Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
14 April 2015
Federal Grand Jury Indicts Temple Man for Production of Child PornographyRead the Press Release
This afternoon, a federal grand jury in Waco returned a two count indictment charging 38–year-old Joseph “Joey” Michael McFarland of Temple, TX, with production and possession of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.
The indictment charges McFarland with one count each of production and possession of child pornography. According to the indictment, in June 2014, McFarland allegedly coerced a minor into engaging in sexually explicit conduct for the purpose of producing a visual image of the sexually explicit conduct. The indictment further alleges that in January 2015, McFarland unlawfully possessed images of child pornography.
On January 15, 2015, FBI agents executed a search warrant and seized a computer belonging to McFarland. A subsequent forensics examination of the computer revealed the presence of numerous photographs of minors engaged in sexually explicit conduct.
McFarland faces between 15 and 30 years in federal prison for production of child pornography and up to 20 years in federal prison for possession of child pornography. McFarland, and his accomplice, 20-year-old Meredith Howell of Temple, remain in federal custody following their arrest on Sunday by the FBI. Howell is charged by a federal criminal complaint with accessory after the fact for her role in the child enticement/pornography scheme. Upon conviction, she faces between seven-and-a-half years and 15 years in federal prison.
The case resulted from a joint investigation by the Federal Bureau of Investigation together with the Temple Police Department. This case is being prosecuted by Assistant United States Attorney Greg Gloff.
Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictment(s) against the following:
Easley Woman Indicted for Delay of Mail by a Postal Employee
Heidi Feil, age 37, of Easley, South Carolina, was charged in a single-count Indictment with delay of mail by a postal employee, a violation of Title 18, United States Code, Section 1703. The maximum penalty Feil could receive is five years imprisonment and a fine of $250,000.00. The case was investigated by agents of the United States Postal Service, Office of Inspector General, and is assigned to Assistant United States Attorney David C. Stephens of the Greenville office for prosecution.Spartanburg County Man Indicted for Delay of Mail by a Postal Employee
Joseph B. Bond, age 58, of Moore, South Carolina, was charged in a single-count Indictment with delay of mail by a postal employee, a violation of Title 18, United States Code, Section 1703. The maximum penalty Bond could receive is five years imprisonment and a fine of $250,000.00. The case was investigated by agents of the United States Postal Service, Office of Inspector General, and is assigned to Assistant United States Attorney David C. Stephens of the Greenville office for prosecution.Fountain Inn Resident Indicted for Possession of Child Pornography
Kenneth E. Brewer age 37, of Fountain Inn, South Carolina, was charged in a single-count indictment with possession of child pornography, a violation of 18 U.S.C. § 2252A(a)(5)(B). The maximum penalty Brewer could receive is not less than ten years and not more than twenty years imprisonment and a maximum fine of $250,000. The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) special agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution. This case is being brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.Foreign Nationals Charged with Illegal Re-entry
Rubio Carrillo-Domingo, Carlos Eduardo Alvarado-Santos, Ricardo Bautista-Hernandez, Jorge Brito-Villalba, Felipe Ruedas-Campos, Roberto Gonzalez-Valencia, Enrique Romeo Riz-Barrera, and Miguel Vidal-Lopez, were each charged in Indictments with illegal re-entry to the United States, a violation of Title 8, United States Code, Section 1326. The maximum penalty each could receive, depending on their prior criminal history, is one to twenty years imprisonment. These cases were investigated by U.S. Immigration and Customs Enforcement (ICE) agents and are assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
####
Eagle Pass Bank Robber Pleads GuiltyRead the Press Release
In Del Rio, 40-year-old Guadalupe Garza of Eagle Pass, TX, faces 12 years in federal prison after pleading guilty today to robbing a bank while using a deadly weapon announced Acting United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.
Appearing before United States District Judge Alia Moses, Garza pleaded guilty to one count of bank robbery while brandishing a firearm. By pleading guilty, Garza admitted that on November 19, 2011, he robbed the Banquitos Las Minas Branch of the International Bank of Commerce in Eagle Pass. According to court records, Garza approached a teller while carrying a binder. Garza opened the binder revealing a revolver, and then instructed the teller to give him all the money in her drawer. Garza fled the bank with more than $17,000.
Garza remains in federal custody pending sentencing scheduled for October 15, 2015, before Judge Moses in Del Rio.
The case resulted from a joint investigation by the Federal Bureau of Investigation together with the Eagle Pass Police Department. This case is being prosecuted by Assistant United States Attorneys Meghan McCalla, Katherine Griffin and Chris Blanton.
EOIR Announces Change to Immigration Judges Hearing Cases Out of Dilley (in Espanol)Read the Press Release
La agencia EOIR anuncia que habrá un cambio de jueces para las audiencias de inmigración en Dilley
FALLS CHURCH, VA – La Oficina Ejecutiva de Revisión de Casos de Inmigración (EOIR), ha anunciado en el día de hoy que las audiencias de inmigración localizadas en Dilley, se reasignarán al tribunal de inmigración en Miami, reemplazando al tribunal de inmigración en Denver, que ha estado tratando estos casos. Esto se debe a un informe por El Servicio de Inmigración y Control de Aduanas (ICE), una agencia del Departamento de Seguridad Nacional (DHS), con relación a la expansión del centro residencial y de detención en Dilley, Texas, que ahora tiene cupo para 2,400 camas.
Así como han estado haciendo los jueces de inmigración del tribunal de inmigración en Denver, los jueces de inmigración en Miami que se han asignados a los casos en Dilley, tratarán los casos por medio de videoconferencia (VTC). Los jueces de inmigración en Miami tratarán todos los procesos de expulsión de Dilley, excepto aquellos procesos en los que un juez de inmigración de Denver ya esté considerando las evidencias, o un caso donde los asuntos legales ya se estén disputando. También, a partir del 1º de mayo de 2015, los jueces de inmigración de Miami repasarán los casos de temor creíble (Credible Fear) referidos por DHS a EOIR. Por otro lado, los casos referidos por DHS antes del 1º de mayo de 2015, así como las audiencias ya iniciadas con los jueces de inmigración en Denver, o con asuntos legales que ya se estén disputando, continuarán asignados a los jueces del tribunal de inmigración en Denver. De todas formas, todas las partes recibirán notificación debida antes de cualquier audiencia. Ahora bien, se está pidiendo por favor, que toda presentación de documentos se someta al tribunal de inmigración en Miami, a menos que un juez de inmigración en Denver ya esté tratando el caso.De acuerdo a Juan P. Osuna, el director de la EOIR: “Después de haberse hecho una evaluación de la lista de los casos pendientes, como consecuencia de la decisión del Departamento de Seguridad Nacional de expandir el centro en Dilley, la EOIR ha determinado que el tribunal de inmigración en Miami puede hacerle frente al aumento de casos de inmigración de una forma más eficiente”.
Los jueces de inmigración en Miami que tratarán los casos de Dilley, estarán reprogramando los casos no prioritarios, y aquellos donde los comparecientes no estén detenidos, para así poder tratar los casos prioritarios.
- EOIR -
EOIR Announces Change to Immigration Judges Hearing Cases Out of DilleyRead the Press Release
FALLS CHURCH, Va. - The Executive Office for Immigration Review (EOIR) today announced that, following the Department of Homeland Security (DHS), Immigration and Customs Enforcements announcement of the Dilley, Texas, residential detention facility expansion to 2,400 beds, EOIR will reassign immigration cases originating at the Dilley hearing location from the Denver Immigration Court to the Miami Immigration Court.
As the Denver Immigration Court immigration judges do, the Miami immigration judges assigned to Dilley cases will hear those cases via video-teleconference (VTC). Miami immigration judges will hear all Dilley removal cases except those in which a Denver immigration judge has already begun to hear evidence on contested issues. Miami immigration judges will also conduct credible fear reviews in cases that DHS refers to EOIR on or after May 1, 2015. Credible fear reviews that DHS refers before May 1, 2015, and all cases in which a Denver immigration judge has begun to hear evidence on contested issues will remain before the Denver immigration judge. All parties will receive appropriate notice prior to their hearings. Please note that filings for Dilley cases should be submitted to the Miami Immigration Court location unless the Denver immigration judge retains the case.
"Following an evaluation of the available docket space, EOIR determined that the increase in immigration court cases due to the Department of Homeland Securitys decision to expand the Dilley facility will be most efficiently handled from the Miami Immigration Court," said EOIR Director Juan P. Osuna.
The immigration judges in Miami who will hear the cases from Dilley are rescheduling the non-detained, non-priority cases that are scheduled for docket time needed to hear the priority cases.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Drug Dealer Sentenced to 60 Months in PrisonRead the Press Release
POCATELLO - Sergio Garcia, 25, of Rexburg, Idaho, was sentenced today in United States District Court to 60 months in prison followed by four years of supervised release for conspiracy to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Garcia to forfeit $7,500 in proceeds from his crime. Garcia pleaded guilty to the charge on January 28, 2015.
According to the plea agreement, with the assistance of at least two other individuals, Garcia sold methamphetamine six times to someone working with the police. The sales all took place in eastern Idaho and were usually for one ounce of methamphetamine.
Garcia’s codefendant, Uriel Garcia, was charged with distributing methamphetamine on September 4, 2013. A warrant for his arrest remains active.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Madison, Fremont, and Bonneville County Sheriff’s Offices, and the Idaho Falls Police Department, with the assistance of the Federal Bureau of Investigation and the Idaho State Police.
Drug Dealer Sentenced to 20 Years Behind BarsRead the Press Release
Jamil Murray, a/k/a "Smooth," a/k/a "Mills," 33, of Philadelphia was sentenced today to 20 years in prison for conspiring to distribute cocaine base ("crack"), and possessing with intent to distribute crack cocaine. Murray was a large-scale drug dealer and a pimp. He pleaded guilty on May 2, 2014 and also stipulated to a factual basis involving forcing a woman to engage in commercial sex acts for his sole financial benefit. Murray has an extensive criminal history. Since his adolescence, he has engaged in continuous criminal behavior interrupted only by periods of incarceration.
In addition to the prison term, U.S. District Court Judge Mitchell S. Goldberg ordered ten years of supervised release and a $200 special assessment.
The case was investigated by the Bensalem Township Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Sherri A. Stephan and Trial Attorney Anita Channapati with the Department of Justice Civil Rights Division.
District Man Sentenced to Three-Year Prison Term for Burglary of Home in Northwest WashingtonRead the Press Release
WASHINGTON – Michael Mosley, 43, of Washington, D.C., has been sentenced to a prison term of three years for a burglary last fall of a residence in Northwest Washington, Acting U.S. Attorney Vincent H. Cohen, Jr. announced today.
Moseley pled guilty in February 2015, in the Superior Court of the District of Columbia, to one count of second-degree burglary and one count of a felony bail reform act violation. He was sentenced on April 13, 2015, by the Honorable Anita Josey-Herring. Upon completion of his prison term, Mosley will be placed on one year of supervised release.
According to the government’s evidence, the burglary occurred on Oct. 1, 2014. The victim left his residence in the 1700 block of Newton Street NW, in the Mount Pleasant area, at approximately 11 a.m. and returned prior to 5 p.m. When the victim returned home, he noticed that the front door to his residence was forced open. After calling police and walking through his residence, the victim reported the following items missing: a 46-inch flat screen television; a Mac mini-computer; two portable external hard-drives; and an iPhone 4S.
Coincidentally, about 20 minutes before the discovery of the burglary, a Metropolitan Police Department (MPD) officer stopped Mosley on the same block of Newton Street. Mosley was carrying a flat-screen television over his head while carrying a black shoulder bag, which appeared to be filled with contents. The officer made contact with Mosley and asked him for identification. The officer noted the television’s serial number, but let Mosley go on his way because there was no probable cause for arrest at that point.
Approximately twenty minutes later, the same officer received a report of the burglary in the same area. MPD officers canvassed the area looking for Mosley, but were unsuccessful. He was ultimately arrested on a warrant weeks later.
According to the government’s evidence, latent fingerprints lifted from another residential burglary on Ingleside Terrace NW, on Sept. 23, 2014, matched Mosley.
Additionally, on Dec. 16, 2014, as a condition of his release in the pending burglary case, Mosley signed notice and promised to appear in court on Jan. 15, 2015. Mosley failed to appear in court, and that led to the charge for the felony bail reform act violation.
In announcing the sentence, Acting U.S. Attorney Cohen commended the work of those who investigated the case from the Metropolitan Police Department. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Ali D. Kargbo, of the Felony Major Crimes Trial Section, who investigated and prosecuted the matter; and Paralegal Specialist Debra McPherson.
