- Oscar Machado-Galeana, age 32, of Baton Rouge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; conspiracy to launder monetary instruments; distribution of five grams or more of methamphetamine; four counts of distribution of fifty grams or more of methamphetamine; distribution of heroin; distribution of marijuana; possession of a firearm in furtherance of a drug trafficking crime; and forfeiture.
- Alexander P. Nava, age 45, of Baton Rouge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; conspiracy to launder monetary instruments; distribution of five grams or more of methamphetamine; four counts of distribution of fifty grams or more of methamphetamine; distribution of heroin; distribution of marijuana; possession of a firearm in furtherance of a drug trafficking crime; and forfeiture.
- Lori Lee Landry, age 39, of Baton Rouge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; and forfeiture
- Devin Joel Martin, age 25, of Baton Rouge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; and forfeiture.
- Gregory John Landry, age 39, of Baton Rouge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; and forfeiture
- Victor Hugo Sandoval-Quinonez, age 36, of Breaux Bridge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; and forfeiture.
- Roy Martin Herrera Romero, age 38, of Baton Rouge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; distribution of marijuana; and forfeiture.
- Mervin Ronald Spencer, age 24, of Baton Rouge, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; and forfeiture.
- Marco Antonio Lopez-Sandoval, age 20, of California, is charged with conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin and marijuana; conspiracy to launder monetary instruments; and forfeiture.
U.S. Attorney Green stated: “We will continue to meet the threat posed by drug trafficking organizations by working tirelessly with our excellent federal, state, and local partners to aggressively pursue drug dealers. I greatly appreciate the great work of the agents and prosecutors in this important investigation.”
Joseph Shepard, the Assistant Special Agent-in-Charge of the New Orleans Division of the U.S. Drug Enforcement Administration, stated: “Throughout this investigation, DEA and our other federal, state and local counterparts have demonstrated remarkable resilience and cooperation in combating those seeking to flood the streets of the Baton Rouge area with dangerous drugs. Dangerous drug distribution networks are formidable foes that must be defeated on every front. The men and women of DEA will continue to do our part to take the fight to these drug trafficking organizations.”
East Baton Rouge Parish Sheriff Sid Gautreaux, stated: “We are proud to be part of the combined efforts of all of the participating agencies in the Task Force, and I would like to personally congratulate them on their efforts in this outstanding case. I am extremely proud of my deputies and the contributions that they were able to make on a case of such magnitude. As Sheriff of East Baton Rouge Parish, I pledge to continue to work with our federal, state and local partners to combat illegal narcotics and make our community a safer place to live. This case is a prime example of the results that can be achieved when we have the level of cooperation exhibited by this Task Force. I would like to thank the DEA for facilitating the Task Force and the U.S. Attorney’s Office for the Middle District of Louisiana for their unwavering support of not only this office, but for all law enforcement agencies in our region.”
This operation is being handled by the U.S. Attorney’s Office, the U.S. Drug Enforcement Administration (DEA), the East Baton Rouge Parish Sheriff’s Office, the Internal Revenue Service-Criminal Investigations (IRS-CI), the U.S. Department of Homeland Security, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Baton Rouge City Police Department, the West Baton Rouge Parish Sheriff’s Office, and the Ascension Parish Sheriff’s Office. This matter is being prosecuted by Assistant United States Attorneys Robert W. Piedrahita and Kevin Sanchez.
The investigation is another effort by the Organized Crime Drug Enforcement Task Force (OCDETF) Program which was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. The OCDETF Program operates nationwide and combines the resources and unique expertise of numerous federal, state, and local agencies in a coordinated attack against major drug trafficking and money laundering organizations.
NOTE: An indictment is an accusation by the Grand Jury. The defendants are presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Hobbs Man Sentenced for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Antonio Acosta, 31, of Hobbs, N.M., was sentenced today in federal court in Las Cruces, N.M., to 84 months in federal prison followed by three years of supervised release for his methamphetamine trafficking conviction.
Acosta was arrested on June 20, 2014, on a three-count indictment charging him with possession of methamphetamine with intent to distribute on April 5 and April 27, 2014, and being a felon in possession of a firearm on March 5, 2014. According to the indictment, Acosta committed the three offenses in Lea County, N.M.
On Sept. 16, 2014, Acosta pled guilty to Counts 1 and 2 of the indictment and admitted that he possessed approximately 21.4 grams of methamphetamine on April 5, 2014 and approximately 8.8 grams of methamphetamine on April 27, 2014. He further admitted that he intended to distribute the methamphetamine to others.
This case was investigated by the Roswell office of the FBI, the Las Cruces offices of the DEA and the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lea County Drug Task Force, and the Hobbs Police Department, and was prosecuted by Assistant U.S. Attorneys Terri J. Abernathy and Shaheen P. Torgoley of the U.S. Attorney’s Las Cruces Branch Office.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department, the Tatum Police Department and the Jal Police Department, and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Heroin Distributor Allegedly Connected to the Overdose Death of A Dallas Teenager Is Arrested in Orange County, California, Following High Speed ChaseRead the Press Release
DALLAS — A 36-year-old Dallas man, who is charged in a federal criminal complaint that was unsealed today with a felony drug offense stemming from his role in the March 2014 heroin overdose death of a Dallas teenage girl, Rian Lashley, is in federal custody following a high speed chase through Orange County, California, yesterday. The announcement was made today by John Parker, Acting U.S. Attorney for the Northern District of Texas.