Department of Justice Launches Collaborative Reform Process with Calexico, California, Police DepartmentRead the Press Release
The U.S. Department of Justice’s Office of Community Oriented Policing Services (COPS Office) today announced the start of the Collaborative Reform Initiative for Technical Assistance (CRI-TA) with the Calexico Police Department in California.
“The COPS Office will conduct a thorough, independent assessment of the Calexico Police Department’s policies, practices and responsiveness to the community to ensure that they are taking into account national standards and community expectations,” said COPS Office Director Ronald Davis. “Through this process, the Justice Department is committed to identifying organizational deficiencies, recommending best practices and providing technical assistance to help strengthen the Calexico Police Department.”
The COPS Office’s CRI-TA is an independent and objective way to transform a law enforcement agency through an analysis of policies, practices, training, tactics and accountability methods around key issues facing law enforcement today. The initiative is designed to provide technical assistance to agencies facing significant law enforcement-related issues. Using subject matter experts, interviews and direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies in enhancing and improving their policies and procedures, operating systems and professional culture.
The COPS Office is currently providing CRI-TA in Spokane, Washington; Philadelphia; St. Louis; Baltimore; Salinas, California; and Fayetteville, North Carolina, and has completed the process in Las Vegas.
The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has awarded more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 126,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit the office’s website.
Danbury Restaurant Owner Pleads Guilty to Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England, announced that AGOSTINO INCORVAIA, 47, of Danbury, waived his right to indictment and pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to one count of tax evasion.
According to court documents and statements made in court, from 2007 to 2012, INCORVAIA failed to report to the Internal Revenue Service approximately $2.65 million in gross receipts generated by “Augie’s Numero #1,” a restaurant he operates in Danbury.
During the investigation of this matter, INCORVAIA admitted to an undercover IRS agent that he understated the restaurant’s gross receipts on his income tax returns and provided false numbers to his accountant, that he had a large group of “off the books” employees, and that a portion of the unreported receipts supported his business interests and properties, including those in the Dominican Republic. INCORVAIA’s admissions, which were recorded, were corroborated by the restaurant’s “point of sale” system that was seized pursuant to a search warrant.
In pleading guilty, INCORVAIA admitted that he evaded payment of income taxes when filing his joint income tax returns for the 2007 through 2011 tax years.
Judge Bolden scheduled sentencing for July 7, 2015, at which time INCORVAIA faces a maximum term of imprisonment of five years and a fine of up to $100,000. As part of his guilty plea, INCORVAIA has agreed to pay $396,650 in back taxes, as well as interest and penalties.
This case was investigated by the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorney Hal Chen.
Dallas Woman Who Stole Nearly $65,000 from Three Federal Agencies and Fled to Kentucky Where She Continued Her Thefts Is Sentenced to Serve A Total of 78 Months in Federal PrisonRead the Press Release
DALLAS — A 31-year-old woman, who stole nearly $65,000 from several federal programs, and in some instances, stole others’ identities to commit the thefts, was sentenced today, announced Acting U.S. Attorney John R. Parker of the Northern District of Texas.
Shakira Wells, who was a Dallas resident when she committed many of the offenses, was sentenced by U.S. District Judge Sam A. Lindsay to serve a total of 78 months in federal prison and ordered to pay $64,845 in restitution. Wells pleaded guilty in July 2014 to a superseding information charging one count of theft of government funds and one count of aggravated identity theft. She has been in custody since her arrest in December 2013 on charges outlined in a federal indictment returned by a grand jury in Dallas in July 2013.
According to documents filed in the case, from November 2011 through October 2012, Wells stole Social Security Administration Title II Auxiliary Insurance benefits paid to her for the use of three minor children. These children, however, were in the care and custody of other relatives while Wells received their benefits and converted the funds to her own use.
In or around the same time, Wells also received and improperly converted funds from the Supplemental Nutrition Assistance Program (SNAP) for these three children who were in the care and custody of other relatives.
Again, during the same approximate period, Wells also fraudulently received Federal Family Educational Loan Program (FFELP) funds and Pell Grants from the Department of Education in the name of S.C. Wells applied for and received those funds using S.C.’s identity, but converted the funds to her own use.
Following these offenses, Wells relocated to Lexington, Kentucky, and while there, she assumed other identities. In October 2013, Wells completed a rental application for residents and occupants, with the intent to deceive, by falsely representing the Social Security Number assigned to C.E., was in fact Wells’ Social Security Number. During a search of the apartment rented to her using C.E.’s identity, agents found evidence that Wells had assumed other identities and obtained student loans using those identities.
“Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. As the law enforcement arm of the U.S. Department of Education, ensuring that those who steal student aid or game the system for their own selfish purposes are stopped is a big part of our mission,” said Neil Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General Southwestern Regional Office. “I'm proud of the work of OIG agents and our law enforcement colleagues in holding Ms. Wells accountable for her criminal actions.”
The investigation was conducted by the U.S. Department of Education Office of Inspector General; Social Security Administration Office of the Inspector General; and the Office of Inspector General, Texas Health and Human Services. Special Assistant U.S. Attorney Nicole Dana prosecuted.
Con Man Sentenced for Defrauding Investors of $1.3 MillionRead the Press Release
PORTLAND, Ore. – Yesterday, U.S. District Court Judge Anna J. Brown sentenced Lloyd Benton Sharp, aka Kevin Thomas, age 79, of Clackamas, Oregon, to 60 months in prison for conspiracy to defraud investors in biodiesel projects in Ghana, West Africa, and Chile. Judge Brown also sentenced Sharp to serve three years of supervised release and ordered him to pay $6,021,482 in restitution.
Between 2007 and 2013, Sharp conspired to defraud investors in a project to produce and sell biodiesel fuel in Ghana, West Africa. When this investment failed, Sharp continued to defraud those same investors by soliciting additional funds for a project to transport biodiesel fuel from Argentina to Chile, and to build biodiesel refineries in Chile. Sharp targeted a Christian men’s group in Beaverton as victims of the fraud scheme.
Sharp falsely told investors that their investment funds would be used to purchase the equipment and feedstock to operate a biodiesel refinery in Ghana. Investors were falsely told that the Ghana refinery would be up and running within two months of them investing their money. Sharp promised victims that if they each invested $50,000, they would receive a return of $7,000 per month for an indefinite period of time as soon as the biodiesel refinery was operational. Sharp guaranteed investors that they could get 100% of their money back at any time. Sharp did not use the investors’ funds to produce and sell biodiesel fuel in Ghana as promised, and the Ghana biodiesel refinery never became operational.
When questioned by investors about the Ghana refinery, Sharp claimed that a more promising investment opportunity had been found in Chile, and that a successful investment there would provide sufficient funds to get the Ghana refinery operational. Sharp solicited and received additional funds from investors for investments in five biodiesel plants in Chile, and for the purchase of Argentinian biodiesel fuel to be trucked to Chile. However, the Argentinian biodiesel was never purchased, and the Chilean biodiesel plants were never built. Sharp used most of his share of the investors’ funds for his personal benefit. In all, investors in the Ghana and Chile biodiesel schemes were defrauded of approximately $1.3 million.
Sharp has operated various fraud schemes in the western United States since at least 1984. These schemes include the marketing and sale of investments in real estate, paulownia trees, luxury vacation condos, gold ore, and gold mines, in addition to the biodiesel project. As part of his plea agreement, Sharp agreed to pay restitution in the amount of $6,021,482, which includes restitution to the victims of all his fraudulent schemes.
This case was investigated by the United States Postal Inspection Service and the Oregon Division of Finance and Corporate Securities, and was prosecuted by Assistant U.S. Attorneys Claire M. Fay and Donna B. Maddux.
Charenton man sentenced to 12 months in prison for assault at the Chitimacha tribal reservationRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Charenton man was sentenced to 12 months in prison for assaulting a Chitimacha tribal woman.
Dugan Joseph Burleigh, 34, of Charenton, La., was sentenced by U.S. Magistrate Judge C. Michael Hill after pleading guilty to one count of assault in Indian Country. He was also sentenced to serve one year of supervised release. According to evidence presented at the guilty plea, Burleigh, who is a not a member of the Chitimacha Tribe of Louisiana, assaulted a female victim who was a member of the tribe on January 11, 2015. He struck the victim from behind knocking her to the ground and continued to punch and kick her breaking her nose during the incident.
Jurisdiction in Indian Country is based upon the unique sovereign relationship between the federal government and Indian tribes. Congress has extended the territorial jurisdiction of the United States to major crimes committed against Native Americans that take place in Indian Country, which includes all property that the government holds in trust or use by officially recognized Native American tribes. The U.S. Attorney’s Office prosecutes all major crimes and misdemeanor cases arising in Indian Country that are within the jurisdiction of this office.
The FBI and the Chitimacha Tribal Police Department conducted the investigation. Assistant U.S. Attorneys Dominic Rossetti and Joseph G. Jarzabek are prosecuting the case.
California Man Pleads Guilty to Conspiracy to Distribute MethamphetamineRead the Press Release
U.S. Attorney Kenneth A. Polite announced that LEONID DJUGA, a/k/a “Leonid Dzhuga,” age 37, of Reseda, California, pleaded guilty today, to one count of conspiracy to distribute and to possess with the intent to distribute 500 grams or more of methamphetamine.
According to court documents, in June 2014, St. Bernard Parish Sheriff’s Office (SBSO) deputies investigating methamphetamine distribution in Arabi, Louisiana, arrested two men who were selling methamphetamine on West Judge Perez Drive. Through their investigation, deputies learned that their source of methamphetamine was DJUGA, a resident of Reseda. SBSO deputies coordinated with agents from the Drug Enforcement Administration (DEA) New Orleans Field Office, and between June 26th and 27th, 2014, federal agents and SBSO deputies intercepted four packages containing methamphetamine being mailed through Federal Express to Arabi. In total, the four packages contained over one kilogram of methamphetamine. According to DEA laboratory analysts, the methamphetamine in all four packages had a purity level of over 99%, with one shipment testing as 100% pure methamphetamine.
On July 15, 2014, DEA agents, assisted by Los Angeles Police Department officers and a St. Bernard Parish Sheriff’s deputy, arrested DJUGA at his residence in Reseda, pursuant to a federal arrest warrant. At DJUGA’S residence, agents located plastic bottles that were similar to the bottles used to package the methamphetamine that was seized in Louisiana. Agents also seized from DJUGA’S office a notebook that appeared to be a drug ledger; a receipt for a package being shipped to Arabi; and three cellular telephones. Agents also located a BMW that was registered to DJUGA. In the trunk of the car, agents found a box cutter with residue. The residue was field tested which resulted in a presumptive positive result for the presence of methamphetamine. A subsequent search of DJUGA’S cellular phones pursuant to a warrant revealed text messages discussing shipments of packages to Louisiana and a photograph of a FedEx tracking label destined for Louisiana.
DJUGA faces a mandatory minimum term of 10 years and a maximum of life imprisonment, a $10 million fine, and at least five years of supervised release. U.S. District Judge Lance M. Africk set sentencing for July 23, 2015.
U.S. Attorney Polite praised the work of the St. Bernard Parish Sheriff’s Office with the Drug Enforcement Administration in investigating this matter and thanked the District Attorney’s Office for Louisiana’s 34th Judicial District, the DEA Los Angeles Field Office, and the Los Angeles Police Department for providing assistance. Assistant United States Attorneys Matthew Payne and Brandon Long are in charge of the prosecution.
Leonid Djuga Factual Basis
CPA and Former CFO of Service King LLC Is Sentenced to 36 Months in Federal Prison for Embezzling from EmployerRead the Press Release
DALLAS — A local Certified Public Accountant (CPA) was sentenced yesterday afternoon on a mail fraud conviction stemming from his embezzlement of funds from his employer, announced Acting U.S. Attorney John Parker of the Northern District of Texas.
Daniel L. Mangini, 61, of Southlake, Texas, was sentenced to 36 months in federal prison and ordered to pay $2,459,218.44 in restitution, which includes the victim’s attorney’s fees, investigative costs, and prejudgment interest, by U.S. District Judge Barbara M. G. Lynn. He must surrender to the Bureau of Prisons by May 5, 2015.
Mangini has also agreed to forfeit his Destin, Florida, residence to the government. While Mangini’s CPA license is not currently active, he agreed he will not oppose any disciplinary action by the Texas State Board of Accountancy related to or concerning his offense, nor practice in the financial sector or in the field of accounting.