Jimison Coleman, a/k/a “Jaymo,” was arrested by officers with the Buena Park Police Department on the federal complaint filed in the Northern District of Texas on March 4, 2015. The complaint charges Coleman with conspiracy to possess with the intent to distribute heroin. It is expected that the U.S. Marshals Service will transport Coleman to the District within the next few weeks to face the charge.
In a related case, Cierra Allyn Rounds, 27, of Dallas, pleaded guilty on March 24, 2014, to the same offense stemming from her role in Ms. Ashley’s overdose death. She remains in custody pending sentencing set for September 8, 2015.
Rounds, and her two co-defendants, Glen William Brunton, 28, and Kathryn Grace Dirks, 25, were each charged in a three-count indictment, returned by a federal grand jury in Dallas in September 2014, with one count of conspiracy to possess with intent to distribute a controlled substance (heroin); one count of possession of a controlled substance with intent to distribute, the use of said substance resulting in the death and serious bodily injury of Rian Lashley; and one count of distribution of a controlled substance (heroin), the use of said substance resulting in the death and serious bodily injury of Rian Lashley.
Brunton has filed plea papers indicating his intention to plead guilty. That plea is set for May 5, 2015, before U.S. District Judge Sam A. Lindsay. Dirks remains a fugitive.
According to plea documents filed in Rounds’ case and the criminal complaint charging Coleman, during the early morning hours of March 25, 2014, Rounds and Brunton traveled from a residence in Dallas to an IHOP restaurant in Plano, Texas. After arriving at the restaurant, Rounds and Brunton joined Dirks, Coleman (a local heroin distributor who was involved with Dirks) and Lashley at a booth, and the group ate breakfast together. While sitting in the booth, Rounds and the others became aware that Lashley possessed a large sum of money, approximately $3,000, a cell phone and an iPad.
Rounds admitted that later that morning, in the IHOP parking lot, Coleman delivered five baggies of “China White” heroin to Brunton and that Brunton subsequently distributed the heroin to Lashley in exchange for $100 cash. Rounds and the others learned through conversations with Lashley that she had never used heroin prior to that day. After acquiring the heroin, Rounds, Dirks and Lashley left the IHOP in Lashley’s vehicle, and they traveled to a residence in Dallas where Rounds was living. Coleman and Brunton departed the IHOP in a separate vehicle.
While traveling to the Dallas residence, Rounds used Lashley's cell phone to send a series of text messages to Coleman, including their proximity to the residence and a text message advising Coleman that “…I figured ud want me on this money.” Rounds admitted that when she sent this message to Coleman she was notifying him that she understood that she was to attempt to steal the money Lashley possessed and turn it over to him. As Rounds and the others arrived at the Dallas residence, Rounds sent another text message to Coleman asking if she should take Lashley and Dirks inside. Coleman responded with a text message that read, “Don’t leave don’t let them leave.” Rounds understood the message to mean to take Lashley into the residence and to keep her there.
Once inside the residence, Rounds and Dirks, aided and abetted by each other, and at Lashley’s request, took possession of the heroin that was originally supplied by Coleman and used a syringe to inject heroin into Lashley three times. Shortly before those heroin injections were administered, Rounds sent a text message to Coleman stating “…ima bout to shoot her up for her first time.” Rounds admitted that she hoped the heroin injection would incapacitate Lashley in such a way to allow Rounds to steal the money that Lashley possessed.
According to the affidavit in Coleman’s case, Dirks turned over a portion or all of Lashley’s money to Coleman later that evening at a hotel in Dallas.
Rounds admitted that later that afternoon, Lashley began showing signs of distress, and she and Dirks placed Lashley in a bathtub of ice water in an attempt to reverse the effects of the heroin. After Lashley was removed from the tub, Lashley was placed on a couch and appeared to go to sleep.
Lashley died later that evening as a direct result of the heroin that was administered to her. An autopsy performed at the Southwestern Institute of Forensic Sciences on March 26, 2014, concluded that Lashley died as a result of the toxic effects of heroin.
A federal complaint is a written statement of the essential facts of the offense charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment. The penalty for the charged offense is not more than 20 years in federal prison and a $1 million fine.
The Dallas Police Department, the FBI, the U.S. Marshals Service and the Buena Park Police Department are investigating. Deputy Criminal Chief Assistant U.S. Attorney Rick Calvert and Assistant U.S. Attorney Phelesa Guy are prosecuting.
Harrison County, WV woman sentenced for selling bath saltsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Nioka Lynn Wriker, 34, of Anmoore, West Virginia, was sentenced to 33 months in prison for selling bath salts, United States Attorney William J. Ihlenfeld, II, announced.
Wriker sold bath salts known as “Power X Energy Soak” in Harrison County. The bath salts contained a controlled substance known as “α-Pyrrolidinovalerophenone” or “α-PVP.”
Wriker pled guilty in November 2014 to one count of “Distribution of Controlled Substance Analogue – Aiding and Abetting,” following an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative.
Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Greensburg Plastic Surgeon Charged with Witness Tampering, Falsifying RecordsRead the Press Release
PITTSBURGH - A resident of Latrobe, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on charges of witness tampering and falsification of records in a federal investigation, United States Attorney David J. Hickton announced today.
The 10-count indictment, returned on March 31, and unsealed yesterday, named Daniel A. Teet, M.D., 68, of Latrobe, Pennsylvania, as the sole defendant.
According to the indictment, Dr. Teet tampered with witnesses, including encouraging two to provide false testimony to a federal grand jury, during an investigation being conducted by the Drug Enforcement Administration into Dr. Teet’s Suboxone/Subutex prescribing practices.
After a hearing before United States Magistrate Judge Maureen Kelly, Judge Kelly set a $50,000 cash bond, ordered home detention enforced by GPS monitoring, that all firearms be removed from his residence, and that he have no contact, direct or indirect, with witnesses in the case. The government had submitted evidence that Dr. Teet made threatening statements regarding the DEA agents investigating the case.
The law provides for a maximum sentence at each count of 20 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 offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephen R. Kaufman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Gainesville, Texas, Couple Sentenced to 27 and 33 Months for Gaming Establishment Employee TheftRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that CHARLES DAVID ROHRER age 37 and NATAYA SHAWN SIZEMORE, age 42, both of Gainesville, Texas, were sentenced in federal court on April 13, 2015.
ROHRER was sentenced to 27 months imprisonment, followed by 3 years of supervised release and SIZEMORE to 33 months imprisonment, followed by 3 years of supervised release for Theft by Officers or Employees of Gaming Establishment on Indian Lands, in violation of Title 18, United States Code, Sections 1168(b) and 2.
The charge arose from an investigation by the Chickasaw Nation Lighthorse Police and the Bureau of Indian Affairs. The defendants were indicted in September, 2014 and pled guilty in November, 2014.
ROHRER was remanded into the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence. SIZEMORE was ordered to report to the Bureau of Prisons on May 15, 2015.
The Indictment alleges that on or about January 11, 2014, in the Eastern District of Oklahoma, defendants herein, aiding and abetting one another, while NATAYA SHAWN SIZEMORE was an employee of the Inn at Winstar, did embezzle and steal in excess of $1,000.00 of moneys belonging to the Inn at Winstar, an Indian gaming establishment operated by the Chickasaw Nation, pursuant to an ordinance or resolution approved by the National Indian Gaming Commission.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearings.
Assistant United States Attorney Dean Burris represented the United States.
Fugitive from Florida Sentenced to 12 Years in Prison for Identity Theft, Possession of Child Pornography and Illegal Possession of Weapons and Destructive DevicesRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced that Joseph Keenan May, 60, was sentenced to 12 years in federal prison for crimes involving identity theft, possession of illegal weapons, and possession of child pornography in a sentencing hearing held in federal court yesterday. United States District Court Judge Sharon L. Gleason also ordered that May be supervised for 15 years after his release.
May, of Eagle River and Houston, Alaska, was indicted in June 2014 for identity theft crimes stemming from his assumption of the name of Michael Camp. In July, he was charged with three new federal offenses, alleging that he unlawfully possessed firearms while a fugitive from justice, unlawfully possessed unregistered explosive devices, and that he lied in an application for a federal firearms license. In November, an additional charge of possession of child pornography was brought. The defendant pled guilty to all eight felony charges.
May was arrested by an FBI tactical team at a home in Eagle River in the early morning hours of Friday, June 20, 2014. He had been wanted for capital sexual battery in Bradenton, Florida, since 1991. May was also the subject of a federal warrant charging unlawful flight to avoid prosecution since 1993.
According to the indictment, May has been living under the identity of a stepbrother, Michael Camp, who died in his teens in the 1970s in Pennsylvania. May is a former deputy sheriff in Manatee County, Florida. The original indictment charged two counts of unlawful use of a social security number, stemming from May’s use of Camp’s name and number to apply for an Alaska driver’s license in 2009 and unemployment benefits in 2013. He was also charged with two counts of aggravated identity theft.
Additional charges were filed in July 2014 and November 2014 based on evidence uncovered during May’s arrest and through search warrants derived from that evidence. The July 2014 additional charges stemmed from May’s possession of eight firearms despite his status as a fugitive; his possession of destructive devices and components to make them, including an exploding arrow and at least nine hand grenades; and his false statement on a 2011 application for a federal firearms license in which he used Camp’s identity and falsely claimed that he was not a fugitive from justice or charged with a felony. In November 2014, May was charged with possession of child pornography based on information found during searches of his computer.