According to documents filed in the case and evidence presented at sentencing, Mangini was the Chief Financial Officer at Service King LLC as well as the personal CPA to Service King’s owner, Edward Lennox. Starting in or about January 2006 and continuing until his resignation from Service King in February 2012, Mangini embezzled funds from Lennox. In particular, Mangini accessed Lennox’s computerized accounting system and printed or wrote unauthorized checks which were payable to Mangini’s personal creditors or himself from Lennox’s bank accounts. Mangini sent unauthorized checks for payment to his creditors through the U.S. Postal Service and initiated interstate wire transfers to move embezzled funds between financial entities for his own benefit and to conceal the true source of the proceeds. As a particular example, Mangini admitted in January 2012, he wrote a $40,000 check payable to American Express from one of Lennox’s accounts. Mangini admits the check was not authorized and that the money was embezzled from Lennox. To conceal the scheme, Mangini backdated the check by one year in Lennox’s records. The evidence at sentencing established that over the course of the scheme, Mangini embezzled more than $2 million from the victim.
The evidence at sentencing also established that Mangini made false representations in the course of obtaining a mortgage to purchase in part a luxury beachfront property in Destin, Florida. Through the use of civil forfeiture in the related case of United States v. 4662 Destiny Way, Destin, Florida, Case No. 3:14-CV-2134-P (N.D. Texas), and prejudgment remedies of the Federal Debt Collection Procedures Act in the criminal case to preserve assets before Mangini’s sentencing, the government secured $1.765 million for the victim. Prior to sentencing, the government collected more than $1.65 million from the sale of luxury real estate and goods, which will be immediately disbursed to the victim as restitution. Further, the government has restricted an additional $100,000 in financial and retirement accounts held by garnishees pending final orders.
The FBI investigated. Assistant U.S. Attorneys Melissa Childs and J. Nicholas Bunch prosecuted.
Attorney Pleads Guilty to Defrauding Clients and InvestorsRead the Press Release
SAN DIEGO – San Diego attorney Todd Macaluso, whose practice included representing plaintiffs in personal injury lawsuits, pleaded guilty today to defrauding his clients and investors by entering into funding agreements that put his clients’ personal injury cases up as collateral without their knowledge or consent. As part of his guilty plea, Macaluso admitted that he forged the signatures of his clients, and used forged notary stamps and signatures, in order to convince potential investors to advance him millions of dollars.
According to court records, Macaluso funded his personal injury law practice by entering into “funding agreements” with various investors. Under these agreements, investors advanced Macaluso money in exchange for the right to collect a portion of his clients’ recoveries in the future. Although clients had to consent to the collateralization of their lawsuits in order for these transfers to be valid, Macaluso concealed these arrangements from many of his clients and forged their signatures on the financing documents. To conceal his scheme, Macaluso also forged the signatures and stamps of notary publics who purportedly witnessed the executions of these legal documents, but who (like his client) had no knowledge of the arrangements.
United States Attorney Laura E. Duffy commented, “Individuals who have suffered a personal injury should not have to worry about being victimized by their own advocate. The defendant’s conviction should be a stark reminder that attorneys and other fiduciaries will be prosecuted if they fraudulently misuse the privileges society has given them.”
FBI Special Agent in Charge Eric S. Birnbaum commented, “Mr. Macaluso betrayed his clients’ trust by putting his clients’ personal injury recoveries on the hook without their knowledge or consent. The FBI is committed to maintaining the integrity of our justice system by aggressively investigating those individuals that violate their fiduciary responsibilities through fraudulent schemes that victimize the American public.”
Macaluso is scheduled to be sentenced on July 13, 2015, at 9:00 a.m. before U.S. District Court Judge Roger T. Benitez, at which time he will be ordered to pay restitution to all of his victims.
DEFENDANT Case Number: 15cr0948-BEN Todd E. Macaluso Age: 52 Rancho Santa Fe, California CHARGESTitle 18, United States Code, Section 1343 - Wire Fraud. Maximum penalties: 20 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment.
INVESTIGATING AGENCIESFederal Bureau of Investigation
Attorney General Holder Statement on the 75th Anniversary of the NAACP Legal Defense FundRead the Press Release
Attorney General Eric Holder released the following statement on the 75th anniversary of the NAACP Legal Defense Fund:
“On behalf of the United States Department of Justice, I congratulate the NAACP Legal Defense and Educational Fund on 75 years of passionate legal advocacy and extensive educational outreach in its tireless pursuit of equality and justice throughout the nation. Since 1940, the NAACP LDF has stood at the forefront of America’s struggle to ensure that equality under the law is protected by the law. From the historic victory in Brown v. Board of Education, achieved under the leadership of legendary founder Thurgood Marshall, to the wide-ranging efforts of the visionaries who continue to build on Brown’s promise today, the NAACP LDF has made once-unimaginable progress in expanding democracy, drawing attention to persistent disparities, and securing the more just society that all Americans deserve. As this vital organization celebrates 75 years of civil rights achievements, I look forward to all that it will accomplish in the days and years to come.”
Antioch Residents Sentenced to Prison in Tax Fraud SchemeRead the Press Release
OAKLAND – Khyber Law and Jessika Green each were sentenced to one year and a day for conspiring to file false claims, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
Law, 26, of Antioch, pleaded guilty on April 4, 2014, to conspiracy to file false claims in connection with numerous tax-related filings. Green, 33, also of Antioch, pleaded guilty on May 30, 2014, to the same charge. According to their plea agreements, beginning in January 2011, Law and Green assisted in filing several tax returns with the IRS that were false and fraudulent. The defendants admitted that the tax returns were false because the filings included fictitious Forms W-2 that inflated the purported filers’ wages. In some instances, the filings included tax returns filed in Law’s or Green’s name which falsely reported their earnings from a staffing agency. In other instances, the defendants admitted to filing the false tax returns without ever showing the fraudulent tax return to the purported filer.
Law and Green were charged along with a third defendant, Starkisha Benson, in a twenty-four count superseding indictment on Dec. 17, 2013. Law, Green and Benson all were charged with wire fraud, conspiracy to file false claims, filing false claims, effecting fraudulent transactions with an access device, theft of public money, and aggravated identity theft. Law and Green each pleaded guilty to conspiracy to file false claims, in violation of 18 U.S.C. § 286. Benson pleaded guilty to the same charge on October 3, 2014, and was sentenced on January 9, 2015, to 30 months in prison. All three defendants were sentenced to a three year period of supervised release and each was ordered to pay restitution in the amount of $98,927.
The charges against these defendants were the result of an investigation initiated by the Berkeley Police Department. On April 7, 2011, during a search of a vehicle, the Berkeley Police Department uncovered a notebook with Law’s name on the cover. The notebook contained the identity profiles of eleven individuals including their names, dates of birth, numbers of bank accounts, bank routing numbers, email addresses, and passwords. Eight of these identity profiles were used to file false federal income tax returns.
The sentence was handed down by the Honorable Jon S. Tigar, United States District Judge. Special Assistant U.S. Attorney Kate Patchen and Assistant U.S. Attorney Thomas Newman are prosecuting the case. The prosecution is the result of an investigation by the Berkeley Police Department and IRS Criminal Investigation.
Antigo Man Sentenced to 45 Years in Federal Prison for Production of Child PornographyRead the Press Release
United States Attorney James L. Santelle announced today that Thomas A. Gervais (age: 45) of Antigo, Wisconsin, was sentenced yesterday to 45 years imprisonment by United States District Judge William C. Griesbach. Judge Griesbach also ordered a lifetime term of supervised release. The sentence followed his guilty plea to two counts of production of child pornography. The counts charged that he used and coerced two minor females to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct.
According to the complaint and other court documents, in July 2014, law enforcement agents arrested a subject, who lived out of state, on charges involving the sexual exploitation of minors. The subject told law enforcement agents that he communicated with other child pornography producers and traded child pornography with them. Subsequent investigation revealed that Thomas Gervais was one of those producing and trading child pornography with the subject. On October 10, 2014, a federal search warrant was executed at the residence of Thomas Gervais, located in Antigo, Wisconsin. Gervais was arrested and agents recovered additional evidence supporting Gervais’ sexual assault and exploitation of two minor females over the course of several years.
This case was prosecuted in federal court as part of “Project Safe Childhood,” the Department of Justice’s nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children using the internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the Federal Bureau of Investigation, the Antigo Police Department, Langlade County Sheriff’s Department and the Langlade County District Attorney’s Office. The case was prosecuted by Assistant United States Attorney William Roach.
# # # # #
Additional Credit Union Fraud Charges and Firearms Violations Filed Against Leo GlodzikRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Scranton filed a superseding indictment charging Leo Glodzik, age 44, of Wilkes-Barre with additional counts of bank fraud and false statements. In a separate indictment, Glodzik is charged with unlawful possession of three firearms in August 2014.
According to United States Attorney Peter J. Smith, the new fraud charges are part of a continuing investigation involving the Wilkes-Barre City Employees Federal Credit Union. Glodzik allegedly aided in the making of a false statement by using a fraudulent check drawn on a closed bank account as collateral for a $3,500 loan from the credit union to a co-defendant in July 2013.
In a separate indictment, the grand jury charged Glodzik with unlawful possession of three firearms in August 2014, specifically, a shotgun and two rifles. According to the indictment, Gladzik was allegedly a convicted felon at the time, as a result of a previous conviction on a state charge of theft.
No additional charges were brought against other co-defendants in the pending credit union bank fraud conspiracy case which is now part of the superseding indictment. Yesterday the government filed a plea agreement with one of the co-defendants, Tino Ninotti, which is subject to the approval of the court.
The indictments are part of a continuing investigation by the Scranton Office of the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
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.
In this case, the maximum penalty under the federal statute for the firearm charge is 10 years imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. The maximum penalty for the bank fraud charge is 30 years imprisonment, a term of supervised release following imprisonment, and a $1 million 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.
# # #
"C-S.T.A.N.D", "Call-in Meeting"Read the Press Release
Contact Person: Lance Crick (864) 282-2100
“Call-in Meeting”, Wednesday April 15, 2015 at 5:30pm
Conway Recreation Center, 1515 Mill Pond Road, Conway, SC 29526COLUMBIA, South Carolina ---- United States Attorney Bill Nettles stated today that a “call-in meeting” will be held Wednesday, April 15, 2015 at 5:30 pm at the Conway Recreation Center, 1515 Mill Pond Road, Conway, SC 29526. This meeting is open to the public. The program, “C-S.T.A.N.D” an acronym for “Conway – Starting Toward A New Direction” is an application of the Drug Market Intervention program, coordinated by the United States Attorney’s Office and most recently utilized in the Charleston Farms community in North Charleston beginning in 2011. This initiative is a unified, proactive approach that bands together local, state and federal law enforcement with community partners in an effort to eradicate open drug dealing in a multiple block area of Conway. In addition to the federal and state arrests effected last Thursday, several letters, in lieu of arrest warrants, were delivered by law enforcement to lower level targets notifying them of the meeting.
#####
13 April 2015
‘Dr. Commander’ Former Leader of Hindu Temple of Georgia,Read the Press Release
ATLANTA – Annamalai Annamalai, a/k/a Dr. Commander Selvam, a/k/a Swamiji Sri Selvam Siddhar, the former leader of the now defunct Hindu Temple of Georgia, has been sentenced to 27 years, three months in prison following his conviction on 34 felony counts, including bank fraud, tax fraud, bankruptcy fraud, and obstruction charges.
“Annamalai perverted the sacred institution of religion by using it as a vehicle for greed and personal profit,” said Acting U.S. Attorney John A. Horn. “He convinced his victims that they had a problem in need of spiritual guidance, and then took advantage of their vulnerabilities for personal financial gain. The sentence rendered against him is lengthy but just and fair considering the irreparable harm he caused to his victims.”
“Annamalai Annamalai, a self-proclaimed “child prodigy” and “priest”, received his fate today for the fraud that he perpetrated on the faithful followers that believed in him,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “This defendant utilized the nation’s financial system to steal money from unsuspecting victims and then used the money for his own personal benefit. This sentence is a vital element in maintaining public confidence in our legal and financial system.”
According to Acting United States Attorney Horn, the indictment, and other information presented in court: Annamalai generated income through the Hindu Temple of Georgia (“the Hindu Temple”) by charging fees to his followers in exchange for providing spiritual or related services. In a typical transaction, a follower agreed to purchase a particular service for a communicated price, and provided a credit card number by telephone to guarantee payment. Annamalai caused the followers’ credit card numbers to be charged on multiple occasions, in excess of their agreed amount and without authorization.
If the followers disputed the charges with their respective credit card companies, Annamalai submitted false documentation to the credit card companies in support of the unauthorized charges. Annamalai later filed spurious lawsuits against followers who disputed his charges and manipulated audio recordings to make it sound as if the followers had agreed to the disputed charges. Annamalai caused these manipulated audio recordings to be submitted to police departments investigating criminal complaints that were lodged against him.