In addition to the illegal firearms and child exploitation evidence, evidence presented to the Court at sentencing revealed that, along with the weapons found at the Houston trailer, agents recovered extensive hate-filled writings authored by May. In these journals, May expressed hatred for Muslims, for the President of the United States, and other groups, and he discussed taking violent actions against those he opposed.
Judge Gleason found clear and convincing evidence that May committed the child pornography offense as a pattern of activity involving the sexual abuse or exploitation of a minor, based on his 1990 admissions to the allegations made in Florida. In imposing sentence, she found that the hate-filled writings were “disturbing” and indicated a “real possibility” that he intended to use the weapons to inflict violence on others. She also described his interest in child pornography as “perverse.”
The judge ordered restitution to the State of Alaska Department of Labor and Workforce Development in the amount of $8684, representing the money he was paid for obtaining unemployment benefits under a false name.
United States Attorney Karen Loeffler commended the investigative team for their dedicated efforts following up the evidence uncovered during May’s arrest to determine the full scope of his illegal activities. Ms. Loeffler also noted the protection of First and Second Amendment rights is an important tenet of American justice. However, the intersection of possession of illegal weapons and hate speech is deeply disturbing. It is something we must all be vigilant in opposing to protect our community.
Ms. Loeffler commends the efforts of the Social Security Administration, Office of the Inspector General; the Federal Bureau of Investigation, Anchorage Division; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives for conducting the investigation that led to the Alaska indictments and arrest. Thanks are also due to the FBI Tampa Division, the United States Attorney’s Office for the Middle District of Florida, the State’s Attorney’s Office in Brandenton, Florida, and the Manatee County, Florida, Sheriff’s Office.
Four Veterinarians Plead Guilty to Conspiracy to Unlawfully Administer Drugs to Race Horses at Penn National Race TrackRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Dr. Kevin Brophy, age 60, Florida, Dr. Fernando Motta, age 44, Lancaster, Pennsylvania, and Dr. Christopher Korte, age 43, Pueblo, Colorado, pleaded guilty today before U.S. Magistrate Judge Susan E. Schwab in Harrisburg. Dr. Renee Nodine, age 52, Annville, pleaded guilty yesterday afternoon.
According to U.S. Attorney Peter Smith, the four defendants were each charged in separate criminal Informations on March 26, 2015, for their involvement in illegally treating thoroughbred race horses on race day at Penn National Race Track in Grantville, Pennsylvania.
Each defendant is charged with allegedly administering drugs to horses within 24 hours of when the horse was entered to race. This conduct was in violation of the state law prohibiting the rigging of publicly exhibited contests and regulations prohibiting the administration of drugs to horses within 24 hours of when they are entered to race. Additionally, because the administering of the drugs was in violation of the state criminal laws, rules and regulations governing thoroughbred racing, they were not dispensed in the course of the defendants’ professional practice.
At the guilty plea proceedings before Magistrate Judge Schwab, Assistant United States Attorney William A. Behe explained that the drugs were not administered to treat the horses but to enhance the horses’ performance in the race or to give it an edge over other horses. According to Behe this constituted misbranding of the prescription animal drugs in violation of federal law. The alleged activity took place at various times beginning as early as 1986 and continuing up to August 2014.
The Informations also allege that the defendants conspired with horse trainers, whose identities are “known to the United States”, to administer the drugs in violation of the laws, rules and regulations governing the conduct of thoroughbred racing.
The guilty pleas this week were pursuant to plea agreements in which the defendants agreed to plead guilty and cooperate with the United States in the continuing investigation. At the guilty plea proceedings Behe informed the court that cooperation by the defendants was an essential part of the plea agreement and that the defendants had already identified for the United States the many trainers with whom the defendants conspired with to illegally administer drugs to the horses. Behe identified for the court the drugs that were administered to include, among others, Kentucky Red, Carolina Gold, Bute, Dexamethasone, Banamine, Stop2, Estrogen, L-Arginine, and ACTH
According to the charges, trainers allegedly placed orders for drugs and the defendants, after administering the drugs, backdated the billing records to avoid detection. The defendants allegedly submitted false veterinarian treatment reports to the State Horse Racing Commission, omitting from those reports any reference to the drugs administered to horses at the track on race day. The filing of these reports and the backdating of billing records were, allegedly, to further the conspiracy by concealing the illegal activity. These acts had the potential to defraud other owners and trainers whose horses were entered in the same race and defrauded the betting public as well.
The matter is being investigated by the Harrisburg Office of the Federal Bureau of Investigation, the Pennsylvania State Horse Racing Commission, U.S. Food and Drug Administration’s Office of Criminal Investigations, and the Pennsylvania State Police. Assistant United States Attorney William A. Behe is prosecuting the cases for the United States.
Indictments and criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty in these cases under the federal statute is 2 years imprisonment, a term of supervised release following imprisonment, and a $200,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Sentencing for the four defendants is scheduled for July 21, 2015 before Magistrate Judge Schwab.