The income generated by the Hindu Temple through these credit card charges was used to fund the personal lifestyle of Annamalai and his family, who owned or controlled numerous homes and real properties, luxury vehicles, and foreign bank accounts in India.
Following a two-week jury trial, Annamalai was convicted on August 25, 2014, for bank fraud and tax fraud offenses. Annamalai was also convicted of bankruptcy fraud offenses in connection with the Hindu Temple’s petition for bankruptcy protection in August 2009. Annamalai concealed assets from creditors and others by diverting credit card receipts and donations intended for the Hindu Temple to a bank account in the name of a different entity. Annamalai was also convicted of money laundering for using proceeds from the bankruptcy fraud to pay mortgages on properties that he owned, and payments to himself.
Annamalai was also convicted on three counts of obstruction and false statements in connection with the grand jury investigation and the bankruptcy proceeding. Annamalai transmitted a fraudulent email to an IRS Special Agent, which was falsely made to appear as if the email had been written and authored by a witness of the criminal investigation. Annamalai submitted a false affidavit to the grand jury, and a false affidavit to the Bankruptcy Court in connection with the Hindu Temple’s bankruptcy proceeding.
Finally, Annamalai was convicted of conspiring with his spouse and others to conceal the arrest of co-defendant Kumar Chinnathambi.
Annamalai Annamalai, 49, of Baytown, Texas, was sentenced to 27 years, three months in prison.
Chinnathambi, 34, of Baytown, Texas, was later arrested and pleaded guilty to conspiracy to commit bankruptcy fraud on July 17, 2014. He will be sentenced at a later date.
In addition to Annamalai’s prison sentence, U.S. District Court Judge Timothy C. Batten, Sr. also ordered Annamalai to not engage in any spiritual service for compensation, directly or indirectly through intermediaries; and to not file frivolous, abusive, or malicious lawsuits against (1) former customers of the Hindu Temple and related entities, and victims of his criminal schemes; (2) parties, creditors, the Trustee, lawyers, or court personnel involved in the Hindu Temple’s bankruptcy case; and (3) attorneys, government agents, the jury, and court personnel involved in the criminal case. Judge Batten also recommended to the Bureau of Prisons that Annamalai be housed in a “Communications Management Housing Unit,” which is a special facility that will be able to monitor Annamalai’s telephone calls and electronic communications from prison.
This case was investigated by Special Agents of the Internal Revenue Service Criminal Investigation, with valuable assistance from the Federal Bureau of Investigation.
Assistant United States Attorneys Steven D. Grimberg and Samir Kaushal 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/.
Wichita Man Sentenced for Trafficking More than 12,000 Pounds of MarijuanaRead the Press Release
WICHITA, KAN. - A Wichita man was sentenced Monday to 12 years in federal prison for trafficking more than 12,000 pounds of marijuana over a period of two years, U.S. Attorney Barry Grissom said.
Jeremy Harris, 33, Wichita, Kan., pleaded guilty to one count of conspiracy to distribute marijuana. In his plea, he admitted obtained and distributed the marijuana in Kansas during a period from 2011 to 2013. The plea agreement states:
- On Aug. 2, 2013, Harris received a bulk marijuana shipment near Augusta, Kan. Investigators seized 35 steel containers that contained a total of more than 1,000 pounds of marijuana.
- One of Harris’ co-conspirators admitted driving a vehicle from El Paso, Texas, to Wichita more than 15 times, each time transporting more than 150 pounds of marijuana.
- Other conspirators were responsible from transporting marijuana from Texas to Kansas, and for transporting bulk cash to Texas and Mexico for payment.
- Harris paid for marijuana with bulk cash or by making wire transfers as directed. On one occasion, he asked another conspirator to deliver $70,000 in cash to Mexico to pay for marijuana. On another occasion, he asked another conspirator to deposit cash into the account of a third party to transfer drug proceeds. On another occasion, three conspirators transported $170,000 to El Paso to pay for marijuana.
Co-defendants included:
Jason Giesy, who was sentenced to 87 months in federal prison.
Evan Woolsey, who was sentenced to 72 months.
Grissom commended the Wichita Police Department, the Drug Enforcement Administration, Assistant U.S. Attorney Debra Barnett and Special Assistant U.S. Attorney Michelle Jacobs for their work on the case.
Urbandale Man Charged with St.Charles, Iowa RobberyRead the Press Release
DES MOINES, IOWA – Hassam Fayiz Abusharkh, 35, of Urbandale, Iowa, appeared in federal court on a criminal complaint alleging that Abusharkh robbed the Farmers and Merchants State Bank in St. Charles, Iowa, on March 25, 2015. Abusharkh made his initial appearance before United States Chief Magistrate Judge Celeste F. Bremer, who ordered that Abusharkh remain detained pending presentment of his case to a federal grand jury.
The public is reminded that a criminal complaint is merely an accusation, and that Abusharkh is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was investigated by the Madison County Sheriff’s Office and the Federal Bureau of Investigation, and is being prosecuted by the United States Attorney’s Office for the Southern District of Iowa. The United States Attorney’s Office does not anticipate making any further statements about this matter at this time.
U.S. Attorney’s Office and Cook County State’s Attorney’s Office Conducting Joint Investigation of Police Shooting DeathRead the Press Release
CHICAGO — Federal officials confirmed today that they are conducting a criminal investigation into the death of Laquan McDonald, 17, who died on Oct. 20, 2014, during an encounter with Chicago Police. McDonald, who was armed with a knife, was near West 41st Street and South Pulaski Road on the city’s southwest side, when he was shot and killed during an encounter with police.
United States Attorney Zachary T. Fardon confirmed the investigation along with FBI Special Agent in Charge Robert J. Holley and Cook County State’s Attorney Anita Alvarez. The joint investigation is being led by the Chicago Office of the Federal Bureau of Investigation in coordination with the Independent Police Review Authority, the U.S. Attorney’s Office, and the Cook County State’s Attorney’s Office.
Two Defendants Plead Guilty in Bakersfield Mortgage Fraud SchemeRead the Press Release
FRESNO, Calif. — Lucia Chavez, 37, and her husband Joseph Chavez, 41, both of Bakersfield, pleaded guilty today to conspiracy to commit bank fraud, mail fraud, and wire fraud, in connection with a mortgage fraud scheme in Bakersfield, U.S. Attorney Benjamin B. Wagner announced. As part of their plea agreements, Lucia Chavez agreed to a personal forfeiture money judgment of $1,624,450, and Joseph Chavez agreed to a personal forfeiture money judgment of $3,092,000.
According to court documents, Lucia Chavez and Joseph Chavez conspired with seven co-defendants from 2007 to 2010 to use straw buyers to purchase residential properties in Bakersfield developed by Pershing Partners LLC, owned by Lucia Chavez, and Jara Brothers Investments (JBI), owned by her brothers, co-defendants Eliseo Jara and Sergio Jara. The conspirators paid straw buyers to purchase the properties from JBI and Pershing Partners, and funded the purchases using loans they obtained for the straw buyers from lenders based on false and fraudulent loan applications. The loan applications the conspirators submitted to lenders frequently contained false statements concerning the straw buyers’ employment status, income, assets, intent to occupy the properties as their personal residences, and source of down payments for the purchase of the properties. The conspirators concealed from the lenders that they funded certain of the straw buyers’ down payments. The conspirators also submitted false supporting documentation to lenders such as false and altered bank account statements purporting to show that the straw buyers had high bank account balances, false verifications of the straw buyers’ bank account funds, false verifications of rent purporting to be from straw buyers’ landlords, false pay stubs, and false verifications of employment.
This case is the product of an investigation by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff, Henry Z. Carbajal III, and Megan A.S. Richards are prosecuting the case.
The court set a sentencing hearing for the Chavez defendants on July 20, 2015. The maximum sentence for the conspiracy charge is 30 years in prison and a $1 million fine. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The other seven co-defendants all previously pleaded guilty in this case. Co-defendant Antonio Perez-Marcial was sentenced on May 12, 2014 to 3 years and 10 months in prison for his role in the conspiracy. Co-defendants Eliseo Jara, Sergio Jara, Arlene Mojardin, and Candace Gonzales each pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud, and are scheduled to be sentenced on the following dates: May 18, 2015 (Arlene Mojardin), June 8, 2015 (Candace Gonzales), and June 22, 2015 (Eliseo Jara and Sergio Jara). Co-defendant Melissa Jara pleaded guilty to wire fraud and is to be sentenced on June 22, 2015. Co-defendant Ricardo Salinas previously pleaded guilty to bank fraud, and his sentencing is set for June 29, 2015.
Docket #: 1:12-cr-213 AWI
Tuscola Businessman Charged with Income Tax EvasionRead the Press Release
Springfield, Ill. – A Tuscola, Ill., businessman is scheduled to appear for arraignment later this month on federal charges that he allegedly failed to pay more than $1.12 million in income tax for the 2008 and 2009 tax years. Last week, a grand jury returned the indictment charging Lorenzo Shane Stewart, owner of Ten Acres Excavating, Tuscola, with two counts of income tax evasion. Stewart’s arraignment has been scheduled on April 29, 2015, in Urbana.
According to court documents, in 2006, Stewart, 48, began conducting his excavation and construction business under the name Ten Acre Excavating. Stewart put the business under the name of one of his employees, although Stewart allegedly operated the business and received the income generated from the business. As a result, Stewart did not claim income generated by Ten Acre Excavating on his own tax returns.
In approximately July 2008, Stewart was awarded contracts to perform excavating and construction work on several natural gas pipeline substations that were being built in the Tuscola area in 2008 and 2009. Stewart and his employees performed work on these substations and received checks related to this pipeline work totaling approximately $1.7 million in 2008 and $5.9 million in 2009. Stewart allegedly claimed his adjusted gross income for 2008 was approximately $74,199, when in fact, the indictment alleges his adjusted gross income for 2008 was approximately $279,803. For 2009, Stewart allegedly claimed his adjusted gross income was approximately $257,361, when in fact, his adjusted gross income was approximately $3,044,980.
If convicted, each count carries a penalty of up to five years in prison, a $100,000 fine plus the costs of prosecution, and restitution.
The charge is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Three Men Sentenced in Alien Smuggling ConspiracyRead the Press Release
HOUSTON – Three people have been sentenced for their involvement in a conspiracy to harbor and transport illegal aliens, announced U.S. Attorney Kenneth Magidson along with Brian Moskowitz, special agent in charge of Homeland Security Investigations (HSI). Jose Heriberto Lopez, 42, Jose Arenas-Lucero, 51, and Miguel Angel Medina-Ortiz, 37, pleaded guilty in September, October and November 2014, respectively.
Today, U.S. District Judge Vanessa Gilmore considered relevant conduct for an incident in Oklahoma which involved the death of an alien being transported by Lopez. As a result, he received a sentence of 70 months in federal prison. Arenas-Lucero and Medina-Ortiz received respective sentences of 24 and 18 months. All are all citizens of Mexico who had resided in Houston and expected to face deportation proceedings following completion of their federal prison sentences.
Lopez and others engaged in a conspiracy to harbor and transport illegal aliens from April 2014, until his arrest June 12, 2014. Authorities discovered a stash house in Houston following a 911 call. HSI ultimately discovered 34 undocumented aliens being held in the house that had boarded up windows.
The undocumented aliens claimed the defendants would take their shoes, phones and other property upon entry into the home. The illegal aliens were detained at the house by guards until their families had paid the rest of their bill for transportation further into the United States. Lopez and Arenas-Lucero were guards in the home and occasionally drove the aliens to their next destination. Medina-Ortiz was involved in the payment portion of the scheme.
The three defendants have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI investigated. Assistant U.S. Attorney Celia Moyer prosecuted the case.
Three Former Beaumont ISD Employees Sentenced in Warehouse Fraud SchemeRead the Press Release
BEAUMONT, Texas — Three former Beaumont Independent School District employees have been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Daryl Glenn Johnson, 44, of Beaumont, pleaded guilty on Dec. 4, 2014, to conspiracy and was sentenced to 33 months in federal prison today by U.S. District Judge Ron Clark. Erin Gipson Johnson, 38, of Beaumont, and Kailyn DeShondra Pete, 25, of Beaumont, each pleaded guilty on Dec. 4, 2014 to fraud upon programs receiving federal funds. They were both sentenced to 5 years probation today by Judge Clark.
Daryl Johnson was ordered to pay $284,039.42 in restitution. He is jointly and severally liable with Erin Johnson for $193,998.37, and jointly and severally liable with Kailyn Pete for $90,041.05.
According to information presented in court, from July 2009 through June, 2012, Daryl Johnson, who was employed as the warehouse supervisor for the school district, first his wife, Erin Johnson, and then a friend, Kailyn Pete, placed on the BISD payroll as temporary employees. However, neither Erin Johnson nor Kailyn Pete ever actually worked as a BISD warehouse employee. Daryl Johnson had the autonomy to hire temporary warehouse employees on his own, and the authority to determine how many hours they would be paid, and could do so unilaterally and without the authorization or direct knowledge of anyone else. Daryl Johnson used this authority to fraudulently verify that both Erin Johnson and Kailyn Pete worked the hours indicated on their respective timesheets, which included extensive amounts of overtime when he knew that they in fact had not worked any of the hours. From July 2009 through May 2011, Erin Johnson was paid $193,998.37. During the timeframe of June 2010 through May 2012, Kailyn Pete was paid $90,041.05.
This case was investigated by the joint Task Force with the Jefferson County District Attorney’s Office, the Beaumont Police Department, and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Joe Batte and Christopher T. Tortorice.
Three Floydada Men Face Federal Drug Distribution Conspiracy ChargesRead the Press Release
LUBBOCK, Texas — Three residents of Floydada, Texas, who were arrested on Friday by special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), made their initial appearances in federal court this afternoon on drug distribution conspiracy charges outlined in a federal complaint that was just unsealed, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Victor Alaniz, 34, Michael Alaniz, 32, and Jonathan Molina, 22, each appeared this afternoon before U.S. Magistrate Judge Nancy M. Koenig, who ordered that they remain in custody pending further hearings set for Wednesday, April 15, 2015.
On April 9, 2015, law enforcement obtained a federal search warrant for 508 W. Lee Street and 510 W. Lee Street in Floydada. Victor Alaniz and a 9mm semi-automatic pistol were located inside 508 W. Lee Street.
Law enforcement located Michael Alaniz and Jonathan Molina inside 510 W. Lee Street. A search of that residence yielded approximately 54 grams of methamphetamine, approximately 25 grams of cocaine, and approximately 30 grams of cocaine base. Additionally, digital scales, plastic bags and writing consistent with a drug ledger were located in the residence. Jonathan Molina had nearly six grams of cocaine in his pocket.
A federal criminal 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 ATF and the Floydada County Sheriff’s Office are investigating. Assistant U.S. Attorney Jeffrey R. Haag is in charge of the prosecution.
Tampa Man Indicted for Traveling to Engage in Unlawful Sexual Activity with A Missouri MinorRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Stephen Farris Underwood (46, Tampa) with coercion and enticement, transportation of a minor with the intent to engage in criminal sexual activity, and traveling to meet a minor with the intent to engage in illicit sexual conduct. If convicted on all counts, he faces a maximum penalty of life in federal prison.
According to the indictment, Underwood traveled from Tampa to Missouri to meet a minor with whom he had been corresponding online. Underwood picked up the minor from a Missouri shopping center and transported him to Underwood’s residence in Tampa. It was Underwood’s intent that he and the minor would live together as a couple in Florida. The parents of the minor, who was fifteen at the time, did not give Underwood permission to leave the state with their son.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Hillsborough County Sheriff’s Office, the Mountain View (Missouri) Police Department, and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Stacie B. Harris.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Solaroli Pleads Guilty to Money LaunderingRead the Press Release
LITTLE ROCK – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation Nashville Field Office; David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation; and Christy Romero, Special Inspector General for TARP (SIGTARP), announced today that Alberto Solaroli, 60, of Jacksonville, Fla., pled guilty on April 10, 2015, to an Information charging him with money laundering. The charge relates to a $120,000 wire transfer from One Bank and Trust of Little Rock, Ark. (Onebanc), to a bank in Florida where Solaroli controlled an account.
Friday’s plea hearing took place in Little Rock before Chief District Judge Brian S. Miller. An indictment charging Solaroli with bank fraud was dismissed after he pled guilty to money laundering.
“Deceiving banks through fraudulent pretenses ends up hurting our entire banking industry,” Thyer said. “We are committed to investigating and prosecuting those who take advantage of the good will of bank depositors. When people try to steal from banks by deceiving banking officers all banking customers suffer, and our faith in the banking industry is undermined. Those who try to steal from our community’s banks with lies rather than force will be prosecuted.”
In November 2013 a federal grand jury returned an indictment against Solaroli, a Canadian citizen purporting to be the owner of patents for technology related to engine technology for race cars, related to a $1.5 million personal line of credit he borrowed from Onebanc in 2007. In early 2007, Solaroli was introduced to a Senior Vice President at Onebanc by a friend who was also Onebanc customer. As a result of the introduction, Solaroli met with the Onebanc Senior Vice President in Jacksonville, Fla., where the defendant lived and worked. The defendant requested a $1,500,000 loan from Onebanc in April 2007, stating that his cash flow was tied up at the time. As a result of Solaroli’s personal written financial statement submitted to Onebanc, which listed his net worth as $169,473,680, the bank made a $1,500,000 line of credit available to the defendant to be repaid in one year.
Immediately after receiving the approval of his loan application, Solaroli instructed the Onebanc Senior Vice President to wire $120,000 to a bank account in Florida that Solaroli controlled, in the name of CET Racing. The defendant eventually received all $1,500,000, but never made a payment on any of the monies he received from the line of credit. In later efforts by the bank to collect on a judgment against Solaroli, Solaroli admitted under oath that the financial statement he submitted to Onebanc was false.
The money laundering charge carries a statutory sentence of not more than 10 years’ imprisonment, not more than a $250,000 fine, and not more than three years of supervised. Solaroli will be sentenced by Judge Miller at a later date.
The case was investigated by special agents from the IRS-Criminal Investigations, Federal Bureau of Investigation, SIGTARP, and the Federal Reserve. The case is prosecuted by First Assistant United States Attorney Pat Harris and Assistant United States Attorney Angela Jegley.
Second Member of Lawrence Kidnapping Crew Sentenced to 16 Years in PrisonRead the Press Release
BOSTON – A Lawrence man was sentenced today to 16 years in prison for his role in a 2012 kidnapping.
Julio Gonzalez, 30, was sentenced to 16 years in prison and three years of supervised release after pleading guilty in November 2014 to conspiracy to commit kidnapping.
Gonzalez was part of a kidnapping crew headed by Alfred Vasquez. On Jan. 30, 2012, Vazquez, Gonzalez, Edgar Acevedo, Alberto Moreno, and Deborah Torres, all of Lawrence, held a gun to a victim and kidnapped him from a street in the Jamaica Plain neighborhood in Boston. Through Vasquez, the crew demanded a $100,000 ransom for the victim’s release and, joined by William Ayala, held the victim in Lawrence for five days. After agents interceded, the victim was rescued, unharmed, in Lawrence. Among other evidence, members of the crew were identified by fingerprint and DNA evidence.
Gonzalez is the second member of this Lawrence-based kidnapping crew to be sentenced. In March 2015, Acevedo was sentenced to 16 years in prison.
The charge of conspiracy to commit kidnapping provides for a sentence of life in prison. Actual sentences for federal crimes are typically less than the maximum penalty. Sentences are imposed based upon the U.S. Sentencing Guidelines and other statutory factors.
This case is part of a two-year investigation by the U.S. Attorney’s Office, the Federal Bureau of Investigation, the Massachusetts State Police, the Lawrence Police Department, and other law enforcement agencies into violent kidnapping and home invasion crews operating in Lawrence. According to affidavits and other documents filed in court, the investigation revealed that the majority of these kidnappings were carried out by organized, armed, violent crews often referred to as Joloperros (loosely translated as “Stick-up Guys”). These Joloperros crews typically kidnapped drug dealers for large ransoms, paid in cash and/or drugs; used safe houses to hold their hostages; and sometimes assaulted and burned their victims while they held them captive. These crews also frequently used sophisticated tracking techniques, such as GPS devices, to follow their victims before the abductions, and at times used associates in the Dominican Republic to receive ransom money.
United States Attorney Carmen M. Ortiz; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Chief James Fitzpatrick of the Lawrence Police Department; Commissioner William Evans of the Boston Police Department; Chief Domenic J. DiMella of the Saugus Police Department, made the announcement today. The cases are being prosecuted by Assistant U.S. Attorneys Peter K. Levitt, Christopher Pohl, and Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit.
Rochester Man Sentenced on Gun and Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul announced today that Peter Barclay, 31, of Rochester, NY, who was convicted of possession of heroin with intent to distribute and being a convicted felon in possession of a firearm, was sentenced to 78 months in prison by U.S. District Judge Elizabeth A. Wolford.Assistant U.S. Attorney Charles E. Moynihan, who handled the case, stated that on May 17, 2012, Rochester Police Officers went to the area of Ellison Street to investigate a report of a single shot being fired. Officers approached Barclay, who was with another person, to see if they had information about the incident. The defendant became verbally abusive towards the officers and, when asked for identification, threw his New York State Identification on the ground near the officers. Barclay then ran into the residence at 214 Ellison Street.
Officers went to the address and were met by Barclay and his family who let the officers into the residence to look around. Officers located a .9mm semi-automatic pistol, ammunition, and approximately 445 grams of heroin. The defendant admitted to possessing both the firearm and the heroin.
The sentencing is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Office and the Rochester Police Department, under the direction of Chief Michael Ciminelli.
Richmond Man Sentenced to 144 Months for Distributing Child PornographyRead the Press Release
LEXINGTON — A Richmond man, who previously admitted to making images of child pornography available for download on the internet, has been sentenced to 144 months in federal prison.
U.S. District Judge Joseph M. Hood sentenced 53-year-old Mark Douglas Taylor for distribution of child pornography and ordered him to be under the supervision of the U.S. Probation Office for 10 years following his release. Under federal law, Taylor must serve at least 85 percent of his sentence.
According to Taylor’s plea agreement, an undercover investigator with the Office of the Kentucky Attorney General, downloaded several files from the internet that she suspected contained child pornography. Law enforcement later identified Taylor’s computer as the source of the child pornography files. Then, in February 2014, law enforcement executed a search warrant at his residence and located numerous images depicting prepubescent children engaged in sexually explicit conduct on his computer.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Jack Conway, Kentucky Attorney General; and Howard Marshall, Special Agent in Charge of the FBI, jointly made the announcement today.
The investigation was conducted by the FBI and the Office of the Kentucky Attorney General. Assistant U.S. Attorney David A. Marye prosecuted this case on behalf of the federal government.
Quality Egg, Company Owner and Top Executive Sentenced in Connection with Distribution of Adulterated EggsRead the Press Release
The company owner, a top executive and their company, Quality Egg LLC, were sentenced today in federal district court in Sioux City, Iowa, the Department of Justice announced.
Austin “Jack” DeCoster, 81, of Turner, Maine, who owned Quality Egg, was sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000. His son, Peter DeCoster, 51, of Clarion, Iowa, who was Quality Egg’s chief operating officer, was also sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000. Quality Egg was sentenced to pay a fine of $6.79 million and placed on probation for three years. All three defendants were ordered to make restitution in the total amount of $83,008.19. Quality Egg also agreed to forfeit $10,000 as part of its plea agreement with the government. The defendants were sentenced by U.S. District Court Judge Mark W. Bennett in the Northern District of Iowa.
On June 3, 2014, Quality Egg, an egg production company with operations in Wright County, Iowa, pleaded guilty to one count of bribery of a public official, one count of introducing a misbranded food into interstate commerce with intent to defraud and one count of introducing adulterated food into interstate commerce. Jack and Peter DeCoster each pleaded guilty to one count of introducing adulterated food into interstate commerce. In plea agreements, the company and the father and son admitted that the company’s shell eggs were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis, which may have rendered the eggs injurious to health.
During the spring and summer of 2010, adulterated eggs produced and distributed by Quality Egg were linked to approximately 1,939 reported consumer illnesses in multiple states—a nationwide outbreak of salmonellosis that led to the August 2010 recall of millions of eggs produced by the defendants.
“The message this prosecution and sentence sends is a stern one to anyone tempted to place profits over people’s welfare,” said the U.S. Attorney Kevin W. Techau of the Northern District of Iowa. “Corporate officials are on notice. If you sell contaminated food you will be held responsible for your conduct. Claims of ignorance or 'I delegated the responsibility to someone else’ will not shield them from criminal responsibility.”
“American consumers deserve to feel secure that the eggs they eat are safe and produced in sanitary conditions,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will pursue and prosecute those whose criminal conduct compromises the safety of our food supply.”
“Food manufacturers have a responsibility to produce and sell food that is safe for consumers to eat,” said Dr. Stephen Ostroff, U.S. Food and Drug Administration (FDA) Acting Commissioner. “Eggs are commonly consumed nationwide, both on their own and as ingredients in other foods. When manufacturers fail to produce safe food, the FDA will take action to protect public health.”