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Former Moecherville Water District Board President Charged with Allegedly Stealing Water District FundsRead the Press Release
CHICAGO — A former Moecherville Water District (MWD) board president appeared in U.S. District Court in the Northern District of Illinois today on federal charges for allegedly stealing $33,597 in property mortgaged and pledged to the Secretary of Agriculture acting through the U.S. Department of Agriculture, Rural Development (USDA-RD), over the course of three months.
The MWD is a not-for-profit corporation that supplied water to households located in the Moecherville neighborhood of Aurora, Illinois. The defendant, MARK McDONALD, 57, of Aurora, was MWD board president, and in that capacity, was responsible for depositing the MWD customers’ payments into the water district’s bank account and writing checks to pay the expenses and purchase goods and services for the benefit of the MWD. McDonald was charged with 15 counts of disposal and conversion of property mortgaged and pledged to the Secretary of Agriculture, acting through the USDA-RD; one count of making a false statement; and three counts of filing a false tax return in an indictment that was returned by a federal grand jury April 7. The offenses are alleged to have been committed between April 2009 and February 2013.
McDonald was arraigned today before U.S. District Judge Young B. Kim and released on an unsecured $4,500 bond. His next status date is set for April 28 before U.S. District Court Judge Robert W. Gettleman.
According to the indictment, between 2005 and 2006, the MWD received $2.7 million in loans from the USDA-RD for the reconstruction of the MWD’s water distribution facilities. The MWD secured repayment of the reconstruction loans by mortgaging and pledging to the Secretary of Agriculture, acting through the USDA-RD, the MWD’s property and assets, and the revenues collected from the operation of the water facility, which included water payments made by the MWD’s customers. In October 2010, the United States filed a foreclosure complaint against the MWD due to the MWD’s failure to timely repay the USDA-RD reconstruction loans. Also in October 2010, a federal judge appointed the Illinois Rural Water Association (IRWA) to be the Receiver of the MWD and authorized IRWA to take custody, control, and possession of the MWD’s facilities, assets, and funds.
The indictment alleges that, on 15 separate occasions between July 2010 and October 2010, and during his tenure as MWD board president, McDonald disposed of and converted to his own use MWD property in the form of cash water payments and bank account funds, which was mortgaged and pledged to the Secretary of Agriculture, acting through the USDA-RD. The indictment also seeks forfeiture of $33,597, the total amount of MWD property that McDonald is alleged to have disposed of and converted to his own use illegally. McDonald also is accused of making a false statement to agents of the USDA-Office of the Inspector General and the Internal Revenue Service in the course of their investigation into the disposition of the MWD’s cash assets and the MWD’s expenditures. Lastly, McDonald is accused of underreporting his income on his U.S. Individual Income Tax Returns to the IRS for the tax years 2008, 2009, and 2010.
The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Anthony Mohatt, Special Agent-in-Charge, U.S. Department of Agriculture-Office of the Inspector General, and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service-Criminal Investigation.
“As the Board President of the Moecherville Water District, Mr. McDonald had a responsibility to water district customers and the U.S. Department of Agriculture to ensure that customer funds were handled with accountability and integrity.” said Mr. Fardon. “Mr. McDonald violated the trust of the residents of Moecherville by stealing some of that money for his own personal use.”
“IRS-Criminal Investigation is committed to bring justice to those who commit crimes against our society,” said Mr. Boyd. “We are committed to protecting the citizens of Aurora, Illinois and all American taxpayers by following the money and holding individuals accountable for their actions. As the board president of the water district, Mr. McDonald, has violated the people’s trust by converting Moecherville Water District funds to his personal use.”
Each count of the disposal and conversion of property pledged to the Secretary of Agriculture, acting through the USDA-RD, and the count of making a false statement carries a maximum penalty of 5 years in prison and a $250,000 fine. Each count of filing a false tax return carries a maximum penalty of 3 years in prison and a $100,000 fine, together with the costs of prosecution. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorney Renai S. Rodney.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Former Dallas Police Department Vice Detective Sentenced on Obstruction ConvictionsRead the Press Release
DALLAS — A former detective with the Dallas Police Department (DPD), who was convicted at trial last year on three counts of an indictment charging obstruction of official proceedings and obstruction of the due administration of justice, was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Jose Luis Bedoy, 41, was sentenced to 18 months in federal prison and fined $25,000 by U.S. District Judge Barbara M. G. Lynn. He was ordered to surrender to the Bureau of Prisons on July 7, 2015.
Bedoy worked in DPD’s Vice Unit from November 28, 2007 through July 2013. The government presented evidence at trial that in early 2009, after a DPD Vice raid on an adult entertainment establishment, Bedoy met a female prostitute who worked at that establishment. Later, when she tried to reclaim property DPD seized during the raid, Bedoy assisted her.
Bedoy later contacted her and expressed an interest in seeing her and wanting a massage from her. A relationship ensued between the two and they began communicating, with Bedoy giving her advice on the adult entertainment establishments at which she could work. Bedoy later met her for a massage, and during the massage, he explained how to screen her clients to avoid being arrested. Bedoy and the female began an intimate relationship.