As noted in the government’s memorandum regarding sentencing, Quality Egg personnel had, for years, disregarded food safety standards and practices and misled major customers, including Walmart, about the company’s food safety practices. In the memorandum filed with the court, the government noted that since 2006, the company had commissioned tests to detect Salmonella Enteriditis in its layer barns and in the organs of its layer hens, that the results came back positive on 47 percent of the days tested, and that the frequency of positive test results grew in the months leading up to the August 2010 recall. As part of the memorandum, the government also argued that the evidence indicated that Quality Egg personnel took steps to conceal from regulators and customers the company’s failures to follow food safety standards and practices, that Quality Egg created food safety plans that included inaccurate claims about the company’s biosecurity and pest control practices, and that Quality Egg falsified documents for the food safety audits required by various customers.
Quality Egg pleaded guilty to bribing an inspector of the U.S. Department of Agriculture (USDA) to release eggs that had been retained for quality issues. Quality Egg acknowledged that, on at least two occasions in 2010, its employees gave a cash bribe to a USDA inspector. The USDA inspector’s job responsibilities included inspecting shell eggs at one or more of Quality Egg’s production facilities in Iowa. Quality Egg admitted that its employees provided the bribe to the USDA inspector (now deceased) in an attempt to corruptly influence the inspector to exercise his authority to release pallets of retained eggs for sale without re-processing the eggs as required by law and USDA standards. The eggs had been retained or “red tagged” for failing to meet minimum USDA quality grade standards. Former Quality Egg employee Tony Wasmund, 64, of Willmar, Minnesota, pleaded guilty in September 2012 to one count of conspiracy to bribe a public official, sell restricted eggs with intent to defraud and introduce misbranded food into interstate commerce with intent to defraud and mislead. Wasmund is scheduled to be sentenced by U.S. District Court Judge W. Bennett on May 15 at 8:30 a.m.
Quality Egg also pleaded guilty to introducing misbranded eggs into interstate commerce with the intent to defraud. As part of its plea agreement, Quality Egg admitted that, beginning no later than January 2006 and continuing through Aug. 12, 2010, its employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs. Quality Egg acknowledged that there were a number of ways that the company mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states. Sometimes Quality Egg personnel did not put any processing or corresponding expiration dates on the eggs when they were processed. The eggs would be kept in storage for several days or up to several weeks. Then, just prior to shipping the eggs, Quality Egg personnel labeled the eggs with processing dates that were false in that the dates were more recent than the dates that the eggs had actually been processed and with corresponding false expiration dates.
The case was prosecuted by Assistant U.S. Attorney Peter Deegan of the Northern District of Iowa and Trial Attorneys Lisa Hsiao and Christopher Parisi of the Civil Division’s Consumer Protection Branch. They were assisted by Associate Chief Counsel Michael Varrone of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division. The case was investigated by FDA’s Office of Criminal Investigations, the USDA’s Office of Inspector General and the FBI.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-3024.
Quality Egg, Company Owner and Top Executive Sentenced in Connection with Distribution of Adulterated EggsRead the Press Release
Sioux City, Iowa – The company owner, a top executive and their company, Quality Egg LLC, were sentenced today in federal district court in Sioux City, Iowa, the United States Attorney’s Office for the Northern District of Iowa announced.
Austin “Jack” DeCoster, 81, of Turner, Maine, who owned Quality Egg, was sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000. His son, Peter DeCoster, 51, of Clarion, Iowa, who was Quality Egg’s Chief Operating Officer, was also sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000. Quality Egg was sentenced to pay a fine of $6.79 million and placed on probation for three years. All three defendants were ordered to make restitution in the total amount of $83,008.19. Quality Egg also agreed to forfeit $10,000 as part of its plea agreement with the government. The defendants were sentenced by U.S. District Court Judge Mark W. Bennett in the Northern District of Iowa.
On June 3, 2014, Quality Egg, an egg production company with operations in Wright County, Iowa, pleaded guilty to one count of bribery of a public official, one count of introducing a misbranded food into interstate commerce with intent to defraud and one count of introducing adulterated food into interstate commerce. Jack and Peter DeCoster each pleaded guilty to one count of introducing adulterated food into interstate commerce. In plea agreements, the company and the father and son admitted that the company’s shell eggs were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis, which may have rendered the eggs injurious to health.
During the spring and summer of 2010, adulterated eggs produced and distributed by Quality Egg were linked to approximately 1,939 reported consumer illnesses in multiple states—a nationwide outbreak of salmonellosis that led to the August 2010 recall of millions of eggs produced by the defendants.
"The message this prosecution and sentence sends is a stern one to anyone tempted to place profits over people's welfare. Corporate officials are on notice. If you sell contaminated food you will be held responsible for your conduct. Claims of ignorance or ‘I delegated the responsibility to someone else’ will not shield them from criminal responsibility,” said U.S. Attorney Kevin W. Techau for the Northern District of Iowa.
“American consumers deserve to feel secure that the eggs they eat are safe and produced in sanitary conditions,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will pursue and prosecute those whose criminal conduct compromises the safety of our food supply.”
Dr. Stephen Ostroff, FDA Acting Commissioner, said, “Food manufacturers have a responsibility to produce and sell food that is safe for consumers to eat. Eggs are commonly consumed nationwide, both on their own and as ingredients in other foods. When manufacturers fail to produce safe food, the FDA will take action to protect public health.”
As noted in the government’s memorandum regarding sentencing, Quality Egg personnel had, for years, disregarded food safety standards and practices and misled major customers, including Walmart, about the company’s food safety practices. In the memorandum filed with the court, the government noted that since 2006, the company had commissioned tests to detect Salmonella Enteriditis in its layer barns and in the organs of its layer hens, that the results came back positive on 47 percent of the days tested, and that the frequency of positive test results grew in the months leading up to the August 2010 recall. As part of the memorandum, the government also argued that the evidence indicated that Quality Egg personnel took steps to conceal from regulators and customers the company’s failures to follow food safety standards and practices, that Quality Egg created food safety plans that included inaccurate claims about the company’s biosecurity and pest control practices, and that Quality Egg falsified documents for the food safety audits required by various customers.
Quality Egg pleaded guilty to bribing an inspector of the U.S. Department of Agriculture (USDA) to release eggs that had been retained for quality issues. Quality Egg acknowledged that, on at least two occasions in 2010, its employees gave a cash bribe to a USDA inspector. The USDA inspector’s job responsibilities included inspecting shell eggs at one or more of Quality Egg’s production facilities in Iowa. Quality Egg admitted that its employees provided the bribe to the USDA inspector (now deceased) in an attempt to corruptly influence the inspector to exercise his authority to release pallets of retained eggs for sale without re-processing the eggs as required by law and USDA standards. The eggs had been retained or “red tagged” for failing to meet minimum USDA quality grade standards. Former Quality Egg employee Tony Wasmund, 64, of Willmar, Minnesota, pleaded guilty in September 2012 to one count of conspiracy to bribe a public official, sell restricted eggs with intent to defraud and introduce misbranded food into interstate commerce with intent to defraud and mislead. Wasmund is scheduled to be sentenced by U.S. District Court Judge W. Bennett on May 15 at 8:30 a.m.
Quality Egg also pleaded guilty to introducing misbranded eggs into interstate commerce with the intent to defraud. As part of its plea agreement, Quality Egg admitted that, beginning no later than January 2006, and continuing through Aug. 12, 2010, its employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs. Quality Egg acknowledged that there were a number of ways that the company mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states. Sometimes Quality Egg personnel did not put any processing or corresponding expiration dates on the eggs when they were processed. The eggs would be kept in storage for several days or up to several weeks. Then, just prior to shipping the eggs, Quality Egg personnel labeled the eggs with processing dates that were false in that the dates were more recent than the dates that the eggs had actually been processed and with corresponding false expiration dates.
The case was prosecuted by Assistant U.S. Attorney Peter Deegan of the Northern District of Iowa and Trial Attorneys Lisa Hsiao and Christopher Parisi of the Civil Division’s Consumer Protection Branch, U.S. Department of Justice. They were assisted by Associate Chief Counsel Michael Varrone of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division. The case was investigated by the Food and Drug Administration’s Office of Criminal Investigations, the USDA’s Office of Inspector General and the FBI.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-3024.
Follow us on Twitter @USAO_NDIA
Pine Lawn Mayor Pleads Guilty to Extortion ChargesRead the Press Release
St. Louis, MO – The mayor of Pine Lawn, Missouri, SYLVESTER CALDWELL, has pled guilty to charges involving the extortion of cash payments from the owner of a local towing company and from the owner of a Pine Lawn convenience store.
According to court documents, from December 2013 through April 2014, special agents with the Federal Bureau of Investigation ("FBI") were conducting an ongoing public corruption investigation into the activities of defendant Sylvester Caldwell ("the defendant"), who was Mayor of the City of Pine Lawn, Missouri. As Mayor, the defendant exercised authority and control over which towing company provided the primary towing service for the City of Pine Lawn. During the public corruption investigation, the owner of a towing company, who was cooperating with the FBI, met with the defendant on several occasions for the purpose of making cash payments to the defendant at the defendant’s request, in order to remain as the primary towing service for Pine Lawn.
On at least five occasions, the defendant met with the tow company owner at various locations within the Eastern District of Missouri and accepted cash payments, which the defendant had requested in exchange for continuing to give work to the towing company. These payments included the following: December 20, 2013 - $300; December 30, 2013 - $200; January 16, 2014 - $300; February 21, 2014 - $500; and March 27, 2014 - $300. At times, the defendant used coded language when requesting the cash payments. For example, the defendant commanded the tow company owner to place "green Mountain Dew in a cup," which was code for directing that the cash be placed in a disposable cup and handed to the defendant. The defendant also induced payments by threatening to use a competing towing company.
From at least February 2013 through September 2014, Mayor Caldwell also extorted numerous payments of money from the owner of a convenience store known as Pine Lawn Market. Defendant attempted to disguise the payments as donations to the City of Pine Lawn. The owner paid the money to defendant out of fear that defendant would make trouble for the store. The owner of the store also allowed defendant to take goods from the store out of fear that his business could suffer economic harm if he refused.
Caldwell, Florissant, Missouri, pleaded guilty to one count of Attempted Extortion and one count of Extortion before United States District Judge Catherine D. Perry. Sentencing has been set for July 7, 2015.
Each of these charges carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys Reginald Harris and Anthony Franks are handling the case for the U.S. Attorney’s Office.
Perry Hall Man Sentenced in Scheme to Defraud the City of BaltimoreRead the Press Release
Baltimore, Maryland - U.S. District Judge George L. Russell III sentenced Robert Johnson, age 33, of Perry Hall, Maryland, today to a year and a day in prison followed by three years of supervised release, and ordered him to serve 75 hours of community service, for wire fraud conspiracy and aggravated identity theft related to a scheme to defraud the City of Baltimore through the reissuance of fraudulent checks for pay and benefits.
On March 4, 2015, a federal jury convicted co-defendant Denita Hill, age 26, of Baltimore, of wire fraud conspiracy and two counts of aggravated identity theft, related to the scheme.
The sentence and trial conviction were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
Johnson worked in the Consumer Relations Service of the U.S. Department of Veteran’s Affairs. Denita Hill was an accountant in the Finance Department of the City of Baltimore.
Baltimore City employees who leave their employment are entitled to a lump sum check of any pay and benefits for which they are qualified. According to his guilty plea and court documents, from July 11, 2013 to August 2, 2013, Johnson and Hill used the financial and identity information of former Baltimore City employees to request fraudulent employee benefit payout checks. Hill identified individuals who had received and cashed large lump sum payments and then requested that such checks be reissued, as if they had not been received. These duplicate checks were printed at the Baltimore City Finance Office, where Hill stole the checks. Hill delivered the checks to Johnson, endorsed to him and purportedly signed by the original payee. Johnson endorsed and cashed the checks, deposited the proceeds into his bank account and used the funds for his and Hill’s benefit.
For example, on July 11, 2013, Johnson deposited a check fraudulently endorsed to Johnson with the victim’s forged signature, and made out to the victim in the amount of $14,741.09. On July 31, 2013, Johnson deposited a check made out to a second victim in the amount of $58,485.91. Again, the check was endorsed to Johnson with the second victim’s forged signature. Both victims had previously received and cashed their initial lump sum payment checks and the duplicate checks were issued and endorsed to Johnson without their knowledge or permission.
After Johnson attempted to wire some of the funds to pay off an account at a different financial institution, Johnson’s bank was alerted to the suspicious transactions and referred the matter to the City of Baltimore Office of the Inspector General, who sought the assistance of the Finance Department in determining the authenticity of the endorsements. Hill was tasked with the investigation and notified Johnson of the problem. Hill attempted to derail the investigation and obtain release of the funds by the bank by claiming to have spoken with the check recipients, who purportedly confirmed that the endorsements were genuine. In fact, neither statement was true. Meanwhile, Johnson’s bank had reversed the deposits and returned the funds to the City of Baltimore, leaving a large deficit in Johnson’s account balance. Johnson obtained funds from Hill to repay the amount due.
Over the course of the conspiracy, Johnson and Hill fraudulently obtained approximately $70,000 all of which was ultimately recovered.
Denita Hill faces a maximum sentence of 20 years in prison for the wire fraud conspiracy; and two years in prison, consecutive to any other sentence imposed, on each of two counts for aggravated identity theft. Judge Russell has scheduled her sentencing for May 19, 2015 at 2:00 p.m.
United States Attorney Rod J. Rosenstein praised the Baltimore Office of Inspector General, Baltimore City Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Tamera L. Fine and Special Assistant U.S. Attorney Josh J. Felsen, a cross-designated Baltimore City Assistant State’s Attorney, who prosecuted the case.
Pair who worked in Toledo real estate business indicted for $1.5 million conspiracyRead the Press Release
Two people who worked in the real estate business in the Toledo area were indicted for their roles in a $1.5 million conspiracy to defraud several banks, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Timothy R. Bradley, 40, now of Cary, N.C., and Martha E. Ednie, 53, of Toledo, were each indicted on one count of conspiracy to commit bank fraud and multiple counts of bank fraud.
Bradley worked as a real estate agent working for various brokerages in the Toledo area, while Ednie was a mortgage broker who operated Apex Mortgage Company. Beginning in 2005, Bradley and Ednie conspired with others to obtain fraudulent mortgage loans by concealing the true purchase price from banks making the loans, according to the indictment.
The true purchase price was represented by an “addendum” to the real estate contract, which lowered the purchase price. These addendums were signed near the time of closing and were concealed from the lenders. Unbeknownst to the lenders, they were loaning the home purchasers between 82 percent and 135 percent of each home’s value based on the adjusted addendum purchase price, according to the indictment.
Bradley was listed as the real estate agent on the contracts and Ednie secured financing in her role as mortgage broker. Bradley and others attracted buyers to the scheme by advertising the properties as good sources of rental income and assuring cash back at closing, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Internal Revenue Service-Criminal Investigations, Toledo. The case is being handled by Assistant United States Attorney Gene Crawford.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Olathe Man Pleads Guilty to Casino Money Laundering, Drug TraffickingRead the Press Release
KANSAS CITY, KAN. - An Olathe man pleaded guilty Monday to his role in a scheme to launder profits from marijuana trafficking through a casino in Kansas City, Kan., U.S. Attorney Barry Grissom said.
Christopher Anderson, 31, Olathe, Kan., pleaded guilty to one count of conspiracy to distribute marijuana and one count of conspiracy to commit money laundering. In his plea, he admitted he and other conspirators inserted more than $470,000 in proceeds of drug trafficking into slot machines at the Hollywood Casino in Kansas City, Kan. Then they cashed out at an ATM machine in the casino without playing. Their purpose was to convert small denomination bills into large denomination bills that were easier to transport from Kansas to California.
Anderson also admitted the following:
- The trafficking organization to which he belonged cultivated marijuana in California and transported it to the Kansas City area for distribution.
- During the early days of the organization, traffickers mailed Home Depot buckets and basketballs containing marijuana from California to Kansas. Over time, they began to drive cars carrying marijuana from California to Kansas, and money from Kansas to California.
- The conspirators also used Money Grams to send cash from Kansas to California.
Sentencing will be scheduled at a later time. Anderson faces a maximum penalty of 20 years in federal prison and a fine up to $500,000 on the money laundering charge and a maximum penalty of five years and a fine up to $250,000 on the drug distribution charge. Grissom commended the Kansas Bureau of Investigation, the Johnson County Sheriff’s Office, the U.S. Secret Service and Special Assistant U.S. Attorney Erin Tomasic for their work on the case.
Ohio Man Arrested, Charged with FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Paul Lacey, 56, of Youngstown, Ohio, was arrested and charged by criminal complaint with participating in a wire fraud scheme. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Bradley E. Tyler, who is handling the case, stated that according to the complaint, Lacey traveled from Ohio to Georgia to open a bank account with Bank of America into which approximately $250,00 had been illegally transferred from an attorney’s account in Dansville, NY. With the knowledge that he had no legal right to the proceeds in the Bank of America account, the defendant then withdrew large sums of cash from the account.
Lacey made an initial appearance today before U.S. Magistrate Judge Marian W. Feldman. The defendant be detained pending a detention hearing on April 15, 2015 at 10:30 a.m.
The criminal complaint is the result of an investigation by the Federal Bureau of Investigation in Rochester, NY, Atlanta, Georgia and Youngstown, Ohio.
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.
Nolin Rural Electric Cooperative Corporation of Elizabethtown, Kentucky, Enters A Non-Prosecution Agreement and Civil Settlement with the United States Related to Fort Knox BillingsRead the Press Release
Nolin RECC agrees to pay $7,619,333
LOUISVILLE, Ky. - Acting United States Attorney John E. Kuhn, Jr. announced today that the United States has entered into a Non-Prosecution Agreement with Nolin Rural Electric Cooperative Corporation (Nolin RECC) of Elizabethtown, Kentucky, related to bills submitted to Fort Knox under an Army energy-saving program. Under the terms of the agreement, Nolin RECC will pay the United States $2,619,333 as part of a civil settlement, and will forfeit an additional $5 million to the United States Marshals Service, for a total settlement amount of $7,619.333. In addition, Nolin RECC has agreed to employ a corporate ethics monitor for two years to oversee its dealings with the federal government.
“The Agreements we announce today result from an extensive investigation of the Ft. Knox energy program,” stated Acting United States Attorney John Kuhn. “The investigation uncovered criminal acts and millions of dollars in questionable payments. We have vigorously pursued justice by prosecuting responsible parties and now, with these Agreements, recovering over $7.6 million in questionable payments. The settlement also brings about an important correction to ensure compliance with program requirements going forward.”
Brian J. Reihms, Defense Criminal Investigative Service (DCIS) Special Agent-in-Charge, stated, “DCIS is dedicated to working with our investigative partners to investigate the conduct of DoD officials and contractors and ensuring the integrity of the procurement system.”
As part of the civil Settlement Agreement and the Non-Prosecution Agreement, the United States and Nolin RECC agreed to the relevant facts in Appendix A to the Non-Prosecution Agreement, which describes the conduct in question. In exchange for the total civil settlement amount of $2,619,333, the United States has released civil claims under the False Claims Act, the Procurement Integrity Act, the Program Fraud Civil Remedies Act and common law causes of action.
In 1996, Nolin RECC and Fort Knox entered into a Utility Energy Service Contract (UESC), which authorized and enabled Fort Knox and Nolin RECC to undertake energy saving projects. Each project was called an Energy Conservation Opportunity (ECO). Since 1996, Fort Knox awarded 108 ECOs to Nolin RECC, which were intended to make Fort Knox more energy efficient and were cumulatively valued at approximately $270 million. By design, the projected savings associated with each ECO project were intended to offset the cost of each project.
In early 2010, Nolin RECC billed Fort Knox $199,020 for work performed and expenses incurred related to a proposed waste-to-energy project that was never approved for implementation. Because the proposed ECO was not approved, Nolin RECC submitted a bill for expenses under another unrelated ECO that had been approved. $398,040, representing double damages for these unauthorized expenses, has been recovered by the United States as part of the civil settlement.
Similarly, in 2010, Nolin RECC worked on a Sample Solar Panel Project at Fort Knox. Although this project was never authorized or approved by the Fort Knox Contracting Officer, Nolin RECC billed the Sample Solar Panel Project costs of $94,178 under three unrelated but previously authorized ECOs. $12,394, representing double damages on Nolin RECC’s profits, has been recovered by the United States as part of the civil settlement.
Pursuant to ECOs 70 and 102, Nolin RECC became involved in the extraction of natural gas from Fort Knox land. Pursuant to those ECOs, Nolin RECC was authorized to bill Fort Knox for the gas at a specified rate. Notwithstanding the ECO rate definition, Nolin RECC billed Fort Knox in excess of the rate allowed by the ECOs, adding an additional sum characterized as "Retained Savings." This additional billing amounted to $800,089 more than the amount authorized by the ECOs. As part of the civil settlement, Nolin has agreed that Fort Knox will receive credit for these payments.
Nolin RECC understood that the Army required that all ECOs pay for themselves within ten years. Between 2002 and May 2008, Nolin RECC presented pro formas to the Army for twenty proposed ECOs which gave the impression that these twenty ECOs paid for themselves within ten years and were projected to save over $7 million in ten years. In fact, these twenty ECOs were actually projected to lose over $15 million over ten years. None of these twenty ECOs paid for themselves within ten years, and therefore, they should not have been authorized by the Army. These twenty ECOs resulted in over $8,000,000.00 in payments to Nolin RECC. Nolin RECC is forfeiting $5,000,000 to the United States as a result of the improperly authorized ECOs.
Nolin RECC has also paid double damages to the United States in connection with hiring Gary T. Meredith as its Resource Energy Manager (REM). Before becoming Nolin RECC's REM in August 2007, Meredith was employed by Fort Knox as its Energy Program Manager, working closely with Nolin RECC in that capacity for more than a decade.
The ECO for the REM position required Nolin RECC to comply with the Joint Ethics Regulations (Regulations which incorporate ethics statutes Meredith is charged with violating). The United States will recover $1,408,810, double the amount Nolin RECC received to pay Meredith for the REM position. Meredith is currently charged in a 38-count federal superseding indictment with conflict of interest and wire fraud for actions he took as an Army employee and as the Nolin RECC REM. His case is set for trial on December 1, 2015. Meredith’s co-defendant, Matthew Bowman, a former Army attorney, pleaded guilty on October 1, 2014, to providing a false written statement to a DCIS Special Agent investigating Meredith.
On September 8, 2014, the Department of Defense, Office of Inspector General (DoD OIG) issued an audit report that documented the results of an independent audit conducted on Ft. Knox’s energy program. The audit concluded that “Fort Knox officials did not properly award and administer 108 task orders, valued at about $270 million, for energy-saving projects. In addition, Fort Knox officials could not support the claim that projects achieved the projected energy savings. The audit further found that “the lack of adequate internal controls increases the risk of fraud, waste, and abuse.” The full audit can be viewed here: http://www.dodig.mil/reports.html/Article/1119054/fort-knox-and-the-army-need-to-improve-internal-controls-for-utility-energy-ser/
This agreement is neither an admission of liability by Nolin RECC nor a concession by the United States that its claims regarding the covered conduct are not well-founded.
The legal work for the criminal investigation and matter was handled by Assistant United States Attorney David Weiser, the civil matter by Assistant United States Attorney William F. Campbell, and the forfeiture by Assistant United States Attorney Amy Sullivan. The investigation was conducted by the Defense Criminal Investigative Service, Dayton Resident Agency. The Defense Contract Audit Agency and Army Criminal Investigations Command also supported the investigation.
Monmouth County, New Jersey, Man Admits Possessing Explicit Images of 12-Year Old Pennsylvania GirlRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted possessing sexually explicit images of a 12-year old Pennsylvania girl with whom he had an online relationship, U.S. Attorney Paul J. Fishman announced.
Chad Weber, 22, of Colt’s Neck, New Jersey, pleaded guilty today before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of possessing images of child pornography.
According to documents filed in the case and statements made in court:
In April 2013, law enforcement agents learned Weber had been communicating with a 12-year-old girl from Pennsylvania. The agents obtained and reviewed copies of various chat logs and other internet-based messages, which reflect Weber’s online communications with the victim between February 2013 and April 2013. Many of these communications were sexually explicit. Weber and the victim also traded sexually explicit photographs of each other through the internet and discussed the photographs in online chats. During some of these communications, Weber acknowledged that the victim was 12 years old. Weber admitted possessing these sexually explicit photographs of the minor victim on his cell phone and computer.
As part of his guilty plea, Weber must forfeit the computer and cell phone he used to commit the offense. He will also be required to register as a sex offender.
The possession of child pornography count to which Weber pleaded guilty carries a statutory maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for June 22, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Kevin Kelly in Newark, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton
Miami Office Manager Convicted for Her Participation in Medicare Fraud SchemeRead the Press Release
A former office manager of a Miami based physical and occupational therapy clinic was convicted, following a four day trial, for her participation in a scheme that involved the fraudulent submission of more than $3.3 million dollars in false billing to Medicare.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Shimon Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), made the announcement.