From 2009 until 2013, while they were engaged in a sexual relationship, Bedoy provided law enforcement-sensitive information to her about DPD Vice Unit prostitution raids and other enforcement actions. In January 2013, Bedoy met her at her residence and showed her a DPD investigative case file targeting “Wet,” an adult entertainment establishment, which he had brought with him. Two days later, Wet was raided, and after the raid, Bedoy arranged to meet her at her residence.
When the Coppell Police Department began an investigation of “Studio Serene,” an adult entertainment establishment, it enlisted the help of the DPD Vice Unit in its investigation. In March 2013, Bedoy advised the female that Studio Serene was being targeted and advised her against working there. Bedoy told her that the information was only for her benefit, but she relayed the information to Studio Serene’s owner. Based on that information, Studio Serene closed for a number of days.
After it reopened on April 25, 2013, however, the Coppell Police Department and the DPD Vice Unit raided Studio Serene. In subsequent interviews they conducted, members of the Coppell Police Department were informed that a DPD Vice Unit detective, named “Jose,” later identified as Bedoy, had “tipped off” the business weeks earlier about the pending raid.
On multiple occasions, Bedoy instructed the female on how to avoid being arrested while using Backpage.com for prostitution. He advised her to not only change her phone number every two weeks, but also advised her of the best days and times to work and the best days and times to avoid. On June 25, 2013, Bedoy contacted her to ensure that she wasn’t working Backpage.com during that week because DPD Vice was “working Backpage” that week. In fact, that same day, DPD Vice Unit, including Bedoy, and the FBI conducted a joint operation that was designed to deter prostitution by directing enforcement efforts at Internet-based prostitution.
As a result of Bedoy’s conduct, FBI and federal grand jury investigations were initiated. After learning of the investigation, Bedoy obstructed the federal grand jury proceeding by telling the female to move, to never give her real name if she is pulled over by law enforcement, to not let the FBI into her apartment to talk to her, and to change her cell phone so that there would be no link between them. Bedoy also lied to law enforcement about his contacts with the female and whether he provided her with sensitive law enforcement information.
The FBI and the DPD’s Public Integrity Unit investigated. Assistant U.S. Attorneys Errin Martin and P.J. Meitl prosecuted.
Former Dallas County Probation Employee Pleads Guilty to Role in Cocaine Distribution ConspiracyRead the Press Release
DALLAS — A Dallas woman, who worked for the Dallas County Department of Criminal Justice, pleaded guilty in federal court today to a drug distribution conspiracy offense, announced Acting U.S. Attorney John Parker of the Northern District of Texas.
Selena Ball, 30, of DeSoto, Texas, pleaded guilty before U.S. Magistrate Judge Paul D. Stickney to one count of conspiring to possess with intent to distribute a controlled substance (cocaine). She faces a maximum statutory penalty of 20 years in federal prison and a $1 million fine, and she will remain on bond pending sentencing, which is set for July 30, 2015.
Ball and 10 co-defendants were charged in a November 2014 indictment with various felony offenses, including conspiracy, drug trafficking, kidnapping, firearms offenses, witness intimidation/tampering, and records destruction, stemming from their involvement in a violent drug trafficking operation (DTO) that operated in South Dallas and the Dallas County Jail.
From September 23, 2013, to May 27, 2014, Ball was a Pretrial Bond/Electronic Monitoring Officer for the Dallas County Department of Criminal Justice. As part of her duties, she was assigned to monitor an inmate, co-defendant Patrick D. Lenard, 33.
Ball and Lenard were involved in a romantic relationship despite her position and despite the conflict this relationship created. Lenard convinced Ball to alter, modify or fail to report violations of his conditions of release. For example, Lenard was required to limit his travel to certain areas within Dallas to avoid contact with co-conspirators. Part of Ball’s responsibility was to review and identify locations Lenard visited as reflected in the GPS records from his monitoring bracelet. Ball, however, failed to report violations of these conditions by Lenard. In fact, Lenard violated his conditions of release by approaching, confronting and attempting to intimidate coconspirators and witnesses to a kidnaping.
From November 26, 2012, to approximately November 18, 2014, Lenard conducted and managed drug-trafficking activities form his jail cell in the Dallas County Jail. During that time, he called his co-conspirators, including Ball. On multiple occasions, Lenard and Ball had phone conversations regarding illegal narcotics transactions and money obtained from those transactions. Lenard instructed Ball to hide the drug proceeds, and in one conversation, Ball actively counted the drug proceeds. On some of the phone calls, other individuals were conferenced in and Lenard, Ball and the other individual would discuss illegal naracotics transactions and money obtained from those transactions.
Lenard, and another one of his girlfriends, Lashundra Rogers, 35, of Mesquite, Texas, are set for trial on July 13, 2015.
Other defendants charged in the conspiracy, including Juaquai Gregg, Joshua Smart, Shuntocqua Shine, Brandon Florence, a/k/a “Beetlejuice,” Christina Staton, Rory Minafee and Bonner Ray Tutson have pleaded guilty to their respective roles and are awaiting sentencing.
Another defendant, Rodney Wynn, 34, of Kaufman, Texas, was added to the State of Texas’s most wanted list in September 2014 and remains a fugitive.
The investigation is being led by the Texas Department of Public Safety (DPS), the Drug Enforcement Administration, the FBI and the Dallas Police Department.
Assistant U.S. Attorneys Errin Martin and P. J. Meitl are prosecuting.
Former DEA Employee Pleads Guilty to Credit Card Fraud SchemeRead the Press Release
A former Drug Enforcement Administration (DEA) employee pleaded guilty today to defrauding the government out of more than $113,000 using fraudulently issued government credit cards, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General in Washington, D.C.
Keenya Meshell Banks, 42, of Upper Marlboro, Maryland, pleaded guilty today before U.S. District Judge Deborah K. Chasanow of the District of Maryland to one count of wire fraud. A sentencing hearing is scheduled for June 29, 2015.
According to her plea agreement, Banks was employed by the DEA as a Program Manager, and was responsible for the approval and issuance of government credit cards to DEA employees. While serving in that role, Banks admitted that she submitted dozens of fake credit card applications to JPMorgan Chase & Co. for fictitious DEA employees, using names and identifying information of individuals who did not work at the DEA. In at least one instance, however, Banks submitted the identifying information of an actual DEA employee. Through this scheme, Banks obtained at least 32 fraudulent credit cards, which she then used to withdraw more than $113,000 from ATMs in Maryland and Northern Virginia. As part of her plea agreement, Banks agreed to forfeit the proceeds she received as a result of the scheme and to pay full restitution.
The case is being investigated by the Department of Justice Office of Inspector General and is being prosecuted by Trial Attorneys Richard B. Evans and Justin Weitz of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Thomas P. Windom of the District of Maryland.
Former Charleston man sentenced to two and a half years for federal firearms chargeRead the Press Release
CHARLESTON, W.Va. – A former Charleston resident who illegally possessed a firearm on November 30, 2012, was sentenced today to 30 months in prison, announced U.S. Attorney Booth Goodwin. Blaine Jerome Ivery, 32, previously pleaded guilty in November of 2014 to being a felon in possession of a firearm.
At approximately 3 a.m. on November 30, 2012, members of the Charleston Police Department were parked outside of the Impulse night club on Capitol Street in downtown Charleston when they heard what they believed to be a gunshot. Officers then watched Ivery run a red light in a car near the area where the gunfire sounded. When officers stopped the car, Ivery tossed a loaded Hi-Point 9mm semiautomatic from the passenger side of the car onto the sidewalk. Ivery was alone in the car. A spent 9 mm shell casing was also recovered from inside the vehicle. Ivery had previously been convicted in the Circuit Court of Kanawha County, West Virginia, in 2010 of wanton endangerment with a firearm.
The Charleston Police Department, with assistance from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, conducted the investigation. Assistant United States Attorneys Haley Bunn and Jennifer Rada Herrald handled the prosecution.
The case is being prosecuted as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a commitment of U.S. Attorney Goodwin’s office and other officials nationwide to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Federal Tax Enforcement Is A Focus of Prosecutions in the First Quarter of 2015Read the Press Release
SACRAMENTO, Calif. — With the annual tax filing deadline approaching tomorrow on April 15, United States Attorney Benjamin B. Wagner noted that his office had taken a number of criminal enforcement actions in recent months in the Eastern District of California. The U.S. Attorney’s Office works with the Internal Revenue Service – Criminal Investigation and other law enforcement partners to enforce federal tax laws.
“This is an appropriate time of year to remind those few individuals who set out to cheat or evade their tax obligations that such conduct can result in prosecution,” said U.S. Attorney Wagner. “Every year some deliberately fail to file required returns or file false and fraudulent returns in order to evade the assessment and payment of tax due. It is the obligation of this office to pursue and prosecute them for their criminal conduct.”
“All Americans have a duty and responsibility to pay taxes. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe,” said José M. Martinez, IRS ‑ Criminal Investigation Special Agent in Charge of the Oakland Field Office. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t. The IRS Criminal Investigation Division, together with the Department of Justice, will investigate and prosecute those who violate our tax system.”Eastern District of California indictments so far in 2015 have included: (The charges in an indictment are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.)