Defendant Rossana Caneiro, 41, of Miami Lakes, was convicted of conspiracy to commit health care fraud and six substantive counts of health care fraud.
Evidence presented at trial showed that Caneiro had managed and operated Flagler Rehabilitation Center, Inc., a Miami based physical and occupational therapy clinic, for five years. The defendant was responsible for patient appointments, Medicare billing, the scheduling of therapy sessions, and was the point of contact for co-conspirator therapists who worked at the facility. Caneiro facilitated the fraudulent conduct at Flagler Rehabilitation Center, Inc. by directing the co-conspirator therapists to write fraudulent evaluations and other falsified documents for patients that were not actually treated at the clinic. The falsified physical and occupational therapy evaluations were prepared in an effort to conceal the Medicare fraud.
The defendant faces a maximum possible sentence of ten years in prison for each count of conviction.
Mr. Ferrer commended the investigative efforts of HHS-OIG. The case was prosecuted by Assistant U.S. Attorneys James V. Hayes and Amanda Perwin of the U.S. Attorney’s Office for the Southern District of Florida, in coordination with the Fraud Section of the Justice Department’s Criminal Division and the Medicare Strike Force.
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.
Miami Dade College Student Sentenced to 51 Months in Prison for Stolen Identity Tax Refund Fraud Scheme Involving Student Financial Services AccountsRead the Press Release
A Miami Dade College student was sentenced to 51 months in prison, followed by 3 years of supervised release, and was ordered to pay restitution in the amount of $29,289, for his participation in a stolen identity tax refund fraud scheme involving student financial services accounts.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Smith Jean, 23, previously pled guilty to one count of conspiracy to commit an offense against the United States and one count of theft of government property or money.
According to court documents, from October 15, 2012 to September 23, 2013, Jean participated in a tax fraud scheme with co-defendant Beatrice Simeon, 22, and other co-conspirators. During the course of the scheme, the co-conspirators received fraudulently obtained U.S. Department of Treasury tax refunds into their personal Higher One, Inc. (HOI) accounts. HOI provided financial services to colleges and universities throughout the United States, including Miami Dade College in the Southern District of Florida.
Jean opened his HOI account when he enrolled as a student at Miami Dade College. Jean and his co-conspirators set up their HOI accounts to allow for the receipt of the fraudulently obtained federal income tax refunds. After the stolen tax refunds were deposited into Jean’s HOI account, the defendant withdrew the fraudulently obtained monies for his own personal benefit. Jean recruited co-defendant Simeon to participate in the tax fraud scheme by offering her a financial incentive, in exchange for the deposit of stolen tax refunds into Simeon’s HOI account. Simeon agreed to participate in the tax fraud scheme and provided Jean with her HOI account number.
Jean and other unknown co-conspirators submitted thirty-eight (38) false and fraudulent tax returns, claiming $263,415 in tax refunds to be deposited into Simeon’s HOI account. Jean and the co-conspirators also submitted twenty-four (24) false and fraudulent tax returns, claiming $81,076 in tax refunds to be deposited into Jean’s HOI account.
Co-defendant Simeon previously pled guilty to one count of conspiracy to commit an offense against the United States and one count of theft of government property or money. Simeon was sentenced to five years of probation by U.S. District Judge Ursula Ungaro.
Mr. Ferrer commended the investigative efforts of IRS-CI and the FBI. The case is being prosecuted by Assistant U.S. Attorney Gera R. Peoples.
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.
Mexican National Sentenced to Five Years for Federal Narcotics Trafficking ChargesRead the Press Release
ALBUQUERQUE – Ernesto Felix, 52, of Sinaloa, Mexico, was sentenced today in federal court in Albuquerque, N.M., to 60 months in federal prison for his methamphetamine trafficking conviction. He will be deported following his prison sentence.
Felix is one of 29 individuals charged in Feb. 2014, with drug trafficking offenses as the result of a multi-agency investigation targeting drug trafficking in northwestern New Mexico. The investigation culminated on Feb. 26, 2014, when 26 of the defendants were arrested during a law enforcement operation led by Homeland Security Investigation (HSI) and the HIDTA Region II Narcotics Task Force. Two other defendants were arrested during the course of the investigation and the final defendant was arrested on March 3, 2014.
The 29 defendants were charged as a result of Operation “Brown Ice,” a year-long investigation that initially targeted a methamphetamine trafficking organization led by Isaac Anaya that distributed quantities of methamphetamine throughout San Juan County and expanded to include other drug trafficking activity in the area. The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Thirteen of the defendants, including ringleader Isaac Anaya, 31, of Farmington, were charged in a 15-count federal indictment alleging a conspiracy to distribute methamphetamine in San Juan County from May 2013 through Sept. 2013. The remaining 16 defendants were charged with state drug trafficking and firearms offenses based on criminal complaints. During the course of the investigation, officers seized approximately five pounds of methamphetamine and five firearms. The law enforcement operation on Feb. 24, 2014, included the execution of eleven federal search warrants at two Bloomfield residences, four Farmington residences, two residences in San Juan County, two Bloomfield businesses, two Farmington businesses and a storage unit in Bloomfield. It also included the execution of three state search warrants at two residences in San Juan County and one Farmington residence. Officers seized numerous firearms, including a fully automatic Glock 19, a short-barreled rifle and a carbine with an obliterated serial number, four blasting caps, four small binary explosives and approximately 31.7 grams of methamphetamine during the execution of the search warrants and the law enforcement operation.
On Jan. 12, 2015, Felix pled guilty to Count 4 of the indictment and admitted that on July 31, 2013, in San Juan County, N.M., he and co-defendant Wesley Contreras, 20, of Farmington, N.M., were transporting approximately 891 grams of methamphetamine from Arizona to New Mexico when they were apprehended by law enforcement. Felix admitted that he and Contreras were paid to transport the drugs.
Contreras has entered a not guilty plea to the indictment. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
The federal and state cases filed as a result of Operation “Brown Ice” were investigated by the HSI office in Albuquerque, San Juan County Sheriff’s Office, HIDTA Region II Narcotics Task Force, Bloomfield Police Department, Farmington Police Department and Aztec Police Department. Assistant U.S. Attorneys Reeve L. Swainston and Shana B. Long are prosecuting the federal case, and Assistant District Attorney David Cowen of the 11th Judicial District Attorney’s Office is prosecuting the state cases.
The HIDTA Region II Task Force is comprised of officers and investigators from the Farmington Police Department, San Juan County Sheriff’s Office, Bloomfield Police Department and Aztec Police Department, and is part of 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.
Mexican Man Pleads Guilty on Eve of Trial to Trafficking MethamphetamineRead the Press Release
LAREDO, Texas - Andres Villarreal-Parades, 28, of Nuevo Laredo, Mexico, has been convicted of possession with intent to distribute more than 500 grams of methamphetamine, announced U.S. Attorney Kenneth Magidson. Villarreal-Parades was set to begin trial tomorrow, but instead opted to plead guilty today.
Parades admitted trafficking 20.5 kilograms of crystal methamphetamine containing a 95% purity-level.
On July 28, 2014, authorities arrested co-conspirator Gilberto Jorge Rodriguez for a traffic violation, at which time they seized approximately 20.5 kilograms of crystal methamphetamine. Upon further investigation, authorities identified Villarreal-Parades as the person who arranged the drug load.
Villarreal-Parades was arrested Aug. 21, 2014, and seized telephones that were associated with the drug conspiracy. Through analysis, agents were able to connect the two defendants and discovered a drug operation that shipped large bulk methamphetamine from Laredo to Houston and Dallas.
The conspiracy spanned February through July 2014, during which time approximately 100 kilograms of methamphetamine, valued at millions of dollars, were moved throughout the United States.
Rodriguez, 48, of Laredo, pleaded guilty in December 2014.
U.S. District Judge Marina Garcia-Marmolejo, who accepted both of the pleas, will set sentencing a later date. At that hearing, each faces a minimum of 10 years and up to life in federal prison and a possible $10 million maximum fine.
This charges are the result of an investigation by Homeland Security Investigations, police departments in Freer and Laredo as well as the High Intensity Drug Trafficking Area Task Force. Assistant U.S. Attorney (AUSA) Sanjeev Bhasker and former AUSA Raul Guerra prosecuted the case.
Marydel Woman Sentenced for Embezzling over $1.2 Million from Her EmployerRead the Press Release
Greenbelt, Maryland - U.S. District Judge George J. Hazel sentenced Janice McCumbie, age 45, of Marydel, Maryland, today to 37 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with a scheme to steal over $1.2 million from a consulting company. Judge Hazel entered an order that McCumbie forfeit and pay restitution of $1,249,267.53, the loss resulting from her conduct.
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 her plea agreement, McCumbie worked for a global consulting business that had offices in Maryland and elsewhere. Clients paid large retainers to secure consulting services. The consulting company would issue refund checks to the clients in certain circumstances, including when a client’s retainer exceeded the amount of work that the consulting company actually performed or when the client made duplicate payments to the consulting company. McCumbie’s duties included coordinating client refunds.
Between June and December 2008, McCumbie caused the consulting company to issue six fraudulent refund checks totaling $121,081.22 to a co-conspirator in exchange for a share of the check proceeds.
From February 2009 to October 2013, McCumbie caused the consulting company to issue 42 false refund checks totaling $910,490.74 to co-defendant Leonard Smedley in exchange for a share of the check proceeds. Similarly, from October 2010 to November 2013, McCumbie caused the consulting company to issue 17 false refund checks totaling $217,695.57 to her niece, co-defendant Amber Gayleard, who cashed the checks and shared the proceeds with McCumbie. Smedley and Gayleard were not clients of the consulting company.
Leonard Smedley II, age 35, of Capitol Heights, Maryland; Amber Gayleard, age 29, of Schuylkillhaven, Pennsylvania, and Brian Hooper, age 43, of Woodbridge, Virginia previously pleaded guilty to the conspiracy. Judge Hazel sentenced: Hooper to 27 months in prison and ordered him to pay restitution of $1,031,571.96; Gayleard to 21 months in prison and ordered her to pay restitution of $217,695.57; and Smedley to 18 months in prison and ordered him to pay restitution of $910,490.74.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorneys Leah Jo Bressack and David Salem, who prosecuted the case.
Man Convicted for Bronx Home Invasion Robbery of Quadriplegic and OthersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and William Bratton, Commissioner of the New York City Police Department (NYPD), announced today that RALPH NOLAN was found guilty of conspiracy to commit robbery, attempted robbery, and brandishing a firearm during and in relation to the attempted robbery following a one-week trial before United States District Judge George B. Daniels. The jury convicted NOLAN Friday, April 10, 2015, for his role in connection with a December 2013 home invasion robbery in the Bronx, New York.
Manhattan U.S. Attorney Preet Bharara stated: “Ralph Nolan terrorized the occupants of a Webster Avenue apartment in the Bronx by tying them up at gunpoint during the commission of a brutal robbery. Now, justice has been served for the victims of this heinous crime.”
ATF Special Agent in Charge Reid stated: “This swift and decisive conviction will definitely resonate with the public in that it clearly shows that the ATF and its law enforcement partners will relentlessly pursue those criminals who prey on the innocent. These depraved acts will not be tolerated. The defendant will now live a large part of his future within a prison cell and be reminded daily of that fact.”
NYPD Commissioner Bratton stated: “I want to thank the NYPD investigators and the prosecutors with the US Attorney's Office, Southern District whose hard work resulted in the conviction of this individual."
According to the allegations in the Indictment against NOLAN and evidence admitted at trial:
On December 16, 2013, NOLAN and two co-conspirators planned and executed an armed home invasion robbery of an apartment in the Bronx, New York, that belonged to a quadriplegic woman. The robbers believed that the apartment contained drugs and drug proceeds. During the course of the robbery, NOLAN, who was armed with a handgun, pistol-whipped one of the apartment occupants and restrained the victims with telephone cords and cable wires before making off with electronics and other items.
NOLAN was convicted of one count of conspiracy to commit robbery and one count of attempted robbery, each carrying a maximum sentence of 20 years in prison. In addition, NOLAN was convicted of one count of brandishing a firearm during and in relation to the attempted robbery, which carries a maximum sentence of life in prison. NOLAN is scheduled to be sentenced August 11, 2015, before Judge Daniels. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
NOLAN, 26, of Gloversville, New York was arrested July 28, 2014. He was remanded pending sentencing.
Mr. Bharara praised the outstanding investigative work of the ATF and NYPD.
The prosecution is being handled by the Office’s Violent and Organized Crime United. Assistant U.S. Attorneys Richard Cooper and Russell Capone represented the government at trial.