United States v. Clint D. Bonderer et al. — According to the indictment, Bonderer, 38, of Stockton, and Slavic Khudoy, 35, of Loomis conspired to submit false claims that included false statements about the taxpayers’ income, filing status, and address, and fraudulently claimed credits. Between 2010 and 2012, they submitted 842 fraudulent tax returns, requesting more than $600,000 in refunds in the names of other people. In most cases, they kept the refunds for themselves. (2:15-cr-28)
United States v. Lejohn Windom Sr. et al. — According to the indictment, Sacramento residents Windom Sr., 52; Lejohn Windon Jr., 22; Tracy Hartway, 30; and Audrey Johnson, 48, filed 682 income tax returns, requesting nearly $2 million in fraudulent refunds. They used stolen IDs requesting tax refunds and forged the names of the taxpayers to make the fraudulent refund checks payable to themselves. (2:15-cr-29)
United States v. Emilio Lara — According to the indictment, Lara, 48, of American Canyon, owned and operated two income tax preparation services in Solano County. He was charged in a 38‑count indictment with preparing fraudulent income tax returns for clients. From 2009 to 2012, Lara helped clients claim false itemized deductions such as medical and dental expenses, charitable contributions, and unreimbursed employee expenses ranging from $740 to $19,093, for a total of $462,392. (2:15-cr-39)
United States v. Linda J. Miller — According to the indictment, Miller, 62, of Benicia, was charged with filing a false tax return. (2:15-cr-66)
United States v. Vivian Williams et al. — According to the indictment, Williams, 49, a tax preparer who operated out of her home in Stockton, was charged with 44 counts of conspiracy, false claims to a government agency, identity theft, and aiding and assisting in the preparation of false and fraudulent tax returns. Darrell Lemont Morris, 43, of Stockton, was charged with one count of conspiracy. Between January 2010 and March 2011, Williams submitted tax returns for clients reporting false income allowing the taxpayers to claim a higher tax refund as a result of the Earned Income Tax Credit and the Child Tax Credit. She filed tax returns for other taxpayers without their knowledge and collected their tax refunds. Morris allowed Williams to use his bank accounts for the deposit of tax refunds, and then shared in the proceeds with Williams. (1:15-cr-28)
United States v. Yolanda Castro — According to the indictment, Castro, 45, a 20-year employee of the IRS in Fresno, was charged with 10 counts of tax fraud and making false statements to a government agency. Between 2007 and 2013, she prepared and filed false federal income tax returns for herself, her family members and others in which she fraudulently claimed tax deductions and credits. On her own 2008 tax return, Castro claimed a credit for education expenses that she did not incur and provided phony textbook receipts to support the claim. Likewise, in tax returns she prepared for herself and others, Castro claimed child care expenses that had not been incurred. (1:15-cr-50)
United States v. Elaina S. Norris — According to the indictment, seasonal tax examiner Norris, 34, of Fresno, was charged with assisting a relative in filing a tax return that falsely claimed two individuals as dependents using the personal information she obtained through her employment at the IRS Service Center. She is also charged with falsely claiming a dependent on two of her personal tax returns, resulting in the receipt of tax credits and deductions that she was not authorized to receive. (1:15-cr-072)
United States v. Brandon Adam Eidson — According to the indictment, Eidson, 34, of Turlock, operated a hydroponics equipment and supply business and is charged with three counts of filing false tax forms, one count of drug distribution, and one count of structuring cash transactions. Between 2008 and 2010, he underreported his gross receipts by over $1.2 million. (1:15-cr-85)
Other actions so far this year:
On January 20, 2015, Rebekah Root, 34, of Visalia, was sentenced to three years and nine months in prison for wire fraud, making a false claim for a tax refund, and aggravated identity theft. According to court documents, in 2011, Root obtained tax documents that were stolen from an IRS office in Visalia. She used those tax documents to submit false tax returns on behalf of six taxpayers, without their knowledge or permission, and claimed approximately $50,000 in fraudulent tax refunds. (1:13-cr-376)
On January 20, 2015, Federico Garcia Garcia, 46, of Arvin, was sentenced to two years in prison for filing false claims with the IRS in a scheme to obtain tax refunds. He was also ordered pay $79,932 in restitution to the IRS. According to his plea agreement, between October 2007 and December 2008, Garcia caused 147 false federal income tax returns to be submitted to the IRS in the names of third parties with fabricated W-2s that contained false wage and withholding information. Garcia made fraudulent claims for approximately $308,317 in federal tax refunds in the scheme, and the IRS paid out approximately $79,932. (1:13-cr-233)
On February 9, 2015, Christine Rose Caraway, 34, of Modesto, pleaded guilty to one count of conspiracy to defraud the United States. According to court documents, from about December 2010 to May 2011, Caraway and her former spouse Heath Roberson obtained personal identifying information from over 40 individuals. Caraway used this information to generate false tax returns seeking over $121,000 in tax refunds and submitted them to the IRS. Roberson pleaded guilty in April 2014 and was sentenced to two years and nine months in prison and to pay over $66,000 in restitution to the IRS. Sentencing for Caraway is set for April 20, 2015. (1:13-cr-171)
On March 13, 2015, a jury convicted Terrylyn McCain, 67, of Stockton, of a scheme to defraud the United States by filing false tax returns and buying gold with the proceeds of the fraud. According to evidence presented at trial, McCain filed at least 12 fraudulent returns that sought nearly $3 million in tax refunds. In one instance, early in the scheme, the IRS refunded $156,373 to McCain. Within the month, she had used the refund money to purchase approximately $62,000 in gold coins. Sentencing for McCain is set for June 4, 2015. (2:12-cr-144)
More criminal tax investigations are underway.